Innoviva Reports Third Quarter 2020 Financial Results
- Royalties increased by 33% to
$92.2 million in the third quarter of 2020, compared to the same quarter in 2019. - Invested an additional
$12.5 million into the common stock and warrants ofEntasis Therapeutics Holding Inc. (NASDAQ: ETTX), a leader in anti-infectives development.
- Gross royalty revenues of
$92.2 million fromGlaxo Group Limited (“GSK”) for the third quarter of 2020 included royalties of$63.9 million from global net sales of RELVAR®/BREO® ELLIPTA®, royalties of$11.9 million from global net sales of ANORO® ELLIPTA® and royalties of$16.4 million from global net sales of TRELEGY® ELLIPTA®.1 - Decrease in fair values of equity investments of
$29.4 million was mainly due to the lower stock prices of Armata Pharmaceuticals Inc. andEntasis Therapeutics Holdings, Inc. as ofSeptember 30, 2020 . - Income before income taxes decreased by 12% to
$50.5 million , compared to the same quarter in 2019. - Net cash and cash equivalents, short-term investments and marketable securities, excluding
$4.3 million cash balance attributable to a variable interest entity, totaled$474.9 million , and receivables from GSK totaled$92.2 million , as ofSeptember 30, 2020 .
ANORO® ELLIPTA® global net sales increased by 3% in the third quarter of 2020 compared to the same quarter of 2019.
“As the market environment has continued to normalize, we are pleased with the performance of our products due to excellent underlying demand,” said
Recent Highlights
- GSK Net Sales:
- Third quarter 2020 net sales of RELVAR®/BREO® ELLIPTA® by GSK were
$426.0 million , up 38% from$309.5 million in the third quarter of 2019, with$219.2 million in net sales from the U.S. market and$206.8 million from non-U.S. markets. - Third quarter 2020 net sales of ANORO® ELLIPTA® by GSK were
$182.8 million , up 3% from$177.7 million in the third quarter of 2019, with$111.5 million net sales from the U.S. market and$71.3 million from non-U.S. markets. - Third quarter 2020 net sales of TRELEGY® ELLIPTA® by GSK were
$251.9 million , up 46% from$172.8 million in the third quarter of 2019, with$165.3 million in net sales from the U.S. market and$86.6 million in net sales from non-U.S. markets.
- Third quarter 2020 net sales of RELVAR®/BREO® ELLIPTA® by GSK were
- Capital Allocation:
- During the third quarter of 2020, the Company invested additional
$12.5 million in 4.7 million shares of common stock ofEntasis Therapeutics, Inc. , a company focused on development of novel anti-bacterial therapies for multi-drug resistant Gram-negative bacteria, which pose well acknowledged public health risk and a rapidly growing medical need, and warrants to purchase up to an additional 4.7 million shares of the common stock at$2.675 per unit. With this additional investment,Innoviva owned approximately 52.6% of Entasis’ outstanding common stock as ofSeptember 30, 2020 .
- During the third quarter of 2020, the Company invested additional
1 For TRELEGY ® ELLIPTA®,
About
ANORO®, RELVAR®, BREO®, TRELEGY® and ELLIPTA® are trademarks of the GlaxoSmithKline group of companies.
Forward Looking Statements
This press release contains certain “forward-looking” statements as that term is defined in the Private Securities Litigation Reform Act of 1995 regarding, among other things, statements relating to goals, plans, objectives and future events.
Condensed Consolidated Statements of Income | |||||||||||
(in thousands, except per share data) | |||||||||||
(Unaudited) | |||||||||||
Three Months Ended |
|
Nine Months Ended |
|||||||||
|
|
|
|||||||||
2020 |
|
2019 |
|
2020 |
|
2019 |
|||||
Revenue: | |||||||||||
Royalty revenue from a related party, net (1) |
$ |
88,694 |
$ |
65,755 |
$ |
236,318 |
$ |
185,045 |
|||
Revenue from collaborative arrangements with a related party |
|
- |
|
- |
|
10,000 |
|
- |
|||
Total net revenue |
|
88,694 |
|
65,755 |
|
246,318 |
|
185,045 |
|||
Operating expenses: | |||||||||||
Research and development |
|
1,010 |
|
- |
|
1,569 |
|
- |
|||
General and administrative |
|
3,254 |
|
4,962 |
|
8,413 |
|
12,324 |
|||
Total operating expenses |
|
4,264 |
|
4,962 |
|
9,982 |
|
12,324 |
|||
Income from operations |
|
84,430 |
|
60,793 |
|
236,336 |
|
172,721 |
|||
Other income (expense), net |
|
(13) |
|
(115) |
|
85 |
|
(122) |
|||
Interest income |
|
41 |
|
1,624 |
|
1,501 |
|
4,002 |
|||
Interest expense |
|
(4,603) |
|
(4,693) |
|
(13,680) |
|
(13,971) |
|||
Changes in fair values of equity investments |
|
(29,368) |
|
- |
|
39,245 |
|
- |
|||
Income before income taxes |
|
50,487 |
|
57,609 |
|
263,487 |
|
162,630 |
|||
Income tax expense, net |
|
8,866 |
|
10,558 |
|
44,689 |
|
29,499 |
|||
Net income |
|
41,621 |
|
47,051 |
|
218,798 |
|
133,131 |
|||
Net income attributable to noncontrolling interest |
|
13,403 |
|
7,242 |
|
48,299 |
|
21,792 |
|||
Net income attributable to |
$ |
28,218 |
$ |
39,809 |
$ |
170,499 |
$ |
111,339 |
|||
Basic net income per share attributable to |
$ |
0.28 |
$ |
0.39 |
$ |
1.68 |
$ |
1.10 |
|||
Diluted net income per share attributable to |
$ |
0.26 |
$ |
0.36 |
$ |
1.53 |
$ |
1.01 |
|||
Shares used to compute basic net income per share |
|
101,358 |
|
101,191 |
|
101,306 |
|
101,134 |
|||
Shares used to compute diluted net income per share |
|
113,572 |
|
113,415 |
|
113,543 |
|
113,394 |
|||
(1) Total net revenue from a related party is comprised of the following (in thousands):
Three Months Ended |
|
Nine Months Ended |
|||||||||
|
|
||||||||||
2020 |
|
2019 |
|
2020 |
|
2019 |
|||||
(unaudited) |
|
(unaudited) |
|||||||||
Royalties from a related party |
$ |
92,150 |
$ |
69,211 |
$ |
246,686 |
$ |
195,413 |
|||
Amortization of capitalized fees paid to a related party |
|
(3,456) |
|
(3,456) |
|
(10,368) |
|
(10,368) |
|||
Royalty revenue from a related party, net |
$ |
88,694 |
$ |
65,755 |
$ |
236,318 |
$ |
185,045 |
Condensed Consolidated Balance Sheets | |||||
(in thousands) | |||||
|
|
|
|||
2020 |
|
2019 |
|||
(unaudited) |
|
(1) |
|||
Assets | |||||
Cash, cash equivalents and marketable securities |
$ |
479,193 |
$ |
350,845 |
|
Other current assets |
|
92,848 |
|
80,389 |
|
Property and equipment, net |
|
33 |
|
33 |
|
Equity investments |
|
111,745 |
|
- |
|
Capitalized fees paid to a related party, net |
|
128,708 |
|
139,076 |
|
Deferred tax assets, net |
|
109,490 |
|
154,171 |
|
Other assets |
|
239 |
|
312 |
|
Total assets |
$ |
922,256 |
$ |
724,826 |
|
Liabilities and stockholders’ equity | |||||
Other current liabilities |
$ |
2,230 |
$ |
1,219 |
|
Accrued interest payable |
|
1,668 |
|
4,152 |
|
Convertible subordinated notes, net |
|
239,638 |
|
239,217 |
|
Convertible senior notes, net |
|
143,712 |
|
137,903 |
|
Other long-term liabilities |
|
136 |
|
219 |
|
|
485,556 |
|
313,495 |
||
Noncontrolling interest |
|
49,316 |
|
28,621 |
|
Total liabilities and stockholders’ equity |
$ |
922,256 |
$ |
724,826 |
(1) The selected consolidated balance sheet amounts at
Cash Flows Summary | |||||
(in thousands) | |||||
Nine Months Ended |
|||||
2020 |
|
2019 |
|||
(unaudited) |
|||||
Net cash provided by operating activities |
$ |
227,833 |
$ |
190,553 |
|
Net cash provided by (used in) investing activities |
|
544 |
|
(69,997) |
|
Net cash used in financing activities |
|
(27,280) |
|
(10,027) |
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