Innoviva Reports Second Quarter 2019 Financial Results
-
Total net revenue decreased by 4% to
$64.1 million in the second quarter of 2019, compared to the same quarter in 2018. -
Income before income taxes decreased slightly to
$56.5 million in the second quarter of 2019, compared to the same quarter in 2018.
-
Gross royalty revenues of
$67.6 million fromGlaxo Group Limited (“GSK”) for the second quarter of 2019 included royalties of$47.1 million from global net sales of RELVAR®/BREO® ELLIPTA®, royalties of$10.6 million from global net sales of ANORO® ELLIPTA® and$9.9 million from global net sales of TRELEGY® ELLIPTA®.1 -
Total operating expenses for the second quarter of 2019 were
$4.3 million , compared with$4.4 million in the second quarter of 2018. Stock-based compensation for the second quarter of 2019 was$0.5 million compared to$1.5 million for the second quarter of 2018. -
Net cash and cash equivalents, short-term investments and marketable securities totaled
$249.7 million , and royalties receivable from GSK totaled$67.6 million , as ofJune 30, 2019 .
“Global net sales of RELVAR®/BREO® ELLIPTA® decreased 18% versus the second quarter of 2018. U.S. net sales declined 44% as increased pricing discounts in the ICS/LABA sector offset volume growth. Non-U.S. sales growth accelerated from the first quarter of 2019 and increased 13% versus the second quarter of 2018, driven by continued market share gains in certain European markets and growth in
“ANORO® ELLIPTA® global net sales decreased slightly versus the second quarter of 2018. U.S. net sales fell 9%, compared to the same quarter of 2018, as increased pricing pressure, a negative inventory adjustment, and higher levels of sales through market segments with higher rebates offset growth in the LAMA/LABA class. Non-U.S. ANORO® ELLIPTA® net sales grew 18% year over year in the quarter. The rate of growth increased from the first quarter of 2019 even after a negative impact from foreign currency translation. On a CER basis, ANORO® ELLIPTA® non-U.S. net sales grew 24%. In addition, TRELEGY® ELLIPTA global net sales were
Hulme continued, “In the quarter, U.S. RELVAR®/BREO® ELLIPTA® net sales were impacted in part by weaker pricing that occurred in the wake of the launch of generic versions of Advair. Non-U.S. net sales for RELVAR®/BREO® ELLIPTA® grew strongly year over year and comprised nearly two-thirds of global net sales of RELVAR®/BREO® ELLIPTA®.”
“During the second quarter, our core operating expenses were similar to the levels in the first quarter. Some additional expenses were incurred in the second quarter in the evaluation of strategic options. The ratio of operating cash flow to net royalty revenues remained strong. Management and the board continue to examine potential strategic actions to maximize future shareholder value.”
Recent Highlights
-
GSK Net Sales:
-
Second quarter 2019 net sales of RELVAR®/BREO® ELLIPTA® by GSK were
$313.9 million , down 18% from$383.4 million in the second quarter of 2018, with$116.4 million in net sales from the U.S. market and$197.5 million from non-U.S. markets. -
Second quarter 2019 net sales of ANORO® ELLIPTA® by GSK were
$163.6 million , down slightly from$163.9 million in the second quarter of 2018, with$102.2 million net sales from the U.S. market and$61.4 million from non-U.S. markets. -
Second quarter 2019 net sales of TRELEGY® ELLIPTA® by GSK were
$151.4 million , up significantly from$36.5 million in the second quarter of 2018, with$109.5 million in net sales from the U.S. market and$41.9 million in net sales from non-U.S. markets.
-
Second quarter 2019 net sales of RELVAR®/BREO® ELLIPTA® by GSK were
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.
INNOVIVA, INC. | |||||||||||||||
Condensed Consolidated Statements of Operations | |||||||||||||||
(in thousands, except per share data) | |||||||||||||||
(Unaudited) | |||||||||||||||
Three Months Ended |
|
Six Months Ended |
|||||||||||||
June 30, |
|
June 30, |
|||||||||||||
2019 |
|
2018 |
|
2019 |
|
2018 |
|||||||||
Revenue: | |||||||||||||||
Royalty revenue from a related party, net (1) |
$ |
64,107 |
|
$ |
67,086 |
|
$ |
119,290 |
|
$ |
119,466 |
|
|||
Operating expenses: | |||||||||||||||
General and administrative |
|
4,347 |
|
|
4,411 |
|
|
7,362 |
|
|
10,222 |
|
|||
General and administrative - cash severance expenses |
|
- |
|
|
- |
|
|
- |
|
|
3,174 |
|
|||
General and administrative - related party |
|
- |
|
|
- |
|
|
- |
|
|
2,700 |
|
|||
Total operating expenses |
|
4,347 |
|
|
4,411 |
|
|
7,362 |
|
|
16,096 |
|
|||
Income from operations |
|
59,760 |
|
|
62,675 |
|
|
111,928 |
|
|
103,370 |
|
|||
Other income (expense), net |
|
(8 |
) |
|
39 |
|
|
(7 |
) |
|
(3,060 |
) |
|||
Interest income |
|
1,403 |
|
|
380 |
|
|
2,378 |
|
|
771 |
|
|||
Interest expense |
|
(4,661 |
) |
|
(6,478 |
) |
|
(9,278 |
) |
|
(14,135 |
) |
|||
Income before income taxes |
|
56,494 |
|
|
56,616 |
|
|
105,021 |
|
|
86,946 |
|
|||
Income tax expense, net |
|
10,433 |
|
|
- |
|
|
18,941 |
|
|
- |
|
|||
Net income |
|
46,061 |
|
|
56,616 |
|
|
86,080 |
|
|
86,946 |
|
|||
Net income attributable to noncontrolling interest |
|
8,321 |
|
|
1,990 |
|
|
14,550 |
|
|
2,739 |
|
|||
Net income attributable to Innoviva stockholders |
$ |
37,740 |
|
$ |
54,626 |
|
$ |
71,530 |
|
$ |
84,207 |
|
|||
Basic net income per share attributable to Innoviva stockholders |
$ |
0.37 |
|
$ |
0.54 |
|
$ |
0.71 |
|
$ |
0.84 |
|
|||
Diluted net income per share attributable to Innoviva stockholders |
$ |
0.34 |
|
$ |
0.49 |
|
$ |
0.65 |
|
$ |
0.77 |
|
|||
Shares used to compute basic net income per share |
|
101,151 |
|
|
100,873 |
|
|
101,105 |
|
|
100,739 |
|
|||
Shares used to compute diluted net income per share |
|
113,391 |
|
|
113,399 |
|
|
113,384 |
|
|
113,483 |
|
(1) Total net revenue from a related party is comprised of the following (in thousands): | |||||||||||||||
Three Months Ended |
|
Six Months Ended |
|||||||||||||
June 30, |
June 30, |
||||||||||||||
2019 |
|
2018 |
|
2019 |
|
2018 |
|||||||||
(unaudited) |
|
|
|
|
|||||||||||
Royalties from a related party |
$ |
67,563 |
|
$ |
70,542 |
|
$ |
126,202 |
|
$ |
126,378 |
|
|||
Amortization of capitalized fees paid to a related party |
|
(3,456 |
) |
|
(3,456 |
) |
|
(6,912 |
) |
|
(6,912 |
) |
|||
Royalty revenue from a related party, net |
$ |
64,107 |
|
$ |
67,086 |
|
$ |
119,290 |
|
$ |
119,466 |
|
INNOVIVA, INC. | |||||||
Condensed Consolidated Balance Sheets | |||||||
(in thousands) | |||||||
June 30, |
|
December 31, |
|||||
2019 |
|
2018 |
|||||
(unaudited) |
|
(1) |
|||||
Assets | |||||||
Cash, cash equivalents and marketable securities |
$ |
249,663 |
|
$ |
114,908 |
|
|
Other current assets |
|
68,022 |
|
|
84,135 |
|
|
Property and equipment, net |
|
136 |
|
|
160 |
|
|
Operating lease right-of-use asset |
|
1,348 |
|
|
- |
|
|
Capitalized fees paid to a related party, net |
|
145,987 |
|
|
152,899 |
|
|
Deferred tax assets |
|
177,114 |
|
|
196,054 |
|
|
Other assets |
|
37 |
|
|
37 |
|
|
Total assets |
$ |
642,307 |
|
$ |
548,193 |
|
|
Liabilities and stockholders’ equity | |||||||
Other current liabilities |
$ |
3,213 |
|
$ |
1,436 |
|
|
Accrued interest payable |
|
4,262 |
|
|
4,264 |
|
|
Convertible subordinated notes, net |
|
238,939 |
|
|
238,664 |
|
|
Convertible senior notes, net |
|
134,239 |
|
|
130,734 |
|
|
Senior secured term loans, net |
|
13,497 |
|
|
13,457 |
|
|
Other long-term liabilities |
|
1,455 |
|
|
586 |
|
|
Innoviva stockholders’ equity |
|
226,683 |
|
|
153,583 |
|
|
Noncontrolling interest |
|
20,019 |
|
|
5,469 |
|
|
Total liabilities and stockholders’ equity |
$ |
642,307 |
|
$ |
548,193 |
|
|
(1) The selected consolidated balance sheet amounts at December 31, 2018 are derived from audited financial statements. |
INNOVIVA, INC. | |||||||
Cash Flows Summary | |||||||
(in thousands) | |||||||
Six Months Ended June 30, |
|||||||
2019 |
|
2018 |
|||||
(unaudited) |
|||||||
Net cash provided by operating activities |
$ |
133,151 |
|
$ |
101,639 |
|
|
Net cash provided by (used in) investing activities |
|
(54,060 |
) |
|
35,591 |
|
|
Net cash provided by (used in) financing activities |
|
444 |
|
|
(123,340 |
) |
View source version on businesswire.com: https://www.businesswire.com/news/home/20190724005763/en/
Source:
Investors & Media:
Dan Zacchei / Alex Kovtun
Sloane & Company
212-446-9500
dzacchei@sloanepr.com / akovtun@sloanepr.com