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Washington, DC 20549 





Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 

Date of Report (Date of earliest event reported): July 27, 2022



(Exact Name of Registrant as Specified in its Charter)




Delaware 000-30319 94-3265960
(State or Other Jurisdiction of
(Commission  File Number) (I.R.S. Employer Identification


1350 Old Bayshore Highway,
Suite 400

Burlingame, California 94010

(650) 238-9600

(Addresses, including zip code, and telephone numbers, including area code, of principal executive offices) 

(Former name or former address, if changed since last report) 


Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):


¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))


Securities registered pursuant to Section 12(b) of the Act:


Title of each class   Trading Symbol(s)   Name of each exchange on which registered
Common Stock, par value $0.01 per share   INVA   The NASDAQ Global Select Market


Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933(§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).


Emerging growth company ¨


If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨







Item 2.02. Results of Operations and Financial Condition


On July 27, 2022, Innoviva, Inc. (the “Company”) issued a press release regarding its results of operations and financial condition for the quarter ended June 30, 2022. A copy of the press release is furnished as Exhibit 99.1 to this Current Report.


The information in Item 2.02 of this Current Report on Form 8-K, including Exhibit 99.1, is being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing.


Item 9.01. Financial Statements and Exhibits


(d) Exhibits


99.1   Press Release dated July 27, 2022
104   Cover Page Interactive File (the cover page tags are embedded within the Inline XBRL document)


- 2 -




Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.




Date: July 27, 2022 By: /s/ Pavel Raifeld
    Pavel Raifeld
    Chief Executive Officer


- 3 -



Exhibit 99.1




Innoviva Reports Second Quarter 2022 Financial Results and Highlights Recent Company Progress


·Royalties increased by 7% to $111.7 million in the second quarter of 2022, compared to the same quarter in 2021


·Completed acquisition of the remaining approximately 40% of Entasis Therapeutics at a price of $2.20 per share for a consideration of $42 million in July 2022


·Entered into definitive merger agreement to acquire all outstanding shares of La Jolla Pharmaceutical Company for $6.23 per share in cash at an implied enterprise value of $149 million in July 2022


·Sold 15% economic stake in Theravance Respiratory Company (“TRC”) to Royalty Pharma for approximately $282 million and a potential $50 million milestone payment plus full ownership of existing equity investments TRC previously owned in July 2022


BURLINGAME, Calif.—(BUSINESS WIRE)—Jul. 27, 2022—Innoviva, Inc. (NASDAQ: INVA) (“Innoviva” and “the Company”), a diversified holding company with a portfolio of royalties and a growing portfolio of healthcare assets in infectious disease and other areas of high unmet need, today reported financial results for the second quarter ended June 30, 2022.


·Gross royalty revenues of $111.7 million from Glaxo Group Limited (“GSK”) for the second quarter of 2022 included royalties of $59.3 million from global net sales of RELVAR®/BREO® ELLIPTA® and royalties of $9.6 million from global net sales of ANORO® ELLIPTA®.


·Income from operations decreased by 14% to $82.6 million, compared to the same quarter in 2021, primarily due to the accounting consolidation of Entasis’ financials, including its $20.0 million operating expenses.


·Decrease in fair values of equity and long-term investments of $58.6 million in the second quarter of 2022 was mainly due to the volatility in the capital markets.


·Net cash provided by operating activities was $177.1 million in the first 6 months of 2022, compared to $168.7 million in the same period of 2021.


·Net cash and cash equivalents totaled $283.6 million, including $22.4 million of Entasis’ cash balance, and receivables from GSK totaled $111.7 million as of June 30, 2022.


Pavel Raifeld, Chief Executive Officer of Innoviva, Inc. stated: “This has been an exciting, transformative time for Innoviva as our core royalty business continued to deliver strong revenues, and we meaningfully advanced our strategy via key strategic and opportunistic transactions.”


Mr. Raifeld continued: “We are thrilled to complete the acquisition of Entasis with its strong pipeline anchored by differentiated, promising lead asset SUL-DUR. Our announced acquisition of La Jolla gives us a highly complementary, profitable commercial platform, creating a fully integrated business in the hospital and infectious disease spaces, diversifying our operations, and meaningfully enhancing long-term growth prospects. We view the recent divestiture of our stake in Theravance Respiratory Company as a very economically and strategically compelling transaction providing us with significant optionality. As a well-capitalized, highly cashflow generative company, we are strongly positioned for sustained value creation in the current market environment.”







Recent Highlights


·GSK Net Sales:


oSecond quarter 2022 net sales of RELVAR®/BREO® ELLIPTA® by GSK were $395.5 million, down 10% from $439.5 million in the same quarter of 2021, with $189.7 million in net sales from the U.S. market and $205.8 million from non-U.S. markets.


oSecond quarter 2022 net sales of ANORO® ELLIPTA® by GSK were $148.2 million, down 19% from $184.0 million in the same quarter of 2021, with $74.5 million net sales from the U.S. market and $73.7 million from non-U.S. markets.


oSecond quarter 2022 net sales of TRELEGY® ELLIPTA® by GSK were $590.1 million, up 45% from $405.9 million in the same quarter of 2021, with $449.1 million in net sales from the U.S. market and $141.0 million in net sales from non-U.S. markets.


·Second Quarter and Recent Corporate Updates:


oDuring the second quarter of 2022, the Company’s wholly owned subsidiary, Innoviva Strategic Opportunities LLC, announced the purchase of all the issued and outstanding equity securities of Entasis Therapeutics not already owned by Innoviva and its affiliates for $2.20 per share for a consideration of $42.4 million. The purchase closed on July 11, 2022.


oSubsequent to the close of the second quarter of 2022, the Company’s wholly owned subsidiary, Innoviva Strategic Opportunities LLC, entered into a definitive merger agreement to acquire La Jolla Pharmaceutical Company (Nasdaq: LJPC). Innoviva has agreed to pay $5.95 per share and an incremental $0.28 per share for additional cash proceeds received in connection with the divestiture of a non-core asset. The implied enterprise value of La Jolla was approximately $149 million. The acquisition is expected to close later in the third quarter of 2022.


oIn July, the Company sold its 15% stake in Theravance Respiratory Company (“TRC”), which received royalties stemming from sales of TRELEGY® ELLIPTA®, to Royalty Pharma plc (Nasdaq: RPRX) for an upfront cash payment of approximately $282 million and a potential $50 million contingent sales-based milestone payment. Under the terms of the agreement, TRC also transferred to Innoviva all of TRC’s ownership interests and investments in InCarda Therapeutics Inc., ImaginAb, Inc., Gate Neurosciences, Inc. and Nanolive SA; collectively, these ownership interests are valued at $42.5 million as of quarter-end. Innoviva retained its royalty rights with respect to ANORO® ELLIPTA® and RELVAR®/BREO® ELLIPTA®.


About Innoviva


Innoviva is a diversified holding company with a portfolio of royalties and other healthcare assets. Innoviva’s royalty portfolio includes respiratory assets partnered with Glaxo Group Limited (“GSK”), including RELVAR®/BREO® ELLIPTA® (fluticasone furoate/ vilanterol, “FF/VI”), ANORO® ELLIPTA® (umeclidinium bromide/ vilanterol, “UMEC/VI”) and, formerly, TRELEGY® ELLIPTA® (the combination FF/UMEC/VI). Under the Long-Acting Beta2 Agonist (“LABA”) Collaboration Agreement, Innoviva is entitled to receive royalties from GSK on sales of RELVAR®/BREO® ELLIPTA® and ANORO® ELLIPTA®.


ANORO®, RELVAR®, BREO®, TRELEGY® and ELLIPTA® are trademarks of the GSK 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 intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. The words “anticipate”, “expect”, “goal”, “intend”, “objective”, “opportunity”, “plan”, “potential”, “target” and similar expressions are intended to identify such forward-looking statements. Such forward-looking statements involve substantial risks, uncertainties, and assumptions. These statements are based on the current estimates and assumptions of the management of Innoviva as of the date of this press release and are subject to known and unknown risks, uncertainties, changes in circumstances, assumptions and other factors that may cause the actual results of Innoviva to be materially different from those reflected in the forward-looking statements. Important factors that could cause actual results to differ materially from those indicated by such forward-looking statements include, among others, risks related to: expected cost savings; lower than expected future royalty revenue from respiratory products partnered with GSK; the commercialization of RELVAR®/BREO® ELLIPTA®, ANORO® ELLIPTA® and, formerly, TRELEGY® ELLIPTA® in the jurisdictions in which these products have been approved; the strategies, plans and objectives of Innoviva (including Innoviva’s growth strategy and corporate development initiatives beyond the existing respiratory portfolio); the timing, manner, and amount of potential capital returns to shareholders; the status and timing of clinical studies, data analysis and communication of results; the potential benefits and mechanisms of action of product candidates; expectations for product candidates through development and commercialization; the timing of regulatory approval of product candidates; and projections of revenue, expenses and other financial items; the impact of the novel coronavirus (“COVID-19”). Other risks affecting Innoviva are described under the headings “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in Innoviva’s Annual Report on Form 10-K for the year ended December 31, 2021 and Quarterly Reports on Form 10-Q, which are on file with the Securities and Exchange Commission (“SEC”) and available on the SEC’s website at www.sec.gov. Past performance is not necessarily indicative of future results. No forward-looking statements can be guaranteed, and actual results may differ materially from such statements. Given these uncertainties, you should not place undue reliance on these forward-looking statements. The information in this press release is provided only as of the date hereof, and Innoviva assumes no obligation to update its forward-looking statements on account of new information, future events or otherwise, except as required by law.








Condensed Consolidated Statements of Income

(in thousands, except per share data)



    Three Months Ended    Six Months Ended 
    June 30,    June 30, 
    2022    2021    2022    2021 
Revenue (1)  $108,220   $100,806   $198,279   $186,324 
Operating expenses:                    
    Research and development   13,884    38    19,722    87 
General and administrative   11,782    4,228    18,274    10,214 
Total operating expenses   25,666    4,266    37,996    10,301 
Income from operations   82,554    96,540    160,283    176,023 
Interest and dividend income   724    20    1,046    50 
Other expense, net   (528)   (951)   (778)   (1,384)
Interest expense   (3,655)   (4,745)   (6,665)   (9,439)
Loss on debt extinguishment   -    -    (20,662)   - 
Changes in fair values of equity and long-term investments, net   (58,600)   45,315    (68,011)   100,360 
Income before income taxes   20,495    136,179    65,213    265,610 
Income tax expense (benefit), net   (876)   25,333    5,984    45,069 
Net income   21,371    110,846    59,229    220,541 
Net income attributable to noncontrolling interest   20,432    21,898    42,517    37,470 
Net income attributable to Innoviva stockholders  $939   $88,948   $16,712   $183,071 
Basic net income per share attributable to Innoviva stockholders  $0.01   $1.01   $0.24   $1.93 
Diluted net income per share attributable to Innoviva stockholders  $0.05   $0.90   $0.24   $1.73 
Shares used to compute basic net income per share   69,643    88,423    69,594    94,858 
Shares used to compute diluted net income per share   95,653    100,639    94,692    107,096 


(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, 
   2022   2021   2022   2021 
   (unaudited)   (unaudited) 
Royalties from a related party  $111,676   $104,262   $205,191   $193,236 
Amortization of capitalized fees paid to a related party   (3,456)   (3,456)   (6,912)   (6,912)
     Royalty revenue from a related party, net  $108,220   $100,806   $198,279   $186,324 








Condensed Consolidated Balance Sheets

(in thousands)


   June 30,   December 31, 
   2022   2021 
    (unaudited)    (1)
Cash and cash equivalents  $283,580   $201,525 
Other current assets   116,748    112,148 
Property and equipment, net   176    12 
Equity and long-term investments   494,097    483,845 
Capitalized fees paid to a related party, net   104,518    111,430 
Right-of-use assets   3,545    97 
Goodwill   5,544    - 
Intangible assets   105,000    - 
Deferred tax assets, net   23,274    17,327 
Other assets   1,157    11 
          Total assets  $1,137,639   $926,395 
Liabilities and stockholders’ equity          
Other current liabilities  $25,338   $1,655 
Accrued interest payable   4,498    4,152 
Convertible subordinated notes, due 2023, net   96,072    240,364 
Convertible senior notes, due 2025, net   190,235    154,289 
Convertible senior notes, due 2028, net   252,943    - 
Lease liabilities, long-term   3,091    - 
Innoviva stockholders’ equity   388,337    414,743 
Noncontrolling interest   177,125    111,192 
          Total liabilities and stockholders’ equity  $1,137,639   $926,395 


(1) The selected consolidated balance sheet amounts at December 31, 2021 are derived from audited financial statements.  



Cash Flows Summary

(in thousands)


   Six Months Ended June 30, 
   2022   2021 
Net cash provided by operating activities  $177,137   $168,721 
Net cash provided by (used in) investing activities   (145,678)   63,627 
Net cash provided by (used in) financing activities   50,596    (435,570)







Innoviva Contacts:
Argot Partners
(212) 600-1902