UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): September
14, 2022
INNOVIVA, INC.
(Exact Name of Registrant as Specified in its Charter)
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Delaware
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000-30319
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94-3265960
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(State or Other Jurisdiction of
Incorporation) |
(Commission File Number)
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(I.R.S. Employer Identification
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1350 Old Bayshore Highway,
Suite 400
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):
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Securities registered pursuant to Section 12(b) of the Act:
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Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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Common Stock, par value $0.01 per share
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INVA
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The NASDAQ Global Select Market
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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 7.01. Regulation FD Disclosure.
On September 14, 2022, Innoviva, Inc. (the “Company”) made available on its website a revised Company investor presentation. A copy of the presentation is
attached hereto as Exhibit 99.1 and is incorporated by reference herein.
The information included in this Current Report on Form 8-K that is furnished pursuant to this Item 7.01, including the information contained in Exhibit 99.1
hereto, shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section or Sections 11 and 12(a)(2) of the Securities Act of 1933, as
amended. In addition, the information included in this Current Report on Form 8-K that is furnished pursuant to this Item 7.01, including the information contained in Exhibit 99.1 hereto, shall not be incorporated by reference into any filing of the
Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing, unless expressly incorporated by specific reference into such filing.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
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99.1
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Investor Presentation
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SIGNATURE
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.
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INNOVIVA, INC.
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Date: September 14, 2022
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By:
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/s/ Pavel Raifeld
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Pavel Raifeld
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Chief Executive Officer
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CorporatePresentation September 2022
Forward-looking statements The information in this presentation contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as amended (“Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements involve substantial risks, uncertainties, and
assumptions. All statements contained herein that are not of historical fact, including, without limitation, statements regarding our strategy, future operations, future financial position, future revenue, projected costs, prospects, plans,
intentions, expectations, goals and objectives, may be forward-looking statements. The words “anticipates,” “believes,” “could,” “designed,” “estimates,” “expects,” “goal,” “intends,” “may,” “objective,” “plans,” “projects,” “pursue,” “will,”
“would” and similar expressions (including the negatives thereof) are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. We may not actually achieve the plans, intentions,
expectations or objectives disclosed in our forward-looking statements and the assumptions underlying our forward-looking statements may prove incorrect. Furthermore, if our forward-looking statements prove to be inaccurate, the inaccuracy may be
material. Therefore, you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions, expectations and objectives disclosed in the forward-looking statements that
we make. All forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. Important factors that we believe could
cause actual results or events to differ materially from our forward-looking statements include, but are not limited to, risks related to: lower than expected future royalty revenue from respiratory products partnered with GSK; the
commercialization of RELVAR®/BREO® ELLIPTA®, ANORO® ELLIPTA® and TRELEGY® ELLIPTA® in the jurisdictions in which these products have been approved; substantial competition from products discovered, developed, launched and commercialized both by
GSK and by other pharmaceutical companies; our strategies, plans and objectives (related to our growth strategy and corporate development initiatives beyond our existing portfolio); the timing, manner and amount of capital deployment, including
potential capital returns to stockholders; risks related our growth strategy; projections of revenue, expenses and other financial items. In light of the significant uncertainties in these forward-looking statements, you should not regard these
statements as a representation or warranty by us or any other person that we will achieve our objectives and plans in any specified time frame, or at all. Any person reviewing this presentation is advised to review our “Risk Factors” and other
information in our Annual Report on Form 10-K for the year ended December 31, 2021 filed with the Securities and Exchange Commission (“SEC”) on February 28, 2022, (“2021 Form 10-K”), and the information in the other reports and documents that we
file with the SEC from time to time. All information in this presentation should be read in conjunction with the information we have filed with the SEC. All forward-looking statements in this presentation are based on current expectations as of
the date hereof and we do not assume any obligation to update any forward-looking statements on account of new information, future events or otherwise. 2
Innoviva overview Company highlights Diversified biopharmaceutical company with a portfolio of
royalties and a growing portfolio of innovative healthcare assetsRoyalty portfolio consists of respiratory products that were jointly developed with, and are licensed to, GSK and collectively make up a large portion of GSK’s leading respiratory
franchise (RELVAR®/ BREO® ELLIPTA®, ANORO® ELLIPTA®)Integrated infectious disease / hospital business formed via recent acquisitions of Entasis Therapeutics and La Jolla Pharmaceutical companies with strong growth prospects and significant
operating leverageStrategic healthcare assets – assets in areas with high unmet medical need and significant long-term value creation potential, including a majority stake in bacteriophage leader Armata Pharmaceuticals 3 Thoughtful, robust,
long-term approach to capital deployment 5 Strong track record of growth and value creation focus 4 Deep and proven healthcare expertise across governance, strategy, medicine / science, R&D, finance, and
operations 2 High-potential, robust operating platform in hospital / infectious disease space and other valuable assets 1 Strongly cashflow-generative, diversified and durable core royalty business 3 Company description
Innoviva combines sustainable royalty cashflows and valuable operating platform with a long-term capital
deployment strategy to maximize shareholder value Robust, valuable royalty portfolio Thoughtful, accretive capital deployment Long-term shareholder value creation + = Significant royalties from a sizeable, durable portfolio of
blockbuster respiratory products Strategic healthcare asset acquisitions and capital structure optimization to drive sustainable growth Strong record of growth and capital deployment position the company for continued value creation 4 Over
$250M net income generated in 2021 Strong, promising operating business and other assets + An integrated operating platform focused on hospital / anti-infectives drugs complemented by other healthcare assets
Innoviva has a valuable royalty portfolio comprised of robust, durable revenues stemming from widely used
respiratory therapies commercialized by GSK 2021 Global net sales ($M) Key royalty terms 2021 Innoviva royalties ($M) Totals 15% on first $3B in annual sales; 5% on sales over $3B Tiered 6.5-10.0% 5-year projected royalties1
($M) ANORO®ELLIPTA® RELVAR®/ BREO®ELLIPTA® 1 – Projections per analyst consensus on GSK forecast website accessed Sept 8, 2022; GBP converted to USD using Sept 8 exchange rate of $1.15; 2022-2026E royalties
shown ~$2.3B ~$280M ~$1.1B 5 Royalty portfolio Asthma / COPD COPD 1H 2022 Innoviva royalties ($M) ~$130M 948 1,560 691 Innoviva share of Trelegy royalty stream divested in July 2022
Our royalty product portfolio has demonstrated resilience and growth, contributing to our excitement about
its long-term potential Sizeable and differentiated Resilient anddurable Diversifiedand established Differentiated respiratory portfolio with over $2B 2021 sales (for Breo and Anoro)Consensus projections imply royalties of >$1B over the
next 5 years1 Robust products have performed well across environments despite competitive pressuresMeaningful longevity afforded by strong IP estate, with the “moat” amplified by manufacturing complexity Portfolio covers key respiratory drug
classes in easy-to-use single daily dose form for both asthma and COPDTherapies are well-established standards of careProducts successfully marketed in multiple geographies and indications, reducing single-market risk 6 Royalty portfolio 1 –
Projections per analyst consensus on GSK forecast website accessed Sept 8, 2022; GBP converted to USD using Sept 8 exchange rate of $1.15; 2022-2026E royalties shown
Innoviva has actively deployed its capital to maximize shareholder value Since the beginning of 2021 we
strategically repurchased GSK’s equity stake for ~$400M, monetized our share of Trelegy royalties for over $275M, and deployed approximately $400M into acquiring high-potential assets Continued active search for strategically appealing
opportunities with external supportLong-term, deliberate approach to direct strategic investments into promising healthcare assets, matching the meaningful duration of our cashflowsConcentrated exposure to fundamentally robust, attractively
priced assets with significant upsideOpportunistic asset monetization as appropriate to drive value creationE.g., divestiture of 15% stake in Theravance Respiratory Company (which owned Trelegy royalties) in July 2022 for $282M and a milestone
plus rights to equity investments valued at $43MTransaction values our stake in TRC at 17x 2021 royalties accruing to Innoviva and a significant premium relative to underlying consensus-based NPV1 We thoughtfully approach capital deployment with
a strong value focus 7 1 – Royalties accruing to Innoviva based on 15% of $127M Trelegy royalties; valuation includes cash upfront and balance sheet value of equity investments as of June 30, 2022; NPV based on Bloomberg Consensus at the time
of the transaction with management forecasts Capital deployment Potential capital return to shareholders as appropriate, especially when strong economic value accretion is coupled with compelling strategic benefitsE.g., GSK’s 32% equity
stake repurchase in May 2021 at $12.25 per share for $392M
We approach strategic acquisitions in a thoughtful and disciplined manner We target fundamentally
attractive, yet often overlooked or contrarian, healthcare areas where our capital and capabilities can make a difference We look for differentiated assets with meaningful value creation potential We structure and negotiate asset acquisitions on
mutually beneficial terms to maximize long-term valueFocus on concentrated, long-term investments, often by purchasing majority or other large stakesOpenness to smaller investments in companies with compelling growth and risk profiles We
proactively manage risks through ongoing asset stewardship and appropriate diversificationOperational and strategic support and management (across strategy, finance, development, commercial, governance, and other areas) as a key value creation
driver Opportunity identification Individual acquisition execution and oversight 8 Capital deployment We seek to build and own strategically viable, economically sustainable businessesOftentimes, we pursue acquisitions of complementary
assets to generate meaningful synergies, including a potential “roll up” strategy in the hospital / infectious disease space Strategic vision
Our non-royalty healthcare asset portfolio provides for both growth and resilience 9 Robust,
differentiated infectious disease / hospital business Minority investments in high growth areas ISP Fund providing further exposure to healthcare Entasis / La Jolla combination creates an integrated therapeutics platform with strong R&D
engine and superior hospital-focused commercial operations, driving synergies and de-risking the businessStrong backbone creates an opportunity to “layer on” other assets Strategic equity investments in high-growth healthcare companies with
significant promise $300M initially committed to ISP Fund in Dec 2020 primarily to public equity investments in healthcare in areas of significant value dislocation, providing long-term upside Benchmark outperformance on long-term and
year-to-date bases Armata adds cutting edge R&D and manufacturing capabilities with a novel therapeutic modality, bacteriophages, meaningfully de-risked through use across the globe and multiple shots on goal in the pipeline Est. cost or
fair market asset value ($M)1 ~330 145 43 307 Operating platform and assets 1 – Based on balance sheet as of June 30, 2022. Asset value for Entasis and La Jolla based on capital invested to date, excluding transaction costs
Differentiated hospital / infectious disease business: a case study Infectious disease therapeutics have
focused primarily on common bacteria diseases; however, there is a clear need for improved therapeutics for bacterial, viral and fungal diseasesThis area has recently fallen out of favor due to idiosyncratic challenges, and historical
underinvestment exacerbated development and commercial challenges, creating a “vicious cycle”A player with long-term vision, capital, and expertise can take advantage of market dislocations and facilitate R&D and commercialization of novel,
differentiated treatments capable of generating significant value for patients and health systems – and producing strong returns Infectious disease is a promising area of high unmet medical need with currently scarce capital access Sample
Innoviva transactions Pathogen-specific bacteriophage therapeutics platform for the treatment of drug resistant infections and other usesHighly differentiated novel biologic platform with broad applicability, rooted in a well-known modality and
supported by strong manufacturing capabilities $94M cost basis1 ~70% ownership $145M fair value1 10 Novel antibacterial platform validated by lead asset’s highly differentiated profile in an area of unmet needStrong anti-bacterial pipeline
led by SUL-DUR with positive Phase 3 data in Oct 2021 Innoviva made an initial investment in April 2020 and acquired remaining stake in July 2022 Wholly-owned subsidiary Commercial stage company with a robust hospital product portfolio
including a growing anti-infective assetMarkets Xerava, a 4G tetracycline antibiotic for CIAI, and Giapreza, an angiotensin injection for treatment of shockAcquired in August 2022 at ~$149M EV Wholly-owned subsidiary Operating platform and
assets 1 – As of June 30, 2022
Entasis / La Jolla combination transforms Innoviva by giving us a robust, organically growing platform with
significant operating leverage and clear path to profitability 11 Fully integrated, complementary hospital / ID operating platform World-class infectious disease R&D engine anchored by SUL-DUR ~$45M1 revenue hospital business with strong
commercial platform Operating platform and assets When combined under the Innoviva umbrella, the hospital / ID businesses are significantly more valuable than standaloneGrowing portfolio of marketed hospital and infectious disease
products with significant embedded operating leverage and potential for further revenue trajectory acceleration with appropriate resourcingExisting platform provides de-risked, synergistic commercialization for SUL-DUR launch with minimal
incremental investmentCommercial infrastructure and built-in expertise can be used to add further complementary products in the futureMeaningful upside potential from possible future industry or reimbursement paradigm changes 1 –
Giapreza and Xerava net product sales of $44M in 2021
Relevant experience Management Team Pavel Raifeld,Chief Executive Officer Experienced finance and
life sciences professional; formerly with Sarissa Capital, Credit Suisse, McKinsey and BCG Marianne Zhen, CPA,Chief Accounting Officer Experienced finance professional with over 20 years in accounting and strategic operations Board of
Directors George Bickerstaff,Chairperson Managing Director at M.M. Dillon & Co.; former CFO of Novartis Pharma AG and IMS Health; director at CareDx Deborah L. Birx, M.D. Physician-scientist and healthcare leader; former response
coordinator of The White House Coronavirus Task Force Mark DiPaolo, Esq. Senior Partner and General Counsel at Sarissa Capital; former senior member Icahn Capital’s investment team Jules Haimovitz Founder, executive, and director of
multiple companies in life sciences and entertainment; former director of Ariad Pharma Odysseas Kostas, M.D. Partner and Senior Managing Director at Sarissa Capital; former life sciences analyst at Evercore ISI and physician Sarah J.
Schlesinger, M.D. Professor at Rockefeller University with governance and clinical / medical expertise; former director of MDCO and Ariad Pharma Innoviva’s management and board have world-class expertise in healthcare Innoviva Team (Icahn
Capital) 12 Joined in 2021 Superior capabilities and network Unique and complementary skill sets Strong value creation focus Proven track record of success Value creation
The past 18 months have seen strong financial growth and advancement of our core strategy $406M
revenues$375M income from operations$364M net cash provided by operating activities 13 Value creation Strategically repurchased GSK’s 32% equity stake for $392M (at $12.25 per share)Invested ~$65M into innovative healthcare assetsAdded
healthcare and infectious disease leader Deborah L. Birx to the Board Financial highlights 2021 1H 2022 Business highlights Fully acquired Entasis and La Jolla and invested additional $58M into other innovative assetsSold rights to Trelegy
royalties for $282M cash upfront, milestones, and equity investmentsIssued $261M ‘28 convertible notes on favorable terms, refinancing a portion of ‘23 notes $205M revenues$160M income from operations$177M net cash provided by operating
activities
Why Innoviva 5 Strong track record of growth and value creation focus 4 Deep and proven
healthcare expertise across governance, strategy, medicine / science, R&D, finance, and operations 3 Thoughtful, robust, long-term approach to capital deployment 2 High-potential, robust operating platform in hospital / infectious
disease space and other valuable assets 1 Strongly cashflow-generative, diversified and durable core royalty business 14 Value creation
Appendix 15
Relvar / Breo detail: First once-daily inhaled corticosteroid / long-acting beta-agonist for asthma and
chronic obstructive pulmonary disease RELVAR® / BREO®ELLIPTA® Launched in 2013 as first and only once-daily ICS / LABA in the U.S.Relvar / Breo delivers superior, lasting proactive asthma control, with simple once-daily dosing in an
easy-to-use deviceFastest growing major ICS / LABA therapy globallyHistorical resilience in a competitive, volatile environment supported by positive demographic trends Net global sales ($B) Implied royalties ($M) (fluticasone furoate 100 mcg
and vilanterol 25 mcg inhalation powder) Indications (US)Long-term, once-daily, maintenance treatment of airflow obstruction and reducing exacerbations in patients with COPDOnce-daily treatment of asthma in patients aged 18 years and
older 1 16 Royalty portfolio 1 – Projections per analyst consensus on GSK forecast website accessed Sept 8, 2022; GBP converted to USD using Sept 8 exchange rate of $1.15; 2022-2026E royalties shown
Anoro detail: Best-in-class long-acting beta-agonist / long-acting muscarinic antagonist for
COPD ANORO®ELLIPTA® (umeclidinium 62.5 mcg and vilanterol 25 mcg inhalation powder) Indications (US)Long-term, once-daily, maintenance treatment of airflow obstruction and reducing exacerbations in patients with COPD Net global sales
($B) Implied royalties ($M) 1 – Projections per analyst consensus on GSK forecast website accessed Sept 8, 2022; GBP converted to USD using Sept 8 exchange rate of $1.15; 2022-2026E royalties shown2 – Superior improvement in lung function has
been demonstrated in clinical trials of ANORO vs. Tiotropium (LAMA) and Spiolto (LAMA/LABA) 17 1 Launched in 2014 as first-in-class LABA / LAMA single inhaler product in the U.S.ANORO delivers superior lung function improvement vs common
initial maintenance therapy options2Class leader in the U.S. due to clear differentiationLong-term prospects supported by positive demographics Royalty portfolio
GSK Net Global Sales1 ($B) Meaningful net global sales and royalty revenues from respiratory
portfolio Innoviva Royalty Revenue2 ($M) Note: May not sum due to rounding1 – Reflects sales from Breo / Relvar, Anoro2 – Excludes the impacts of amortization of capitalized fees and the MABA strategic alliance; reflects Trelegy royalties
received by TRC; may not sum due to rounding Breo / Relvar Anoro 18 ’16 – ’21 CAGR: 11% ’16 – ’21 CAGR:11% Royalty portfolio
Innoviva’s portfolio products are protected by a robust IP estate with meaningful remaining
exclusivity Manufacturing complexity provides further protection Primary US patent ANORO®ELLIPTA® RELVAR®/ BREO®ELLIPTA® Potential expiration Key secondary US patent Potential expiration Vilanterol drug substance1 ELLIPTA
device3 Specified LABA/LAMA combination for treatment of COPD and asthma2 Process for aggregating particles of umeclidinium and/or vilanterol and/or fluticasone furoate4 1 – US patent 7,439,393. Original expiration 9/11/2022, granted
additional exclusivity to 2025 through 35 USC §1562 – US patents 9,750,726 and 11,090,2943 – US patent 8,746,2424 – US patent 9,763,965 2025 2030 2030 2033 The terms of the collaboration agreement with GSK indicate that royalties will be
paid until the later of:The expiration of the last patent covering each product in such country 15 years from first commercial sale of each product in such countryFor each of the portfolio products, the secondary patent expiration date would be
the later date for purposes of royaltiesIP protection in international markets is generally longer dated than in the US 19 Royalty portfolio
Additional minority portfolio investments InCarda focuses on cardiovascular diseases; its lead drug is in
late-stage development for large, attractive PAF1 market ImaginAb is a leader in radio-pharmaceutical imaging with a differentiated solution for IO2 patient care and other areas of unmet medical need 20 1 – Paroxysmal atrial fibrillation2 –
Immuno-oncology Gate Neurosciences is developing next-generation therapies for psychiatric and neurological disorders Nanolive is a microscopy company that has developed a method for live cell 3D imaging and analysis with applications across
drug discovery and biotech R&D Operating platform and assets
Innoviva’s platform optimizes for lean, focused value creation leveraging superior capabilities Low-cost,
efficient operating platform Best-in-class internal capabilities Superior external resources access Our key operations principles are cost discipline, flexibility, and value orientation, while ensuring we are well-resourced to executeLean
expense structure; 2021 G&A expense totaled ~$16mFlexibility and scalability are key Strong revenue conversion to income and cashflows Management team and board members have significant functional and industry expertise with proven track
records in key areas utilized both at Innoviva and our investeesMedicine, science, and R&D; M&A and investments; governance and management; strategy and planning; commercial and operations Deep, multi-year relationships across healthcare
ecosystem enabling differentiated market exposure and talent pool accessExternal advisors, investment community, industry, government, patient groups, and others Innoviva is well positioned for strong execution 21 Value creation