0001080014 false 0001080014 2023-02-28 2023-02-28 iso4217:USD xbrli:shares iso4217:USD xbrli:shares





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): February 28, 2023



(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 February 28, 2023, Innoviva, Inc. (the “Company”) issued a press release regarding its results of operations and financial condition for the quarter ended December 31, 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 February 28, 2023
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: February 28, 2023 By: /s/ Pavel Raifeld
    Pavel Raifeld
    Chief Executive Officer


- 3 -


Exhibit 99.1 


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


Royalties of $54.7 million in the fourth quarter of 2022 for RELVAR®/BREO® ELLIPTA® and ANORO® ELLIPTA®

Net product sales of $14.6 million in the fourth quarter of 2022 for GIAPREZA® and XERAVA®

$100 million share repurchase program initiated in the fourth quarter of 2022

Sapna Srivastava, Ph.D., appointed to the Company’s Board of Directors


BURLINGAME, Calif.—(BUSINESS WIRE)— February 28, 2023—Innoviva, Inc. (NASDAQ: INVA) (“Innoviva” or “the Company”), a diversified holding company with a portfolio of royalties and other healthcare assets, today reported financial results for the fourth quarter ended December 31, 2022.


Gross royalty revenues of $54.7 million from Glaxo Group Limited (“GSK”) for the fourth quarter of 2022 included royalties of $44.3 million from global net sales of RELVAR®/BREO® ELLIPTA® and royalties of $10.4 million from global net sales of ANORO® ELLIPTA®.

Income before income taxes decreased to a loss of $64.7 million, compared to income of $56.5 million in the same quarter of 2021, driven primarily by reduced royalty revenue contribution following Theravance Respiratory Company LLC (“TRC”) divestiture partially offset by GIAPREZA® and XERAVA® revenues, incremental operating expenses related to recent acquisitions, and adverse contribution from net changes in fair value of equity and long-term investments.

Decrease in fair values of equity and long-term investments of $85.4 million in the fourth quarter of 2022 was driven mainly by a $117.3 million unrealized loss related to share price decline for Armata Pharmaceuticals Inc. (“Armata”) over the time period, much of which has since been recouped due to favorable year to date share price performance in 2023.

Net cash provided by operating activities was $201.7 million in 2022, compared to $363.8 million in 2021, driven primarily by reduced revenues following TRC divestiture as well as additional incremental operating expenses, including one-time costs, following recent acquisitions.

Net cash and cash equivalents totaled $291.0 million, and royalty and product sale receivables totaled $64.1 million as of December 31, 2022.


Pavel Raifeld, Chief Executive Officer of Innoviva, stated: “Our diversified core royalty business remains solid. RELVAR®/BREO® ELLIPTA® global net sales decreased in the fourth quarter of 2022 primarily due to unfavorable prior period adjustments in the U.S., despite stable volume trends. ANORO® ELLIPTA® global net sales decreased slightly compared to the fourth quarter of 2021 mainly due to foreign exchange rate changes.”


Mr. Raifeld continued: “We continue to advance our strategy of building a best-in-class hospital and infectious disease business formed through acquisitions of Entasis Therapeutics and La Jolla Pharmaceutical. Notably, GIAPREZA® and XERAVA® had their strongest quarter ever, the FDA accepted our SUL-DUR NDA with Priority Review, and enrollment in our Phase 3 registrational trial of zoliflodacin remains on track, with study completion anticipated in 2023. We believe this platform will afford us multiple opportunities to create and crystalize shareholder value.”


“While capital markets volatility has significantly impacted income over the past quarter, primarily manifesting through decline in Armata’s share price, most losses have been recouped following recent stock rallies. We remain excited about our prospects and continue to be disciplined with our capital, executing on the $100 million share buyback program and optimizing our operating footprint following recent acquisitions,” said Mr. Raifeld.





Recent Highlights


GSK Net Sales:


oFourth quarter 2022 net sales of RELVAR®/BREO® ELLIPTA® by GSK were $295.2 million with $83.0 million in net sales from the U.S. market and $212.2 million from non-U.S. markets.

oFourth quarter 2022 net sales of ANORO® ELLIPTA® by GSK were $159.8 million with $82.6 million net sales from the U.S. market and $77.2 million from non-U.S. markets.


Clinical Updates:

oOn November 30, 2022, the U.S. Food and Drug Administration (FDA) granted priority review for SUL-DUR, an investigational drug for the treatment of infections caused by Acinetobacter baumannii-calcoaceticus complex (ABC), including multi-drug resistant and carbapenem-resistant strains.

oThe FDA is currently planning to hold an advisory committee meeting to discuss this New Drug Application. The target PDUFA date (or action date) is May 29, 2023.

oAt the annual meeting of the Infectious Disease Society of America which took place from October 19 to October 23, 2022 in Washington, D.C., Entasis Therapeutics, a wholly owned subsidiary of the Company, had six presentations on SUL-DUR, reinforcing the positive safety and efficacy findings from the Company’s pivotal Phase 3 ATTACK trial.

oAdditionally, at the same annual meeting of the Infectious Disease Society of America, La Jolla Pharmaceutical, another wholly owned subsidiary of the Company, had five abstracts on XERAVA® focused primarily on its use in combination therapies.

oEnrollment in the phase 3 registrational trial for zoliflodacin, a first-in-class oral antibiotic for the treatment of gonorrhea being developed in partnership with GARD-P, remains on track, and study completion is anticipated in 2023.


Corporate Updates:


oInnoviva’s Board of Directors authorized a share repurchase program in the fourth quarter of 2022 under which the Company may repurchase up to $100.0 million of its outstanding shares of common stock.

oIn January 2023, Sapna Srivastava, Ph.D., a highly experienced executive within the biopharmaceutical and banking industries, joined the Company’s Board of Directors.

oIn January 2023, we closed a $30 million convertible debt facility with Armata, supporting the clinical development of its multiple innovative bacteriophage assets as well as advanced biologics cGMP manufacturing capabilities.

oIn January 2023, we invested an additional $5 million in Gate Neurosciences, Inc. to support the clinical development of their differentiated pipeline of neuropsychiatric therapeutics.

oIn January 2023, we paid off our convertible notes due 2023 in the amount of $96.2 million.


 - 2 - 





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”) and ANORO® ELLIPTA® (umeclidinium bromide/ vilanterol, “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®. Innoviva’s other healthcare assets include infectious disease and hospital assets stemming from acquisitions of Entasis Therapeutics, including its lead asset sulbactam-durlobactam, and La Jolla Pharmaceutical, including GIAPREZA® (angiotensin II), approved to increase blood pressure in adults with septic or other distributive shock and XERAVA® (eravacycline) for the treatment of complicated intra-abdominal infections in adults.


ANORO®, RELVAR® and BREO® 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®, GIAPREZA® and XERAVA® 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); 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”); the timing, manner and amount of capital deployment, including potential capital returns to stockholders; and risks related to the Company’s growth strategy. 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. Additional risk factors are presented on Form 8-K filed on August 23, 2022. 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.


 - 3 - 






Condensed Consolidated Statements of Income

(in thousands, except per share data)  



   Three Months Ended   Year Ended 
   December 31,   December 31, 
   2022   2021   2022   2021 
Royalty revenue, net (1)  $51,216   $107,680   $311,645   $391,866 
Net product sales   14,587    -    19,694    - 
Total revenue   65,803    107,680    331,339    391,866 
Cost of products sold (inclusive of amortization of inventory fair value adjustments)   10,113    -    13,793    - 
Selling, general and administrative   17,390    3,113    63,538    16,187 
Research and development   10,049    40    41,432    576 
Amortization of acquired intangible assets   4,070    -    5,581    - 
Gain on TRC sale   -    -    (266,696)     
Loss on debt extinguishment   -    -    20,662      
Changes in fair values of equity method investments, net   117,275    9,025    161,749    (84,392)
Changes in fair values of equity and long-term investments, net   (31,868)   33,917    (8,462)   (6,638)
Interest and dividend income   (3,188)   (454)   (6,369)   (1,839)
Interest expense   4,028    4,841    15,789    19,070 
Other expense (income), net   2,622    708    3,373    3,626 
Total expenses   130,491    51,190    44,390    (53,410)
Income before income taxes   (64,688)   56,490    286,949    445,276 
Income tax expense   3,626    10,839    66,687    76,439 
Net income   (68,314)   45,651    220,262    368,837 
Net income attributable to noncontrolling interest   -    35,305    6,341    102,983 
Net income attributable to Innoviva stockholders  $(68,314)  $10,346   $213,921   $265,854 
Basic net income per share attributable to Innoviva stockholders  $(0.98)  $0.15   $3.07   $3.24 
Diluted net income per share attributable to Innoviva stockholders  $(0.98)  $0.14   $2.37   $2.87 
Shares used to compute basic net income per share   69,656    69,492    69,644    82,062 
Shares used to compute diluted net income per share   69,656    81,770    95,249    94,310 


(1) Total net revenue is comprised of the following (in thousands):  


   Three Months Ended   Year Ended 
   December 31,   December 31, 
   2022   2021   2022   2021 
   (unaudited)   (unaudited) 
Royalties  $54,671   $111,135   $325,468   $405,689 
Amortization of capitalized fees   (3,455)   (3,455)   (13,823)   (13,823)
Royalty revenue, net  $51,216   $107,680   $311,645   $391,866 


 - 4 - 






Condensed Consolidated Balance Sheets

(in thousands)



   December 31,   December 31, 
   2022   2021 
Cash and cash equivalents  $291,049   $201,525 
Royalty and product sale receivables   64,073    110,711 
Inventory, net   55,897    - 
Prepaid expense and other current assets   32,492    1,437 
Property and equipment, net   170    12 
Equity and long-term investments   403,013    483,845 
Capitalized fees   97,607    111,430 
Right-of-use assets   3,265    97 
Goodwill   26,713    - 
Intangible assets   252,919    - 
Deferred tax assets, net   -    17,327 
Other assets   4,299    11 
Total assets  $1,231,497   $926,395 
Liabilities and stockholders’ equity          
Other current liabilities  $32,322   $1,655 
Accrued interest payable   4,359    4,152 
Deferred revenues   2,094    - 
Convertible subordinated notes, due 2023, net   96,193    240,364 
Convertible senior notes, due 2025, net   190,583    154,289 
Convertible senior notes, due 2028, net   253,597    - 
Other long term liabilities   70,918    - 
Deferred tax liabilities   5,771      
Income tax payable - long term   9,872    - 
Innoviva stockholders’ equity   565,788    414,743 
Noncontrolling interest   -    111,192 
Total liabilities and stockholders’ equity  $1,231,497   $926,395 


 - 5 - 






Cash Flows Summary

(in thousands)



   Year Ended December 31, 
   2022   2021 
Net cash provided by operating activities  $201,726   $363,813 
Net cash provided by (used in) investing activities   (56,634)   43,722 
Net cash used in financing activities   (55,568)   (452,497)
Net change  $89,524   $(44,962)
Cash and cash equivalents at beginning of period   201,525    246,487 
Cash, cash equivalents and restricted cash at end of period  $291,049   $201,525 


Innoviva Contacts:
Argot Partners
(212) 600-1902


 - 6 -