0000950170-23-005168 | 10-K | XBRL Viewer

GOODWILL AND INTANGIBLE ASSETS

12 Months Ended

Dec. 31, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

8. GOODWILL AND INTANGIBLE ASSETS

Goodwill and intangible assets acquired are recognized at fair value as of the acquisition date. The carrying amount of goodwill as of December 31, 2022 was $26.7 million. We have not recognized any impairment losses related to goodwill and intangible assets during the periods presented.

Intangible assets with definite lives are amortized over their estimated useful lives. The carrying basis and accumulated amortization of recognized intangible assets as of December 31, 2022 were as follows:


	Useful Life	Gross		Accumulated			Net Carrying
(In thousands)	(Years)	Amount		Amortization			Amount
Marketed products	8-10	$	151,000	$	(5,581	)	$	145,419
In-process research and development			72,100		—			72,100
Collaboration agreement			35,400		—			35,400
Total		$	258,500	$	(5,581	)	$	252,919

Intangible assets recognized as a result of the acquisition of Entasis amounted to $107.5 million, which consisted of Entasis’ in-process research and development related to its antibacterial therapeutic product candidates and a collaboration agreement amounting to $72.1 million and $35.4 million, respectively. The useful lives of these intangible assets will be determined upon commercialization of the underlying product candidates; thus, no amortization expense of determinable assets was recognized during the year ended December 31, 2022.

Intangible assets recognized as a result of the acquisition of La Jolla amounting to $151.0 million pertain to product rights and developed technologies on La Jolla’s currently marketed products. These are intangible assets with determinable lives and are amortized over their estimated useful lives. We recognized amortization expense of $5.6 million for the year ended December 31, 2022. Future amortization expense is expected to be $15.4 million for each of the years from 2023 to 2027 and $68.2 million thereafter.

DESCRIPTION OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

12 Months Ended

Dec. 31, 2022

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedule of property, equipment and leasehold improvements useful lives

Property and equipment are stated at cost less accumulated depreciation. Property and equipment are depreciated using the straight-line method as follows:


Leasehold improvements		Shorter of remaining lease terms or useful life
Laboratory equipment, furniture and fixtures		5 - 7 years
Software and computer equipment		3 years

CAPITALIZED FEES PAID

12 Months Ended

Dec. 31, 2022

Capitalized Contract Cost [Abstract]

CAPITALIZED FEES PAID

7. CAPITALIZED FEES PAID

Capitalized fees paid, which consist of registrational and launch-related milestone fees paid to GSK, were as follows:


		December 31,
(In thousands)	Amortization period	2022			2021
United States	2013-2030	$	120,000		$	120,000
Europe	2013-2029		60,000			60,000
Japan	2013-2029		40,000			40,000
Gross carrying value			220,000			220,000
Accumulated amortization			(122,393	)		(108,570	)
Net carrying value		$	97,607		$	111,430

These milestone fees are amortized over their estimated useful lives commencing upon the commercial launch of the product in their respective regions with the amortization recorded as a reduction in revenue from collaborative arrangements. As of December 31, 2022, the weighted average remaining amortization period was 7.1 years.

Additional information regarding these milestone fees is included in Note 3, “Revenue Recognition”. Amortization for each of the years ended December 31, 2022, 2021 and 2020 was $13.8 million. The remaining estimated amortization is $13.8 million for each of the years from 2023 to 2027 and $28.6 million thereafter.

REVENUE RECOGNITION

12 Months Ended

Dec. 31, 2022

Revenue from Contract with Customer [Abstract]

REVENUE RECOGNITION

3. REVENUE RECOGNITION

Net Revenue from Collaboration Arrangement

On July 13, 2022, Innoviva’s wholly owned subsidiary, Innoviva TRC Holdings, LLC (“ITH”) entered into an equity purchase agreement (“TRC Equity Purchase Agreement”) with Royalty Pharma Investments 2019 ICAV (“Royalty Pharma”) to sell our ownership interest in TRC. As a result of the sale of our ownership interest in TRC, which was consummated on July 20, 2022, we are no longer entitled to receive 15% of royalty payments made by GSK stemming from sales of TRELEGY® ELLIPTA®. We retained our royalty rights with respect to RELVAR®/BREO® ELLIPTA® and ANORO® ELLIPTA®.

Net revenue recognized under our GSK Agreements was as follows:


	Year Ended December 31,
(In thousands)	2022			2021			2020
Royalties - RELVAR/BREO	$	215,034		$	234,066		$	221,536
Royalties - ANORO		38,405			44,935			45,992
Royalties - TRELEGY(1)		72,029			126,688			73,089
Total royalties		325,468			405,689			340,617
Less: amortization of capitalized fees paid		(13,823	)		(13,823	)		(13,823	)
Royalty revenue		311,645			391,866			326,794
Strategic alliance - MABA program		—			—			10,000
Total net royalty revenue	$	311,645		$	391,866		$	336,794

(1) The year ended December 31, 2022 represents the period from January 1, 2022 to July 20, 2022, the date of the sale of our ownership interest in TRC.

LABA Collaboration

As a result of the launch and approval of RELVAR®/BREO® ELLIPTA® and ANORO® ELLIPTA® in the U.S., Japan and Europe, we paid milestone fees to GSK totaling $220.0 million during the year ended December 31, 2014. The milestone fees paid to GSK were recognized as capitalized fees paid, which are being amortized over their estimated useful lives commencing upon the commercial launch of the product. The amortization is recorded as a reduction to the royalties from GSK.

We are entitled to receive annual royalties from GSK on sales of RELVAR®/BREO® ELLIPTA® as follows: 15% on the first $3.0 billion of annual global net sales and 5% for all annual global net sales above $3.0 billion. Sales of single‑agent LABA medicines and combination medicines would be combined for the purposes of this royalty calculation. For other products combined with a LABA from the LABA Collaboration, such as ANORO® ELLIPTA®, royalties are upward tiering and range from 6.5% to 10%.

We are also entitled to 15% of royalty payments made by GSK under its agreements originally entered into with us, and since assigned to TRC in connection with the Spin-Off, including TRELEGY® ELLIPTA®, which royalties are upward tiering and range from 6.5% to 10%.

2004 Strategic Alliance

During the year ended December 31, 2020, we recognized $10.0 million in revenue from a termination fee paid in connection with the termination of the Bifunctional Muscarinic Antagonist-Beta2 Agonist (“MABA”) program under the Strategic Alliance Agreement with GSK.

Net Product Sales

Net product sales we recognized from the date of acquisition of La Jolla, which occurred on August 22, 2022, to December 31, 2022 were $19.7 million, consisting of net sales of GIAPREZA® and XERAVA® for $14.2 million and $5.5 million, respectively. We derived approximately 96% and 4% of our net product sales for the same period from customers located in the U.S. and the rest of the world, respectively.

- Definition

The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-URI https://asc.fasb.org/topic&trid=49130388

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 10
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130551-203045

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (b)(2)
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130556-203045

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130554-203045

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 9
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130550-203045

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (e)
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130554-203045

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130554-203045

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (d)
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130554-203045

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 15
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130558-203045

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (c)
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130554-203045

+ Details

BALANCE SHEET COMPONENTS - Additional Information (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Inventory [Line Items]
Other long-term liabilities	$ 70,918	$ 0
La Jolla Pharmaceutical Company
Inventory [Line Items]
Inventory		$ 0
Fair Value Adjustments Of Inventory From Acquistion	49,500
Amortization of fair value adjustments of Cost of products sold	$ 10,000

CONSOLIDATED ENTITIES AND ACQUISITIONS

12 Months Ended

Dec. 31, 2022

Consolidated Entities

CONSOLIDATED ENTITIES AND ACQUISITIONS

5. CONSOLIDATED ENTITIES AND ACQUISITIONS

Consolidated Entities

Theravance Respiratory Company, LLC

Up until July 20, 2022, we consolidated TRC under the VIE model as we determined that TRC was a VIE and we were the primary beneficiary of the entity because we had the power to direct the economically significant activities of TRC and the obligation to absorb losses of, or the right to receive benefits from, TRC. We held 15% ownership interest of TRC. The primary source of revenue for TRC is the royalties generated from the net sales of TRELEGY® ELLIPTA® by GSK.

As discussed in Note 3, “Revenue Recognition”, on July 13, 2022, ITH entered into the TRC Equity Purchase Agreement to sell our ownership interest in TRC. Upon the closing of the transaction on July 20, 2022, we received $277.5 million in cash from Royalty Pharma. We are also entitled to receive up to $50.0 million in contingent sales-based milestone payments in the future. In connection with the closing of the transaction, we also received our portion of TRC’s remaining cash balance of $4.4 million from Royalty Pharma rather than through a cash distribution from TRC.

Prior to the closing of the transaction and as part of the agreement, TRC distributed its ownership interests and investments in InCarda Therapeutics, Inc., ImaginAb, Inc., Gate Neurosciences, Inc. and Nanolive SA, which had a total carrying value of $39.4 million, to ITH. We accounted for the transaction similar to an upstream sale between a parent and a VIE under ASC 810-10. As such,

ITH recorded the transferred investments at their respective carrying values and no gain or loss was recognized in the consolidated statement of income.

The summarized financial information for TRC as of December 31, 2021 and for the relevant periods through the sale date in 2022 are presented as follows:

Balance sheet


(In thousands)	December 31, 2021
Assets
Cash and cash equivalents	$	50,713
Receivables from collaborative arrangements		42,492
Prepaid expenses and other current assets		71
Equity and long-term investments		37,695
Total assets	$	130,971

Liabilities and LLC Members’ Equity
Current liabilities	$	252
LLC members’ equity		130,719
Total liabilities and LLC members’ equity	$	130,971

Income statements


	Year Ended December 31,
(In thousands)	2022 (1)			2021			2020
Royalty revenue	$	72,029		$	126,688		$	73,089
Revenue from collaborative arrangements		—			—			10,000
Total net revenue		72,029			126,688			83,089
Operating expenses		332			3,956			2,612
Income from operations		71,697			122,732			80,477
Other income, net		10			—			38
Realized loss		(39,386	)		—			—
Income tax expense, net		1			—			—
Changes in fair values of other equity and long-term investments		(8,884	)		(1,541	)		1,147
Net income	$	23,438		$	121,191		$	81,662

(1) The year ended December 31, 2022 represents the period from January 1, 2022 to July 20, 2022, the date of the sale of our ownership interest in TRC.

ISP Fund LP

In December 2020, Innoviva Strategic Partners LLC, our wholly owned subsidiary (“Strategic Partners”), contributed $300.0 million to ISP Fund LP (the "Partnership") for investing in “long” positions in the healthcare, pharmaceutical and biotechnology sectors and became a limited partner. The general partner of the Partnership ("General Partner") is an affiliate of Sarissa Capital.

The Partnership Agreement provides for Sarissa Capital to receive management fees from the Partnership, payable quarterly in advance, measured based on the Net Asset Value of Strategic Partners' capital account in the Partnership. In addition, the General Partner is entitled to an annual performance fee based on the Net Profits of the Partnership during the annual measurement period.

The Partnership Agreement includes a lock-up period of thirty-six months after which Strategic Partners is entitled to make withdrawals from the Partnership as of such lock-up expiration date and each anniversary thereafter, subject to certain limitations.

In May 2021, Strategic Partners received a distribution of $110.0 million from the Partnership to provide funding to Innoviva for a strategic repurchase of the Company's shares held by GSK. On March 30, 2022, Strategic Partners made an additional capital contribution of $110.0 million to the Partnership pursuant to the letter agreement entered into between Strategic Partners, the Partnership and Sarissa Capital Fund GP LP on May 20, 2021. The capital contribution is subject to a 36-month lock up period from the contribution date

We consolidate ISP Fund LP under the VIE model as we have determined that ISP Fund LP is a VIE and we are the primary beneficiary of the entity via our related party relationships with Sarissa Capital entities.

As of December 31, 2022, we continued to hold 100% of the economic interest of Partnership. As of December 31, 2022 and 2021, total assets of the Partnership were $320.6 million and $195.8 million, respectively, of which the majority was attributable to equity, debt and long-term investments. As of December 31, 2022 and 2021, total liabilities of the Partnership were $1.6 million and $0.2 million, respectively. The Partnership's assets can only be used to settle its own obligations. During the year ended December 31, 2022, the Partnership incurred $5.2 million in net investment-related expenses, generated $2.0 million interest income, recorded $6.8 million in net realized gains and $9.9 million in net unrealized losses as changes in fair values of other equity and long-term investments, net, on the consolidated statements of income. During the year ended December 31, 2021, the Partnership incurred $3.6 million in net investment-related expense, generated $1.8 million interest and dividend income, and recorded net $10.5 million realized gains and net $2.4 million unrealized losses as changes in fair values of other equity and long-term investments, net, on the consolidated statements of income. We account for the long-term investments held by ISP Fund LP as equity investments measured at fair value and an investment in convertible notes as trading security.

Acquisitions

Entasis Therapeutics Holdings Inc.

We started investing in Entasis in 2020 as part of our capital allocation strategy of deploying cash generated from royalty income and investing in different life sciences companies. Entasis is an advanced, late clinical-stage biopharmaceutical company focused on the discovery and development of novel antibacterial products. During the second quarter of 2020, we purchased 14,000,000 shares of common stock as well as warrants to purchase 14,000,000 additional shares of common stock of Entasis for approximately $35.0 million in cash. During the third quarter of 2020, we purchased 4,672,897 shares of Entasis common stock as well as warrants to purchase 4,672,897 additional shares of its common stock for approximately $12.5 million in cash. Effective in June 2020, after certain conditions were met with respect to the sales of Entasis equity shares, Innoviva had the right to designate two members to Entasis’ board of directors. During the second quarter of 2021, Innoviva’s wholly owned subsidiary, Innoviva Strategic Opportunities, LLC (“ISO”) entered into a securities purchase agreement with Entasis to acquire 10,000,000 shares of Entasis common stock and warrants to purchase 10,000,000 additional shares of Entasis common stock for approximately $20.0 million.

The fair value of Entasis’ common stock was measured based on its closing market price at each balance sheet date. The warrants had an exercise price of $2.50 per share and $2.675 per share for those warrants acquired in the second and third quarter of 2020, respectively. The warrants acquired in the second quarter of 2021 had an exercise price of $2.00 per share. All of the warrants were exercisable immediately within five years from the issuance date of the warrants and included a cashless exercise option. We used the Black-Scholes-Merton pricing model to estimate the fair value of these warrants.

On February 17, 2022, ISO entered into a securities purchase agreement with Entasis pursuant to which ISO purchased a convertible promissory note for a total purchase price of $15.0 million. The note bore an annual interest rate of 0.59% and was due to mature and become payable on August 18, 2022 unless it was converted at a conversion price of $1.48 before the maturity date. With this financing, we determined that we had both (i) the power to direct the economically significant activities of Entasis and (ii) the obligation to absorb the losses, or the right to receive the benefits, that could potentially be significant to Entasis and therefore, we were the primary beneficiary of Entasis. Accordingly, we consolidated Entasis’ financial position and results of operations effective on February 17, 2022. Our equity ownership interest remained at 59.9% as of February 17, 2022, and the fair values of our holdings of Entasis common stock and warrants were remeasured and estimated at $64.5 million and $31.4 million, respectively.

The remeasurement resulted in a $7.8 million loss in the first quarter of 2022 which was included in changes in fair values of equity method investments, net, on the consolidated statements of income for the year ended December 31, 2022.

We completed our acquisition of Entasis’ remaining noncontrolling interest on July 11, 2022. We remeasured our holdings in Entasis as of that date and recognized a $1.4 million loss, which was included in changes in fair values of equity method investments, net, on the consolidated statement of income for the year ended December 31, 2022. No payments were made toward the convertible promissory note through the date of acquisition of Entasis. In connection with the acquisition, all of the Entasis warrants were replaced with Innoviva warrants (the “Replacement Warrants”) of equivalent value and bearing the same terms. The Replacement Warrants are classified as equity.

We recognized the difference between the acquisition price and the carrying value of the acquired noncontrolling interest on July 11, 2022 in our additional paid-in capital.

The fair values assigned to assets acquired and liabilities assumed as of February 17, 2022 were based on management’s best estimates and assumptions. After the acquisition in July 2022, we adjusted the preliminary estimates of fair value of assets acquired and liabilities assumed based on new and additional information related to product sales forecast provided by Entasis and deferred tax liabilities.

During the year ended December 31, 2022, we recorded measurement period adjustments of $4.7 million decrease in goodwill, primarily related to a decrease in estimated purchase price of $1.4 million, an increase in noncontrolling interests of $1.7 million, and an increase in intangible assets of $2.5 million. The cumulative impact of the measurement period adjustments included in the consolidated net income for the year ended December 31, 2022 was not material.

The Company has completed a preliminary valuation and expects to finalize it as soon as practical, but no later than one year from the acquisition date. The purchase accounting for this transaction is not yet finalized.

The following table represents the adjusted fair values of the assets acquired and liabilities assumed by us in the transaction:


(In thousands)	February 17, 2022
Cash and cash equivalents	$	23,070
Prepaid expenses		5,554
Other current assets		1,959
Property and equipment, net		185
Right-of-use assets		959
Goodwill		10,260
Intangible assets		107,500
Other assets		302
Total assets acquired	$	149,789

Accounts payable	$	1,583
Accrued personnel-related expenses		1,058
Other accrued liabilities		5,096
Deferred tax liabilities		7,336
Total liabilities assumed	$	15,073

Total assets acquired, net	$	134,716

The goodwill arising from the acquisition of Entasis is primarily attributable to Entasis’ assembled workforce and the value associated with growing our business more efficiently. The goodwill from this acquisition is not expected to be deductible for tax purposes.

Refer to Note 8, “Goodwill and Intangible Assets”, for more discussion on the intangible assets recognized as part of this acquisition.

Our consolidated net income for the year ended December 31, 2022 included the net loss attributable to noncontrolling interest since the consolidation date until the date of acquisition of $13.6 million.

La Jolla Pharmaceutical Company

On August 22, 2022, ISO acquired La Jolla for a total consideration of $206.6 million. ISO acquired La Jolla at a price of $6.23 per share. La Jolla is dedicated to the commercialization of innovative therapies that improve outcomes in patients suffering from life-threatening diseases. La Jolla brings to Innoviva an established product portfolio, including GIAPREZA® (angiotensin II), approved to increase blood pressure in adults with septic or other distributive shock and XERAVA® (eravacycline) for the treatment of cIAIs.

The fair values assigned to assets acquired and liabilities assumed are based on management’s best estimates and assumptions as of August 22, 2022.

During the year ended December 31, 2022, we recorded measurement period adjustments of $3.7 million increase in goodwill, primarily related to a decrease in inventory and intangible assets of $7.7 million and $1.5 million, respectively, and an increase in deferred tax liabilities of $2.6 million, partially offset by a decrease in other long-term liabilities of $8.3 million. The cumulative impact of the measurement period adjustments included in the consolidated net income for the year ended December 31, 2022 was not material.

We have completed a preliminary valuation and expect to finalize it as soon as practicable, but no later than one year from the acquisition date. The purchase accounting for this transaction is not yet finalized.

We incurred approximately $5.3 million in acquisition-related costs in connection with this acquisition and such amount is included in selling, general and administrative expenses for the year ended December 31, 2022.

The following table summarizes the adjusted allocation of the fair values assigned to the assets acquired and liabilities assumed as of the date of the acquisition:


(In thousands)	August 22, 2022
Cash and cash equivalents	$	47,415
Short-term marketable securities		471
Accounts receivable		5,876
Inventory		66,200
Prepaid expenses		1,261
Other current assets		907
Property and equipment, net		13
Right-of-use assets		226
Goodwill		16,453
Intangible assets		151,000
Other assets		710
Total assets acquired	$	290,532

Accounts payable	$	1,237
Deferred revenue		2,849
Other accrued liabilities		11,362
Other long-term liabilities		65,944
Deferred tax liabilities		2,581
Total liabilities assumed	$	83,973

Total assets acquired, net	$	206,559

The goodwill arising from the acquisition of La Jolla is primarily attributable to La Jolla’s assembled workforce and the value associated with leveraging the workforce to develop and commercialize new drug products in the future and growing our business more efficiently. The goodwill from this acquisition is not expected to be deductible for tax purposes.

Refer to Note 8, “Goodwill and Intangible Assets”, for more discussion on the intangible assets recognized as part of this acquisition.

Pro Forma Financial Information

The following table presents certain unaudited pro-forma financial information for the years ended December 31, 2022 and 2021 as if the consolidation of Entasis and La Jolla occurred on January 1, 2021. The unaudited pro forma financial information is presented for informational purposes only, and is not indicative of the results of operations that would have been achieved if the acquisitions had taken place on January 1, 2021, or of results that may occur in the future. The unaudited pro forma financial information combines the historical results of the Entasis and La Jolla with the Company’s consolidated historical results and includes certain adjustments including, but not limited to, fair value adjustments to equity investments in Entasis’ common stock and warrants, fair value adjustments to inventory, amortization of intangible assets, and interest expense on deferred royalty obligations and acquisition-related costs.


	Year Ended December 31,
(In thousands)	2022		2021
Revenue	$	357,880	$	435,398
Net income	$	204,987	$	281,719
Net income attributable to Innoviva stockholders	$	214,390	$	197,535

EQUITY AND LONG-TERM INVESTMENTS AND FAIR VALUE MEASUREMENTS - Equity Investment in Nanolive (Details) - Nanolive SFr in Millions, $ in Millions	Feb. 28, 2022 USD ($)	Feb. 18, 2022 CHF (SFr) shares	Feb. 18, 2022 USD ($) shares	Dec. 31, 2022 USD ($) Director
Equity Investment
Transaction costs to acquire equity securities \| $	$ 0.7
Number of Investee's Board members currently representing the Company \| Director				1
Number of the Investee's Board members \| Director				7
Equity investment ownership percentage				15.50%
Fair value of equity securities \| $				$ 10.6
Series C preferred stock
Equity Investment
Number of shares to be purchased under the securities purchase agreement \| shares		18,750,000	18,750,000
Amount of securities purchase agreement		SFr 9.0	$ 9.8

NET INCOME PER SHARE (Tables)

12 Months Ended

Dec. 31, 2022

Earnings Per Share [Abstract]

Schedule of computation of basic and diluted net income per share

The following table shows the computation of basic and diluted net income per share for the years ended December 31, 2022, 2021 and 2020:


	Year Ended December 31,
(In thousands except per share data)	2022		2021		2020
Numerator:
Net income attributable to Innoviva stockholders, basic	$	213,921	$	265,854	$	224,402
Add: interest expense on 2023 Notes, net of tax effect		2,439		4,736		4,717
Add: interest expense on 2025 Notes, net of tax effect		4,583		—		—
Add: interest expense on 2028 Notes, net of tax effect		4,626		—		—
Net income attributable to Innoviva stockholders, diluted	$	225,569	$	270,590	$	229,119
Denominator:
Weighted-average shares used to compute basic net income per share attributable to Innoviva stockholders		69,644		82,062		101,320
Dilutive effect of 2023 Notes		6,188		12,189		12,189
Dilutive effect of 2025 Notes		11,150		—		—
Dilutive effect of 2028 Notes		8,158		—		—
Dilutive effect of options and awards granted under equity incentive plan and employee stock purchase plan		108		59		45
Weighted-average shares used to compute diluted net income per share attributable to Innoviva stockholders		95,248		94,310		113,554
Net income per share attributable to Innoviva stockholders
Basic	$	3.07	$	3.24	$	2.21
Diluted	$	2.37	$	2.87	$	2.02

Schedule of anti-dilutive securities

The following common stock equivalents were not included in the computation of diluted net income per share because their effect was anti‑dilutive:


	Year Ended December 31,
(In thousands)	2022		2021		2020
Outstanding options and awards granted under equity incentive plan and employee stock purchase plan		648		979		1,193
Outstanding stock warrant		282		—		—
Total		930		979		1,193

CONSOLIDATED ENTITIES AND ACQUISITIONS - ISP Fund LP (Details) - USD ($) $ in Thousands		12 Months Ended
	Mar. 30, 2022	Dec. 31, 2022	Dec. 31, 2021	May 31, 2021	Dec. 31, 2020
CONSOLIDATED ENTITIES
Total assets		$ 1,231,497	$ 926,395
ISP Fund LP
CONSOLIDATED ENTITIES
Distribution from partnership				$ 110,000
Capital contribution	$ 110,000				$ 300,000
Economic interest of the Partnership (in percent)		100.00%
Total liabilities		$ 1,600	200
Investment-related expenses, net of investment-related income		5,200	3,600
Investment Income, Interest		2,000
Unrealized loss on other equity investments		9,900	2,400
Lock-up period	36 months
Investment Income, Interest and Dividend			1,800
Realized gain on equity investments		6,800	10,500
Total assets		$ 320,600	$ 195,800

COMMITMENTS AND CONTINGENCIES

12 Months Ended

Dec. 31, 2022

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

13. COMMITMENTS AND CONTINGENCIES

Operating Lease

We have operating leases for our corporate headquarters, office spaces and laboratory facilities.

Our operating leases include a facility lease consisting of 20,062 square feet of office and laboratory space in Waltham, Massachusetts. Effective April 2022, we exercised our renewal option for to extend the lease term for three additional years through December 2025.

In 2019, we entered into an operating lease for our headquarters in Burlingame, California for approximately 2,111 rentable square feet. The lease commenced in November 2019 with a term of thirty-six calendar months, which was subsequently amended to expire in December 2023.

The components of lease costs are as follows:


	Year Ended
(In thousands)	December 31, 2022
Straight line operating lease costs	$	1,585
Variable lease costs		155
Total lease costs	$	1,740

Supplemental cash flow information related to leases are as follows:


	Year Ended
(In thousands)	December 31, 2022
Cash paid for amounts included in the measurement of operating lease liabilities:	$	790
Operating lease right-of-use assets obtained in exchange for operating lease obligations		3,323
Right-of-use assets obtained through acquisitions		1,185

As of December 31, 2022, our operating leases have a weighted-average remaining lease term of 2.8 years and the weighted-average incremental borrowing rate used to determine the operating lease right-of-use assets and lease liabilities was 7.5%.

We have not presented the comparative information above for the years ended December 31, 2021 and 2020 as our operating lease during those years was not material.

The following table summarizes our operating leases as presented on the consolidated balance sheets:


	December 31,
(In thousands)	2022		2021
Assets
Right-of-use assets	$	3,265	$	97
Liabilities
Current portion of lease liabilities included within Other accrued liabilities	$	1,316	$	106
Long-term portion of lease liabilities included within Other long-term liabilities		2,376		—
Total lease liabilities	$	3,692	$	106

Future minimum lease payments on our operating leases as of December 31, 2022 are as follows:


(In thousands)	Amount
Year ending December 31,
2023	$	1,542
2024		1,269
2025		1,289
Total undiscounted lease payments		4,100
Less: imputed interest		(408	)
Total operating lease liabilities	$	3,692

Legal Proceedings

From time to time, the Company is involved in legal proceedings in the ordinary course of its business. We are not currently a party to any material legal proceedings except as discussed below.

On February 15, 2022, La Jolla received a paragraph IV notice of certification (the “Notice Letter”) from Gland Pharma Limited (“Gland”) advising that Gland had submitted an Abbreviated New Drug Application (“ANDA”) to the FDA seeking approval to manufacture, use or sell a generic version of GIAPREZA® in the U.S. prior to the expiration of U.S. Patent Nos.: 9,220,745; 9,572,856; 9,867,863; 10,028,995; 10,335,451; 10,493,124; 10,500,247; 10,548,943; 11,096,983; and 11,219,662 (the “GIAPREZA® Patents”), which are listed in the FDA’s Approved Drug Products with Therapeutic Equivalence Evaluations (the “Orange Book”). The Notice Letter alleges that the GIAPREZA® Patents are invalid, unenforceable and/or will not be infringed by the commercial manufacture, use or sale of the generic product described in Gland’s ANDA.

On March 29, 2022, La Jolla filed a complaint for patent infringement of the GIAPREZA® Patents against Gland and certain related entities in the United States District Court for the District of New Jersey in response to Gland’s ANDA filing. In accordance with the Hatch-Waxman Act, because GIAPREZA® is a new chemical entity and La Jolla filed a complaint for patent infringement within 45 days of receipt of the Notice Letter, the FDA cannot approve Gland’s ANDA any earlier than 7.5 years from the approval of the GIAPREZA® NDA unless the District Court finds that all of the asserted claims of the patents-in-suit are invalid, unenforceable and/or not infringed. We intend to vigorously enforce our intellectual property rights relating to GIAPREZA®.

Given the early stage of this matter, we cannot reasonably estimate a potential future loss or a range of potential future losses, if any, and have not recorded a contingent liability accrual as of December 31, 2022.

Indemnifications and Other Contingencies

In the ordinary course of business, we may provide indemnifications of varying scope and terms to vendors, directors, officers, and other parties with respect to certain matters, including, but not limited to, losses arising out of breach of such agreements, services to be provided by us, our negligence or willful misconduct, violations of law, or intellectual property infringement claims made by

third parties. In addition, we have entered into indemnification agreements with directors and certain officers and employees that will require us, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors, officers, or employees. No material demands have been made upon us to provide indemnification under such agreements, and thus, there are no claims that we are aware of that could have a material effect on our consolidated financial statements. We also maintain director and officer insurance, which may cover certain liabilities arising from our obligation to indemnify our directors. To date, we have not incurred any material costs and, as of December 31, 2022, we have not accrued any liabilities in the consolidated financial statements as a result of these provisions.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Statement of Comprehensive Income [Abstract]
Net income	$ 220,262	$ 368,837	$ 293,814
Reclassifications to net income	0	0	(27)
Comprehensive income	220,262	368,837	293,787
Comprehensive income attributable to noncontrolling interests	6,341	102,983	69,412
Comprehensive income attributable to Innoviva stockholders	$ 213,921	$ 265,854	$ 224,375

- Definition

Amount after tax of increase (decrease) in equity from transactions and other events and circumstances from net income (loss) and other comprehensive income (loss), attributable to noncontrolling interests. Excludes changes in equity resulting from investments by owners and distributions to owners.

+ References + Details

- Definition

Amount after tax of increase (decrease) in equity from transactions and other events and circumstances from net income and other comprehensive income. Excludes changes in equity resulting from investments by owners and distributions to owners.

+ References + Details

- Definition

The consolidated profit or loss for the period, net of income taxes, including the portion attributable to the noncontrolling interest.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(g)(1)(ii))
-URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
-Section 45
-Paragraph 1A
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126968391&loc=SL7669619-108580

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 810
-SubTopic 10
-Section 50
-Paragraph 1A
-Subparagraph (a)(1)
-URI https://asc.fasb.org/extlink&oid=109239629&loc=SL4573702-111684

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
-Section 50
-Paragraph 9
-URI https://asc.fasb.org/extlink&oid=124431687&loc=d3e22663-107794

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 10
-Section S99
-Paragraph 1A
-Subparagraph (SX 210.13-01(a)(4)(i))
-URI https://asc.fasb.org/extlink&oid=126975872&loc=SL124442526-122756

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 10
-Section S99
-Paragraph 1B
-Subparagraph (SX 210.13-02(a)(4)(i))
-URI https://asc.fasb.org/extlink&oid=126975872&loc=SL124442552-122756

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 22
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8736-108599

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (c)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8933-108599

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 40
-Section 65
-Paragraph 1
-Subparagraph (f)
-URI https://asc.fasb.org/extlink&oid=126732423&loc=SL123482106-238011

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 10
-Section S99
-Paragraph 1A
-Subparagraph (SX 210.13-01(a)(5))
-URI https://asc.fasb.org/extlink&oid=126975872&loc=SL124442526-122756

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 10
-Section S99
-Paragraph 1B
-Subparagraph (SX 210.13-02(a)(4)(iv))
-URI https://asc.fasb.org/extlink&oid=126975872&loc=SL124442552-122756

Reference 12: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
-Section 50
-Paragraph 6
-URI https://asc.fasb.org/extlink&oid=124431353&loc=SL124452729-227067

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 30
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8906-108599

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 230
-SubTopic 10
-Section 45
-Paragraph 2
-URI https://asc.fasb.org/extlink&oid=126954810&loc=d3e3000-108585

Reference 15: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 810
-SubTopic 10
-Section 45
-Paragraph 19
-URI https://asc.fasb.org/extlink&oid=126929396&loc=SL4569616-111683

Reference 16: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 323
-SubTopic 10
-Section 50
-Paragraph 3
-Subparagraph (c)
-URI https://asc.fasb.org/extlink&oid=114001798&loc=d3e33918-111571

Reference 17: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (f)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8933-108599

Reference 18: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 10
-Section S99
-Paragraph 1B
-Subparagraph (SX 210.13-02(a)(4)(iii)(A))
-URI https://asc.fasb.org/extlink&oid=126975872&loc=SL124442552-122756

Reference 19: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 205
-SubTopic 20
-Section 50
-Paragraph 7
-URI https://asc.fasb.org/extlink&oid=109222650&loc=SL51721683-107760

Reference 20: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
-Section 50
-Paragraph 1
-Subparagraph (b)(2)
-URI https://asc.fasb.org/extlink&oid=124431687&loc=d3e22499-107794

Reference 21: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 10
-Section 50
-Paragraph 28
-Subparagraph (f)
-URI https://asc.fasb.org/extlink&oid=123596393&loc=d3e14064-108612

Reference 22: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 235
-Section S99
-Paragraph 1
-Subparagraph (SX 210.9-05(b)(2))
-URI https://asc.fasb.org/extlink&oid=120399901&loc=d3e537907-122884

Reference 23: http://www.xbrl.org/2003/role/exampleRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 31
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8924-108599

Reference 24: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
-Section 45
-Paragraph 1B
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126968391&loc=SL7669625-108580

Reference 25: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 10
-Section S99
-Paragraph 1A
-Subparagraph (SX 210.13-01(a)(4)(iv))
-URI https://asc.fasb.org/extlink&oid=126975872&loc=SL124442526-122756

Reference 26: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 10
-Section S99
-Paragraph 1A
-Subparagraph (SX 210.13-01(a)(4)(iii)(A))
-URI https://asc.fasb.org/extlink&oid=126975872&loc=SL124442526-122756

Reference 27: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 10
-Section S99
-Paragraph 1B
-Subparagraph (SX 210.13-02(a)(5))
-URI https://asc.fasb.org/extlink&oid=126975872&loc=SL124442552-122756

Reference 28: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 10
-Section S99
-Paragraph 1B
-Subparagraph (SX 210.13-02(a)(4)(iii)(B))
-URI https://asc.fasb.org/extlink&oid=126975872&loc=SL124442552-122756

Reference 29: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 10
-Section S99
-Paragraph 1A
-Subparagraph (SX 210.13-01(a)(4)(ii))
-URI https://asc.fasb.org/extlink&oid=126975872&loc=SL124442526-122756

Reference 30: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 810
-SubTopic 10
-Section 50
-Paragraph 1A
-Subparagraph (c)(1)
-URI https://asc.fasb.org/extlink&oid=109239629&loc=SL4573702-111684

Reference 31: http://www.xbrl.org/2003/role/exampleRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 810
-SubTopic 10
-Section 55
-Paragraph 4J
-URI https://asc.fasb.org/extlink&oid=120409616&loc=SL4591551-111686

Reference 32: http://www.xbrl.org/2003/role/exampleRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 810
-SubTopic 10
-Section 55
-Paragraph 4K
-URI https://asc.fasb.org/extlink&oid=120409616&loc=SL4591552-111686

Reference 33: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
-Section 50
-Paragraph 8
-URI https://asc.fasb.org/extlink&oid=124431687&loc=d3e22658-107794

+ Details

DEBT - Debt Maturities (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Long-term debt maturities for years ending December 31:
2023	$ 96,204
2024	0
2025	192,500
2026	0
2027	0
Thereafter	261,000
Total	$ 549,704	$ 433,484

DEBT - Convertible Senior Notes (Details) $ / shares in Units, $ in Thousands			3 Months Ended	12 Months Ended
	Mar. 07, 2022 USD ($)	Aug. 07, 2017 USD ($) $ / shares	Mar. 31, 2022 USD ($) $ / shares $ / Item	Dec. 31, 2022 USD ($) $ / shares	Dec. 31, 2021 USD ($)	Dec. 31, 2020 USD ($)	Apr. 18, 2022 USD ($)	Jan. 01, 2022	Aug. 01, 2017 $ / shares	Dec. 31, 2016 USD ($)	Jul. 31, 2014 $ / Item	Jan. 31, 2013 USD ($) $ / shares $ / Item
Debt
Payment for repurchase of debt instrument				$ 165,131	$ 0	$ 0
Liability component
Principal				549,704	433,484
Debt discount and issuance costs, net				$ (9,331)	(38,831)
2023 Notes \| Privately-negotiated capped call option
Debt
Cap price for the underlying number of shares (in dollars per share) \| $ / Item											27.04
2025 Notes
Debt
Common stock price to current conversion price ratio				130.00%
Average trading price percentage				98.00%
Effective interest rate				8.87%
Total issuance costs				$ 5,400
Liability issuance costs				3,500
Equity issuance costs				1,900
2025 Notes \| ASU 2020-06
Debt
Unamortized Debt discount				$ 67,300
Effective interest rate								2.88%
2025 Notes \| Common stock
Debt
Share Price \| $ / shares									$ 13.28
2028 Notes
Debt
Debt instrument, covenant terms description				The indenture governing the 2028 Notes contains customary terms and covenants, including a merger covenant and that upon certain events of default occurring and continuing, either the Trustee or the holders of at least 25% of the aggregate principal amount of the outstanding Notes may declare 100% of the principal of, and accrued and unpaid interest, if any, on, all the Notes to be due and payable immediately.
Convertible senior notes \| 2025 Notes
Debt
Ratio of repurchase price to the principal amount				100.00%
Liability component
Principal				$ 192,500	192,500
Debt discount and issuance costs, net				(1,917)	(38,211)
Net carrying amount				190,583	154,289
Equity component, net				0	65,361
Interest expense
Contractual interest expense				4,813	4,813	4,813
Amortization of debt issuance costs				692	657	601
Amortization of debt discount				0	7,898	7,230
Total interest and amortization expense				$ 5,505	13,368	12,644
Convertible senior notes \| 2025 Notes \| Over-Allotment Option
Debt
Loan amount		$ 17,500
Portion of debt instrument face amount, Exercised		17,500
Convertible senior notes \| 2025 Notes \| Private Placement
Debt
Loan amount		$ 192,500
Debt Instrument, annual interest rate		2.50%
Convertible senior notes \| 2025 Notes \| Common stock
Debt
Conversion rate for shares of common stock per $1,000 principal		57.9240
Conversion price (dollars per share) \| $ / shares		$ 17.26		$ 17.26
Debt instrument maturity date		Aug. 15, 2025
Conversion premium (as a percent)		30.00%
Convertible senior notes \| 2028 Notes
Debt
Loan amount			$ 261,000
Debt instrument maturity date			Mar. 15, 2028
Proceeds from issuance of convertible notes, net of issuance costs			$ 252,600
Common stock price to current conversion price ratio			130.00%
Average trading price percentage			98.00%
Ratio of repurchase price to the principal amount			100.00%
Effective interest rate				2.70%
Liability component
Principal				$ 261,000	0
Debt discount and issuance costs, net				(7,403)
Net carrying amount				253,597
Interest expense
Contractual interest expense				4,514
Amortization of debt issuance costs				1,061
Total interest and amortization expense				5,575
Convertible senior notes \| 2028 Notes \| Privately-negotiated capped call option
Debt
Cap price for the underlying number of shares (in dollars per share) \| $ / Item			33.9850
Purchases of capped calls in connection with convertible senior notes due 2028			$ 21,000
Convertible senior notes \| 2028 Notes \| Over-Allotment Option
Debt
Loan amount			45,000
Portion of debt instrument face amount, Exercised			$ 36,000
Convertible senior notes \| 2028 Notes \| Private Placement
Debt
Debt Instrument, annual interest rate			2.125%
Convertible senior notes \| 2028 Notes \| Common stock
Debt
Conversion rate for shares of common stock per $1,000 principal			38.1432
Conversion price (dollars per share) \| $ / shares			$ 26.22
Convertible subordinated notes \| 2023 Notes
Debt
Loan amount												$ 287,500
Debt Instrument, annual interest rate												2.125%
Conversion price (dollars per share) \| $ / shares												$ 27.79
Debt Instrument, Repurchased Face Amount	$ 144,800		$ 144,800							$ 14,100
Payment for repurchase of debt instrument	165,600		$ 165,600
Liability component
Principal	96,200			96,204	240,984		$ 96,200
Debt discount and issuance costs, net	$ (200)			(11)	(620)
Interest expense
Contractual interest expense				2,617	5,121	5,121
Amortization of debt issuance costs				302	580	567
Total interest and amortization expense				$ 2,919	$ 5,701	$ 5,688
Convertible subordinated notes \| 2023 Notes \| Privately-negotiated capped call option
Debt
Cap price for the underlying number of shares (in dollars per share) \| $ / Item												38.00

SUBSEQUENT EVENTS

12 Months Ended

Dec. 31, 2022

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

15. SUBSEQUENT EVENTS

On January 10, 2023, we entered into a Secured Convertible Credit Agreement (the “Credit Agreement”) with Armata, under which we extended a one-year term loan facility in an aggregate amount of $30.0 million at an interest rate of 8.0% per annum. Pursuant to the Credit Agreement, the balance on the loan, including all accrued and unpaid interest thereon, will convert into shares of Armata's common stock upon the occurrence of a qualified financing, as defined in the Credit Agreement. Any portion of the balance on the loan, including all accrued and unpaid interest thereon, may also be converted into shares of Armata's common stock at our option once a registration statement covering the resale of such securities has been declared effective by the SEC. The loan is secured by substantially all of the assets of Armata and its domestic and foreign material subsidiaries.

On February 2, 2023, ITH entered into a Note Amendment Agreement (the "Note Amendment Agreement") with Gate to amend the Convertible Promissory Note Purchase Agreement entered into in November 2021 between TRC and Gate to acquire the Gate Convertible Note (refer to Note 6, “Equity and Long-Term Investments and Fair Value Measurements”). Pursuant to the Note Amendment Agreement, the principal amount of the Gate Convertible Note was increased from $15.0 million to $21.5 million, which represents the original principal and accrued interests as of the amendment date. All other material terms of the Gate Convertible Note were unchanged.

CONSOLIDATED ENTITIES AND ACQUISITIONS - Theravance Respiratory Company, LLC (Details) - USD ($)
$ in Thousands

12 Months Ended

Jul. 20, 2022

Dec. 31, 2022

Dec. 31, 2021

Dec. 31, 2020

Assets

Cash and cash equivalents

$ 291,049

$ 201,525

Prepaid expenses and other current assets

29,559

1,367

Equity and long-term investments

403,013

483,845

Total assets

1,231,497

926,395

Liabilities and Stockholders Equity

Current liabilities

134,968

5,807

Total liabilities and stockholders' equity

1,231,497

926,395

Income statements

Total net revenue

331,339

391,866

$ 336,794

Other income, net

(3,373)

(3,626)

(348)

Income tax expense, net

66,687

76,439

60,431

Net income

220,262

368,837

293,814

Royalty revenue

Income statements

Total net revenue

311,645

391,866

326,794

Revenue from collaborative arrangements

Income statements

Total net revenue

$ 0

10,000

Theravance Respiratory Company, LLC

CONSOLIDATED ENTITIES

Ownership interest in LLC

15.00%

Proceeds from sale of economic interest under Equity Purchase Agreement

$ 277,500

Contingent sales based milestone payment

50,000

Cash distribution

4,400

Total carrying value of investments

$ 39,400

Assets

Cash and cash equivalents

50,713

Receivables from collaborative arrangements

42,492

Prepaid expenses and other current assets

Equity and long-term investments

37,695

Total assets

130,971

Liabilities and Stockholders Equity

Current liabilities

252

LLC members' equity

130,719

Total liabilities and stockholders' equity

130,971

Income statements

Total net revenue

$ 72,029

^[1]

126,688

83,089

Operating expenses

332

^[1]

3,956

2,612

Income from operations

71,697

^[1]

122,732

80,477

Other income, net

^[1]

Realized loss

(39,386)

^[1]

Income tax expense, net

^[1]

Changes in fair values of other equity and long-term investments

(8,884)

^[1]

(1,541)

1,147

Net income

23,438

^[1]

121,191

81,662

Theravance Respiratory Company, LLC | Royalty revenue

Income statements

Total net revenue

72,029

^[1]

126,688

73,089

Theravance Respiratory Company, LLC | Revenue from collaborative arrangements

Income statements

Total net revenue

^[1]

$ 10,000

ISP Fund LP

Assets

Total assets

320,600

195,800

Income statements

Changes in fair values of other equity and long-term investments

$ 6,800

$ 10,500

[1]	(1) The year ended December 31, 2022 represents the period from January 1, 2022 to July 20, 2022, the date of the sale of our ownership interest in TRC.

STOCK-BASED COMPENSATION - Director Compensation Program (Details) - RSUs - Non-employee director	1 Months Ended
	Oct. 31, 2017 USD ($)	Sep. 30, 2017 USD ($)	Dec. 31, 2016 Installment
Stock-based compensation
One time grant of shares, value	$ 125,000	$ 250,000
Pro rata shares grant, value	225,000	250,000
Number of annual installments \| Installment			2
Annual grant of shares, value	$ 225,000	$ 250,000

STOCK-BASED COMPENSATION (Tables)

12 Months Ended

Dec. 31, 2022

Share-Based Payment Arrangement [Abstract]

Schedule of stock-based compensation expense

Stock‑based compensation expense is included in the consolidated statements of income as follows:


	Year Ended December 31,
(In thousands)	2022		2021		2020
Selling, general and administrative	$	5,305	$	2,017	$	1,698
Research and development		2,042		—		—
Total	$	7,347	$	2,017	$	1,698

Schedule of stock-based compensation expense included in the consolidated statements of operations by award type

Stock‑based compensation expense included in the consolidated statements of income by award type is as follows:


	Year Ended December 31,
(In thousands)	2022		2021		2020
Stock options	$	3,057	$	490	$	242
RSUs		4,053		1,280		1,149
RSAs		194		200		273
ESPP		43		47		34
Total stock-based compensation expense	$	7,347	$	2,017	$	1,698

Schedule of unrecognized stock-based compensation cost

As of December 31, 2022, the unrecognized stock-based compensation cost and the estimated weighted-average amortization period were as follows:


(In thousands)	Unrecognized Compensation Cost		Weighted-Average Amortization Period (Years)
Stock options	$	3,550		2.9
RSUs		4,776		2.2
RSAs		388		2.6
Total unrecognized compensation expense	$	8,714

Summary of equity award activity and related information

The following table summarizes equity award activity under the 2012 Plan and prior plans and related information:


(In thousands, except per share data)	Number of outstanding options			Weighted-Average Exercise Price of Outstanding Options		Number of outstanding RSUs			Weighted-Average Fair Value per Share at Grant		Number of outstanding RSAs			Weighted-Average Fair Value per Share at Grant
Balance as of December 31, 2021		766		$	20.79		116		$	12.82		29		$	13.35
Granted		492		$	14.92		676		$	11.06		15		$	16.67
Exercised		(15	)	$	17.11		—		$	—		—		$	—
Released RSUs and RSAs		—		$	—		(233	)	$	9.90		(14	)	$	13.51
Forfeited		(295	)	$	28.01		(41	)	$	8.80		—		$	—
Balance as of December 31, 2022		948		$	15.56		518		$	12.16		30		$	14.97
Vested and expected to vest as of December 31, 2022		948		$	15.56		518		$	12.16		—		$	—

Summary of weighted-average assumptions used to calculate estimated value of stock options

The weighted-average assumptions used in calculating the estimated value of our stock options on the date of grant as follows:


	Year Ended December 31,
	2022			2021			2020
Risk-free interest rate		3.6	%		1.1	%		0.4	%
Expected term (in years)		6.04			6.11			6.11
Volatility		38.6	%		44.9	%		46.9	%
Dividend yield		0.0	%		0.0	%		0.0	%
Weighted-average estimated fair value of stock options granted	$	6.43		$	5.84		$	6.28

DESCRIPTION OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Description of Operations (Details) $ in Millions	12 Months Ended
	Dec. 31, 2022 USD ($) Customer	Jul. 20, 2022
DESCRIPTION OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Number of customers \| Customer	3
Capitalized fees paid, estimated useful life	15 years
ASU 2020-06
DESCRIPTION OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Decrease to accumulated deficit	$ 37.2
Reduction to Additional Paid in Capital	65.4
Increase in Deferred Tax Assets	$ 7.4
Theravance Respiratory Company, LLC
DESCRIPTION OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Equity method investment ownership percentage		15.00%
Customer Concentration Risk \| Net Product Sales \| La Jolla [Member] \| Customer One
DESCRIPTION OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Concentration Risk, Percentage	33.00%
Customer Concentration Risk \| Net Product Sales \| La Jolla [Member] \| Customer Two
DESCRIPTION OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Concentration Risk, Percentage	29.00%
Customer Concentration Risk \| Net Product Sales \| La Jolla [Member] \| Customer Three
DESCRIPTION OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Concentration Risk, Percentage	28.00%
Customer Concentration Risk \| Receivables from Net Product Sales \| La Jolla [Member] \| Customer One
DESCRIPTION OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Concentration Risk, Percentage	23.00%
Customer Concentration Risk \| Receivables from Net Product Sales \| La Jolla [Member] \| Customer Two
DESCRIPTION OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Concentration Risk, Percentage	37.00%
Customer Concentration Risk \| Receivables from Net Product Sales \| La Jolla [Member] \| Customer Three
DESCRIPTION OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Concentration Risk, Percentage	37.00%
Two Thousand Twenty Five Notes [Member] \| ASU 2020-06
DESCRIPTION OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Increase in convertible notes	$ 35.6
Long-Acting Beta2 Agonist (LABA) Collaboration \| GSK \| RELVAR/BREO
DESCRIPTION OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Royalty rate for first level of annual global net sales (as a percent)	15.00%
Annual global sales level used to determine royalty rate	$ 3,000.0
Royalty rate for sales above first level of annual global net sales (as a percent)	5.00%
Long-Acting Beta2 Agonist (LABA) Collaboration \| GSK \| ANORO \| Minimum
DESCRIPTION OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Royalty rate for combination products (as a percent)	6.50%
Long-Acting Beta2 Agonist (LABA) Collaboration \| GSK \| ANORO \| Maximum
DESCRIPTION OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Royalty rate for combination products (as a percent)	10.00%

INCOME TAXES - Additional Tax Disclosures (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Income Taxes
Accrued interest and penalties	$ 0	$ 0
Uncertain Tax Positions
Unrecognized tax benefits	16,324	14,872	$ 15,185	$ 15,342
Net decrease in tax portions		$ (313)	$ (157)
Net increase in tax portions	1,452
Entasis Therapeutics Holdings Inc
Income Taxes
Federal net operating losses estimated utilization amount	157,400
La Jolla Pharmaceutical Company
Income Taxes
Federal net operating losses estimated utilization amount	254,000
Federal
Income Taxes
Net operating loss carryforwards	411,500
State
Income Taxes
Net operating loss carryforwards	955,300
State \| Research and development
Income Taxes
Tax credit carryforward amount	$ 33,300

DESCRIPTION OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Related Party Transactions (Details)	Dec. 31, 2022
Sarissa Capital
Related Parties
Percentage of common stock owned by a related party	9.60%

STOCK-BASED COMPENSATION

12 Months Ended

Dec. 31, 2022

Share-Based Payment Arrangement [Abstract]

STOCK-BASED COMPENSATION

10. STOCK‑BASED COMPENSATION

Equity Incentive Plans

In May 2012, we adopted the 2012 Equity Incentive Plan (the “2012 Plan”). The 2012 Plan provides for the grant of incentive stock options, nonstatutory stock options, RSAs, RSUs and Stock Appreciation Rights to employees, non-employee directors and consultants. As of December 31, 2022, total shares remaining available for issuance under the 2012 Plan were 3,838,270.

Employee Stock Purchase Plan

Under the 2004 Employee Stock Purchase Plan (the “ESPP”), our employees may purchase common stock through payroll deductions at a price equal to 85% of the lower of the fair market value of the stock at the beginning of the offering period or at the end of each applicable purchase period. The ESPP provides for consecutive and overlapping offering periods of 24 months in duration, with each offering period composed of four consecutive six-month purchase periods. The purchase periods end on either May 15 or November 15. ESPP contributions are limited to a maximum of 15% of an employee’s eligible compensation. The maximum number of shares that an employee may purchase in any purchase period is 2,500. An employee may not purchase shares with a value greater than $25,000 in any calendar year.

As of December 31, 2022, total shares remaining available for issuance under the ESPP were 160,995.

Director Compensation Program

Our non-employee directors receive compensation for services provided as a director. Each member of our board of directors who is not an employee receives both cash and equity compensation for services as a director, member of a committee of the board of directors, lead independent director and chairman, as applicable. In October 2017, both the cash and equity components of the compensation program were amended, effective immediately (the “October 2017 Amendments”).

Each of our independent directors receives periodic automatic grants of equity awards under a program implemented under the 2012 Plan. These grants are non‑discretionary. Only our independent directors or affiliates of such directors are eligible to receive automatic grants under the 2012 Plan. Under the program, each individual who first became a non-employee director will, on the date such individual joins the board of directors, automatically be granted a one‑time grant of RSUs covering a number of shares of our common stock calculated as $125,000 ($250,000 prior to the October 2017 Amendments) divided by our common stock closing share price on the date of grant as reported on The Nasdaq Global Select Market, rounded down to the nearest whole share (the “Initial RSUs”), plus a one‑time grant of RSUs covering a number of shares of our common stock calculated as $225,000 ($250,000 prior to the October 2017 Amendments) divided by our common stock closing share price on the date of grant as reported on The Nasdaq Global Select Market, which would be pro-rated for the number of whole months remaining until the anniversary of the prior year’s stockholders’ meeting, rounded down to the nearest whole share (the “Pro Rata RSUs”). The Initial RSUs vest in two equal annual installments, while Pro Rata RSUs vest in a single installment at the sooner of the next annual stockholder meeting or the one-year grant anniversary, in each case subject to the non-employee director’s continuous service through the applicable vesting date.

Annually, upon his or her re‑election to the board of directors at the Annual Meeting of Stockholders, each non-employee director is automatically granted an RSU covering a number of shares of our common stock calculated as $225,000 ($250,000 prior to the October 2017 Amendments) divided by our common stock closing share price on the date of grant as reported on The Nasdaq Global Select Market, rounded down to the nearest whole share. These RSUs will vest at the sooner of the next annual stockholder meeting or the one-year anniversary of grant, subject to the non-employee director’s continuous service through the applicable vesting date. Following the amendment to our non-employee director compensation program, both the annual RSUs and Initial RSUs described above remained unchanged with the exception that the number of shares of our common stock subject to each award has been reduced.

These RSUs will vest in full upon the director’s death, the occurrence of a change in control or, with respect to awards made after the October 2017 Amendments, the director’s disability before the director’s service terminates. Director RSUs carry dividend equivalent rights to be credited with an amount equal to all cash dividends paid on the underlying shares of common stock while unvested. Dividend equivalents are subject to the same terms and conditions, including vesting, as the RSUs to which they attach and are paid in cash upon vesting.

Stock‑Based Compensation Expense

Stock‑based compensation expense is included in the consolidated statements of income as follows:


	Year Ended December 31,
(In thousands)	2022		2021		2020
Selling, general and administrative	$	5,305	$	2,017	$	1,698
Research and development		2,042		—		—
Total	$	7,347	$	2,017	$	1,698

Stock‑based compensation expense included in the consolidated statements of income by award type is as follows:


	Year Ended December 31,
(In thousands)	2022		2021		2020
Stock options	$	3,057	$	490	$	242
RSUs		4,053		1,280		1,149
RSAs		194		200		273
ESPP		43		47		34
Total stock-based compensation expense	$	7,347	$	2,017	$	1,698

As of December 31, 2022, the unrecognized stock-based compensation cost and the estimated weighted-average amortization period were as follows:


(In thousands)	Unrecognized Compensation Cost		Weighted-Average Amortization Period (Years)
Stock options	$	3,550		2.9
RSUs		4,776		2.2
RSAs		388		2.6
Total unrecognized compensation expense	$	8,714

Compensation Awards

The following table summarizes equity award activity under the 2012 Plan and prior plans and related information:


(In thousands, except per share data)	Number of outstanding options			Weighted-Average Exercise Price of Outstanding Options		Number of outstanding RSUs			Weighted-Average Fair Value per Share at Grant		Number of outstanding RSAs			Weighted-Average Fair Value per Share at Grant
Balance as of December 31, 2021		766		$	20.79		116		$	12.82		29		$	13.35
Granted		492		$	14.92		676		$	11.06		15		$	16.67
Exercised		(15	)	$	17.11		—		$	—		—		$	—
Released RSUs and RSAs		—		$	—		(233	)	$	9.90		(14	)	$	13.51
Forfeited		(295	)	$	28.01		(41	)	$	8.80		—		$	—
Balance as of December 31, 2022		948		$	15.56		518		$	12.16		30		$	14.97
Vested and expected to vest as of December 31, 2022		948		$	15.56		518		$	12.16		—		$	—

As of December 31, 2022, the aggregate intrinsic value of options outstanding and options exercisable was not material. As of December 31, 2021, the aggregate intrinsic value of the options outstanding was $1.3 million and the aggregate intrinsic value of options exercisable was immaterial. As of December 31, 2022, 290 options were exercisable. The weighted average remaining contractual term of options outstanding was 8.01 years and 4.43 years as of December 31, 2022 and 2021, respectively.

The total intrinsic value of the options exercised was not material as of December 31, 2022. The total intrinsic value of the options exercised was $0.2 million and $0.1 million for the years ended December 31, 2021 and 2020, respectively. The total estimated fair value of options vested was $0.6 million for the year ended December 31, 2021. The total estimated fair value of options vested was not material for the year ended December 31, 2022 and 2020, respectively.

The total estimated fair value of RSUs vested was $2.3 million, $1.1 million and $1.3 million for the year December 31, 2022, 2021 and 2020.

The total estimated fair value of RSAs vested was not material for the year ended December 31, 2022, 2021, and 2020.

Valuation Assumptions

The weighted-average assumptions used in calculating the estimated value of our stock options on the date of grant as follows:


	Year Ended December 31,
	2022			2021			2020
Risk-free interest rate		3.6	%		1.1	%		0.4	%
Expected term (in years)		6.04			6.11			6.11
Volatility		38.6	%		44.9	%		46.9	%
Dividend yield		0.0	%		0.0	%		0.0	%
Weighted-average estimated fair value of stock options granted	$	6.43		$	5.84		$	6.28

NET INCOME PER SHARE

12 Months Ended

Dec. 31, 2022

Earnings Per Share [Abstract]

NET INCOME PER SHARE

2. NET INCOME PER SHARE

Basic net income per share attributable to Innoviva stockholders is computed by dividing net income attributable to Innoviva stockholders by the weighted-average number of shares of common stock outstanding. Diluted net income per share attributable to Innoviva stockholders is computed by dividing net income attributable to Innoviva stockholders by the weighted-average number of shares of common stock and dilutive potential common stock equivalents then outstanding. Dilutive potential common stock equivalents include the assumed exercise, vesting and issuance of employee stock awards using the treasury stock method, as well as common stock issuable upon assumed conversion of our convertible subordinated notes due 2023 (the “2023 Notes”), our convertible senior notes due 2025 (the “2025 Notes”), and our convertible senior notes due 2028 (the “2028 Notes”) using the if-converted method.

The 2025 Notes are convertible, based on the applicable conversion rate, into cash, shares of our common stock or a combination thereof, at our election. Our current intent is to settle the principal amount of the 2025 Notes in cash upon conversion. The impact of the assumed conversion premium to diluted net income per share was historically computed using the treasury stock method until the adoption of ASU 2020-06. As the average market price per share of our common stock as reported on The Nasdaq Global Select Market was lower than the initial conversion price of $17.26 per share, there was no dilutive effect of the assumed conversion premium for the years ended December 31, 2021 and 2020 respectively. The dilutive EPS of the notes was $0.31 per share using the if-converted method for the year ended December 31, 2022 as a result of the adoption of ASU 2020-06.

The following table shows the computation of basic and diluted net income per share for the years ended December 31, 2022, 2021 and 2020:


	Year Ended December 31,
(In thousands except per share data)	2022		2021		2020
Numerator:
Net income attributable to Innoviva stockholders, basic	$	213,921	$	265,854	$	224,402
Add: interest expense on 2023 Notes, net of tax effect		2,439		4,736		4,717
Add: interest expense on 2025 Notes, net of tax effect		4,583		—		—
Add: interest expense on 2028 Notes, net of tax effect		4,626		—		—
Net income attributable to Innoviva stockholders, diluted	$	225,569	$	270,590	$	229,119
Denominator:
Weighted-average shares used to compute basic net income per share attributable to Innoviva stockholders		69,644		82,062		101,320
Dilutive effect of 2023 Notes		6,188		12,189		12,189
Dilutive effect of 2025 Notes		11,150		—		—
Dilutive effect of 2028 Notes		8,158		—		—
Dilutive effect of options and awards granted under equity incentive plan and employee stock purchase plan		108		59		45
Weighted-average shares used to compute diluted net income per share attributable to Innoviva stockholders		95,248		94,310		113,554
Net income per share attributable to Innoviva stockholders
Basic	$	3.07	$	3.24	$	2.21
Diluted	$	2.37	$	2.87	$	2.02

Anti‑dilutive Securities

The following common stock equivalents were not included in the computation of diluted net income per share because their effect was anti‑dilutive:


	Year Ended December 31,
(In thousands)	2022		2021		2020
Outstanding options and awards granted under equity incentive plan and employee stock purchase plan		648		979		1,193
Outstanding stock warrant		282		—		—
Total		930		979		1,193

BALANCE SHEET COMPONENTS

12 Months Ended

Dec. 31, 2022

Balance Sheet Related Disclosures [Abstract]

BALANCE SHEET COMPONENTS

9. BALANCE SHEET COMPONENTS

Inventory

Inventory consisted of the following:


(In thousands)	December 31, 2022
Raw materials	$	5,757
Work-in-process		25,052
Finished goods		25,088
Total inventory	$	55,897

As of December 31, 2022, total inventory included net fair value adjustments resulting from the acquisition of La Jolla of approximately $49.5 million, which will be recognized as cost of products sold when sales occur in future periods. The fair value adjustments recorded as part of cost of products sold amounted to $10.0 million for the year ended December 31, 2022. There was no inventory as of December 31, 2021.

Other Accrued Liabilities

Other accrued liabilities consisted of the following:


	December 31,
(In thousands)	2022		2021
Accrued contract manufacturing expenses	$	8,382	$	—
Accrued clinical expenses		692		—
Accrued research expenses		349		—
Accrued professional services		3,977		894
Current portion of lease liabilities		1,316		106
Current portion of deferred royalty obligation		2,639		—
Accrued license fees and royalties		943		—
Other		2,909		9
Total other accrued liabilities	$	21,207	$	1,009

Other Long-Term Liabilities

Other long-term liabilities consisted of the following:


(In thousands)	December 31, 2022
Long-term portion of deferred royalty obligation	$	67,947
Long-term portion of lease liabilities		2,376
Contingent value rights liability		595
Total other long-term liabilities	$	70,918

There were no other long-term liabilities as of December 31, 2021.

CAPITALIZED FEES PAID - Schedule of Capitalized Fees Paid (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Capitalized Fees paid
Gross carrying value	$ 220,000	$ 220,000
Accumulated amortization	(122,393)	(108,570)
Net carrying value	$ 97,607	111,430
Weighted average remaining amortization period	7 years 1 month 6 days
Capitalized Fees paid, Future amortization
Estimated amortization for the year 2023	$ 13,800
Estimated amortization for the year 2024	13,800
Estimated amortization for the year 2025	13,800
Estimated amortization for the year 2026	13,800
Estimated amortization for the year 2027	13,800
Estimated amortization after 2027	28,600
Royalty revenue
Capitalized Fees paid
Amortization expense	13,823	13,823	$ 13,823
United States
Capitalized Fees paid
Gross carrying value	120,000	120,000
Europe
Capitalized Fees paid
Gross carrying value	60,000	60,000
Japan
Capitalized Fees paid
Gross carrying value	$ 40,000	$ 40,000

DEBT (Tables)

12 Months Ended

Dec. 31, 2022

Debt

Schedule of Debt

Our debt consists of:


	December 31,
(In thousands)	2022			2021
2023 Notes	$	96,204		$	240,984
2025 Notes		192,500			192,500
2028 Notes		261,000			—
Total debt		549,704			433,484
Less: Unamortized debt discount and issuance costs		(9,331	)		(38,831	)
Total debt, net		540,373			394,653
Less: Current portion of long-term debt, net		96,193			—
Total long-term debt, net	$	444,180		$	394,653

Aggregate Scheduled Maturities of Long-Term Debt

The aggregate scheduled maturities of our long-term debt as of December 31, 2022 are as follows:


(In thousands)	Amount
Year ending December 31,
2023	$	96,204
2024		—
2025		192,500
2026		—
2027		—
Thereafter		261,000
Total	$	549,704

2023 Notes

Debt

Summary of Liability and Equity Components of Convertible Notes

Our outstanding 2023 Notes balances consisted of the following:


	December 31,
(In thousands)	2022			2021
Principal	$	96,204		$	240,984
Debt issuance costs, net		(11	)		(620	)
Net carrying amount	$	96,193		$	240,364

Schedule of Components of Interest Expense

The following table sets forth total interest expense recognized related to the 2023 Notes for the years ended December 31, 2022, 2021 and 2020:


	Year Ended December 31,
(In thousands)	2022		2021		2020
Contractual interest expense	$	2,617	$	5,121	$	5,121
Amortization of debt issuance costs		302		580		567
Total interest and amortization expense	$	2,919	$	5,701	$	5,688

2025 Notes

Debt

Summary of Liability and Equity Components of Convertible Notes

Our outstanding 2025 Notes balances consisted of the following:


	December 31,
(In thousands)	2022			2021
Liability component
Principal	$	192,500		$	192,500
Debt discount and issuance costs, net		(1,917	)		(38,211	)
Net carrying amount	$	190,583		$	154,289
Equity component, net	$	—		$	65,361

Schedule of Components of Interest Expense

The following table sets forth total interest expense recognized related to the 2025 Notes for the years ended December 31, 2022, 2021 and 2020:


	Year Ended December 31,
(In thousands)	2022		2021		2020
Contractual interest expense	$	4,813	$	4,813	$	4,813
Amortization of debt issuance costs		692		657		601
Amortization of debt discount		—		7,898		7,230
Total interest and amortization expense	$	5,505	$	13,368	$	12,644

2028 Notes

Debt

Summary of Liability and Equity Components of Convertible Notes

Our outstanding 2028 Notes balance consisted of the following:


(In thousands)	December 31, 2022
Liability component
Principal	$	261,000
Debt discount and issuance costs, net		(7,403	)
Net carrying amount	$	253,597

Schedule of Components of Interest Expense

The following table sets forth total interest expense recognized related to the 2028 Notes from the issuance through December 31, 2022:


	Date of Issuance through
(In thousands)	December 31, 2022
Contractual interest expense	$	4,514
Amortization of debt issuance costs		1,061
Total interest and amortization expense	$	5,575

- Definition

Tabular disclosure of long-debt instruments or arrangements, including identification, terms, features, collateral requirements and other information necessary to a fair presentation. These are debt arrangements that originally required repayment more than twelve months after issuance or greater than the normal operating cycle of the entity, if longer.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02.22)
-URI https://asc.fasb.org/extlink&oid=120391452&loc=d3e13212-122682

Reference 2: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 3
-Subparagraph (SX 210.12-04(a))
-URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e24072-122690

Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 45
-Paragraph 1A
-URI https://asc.fasb.org/extlink&oid=124435984&loc=d3e28541-108399

Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 6
-URI https://asc.fasb.org/extlink&oid=126973232&loc=d3e21506-112644

Reference 5: http://www.xbrl.org/2003/role/exampleRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 55
-Paragraph 69B
-URI https://asc.fasb.org/extlink&oid=123466577&loc=SL123495735-112612

Reference 6: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 45
-Paragraph 2
-URI https://asc.fasb.org/extlink&oid=124435984&loc=d3e28551-108399

Reference 7: http://www.xbrl.org/2003/role/exampleRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 55
-Paragraph 69E
-URI https://asc.fasb.org/extlink&oid=123466577&loc=SL123495743-112612

Reference 8: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 7
-URI https://asc.fasb.org/extlink&oid=126973232&loc=d3e21521-112644

Reference 9: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 8
-URI https://asc.fasb.org/extlink&oid=126973232&loc=d3e21538-112644

Reference 10: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 470
-Section 50
-Paragraph 3
-URI https://asc.fasb.org/extlink&oid=123599511&loc=d3e64711-112823

Reference 11: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 55
-Paragraph 8
-URI https://asc.fasb.org/extlink&oid=114775985&loc=d3e28878-108400

Reference 12: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 3
-URI https://asc.fasb.org/extlink&oid=126973232&loc=d3e21475-112644

+ Details

COMMITMENTS AND CONTINGENCIES - Schedule of Future Minimum Lease Payments (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Commitments and Contingencies Disclosure [Abstract]
2023	$ 1,542
2024	1,269
2025	1,289
Total	4,100
Less: imputed interest	(408)
Total operating lease liabilities	$ 3,692	$ 106

INCOME TAXES - Deferred Taxes (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Deferred tax assets
Net operating loss carryforwards	$ 149,646	$ 64,813
Research and development tax credit carryforwards	21,230	53,467
Unrealized loss on investment, net	6,032	0
Deferred royalty obligation, net	17,404	0
Other	8,527	743
Total deferred tax assets before valuation allowance	202,839	119,023
Valuation allowance	(144,808)	(64,744)
Total deferred tax assets	58,031	54,279
Deferred tax liabilities
Depreciation and amortization	(50,587)	(9,158)
Unrealized Gain on Investment, net	0	(27,794)
Inventory fair value adjustment	(12,410)	0
Other	(805)	0
Net deferred tax assets		$ 17,327
Net deferred tax (liabilities)	$ (5,771)

INCOME TAXES - Reconciliation (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Differences between the expected U.S. federal statutory income tax to income tax expense
Expected tax at federal statutory rate	$ 58,928	$ 93,507	$ 74,392
State income tax, net of federal benefit	(1,414)	848	(26)
Federal and state research credits	(2,453)	1,260	0
Noncontrolling Interest	(7,468)	21,626	14,577
Impact of consolidation and deconsolidation of subsidiaries	(8,897)	0	0
Other	(125)	1,129	839
Change in valuation allowance	13,180	1,321	(197)
Income tax expense (benefit), net	$ 66,687	$ 76,439	$ 60,431

- Definition

Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.

+ References + Details

INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2022

Income Tax Disclosure [Abstract]

Schedule of components of the income tax expense

Income tax expense consists of the following:


	Year Ended December 31,
(In thousands)	2022			2021		2020
Current
Federal	$	40,822		$	—	$	—
State		464			7		11
Total current		41,286			7		11

Deferred
Federal		26,026			70,893		60,408
State		(625	)		5,539		12
Total deferred		25,401			76,432		60,420

Total income tax expense, net	$	66,687		$	76,439	$	60,431

Schedule of differences between expected U.S. federal statutory income tax to income tax expense

The impacts of the differences between the expected U.S. federal statutory income tax to our income tax expense are as follows:


	Year Ended December 31,
(In thousands)	2022			2021			2020
Expected tax at federal statutory rate	$	58,928		$	93,507		$	74,392
State income tax, net of federal benefit		(1,414	)		848			(26	)
Federal and state research credits		(2,453	)		1,260			—
Noncontrolling interest		7,468			(21,626	)		(14,577	)
Impact of consolidation and deconsolidation of subsidiaries		(8,897	)		—			—
Other		(125	)		1,129			839
Change in valuation allowance		13,180			1,321			(197	)
Income tax expense (benefit), net	$	66,687		$	76,439		$	60,431

Schedule of deferred tax assets and deferred tax liabilities

Significant components of our deferred tax assets and deferred tax liabilities are as follows:


	December 31,
(In thousands)	2022			2021
Deferred tax assets
Net operating loss carryforwards	$	149,646		$	64,813
Research and development tax credit carryforwards		21,230			53,467
Unrealized loss on investment, net		6,032			—
Deferred royalty obligation, net		17,404			—
Other		8,527			743
Total deferred tax assets before valuation allowance		202,839			119,023
Valuation allowance		(144,808	)		(64,744	)
Total deferred tax assets		58,031			54,279
Deferred tax liabilities
Depreciation and amortization		(50,587	)		(9,158	)
Unrealized gain on investment, net		—			(27,794	)
Inventory fair value adjustment		(12,410	)		—
Other		(805	)		—
Net deferred tax assets (liabilities)	$	(5,771	)	$	17,327

Summary of changes in unrecognized tax benefits

A reconciliation of the beginning and ending balances of the total amounts of unrecognized tax benefits are as follows:


(In thousands)	Amount
Unrecognized tax benefits as of December 31, 2019	$	15,342
Net decrease in tax portions for 2020		(157	)
Unrecognized tax benefits as of December 31, 2020		15,185
Net decrease in tax portions for 2021		(313	)
Unrecognized tax benefits as of December 31, 2021		14,872
Net increase in tax portions for 2022		1,452
Unrecognized tax benefits as of December 31, 2022	$	16,324

STOCKHOLDERS' EQUITY (Details) - Common Stock [Member] - USD ($)	2 Months Ended	12 Months Ended
	Feb. 24, 2023	Dec. 31, 2022	Oct. 31, 2022
Amount of shares repurchased			$ 100,000,000.0
Stock repurchased and retired during period, shares		647,394
Shares repurchased average price per share		$ 13.13
Stock repurchased and retired during period, value		$ 8,500,000
Subsequent Event
Amount of shares repurchased	$ 1,522,947
Shares repurchased average price per share	$ 12.63
Stock repurchased and retired during period, value	$ 19,200,000

DEBT - Schedule of Debt (Details) - USD ($) $ in Thousands	12 Months Ended
DEBT - Schedule of Debt (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Apr. 18, 2022	Mar. 07, 2022	Dec. 31, 2021
Debt
Total debt	$ 549,704			$ 433,484
Less: Unamortized debt discount and issuance costs	(9,331)			(38,831)
Total debt, net	540,373			394,653
Less: Current portion of long-term debt, net	96,193			0
Total long-term debt, net	$ 444,180			394,653
HealthCare Royalty Partners
Debt
Maximum potential royalty payout	14.00%
Increase in maximum potential payout percent	4.00%
Maximum aggregate royalty payments	$ 225,000
Required payment for breach of agreement, payment one	125,000
Payment for royalty agreement	12,700
2023 Notes \| Convertible subordinated notes
Debt
Total debt	96,204	$ 96,200	$ 96,200	240,984
Less: Unamortized debt discount and issuance costs	(11)		$ (200)	(620)
2025 Notes \| Convertible senior notes
Debt
Total debt	192,500			192,500
Less: Unamortized debt discount and issuance costs	(1,917)			(38,211)
2028 Notes \| Convertible senior notes
Debt
Total debt	261,000			$ 0
Less: Unamortized debt discount and issuance costs	(7,403)
Royalty Financing Agreement \| Loans Payable [Member] \| HealthCare Royalty Partners
Debt
Interest expense	1,800
Deferred royalty obligation and accrued interest	70,600
Royalty Payments	$ 1,000
Percentage of interest rate	7.34%
Royalty Financing Agreement \| Loans Payable [Member] \| HealthCare Royalty Partners \| Other Long Term Liabilities
Debt
Royalty Obligation Payable	$ 67,900
Royalty Financing Agreement \| Loans Payable [Member] \| HealthCare Royalty Partners \| Other Accrued Liabilities
Debt
Short term accrued interest	$ 2,700

CAPITALIZED FEES PAID (Tables)

12 Months Ended

Dec. 31, 2022

Capitalized Contract Cost [Abstract]

Schedule of Capitalized Fees Paid

Capitalized fees paid, which consist of registrational and launch-related milestone fees paid to GSK, were as follows:


		December 31,
(In thousands)	Amortization period	2022			2021
United States	2013-2030	$	120,000		$	120,000
Europe	2013-2029		60,000			60,000
Japan	2013-2029		40,000			40,000
Gross carrying value			220,000			220,000
Accumulated amortization			(122,393	)		(108,570	)
Net carrying value		$	97,607		$	111,430

COMMITMENTS AND CONTINGENCIES - Schedule of Components of Least Cost (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2022 USD ($)
Lease, Cost [Abstract]
Straight line operating lease costs	$ 1,585
Variable lease costs	155
Total lease costs	$ 1,740

EQUITY AND LONG-TERM INVESTMENTS AND FAIR VALUE MEASUREMENTS - Equity Investment in InCarda (Details)			3 Months Ended	12 Months Ended
	Jun. 15, 2022 USD ($) $ / shares shares	Mar. 09, 2022 USD ($)	Sep. 30, 2020 USD ($) shares	Dec. 31, 2022 USD ($) Director $ / shares	Dec. 31, 2021 USD ($)	Mar. 30, 2022
InCarda
Equity Investment
Number of Investee's Board members currently representing the Company \| Director				1
Number of the Investee's Board members \| Director				8
Equity investment ownership percentage				9.00%	13.00%
Unrealized loss from fair value changes in equity investments				$ 8,700,000	$ 700,000
InCarda Convertible Note
Equity Investment
Debt Instrument, annual interest rate						6.00%
Debt instrument principal amount percentage				100.00%
InCarda Convertible Note \| Qualified Financing
Equity Investment
Gross Proceeds from sale of equity		$ 10,000,000.0
Series C preferred stock and warrants \| InCarda
Equity Investment
Amount of securities purchase agreement			$ 15,800,000
Incarda 2020 Warrants [Member] \| InCarda
Equity Investment
Maximum number of additional shares into which warrants may be converted under the securities purchase agreement \| shares			5,117,358
Equity and long-term investments at fair value					400,000
Exercise price of warrants \| $ / shares				$ 0.7328
Extended expiration date				Mar. 31, 2023
Convertible note and warrants \| InCarda
Equity Investment
Amount of securities purchase agreement		$ 700,000
Common stock \| InCarda
Equity Investment
Debt Conversion, Converted Instrument, Shares Issued \| shares	4,093,886
Series A1 preferred stock \| InCarda
Equity Investment
Debt Conversion, Converted Instrument, Shares Issued \| shares	37,350
Series D 1 Preferred Stock \| InCarda
Equity Investment
Debt Conversion, Converted Instrument, Shares Issued \| shares	8,771,780
Series D 2 Preferred Stock \| InCarda
Equity Investment
Debt Conversion, Converted Instrument, Shares Issued \| shares	3,369,802
Series D1 Warrant \| InCarda
Equity Investment
Debt Conversion, Converted Instrument, Shares Issued \| shares	2,490,033
Exercise price of warrants \| $ / shares	$ 0.20
Series C preferred stock \| InCarda
Equity Investment
Number of shares to be purchased under the securities purchase agreement \| shares			20,469,432
Debt Conversion, Converted Instrument, Shares Issued \| shares	5,117,358
Transaction cost			$ 800,000
Equity and long-term investments at fair value				$ 6,800,000	15,800,000
Impairment of equity investments				9,000,000.0	$ 0
Exercise price of warrants \| $ / shares	$ 0.73
Series C Warrants and Series D Warrants \| InCarda
Equity Investment
Equity and long-term investments at fair value				600,000
Series D Preferred Stock \| InCarda
Equity Investment
Payments to acquire equity securities	$ 2,300,000
Series D 1 And D 2 Preferred Stock And Common Stock \| InCarda
Equity Investment
Equity and long-term investments at fair value				$ 3,200,000
Significant Unobservable Inputs, Level 3 \| Backsolve Valuation \| InCarda
Equity Investment
Expected Holding Period				2 years
Risk Free Interest Rate				3.20%
Dividend Yield				0.00%
Estimated volatility				122.00%

LICENSE AND COLLABORATION ARRANGEMENTS

12 Months Ended

Dec. 31, 2022

Organization, Consolidation and Presentation of Financial Statements [Abstract]

LICENSE AND COLLABORATION ARRANGEMENTS

4. LICENSE AND COLLABORATION ARRANGEMENTS

Out-License Agreements

Zai Lab

Entasis entered into a license and collaboration agreement with Zai Lab (Shanghai) Co., Ltd. (“Zai Lab”), pursuant to which Zai Lab licensed exclusive rights to durlobactam and SUL-DUR, in the Asia-Pacific region (“the Zai Agreement”). Under the terms of the Zai Agreement, Zai Lab will fund most of the registrational clinical trial costs in China for SUL-DUR, with the exception of Phase 3 patient drug supply of licensed products. Zai Lab will conduct development activities and plan and obtain regulatory approval in a specified number of countries in the Asia-Pacific region beyond China after receipt of regulatory approval of a licensed product in China. Zai Lab is also solely responsible for commercializing licensed products in the Asia-Pacific region and will commercialize licensed products for which it has obtained regulatory approval. We are obligated to supply Zai Lab with the licensed products for clinical development and, if the licensed product is approved, for commercial use for a certain period unless Zai Lab notifies otherwise. Zai Lab may take over manufacturing responsibilities for its own commercialization activities within a specified time period following the effective date of the Zai Agreement.

We are eligible to receive up to an aggregate of $91.0 million in research and development support payments and development, regulatory and sales milestone payments related to SUL-DUR, imipenem and other combinations with the licensed products. Zai Lab will pay us a tiered royalty equal to from a high-single digit to low-double digit percentage based on annual net sales of licensed products in the territory, subject to specified reductions for the market entry of competing products, loss of patent coverage of licensed products and for payments owed to third parties for additional rights necessary to commercialize licensed products in the territory. No revenue was recognized under the Zai Agreement from the acquisition date of Entasis. Payments received for research support and reimbursable clinical trial costs are recorded as a reduction to research and development expense during the period in which the qualifying expenses are incurred. Such amounts recorded from the date of acquisition of Entasis to December 31, 2022 are not material.

GARDP

Entasis entered into a collaboration agreement with the Global Antibiotic Research and Development Partnership (“GARDP”) for the development, manufacture and commercialization of the product candidate zoliflodacin in certain countries (“the GARDP Collaboration Agreement”). Under the terms of the GARDP Collaboration Agreement, GARDP will use commercially reasonable endeavors to perform and fully fund the Phase 3 registrational trial, including the manufacture and supply of the product candidate containing zoliflodacin, in uncomplicated gonorrhea. We recorded reimbursements from GARDP under this agreement as reduction to research and development expense. Relevant amounts from the date of acquisition of Entasis to December 31, 2022 are not material.

In addition, under the GARDP Collaboration Agreement, GARDP was granted a worldwide, fully paid, exclusive and royalty-free license, with the right to sublicense, to use our zoliflodacin technology in connection with GARDP’s development, manufacture and commercialization of zoliflodacin in low-income and specified middle-income countries. We retained commercial rights in all other countries worldwide, including the major markets in North America, Europe and Asia-Pacific. We also retained the right to use and grant licenses to our zoliflodacin technology to perform our obligations under the GARDP Collaboration Agreement and for any purpose other than gonorrhea or community-acquired indications. If we believe that the results of the Phase 3 registrational trial of zoliflodacin would be supportive of an application for marketing approval, we are obligated to use our best efforts to file an application for marketing approval with the FDA within six months of the completion of the trial and to use commercially reasonable endeavors to file an application for marketing approval with the European Medicines Agency (“EMA”). Each party is responsible for using commercially reasonable efforts to obtain marketing authorizations for the product candidate in their respective territories.

PAION AG

Pursuant to the PAION AG (“PAION”) License, La Jolla granted PAION an exclusive license to commercialize GIAPREZA® and XERAVA® in the European Economic Area, the United Kingdom and Switzerland (collectively, the “PAION Territory”). We are entitled to receive potential commercial milestone payments of up to $109.5 million and double-digit tiered royalty payments. Royalties payable in a given jurisdiction under the PAION License will be subject to reduction on account of generic competition and after patent expiration in that jurisdiction. Pursuant to the PAION License, PAION will be solely responsible for the future development and commercialization of GIAPREZA® and XERAVA® in the PAION Territory. PAION is required to use commercially reasonable efforts to commercialize GIAPREZA® and XERAVA® in the PAION Territory. We have not recognized any revenue from PAION related to commercial milestones from the date of acquisition of La Jolla to December 31, 2022. Royalty revenue recognized under this agreement from the date of acquisition of La Jolla to December 31, 2022 was not material.

La Jolla also entered into the PAION commercial supply agreement (the “PAION Supply Agreement”) whereby La Jolla will supply PAION a minimum quantity of GIAPREZA® and XERAVA® through July 13, 2024. The PAION supply agreement will automatically renew until the earlier of July 13, 2027, or until a new supply agreement is executed. During the initial term of the supply agreement, we will be reimbursed for direct and certain indirect manufacturing costs at cost. Amounts recognized under this agreement from the date of acquisition of La Jolla to December 31, 2022 were not material.

Everest Medicines Limited

Pursuant to the Everest Medicines Limited (“Everest”) License, La Jolla granted Everest an exclusive license to develop and commercialize XERAVA® for the treatment of complicated intra-abdominal infections (“cIAI”) and other indications in mainland China, Taiwan, Hong Kong, Macau, South Korea, Singapore, the Malaysian Federation, the Kingdom of Thailand, the Republic of Indonesia, the Socialist Republic of Vietnam and the Republic of the Philippines (collectively, the “Everest Territory”). We are eligible to receive an additional $8.0 million regulatory milestone payment and up to an aggregate of $20.0 million in sales milestone payments. We are also entitled to receive tiered royalties from Everest at percentages in the low double digits on sales, if any, in the Everest Territory of products containing eravacycline. Royalties are payable with respect to each jurisdiction in the Everest Territory until the latest to occur of: (i) the last-to-expire of specified patent rights in such jurisdiction in the Everest Territory; (ii) expiration of marketing or regulatory exclusivity in such jurisdiction in the Everest Territory; or (iii) 10 years after the first commercial sale of a product in such jurisdiction in the Everest Territory. We have not recognized any revenue from Everest related to regulatory and sales milestones from the date of acquisition of La Jolla to December 31, 2022. Royalty revenue recognized under this agreement from the date of acquisition of La Jolla to December 31, 2022 was not material.

A new drug application (“NDA”) was submitted with the China National Medical Products Administration (“NMPA”) for XERAVA® for the treatment of cIAI in patients in China in 2021. XERAVA® was approved in Singapore by the Health Science Authority in 2020.

La Jolla also entered into the Everest commercial supply agreement (the “Everest Supply Agreement”) whereby La Jolla will supply Everest a minimum quantity of XERAVA® through December 31, 2023 and will transfer to Everest certain XERAVA®-related manufacturing know-how. We will be reimbursed for direct and certain indirect manufacturing costs at 110% of cost through December 31, 2023. We initially recognized a $2.8 million partial prepayment for XERAVA® as deferred revenue, of which, $0.8 million was recognized as revenue for the year ended December 31, 2022.

In-License Agreements

George Washington University

Pursuant to the George Washington University (“GW”) License, GW exclusively licensed to La Jolla certain intellectual property rights relating to GIAPREZA®, including the exclusive rights to certain issued patents and patent applications covering GIAPREZA®. Under the GW License, we are obligated to use commercially reasonable efforts to develop, commercialize, market and sell GIAPREZA®. We are obligated to pay a 6% royalty on net sales of GIAPREZA® and 15% on payments received from sublicensees. The obligation to pay royalties under this agreement extends through the last-to-expire patent covering GIAPREZA®. From the date of acquisition of La Jolla to December 31, 2022, the amounts recognized under this agreement were not material.

Harvard University

Pursuant to the Harvard University (“Harvard”) License, Harvard exclusively licensed to La Jolla certain intellectual property rights relating to tetracycline-based products, including XERAVA®, including the exclusive rights to certain issued patents and patent applications covering such products. Under the Harvard License, we are obligated to use commercially reasonable efforts to develop, commercialize, market and sell tetracycline-based products, including XERAVA®. For each product covered by the Harvard License, we are obligated to make certain payments for the following: (i) up to approximately $15.1 million upon the achievement of certain clinical development and regulatory milestones; (ii) a 5% royalty on direct U.S. net sales of XERAVA®; (iii) a single-digit tiered royalty on direct ex-U.S. net sales of XERAVA®, starting at a minimum royalty rate of 4.5%, with step-ups to a maximum royalty of 7.5% based on the achievement of annual net product sales thresholds; and (iv) 20% on payments received from sublicensees. The obligation to pay royalties under this agreement extends through the last-to-expire patent covering tetracycline-based products, including XERAVA®. From the date of acquisition of La Jolla to December 31, 2022, amounts recognized under this agreement were not material.

Paratek Pharmaceuticals, Inc.

Pursuant to the Paratek Pharmaceuticals, Inc. (“Paratek”) License, Paratek non-exclusively licensed to La Jolla certain intellectual property rights relating to XERAVA®, including non-exclusive rights to certain issued patents and patent applications covering XERAVA®. We are obligated to pay Paratek a 2.25% royalty based on direct U.S. net sales of XERAVA®. Our obligation to pay royalties with respect to the licensed product is retroactive to the date of the first commercial sale of XERAVA® and shall continue until there are no longer any valid claims of the Paratek patents, which will expire in October 2023. From the date of acquisition of La Jolla to December 31, 2022, amounts recognized under this agreement were not material.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) shares in Thousands	Total	Cumulative effect period of adoption adjustment member	Common stock	Common stock Cumulative effect period of adoption adjustment member	Additional Paid-In Capital	Additional Paid-In Capital Cumulative effect period of adoption adjustment member	Accumulated Other Comprehensive Income (Loss)	Accumulated Other Comprehensive Income (Loss) Cumulative effect period of adoption adjustment member	Accumulated Deficit	Accumulated Deficit Cumulative effect period of adoption adjustment member	Treasury Stock	Treasury Stock Cumulative effect period of adoption adjustment member	Noncontrolling Interest	Noncontrolling Interest Cumulative effect period of adoption adjustment member
Balance at Dec. 31, 2019	$ 342,116,000		$ 1,013,000		$ 1,258,859,000		$ 27,000		$ (946,404,000)		$ 0		$ 28,621,000
Balance (in shares) at Dec. 31, 2019			101,288
Increase (Decrease) in Stockholders' Equity
Distributions to noncontrolling interests	(30,474,000)		$ 0		0		0		0		0		(30,474,000)
Equity activity of noncontrolling interest in a consolidated variable interest entity	366,000		0		0		0		0		0		366,000
Exercise of stock options, and issuance of common stock units and stock awards, net of repurchase of shares to satisfy tax withholding	1,109,000		$ 2,000		1,107,000		0		0		0		0
Exercise of stock options, and issuance of common stock units and stock awards, net of repurchase of shares to satisfy tax withholding (in shares)			179
Stock-based compensation	1,698,000		$ 0		1,698,000		0		0		0		0
Net income	293,814,000		0		0		0		224,402,000		0		69,412,000
Other comprehensive income	(27,000)		0		0		(27,000)		0		0		0
Balance at Dec. 31, 2020	607,837,000		$ 1,014,000		1,260,900,000		0		(722,002,000)		$ 0		67,925,000
Balance (in shares) at Dec. 31, 2020			101,392								0
Increase (Decrease) in Stockholders' Equity
Distributions to noncontrolling interests	(59,457,000)		$ 0		0		0		0		$ 0		(59,457,000)
Equity activity of noncontrolling interest in a consolidated variable interest entity	(259,000)		0		0		0		0		0		(259,000)
Exercise of stock options, and issuance of common stock units and stock awards, net of repurchase of shares to satisfy tax withholding	344,000		$ 1,000		343,000		0		0		0		0
Exercise of stock options, and issuance of common stock units and stock awards, net of repurchase of shares to satisfy tax withholding (in shares)			104
Repurchase of common stock	(394,149,000)		$ (320,000)		0		0		0		$ (393,829,000)		0
Repurchase of common stock (in shares)			(32,005)								32,005
Stock-based compensation	2,017,000		$ 0		2,017,000		0		0		$ 0		0
Net income	368,837,000		0		0		0		265,854,000		0		102,983,000
Balance at Dec. 31, 2021	$ 525,935,000	$ 28,229,000	$ 696,000		1,264,024,000	$ 65,467,000	0	$ 0	(456,148,000)	$ 37,238,000	$ (393,829,000)		111,192,000
Balance (in shares) at Dec. 31, 2021	69,566		69,566								32,005
Increase (Decrease) in Stockholders' Equity
Accounting Standards Update [Extensible Enumeration]		Accounting Standards Update 2020-06 [Member]		Accounting Standards Update 2020-06 [Member]		Accounting Standards Update 2020-06 [Member]		Accounting Standards Update 2020-06 [Member]		Accounting Standards Update 2020-06 [Member]		Accounting Standards Update 2020-06 [Member]		Accounting Standards Update 2020-06 [Member]
Distributions to noncontrolling interests	$ (69,811,000)										$ 0		(69,811,000)
Recognition of noncontrolling interest upon initial consolidation of Entasis	38,471,000												38,471,000
Equity activity of noncontrolling interest in a consolidated variable interest entity	(2,000)										0		(2,000)
Derecognition of noncontrolling interests upon sale of TRC	(61,226,000)		$ 0		0		0		78,000		0		(61,304,000)
Derecognition of noncontrolling interests upon acquisition of Entasis noncontrolling interest	(42,162,000)		0		(14,153,000)		0		0		0		(28,009,000)
Exercise of stock options, and issuance of common stock units and stock awards, net of repurchase of shares to satisfy tax withholding	288,000		2,000		286,000		0		0		0		0
Capped call options associated with convertible senior notes due 2028	16,585,000		0		(16,585,000)		0		0		0		0
Conversion of convertible subordinated notes due 2023	3,000		$ 0		3,000		0		0		0		0
Exercise of stock options, and issuance of common stock units and stock awards, net of repurchase of shares to satisfy tax withholding (in shares)			269
Repurchase of common stock	(8,503,000)		$ (6,000)		8,497,000
Repurchase of common stock (in shares)			(647)
Stock-based compensation	7,347,000		$ 0		4,225,000		0		0		0		3,122,000
Net income	220,262,000		0		0		0		213,921,000		0		6,341,000
Balance at Dec. 31, 2022	$ 565,788,000		$ 692,000		$ 1,163,836,000		$ 0		$ (204,911,000)		$ (393,829,000)		$ 0
Balance (in shares) at Dec. 31, 2022	69,188		69,188								32,005

DESCRIPTION OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Property and Equipment (Details)	12 Months Ended
	Dec. 31, 2022
Laboratory equipment furniture and fixtures \| Minimum
Property, Plant and Equipment [Abstract]
Estimated useful life	5 years
Laboratory equipment furniture and fixtures \| Maximum
Property, Plant and Equipment [Abstract]
Estimated useful life	7 years
Software and computer equipment
Property, Plant and Equipment [Abstract]
Estimated useful life	3 years

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares shares in Thousands	Dec. 31, 2022	Dec. 31, 2021
Statement of Financial Position [Abstract]
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized	230	230
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized	200,000	200,000
Common stock, shares issued	69,188	69,566
Common stock, shares outstanding	69,188	69,566
Treasury stock, shares	32,005	32,005

INCOME TAXES

12 Months Ended

Dec. 31, 2022

Income Tax Disclosure [Abstract]

INCOME TAXES

14. INCOME TAXES

Income tax expense consists of the following:


	Year Ended December 31,
(In thousands)	2022			2021		2020
Current
Federal	$	40,822		$	—	$	—
State		464			7		11
Total current		41,286			7		11

Deferred
Federal		26,026			70,893		60,408
State		(625	)		5,539		12
Total deferred		25,401			76,432		60,420

Total income tax expense, net	$	66,687		$	76,439	$	60,431

The impacts of the differences between the expected U.S. federal statutory income tax to our income tax expense are as follows:


	Year Ended December 31,
(In thousands)	2022			2021			2020
Expected tax at federal statutory rate	$	58,928		$	93,507		$	74,392
State income tax, net of federal benefit		(1,414	)		848			(26	)
Federal and state research credits		(2,453	)		1,260			—
Noncontrolling interest		7,468			(21,626	)		(14,577	)
Impact of consolidation and deconsolidation of subsidiaries		(8,897	)		—			—
Other		(125	)		1,129			839
Change in valuation allowance		13,180			1,321			(197	)
Income tax expense (benefit), net	$	66,687		$	76,439		$	60,431

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of our deferred tax assets and deferred tax liabilities are as follows:


	December 31,
(In thousands)	2022			2021
Deferred tax assets
Net operating loss carryforwards	$	149,646		$	64,813
Research and development tax credit carryforwards		21,230			53,467
Unrealized loss on investment, net		6,032			—
Deferred royalty obligation, net		17,404			—
Other		8,527			743
Total deferred tax assets before valuation allowance		202,839			119,023
Valuation allowance		(144,808	)		(64,744	)
Total deferred tax assets		58,031			54,279
Deferred tax liabilities
Depreciation and amortization		(50,587	)		(9,158	)
Unrealized gain on investment, net		—			(27,794	)
Inventory fair value adjustment		(12,410	)		—
Other		(805	)		—
Net deferred tax assets (liabilities)	$	(5,771	)	$	17,327

We record deferred tax assets if the realization of such assets is more likely than not to occur. Significant management judgment is required in determining whether a valuation allowance against the deferred tax assets is required. We have considered all available evidence, both positive and negative, such as our historical operating results and predictability of future taxable income, in making such determination. We are also required to exercise significant management’s judgment in forecasting future taxable income. Specifically, we evaluate the following criteria when considering a valuation allowance:

•

the history of tax net operating losses in recent years;

•

predictability of operating results;

•

profitability for a sustained period of time; and

•

level of profitability on a quarterly basis.

As of December 31, 2022, we had federal net operating loss carryforwards of approximately $411.5 million, which will expire beginning 2032. As of December 31, 2022, we also had state net operating loss carryforwards of approximately $955.3 million, which will expire beginning 2029 and state research tax credits of approximately $33.3 million, which do not expire.

Utilization of net operating loss and tax credit carryforwards may be subject to a substantial annual limitation due to ownership change limitations provided by the Internal Revenue Code and similar state provisions. Annual limitations may result in expiration of net operating loss and tax credit carryforwards before some or all of such amounts have been utilized.

We conducted an Internal Revenue Code of 1986, as amended, Section 382 (“Section 382”) analysis of the Company through December 31, 2022 to determine whether an ownership change had occurred since inception. The Section 382 study concluded that it is more likely than not that the Company did not experience an ownership change during the testing period. However, notwithstanding the applicable annual limitations, no portion of our net operating loss or credit carryforwards is expected to expire before becoming available to reduce federal and state income tax liabilities as a result of those identified ownership changes. If we undergo another ownership change, the utilization of the pre-ownership change net operating loss carryforwards or pre-ownership change tax attributes, such as research tax credits, to offset the post-ownership change income may be subject to an annual limitation, pursuant to Sections 382 and 383 of the Internal Revenue Code of 1986, as amended. Similar rules may apply under state tax laws.

As a result of the acquisition of Entasis, we conducted a study of Entasis’ ownership changes and estimated that we will be able to utilize $157.4 million of its federal net operating losses, which are subject to annual limitations.

As a result of the acquisition of La Jolla, we also performed a preliminary analysis of its ownership changes and estimated that we will be able to utilize $254.0 million of its federal net operating losses, which are subject to annual limitations.

Our policy is to recognize interest and/or penalties related to income tax matters in income tax expense. As of December 31, 2022 and 2021, we had no accrued interest or penalties due to the Company's net operating losses available to offset any tax adjustments.

Uncertain Tax Positions

A reconciliation of the beginning and ending balances of the total amounts of unrecognized tax benefits are as follows:


(In thousands)	Amount
Unrecognized tax benefits as of December 31, 2019	$	15,342
Net decrease in tax portions for 2020		(157	)
Unrecognized tax benefits as of December 31, 2020		15,185
Net decrease in tax portions for 2021		(313	)
Unrecognized tax benefits as of December 31, 2021		14,872
Net increase in tax portions for 2022		1,452
Unrecognized tax benefits as of December 31, 2022	$	16,324

We are subject to taxation in the U.S. and various state jurisdictions. The tax years 2004 through 2013, 2015 and forward remain open to examination by the federal and most state tax authorities due to net operating loss and overall credit carryforward positions.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 21
-URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SAB Topic 11.C)
-URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 17
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SAB TOPIC 6.I.5.Q1)
-URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 14
-URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 270
-Section 50
-Paragraph 1
-URI https://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-URI https://asc.fasb.org/topic&trid=2144680

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 30
-Section 50
-Paragraph 2
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(h)(2))
-URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

+ Details

NET INCOME PER SHARE - Anti-Dilutive Securities (Details) - shares shares in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Anti-Dilutive Securities
Anti-dilutive securities (in shares)	930	979	1,193
Equity incentive plans and ESPP
Anti-Dilutive Securities
Anti-dilutive securities (in shares)	648	979	1,193
Outstanding Stock Warrant
Anti-Dilutive Securities
Anti-dilutive securities (in shares)	282	0	0

DESCRIPTION OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

12 Months Ended

Dec. 31, 2022

Organization, Consolidation and Presentation of Financial Statements [Abstract]

DESCRIPTION OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

1. DESCRIPTION OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Description of Operations

Innoviva, Inc. (referred to as “Innoviva”, the “Company”, or “we” and other similar pronouns) is a company with a portfolio of royalties and innovative healthcare assets. Our royalty portfolio contains 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”), and up until July 2022, TRELEGY® ELLIPTA® (the combination FF/UMEC/VI). We sold our 15% ownership interest in Theravance Respiratory Company, LLC (“TRC”) on July 20, 2022, and are no longer entitled to receive royalties on sales of TRELEGY® ELLIPTA® products. Under the Long-Acting Beta2 Agonist (“LABA”) Collaboration Agreement, Innoviva is entitled to receive royalties from GSK on sales of RELVAR®/BREO® ELLIPTA® as follows: 15% on the first $3.0 billion of annual global net sales and 5% for all annual global net sales above $3.0 billion; and royalties from the sales of ANORO® ELLIPTA®, which tier upward at a range from 6.5% to 10%.

We expanded our portfolio of royalties and innovative healthcare assets through the acquisition of Entasis Therapeutics Holdings Inc. (“Entasis”) on July 11, 2022 and the acquisition of La Jolla Pharmaceutical Company (“La Jolla”) on August 22, 2022. Our commercial and marketed products include 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. Our development pipeline includes medicines for the treatment of bacterial infections, such as our lead asset sulbactam-durlobactam (“SUL-DUR”). As such, we have a wholly owned robust infectious disease and hospital operating platform, as well as other assets in these areas, such as a large equity stake in Armata Pharmaceuticals, a leader in bacteriophage development with potential use across a range of infectious and other serious diseases. We also have economic interests in other healthcare companies.

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of Innoviva, our wholly owned subsidiaries and certain variable interest entities (“VIE”) for which we are the primary beneficiary. All intercompany balances and transactions have been eliminated in consolidation. For consolidated entities where we own or are exposed to less than 100% of the economics, we record net income (loss) attributable to noncontrolling interest in our consolidated statements of income equal to the percentage of the economic or ownership interest retained in such entity by the respective noncontrolling party.

Presentation Reclassification

Certain amounts in prepaid expenses and other current assets, other assets and changes in fair values of equity and long-term investments, net, reported in the Company's prior year financial statements have been reclassified to conform to the current year presentation. These reclassifications had no net effect on the net income or net cash flows as previously reported.

Factors Affecting Comparability

Our historical financial condition and results of operations for the periods presented may not be comparable, either between periods or going forward due to the factors below and as discussed in Note 5, “Consolidated Entities and Acquisitions”.

•

Adoption of Accounting Standards Update (“ASU”) 2020-06 effective January 1, 2022;

•

Accounting consolidation of Entasis on February 17, 2022 and purchase of remaining noncontrolling interest in Entasis on July 11, 2022;

•

Sale of our 15% ownership interest in TRC on July 20, 2022; and

•

Acquisition of La Jolla on August 22, 2022.

Use of Management’s Estimates

The preparation of consolidated financial statements in conformity with U.S. Generally Accepted Accounting Principles (“U.S. GAAP”) requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ materially from those estimates. Management evaluates its significant accounting policies and estimates on an ongoing basis. We base our estimates on historical experience and other relevant assumptions that we believe to be reasonable under the circumstances. These estimates also form the basis for making judgments about the carrying values of assets and liabilities when these values are not readily apparent from other sources.

Concentrations of Credit Risk and of Significant Suppliers and Partners

Our financial instruments that are exposed to concentrations of credit risk consist primarily of cash and cash equivalents and equity and long-term investments. Although we deposit our cash with multiple financial institutions, our deposits, at times, may exceed federally insured limits.

We are dependent on third-party manufacturers to supply active pharmaceutical ingredients (“API”) and drug products for research and development and commercial programs. These programs could be adversely affected by significant interruption in the supply of API or drug products.

Currently, we derive most of our revenues from GSK and our near-term success depends in large part on GSK’s ability to successfully develop and commercialize the products in the respiratory programs partnered with GSK. Our near-term success depends in large part upon the performance by GSK of its commercial obligations under the GSK Agreements and the commercial success of RELVAR®/BREO® ELLIPTA® and ANORO® ELLIPTA®. If GSK does not devote sufficient resources to the commercialization or development of these products, is unsuccessful in its efforts, or chooses to reprioritize its commercial programs, our business would be materially harmed. GSK is responsible for all clinical and other product development, regulatory, manufacturing and commercialization activities for products developed under the GSK Agreements, including RELVAR®/BREO® ELLIPTA® and ANORO® ELLIPTA®. Our royalty revenues may fluctuate due to a variety of factors, many of which are outside of our control. Our royalty revenues under the GSK Agreements may not meet our, analysts’ or investors’ expectations, due to a number of important factors.

We also started recognizing revenue from product sales as a result of our acquisition of La Jolla Hospitals and other healthcare organizations generally purchase our products through a network of specialty distributors. These specialty distributors, which are located in the U.S., are considered our customers for accounting purposes. We do not believe that loss of one of these distributors would significantly impact our ability to distribute our products, as we expect that sales volume would be absorbed by new or remaining distributors. Three of our customers each account for 33%, 29% and 28%, respectively, of our net product sales from the time of our acquisition of La Jolla through December 31, 2022. These same customers account for 23%, 37% and 37%, respectively, of our receivables from net product sales, which are included in “Accounts receivables, net” on our consolidated balance sheet as of December 31, 2022.

Segment Reporting

We operate in a single segment, which is to provide capital return to stockholders by maximizing the potential value of our portfolio of royalties and innovative healthcare assets. Our Chief Operating Decision Maker (“CODM”) is our Chief Executive Officer. The CODM allocates resources and evaluates the performance of Innoviva at the consolidated level using information about our revenues, operating results and other key financial data as needed. Our revenues are generated primarily from our collaborative arrangements and royalty payments from GSK, located in Great Britain. We also generate revenue from net sales of GIAPREZA® and XERAVA®. Refer to Note 3, “Revenue Recognition”, for more information on our revenues for the periods presented. Our long-term assets are located within the United States.

Variable Interest Entities

The primary beneficiary of a variable interest entity (“VIE’) is required to consolidate the assets and liabilities of the VIE. When we obtain a variable interest in another entity, we assess at the inception of the relationship and upon occurrence of certain significant events whether the entity is a VIE and, if so, whether we are the primary beneficiary of the VIE based on our power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and our obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE.

To assess whether we have the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance, we consider all the facts and circumstances, including our role in establishing the VIE and our ongoing rights and responsibilities. This assessment includes identifying the activities that most significantly impact the VIE’s economic performance and identifying which party, if any, has power over those activities. In general, the parties that make the most significant decisions

affecting the VIE (management and representation on the Board of Directors) and have the right to unilaterally remove those decision-makers are deemed to have the power to direct the activities of a VIE.

To assess whether we have the obligation to absorb losses of the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE, we consider all of our economic interests that are deemed to be variable interests in the VIE. This assessment requires us to apply judgment in determining whether these interests, in the aggregate, are considered potentially significant to the VIE.

Business Combination

When we acquire an entity in a business combination, we recognize the fair value of all assets acquired, liabilities assumed, and any non-controlling interest in the acquiree and establish the acquisition date as the fair value measurement point. We recognize and measure goodwill as of the acquisition date, as the excess of the fair value of the consideration paid over the fair value of the identified net assets acquired. Acquisition-related expenses and related restructuring costs are expensed as incurred.

Several valuation methods may be used to determine the fair value of assets acquired and liabilities assumed. For intangible assets, we typically use the income method. This method starts with a forecast of all of the expected future net cash flows for each asset. These cash flows are then adjusted to present value by applying an appropriate discount rate that reflects the risk factors associated with the cash flow streams. Some of the more significant estimates and assumptions inherent in the income method or other methods include the amount and timing of projected future cash flows, the discount rate selected to measure the risks inherent in the future cash flows and the assessment of the asset’s life cycle and the competitive trends impacting the asset, including consideration of any technical, legal, regulatory, or economic barriers to entry. Determining the useful life of an intangible asset also requires judgment as different types of intangible assets will have different useful lives and certain assets may even be considered to have indefinite useful lives.

Cash and Cash Equivalents

We consider all highly liquid investments purchased with a maturity of three months or less on the date of purchase to be cash equivalents. Cash equivalents are carried at cost, which approximates fair value.

Investments in Marketable Securities

We invest in short-term investments and marketable securities, primarily corporate notes, government securities, government agencies, and government commercial papers. We limit the amount of credit exposure with any one issuer, industry or geographic area for investments other than instruments backed by the U.S. federal government. We classify our marketable securities as available-for-sale securities and report them at fair value in cash equivalents or short-term marketable securities on the consolidated balance sheets with related unrealized gains and losses included as a component of stockholders’ equity. The amortized cost of debt securities is adjusted for amortization of premiums and accretion of discounts to maturity, which is included in interest income on the consolidated statements of operations. Realized gains and losses, if any, on available-for-sale securities are included in interest income. The cost of securities sold is based on the specific identification method. Interest and dividends on securities classified as available-for-sale are included in interest and dividend income.

We regularly review all of our investments for other-than-temporary declines in estimated fair value. Our review includes the consideration of the cause of the impairment, including the creditworthiness of the security issuers, the number of securities in an unrealized loss position, the severity and duration of the unrealized losses, whether we have the intent to sell the securities and whether it is more likely than not that we will be required to sell the securities before the recovery of their amortized cost basis. When we determine that the decline in estimated fair value of an investment is below the amortized cost basis and the decline is other-than-temporary, we reduce the carrying value of the security and record a loss for the amount of such decline to other expense, net.

Accounts Receivable

Accounts receivable are recorded net of estimates for prompt-pay discounts, chargebacks, returns and rebates. Allowances for prompt-pay discounts and chargebacks are based on contractual terms. We estimate the allowance for credit losses based on existing contractual payment terms, actual payment patterns of customers and individual customer circumstances.

Inventory

Inventory is stated at the lower of cost or estimated net realizable value on a first in, first out basis. We periodically analyze inventory levels and write down inventory as cost of products sold when the following occurs: inventory has become obsolete, inventory has a cost basis in excess of its estimated net realizable value, or inventory quantities are in excess of expected product sales.

Property and Equipment

Property and equipment, which consisted of laboratory equipment, computer equipment, software, office furniture and fixtures, and leasehold improvements, were not material as of December 31, 2022 and 2021, respectively.

Property and equipment are stated at cost less accumulated depreciation. Property and equipment are depreciated using the straight-line method as follows:


Leasehold improvements		Shorter of remaining lease terms or useful life
Laboratory equipment, furniture and fixtures		5 - 7 years
Software and computer equipment		3 years

Equity and Long-Term Investments

We invest from time to time in equity and debt securities of private or public companies. If we determine that we have control over these companies under either voting or VIE models, we consolidate them in our consolidated financial statements. If we determine that we do not have control over these companies under either voting or VIE models, we then determine if we have an ability to exercise significant influence via voting interests, board representation or other business relationships.

We may account for the investments where we exercise significant influence using either an equity method of accounting or at fair value by electing the fair value option under Accounting Standards Codification (“ASC”) Topic 825, Financial Instruments. If the fair value option is applied to an investment that would otherwise be accounted for under the equity method, we apply it to all our financial interests in the same entity (equity and debt, including guarantees) that are eligible items. All gains and losses from fair value changes, unrealized and realized, are presented as changes in fair values of equity method investments, net, and changes in fair values of other equity and long-term investments, net, on the consolidated statements of income.

If we conclude that we do not have an ability to exercise significant influence over an investee, we may elect to account for the equity investment without a readily determinable fair value using the measurement alternative under ASC Topic 312, Investments - Equity Securities. This measurement alternative allows us to measure the equity investment at its cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer.

We also invest in ISP Fund LP, which investments consist of money market funds, trading and equity securities in the healthcare, pharmaceutical and biotechnology industries. Pursuant to the Partnership Agreement entered in December 2020, we became a limited partner of this partnership, and our contributions are subject to a 36-month lock-up period which restriction prevents us to have control and access to the contributions and related investments. These investments are classified as long-term investments on the consolidated balance sheets.

Fair Value of Financial Instruments

We define fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.

Our valuation techniques are based on observable and unobservable inputs. Observable inputs reflect readily obtainable data from independent sources, while unobservable inputs reflect our market assumptions. We classify these inputs into the following hierarchy:

Level 1—Quoted prices for identical instruments in active markets.

Level 2—Quoted prices for similar instruments in active markets; quoted prices for identical 3or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable.

Level 3—Unobservable inputs and little, if any, market activity for the assets.

Financial instruments include cash equivalents, accounts receivable, receivables from collaborative arrangements, accounts payable, and accrued liabilities, equity investments and convertible promissory notes. The carrying values of cash equivalents, receivables from collaborative arrangements, accounts payable, and accrued liabilities approximate their estimated fair values due to the relatively short-term nature of these instruments.

Capitalized Fees Paid

We capitalize fees paid to licensors related to agreements for approved products or commercialized products. We capitalize these fees as capitalized fees paid (“Capitalized Fees”) and amortize them on a straight-line basis over their estimated useful lives upon the commercial launch of the product, shortly after its regulatory approval. The estimated useful lives of these Capitalized Fees are determined on a country-by-country and product-by-product basis, as the later of the expiration or termination of the last patent right covering the compound in such product in such country and 15 years from first commercial sale of such product in such country, unless the Collaboration Agreement is terminated earlier. Consistent with our policy for classification of costs under the research and development collaborative arrangements, the amortization of these Capitalized Fees is recognized as a reduction of royalty revenue. We review our Capitalized Fees for impairment on a product-by-product basis for each major geographic area when events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. The recoverability of Capitalized Fees is measured by comparing the asset’s carrying amount to the expected undiscounted future cash flows that the asset is expected to generate. The determination of recoverability typically requires various estimates and assumptions, including estimating the useful life over which cash flows will occur, their amount, and the asset’s residual value, if any. We derive the required cash flow estimates from near-term forecasted product sales and long-term projected sales in the corresponding market.

Goodwill and Intangible Assets

Goodwill is recognized as the excess of the purchase consideration of an acquired entity over the fair value assigned to assets acquired and liabilities assumed in a business combination. Goodwill and intangible assets with indefinite useful life are not amortized and are tested for impairment at least annually on the first day of December of each year or more frequently if indicators for potential impairment exist or whenever events or changes in circumstances indicate that the asset’s carrying asset amount may not be recoverable. Intangible assets with definite useful lives are amortized on a straight-line basis over their respective remaining useful lives and are tested for impairment only if indicators for potential impairment exist or whenever events or changes in circumstances indicate that the asset’s carrying amount may not be recoverable. Significant judgment may be involved in determining if an indicator of impairment has occurred.

Operating Leases

Right-of-use assets represent our right to use an underlying asset over the lease term and include any lease payments made prior to the lease commencement date and are reduced by lease incentives. Lease liabilities represent the present value of the total lease payments over the lease term, calculated using an estimated incremental borrowing rate. Lease expense is recognized on a straight-line basis over the expected lease term.

Revenue Recognition

We apply the guidance on principal versus agent considerations under ASC Topic 606, Revenue from Contracts with Customers, to determine the appropriate treatment for the transactions between us and third parties. The classification of transactions under our arrangements is determined based on the nature and contractual terms of the arrangement along with the nature of the operations of the participants. Any consideration related to activities in which we are considered the principal, which includes being in control of the good or service before such good or service is transferred to the customer, are accounted for as product sales.

Revenue is recognized when our customer obtains control of promised goods or services, in an amount that reflects the consideration which we expect to receive in exchange for those goods or services. Revenue is recognized through a five-step process: (i) identify the contract with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price for the contract; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue as a performance obligation is satisfied.

Royalty Revenue

We recognize the royalty revenue on net sales of products with respect to which we have contractual royalty rights in the period in which the royalties are earned. The net sales reports provided by our partner are based on its methodology and assumptions to estimate rebates and returns, which it monitors and adjusts regularly in light of contractual and legal obligations, historical trends, past experience and projected market conditions. Our partner may make significant adjustments to its sales based on actual results recorded, which could cause our royalty revenue to fluctuate. We conduct periodic royalty audits to evaluate the information provided by our partner. Royalties are recognized net of amortization of capitalized fees associated with any approval and launch milestone payments made to GSK.

Revenue from Product Sales

Revenue from product sales is recognized when our customers obtain control of the product and is recorded at the transaction price, net of estimates for variable consideration consisting of chargebacks, discounts, returns and rebates. Variable consideration is estimated using the expected-value amount method, which is the sum of probability-weighted amounts in a range of possible consideration amounts. Actual amounts of consideration ultimately received may differ from our estimates. If actual results vary materially from our estimates, we will adjust these estimates, which will affect revenue from product sales and earnings in the period such estimates are adjusted. These items may include:

•

Chargebacks: Chargebacks are discounts we provide to distributors in the event that the sales prices to end users are below the distributors’ acquisition price. This may occur due to a direct contract with a health system, a group purchasing organization (“GPO”) agreement or a sale to a government facility. Chargebacks are estimated based on known chargeback rates and recorded as a reduction of revenue on delivery to our customers.

•

Discounts: We offer customers various forms of incentives and consideration, including prompt-pay and other discounts. We estimate discounts primarily based on contractual terms. These discounts are recorded as a reduction of revenue on delivery to our customers.

•

Returns: We offer customers a limited right of return, generally for damaged or expired product. We estimate returns based on an internal analysis, which includes actual experience. The estimates for returns are recorded as a reduction of revenue on delivery to our customers.

•

Rebates: We participate in Medicaid rebate programs, which provide assistance to certain low-income patients based on each individual state’s guidelines regarding eligibility and services. Under the Medicaid rebate programs, we pay a rebate to each participating state, generally within three months after the quarter in which product was sold. Additionally, we may offer customer incentives and consideration in the form of volume-based or other rebates. The estimates for rebates are recorded as a reduction of revenue on delivery to our customers.

We continue to assess our estimates of variable consideration as we accumulate additional historical data and will adjust these estimates accordingly.

Research and Development Expenses

Research and development expenses are recognized in the period that services are rendered or goods are received. Research and development expenses consist of salaries and benefits, laboratory supplies, facilities and other overhead costs, research-related manufacturing costs, contract service and clinical-related service costs performed by third party research organizations, research institutions and other outside service providers. Non-refundable prepayments for goods or services that will be used or rendered for future research and development activities are deferred and capitalized. Such amounts are recognized as an expense as the related goods are delivered or the related services are performed. We also utilize significant judgment and estimates to record accruals for estimated ongoing research expenses based on the progress of the studies and progress of research manufacturing activities.

Interest Expense on Deferred Royalty Obligation

Interest expense related to the deferred royalty obligation is recognized over the expected repayment term of the deferred royalty obligation using the effective interest method. The assumptions used in determining the expected repayment term of the deferred royalty obligation require us to make estimates that could impact the effective interest rate. Each reporting period, we estimate the expected repayment term of the deferred royalty obligation based on forecasted net sales of GIAPREZA®. Changes in interest expense resulting from changes in the effective interest rate, if any, are recorded on a prospective basis. Refer to Note 12, “Debt”, for more information.

Fair Value of Stock‑Based Compensation Awards

We use the Black-Scholes-Merton option pricing model to estimate the fair value of options granted under our equity incentive plans and rights to acquire stock granted under our employee stock purchase plan (“ESPP”). The Black-Scholes-Merton option valuation model requires the use of assumptions, including the expected term of the award and the expected stock price volatility. We use the “simplified” method as described in Staff Accounting Bulletin No. 107, “Share-Based Payment,” for the expected option term. We use our historical volatility to estimate expected stock price volatility.

Restricted stock units (“RSUs”) and restricted stock awards (“RSAs”) are measured based on the fair market values of the underlying stock on the dates of grant.

Stock-based compensation expense is calculated based on awards ultimately expected to vest and is reduced for estimated forfeitures at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differed from those estimates. Our estimated annual forfeiture rates for stock options, RSUs and RSAs are based on our historical forfeiture experience.

The estimated fair value of stock options, RSUs and RSAs is expensed on a ratable or straight-line basis over the expected term of the grant or expected term of the vesting. Compensation expense is recorded over the requisite service period based on management’s best estimate as to whether it is probable that the shares awarded are expected to vest.

Compensation expense for purchases under the ESPP is recognized based on the fair value of the common stock on the date of offering, less the purchase discount percentage provided for in the plan.

Income Taxes

We utilize the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on differences between financial reporting and the tax basis of assets and liabilities and are measured using enacted tax rates and laws that will be in effect when the differences are expected to reverse. A valuation allowance is provided when it is more likely than not that some portion or all of a deferred tax asset will not be realized.

The recognition and measurement of tax benefits requires significant judgment. Our judgment might change as new information becomes available. We continue to evaluate our deferred tax assets each reporting period to determine whether adjustments to our valuation allowance are required and deferred tax assets will be realized based on the consideration of all available positive and negative evidence, including the differences between our anticipated and actual future operating results, using a “more likely than not” standard.

We assess all material positions taken in any income tax return, including all significant uncertain positions, in all tax years that are still subject to assessment or challenge by relevant taxing authorities. Assessing an uncertain tax position begins with the initial determination of the position’s sustainability and is measured at the largest amount of benefit that is greater than 50% likely to be realized upon ultimate settlement. As of each balance sheet date, unresolved uncertain tax positions must be reassessed, and we determine whether the factors underlying the sustainability assertion have changed and whether the amount of the recognized tax benefit is still appropriate.

Comprehensive Income

Comprehensive income is comprised of net income and other comprehensive income (loss). Other comprehensive income (loss) consists of changes in unrealized and realized gains and losses on our marketable securities and the related tax impact of these changes.

Related Parties

Transactions with GSK were considered related party transactions up until May 2021, when we completed the share repurchase agreement with GSK to buy back all of its shares of common stock in Innoviva. GSK is no longer considered a related party after the completion of the share repurchase. Transactions with GSK are described in Note 3, “Revenue Recognition and Collaborative Arrangements.”

Sarissa Capital owned 9.6% of our outstanding common stock as of December 31, 2022. Transactions with Sarissa Capital are described in Note 5, “Consolidated Entities and Acquisitions”. Sarissa Capital is considered to be a related party because two of its principals are members of our board of directors.

Accounting Pronouncements Adopted by the Company

In August 2020, the FASB issued ASU 2020-06, Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, which is intended to simplify the accounting for convertible instruments by removing certain separation models in Subtopic 470-20 for convertible instruments. Consequently, a convertible debt instrument will be accounted for as a single liability measured at its amortized cost, as long as no other features require bifurcation and recognition as derivatives. The new standard also requires the if-converted method to be used to calculate diluted earnings per share (“EPS”) for convertible instruments. Effective January 1, 2022, we adopted the new standard using the modified retrospective approach and assessed the effect of this adoption on the accounting for our outstanding convertible notes. The effect of the adoption on our 2025 Notes (as defined below) resulted in a decrease to the opening balance of accumulated deficit of $37.2 million, a reduction to additional paid-in capital of $65.4 million, an increase to the balance of the notes by an aggregate amount of $35.6 million, and an increase to deferred tax assets of $7.4 million. The dilutive EPS of our 2025 Notes will be computed under the if-converted method going forward. There was no financial impact from the implementation of the standard for our 2023 Notes (as defined below). Refer to Note 12, “Debt”, for more information.

In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805), Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which requires contract assets and contract liabilities (i.e., deferred revenue) acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC Topic 606, Revenue from Contracts with Customers. During the third quarter of 2022, we elected to early adopt ASU 2021-08 effective July 1, 2022. The adoption did not have a material impact on our consolidated financial statements.

CONSOLIDATED ENTITIES AND ACQUISITIONS - Pro Forma Information (Details) - Entasis Therapeutics Holdings Inc - La Jolla Pharmaceutical Company - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Business Acquisition [Line Items]
Revenue	$ 357,880	$ 435,398
Net income	204,987	281,719
Net income attributable to Innoviva stockholders	$ 214,390	$ 197,535

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 220
-Section S99
-Paragraph 1
-Subparagraph (SX 210.9-04(22))
-URI https://asc.fasb.org/extlink&oid=120399700&loc=SL114874048-224260

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (f)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8933-108599

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
-Section 50
-Paragraph 4
-URI https://asc.fasb.org/extlink&oid=124431687&loc=d3e22595-107794

Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 944
-SubTopic 220
-Section S99
-Paragraph 1
-Subparagraph (SX 210.7-04(18))
-URI https://asc.fasb.org/extlink&oid=120400993&loc=SL114874131-224263

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 40
-Section 65
-Paragraph 1
-Subparagraph (f)
-URI https://asc.fasb.org/extlink&oid=126732423&loc=SL123482106-238011

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
-Section 50
-Paragraph 6
-URI https://asc.fasb.org/extlink&oid=124431353&loc=SL124452729-227067

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 10
-Section S99
-Paragraph 1B
-Subparagraph (SX 210.13-02(a)(5))
-URI https://asc.fasb.org/extlink&oid=126975872&loc=SL124442552-122756

Reference 8: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SX 210.5-03(20))
-URI https://asc.fasb.org/extlink&oid=126953954&loc=SL114868664-224227

Reference 9: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 230
-SubTopic 10
-Section 45
-Paragraph 28
-URI https://asc.fasb.org/extlink&oid=126954810&loc=d3e3602-108585

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
-Section 50
-Paragraph 1
-Subparagraph (b)(2)
-URI https://asc.fasb.org/extlink&oid=124431687&loc=d3e22499-107794

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 10
-Section S99
-Paragraph 1A
-Subparagraph (SX 210.13-01(a)(4)(iv))
-URI https://asc.fasb.org/extlink&oid=126975872&loc=SL124442526-122756

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 10
-Section S99
-Paragraph 1A
-Subparagraph (SX 210.13-01(a)(4)(iii)(A))
-URI https://asc.fasb.org/extlink&oid=126975872&loc=SL124442526-122756

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 10
-Section S99
-Paragraph 1B
-Subparagraph (SX 210.13-02(a)(4)(i))
-URI https://asc.fasb.org/extlink&oid=126975872&loc=SL124442552-122756

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 10
-Section S99
-Paragraph 1A
-Subparagraph (SX 210.13-01(a)(4)(i))
-URI https://asc.fasb.org/extlink&oid=126975872&loc=SL124442526-122756

Reference 15: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
-Section 50
-Paragraph 9
-URI https://asc.fasb.org/extlink&oid=124431687&loc=d3e22663-107794

Reference 16: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 10
-Section S99
-Paragraph 1B
-Subparagraph (SX 210.13-02(a)(4)(iv))
-URI https://asc.fasb.org/extlink&oid=126975872&loc=SL124442552-122756

Reference 17: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 10
-Section S99
-Paragraph 1A
-Subparagraph (SX 210.13-01(a)(4)(ii))
-URI https://asc.fasb.org/extlink&oid=126975872&loc=SL124442526-122756

Reference 18: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 10
-Section 50
-Paragraph 28
-Subparagraph (f)
-URI https://asc.fasb.org/extlink&oid=123596393&loc=d3e14064-108612

Reference 19: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
-Section 50
-Paragraph 3
-URI https://asc.fasb.org/extlink&oid=124431687&loc=d3e22583-107794

Reference 20: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(g)(1)(ii))
-URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

Reference 21: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 260
-SubTopic 10
-Section 45
-Paragraph 60B
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126958026&loc=SL5780133-109256

Reference 22: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 323
-SubTopic 10
-Section 50
-Paragraph 3
-Subparagraph (c)
-URI https://asc.fasb.org/extlink&oid=114001798&loc=d3e33918-111571

Reference 23: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
-Section 50
-Paragraph 8
-URI https://asc.fasb.org/extlink&oid=124431687&loc=d3e22658-107794

Reference 24: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
-Section 45
-Paragraph 1A
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126968391&loc=SL7669619-108580

Reference 25: http://www.xbrl.org/2003/role/exampleRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 31
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8924-108599

Reference 26: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
-Section 50
-Paragraph 11
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=124431687&loc=d3e22694-107794

Reference 27: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
-Section 50
-Paragraph 11
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=124431687&loc=d3e22694-107794

Reference 28: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 205
-SubTopic 20
-Section 50
-Paragraph 7
-URI https://asc.fasb.org/extlink&oid=109222650&loc=SL51721683-107760

Reference 29: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
-Section 45
-Paragraph 1B
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126968391&loc=SL7669625-108580

Reference 30: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 22
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8736-108599

Reference 31: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 10
-Section S99
-Paragraph 1A
-Subparagraph (SX 210.13-01(a)(5))
-URI https://asc.fasb.org/extlink&oid=126975872&loc=SL124442526-122756

Reference 32: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 10
-Section S99
-Paragraph 1B
-Subparagraph (SX 210.13-02(a)(4)(iii)(B))
-URI https://asc.fasb.org/extlink&oid=126975872&loc=SL124442552-122756

Reference 33: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 10
-Section S99
-Paragraph 1B
-Subparagraph (SX 210.13-02(a)(4)(iii)(A))
-URI https://asc.fasb.org/extlink&oid=126975872&loc=SL124442552-122756

Reference 34: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 30
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8906-108599

Reference 35: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (c)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8933-108599

+ Details

Document and Entity Information - USD ($) $ in Thousands	12 Months Ended
Document and Entity Information - USD ($) $ in Thousands	Dec. 31, 2022	Feb. 14, 2023	Jun. 30, 2022
Cover [Abstract]
Entity Registrant Name	INNOVIVA, INC.
Document Type	10-K
Document Annual Report	true
Document Period End Date	Dec. 31, 2022
Document Transition Report	false
Securities Act File Number	000-30319
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	94-3265960
Entity Address, Address Line One	1350 Old Bayshore Highway, Suite 400
Entity Address, City or Town	Burlingame
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	94010
City Area Code	650
Local Phone Number	238-9600
Title of 12(b) Security	Common Stock $0.01 Par Value
Trading Symbol	INVA
Security Exchange Name	NASDAQ
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
ICFR Auditor Attestation Flag	true
Entity Shell Company	false
Entity Public Float			$ 923,930,805
Entity Common Stock, Shares Outstanding		68,126,089
Entity Central Index Key	0001080014
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	FY
Amendment Flag	false
Documents Incorporated by Reference	DOCUMENTS INCORPORATED BY REFERENCE Specified portions of the registrant’s definitive Proxy Statement to be issued in conjunction with the registrant’s 2023 Annual Meeting of Stockholders, which is expected to be filed not later than 120 days after the registrant’s fiscal year ended December 31, 2022, are incorporated by reference into Part III of this Annual Report. Except as expressly incorporated by reference, the registrant’s Proxy Statement shall not be deemed to be a part of this Annual Report on Form 10-K.
Auditor Name	Deloitte & Touche LLP
Auditor Location	San Jose, California
Auditor Firm ID	34

EQUITY AND LONG-TERM INVESTMENTS AND FAIR VALUE MEASUREMENTS - Convertible Promissory Note in Gate Neurosciences (Details) - Gate Neurosciences Member - USD ($) $ in Millions		12 Months Ended
	Nov. 24, 2021	Dec. 31, 2022	Dec. 31, 2021
Equity Investment
Number of common stock issued description	The number of common stock shares to be issued in a qualified event shall be equal to the amount due on the conversion date divided by the lesser of a capped conversion price (the “Capped Conversion Price”) and the qualified event price (the “Qualified Event Price”). The Capped Conversion Price is calculated as $50.0 million divided by the number of common stock outstanding at such time on a fully diluted basis. The Qualified Event Price is the price per share determined by the qualified event. A qualified financing is a sale or series of sales of preferred stock where (i) at least 50 percent of counterparties are not existing shareholders, (ii) net proceeds to Gate are at least $35.0 million, and (iii) the stated or implied equity valuation of Gate is at least $80.0 million.
Equity and long-term investments at fair value		$ 15.7	$ 15.1
Unrealized gain from fair value changes in equity investments		$ 0.6
Unrealized loss from fair value changes in equity investments			$ 0.8
Convertible Promissory Note Purchase Agreement
Equity Investment
Debt Instrument, Principal Payment	$ 15.0
Debt Instrument, annual interest rate	8.00%

CONSOLIDATED STATEMENTS OF INCOME (Parenthetical) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Royalty revenue
Amortization of capitalized fees paid	$ 13,823	$ 13,823	$ 13,823

LICENSE AND COLLABORATION ARRANGEMENTS - Additional Information (Details) $ in Millions	12 Months Ended
	Dec. 31, 2022 USD ($)
Zai Lab \| Research and Development Support
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Revenues	$ 0.0
Future potential milestone payment receivable	91.0
PAION AG
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Future potential milestone payment receivable	109.5
Everest Medicines Limited
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Additional regulatory milestone payments receivable	8.0
Sales milestone payments receivable	$ 20.0
Royalties payable period after first commercial sale of product	10 years
Everest Medicines Limited \| Commercial Supply Agreement
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Revenues	$ 0.8
Percentage of reimbursed for direct and certain indirect manufacturing costs	110.00%
Deferred revenue	$ 2.8
George Washington University
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Percentage of royalty payable on net sales	6.00%
Percentage of royalty on payments received from sublicensees	15.00%
Harvard University
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Percentage of royalty payable on net sales	5.00%
Percentage of royalty on payments received from sublicensees	20.00%
Clinical development and regulatory milestones amount payable	$ 15.1
Percentage of minimum royalty rate	4.50%
Percentage of maximum royalty based on achievement of annual net product sales thresholds	7.50%
Paratek Pharmaceuticals, Inc
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Percentage of royalty payable on net sales	2.25%
Claim Expiration Date	2023-10

DESCRIPTION OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

12 Months Ended

Dec. 31, 2022

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Principles of Consolidation

Presentation Reclassification

Factors Affecting Comparability

•

Adoption of Accounting Standards Update (“ASU”) 2020-06 effective January 1, 2022;

•

Accounting consolidation of Entasis on February 17, 2022 and purchase of remaining noncontrolling interest in Entasis on July 11, 2022;

•

Sale of our 15% ownership interest in TRC on July 20, 2022; and

•

Acquisition of La Jolla on August 22, 2022.

Use of Management's Estimates

Use of Management’s Estimates

Concentrations of Credit Risk and of Significant Suppliers and Partners

Segment Reporting

Variable Interest Entities

Business Combination

Cash and Cash Equivalents

Investments in Marketable Securities

Accounts Receivable

Inventory

Property and Equipment

Property and equipment are stated at cost less accumulated depreciation. Property and equipment are depreciated using the straight-line method as follows:


Leasehold improvements		Shorter of remaining lease terms or useful life
Laboratory equipment, furniture and fixtures		5 - 7 years
Software and computer equipment		3 years

Equity and Long-Term Investments

Fair Value of Financial Instruments

Level 1—Quoted prices for identical instruments in active markets.

Level 3—Unobservable inputs and little, if any, market activity for the assets.

Capitalized Fees Paid

Goodwill and Intangible Assets

Operating Leases

Revenue Recognition

Royalty Revenue

Revenue from Product Sales

•

We continue to assess our estimates of variable consideration as we accumulate additional historical data and will adjust these estimates accordingly.

Research and Development Expenses

Interest Expense on Deferred Royalty Obligation

Fair Value of Stock-Based Compensation Awards

Fair Value of Stock‑Based Compensation Awards

Restricted stock units (“RSUs”) and restricted stock awards (“RSAs”) are measured based on the fair market values of the underlying stock on the dates of grant.

Compensation expense for purchases under the ESPP is recognized based on the fair value of the common stock on the date of offering, less the purchase discount percentage provided for in the plan.

Income Taxes

Comprehensive Income

EQUITY AND LONG-TERM INVESTMENTS AND FAIR VALUE MEASUREMENTS - Equity Investment in ImaginAb (Details) - ImaginAb $ in Millions	Mar. 18, 2021 USD ($) shares	Dec. 31, 2022 USD ($) Director	Dec. 31, 2021 USD ($)
Equity Investment
Transaction costs to acquire equity securities	$ 0.4
Equity method investment ownership percentage		12.70%	14.50%
Number of Investee's Board members currently representing the Company \| Director		1
Number of the Investee's Board members \| Director		6
Equity and long-term investments at fair value		$ 6.4	$ 6.4
Series C preferred stock
Equity Investment
Number of shares to be purchased under the securities purchase agreement \| shares	4,051,724
Amount of securities purchase agreement	$ 4.7
One of ImaginAb's Common Stockholders \| Common stock
Equity Investment
Number of shares to be purchased under the securities purchase agreement \| shares	4,097,157
Amount of securities purchase agreement	$ 1.3

STOCK-BASED COMPENSATION - Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Stock-based compensation
Total stock-based compensation expense	$ 7,347	$ 2,017	$ 1,698
Unrecognized compensation cost	8,714
ESPP
Stock-based compensation
Total stock-based compensation expense	43	47	34
Stock options
Stock-based compensation
Total stock-based compensation expense	3,057	490	242
Unrecognized compensation cost	$ 3,550
Weighted-Average Amortization Period (Years)	2 years 10 months 24 days
RSUs
Stock-based compensation
Total stock-based compensation expense	$ 4,053	1,280	1,149
Unrecognized compensation cost	$ 4,776
Weighted-Average Amortization Period (Years)	2 years 2 months 12 days
RSAs
Stock-based compensation
Total stock-based compensation expense	$ 194	200	273
Unrecognized compensation cost	$ 388
Weighted-Average Amortization Period (Years)	2 years 7 months 6 days
Selling, general and administrative
Stock-based compensation
Total stock-based compensation expense	$ 5,305	2,017	1,698
Research and development
Stock-based compensation
Total stock-based compensation expense	$ 2,042	$ 0	$ 0

EQUITY AND LONG-TERM INVESTMENTS AND FAIR VALUE MEASUREMENTS - Schedule of Available-for-Sale Securities Measured at Fair Value on a Recurring Basis (Details) - USD ($)
$ in Thousands

12 Months Ended

Dec. 31, 2022

Dec. 31, 2021

Fair Value Measurements

Contingent value rights liability

$ 595

ISP Fund LP

Liabilities

Lock-up period

36 months

Contributed to partnership for investing

$ 300,000

Money market funds | ISP Fund LP

Assets

Total assets measured at estimated fair value

25,100

$ 3,500

Equity investment | ISP Fund LP

Assets

Total assets measured at estimated fair value

295,400

192,200

Private Placement Positions And Convertible Notes | ISP Fund LP

Assets

Total assets measured at estimated fair value

54,600

Recurring basis

Assets

Total assets measured at estimated fair value

639,488

606,792

Recurring basis | Money market funds

Assets

Total assets measured at estimated fair value

263,469

145,132

Recurring basis | Equity investments and Money market funds | ISP Fund LP

Assets

Total assets measured at estimated fair value

320,560

^[1]

195,745

^[2]

Recurring basis | Quoted Price in Active Markets for Identical Assets, Level 1

Assets

Total assets measured at estimated fair value

560,546

489,704

Recurring basis | Quoted Price in Active Markets for Identical Assets, Level 1 | ISP Fund LP

Assets

Total assets measured at estimated fair value

^[1]

265,982

Recurring basis | Quoted Price in Active Markets for Identical Assets, Level 1 | Money market funds

Assets

Total assets measured at estimated fair value

263,469

145,132

Recurring basis | Quoted Price in Active Markets for Identical Assets, Level 1 | Equity investments and Money market funds | ISP Fund LP

Assets

Total assets measured at estimated fair value

^[2]

193,677

Recurring basis | Significant Other Observable Inputs, Level 2

Assets

Total assets measured at estimated fair value

8,059

99,509

Recurring basis | Significant Unobservable Inputs, Level 3

Assets

Total assets measured at estimated fair value

70,883

17,579

Recurring basis | Significant Unobservable Inputs, Level 3 | Equity investments and Money market funds | ISP Fund LP

Assets

Total assets measured at estimated fair value

54,578

^[1]

2,068

^[2]

Nonrecurring basis

Fair Value Measurements

Contingent value rights liability

595

Liabilities

Total liabilities at estimated fair value

506,259

Nonrecurring basis | Debt

Fair Value Measurements

2023 Notes

96,089

261,769

2025 Notes

197,807

234,498

2028 Notes

211,768

Total fair value of debt

505,664

496,267

Nonrecurring basis | Significant Other Observable Inputs, Level 2

Fair Value Measurements

2028 Notes

211,768

Total fair value of debt

505,664

Liabilities

Total liabilities at estimated fair value

505,664

Nonrecurring basis | Significant Other Observable Inputs, Level 2 | Debt

Fair Value Measurements

2023 Notes

96,089

261,769

2025 Notes

197,807

234,498

Total fair value of debt

496,267

Nonrecurring basis | Significant Unobservable Inputs, Level 3

Fair Value Measurements

Contingent value rights liability

595

Liabilities

Total liabilities at estimated fair value

595

Armata | Recurring basis | Equity investment | Common stock

Assets

Total assets measured at estimated fair value

31,095

88,101

Armata | Recurring basis | Equity investment | Warrants

Assets

Total assets measured at estimated fair value

8,059

58,595

Armata | Recurring basis | Quoted Price in Active Markets for Identical Assets, Level 1 | Equity investment | Common stock

Assets

Total assets measured at estimated fair value

31,095

88,101

Armata | Recurring basis | Significant Other Observable Inputs, Level 2 | Equity investment | Warrants

Assets

Total assets measured at estimated fair value

8,059

58,595

Entasis | Quoted Price in Active Markets for Identical Assets, Level 1 | Equity investment | Common stock

Assets

Total assets measured at estimated fair value

62,794

Entasis | Recurring basis | Equity investment | Common stock

Assets

Total assets measured at estimated fair value

62,794

Entasis | Recurring basis | Equity investment | Warrants

Assets

Total assets measured at estimated fair value

40,914

Entasis | Recurring basis | Significant Other Observable Inputs, Level 2 | Equity investment | Warrants

Assets

Total assets measured at estimated fair value

40,914

InCarda | Recurring basis | Equity investment | Warrants

Assets

Total assets measured at estimated fair value

605

411

InCarda | Recurring basis | Significant Unobservable Inputs, Level 3 | Equity investment | Warrants

Assets

Total assets measured at estimated fair value

605

411

Gate Neurosciences Member | Recurring basis | Convertible debt investment

Assets

Total assets measured at estimated fair value

15,700

15,100

Gate Neurosciences Member | Recurring basis | Significant Unobservable Inputs, Level 3 | Convertible debt investment

Assets

Total assets measured at estimated fair value

$ 15,700

$ 15,100

[1]	The investments held by ISP Fund LP, consisted of $295.4 million in equity investments, which included private placement positions and convertible notes of $54.6 million, and $25.1 million in money market funds. Our total capital contribution of $300.0 million is subject to a 36-month lock-up period from the date of such capital contributions.
[2]	The investments held by ISP Fund LP, consisted of $192.2 million equity investments and $3.5 million money market funds, are subject to a 36-month lock-up period from our initial contribution date, December 11, 2020.

COMMITMENTS AND CONTINGENCIES - Schedule of Operating Lease Information Presented in Balance Sheet (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Leases, Operating [Abstract]
Right-of-use assets	$ 3,265	$ 97
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration]	Liabilities, Current	Liabilities, Current
Current portion of lease liabilities included within Other accrued liabilities	$ 1,316	$ 106
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration]	Other Liabilities, Noncurrent	Other Liabilities, Noncurrent
Long-term portion of lease liabilities	$ 2,376	$ 0
Total operating lease liabilities	$ 3,692	$ 106

GOODWILL AND INTANGIBLE ASSETS - Summary of Accumulated Amortization of Recognized Intangible Assets (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Finite-Lived Intangible Assets [Line Items]
Marketed products, gross carrying amount	$ 151,000
In-process research and development, gross carrying amount	72,100
Collaboration agreement, gross carrying amount	35,400
Total gross carrying amount	258,500
Marketed products, Accumulated amortization	(5,581)
Accumulated amortization	(5,581)
Marketed products, net carrying amount	145,419
In-process research and development, net carrying amount	72,100
Collaboration agreement, net carrying amount	35,400
Net carrying amount	$ 252,919	$ 0
Maximum
Finite-Lived Intangible Assets [Line Items]
Marketed products, Useful Life	10 years
Minimum
Finite-Lived Intangible Assets [Line Items]
Marketed products, Useful Life	8 years

EQUITY AND LONG-TERM INVESTMENTS AND FAIR VALUE MEASUREMENTS - Available-for-Sale Securities (Details) - USD ($)
$ in Thousands

Dec. 31, 2022

Dec. 31, 2021

Available-for-Sale Securities

Amortized Cost

$ 263,469

$ 145,132

Gross Unrealized Gains

Gross Unrealized Losses

Estimated Fair Value

263,469

145,132

Credit loss

Money market funds

Available-for-Sale Securities

Amortized Cost

^[1]

263,469

145,132

Gross Unrealized Gains

^[1]

Gross Unrealized Losses

^[1]

Estimated Fair Value

^[1]

$ 263,469

$ 145,132

[1]	Money market funds are included in cash and cash equivalents on the consolidated balance sheets.

REVENUE RECOGNITION (Details) - USD ($) $ in Thousands		4 Months Ended	12 Months Ended
REVENUE RECOGNITION (Details) - USD ($) $ in Thousands	Jul. 13, 2022	Dec. 31, 2022	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2014
Revenue Recognition and Collaborative Arrangements
Total net revenue			$ 331,339	$ 391,866	$ 336,794
Milestone fees paid		$ 220,000	220,000	220,000
United States
Revenue Recognition and Collaborative Arrangements
Milestone fees paid		120,000	120,000	120,000
La Jolla Pharmaceutical Company
Revenue Recognition and Collaborative Arrangements
Total net revenue		$ 19,700
Net Product Sales \| Geographic Concentration Risk \| La Jolla Pharmaceutical Company \| United States
Revenue Recognition and Collaborative Arrangements
Concentration Risk, Percentage		96.00%
Net Product Sales \| Geographic Concentration Risk \| La Jolla Pharmaceutical Company \| Rest of the world
Revenue Recognition and Collaborative Arrangements
Concentration Risk, Percentage		4.00%
Strategic alliance - MABA program
Revenue Recognition and Collaborative Arrangements
Revenue recognized upon termination of contract					10,000
Royalty revenue
Revenue Recognition and Collaborative Arrangements
Total net revenue			311,645	391,866	326,794
GIAPREZA
Revenue Recognition and Collaborative Arrangements
Total net revenue		$ 14,200
XERAVA \| La Jolla Pharmaceutical Company
Revenue Recognition and Collaborative Arrangements
Total net revenue		$ 5,500
Revenue from collaborative arrangements
Revenue Recognition and Collaborative Arrangements
Total net revenue			0	0	10,000
GSK
Revenue Recognition and Collaborative Arrangements
Percentage of royalty payments not entitled to receive	15.00%
Total net revenue			$ 311,645	391,866	336,794
GSK \| Long-Acting Beta2 Agonist (LABA) Collaboration
Revenue Recognition and Collaborative Arrangements
Milestone fees paid						$ 220,000
Percentage of economic interest in any future payments made under the agreements			15.00%
GSK \| Royalty revenue
Revenue Recognition and Collaborative Arrangements
Total net revenue			$ 311,645	$ 391,866	$ 326,794
GSK \| RELVAR/BREO \| Long-Acting Beta2 Agonist (LABA) Collaboration
Revenue Recognition and Collaborative Arrangements
Royalty rate for first level of annual global net sales (as a percent)			15.00%
Annual global sales level used to determine royalty rate			$ 3,000,000
Royalty rate for sales above first level of annual global net sales (as a percent)			5.00%
GSK \| ANORO \| Long-Acting Beta2 Agonist (LABA) Collaboration \| Minimum
Revenue Recognition and Collaborative Arrangements
Royalty rate for combination products (as a percent)			6.50%
GSK \| ANORO \| Long-Acting Beta2 Agonist (LABA) Collaboration \| Maximum
Revenue Recognition and Collaborative Arrangements
Royalty rate for combination products (as a percent)			10.00%
GSK \| TRELEGY \| Long-Acting Beta2 Agonist (LABA) Collaboration \| Minimum
Revenue Recognition and Collaborative Arrangements
Royalty rate for combination products (as a percent)			6.50%
GSK \| TRELEGY \| Long-Acting Beta2 Agonist (LABA) Collaboration \| Maximum
Revenue Recognition and Collaborative Arrangements
Royalty rate for combination products (as a percent)			10.00%

COMMITMENTS AND CONTINGENCIES (Tables)

12 Months Ended

Dec. 31, 2022

Commitments and Contingencies Disclosure [Abstract]

Schedule of Components of Lease Cost

The components of lease costs are as follows:


	Year Ended
(In thousands)	December 31, 2022
Straight line operating lease costs	$	1,585
Variable lease costs		155
Total lease costs	$	1,740

Schedule of Supplemental Cash Flow Information Related to Leases

Supplemental cash flow information related to leases are as follows:


	Year Ended
(In thousands)	December 31, 2022
Cash paid for amounts included in the measurement of operating lease liabilities:	$	790
Operating lease right-of-use assets obtained in exchange for operating lease obligations		3,323
Right-of-use assets obtained through acquisitions		1,185

Schedule of Operating Lease Information Presented In Balance Sheet

The following table summarizes our operating leases as presented on the consolidated balance sheets:


	December 31,
(In thousands)	2022		2021
Assets
Right-of-use assets	$	3,265	$	97
Liabilities
Current portion of lease liabilities included within Other accrued liabilities	$	1,316	$	106
Long-term portion of lease liabilities included within Other long-term liabilities		2,376		—
Total lease liabilities	$	3,692	$	106

Schedule of Future Minimum Lease Payments

Future minimum lease payments on our operating leases as of December 31, 2022 are as follows:


(In thousands)	Amount
Year ending December 31,
2023	$	1,542
2024		1,269
2025		1,289
Total undiscounted lease payments		4,100
Less: imputed interest		(408	)
Total operating lease liabilities	$	3,692

EQUITY AND LONG-TERM INVESTMENTS AND FAIR VALUE MEASUREMENTS

12 Months Ended

Dec. 31, 2022

Fair Value Disclosures [Abstract]

EQUITY AND LONG-TERM INVESTMENTS AND FAIR VALUE MEASUREMENTS

6. EQUITY AND LONG-TERM INVESTMENTS AND FAIR VALUE MEASUREMENTS

Equity Method Investment in Armata

During the first quarter of 2020, Innoviva acquired 8,710,800 shares of common stock as well as warrants to purchase 8,710,800 additional shares of common stock of Armata Pharmaceuticals, Inc. (“Armata”) for approximately $25.0 million in cash. Armata is a clinical stage biotechnology company focused on precisely targeted bacteriophage therapeutics for antibiotic-resistant infections.

During the first quarter of 2021, ISO entered into a securities purchase agreement with Armata to acquire 6,153,847 shares of Armata common stock and warrants to purchase 6,153,847 additional shares of Armata common stock for approximately $20.0 million. Armata also entered into a voting agreement with the Company and ISO, pursuant to which the Company and ISO agreed not to vote or take any action by written consent with respect to any common shares held by the Company and ISO that represent, in the aggregate, more than 49.5% of the total number of shares of Armata’s common stock for voting on the matters related to election or removal of Armata’s board members. The voting agreement will expire the earlier of the second anniversary of the agreement effective date and approval by the FDA of any of Armata’s product candidates for marketing and commercial distribution. During the fourth quarter of 2021, ISO also purchased an additional 1,212,122 shares of Armata common stock for approximately $4.0 million.

On February 9, 2022, ISO entered into a securities purchase agreement with Armata to acquire 9,000,000 shares of Armata common stock and warrants to purchase 4,500,000 additional shares of common stock with an exercise price of $5.00 per share for $45.0 million. The investment closed in two tranches on February 9, 2022 and March 31, 2022. The investment is intended to aid Armata in advancing its clinical pipeline and strengthening its bacteriophage platform. On February 9, 2022, Armata also entered a second amended and restated voting agreement with the Company and ISO, pursuant to which the Company and ISO agreed not to vote or take any action by written consent with respect to any common shares held by the Company and ISO that represent, in the aggregate, more than 49.5% of the total number of shares of Armata’s common stock for voting on the matters related to election or removal of Armata’s board members or amend the bylaws of Armata to reduce the maximum number of directors or set the number of directors who may serve on the board of Armata. The voting agreement will expire the earlier of the second anniversary of the agreement effective date and approval by the FDA of any of Armata’s product candidates for marketing and commercial distribution. In addition, as of February 9, 2022, Armata entered into an amended and restated investor rights agreement with the Company and ISO, pursuant to which for as long as the Company and ISO hold at least 12.5% of the outstanding shares of Armata’s common stock on a fully-diluted, the Company and ISO shall have the right to designate two directors to Armata’s board of directors, and for so long as the Company and ISO hold at least 8%, but less than 12.5%, of the outstanding shares of Armata’s common stock on a fully-diluted basis, the Company and ISO shall have the right to designate one director to Armata’s board of directors, subject to certain conditions and qualifications set forth in the amended and restated investor rights agreement. As of December 31, 2022, three of the eight members of Armata’s board of directors are also members of the board of directors of Innoviva. As of December 31, 2022 and 2021, we owned approximately 69.4% and 59.3%, respectively, of Armata’s common stock.

The investments in Armata provide Innoviva and ISO the ability to have significant influence, but not control over Armata’s operations. Armata’s business and affairs are managed under the direction of its board of directors, which Innoviva and ISO do not control. Based on our evaluation, we determined that Armata is a VIE, but Innoviva and ISO are not the primary beneficiary of the VIE. We have not provided financial or other support that we were not previously contractually required to provide during the periods presented. Our maximum exposure to loss is equal to the amount we invested in the entity.

We account for both Armata’s common stock and warrants under the equity method using the fair value option. The fair value of Armata’s common stock is measured based on its closing market price. The warrants purchased in 2020, 2021 and 2022 have an exercise price of $2.87, $3.25 and $5.00 per share, respectively. All warrants are exercisable immediately within five years from the issuance date of the warrants and include a cashless exercise option. We use the Black-Scholes-Merton pricing model to estimate the fair value of these warrants with the following input assumptions: Armata’s closing market price on the valuation date, the risk-free interest rate computed based on the U.S. Treasury yield, the remaining contractual term as the expected term, and the expected stock price volatility calculated based on the historical volatility of the common stock of Armata and its peer companies.

As of December 31, 2022, the fair values of our holdings of Armata common stock and warrants were estimated at $31.1 million and $8.1 million, respectively. As of December 31, 2021, the fair values of our holdings of Armata common stock and warrants were estimated at $88.1 million and $58.6 million, respectively. The total fair value of both financial instruments in the amount of $39.2 million and $146.7 million was recorded as equity and long-term investments on the consolidated balance sheets as of December 31, 2022 and 2021, respectively. We recorded $152.5 million unrealized losses and $78.7 million unrealized gains as changes in fair values of equity method investments, net, on the consolidated statements of income for the years ended December 31, 2022 and 2021, respectively.

The summarized financial information, including the portion we do not own, is presented for Armata on a one quarter lag regardless of the date of our investments as follows:

Balance Sheet Information


	September 30,
(In thousands)	2022		2021
Current assets	$	33,245	$	14,178
Noncurrent assets	$	59,636	$	28,493
Current liabilities	$	7,004	$	5,254
Noncurrent liabilities	$	40,300	$	13,662

Income Statement Information


	Twelve Months Ended						Nine Months Ended
	September 30,						September 30,
(In thousands)	2022			2021			2020
Revenue	$	5,446		$	3,989		$	319
Loss from operations	$	(32,666	)	$	(24,227	)	$	(15,134	)
Net loss	$	(32,650	)	$	(23,732	)	$	(15,557	)

Equity Method Investment in Entasis

Prior to the consolidation of Entasis’ financial position and results of operations in February 2022, we accounted for Entasis as an equity method investment. Refer to Note 5, “Consolidated Entities and Acquisitions”, for more information.

The summarized financial information, including the portion we did not own, is presented for Entasis on a one quarter lag regardless of the date of our investments as follows:

Balance Sheet Information


(In thousands)	September 30, 2021
Current assets	$	49,746
Noncurrent assets	$	1,020
Current liabilities	$	9,348
Noncurrent liabilities	$	183

Income Statement Information


	Twelve Months Ended September 30,			Six Months Ended September 30,
(In thousands)	2021			2020
Loss from operations	$	(52,323	)	$	(26,080	)
Net loss	$	(125,413	)	$	(24,529	)

Equity Investment in InCarda

During the third quarter of 2020, TRC purchased 20,469,432 shares of Series C preferred stock and a warrant to purchase 5,117,358 additional shares of Series C preferred stock of InCarda Therapeutics, Inc. (“InCarda”) (the “InCarda 2020 Warrant”) for $15.8 million, which included $0.8 million of transaction costs. InCarda is a privately held biopharmaceutical company focused on developing inhaled therapies for cardiovascular diseases. The investment is intended to fund the ongoing clinical development of InRhythmTM (flecainide for inhalation), InCarda’s lead program, for the treatment of a recent-onset episode of paroxysmal atrial fibrillation. On July 20, 2022, under the terms of the TRC Equity Purchase Agreement, TRC transferred to ITH all of TRC’s ownership interests and investments in InCarda. ITH has the right to designate one member to InCarda’s board of directors. As of December 31, 2022, one of InCarda’s eight board members was designated by ITH. The InCarda 2020 Warrant is exercisable immediately with an exercise price of $0.7328 per share. In September 2021, TRC and InCarda entered into an amendment to extend the expiration date of the InCarda 2020 Warrant from October 6, 2021 to March 31, 2022. On March 9, 2022, TRC and InCarda entered into an amendment to further extend the expiration date of the InCarda 2020 Warrant from March 31, 2022 to March 31, 2023. The InCarda 2020 Warrant is recorded at fair value and subject to remeasurement at each balance sheet date.

On March 9, 2022, TRC entered into a Note and Warrant Purchase Agreement (the “InCarda Agreement”) with InCarda to acquire a convertible promissory note (the “InCarda Convertible Note”) and warrants (the “InCarda 2022 Warrant”) for $0.7 million. The InCarda Convertible Note bears an annual interest rate of 6% and will convert into Series D preferred stock upon a qualified financing, non-qualified financing, or maturity conversion. A qualified financing is defined as the first issuance or series of related issuances by InCarda of its equity securities following March 9, 2022 from which InCarda receives immediately available gross proceeds of at least $10.0 million (excluding the aggregate amount of any notes converted into equity securities pursuant to the conversion of notes or any other debt securities converted into equity securities) (the “Qualified Financing Amount”). A non-qualified financing is defined as the first issuance or series of related issuances by InCarda of its equity securities following March 9, 2022 from which InCarda receives immediately available gross proceeds of less than the Qualified Financing Amount. The InCarda 2022 Warrant entitles TRC to purchase a number of shares of equity securities equal to 100% of the principal amount of the InCarda Convertible Note divided by the number of shares issued in InCarda’s next equity financing, which is defined as the earliest to occur of specific financing events, including capital raises through public offerings. The InCarda 2022 Warrant expires on March 9, 2027. The InCarda Convertible Note and InCarda 2022 Warrant are measured at fair value.

On June 15, 2022, the principal amount and the accrued interest of the InCarda Convertible Note were converted into equity securities. In addition, TRC participated in InCarda’s Series D preferred stock financing by investing $2.3 million. In connection with the new round of financing, InCarda recapitalized its equity structure resulting in TRC owning 4,093,886 shares of InCarda’s common

stock, 37,350 shares of its Series A-1 preferred stock, 20,469,432 shares of its Series C preferred stock, 8,771,780 shares of its Series D-1 preferred stock, 3,369,802 shares of its Series D-2 preferred stock, a warrant to purchase 5,117,358 shares of its Series C preferred stock at $0.73 per share and a warrant to purchase 2,490,033 shares of its Series D-1 preferred stock at $0.20 per share.

As of December 31, 2022 and 2021, we held 9.0% and 13.0% of InCarda equity ownership, respectively. Our investment in InCarda does not provide us with the ability to control or have significant influence over InCarda’s operations. Based on our evaluation, we determined that InCarda is a VIE, but we are not the primary beneficiary of the VIE. We have not provided financial or other support that we were not previously contractually required to provide during the periods presented. Our maximum exposure to loss is equal to the amount we invested in the entity.

We account for our investments in InCarda under the measurement alternative. Under the measurement alternative, the equity investment is initially recorded at its allocated cost, but the carrying value may be adjusted through earnings upon an impairment or when there is an observable price change involving the same or a similar investment with the same issuer. Due to InCarda’s equity recapitalization in the second quarter of 2022, TRC reassessed the value of its investments in InCarda using the Option Pricing Model Backsolve valuation methodology. Key assumptions used in the valuation model include an expected holding period of two years, a risk free interest rate of 3.2%, a dividend yield of 0.0% and an estimated volatility of 122.0%. The estimated volatility is calculated based on the historical volatility of a selected peer group of public companies comparable to InCarda. We recognized an impairment charge of $9.0 million as a result of the valuation. There was no impairment or other change to the value of our investments in InCarda as of December 31, 2021.

As of December 31, 2022, we recorded $6.8 million in fair value of InCarda’s Series C preferred stock and $0.6 million in fair value of Series C warrants and Series D warrants (the “InCarda Preferred Stock Warrants”). As of December 31, 2022, we recognized $3.2 million for InCarda’s Series D-1 preferred stock, Series D-2 preferred stock, and common stock using the measurement alternative. As of December 31, 2021, we recorded $0.4 million in fair value of the InCarda 2020 Warrant. As of December 31, 2021, we recognized $15.8 million for the investment in InCarda’s Series C preferred stock using the measurement alternative. We recorded $8.7 million and $0.7 million unrealized loss as changes in fair values of other equity and long-term investments, net, on the consolidated statements of income for the years ended December 31, 2022 and 2021, respectively.

Equity Investment in ImaginAb

On March 18, 2021, TRC entered into a securities purchase agreement with ImaginAb, Inc. (“ImaginAb”) to purchase 4,051,724 shares of ImaginAb Series C preferred stock for $4.7 million. On the same day, TRC also entered into a securities purchase agreement with one of ImaginAb’s common stockholders to purchase 4,097,157 shares of ImaginAb common stock for $1.3 million. ImaginAb is a privately held biotechnology company focused on clinically managing cancer and autoimmune diseases via molecular imaging. $0.4 million was incurred for investment due diligence costs and execution and recorded as part of the equity and long-term investment on the consolidated balance sheets.

On July 20, 2022, under the terms of the TRC Equity Purchase Agreement, TRC transferred to ITH all of TRC’s ownership interests and investments in ImaginAb. As of December 31, 2022, one of ImaginAb’s six board members is designated by ITH, and ITH held 12.7% of ImaginAb’s equity ownership. As of December 31, 2021, TRC held 14.5% of ImaginAb equity ownership.

Our investment in ImaginAb does not provide us with the ability to control or have significant influence over ImaginAb’s operations. Based on our evaluation, we determined that ImaginAb is a VIE, but we are not the primary beneficiary of the VIE. We have not provided financial or other support that we were not previously contractually required to provide during the periods presented. Our maximum exposure to loss is equal to the amount we invested in the entity.

Because ImaginAb’s equity securities are not publicly traded and do not have a readily determinable fair value, we account for our investment in ImaginAb’s Series C preferred stock and common stock using the measurement alternative. Under the measurement alternative, the equity investment is initially recorded at its allocated cost, but the carrying value may be adjusted through earnings upon an impairment or when there is an observable price change involving the same or a similar investment with the same issuer. As of December 31, 2022 and 2021, $6.4 million was recorded as equity and long-term investments on the consolidated balance sheets and there was no change to the fair value of our investment in ImaginAb.

Convertible Promissory Note in Gate Neurosciences

On November 24, 2021, TRC entered into a Convertible Promissory Note Purchase Agreement with Gate Neurosciences, Inc. (“Gate”) to acquire a convertible promissory note (the “Convertible Note”) with a principal amount of $15.0 million. Gate is a privately held biopharmaceutical company focused on developing the next generation of targeted nervous system therapies, leveraging precision medicine approaches to develop breakthrough drugs for psychiatric and neurologic diseases. The investment is intended to fund its ongoing development and research. The Convertible Note bears an annual interest rate of 8% and will convert into common stock shares upon a qualified event or into shares of shadow preferred stock (“Shadow Preferred”) upon a qualified financing. A qualifying event can be a qualified initial price offering, a qualified merger, or a merger with a special-purpose acquisition company (“SPAC”). Shadow Preferred means preferred stock having identical rights, preferences and restrictions as the preferred stock that would be issued in a qualified financing.

The number of common stock shares to be issued in a qualified event shall be equal to the amount due on the conversion date divided by the lesser of a capped conversion price (the “Capped Conversion Price”) and the qualified event price (the “Qualified Event Price”). The Capped Conversion Price is calculated as $50.0 million divided by the number of common stock outstanding at such time on a fully diluted basis. The Qualified Event Price is the price per share determined by the qualified event. A qualified financing is a sale or series of sales of preferred stock where (i) at least 50 percent of counterparties are not existing shareholders, (ii) net proceeds to Gate are at least $35.0 million, and (iii) the stated or implied equity valuation of Gate is at least $80.0 million.

On July 20, 2022, under the terms of the TRC Equity Purchase Agreement, TRC transferred to ITH its debt investment in Gate. We have accounted for the Gate Convertible Note as a trading security, measured at fair value using a Monte Carlo simulation model with the probability of certain qualified events and the assumptions of equity value of Gate, risk-free rate, expected stock price, volatility of its peer companies, and the time until a financing is raised. As of December 31, 2022 and 2021, the fair value of the Gate Convertible Note was estimated at $15.7 million and $15.1 million, respectively, and recorded as equity and long-term investments on the consolidated balance sheets. We recorded $0.6 million of unrealized gain and $0.8 million of unrealized loss as changes in fair values of other equity and long-term investments, net, on the consolidated statements of income for the years ended December 31, 2022 and 2021, respectively.

Equity Investment in Nanolive

On February 18, 2022, TRC entered into an investment and shareholders agreement with Nanolive SA (“Nanolive”) to purchase 18,750,000 shares of Nanolive Series C preferred stock for $9.8 million (equivalent to 9.0 million CHF). Nanolive SA is a Swiss privately held life sciences company focused on developing breakthrough imaging solutions that accelerate research in growth industries such as drug discovery and cell therapy. $0.7 million was incurred for investment due diligence costs and execution and recorded as part of the equity and long-term investment on the consolidated balance sheets. On July 20, 2022, under the terms of the TRC Equity Purchase Agreement, TRC transferred to ITH all of TRC’s ownership interests and investments in Nanolive. ITH has the right to designate one member to Nanolive’s board. ITH also has the right to designate another member, who will be mutually acceptable to ITH and another majority common stockholder, to Nanolive’s board. As of December 31, 2022, one of Innoviva designees is serving on Nanolive’s seven-member board. As of December 31, 2022, we held 15.5% of Nanolive equity ownership.

Our investment in Nanolive does not provide us with the ability to control or have significant influence over Nanolive’s operations. Based on our evaluation, we determined that Nanolive is a VIE, but we are not the primary beneficiary of the VIE. We have not provided financial or other support that we were not previously contractually required to provide during the periods presented. Our maximum exposure to loss is equal to the amount we invested in the entity.

Because Nanolive’s equity securities are not publicly traded and do not have a readily determinable fair value, we account for our investment in Nanolive’s Series C preferred stock using the measurement alternative. As of December 31, 2022, $10.6 million was recorded as equity and long-term investments on the consolidated balance sheets and there was no change to the fair value of our investment.

Available-for-Sale Securities

The estimated fair value of available-for-sale securities is based on quoted market prices for these or similar investments that were based on prices obtained from a commercial pricing service. Available-for-sale securities are summarized below:


	December 31, 2022
			Gross		Gross
	Amortized		Unrealized		Unrealized		Estimated
(In thousands)	Cost		Gains		Losses		Fair Value
Money market funds(1)	$	263,469	$	—	$	—	$	263,469
Total	$	263,469	$	—	$	—	$	263,469

(1)

Money market funds are included in cash and cash equivalents on the consolidated balance sheets.


	December 31, 2021
			Gross		Gross
	Amortized		Unrealized		Unrealized		Estimated
(In thousands)	Cost		Gains		Losses		Fair Value
Money market funds(1)	$	145,132	$	—	$	—	$	145,132
Total	$	145,132	$	—	$	—	$	145,132

(1)

Money market funds are included in cash and cash equivalents on the consolidated balance sheets.

As of December 31, 2022, all investments were money market funds, and there was no credit loss recognized.

Fair Value Measurements

Our available-for-sale securities, equity and long-term investments are measured at fair value on a recurring basis and our debt is carried at amortized cost basis. The estimated fair values were as follows:


	Estimated Fair Value Measurements as of December 31, 2022 Using:
	Quoted Price in Active Markets for		Significant Other		Significant
	Identical		Observable		Unobservable
Types of Instruments	Assets		Inputs		Inputs
(In thousands)	Level 1		Level 2		Level 3		Total
Assets
Money market funds	$	263,469	$	—	$	—	$	263,469
Investments held by ISP Fund LP (1)		265,982		—		54,578		320,560
Equity investment - Armata Common Stock		31,095		—		—		31,095
Equity investment - Armata Warrants		—		8,059		—		8,059
Equity investment - InCarda Warrants		—		—		605		605
Convertible debt investment - Gate Note		—		—		15,700		15,700
Total assets measured at estimated fair value	$	560,546	$	8,059	$	70,883	$	639,488
Liabilities
Debt
2023 Notes	$	—	$	96,089	$	—	$	96,089
2025 Notes		—		197,807		—		197,807
2028 Notes		—		211,768		—		211,768
Total fair value of debt	$	—	$	505,664	$	—	$	505,664
Contingent value rights		—		—		595		595
Total liabilities at estimated fair value	$	—	$	505,664	$	595	$	506,259

(1)

The investments held by ISP Fund LP, consisted of $295.4 million in equity investments, which included private placement positions and convertible notes of $54.6 million, and $25.1 million in money market funds. Our total capital contribution of $300.0 million is subject to a 36-month lock-up period from the date of such capital contributions.


	Estimated Fair Value Measurements as of December 31, 2021 Using:
	Quoted Price
	in Active		Significant
	Markets for		Other		Significant
	Identical		Observable		Unobservable
Types of Instruments	Assets		Inputs		Inputs
(In thousands)	Level 1		Level 2		Level 3		Total
Assets
Money market funds	$	145,132	$	—	$	—	$	145,132
Investments held by ISP Fund LP (1)		193,677		—		2,068		195,745
Equity investment - Armata Common Stock		88,101		—		—		88,101
Equity investment - Armata Warrants		—		58,595		—		58,595
Equity investment - Entasis Common Stock		62,794		—		—		62,794
Equity investment - Entasis Warrants		—		40,914		—		40,914
Equity investment - InCarda Warrants		—		—		411		411
Convertible debt investment - Gate Note		—		—		15,100		15,100
Total assets measured at estimated fair value	$	489,704	$	99,509	$	17,579	$	606,792
Debt
2023 Notes	$	—	$	261,769	$	—	$	261,769
2025 Notes		—		234,498		—		234,498
Total fair value of debt	$	—	$	496,267	$	—	$	496,267

(1)

The investments held by ISP Fund LP, consisted of $192.2 million equity investments and $3.5 million money market funds, are subject to a 36-month lock-up period from our initial contribution date, December 11, 2020.

The fair values of our equity investments in Armata’s and Entasis’s common stock and public traded investments held by ISP Fund LP are based on the quoted prices in active markets and are classified as Level 1 financial instruments. The fair values of the warrants of Armata and Entasis classified within Level 2 are based upon observable inputs that may include benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers and reference data including market research publications.

InCarda’s equity securities, Gate's convertible note, private placement positions and convertible notes held by ISP Fund LP, and contingent value rights are classified as Level 3 financial instruments as these securities are not publicly traded and the assumptions used in the valuation model for valuing these securities are based on significant unobservable and observable inputs including those of publicly traded peer companies.

The fair values of our 2023 Notes, 2025 Notes and 2028 Notes are based on recent trading prices of the respective instruments.

GOODWILL AND INTANGIBLE ASSETS (Additional Information) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020	Aug. 22, 2022
Goodwill [Line Items]
Goodwill	$ 26,713	$ 0
Intangible Assets Abstract
Amortization expense	5,581	$ 0	$ 0
In-process research and development \| Collaboration agreement
Intangible Assets Abstract
Amortization expense	0
La Jolla Pharmaceutical Company
Goodwill [Line Items]
Goodwill				$ 16,453
Future amortization expense, 2023	15,400
Future amortization expense, 2024	15,400
Future amortization expense, 2025	15,400
Future amortization expense, 2026	15,400
Future amortization expense, thereafter	68,200
Intangible Assets Abstract
Intangible assets	151,000			$ 151,000
Entasis
Intangible Assets Abstract
Intangible assets	107,500
Entasis \| Collaboration agreement
Intangible Assets Abstract
Intangible assets	35,400
Entasis \| In-process research and development
Intangible Assets Abstract
Intangible assets	$ 72,100

INCOME TAXES - Income tax expense (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Current
Federal	$ 40,822	$ 0	$ 0
State	464	7	11
Total current	41,286	7	11
Deferred
Federal	26,026	70,893	60,408
State	(625)	5,539	12
Total deferred	25,401	76,432	60,420
Income tax expense (benefit), net	$ 66,687	$ 76,439	$ 60,431

- Definition

Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.

+ References + Details

STOCK-BASED COMPENSATION - Valuation Assumptions (Details) - Stock options - Weighted-average - $ / shares	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Valuation Assumptions
Risk-free interest rate	3.60%	1.10%	0.40%
Expected term (in years)	6 years 14 days	6 years 1 month 9 days	6 years 1 month 9 days
Volatility	38.60%	44.90%	46.90%
Dividend yield	0.00%	0.00%	0.00%
Weighted-average estimated fair value of shares granted (in dollars per share)	$ 6.43	$ 5.84	$ 6.28

SUBSEQUENT EVENTS - Additional Information (Details) - Subsequent Event - USD ($) $ in Millions	Jan. 10, 2023	Feb. 02, 2023
Armata \| Secured Convertible Credit Agreement
Subsequent Event [Line Items]
Term loan facility in aggregate amount	$ 30.0
Debt instrument, term	1 year
Debt Instrument, annual interest rate	8.00%
Note Amendment Agreement
Subsequent Event [Line Items]
New principal amount convertible note		$ 15.0
Note Amendment Agreement \| New Principal Amount
Subsequent Event [Line Items]
New principal amount convertible note		$ 21.5

EQUITY AND LONG-TERM INVESTMENTS AND FAIR VALUE MEASUREMENTS (Tables)

12 Months Ended

Dec. 31, 2022

FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS

Schedule of amortized cost and estimated fair values for available-for-sale securities


	December 31, 2022
			Gross		Gross
	Amortized		Unrealized		Unrealized		Estimated
(In thousands)	Cost		Gains		Losses		Fair Value
Money market funds(1)	$	263,469	$	—	$	—	$	263,469
Total	$	263,469	$	—	$	—	$	263,469

(1)

Money market funds are included in cash and cash equivalents on the consolidated balance sheets.


	December 31, 2021
			Gross		Gross
	Amortized		Unrealized		Unrealized		Estimated
(In thousands)	Cost		Gains		Losses		Fair Value
Money market funds(1)	$	145,132	$	—	$	—	$	145,132
Total	$	145,132	$	—	$	—	$	145,132

(1)

Money market funds are included in cash and cash equivalents on the consolidated balance sheets.

Schedule of available-for-sale securities measured at fair value on a recurring basis


	Estimated Fair Value Measurements as of December 31, 2022 Using:
	Quoted Price in Active Markets for		Significant Other		Significant
	Identical		Observable		Unobservable
Types of Instruments	Assets		Inputs		Inputs
(In thousands)	Level 1		Level 2		Level 3		Total
Assets
Money market funds	$	263,469	$	—	$	—	$	263,469
Investments held by ISP Fund LP (1)		265,982		—		54,578		320,560
Equity investment - Armata Common Stock		31,095		—		—		31,095
Equity investment - Armata Warrants		—		8,059		—		8,059
Equity investment - InCarda Warrants		—		—		605		605
Convertible debt investment - Gate Note		—		—		15,700		15,700
Total assets measured at estimated fair value	$	560,546	$	8,059	$	70,883	$	639,488
Liabilities
Debt
2023 Notes	$	—	$	96,089	$	—	$	96,089
2025 Notes		—		197,807		—		197,807
2028 Notes		—		211,768		—		211,768
Total fair value of debt	$	—	$	505,664	$	—	$	505,664
Contingent value rights		—		—		595		595
Total liabilities at estimated fair value	$	—	$	505,664	$	595	$	506,259

(1)


	Estimated Fair Value Measurements as of December 31, 2021 Using:
	Quoted Price
	in Active		Significant
	Markets for		Other		Significant
	Identical		Observable		Unobservable
Types of Instruments	Assets		Inputs		Inputs
(In thousands)	Level 1		Level 2		Level 3		Total
Assets
Money market funds	$	145,132	$	—	$	—	$	145,132
Investments held by ISP Fund LP (1)		193,677		—		2,068		195,745
Equity investment - Armata Common Stock		88,101		—		—		88,101
Equity investment - Armata Warrants		—		58,595		—		58,595
Equity investment - Entasis Common Stock		62,794		—		—		62,794
Equity investment - Entasis Warrants		—		40,914		—		40,914
Equity investment - InCarda Warrants		—		—		411		411
Convertible debt investment - Gate Note		—		—		15,100		15,100
Total assets measured at estimated fair value	$	489,704	$	99,509	$	17,579	$	606,792
Debt
2023 Notes	$	—	$	261,769	$	—	$	261,769
2025 Notes		—		234,498		—		234,498
Total fair value of debt	$	—	$	496,267	$	—	$	496,267

(1)

Armata

FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS

Schedule of Balance Sheets and Income Statements of VIE

The summarized financial information, including the portion we do not own, is presented for Armata on a one quarter lag regardless of the date of our investments as follows:

Balance Sheet Information


	September 30,
(In thousands)	2022		2021
Current assets	$	33,245	$	14,178
Noncurrent assets	$	59,636	$	28,493
Current liabilities	$	7,004	$	5,254
Noncurrent liabilities	$	40,300	$	13,662

Income Statement Information


	Twelve Months Ended						Nine Months Ended
	September 30,						September 30,
(In thousands)	2022			2021			2020
Revenue	$	5,446		$	3,989		$	319
Loss from operations	$	(32,666	)	$	(24,227	)	$	(15,134	)
Net loss	$	(32,650	)	$	(23,732	)	$	(15,557	)

Entasis

FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS

Schedule of Balance Sheets and Income Statements of VIE

The summarized financial information, including the portion we did not own, is presented for Entasis on a one quarter lag regardless of the date of our investments as follows:

Balance Sheet Information


(In thousands)	September 30, 2021
Current assets	$	49,746
Noncurrent assets	$	1,020
Current liabilities	$	9,348
Noncurrent liabilities	$	183

Income Statement Information


	Twelve Months Ended September 30,			Six Months Ended September 30,
(In thousands)	2021			2020
Loss from operations	$	(52,323	)	$	(26,080	)
Net loss	$	(125,413	)	$	(24,529	)

- Definition

Tabular disclosure of financial instruments measured at fair value, including those classified in shareholders' equity measured on a recurring or nonrecurring basis. Disclosures include, but are not limited to, fair value measurements recorded and the reasons for the measurements, level within the fair value hierarchy in which the fair value measurements are categorized and transfers between levels 1 and 2. Nonrecurring fair value measurements are those that are required or permitted in the statement of financial position in particular circumstances.

+ References + Details

- Definition

Tabular disclosure of the significant judgments and assumptions made in determining whether a variable interest (as defined) held by the entity requires the variable interest entity (VIE) (as defined) to be consolidated and (or) disclose information about its involvement with the VIE, individually or in aggregate (as applicable); the nature of restrictions, if any, on the consolidated VIE's assets and on the settlement of its liabilities reported by an entity in its statement of financial position, including the carrying amounts of such assets and liabilities; the nature of, and changes in, the risks associated with involvement in the VIE; how involvement with the VIE affects the entity's financial position, financial performance, and cash flows; the lack of recourse if creditors (or beneficial interest holders) of the consolidated VIE have no recourse to the general credit of the primary beneficiary (if applicable); the terms of arrangements, giving consideration to both explicit arrangements and implicit variable interests, if any, that could require the entity to provide financial support to the VIE, including events or circumstances that could expose the entity to a loss; the methodology used by the entity for determining whether or not it is the primary beneficiary of the variable interest entity; the significant factors considered and judgments made in determining that the power to direct the activities of a VIE that most significantly impact the VIE's economic performance are shared (as defined); the carrying amounts and classification of assets and liabilities of the VIE included in the statement of financial position; the entity's maximum exposure to loss, if any, as a result of its involvement with the VIE, including how the maximum exposure is determined and significant sources of the entity's exposure to the VIE; a comparison of the carrying amounts of the assets and liabilities and the entity's maximum exposure to loss; information about any liquidity arrangements, guarantees, and (or) other commitments by third parties that may affect the fair value or risk of the entity's variable interest in the VIE; whether or not the entity has provided financial support or other support (explicitly or implicitly) to the VIE that it was not previously contractually required to provide or whether the entity intends to provide that support, including the type and amount of the support and the primary reasons for providing the support; and supplemental information the entity determines necessary to provide.

+ References + Details

NET INCOME PER SHARE (Details) - 2025 Notes - Convertible senior notes - $ / shares	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020	Aug. 07, 2017
Debt Instrument [Line Items]
Dilutive effect of the assumed conversion premium		0	0
Dilutive EPS of note	$ 0.31
Common stock
Debt Instrument [Line Items]
Conversion price (dollars per share)	$ 17.26			$ 17.26

EQUITY AND LONG-TERM INVESTMENTS AND FAIR VALUE MEASUREMENTS - Summarized Financial Data (Details) - USD ($) $ in Thousands	6 Months Ended	9 Months Ended	12 Months Ended
	Sep. 30, 2020	Sep. 30, 2020	Dec. 31, 2022	Sep. 30, 2022	Dec. 31, 2021	Sep. 30, 2021	Dec. 31, 2020
Balance Sheet Information
Current assets			$ 443,511		$ 313,673
Current liabilities			134,968		5,807
Income Statement Information
Total revenue			331,339		391,866		$ 336,794
Net loss			$ 220,262		$ 368,837		$ 293,814
Armata
Balance Sheet Information
Current assets				$ 33,245		$ 14,178
Noncurrent assets				59,636		28,493
Current liabilities				7,004		5,254
Noncurrent liabilities				40,300		13,662
Income Statement Information
Total revenue		$ 319		5,446		3,989
Loss from operations		(15,134)		(32,666)		(24,227)
Net loss		$ (15,557)		$ (32,650)		(23,732)
Entasis
Balance Sheet Information
Current assets						49,746
Noncurrent assets						1,020
Current liabilities						9,348
Noncurrent liabilities						183
Income Statement Information
Loss from operations	$ (26,080)					(52,323)
Net loss	$ (24,529)					$ (125,413)

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Cash flows from operating activities
Net income	$ 220,262	$ 368,837	$ 293,814
Adjustments to reconcile net income to net cash provided by operating activities:
Deferred income taxes	25,006	76,432	60,420
Amortization of capitalized fees and depreciation of property and equipment	13,931	13,832	13,840
Amortization of acquired intangible assets	5,581	0	0
Fair value adjustments included in cost of product sales	10,023	0	0
Stock-based compensation	7,347	2,017	1,698
Amortization of debt discount and issuance costs	2,055	9,136	8,397
Changes in fair values of equity method investments, net	161,749	(84,392)	(49,511)
Changes in fair values of other equity and long-term investments, net	(8,462)	(4,917)	(766)
Loss on extinguishment of debt	20,662	0	0
Net gain on sale of TRC	(266,696)	0	0
Amortization of discount on short-term investments	0	0	(343)
Amortization of lease guarantee	0	0	(135)
Other non-cash items	3,402	(259)	21
Changes in operating assets and liabilities:
Accounts receivable	(3,525)	0	0
Receivables from collaborative arrangements	13,319	(16,780)	(14,504)
Inventory	280	0	0
Prepaid expenses	(21,350)	203	(678)
Other assets	(3,341)	0	0
Accounts payable	92	(39)	56
Accrued personnel-related expenses and other accrued liabilities	11,913	(257)	804
Accrued interest payable	207	0	0
Deferred revenue	(755)	0	0
Income tax payable	10,026	0	0
Net cash provided by operating activities	201,726	363,813	313,113
Cash flows from investing activities
Maturities of marketable securities	0	0	86,000
Purchases of marketable securities	0	0	(12,943)
Purchases of equity and long term investments	(58,725)	(66,278)	(87,981)
Purchases of equity investments managed by ISP Fund LP	(60,910)	(190,970)	(14,877)
Purchases of trading security managed by ISP Fund LP	(50,000)	0	0
Sales of equity investments managed by ISP Fund LP	24,281	21,440	0
Purchase and sales of other investments managed by ISP Fund LP, net	(23,371)	279,530	(285,123)
Purchases of property and equipment	(67)	0	(13)
Proceeds from sale of ownership interest in TRC, net	248,191	0	0
Cash acquired through the consolidation of Entasis	23,070	0	0
Cash paid for the acquisition of La Jolla, net of cash acquired	(159,103)	0	0
Net cash provided by (used in) investing activities	(56,634)	43,722	(314,937)
Cash flows from financing activities
Distributions to noncontrolling interest	(69,811)	(59,457)	(30,474)
Purchase of Entasis noncontrolling interest	(43,910)	0	0
Repurchase of common stock	(8,503)	(394,149)	0
Repurchase of shares to satisfy tax withholding	(82)	(60)	(92)
Proceeds from issuances of common stock	370	1,169	436
Net proceeds from the issuance of variable interest entity's equity	0	0	345
Payment for repurchase of convertible subordinated notes due 2023	(165,131)	0	0
Purchases of capped call options associated with convertible senior notes due 2028	(21,037)	0	0
Proceeds from issuance of convertible senior notes due 2028, net of issuance costs	252,536	0	0
Net cash used in financing activities	(55,568)	(452,497)	(29,785)
Net increase (decrease) in cash and cash equivalents	89,524	(44,962)	(31,609)
Cash and cash equivalents at beginning of period	201,525	246,487	278,096
Cash and cash equivalents at end of period	291,049	201,525	246,487
Supplemental disclosure of cash flow information:
Cash paid for interest	11,736	9,933	9,933
Cash paid for income taxes	53,855	0	0
Supplemental Disclosure of Non-cash Investing and Financing Activities:
Adoption of ASU 2020-06	$ (28,228)	$ 0	$ 0

STOCK-BASED COMPENSATION - Compensation Awards (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Stock options
Number of outstanding options
Balance at the beginning of the period (in shares)	766,000
Granted (in shares)	492,000
Exercised (in shares)	(15,000)
Released RSUs/RSAs (in shares)	0
Forfeited (in shares)	(295,000)
Balance at the end of the period (in shares)	948,000	766,000
Vested and expected to vest at the end of the period (in shares)	948,000
Weighted-Average Exercise Price of Outstanding Options
Balance at the beginning of the period (in dollars per share)	$ 20.79
Granted (in dollars per share)	14.92
Exercised (in dollars per share)	17.11
Released RSUs/RSAs (in shares)	0
Forfeited (in dollars per share)	28.01
Balance at the end of the period (in dollars per share)	15.56	$ 20.79
Vested and expected to vest at the end of the period (in dollars per shares)	$ 15.56
Additional disclosures
Aggregate intrinsic value of options outstanding	$ 0	$ 1,300
Aggregate intrinsic value of options exercisable	$ 0
Exercisable option	290
Weighted average remaining contractual term of options exercisable	8 years 3 days	4 years 5 months 4 days
Total intrinsic value of options exercised	$ 0	$ 200	$ 100
Total estimated fair value of options vested	$ 0	$ 600	$ 0
RSUs
Number of outstanding RSUs and PSUs/RSAs and PSAs
Balance at the beginning of the period (in shares)	116,000
Granted (in shares)	676,000
Exercised (in shares)	0
Released RSUs and RSAs (in shares)	(233,000)
Forfeited (in shares)	(41,000)
Balance at the end of the period (in shares)	518,000	116,000
Vested and expected to vest at the end of the period (in shares)	518,000
Weighted-Average Fair Value per Share at Grant
Balance at the beginning of the period (in dollars per share)	$ 12.82
Granted (in dollars per share)	11.06
Exercised (in dollars per share)	0
Released RSUs and RSAs (in dollars per share)	9.90
Forfeited (in dollars per share)	8.80
Balance at the end of the period (in dollars per share)	12.16	$ 12.82
Vested and expected to vest at the end of the period (in dollars per share)	$ 12.16
RSAs
Number of outstanding RSUs and PSUs/RSAs and PSAs
Balance at the beginning of the period (in shares)	29,000
Granted (in shares)	15,000
Exercised (in shares)	0
Released RSUs and RSAs (in shares)	(14,000)
Forfeited (in shares)	0
Balance at the end of the period (in shares)	30,000	29,000
Vested and expected to vest at the end of the period (in shares)	0
Weighted-Average Fair Value per Share at Grant
Balance at the beginning of the period (in dollars per share)	$ 13.35
Granted (in dollars per share)	16.67
Exercised (in dollars per share)	0
Released RSUs and RSAs (in dollars per share)	13.51
Forfeited (in dollars per share)	0
Balance at the end of the period (in dollars per share)	14.97	$ 13.35
Vested and expected to vest at the end of the period (in dollars per share)	$ 0

CONSOLIDATED ENTITIES AND ACQUISITIONS (Tables)

12 Months Ended

Dec. 31, 2022

Consolidated Entities and Acquisitions [Line Items]

Pro Forma Information


	Year Ended December 31,
(In thousands)	2022		2021
Revenue	$	357,880	$	435,398
Net income	$	204,987	$	281,719
Net income attributable to Innoviva stockholders	$	214,390	$	197,535

Entasis Therapeutics Holdings Inc

Consolidated Entities and Acquisitions [Line Items]

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed

The following table represents the adjusted fair values of the assets acquired and liabilities assumed by us in the transaction:


(In thousands)	February 17, 2022
Cash and cash equivalents	$	23,070
Prepaid expenses		5,554
Other current assets		1,959
Property and equipment, net		185
Right-of-use assets		959
Goodwill		10,260
Intangible assets		107,500
Other assets		302
Total assets acquired	$	149,789

Accounts payable	$	1,583
Accrued personnel-related expenses		1,058
Other accrued liabilities		5,096
Deferred tax liabilities		7,336
Total liabilities assumed	$	15,073

Total assets acquired, net	$	134,716

La Jolla Pharmaceutical Company

Consolidated Entities and Acquisitions [Line Items]

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed

The following table summarizes the adjusted allocation of the fair values assigned to the assets acquired and liabilities assumed as of the date of the acquisition:


(In thousands)	August 22, 2022
Cash and cash equivalents	$	47,415
Short-term marketable securities		471
Accounts receivable		5,876
Inventory		66,200
Prepaid expenses		1,261
Other current assets		907
Property and equipment, net		13
Right-of-use assets		226
Goodwill		16,453
Intangible assets		151,000
Other assets		710
Total assets acquired	$	290,532

Accounts payable	$	1,237
Deferred revenue		2,849
Other accrued liabilities		11,362
Other long-term liabilities		65,944
Deferred tax liabilities		2,581
Total liabilities assumed	$	83,973

Total assets acquired, net	$	206,559

Theravance Respiratory Company, LLC

Consolidated Entities and Acquisitions [Line Items]

Schedule of Balance Sheets and Income Statements of VIE

The summarized financial information for TRC as of December 31, 2021 and for the relevant periods through the sale date in 2022 are presented as follows:

Balance sheet


(In thousands)	December 31, 2021
Assets
Cash and cash equivalents	$	50,713
Receivables from collaborative arrangements		42,492
Prepaid expenses and other current assets		71
Equity and long-term investments		37,695
Total assets	$	130,971

Liabilities and LLC Members’ Equity
Current liabilities	$	252
LLC members’ equity		130,719
Total liabilities and LLC members’ equity	$	130,971

Income statements


	Year Ended December 31,
(In thousands)	2022 (1)			2021			2020
Royalty revenue	$	72,029		$	126,688		$	73,089
Revenue from collaborative arrangements		—			—			10,000
Total net revenue		72,029			126,688			83,089
Operating expenses		332			3,956			2,612
Income from operations		71,697			122,732			80,477
Other income, net		10			—			38
Realized loss		(39,386	)		—			—
Income tax expense, net		1			—			—
Changes in fair values of other equity and long-term investments		(8,884	)		(1,541	)		1,147
Net income	$	23,438		$	121,191		$	81,662

(1) The year ended December 31, 2022 represents the period from January 1, 2022 to July 20, 2022, the date of the sale of our ownership interest in TRC.

- Definition

+ References + Details

COMMITMENTS AND CONTINGENCIES - Additional Information (Details) - ft²	12 Months Ended
	Dec. 31, 2022	Nov. 30, 2019
Lessee, Lease, Description [Line Items]
Operating lease, Weighted average remaining lease term	2 years 9 months 18 days
Operating lease, weighted average incremental borrowing rate	7.50%
Burlingame, California
Lessee, Lease, Description [Line Items]
Rentable square feet		2,111
Lease term		36 months
Waltham Massachusetts Member
Lessee, Lease, Description [Line Items]
Lease space	20,062

CONSOLIDATED ENTITIES AND ACQUISITIONS - Schedule of Recognized Identified Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Aug. 22, 2022	Feb. 17, 2022	Dec. 31, 2021
Business Acquisition [Line Items]
Goodwill	$ 26,713			$ 0
La Jolla Pharmaceutical Company
Business Acquisition [Line Items]
Cash and cash equivalents		$ 47,415
Short-term marketable securities		471
Accounts receivable		5,876
Inventory		66,200
Prepaid expenses		1,261
Other current assets		907
Property and equipment, net		13
Right-of-use assets		226
Goodwill		16,453
Intangible assets	$ 151,000	151,000
Other assets		710
'Total assets acquired		290,532
Accounts payable		1,237
Deferred revenue		2,849
Deferred tax liabilities		2,581
Other accrued liabilities		11,362
Other long-term liabilities		65,944
Total liabilities assumed		83,973
Total assets acquired, net		$ 206,559
Entasis Therapeutics Holdings Inc
Business Acquisition [Line Items]
Cash and cash equivalents			$ 23,070
Prepaid expenses			5,554
Other current assets			1,959
Property and equipment, net			185
Right-of-use assets			959
Goodwill			10,260
Intangible assets			107,500
Other assets			302
'Total assets acquired			149,789
Accounts payable			1,583
Accrued personnel-related expenses			1,058
Deferred tax liabilities			7,336
Other accrued liabilities			5,096
Total liabilities assumed			15,073
Total assets acquired, net			$ 134,716

BALANCE SHEET COMPONENTS (Tables)

12 Months Ended

Dec. 31, 2022

Balance Sheet Related Disclosures [Abstract]

Schedule of Inventory, net

Inventory consisted of the following:


(In thousands)	December 31, 2022
Raw materials	$	5,757
Work-in-process		25,052
Finished goods		25,088
Total inventory	$	55,897

Schedule of Other Accrued Liabilities

Other accrued liabilities consisted of the following:


	December 31,
(In thousands)	2022		2021
Accrued contract manufacturing expenses	$	8,382	$	—
Accrued clinical expenses		692		—
Accrued research expenses		349		—
Accrued professional services		3,977		894
Current portion of lease liabilities		1,316		106
Current portion of deferred royalty obligation		2,639		—
Accrued license fees and royalties		943		—
Other		2,909		9
Total other accrued liabilities	$	21,207	$	1,009

Schedule of Other Long-term Liabilities

Other long-term liabilities consisted of the following:


(In thousands)	December 31, 2022
Long-term portion of deferred royalty obligation	$	67,947
Long-term portion of lease liabilities		2,376
Contingent value rights liability		595
Total other long-term liabilities	$	70,918

STOCK-BASED COMPENSATION - 2012 Plan and ESPP (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2022 USD ($) Item shares
2012 Equity Incentive Plan
Stock-based compensation
Shares remaining available for issuance	3,838,270
ESPP
Stock-based compensation
Purchase price as a percentage of fair market value of stock	85.00%
Total duration of consecutive and overlapping offering periods	24 months
Number of offering periods \| Item	4
Duration of purchase period	6 months
Maximum contributions as a percentage of employee's eligible compensation	15.00%
Maximum number of shares an employee may purchase during any purchase period	2,500
Maximum value of shares an employee may purchase in a calendar year \| $	$ 25,000
Shares remaining available for issuance	160,995

STOCKHOLDERS' EQUITY

12 Months Ended

Dec. 31, 2022

Equity [Abstract]

STOCKHOLDERS' EQUITY

11. Stockholders’ Equity

On October 31, 2022, our board of directors authorized a new share repurchase program under which we may repurchase up to $100.0 million of our outstanding shares of common stock. The timing and amount of any share repurchases under the share repurchase program will be determined by our management in its discretion based on ongoing assessments of the capital needs of the business, the market price of our common stock, prevailing stock prices, general market conditions and other considerations. Share repurchases under the program may be made through a variety of methods, which may include open market purchases, privately negotiated transactions, in block trades, accelerated share repurchase transactions, exchange transactions, or any combination thereof or by other means in accordance with federal securities laws. This program has no termination date, may be suspended or discontinued at any time at our discretion, and does not obligate us to acquire any amount of common stock. As of December 31, 2022, we have repurchased 647,394 shares in the open market at an average price of $13.13 per share for a total amount of approximately $8.5 million. Subsequent to December 31, 2022 and through February 24, 2023, we have repurchased 1,522,947 shares in the open market at an average price of $12.63 per share for a total amount of approximately $19.2 million. All the repurchased shares were retired.

- Definition

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-URI https://asc.fasb.org/topic&trid=2208762

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496158-112644

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 13
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496158-112644

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 14
-Subparagraph (c)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496171-112644

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 14
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496171-112644

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.3-04)
-URI https://asc.fasb.org/extlink&oid=120397183&loc=d3e187085-122770

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 18
-Subparagraph (d)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496189-112644

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (g)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496158-112644

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 18
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496189-112644

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (h)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496158-112644

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 14
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496171-112644

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 18
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496189-112644

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 16
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496180-112644

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (i)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496158-112644

Reference 15: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(e)(1))
-URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

Reference 16: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 40
-Section 50
-Paragraph 6
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126731327&loc=SL126733271-114008

+ Details

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Current assets:
Cash and cash equivalents	$ 291,049	$ 201,525
Accounts receivable	9,401	0
Receivables from collaboration arrangements	54,672	110,711
Inventory	55,897	0
Prepaid expenses	29,559	1,367
Other current assets	2,933	70
Total current assets	443,511	313,673
Property and equipment, net	170	12
Equity and long-term investments	403,013	483,845
Capitalized fees paid, net	97,607	111,430
Right-of-use assets	3,265	97
Goodwill	26,713	0
Intangible assets	252,919	0
Deferred tax assets, net	0	17,327
Other assets	4,299	11
Total assets	1,231,497	926,395
Current liabilities:
Accounts payable	2,939	27
Accrued personnel-related expenses	8,022	619
Accrued interest payable	4,359	4,152
Deferred revenue	2,094	0
Convertible subordinated notes due 2023, net of issuance costs	96,193	0
Income tax payable	154	0
Other accrued liabilities	21,207	1,009
Total current liabilities	134,968	5,807
Long-term debt, net of discount and issuance costs	444,180	394,653
Other long-term liabilities	70,918	0
Deferred tax liabilities, net	5,771	0
Income tax payable, long-term	9,872	0
Commitments and contingencies (Note 13)
Stockholders' equity:
Preferred stock: $0.01 par value, 230 shares authorized, no shares issued and outstanding	0	0
Common stock: $0.01 par value, 200,000 shares authorized, 69,188 and 69,566 issued and outstanding as of December 31, 2022 and December 31, 2021 respectively	692	696
Treasury stock: at cost, 32,005 shares as of December 31, 2022 and December 31, 2021	(393,829)	(393,829)
Additional paid-in capital	1,163,836	1,264,024
Accumulated deficit	(204,911)	(456,148)
Total Innoviva stockholders' equity	565,788	414,743
Noncontrolling interests	0	111,192
Total stockholders' equity	565,788	525,935
Total liabilities and stockholders' equity	$ 1,231,497	$ 926,395

BALANCE SHEET COMPONENTS - Schedule Of Other Accrued Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Balance Sheet Related Disclosures [Abstract]
Accrued contract manufacturing expenses	$ 8,382	$ 0
Accrued clinical expenses	692	0
Accrued research expenses	349	0
Accrued professional services	3,977	894
Current portion of lease liabilities	1,316	106
Current portion of deferred royalty obligation	2,639	0
Accrued license fees and royalties	943	0
Other	2,909	9
Total other accrued liabilities	$ 21,207	$ 1,009

DEBT - Convertible Subordinated Notes (Details)				1 Months Ended		3 Months Ended	12 Months Ended
DEBT - Convertible Subordinated Notes (Details)	Apr. 18, 2022 USD ($)	Mar. 07, 2022 USD ($)	Jul. 31, 2014 $ / shares $ / Item	Jul. 31, 2014 $ / shares $ / Item shares	Jan. 31, 2013 USD ($) Item $ / shares $ / Item shares	Mar. 31, 2022 USD ($)	Dec. 31, 2022 USD ($)	Dec. 31, 2021 USD ($)	Dec. 31, 2020 USD ($)	Dec. 31, 2016 USD ($)
Debt
Payment for repurchase of debt instrument							$ 165,131,000	$ 0	$ 0
Accrued interest payable							4,359,000	4,152,000
Loss on extinguishment of debt							(20,662,000)	0	0
Principal							549,704,000	433,484,000
Debt discount and issuance costs, net							(9,331,000)	(38,831,000)
2023 Notes \| Privately-negotiated capped call option
Debt
Cap price for the underlying number of shares (in dollars per share) \| $ / Item			27.04	27.04
2023 Notes \| Convertible subordinated notes
Debt
Loan amount					$ 287,500,000
Proceeds from issuance of notes payable, net of debt issuance costs					$ 281,200,000
Debt Instrument, annual interest rate					2.125%
Conversion rate \| shares				50.5818	35.9903
Conversion price of convertible notes into common stock (in dollars per share) \| $ / shares					$ 27.79
Portion of debt retired, face value		$ 144,800,000				$ 144,800,000				$ 14,100,000
Portion of debt retired, carrying value		144,500,000								$ 13,900,000
Payment for repurchase of debt instrument		$ 165,600,000				$ 165,600,000
Percentage of notes repurchased		60.00%
Accrued interest payable		$ 400,000
Unamortized debt issuance cost		300,000
Loss on extinguishment of debt		20,700,000
Principal	$ 96,200,000	96,200,000					96,204,000	240,984,000
Debt discount and issuance costs, net		$ (200,000)					(11,000)	(620,000)
Net Carrying Amount							96,193,000	240,364,000
Interest expense
Contractual interest expense							2,617,000	5,121,000	5,121,000
Amortization of debt issuance costs							302,000	580,000	567,000
Total interest and amortization expense							$ 2,919,000	$ 5,701,000	$ 5,688,000
2023 Notes \| Convertible subordinated notes \| Privately-negotiated capped call option
Debt
Payments for capped call options					$ 36,800,000
Number of derivative instruments purchased \| Item					2
Capped call strike price \| $ / shares			$ 19.77	$ 19.77
Strike price for the underlying number of shares (in dollars per share) \| $ / shares			$ 27.79	$ 19.77	$ 27.79
Cap price for the underlying number of shares (in dollars per share) \| $ / Item					38.00
2023 Notes \| Convertible subordinated notes \| Stock prices below $27.79 per share \| Minimum
Debt
Net shares settlement payable to the entity \| shares					0
2023 Notes \| Convertible subordinated notes \| Stock prices above $38.00 per share \| Maximum
Debt
Net shares settlement payable to the entity \| shares					2,779,659
2023 Notes \| Old Rate [Member] \| Convertible subordinated notes
Debt
Effective interest rate		2.36%
2023 Notes \| New Rate [Member] \| Convertible subordinated notes
Debt
Effective interest rate		2.37%
Innoviva's Common Stock \| 2023 Notes \| Convertible subordinated notes
Debt
Notes converted into common stock, Amount	$ 3,000.0

GOODWILL AND INTANGIBLE ASSETS (Tables)

12 Months Ended

Dec. 31, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

Summary of Accumulated Amortization of Recognized Intangible Assets

The carrying basis and accumulated amortization of recognized intangible assets as of December 31, 2022 were as follows:


	Useful Life	Gross		Accumulated			Net Carrying
(In thousands)	(Years)	Amount		Amortization			Amount
Marketed products	8-10	$	151,000	$	(5,581	)	$	145,419
In-process research and development			72,100		—			72,100
Collaboration agreement			35,400		—			35,400
Total		$	258,500	$	(5,581	)	$	252,919

BALANCE SHEET COMPONENTS - Schedule of Inventory, net (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Inventory Disclosure [Abstract]
Raw materials	$ 5,757
Work-in-process	25,052
Finished goods	25,088
Total inventory	$ 55,897	$ 0

CONSOLIDATED ENTITIES AND ACQUISITIONS - Entasis Therapeutics Holdings, Inc. (Details)			3 Months Ended			12 Months Ended
	Jul. 11, 2022 USD ($)	Feb. 17, 2022 USD ($) $ / shares	Jun. 30, 2021 USD ($) $ / shares shares	Sep. 30, 2020 USD ($) $ / shares shares	Jun. 30, 2020 USD ($) $ / shares shares	Dec. 31, 2022 USD ($) Director	Dec. 31, 2021 USD ($)	Dec. 31, 2020 USD ($)
Subsidiary or Equity Method Investee [Line Items]
Total debt						$ 549,704,000	$ 433,484,000
Net loss attributable to noncontrolling interests						$ (6,341,000)	$ (102,983,000)	$ (69,412,000)
Entasis Therapeutics Holdings Inc
Subsidiary or Equity Method Investee [Line Items]
Number of shares to be purchased under the securities purchase agreement \| shares					14,000,000
Number of investee's board members which may be designated by the Company \| Director						2
Payments to acquire equity securities			$ 20,000,000.0
Remeasurement loss						$ 7,800,000
Payment towards convertible promissory note	$ 0
Measurement period adjustments for change in value of goodwill						(4,700,000)
Measurement period adjustments for change in estimated purchase price						(1,400,000)
Measurement period adjustments for change in value of noncontrolling interests						1,700,000
Measurement period adjustments for change in value of intangible assets						2,500,000
Net loss attributable to noncontrolling interests						$ 13,600,000
Business Acquisitions of Change in Fair Value of Investment	$ 1,400,000
Entasis Therapeutics Holdings Inc \| Consolidated Investees
Subsidiary or Equity Method Investee [Line Items]
Equity method investment ownership percentage		59.90%
Entasis Therapeutics Holdings Inc \| Securities purchase agreement \| Convertable promissory note
Subsidiary or Equity Method Investee [Line Items]
Total debt		$ 15,000,000.0
Debt Instrument, annual interest rate		0.59%
Debt instrument maturity date		Aug. 18, 2022
Conversion price (dollars per share) \| $ / shares		$ 1.48
Entasis Therapeutics Holdings Inc \| Common stock
Subsidiary or Equity Method Investee [Line Items]
Number of shares to be purchased under the securities purchase agreement \| shares				4,672,897
Fair value of equity securities		$ 64,500,000
Entasis Therapeutics Holdings Inc \| Common stock \| Innoviva Strategic Opportunities, LLC
Subsidiary or Equity Method Investee [Line Items]
Number of shares to be purchased under the securities purchase agreement \| shares			10,000,000
Entasis Therapeutics Holdings Inc \| Warrants
Subsidiary or Equity Method Investee [Line Items]
Number of warrants purchased under the securities purchase agreement \| shares				4,672,897	14,000,000
Fair value of equity securities		$ 31,400,000
Entasis Therapeutics Holdings Inc \| Warrants \| Innoviva Strategic Opportunities, LLC
Subsidiary or Equity Method Investee [Line Items]
Number of shares to be purchased under the securities purchase agreement \| shares			10,000,000
Entasis Therapeutics Holdings Inc \| Common stock and warrants
Subsidiary or Equity Method Investee [Line Items]
Payments to acquire equity securities				$ 12,500,000	$ 35,000,000.0
Entasis Therapeutics Holdings Inc \| Warrants acquired in second quarter of 2021
Subsidiary or Equity Method Investee [Line Items]
Exercise price of warrants \| $ / shares			$ 2.00
Term of warrants						5 years
Entasis Therapeutics Holdings Inc \| Warrants acquired in third quarter of 2020
Subsidiary or Equity Method Investee [Line Items]
Exercise price of warrants \| $ / shares				$ 2.675
Term of warrants						5 years
Entasis Therapeutics Holdings Inc \| Warrants acquired in second quarter of 2020
Subsidiary or Equity Method Investee [Line Items]
Exercise price of warrants \| $ / shares					$ 2.50
Term of warrants						5 years

DEBT

12 Months Ended

Dec. 31, 2022

Debt Disclosure [Abstract]

DEBT

12. DEBT

Our debt consists of:


	December 31,
(In thousands)	2022			2021
2023 Notes	$	96,204		$	240,984
2025 Notes		192,500			192,500
2028 Notes		261,000			—
Total debt		549,704			433,484
Less: Unamortized debt discount and issuance costs		(9,331	)		(38,831	)
Total debt, net		540,373			394,653
Less: Current portion of long-term debt, net		96,193			—
Total long-term debt, net	$	444,180		$	394,653

Convertible Subordinated Notes Due 2023

In January 2013, we completed an underwritten public offering of $287.5 million aggregate principal amount of unsecured convertible subordinated notes, with maturity date of January 15, 2023. The financing raised proceeds, net of issuance costs, of approximately $281.2 million, less $36.8 million to purchase two privately negotiated capped call option transactions in connection

with the issuance of the notes. The 2023 Notes bear interest at the rate of 2.125% per year that is payable semi-annually in arrears in cash on January 15 and July 15 of each year, beginning on July 15, 2013.

The 2023 Notes were convertible, at the option of the holder, into shares of our common stock at an initial conversion rate of 35.9903 shares per $1,000 principal amount of the 2023 Notes, subject to adjustment in certain circumstances, which represents an initial conversion price of approximately $27.79 per share.

In connection with the offering of the 2023 Notes, we entered into two privately negotiated capped call option transactions with a single counterparty. The capped call option transaction is an integrated instrument consisting of a call option on our common stock purchased by us with a strike price equal to the initial conversion price of $27.79 per share for the underlying number of shares and a cap price of $38.00 per share, both of which are subject to adjustments consistent with the 2023 Notes. The cap component is economically equivalent to a call option sold by us for the underlying number of shares with an initial strike price of $38.00 per share. As an integrated instrument, the settlement of the capped call coincides with the due date of the convertible debt. Upon settlement, we would receive from our hedge counterparty a number of shares of our common shares that would range from zero, if the stock price was below $27.79 per share, to a maximum of 2,779,659 shares, if the stock price is above $38.00 per share. However, if the market price of our common stock, as measured under the terms of the capped call transactions, exceeds $38.00 per share, there is no incremental anti-dilutive benefit from the capped call.

As a result of the partial conversion by certain holders of the 2023 Notes in July 2014, and dividends declared and paid in 2014 and 2015, the conversion rate with respect to our 2023 Notes was adjusted in total to 50.5818 shares of our common stock per $1,000 principal amount of the 2023 Notes, which represents a conversion price of approximately $19.77 per share. As a result of the conversion rate adjustments, the capped call strike price and cap price were also adjusted to $19.77 and $27.04, respectively.

For the year ended December 31, 2016, we retired a portion of our 2023 Notes with a face value of $14.1 million and carrying value of $13.9 million by way of purchase in the open market.

On March 7, 2022, we used $165.6 million from the sale of the 2028 Notes to repurchase 60% of the 2023 Notes with a face value of $144.8 million. The carrying value of the repurchased 2023 Notes was $144.5 million. Accrued interest was $0.4 million and unamortized debt issuance costs were $0.3 million on the date of repurchase. We recognized a loss on the extinguishment of the 2023 Notes of $20.7 million in other expense, net, in the consolidated statement of operations. The repurchase reduced the outstanding principal balance to $96.2 million and unamortized debt issuance costs to $0.2 million. The annual effective interest rate of the 2023 Notes changed from 2.36% to 2.37%.

On April 18, 2022, certain 2023 Notes holders converted their notes of $3.0 thousand into Innoviva’s common stock. The outstanding principal balance was reduced slightly to $96.2 million.

Our outstanding 2023 Notes balances consisted of the following:


	December 31,
(In thousands)	2022			2021
Principal	$	96,204		$	240,984
Debt issuance costs, net		(11	)		(620	)
Net carrying amount	$	96,193		$	240,364

The following table sets forth total interest expense recognized related to the 2023 Notes for the years ended December 31, 2022, 2021 and 2020:


	Year Ended December 31,
(In thousands)	2022		2021		2020
Contractual interest expense	$	2,617	$	5,121	$	5,121
Amortization of debt issuance costs		302		580		567
Total interest and amortization expense	$	2,919	$	5,701	$	5,688

The 2023 Notes were fully paid upon their maturity date in January 2023.

Convertible Senior Notes Due 2025

On August 7, 2017, we completed a private placement of $192.5 million aggregate principal amount of our 2025 Notes. The proceeds include the 2025 Notes sold pursuant to the $17.5 million over-allotment option granted by us to the initial purchasers, which option was exercised in full. The 2025 Notes were sold in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act. The 2025 Notes are senior unsecured obligations and bear interest at a rate of 2.5% per year, payable semi-annually in arrears on February 15 and August 15 of each year, beginning on February 15, 2018.

The 2025 Notes are convertible, based on the applicable conversion rate, into cash, shares of our common stock or a combination thereof, at our election. The initial conversion rate for the 2025 Notes is 57.9240 shares of our common stock per $1,000 principal amount of the 2025 Notes (which is equivalent to an initial conversion price of approximately $17.26 per share), representing a 30.0% conversion premium over the last reported sale price of the Company’s common stock on August 1, 2017, which was $13.28 per share. The conversion rate is subject to customary anti-dilution adjustments in certain circumstances. The 2025 Notes will mature on August 15, 2025, unless repurchased or converted in accordance with their terms prior to such date. Prior to February 15, 2025, the 2025 Notes will be convertible at the option of the holders only upon the occurrence of specified events and during certain periods. From, and including, February 15, 2025, until the close of business on the second scheduled trading day immediately preceding the maturity date, the 2025 Notes will be convertible at any time.

Holders of the 2025 Notes may convert all or a portion of their 2025 Notes prior to the close of business on February 15, 2025 only under the following circumstances:

•

after September 30, 2017, if our closing common stock price for at least 20 days out of the most recent 30 consecutive trading days of the preceding quarter is greater than 130% of the current conversion price of the 2025 Notes;

•

for five consecutive business days, if the average trading price per $1,000 of Notes during the prior 10 consecutive trading days is less than 98% of the product of our closing common stock price and the conversion rate of the 2025 Notes on such day; and,

•

upon the occurrence of specified corporate events, including certain distributions, the occurrence of a fundamental changes (as defined in the indenture governing the 2025 Notes) or a transaction resulting in our common stock converting into other securities or property or assets.

On or after February 15, 2025, holders of the 2025 Notes may convert their 2025 Notes at any time until the close of business on the second scheduled trading day immediately preceding the maturity date of the 2025 Notes.

In the event of default or a fundamental change (as defined above), holders of the 2025 Notes may require us to repurchase all or a portion of their 2025 Notes at price equal to 100% of the principal amount of the 2025 Notes, plus any accrued and unpaid interest.

Effective January 1, 2022, we adopted ASU 2020-06 using a modified retrospective method, under which financial results reported in prior periods were not adjusted. The adoption of ASU 2020-06 had a material impact on the 2025 notes. Refer to Note 1, “Description of Operations and Summary of Significant Accounting Policies”, for further information.

Prior to the adoption of ASU 2020-06, we separately accounted for the liability and equity components of the 2025 Notes by allocating the proceeds between the liability component and the embedded conversion option (“equity component”) due to our ability to settle the conversion obligation of the 2025 Notes in cash, common stock or a combination of cash and common stock, at our option. The carrying amount of the liability component was calculated by measuring the fair value of a similar liability that does not have an associated convertible feature using the income approach. The allocation was performed in a manner that reflected our non-convertible debt borrowing rate for similar debt. The equity component of the 2025 Notes of $67.3 million was recognized as a debt discount and represents the difference between the proceeds from the issuance of the 2025 Notes and the fair value of the liability of the 2025 Notes on the date of issuance. The excess of the principal amount of the liability component over its carrying amount (“debt discount”) was amortized to interest expense using the effective interest method over the term of the 2025 Notes. The equity component was not remeasured as long as it continued to meet the conditions for equity classification. Additionally, we separated the total issuance costs of $5.4 million incurred into liability and equity components in proportion to the allocation of the initial proceeds, resulting in liability issuance costs of $3.5 million and equity issuance costs of $1.9 million. Issuance costs attributable to the liability

component were amortized on a straight-line basis, which approximated the effective interest rate method, to interest expense over the term of the 2025 Notes. The issuance costs attributable to the equity component were netted against the equity component in additional paid-in capital. The annual effective interest rate of the liability component of the 2025 Notes was 8.87%.

Upon adoption of ASU 2020-06 on January 1, 2022, we combined the liability and equity components of the 2025 Notes assuming that the instrument was accounted for as a single liability from inception to the date of adoption. We similarly combined the liability and equity components of the issuance costs. The issuance costs are presented as a deduction from the outstanding principal balance of the 2025 Notes and are amortized on a straight-line basis over the term of the 2025 Notes under the effective interest rate method. As of January 1, 2022, the annual effective interest rate on the 2025 Notes was 2.88%.

Our outstanding 2025 Notes balances consisted of the following:


	December 31,
(In thousands)	2022			2021
Liability component
Principal	$	192,500		$	192,500
Debt discount and issuance costs, net		(1,917	)		(38,211	)
Net carrying amount	$	190,583		$	154,289
Equity component, net	$	—		$	65,361

The following table sets forth total interest expense recognized related to the 2025 Notes for the years ended December 31, 2022, 2021 and 2020:


	Year Ended December 31,
(In thousands)	2022		2021		2020
Contractual interest expense	$	4,813	$	4,813	$	4,813
Amortization of debt issuance costs		692		657		601
Amortization of debt discount		—		7,898		7,230
Total interest and amortization expense	$	5,505	$	13,368	$	12,644

Convertible Senior Notes Due 2028

In March 2022, we completed a private placement of $261.0 million aggregate principal amount of our 2028 Notes, which will mature on March 15, 2028. The proceeds include the 2028 Notes sold pursuant to the $45.0 million over-allotment option granted by us to the initial purchasers, of which $36.0 million was exercised. The 2028 Notes were sold in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act.

The net proceeds from the sale of the $261.0 million aggregate principal amount of 2028 Notes were approximately $252.6 million after deducting the initial purchasers’ discounts and commissions and our estimated offering expenses. We used approximately $21.0 million of the net proceeds from the offering to fund the cost of entering into the capped call transactions described below. In addition, we used $165.6 million of the remaining net proceeds to repurchase $144.8 million aggregate principal amount of the 2023 Notes in separate and individually negotiated transactions with certain holders of the 2023 Notes, which closed concurrently with the issuance of the 2028 Notes. We expect to use the remaining net proceeds for general corporate purposes.

The 2028 Notes bear interest at an annual rate of 2.125% that is payable semi-annually in arrears in cash on March 15 and September 15 of each year, beginning on September 15, 2022.

The 2028 Notes are convertible, based on the applicable conversion rate, into cash, shares of our common stock or a combination thereof, at our election. The initial conversion rate was 38.1432 shares per $1,000 principal amount of the 2028 Notes, subject to customary anti-dilution adjustment in certain circumstances, which represented an initial conversion price of approximately $26.22 per share.

Prior to September 15, 2027, the 2028 Notes will be convertible at the option of the holders only upon the occurrence of specified events and during certain periods, and will be convertible on or after September 15, 2027, at any time until the close of business on the second scheduled trading day immediately preceding the maturity date of the 2028 Notes.

Holders of the 2028 Notes may convert all or a portion of their 2028 Notes prior to the close of business on September 15, 2027, only under the following circumstances:

•

after March 31, 2022, if our closing common stock price for at least 20 days out of the most recent 30 consecutive trading days of the preceding quarter is greater than 130% of the current conversion price of the 2028 Notes;

•

upon the occurrence of specified corporate events, including certain distributions, the occurrence of a fundamental changes (as defined in the indenture governing the 2028 Notes) or a transaction resulting in our common stock converting into other securities or property or assets.

On or after September 15, 2027, holders of the 2028 Notes may convert their 2028 Notes at any time until the close of the business on the second day immediately preceding the maturity date of the 2028 Notes.

The 2028 Notes will be redeemable, in whole or in part, at our option at any time, and from time to time, on or after March 20, 2025, and on or before the 75th scheduled trading day immediately before the maturity date but only if the last reported sale price per share of our common stock exceeds 130% of the conversion price for a specified period of time. The redemption price will be equal to the principal amount of the 2028 Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date. In addition, calling any 2028 Note for redemption will constitute a make-whole fundamental change (as defined in the indenture governing the 2028 Notes) with respect to that 2028 Note, in which case the conversion rate applicable to the conversion of that 2028 Note will be increased in certain circumstances if it is converted after it is called for redemption.

If we undergo a fundamental change, subject to certain conditions, holders may require us to purchase for cash all or any portion of their 2028 Notes. The fundamental change purchase price will be 100% of the principal amount of the 2028 Notes to be purchased plus any accrued and unpaid interest to, but excluding, the fundamental change purchase date.

The indenture governing the 2028 Notes contains customary terms and covenants, including a merger covenant and that upon certain events of default occurring and continuing, either the Trustee or the holders of at least 25% of the aggregate principal amount of the outstanding Notes may declare 100% of the principal of, and accrued and unpaid interest, if any, on, all the Notes to be due and payable immediately.

In connection with the offering of the 2028 Notes, we entered into privately negotiated capped call transactions. The cap price of the capped call transaction is initially $33.9850 per share and is subject to certain adjustments under the terms of the capped call transactions. The capped call transactions cover, subject to customary adjustments, the number of shares of common stock initially underlying the 2028 Notes. The capped call transactions are expected generally to reduce potential dilution to our common stock upon conversion of the 2028 Notes or at our election (subject to certain conditions) offset any cash payments we are required to make in excess of the aggregate principal amount of converted 2028 Notes, as the case may be, with such reduction or offset subject to a cap.

The annual effective interest rate on the 2028 Notes is 2.70%.

Our outstanding 2028 Notes balance consisted of the following:


(In thousands)	December 31, 2022
Liability component
Principal	$	261,000
Debt discount and issuance costs, net		(7,403	)
Net carrying amount	$	253,597

The following table sets forth total interest expense recognized related to the 2028 Notes from the issuance through December 31, 2022:


	Date of Issuance through
(In thousands)	December 31, 2022
Contractual interest expense	$	4,514
Amortization of debt issuance costs		1,061
Total interest and amortization expense	$	5,575

Debt Maturities

The aggregate scheduled maturities of our long-term debt as of December 31, 2022 are as follows:


(In thousands)	Amount
Year ending December 31,
2023	$	96,204
2024		—
2025		192,500
2026		—
2027		—
Thereafter		261,000
Total	$	549,704

Deferred Royalty Obligation

As part of our acquisition of La Jolla, we recorded the fair value of its deferred royalty obligation in connection with La Jolla’s royalty financing agreement (“La Jolla Royalty Agreement”) with HealthCare Royalty Partners (“HCR”). Under the terms of the La Jolla Royalty Agreement, HCR is entitled to receive quarterly royalties on worldwide net sales of GIAPREZA® until either January 1, 2031 or when the maximum aggregate royalty payments have been made, whichever occurs first. Quarterly payments to HCR under the Royalty Agreement start at a maximum royalty rate, with step-downs based on the achievement of annual net product sales thresholds. The current maximum royalty rate is 14%. Starting January 1, 2024, the maximum royalty rate may increase by an additional 4%, if an agreed-upon, cumulative net product sales threshold has not been met. The La Jolla Royalty Agreement is subject to maximum aggregate royalty payments to HCR of $225.0 million.

From the date of our acquisition of La Jolla through December 31, 2022, we recognized interest expense of $1.8 million on the deferred royalty obligation. The carrying value of the deferred royalty obligation and accrued interest as of December 31, 2022 was $70.6 million, $67.9 million of which was classified as part of other long-term liabilities on the consolidated balance sheet and the remaining $2.7 million was classified as other accrued liabilities on the consolidated balance sheet. From the date of acquisition of La Jolla through December 31, 2022, we made royalty payments to HCR of $1.0 million. The deferred royalty obligation was valued using Level 3 inputs, and its carrying value as of December 31, 2022 approximates fair value. The fair value of the deferred royalty obligation was calculated as the discounted deferred royalty obligations based on risk-adjusted revenue projections for GIAPREZA®. The annual effective interest rate of the deferred royalty obligation was 7.34%.

Under the terms of the La Jolla Royalty Agreement, if we are unable to meet certain obligations, including the obligation to use commercially reasonable and diligent efforts to commercialize GIAPREZA®, HCR would have the right to terminate the La Jolla Royalty Agreement and demand payment of either $125.0 million or $225.0 million (depending on which obligation we have failed to meet) less aggregate royalties already paid to HCR. As of December 31, 2022, inclusive of the aggregate royalties paid to HCR by La Jolla under the La Jolla Royalty Agreement prior to our acquisition, La Jolla paid $12.7 million of aggregate royalties to HCR. In the event that we fail to pay such amount if and when due in a timely manner, HCR would have the right to foreclose on the GIAPREZA®-related assets. HCR has no recourse against any asset other than GIAPREZA®.

Certain contract provisions within the La Jolla Royalty Agreement that could result in an acceleration of amounts due under the La Jolla Royalty Agreement are recognized as embedded derivatives that require bifurcation from the deferred royalty obligation and fair value recognition. We determined the fair value of each derivative by assessing the probability of each event occurring, as well as the potential repayment amounts and timing of such repayments that would result under various scenarios. As a result of this assessment, we determined that the fair value of the embedded derivatives is not material and, therefore, not recognized as of December 31, 2022. We estimate the fair value of the embedded derivatives for each reporting period until either the features lapse or the La Jolla Royalty Agreement is terminated, whichever occurs first. Any material change in the fair value of the embedded derivatives will be recorded as either a gain or loss on the consolidated statements of income.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-URI https://asc.fasb.org/topic&trid=2208564

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1B
-Subparagraph (h)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1C
-Subparagraph (c)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1I
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1I
-Subparagraph (d)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(c))
-URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1B
-Subparagraph (g)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1C
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1C
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1E
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495348-112611

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1B
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1I
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1B
-Subparagraph (i)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

+ Details

REVENUE RECOGNITION - Schedule of net revenue from collaborative arrangements (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Revenue Recognition and Collaborative Arrangements
Net revenue	$ 331,339	$ 391,866	$ 336,794
Royalty revenue
Revenue Recognition and Collaborative Arrangements
Less: amortization of capitalized fees paid	(13,823)	(13,823)	(13,823)
Net revenue	311,645	391,866	326,794
Revenue from collaborative arrangements
Revenue Recognition and Collaborative Arrangements
Net revenue	0	0	10,000
GSK
Revenue Recognition and Collaborative Arrangements
Net revenue	311,645	391,866	336,794
GSK \| Royalty revenue
Revenue Recognition and Collaborative Arrangements
Royalties	325,468	405,689	340,617
Less: amortization of capitalized fees paid	(13,823)	(13,823)	(13,823)
Net revenue	311,645	391,866	326,794
GSK \| RELVAR/BREO
Revenue Recognition and Collaborative Arrangements
Royalties	215,034	234,066	221,536
GSK \| ANORO
Revenue Recognition and Collaborative Arrangements
Royalties	38,405	44,935	45,992
GSK \| TRELEGY
Revenue Recognition and Collaborative Arrangements
Royalties	72,029	126,688	73,089
GSK \| Revenue from collaborative arrangements \| Strategic alliance - MABA program
Revenue Recognition and Collaborative Arrangements
Strategic alliance - MABA program	$ 0	$ 0	$ 10,000

COMMITMENTS AND CONTINGENCIES - Schedule of Supplemental Cash Flow Information Related to Lease (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2022 USD ($)
Commitments and Contingencies Disclosure [Abstract]
Cash paid for amounts included in the measurement of operating lease liabilities:	$ 790
Operating lease right-of-use assets obtained in exchange for operating lease obligations	3,323
Right-of-use assets obtained through acquisitions	$ 1,185

REVENUE RECOGNITION (Tables)

12 Months Ended

Dec. 31, 2022

Revenue from Contract with Customer [Abstract]

Schedule of net revenue from collaborative arrangements

Net revenue recognized under our GSK Agreements was as follows:


	Year Ended December 31,
(In thousands)	2022			2021			2020
Royalties - RELVAR/BREO	$	215,034		$	234,066		$	221,536
Royalties - ANORO		38,405			44,935			45,992
Royalties - TRELEGY(1)		72,029			126,688			73,089
Total royalties		325,468			405,689			340,617
Less: amortization of capitalized fees paid		(13,823	)		(13,823	)		(13,823	)
Royalty revenue		311,645			391,866			326,794
Strategic alliance - MABA program		—			—			10,000
Total net royalty revenue	$	311,645		$	391,866		$	336,794

(1) The year ended December 31, 2022 represents the period from January 1, 2022 to July 20, 2022, the date of the sale of our ownership interest in TRC.

CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Revenue:
Total revenue	$ 331,339	$ 391,866	$ 336,794
Expenses:
Selling, general and administrative	63,538	16,187	13,883
Research and development	41,432	576	1,788
Amortization of acquired intangible assets	5,581	0	0
Gain on sale of Theravance Respiratory Company, LLC ("TRC")	(266,696)	0	0
Loss on extinguishment of debt	20,662	0	0
Changes in fair values of equity method investments, net	161,749	(84,392)	(49,511)
Changes in fair value of other equity and long-term investments, net	(8,462)	(6,638)	(766)
Interest and dividend income	(6,369)	(1,839)	(1,524)
Interest expense	15,789	19,070	18,331
Other expense, net	3,373	3,626	348
Total expenses	44,390	(53,410)	(17,451)
Income before income taxes	286,949	445,276	354,245
Income tax expense, net	66,687	76,439	60,431
Net income	220,262	368,837	293,814
Net loss attributable to noncontrolling interests	6,341	102,983	69,412
Net income attributable to Innoviva stockholders	$ 213,921	$ 265,854	$ 224,402
Basic net income per share attributable to Innoviva stockholders	$ 3.07	$ 3.24	$ 2.21
Diluted net income per share attributable to Innoviva stockholders	$ 2.37	$ 2.87	$ 2.02
Shares used to compute Innoviva basic and diluted net income per share:
Shares used to compute basic net income per share	69,644	82,062	101,320
Shares used to compute diluted net income per share	95,248	94,310	113,554
Royalty revenue from a related party
Revenue:
Total revenue	$ 311,645	$ 391,866	$ 326,794
Revenue from collaborative arrangements
Revenue:
Total revenue	0	0	10,000
Net product sales
Revenue:
Total revenue	19,694	0	0
Expenses:
Cost of products sold (inclusive of amortization of inventory fair value adjustments and excluding amortization of acquired intangible assets)	$ 13,793	$ 0	$ 0

BALANCE SHEET COMPONENTS -Schedule of Other Long-term Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Balance Sheet Related Disclosures [Abstract]
Long-term portion of deferred royalty obligation	$ 67,947
Long-term portion of lease liabilities	2,376	$ 0
Contingent value rights liability	595
Total other long-term liabilities	$ 70,918	$ 0

CONSOLIDATED ENTITIES AND ACQUISITIONS - La Jolla Pharmaceutical Company (Details) - USD ($) $ / shares in Units, $ in Thousands		12 Months Ended
	Aug. 22, 2022	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Business Acquisition [Line Items]
Change in inventory		$ (280)	$ 0	$ 0
La Jolla Pharmaceutical Company
Business Acquisition [Line Items]
Total consideration paid	$ 206,600
Acquisition share price	$ 6.23
Measurement period adjustments for change in value of goodwill		3,700
Change in inventory		(7,700)
Measurement period adjustments for change in value of intangible assets		(1,500)
Measurement Period Adjustments Increase Decrease In Liabilities		(8,300)
Acquisition-related costs		5,300
Measurement period adjustments increase decrease in deferred tax liabilities		$ 2,600

NET INCOME PER SHARE - Basic and Diluted EPS (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Numerator:
Net income attributable to Innoviva stockholders, basic	$ 213,921	$ 265,854	$ 224,402
Net income attributable to Innoviva stockholders, diluted	$ 225,569	$ 270,590	$ 229,119
Denominator:
Weighted-average shares used to compute basic net income per share attributable to Innoviva stockholders	69,644	82,062	101,320
Dilutive effect of options and awards granted under equity incentive plan and employee stock purchase plan	108	59	45
Weighted-average shares used to compute diluted net income per share attributable to Innoviva stockholders	95,248	94,310	113,554
Net income per share attributable to Innoviva stockholders
Basic net income per share	$ 3.07	$ 3.24	$ 2.21
Diluted net income per share	$ 2.37	$ 2.87	$ 2.02
2023 Notes
Numerator:
Add: interest expense on Notes, net of tax effect	$ 2,439	$ 4,736	$ 4,717
Denominator:
Dilutive effect	6,188	12,189	12,189
2025 Notes
Numerator:
Add: interest expense on Notes, net of tax effect	$ 4,583	$ 0	$ 0
Denominator:
Dilutive effect	11,150	0	0
2028 Notes
Numerator:
Add: interest expense on Notes, net of tax effect	$ 4,626	$ 0	$ 0
Denominator:
Dilutive effect	8,158	0	0

EQUITY AND LONG-TERM INVESTMENTS AND FAIR VALUE MEASUREMENTS - Equity Investment in Armata (Details) - Armata $ / shares in Units, $ in Millions		3 Months Ended			12 Months Ended
	Feb. 09, 2022 USD ($) $ / shares shares	Dec. 31, 2021 USD ($) shares	Mar. 31, 2021 USD ($) $ / shares shares	Mar. 31, 2020 USD ($) $ / shares shares	Dec. 31, 2022 USD ($) Director Tranche	Dec. 31, 2021 USD ($)
Equity Investment
Number of tranches \| Tranche					2
Percentage of maximum voting rights	49.50%				49.50%
Number of Investee's Board members currently representing the Company \| Director					3
Number of the Investee's Board members \| Director					8
Unrealized gain						$ 78.7
Unrealized loss					$ 152.5
Special terms on re-designating board member to board of investee	In addition, as of February 9, 2022, Armata entered into an amended and restated investor rights agreement with the Company and ISO, pursuant to which for as long as the Company and ISO hold at least 12.5% of the outstanding shares of Armata’s common stock on a fully-diluted, the Company and ISO shall have the right to designate two directors to Armata’s board of directors, and for so long as the Company and ISO hold at least 8%, but less than 12.5%, of the outstanding shares of Armata’s common stock on a fully-diluted basis, the Company and ISO shall have the right to designate one director to Armata’s board of directors, subject to certain conditions and qualifications set forth in the amended and restated investor rights agreement.
Consolidated Investees [Member]
Equity Investment
Equity method investment ownership percentage		59.30%			69.40%	59.30%
Two Directors
Equity Investment
Armata outstanding shares percentage	12.50%
Common stock and warrants
Equity Investment
Amount of securities purchase agreement				$ 25.0
Equity and long-term investments at fair value		$ 146.7			$ 39.2	$ 146.7
Warrants purchased in 2020
Equity Investment
Number of warrants purchased under the securities purchase agreement \| shares				8,710,800
Exercise price of warrants \| $ / shares				$ 2.87
Term of warrants				5 years
Warrants purchased in 2021
Equity Investment
Exercise price of warrants \| $ / shares			$ 3.25
Term of warrants			5 years
Warrants Purchased in 2022
Equity Investment
Exercise price of warrants \| $ / shares	$ 5.00
Term of warrants	5 years
Warrants
Equity Investment
Equity and long-term investments at fair value		58.6			8.1	58.6
Common stock
Equity Investment
Number of shares to be purchased under the securities purchase agreement \| shares				8,710,800
Equity and long-term investments at fair value		$ 88.1			$ 31.1	$ 88.1
Minimum [Member] \| One Director
Equity Investment
Armata outstanding shares percentage	8.00%
Maximum [Member] \| One Director
Equity Investment
Armata outstanding shares percentage	12.50%
Innoviva Strategic Opportunities, LLC \| Common stock and warrants
Equity Investment
Amount of securities purchase agreement	$ 45.0		$ 20.0
Innoviva Strategic Opportunities, LLC \| Warrants
Equity Investment
Number of warrants to be purchased under the securities purchase agreement \| shares	4,500,000		6,153,847
Exercise price of warrants \| $ / shares	$ 5.00
Innoviva Strategic Opportunities, LLC \| Common stock
Equity Investment
Number of shares to be purchased under the securities purchase agreement \| shares	9,000,000
Number of shares to be purchased under the securities purchase agreement \| shares		1,212,122
Number of warrants to be purchased under the securities purchase agreement \| shares			6,153,847
Amount of securities purchase agreement		$ 4.0