Innoviva Inc

Previous wording

First Quarter 2024 and Recent Highlights:

Current wording

Second Quarter 2024 and Recent Highlights:

Previous wording

XACDURO® (sulbactam for injection; durlobactam for injection), co-packaged for intravenous use: targeted antibacterial for patients with HABP/VABP caused by Acinetobacter

Current wording

XACDURO®, co-packaged for intravenous use: targeted antibacterial for the treatment of patients with hospital-acquired bacterial pneumonia and ventilator-associated bacterial pneumonia (HABP/VABP) caused by susceptible isolates of Acinetobacter baumannii calcoaceticus complex.

Previous wording

Zoliflodacin: a potential first-in-class, single dose, oral antibiotic in development for the treatment of patients with uncomplicated gonorrhea

Current wording

Zoliflodacin: a potential first-in-class, single dose, oral antibiotic in development for the treatment of patients with uncomplicated gonorrhea is currently being developed in partnership with The Global Antibiotic Research & Development Partnership

Previous wording

In November 2002, we entered into the LABA collaboration with GSK to develop and commercialize once-daily LABA products for the treatment of chronic obstructive pulmonary disorder (“COPD”) and asthma (the “LABA Collaboration Agreement”). For the treatment of COPD, the collaboration has developed three combination products:

Current wording

In November 2002, we entered into the LABA collaboration with GSK to develop and commercialize once-daily LABA products for the treatment of chronic obstructive pulmonary disorder (“COPD”) and asthma (the “LABA Collaboration Agreement”). For the treatment of COPD, the collaboration has developed the following combination products:

Previous wording

RELVAR®/BREO® ELLIPTA® (“FF/VI”) (BREO® ELLIPTA® is the proprietary name in the U.S. and Canada and RELVAR® ELLIPTA® is the proprietary name outside the U.S. and Canada), a once-daily combination medicine consisting of a LABA, vilanterol (VI), and an inhaled corticosteroid (“ICS”), fluticasone furoate (“FF”),

Current wording

RELVAR®/BREO® ELLIPTA® (“FF/VI”) (BREO® ELLIPTA® is the proprietary name in the U.S. and Canada and RELVAR® ELLIPTA® is the proprietary name outside the U.S. and Canada), a once-daily combination medicine consisting of a LABA, vilanterol (VI), and an inhaled corticosteroid (“ICS”), fluticasone furoate (“FF”), and

Previous wording

ANORO® ELLIPTA® (“UMEC/VI”), a once-daily medicine combining a long-acting muscarinic antagonist (“LAMA”), umeclidinium bromide (“UMEC”), with a LABA, vilanterol (VI), and

Current wording

ANORO® ELLIPTA® (“UMEC/VI”), a once-daily medicine combining a long-acting muscarinic antagonist (“LAMA”), umeclidinium bromide (“UMEC”), with a LABA, vilanterol (VI).

Previous wording

Total royalty revenue, net, as compared to the prior year period, was as follows:

Current wording

Total royalty revenue, net, as compared to the prior year periods, was as follows:

Previous wording

Total net royalty revenue increased to $58.4 million for the three months ended March 31, 2024, compared to $56.9 million for the same period a year ago. The increase of total net royalty revenue was primarily due to sales growth in both RELVAR®/BREO®ELLIPTA® and ANORO® ELLIPTA®.

Current wording

Total net royalty revenue increased to $63.7 million and $122.2 million for the three and six months ended June 30, 2024, compared to $62.3 million and $119.1 million, respectively, for the same period a year ago. The increase of total net royalty revenue was primarily due to sales growth in both RELVAR®/BREO®ELLIPTA® and ANORO® ELLIPTA®.

Previous wording

Net product sales recognized for the three months ended March 31, 2024 was $19.1 million, consisting of net sales of GIAPREZA®, XERAVA®, and XACDURO®for $12.1 million, $4.8 million and $2.2 million, respectively.

Current wording

Net product sales recognized for the three months ended June 30, 2024 was $21.7 million, consisting of net sales of GIAPREZA®, XERAVA®, and XACDURO®for $13.1 million, $6.2 million and $2.4 million, respectively. Net product sales recognized for the six months ended June 30, 2024 was $40.7 million, consisting of net sales of GIAPREZA®, XERAVA®, and XACDURO®for $25.2 million, $10.9 million and $4.6 million, respectively.

Previous wording

For the comparative period in 2023, our net product sales amounted to $11.5 million, consisting of net sales of GIAPREZA® and XERAVA® for $9.0 million and $2.5 million, respectively. XACDURO® was not commercially available until September 2023.

Current wording

Net product sales recognized for the three months ended June 30, 2023 was $15.7 million, consisting of net sales of GIAPREZA® and XERAVA®for $11.2 million and $4.5 million, respectively. Net product sales recognized for the six months ended June 30, 2023 was $27.2 million, consisting of net sales of GIAPREZA® and XERAVA® for $20.2 million and $7.0 million, respectively. XACDURO® was not commercially available until September 2023.

Previous wording

We recognized $8.0 million in license revenue for the first quarter of 2023 as a result of achievement of a regulatory milestone under our license agreement with Everest.

Current wording

We recognized $8.0 million in license revenue for the second quarter of 2024 as a result of achievement of a regulatory milestone under our license agreement with Zai Lab. We also recognized $6.5 million in license revenue for the second quarter of 2024 under the Amended Zai Agreement with Zai Lab. We recognized license revenue of $8.0 million for the first quarter of 2023 and $3.0 million for the second quarter of 2023 as a result of achievement of regulatory milestones under our license agreements with Everest and Zai Lab, respectively.

Previous wording

Research and development expenses, as compared to the prior year period, were as follows:

Current wording

Research and development expenses, as compared to the prior year periods, were as follows:

Previous wording

Research and development expenses, which are mainly attributable to post-marketing commitments required by the FDA and ongoing product developments, were $3.9 million for the three months ended March 31, 2024. Research and development expenses for the three months ended March 31, 2023, which were mainly attributable to the product development efforts for XACDURO®, were $12.6 million. The decrease was primarily a result of the FDA approval of XACDURO® in May 2023 and personnel transfers from the research development function to general and administrative function after the FDA approval.

Current wording

Research and development expenses, which are mainly attributable to post-marketing commitments required by the FDA and ongoing product developments, were $2.6 million and $6.4 million for the three and six months ended June 30, 2024. Research and development expenses for the three and six months ended June 30, 2023, which were mainly attributable to the product development efforts for XACDURO®, were $15.0 million and $27.6 million, respectively. The decrease was primarily a result of the FDA approval of XACDURO® in May 2023 and personnel transfers from the research development function to general and administrative function after the FDA approval.

Previous wording

Selling, general and administrative expenses, as compared to the prior year period, were as follows:

Current wording

Selling, general and administrative expenses, as compared to the prior year periods, were as follows:

Previous wording

Selling, general and administrative expenses increased for the three months ended March 31, 2024, compared to the same period in 2023, primarily due to the reallocation of resources from the research development function to general and administrative function after the FDA approval of XACDURO®, as well as increased efforts in sales and marketing of our marketed products.

Current wording

Selling, general and administrative expenses increased for the three and six months ended June 30, 2024, compared to the same period in 2023, primarily due to the reallocation of resources from the research development function to general and administrative function after the FDA approval of XACDURO®, as well as increased efforts in sales and marketing of our marketed products.

Previous wording

Interest and dividend income and other expense, net, as compared to the prior year period, were as follows:

Current wording

Interest and dividend income and other expense, net, as compared to the prior year periods, were as follows:

Previous wording

Interest and dividend income increased for the three months ended March 31, 2024, compared to the same periods a year ago due to higher interest rates and higher average balances of our cash equivalents, money market funds and other interest-bearing investments.

Current wording

Interest and dividend income increased for the six months ended June 30, 2024, compared to the same period a year ago due to higher interest rates and higher average balances of our cash equivalents, money market funds and other interest-bearing investments.

Previous wording

Interest expense, as compared to the prior year period, was as follows:

Current wording

Interest expense, as compared to the prior year periods, was as follows:

Previous wording

Interest expense for the three months ended March 31, 2024 comprised mainly of the contractual interest expense and the amortization of debt issuance costs for our 2025 Notes and 2028 Notes, as well as effective interest expense on our deferred royalty obligation. Interest expense for the three months ended March 31, 2023 included the amount on the 2023 Notes until the notes were fully paid off on January 15, 2023. The increase for the three months ended March 31, 2024, compared to the three months ended March 31, 2023, was mainly due to higher effective interest rate on our deferred royalty obligation as a result of higher sales performance of GIAPREZA®.

Current wording

Interest expense for the three and six months ended June 30, 2024 comprised mainly of the contractual interest expense and the amortization of debt issuance costs for our 2025 Notes and 2028 Notes, as well as effective interest expense on our deferred royalty obligation. Interest expense for the six months ended June 30, 2023 included the amount on the 2023 Notes until the notes were fully paid off on January 15, 2023. The increase for the three and six months ended June 30, 2024, compared to the three and six months ended June 30, 2023, was mainly due to higher effective interest rate on our deferred royalty obligation as a result of higher sales performance of GIAPREZA®.

Previous wording

Changes in fair values of equity and long-term investments, as compared to the prior year period, were as follows:

Current wording

Changes in fair values of equity and long-term investments, as compared to the prior year periods, were as follows:

Previous wording

The changes in fair values of equity method investments for the three months ended March 31, 2024 were more favorable mainly due to Armata's higher stock prices during this period. We recorded $35.3 million and $15.8 million in unrealized gain for the three months ended March 31, 2024 and 2023, respectively, related to our equity method investments in Armata.

Current wording

The changes in fair values of equity method investments for the three and six months ended June 30, 2024 were unfavorable mainly due to the decrease in Armata's stock price during this period. We recorded $60.1 million and $24.8 million in unrealized loss for the three and six months ended June 30, 2024, respectively, and $19.9 million and $4.1 million in unrealized loss for the three and six months ended June 30, 2023, respectively, related to our equity method investments in Armata.

Previous wording

The changes in fair values of other equity and long-term investments primarily reflected the realized gains and losses and net unrealized gains and losses in our strategic investments in Armata, InCarda, Gate, ImaginAb and those investments managed by ISP Fund LP. We recorded $26.2 million of net negative changes in fair values of equity and long-term investments related to the investments managed by ISP Fund LP, partially offset by $13.2 million in unrealized gain for the three months ended March 31, 2024 related to other long-term investments we made in Armata.

Current wording

The changes in fair values of other equity and long-term investments primarily reflected the realized gains and losses and net unrealized gains and losses in our strategic investments in Armata, InCarda, Gate, ImaginAb and those investments managed by ISP Fund LP. We recorded $15.8 million and $42.0 million of net negative changes in fair values of equity and long-term investments related to the investments managed by ISP Fund LP, for the three and six months ended June 30, 2024, respectively. We also recorded $15.1 million and $1.9 million in net negative changes in fair values of equity and long-term investments for the three and six months ended June 30, 2024, respectively, related to other long-term investments we made in Armata.

Previous wording

We recorded a provision for income tax expense of $8.6 million for the three months ended March 31, 2024, compared to a provision for income tax expense of $6.3 million for the three months ended March 31, 2023, respectively. The effective income tax rate for the three months ended March 31, 2024 and 2023 was 19.0% and 15.3%, respectively.

Current wording

We recorded income tax benefit of $4.6 million and income tax expense of $4.0 million for the three and six months ended June 30, 2024, respectively, compared to a provision for income tax expense of $4.5 million and $10.8 million for the three and six months ended June 30, 2023, respectively. The effective income tax rate for the six months ended June 30, 2024 and 2023 was 68.4% and 25.7%, respectively.

Previous wording

Since our inception, we have financed our operations primarily through private placements and public offerings of equity and debt securities and payments received under collaboration arrangement. For the three months ended March 31, 2024, we generated gross royalty revenues from GSK of $61.9 million and net product sales of $19.1 million. Net cash and cash equivalents totaled $178.4 million, royalties receivables from GSK totaled $61.9 million and accounts receivable associated with our product sales totaled $14.1 million as of March 31, 2024.

Current wording

Since our inception, we have financed our operations primarily through private placements and public offerings of equity and debt securities and payments received under collaboration arrangement. For the six months ended June 30, 2024, we generated gross royalty revenues from GSK of $129.1 million and net product sales of $40.7 million. Net cash and cash equivalents totaled $217.0 million, royalties receivables from GSK totaled $67.2 million and accounts receivable associated with our product sales and license revenue totaled $26.8 million as of June 30, 2024.

Previous wording

Net cash provided by operating activities for the three months ended March 31, 2024 was $37.0 million, consisting primarily of our net income of $36.5 million, adjusted for net non-cash items, which included $6.8 million of amortization of inventory fair value step-up adjustment, $6.4 million of amortization of acquired intangible assets, $3.5 million of amortization of capitalized fees and depreciation of property and equipment, $3.2 million of deferred income taxes, partially offset by $22.0 million of net changes in fair value of our investments and $2.0 million net changes in operating assets and liabilities.

Current wording

Net cash provided by operating activities for the six months ended June 30, 2024 was $80.8 million, consisting primarily of our net income of $1.8 million, adjusted for net non-cash items, which included $68.7 million in changes in fair value of our investments, $12.9 million of amortization of acquired intangible assets, $10.3 million of amortization of inventory fair value step-up adjustment, $7.0 million of amortization of capitalized fees and depreciation of property and equipment, partially offset by $12.0 million of deferred income taxes and $11.9 million in net changes in operating assets and liabilities.

Previous wording

Net cash provided by operating activities for the three months ended March 31, 2023 was $25.7 million, consisting primarily of our net income of $34.9 million, adjusted for net non-cash items, which included $13.7 million of net changes in fair value of our investments, $6.8 million of amortization of inventory fair value step-up adjustment, $3.5 million of amortization of capitalized fees and depreciation of property and equipment and $3.8 million of amortization of acquired intangible assets partially offset by increases of $6.1 million in accounts receivable, $5.6 million in receivables from collaboration arrangement and decreases of $3.5 million in accrued interest payable.

Current wording

Net cash provided by operating activities for the six months ended June 30, 2023 was $63.9 million, consisting primarily of our net income of $36.1 million, adjusted for net non-cash items, which included $13.8 million of amortization of inventory fair value step-up adjustment, $8.8 million of amortization of acquired intangible assets, $7.0 million of amortization of capital fees and depreciation of property and equipment, $6.3 million of net changes in fair value of our investments, partially offset by decreases of $11.0 million in receivables from collaboration arrangement and $4.7 million in inventory.

Previous wording

Net cash used in investing activities for the three months ended March 31, 2024 of $43.0 million primarily consisted of $43.1 million in purchases of trading securities and $8.8 million in purchases of equity and long-term investments managed by ISP Fund LP. The use of cash for investing activities was partially offset by net proceeds of $5.3 million from the sales of equity investments managed by ISP Fund LP and $3.4 million from the sale of other investments managed by ISP Fund LP.

Current wording

Net cash used in investing activities for the six months ended June 30, 2024 of $43.0 million primarily consisted of $43.1 million in purchases of trading securities and $30.9 million in purchases of equity and long-term investments managed by ISP Fund LP. The use of cash for investing activities was partially offset by proceeds of $24.9 million from net sales of other investments managed by ISP Fund LP and $6.0 million from the sales of equity investments managed by ISP Fund LP.

Previous wording

Net cash used in investing activities for the three months ended March 31, 2023 of $35.7 million primarily consisted of $35.7 million in purchases of equity and other long-term investments and $3.9 million in purchases of equity investments managed by ISP Fund LP. The use of cash for investing activities was partially offset by net proceeds of $3.9 million from the sale of equity and other investments managed by ISP Fund LP.

Current wording

Net cash used in investing activities for the six months ended June 30, 2023 of $35.7 million primarily consisted of $35.7 million in purchases of equity and long-term investments and $17.8 million in purchases of equity investments managed by ISP Fund LP. The use of cash for investing activities was partially offset by net proceeds of $15.3 million from the purchases and sales of other investments managed by ISP Fund LP.

Previous wording

Net cash used in financing activities for the three months ended March 31, 2024 of $9.2 million was primarily due to $9.6 million for the repurchase of common stock under our current stock repurchase program.

Current wording

Net cash used in financing activities for the six months ended June 30, 2024 of $14.2 million was primarily due to $14.8 million for the repurchase of common stock under our stock repurchase program which concluded in April 2024.

Previous wording

Net cash used in financing activities for the three months ended March 31, 2023 of $137.0 million was primarily due to the payments of $96.2 million upon maturity of the 2023 Notes in January 2023 and $40.7 million for the repurchase of common stock under our current stock repurchase program.

Current wording

Net cash used in financing activities for the six months ended June 30, 2023 of $146.2 million was primarily due to the payments of $96.2 million upon maturity of the 2023 Notes in January 2023 and $50.0 million for the repurchase of common stock under our stock repurchase program.

Previous wording

Our short-term and long-term obligations also include contractual payments related to our operating leases were $2.8 million, with approximately $1.1 million payable through December 31, 2024, approximately $1.4 million payable in 2025, and approximately $0.1 million payable in 2026 and 2027. Refer to Note 12, “Commitments and Contingencies” to the condensed consolidated financial statements for more information.

Current wording

Our short-term and long-term obligations also include contractual payments related to our operating leases were $3.8 million, with approximately $0.8 million payable through December 31, 2024, and approximately $3.0 million payable through 2029. Refer to Note 12, “Commitments and Contingencies” to the condensed consolidated financial statements for more information.

Previous wording

We also enter into agreements in the normal course of business with vendors for manufacturing, clinical trials and preclinical studies, and other services and products for operating purposes.

Current wording

We also enter into other agreements in the normal course of business with vendors for manufacturing, clinical trials and preclinical studies, and other services and products for operating purposes.