Innoviva, Inc.

Previous wording

Our wholly owned, critical care and infectious disease operating platform with a hospital focus, is anchored by a portfolio of four commercial and marketed products, as well as an FDA-approved product which is expected to be available to patients in the second half of 2026:

Current wording

Our wholly owned, critical care and infectious disease operating platform with a hospital focus, is anchored by a portfolio of four commercial and marketed products, as well as an FDA-approved product which is expected to be available to patients before the end of 2026:

Previous wording

Second Quarter 2026 and Recent Highlights:

Current wording

Third Quarter 2026 and Recent Highlights:

Previous wording

Royalty revenue: gross royalty revenue from GSK remains stable at $59.8 million in the second quarter of 2026, a 2% increase compared to $58.6 million in the first quarter of 2026.

Current wording

Royalty revenue: gross royalty revenue from GSK remains stable at $58.1 million.

Previous wording

Net product sales:$51.8 million ($36.6 million U.S. and $15.2 million ex-US), representing 46% growth compared to $35.5 million in the second quarter of 2025. U.S. net product sales primarily consisted of $21.0 million from GIAPREZA®, $12.0 million from XACDURO®, and $3.3 million from XERAVA®.

Current wording

Net product sales:$49.4 million, comprising $43.3 million in U.S. net product sales and $6.1 million in ex-U.S. sales. U.S. net product sales increased 45% year-over-year, compared to $29.9 million in the same quarter of 2025. U.S. net product sales primarily consisted of $23.1million from GIAPREZA®, $16.1 million from XACDURO®, and $3.4 million from XERAVA®.

Previous wording

Equity and long-term investments: net unfavorable changes in fair value of equity and long-term investments totaled $161.0 million, primarily attributable to a lower share price of Armata . Innoviva’s strategic healthcare investments were valued at $669.5 million as of June 30, 2026, and consisted of $457.7 million in Armata, $177.3 million in other strategic equity and convertible debt, and $34.5 million held by ISP Fund.

Current wording

Equity and long-term investments: net unfavorable changes in fair value of equity and long-term investments totaled $139.5 million, primarily attributable to a decline in the stock price of Armata at quarter-end. As of September 30, 2026, Innoviva’s strategic healthcare investments were valued at $535.5 million, consisting of $323.7 million invested in Armata, $179.9 million in other strategic equity and convertible debt investments, and $31.9 million in investments held by ISP Fund.

Previous wording

Net income: net loss of $83.4 million, or $1.14 basic loss per share, driven primarily by decrease in fair value of equity and long-term investments.

Current wording

Net income (loss): net loss of $73.9 million, or $1.03 basic loss per share, driven primarily by a decrease in fair value of equity and long-term investments.

Previous wording

Cash and cash equivalents: Totaled $570.4 million. Royalty and net product sales receivables totaled $110.6 million as of June 30, 2026, a 25% year-on-year increase compared to $88.3 million for the second quarter of 2025.

Current wording

Cash and cash equivalents: totaled $581.4 million. Royalty and net product sales receivables totaled $102.1 million as of September 30, 2026.

Previous wording

During the second quarter of 2026, Innoviva repurchased 1,403,247 shares for $31.4 million under its $125 million share repurchase program. Since inception, and through the end of the second quarter, the Company has repurchased 2,602,168 shares for $56.4 million, reflecting the Company’s continued confidence in its intrinsic value and long-term outlook.

Current wording

During the third quarter of 2026, Innoviva repurchased 1,226,948 shares for $26.3 million under its $125 million share repurchase program. Since inception, and through the end of the third quarter, the Company has repurchased 3,829,116 shares for $82.7 million, reflecting the Company’s continued confidence in its intrinsic value and long-term outlook.

Previous wording

Total net royalty revenue decreased to $56.3 million and $111.5 million for the three and six months ended June 30, 2026, compared to $63.9 million and $121.7 million for the same periods a year ago. The decrease in total net royalty revenue was primarily due to lower net sales driven by pricing pressures in the United States.

Current wording

Total net royalty revenue decreased to $54.7 million and $166.2 million for the three and nine months ended September 30, 2026, compared to $59.9 million and $181.6 million for the same periods a year ago. The decrease in total net royalty revenue was primarily due to lower net sales driven by pricing pressures in the United States.

Previous wording

Our net product sales increased overall during the periods presented, driven by higher sales volume resulting from our strategic commercialization efforts and dedication to delivering our critical care products to healthcare systems. The increase in XACDURO®ex-U.S. product sales is attributable mainly to product sales under an interim supply agreement with Zai Lab, which is billed at cost.

Current wording

Our net product sales increased overall during the periods presented, driven by higher sales volume resulting from our strategic commercialization efforts and dedication to delivering our critical care products to healthcare systems. XACDURO®ex-U.S. product sales were higher for the three months ended September 30, 2025 mainly due to the timing of product sales under an interim supply agreement with Zai Lab, which is billed at cost.

Previous wording

License and other revenue for the three and six months ended June 30, 2026 was derived primarily from our ongoing arrangements with Zai Lab and new agreements with GARDP and DRL as discussed in Note 4, “License, Collaboration and Other Arrangements”, to the Condensed Consolidated Financial Statements.

Current wording

License and other revenue for the three and nine months ended September 30, 2026 was derived primarily from our ongoing arrangements with Zai Lab and new agreements with GARDP and DRL as discussed in Note 4, “License, Collaboration and Other Arrangements”, to the Condensed Consolidated Financial Statements.

Previous wording

The cost of products sold also includes the inventory step-up value from the acquisition of La Jolla, which is recorded upon the sale of such inventory. The step-up value included above amounted to $0.9 million and $2.0 million for the three and six months ended June 30, 2026, respectively, and $0.4 million and $0.6 million for the three and six months ended June 30, 2025, respectively. Our cost of products sold increased during the three and six months ended June 30, 2026, driven by higher product sales volume. As of June 30, 2026, our total inventory included the remaining net fair value adjustments resulting from the acquisition of La Jolla of approximately $1.4 million, which will be recognized as cost of products sold when sales occur in future periods.

Current wording

The cost of products sold also includes the inventory step-up value from the acquisition of La Jolla, which is recorded upon the sale of such inventory. The step-up value included above amounted to $0.2 million and $2.2 million for the three and nine months ended September 30, 2026, respectively, and $3.5 million and $4.1 million for the three and nine months ended September 30, 2025, respectively. As of September 30, 2026, our total inventory included the remaining net fair value adjustments resulting from the acquisition of La Jolla of approximately $1.1 million, which will be recognized as cost of products sold when sales occur in future periods. Our cost of products sold was higher during the three months ended September 30, 2025 mainly due to the aforementioned timing of product sales in 2025 under an interim supply agreement with Zai Lab. Our cost of products sold increased during the nine months ended September 30, 2026, driven by higher product sales volume.

Previous wording

Research and development expenses for the three and six months ended June 30, 2026 were $5.2 million and $10.4 million, respectively. The expenses for the current period include additional personnel and facilities costs in support of the acquired IPR&D as discussed in Note 13, “Asset Acquisition”, in the Condensed Consolidated Financial Statements. Research and development expenses for the three and six months ended June 30, 2025, which consisted primarily of the continued advancement of zoliflodacin, approved by the FDA in December 2025, were $8.0 million and $12.4 million, respectively.

Current wording

Research and development expenses for the three and nine months ended September 30, 2026 were $5.2 million and $15.6 million, respectively. The expenses for the current period include additional personnel and facilities costs in support of the acquired IPR&D as discussed in Note 13, “Asset Acquisition”, in the Condensed Consolidated Financial Statements. Research and development expenses for the three and nine months ended September 30, 2025, which consisted primarily of the costs allocated to acquired IPR&D as discussed in Note 13 and the costs associated with the continued advancement of zoliflodacin, approved by the FDA in December 2025, were $13.7 million and $26.0 million, respectively.

Previous wording

Our selling, general and administrative expenses increased for the three and six months ended June 30, 2026, compared to the corresponding periods in 2025. The increase during the current period was primarily attributable to our ongoing efforts to expand our sales force to meet demand in new regions, promote our marketed critical care products and drive revenue, maintain regulatory compliance, and support essential administrative functions for general operations.

Current wording

Our selling, general and administrative expenses increased for the three and nine months ended September 30, 2026, compared to the corresponding periods in 2025. The increase during the current period was primarily attributable to our ongoing efforts to expand our sales force to meet demand in new regions, promote our marketed critical care products and drive revenue, maintain regulatory compliance, and support essential administrative functions for general operations.

Previous wording

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

Current wording

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

Previous wording

Our interest expense for the three and six months ended June 30, 2026 and 2025 comprised mainly of the contractual interest expense and the amortization of debt issuance costs for our 2028 Notes, as well as effective interest expense on our deferred royalty obligation related to GIAPREZA®. The increase for the three and six months ended June 30, 2026, compared to the same period in 2025, was mainly due to higher interest expense on our deferred royalty obligation as a result of higher sales performance of GIAPREZA®.

Current wording

Our interest expense for the three and nine months ended September 30, 2026 and 2025 comprised mainly of the contractual interest expense and the amortization of debt issuance costs for our 2028 Notes, as well as effective interest expense on our deferred royalty obligation related to GIAPREZA®. The increase for the three and nine months ended September 30, 2026, compared to the same period in 2025, was mainly due to higher interest expense 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 periods, were as follows:

Current wording

Changes in fair values of equity method investments and 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 and six months ended June 30, 2026 were driven by fluctuations in Armata’s stock price during the reporting periods. We recorded $131.8 million in unrealized loss and $25.8 million in unrealized gain for the three and six months ended June 30, 2026, respectively, compared to $13.1 million in unrealized gain and $0.5 million in unrealized loss for the three and six months ended June 30, 2025, respectively.

Current wording

The changes in fair values of equity method investments for the three and nine months ended September 30, 2026 were driven by fluctuations in Armata’s stock price during the reporting periods. We recorded $97.6 million and $71.8 million in unrealized loss for the three and nine months ended September 30, 2026, respectively, compared to $30.8 million and $30.3 million in unrealized gain for the three and nine months ended September 30, 2025, respectively.

Previous wording

We recorded $38.8 million in net negative changes in fair values of equity and long-term investments for the three months ended June 30, 2026 and $8.9 million in net positive changes in fair values of equity and long-term investments for the six months ended June 30, 2026, respectively, related to other long-term investments we made in Armata.

Current wording

We recorded $36.4 million and $27.5 million in net negative changes in fair values of equity and long-term investments for the three and nine months ended September 30, 2026, respectively, related to other long-term investments we made in Armata.

Previous wording

We recorded net positive changes in fair value of our investments in Syndeio of $6.6 million and net negative changes of $7.2 million for the three and six months ended June 30, 2026, respectively.

Current wording

We recorded net negative changes in fair value of our investments in Syndeio of $2.9 million and $10.0 million for the three and nine months ended September 30, 2026, respectively.

Previous wording

We recorded $3.0 million and $2.7 million in net positive 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, 2026, respectively.

Current wording

We recorded $2.7 million in unrealized net negative changes and $0.1 million in realized and unrealized net positive changes in fair values of equity and long-term investments related to the investments managed by ISP Fund LP for the three and nine months ended September 30, 2026, respectively.

Previous wording

We recorded income tax benefit of $24.6 million and income tax expense of $23.4 million for the three and six months ended June 30, 2026, respectively, compared to income tax expense of $8.9 million and $16.9 million for the three and six months ended June 30, 2025, respectively. The effective income tax rate for the six months ended June 30, 2026 and 2025 was 18.5% and 49.7%, respectively.

Current wording

We recorded income tax benefit of $23.7 million and $0.4 million for the three and nine months ended September 30, 2026, respectively, compared to income tax expense of $7.9 million and $24.8 million for the three and nine months ended September 30, 2025, respectively. The effective income tax rate for the nine months ended September 30, 2026 and 2025 was (1.2)% and 18.8%, 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 collaborative arrangements. For the six months ended June 30, 2026, we generated gross royalty revenues from GSK of $118.4 million, net product sales of $93.1 million and license and other revenue of $12.9 million. Cash and cash equivalents totaled $570.4 million, royalties receivable from GSK totaled $59.8 million and accounts receivable associated with our product sales and license and other revenue totaled $50.8 million as of June 30, 2026.

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 collaborative arrangements. For the nine months ended September 30, 2026, we generated gross royalty revenues from GSK of $176.5 million, net product sales of $142.6 million and license and other revenue of $15.0 million. Cash and cash equivalents totaled $581.4 million, royalties receivable from GSK totaled $58.1 million and accounts receivable associated with our product sales and license and other revenue totaled $44.0 million as of September 30, 2026.

Previous wording

As of June 30, 2026, we had one outstanding convertible note, the 2028 Notes, in an aggregate principal amount of $261.0 million, which will become due in March 2028. Future interest payments associated with this note total $13.9 million.

Current wording

As of September 30, 2026, we had one outstanding convertible note, the 2028 Notes, in an aggregate principal amount of $261.0 million, which will become due in March 2028. Future interest payments associated with this note total $8.3 million.

Previous wording

On November 3, 2025, our Board of Directors authorized a share repurchase program under which we may repurchase up to $125.0 million of Innoviva’s outstanding shares of common stock. From program inception through June 30, 2026, we have repurchased Innoviva common stock in the open market for total price of approximately $56.4 million. This program has no termination date, may be suspended or discontinued at any time at our discretion and does not oblige us to acquire any amount of common stock.

Current wording

On November 3, 2025, our Board of Directors authorized a share repurchase program under which we may repurchase up to $125.0 million of Innoviva’s outstanding shares of common stock. From program inception through September 30, 2026, we have repurchased Innoviva common stock in the open market for a total price of approximately $82.7 million. 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.

Previous wording

In 2024, we elected to unwind our capital accounts in ISP Fund LP. During the current year, we received $47.5 million cash distributions and expect to receive the remaining investments in 2026.

Current wording

In 2024, we elected to unwind our capital accounts in ISP Fund LP. During the current year, we received $47.5 million in cash distributions.

Previous wording

Net cash provided by operating activities for the six months ended June 30, 2026 was $87.3 million, consisting primarily of our net income of $103.2 million, adjusted for net non-cash items, which included $4.9 million of deferred income taxes, $13.2 million of amortization of acquired intangible assets, $7.0 million of amortization of capitalized fees and depreciation of property and equipment, $7.3 million of stock-based compensation and $2.0 million of inventory fair value step-up adjustments, offset by $30.2 million in net changes in fair value of our investments and $22.1 million in net changes in operating assets and liabilities.

Current wording

Net cash provided by operating activities for the nine months ended September 30, 2026 was $129.0 million, consisting primarily of our net income of $29.3 million, adjusted for net non-cash items, which included $109.3 million in net changes in fair value of our investments, $19.9 million of amortization of acquired intangible assets, $10.5 million of amortization of capitalized fees and depreciation of property and equipment, $11.0 million of stock-based compensation, $2.2 million of inventory fair value step-up adjustments and $1.1 million in amortization of debt discount and issuance costs, offset by $24.9 million of deferred taxes and $31.3 million in net changes in operating assets and liabilities.

Previous wording

Net cash provided by operating activities for the six months ended June 30, 2025 was $92.7 million, consisting primarily of our net income of $17.1 million, adjusted for net non-cash items, which included $54.5 million in changes in fair value of our investments, $13.0 million of amortization of acquired intangible assets, $7.0 million of amortization of capitalized fees and depreciation of property and equipment, $4.6 million of stock-based compensation and $1.1 million in amortization of debt discount and issuance costs, partially offset by $4.7 million in net changes in operating assets and liabilities.

Current wording

Net cash provided by operating activities for the nine months ended September 30, 2025 was $142.4 million, consisting primarily of our net income of $107.0 million, adjusted for net non-cash items, which included $19.6 million of amortization of acquired intangible assets, $10.5 million of amortization of capitalized fees and depreciation of property and equipment, $9.4 million of acquired IPR&D, $6.9 million of stock-based compensation, $4.1 million of inventory fair value step-up adjustments and $1.5 million in amortization of debt discount and issuance costs, partially offset by $7.8 million in net changes in fair value of our investments and $13.4 million in net changes in operating assets and liabilities.

Previous wording

Net cash used in investing activities for the six months ended June 30, 2026 of $18.3 million primarily consisted of $65.0 million in purchases of trading securities and other equity investments, $3.3 million in purchases of equity investments managed by ISP Fund LP and $0.9 million in purchases of property and equipment, partially offset by $44.1 million in sales of equity investments managed by ISP Fund LP, and $6.7 million in net purchases and sales of other investments managed by ISP Fund LP.

Current wording

Net cash used in investing activities for the nine months ended September 30, 2026 of $23.7 million primarily consisted of $70.5 million in purchases of trading securities and other equity investments, $3.3 million in purchases of equity investments managed by ISP Fund LP and $0.9 million in purchases of property and equipment, partially offset by $44.1 million in sales of equity investments managed by ISP Fund LP and $6.7 million in net purchases and sales of other investments managed by ISP Fund LP.

Previous wording

Net cash used in investing activities for the six months ended June 30, 2025 of $1.6 million primarily consisted of $34.7 million in purchases of trading securities, partially offset by $28.0 million in sales of equity investments and net purchases and sales of other investments managed by ISP Fund LP and $5.1 million in proceeds from trading securities.

Current wording

Net cash provided by investing activities for the nine months ended September 30, 2025 of $16.9 million primarily consisted of $71.9 million in sales of equity investments and net purchases and sales of other investments managed by ISP Fund LP and $5.1 million in proceeds from trading securities, partially offset by $49.7 million in purchases of trading securities, $9.4 million in cash paid for acquired IPR&D and $1.1 million in purchases of property and equipment.

Previous wording

Net cash used in financing activities for the six months ended June 30, 2026 of $49.6 million was primarily due to $51.3 million in repurchases of our common stock under the ongoing stock repurchase program, partially offset by net proceeds of $2.0 million from issuances of common stock.

Current wording

Net cash used in financing activities for the nine months ended September 30, 2026 of $74.8 million was primarily due to $77.4 million in repurchases of our common stock under the ongoing stock repurchase program, partially offset by net proceeds of $2.9 million from issuances of common stock.

Previous wording

Net cash provided by financing activities for the six months ended June 30, 2025 of $1.4 million was primarily due to net proceeds from issuances of common stock, partially offset by the repurchase of shares to satisfy tax withholding.

Current wording

Net cash provided by financing activities for the nine months ended September 30, 2025 of $12.3 million was primarily due to proceeds from exercise of warrants of $10.7 million and net proceeds from issuances of common stock of $1.7 million.

Previous wording

As of June 30, 2026, our notes payable obligation comprised of $261.0 million related to our 2028 Notes, which are due in 2028. Under the terms of the 2028 Notes, we make interest payments of 2.125% of outstanding principal. Refer to Note 11, “Debt” to the Condensed Consolidated Financial Statements for more information.

Current wording

As of September 30, 2026, our notes payable obligation consisted of $261.0 million related to our 2028 Notes, which are due in 2028. Under the terms of the 2028 Notes, we make interest payments of 2.125% of outstanding principal. Refer to Note 11, “Debt” to the Condensed Consolidated Financial Statements for more information.

Previous wording

Our short-term and long-term obligations also include contractual payments related to our operating leases amounting to $14.5 million, with approximately $0.6 million payable through December 31, 2026, amounts ranging between $1.2 million and $1.5 million payable in each of the years 2027 to 2030, and $8.5 million payable thereafter. 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 amounting to $14.2 million, with approximately $0.3 million payable through December 31, 2026, amounts ranging between $1.2 million and $1.5 million payable in each of the years 2027 to 2030, and $8.5 million payable thereafter. Refer to Note 12, “Commitments and Contingencies” to the Condensed Consolidated Financial Statements for more information.

Previous wording

Additionally, we have certain contingent payment obligations under various in-license agreements which we are required to make royalty payments or milestone payments upon successful completion and achievement of certain milestones. Refer to Note 4, “License, Collaboration and Other Arrangements” to the Condensed Consolidated Financial Statements for more information.

Current wording

Additionally, we have certain contingent payment obligations under various in-license agreements under which we are required to make royalty payments or milestone payments upon successful completion and achievement of certain milestones. Refer to Note 4, “License, Collaboration and Other Arrangements” to the Condensed Consolidated Financial Statements for more information.

Previous wording

We also entered into a Commercial Supply Agreement with Corden Pharma CHENÔVE SAS (“Corden”), under which we engaged Corden to manufacture and supply certain products related to XACDURO® and to perform certain services and studies. Under the agreement, we committed to minimum purchases through December 31, 2027. As of June 30, 2026, we have approximately $10.3 million U.S. dollar equivalent in outstanding purchase commitments under the agreement.

Current wording

We also entered into a Commercial Supply Agreement with Corden Pharma CHENÔVE SAS (“Corden”), under which we engaged Corden to manufacture and supply certain products related to XACDURO® and to perform certain services and studies. Under the agreement, we committed to minimum purchases through December 31, 2027. As of September 30, 2026, we have approximately $5.9 million U.S. dollar equivalent in outstanding purchase commitments under the agreement.