INVA Innoviva Inc.

13.7
+0.19  (+1%)
Previous Close 13.51
Open 13.55
52 Week Low 7.58
52 Week High 15.62
Market Cap $1,388,751,849
Shares 101,392,431
Float 57,643,980
Enterprise Value $1,333,895,742
Volume 154,855
Av. Daily Volume 689,160
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Drug Pipeline

Drug Stage Notes
Trelegy Ellipta (FF/UMEC/VI)
Chronic obstructive pulmonary disease (COPD)
Approved
Approved
Approval announced April 24, 2018 for expanded label.
Closed Triple
COPD
Approved
Approved
Approval announced September 19, 2017.
Trelegy Ellipta (FF/UMEC/VI)
Chronic obstructive pulmonary disease (COPD)
Approved
Approved
Approval announced September 18, 2017.

Latest News

    • Royalties increased by 7% to $72.4 million in the second quarter of 2020, compared to the same quarter in 2019.
    • Pavel Raifeld named as Chief Executive Officer.
    • Invested $35 million into common stock and warrants of Entasis Therapeutics Holding Inc. (NASDAQ:ETTX), a leader in anti-infectives development.

    Innoviva, Inc. (NASDAQ:INVA) (the Company) today reported financial results for the second quarter ended June 30, 2020.

    • Gross royalty revenues of $72.4 million from Glaxo Group Limited ("GSK") for the second quarter of 2020 included royalties of $45.6 million from global net sales of RELVAR®/BREO® ELLIPTA®, royalties of $11.2 million from global net sales of ANORO® ELLIPTA® and royalties of $15.6 million from global net sales of TRELEGY…
    • Royalties increased by 7% to $72.4 million in the second quarter of 2020, compared to the same quarter in 2019.
    • Pavel Raifeld named as Chief Executive Officer.
    • Invested $35 million into common stock and warrants of Entasis Therapeutics Holding Inc. (NASDAQ:ETTX), a leader in anti-infectives development.

    Innoviva, Inc. (NASDAQ:INVA) (the Company) today reported financial results for the second quarter ended June 30, 2020.

    • Gross royalty revenues of $72.4 million from Glaxo Group Limited ("GSK") for the second quarter of 2020 included royalties of $45.6 million from global net sales of RELVAR®/BREO® ELLIPTA®, royalties of $11.2 million from global net sales of ANORO® ELLIPTA® and royalties of $15.6 million from global net sales of TRELEGY® ELLIPTA®.1
    • Changes in fair values of equity investments of $46.7 million reflected the unrealized gains of $13.4 million related to our investment in Armata Pharmaceuticals Inc. and $33.3 million related to our investment in Entasis Therapeutics Holdings, Inc.
    • Income before income taxes increased by 109% to $118.1 million, compared to the same quarter in 2019.
    • Net cash and cash equivalents, short-term investments and marketable securities, excluding $4.9 million cash balance attributable to a variable interest entity, totaled $412.2 million, and receivables from GSK totaled $82.4 million, as of June 30, 2020.

    Pavel Raifeld, Chief Executive Officer, stated: "RELVAR®/BREO® ELLIPTA® global net sales decreased by 3% compared to the second quarter of 2019. U.S. net sales decreased by 11% as continued volume growth was more than offset by greater price discounting in the ICS/LABA sector. Non-U.S. sales increased by 2%, driven by sales growth in certain European markets, Japan and Canada.

    ANORO® ELLIPTA® global net sales increased by 5% in the second quarter of 2020 compared to the second quarter of the prior year. U.S. net sales increased by 7% due to significant volume growth, despite pricing pressure stemming from channel mix shift. Non-U.S. ANORO® ELLIPTA® net sales increased 2%, supported by growth in certain European markets. In addition, TRELEGY® ELLIPTA® global net sales were $240.5 million, compared to $151.4 million during comparable period a year ago.

    While the ultimate COVID-19 impact remains uncertain, we have seen signs of normalization over the past quarter. We were pleased with the meaningful volume growth across the portfolio, despite the challenging environment and certain pandemic-related stockpiling earlier in the year," continued Mr. Raifeld.

    Mr. Raifeld concluded, "After spending several weeks at Innoviva, I am even more excited about the potential for significant shareholder value creation. Capital allocation and cost discipline remain our key priorities, and we expect to continue to opportunistically invest in promising, differentiated assets, such as those developed by Armata and Entasis, that address significant unmet medical needs and offer attractive return profiles."

    Recent Highlights

    • GSK Net Sales:
      • Second quarter 2020 net sales of RELVAR®/BREO® ELLIPTA® by GSK were $303.8 million, down 3% from $313.9 million in the second quarter of 2019, with $103.3 million in net sales from the U.S. market and $200.5 million from non-U.S. markets.
      • Second quarter 2020 net sales of ANORO® ELLIPTA® by GSK were $172.3 million, up 5% from $163.6 million in the second quarter of 2019, with $109.8 million net sales from the U.S. market and $62.5 million from non-U.S. markets.
      • Second quarter 2020 net sales of TRELEGY® ELLIPTA® by GSK were $240.5 million, up significantly from $151.4 million in the second quarter of 2019, with $174.8 million in net sales from the U.S. market and $65.7 million in net sales from non-U.S. markets.
    • Capital Allocation:
      • During the second quarter of 2020, the Company invested $35.0 million in 14.0 million shares of common stock of Entasis Therapetutics, Inc., a company focused on development of novel anti-bacterial therapies for multi-drug resistant Gram-negative bacteria, which pose well acknowledged public health risk and a rapidly growing medical need, and warrants to purchase up to an additional 14.0 million shares of the common stock at $2.50 per share. With this initial investment, Innoviva owned approximately 51% of Entasis's common stock as of June 30, 2020. Innoviva has a right to designate two members to Entasis's board.

    1 For TRELEGY ® ELLIPTA®, Innoviva is entitled to 15% of royalty payments made by GSK that are assigned to TRC, LLC.

    About Innoviva

    Innoviva, Inc. (referred to as "Innoviva", the "Company", or "we" and other similar pronouns), is a company with a portfolio of royalties that include respiratory assets partnered with Glaxo Group Limited ("GSK"), including RELVAR®/BREO® ELLIPTA® (fluticasone furoate/ vilanterol, "FF/VI"), ANORO® ELLIPTA® (umeclidinium bromide/ vilanterol, "UMEC/VI") and TRELEGY® ELLIPTA® (the combination FF/UMEC/VI). Under the Long-Acting Beta2 Agonist ("LABA") Collaboration Agreement, Innoviva is entitled to receive royalties from GSK on sales of RELVAR®/BREO® ELLIPTA® and ANORO® ELLIPTA®. Innoviva is also entitled to 15% of royalty payments made by GSK under its agreements originally entered into with us, and since assigned to Theravance Respiratory Company, LLC ("TRC"), relating to TRELEGY® ELLIPTA® and any other product or combination of products that may be discovered and developed in the future under the LABA Collaboration Agreement and the Strategic Alliance Agreement with GSK (referred to herein as the "GSK Agreements"), which have been assigned to TRC other than RELVAR®/BREO® ELLIPTA® and ANORO® ELLIPTA®.

    ANORO®, RELVAR®, BREO®, TRELEGY® and ELLIPTA® are trademarks of the GlaxoSmithKline group of companies.

    Forward Looking Statements

    This press release contains certain "forward-looking" statements as that term is defined in the Private Securities Litigation Reform Act of 1995 regarding, among other things, statements relating to goals, plans, objectives and future events. Innoviva intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. The words "anticipate", "expect", "goal", "intend", "objective", "opportunity", "plan", "potential", "target" and similar expressions are intended to identify such forward-looking statements. Such forward-looking statements involve substantial risks, uncertainties and assumptions. These statements are based on the current estimates and assumptions of the management of Innoviva as of the date of this press release and are subject to known and unknown risks, uncertainties, changes in circumstances, assumptions and other factors that may cause the actual results of Innoviva to be materially different from those reflected in the forward-looking statements. Important factors that could cause actual results to differ materially from those indicated by such forward-looking statements include, among others, risks related to: expected cost savings; lower than expected future royalty revenue from respiratory products partnered with GSK; the commercialization of RELVAR®/BREO® ELLIPTA®, ANORO® ELLIPTA® and TRELEGY® ELLIPTA® in the jurisdictions in which these products have been approved; the strategies, plans and objectives of Innoviva (including Innoviva's growth strategy and corporate development initiatives beyond the existing respiratory portfolio); the timing, manner, and amount of potential capital returns to shareholders; the status and timing of clinical studies, data analysis and communication of results; the potential benefits and mechanisms of action of product candidates; expectations for product candidates through development and commercialization; the timing of regulatory approval of product candidates; and projections of revenue, expenses and other financial items; the impact of the novel coronavirus ("COVID-19"). Other risks affecting Innoviva are described under the headings "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" contained in Innoviva's Annual Report on Form 10-K for the year ended December 31, 2019 and Quarterly Reports on Form 10-Q, which are on file with the Securities and Exchange Commission ("SEC") and available on the SEC's website at www.sec.gov. Past performance is not necessarily indicative of future results. No forward-looking statements can be guaranteed and actual results may differ materially from such statements. Given these uncertainties, you should not place undue reliance on these forward-looking statements. The information in this press release is provided only as of the date hereof, and Innoviva assumes no obligation to update its forward-looking statements on account of new information, future events or otherwise, except as required by law.

    INNOVIVA, INC.
    Condensed Consolidated Statements of Income
    (in thousands, except per share data)
    (Unaudited)
     
    Three Months Ended Six Months Ended
    June 30, June 30,

    2020

    2019

    2020

    2019

    Revenue:
    Royalty revenue from a related party, net (1)

    $

    68,946

     

    $

    64,107

     

    $

    147,624

     

    $

    119,290

     

    Revenue from collaborative arrangements with a related party

     

    10,000

     

    -

     

     

    10,000

     

    -

     

    Total net revenue

     

    78,946

     

     

    64,107

     

    157,624

     

    119,290

     

     
    Operating expenses:
    Research and development

     

    559

     

    -

     

    559

     

     

    -

     

    General and administrative

    2,596

     

    4,347

     

    5,159

     

    7,362

     

    Total operating expenses

     

    3,155

     

     

    4,347

     

    5,718

     

    7,362

     

     
    Income from operations

    75,791

     

    59,760

     

    151,906

     

    111,928

     

     
    Other income (expense), net

     

    30

     

    (8

    )

    98

     

    (7

    )

    Interest income

    158

     

     

    1,403

     

    1,460

     

    2,378

     

    Interest expense

    (4,561

    )

    (4,661

    )

    (9,077

    )

    (9,278

    )

    Changes in fair values of equity investments

     

    46,698

     

    -

     

    68,613

     

    -

     

    Income before income taxes

     

    118,116

     

    56,494

     

    213,000

     

    105,021

     

    Income tax expense, net

     

    19,891

     

    10,433

     

    35,823

     

    18,941

     

    Net income

    98,225

     

     

    46,061

     

    177,177

     

     

    86,080

     

    Net income attributable to noncontrolling interest

    21,381

     

    8,321

     

    34,896

     

     

    14,550

     

    Net income attributable to Innoviva stockholders

    $

    76,844

     

    $

    37,740

     

    $

    142,281

     

    $

    71,530

     

     
    Basic net income per share attributable to Innoviva stockholders

    $

    0.76

     

    $

    0.37

     

    $

    1.40

     

    $

    0.71

     

    Diluted net income per share attributable to Innoviva stockholders

    $

    0.69

     

    $

    0.34

     

    $

    1.27

     

    $

    0.65

     

     
    Shares used to compute basic net income per share

    101,324

     

     

    101,151

     

     

    101,280

     

     

    101,105

     

    Shares used to compute diluted net income per share

    113,545

     

    113,391

     

     

    113,527

     

    113,384

     

    (1) Total net revenue from a related party is comprised of the following (in thousands):
     
    Three Months Ended Six Months Ended
    June 30, June 30,

    2020

    2019

    2020

    2019

    (unaudited) (unaudited)
     
    Royalties from a related party

    $

    72,402

     

    $

    67,563

     

    $

    154,536

     

    $

    126,202

     

    Amortization of capitalized fees paid to a related party

     

    (3,456

    )

    (3,456

    )

     

    (6,912

    )

     

    (6,912

    )

    Royalty revenue from a related party, net

    $

    68,946

     

    $

    64,107

     

    $

    147,624

     

    $

    119,290

     

    INNOVIVA, INC.
    Condensed Consolidated Balance Sheets
    (in thousands)
     
    June 30, December 31,

    2020

    2019

    (unaudited)

    (1)

     
    Assets
    Cash, cash equivalents and marketable securities

    $

    417,146

    $

    350,845

    Other current assets

    83,047

    80,389

    Property and equipment, net

     

    37

    33

    Equity investments

    128,613

    -

    Capitalized fees paid to a related party, net

    132,164

    139,076

    Deferred tax assets, net

    118,348

    154,171

    Other assets

    264

    312

    Total assets

    $

    879,619

    $

    724,826

     
     
    Liabilities and stockholders' equity
    Other current liabilities

    $

    1,262

    $

    1,219

    Accrued interest payable

    4,152

    4,152

    Convertible subordinated notes, net

    239,499

    239,217

    Convertible senior notes, net

    141,731

    137,903

    Other long-term liabilities

    163

    219

     
    Innoviva stockholders' equity

    456,907

    313,495

    Noncontrolling interest

    35,905

    28,621

     
    Total liabilities and stockholders' equity

    $

    879,619

    $

    724,826

    (1) The selected consolidated balance sheet amounts at December 31, 2019 are derived from audited financial statements.

    INNOVIVA, INC.
    Cash Flows Summary
    (in thousands)
     
     
    Six Months Ended June 30,

    2020

    2019

    (unaudited)
    Net cash provided by operating activities

    $

    153,275

     

    $

    133,151

     

    Net cash provided by (used in) investing activities

    9,044

     

    (54,060

    )

    Net cash provided by (used in) financing activities

    (27,268

    )

    444

     

     

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  1. WALTHAM, Mass., June 11, 2020 (GLOBE NEWSWIRE) -- Entasis Therapeutics Holdings Inc. (NASDAQ:ETTX) ("Entasis"), a clinical-stage biopharmaceutical company focused on the discovery and development of novel antibacterial products, today announced the closing of the second tranche of the $35 million common stock and warrant investment by Innoviva, Inc. (NASDAQ:INVA) ("Innoviva"), a company with a portfolio of royalties that include respiratory assets partnered with Glaxo Group Limited, under a securities purchase agreement signed on April 12, 2020 between the parties following a vote in favor of the transaction at the special meeting of Entasis stockholders held on June 10, 2020.  In connection with the second closing, Entasis issued 12,677,490…

    WALTHAM, Mass., June 11, 2020 (GLOBE NEWSWIRE) -- Entasis Therapeutics Holdings Inc. (NASDAQ:ETTX) ("Entasis"), a clinical-stage biopharmaceutical company focused on the discovery and development of novel antibacterial products, today announced the closing of the second tranche of the $35 million common stock and warrant investment by Innoviva, Inc. (NASDAQ:INVA) ("Innoviva"), a company with a portfolio of royalties that include respiratory assets partnered with Glaxo Group Limited, under a securities purchase agreement signed on April 12, 2020 between the parties following a vote in favor of the transaction at the special meeting of Entasis stockholders held on June 10, 2020.  In connection with the second closing, Entasis issued 12,677,490 shares of common stock and warrants to purchase 12,677,490 shares of common stock at an exercise price of $2.50 per share, for gross proceeds of approximately $31.7 million.   

    "Completion of our $35 million financing with Innoviva provides Entasis with the resources needed to complete ATTACK (Acinetobacter Treatment Trial Against Colistin), our global Phase 3 registration trial evaluating a fixed-dose combination of sulbactam and durlobactam (SUL-DUR) against Acinetobacter baumanii infections, and continue advancing our pipeline of pathogen-targeted antibacterial product candidates," stated Manos Perros, President and Chief Executive Officer of Entasis.  "In these uncertain times, we are very pleased to have the support of Innoviva as we continue to innovate against drug-resistant bacterial infections." 

    Following the closing of the second tranche of the financing, Innoviva holds an aggregate of 14 million shares of common stock and warrants to purchase 14 million shares of common stock.  Innoviva also has the right to appoint two directors to the Entasis Board of Directors.

    This press release does not constitute an offer to sell, or the solicitation of an offer to buy, any security and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offering, solicitation or sale would be unlawful.  The shares offered have not been registered under the Securities Act of 1933, as amended (the "Securities Act"), or applicable state securities laws and may not be offered or sold in the United States or any state thereof absent registration under the Securities Act and applicable state securities laws or an applicable exemption from registration requirements.

    About Entasis

    Entasis is a clinical-stage biopharmaceutical company focused on the discovery, development and commercialization of novel antibacterial products to treat serious infections caused by multidrug-resistant Gram-negative bacteria. Entasis' pathogen-targeted design platform has produced a pipeline of product candidates, including sulbactam-durlobactam (targeting Acinetobacter baumannii infections), zoliflodacin (targeting Neisseria gonorrhoeae infections), ETX0282CPDP (targeting Enterobacteriaceae infections) and ETX0462 (targeting Pseudomonas infections). For more information, visit www.entasistx.com.

    Entasis Forward-looking Statements

    This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as "may," "will," "expect," "plan," "anticipate," "estimate," "intend" and similar expressions (as well as other words or expressions referencing future events, conditions or circumstances) are intended to identify forward-looking statements. These forward-looking statements are based on Entasis' expectations and assumptions as of the date of this press release. Each of these forward-looking statements involves risks and uncertainties. Actual results may differ materially from these forward-looking statements. Many factors may cause differences between current expectations and actual results, including our plans to develop and commercialize our product candidates and the timing of execution of planned clinical trials and availability of data from our clinical trials.  Many of these factors are beyond Entasis' control. These and other risks and uncertainties are described more fully in the Entasis' filings with the Securities and Exchange Commission, including the section titled "Risk Factors" contained therein. Forward-looking statements contained in this announcement are made as of this date.  Entasis assumes no obligation to update any forward-looking statements contained herein to reflect any change in expectations, even as new information becomes available, except as required by law.

    Company Contact

    Kyle Dow

    Entasis Therapeutics

    (781) 810-0114

    Investor Relations Contacts

    Tram Bui / James Salierno

    The Ruth Group

    (646) 536-7035 / 7028



    Media Contact

    Kirsten Thomas

    The Ruth Group

    (508) 280-6592

    Primary Logo

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  2. Pavel Raifeld to continue the implementation of the Company's strategy and focus on value creation for shareholders

    Innoviva, Inc. (NASDAQ:INVA) ("Innoviva") today announced the appointment of Pavel Raifeld as Chief Executive Officer effective May 20, 2020. Mr. Raifeld is a seasoned healthcare executive with a strong background in strategy, business development and corporate finance and has focused much of his career on the creation of significant shareholder value. Mr. Raifeld replaces Geoff Hulme, who served as the Company's principal executive officer since May 2018.

    Prior to joining Innoviva, Pavel Raifeld, CFA, served on the investment team at Sarissa Capital Management LP, an investment management firm focused on improving strategies…

    Pavel Raifeld to continue the implementation of the Company's strategy and focus on value creation for shareholders

    Innoviva, Inc. (NASDAQ:INVA) ("Innoviva") today announced the appointment of Pavel Raifeld as Chief Executive Officer effective May 20, 2020. Mr. Raifeld is a seasoned healthcare executive with a strong background in strategy, business development and corporate finance and has focused much of his career on the creation of significant shareholder value. Mr. Raifeld replaces Geoff Hulme, who served as the Company's principal executive officer since May 2018.

    Prior to joining Innoviva, Pavel Raifeld, CFA, served on the investment team at Sarissa Capital Management LP, an investment management firm focused on improving strategies of companies to enhance shareholder value. Earlier, he was a senior member of the healthcare investment banking team at Credit Suisse (USA) LLC. Previously, Mr. Raifeld worked as a consultant, primarily specializing in advising biopharmaceutical companies, at McKinsey & Company, Inc. and The Boston Consulting Group Ltd. Mr. Raifeld earned an AB degree from Harvard University and an MBA degree from Columbia University.

    Dr. Odysseas Kostas, Chairman of the Board of Innoviva, stated, "We are excited to have Pavel join us. We believe the Company will benefit from his background and experience as the Company continues to move forward on the Board's strategy to maximize shareholder value and its focus on capital allocation. On behalf of the Board and all Innoviva employees, I would also like to thank Geoff for his commitment and many contributions to the Company."

    Mr. Raifeld said, "I am honored by and excited about the opportunity to lead Innoviva. I look forward to working alongside the experienced Board and talented team to build an even brighter future for this great company."

    The Company expects that Geoff Hulme will remain with the Company as an advisor for a period of time to ensure continuity.

    About Innoviva

    Innoviva, Inc. (referred to as "Innoviva", the "Company", or "we" and other similar pronouns), is a company with a portfolio of royalties that include respiratory assets partnered with Glaxo Group Limited ("GSK"), including RELVAR®/BREO® ELLIPTA® (fluticasone furoate/ vilanterol, "FF/VI"), ANORO® ELLIPTA® (umeclidinium bromide/ vilanterol, "UMEC/VI") and TRELEGY® ELLIPTA® (the combination FF/UMEC/VI). Under the Long-Acting Beta2 Agonist ("LABA") Collaboration Agreement, Innoviva is entitled to receive royalties from GSK on sales of RELVAR®/BREO® ELLIPTA® and ANORO® ELLIPTA®. Innoviva is also entitled to 15% of royalty payments made by GSK under its agreements originally entered into with us, and since assigned to Theravance Respiratory Company, LLC ("TRC"), relating to TRELEGY® ELLIPTA® and any other product or combination of products that may be discovered and developed in the future under the LABA Collaboration Agreement and the Strategic Alliance Agreement with GSK (referred to herein as the "GSK Agreements"), which have been assigned to TRC other than RELVAR®/BREO® ELLIPTA® and ANORO® ELLIPTA®.

    ANORO®, RELVAR®, BREO®, TRELEGY® and ELLIPTA® are trademarks of the GlaxoSmithKline group of companies.

    Forward-Looking Statements

    This press release contains certain "forward-looking" statements as that term is defined in the Private Securities Litigation Reform Act of 1995 regarding, among other things, statements relating to goals, plans, objectives and future events. Innoviva intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. The words "anticipate", "expect", "goal", "intend", "objective", "opportunity", "plan", "potential", "target" and similar expressions are intended to identify such forward-looking statements. Such forward-looking statements involve substantial risks, uncertainties and assumptions. These statements are based on the current estimates and assumptions of the management of Innoviva as of the date of this press release and are subject to known and unknown risks, uncertainties, changes in circumstances, assumptions and other factors that may cause the actual results of Innoviva to be materially different from those reflected in the forward-looking statements. Important factors that could cause actual results to differ materially from those indicated by such forward-looking statements include, among others, risks related to: expected cost savings; lower than expected future royalty revenue from respiratory products partnered with GSK; the commercialization of RELVAR®/BREO®ELLIPTA®, ANORO®ELLIPTA® and TRELEGY®ELLIPTA® in the jurisdictions in which these products have been approved; the strategies, plans and objectives of Innoviva (including Innoviva's growth strategy and corporate development initiatives beyond the existing respiratory portfolio); the timing, manner, and amount of potential capital returns to shareholders; the status and timing of clinical studies, data analysis and communication of results; the potential benefits and mechanisms of action of product candidates; expectations for product candidates through development and commercialization; the timing of regulatory approval of product candidates; projections of revenue, expenses and other financial items. Other risks affecting Innoviva are described under the headings "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" contained in Innoviva's Annual Report on Form 10-K for the year ended December 31, 2019, which is on file with the Securities and Exchange Commission ("SEC") and available on the SEC's website at www.sec.gov. Past performance is not necessarily indicative of future results. No forward-looking statements can be guaranteed and actual results may differ materially from such statements. Given these uncertainties, you should not place undue reliance on these forward-looking statements. The information in this press release is provided only as of the date hereof, and Innoviva assumes no obligation to update its forward-looking statements on account of new information, future events or otherwise, except as required by law.

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  3. WALTHAM, Mass., May 07, 2020 (GLOBE NEWSWIRE) -- Entasis Therapeutics Holdings Inc. (NASDAQ:ETTX), a clinical-stage biopharmaceutical company focused on the discovery and development of novel antibacterial products, announced today its first quarter 2020 financial results and provided a business update.

    "We are very pleased with the continued progress made during the first quarter of 2020, despite the COVID-19 pandemic's disruptions to clinical trials, the capital markets, and many other facets of our industry," commented Manos Perros, President and Chief Executive Officer of Entasis Therapeutics. "Our private placement with Innoviva, Inc. validates the hard work, resilience and innovative pipeline of our organization. With the proceeds, we…

    WALTHAM, Mass., May 07, 2020 (GLOBE NEWSWIRE) -- Entasis Therapeutics Holdings Inc. (NASDAQ:ETTX), a clinical-stage biopharmaceutical company focused on the discovery and development of novel antibacterial products, announced today its first quarter 2020 financial results and provided a business update.

    "We are very pleased with the continued progress made during the first quarter of 2020, despite the COVID-19 pandemic's disruptions to clinical trials, the capital markets, and many other facets of our industry," commented Manos Perros, President and Chief Executive Officer of Entasis Therapeutics. "Our private placement with Innoviva, Inc. validates the hard work, resilience and innovative pipeline of our organization. With the proceeds, we are advancing our pipeline of novel Gram-negative antibacterial product candidates and working to complete ATTACK (Acinetobacter Treatment Trial Against Colistin), our global Phase 3 registration trial evaluating a fixed-dose combination of sulbactam and durlobactam (SUL-DUR) against Acinetobacter baumannii infections. We continue to monitor the effects of the COVID-19 pandemic on our operations and are taking action to mitigate their impact on our two Phase 3 data readouts in 2021."

    First Quarter 2020 and Recent Highlights

    • In April, the Company entered into a securities purchase agreement with Innoviva, Inc. (NASDAQ:INVA), or Innoviva, to issue and sell in a private placement up to 14,000,000 newly issued shares of common stock and warrants with an exercise price of $2.50 per share. The private placement will occur in two tranches. The first tranche closed on April 22, 2020 as Innoviva purchased 1,322,510 shares of common stock and warrants to purchase 1,322,510 shares of common stock for an aggregate purchase price of approximately $3.3 million. At the closing of the second tranche, anticipated in June, Innoviva will purchase the remaining 12,677,490 shares of common stock and an equal number of warrants for an aggregate purchase price of approximately $31.7 million.

    • The Company continues to advance its ATTACK Phase 3 registration trial to evaluate SUL-DUR for the treatment of patients with pneumonia and bloodstream infections caused by carbapenem-resistant Acinetobacter baumannii. ATTACK is a global, two-part Phase 3 registration trial set to enroll a total of approximately 300 patients. As previously announced, the coronavirus outbreak in countries where we are conducting the ATTACK registration trial is impacting patient recruitment, and we anticipate topline data to be available in early 2021. The Company is continuing to monitor the situation closely and is actively taking steps to lessen the impact of the COVID-19 pandemic on the trial timeline.

    • The global Phase 3 registration trial of zoliflodacin for the treatment of uncomplicated gonorrhea with the Global Antibiotic Research and Development Partnership (GARDP) will enroll approximately 1,000 patients with urogenital gonorrhea at clinical trial sites in the United States and internationally. The trial will assess the safety and efficacy of zoliflodacin versus the combination of azithromycin and ceftriaxone, the current standard of care. GARDP is fully funding and sponsoring the Phase 3 trial in exchange for exclusive commercial rights in low-income and select middle-income countries. Although enrollment progressed within the first quarter of 2020, given the focus of our clinical trial sites on addressing the immediate medical needs of patients due to the COVID-19 pandemic, GARDP, with our full agreement, has made the decision in late-March to temporarily suspend patient enrollment into the Phase 3 registration trial at U.S. sites and new clinical trial site activation in ex-U.S. regions.  The Company is working closely with GARDP to mitigate the impact of the temporary suspension and still anticipates data readout from the Phase 3 registration trial in 2H 2021.

    • The global outbreak of a novel strain of coronavirus (COVID-19) has, and will likely continue to have, a significant impact on the U.S. economy and businesses. The social distancing and stay-at-home orders issued by national, state and local governments have resulted in closures of offices and factories and disrupted supply chains.  The pandemic also has taxed healthcare systems both in the U.S. and around the world, resulting in disruption to or temporary suspension of clinical trials.  As a result of these changes, the timelines for completion of our clinical trials and earlier-stage development programs may be impacted.  Although we are continuing to actively monitor and assess the effects of the COVID-19 pandemic on our business and development programs, the ultimate impact of the coronavirus pandemic is highly uncertain and subject to change.

    First Quarter 2020 Financial Results

    The Company reported a net loss of $15.3 million for the quarter ended March 31, 2020, compared to a net loss of $12.9 million for the quarter ended March 31, 2019. The increase in net loss was primarily due to a decrease in other income and increases in research and development and general and administration expenses.

    Research and development expenses were $11.6 million for the quarter ended March 31, 2020, compared to $11.0 million for the quarter ended March 31, 2019. The increase of $0.6 million was primarily due to increases in costs associated with higher headcount offset by decreases in preclinical expenses.

    General and administrative expenses were $3.8 million for the quarter ended March 31, 2020, compared to $3.2 million for the quarter ended March 31, 2019. The increase was primarily due to costs associated with higher headcount.

    As of March 31, 2020, cash, cash equivalents and short-term investments were $27.5 million, compared to $41.0 million as of December 31, 2019. The Company believes its cash position as of March 31, 2020 provides a cash runway into the fourth quarter of 2020.  Including the funding from Innoviva, the Company forecasts operating capital into the middle of 2021.

    About Entasis
    Entasis is a clinical-stage biopharmaceutical company focused on the discovery, development and commercialization of novel antibacterial products to treat serious infections caused by multidrug-resistant Gram-negative bacteria. Entasis' pathogen-targeted design platform has produced a pipeline of product candidates, including sulbactam-durlobactam (targeting Acinetobacter baumannii infections), zoliflodacin (targeting Neisseria gonorrhoeae infections), ETX0282CPDP (targeting Enterobacteriaceae infections) and ETX0462 (targeting Pseudomonas infections). For more information, visit www.entasistx.com.

    Entasis Forward-looking Statements
    This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as "may," "will," "expect," "plan," "anticipate," "estimate," "intend" and similar expressions (as well as other words or expressions referencing future events, conditions or circumstances) are intended to identify forward-looking statements. These forward-looking statements are based on Entasis' expectations and assumptions as of the date of this press release. Each of these forward-looking statements involves risks and uncertainties. Actual results may differ materially from these forward-looking statements. Many factors may cause differences between current expectations and actual results, including unexpected safety or efficacy data observed during non-clinical or clinical studies, clinical site activation rates or clinical trial enrollment rates that are lower than expected and changes in expected or existing competition, changes in the regulatory environment, failure of Entasis' collaborators to support or advance collaborations or product candidates and unexpected litigation or other disputes. Many of these factors are beyond Entasis' control. These and other risks and uncertainties are described more fully in the Entasis' filings with the U.S. Securities and Exchange Commission, including the section titled "Risk Factors" contained therein. Forward-looking statements contained in this announcement are made as of this date, and except as required by law, Entasis assumes no obligation to update any forward-looking statements contained herein to reflect any change in expectations, even as new information becomes available.

    Company Contact
    Kyle Dow
    Entasis Therapeutics
    (781) 810-0114
     

    Investor Relations Contacts
    Tram Bui / James Salierno
    The Ruth Group
    (646) 536-7035 / 7028
     
     

    Media Contact
    Kirsten Thomas
    The Ruth Group
    (508) 280-6592
     

    (Financial Tables Follow)

     
     
    Entasis Therapeutics Holdings Inc.
    Consolidated Statements of Operations
    Unaudited
    (in thousands, except share and per share data)
                 
        Three Months Ended March 31,
          2020       2019  
                     
    Operating expenses:            
    Research and development   $ 11,623     $ 11,002  
    General and administrative     3,780       3,189  
    Total operating expenses     15,403       14,191  
    Loss from operations     (15,403 )     (14,191 )
    Other income:            
    Grant income     13       829  
    Interest income     124       492  
    Total other income     137       1,321  
    Loss before income taxes     (15,266 )     (12,870 )
    Provision for income taxes           71  
    Net loss   $ (15,266 )   $ (12,941 )
    Net loss per share—basic and diluted   $ (1.15 )   $ (0.99 )
    Weighted average common stock outstanding—basic and diluted     13,291,563       13,126,595  
                 


    Entasis Therapeutics Holdings Inc.
    Condensed Consolidated Balance Sheets
    Unaudited
    (in thousands)
                 
          March 31,     December 31,
          2020     2019
                 
    Cash, cash equivalents and short-term investments   $ 27,466   $ 40,996
    Other assets     7,194     10,038
    Total assets   $ 34,660   $ 51,034
                 
    Total liabilities   $ 6,956   $ 8,877
    Total stockholders' equity     27,704     42,157
    Total liabilities and stockholders' equity   $ 34,660   $ 51,034
                 

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    • Total net revenue increased by 43% to $78.7 million in the first quarter of 2020, compared to the same quarter in 2019.
    • Income before income taxes increased by 96% to $94.9 million in the first quarter of 2020, compared to the same quarter in 2019.

    Innoviva, Inc. (NASDAQ:INVA) ("Innoviva," or "the Company") today reported financial results for the first quarter ended March 31, 2020.

    • Gross royalty revenues of $82.1 million from Glaxo Group Limited ("GSK") for the first quarter of 2020 included royalties of $56.1 million from global net sales of RELVAR®/BREO® ELLIPTA®, royalties of $9.9 million from global net sales of ANORO® ELLIPTA® and $16.1 million from global net sales of TRELEGY® ELLIPTA®.[1]
    • Total operating expenses for the first…
    • Total net revenue increased by 43% to $78.7 million in the first quarter of 2020, compared to the same quarter in 2019.
    • Income before income taxes increased by 96% to $94.9 million in the first quarter of 2020, compared to the same quarter in 2019.

    Innoviva, Inc. (NASDAQ:INVA) ("Innoviva," or "the Company") today reported financial results for the first quarter ended March 31, 2020.

    • Gross royalty revenues of $82.1 million from Glaxo Group Limited ("GSK") for the first quarter of 2020 included royalties of $56.1 million from global net sales of RELVAR®/BREO® ELLIPTA®, royalties of $9.9 million from global net sales of ANORO® ELLIPTA® and $16.1 million from global net sales of TRELEGY® ELLIPTA®.[1]
    • Total operating expenses for the first quarter of 2020 were $2.6 million, compared to $3.0 million in the first quarter of 2019. Stock-based compensation for the first quarter of 2020 was $0.4 million, compared to $0.6 million in the first quarter of 2019.
    • Changes in fair values of equity investments in the amount of $21.9 million as of March 31, 2020 reflect the unrealized gains and fair value changes between the total estimated fair value of $46.9 million of our investment in both common stock and warrants of Armata Pharmaceuticals, Inc. ("Armata") and the total purchase price of $25.0 million.
    • Net cash and cash equivalents, short-term investments and marketable securities totaled $384.0 million, and royalties receivable from GSK totaled $82.1 million, as of March 31, 2020.

    "Global net sales of RELVAR®/BREO® ELLIPTA® increased 31% versus the first quarter of 2019. U.S. net sales increased by 47% as increased pricing discounts in the ICS/LABA sector were offset by a one-time significant positive prior period rebate adjustment and continued volume growth. Non-U.S. sales increased 23% versus the first quarter of 2019, driven by sales growth in certain European markets and in Japan. ANORO® ELLIPTA® global net sales increased 15% in the first quarter of 2020. U.S. net sales increased 8% as volume growth offset price pressure from increased amounts of sales through market segments with higher rebates. Non-U.S. ANORO® ELLIPTA® net sales grew 24% year over year in the quarter supported by growth in certain European markets. In addition, TRELEGY® ELLIPTA® global net sales were $248.2 million," stated Geoffrey Hulme, Interim Principal Executive Officer.

    Hulme continued, "At this point, the impact of the COVID-19 pandemic on the global sales of our three collaboration products is uncertain. Based on our end-market observations, first quarter sales levels may have benefited from unspecified levels of increased patient inventory stocking. Also, the significant RELVAR ®/BREO ®ELLIPTA® positive prior period rebate adjustment that occurred during the first quarter is not likely to recur in future quarters."

    Hulme concluded, "After the end of the quarter, we were pleased to announce the first closing of a new investment in Entasis Therapeutics, a company focused on the development of novel antibiotics to address multi-drug resistant gram-negative bacteria. Antibiotic-resistant bacterial infections pose an increasing global health risk and are creating a growing need for new treatment options. Innoviva's investment will help Entasis continue to develop two antibiotics currently in phase three trials. The Armata and Entasis transactions are part of our ongoing efforts to pursue capital allocation options that maximize future shareholder value."

    Recent Highlights

    • GSK Net Sales:
      • First quarter 2020 net sales of RELVAR®/BREO® ELLIPTA® by GSK were $374.3 million, up 31% from $284.9 million in the first quarter of 2019, with $147.5 million in net sales from the U.S. market and $226.8 million from non-U.S. markets.
      • First quarter 2020 net sales of ANORO® ELLIPTA® by GSK were $151.6 million, up 15% from $131.8 million in the first quarter of 2019, with $81.8 million net sales from the U.S. market and $69.8 million from non-U.S. markets.
      • First quarter 2020 net sales of TRELEGY® ELLIPTA® by GSK were $248.2 million, up significantly from $112.7 million in the first quarter of 2019, with $172.4 million in net sales from the U.S. market and $75.8 million in net sales from non-U.S. markets.
    • Capital Allocation:
      • On April 12, 2020, Innoviva entered into a securities purchase agreement with Entasis Therapeutics, Inc. (NASDAQ:ETTX), pursuant to which it will purchase, upon satisfaction of certain closing conditions, approximately $35.0 million of Entasis common stock and warrant securities.
      • During the first quarter of 2020, the Company invested $25.0 million in 8,710,800 shares of Armata's common stock and warrants to purchase up to an additional 8,710,800 shares of the common stock at $2.87 per share. As of this initial investment, Innoviva owns approximately 47% of Armata's common stock as of March 31, 2020.

    1 For TRELEGY ® ELLIPTA®, Innoviva is entitled to 15% of royalty payments made by GSK that are assigned to TRC, LLC.

    About Innoviva

    Innoviva, Inc. (referred to as "Innoviva", the "Company", or "we" and other similar pronouns), is a company with a portfolio of royalties that include respiratory assets partnered with Glaxo Group Limited ("GSK"), including RELVAR®/BREO® ELLIPTA® (fluticasone furoate/ vilanterol, "FF/VI"), ANORO® ELLIPTA® (umeclidinium bromide/ vilanterol, "UMEC/VI") and TRELEGY® ELLIPTA® (the combination FF/UMEC/VI). Under the Long-Acting Beta2 Agonist ("LABA") Collaboration Agreement, Innoviva is entitled to receive royalties from GSK on sales of RELVAR®/BREO® ELLIPTA® and ANORO® ELLIPTA®. Innoviva is also entitled to 15% of royalty payments made by GSK under its agreements originally entered into with us, and since assigned to Theravance Respiratory Company, LLC ("TRC"), relating to TRELEGY® ELLIPTA® and any other product or combination of products that may be discovered and developed in the future under the LABA Collaboration Agreement and the Strategic Alliance Agreement with GSK (referred to herein as the "GSK Agreements"), which have been assigned to TRC other than RELVAR®/BREO® ELLIPTA® and ANORO® ELLIPTA®.

    ANORO®, RELVAR®, BREO®, TRELEGY® and ELLIPTA® are trademarks of the GlaxoSmithKline group of companies.

    Forward Looking Statements

    This press release contains certain "forward-looking" statements as that term is defined in the Private Securities Litigation Reform Act of 1995 regarding, among other things, statements relating to goals, plans, objectives and future events. Innoviva intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. The words "anticipate", "expect", "goal", "intend", "objective", "opportunity", "plan", "potential", "target" and similar expressions are intended to identify such forward-looking statements. Such forward-looking statements involve substantial risks, uncertainties and assumptions. These statements are based on the current estimates and assumptions of the management of Innoviva as of the date of this press release and are subject to known and unknown risks, uncertainties, changes in circumstances, assumptions and other factors that may cause the actual results of Innoviva to be materially different from those reflected in the forward-looking statements. Important factors that could cause actual results to differ materially from those indicated by such forward-looking statements include, among others, risks related to: expected cost savings; lower than expected future royalty revenue from respiratory products partnered with GSK; the commercialization of RELVAR®/BREO® ELLIPTA®, ANORO® ELLIPTA® and TRELEGY® ELLIPTA® in the jurisdictions in which these products have been approved; the impact of the COVID-19 pandemic; the strategies, plans and objectives of Innoviva (including Innoviva's growth strategy and corporate development initiatives beyond the existing respiratory portfolio); the timing, manner, and amount of potential capital returns to shareholders; the status and timing of clinical studies, data analysis and communication of results; the potential benefits and mechanisms of action of product candidates; expectations for product candidates through development and commercialization; the timing of regulatory approval of product candidates; and projections of revenue, expenses and other financial items. Other risks affecting Innoviva are described under the headings "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" contained in Innoviva's Annual Report on Form 10-K for the year ended December 31, 2019, which is on file with the Securities and Exchange Commission ("SEC") and available on the SEC's website at www.sec.gov. Past performance is not necessarily indicative of future results. No forward-looking statements can be guaranteed and actual results may differ materially from such statements. Given these uncertainties, you should not place undue reliance on these forward-looking statements. The information in this press release is provided only as of the date hereof, and Innoviva assumes no obligation to update its forward-looking statements on account of new information, future events or otherwise, except as required by law.

    INNOVIVA, INC.
    Condensed Consolidated Statements of Income
    (in thousands, except per share data)
    (Unaudited)
     

    Three Months Ended

    March 31,

    2020

     

    2019

    Revenue:  
    Royalty revenue from a related party, net (1)

    $

    78,678

     

     

    $

    55,183

     

     
    Operating expenses:  
    General and administrative

     

    2,563

     

     

     

    3,015

     

    Total operating expenses

     

    2,563

     

     

     

    3,015

     

     
    Income from operations

     

    76,115

     

     

     

    52,168

     

     
    Other income, net

     

    68

     

     

     

    1

     

    Interest income

     

    1,302

     

     

     

    975

     

    Interest expense

     

    (4,516

    )

     

     

    (4,617

    )

    Changes in fair values of equity investments

     

    21,915

     

     

     

    -

     

    Income before income taxes

     

    94,884

     

     

     

    48,527

     

    Income tax expense, net

     

    15,932

     

     

     

    8,508

     

    Net income

     

    78,952

     

     

     

    40,019

     

    Net income attributable to noncontrolling interest

     

    13,515

     

     

     

    6,229

     

    Net income attributable to Innoviva stockholders

    $

    65,437

     

     

    $

    33,790

     

     
    Basic net income per share attributable to Innoviva stockholders

    $

    0.65

     

     

    $

    0.33

     

    Diluted net income per share attributable to Innoviva stockholders

    $

    0.59

     

     

    $

    0.31

     

     
    Shares used to compute basic net income per share

     

    101,235

     

     

     

    101,059

     

    Shares used to compute diluted net income per share

     

    113,509

     

     

     

    113,376

     

    (1) Total net revenue from a related party is comprised of the following (in thousands):
     

    Three Months Ended

    March 31,

    2020

     

    2019

    (unaudited)

     
    Royalties from a related party

    $

    82,134

     

    $

    58,639

     

    Amortization of capitalized fees paid to a related party

     

    (3,456

    )

     

    (3,456

    )

    Royalty revenue from a related party, net

    $

    78,678

     

    $

    55,183

     

    INNOVIVA, INC.
    Condensed Consolidated Balance Sheets
    (in thousands)
     

    March 31,

     

    December 31,

    2020

     

    2019

    (unaudited)

     

    (1)

     
    Assets
    Cash, cash equivalents and marketable securities

    $

    383,951

     

    $

    350,845

     

    Other current assets

     

    82,956

     

     

    80,389

     

    Property and equipment, net

     

    42

     

     

    33

     

    Equity investments

     

    46,915

     

     

    -

     

    Capitalized fees paid to a related party, net

     

    135,620

     

     

    139,076

     

    Deferred tax assets, net

     

    138,239

     

     

    154,171

     

    Other assets

     

    288

     

     

    312

     

    Total assets

    $

    788,011

     

    $

    724,826

     

     
     
    Liabilities and stockholders' equity
    Other current liabilities

    $

    1,130

     

    $

    1,219

     

    Accrued interest payable

     

    1,668

     

     

    4,152

     

    Convertible subordinated notes, net

     

    239,355

     

     

    239,217

     

    Convertible senior notes, net

     

    139,797

     

     

    137,903

     

    Other long-term liabilities

     

    192

     

     

    219

     

     
    Innoviva stockholders' equity

     

    379,543

     

     

    313,495

     

    Noncontrolling interest

     

    26,326

     

     

    28,621

     

     
    Total liabilities and stockholders' equity

    $

    788,011

     

    $

    724,826

     

     
    (1) The selected consolidated balance sheet amounts at December 31, 2019 are derived from audited financial statements.
    INNOVIVA, INC.
    Cash Flows Summary
    (in thousands)
     

    Three Months Ended March 31,

    2020

     

    2019

    (unaudited)

    Net cash provided by operating activities

    $

    73,481

     

    $

    76,655

     

    Net cash provided by (used in) investing activities

     

    16,044

     

     

    (74,167

    )

    Net cash provided by (used in) financing activities

     

    (15,640

    )

     

    246

     

     

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