PART I — FINANCIAL INFORMATION [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) The company's financial statements for the quarter ended March 31, 2019, show an increase in total assets and stockholders' equity compared to year-end 2018, with net income rising to $40.0 million from $30.3 million in the prior-year period, driven by higher royalty revenue and significantly lower operating expenses, alongside strong cash flow from operations at $76.7 million and the adoption of the new lease standard (ASC 842) on January 1, 2019 [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2019 | December 31, 2018 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $65,151 | $62,417 | | Total current assets | $251,519 | $199,043 | | **Total assets** | **$590,114** | **$548,193** | | **Liabilities & Equity** | | | | Total current liabilities | $3,810 | $5,700 | | Long-term debt, net | $384,744 | $382,855 | | **Total stockholders' equity** | **$199,943** | **$159,052** | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Condensed Consolidated Statements of Operations (in thousands, except per share data) | Metric | Q1 2019 | Q1 2018 | | :--- | :--- | :--- | | Royalty revenue from a related party, net | $55,183 | $52,380 | | Total operating expenses | $3,015 | $11,685 | | Income from operations | $52,168 | $40,695 | | **Net income** | **$40,019** | **$30,330** | | Net income attributable to Innoviva stockholders | $33,790 | $29,581 | | **Diluted net income per share** | **$0.31** | **$0.27** | [Condensed Consolidated Statements of Comprehensive Income](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) Condensed Consolidated Statements of Comprehensive Income (in thousands) | Metric | Q1 2019 | Q1 2018 | | :--- | :--- | :--- | | Net income | $40,019 | $30,330 | | Comprehensive income | $40,032 | $30,326 | | Comprehensive income attributable to Innoviva stockholders | $33,803 | $29,577 | [Condensed Consolidated Statements of Stockholders' Equity (Deficit)](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity%20(Deficit)) - Total stockholders' equity increased from **$159.1 million** at December 31, 2018, to **$199.9 million** at March 31, 2019, primarily driven by net income of **$40.0 million**[19](index=19&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Condensed Consolidated Statements of Cash Flows (in thousands) | Cash Flow Activity | Q1 2019 | Q1 2018 | | :--- | :--- | :--- | | Net cash provided by operating activities | $76,655 | $49,914 | | Net cash provided by (used in) investing activities | ($74,167) | $26,513 | | Net cash provided by (used in) financing activities | $246 | ($122,625) | | **Net increase (decrease) in cash** | **$2,734** | **($46,198)** | [Notes to Unaudited Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) - Innoviva's business is focused on royalty management, with a portfolio including respiratory assets partnered with GSK, such as RELVAR®/BREO® ELLIPTA®, ANORO® ELLIPTA®, and TRELEGY® ELLIPTA®[23](index=23&type=chunk) Net Revenue from GSK Agreements (in thousands) | Product Royalties | Q1 2019 | Q1 2018 | | :--- | :--- | :--- | | RELVAR/BREO | $42,740 | $46,160 | | ANORO | $8,570 | $8,724 | | TRELEGY | $7,329 | $952 | | **Total royalties from a related party** | **$58,639** | **$55,836** | - The company adopted the new lease accounting standard (ASU 2016-02, Leases (Topic 842)) on January 1, 2019, resulting in the recognition of a **$1.5 million** right-of-use asset and **$1.6 million** in lease liabilities[27](index=27&type=chunk)[28](index=28&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=16&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management reports a 5% year-over-year increase in total net revenue to $55.2 million for Q1 2019, primarily driven by strong growth in TRELEGY® ELLIPTA® royalties, which offset declines in RELVAR®/BREO® and ANORO® royalties due to pricing pressures, while operating expenses decreased significantly by $8.7 million mainly from the absence of one-time severance and settlement costs incurred in Q1 2018, and the company maintains a strong liquidity position with $192.2 million in cash and marketable securities, believing it has sufficient resources for at least the next 12 months GSK Net Sales of Key Products - Q1 2019 vs Q1 2018 | Product | Q1 2019 Net Sales | Q1 2018 Net Sales | % Change | | :--- | :--- | :--- | :--- | | RELVAR®/BREO® ELLIPTA® | $284.9M | $307.7M | -7% | | ANORO® ELLIPTA® | $131.8M | $134.2M | -2% | | TRELEGY® ELLIPTA® | $112.7M | $14.6M | +672% | - General and administrative expenses decreased by **66%** to **$3.0 million** in Q1 2019 from **$9.0 million** in Q1 2018, with the prior year's quarter including **$3.2 million** in cash severance payments and a **$2.7 million** settlement reimbursement to Sarissa Group[74](index=74&type=chunk) - Interest expense decreased by **40%** to **$4.6 million** in Q1 2019, primarily due to a lower average outstanding debt balance following prepayments on the Term B Loan in 2018[77](index=77&type=chunk) - The company believes its cash from future royalties, along with existing cash, cash equivalents, and marketable securities, will be sufficient to meet debt service and operating needs for at least the next 12 months[82](index=82&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=23&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company reported no significant changes to its market risk profile or its management of market risk since the disclosures made in its 2018 Annual Report on Form 10-K - There have been no significant changes in the company's market risk or how it is managed compared to what was disclosed in the Annual Report on Form 10-K for the year ended December 31, 2018[92](index=92&type=chunk) [Item 4. Controls and Procedures](index=23&type=section&id=Item%204.%20Controls%20and%20Procedures) Based on an evaluation as of March 31, 2019, the company's management, including the Interim Principal Executive Officer and Chief Accounting Officer, concluded that disclosure controls and procedures were effective, with no material changes in internal control over financial reporting during the quarter - Management concluded that as of March 31, 2019, the company's disclosure controls and procedures were effective at a reasonable assurance level[93](index=93&type=chunk) - No material changes occurred in the company's internal control over financial reporting during the quarter ended March 31, 2019[95](index=95&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=24&type=section&id=Item%201.%20Legal%20Proceedings) The company reports that it is not currently a party to any material legal proceedings - The company is not a party to any material legal proceedings[97](index=97&type=chunk) [Item 1A. Risk Factors](index=24&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2018 - No material changes have occurred to the risk factors described in the 2018 Form 10-K[98](index=98&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=24&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities during the period - None[99](index=99&type=chunk) [Item 3. Defaults Upon Senior Securities](index=24&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities - None[100](index=100&type=chunk) [Item 6. Exhibits](index=24&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the quarterly report, which include officer certifications as required by the Sarbanes-Oxley Act and the Interactive Data File (XBRL) - The exhibits filed with this report include Certifications of the Principal Executive Officer (31.1) and Principal Financial Officer (31.2), Certifications Pursuant to 18 U.S.C. Section 1350 (32), and the Interactive Data File (101)[103](index=103&type=chunk) Signatures [Signatures](index=25&type=section&id=Signatures_details) The report was duly signed and authorized on May 1, 2019, by Geoffrey Hulme, the Interim Principal Executive Officer, and Marianne Zhen, the Chief Accounting Officer - The report was signed on May 1, 2019, by Geoffrey Hulme (Interim Principal Executive Officer) and Marianne Zhen (Chief Accounting Officer)[107](index=107&type=chunk)

Financial Data and Key Metrics Changes - For Q4 2018, GIAPREZA net product sales were $4.2 million, up from $3.5 million in Q3 2018, $1.6 million in Q2 2018, and $0.8 million in Q1 2018 [16] - For the full year 2018, GIAPREZA net product sales totaled $10.1 million, with a net loss of $45.4 million for Q4 and $199.5 million for the full year [16] - Cash and cash equivalents increased to $172 million as of December 31, 2018, compared to $90.9 million a year earlier, primarily due to proceeds from stock offerings and royalty financing [17] Business Line Data and Key Metrics Changes - GIAPREZA was launched in March 2018 and has been ordered by approximately 380 hospitals, with a focus on securing formulary approvals to access about 70% of patients treated for distributive shock [13][14] - The company expects net product sales for GIAPREZA in 2019 to be between $24 million and $28 million [16] Market Data and Key Metrics Changes - In the U.S., there are approximately 800,000 cases of distributive shock annually, with 300,000 patients unable to achieve adequate blood pressure despite existing treatments [12] - In the European Union, the annual incidence of sepsis is estimated to exceed 500,000, with over 170,000 patients progressing to septic shock [14] Company Strategy and Development Direction - The company aims to file an NDA for LJPC-0118 for severe malaria in Q4 2019 and expects to report top-line results for LJPC-401 in mid-2020 [25] - The strategic focus includes expanding the commercialization of GIAPREZA and advancing clinical development programs for other product candidates [25] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the potential of GIAPREZA to change treatment for patients with septic or distributive shock and highlighted the importance of securing hospital access [10][25] - The company anticipates a significant reduction in operating expenses in 2019 compared to 2018, with a focus on maintaining efficiency in generating GIAPREZA sales [39] Other Important Information - The company has no debt as of December 31, 2018, and expects net cash used for operating activities in 2019 to be between $89 million and $94 million [17] - The company is preparing for potential partnerships in Europe following the expected decision on the MAA for GIAPREZA in June 2019 [49] Q&A Session Summary Question: What amount of iron induction in the heart would be needed for the drug to be commercially viable? - Management indicated that the effectiveness of current chelators varies, and achieving statistical significance in the trial would be clinically meaningful [28] Question: What is the current access percentage of GIAPREZA for patients with distributive shock? - Management stated that they are currently in the 35% to 40% range for access, aiming for 70% [35] Question: What are the plans for beta thalassemia in the U.S.? - Management confirmed that the FDA is aware of their protocol and they are confident in achieving a good chance of approval if statistical significance is reached [38] Question: What is the cash runway? - Management indicated that the current cash balance allows for operations into the second half of 2020 [33] Question: What data is being used for the NDA filing for LJPC-0118? - Management confirmed that they are finalizing a clinical study and have sufficient data showing a survival benefit for the active ingredient [52] Question: What is the expected marketing strategy for LJPC-0118? - Management believes that the existing infrastructure will support marketing efforts, given the limited number of severe malaria cases in the U.S. [55]

Use these links to rapidly review the document Table of Contents ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA PART IV UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ý ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2018 or o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File No. 000-30319 INNOV ...

Corporate Presentation Developing Innovative Therapies for Patients Suffering from Life-threatening Diseases NASDAQ: LJPC January 2019 Forward-Looking Statements These slides contain forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995, including, but not limited to, statements related to La Jolla's expectations regarding net sales and net cash used in operating activities for the full-year 2019, the expectation for future clinical and regulatory milesto ...