Innoviva(INVA) - 2025 Q2 - Quarterly Results

Innoviva Reports Second Quarter 2025 Financial Results & Company Progress Innoviva reported strong Q2 2025 financial results, driven by its GSK royalties portfolio and significant momentum from IST-marketed products, highlighted by the U.S. launch of ZEVTERA and FDA's acceptance of the zoliflodacin NDA with Priority Review Executive Summary Innoviva reported strong Q2 2025 financial results, driven by its GSK royalties portfolio and significant momentum from IST-marketed products, with key achievements including the U.S. launch of ZEVTERA and the FDA's acceptance of the zoliflodacin NDA with Priority Review - Strong royalties portfolio performance with $67.3 million in revenue[1][4] - IST achieved U.S. net product sales of $29.0 million, reflecting 54% year-over-year growth[1][4] - ZEVTERA (ceftobiprole medocaril sodium, for injection) launched in the U.S.[1][3] - Zoliflodacin NDA accepted by FDA with Priority Review; PDUFA date set for December 15, 2025[2][3] CEO Commentary CEO Pavel Raifeld highlighted impressive financial and operational results, emphasizing strong performance from the GSK royalties portfolio and IST products, expressing satisfaction with the ZEVTERA launch and critical regulatory milestones for zoliflodacin - Innoviva delivered impressive financial and operational results, with strong performance from GSK royalties and IST-marketed products[3] - Successful U.S. launch of ZEVTERA, the first and only FDA-approved cephalosporin for MRSA-related Staphylococcus aureus bacteremia[3] - FDA's acceptance of zoliflodacin NDA and Priority Review are critical regulatory milestones; potential first new antibiotic in decades for gonorrhea[3] - The business is dynamic, well-capitalized, and resilient, with multiple opportunities to create value through thoughtful capital allocation[3] Financial Highlights Innoviva reported Q2 2025 gross royalty revenue of $67.3 million, stable year-over-year, with net product sales significantly increasing to $35.5 million, and a substantial turnaround in net income to $63.7 million Second Quarter 2025 Key Financial Metrics Innoviva reported Q2 2025 gross royalty revenue of $67.3 million, stable year-over-year, with net product sales significantly increasing to $35.5 million, and a substantial turnaround in net income to $63.7 million Second Quarter 2025 Financial Highlights | Metric | Q2 2025 (Millions) | Q2 2024 (Millions) | Change (YoY) | | :-------------------------------- | :----------------- | :----------------- | :----------- | | Gross Royalty Revenue (GSK) | $67.3 | $67.2 | +$0.1 | | Net Product Sales (Total) | $35.5 | $21.7 | +$13.8 | | U.S. Net Product Sales | $29.0 | $18.8 | +54% | | Income from Operations | $48.8 | $54.7 | -11% | | Net Favorable Changes in Fair Values of Equity and Long-term Investments | $24.4 | ($90.7) | Significant turnaround | | Net Income (Loss) | $63.7 | ($34.7) | Significant turnaround | | Basic EPS | $1.01 | ($0.55) | Significant turnaround | | Cash and Cash Equivalents | $397.5 | N/A | N/A | | Royalty and Net Product Sales Receivables | $88.3 | N/A | N/A | - Income from operations decreased primarily due to a non-recurring milestone payment and cost-sharing reimbursement from a partner in 2024, as well as increased research and development costs for zoliflodacin[8] - Net favorable changes in fair values of equity and long-term investments were primarily due to share price appreciation of Armata Pharmaceuticals and other equity investments[8] Condensed Consolidated Statements of Income For Q2 2025, total revenue was $100.3 million, a slight increase from $99.9 million in Q2 2024, with net income significantly improving to $63.7 million ($1.01 basic EPS) compared to a net loss of $34.7 million ($-0.55 basic EPS) in the prior year Condensed Consolidated Statements of Income (Q2 2025 vs Q2 2024) | Metric (in thousands) | Q2 2025 | Q2 2024 | 6 Months 2025 | 6 Months 2024 | | :------------------------------------------ | :-------- | :-------- | :------------ | :------------ | | Revenue: | | | | | | Royalty revenue, net | $63,880 | $63,742 | $121,687 | $122,157 | | Net product sales | $35,493 | $21,651 | $65,772 | $40,735 | | License and other revenue | $910 | $14,505 | $1,456 | $14,505 | | Total revenue | $100,283 | $99,898 | $188,915 | $177,397 | | Gross profit | $83,146 | $84,986 | $156,461 | $145,074 | | Operating expenses: | | | | | | Selling, general and administrative | $26,412 | $27,740 | $53,903 | $58,145 | | Research and development | $7,983 | $2,560 | $12,379 | $6,438 | | Total operating expenses | $34,395 | $30,300 | $66,282 | $64,583 | | Income from operations | $48,751 | $54,686 | $90,179 | $80,491 | | Changes in fair values of equity method investments, net | $13,082 | ($60,108) | ($467) | ($24,766) | | Changes in fair values of equity and long-term investments, net | $11,280 | ($30,556) | ($54,019) | ($43,891) | | Net income (loss) | $63,688 | ($34,685) | $17,104 | $1,847 | | Basic EPS | $1.01 | ($0.55) | $0.27 | $0.03 | | Diluted EPS | $0.77 | ($0.55) | $0.24 | $0.03 | Condensed Consolidated Balance Sheets As of June 30, 2025, total assets increased to $1,333.6 million from $1,301.1 million at December 31, 2024, primarily driven by an increase in cash and cash equivalents to $397.5 million Condensed Consolidated Balance Sheets (as of June 30, 2025 vs Dec 31, 2024) | Metric (in thousands) | June 30, 2025 | December 31, 2024 | | :------------------------------------ | :------------ | :---------------- | | Assets: | | | | Cash and cash equivalents | $397,532 | $304,964 | | Royalty and product sale receivables | $88,261 | $86,366 | | Inventory, net | $48,996 | $33,725 | | Equity method and equity and long-term investments | $349,110 | $393,957 | | Intangible assets | $195,411 | $208,433 | | Total assets | $1,333,572 | $1,301,060 | | Liabilities and Stockholders' Equity: | | | | Other current liabilities | $48,117 | $39,507 | | Convertible senior notes, due 2025, net | $191,903 | $192,028 | | Convertible senior notes, due 2028, net | $257,019 | $256,316 | | Innoviva stockholders' equity | $714,821 | $691,159 | | Total liabilities and stockholders' equity | $1,333,572 | $1,301,060 | Cash Flows Summary For the six months ended June 30, 2025, net cash provided by operating activities increased to $92.7 million, while net cash used in investing activities significantly decreased, resulting in a $92.6 million increase in cash and cash equivalents Cash Flows Summary (Six Months Ended June 30, 2025 vs 2024) | Metric (in thousands) | 6 Months 2025 | 6 Months 2024 | | :------------------------------------ | :------------ | :------------ | | Net cash provided by operating activities | $92,690 | $80,765 | | Net cash used in investing activities | ($1,552) | ($43,038) | | Net cash provided by (used in) financing activities | $1,430 | ($14,237) | | Net change in cash | $92,568 | $23,490 | | Cash and cash equivalents at end of period | $397,532 | $217,003 | Key Business and R&D Highlights Innoviva's strategic healthcare assets were valued at $449.3 million, with significant progress including the U.S. launch of ZEVTERA and the FDA's Priority Review acceptance for zoliflodacin Strategic Healthcare Assets Update Innoviva's portfolio of strategic healthcare assets was valued at $449.3 million as of June 30, 2025, with excellent progress including Armata Pharmaceuticals' positive Phase 2 data in Staphylococcus aureus bacteremia - Innoviva's portfolio of strategic assets was valued at $449.3 million as of June 30, 2025[7] - Armata Pharmaceuticals recently announced positive Phase 2 data in Staphylococcus aureus bacteremia[3] Product Development and Commercialization Innoviva Specialty Therapeutics (IST) commercially launched ZEVTERA in the U.S. in July 2025, while the FDA accepted zoliflodacin's New Drug Application (NDA) with Priority Review and set a PDUFA target action date of December 15, 2025 ZEVTERA Launch Innoviva Specialty Therapeutics commercially launched ZEVTERA in the U.S. in July 2025, an advanced-generation cephalosporin antibiotic for various bacterial infections - IST commercially launched ZEVTERA in the U.S. in July 2025[8] - ZEVTERA is an advanced-generation cephalosporin antibiotic approved for Staphylococcus aureus bloodstream infections (bacteremia) (SAB) in adults, acute bacterial skin and skin structure infections (ABSSSI) in adults, and community-acquired bacterial pneumonia (CABP) in adults and pediatric patients[8] - ZEVTERA is marketed in the U.S. through an exclusive license from Basilea Pharmaceutica International Ltd[9] Zoliflodacin Regulatory Progress The FDA accepted the zoliflodacin New Drug Application (NDA) in June 2025, granting Priority Review with a PDUFA target action date of December 15, 2025 - In June 2025, the U.S. FDA accepted the zoliflodacin New Drug Application (NDA), granted Priority Review, and assigned a PDUFA target action date of December 15, 2025[8] - Zoliflodacin is an investigational, first-in-class, single oral dose, spiropyrimidinetrione antibiotic for the treatment of uncomplicated gonorrhea, developed in partnership with The Global Antibiotic Research & Development Partnership (GARDP)[8] - The FDA indicated in its Day-74 letter that it did not plan to hold an Advisory Committee meeting to discuss the zoliflodacin NDA[8] About Innoviva Innoviva is a diversified holding company with a core royalties portfolio, a leading critical care and infectious disease platform, and strategic investments in healthcare assets Company Overview and Portfolio Innoviva is a diversified holding company with a core royalties portfolio, a leading critical care and infectious disease platform (Innoviva Specialty Therapeutics, IST), and strategic investments in healthcare assets - Innoviva is a diversified holding company with a core royalties portfolio, a leading critical care and infectious disease platform (Innoviva Specialty Therapeutics, IST), and a portfolio of strategic investments in healthcare assets[9] - Innoviva's royalty portfolio includes respiratory assets partnered with Glaxo Group Limited (GSK), specifically royalties from sales of RELVAR/BREO ELLIPTA and ANORO ELLIPTA[9] - Innoviva's other innovative healthcare assets (via IST) include XACDURO (for hospital-acquired/ventilator-associated bacterial pneumonia), GIAPREZA (to increase blood pressure in shock), XERAVA (for complicated intra-abdominal infections), ZEVTERA (advanced-generation cephalosporin antibiotic), and the investigational zoliflodacin (for uncomplicated gonorrhea)[9] Additional Information This section provides important disclaimers regarding forward-looking statements, highlighting inherent risks and uncertainties, and lists contact information for corporate communications and investor relations Forward-Looking Statements This section contains forward-looking statements subject to substantial risks, uncertainties, and assumptions, which may differ materially from actual results due to various factors, and Innoviva assumes no obligation to update these statements - The press release contains "forward-looking" statements as defined in the Private Securities Litigation Reform Act of 1995, intended to be covered by safe harbor provisions[11] - Such statements involve substantial risks, uncertainties, and assumptions, and actual results may differ materially due to factors like lower than expected royalty revenue, commercialization risks, timing of clinical studies and regulatory approvals, and capital deployment[11] - Innoviva assumes no obligation to update its forward-looking statements on account of new information, future events, or otherwise, except as required by law[11] Contacts Provides contact information for Innoviva's Corporate Communications and for Investors and Media inquiries - Corporate Communications Contact: David Patti, (908) 421-5971, david.patti@inva.com[12] - Investors and Media Contact: Argot Partners, (212) 600-1902, innoviva@argotpartners.com[12]