Innoviva(US:INVA)2025-11-05 21:28Financial Performance - Third quarter 2025 gross royalty revenue from GSK was $63.4 million, a 4.8% increase from $60.5 million in the third quarter 2024[202]. - Third quarter 2025 net product sales totaled $47.3 million, representing a 70% increase compared to $27.8 million in the third quarter 2024[202]. - Third quarter 2025 net income was $89.9 million, or $1.30 basic per share, compared to a net income of $1.2 million, or $0.02 basic per share, for the third quarter 2024[202]. - Total net royalty revenue increased to $59.9 million for the three months ended September 30, 2025, a 5% increase from $57.1 million in the prior year[209]. - Total product sales, net, rose to $47.3 million for the three months ended September 30, 2025, reflecting a 70% increase from $27.8 million in the same period last year[210]. - Gross royalty revenues from GSK for the nine months ended September 30, 2025, totaled $192.0 million, with net product sales of $113.1 million and license revenue of $2.1 million[224]. - Net cash provided by operating activities for the nine months ended September 30, 2025, was $142.4 million, an increase of $12.97 million (10%) from $129.5 million in 2024[226]. - Net cash provided by investing activities for the nine months ended September 30, 2025, was $16.9 million, a change of $65.2 million from $(48.3 million) in 2024[229]. - Net cash provided by financing activities for the nine months ended September 30, 2025, was $12.3 million, compared to a cash outflow of $(14.0 million) in 2024[231]. Product Sales Breakdown - U.S. net product sales included $18.2 million from GIAPREZA®, $8.5 million from XACDURO®, and $3.2 million from XERAVA®, marking a 52% increase in total U.S. net product sales compared to $19.7 million in the third quarter 2024[202]. - U.S. product sales for GIAPREZA increased by 39% to $18.2 million for the three months ended September 30, 2025, compared to $13.1 million in 2024[210]. - The increase in XACDURO ex-U.S. product sales was primarily due to the Amended Zai Agreement, which is billed at cost[211]. Expenses and Costs - Research and development expenses surged to $13.7 million for the three months ended September 30, 2025, a 285% increase from $3.6 million in the prior year[216]. - Selling, general and administrative expenses were $27.3 million for the three months ended September 30, 2025, a 4% increase from $26.2 million in 2024[217]. - Cost of products sold increased by 157% to $25.6 million for the three months ended September 30, 2025, compared to $10.0 million in the same period last year[213]. Investments and Acquisitions - Innoviva invested $15.0 million in a term loan to Armata, which announced positive Phase 2 data in Staphylococcus aureus bacteremia[203]. - Innoviva acquired a proprietary long-acting oral drug delivery platform from Lyndra Therapeutics for an upfront payment of $10.2 million[203]. - Innoviva's portfolio of strategic assets was valued at $483.0 million as of September 30, 2025[203]. Shareholder Actions - The Board of Directors authorized a new share repurchase program for up to $125.0 million of common stock[203]. Tax and Interest - Income tax expense for the nine months ended September 30, 2025, was $24.8 million, up from $9.6 million in 2024, with an effective tax rate of 18.8% compared to 40.5% in the prior year[223]. - Interest and dividend income increased for the nine months ended September 30, 2025, due to higher average balances of cash equivalents and other interest-bearing investments[218]. - Interest expense for the three months ended September 30, 2025, decreased by $1.8 million (31%) to $(4.0 million) compared to $(5.8 million) in 2024, and for the nine months, it decreased by $4.1 million (23%) to $(13.4 million) from $(17.5 million) in 2024[220]. Changes in Investments - Changes in fair values of equity method investments for the three months ended September 30, 2025, showed a net gain of $30.8 million compared to a loss of $(18.2 million) in 2024, representing a change of $48.98 million (269%)[221]. Commitments and Agreements - As of September 30, 2025, the company had $261.0 million in notes payable related to its 2028 Notes, with an interest rate of 2.125%[233]. - The company has approximately $14.6 million in outstanding purchase commitments under a Commercial Supply Agreement with Corden Pharma CHENÔVE SAS[237]. - The maximum aggregate royalty payments under the La Jolla Royalty Agreement are capped at $225.0 million, with a maximum royalty rate of 18%[235]. Regulatory Updates - Zoliflodacin is under Priority Review by the FDA, with a target action date of December 15, 2025[203].