SOUTH SAN FRANCISCO, CA--(Marketwired - Feb 3, 2016) - Innoviva, Inc. (NASDAQ: INVA) today reported financial results for the fourth quarter and full year ended December 31, 2015. Net income for the fourth quarter of 2015 was $4.3 million or $0.04 per share, representing the Company’s first quarterly net income since inception. This is compared to a net loss of $4.6 million in the third quarter or $(0.04) per share.
Royalties from sales of RELVAR®/BREO® ELLIPTA® and ANORO® ELLIPTA® earned from Glaxo Group Limited (GSK) during the fourth quarter of 2015 grew by 55 percent quarter over quarter to reach $26.1 million. Income from operations increased to $17.3 million in the fourth quarter of 2015, compared to $8.4 million in the third quarter, while adjusted EBITDA for the fourth quarter of 2015 increased to $22.4 million compared to $13.4 million in the third quarter of 2015. Cash and cash equivalents, short-term investments, and marketable securities totaled $187.3 million as of December 31, 2015.
“This is an exciting time for Innoviva. We’ve generated our first quarterly profit since the creation of the company, maintained positive growth trends in prescriptions and market share for both RELVAR®/BREO® ELLIPTA® and ANORO® ELLIPTA®, and ended the year in a strong position for continued growth in 2016,” said Michael W. Aguiar, President and Chief Executive Officer of Innoviva. “Following the spin-off of our research and development activities in 2014, we expected Innoviva to have a short path to profitability due to its lower cost profile and high revenue growth prospects. We are pleased to have achieved our goal this quarter. In addition, we repurchased approximately $37.3 million of stock through Friday, January 29, 2016 under our share repurchase program, further demonstrating our commitment to generating long-term stockholder value.”
Recent Highlights
In January 2016, the Company announced its corporate name change from Theravance, Inc. to Innoviva, Inc.
Through January 29, 2016, Innoviva repurchased $37.3 million of stock under its previously announced $150 million share repurchase program through a combination of a “modified Dutch auction” tender offer (completed in December 2015) and open market purchases, with an average purchase price of $9.49 per share.
In the fourth quarter of 2015, net sales of RELVAR®/BREO® ELLIPTA® by GSK were $154.7 million, comprised of $72.5 million in the U.S. market (an increase 79 percent from the prior quarter in the U.S.) and $82.2 million in non-U.S. markets (an increase of 43 percent from the prior quarter).
As of December 31, 2015, RELVAR®/BREO® ELLIPTA® has been launched in 45 countries.
In the fourth quarter of 2015, sales of ANORO® ELLIPTA® by GSK were $45.4 million, an increase of 44 percent compared to the prior quarter. Sales were $31.2 million in the U.S. market (an increase of 42 percent from the prior quarter) and $14.2 million in non-U.S. markets (an increase of 48 percent from the prior quarter).
As of December 31, 2015, ANORO® ELLIPTA® has been launched in 38 countries.
Key Clinical and Regulatory Events for 2016
Initial results from the Salford Lung Study in COPD are expected in the first half of 2016.
Financial Results for the Fourth Quarter and Year Ended December 31, 2015
Total revenue for the fourth quarter of 2015 was $22.8 million, which primarily resulted from royalties of $26.1 million from net sales of RELVAR®/BREO® ELLIPTA® and ANORO® ELLIPTA®, representing a 55 percent quarter over quarter increase. The majority of royalties were driven by sales of RELVAR®/BREO® ELLIPTA®.
Research and development expenses for the fourth quarter of 2015 were $0.7 million compared with $0.5 million for the third quarter of 2015. General and administrative expenses for the fourth quarter of 2015 were $4.8 million compared with $4.6 million in the third quarter of 2015.
Income from operations reached $17.3 million in the fourth quarter of 2015, an increase of more than 100 percent over the previous quarter. Adjusted EBITDA was $22.4 million for the fourth quarter of 2015 compared to $13.4 million for the third quarter of 2015. The Company generated a net profit of $4.2 million or $0.04 per share in the fourth quarter of 2015, compared to a net loss of $4.6 million or $(0.04) per share in the third quarter.
Cash and cash equivalents, short-term investments and marketable securities totaled $187.3 million as of December 31, 2015.
Conference Call and Webcast Information
Innoviva has scheduled a conference call for today at 5:00 p.m. Eastern Standard Time. To participate in the live call by telephone, please dial (877) 837-3908 from the U.S., or (973) 890-8166 for international callers. Those interested in listening to the conference call live via the Internet may do so by visiting Innoviva’s website at www.inva.com. To listen to the live call via the Internet, please go to the website 15 minutes prior to its start to register, download and install any necessary audio software.
A replay of the conference call will be available on Innoviva’s website for 30 days. An audio replay will also be available by dialing (855) 859-2056 from the U.S., or (404) 537-3406 for international callers, and entering confirmation code 36373209.
Non-GAAP Financial Measures
To supplement the consolidated financial statements presented in accordance with generally accepted accounting principles in the United States, or GAAP, Innoviva uses the non-GAAP financial measure of adjusted EBITDA. A reconciliation of this non-GAAP financial measure to the closest GAAP financial measure is presented in the financial table below under the headings “Reconciliation of Non-GAAP Financial Measures to GAAP.”
Innoviva believes that the non-GAAP financial information provided in this release can assist investors in understanding and assessing Innoviva’s ongoing operations and prospects for the future and provides an additional tool for investors to use in comparing Innoviva’s financial results with other companies in Innoviva’s industry or with similar operating profiles. Adjusted EBITDA is used as a supplemental financial measure by Innoviva’s management and also occasionally by external users of its financial statements, such as investors, commercial banks, research analysts and others, to assess:
• the financial performance of Innoviva’s assets without regard to financing methods, capital structure or historical cost basis;
•the ability of Innoviva’s assets to generate cash sufficient to pay interest costs and support its indebtedness; and
•Innoviva’s operating performance and return on investment as compared to those of other companies, without regard to financing or capital structures.
Adjusted EBITDA is determined by taking GAAP net income from operations and adding back stock-based compensation expense from continuing operations, depreciation expense from continuing operations and amortization of capitalized fees paid to a related party. Innoviva’s method of computing adjusted EBITDA may not be the same method used to compute similar measures reported by other companies.
Adjusted EBITDA should not be considered in isolation or as a substitute to net income (loss), income (loss) from operations, cash flows from operating activities or any other measure of financial performance presented in accordance with GAAP. Adjusted EBITDA is not intended to represent cash flow and does not represent the measure of cash available for distribution. The principal limitation of this non-GAAP financial measure is that it excludes significant elements that are required by GAAP to be recorded in Innoviva’s consolidated financial statements. In addition, it is subject to inherent limitations as it reflects the exercise of judgments by management in determining these non-GAAP financial measures. In order to compensate for these limitations, management of Innoviva presents its non-GAAP financial measures in connection with its GAAP results. Investors are encouraged to review the reconciliation of Innoviva’s non-GAAP financial measures to their most directly comparable GAAP financial measure.
About Innoviva
Innoviva, formerly known as Theravance, Inc., is focused on bringing compelling new medicines to patients in areas of unmet need by leveraging its significant expertise in the development, commercialization and financial management of bio-pharmaceuticals. Innoviva’s portfolio is anchored by the respiratory assets partnered with Glaxo Group Limited (GSK), including RELVAR®/BREO® ELLIPTA® and ANORO® ELLIPTA®, which were jointly developed by Innoviva and GSK. Under the agreement with GSK, Innoviva is eligible to receive associated royalty revenues from RELVAR®/BREO® ELLIPTA®, ANORO® ELLIPTA® and, if approved and commercialized, VI monotherapy, as well. In addition, Innoviva retains a 15 percent economic interest in future payments made by GSK for earlier-stage programs partnered with Theravance BioPharma, Inc. For more information, please visit Innoviva’s website at www.inva.com.
