Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2023 | Oct. 26, 2023 | |
Cover [Abstract] | ||
Entity Registrant Name | INNOVIVA, INC. | |
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2023 | |
Document Transition Report | false | |
Securities Act File Number | 000-30319 | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 94-3265960 | |
Entity Address, Address Line One | 1350 Old Bayshore Highway Suite 400 | |
Entity Address, City or Town | Burlingame | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 94010 | |
City Area Code | 650 | |
Local Phone Number | 238-9600 | |
Title of 12(b) Security | Common Stock, par value $0.01 per share | |
Trading Symbol | INVA | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 64,086,675 | |
Entity Central Index Key | 0001080014 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 179,997 | $ 291,049 |
Accounts receivable , net | 10,752 | 9,401 |
Receivables from collaboration arrangement | 57,014 | 54,672 |
Inventory | 40,515 | 55,897 |
Prepaid expenses | 14,729 | 29,559 |
Other current assets | 1,992 | 2,933 |
Total current assets | 304,999 | 443,511 |
Property and equipment, net | 361 | 170 |
Equity Method Investment | 107,040 | 39,154 |
Equity and long-term investments | 422,491 | 363,859 |
Capitalized fees paid, net | 87,239 | 97,607 |
Right-of-use assets | 2,828 | 3,265 |
Goodwill | 17,905 | 26,713 |
Intangible assets | 236,845 | 252,919 |
Deferred tax assets | 4,952 | 0 |
Other assets | 3,444 | 4,299 |
Total assets | 1,188,104 | 1,231,497 |
Current liabilities: | ||
Accounts payable | 3,783 | 2,939 |
Accrued personnel-related expenses | 5,166 | 8,022 |
Accrued interest payable | 833 | 4,359 |
Deferred revenue | 1,548 | 2,094 |
Convertible subordinated notes due 2023, net of issuance costs | 0 | 96,193 |
Income tax payable | 154 | 154 |
Other accrued liabilities | 24,699 | 21,207 |
Total current liabilities | 36,183 | 134,968 |
Long-term debt, net of discount and issuance costs | 445,718 | 444,180 |
Other long-term liabilities | 68,690 | 70,918 |
Deferred tax liabilities, net | 0 | 5,771 |
Income tax payable, long-term | 10,020 | 9,872 |
Commitments and contingencies (Note 12) | ||
Stockholders' equity: | ||
Preferred stock: $0.01 par value, 230 shares authorized, no shares issued and outstanding | 0 | 0 |
Common stock: $0.01 par value, 200,000 shares authorized, 64,384 and 69,188 issued and outstanding as of September 30, 2023 and December 31, 2022 | 644 | 692 |
Treasury stock: at cost, 32,005 shares as of June 30, 2023 and December 31, 2022, respectively | (393,829) | (393,829) |
Additional paid-in capital | 1,107,398 | 1,163,836 |
Accumulated deficit | (86,720) | (204,911) |
Total stockholders' equity | 627,493 | 565,788 |
Total liabilities and stockholders' equity | $ 1,188,104 | $ 1,231,497 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares | Sep. 30, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 230,000 | 230,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 64,384,000 | 69,188,000 |
Common stock, shares outstanding | 64,384,000 | 69,188,000 |
Treasury stock, shares | 32,005,000 | 32,005,000 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Revenue: | ||||
Total revenue | $ 67,259 | $ 67,257 | $ 224,623 | $ 265,536 |
Expenses: | ||||
Selling, general and administrative | 28,636 | 27,810 | 71,913 | 46,084 |
Research and development | 3,989 | 11,725 | 31,566 | 31,447 |
Amortization of acquired intangible assets | 6,511 | 1,511 | 15,274 | 1,511 |
Gain on sale of Theravance Respiratory Company, LLC ("TRC") | 0 | (266,696) | 0 | (266,696) |
Loss on extinguishment of debt | 0 | 0 | 0 | 20,662 |
Changes in fair values of equity method investments, net | (71,980) | (10,298) | (67,886) | 44,475 |
Changes in fair values of other equity and long-term investments, net | 2,640 | 10,168 | 4,887 | 23,406 |
Interest and dividend income | (4,114) | (2,135) | (11,032) | (3,181) |
Interest expense | 4,396 | 5,096 | 13,205 | 11,761 |
Other expense, net | (1,047) | (28) | 4,289 | 750 |
Total expenses | (18,693) | (219,167) | 91,726 | (86,101) |
Income before income taxes | 85,952 | 286,424 | 132,897 | 351,637 |
Income tax expense, net | 3,906 | 57,077 | 14,706 | 63,061 |
Net income (loss) | 82,046 | 229,347 | 118,191 | 288,576 |
Net income (loss) attributable to noncontrolling interests | 0 | (36,176) | 0 | 6,341 |
Net income attributable to Innoviva stockholders | $ 82,046 | $ 265,523 | $ 118,191 | $ 282,235 |
Basic net income per share attributable to Innoviva stockholders | $ 1.26 | $ 3.81 | $ 1.79 | $ 4.05 |
Diluted net income per share attributable to Innoviva stockholders | $ 0.98 | $ 2.8 | $ 1.45 | $ 3.07 |
Shares used to compute Innoviva basic and diluted net income per share: | ||||
Shares used to compute basic net income per share | 64,953 | 69,731 | 66,016 | 69,640 |
Shares used to compute diluted net income per share | 86,164 | 95,830 | 87,504 | 95,072 |
Royalty revenue | ||||
Revenue: | ||||
Total revenue | $ 53,558 | $ 62,150 | $ 172,681 | $ 260,429 |
Net product sales | ||||
Revenue: | ||||
Total revenue | 13,701 | 5,107 | 40,942 | 5,107 |
Expenses: | ||||
Cost of products sold (inclusive of amortization of inventory fair value adjustments, excluding depreciation and amortization of intangible assets) | 10,182 | 3,680 | 27,910 | 3,680 |
License revenue | ||||
Revenue: | ||||
Total revenue | 0 | 0 | 11,000 | 0 |
License | ||||
Expenses: | ||||
Cost of license revenue | $ 0 | $ 0 | $ 1,600 | $ 0 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Royalty revenue | GSK | ||||
Amortization of capitalized fees paid to a related party | $ 3,456 | $ 3,456 | $ 10,368 | $ 10,368 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 82,046 | $ 229,347 | $ 118,191 | $ 288,576 |
Comprehensive income | 82,046 | 229,347 | 118,191 | 288,576 |
Comprehensive income (loss) attributable to noncontrolling interests | 0 | (36,176) | 0 | 6,341 |
Comprehensive income attributable to Innoviva stockholders | $ 82,046 | $ 265,523 | $ 118,191 | $ 282,235 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Common stock | Additional Paid-In Capital | Accumulated Deficit | Treasury Stock | Noncontrolling Interest | Cumulative Effect, Period of Adoption, Adjustment [Member] | Cumulative Effect, Period of Adoption, Adjustment [Member] Common stock | Cumulative Effect, Period of Adoption, Adjustment [Member] Additional Paid-In Capital | Cumulative Effect, Period of Adoption, Adjustment [Member] Accumulated Deficit | Cumulative Effect, Period of Adoption, Adjustment [Member] Treasury Stock | Cumulative Effect, Period of Adoption, Adjustment [Member] Noncontrolling Interest |
Balance at Dec. 31, 2021 | $ 525,935 | $ 696 | $ 1,264,024 | $ (456,148) | $ (393,829) | $ 111,192 | ||||||
Balance (in shares) at Dec. 31, 2021 | 69,566,000 | 32,005,000 | ||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Accounting Standards Update [Extensible Enumeration] | Accounting Standards Update 2020-06 [Member] | Accounting Standards Update 2020-06 [Member] | Accounting Standards Update 2020-06 [Member] | |||||||||
Distributions to noncontrolling interest | (6,507) | $ 0 | $ 0 | $ 0 | $ 0 | (6,507) | ||||||
Distributions to noncontrolling interest (in shares) | 0 | 0 | ||||||||||
Equity activity of noncontrolling interest from a consolidated variable interest entity | 38,471 | $ 0 | 0 | 0 | $ 0 | 38,471 | ||||||
Equity activity of noncontrolling interest from a consolidated variable interest entity (in shares) | 0 | 0 | ||||||||||
Issuance of common stock units and stock awards, net of repurchase of shares to satisfy tax withholding | 214 | $ 0 | 214 | 0 | $ 0 | 0 | ||||||
Exercise of stock options and issuance of common stock units and stock awards, net of repurchase of shares to satisfy tax withholding | 28,000 | 0 | ||||||||||
Stock-based compensation | 954 | $ 0 | 620 | 0 | $ 0 | 334 | ||||||
Stock-based compensation (in shares) | 0 | 0 | ||||||||||
Capped call options associated with convertible senior notes due 2028 | (16,585) | $ 0 | (16,585) | 0 | $ 0 | 0 | ||||||
Capped call options associated with convertible senior notes due 2028 (in shares) | 0 | 0 | ||||||||||
Net income | 37,858 | $ 0 | 0 | 15,773 | $ 0 | 22,085 | ||||||
Net Income (Shares) | 0 | 0 | ||||||||||
Balance at Mar. 31, 2022 | 552,217 | $ 696 | 1,182,912 | (403,137) | $ (393,829) | 165,575 | $ (28,123) | $ 0 | $ (65,361) | $ 37,238 | $ 0 | $ 0 |
Balance (in shares) at Mar. 31, 2022 | 69,594,000 | 32,005,000 | 0 | 0 | ||||||||
Balance at Dec. 31, 2021 | 525,935 | $ 696 | 1,264,024 | (456,148) | $ (393,829) | 111,192 | ||||||
Balance (in shares) at Dec. 31, 2021 | 69,566,000 | 32,005,000 | ||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Net income | 288,576 | |||||||||||
Balance at Sep. 30, 2022 | 641,368 | $ 698 | 1,171,096 | (136,597) | $ (393,829) | 0 | ||||||
Balance (in shares) at Sep. 30, 2022 | 69,776 | 32,005 | ||||||||||
Balance at Mar. 31, 2022 | 552,217 | $ 696 | 1,182,912 | (403,137) | $ (393,829) | 165,575 | $ (28,123) | $ 0 | $ (65,361) | $ 37,238 | $ 0 | $ 0 |
Balance (in shares) at Mar. 31, 2022 | 69,594,000 | 32,005,000 | 0 | 0 | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Distributions to noncontrolling interest | (9,545) | $ 0 | 0 | 0 | $ 0 | (9,545) | ||||||
Distributions to noncontrolling interest (in shares) | 0 | |||||||||||
Equity activity of noncontrolling interest from a consolidated variable interest entity | (2) | $ 0 | 0 | 0 | $ 0 | (2) | ||||||
Equity activity of noncontrolling interest from a consolidated variable interest entity (in shares) | 0 | 0 | ||||||||||
Issuance of common stock units and stock awards, net of repurchase of shares to satisfy tax withholding | 68 | $ 1 | 67 | 0 | $ 0 | 0 | ||||||
Exercise of stock options and issuance of common stock units and stock awards, net of repurchase of shares to satisfy tax withholding | 112,000 | 0 | ||||||||||
Conversion of convertible subordinated notes due 2023 | 3 | $ 0 | 3 | 0 | $ 0 | 0 | ||||||
Conversion of convertiblesubordinated notes due 2023 (in shares) | 0 | 0 | ||||||||||
Stock-based compensation | 1,350 | $ 0 | 685 | 0 | $ 0 | 665 | ||||||
Stock-based compensation (in shares) | 0 | 0 | ||||||||||
Net income | 21,371 | $ 0 | 0 | 939 | $ 0 | 20,432 | ||||||
Net Income (Shares) | 0 | 0 | ||||||||||
Balance at Jun. 30, 2022 | 565,462 | $ 697 | 1,183,667 | (402,198) | $ (393,829) | 177,125 | ||||||
Balance (in shares) at Jun. 30, 2022 | 69,706 | 32,005,000 | ||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Distributions to noncontrolling interest | (53,759) | $ 0 | 0 | 0 | $ 0 | (53,759) | ||||||
Distributions to noncontrolling interest (in shares) | 0 | |||||||||||
Derecognition of noncontrolling interests upon sale of TRC | (61,226) | $ 0 | 0 | 78 | $ 0 | (61,304) | ||||||
Derecognition of noncontrolling interests upon sale of TRC (in shares) | 0 | 0 | ||||||||||
Derecognition of noncontrolling interests upon acquisition of Entasis Therapeutics Holdings Inc. ("Entasis") minority interest | (42,162) | $ 0 | (14,153) | 0 | $ 0 | (28,009) | ||||||
Derecognition of noncontrolling interests upon acquisition of Entasis Therapeutics Holdings Inc ("Entasis") minority interest (in shares) | 0 | 0 | ||||||||||
Issuance of common stock units and stock awards, net of repurchase of shares to satisfy tax withholding | (11) | $ 1 | (12) | 0 | $ 0 | |||||||
Exercise of stock options and issuance of common stock units and stock awards, net of repurchase of shares to satisfy tax withholding | 70 | 0 | ||||||||||
Stock-based compensation | 3,717 | $ 0 | 1,594 | 0 | $ 0 | 2,123 | ||||||
Stock-based compensation (in shares) | 0 | 0 | ||||||||||
Net income | 229,347 | $ 0 | 0 | 265,523 | $ 0 | (36,176) | ||||||
Net Income (Shares) | 0 | 0 | ||||||||||
Balance at Sep. 30, 2022 | 641,368 | $ 698 | 1,171,096 | (136,597) | $ (393,829) | $ 0 | ||||||
Balance (in shares) at Sep. 30, 2022 | 69,776 | 32,005 | ||||||||||
Balance at Jun. 30, 2023 | 555,087 | $ 653 | 1,117,029 | (168,766) | $ (393,829) | |||||||
Balance (in shares) at Jun. 30, 2023 | 65,225,000 | 32,005,000 | ||||||||||
Balance at Dec. 31, 2022 | $ 565,788 | $ 692 | 1,163,836 | (204,911) | $ (393,829) | |||||||
Balance (in shares) at Dec. 31, 2022 | 69,188,000 | 69,188,000 | 32,005,000 | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Issuance of common stock units and stock awards, net of repurchase of shares to satisfy tax withholding | $ (23) | $ 1 | (24) | 0 | $ 0 | |||||||
Exercise of stock options and issuance of common stock units and stock awards, net of repurchase of shares to satisfy tax withholding | 55,000 | 0 | ||||||||||
Repurchase of common stock | (40,735) | $ (34) | (40,701) | 0 | $ 0 | |||||||
Repurchase of common stock (in shares) | (3,419,000) | 0 | ||||||||||
Stock-based compensation | 1,598 | $ 0 | 1,598 | 0 | $ 0 | |||||||
Stock-based compensation (in shares) | 0 | 0 | ||||||||||
Net income | 34,865 | $ 0 | 0 | 34,865 | $ 0 | |||||||
Net Income (Shares) | 0 | 0 | ||||||||||
Balance at Mar. 31, 2023 | 561,493 | $ 659 | 1,124,709 | (170,046) | $ (393,829) | |||||||
Balance (in shares) at Mar. 31, 2023 | 65,824,000 | 32,005,000 | ||||||||||
Balance at Dec. 31, 2022 | $ 565,788 | $ 692 | 1,163,836 | (204,911) | $ (393,829) | |||||||
Balance (in shares) at Dec. 31, 2022 | 69,188,000 | 69,188,000 | 32,005,000 | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Net income | $ 118,191 | |||||||||||
Balance at Sep. 30, 2023 | $ 627,493 | $ 644 | 1,107,398 | (86,720) | $ (393,829) | |||||||
Balance (in shares) at Sep. 30, 2023 | 64,384,000 | 64,384,000 | 32,005,000 | |||||||||
Balance at Mar. 31, 2023 | $ 561,493 | $ 659 | 1,124,709 | (170,046) | $ (393,829) | |||||||
Balance (in shares) at Mar. 31, 2023 | 65,824,000 | 32,005,000 | ||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Issuance of common stock units and stock awards, net of repurchase of shares to satisfy tax withholding | 80 | $ 2 | 78 | 0 | $ 0 | |||||||
Exercise of stock options and issuance of common stock units and stock awards, net of repurchase of shares to satisfy tax withholding | 177,000 | 0 | ||||||||||
Repurchase of common stock | (9,286) | $ (8) | (9,278) | 0 | $ 0 | |||||||
Repurchase of common stock (in shares) | (776,000) | 0 | ||||||||||
Stock-based compensation | 1,520 | $ 0 | 1,520 | 0 | $ 0 | |||||||
Stock-based compensation (in shares) | 0 | 0 | ||||||||||
Net income | 1,280 | $ 0 | 0 | 1,280 | $ 0 | |||||||
Net Income (Shares) | 0 | 0 | ||||||||||
Balance at Jun. 30, 2023 | 555,087 | $ 653 | 1,117,029 | (168,766) | $ (393,829) | |||||||
Balance (in shares) at Jun. 30, 2023 | 65,225,000 | 32,005,000 | ||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Issuance of common stock units and stock awards, net of repurchase of shares to satisfy tax withholding | (11) | $ 0 | (11) | 0 | $ 0 | |||||||
Exercise of stock options and issuance of common stock units and stock awards, net of repurchase of shares to satisfy tax withholding | 16,000 | 0 | ||||||||||
Repurchase of common stock | (11,071) | $ (9) | (11,062) | 0 | $ 0 | |||||||
Repurchase of common stock (in shares) | (857,000) | 0 | ||||||||||
Stock-based compensation | 1,442 | $ 0 | 1,442 | 0 | $ 0 | |||||||
Stock-based compensation (in shares) | 0 | 0 | ||||||||||
Net income | 82,046 | $ 0 | 0 | 82,046 | $ 0 | |||||||
Net Income (Shares) | 0 | 0 | ||||||||||
Balance at Sep. 30, 2023 | $ 627,493 | $ 644 | $ 1,107,398 | $ (86,720) | $ (393,829) | |||||||
Balance (in shares) at Sep. 30, 2023 | 64,384,000 | 64,384,000 | 32,005,000 |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Cash flows from operating activities | ||
Net income (loss) | $ 118,191 | $ 288,576 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Deferred income taxes | (1,115) | 29,258 |
Amortization of capitalized fees and depreciation of property and equipment | 10,437 | 10,447 |
Amortization of acquired intangible assets | 15,274 | 1,511 |
Inventory fair value step-up adjustment included in cost of products sold | 19,179 | 2,743 |
Stock-based compensation | 4,560 | 6,021 |
Amortization of debt discount and issuance costs | 1,549 | 1,491 |
Changes in fair values of equity method investments, net | (67,886) | 44,475 |
Changes in fair values of other equity and long-term investments, net | 4,887 | 21,973 |
Loss on extinguishment of debt | 0 | 20,662 |
Net gain on sale of TRC | 0 | (266,696) |
Accrued interest income added to long-term investments | (1,482) | 0 |
Other non-cash items | (770) | 2,026 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (1,351) | (867) |
Receivables from collaboration arrangement | (2,341) | 2,385 |
Inventory | (3,797) | 350 |
Prepaid expenses | 14,830 | 277 |
Other assets | 1,795 | (2,932) |
Accounts payable | 844 | 958 |
Accrued personnel-related expenses and other accrued liabilities | (1,072) | (1,709) |
Accrued interest payable | (3,526) | (1,926) |
Income tax payable | 148 | 33,804 |
Deferred revenue | (546) | 0 |
Net cash provided by operating activities | 107,808 | 192,827 |
Cash flows from investing activities | ||
Purchases of equity method investments | 0 | (45,000) |
Purchases of trading securities | (60,132) | 0 |
Purchases of equity and long-term investments | (1,218) | (13,725) |
Purchases of equity investments managed by ISP Fund LP | (24,914) | (92,951) |
Sales of equity investments managed by ISP Fund LP | 39,642 | 24,281 |
Purchase and sales of other investments managed by ISP Fund LP, net | (14,728) | (41,330) |
Purchases of property and equipment | (260) | (33) |
Proceeds from sale of ownership interest in TRC, net | 0 | 248,191 |
Cash acquired through the consolidation of Entasis | 0 | 23,070 |
Cash paid for the acquisition of La Jolla Pharmaceutical Company, net of cash acquired | 0 | (150,459) |
Net cash used in investing activities | (61,610) | (47,956) |
Cash flows from financing activities | ||
Distributions to noncontrolling interests | 0 | (69,811) |
Purchase of Entasis minority interest | 0 | (42,395) |
Repurchase of common stock | (61,092) | 0 |
Repurchase of shares to satisfy tax withholding | (65) | (71) |
Proceeds from issuances of common stock, net | 111 | 342 |
Payment for repurchase of convertible subordinated notes due 2023 | (96,204) | (165,131) |
Purchases of capped call options associated with convertible senior notes due 2028 | 0 | (21,037) |
Proceeds from issuance of convertible senior notes due 2028, net of issuance costs | 0 | 252,536 |
Net cash used in financing activities | (157,250) | (45,567) |
Net (decrease) increase in cash and cash equivalents | (111,052) | 99,304 |
Cash and cash equivalents at beginning of period | 291,049 | 201,525 |
Cash and cash equivalents at end of period | 179,997 | 300,829 |
Supplemental Disclosure of Cash Flow Information: | ||
Cash paid for interest | 11,381 | 11,736 |
Cash paid for income taxes | 0 | 3,859 |
Supplemental Disclosure of Non-cash Investing and Financing Activities: | ||
Adoption of ASU 2020-06 | 0 | 28,123 |
Right-of-use asset obtained through the consolidation of Entasis Therapeutics Holdings, Inc. | 463 | 3,323 |
Reconciliation of Cash, Cash Equivalents and Restricted Cash: | ||
Cash and cash equivalents | 179,997 | 300,789 |
Restricted cash, included in "Other assets" | 0 | 40 |
Total cash, cash equivalents and restricted cash at end of period shown in the condensed consolidated statements of cash flows | $ 179,997 | $ 300,829 |
Description of Operations and S
Description of Operations and Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Operations and Summary of Significant Accounting Policies | 1. Description of Operations and Summary of Significant Accounting Policies Description of Operations Innoviva, Inc. (and where context requires, together with its subsidiaries referred to as “Innoviva”, the “Company”, or “we” and other similar pronouns) is a company with a portfolio of royalties and innovative healthcare assets. Our royalty portfolio contains respiratory assets partnered with Glaxo Group Limited (“GSK”), including RELVAR ® /BREO ® ELLIPTA ® (fluticasone furoate/vilanterol, “FF/VI”) and ANORO ® ELLIPTA ® (umeclidinium bromide/ vilanterol, “UMEC/VI”), and up until July 2022, TRELEGY ® ELLIPTA ® (the combination FF/UMEC/VI). We sold our 15 % ownership interest in Theravance Respiratory Company, LLC (“TRC”) on July 20, 2022, and are no longer entitled to receive royalties on sales of TRELEGY ® ELLIPTA ® products. Under the Long-Acting Beta2 Agonist (“LABA”) Collaboration Agreement, Innoviva is entitled to receive royalties from GSK on sales of RELVAR ® /BREO ® ELLIPTA ® as follows: 15 % on the first $ 3.0 billion of annual global net sales and 5 % for all annual global net sales above $ 3.0 billion; and royalties from the sales of ANORO ® ELLIPTA ® , which tier upward at a range from 6.5 % to 10 %. We expanded our portfolio of royalties and innovative healthcare assets through the acquisition of Entasis Therapeutics Holdings Inc. (“Entasis”) on July 11, 2022 and the acquisition of La Jolla Pharmaceutical Company (“La Jolla”) on August 22, 2022. Our commercial and marketed products include GIAPREZA ® (angiotensin II), approved to increase blood pressure in adults with septic or other distributive shock, and XERAVA ® (eravacycline) for the treatment of complicated intra-abdominal infections in adults. Our new product, XACDURO ® (formerly known as sulbactam-durlobactam or SUL-DUR), was approved by the United States Food and Drug Administration (“FDA”) on May 23, 2023 and we commenced commercial sales of XACDURO ® in the third quarter of 2023. Our development pipeline includes medicines for the treatment of bacterial infections. As such, we have a wholly owned robust infectious disease and hospital operating platform, as well as other assets in these areas, such as a large equity stake in Armata Pharmaceuticals, a leader in bacteriophage development with potential use across a range of infectious and other serious diseases. We also have economic interests in other healthcare companies. Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information. Accordingly, they do not include all of the information and notes required by U.S. GAAP for complete financial statements. The unaudited condensed consolidated financial statements have been prepared on the same basis as audited consolidated financial statements and, in our opinion, include all adjustments, consisting of all normal recurring adjustments, necessary for the fair presentation of our financial position, results of operations, comprehensive income and cash flows. The interim results are not necessarily indicative of the results of operations to be expected for the year ending December 31, 2023, or any other periods. The accompanying unaudited condensed consolidated financial statements include the accounts of Innoviva, our wholly-owned subsidiaries, and certain variable interest entities (“VIEs”) for which we are the primary beneficiary. All intercompany balances and transactions have been eliminated in consolidation. For consolidated entities where we own or are exposed to less than 100% of the economics, we record net income attributable to noncontrolling interest in our unaudited condensed consolidated statements of income equal to the percentage of the economic or ownership interest retained in such entities by the respective noncontrolling parties. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2022 filed with the Securities and Exchange Commission (“SEC”) on February 28, 2023, and as amended on March 20, 2023. Presentation Reclassification Amounts in equity and long-term investments and changes in fair value of equity and long-term investments, net, reported in the Company's comparative financial statements have been reclassified to conform to the current year presentation. Certain reclassifications have been made to the condensed consolidated statement of cash flows for the nine months ended September 30, 2022 to conform to the current year’s presentation. These reclassifications had no net effect on the net income or net cash flows as previously reported. Factors Affecting Comparability Our historical financial condition and results of operations for the periods presented may not be comparable, either between periods or going forward due to the factors below and as discussed in Note 5, “Consolidated Entities and Acquisitions”. • Accounting consolidation of Entasis on February 17, 2022 and purchase of remaining noncontrolling interest in Entasis on July 11, 2022; • Sale of our 15 % ownership interest in Theravance Respiratory Company, LLC (“TRC”) on July 20, 2022, and • Acquisition of La Jolla on August 22, 2022. Use of Management’s Estimates The preparation of unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the unaudited condensed consolidated financial statements and accompanying notes. Actual results could differ materially from those estimates. Management evaluates its significant accounting policies and estimates on an ongoing basis. We base our estimates on historical experience and other relevant assumptions that we believe to be reasonable under the circumstances. These estimates also form the basis for making judgments about the carrying values of assets and liabilities when these values are not readily apparent from other sources. Concentrations of Credit Risk and of Significant Suppliers and Partner Our financial instruments that are exposed to concentrations of credit risk consist primarily of cash and cash equivalents and equity and long-term investments. Although we deposit our cash with multiple financial institutions, our deposits, at times, may exceed federally insured limits. We are dependent on third-party manufacturers to supply active pharmaceutical ingredients (“API”) and drug products for research and development and commercial programs. These programs could be adversely affected by significant interruption in the supply of API or drug products. Currently, we derive most of our revenues from GSK and our near-term success depends in large part on GSK’s ability to successfully develop and commercialize the products in the respiratory programs partnered with GSK. Our near-term success depends in large part upon the performance by GSK of its commercial obligations under the GSK Agreements and the commercial success of RELVAR ® /BREO ® ELLIPTA ® and ANORO ® ELLIPTA ® . If GSK does not devote sufficient resources to the commercialization or development of these products, is unsuccessful in its efforts, or chooses to reprioritize its commercial programs, our business would be materially harmed. GSK is responsible for all clinical and other product development, regulatory, manufacturing and commercialization activities for products developed under the GSK Agreements, including RELVAR ® /BREO ® ELLIPTA ® and ANORO ® ELLIPTA ® . Our quarterly royalty revenues may fluctuate due to a variety of factors, many of which are outside of our control. Our royalty revenues under the GSK Agreements may not meet our analysts’ or investors’ expectations due to a number of important factors. We also started recognizing revenue from product sales of GIAPREZA ® and XERAVA ® as a result of our acquisition of La Jolla and XACDURO ® , which was commercially launched in September 2023. Hospitals and other healthcare organizations generally purchase our products through a network of specialty distributors. These specialty distributors, which are located in the U.S., are considered our customers for accounting purposes. We do not believe that the loss of one of these distributors would significantly impact our ability to distribute our products, as we expect that sales volume would be absorbed by new or remaining distributors. Three of our customers each account for 27 %, 28 % and 26 %, respectively, of our net product sales for the three months ended September 30, 2023 , and 32 %, 28 % and 27 %, respectively, for the nine months ended September 30, 2023 . These same customers account for 29 %, 28 % and 14 %, respectively, of our receivables from net product sales, which are included in “Accounts receivables, net” in our unaudited condensed consolidated balance sheet as of September 30, 2023. Refer to Item 1A. “Risk Factors” disclosed in our Annual Report on Form 10-K for the year ended December 31, 2022. Segment Reporting We operate in a single segment, which is to provide capital return to stockholders by maximizing the potential value of our portfolio of royalties and innovative healthcare assets. Our Chief Operating Decision Maker (“CODM”) is our Chief Executive Officer. The CODM allocates resources and evaluates the performance of Innoviva at the consolidated level using information about our revenues, operating results and other key financial data as needed. Our revenues are generated primarily from our collaborative arrangements and royalty payments from GSK, located in Great Britain. Refer to Note 3, “Revenue Recognition”, for more information on our revenues for the periods presented. We also generate revenue from net product sales of GIAPREZA ® , XERAVA ® , and XACDURO ® . Our long-term assets are located within the United States. Variable Interest Entities The primary beneficiary of a variable interest entity (“VIE”) is required to consolidate the assets and liabilities of the VIE. When we obtain a variable interest in another entity, we assess at the inception of the relationship and upon occurrence of certain significant events whether the entity is a VIE and, if so, whether we are the primary beneficiary of the VIE based on our power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and our obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE. To assess whether we have the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance, we consider all the facts and circumstances, including our role in establishing the VIE and our ongoing rights and responsibilities. This assessment includes identifying the activities that most significantly impact the VIE’s economic performance and identifying which party, if any, has power over those activities. In general, the parties that make the most significant decisions affecting the VIE (management and representation on the Board of Directors) and have the right to unilaterally remove those decision-makers are deemed to have the power to direct the activities of a VIE. To assess whether we have the obligation to absorb losses of the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE, we consider all of our economic interests that are deemed to be variable interests in the VIE. This assessment requires us to apply judgment in determining whether these interests, in the aggregate, are considered potentially significant to the VIE. Business Combination When we acquire an entity in a business combination, we recognize the fair value of all assets acquired, liabilities assumed, and any non-controlling interest in the acquiree and establish the acquisition date as the fair value measurement point. We recognize and measure goodwill as of the acquisition date, as the excess of the fair value of the consideration paid over the fair value of the identified net assets acquired. Acquisition-related expenses and related restructuring costs are expensed as incurred. Several valuation methods may be used to determine the fair value of assets acquired and liabilities assumed. For intangible assets, we typically use the income method. This method starts with a forecast of all of the expected future net cash flows for each asset. These cash flows are then adjusted to present value by applying an appropriate discount rate that reflects the risk factors associated with the cash flow streams. Some of the more significant estimates and assumptions inherent in the income method or other methods include the amount and timing of projected future cash flows, the discount rate selected to measure the risks inherent in the future cash flows and the assessment of the asset’s life cycle and the competitive trends impacting the asset, including consideration of any technical, legal, regulatory, or economic barriers to entry. Determining the useful life of an intangible asset also requires judgment as different types of intangible assets will have different useful lives and certain assets may even be considered to have indefinite useful lives. Cash and Cash Equivalents We consider all highly liquid investments purchased with a maturity of three months or less on the date of purchase to be cash equivalents. Cash equivalents are carried at cost, which approximates fair value. Accounts Receivable Accounts receivable are recorded net of estimates for prompt-pay discounts, chargebacks, returns and rebates. Allowances for prompt-pay discounts and chargebacks are based on contractual terms. We estimate the allowance for credit losses based on existing contractual payment terms, actual payment patterns of customers and individual customer circumstances. Inventory Inventory is stated at the lower of cost or estimated net realizable value on a first in, first out basis. We periodically analyze inventory levels and write down inventory as cost of products sold when the following occurs: inventory has become obsolete, inventory has a cost basis in excess of its estimated net realizable value, or inventory quantities are in excess of expected product sales . Goodwill and Intangible Assets Goodwill is recognized as the excess of the purchase consideration of an acquired entity over the fair value assigned to assets acquired and liabilities assumed in a business combination. Goodwill and intangible assets with an indefinite useful life are not amortized and are tested for impairment at least annually on the first day of December of each year or more frequently if indicators for potential impairment exist or whenever events or changes in circumstances indicate that the asset’s carrying asset amount may not be recoverable. Intangible assets with definite useful lives are amortized on a straight-line basis over their respective remaining useful lives and are tested for impairment only if indicators for potential impairment exist or whenever events or changes in circumstances indicate that the asset’s carrying amount may not be recoverable. Significant judgment may be involved in determining if an indicator of impairment has occurred. Operating Leases Right-of-use assets represent our right to use an underlying asset over the lease term and include any lease payments made prior to the lease commencement date and are reduced by lease incentives. Lease liabilities represent the present value of the total lease payments over the lease term, calculated using an estimated incremental borrowing rate. Lease expense is recognized on a straight-line basis over the expected lease term. Equity and Long-Term Investments We invest from time to time in equity and debt securities of private or public companies. If we determine that we have control over these companies under either voting or VIE models, we consolidate them in our unaudited condensed consolidated financial statements. If we determine that we do not have control over these companies under either voting or VIE models, we then determine if we have an ability to exercise significant influence via voting interests, board representation or other business relationships. We may account for the investments where we exercise significant influence using either an equity method of accounting or at fair value by electing the fair value option under Accounting Standards Codification (“ASC”) Topic 825, Financial Instruments . If the fair value option is applied to an investment that would otherwise be accounted for under the equity method, we apply it to all our financial interests in the same entity (equity and debt, including guarantees) that are eligible items. All gains and losses from fair value changes, unrealized and realized, are presented as changes in fair values of equity method investments, net, and changes in fair values of equity and long-term investments, net, within the unaudited condensed consolidated statements of income. If we conclude that we do not have an ability to exercise significant influence over an investee, we may elect to account for the security without a readily determinable fair value using the measurement alternative method under ASC 321, Investments - Equity Securities . This measurement alternative method allows us to measure the equity investment at its cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. We also invest in ISP Fund LP, which investments consist of money market funds, trading and equity and debt securities in the healthcare, pharmaceutical and biotechnology industries. Pursuant to the Partnership Agreement entered in December 2020, we became a limited partner of this partnership, and our contributions are subject to a 36-month lock-up period which restriction prevents us from having control and access to the contributions and related investments. These investments are classified as long-term investments in the unaudited condensed consolidated balance sheets. Revenue Recognition We apply the guidance on principal versus agent considerations under ASC Topic 606, Revenue from Contracts with Customers , to determine the appropriate treatment for the transactions between us and third parties. The classification of transactions under our arrangements is determined based on the nature and contractual terms of the arrangement along with the nature of the operations of the participants. Any consideration related to activities in which we are considered the principal, which includes being in control of the good or service before such good or service is transferred to the customer, are accounted for as product sales. Revenue is recognized when our customer obtains control of promised goods or services, in an amount that reflects the consideration which we expect to receive in exchange for those goods or services. Revenue is recognized through a five-step process: (i) identify the contract with the customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price for the contract; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue as a performance obligation is satisfied. Royalty Revenue We recognize the royalty revenue on net sales of products with respect to which we have contractual royalty rights in the period in which the royalties are earned. The net sales reports provided by our partner are based on its methodology and assumptions to estimate rebates and returns, which it monitors and adjusts regularly in light of contractual and legal obligations, historical trends, past experience and projected market conditions. Our partner may make significant adjustments to its sales based on actual results recorded, which could cause our royalty revenue to fluctuate. We conduct periodic royalty audits to evaluate the information provided by our partner. Royalties are recognized net of amortization of capitalized fees associated with any approval and launch milestone payments made to GSK. Revenue from Product Sales Revenue from product sales is recognized when our customers obtain control of the product and is recorded at the transaction price, net of estimates for variable consideration consisting of chargebacks, discounts, returns and rebates. Variable consideration is estimated using the expected-value amount method, which is the sum of probability-weighted amounts in a range of possible consideration amounts. Actual amounts of consideration ultimately received may differ from our estimates. If actual results vary materially from our estimates, we will adjust these estimates, which will affect revenue from product sales and earnings in the period such estimates are adjusted. These items may include: • Chargebacks: Chargebacks are discounts we provide to distributors in the event that the sales prices to end users are below the distributors’ acquisition price. This may occur due to a direct contract with a health system, a group purchasing organization (“GPO”) agreement or a sale to a government facility. Chargebacks are estimated based on known chargeback rates and recorded as a reduction of revenue on delivery to our customers. • Discounts: We offer customers various forms of incentives and consideration, including prompt-pay and other discounts. We estimate discounts primarily based on contractual terms. These discounts are recorded as a reduction of revenue on delivery to our customers. • Returns: We offer customers a limited right of return, generally for damaged or expired product. We estimate returns based on an internal analysis, which includes actual experience. The estimates for returns are recorded as a reduction of revenue on delivery to our customers. • Rebates: We participate in Medicaid rebate programs, which provide assistance to certain low-income patients based on each individual state’s guidelines regarding eligibility and services. Under the Medicaid rebate programs, we pay a rebate to each participating state, generally within three months after the quarter in which product was sold. Additionally, we may offer customer incentives and consideration in the form of volume-based or other rebates. The estimates for rebates are recorded as a reduction of revenue on delivery to our customers. We continue to assess our estimates of variable consideration as we accumulate additional historical data and will adjust these estimates accordingly. License Revenue At the inception of a licensing arrangement that includes development and regulatory milestone payments, we evaluate whether the milestones are considered probable of being achieved and estimate the amount to be included in the transaction price. We generally include these milestone payments in the transaction price when they are achieved because there is considerable uncertainty in the research and development processes that trigger receipt of these payments under our agreements. Similarly, we include approval milestone payments in the transaction price once the product is approved by the applicable regulatory agency. Research and Development Expenses Research and development expenses are recognized in the period that services are rendered or goods are received. Research and development expenses consist of salaries and benefits, laboratory supplies, facilities and other overhead costs, research-related manufacturing costs, contract service and clinical-related service costs performed by third party research organizations, research institutions and other outside service providers. Non-refundable prepayments for goods or services that will be used or rendered for future research and development activities are deferred and capitalized. Such amounts are recognized as an expense as the related goods are delivered or the related services are performed. We also utilize significant judgment and estimates to record accruals for estimated ongoing research costs based on the progress of the studies and progress of research manufacturing activities. Interest Expense on Deferred Royalty Obligation Interest expense related to the deferred royalty obligation is recognized over the expected repayment term of the deferred royalty obligation using the effective interest method. The assumptions used in determining the expected repayment term of the deferred royalty obligation require us to make estimates that could impact the effective interest rate. Each reporting period, we estimate the expected repayment term of the deferred royalty obligation based on forecasted net sales of GIAPREZA ® . Changes in interest expense resulting from changes in the effective interest rate, if any, are recorded on a prospective basis. Refer to Note 11, “Debt” for more information. |
Net Income Per Share
Net Income Per Share | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
Net Income Per Share | 2. Net Income Per Share Basic net income per share attributable to Innoviva stockholders is computed by dividing net income attributable to Innoviva stockholders by the weighted-average number of shares of common stock outstanding. Diluted net income per share attributable to Innoviva stockholders is computed by dividing net income attributable to Innoviva stockholders by the weighted-average number of shares of common stock and dilutive potential common stock equivalents then outstanding. Dilutive potential common stock equivalents include the assumed exercise, vesting and issuance of employee stock awards using the treasury stock method, as well as common stock issuable upon assumed conversion of our convertible subordinated notes due 2023 (the “2023 Notes”) up until its maturity date on January 15, 2023, our convertible senior notes due 2025 (the “2025 Notes”) and our convertible senior notes due 2028 (the “2028 Notes”) using the if-converted method. The following table shows the computation of basic and diluted net income per share for the three and nine months ended September 30, 2023 and 2022: Three Months Ended September 30, Nine Months Ended September 30, (In thousands except per share data) 2023 2022 2023 2022 Numerator: Net income attributable to Innoviva stockholders, basic $ 82,046 $ 265,523 $ 118,191 $ 282,235 Add: interest expense on 2023 Notes, net of tax effect — 412 86 2,003 Add: interest expense on 2025 Notes, net of tax effect 1,236 994 3,703 3,533 Add: interest expense on 2028 Notes, net of tax effect 1,543 1,769 4,618 3,862 Net income attributable to Innoviva stockholders, diluted $ 84,825 $ 268,698 $ 126,598 $ 291,633 Denominator: Weighted-average shares used to compute basic net income 64,953 69,731 66,016 69,640 Dilutive effect of 2023 Notes — 4,866 250 6,629 Dilutive effect of 2025 Notes 11,150 11,150 11,150 11,150 Dilutive effect of 2028 Notes 9,955 9,955 9,955 7,559 Dilutive effect of options and awards granted under equity 106 128 133 94 Weighted-average shares used to compute diluted net income 86,164 95,830 87,504 95,072 Net income per share attributable to Innoviva stockholders Basic $ 1.26 $ 3.81 $ 1.79 $ 4.05 Diluted $ 0.98 $ 2.80 $ 1.45 $ 3.07 Anti-Dilutive Securities The following common stock equivalents were not included in the computation of diluted net income per share because their effect was anti-dilutive for the periods presented: Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2023 2022 2023 2022 Outstanding options and awards granted under equity incentive 1,389 705 1,284 577 Outstanding stock warrant 591 526 591 177 Total 1,980 1,231 1,875 754 |
Revenue Recognition
Revenue Recognition | 9 Months Ended |
Sep. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | 3. Revenue Recognition Net Revenue from Collaboration Arrangement On July 13, 2022, Innoviva’s wholly-owned subsidiary, Innoviva TRC Holdings, LLC (“ITH”) entered into an equity purchase agreement (“TRC Equity Purchase Agreement”) with Royalty Pharma Investments 2019 ICAV (“Royalty Pharma”) to sell our ownership interest in TRC. As a result of the sale of our ownership interest in TRC, which was consummated on July 20, 2022, we are no longer entitled to receive 15 % of royalty payments made by GSK stemming from sales of TRELEGY ® ELLIPTA ® . We retained our royalty rights with respect to RELVAR ® /BREO ® ELLIPTA ® and ANORO ® ELLIPTA ® . Net revenue recognized under our GSK Agreements was as follows: Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2023 2022 2023 2022 Royalties $ 45,585 $ 55,663 $ 150,922 $ 170,753 Royalties 11,429 9,943 32,127 28,015 Royalties — — — 72,029 Total royalties 57,014 65,606 183,049 270,797 Less: amortization of capitalized fees ( 3,456 ) ( 3,456 ) ( 10,368 ) ( 10,368 ) Total net royalty revenue $ 53,558 $ 62,150 $ 172,681 $ 260,429 Net Product Sales Our net product sales were $ 13.7 million, consisting of net sales of GIAPREZA ® , XERAVA ® , and XACDURO ® for $ 8.0 million, $ 5.1 million, and $ 0.6 million, respectively, for the three months ended September 30, 2023 . Our net product sales were $ 40.9 million, consisting of net sales of GIAPREZA ® , XERAVA ® , and XACDURO ® for $ 28.2 million, $ 12.1 million, and $ 0.6 million, respectively, for the nine months ended September 30, 2023 . We derived over 86 % and 93 % of our net product sales from customers located in the U.S for the three and nine months ended September 30, 2023, respectively. For the comparative periods in 2022, our net product sales amounted to $ 5.1 million, consisting of $ 3.8 million in net sales of GIAPREZA ® and $ 1.3 million in net sales of XERAVA ® . These sales were recognized from the date of our acquisition of La Jolla, which took place on August 22, 2022, through September 30, 2022. License Revenue Refer to the out-license agreement with Zai Lab and Everest in Note 4, “License and Collaboration Arrangements”. |
License and Collaboration Arran
License and Collaboration Arrangements | 9 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
License and Collaboration Arrangements | 4. License and Collaboration Arrangements Out-License Agreements Zai Lab Entasis entered into a license and collaboration agreement with Zai Lab (Shanghai) Co., Ltd. (“Zai Lab”) (Nasdaq: ZLAB), pursuant to which Zai Lab licensed exclusive rights to durlobactam and SUL-DUR, in the Asia-Pacific region (“the Zai Agreement”). Under the terms of the Zai Agreement, Zai Lab will fund most of the registrational clinical trial costs in China for SUL-DUR, with the exception of Phase 3 patient drug supply of licensed products. Zai Lab will conduct development activities and plan and obtain regulatory approval in a specified number of countries in the Asia-Pacific region beyond China after receipt of regulatory approval of a licensed product in China. Zai Lab is also solely responsible for commercializing licensed products in the Asia-Pacific region and will commercialize licensed products for which it has obtained regulatory approval. We are obligated to supply Zai Lab with the licensed products for clinical development and, if the licensed product is approved, for commercial use for a certain period unless Zai Lab notifies otherwise. Zai Lab may take over manufacturing responsibilities for its own commercialization activities within a specified time period following the effective date of the Zai Agreement. We are eligible to receive up to an aggregate of $ 91.0 million in research and development support payments and development, regulatory and sales milestone payments related to SUL-DUR, imipenem and other combinations with the licensed products. Zai Lab will pay us a tiered royalty equal to from a high-single digit to low-double digit percentage based on annual net sales of licensed products in the territory, subject to specified reductions for the market entry of competing products, loss of patent coverage of licensed products and for payments owed to third parties for additional rights necessary to commercialize licensed products in the territory. Payments received for research support and reimbursable clinical trial costs are recorded as a reduction to research and development expense during the period in which the qualifying expenses are incurred. Such amounts recorded for the three and nine months ended September 30, 2023 and 2022 were not material. Following the approval of XACDURO ® by the FDA in May 2023, we recognized $ 3.0 million in license revenue for the nine months ended September 30, 2023. GARDP Entasis entered into a collaboration agreement with the Global Antibiotic Research and Development Partnership (“GARDP”) for the development, manufacture and commercialization of the product candidate zoliflodacin in certain countries (“the GARDP Collaboration Agreement”). Under the terms of the GARDP Collaboration Agreement, GARDP will use commercially reasonable endeavors to perform and fully fund the Phase 3 registrational trial, including the manufacture and supply of the product candidate containing zoliflodacin, in uncomplicated gonorrhea. We recorded reimbursements from GARDP under this agreement as reduction to research and development expense. Relevant amounts for the three and nine months ended September 30, 2023 and 2022 were not material. In addition, under the GARDP Collaboration Agreement, GARDP was granted a worldwide, fully paid, exclusive and royalty-free license, with the right to sublicense, to use our zoliflodacin technology in connection with GARDP’s development, manufacture and commercialization of zoliflodacin in low-income and specified middle-income countries. We retained commercial rights in all other countries worldwide, including the major markets in North America, Europe and Asia-Pacific. We also retained the right to use and grant licenses to our zoliflodacin technology to perform our obligations under the GARDP Collaboration Agreement and for any purpose other than gonorrhea or community-acquired indications. If we believe that the results of the Phase 3 registrational trial of zoliflodacin would be supportive of an application for marketing approval, we are obligated to use our best efforts to file an application for marketing approval with the FDA within six months of the completion of the trial and to use commercially reasonable endeavors to file an application for marketing approval with the European Medicines Agency (“EMA”). Each party is responsible for using commercially reasonable efforts to obtain marketing authorizations for the product candidate in their respective territories. PAION AG Pursuant to the PAION AG (“PAION”) License, La Jolla granted PAION an exclusive license to commercialize GIAPREZA ® and XERAVA ® in the European Economic Area, the United Kingdom and Switzerland (collectively, the “PAION Territory”). We are entitled to receive potential commercial milestone payments of up to $ 109.5 million and double-digit tiered royalty payments. Royalties payable in a given jurisdiction under the PAION License will be subject to reduction on account of generic competition and after patent expiration in that jurisdiction. Pursuant to the PAION License, PAION will be solely responsible for the future development and commercialization of GIAPREZA ® and XERAVA ® in the PAION Territory. PAION is required to use commercially reasonable efforts to commercialize GIAPREZA ® and XERAVA ® in the PAION Territory. We have not recognized any revenue from PAION related to commercial milestones from the date of acquisition of La Jolla to September 30, 2023. Royalty revenue recognized under this agreement for the three and nine months ended September 30, 2023 was not material. La Jolla also entered into the PAION commercial supply agreement (the “PAION Supply Agreement”) whereby La Jolla will supply PAION a minimum quantity of GIAPREZA ® and XERAVA ® through July 13, 2024. The PAION supply agreement will automatically renew until the earlier of July 13, 2027, or until a new supply agreement is executed. During the initial term of the supply agreement, we will be reimbursed for direct and certain indirect manufacturing costs at cost. We recognized $ 1.0 million in cost reimbursements under this agreement for the three and nine months ended September 30, 2023. Everest Medicines Limited Pursuant to the Everest Medicines Limited (“Everest”) License, La Jolla granted Everest an exclusive license to develop and commercialize XERAVA ® for the treatment of complicated intra-abdominal infections (“cIAI”) and other indications in mainland China, Taiwan, Hong Kong, Macau, South Korea, Singapore, the Malaysian Federation, the Kingdom of Thailand, the Republic of Indonesia, the Socialist Republic of Vietnam and the Republic of the Philippines (collectively, the “Everest Territory”). Under the Everest License, we recognized $ 8.0 million in license revenue for the nine months ended September 30, 2023 as a result of our achievement of a regulatory milestone during the period. We are eligible to receive additional sales milestone payments of up to an aggregate of $ 20.0 million. We are also entitled to receive tiered royalties from Everest at percentages in the low double digits on sales, if any, in the Everest Territory of products containing eravacycline. Royalties are payable with respect to each jurisdiction in the Everest Territory until the latest to occur of: (i) the last-to-expire of specified patent rights in such jurisdiction in the Everest Territory; (ii) expiration of marketing or regulatory exclusivity in such jurisdiction in the Everest Territory; or (iii) 10 years after the first commercial sale of a product in such jurisdiction in the Everest Territory. Royalty revenue recognized under this agreement for the three and nine months ended September 30, 2023 was not material. La Jolla also entered into the Everest commercial supply agreement (the “Everest Supply Agreement”) whereby La Jolla will supply Everest a minimum quantity of XERAVA ® through December 31, 2023 and will transfer to Everest certain XERAVA ® -related manufacturing know-how. We will be reimbursed for direct and certain indirect manufacturing costs at 110 % of cost through December 31, 2023. We recognized a $ 0.9 million and $ 1.6 million in revenue under this agreement for the three and nine months ended September 30, 2023, respectively. In-License Agreements George Washington University Pursuant to the George Washington University (“GW”) License, GW exclusively licensed to La Jolla certain intellectual property rights relating to GIAPREZA ® , including the exclusive rights to certain issued patents and patent applications covering GIAPREZA ® . Under the GW License, we are obligated to use commercially reasonable efforts to develop, commercialize, market and sell GIAPREZA ® . We are obligated to pay a 6 % royalty on net sales of GIAPREZA ® and 15 % on payments received from sublicensees. The obligation to pay royalties under this agreement extends through the last-to-expire patent covering GIAPREZA ® . Amounts recognized under this agreement for the three and nine months ended September 30, 2023 were $ 0.5 million and $ 1.7 million, respectively. Harvard University Pursuant to the Harvard University (“Harvard”) License, Harvard exclusively licensed to La Jolla certain intellectual property rights relating to tetracycline-based products, including XERAVA ® , including the exclusive rights to certain issued patents and patent applications covering such products. Under the Harvard License, we are obligated to use commercially reasonable efforts to develop, commercialize, market and sell tetracycline-based products, including XERAVA ® . For each product covered by the Harvard License, we are obligated to make certain payments for the following: (i) up to approximately $ 15.1 million upon the achievement of certain clinical development and regulatory milestones; (ii) a 5 % royalty on direct U.S. net sales of XERAVA ® ; (iii) a single-digit tiered royalty on direct ex-U.S. net sales of XERAVA ® , starting at a minimum royalty rate of 4.5 %, with step-ups to a maximum royalty of 7.5 % based on the achievement of annual net product sales thresholds; and (iv) 20 % on payments received from sublicensees. The obligation to pay royalties under this agreement extends through the last-to-expire patent covering tetracycline-based products, including XERAVA ® . For the nine months ended September 30, 2023 , we recognized $ 1.6 million in cost of license revenue under this agreement as a result of the license revenue we earned under the out-licensing agreement with Everest for the same period. Paratek Pharmaceuticals, Inc. Pursuant to the Paratek Pharmaceuticals, Inc. (“Paratek”) License, Paratek non-exclusively licensed to La Jolla certain intellectual property rights relating to XERAVA ® , including non-exclusive rights to certain issued patents and patent applications covering XERAVA ® . We are obligated to pay Paratek a 2.25 % royalty based on direct U.S. net sales of XERAVA ® . Our obligation to pay royalties with respect to the licensed product is retroactive to the date of the first commercial sale of XERAVA ® and shall continue until there are no longer any valid claims of the Paratek patents, which expires in October 2023 . Amounts recognized under this agreement for the three and nine months ended September 30, 2023 were not material. |
Consolidated Entities and Acqui
Consolidated Entities and Acquisitions | 9 Months Ended |
Sep. 30, 2023 | |
Consolidated Entities | |
Consolidated Entities and Acquisitions | 5. Consolidated Entities and Acquisitions Consolidated Entities Theravance Respiratory Company, LLC Up until July 20, 2022, we consolidated TRC under the VIE model as we determined that TRC was a VIE and we were the primary beneficiary of the entity because we had the power to direct the economically significant activities of TRC and the obligation to absorb losses of, or the right to receive benefits from, TRC. We held 15 % ownership interest of TRC. The primary source of revenue for TRC is the royalties generated from the net sales of TRELEGY ® ELLIPTA ® by GSK. As discussed in Note 3, “ Revenue Recognition”, on July 13, 2022, ITH entered into the TRC Equity Purchase Agreement to sell our ownership interest in TRC. Upon the closing of the transaction on July 20, 2022, we received $ 277.5 million in cash from Royalty Pharma. We are also entitled to receive up to $ 50.0 million in contingent sales-based milestone payments in the future. As part of the closing of the transaction, we also received our portion of TRC’s remaining cash balance of $ 4.4 million from Royalty Pharma rather than through a cash distribution from TRC. Prior to the closing of the transaction and as part of the agreement, TRC distributed its ownership interests and investments in InCarda Therapeutics, Inc. (“InCarda”), ImaginAb, Inc. (“ImaginAb”), Gate Neurosciences, Inc. (“Gate”) and Nanolive SA (“Nanolive”), which had a total carrying value of $ 39.4 million, to ITH. The summarized financial information of TRC for the three and nine months ended September 30, 2022 are presented as follows: Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2022 2022 Royalty revenue $ — $ 72,029 Operating expenses ( 5 ) 332 Income (loss) from operations 5 71,697 Other income, net — 10 Realized loss ( 39,386 ) ( 39,386 ) Income tax expense, net — 1 Changes in fair values of equity and long-term — ( 8,884 ) Net income (loss) $ ( 39,381 ) $ 23,438 ISP Fund LP In December 2020, Innoviva Strategic Partners LLC, our wholly owned subsidiary (“Strategic Partners”), contributed $ 300.0 million to ISP Fund LP (the “Partnership”) for investing in “long” positions in the healthcare, pharmaceutical and biotechnology sectors and became a limited partner. The general partner of the Partnership (“General Partner”) is an affiliate of Sarissa Capital. The Partnership Agreement provides for Sarissa Capital to receive management fees from the Partnership, payable quarterly in advance, measured based on the Net Asset Value of Strategic Partners’ capital account in the Partnership. In addition, General Partner is entitled to an annual performance fee based on the Net Profits of the Partnership during the annual measurement period. The Partnership Agreement includes a lock-up period of thirty-six months after which Strategic Partners is entitled to make withdrawals from the Partnership as of such lock-up expiration date and each anniversary thereafter, subject to certain limitations. In May 2021, Strategic Partners received a distribution of $ 110.0 million from the Partnership to provide funding to Innoviva for a strategic repurchase of shares held by GSK. On March 30, 2022, Strategic Partners made an additional capital contribution of $ 110.0 million to the Partnership pursuant to the letter agreement entered into between Strategic Partners, the Partnership and Sarissa Capital Fund GP LP on May 20, 2021. The capital contribution is subject to a 36-month lock up period from the contribution date. We consolidate ISP Fund LP under the VIE model as we have determined that ISP Fund LP is a VIE and we are the primary beneficiary of the entity via our related party relationships with Sarissa Capital entities. Our maximum exposure to loss is equal to the amount we invested in the entity. As of September 30, 2023, we held approximately 100 % of the economic interest of the Partnership. As of September 30, 2023 and December 31, 2022, total assets of the Part nership were $ 298.6 million and $ 320.6 million, respectively, of which the majority was attributable to equity, debt and long-term investments. As of September 30, 2023 and December 31, 2022 , total liabilities were $ 1.1 million and $ 1.6 million, respectively. The partnership’s assets can only be used to settle its own obligations. During the three and nine months ended September 30, 2023 , we recorded $ 1.1 million and $ 1.2 million, respectively, of net investment-related income earned by the Partnership, and $ 22.4 million and $ 22.7 million of net negative changes, respectively, in fair values of equity and long-term investments in the unaudited condensed consolidated statements of income. During the three and nine months ended September 30, 2022, we recorded $ 0.3 million and $ 1.0 million, respectively, of net investment-related expenses incurred by the Partnership, and $ 10.5 million and $ 14.9 million, respectively, of net negative changes in fair values of equity and long-term investments in the unaudited condensed consolidated statements of income. Acquisitions Entasis Therapeutics Holdings Inc. We started investing in Entasis in 2020 as part of our capital allocation strategy of deploying cash generated from royalty income and investing in different life sciences companies. Entasis is an advanced, late clinical-stage biopharmaceutical company focused on the discovery and development of novel antibacterial products. Effective in June 2020, after certain conditions were met with respect to the sales of Entasis equity shares, Innoviva had the right to designate two members to Entasis’ board. Our investments in Entasis consisted of shares of common stock and warrants to purchase shares of Entasis common stock. The fair value of Entasis’ common stock was measured based on its closing market price at each balance sheet date. We used the Black-Scholes-Merton pricing model to estimate the fair value of the warrants. On February 17, 2022, Innoviva Strategic Opportunities, LLC (“ISO”) entered into a securities purchase agreement with Entasis pursuant to which ISO purchased a convertible promissory note for a total purchase price of $ 15.0 million. The note bore an annual interest rate of 0.59 % and was due to mature and become payable on August 18, 2022 unless it was converted at a conversion price of $ 1.48 before the maturity date. With this financing, we determined that we had both (i) the power to direct the economically significant activities of Entasis and (ii) the obligation to absorb the losses, or the right to receive the benefits, that could potentially be significant to Entasis and therefore, we were the primary beneficiary of Entasis. Accordingly, we consolidated Entasis’ financial position and results of operations effective on February 17, 2022. Our equity ownership interest remained at 59.9 % as of February 17, 2022, and the fair values of our holdings of Entasis common stock and warrants were remeasured and estimated at $ 64.5 million and $ 31.4 million, respectively. The remeasurement resulted in a $ 7.8 million loss in the first quarter of 2022 which was included in c hanges in fair values of equity method investments, net, in the unaudited condensed consolidated statement of income for the period. We completed our acquisition of Entasis’ minority interest on July 11, 2022. No payments were made toward the convertible promissory note through the date of acquisition of Entasis. In connection with the acquisition, all of the Entasis warrants were replaced with Innoviva warrants (the “Replacement Warrants”) of equivalent value and bearing the same terms. The Replacement Warrants are classified as equity. We recognized the difference between the acquisition price and the carrying value of the acquired minority interest on July 11, 2022 in our additional paid-in capital. The fair values assigned to assets acquired and liabilities assumed as of February 17, 2022 were based on management’s best estimates and assumptions. After the acquisition in July 2022, we adjusted the purchase price allocation based on new and additional information related to product sales forecast provided by Entasis and deferred tax liabilities. In February 2023, we recorded a measurement period adjustment of $ 1.2 million increase in goodwill, primarily related to a decrease in intangible assets of $ 0.8 million and an increase in deferred tax liabilities of $ 0.4 million. The measurement period adjustment did not impact the consolidated net income for the periods presented. The following table represents the adjusted fair values of the assets acquired and liabilities assumed by us in the transaction: (In thousands) February 17, 2022 Cash and cash equivalents $ 23,070 Prepaid expenses 5,554 Other current assets 1,959 Property and equipment, net 185 Right-of-use assets 959 Goodwill 11,493 Intangible assets 106,700 Other assets 302 Total assets acquired $ 150,222 Accounts payable $ 1,583 Accrued personnel-related expenses 1,058 Other current liabilities 5,096 Deferred tax liabilities 7,769 Total liabilities assumed $ 15,506 Total assets acquired, net $ 134,716 The goodwill arising from the acquisition of Entasis is primarily attributable to Entasis’ assembled workforce and the value associated with growing our business more efficiently. The goodwill from this acquisition is not expected to be deductible for tax purposes . Refer to Note 7, “Goodwill and Intangible Assets” for more discussion on the intangible assets recognized as part of this acquisition. As a result of the consolidation, we recognized a non-controlling interest of $ 38.5 million as of February 17, 2022. Our consolidated net income for the three and nine months ended September 30, 2022 included the net loss attributable to Innoviva stockholders since the consolidation date of $ 2.7 million and $ 13.6 million, respectively, from the results of operations of Entasis. La Jolla Pharmaceutical Company On August 22, 2022, ISO acquired La Jolla for a total consideration of $ 206.6 million. ISO acquired La Jolla at a price of $ 6.23 per share. La Jolla is dedicated to the commercialization of innovative therapies that improve outcomes in patients suffering from life-threatening diseases. La Jolla brought to Innoviva an established product portfolio, including GIAPREZA ® (angiotensin II), approved to increase blood pressure in adults with septic or other distributive shock and XERAVA ® (eravacycline) for the treatment of complicated intra-abdominal infections (cIAIs). We incurred approximately $ 5.3 million in acquisition-related costs in connection with this acquisition during the year ended December 31, 2022. The fair values assigned to assets acquired and liabilities assumed as of August 22, 2022 were based on management’s best estimates and assumptions. In June 2023, we recorded a measurement period adjustment of $ 13.1 million decrease in goodwill, primarily related to an increase in deferred tax assets of $ 10.5 million and a decrease in deferred tax liabilities of $ 2.6 million. In August 2023, we recorded a measurement period adjustment of $ 3.0 million increase in goodwill, primarily related to a decrease in deferred tax assets of $ 2.4 million and an increase in deferred tax liabilities of $ 0.6 million. T he following table represents the adjusted fair values of the assets acquired and liabilities assumed by us in the transaction: (In thousands) August 22, 2022 Cash and cash equivalents $ 47,415 Short-term marketable securities 471 Accounts receivable 5,876 Inventory 66,200 Prepaid expenses 1,261 Other current assets 907 Property and equipment, net 13 Right-of-use assets 226 Goodwill 6,411 Intangible assets 151,000 Deferred tax assets 7,461 Other assets 710 Total assets acquired $ 287,951 Accounts payable $ 1,237 Deferred revenue, current 2,849 Other accrued liabilities 11,362 Other long-term liabilities 65,944 Total liabilities assumed $ 81,392 Total assets acquired, net $ 206,559 The goodwill arising from the acquisition of La Jolla is primarily attributable to La Jolla’s assembled workforce and the value associated with leveraging the workforce to develop and commercialize new drug products in the future and growing our business more efficiently. The goodwill from this acquisition is not expected to be deductible for tax purposes . Refer to Note 7, “Goodwill and Intangible Assets” for more discussion on the intangible assets recognized as part of this acquisition. Pro Forma Financial Information The following table presents certain unaudited pro-forma financial information for the three and nine months ended September 30, 2022 as if the consolidation of Entasis and La Jolla occurred on January 1, 2021. The unaudited pro forma financial information is presented for informational purposes only, and is not indicative of the results of operations that would have been achieved if the acquisitions had taken place on January 1, 2021, or of results that may occur in the future. The unaudited pro forma financial information combines the historical results of the Entasis and La Jolla with the Company’s consolidated historical results and includes certain adjustments including, but not limited to, fair value adjustments to equity investments in Entasis’ common stock and warrants, fair value adjustments to inventory, amortization of intangible assets, and interest expense on deferred royalty obligations and acquisition-related costs. Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2022 2022 Revenue $ 72,830 $ 292,077 Net income $ 223,082 $ 273,301 Net income attributable to Innoviva stockholders $ 274,407 $ 282,704 |
Equity and Long-term Investment
Equity and Long-term Investments and Fair Value Measurements | 9 Months Ended |
Sep. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Equity and Long-term Investments and Fair Value Measurements | 6. Equity and Long-term Investments and Fair Value Measurements Equity Investment in Armata During the first quarter of 2020, Innoviva acquired 8,710,800 shares of common stock as well as warrants to purchase 8,710,800 additional shares of common stock of Armata Pharmaceuticals, Inc. (“Armata”) for approximately $ 25.0 million in cash. Armata is a clinical stage biotechnology company focused on precisely targeted bacteriophage therapeutics for antibiotic-resistant infections. During the first quarter of 2021, ISO entered into a securities purchase agreement with Armata to acquire 6,153,847 shares of Armata common stock and warrants to purchase 6,153,847 additional shares of Armata common stock for approximately $ 20.0 million. Armata also entered into a voting agreement with the Company and ISO, pursuant to which the Company and ISO agreed not to vote or take any action by written consent with respect to any common shares held by the Company and ISO that represent, in the aggregate, more than 49.5 % of the total number of shares of Armata’s common stock for voting on the matters related to election or removal of Armata’s board members. The voting agreement will expire the earlier of the second anniversary of the agreement effective date and approval by the FDA of any of Armata’s product candidates for marketing and commercial distribution. During the fourth quarter of 2021, ISO also purchased an additional 1,212,122 shares of Armata common stock for approximately $ 4.0 million. On February 9, 2022, ISO entered into a securities purchase agreement with Armata to acquire 9,000,000 shares of Armata common stock and warrants to purchase 4,500,000 additional shares of common stock with an exercise price of $ 5.00 per share for $ 45.0 million. The investment closed in two tranches on February 9, 2022 and March 31, 2022. The investment is intended to aid Armata in advancing its clinical pipeline and strengthening its bacteriophage platform. On February 9, 2022, Armata also entered a second amended and restated voting agreement with the Company and ISO, pursuant to which the Company and ISO agreed not to vote or take any action by written consent with respect to any common shares held by the Company and ISO that represent, in the aggregate, more than 49.5 % of the total number of shares of Armata’s common stock for voting on the matters related to election or removal of Armata’s board members or amend the bylaws of Armata to reduce the maximum number of directors or set the number of directors who may serve on the board of Armata. The voting agreement will expire the earlier of the second anniversary of the agreement effective da te and approval by the FDA of any of Armata’ s product candidates for marketing and commercial distribution. In addition, as of February 9, 2022, Armata entered into an amended and restated investor rights agreement with the Company and ISO, pursuant to which for as long as the Company and ISO hold at least 12.5 % of the outstanding shares of Armata ’s common stock on a fully-diluted, the Company and ISO shall have the right to designate two directors to Armata’ s board of directors, and for so long as the Company and ISO hold at least 8 %, but less than 12.5 %, of the outstanding shares of Armata ’s common stock on a fully-diluted basis, the Company and ISO shall have the right to designate one director to Armata’ s board of directors, subject to certain conditions and qualifications set forth in the amended and restated investor rights agreement. On July 10, 2023, Armata entered into an amendment to the amended and restated investor rights agreement with the Company and ISO, pursuant to which the Company and ISO agreed that the voting agreement will expire on the earlier of the fifth anniversary of the original agreement's effective date, January 26, 2021, or the approval by the FDA of any of Armata’s product candidates for marketing and commercial distribution. As of September 30, 2023 , three of the seven members of Armata’s board of directors are also members of the board of directors of Innoviva. As of September 30, 2023 and December 31, 2022, the Company and ISO owned approximately 69.4 % , of Armata’s common stock. On January 10, 2023, we entered into a Secured Convertible Credit Agreement (the “Credit Agreement”) with Armata, under which we extended a one-year convertible note (the "Armata Convertible Note") in an aggregate amount of $ 30.0 million at an interest rate of 8.0 % per annum. Pursuant to the Credit Agreement, the balance on the Armata Convertible Note, including all accrued and unpaid interest thereon, will convert into shares of Armata's common stock upon the occurrence of a qualified financing, as defined in the Credit Agreement. Any portion of the balance on the Armata Convertible Note, including all accrued and unpaid interest thereon, may also be converted into shares of Armata's common stock at our option once a registration statement covering the resale of such securities has been declared effective by the SEC. The Armata Convertible Note is secured by substantially all of the assets of Armata and its domestic and foreign material subsidiaries. On July 10, 2023, ISO and Armata executed an amendment to the Armata Convertible Note extending the maturity date from January 10, 2024 to January 10, 2025. On July 10, 2023, ISO and Armata entered into a Credit and Security Agreement (the “Credit and Security Agreement"), under which we extended a term loan to Armata (the “Armata Term Loan”) in an aggregate amount of $ 25.0 million. The Armata Term Loan is subject to an interest rate of 14 % per annum and is due to mature on January 10, 2025 . The Credit and Security Agreement is secured by substantially all of the assets of Armata and its domestic and foreign material subsidiaries. The investments in Armata's common stock and warrants provide Innoviva and ISO the ability to have significant influence, but not control over Armata’s operations. Armata’s business and affairs are managed under the direction of its board of directors, which Innoviva and ISO do not control. Based on our evaluation, we determined that Armata is a VIE, but Innoviva and ISO are not the primary beneficiary of the VIE. We have not provided financial or other support that we were not previously contractually required to provide during the periods presented. Our maximum exposure to loss is equal to the amount we invested in the entity. We account for Armata’s common stock and warrants under the equity method using the fair value option. The fair value of Armata’s common stock is measured based on its closing market price. The warrants purchased in 2020, 2021 and 2022 have an exercise price of $ 2.87 , $ 3.25 and $ 5.00 per share, respectively. All warrants are exercisable immediately within five years from the issuance date of the warrants and include a cashless exercise option. We use the Black-Scholes-Merton pricing model to estimate the fair value of these warrants with the following input assumptions: Armata’s closing market price on the valuation date, the risk-free interest rate computed based on the U.S. Treasury yield, the remaining contractual term as the expected term, and the expected stock price volatility calculated based on the historical volatility of the common stock of Armata and its peer companies. We account for the Armata Convertible Note as a trading security, measured at fair value using a Monte Carlo simulation model with the probability of certain qualified events and the assumptions of risk-free rate, volatility of stock price and timing of certain qualified events. We account for the Armata Term Loan as a trading security, measured at fair value using an income approach based on the discounted value of expected future cash flows. As of September 30, 2023, the fair values of our holdings of Armata common stock, warrants, the Armata Convertible Note and the Armata Term Loan were estimated at $ 75.2 million, $ 31.8 million, $ 49.7 million and $ 26.2 million, respectively. As of December 31, 2022 , the fair values of our holdings of Armata common stock and warrants were estimated at $ 31.1 million and $ 8.1 million, respectively. For the Armata common stock and warrants, we recorded $ 72.0 million and $ 67.9 million in unrealized gain for the three and nine months ended September 30, 2023, respectively, as changes in fair values of equity method investments, net, in the unaudited condensed consolidated statements of income. During the three and nine months ended September 30, 2022 , we recorded $ 11.7 million unrealized gain and $ 35.3 million unrealized loss, respectively, as changes in fair values of equity method investments, net, in the unaudited condensed consolidated statements of income. For the Armata Convertible Note, we recorded $ 18.5 million and $ 19.6 million unrealized gain as changes in fair values of equity and long-term investments, net, in the unaudited condensed consolidated statement of income for three and nine months ended September 30, 2023, respectively. For the Armata Term Loan, we recorded $ 1.1 million unrealized gain as changes in fair values of equity and long-term investments, net, in the unaudited condensed consolidated statement of income for three and nine months ended September 30, 2023. The summarized financial information, including the portion we do not own, is presented for Armata on a one quarter lag as follows: Income Statement Information Three Months Ended June 30, Nine Months Ended June 30, (In thousands) 2023 2022 2023 2022 Revenue $ 980 $ 1,883 $ 2,827 $ 4,108 Loss from operations $ ( 9,629 ) $ ( 9,220 ) $ ( 31,303 ) $ ( 24,043 ) Net loss $ ( 3,547 ) $ ( 9,215 ) $ ( 28,351 ) $ ( 24,036 ) Equity Investment in InCarda During the third quarter of 2020, TRC purchased 20,469,432 shares of Series C preferred stock and a warrant to purchase 5,117,358 additional shares of Series C preferred stock of InCarda Therapeutics, Inc. (“InCarda”) (the “InCarda 2020 Warrant”) for $ 15.8 million, which included $ 0.8 million of transaction costs. InCarda is a privately held biopharmaceutical company focused on developing inhaled therapies for cardiovascular diseases. The investment is intended to fund the ongoing clinical development of InRhythm TM (flecainide for inhalation), InCarda’s lead program, for the treatment of a recent-onset episode of paroxysmal atrial fibrillation. On July 20, 2022, under the terms of the TRC Equity Purchase Agreement, TRC transferred to Innoviva’s wholly-owned subsidiary, Innoviva TRC Holdings, LLC (“ITH”) all of TRC’s ownership interests and investments in InCarda. ITH has the right to designate one member to InCarda’s board of directors. As of September 30, 2023 , no ne of InCarda’s six board members was designated by ITH. We did not exercise the InCarda 2020 Warrant which expired in March 2023 and wrote off its carrying value of $ 0.1 million during the nine months ended September 30, 2023. On March 9, 2022, TRC entered into a Note and Warrant Purchase Agreement (the “InCarda Agreement”) with InCarda to acquire a convertible promissory note (the “InCarda Convertible Note”) and warrants (the “InCarda 2022 Warrant”) for $ 0.7 million. The InCarda 2022 Warrant expires on March 9, 2027 and is measured at fair value. On June 15, 2022, the principal amount and the accrued interest of the InCarda Convertible Note were converted into equity securities. In addition, TRC participated in InCarda’s Series D preferred stock financing by investing $ 2.3 million. In connection with the new round of financing, InCarda recapitalized its equity structure resulting in TRC owning 4,093,886 shares of InCarda’s common stock, 37,350 shares of its Series A-1 preferred stock, 20,469,432 shares of its Series C preferred stock, 8,771,780 shares of its Series D-1 preferred stock, 3,369,802 shares of its Series D-2 preferred stock, a warrant to purchase 5,117,358 shares of its Series C preferred stock at $ 0.73 per share and a warrant to purchase 2,490,033 shares of its Series D-1 preferred stock at $ 0.20 per share. As of September 30, 2023 and December 31, 2022 , we held 8.1 % and 9.0 % of InCarda equity ownership, respectively. Our investment in InCarda does not provide us with the ability to control or have significant influence over InCarda’s operations. Based on our evaluation, we determined that InCarda is a VIE, but we are not the primary beneficiary of the VIE. We have not provided financial or other support that we were not previously contractually required to provide during the periods presented. Our maximum exposure to loss is equal to the amount we invested in the entity. We account for our investments in InCarda under the measurement alternative. Under the measurement alternative, the equity investment is initially recorded at its allocated cost, but the carrying value may be adjusted through earnings upon an impairment or when there is an observable price change involving the same or a similar investment with the same issuer. Due to InCarda’s equity recapitalization in the second quarter of 2022, TRC reassessed the value of its investments in InCarda using the Option Pricing Model Backsolve valuation methodology. Key assumptions used in the valuation model included an expected holding period of two years , a risk-free interest rate of 3.2 %, a dividend yield of 0.0 % and an estimated volatility of 122.0 %. The estimated volatility was calculated based on the historical volatility of a selected peer group of public companies comparable to InCarda. We recognized an impairment charge of $ 9.0 million during the second quarter of 2022. Due to certain changes in InCarda’s business operations during the second quarter of 2023, TRC reassessed the value of its investments in InCarda using the Option Pricing Model methodology. Key assumptions used in the valuation model included an expected holding period of two years , a risk-free interest rate of 4.9 %, a dividend yield of 0.0 % and an estimated volatility of 114.2 %. The estimated volatility was calculated based on the historical volatility of a selected peer group of public companies comparable to InCarda. We recognized an impairment charge of $ 2.9 million during the second quarter of 2023. As of September 30, 2023 , we recorded $ 4.8 million in fair value of InCarda’s Series C preferred stock and $ 0.2 million in fair value of Series D warrants (the “InCarda Preferred Stock Warrants”). As of December 31, 2022, we recorded $ 6.8 million in fair value of InCarda’s Series C preferred stock and $ 0.6 million in fair value of the InCarda Preferred Stock Warrants. As of September 30, 2023 and December 31, 2022, we recognized $ 2.7 million and $ 3.2 million, respectively, for InCarda’s Series D-1 preferred stock, Series D-2 preferred stock, and common stock using the measurement alternative. Du ring the three months ended September 30, 2023 , there was no change in the carrying amount of our investment. During the nine months ended September 30, 2023, we recorded a $ 3.0 million net unrealized loss, as a change in fair values of equity and long-term investments, net, in the unaudited condensed consolidated statements of income. During the three and nine months ended September 30, 2022 , we recorded $ 0.2 million in net unrealized gain and $ 8.8 million in net unrealized loss, respectively, as changes in fair values of equity and long-term investments, net, in the unaudited condensed consolidated statements of income. Equity Investment in ImaginAb On March 18, 2021, TRC entered into a securities purchase agreement with ImaginAb, to purchase 4,051,724 shares of ImaginAb Series C preferred stock for $ 4.7 million. On the same day, TRC also entered into a securities purchase agreement with one of ImaginAb’s common stockholders to purchase 4,097,157 shares of ImaginAb common stock for $ 1.3 million. ImaginAb is a privately held biotechnology company focused on clinically managing cancer and autoimmune diseases via molecular imaging. $ 0.4 million was incurred for investment due diligence costs and execution and recorded as part of the equity investment in the condensed consolidated balance sheets. On July 20, 2022, under the terms of the TRC Equity Purchase Agreement, TRC transferred to ITH all of TRC’s ownership interests and investments in ImaginAb. On March 14, 2023, ITH entered into a securities purchase agreement with ImaginAb to purchase 270,568 shares of ImaginAb Series C-2 preferred stock for $ 0.6 million. On September 14, 2023, ITH entered into a securities purchase agreement with ImaginAb to purchase another 405,852 shares of ImaginAb Series C-2 preferred stock for $ 0.6 million. As of September 30, 2023 , one of ImaginAb’s six board members was designated by ITH. As of September 30, 2023 and December 31, 2022, we held 11.8 % and 12.7 %, respectively, of ImaginAb equity ownership. Our investment in ImaginAb does not provide us with the ability to control or have significant influence over ImaginAb’s operations. Based on our evaluation, we determined that ImaginAb is a VIE, but we are not the primary beneficiary of the VIE. We have not provided financial or other support that we were not previously contractually required to provide during the periods presented. Our maximum exposure to loss is equal to the amount we invested in the entity. Because ImaginAb’s equity securities are not publicly traded and do not have a readily determinable fair value, we account for our investment in ImaginAb’s Series C preferred stock, Series C-2 preferred stock and common stock using the measurement alternative. As of September 30, 2023 and December 31, 2022, $ 7.6 million and $ 6.4 million, respectively, was recorded as equity and long-term investments in the unaudited condensed consolidated balance sheets and there was no change in the carrying amount of our investments. Convertible Promissory Note in Gate Neurosciences On November 24, 2021, TRC entered into a Convertible Promissory Note Purchase Agreement with Gate to acquire a convertible promissory note (the “Gate Convertible Note”) with a principal amount of $ 15.0 million. Gate is a privately held biopharmaceutical company focused on developing the next generation of targeted nervous system therapies, leveraging precision medicine approaches to develop breakthrough drugs for psychiatric and neurologic diseases. The investment is intended to fund Gate's ongoing development and research. The Gate Convertible Note bears an annual interest rate of 8 % and will convert into shares of common stock of Gate upon a qualified event or into shares of shadow preferred stock of Gate (“Shadow Preferred”) upon a qualified financing. A qualifying event can be a qualified initial price offering, a qualified merger, or a merger with a special-purpose acquisition company (“SPAC”). Shadow Preferred means preferred stock having identical rights, preferences and restrictions as the preferred stock that would be issued in a qualified financing. The number of common stock shares to be issued in a qualified event shall be equal to the amount due on the conversion date divided by the lesser of a capped conversion price (the “Capped Conversion Price”) and the qualified event price (the “Qualified Event Price”). The Capped Conversion Price is calculated as $50.0 million divided by the number of shares of common stock outstanding at such time on a fully diluted basis. The Qualified Event Price is the price per share determined by the qualified event. A qualified financing is a sale or series of sales of preferred stock where (i) at least 50 percent of counterparties are not existing shareholders, (ii) net proceeds to Gate are at least $35.0 million, and (iii) the stated or implied equity valuation of Gate is at least $80.0 million. On July 20, 2022, under the terms of the TRC Equity Purchase Agreement, TRC transferred to ITH all of TRC’s debt investments in Gate. On February 2, 2023, ITH entered into a Note Amendment Agreement (the “Note Amendment Agreement”) with Gate to amend the Gate Convertible Note. Pursuant to the Note Amendment Agreement, the principal amount of the Gate Convertible Note was increased from $ 15.0 million to $ 21.5 million, which represents the original principal, accrued interest as of the amendment date and an additional cash investment of $ 5.0 million. All other material terms of the Gate Convertible Note were unchanged. We have accounted for the Gate Convertible Note as a trading security, measured at fair value using a Monte Carlo simulation model with the probability of certain qualified events and the assumptions of equity value of Gate, risk-free rate, expected stock price, volatility of its peer companies, and the time until a financing is raised. As of September 30, 2023 and December 31, 2022, the fair value of the Gate Convertible Note was estimated at $ 22.3 million and $ 15.7 million, respectively, and recorded as equity and long-term investments in the unaudited condensed consolidated balance sheets. We rec orded $ 0.1 million and $ 0.8 million unrealized gain as changes in fair values of equity and long-term investments, net in the unaudited condensed consolidated state ment of income for the three and nine months ended September 30, 2023, respectively. We recorded $ 0.2 million and $ 0.3 million unrealized gain as changes in fair values of equity and long-term investments, net, in the unaudited condensed consolidated statement of income for the three and nine months ended September 30, 2022, respectively. Equity Investment in Nanolive On February 18, 2022, TRC entered into an investment and shareholders agreement with Nanolive to purchase 18,750,000 shares of Nanolive Series C preferred stock for $ 9.8 million (equivalent to 9.0 million CHF). Nanolive SA is a Swiss privately held life sciences company focused on developing breakthrough imaging solutions that accelerate research in growth industries such as drug discovery and cell therap y. $ 0.7 million was incurred fo r investment due diligence costs and execution and recorded as part of the equity and long-term investment in the condensed consolidated balance sheets. On July 20, 2022, under the terms of the TRC Equity Purchase Agreement, TRC transferred to ITH all of TRC’s ownership interests and investments in Nanolive. ITH has the right to designate one member to Nanolive’s board. ITH also has the right to designate another member, who will be mutually acceptable to ITH and another stockholder, to Nanolive’s board. As of September 30, 2023 , one of Innoviva designees is serving on Nanolive’s seven -member board. As of September 30, 2023 and December 31, 2022, we held 15.3 % and 15.5 %, respectively, of Nanolive equity ownership. Our investment in Nanolive does not provide us with the ability to control or have significant influence over Nanolive’s operations. Based on our evaluation, we determined that Nanolive is a VIE, but we are not the primary beneficiary of the VIE. We have not provided financial or other support that we were not previously contractually required to provide during the periods presented. Our maximum exposure to loss is equal to the amount we invested in the entity. Because Nanolive’s equity securities are not publicly traded and do not have a readily determinable fair value, we account for our investment in Nanolive’s Series C preferred stock using the measurement alternative. As of September 30, 2023 and December 31, 2022, $ 10.6 million was recorded as equity and long-term investments in the unaudited condensed consolidated balance sheets and there was no change to the carrying amount of our investment. Available-for-Sale Securities The estimated fair value of available-for-sale securities is based on quoted market prices for these or similar investments that were based on prices obtained from a commercial pricing service. Available-for-sale securities are summarized below: September 30, 2023 Gross Gross Amortized Unrealized Unrealized Estimated (In thousands) Cost Gains Losses Fair Value Money market funds (1) $ 134,287 $ — $ — $ 134,287 Total $ 134,287 $ — $ — $ 134,287 (1) Money market funds are included in cash and cash equivalents in the condensed consolidated balance sheets . December 31, 2022 Gross Gross Amortized Unrealized Unrealized Estimated (In thousands) Cost Gains Losses Fair Value Money market funds (1) $ 263,469 $ — $ — $ 263,469 Total $ 263,469 $ — $ — $ 263,469 (1) Money market funds are included in cash and cash equivalents in the condensed consolidated balance sheets . As of September 30, 2023 , all investments were money market funds, and there was no credit loss recognized. Fair Value Measurements Our available-for-sale securities, equity and long-term investments and contingent value rights are measured at fair value on a recurring basis and our debt is carried at amortized cost basis. Estimated Fair Value Measurements as of September 30, 2023 Using: Quoted Price Significant Significant Identical Observable Unobservable Types of Instruments Assets Inputs Inputs (In thousands) Level 1 Level 2 Level 3 Total Assets Money market funds $ 134,287 $ — $ — $ 134,287 Investments held by ISP Fund LP (1) 239,058 — 2,330 241,388 Equity investment - Armata Common Stock 75,230 — — 75,230 Equity investment - Armata Warrants — 31,810 — 31,810 Convertible debt investment - Armata Note — — 49,684 49,684 Term loan investment - Armata Term Loan — — 26,199 26,199 Convertible debt investment - Gate Note — — 22,276 22,276 Total assets measured at estimated fair value $ 448,575 $ 31,810 $ 100,489 $ 580,874 Liabilities Debt 2025 Notes $ — $ 191,923 $ — $ 191,923 2028 Notes — 217,745 — 217,745 Total fair value of debt $ — $ 409,668 $ — $ 409,668 Contingent value rights — — 595 595 Total liabilities measured at estimated fair value $ — $ 409,668 $ 595 $ 410,263 (1) The investments held by ISP Fund LP consisted of $ 298.5 million in equity investments, which included $ 36.9 million in money market funds, and $ 57.1 million receivable from the maturity of convertible notes. Our total capital contribution of $ 300 million is subject to a 36-month lock-up period from the date of such capital contributions. Estimated Fair Value Measurements as of December 31, 2022 Using: Quoted Price in Active Significant Markets for Other Significant Identical Observable Unobservable Types of Instruments Assets Inputs Inputs (In thousands) Level 1 Level 2 Level 3 Total Assets Money market funds $ 263,469 $ — $ — $ 263,469 Investments held by ISP Fund LP (1) 265,982 — 54,578 320,560 Equity investment - Armata Common Stock 31,095 — — 31,095 Equity investment - Armata Warrants — 8,059 — 8,059 Equity investment - InCarda Warrants — — 605 605 Convertible debt investment - Gate Note — — 15,700 15,700 Total assets measured at estimated fair value $ 560,546 $ 8,059 $ 70,883 $ 639,488 Liabilities Debt 2023 Notes $ — $ 96,089 $ — $ 96,089 2025 Notes — 197,807 — 197,807 2028 Notes — 211,768 — 211,768 Total fair value of debt $ — $ 505,664 $ — $ 505,664 Contingent value rights — — 595 595 Total liabilities at estimated fair value $ — $ 505,664 $ 595 $ 506,259 (1) The investments held by ISP Fund LP consisted of $ 295.4 million equity investments, which included private placement positions and convertible notes of $ 54.6 million, and $ 25.1 million in money market funds. Our total capital contributions of $ 300 .0 million is subject to a 36-month lock-up period from the date of such capital contributions. The fair values of our equity investments in Armata’s common stock and publicly traded investments held by ISP Fund LP are based on the quoted prices in active markets and are classified as Level 1 financial instruments. The fair values of the warrants in Armata classified within Level 2 are based upon observable inputs that may include benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers, and reference data including market research publications. The InCarda warrants, the Gate Convertible Note, the Armata Convertible Note, the Armata Term Loan, private placement positions and convertible notes held by ISP Fund LP, and contingent value rights are classified as Level 3 financial instruments as these securities are not publicly traded and the assumptions used in the valuation model for valuing these securities are based on significant unobservable and observable inputs including those of publicly traded peer companies. The fair values of our 2025 Notes and 2028 Notes are based on recent trading prices of the respective instruments. The fair values of our 2023 Notes, which were fully paid off in January 2023, were also based on their trading prices. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 9 Months Ended |
Sep. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | 7. Goodwill and Intangible Assets Goodwill and intangible assets acquired are recognized at fair value as of the acquisition date. The carrying amount of goodwill as of September 30, 2023 and December 31, 2022 was $ 17.9 million and $ 26.7 million, respectively . We have no t recognized any impairment losses related to goodwill during the periods presented. Intangible assets with definite lives are amortized over their estimated useful lives. The carrying basis and accumulated amortization of recognized intangible assets as of September 30, 2023 and December 31, 2022 were as follows: September 30, 2023 Useful Life Gross Accumulated Net Carrying (In thousands) (Years) Amount Amortization Amount Marketed products 8 - 10 $ 219,700 $ ( 19,586 ) $ 200,114 In-process research and development 2,600 — $ 2,600 Collaboration agreement 10 35,400 ( 1,269 ) $ 34,131 Total $ 257,700 $ ( 20,855 ) $ 236,845 December 31, 2022 Useful Life Gross Accumulated Net Carrying (In thousands) (Years) Amount Amortization Amount Marketed products 8 - 10 $ 151,000 $ ( 5,581 ) $ 145,419 In-process research and development 72,100 — 72,100 Collaboration agreement 35,400 — 35,400 Total $ 258,500 $ ( 5,581 ) $ 252,919 Intangible assets recognized as a result of the acquisition of Entasis amounted to $ 106.7 million, which consisted of Entasis’ in-process research and development related to its antibacterial therapeutic product candidates and a collaboration agreement amounting to $ 71.3 million and $ 35.4 million, respectively. Following the FDA approval of XACDURO ® in May 2023, we started amortizing $ 68.7 million of the then in-process research and development as a marketed product, as well as the collaboration agreement, over their estimated useful lives. The useful l ife of the remaining in-process research and development of $ 2.6 million will be determined upon commercialization of the underlying product candidate; thus, no amortization expense for this intangible asset was recognized for the periods presented. Intangible assets recognized as a result of the acquisition of La Jolla amounting to $ 151.0 million pertain to product rights and developed technologies on La Jolla’s currently marketed products. These are intangible assets with determinable lives and are amortized over their estimated useful lives. We recognized amortization expense of $ 6.5 million and $ 15.3 million for the three and nine months ended September 30, 2023 , respectively. We recognized amortization expense of $ 1.5 million for the three and nine months ended September 30, 2022 . Future amortization expense is expected to be $ 6.5 million for the remainder of 2023, $ 25.8 million for each of the years from 2024 to 2027 and $ 124.5 million thereafter. |
Balance Sheet Components
Balance Sheet Components | 9 Months Ended |
Sep. 30, 2023 | |
Balance Sheet Related Disclosures [Abstract] | |
Balance Sheet Components | 8. Balance Sheet Components Inventory Inventory consisted of the following: September 30, December 31, (in thousands) 2023 2022 Raw materials $ 8,859 $ 5,757 Work-in-progress 13,231 25,052 Finished goods 18,425 25,088 Total inventory $ 40,515 $ 55,897 As of September 30, 2023 and December 31, 2022, total inventory included net fair value adjustments resulting from the acquisition of La Jolla of approximately $ 31.0 million and $ 49.5 million, respectively , which will be amortized and recognized as cost of products sold when sales occur in future periods. The fair value adjustments recorded as part of cost of products sold amounted to $ 5.4 million and $ 19.2 million for the three and nine months ended September 30, 2023 , respectively. The fair value adjustments recorded as part of cost of products sold amounted to $ 2.7 million for the three and nine months ended September 30, 2022. Other Accrued Liabilities Other accrued liabilities consisted of the following: September 30, December 31, (in thousands) 2023 2022 Accrued contract manufacturing expenses $ 5,645 $ 8,382 Accrued clinical expenses 712 692 Accrued research expenses 211 349 Accrued professional services 9,796 3,977 Current portion of lease liabilities 1,211 1,316 Current portion of deferred royalty obligations 3,976 2,639 Accrued license fees and royalties 730 943 Other 2,418 2,909 Total other accrued liabilities $ 24,699 $ 21,207 Other Long-term Liabilities Other long-term liabilities consisted of the following: September 30, December 31, (in thousands) 2023 2022 Long-term portion of deferred royalty obligation $ 66,142 $ 67,947 Long-term portion of lease liabilities 1,953 $ 2,376 Contingent value rights liability 595 595 Total other long-term liabilities $ 68,690 $ 70,918 |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Compensation | 9. Stock-Based Compensation Stock- Based Compensation Expense The following table summarizes stock-based compensation expense: Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2023 2022 2023 2022 Selling, general and administrative $ 1,308 $ 2,422 $ 3,502 $ 4,240 Research and development 134 1,295 $ 1,058 1,781 Total $ 1,442 $ 3,717 $ 4,560 $ 6,021 Valuation Assumptions Black-Scholes-Merton assumptions used in calculating the estimated value of stock options granted by Innoviva on the date of grant were as follows: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 (1) 2023 2022 Risk-free interest rate 4.13 % - 4.21 % — % 3.50 % - 4.21 % 1.60 % - 3.03 % Expected term (in years) 6.01 - 6.22 — 5.16 - 6.22 5.50 - 6.11 Volatility 37.3 % - 37.8 % — % 37.3 % - 38.5 % 38.8 % - 40.5 % Dividend yield — % — % — % — % Weighted-average estimated fair value of stock options granted $ 5.66 - $ 5.97 $ — $ 5.22 - $ 5.97 $ 6.98 - $ 7.73 (1) There were no options granted for the three months ended September 30, 2022. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2023 | |
Equity [Abstract] | |
Stockholders' Equity | 10. Stockholders' Equity On October 31, 2022, our board of directors authorized a new share repurchase program under which we may repurchase up to $ 100.0 million of our outstanding shares of common stock. The repurchase program authorizes the repurchase by the Company of its common stock in open market transactions, including pursuant to a trading plan in accordance with Rule 10b-18 promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), privately negotiated transactions, in block trades, accelerated share repurchase transactions, exchange transactions, or any combination thereof or by other means in accordance with federal securities laws. The authorization permits management to repurchase shares of the Company’s common stock from time to time at management’s discretion. Repurchases may also be made pursuant to a trading plan under Rule 10b5-1 under the Exchange Act, which would permit shares to be repurchased when the Company might otherwise be precluded from doing so because of self-imposed trading blackout periods or other regulatory restrictions. The actual means and timing of any shares purchased under the program will depend on a variety of factors, including ongoing assessments of the capital needs of the business, the market price of our common stock, prevailing stock prices, general market conditions and other considerations. This program has no termination date, may be suspended or discontinued at any time at our discretion, and does not obligate us to acquire any amount of common stock. For the nine months ended September 30, 2023 , we have repurchased 5,051,730 shares in the open market at an average price of $ 11.97 per share for a total amount of approximately $ 60.5 million. All the repurchased shares were retired. Subsequent to September 30, 2023 and through October 26, 2023, we have repurchased 447,838 shares in the open market at an average price of $ 13.07 per share for a total amount of approximately $ 5.9 million. |
Debt
Debt | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
Debt | 11. Debt Our debt consists of the following: September 30, December 31, (In thousands) 2023 2022 2023 Notes $ — $ 96,204 2025 Notes 192,500 192,500 2028 Notes 261,000 261,000 Total debt 453,500 549,704 Less: Unamortized debt discount and issuance costs ( 7,782 ) ( 9,331 ) Total debt, net $ 445,718 $ 540,373 Less: Current portion of long-term debt, net — 96,193 Total long-term debt, net $ 445,718 $ 444,180 Convertible Subordinated Notes Due 2023 In January 2013, we completed an underwritten public offering of $ 287.5 million aggregate principal amount of our 2023 Notes, which matured on January 15, 2023. The remaining balance of the 2023 Notes in the amount of $ 96.2 million was fully paid upon the maturity date in January 2023. The following table sets forth total interest expense recognized related to the 2023 Notes: Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2023 2022 2023 2022 Contractual interest expense $ — $ 511 $ 85 $ 2,106 Amortization of debt issuance costs — 59 11 240 Total interest and amortization expense $ — $ 570 $ 96 $ 2,346 Convertible Senior Notes Due 2025 On August 7, 2017, we completed a private placement of $ 192.5 million aggregate principal amount of our 2025 Notes. The proceeds include the 2025 Notes sold pursuant to the $ 17.5 million over-allotment option granted by us to the initial purchasers, which option was exercised in full. The 2025 Notes were sold in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act. The 2025 Notes are senior unsecured obligations and bear interest at a rate of 2.5 % per year, payable semi-annually in arrears on February 15 and August 15 of each year, beginning on February 15, 2018. The 2025 Notes are convertible, based on the applicable conversion rate, into cash, shares of our common stock or a combination thereof, at our election. The initial conversion rate for the 2025 Notes is 57.9240 shares of our common stock per $1,000 principal amount of the 2025 Notes (which is equivalent to an initial conversion price of approximately $ 17.26 per share), representing a 30.0 % conversion premium over the last reported sale price of the Company’s common stock on August 1, 2017, which was $ 13.28 per share. The conversion rate is subject to customary anti-dilution adjustments in certain circumstances. The 2025 Notes will mature on August 15, 2025 , unless repurchased or converted in accordance with their terms prior to such date. Prior to February 15, 2025, the 2025 Notes will be convertible at the option of the holders only upon the occurrence of specified events and during certain periods, as described below. From, and including, February 15, 2025, until the close of business on the second scheduled trading day immediately preceding the maturity date, the 2025 Notes will be convertible at any time. Holders of the 2025 Notes may convert all or a portion of their 2025 Notes prior to the close of business on February 15, 2025 only under the following circumstances: • after September 30, 2017, if our closing common stock price for at least 20 days out of the most recent 30 consecutive trading days of the preceding quarter is greater than 130 % of the current conversion price of the 2025 Notes; • for five consecutive business days, if the average trading price per $1,000 of Notes during the prior 10 consecutive trading days is less than 98 % of the product of our closing common stock price and the conversion rate of the 2025 Notes on such day; and, • upon the occurrence of specified corporate events, including certain distributions, the occurrence of a fundamental changes (as defined in the indenture governing the 2025 Notes) or a transaction resulting in our common stock converting into other securities or property or assets. On or after February 15, 2025, holders of the 2025 Notes may convert their 2025 Notes at any time until the close of business on the second scheduled trading day immediately preceding the maturity date of the 2025 Notes. In the event of default or a fundamental change (as defined above), holders of the 2025 Notes may require us to repurchase all or a portion of their 2025 Notes at price equal to 100 % of the principal amount of the 2025 Notes, plus any accrued and unpaid interest. The annual effective interest rate on the 2025 Notes is 2.88 %. Our outstanding 2025 Notes balances consisted of the following: September 30, December 31, (In thousands) 2023 2022 Principal $ 192,500 $ 192,500 Debt discount and issuance costs, net ( 1,385 ) ( 1,917 ) Net carrying amount $ 191,115 $ 190,583 The following table sets forth total interest expense recognized related to the 2025 Notes for the three and nine months ended September 30, 2023 and 2022: Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2023 2022 2023 2022 Contractual interest expense $ 1,203 $ 1,203 $ 3,609 $ 3,609 Amortization of debt issuance costs 179 174 532 517 Total interest and amortization expense $ 1,382 $ 1,377 $ 4,141 $ 4,126 Convertible Senior Notes Due 2028 In March 2022, we completed a private placement of $ 261.0 million aggregate principal amount of our 2028 Notes, which will mature on March 15, 2028 . The proceeds include the 2028 Notes sold pursuant to the $ 45.0 million over-allotment option granted by us to the initial purchasers, of which $ 36.0 million was exercised. The 2028 Notes were sold in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act. The net proceeds from the sale of the $ 261.0 million aggregate principal amount of 2028 Notes were approximately $ 252.6 million after deducting the initial purchasers’ discounts and commissions and our estimated offering expenses. We used approximately $ 21.0 million of the net proceeds from the offering to fund the cost of entering into the capped call transactions described below. In addition, we used $ 165.6 million of the remaining net proceeds to repurchase $ 144.8 million aggregate principal amount of the 2023 Notes in separate and individually negotiated transactions with certain holders of the 2023 Notes, which closed concurrently with the issuance of the 2028 Notes. We expect to use the remaining net proceeds for general corporate purposes. The 2028 Notes bear interest at an annual rate of 2.125 % that is payable semi-annually in arrears in cash on March 15 and September 15 of each year, beginning on September 15, 2022. The 2028 Notes are convertible, based on the applicable conversion rate, into cash, shares of our common stock or a combination thereof, at our election. The initial conversion rate was 38.1432 shares per $1,000 principal amount of the 2028 Notes, subject to customary anti-dilution adjustment in certain circumstances, which represented an initial conversion price of approximately $ 26.22 per share. Prior to September 15, 2027, the 2028 Notes will be convertible at the option of the holders only upon the occurrence of specified events and during certain periods, and will be convertible on or after September 15, 2027, at any time until the close of business on the second scheduled trading day immediately preceding the maturity date of the 2028 Notes. Holders of the 2028 Notes may convert all or a portion of their 2028 Notes prior to the close of business on September 15, 2027, only under the following circumstances: • after March 31, 2022, if our closing common stock price for at least 20 days out of the most recent 30 consecutive trading days of the preceding quarter is greater than 130 % of the current conversion price of the 2028 Notes; • for five consecutive business days, if the average trading price per $1,000 of Notes during the prior 10 consecutive trading days is less than 98 % of the product of our closing common stock price and the conversion rate of the 2028 Notes on such day; and, • upon the occurrence of specified corporate events, including certain distributions, the occurrence of a fundamental changes (as defined in the indenture governing the 2028 Notes) or a transaction resulting in our common stock converting into other securities or property or assets. On or after September 15, 2027, holders of the 2028 Notes may convert their 2028 Notes at any time until the close of the business on the second day immediately preceding the maturity date of the 2028 Notes. The 2028 Notes will be redeemable, in whole or in part, at our option at any time, and from time to time, on or after March 20, 2025, and on or before the 75th scheduled trading day immediately before the maturity date but only if the last reported sale price per share of our common stock exceeds 130% of the conversion price for a specified period of time. The redemption price will be equal to the principal amount of the 2028 Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date. In addition, calling any 2028 Note for redemption will constitute a make-whole fundamental change (as defined in the indenture governing the 2028 Notes) with respect to that 2028 Note, in which case the conversion rate applicable to the conversion of that 2028 Note will be increased in certain circumstances if it is converted after it is called for redemption. If we undergo a fundamental change, subject to certain conditions, holders may require us to purchase for cash all or any portion of their 2028 Notes. The fundamental change purchase price will be 100 % of the principal amount of the 2028 Notes to be purchased plus any accrued and unpaid interest to, but excluding, the fundamental change purchase date. The indenture governing the 2028 Notes contains customary terms and covenants, including a merger covenant and that upon certain events of default occurring and continuing, either the Trustee or the holders of at least 25% of the aggregate principal amount of the outstanding Notes may declare 100% of the principal of, and accrued and unpaid interest, if any, on, all the Notes to be due and payable immediately. In connection with the offering of the 2028 Notes, we entered into privately negotiated capped call transactions. The cap price of the capped call transaction is initially $ 33.9850 per share and is subject to certain adjustments under the terms of the capped call transactions. The capped call transactions cover, subject to customary adjustments, the number of shares of common stock initially underlying the 2028 Notes. The capped call transactions are expected generally to reduce potential dilution to our common stock upon conversion of the 2028 Notes or at our election (subject to certain conditions) offset any cash payments we are required to make in excess of the aggregate principal amount of converted 2028 Notes, as the case may be, with such reduction or offset subject to a cap. The annual effective interest rate on the 2028 Notes is 2.70 %. Our outstanding 2028 Notes balance consisted of the following: September 30, December 31, (In thousands) 2023 2022 Principal $ 261,000 $ 261,000 Debt issuance costs, net ( 6,397 ) ( 7,403 ) Net carrying amount $ 254,603 $ 253,597 The following table sets forth total interest expense recognized related to the 2028 Notes for the three and nine months ended September 30, 2023 and 2022: Three months ended September 30, Nine months ended September 30, (In thousands) 2023 2022 2023 2022 Contractual interest expense $ 1,387 $ 1,371 $ 4,160 $ 3,127 Amortization of debt issuance costs 340 328 1,006 735 Total interest and amortization expense $ 1,727 $ 1,699 $ 5,166 $ 3,862 Debt Maturities The aggregate scheduled maturities of our convertible debt as of September 30, 2023 were as follows: (In thousands) September 30, 2023 Years ending December 31: Remainder of 2023 $ — 2024 — 2025 192,500 2026 — 2027 — Thereafter 261,000 Total $ 453,500 Deferred Royalty Obligation As part of our acquisition of La Jolla, we recorded the fair value of its deferred royalty obligation in connection with La Jolla’s royalty financing agreement (“La Jolla Royalty Agreement”) with HealthCare Royalty Partners (“HCR”). Under the terms of the La Jolla Royalty Agreement, HCR is entitled to receive quarterly royalties on worldwide net sales of GIAPREZA ® until either January 1, 2031 or when the maximum aggregate royalty payments have been made, whichever occurs first. Quarterly payments to HCR under the Royalty Agreement start at a maximum royalty rate, with step-downs based on the achievement of annual net product sales thresholds. The current maximum royalty rate is 14 %. Starting January 1, 2024, the maximum royalty rate may increase by an additional 4 %, if an agreed-upon cumulative net product sales threshold has not been met. The La Jolla Royalty Agreement is subject to maximum aggregate royalty payments to HCR of $ 225.0 million. For the three and nine months ended September 30, 2023 , we recognized interest expense of $ 1.2 million and $ 3.7 million, respectively . For the three and nine months ended September 30, 2022 , we recognized interest expense of $ 1.5 million. The carrying value of the deferred royalty obligation as of September 30, 2023 was $ 70.1 million, $ 66.1 million of which was classified as part of other long-term liabilities and the remaining $ 4.0 mil lion was classified as other accrued liabilities in the condensed consolidated balance sheet. The carrying value of the deferred royalty obligation as of December 31, 2022 was $ 70.6 million, $ 67.9 million of which was classified as part of other long-term liabilities and the remaining $ 2.7 million was classified as other accrued liabilities in the condensed consolidated balance sheet. During the nine months ended September 30, 2023 , we made royalty payments to HCR of $ 4.3 million. The deferred royalty obligation was valued using Level 3 inputs, and its carrying value as of September 30, 2023 approximates fair value. The fair value of the deferred royalty obligation was calculated as the discounted deferred royalty obligations based on risk-adjusted revenue projections for GIAPREZA ® . The annual effective interest rate of the deferred royalty obligation for the current period is 7.40 %. Under the terms of the La Jolla Royalty Agreement, if we are unable to meet certain obligations, including the obligation to use commercially reasonable and diligent efforts to commercialize GIAPREZA ® , HCR would have the right to terminate the La Jolla Royalty Agreement and demand payment of either $ 125.0 million or $ 225.0 million (depending on which obligation we have failed to meet) less aggregate royalties already paid to HCR. As of September 30, 2023 , inclusive of the aggregate royalties paid to HCR by La Jolla under the La Jolla Royalty Agreement prior to our acquisition, La Jolla paid $ 17.0 million of aggregate royalties to HCR. In the event that we fail to pay such amount if and when due in a timely manner, HCR would have the right to foreclose on the GIAPREZA ® -related assets. HCR has no recourse against any asset other than GIAPREZA ® . Certain contract provisions within the La Jolla Royalty Agreement that could result in an acceleration of amounts due under the La Jolla Royalty Agreement are recognized as embedded derivatives that require bifurcation from the deferred royalty obligation and fair value recognition. We determined the fair value of each derivative by assessing the probability of each event occurring, as well as the potential repayment amounts and timing of such repayments that would result under various scenarios. As a result of this assessment, we determined that the fair value of the embedded derivatives is immaterial and, therefore, not recognized as of September 30, 2023 and December 31, 2022. We estimate the fair value of the embedded derivatives for each reporting period until either the features lapse or the La Jolla Royalty Agreement is terminated, whichever occurs first. Any material change in the fair value of the embedded derivatives will be recorded as either a gain or loss in the unaudited condensed consolidated statements of income. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 12. Commitments and Contingencies Operating Lease We have operating leases for our corporate headquarters, office spaces and laboratory facilities. The components of lease cost are as follows: Three Months Ended September 30, Nine months ended September 30, (In thousands) 2023 2022 2023 2022 Straight line operating lease costs $ 361 $ 640 $ 1,080 $ 1,101 Variable lease costs 49 35 144 110 Total lease costs $ 410 $ 675 $ 1,224 $ 1,211 Supplemental cash flow information related to leases are as follows: Nine months ended September 30, (In thousands) 2023 2022 Cash paid for amounts included in the measurement of operating lease liabilities: $ 1,157 $ 540 Operating lease right-of-use assets obtained in exchange for operating lease obligations 463 3,323 Right-of-use assets obtained through acquisitions — 1,185 As of September 30, 2023, our operating leases have weighted-average remainin g term of approximately 2.5 years and the weighted average discount rate on our operating lease liabilities was 7.5 %. Future minimum payments on our operating leases as of September 30, 2023 were as follows: (In thousands) Years ending December 31: Remainder of 2023 $ 377 2024 1,373 2025 1,428 Thereafter 291 Total undiscounted lease payments 3,469 Less: imputed interest ( 305 ) Total operating lease liabilities $ 3,164 Legal Proceedings From time to time, the Company is involved in legal proceedings in the ordinary course of its business. We are not currently a party to any material legal proceedings except as discussed below. On February 15, 2022, La Jolla received a paragraph IV notice of certification (the “First Notice Letter”) from Gland Pharma Limited (“Gland”) advising that Gland had submitted an Abbreviated New Drug Application (“ANDA”) to the FDA seeking approval to manufacture, use or sell a generic version of GIAPREZA ® in the U.S. prior to the expiration of U.S. Patent Nos.: 9,220,745; 9,572,856; 9,867,863; 10,028,995; 10,335,451; 10,493,124; 10,500,247; 10,548,943; 11,096,983; and 11,219,662 (the “GIAPREZA ® Patents”), which are listed in the FDA’s Approved Drug Products with Therapeutic Equivalence Evaluations (the “Orange Book”). The First Notice Letter alleges that the GIAPREZA ® Patents are invalid, unenforceable and/or will not be infringed by the commercial manufacture, use or sale of the generic product described in Gland’s ANDA. On March 29, 2022, La Jolla filed a complaint for patent infringement of the GIAPREZA ® Patents against Gland and certain related entities in the United States District Court for the District of New Jersey in response to Gland’s ANDA filing. In accordance with the Hatch-Waxman Act, because GIAPREZA ® is a new chemical entity and La Jolla filed a complaint for patent infringement within 45 days of receipt of the First Notice Letter, the FDA cannot approve Gland’s ANDA any earlier than 7.5 years from the approval of the GIAPREZA ® NDA unless the District Court finds that all of the asserted claims of the patents-in-suit are invalid, unenforceable and/or not infringed. On February 22, 2023, La Jolla received a paragraph IV notice of certification (the “Second Notice Letter”) from Gland advising that Gland had amended its ANDA filing to include a paragraph IV certification alleging that all claims of the newly-issued and Orange Book-listed U.S. Patent No. 11,559,559 (“the ’559 Patent”), which covers GIAPREZA ® , are invalid, unenforceable and/or not infringed. On March 22, 2023, La Jolla filed a First Amended Complaint in this litigation adding Gland’s marketing and distribution partners for its ANDA angiotensin II product, Fresenius Kabi USA LLC and Fresenius Kabi SwissBiosim GmbH, as co-defendants. On April 7, 2023, La Jolla filed a Second Amended Complaint in response to the Second Notice Letter, adding claims that the manufacture, use, sale, offer for sale, or import of Gland’s ANDA angiotensin II product will infringe the ’559 Patent. We intend to vigorously enforce our intellectual property rights relating to GIAPREZA ® . The parties have completed claim construction briefing, and a claim construction hearing is set for November 9, 2023. Fact discovery is set to conclude on December 8, 2023 and expert discovery will be complete by April 19, 2024. A trial date has not yet been set in this matter. Given the early stage of this matter, we cannot reasonably estimate a potential future loss or a range of potential future losses, if any, and have not recorded a contingent liability accrual as of September 30, 2023. Indemnification In the ordinary course of business, we may provide indemnifications of varying scope and terms to vendors, directors, officers, and other parties with respect to certain matters, including, but not limited to, losses arising out of breach of such agreements, services to be provided by us, our negligence or willful misconduct, violations of law, or intellectual property infringement claims made by third parties. In addition, we have entered into indemnification agreements with directors and certain officers and employees that will require us, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors, officers, or employees. No material demands have been made upon us to provide indemnification under such agreements, and thus, there are no claims that we are aware of that could have a material effect on our unaudited condensed consolidated financial statements. We also maintain director and officer insurance, which may cover certain liabilities arising from our obligation to indemnify our directors. To date, we have not incurred any material costs and have not accrued any material liabilities in the condensed consolidated financial statements as a result of these provisions. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 13. Income Taxes We recorded a provision for income tax expe nse of $ 3.9 million and $ 14.7 million f or the three and nine months ended September 30, 2023 , respectively, compared to the recorded provision for income tax expense of $ 57.1 million and $ 63.1 million for the three and nine months ended September 30, 2022, respectively. The Company’s effective income tax rate for the nine months ended September 30, 2023 was 10.6 % compared to 18.3 % for the same period in 2022. The income tax expense for the nine months ended September 30, 2023 and 2022 was determined based upon estimates of the Company’s effective income tax rates in various jurisdictions. Our effective tax rate for the nine months ended September 30, 2023 was lower than the U.S. federal statutory income tax rate due primarily to non-deductible expenses. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | 14. Subsequent Events On October 6, 2023, ITH entered into a Second Note Amendment Agreement (the “Second Note Amendment Agreement”) with Gate to amend the Gate Convertible Note. Pursuant to the Second Note Amendment Agreement, the principal amount of the Gate Convertible Note was increased from $ 21.5 million to $ 27.7 million, which represents the principal and accrued interest as of the amendment date and an additional cash investment of $ 5.0 million. All other material terms of the Gate Convertible Note were unchanged. |
Description of Operations and_2
Description of Operations and Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Operations | Description of Operations Innoviva, Inc. (and where context requires, together with its subsidiaries referred to as “Innoviva”, the “Company”, or “we” and other similar pronouns) is a company with a portfolio of royalties and innovative healthcare assets. Our royalty portfolio contains respiratory assets partnered with Glaxo Group Limited (“GSK”), including RELVAR ® /BREO ® ELLIPTA ® (fluticasone furoate/vilanterol, “FF/VI”) and ANORO ® ELLIPTA ® (umeclidinium bromide/ vilanterol, “UMEC/VI”), and up until July 2022, TRELEGY ® ELLIPTA ® (the combination FF/UMEC/VI). We sold our 15 % ownership interest in Theravance Respiratory Company, LLC (“TRC”) on July 20, 2022, and are no longer entitled to receive royalties on sales of TRELEGY ® ELLIPTA ® products. Under the Long-Acting Beta2 Agonist (“LABA”) Collaboration Agreement, Innoviva is entitled to receive royalties from GSK on sales of RELVAR ® /BREO ® ELLIPTA ® as follows: 15 % on the first $ 3.0 billion of annual global net sales and 5 % for all annual global net sales above $ 3.0 billion; and royalties from the sales of ANORO ® ELLIPTA ® , which tier upward at a range from 6.5 % to 10 %. We expanded our portfolio of royalties and innovative healthcare assets through the acquisition of Entasis Therapeutics Holdings Inc. (“Entasis”) on July 11, 2022 and the acquisition of La Jolla Pharmaceutical Company (“La Jolla”) on August 22, 2022. Our commercial and marketed products include GIAPREZA ® (angiotensin II), approved to increase blood pressure in adults with septic or other distributive shock, and XERAVA ® (eravacycline) for the treatment of complicated intra-abdominal infections in adults. Our new product, XACDURO ® (formerly known as sulbactam-durlobactam or SUL-DUR), was approved by the United States Food and Drug Administration (“FDA”) on May 23, 2023 and we commenced commercial sales of XACDURO ® in the third quarter of 2023. Our development pipeline includes medicines for the treatment of bacterial infections. As such, we have a wholly owned robust infectious disease and hospital operating platform, as well as other assets in these areas, such as a large equity stake in Armata Pharmaceuticals, a leader in bacteriophage development with potential use across a range of infectious and other serious diseases. We also have economic interests in other healthcare companies. |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information. Accordingly, they do not include all of the information and notes required by U.S. GAAP for complete financial statements. The unaudited condensed consolidated financial statements have been prepared on the same basis as audited consolidated financial statements and, in our opinion, include all adjustments, consisting of all normal recurring adjustments, necessary for the fair presentation of our financial position, results of operations, comprehensive income and cash flows. The interim results are not necessarily indicative of the results of operations to be expected for the year ending December 31, 2023, or any other periods. The accompanying unaudited condensed consolidated financial statements include the accounts of Innoviva, our wholly-owned subsidiaries, and certain variable interest entities (“VIEs”) for which we are the primary beneficiary. All intercompany balances and transactions have been eliminated in consolidation. For consolidated entities where we own or are exposed to less than 100% of the economics, we record net income attributable to noncontrolling interest in our unaudited condensed consolidated statements of income equal to the percentage of the economic or ownership interest retained in such entities by the respective noncontrolling parties. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2022 filed with the Securities and Exchange Commission (“SEC”) on February 28, 2023, and as amended on March 20, 2023. |
Presentation Reclassification | Presentation Reclassification Amounts in equity and long-term investments and changes in fair value of equity and long-term investments, net, reported in the Company's comparative financial statements have been reclassified to conform to the current year presentation. Certain reclassifications have been made to the condensed consolidated statement of cash flows for the nine months ended September 30, 2022 to conform to the current year’s presentation. These reclassifications had no net effect on the net income or net cash flows as previously reported. |
Factors Affecting Comparability | Factors Affecting Comparability Our historical financial condition and results of operations for the periods presented may not be comparable, either between periods or going forward due to the factors below and as discussed in Note 5, “Consolidated Entities and Acquisitions”. • Accounting consolidation of Entasis on February 17, 2022 and purchase of remaining noncontrolling interest in Entasis on July 11, 2022; • Sale of our 15 % ownership interest in Theravance Respiratory Company, LLC (“TRC”) on July 20, 2022, and • Acquisition of La Jolla on August 22, 2022. |
Use of Management's Estimates | Use of Management’s Estimates The preparation of unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the unaudited condensed consolidated financial statements and accompanying notes. Actual results could differ materially from those estimates. Management evaluates its significant accounting policies and estimates on an ongoing basis. We base our estimates on historical experience and other relevant assumptions that we believe to be reasonable under the circumstances. These estimates also form the basis for making judgments about the carrying values of assets and liabilities when these values are not readily apparent from other sources. |
Concentrations of Credit Risk and of Significant Suppliers and Partner | Concentrations of Credit Risk and of Significant Suppliers and Partner Our financial instruments that are exposed to concentrations of credit risk consist primarily of cash and cash equivalents and equity and long-term investments. Although we deposit our cash with multiple financial institutions, our deposits, at times, may exceed federally insured limits. We are dependent on third-party manufacturers to supply active pharmaceutical ingredients (“API”) and drug products for research and development and commercial programs. These programs could be adversely affected by significant interruption in the supply of API or drug products. Currently, we derive most of our revenues from GSK and our near-term success depends in large part on GSK’s ability to successfully develop and commercialize the products in the respiratory programs partnered with GSK. Our near-term success depends in large part upon the performance by GSK of its commercial obligations under the GSK Agreements and the commercial success of RELVAR ® /BREO ® ELLIPTA ® and ANORO ® ELLIPTA ® . If GSK does not devote sufficient resources to the commercialization or development of these products, is unsuccessful in its efforts, or chooses to reprioritize its commercial programs, our business would be materially harmed. GSK is responsible for all clinical and other product development, regulatory, manufacturing and commercialization activities for products developed under the GSK Agreements, including RELVAR ® /BREO ® ELLIPTA ® and ANORO ® ELLIPTA ® . Our quarterly royalty revenues may fluctuate due to a variety of factors, many of which are outside of our control. Our royalty revenues under the GSK Agreements may not meet our analysts’ or investors’ expectations due to a number of important factors. We also started recognizing revenue from product sales of GIAPREZA ® and XERAVA ® as a result of our acquisition of La Jolla and XACDURO ® , which was commercially launched in September 2023. Hospitals and other healthcare organizations generally purchase our products through a network of specialty distributors. These specialty distributors, which are located in the U.S., are considered our customers for accounting purposes. We do not believe that the loss of one of these distributors would significantly impact our ability to distribute our products, as we expect that sales volume would be absorbed by new or remaining distributors. Three of our customers each account for 27 %, 28 % and 26 %, respectively, of our net product sales for the three months ended September 30, 2023 , and 32 %, 28 % and 27 %, respectively, for the nine months ended September 30, 2023 . These same customers account for 29 %, 28 % and 14 %, respectively, of our receivables from net product sales, which are included in “Accounts receivables, net” in our unaudited condensed consolidated balance sheet as of September 30, 2023. Refer to Item 1A. “Risk Factors” disclosed in our Annual Report on Form 10-K for the year ended December 31, 2022. |
Segment Reporting | Segment Reporting We operate in a single segment, which is to provide capital return to stockholders by maximizing the potential value of our portfolio of royalties and innovative healthcare assets. Our Chief Operating Decision Maker (“CODM”) is our Chief Executive Officer. The CODM allocates resources and evaluates the performance of Innoviva at the consolidated level using information about our revenues, operating results and other key financial data as needed. Our revenues are generated primarily from our collaborative arrangements and royalty payments from GSK, located in Great Britain. Refer to Note 3, “Revenue Recognition”, for more information on our revenues for the periods presented. We also generate revenue from net product sales of GIAPREZA ® , XERAVA ® , and XACDURO ® . Our long-term assets are located within the United States. |
Variable Interest Entities | Variable Interest Entities The primary beneficiary of a variable interest entity (“VIE”) is required to consolidate the assets and liabilities of the VIE. When we obtain a variable interest in another entity, we assess at the inception of the relationship and upon occurrence of certain significant events whether the entity is a VIE and, if so, whether we are the primary beneficiary of the VIE based on our power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and our obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE. To assess whether we have the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance, we consider all the facts and circumstances, including our role in establishing the VIE and our ongoing rights and responsibilities. This assessment includes identifying the activities that most significantly impact the VIE’s economic performance and identifying which party, if any, has power over those activities. In general, the parties that make the most significant decisions affecting the VIE (management and representation on the Board of Directors) and have the right to unilaterally remove those decision-makers are deemed to have the power to direct the activities of a VIE. To assess whether we have the obligation to absorb losses of the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE, we consider all of our economic interests that are deemed to be variable interests in the VIE. This assessment requires us to apply judgment in determining whether these interests, in the aggregate, are considered potentially significant to the VIE. |
Business Combination | Business Combination When we acquire an entity in a business combination, we recognize the fair value of all assets acquired, liabilities assumed, and any non-controlling interest in the acquiree and establish the acquisition date as the fair value measurement point. We recognize and measure goodwill as of the acquisition date, as the excess of the fair value of the consideration paid over the fair value of the identified net assets acquired. Acquisition-related expenses and related restructuring costs are expensed as incurred. Several valuation methods may be used to determine the fair value of assets acquired and liabilities assumed. For intangible assets, we typically use the income method. This method starts with a forecast of all of the expected future net cash flows for each asset. These cash flows are then adjusted to present value by applying an appropriate discount rate that reflects the risk factors associated with the cash flow streams. Some of the more significant estimates and assumptions inherent in the income method or other methods include the amount and timing of projected future cash flows, the discount rate selected to measure the risks inherent in the future cash flows and the assessment of the asset’s life cycle and the competitive trends impacting the asset, including consideration of any technical, legal, regulatory, or economic barriers to entry. Determining the useful life of an intangible asset also requires judgment as different types of intangible assets will have different useful lives and certain assets may even be considered to have indefinite useful lives. |
Cash and Cash Equivalents | Cash and Cash Equivalents We consider all highly liquid investments purchased with a maturity of three months or less on the date of purchase to be cash equivalents. Cash equivalents are carried at cost, which approximates fair value. |
Accounts Receivable | Accounts Receivable Accounts receivable are recorded net of estimates for prompt-pay discounts, chargebacks, returns and rebates. Allowances for prompt-pay discounts and chargebacks are based on contractual terms. We estimate the allowance for credit losses based on existing contractual payment terms, actual payment patterns of customers and individual customer circumstances. |
Inventory | Inventory Inventory is stated at the lower of cost or estimated net realizable value on a first in, first out basis. We periodically analyze inventory levels and write down inventory as cost of products sold when the following occurs: inventory has become obsolete, inventory has a cost basis in excess of its estimated net realizable value, or inventory quantities are in excess of expected product sales . |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill is recognized as the excess of the purchase consideration of an acquired entity over the fair value assigned to assets acquired and liabilities assumed in a business combination. Goodwill and intangible assets with an indefinite useful life are not amortized and are tested for impairment at least annually on the first day of December of each year or more frequently if indicators for potential impairment exist or whenever events or changes in circumstances indicate that the asset’s carrying asset amount may not be recoverable. Intangible assets with definite useful lives are amortized on a straight-line basis over their respective remaining useful lives and are tested for impairment only if indicators for potential impairment exist or whenever events or changes in circumstances indicate that the asset’s carrying amount may not be recoverable. Significant judgment may be involved in determining if an indicator of impairment has occurred. |
Operating Leases | Operating Leases Right-of-use assets represent our right to use an underlying asset over the lease term and include any lease payments made prior to the lease commencement date and are reduced by lease incentives. Lease liabilities represent the present value of the total lease payments over the lease term, calculated using an estimated incremental borrowing rate. Lease expense is recognized on a straight-line basis over the expected lease term. |
Equity and Long-Term Investments | Equity and Long-Term Investments We invest from time to time in equity and debt securities of private or public companies. If we determine that we have control over these companies under either voting or VIE models, we consolidate them in our unaudited condensed consolidated financial statements. If we determine that we do not have control over these companies under either voting or VIE models, we then determine if we have an ability to exercise significant influence via voting interests, board representation or other business relationships. We may account for the investments where we exercise significant influence using either an equity method of accounting or at fair value by electing the fair value option under Accounting Standards Codification (“ASC”) Topic 825, Financial Instruments . If the fair value option is applied to an investment that would otherwise be accounted for under the equity method, we apply it to all our financial interests in the same entity (equity and debt, including guarantees) that are eligible items. All gains and losses from fair value changes, unrealized and realized, are presented as changes in fair values of equity method investments, net, and changes in fair values of equity and long-term investments, net, within the unaudited condensed consolidated statements of income. If we conclude that we do not have an ability to exercise significant influence over an investee, we may elect to account for the security without a readily determinable fair value using the measurement alternative method under ASC 321, Investments - Equity Securities . This measurement alternative method allows us to measure the equity investment at its cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. We also invest in ISP Fund LP, which investments consist of money market funds, trading and equity and debt securities in the healthcare, pharmaceutical and biotechnology industries. Pursuant to the Partnership Agreement entered in December 2020, we became a limited partner of this partnership, and our contributions are subject to a 36-month lock-up period which restriction prevents us from having control and access to the contributions and related investments. These investments are classified as long-term investments in the unaudited condensed consolidated balance sheets. |
Revenue Recognition | Revenue Recognition We apply the guidance on principal versus agent considerations under ASC Topic 606, Revenue from Contracts with Customers , to determine the appropriate treatment for the transactions between us and third parties. The classification of transactions under our arrangements is determined based on the nature and contractual terms of the arrangement along with the nature of the operations of the participants. Any consideration related to activities in which we are considered the principal, which includes being in control of the good or service before such good or service is transferred to the customer, are accounted for as product sales. Revenue is recognized when our customer obtains control of promised goods or services, in an amount that reflects the consideration which we expect to receive in exchange for those goods or services. Revenue is recognized through a five-step process: (i) identify the contract with the customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price for the contract; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue as a performance obligation is satisfied. Royalty Revenue We recognize the royalty revenue on net sales of products with respect to which we have contractual royalty rights in the period in which the royalties are earned. The net sales reports provided by our partner are based on its methodology and assumptions to estimate rebates and returns, which it monitors and adjusts regularly in light of contractual and legal obligations, historical trends, past experience and projected market conditions. Our partner may make significant adjustments to its sales based on actual results recorded, which could cause our royalty revenue to fluctuate. We conduct periodic royalty audits to evaluate the information provided by our partner. Royalties are recognized net of amortization of capitalized fees associated with any approval and launch milestone payments made to GSK. Revenue from Product Sales Revenue from product sales is recognized when our customers obtain control of the product and is recorded at the transaction price, net of estimates for variable consideration consisting of chargebacks, discounts, returns and rebates. Variable consideration is estimated using the expected-value amount method, which is the sum of probability-weighted amounts in a range of possible consideration amounts. Actual amounts of consideration ultimately received may differ from our estimates. If actual results vary materially from our estimates, we will adjust these estimates, which will affect revenue from product sales and earnings in the period such estimates are adjusted. These items may include: • Chargebacks: Chargebacks are discounts we provide to distributors in the event that the sales prices to end users are below the distributors’ acquisition price. This may occur due to a direct contract with a health system, a group purchasing organization (“GPO”) agreement or a sale to a government facility. Chargebacks are estimated based on known chargeback rates and recorded as a reduction of revenue on delivery to our customers. • Discounts: We offer customers various forms of incentives and consideration, including prompt-pay and other discounts. We estimate discounts primarily based on contractual terms. These discounts are recorded as a reduction of revenue on delivery to our customers. • Returns: We offer customers a limited right of return, generally for damaged or expired product. We estimate returns based on an internal analysis, which includes actual experience. The estimates for returns are recorded as a reduction of revenue on delivery to our customers. • Rebates: We participate in Medicaid rebate programs, which provide assistance to certain low-income patients based on each individual state’s guidelines regarding eligibility and services. Under the Medicaid rebate programs, we pay a rebate to each participating state, generally within three months after the quarter in which product was sold. Additionally, we may offer customer incentives and consideration in the form of volume-based or other rebates. The estimates for rebates are recorded as a reduction of revenue on delivery to our customers. We continue to assess our estimates of variable consideration as we accumulate additional historical data and will adjust these estimates accordingly. License Revenue At the inception of a licensing arrangement that includes development and regulatory milestone payments, we evaluate whether the milestones are considered probable of being achieved and estimate the amount to be included in the transaction price. We generally include these milestone payments in the transaction price when they are achieved because there is considerable uncertainty in the research and development processes that trigger receipt of these payments under our agreements. Similarly, we include approval milestone payments in the transaction price once the product is approved by the applicable regulatory agency. |
Research and Development Expenses | Research and Development Expenses Research and development expenses are recognized in the period that services are rendered or goods are received. Research and development expenses consist of salaries and benefits, laboratory supplies, facilities and other overhead costs, research-related manufacturing costs, contract service and clinical-related service costs performed by third party research organizations, research institutions and other outside service providers. Non-refundable prepayments for goods or services that will be used or rendered for future research and development activities are deferred and capitalized. Such amounts are recognized as an expense as the related goods are delivered or the related services are performed. We also utilize significant judgment and estimates to record accruals for estimated ongoing research costs based on the progress of the studies and progress of research manufacturing activities. |
Interest Expense on Deferred Royalty Obligation | Interest Expense on Deferred Royalty Obligation Interest expense related to the deferred royalty obligation is recognized over the expected repayment term of the deferred royalty obligation using the effective interest method. The assumptions used in determining the expected repayment term of the deferred royalty obligation require us to make estimates that could impact the effective interest rate. Each reporting period, we estimate the expected repayment term of the deferred royalty obligation based on forecasted net sales of GIAPREZA ® . Changes in interest expense resulting from changes in the effective interest rate, if any, are recorded on a prospective basis. Refer to Note 11, “Debt” for more information. |
Net Income Per Share (Tables)
Net Income Per Share (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of computation of basic and diluted net income per share | The following table shows the computation of basic and diluted net income per share for the three and nine months ended September 30, 2023 and 2022: Three Months Ended September 30, Nine Months Ended September 30, (In thousands except per share data) 2023 2022 2023 2022 Numerator: Net income attributable to Innoviva stockholders, basic $ 82,046 $ 265,523 $ 118,191 $ 282,235 Add: interest expense on 2023 Notes, net of tax effect — 412 86 2,003 Add: interest expense on 2025 Notes, net of tax effect 1,236 994 3,703 3,533 Add: interest expense on 2028 Notes, net of tax effect 1,543 1,769 4,618 3,862 Net income attributable to Innoviva stockholders, diluted $ 84,825 $ 268,698 $ 126,598 $ 291,633 Denominator: Weighted-average shares used to compute basic net income 64,953 69,731 66,016 69,640 Dilutive effect of 2023 Notes — 4,866 250 6,629 Dilutive effect of 2025 Notes 11,150 11,150 11,150 11,150 Dilutive effect of 2028 Notes 9,955 9,955 9,955 7,559 Dilutive effect of options and awards granted under equity 106 128 133 94 Weighted-average shares used to compute diluted net income 86,164 95,830 87,504 95,072 Net income per share attributable to Innoviva stockholders Basic $ 1.26 $ 3.81 $ 1.79 $ 4.05 Diluted $ 0.98 $ 2.80 $ 1.45 $ 3.07 |
Schedule of anti-dilutive securities | The following common stock equivalents were not included in the computation of diluted net income per share because their effect was anti-dilutive for the periods presented: Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2023 2022 2023 2022 Outstanding options and awards granted under equity incentive 1,389 705 1,284 577 Outstanding stock warrant 591 526 591 177 Total 1,980 1,231 1,875 754 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of net revenue from collaborative arrangements | Net revenue recognized under our GSK Agreements was as follows: Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2023 2022 2023 2022 Royalties $ 45,585 $ 55,663 $ 150,922 $ 170,753 Royalties 11,429 9,943 32,127 28,015 Royalties — — — 72,029 Total royalties 57,014 65,606 183,049 270,797 Less: amortization of capitalized fees ( 3,456 ) ( 3,456 ) ( 10,368 ) ( 10,368 ) Total net royalty revenue $ 53,558 $ 62,150 $ 172,681 $ 260,429 |
Consolidated Entities and Acq_2
Consolidated Entities and Acquisitions (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Consolidated Entities | |
Pro Forma Information | The following table presents certain unaudited pro-forma financial information for the three and nine months ended September 30, 2022 as if the consolidation of Entasis and La Jolla occurred on January 1, 2021. The unaudited pro forma financial information is presented for informational purposes only, and is not indicative of the results of operations that would have been achieved if the acquisitions had taken place on January 1, 2021, or of results that may occur in the future. The unaudited pro forma financial information combines the historical results of the Entasis and La Jolla with the Company’s consolidated historical results and includes certain adjustments including, but not limited to, fair value adjustments to equity investments in Entasis’ common stock and warrants, fair value adjustments to inventory, amortization of intangible assets, and interest expense on deferred royalty obligations and acquisition-related costs. Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2022 2022 Revenue $ 72,830 $ 292,077 Net income $ 223,082 $ 273,301 Net income attributable to Innoviva stockholders $ 274,407 $ 282,704 |
Entasis Therapeutics Holdings Inc | |
Consolidated Entities | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table represents the adjusted fair values of the assets acquired and liabilities assumed by us in the transaction: (In thousands) February 17, 2022 Cash and cash equivalents $ 23,070 Prepaid expenses 5,554 Other current assets 1,959 Property and equipment, net 185 Right-of-use assets 959 Goodwill 11,493 Intangible assets 106,700 Other assets 302 Total assets acquired $ 150,222 Accounts payable $ 1,583 Accrued personnel-related expenses 1,058 Other current liabilities 5,096 Deferred tax liabilities 7,769 Total liabilities assumed $ 15,506 Total assets acquired, net $ 134,716 |
La Jolla Pharmaceutical Company | |
Consolidated Entities | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | T he following table represents the adjusted fair values of the assets acquired and liabilities assumed by us in the transaction: (In thousands) August 22, 2022 Cash and cash equivalents $ 47,415 Short-term marketable securities 471 Accounts receivable 5,876 Inventory 66,200 Prepaid expenses 1,261 Other current assets 907 Property and equipment, net 13 Right-of-use assets 226 Goodwill 6,411 Intangible assets 151,000 Deferred tax assets 7,461 Other assets 710 Total assets acquired $ 287,951 Accounts payable $ 1,237 Deferred revenue, current 2,849 Other accrued liabilities 11,362 Other long-term liabilities 65,944 Total liabilities assumed $ 81,392 Total assets acquired, net $ 206,559 |
Theravance Respiratory Company, LLC | |
Consolidated Entities | |
Schedule of Income Statements of VIE | The summarized financial information of TRC for the three and nine months ended September 30, 2022 are presented as follows: Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2022 2022 Royalty revenue $ — $ 72,029 Operating expenses ( 5 ) 332 Income (loss) from operations 5 71,697 Other income, net — 10 Realized loss ( 39,386 ) ( 39,386 ) Income tax expense, net — 1 Changes in fair values of equity and long-term — ( 8,884 ) Net income (loss) $ ( 39,381 ) $ 23,438 |
Equity and Long-term Investme_2
Equity and Long-term Investments and Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Financial Instruments and Fair Value Measurements | |
Schedule of amortized cost and estimated fair values for available-for-sale securities | The estimated fair value of available-for-sale securities is based on quoted market prices for these or similar investments that were based on prices obtained from a commercial pricing service. Available-for-sale securities are summarized below: September 30, 2023 Gross Gross Amortized Unrealized Unrealized Estimated (In thousands) Cost Gains Losses Fair Value Money market funds (1) $ 134,287 $ — $ — $ 134,287 Total $ 134,287 $ — $ — $ 134,287 (1) Money market funds are included in cash and cash equivalents in the condensed consolidated balance sheets . December 31, 2022 Gross Gross Amortized Unrealized Unrealized Estimated (In thousands) Cost Gains Losses Fair Value Money market funds (1) $ 263,469 $ — $ — $ 263,469 Total $ 263,469 $ — $ — $ 263,469 (1) Money market funds are included in cash and cash equivalents in the condensed consolidated balance sheets |
Schedule of Available-for-Sale Securities Measured at Fair Value on a Recurring Basis | Our available-for-sale securities, equity and long-term investments and contingent value rights are measured at fair value on a recurring basis and our debt is carried at amortized cost basis. Estimated Fair Value Measurements as of September 30, 2023 Using: Quoted Price Significant Significant Identical Observable Unobservable Types of Instruments Assets Inputs Inputs (In thousands) Level 1 Level 2 Level 3 Total Assets Money market funds $ 134,287 $ — $ — $ 134,287 Investments held by ISP Fund LP (1) 239,058 — 2,330 241,388 Equity investment - Armata Common Stock 75,230 — — 75,230 Equity investment - Armata Warrants — 31,810 — 31,810 Convertible debt investment - Armata Note — — 49,684 49,684 Term loan investment - Armata Term Loan — — 26,199 26,199 Convertible debt investment - Gate Note — — 22,276 22,276 Total assets measured at estimated fair value $ 448,575 $ 31,810 $ 100,489 $ 580,874 Liabilities Debt 2025 Notes $ — $ 191,923 $ — $ 191,923 2028 Notes — 217,745 — 217,745 Total fair value of debt $ — $ 409,668 $ — $ 409,668 Contingent value rights — — 595 595 Total liabilities measured at estimated fair value $ — $ 409,668 $ 595 $ 410,263 (1) The investments held by ISP Fund LP consisted of $ 298.5 million in equity investments, which included $ 36.9 million in money market funds, and $ 57.1 million receivable from the maturity of convertible notes. Our total capital contribution of $ 300 million is subject to a 36-month lock-up period from the date of such capital contributions. Estimated Fair Value Measurements as of December 31, 2022 Using: Quoted Price in Active Significant Markets for Other Significant Identical Observable Unobservable Types of Instruments Assets Inputs Inputs (In thousands) Level 1 Level 2 Level 3 Total Assets Money market funds $ 263,469 $ — $ — $ 263,469 Investments held by ISP Fund LP (1) 265,982 — 54,578 320,560 Equity investment - Armata Common Stock 31,095 — — 31,095 Equity investment - Armata Warrants — 8,059 — 8,059 Equity investment - InCarda Warrants — — 605 605 Convertible debt investment - Gate Note — — 15,700 15,700 Total assets measured at estimated fair value $ 560,546 $ 8,059 $ 70,883 $ 639,488 Liabilities Debt 2023 Notes $ — $ 96,089 $ — $ 96,089 2025 Notes — 197,807 — 197,807 2028 Notes — 211,768 — 211,768 Total fair value of debt $ — $ 505,664 $ — $ 505,664 Contingent value rights — — 595 595 Total liabilities at estimated fair value $ — $ 505,664 $ 595 $ 506,259 (1) The investments held by ISP Fund LP consisted of $ 295.4 million equity investments, which included private placement positions and convertible notes of $ 54.6 million, and $ 25.1 million in money market funds. Our total capital contributions of $ 300 .0 million is subject to a 36-month lock-up period from the date of such capital contributions. |
Armata | |
Financial Instruments and Fair Value Measurements | |
Schedule of Income Statements of VIE | The summarized financial information, including the portion we do not own, is presented for Armata on a one quarter lag as follows: Income Statement Information Three Months Ended June 30, Nine Months Ended June 30, (In thousands) 2023 2022 2023 2022 Revenue $ 980 $ 1,883 $ 2,827 $ 4,108 Loss from operations $ ( 9,629 ) $ ( 9,220 ) $ ( 31,303 ) $ ( 24,043 ) Net loss $ ( 3,547 ) $ ( 9,215 ) $ ( 28,351 ) $ ( 24,036 ) |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of Accumulated Amortization of Recognized Intangible Assets | The carrying basis and accumulated amortization of recognized intangible assets as of September 30, 2023 and December 31, 2022 were as follows: September 30, 2023 Useful Life Gross Accumulated Net Carrying (In thousands) (Years) Amount Amortization Amount Marketed products 8 - 10 $ 219,700 $ ( 19,586 ) $ 200,114 In-process research and development 2,600 — $ 2,600 Collaboration agreement 10 35,400 ( 1,269 ) $ 34,131 Total $ 257,700 $ ( 20,855 ) $ 236,845 December 31, 2022 Useful Life Gross Accumulated Net Carrying (In thousands) (Years) Amount Amortization Amount Marketed products 8 - 10 $ 151,000 $ ( 5,581 ) $ 145,419 In-process research and development 72,100 — 72,100 Collaboration agreement 35,400 — 35,400 Total $ 258,500 $ ( 5,581 ) $ 252,919 |
Balance Sheet Components (Table
Balance Sheet Components (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Balance Sheet Related Disclosures [Abstract] | |
Schedule of Inventory | Inventory consisted of the following: September 30, December 31, (in thousands) 2023 2022 Raw materials $ 8,859 $ 5,757 Work-in-progress 13,231 25,052 Finished goods 18,425 25,088 Total inventory $ 40,515 $ 55,897 |
Schedule Of Other Accrued Liabilities | Other accrued liabilities consisted of the following: September 30, December 31, (in thousands) 2023 2022 Accrued contract manufacturing expenses $ 5,645 $ 8,382 Accrued clinical expenses 712 692 Accrued research expenses 211 349 Accrued professional services 9,796 3,977 Current portion of lease liabilities 1,211 1,316 Current portion of deferred royalty obligations 3,976 2,639 Accrued license fees and royalties 730 943 Other 2,418 2,909 Total other accrued liabilities $ 24,699 $ 21,207 |
Schedule of Other Long-term Liabilities | Other long-term liabilities consisted of the following: September 30, December 31, (in thousands) 2023 2022 Long-term portion of deferred royalty obligation $ 66,142 $ 67,947 Long-term portion of lease liabilities 1,953 $ 2,376 Contingent value rights liability 595 595 Total other long-term liabilities $ 68,690 $ 70,918 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of stock-based compensation expense | The following table summarizes stock-based compensation expense: Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2023 2022 2023 2022 Selling, general and administrative $ 1,308 $ 2,422 $ 3,502 $ 4,240 Research and development 134 1,295 $ 1,058 1,781 Total $ 1,442 $ 3,717 $ 4,560 $ 6,021 |
Summary of weighted-average assumptions used to calculate estimated value of stock options | Black-Scholes-Merton assumptions used in calculating the estimated value of stock options granted by Innoviva on the date of grant were as follows: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 (1) 2023 2022 Risk-free interest rate 4.13 % - 4.21 % — % 3.50 % - 4.21 % 1.60 % - 3.03 % Expected term (in years) 6.01 - 6.22 — 5.16 - 6.22 5.50 - 6.11 Volatility 37.3 % - 37.8 % — % 37.3 % - 38.5 % 38.8 % - 40.5 % Dividend yield — % — % — % — % Weighted-average estimated fair value of stock options granted $ 5.66 - $ 5.97 $ — $ 5.22 - $ 5.97 $ 6.98 - $ 7.73 (1) There were no options granted for the three months ended September 30, 2022. |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Debt | |
Schedule of Debt | Our debt consists of the following: September 30, December 31, (In thousands) 2023 2022 2023 Notes $ — $ 96,204 2025 Notes 192,500 192,500 2028 Notes 261,000 261,000 Total debt 453,500 549,704 Less: Unamortized debt discount and issuance costs ( 7,782 ) ( 9,331 ) Total debt, net $ 445,718 $ 540,373 Less: Current portion of long-term debt, net — 96,193 Total long-term debt, net $ 445,718 $ 444,180 |
Aggregate Scheduled Maturities of Convertible Debt | The aggregate scheduled maturities of our convertible debt as of September 30, 2023 were as follows: (In thousands) September 30, 2023 Years ending December 31: Remainder of 2023 $ — 2024 — 2025 192,500 2026 — 2027 — Thereafter 261,000 Total $ 453,500 |
2023 Notes | |
Debt | |
Schedule of Components of Interest Expense | The following table sets forth total interest expense recognized related to the 2023 Notes: Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2023 2022 2023 2022 Contractual interest expense $ — $ 511 $ 85 $ 2,106 Amortization of debt issuance costs — 59 11 240 Total interest and amortization expense $ — $ 570 $ 96 $ 2,346 |
2025 Notes | |
Debt | |
Summary of Liability and Equity Components of Convertible Notes | Our outstanding 2025 Notes balances consisted of the following: September 30, December 31, (In thousands) 2023 2022 Principal $ 192,500 $ 192,500 Debt discount and issuance costs, net ( 1,385 ) ( 1,917 ) Net carrying amount $ 191,115 $ 190,583 |
Schedule of Components of Interest Expense | The following table sets forth total interest expense recognized related to the 2025 Notes for the three and nine months ended September 30, 2023 and 2022: Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2023 2022 2023 2022 Contractual interest expense $ 1,203 $ 1,203 $ 3,609 $ 3,609 Amortization of debt issuance costs 179 174 532 517 Total interest and amortization expense $ 1,382 $ 1,377 $ 4,141 $ 4,126 |
2028 Notes | |
Debt | |
Summary of Liability and Equity Components of Convertible Notes | Our outstanding 2028 Notes balance consisted of the following: September 30, December 31, (In thousands) 2023 2022 Principal $ 261,000 $ 261,000 Debt issuance costs, net ( 6,397 ) ( 7,403 ) Net carrying amount $ 254,603 $ 253,597 |
Schedule of Components of Interest Expense | The following table sets forth total interest expense recognized related to the 2028 Notes for the three and nine months ended September 30, 2023 and 2022: Three months ended September 30, Nine months ended September 30, (In thousands) 2023 2022 2023 2022 Contractual interest expense $ 1,387 $ 1,371 $ 4,160 $ 3,127 Amortization of debt issuance costs 340 328 1,006 735 Total interest and amortization expense $ 1,727 $ 1,699 $ 5,166 $ 3,862 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Components of Lease Cost | The components of lease cost are as follows: Three Months Ended September 30, Nine months ended September 30, (In thousands) 2023 2022 2023 2022 Straight line operating lease costs $ 361 $ 640 $ 1,080 $ 1,101 Variable lease costs 49 35 144 110 Total lease costs $ 410 $ 675 $ 1,224 $ 1,211 Supplemental cash flow information related to leases are as follows: Nine months ended September 30, (In thousands) 2023 2022 Cash paid for amounts included in the measurement of operating lease liabilities: $ 1,157 $ 540 Operating lease right-of-use assets obtained in exchange for operating lease obligations 463 3,323 Right-of-use assets obtained through acquisitions — 1,185 |
Schedule of Supplemental Cash Flow Information Related to Leases | Supplemental cash flow information related to leases are as follows: Nine months ended September 30, (In thousands) 2023 2022 Cash paid for amounts included in the measurement of operating lease liabilities: $ 1,157 $ 540 Operating lease right-of-use assets obtained in exchange for operating lease obligations 463 3,323 Right-of-use assets obtained through acquisitions — 1,185 |
Schedule of Future Minimum Lease Payments | Future minimum payments on our operating leases as of September 30, 2023 were as follows: (In thousands) Years ending December 31: Remainder of 2023 $ 377 2024 1,373 2025 1,428 Thereafter 291 Total undiscounted lease payments 3,469 Less: imputed interest ( 305 ) Total operating lease liabilities $ 3,164 |
Description of Operations and_3
Description of Operations and Summary of Significant Accounting Policies (Details) $ in Billions | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2023 USD ($) Customer | Jul. 20, 2022 | |
Description of Operations and Summary of Significant Accounting Policies | |||
Number of customers | Customer | 3 | ||
Theravance Respiratory Company, LLC | |||
Description of Operations and Summary of Significant Accounting Policies | |||
Equity method investment ownership percentage | 15% | ||
Customer Concentration Risk | Net Product Sales | La Jolla | Customer One | |||
Description of Operations and Summary of Significant Accounting Policies | |||
Concentration Risk, Percentage | 27% | 32% | |
Customer Concentration Risk | Net Product Sales | La Jolla | Customer Two | |||
Description of Operations and Summary of Significant Accounting Policies | |||
Concentration Risk, Percentage | 28% | 28% | |
Customer Concentration Risk | Net Product Sales | La Jolla | Customer Three | |||
Description of Operations and Summary of Significant Accounting Policies | |||
Concentration Risk, Percentage | 26% | 27% | |
Customer Concentration Risk | Receivables from Net Product Sales | La Jolla | Customer One | |||
Description of Operations and Summary of Significant Accounting Policies | |||
Concentration Risk, Percentage | 29% | ||
Customer Concentration Risk | Receivables from Net Product Sales | La Jolla | Customer Two | |||
Description of Operations and Summary of Significant Accounting Policies | |||
Concentration Risk, Percentage | 28% | ||
Customer Concentration Risk | Receivables from Net Product Sales | La Jolla | Customer Three | |||
Description of Operations and Summary of Significant Accounting Policies | |||
Concentration Risk, Percentage | 14% | ||
Long-Acting Beta2 Agonist (LABA) Collaboration | GSK | RELVAR/BREO | |||
Description of Operations and Summary of Significant Accounting Policies | |||
Royalty rate for first level of annual global net sales (as a percent) | 15% | ||
Annual global sales level used to determine royalty rate | $ | $ 3 | ||
Royalty rate for sales above first level of annual global net sales (as a percent) | 5% | ||
Long-Acting Beta2 Agonist (LABA) Collaboration | GSK | ANORO | Minimum | |||
Description of Operations and Summary of Significant Accounting Policies | |||
Royalty rate for combination products (as a percent) | 6.50% | ||
Long-Acting Beta2 Agonist (LABA) Collaboration | GSK | ANORO | Maximum | |||
Description of Operations and Summary of Significant Accounting Policies | |||
Royalty rate for combination products (as a percent) | 10% |
Net Income Per Share - Basic an
Net Income Per Share - Basic and Diluted EPS (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Numerator: | ||||
Net income attributable to Innoviva stockholders, basic | $ 82,046 | $ 265,523 | $ 118,191 | $ 282,235 |
Net income attributable to Innoviva stockholders, diluted | $ 84,825 | $ 268,698 | $ 126,598 | $ 291,633 |
Denominator: | ||||
Weighted-average shares used to compute basic net income per share attributable to Innoviva stockholders | 64,953 | 69,731 | 66,016 | 69,640 |
Dilutive effect of options and awards granted under equity incentive plan and employee stock purchase plan | 106 | 128 | 133 | 94 |
Weighted-average shares used to compute diluted net income per share attributable to Innoviva stockholders | 86,164 | 95,830 | 87,504 | 95,072 |
Net income per share attributable to Innoviva stockholders | ||||
Basic net income per share | $ 1.26 | $ 3.81 | $ 1.79 | $ 4.05 |
Diluted net income per share | $ 0.98 | $ 2.8 | $ 1.45 | $ 3.07 |
2023 Notes | ||||
Numerator: | ||||
Add: interest expense on 2025 Notes, net of tax effect | $ 0 | $ 412 | $ 86 | $ 2,003 |
Denominator: | ||||
Dilutive effect | 0 | 4,866 | 250 | 6,629 |
2025 Notes | ||||
Numerator: | ||||
Add: interest expense on 2025 Notes, net of tax effect | $ 1,543 | $ 1,769 | $ 4,618 | $ 3,862 |
Denominator: | ||||
Dilutive effect | 11,150 | 11,150 | 11,150 | 11,150 |
2028 Notes | ||||
Numerator: | ||||
Add: interest expense on 2025 Notes, net of tax effect | $ 1,236 | $ 994 | $ 3,703 | $ 3,533 |
Denominator: | ||||
Dilutive effect | 9,955 | 9,955 | 9,955 | 7,559 |
Net Income Per Share - Anti-Dil
Net Income Per Share - Anti-Dilutive Securities (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Anti-Dilutive Securities | ||||
Anti-dilutive securities (in shares) | 1,980 | 1,231 | 1,875 | 754 |
Equity incentive plans and ESPP | ||||
Anti-Dilutive Securities | ||||
Anti-dilutive securities (in shares) | 1,389 | 705 | 1,284 | 577 |
Outstanding Stock Warrant | ||||
Anti-Dilutive Securities | ||||
Anti-dilutive securities (in shares) | 591 | 526 | 591 | 177 |
Revenue Recognition - Schedule
Revenue Recognition - Schedule of net revenue from collaborative arrangements (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Revenue Recognition and Collaboration Arrangements | ||||
Total net royalty revenue | $ 67,259 | $ 67,257 | $ 224,623 | $ 265,536 |
Royalty revenue | ||||
Revenue Recognition and Collaboration Arrangements | ||||
Total net royalty revenue | 53,558 | 62,150 | 172,681 | 260,429 |
GSK | ||||
Revenue Recognition and Collaboration Arrangements | ||||
Total net royalty revenue | 53,558 | 62,150 | 172,681 | 260,429 |
GSK | Royalty revenue | ||||
Revenue Recognition and Collaboration Arrangements | ||||
Royalties | 57,014 | 65,606 | 183,049 | 270,797 |
Less: amortization of capitalized fees paid to a related party | (3,456) | (3,456) | (10,368) | (10,368) |
GSK | RELVAR/BREO | ||||
Revenue Recognition and Collaboration Arrangements | ||||
Royalties | 45,585 | 55,663 | 150,922 | 170,753 |
GSK | ANORO | ||||
Revenue Recognition and Collaboration Arrangements | ||||
Royalties | 11,429 | 9,943 | 32,127 | 28,015 |
GSK | TRELEGY | ||||
Revenue Recognition and Collaboration Arrangements | ||||
Royalties | $ 0 | $ 0 | $ 0 | $ 72,029 |
Revenue Recognition (Details)
Revenue Recognition (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||
Jul. 13, 2022 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Disaggregation of Revenue [Line Items] | ||||||
Net revenue | $ 67,259 | $ 67,257 | $ 224,623 | $ 265,536 | ||
UNITED STATES | Net Product Sales | Geographic Concentration Risk | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Concentration Risk, Percentage | 86% | 93% | ||||
GIAPREZA | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Net revenue | $ 8,000 | $ 28,200 | ||||
XERAVA | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Net revenue | 5,100 | 12,100 | ||||
XACDURO | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Net revenue | 600 | 600 | ||||
GSK | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Percentage of royalty payments not entitled to receive | 15% | |||||
Net revenue | 53,558 | $ 62,150 | 172,681 | $ 260,429 | ||
La Jolla | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Net revenue | $ 5,100 | $ 13,700 | $ 40,900 | |||
La Jolla | GIAPREZA | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Net revenue | 3,800 | |||||
La Jolla | XERAVA | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Net revenue | $ 1,300 |
License and Collaboration Arr_2
License and Collaboration Arrangements (Additional Information) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Net revenue | $ 67,259 | $ 67,257 | $ 224,623 | $ 265,536 |
Zai Lab | Research and Development Support | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Future potential milestone payment receivable | 91,000 | 91,000 | ||
License revenue recognized | 3 | |||
PAION AG | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Future potential milestone payment receivable | 109,500 | 109,500 | ||
PAION AG | Cost Reimbursement | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Revenues | 1,000 | 1,000 | ||
Everest Medicines Limited | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Revenues | 900 | 1,600 | ||
Sales milestone payments receivable | 20,000 | 20,000 | ||
License revenue recognized | $ 8,000 | |||
Royalties payable period after first commercial sale of product | 10 years | |||
Everest Medicines Limited | Commercial Supply Agreement | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Percentage of reimbursed for direct and certain indirect manufacturing costs | 110% | |||
George Washington University | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Percentage of royalty payable on net sales | 6% | |||
Percentage of royalty on payments received from sublicensees | 15% | |||
Obligation to pay royalties | $ 500 | $ 1,700 | ||
Harvard University | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Percentage of royalty payable on net sales | 5% | |||
Percentage of royalty on payments received from sublicensees | 20% | |||
Cost of license revenue | $ 1,600 | |||
Clinical development and regulatory milestones amount payable | $ 15,100 | |||
Percentage of minimum royalty rate | 4.50% | |||
Percentage of maximum royalty based on achievement of annual net product sales thresholds | 7.50% | |||
Paratek Pharmaceuticals, Inc. | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Percentage of royalty payable on net sales | 2.25% | |||
Claim expiration | 2023-10 |
Consolidated Entities and Acq_3
Consolidated Entities and Acquisitions - Theravance Respiratory Company, LLC (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||
Jul. 20, 2022 | Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Income statements | ||||||||||
Total revenue | $ 67,259 | $ 67,257 | $ 224,623 | $ 265,536 | ||||||
Other income, net | 1,047 | 28 | (4,289) | (750) | ||||||
Income tax expense, net | 3,906 | 57,077 | 14,706 | 63,061 | ||||||
Net income (loss) | 82,046 | $ 1,280 | $ 34,865 | 229,347 | $ 21,371 | $ 37,858 | 118,191 | 288,576 | ||
Royalty revenue | ||||||||||
Income statements | ||||||||||
Total revenue | $ 53,558 | 62,150 | $ 172,681 | 260,429 | ||||||
Theravance Respiratory Company, LLC | ||||||||||
CONSOLIDATED ENTITIES | ||||||||||
Ownership interest in LLC | 15% | |||||||||
Proceeds from sale of economic interest under Equity Purchase Agreement | $ 277,500 | |||||||||
Contingent sales based milestone payment | 50,000 | |||||||||
Cash distribution | 4,400 | |||||||||
Equity method investments | $ 39,400 | |||||||||
Income statements | ||||||||||
Operating expenses | (5) | 332 | ||||||||
Income (loss) from operations | 5 | 71,697 | ||||||||
Other income, net | 0 | 10 | ||||||||
Realized loss | (39,386) | (39,386) | ||||||||
Income tax expense, net | 0 | 1 | ||||||||
Changes in fair values of equity and long-term investments | 0 | (8,884) | ||||||||
Net income (loss) | 39,381 | 23,438 | ||||||||
Theravance Respiratory Company, LLC | Royalty revenue | ||||||||||
Income statements | ||||||||||
Total revenue | $ 0 | $ 72,029 |
Consolidated Entities and Acq_4
Consolidated Entities and Acquisitions - Entasis Therapeutics Holdings, Inc. (Details) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Jul. 11, 2022 USD ($) | Feb. 17, 2022 USD ($) $ / shares | Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Mar. 31, 2022 USD ($) | Sep. 30, 2023 USD ($) Director | Sep. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) | |
Subsidiary or Equity Method Investee [Line Items] | ||||||||
Total debt | $ 453,500 | $ 453,500 | $ 549,704 | |||||
Remeasurement loss | $ 7,800 | |||||||
Net loss attributable to Innoviva stockholders | 82,046 | $ 265,523 | 118,191 | $ 282,235 | ||||
Net income (loss) attributable to noncontrolling interests | $ 0 | (36,176) | $ 0 | 6,341 | ||||
Entasis Therapeutics Holdings Inc | ||||||||
Subsidiary or Equity Method Investee [Line Items] | ||||||||
Number of investee's board members which may be designated by the Company | Director | 2 | |||||||
Payment towards convertible promissory note | $ 0 | |||||||
Net loss attributable to Innoviva stockholders | $ 2,700 | $ 13,600 | ||||||
Measurement period adjustments for change in value of goodwill | $ 1,200 | |||||||
Measurement period adjustments for change in value of intangible assets | 800 | |||||||
Noncontrolling interest | $ 38,500 | |||||||
Measurement period adjustments for change in value of deferred tax liabilities | $ 400 | |||||||
Entasis Therapeutics Holdings Inc | Consolidated Investees [Member] | ||||||||
Subsidiary or Equity Method Investee [Line Items] | ||||||||
Equity method investment ownership percentage | 59.90% | |||||||
Entasis Therapeutics Holdings Inc | Securities Purchase Agreement | Convertible Promissory Note | ||||||||
Subsidiary or Equity Method Investee [Line Items] | ||||||||
Total debt | $ 15,000 | |||||||
Debt instrument maturity date | Aug. 18, 2022 | |||||||
Debt Instrument, annual interest rate | 0.59% | |||||||
Conversion price (dollars per share) | $ / shares | $ 1.48 | |||||||
Entasis Therapeutics Holdings Inc | Common stock | ||||||||
Subsidiary or Equity Method Investee [Line Items] | ||||||||
Fair value of equity securities | $ 64,500 | |||||||
Entasis Therapeutics Holdings Inc | Warrants | ||||||||
Subsidiary or Equity Method Investee [Line Items] | ||||||||
Fair value of equity securities | $ 31,400 |
Consolidated Entities and Acq_5
Consolidated Entities and Acquisitions - Schedule of Recognized Identified Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 | Aug. 22, 2022 | Feb. 17, 2022 |
Business Acquisition [Line Items] | ||||
Goodwill | $ 17,905 | $ 26,713 | ||
La Jolla Pharmaceutical Company | ||||
Business Acquisition [Line Items] | ||||
Cash and cash equivalents | $ 47,415 | |||
Short-term marketable securities | 471 | |||
Accounts receivable | 5,876 | |||
Inventory | 66,200 | |||
Prepaid expenses | 1,261 | |||
Other current assets | 907 | |||
Property and equipment, net | 13 | |||
Right-of-use assets | 226 | |||
Goodwill | 6,411 | |||
Intangible assets | 151,000 | 151,000 | ||
Deferred tax assets | 7,461 | |||
Other assets | 710 | |||
Total assets acquired | 287,951 | |||
Accounts payable | 1,237 | |||
Deferred revenue, current | 2,849 | |||
Other accrued liabilities | 11,362 | |||
Other long-term liabilities | 65,944 | |||
Total liabilities assumed | 81,392 | |||
Total assets acquired, net | $ 206,559 | |||
Entasis Therapeutics Holdings Inc | ||||
Business Acquisition [Line Items] | ||||
Cash and cash equivalents | $ 23,070 | |||
Prepaid expenses | 5,554 | |||
Other current assets | 1,959 | |||
Property and equipment, net | 185 | |||
Right-of-use assets | 959 | |||
Goodwill | 11,493 | |||
Intangible assets | $ 106,700 | 106,700 | ||
Other assets | 302 | |||
Total assets acquired | 150,222 | |||
Accounts payable | 1,583 | |||
Accrued personnel-related expenses | 1,058 | |||
Other current liabilities | 5,096 | |||
Deferred tax liabilities | 7,769 | |||
Total liabilities assumed | 15,506 | |||
Total assets acquired, net | $ 134,716 |
Consolidated Entities and Acq_6
Consolidated Entities and Acquisitions - Pro Forma Information (Details) - Entasis Therapeutics Holdings Inc - La Jolla Pharmaceutical Company - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2022 | Sep. 30, 2022 | |
Business Acquisition [Line Items] | ||
Revenue | $ 72,830 | $ 292,077 |
Net income | 223,082 | 273,301 |
Net income attributable to Innoviva stockholders | $ (274,407) | $ 282,704 |
Consolidated Entities and Acq_7
Consolidated Entities and Acquisitions - ISP Fund LP (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Mar. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | May 31, 2021 | Dec. 31, 2020 | |
CONSOLIDATED ENTITIES | ||||||||
Total assets | $ 1,188,104 | $ 1,188,104 | $ 1,231,497 | |||||
ISP Fund LP | ||||||||
CONSOLIDATED ENTITIES | ||||||||
Distribution from partnership | $ 110,000 | |||||||
Economic interest of the Partnership (in percent) | 100% | |||||||
Total assets | 298,600 | $ 298,600 | 320,600 | |||||
Total liabilities | 1,100 | 1,100 | $ 1,600 | |||||
Gain (Loss) on Investments | 22,400 | $ 10,500 | 22,700 | $ 14,900 | ||||
Net investment-related income (expense) earned (incurred) | $ 1,100 | $ 300 | $ 1,200 | $ 1,000 | ||||
Capital contribution | $ 110,000 | $ 300,000 | ||||||
Lock-up period | 36 months |
Consolidated Entities and Acq_8
Consolidated Entities and Acquisitions - La Jolla Pharmaceutical Company (Details) - La Jolla Pharmaceutical Company - USD ($) $ / shares in Units, $ in Millions | 6 Months Ended | 12 Months Ended | ||
Aug. 31, 2023 | Aug. 22, 2022 | Jun. 30, 2023 | Dec. 31, 2022 | |
CONSOLIDATED ENTITIES | ||||
Measurement period adjustments for change in value of goodwill | $ 3 | $ 13.1 | ||
Decrease in deferred tax liabilities | 0.6 | 2.6 | ||
Increase in deferred tax assets | $ 2.4 | $ 10.5 | ||
Total consideration paid | $ 206.6 | |||
Acquisition share price | $ 6.23 | |||
Acquisition-related costs | $ 5.3 |
Equity and Long-term Investme_3
Equity and Long-term Investments and Fair Value Measurements - Equity Investment in Armata (Details) - Armata $ / shares in Units, $ in Millions | 3 Months Ended | 6 Months Ended | 9 Months Ended | |||||||||
Jul. 10, 2023 USD ($) | Jan. 10, 2023 USD ($) $ / shares | Feb. 09, 2022 USD ($) $ / shares shares | Sep. 30, 2023 USD ($) Director | Sep. 30, 2022 USD ($) | Dec. 31, 2021 USD ($) shares | Mar. 31, 2021 USD ($) shares | Mar. 31, 2020 USD ($) shares | Jun. 30, 2023 Tranche | Sep. 30, 2023 USD ($) Director | Sep. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) | |
Equity investment | ||||||||||||
Number of tranches | Tranche | 2 | |||||||||||
Percentage of maximum voting rights | 49.50% | 49.50% | ||||||||||
Number of Investee's Board members currently representing the Company | Director | 3 | 3 | ||||||||||
Special terms on re-designating board member to board of investee | In addition, as of February 9, 2022, Armata entered into an amended and restated investor rights agreement with the Company and ISO, pursuant to which for as long as the Company and ISO hold at least 12.5% of the outstanding shares of Armata’s common stock on a fully-diluted, the Company and ISO shall have the right to designate two directors to Armata’s board of directors, and for so long as the Company and ISO hold at least 8%, but less than 12.5%, of the outstanding shares of Armata’s common stock on a fully-diluted basis, the Company and ISO shall have the right to designate one director to Armata’s board of directors, subject to certain conditions and qualifications set forth in the amended and restated investor rights agreement. | |||||||||||
Credit and Security Agreement | ||||||||||||
Equity investment | ||||||||||||
Term loan facility in aggregate amount | $ 25 | |||||||||||
Debt Instrument, annual interest rate | 14% | |||||||||||
Debt instrument maturity date | Jan. 10, 2025 | |||||||||||
Consolidated Investees | ||||||||||||
Equity investment | ||||||||||||
Equity method investment ownership percentage | 69.40% | 69.40% | 69.40% | |||||||||
Two Directors | ||||||||||||
Equity investment | ||||||||||||
Armata outstanding shares percentage | 12.50% | |||||||||||
Secured Convertible Credit Agreement | ||||||||||||
Equity investment | ||||||||||||
Debt instrument, description | On January 10, 2023, we entered into a Secured Convertible Credit Agreement (the “Credit Agreement”) with Armata, under which we extended a one-year convertible note (the "Armata Convertible Note") in an aggregate amount of $30.0 million at an interest rate of 8.0% per annum. | |||||||||||
Term loan facility in aggregate amount | $ 30 | |||||||||||
Debt Instrument, annual interest rate | 8% | |||||||||||
Debt instrument, term | 1 year | |||||||||||
Common stock and warrants | ||||||||||||
Equity investment | ||||||||||||
Amount of securities purchase agreement | $ 25 | |||||||||||
Unrealized loss | $ 35.3 | |||||||||||
Unrealized gain | $ 11.7 | |||||||||||
Warrants purchased in 2020 | ||||||||||||
Equity investment | ||||||||||||
Number of warrants purchased under the securities purchase agreement | shares | 8,710,800 | |||||||||||
Exercise price of warrants | $ / shares | $ 2.87 | |||||||||||
Term of warrants | 5 years | |||||||||||
Warrants purchased in 2021 | ||||||||||||
Equity investment | ||||||||||||
Exercise price of warrants | $ / shares | $ 3.25 | |||||||||||
Term of warrants | 5 years | |||||||||||
Warrants purchased in 2022 | ||||||||||||
Equity investment | ||||||||||||
Exercise price of warrants | $ / shares | $ 5 | |||||||||||
Term of warrants | 5 years | |||||||||||
Warrants | ||||||||||||
Equity investment | ||||||||||||
Equity method investments at fair value | $ 31.8 | $ 31.8 | $ 8.1 | |||||||||
Unrealized gain | 67.9 | |||||||||||
Common stock | ||||||||||||
Equity investment | ||||||||||||
Number of shares to be purchased under the securities purchase agreement | shares | 8,710,800 | |||||||||||
Equity method investments at fair value | 75.2 | 75.2 | $ 31.1 | |||||||||
Unrealized gain | 72 | |||||||||||
Armata Convertible Note | ||||||||||||
Equity investment | ||||||||||||
Equity method investments at fair value | 49.7 | 49.7 | ||||||||||
Unrealized gain | 18.5 | 19.6 | ||||||||||
Armata Term Loan | ||||||||||||
Equity investment | ||||||||||||
Equity method investments at fair value | 26.2 | 26.2 | ||||||||||
Unrealized gain | $ 1.1 | $ 1.1 | ||||||||||
Minimum [Member] | One Director | ||||||||||||
Equity investment | ||||||||||||
Armata outstanding shares percentage | 8% | |||||||||||
Maximum [Member] | One Director | ||||||||||||
Equity investment | ||||||||||||
Armata outstanding shares percentage | 12.50% | |||||||||||
Innoviva Strategic Opportunities, LLC | Common stock and warrants | ||||||||||||
Equity investment | ||||||||||||
Amount of securities purchase agreement | $ 45 | $ 20 | ||||||||||
Innoviva Strategic Opportunities, LLC | Warrants | ||||||||||||
Equity investment | ||||||||||||
Number of warrants to be purchased under the securities purchase agreement | shares | 4,500,000 | 6,153,847 | ||||||||||
Exercise price of warrants | $ / shares | $ 5 | |||||||||||
Innoviva Strategic Opportunities, LLC | Common stock | ||||||||||||
Equity investment | ||||||||||||
Number of shares to be purchased under the securities purchase agreement | shares | 1,212,122 | |||||||||||
Number of shares to be purchased under the securities purchase agreement | shares | 9,000,000 | |||||||||||
Number of warrants to be purchased under the securities purchase agreement | shares | 6,153,847 | |||||||||||
Amount of securities purchase agreement | $ 4 |
Equity and Long-term Investme_4
Equity and Long-term Investments and Fair Value Measurements - Schedule of Income Statement Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||||
Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2023 | Jun. 30, 2023 | Sep. 30, 2022 | Jun. 30, 2022 | |
Equity Investment | ||||||||||
Net revenue | $ 67,259 | $ 67,257 | $ 224,623 | $ 265,536 | ||||||
Net loss | $ 82,046 | $ 1,280 | $ 34,865 | $ 229,347 | $ 21,371 | $ 37,858 | $ 118,191 | $ 288,576 | ||
Armata | ||||||||||
Equity Investment | ||||||||||
Net revenue | 980 | 1,883 | $ 2,827 | $ 4,108 | ||||||
Loss from operations | (9,629) | (9,220) | (31,303) | (24,043) | ||||||
Net loss | $ (3,547) | $ (9,215) | $ (28,351) | $ (24,036) |
Equity and Long-term Investme_5
Equity and Long-term Investments and Fair Value Measurements - Equity Investment in InCarda (Details) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | |||||||
Jun. 15, 2022 USD ($) $ / shares shares | Mar. 09, 2022 USD ($) | Jun. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Jun. 30, 2022 USD ($) | Sep. 30, 2020 USD ($) shares | Sep. 30, 2023 USD ($) Director | Sep. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) | |
Series C preferred stock | |||||||||
Equity Investment | |||||||||
Impairment of equity investments | $ 2.9 | ||||||||
InCarda | |||||||||
Equity Investment | |||||||||
Number of Investee's Board members currently representing the Company | Director | 0 | ||||||||
Unrealized gain loss from fair value changes in equity investments | $ 3 | ||||||||
Unrealized gain | $ 0.2 | ||||||||
Unrealized loss | $ 8.8 | ||||||||
Carrying value wrote off warrant exercise | $ 0.1 | ||||||||
InCarda | Consolidated Investees [Member] | |||||||||
Equity Investment | |||||||||
Equity investment ownership percentage | 8.10% | 9% | |||||||
InCarda | Series C preferred stock and warrants | |||||||||
Equity Investment | |||||||||
Amount of securities purchase agreement | $ 15.8 | ||||||||
InCarda | Warrants | |||||||||
Equity Investment | |||||||||
Maximum number of additional shares into which warrants may be converted under the securities purchase agreement | shares | 5,117,358 | ||||||||
Extended expiration date | Mar. 31, 2023 | ||||||||
InCarda | Convertible note and warrants | |||||||||
Equity Investment | |||||||||
Amount of securities purchase agreement | $ 0.7 | ||||||||
InCarda | Common stock | |||||||||
Equity Investment | |||||||||
Number of shares issued resulting from recapitalization of equity structure | shares | 4,093,886 | ||||||||
InCarda | Series A1 preferred stock | |||||||||
Equity Investment | |||||||||
Debt Conversion, Converted Instrument, Shares Issued | shares | 37,350 | ||||||||
InCarda | Series D 1 Preferred Stock | |||||||||
Equity Investment | |||||||||
Debt Conversion, Converted Instrument, Shares Issued | shares | 8,771,780 | ||||||||
InCarda | Series D 2 Preferred Stock | |||||||||
Equity Investment | |||||||||
Debt Conversion, Converted Instrument, Shares Issued | shares | 3,369,802 | ||||||||
InCarda | Series D1 Warrant | |||||||||
Equity Investment | |||||||||
Debt Conversion, Converted Instrument, Shares Issued | shares | 2,490,033 | ||||||||
Exercise price of warrants | $ / shares | $ 0.2 | ||||||||
InCarda | Series C preferred stock | |||||||||
Equity Investment | |||||||||
Number of shares issued resulting from recapitalization of equity structure | shares | 20,469,432 | ||||||||
Debt Conversion, Converted Instrument, Shares Issued | shares | 5,117,358 | ||||||||
Transaction cost | $ 0.8 | ||||||||
Equity and long-term investments at fair value | $ 4.8 | $ 6.8 | |||||||
Impairment of equity investments | $ 9 | ||||||||
Exercise price of warrants | $ / shares | $ 0.73 | ||||||||
InCarda | Series D warrants | |||||||||
Equity Investment | |||||||||
Equity and long-term investments at fair value | 0.2 | 0.6 | |||||||
InCarda | Series D Preferred Stock | |||||||||
Equity Investment | |||||||||
Payments to acquire equity securities | $ 2.3 | ||||||||
InCarda | Series D1 Preferred Stock, Series D2 Preferred Stock and Common Stock | |||||||||
Equity Investment | |||||||||
Equity and long-term investments at fair value | $ 2.7 | $ 3.2 | |||||||
InCarda | Significant Unobservable Inputs, Level 3 | Backsolve Valuation | |||||||||
Equity Investment | |||||||||
Expected holding period | 2 years | 2 years | |||||||
Risk free interest rate | 4.90% | 3.20% | |||||||
Dividend yield | 0% | 0% | |||||||
Estimated volatility | 114.20% | 122% |
Equity and Long-term Investme_6
Equity and Long-term Investments and Fair Value Measurements - Equity Investment in ImaginAb (Details) - ImaginAb $ in Millions | Sep. 14, 2023 USD ($) shares | Mar. 14, 2023 USD ($) shares | Mar. 18, 2021 USD ($) shares | Sep. 30, 2023 USD ($) Director | Dec. 31, 2022 USD ($) |
Equity Investment | |||||
Transaction costs to acquire equity securities | $ 0.4 | ||||
Number of Investee's Board members currently representing the Company | Director | 1 | ||||
Equity and long-term investments at fair value | $ 7.6 | $ 6.4 | |||
Consolidated Investees [Member] | |||||
Equity Investment | |||||
Equity investment ownership percentage | 11.80% | 12.70% | |||
Series C preferred stock | |||||
Equity Investment | |||||
Number of shares to be purchased under the securities purchase agreement | shares | 4,051,724 | ||||
Amount of securities purchase agreement | $ 4.7 | ||||
Series C-2 preferred stock | |||||
Equity Investment | |||||
Number of shares to be purchased under the securities purchase agreement | shares | 405,852 | 270,568 | |||
Amount of securities purchase agreement | $ 0.6 | $ 0.6 | |||
One of ImaginAb's Common Stockholders | Common stock | |||||
Equity Investment | |||||
Number of shares to be purchased under the securities purchase agreement | shares | 4,097,157 | ||||
Amount of securities purchase agreement | $ 1.3 |
Equity and Long-term Investme_7
Equity and Long-term Investments and Fair Value Measurements - Convertible Promissory Note in Gate Neuroscience (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||||
Feb. 02, 2023 | Nov. 24, 2021 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Equity Investment | |||||||
Additional cash investment | $ 1,218 | $ 13,725 | |||||
Gate Neuroscience [Member] | |||||||
Equity Investment | |||||||
Number Of Common Stock Issued Description | The number of common stock shares to be issued in a qualified event shall be equal to the amount due on the conversion date divided by the lesser of a capped conversion price (the “Capped Conversion Price”) and the qualified event price (the “Qualified Event Price”). The Capped Conversion Price is calculated as $50.0 million divided by the number of shares of common stock outstanding at such time on a fully diluted basis. The Qualified Event Price is the price per share determined by the qualified event. A qualified financing is a sale or series of sales of preferred stock where (i) at least 50 percent of counterparties are not existing shareholders, (ii) net proceeds to Gate are at least $35.0 million, and (iii) the stated or implied equity valuation of Gate is at least $80.0 million. | ||||||
Additional cash investment | $ 5,000 | ||||||
Equity and long-term investments at fair value | $ 22,300 | 22,300 | $ 15,700 | ||||
Unrealized gain | $ 100 | $ 200 | $ 800 | $ 300 | |||
Convertible Promissory Note Purchase Agreement | Gate Neuroscience [Member] | |||||||
Equity Investment | |||||||
Convertible notes Face Value | $ 15,000 | ||||||
Debt Instrument, Interest Rate, Effective Percentage | 8% | ||||||
Note Amendment Agreement | Gate Neuroscience [Member] | |||||||
Equity Investment | |||||||
Convertible notes Face Value | $ 21,500 |
Equity and Long-term Investme_8
Equity and Long-term Investments and Fair Value Measurements - Equity Investment in Nanolive (Details) - Nanolive SFr in Millions, $ in Millions | Feb. 18, 2022 USD ($) shares | Feb. 18, 2022 CHF (SFr) shares | Sep. 30, 2023 USD ($) Director | Dec. 31, 2022 USD ($) |
Equity Investment | ||||
Transaction costs to acquire equity securities | $ | $ 0.7 | |||
Number of Investee's Board members currently representing the Company | Director | 1 | |||
Number of the Investee's Board members | Director | 7 | |||
Fair value of equity securities | $ | $ 10.6 | $ 10.6 | ||
Consolidated Investees [Member] | ||||
Equity Investment | ||||
Equity investment ownership percentage | 15.30% | 15.50% | ||
Series C preferred stock | ||||
Equity Investment | ||||
Number of shares to be purchased under the securities purchase agreement | shares | 18,750,000 | 18,750,000 | ||
Amount of securities purchase agreement | $ 9.8 | SFr 9 |
Equity and Long-term Investme_9
Equity and Long-term Investments and Fair Value Measurements - Available-for-Sale Securities (Details) - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 | ||
Available-for-Sale Securities | ||||
Amortized Cost | $ 134,287,000 | $ 263,469,000 | ||
Gross Unrealized Gains | 0 | 0 | ||
Gross Unrealized Losses | 0 | 0 | ||
Estimated Fair Value | 134,287,000 | 263,469,000 | ||
Credit loss | 0 | |||
Money market funds | ||||
Available-for-Sale Securities | ||||
Amortized Cost | 134,287,000 | [1] | 263,469,000 | [2] |
Gross Unrealized Gains | 0 | [1] | 0 | [2] |
Gross Unrealized Losses | 0 | [1] | 0 | [2] |
Estimated Fair Value | $ 134,287,000 | [1] | $ 263,469,000 | [2] |
[1] Money market funds are included in cash and cash equivalents in the condensed consolidated balance sheets Money market funds are included in cash and cash equivalents in the condensed consolidated balance sheets |
Equity and Long-term Investm_10
Equity and Long-term Investments and Fair Value Measurements - Schedule of Available-for-Sale Securities Measured at Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2023 | Dec. 31, 2022 | |||
Financial Instruments and Fair Value Measurements | ||||
Contingent value rights | $ 595 | $ 595 | ||
ISP Fund LP | ||||
Liabilities | ||||
Lock-up period | 36 months | 36 months | ||
Contributed to partnership for investing | $ 300,000 | $ 300,000 | ||
ISP Fund LP | Convertible Debt | ||||
Assets | ||||
Total assets measured at estimated fair value | 57,100 | |||
Money market funds | ISP Fund LP | ||||
Assets | ||||
Total assets measured at estimated fair value | 36,900 | 25,100 | ||
Equity investment | ISP Fund LP | ||||
Assets | ||||
Total assets measured at estimated fair value | 298,500 | 295,400 | ||
Private Placement Positions and Convertible Notes | ISP Fund LP | ||||
Assets | ||||
Total assets measured at estimated fair value | 54,600 | |||
Recurring basis | ||||
Assets | ||||
Total assets measured at estimated fair value | 580,874 | 639,488 | ||
Recurring basis | Money market funds | ||||
Assets | ||||
Total assets measured at estimated fair value | 134,287 | 263,469 | ||
Recurring basis | Equity investments and money market funds | ISP Fund LP | ||||
Assets | ||||
Total assets measured at estimated fair value | 241,388 | [1] | 320,560 | [2] |
Recurring basis | Term loan investment | ||||
Assets | ||||
Total assets measured at estimated fair value | 26,199 | |||
Recurring basis | Term loan investment | Armata Term Loan | ||||
Assets | ||||
Total assets measured at estimated fair value | 0 | |||
Recurring basis | Quoted Price in Active Markets for Identical Assets, Level 1 | ||||
Assets | ||||
Total assets measured at estimated fair value | 448,575 | 560,546 | ||
Recurring basis | Quoted Price in Active Markets for Identical Assets, Level 1 | Money market funds | ||||
Assets | ||||
Total assets measured at estimated fair value | 134,287 | 263,469 | ||
Recurring basis | Quoted Price in Active Markets for Identical Assets, Level 1 | Equity investments and money market funds | ISP Fund LP | ||||
Assets | ||||
Total assets measured at estimated fair value | 239,058 | [1] | 265,982 | [2] |
Recurring basis | Significant Other Observable Inputs, Level 2 | ||||
Assets | ||||
Total assets measured at estimated fair value | 31,810 | 8,059 | ||
Recurring basis | Significant Other Observable Inputs, Level 2 | Money market funds | ||||
Assets | ||||
Total assets measured at estimated fair value | 0 | 0 | ||
Recurring basis | Significant Other Observable Inputs, Level 2 | Equity investments and money market funds | ISP Fund LP | ||||
Assets | ||||
Total assets measured at estimated fair value | 0 | [1] | 0 | [2] |
Recurring basis | Significant Other Observable Inputs, Level 2 | Term loan investment | ||||
Assets | ||||
Total assets measured at estimated fair value | 0 | |||
Recurring basis | Significant Unobservable Inputs, Level 3 | ||||
Assets | ||||
Total assets measured at estimated fair value | 100,489 | 70,883 | ||
Recurring basis | Significant Unobservable Inputs, Level 3 | Money market funds | ||||
Assets | ||||
Total assets measured at estimated fair value | 0 | 0 | ||
Recurring basis | Significant Unobservable Inputs, Level 3 | Equity investments and money market funds | ISP Fund LP | ||||
Assets | ||||
Total assets measured at estimated fair value | 2,330 | [1] | 54,578 | [2] |
Recurring basis | Significant Unobservable Inputs, Level 3 | Term loan investment | ||||
Assets | ||||
Total assets measured at estimated fair value | 26,199 | |||
Nonrecurring basis | ||||
Financial Instruments and Fair Value Measurements | ||||
Contingent value rights | 595 | 595 | ||
Liabilities | ||||
Total liabilities measured at estimated fair value | 410,263 | 506,259 | ||
Nonrecurring basis | Debt | ||||
Financial Instruments and Fair Value Measurements | ||||
2023 Notes | 96,089 | |||
2025 Notes | 191,923 | 197,807 | ||
2028 Notes | 217,745 | 211,768 | ||
Total fair value of debt | 409,668 | 505,664 | ||
Nonrecurring basis | Quoted Price in Active Markets for Identical Assets, Level 1 | ||||
Financial Instruments and Fair Value Measurements | ||||
Contingent value rights | 0 | 0 | ||
Liabilities | ||||
Total liabilities measured at estimated fair value | 0 | 0 | ||
Nonrecurring basis | Quoted Price in Active Markets for Identical Assets, Level 1 | Debt | ||||
Financial Instruments and Fair Value Measurements | ||||
2023 Notes | 0 | |||
2025 Notes | 0 | 0 | ||
2028 Notes | 0 | 0 | ||
Total fair value of debt | 0 | 0 | ||
Nonrecurring basis | Significant Other Observable Inputs, Level 2 | ||||
Financial Instruments and Fair Value Measurements | ||||
Contingent value rights | 0 | 0 | ||
Liabilities | ||||
Total liabilities measured at estimated fair value | 409,668 | 505,664 | ||
Nonrecurring basis | Significant Other Observable Inputs, Level 2 | Debt | ||||
Financial Instruments and Fair Value Measurements | ||||
2023 Notes | 96,089 | |||
2025 Notes | 191,923 | 197,807 | ||
2028 Notes | 217,745 | 211,768 | ||
Total fair value of debt | 409,668 | 505,664 | ||
Nonrecurring basis | Significant Unobservable Inputs, Level 3 | ||||
Financial Instruments and Fair Value Measurements | ||||
Contingent value rights | 595 | 595 | ||
Liabilities | ||||
Total liabilities measured at estimated fair value | 595 | 595 | ||
Nonrecurring basis | Significant Unobservable Inputs, Level 3 | Debt | ||||
Financial Instruments and Fair Value Measurements | ||||
2023 Notes | 0 | |||
2025 Notes | 0 | 0 | ||
2028 Notes | 0 | 0 | ||
Total fair value of debt | 0 | 0 | ||
Armata | Recurring basis | Convertible Debt | ||||
Assets | ||||
Total assets measured at estimated fair value | 49,684 | |||
Armata | Recurring basis | Equity investment | Common stock | ||||
Assets | ||||
Total assets measured at estimated fair value | 75,230 | 31,095 | ||
Armata | Recurring basis | Equity investment | Warrants | ||||
Assets | ||||
Total assets measured at estimated fair value | 31,810 | 8,059 | ||
Armata | Recurring basis | Quoted Price in Active Markets for Identical Assets, Level 1 | Convertible Debt | ||||
Assets | ||||
Total assets measured at estimated fair value | 0 | |||
Armata | Recurring basis | Quoted Price in Active Markets for Identical Assets, Level 1 | Equity investment | Common stock | ||||
Assets | ||||
Total assets measured at estimated fair value | 75,230 | 31,095 | ||
Armata | Recurring basis | Quoted Price in Active Markets for Identical Assets, Level 1 | Equity investment | Warrants | ||||
Assets | ||||
Total assets measured at estimated fair value | 0 | 0 | ||
Armata | Recurring basis | Significant Other Observable Inputs, Level 2 | Convertible Debt | ||||
Assets | ||||
Total assets measured at estimated fair value | 0 | |||
Armata | Recurring basis | Significant Other Observable Inputs, Level 2 | Equity investment | Common stock | ||||
Assets | ||||
Total assets measured at estimated fair value | 0 | 0 | ||
Armata | Recurring basis | Significant Other Observable Inputs, Level 2 | Equity investment | Warrants | ||||
Assets | ||||
Total assets measured at estimated fair value | 31,810 | 8,059 | ||
Armata | Recurring basis | Significant Unobservable Inputs, Level 3 | Convertible Debt | ||||
Assets | ||||
Total assets measured at estimated fair value | 49,684 | |||
Armata | Recurring basis | Significant Unobservable Inputs, Level 3 | Equity investment | Common stock | ||||
Assets | ||||
Total assets measured at estimated fair value | 0 | 0 | ||
Armata | Recurring basis | Significant Unobservable Inputs, Level 3 | Equity investment | Warrants | ||||
Assets | ||||
Total assets measured at estimated fair value | 0 | 0 | ||
InCarda | Recurring basis | Equity investment | Warrants | ||||
Assets | ||||
Total assets measured at estimated fair value | 605 | |||
InCarda | Recurring basis | Quoted Price in Active Markets for Identical Assets, Level 1 | Equity investment | Warrants | ||||
Assets | ||||
Total assets measured at estimated fair value | 0 | |||
InCarda | Recurring basis | Significant Other Observable Inputs, Level 2 | Equity investment | Warrants | ||||
Assets | ||||
Total assets measured at estimated fair value | 0 | |||
InCarda | Recurring basis | Significant Unobservable Inputs, Level 3 | Equity investment | Warrants | ||||
Assets | ||||
Total assets measured at estimated fair value | 605 | |||
Gate Neuroscience [Member] | Recurring basis | Convertible Debt | ||||
Assets | ||||
Total assets measured at estimated fair value | 22,276 | 15,700 | ||
Gate Neuroscience [Member] | Recurring basis | Quoted Price in Active Markets for Identical Assets, Level 1 | Convertible Debt | ||||
Assets | ||||
Total assets measured at estimated fair value | 0 | 0 | ||
Gate Neuroscience [Member] | Recurring basis | Significant Other Observable Inputs, Level 2 | Convertible Debt | ||||
Assets | ||||
Total assets measured at estimated fair value | 0 | 0 | ||
Gate Neuroscience [Member] | Recurring basis | Significant Unobservable Inputs, Level 3 | Convertible Debt | ||||
Assets | ||||
Total assets measured at estimated fair value | $ 22,276 | $ 15,700 | ||
[1] The investments held by ISP Fund LP consisted of $ 298.5 million in equity investments, which included $ 36.9 million in money market funds, and $ 57.1 million receivable from the maturity of convertible notes. Our total capital contribution of $ 300 million is subject to a 36-month lock-up period from the date of such capital contributions. The investments held by ISP Fund LP consisted of $ 295.4 million equity investments, which included private placement positions and convertible notes of $ 54.6 million, and $ 25.1 million in money market funds. Our total capital contributions of $ 300 .0 million is subject to a 36-month lock-up period from the date of such capital contributions. |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets (Additional Information) (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 9 Months Ended | |||||
May 31, 2023 | Sep. 30, 2023 | Sep. 30, 2022 | Jun. 30, 2023 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | Aug. 22, 2022 | Feb. 17, 2022 | |
Goodwill [Line Items] | |||||||||
Goodwill | $ 17,905,000 | $ 17,905,000 | $ 26,713,000 | ||||||
Amortization expense | 6,511,000 | $ 1,511,000 | 15,274,000 | $ 1,511,000 | |||||
Goodwill, impairment losses | $ 0 | ||||||||
Collaboration agreement | |||||||||
Goodwill [Line Items] | |||||||||
Amortization expense | 6,500,000 | $ 1,500 | 15,300,000 | $ 1,500 | |||||
In-process research and development | |||||||||
Goodwill [Line Items] | |||||||||
Useful life of Remaining In Process Research and Development | $ 2,600,000 | ||||||||
In-process research and development | Collaboration agreement | |||||||||
Goodwill [Line Items] | |||||||||
Amortization expense | $ 68,700,000 | $ 0 | |||||||
La Jolla Pharmaceutical Company | |||||||||
Goodwill [Line Items] | |||||||||
Goodwill | $ 6,411,000 | ||||||||
Future amortization expense, remainder of 2023 | 6,500 | 6,500 | |||||||
Future amortization expense, 2024 | 25,800,000 | 25,800,000 | |||||||
Future amortization expense, 2025 | 25,800,000 | 25,800,000 | |||||||
Future amortization expense, 2026 | 25,800,000 | 25,800,000 | |||||||
Future amortization expense, 2027 | 25,800,000 | 25,800,000 | |||||||
Future amortization expense, thereafter | 124,500,000 | 124,500,000 | |||||||
Intangible assets pertain to product rights and developed technologies | 151,000,000 | 151,000,000 | $ 151,000,000 | ||||||
Entasis Therapeutics Holdings Inc | |||||||||
Goodwill [Line Items] | |||||||||
Goodwill | $ 11,493,000 | ||||||||
Intangible assets pertain to product rights and developed technologies | 106,700,000 | 106,700,000 | $ 106,700,000 | ||||||
Entasis Therapeutics Holdings Inc | Collaboration agreement | |||||||||
Goodwill [Line Items] | |||||||||
Intangible assets pertain to product rights and developed technologies | 35,400,000 | 35,400,000 | |||||||
Entasis Therapeutics Holdings Inc | In-process research and development | |||||||||
Goodwill [Line Items] | |||||||||
Intangible assets pertain to product rights and developed technologies | $ 71,300,000 | $ 71,300,000 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Summary of Accumulated Amortization of Recognized Intangible Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Finite-Lived Intangible Assets [Line Items] | ||
Marketed products, Useful Life | 10 years | |
Marketed products, gross carrying amount | $ 219,700 | $ 151,000 |
In-process research and development, gross carrying amount | 2,600 | 72,100 |
Collaboration agreement, gross carrying amount | 35,400 | 35,400 |
Total gross carrying amount | 257,700 | 258,500 |
Marketed products, Accumulated amortization | (19,586) | (5,581) |
In-process research and development, accumulated amortization | 0 | 0 |
Collaboration agreement, accumulated amortization | (1,269) | 0 |
Accumulated amortization | (20,855) | (5,581) |
Marketed products, net carrying amount | 200,114 | 145,419 |
In-process research and development, net carrying amount | 2,600 | 72,100 |
Collaboration agreement, net carrying amount | 34,131 | 35,400 |
Net carrying amount | $ 236,845 | $ 252,919 |
Maximum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Marketed products, Useful Life | 10 years | 10 years |
Minimum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Marketed products, Useful Life | 8 years | 8 years |
Balance Sheet Components - Sche
Balance Sheet Components - Schedule of Inventory (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 8,859 | $ 5,757 |
Work-in-progress | 13,231 | 25,052 |
Finished goods | 18,425 | 25,088 |
Total inventory | $ 40,515 | $ 55,897 |
Balance Sheet Components - Sc_2
Balance Sheet Components - Schedule of Other Accrued Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Balance Sheet Related Disclosures [Abstract] | ||
Accrued contract manufacturing expenses | $ 5,645 | $ 8,382 |
Accrued clinical expenses | 712 | 692 |
Accrued research expenses | 211 | 349 |
Accrued professional services | 9,796 | 3,977 |
Current portion of lease liabilities | 1,211 | 1,316 |
Current portion of deferred royalty obligation | 3,976 | 2,639 |
Accrued license fees and royalties | 730 | 943 |
Other | 2,418 | 2,909 |
Total other accrued liabilities | $ 24,699 | $ 21,207 |
Balance Sheet Components (Addit
Balance Sheet Components (Additional Information) (Details) - La Jolla Pharmaceutical Company - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Inventory [Line Items] | |||||
Net fair value adjustment of inventory from acquisition | $ 31 | $ 31 | $ 49.5 | ||
Amortization of fair value adjustments of Cost of products sold | $ 5.4 | $ 2.7 | $ 19.2 | $ 2.7 |
Balance Sheet Component - Sched
Balance Sheet Component - Schedule of Other Long-term Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Balance Sheet Related Disclosures [Abstract] | ||
Long-term portion of deferred royalty obligation | $ 66,142 | $ 67,947 |
Long-term portion of lease liabilities | 1,953 | 2,376 |
Contingent value rights liability | 595 | 595 |
Total other long-term liabilities | $ 68,690 | $ 70,918 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Stock-based compensation | ||||
Total stock-based compensation expense | $ 1,442 | $ 3,717 | $ 4,560 | $ 6,021 |
Selling, general and administrative | ||||
Stock-based compensation | ||||
Total stock-based compensation expense | 1,308 | 2,422 | 3,502 | 4,240 |
Research and development | ||||
Stock-based compensation | ||||
Total stock-based compensation expense | $ 134 | $ 1,295 | $ 1,058 | $ 1,781 |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of weighted-average assumptions used to calculate estimated value of stock options (Details) - Stock options - Innoviva [Member] - $ / shares | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2023 | Sep. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |||
Valuation Assumptions | |||||||
Risk-free interest rate | [1] | 0% | |||||
Volatility | [1] | 0% | |||||
Weighted-average estimated fair value of stock options granted | $ 0 | [1] | $ 0 | ||||
Weighted-average | |||||||
Valuation Assumptions | |||||||
Dividend yield | 0% | 0% | [1] | 0% | 0% | ||
Minimum | |||||||
Valuation Assumptions | |||||||
Risk-free interest rate | 4.13% | 3.50% | 1.60% | ||||
Expected term (in years) | 6 years 3 days | 5 years 1 month 28 days | 5 years 6 months | ||||
Volatility | 37.30% | 37.30% | 38.80% | ||||
Weighted-average estimated fair value of stock options granted | $ 5.66 | $ 5.22 | $ 6.98 | ||||
Maximum | |||||||
Valuation Assumptions | |||||||
Risk-free interest rate | 4.21% | 4.21% | 3.03% | ||||
Expected term (in years) | 6 years 2 months 19 days | 6 years 2 months 19 days | 6 years 1 month 9 days | ||||
Volatility | 37.80% | 38.50% | 40.50% | ||||
Weighted-average estimated fair value of stock options granted | $ 5.97 | $ 5.97 | $ 7.73 | ||||
[1] There were no options granted for the three months ended September 30, 2022. |
Stock-Based Compensation - Su_2
Stock-Based Compensation - Summary of weighted-average assumptions used to calculate estimated value of stock options (Parenthetical) (Details) - $ / shares | 3 Months Ended | ||
Sep. 30, 2022 | Mar. 31, 2022 | ||
Stock options | Innoviva [Member] | |||
Valuation Assumptions | |||
Weighted-average estimated fair value of stock options granted | $ 0 | [1] | $ 0 |
[1] There were no options granted for the three months ended September 30, 2022. |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - Common stock - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | 9 Months Ended | |
Oct. 26, 2023 | Sep. 30, 2023 | Oct. 31, 2022 | |
Amount of shares repurchased | $ 100 | ||
Stock repurchased and retired during period, shares | 5,051,730 | ||
Shares repurchased average price per share | $ 11.97 | ||
Stock repurchased and retired during period, value | $ 60.5 | ||
Subsequent Event | |||
Stock repurchased and retired during period, shares | 447,838 | ||
Shares repurchased average price per share | $ 13.07 | ||
Stock repurchased and retired during period, value | $ 5.9 |
Debt - Schedule of Debt (Detail
Debt - Schedule of Debt (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Debt | |||||
Total | $ 453,500 | $ 453,500 | $ 549,704 | ||
Less: Unamortized debt discount and issuance costs | (7,782) | (7,782) | (9,331) | ||
Total debt, net | 445,718 | 445,718 | 540,373 | ||
Less: Current portion of long-term debt, net | 0 | 0 | 96,193 | ||
Total long-term debt, net | 445,718 | $ 445,718 | 444,180 | ||
HealthCare Royalty Partners | |||||
Debt | |||||
Maximum potential royalty payout | 14% | ||||
Increase in maximum potential payout percent | 4% | ||||
Maximum aggregate royalty payments | $ 225,000 | ||||
Required payment for breach of agreement, payment one | 125,000 | ||||
Payment for royalty agreement | 17,000 | ||||
2023 Notes | Convertible subordinated notes | |||||
Debt | |||||
Total debt | 0 | 0 | 96,204 | ||
2025 Notes | Convertible senior notes | |||||
Debt | |||||
Total debt | 192,500 | 192,500 | 192,500 | ||
Less: Unamortized debt discount and issuance costs | (1,385) | (1,385) | (1,917) | ||
2028 Notes | Convertible senior notes | |||||
Debt | |||||
Total debt | 261,000 | 261,000 | 261,000 | ||
Less: Unamortized debt discount and issuance costs | (6,397) | (6,397) | (7,403) | ||
Royalty Financing Agreement | Loans Payable [Member] | HealthCare Royalty Partners | |||||
Debt | |||||
Interest expense | 1,200 | $ 1,500 | 3,700 | $ 1,500 | |
Deferred Royalty Obligations | 70,100 | 70,100 | 70,600 | ||
Royalty Payments | $ 4,300 | ||||
Interest Rate of Deferred Royalty Obligation | 7.40% | ||||
Royalty Financing Agreement | Loans Payable [Member] | HealthCare Royalty Partners | Other Long Term Liabilities | |||||
Debt | |||||
Royalty Obligation Payable | 66,100 | $ 66,100 | 67,900 | ||
Royalty Financing Agreement | Loans Payable [Member] | HealthCare Royalty Partners | Other Accrued Liabilities | |||||
Debt | |||||
Short term accrued interest | $ 4,000 | $ 4,000 | $ 2,700 |
Debt - Convertible Subordinated
Debt - Convertible Subordinated Notes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2023 | Sep. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | Jan. 31, 2013 | |
Debt | |||||||
Payment for repurchase of debt instrument | $ 96,204 | $ 165,131 | |||||
Accrued interest payable | $ 833 | 833 | $ 4,359 | ||||
Loss on extinguishment of debt | 0 | $ 0 | 0 | (20,662) | |||
Principal | 453,500 | 453,500 | 549,704 | ||||
Debt discount and issuance costs, net | (7,782) | (7,782) | (9,331) | ||||
2023 Notes | |||||||
Debt | |||||||
Loan amount | 96,200 | 96,200 | |||||
2023 Notes | Convertible subordinated notes | |||||||
Debt | |||||||
Loan amount | $ 287,500 | ||||||
Portion of debt retired, face value | $ 144,800 | ||||||
Payment for repurchase of debt instrument | $ 165,600 | ||||||
Principal | 0 | 0 | $ 96,204 | ||||
Interest expense | |||||||
Contractual interest expense | 0 | 511 | 85 | 2,106 | |||
Amortization of debt issuance costs | 0 | 59 | 11 | 240 | |||
Total interest and amortization expense | $ 0 | $ 570 | $ 96 | $ 2,346 |
Debt - Convertible Senior Notes
Debt - Convertible Senior Notes (Details) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | |||||||
Aug. 07, 2017 USD ($) $ / shares | Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Mar. 31, 2022 USD ($) $ / shares $ / Item | Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) | Aug. 01, 2017 $ / shares | Jan. 31, 2013 USD ($) | |
Debt | |||||||||
Payment for repurchase of debt instrument | $ 96,204 | $ 165,131 | |||||||
Debt discount and issuance costs, net | $ (7,782) | (7,782) | $ (9,331) | ||||||
2023 Notes | |||||||||
Debt | |||||||||
Loan amount | $ 96,200 | $ 96,200 | |||||||
2025 Notes | |||||||||
Debt | |||||||||
Common stock price to current conversion price ratio | 130% | ||||||||
Average trading price percentage | 98% | ||||||||
2025 Notes | Common stock | |||||||||
Debt | |||||||||
Share Price | $ / shares | $ 13.28 | ||||||||
2028 Notes | |||||||||
Debt | |||||||||
Debt instrument, covenant terms description | The indenture governing the 2028 Notes contains customary terms and covenants, including a merger covenant and that upon certain events of default occurring and continuing, either the Trustee or the holders of at least 25% of the aggregate principal amount of the outstanding Notes may declare 100% of the principal of, and accrued and unpaid interest, if any, on, all the Notes to be due and payable immediately. | ||||||||
Convertible senior notes | 2025 Notes | |||||||||
Debt | |||||||||
Ratio of repurchase price to the principal amount | 100% | ||||||||
Effective interest rate | 2.88% | 2.88% | |||||||
Principal | $ 192,500 | $ 192,500 | 192,500 | ||||||
Debt discount and issuance costs, net | (1,385) | (1,385) | (1,917) | ||||||
Net carrying amount | 191,115 | 191,115 | 190,583 | ||||||
Interest expense | |||||||||
Contractual interest expense | 1,203 | $ 1,203 | 3,609 | 3,609 | |||||
Amortization of debt issuance costs | 179 | 174 | 532 | 517 | |||||
Total interest and amortization expense | $ 1,382 | 1,377 | $ 4,141 | 4,126 | |||||
Convertible senior notes | 2025 Notes | Over-Allotment Option | |||||||||
Debt | |||||||||
Loan amount | $ 17,500 | ||||||||
Portion of debt instrument face amount, Exercised | 17,500 | ||||||||
Convertible senior notes | 2025 Notes | Private Placement | |||||||||
Debt | |||||||||
Loan amount | $ 192,500 | ||||||||
Debt Instrument, annual interest rate | 2.50% | ||||||||
Convertible senior notes | 2025 Notes | Common stock | |||||||||
Debt | |||||||||
Conversion rate for shares of common stock per $1,000 principal | 57.924 | ||||||||
Conversion price (dollars per share) | $ / shares | $ 17.26 | ||||||||
Debt instrument maturity date | Aug. 15, 2025 | ||||||||
Conversion premium (as a percent) | 30% | ||||||||
Convertible senior notes | 2028 Notes | |||||||||
Debt | |||||||||
Loan amount | $ 261,000 | ||||||||
Debt instrument maturity date | Mar. 15, 2028 | ||||||||
Proceeds from issuance of convertible notes, net of issuance costs | $ 252,600 | ||||||||
Common stock price to current conversion price ratio | 130% | ||||||||
Average trading price percentage | 98% | ||||||||
Ratio of repurchase price to the principal amount | 100% | ||||||||
Effective interest rate | 2.70% | 2.70% | |||||||
Principal | $ 261,000 | $ 261,000 | 261,000 | ||||||
Debt discount and issuance costs, net | (6,397) | (6,397) | (7,403) | ||||||
Net carrying amount | 254,603 | 254,603 | 253,597 | ||||||
Interest expense | |||||||||
Contractual interest expense | 1,387 | 1,371 | 4,160 | 3,127 | |||||
Amortization of debt issuance costs | 340 | 328 | 1,006 | 735 | |||||
Total interest and amortization expense | 1,727 | 1,699 | 5,166 | 3,862 | |||||
Convertible senior notes | 2028 Notes | Privately-negotiated capped call option | |||||||||
Debt | |||||||||
Cap price for the underlying number of shares (in dollars per share) | $ / Item | 33.985 | ||||||||
Purchases of capped calls in connection with convertible senior notes due 2028 | $ 21,000 | ||||||||
Convertible senior notes | 2028 Notes | Over-Allotment Option | |||||||||
Debt | |||||||||
Loan amount | 45,000 | ||||||||
Portion of debt instrument face amount, Exercised | $ 36,000 | ||||||||
Convertible senior notes | 2028 Notes | Private Placement | |||||||||
Debt | |||||||||
Debt Instrument, annual interest rate | 2.125% | ||||||||
Convertible senior notes | 2028 Notes | Common stock | |||||||||
Debt | |||||||||
Conversion rate for shares of common stock per $1,000 principal | 38.1432 | ||||||||
Conversion price (dollars per share) | $ / shares | $ 26.22 | ||||||||
Convertible subordinated notes | 2023 Notes | |||||||||
Debt | |||||||||
Loan amount | $ 287,500 | ||||||||
Debt Instrument, Repurchased Face Amount | $ 144,800 | ||||||||
Payment for repurchase of debt instrument | $ 165,600 | ||||||||
Principal | 0 | 0 | $ 96,204 | ||||||
Interest expense | |||||||||
Contractual interest expense | 0 | 511 | 85 | 2,106 | |||||
Amortization of debt issuance costs | 0 | 59 | 11 | 240 | |||||
Total interest and amortization expense | $ 0 | $ 570 | $ 96 | $ 2,346 |
Debt - Debt Maturities (Details
Debt - Debt Maturities (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Long-term debt maturities for years ending December 31: | ||
Remainder of 2023 | $ 0 | |
2024 | 0 | |
2025 | 192,500 | |
2026 | 0 | |
2027 | 0 | |
Thereafter | 261,000 | |
Total | $ 453,500 | $ 549,704 |
Commitments and Contingencies_2
Commitments and Contingencies (Additional Information) (Details) | Sep. 30, 2023 |
Lessee, Lease, Description [Line Items] | |
Operating lease, Weighted average remaining lease term | 2 years 6 months |
Weighted average discount rate | 7.50% |
Commitments and Contingencies -
Commitments and Contingencies - Schedule of Components of Lease Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Lease, Cost [Abstract] | ||||
Straight line operating lease costs | $ 361 | $ 640 | $ 1,080 | $ 1,101 |
Variable lease costs | 49 | 35 | 144 | 110 |
Total lease costs | $ 410 | $ 675 | $ 1,224 | $ 1,211 |
Commitments and Contingencies_3
Commitments and Contingencies - Schedule of Supplemental Cash Flow Information Related to Leases (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Cash paid for amounts included in the measurement of operating lease liabilities: | $ 1,157 | $ 540 |
Operating lease right-of-use assets obtained in exchange for operating lease obligations | 463 | 3,323 |
Right-of-use assets obtained through acquisitions | $ 0 | $ 1,185 |
Commitments and Contingencies_4
Commitments and Contingencies - Schedule of Future Minimum Lease Payments (Details) $ in Thousands | Sep. 30, 2023 USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Remainder of 2023 | $ 377 |
2024 | 1,373 |
2025 | 1,428 |
Thereafter | 291 |
Total undiscounted lease payments | 3,469 |
Less: imputed interest | (305) |
Total operating lease liabilities | $ 3,164 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | ||||
Income tax expense, net | $ 3,906 | $ 57,077 | $ 14,706 | $ 63,061 |
Effective tax rate (as a percent) | 10.60% | 18.30% |
Subsequent Events - Additional
Subsequent Events - Additional Information (Details) - USD ($) $ in Thousands | 9 Months Ended | |||||
Oct. 06, 2023 | Jul. 10, 2023 | Feb. 02, 2023 | Sep. 30, 2023 | Sep. 30, 2022 | Nov. 24, 2021 | |
Subsequent Event [Line Items] | ||||||
Proceeds from issuance of convertible senior notes due 2028, net of issuance costs | $ 0 | $ 252,536 | ||||
Additional cash investment | $ 1,218 | $ 13,725 | ||||
Armata | Credit and Security Agreement | ||||||
Subsequent Event [Line Items] | ||||||
Term loan facility in aggregate amount | $ 25,000 | |||||
Debt Instrument, annual interest rate | 14% | |||||
Debt instrument maturity date | Jan. 10, 2025 | |||||
Gate Neuroscience [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Additional cash investment | $ 5,000 | |||||
Gate Neuroscience [Member] | Convertible Promissory Note Purchase Agreement | ||||||
Subsequent Event [Line Items] | ||||||
Convertible notes Face Value | $ 15,000 | |||||
Gate Neuroscience [Member] | Note Amendment Agreement [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Convertible notes Face Value | $ 21,500 | |||||
Subsequent Event | Gate Neuroscience [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Additional cash investment | $ 5,000 | |||||
Subsequent Event | Gate Neuroscience [Member] | Convertible Promissory Note Purchase Agreement | ||||||
Subsequent Event [Line Items] | ||||||
Convertible notes Face Value | 21,500 | |||||
Subsequent Event | Gate Neuroscience [Member] | Note Amendment Agreement [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Convertible notes Face Value | $ 27,700 |