Innoviva (INVA) 10-Q24 Jul 192019 Q2 Quarterly reportFinancial data

Company Profile

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
Document and Entity Information - shares	Jun. 30, 2019	Jul. 17, 2019
Entity Registrant Name	INNOVIVA, INC.
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2019
Document Transition Report	false
Entity File Number	000-30319
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	94-3265960
Entity Address, Address Line One	2000 Sierra Point Parkway, Suite 500
Entity Address, City or Town	Brisbane
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	94005
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		101,279,669
Entity Central Index Key	0001080014
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q2
Amendment Flag	false

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018	[1]
Current assets:
Cash and cash equivalents	$ 141,952	$ 62,417
Short-term marketable securities	107,711	52,491
Related party receivables from collaborative arrangements	67,563	83,286
Prepaid expenses and other current assets	459	849
Total current assets	317,685	199,043
Property and equipment, net	136	160
Operating lease right-of-use asset	1,348	0
Capitalized fees paid to a related party, net	145,987	152,899
Deferred tax assets	177,114	196,054
Other assets	37	37
Total assets	642,307	548,193
Current liabilities:
Accounts payable	1,139	11
Accrued personnel-related expenses	371	470
Accrued interest payable	4,262	4,264
Other accrued liabilities	1,386	955
Operating lease liability, current portion	317	0
Total current liabilities	7,475	5,700
Long-term debt, net of discount and issuance costs	386,675	382,855
Operating lease liability, net of current portion	1,157	0
Other long-term liabilities	298	586
Commitments and contingencies
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, 101,272 and 101,098 issued and outstanding as of June 30, 2019 and December 31, 2018, respectively	1,013	1,011
Additional paid-in capital	1,257,799	1,256,267
Accumulated other comprehensive income (loss)	33	(3)
Accumulated deficit	(1,032,162)	(1,103,692)
Total Innoviva stockholders' equity	226,683	153,583
Noncontrolling interest	20,019	5,469
Total stockholders' equity	246,702	159,052
Total liabilities and stockholders' equity	$ 642,307	$ 548,193

[1]	Condensed consolidated balance sheet as of December 31, 2018 has been derived from audited consolidated financial statements.

CONDENSED CONSOLIDATED BALANC_2

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares shares in Thousands	Jun. 30, 2019	Dec. 31, 2018
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized	230	230
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	200,000
Common stock, shares issued	101,272	101,098
Common stock, shares outstanding	101,272	101,098

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Revenue:
Royalty revenue from a related party, net of amortization of capitalized fees paid to a related party of $3,456 in the three months ended June 30, 2019 and 2018, and $6,912 in the six months ended June 30, 2019 and 2018	$ 64,107	$ 67,086	$ 119,290	$ 119,466
Operating expenses:
General and administrative	4,347	4,411	7,362	13,396
General and administrative - related party	0	0	0	2,700
Total operating expenses	4,347	4,411	7,362	16,096
Income from operations	59,760	62,675	111,928	103,370
Other income (expense), net	(8)	39	(7)	(3,060)
Interest income	1,403	380	2,378	771
Interest expense	(4,661)	(6,478)	(9,278)	(14,135)
Income before income taxes	56,494	56,616	105,021	86,946
Income tax expense, net	10,433	0	18,941	0
Net income	46,061	56,616	86,080	86,946
Net income attributable to noncontrolling interest	8,321	1,990	14,550	2,739
Net income attributable to Innoviva stockholders	$ 37,740	$ 54,626	$ 71,530	$ 84,207
Basic net income per share attributable to Innoviva stockholders	$ 0.37	$ 0.54	$ 0.71	$ 0.84
Diluted net income per share attributable to Innoviva stockholders	$ 0.34	$ 0.49	$ 0.65	$ 0.77
Shares used to compute Innoviva basic and diluted net income per share:
Shares used to compute basic net income per share	101,151	100,873	101,105	100,739
Shares used to compute diluted net income per share	113,391	113,399	113,384	113,483

CONDENSED CONSOLIDATED STATEM_2

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Royalty revenue from a related party \| GSK
Amortization of capitalized fees paid to a related party	$ 3,456	$ 3,456	$ 6,912	$ 6,912

CONDENSED CONSOLIDATED STATEM_3

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Net income	$ 46,061	$ 56,616	$ 86,080	$ 86,946
Unrealized gain on marketable securities, net	23	12	36	8
Comprehensive income	46,084	56,628	86,116	86,954
Comprehensive income attributable to noncontrolling interest	8,321	1,990	14,550	2,739
Comprehensive income attributable to Innoviva stockholders	$ 37,763	$ 54,638	$ 71,566	$ 84,215

CONDENSED CONSOLIDATED STATEM_4

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) - USD ($) shares in Thousands, $ in Thousands	Common Stock	Additional Paid-In Capital	Accumulated Other Comprehensive Income (loss)	Accumulated Deficit	Treasury Stock	Noncontrolling Interest	Total
Balance at Dec. 31, 2017	$ 1,019	$ 1,258,151	$ (18)	$ (1,498,748)	$ (3,263)	$ 152	$ (242,707)
Balance (in shares) at Dec. 31, 2017	102,046				(150)
Increase (Decrease) in Stockholders' Equity
Distributions to noncontrolling interest	$ 0	0	0	0	$ 0	(90)	(90)
Exercise of stock options, and issuance of common stock units and stock awards, net of cancellation of stock awards and repurchase of shares to satisfy tax withholding	$ (5)	(2,492)	0	0	0	0	(2,497)
Exercise of stock options, and issuance of common stock units and stock awards, net of cancellation of stock awards and repurchase of shares to satisfy tax withholding (in shares)	(571)
Stock-based compensation	$ 0	2,169	0	0	0	0	2,169
Cash dividend forfeited	0	52	0	0	0	0	52
Net income	0	0	0	29,581	0	749	30,330
Other comprehensive income (loss)	0	0	(4)	0	0	0	(4)
Balance at Mar. 31, 2018	$ 1,014	1,257,880	(22)	(1,469,167)	$ (3,263)	811	(212,747)
Balance (in shares) at Mar. 31, 2018	101,475				(150)
Balance at Dec. 31, 2017	$ 1,019	1,258,151	(18)	(1,498,748)	$ (3,263)	152	(242,707)
Balance (in shares) at Dec. 31, 2017	102,046				(150)
Increase (Decrease) in Stockholders' Equity
Net income							86,946
Balance at Jun. 30, 2018	$ 1,015	1,259,443	(10)	(1,414,541)	$ (3,263)	1,992	(155,364)
Balance (in shares) at Jun. 30, 2018	101,657				(150)
Balance at Mar. 31, 2018	$ 1,014	1,257,880	(22)	(1,469,167)	$ (3,263)	811	(212,747)
Balance (in shares) at Mar. 31, 2018	101,475				(150)
Increase (Decrease) in Stockholders' Equity
Distributions to noncontrolling interest	$ 0	0	0	0	$ 0	(809)	(809)
Exercise of stock options, and issuance of common stock units and stock awards, net of cancellation of stock awards and repurchase of shares to satisfy tax withholding	$ 1	110	0	0	0	0	111
Exercise of stock options, and issuance of common stock units and stock awards, net of cancellation of stock awards and repurchase of shares to satisfy tax withholding (in shares)	182
Stock-based compensation	$ 0	1,452	0	0	0	0	1,452
Cash dividend forfeited	0	1	0	0	0	0	1
Net income	0	0	0	54,626	0	1,990	56,616
Other comprehensive income (loss)	0	0	12	0	0	0	12
Balance at Jun. 30, 2018	$ 1,015	1,259,443	(10)	(1,414,541)	$ (3,263)	1,992	(155,364)
Balance (in shares) at Jun. 30, 2018	101,657				(150)
Balance at Dec. 31, 2018	$ 1,011	1,256,267	(3)	(1,103,692)		5,469	$ 159,052	[1]
Balance (in shares) at Dec. 31, 2018	101,098						101,098
Increase (Decrease) in Stockholders' Equity
Exercise of stock options, and issuance of common stock units and stock awards, net of cancellation of stock awards and repurchase of shares to satisfy tax withholding	$ 1	253	0	0		0	$ 254
Exercise of stock options, and issuance of common stock units and stock awards, net of cancellation of stock awards and repurchase of shares to satisfy tax withholding (in shares)	85
Stock-based compensation	$ 0	605	0	0		0	605
Net income	0	0	0	33,790		6,229	40,019
Other comprehensive income (loss)	0	0	13	0		0	13
Balance at Mar. 31, 2019	$ 1,012	1,257,125	10	(1,069,902)		11,698	199,943
Balance (in shares) at Mar. 31, 2019	101,183
Balance at Dec. 31, 2018	$ 1,011	1,256,267	(3)	(1,103,692)		5,469	$ 159,052	[1]
Balance (in shares) at Dec. 31, 2018	101,098						101,098
Increase (Decrease) in Stockholders' Equity
Net income							$ 86,080
Balance at Jun. 30, 2019	$ 1,013	1,257,799	33	(1,032,162)		20,019	$ 246,702
Balance (in shares) at Jun. 30, 2019	101,272						101,272
Balance at Mar. 31, 2019	$ 1,012	1,257,125	10	(1,069,902)		11,698	$ 199,943
Balance (in shares) at Mar. 31, 2019	101,183
Increase (Decrease) in Stockholders' Equity
Exercise of stock options, and issuance of common stock units and stock awards, net of cancellation of stock awards and repurchase of shares to satisfy tax withholding	$ 1	200	0	0		0	201
Exercise of stock options, and issuance of common stock units and stock awards, net of cancellation of stock awards and repurchase of shares to satisfy tax withholding (in shares)	89
Stock-based compensation	$ 0	474	0	0		0	474
Net income	0	0	0	37,740		8,321	46,061
Other comprehensive income (loss)	0	0	23	0		0	23
Balance at Jun. 30, 2019	$ 1,013	$ 1,257,799	$ 33	$ (1,032,162)		$ 20,019	$ 246,702
Balance (in shares) at Jun. 30, 2019	101,272						101,272

[1]	Condensed consolidated balance sheet as of December 31, 2018 has been derived from audited consolidated financial statements.

CONDENSED CONSOLIDATED STATEM_5

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018
Cash flows from operating activities
Net income	$ 86,080	$ 86,946
Adjustments to reconcile net income to net cash provided by operating activities:
Deferred income taxes	18,940	0
Depreciation and amortization	7,080	6,936
Stock-based compensation	1,079	3,621
Amortization of debt discount and issuance costs	3,820	4,028
Amortization of discount on short-term investments	(1,124)	(160)
Amortization of lease guarantee	(162)	(162)
Loss on extinguishment of debt	0	3,137
Changes in operating assets and liabilities:
Receivables from collaborative arrangements	15,723	(2)
Prepaid expenses and other current assets	390	178
Accounts payable	1,128	(543)
Accrued personnel-related expenses and other accrued liabilities	343	(1,539)
Accrued interest payable	(2)	(805)
Operating lease liability	(144)
Other long-term liabilities	0	4
Net cash provided by operating activities	133,151	101,639
Cash flows from investing activities
Maturities of marketable securities	57,875	54,875
Purchases of marketable securities	(111,935)	(19,284)
Net cash provided by (used in) investing activities	(54,060)	35,591
Cash flows from financing activities
Repurchase of shares to satisfy tax withholding	(74)	(2,840)
Payments of principal on senior secured term loans	0	(120,000)
Payments of cash dividends to stockholders	(11)	(55)
Proceeds from issuances of common stock, net	529	454
Distributions to noncontrolling interest	0	(899)
Net cash provided by (used in) financing activities	444	(123,340)
Net increase in cash and cash equivalents	79,535	13,890
Cash and cash equivalents at beginning of period	62,417	73,336
Cash and cash equivalents at end of period	141,952	87,226
Supplemental disclosure of cash flow information
Cash paid for interest	$ 5,461	$ 10,913

Description of Operations and S

Description of Operations and Summary of Significant Accounting Policies	6 Months Ended
	Jun. 30, 2019
Description of Operations and Summary of Significant Accounting Policies	1. Description of Operations and Summary of Significant Accounting Policies Description of Operations Innoviva, Inc. (referred to as “Innoviva”, the “Company”, or “we” and other similar pronouns) is focused on royalty management. Innoviva’s portfolio includes the respiratory assets partnered with Glaxo Group Limited (“GSK”), including RELVAR ® ® ® ® ® ® ® 2 ® ® ® ® ® ® ® ® ® ® ® ® 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 (“US GAAP”) for interim financial information. Accordingly, they do not include all of the information and notes required by US GAAP for complete financial statements. In our opinion, the unaudited condensed consolidated financial statements have been prepared on the same basis as audited consolidated financial statements and include all adjustments, consisting of only 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, 2019 or any other period. 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, 2018 filed with the Securities and Exchange Commission (“SEC”) on February 19, 2019 (“2018 Form 10-K”). Variable Interest Entity We evaluate our ownership, contractual and other interest in entities to determine if they are variable interest entities (“VIE”), whether we have a variable interest in those entities and the nature and extent of those interests. Based on our evaluation, if we determine we are the primary beneficiary of a VIE, we consolidate the entity into our financial statements. We consolidate the financial results of TRC, which we have determined to be a VIE, because we have 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. As of June 30, 2019 and December 31, 2018, $9.8 million and $6.4 million, respectively, of the related party receivables from collaborative arrangements were attributable to TRC. The cash balance attributable to TRC as of June 30, 2019 was $13.8 million. Total revenue for TRC related to TRELEGY ® ELLIPTA ® was $9.8 million and $2.4 million for the three months ended June 30, 2019 and 2018, respectively, and $17.2 million and $3.3 million for the six months ended June 30, 2019 and 2018, respectively. Accounting Pronouncement Adopted by the Company In February 2016, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2016 02, Leases right to use the underlying asset for the lease term and lease liabilities representing the present value of the future lease payments for both financing and operating leases on its consolidated balance sheets. For a lease with a term of 12 months or less, the standard allows an entity to elect not to recognize a right-of-use asset and a lease liability and recognize the lease expense on a straight-line basis. We adopted the standard on the effective date of January 1, 2019 using the alternative transition approach. This approach is similar to a prospective transition, which requires the application of ASC 842 at the effective date with a cumulative-effect adjustment recognized through retained earnings. Under this approach, we do not present the adjusted comparative periods. Our pro-rata share of common area expenses are recorded as lease expense when incurred since they are variable and considered nonlease components under the standard. The most significant impact of the adoption to us is that we recognized a right of use asset in the amount of $1.5 million and lease liabilities in the total amount of $1.6 million at January 1, 2019 for the operating lease on our corporate headquarters. The adoption did not have a material impact on our retained earnings and consolidated statements of operations and cash flows. In August 2018, the U.S. Securities and Exchange Commission (the “SEC”) adopted the final rule under SEC Release No. 33-10532, Disclosure Update and Simplification

Net Income Per Share

Net Income Per Share	6 Months Ended
Net Income Per Share	Jun. 30, 2019
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”) using the if-converted method. Our convertible senior notes due 2025 (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. Our current intent is to settle the principal amount of the 2025 Notes in cash upon conversion. The impact of the assumed conversion premium to diluted net income per share is computed using the treasury stock method. As the average market price per share of our common stock as reported on The Nasdaq Global Select Market during the relevant periods was lower than the initial conversion price of $17.26 per share, there was no dilutive effect of the assumed conversion premium for the three and six months ended June 30, 2019 and 2018, respectively. The following table shows the computation of basic and diluted net income per share for the three and six months ended June 30, 2019 and 2018: Three Months Ended June 30, Six Months Ended June 30, (In thousands except per share data) 2019 2018 2019 2018 Numerator: Net income attributable to Innoviva stockholders, basic $ 37,740 $ 54,626 $ 71,530 $ 84,207 Add: interest expense on 2023 Notes 1,158 1,417 2,325 2,829 Net income attributable to Innoviva stockholders, diluted $ 38,898 $ 56,043 $ 73,855 $ 87,036 Denominator: Weighted-average shares used to compute basic net income per share attributable to Innoviva stockholders 101,151 100,873 101,105 100,739 Dilutive effect of 2023 Notes 12,189 12,189 12,189 12,189 Dilutive effect of options and awards granted under equity incentive plan and employee stock purchase plan 51 337 90 555 Weighted-average shares used to compute diluted net income per share attributable to Innoviva stockholders 113,391 113,399 113,384 113,483 Net income per share attributable to Innoviva stockholders Basic $ 0.37 $ 0.54 $ 0.71 $ 0.84 Diluted $ 0.34 $ 0.49 $ 0.65 $ 0.77 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: Three Months Ended June 30, Six Months Ended June 30, (In thousands) 2019 2018 2019 2018 Outstanding options and awards granted under equity incentive plan and employee stock purchase plan 1,188 1,633 1,120 1,562

Revenue Recognition and Collabo

Revenue Recognition and Collaborative Arrangements	6 Months Ended
Revenue Recognition and Collaborative Arrangements	Jun. 30, 2019
Revenue Recognition and Collaborative Arrangements	3. Revenue Recognition and Collaborative Arrangements 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 a 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 when (or as) a performance obligation is satisfied. We recognize the royalty revenue on licensee net sales of products with respect to which we have contractual royalty rights in the period in which the royalties are earned and reported to us. Royalties are recognized net of amortization of capitalized fees associated with any approval and launch milestone payments made to GSK. Net Revenue from Collaborative Arrangements Net revenue recognized under our GSK Agreements was as follows: Three Months Ended June 30, Six Months Ended June 30, (In thousands) 2019 2018 2019 2018 Royalties from a related party - RELVAR/BREO $ 47,086 $ 57,515 $ 89,826 $ 103,675 Royalties from a related party - ANORO 10,635 10,656 19,205 19,380 Royalties from a related party - TRELEGY 9,842 2,371 17,171 3,323 Total royalties from a related party 67,563 70,542 126,202 126,378 Less: amortization of capitalized fees paid to a related party (3,456) (3,456) (6,912) (6,912) Royalty revenue from GSK $ 64,107 $ 67,086 $ 119,290 $ 119,466

Available-for-Sale Securities a

Available-for-Sale Securities and Fair Value Measurements	6 Months Ended
Available-for-Sale Securities and Fair Value Measurements	Jun. 30, 2019
Available-for-Sale Securities and Fair Value Measurements	4. Available-for-Sale Securities and Fair Value Measurements 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: June 30, 2019 Gross Gross Unrealized Unrealized Estimated (In thousands) Amortized Cost Gains Losses Fair Value U.S. government securities $ 49,012 $ 25 $ — $ 49,037 U.S. government agencies 19,919 8 — 19,927 U.S. commercial paper 38,747 — — 38,747 Money market funds 120,581 — — 120,581 Total $ 228,259 $ 33 $ — $ 228,292 December 31, 2018 Gross Gross Unrealized Unrealized Estimated (In thousands) Amortized Cost Gains Losses Fair Value U.S. government securities $ 29,736 $ — $ (3) $ 29,733 U.S. government agencies 4,971 — — 4,971 U.S. corporate notes 2,875 — — 2,875 U.S. commercial paper 22,037 — — 22,037 Money market funds 49,358 — — 49,358 Total $ 108,977 $ — $ (3) $ 108,974 As of June 30, 2019, all of the available-for-sale securities had contractual maturities within one year and the weighted average maturity of marketable securities was approximately two months. Fair Value Measurements Our available-for-sale securities are measured at fair value on a recurring basis and our debt is carried at amortized cost basis. The estimated fair values were as follows: Estimated Fair Value Measurements as of June 30, 2019 Using: Quoted Price in Active Markets Significant Other Significant for Identical Observable Unobservable Types of Instruments Assets Inputs Inputs (In thousands) Level 1 Level 2 Level 3 Total Assets U.S. government securities $ — $ 49,037 $ — $ 49,037 U.S. government agencies — 19,927 — 19,927 U.S. commercial paper — 38,747 — 38,747 Money market funds 120,581 — — 120,581 Total assets measured at estimated fair value $ 120,581 $ 107,711 $ — $ 228,292 Debt Term B Loan $ — $ 13,750 $ — $ 13,750 2023 Notes — 252,754 — 252,754 2025 Notes — 208,181 — 208,181 Total fair value of debt $ — $ 474,685 $ — $ 474,685 Estimated Fair Value Measurements as of December 31, 2018 Using: Types of Instruments Quoted Price in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs (In thousands) Level 1 Level 2 Level 3 Total Assets U.S. government securities $ — $ 29,733 $ — $ 29,733 U.S. government agencies — 4,971 — 4,971 U.S. corporate notes — 2,875 — 2,875 U.S. commercial paper — 22,037 — 22,037 Money market funds 49,358 — — 49,358 Total assets measured at estimated fair value $ 49,358 $ 59,616 $ — $ 108,974 Debt Term B Loan $ — $ 13,750 $ — $ 13,750 2023 Notes — 258,918 — 258,918 2025 Notes — 230,692 — 230,692 Total fair value of debt $ — $ 503,360 $ — $ 503,360 The fair value of our marketable securities classified within Level 2 is 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 fair value of our 2023 Notes and of our 2025 Notes is based on recent trading prices of the instruments. The carrying amount of our initial senior secured term loan (the “Term B Loan”) before deducting debt issuance costs approximates fair value as the loan carries a variable interest rate that is tied to the LIBOR rate plus an applicable spread.

Stock-Based Compensation

Stock-Based Compensation	6 Months Ended
Stock-Based Compensation	Jun. 30, 2019
Stock-Based Compensation	5. Stock-Based Compensation Market-Based RSAs and RSUs 2016 Market-Based RSAs and RSUs On January 14, 2016, the Compensation Committee approved and granted 282,394 RSAs and 46,294 RSUs to senior management. These awards include a market condition based on Total Shareholder Return (“TSR”) and a service condition that requires continued employment. In February 2018, the Compensation Committee certified the maximum achievement of the TSR as of the first measurement date, January 12, 2018. RSAs totaling 69,440 and RSUs totaling 30,862 representing two-thirds of the amounts were released on February 20, 2018. In connection with the separation of certain members of senior management from the Company in early February 2018, the Board of Directors agreed to accelerate the vesting and distribution of an aggregate of 118,821 RSAs to these members of senior management. The remaining 59,411 RSAs for these members of senior management were forfeited. As a net result of the vesting acceleration of the RSAs and the forfeiture of those unvested RSAs, an additional $0.7 million compensation expense was recognized during the three months ended March 31, 2018. In August and September 2018, the remaining 34,722 RSAs and 15,432 RSUs were forfeited due to the additional separation of senior management members, and $0.2 million of previously recognized compensation expense was reversed. 2017 Market-Based RSAs and RSUs On January 17, 2017, the Compensation Committee approved and granted 353,508 RSAs and 53,360 RSUs to senior management. These awards include a market condition based on the TSR of Innoviva’s common stock as compared to the TSR of NASDAQ Biotechnology Index (“Index”) and a service condition that requires continued employment. In connection with the separation of certain members of senior management from the Company in February 2018, an aggregate of 233,448 RSAs were forfeited, and $0.8 million of previously recognized compensation expense was reversed during the three months ended June 30, 2018. In August and September 2018, the remaining 120,060 RSAs and 53,360 RSUs were forfeited due to the additional separation of senior management members, and $0.9 million of previously recognized compensation expense was reversed. 2018 Market-Based RSAs and RSUs On March 2, 2018, the Compensation Committee approved and granted 111,668 RSAs and 49,630 RSUs to senior management. These awards include a market condition based on the TSR of Innoviva’s common stock over a three-year performance period from the date of grant for the RSAs and from the date of grant until September 30, 2020 for RSUs, and a service condition that requires continued employment. The grant date fair value of these awards was determined using a Monte Carlo valuation model. The aggregate value of $1.7 million was to be recognized as compensation expense over the implied service period and would not be reversed if the market condition was not met, but with the exception of such person’s continued employment with the Company. In August and September 2018, all of 111,668 RSAs and 49,630 RSUs were forfeited, and $0.2 million of previously recognized compensation expense was reversed due to the separation of these senior management members. Stock-Based Compensation Expense Stock-based compensation expense is included in the condensed consolidated statements of operations as follows: Three Months Ended June 30, Six Months Ended June 30, (In thousands) 2019 2018 2019 2018 General and administrative $ 474 $ 1,452 $ 1,079 $ 3,621 As of June 30, 2019, unrecognized stock-based compensation cost was as follows: Unrecognized Compensation (In thousands) Cost RSUs $ 1,095 RSAs 1,192 Total unrecognized compensation cost $ 2,287

Debt

Debt	6 Months Ended
Debt	Jun. 30, 2019
Debt	6. Debt Our debt consists of: June 30, December 31, (In thousands) 2019 2018 Term B Loan $ 13,750 $ 13,750 2023 Notes 240,984 240,984 2025 Notes 192,500 192,500 Total debt 447,234 447,234 Unamortized debt discount and issuance costs (60,559) (64,379) Net long-term debt $ 386,675 $ 382,855 Prepayments of Senior Secured Term Loans On February 28 and August 1, 2018, we prepaid the principal balance of the Term B Loan by $120.0 million and $110.0 million, respectively. With the prepayments, we incurred a loss on the extinguishment of debt of $3.1 million and $2.6 million, respectively, representing unamortized debt issuance costs. The loss on the extinguishment of debt is presented as part of other expense, net in our consolidated statements of operations. As of June 30, 2019, the outstanding principal balance of the Term B Loan was $13.8 million. Convertible Senior Notes Due 2025 In accordance with accounting guidance for debt with conversion and other options, we separately account for the liability and equity components of the 2025 Notes by allocating the proceeds between the liability component and the embedded conversion option (“equity component”) due to our ability to settle the conversion obligation of the 2025 Notes in cash, common stock or a combination of cash and common stock, at our option. The carrying amount of the liability component was calculated by measuring the fair value of a similar liability that does not have an associated convertible feature using the income approach. The allocation was performed in a manner that reflected our non-convertible debt borrowing rate for similar debt. The equity component of the 2025 Notes was recognized as a debt discount and represents the difference between the proceeds from the issuance of the 2025 Notes and the fair value of the liability of the 2025 Notes on the date of issuance. The excess of the principal amount of the liability component over its carrying amount (“debt discount”) is amortized to interest expense using the effective interest method over the term of the 2025 Notes. The equity component is not remeasured as long as it continues to meet the conditions for equity classification. Our outstanding 2025 Notes balances consisted of the following: June 30, December 31, (In thousands) 2019 2018 Liability component Principal $ 192,500 $ 192,500 Debt discount and issuance costs, net (58,261) (61,766) Net carrying amount $ 134,239 $ 130,734 Equity component, net $ 65,361 $ 65,361 The following table sets forth total interest expense recognized related to the 2025 Notes for the three and six months ended June 30, 2019 and 2018: Three Months Ended June 30, Six Months Ended June 30, (In thousands) 2019 2018 2019 2018 Contractual interest expense $ 1,203 $ 1,203 $ 2,406 $ 2,393 Amortization of debt issuance costs 136 125 269 248 Amortization of debt discount 1,635 1,496 3,236 2,975 Total interest and amortization expense $ 2,974 $ 2,824 $ 5,911 $ 5,616 Debt Maturities The aggregate scheduled maturities of our long-term debt as of June 30, 2019, are as follows: (In thousands) Years ending December 31: 2019 to 2021 $ — 2022 13,750 2023 240,984 Thereafter 192,500 Total $ 447,234

Related Party Transaction

Related Party Transaction	6 Months Ended
Related Party Transaction	Jun. 30, 2019
Related Party Transaction	7. Related Party Transaction On February 12, 2018, the Company entered into an agreement with Sarissa Capital Management LP, and certain of its affiliates (collectively, the “Sarissa Group”) related to the Company’s 2018 Annual Meeting of Stockholders (the “2018 Annual Meeting”). The agreement provided for, among other things, the concurrent appointment of three designees of the Sarissa Group as members of the Company’s Board of Directors and an agreement to recommend and nominate a five-person slate of directors for election at the 2018 Annual Meeting composed of the three new directors and two current directors of the Company and partially reimburse the Sarissa Group $2.7 million for expenses, which reimbursement obligation relating to the 2018 Annual Meeting arose upon execution of the agreement. The Sarissa Group is considered to be a related party due to its representation on the Board of Directors.

Income Taxes

Income Taxes	6 Months Ended
Income Taxes	Jun. 30, 2019
Income Taxes	8. Income Taxes Provisional income tax expense for the three and six months ended June 30, 2019 was $10.4 million and $18.9 million, respectively, compared to minimal amounts for the same periods in 2018 as a full valuation allowance was maintained on the Company's gross deferred taxes. The difference between the Company’s effective income tax rate of 18% for the six months ended June 30, 2019 and the U.S. federal statutory rate of 21% is primarily attributable to state income tax, non-deductible expenses and noncontrolling interest.

Lease

Lease	6 Months Ended
Lease	Jun. 30, 2019
Lease	9. Lease We have an operating lease for our corporate headquarters with a remaining lease term of approximately four years. The lease includes a five-year renewal option at our sole discretion. The total operating lease expense for this lease was $0.1 million for the three months ended June 30, 2019 and 2018, respectively; and $0.2 million for the six months ended June 30, 2019 and 2018, respectively. Cash paid for amount included in the measurement of operating lease liabilities was $0.1 million and $0.2 million for the three and six months ended June 30, 2019, respectively. The lease liabilities were measured using a discount rate of 7.15% based on the most recent borrowing rate for our senior secured Term B Loan at the time of adoption of ASC 842 as discussed in Note 1. Future minimum lease payments on our corporate headquarters as of June 30, 2019 are as follows: (In thousands) Years ending December 31: Remainder of 2019 $ 204 2020 416 2021 428 2022 441 2023 201 Total future minimum lease payments 1,690 Imputed interest (216) Total $ 1,474 Reported as of June 30, 2019 Operating lease liability, current portion $ 317 Operating lease liability, net of current portion 1,157 Total $ 1,474

Subsequent Events

Subsequent Events	6 Months Ended
Subsequent Events	Jun. 30, 2019
Subsequent Events	10. Subsequent Events In May 2019, Theravance Biopharma, who is the owner of 85% of the economic interests in TRC, initiated arbitration against the Company and TRC, relating to a dispute as to the determination by Innoviva (as manager of TRC) to cause TRC to explore potential reinvestment opportunities for the royalty proceeds received by GSK into initiatives that Innoviva believes will increase the value of TRC and TRELEGY ® ® . Theravance Biopharma alleges that in causing TRC to not distribute substantially all royalty proceeds received from GSK, Innoviva breached the limited liability company operating agreement governing TRC (the “Operating Agreement”), as well as the fiduciary duties applicable to Innoviva as manager of TRC. The hearing in respect of the arbitration commenced on July 23, 2019 and is expected to last several days. While Innoviva believes that it has complied with all applicable duties and is not in breach of the Operating Agreement, Theravance Biopharma is alleging such breach and is seeking material damages and there is no certainty that the arbitrator will rule in favor of Innoviva.

Description of Operations and_2

Description of Operations and Summary of Significant Accounting Policies (Policies)	6 Months Ended
	Jun. 30, 2019
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 (“US GAAP”) for interim financial information. Accordingly, they do not include all of the information and notes required by US GAAP for complete financial statements. In our opinion, the unaudited condensed consolidated financial statements have been prepared on the same basis as audited consolidated financial statements and include all adjustments, consisting of only 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, 2019 or any other period. 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, 2018 filed with the Securities and Exchange Commission (“SEC”) on February 19, 2019 (“2018 Form 10-K”).
Variable Interest Entity	Variable Interest Entity We evaluate our ownership, contractual and other interest in entities to determine if they are variable interest entities (“VIE”), whether we have a variable interest in those entities and the nature and extent of those interests. Based on our evaluation, if we determine we are the primary beneficiary of a VIE, we consolidate the entity into our financial statements. We consolidate the financial results of TRC, which we have determined to be a VIE, because we have 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. As of June 30, 2019 and December 31, 2018, $9.8 million and $6.4 million, respectively, of the related party receivables from collaborative arrangements were attributable to TRC. The cash balance attributable to TRC as of June 30, 2019 was $13.8 million. Total revenue for TRC related to TRELEGY ® ELLIPTA ® was $9.8 million and $2.4 million for the three months ended June 30, 2019 and 2018, respectively, and $17.2 million and $3.3 million for the six months ended June 30, 2019 and 2018, respectively.
Accounting Pronouncement Adopted by the Company	Accounting Pronouncement Adopted by the Company In February 2016, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2016 02, Leases right to use the underlying asset for the lease term and lease liabilities representing the present value of the future lease payments for both financing and operating leases on its consolidated balance sheets. For a lease with a term of 12 months or less, the standard allows an entity to elect not to recognize a right-of-use asset and a lease liability and recognize the lease expense on a straight-line basis. We adopted the standard on the effective date of January 1, 2019 using the alternative transition approach. This approach is similar to a prospective transition, which requires the application of ASC 842 at the effective date with a cumulative-effect adjustment recognized through retained earnings. Under this approach, we do not present the adjusted comparative periods. Our pro-rata share of common area expenses are recorded as lease expense when incurred since they are variable and considered nonlease components under the standard. The most significant impact of the adoption to us is that we recognized a right of use asset in the amount of $1.5 million and lease liabilities in the total amount of $1.6 million at January 1, 2019 for the operating lease on our corporate headquarters. The adoption did not have a material impact on our retained earnings and consolidated statements of operations and cash flows. In August 2018, the U.S. Securities and Exchange Commission (the “SEC”) adopted the final rule under SEC Release No. 33-10532, Disclosure Update and Simplification

Net Income Per Share (Tables)

Net Income Per Share (Tables)	6 Months Ended
Net Income Per Share (Tables)	Jun. 30, 2019
Schedule of computation of basic and diluted net income per share	Three Months Ended June 30, Six Months Ended June 30, (In thousands except per share data) 2019 2018 2019 2018 Numerator: Net income attributable to Innoviva stockholders, basic $ 37,740 $ 54,626 $ 71,530 $ 84,207 Add: interest expense on 2023 Notes 1,158 1,417 2,325 2,829 Net income attributable to Innoviva stockholders, diluted $ 38,898 $ 56,043 $ 73,855 $ 87,036 Denominator: Weighted-average shares used to compute basic net income per share attributable to Innoviva stockholders 101,151 100,873 101,105 100,739 Dilutive effect of 2023 Notes 12,189 12,189 12,189 12,189 Dilutive effect of options and awards granted under equity incentive plan and employee stock purchase plan 51 337 90 555 Weighted-average shares used to compute diluted net income per share attributable to Innoviva stockholders 113,391 113,399 113,384 113,483 Net income per share attributable to Innoviva stockholders Basic $ 0.37 $ 0.54 $ 0.71 $ 0.84 Diluted $ 0.34 $ 0.49 $ 0.65 $ 0.77
Schedule of anti-dilutive securities	Three Months Ended June 30, Six Months Ended June 30, (In thousands) 2019 2018 2019 2018 Outstanding options and awards granted under equity incentive plan and employee stock purchase plan 1,188 1,633 1,120 1,562

Revenue Recognition and Colla_2

Revenue Recognition and Collaborative Arrangements (Tables)	6 Months Ended
Revenue Recognition and Collaborative Arrangements (Tables)	Jun. 30, 2019
Schedule of net revenue from collaborative arrangements	Three Months Ended June 30, Six Months Ended June 30, (In thousands) 2019 2018 2019 2018 Royalties from a related party - RELVAR/BREO $ 47,086 $ 57,515 $ 89,826 $ 103,675 Royalties from a related party - ANORO 10,635 10,656 19,205 19,380 Royalties from a related party - TRELEGY 9,842 2,371 17,171 3,323 Total royalties from a related party 67,563 70,542 126,202 126,378 Less: amortization of capitalized fees paid to a related party (3,456) (3,456) (6,912) (6,912) Royalty revenue from GSK $ 64,107 $ 67,086 $ 119,290 $ 119,466

Available-for-Sale Securities_2

Available-for-Sale Securities and Fair Value Measurements (Tables)	6 Months Ended
	Jun. 30, 2019
Schedule of amortized cost and estimated fair values for available-for-sale securities	June 30, 2019 Gross Gross Unrealized Unrealized Estimated (In thousands) Amortized Cost Gains Losses Fair Value U.S. government securities $ 49,012 $ 25 $ — $ 49,037 U.S. government agencies 19,919 8 — 19,927 U.S. commercial paper 38,747 — — 38,747 Money market funds 120,581 — — 120,581 Total $ 228,259 $ 33 $ — $ 228,292 December 31, 2018 Gross Gross Unrealized Unrealized Estimated (In thousands) Amortized Cost Gains Losses Fair Value U.S. government securities $ 29,736 $ — $ (3) $ 29,733 U.S. government agencies 4,971 — — 4,971 U.S. corporate notes 2,875 — — 2,875 U.S. commercial paper 22,037 — — 22,037 Money market funds 49,358 — — 49,358 Total $ 108,977 $ — $ (3) $ 108,974
Schedule of available-for-sale securities measured at fair value on a recurring basis	Estimated Fair Value Measurements as of June 30, 2019 Using: Quoted Price in Active Markets Significant Other Significant for Identical Observable Unobservable Types of Instruments Assets Inputs Inputs (In thousands) Level 1 Level 2 Level 3 Total Assets U.S. government securities $ — $ 49,037 $ — $ 49,037 U.S. government agencies — 19,927 — 19,927 U.S. commercial paper — 38,747 — 38,747 Money market funds 120,581 — — 120,581 Total assets measured at estimated fair value $ 120,581 $ 107,711 $ — $ 228,292 Debt Term B Loan $ — $ 13,750 $ — $ 13,750 2023 Notes — 252,754 — 252,754 2025 Notes — 208,181 — 208,181 Total fair value of debt $ — $ 474,685 $ — $ 474,685 Estimated Fair Value Measurements as of December 31, 2018 Using: Types of Instruments Quoted Price in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs (In thousands) Level 1 Level 2 Level 3 Total Assets U.S. government securities $ — $ 29,733 $ — $ 29,733 U.S. government agencies — 4,971 — 4,971 U.S. corporate notes — 2,875 — 2,875 U.S. commercial paper — 22,037 — 22,037 Money market funds 49,358 — — 49,358 Total assets measured at estimated fair value $ 49,358 $ 59,616 $ — $ 108,974 Debt Term B Loan $ — $ 13,750 $ — $ 13,750 2023 Notes — 258,918 — 258,918 2025 Notes — 230,692 — 230,692 Total fair value of debt $ — $ 503,360 $ — $ 503,360

Stock-Based Compensation (Table

Stock-Based Compensation (Tables)	6 Months Ended
Stock-Based Compensation (Tables)	Jun. 30, 2019
Schedule of stock-based compensation expense	Three Months Ended June 30, Six Months Ended June 30, (In thousands) 2019 2018 2019 2018 General and administrative $ 474 $ 1,452 $ 1,079 $ 3,621
Schedule of unrecognized stock-based compensation cost	As of June 30, 2019, unrecognized stock-based compensation cost was as follows: Unrecognized Compensation (In thousands) Cost RSUs $ 1,095 RSAs 1,192 Total unrecognized compensation cost $ 2,287

Debt (Tables)

Debt (Tables)	6 Months Ended
Debt (Tables)	Jun. 30, 2019
Debt
Schedule of debt	June 30, December 31, (In thousands) 2019 2018 Term B Loan $ 13,750 $ 13,750 2023 Notes 240,984 240,984 2025 Notes 192,500 192,500 Total debt 447,234 447,234 Unamortized debt discount and issuance costs (60,559) (64,379) Net long-term debt $ 386,675 $ 382,855
Aggregate scheduled maturities of long-term debt	The aggregate scheduled maturities of our long-term debt as of June 30, 2019, are as follows: (In thousands) Years ending December 31: 2019 to 2021 $ — 2022 13,750 2023 240,984 Thereafter 192,500 Total $ 447,234
2025 Notes
Debt
Summary of liability and equity components of convertible notes	Our outstanding 2025 Notes balances consisted of the following: June 30, December 31, (In thousands) 2019 2018 Liability component Principal $ 192,500 $ 192,500 Debt discount and issuance costs, net (58,261) (61,766) Net carrying amount $ 134,239 $ 130,734 Equity component, net $ 65,361 $ 65,361
Schedule of components of interest expense	Three Months Ended June 30, Six Months Ended June 30, (In thousands) 2019 2018 2019 2018 Contractual interest expense $ 1,203 $ 1,203 $ 2,406 $ 2,393 Amortization of debt issuance costs 136 125 269 248 Amortization of debt discount 1,635 1,496 3,236 2,975 Total interest and amortization expense $ 2,974 $ 2,824 $ 5,911 $ 5,616

Lease (Tables)

Lease (Tables)	6 Months Ended
Lease (Tables)	Jun. 30, 2019
Schedule of future minimum lease payments	Future minimum lease payments on our corporate headquarters as of June 30, 2019 are as follows: (In thousands) Years ending December 31: Remainder of 2019 $ 204 2020 416 2021 428 2022 441 2023 201 Total future minimum lease payments 1,690 Imputed interest (216) Total $ 1,474 Reported as of June 30, 2019 Operating lease liability, current portion $ 317 Operating lease liability, net of current portion 1,157 Total $ 1,474

Description of Operations and_3

Description of Operations and Summary of Significant Accounting Policies - Description of Operations and Variable Interest Entity (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018	Dec. 31, 2018
Description of Operations and Summary of Significant Accounting Policies
Cash balance	$ 141,952		$ 141,952		$ 62,417	[1]
Net revenue	64,107	$ 67,086	119,290	$ 119,466
GSK
Description of Operations and Summary of Significant Accounting Policies
Net revenue	64,107	67,086	$ 119,290	119,466
Long-Acting Beta2 Agonist (LABA) Collaboration \| GSK
Description of Operations and Summary of Significant Accounting Policies
Percentage of economic interest in any future payments made under the agreements			15.00%
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)			15.00%
Annual global sales level used to determine royalty rate			$ 3,000,000
Royalty rate for sales above first level of annual global net sales (as a percent)			5.00%
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)			10.00%
TRC
Description of Operations and Summary of Significant Accounting Policies
Cash balance	13,800		$ 13,800
TRC \| TRELEGY
Description of Operations and Summary of Significant Accounting Policies
Net revenue	9,800	$ 2,400	17,200	$ 3,300
TRC \| Collaborative arrangement
Description of Operations and Summary of Significant Accounting Policies
Related-party receivables	$ 9,800		$ 9,800		$ 6,400

[1]	Condensed consolidated balance sheet as of December 31, 2018 has been derived from audited consolidated financial statements.

Description of Operations and_4

Description of Operations and Summary of Significant Accounting Policies - Accounting Pronouncements (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Jan. 01, 2019	Dec. 31, 2018	[1]
Accounting Pronouncement Adopted by the Company
Operating lease right-of-use asset	$ 1,348		$ 0
Operating lease liability	$ 1,474
ASU 2016-02, Leases \| Adjustment
Accounting Pronouncement Adopted by the Company
Operating lease right-of-use asset		$ 1,500
Operating lease liability		$ 1,600

[1]	Condensed consolidated balance sheet as of December 31, 2018 has been derived from audited consolidated financial statements.

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		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Numerator:
Net income attributable to Innoviva stockholders, basic	$ 37,740	$ 54,626	$ 71,530	$ 84,207
Add: interest expense on 2023 Notes	1,158	1,417	2,325	2,829
Net income attributable to Innoviva stockholders, diluted	$ 38,898	$ 56,043	$ 73,855	$ 87,036
Denominator:
Weighted-average shares used to compute basic net income per share attributable to Innoviva stockholders	101,151	100,873	101,105	100,739
Dilutive effect of 2023 Notes	12,189	12,189	12,189	12,189
Dilutive effect of options and awards granted under equity incentive plan and employee stock purchase plan	51	337	90	555
Weighted-average shares used to compute diluted net income per share attributable to Innoviva stockholders	113,391	113,399	113,384	113,483
Net income per share attributable to Innoviva stockholders
Basic net income per share	$ 0.37	$ 0.54	$ 0.71	$ 0.84
Diluted net income per share	$ 0.34	$ 0.49	$ 0.65	$ 0.77
Convertible senior notes \| 2025 Notes
Net Income Per Share
Dilutive effect of the assumed conversion premium	0	0	0	0
Convertible senior notes \| 2025 Notes \| Common Stock
Net Income Per Share
Conversion price of convertible notes into common stock (in dollars per share)	$ 17.26		$ 17.26

Net Income Per Share - Anti-Dil

Net Income Per Share - Anti-Dilutive Securities (Details) - shares shares in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Equity incentive plans and ESPP
Anti-Dilutive Securities
Anti-dilutive securities (in shares)	1,188	1,633	1,120	1,562

Revenue Recognition and Colla_3

Revenue Recognition and Collaborative Arrangements (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Revenue Recognition and Collaborative Arrangements
Total net revenue from GSK	$ 64,107	$ 67,086	$ 119,290	$ 119,466
GSK
Revenue Recognition and Collaborative Arrangements
Total net revenue from GSK	64,107	67,086	119,290	119,466
GSK \| Royalty revenue from a related party
Revenue Recognition and Collaborative Arrangements
Royalties from a related party	67,563	70,542	126,202	126,378
Less: amortization of capitalized fees paid to a related party	(3,456)	(3,456)	(6,912)	(6,912)
GSK \| RELVAR/BREO
Revenue Recognition and Collaborative Arrangements
Royalties from a related party	47,086	57,515	89,826	103,675
GSK \| ANORO
Revenue Recognition and Collaborative Arrangements
Royalties from a related party	10,635	10,656	19,205	19,380
GSK \| TRELEGY
Revenue Recognition and Collaborative Arrangements
Royalties from a related party	$ 9,842	$ 2,371	$ 17,171	$ 3,323

Available-for-Sale Securities_3

Available-for-Sale Securities and Fair Value Measurements - Available-for-Sale Securities (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2019	Dec. 31, 2018
Available-for-Sale Securities
Amortized Cost	$ 228,259	$ 108,977
Gross Unrealized Gains	33	0
Gross Unrealized Losses	0	(3)
Estimated Fair Value	$ 228,292	108,974
Maturity period for marketable securities
Maximum contractual maturity	1 year
Weighted average maturity	2 months
U.S. government securities
Available-for-Sale Securities
Amortized Cost	$ 49,012	29,736
Gross Unrealized Gains	25	0
Gross Unrealized Losses	0	(3)
Estimated Fair Value	49,037	29,733
U.S. government agencies
Available-for-Sale Securities
Amortized Cost	19,919	4,971
Gross Unrealized Gains	8	0
Gross Unrealized Losses	0	0
Estimated Fair Value	19,927	4,971
U.S. corporate notes
Available-for-Sale Securities
Amortized Cost		2,875
Gross Unrealized Gains		0
Gross Unrealized Losses		0
Estimated Fair Value		2,875
U.S. commercial paper
Available-for-Sale Securities
Amortized Cost	38,747	22,037
Gross Unrealized Gains	0	0
Gross Unrealized Losses	0	0
Estimated Fair Value	38,747	22,037
Money market funds
Available-for-Sale Securities
Amortized Cost	120,581	49,358
Gross Unrealized Gains	0	0
Gross Unrealized Losses	0	0
Estimated Fair Value	$ 120,581	$ 49,358

Available-for-Sale Securities_4

Available-for-Sale Securities and Fair Value Measurements - Fair Value Measurements (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Recurring basis
Assets
Total assets measured at estimated fair value	$ 228,292	$ 108,974
Recurring basis \| U.S. government securities
Assets
Total assets measured at estimated fair value	49,037	29,733
Recurring basis \| U.S. government agencies
Assets
Total assets measured at estimated fair value	19,927	4,971
Recurring basis \| U.S. corporate notes
Assets
Total assets measured at estimated fair value		2,875
Recurring basis \| U.S. commercial paper
Assets
Total assets measured at estimated fair value	38,747	22,037
Recurring basis \| Money market funds
Assets
Total assets measured at estimated fair value	120,581	49,358
Recurring basis \| Quoted Price in Active Markets for Identical Assets, Level 1
Assets
Total assets measured at estimated fair value	120,581	49,358
Recurring basis \| Quoted Price in Active Markets for Identical Assets, Level 1 \| U.S. government securities
Assets
Total assets measured at estimated fair value	0	0
Recurring basis \| Quoted Price in Active Markets for Identical Assets, Level 1 \| U.S. government agencies
Assets
Total assets measured at estimated fair value	0	0
Recurring basis \| Quoted Price in Active Markets for Identical Assets, Level 1 \| U.S. corporate notes
Assets
Total assets measured at estimated fair value		0
Recurring basis \| Quoted Price in Active Markets for Identical Assets, Level 1 \| U.S. commercial paper
Assets
Total assets measured at estimated fair value	0	0
Recurring basis \| Quoted Price in Active Markets for Identical Assets, Level 1 \| Money market funds
Assets
Total assets measured at estimated fair value	120,581	49,358
Recurring basis \| Significant Other Observable Inputs, Level 2
Assets
Total assets measured at estimated fair value	107,711	59,616
Recurring basis \| Significant Other Observable Inputs, Level 2 \| U.S. government securities
Assets
Total assets measured at estimated fair value	49,037	29,733
Recurring basis \| Significant Other Observable Inputs, Level 2 \| U.S. government agencies
Assets
Total assets measured at estimated fair value	19,927	4,971
Recurring basis \| Significant Other Observable Inputs, Level 2 \| U.S. corporate notes
Assets
Total assets measured at estimated fair value		2,875
Recurring basis \| Significant Other Observable Inputs, Level 2 \| U.S. commercial paper
Assets
Total assets measured at estimated fair value	38,747	22,037
Recurring basis \| Significant Other Observable Inputs, Level 2 \| Money market funds
Assets
Total assets measured at estimated fair value	0	0
Recurring basis \| Significant Unobservable Inputs, Level 3
Assets
Total assets measured at estimated fair value	0	0
Recurring basis \| Significant Unobservable Inputs, Level 3 \| U.S. government securities
Assets
Total assets measured at estimated fair value	0	0
Recurring basis \| Significant Unobservable Inputs, Level 3 \| U.S. government agencies
Assets
Total assets measured at estimated fair value	0	0
Recurring basis \| Significant Unobservable Inputs, Level 3 \| U.S. corporate notes
Assets
Total assets measured at estimated fair value		0
Recurring basis \| Significant Unobservable Inputs, Level 3 \| U.S. commercial paper
Assets
Total assets measured at estimated fair value	0	0
Recurring basis \| Significant Unobservable Inputs, Level 3 \| Money market funds
Assets
Total assets measured at estimated fair value	0	0
Nonrecurring basis \| Debt
Debt
Term B Loan	13,750	13,750
2023 Notes	252,754	258,918
2025 Notes	208,181	230,692
Total fair value of liabilities	474,685	503,360
Nonrecurring basis \| Quoted Price in Active Markets for Identical Assets, Level 1 \| Debt
Debt
Term B Loan	0	0
2023 Notes	0	0
2025 Notes	0	0
Total fair value of liabilities	0	0
Nonrecurring basis \| Significant Other Observable Inputs, Level 2 \| Debt
Debt
Term B Loan	13,750	13,750
2023 Notes	252,754	258,918
2025 Notes	208,181	230,692
Total fair value of liabilities	474,685	503,360
Nonrecurring basis \| Significant Unobservable Inputs, Level 3 \| Debt
Debt
Term B Loan	0	0
2023 Notes	0	0
2025 Notes	0	0
Total fair value of liabilities	$ 0	$ 0

Stock-Based Compensation - 2016

Stock-Based Compensation - 2016 Market-Based RSAs and RSUs (Details) - 2016 Market-Based RSAs and RSUs - USD ($) $ in Millions	Jan. 14, 2016	Feb. 28, 2018	Sep. 30, 2018	Mar. 31, 2018
Market-Based RSAs and RSUs
Stock-based compensation
Reversal of previously recognized compensation expense			$ 0.2
Market-Based RSAs and RSUs \| Released on February 20, 2018
Stock-based compensation
Vesting percentage		66.70%
Market-Based RSAs
Stock-based compensation
Forfeited (in shares)			34,722
Market-Based RSAs \| Released on February 20, 2018
Stock-based compensation
Exercised (in shares)		69,440
Market-Based RSAs \| Senior Management
Stock-based compensation
Granted (in shares)	282,394
Vested (in shares)		118,821
Stock-based compensation, net				$ 0.7
Forfeited (in shares)		59,411
Market-Based RSUs
Stock-based compensation
Forfeited (in shares)			15,432
Market-Based RSUs \| Released on February 20, 2018
Stock-based compensation
Exercised (in shares)		30,862
Market-Based RSUs \| Senior Management
Stock-based compensation
Granted (in shares)	46,294

Stock-Based Compensation - 2017

Stock-Based Compensation - 2017 Market-Based RSAs and RSUs (Details) - 2017 Market-Based RSAs and RSUs - USD ($) $ in Millions	Jan. 17, 2017	Sep. 30, 2018	Jun. 30, 2018
Market-Based RSAs and RSUs
Stock-based compensation
Reversal of previously recognized compensation expense		$ 0.9
Market-Based RSAs
Stock-based compensation
Forfeited (in shares)		120,060
Market-Based RSAs \| Senior Management
Stock-based compensation
Granted (in shares)	353,508
Forfeited (in shares)			233,448
Reversal of previously recognized compensation expense			$ 0.8
Market-Based RSUs
Stock-based compensation
Forfeited (in shares)		53,360
Market-Based RSUs \| Senior Management
Stock-based compensation
Granted (in shares)	53,360

Stock-Based Compensation - 2018

Stock-Based Compensation - 2018 Market-Based RSAs and RSUs (Details) - 2018 Market-Based RSAs and RSUs - USD ($) $ in Millions	Mar. 02, 2018	Sep. 30, 2018
Market-Based RSAs and RSUs
Stock-based compensation
Reversal of previously recognized compensation expense		$ 0.2
Market-Based RSAs and RSUs \| Senior Management
Stock-based compensation
Timeframe for calculation of TSR	3 years
Aggregate value to be recognized as compensation expense	$ 1.7
Market-Based RSAs
Stock-based compensation
Forfeited (in shares)		111,668
Market-Based RSAs \| Senior Management
Stock-based compensation
Granted (in shares)	111,668
Market-Based RSUs
Stock-based compensation
Forfeited (in shares)		49,630
Market-Based RSUs \| Senior Management
Stock-based compensation
Granted (in shares)	49,630

Stock-Based Compensation - Stoc

Stock-Based Compensation - Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Stock-based compensation
Unrecognized compensation cost	$ 2,287		$ 2,287
RSUs
Stock-based compensation
Unrecognized compensation cost	1,095		1,095
RSAs
Stock-based compensation
Unrecognized compensation cost	1,192		1,192
General and administrative
Stock-based compensation
Total stock-based compensation expense	$ 474	$ 1,452	$ 1,079	$ 3,621

Debt - Summary (Details)

Debt - Summary (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Debt
Total debt	$ 447,234	$ 447,234
Unamortized debt discount and issuance costs	(60,559)	(64,379)
Net long-term debt	386,675	382,855	[1]
Term B Loan \| Senior secured term loans
Debt
Total debt	13,750	13,750
2023 Notes \| Convertible subordinated notes
Debt
Total debt	240,984	240,984
2025 Notes \| Convertible senior notes
Debt
Total debt	192,500	192,500
Unamortized debt discount and issuance costs	$ (58,261)	$ (61,766)

[1]	Condensed consolidated balance sheet as of December 31, 2018 has been derived from audited consolidated financial statements.

Debt - Prepayments of Senior Se

Debt - Prepayments of Senior Secured Term Loans (Details) - USD ($) $ in Thousands	Aug. 01, 2018	Feb. 28, 2018	Jun. 30, 2019	Dec. 31, 2018
Debt
Total debt			$ 447,234	$ 447,234
Senior secured term loans \| Term B Loan
Debt
Prepayments of principal on senior secured term loans	$ 110,000	$ 120,000
Total debt			$ 13,750	$ 13,750
Senior secured term loans \| Term B Loan \| Other Expense
Debt
Write-off of debt issuance costs	$ 2,600	$ 3,100

Debt - Convertible Senior Notes

Debt - Convertible Senior Notes - Liability and Equity Components (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Liability component
Outstanding principal balance	$ 447,234	$ 447,234
Debt discount and issuance costs, net	(60,559)	(64,379)
Convertible senior notes \| 2025 Notes
Liability component
Outstanding principal balance	192,500	192,500
Debt discount and issuance costs, net	(58,261)	(61,766)
Net carrying amount	134,239	130,734
Equity component, net	$ 65,361	$ 65,361

Debt - Convertible Senior Not_2

Debt - Convertible Senior Notes - Interest and Amortization Expense (Details) - Convertible senior notes - 2025 Notes - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Interest expense
Contractual interest expense	$ 1,203	$ 1,203	$ 2,406	$ 2,393
Amortization of debt issuance costs	136	125	269	248
Amortization of debt discount	1,635	1,496	3,236	2,975
Total interest and amortization expense	$ 2,974	$ 2,824	$ 5,911	$ 5,616

Debt - Debt Maturities (Details

Debt - Debt Maturities (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Long-term debt maturities
2019-2021	$ 0
2022	13,750
2023	240,984
Thereafter	192,500
Total	$ 447,234	$ 447,234

Related Party Transaction (Deta

Related Party Transaction (Details) - Sarissa Group $ in Millions	Feb. 12, 2018USD ($)director
Related Parties
Appointment of designees as as members of the Company's Board of Directors	3
Total number of directors nominated for election	5
Number of new directors nominated for election	3
Number of current directors nominated for election	2
Payments for agreements with related parties \| $	$ 2.7

Income Taxes (Details)

Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
Income Taxes (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Income tax expense, net	$ 10,433	$ 0	$ 18,941	$ 0
Effective tax rate (as a percent)			18.00%
Federal statutory tax rate (as a percent)			21.00%

Lease (Details)

Lease (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
Lease (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018	Dec. 31, 2018	[1]
Lease
Operating lease, remaining lease term	4 years		4 years
Operating lease, renewal term	5 years		5 years
Operating lease, existence of option to extend			true
Operating lease expense	$ 100	$ 100	$ 200	$ 200
Cash paid for amount included in the measurement of operating lease liabilities	$ 100		$ 200
Discount rate used to measure lease liability	7.15%		7.15%
Future minimum lease payments
Remainder of 2019	$ 204		$ 204
2020	416		416
2021	428		428
2022	441		441
2023	201		201
Total future minimum lease payments	1,690		1,690
Imputed interest	(216)		(216)
Total	1,474		1,474
Operating lease liability, current portion	317		317		$ 0
Operating lease liability, net of current portion	$ 1,157		$ 1,157		$ 0

[1]	Condensed consolidated balance sheet as of December 31, 2018 has been derived from audited consolidated financial statements.

Subsequent Events (Details)

Subsequent Events (Details)	Jun. 30, 2019
Theravance Biopharma \| TRC
Subsequent Events
Ownership percentage	85.00%