Innoviva Company 2025 Quarterly Report

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reportingcompany, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and TABLE OF CONTENTS PART I. FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) Condensed Consolidated Balance Sheets as of March 31, 2025 and December 31, 20243Condensed Consolidated Statements of Income and Comprehensive Income for the Three Months Ended March 31, 2025and 20244Condensed Consolidated Statements of Stockholders’ Equity for the Three Months Ended March 31, 2025 and 20245Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2025 and 20246Notes to Condensed Consolidated Financial Statements7 Item 3. Quantitative and Qualitative Disclosures About Market Risk Item 2. Unregistered Sales of Equity Securities and Use of Proceeds Item 3. Defaults Upon Senior Securities INNOVIVA, INC.NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 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 portfoliocontains respiratory assets partnered with Glaxo Group Limited (“GSK”), including RELVAR®/BREO®ELLIPTA®(fluticasonefuroate/vilanterol, “FF/VI”) and ANORO®ELLIPTA®(umeclidinium bromide/ vilanterol, “UMEC/VI”). Under the Long-Acting Beta2 Agonist (“LABA”) Collaboration Agreement, Innoviva is entitled to receive royalties from GSK on sales ofRELVAR® adults with septic or other distributive shock; XERAVA®(eravacycline), approved for the treatment of complicated intra-abdominal infections in adults; and XACDURO®(sulbactam for injection; durlobactam for injection), approved for the treatment of an advanced-generation cephalosporin antibiotic, will be exclusively commercialized by us in the U.S. under a distribution andlicense agreement with Basilea Pharmaceutica Ltd., (“Basilea”), which we entered into in December 2024. We continue to advanceour pipeline, zoliflodacin, potentially a first in class, single-dose oral treatment for uncomplicated gonorrhea. We have established a wholly owned, critical care and infectious disease operating platform, anchored by four differentiated commercial products andsupported by a promising late-stage development asset.Additionally, we strategically deploy capital and maintain economic interests in various healthcare companies, including a significant equity stake in Armata Pharmaceuticals, a company focused on development of bacteriophages with potential use across Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance withaccounting 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. Theunaudited condensed consolidated financial statements have been prepared on the same basis as audited consolidated financial 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 intercompanybalances and transactions have been eliminated in consolidation. The accompanying unaudited condensed consolidated financialstatements should be read in conjunction with the audited consolidated financial statements and notes thereto included in ourAnnual Report on Form 10-K for the year ended December 31, 2024 filed with the Securities and Exchange Commission (“SEC”) Use of Management’s Estimates The preparation of unaudited condensed consolidated financial statements in conformity with U.S. GAAP requiresmanagement to make estimates and assumptions that affect the amounts reported in the unaudited condensed consolidated financialstatements and accompanying notes. Actual results could differ materially from those estimates. Management evaluates itssignificant accounting policies and estimates on an ongoing basis. We base our estimates on historical experience and other 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 equivalentsand equity and long-term investments. Although we deposit our cash with multiple financial institutions, our deposits, at times, We are dependent on third-party manufacturers to supply active pharmaceutical ingredients (“API”) and drug products forresearch and development and commercial programs. These progra