What changed in this filing

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Item 5. Market for Registrant’s Common Equity

2022-02-28 compared with 2021-02-25 · 238 added, 7 removed, 14 unchanged (95% of the section changed)

MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Market Information

Our common stock was traded on Nasdaq under the symbol “THRX” from October 5, 2004 until January 8, 2016.

Our common stock was traded on Nasdaq under the symbol “THRX”

from October 5, 2004 until January 8, 2016.

Upon changing our corporate name to Innoviva, Inc.

on January 7, 2016, we changed the stock ticker symbol to “INVA” effective January 11, 2016.

on January 7, 2016, we changed the stock ticker symbol to “INVA”

effective January 11, 2016.

As of February 14, 2022, there were 65 stockholders of record of our common stock.

1 unchanged sentence

Purchases of Equity Securities by the Issuer

There were no purchases made by the Company of its own equity securities for the year ended December 31, 2020.

In May 2021, the Company repurchased 32,005,260 shares of its common stock from GSK at $12.25 per share for a total amount (including related transaction fees) of $394.1 million.

The repurchased shares represented all of GSK's equity stake in the Company, which was approximately 32% of the Company.

Stock Performance Graph

4 unchanged sentences

Information used in the graph was obtained from sources believed to be reliable including Nasdaq, Bloomberg and Reuters, but we are not responsible for any errors or omissions in such information.

Notwithstanding anything to the contrary set forth in any of our previous or future filings under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, that might incorporate this Annual Report on Form 10-K or future filings made by us under those statutes, this Stock Performance Graph section shall not be deemed filed with the SEC and shall not be deemed incorporated by reference into any of those prior filings or into any future filings made by us under those statutes.

Notwithstanding anything to the contrary set forth in any of our previous or future filings under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, that might incorporate this Annual Report on Form 10‑K or future filings made by us under those statutes, this Stock Performance Graph section shall not be deemed filed with the SEC and shall not be deemed incorporated by reference into any of those prior filings or into any future filings made by us under those statutes.

COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*

1 unchanged sentence

* $100 invested on December 31, 2016 in stock or index, including reinvestment of dividends.

SELECTED FINANCIAL DATA

We have early adopted the amendment to Regulation S-K Item 301 issued by the SEC effective February 10, 2021, eliminating the requirements to provide selected financial data and supplementary financial data.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Management’s Discussion and Analysis (“MD&A”) is intended to facilitate an understanding of our business and results of operations.

This discussion and analysis should be read in conjunction with our consolidated financial statements and notes included in this Annual Report on Form 10‑K.

The information contained in this discussion and analysis or set forth elsewhere in this Annual Report on Form 10‑K, including information with respect to our plans and strategy for our business, our operating expenses, and future payments under our collaboration agreements, includes forward‑looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.

Such statements are based upon current expectations that involve risks and uncertainties.

You should review the section entitled “Risk Factors”

in Item 1A of Part I above for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward‑looking statements contained in the following discussion and analysis.

See the section entitled “Special Note Regarding Forward Looking Statements”

above for more information.

Management Overview

Innoviva, Inc.

(“Innoviva”, the “Company”, the “Registrant”

or “we”

and other similar pronouns) is a company with a portfolio of royalties and other healthcare assets.

Our royalty portfolio contains respiratory assets partnered with Glaxo Group Limited (“GSK”), including RELVAR ® /BREO ® ELLIPTA ® (fluticasone furoate/ vilanterol, “FF/VI”), ANORO ® ELLIPTA ® (umeclidinium bromide/ vilanterol, “UMEC/VI”) and TRELEGY ® ELLIPTA ® (the combination FF/UMEC/VI).

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%.

Innoviva is also entitled to 15% of royalty payments made by GSK under its agreements originally entered into with us, and since assigned to Theravance Respiratory Company, LLC (“TRC”), including TRELEGY ® ELLIPTA ® and any other product or combination of products that may be discovered or developed in the future under the LABA Collaboration Agreement and the Strategic Alliance Agreement with GSK (referred to herein as the “GSK Agreements”), which have been assigned to TRC other than RELVAR ® /BREO ® ELLIPTA ® and ANORO ® ELLIPTA ® .

Our company structure and organization are tailored to our focused activities of managing our respiratory assets partnered with GSK, including the commercial and developmental obligations associated with the GSK Agreements, optimizing capital allocation, and providing for certain essential reporting and management functions of a public company.

As of December 31, 2021, we had five employees.

Our revenues consist of royalties from our respiratory partnership agreements with GSK.

Financial Highlights

In the year ended December 31, 2021, the net income attributable to Innoviva stockholders was $265.9 million, an increase of $41.5 million from net income of $224.4 million in the year ended December 31, 2020.

The increase was primarily due to $65.1 million higher royalty income and $91.0 million of positive change in fair values of equity and long-term investments recognized in the year ended December 31, 2021, as further described below.

Cash and cash equivalents totaled $201.5 million, total value of our equity and long-term investments was $483.8 million, and royalty receivable was $110.7 million as of December 31, 2021.

Collaborative Arrangements with GSK

LABA Collaboration

In November 2002, we entered into the LABA Collaboration Agreement with GSK to develop and commercialize once‑daily LABA products for the treatment of COPD and asthma (the “LABA Collaboration Agreement”).

For the treatment of COPD, the collaboration has developed three combination products:

RELVAR ® /BREO ® ELLIPTA ® (“FF/VI”) (BREO ® ELLIPTA ® is the proprietary name in the U.S.

and Canada and RELVAR ® ELLIPTA ® is the proprietary name outside the U.S.

and Canada), a once‑daily combination medicine consisting of a LABA, vilanterol (VI), and an inhaled corticosteroid (“ICS”), fluticasone furoate (“FF”),

ANORO ® ELLIPTA ® (“UMEC/VI”), a once‑daily medicine combining a long‑acting muscarinic antagonist (“LAMA”), umeclidinium bromide (“UMEC”), with a LABA, vilanterol (VI), and

TRELEGY ® ELLIPTA ® (the combination FF/UMEC/VI), a once‑daily combination medicine consisting of an ICS, LAMA and LABA.

As a result of the launch and approval of RELVAR ® /BREO ® ELLIPTA ® and ANORO ® ELLIPTA ® in the U.S., Japan and Europe, in accordance with the LABA Collaboration Agreement, we paid milestone fees to GSK totaling $220.0 million during the year ended December 31, 2014.

Although we have no further milestone payment obligations to GSK pursuant to the LABA Collaboration Agreement, we continue to have ongoing commercialization activities under the LABA Collaboration Agreement, including participation in the joint steering committee and joint project committee that are expected to continue over the life of the agreement.

The milestone fees paid to GSK were recognized as capitalized fees paid to a related party, which are being amortized over their estimated useful lives commencing upon the commercial launch of the products.

We are 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.

For other products combined with a LABA from the LABA Collaboration, such as ANORO ® ELLIPTA ® , royalties are upward tiering and range from 6.5% to 10%.

We are also entitled to 15% of royalty payments made by GSK under its agreements originally entered into with us, and since assigned to TRC in connection with the Spin‑off including TRELEGY ® ELLIPTA ® , which royalties are upward tiering and range from 6.5% to 10%.

2004 Strategic Alliance

In March 2004, we entered into the Strategic Alliance Agreement with GSK where GSK received an option to license exclusive development and commercialization rights to product candidates from certain of our discovery programs on pre‑determined terms and on an exclusive, worldwide basis.

In 2005, GSK licensed our MABA program for the treatment of COPD, and in October 2011, we and GSK expanded the MABA program by adding six additional Innoviva‑discovered preclinical MABA compounds (the “Additional MABAs”).

The development program was funded in full by GSK.

In 2020, GSK terminated the program and paid a $10.0 million termination fee to TRC.

This fee was recognized as revenue from collaborative arrangements with a related party on our consolidated statements of income for the year ended December 31, 2020.

Strategic Partnership with Sarissa Capital

Strategic Advisory Agreement

On December 11, 2020, we entered into a Strategic Advisory Agreement (the “Services Agreement”) with Sarissa Capital Management LP (“Sarissa Capital”), pursuant to which Sarissa Capital provides a variety of strategic services to us in order to assist us in the development and execution of our acquisition strategy.

The services are provided free of charge to us.

Sarissa Capital is considered to be a related party due to its investment in Innoviva's common stock and its representation on our Board of Directors.

Partnership Agreement

On December 11, 2020, Innoviva Strategic Partners LLC, our wholly owned subsidiary (“Strategic Partners”), entered into a subscription agreement (the “Subscription Agreement”) and an Amended and Restated Limited Partnership Agreement (the “Partnership Agreement”) pursuant to which Strategic Partners became a limited partner of ISP Fund LP (the “Partnership”).

The general partner of the Partnership (the “General Partner”) is an affiliate of Sarissa Capital and, pursuant to an investment management agreement, Sarissa Capital acts as the investment adviser to the Partnership.

Strategic Partners made a $300 million initial contribution into the Partnership.

The Partnership was formed for the purposes of investing in equity securities in the healthcare, pharmaceutical and biotechnology industries.

The Partnership Agreement provides for Sarissa Capital to receive a customary one percent management fee from the Partnership, payable quarterly in advance, measured based on the Net Asset Value of Strategic Partners’

capital account in the Partnership.

In addition, the General Partner is entitled to a customary 10% annual performance allocation 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 Innoviva common shares held by GSK.

Pursuant to the letter agreement entered into between Strategic Partners, the Partnership, and Sarissa Capital Fund GP LP on May 20, 2021, Strategic Partners agreed to make additional capital contributions to the Partnership in an aggregate amount equal to the amount of the May 2021 distribution prior to March 31, 2022.

The capital contributions will then be subject to a 36-month lock up period from the contribution date.

Critical Accounting Policies and Estimates

Our management’s discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with GAAP.

The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the financial statements, as well as the reported revenue generated and expenses incurred during the reporting periods.

Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources.

Actual results may differ from these estimates under different assumptions or conditions.

We believe that the accounting policies discussed below are critical to understanding our historical and future performance, as these policies relate to the more significant areas involving management’s judgments and estimates.

Revenue Recognition

We recognize our 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 have the ability to 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.

Capitalized Fees paid to a Related Party

We review our Capitalized Fees for impairment on a product‑by‑product basis for each major geographic area when events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable.

The recoverability of Capitalized Fees is measured by comparing the asset’s carrying amount to the expected undiscounted future cash flows that the asset is expected to generate.

The determination of recoverability typically requires various estimates and assumptions, including estimating the useful life over which cash flows will occur, their amount, and the asset’s residual value, if any.

We derive the required cash flow estimates from near‑term forecasted product sales and long‑term projected sales in the corresponding market.

Based upon our analyses, no impairment charges have been recorded on the Capitalized Fees as of December 31, 2021.

Equity and Long-Term Investments

We hold warrants in InCarda Therapeutics Inc.

(“InCarda”), a privately held, clinical-stage biopharmaceutical company.

The warrants are classified as Level 3 financial instruments and recorded at fair value subject to remeasurement at each balance sheet date.

We use the Black-Scholes-Merton pricing model to estimate the fair value of the warrants with the following input assumptions:

the exercise price of the warrants, 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 its public peer companies.

Our other Level 3 financial instruments include the Gate Neurosciences Inc.

(“Gate”) convertible promissory note and private placement positions held by ISP Fund LP 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.

Fair Value of Stock‑Based Compensation Awards

We use the Black‑Scholes‑Merton option pricing model to estimate the fair value of options as of the date of grant.

The Black‑Scholes‑Merton option valuation model requires the use of assumptions, including the expected term of the award and the expected stock price volatility.

We use the “simplified”

method as described in Staff Accounting Bulletin No.

107, “Share Based Payment”

for the expected option term.

We use our historical volatility to estimate expected stock price volatility.

The estimated fair value of the option is expensed on a ratable basis over the expected term of the grant.

We determine the fair value of RSUs and RSAs based on the fair market values of the underlying stock on the dates of grant.

The fair value of service based RSUs and RSAs is expensed on a ratable or straight‑line basis over the expected term of the vesting.

The fair value of performance‑contingent RSUs and RSAs is expensed using an accelerated method over the requisite service period based on management’s best estimate as to whether it is probable that the shares awarded are expected to vest.

We assess the probability of the performance indicators being met on a continuous basis.

The grant date fair value of the RSUs and RSAs with a market condition is determined using a Monte Carlo valuation model and the compensation expense is recognized over the implied service period.

Stock‑based compensation expense was calculated based on awards ultimately expected to vest and was reduced for estimated forfeitures as of the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differed from those estimates.

The estimated annual forfeiture rates for stock options, RSUs and RSAs are based on our historical forfeiture experience.

Results of Operations

Total net revenue, as compared to the prior years, was as follows:

Year Ended December 31,

(In thousands)

Royalties from a related party

- RELVAR/BREO

Royalties from a related party

Total royalties from a related party

amortization of capitalized

fees paid to a related party

Royalty revenue

Strategic alliance - MABA program

Total net revenue from GSK

* Not Meaningful

Total net revenue increased to $391.9 million for the year ended December 31, 2021, compared to the year ended December 31, 2020.

Royalties for RELVAR ® /BREO ® ELLIPTA ® increased due to favorable adjustments, increased patient adherence and continued volume growth in certain markets.

ANORO ® ELLIPTA ® decreased slightly mainly due to the increasing pricing pressure in the U.S.

Royalties for TRELEGY ® ELLIPTA ® were higher due to the continued growth in triple therapy class and expanded sales in new markets.

Total net revenue increased to $336.8 million for the year ended December 31, 2020, compared to the year ended December 31, 2019.

Royalties for RELVAR ® /BREO ® ELLIPTA ® increased due to favorable adjustments from better than expected pricing and continued volume growth in both the U.S.

ANORO ® ELLIPTA ® maintained its steady volume growth, offset by the increasing pricing pressure in the U.S.

Royalties for TRELEGY ® ELLIPTA ® were higher due to the continued growth in prescriptions and market share.

Research & Development

Research and development (“R&D”) expenses o f $0.6 million and $1.8 million for the years ended December 31, 2021 and 2020, respectively, were attributable to Pulmoquine’s product development efforts.

Pulmoquine was dissolved and its product development was discontinued at the end of 2021.

No R&D expenses were incurred during the year ended December 31, 2019.

General & Administrative

General and administrative expenses, as compared to the prior years, were as follows:

Year Ended December 31,

(In thousands)

General and administrative

General and administrative expenses increased by $2.3 million for the year ended December 31, 2021, compared to the year ended December 31, 2020, mainly attributable to increased business development activities and higher legal expenses incurred for the arbitration between Theravance Biopharma, the Company and TRC.

The legal costs for the years ended December 31, 2021 and 2020 were $3.3 million and $1.7 million, respectively.

General and administrative expenses decreased by $0.8 million for the year ended December 31, 2020, compared to the year ended December 31, 2019, mainly attributable to lower operating expenses incurred.

Interest and Dividend Income and Other Expense, net

Interest and dividend income and other expense, net, as compared to the prior years, were as follows:

Year Ended December 31,

(In thousands)

Interest and dividend income

Other expense, net

* Not Meaningful

Interest and dividend income increased for the year ended December 31, 2021, compared to the year ended December 31, 2020, primarily due to higher returns on investments, including those managed by ISP Fund LP.

Interest income decreased for the year ended December 31, 2020, compared to the year ended December 31, 2019, primarily due to lower interest rates resulting from the COVID-19 pandemic.

The increase in other expense, net, for the year ended December 31, 2021, compared to prior years, was primarily due to investment management fees incurred by ISP Fund LP.

Interest Expense

Interest expense, as compared to the prior years, was as follows:

Year Ended December 31,

(In thousands)

Interest expense

Interest expense increased slightly for the year ended December 31, 2021, compared to the prior years primarily due to more debt discount and issuance costs being recognized through amortization.

Changes in Fair Values of Equity and Long-Term Investments

Changes in Fair Values of Equity and Long-Term Investments, net, as compared to the prior years, were as follows:

Year Ended December 31,

(In thousands)

Changes in fair values of equity

and long-term investments, net

* Not Meaningful

The changes in fair values of equity and long-term investments year over year reflect the realized gains and net unrealized gains and losses in our strategic investments in Armata, Entasis, InCarda, and Gate, and those investments managed by ISP Fund LP.

Income tax expense, net, as compared to the prior years, was as follows:

Year Ended December 31,

(In thousands)

Income tax expense, net

As of December 31, 2021, 2020 and 2019, we had net operating loss carryforwards for federal income taxes of $92.9 million, $361.5 million, and $0.6 billion, respectively.

As of December 31, 2021, 2020 and 2019, we had federal research and development tax credit carryforwards of $42.1 million, $43.6 million, and $44.4 million, respectively.

For the year ended December 31, 2021, 2020 and 2019, we recognized $76.4 million, $60.4 million, and $41.9 million of income tax expense, respectively, mainly based on the taxable income generated during those years.

We had total unrecognized tax benefits of $14.9 million as of December 31, 2021.

Total unrecognized tax benefits that, if recognized, would affect our effective tax rate were $8.4 million as of December 31, 2021.

Our total unrecognized tax benefits as of December 31, 2020 and December 31, 2019 were $15.2 million and $15.3 million, respectively.

Utilization of net operating loss and tax credit carryforwards is subject to rules, provided by the Internal Revenue Code and similar state provisions, governing annual limitations tied to ownership changes.

We conducted an analysis through October 31, 2021 to determine whether an ownership change had occurred since inception.

The study concluded that it is more likely than not that the Company did not experience an ownership change during the testing period.

However, notwithstanding the applicable annual limitations, we estimate that no portion of the net operating loss or credit carryforwards will expire before becoming available to reduce federal and state income tax liabilities.

Annual limitations may result in expiration of net operating loss and tax credit carryforwards before some or all of such amounts have been utilized.

Net Income Attributable to Noncontrolling Interest

Net income attributable to noncontrolling interest, as compared to the prior years, was as follows:

Year Ended December 31,

(In thousands)

Net income attributable to

noncontrolling interest

Net income attributable to noncontrolling interest represents the 85% share of net income in Theravance Respiratory Company, LLC for Theravance Biopharma.

The year over year increases were primarily due to the growth in prescriptions and market share for TRELEGY ® ELLIPTA ® .

Liquidity and Capital Resources

Since our inception, we have financed our operations primarily through private placements and public offerings of equity and debt securities and payments received under collaborative arrangements.

For the year ended December 31, 2021, we generated gross royalty revenues from GSK of $405.7 million.

Net cash and cash equivalents totaled $201.5 million, and royalties receivable from GSK totaled $110.7 million, as of December 31, 2021.

As of December 31, 2021, we had two outstanding convertible notes, the 2023 Notes and the 2025 Notes, in an aggregate principal amount of $433.5 million, of which $241.0 million becomes due in January 2023.

The remainder amount of $192.5 million will become due in August 2025.

Future interest payments associated with these notes total $26.9 million.

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 Innoviva common shares held by GSK.

The capital contributions will then be subject to a 36-month lock up period from the contribution date.

Adequacy of Cash Resources to Meet Future Needs

We believe that cash from projected future royalty revenues and our cash, cash equivalents and marketable securities will be sufficient to meet our anticipated debt service and operating needs for at least the next 12 months based upon current operating plans and financial forecasts.

If our current operating plans and financial forecasts change, we may require additional funding sooner in the form of public or private equity offerings or debt financings.

Furthermore, if in our view favorable financing opportunities arise, we may seek additional funding in the form of public or private equity offerings or debt financings at any time.

However, future financing may not be available in amounts or on terms acceptable to us, if at all.

This could leave us without adequate financial resources to fund our operations as currently planned.

In addition, from time to time we may restructure or reduce our debt, including through privately negotiated repurchases, tender offers, redemptions, amendments, or otherwise, all allowable with the terms of our debt agreements.

Cash flows, as compared to the prior years, were as follows:

Year Ended December 31,

(In thousands)

Net cash provided by operating activities

Net cash provided by (used in) investing activities

Net cash used in financing activities

Cash Flows from Operating Activities

Cash provided by operating activities for the year ended December 31, 2021 was $363.8 million, consisting primarily of our net income of $368.8 million, adjusted for non-cash items such as $76.4 million of deferred income taxes, $13.8 million of depreciation and amortization, $9.1 million amortization of debt discount and issuance costs, $2.0 million of stock-based compensation expense, partially offset by a $89.3 million increase in the fair values of our equity and long-term investments and an increase in receivables from collaborative arrangements of $16.8 million.

Cash provided by operating activities for the year ended December 31, 2020 was $313.1 million, consisting primarily of our net income of $293.8 million, adjusted for non-cash items such as $60.4 million of deferred income taxes, $13.8 million of depreciation and amortization, $8.4 million amortization of debt discount and issuance costs, $1.7 million of stock-based compensation expense, partially offset by a $50.3 million increase in the fair values of our equity and long-term investments and an increase in receivables from collaborative arrangements of $14.5 million.

Cash provided by operating activities for the year ended December 31, 2019 was $257.5 million, consisting primarily of our net income of $191.0 million, adjusted for non-cash items such as $41.9 million of deferred income taxes, $13.9 million of depreciation and amortization, $7.8 million amortization of debt discount and issuance costs, $2.1 million of stock-based compensation expense, partially offset by $2.2 million of amortization of discount on short-term investments and a decrease in receivables from collaborative arrangements of $3.9 million.

Cash Flows from Investing Activities

Net cash provided by investing activities for the year ended December 31, 2021 of $43.7 million was primarily due to $110.0 million net cash inflow from $301.0 million sales and $191.0 million purchases of equity and other investments managed by ISP Fund LP, offset by $66.3 million in purchases of various investment instruments including, but not limited to, common stock, warrants, convertible debt investment, money market funds and other securities.

Net cash used in investing activities for the year ended December 31, 2020 of $314.9 million was primarily due to $300.0 million in the purchases of equity and other investments managed by ISP Fund LP and $100.9 million in purchases of common stock, warrants, money market funds, and other securities, offset by $86.0 million of proceeds received from maturities of marketable securities.

Net cash used in investing activities for the year ended December 31, 2019 of $18.0 million was primarily due to $231.9 million in purchases of marketable securities, partially offset by $213.9 million of proceeds received from maturities of marketable securities.

Cash Flows from Financing Activities

Net cash used in financing activities for the year ended December 31, 2021 of $452.5 million was primarily due to a $394.1 million repurchase of our common stock from GSK and $59.5 million distributions to noncontrolling interest.

Net cash used in financing activities for the year ended December 31, 2020 of $29.8 million was primarily due to $30.5 million distributions to noncontrolling interest.

Net cash used in financing activities for the year ended December 31, 2019 of $23.8 million was primarily due to $13.8 million payment for paying off the remaining principal balance of our Term B Loan and $10.6 million distributions to noncontrolling interest.

Commitments and Contingencies

We indemnify our officers and directors for certain events or occurrences, subject to certain limits.

We may be subject to contingencies that may arise from matters such as product liability claims, legal proceedings, shareholder suits and tax matters.

As such, we are unable to estimate the potential exposure related to these indemnification agreements.

We have not recognized any liabilities relating to these agreements as of December 31, 2021.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 5. Market for Registrant’s Common Equity