3 unchanged sentences
(In thousands, except per share data)
+Added: September 30,
Current assets:
34 unchanged sentences
64,384 and 69,188 issued and outstanding as of
−Removed: June 30, 2023 and December 31, 2022, respectively
+Added: September 30, 2023 and December 31, 2022, respectively
Treasury stock:
−Removed: at cost, 32,005 shares as of June 30, 2023
−Removed: and December 31, 2022, respectively
+Added: at cost, 32,005 shares as of September 30, 2023
+Added: and December 31, 2022
Additional paid-in capital
7 unchanged sentences
(In thousands, except per share data)
−Removed: Three Months Ended June 30,
−Removed: Six Months Ended June 30,
+Added: Three Months Ended September 30,
+Added: Nine Months Ended September 30,
Royalty revenue, net of amortization of capitalized fees
−Removed: paid of $ 3,456 in the three months ended June 30, 2023
−Removed: and 2022, and $ 6,912 in the six months ended
−Removed: June 30, 2023 and 2022
+Added: paid of $ 3,456 in the three months ended September 30, 2023
+Added: and 2022, and $ 10,368 in the nine months ended
+Added: September 30, 2023 and 2022
Net product sales
9 unchanged sentences
Amortization of acquired intangible assets
+Added: Gain on sale of Theravance Respiratory
+Added: Company, LLC (“TRC”)
Loss on debt extinguishment
8 unchanged sentences
Income before income taxes
−Removed: Income tax expense (benefit), net
−Removed: Net income attributable to
+Added: Income tax expense, net
+Added: Net income (loss) attributable to
noncontrolling interests
13 unchanged sentences
(In thousands)
−Removed: Three Months Ended June 30,
−Removed: Six Months Ended June 30,
+Added: Three Months Ended September 30,
+Added: Nine Months Ended September 30,
Comprehensive income
−Removed: Comprehensive income attributable to
+Added: Comprehensive income (loss) attributable to
noncontrolling interests
5 unchanged sentences
(In thousands)
−Removed: Six Months Ended June 30, 2023
+Added: Nine Months Ended September 30, 2023
Treasury Stock
13 unchanged sentences
Balance as of June 30, 2023
−Removed: Six Months Ended June 30, 2022
+Added: Issuance of common stock units
+Added: and stock awards, net of repurchase
+Added: of shares to satisfy tax withholding
+Added: Repurchase of common stock
+Added: Stock-based compensation
+Added: Balance as of September 30, 2023
+Added: Nine Months Ended September 30, 2022
Treasury Stock
30 unchanged sentences
Balance as of June 30, 2022
+Added: Distributions to noncontrolling
+Added: Derecognition of noncontrolling
+Added: interests upon sale of TRC
+Added: Derecognition of noncontrolling
+Added: interests upon acquisition of
+Added: Entasis Therapeutics Holdings Inc.
+Added: (“Entasis”) minority interest
+Added: Exercise of stock options and
+Added: issuance of common stock units
+Added: and stock awards, net of
+Added: repurchase of shares to satisfy
+Added: tax withholding
+Added: Stock-based compensation
+Added: Balance as of September 30, 2022
See accompanying notes to condensed consolidated financial statements.
INNOVIVA, INC.
−Removed: C ONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
+Added: C ONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
−Removed: Six Months Ended June 30,
+Added: Nine Months Ended September 30,
Cash flows from operating activities
9 unchanged sentences
Loss on extinguishment of debt
+Added: Net gain on sale of TRC
Accrued interest income added to long-term investments
13 unchanged sentences
Purchases of equity method investments
+Added: Purchases of trading securities
Purchases of equity and long-term investments
3 unchanged sentences
Purchases of property and equipment
+Added: Proceeds from sale of ownership interest in TRC, net
Cash acquired through the consolidation of Entasis
+Added: Cash paid for the acquisition of La Jolla Pharmaceutical Company,
+Added: net of cash acquired
Net cash used in investing activities
1 unchanged sentence
Distributions to noncontrolling interests
+Added: Purchase of Entasis minority interest
Repurchase of common stock
5 unchanged sentences
issuance costs
−Removed: Net cash (used in) provided by financing activities
+Added: Net cash used in financing activities
Net (decrease) increase in cash and cash equivalents
1 unchanged sentence
Cash and cash equivalents at end of period
−Removed: Six Months Ended June 30,
+Added: Nine Months Ended September 30,
Supplemental Disclosure of Cash Flow Information:
Cash paid for interest
+Added: Cash paid for income taxes
Supplemental Disclosure of Non-cash Investing and Financing Activities:
Adoption of ASU 2020-06
−Removed: Right-of-use asset obtained through the consolidation of Entasis
−Removed: Therapeutics Holdings, Inc.
+Added: Reconciliation of Cash, Cash Equivalents and Restricted Cash:
+Added: Cash and cash equivalents
+Added: Restricted cash, included in “Other assets”
+Added: Total cash, cash equivalents and restricted cash at end of period shown in the
+Added: condensed consolidated statements of cash flows
See accompanying notes to condensed consolidated financial statements.
14 unchanged sentences
Our commercial and marketed products include GIAPREZA ® (angiotensin II), approved to increase blood pressure in adults with septic or other distributive shock, and XERAVA ® (eravacycline) for the treatment of complicated intra-abdominal infections in adults.
−Removed: Our lead product candidate, XACDURO ® (formerly known as sulbactam-durlobactam or SUL-DUR), was approved by the United States Food and Drug Administration (“FDA”) on May 23, 2023 and we expect to commence commercial sales of the product later in 2023.
+Added: Our new product, XACDURO ® (formerly known as sulbactam-durlobactam or SUL-DUR), was approved by the United States Food and Drug Administration (“FDA”) on May 23, 2023 and we commenced commercial sales of XACDURO ® in the third quarter of 2023.
Our development pipeline includes medicines for the treatment of bacterial infections.
14 unchanged sentences
Amounts in equity and long-term investments and changes in fair value of equity and long-term investments, net, reported in the Company's comparative financial statements have been reclassified to conform to the current year presentation.
+Added: Certain reclassifications have been made to the condensed consolidated statement of cash flows for the nine months ended September 30,
+Added: 2022 to conform to the current year’s presentation.
These reclassifications had no net effect on the net income or net cash flows as previously reported.
24 unchanged sentences
expectations due to a number of important factors.
−Removed: We also started recognizing revenue from product sales as a result of our acquisition of La Jolla.
+Added: We also started recognizing revenue from product sales of GIAPREZA ® and XERAVA ® as a result of our acquisition of La Jolla and XACDURO ® , which was commercially launched in September 2023.
Hospitals and other healthcare organizations generally purchase our products through a network of specialty distributors.
1 unchanged sentence
We do not believe that the loss of one of these distributors would significantly impact our ability to distribute our products, as we expect that sales volume would be absorbed by new or remaining distributors.
−Removed: Three of our customers each account for 37 %, 29 % and 27 %, respectively, of our net product sales for the three months ended June 30, 2023 , and 35 %, 30 % and 29 %, respectively, for the six months ended June 30, 2023 .
+Added: Three of our customers each account for 27 %, 28 % and 26 %, respectively, of our net product sales for the three months ended September 30, 2023 , and 32 %, 28 % and 27 %, respectively, for the nine months ended September 30, 2023 .
These same customers account for 29 %, 28 % and 14 %, respectively, of our receivables from net product sales, which are included in “Accounts receivables, net”
−Removed: in our unaudited consolidated balance sheet as of June 30, 2023.
+Added: in our unaudited condensed consolidated balance sheet as of September 30, 2023.
Refer to Item 1A.
7 unchanged sentences
Refer to Note 3, “Revenue Recognition”, for more information on our revenues for the periods presented.
−Removed: We also generate revenue from net sales of GIAPREZA ® and XERAVA ® .
+Added: We also generate revenue from net product sales of GIAPREZA ® , XERAVA ® , and XACDURO ® .
Our long-term assets are located within the United States.
Variable Interest Entities
−Removed: The primary beneficiary of a variable interest entity (“VIE’) is required to consolidate the assets and liabilities of the VIE.
+Added: The primary beneficiary of a variable interest entity (“VIE”) is required to consolidate the assets and liabilities of the VIE.
When we obtain a variable interest in another entity, we assess at the inception of the relationship and upon occurrence of certain significant events whether the entity is a VIE and, if so, whether we are the primary beneficiary of the VIE based on our power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and our obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE.
104 unchanged sentences
Dilutive potential common stock equivalents include the assumed exercise, vesting and issuance of employee stock awards using the treasury stock method, as well as common stock issuable upon assumed conversion of our convertible subordinated notes due 2023 (the “2023 Notes”) up until its maturity date on January 15, 2023, our convertible senior notes due 2025 (the “2025 Notes”) and our convertible senior notes due 2028 (the “2028 Notes”) using the if-converted method.
−Removed: The following table shows the computation of basic and diluted net income per share for the three and six months ended June 30, 2023 and 2022:
−Removed: Three Months Ended June 30,
−Removed: Six Months Ended June 30,
+Added: The following table shows the computation of basic and diluted net income per share for the three and nine months ended September 30, 2023 and 2022:
+Added: Three Months Ended September 30,
+Added: Nine Months Ended September 30,
(In thousands except per share data)
16 unchanged sentences
The following common stock equivalents were not included in the computation of diluted net income per share because their effect was anti-dilutive for the periods presented:
−Removed: Three Months Ended June 30,
−Removed: Six Months Ended June 30,
+Added: Three Months Ended September 30,
+Added: Nine Months Ended September 30,
(In thousands)
2 unchanged sentences
Outstanding stock warrant
−Removed: Outstanding 2025 Notes
−Removed: Outstanding 2028 Notes
Revenue Recognition
4 unchanged sentences
Net revenue recognized under our GSK Agreements was as follows:
−Removed: Three Months Ended June 30,
−Removed: Six Months Ended June 30,
+Added: Three Months Ended September 30,
+Added: Nine Months Ended September 30,
(In thousands)
4 unchanged sentences
Net Product Sales
−Removed: Our net product sales were $ 15.7 million, consisting of net sales of GIAPREZA ® and XERAVA ® for $ 11.2 million and $ 4.5 million, respectively, for the three months ended June 30, 2023 .
−Removed: Our net product sales were $ 27.2 million, consisting of net sales of GIAPREZA® and XERAVA® for $ 20.2 million and $ 7.0 million, respectively, for the six months ended June 30, 2023 .
−Removed: We derived over 94 % and 96 % of our net product sales from customers located in the U.S for the three and six months ended June 30, 2023, respectively.
+Added: Our net product sales were $ 13.7 million, consisting of net sales of GIAPREZA ® , XERAVA ® , and XACDURO ® for $ 8.0 million, $ 5.1 million, and $ 0.6 million, respectively, for the three months ended September 30, 2023 .
+Added: Our net product sales were $ 40.9 million, consisting of net sales of GIAPREZA ® , XERAVA ® , and XACDURO ® for $ 28.2 million, $ 12.1 million, and $ 0.6 million, respectively, for the nine months ended September 30, 2023 .
+Added: We derived over 86 % and 93 % of our net product sales from customers located in the U.S for the three and nine months ended September 30, 2023, respectively.
+Added: For the comparative periods in 2022, our net product sales amounted to $ 5.1 million, consisting of $ 3.8 million in net sales of GIAPREZA ® and $ 1.3 million in net sales of XERAVA ® .
+Added: These sales were recognized from the date of our acquisition of La Jolla, which took place on August 22, 2022, through September 30, 2022.
License Revenue
13 unchanged sentences
Payments received for research support and reimbursable clinical trial costs are recorded as a reduction to research and development expense during the period in which the qualifying expenses are incurred.
−Removed: Such amounts recorded for the three and six months ended June 30, 2023 and 2022 are not material.
−Removed: Following the approval of XACDURO ® by the FDA in May 2023, we recognized $ 3.0 million in license revenue for the three and six months ended June 30, 2023.
+Added: Such amounts recorded for the three and nine months ended September 30, 2023 and 2022 were not material.
+Added: Following the approval of XACDURO ® by the FDA in May 2023, we recognized $ 3.0 million in license revenue for the nine months ended September 30, 2023.
Entasis entered into a collaboration agreement with the Global Antibiotic Research and Development Partnership (“GARDP”) for the development, manufacture and commercialization of the product candidate zoliflodacin in certain countries (“the GARDP Collaboration Agreement”).
1 unchanged sentence
We recorded reimbursements from GARDP under this agreement as reduction to research and development expense.
−Removed: Relevant amounts for the three and six months ended June 30, 2023 and 2022 were not material.
+Added: Relevant amounts for the three and nine months ended September 30, 2023 and 2022 were not material.
In addition, under the GARDP Collaboration Agreement, GARDP was granted a worldwide, fully paid, exclusive and royalty-free license, with the right to sublicense, to use our zoliflodacin technology in connection with GARDP’s development, manufacture and commercialization of zoliflodacin in low-income and specified middle-income countries.
8 unchanged sentences
PAION is required to use commercially reasonable efforts to commercialize GIAPREZA ® and XERAVA ® in the PAION Territory.
−Removed: We have not recognized any revenue from PAION related to commercial milestones from the date of acquisition of La Jolla to June 30, 2023.
−Removed: Royalty revenue recognized under this agreement for the three and six months ended June 30, 2023 was not material.
+Added: We have not recognized any revenue from PAION related to commercial milestones from the date of acquisition of La Jolla to September 30, 2023.
+Added: Royalty revenue recognized under this agreement for the three and nine months ended September 30, 2023 was not material.
La Jolla also entered into the PAION commercial supply agreement (the “PAION Supply Agreement”) whereby La Jolla will supply PAION a minimum quantity of GIAPREZA ® and XERAVA ® through July 13, 2024.
1 unchanged sentence
During the initial term of the supply agreement, we will be reimbursed for direct and certain indirect manufacturing costs at cost.
−Removed: We have not recognized any cost reimbursements under this agreement for the three and six months ended June 30, 2023.
+Added: We recognized $ 1.0 million in cost reimbursements under this agreement for the three and nine months ended September 30, 2023.
Everest Medicines Limited
Pursuant to the Everest Medicines Limited (“Everest”) License, La Jolla granted Everest an exclusive license to develop and commercialize XERAVA ® for the treatment of complicated intra-abdominal infections (“cIAI”) and other indications in mainland China, Taiwan, Hong Kong, Macau, South Korea, Singapore, the Malaysian Federation, the Kingdom of Thailand, the Republic of Indonesia, the Socialist Republic of Vietnam and the Republic of the Philippines (collectively, the “Everest Territory”).
−Removed: Under this agreement, we recognized $ 8.0 million in license revenue for the six months ended June 30, 2023 as a result of achievement of a regulatory milestone during the period.
+Added: Under the Everest License, we recognized $ 8.0 million in license revenue for the nine months ended September 30, 2023 as a result of our achievement of a regulatory milestone during the period.
We are eligible to receive additional sales milestone payments of up to an aggregate of $ 20.0 million.
4 unchanged sentences
or (iii) 10 years after the first commercial sale of a product in such jurisdiction in the Everest Territory.
−Removed: Royalty revenue recognized under this agreement for the three and six months ended June 30, 2023 was not material.
+Added: Royalty revenue recognized under this agreement for the three and nine months ended September 30, 2023 was not material.
La Jolla also entered into the Everest commercial supply agreement (the “Everest Supply Agreement”) whereby La Jolla will supply Everest a minimum quantity of XERAVA ® through December 31, 2023 and will transfer to Everest certain XERAVA ® -related manufacturing know-how.
We will be reimbursed for direct and certain indirect manufacturing costs at 110 % of cost through December 31, 2023.
−Removed: We initially recognized a $ 2.8 million partial prepayment for XERAVA® as deferred revenue, of which, $ 0.5 million was recognized for the three and six months ended June 30, 2023.
+Added: We recognized a $ 0.9 million and $ 1.6 million in revenue under this agreement for the three and nine months ended September 30, 2023, respectively.
In-License Agreements
4 unchanged sentences
The obligation to pay royalties under this agreement extends through the last-to-expire patent covering GIAPREZA ® .
−Removed: Amounts recognized under this agreement for the three and six months ended June 30, 2023 were not material.
+Added: Amounts recognized under this agreement for the three and nine months ended September 30, 2023 were $ 0.5 million and $ 1.7 million, respectively.
Harvard University
9 unchanged sentences
The obligation to pay royalties under this agreement extends through the last-to-expire patent covering tetracycline-based products, including XERAVA ® .
−Removed: For the six months ended June 30, 2023 , we recognized $ 1.6 million in cost of license revenue under this agreement as a result of the license revenue we earned under the out-licensing agreement with Everest for the same period.
+Added: For the nine months ended September 30, 2023 , we recognized $ 1.6 million in cost of license revenue under this agreement as a result of the license revenue we earned under the out-licensing agreement with Everest for the same period.
Paratek Pharmaceuticals, Inc.
3 unchanged sentences
net sales of XERAVA ® .
−Removed: Our obligation to pay royalties with respect to the licensed product is retroactive to the date of the first commercial sale of XERAVA ® and shall continue until there are no longer any valid claims of the Paratek patents, which will expire in October 2023 .
−Removed: Amounts recognized under this agreement for the three and six months ended June 30, 2023 were not material.
+Added: Our obligation to pay royalties with respect to the licensed product is retroactive to the date of the first commercial sale of XERAVA ® and shall continue until there are no longer any valid claims of the Paratek patents, which expires in October 2023 .
+Added: Amounts recognized under this agreement for the three and nine months ended September 30, 2023 were not material.
Consolidated Entities and Acquisitions
10 unchanged sentences
Prior to the closing of the transaction and as part of the agreement, TRC distributed its ownership interests and investments in InCarda Therapeutics, Inc.
−Removed: (“InCarda"), ImaginAb, Inc.
+Added: (“InCarda”), ImaginAb, Inc.
(“ImaginAb”), Gate Neurosciences, Inc.
−Removed: (“Gate") and Nanolive SA (“Nanolive”), which had a total carrying value of $ 39.4 million, to ITH.
−Removed: The summarized financial information of TRC for the three and six months ended June 30, 2022 are presented as follows:
−Removed: Three Months Ended June 30,
−Removed: Six Months Ended June 30,
+Added: (“Gate”) and Nanolive SA (“Nanolive”), which had a total carrying value of $ 39.4 million, to ITH.
+Added: The summarized financial information of TRC for the three and nine months ended September 30, 2022 are presented as follows:
+Added: Three Months Ended September 30,
+Added: Nine Months Ended September 30,
(In thousands)
1 unchanged sentence
Operating expenses
−Removed: Income from operations
+Added: Income (loss) from operations
Other income, net
+Added: Realized loss
Income tax expense, net
Changes in fair values of equity and long-term
−Removed: In December 2020, Innoviva Strategic Partners LLC, our wholly owned subsidiary (“Strategic Partners”), contributed $ 300 .0 million to ISP Fund LP (the "Partnership") for investing in “long”
+Added: Net income (loss)
+Added: In December 2020, Innoviva Strategic Partners LLC, our wholly owned subsidiary (“Strategic Partners”), contributed $ 300.0 million to ISP Fund LP (the “Partnership”) for investing in “long”
positions in the healthcare, pharmaceutical and biotechnology sectors and became a limited partner.
−Removed: The general partner of the Partnership ("General Partner") is an affiliate of Sarissa Capital.
+Added: The general partner of the Partnership (“General Partner”) is an affiliate of Sarissa Capital.
The Partnership Agreement provides for Sarissa Capital to receive management fees from the Partnership, payable quarterly in advance, measured based on the Net Asset Value of Strategic Partners’
7 unchanged sentences
Our maximum exposure to loss is equal to the amount we invested in the entity.
−Removed: As of June 30, 2023, we held approximately 100 % of the economic interest of the Partnership.
−Removed: As of June 30, 2023 and December 31, 2022, total assets of the Part nership were $ 319.4 million and $ 320.6 million, respectively, of which the majority was attributable to equity, debt and long-term investments.
−Removed: As of June 30, 2023 and December 31, 2022 , total liabilities were $ 0.7 million and $ 1.6 million, respectively.
+Added: As of September 30, 2023, we held approximately 100 % of the economic interest of the Partnership.
+Added: As of September 30, 2023 and December 31, 2022, total assets of the Part nership were $ 298.6 million and $ 320.6 million, respectively, of which the majority was attributable to equity, debt and long-term investments.
+Added: As of September 30, 2023 and December 31, 2022 , total liabilities were $ 1.1 million and $ 1.6 million, respectively.
The partnership’s assets can only be used to settle its own obligations.
−Removed: During the three and six months ended June 30, 2023 , we recorded $ 0.6 million and $ 0.1 million, respectively, of net investment-related income earned by the Partnership, and $ 3.8 million of net positive changes and $ 0.3 million of net negative changes, respectively, in fair values of equity and long-term investments in the unaudited condensed consolidated statements of income.
−Removed: During the three and six months ended June 30, 2022 , we recorded $ 0.5 million and $ 0.7 million, respectively, of net investment-related expens es incurred by the Partnership, and $ 6.5 million and $ 4.4 million, respectively, of net negative changes in fair values of equity and long-term investments in the unaudited condensed consolidated statements of income.
+Added: During the three and nine months ended September 30, 2023 , we recorded $ 1.1 million and $ 1.2 million, respectively, of net investment-related income earned by the Partnership, and $ 22.4 million and $ 22.7 million of net negative changes, respectively, in fair values of equity and long-term investments in the unaudited condensed consolidated statements of income.
+Added: During the three and nine months ended September 30, 2022, we recorded $ 0.3 million and $ 1.0 million, respectively, of net investment-related expenses incurred by the Partnership, and $ 10.5 million and $ 14.9 million, respectively, of net negative changes in fair values of equity and long-term investments in the unaudited condensed consolidated statements of income.
Entasis Therapeutics Holdings Inc.
6 unchanged sentences
We used the Black-Scholes-Merton pricing model to estimate the fair value of the warrants.
−Removed: On February 17, 2022, Innoviva Strategic Opportunities, LLC ("ISO") entered into a securities purchase agreement with Entasis pursuant to which ISO purchased a convertible promissory note for a total purchase price of $ 15.0 million.
+Added: On February 17, 2022, Innoviva Strategic Opportunities, LLC (“ISO”) entered into a securities purchase agreement with Entasis pursuant to which ISO purchased a convertible promissory note for a total purchase price of $ 15.0 million.
The note bore an annual interest rate of 0.59 % and was due to mature and become payable on August 18, 2022 unless it was converted at a conversion price of $ 1.48 before the maturity date.
12 unchanged sentences
After the acquisition in July 2022, we adjusted the purchase price allocation based on new and additional information related to product sales forecast provided by Entasis and deferred tax liabilities.
−Removed: In February 2023, we recorded a measurement period adjustment of a $ 1.2 million increase in goodwill, primarily related to a decrease in intangible assets of $ 0.8 million and an increase in deferred tax liabilities of $ 0.4 million.
+Added: In February 2023, we recorded a measurement period adjustment of $ 1.2 million increase in goodwill, primarily related to a decrease in intangible assets of $ 0.8 million and an increase in deferred tax liabilities of $ 0.4 million.
The measurement period adjustment did not impact the consolidated net income for the periods presented.
21 unchanged sentences
As a result of the consolidation, we recognized a non-controlling interest of $ 38.5 million as of February 17, 2022.
−Removed: Our consolidated net income for the three and six months ended June 30, 2022 included the net loss attributable to Innoviva stockholders since the consolidation date of $ 11.7 million and $ 16.3 million, respectively, from the results of operations of Entasis.
+Added: Our consolidated net income for the three and nine months ended September 30, 2022 included the net loss attributable to Innoviva stockholders since the consolidation date of $ 2.7 million and $ 13.6 million, respectively, from the results of operations of Entasis.
La Jolla Pharmaceutical Company
2 unchanged sentences
La Jolla is dedicated to the commercialization of innovative therapies that improve outcomes in patients suffering from life-threatening diseases.
−Removed: La Jolla brings to Innoviva an established product portfolio, including GIAPREZA ® (angiotensin II), approved to increase blood pressure in adults with septic or other distributive shock and XERAVA ® (eravacycline) for the treatment of complicated intra-abdominal infections (cIAIs).
−Removed: The fair values assigned to assets acquired and liabilities assumed are based on management’s best estimates and assumptions as of August 22, 2022.
−Removed: We have completed a preliminary valuation and expect to finalize it as soon as practicable, but no later than one year from the acquisition date.
−Removed: The purchase accounting for this transaction is not yet finalized.
+Added: La Jolla brought to Innoviva an established product portfolio, including GIAPREZA ® (angiotensin II), approved to increase blood pressure in adults with septic or other distributive shock and XERAVA ® (eravacycline) for the treatment of complicated intra-abdominal infections (cIAIs).
We incurred approximately $ 5.3 million in acquisition-related costs in connection with this acquisition during the year ended December 31, 2022.
+Added: The fair values assigned to assets acquired and liabilities assumed as of August 22, 2022 were based on management’s best estimates and assumptions.
In June 2023, we recorded a measurement period adjustment of $ 13.1 million decrease in goodwill, primarily related to an increase in deferred tax assets of $ 10.5 million and a decrease in deferred tax liabilities of $ 2.6 million.
−Removed: T he following table summarizes the adjusted preliminary allocation of the fair values assigned to the assets acquired and liabilities assumed as of the date of the acquisition:
+Added: In August 2023, we recorded a
+Added: measurement period adjustment of $ 3.0 million increase in goodwill, primarily related to a decrease in deferred tax assets of $ 2.4 million and an increase in deferred tax liabilities of $ 0.6 million.
+Added: T he following table represents the adjusted fair values of the assets acquired and liabilities assumed by us in the transaction:
(In thousands)
21 unchanged sentences
Pro Forma Financial Information
−Removed: The following table presents certain unaudited pro-forma financial information for the three and six months ended June 30, 2022 as if the consolidation of Entasis and La Jolla occurred on January 1, 2021.
+Added: The following table presents certain unaudited pro-forma financial information for the three and nine months ended September 30, 2022 as if the consolidation of Entasis and La Jolla occurred on January 1, 2021.
The unaudited pro forma financial information is presented for informational purposes only, and is not indicative of the results of operations that would have been achieved if the acquisitions had taken place on January 1, 2021, or of results that may occur in the future.
1 unchanged sentence
common stock and warrants, fair value adjustments to inventory, amortization of intangible assets, and interest expense on deferred royalty obligations and acquisition-related costs.
−Removed: Three Months Ended June 30,
−Removed: Six Months Ended June 30,
+Added: Three Months Ended September 30,
+Added: Nine Months Ended September 30,
(In thousands)
−Removed: Net income (loss) attributable to Innoviva stockholders
+Added: Net income attributable to Innoviva stockholders
Equity and Long-term Investments and Fair Value Measurements
16 unchanged sentences
s board of directors, subject to certain conditions and qualifications set forth in the amended and restated investor rights agreement.
−Removed: As of June 30, 2023 , three of the seven members of Armata’s board of directors are also members of the board of directors of Innoviva.
−Removed: As of June 30, 2023 and December 31, 2022, the Company and ISO owned approximately 69.4 % , of Armata’s common stock.
+Added: On July 10, 2023, Armata entered into an amendment to the amended and restated investor rights agreement with the Company and ISO, pursuant to which the Company and ISO agreed that the voting agreement will expire on the earlier of the fifth anniversary of the original agreement's effective date, January 26, 2021, or the approval by the FDA of any of Armata’s product candidates for marketing and commercial distribution.
+Added: As of September 30, 2023 , three of the seven members of Armata’s board of directors are also members of the board of directors of Innoviva.
+Added: As of September 30, 2023 and December 31, 2022, the Company and ISO owned approximately 69.4 % , of Armata’s common stock.
On January 10, 2023, we entered into a Secured Convertible Credit Agreement (the “Credit Agreement”) with Armata, under which we extended a one-year convertible note (the "Armata Convertible Note") in an aggregate amount of $ 30.0 million at an interest rate of 8.0 % per annum.
2 unchanged sentences
The Armata Convertible Note is secured by substantially all of the assets of Armata and its domestic and foreign material subsidiaries.
+Added: On July 10, 2023, ISO and Armata executed an amendment to the Armata Convertible Note extending the maturity date from January 10, 2024 to January 10, 2025.
+Added: On July 10, 2023, ISO and Armata entered into a Credit and Security Agreement (the “Credit and Security Agreement"), under which we extended a term loan to Armata (the “Armata Term Loan”) in an aggregate amount of $ 25.0 million.
+Added: The Armata Term Loan is subject to an interest rate of 14 % per annum and is due to mature on January 10, 2025 .
+Added: The Credit and Security Agreement is secured by substantially all of the assets of Armata and its domestic and foreign material subsidiaries.
The investments in Armata's common stock and warrants provide Innoviva and ISO the ability to have significant influence, but not control over Armata’s operations.
11 unchanged sentences
We account for the Armata Convertible Note as a trading security, measured at fair value using a Monte Carlo simulation model with the probability of certain qualified events and the assumptions of risk-free rate, volatility of stock price and timing of certain qualified events.
−Removed: As of June 30, 2023, the fair values of our holdings of Armata common stock, warrants and the Armata Convertible Note were estimated at $ 28.6 million, $ 6.5 million and $ 31.2 million, respectively.
+Added: We account for the Armata Term Loan as a trading security, measured at fair value using an income approach based on the discounted value of expected future cash flows.
+Added: As of September 30, 2023, the fair values of our holdings of Armata common stock, warrants, the Armata Convertible Note and the Armata Term Loan were estimated at $ 75.2 million, $ 31.8 million, $ 49.7 million and $ 26.2 million, respectively.
As of December 31, 2022 , the fair values of our holdings of Armata common stock and warrants were estimated at $ 31.1 million and $ 8.1 million, respectively.
−Removed: For the Armata common stock and warrants, we recorded $ 19.9 million and $ 4.1 million in unrealized loss for the three and six months ended June 30, 2023, respectively, as changes in fair values of equity method i nvestments, net, in the unaudited condensed consolidated statements of income.
−Removed: During the three and six months ended June 30, 2022, we recorded $ 42.8 million and $ 47.0 million unrealized loss, respectively, as changes in fair values of equity and long-term investments, net, in the unaudited condensed consolidated statements of income.
−Removed: For the Armata Convertible Note, we recorded $ 1.7 million unrealized loss and $ 1.1 million unrealized gain as changes in fair values of equity and long-term investments, net, in the unaudited condensed consolidated statement of income for three and six months ended June 30, 2023, respectively.
+Added: For the Armata common stock and warrants, we recorded $ 72.0 million and $ 67.9 million in unrealized gain for the three and nine months ended September 30, 2023, respectively, as changes in fair values of equity method investments, net, in the unaudited condensed consolidated statements of income.
+Added: During the three and nine months ended September 30, 2022 , we recorded $ 11.7 million unrealized gain and $ 35.3 million unrealized loss, respectively, as changes in fair values of equity method investments, net, in the unaudited condensed consolidated statements of income.
+Added: For the Armata Convertible Note, we recorded $ 18.5 million and $ 19.6 million unrealized gain as changes in fair values of equity and long-term investments, net, in the unaudited condensed consolidated statement of income for three and nine months ended September 30, 2023, respectively.
+Added: For the Armata Term Loan, we recorded $ 1.1 million unrealized gain as changes in fair values of equity and long-term investments, net, in the unaudited condensed consolidated statement of income for three and nine months ended September 30, 2023.
The summarized financial information, including the portion we do not own, is presented for Armata on a one quarter lag as follows:
Income Statement Information
−Removed: Three Months Ended March 31,
−Removed: Six Months Ended March 31,
+Added: Three Months Ended June 30,
+Added: Nine Months Ended June 30,
(In thousands)
7 unchanged sentences
ITH has the right to designate one member to InCarda’s board of directors.
−Removed: As of June 30, 2023, no ne of InCarda’s six board members was designated by ITH.
−Removed: We did not exercise the InCarda 2020 Warrant which expired in March 2023 and wrote off its carrying value of $ 0.1 million during the six months ended June 30, 2023.
+Added: As of September 30, 2023 , no ne of InCarda’s six board members was designated by ITH.
+Added: We did not exercise the InCarda 2020 Warrant which expired in March 2023 and wrote off its carrying value of $ 0.1 million during the nine months ended September 30, 2023.
On March 9, 2022, TRC entered into a Note and Warrant Purchase Agreement (the “InCarda Agreement”) with InCarda to acquire a convertible promissory note (the “InCarda Convertible Note”) and warrants (the “InCarda 2022 Warrant”) for $ 0.7 million.
3 unchanged sentences
In connection with the new round of financing, InCarda recapitalized its equity structure resulting in TRC owning 4,093,886 shares of InCarda’s common stock, 37,350 shares of its Series A-1 preferred stock, 20,469,432 shares of its Series C preferred stock, 8,771,780 shares of its Series D-1 preferred stock, 3,369,802 shares of its Series D-2 preferred stock, a warrant to purchase 5,117,358 shares of its Series C preferred stock at $ 0.73 per share and a warrant to purchase 2,490,033 shares of its Series D-1 preferred stock at $ 0.20 per share.
−Removed: As of June 30, 2023 and December 31, 2022 , we held 8.1 % and 9.0 % of InCarda equity ownership, respectively.
+Added: As of September 30, 2023 and December 31, 2022 , we held 8.1 % and 9.0 % of InCarda equity ownership, respectively.
Our investment in InCarda does not provide us with the ability to control or have significant influence over InCarda’s operations.
12 unchanged sentences
We recognized an impairment charge of $ 2.9 million during the second quarter of 2023.
−Removed: As of June 30, 2023 , we recorded $ 4.8 million in fair value of InCarda’s Series C preferred stock and $ 0.2 million in fair value of Series D warrants (the “InCarda Preferred Stock Warrants”).
+Added: As of September 30, 2023 , we recorded $ 4.8 million in fair value of InCarda’s Series C preferred stock and $ 0.2 million in fair value of Series D warrants (the “InCarda Preferred Stock Warrants”).
As of December 31, 2022, we recorded $ 6.8 million in fair value of InCarda’s Series C preferred stock and $ 0.6 million in fair value of the InCarda Preferred Stock Warrants.
−Removed: As of June 30, 2023 and December 31, 2022, we recognized $ 2.7 million and $ 3.2 million, respectively, for InCarda’s Series D-1 preferred stock, Series D-2 preferred stock, and common stock using the measurement alternative.
−Removed: During the three and six months ended June 30, 2023 , we recorded $ 2.9 million and $ 3.0 million in net unrealized loss, respectively, as changes in fair values of equity and long-term investments, net, in the unaudited condensed consolidated statements of income.
−Removed: During the three and six months ended June 30, 2022, we recorded $ 9.6 million and $ 9.0 million in net unrealized loss, respectively, as changes in fair values of equity and long-term investments, net, in the unaudited condensed consolidated statements of income.
+Added: As of September 30, 2023 and December 31, 2022, we recognized $ 2.7 million and $ 3.2 million, respectively, for InCarda’s Series D-1 preferred stock, Series D-2 preferred stock, and common stock using the measurement alternative.
+Added: Du ring the three months ended September 30, 2023 , there was no change in the carrying amount of our investment.
+Added: During the nine months ended September 30, 2023, we recorded a $ 3.0 million net unrealized loss, as a change in fair values of equity and long-term investments, net, in the unaudited condensed consolidated statements of income.
+Added: During the three and nine months ended September 30, 2022 , we recorded $ 0.2 million in net unrealized gain and $ 8.8 million in net unrealized loss, respectively, as changes in fair values of equity and long-term investments, net, in the unaudited condensed consolidated statements of income.
Equity Investment in ImaginAb
5 unchanged sentences
On March 14, 2023, ITH entered into a securities purchase agreement with ImaginAb to purchase 270,568 shares of ImaginAb Series C-2 preferred stock for $ 0.6 million.
−Removed: As of June 30, 2023 , one of ImaginAb’s six board members was designated by ITH.
−Removed: As of June 30, 2023 and December 31, 2022, we held 12.6 % and 12.7 %, respectively, of ImaginAb equity ownership.
+Added: On September 14, 2023, ITH entered into a securities purchase agreement with
+Added: ImaginAb to purchase another 405,852 shares of ImaginAb Series C-2 preferred stock for $ 0.6 million.
+Added: As of September 30, 2023 , one of ImaginAb’s six board members was designated by ITH.
+Added: As of September 30, 2023 and December 31, 2022, we held 11.8 % and 12.7 %, respectively, of ImaginAb equity ownership.
Our investment in ImaginAb does not provide us with the ability to control or have significant influence over ImaginAb’s operations.
3 unchanged sentences
Because ImaginAb’s equity securities are not publicly traded and do not have a readily determinable fair value, we account for our investment in ImaginAb’s Series C preferred stock, Series C-2 preferred stock and common stock using the measurement alternative.
−Removed: As of June 30, 2023 and December 31, 2022, $ 7.0 million and $ 6.4 million, respectively, was recorded as equity and long-term investments in the unaudited condensed consolidated balance sheets and there was no change to the fair value of our investment.
+Added: As of September 30, 2023 and December 31, 2022, $ 7.6 million and $ 6.4 million, respectively, was recorded as equity and long-term investments in the unaudited condensed consolidated balance sheets and there was no change in the carrying amount of our investments.
Convertible Promissory Note in Gate Neurosciences
14 unchanged sentences
We have accounted for the Gate Convertible Note as a trading security, measured at fair value using a Monte Carlo simulation model with the probability of certain qualified events and the assumptions of equity value of Gate, risk-free rate, expected stock price, volatility of its peer companies, and the time until a financing is raised.
−Removed: As of June 30, 2023 and December 31, 2022, the fair value of the Gate Convertible Note was estimated at $ 22.1 million and $ 15.7 million, respectively, and recorded as equity and long-term investments in the unaudited condensed consolidated balance sheets.
−Removed: We rec orded $ 0.6 million net unrealized gain as changes in fair values of equity and long-term investments, net in the unaudited condensed consolidated state ment of income for the three months ended June 30, 2023 .
−Removed: We recorded $ 0.3 million and $ 0.1 million unrealized gain as changes in fair values of equity and long-term investments, net, in the unaudited condensed consolidated statement of income for the three and six months ended June 30, 2022, respectively.
+Added: As of September 30, 2023 and December 31, 2022, the fair value of the Gate Convertible Note was estimated at $ 22.3 million and $ 15.7 million, respectively, and recorded as equity and long-term investments in the unaudited condensed consolidated balance sheets.
+Added: We rec orded $ 0.1 million and $ 0.8 million unrealized gain as changes in fair values of equity and long-term investments, net in the unaudited condensed consolidated state ment of income for the three and nine months ended September 30, 2023, respectively.
+Added: We recorded $ 0.2 million and $ 0.3 million unrealized gain as changes in fair values of equity and long-term investments, net, in the unaudited condensed consolidated statement of income for the three and nine months ended September 30, 2022, respectively.
Equity Investment in Nanolive
5 unchanged sentences
ITH also has the right to designate another member, who will be mutually acceptable to ITH and another stockholder, to Nanolive’s board.
−Removed: As of June 30, 2023 , one of Innoviva designees is serving on Nanolive’s seven -member board.
−Removed: As of June 30, 2023 and December 31, 2022, we held 15.3 % and 15.5 %, respectively, of Nanolive equity ownership.
+Added: As of September 30, 2023 , one of Innoviva designees is serving on Nanolive’s seven -member board.
+Added: As of September 30, 2023 and December 31, 2022, we held 15.3 % and 15.5 %, respectively, of Nanolive equity ownership.
Our investment in Nanolive does not provide us with the ability to control or have significant influence over Nanolive’s operations.
3 unchanged sentences
Because Nanolive’s equity securities are not publicly traded and do not have a readily determinable fair value, we account for our investment in Nanolive’s Series C preferred stock using the measurement alternative.
−Removed: As of June 30, 2023 and December 31, 2022, $ 10.6 million was recorded as equity and long-term investments in the unaudited condensed consolidated balance sheets and there was no change to the fair value of our investment.
+Added: As of September 30, 2023 and December 31, 2022, $ 10.6 million was recorded as equity and long-term investments in the unaudited condensed consolidated balance sheets and there was no change to the carrying amount of our investment.
Available-for-Sale Securities
1 unchanged sentence
Available-for-sale securities are summarized below:
−Removed: June 30, 2023
+Added: September 30, 2023
(In thousands)
5 unchanged sentences
(1) Money market funds are included in cash and cash equivalents in the condensed consolidated balance sheets .
−Removed: As of June 30, 2023 , all investments were money market funds, and there was no credit loss recognized.
+Added: As of September 30, 2023 , all investments were money market funds, and there was no credit loss recognized.
Fair Value Measurements
Our available-for-sale securities, equity and long-term investments and contingent value rights are measured at fair value on a recurring basis and our debt is carried at amortized cost basis.
−Removed: Estimated Fair Value Measurements as of June 30, 2023 Using:
+Added: Estimated Fair Value Measurements as of September 30, 2023 Using:
Types of Instruments
5 unchanged sentences
Convertible debt investment - Armata Note
+Added: Term loan investment - Armata Term Loan
Convertible debt investment - Gate Note
22 unchanged sentences
The fair values of the warrants in Armata classified within Level 2 are based upon observable inputs that may include benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers, and reference data including market research publications.
−Removed: InCarda’s certain equity securities, the Gate Convertible Note, the Armata Convertible Note, private placement positions and convertible notes held by ISP Fund LP, and contingent value rights are classified as Level 3 financial instruments as these securities are not publicly traded and the assumptions used in the valuation model for valuing these securities are based on significant unobservable and observable inputs including those of publicly traded peer companies.
+Added: The InCarda warrants, the Gate Convertible Note, the Armata Convertible Note, the Armata Term Loan, private placement positions and convertible notes held by ISP Fund LP, and contingent value rights are classified as Level 3 financial instruments as these securities are not publicly traded and the assumptions used in the valuation model for valuing these securities are based on significant unobservable and observable inputs including those of publicly traded peer companies.
The fair values of our 2025 Notes and 2028 Notes are based on recent trading prices of the respective instruments.
2 unchanged sentences
Goodwill and intangible assets acquired are recognized at fair value as of the acquisition date.
−Removed: The carrying amount of goodwill as of June 30, 2023 and December 31, 2022 was $ 14.9 million and $ 26.7 million, respectively .
+Added: The carrying amount of goodwill as of September 30, 2023 and December 31, 2022 was $ 17.9 million and $ 26.7 million, respectively .
We have no t recognized any impairment losses related to goodwill during the periods presented.
Intangible assets with definite lives are amortized over their estimated useful lives.
−Removed: The carrying basis and accumulated amortization of recognized intangible assets as of June 30, 2023 and December 31, 2022 were as follows:
−Removed: June 30, 2023
+Added: The carrying basis and accumulated amortization of recognized intangible assets as of September 30, 2023 and December 31, 2022 were as follows:
+Added: September 30, 2023
(In thousands)
14 unchanged sentences
These are intangible assets with determinable lives and are amortized over their estimated useful lives.
−Removed: We recognized amortization expense of $ 5.0 million and $ 8.8 million for the three and six months ended June 30, 2023 , respectively.
+Added: We recognized amortization expense of $ 6.5 million and $ 15.3 million for the three and nine months ended September 30, 2023 , respectively.
+Added: We recognized amortization expense of $ 1.5 million for the three and nine months ended September 30, 2022 .
Future amortization expense is expected to be $ 6.5 million for the remainder of 2023, $ 25.8 million for each of the years from 2024 to 2027 and $ 124.5 million thereafter.
1 unchanged sentence
Inventory consisted of the following:
+Added: September 30,
(in thousands)
3 unchanged sentences
Total inventory
−Removed: As of June 30, 2023 and December 31, 2022, total inventory included net fair value adjustments resulting from the acquisition of La Jolla of approximately $ 36.4 million and 49.5 million, respectively , which will be amortized and recognized as cost
−Removed: of products sold when sales occur in future periods.
−Removed: The fair value adjustments recorded as part of cost of products sold amounted to $ 7.0 million and $ 13.8 million for the three and six months ended June 30, 2023, respectively.
+Added: As of September 30, 2023 and December 31, 2022, total inventory included net fair value adjustments resulting from the acquisition of La Jolla of approximately $ 31.0 million and $ 49.5 million, respectively , which will be amortized and recognized as cost of products sold when sales occur in future periods.
+Added: The fair value adjustments recorded as part of cost of products sold amounted to $ 5.4 million and $ 19.2 million for the three and nine months ended September 30, 2023 , respectively.
+Added: The fair value adjustments recorded as part of cost of products sold amounted to $ 2.7 million for the three and nine months ended September 30, 2022.
Other Accrued Liabilities
Other accrued liabilities consisted of the following:
+Added: September 30,
(in thousands)
9 unchanged sentences
Other long-term liabilities consisted of the following:
+Added: September 30,
(in thousands)
6 unchanged sentences
The following table summarizes stock-based compensation expense:
−Removed: Three Months Ended June 30,
−Removed: Six Months Ended June 30,
+Added: Three Months Ended September 30,
+Added: Nine Months Ended September 30,
(In thousands)
3 unchanged sentences
Black-Scholes-Merton assumptions used in calculating the estimated value of stock options granted by Innoviva on the date of grant were as follows:
−Removed: Three Months Ended June 30,
−Removed: Six Months Ended June 30,
+Added: Three Months Ended September 30,
+Added: Nine Months Ended September 30,
Risk-free interest rate
2 unchanged sentences
1.60 % - 3.03 %
−Removed: 1.6 % - 3.03 %
Expected term (in years)
7 unchanged sentences
$ 6.98 - $ 7.73
−Removed: $ 6.98 - $ 7.73
+Added: (1) There were no options granted for the three months ended September 30, 2022.
Stockholders' Equity
5 unchanged sentences
This program has no termination date, may be suspended or discontinued at any time at our discretion, and does not obligate us to acquire any amount of common stock.
−Removed: For the six months ended June 30, 2023 , we have repurchased 4,194,980 shares in the open market at an average price of $ 11.81 per share for a total amount of approximately $ 49.5 million.
+Added: For the nine months ended September 30, 2023 , we have repurchased 5,051,730 shares in the open market at an average price of $ 11.97 per share for a total amount of approximately $ 60.5 million.
All the repurchased shares were retired.
−Removed: Subsequent to June 30, 2023 and through July 26, 2023, we have repurchased 133,325 shares in the open market at an average price of $ 12.60 per share for a total amount of approximately $ 1.7 million.
+Added: Subsequent to September 30, 2023 and through October 26, 2023, we have repurchased 447,838 shares in the open market at an average price of $ 13.07 per share for a total amount of approximately $ 5.9 million.
Our debt consists of the following:
+Added: September 30,
(In thousands)
7 unchanged sentences
The following table sets forth total interest expense recognized related to the 2023 Notes:
−Removed: Three Months Ended June 30,
−Removed: Six Months Ended June 30,
+Added: Three Months Ended September 30,
+Added: Nine Months Ended September 30,
(In thousands)
21 unchanged sentences
Our outstanding 2025 Notes balances consisted of the following:
+Added: September 30,
(In thousands)
1 unchanged sentence
Net carrying amount
−Removed: The following table sets forth total interest expense recognized related to the 2025 Notes for the three and six months ended June 30, 2023 and 2022:
−Removed: Three Months Ended June 30,
−Removed: Six Months Ended June 30,
+Added: The following table sets forth total interest expense recognized related to the 2025 Notes for the three and nine months ended September 30, 2023 and 2022:
+Added: Three Months Ended September 30,
+Added: Nine Months Ended September 30,
(In thousands)
32 unchanged sentences
Our outstanding 2028 Notes balance consisted of the following:
+Added: September 30,
(In thousands)
1 unchanged sentence
Net carrying amount
−Removed: The following table sets forth total interest expense recognized related to the 2028 Notes for the three and six months ended June 30, 2023 and 2022:
−Removed: Three months ended June 30,
−Removed: Six months ended June 30,
+Added: The following table sets forth total interest expense recognized related to the 2028 Notes for the three and nine months ended September 30, 2023 and 2022:
+Added: Three months ended September 30,
+Added: Nine months ended September 30,
(In thousands)
3 unchanged sentences
Debt Maturities
−Removed: The aggregate scheduled maturities of our convertible debt as of June 30, 2023 were as follows:
+Added: The aggregate scheduled maturities of our convertible debt as of September 30, 2023 were as follows:
(In thousands)
−Removed: June 30, 2023
+Added: September 30, 2023
Years ending December 31:
7 unchanged sentences
The La Jolla Royalty Agreement is subject to maximum aggregate royalty payments to HCR of $ 225.0 million.
−Removed: For the three and six months ended June 30, 2023 , we recognized interest expense of $ 1.3 million and $ 2.5 million, respectively .
−Removed: The carrying value of the deferred royalty obligation as of June 30, 2023 was $ 70.4 million, $ 66.0 million of which was classified as part of other long-term liabilities and the remaining $ 4.4 mil lion was classified as other accrued liabilities in the condensed consolidated balance sheet.
+Added: For the three and nine months ended September 30, 2023 , we recognized interest expense of $ 1.2 million and $ 3.7 million, respectively .
+Added: For the three and nine months ended September 30, 2022 , we recognized interest expense of $ 1.5 million.
+Added: The carrying value of the deferred royalty obligation as of September 30, 2023 was $ 70.1 million, $ 66.1 million of which was classified as part of other long-term liabilities and the remaining $ 4.0 mil lion was classified as other accrued liabilities in the condensed consolidated balance sheet.
The carrying value of the deferred royalty obligation as of December 31, 2022 was $ 70.6 million, $ 67.9 million of which was classified as part of other long-term liabilities and the remaining $ 2.7 million was classified as other accrued liabilities in the condensed consolidated balance sheet.
−Removed: During the six months ended June 30, 2023 , we made royalty payments to HCR of $ 2.7 million.
−Removed: The deferred royalty obligation was valued using Level 3 inputs, and its carrying value as of June 30, 2023 approximates fair value.
+Added: During the nine months ended September 30, 2023 , we made royalty payments to HCR of $ 4.3 million.
+Added: The deferred royalty obligation was valued using Level 3 inputs, and its carrying value as of September 30, 2023 approximates fair value.
The fair value of the deferred royalty obligation was calculated as the discounted deferred royalty obligations based on risk-adjusted revenue projections for GIAPREZA ® .
1 unchanged sentence
Under the terms of the La Jolla Royalty Agreement, if we are unable to meet certain obligations, including the obligation to use commercially reasonable and diligent efforts to commercialize GIAPREZA ® , HCR would have the right to terminate the La Jolla Royalty Agreement and demand payment of either $ 125.0 million or $ 225.0 million (depending on which obligation we have failed to meet) less aggregate royalties already paid to HCR.
−Removed: As of June 30, 2023 , inclusive of the aggregate royalties paid to HCR by La Jolla under the La Jolla Royalty Agreement prior to our acquisition, La Jolla paid $ 15.4 million of aggregate royalties to HCR.
+Added: As of September 30, 2023 , inclusive of the aggregate royalties paid to HCR by La Jolla under the La Jolla Royalty Agreement prior to our acquisition, La Jolla paid $ 17.0 million of aggregate royalties to HCR.
In the event that we fail to pay such amount if and when due in a timely manner, HCR would have the right to foreclose on the GIAPREZA ® -related assets.
2 unchanged sentences
We determined the fair value of each derivative by assessing the probability of each event occurring, as well as the potential repayment amounts and timing of such repayments that would result under various scenarios.
−Removed: As a result of this assessment, we determined that the fair value of the embedded derivatives is immaterial and, therefore, not recognized as of June 30, 2023 and December 31, 2022.
+Added: As a result of this assessment, we determined that the fair value of the embedded derivatives is immaterial and, therefore, not recognized as of September 30, 2023 and December 31, 2022.
We estimate the fair value of the embedded derivatives for each reporting period until either the features lapse or the La Jolla Royalty Agreement is terminated, whichever occurs first.
4 unchanged sentences
The components of lease cost are as follows:
−Removed: Three Months Ended June 30,
−Removed: Six Months Ended June 30,
+Added: Three Months Ended September 30,
+Added: Nine months ended September 30,
(In thousands)
2 unchanged sentences
Total lease costs
−Removed: As of June 30, 2023, our operating leases have weighted-average remainin g term of approximately 2.7 years and the weighted average discount rate on our operating lease liabilities was 8.4 %.
−Removed: We have not presented the comparative information above as our operating lease in the first quarter of 2022 was not material.
−Removed: Future minimum payments on our operating leases as of June 30, 2023 were as follows:
+Added: Supplemental cash flow information related to leases are as follows:
+Added: Nine months ended September 30,
(In thousands)
+Added: Cash paid for amounts included in the measurement of operating lease liabilities:
+Added: Operating lease right-of-use assets obtained in exchange for operating lease obligations
+Added: Right-of-use assets obtained through acquisitions
+Added: As of September 30, 2023, our operating leases have weighted-average remainin g term of approximately 2.5 years and the weighted average discount rate on our operating lease liabilities was 7.5 %.
+Added: Future minimum payments on our operating leases as of September 30, 2023 were as follows:
+Added: (In thousands)
Years ending December 31:
17 unchanged sentences
We intend to vigorously enforce our intellectual property rights relating to GIAPREZA ® .
−Removed: Given the early stage of this matter, we cannot reasonably estimate a potential future loss or a range of potential future losses, if any, and have not recorded a contingent liability accrual as of June 30, 2023.
+Added: The parties have completed claim construction briefing, and a claim construction hearing is set for November 9, 2023.
+Added: Fact discovery is set to conclude on December 8, 2023 and expert discovery will be complete by April 19, 2024.
+Added: A trial date has not yet been set in this matter.
+Added: Given the early stage of this matter, we cannot reasonably estimate a potential future loss or a range of potential future losses, if any, and have not recorded a contingent liability accrual as of September 30, 2023.
Indemnification
4 unchanged sentences
To date, we have not incurred any material costs and have not accrued any material liabilities in the condensed consolidated financial statements as a result of these provisions.
−Removed: We recorded a provision for income tax expe nse of $ 4.5 million and $ 10.8 million f or the three and six months ended June 30, 2023 , respectively, compared to the recorded provision for income tax benefit of $ 0.9 million and for income tax expense of $ 6.0 million for the three and six months ended June 30, 2022, respectively.
−Removed: The Company’s effective income tax rate for the six months ended June 30, 2023 was 25.7 % compared to 4.3 % for the same period in 2022.
−Removed: The income tax expense for the six months ended June 30, 2023 and 2022 was determined based upon estimates of the Company’s effective income tax rates in various jurisdictions.
−Removed: Our effective tax rate for the six months ended June 30, 2023 included the U.S.
−Removed: federal statutory income tax rate and state income tax rates in different states.
+Added: We recorded a provision for income tax expe nse of $ 3.9 million and $ 14.7 million f or the three and nine months ended September 30, 2023 , respectively, compared to the recorded provision for income tax expense of $ 57.1 million and $ 63.1 million for the three and nine months ended September 30, 2022, respectively.
+Added: The Company’s effective income tax rate for the nine months ended September 30, 2023 was 10.6 % compared to 18.3 % for the same period in 2022.
+Added: The income tax expense for the nine months ended September 30, 2023 and 2022 was determined based upon estimates of the Company’s effective income tax rates in various jurisdictions.
+Added: Our effective tax rate for the nine months ended September 30, 2023 was lower than the U.S.
+Added: federal statutory income tax rate due primarily to non-deductible expenses.
Subsequent Events
−Removed: On July 10, 2023, ISO and Armata entered into a Credit and Security Agreement, under which we extended a term loan to Armata (the “Credit and Security Agreement”) in an aggregate amount of $ 25.0 million.
−Removed: The term loan is subject to an interest rate of 14 % per annum and is due to mature on January 10, 2025 .
−Removed: The Credit and Security Agreement is secured by substantially all of the assets of Armata and its domestic and foreign material subsidiaries.
−Removed: On July 10, 2023, ISO and Armata also executed an amendment to the Armata Convertible Note, discussed in Note 6 “Equity and Long-term Investments and Fair Value Measurements”, extending the maturity date from January 10, 2024 to January 10, 2025.
−Removed: In addition, Armata entered an amendment to the second amended and restated voting agreement dated February 9, 2022 with the Company and ISO, pursuant to which the Company and ISO agreed not to vote or take any action by written consent with respect to any common shares held by the Company and ISO that represent, in the aggregate, more than 49.5 % of the total number of shares of Armata’s common stock for voting on the matters related to election or removal of Armata’s board members, amend the bylaws of Armata to reduce the maximum number of directors, or set the number of directors who may serve on the board of Armata.
−Removed: The voting agreement will expire on the earlier of the fifth anniversary of the original agreement effective date, January 26, 2021, or the approval by the FDA of any of Armata’s product candidates for marketing and commercial distribution.
+Added: On October 6, 2023, ITH entered into a Second Note Amendment Agreement (the “Second Note Amendment Agreement”) with Gate to amend the Gate Convertible Note.
+Added: Pursuant to the Second Note Amendment Agreement, the principal amount of the Gate Convertible Note was increased from $ 21.5 million to $ 27.7 million, which represents the principal and accrued interest as of the amendment date and an additional cash investment of $ 5.0 million.
+Added: All other material terms of the Gate Convertible Note were unchanged.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
59 unchanged sentences
Our commercial and marketed products include GIAPREZA ® (angiotensin II), approved to increase blood pressure in adults with septic or other distributive shock, and XERAVA ® (eravacycline) approved for the treatment of complicated intra-abdominal infections in adults.
−Removed: Our lead product candidate, XACDURO ® (formerly known as sulbactam-durlobactam or SUL-DUR), was approved by the United States Food and Drug Administration (“FDA”) on May 23, 2023 and we expect to commence commercial sales of the product later in 2023.
+Added: Our new product, XACDURO ® (formerly known as sulbactam-durlobactam or SUL-DUR), was approved by the United States Food and Drug Administration (“FDA”) on May 23, 2023 and we commenced commercial sales of XACDURO ® in the third quarter of 2023.
Our development pipeline includes medicines for the treatment of bacterial infections.
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In particular, our recent acquisitions of Entasis and La Jolla created a robust hospital and infectious disease platform.
−Removed: Second Quarter 2023 and Recent Highlights:
+Added: Third Quarter 2023 and Recent Highlights:
GSK Net Sales
−Removed: Second quarter 2023 net sales of RELVAR ® /BREO ® ELLIPTA ® by GSK were $363.0 million with $149.8 million in net sales from the U.S.
+Added: Third quarter 2023 net sales of RELVAR ® /BREO ® ELLIPTA ® by GSK were $303.9 million with $109.5 million in net sales from the U.S.
market and $194.4 million from non-U.S.
−Removed: Second quarter 2023 net sales of ANORO ® ELLIPTA ® by GSK were $173.3 million with $85.5 million net sales from the U.S.
+Added: Third quarter 2023 net sales of ANORO ® ELLIPTA ® by GSK were $175.8 million with $89.2 million net sales from the U.S.
market and $86.6 million from non-U.S.
Corporate Updates
−Removed: During the second quarter of 2023, Innoviva repurchased 775,504 shares of its outstanding common stock for $9.2 million.
+Added: During the third quarter of 2023, Innoviva repurchased 856,750 shares of its outstanding common stock for $11.0 million.
On July 10, 2023, Innoviva’s wholly owned subsidiary, Innoviva Strategic Opportunities, entered into a credit and security agreement with Armata Pharmaceuticals, Inc.
−Removed: ARMP) (“Armata”) and invested $25.0 million to advance Armata’s pipeline of therapeutic phage candidates and support the build-out of its state-of-the art cGMP manufacturing facility.
−Removed: On July 11, 2023, Innoviva director, Deborah Birx, resigned from Innoviva Board and joined Armata as Chief Executive Officer.
+Added: ARMP) (“Armata”) and invested $25.0 million to advance Armata’s pipeline of therapeutic phage candidates and support the buildout of its state-of-the art cGMP manufacturing facility.
+Added: On August 21, 2023, Innoviva appointed Stephen Basso as Chief Financial Officer.
Clinical Updates
−Removed: On May 23, 2023, Innoviva’s wholly owned subsidiary, Innoviva Specialty Therapeutics, received FDA’s approval of XACDURO ® (sulbactam for injection;
+Added: In September 2023, Innoviva’s wholly owned subsidiary, Innoviva Specialty Therapeutics, launched XACDURO ® (sulbactam for injection;
durlobactam for injection), co-packaged for intravenous use in patients 18 years of age and older for the treatment of hospital-acquired bacterial pneumonia and ventilator-associated bacterial pneumonia (HABP/VABP) caused by susceptible isolates of Acinetobacter baumannii-calcoaceticus complex ( Acinetobacter ).
−Removed: The company is preparing to launch XACDURO ® later this year.
−Removed: Recruitment is now complete in the registrational Phase 3 Zoliflodacin study.
−Removed: Oral Zoliflodacin is a novel, first-in-class oral antibiotic in development for the treatment of uncomplicated gonorrhea infection.
−Removed: Top-line results for this ongoing Phase 3 trial are expected in late 2023.
+Added: XACDURO ® is the first and only pathogen-targeted antibiotic and a significant advancement in the way healthcare professionals treat Acinetobacter.
+Added: In November 2023, in collaboration with The Global Antibiotic Research & Development Partnership (GARDP), we announced that zoliflodacin, a first-in-class antibiotic, met its primary endpoint in a global pivotal phase 3 clinical trial for the treatment of uncomplicated gonorrhea, a prevalent disease affecting over 80 million patients a year globally with rapidly rising antimicrobial resistance concerns.
+Added: Study investigators found that oral zoliflodacin demonstrated statistical non-inferiority of microbiological cure at the urogenital site when compared to treatment with intramuscular injection of ceftriaxone and oral azithromycin, a current global standard of care regimen.
+Added: In the study, zoliflodacin demonstrated a
+Added: favorable safety profile and was generally well tolerated, with the majority of adverse events being mild-to-moderate.
+Added: There were no discontinuations reported due to adverse events, serious adverse events, or deaths.
Collaboration Arrangement with GSK
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Three Months Ended
−Removed: Six Months Ended
+Added: September 30,
+Added: Nine Months Ended
+Added: September 30,
(In thousands)
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*Not Meaningful
−Removed: Total net royalty revenue decreased to $62.3 million and $119.1 million for the three and six months ended June 30, 2023, compared to $108.2 million and $198.3 million, respectively, for the same period a year ago.
+Added: Total net royalty revenue decreased to $53.6 million and $172.7 million for the three and nine months ended September 30, 2023, compared to $62.2 million and $260.4 million, respectively, for the same period a year ago.
The decrease of total net royalty revenue was primarily due to the sale of our ownership interest in TRC, which received royalties stemming from sales of TRELEGY ® ELLIPTA ® in 2022.
Net Product Sales
−Removed: Net product sales recognized for the three months ended June 30, 2023 was $15.7 million, consisting of net sales of GIAPREZA ® and XERAVA ® for $11.2 million and $4.5 million, respectively.
−Removed: Net product sales recognized for the six months ended June 30, 2023 was $27.2 million, consisting of net sales of GIAPREZA ® and XERAVA ® for $20.2 million and $7.0 million, respectively.
+Added: Net product sales recognized for the three months ended September 30, 2023 was $13.7 million, consisting of net sales of GIAPREZA ® , XERAVA ® , and XACDURO ® for $8.0 million, $5.1 million, and $0.6 million, respectively.
+Added: Net product sales recognized for the nine months ended September 30, 2023 was $40.9 million, consisting of net sales of GIAPREZA ® , XERAVA ® and XACDURO® for $28.2 million, $12.1 million and $0.6 million, respectively.
+Added: For the comparative periods in 2022, our net product sales amounted to $5.1 million, consisting of $3.8 million in net sales of GIAPREZA ® and $1.3 million in net sales of XERAVA ® .
+Added: These sales were recognized from the date of our acquisition of La Jolla, which took place on August 22, 2022, through September 30, 2022.
License Revenue
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−Removed: Six Months Ended
+Added: September 30,
+Added: Nine Months Ended
+Added: September 30,
(In thousands)
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−Removed: Six Months Ended
+Added: September 30,
+Added: Nine Months Ended
+Added: September 30,
(in thousands)
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Research and development expenses, which are mainly attributable to Entasis’
−Removed: product development efforts for XACDURO ® , were $15.0 million and $27.6 million, for the three and six months ended June 30, 2023, respectively.
−Removed: Research and development expenses for the three and six months ended June 30, 2022 were attributable to the product development efforts of Entasis from February 17, 2022.
+Added: product development efforts for XACDURO ® , were $4.0 million and $31.6 million, for the three and nine months ended September 30, 2023, respectively.
+Added: Research and development expenses for the three and nine months ended September 30, 2022 were attributable to the product development efforts of Entasis from February 17, 2022.
+Added: Research and development expenses for the three months ended September 30, 2023 decreased compared to the same period in 2022.
+Added: The decrease was primarily a result of the FDA approval of XACDURO ® in May 2023 and personnel transfers from the research development function to general and administrative function after the FDA approval.
Selling, General & Administrative
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−Removed: Six Months Ended
+Added: September 30,
+Added: Nine Months Ended
+Added: September 30,
(In thousands)
Selling, general and administrative
−Removed: Selling, general and administrative expenses increased for the three and six months ended June 30, 2023, compared to the same period in 2022 mainly due to the acquisition of Entasis and La Jolla in 2022.
+Added: Selling, general and administrative expenses increased for the three and nine months ended September 30, 2023, compared to the same period in 2022 mainly due to the personnel transfers from the research development function to general and administrative function after the FDA approval of XACDURO ® .
Interest and dividend income and other expense, net
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−Removed: Six Months Ended
+Added: September 30,
+Added: Nine Months Ended
+Added: September 30,
(In thousands)
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*Not Meaningful
−Removed: Interest and dividend income increased for the three and six months ended June 30, 2023, compared to the same periods a year ago due to higher interest rates and higher average balances of our cash equivalents, money market funds and other interest-bearing investments.
+Added: Interest and dividend income increased for the three and nine months ended September 30, 2023, compared to the same periods a year ago due to higher interest rates and higher average balances of our cash equivalents, money market funds and other interest-bearing investments.
Other expense, net, was primarily expenses incurred by ISP Fund LP.
+Added: Other expense, net during the nine months ended September 30, 2022 was partially offset by grant income of $1.3 million.
Interest Expense
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−Removed: Six Months Ended
+Added: September 30,
+Added: Nine Months Ended
+Added: September 30,
(In thousands)
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The interest expense included the contractual interest expense and the amortization of debt issuance costs for our 2023 Notes, 2025 Notes and 2028 Notes, as well as effective interest expense on our deferred royalty obligation.
−Removed: Interest expense for the six months ended June 30, 2023 included the amount on the 2023 Notes until the notes were fully paid off on January 15, 2023.
−Removed: Interest expense for the three and six months ended June 30, 2022 included the amount on the 2028 Notes from March 7, 2022, the date of issuance, through June 30, 2022.
−Removed: The increase for the three and six months ended June 30, 2023, compared to the three and six months ended June 30, 2022, was mainly due to interest expense on our deferred royalty obligation and a higher average debt balance.
+Added: Interest expense for the nine months ended September 30, 2023 included the amount on the 2023 Notes until the notes were fully paid off on January 15, 2023.
+Added: Interest expense for the three and nine months ended September 30, 2022 included the amount on the 2028 Notes from March 7, 2022, the date of issuance, through September 30, 2022.
+Added: The increase for the nine months ended September 30, 2023, compared to the nine months ended September 30, 222, was mainly due to interest expense on our deferred royalty obligation and a higher average debt balance.
+Added: Interest expense for the three months ended September 30, 2022 was higher compared to the three months ended September 30, 2023 primarily due to interest expense on our 2023 Notes which matured and were fully paid in January 2023.
Loss on Debt Extinguishment
We recognized a loss of $20.7 million due to the total premium payment of $20.4 million and the write-off of $0.3 million debt issuance costs in connection with the repurchase of $144.8 million aggregate principal amount of our 2023 Notes in March 2022.
+Added: Gain on Sale of TRC
+Added: We recognized a net gain of $266.7 million due to the sale of our ownership interest in TRC to Royalty Pharma, consummated on July 20, 2022.
Changes in Fair Values of Equity Method Investments and Equity and Long-Term Investments
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−Removed: Six Months Ended
+Added: September 30,
+Added: Nine Months Ended
+Added: September 30,
(In thousands)
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*Not Meaningful
−Removed: The changes in fair values of equity method investments for the three and six months ended June 30, 2023 posted losses mainly due to Armata's lower stock prices in 2023.
−Removed: The changes in fair values of other equity and long-term investments primarily reflected the realized gains and losses and net unrealized gains and losses in our strategic investments in InCarda, Gate, and those investments managed by ISP Fund LP.
+Added: The changes in fair values of equity method investments for the three and nine months ended September 30, 2023 were more favorable mainly due to Armata's higher stock prices during this period.
+Added: We recorded $72.0 million and $67.9 million in unrealized gain for the three and nine months ended September 30, 2023, respectively, related to our equity method investments in Armata.
+Added: During the three and nine months ended September 30, 2022, we recorded $11.7 million unrealized gain and $35.3 million unrealized loss, respectively, related to our equity method investments in Armata.
+Added: The changes in fair values of other equity and long-term investments primarily reflected the realized gains and losses and net unrealized gains and losses in our strategic investments in Armata, InCarda, Gate, and those investments managed by ISP Fund LP.
+Added: We recorded $19.6 million and $20.7 million in unrealized gain for the three and nine months ended September 30, 2023, respectively, related to other long-term investments we made in Armata in 2023.
Provision for Income Taxes
−Removed: We recorded a provision for income tax expense of $4.5 million and $10.8 million for the three and six months ended June 30, 2023, compared to a provision for income tax benefit of $0.9 million and for income tax expense of $6.0 million for the three and six months ended June 30, 2022, respectively.
−Removed: The effective income tax rate for the six months ended June 30, 2023 and 2022 was 25.7% and 4.3%, respectively.
−Removed: Net Income Attributable to Noncontrolling Interest
−Removed: Net income attributable to noncontrolling interest represents $28.3 million and $53.4 million for the three and six months ended June 30, 2022, respectively, for the 85% share of net income in TRC for Theravance Biopharma and $7.9 million and $10.9 million for the three and six months ended June 30, 2022, respectively, for the 40% share of net loss in Entasis.
+Added: We recorded a provision for income tax expense of $3.9 million and $14.7 million for the three and nine months ended September 30, 2023, compared to a provision for income tax benefit of $57.1 million and for income tax expense of $63.1 million for the three and nine months ended September 30, 2022, respectively.
+Added: The effective income tax rate for the nine months ended September 30, 2023 and 2022 was 10.6% and 18.3%, respectively.
+Added: Net Income (Loss) Attributable to Noncontrolling Interest
+Added: Net income (loss) attributable to noncontrolling interest represents $(33.5) million and $19.9 million for the three and nine months ended September 30, 2022, respectively, for the 85% share of net income (loss) in TRC for Theravance Biopharma and $(2.7) million and $(13.6) million for the three and nine months ended September 30, 2022, respectively, for the 40% share of net loss in Entasis.
There is no noncontrolling interest in any of our subsidiaries in 2023.
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Since our inception, we have financed our operations primarily through private placements and public offerings of equity and debt securities and payments received under collaboration arrangement.
−Removed: For the six months ended June 30, 2023, we generated gross royalty revenues from GSK of $126.0 million, net product sales of $27.2 million and license revenue of $11.0 million.
−Removed: Net cash and cash equivalents totaled $173.0 million, royalties receivables from GSK totaled $65.7 million and accounts receivable associated with our product sales and license revenue totaled $15.3 million as of June 30, 2023.
+Added: For the nine months ended September 30, 2023, we generated gross royalty revenues from GSK of $183.0 million, net product sales of $40.9 million and license revenue of $11.0 million.
+Added: Net cash and cash equivalents totaled $180.0 million, royalties receivables from GSK totaled $57.0 million and accounts receivable associated with our product sales totaled $10.8 million as of September 30, 2023.
Adequacy of Cash Resources to Meet Future Needs
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Cash flows, as compared to the prior year period, were as follows:
−Removed: Six Months Ended June 30,
+Added: Nine Months Ended September 30,
(In thousands)
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Net cash used in investing activities
−Removed: Net cash (used in) provided by financing activities
+Added: Net cash used in financing activities
Cash Flows from Operating Activities
−Removed: Net cash provided by operating activities for the six months ended June 30, 2023 was $63.9 million, consisting primarily of our net income of $36.1 million, adjusted for net non-cash items, which included $13.8 million of amortization of inventory fair value step-up adjustment, $8.8 million of amortization of acquired intangible assets, $7.0 million of amortization of capital fees and depreciation of property and equipment, $6.3 million of net changes in fair value of our investments, partially offset by decreases of $11.0 million in receivables from collaboration arrangement and $4.7 million in inventory.
−Removed: Net cash provided by operating activities for the six months ended June 30, 2022 was $177.1 million, consisting primarily of our net income of $59.2 million, adjusted for net non-cash items such as $6.0 million of deferred income tax, $7.1 million of depreciation and amortization, $20.7 million of loss on extinguishment of debt, and $68.0 million decrease in the fair value of our equity and long-term investments, offset by $6.9 million of accrued personnel-related expenses and other accrued liabilities, $3.0 million of prepaid expenses and $2.7 million of accounts payable.
+Added: Net cash provided by operating activities for the nine months ended September 30, 2023 was $107.8 million, consisting primarily of our net income of $118.2 million, adjusted for net non-cash items, which included $19.2 million of amortization of inventory fair value step-up adjustment, $10.4 million of amortization of capital fees and depreciation of property and equipment, $15.3 million of amortization of acquired intangible assets, partially offset by $63.0 million of net changes in fair value of our investments and $5.0 million net changes in operating assets and liabilities.
+Added: Net cash provided by operating activities for the nine months ended September 30, 2022 was $192.8 million, consisting primarily of our net income of $288.6 million, adjusted for net non-cash items, which included a net gain of $266.7 million on the sale of TRC.
+Added: Other non-cash items included $29.3 million of deferred income tax, $12.5 million of depreciation and amortization, $20.7 million of loss on extinguishment of debt, and $66.4 million decrease in the fair value of our equity and long-term investments.
+Added: Net non-cash items were partially offset by increases of $3.6 million in other assets, non-current and $0.9 million in accounts receivable and decreases of $1.9 million in accrued interest payable and $1.7 million in accrued personnel-related expenses and other accrued liabilities.
Cash Flows from Investing Activities
−Removed: Net cash used in investing activities for the six months ended June 30, 2023 of $35.7 million primarily consisted of $35.7 million in purchases of equity and long-term investments and $17.8 million in purchases of equity investments managed by ISP Fund LP.
−Removed: The use of cash for investing activities was partially offset by net proceeds of $15.3 million from the purchases and sales of other investments managed by ISP Fund LP.
−Removed: Net cash used in investing activities for the six months ended June 30, 2022 of $145.7 million was primarily due to $38.0 million of purchases of equity investments managed by ISP Fund LP, $96.3 million of purchases and sales of other investments managed by ISP Fund LP, net, and $58.7 million investments in Armata, InCarda, and Nanolive, partially offset by $24.3 million of sales of equity investments managed by ISP Fund LP and $23.1 million of cash acquired through the consolidation of Entasis.
+Added: Net cash used in investing activities for the nine months ended September 30, 2023 of $61.6 million primarily consisted of $60.1 million in purchases of trading securities, $1.2 million in purchases of equity and long-term investments, $24.9 million in purchases of equity investments managed by ISP Fund LP, and $14.7 million from purchase and sales of other investments managed by ISP Fund LP.
+Added: The use of cash for investing activities was partially offset by net proceeds of $39.6 million from the sales of equity investments managed by ISP Fund LP.
+Added: Net cash used in investing activities for the nine months ended September 30, 2022 of $48.0 million primarily consisted of $150.5 million of cash used for the acquisition of La Jolla, $93.0 million in purchases of equity investments managed by ISP Fund LP, $41.3 million in purchases and sales of other investments managed by ISP Fund LP and $58.7 million in purchases of equity and long-term investments.
+Added: The use of cash for investing activities was partially offset by net proceeds of $248.2 million from the sale of our ownership interest of TRC, $24.3 million from the sale of equity investments managed by ISP Fund LP and $23.1 million of cash acquired through the consolidation of Entasis.
Cash Flows from Financing Activities
−Removed: Net cash used in financing activities for the six months ended June 30, 2023 of $146.2 million was primarily due to the payments of $96.2 million upon maturity of the 2023 Notes in January 2023 and $50.0 million for the repurchase of common stock under our current stock repurchase program.
−Removed: Net cash provided by financing activities for the six months ended June 30, 2022 of $50.6 million was primarily due to the net proceeds of $252.5 million from the issuance of the convertible senior notes due in 2028, net of issuance costs, offset with $21.0 million purchase of capped call options associated with the 2028 Notes, $165.1 million for the repurchase of the 2023 Notes, and $16.1 million distributions to noncontrolling interest.
+Added: Net cash used in financing activities for the nine months ended September 30, 2023 of $157.3 million was primarily due to the payments of $96.2 million upon maturity of the 2023 Notes in January 2023 and $61.1 million for the repurchase of common stock under our current stock repurchase program.
+Added: Net cash used in financing activities for the nine months ended September 30, 2022 of $45.6 million was primarily due to a payment of $165.1 million for the repurchase of the 2023 Notes and $21.0 million for the purchases of capped call options associated with the 2028 Notes, $69.8 million in distributions to noncontrolling interests and $42.4 million for the purchase of Entasis’
+Added: minority interest.
+Added: The use of cash for financing activities was partially offset by $252.5 million in net proceeds from the issuance of the convertible senior notes due 2028.
Contractual Obligations
−Removed: As of June 30, 2023, our notes payable obligation included $192.5 million related to our 2025 Notes and $261.0 million related to our 2028 Notes, which are due in 2025 and 2028, respectively.
+Added: As of September 30, 2023, our notes payable obligation included $192.5 million related to our 2025 Notes and $261.0 million related to our 2028 Notes, which are due in 2025 and 2028, respectively.
Under the terms of the 2025 Notes and 2028 Notes, we will make interest payments of 2.5% and 2.125%, respectively, of outstanding principal.
Refer to Note 11, “Debt”
−Removed: to the Consolidated Financial Statements for more information.
−Removed: Our short-term and long-term obligations also include contractual payments related to our operating leases were $3.7 million, with approximately $0.8 million payable through December 31, 2023 and approximately $1.3 million payable in each of the years 2024 and 2025.
+Added: to the Condensed Consolidated Financial Statements for more information.
+Added: Our short-term and long-term obligations also include contractual payments related to our operating leases were $3.5 million, with approximately $0.4 million payable through December 31, 2023, approximately $1.4 million payable in each of the years 2024 and 2025, and $0.3 million thereafter.
Refer to Note 12, “Commitments and Contingencies”
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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.