3 unchanged sentences
(In thousands, except per share data)
+Added: September 30,
Current assets:
33 unchanged sentences
74,769 and 62,665 issued and outstanding as of
−Removed: June 30, 2025 and December 31, 2024, respectively
+Added: September 30, 2025 and December 31, 2024, respectively
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 paid of $ 3,456 in the
−Removed: three months ended June 30, 2025
−Removed: and 2024, and $ 6,912 in the six months
−Removed: ended June 30, 2025 and 2024
+Added: three months ended September 30, 2025
+Added: and 2024, and $ 10,368 in the nine months
+Added: ended September 30, 2025 and 2024
Net product sales
16 unchanged sentences
Other expense, net
−Removed: Income (loss) before income taxes
−Removed: Income tax benefit (expense), net
−Removed: Net income (loss) and comprehensive
−Removed: income (loss)
−Removed: Net income (loss) per share:
−Removed: Shares used to compute net income (loss) per share:
+Added: Income before income taxes
+Added: Income tax expense, net
+Added: Net income and comprehensive income
+Added: Net income per share:
+Added: Shares used to compute net income per share:
See accompanying notes to condensed consolidated financial statements.
2 unchanged sentences
(In thousands)
−Removed: Six Months Ended June 30, 2025
+Added: Nine Months Ended September 30, 2025
Stockholders’
18 unchanged sentences
Balance as of June 30, 2025
−Removed: Six Months Ended June 30, 2024
+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: Conversion of 2025 Notes to common stock
+Added: Exercise of warrants
+Added: Balance as of September 30, 2025
+Added: Nine Months Ended September 30, 2024
Retained Earnings
18 unchanged sentences
Balance as of June 30, 2024
+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, 2024
See accompanying notes to condensed consolidated financial statements.
2 unchanged sentences
(In thousands)
−Removed: Six Months Ended June 30,
+Added: Nine Months Ended September 30,
Cash flows from operating activities
8 unchanged sentences
Changes in fair values of equity and long-term investments, net
+Added: Acquired in-process research and development assets
Other non-cash items
15 unchanged sentences
Purchases and sales of other investments managed by ISP Fund LP, net
+Added: Purchases of property and equipment
+Added: Cash paid for in-process research and development assets acquired
Sale of property and equipment
−Removed: Net cash used in investing activities
+Added: Net cash provided by (used in) investing activities
Cash flows from financing activities
2 unchanged sentences
Proceeds from issuances of common stock, net
+Added: Proceeds from exercise of warrants
+Added: Payment for repurchase of convertible subordinated notes due 2025
Net cash provided by (used in) financing activities
2 unchanged sentences
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:
49 unchanged sentences
These programs could be adversely affected by significant interruption in the supply of API or drug products.
−Removed: Currently, we derive most of our revenues from GSK.
+Added: Currently, we derive the majority of our revenues from GSK.
Our near-term success depends in large part upon the performance by GSK of its commercial obligations under the GSK Agreements and the commercial success of RELVAR ® /BREO ® ELLIPTA ® and ANORO ® ELLIPTA ® .
6 unchanged sentences
We do not believe that the loss of any one of these distributors would significantly impact our ability to distribute our products, as we expect that the sales volume would be absorbed by either new or remaining distributors.
−Removed: Three of our customers each account for 26 %, 26 % and 24 %, respecti vely, of our net product sales for the three months ended June 30, 2025 , and 27 %, 26 % and 25 %, respectively for the six months ended June 30, 2025.
−Removed: These same customers account for 33 %, 14 % and 14 %, respectively, of our receivables from net product sales, which are included in “Accounts receivable” in our unaudited condensed consolidated balance sheet as of June 30, 2025 .
−Removed: Three of our customers each account for 32 %, 23 % and 27 %, respectively, of our net product sales for the three months ended June 30, 2024, and 34 %, 24 % and 25 % for the six months ended June 30, 2024.
+Added: Three of our customers each account fo r 21 %, 20 % and 19 %, respectively, of our net product sales for the three months ended September 30, 2025 , and 24 %, 24 % and 22 %, respectively for the nine months ended September 30, 2025.
+Added: These same customers account for 15 %, 26 % and 15 %, respectiv ely, of our receivables from net product sales, which are included in “Accounts receivable” in our unaudited condensed consolidated balance sheet as of September 30, 2025.
+Added: Three of our customers each account for 27 %, 21 % and 20 %, respectively, of our net product sales for the three months ended September 30, 2024, and 31 %, 23 % and 23 % for the nine months ended September 30, 2024.
These same customers account for 31 %, 18 % and 15 %, respectively, of our receivables from net product sales, which are included in “Accounts receivable” in our condensed consolidated balance sheet as of December 31, 2024.
5 unchanged sentences
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 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.
9 unchanged sentences
Significant judgment may be involved in determining if an indicator of impairment has occurred.
+Added: Asset Acquisitions
+Added: We measure and recognize asset acquisitions that are not deemed to be business combinations based on the cost to acquire the assets, which includes direct transaction costs.
+Added: Goodwill is not recognized in asset acquisitions.
+Added: In an asset acquisition, the cost of the acquisition is allocated to the assets acquired on the basis of their relative fair values.
+Added: The cost allocated to acquire in-process research and development (“IPR&D”) with no alternative future use is charged to research and development expense at the acquisition date.
Equity and Long-Term Investments
10 unchanged sentences
In October 2024, we elected to unwind our capital accounts in the partnership in accordance with the terms of the Partnership Agreement and expect to receive distributions through April 2026.
−Removed: Accordingly, the portion of the cash balance and money market funds expected to be distributed within 12 months from the balance sheet date has been classified as “Current portion of ISP Fund investments,” while the remaining equity investments have been classified as long-term investments in the condensed consolidated balance sheets as of June 30, 2025 and December 31, 2024.
+Added: Accordingly, the portion of the cash balance and money market funds expected to be distributed within 12 months from the balance sheet date has been classified as “Current portion of ISP Fund investments,” while the remaining equity investments have been classified as long-term investments in the condensed consolidated balance sheets as of September 30, 2025 and December 31, 2024.
Revenue Recognition
59 unchanged sentences
We are currently evaluating the potential impact that ASU 2024-04 may have on our financial statements and related disclosures.
−Removed: Net Income (Loss) Per Share
−Removed: Basic net income (loss) per share is computed by dividing net income by the weighted-average number of shares of common stock outstanding.
+Added: In July 2025, the FASB issued ASU 2025-05, Financial Instruments — Credit Losses (Topic 326):
+Added: Measurement of Credit Losses for Current Accounts Receivable and Contract Assets , which provides a practical expedient for estimating expected credit losses by assuming current conditions remain unchanged over the life of the asset.
+Added: We are currently evaluating the potential impact that ASU 2025-05 may have on our estimation methodologies.
+Added: Net Income Per Share
+Added: Basic net income per share is computed by dividing net income by the weighted-average number of shares of common stock outstanding.
Diluted net income per share is computed by dividing net income by the weighted-average number of shares of common stock and dilutive potential common stock equivalents then outstanding.
1 unchanged sentence
If in a net loss position, diluted net loss per share is computed by dividing the net loss by the weighted-average number of shares of common stock outstanding for the period, without consideration for dilutive potential common stock equivalents.
−Removed: The following table shows the computation of basic and diluted net income (loss) per share for the three and six months ended June 30, 2025 and 2024:
−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, 2025 and 2024:
+Added: Three Months Ended September 30,
+Added: Nine Months Ended September 30,
(In thousands except per share data)
−Removed: Net income (loss), basic
+Added: Net income, basic
interest expense on 2025 Notes, net of tax effect
interest expense on 2028 Notes, net of tax effect
−Removed: Net income (loss), diluted
+Added: Net income, diluted
Weighted-average shares used to compute basic
−Removed: net income (loss) per share
+Added: net income per share
Dilutive effect of 2025 Notes
4 unchanged sentences
Weighted-average shares used to compute diluted
−Removed: net income (loss) per share
−Removed: Net income (loss) per share
+Added: net income per share
+Added: Net income per share
Anti-Dilutive Securities
−Removed: The following common stock equivalents were not included in the computation of diluted net income (loss) 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: 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:
+Added: Three Months Ended September 30,
+Added: Nine Months Ended September 30,
(In thousands)
7 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)
5 unchanged sentences
Total net product sales 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,
(In thousands)
2 unchanged sentences
and the rest of world as follows:
−Removed: • approximately 82 % and 18 %, respectively, for the three months ended June 30, 2025, and 84 % and 16 %, respectively, for the six months ended June 30, 2025.
−Removed: • approximately 87 % and 13 %, respectively, for the three months ended June 30, 2024, and 89 % and 11 %, respectively, for the six months ended June 30, 2024.
+Added: • approximately 63 % and 37 %, respectively, for the three months ended September 30, 2025, and 75 % and 25 %, respectively, for the nine months ended September 30, 2025.
+Added: • approxim ately 71 % and 29 %, respectively, for the three months ended September 30, 2024, and 82 % and 18 %, respectively, for the nine months ended September 30, 2024.
License Revenue
5 unchanged sentences
ZLAB), pursuant to which Zai Lab licensed exclusive rights to durlobactam and SUL-DUR, in the Asia-Pacific region (“the Zai Agreement”).
−Removed: Under the terms of the Zai Agreement, Zai Lab will fund most of the registrational clinical trial costs in China for SUL-DUR, with the exception of Phase 3 patient drug supply of licensed products.
−Removed: Zai Lab will conduct development activities and plan and obtain regulatory approval in a specified number of countries in the Asia-Pacific region beyond China after receipt of regulatory approval of a licensed product in China.
−Removed: Zai Lab is also solely responsible for commercializing licensed products in the Asia-Pacific region and will commercialize licensed products for which it has obtained regulatory approval.
+Added: Under the terms of the Zai Agreement, Zai Lab shall fund most of the registrational clinical trial costs in China for SUL-DUR, with the exception of Phase 3 patient drug supply of licensed products.
+Added: Zai Lab shall conduct development activities and plan and obtain regulatory approval in a specified number of countries in the Asia-Pacific region beyond China after receipt of regulatory approval of a licensed product in China.
+Added: Zai Lab is also solely responsible for commercializing licensed products in the Asia-Pacific region and shall commercialize licensed products for which it has obtained regulatory approval.
We are obligated to supply Zai Lab with the licensed products for clinical development and for commercial use for a certain period unless Zai Lab notifies otherwise.
1 unchanged sentence
We are eligible to receive up to an aggregate of $ 91.0 million in research and development support payments and development, regulatory and sales milestone payments related to SUL-DUR, imipenem and other combinations with the licensed products.
−Removed: Zai Lab will pay us a tiered royalty equal to from a high-single digit to low-double digit percentage based on annual net sales of licensed products in the territory, subject to specified reductions for the market entry of competing products, loss of patent coverage of licensed products and for payments owed to third parties for additional rights necessary to commercialize licensed products in the territory.
+Added: Zai Lab shall pay us a tiered royalty equal to from a high-single digit to low-double digit percentage based on annual net sales of licensed products in the territory, subject to specified reductions for the market entry of competing products, loss of patent coverage of licensed products and for payments owed to third parties for additional rights necessary to commercialize licensed products in the territory.
Payments received for research support and reimbursable clinical trial costs are recorded as a reduction to research and development expense during the period in which the qualifying expenses are incurred.
−Removed: Such amounts recorded for the three and six months ended June 30, 2025 and 2024 were not material.
+Added: Such amounts recorded for the three and nine months ended September 30, 2025 and 2024 were not material.
SUL-DUR was approved by China’s National Medical Products Administration in May 2024 and was launched by Zai Lab in mainland China in January 2025.
−Removed: Royalties under this arrangement based on the product sales were $ 0.6 million and $ 1.1 million for the three and six months ended June 30, 2025 , respectively.
−Removed: We recognized $ 8.0 million in license revenue for the three and six months ended June 30, 2024 under this agreement as a result of the achievement of a regulatory milestone.
+Added: Royalties under this arrangement based on the product sales were $ 0.4 million and $ 1.5 million for the three and nine months ended September 30, 2025 , respectively.
+Added: We recognized $ 8.0 million in license revenue for the nine months ended September 30, 2024 under this agreement as a result of the achievement of a regulatory milestone.
In April 2024, we entered into an amendment to the Zai Agreement (the “Amended Zai Agreement”), pursuant to which Zai Lab shall share costs associated with certain new manufacturing and technology transfer activities for XACDURO ® (the “Services”), which were not contemplated under the Zai Agreement and are crucial for regulatory approval in the Asia-Pacific region.
−Removed: We determined that the Amended Zai Agreement falls within the scope of ASC 606, and that Zai Lab is a customer in this arrangement, as the Services represent an output of our ordinary activities.
−Removed: We also determined that the Services represent the only performance obligation and are distinct from the performance obligations under the original Zai Agreement.
−Removed: In addition, the costs we incur in performing the Services most accurately depict the transfer of value to Zai Lab and maximize the use of observable inputs for measuring progress, therefore, we recognize revenue from this arrangement as the costs related to Services are incurred.
−Removed: Under the Amended Zai Agreement, license revenue recognized for the three months ended June 30, 2025 was not material.
−Removed: We recognized $ 0.6 million in license revenue for the six months ended June 30, 2025, and $ 6.5 million for the three and six months ended June 30, 2024.
−Removed: As of June 30, 2025, there was an immaterial amount outstanding under this amendment.
−Removed: As of December 31, 2024, outstanding amounts of $ 1.6 million were included in “Accounts receivable” in our unaudited condensed consolidated balance sheets as of December 31, 2024.
−Removed: In June 2024, we entered into an interim supply agreement with Zai Lab, under which Zai Lab shall purchase XACDURO ® inventory (the “Supplied Inventory”) for their commercial use.
−Removed: We have determined that this agreement falls within the scope of ASC 606.
−Removed: Zai Lab is a customer and the Supplied Inventory is an output of our ordinary activities.
−Removed: We have also determined that the Supplied Inventory represents the only performance obligation and is distinct from the performance obligations under the Zai agreements discussed above.
−Removed: Furthermore, we evaluated that the performance obligation is satisfied over time and that a cost-to-cost measure of progress would be the measure of progress that most accurately depicts the transfer of value to Zai Lab and maximizes the use of observable inputs to measure progress.
−Removed: We recognized $ 1.7 million and $ 2.5 million in net product sales for the Supplied Inventory for the three and six months ended June 30, 2025, respectively .
−Removed: There were no net product sales for the Supplied Inventory recorded for the three and six months ended June 30, 2024.
−Removed: Amounts outstanding under this agree ment of $ 1.4 million and $ 0.6 million are included in “Accounts receivable” in our unaudited condensed consolidated balance sheets as of June 30, 2025 and December 31, 2024, respectively.
−Removed: We have also received advance payments of $ 16.1 million and $ 5.3 million as of June 30, 2025, and December 31, 2024, respectively, from Zai Lab for additional inventory purchases.
−Removed: These amounts were recorded as other accrued liabilities and will be recognized as revenue when a supply agreement is finalized and performance obligation is satisfied.
+Added: Under the Amended Zai Agreement, we recognized $ 0.4 million and $ 1.0 million in license revenue for the three and nine months ended September 30, 2025, respectively, and $ 0.8 million and $ 7.3 million for the three and nine months ended September 30, 2024, respectively.
+Added: As of September 30, 2025 and December 31, 2024, outstanding amounts under this amendment of $ 1.4 million and $ 1.6 million, respectively, were included in “Accounts receivable” in our unaudited condensed consolidated balance sheets.
+Added: We entered into an interim supply agreement with Zai Lab in June 2024, which was amended in February 2025 and August 2025, under which Zai Lab shall purchase XACDURO ® inventory (the “Supplied Inventory”) for their commercial use.
+Added: We recognized $ 14.9 million and $ 17.4 million in net product sales for the cost of the Supplied Inventory for the three and nine months ended September 30, 2025, respectively.
+Added: We recognized $ 5.5 million in net product sales for the cost of the Supplied Inventory for the three and nine months ended September 30, 2024 .
+Added: Amounts outstanding under this agree ment of $ 7.4 million and $ 0.6 million are included in “Accounts receivable” in our unaudited condensed consolidated balance sheets as of September 30, 2025 and December 31, 2024, respectively.
+Added: We have recorded deferred revenue of $ 10.4 million as of September 30, 2025 and other accrued liabilities of $ 5.3 million as of December 31, 2024 under this agreement.
+Added: The amount as of December 31, 2024 was recorded as other accrued liabilities pending finalization of the February and August 2025 amendments mentioned above.
We also entered into a manufacturing stage transfer agreement with Zai Lab in June 2024, which was amended in September 2024 (the “Zai Manufacturing Stage Transfer Agreement”).
Pursuant to this agreement, Entasis shall provide assistance to Zai Lab for building out Zai Lab's manufacturing site for XACDURO ® and be compensated for Entasis' services and associated costs.
−Removed: We have determined this agreement falls within the scope of ASC 606.
−Removed: Zai Lab is a customer and the transfer service is an output of our ordinary activities and represents our only performance obligation, which is distinct from the performance obligations under the Zai agreements.
−Removed: Furthermore, we have evaluated that the performance obligation is satisfied over time and that the costs we incur in performing the transfer service most accurately depicts the transfer of value to Zai Lab and maximizes the use of observable inputs for measuring progress, therefore, we recognize revenue from this arrangement as the services are provided and the costs are incurred.
−Removed: We recognized license revenue under the Zai Manufacturing Stage Transfer Agreement of $ 0.9 million for the three and six months ended June 30, 2025 .
−Removed: No license revenue was recognized under this agreement for the three and six months ended June 30, 2024.
+Added: We recognized license revenue under this agreement of $ 0.1 million and $ 1.0 million for the three and nine months ended September 30, 2025 , respectively, and $ 3.4 million for the three and nine months ended September 30, 2024.
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”).
−Removed: Under the terms of the GARDP Collaboration Agreement, GARDP will use commercially reasonable endeavors to perform and fully fund the Phase 3 registrational trial, including the manufacture and supply of the product candidate containing zoliflodacin, in uncomplicated gonorrhea.
−Removed: We recorded immaterial reimbursements from GARDP under this agreement as a reduction to research and development expense during the periods presented.
+Added: Under the terms of the GARDP Collaboration Agreement, GARDP shall use commercially reasonable endeavors to perform and fully fund the Phase 3 registrational trial, including the manufacture and supply of the product candidate containing zoliflodacin, in uncomplicated gonorrhea.
+Added: We recorded $ 0.8 million in reimbursements from GARDP under this agreement as a reduction to research and development expense during the three and nine months ended September 30, 2025.
+Added: The reimbursable amounts from GARDP for the three and nine months ended September 30, 2024 were no t 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.
3 unchanged sentences
Each party is responsible for using commercially reasonable efforts to obtain marketing authorizations for the product candidate in their respective territories.
+Added: An application for marketing approval has been filed with the FDA in 2025.
PAION Pharma GmbH
5 unchanged sentences
PAION is required to use commercially reasonable efforts to commercialize GIAPREZA ® and XERAVA ® in the PAION Territory.
−Removed: Royalty revenue recognized under this agreement for the three and six months ended June 30, 2025 and 2024 was no t material.
+Added: Royalty revenue recognized under this agreement for the three and nine months ended September 30, 2025 were $ 0.7 million and $ 1.8 million, res pectively.
+Added: Royalty revenue recognized under this agreement for the three and nine months ended September 30, 2024 was no t material.
La Jolla also entered into the PAION commercial supply agreement (the “PAION Supply Agreement”) whereby La Jolla supplies PAION a minimum quantity of GIAPREZA ® and XERAVA ® until the earlier of July 13, 2027, or until a new supply agreement is executed.
During the term of the supply agreement, we are reimbursed for direct and certain indirect manufacturing costs at cost.
−Removed: We recognized $ 0.8 million and $ 1.4 million in cost reimbursements for the three and six months ended June 30, 2025, respectively.
−Removed: Cost reimbursements recognized under this agreement for the three and six months ended June 30, 2024 were no t material.
+Added: We recognized $ 1.3 million and $ 2.7 million in cost reimbursements for the three and nine months ended September 30, 2025, respectively.
+Added: Cost reimbursements recognized under this agreement for the three and nine months ended September 30, 2024 were no t material.
Everest Medicines Limited
6 unchanged sentences
or (iii) 10 years after the first commercial sale of a product in such jurisdiction in the Everest Territory.
−Removed: Royalty revenue from Everest recognized for the three and six months ended June 30, 2025 was $ 2.0 million.
−Removed: Royalty revenue recognized for the three and six months ended June 30, 2024 was $ 1.2 million and $ 1.8 million, respectively.
+Added: Royalty revenue from Everest recognized f or the three months ended September 30, 2025 was immaterial.
+Added: We recognized $ 2.0 million in royalty revenue from Everest for the nine months ended September 30, 2025 .
+Added: Royalty revenue recognized for the three and nine months ended September 30, 2024 was $ 0.6 million and $ 2.3 million, respectively.
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 ® and will transfer to Everest certain XERAVA ® -related manufacturing know-how.
Under the Everest Supply Agreement, we are reimbursed for direct and certain indirect manufacturing costs at 110 % of cost.
−Removed: R evenue recognized under the Everest Supply Agreement for the three and six months ended June 30, 2025 was $ 0.8 million and $ 1.8 million, respectively .
−Removed: Revenue recognized under the Everest Supply Agreement for the three and six months ended June 30, 2024 was $ 0.8 million and $ 1.7 million, respectively .
+Added: R evenue recognized under the Everest Supply Agreement for the three and nine months ended September 30, 2025 was no t materi al and $ 1.8 million, respectively .
+Added: Revenue recognized under the Everest Supply Agreement for the three and nine months ended September 30, 2024 was $ 0.9 million and $ 2.6 million, respectively .
In-License Agreements
6 unchanged sentences
ZEVTERA ® was commercially launched in the U.S.
−Removed: in July 2025, with a small amount sold in May 2025.
−Removed: Royalty expense incurred on the sales was immaterial during the three and six months ended June 30, 2025.
+Added: in July 2025.
+Added: Royalty expense incurred on the sales was immaterial during the three and nine months ended September 30, 2025.
George Washington University
3 unchanged sentences
The obligation to pay royalties under the GW License extends through the last-to-expire patent covering GIAPREZA ® .
−Removed: Royalty expense incurred under the GW License for the three and six months ended June 30, 2025 were $ 1.1 million and $ 2.2 million, respectively.
−Removed: Royalty expense incurred for the three and six months ended June 30, 2024 were $ 0.7 million and $ 1.4 million, respectively .
+Added: Royalty expense incurred under the GW License for the three and nine months ended September 30, 2025 were $ 1.1 million and $ 3.3 million, respectively.
+Added: Royalty expense incurred for the three and nine months ended September 30, 2024 were $ 1.0 million and $ 2.5 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: Royalty expense incurred under the Harvard License for the three and six months ended June 30, 2025 wer e $ 0.6 million and $ 0.7 million, r espectively.
−Removed: Royalty expense incurred for the three and six months ended June 30, 2024 were $ 0.5 million and $ 1.2 million, respectively.
+Added: Royalty expense incurred under the Harvard License for the three and nine months ended September 30, 2025 wer e $ 0.3 million and $ 1.0 million, respectively.
+Added: Royalty expense incurred for the three and nine months ended September 30, 2024 were $ 0.3 million and $ 1.5 million, respectively.
Business Transfer and Subscription Agreement with AstraZeneca
5 unchanged sentences
Our obligation to make these royalty payments expires on a country-by-country basis for each product upon the later of (i) the 10-year anniversary of the first commercial sale of a product in that country or (ii) the expiration date of the last patent right covering the product in that country.
−Removed: The royalty expense in respect of durlobactam arising from our net product sales of XACDURO ® for the three and six months ended June 30, 2025 and 2024 was no t material.
+Added: The royalty expense in respect of durlobactam arising from our net product sales of XACDURO ® for the three and nine months ended September 30, 2025 and 2024 was no t material.
+Added: Massachusetts Institute of Technology
+Added: In connection with the asset acquisition described in Note 13, “Asset Acquisition”, in September 2025, we entered into a license agreement with Massachusetts Institute of Technology (“MIT”), under which MIT licensed to us certain patent rights relating to a drug delivery device.
+Added: Under this agreement, we paid an upfront fee of $ 0.5 million and are obligated to pay a minimal annual maintenance fee.
+Added: We are also obligated to pay MIT up to $ 17.5 million in development, regulatory and sales milestone payments, and pay royalties in a low single-digit percentage on future net sales related to the licensed product.
Consolidated Entity
6 unchanged sentences
In October 2024, Strategic Partners made an election to unwind its capital accounts in the Partnership in accordance with the terms of the Partnership Agreement and we expect to receive distributions of our capital accounts through April 2026.
−Removed: Accordingly, a portion of our investments, which consist of cash and money market funds that we expect to be distributed within 12 months from the balance sheet date, were classified as “Current portion of ISP Fund investments” in the condensed consolidated balance sheets as of June 30, 2025 and December 31, 2024, and the remaining equity investments managed by ISP Fund LP are expected to be distributed through April 2026.
−Removed: A cash distribution of $ 28.0 million was received in April 2025.
+Added: Accordingly, a portion of our investments, which consist of cash and money market funds that we expect to be distributed within 12 months from the balance sheet date, were classified as “Current portion of ISP Fund investments” in the condensed consolidated balance sheets as of September 30, 2025 and December 31, 2024, and the remaining equity investments managed by ISP Fund LP are expected to be distributed through April 2026.
+Added: Cash distributions of $ 43.9 million and $ 28.0 million were received in August 2025 and April 2025, respectively.
We report in our condensed consolidated statements of income and comprehensive income any investment gains and losses by the Partnership as part of “Changes in fair value of equity and long-term investments, net”, any interest and dividend income as part of “Interest and dividend income” and any investment expenses as part of “Other expense, net”.
−Removed: As of June 30, 2025, we continued to hold approximately 100 % of the economic interest of the Partnership.
−Removed: As of June 30, 2025 and December 31, 2024, total assets of the Part nership were $ 147.5 million and $ 255.7 million, respectively, with the majority attributable to either current portion of ISP Fund investment or to equity and long-term investments.
−Removed: As of June 30, 2025 and December 31, 2024 , total liabilities were $ 0.1 million and $ 0.2 million, respectively.
+Added: As of September 30, 2025, we continued to hold approxi mately 100 % of the economic interest of the Partnership.
+Added: As of September 30, 2025 and December 31, 2024, total assets of the Partnership were $ 115.7 million and $ 255.7 million, respectively, with the majority attributable to either current portion of ISP Fund investment or to equity and long-term investments.
+Added: As of September 30, 2025 and December 31, 2024, total liabilities were $ 0.1 million and $ 0.2 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, 2025 , we recorded $ 0.7 million and $ 1.5 million, respectively, in investment-related expense incurred by the Partnership, generated $ 1.2 million and $ 2.4 million, respectively, in interest income, and recorded $ 0.4 million in net realized and unrealized gains and $ 80.9 million in net realized and unrealized losses, respectively, as changes in fair values of equity and long-term investments, net, in the unaudited condensed consolidated statements of income and comprehensive income.
−Removed: During the three and six months ended June 30, 2024, we recorded $ 0.1 million and $ 0.3 million, respectively, of net investment-related expense incurred by the Partnership and $ 15.8 million and $ 42.0 million, respectively, of net realized and unrealized losses as changes in fair values of equity and long-term investments, net, in the unaudited condensed consolidated statements of income and comprehensive income.
+Added: During the three and nine months ended September 30, 2025 , we recorded $ 0.4 million and $ 1.9 million, respectively, in investment-related expense incurred by the Partnership, generated $ 0.8 million and $ 3.2 million, respectively, in interest income, and recorded $ 11.7 million in net realized and unrealized gains and $ 69.2 million in net realized and unrealized losses, respectively, as changes in fair values of equity and long-term investments, net, in the unaudited condensed consolidated statements of income and comprehensive income.
+Added: During the three and nine months ended September 30, 2024, we recorded an immaterial amount and $ 0.3 million, respectively, of net investment-related expense incurred by the Partnership and $ 17.8 million and $ 59.8 million, respectively, of net realized and unrealized losses as changes in fair values of equity and long-term investments, net, in the unaudited condensed consolidated statements of income and comprehensive income.
The following is a summary of individual investments held by ISP Fund at each balance sheet date:
+Added: September 30,
(In thousands)
12 unchanged sentences
(“Armata”), a clinical stage biotechnology company focused on development of precisely targeted bacteriophage therapeutics for antibiotic-resistant infections.
−Removed: On March 12, 2025, ISO and Armata entered into a Credit and Security Agreement, under which ISO extended a term loan to Armata (the “Armata March 2025 Term Loan”) in the aggregate principal amount of $ 10.0 million.
−Removed: The loan bears interest at a rate of 14 % per annum and matures on March 12, 2026 .
+Added: On March 12, 2025, ISO and Armata entered into a Credit and Security Agreement, under which ISO extended a term loan to Armata (the “Armata March 2025 Term Loan”) in a principal amount of $ 10.0 million.
+Added: The Armata March 2025 Term Loan bears interest at a rate of 14 % per annum and matures on March 12, 2026 .
The Credit and Security Agreement is secured by substantially all assets of Armata and its domestic and foreign material subsidiaries.
Concurrently, ISO extended the maturity date of the convertible note and the term loans issued in July 2023 (the “Armata July 2023 Term Loan”) and in March 2024 (the “Armata March 2024 Term Loan”) to March 12, 2026.
−Removed: As of June 30, 2025, Innoviva collectively owns 25,076,769 shares of Armata’s common stock, representing a 69.3 % equity interest, a nd held 10,653,847 warra nts with exercise prices ranging from $ 3.25 to $ 5.00 per share.
+Added: On August 11, 2025, ISO and Armata entered into a Credit and Security Agreement, under which ISO extended a term loan to Armata (the “Armata August 2025 Term Loan”) in a principal amount of $ 15.0 million.
+Added: The Armata August 2025 Term Loan bears an interest rate of 14 % per annum and matures on January 11, 2029 .
+Added: The Credit and Security Agreement is secured by substantially all of the assets of Armata and its domestic and foreign material subsidiaries.
+Added: As of September 30, 2025, Innoviva collectively o wns 25,076,769 shares of Armata’s common stock, representing a 69.2 % equity interest, and held 10,653,847 warra nts with exercise prices ranging from $ 3.25 to $ 5.00 per share.
Innoviva also held $ 30.1 million in principal amount of Armata’s convertible note and a total of $ 85.1 million in term loans.
13 unchanged sentences
We account for the term loans as trading securities, measured at fair value using an income approach based on the discounted value of expected future cash flows.
−Removed: As of June 30, 2025, the fair values of our holdings of Armata common stock, warrants, the convertible note, the term loan issued in 2023, the term loan issued in 2024 and the term loan issued in March 2025 were estimate d at $ 47.6 million, $ 4.2 million, $ 44.0 million, $ 31.6 million, $ 41.3 million and $ 10.5 million , respectively.
+Added: As of September 30, 2025 , the fair values of our holdings of Armata common stock, warrants, the convertible note, the term loan issued in 2023, the term loan issued in 2024, the term loan issued in March 2025 and the term loan issued in August 2025 were estimated at $ 74.7 million, $ 7.8 million, $ 56.9 million, $ 32.7 million, $ 42.7 million, $ 10.8 million and $ 15.4 million , respectively.
As of December 31, 2024, the fair values of our holdings of Armata common stock, warrants, the convertible note, the term loan issued in 2023, and the term loan issued in 2024 were estimated at $ 46.4 million, $ 5.9 million, $ 42.1 million, $ 30.2 million and $ 39.3 million, respectively.
−Removed: For the common stock and warrants, we recorded $ 13.1 million in unrealized gain and $ 0.4 million in unrealized loss for the three and six months ended June 30, 2025 , respectively, and $ 60.1 million and $ 24.8 million in unrealized loss for the three and six months ended June 30, 2024, respectively, as changes in fair values of equity method investments, net, in the unaudited condensed consolidated statements of income and comprehensive income.
−Removed: For the convertible note, we recorded $ 6.2 million and $ 1.9 million in unrealized gain for the three and six months ended June 30, 2025 , respectively, and $ 16.6 million and $ 4.2 million in unrealized loss for the three and six months ended June 30, 2024, respectively, as changes in fair values of equity and long-term investments, net, in the unaudited condensed consolidated statements of income and comprehensive income.
−Removed: For the term loan issued in July 2023, we recorded $ 1.1 million and $ 1.4 million in unrealized gain for the three and six months ended June 30, 2025 , respectively, and $ 0.6 million and $ 1.0 million in unrealized gain for the three and six months ended June 30, 2024, respectively, as changes in fair values of equity and long-term investments, net, in the unaudited condensed consolidated statements of income and comprehensive income.
−Removed: For the term loan issued in March 2024, we recorded $ 1.4 million and $ 2.0 million in unrealized gain for the three and six months ended June 30, 2025 , respectively, and $ 0.9 million and $ 1.4 million in unrealized gain for the three and six months ended June 30, 2024, respectively, as changes in fair values of equity and long-term investments, net, in the unaudited condensed consolidated statements of income and comprehensive income.
−Removed: For the term loan issued in March 2025, we recorded $ 0.4 million and $ 0.5 million in unrealized gain for the three and six months ended June 30, 2025, respectively, as changes in fair values of equity and long-term investments, net, in the unaudited condensed consolidated statement of income and comprehensive income.
+Added: For the common stock and warrants, we recorded $ 30.8 million and $ 30.3 million in unrealized gain for the three and nine months ended September 30, 2025 , respectively, and $ 18.2 million and $ 43.0 million in unrealized loss for the three and nine months ended September 30, 2024, respectively, as changes in fair values of equity method investments, net, in the unaudited condensed consolidated statements of income and comprehensive income.
+Added: For the convertible note, we recorded $ 13.0 million and $ 14.9 million in unrealized gain for the three and nine months ended September 30, 2025 , respectively, and $ 2.2 million and $ 6.4 million in unrealized loss for the three and nine months ended September 30, 2024, respectively, as changes in fair values of equity and long-term investments, net, in the unaudited condensed consolidated statements of income and comprehensive income.
+Added: For the term loan issued in July 2023, we recorded 1.1 million and $ 2.5 million in unrealized gain for the three and nine months ended September 30, 2025 , respectively, and $ 1.4 million and $ 2.4 million in unrealized gain for the three and nine months ended September 30, 2024, respectively, as changes in fair values of equity and long-term investments, net, in the unaudited condensed consolidated statements of income and comprehensive income.
+Added: For the term loan issued in March 2024, we recorded $ 1.5 million and $ 3.5 million in unrealized gain for the three and nine months ended September 30, 2025 , respectively, and $ 2.0 million and $ 3.3 million in unrealized gain for the three and nine months ended September 30, 2024, respectively, as changes in fair values of equity and long-term investments, net, in the unaudited condensed consolidated statements of income and comprehensive income.
+Added: For the term loan issued in March 2025, we recorded $ 0.4 million and $ 0.9 million in unrealized gain for the three and nine months ended September 30, 2025, respectively, as changes in fair values of equity and long-term investments, net, in the unaudited condensed consolidated statement of income and comprehensive income.
+Added: For the term loan issued in August 2025, we recorded $ 0.4 million in unrealized gain for the three and nine months ended September 30, 2025 as changes in fair values of equity and long-term investments, net, in the unaudited condensed consolidated statement of income and comprehensive income.
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)
Loss from operations
+Added: Net income (loss)
Equity and Other Investments in InCarda
Since the third quarter of 2020, Innoviva TRC Holdings, LLC (“ITH”), a wholly owned subsidiary of Innoviva, has invested in the common stock, preferred stock, warrants and convertible notes of InCarda Therapeutics, Inc.
−Removed: (“InCarda”), a privately held biopharmaceutical company focused on developing inhaled therapies for cardiovascular diseases.
−Removed: As of June 30, 2025, ITH owns 36,742,250 shares of InCarda’s common and preferred stock and 2,490,033 warrants, representing a 9.1 % equity interest.
−Removed: ITH also invested $ 0.4 million and $ 0.5 million in the principal amounts of InCarda’s convertible notes issued in Januar y 2024 (the “InCarda 2024 Convertible Note”) and February 2025 (the “InCarda 2025 Convertible Note”), respectively.
−Removed: With the exception of the convertible notes and the warrants, we account for our investments in InCarda under the measurement alternative.
+Added: (“InCarda”), a privately held biopharmaceutical company focused on developing intravenous and inhaled therapies for cardiovascular diseases.
+Added: As of September 30, 2025, ITH owns 36,742,250 shares of InCarda’s common and preferred stock and 2,490,033 warrants, representing a 9.1 % equity interest.
+Added: I TH also invested $ 0.4 million and $ 0.5 million in the principal amounts of InCarda’s convertible notes issued in Januar y 2024 (the “InCarda 2024 Convertible Note”) and February 2025 (the “InCarda 2025 Convertible Note”), respectively (collectively, the “InCarda Convertible Notes”).
+Added: With the exception of the InCarda Convertible Notes and the warrants, we account for our investments in InCarda under the measurement alternative.
Under the measurement alternative, the equity investment is initially recorded at its allocated cost, but the carrying value may be adjusted through earnings upon an impairment or when there is an observable price change involving the same or a similar investment with the same issuer.
4 unchanged sentences
Our maximum exposure to loss is equal to the amount we invested in the entity.
−Removed: As of June 30, 2025 and December 31, 2024 , we recorded as equity and long-term investments in the unaudited condensed consolidated balance sheets $ 4.8 million in carrying amount of InCarda’s Series C preferred stock and $ 0.1 million in fair value of the InCarda warrants.
−Removed: As of June 30, 2025 and December 31, 2024 , we recognized as equity and long-term investments in the unaudited condensed consolidated balance sheets $ 2.7 million, for InCarda’s Series D-1 preferred stock, Series D-2 preferred stock, and common stock using the measurement alternative.
−Removed: As of June 30, 2025, we rec orded $ 0.9 million in fair value of the convertible notes, as equity and long-term investments in the unaudited condensed consolidated balance sheet.
−Removed: As of December 31, 2024, we recorded $ 0.4 million in fair value of convertible note as equity and long-term investments in the unaudited condensed consolidated balance sheet.
−Removed: During the three and six months ended June 30, 2025 and 2024, the change to the carrying amount of our investments in InCarda was not material.
+Added: As of September 30, 2025 and December 31, 2024, we recorded as equity and long-term investments in the unaudited condens ed consolidated balance sheets $ 4.8 million in carrying amount of InCarda’s Series C preferred stock and $ 0.1 million in fair value of the InCarda warrants.
+Added: As of September 30, 2025 and December 31, 2024 , we recorded as equity and long-term investments in the unaudited condensed consolidated balance sheets $ 2.7 million, for InCarda’s Series D-1 preferred stock, Series D-2 preferred stock, and common stock using the measurement alternative.
+Added: As of September 30, 2025 , we recorded $ 0.9 million in fair value of the InCarda Convertible Notes, as equity and long-term investments in the unaudited condensed consolidated balance sheet.
+Added: As of December 31, 2024, we recorded $ 0.4 million in fair value of InCarda 2024 Convertible Note as equity and long-term investments in the unaudited condensed consolidated balance sheet.
+Added: During the three and nine months ended September 30, 2025 and 2024, the change to the carrying amount of our investments in InCarda was not material.
Equity and Other Investments in ImaginAb
2 unchanged sentences
On January 13, 2025, ITH and ImaginAb executed an amendment to extend the maturity date of the convertible note from January 31, 2025 to May 30, 2025 .
−Removed: As of June 30, 2025, and December 31, 2024, we held an 11.8 % equity interest in ImaginAb.
+Added: As of September 30, 2025, and December 31, 2024, we held an 11.8 % equity interest in ImaginAb.
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 preferred stock and common stock using the measurement alternative.
−Removed: As of June 30, 2025 and December 31, 2024, our investment in the preferred stock and common stock amounted to $ 7.6 million and was recorded as equity and long-term investments in the unaudited condensed consolidated balance sheets.
−Removed: There was no change in the carrying amount of our equity investments in ImaginAb during the six months ended June 30, 2025 and 2024.
+Added: As of September 30, 2025 and December 31, 2024 , our investment in the preferred stock and common stock amounted to $ 7.6 mi llion and was recorded as equity and long-term investments in the unaudited condensed consolidated balance sheets.
+Added: There was no change in the carrying amount of our equity investments in ImaginAb during the three and nine months ended September 30, 2025 and 2024.
In May 2025, ImaginAb fully settled the convertible note of $ 4.8 million for $ 5.1 million, including $ 0.3 million in accrued interest and commitment fees.
1 unchanged sentence
As of December 31, 2024 , we recorded $ 5.0 million in fair value of the ImaginAb convertible note as equity and long-term investments in the condensed consolidated balance sheet.
−Removed: Changes to the fair value of the ImaginAb convertible note for the three and six months ended June 30, 2025 were immaterial.
−Removed: During the three and six months ended June 30, 2024, we recorded $ 0.1 million and $ 0.3 million, respectively, in net unrealized gain on the ImaginAb Convertible Note as changes in fair values of equity and long-term investments, net in the unaudited condensed consolidated statements of income and comprehensive income.
−Removed: Convertible Promissory Note in Syndeio Biosciences
+Added: C hanges to the fair value of the ImaginAb convertible note for the in 2025 through its settlement date were immaterial.
+Added: Duri ng the three and nine months ended September 30, 2024, we recorded $ 0.1 million and $ 0.4 million, respectively, in net unrealized gain on the ImaginAb Convertible Note as changes in fair values of equity and long-term investments, net in the unaudited condensed consolidated statements of income and comprehensive income.
+Added: Convertible Promissory Notes in Syndeio Biosciences
Syndeio Biosciences, Inc.
8 unchanged sentences
We account for both the Syndeio 2021 Convertible Note and the Syndeio 2025 Convertible Note as trading securities, measured at fair value using a Monte Carlo simulation model with the probability of certain qualified events and the assumptions of equity value of Syndeio, risk-free rate, expected stock price, volatility of its peer companies, and the time until a financing is raised.
−Removed: As of June 30, 2025, and December 31, 2024, the fair value of the Syndeio 2021 Convertible Note was estimated at $ 71.3 million and $ 50.9 million, respectively, and recorded as equity and long-term investments in the unaudited condensed consolidated balance sheets.
−Removed: We recorded $ 1.4 million and $ 20.5 million in unrealized gain for the three and six months ended June 30, 2025, respectively, as changes in fair values of equity and long-term investments, net in the unaudited condensed consolidated statements of income and comprehensive income.
−Removed: We recorded $ 0.3 million unrealized gain and $ 0.3 million unrealized loss for the three and six months ended June 30, 2024, respectively, as changes in fair values of equity and long-term investments, net in the unaudited condensed consolidated statements of income and comprehensive income.
−Removed: As of June 30, 2025, the fair value of the Syndeio 2025 Convertible Note was e stimated at $ 15.6 million and recorded as equity and long-term investments in the unaudited condensed consolidated balance sheet.
−Removed: We recorded $ 0.4 million and $ 0.6 million in unrealized gains for the three and six months ended June 30, 2025, respectively, as changes in fair values of equity and long-term investments, net in the unaudited condensed consolidated statement of income and comprehensive income.
+Added: As of September 30, 2025, and December 31, 2024 , the fair value of the Syndeio 2021 Convertible Note was estimated at $ 77.7 million and $ 50.9 million, respectively, and recorded as equity and long-term investments in the unaudited condensed consolidated balance sheets.
+Added: We recorded $ 6.3 million and $ 26.8 million in unrealized gain for the three and nine months ended September 30, 2025 , respectively, as changes in fair values of equity and long-term investments, net in the unaudited condensed consolidated statements of income and comprehensive income.
+Added: We recorded $ 0.4 million and $ 0.7 milli on in unrealized loss for the three and nine months ended September 30, 2024, respectively, as changes in fair values of equity and long-term investments, net in the unaudited condensed consolidated statements of income and comprehensive income.
+Added: As of September 30, 2025, the fair value of the S yndeio 2025 Convertible Note was estimated at $ 15.1 million and recorded as equity and long-term investments in the unaudited condensed consolidated balance sheet.
+Added: We recorded $ 0.6 million in unrealized loss for the three months ended September 30, 2025 as changes in fair values of equity and long-term investments, net in the una udited condensed consolidated statement of income and comprehensive income.
+Added: We recorded immaterial unrealized gains for the nine months ended September 30, 2025.
Equity Investment in Nanolive
In 2022, ITH invested $ 10.6 million in 18,750,000 shares of the preferred stock of Nanolive SA (“Nanolive”), a Swiss privately held life sciences company focused on developing breakthrough imaging solutions that accelerate research in growth industries such as drug discovery and cell therapy.
−Removed: As of June 30, 2025 and December 31, 2024, we held 13.0 % of Nanolive equity ownership.
+Added: As of September 30, 2025 and December 31, 2024, we held 13.0 % 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, 2025 and December 31, 2024, $ 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.
+Added: As of September 30, 2025 and December 31, 2024 , $ 10.6 million was recorded as equity and long-term investme nts in the unaudited condensed consolidated balance sheets and there was no change to the carrying amount of our investment.
Convertible Promissory Note in Lyndra
9 unchanged sentences
Our maximum exposure to loss is equal to the amount we invested in the entity.
−Removed: We account for the Lyndra Convertible Note as a trading security.
−Removed: In late March of 2025, Lyndra began winding down its operations due to its inability to secure additional financing and concurrently initiated a process to seek potential acquirers for the business.
−Removed: We believe Lyndra’s proprietary platform holds significant value – greater than the carrying value of the Lyndra Convertible Note – thereby supporting full recovery of the Lyndra Convertible Note, which is secured by a first-priority interest in Lyndra’s assets.
−Removed: As of June 30, 2025 , we recorded the Lyndra Convertible Note at $ 9.2 million, reflecting its original cost, as part of equity and long-term investments in the unaudited condensed consolidated balance sheet.
+Added: We account for the Lyndra Convertible Note as a trading security, measured at fair value using an income approach based on the discounted value of expected future cash flows.
+Added: In late March of 2025, Lyndra began winding down its operations due to a lack of financing.
+Added: In September 2025, Lyndra sold the majority of its assets, resulting in a change of control as defined in the Lyndra Convertible Note (Refer to Note 13, “Asset Acquisition”) .
+Added: Upon the consummation of the change of control, the maturity date of the Lyndra Convertible Note was accelerated, and its principal and accrued interest became due.
+Added: Due to Lyndra’s inability to repay the full amount, the note went into default and became subject to a 20 % premium on the principal balance.
+Added: Interest will continue to accrue until full repayment.
+Added: As of September 30, 2025, the fair value of the Lyndra Convertible Note was estimated at $ 6.8 million and recorded as equity and long-term investments in the unaudited condensed consolidated balance sheet.
+Added: We recorded $ 2.4 million i n unrealized loss for the three and nine months ended September 30, 2025 as changes in fair values of equity and long-term investments, net, in the unaudited condensed consolidated statements of income and comprehensive income.
Reconciliation of Equity and Long-Term Investments Balances
11 unchanged sentences
Reclassification of current portion
−Removed: Equity and long-term investments as of June 30, 2025
+Added: Equity and long-term investments as of September 30, 2025
Available-for-Sale Securities
1 unchanged sentence
Available-for-sale securities are summarized below:
−Removed: June 30, 2025
+Added: September 30, 2025
(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, 2025 and December 31, 2024, all available-for-sale investments were money market funds, and there was no credit loss recognized.
+Added: As of September 30, 2025 and December 31, 2024, all available-for-sale 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, 2025 Using:
+Added: Estimated Fair Value Measurements as of September 30, 2025 Using:
Types of Instruments
11 unchanged sentences
Term loan investment - Armata March 2025 Term Loan
+Added: Term loan investment - Armata August 2025 Term Loan
Convertible debt investment - Armata Note
5 unchanged sentences
Total assets measured at estimated fair value
−Removed: Total fair value of debt
Estimated Fair Value Measurements as of December 31, 2024 Using:
26 unchanged sentences
We recognized goodwill of $ 11.5 million and $ 6.4 million from our acquisitions of Entasis and La Jolla, respectively, in 2022.
−Removed: The carrying amount of goodwill as of June 30, 2025 and December 31, 2024 was $ 17.9 million .
+Added: The carrying amount of goodwill as of September 30, 2025 and December 31, 2024 was $ 17.9 million .
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, 2025 and December 31, 2024 were as follows:
−Removed: June 30, 2025
+Added: The carrying basis and accumulated amortization of recognized intangible assets as of September 30, 2025 and December 31, 2024 were as follows:
+Added: September 30, 2025
(In thousands)
15 unchanged sentences
in December 2024 was recorded as an intangible asset and is being amortized over the initial term of the agreement (refer to Note 4, “License and Collaboration Arrangements”).
−Removed: We recognized amortization expense of $ 6.5 million and $ 13.0 million for the three and six months ended June 30, 2025 , respectively.
−Removed: We recognized amortization expense of $ 6.4 million and $ 12.9 million for the three and six months ended June 30, 2024 , respectively.
−Removed: Future amortization expense is expected to be $ 13.2 million for the remainder of 2025, $ 26.3 million for each of the years from 2026 to 2029 and $ 74.3 million thereafter.
+Added: We recognized amortization expense of $ 6.6 million and $ 19.6 million fo r the three and nine months ended September 30, 2025 , respectively.
+Added: We recognized amortization expense of $ 6.5 million and $ 19.4 million for the three and nine months ended September 30, 2024, respectively.
+Added: Future amortization expense is expected to be $ 6.6 million for th e remainder of 2025, $ 26.3 million for each of the years from 2026 to 2029 and $ 74.3 million thereafter.
Balance Sheet Components
Inventory consisted of the following:
+Added: September 30,
(in thousands)
3 unchanged sentences
Total inventory
−Removed: As of June 30, 2025 and December 31, 2024, total inventory included net fair value adjustments resulting from the acquisition of La Jolla of approxima tely $ 8.5 mill ion and $ 9.2 million, respectively , which will be amortized an d recognized as cost of products sold when sales occur in future periods.
−Removed: The fair value adjustments recorded as part of cost of products sold amounted to $ 0.4 million and $ 0.6 million for the three and six months ended June 30, 2025 , respectively.
−Removed: The fair value adjustments recorded as part of cost of products sold amounted to $ 3.5 million and $ 10.3 million for the three and six months ended June 30, 2024, respectively.
+Added: As of September 30, 2025 and December 31, 2024, total inventory included net fair value adjustments resulting from the acquisition of La Jolla of approximatel y $ 5.0 million and $ 9.2 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 $ 3.5 million and $ 4.1 million f or the three and nine months ended September 30, 2025 , respectively.
+Added: The fair value adjustments recorded as part of cost of products sold amounted to $ 1.8 million and $ 12.1 million for the three and nine months ended September 30, 2024, respectively.
Other Accrued Liabilities
Other accrued liabilities consisted of the following:
+Added: September 30,
(in thousands)
7 unchanged sentences
Total other accrued liabilities
−Removed: (1) Amount as of June 30, 2025 and December 31, 2024 includes $ 16.1 million and $ 5.3 million advance payments received from our partner for inventory supply as discussed in Note 4, “License and Collaboration Arrangements”.
+Added: (1) Amount as of December 31, 2024 includes $ 5.3 million advance payments received from our partner for inventory supply as discussed in Note 4, “License and Collaboration Arrangements”.
Other Long-term Liabilities
Other long-term liabilities consisted of the following:
+Added: September 30,
(in thousands)
5 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
1 unchanged sentence
4.14 % - 4.65 %
−Removed: 4.1 % - 4.4 %
−Removed: 4.1 % - 4.6 %
Expected term (in years)
7 unchanged sentences
$ 4.97 - $ 7.76
−Removed: $ 4.97 - $ 6.93
Stockholders' Equity
+Added: For the three and nine months ended September 30, 2025, a total of 590,703 warrants were exercised into an equivalent number of our common shares at an exercise price of $ 18.11 per share, resulting in approximately $ 10.7 million in proceeds.
+Added: There were no outstanding warrants as of September 30, 2025.
On October 31, 2022, our board of directors authorized a share repurchase program under which we may repurchase up to $ 100.0 million of our outstanding shares of common stock.
8 unchanged sentences
Our debt consists of the following:
+Added: September 30,
(In thousands)
6 unchanged sentences
The 2025 Notes were sold in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act.
−Removed: The 2025 Notes are senior unsecured obligations and bear interest at a rate of 2.5 % per year, payable semi-annually in arrears on February 15 and August 15 of each year, beginning on February 15, 2018.
−Removed: The initial conversion rate for the 2025 Notes is 57.9240 shares of our common stock per $1,000 principal amount of the 2025 Notes (which is equivalent to an initial conversion price of approximately $ 17.26 per share).
−Removed: The conversion rate is subject to customary anti-dilution adjustments in certain circumstances.
−Removed: The 2025 Notes will mature on August 15, 2025 , unless repurchased or converted in accordance with their terms prior to such date.
−Removed: Prior to February 15, 2025, the 2025 Notes will be convertible at the option of the holders only upon the occurrence of specified events and during certain periods, as described below .
−Removed: On or after February 15, 2025, holders of the 2025 Notes may convert their 2025 Notes at any time until the close of business on the second scheduled trading day immediately preceding the maturity date of the 2025 Notes.
−Removed: In the event of default or a fundamental change (as defined in the indenture), holders of the 2025 Notes may require us to repurchase all or a portion of their 2025 Notes at price equal to 100 % of the principal amount of the 2025 Notes, plus any accrued and unpaid interest.
+Added: The 2025 Notes were senior unsecured obligations and carried interest at a rate of 2.5 % per year, payable semi-annually in arrears on February 15 and August 15 of each year, beginning on February 15, 2018.
+Added: The initial conversion rate for the 2025 Notes was 57.9240 shares of our common stock per $1,000 principal amount of the 2025 Notes (which was equivalent to an initial conversion price of approximately $ 17.26 per share).
+Added: The conversion rate was subject to customary anti-dilution adjustments in certain circumstances.
+Added: The 2025 Notes would mature on August 15, 2025 , unless repurchased or converted in accordance with their terms prior to such date.
+Added: Prior to February 15, 2025, the 2025 Notes would be convertible at the option of the holders only upon the occurrence of specified events and during certain periods, as described below .
+Added: On or after February 15, 2025, holders of the 2025 Notes had the option to convert their 2025 Notes at any time until the close of business on the second scheduled trading day immediately preceding the maturity date of the 2025 Notes.
+Added: In the event of default or a fundamental change (as defined in the indenture), holders of the 2025 Notes had the option to require us to repurchase all or a portion of their 2025 Notes at price equal to 100 % of the principal amount of the 2025 Notes, plus any accrued and unpaid interest.
In June 2025, we elected to settle the 2025 Notes in shares.
−Removed: Holders may convert their 2025 Notes at any time until the close of business on the second scheduled trading day immediately preceding the maturity date.
+Added: Holders had the option to convert their 2025 Notes at any time until the close of business on the second scheduled trading day immediately preceding the maturity date.
During June 2025, $ 0.5 million of the principal amount was converted into 28,962 shares of our common stock.
−Removed: As of June 30, 2025, the outstanding principal amount was $ 192.0 million.
−Removed: As a result of the conversion, the annual effective interest rate has been adjusted to 2.90 %.
−Removed: Our outstanding 2025 Notes balances consisted of the following:
+Added: During August 2025, $ 192.0 million of the principal amount was converted into 11,119,956 shares of our common stock.
+Added: The remaining balance of the 2025 Notes of $ 25,000 was fully paid in cash upon the maturity date in August 15, 2025 .
+Added: The annual effective interest rate on the 2025 Notes in 2025 was 2.90 %.
+Added: Our 2025 Notes balance consisted of the following as of December 31, 2024:
(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, 2025 and 2024:
−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, 2025 and 2024:
+Added: Three Months Ended September 30,
+Added: Nine Months Ended September 30,
(In thousands)
25 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, 2025 and 2024:
−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, 2025 and 2024:
+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, 2025 were as follows:
+Added: The aggregate scheduled maturities of our convertible debt as of September 30, 2025 were as follows:
(In thousands)
8 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, 2025 , we recognized interest expense of $ 1.5 million and $ 3.1 million, respectively.
−Removed: For the three and six months ended June 30, 2024, we recognized interest expense of $ 2.7 million and $ 5.5 million, respectively.
−Removed: The carrying value of the deferred royalty obligation as of June 30, 2025 and December 31, 2024 was $ 66.4 million and $ 69.5 million, respectively (refer to Note 8, “Balance Sheet Components”).
−Removed: During the six months ended June 30, 2025 and 2024 , we made royalty payments to HCR of $ 6.1 million and $ 4.1 million, respectively.
−Removed: The deferred royalty obligation was valued using Level 3 inputs, and its carrying value as of June 30, 2025 approximates fair value.
+Added: For the three and nine months ended September 30, 2025 , we recognized interest expense of $ 1.6 million and $ 4.7 million, respectively.
+Added: For the three and nine months ended September 30, 2024, we recognized interest expense of $ 2.6 million and $ 8.1 million, respectively.
+Added: The carrying value of the deferred royalty obligation as of September 30, 2025 and December 31, 2024 was $ 64.3 million and $ 69.5 million, respectively (refer to Note 8, “Balance Sheet Components”).
+Added: During the nine months ended September 30, 2025 and 2024 , we made royalty payments to HCR of $ 9.5 million and $ 6.4 million, respectively.
+Added: The deferred royalty obligation was valued using Level 3 inputs, and its carrying value as of September 30, 2025 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, 2025 , inclusive of the aggregate royalties paid to HCR by La Jolla under the La Jolla Royalty Agreement prior to our acquisition, La Jolla paid $ 33.3 million of aggregate royalties to HCR.
+Added: As of September 30, 2025 , inclusive of the aggregate royalties paid to HCR by La Jolla under the La Jolla Royalty Agreement prior to our acquisition, La Jolla paid $ 36.7 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, 2025 and December 31, 2024.
+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, 2025 and December 31, 2024.
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.
3 unchanged sentences
We have operating leases for our corporate headquarters, office spaces and laboratory facilities.
−Removed: The components of lease cost are as follows:
−Removed: Three Months Ended June 30,
−Removed: Six Months Ended June 30,
+Added: The components of lease cost were as follows:
+Added: Three Months Ended September 30,
+Added: Nine Months Ended September 30,
(In thousands)
2 unchanged sentences
Total lease costs
−Removed: Supplemental cash flow information related to leases is as follows:
−Removed: Six Months Ended June 30,
+Added: Supplemental cash flow information related to leases was as follows:
+Added: Nine Months Ended September 30,
(In thousands)
1 unchanged sentence
Operating lease right-of-use asset obtained in exchange for operating lease obligations
−Removed: As of June 30, 2025, 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 7.0 %.
−Removed: Future minimum payments on our operating leases as of June 30, 2025 were as follows:
+Added: As of September 30, 2025, our operating leases have weighted-average remaining term of approximately 2.6 years and the weighted average discount rate on our operating lease liabilities was 6.9 %.
+Added: Future minimum payments on our operating leases as of September 30, 2025 were as follows:
(In thousands)
7 unchanged sentences
Under the agreement, we committed to minimum purchase commitments through December 31, 2027.
−Removed: As of June 30, 2025, we have approximately $ 6.5 million, $ 7.3 million and $ 5.9 million in outstanding purchase commitments under the agreement for the remainder of 2025 and for the years 2026 and 2027, respectively.
+Added: As of September 30, 2025 , we have approximately $ 1.4 million, $ 7.3 million and $ 5.9 million in outstanding purchase commitments under the agreement for the remainder of 2025 and for the years 2026 and 2027, respectively.
Legal Proceedings
21 unchanged sentences
We also maintain director and officer insurance, which may cover certain liabilities arising from our obligation to indemnify our directors.
−Removed: To date, we have not incurred any material costs and, as of June 30, 2025 , we have not accrued any material liabilities in the unaudited condensed consolidated financial statements as a result of these provisions.
−Removed: We recorded income tax expense of $ 8.9 million and $ 16.9 million for the three and six months ended June 30, 2025 , respectively, compared to an income tax benefit of $ 4.6 million for the three months ended June 30, 2024 and an income tax expense of $ 4.0 million for the six months ended June 30, 2024.
−Removed: The Company’s effective income tax rate for the six months ended June 30, 2025 was 49.7 % compared to 68.4 % for the same period in 2024.
−Removed: The income tax expense for the six months ended June 30, 2025 and 2024 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, 2025 was higher than the expense computed at the U.S.
−Removed: federal statutory income tax rate due primarily to valuation allowance against unrealized investment losses, state income taxes and nondeductible expenses, partially offset by foreign-derived intangible income tax deduction and research and development credits.
+Added: To date, we have not incurred any material costs and, as of September 30, 2025 , we have not accrued any material liabilities in the unaudited condensed consolidated financial statements as a result of these provisions.
+Added: Asset Acquisition
+Added: In September 2025 , we entered into an Asset Purchase Agreement with Lyndra to acquire the IPR&D and certain fixed assets related to its Lynx long-acting drug delivery platform.
+Added: We made an upfront cash payment of $ 10.2 million and incurred $ 0.3 million in direct transaction costs.
+Added: We are also obligated to pay up to $ 20.0 million upon the achievement of certain development, regulatory and sales milestone payments, as well as royalties in a low single-digit percentage on future net sales of the first approved therapeutic product.
+Added: Based on the qualitative and quantitative assessments performed under ASC 805, Business Combinations , we concluded that the set of assets acquired did not meet the definition of a business and, therefore, accounted for the transaction as an asset acquisition.
+Added: The assets acquired in the transaction were recorded at their allocated costs based on their relative fair values.
+Added: The allocated cost of the IPR&D acquired was $ 9.4 million, which was charged to research and development expense as it had no alternative future use at the time of the acquisition.
+Added: The allocated cost of the fixed assets was $ 1.1 million and was capitalized within property and equipment.
+Added: We recorded income tax expense of $ 7.9 million and $ 24.8 million for the three and nine months ended September 30, 2025 , respectively, compared to income tax expense of $ 5.6 million and $ 9.6 million for the three and nine months ended September 30, 2024, respectively.
+Added: The Company’s effective income tax rate for the nine months ended September 30, 2025 was 18.8 % co mpared to 40.5 % for the same period in 2024.
+Added: The income tax expense for the nine months ended September 30, 2025 and 2024 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, 2025 was lower than the expense computed at the U.S.
+Added: federal statutory income tax rate due primarily to foreign-derived intangible income tax deduction and research and development credits, partially offset by nondeductible expenses and state income taxes.
Segment Reporting
10 unchanged sentences
The CODM does not review assets at a different level or category than the amounts disclosed in the consolidated balance sheets.
−Removed: The table below presents the financial information used by the CODM to assess performance, which reconciles to the consolidated net income (loss):
−Removed: Three months ended June 30,
−Removed: Six Months Ended June 30,
+Added: The table below presents the financial information used by the CODM to assess performance, which reconciles to the consolidated net income:
+Added: Three months ended September 30,
+Added: Nine Months Ended September 30,
(In thousands)
6 unchanged sentences
Research and development - Internal expenses
+Added: Research and development - Acquired IPR&D
Changes in fair values of equity method investments, net
3 unchanged sentences
Other expense, net
−Removed: Income tax expense (benefit), net
−Removed: Consolidated net income (loss)
+Added: Income tax expense, net
+Added: Consolidated net income
+Added: Subsequent Events
+Added: On October 7, 2025, ITH entered into a Series B Preferred Stock Purchase Agreement with Beacon Biosignals, Inc.
+Added: (“Beacon”) to purchase 1,448,303 shares of Beacon Series B preferred stock for $ 17.5 million.
+Added: Beacon is an AI-driven neurotechnology company developing treatments for neurological, psychiatric and sleep disorders.
+Added: On November 3, 2025, our board of directors authorized a new share repurchase program under which we may repurchase up to $ 125.0 million of our outstanding shares of common stock.
+Added: The timing and amount of any share repurchases under the share repurchase program will be subject to the Securities and Exchange Commission Rule 10b-18 and Rule 10b5-1 requirements and will be determined by our management in its discretion based on ongoing assessments of the capital needs of the business, the market price of our common stock, prevailing stock prices, general market conditions, and other considerations.
+Added: Share repurchases under the program may be made through a variety of methods, which may include open market purchases, privately negotiated transactions, in block trades, accelerated share repurchase transactions, exchange transactions, or any combination thereof or by other means in accordance with federal securities laws.
+Added: 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.
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.