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What changed in Innoviva, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Innoviva, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+377 added−424 removedSource: 10-K (2026-02-25) vs 10-K (2025-02-26)

Top changes in Innoviva, Inc.'s 2025 10-K

377 paragraphs added · 424 removed · 293 edited across 9 sections

Item 1. Business

Business — how the company describes what it does

94 edited+25 added−42 removed233 unchanged
Biggest changeIn addition, as described above, under the GAIN Act a new drug that is designated as a QIDP is eligible for an additional five years of exclusivity to be added to certain other exclusivity periods that the application may qualify for upon approval, specifically five-year exclusivity, three-year exclusivity, and orphan exclusivity. 29 Table of Contents Pediatric Exclusivity The Best Pharmaceuticals for Children Act provides for an additional six months of exclusivity, which is added on to patent and exclusivity periods in effect at the time the pediatric exclusivity award is granted, if a sponsor conducts clinical trials in children in response to a written request from the FDA, or a Written Request.
Biggest changeIn addition, as described above, under the GAIN Act a new drug that is designated as a QIDP is eligible for an additional five years of exclusivity to be added to certain other exclusivity periods that the application may qualify for upon approval, specifically five-year exclusivity, three-year exclusivity, and orphan exclusivity.
Failure to comply with the FDCA and other applicable U.S. requirements at any time during the product development process, approval process or after approval may subject us to a variety of administrative or judicial sanctions, any of which could have a material adverse effect on us.
Failure to comply with the FDCA and other applicable U.S. requirements at any time during the product development process, approval process or after approval may subject us to a variety of administrative or judicial sanctions, any of which could have a material adverse effect on us.
Phase 3 trial design TOC=Test of Cure; IM=intra-muscular; CRO-AZI=ceftriaxone and azithromycin Efficacy and safety results from Phase 3 trial (1) TEAE=Treatment emergent adverse event; CRO-AZI=ceftriaxone and azithromycin (1) Company data, published on November 6, 2023 Phase 2 clinical proof-of-concept trial: We have completed a multi-center, randomized, open-label Phase 2 clinical trial comparing a single oral dose of 2.0g or 3.0g of zoliflodacin to 500mg intramuscular ceftriaxone for the treatment of uncomplicated gonorrhea.
Phase 3 trial design TOC=Test of Cure; IM=intra-muscular; CRO-AZI=ceftriaxone and azithromycin Efficacy and safety results from Phase 3 trial (1) TEAE=Treatment emergent adverse event; CRO-AZI=ceftriaxone and azithromycin (1) Company data, published on November 6, 2023 Phase 2 clinical proof-of-concept trial: We completed a multi-center, randomized, open-label Phase 2 clinical trial comparing a single oral dose of 2.0g or 3.0g of zoliflodacin to 500mg intramuscular ceftriaxone for the treatment of uncomplicated gonorrhea.
The TOC visit was conducted 25 to 31 calendar days after the first dose of the study drug was administered. 12 Table of Contents IGNITE1 and IGNITE4 Study Design (1) Solomkin et al, JAMA Surgery 2017; 152(3):224-232 (2) Solomkin et al, Clinical Infectious Diseases 2018; 69(6):921-9 (3) TOC visit was conducted 25 to 31 calendar days after the first dose of the study drug was administered XERAVA demonstrated statistical noninferiority in clinical cure rate in the micro-ITT population, which included all randomized subjects who had baseline bacterial pathogens that caused cIAIs and against at least one of which the investigational drug has in vitro (in a test tube) antibacterial activity (N=846).
IGNITE1 and IGNITE4 Study Design (1) Solomkin et al, JAMA Surgery 2017; 152(3):224-232 (2) Solomkin et al, Clinical Infectious Diseases 2018; 69(6):921-9 (3) TOC visit was conducted 25 to 31 calendar days after the first dose of the study drug was administered 16 Table of Contents XERAVA ® demonstrated statistical noninferiority in clinical cure rate in the micro-ITT population, which included all randomized subjects who had baseline bacterial pathogens that caused cIAIs and against at least one of which the investigational drug has in vitro (in a test tube) antibacterial activity (N=846).
For example, in the U.S. and most major foreign markets, drugs like GIAPREZA ® , XERAVA ® and XACDURO ® that are administered in the hospital must be purchased by the hospital and generally are not reimbursed by third-party payors. Hospitals instead are reimbursed for patient cases based on patients’ diagnosed conditions under the U.S.
For example, in the U.S. and most major foreign markets, drugs like GIAPREZA ® , XERAVA ® , XACDURO ® and ZEVTERA ® that are administered in the hospital must be purchased by the hospital and generally are not reimbursed by third-party payors. Hospitals instead are reimbursed for patient cases based on patients’ diagnosed conditions under the U.S.
Manufacturing Manufacturing of RELVAR ® /BREO ® ELLIPTA ® (FF/VI) and ANORO ® ELLIPTA ® (UMEC/VI) is performed by GSK. We rely on third-party manufacturers to produce GIAPREZA ® , XERAVA ® , and XACDURO ® and expect to continue to do so in the foreseeable future to meet our development and commercial needs.
Manufacturing Manufacturing of RELVAR ® /BREO ® ELLIPTA ® (FF/VI) and ANORO ® ELLIPTA ® (UMEC/VI) is performed by GSK. We rely on third-party manufacturers to produce GIAPREZA ® , XACDURO ® , XERAVA ® and NUZOLVENCE ® , and expect to continue to do so in the foreseeable future to meet our development and commercial needs.
Administration of a high-fat meal was associated with an increase in zoliflodacin plasma concentration, suggesting that zoliflodacin could be administered with or without food. Preclinical Data We have generated biochemical, microbiological and in vivo data on zoliflodacin.
Administration of a high-fat meal was associated with an increase in zoliflodacin plasma concentration, suggesting that zoliflodacin could be administered with or without food. Preclinical Data We generated biochemical, microbiological and in vivo data on zoliflodacin.
Lancet Infect Dis. 2023 May 11:S1473-3099(23)00184-6 17 Table of Contents Selected Adverse Reactions Occurring at a Frequency of >5% in Trial 1 (1) (1) Charts, graphs and tables derived from FDA prescribing information (2) Liver test abnormalities include the following adverse reactions: liver function test abnormal, hepatic function abnormal, increased transaminases, ALT increased, and AST increased; Acute kidney injury includes the following adverse reactions: renal impairment, blood Cr increased, toxic nephropathy, renal failure and acute kidney injury.
Lancet Infect Dis. 2023 May 11:S1473-3099(23)00184-6 14 Table of Contents Selected Adverse Reactions Occurring at a Frequency of >5% in Trial 1 (1) (1) Charts, graphs and tables derived from FDA prescribing information (2) Liver test abnormalities include the following adverse reactions: liver function test abnormal, hepatic function abnormal, increased transaminases, ALT increased, and AST increased; Acute kidney injury includes the following adverse reactions: renal impairment, blood Cr increased, toxic nephropathy, renal failure and acute kidney injury.
IGNITE1 and IGNITE4 Primary Endpoint Results (1) (1) Charts, graphs and tables derived from FDA prescribing information (2) Noninferiority margins of 10% and 12.5% were used for IGNITE1 and IGNITE4, respectively 13 Table of Contents Clinical cure rates across patients with gram-negative, gram-positive and anaerobic pathogens, including those with resistant strains, are shown in the following tables.
IGNITE1 and IGNITE4 Primary Endpoint Results (1) (1) Charts, graphs and tables derived from FDA prescribing information (2) Noninferiority margins of 10% and 12.5% were used for IGNITE1 and IGNITE4, respectively 17 Table of Contents Clinical cure rates across patients with gram-negative, gram-positive and anaerobic pathogens, including those with resistant strains, are shown in the following tables.
The trial compared a single, oral, 3g dose of zoliflodacin to a globally recognized standard of care regimen (500mg ceftriaxone IM plus 1g oral azithromycin) for the treatment of uncomplicated gonorrhea. 23 Table of Contents Zoliflodacin met the prespecified statistical test for non-inferiority when compared to ceftriaxone and oral azithromycin (5.31% (95%CI 1.38, 8.65%)).
The trial compared a single, oral, 3g dose of zoliflodacin to a globally recognized standard of care regimen (500mg ceftriaxone IM plus 1g oral azithromycin) for the treatment of uncomplicated gonorrhea. 21 Table of Contents Zoliflodacin met the prespecified statistical test for non-inferiority when compared to ceftriaxone and oral azithromycin (5.31% (95%CI 1.38, 8.65%)).
Antibiotics remain the mainstay for treating uncomplicated gonorrhea caused by N. gonorrhoeae. 22 Table of Contents N. gonorrhoeae is the bacterial pathogen responsible for gonorrhea and has a strong propensity for uptake of chromosomal DNA from other genera of Neisseria which allows the bacteria to accumulate many mutations in chromosomal genes leading to frequent resistance of antibiotics.
Antibiotics remain the mainstay for treating uncomplicated gonorrhea caused by N. gonorrhoeae. 20 Table of Contents N. gonorrhoeae is the bacterial pathogen responsible for gonorrhea and has a strong propensity for uptake of chromosomal DNA from other genera of Neisseria which allows the bacteria to accumulate many mutations in chromosomal genes leading to frequent resistance of antibiotics.
As required by law, the settlement is subject to review by the U.S. Department of Justice and the Federal Trade Commission. 21 Table of Contents Under the Generating Antibiotic Incentives Now (“GAIN”) provisions of the FDA Safety and Innovation Act (“FDASIA”), the FDA may designate a product as a qualified infectious disease product (“QIDP”).
As required by law, the settlement is subject to review by the U.S. Department of Justice and the Federal Trade Commission. 24 Table of Contents Under the Generating Antibiotic Incentives Now (“GAIN”) provisions of the FDA Safety and Innovation Act (“FDASIA”), the FDA may designate a product as a qualified infectious disease product (“QIDP”).
In Part B, the 28-day all-cause mortality was 17.9% (5/28) and consistent with that observed in Part A. 15 Table of Contents Safety analyses from a total of 177 patients treated with XACDURO suggested that XACDURO was generally well-tolerated with a favorable safety profile compared to colistin.
In Part B, the 28-day all-cause mortality was 17.9% (5/28) and consistent with that observed in Part A. 12 Table of Contents Safety analyses from a total of 177 patients treated with XACDURO ® suggested that XACDURO ® was generally well-tolerated with a favorable safety profile compared to colistin.
(“Tetraphase”), and is marketed in Europe and Great Britain by PAION on behalf of Tetraphase and is marketed in mainland China, 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 by Everest Medicines Limited (“Everest”). cIAIs are the second most common source of severe sepsis in the ICU cIAIs are defined as consequences of perforations of the gastrointestinal tract that result in contamination of the peritoneal space.
(“Tetraphase”), and is marketed in Europe and Great Britain by PAION on behalf of Tetraphase and is marketed in mainland China, 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 by Everest Medicines Limited (“Everest”). 15 Table of Contents cIAIs are the second most common source of severe sepsis in the ICU. cIAIs are defined as consequences of perforations of the gastrointestinal tract that result in contamination of the peritoneal space.
Part B is deemed as not relevant to the HABP / VABP indication 16 Table of Contents ATTACK Primary Endpoint Results (1) IMI=Imipenem (1) Charts, graphs and tables derived from FDA prescribing information. Kaye et al.
Part B is deemed as not relevant to the HABP / VABP indication 13 Table of Contents ATTACK Primary Endpoint Results (1) IMI=Imipenem (1) Charts, graphs and tables derived from FDA prescribing information. Kaye et al.
The issued U.S. patents, and the patent that may issue from the pending U.S. patent application, will have an expiration date of August 7, 2029, absent any disclaimers, extensions, or adjustments of patent term. The term of one of the U.S. patents has received 508 days of patent term adjustment.
The issued U.S. patents, and the patent that may issue from the pending U.S. patent application, will have an expiration date of August 7, 2029, absent any disclaimers, extensions, or adjustments of patent term. The term of one of the U.S. patents has received 315 days of patent term adjustment.
Zoliflodacin targets the validated mechanism of action of the fluoroquinolone class of antibiotics but does so in a novel manner to avoid existing fluoroquinolone resistance. In November 2023, we reported positive top-line data results of a pivotal Phase 3 trial.
NUZOLVENCE ® targets the validated mechanism of action of the fluoroquinolone class of antibiotics but does so in a novel manner to avoid existing fluoroquinolone resistance. In November 2023, we reported positive top-line data results of a pivotal Phase 3 trial.
Under the Long-Acting Beta2 Agonist (“LABA”) Collaboration Agreement, Innoviva is entitled to receive royalties from GSK on sales of RELVAR ® /BREO ® ELLIPTA ® as follows: 15% on the first $3.0 billion of annual global net sales and 5% for all annual global net sales above $3.0 billion; and royalties from the sales of ANORO ® ELLIPTA ® , which tier upward at a range from 6.5% to 10%.
Under the Long-Acting Beta-2 Agonist (“LABA”) Collaboration Agreement, Innoviva is entitled to receive royalties from GSK on sales of RELVAR ® /BREO ® ELLIPTA ® as follows: 15% on the first $3.0 billion of annual global net sales and 5% for all annual global net sales above $3.0 billion; and royalties from the sales of ANORO ® ELLIPTA ® , which tier upward at a range from 6.5% to 10%.
If a complete response letter is issued, the applicant may either resubmit the NDA, addressing all of the deficiencies identified in the letter, or withdraw the application. 28 Table of Contents Expedited Review and Approval The FDA has various programs, including Fast Track and priority review, which are intended to expedite or simplify the process for developing and/or reviewing drugs.
If a complete response letter is issued, the applicant may either resubmit the NDA, addressing all of the deficiencies identified in the letter, or withdraw the application. Expedited Review and Approval The FDA has various programs, including Fast Track and priority review, which are intended to expedite or simplify the process for developing and/or reviewing drugs.
We are also subject to various laws and regulations relating to safe working conditions, laboratory practices and the experimental use of animals. 34 Table of Contents Intellectual Property Our commercial success depends in part on our ability to obtain and maintain proprietary or intellectual property protection for our product candidates, our core technologies, and other know-how.
We are also subject to various laws and regulations relating to safe working conditions, laboratory practices and the experimental use of animals. Intellectual Property Our commercial success depends in part on our ability to obtain and maintain proprietary or intellectual property protection for our product candidates, our core technologies, and other know-how.
The results of this clinical trial were published in The New England Journal of Medicine in 2018. 24 Table of Contents Phase 1 clinical trial: We evaluated zoliflodacin in two Phase 1 clinical trials studying 72 healthy volunteers in total.
The results of this clinical trial were published in The New England Journal of Medicine in 2018. 22 Table of Contents Phase 1 clinical trial: We evaluated zoliflodacin in two Phase 1 clinical trials studying 72 healthy volunteers in total.
If we are unable to successfully change treatment practices, the commercial prospects for ZEVTERA ® will be limited, and our business may suffer. 20 Table of Contents Regulatory Exclusivity GIAPREZA ® , XERAVA ® and XACDURO ® are New Chemical Entities (“NCEs”) approved by the U.S. FDA.
If we are unable to successfully change treatment practices, the commercial prospects for ZEVTERA ® will be limited, and our business may suffer. 23 Table of Contents Regulatory Exclusivity GIAPREZA ® , XACDURO ® , XERAVA ® , ZEVTERA ® and NUZOLVENCE ® are New Chemical Entities (“NCEs”) approved by the U.S. FDA.
Zhen earned a Bachelor of Science degree in Business Administration with a concentration in Accounting from San Francisco State University. She is a member of the American Institute of Certified Public Accountants (AICPA) and a member of the California Society of Certified Public Accountants (CalCPA). Code of Business Conduct The Company has adopted the Innoviva, Inc.
Zhen earned a Bachelor of Science degree in Business Administration with a concentration in Accounting from San Francisco State University. She is a member of the American Institute of Certified Public Accountants (AICPA) and a member of the California Society of Certified Public Accountants (CalCPA). 37 Table of Contents Code of Business Conduct The Company has adopted the Innoviva, Inc.
These sanctions could include: • refusal to approve pending applications; • withdrawal of an approval; • imposition of a clinical hold; • warning letters, untitled letters and similar communications; • product seizures or recalls; or • total or partial suspension of production or distribution, or injunctions, fines, restitution, disgorgement of profits or civil or criminal investigations and penalties brought by the FDA and the Department of Justice, or DOJ, or other The process required by the FDA before a drug may be marketed in the United States generally involves the following: • completion of preclinical laboratory tests, animal studies and formulation studies conducted according to Good Laboratory Practices or other applicable regulations; • submission to the FDA of an IND application, which must become effective before human clinical trials may begin; • approval by an independent institutional review board, or IRB, representing each clinical site before each clinical trial may be initiated; • performance of adequate and well-controlled human clinical trials to establish the safety and efficacy of the proposed drug for its intended use, conducted in accordance with current good clinical practices, or cGCP, which are ethical and scientific quality standards and FDA requirements for conducting, recording and reporting clinical trials to assure that the rights, safety and well-being of trial participants are protected; • preparation and submission to the FDA of an NDA; • satisfactory completion of one or more FDA inspections of the manufacturing facility or facilities at which the product is produced to assess compliance with current good manufacturing practices, or cGMP, requirements to assure that the facilities, methods and controls are adequate to preserve the drug’s safety, identity, strength, quality and purity; and • FDA review and approval of the NDA. 26 Table of Contents Once a pharmaceutical candidate is identified for development, it enters the preclinical testing stage.
These sanctions could include: • refusal to approve pending applications; • withdrawal of an approval; • imposition of a clinical hold; • warning letters, untitled letters and similar communications; • product seizures or recalls; or • total or partial suspension of production or distribution, or injunctions, fines, restitution, disgorgement of profits or civil or criminal investigations and penalties brought by the FDA and the Department of Justice, or DOJ, or other The process required by the FDA before a drug may be marketed in the United States generally involves the following: • completion of preclinical laboratory tests, animal studies and formulation studies conducted according to Good Laboratory Practices or other applicable regulations; • submission to the FDA of an IND application, which must become effective before human clinical trials may begin; • approval by an independent institutional review board, or IRB, representing each clinical site before each clinical trial may be initiated; • performance of adequate and well-controlled human clinical trials to establish the safety and efficacy of the proposed drug for its intended use, conducted in accordance with current good clinical practices, or cGCP, which are ethical and scientific quality standards and FDA requirements for conducting, recording and reporting clinical trials to assure that the rights, safety and well-being of trial participants are protected; • preparation and submission to the FDA of an NDA; • satisfactory completion of one or more FDA inspections of the manufacturing facility or facilities at which the product is produced to assess compliance with current good manufacturing practices, or cGMP, requirements to assure that the facilities, methods and controls are adequate to preserve the drug’s safety, identity, strength, quality and purity; and • FDA review and approval of the NDA.
A clinical hold may occur at any time during the life of an IND and may affect one or more specific studies or all studies conducted under the IND. All clinical trials must be conducted under the supervision of one or more qualified investigators in accordance with cGCP.
A clinical hold may occur at any time during the life of an IND and may affect one or more specific studies or all studies conducted under the IND. 26 Table of Contents All clinical trials must be conducted under the supervision of one or more qualified investigators in accordance with cGCP.
ITEM 1. BUSINESS Overview Innoviva, Inc. (“Innoviva”, the “Company”, the “Registrant” or “we” and other similar pronouns) is a company with a core royalties portfolio, a leading critical care and infectious disease platform known as Innoviva Specialty Therapeutics (“IST”), and a portfolio of strategic investments in other healthcare assets.
ITEM 1. BUSINESS Overview Innoviva, Inc. (“Innoviva”, the “Company”, the “Registrant” or “we” and other similar pronouns) is a diversified biopharmaceutical company with a core royalties portfolio, a leading critical care and infectious disease platform known as Innoviva Specialty Therapeutics (“IST”), and a portfolio of strategic healthcare assets.
In this event, the NDA must be resubmitted with the additional information. The resubmitted application also is subject to completeness review before the FDA accepts it for filing. Once the submission is accepted for filing, the FDA begins an in-depth review. NDAs receive either standard or priority review.
In this event, the NDA must be resubmitted with the additional information. The resubmitted application also is subject to completeness review before the FDA accepts it for filing. 27 Table of Contents Once the submission is accepted for filing, the FDA begins an in-depth review. NDAs receive either standard or priority review.
In addition, we own other strategic healthcare assets, such as a significant stake in Armata Pharmaceuticals, Inc., a leader in development of bacteriophages with potential use across a range of infectious and other serious diseases. We also have economic interests in other healthcare companies.
In addition, we own other strategic healthcare assets, such as a significant stake in Armata Pharmaceuticals, Inc., a leader in development of bacteriophages with potential use across a range of infectious and other serious diseases. We also have economic interests in other healthcare companies through our portfolio approach.
We continue to diversify our royalty management business through actively pursuing opportunistic acquisitions of promising companies and assets in the healthcare industry and enhancing the returns on our capital. 5 Table of Contents Our Royalty Product Portfolio Our Relationship with GSK LABA Collaboration In November 2002, we entered into our LABA Collaboration Agreement with GSK to develop and commercialize once‑daily products for the treatment of chronic obstructive pulmonary disease (“COPD”) and asthma.
We continue to diversify our royalty management business by actively pursuing opportunistic investments in, and acquisitions of, promising assets in the healthcare industry to enhance the returns on our capital. 5 Table of Contents Our Royalty Product Portfolio Our Relationship with GSK LABA Collaboration In November 2002, we entered into our LABA Collaboration Agreement with GSK to develop and commercialize once‑daily products for the treatment of chronic obstructive pulmonary disease (“COPD”) and asthma.
Human Capital As of December 31, 2024, we had 127 employees, all of whom were full-time employees. None of our employees are represented by a labor union or covered by a collective bargaining agreement, and we consider our relations with our employees to be good.
Human Capital As of December 31, 2025, we had 159 employees, all of whom were full-time employees. None of our employees are represented by a labor union or covered by a collective bargaining agreement, and we consider our relations with our employees to be good.
The process of obtaining regulatory approvals and the subsequent compliance with applicable federal, state, local and foreign statutes and regulation require the expenditure of substantial time and financial resources. 25 Table of Contents U.S.
The process of obtaining regulatory approvals and the subsequent compliance with applicable federal, state, local and foreign statutes and regulation require the expenditure of substantial time and financial resources. U.S.
As of February 14, 2025, we also filed applications for Supplementary Protection Certificates based on European Patent No. 2323972 covering the composition of matter and use of XERAVA ® . Some applications have been granted and others are pending.
As of February 13, 2026, we also filed applications for Supplementary Protection Certificates based on European Patent No. 2323972 covering the composition of matter and use of XERAVA ® . Some applications have been granted and others are pending.
(4) U.S.: XERAVA is a tetracycline class antibacterial indicated for the treatment of complicated intra-abdominal infections (“cIAI”) in patients 18 years of age and older. (5) European Union: XERAVA is indicated for the treatment of cIAI in adults.
(4) U.S.: XERAVA is a tetracycline class antibacterial indicated for the treatment of complicated intra-abdominal infections (“cIAI”) in patients 18 years of age and older.
Our Integrated Critical Care / Infectious Disease Assets Commercial and Marketed Products Our critical care and infectious disease portfolio was formed through the 2022 acquisitions of Entasis and La Jolla, which we have continued to grow through our license agreement with Basilea. It comprises four differentiated commercial stage products and a pipeline.
Our Integrated Critical Care / Infectious Disease Assets Commercial and Marketed Products Our critical care and infectious disease portfolio was formed through the 2022 acquisitions of Entasis Therapeutics and La Jolla Pharmaceutical, and we have continued to grow it through our license agreement with Basilea. The portfolio comprises five differentiated commercial stage products.
(6) U.S.: XACDURO is a co-packaged product containing sulbactam, a beta-lactam antibacterial and beta lactamase inhibitor, and durlobactam, a beta lactamase inhibitor, indicated 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.
(5) European Union: XERAVA is indicated for the treatment of cIAI in adults. 8 Table of Contents (6) U.S.: XACDURO is a co-packaged product containing sulbactam, a beta-lactam antibacterial and beta lactamase inhibitor, and durlobactam, a beta lactamase inhibitor, indicated 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.
Under the terms of the agreement, we were granted exclusive marketing rights to ZEVTERA ® in the U.S. in exchange for Basilea receiving a $4.0 million upfront payment in addition to tiered royalties and milestones on net sales in the U.S. if certain targets are met. We anticipate commercializing ZEVTERA ® in mid-year 2025.
Under the terms of the agreement, we were granted exclusive marketing rights to ZEVTERA ® in the U.S. in exchange for Basilea receiving a $4.0 million upfront payment in addition to tiered royalties and milestones on net sales in the U.S. if certain targets are met. We commercially launched ZEVTERA ® in the U.S. in the third quarter of 2025.
Non inferiority of zoliflodacin was demonstrated within the pre-specified margin of 12% and, furthermore, within the margin of 10% as specified in U.S. Food and Drug Administration guidance.
Non inferiority of zoliflodacin was demonstrated within the pre-specified margin of 12% and, furthermore, within the margin of 10% as specified in U.S. FDA guidance.
XACDURO ® As of February 14, 2025, we owned 4 issued U.S. patents, 118 issued foreign patents, 2 pending foreign patent applications, and 1 pending priority patent cooperation treaty (“PCT”) application relating to XACDURO ® .
XACDURO ® As of February 13, 2026, we owned 4 issued U.S. patents, 118 issued foreign patents, 2 pending foreign patent applications, 1 pending U.S. patent application, and 1 pending patent cooperation treaty (“PCT”) application relating to XACDURO ® .
The primary and main secondary outcomes are shown below: 19 Table of Contents The efficacy of ZEVTERA ® in the treatment of adult patients with community-acquired bacterial pneumonia (CABP) was demonstrated in a randomized, controlled, double-blind, multinational, multicenter study (Trial 3) (NCT00326287). 638 adults hospitalized with CABP and requiring IV antibacterial treatment for at least 3 days were included in the intent-to-treat (ITT) population, comparing ZEVTERA ® 667 mg (equivalent to 500 mg of ceftobiprole) IV every 8 hours to ceftriaxone (2 grams IV every 24 hours) with optional linezolid (600 mg IV every 12 hours) for the coverage of resistant gram-positive pathogens, including methicillin-resistant S. aureus (MRSA).
Early clinical response required a reduction of the primary skin lesion by at least 20%, survival for at least 72 hours, and the absence of concomitant antibacterial treatment or additional unplanned surgery. 19 Table of Contents The primary and main secondary outcomes are shown below: The efficacy of ZEVTERA ® in the treatment of adult patients with community-acquired bacterial pneumonia (CABP) was demonstrated in a randomized, controlled, double-blind, multinational, multicenter study (Trial 3) (NCT00326287). 638 adults hospitalized with CABP and requiring IV antibacterial treatment for at least 3 days were included in the intent-to-treat (ITT) population, comparing ZEVTERA ® 667 mg (equivalent to 500 mg of ceftobiprole) IV every 8 hours to ceftriaxone (2 grams IV every 24 hours) with optional linezolid (600 mg IV every 12 hours) for the coverage of resistant gram-positive pathogens, including methicillin-resistant S. aureus (MRSA).
There are at least two additional early-stage clinical programs developing investigational therapies for multidrug-resistant Acinetobacter infections. If we are unable to successfully change treatment practices, the commercial prospects for XACDURO ® will be limited, and our business may suffer.
There are at least two additional early-stage clinical programs developing investigational therapies for multidrug-resistant Acinetobacter infections. If we are unable to successfully change treatment practices, the commercial prospects for XACDURO ® will be limited, and our business may suffer. NUZOLVENCE ® is a single oral dose treatment for uncomplicated gonorrhea.
Gonorrhea is an area of significant medical need and zoliflodacin is the only novel single dose treatment in development that provides a potential monotherapy oral alternative to intramuscular injections of ceftriaxone for the treatment of gonorrhea, including infections caused by drug-resistant strains.
Gonorrhea is an area of significant medical need and NUZOLVENCE ® is the only approved novel single dose treatment that provides monotherapy oral alternative to intramuscular injections of ceftriaxone for the treatment of gonorrhea, including infections caused by drug-resistant strains.
All-cause mortality: Kaplan-Meier analysis of time to death by day 28 (1) (1) Kaye et al. Lancet Infect Dis. 2023 May 11:S1473-3099(23)00184-6 ZEVTERA ® ZEVTERA ® (ceftobiprole) was approved by the U.S.
All-cause mortality: Kaplan-Meier analysis of time to death by day 28 (1) (1) Kaye et al. Lancet Infect Dis. 2023 May 11:S1473-3099(23)00184-6 XERAVA ® (eravacycline) XERAVA ® (eravacycline) for injection is approved by the U.S.
In addition, certain marketing practices, including off-label promotion, have also been alleged to violate false claims laws. 32 Table of Contents The federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, created additional federal requirements that prohibit among other actions, knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program, including private third-party payors, knowingly and willfully embezzling or stealing from a healthcare benefit program, willfully obstructing a criminal investigation of a healthcare offense, and knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false, fictitious or fraudulent statement in connection with the delivery of or payment for healthcare benefits, items or services.
The federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, created additional federal requirements that prohibit among other actions, knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program, including private third-party payors, knowingly and willfully embezzling or stealing from a healthcare benefit program, willfully obstructing a criminal investigation of a healthcare offense, and knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false, fictitious or fraudulent statement in connection with the delivery of or payment for healthcare benefits, items or services.
In addition, several firms have developed and launched new formulations of Advair/Seretide (salmeterol /fluticasone propionate) and Symbicort (formoterol fumerate/budesonide) which may be marketed as generics or branded generics relative to the existing products from GSK and AstraZeneca, respectively. All of these efforts represent potential competition for any of our partnered products.
In addition, several firms have developed and launched new formulations of Advair/Seretide (salmeterol /fluticasone propionate) and Symbicort (formoterol fumerate/budesonide) which may be marketed as generics or branded generics relative to the existing products from GSK and AstraZeneca, respectively.
(3) European Union: GIAPREZA is indicated for the treatment of refractory hypotension in adults with septic or other distributive shock who remain hypotensive despite adequate volume restitution and application of catecholamines and other available vasopressor therapies.
(2) U.S.: GIAPREZA is a vasoconstrictor to increase blood pressure in adults with septic or other distributive shock. (3) European Union: GIAPREZA is indicated for the treatment of refractory hypotension in adults with septic or other distributive shock who remain hypotensive despite adequate volume restitution and application of catecholamines and other available vasopressor therapies.
XERAVA ® As of February 14, 2025, we owned 2 issued U.S. patents, 1 pending U.S. patent application, 17 issued foreign patents and 4 pending foreign patent applications relating to XERAVA ® .
XERAVA ® As of February 13, 2026, we owned 2 issued U.S. patents, 1 pending U.S. patent application, 17 issued foreign patents and 3 pending foreign patent applications relating to XERAVA ® .
In the absence of a court ruling, the 30-month stay will be extended by such amount of time (if any) that is required for 7.5 years to have elapsed from the date of NDA approval of the NCE. ZEVTERA ® was provided ten years of market exclusivity by the FDA from the date of its approval in April 2024.
In the absence of a court ruling, the 30-month stay will be extended by such amount of time (if any) that is required for 7.5 years to have elapsed from the date of NDA approval of the NCE.
This legislation imposes increased compliance obligations and regulatory risk, including the potential for significant fines for noncompliance. Healthcare and Other Reform In the United States, there have been and continue to be a number of significant legislative initiatives to contain healthcare costs.
This legislation imposes increased compliance obligations and regulatory risk, including the potential for significant fines for noncompliance. Healthcare and Other Reform In the United States, there have been and continue to be significant legislative and regulatory initiatives at the federal and state levels to contain healthcare costs and reform the delivery of and payment for healthcare products and services.
(7) U.S.: ZEVTERA is a cephalosporin antibacterial indicated for the treatment of: Adult patients with Staphylococcus aureus bloodstream infections (bacteremia) (SAB), including those with right-sided infective endocarditis, adult patients with acute bacterial skin and skin structure infections (ABSSSI), and adult and pediatric patients (3 months to less than 18 years old) with community-acquired bacterial pneumonia (CABP). 8 Table of Contents (8) European Union: ZEVTERA is a cephalosporin antibacterial indicated for the treatment of hospital-acquired pneumonia (HAP, excluding ventilator-associated pneumonia, VAP) and community-acquired pneumonia (CAP) in patients 18 years of age and older.
(8) U.S.: ZEVTERA is a cephalosporin antibacterial indicated for the treatment of: Adult patients with Staphylococcus aureus bloodstream infections (bacteremia) (SAB), including those with right-sided infective endocarditis, adult patients with acute bacterial skin and skin structure infections (ABSSSI), and adult and pediatric patients (3 months to less than 18 years old) with community-acquired bacterial pneumonia (CABP).
Information about our Executive Officers The following table sets forth the name, age, and position of each of our executive officers as of February 14, 2025: Name Age Positions Held Pavel Raifeld 41 Chief Executive Officer Stephen Basso 59 Chief Financial Officer Marianne Zhen 56 Chief Accounting Officer 37 Table of Contents Pavel Raifeld , CFA, was appointed Chief Executive Officer in May 2020.
Information about our Executive Officers The following table sets forth the name, age, and position of each of our executive officers as of February 13, 2026: Name Age Positions Held Pavel Raifeld 42 Chief Executive Officer Stephen Basso 60 Chief Financial Officer Marianne Zhen 57 Chief Accounting Officer Pavel Raifeld , CFA, was appointed Chief Executive Officer in May 2020.
Patent Term Restoration and Data Exclusivity Depending upon the timing, duration and specifics of FDA approval of the use of our drugs, some of our U.S. patents may be eligible for limited patent term extension under the Drug Price Competition and Patent Term Restoration Act of 1984, commonly referred to as the Hatch-Waxman Amendments.
Zoliflodacin has also been designated as a QIDP by the FDA for the treatment of uncomplicated gonorrhea. 28 Table of Contents Patent Term Restoration and Data Exclusivity Depending upon the timing, duration and specifics of FDA approval of the use of our drugs, some of our U.S. patents may be eligible for limited patent term extension under the Drug Price Competition and Patent Term Restoration Act of 1984, commonly referred to as the Hatch-Waxman Amendments.
As of February 14, 2025, the intellectual property portfolio relating to GIAPREZA ® also included 4 issued U.S. patents, 7 pending U.S. patent applications, 8 issued foreign patents and 11 pending foreign patent applications.
As of February13, 2026, the intellectual property portfolio relating to GIAPREZA ® also included 4 issued U.S. patents, 7 pending U.S. patent applications, 10 issued foreign patents and 7 pending foreign patent applications.
The failure to comply with the applicable requirements at any time during the product development process, approval process or after approval may subject an applicant to a variety of administrative or judicial sanctions, such as the FDA’s refusal to approve pending applications, withdrawal of an approval, imposition of a clinical hold, issuance of warning letters and untitled letters, product recalls, product seizures, total or partial suspension of production or distribution injunctions, fines, refusals of government contracts, restitution, disgorgement of profits or civil or criminal penalties.
The failure to comply with the applicable requirements at any time during the product development process, approval process or after approval may subject an applicant to a variety of administrative or judicial sanctions, such as the FDA’s refusal to approve pending applications, withdrawal of an approval, imposition of a clinical hold, issuance of warning letters and untitled letters, product recalls, product seizures, total or partial suspension of production or distribution injunctions, fines, refusals of government contracts, restitution, disgorgement of profits or civil or criminal penalties. 25 Table of Contents Approval Processes In the United States, the FDA regulates drugs under the Federal Food, Drug and Cosmetic Act, or the FDCA, the Public Health Service Act, or PHSA, and implementing regulations.
In addition, in April 2016, the FDA issued a draft guidance document covering Fluticasone Furoate/Vilanterol Trifenatate (FF/VI), the active ingredients used in RELVAR ® /BREO ® ELLIPTA ® .
In April 2016, the FDA issued a draft guidance document covering Fluticasone Furoate/Vilanterole Trinenatate (FF/VI), the active ingredients used in RELVAR ® /BREO ® ELLIPTA ® . In March 2020, the FDA issued a draft guidance on Umeclidinium Bromide/Vilanterol Trifenatate (UMEC/VI), the active ingredients used in ANORO ® ELLIPTA ® .
These sanctions could include: • refusal to approve pending applications; • withdrawal of an approval; • imposition of a clinical hold; • warning letters, untitled letters and similar communications; • product seizures or recalls; • total or partial suspension of production or distribution; or • injunctions, fines, restitution, disgorgement of profits or civil or criminal investigations and penalties brought by the FDA and DOJ, or other governmental entities. 30 Table of Contents From time to time, legislation is drafted, introduced and passed in Congress that could significantly change the statutory provisions governing the approval, manufacturing and marketing of products regulated by the FDA.
These sanctions could include: • refusal to approve pending applications; • withdrawal of an approval; • imposition of a clinical hold; • warning letters, untitled letters and similar communications; • product seizures or recalls; • total or partial suspension of production or distribution; or • injunctions, fines, restitution, disgorgement of profits or civil or criminal investigations and penalties brought by the FDA and DOJ, or other governmental entities.
The primary endpoint was mean arterial pressure (“MAP”) response, defined as a MAP of 75 mm Hg or higher or an increase in MAP from baseline of at least 10 mm Hg without an increase in the dose of background vasopressors at Hour 3 (Khanna et al, New England Journal of Medicine 2017; 377:419–430).
The primary endpoint was mean arterial pressure (“MAP”) response, defined as a MAP of 75 mm Hg or higher or an increase in MAP from baseline of at least 10 mm Hg without an increase in the dose of background vasopressors at Hour 3 (Khanna et al, New England Journal of Medicine 2017; 377:419–430). 9 Table of Contents ATHOS-3 Study Design (1) MAP=mean arterial pressure (1) Khanna et al, New England Journal of Medicine 2017; 377:419–430 (2) Standard-of-care vasopressors included norepinephrine, epinephrine, dopamine and vasopressin GIAPREZA ® significantly improved blood pressure response.
These patent applications are intended to protect new chemical entities relating to these product candidates as well as their manufacturing processes, intermediates and uses in the treatment of diseases. The intellectual property portfolios for our commercial products, advanced product candidates, and various compounds are summarized below.
These patent applications are intended to protect new chemical entities relating to these product candidates as well as their manufacturing processes, intermediates and uses in the treatment of diseases.
As of February 14, 2025, we owned seven issued U.S. patents, 75 issued foreign patents as well as one pending foreign patent application. The issued foreign patents are in several jurisdictions, including Australia, Brazil, Canada, China, Eurasia, the European Union, Hong Kong, India, Israel, Japan, Mexico, New Zealand, Philippines, Singapore, South Africa, South Korea, Taiwan and the United Kingdom.
The issued foreign patents are in several jurisdictions, including Australia, Brazil, Canada, China, Eurasia, the European Union, Hong Kong, India, Israel, Japan, Mexico, New Zealand, Philippines, Singapore, South Africa, South Korea, Taiwan and the United Kingdom.
Selected Adverse Reactions Reported in ≥1% of Patients Receiving XERAVA (1) (1) Charts, graphs and tables derived from FDA prescribing information (2) Comparators included ertapenem and meropenem for IGNITE1 and IGNITE4, respectively (3) Infusion site reactions include: catheter/vessel puncture site pain, infusion site extravasation, infusion site hypoaesthesia, infusion/injection site phlebitis, infusion site thrombosis, injection site/vessel puncture site erythema, phlebitis, phlebitis superficial, thrombophlebitis, and vessel puncture site swelling 14 Table of Contents XACDURO ® XACDURO ® (sulbactam for injection; durlobactam for injection), co-packaged for intravenous use (formerly known as sulbactam-durlobactam or SUL-DUR), was approved by the FDA on May 23, 2023, and we commenced U.S. commercial sales of XACDURO ® in the third quarter of 2023.
Selected Adverse Reactions Reported in ≥1% of Patients Receiving XERAVA ® (1) (1) Charts, graphs and tables derived from FDA prescribing information (2) Comparators included ertapenem and meropenem for IGNITE1 and IGNITE4, respectively (3) Infusion site reactions include: catheter/vessel puncture site pain, infusion site extravasation, infusion site hypoaesthesia, infusion/injection site phlebitis, infusion site thrombosis, injection site/vessel puncture site erythema, phlebitis, phlebitis superficial, thrombophlebitis, and vessel puncture site swelling 18 Table of Contents ZEVTERA ® ZEVTERA ® (ceftobiprole) was approved by the U.S.
Although ceftriaxone remains effective in most of the U.S., in Hawaii and Massachusetts as well as in several countries, including China, Japan, Vietnam, South Korea, France and Spain, N. gonorrhoeae strains with resistance to azithromycin and ceftriaxone have been reported, prompting concerns that multidrug-resistant gonorrhea may become a major community health issue.
Although ceftriaxone remains effective in most of the U.S., in Hawaii and Massachusetts, N. gonorrhoeae strains with resistance to azithromycin and ceftriaxone have been reported, and high numbers of resistant strains are now prevalent in many countries across the globe, prompting concerns that multidrug-resistant gonorrhea may become a major community health issue.
Moreover, any drug products manufactured or distributed pursuant to FDA approvals are subject to continuing regulation by the FDA, including, among other things: • record-keeping requirements; • reporting of adverse experiences with the drug; • providing the FDA with updated safety and efficacy information; • drug sampling and distribution requirements; • notifying the FDA and gaining its approval of specified manufacturing or labeling changes; • complying with certain electronic records and signature requirements; and • complying with FDA promotion and advertising requirements.
If we are found to have promoted off-label uses, we may be subject to significant liability, including sanctions, civil and criminal fines and penalties, and injunctions prohibiting us from engaging in specified promotional conduct. 29 Table of Contents Moreover, any drug products manufactured or distributed pursuant to FDA approvals are subject to continuing regulation by the FDA, including, among other things: • record-keeping requirements; • reporting of adverse experiences with the drug; • providing the FDA with updated safety and efficacy information; • drug sampling and distribution requirements; • notifying the FDA and gaining its approval of specified manufacturing or labeling changes; • complying with certain electronic records and signature requirements; and • complying with FDA promotion and advertising requirements.
Preclinical tests include laboratory evaluations of product chemistry, toxicity and formulation, as well as animal studies. An IND sponsor must submit the results of the preclinical tests, together with manufacturing information and analytical data, to the FDA as part of the IND. Some preclinical or nonclinical testing may continue even after the IND is submitted.
Once a pharmaceutical candidate is identified for development, it enters the preclinical testing stage. Preclinical tests include laboratory evaluations of product chemistry, toxicity and formulation, as well as animal studies. An IND sponsor must submit the results of the preclinical tests, together with manufacturing information and analytical data, to the FDA as part of the IND.
Market Opportunity N. gonorrhoeae is an immediate global public health threat with 82.4 million cases worldwide in 2020 (WHO estimate). Cases of gonorrhea in the United States have reached an estimated 1.6 million per year. The CDC estimates that the cases of gonorrhea in the United States have been increasing at least 10% per year since 2009.
Market Opportunity N. gonorrhoeae is an immediate global public health threat with 82.4 million cases worldwide in 2020 (WHO estimate). Cases of gonorrhea in the United States are estimated at more than one million per year.
Federal false claims laws, including the civil False Claims Act, and civil monetary penalties laws prohibit any person or entity from, among other things, knowingly presenting, or causing to be presented, a false claim for payment to the federal government, or knowingly making, or causing to be made, a false statement to have a claim paid.
In addition, the ACA codified case law that a claim for payment for items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the federal civil False Claims Act. 32 Table of Contents Federal false claims laws, including the civil False Claims Act, and civil monetary penalties laws prohibit any person or entity from, among other things, knowingly presenting, or causing to be presented, a false claim for payment to the federal government, or knowingly making, or causing to be made, a false statement to have a claim paid.
GIAPREZA ® (angiotensin II) GIAPREZA ® (angiotensin II) injection is approved by the U.S. FDA as a vasoconstrictor indicated to increase blood pressure in adults with septic or other distributive shock.
FDA as a vasoconstrictor indicated to increase blood pressure in adults with septic or other distributive shock.
The long-term commercial success of ZEVTERA ® will depend in part on the ability of Basilea to supply the drug product without interruption. With respect to our product candidates, we currently rely on third-party contract manufacturers for our required raw materials, drug substance, and finished drug product for our preclinical research and clinical trials.
With respect to our product candidates, we currently rely on third-party contract manufacturers for our required raw materials, drug substance, and finished drug product for our preclinical research and clinical trials.
A $110.0 million contribution was made during the first quarter of 2022. 36 Table of Contents In October 2024, we made an election to unwind the 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.
In October 2024, we made an election to unwind the capital accounts in the Partnership in accordance with the terms of the Partnership Agreement. We received cash distributions of $121.0 million during the year ended December 31, 2025 and expect to receive distributions of our capital accounts through April 2026.
The results for clinical cure at the test-of-cure visit at Day 7 to 14 after end of treatment are shown below: Competition GIAPREZA ® competes with catecholamines (primarily norepinephrine), which are available as generics and inexpensive and typically used first line to treat distributive shock, and vasopressin, including Vasostrict ® (Endo International plc) and vasopressin generic drugs, which are typically used hsecond line.
Competition GIAPREZA ® competes with catecholamines (primarily norepinephrine), which are available as generics and inexpensive and typically used first line to treat distributive shock, and vasopressin, including Vasostrict ® (Endo International plc) and vasopressin generic drugs, which are typically used second line.
Adverse Reactions Occurring in ≥4% of Patients Treated with GIAPREZA and ≥1.5% More Often than in Placebo-treated Patients (1) (1) Charts, graphs and tables derived from FDA prescribing information (2) Including arterial and venous thrombotic events 11 Table of Contents XERAVA ® (eravacycline) XERAVA ® (eravacycline) for injection is approved by the U.S.
Adverse Reactions Occurring in ≥4% of Patients Treated with GIAPREZA ® and ≥1.5% More Often than in Placebo-treated Patients (1) (1) Charts, graphs and tables derived from FDA prescribing information (2) Including arterial and venous thrombotic events 11 Table of Contents XACDURO ® XACDURO ® (sulbactam for injection; durlobactam for injection), co-packaged for intravenous use (formerly known as sulbactam-durlobactam or SUL-DUR), was approved by the FDA on May 23, 2023, and we commenced U.S. commercial sales of XACDURO ® in the third quarter of 2023.
XERAVA ® and XACDURO ® have been designated by the FDA as a QIDP. Zoliflodacin has also been designated as a QIDP by the FDA for the treatment of uncomplicated gonorrhea.
XERAVA ® and XACDURO ® have been designated by the FDA as a QIDP.
The approval process and requirements governing the conduct of clinical trials, product licensing, pricing and reimbursement vary greatly from place to place, and the time may be longer or shorter than that required for FDA approval.
The approval process and requirements governing the conduct of clinical trials, product licensing, pricing and reimbursement vary greatly from place to place, and the time may be longer or shorter than that required for FDA approval. 30 Table of Contents Under EU regulatory systems, a company may submit marketing authorization applications under the centralized, decentralized or mutual recognition procedures, or under the purely national route of approval.
In addition, as of February 14, 2025, we also owned 2 issued U.S. patents, 1 pending U.S. patent application, 8 granted foreign patents and 7 pending foreign patent applications that relate to crystalline forms of eravacycline. Any U.S. patent that may issue from the pending patent application will expire in 2037 absent any disclaimers, extensions, or adjustments of patent term.
The issued U.S. patents and any U.S. patent that may issue from the pending patent application will expire in 2037 absent any disclaimers, extensions, or adjustments of patent term. Likewise, the foreign patents and any foreign patents that may issue from the pending foreign patent applications will expire in 2037.
Our Strategy Our corporate strategy is currently focused on increasing stockholder value by, among other things, maximizing the potential value of our respiratory assets partnered with GSK, creating value through our critical care and infectious disease platform, optimizing our operations, and augmenting capital allocation.
The Company changed its name to Theravance, Inc. in April 2002 and to Innoviva, Inc. in January 2016. Our Strategy Our corporate strategy is currently focused on increasing shareholder value by, among other things, maximizing the potential value of our respiratory assets partnered with GSK, growing our critical care and infectious disease platform, efficiently allocating capital, and optimizing our operations.
ZEVTERA ® is also approved by the European Commission for the treatment of hospital-acquired pneumonia (HAP, excluding ventilator-associated pneumonia, VAP) and community-acquired pneumonia (CAP) in patients 18 years of age and older. 18 Table of Contents On December 14, 2024, a subsidiary of the Company entered into an exclusive distribution and license agreement with Basilea, for the commercialization of ZEVTERA ® in the United States.
ZEVTERA ® is also approved by the European Commission for the treatment of hospital-acquired pneumonia (HAP, excluding ventilator-associated pneumonia, VAP) and community-acquired pneumonia (CAP) in patients 18 years of age and older.
Foreign Regulation In addition to regulations in the United States, we will be subject to a variety of foreign regulations governing clinical trials and commercial sales and distribution of our products.
It is impossible to predict whether legislative changes will be enacted, or FDA regulations, guidance or interpretations changed or what the impact of such changes, if any, may be. Foreign Regulation In addition to regulations in the United States, we will be subject to a variety of foreign regulations governing clinical trials and commercial sales and distribution of our products.
We maintain confidentiality agreements with potential and existing manufacturers in order to protect our proprietary rights related to GIAPREZA ® , XERAVA ® and XACDURO ® . The long-term commercial success of GIAPREZA ® , XERAVA ® and XACDURO ® will depend in part on the ability of our contract manufacturers to supply cGMP-compliant API and drug product without interruption.
The long-term commercial success of GIAPREZA ® , XACDURO ® , XERAVA ® and NUZOLVENCE ® will depend in part on the ability of our contract manufacturers to supply cGMP-compliant API and drug product without interruption. We exclusively license ZEVTERA ® (pre-packaging and labeling) from Basilea for the U.S. marketing rights.
Efforts have intensified following the publication of FDA draft guidance for the approval of fully substitutable versions of Advair and Symbicort in late 2013 and mid-2015, respectively. 7 Table of Contents In general, these manufacturers are required to conduct a number of clinical efficacy, pharmacokinetic and device studies to demonstrate equivalence to branded products already approved by the FDA.
All of these efforts represent potential competition for any of our partnered products. 7 Table of Contents In general, these manufacturers are required to conduct a number of clinical efficacy, pharmacokinetic and device studies to demonstrate equivalence to branded products already approved by the FDA.
Specifically, PREA requires original NDAs, biologic license applications, or BLAs, and supplements thereto for a new active ingredient, new indication, new dosage form, new dosing regimen or new route of administration to contain a pediatric assessment unless the sponsor has received a deferral or waiver. 27 Table of Contents Concurrent with clinical trials, companies usually complete additional animal safety studies and must also develop additional information about the chemistry and physical characteristics of the drug and finalize a process for manufacturing the product in accordance with cGMP requirements.
Specifically, PREA requires original NDAs, biologic license applications, or BLAs, and supplements thereto for a new active ingredient, new indication, new dosage form, new dosing regimen or new route of administration to contain a pediatric assessment unless the sponsor has received a deferral or waiver.
Trademarks, Trade Secrets and Know-How Our trademark portfolio currently consists of various registered trademark and service mark rights in several jurisdictions, including the United States, the European Union, Japan, Argentina, Australia, Brazil, Canada, India, Mexico, Norway, the Russian Federation, South Korea, Switzerland, Taiwan, Turkey and the United Kingdom, and pending applications in other jurisdictions.
Issued U.S. and foreign patents and patents issuing from pending U.S. and foreign applications have expiration dates of October 2029, January 2034 and May 2035. 35 Table of Contents Trademarks, Trade Secrets and Know-How Our trademark portfolio currently consists of various registered trademark and service mark rights for various marks in several jurisdictions, including the United States, the European Union, Japan, Argentina, Australia, Brazil, Canada, China, Colombia, Hong Kong, India, Iceland, Indonesia, Israel, Liechtenstein, Malaysia, Mexico, New Zealand, Norway, the Russian Federation, Saudi Arabia, South Africa, South Korea, Switzerland, Taiwan, Thailand, Turkey, United Arab Emirates and the United Kingdom, and pending applications in other jurisdictions.
The study demonstrated statistical non-inferiority of microbiological cure at the urogenital site when compared to treatment with intramuscular infection of ceftriaxone and oral azithromycin, a current global standard of care regimen. We continue to advance zoliflodacin following its successful Phase 3 clinical trial results and expect to submit an NDA to the U.S. FDA in early 2025.
The study 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.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeExamples of such adverse developments include, but are not limited to: • not every study, nor every dose in every study, in the Phase 3 programs for FF/VI achieved its primary endpoint and regulatory authorities may determine that additional clinical studies are required; • safety, efficacy or other concerns arising from clinical or non‑clinical studies in these programs having to do with the LABA VI, which is a component of FF/VI and UMEC/VI; • analysts adjusting their sales forecasts downward from previous projections based on results or interpretations of results of prior, current or future studies; • safety, efficacy or other concerns arising from clinical or non‑clinical studies in these programs; • regulatory authorities determining that the Phase 3 programs in asthma or in COPD raise safety concerns or do not demonstrate adequate efficacy; or • any change in FDA (or comparable foreign regulatory agency) policy or guidance regarding the use of LABAs to treat asthma or the use of LABAs combined with a LAMA to treat COPD. 43 Table of Contents RELVAR ® /BREO ® ELLIPTA ® and ANORO ® ELLIPTA ® face substantial competition for their intended uses in the targeted markets from products discovered, developed, launched and commercialized both by GSK and by other pharmaceutical companies, which could cause the royalties payable to us pursuant to the LABA Collaboration Agreement to be less than expected, which in turn would harm our business and cause the price of our securities to fall.
Biggest changeExamples of such adverse developments include, but are not limited to: • not every study, nor every dose in every study, in the Phase 3 programs for FF/VI achieved its primary endpoint and regulatory authorities may determine that additional clinical studies are required; • safety, efficacy or other concerns arising from clinical or non‑clinical studies in these programs having to do with the LABA VI, which is a component of FF/VI and UMEC/VI; • analysts adjusting their sales forecasts downward from previous projections based on results or interpretations of results of prior, current or future studies; • safety, efficacy or other concerns arising from clinical or non‑clinical studies in these programs; • regulatory authorities determining that the Phase 3 programs in asthma or in COPD raise safety concerns or do not demonstrate adequate efficacy; or • any change in FDA (or comparable foreign regulatory agency) policy or guidance regarding the use of LABAs to treat asthma or the use of LABAs combined with a LAMA to treat COPD.
The amount of royalties and milestone payments, if any, we receive will depend on many factors, including but not limited to the following: • the extent and effectiveness of the sales and marketing and distribution support GSK provides to our partnered products; • market acceptance and demand for our partnered products; • changes in the treatment paradigm or standard of care for COPD or asthma, for instance through changes to the GOLD (Global Initiative for Chronic Obstructive Lung Disease) guidelines; • the competitive landscape of generic and branded products and developing therapies that compete with our products owned by GSK (such as Advair ® ) but which are not partnered with us and pricing pressure in the respiratory markets targeted by our partnered products; • the size of the market for our partnered products; • the mix of sales of our partnered products; • decisions as to the timing of product launches, pricing and discounts; • reprioritization of GSK’s commercial efforts on other products owned by GSK, which are not partnered with us; 39 Table of Contents • GSK’s ability to expand the indications for which our partnered products can be marketed; • a satisfactory efficacy and safety profile as demonstrated in a broad patient population; • acceptance of, and ongoing satisfaction with, our partnered products by the medical community, patients receiving therapy and third-party payors; • timing and amounts of payor rebate adjustments and prior period rebate adjustments; • seasonal fluctuations of demand; • the ability of patients to be able to afford our partnered products or obtain health care coverage that covers our partnered products; • safety concerns in the marketplace for respiratory therapies in general and with our partnered products in particular; • regulatory developments relating to the manufacture or continued use of our partnered products; • the requirement to conduct additional post‑approval studies or trials for our partnered products; • GSK’s ability to obtain regulatory approval of our partnered products in additional countries; • the unfavorable outcome of any potential litigation relating to our partnered products; • general economic conditions in the jurisdictions where our partnered products are sold, including microeconomic disruptions or slowdowns; or • if our royalty revenue or operating results fall below the expectations of investors or securities analysts or below any guidance we may provide to the market, the price of our common stock could decline substantially.
The amount of royalties and milestone payments, if any, we receive will depend on many factors, including but not limited to the following: • the extent and effectiveness of the sales and marketing and distribution support GSK provides to our partnered products; • market acceptance and demand for our partnered products; • changes in the treatment paradigm or standard of care for COPD or asthma, for instance through changes to the GOLD (Global Initiative for Chronic Obstructive Lung Disease) guidelines; • the competitive landscape of generic and branded products and developing therapies that compete with our products owned by GSK (such as Advair ® ) but which are not partnered with us and pricing pressure in the respiratory markets targeted by our partnered products; • the size of the market for our partnered products; • the mix of sales of our partnered products; • decisions as to the timing of product launches, pricing and discounts; • reprioritization of GSK’s commercial efforts on other products owned by GSK, which are not partnered with us; • GSK’s ability to expand the indications for which our partnered products can be marketed; • a satisfactory efficacy and safety profile as demonstrated in a broad patient population; • acceptance of, and ongoing satisfaction with, our partnered products by the medical community, patients receiving therapy and third-party payors; • timing and amounts of payor rebate adjustments and prior period rebate adjustments; • seasonal fluctuations of demand; • the ability of patients to be able to afford our partnered products or obtain health care coverage that covers our partnered products; 39 Table of Contents • safety concerns in the marketplace for respiratory therapies in general and with our partnered products in particular; • regulatory developments relating to the manufacture or continued use of our partnered products; • the requirement to conduct additional post‑approval studies or trials for our partnered products; • GSK’s ability to obtain regulatory approval of our partnered products in additional countries; • the unfavorable outcome of any potential litigation relating to our partnered products; • general economic conditions in the jurisdictions where our partnered products are sold, including microeconomic disruptions or slowdowns; or • if our royalty revenue or operating results fall below the expectations of investors or securities analysts or below any guidance we may provide to the market, the price of our common stock could decline substantially.
We currently rely on third parties for supply of our product candidates, and our strategy is to outsource all manufacturing of our product candidates and approved products, if any, to third parties.
We currently rely on third parties for supply of our product candidates and approved products, and our strategy is to outsource all manufacturing of our product candidates and approved products, if any, to third parties.
As a result, we cannot predict when or if, and in which territories, we, or any future collaborators, will obtain marketing approval to commercialize a product candidate.
As a result, we cannot predict when or if, and in which territories, we, or any future collaborators, will obtain marketing approval to commercialize a product candidate.
Securing marketing approval requires the submission of extensive preclinical and clinical data and supporting information to regulatory authorities for each therapeutic indication to establish the product candidate’s safety and efficacy. Securing marketing approval also requires the submission of information about the product manufacturing process to, and inspection of manufacturing facilities by, the regulatory authorities.
Securing marketing approval requires the submission of extensive preclinical and clinical data and supporting information to regulatory authorities for each therapeutic indication to establish the product candidate’s safety and efficacy. Securing marketing approval also requires the submission of information about the product manufacturing process to, and inspection of manufacturing facilities by, the regulatory authorities.
The applicable federal, state and foreign healthcare laws that may affect our ability to operate include the following: • the federal Anti-Kickback Statute, which prohibits, among other things, persons from knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, in cash or in kind, to induce or reward, or in return for, either the referral of an individual for, or the purchase, lease, order or recommendation of, any good, facility, item or service, for which payment may be made, in whole or in part, under federal healthcare programs such as Medicare and Medicaid; • federal civil and criminal false claims laws, including the federal False Claims Act, which impose criminal and civil penalties, including through civil whistleblower or qui tam actions, against individuals or entities for, among other things, knowingly presenting, or causing to be presented, to the federal government, including the Medicare and Medicaid programs, claims for payment that are false or fraudulent or making a false statement to avoid, decrease or conceal an obligation to pay money to the federal government; • the civil monetary penalties statute, which imposes penalties against any person or entity who, among other things, is determined to have presented or caused to be presented a claim to a federal health program that the person knows or should know is for an item or service that was not provided as claimed or is false or fraudulent; • HIPAA, which created additional federal criminal and civil statutes that prohibit knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program or obtain, by means of false or fraudulent pretenses, representations or promises, any of the money or property owned by, or under the custody or control of, any healthcare benefit program, regardless of whether the payor is public or private, knowingly and willfully embezzling or stealing from a health care benefit program, willfully obstructing a criminal investigation of a health care offense and knowingly and willfully falsifying, concealing or covering up by any trick or device a material fact or making any materially false statements in connection with the delivery of, or payment for, healthcare benefits, items or services relating to healthcare matters; • HIPAA, as amended by the HITECH Act of 2009, and their respective implementing regulations, which impose obligations on “covered entities,” including certain healthcare providers, health plans, and healthcare clearinghouses, as well as their respective “business associates” that create, receive, maintain or transmit individually identifiable health information for or on behalf of a covered entity, with respect to safeguarding the privacy, security and transmission of individually identifiable health information; • the federal Physician Payments Sunshine Act, created under Section 6002 of Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act, or collectively, the ACA, and its implementing regulations, which created annual reporting requirements for manufacturers of drugs, devices, biologicals and medical supplies for certain payments and “transfers of value” provided to covered recipients, including physicians, as defined by such law, and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members; and 70 Table of Contents • analogous state and foreign laws, such as state anti-kickback and false claims laws, which may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payors, including private insurers; state and foreign laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government or to adopt compliance programs as prescribed by state laws and regulations, or that otherwise restrict payments that may be made to healthcare providers; state and foreign laws that require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures and drug pricing; state and local laws requiring the licensure of pharmaceutical sales representatives; and state and foreign laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts.
The applicable federal, state and foreign healthcare laws that may affect our ability to operate include the following: • the federal Anti-Kickback Statute, which prohibits, among other things, persons from knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, in cash or in kind, to induce or reward, or in return for, either the referral of an individual for, or the purchase, lease, order or recommendation of, any good, facility, item or service, for which payment may be made, in whole or in part, under federal healthcare programs such as Medicare and Medicaid; 69 Table of Contents • federal civil and criminal false claims laws, including the federal False Claims Act, which impose criminal and civil penalties, including through civil whistleblower or qui tam actions, against individuals or entities for, among other things, knowingly presenting, or causing to be presented, to the federal government, including the Medicare and Medicaid programs, claims for payment that are false or fraudulent or making a false statement to avoid, decrease or conceal an obligation to pay money to the federal government; • the civil monetary penalties statute, which imposes penalties against any person or entity who, among other things, is determined to have presented or caused to be presented a claim to a federal health program that the person knows or should know is for an item or service that was not provided as claimed or is false or fraudulent; • HIPAA, which created additional federal criminal and civil statutes that prohibit knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program or obtain, by means of false or fraudulent pretenses, representations or promises, any of the money or property owned by, or under the custody or control of, any healthcare benefit program, regardless of whether the payor is public or private, knowingly and willfully embezzling or stealing from a health care benefit program, willfully obstructing a criminal investigation of a health care offense and knowingly and willfully falsifying, concealing or covering up by any trick or device a material fact or making any materially false statements in connection with the delivery of, or payment for, healthcare benefits, items or services relating to healthcare matters; • HIPAA, as amended by the HITECH Act of 2009, and their respective implementing regulations, which impose obligations on “covered entities,” including certain healthcare providers, health plans, and healthcare clearinghouses, as well as their respective “business associates” that create, receive, maintain or transmit individually identifiable health information for or on behalf of a covered entity, with respect to safeguarding the privacy, security and transmission of individually identifiable health information; • the federal Physician Payments Sunshine Act, created under Section 6002 of Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act, or collectively, the ACA, and its implementing regulations, which created annual reporting requirements for manufacturers of drugs, devices, biologicals and medical supplies for certain payments and “transfers of value” provided to covered recipients, including physicians, as defined by such law, and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members; and • analogous state and foreign laws, such as state anti-kickback and false claims laws, which may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payors, including private insurers; state and foreign laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government or to adopt compliance programs as prescribed by state laws and regulations, or that otherwise restrict payments that may be made to healthcare providers; state and foreign laws that require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures and drug pricing; state and local laws requiring the licensure of pharmaceutical sales representatives; and state and foreign laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts.
We may experience numerous unforeseen events prior to, during, or because of, clinical trials that could delay or prevent our ability to receive marketing approval or commercialize our product candidates, including but not limited to: • the FDA, the EMA or other comparable regulatory authority may change from the views they have expressed to us as to the design, implementation, and/or interpretation of our clinical trials; • the FDA may withdraw Fast Track designation if it believes that the designation is no longer supported by data from our clinical development program; • regulators or institutional review boards may not authorize us or our investigators to commence a clinical trial or conduct a clinical trial at a prospective trial site; • we may not reach agreement on acceptable terms with prospective contract research organizations, or CROs, and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and clinical trial sites; • clinical trials of product candidates may produce negative or inconclusive results; • we may decide, or regulators may require us, to conduct additional clinical trials or abandon product development programs; • we may not be able to complete our clinical trials in a timely manner, if at all, for example because the number of patients required for clinical trials of our product candidates may be larger than we anticipate; • enrollment in these clinical trials may be slower than we anticipate, participants may drop out of these clinical trials at a higher rate than we anticipate, or we may fail to recruit suitable patients to participate in a trial; • we may fail to comply with regulatory requirements applicable to them, to the FDA’s or other comparable regulatory authority’s, satisfaction; • third-party contractors may fail to comply with regulatory requirements or meet their contractual obligations to us in a timely manner, or at all; • regulators may issue a clinical hold, or regulators or institutional review boards may require that we or our investigators suspend or terminate clinical research for various reasons, including noncompliance with regulatory requirements or a finding that the participants are being exposed to unacceptable health risks; • the cost of clinical trials of our product candidates may be greater than we anticipate; • the FDA, the EMA or other comparable regulatory authorities may fail to approve the manufacturing processes or facilities of third-party manufacturers with whom we enter into agreements for clinical and commercial supplies; 49 Table of Contents • the supply or quality of our product candidates or other materials necessary to conduct clinical trials of our product candidates may be insufficient or inadequate; • our product candidates, once exposed to greater numbers of patients, may have undesirable side effects or other unexpected characteristics, causing us or our investigators, regulators or institutional review boards to suspend or terminate the clinical trials or cause regulatory authorities to refuse to approve our product candidates or approve them only with significant restrictions on distribution or use; • even if our clinical trials are successful, the FDA, the EMA or other comparable regulatory authorities may determine that the overall risk-benefit profiles of our product candidates are insufficient to support marketing authorization; and • the approval policies or regulations of the FDA, the EMA or other comparable regulatory authorities may significantly change in a manner rendering our clinical data insufficient for approval.
We may experience numerous unforeseen events prior to, during, or because of, clinical trials that could delay or prevent our ability to receive marketing approval or commercialize our product candidates, including but not limited to: • the FDA, the EMA or other comparable regulatory authority may change from the views they have expressed to us as to the design, implementation, and/or interpretation of our clinical trials; • the FDA may withdraw Fast Track designation if it believes that the designation is no longer supported by data from our clinical development program; • regulators or institutional review boards may not authorize us or our investigators to commence a clinical trial or conduct a clinical trial at a prospective trial site; • we may not reach agreement on acceptable terms with prospective contract research organizations, or CROs, and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and clinical trial sites; • clinical trials of product candidates may produce negative or inconclusive results; • we may decide, or regulators may require us, to conduct additional clinical trials or abandon product development programs; • we may not be able to complete our clinical trials in a timely manner, if at all, for example because the number of patients required for clinical trials of our product candidates may be larger than we anticipate; • enrollment in these clinical trials may be slower than we anticipate, participants may drop out of these clinical trials at a higher rate than we anticipate, or we may fail to recruit suitable patients to participate in a trial; • we may fail to comply with regulatory requirements applicable to them, to the FDA’s or other comparable regulatory authority’s, satisfaction; • third-party contractors may fail to comply with regulatory requirements or meet their contractual obligations to us in a timely manner, or at all; 48 Table of Contents • regulators may issue a clinical hold, or regulators or institutional review boards may require that we or our investigators suspend or terminate clinical research for various reasons, including noncompliance with regulatory requirements or a finding that the participants are being exposed to unacceptable health risks; • the cost of clinical trials of our product candidates may be greater than we anticipate; • the FDA, the EMA or other comparable regulatory authorities may fail to approve the manufacturing processes or facilities of third-party manufacturers with whom we enter into agreements for clinical and commercial supplies; • the supply or quality of our product candidates or other materials necessary to conduct clinical trials of our product candidates may be insufficient or inadequate; • our product candidates, once exposed to greater numbers of patients, may have undesirable side effects or other unexpected characteristics, causing us or our investigators, regulators or institutional review boards to suspend or terminate the clinical trials or cause regulatory authorities to refuse to approve our product candidates or approve them only with significant restrictions on distribution or use; • even if our clinical trials are successful, the FDA, the EMA or other comparable regulatory authorities may determine that the overall risk-benefit profiles of our product candidates are insufficient to support marketing authorization; and • the approval policies or regulations of the FDA, the EMA or other comparable regulatory authorities may significantly change in a manner rendering our clinical data insufficient for approval.
Our collaborations and any future collaborations we might enter into may pose a number of risks, including but not limited to: • collaborators often have significant discretion in determining the efforts and resources that they will apply to these collaborations; • collaborators may not perform their obligations as expected or contractually obligated; • collaborators may not pursue development and commercialization of any product candidates that achieve regulatory approval or may elect not to continue or renew development or commercialization programs based on clinical trial results, changes in the collaborators’ strategic focus or available funding, or external factors, such as an acquisition, that divert resources or create competing priorities; • collaborators may delay clinical trials, provide insufficient funding for a clinical trial program, stop a clinical trial or abandon a product candidate, repeat or conduct new clinical trials or require a new formulation of a product candidate for clinical testing; • product candidates discovered in collaboration with us may be viewed by our collaborators as competitive with their own product candidates or products, which may cause collaborators to cease to devote resources to the commercialization of our product candidates; • a collaborator with marketing and distribution rights to one or more of our product candidates that achieve regulatory approval may not commit sufficient resources to the marketing and distribution of such products; • disagreements with collaborators, including disagreements over proprietary rights, contract interpretation or the preferred course of development, might cause delays or termination of the research, development or commercialization of product candidates, might lead to additional responsibilities for us with respect to product candidates, or might result in litigation or arbitration, any of which would be time-consuming and expensive; • collaborators may not properly maintain or defend our or their intellectual property rights or may use our or their proprietary information in such a way as to invite litigation that could jeopardize or invalidate such intellectual property or proprietary information or expose us to potential litigation; • collaborators may infringe the intellectual property rights of third parties, which may expose us to litigation and potential liability; • collaborators may be subject to geo-political actions, natural disasters or other occurrences, including public health epidemics such as the COVID-19 pandemic; 56 Table of Contents • collaborations may be terminated for the convenience of the collaborator and, if terminated, we could be required to raise additional capital to pursue further development or commercialization of the applicable product candidates; and • collaborators’ decisions may limit the availability of the product supplies required for development, clinical and commercial activities.
Our collaborations and any future collaborations we might enter into may pose a number of risks, including but not limited to: • collaborators often have significant discretion in determining the efforts and resources that they will apply to these collaborations; • collaborators may not perform their obligations as expected or contractually obligated; • collaborators may not pursue development and commercialization of any product candidates that achieve regulatory approval or may elect not to continue or renew development or commercialization programs based on clinical trial results, changes in the collaborators’ strategic focus or available funding, or external factors, such as an acquisition, that divert resources or create competing priorities; • collaborators may delay clinical trials, provide insufficient funding for a clinical trial program, stop a clinical trial or abandon a product candidate, repeat or conduct new clinical trials or require a new formulation of a product candidate for clinical testing; 55 Table of Contents • product candidates discovered in collaboration with us may be viewed by our collaborators as competitive with their own product candidates or products, which may cause collaborators to cease to devote resources to the commercialization of our product candidates; • a collaborator with marketing and distribution rights to one or more of our product candidates that achieve regulatory approval may not commit sufficient resources to the marketing and distribution of such products; • disagreements with collaborators, including disagreements over proprietary rights, contract interpretation or the preferred course of development, might cause delays or termination of the research, development or commercialization of product candidates, might lead to additional responsibilities for us with respect to product candidates, or might result in litigation or arbitration, any of which would be time-consuming and expensive; • collaborators may not properly maintain or defend our or their intellectual property rights or may use our or their proprietary information in such a way as to invite litigation that could jeopardize or invalidate such intellectual property or proprietary information or expose us to potential litigation; • collaborators may infringe the intellectual property rights of third parties, which may expose us to litigation and potential liability; • collaborators may be subject to geo-political actions, natural disasters or other occurrences, including public health epidemics such as the COVID-19 pandemic; • collaborations may be terminated for the convenience of the collaborator and, if terminated, we could be required to raise additional capital to pursue further development or commercialization of the applicable product candidates; and • collaborators’ decisions may limit the availability of the product supplies required for development, clinical and commercial activities.
The degree of market acceptance of our product candidates, if approved for commercial sale, will depend on several factors, including but not limited to: • the efficacy and potential advantages compared to alternative treatments; • the potential and perceived advantages and disadvantages of the product candidates, including cost and clinical benefit relative to alternative treatments; • the convenience and ease of administration compared to alternative treatments; • the willingness of the target patient population to try new therapies and of physicians to prescribe these therapies; • acceptance by physicians, patients, operators of hospitals, including in-hospital formularies, and treatment facilities and parties responsible for coverage and reimbursement of the product; • the availability of coverage and adequate reimbursement by third-party payors and government authorities; • the ability to manufacture our product in sufficient quantities and yields; • the strength and effectiveness of marketing and distribution support; • the prevalence and severity of any side effects; • limitations or warnings, including distribution or use restrictions, contained in the product’s approved labeling or an approved REMS; • whether the product is designated under physician treatment guidelines as a first-line therapy or as a second- or third-line therapy for particular infections; • the approval of other new products for the same indications; • the timing of market introduction of the approved product as well as competitive products; 59 Table of Contents • the emergence of bacterial resistance to the product; and • the rate at which resistance to other drugs in the target infections grow.
The degree of market acceptance of our product candidates, if approved for commercial sale, will depend on several factors, including but not limited to: • the efficacy and potential advantages compared to alternative treatments; • the potential and perceived advantages and disadvantages of the product candidates, including cost and clinical benefit relative to alternative treatments; • the convenience and ease of administration compared to alternative treatments; • the willingness of the target patient population to try new therapies and of physicians to prescribe these therapies; • acceptance by physicians, patients, operators of hospitals, including in-hospital formularies, and treatment facilities and parties responsible for coverage and reimbursement of the product; • the availability of coverage and adequate reimbursement by third-party payors and government authorities; • the ability to manufacture our product in sufficient quantities and yields; • the strength and effectiveness of marketing and distribution support; • the prevalence and severity of any side effects; • limitations or warnings, including distribution or use restrictions, contained in the product’s approved labeling or an approved REMS; • whether the product is designated under physician treatment guidelines as a first-line therapy or as a second- or third-line therapy for particular infections; 58 Table of Contents • the approval of other new products for the same indications; • the timing of market introduction of the approved product as well as competitive products; • the emergence of bacterial resistance to the product; and • the rate at which resistance to other drugs in the target infections grow.
Our research programs may initially show promise in identifying potential product candidates, yet fail to yield product candidates for clinical development for many reasons, including but not limited to the following: • the research methodology used may not be successful in identifying potential product candidates; • competitors may develop alternatives that render our product candidates obsolete or less attractive; • product candidates we develop may nevertheless be covered by third parties’ patents or other exclusive rights; • a product candidate may on further study be shown to have harmful side effects or other characteristics that indicate it is unlikely to be effective or otherwise does not meet applicable regulatory criteria; • a product candidate may not be capable of being produced in commercial quantities at an acceptable cost, or at all; 50 Table of Contents • a product candidate may not be accepted as safe and effective by patients, the medical community or third-party payors, if applicable; and • the FDA, the EMA or other regulatory authorities may not approve or agree with the intended use of a new product candidate.
Our research programs may initially show promise in identifying potential product candidates, yet fail to yield product candidates for clinical development for many reasons, including but not limited to the following: • the research methodology used may not be successful in identifying potential product candidates; 49 Table of Contents • competitors may develop alternatives that render our product candidates obsolete or less attractive; • product candidates we develop may nevertheless be covered by third parties’ patents or other exclusive rights; • a product candidate may on further study be shown to have harmful side effects or other characteristics that indicate it is unlikely to be effective or otherwise does not meet applicable regulatory criteria; • a product candidate may not be capable of being produced in commercial quantities at an acceptable cost, or at all; • a product candidate may not be accepted as safe and effective by patients, the medical community or third-party payors, if applicable; and • the FDA, the EMA or other regulatory authorities may not approve or agree with the intended use of a new product candidate.
If GSK does not devote sufficient resources to the commercialization and development of these products, is unsuccessful in its efforts, or chooses to reprioritize its commercial programs, our business would be materially harmed. • Our debt including our convertible subordinated notes and convertible senior notes are senior in capital structure and cash flow, respectively, to our common stockholders.
If GSK does not devote sufficient resources to the commercialization and development of these products, is unsuccessful in its efforts, or chooses to reprioritize its commercial programs, our business would be materially harmed. • Our debt including our convertible notes are senior in capital structure and cash flow, respectively, to our common stockholders.
If any or all of the Notes are not converted into shares of our common stock before the maturity date, we will have to pay the holders the full aggregate principal amount of the Notes then outstanding. Any of the above payments could have a material adverse effect on our cash position.
If any or all of the 2028 Notes are not converted into shares of our common stock before the maturity date, we will have to pay the holders the full aggregate principal amount of the 2028 Notes then outstanding. Any of the above payments could have a material adverse effect on our cash position.
We have a significant amount of debt including our convertible subordinated notes and convertible senior notes that are senior in capital structure and cash flow, respectively, to our common stockholders. Satisfying the obligations relating to our debt could adversely affect our liquidity or the amount or timing of potential distributions to our stockholders.
We have a significant amount of debt including our convertible notes that are senior in capital structure and cash flow, respectively, to our common stockholders. Satisfying the obligations relating to our debt could adversely affect our liquidity or the amount or timing of potential distributions to our stockholders.
Regardless of merit or eventual outcome, liability claims may result in: • reduced resources of our management to pursue our business strategy; • decreased demand for any product candidates or products that we may develop; • injury to our reputation and significant negative media attention; • withdrawal of clinical trial participants; • initiation of investigations by regulators; • product recalls, withdrawals or labeling, marketing or promotional restrictions; • significant costs to defend the resulting litigation; • substantial monetary awards paid to clinical trial participants or patients; • loss of revenue; and 61 Table of Contents • the inability to commercialize any drugs that we may develop.
Regardless of merit or eventual outcome, liability claims may result in: • reduced resources of our management to pursue our business strategy; • decreased demand for any product candidates or products that we may develop; • injury to our reputation and significant negative media attention; • withdrawal of clinical trial participants; 60 Table of Contents • initiation of investigations by regulators; • product recalls, withdrawals or labeling, marketing or promotional restrictions; • significant costs to defend the resulting litigation; • substantial monetary awards paid to clinical trial participants or patients; • loss of revenue; and • the inability to commercialize any drugs that we may develop.
We may not have the right to prohibit the U.S. government from using certain technologies developed by us, and may not be able to prohibit third-party companies, including our competitors, from using those technologies in providing products and services to the U.S. government.
We may not have the right to prohibit the U.S. government from using certain technologies developed by us and our investees, and may not be able to prohibit third-party companies, including our competitors, from using those technologies in providing products and services to the U.S. government.
Our failure to comply with all regulatory requirements, and later discovery of previously unknown adverse events or other problems with our products, manufacturers or manufacturing processes, may yield various results, including but not limited to: • litigation involving patients taking our products; • restrictions on our products, manufacturers or manufacturing processes; • restrictions on the labeling or marketing of a product; • restrictions on product distribution or use; • requirements to conduct post-marketing studies or clinical trials; • warning or untitled letters; • withdrawal of the products from the market; • refusal to approve pending applications or supplements to approve applications that we submit; • recall of products; • fines, restitution or disgorgement of profits or revenues; • suspension or withdrawal of marketing approvals; • damage to relationships with any potential collaborators; • unfavorable press coverage and damage to our reputation; • refusal to permit the import or export of our products; • product seizure; or • injunctions or imposition of civil or criminal penalties.
Our failure to comply with all regulatory requirements, and later discovery of previously unknown adverse events or other problems with our products, manufacturers or manufacturing processes, may yield various results, including but not limited to: • litigation involving patients taking our products; 68 Table of Contents • restrictions on our products, manufacturers or manufacturing processes; • restrictions on the labeling or marketing of a product; • restrictions on product distribution or use; • requirements to conduct post-marketing studies or clinical trials; • warning or untitled letters; • withdrawal of the products from the market; • refusal to approve pending applications or supplements to approve applications that we submit; • recall of products; • fines, restitution or disgorgement of profits or revenues; • suspension or withdrawal of marketing approvals; • damage to relationships with any potential collaborators; • unfavorable press coverage and damage to our reputation; • refusal to permit the import or export of our products; • product seizure; or • injunctions or imposition of civil or criminal penalties.
Patient enrollment is affected by other factors including but not limited to: • the size and nature of the patient population; • the severity of the disease under investigation; • the proximity and availability of clinical trial sites for prospective patients; • the eligibility criteria for participation in the clinical trial; • the design of the clinical trial; • the perceived risks and benefits of the product candidate under study; • our ability to recruit clinical trial investigators with appropriate experience; • the availability of drugs approved to treat the diseases under study; • the patient referral practices of physicians; • our ability to obtain and maintain patient consents; • the ability to monitor patients adequately during and after treatment; • the risk that patients enrolled in clinical trials will drop out of the trials before completion; and • the impact of public health epidemics, such as the COVID-19 pandemic.
Patient enrollment is affected by other factors including but not limited to: • the size and nature of the patient population; • the severity of the disease under investigation; • the proximity and availability of clinical trial sites for prospective patients; • the eligibility criteria for participation in the clinical trial; • the design of the clinical trial; • the perceived risks and benefits of the product candidate under study; • our ability to recruit clinical trial investigators with appropriate experience; • the availability of drugs approved to treat the diseases under study; • the patient referral practices of physicians; • our ability to obtain and maintain patient consents; • the ability to monitor patients adequately during and after treatment; 50 Table of Contents • the risk that patients enrolled in clinical trials will drop out of the trials before completion; and • the impact of public health epidemics, such as the COVID-19 pandemic.
Even if we can establish and maintain arrangements with third-party manufacturers, reliance on third-party manufacturers entails risks, including but not limited to: • reliance on the third party for regulatory compliance and quality assurance; • the possible breach of the manufacturing agreement by the third party; • the possible misappropriation of our proprietary information, including our trade secrets and know-how; • the possible termination or nonrenewal of the agreement by the third party at a time that is costly or inconvenient for us; and • supply chain disruptions due to geo-political actions, natural disasters or public healthy crises, including epidemics such as the COVID-19 pandemic.
Even if we can establish and maintain arrangements with third-party manufacturers, reliance on third-party manufacturers entails risks, including but not limited to: • reliance on the third party for regulatory compliance and quality assurance; • the possible breach of the manufacturing agreement by the third party; 56 Table of Contents • the possible misappropriation of our proprietary information, including our trade secrets and know-how; • the possible termination or nonrenewal of the agreement by the third party at a time that is costly or inconvenient for us; and • supply chain disruptions due to geo-political actions, natural disasters or public healthy crises, including epidemics such as the COVID-19 pandemic.
Without limiting the foregoing, we have experienced and/or may in the future experience: • delays in receiving authorization from regulatory authorities to initiate any planned clinical trials, inspections, reviews and approvals of products; 74 Table of Contents • delays or difficulties enrolling patients in our clinical trials; • delays in or disruptions to the conduct of preclinical programs and clinical trials; • constraints on the movement of products and supplies through the supply chain, which can disrupt our ability to conduct clinical trials and develop our products; • price increases in raw materials and capital equipment, as well as increasing price competition in our markets; • adverse impacts on our workforce and/or key employees; and • increased risk that counterparties to our contractual arrangements will become insolvent or otherwise unable to fulfill their contractual obligations.
Without limiting the foregoing, we have experienced and/or may in the future experience: • delays in receiving authorization from regulatory authorities to initiate any planned clinical trials, inspections, reviews and approvals of products; • delays or difficulties enrolling patients in our clinical trials; • delays in or disruptions to the conduct of preclinical programs and clinical trials; • constraints on the movement of products and supplies through the supply chain, which can disrupt our ability to conduct clinical trials and develop and commercialize our products; • price increases in raw materials and capital equipment, as well as increasing price competition in our markets; • adverse impacts on our workforce and/or key employees; and • increased risk that counterparties to our contractual arrangements will become insolvent or otherwise unable to fulfill their contractual obligations.
Satisfying the obligations relating to our debt could adversely affect our liquidity or the amount or timing of potential distributions to our stockholders. • GSK has indicated to us that it believes its consent may be required before we can engage in certain royalty monetization transactions with third parties, which may inhibit our ability to engage in these transactions. 38 Table of Contents • If clinical trials of our product candidates fail to demonstrate safety and efficacy to the satisfaction of the FDA, the EMA or other comparable regulatory authorities, or do not otherwise produce favorable results, we may incur additional costs or experience delays in completing, or ultimately be unable to complete, the development and commercialization of that product candidate. • We rely on collaborations with third parties for the development of both our product and commercial candidates, and we may seek additional collaborations in the future.
Satisfying the obligations relating to our debt could adversely affect our liquidity or the amount or timing of potential distributions to our stockholders. • GSK has indicated to us that it believes its consent may be required before we can engage in certain royalty monetization transactions with third parties, which may inhibit our ability to engage in these transactions. • If clinical trials of our and our related parties' product candidates fail to demonstrate safety and efficacy to the satisfaction of the FDA, the EMA or other comparable regulatory authorities, or do not otherwise produce favorable results, we may incur additional costs or experience delays in completing, or ultimately be unable to complete, the development and commercialization of that product candidate. • We rely on collaborations with third parties for the development of both our product and commercial candidates, and we may seek additional collaborations in the future.
Our reliance on third parties to manufacture our product candidates increases the risk that we will not have sufficient quantities of our product candidates or products or such quantities at an acceptable cost, which could delay, prevent or impair our development or commercialization efforts.
Our reliance on third parties to manufacture our product candidates and approved products increases the risk that we will not have sufficient quantities of our product candidates or approved products or such quantities at an acceptable cost, which could delay, prevent or impair our development or commercialization efforts.
Risks Related to our Business and Industry Currently, we derive most of our revenues from GSK and our near-term success depends in large part on GSK’s ability to successfully develop and commercialize the products in the respiratory programs partnered with GSK.
Risks Related to our Business and Industry Currently, we derive the majority of our revenues from GSK and our near-term success depends in large part on GSK’s ability to successfully develop and commercialize the products in the respiratory programs partnered with GSK.
We have conducted an analysis to determine whether an ownership change had occurred since inception through December 31, 2024 and concluded that it is more likely than not that the Company did not experience an ownership change during the testing period.
We have conducted an analysis to determine whether an ownership change had occurred since inception through December 31, 2025 and concluded that it is more likely than not that the Company did not experience an ownership change during the testing period.
Counterfeit medicines pose a risk to patient health and safety because of the conditions under which they are 60 Table of Contents manufactured - often in unregulated, unlicensed, uninspected and unsanitary sites - as well as the lack of regulation of their contents.
Counterfeit medicines pose a risk to patient health and safety because of the conditions under which they are manufactured - often in unregulated, unlicensed, uninspected and unsanitary sites - as well as the lack of regulation of their contents.
Even if we ultimately prevail in such claims, the monetary cost of such litigation and the diversion of the attention of our management and scientific personnel could outweigh any benefit we receive because of the proceedings. 65 Table of Contents Accordingly, despite our efforts, we may not be able to prevent third parties from infringing, misappropriating or successfully challenging our intellectual property rights.
Even if we ultimately prevail in such claims, the monetary cost of such litigation and the diversion of the attention of our management and scientific personnel could outweigh any benefit we receive because of the proceedings. Accordingly, despite our efforts, we may not be able to prevent third parties from infringing, misappropriating or successfully challenging our intellectual property rights.
Historically, all of our current and near-term projected revenues have been derived from products under the GSK Agreements. We expect royalties from such products will likely continue to comprise a portion of our revenues in the future.
Historically, much of our current and near-term projected revenues have been derived from products under the GSK Agreements. We expect royalties from such products will likely continue to comprise a portion of our revenues in the future.
These and other risks associated with our international operations may compromise our ability to achieve or maintain profitability. Risks Related to Managing Our Growth We have pursued and may continue to pursue acquisitions. Acquisitions could be difficult to integrate, divert the attention of key personnel, disrupt our business, dilute stockholder value and impair our financial results.
These and other risks associated with our international operations may compromise our ability to achieve or maintain profitability. 61 Table of Contents Risks Related to Managing Our Growth We have pursued and may continue to pursue acquisitions. Acquisitions could be difficult to integrate, divert the attention of key personnel, disrupt our business, dilute stockholder value and impair our financial results.
If we are unable to do so, we may be unable to develop or commercialize the affected technology and product candidates, which could materially harm our business, financial condition, results of operations, and prospects. We may become involved in lawsuits to protect or enforce our patents or other intellectual property, which could be expensive, time-consuming and unsuccessful.
If we are unable to do so, we may be unable to develop or commercialize the affected technology and product candidates, which could materially harm our business, financial condition, results of operations, and prospects. 64 Table of Contents We may become involved in lawsuits to protect or enforce our patents or other intellectual property, which could be expensive, time-consuming and unsuccessful.
Our failure to compete effectively for talent could negatively affect sales of our current and any future approved products, and could result in material financial, legal, commercial, or reputational harm to our business. 47 Table of Contents Uneven economic growth or downturns or international trade and other global disruptions, geopolitical tensions, or disputes could adversely affect our business and operating results.
Our failure to compete effectively for talent could negatively affect sales of our current and any future approved products, and could result in material financial, legal, commercial, or reputational harm to our business. Uneven economic growth or downturns or international trade and other global disruptions, geopolitical tensions, or disputes could adversely affect our business and operating results.
If there are material defects in the form or preparation of our 63 Table of Contents patents or patent applications, such patents or applications may be invalid and/or unenforceable. Moreover, our competitors may independently develop equivalent knowledge, methods and know-how. Any of these outcomes could impair our ability to prevent competition from third parties.
If there are material defects in the form or preparation of our patents or patent applications, such patents or applications may be invalid and/or unenforceable. Moreover, our competitors may independently develop equivalent knowledge, methods and know-how. Any of these outcomes could impair our ability to prevent competition from third parties.
The FDA did not concur with the recommendation. A pediatric program including patients 5‑17 years of age is currently ongoing. 45 Table of Contents In addition, the manufacturing, labeling, packaging, adverse event reporting, advertising, promotion and recordkeeping for the approved product remain subject to extensive and ongoing regulatory requirements.
The FDA did not concur with the recommendation. A pediatric program including patients 5‑17 years of age is currently ongoing. In addition, the manufacturing, labeling, packaging, adverse event reporting, advertising, promotion and recordkeeping for the approved product remain subject to extensive and ongoing regulatory requirements.
If we fail to properly evaluate or integrate acquisitions, we may not achieve the anticipated benefits of any such acquisitions, and we may 62 Table of Contents incur costs in excess of what we anticipate. The failure to successfully evaluate and execute acquisitions or otherwise adequately address these risks could materially harm our business and financial results.
If we fail to properly evaluate or integrate acquisitions, we may not achieve the anticipated benefits of any such acquisitions, and we may incur costs in excess of what we anticipate. The failure to successfully evaluate and execute acquisitions or otherwise adequately address these risks could materially harm our business and financial results.
If we experience delays in obtaining approval or if we fail to obtain approval of our product candidates, the commercial prospects for our product candidates may be harmed and our ability to generate revenues will be impaired. Failure to obtain marketing approval in foreign jurisdictions would prevent certain of our product candidates from being marketed in these territories.
If we experience delays in obtaining approval or if we fail to obtain approval of our product candidates, the commercial prospects for our product candidates may be harmed and our ability to generate revenues will be impaired. 67 Table of Contents Failure to obtain marketing approval in foreign jurisdictions would prevent certain of our product candidates from being marketed in these territories.
Further, actions taken with respect to tax-related matters by associations such as the Organisation for Economic Co-operation and Development and the 76 Table of Contents European Commission could influence tax laws in countries in which we operate, such as the recent enactments by both the EU and non-EU countries of a global minimum tax.
Further, actions taken with respect to tax-related matters by associations such as the Organisation for Economic Co-operation and Development and the European Commission could influence tax laws in countries in which we operate, such as the recent enactments by both the EU and non-EU countries of a global minimum tax.
If our product candidates achieve marketing approval, we expect that they will be priced at a significant premium over competitive generic drugs. Counterfeit versions of our products could harm our patients and have a negative impact on our revenues, earnings, reputation and business.
If our product candidates achieve marketing approval, we expect that they will be priced at a significant premium over competitive generic drugs. 59 Table of Contents Counterfeit versions of our products could harm our patients and have a negative impact on our revenues, earnings, reputation and business.
If those collaborations are not successful, we may not be able to capitalize on the market potential of these product or commercial candidates. • Even if any of our product candidates receives marketing approval, such product candidate may fail to achieve the degree of market acceptance by physicians, patients, third-party payors and others in the medical community necessary for commercial success. • Our operations could be disrupted by failure of our information systems or cyber-attacks. • If we engage in future acquisitions or strategic collaborations, this may increase our capital requirements, dilute our stockholders, cause us to incur debt or assume contingent liabilities and subject us to other risks. • Even if we complete the necessary preclinical studies and clinical trials, the regulatory approval process is expensive, time-consuming and uncertain and may prevent us or any future collaborators from obtaining approvals for the commercialization of some or all of our product candidates.
If those collaborations are not successful, we may not be able to capitalize on the market potential of these product or commercial candidates. • Even if any of our product candidates receives marketing approval, such product candidate may fail to achieve the degree of market acceptance by physicians, patients, third-party payors and others in the medical community necessary for commercial success. • Our operations could be disrupted by failure of our information systems or cyber-attacks. 38 Table of Contents • If we engage in future acquisitions or strategic collaborations, this may increase our capital requirements, dilute our stockholders, cause us to incur debt or assume contingent liabilities and subject us to other risks. • The regulatory approval process is expensive, time-consuming and uncertain and may prevent us or any future collaborators from obtaining approvals for the commercialization of some or all of our product candidates.
Differences between preliminary or interim data and final data could significantly harm our business prospects and may cause the trading price of our common stock to fluctuate significantly. 52 Table of Contents Our operations could be disrupted by failure of our information systems or cyber-attacks.
Differences between preliminary or interim data and final data could significantly harm our business prospects and may cause the trading price of our common stock to fluctuate significantly. Our operations could be disrupted by failure of our information systems or cyber-attacks.
Claims that we have misappropriated the confidential information or trade secrets of third parties could have a similar negative effect on our business. We may not be able to protect our intellectual property rights throughout the world.
Claims that we have misappropriated the confidential information or trade secrets of third parties could have a similar negative effect on our business. 65 Table of Contents We may not be able to protect our intellectual property rights throughout the world.
Our reliance on government funding for certain of our programs adds uncertainty to our research, development and commercialization efforts with respect to those programs and may impose requirements that increase the costs of the research, development and commercialization of product candidates developed under those government-funded programs.
Our and our investees' reliance on non-profit and government funding for certain of our and our investees' programs adds uncertainty to our and our investees' research, development and commercialization efforts with respect to those programs and may impose requirements that increase the costs of the research, development and commercialization of product candidates developed under those non-profit and government-funded programs.
In addition, government price reporting and payment regulations are complex, and require ongoing assessment of the methods by 72 Table of Contents which we calculate and report pricing. Calculation methodologies are inherently subjective and are subject to review and challenge by government agencies.
In addition, government price reporting and payment regulations are complex, and require ongoing assessment of the methods by which we calculate and report pricing. Calculation methodologies are inherently subjective and are subject to review and challenge by government agencies.
In addition, we could be required to expend significant management time and financial resources to correct any material weaknesses that may be identified or to respond to any regulatory investigations or proceedings. We are also subject to complex tax laws, regulations, accounting principles and interpretations thereof.
In addition, we could be required to expend significant management time and financial resources to correct any material weaknesses that may be identified or to respond to any regulatory investigations or proceedings. 74 Table of Contents We are also subject to complex tax laws, regulations, accounting principles and interpretations thereof.
While we maintain insurance coverage for certain types of claims, such insurance coverage may be insufficient to cover all losses or all types of claims that may arise. Failure to comply with the U.S.
While we maintain insurance coverage for certain types of claims, such insurance coverage may be insufficient to cover all losses or all types of claims that may arise. 75 Table of Contents Failure to comply with the U.S.
Given the amount of time required for the development, testing and regulatory review of new product candidates, patents protecting such product candidates might expire before or shortly after such product 64 Table of Contents candidates are commercialized.
Given the amount of time required for the development, testing and regulatory review of new product candidates, patents protecting such product candidates might expire before or shortly after such product candidates are commercialized.
For example, we will remain responsible for ensuring that each of our clinical trials is 54 Table of Contents conducted in accordance with the general investigational plan and protocols for the trial.
For example, we will remain responsible for ensuring that each of our clinical trials is conducted in accordance with the general investigational plan and protocols for the trial.
To protect our proprietary positions, we file patent applications in the United States and abroad related to our novel technologies and product candidates that are important to our business. The patent application and prosecution process are expensive and time-consuming.
To protect our proprietary positions, we file patent applications in the United States and abroad related to our novel technologies and product candidates that are important to our business. 62 Table of Contents The patent application and prosecution process are expensive and time-consuming.
Any adverse developments or results or perceived adverse developments or results with respect to the ongoing studies for FF/VI in asthma or COPD, for UMEC/VI in COPD, or any future studies would significantly harm our business and the price of our securities could fall, and if regulatory authorities in those countries in which approval has not yet been granted determine that the ongoing studies for FF/VI in asthma or COPD or the ongoing studies for UMEC/VI for COPD do not demonstrate adequate safety and efficacy, the continued development of FF/VI or UMEC/VI or both could be significantly delayed, they might not be approved by these regulatory authorities, and even if approved they may be subject to restrictive labeling, any of which might harm our business, and the price of our securities could fall.
In the event that any adverse regulatory changes were to occur to any of our products, our business would be harmed, and the price of our securities could fall. 42 Table of Contents Any adverse developments or results or perceived adverse developments or results with respect to the ongoing studies for FF/VI in asthma or COPD, for UMEC/VI in COPD, or any future studies would significantly harm our business and the price of our securities could fall, and if regulatory authorities in those countries in which approval has not yet been granted determine that the ongoing studies for FF/VI in asthma or COPD or the ongoing studies for UMEC/VI for COPD do not demonstrate adequate safety and efficacy, the continued development of FF/VI or UMEC/VI or both could be significantly delayed, they might not be approved by these regulatory authorities, and even if approved they may be subject to restrictive labeling, any of which might harm our business, and the price of our securities could fall.
These requirements include, for example: • specialized accounting systems unique to government awards; 58 Table of Contents • mandatory financial audits and potential liability for price adjustments or recoupment of government funds after such funds have been spent; • adhering to stewardship principles imposed by CARB-X as a condition of the award; • public disclosures of certain award information, which may enable competitors to gain insights into our research program; and • mandatory socioeconomic compliance requirements, including labor standards, non-discrimination and affirmative action programs and environmental compliance requirements.
These requirements include, for example: • specialized accounting systems unique to government awards; • mandatory financial audits and potential liability for price adjustments or recoupment of government funds after such funds have been spent; • adhering to stewardship principles imposed by CARB-X as a condition of the award; • public disclosures of certain award information, which may enable competitors to gain insights into our research program; and • mandatory socioeconomic compliance requirements, including labor standards, non-discrimination and affirmative action programs and environmental compliance requirements. 57 Table of Contents As an organization, we are relatively new to government contracting and new to the regulatory compliance obligations that such contracting entails.
Interim data from clinical trials that we may complete are subject to the risk that one or more of the clinical outcomes may materially change as patient enrollment continues and/or more patient data become available.
From time to time, we may announce interim top-line or preliminary data from our clinical trials. Interim data from clinical trials that we may complete are subject to the risk that one or more of the clinical outcomes may materially change as patient enrollment continues and/or more patient data become available.
This may make it difficult for GSK to sell our partnered products at a price acceptable to us or GSK or to generate revenues in line with our analysts’ or investors’ expectations, which may cause the price of our securities to fall. More recently, the presidential administration and the U.S.
This may make it difficult for GSK to sell our partnered products at a price acceptable to us or GSK or to generate revenues in line with our analysts’ or investors’ expectations, which may cause the price of our securities to fall.
In addition, increased scrutiny by the U.S. Congress of the FDA’s approval process may significantly delay or prevent marketing approval, as well as subject us to more stringent product labeling and post-marketing testing and other requirements.
Congress of the FDA’s approval process may significantly delay or prevent marketing approval, as well as subject us to more stringent product labeling and post-marketing testing and other requirements.
Any such delays could negatively impact our business, financial condition, results of operations and prospects. 48 Table of Contents If clinical trials of our product candidates fail to demonstrate safety and efficacy to the satisfaction of the FDA, the EMA or other comparable regulatory authorities, or do not otherwise produce favorable results, we may incur additional costs or experience delays in completing, or ultimately be unable to complete, the development and commercialization of that product candidate.
If clinical trials of our product candidates fail to demonstrate safety and efficacy to the satisfaction of the FDA, the EMA or other comparable regulatory authorities, or do not otherwise produce favorable results, we may incur additional costs or experience delays in completing, or ultimately be unable to complete, the development and commercialization of that product candidate.
We are dependent on GSK for the successful commercialization and development of products under the GSK Agreements. If GSK does not devote sufficient resources to the commercialization or development of these products, is unsuccessful in its efforts, or chooses to reprioritize its commercial programs, our business would be materially harmed.
If GSK does not devote sufficient resources to the commercialization or development of these products, is unsuccessful in its efforts, or chooses to reprioritize its commercial programs, our business would be materially harmed.
Efforts to ensure that our future business arrangements with third parties will comply with applicable healthcare laws and regulations may involve substantial costs. It is possible that governmental authorities will conclude that our business practices may not comply with current or future statutes, regulations or case law involving applicable fraud and abuse or other healthcare laws.
It is possible that governmental authorities will conclude that our business practices may not comply with current or future statutes, regulations or case law involving applicable fraud and abuse or other healthcare laws.
However, there is often significant competition for these contracts or grants. Entities offering contracts or grants may have requirements to apply for or to otherwise be eligible to receive certain contracts or grants that our competitors may be able to satisfy that we cannot.
Entities offering contracts or grants may have requirements to apply for or to otherwise be eligible to receive certain contracts or grants that our competitors may be able to satisfy that we cannot.
In addition, to the extent we pursue and complete a monetization transaction or a transaction that modifies our corporate structure, the structure of such transaction may qualify as a fundamental change under the Notes, which could trigger the put rights of the holders of the Notes, in which case we would be required to use a portion of the net proceeds from such transaction to repurchase any Notes put to us.
In addition, to the extent we pursue and complete a monetization transaction or a transaction that modifies our corporate structure, the structure of such transaction may qualify as a fundamental change under the 2028 Notes, which could trigger the put rights of the holders of the 2028 Notes, in which case we would be required to use a portion of the net proceeds from such transaction to repurchase any Notes put to us. 46 Table of Contents Satisfying the obligations of this debt could adversely affect the amount or timing of any distributions to our stockholders.
Non-compliance with U.K. and EU requirements regarding safety monitoring or pharmacovigilance, and with requirements related to the development of products for the pediatric population, also can result in significant financial penalties.
Non-compliance with U.K. and EU requirements regarding safety monitoring or pharmacovigilance, and with requirements related to the development of products for the pediatric population, also can result in significant financial penalties. Similarly, failure to comply with the U.K.’s or EU’s requirements regarding the protection of personal information can also lead to significant penalties and sanctions.
Any adverse change in FDA policy or guidance regarding the use of LABAs to treat asthma could significantly harm our business and the price of our securities could fall. 42 Table of Contents Any adverse developments to the regulatory status of either RELVAR ® /BREO ® ELLIPTA ® or ANORO ® ELLIPTA ® in the countries in which they have received regulatory approval, including labeling restrictions, safety findings, or any other limitation to usage, would harm our business and may cause the price of our securities to fall.
Any adverse developments to the regulatory status of either RELVAR ® /BREO ® ELLIPTA ® or ANORO ® ELLIPTA ® in the countries in which they have received regulatory approval, including labeling restrictions, safety findings, or any other limitation to usage, would harm our business and may cause the price of our securities to fall.
Adverse macroeconomic conditions, including inflation, slower growth or recession, new or increased tariffs and other barriers to trade, changes to fiscal and monetary policy or government budget dynamics (particularly in the pharmaceutical and biotech areas), tighter credit, higher interest rates, volatility in financial markets, high unemployment, labor availability constraints, currency fluctuations and other challenges in the global economy have in the past adversely affected, and may in the future adversely affect, us and our business partners and suppliers.
Adverse macroeconomic conditions, including inflation, slower growth or recession, new or increased tariffs and other barriers to trade, changes to fiscal and monetary policy or government budget dynamics (particularly in the pharmaceutical and biotech areas), tighter credit, higher interest rates, volatility in financial markets, high unemployment, labor availability constraints, currency fluctuations and other challenges in the global economy have in the past adversely affected, and may in the future adversely affect, us and our business partners and suppliers. 73 Table of Contents Further, military conflicts or wars (such as the ongoing conflicts between Russia and Ukraine and in the Middle East) can cause exacerbated volatility and disruptions to various aspects of the global economy.
Any delays or adverse developments or perceived additional delays or adverse developments with respect to the commercialization of RELVAR ® /BREO ® ELLIPTA ® and ANORO ® ELLIPTA ® including if sales or payor coverage does not meet investors’, analysts’, or our expectations, would significantly harm our business and the price of our securities could fall.
Any delays or adverse developments or perceived additional delays or adverse developments with respect to the commercialization of RELVAR ® /BREO ® ELLIPTA ® and ANORO ® ELLIPTA ® including if sales or payor coverage does not meet investors’, analysts’, or our expectations, would significantly harm our business and the price of our securities could fall. 41 Table of Contents We are dependent on GSK for the successful commercialization and development of products under the GSK Agreements.
In addition to seeking patent and trademark protection for our product candidates, we also rely on trade secrets, including unpatented know-how, technology and other proprietary information, to maintain our competitive position.
If we are unable to protect the confidentiality of our trade secrets, our business and competitive position would be harmed. In addition to seeking patent and trademark protection for our product candidates, we also rely on trade secrets, including unpatented know-how, technology and other proprietary information, to maintain our competitive position.
Risks Related to Regulatory Approval of Our Product Candidates and Other Legal Compliance Matters Even if we complete the necessary preclinical studies and clinical trials, the regulatory approval process is expensive, time-consuming and uncertain and may prevent us or any future collaborators from obtaining approvals for the commercialization of some or all of our product candidates.
If any of our trade secrets were to be disclosed to or independently developed by a competitor, our competitive position would be harmed. 66 Table of Contents Risks Related to Regulatory Approval of Our Product Candidates and Other Legal Compliance Matters Even if we complete the necessary preclinical studies and clinical trials, the regulatory approval process is expensive, time-consuming and uncertain and may prevent us or any future collaborators from obtaining approvals for the commercialization of some or all of our product candidates.
The need to restate our financial results could, among other potential adverse effects, result in our incurring substantial costs, affect our ability to timely file our periodic reports until such restatement is completed, divert the attention of our management and employees from managing our business, result in material changes to our historical and future financial results, result in investors losing confidence in our operating results, subject us to securities class action litigation, and cause our stock price to decline. 75 Table of Contents Our employees or third-party providers, or employees or third-party providers of our portfolio companies may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements and insider trading.
The need to restate our financial results could, among other potential adverse effects, result in our incurring substantial costs, affect our ability to timely file our periodic reports until such restatement is completed, divert the attention of our management and employees from managing our business, result in material changes to our historical and future financial results, result in investors losing confidence in our operating results, subject us to securities class action litigation, and cause our stock price to decline.
Alternatively, GSK may decide to market to eventually compete directly against sales of RELVAR ® /BREO ® ELLIPTA ® . In the event GSK does not devote sufficient resources to the commercialization of our partnered products or chooses to reprioritize its commercial programs, our business, operations and stock price would be negatively affected.
In the event GSK does not devote sufficient resources to the commercialization of our partnered products or chooses to reprioritize its commercial programs, our business, operations and stock price would be negatively affected.
Thus, the cost of compliance with post-approval regulations may have a negative effect on our operating results and financial condition. 68 Table of Contents Any product candidate for which we obtain marketing approval could be subject to post-marketing restrictions or recall or withdrawal from the market, and we may be subject to penalties if we fail to comply with regulatory requirements or if we experience unanticipated problems with our product candidates, when and if any of them are approved.
Any product candidate for which we obtain marketing approval could be subject to post-marketing restrictions or recall or withdrawal from the market, and we may be subject to penalties if we fail to comply with regulatory requirements or if we experience unanticipated problems with our product candidates, when and if any of them are approved.
The Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010 (together, “PPACA”) and other legislative or regulatory requirements or potential legislative or regulatory actions regarding healthcare and insurance matters, along with the trend toward managed healthcare in the U.S., could adversely influence the purchase of healthcare products and reduce demand and prices for our partnered products.
In addition, we have experienced and expect to continue to experience increased competitive activity, which has resulted in lower overall prices for our products. 40 Table of Contents The Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010 (together, “PPACA”) and other legislative or regulatory requirements or potential legislative or regulatory actions regarding healthcare and insurance matters, along with the trend toward managed healthcare in the U.S., could adversely influence the purchase of healthcare products and reduce demand and prices for our partnered products.
Similarly, failure to comply with the U.K.’s or EU’s requirements regarding the protection of personal information can also lead to significant penalties and sanctions. 69 Table of Contents Our current and future relationships with healthcare professionals, principal investigators, consultants, customers and third-party payors in the United States and elsewhere may be subject, directly or indirectly, to applicable anti-kickback, fraud and abuse, false claims, physician payment transparency, health information privacy and security and other healthcare laws and regulations, which could expose us to penalties.
Our current and future relationships with healthcare professionals, principal investigators, consultants, customers and third-party payors in the United States and elsewhere may be subject, directly or indirectly, to applicable anti-kickback, fraud and abuse, false claims, physician payment transparency, health information privacy and security and other healthcare laws and regulations, which could expose us to penalties.
Among policy makers and payors in the United States and elsewhere, there is significant interest in promoting changes in healthcare systems with the stated goals of containing healthcare costs, improving quality and/or expanding access. 71 Table of Contents Other federal health reform measures have been proposed and adopted in the United States.
Among policy makers and payors in the United States and elsewhere, there is significant interest in promoting changes in healthcare systems with the stated goals of containing healthcare costs, improving quality and/or expanding access.
In addition, we could be criticized for the scope of such initiatives or goals or perceived as not acting responsibly in connection with these matters. Our business could be negatively impacted by such matters. Any such matters, or related corporate citizenship and sustainability matters, could have a material adverse effect on our business.
In addition, we could be criticized for the scope of such initiatives or goals or perceived as not acting responsibly in connection with these matters. Our business could be negatively impacted by such matters.
Risks Related to Our Dependence on Third Parties We rely on third parties to conduct the clinical trials for our product candidates, and those third parties may not perform satisfactorily, including failing to meet deadlines for the completion of such trials or failing to comply with applicable regulatory requirements.
Any such matters, or related corporate citizenship and sustainability matters, could have a material adverse effect on our business. 53 Table of Contents Risks Related to Our Dependence on Third Parties We rely on third parties to conduct the clinical trials for our products and product candidates, and those third parties may not perform satisfactorily, including failing to meet deadlines for the completion of such trials or failing to comply with applicable regulatory requirements.
Our current and anticipated future dependence upon others for the manufacture of our product candidates may adversely affect our future profit margins and our ability to develop product candidates and commercialize any products that receive marketing approval on a timely and competitive basis. 57 Table of Contents We may not be able to win government or non-profit contracts or grants to fund our product development activities.
Our current and anticipated future dependence upon others for the manufacture of our product candidates may adversely affect our future profit margins and our ability to develop product candidates and commercialize any products that receive marketing approval on a timely and competitive basis.
As of December 31, 2024, we had $453.5 million in total debt outstanding, comprised primarily of $192.5 million in principal outstanding under our convertible senior notes due 2025 (the “2025 Notes”) and $261.0 million in principal outstanding under our convertible notes due 2028 (the “2028 Notes”) (the 2025 Notes and 2028 Notes, hereinafter, the “Notes”).
As of December 31, 2025, we had $261.0 million in total debt outstanding, comprised of the principal outstanding under our convertible notes due 2028 (the “2028 Notes”). The 2028 Notes are unsecured debt.
We do not own or operate manufacturing facilities to produce clinical or commercial supplies of the product candidates that we are developing or evaluating. We have limited personnel with experience in drug manufacturing and lack the resources and the capabilities to manufacture any of our product candidates on a clinical or commercial scale.
We have limited personnel with experience in drug manufacturing and lack the resources and the capabilities to manufacture any of our product candidates on a clinical scale or our approved products on a commercial scale.
Frequently, product candidates that have shown promising results in early preclinical or clinical studies have subsequently suffered significant setbacks or failed in later clinical or non‑clinical studies. In addition, clinical and non‑clinical studies of potential products often reveal that it is not possible or practical to continue development efforts for these product candidates.
In addition, clinical and non‑clinical studies of potential products often reveal that it is not possible or practical to continue development efforts for these product candidates.
In addition, we may experience regulatory delays or rejections because of many factors, including to changes in regulatory policy during the period of our product candidate development.
In addition, we may experience regulatory delays or rejections because of many factors, including to changes in regulatory policy during the period of our product candidate development. Any such delays could negatively impact our business, financial condition, results of operations and prospects.
The issuance of a patent is not conclusive as to its inventorship, scope, validity or enforceability, and our owned and licensed patents may be challenged in the courts or patent offices in the United States and abroad.
In any of these types of proceedings, a court or other agency with jurisdiction may find our patents invalid and/or unenforceable. 63 Table of Contents The issuance of a patent is not conclusive as to its inventorship, scope, validity or enforceability, and our owned and licensed patents may be challenged in the courts or patent offices in the United States and abroad.
Enrollment delays in these clinical trials may result in increased development costs for our product candidates, which would reduce the capital we have available to support current and future product candidates and may result in the need to raise additional capital earlier than planned and could cause the value of our common stock to decline and limit our ability to obtain additional financing. 51 Table of Contents Our product candidates may cause undesirable side effects or have other properties that could delay or prevent their regulatory approval, limit the commercial potential or result in significant negative consequences following any potential marketing approval.
Enrollment delays in these clinical trials may result in increased development costs for our product candidates, which would reduce the capital we have available to support current and future product candidates and may result in the need to raise additional capital earlier than planned and could cause the value of our common stock to decline and limit our ability to obtain additional financing.
In particular, GSK has a substantial respiratory product portfolio in addition to the partnered products that are covered by the GSK Agreements. GSK may make respiratory product portfolio decisions or statements about its portfolio which may be, or may be perceived to be, harmful to the respiratory products partnered with us.
GSK may make respiratory product portfolio decisions or statements about its portfolio which may be, or may be perceived to be, harmful to the respiratory products partnered with us.
Many of the pharmaceutical companies competing in respiratory markets are international in scope with substantial financial, technical and personnel resources that permit them to discover, develop, obtain regulatory approval and commercialize new products in a highly efficient and low-cost manner at competitive prices to consumers.
For example, sales of generic Advair ® , GSK’s approved medicine for both COPD and asthma, continue to have a negative impact on sales of RELVAR ® /BREO ® ELLIPTA ® . 43 Table of Contents Many of the pharmaceutical companies competing in respiratory markets are international in scope with substantial financial, technical and personnel resources that permit them to discover, develop, obtain regulatory approval and commercialize new products in a highly efficient and low-cost manner at competitive prices to consumers.
These technologies may present opportunities for our business but may also entail risks, including that AI‐generated analyses utilized by us could be deficient or exacerbate regulatory, cybersecurity or other significant risks.
These technologies may present opportunities for our business but may also entail risks, including that AI‐generated analyses utilized by us could be deficient or exacerbate regulatory, cybersecurity or other significant risks. Further, our failure to effectively implement these technologies could hinder our ability to compete, as competitors’ advancements in AI may lead to more efficient operations.
Existing or future acquisitions and investments could involve numerous risks that may prevent us from fully realizing the benefits that we anticipated as a result of the transaction.
As part of our strategy, we frequently monitor and analyze acquisition or investment opportunities that we believe will create value for our shareholders. Existing or future acquisitions and investments could involve numerous risks that may prevent us from fully realizing the benefits that we anticipated as a result of the transaction.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeWe routinely assess material risks from cybersecurity threats, including any potential unauthorized occurrence on or conducted through our information systems that may result in adverse effects on the confidentiality, integrity, or availability of our information systems or any information residing therein. 78 Table of Contents We conduct risk assessments to identify cybersecurity threats at least annually, as well as assessments in the event of a material change in our business practices that may affect information systems that are vulnerable to such cybersecurity threats.
Biggest changeWe routinely assess material risks from cybersecurity threats, including any potential unauthorized occurrence on or conducted through our information systems that may result in adverse effects on the confidentiality, integrity, or availability of our information systems or any information residing therein. 77 Table of Contents We conduct risk assessments to identify cybersecurity threats at least annually, as well as assessments in the event of a material change in our business practices that may affect information systems that are vulnerable to such cybersecurity threats.
These service providers assist us in designing and implementing our cybersecurity policies and procedures, as well as to monitor and test our safeguards. During the year ended December 31, 2024, we did not identify any risks from known cybersecurity threats, including because of any prior cybersecurity incidents, that have materially affected us.
These service providers assist us in designing and implementing our cybersecurity policies and procedures, as well as to monitor and test our safeguards. During the year ended December 31, 2025, we did not identify any risks from known cybersecurity threats, including because of any prior cybersecurity incidents, that have materially affected us.

Item 2. Properties

Properties — owned and leased real estate

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ITEM 2. PROPERTIES Our headquarters consist of a lease of 2,111 square feet of office space in Burlingame, California, which expires in December 2027. Our other material leased property is an office space of approximately 15,500 square feet located in Waltham, Massachusetts, which expires in March 2029.
Added
ITEM 2. PROPERTIES As of December 31, 2025, the following are the material properties that we occupy: Property Description Location Square Footage Owned or Leased Lease Term End Date Office space Burlingame, CA 2,111 Leased December 2027 Office space Waltham, MA 15,500 Leased March 2029 Office space and laboratory facility Lexington, MA 22,881 Leased April 2036 78 Table of Contents
Removed
We believe that these facilities are sufficient for our current operational needs and that suitable additional space will be available on commercially reasonable terms to accommodate expansion of our operations, if necessary.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeITEM 3. LEGAL PROCEEDINGS The information called for by this Item is incorporated herein by reference in Item 8. “Financial Statements and Supplementary Data,” Note 13, “Commitments and Contingencies”. 79 Table of Contents ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 80 Table of Contents PART II
Biggest changeITEM 3. LEGAL PROCEEDINGS The information called for by this Item is incorporated herein by reference in Item 8. “Financial Statements and Supplementary Data,” Note 13, “Commitments and Contingencies”. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 79 Table of Contents PART II

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeItem 4. Mine Safety Disclosures 80 PART II Item 5. Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 81 Item 6. [Reserved] 82 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 83 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 96 Item 8.
Biggest changeItem 4. Mine Safety Disclosures 79 PART II Item 5. Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 80 Item 6. [Reserved] 82 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 83 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 95 Item 8.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeStock Performance Graph The graph set forth below compares the cumulative total stockholder return on our common stock for the period commencing on December 31, 2019 and ending on December 31, 2024, with the cumulative total return of (i) the Nasdaq Composite Index, (ii) the Nasdaq S&P Small Cap 600 Pharma Index and (iii) the Nasdaq Biotechnology Index over the same period.
Biggest changeRepurchases may also be made pursuant to a trading plan under Rule 10b5-1 under the Exchange Act, which would permit shares to be repurchased when the Company might otherwise be precluded from doing so because of self-imposed trading blackout periods or other regulatory restrictions. 80 Table of Contents Stock Performance Graph The graph set forth below compares the cumulative total stockholder return on our common stock for the period commencing on December 31, 2020 and ending on December 31, 2025, with the cumulative total return of (i) the Nasdaq Composite Index, (ii) the Nasdaq S&P Small Cap 600 Pharma Index and (iii) the Nasdaq Biotechnology Index over the same period.
As many of our shares of common stock are held by brokers and other institutions on behalf of stockholders, we are unable to estimate the total number of stockholders represented by these record holders.3 Dividends We have not paid any cash dividends on our common stock since September 30, 2015.
As many of our shares of common stock are held by brokers and other institutions on behalf of stockholders, we are unable to estimate the total number of stockholders represented by these record holders. Dividends We have not paid any cash dividends on our common stock since September 30, 2015.
This graph assumes the investment of $100.00 on December 31, 2019 in each of (1) our common stock, (2) the Nasdaq Composite Index, (3) the Nasdaq S&P Small Cap 600 Pharma Index and (4) the Nasdaq Biotechnology Index, and assumes the reinvestment of dividends. The comparisons shown in the graph below are based upon historical data.
This graph assumes the investment of $100.00 on December 31, 2020 in each of (1) our common stock, (2) the Nasdaq Composite Index, (3) the Nasdaq S&P Small Cap 600 Pharma Index and (4) the Nasdaq Biotechnology Index, and assumes the reinvestment of dividends. The comparisons shown in the graph below are based upon historical data.
Upon changing our corporate name to Innoviva, Inc. on January 7, 2016, we changed the stock ticker symbol to “INVA” effective January 11, 2016. Holders As of February 14, 2025, there were 61 stockholders of record of our common stock.
Upon changing our corporate name to Innoviva, Inc. on January 7, 2016, we changed the stock ticker symbol to “INVA” effective January 11, 2016. Holders As of February 13, 2026, there were 53 stockholders of record of our common stock.
Notwithstanding anything to the contrary set forth in any of our previous or future filings under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, that might incorporate this Annual Report on Form 10‑K or future filings made by us under those statutes, this Stock Performance Graph section shall not be deemed filed with the SEC and shall not be deemed incorporated by reference into any of those prior filings or into any future filings made by us under those statutes. 81 Table of Contents COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN* Among Innoviva, Inc., the Nasdaq Composite Index, Nasdaq Biotechnology Index, and Nasdaq S&P Small Cap 600 Pharma Index. _________________________________________________________ * $100 invested on December 31, 2019 in stock or index, including reinvestment of dividends.
Notwithstanding anything to the contrary set forth in any of our previous or future filings under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, that might incorporate this Annual Report on Form 10‑K or future filings made by us under those statutes, this Stock Performance Graph section shall not be deemed filed with the SEC and shall not be deemed incorporated by reference into any of those prior filings or into any future filings made by us under those statutes.
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Purchases of Equity Securities by the Issuer During the year ended December 31, 2024, we did not repurchase shares of our common stock other than as disclosed in our Quarterly Report on Form 10-Q for the quarters ended March 31 and June 30, 2024.
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Purchases of Equity Securities by the Issuer The following table reflects share repurchases of our common stock for the three months ended December 31, 2025: Period Total Number of Shares Purchases Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1) Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs (1) November 3, 2025 to November 30, 2025 — — — $ 125,000,000 December 1, 2025 to December 31, 2025 227,855 $ 20.09 227,855 $ 120,422,367 Total 227,855 $ 20.09 227,855 (1) On November 3, 2025, the Board of Directors of Innoviva authorized a share repurchase program under which we may repurchase up to $125.0 million of our outstanding shares of common stock.
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The repurchase program authorized the repurchase by the Company of its common stock in open market transactions, including pursuant to a trading plan in accordance with Rule 10b-18 promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), 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.
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The authorization permitted management to repurchase shares of the Company’s common stock from time to time at management’s discretion.
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COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN* Among Innoviva, Inc., the Nasdaq Composite Index, Nasdaq Biotechnology Index, and Nasdaq S&P Small Cap 600 Pharma Index. * $100 invested on December 31, 2020 in stock or index, including reinvestment of dividends. 81 Table of Contents

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeResearch & Development Research and development expenses, as compared to the prior years, were as follows: Change Year Ended December 31, 2024 2023 (In thousands) 2024 2023 2022 $ % $ % Research and development $ 13,654 $ 33,922 $ 41,432 $ (20,268 ) (60 )% $ (7,510 ) (18 )% 90 Table of Contents Research and development expenses consisted of the following: Change Year Ended December 31, 2024 2023 (In thousands) 2024 2023 2022 $ % $ % External services $ 7,408 $ 20,051 $ 24,666 $ (12,643 ) (63 )% $ (4,615 ) (19 )% Compensation and related personnel costs 4,948 10,081 13,863 (5,133 ) (51 )% (3,782 ) (27 )% Facilities related 733 2,483 2,255 (1,750 ) (70 )% 228 10 % Other 565 1,307 648 (742 ) (57 )% 659 102 % Total research and development expenses $ 13,654 $ 33,922 $ 41,432 $ (20,268 ) (60 )% $ (7,510 ) (18 )% Research and development expenses for the year ended December 31, 2024 were mainly attributable to post marketing commitments required by the FDA and ongoing product development.
Biggest changeResearch & Development Research and development expenses, as compared to the prior years, were as follows: Change Year Ended December 31, 2025 2024 (In thousands) 2025 2024 2023 $ % $ % Research and development $ 30,604 $ 13,654 $ 33,922 $ 16,950 124 % $ (20,268 ) (60 )% Research and development expenses consisted of the following: Change Year Ended December 31, 2025 2024 (In thousands) 2025 2024 2023 $ % $ % External services $ 15,704 $ 7,408 $ 20,051 $ 8,296 112 % $ (12,643 ) (63 )% Compensation and related personnel costs 5,284 4,948 10,081 336 7 % (5,133 ) (51 )% Acquired IPR&D 9,368 — — 9,368 * — * Facilities related 53 733 2,483 (680 ) (93 )% (1,750 ) (70 )% Other 195 565 1,307 (370 ) (65 )% (742 ) (57 )% Total research and development expenses $ 30,604 $ 13,654 $ 33,922 $ 16,950 124 % $ (20,268 ) (60 )% Research and development expenses for the year ended December 31, 2025 included $9.4 million of allocated cost for acquired in-process research and development (“IPR&D”) related to the Lynx™ long-acting drug delivery platform as discussed in Note 14, “Asset Acquisition”, in the Consolidated Financial Statements.
Cash Flows from Financing Activities Net cash used in financing activities for the year ended December 31, 2024 of $13.5 million included $14.8 million for the repurchases of our common stock under the stock repurchase program, partially offset by $1.5 million in net proceeds from issuances of common stock.
Net cash used in financing activities for the year ended December 31, 2024 of $13.5 million included $14.8 million for the repurchases of our common stock under the stock repurchase program, partially offset by $1.5 million in net proceeds from issuances of common stock.
The changes in operating assets and liabilities included increases in other assets of $38.2 million, inventory of $6.8 million, accounts receivable of $5.9 million, and a decrease in accounts payable of $4.6 million, partially offset by an increases in income tax payable of $41.5 million and accrued liabilities of $3.0 million and a decrease in receivables from collaboration arrangements of $3.6 million. 94 Table of Contents Cash provided by operating activities for the year ended December 31, 2023 was $141.1 million, consisting primarily of our net income of $179.7 million, partially offset by net non-cash items of $13.9 million and net changes in operating assets and liabilities of $24.8 million.
The changes in operating assets and liabilities included increases in other assets of $38.2 million, inventory of $6.8 million, accounts receivable of $5.9 million, and a decrease in accounts payable of $4.6 million, partially offset by an increases in income tax payable of $41.5 million and accrued liabilities of $3.0 million and a decrease in receivables from collaboration arrangements of $3.6 million. 93 Table of Contents Cash provided by operating activities for the year ended December 31, 2023 was $141.1 million, consisting primarily of our net income of $179.7 million, partially offset by net non-cash items of $13.9 million and net changes in operating assets and liabilities of $24.8 million.
The changes in fair values of equity and long-term investments year over year reflect the realized gains and losses and net unrealized gains and losses in our strategic investments in Armata, InCarda, Gate and ImaginAb, and those investments managed by ISP Fund LP.
The changes in fair values of equity and long-term investments year over year reflect the realized gains and losses and net unrealized gains and losses in our strategic investments in Armata, InCarda, Gate, ImaginAb and Lyndra, and those investments managed by ISP Fund LP.
We measure the Gate convertible promissory note 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.
We measure the Syndeio convertible promissory note 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.
Research and development expenses for the year ended December 31, 2023 and 2022 were mainly attributable to our product development efforts for XACDURO ® .
Research and development expenses for the year ended December 31, 2023 were mainly attributable to our product development efforts for XACDURO ® .
As a result of the launch and approval of RELVAR ® /BREO ® ELLIPTA ® and ANORO ® ELLIPTA ® in the U.S., Japan and Europe, in accordance with the LABA Collaboration Agreement, we paid approval and launch milestone payments to GSK totaling $220.0 million during the year ended December 31, 2014.
As a result of the launch and approval of RELVAR ® /BREO ® ELLIPTA ® and ANORO ® ELLIPTA ® in the U.S., Japan and Europe, in accordance with the LABA Collaboration Agreement, we paid milestone fees to GSK totaling $220.0 million during the year ended December 31, 2014.
Cash Flows from Investing Activities Net cash used in investing activities for the year ended December 31, 2024 of $63.8 million included $59.6 million for purchases of trading securities, $32.3 million for purchases of equity investments managed by ISP Fund LP and $43.5 million in net purchases and sales of other investments managed by ISP Fund LP.
Net cash used in investing activities for the year ended December 31, 2024 of $63.8 million included $59.6 million for purchases of trading securities, $32.3 million for purchases of equity investments managed by ISP Fund LP and $43.5 million in net purchases and sales of other investments managed by ISP Fund LP.
Our long-term capital requirements will depend on many factors including the amount of our royalty revenues, sales growth of our currently marketed products, timing of regulatory approval of our product candidate and outcome of our acquisitions and strategic investments.
Our long-term capital requirements will depend on many factors including the amount of our royalty revenues, sales growth of our currently marketed products, timing of regulatory approval of our product candidates and outcome of our acquisitions and strategic investments.
The estimates for returns are recorded as a reduction of revenue on delivery to our customers. • Rebates: We participate in Medicaid rebate programs, which provide assistance to certain low-income patients based on each individual state’s guidelines regarding eligibility and services.
The estimates for returns are recorded as a reduction of revenue on delivery to our customers. 86 Table of Contents • Rebates: We participate in Medicaid rebate programs, which provide assistance to certain low-income patients based on each individual state’s guidelines regarding eligibility and services.
The general partner of the Partnership (the “General Partner”) is an affiliate of Sarissa Capital and, pursuant to an investment management agreement, Sarissa Capital acts as the investment adviser to the Partnership. Strategic Partners made a $300.0 million initial contribution into the Partnership.
The general partner of the Partnership (the “General Partner”) is an affiliate of Sarissa Capital and, pursuant to an investment 85 Table of Contents management agreement, Sarissa Capital acts as the investment adviser to the Partnership. Strategic Partners made a $300.0 million initial contribution into the Partnership.
Net cash used in investing activities was partially offset by $75.8 million in sales of equity investments managed by ISP Fund LP Net cash used in investing activities for the year ended December 31, 2023 of $66.8 million included $65.1 million for purchases trading securities, $31.2 million for purchases of equity investments managed by ISP Fund LP, $41.3 million in net purchases and sales of other investments managed by ISP Fund LP and $1.2 million for purchases of equity and long-term investments.
Net cash used in investing activities for the year ended December 31, 2023 of $66.8 million included $65.1 million for purchases trading securities, $31.2 million for purchases of equity investments managed by ISP Fund LP, $41.3 million in net purchases and sales of other investments managed by ISP Fund LP and $1.2 million for purchases of equity and long-term investments.
For the treatment of COPD, the collaboration has developed three combination products: • RELVAR ® /BREO ® ELLIPTA ® (“FF/VI”) (BREO ® ELLIPTA ® is the proprietary name in the U.S. and Canada and RELVAR ® ELLIPTA ® is the proprietary name outside the U.S. and Canada), a once‑daily combination medicine consisting of a LABA, vilanterol (VI), and an inhaled corticosteroid (“ICS”), fluticasone furoate (“FF”), • ANORO ® ELLIPTA ® (“UMEC/VI”), a once‑daily medicine combining a long‑acting muscarinic antagonist (“LAMA”), umeclidinium bromide (“UMEC”), with a LABA, vilanterol (VI), and • TRELEGY ® ELLIPTA ® (the combination FF/UMEC/VI), a once‑daily combination medicine consisting of an ICS, LAMA and LABA.
For the treatment of COPD, the collaboration has developed the following combination products: • RELVAR ® //BREO ® ELLIPTA ® (“FF/VI”) (BREO ® ELLIPTA ® is the proprietary name in the U.S. and Canada and RELVAR ® ELLIPTA ® is the proprietary name outside the U.S. and Canada), a once-daily combination medicine consisting of a LABA, vilanterol (VI), and an inhaled corticosteroid (“ICS”), fluticasone furoate (“FF”), and • ANORO ® ELLIPTA ® (“UMEC/VI”), a once-daily medicine combining a long-acting muscarinic antagonist (“LAMA”), umeclidinium bromide (“UMEC”), with a LABA, vilanterol (VI).
As of December 31, 2024, our total inventory included the remaining net fair value adjustments resulting from the acquisition of La Jolla of approximately $9.2 million, which will be recognized as cost of products sold when sales occur in future periods.
As of December 31, 2025, our total inventory included the remaining net fair value adjustments resulting from the acquisition of La Jolla of approximately $3.4 million, which will be recognized as cost of products sold when sales occur in future periods.
The step-up value included above amounted to $13.8 million, $27.2 million, and $10.0 million for the years ended December 31, 2024, 2023 and 2022, respectively. Our cost of products sold increased during the periods presented, driven by higher product sales volume.
The step-up value included above amounted to $4.8 million, $13.8 million and $27.2 million for the years ended December 31, 2025, 2024 and 2023, respectively. Our cost of products sold increased during the year ended December 31, 2025 presented, driven by higher product sales volume.
The Partnership Agreement includes a lock-up period of thirty-six months after which Strategic Partners is entitled to make withdrawals from the Partnership as of such lock-up expiration date and each anniversary thereafter, subject to certain limitations.
The Partnership Agreement includes a lock-up period of thirty-six months after which Strategic Partners is entitled to make withdrawals from the Partnership as of such lock-up expiration date and each anniversary thereafter, subject to certain limitations. In 2024, the lock-up period expired, and we elected to unwind the capital accounts in the Partnership.
Similar rules may apply under state tax laws. As of December 31, 2024, $154.8 million of Entasis’ federal net operating losses and $365.8 million of La Jolla’s federal operating losses from the acquisitions in 2022, both subject to annual limitations, were available for future utilization.
Similar rules may apply under state tax laws. As of December 31, 2025, $146.5 million of Entasis’ federal net operating losses and $351.2 million of La Jolla’s federal operating losses from the acquisitions in 2022, both subject to annual limitations, were available for future utilization.
Equity and Other Investments Our investments in Armata include a convertible note (the “Armata Convertible Note”) and term loans issued in July 2023 and March 2024 (the “July 2023 Armata Term Loan ” and the “March 2024 Armata Term Loan”, respectively), all of which are classified as Level 3 financial instruments.
Equity and Other Investments Our investments in Armata include a convertible note (the “Armata Convertible Note”) and term loans issued in July 2023, March 2024, March 2025 and August 2025, all of which are classified as Level 3 financial instruments.
We recorded $64.3 million in unrealized losses, $77.4 million in unrealized gains and $152.5 million in unrealized losses associated with equity investments in Armata for the years ended December 31, 2024, 2023 and 2022, respectively.
We recorded $141.4 million in unrealized gains, $64.3 million in unrealized losses and $77.4 million in unrealized gains associated with our equity method investments in Armata for the years ended December 31, 2025, 2024 and 2023, respectively.
Our company structure and organization are tailored to our focused activities of managing our respiratory assets partnered with GSK, commercializing our marketed products, developing our product candidates, optimizing capital allocation, and providing for certain essential reporting and management functions of a public company.
We believe we are well-positioned to deliver significant long-term shareholder value. Our company structure and organization are tailored to our focused activities of managing our respiratory assets partnered with GSK, commercializing our marketed products, developing our product candidates, optimizing capital allocation, and providing for certain essential reporting and management functions of a public company.
Critical Accounting Policies and Estimates Our management’s discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with U.S. GAAP.
We expect to receive distributions through April 2026. Critical Accounting Policies and Estimates Our management’s discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with U.S. GAAP.
Under the agreement, we committed to minimum purchases through December 31, 2027. As of December 31, 2024, we have approximately $26.4 million U.S. dollar equivalent in outstanding purchase commitments under this agreement. We also enter into agreements in the normal course of business with vendors for manufacturing, clinical trials and pre-clinical studies, and other services and products for operating purposes.
As of December 31, 2025, we have approximately $13.2 million U.S. dollar equivalent in outstanding purchase commitments under this agreement. We also enter into agreements in the normal course of business with vendors for manufacturing, clinical trials and pre-clinical studies, and other services and products for operating purposes.
Refer to Note 6, “Equity and Long-Term Investments and Fair Value Measurements”, to the Consolidated Financial Statements for more information. 92 Table of Contents Income Taxes Income tax expense, net, as compared to the prior years, was as follows: Change Year Ended December 31, 2024 2023 (In thousands) 2024 2023 2022 $ % $ % Income tax expense, net $ 13,996 $ 14,376 $ 66,687 $ (380 ) (3 )% $ (52,311 ) (78 )% As of December 31, 2024, 2023 and 2022, we had net operating loss carryforwards for federal income taxes of $520.6 million, $543.5 million and $411.5 million, respectively.
Refer to Note 6, “Equity and Long-Term Investments and Fair Value Measurements”, to the Consolidated Financial Statements for more information. 91 Table of Contents Income Taxes Income tax expense, net, as compared to the prior years, was as follows: Change Year Ended December 31, 2025 2024 (In thousands) 2025 2024 2023 $ % $ % Income tax expense, net $ (55,697 ) $ (13,996 ) $ (14,376 ) $ (41,701 ) * $ 380 (3 )% * Not Meaningful As of December 31, 2025, 2024 and 2023, we had net operating loss carryforwards for federal income taxes of $497.7 million, $520.6 million and $543.5 million, respectively.
We recorded $2.3 million in unrealized losses and $23.8 million in unrealized gains for the year ended December 31, 2024 and 2023 related to our other long-term investments in Armata.
We recorded $67.6 million in unrealized gains, $2.3 million in unrealized losses and $23.8 million in unrealized gains for the years ended December 31, 2025, 2024 and 2023, respectively, related to our other long-term investments in Armata, and unrealized gains of $10.7 million for the year ended December 31, 2025 related to our investments in Syndeio.
As of December 31, 2024, 2023 and 2022, we also had state net operating loss carryforwards of approximately $1.0 billion which will expire beginning 2030. As of December 31, 2024, we had state research and development tax credits of $33.3 million.
As of December 31, 2025, 2024 and 2023, we also had state net operating loss carryforwards of approximately $1,028.9 million, which will expire beginning 2030. As of December 31, 2025, we had state research and development tax credits of $33.6 million, which will expire beginning 2033.
License and Other Revenue We recognized $8.0 million in license and other revenue for the year ended December 31, 2024 as a result of the achievement of a regulatory milestone under our license agreement with Zai Lab.
We recognized $8.0 million in license and other revenue for the year ended December 31, 2024 as a result of the achievement of a regulatory milestone under our license agreement with Zai Lab. We also recognized $8.1 million and $3.4 million in license and other revenue under the aforementioned Amended Zai Agreement and Zai Manufacturing Stage Transfer Agreement, respectively.
Cost of Products Sold Cost of products sold, as compared to the prior years, were as follows: Change Year Ended December 31, 2024 2023 (In thousands) 2024 2023 2022 $ % $ % Cost of product sold $ 36,598 $ 41,040 $ 13,793 $ (4,442 ) (11 )% $ 27,247 198 % The cost of products sold also includes the inventory step-up value from the acquisition of La Jolla, which is recorded upon the sale of such inventory.
Cost of Products Sold Cost of products sold, as compared to the prior years, were as follows: Change Year Ended December 31, 2025 2024 (In thousands) 2025 2024 2023 $ % $ % Cost of product sold $ 77,384 $ 36,598 $ 41,040 $ 40,786 111 % $ (4,442 ) (11 )% 89 Table of Contents The cost of products sold also includes the inventory step-up value from the acquisition of La Jolla, which is recorded upon the sale of such inventory.
Cash provided by operating activities for the year ended December 31, 2022 was $201.7 million, consisting primarily of our net income of $220.3 million and net changes in operating assets and liabilities of $6.9 million, partially offset by net non-cash items of $25.4 million.
Cash provided by operating activities for the year ended December 31, 2024 was $188.7 million, consisting primarily of our net income of $23.4 million adjusted for net noncash items of $172.2 million, partially offset by net changes in operating assets and liabilities of $6.9 million.
Changes in Fair Values of Equity Method Investments and Equity and Long-Term Investments Changes in fair values of equity method investments and equity and long-term investments, net, as compared to the prior years, were as follows: Change Year Ended December 31, 2024 2023 (In thousands) 2024 2023 2022 $ % $ % Changes in fair values of equity method investments, net $ 64,253 $ (77,392 ) $ 161,749 $ 141,645 * $ (239,141 ) (148 )% Changes in fair values of equity and long-term investments, net $ 59,161 $ (11,129 ) $ (8,462 ) $ 70,290 * $ (2,667 ) 32 % * Not Meaningful The changes in fair values of equity method investments for the year ended December 31, 2024 were unfavorable mainly due to the decrease in Armata’s stock price.
Changes in Fair Values of Equity Method Investments and Equity and Long-Term Investments Changes in fair values of equity method investments and equity and long-term investments, net, as compared to the prior years, were as follows: Change Year Ended December 31, 2025 2024 (In thousands) 2025 2024 2023 $ % $ % Changes in fair values of equity method investments, net $ 141,433 $ (64,253 ) $ 77,392 $ 205,686 * $ (141,645 ) * Changes in fair values of equity and long-term investments, net $ 20,160 $ (59,161 ) $ 11,129 $ 79,321 * $ (70,290 ) * * Not Meaningful The changes in fair values of equity method investments for the year ended December 31, 2025 were favorable mainly due to the appreciation in Armata’s stock price.
We believe that the accounting policies discussed below are critical to understanding our historical and future performance, as these policies relate to the more significant areas involving management’s judgments and estimates. Business Combinations We use the acquisition method of accounting under Accounting Standards Codification (“ASC”) Topic 805, Business Combinations .
We believe that the accounting policies discussed below are critical to understanding our historical and future performance, as these policies relate to the more significant areas involving management’s judgments and estimates.
Our Level 3 financial instruments include the Gate convertible promissory note and private placement positions held by ISP Fund LP as these securities are not publicly traded and the assumptions used in the valuation model for valuing these securities are based on significant unobservable and observable inputs including those of publicly traded peer companies.
(“Syndeio”) (formerly known as Gate Neurosciences, Inc.) convertible promissory notes issued in November 2021 and March 2025, and private placement positions held by ISP Fund LP as these securities are not publicly traded and the assumptions used in the valuation model for valuing these securities are based on significant unobservable and observable inputs including those of publicly traded peer companies.
Sarissa Capital is considered to be a related party due to its investment in Innoviva’s common stock and its representation on our board of directors. 85 Table of Contents Partnership Agreement On December 11, 2020, Innoviva Strategic Partners LLC (“Strategic Partners”), our wholly owned subsidiary, entered into a subscription agreement (the “Subscription Agreement”) and an Amended and Restated Limited Partnership Agreement (the “Partnership Agreement”) pursuant to which Strategic Partners became a limited partner of ISP Fund LP (the “Partnership”).
Partnership Agreement On December 11, 2020, Innoviva Strategic Partners LLC (“Strategic Partners”), our wholly owned subsidiary, entered into a subscription agreement (the “Subscription Agreement”) and an Amended and Restated Limited Partnership Agreement (the “Partnership Agreement”) pursuant to which Strategic Partners became a limited partner of ISP Fund LP (the “Partnership”).
Cash Flows Cash flows, as compared to the prior years, were as follows: Year Ended December 31, Change (In thousands) 2024 2023 2022 2024 2023 Net cash provided by operating activities $ 188,690 $ 141,064 $ 201,726 $ 47,626 $ (60,662 ) Net cash used in investing activities (63,786 ) (66,761 ) (56,634 ) 2,975 (10,127 ) Net cash used in financing activities (13,453 ) (171,839 ) (55,568 ) 158,386 (116,271 ) Cash Flows from Operating Activities Cash provided by operating activities for the year ended December 31, 2024 was $188.7 million, consisting primarily of our net income of $23.4 million adjusted for net noncash items of $172.2 million, partially offset by net changes in operating assets and liabilities of $6.9 million.
Cash Flows Cash flows, as compared to the prior years, were as follows: Year Ended December 31, Change (In thousands) 2025 2024 2023 2025 2024 Net cash provided by operating activities $ 196,930 $ 188,690 $ 141,064 $ 8,240 $ 47,626 Net cash provided by (used in) investing activities 40,496 (63,786 ) (66,761 ) 104,282 2,975 Net cash provided by (used in) financing activities 8,551 (13,453 ) (171,839 ) 22,004 158,386 Cash Flows from Operating Activities Cash provided by operating activities for the year ended December 31, 2025 was $196.9 million, consisting primarily of our net income of $271.2 million adjusted for net noncash items of $50.1 million and net changes in operating assets and liabilities of $24.2 million.
Results of Operations Net Revenue Royalty Revenue Total royalty revenue, net, as compared to the prior years, was as follows: Change Year Ended December 31, 2024 2023 (In thousands) 2024 2023 2022 $ % $ % Royalties – RELVAR/BREO $ 207,925 $ 208,042 $ 215,034 $ (117 ) (0 )% $ (6,992 ) (3 )% Royalties – ANORO 47,631 44,627 38,405 3,004 7 % 6,222 16 % Royalties – TRELEGY — — 72,029 — 0 % (72,029 ) (100 )% Total royalties 255,556 252,669 325,468 2,887 1 % (72,799 ) (22 )% Less: amortization of capitalized fees paid (13,823 ) (13,823 ) (13,823 ) — * — * Total net royalty revenue $ 241,733 $ 238,846 $ 311,645 $ 2,887 1 % $ (72,799 ) (23 )% * Not Meaningful Total royalty revenue, net, increased to $241.7 million for the year ended December 31, 2024, compared to $238.8 million for the year ended December 31, 2023.
Results of Operations Net Revenue Royalty Revenue Total royalty revenue, net, as compared to the prior years, was as follows: Change Year Ended December 31, 2025 2024 (In thousands) 2025 2024 2023 $ % $ % Royalties – RELVAR/BREO $ 204,021 $ 207,925 $ 208,042 $ (3,904 ) (2 )% $ (117 ) (0 )% Royalties – ANORO 46,281 47,631 44,627 (1,350 ) (3 )% 3,004 7 % Total royalties 250,302 255,556 252,669 (5,254 ) (2 )% 2,887 1 % Less: amortization of capitalized fees paid (13,823 ) (13,823 ) (13,823 ) — * — * Total net royalty revenue $ 236,479 $ 241,733 $ 238,846 $ (5,254 ) (2 )% $ 2,887 1 % * Not Meaningful Total royalty revenue, net, decreased to $236.5 million for the year ended December 31, 2025, compared to $241.7 million for the year ended December 31, 2024.
Other expense, net, primarily consisted of expenses incurred by ISP Fund LP. 91 Table of Contents Interest Expense Interest expense, as compared to the prior years, was as follows: Change Year Ended December 31, 2024 2023 (In thousands) 2024 2023 2022 $ % $ % Interest expense $ 22,209 $ 19,157 $ 15,789 $ 3,052 16 % $ 3,368 21 % The interest expense for the periods presented included the contractual interest expense and the amortization of debt issuance costs for our convertible senior notes due 2025 (the “2025 Notes”) and our convertible senior notes due 2028 (the “2028 Notes”), as well as effective interest expense on our deferred royalty obligation related to GIAPREZA ® .
Interest Expense Interest expense, as compared to the prior years, was as follows: Change Year Ended December 31, 2025 2024 (In thousands) 2025 2024 2023 $ % $ % Interest expense $ (16,698 ) $ (22,209 ) $ (19,157 ) $ 5,511 (25 )% $ (3,052 ) 16 % The interest expense for the periods presented included the contractual interest expense and the amortization of debt issuance costs for our 2025 Notes and 2028 Notes, as well as effective interest expense on our deferred royalty obligation related to GIAPREZA ® .
The Monte Carlo simulation model also incorporates assumptions made based on transaction details such as the security’s stock price, the expected term, maturity, risk-free interest rates and dividend yield, as well as volatility. We also hold preferred stock warrants in InCarda Therapeutics Inc. (“InCarda”), a privately held, clinical-stage biopharmaceutical company.
The Monte Carlo simulation model also incorporates assumptions made based on transaction details such as the security’s stock price, the expected term, maturity, risk-free interest rates and dividend yield, as well as volatility. In addition, we hold a convertible note in Lyndra Therapeutics, Inc., which is classified as Level 3 financial instrument.
Adequacy of Cash Resources to Meet Future Needs We believe that our cash and cash equivalents will be sufficient to meet our anticipated debt service and operating needs for at least the next 12 months based upon current operating plans and financial forecasts.
In 2025, we received $121.0 million cash distributions and expect to continue receiving distributions through April 2026. 92 Table of Contents Adequacy of Cash Resources to Meet Future Needs We believe that our cash and cash equivalents will be sufficient to meet our anticipated debt service and operating needs, as well our ongoing share repurchase program, for at least the next 12 months based upon current operating plans and financial forecasts.
For the year ended December 31, 2024, we generated gross royalty revenues of $255.6 million, net product sales revenues of $97.5 million and license and other revenue of $19.5 million.
For the year ended December 31, 2025, we generated gross royalty revenues of $250.3 million, net product sales revenues of $172.1 million and license and other revenue of $2.7 million.
Non-cash charges included a $153.3 million net decrease in fair values of equity method investments and equity and long-term investments, $25.0 million of deferred income taxes, $13.9 million of amortization of capitalized fees and depreciation of property and equipment and $5.6 million in amortization of acquired intangible assets, $20.7 million in loss on the extinguishment of debt, $7.3 million in stock-based compensation expense, $10.0 million in inventory fair value adjustments included in cost of products sold and $2.1 million in the amortization of debt discount and issuance costs.
Noncash items included a $161.6 million net increase in fair values of equity method investments and equity and long-term investments, partially offset by $43.8 million in deferred income taxes, $26.3 million in amortization of acquired intangible assets, $14.0 million of amortization of capitalized fees and depreciation of property and equipment, $9.5 million in stock-based compensation expense, $9.4 million in acquired in-process research and development assets, $4.8 million in inventory fair value adjustments included in cost of products sold and $1.9 million in amortization of debt discount and issuance costs.
Refer to Note 4, “License and Collaboration Arrangements” to the Consolidated Financial Statements for more information. We also entered into a Commercial Supply Agreement with Corden Pharma CHENÔVE SAS (“Corden”), under which we engaged Corden to manufacture and supply certain products related to XACDURO ® and to perform certain services and studies.
We also entered into a Commercial Supply Agreement with Corden Pharma CHENÔVE SAS (“Corden”), under which we engaged Corden to manufacture and supply certain products related to XACDURO ® and to perform certain services and studies. Under the agreement, we committed to minimum purchases through December 31, 2027.
Quarterly payments to HCR under the Royalty Agreement start at a maximum royalty rate, with step-downs based on the achievement of annual net product sales thresholds. The maximum royalty rate through December 31, 2023 was 14%. Starting January 1, 2024, the maximum royalty rate was increased to 18% based on the terms of the Agreement.
Quarterly payments to HCR under the Royalty Agreement start at a maximum royalty rate, with step-downs based on the achievement of annual net product sales thresholds. The maximum royalty rate is 18% based on the terms of the agreement. The La Jolla Royalty Agreement is subject to maximum aggregate royalty payments to HCR of $225.0 million.
The year-over-year increases from 2022 to 2024 were primarily due to a higher effective interest rate on our deferred royalty obligation, driven by stronger sales performance of GIAPREZA ® .
The year-over-year increase from 2023 to 2024 was primarily due to a higher effective interest rate on our deferred royalty obligation.
In addition, we own other strategic healthcare assets, such as a large equity stake in Armata Pharmaceuticals (“Armata”), a leader in development of bacteriophage with potential use across a range of infectious and other serious diseases. We also have economic interests in other healthcare companies.
(“Armata”), a leader in development of bacteriophages with potential use across a range of infectious and other serious diseases. We also have economic interests in other healthcare companies through our portfolio approach.
We conducted an analysis of the Company through December 31, 2024 to determine whether an ownership change had occurred since inception. The study concluded that it is more likely than not that the Company did not experience an ownership change during the testing period.
The study concluded that it is more likely than not that the Company did not experience an ownership change during the testing period.
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 12, “Debt” to the Consolidated Financial Statements for more information.
Contractual Obligations As of December 31, 2025, our notes payable obligation included $261.0 million related to our 2028 Notes, which is due in 2028. Under the terms of the 2028 Notes, we make interest payments of 2.125% of outstanding principal. Refer to Note 12, “Debt” to the Consolidated Financial Statements for more information.
The La Jolla Royalty Agreement is subject to maximum aggregate royalty payments to HCR of $225.0 million. Additionally, we have certain contingent payment obligations under various in-license agreements which we are required to make royalty payments or milestone payments upon successful completion and achievement of certain milestones.
Additionally, we have certain contingent payment obligations under various in-license agreements which we are required to make royalty payments or milestone payments upon successful completion and achievement of certain milestones. Refer to Note 4, “License, Collaboration and Other Arrangements” to the Consolidated Financial Statements for more information.
Net cash used in financing activities for the year ended December 31, 2023 of $171.8 million consisted mainly of the repayments of $96.2 million upon maturity of the 2023 Notes in January 2023 and $75.7 million for the repurchases of our common stock under the stock repurchase program. 95 Table of Contents Net cash used in financing activities for the year ended December 31, 2022 of $55.6 million included $165.1 million for the repurchase of convertible subordinated notes due 2023, $69.8 million in distributions to noncontrolling interest, $43.9 million for the purchase of Entasis noncontrolling interest, $21.0 million for purchases of capped call options associated with our 2028 Notes and $8.5 million for the repurchase of common stock.
Net cash used in financing activities for the year ended December 31, 2023 of $171.8 million consisted mainly of the repayments of $96.2 million upon maturity of the 2023 Notes in January 2023 and $75.7 million for the repurchases of our common stock under the stock repurchase program.
For the years ended December 31, 2024, 2023 and 2022, we recognized $14.0 million, $14.4 million and $66.7 million, respectively, of income tax expense, mainly based on the taxable income generated during those years. Our total unrecognized tax benefits as of December 31, 2024, 2023 and 2022 were $61.3 million, $19.4 million and $16.3 million, respectively.
For the years ended December 31, 2025, 2024 and 2023, we recognized $55.7 million, $14.0 million and $14.4 million, respectively, of income tax expense, mainly based on the income generated during those years. The increase in income tax expense for the year ended December 31, 2025 was mainly due to the significant value appreciation of our investments in Armata.
The changes in operating assets and liabilities included an increase in prepaid expenses of $21.4 million, a decrease in receivables from collaboration arrangements of $13.3 million and increases of $11.9 million and $10.0 million in accrued personnel-related expenses and other accrued liabilities and in income tax payable, respectively.
The changes in operating assets and liabilities included increases in accounts receivable of $14.6 million, inventory of $12.9 million, prepaid expenses of $5.7 million and other assets of $1.1 million, and decreases in accrued personnel-related and other accrued liabilities of $5.8 million and accrued interest payable of $1.8 million, partially offset by a decrease in receivables from collaboration arrangements of $7.6 million and increases in accounts payable of $2.8 million, deferred revenue of $3.1 million and income tax payable of $4.1 million.
(and where context requires, together with its subsidiaries referred to as “Innoviva”, the “Company”, the “Registrant” or “we” and other similar pronouns) is a company with a core royalties portfolio, a leading critical care and infectious disease platform known as Innoviva Specialty Therapeutics (“IST”), and a portfolio of strategic investments in other healthcare assets Our royalty portfolio contains respiratory assets partnered with Glaxo Group Limited (“GSK”), including RELVAR ® /BREO ® ELLIPTA ® (fluticasone furoate/vilanterol, “FF/VI”) and ANORO ® ELLIPTA ® (umeclidinium bromide/vilanterol, “UMEC/VI”), and up until July 2022, TRELEGY ® ELLIPTA ® (the combination FF/UMEC/VI).
(and where context requires, together with its subsidiaries referred to as “Innoviva”, the “Company”, or “we” and other similar pronouns) is a diversified biopharmaceutical company with a core royalties portfolio, a leading critical care and infectious disease platform known as Innoviva Specialty Therapeutics (“IST”), and a portfolio of strategic healthcare assets.
Interest and Dividend Income and Other Expense, Net Interest and dividend income and other expense, net, as compared to the prior years, were as follows: Change Year Ended December 31, 2024 2023 (In thousands) 2024 2023 2022 $ % $ % Interest and dividend income $ (19,141 ) $ (15,818 ) $ (6,369 ) $ (3,323 ) 21 % $ (9,449 ) 148 % Other expense, net 2,997 4,969 3,373 (1,972 ) (40 )% 1,596 47 % Interest and dividend income increased for the years ended December 31, 2024 and 2023, due to higher interest rates and higher average balances of our cash equivalents, money market funds and other interest-bearing investments.
The increase was mainly due to the reallocation of resources from the research and development function, focusing on regulatory compliance since May 2023 after the FDA approval of XACDURO ® , and enhanced commercial strategies resulting from our ongoing efforts to promote and deliver our marketed critical care products. 90 Table of Contents Interest and Dividend Income and Other Expense, Net Interest and dividend income and other expense, net, as compared to the prior years, were as follows: Change Year Ended December 31, 2025 2024 (In thousands) 2025 2024 2023 $ % $ % Interest and dividend income $ 21,086 $ 19,141 $ 15,818 $ 1,945 10 % $ 3,323 21 % Other expense, net (2,864 ) (2,997 ) (4,969 ) 133 (4 )% 1,972 (40 )% Interest and dividend income increased for the years ended December 31, 2025 and 2024, due to higher average balances of our cash equivalents, money market funds and other interest-bearing investments.
As part of our acquisition of La Jolla, we recognized its deferred royalty obligation in connection with La Jolla Royalty Agreement with HCR.
Refer to Note 13, “Commitments and Contingencies” to the Consolidated Financial Statements for more information. 94 Table of Contents As part of our acquisition of La Jolla, we recognized its deferred royalty obligation in connection with the La Jolla Royalty Agreement with HCR.
The increase in total net royalty revenue was primarily due to the sales growth in ANORO® ELLIPTA®. Total royalty revenue, net, decreased to $238.8 million for the year ended December 31, 2023, compared to $311.6 million for the year ended December 31, 2022.
The decrease in total net royalty revenue was primarily due to lower net sales driven by pricing pressures in the United States. Total royalty revenue, net, increased to $241.7 million for the year ended December 31, 2024, compared to $238.8 million for the year ended December 31, 2023.
Selling, General & Administrative Selling, general and administrative expenses, as compared to the prior years, were as follows: Change Year Ended December 31, 2024 2023 (In thousands) 2024 2023 2022 $ % $ % Selling, general and administrative $ 115,690 $ 98,232 $ 63,538 $ 17,458 18 % $ 34,694 55 % Selling, general and administrative expenses increased by $17.5 million for the year ended December 31, 2024, compared to the year ended December 31, 2023.
Selling, general and administrative expenses increased by $17.5 million for the year ended December 31, 2024, compared to the year ended December 31, 2023.
Our short-term and long-term obligations also include contractual payments related to our operating leases amounting to $3.0 million, with approximately $1.7 million payable in 2025 and approximately $0.4 million payable in each of the years 2026 through 2028. Refer to Note 13, “Commitments and Contingencies” to the Consolidated Financial Statements for more information.
Our short-term and long-term obligations also include contractual payments related to our operating leases amounting to $14.9 million, with approximately $1.0 million payable in 2026, amounts ranging between $1.2 million and $1.5 million payable in each of the years 2027 to 2030, and $8.5 million payable thereafter.
We measure the July 2023 Armata Term Loan and the March 2024 Armata Term Loan at fair value using an income approach based on the discounted value of expected future cash flows.
We measure the term loans at fair value using an income approach based on the discounted value of expected future cash flows. 87 Table of Contents Our Level 3 financial instruments include Syndeio Biosciences, Inc.
Net cash used in investing activities was partially offset by $248.2 million in net proceeds from the sale of our ownership interest in TRC, $24.3 million in sales of equity investments managed by ISP Fund LP and $23.1 million in cash acquired through the consolidation of Entasis.
Net cash used in investing activities was partially offset by $75.8 million in sales of equity investments managed by ISP Fund LP.
The increase of $41.9 million in 2024 was primarily due to our strategic intercompany intellectual property alignment across different jurisdictions. Utilization of net operating loss and tax credit carryforwards is subject to rules, provided by the Internal Revenue Code and similar state provisions, governing annual limitations tied to ownership changes.
Utilization of net operating loss and tax credit carryforwards is subject to rules, provided by the Internal Revenue Code and similar state provisions, governing annual limitations tied to ownership changes. We conducted an analysis of the Company through December 31, 2025 to determine whether an ownership change had occurred since inception.
U.S. net product sales consisted of $15.9 million from GIAPREZA ® , $3.1 million from XERAVA ® , and $5.9 million from XACDURO ® . Full year 2024 net product sales were $97.5 million, which included U.S. net product sales of $80.9 million, compared to $55.1 million for full year 2023, and ex-U.S. net product sales of $16.6 million.
Full year 2025 net product sales were $172.1 million, an increase of 77% compared to $97.5 million for the full year 2024. o For the fourth quarter 2025, U.S. net product sales were $33.9 million and ex-U.S. net product sales were $25.1 million.
Net cash used in investing activities for the year ended December 31, 2022 of $56.6 million included $159.1 million in cash paid for the acquisition of La Jolla, net of cash acquired, $58.7 million in purchases of equity and long-term investments, $60.9 million in purchases of equity investments managed by ISP Fund LP, $50.0 million in purchases of a trading security managed by ISP Fund LP and $23.4 million in net purchases and sales of other investments managed by ISP Fund LP.
Cash Flows from Investing Activities Net cash provided by investing activities for the year ended December 31, 2025 of $40.5 million included $92.8 million for purchases and sales of other investments managed by ISP Fund LP, net, $28.2 million for sales of equity investments managed by ISP Fund LP and $8.4 million in proceeds from trading securities.
As of December 31, 2024, we had 127 employees. 83 Table of Contents Financial Highlights • Royalty revenue: Fourth quarter 2024 gross royalty revenue from GSK was $66.0 million and full year was $255.6 million, compared to $69.6 million for the fourth quarter of 2023 and $252.7 million for the full year 2023. • Net Product Sales: Fourth quarter 2024 net product sales were $28.9 million, which included U.S. net product sales of $24.9 million, compared to $19.7 million for the fourth quarter of 2023, and ex-U.S. net product sales of $4.0 million.
Total revenue for the full year 2025 was $411.3 million, reflecting 15% growth compared to total revenue of $358.7 million for the full year 2024. • Royalty revenue: Fourth quarter 2025 gross royalty revenue from GSK was $58.4 million and full year was $250.3 million, compared to $66.0 million for the fourth quarter 2024 and $255.6 million for the full year 2024. • Net product sales: Fourth quarter 2025 net product sales were $59.1 million, more than doubling from $28.9 million in the same quarter of 2024.
Cash and cash equivalents totaled $305.0 million, royalties receivable from GSK totaled $66.0 million and accounts receivable associated with our marketed products and related arrangements totaled $20.4 million, as of December 31, 2024. 93 Table of Contents As of December 31, 2024, we had two outstanding convertible notes, the 2025 Notes and the 2028 Notes, in an aggregate principal amount of $453.5 million, of which $192.5 million and $261.0 million will become due in August 2025 and March 2028, respectively.
As of December 31, 2025, we had one outstanding convertible note, the 2028 Notes, in an aggregate principal amount of $261.0 million, which will become due in March 2028. Future interest payments associated with this note total $13.9 million.
U.S. net product sales consisted of $53.4 million from GIAPREZA ® , $12.8 million from XERAVA ® , and $14.7 million from XACDURO ® . • License revenue: Fourth quarter 2024 license revenue of $0.4 million included product development cost-sharing reimbursements from our partner.
Full year 2025 U.S. net product sales primarily consisted of $71.8 million from GIAPREZA ® , $33.4 million from XACDURO ® , and $13.3 million from XERAVA ® . • Income from operations: Fourth quarter 2025 income from operations was $39.0 million, compared to $43.1 million for the fourth quarter 2024.
Full year 2024 license revenue of $19.5 million consisted of an $8.0 million milestone payment and $11.5 million cost-sharing reimbursements, compared to $11.0 million milestone payments in full year 2023. • Equity and long-term investments: Fourth quarter and full year 2024 changes in fair values of equity and long-term investments of $19.6 million and $123.4 million, respectively, were primarily attributable to share price depreciation of Armata and other equity investments. • Net income: Fourth quarter 2024 net income of $20.3 million ($0.32 basic net income per share) and full year 2024 net income of $23.4 million ($0.37 basic net income per share) were driven primarily by higher revenue, offset by the negative impact of changes in the fair values of equity investments. • Cash and cash equivalents: Totaled $305.0 million.
Innoviva’s portfolio of strategic assets held through the Company’s various subsidiaries was valued at $614.0 million as of December 31, 2025, and consisted of $397.9 million in Armata investments, $136.4 million in other strategic equity and convertible debt investments, and $79.7 million in investments held by ISP Fund. • Net income: Fourth quarter 2025 net income of $164.2 million ($2.19 basic earnings per share) and full year 2025 net income of $271.2 million ($4.02 basic earnings per share) were driven primarily by higher revenue and the positive impact of changes in the fair values of equity and long-term investments. • Cash and cash equivalents: Totaled $550.9 million.
We continue to assess our estimates of variable consideration as we accumulate additional historical data and will adjust these estimates accordingly. Capitalized Fees Paid We review our Capitalized Fees for impairment on a product‑by‑product basis for each major geographic area when events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable.
We continue to assess our estimates of variable consideration as we accumulate additional historical data and will adjust these estimates accordingly. We may also enter into contracts that involve a series of manufacturing processes for products and related components.
Research and development expenses for the year ended December 31, 2024 decreased compared to the same period in 2023 primarily due to the FDA approval of XACDURO ® in May 2023 and resource reallocation from the research development function to general and administrative function after the FDA approval.
Selling, general and administrative expenses decreased by $2.4 million for the year ended December 31, 2025, compared to the year ended December 31, 2024, during which included incremental expenditures related to the September 2023 commercial launch of XACDURO ® .
Removed
We sold our 15% ownership interest in Theravance Respiratory Company, LLC (“TRC”) on July 20, 2022, and are no longer entitled to receive royalties on sales of TRELEGY ® ELLIPTA ® products.
Added
Our royalty portfolio contains respiratory assets partnered with Glaxo Group Limited (“GSK”), including RELVAR ® /BREO ® ELLIPTA ® (fluticasone furoate/vilanterol, “FF/VI”) and ANORO ® ELLIPTA ® (umeclidinium bromide/ vilanterol, “UMEC/VI”).
Removed
We expanded our portfolio through the acquisition of Entasis Therapeutics Holdings Inc. (“Entasis”) on July 11, 2022 and the acquisition of La Jolla Pharmaceutical Company (“La Jolla”) on August 22, 2022.
Added
Our wholly owned, robust critical care and infectious disease operating platform with a hospital focus, is anchored by five differentiated approved, commercial and marketed products: • GIAPREZA ® (angiotensin II) for increasing blood pressure in adults with septic or other distributive shock; • XACDURO ® (sulbactam for injection; durlobactam for injection), co-packaged for intravenous use for the treatment of hospital-acquired and ventilator-associated bacterial pneumonia caused by Acinetobacter , commercially launched in 2023 ; • XERAVA ® (eravacycline) for the treatment of complicated intra-abdominal infections in adults; • ZEVTERA ® (ceftobiprole), an advanced-generation cephalosporin antibiotic for the treatment of staphylococcus aureus bacteremia , including those with right-sided endocarditis, acute bacterial skin and skin structure infections, and community-acquired bacterial pneumonia, licensed from Basilea Pharmaceutica Ltd, Allschwil (SIX: BSLN) (“Basilea”) for U.S. commercialization and commercially launched in the third quarter of 2025; and • NUZOLVENCE ® (formerly known as zoliflodacin), approved by the FDA on December 12, 2025, for the treatment of uncomplicated urogenital gonorrhea in adults and adolescents In addition, we own other strategic healthcare assets, such as a significant stake in Armata Pharmaceuticals, Inc.
Removed
Following the acquisitions, 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.
Added
Our disciplined focus on deploying capital in areas of significant unmet medical need with high value creation potential has driven a meaningful transformation of our company over the years from a pure-play royalty business to a diversified biopharmaceutical company with a strong, fast-growing, differentiated operating platform and multiple other assets with significant promise.
Removed
Our new commercial and marketed 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 for the treatment of hospital-acquired and ventilator-associated pneumonias caused by Acinetobacter in adults. We commenced commercial sales of XACDURO ® in the third quarter of 2023.
Added
As of December 31, 2025, we had 159 employees. 83 Table of Contents Financial Highlights • Total revenue: Total revenue for the fourth quarter 2025 was $114.6 million, representing 25% growth compared to total revenue of $91.8 million for the fourth quarter 2024.
Removed
On December 14, 2024, we entered into an exclusive distribution and license agreement with Basilea Pharmaceutica Ltd, Allschwil (SIX: BSLN) (“Basilea”) for the commercialization of ZEVTERA ® (ceftobiprole), an advanced-generation cephalosporin antibiotic, in the U.S.
Added
Fourth quarter 2025 U.S. net product sales primarily consisted of $19.3 million from GIAPREZA ® , $10.7 million from XACDURO ® , and $3.8 million from XERAVA ® . o For the full year 2025, U.S. net product sales were $119.2 million and ex-U.S. net product sales were $52.9 million.
Removed
We continue to further advance our pipeline and are on track to submit a New Drug Application (“NDA”) for zoliflodacin, potentially first in class, single dose oral drug for the treatment of uncomplicated gonorrhea, to the U.S. FDA in early 2025.
Added
Full year 2025 income from operations was $163.7 million, compared to $166.9 million for the full year 2024, reflecting continued investments in research and development. • Equity and long-term investments: Fourth quarter and full year 2025 net favorable changes in fair values of equity and long-term investments totaled $153.8 million and $161.6 million, respectively, and were primarily attributable to share price appreciation of Armata.
Removed
As such, we have a wholly owned robust critical care and infectious disease operating platform with hospital focus anchored by four differentiated products with significant growth potential and a promising drug candidate.
Added
Royalty and net product sales receivables totaled $93.3 million as of December 31, 2025.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeInflation has increased during the period covered by this Annual Report on Form 10-K and could continue to increase for the near future. Inflationary factors, such as increases in the cost of our raw materials, supplies, interest rates and overhead costs may adversely affect our operating results.
Biggest changeInflation has increased during the periods covered by this Annual Report on Form 10-K and could continue to increase for the near future. Inflationary factors, such as increases in the cost of our raw materials, supplies, interest rates and overhead costs, as well as trade and other international disputes, may adversely affect our operating results.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK As of December 31, 2024, our debt bears fixed interest rates and we had no outstanding debt with variable interest rates. Our cash flows on these debt obligations are not subject to variability as a result of changes in interest rates.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK As of December 31, 2025, our debt bears fixed interest rate and we had no outstanding debt with variable interest rates. Our cash flows on these debt obligations are not subject to variability as a result of changes in interest rates.
Therefore, we do not believe that the risk of a significant impact on our operating income from foreign currency fluctuations is substantial. 96 Table of Contents
Therefore, we do not believe that the risk of a significant impact on our operating income from foreign currency fluctuations is substantial. 95 Table of Contents

Other INVA 10-K year-over-year comparisons