INVA 10-K & 10-Q changes, risk factors and insider trading

Our debt including our convertible subordinated notes and convertible senior notes 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.

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.

Even if we complete the necessary preclinical studies and clinical trials, theThe 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. 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.

Currently, we derive mostthe 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 currently depend, in part, on royalties from sales of our products partnered with GSK to support our existing operations. The treatment paradigm for COPD and asthma constantly evolves. For instance, in November 2018, the GOLD guidelines were revised to favorably position bronchodilator monotherapy and LABA/LAMA treatment ahead of ICS/LABA for the treatment of COPD unless the patient has frequent exacerbations, or an eosinophil count greater than 300 per cubic microliter. The use of ICS in COPD is also recommended for patients requiring triple therapy (LABA, LAMA, ICS). If the treatment paradigms were to change further, causing our partnered products to fall out of favor, or if GSK were unable, or did not devote sufficient resources, to maintain or continue increasing RELVAR®/BREO® ELLIPTA® and ANORO® ELLIPTA® sales, our results of operations would likely suffer, and the price of our securities could fall.

GSK is responsible for all clinical and other product development, regulatory, manufacturing and commercialization activities for products developed under the GSK Agreements, including RELVAR®/BREO® ELLIPTA® and ANORO® ELLIPTA®. Our royalty revenues under the GSK Agreements may not meet our, analysts’, or investors’ expectations, due to a number of important factors. 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. For instance, GSK has wide discretion in determining the efforts and resources that it will apply to the development and commercialization of our partnered products. In addition, GSK may determine to focus its commercialization efforts on its own products. For example, in January 2015, GSK launched Incruse® (UMEC) in the U.S., which is a LAMA for the treatment of COPD. GSK may determine to focus its marketing efforts on Incruse, which could have the effect of decreasing the potential market share of ANORO® ELLIPTA® and lowering the royalties we may receive for such product. 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.

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.

As of December 31, 2024,2025, we had $453.5$261.0 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”). The 2028 Notes are unsecured debtdebt. and, with the exceptionHolders of the 2028 Notes, are not redeemable by us prior to the maturity date. Holders of the Notes may require us to purchase all or any portion of their 2028 Notes at 100% of their principal amount, plus any unpaid interest, upon a fundamental change. A fundamental change is generally defined to include a merger involving us, an acquisition of a majority of our outstanding common stock. 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.

Satisfying the obligations of this debt could adversely affect the amount or timing of any distributions to our stockholders. We may choose to satisfy, repurchase, or refinance this debt through public or private equity or debt financings if we deem such financings available on favorable terms. 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. If we fail to satisfy these obligations, it may result in a default under the indenture, which could result in a default under certain of our other debt instruments, if any. Any such default would harm our business and the price of our securities could fall.

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 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.

We do not own or operate manufacturing facilities to produce clinical or commercial supplies of the product candidates that we are developing or evaluating.evaluating or commercial supplies of our approved products. 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. We currently rely on third parties for supply of our product candidates,candidates and approved products, and our strategy is to outsource all manufacturing of our product candidates and approved products, if any, to third parties.

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.

We may not have the right to prohibit the U.S. government from using certain technologies developed by us,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. The U.S. government generally takes the position that it has the right to royalty-free use of technologies that are developed under U.S. government contracts.

In any infringement litigation, any award of monetary damages we receive may not be commercially valuable. Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information could be compromised by disclosure during litigation. In addition, there could be public announcements of the results of hearings, motions or other interim proceedings or developments and if securities analysts or investors perceive these results to be negative, it could have a substantial adverse effect on the price of our common stock. Moreover, there can be no assurance that we will have sufficient financial or other resources to file and pursue such infringement claims, which typically last for years before they are concluded. Some of our competitors may be able to sustain the costs of such litigation or proceedings more effectively than we can because of their greater financial resources and more mature and developed intellectual property portfolios. 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. Uncertainties resulting from the initiation and continuation of patent litigation or other proceedings could have a negative impact on our ability to compete in the marketplace.

The FDA and the EMA have each established regulations to govern the product development and approval process, as have other foreign regulatory authorities. The policies of the FDA, the EMA and other regulatory authorities may change. ForIn example,the U.S., Congress has enacted significant healthcare and FDA-related legislation in December 2016,recent years, including the 21st  Century Cures Act,Act orand Curessubsequent Act,user wasfee signedreauthorization intoacts, law.and may continue to consider additional reforms affecting drug development, clinical trial requirements, approval standards, manufacturing oversight and post-approval obligations. The CuresFDA Act,has also issued numerous guidance documents and initiatives addressing, among other things, is intended to modernizetopics, the regulationuse of drugsreal-world evidence, decentralized and spurhybrid innovation,clinical buttrials, not all its provisions have yet been implemented. Additionally,diversity in August 2017, the FDA issued final guidance setting forth its current thinking with respect to development programs and clinical trial designsenrollment, fordata integrity, cybersecurity, manufacturing quality, and the development of antibacterial drugsand toantifungal treat serious bacterial diseases in patients with an unmet medical need.therapies. We cannot predict what if any effect the Cures Act or any existing or future guidance from the FDA or other regulatory authorities will have on the development of our product candidates.

Historically, allmuch 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. Any action or inaction by either GSK or us that results in a material dispute, allegation of breach, litigation, arbitration, or significant disagreement between the parties may be interpreted negatively by the market or by our investors, could harm our business and cause the price of our securities to fall. Examples of these kinds of issues include but are not limited to non‑performance of contractual obligations and allegations of non‑performance, disagreements over the relative marketing and sales efforts for our partnered products and other GSK respiratory products, disputes over public statements, and similar matters.

GSK is a strategic partner with rights and obligations under the GSK Agreements that cause its interests to differ from our interests and those of our stockholders. 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. For example, GSK could promote its non‑GSK/Innoviva respiratory products or a partnered product for which we are entitled to receive a lower percentage of royalties, delay or terminate the development or commercialization of the respiratory programs covered by the GSK Agreements, or take other actions, such as making public statements, that have a negative effect on our stock price. In this regard and by way of example, sales of Advair®, GSK’s approved medicine for both COPD and asthma, continue to be significantly greater than sales of RELVAR®/BREO® ELLIPTA®, and GSK has indicated publicly that it intends to continue commercializing Advair®. Also, given the potential future royalty payments which GSK may be obligated to pay under the GSK Agreements, GSK may seek to acquire us in order to reduce those payment obligations. The timing of when GSK may seek to acquire us could potentially be when it possesses information regarding the status of drug programs covered by the GSK Agreements that has not been publicly disclosed and is not otherwise known to us. As a result of these differing interests, GSK may take actions that it believes are in its best interest but which might not be in our best interest or the best interest of our stockholders.

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;

Innoviva, Inc. (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). 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. Under the Long‑ActingLong-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%.

RoyaltyTotal revenue: FourthTotal revenue for the fourth quarter 2024 gross royalty revenue from GSK2025 was $66.0 million and full year was $255.6$114.6 million, representing 25% growth compared to $69.6total revenue of $91.8 million for the fourth quarter 2024. Total revenue for the full year 2025 was $411.3 million, reflecting 15% growth compared to total revenue of 2023 and $252.7$358.7 million for the full year 2023.2024.

Equity and long-term investments: Fourth quarter and full year 20242025 net favorable changes in fair values of equity and long-term investments oftotaled $19.6$153.8 million and $123.4$161.6 million, respectively, and were primarily attributable to share price depreciationappreciation of ArmataArmata. 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 investments.and convertible debt investments, and $79.7 million in investments held by ISP Fund.

Net income: Fourth quarter 20242025 net income of $20.3$164.2 million ($0.32$2.19 basic net incomeearnings per share) and full year 20242025 net income of $23.4$271.2 million ($0.37$4.02 basic net incomeearnings per share) were driven primarily by higher revenue,revenue offset byand the negativepositive impact of changes in the fair values of equity and long-term investments.

ZoliflodacinNUZOLVENCE® (zoliflodacin): a potential first-in-class, single dose,single-dose oral antibioticmedication isfor currentlythe beingtreatment of uncomplicated urogenital gonorrhea due to Neisseria gonorrhoeae in adults and pediatric patients 12 years and older weighing at least 35kg, developed in partnership with The Global Antibiotic Research & Development Partnership (“GARDP”) for the treatment of patients with uncomplicated gonorrhea..

In November 2002, we entered into the LABA Collaboration Agreement with GSK to develop and commercialize once‑dailyonce-daily LABA products for the treatment of chronic obstructive pulmonary disorder (“COPD”) and asthma (the “LABA Collaboration Agreement”). For the treatment of COPD, the collaboration has developed threethe 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‑dailyonce-daily combination medicine consisting of a LABA, vilanterol (VI), and an inhaled corticosteroid (“ICS”), fluticasone furoate (“FF”), and ANORO® ELLIPTA® (“UMEC/VI”), a once‑dailyonce-daily medicine combining a long‑actinglong-acting muscarinic antagonist (“LAMA”), umeclidinium bromide (“UMEC”), with a LABA, vilanterol (VI), and TRELEGY® ELLIPTA® (the combination FF/UMEC/VI), a once‑daily combination medicine consisting of an ICS, LAMA and LABA..

As a result of the launch and approval of RELVAR®/BREO® ELLIPTA® and ANORO® ELLIPTA® in the U.S., Japan and Europe, in accordance with the LABA Collaboration Agreement, we paid approval and launch milestone paymentsfees to GSK totaling $220.0 million during the year ended December 31, 2014. Although we have no further milestone payment obligations to GSK pursuant to the LABA Collaboration Agreement, we continue to have ongoing commercialization activities under the LABA Collaboration Agreement, including participation in the joint steering committee that are expected to continue over the life of the agreement. The milestone fees paid to GSK were recognized as capitalized fees, which are being amortized over their estimated useful lives commencing upon the commercial launch of the products.

We are entitled to receive royalties from GSK on sales of RELVAR®/BREO® ELLIPTA® as follows: 15% on the first $3.0 billion of annual global net sales and 5% for all annual global net sales above $3.0 billion. On sales of ANORO® ELLIPTA®, royalties are upward tiering and range from 6.5% to 10%. We no longer receive royalties on sales of TRELEGY® ELLIPTA® after we sold our royalty rights along with the sale of our ownership in TRC in July 2022.

On December 11, 2020, we entered into a Strategic Advisory Agreement (the “Services Agreement”) with Sarissa Capital Management LP (“Sarissa Capital”), pursuant to which Sarissa Capital provides a variety of strategic services to us in order to assist us in the development and execution of our acquisition strategy. The services are provided free of charge to us. Sarissa Capital iswas considered to be a related party dueup tountil itsthe investmentannual stockholders meeting in Innoviva’sMay common2025 stockafter andwhich itsthere representationwere no representatives of Sarissa Capital serving on our boardBoard of directors.Directors.

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”). 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 Partnership was formed for the purposes of investing in equity securities in the healthcare, pharmaceutical and biotechnology industries. The Partnership Agreement provides for Sarissa Capital to receive a customary one percent management fee from the Partnership, payable quarterly in advance, measured based on the Net Asset Value of Strategic Partners’ capital account in the Partnership. In addition, the General Partner is entitled to a customary 10% annual performance allocation based on the Net Profits of the Partnership during the annual measurement period. The Partnership Agreement includes a lock-up period of thirty-six months after which Strategic Partners is entitled to make withdrawals from the Partnership as of such lock-up expiration date and each anniversary thereafter, subject to certain limitations. In 2024, the lock-up period expired, and we elected to unwind the capital accounts in the Partnership. We expect to receive distributions through April 2026.

Our investments in Armata include a convertible note (the “Armata Convertible Note”) and term loans issued in July 20232023, March 2024, March 2025 and MarchAugust 2024 (the “July 2023 Armata Term Loan ” and the “March 2024 Armata Term Loan”, respectively),2025, all of which are classified as Level 3 financial instruments. The Armata Convertible Note is measured at fair value using a Monte Carlo simulation model with the probability of certain qualified events and the assumptions of risk-free rate, volatility of stock price and timing of certain qualified events. We measure the Julyterm 2023 Armata Term Loan and the March 2024 Armata Term Loanloans at fair value using an income approach based on the discounted value of expected future cash flows.

FirstSecond Quarter 2026 and Recent Highlights:

Total revenue: $98.0$119.6 million, yieldingrepresenting 11%19% year-on-year growth compared to $88.6$100.3 million for the firstsecond quarter 2025.

Royalty revenue: gross royalty revenue from GSK wasremains $58.6stable million,at $59.8 million in the second quarter of 2026, a 2% increase compared to $61.3$58.6 million forin the first quarter 2025.of 2026.

Net product sales: $41.4$51.8 million ($34.2$36.6 million U.S. and $7.2$15.2 million ex-US), representing 37%46% growth compared to $30.3$35.5 million in the samesecond quarter of 2025. U.S. net product sales primarily consisted of $19.7$21.0 million from GIAPREZA®, $11.6$12.0 million from XACDURO®, and $2.5$3.3 million from XERAVA®.

Income from operations: $38.2$50.9 million, compared to $41.4$48.8 million for the firstsecond quarter 2025, reflecting continuedhigher investment in commercial activities, as well asnet product sales and businesscontinued development.operating discipline.

Equity and long-term investments: net favorableunfavorable changes in fair value of equity and long-term investments totaled $191.2$161.0 million, primarily attributable to a lower share price appreciation of Armata.Armata . Innoviva’s strategic healthcare investments were valued at $773.3$669.5 million as of MarchJune 31,30, 2026, and consisted of $603.4$457.7 million in Armata, $138.2$177.3 million in other strategic equity and convertible debt, and $31.7$34.5 million held by ISP Fund.

Net income: $186.6net millionloss ($2.52of $83.4 million, or $1.14 basic earningsloss per share) wasshare, driven primarily by higher revenue and the positive impact of changesdecrease in the fair valuesvalue of equity and long-term investments.

Cash and cash equivalents: totaledTotaled $603.1$570.4 million. Royalty and net product sales receivables totaled $92.6$110.6 million as of MarchJune 31,30, 2026.2026, a 25% year-on-year increase compared to $88.3 million for the second quarter of 2025.

During the firstsecond quarter of 2026, Innoviva repurchased 971,0661,403,247 shares for $20.4$31.4 million under its $125 million share repurchase program. Since its inception, and through the end of thisthe second quarter, the Company has repurchased 1,198,9212,602,168 shares for $25.0$56.4 million, reflecting the Company’s continued confidence in its intrinsic value and long-term outlook.

Total net royalty revenue decreased to $55.2$56.3 million and $111.5 million for the three and six months ended MarchJune 31,30, 2026, compared to $57.8$63.9 million and $121.7 million for the same periodperiods a year ago. The decrease in total net royalty revenue was primarily due to lower net sales driven by pricing pressures in the United States.

Our net product sales increased overall during the periods presented, driven by higher sales volume resulting from our strategic commercialization efforts and dedication to delivering our critical care products to healthcare systems. The increase in XACDURO® ex-U.S. product sales is attributable mainly to product sales under an interim supply agreement with Zai Lab, which is billed at cost.

License and other revenue for the three and six months ended MarchJune 31,30, 2026 was derived primarily from our ongoing arrangements with Zai Lab and new agreements with GARDP and DRL as discussed in Note 4, “License, Collaboration and Other Arrangements”, to the Condensed Consolidated Financial Statements.

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. The step-up value included above amounted to $1.1$0.9 million and $0.2$2.0 million for the three and six months ended MarchJune 31,30, 20262026, respectively, and $0.4 million and $0.6 million for the three and six months ended June 30, 2025, respectively. Our cost of products sold increased during the three and six months ended MarchJune 31,30, 2026, driven by higher product sales volume. As of MarchJune 31,30, 2026, our total inventory included the remaining net fair value adjustments resulting from the acquisition of La Jolla of approximately $2.2$1.4 million, which will be recognized as cost of products sold when sales occur in future periods.

Research and development expenses for the three and six months ended MarchJune 31,30, 2026 were $5.2 million.million and $10.4 million, respectively. The expenses for the current period include additional personnel and facilities costs in support of the acquired IPR&D as discussed in Note 13, “Asset Acquisition”, in the Condensed Consolidated Financial Statements. Research and development expenses for the three and six months ended MarchJune 31,30, 2025, which wereconsisted mainlyprimarily attributableof tothe post-marketingcontinued commitmentsadvancement requiredof zoliflodacin, approved by the FDA andin ongoingDecember product developments,2025, were $4.4$8.0 million.million and $12.4 million, respectively.

Our selling, general and administrative expenses were $32.4 million and $27.5 millionincreased for the three and six months ended MarchJune 31,30, 20262026, andcompared 2025,to respectively.the corresponding periods in 2025. The increase during the current period iswas aprimarily resultattributable ofto our ongoing efforts to expand our sales force to meet demand in new regions, promote our marketed critical care products and drive revenue, maintain regulatory compliance, and support essential administrative functions for general operations.

Interest and dividend income increased for the three and six months ended MarchJune 31,30, 2026, compared to the same period in 2025, due to higher average balances of our cash equivalents, money market funds and other interest-bearing investments.

Our interest expense for the three and six months ended MarchJune 31,30, 2026 and 2025 comprised mainly of the contractual interest expense and the amortization of debt issuance costs for our 2028 Notes, as well as effective interest expense on our deferred royalty obligation related to GIAPREZA®. The increase for the three and six months ended MarchJune 31,30, 2026, compared to the same period in 2025, was mainly due to higher interest expense on our deferred royalty obligation as a result of higher sales performance of GIAPREZA®.

The changes in fair values of equity method investments for the three and six months ended MarchJune 31,30, 2026 were favorabledriven mainlyby due to the appreciationfluctuations in Armata’s stock price.price during the reporting periods. We recorded $157.7$131.8 million in unrealized loss and $25.8 million in unrealized gain for the three and six months ended MarchJune 31,30, 2026, respectively, compared to $13.5$13.1 million in unrealized gain and $0.5 million in unrealized loss for the three and six months ended MarchJune 31,30, 2025.2025, respectively.

We recorded income tax benefit of $24.6 million and income tax expense of $48.0$23.4 million for the three and six months ended MarchJune 31,30, 2026, respectively, compared to income tax expense of $8.0$8.9 million and $16.9 million for the three and six months ended MarchJune 31,30, 2025.2025, respectively. The effective income tax rate for the threesix months ended MarchJune 31,30, 2026 and 2025 was 20.5%18.5% and (20.7)%,49.7%, respectively.

Since our inception, we have financed our operations primarily through private placements and public offerings of equity and debt securities and payments received under collaborative arrangements. For the threesix months ended MarchJune 31,30, 2026, we generated gross royalty revenues from GSK of $58.6$118.4 million, net product sales of $41.4$93.1 million and license and other revenue of $1.5$12.9 million. Cash and cash equivalents totaled $603.1$570.4 million, royalties receivable from GSK totaled $58.6$59.8 million and accounts receivable associated with our product sales and license and other revenue totaled $34.0$50.8 million as of MarchJune 31,30, 2026.

As of MarchJune 31,30, 2026, 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.

On November 3, 2025, our Board of Directors authorized a share repurchase program under which we may repurchase up to $125.0 million of Innoviva’s outstanding shares of common stock. From program inception through MarchJune 31,30, 2026, we have repurchased Innoviva common stock in the open market for total price of approximately $25.0$56.4 million. This program has no termination date, may be suspended or discontinued at any time at our discretion and does not oblige us to acquire any amount of common stock.

We believe that our cash and cash equivalents will be sufficient to meet our anticipated debt service and operating needs, as well as our ongoing share repurchase program, for at least the next 12 months based upon current operating plans and financial forecasts. 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. If our current operating plans and financial forecasts change, we may require additional funding sooner in the form of public or private equity offerings or debt financings. Furthermore, if in our view favorable financing opportunities arise, we may seek additional funding in the form of public or private equity offerings or debt financings at any time. However, future financing may not be available in amounts or on terms acceptable to us, if at all. This could leave us without adequate financial resources to fund our operations as currently planned. In addition, from time to time we may restructure or reduce our debt, including through privately negotiated repurchases, tender offers, redemptions, amendments, or otherwise, all allowable with the terms of our debt agreements.

Net cash provided by operating activities for the threesix months ended MarchJune 31,30, 2026 was $35.3$87.3 million, consisting primarily of our net income of $186.6$103.2 million, adjusted for net non-cash items, which included $41.0$4.9 million of deferred income taxes, $6.6$13.2 million of amortization of acquired intangible assets, $3.5$7.0 million of amortization of capitalized fees and depreciation of property and equipment, $2.6$7.3 million of stock-based compensation and $1.1$2.0 million of inventory fair value step-up adjustments, offset by $191.2$30.2 million in net changes in fair value of our investments and $16.3$22.1 million in net changes in operating assets and liabilities.

Net cash provided by operating activities for the threesix months ended MarchJune 31,30, 2025 was $48.6$92.7 million, consisting primarily of our net lossincome of $46.6$17.1 million, adjusted for net non-cash items, which included $78.8$54.5 million in changes in fair value of our investments, $6.5$13.0 million of amortization of acquired intangible assets, $3.5$7.0 million of amortization of capitalized fees,fees $2.1and depreciation of property and equipment, $4.6 million of stock-based compensation,compensation $0.2and $1.1 million in amortization of inventorydebt fair value step-up adjustmentsdiscount and $2.9issuance costs, partially offset by $4.7 million in net changes in operating assets and liabilities.

Net cash used in investing activities for the threesix months ended MarchJune 31,30, 20252026 of $34.7$18.3 million primarily consisted of $34.7$65.0 million in purchases of trading securities and $19.9other equity investments, $3.3 million in net purchases of otherequity investments managed by ISP Fund LP.LP Theand use$0.9 million in purchases of cashproperty forand investing activities wasequipment, partially offset by proceeds of $19.9$44.1 million from thein sales of equity investments managed by ISP Fund LP, and $6.7 million in net purchases and sales of other investments managed by ISP Fund LP.

Net cash used in financing activities for the threesix months ended MarchJune 31,30, 2026 of $20.1$49.6 million was primarily due to $20.2$51.3 million in repurchases of our common stock under the ongoing stock repurchase program.program, partially offset by net proceeds of $2.0 million from issuances of common stock.

Net cash provided by financing activities for the threesix months ended MarchJune 31,30, 2025 of $0.2$1.4 million was primarily due to net proceeds from issuances of common stock, partially offset by the repurchase of shares to satisfy tax withholding.

As of MarchJune 31,30, 2026, our notes payable obligation comprised of $261.0 million related to our 2028 Notes, which are due in 2028. Under the terms of the 2028 Notes, we make interest payments of 2.125% of outstanding principal. Refer to Note 11, “Debt” to the Condensed 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. Under the agreement, we committed to minimum purchases through December 31, 2027. As of MarchJune 31,30, 2026, we have approximately $13.0$10.3 million U.S. dollar equivalent in outstanding purchase commitments under the agreement.