Innoviva, Inc. Common Stock H.C. Wainwright 28th Annual Global Investment Conference

Thank you very much. Really appreciate the intro, and certainly thank to the team for hosting Innoviva at the conference. I think we're already ahead, and looking forward to a number of really good meetings over the next few days, which is great. For those that perhaps are newer to the story or less familiar, I thought I'd start with a little bit of a background. Innoviva actually started as a royalty company a number of years ago, tied to a respiratory asset the company then developed with and then licensed to GSK to commercialize. Over a number of years, these royalties really provided a durable source of cash to the business. It was quite profitable. Then embarked upon a mission over the last several years to invest that in a broader base, essentially try to pivot Innoviva to a broader-based healthcare company with multiple opportunities for long-term value creation.

As you can see here, Innoviva stands today really as a strategic business, if you will, or a business of three essentially strategic pillars. The first of which is the continued generation of the royalty portfolio. These are two leading assets we have and continue to generate meaningful amount of cash to the business. The second of which is in the middle, is Innoviva Specialty Therapeutics, which as Luis pointed out, is our critical care and infectious disease therapeutics product hospital-based platform, which is growing rapidly, and we're quite excited about that. Lastly, the company has a collection of investments in what we call our portfolio of strategic healthcare assets.

This is really a collection of innovative companies, with a variety of asymmetric risk-reward profiles and opportunities to create long-term value for the organization. I think if you look at the business broadly, you can see that it's clearly not hinged on one product, one program, or one specific value driver. It has many that will compel and continue to grow the business going forward. We're really excited about the potential of this business more broadly. Maybe what I'll do now is then pivot and try to dive in a bit more detail into each one of these strategic pillars of the business, starting first with the royalty business, and I'll ask Austin to comment on that.

Great. Thanks, Steve. Our royalty business is really kind of the foundation of our cash flows and has been for a number of years. This is our portfolio of two leading respiratory products that are commercialized by GSK, and they're really excellent royalty products for a few main reasons. The first is that these are well-established standard of care therapies in a therapeutic area that is primarily based on maintenance therapy. What's nice about these products is if you're on ANORO or BREO and you are well-controlled, you tend to never talk to your doctor about it again, never switch. Now at this point, since they're more mature products, the vast majority of patients year over year are continuing just maintenance therapy patients, which protects these against new competitors and new entrants from a new mechanism of action.

The second nice thing about these products is that both products are majority ex-U.S., so more than two-thirds of the sales of both of these products come from ex-U.S. sales, which shields them from some of the late life pricing pressures and dynamics that you see in the U.S. By this point, there's a balance of some slow year-over-year pricing pressure in the U.S., but still ex-U.S. growth. That makes these products remarkably durable and really great royalty products. The final piece is the regulatory complexity around drug device combos. This historically has provided a pretty significant moat against early entry from generics. Then they have to get both the drug and the device separately approved and demonstrate equivalence to the FDA, which is a much more complicated process for a drug device combo.

Historically, it's about three years even after LOE before drug device generics come into market in this space, so that provides a further moat. As you can see, if you look at the five-year projection, we're still expecting to get over $1 billion of revenue based on the analyst consensus from the GSK covering analysts. This is a really great source of capital for us and something that we hope to continue to productively invest into the other areas of our business and new opportunities as well.

Thanks, Austin. Now maybe we can dive into the next pillar of the business or IST, or Innoviva Specialty Therapeutics. Maybe just to put it in a bit of a context here for why we created IST, and it was deliberate in that nature. It was born out of a series of decisions that started with a very simple thesis. It all goes back to the fact that, at the time, Innoviva had a durable cash generative royalty business. But we very much wanted to take the opportunity there and complement that with investments in acquisitions in areas of high unmet medical need, where we felt that we could make a difference, and also add value.

In this case, looking at IST, we felt that critical care by focusing there, as well as in infectious disease, was an area where we could do that, in particular through investments in companies like Entasis Therapeutics. The foundational step for the creation of IST was integrating Entasis and La Jolla Pharmaceutical Company together into this business, which I mentioned is called Innoviva Specialty Therapeutics or IST. This was formally stood up in the middle of 2023, and the combination of these two companies was really the formation of IST. Entasis brought us two things. It brought us XACDURO, which I'll come back to in a second, as well as the zoliflodacin program, which is also known as NUZOLVENCE now.

We had approval for NUZOLVENCE in the treatment of gonorrhea at the end of last year, and the company is making good progress to have that commercially available by the end of this year. La Jolla Pharmaceutical Company had two already approved and commercialized products in the form of GIAPREZA and XERAVA. In December of 2024, we then in-licensed the U.S. rights for ZEVTERA from Basilea, launching that six months later. That's IST today, right? A commercial platform with five approved products. It was very much not intended to be a single asset or a single product company, but rather a portfolio and a platform, and that was intentional in the formation of it. The other component that I would sort of point to as we talk about IST is why we created it in this specific setting. Why critical care or why infectious disease?

I would point to a few things. One is the hospital space is clearly an area where I think we'd all agree is fairly complex. It requires deep expertise. It requires broad and extensive productive institutional relationships. I think that's where Innoviva Specialty Therapeutics has done very well in this case, as demonstrated by its sort of revenue growth and its commercial presence. The complexity of this business, I would say, though, is actually complementary or a moat, if you will, for IST, namely in the fact that I think it would be generally very hard for another company to come in and replicate our field organizations to take over or, excuse me, replicate our account relationships as well as the clinical credibility that we've established in this business going forward over the last several years.