Innoviva, Inc. · NASDAQ:INVA
Innoviva — Proxy Contest (March 2017)
32 slides from Innoviva's proxy contest presentation, Mar 28, 2017
Slide 1: Forward-Looking Statements
Forward-Looking Statements This presentation contains certain “forward-looking” statements as that term is defined in the Private Securities Litigation Reform Act of 1995 regarding, among other things, statements relating to goals, plans, objectives and future events. Innoviva intends such forward-l
Slide 2: Executive Summary
Executive Summary • Innoviva at a Glance: • • • $1.4 billion market capitalization biopharmaceutical company partnered with GSK1 Formed following spinoff of R&D activities in June 2014 into Theravance Biopharma (TBPH) Management and Board with significant pharmaceutical marketing expertise and a tra
Slide 3: Innoviva Investment Highlights
Innoviva Investment Highlights 4 ©2017 I NNOVIVA Highly qualified Board with five new independent directors added since 2014; two of whom were added to the Board in the last six months Increased the operating margin to 86% of total revenue in the fourth quarter of 2016 and expects further improvemen
Slide 4: Innoviva's History: Key Milestones
Innoviva’s History: Key Milestones 2014 2016 ctober 26, 2016 ctober 9, 2014 5 ©2017 I NNOVIVA Innoviva’s highly qualified team has positioned the business to deliver strong shareholder returns while aligning governance with best practices December 2015December 2016February 2017 BREO TRx Market Share
Slide 5: Strong Recent Financial Performance
Strong Recent Financial Performance Profit growth driven by improved GSK collaboration performance/lower post-split cost structure $/shares $ millions Strong growth in profits/operating cash Low cost operations combined with revenue growth Total Q4 2016 expenses have declined more than 90% vs. Q1 20
Slide 6: Steady Growth in Royalties Earned
Steady Growth in Royalties Earned RELVAR®/BREO® ELLIPTA® Launched in more than 50 countries 117% YoY growth in royalties earned between 2015 and 2016 ANORO® ELLIPTA® Launched in more than 40 countries 132% YoY growth in royalties earned between 2015 and 2016 44% 56% Long Term Revenues: Track Script
Slide 7: BREO ELLIPTA Market Share by Type
BREO® ELLIPTA® Market Share by Type BREO continues to gain ICS/LABA NBRx and TRx share BREO now accounts for 40.1% of new ICS/LABA prescriptions written by pulmonologists in the US market BREO Share of ICS/LABA TRx and NBRx Market Since May 2015 25.0% 90,000 80,000 20.0% 70,000 60,000 15.0% 50,000 4
Slide 8: ANORO ELLIPTA Market Share by Type
ANORO® ELLIPTA® Market Share by Type ANORO continues to gain MB NBRx and TRx share ANORO now accounts for 23.1% of new Maintenance Bronchodilator prescriptions written by pulmonologists the US market in ANORO Share of MB Market TRx and NBRx Since January 2015 25.0% 35,000 30,000 20.0% 25,000 15.0% 2
Slide 9: Well Capitalized
Well Capitalized As of December 31, 2016 Well Capitalized Company • Strong cash position • Cash as % of market cap: 12% • Cash as % of total debt: 21% / 62% 2 • Prudent stewardship combined with an aggressive capital return program $ millions 100% of LTM $600 Low Effective Leverage After Considering
Slide 10: Significant Future Growth Opportunity
Significant Future Growth Opportunity BREO® ELLIPTA® FDA Approved for COPD and Asthma in adults and ANORO® ELLIPTA® FDA Approved for COPD; BREO® ELLIPTA® and ANORO® ELLIPTA® are not indicated for the relief of acute bronchospasm. Full U.S. Prescribing Information, including BOXED WARNING and Medicat
Slide 11: Corporate Priorities and Execution
Corporate Priorities …and Execution 32% quarterly CGR in royalty revenues in last 10 quarters 29% quarterly CGR in adjusted EBITDA* since Q1 2015 Returned more than $210 million to investors since Q1 2015 Reduce overall corporate cost of capital & optimize shareholder value * Non-GAAP Financial Meas
Slide 12: Innoviva's Commitment to Governance
Innoviva’s Commitment to Governance Corporate ©2017 I NNOVIVA
Slide 13: Aligning Governance with Best Practices
Aligning Governance with Best Practices 1. 2. 3. 4. 5. Highly-qualified Board of Directors Independent oversight Active shareholder engagement Emphasis on shareholder rights Compensation policies and practices aligned with shareholder interests Board Independence • • • 6 of 7 directors are independe
Slide 14: Independent and Highly Qualified Board
Independent and Highly Qualified Board Pharmaceuticals 16 ©2017 I NNOVIVA Five new Independent directors added since 2014 Director Financial Services Experience Public Company CEO/CFO Experience Financial Expertise Healthcare/ Experience William H. Waltrip James L. Tyree Michael W. Aguiar Barbara Du
Slide 15: Compensation Practices and Policies
Compensation Practices and Policies 100% of the compensation committee members are independent Recent implementation of performance-based RSA program Equity plans expressly forbid option repricing without shareholder approval Active equity plans expressly forbid exchanges of underwater options for c
Slide 16: Sarissa's Proxy Fight
Sarissa’s Proxy Fight ©2017 I NNOVIVA
Slide 17: Sarissa's Proxy Fight
Sarissa’s Proxy Fight • • Initial investment in 3Q 2016; currently holds 3% of outstanding shares Following public disclosure of Sarissa’s position, the Company reached out to Sarissa (on November 22, 2016) and has since been actively engaging in discussions to understand Sarissa's strategy • On the
Slide 18: Understanding the Evolution of Innoviva's Share Price
Understanding the Evolution of Innoviva’s Share Price External Factors Caused Share Price to Initially Decline Post-Separation Innoviva Initiatives Supported Share Price Recovery Sluggish launch of BREO / ANORO below market expectations Increased pricing pressure for COPD medicines Increased expecta
Slide 19: Innoviva Outperforms Comparable Companies in Controlling Costs
Innoviva Outperforms Comparable Companies in Controlling Costs ($ in millions) Innoviva continues to grow revenue without growing headcount . . . at a substantially higher rate than peers Total Revenue per Headcount (2015A – 2017E) • $30 25 20 15 10 5 0 1 1 2017E 2016A 2015A • Innoviva has decreased
Slide 20: Innoviva's Compensation is Consistent with Peers
Innoviva’s Compensation is Consistent with Peers 2015 Compensation ($mm)1 Below the peer median $9.8 Below the peer median Total Board Note: Peer group includes: AMAG Pharmaceuticals, Anacor Pharmaceuticals, Arena Pharmaceuticals, ARIAD Pharmaceuticals, Dyax, Halozyme Therapeutics, ImmunoGen, Insys
Slide 21: Sarissa's Plan is High Risk, Low Upside
Sarissa’s Plan is High Risk, Low Upside Innoviva’s Core Strategy Sarissa’s “Harvest” Approach • • Maximize revenue opportunity of BREO / ANORO portfolio Replacing our core strategy with a “Harvest” approach creates risk to revenue growth During Denner’s tenure, Enzon reduced G&A by 76% (~$9 million)
Slide 22: The Impact of Aggressive Cost Cutting at Enzon
The Impact of Aggressive Cost Cutting at Enzon under Denner/Kostas A Troubled History at Enzon Pharmaceuticals • • Alex Denner joined the Enzon Board in May 2009 and became Chairman in July 2009 As Chairman, Denner drove a “harvest” strategy of aggressive cost-cutting and asset sales that significan
Slide 23: Sarissa's Nominees Are Not in The Best Interest of Shareholders
Sarissa’s Nominees Are Not in The Best Interest of Shareholders • Sarissa’s nominees either lack relevant experience or the experience they do have is not differentiated relative to the current, highly qualified Board • Each Sarissa nominee is either an employee of Sarissa or has previously served o
Slide 24: Sarissa's Nominees Are Not in The Best Interest of Shareholders
Sarissa's Nominees Are Not in The Best Interest of Shareholders * Sarissa's nominees either lack relevant experience or the experience they do have is not differentiated relative to the current, highly qualified Board * Each Sarissa nominee is either an employee of Sarissa or has previously served o
Slide 25: Innoviva's Strategy and Board Has and Will Deliver Strong Returns
Innoviva’s Strategy and Board Has and Will Deliver Strong Returns Outperformed the NBI Index by 22% in 2016 Differentiated products addressing a $20+ billion market 32% quarterly compounded growth rate in royalty revenue in last 10 quarters $210 million returned to investors since Q1 2015 Continuing
Slide 26: Protect Your Investment: Vote for Innoviva's Nominees
PROTECT YOUR INVESTMENT VOTE FOR INNOVIVA’S NOMINEES CARD ON THE 28 ©2017 I NNOVIVA
Slide 27: RELVAR/BREO ELLIPTA Important Safety Information (U.S.)
RELVAR®/BREO® ELLIPTA® Important Safety Information (U.S.) The following ISI is based on the Highlights section of the US Prescribing Information for Breo Ellipta Please consult the full Prescribing Information for all the labelled safety information for Breo Ellipta. Long-acting beta2-adrenergic ag
Slide 28: ANORO ELLIPTA Important Safety Information (U.S.)
ANORO® ELLIPTA® Important Safety Information (U.S.) The following Important Safety Information (ISI) is based on the Highlights section of the Prescribing Information for Anoro Ellipta. Please consult the full Prescribing Information for all the labeled safety information for Anoro Ellipta. Long-act
Slide 29: Reconciliation of Non-GAAP Financial Measures to GAAP
Appendix Reconciliation of Non-GAAP Financial Measures to GAAP To supplement the consolidated financial statements presented in accordance with generally accepted accounting principles in the United States, or GAAP, Innoviva uses the non-GAAP financial measures of adjusted EBITDA and adjusted earnin
Slide 30: Reconciliation of Non-GAAP Financial Measures to GAAP
Reconciliation of Non-GAAP Financial Measures to GAAP Reconciliation of GAAP to Non-GAAP Operating Results Reconciliation of GAAP to Non-GAAP Operating Results (in thousands) (in thousands, except per share data) Twelve Months Ended Dec. 31, 2016 Eight Quarters Ended Dec. 31, 2016 Three Months Ended
Slide 31: Reconciliation of Non-GAAP Financial Measures to GAAP
Reconciliation of Non-GAAP Financial Measures to GAAP Reconciliation of GAAP to Non- GAAP Operating Results Reconciliation of GAAP to Non- GAAP Operating Results {in thousands) Eight Quarters Ended Dec. 31,2016 (unaudited) eairom: GAAP netincorne: $ 40776 Non-GAA? adjusiments: Interest expense (inco
Slide 32: INVA.COM
INVA.COM