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    Kourosh Alborz
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    Innoviva Inc. had a successful 2020 due to partnerships with major companies. It partnered with Sarissa Capital to develop an acquisition strategy and invest $300M in Sarissa's fund, allowing Innoviva to diversify its holdings. Innoviva also partners with GSK, receiving a 15% royalty from Trelegy Ellipta's approval. Innoviva has additionally invested in biotech companies like Armata Pharmaceuticals and Entasis Therapeutics to gain exposure to new treatment areas and potential revenue streams in antibiotic resistance and multidrug resistant infections.

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    Innoviva Inc. had a successful 2020 due to partnerships with major companies. It partnered with Sarissa Capital to develop an acquisition strategy and invest $300M in Sarissa's fund, allowing Innoviva to diversify its holdings. Innoviva also partners with GSK, receiving a 15% royalty from Trelegy Ellipta's approval. Innoviva has additionally invested in biotech companies like Armata Pharmaceuticals and Entasis Therapeutics to gain exposure to new treatment areas and potential revenue streams in antibiotic resistance and multidrug resistant infections.

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    62 views2 pages

    Investment Thesis & Catalysts

    Uploaded by

    Kourosh Alborz
    Innoviva Inc. had a successful 2020 due to partnerships with major companies. It partnered with Sarissa Capital to develop an acquisition strategy and invest $300M in Sarissa's fund, allowing Innoviva to diversify its holdings. Innoviva also partners with GSK, receiving a 15% royalty from Trelegy Ellipta's approval. Innoviva has additionally invested in biotech companies like Armata Pharmaceuticals and Entasis Therapeutics to gain exposure to new treatment areas and potential revenue streams in antibiotic resistance and multidrug resistant infections.

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    Investment Thesis

    Overview: Innoviva Inc. enjoyed a fairly successful year in 2020. It is our view that Innoviva’s willingness and
    ability to partner with industry leaders such as GlaxoSmithKline PLC, and Sarissa Capital Management LP will
    serve to create new ways for the company to invest, not only into R&D and Patent Acquisition, but also to
    diversify investments and stakes across the broad biotech and healthcare industry. Our view holds that over
    time INVA’s investments and potential catalysts will help drive earnings and revenue growth, thus helping
    Innoviva reach our target valuation.

    - On December 14th 2020, Innoviva Inc. entered into a pact with Sarissa Capital LP. Based out of Greenwich
    Connecticut. Sarissa Capital Management LP is a hedge fund with 7 clients and discretionary AUM of
    ($1,289,695,317 Billion USD). Sarissa’s mandate is based on constructive shareholder activism, within the
    healthcare and biotechnology space. Sarissa owns shares in massive biotech companies the likes of Biogen
    Inc. & Jazz Pharmaceuticals PLC.

     This partnership includes an agreement under which Sarissa will help Innoviva develop its
    acquisition strategy and an investment by Innoviva into an investment fund managed by Sarissa
    Capital (300m).

     It’s also important to note that the current CEO Pavel Raifeld was a part of the investment team at
    Sarissa Capital Management. By partnering together, Innoviva Inc. will be able to refine its
    acquisition strategy whilst diversifying its holdings into Sarissa Capital Management. We believe that
    this partnership will help increase INVA’s earnings within the near future.

    - The late stage FDA approval of the once-daily inhaler, Trelegy Ellipta in Q3 of 2020 has helped Innoviva Inc.
    partner with the world renowned biotech company, GlaxoSmithKline PLC (Ticker: GSK). This approval will
    allow Innoviva Inc. to take a 15% royalty off the sale of the medication.

     Clinical asthma as seen by the graph (Figure 1) points to an increase in clinical asthma in Europe,
    South America & Australia. It is our view that with the growing number of pollutants and irritants
    within the air system, clinical asthma will continue to be a problem in the coming decades. Thus
    Innoviva & GlaxoSmithKline PLC are well positioned to supply the world’s first three-way
    combination inhaled respiratory medicine. Helping increase INVA’s earnings over-time.
    Catalysts
    - Innoviva Inc. has recently announced the acquisition of a minority stake in Armata Pharmaceuticals. This deal
    will have a transaction value of 15.95 Million USD, and will also include warrants to purchase an additional 8.7
    Million shares.

     Armata Pharmaceuticals, Inc. is a clinical-stage biotechnology firm, which focuses on the


    development of natural and synthetic bacteriophage-based therapies, in order to treat multidrug &
    antibiotic resistant bacteria.

     According to the 2019 CDC AR Threats Report: “more than 2.8 million antibiotic infections occur in
    the U.S each year, and more than 35,000 people die as a result”. The acquisition of Armata
    Pharmaceuticals, Inc. will help Innoviva Inc. diversify its equity investments, into the resistance
    therapy business whilst potentially providing Innoviva an additional stream of revenue in the future.

    - During the second quarter of 2020 Innoviva Inc. completed a $35-million-dollar investment into Entasis
    Therapeutics Holdings. Innoviva currently owns a total of 14 million of Entasis shares, or roughly 55% of its
    outstanding stock.

     Entasis plans to use the net proceeds of this investment to complete phase 3 testing of a fixed-does
    combination of its Sulbactam and Durlobactam drug candidates. These drug candidates hope to deal
    with Multidrug resistant Acinetobactar Infections.

     Multidrug resistant Acinetobactar Infections cause pneumonia, bloodstream and urinary tract
    infections. These infections tend to occur in patients in intensive care units, thus patients often find
    themselves dealing with other medical problems whilst battling the multidrug resistant infection.

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