Revenue Recognition

6 Months Ended

Jun. 30, 2023

Revenue from Contract with Customer [Abstract]

Revenue Recognition

3. Revenue Recognition

Net Revenue from Collaboration Arrangement

On July 13, 2022, Innoviva’s wholly-owned subsidiary, Innoviva TRC Holdings, LLC (“ITH”) entered into an equity purchase agreement (“TRC Equity Purchase Agreement”) with Royalty Pharma Investments 2019 ICAV (“Royalty Pharma”) to sell our ownership interest in TRC. As a result of the sale of our ownership interest in TRC, which was consummated on July 20, 2022, we are no longer entitled to receive 15% of royalty payments made by GSK stemming from sales of TRELEGY® ELLIPTA®. We retained our royalty rights with respect to RELVAR®/BREO® ELLIPTA® and ANORO® ELLIPTA®.

Net revenue recognized under our GSK Agreements was as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
(In thousands)	2023			2022			2023			2022
Royalties    - RELVAR/BREO	$	54,454		$	59,326		$	105,337		$	115,090
Royalties    - ANORO		11,267			9,630			20,698			18,072
Royalties    - TRELEGY		—			42,720			—			72,029
Total royalties		65,721			111,676			126,035			205,191
Less: amortization of capitalized fees    paid		(3,456	)		(3,456	)		(6,912	)		(6,912	)
Total net royalty revenue	$	62,265		$	108,220		$	119,123		$	198,279

Net Product Sales

Our net product sales were $15.7 million, consisting of net sales of GIAPREZA® and XERAVA® for $11.2 million and $4.5 million, respectively, for the three months ended June 30, 2023. Our net product sales were $27.2 million, consisting of net sales of GIAPREZA® and XERAVA® for $20.2 million and $7.0 million, respectively, for the six months ended June 30, 2023. We derived over 94% and 96% of our net product sales from customers located in the U.S for the three and six months ended June 30, 2023, respectively.

License Revenue

Refer to the out-license agreement with Zai Lab and Everest in Note 4, “License and Collaboration Arrangements”.