Revenue Recognition

9 Months Ended

Sep. 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 September 30,						Nine Months Ended September 30,
(In thousands)	2023			2022			2023			2022
Royalties    - RELVAR/BREO	$	45,585		$	55,663		$	150,922		$	170,753
Royalties    - ANORO		11,429			9,943			32,127			28,015
Royalties    - TRELEGY		—			—			—			72,029
Total royalties		57,014			65,606			183,049			270,797
Less: amortization of capitalized fees    paid		(3,456	)		(3,456	)		(10,368	)		(10,368	)
Total net royalty revenue	$	53,558		$	62,150		$	172,681		$	260,429

Net Product Sales

Our net product sales were $13.7 million, consisting of net sales of GIAPREZA®, XERAVA®, and XACDURO® for $8.0 million, $5.1 million, and $0.6 million, respectively, for the three months ended September 30, 2023. Our net product sales were $40.9 million, consisting of net sales of GIAPREZA®, XERAVA®, and XACDURO® for $28.2 million, $12.1 million, and $0.6 million, respectively, for the nine months ended September 30, 2023. We derived over 86% and 93% of our net product sales from customers located in the U.S for the three and nine months ended September 30, 2023, respectively.

For the comparative periods in 2022, our net product sales amounted to $5.1 million, consisting of $3.8 million in net sales of GIAPREZA® and $1.3 million in net sales of XERAVA®. These sales were recognized from the date of our acquisition of La Jolla, which took place on August 22, 2022, through September 30, 2022.

License Revenue

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