Good morning, everyone. Welcome to everyone in the room and on the webcast to day two of the Cantor Global Healthcare Conference. It's my privilege to kick the day off in our first session with Innoviva. First of all, welcome. Thank you for being at the conference. Gentlemen, it would be great if you could introduce yourselves to start. I would also love to start with an update really just on the performance of the growing specialty therapeutics business, IST, which really has been impressive growth, I think, lurking underneath the rest of the stable business. If you could articulate some of the recent success you've had in building that program, I think that would be a good tipping-off point for the conversation, and we can take it from there. Mm-hmm. Perfect. Thank you very much, Steve. It's a pleasure to be here. My name is Pavel Raifeld. I'm the CEO of Innoviva, and I'm also joined here by Austin Hackett, who is involved in a number of business development and other initiatives. I think we're very proud of the success we have had with Innoviva Specialty Therapeutics, or IST. For the last 12 months ending Q2, we generated over $200 million of sales, you know of revenue in that. Just one moment. We're having some microphone issues. Should they just go on? Go ahead. Yeah. Okay, Pavel, yeah, if you could start over. Would love for you to give a broad update just on the recent success of the Innoviva Specialty Therapeutics business. I think my question was caught, but yeah, take it away. Yeah, perfect, and this does sound much better. We are very proud of the successes we have had with Innoviva Specialty Therapeutics. This is a business that delivered over $200 million of revenue in the last four quarters, ending Q2 of this year. In particular, we delivered about $37 million of U.S. sales, which is a metric we watch quite closely in Q2. This is a business that has been growing at 40%-50% a year for the last couple of years. A lot of our success has been driven by strong commercial execution. I think we have been quite successful across a number of our products, and all of them are in a fairly early commercial stage. And the, on top of that, we have also been successful in introducing and launching new products. We believe the portfolio has very meaningful runway. Mm-hmm. How has specifically the third quarter, I guess, been for some of the key products, and what are the growth drivers you are hoping will continue to drive this growth forward in the fourth quarter? Would you highlight any of the products in particular in that portfolio that have been particularly strong in 2026? Sure. I think that a lot of the trends that have driven our growth over the last year will continue over the next couple of quarters and beyond. While I would not want to, you know, w e're still in the middle of the third quarter. Sure. I might not want to necessarily preview specific numbers. But in general, we think that the key growth drivers for our portfolio remain the same. The two largest products are XACDURO and GIAPREZA. They're the two biggest growth drivers, and I think that the drivers there are somewhat similar. With XACDURO, a lot of it is about penetrating new accounts and medical education. For GIAPREZA, a lot of the value drivers have to do with generating additional data, which would allow us to support appropriate use of the product in certain early line or specific critical care settings. Then also work closely on market access. Based on the experience that you've had with those two products in particular, XACDURO and GIAPREZA, maybe we can focus on that. First of all, what is the competitive landscape like out there as you're building the business for these products? Do you have enough experience with them to get a sense of what you think peak sales opportunities could be for these two products? Sure. The competitive landscape is actually, neither of these products are really competing against any actively marketed branded therapeutics. They have similar drivers, as Pavel said. But, for GIAPREZA in particular, it's really about broadening the overall addressable patient population with new data and finding settings of care where it can be used earlier in the line. Then for XACDURO, there really is no competition. Before the launch of XACDURO, carbapenem-resistant Acinetobacter had no approved treatment. You basically threw everything you could at it and hoped for the best, and there was like a 50% mortality rate, even with the best care. That really entered into the market as the only solution with clinical data. Really, the competitive driver is just getting the word out, getting education, and getting utilization in appropriate settings and ensuring the hospitals can, you know, identify and treat those infections as quickly as possible. What kind of trends are you seeing in resistance rates and things that would either ebb and flow or maybe be drivers of that business going forward? In the U.S., it's a rarer infection, so it kind of appears in pockets and needs to be addressed very quickly because it's a terrible infection. Terrible thing for a hospital to have. Globally, rates are actually much higher than in the U.S., both rates of the infection and rates of resistance. In the U.S., it's about 40% of cases are resistant currently, which we'd expect to grow over time, because ex-U.S., there's certain countries where it's above 70% and 80%. It really is not only a major problem in the U.S., but a serious issue globally. We have one of our partners in China that markets a company called Zai Lab. They've publicly stated that they expect the opportunity for XACDURO in China alone to be over $500 million, just because it's such a huge problem. Actually, it's a good transition to one of the next topics I wanted to cover, which is, first of all, of that sort of $200 million-ish trailing 12-month revenues for the Innoviva Specialty Therapeutics business. Can you talk about the U.S. versus the ex-U.S. sort of dynamics and how each of those is constructed? I'm particularly interested in ex-U.S. You've been able to build these partnerships and grow that ex-U.S. business through those partnerships. Zai Lab, Dr. Reddy's Laboratories, I think, was another recent one. Maybe you can use one or more of those as an example of how you think about monetizing the assets ex-U.S. and the successes you've had there, and sort of how big that ex-U.S. opportunity can ultimately be for your existing products and just for the company in general as you pursue that partnership strategy. Mm-hmm. Perfect. That is a great question. I think philosophical, we believe that we have a very differentiated and strong portfolio, and it is important to make this portfolio of products available in ex-U.S. markets so that patients there can also benefit from these products. Historically, if you were to look at, let us say, 2025, about 2/3 of our revenue came from the U.S., and 1/3 came from ex-U.S. In the U.S., we have enjoyed a very good growth rate, and we have significant visibility in the market dynamics there. Ex-U.S. markets is an amalgamation, definitionally, of multiple different markets. China is playing a large role there for us, but there are certain other markets as well. The trends there are a little bit less predictable, simply because the revenues we are generating from there is an amalgamation of orders, revenues, royalties, and various milestones. Overall, we think that growth in ex-U.S. markets is likely to mimic growth in the U.S. markets. For something like XACDURO, and let us take that $500 million peak sales estimate from Zai Lab, with that particular deal and that particular asset, what type of economics are recognized by Innoviva? Yes. With that particular deal, we are recognizing certain royalty and milestone payments, which are pretty customary. We also recognize, you know, some of the inventory supply to our partner there. Okay. And maybe to get back to your earlier question, we just announced a deal with Dr. Reddy's Laboratories in certain emerging markets, mostly Latin American markets, which I think is a good example of how we're thinking about making our drugs more accessible. These are markets with very significant resistance rates. We believe that there is significant market opportunity there. And Dr. Reddy's is a very capable partner in these markets. And so we're quite excited about the opportunity to, well, one, make the drugs accessible, and secondly, to actually benefit financially from that. Can you review just the scope of the drugs that are covered in that deal, and the regions maybe, and I guess what the overall opportunity is from that particular deal? So I think that the scope of the deal are Latin American, like Latin American markets, plus certain emerging markets in Europe, such as CIS. And we received an upfront and certain royalty payments that we disclosed in our financials. We have not provided sort of specific guidance on revenue opportunity in those markets. Okay. What about upcoming catalysts for the IST business? Can you just walk us through some of those and the impact that they'll have on read-through to future growth, but also maybe immediate impact, I think, with respect to some of the data that you were alluding to with GIAPREZA and the ability to move that up in earlier lines of therapy? Would love for you to walk through the catalyst path. Sure. I think an important thing about Innoviva Specialty Therapeutics is that it is a platform and it is a portfolio of products. As a result, we do not depend on a single catalyst to advance this business, but rather it is an amalgamation of various catalysts. I think that they fall into a few different buckets. I think the first bucket is commercial execution. We have a number of products that have been in the market for a while. We have a number of relatively early launches in XACDURO and in ZEVTERA. Also, we anticipate a launch of zoliflodacin a bit later this year. I think commercial execution is going to be quite important, that we think will ultimately deliver significant growth. Secondly, we engage, to your point, in new medical evidence generation, which I think is very relevant for GIAPREZA, but is also quite applicable to the rest of our portfolio as well. We are working on expanding our access to our products in ex-U.S. geographies. Dr. Reddy's Laboratories is a good example of that, and we anticipate that those trends will continue. Last but not the least, we also are interested in business development and potentially bringing on other appropriate products onto our platform. While those things are difficult to predict in advance, we anticipate that this is also going to be a meaningful value driver for us longer term. Okay. One of the upcoming launches, you mentioned zoliflodacin. Can you maybe expand a little bit on that and just what that sort of market looks like, and what the keys to success will be for that product launch, and maybe what expectations you would want to set for that launch? Sure. Yeah. This is actually a very unique product and launch. Zoliflodacin is a novel treatment for gonorrhea. Gonorrhea has a sort of well-established standard of care that is very effective, but there is rapidly growing resistance to this worldwide. There are really two issues, two major unmet needs that zoliflodacin addresses. The first is that the existing treatment, ceftriaxone, requires an in-person injection. There are many patients who either cannot access that or do not want that and would prefer a safe and effective oral. Initially, that is the population that this will address at launch. Long-term, what it is really addressing is the rising resistance to ceftriaxone. There are certain countries around the world where over a third of cases are already resistant to ceftriaxone, and there are no other effective care options. As resistance inevitably reaches and grows in the U.S., this we believe will then transition to an earlier line and then eventually a standard of care. Initially we expect to. We want to make this accessible and available to patients and think there's certain pockets of the population that would prefer or need an oral option. Then want to establish that platform to be able to scale up the investment as the opportunity grows with the rise of resistance. Right. Obviously, this business has been constructed with the cash flow predominantly from the royalty streams that you have on the COPD products. I think those have been pretty predictable historically and have been durable and sturdy. They've held up over time despite some novel products that really haven't disrupted those legacy COPD products. Of course, the COPD market is enormous. Maybe you could just recap your visibility on or maybe your outlook on those royalty streams, how stable they project going forward. Have there been any recent dynamics that are worth noting? Yeah, just speak to your confidence that those cash flows are intact and highly predictable. Yeah. These are really ideal royalty products. As you mentioned, they're very resilient and durable for a couple of key factors. One is that these are well-established maintenance therapy products. If you're on Anoro or Breo and you're doing well, you're not getting more exacerbations, doesn't really matter what new products are developed or what else launches, you just stay on your current drug. The vast majority of patients year over year at this point are just maintenance patients who are doing well on the therapy and won't switch. So there's really high moat to new competition and innovation because of that. The second factor is that these are actually majority ex-U.S. products. More than two-thirds of each product or the sales of each product is now from ex-U.S. sources, which really shields them from some of the really acute pricing dynamics in the U.S. and things that you typically see cause a steeper decline towards later life in the U.S. Ex-U.S., those trends tend to be much slower or not occur at all. That's a really nice buffer that keeps them, I think, more stable and is probably underappreciated by some people who are used to projecting U.S. products. Because of those factors, we expect these to stay relatively resilient until the patents run out. If you just look at the analysts that cover GSK and project these revenues, we expect to get over $1 billion in royalty revenue from this portfolio over the next five years. And strategically, I guess you would continuously have some options, Pavel, of monetizing that royalty stream, right? We see these deals all the time. You can put an IRR on the royalty stream, and you can come up with a price and a meeting of the minds with one of these royalty purchasers. Is that something you've contemplated over the years at Innoviva that you continue to contemplate? Do you like the idea of the predictable cash flow for years to come, and the ability to build IST and your other biz dev activities off of that? Or just strategically, how do you think about the options with that royalty stream? Sure. That's a great question. So we very much like our royalty stream precisely because it provides us with predictable long-dated cash flows that we can then deploy to support and advance other parts of our business. The royalty market is a fairly active market right now. Our general view on the royalty asset as well as on other assets that we have in our portfolio is that ultimately, we're trying to maximize value for the benefit of our shareholders. To the extent we think that there would be an opportunity to deliver outsized value through something strategic, we would look at that. But we're also happy to hold the royalty asset. Okay. Makes sense. I wanted to spend some time on, just for the webcast audience and just because it's sort of one of the new ventures of the company and with Austin here as well, great opportunity to talk about it is this Nortiva. Which is super interesting. It's the technology platform that you recently acquired, and now you've spun off into the subsidiary business. But in lieu of me explaining what it is, maybe Austin or Pavel, can you just describe what is Nortiva and tell us what you're planning to do with that business? Sure. Yeah, Nortiva is a new wholly-owned subsidiary that we have built around a really cool drug delivery technology called the LYNX platform. What this technology is, LYNX platform allows you to transform daily dosed oral drugs into once-weekly or once-monthly forms. The way it works is the patient would take a normal pill, and this pill in the stomach unfolds into a structure that actually stays resident in the stomach and releases a stable dose of drug over time until, at a pre-programmed time, it actually just breaks apart and passes out of the GI tract safely. This affords not only the obvious opportunity to improve adherence and convenience for otherwise daily dose drugs, but also, because of the stable dosing, there's many therapeutic areas where this could actually improve efficacy and tolerability. It's a really great opportunity that we think has a lot of long-term potential and really pretty disruptive possibilities in a lot of therapeutic areas. Can you recap just how you identified where the LYNX oral delivery platform comes from, how you identified it and acquired the technology before spinning it into Nortiva? Yeah. We've been familiar with the technology for quite a while. We followed with interest the company that was previously developing it, Lyndra Therapeutics. They ran into some issues with financing and runway that were somewhat idiosyncratic and related to more of the corporate situation than really the value of the underlying technology. That ultimately led to an asset sale where we had the opportunity to acquire at, what we thought was, a very attractive valuation this platform and take advantage of all of the development. I think there was over $200 million of development that went into the platform under Lyndra. We were able to acquire that at a fraction of the price and be able to bring over all of their progress, the technology, the equipment, key people, and then be able to rebuild from that base. The platform certainly sounds like it has broad applicability, but it has been used in, I think, a couple of clinical studies previously. Maybe you can talk about some of the legacy historical data and clinical trials that you absorbed with the acquisition. Also, the lead program is the once-monthly contraceptive. Maybe you can touch on that and what the expectations should be from this first clinical venture that Nortiva is going to undertake. Mm-hmm. Yeah. The prior company did a lot of studies in a number of different therapeutic areas as they were developing and refining the platform. That provided a lot of great validating clinical data. It has been dosed in hundreds of humans and thousands and thousands of animal studies with very good results. As mentioned, we retain all of that progress and have the optionality to continue those programs should we choose. One of the nice things as the end of their development is they had really started to establish the ability to do once-monthly dosing as opposed to what they were previously focused on was once-weekly. That really opens up a huge world of opportunity and to have really extremely differentiated dosing options. That' s our primary strategic focus going forward, is finding applications for the once-monthly form of the platform. The lead program, as you mentioned, is an oral contraceptive program. It is actually supported by funding from the Gates Foundation, which is a nice help for us, and they are great partners. That is currently the lead program that we are carrying forward, would be an option to convert what is a daily oral contraceptive where efficacy is very clearly tied to adherence, and adherence is a big challenge, to be able to have a once-monthly form that sort of erases that issue. Are there any limitations to the type of molecule that you can pair with the long-acting delivery technology, or is it like any small molecule oral drug, basically? Yeah, the biggest limitation is just being able to fit enough dose into one pill. But even with that limitation, there is the option to dose multiple pills as well. But we like to focus on ones where it is just a single dose pill. That simplifies things. But even with that limitation, there are literally hundreds of drugs that could fit on the platform. Just back to the contraceptive program, what is the overall market opportunity here, if you could put numbers on it? Let us start with that. Yeah. If you just think qualitatively about the oral contraceptive market, it is huge, right? So there are around 10 million women in the U.S. that are on a daily contraceptive pill and well over 100 million worldwide. So it is an extremely large market. As I mentioned, this is a population that has very significant adherence issues if they are trying to remember to take this every day. I think it is clearly an attractive market in the U.S. The Gates Foundation has partnered with us because they are interested in using this for more global health and family planning in low-income markets, which sort of ties to a big part of our mission as well. So there is a lot of opportunities both commercially and in the public health sector. What are the timelines, clinical timelines, on the development of that program? That program in particular, we expect to be in humans next year. It is all advancing well. In general, one of the advantages of this platform is that we are typically going to be working with already approved APIs as a reformulation. So you can leverage the 505(b)(2) pathways and have a much accelerated clinical pathway, which would be cheaper and faster. Is this a technology that you are open to or seeking collaboration partners with drugs that they would want to maybe formulate into longer-acting once-monthlies? Yeah, absolutely. Partnerships will be a key part of our strategy. We would envision that all of these programs will be partnered at some point, whether that is early on in discovery, sometime in development or ultimately for commercialization. That is something that we are in very active conversations with. As I said, there are hundreds of drugs that could work on this. We are working both internally and with partners trying to discuss what are the highest value add opportunities, and then finding either development or later commercial partners to help carry these forward. Just lastly on Nortiva, any of the legacy clinical trials that were completed or were pursued, is there anything sort of exciting or interesting in there that you would want to circle back on and continue to investigate? Yeah, there are a number of programs that were advanced into the clinic and even up to a successful phase III study with once-weekly risperidone. As I said, all the programs before that went into the clinic were for once-weekly forms. We certainly have the option to continue those should we wish or should a partner be interested. We are holding that opportunity stable but do not have any plans to progress those ahead of the once-monthly versions, you know, in absence of an interested partner. Okay. Thanks for going through Nortiva. I think it is obviously a really interesting venture. Maybe in the last couple of minutes, we can broaden the lens back to Innoviva proper. First, obviously, you generate cash flow. You have been using it in a bunch of different areas. We talked about IST, obviously, and the investments there, the business development. You have been doing stock repurchases and other strategic investments. Going forward, what does that sort of apportioning or ratio of cash allocation look like, Pavel? Maybe you can articulate sort of the strategy and how you think about where the best use of cash proceeds is. Sure. That is a great question and that is something we spend a lot of time thinking through and executing on. In general, we have the same set of criteria, which are rooted in economic value add for capital allocation. But the way they manifest themselves depends a bit on what outside opportunities are available to us. I think that IST is a very productive platform from economic growth perspective. We have designed it with a view of supporting significant inorganic growth, and so I would expect that we would continue accelerating revenue delivery there through strategic means. But timing on those things is always a little unpredictable, although we are looking fairly hard. The second part is we have been quite successful, I think, with some of our strategic healthcare asset investments such as Nortiva that Austin just described. And so I would anticipate that we will continue allocating some capital to those opportunities. Last but not the least, I think philosophically, we believe that a cash flow positive company should be returning some capital to shareholders. We are in the midst of a $125 million share repurchase program, and I think the pace there depends on a host of things, including market conditions, our share price, etc. But we also view that program as an indication of our conviction of the potential of our business. Yep. All in, we anticipate to be quite active on the capital allocation front, but I don't think that we have a preset number of deals that need to happen in a given time frame in a given area. Okay, and then just last question, as you forecast out to the end of the royalty streams, which is going to be another $1 billion in basically cash, 100% margin cash, I guess. Once that goes away, Innoviva will sort of be the underlying business that you've been building in the meantime, through IST and all these other things. What is your vision sort of for what's left? What's the residual sort of standalone Innoviva after these royalty streams are completed, and what do you hope to have built by then? Sure. That's a great question. I think that part depends on what exactly happens between now and then, because we're talking about a fairly long horizon. I would anticipate that IST at that point has grown to become a much larger business, both organically and inorganically. I would anticipate that we would make some investments in the strategic healthcare asset portfolio. Some of those investments hopefully would be financially accretive to us, and we would have monetized. Others might actually give rise to new verticals of Innoviva. Because if you remember, the origins of IST were with our investment into Amedisys. As that asset progressed, we built the whole business around it. Longer term, I would expect that we are going to be, just as we are now, a diversified biopharmaceutical company. Terrific. We'll look forward to following the progress. I continue to think this is a super under-the-radar, undervalued story and appreciate you walking through it with us. Yeah, I'll look forward to next time we connect as well, and thanks to everyone for the webcast- Yeah for listening in. Yep. Thank you very much. It's really a pleasure to be here. Thank you. Thanks, everyone.