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Goldman Sachs starts Innoviva with neutral rating, says royalty portfolio fairly valued


Shares of Innoviva (NASDAQ:INVA) fell as much as 2.4% to $14.37 in Wednesday trading after Goldman Sachs initiated the company with a neutral rating.

Goldman Sachs analyst Chris Shibutani gave INVA stock a price target of $16, implying a 8.7% upside to INVA’s last closing price of $14.72.

Burlingame, Calif.-based Innoviva (INVA) is a healthcare royalty and asset management company with a royalty portfolio comprised of sales from respiratory drugs by GlaxoSmithKline (GSK).

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“At current levels, we believe INVA’s shares predominantly reflect the value of the royalty portfolio, based on the relatively uncontroversial outlook for the company to achieve current and projected future royalty streams from end-market sales of the respiratory products by GSK,” said Shibutani.

Innoviva (INVA) last week said it would sell its 15% royalty stake in GSK’s pulmonary disease and asthma treatment Trelegy Ellipta to Royalty Pharma (RPRX) for an upfront cash payment of about $282M.

Shibutani believes that a “key to influencing a potential inflection in valuation for INVA” will be further information and clarity of INVA’s strategy for its portfolio companies within the antibiotics space.

Goldman Sachs’ neutral rating on INVA matches the Wall Street average rating, the SA Authors rating and the Quant rating of hold.

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