Sarissa Capital States: Innoviva Already Appears To Renege On Cost Cuts; Innoviva Thinks Its Bad Corporate Governance Is Not A Problem

GREENWICH, Conn., April 17, 2017

• Innoviva already appears to be reneging on its vague recent promise to deliver cost cuts
• Innoviva fails to acknowledge that its abysmal corporate governance practices must be fixed

INNOVIVA WILL NOT CHANGE WITHOUT SHAREHOLDER REPRESENTATION AND OVERSIGHT

Innoviva's Cost-Cut Flip-Flopping Underscores Need for Shareholder Oversight – Only days after trumpeting a vague promise to review costs, Innoviva touts its current lean cost and compensation structure.  Notably, Innoviva also no longer says that its review will result in anything "meaningful" or that there will be a "benefit [to] our financial performance."  Even Innoviva must have realized you cannot claim to be lean and promise to deliver meaningful cost cuts in the same breath.  Innoviva's vague announcement a few days ago to review costs now appears to be nothing more than scant cover for GSK to support Innoviva at the annual meeting.  Bottom line – Innoviva has no plans to make any changes that will benefit shareholders.  And to ensure no meaningful changes, Innoviva has charged its "independent" directors with overseeing this cost cutting "review" – the same independent directors who have continuously failed their oversight duties and perpetuated Innoviva's bloated cost structure.  As Innoviva has shown us, it will not truly change without shareholder oversight and representation on the board.  Innoviva needs Sarissa's nominees who will insist that every dollar spent be justified by its ability to drive shareholder value.

Innoviva's Woeful Corporate Governance Will Not Change Without Shareholder Representation – Innoviva continues to tout its governance or what Glass Lewis called, "a corporate governance framework that appears problematically malleable and largely ineffective, in each case as an extension of the seemingly significant influence of current CEO Michael Aguiar."  In fact, during this proxy contest, Innoviva proudly released a manufactured timeline in connection with adding two director nominees that Glass Lewis noted "only raises additional questions around the effectiveness and independence of the committee."  And as for considering proposed shareholder nominees, the NomGov committee did not even bother to meet with Sarissa or any of our nominees, and the independent directors had scarcely interacted with any of us before it summarily rejected all Sarissa nominees.  How can this abysmal corporate governance change if Innoviva will not even acknowledge that there is a problem?

Sarissa corrects the record with regard to further misstatements by Innoviva:

• Innoviva continues to grossly overstate its role in GSK's sales and marketing
• Innoviva's independent directors have been barely present during the nomination process, unlike CEO
• Innoviva needs to learn from Enzon how to run a company for the benefit of shareholders and not management

Innoviva Contradicts Itself on GSK Role – Sarissa finds Innoviva's comments that its partnership with GSK has been the "key" to Innoviva's growth as ludicrous and also completely contradict Innoviva's most recent 10-K that it has "no control over GSK's marketing efforts."  GSK sold Advair to annual peak sales of over $8 billion without Innoviva – we do not believe GSK is really that bad at selling and marketing respiratory inhalers that it is reliant on Innoviva, a company that does not sell or market anything.  We believe Innoviva is overstating its role with GSK, in contradiction to the 10-K, in order to justify its gross overcompensation and excessive cost structure.

Innoviva's Independent Directors Have Failed Their Critical Duties in Considering Sarissa's Nominees – Innoviva states this morning that Sarissa has had six conversations with its independent directors since we began our discussions with the company.  Is Innoviva including the calls on which the CEO was present?  Or the two calls in which one independent director joined the CEO but barely spoke?  Or is Innoviva pointing to calls after Innoviva summarily rejected all Sarissa's nominees and launched this proxy contest?  Because Sarissa was unable to set up even a single call with independent directors for much of March.  Chairman William Waltrip would not even acknowledge our requests for a simple phone call.  And Sarissa was unable to speak with any independent directors alone (that is, without the CEO present) until after Innoviva summarily rejected all Sarissa's nominees and launched this proxy contest.