Innoviva's (INVA) specialty therapeutics and royalty commercial results are expected to drive outperformance as commercial stories have supported some of the top performing biotech company stocks this year, Oppenheimer said in a note Monday.

"We believe Innoviva is an underappreciated commercial story thanks to historical antibiotic commercial challenges, but believe unique market position and low expectations set shares up to outperform," the firm said.

Oppenheimer said Innoviva Specialty Therapeutics assets, including Giapreza septic shock rescue therapy and three assets for resistant bacterial infections, are underappreciated. The firm expects IST product sales of $127 million for 2025, with an average annual growth rate of about 40% through 2029.

Royalty distributions from Breo and Anoro are expected to generate free cash flow of about $250 million annually, the firm added.

Oppenheimer initiated coverage on the stock with an outperform rating and a $35 price target.

Innoviva shares were up over 8% in recent trading Monday.

Price: 19.89, Change: +1.55, Percent Change: +8.45