HALO - NASDAQ
Halozyme Therapeutics, Inc.
HALO·NASDAQ
$69.82
+2.3%HealthcareBiotechnology
Halozyme Therapeutics, Inc. operates as a biopharma technology platform company in the United States, Switzerland, Ireland, Belgium, Japan, and internationally. The company's products are based on the ENHANZE drug delivery technology, a patented recombinant human hyaluronidase enzyme (rHuPH20) that enables the subcutaneous delivery of injectable biologics, such as monoclonal antibodies and other therapeutic molecules, as well as small molecules and fluids. Its flagship product is Hylenex recombinant, a formulation of rHuPH20 to facilitate subcutaneous fluid administration for achieving hydration to enhance the dispersion and absorption of other injected drugs in subcutaneous urography and to improve resorption of radiopaque agents. The company also develops Perjeta; RITUXAN HYCELA and MabThera SC for the treatment of non-Hodgkin lymphoma and chronic lymphocytic leukemia (CLL); RITUXAN SC for patients with CLL; and HYQVIA for the treatment of immunodeficiency disorders. In addition, it is developing Tecentriq for non-small cell lung cancer; OCREVUS for multiple sclerosis; DARZALEX for the treatment of patients with amyloidosis, smoldering myeloma, and multiple myeloma; nivolumab for the treatment of solid tumors; ARGX-113, a human neonatal Fc receptor; ARGX-117 to treat autoimmune diseases; and BMS-986179, an anti-CD-73 antibody. The company has collaborations with F. Hoffmann-La Roche, Ltd.; Hoffmann-La Roche, Inc.; Baxalta US Inc.; Baxalta GmbH; Pfizer Inc.; Janssen Biotech, Inc.; AbbVie, Inc.; Eli Lilly and Company; Bristol-Myers Squibb Company; Alexion Pharma Holding; ARGENX BVBA; Horizon Therapeutics plc; National Institute of Allergy and Infectious Diseases; Centre for the AIDS Programme of Research in South Africa; and ViiV Healthcare Limited for small and large molecule targets for the treatment and prevention of HIV. Halozyme Therapeutics, Inc. was founded in 1998 and is based in San Diego, California.
At a Glance
Live SnapshotMarket Cap$8.28B
EPS2.6400
P/E Ratio25.45
Earnings Date08/04/2026
Earnings Call Transcript
HALO • 2024 • Q3
Operator
Good afternoon. My name is Jal [ph] and I'll be your conference operator today. At this time, I would like to welcome everyone to the Halozyme Third Quarter 2024 Financial and Operating Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. [Operator Instructions]. Please note, this event is being recorded. I'll now turn the call over to Tram Bui, Halozyme's Vice President of Investor Relations and Corporate Communications. Please go ahead.
Tram Bui
Thank you, operator. Good afternoon and welcome to our third quarter 2024 financial and operating results conference call. In addition to the press release issued today after the market closed, you could find a supplementary slide presentation that will be referenced during today's call in the Investor Relations section of our website. Leading the call will be Dr. Helen Torley, Halozyme's President and Chief Executive Officer, who will provide an update on our business; and Nicole LaBrosse, our Chief Financial Officer, will review our financial results as well as our outlook. On today's call, we will be making forward-looking statements as outlined on Slide 2. I would also refer you to our SEC filings for a full list of risks and uncertainties. During the call, both GAAP and non-GAAP financial measures will be discussed. Certain non-GAAP or adjusted financial measures are reconciled with the comparable GAAP financial measures in our earnings press release and slide presentation. I will now turn the call over to Dr. Helen Torley.
Helen Torley
Thank you, Tram, and good afternoon, everyone. Let me start on Slide 3. I am very pleased to report we delivered strong third quarter financial results with a 34% increase in total revenues to reach an all-time high of $290 million in the quarter. This was largely driven by royalty revenue, which increased 36% to another record amount of $155 million. This performance reflects the continued expansion and broadening of adoption of our ENHAN
phylate
Most recently, its BLA efgartigimod subcutaneous with ENHAN
Nicole LaBrosse
Thank you, Helen. I'll begin with an overview of our third quarter performance and then review the increased guidance ranges for 2024 that are resulting from our strong progress. Our robust financial results for the third quarter exceeded expectations due to higher revenues from royalties and collaboration revenues in the quarter. The result is an impressive 34% increase in total revenue from prior year with adjusted EBITDA and non-GAAP earnings per share growth outpacing our top line growth at 60% and 69% respectively. A clear demonstration of the significant leverage we have our high margin business model. Let me now turn to slide 12 for our detailed financial results for the third quarter. Revenue grew 34% to $290.1 million compared to $216 million in the prior year period. Royalty revenues for the quarter were $155.1 million, an increase of 36% compared to $114.4 million in the prior year period. The continued growth of subcutaneous DAR
Helen Torley
Thank you, Nicole. Our strong year-to-date performance is a reflection of the execution of our strategy and the power of our durable high-growth business model. This resulted in a meaningful raise in our expectations and our financial guidance for the year, resulting in impressive year-over-year growth and setting us up for a strong start to 2025. We have multiple drivers that will support our continued growth, including an exciting series of launches that are just beginning or are soon to commence. I'd like to close by recognizing and thanking the Halozyme team and all of our collaborators, whose continued dedication and performance has made this such a remarkable quarter and year. Operator, we are now ready to open the call for questions.
Operator
Thank you. [Operator Instructions] Your first question comes from the line of Vikram Purohit of Morgan Stanley. Your line is open.
Unidentified Analyst
Hi, everyone. Thanks for taking our question. This is Morgan on for Vikram. So, one for us on the OCREVUS and TECENTRIQ recent launches. Although it's early, what's your current view on sub-Q conversion for these products and how that could ramp in the coming quarters, and what that may look like long-term on a steady state basis? Thank you.
Nicole LaBrosse
Yes, thanks Morgan. We'll start with OCREVUS, and I think it's important to note there, and Roche reiterated this on their quarterly call just a week or so ago. Their goal with the sub-Q is not to immediately convert the IV to sub-Q. So, it's not a conversion strategy. It's very much a market growth strategy, where they see the availability of subcutaneous as allowing more treatment centers and more throughput of patients at infusion suites, community hospitals, because of the much shorter treatment time with subcutaneous and the easier approach to sub-Q, which doesn't require as much infrastructure. Indeed, they commented that they see the availability of sub-Q will expand the OCREVUS market by about $2 billion. So, initially for OCREVUS, the field force will be very much focused on getting new prescribers and helping those new prescribers set up and start using OCREVUS. If I moved to TECENTRIQ, obviously TECENTRIQ continuing to perform well in its key tumor indications as an IV given over 30 to 60 minutes. Within that, there are patients who are receiving TECENTRIQ as an example as monotherapy or for whom they are in a complex regimen where they want to have a shortened regimen. In that instance, there's going to very much be a field force focus to convert those patients from the IV to the sub-Q because of a much simpler regimen. So, we are going to see a conversion focus with TECENTRIQ, market growth for OCREVUS. Roche has not given out any numbers as to where they see the conversion. Our approach has generally been to look at the success they had with Herceptin sub-Q in Europe, which got to 60% share of volume and then to have a range around that depending on, is the company driving for that sub-Q conversion. So, particularly for TECENTRIQ, I'd think about it in those terms.
Unidentified Analyst
Thank you.
Operator
Your next question comes from the line of Brendan Smith of TD Cowan. Your line is open.
Brendan Smith
All right, great. Thanks so much for taking the questions. Congrats on a solid quarter. I wanted to first actually kind of piggyback on that last question about OCREVUS’S sub-Q. You called out the language from Roche about that $2 billion. Just to kind of better understand that or maybe contextualize it a bit, if consensus for peak sales is around $9 billion and $10 billion there, that might suggest only about 20% share of the sub-Q. Is that maybe the right way to think about that or is this $2 billion really kind of new to brand patients that would be in addition to IV to sub-Q switchers? And then maybe just really quickly on the Wave 4 pipeline, are you able to give us any sense of at what point we might learn about the additional Roche and Chugai drug, just whether target indication is like after a Phase 2 data or something like that. Just trying to understand where we might start focusing more on that wave. Thanks very much.
Helen Torley
Yeah, thanks Brendan, and thanks for asking that question, because I do think the way Roche has been talking about it has led people to be a little bit confused. So there's going to be a market expansion which is on top of the IV opportunity. And so if it's at $9 billion, my view is this is going to take the total growth in the next several years to be $11 billion. So you do add on the additional $2 billion. But the original IV sales of the $9 billion will, we strongly believe, be converted. When you think about what the difference is going to be for a patient, instead of up to 3.5 hours to 5.5 hours in an infusion suite, it's going to be 30 minutes in an infusion suite. And so there is also going to be that conversion of the IV to sub-Q. I think what you're going to see is it's going to be phased. The initial launch focus is on expanding the market, and over time, we're going to see the conversion begin and grow as well. But when we're hearing from Roche, they very much want to highlight this is not just a cannibalization opportunity. So don't think about the pie staying the same size it is today. The pie is going to get bigger and then also going to be the opportunity to convert that bigger pie to be more sub-Q sales. Just on that, they also made a comment on their call that they are seeing already the strategy at work in the U.S. Obviously very recent launch in, but they are seeing that 80% of new starts on OCREVUS
Brendan Smith
Right. Thanks very much. I appreciate it.
Operator
Your next question comes from the line of Mike DiFiore of Evercore ISI. Your line is open.
Mike DiFiore
Hi guys. Thanks so much for taking the question and congrats on the solid quarter. Two for me. First question is, any status update regarding your expectations for new collaboration deals to be made before the end of the year? And I have a follow-up.
Helen Torley
All right, thanks Mike for that. You saw probably that we have provided our guidance for the year on the collaboration, expecting $130 million to $150 million. I'm very pleased with the progress we've made here. Obviously, strong contributions from the – expanding the agreement with argenx, in particular in the quarter. I will say we're not letting our feet off the gas pedal and we're remaining very focused on gaining new deals and additional new nominations as we close out 2024. But if you do take a look at our guidance, you can see where the range we're predicting based on what we have line of sight on today is in that $130 million to $150 million range.
Mike DiFiore
Got it, got it. And my follow-up question is regarding MDASE. Considering that the MDASE licensees are non-exclusive and won't involve Halozyme support services or API supply as you previously noted, how will licensees manage development and regulatory challenges that are typically supported in traditional ENHAN
Helen Torley
Yeah, I will be clear and say, we do expect that the vast majority of companies are going to want to and be able to work with ENHAN
Mike DiFiore
Got it. Very helpful. Thanks so much.
Operator
Your next question comes from the line of Jason Butler of Citizens JMP. Your line is open.
Jason Butler
Hi, thanks for taking the question. Just one on VYVGART Hytrulo and the pre-filled syringe. Can you maybe just speak to the progress there with FDA and how your work with other collaborators or other products has input it into this regulatory process? Thanks.
Helen Torley
Yeah, thanks Jason. If you listen to the call today, as we did, argenx provided the update and just summarized that they are expecting a PDUFA action date that is going to be in April. We don't have any other information that we can share with regard to that, but we are excited that they are obviously progressing with that in studies that are ongoing, both in thyroid eye disease and other indications now. Again, this really has been work that we have done obviously in providing the ENHAN
Jason Butler
Okay, great. Thanks for taking the question.
Operator
Your next question comes from the line of Corinne Jenkins of Goldman Sachs. Your line is open.
Corinne Jenkins
Hi, good afternoon everybody. Mainly could you expand a little bit on the primary drivers? Is that increase in royalty revenues? You mentioned the products that are driving it, but I'm curious if it was additional indications within DAR
Helen Torley
Yeah. Small bits of colour we can bring based on what our partners have stated publicly. I think we can say for DAR
Corinne Jenkins
And then on the auto-injector side?
Helen Torley
Oh sorry, on the auto-injector side, I mentioned on the call, Corinne, we are continuing discussions, both with the high-volume auto-injector and also small-volume auto-injector. Similarly, two comments I made on the ENHAN
Corinne Jenkins
Thank you.
Operator
Your next question comes from the line of Mitchell Kapoor with H.C. Wainwright. Your line is open.
Mitchell Kapoor
Hey everyone, thanks for taking the question. Just wanted to know a little bit more about the MDASE platform opportunity. Can you just give a little context to how big or narrow of an opportunity this might be based on how many types of opportunities might be out there for this, when you do have the ENHAN
Helen Torley
Yeah, thanks Mitchell. And what we've talked about is the fact that we do anticipate ENHAN
Mitchell Kapoor
Great. Thank you for taking my question and congrats on the quarter.
Helen Torley
Thank you.
Operator
Your next question comes from the line of Mohit Bansal of Wells Fargo. Your line is open.
Mohit Bansal
Great. Thank you very much for taking my question. I have two questions. So one is, how should we think about your guidance update philosophy going forward, because I understand that you'll be providing guidance for ‘25 as next year rolls over, but should we be expecting updates for subsequent years as well as the expectations change? That's number one. And number two, for the MDASE platform, how differentiated it is from your ENHAN
Helen Torley
Yep. I'll ask Nicole to comment on your question on the guidance and I'll talk about MDASE.
Nicole LaBrosse
Yes, thanks for the question Mohit. So from a guidance perspective today we are focused on the third quarter results and the full year updated guidance, which we're really excited to raise for top line and bottom line for the full year. And you saw, we do republish our five-year projections. Those are unchanged at the moment, but we continue to evaluate those in the New Year. We'll give more line of sight and color into our updated expectations for 2025.
Helen Torley
All right, and maybe I'll take a step back and just say, you know we talked about all of the experiments that we did, and the experiments that we did on the human hyaluronidase area, and we came up with ENHAN
Mohit Bansal
Very helpful. Thank you very much Helen and Nicole. I really appreciate it.
Helen Torley
Thank you.
Operator
Your next question comes from the line of Jessica Fye of J.P. Morgan. Your line is open.
Unidentified Analyst
Hey guys, this is Nasan [ph] on for Jessica Fai. Congratulations on a strong quarter. My question goes back to MDASE. I think, can you just give us examples of how – what case would a partner be unable to work with ENHAN
Helen Torley
Yeah. So with regard to the situation where people couldn't work with ENHAN
Operator
Your last question comes from the line of David Risinger of Leerink Partners. Your line is open.
David Risinger
Thanks very much. So my key questions have been asked, so I just wanted to ask about product sales. So if you could just educate a little bit more, Helen, with respect to why product sales are flattish in 2024, and then why they are expected to grow by 50% over the next four years. So I see your 2028 target for revenue is up about 50% from $300 million this year to roughly $450 million in ‘28. Thanks so much.
Helen Torley
That is a great question. I'm going to pass it over to Nicole.
A - Nicole LaBrosse
Yeah, thanks David. So in product sales, what you see in product sales are, one, the products that we sell to our collaboration partners, to our API and our devices. That is where we have talked about historically those can be lumpy quarter-over-quarter. We are making investments to have lower cost API for our partners. So over the longer term, that revenue stream will actually decline for us, because as we make lower cost materials, that gets passed on to our partners in savings. So that is one of the drivers in product sales. And then also we have our proprietary product sales. Those are the sales that you see annually year-over-year are increasing, and also trending this year in line with our expectations for the full year. I will point out that our proprietary product sales, you saw a slight decrease in sequential quarters in the third quarter, and that's due to seasonality that we historically experience in the third quarter, where we do see a dip in demand in the summer months, and that is a part of our plans, and you'll see that in the results for the third quarter.
Transcript from October 31, 2024
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