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 • Q4
Operator
Good afternoon. My name is Karen, and I will be your conference operator today. At this time, I would like to welcome everyone to the Halozyme Fourth Quarter and Full Year 2024 Financial and Operating Results Conference Call. Please note, this event is being recorded. I will 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 fourth quarter and full year 2024 financial and operating results conference call. In addition to the press release issued today after the market close, 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 in our business, and Nicole LaBrosse, our Chief Financial Officer, who 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. Our strong fourth quarter results concluded what proved to be an exceptional year for Halozyme. I will start by recapping our record-breaking performance in 2024. Total revenue exceeded $1 billion for the first time, growing 22% over prior year. We also raised our financial guidance twice during the year, and I'm pleased to report that full year results exceeded our raised guidance for royalty revenue, adjusted EBITDA and non-GAAP EPS. We estimate that 1 million patients have now received drugs delivered subcutaneously with ENHAN
Nicole LaBrosse
Thank you, Helen. Our strong fourth quarter results marked the end to another record year for the company, with the achievement of more than $1 billion in total revenue for the year. We grew total revenue by 22% and beat our guidance, which we increased twice during the year, and helped us grow non-GAAP EPS by 53%. With our bottom-line growth outpacing the top-line due to our high-margin royalty revenue, we converted 74% of our adjusted EBITDA into free cash flow, representing $468 million. Free cash flow is expected to increase over the next few years to 80% of adjusted EBITDA in 2026. As we look ahead, we remain firmly on track to hit another milestone in 2027, with projections of more than $1 billion in royalty revenue with our achievements to date. Let me now turn to our detailed fourth quarter results on Slide 12. Revenue grew 30% to $298 million compared to $230 million in the prior-year period. Growth was primarily driven by royalty revenue, up 40% to $170 million, and higher revenues under collaborative agreements, up 70% to $48 million, mainly due to more milestones achieved for enhanced sale-based milestones. The continued commercial success of subcutaneous DAR
Helen Torley
Thank you, Nicole. We're truly at a remarkable time in Halozyme history, with nine products now approved and one launched in multiple regions. Our high 2025 revenue and royalty growth is driven by just three of these products, DAR
Operator
[Operator Instructions] The first question comes from Sean Laaman from Morgan Stanley. Your line is open.
Sean Laaman
Hi, Helen, Nicole and Tram. Hope you're all well. And nice set of results. Congratulations. I guess over the last week and it's not lost on me that you've provided '28 guidance, which not many companies look out that far, but I guess a lot of the inbound that I get is what's beyond that and what sort of terminal value should you think about with Halozyme. So, looking at your Slide 11 and some of the issues that are going on there, what's your confidence around some of the new uses, for example, we've got that you've detailed today and maybe even some of the further argenx-related programs that might come onboard to mitigate any reduction in sort of earnings beyond that sort of '28 period -- 2030 period?
Helen Torley
Great. Thanks, Sean, and welcome to the coverage of Halozyme. And it's a great question. And in the prepared remarks, I covered that the way we think about post-2020 is really to look at the current 10 products that are approved or soon-to-be approved with Amivantamab subcu and consider that they are going to continue to be contributing considerably at that time. And the slide that we show with the duration and royalty rate really does help bring that picture into perspective, showing every product will get royalties until 2030. Many of them will go to the mid-2030s and multiple ones will also go to the 2040s. Now, for VYVGART, in particular, that is just considering GMG and CIDP. We are aware and we've got six products that are public that are already subcu development plans are soon to start with them with argenx, but I do think we're going to have to wait for the results. On a mechanistic basis, I have high confidence they are IGG-driven diseases and there's a lot of mechanistic rationale for why they'll work, but we don't forecast them in our near-term revenues just until we see that data. Now, on top of that though, don't forget that we have a pipeline, which is in the deck as well, and if we look at some of the pipeline products like Relatlimab Obdivo and TAK-881, those are highly derisked as they already are approved as an IV and other formats. And so, those will layer on top. Other products in that pipeline that are currently in Phase 1, new nominations that we expect from current partners and new deals, all start to potentially contribute in that '28-'29 timeframe as well. And so, on top of that strong base, we've got multiple opportunities to layer and add in it. And that's what makes us so excited about the durability and the strength of our royalty revenues for many years to come.
Sean Laaman
Thank you. I might save the rest of my questions when we're due to talk later this evening, but thank you.
Helen Torley
All right. Thanks, Sean.
Operator
The next question comes from the line of Brendan Smith of TD Cowen. Please go ahead. Your line is open.
Brendan Smith
Great. Thanks for taking the questions. Congrats on another strong quarter. Maybe really quickly on BD. Can you just tell us a bit more about -- what does the inclusion or integration of that small-volume auto-injector realistically do for the existing or new partnerships for that matter, when you're having those BD conversations really just in terms of economics? And is that answer any different for the high-volume auto-injector? And then, just on the ENHAN
Helen Torley
Yeah. Thanks, Brendan. And obviously, we're excited to announce the small-volume auto-injector deal with a current partner who signed up for a commercial product. Now, that particular deal and any more information is confidential at this time, but what we can say is that when we add on a small-volume auto-injector deal, it starts with the development agreement. Those are structured in such a way that there's a certain fee-for-service, if you think about like that, as we make progress in creating and developing the auto-injector. And then, as that progress is made, we move into discussions on a commercial agreement. And for small-volume injectors, the traditional structure would be that there would be a certain price per device depending on volume that includes a margin or a markup for the manufacturer in the case of Halozyme. So, it will be another revenue stream for Halozyme that would be reflected in product sales. Now that's specific for the small-volume auto-injector; in fact, that does not need ENHAN
Brendan Smith
Okay, great. Thanks very much.
Helen Torley
Thanks, Brendan.
Operator
The next question comes from the line of Mohit Bansal from Wells Fargo. Please go ahead. Your line is open.
Mohit Bansal
Great. Thank you very much for taking my questions, and congrats on all the progress. So, a couple of questions from my side. One is, Nicole, you mentioned that you're modeling negative 10% royalties for first quarter over fourth quarter. Hello? Can you help me understand what is the -- what are the dynamics there? Because it has not happened in the past and specifically VYVGART and CIDP launch is going really well. That's the first question. And the second question is, how are you incorporating pre-filled syringe transition and its uptake in the guidance? Because it seems to be going really well. Thank you.
Nicole LaBrosse
Yeah, thanks for the question, Mohit. So, when we look at royalties quarter-over-quarter, what we're seeing is we do have contracts that have an annual rate -- an annual rate reset. So that will start over in January at a lower rate, and as we achieve volumes during the year, it gets back to the regular rate. The most material impact to us is from DAR
Helen Torley
And then second question, Nicole -- Mohit, would you -- you cut out a little bit for me on the second question. Would you mind just repeating it?
Mohit Bansal
Sure. Thank you for the first answer. So, how are you incorporating prefilled syringe transition for VYVGART and uptick in the guidance? Because it seems to be going really, really well here.
Helen Torley
Yeah. Based on public comments that argenx has made, they are expecting the prefilled syringe approval in April of this year. I think we've talked in the past that we meet with our partners towards the end of the year and they gave us their projections, a range for performance in 2025. And so, we understand that argenx will have contemplated that in the information and the range they gave us. So, while we can't get into specifics, it does -- our guidance already reflects the potential increase that prefilled syringe could bring. And I think what people are, I think, very excited about it can bring the potential for a 20-second at-home injection by patients and could be adding more patients in both GMG and pre-CIDP in 2025. But we believe it's already reflected in the ranges we received.
Mohit Bansal
Great. Thank you, Helen and Nicole. Bye.
Helen Torley
Thanks, Mohit.
Operator
The next question comes from the line of Jessica Fye from JPMorgan. Your line is open.
Jessica Fye
Hey guys, good evening. Thanks for taking my questions. With the small-volume auto-injector deal you signed with an existing partner for existing commercial product, when would you anticipate that we might discover which partner that was and on which product? And just for the avoidance of doubt, this was for a product that's not a current ENHAN
Helen Torley
All right, Jessica, I'll take the first one. So, obviously, we're excited that we just signed a small-volume auto-injector. Based on the partners' desire to keep this confidential, we actually have not established with them yet when they would want to talk about it. And I really can't say any more about it at this period of time. But we obviously are interested in communicating as soon as possible and we'll provide updates as soon as we learn more with regard to that. Nicole, would you talk about the range for mid-single-digits?
Nicole LaBrosse
Yeah. When we talk about mid-single-digit, we're really plus or minus 5%. And so, in our mind, we use 3% to 7% to represent mid-single-digits.
Jessica Fye
Great. Thank you.
Operator
The next question comes from the line of Michael DiFiore from Evercore ISI. Please go ahead. Your line is open.
Michael DiFiore
Hey, guys. Thanks for taking my question, and congrats on the progress this year. In light of the fact that VYVGART's overall brand sales in 4Q had a noticeable inflection and your comments on how VYVGART Hytrulo will be the biggest growth contributor in 2025, just want to get your take on whether 2025 may be the year that the subcu formulation exceeds the IV sales. To the extent that you can, if you could add any color on that? I know back in November, argenx mentioned that the IV still comprises the bulk of sales, but wondering if you see any change in the mix over the course of 2025.
Helen Torley
Yeah. Thanks for that question, Mike. I mean, obviously, the comments that argenx has made, we're delighted with the success and uptake that we're seeing with VYVGART, both in CIDP and GMG. In terms of when VYVGART subcu could take over IV, as argenx has not provided any perspective on that, it wouldn't be appropriate for us to comment on that. But certainly, we are hearing very much that because it's allowing more physicians to start prescribing, because it's moving therapy earlier in the treatment and because the CIDP launch is going so well already with already 1,000 patients on treatment, we are very excited to when that event actually happens, but I can't communicate when that's anticipated.
Michael DiFiore
Got it. I have one quick follow-up too. Thank you for that, Helen. And maybe I'm reading too much into this, but on Slide 23, the three undisclosed products and indications at the bottom of the table on Slide 23, could this mean that three new deals are expected to be announced this year or does that reflect current partnerships? Thank you.
Helen Torley
Yeah, all of those three are coming from current partners. As an example, recall that we had five new nominations from current partners last year, but we also have the opportunity for our current partners also to nominate anytime with their open slots. And so, all of them are current partners and any new deals moving forward would be over and above that.
Michael DiFiore
Got it. Thanks so much.
Operator
The next question comes from Jason Butler from Citizens JMP. Your line is open.
Jason Butler
Hi, thanks for taking the questions. Helen, you mentioned for the large-volume auto-injectors, both the need and the work you did in 2024 to invent and build new device components. I guess to what extent is that work potentially specific to a product or a small number of products versus broadly leverageable across multiple partnering conversations? And then, second question for me is, I guess, for Nicole, just any color you can give on what's remaining on the $250 million accelerated buyback? Thanks.
Helen Torley
Yeah. With the high-volume auto-injector, we have been engaged in multiple conversations with various companies and it has given us a perspective as to what is going to be an attractive primary container. And so, that's exactly what we proceeded with. We believe that what we have moved with that particular element will be suitable for multiple partners. Now, it might not be suitable for every partner. Someone may want something custom-developed, but we decided to make the investment so that we are ready and prepared for partners who are most likely going to want that size of primary container based on the conversations that we have had. Nicole, on the ASR?
Nicole LaBrosse
Yeah. Thanks, Jason. On the ASR, so I can't share specifically how much our bank has executed through the $250 million. They did start executing on our behalf in December that will run for a number of months. But the benefit -- recall the benefit of this is that we did get approximately an estimate of 80% of the shares delivered to us in December. So, those were retired at the start of the program, at the final settlement date, we will then calculate with our bank what the final average purchase price was and the final delivery of the shares. So, have already received a good majority of the benefit from a retiring the shares perspective. And then, in the coming months, we will know the final averaging date and have completed the $250 million.
Jason Butler
Great. Thank you.
Operator
The next question comes from Mitchell Kapoor from H.C. Wainwright. Your line is open.
Unidentified Analyst
Good afternoon. This is Dan on for Mitch. Congratulations on the earnings beat. Thanks for taking our questions. So, when you think about business development, are you more focused on larger deals or groups of smaller deals? And are there any contract obligations prohibiting partnering agreements with PD-1/VEGF bispecific programs? And if not, what's the interest in partnering with one? Thank you.
Helen Torley
All right. Thanks for the question, Dan. With regard to BD, I can say that we are talking to multiple companies across large and small deals. As you hear, small deals, which we could define as companies who are perhaps earlier-stage, can turn out to be incredibly attractive future opportunities. And I'll use the example of argenx and VYVGART, they were barely known when we kind of started working with them. And so, we look at each individual opportunity, assess that opportunity and base -- proceed based on that. But we're talking about IV to subcu conversion. We're talking about subcu extended dose. We're talking about exclusive and non-exclusive arrangements. There's really a very nice array of opportunities that we are progressing towards consummation of deals in 2025. With regard to the specific question on the PD-1 bispecific, based on the exclusive terms of the agreement we have with Bristol, we would not be able to partner on a PD-1 bispecific.
Unidentified Analyst
Okay. Thank you very much.
Transcript from February 18, 2025
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