HALO - NASDAQ
Halozyme Therapeutics, Inc.
HALO·NASDAQ
$71.52
+4.8%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$8.48B
EPS2.6400
P/E Ratio27.09
Earnings Date08/04/2026
Earnings Call Transcript
HALO • 2025 • Q1
Operator
Good afternoon. My name is Bailey, and I will be your conference operator today. At this time, I would like to welcome everyone to Halozyme's First Quarter 2025 Financial and Operating Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. [Operator Instructions] 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 first quarter 2025 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 would 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, 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
Good afternoon, everyone, and thank you for joining us today. It really has been a tremendous start to 2025. Before I describe the many events and successes in the first quarter, let me begin by thanking the many shareholders and sell-side analysts who participated in our investor feedback interviews earlier this year. We really appreciate your feedback and it has been invaluable. Your feedback helped us understand more granularly the role that we are playing in different investor portfolios, and we're very pleased to be considered your consistent stock grower. Not surprisingly, each of you recognize our leadership in drug delivery for biologics and how this foundation can be expanded to additional areas of drug delivery. All investors agreed on key themes about Halozyme. For example, no investor wants Halozyme to invest in drug development binary risk. We agree. All investors want to make sure that we maximize the organic growth represented by ENHAN
Nicole LaBrosse
Thank you, Helen. The first quarter of 2025 represented a strong start to the year, and we're excited to raise our full year expectations based on these strong results. We grew revenue by 35%, with EBITDA growth of 40% as we continue to drive leverage on our high margin royalty revenue, contributing $153 million in free cash flow in the quarter. Let me start on Slide 13. In the first quarter, we completed the $250 million ASR announced in December of 2024. Since 2019, we have repurchased $1.55 billion of shares, which is on average $250 million each year at an average price of $33.72. Due to the strong performance to date, we are announcing an additional $250 million of share repurchases to be executed during the remainder of the year. As Helen mentioned, we continue to evaluate M&A opportunities to complement our organic growth expectations. Let me now turn to our detailed first quarter results on Slide 14. Revenue grew 35% to $264.9 million compared to $195.9 million in the prior-year period. This includes higher-than-expected revenue in all categories. Royalty revenue of $168.2 million increased by 39% from $120.6 million in the prior-year and was higher than our original expectations. The continued commercial success of subcutaneous DAR
Helen Torley
Thank you, Nicole. Our strong first quarter performance, particularly of DAR
Operator
[Operator Instructions] Your first question comes from the line of Mohit Bansal with Wells Fargo. Your line is open.
Sadia Rahman
Hi. Sorry about that. I was on mute. Hi. This is Sadia Rahman on for Mohit. Thanks for taking the questions. So, on the IP case with Merck, had a question about that. Can you comment on the expected timelines for the PGR decisions and what action you could take if the PGR goes in Merck's favor?
Helen Torley
Yeah. Thanks for that. With regard to the PGR, the first decision by the patent office on institution will be in early June. And if there is institution, that will mean that the case will be reviewed about 12 months from then. They also can decide not to pick up the case, in which case, it would not proceed.
Sadia Rahman
Got it. And just related to that, is there a possibility that that PGR case and your patent infringement lawsuit could be tied together, or is that not possible due to logistical reasons?
Helen Torley
Yeah. Not logistical, but two very different approaches that are going on there. Obviously, the PGR we consider to be frankly a little bit of a sideshow. PGRs tend to be filed when companies are concerned that they are infringing and they seek to invalidate the patents. We feel very confident in our ability to prevail in those PGRs. And even if they were to win one or two of the PGRs because there are several in place, we do not believe that will have any impact at all on our infringement at case where we have multiple additional claims that are not subject to the PGR that are the basis of that infringement case. So, two very separate things. The most important one is actually the actual lawsuit that we filed. I'd keep your attention on that one.
Sadia Rahman
Got it. Thanks so much.
Operator
Your next question comes from the line of Sean Laaman with Morgan Stanley. Your line is open.
Sean Laaman
Thank you, operator. Hello, Helen. Hope you're well, and congratulations on a nice set of numbers. What's the -- beat on number today and you've upgraded guidance, but there -- is there one particular area of strength that surprised you during the quarter and is driving the upgrade, or is it more broad-based?
Helen Torley
Yeah. I will say it's our three blockbuster products that have been performing for us for the last several years and frankly are expected to continue to have this excellent performance. So, it's across the board with DAR
Sean Laaman
Great. Thank you. And on the small volume auto-injector, when might you be in a position to tell us who the partner is? And how do the economics of that deal compare to the high volume auto-injector partnerships? And when do you ultimately see commercialization might be a reality?
Helen Torley
Yeah. The -- with regard to when that might become public, that really will be a partner who will be in control of that. I would take an estimate and guess that when it enters clinical studies, it might be public that it's our small volume auto-injector, but for competitive reasons, we're seeing again that our partners don't want to be signaling to their competition exactly what they're doing to continue to evolve their product offering and differentiate it for patients. The small volume and the high volume auto-injector agreements are both development agreements, Sean. They really lay out exactly how we will work together to create a auto-injector for use in clinical development. We have yet to move forward to the commercial licensing, supply agreement, sorry, where the actual financial terms will be there. But I would expect in both instances, what you're going to see is going to be where we have a price per device that is based on the cost of manufacturing and the time it takes us to manufacture and some cost plus benefit for Halozyme, but more to come in that later. We're just incredibly excited that we're now moving forward with two of our partners to be using and testing our auto-injectors in the future in their clinical studies.
Sean Laaman
Great. Thank you, Helen. That's all I have for now.
Helen Torley
Thanks, Sean.
Operator
Your next question comes from the line of Michael DiFiore with Evercore ISI. Your line is open.
Michael DiFiore
Thanks a lot. Hey, guys. Thanks for taking my question and congrats on all the continued progress. Two questions from me, centering on the Merck-Halozyme litigation. Number one, do you guys see Astra
Helen Torley
Yeah. I'll tackle the second one first, Mike. And no, we have not heard from any partner, who is a current partner or even conversations we're having with potential future partners, where anything is being paused to evaluate the outcome of the Merck litigation. And I don't expect that really to happen at all. I think it's very clear ENHAN
Michael DiFiore
Very helpful. Thank you.
Operator
Your next question comes from the line of Jessica Fye with JPMorgan. Your line is open.
Unidentified Analyst
Hello. This is Adam on for Jess. Thank you for taking our question. I just wanted to ask, how are you thinking about the implications of the ENHERTU front-line breast cancer data for Phesgo sales and royalties? Thank you.
Helen Torley
Obviously, we're keeping a close watch on that. What we are seeing with Phesgo is with the great long-term data and there's more long-term data, as you know, that's going to be coming out on Phesgo this year as well, together with the very convenient patient administration in just five to seven minutes for it, we believe that the Phesgo is going to continue to demonstrate this very strong market adoption and uptake where there is incredibly high patient satisfaction for it. So, not just the clinical benefits, the administration benefits, but also the patient satisfaction. So, we're not concerned with regard to the ENHERTU data that will be emerging. Delighted to see the strong uptake continues for Phesgo. We mentioned on the call, 47% share now in the 58 launch markets, expected to get to more than 50% this year. And we've seen with our products that when a patient has moved to the subcu version of the products, they tend to be very sticky. So, we are projecting continued strong growth of Phesgo for multiple years to come.
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. Wanted to ask a little bit about your views in the future of the changing proportion of the mix of royalty revenues as your pipeline evolves. Just kind of trying to understand when we could get to more even proportions versus the three blockbusters serving as the heavyweights for the royalty revenues?
Helen Torley
All right. It's -- when you have such great products, Mitch, it's an embarrassment of riches. And we do expect several of our products that are currently just starting their launch trajectories to also be meaningful contributors. There was a time where people were very focused on DAR
Nicole LaBrosse
Yeah. And we don't break out our royalties by products, but we have shared the buckets as we think about our royalty projections. We shared DAR
Mitchell Kapoor
Thank you. That's very helpful. And one more from me, just talking about the M&A activity and the expectations for future activity in that space. Could you talk a little bit about what you're looking for in your next BD deal there and how that contrasts with your strategy with Evotec? And then, if you could just talk about timing on when you would like to execute on one of those transactions? Is there kind of a timeline for that and kind of the size, larger or smaller, multiple smaller ones? Any clarity around those particular aspects of the M&A strategy?
Helen Torley
Yeah. Thanks, Mitch. With regard to M&A, we're very focused on seeking to find opportunities in the drug delivery space, where there are platform technologies that can result in long durable revenues, including and particularly for royalties. Obviously, we like that model. But I will say we are not in a hurry to do it and we're going to be carefully evaluating and being thoughtful as we've always been to identify something that we believe would be needed and required by multiple pharma companies and result in a very positive contribution to Halozyme long-term growth. So, think drug delivery, think licensing business, that is where we are evaluating today. No specific timeline. And as we're still evaluating, Mitch, it should be premature to comment on the size, but it's, so I can't comment on that, at this period of time. So that's where we're going to be focused. And we're excited to try to create new platforms and create just great businesses like ENHAN
Mitchell Kapoor
Great. Thank you all very much for taking the questions.
Operator
[Operator Instructions] Your next question comes from the line of Brendan Smith with TD Cowen. Your line is open.
Brendan Smith
Great. Thanks for taking the questions guys, and congrats on all the great updates. Maybe just another one kind of regarding the litigation, for Keytruda. Just kind of in point blank terms, can you just confirm first, that whatever the outcome for your litigation against Merck, that the decision will have no impact on your actual core ENHAN
Helen Torley
That's great, Brendan. And to be very clear, what is going on in the MDASE, which is a separate and distinct set of patents from ENHAN
Brendan Smith
Got it. Okay, great. Thank you. And then maybe just a quick one on tariffs just because we do get a lot of questions about this. Can you just speak really quickly to how we should be thinking about the potential impact of pharma and maybe EU tariffs? And if you've had any conversations with any of your partners about them, I guess particularly relevant for DAR
Helen Torley
Yeah. I'll start with Halozyme's manufacturing, where we've been very deliberate ourselves in establishing our manufacturing in the United States. And we also have been seeking to assure we can source all or virtually all of our components and materials needed in the United States too. And so, I can confirm that from the Halozyme point of view for the products we produce and our API, there is very, very limited exposure to the currently imposed tariffs, and any small impact is already contemplated in our guidance. With regard to the pharma tariffs, I can say that based on our agreements, if the pharma tariffs were implemented for products being imported into the US, Halozyme will not see or should not see any impact on our royalty revenues. And so, it's based on our agreements and based on what we're aware of with regard to the manufacturing of our partner products and importantly also US distribution and how that works. So, we should not see any impact with regard to tariffs.
Brendan Smith
All right, great. Thank you.
Operator
And your next question comes from the line of David Risinger with Leerink Partners. Your line is open.
David Risinger
Thanks very much, and congrats Helen and team on the very strong financial progress. I have two questions. The first is with respect to external acquisitions, are you also considering broadening your royalty streams by considering acquiring royalty companies? And then, with respect to potential new customer deals, could you just talk about the gating factors for new business announcements? For example, are some customers awaiting FDA guidance -- or sorry, CMS guidance for IRA negotiations in coming months for 2028 under the new administration? Thanks very much.
Helen Torley
All right. So, with regard to external acquisitions, David, I mentioned that we really are focused on creating new platform businesses that can result in durable long revenue streams such as we've created for in ENHAN
David Risinger
Got it. Thank you.
Helen Torley
Thanks very much.
Transcript from May 6, 2025
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