Halozyme Reports Fourth Quarter And Full Year 2016 Financial Results

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02/28/2017

- Strong progress in global HALO-301 clinical trial following positive randomized Phase 2 HALO-202 results -
- Supportive partner data presented at ASH in two key ENHANZE™ platform programs -
- 2016 Royalty Revenue of $51 million increased 65 percent from prior year -

SAN DIEGO, Feb. 28, 2017 /PRNewswire/ -- Halozyme Therapeutics, Inc. (NASDAQ: HALO), a biotechnology company developing novel oncology and drug-delivery therapies, today reported financial results and recent highlights for the fourth quarter and full year ended December 31, 2016.

"We exited 2016 in a strong position through the benefit of our differentiated business model and having made substantial progress across both of our value-creating pillars," said Dr. Helen Torley, president and chief executive officer. "The positive Phase 2 data we reported last month affirms our conviction in PEGPH20, our lead investigational oncology drug, and supports our ongoing Phase 3 study in pancreas cancer patients. We have made strong progress initiating global sites in the Phase 3 study and see momentum building in the number of patients we are screening.

"Our ENHANZE™ platform remains an important value driver as royalty revenue demonstrated yet another quarter of robust growth, and exceeded $50 million for the year. With positive data presented by Genentech and Janssen at the American Society of Hematology annual meeting for their ENHANZE-partnered programs and a recent BLA filing in the U.S. by Genentech, we remain very encouraged by the royalty growth potential from current and new products over the long term."

Fourth Quarter 2016 and Recent Highlights include:

  • Reporting a statistically significant improvement in the primary endpoint of progression-free survival (PFS) of all evaluable patients, and in the secondary endpoint of PFS in patients with high levels of hyaluronan (HA), as of a December 2016 data cut in the Phase 2 randomized HALO-202 study of PEGPH20 in combination with ABRAXANE® (nab-paclitaxel) and gemcitabine in advanced pancreas cancer patients. The primary safety endpoint to evaluate and demonstrate a reduction in the rate of thromboembolic events in the PEGPH20 arm was also achieved.

    In the population that closely mirrors the HALO-301 Phase 3 study, a 91 percent improvement was achieved in median PFS for HA-High patients in the PEGPH20 arm, 8.6 months compared to 4.5 months in the control arm. A 50 percent improvement was also reported in median overall survival (OS) for HA-High patients in the PEGPH20 arm, 11.7 months compared to 7.8 months in the control arm.

  • Screening patients at nearly 200 global sites and receiving approval in all 22 participating countries for HALO-301, the company's Phase 3 study of pancreas cancer patients.

  • Entering the dose expansion phase of the ongoing Phase 1b clinical study evaluating PEGPH20 in combination with KEYTRUDA® (pembrolizumab) in relapsed non-small cell lung and gastric cancer patients. The company expects to enroll approximately 50 patients with high levels of HA at 30 U.S. sites.

  • Announcing a broad clinical collaboration agreement with Genentech to evaluate PEGPH20 and TECENTRIQ® (atezolizumab) in up to 8 tumor types. Halozyme plans to initiate a Phase 1b trial to evaluate the combination in gallbladder cancer and cholangiocarcinoma, and Roche plans to initiate multiple Phase 1b/2 trials within their novel immunotherapy MORPHEUS clinical trial platform to evaluate the combination in pancreas and gastric cancers in the second half of 2017.

  • Presenting supportive clinical data by ENHANZE™ partners at the American Society of Hematology annual meeting in November. Genentech presented data from the SABRINA Phase 3 study indicating comparable response rates and time-to-event data for subcutaneous rituximab compared to IV administration. The data presentation followed acceptance by the Food and Drug Administration (FDA) of a Biologics License Application for a subcutaneous formulation of rituximab using Halozyme's ENHANZE™ technology. Roche has indicated it is seeking approval in chronic lymphocytic leukemia and non-Hodgkin's lymphoma, with an action date in June.

    In addition, Janssen presented data indicating its subcutaneous formulation of daratumumab on the ENHANZE™ platform was well tolerated and had an efficacy and pharmacokinetic profile consistent with the IV formulation, demonstrating the feasibility of a 30-minute, 90 mL dose and supporting further study in a Phase 3 clinical trial.

Fourth Quarter and Full Year 2016 Financial Highlights

  • Revenue for the fourth quarter was $39 million compared to $52.2 million for the fourth quarter of 2015. The year-over-year decrease was driven by $25 million received upon signing the Lilly collaboration agreement in 2015, offset by increases in royalties from partner sales of Herceptin® SC, MabThera® SC and HYQVIA®, API sales to partners, and manufacturing and clinical supply reimbursements from ENHANZE™ partners. Revenue for the fourth quarter included $14.3 million in royalties, an increase of 50 percent from the prior-year period, $9 million in sales of bulk rHuPH20 primarily for use in manufacturing collaboration products and $4.4 million in HYLENEX® recombinant (hyaluronidase human injection) product sales.

    Revenue for 2016 totaled $146.7 million, an increase of 9 percent from 2015, including royalty revenue of $51 million, an increase of 65 percent from 2015.

  • Research and development expenses for the fourth quarter were $41.3 million, compared to $27.7 million for the fourth quarter of 2015. The planned increases were primarily due to a ramp in spending associated with the HALO-301 study, personnel expenses, and manufacturing and clinical supply expenses that are reimbursed by ENHANZE™ partners.

  • Selling, general and administrative expenses for the fourth quarter were $12.2 million, compared to $10.6 million for the fourth quarter of 2015. The increase was primarily due to personnel expenses, including stock compensation, for the period.

  • Operating expenses for 2016 totaled $229.9 million, an increase of 41 percent from 2015.

  • Net loss for the fourth quarter was $27.4 million, or $0.21 per share, compared to net income in the fourth quarter of 2015 of $4.3 million, or $0.03 per share. Net loss for 2016 totaled $103 million, or $0.81 per share.

  • Cash, cash equivalents and marketable securities were $205 million at December 31, 2016, compared to $221.1 million at September 30, 2016.

Financial Outlook for 2017

For 2017, the company reiterated and updated the cash portions of its financial guidance, now expecting:

  • Net revenue of $115 million to $130 million, excluding any new ENHANZE™ collaboration agreements;
  • Operating expenses of $240 million to $250 million;
  • Operating cash burn of $75 million to $85 million; and
  • Year-end cash balance of $110 million to $125 million, an increase from its prior range of $100 million to $110 million.

Webcast and Conference Call

Halozyme will webcast its Quarterly Update Conference Call for the fourth quarter and full year 2016 today, Tuesday, February 28 at 4:30 p.m. ET/1:30 p.m. PT. Dr. Helen Torley, president and chief executive officer, will lead the call. The call will be webcast live through the "Investors" section of Halozyme's corporate website and a recording will be made available following the close of the call. To access the webcast and additional documents related to the call, please visit http://www.halozyme.com approximately fifteen minutes prior to the call to register, download and install any necessary audio software. The call may also be accessed at (877) 410-5657 (domestic callers) (334) 323-7224 (international callers) using passcode 769890. A telephone replay will be available after the call by dialing (877) 919-4059 (domestic callers) or (334) 323-0140 (international callers) using replay ID number 15609911.

About Halozyme

Halozyme Therapeutics is a biotechnology company focused on developing and commercializing novel oncology therapies that target the tumor microenvironment. Halozyme's lead proprietary program, investigational drug PEGPH20, applies a unique approach to targeting solid tumors, allowing increased access of co-administered cancer drug therapies to the tumor in animal models. PEGPH20 is currently in development for metastatic pancreatic cancer, non-small cell lung cancer, gastric cancer, metastatic breast cancer and has potential across additional cancers in combination with different types of cancer therapies. In addition to its proprietary product portfolio, Halozyme has established value-driving partnerships with leading pharmaceutical companies including Roche, Baxalta, Pfizer, Janssen, AbbVie and Lilly for its ENHANZE™ drug delivery platform. Halozyme is headquartered in San Diego. For more information visit www.halozyme.com.

Safe Harbor Statement

In addition to historical information, the statements set forth above include forward-looking statements (including, without limitation, statements concerning the Company's future expectations and plans for growth in 2017, the development and commercialization of product candidates, including clinical trial patient enrollment projections and future development activities of our collaboration partners, the potential benefits and attributes of such product candidates and expected financial outlook for 2017) that involve risk and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. The forward-looking statements are typically, but not always, identified through use of the words "believe," "enable," "may," "will," "could," "intends," "estimate," "anticipate," "plan," "predict," "probable," "potential," "possible," "should," "continue," and other words of similar meaning. Actual results could differ materially from the expectations contained in forward-looking statements as a result of several factors, including unexpected expenditures and costs, unexpected fluctuations or changes in revenues, including revenues from collaborators, unexpected results or delays in development of product candidates, including delays in clinical trial patient enrollment and development activities of our collaboration partners, and regulatory review, regulatory approval requirements, unexpected adverse events and competitive conditions. These and other factors that may result in differences are discussed in greater detail in the Company's Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 28, 2017.

 

Halozyme Therapeutics, Inc.

Condensed Consolidated Statements of Operations

(Unaudited)

(In thousands, except per share amounts)




Three Months Ended


For the Year Ended



December 31,


December 31,



2016


2015


2016


2015

Revenues:









Product sales, net


$

13,422



$

13,579



$

53,392



$

46,082


Royalties


14,289



9,544



50,984



30,975


Revenues under collaborative agreements


11,292



29,104



42,315



58,000


Total revenues


39,003



52,227



146,691



135,057











Operating expenses:









Cost of product sales


8,002



8,427



33,206



29,245


Research and development


41,349



27,746



150,842



93,236


Selling, general and administrative


12,227



10,589



45,853



40,028


Total operating expenses


61,578



46,762



229,901



162,509











Operating (loss) income


(22,575)



5,465



(83,210)



(27,452)


Other income (expense):









Investment and other income, net


366



155



1,326



422


Interest expense


(5,599)



(1,302)



(19,977)



(5,201)


Net (loss) income before income taxes


(27,808)



4,318



(101,861)



(32,231)


Income tax expense (benefit)


(422)





1,162




Net loss


$

(27,386)



$

4,318



$

(103,023)



$

(32,231)











Net loss per share:









Basic


$

(0.21)



$

0.03



$

(0.81)



$

(0.25)















Diluted


$

(0.21)



$

0.03



$

(0.81)



$

(0.25)
























Shares used in computing net loss per share:









Basic


128,185



127,197



127,964



126,704


Diluted


128,185



129,248



127,964



126,704


 

Halozyme Therapeutics, Inc.

Condensed Consolidated Balance Sheets

(Unaudited)

(In thousands)




December 31,
2016


December 31,
2015

ASSETS





Current assets:





Cash and cash equivalents


$

66,764



$

43,292


Marketable securities, available-for-sale


138,217



65,047


Accounts receivable, net


15,680



32,410


Inventories


14,623



9,489


Prepaid expenses and other assets


21,248



21,534


Total current assets


256,532



171,772


Property and equipment, net


4,264



3,943


Prepaid expenses and other assets


219



5,574


Restricted cash


500



500


Total assets


$

261,515



$

181,789







LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY





Current liabilities:





Accounts payable


$

3,578



$

4,499


Accrued expenses


28,821



26,792


Deferred revenue, current portion


4,793



9,304


Current portion of long-term debt


17,393



21,862


Total current liabilities


54,585



62,457







Deferred revenue, net of current portion


39,825



43,919


Long-term debt, net


199,228



27,971


Other long-term liabilities


358



4,443







Stockholders' (deficit) equity:





Common stock


130



128


Additional paid-in capital


552,737



525,628


Accumulated other comprehensive loss


(6)



(99)


Accumulated deficit


(585,342)



(482,658)


Total stockholders' (deficit) equity


(32,481)



42,999


Total liabilities and stockholders' (deficit) equity


$

261,515



$

181,789


 

Contacts:
Jim Mazzola
858-704-8122
ir@halozyme.com

Chris Burton
858-704-8352
ir@halozyme.com

 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/halozyme-reports-fourth-quarter-and-full-year-2016-financial-results-300415248.html

SOURCE Halozyme Therapeutics, Inc.

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