Halozyme Reports First Quarter 2018 Results

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05/10/2018
-- Revenue of $30.9 Million Includes a 50 Percent Increase in Royalty Revenue on a Reported Basis --
-- Eight ENHANZE®-Partnered Products Expected in Clinical Studies in 2018, Two More than Forecasted in January --
-- Target Number of Progression-Free Survival Events in HALO-301 Study Now Projected to be Achieved Between December 2018 and February 2019; Enrollment on Track to Reach Approximately 500 Patients by Year-End --

SAN DIEGO, May 10, 2018 /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 first quarter ended March 31.

"Reflecting the enthusiasm and opportunity for competitive differentiation that ENHANZE may provide, in the first quarter we supported our partners in planning for initiation of an unprecedented number of clinical study starts in 2018, including two additional Phase 1 studies that were not included in our forecast at the beginning of the year," said Dr. Helen Torley, president and chief executive officer. "The momentum we have with ENHANZE reinforces our conviction for the approximately $1 billion royalty revenue potential we outlined in January.

"For PEGPH20, we currently project we will achieve the target number of Progression-Free Survival (PFS) events in HALO-301 between December 2018 and February 2019. Upon achieving the target number of PFS events, final data collection and the steps required for database lock prior to the interim analysis will be initiated. With enrollment at the end of April on track with more than 350 patients, we continue to project approximately 500 patients will have been enrolled by year-end."

First Quarter 2018 and Recent Highlights include:

  • Two new ENHANZE Phase 1 clinical studies now planned for initiation in 2018 by collaboration partners, a result of momentum generated through new agreements in 2017. The eight ENHANZE-partnered products expected to be in a clinical study in 2018 is an increase from the company's forecast in January of six.
  • Collaboration partner Bristol-Myers Squibb planning to initiate two Phase 1 studies in 2018, including a new study of an undisclosed target with Halozyme's ENHANZE technology planned for Q2 and a study of nivolumab with ENHANZE planned for Q3.
  • Among the products in clinical study, Janssen continues in multiple ongoing trials of a subcutaneous formulation of DARZALEX® (daratumumab) in support of plans for commercialization. Halozyme's ENHANZE technology has the potential to enable a 15-ml injection to be delivered in five minutes or less. The ongoing or planned trials in patients with Multiple Myeloma, Amyloidosis and Smoldering Myeloma include four Phase 3 studies and two earlier stage studies.
  • Continued progress screening and enrolling patients in the HALO-301 study of PEGPH20 in combination with ABRAXANE® (nab-paclitaxel) and gemcitabine in first-line metastatic pancreas cancer patients with high levels of tumor hyaluronan (HA-High). An interim analysis will be conducted for the first primary endpoint of PFS when the target number of events has been reached, which the company currently projects will occur between December 2018 and February 2019. Upon achieving the target number of PFS events, final data collection and the steps required for database lock prior to the interim analysis will be initiated.
  • Acceptance of an abstract for poster presentation at the 2018 American Society of Clinical Oncology Annual Meeting examining Extracellular Matrix Circulating Peptide Biomarkers as Potential Predictors of Survival in Patients with Untreated Metastatic Pancreatic Ductal Adenocarcinoma Receiving Pegvorhyaluronidase Alfa (PEGPH20), nab-Paclitaxel and Gemcitabine.

First Quarter 2018 Financial Highlights

  • Revenue for the first quarter was $30.9 million compared to $29.6 million for the first quarter of 2017. The year-over-year increase was driven by 50 percent growth in royalties on a reported basis from partner sales of Herceptin® (trastuzumab) SC, MabThera® (rituximab) SC, RITUXAN HYCELA™ and HYQVIA® (Immune Globulin Infusion 10% (Human) with Recombinant Human Hyaluronidase), offset by the expected decrease in bulk rHuPH20 sales to partners and research and development reimbursements. Revenue for the first quarter included $20.9 million in royalties, $3.4 million in sales of bulk rHuPH20 primarily for use in manufacturing collaboration products and $3.4 million in HYLENEX® recombinant (hyaluronidase human injection) product sales.
  • Research and development expenses for the first quarter were $38 million, compared to $36.9 million for the first quarter of 2017.
  • Selling, general and administrative expenses for the first quarter were $13.6 million, compared to $12.6 million for the first quarter of 2017. The increase was primarily due to personnel expenses, including stock compensation, for the period.
  • Net loss for the first quarter was $27.5 million, or $0.19 per share, compared to net loss in the first quarter of 2017 of $32.9 million, or $0.26 per share.
  • Cash, cash equivalents and marketable securities were $433.7 million at March 31, 2018, compared to $469.2 million at December 31, 2017.

Financial Outlook for 2018

Halozyme reiterated its financial guidance of:

  • Net revenue of $115 million to $125 million, including 25 to 30 percent royalty growth;
  • Operating expenses of $230 million to $240 million;
  • Operating cash burn of $75 million to $85 million; and
  • Year-end cash balance of $305 million to $315 million.

Webcast and Conference Call

Halozyme will webcast its Quarterly Update Conference Call for the first quarter of 2018 today, Thursday, May 10 at 4:30 p.m. ET/1:30 p.m. PT. Dr. Torley will lead the call, which will be webcast live through the "Investors" section of Halozyme's corporate website and a recording made available following the close of the call. To access the webcast and additional documents related to the call, please visit halozyme.com approximately fifteen minutes prior to the call to register, download and install any necessary audio software. The call may also be accessed by dialing (877) 410-5657 (domestic callers) or (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 68917761.

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 pegvorhyaluronidase alfa (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, Lilly, Bristol-Myers Squibb and Alexion for its ENHANZE® drug delivery technology. 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 2018, entering into new collaboration agreements, the development and commercialization of product candidates, including timing of clinical trial results announcements and future development and commercial activities of our collaboration partners, the potential benefits and attributes of such product candidates and expected financial outlook for 2018) 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 delays in entering into new collaboration agreements, 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 Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on May 10, 2018.

Halozyme Therapeutics, Inc.

Condensed Consolidated Statements of Operations

(Unaudited)

(In thousands, except per share amounts)




Three Months Ended



March 31,



2018


2017

Revenues:





Royalties


$

20,944


$

13,982

Product sales, net


6,801


11,434

Revenues under collaborative agreements


3,127


4,152

Total revenues


30,872


29,568






Operating expenses:





Cost of product sales


3,052


7,544

Research and development


37,976


36,935

Selling, general and administrative


13,556


12,615

Total operating expenses


54,584


57,094






Operating loss


(23,712)


(27,526)

Other income (expense):





Investment and other income, net


1,668


287

Interest expense


(5,230)


(5,448)

Net loss before income taxes


(27,274)


(32,687)

Income tax expense


187


210

Net loss


$

(27,461)


$

(32,897)






Net loss per share:





Basic and diluted


$

(0.19)


$

(0.26)






Shares used in computing net loss per share:





Basic and diluted


142,656


128,615

 

Halozyme Therapeutics, Inc.

Condensed Consolidated Balance Sheets

(Unaudited)

(In thousands)




March 31,
 2018


December 31,
 2017

ASSETS





Current assets:





Cash and cash equivalents


$

98,012


$

168,740

Marketable securities, available-for-sale


335,682


300,474

Accounts receivable, net


26,574


22,133

Inventories


4,393


5,146

Prepaid expenses and other assets


19,809


13,879

Total current assets


484,470


510,372

Property and equipment, net


4,937


3,520

Prepaid expenses and other assets


5,562


5,553

Restricted cash


500


500

Total assets


$

495,469


$

519,945






LIABILITIES AND STOCKHOLDERS' EQUITY





Current liabilities:





Accounts payable


$

3,628


$

7,948

Accrued expenses


31,889


39,601

Deferred revenue, current portion


1,247


6,568

Current portion of long-term debt, net


82,460


77,211

Total current liabilities


119,224


131,328






Deferred revenue, net of current portion


6,006


54,297

Long-term debt, net


102,696


125,140

Other long-term liabilities


2,479


814






Stockholders' equity:





Common stock


144


143

Additional paid-in capital


744,359


731,044

Accumulated other comprehensive loss


(870)


(450)

Accumulated deficit


(478,569)


(522,371)

Total stockholders' equity


265,064


208,366

Total liabilities and stockholders' equity


$

495,469


$

519,945

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

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

Halozyme Therapeutics, Inc. Logo. (PRNewsFoto/Halozyme Therapeutics, Inc.)

 

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