Halozyme Reports Second Quarter 2018 Results
SAN DIEGO, Aug. 7, 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 second quarter ended June 30.
"At the beginning of 2018 we projected the potential for approximately $1 billion in ENHANZE royalty revenue in 2027 resulting from continued growth of our 3 currently marketed products and the successful development, approval and launch of 7 additional products," said Dr. Helen Torley, president and chief executive officer. "I am delighted to report strong progress in both the marketed products and the development products, with all 7 new products expected to be in the clinic by the end of this year.
"In tandem, we continue to execute well in our HALO-301 study, with enrollment tracking to expectations and continued enthusiasm and support from key opinion leaders and investigators. We also look forward to advancing our pan-tumor plan by sharing data from our collaboration study with Eisai in breast cancer patients at the European Society for Medical Oncology congress in October."
Second Quarter 2018 and Recent Highlights include:
-- U.S. Food and Drug Administration (FDA) accepting Roche/Genentech's
Biologics License Application (BLA) for a subcutaneous formulation of
Herceptin in combination with Halozyme's ENHANZE technology in its
FDA-approved breast cancer indications. Roche reported total 2017 sales
of Herceptin in the United States of 2.7 billion CHF.
-- Roche initiating a Phase 3 study of a fixed-dose combination of
subcutaneous pertuzumab (Perjeta(®)) and subcutaneous trastuzumab
(Herceptin) using Halozyme's ENHANZE technology in combination with
chemotherapy in patients with HER2-positive early breast cancer. This
follows supportive Phase 1 study results for the same combination
presented at the 2017 San Antonio Breast Cancer Symposium.
-- Collaboration partner Bristol-Myers Squibb progressing toward three
Phase 1 studies with ENHANZE. Studies include evaluation of an
investigational anti-CD-73 antibody, an investigational product against
an undisclosed target and the PD-1 targeted asset, Opdivo(®)
(nivolumab), all planned for initiation in Q3.
-- Janssen continuing 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.
Ongoing trials in patients with Multiple Myeloma, Amyloidosis and
Smoldering Myeloma include four Phase 3 studies and two earlier stage
studies.
-- Alexion continuing to progress toward initiating a Phase 1 study of
ALXN1210 with ENHANZE, planned for later this year.
-- Acceptance of data from the Phase 1b study of PEGPH20 and HALAVEN(®)
(eribulin) in patients with HER2-negative, high-hyaluronan metastatic
breast cancer for presentation at the 2018 European Society for Medical
Oncology Congress.
-- U.S. Patent and Trademark Office granting Halozyme a patent for the
combination of PEGPH20, ABRAXANE(®) (nab-paclitaxel) and gemcitabine
for the potential treatment of metastatic pancreas cancer, with an
expiration date of March 2033. The same application is pending or has
been issued in multiple countries outside of the United States.
-- 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 Progression Free Survival
(PFS) when the target number of events has been reached, which the
company projects will occur between December 2018 and February 2019.
Second Quarter 2018 Financial Highlights
-- Revenue for the second quarter was $35.2 million compared to $33.8
million for the second quarter of 2017. The year-over-year increase was
driven by $10 million in milestone revenue and 36 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
second quarter included $20 million in royalties and $3.8 million in
HYLENEX(®) recombinant (hyaluronidase human injection) product sales.
-- Research and development expenses for the second quarter were $40.1
million, compared to $38.3 million for the second quarter of 2017.
-- Selling, general and administrative expenses for the second quarter were
$14.4 million, compared to $13.1 million for the second quarter of 2017.
-- Net loss for the second quarter was $22.9 million, or $0.16 per share,
compared to net loss in the second quarter of 2017 of $30.8 million, or
$0.23 per share.
-- Cash, cash equivalents and marketable securities were $398.9 million at
June 30, 2018, compared to $469.2 million at December 31, 2017.
Financial Outlook for 2018
For the full year 2018, the company updated its prior guidance ranges for net revenue and year-end cash, now expecting:
-- Net revenue increasing from the prior range of $115 million to $125
million to $125 million to $135 million, driven by milestones from
ENHANZE Phase 1 study initiations;
-- Operating expenses to continue to be in the range of $230 million to
$240 million;
-- Operating cash burn to continue to be in the range of $75 million to $85
million; and
-- Year-end cash balance increasing from the prior range of $305 million to
$315 million to $310 million to $320 million, driven by ENHANZE
milestones partially offset by a modest build in rHuPH20 inventory in
anticipation of future partner demand.
Webcast and Conference Call
Halozyme will webcast its Quarterly Update Conference Call for the second quarter of 2018 today, Tuesday, August 7 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 40189200.
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 August 7, 2018.
Contacts:
Robert H. Uhl
Managing Director
Westwicke Partners, LLC
858-356-5932
robert.uhl@westwicke.com
Laurie Stelzer
858-704-8222
ir@halozyme.com
Halozyme Therapeutics, Inc
Condensed Consolidated Statements of Operations
(Unaudited)
(In thousands, except per share amounts)
Three Months Ended Six Months Ended
June 30, June 30,
2018 2017 2018 2017
---- ---- ---- ----
Revenues:
Royalties $19,989 $14,738 $40,933 $28,720
Product sales, net 4,483 12,780 11,284 24,214
Revenues under collaborative
agreements 10,730 6,232 13,857 10,384
------ ----- ------ ------
Total revenues 35,202 33,750 66,074 63,318
------ ------ ------ ------
Operating expenses:
Cost of product sales 836 7,788 3,888 15,332
Research and development 40,086 38,339 78,062 75,274
Selling, general and administrative 14,353 13,101 27,909 25,716
------ ------ ------ ------
Total operating expenses 55,275 59,228 109,859 116,322
------ ------ ------- -------
Operating loss (20,073) (25,478) (43,785) (53,004)
Other income (expense):
Investment and other income, net 1,983 435 3,651 722
Interest expense (4,770) (5,540) (10,000) (10,988)
------ ------ -------
Net loss before income taxes (22,860) (30,583) (50,134) (63,270)
Income tax expense 33 180 220 390
--- --- --- ---
Net loss $(22,893) $(30,763) $(50,354) $(63,660)
======== ======== ======== ========
Net loss per share:
Basic and diluted $(0.16) $(0.23) $(0.35) $(0.48)
====== ====== ====== ======
Shares used in computing net loss per
share:
Basic and diluted 143,568 134,013 143,114 131,300
======= ======= ======= =======
Halozyme Therapeutics, Inc
Condensed Consolidated Balance Sheets
(Unaudited)
(In thousands)
June 30, December 31,
2018 2017
---- ----
ASSETS
Current assets:
Cash and cash equivalents $55,173 $168,740
Marketable securities, available-for-
sale 343,721 300,474
Accounts receivable, net and other
contract assets 33,582 22,133
Inventories 8,404 5,146
Prepaid expenses and other assets 21,152 13,879
------
Total current assets 462,032 510,372
Property and equipment, net 4,789 3,520
Prepaid expenses and other assets 7,433 5,553
Restricted cash 500 500
--- ---
Total assets $474,754 $519,945
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $6,187 $7,948
Accrued expenses 35,030 39,601
Deferred revenue, current portion 4,247 6,568
Current portion of long-term debt, net 86,965 77,211
------ ------
Total current liabilities 132,429 131,328
Deferred revenue, net of current
portion 6,006 54,297
Long-term debt, net 79,080 125,140
Other long-term liabilities 2,314 814
Stockholders' equity:
Common stock 144 143
Additional paid-in capital 756,978 731,044
Accumulated other comprehensive loss (736) (450)
Accumulated deficit (501,461) (522,371)
--------
Total stockholders' equity 254,925 208,366
------- -------
Total liabilities and stockholders'
equity $474,754 $519,945
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