Halozyme Reports First Quarter 2019 Results
SAN DIEGO, May 7, 2019 /PRNewswire/ -- Halozyme Therapeutics, Inc. (NASDAQ: HALO), a biotechnology company developing novel oncology and drug-delivery therapies, today reported financial results for the first quarter ended March 31, 2019 and provided an update on recent corporate activities.
"We enjoyed a strong start to 2019 as our first quarter included a new ENHANZE(®) collaboration with argenx, positive phase III data from Janssen's COLUMBA study evaluating a subcutaneous formulation of DARZALEX(®), and FDA approval of Herceptin Hylecta(TM)," said Dr. Helen Torley, president and chief executive officer. "Looking ahead in 2019, we expect this momentum to continue. On ENHANZE(®) we anticipate regulatory submissions by ENHANZE(®) partner Janssen for the subcutaneous formulation of DARZALEX(®), a new phase 3 trial initiation by one of our ENHANZE(®) partners and multiple Phase 1 trial initiations. On PEGPH20, we project the announcement of topline results from our HALO-301 pivotal phase 3 trial in pancreas cancer in the second half of the year."
First Quarter 2019 and Recent Highlights Include:
-- In February 2019, we announced that Genentech, a member of the Roche
Group, received approval from the FDA for Herceptin Hylecta(TM), a
co-formulation of trastuzumab and rHuPH20. Herceptin Hylecta(TM) is
approved for the treatment of certain people with HER2-positive early
breast cancer. Herceptin Hylecta(TM) is a ready-to-use formulation that
can be administered in two to five minutes, compared to 30 to 90 minutes
for intravenous trastuzumab. In April 2019, Roche made Herceptin
Hylecta(TM) available in the U.S.
-- In February 2019, Janssen's development partner, Genmab, announced
positive Phase 3 trial results from the COLUMBA study. The study
evaluated subcutaneous DARZALEX(®) in comparison to DARZALEX(®) IV in
patients with relapsed and refractory multiple myeloma. DARZALEX(®) SC,
using ENHANZE(®) drug delivery technology, was found to be non-inferior
to DARZALEX(®) IV with regard the co-primary endpoints of Overall
Response Rate and Maximum Trough concentration on day 1 of the third
treatment cycle. Additional data from this trial will be presented at
the American Society of Clinical Oncology (ASCO) Annual Meeting in
Chicago at an oral presentation on Sunday, June 2, 2019.
-- In February 2019, we entered into a collaboration agreement with argenx
for the right to develop and commercialize one exclusive target, the
human neonatal Fc receptor FcRn, which includes argenx's lead asset
efgartigimod (ARGX-113), and an option to select two additional targets
using our ENHANZE(®) technology for an upfront payment of $30.0
million. We will receive payments of $10.0 million per target for future
target nominations and potential milestone payments of up to $160.0
million per target, subject to the achievement of specific development,
regulatory and sales-based milestones. We will receive mid-single digit
royalties on sales of commercialized products.
-- With regard to HALO-301, a Phase 3 study evaluating PEGPH20 in
metastatic pancreas cancer, the company now expects to achieve the
target number of overall survival (OS) events in the third quarter of
2019. The company plans to initiate the database lock process for final
analysis after 330 OS events have been achieved with mature data. As a
result, the company expects topline results will be available in the
second half of 2019.
First Quarter 2019 Financial Highlights
-- Revenue for the first quarter was $56.9 million compared to $30.9
million for the first quarter of 2018. The year-over-year increase was
primarily driven by $30.0 million in upfront license fees for the argenx
collaboration. Revenue for the quarter included $18.0 million in
royalties and $8.4 million in product sales, which compared to $20.9
million and $6.8 million, respectively, in the prior year period. The
decrease in royalties was mainly driven by lower sales of Herceptin(®)
SC by Roche, partially offset by higher sales of RITUXAN HYCELA(TM) in
the U.S. by Roche.
-- Research and development expenses for the first quarter were $31.3
million, compared to $38.0 million for the first quarter of 2018. The
decline in expenses was driven by reduced clinical trial activity due to
the completion of enrollment in HALO-301.
-- Selling, general and administrative expenses for the first quarter were
$18.0 million, compared to $13.6 million for the first quarter of 2018.
The increase is related to an increase in personnel expenses, including
stock based compensation as well as preparations for the potential
commercial launch of PEGPH20.
-- Net income for the first quarter was $1.8 million, or $0.01 per share,
compared to a net loss in the first quarter of 2018 of $27.5 million, or
$0.19 per share.
-- Cash, cash equivalents and marketable securities were $328.7 million at
March 31, 2019, compared to $354.5 million at December 31, 2018.
Financial Outlook for 2019
Halozyme reiterates its overall 2019 financial guidance while lowering the anticipated contribution from royalties and increasing the anticipated contribution from products sales related to API. For 2019, Halozyme now expects:
-- Net revenue of $205 million to $215 million;
-- Revenue from royalties of $72 million to $74 million, with the
decrease primarily attributable to the ongoing impact from
biosimilars in Europe and updated expectations for the US launched
products;
-- Product sales related to API increased to reflect additional
customer orders;
-- Operating expenses of $265 million to $275 million, or $225 million to
$235 million excluding an expected increase in cost of goods sold;
-- Operating cash burn of $45 million to $55 million;
-- Debt repayment of approximately $90 million, the company expects to pay
off the remainder of the royalty-backed debt by the end of the first
quarter of 2020;
-- Year-end cash, cash equivalents and marketable securities balance of
$210 million to $220 million.
This guidance continues to exclude revenue from any potential, new ENHANZE(®) global collaboration and licensing agreements.
Webcast and Conference Call
Halozyme will webcast its Quarterly Update Conference Call for the first quarter of 2019 today, Tuesday, May 7, 2019 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 replay will be 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 (866) 393-4306 (domestic callers) or (734) 385-2616 (international callers). A telephone replay will be available after the call by dialing (855) 859-2056 (domestic callers) or (404) 537-3406 (international callers) using replay ID number 3076769.
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 the treatment of several cancers and has the potential to be used 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, Alexion and argenx 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 future growth, revenue and milestone and other potential payments from collaboration partners, 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 2019) 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 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 7, 2019.
Contact:
Al Kildani
Vice President, Investor Relations and Corporate Communications
858-704-8122
ir@halozyme.com
Halozyme Therapeutics, Inc.
Condensed Consolidated Statements of Operations
(Unaudited)
(In thousands, except per share amounts)
Three Months Ended
March 31,
2019 2018
Revenues:
Royalties $
17,953 $
20,944
Product sales, net 8,390 6,801
Revenues under collaborative
agreements 30,606 3,127
Total revenues 56,949 30,872
Operating expenses:
Cost of product sales 4,649 3,052
Research and development 31,328 37,976
Selling, general and administrative 18,006 13,556
Total operating expenses 53,983 54,584
Operating income (loss) 2,966 (23,712)
Other income (expense):
Investment and other income, net 2,057 1,668
Interest expense (3,205) (5,230)
Net income (loss) before income taxes 1,818 (27,274)
Income tax expense 22 187
Net income (loss) $
1,796 $
(27,461)
Net income (loss) per share:
Basic $
0.01 $
(0.19)
Diluted $
0.01 $
(0.19)
Shares used in computing net income
(loss) per share:
Basic 144,743 142,656
Diluted 147,474 142,656
Halozyme Therapeutics, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
(In thousands)
March 31, December 31,
2019 2018
ASSETS
Current assets:
Cash and cash equivalents $
60,595 $
57,936
Marketable securities, available-for-
sale 268,122 296,590
Accounts receivable, net 28,164 30,005
Inventories 31,241 22,625
Prepaid expenses and other assets 20,914 20,693
Total current assets 409,036 427,849
Property and equipment, net 14,542 7,465
Prepaid expenses and other assets 5,031 4,434
Restricted cash 500 500
Total assets $
429,109 $
440,248
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $
4,089 $
4,079
Accrued expenses 43,663 49,529
Deferred revenue, current portion 4,247 4,247
Current portion of long-term debt, net 86,663 91,506
Total current liabilities 138,662 149,361
Deferred revenue, net of current portion 4,509 5,008
Long-term debt, net 18,742 34,874
Other long-term liabilities 7,149 2,118
Stockholders' equity:
Common stock 145 145
Additional paid-in capital 789,483 780,457
Accumulated other comprehensive income
(loss) 61 (277)
Accumulated deficit (529,642) (531,438)
Total stockholders' equity 260,047 248,887
Total liabilities and stockholders'
equity $
429,109 $
440,248
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SOURCE Halozyme Therapeutics, Inc.
