Halozyme Reports Second Quarter 2019 Results
SAN DIEGO, Aug. 6, 2019 /PRNewswire/ -- Halozyme Therapeutics, Inc. (NASDAQ: HALO), a biotechnology company developing novel oncology and drug-delivery therapies, today reported financial results for the second quarter ended June 30, 2019 and provided an update on recent corporate activities.
"We are very pleased with the strong progress in both pillars of our business in 2019," said Dr. Helen Torley, president and chief executive officer. "ENHANZE(® )progress included Janssen recently submitting regulatory applications to the U.S. Food and Drug Administration and the European Medicines Agency, and our most recently announced partner, argenx, initiating its first phase 1 study utilizing the ENHANZE(®) drug delivery technology. In addition, we remain focused on PEGPH20, where our HALO-301 pivotal phase 3 trial in metastatic front-line pancreas cancer is on track for the announcement of topline results by December 2019."
Second Quarter 2019 and Recent Highlights Include:
-- In July 2019, ENHANZE(®) collaborator Janssen Biotech, Inc. (Janssen)
submitted a Biologics License Application to the U.S. Food and Drug
Administration and an extension application to the European Medicines
Agency for the subcutaneous delivery of DARZALEX(®) (daratumumab) for
patients with multiple myeloma. Janssen's regulatory submissions
followed the announcement and subsequent presentation of positive
results from its phase 3 COLUMBA study at the American Society of
Clinical Oncology Annual Meeting in June 2019. The COLUMBA study
investigated subcutaneously administered DARZALEX(®) in comparison to
intravenous DARZALEX(®) in patients with relapsed or refractory
multiple myeloma.
-- In July 2019, argenx dosed the first subject in a phase 1 clinical trial
evaluating the safety, pharmacokinetics and pharmacodynamics of
efgartigimod (ARGX-113), using Halozyme's proprietary ENHANZE(®) drug
delivery technology, triggering a $5 million payment to Halozyme.
Additionally, in May 2019, argenx nominated a second target to be
studied using ENHANZE(®) technology, a human complement factor C2
associated with the product candidate ARGX-117, which is being developed
to treat severe autoimmune diseases, triggering a $10 million payment to
Halozyme.
-- In June 2019, the target number of 330 overall survival events in the
HALO-301 clinical trial was reached. The company plans to conduct the
final overall survival analysis upon data maturity which will occur when
all patients enrolled in the study have been followed for at least 8.5
months. Accordingly, data maturity is projected to be achieved in
mid-September 2019. Based on this timing of data maturity, the company
expects to announce topline results for the HALO-301 clinical trial by
December 2019.
-- In June 2019, a Cooperative Research and Development Agreement (CRADA)
was announced with the National Institute of Allergy and Infectious
Diseases' Vaccine Research Center (VRC), part of the National Institute
of Health, enabling the VRC's use of ENHANZE(®) technology to develop
subcutaneous formulations of broadly neutralizing antibodies (bnAbs)
against HIV for HIV treatment.
Second Quarter 2019 Financial Highlights
-- Revenue for the second quarter was $39.1 million compared to $35.2
million for the second quarter of 2018. The year-over-year increase was
primarily driven by higher ENHANZE(®) license payments. Revenue for the
quarter included $18.1 million in royalties and $5.8 million in product
sales, which compared to $20.0 million and $4.5 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 and higher sales of
HyQvia by Takeda.
-- Research and development expenses for the second quarter were $33.9
million, compared to $40.1 million for the second 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 second quarter were
$17.3 million, compared to $14.4 million for the second quarter of 2018.
The increase is related to an increase in personnel expenses as well as
preparations for the potential commercial launch of PEGPH20.
-- Net loss for the second quarter was $14.6 million, or $0.10 per share,
compared to a net loss in the second quarter of 2018 of $22.9 million,
or $0.16 per share.
-- Cash, cash equivalents and marketable securities were $287.5 million at
June 30, 2019, compared to $354.5 million at December 31, 2018.
Financial Outlook for 2019
Halozyme is updating its 2019 financial guidance ranges:
-- Total revenues unchanged from prior guidance of $205 million to $215
million, including revenue from royalties of $72 million to $74 million;
-- Operating expenses of $255 million to $265 million, down from prior
guidance of $265 million to $275 million, or operating expenses
excluding cost of goods sold $215 million to $225 million, down from
prior guidance of $225 million to $235 million;
-- Operating cash burn of $40 million to $50 million, down from prior
guidance of $45 million to $55 million;
-- Debt repayment of approximately $90 million; the company now expects to
pay off the remainder of the royalty-backed debt by the end of the
second quarter of 2020;
-- Year-end cash, cash equivalents and marketable securities balance of
$220 million to $230 million, up from prior guidance 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 second quarter of 2019 today, Tuesday, August 6, 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 (877) 824-0907 (domestic callers) or (647) 689-5655 (international callers). A telephone replay will be available after the call by dialing (800) 585-8367 (domestic callers) or (416) 621-4642 (international callers) using replay ID number 5549627.
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 August 6, 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
Six Months Ended
June 30, June 30,
2019 2018 2019 2018
Revenues:
Royalties $
18,107 $
19,989 $
36,060 $
40,933
Product sales, net 5,760 4,483 14,150 11,284
Revenues under collaborative
agreements 15,281 10,730 45,887 13,857
Total revenues 39,148 35,202 96,097 66,074
Operating expenses:
Cost of product sales 1,877 836 6,526 3,888
Research and development 33,910 40,086 65,238 78,062
Selling, general and administrative 17,338 14,353 35,344 27,909
Total operating expenses 53,125 55,275 107,108 109,859
Operating loss (13,977) (20,073) (11,011) (43,785)
Other income (expense):
Investment and other income, net 1,983 1,983 4,040 3,651
Interest expense (2,613) (4,770) (5,818) (10,000)
Net loss before income taxes (14,607) (22,860) (12,789) (50,134)
Income tax expense 17 33 39 220
Net loss $
(14,624) $
(22,893) $
(12,828) $
(50,354)
Net loss per share:
Basic and diluted $
(0.10) $
(0.16) $
(0.09) $
(0.35)
Shares used in computing net loss per
share:
Basic and diluted 145,411 143,568 145,051 143,114
Halozyme Therapeutics, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
(In thousands)
June 30, December 31,
2019 2018
ASSETS
Current assets:
Cash and cash equivalents $
67,041 $
57,936
Marketable securities, available-for-
sale 220,424 296,590
Accounts receivable, net and other
contract assets 32,219 30,005
Inventories 43,900 22,625
Prepaid expenses and other assets 28,122 20,693
Total current assets 391,706 427,849
Property and equipment, net 15,079 7,465
Prepaid expenses and other assets 10,545 4,434
Restricted cash 500 500
Total assets $
417,830 $
440,248
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $
12,467 $
4,079
Accrued expenses 45,561 49,529
Deferred revenue, current portion 6,511 4,247
Current portion of long-term debt, net 70,878 91,506
Total current liabilities 135,417 149,361
Deferred revenue, net of current
portion 1,746 5,008
Long-term debt, net 14,083 34,874
Other long-term liabilities 6,532 2,118
Stockholders' equity:
Common stock 146 145
Additional paid-in capital 803,782 780,457
Accumulated other comprehensive income
(loss) 390 (277)
Accumulated deficit (544,266) (531,438)
Total stockholders' equity 260,052 248,887
Total liabilities and stockholders'
equity $
417,830 $
440,248
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SOURCE Halozyme Therapeutics, Inc.
