Halozyme Reports Fourth Quarter and Full Year 2019 Results
SAN DIEGO, Feb. 24, 2020 /PRNewswire/ -- Halozyme Therapeutics, Inc. (NASDAQ: HALO) today reported financial results for the fourth quarter and full year ended December 31, 2019 and provided an update on its recent corporate activities and outlook.
"I am pleased to report 2020 is off to a strong start as we have substantially completed our actions to reposition the company to focus on ENHANZE(®)," said Dr. Helen Torley, president and chief executive officer. "As a result of our decisive actions, we expect to become sustainably profitable in the second quarter. In addition, we anticipate multiple events that will grow the value of our ENHANZE(®) technology in 2020. Both the subcutaneous formulation of Darzalex(®) and the fixed-dose combination of Perjeta(®)-Herceptin(®) are under regulatory review in the U.S. and EU with potential approvals and launches expected this year. We anticipate three ENHANZE(®) pipeline candidates to begin Phase 3 testing, one to begin Phase 2, and at least five new Phase 1 trial starts. With these key developments, a transition to profitability and plans for continued return of capital, Halozyme has never been in a stronger position to deliver value for our shareholders. With a target of 19 products in clinical development or already commercialized by the end of this year, we continue to see the potential for our royalty revenues to achieve $1 billion by 2027."
Fourth Quarter 2019 and Recent Highlights
-- In December, Janssen selected for development with ENHANZE(®) the
targets EGFR and cMET on an exclusive basis as part of the bispecific
antibody (JNJ-61186372), which is being studied in solid tumors.
-- Halozyme recently completed $200 million worth of share repurchases
under the Board of Directors authorized capital return program to
repurchase up to $550 million of the Company's outstanding common stock
over the next three years. This repurchase plan was first authorized by
the Board of Directors in November 2019 and has $350 million remaining
under the authorization. The Company plans to repurchase up to an
additional $150M worth of shares in 2020.
-- In November 2019, Halozyme completed the sale of $460.0 million
aggregate principal amount of Convertible Senior Notes due 2024. A
portion of the net proceeds from the offering were used to repurchase
$200 million of the Company's stock and $26.1 million to repay all
outstanding amounts under loan agreements with Oxford Finance and
Silicon Valley Bank.
-- In November 2019, Halozyme announced strategic actions to reposition the
Company with a focus on its ENHANZE(®) drug delivery technology and
immediately implemented a restructuring following the announcement of
results of the HALO-301 clinical study. Since then, the Company has
completed the majority of the restructuring and remains on track to
become a sustainably profitable company beginning in the second quarter
of 2020.
-- In October 2019, collaboration partner Roche nominated one new
undisclosed target to be studied utilizing the ENHANZE(®) technology,
triggering a $10 million milestone payment to Halozyme.
-- In October 2019, collaboration partner Bristol-Myers Squibb initiated a
Phase 1 study of relatlimab in combination with nivolumab utilizing the
ENHANZE(®) technology.
Fourth Quarter and Full Year 2019 Financial Highlights
-- Revenue for the fourth quarter was $53.7 million compared to $60.2
million for the fourth quarter of 2018. The year-over-year decrease was
primarily driven by a $25 million upfront payment from Roche in the year
ago period 2018 related to the expansion of Roche's collaboration with
Halozyme, partially offset by higher API sales to our partners in the
current period. Revenue for the quarter included $17.2 million in
royalties, which compared to $19.3 million in the prior year period.
Total revenues for the full year were $196.0 million, compared with
$151.9 million in 2018, representing growth of 29% year over year.
-- Research and development expenses for the fourth quarter were $45.1
million, compared to $36.7 million for the fourth quarter of 2018. The
increase in expenses was due to $17.2 million in restructuring and
one-time charges related to the shift in strategic focus to the
Company's ENHANZE(®) drug delivery technology, partially offset by $9.4
million lower PEGPH20 clinical trial related costs. Research and
development expenses for the full year were $140.8 million, compared
with $150.3 million in 2018.
-- Selling, general and administrative expenses for the fourth quarter were
$23.9 million, compared to $18.0 million for the fourth quarter of 2018.
The increase was due to restructuring and other one-time charges of
$11.2 million, partially offset by lower personnel costs.Selling,
general and administrative expenses for the full year were $77.3
million, compared with $60.8 million in 2018.
-- Net loss for the fourth quarter was $34.4 million, or 0.24 per share,
compared to a net loss in the fourth quarter of 2018 of $2.1 million, or
$0.01 per share. Net loss for the full year was $72.2 million or $0.50
per share, compared to $80.3 million or $0.56 per share in 2018.
-- Cash, cash equivalents and marketable securities were $421.3 million at
December 31, 2019, compared to $354.5 million at December 31, 2018.
Financial Outlook for 2020
Halozyme is reiterating its 2020 financial guidance ranges as first announced on January 14, 2020. For 2020, Halozyme expects:
-- Revenues of $230 million to $245 million, representing growth of 17% to
25%;
-- Earnings per share on a GAAP basis of $0.60 to $0.75 with the first
quarter of sustainable profitability beginning in Q2 2020.
The guidance for earnings per share does not reflect any potential impact from the Company's plans to repurchase an additional number of shares, up to $150 million worth, during 2020. The amount and timing of shares repurchased during 2020 will be subject to a variety of factors including market conditions, other business considerations and applicable legal requirements.
Webcast and Conference Call
Halozyme will webcast its Quarterly Update Conference Call for the fourth quarter of 2019 today, Monday, February 24, 2020 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 1266162.
About Halozyme
Halozyme Therapeutics is a biotechnology company focused on novel biological and drug delivery approaches. Halozyme's proprietary enzyme rHuPH20 is used to facilitate the delivery of injected drugs and fluids and potentially reduce the treatment burden of other drugs to patients. Halozyme has licensed its rHuPH20 technology, called ENHANZE®, to leading pharmaceutical and biotechnology companies including Roche, Baxalta, Pfizer, Janssen, AbbVie, Lilly, Bristol-Myers Squibb, Alexion and argenx. Halozyme derives revenues from these collaborations in the form of milestones and royalties as the Company's partners make progress developing and commercializing their products being developed with ENHANZE®. 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 in this press release include forward-looking statements including, without limitation, statements concerning the Company's expected future financial performance (including the Company's financial outlook for 2020) and expectations for profitability, revenue, expenses and earnings-per-share and the Company's plans to continue its share repurchase program. Forward-looking statements regarding the Company's ENHANZE(®) drug delivery technology may include the possible activity, benefits and attributes of ENHANZE(®), the possible method of action of ENHANZE(®), its potential application to aid in the dispersion and absorption of other injected therapeutic drugs and facilitating more rapid delivery of injectable medications through subcutaneous delivery. Forward-looking statements regarding the Company's ENHANZE(®) business may include potential growth driven by our partners' development and commercialization efforts, potential new ENHANZE(®) collaborations and collaborative targets and regulatory review and potential approvals of new ENHANZE(®) products. These 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 and involve risk and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Actual results could differ materially from the expectations contained in these forward-looking statements as a result of several factors, including unexpected levels of revenues, expenditures and costs, unexpected delays in the execution of the Company's share repurchase program, unexpected results or delays in the growth of the Company's ENHANZE(®) business or in the development, regulatory review or commercialization of ENHANZE(®) products, 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 most recently filed Annual Report on Form 10-K filed with the Securities and Exchange Commission.
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 Twelve Months Ended
2019 2018 2019 2018
---
Revenues:
Royalties $17,230 $19,338 $69,899 $78,981
Product sales, net 22,693 10,681 66,048 28,234
Revenues under collaborative agreements 13,742 30,213 60,045 44,647
---
Total revenues 53,665 60,232 195,992 151,862
Operating expenses:
Cost of product sales 16,688 5,622 45,547 10,136
Research and development 45,111 36,650 140,804 150,252
Selling, general and administrative 23,929 18,031 77,252 60,804
---
Total operating expenses 85,728 60,303 263,603 221,192
---
Operating loss (32,063) (71) (67,611) (69,330)
Other income (expense):
Investment and other income, net 1,333 2,017 6,986 7,578
Interest expense (3,731) (3,755) (11,627) (18,041)
---
Net loss before income taxes (34,461) (1,809) (72,252) (79,793)
Income tax expense (63) 317 (11) 537
---
Net loss $(34,398) $(2,126) $(72,241) $(80,330)
Net loss per share:
Basic and diluted $(0.24) $(0.01) $(0.50) $(0.56)
Diluted $(0.24) $(0.01) $(0.50) $(0.56)
Shares used in computing net loss per share:
Basic and diluted 141,046 144,203 144,329 143,599
Diluted 141,046 144,203 144,329 143,599
===
Halozyme Therapeutics, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
(In thousands)
December
31, December
31,
2019 2018
---
ASSETS
Current assets:
Cash and cash equivalents $120,179 $57,936
Marketable securities, available-for-sale 301,083 296,590
Accounts receivable, net 59,442 30,005
Inventories 29,359 22,625
Prepaid expenses and other assets 33,373 20,693
Total current assets 543,436 427,849
Property and equipment, net 10,855 7,465
Prepaid expenses and other assets 11,083 4,434
Restricted cash 500 500
Total assets $565,874 $440,248
===
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $6,434 $4,079
Accrued expenses 55,649 49,529
Deferred revenue, current portion 4,012 4,247
Current portion of long-term debt, net 19,542 91,506
Total current liabilities 85,637 149,361
Deferred revenue, net of current portion 1,247 5,008
Long-term debt, net 383,045 34,874
Other long-term liabilities 4,180 2,118
Stockholders' equity:
Common stock 137 145
Additional paid-in capital 695,066 780,457
Accumulated other comprehensive income (loss) 240 (277)
Accumulated deficit (603,678) (531,438)
Total stockholders' equity 91,765 248,887
Total liabilities and stockholders' equity $565,874 $440,248
===
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SOURCE Halozyme Therapeutics, Inc.
