Halozyme Reports First Quarter 2020 Results
SAN DIEGO, May 11, 2020 /PRNewswire/ -- Halozyme Therapeutics, Inc. (NASDAQ: HALO) today reported financial results for the first quarter ended March 31, 2020 and provided an update on its recent corporate activities and outlook.
"This has been a very exciting start to the year for Halozyme as we have achieved multiple value-creating events in our ENHANZE(®) business, including U.S. FDA approval for DARZALEX FASPRO(TM ) with a broad set of label indications, and the receipt of a positive CHMP opinion in the EU, also recommending a broad set of label indications. The positive CHMP opinion is typically a precursor to marketing clearance," said Dr. Helen Torley, president and chief executive officer. "As we look ahead, we are excited about the launches of subcutaneous DARZALEX(®) in the U.S. and E.U. as well as the potential FDA approval of the subcutaneous fixed-dose combination of Perjeta(®) and Herceptin(®) later this year, and what they may mean for patients."
"I want to express my gratitude to the Halozyme team, our partners and suppliers for our continued progress in spite of the challenges posed by COVID-19," continued Dr. Torley. "In light of these challenges, it is obviously difficult to predict how the pandemic recovery will unfold in the coming quarters. However, based on the latest information from our partners and suppliers, and our team's commitment to maintaining a lean operating structure, we feel confident maintaining our 2020 financial guidance at this time."
First Quarter 2020 and Recent Highlights Include:
-- On May 1, the Company announced that The Janssen Pharmaceutical
Companies of Johnson and Johnson received U.S. FDA approval of DARZALEX
FASPRO(TM) in four regimens across five indications in multiple myeloma
patients, including newly diagnosed, transplant-ineligible patients as
well as relapsed or refractory patients. As a fixed-dose formulation,
DARZALEX FASPRO(TM) can be administered subcutaneously over three to
five minutes, significantly less time than IV DARZALEX which requires
multi-hour infusions.
-- On April 30, the Company announced that Janssen-Cilag International NV
(Janssen) received a Committee for Medicinal Products for Human Use
(CHMP) Positive Opinion from the European Medicines Agency (EMA)
recommending approval of a DARZALEX(®) (daratumumab) subcutaneous (SC)
formulation for the treatment of adult patients with multiple myeloma in
frontline and relapsed/refractory settings. The CHMP's Positive Opinion
for daratumumab SC formulation applies to multiple current daratumumab
indications including newly diagnosed and transplant-ineligible
patients, as well as relapsed or refractory patients.
-- In April, the Company announced the submission of a New Drug Application
(NDA) to Japan's Ministry of Health, Labour and Welfare (MHLW) by
Janssen Pharmaceutical K.K. (Janssen) seeking approval of a new
subcutaneous (SC) formulation of daratumumab, an intravenous (IV)
treatment approved for patients with multiple myeloma.
-- During the first quarter, the Company repurchased 3.2 million shares of
its common stock at a weighted average price of $16.15 per share. These
repurchased shares were in addition to shares repurchased as part of an
Accelerated Share Repurchase plan that was completed in mid-February. To
date the Company has repurchased over $250 million in shares as part of
its three-year share repurchase authorization of up to $550 million
approved by the Board in November 2019.
-- In February, the Company announced that the FDA has accepted a Biologics
License Application (BLA) from Genentech, a member of the Roche Group,
for the fixed-dose combination of pertuzumab (Perjeta(®)) and
trastuzumab (Herceptin(® )) for subcutaneous administration using
ENHANZE(®) technology in combination with IV chemotherapy for the
treatment of eligible patients with HER2-positive breast cancer, with an
action date of October 18, 2020.
First Quarter 2020 Financial Highlights
-- Revenue for the first quarter was $25.4 million compared to $56.9
million for the first quarter of 2019. The year-over-year decrease was
primarily driven by a $30 million upfront payment from argenx in the
prior year period. Revenue for the quarter included $16.8 million in
royalties, which compared to $18.0 million in the prior year period.
-- Research and development expenses for the first quarter were $10.2
million, compared to $31.3 million for the first quarter of 2019. The
decrease in expenses was due to a decrease in clinical trial
activities-related costs as a result of the Company halting its oncology
drug development efforts and related restructuring as announced in
November 2019.
-- Selling, general and administrative expenses for the first quarter were
$12.6 million, compared to $18.0 million for the first quarter of 2019.
The decrease was due to lower compensation and commercial-related
expenses related to the corporate restructuring announced in November
2019.
-- Net loss for the first quarter was $6.1 million, or $0.04 per share,
compared to a net income in the first quarter of 2019 of $1.8 million,
or $0.01 per share.
-- Cash, cash equivalents and marketable securities were $368.2 million at
March 31, 2020, compared to $421.3 million at December 31, 2019.
Financial Outlook for 2020
The Company continues to monitor the impact of the COVID-19 pandemic on its business and receive updates from its partners and suppliers on how their businesses are affected. Based on this information and Halozyme's planned expenditures for the year, the Company's 2020 financial guidance remains unchanged from that first provided on January 14, 2020. For 2020 Halozyme continues to expect:
-- 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 on earnings per share does not reflect any potential impact from the Company's plans to repurchase any additional number of shares, up to an additional $98 million worth, during the remainder of 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 first quarter of 2020 today, Monday, May 11, 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 (833) 968-2181 (domestic callers) or (825) 312-2108 (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 3199114.
About Halozyme
Halozyme is a biopharmaceutical company bringing disruptive solutions to significantly improve patient experiences and outcomes for emerging and established therapies. Halozyme advises and supports its biopharmaceutical partners in key aspects of new drug development with the goal of improving patients' lives while helping its partners achieve global commercial success. As the innovators of the ENHANZE® technology, which can reduce hours-long treatments to a matter of minutes, Halozyme's commercially-validated solution has positively impacted more than 400,000 patient lives via three commercialized products across more than 100 global markets. Halozyme and its world-class partners are currently advancing multiple therapeutic programs intended to deliver innovative therapies, with the potential to improve the lives of patients around the globe. Halozyme's proprietary enzyme rHuPH20 forms the basis of the ENHANZE(®) technology and is used to facilitate the delivery of injected drugs and fluids, potentially reducing the treatment burden of other drugs to patients. Halozyme has licensed its ENHANZE(®) technology 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, including any potential delays caused by the current COVID-19 global pandemic, regulatory approval requirements, unexpected adverse events or patient outcomes 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
March 31,
2020 2019
Revenues:
Royalties $
16,822 $
17,953
Product sales, net 8,147 8,390
Revenues under collaborative
agreements 385 30,606
Total revenues 25,354 56,949
Operating expenses:
Cost of product sales 5,787 4,649
Research and development 10,158 31,328
Selling, general and administrative 12,632 18,006
Total operating expenses 28,577 53,983
Operating (loss) income (3,223) 2,966
Other income (expense):
Investment and other income, net 2,479 2,057
Interest expense (5,348) (3,205)
Net (loss) income before income taxes (6,092) 1,818
Income tax expense 11 22
Net (loss) income $
(6,103) $
1,796
Net (loss) income per share:
Basic $
(0.04) $
0.01
Diluted $
(0.04) $
0.01
Shares used in computing net (loss)
income per share:
Basic 137,186 144,743
Diluted 137,186 147,474
Halozyme Therapeutics, Inc
Condensed Consolidated Balance Sheets
(Unaudited)
(In thousands)
March 31, December 31,
2020 2019
ASSETS
Current assets:
Cash and cash equivalents $
104,820 $
120,179
Marketable securities, available-for-
sale 263,363 301,083
Accounts receivable, net 29,749 59,442
Inventories 41,452 29,359
Prepaid expenses and other assets 28,587 33,373
Total current assets 467,971 543,436
Property and equipment, net 11,752 10,855
Prepaid expenses and other assets 12,130 11,083
Restricted cash 500 500
Total assets $
492,353 $
565,874
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $
8,320 $
6,434
Accrued expenses 26,811 55,649
Deferred revenue, current portion 4,012 4,012
Current portion of long-term debt,
net 2,859 19,542
Total current liabilities 42,002 85,637
Deferred revenue, net of current
portion 641 1,247
Long-term debt, net 386,571 383,045
Other long-term liabilities 5,097 4,180
Stockholders' equity:
Common stock 135 137
Additional paid-in capital 667,677 695,066
Accumulated other comprehensive income
(loss) 11 240
Accumulated deficit (609,781) (603,678)
Total stockholders' equity 58,042 91,765
Total liabilities and stockholders'
equity $
492,353 $
565,874
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SOURCE Halozyme Therapeutics, Inc.
