Halozyme Reports Fourth Quarter 2020 Results And Full Year 2020 Results

SAN DIEGO, Feb. 23, 2021 /PRNewswire/ -- Halozyme Therapeutics, Inc. (NASDAQ: HALO) today reported financial results for the fourth quarter and full year ended December 31, 2020 and provided an update on its recent corporate activities and outlook.

"The fourth quarter capped an extraordinary year for Halozyme during which we transitioned to a profitable, high-growth company with strong prospects for continued growth over the long-term," said Dr. Helen Torley, president and chief executive officer. "Our strong growth prospects are fueled by recent product approvals for subcutaneous DARZALEX(®) (daratumumab) and Phesgo(®) (pertuzumab, trastuzumab and hyaluronidase) utilizing our ENHANZE(®) technology. Building on our portfolio of 5 commercialized partner products, we project the expansion of our development pipeline, including 4 products being evaluated in 7 phase 3 studies utilizing our ENHANZE(®) technology. We believe this advancing pipeline of products utilizing our ENHANZE(®) technology is setting the potential for multiple waves of future product launches that will deliver long-term growth in revenues, profitability and cash flow."

Fourth Quarter 2020 and Recent Highlights Include:

    --  In February 2021, argenx announced a "go" decision for its ADHERE trial
        evaluating subcutaneous (SC) efgartigimod with ENHANZE(®) technology in
        chronic inflammatory demyelinating polyneuropathy (CIDP). argenx plans
        to continue enrollment to include approximately 130 patients to support
        potential registration of SC efgartigimod for the treatment of CIDP.
    --  In January 2021, ENHANZE(®) partner Janssen Biotech, Inc. (Janssen)
        received U.S. Food and Drug Administration (FDA) accelerated approval of
        DARZALEX FASPRO(® )(daratumumab and hyaluronidase-fihj) in combination
        with bortezomib, cyclophosphamide and dexamethasone (D-VCd) for the
        treatment of adult patients with newly diagnosed light chain (AL)
        amyloidosis. AL amyloidosis is a rare and potentially fatal disease that
        develops when plasma cells in the bone marrow generate abnormal light
        chains, which form amyloid deposits in vital organs and lead to organ
        deterioration. There were previously no approved therapies for the
    --  In January 2021, argenx initiated a Phase 3 study of ARGX-113 with
        ENHANZE(®) technology in pemphigus vulgaris and pemphigus foliaceus,
        rare autoimmune diseases that cause painful blisters on the skin and
        mucous membranes.
    --  In December 2020, argenx initiated a Phase 3 study of ARGX-113 with
        ENHANZE(®) technology for patients with immune thrombocytopenia (ITP),
        an immune disorder in which the blood does not clot normally, resulting
        in a $15 million payment to Halozyme.
    --  In December 2020, Roche initiated a Phase 3 study in patients with
        non-small cell lung cancer for Tecentriq(®) (atezolizumab) with
        ENHANZE(®) technology, resulting in a $17 million payment to Halozyme.
    --  In December 2020, the Company announced that the European Commission
        approved Roche's Phesgo(®), a fixed-dose combination of Perjeta(®
        )(pertuzumab) and Herceptin(®) (trastuzumab) with ENHANZE(®)
        technology, administered by SC injection for the treatment of patients
        with early and metastatic HER2-positive breast cancer. This was the
        first time the European Commission approved a product combining two
        monoclonal antibodies that can be administered by a single SC injection
        utilizing  ENHANZE(®) technology.
    --  In November 2020, the Company announced a global collaboration and
        license agreement that provides Horizon Therapeutics plc exclusive
        access to ENHANZE(®) technology for SC formulation of medicines
        targeting IGF-1R for which the Company received an upfront payment of
        $30 million. Horizon intends to use ENHANZE(®) technology to develop a
        SC formulation of TEPEZZA(® )(teprotumumab-trbw), indicated for the
        treatment of Thyroid Eye Disease, a serious, progressive and
        vision-threatening rare autoimmune disease, potentially shortening drug
        administration time, reducing healthcare practitioner time and offering
        additional flexibility and convenience for patients.
    --  In November 2020, Janssen initiated a Phase 1 study of amivantamab
        utilizing ENHANZE(®) technology in advanced solid tumors.
    --  In November 2020, the Company announced that Janssen submitted
        regulatory applications to the FDA and European Medicines Agency (EMA)
        seeking approval of DARZALEX FASPRO(®) in the U.S. and as DARZALEX(®)
        SC in the European Union (EU) utilizing ENHANZE(®) technology in
        combination with pomalidomide and dexamethasone (D-Pd) for the treatment
        of patients with relapsed or refractory multiple myeloma who have
        received at least one prior line of therapy.
    --  In November 2020, Janssen submitted a Type II variation application to
        the EMA seeking European approval for DARZALEX(®) SC utilizing
        ENHANZE(® )technology to be used in the treatment of patients with AL
    --  In October 2020, the Company announced that argenx expanded its existing
        global collaboration and license agreement that was signed in February
        2019. Under the expansion, argenx gained the ability to exclusively
        access Halozyme's ENHANZE(®) drug delivery technology for three
        additional targets upon nomination for a total of up to six targets. To
        date, argenx has nominated two targets including the human neonatal Fc
        receptor FcRn, which is blocked by efgartigimod, and complement
        component C2.
    --  During the fourth quarter, the Company repurchased approximately 1.1
        million shares of common stock for $37.6 million at an average price per
        share of $34.36, bringing the total 2020  repurchases to $150.0 million
        at an average price of $23.05.

Fourth Quarter and Full Year 2020 Financial Highlights

    --  Revenue for the fourth quarter was $121.7 million compared to $53.7
        million for the fourth quarter of 2019. The year-over-year increase was
        primarily driven by a $30.0 million upfront payment from Horizon, a
        $15.0 million sales milestone from Janssen, an increase in royalty
        revenue following the strong DARZALEX FASPRO(®) launch during the
        second quarter and  an increase in product sales. Revenue for the
        quarter included $32.0 million in royalties, an increase of 86% compared
        to $17.2 million in the prior year period.Total revenues for the full
        year were $267.6 million, compared with $196.0 million in 2019,
        representing growth of 37% year over year.

    --  Research and development expenses for the fourth quarter were $7.4
        million, compared to $45.1 million for the fourth 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 beginning in November 2019 and one-time
        restructuring charges of $17.2 million in the prior year related to the
        shift in strategic focus to the Company's ENHANZE(®)
        technology.Research and development expenses for the full year were
        $34.2 million, compared with $140.8 million in 2019.

    --  Selling, general and administrative expenses for the fourth quarter were
        $10.4 million, compared to $23.9 million for the fourth quarter of 2019.
        The decrease was due to lower compensation and commercial-related
        expenses related to the corporate restructuring announced in November
        2019 and a one-time restructuring charge of $11.2 million in the prior
        year.Selling, general and administrative expenses for the full year were
        $45.7 million, compared with $77.3 million in 2019.

    --  Operating income for the fourth quarter was $77.6 million, compared to
        an operating loss of $32.1 million in the fourth quarter of
        2019.Operating income for the full year was $144.3 million, compared to
        an operating loss of $67.6 million in 2019.

    --  Net income for the fourth quarter was $73.2 million, or $0.50 per share,
        compared to a net loss in the fourth quarter of 2019 of $34.4 million,
        or loss of $0.24 per share.Net income for the full year was $129.1
        million or $0.91 per share, compared to a net loss of $72.2 million or
        loss of $0.50 per share in 2019.
    --  Cash, cash equivalents and marketable securities were $368.0 million at
        December 31, 2020, compared to $421.3 million at December 31, 2019.
    --  During 2020, the Company repurchased 6.5 million shares of common stock
        for $150 million at an average price of $23.05, bringing the total for
        share repurchases since the announcement of the Company's three-year
        share repurchase program to $350.0 million at an average price of

Financial Outlook for 2021

Based on the latest information from collaboration partners and planned expenditures for the year, the Company expects:

    --  Revenues of $375 million to $395 million, representing year-over-year
        growth of 40%-48%, with revenues from royalties projected to
        approximately double versus 2020;
    --  Operating Income of $215 million to $235 million, representing
        year-over-year growth of 49%-63%;
    --  Earnings per share on a GAAP basis of $1.40 to $1.55, representing
        year-over-year growth of 54%-70%.

The Company plans to repurchase up to $125 million in common stock during 2021 as part of the $550 million three-year share repurchase plan authorized by Halozyme's board of directors in 2019. The amount and timing of shares to be repurchased in 2021 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 2020 today, Tuesday, February 23, 2021 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 register for this conference call, please use this link: http://www.directeventreg.com/registration/event/7096809. After registering, you will receive an email confirmation that includes dial in details and unique conference call codes for entry. Registration is open through the live call. However, to ensure you are connected for the full call, we suggest registering a day in advance or at minimum 10 minutes before the start of the call.

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 five 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, argenx and Horizon Therapeutics. 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 2021) and expectations for future growth, profitability, revenue, operating income, cash flow, 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, the size and growth prospects of our partners' drug franchises, 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, inability to sustain profitability, 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.

Al Kildani
Vice President, Investor Relations and Corporate Communications

              Halozyme Therapeutics, Inc

              Condensed Consolidated Statements of Operations


              (In thousands, except per share amounts)

                                                               Three Months Ended                                           Twelve Months Ended

          December 31,                            
              December 31,

                                                     2020                            2019                               2020                  2019



     Royalties                                           $
       31,997                                        $
            17,230                        $
         88,596     $

     Product sales, net                           32,455                            22,693                                        55,987                    66,048

      Revenues under collaborative
       agreements                                  57,251                            13,742                                       123,011                    60,045

     Total revenues                              121,703                            53,665                                       267,594                   195,992

     Operating expenses:

     Cost of product sales                        26,272                            16,687                                        43,367                    45,546

      Research and development                      7,380                            45,111                                        34,236                   140,804

      Selling, general and
       administrative                              10,427                            23,929                                        45,736                    77,252

      Total operating expenses                     44,079                            85,727                                       123,339                   263,602

      Operating income (loss)                      77,624                          (32,062)                                       144,255                  (67,610)

     Other income (expense):

      Investment and other income,
       net                                            661                             1,333                                         5,425                     6,986

     Interest expense                            (5,036)                          (3,731)                                     (20,378)                  (11,627)

      Net income (loss) before income
       taxes                                       73,249                          (34,460)                                       129,302                  (72,251)

     Income tax expense                               85                              (63)                                          217                      (11)

     Net income (loss)                                   $
       73,164                                      $
            (34,397)                      $
         129,085   $

     Net income (loss) per share:

     Basic                                                 $
       0.54                                        $
            (0.24)                         $
         0.95     $

     Diluted                                               $
       0.50                                        $
            (0.24)                         $
         0.91     $

      Shares used in computing net income (loss) per

     Basic                                       135,107                           141,046                                       136,206                   144,329

     Diluted                                     145,122                           141,046                                       141,463                   144,329

                Halozyme Therapeutics, Inc

                Condensed Consolidated Balance Sheets


                (In thousands)

                                                                      December 31,                                  December 31,

                                                                              2020                           2019



     Current assets:

      Cash and cash equivalents                                                      $
              147,703                        $

      Marketable securities,
       available-for-sale                                                  220,310                          301,083

      Accounts receivable, net and
       other contract assets                                                97,730                           59,442

     Inventories                                                           60,747                           29,359

      Prepaid expenses and other
       assets                                                               28,274                           33,373

     Total current assets                                                 554,764                          543,436

      Property and equipment, net                                           10,593                           10,855

      Prepaid expenses and other
       assets                                                               14,067                           11,083

     Restricted cash                                                          500                              500

     Total assets                                                                   $
              579,924                        $

                               LIABILITIES AND STOCKHOLDERS' EQUITY

     Current liabilities:

     Accounts payable                                                                 $
              1,928                          $

     Accrued expenses                                                      20,483                           55,649

      Deferred revenue, current
       portion                                                               1,746                            4,012

      Current portion of long-term
       debt, net                                                           397,228                           19,542

      Total current liabilities                                            421,385                           85,637

      Deferred revenue, net of current
       portion                                                               4,026                            1,247

     Long-term debt, net                                                        -                         383,045

      Other long-term liabilities                                            3,466                            4,180

     Stockholders' equity:

     Common stock                                                             135                              137

      Additional paid-in capital                                           625,483                          695,066

      Accumulated other comprehensive
       income (loss)                                                            22                              240

     Accumulated deficit                                                (474,593)                       (603,678)

      Total stockholders' equity                                           151,047                           91,765

      Total liabilities and
       stockholders' equity                                                          $
              579,924                        $

View original content to download multimedia:http://www.prnewswire.com/news-releases/halozyme-reports-fourth-quarter-2020-results-and-full-year-2020-results-301233889.html

SOURCE Halozyme Therapeutics, Inc.