SAN DIEGO, Nov. 7, 2017
/PRNewswire/ -- Halozyme Therapeutics, Inc. (NASDAQ: HALO), a
biotechnology company developing novel oncology and drug-delivery
therapies, today reported financial results and recent highlights
for the third quarter ended September
30.
"During the third quarter, we realized clear benefits from
strategies we have been executing against in both the ENHANZE and
PEGPH20 pillars of our business," said Dr. Helen Torley, president and chief executive
officer. "On ENHANZE we significantly increased 2017 revenue and
the potential future value of the technology with the signing of
the landmark collaboration agreement with Bristol-Myers Squibb for
development of up to 11 immuno-oncology targets, and with the
expansion of our collaboration agreement with Roche. In addition,
our partner Janssen took an important step towards the
commercialization of a subcutaneous formulation of
Darzalex® with the initiation of a Phase 3 study.
"In our PEGPH20 pillar, investigator interest remains strong in
our HALO-301 study, resulting in continued progress with
enrollment. An interim analysis will be conducted for the first
primary endpoint of progression-free survival when we achieve the
target number of events, which we project will occur in late Q4
2018."
Third Quarter 2017 and Recent Highlights include:
- Announcing a Global Collaboration and License Agreement with
Bristol-Myers Squibb to develop subcutaneously administered
Bristol-Myers Squibb immuno-oncology medicines using Halozyme's
ENHANZE drug-delivery technology. The agreement is the largest in
company history including a $105
million upfront payment and $160
million in potential milestones for each of 11
immuno-oncology targets, including the initial target selection of
programmed death 1 (PD-1).
- Roche licensing a new ENHANZE target in exchange for a
$30 million upfront payment and up to
$160 million in potential
development, regulatory and sales-based milestones. The agreement
serves as an extension to the original collaboration between the
companies, under which Roche has developed two subcutaneous
formulations of cancer drugs for markets worldwide.
- Janssen initiating the first of three planned Phase 3
studies of the subcutaneous formulation of DARZALEX®
(daratumumab). Halozyme's ENHANZE technology has the potential
to enable a 15 ml injection to be delivered in five minutes or
less, with no requirement for an intravenous loading dose. Data
informing this decision from the Phase 1 PAVO study in patients
with relapsed or refractory multiple myeloma were accepted for
presentation at the 2017 American Society of Hematology Annual
Meeting and Exposition. Upon the dosing of the third patient in the
recently initiated study, Halozyme will earn a $15 million milestone payment.
- Genentech launching RITUXAN HYCELA™
(rituximab/hyaluronidase human) for subcutaneous injection, a
combination of rituximab and Halozyme's hyaluronidase human ENHANZE
technology, for patients with follicular lymphoma, diffuse large
B-cell lymphoma and chronic lymphocytic leukemia.
- Continued progress screening and enrolling patients in the
HALO-301 study of PEGPH20 in combination with
ABRAXANE® (nab-paclitaxel) and gemcitabine in first line
metastatic pancreas cancer patients with high levels of tumor
hyaluronan (HA-High). An interim analysis will be conducted for the
first primary endpoint of progression-free survival when the target
number of events has been reached, which the company projects will
be in late Q4 2018. At that time, Halozyme projects approximately
500 patients will have been enrolled in the study.
- Initiating multiple trials in collaboration with Genentech
to evaluate PEGPH20 in combination with
TECENTRIQ® (atezolizumab) in four tumor
types. Studies include a Halozyme-sponsored randomized clinical
trial in patients with previously untreated, unresectable, locally
advanced, or metastatic cholangiocarcinoma and gallbladder
adenocarcinoma and two Genentech-funded and operated, Phase 1b/2
multi-arm clinical studies evaluating patients with previously
treated metastatic pancreatic ductal adenocarcinoma and previously
treated locally advanced unresectable or metastatic gastric cancer.
The studies are part of a clinical collaboration agreement
announced in 2016 to evaluate PEGPH20 and atezolizumab in up to
eight tumor types.
Third Quarter 2017 Financial Highlights
- Revenue for the third quarter was $63.7
million compared to $31.9
million for the third quarter of 2016. The year-over-year
increase was driven by a $30 million
upfront payment from Roche and growth in royalties from partner
sales of Herceptin® (trastuzumab) SC,
MabThera® (rituximab) SC and HYQVIA® (Immune
Globulin Infusion 10% (Human) with Recombinant Human Hyaluronidase)
offset by a decrease in research and development reimbursements and
license payments from ENHANZE partners. Revenue for the third
quarter included $17.1 million in
royalties, an increase of 31 percent from the prior-year period,
$9.8 million in sales of bulk rHuPH20
primarily for use in manufacturing collaboration products and
$3.8 million in HYLENEX®
recombinant (hyaluronidase human injection) product sales.
- Research and development expenses for the third quarter were
$34.0 million, compared to
$33.9 million for the third quarter
of 2016. The increase was primarily due to a ramp in spending
associated with the HALO-301 study.
- Selling, general and administrative expenses for the third
quarter were $13.3 million, compared
to $11.6 million for the third
quarter of 2016. The increase was primarily due to personnel
expenses, including stock compensation, for the period.
- Net income for the third quarter was $2.7 million, or $0.02 per share, compared to net loss in the
third quarter of 2016 of $28.9
million, or $0.23 per
share.
- Cash, cash equivalents and marketable securities were
$316.9 million at September 30, 2017, compared to $297.5 million at June 30,
2017.
Financial Outlook for 2017
Halozyme updated year-end guidance, now expecting:
- Net revenue increasing from the prior range of $245 million to $260 million announced on
Sept. 14 to $265 million to $280 million, driven by stronger
product sales, royalties, and sponsored research;
- Operating expenses decreasing from the prior range of
$240 million to $250 million to
$230 million to $240 million;
- Positive operating cash flow increasing from the prior range of
$50 million to $60 million to
$70 million to $85 million;
- Year-end cash balance increasing from the prior range of
$380 million to $395 million to
$400 million to $415 million.
Webcast and Conference Call
Halozyme will webcast its Quarterly Update Conference Call for
the third quarter of 2017 today, Tuesday,
November 7 at 4:30 p.m.
ET/1:30 p.m. PT. Dr.
Helen Torley, president and chief
executive officer, will lead the call. The call will be webcast
live through the "Investors" section of Halozyme's corporate
website and a recording will be made available following the close
of the call. To access the webcast and additional documents related
to the call, please visit http://www.halozyme.com approximately
fifteen minutes prior to the call to register, download and install
any necessary audio software. The call may also be accessed at
(877) 410-5657 (domestic callers) (334) 323-7224 (international
callers) using passcode 769890. A telephone replay will be
available after the call by dialing (877) 919-4059 (domestic
callers) or (334) 323-0140 (international callers) using replay ID
number 19320711.
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 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 metastatic
pancreatic cancer, non-small cell lung cancer, gastric cancer,
metastatic breast cancer and has potential across additional
cancers 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 and Bristol-Myers Squibb 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 growth in 2017, entering into new collaboration
agreements, 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 2017)
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 delays in entering into new collaboration
agreements, unexpected results or delays in development of product
candidates, including delays in clinical trial patient enrollment
and 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 November 7, 2017.
Halozyme
Therapeutics, Inc.
|
Condensed
Consolidated Statements of Operations
|
(Unaudited)
|
(In thousands,
except per share amounts)
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
September
30,
|
|
September
30,
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Revenues:
|
|
|
|
|
|
|
|
|
Product sales,
net
|
|
$
|
13,589
|
|
|
$
|
13,331
|
|
|
$
|
37,803
|
|
|
$
|
39,970
|
|
Royalties
|
|
17,119
|
|
|
13,036
|
|
|
45,839
|
|
|
36,695
|
|
Revenues under
collaborative agreements
|
|
33,023
|
|
|
5,486
|
|
|
43,407
|
|
|
31,023
|
|
Total
revenues
|
|
63,731
|
|
|
31,853
|
|
|
127,049
|
|
|
107,688
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
Cost of product
sales
|
|
8,332
|
|
|
9,134
|
|
|
23,664
|
|
|
25,204
|
|
Research and
development
|
|
33,993
|
|
|
33,863
|
|
|
109,267
|
|
|
109,493
|
|
Selling, general and
administrative
|
|
13,329
|
|
|
11,599
|
|
|
39,045
|
|
|
33,626
|
|
Total operating
expenses
|
|
55,654
|
|
|
54,596
|
|
|
171,976
|
|
|
168,323
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss)
|
|
8,077
|
|
|
(22,743)
|
|
|
(44,927)
|
|
|
(60,635)
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
Investment and other
income, net
|
|
790
|
|
|
334
|
|
|
1,512
|
|
|
960
|
|
Interest
expense
|
|
(5,538)
|
|
|
(5,253)
|
|
|
(16,526)
|
|
|
(14,378)
|
|
Income (loss) before
income taxes
|
|
3,329
|
|
|
(27,662)
|
|
|
(59,941)
|
|
|
(74,053)
|
|
Income tax
expense
|
|
580
|
|
|
1,284
|
|
|
970
|
|
|
1,584
|
|
Net income
(loss)
|
|
$
|
2,749
|
|
|
$
|
(28,946)
|
|
|
$
|
(60,911)
|
|
|
$
|
(75,637)
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per
share:
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.02
|
|
|
$
|
(0.23)
|
|
|
$
|
(0.45)
|
|
|
$
|
(0.59)
|
|
Diluted
|
|
$
|
0.02
|
|
|
$
|
(0.23)
|
|
|
$
|
(0.45)
|
|
|
$
|
(0.59)
|
|
|
|
|
|
|
|
|
|
|
Shares used in
computing net income (loss) per share:
|
|
|
|
|
|
|
|
|
Basic
|
|
141,190
|
|
|
128,154
|
|
|
134,633
|
|
|
127,886
|
|
Diluted
|
|
143,236
|
|
|
128,154
|
|
|
134,633
|
|
|
127,886
|
|
Halozyme
Therapeutics, Inc.
|
Condensed
Consolidated Balance Sheets
|
(Unaudited)
|
(In
thousands)
|
|
|
|
September 30,
2017
|
|
December 31,
2016
|
ASSETS
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
164,397
|
|
|
$
|
66,764
|
|
Marketable
securities, available-for-sale
|
|
152,525
|
|
|
138,217
|
|
Accounts receivable,
net
|
|
14,695
|
|
|
15,680
|
|
Inventories
|
|
9,331
|
|
|
14,623
|
|
Prepaid expenses and
other assets
|
|
12,397
|
|
|
21,248
|
|
Total current
assets
|
|
353,345
|
|
|
256,532
|
|
Property and
equipment, net
|
|
3,232
|
|
|
4,264
|
|
Prepaid expenses and
other assets
|
|
72
|
|
|
219
|
|
Restricted
cash
|
|
500
|
|
|
500
|
|
Total
assets
|
|
$
|
357,149
|
|
|
$
|
261,515
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY (DEFICIT)
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
|
$
|
4,152
|
|
|
$
|
3,578
|
|
Accrued
expenses
|
|
32,370
|
|
|
28,821
|
|
Deferred revenue,
current portion
|
|
4,093
|
|
|
4,793
|
|
Current portion of
long-term debt, net
|
|
61,433
|
|
|
17,393
|
|
Total current
liabilities
|
|
102,048
|
|
|
54,585
|
|
|
|
|
|
|
Deferred revenue, net
of current portion
|
|
36,755
|
|
|
39,825
|
|
Long-term debt,
net
|
|
145,417
|
|
|
199,228
|
|
Other long-term
liabilities
|
|
540
|
|
|
358
|
|
|
|
|
|
|
Stockholders' equity
(deficit):
|
|
|
|
|
Common
stock
|
|
142
|
|
|
130
|
|
Additional paid-in
capital
|
|
718,553
|
|
|
552,737
|
|
Accumulated other
comprehensive loss
|
|
(53)
|
|
|
(6)
|
|
Accumulated
deficit
|
|
(646,253)
|
|
|
(585,342)
|
|
Total stockholders'
equity (deficit)
|
|
72,389
|
|
|
(32,481)
|
|
Total liabilities and
stockholders' equity (deficit)
|
|
$
|
357,149
|
|
|
$
|
261,515
|
|
Contacts:
Jim
Mazzola
858-704-8122
ir@halozyme.com
Chris Burton
858-704-8352
ir@halozyme.com
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SOURCE Halozyme Therapeutics, Inc.