SAN DIEGO, May 7, 2019
/PRNewswire/ -- Halozyme Therapeutics, Inc. (NASDAQ: HALO), a
biotechnology company developing novel oncology and drug-delivery
therapies, today reported financial results for the first quarter
ended March 31, 2019 and provided an update on recent
corporate activities.
"We enjoyed a strong start to 2019 as our first quarter included
a new ENHANZE® collaboration with argenx, positive phase
III data from Janssen's COLUMBA study evaluating a subcutaneous
formulation of DARZALEX®, and FDA approval of Herceptin
Hylecta™," said Dr. Helen Torley,
president and chief executive officer. "Looking ahead in 2019, we
expect this momentum to continue. On ENHANZE® we
anticipate regulatory submissions by ENHANZE® partner
Janssen for the subcutaneous formulation of DARZALEX®, a
new phase 3 trial initiation by one of our ENHANZE®
partners and multiple Phase 1 trial initiations. On PEGPH20, we
project the announcement of topline results from our HALO-301
pivotal phase 3 trial in pancreas cancer in the second half of the
year."
First Quarter 2019 and Recent Highlights Include:
- In February 2019, we announced
that Genentech, a member of the Roche Group, received approval from
the FDA for Herceptin Hylecta™, a co-formulation of trastuzumab and
rHuPH20. Herceptin Hylecta™ is approved for the treatment of
certain people with HER2-positive early breast cancer. Herceptin
Hylecta™ is a ready-to-use formulation that can be administered in
two to five minutes, compared to 30 to 90 minutes for intravenous
trastuzumab. In April 2019, Roche
made Herceptin Hylecta™ available in the U.S.
- In February 2019, Janssen's
development partner, Genmab, announced positive Phase 3 trial
results from the COLUMBA study. The study evaluated subcutaneous
DARZALEX® in comparison to DARZALEX® IV in
patients with relapsed and refractory multiple myeloma.
DARZALEX® SC, using ENHANZE® drug delivery
technology, was found to be non-inferior to DARZALEX® IV
with regard the co-primary endpoints of Overall Response Rate and
Maximum Trough concentration on day 1 of the third treatment cycle.
Additional data from this trial will be presented at the American
Society of Clinical Oncology (ASCO) Annual Meeting in Chicago at an oral presentation on
Sunday, June 2, 2019.
- In February 2019, we entered into
a collaboration agreement with argenx for the right to develop and
commercialize one exclusive target, the human neonatal Fc receptor
FcRn, which includes argenx's lead asset efgartigimod (ARGX-113),
and an option to select two additional targets using our
ENHANZE® technology for an upfront payment of
$30.0 million. We will receive
payments of $10.0 million per target
for future target nominations and potential milestone payments of
up to $160.0 million per target,
subject to the achievement of specific development, regulatory and
sales-based milestones. We will receive mid-single digit royalties
on sales of commercialized products.
- With regard to HALO-301, a Phase 3 study evaluating PEGPH20 in
metastatic pancreas cancer, the company now expects to achieve the
target number of overall survival (OS) events in the third quarter
of 2019. The company plans to initiate the database lock process
for final analysis after 330 OS events have been achieved with
mature data. As a result, the company expects topline results will
be available in the second half of 2019.
First Quarter 2019 Financial Highlights
- Revenue for the first quarter was $56.9
million compared to $30.9
million for the first quarter of 2018. The year-over-year
increase was primarily driven by $30.0
million in upfront license fees for the argenx
collaboration. Revenue for the quarter included $18.0 million in royalties and $8.4 million in product sales, which compared to
$20.9 million and $6.8 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™ in the U.S. by Roche.
- Research and development expenses for the first quarter were
$31.3 million, compared to
$38.0 million for the first 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 first
quarter were $18.0 million, compared
to $13.6 million for the first
quarter of 2018. The increase is related to an increase in
personnel expenses, including stock based compensation as well as
preparations for the potential commercial launch of PEGPH20.
- Net income for the first quarter was $1.8 million, or $0.01 per share, compared to a net loss in the
first quarter of 2018 of $27.5
million, or $0.19 per
share.
- Cash, cash equivalents and marketable securities were
$328.7 million at March 31, 2019, compared to $354.5 million at December
31, 2018.
Financial Outlook for 2019
Halozyme reiterates its overall 2019 financial guidance while
lowering the anticipated contribution from royalties and increasing
the anticipated contribution from products sales related to API.
For 2019, Halozyme now expects:
- Net revenue of $205 million to
$215 million;
-
- Revenue from royalties of $72
million to $74 million, with
the decrease primarily attributable to the ongoing impact from
biosimilars in Europe and updated
expectations for the US launched products;
- Product sales related to API increased to reflect additional
customer orders;
- Operating expenses of $265
million to $275 million, or
$225 million to $235 million excluding an expected increase in
cost of goods sold;
- Operating cash burn of $45
million to $55 million;
- Debt repayment of approximately $90
million, the company expects to pay off the remainder of the
royalty-backed debt by the end of the first quarter of 2020;
- Year-end cash, cash equivalents and marketable securities
balance 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 first quarter of 2019 today, Tuesday, May 7, 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 (866) 393-4306 (domestic callers) or
(734) 385-2616 (international callers). A telephone replay will be
available after the call by dialing (855) 859-2056 (domestic
callers) or (404) 537-3406 (international callers) using replay ID
number 3076769.
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
May 7, 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
March 31,
|
|
|
2019
|
|
2018
|
Revenues:
|
|
|
|
|
Royalties
|
|
$
|
17,953
|
|
|
$
|
20,944
|
|
Product sales,
net
|
|
8,390
|
|
|
6,801
|
|
Revenues under
collaborative agreements
|
|
30,606
|
|
|
3,127
|
|
Total
revenues
|
|
56,949
|
|
|
30,872
|
|
Operating
expenses:
|
|
|
|
|
Cost of product
sales
|
|
4,649
|
|
|
3,052
|
|
Research and
development
|
|
31,328
|
|
|
37,976
|
|
Selling, general and
administrative
|
|
18,006
|
|
|
13,556
|
|
Total operating
expenses
|
|
53,983
|
|
|
54,584
|
|
Operating income
(loss)
|
|
2,966
|
|
|
(23,712)
|
|
Other income
(expense):
|
|
|
|
|
Investment and other
income, net
|
|
2,057
|
|
|
1,668
|
|
Interest
expense
|
|
(3,205)
|
|
|
(5,230)
|
|
Net income (loss)
before income taxes
|
|
1,818
|
|
|
(27,274)
|
|
Income tax
expense
|
|
22
|
|
|
187
|
|
Net income
(loss)
|
|
$
|
1,796
|
|
|
$
|
(27,461)
|
|
|
|
|
|
|
Net income (loss) per
share:
|
|
|
|
|
Basic
|
|
$
|
0.01
|
|
|
$
|
(0.19)
|
|
Diluted
|
|
$
|
0.01
|
|
|
$
|
(0.19)
|
|
|
|
|
|
|
Shares used in
computing net income (loss) per share:
|
|
|
|
|
Basic
|
|
144,743
|
|
|
142,656
|
|
Diluted
|
|
147,474
|
|
|
142,656
|
|
Halozyme
Therapeutics, Inc.
Condensed
Consolidated Balance Sheets
(Unaudited)
(In
thousands)
|
|
|
|
March 31,
2019
|
|
December 31,
2018
|
ASSETS
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
60,595
|
|
|
$
|
57,936
|
|
Marketable
securities, available-for-sale
|
|
268,122
|
|
|
296,590
|
|
Accounts receivable,
net
|
|
28,164
|
|
|
30,005
|
|
Inventories
|
|
31,241
|
|
|
22,625
|
|
Prepaid expenses and
other assets
|
|
20,914
|
|
|
20,693
|
|
Total current
assets
|
|
409,036
|
|
|
427,849
|
|
Property and
equipment, net
|
|
14,542
|
|
|
7,465
|
|
Prepaid expenses and
other assets
|
|
5,031
|
|
|
4,434
|
|
Restricted
cash
|
|
500
|
|
|
500
|
|
Total
assets
|
|
$
|
429,109
|
|
|
$
|
440,248
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
|
$
|
4,089
|
|
|
$
|
4,079
|
|
Accrued
expenses
|
|
43,663
|
|
|
49,529
|
|
Deferred revenue,
current portion
|
|
4,247
|
|
|
4,247
|
|
Current portion of
long-term debt, net
|
|
86,663
|
|
|
91,506
|
|
Total current
liabilities
|
|
138,662
|
|
|
149,361
|
|
|
|
|
|
|
Deferred revenue, net
of current portion
|
|
4,509
|
|
|
5,008
|
|
Long-term debt,
net
|
|
18,742
|
|
|
34,874
|
|
Other long-term
liabilities
|
|
7,149
|
|
|
2,118
|
|
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
|
Common
stock
|
|
145
|
|
|
145
|
|
Additional paid-in
capital
|
|
789,483
|
|
|
780,457
|
|
Accumulated other
comprehensive income (loss)
|
|
61
|
|
|
(277)
|
|
Accumulated
deficit
|
|
(529,642)
|
|
|
(531,438)
|
|
Total stockholders'
equity
|
|
260,047
|
|
|
248,887
|
|
Total liabilities and
stockholders' equity
|
|
$
|
429,109
|
|
|
$
|
440,248
|
|
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SOURCE Halozyme Therapeutics, Inc.