SAN DIEGO, May 10, 2021 /PRNewswire/ -- Halozyme
Therapeutics, Inc. (NASDAQ: HALO) today reported financial results
for the first quarter ended March 31, 2021 and provided an
update on its recent corporate activities and outlook.
"The first quarter marked a strong start to 2021 highlighted by
record quarterly royalty revenue driven by the continued successful
launch of subcutaneous DARZALEX® worldwide," said Dr.
Helen Torley, president and chief
executive officer. "Our pipeline of partnered product candidates
using ENHANZE® technology continues to build momentum
with four new clinical study starts in the first quarter.
Additionally, we were able to strengthen our balance sheet on
highly attractive terms reflective of the strong anticipated cash
flow generation and growth prospects for Halozyme."
Recent Partner Highlights:
- Janssen achieved several important successes related to the
subcutaneous formulation of DARZALEX® (daratumumab)
using ENHANZE® technology during the first quarter and
since including:
-
- Janssen Pharmaceutical K.K. announced approval from
Japan's Ministry of Health, Labour
and Welfare (MHLW) in March for the subcutaneous formulation of
DARZALEX® (known as DALACURO® in Japan) for the treatment of multiple myeloma.
Accordingly, Halozyme recognized $5
million in milestone revenues.
- The Janssen Pharmaceutical Companies of Johnson & Johnson
announced Health Canada approved DARZALEX® SC (daratumumab
injection), a subcutaneous (SC) formulation of daratumumab, in
combination with bortezomib, cyclophosphamide and dexamethasone
(D-VCd, also known as DCyBorD) in April for the treatment of adult
patients with newly diagnosed light chain (AL) amyloidosis. There
were previously no approved therapies for the disease.
- Janssen Biotech, Inc. received U.S. Food and Drug
Administration accelerated approval in January for 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. There were previously no approved
therapies for the disease.
- In March, Horizon completed dosing for its first trial
exploring a subcutaneous (SC) formulation of TEPEZZA®
(teprotumumab-trbw) using ENHANZE® technology. The trial
is a small, single-dose Phase 1 pharmacokinetic trial which
includes evaluating the use of ENHANZE® drug-delivery
technology for a SC formulation, which could potentially shorten
drug administration time, reducing healthcare practitioner time and
offering additional flexibility and convenience for patients.
- Bristol Myers Squibb (BMS) has
advanced plans to initiate a Phase 3 study of nivolumab with
ENHANZE® technology for patients with advanced or
metastatic clear cell renal cell carcinoma during the second
quarter of 2021. Accordingly, Halozyme recognized $25 million in milestone revenues.
- During the first quarter, argenx reached two important
achievements related to its development of efgartigimod using
ENHANZE® including:
-
- In February 2021, argenx
announced a "go" decision for its late-stage ADHERE trial
evaluating subcutaneous (SC) efgartigimod using 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, argenx initiated
a Phase 3 study of ARGX-113 using ENHANZE® technology in
pemphigus vulgaris and pemphigus foliaceus, rare autoimmune
diseases that cause painful blisters on the skin and mucous
membranes.
Recent Corporate Highlights:
- In March 2021, the Company
completed the sale of $805.0 million
aggregate principal amount of the 2027 Convertible Senior Notes. A
portion of the net proceeds were used to repurchase 80% of the 2024
Convertible Senior Notes. In connection with the note repurchase,
the Company paid the holders $370.2
million in cash and issued 9.08 million shares.
- During the first quarter, the Company repurchased approximately
1.8 million shares of common stock for $76.2
million at an average price per share of $42.89, partially offsetting shares issued to
2024 Convertible Senior Notes holders.
First Quarter and Full Year 2021 Financial Highlights
- Revenue for the first quarter was $89.0
million compared to $25.4
million for the first quarter of 2020. The year-over-year
increase was primarily driven by $30.0
million in milestone revenues from BMS and Janssen, an
increase in royalty revenue attributable to subcutaneous
DARZALEX® and an increase in product sales. Revenue for
the quarter included $36.9 million in
royalties, an increase of 119% compared to $16.8 million in the prior year period.
- Cost of product sales for the first quarter was $18.2 million, compared to $5.8 million for the first quarter of 2020. The
year-over-year increase was primarily driven by higher product
sales, principally the sales of bulk rHuPH20 to the Company's
partners.
- Research and development expenses for the first quarter were
$9.0 million, compared to
$10.2 million for the first quarter
of 2020. The decrease in expenses was due to the discontinuation of
some development related activities for PEGPH20 and closure of the
Company's oncology operations, partially offset by an increase in
costs to support additional ENHANZE® targets.
- Selling, general and administrative expenses for the first
quarter were $11.1 million, compared
to $12.6 million for the first
quarter of 2020. The decrease was primarily due to one-time costs
in the prior year related to the discontinuation of the Company's
development activities for PEGPH20 and closure of its oncology
operations.
- Operating Income: On a GAAP basis in the first quarter of 2021,
operating income was $50.7 million,
compared to an operating loss of $3.2
million in the first quarter of 2020.
- Net Income: On a GAAP basis in the first quarter of 2021, net
income was $27.9 million, compared
with a net loss of $6.1 million in
the first quarter of 2020. Non-GAAP net income was $54.3 million in the first quarter of 2021,
compared with Non-GAAP net income of $1.9
million in the first quarter of 2020.1
- Earnings per Share: On a GAAP basis in the first quarter of
2021, diluted earnings per share was $0.19, compared with a loss per share of
$0.04 in the first quarter of 2020.
On a non-GAAP basis diluted earnings per share was $0.37, compared with diluted earnings per share
of $0.02 in the first quarter of
2020.1
- Cash, cash equivalents and marketable securities were
$764.3 million at March 31, 2021, compared to $368.0 million at December
31, 2020.
- During the first quarter, the Company repurchased 1.8 million
shares of common stock for $76.2
million at an average price of $42.89, bringing the total for share repurchases
since the announcement of the Company's three-year share repurchase
program to $426.2 million at an
average price of $21.99.
Financial Outlook for 2021
Based on the latest information from collaboration partners and
planned expenditures for the year, the Company continues to
expect:
- Revenues of $375 million to
$395 million, representing
year-over-year growth of 40%-48%;
- GAAP Operating Income of $215
million to $235 million,
representing year-over-year growth of 49% - 63%;
- GAAP Net Income of $190 million
to $210 million, representing
year-over-year growth of 47%-63% and Non-GAAP Net Income of
$235 million to $255 million, representing year-over-year growth
of 47% - 59%;1
- GAAP Diluted Earnings per Share of $1.25 to $1.40,
representing year-over-year growth of 37%-54%; and Non-GAAP Diluted
Earnings per Share of $1.55 to
$1.70, representing year-over-year
growth of 38%-52%.1
The Company plans to repurchase up to an additional $49 million in common stock this year for a total
of 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 first quarter of 2021 today, Monday, May 10, 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/1584694. 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
500,000 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 using
ENHANZE®. Halozyme is headquartered in San Diego. For more information visit
www.halozyme.com.
Note Regarding Use of Non-GAAP Financial Measures
In addition to disclosing financial measures prepared in
accordance with U.S. generally accepted accounting principles
(GAAP), this press release and the accompanying tables contain
certain non-GAAP financial measures. The Company reports non-GAAP
net income and non-GAAP diluted earnings per share in addition to,
and not as a substitute for, or superior to, financial measures
calculated in accordance with GAAP. The Company calculates non-GAAP
net income and non-GAAP diluted earnings per share excluding
share-based compensation expense, amortization of debt discount,
and debt extinguishment expense. Reconciliations between GAAP and
non-GAAP financial measures are included at the end of this press
release. The Company evaluates other items of income and
expense on an individual basis and considers both the quantitative
and qualitative aspects of the item, including (i) its size and
nature, (ii) whether or not it relates to the Company's ongoing
business operations and (iii) whether or not the Company expects it
to occur as part of Halozyme's normal business on a regular basis.
Non-GAAP financial measures do not have any standardized meaning
and are therefore unlikely to be comparable to similarly titled
measures presented by other companies. These non-GAAP financial
measures are not meant to be considered in isolation and should be
read in conjunction with the Company's consolidated financial
statements prepared in accordance with GAAP; and are not prepared
under any comprehensive set of accounting rules or
principles. In addition, from time to time in the future
there may be other items that the Company may exclude for purposes
of its non-GAAP financial measures; and the Company may in the
future cease to exclude items that it has historically excluded for
purposes of its non-GAAP financial measures. Halozyme considers
these non-GAAP financial measures to be important because they
provide useful measures of the operating performance of the
Company, exclusive of factors that do not directly affect what the
Company considers to be its core operating performance, as well as
unusual events. The non-GAAP measures also allow investors
and analysts to make additional comparisons of the operating
activities of the Company's core business over time and with
respect to other companies, as well as assessing trends and future
expectations.
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, 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 and Form 10-Q filed with
the Securities and Exchange Commission.
Contact:
Al Kildani
Vice President, Investor Relations and Corporate Communications
858-704-8122
ir@halozyme.com
Footnotes:
1. Reconciliations
between GAAP reported and non-GAAP financial information and
adjusted guidance measures are provided at the end of this press
release.
|
Halozyme
Therapeutics, Inc.
|
Condensed
Consolidated Statements of Operations
|
(Unaudited)
|
(In thousands,
except per share amounts)
|
|
|
|
Three Months
Ended March
31,
|
|
|
2021
|
|
2020
|
Revenues:
|
|
|
|
|
Royalties
|
|
$
|
36,923
|
|
|
$
|
16,822
|
|
Product sales,
net
|
|
21,766
|
|
|
8,147
|
|
Revenues under
collaborative agreements
|
|
30,333
|
|
|
385
|
|
Total
revenues
|
|
89,022
|
|
|
25,354
|
|
Operating
expenses:
|
|
|
|
|
Cost of product
sales
|
|
18,219
|
|
|
5,787
|
|
Research and
development
|
|
9,009
|
|
|
10,158
|
|
Selling, general and
administrative
|
|
11,059
|
|
|
12,632
|
|
Total operating
expenses
|
|
38,287
|
|
|
28,577
|
|
Operating income
(loss)
|
|
50,735
|
|
|
(3,223)
|
|
Other income
(expense):
|
|
|
|
|
Investment and other
income, net
|
|
276
|
|
|
2,479
|
|
Inducement expense
related to convertible note
|
|
(20,960)
|
|
|
—
|
|
Interest
expense
|
|
(1,965)
|
|
|
(5,348)
|
|
Net income (loss)
before income taxes
|
|
28,086
|
|
|
(6,092)
|
|
Income tax
expense
|
|
191
|
|
|
11
|
|
Net income
(loss)
|
|
$
|
27,895
|
|
|
$
|
(6,103)
|
|
|
|
|
|
|
Net income (loss) per
share:
|
|
|
|
|
Basic
|
|
$
|
0.20
|
|
|
$
|
(0.04)
|
|
Diluted
|
|
$
|
0.19
|
|
|
$
|
(0.04)
|
|
|
|
|
|
|
Shares used in
computing net income (loss) per share:
|
|
|
|
|
Basic
|
|
137,952
|
|
|
137,186
|
|
Diluted
|
|
148,540
|
|
|
137,186
|
|
Halozyme
Therapeutics, Inc.
|
Condensed
Consolidated Balance Sheets
|
(Unaudited)
|
(In
thousands)
|
|
|
|
March 31,
2021
|
|
December 31,
2020
|
ASSETS
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
499,450
|
|
|
$
|
147,703
|
|
Marketable securities,
available-for-sale
|
|
264,856
|
|
|
220,310
|
|
Accounts receivable,
net and other contract assets
|
|
88,391
|
|
|
97,730
|
|
Inventories
|
|
58,343
|
|
|
60,747
|
|
Prepaid expenses and
other assets
|
|
30,679
|
|
|
28,274
|
|
Total current
assets
|
|
941,719
|
|
|
554,764
|
|
Property and
equipment, net
|
|
10,366
|
|
|
10,593
|
|
Prepaid expenses and
other assets
|
|
13,997
|
|
|
14,067
|
|
Restricted
cash
|
|
500
|
|
|
500
|
|
Total
assets
|
|
$
|
966,582
|
|
|
$
|
579,924
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
|
$
|
535
|
|
|
$
|
1,928
|
|
Accrued
expenses
|
|
16,098
|
|
|
20,483
|
|
Deferred revenue,
current portion
|
|
1,746
|
|
|
1,746
|
|
Current portion of
long-term debt, net
|
|
89,042
|
|
|
397,228
|
|
Total current
liabilities
|
|
107,421
|
|
|
421,385
|
|
|
|
|
|
|
Deferred revenue, net
of current portion
|
|
4,026
|
|
|
4,026
|
|
Long-term debt,
net
|
|
784,731
|
|
|
—
|
|
Other long-term
liabilities
|
|
2,809
|
|
|
3,466
|
|
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
|
Common
stock
|
|
143
|
|
|
135
|
|
Additional paid-in
capital
|
|
501,186
|
|
|
625,483
|
|
Accumulated other
comprehensive income (loss)
|
|
(9)
|
|
|
22
|
|
Accumulated
deficit
|
|
(433,725)
|
|
|
(474,593)
|
|
Total stockholders'
equity
|
|
67,595
|
|
|
151,047
|
|
Total liabilities and
stockholders' equity
|
|
$
|
966,582
|
|
|
$
|
579,924
|
|
Halozyme
Therapeutics, Inc.
|
GAAP to Non-GAAP
Reconciliations
|
Net Income and
Diluted EPS
|
(Unaudited)
|
(In thousands,
except per share amounts)
|
|
|
|
Three Months
Ended
March
31,
|
|
|
2021
|
|
2020
|
GAAP Net Income
(Loss)
|
|
$
|
27,895
|
|
|
$
|
(6,103)
|
|
Adjustments:
|
|
|
|
|
Inducement expense
related to convertible note
|
|
20,960
|
|
|
—
|
|
Share-based
compensation
|
|
4,923
|
|
|
4,531
|
|
Amortization of debt
discount
|
|
741
|
|
|
3,478
|
|
Income tax effect of
above adjustments
|
|
(181)
|
|
|
15
|
|
Non-GAAP Net
Income (Loss)
|
|
$
|
54,338
|
|
|
$
|
1,921
|
|
|
|
|
|
|
GAAP Diluted
EPS
|
|
$
|
0.19
|
|
|
$
|
(0.04)
|
|
Adjustments:
|
|
|
|
|
Inducement expense
related to convertible note
|
|
0.14
|
|
|
—
|
|
Share-based
compensation
|
|
0.03
|
|
|
0.03
|
|
Amortization of debt
discount
|
|
0.01
|
|
|
0.03
|
|
Income tax effect of
above adjustments
|
|
—
|
|
|
—
|
|
Non-GAAP Diluted
EPS
|
|
$
|
0.37
|
|
|
$
|
0.02
|
|
|
|
|
|
|
GAAP &
Non-GAAP Diluted Shares
|
|
148,540
|
|
|
137,186
|
|
Halozyme
Therapeutics, Inc.
|
GAAP to Non-GAAP
Reconciliations
|
Net Income and
Diluted EPS 2021 Guidance
|
(Unaudited)
|
(In millions,
except per share amounts)
|
|
|
|
2021
|
|
2020
|
GAAP Net Income
(Loss)
|
|
$ 190 -
210
|
|
$
|
129.1
|
|
Adjustments:
|
|
|
|
|
Inducement expense
related to convertible note
|
|
21 - 21
|
|
—
|
|
Share-based
compensation
|
|
21 - 22
|
|
17.2
|
|
Amortization of debt
discount
|
|
4 - 4
|
|
14.1
|
|
Non-GAAP Net
Income (Loss)
|
|
$
235 -255
|
|
$
|
160.4
|
|
|
|
|
|
|
GAAP Diluted
EPS
|
|
$ 1.25 -
1.40
|
|
$
|
0.91
|
|
Adjustments:
|
|
|
|
|
Inducement expense
related to convertible note
|
|
0.14 -
0.14
|
|
—
|
|
Share-based
compensation
|
|
0.14 -
0.15
|
|
0.12
|
|
Amortization of debt
discount
|
|
0.02 -
0.02
|
|
0.10
|
|
Non-GAAP Diluted
EPS
|
|
$ 1.55 -
1.70
|
|
$
|
1.12
|
|
|
|
|
|
|
GAAP &
Non-GAAP Diluted Shares
|
|
149 -
150
|
|
141.5
|
|
|
Dollar amounts and
percentages, as presented, are rounded. Consequently totals may not
add up.
|
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SOURCE Halozyme Therapeutics, Inc.