First Quarter Revenue of $117.3 million, Representing a 32% YOY Increase,
with GAAP Diluted Earnings per Share of $0.43 and Non-GAAP Diluted Earnings per Share of
$0.47
Record Quarterly Royalties in the First
Quarter of $69.6 million,
Representing 89% Growth over First Quarter 2021
Reiterate 2022 Revenue Guidance of
$530 Million to $560 Million, Representing 20-26% Growth over
Reported 2021 Revenue
Reiterate 2022 GAAP Operating Income Guidance
of $350 million to $380 million, Representing 27%-38% Growth over
2021 GAAP Operating Income
SAN
DIEGO, May 10, 2022 /PRNewswire/ -- Halozyme
Therapeutics, Inc. (NASDAQ: HALO) ("Halozyme") today reported
financial results for the first quarter ended March 31, 2022 and provided an update on its
recent corporate activities and outlook.
"We started 2022 strongly, achieving record royalty revenues
with significant growth that was in-line with our guidance for
2022, and with the signing of a new ENHANZE collaboration and
licensing agreement with Chugai Pharmaceutical," said Dr.
Helen Torley, president and chief
executive officer of Halozyme. "We were delighted to recently
announce our plans to acquire Antares Pharma, Inc., which is
expected to increase our top and bottom-line growth for the long
term. We look forward to a transformative year as we add three
commercial products and explore our combined platform capabilities
and build on the strong momentum of our ENHANZE® royalty
business.
Recent Partner Highlights:
- In March 2022, argenx announced
positive topline results from its ADAPT-SC study evaluating
subcutaneous (SC) efgartigimod (1000mg efgartigimod-PH20) using
ENHANZE® drug delivery technology for the treatment of generalized
myasthenia gravis. The study met its primary endpoint,
demonstrating noninferior total IgG reduction at day 29 with
subcutaneously administered efgartigimod compared to intravenous
(IV) administration. Based on these results, argenx has stated it
plans to submit a Biologics License Application to the U.S. Food
and Drug Administration by the end of 2022. Efgartigimod SC is on
track to be the first of Halozyme's Wave 3 potential partner
launches that are projected to occur between 2023 and
2025.
- In March 2022, Halozyme and
Chugai Pharmaceutical entered into a global collaboration and
license agreement for ENHANZE® technology. Halozyme received
upfront payments of $25 million from
Chugai and is eligible to receive additional future payments of up
to $160 million, subject to
achievement of specified development, regulatory and sales-based
milestones. Halozyme will also be entitled to receive royalties on
sales of commercialized medicines using the ENHANZE®
technology.
- In March 2022, ViiV initiated
enrollment of a Phase 1 study to evaluate the safety and
pharmacokinetics of N6LS, a broadly neutralizing antibody,
administered subcutaneously with ENHANZE® technology.
Recent Corporate Highlights:
- In April 2022, Halozyme announced
the pending acquisition of Antares, extending its revenue growth
and durability by expanding its drug-delivery capabilities with the
addition of an industry-leading auto-injector platform as well as a
commercial business with three proprietary products. The proposed
acquisition provides compelling financial and strategic benefits
including expected revenue and non-GAAP earnings accretion in 2022
and long-term financial upside, accelerating both top and
bottom-line growth. Halozyme expects to build on Antares' existing
platform technology and capabilities to drive incremental, durable
revenue opportunities with additional intellectual property
protections for Antares technology in place beyond 2030. The
acquisition is expected to close in the first half of 2022.
- In March 2022, Halozyme announced
the appointment of Moni Miyashita to
its board of directors. Ms. Miyashita is an accomplished executive
with over 25 years of global strategic, mergers & acquisitions
and business transformation expertise and currently serves as chief
strategy officer of Valo Health.
- In February 2022, Halozyme
announced the appointment of Nicole
LaBrosse as Halozyme's chief financial officer. Nicole
brings over 18 years of public accounting and corporate finance
experience to Halozyme and most recently served as Halozyme's vice
president of finance and accounting.
First Quarter Financial Highlights
- Revenue for the first quarter was $117.3
million compared to $89.0
million for the first quarter of 2021. The 32%
year-over-year increase was primarily driven by an increase in
royalty revenue primarily attributable to subcutaneous DARZALEX®
(daratumumab), partially offset by a decrease in revenues under
collaborative agreements. Revenue for the quarter included
$69.6 million in royalties, an
increase of 89% compared to $36.9
million in the prior year period.
- Cost of product sales for the first quarter was $15.9 million, compared to $18.2 million for the first quarter of 2021. The
year-over-year decrease, despite an increase in product sales, was
primarily driven by the timing of manufacturing overhead costs in
the prior year period.
- Research and development expenses for the first quarter were
$11.9 million, compared to
$9.0 million for the first quarter of
2021. The increase is primarily due to an increase in compensation
expense, including share-based compensation, for personnel in
support of investment in ENHANZE.
- Selling, general and administrative expenses for the first
quarter were $13.8 million, compared
to $11.1 million for the first
quarter of 2021. The increase was primarily due to an increase in
compensation expense and costs associated with M&A and
diligence activities.
- Operating Income: On a GAAP basis in the first quarter of 2022,
operating income was $75.7 million,
compared to an operating income of $50.7
million in the first quarter of 2021.
- Net Income: On a GAAP basis in the first quarter of 2022, net
income was $60.1 million, compared
with net income of $27.9 million
in the first quarter of 2021. Non-GAAP net income was $66.1 million in the first quarter of 2022,
compared with non-GAAP net income of $54.3
million in the first quarter of 2021.1
- Earnings per Share: On a GAAP basis in the first quarter of
2022, diluted earnings per share was $0.43, compared with $0.19 in the first quarter of 2021. On a non-GAAP
basis, diluted earnings per share was $0.47, compared with diluted earnings per share
of $0.37 in the first quarter of
2021.1
- Cash, cash equivalents and marketable securities were
$786.1 million on March 31, 2022, compared to $740.9 million on December
31, 2021.
Financial Outlook for 2022
The Company is reiterating its financial guidance for 2022 which
was first provided on January 10,
2022. For the full year 2022, the Company expects:
- Total revenue of $530 million to
$560 million, representing growth of
20%-26% over 2021 total revenue. The Company expects revenue from
royalties to increase approximately 50% over revenue from royalties
in 2021 to approximately $300
million.
- GAAP operating income of $350
million to $380 million,
representing growth of 27%-38% over 2021 GAAP operating income,
resulting in operating margins greater than 65%.
- GAAP net income of $270 million
to $295 million; and non-GAAP net
income of $290 million to
$315 million.1 The Company
notes that 2022 will be the first full fiscal year in which
Halozyme will record income tax expense as part of its income
statement.
- GAAP diluted earnings per share of $1.90 to $2.05,
inclusive of the first full year of income tax expense, projected
to be $0.55-$0.60 per share. In comparison, in 2021 the
Company recorded a one-time non-cash income tax benefit of
$154.2 million or $1.05 per share, related to the release of its
tax valuation allowance.
- Non-GAAP diluted earnings per share are expected to be
$2.05 to $2.20,1 reflective of the first full
year in which the company will record income tax expense, projected
to be $0.55-$0.60 per share.
The Company's financial guidance does not consider the impact of
the potential Antares acquisition, and the Company's earnings per
share guidance does not consider the impact of potential future
share repurchases.
Table 1. 2022
Financial Guidance
|
|
|
|
Guidance
Range
|
Net Revenue
|
|
$530 to $560
million
|
GAAP Operating
Income
|
|
$350 to $380
million
|
GAAP Net
Income
|
|
$270 to $295
million
|
Non-GAAP Net
Income
|
|
$290 to $315
million1
|
GAAP Diluted
EPS
|
|
$1.90 to
$2.05
|
Non-GAAP Diluted
EPS
|
|
$2.05 to
$2.201
|
Webcast and Conference Call
Halozyme will webcast its Quarterly Update Conference Call for
the first quarter of 2022 today, Tuesday,
May 10, 2022 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:
https://events.q4inc.com/attendee/321325561. 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, please register 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 touched more than 600,000
patient lives in post-marketing use 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, AbbVie, Eli Lilly,
Bristol-Myers Squibb, Alexion, argenx, Horizon Therapeutics, ViiV
Healthcare and Chugai Pharmaceutical. 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 and connect with us on LinkedIn
and Twitter.
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,
debt extinguishment expense and certain adjustments to income tax
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 2022) and expectations for future growth,
profitability, total revenue and royalty revenue, net and operating
income and earnings-per-share, the Company's plans to acquire
Antares and to repurchase shares under its share repurchase
program. Forward-looking statements regarding the Company's
ENHANZE® drug delivery technology may include the
possible benefits and attributes of ENHANZE®, its
potential application to aid in the dispersion and absorption of
other injected therapeutic drugs and facilitating more rapid
delivery and administration of larger volumes of injectable
medications through subcutaneous delivery. Forward-looking
statements regarding the Company's ENHANZE® business may
include potential growth and receipt of royalty and milestone
payments driven by our partners' development and commercialization
efforts, potential new clinical trial study starts, 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 and the Company's plans to develop new
formulations of its API for longer intellectual property
protection. 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, risks related to Halozyme's and Antares'
ability to complete the proposed acquisition on the proposed terms
or on the proposed timeline, including the receipt of required
regulatory approvals, the possibility that competing offers will be
made, other risks associated with executing proposed acquisition,
such as the risk that the businesses will not be integrated
successfully, that such integration may be more difficult,
time-consuming or costly than expected or that the expected
benefits of the proposed acquisition will not be realized,
unexpected results or delays in the growth of the Company's
ENHANZE® business, or in the development, regulatory
review or commercialization of new formulations of the Company's
API or its partners' 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 Quarterly Reports on Form 10-Q filed with the Securities
and Exchange Commission.
Investors:
Dawn
Schottlandt / Claudia
Styslinger
Argot Partners
212-600-1902
Halozyme@argotpartners.com
ir@halozyme.com
Footnotes:
1. Reconciliations
between GAAP reported and non-GAAP financial information and
adjusted guidance measures are provided at the end.
Halozyme
Therapeutics, Inc.
|
Condensed
Consolidated Statements of Operations
|
(Unaudited)
|
(In thousands,
except per share amounts)
|
|
|
|
|
|
Three Months
Ended
March
31,
|
|
|
2022
|
|
2021
|
Revenues:
|
|
|
|
|
Royalties
|
|
$69,605
|
|
$36,923
|
Product sales,
net
|
|
22,140
|
|
21,766
|
Revenues under
collaborative agreements
|
|
25,534
|
|
30,333
|
Total
revenues
|
|
117,279
|
|
89,022
|
Operating
expenses:
|
|
|
|
|
Cost of product
sales
|
|
15,922
|
|
18,219
|
Research and
development
|
|
11,853
|
|
9,009
|
Selling, general and
administrative
|
|
13,834
|
|
11,059
|
Total operating
expenses
|
|
41,609
|
|
38,287
|
Operating
income
|
|
75,670
|
|
50,735
|
Other income
(expense):
|
|
|
|
|
Investment and other
income, net
|
|
498
|
|
276
|
Inducement expense
related to convertible note
|
|
—
|
|
(20,960)
|
Interest
expense
|
|
(1,759)
|
|
(1,965)
|
Net income before
income taxes
|
|
74,409
|
|
28,086
|
Income tax (benefit)
expense
|
|
14,301
|
|
191
|
Net income
|
|
$60,108
|
|
$27,895
|
|
|
|
|
|
Net income per
share:
|
|
|
|
|
Basic
|
|
$0.44
|
|
$0.20
|
Diluted
|
|
$0.43
|
|
$0.19
|
|
|
|
|
|
Shares used in
computing net income per share:
|
|
|
|
|
Basic
|
|
137,658
|
|
137,952
|
Diluted
|
|
141,277
|
|
148,540
|
Halozyme
Therapeutics, Inc.
|
Condensed
Consolidated Balance Sheets
|
(Unaudited)
|
(In
thousands)
|
|
|
|
|
|
|
|
March 31,
2022
|
|
December 31,
2021
|
ASSETS
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$117,835
|
|
$118,719
|
Marketable securities,
available-for-sale
|
|
668,305
|
|
622,203
|
Accounts receivable,
net
|
|
113,762
|
|
90,975
|
Inventories
|
|
47,761
|
|
53,908
|
Prepaid expenses and
other assets
|
|
41,026
|
|
40,482
|
Total current
assets
|
|
988,689
|
|
926,287
|
Property and equipment,
net
|
|
8,513
|
|
8,794
|
Prepaid expenses and
other assets
|
|
22,038
|
|
13,414
|
Deferred tax assets,
net
|
|
142,508
|
|
155,434
|
Restricted
cash
|
|
500
|
|
500
|
Total assets
|
|
$1,162,248
|
|
$1,104,429
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS'
EQUITY
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
|
$1,266
|
|
$1,541
|
Accrued
expenses
|
|
19,133
|
|
24,441
|
Deferred revenue,
current portion
|
|
1,746
|
|
1,746
|
Current portion of
long-term debt, net
|
|
89,546
|
|
89,419
|
Total current
liabilities
|
|
111,691
|
|
117,147
|
|
|
|
|
|
Deferred revenue, net
of current portion
|
|
2,031
|
|
2,530
|
Long-term debt,
net
|
|
788,099
|
|
787,255
|
Other long-term
liabilities
|
|
171
|
|
544
|
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
|
Common stock
|
|
138
|
|
138
|
Additional paid-in
capital
|
|
261,713
|
|
256,347
|
Accumulated other
comprehensive (loss) income
|
|
(2,791)
|
|
(620)
|
Accumulated
deficit
|
|
1,196
|
|
(58,912)
|
Total stockholders'
equity
|
|
260,256
|
|
196,953
|
Total liabilities and
stockholders' equity
|
|
$1,162,248
|
|
$1,104,429
|
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,
|
|
|
2022
|
|
2021
|
GAAP Net Income
|
|
$
60,108
|
|
$
27,895
|
Adjustments:
|
|
|
|
|
Inducement expense related to convertible notes
|
|
—
|
|
20,960
|
Share-based compensation
|
|
4,742
|
|
4,923
|
Amortization of debt discount
|
|
971
|
|
741
|
Other one-time items
|
|
1,511
|
|
—
|
Income tax effect of above
adjustments(1)
|
|
(1,250)
|
|
(181)
|
Non-GAAP Net Income
|
|
$
66,082
|
|
$
54,338
|
|
|
|
|
|
GAAP Diluted EPS
|
|
$
0.43
|
|
$
0.19
|
Adjustments:
|
|
|
|
|
Inducement expense related to convertible notes
|
|
—
|
|
0.14
|
Share-based compensation
|
|
0.03
|
|
0.03
|
Amortization of debt discount
|
|
0.01
|
|
0.01
|
Other one-time items
|
|
0.01
|
|
—
|
Income tax effect of above
adjustments(1)
|
|
(0.01)
|
|
—
|
Non-GAAP DilutedEPS
|
|
$
0.47
|
|
$
0.37
|
|
|
|
|
|
GAAP & Non-GAAP Diluted
Shares
|
|
141,277
|
|
148,540
|
(1) Estimated income
tax effect of the Non-GAAP reconciling items are calculated using
applicable statutory tax rates,
taking into consideration of any valuation
allowance.
|
*Dollar amounts, as
presented, are rounded. Consequently, totals may not add
up.
|
Halozyme
Therapeutics, Inc.
|
GAAP to Non-GAAP
Reconciliations
|
Net Income and
Diluted EPS 2022 Guidance
|
(Unaudited)
|
(In millions, except
per share amounts)
|
|
|
|
|
|
|
|
2022
|
|
2021
|
GAAP Net
Income
|
|
$270 -
295
|
|
$402.7
|
Adjustments:
|
|
|
|
|
Inducement expense
related to convertible notes
|
|
—
|
|
21.0
|
Share-based
compensation
|
|
22 - 25
|
|
20.8
|
Amortization of debt
discount
|
|
4 - 4
|
|
3.9
|
Income tax
benefit
|
|
—
|
|
(154.2)
|
Income tax effect of
above adjustments
|
|
(6) - (7)
|
|
(0.1)
|
Non-GAAP Net
Income
|
|
$290
-315
|
|
$294.1
|
|
|
|
|
|
GAAP Diluted
EPS
|
|
$1.90 -
2.05
|
|
$2.74
|
Adjustments:
|
|
|
|
|
Inducement expense
related to convertible notes
|
|
—
|
|
0.14
|
Share-based
compensation
|
|
0.16 - 0.17
|
|
0.14
|
Amortization of debt
discount
|
|
0.04 - 0.04
|
|
0.03
|
Income tax
benefit
|
|
—
|
|
(1.05)
|
Income tax effect of
above adjustments
|
|
(0.04) -
(0.05)
|
|
—
|
Non-GAAP Diluted
EPS
|
|
$2.05 -
2.20
|
|
$2.00
|
|
|
|
|
|
GAAP & Non-GAAP
Diluted Shares
|
|
142 -
143
|
|
146.8
|
*Dollar amounts, as
presented, are rounded. Consequently, totals may not add
up.
|
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SOURCE Halozyme Therapeutics, Inc.