Revenue Increased 21% YOY to $196 million; Net Income of $77 million; Adjusted EBITDA of $116 million; GAAP Diluted EPS of $0.60 and Non-GAAP Diluted EPS of $0.791
Royalty Revenue Increased 21% YOY to
$121 million
Reiterating 2024 Financial Guidance: Total
Revenue of $915 - $985 million, Representing YOY Growth of 10% -
19%, Adjusted EBITDA of $535 -
$585 million, Representing YOY Growth
of 26% - 37% and Non-GAAP Diluted EPS of $3.55 - $3.90,
Representing YOY Growth of 28% - 41%
Announced New $750
million Share Repurchase Program
SAN
DIEGO, May 7, 2024 /PRNewswire/ -- Halozyme
Therapeutics, Inc. (NASDAQ: HALO) ("Halozyme" or the "Company")
today reported its financial and operating results for the first
quarter ended March 31, 2024, and provided an update on its
recent corporate activities and outlook.
"We are pleased to report another quarter of double-digit
revenue and earnings growth, which keeps us on track to meet our
financial guidance for the full year. We entered the new year with
continued strong advancement of our ENHANZE partner products and
pipeline. Our partnership with argenx represents a significant
growth opportunity following the approval for VYVDURA, efgartigimod
co-formulated with ENHANZE, for generalized myasthenia gravis in
Japan and with the potential U.S.
approval for VYVGART Hytrulo for CIDP in June 2024. Following European approval of Roche's
Tecentriq SC, we look forward to potential U.S. approval for
Tecentriq SC in September 2024. Roche
has also received a recommendation for approval of ocrelizumab SC
by the European Medicines Agency's Committee for Medicinal Products
for Human Use, with final approval expected mid-year and a
potential U.S. approval in September
2024. Continuing our strong Wave 3 progress, BMS recently
announced a U.S. Prescription Drug User Fee Act goal date of
February 28, 2025 for nivolumab SC,"
said Dr. Helen Torley, president and
chief executive officer of Halozyme. "Our leading innovations are
the driver of our robust portfolio and patent estate that is
resulting in new revenue opportunities and durable revenue and
EBITDA growth."
Recent Partner Highlights:
- In May 2024, Bristol Myers Squibb
announced that the U.S. Food and Drug Administration ("FDA")
accepted its Biologics License Application for the subcutaneous
formulation of Opdivo® (nivolumab) co-formulated with
ENHANZE®, resulting in a $15.0
million milestone payment. The FDA assigned a Prescription
Drug User Fee Act ("PDUFA") goal date of February 28, 2025.
- In April 2024, Roche announced
that European Medicines Agency's Committee for Medicinal Products
for Human Use has recommended the approval of Ocrevus®
(ocrelizumab) subcutaneous ("SC") for its multiple sclerosis
indications. A final decision on its approval from the European
Commission ("EC") is expected mid-2024.
- In April 2024, Roche announced
that the FDA has accepted the submission of ocrelizumab SC with
potential approval in September
2024.
- In March 2024, ViiV initiated a
Phase 1 study of VH4524184 with ENHANZE® to evaluate the
safety, tolerability, and pharmacokinetics in healthy adults.
- In the first quarter of 2024, argenx initiated two
registrational studies evaluating efgartigimod with
ENHANZE® administered by pre-filled syringe in subjects
with thyroid eye disease.
- In February 2024, argenx
announced that the FDA has accepted for priority review a
supplemental Biologics License Application ("sBLA") for
VYVGART® Hytrulo (efgartigimod alfa and
hyaluronidase-qvfc) for the treatment of chronic inflammatory
demyelinating polyneuropathy ("CIDP"). The application has been
granted a PDUFA action date of June 21,
2024.
- In February 2024, Takeda
submitted a New Drug Application in Japan seeking approval for TAK-771,
subcutaneous 10% human immunoglobulin with ENHANZE®, for
treatment of primary immunodeficiency.
- In January 2024, Janssen
announced submission of a sBLA to the FDA seeking approval of a new
indication for DARZALEX FASPRO® in combination with
bortezomib, lenalidomide and dexamethasone for induction and
consolidation treatment and with lenalidomide for maintenance
treatment of adult patients who are newly diagnosed with multiple
myeloma and are eligible for autologous stem cell transplant.
- In January 2024, Roche received
European Commission marketing authorization for
Tecentriq® subcutaneous for all approved indications of
Tecentriq® IV for multiple cancer types.
- In January 2024, Takeda received FDA approval for
HYQVIA® for the treatment of CIDP as maintenance therapy
to prevent the relapse of neuromuscular disability and impairment
in adults.
- In January 2024, Takeda received EC approval for
HYQVIA® for the treatment of CIDP as maintenance
therapy in patients of all ages after stabilization with
intravenous immunoglobulin therapy.
- In January 2024, argenx received regulatory approval in
Japan for VYVDURA®
(efgartigimod alfa and hyaluronidase-qvfc) co-formulated with
ENHANZE® for the treatment of adult patients with
generalized myasthenia gravis including options for
self-administration, and in April
2024, VYVDURA® was made available to patients
resulting in $14.0 million total
milestone payments.
Recent Corporate Highlights:
- In February 2024, the Company
announced its third share repurchase program to repurchase up to
$750 million of its outstanding
common stock.
First Quarter 2024 Financial Highlights:
- Revenue was $195.9 million
compared to $162.1 million in the
first quarter of 2023. The 21% year-over-year increase was
primarily driven by royalty revenue growth and an increase in
milestone revenue. Revenue for the quarter included $120.6 million in royalties, an increase of 21%
compared to $99.6 million in the
prior year period, primarily attributable to increases in revenue
of subcutaneous DARZALEX® (daratumumab) and
Phesgo®.
- Cost of sales was $28.3 million,
compared to $35.2 million in the
first quarter of 2023. The decrease was primarily driven by lower
bulk rHuPH20 sales, partially offset by higher proprietary product
sales.
- Amortization of intangibles expense remained flat at
$17.8 million compared to the first
quarter of 2023.
- Research and development expense was $19.1 million, compared to $18.0 million in the first quarter of 2023. The
increase was primarily due to planned investments in
ENHANZE®.
- Selling, general and administrative expense was $35.1 million, compared to $37.4 million in the first quarter of 2023. The
decrease was primarily due to reductions in commercial marketing
expense, partially offset by increased compensation expense.
- Operating income was $95.5
million, compared to $53.8
million in the first quarter of 2023.
- Net Income was $76.8 million,
compared to $39.6 million in the
first quarter of 2023.
- EBITDA and Adjusted EBITDA were $115.7
million, compared to $74.3
million in the first quarter of 2023.1
- GAAP diluted earnings per share was $0.60, compared to $0.29 in the first quarter of 2023. Non-GAAP
diluted earnings per share was $0.79,
compared to $0.47 in the first
quarter of 2023.1
- Cash, cash equivalents and marketable securities were
$463.5 million on March 31,
2024, compared to $336.0 million on
December 31, 2023. The increase was primarily a result of cash
generated from operations.
Financial Outlook for 2024
The Company is reiterating its financial guidance for 2024,
which was initially provided on January 17,
2024. For the full year 2024, the Company expects:
- Total revenue of $915 million to
$985 million, representing growth of
10% to 19% over 2023 total revenue primarily driven by increases in
royalty revenue, collaboration revenue and growth in product sales
from XYOSTED®. Revenue from royalties of $500 million to $525
million, representing growth of 12% to 17% over 2023.
- Adjusted EBITDA of $535 million
to $585 million, representing growth
of 26% to 37% over 2023.
- Non-GAAP diluted earnings per share of $3.55 to $3.90,
representing growth of 28% to 41% over 2023.1 The
Company's earnings per share guidance does not consider the impact
of potential future share repurchases.
Table 1. 2024 Financial Guidance
|
|
Guidance
Range
|
|
Total
Revenue
|
|
$915 to $985
million
|
|
Royalty
Revenue
|
|
$500 to $525
million
|
|
Adjusted
EBITDA
|
|
$535 to $585
million
|
|
Non-GAAP Diluted
EPS
|
|
$3.55 to
$3.90
|
|
Webcast and Conference Call
Halozyme will host its Quarterly Update Conference Call for the
first quarter ended March 31, 2024 today, Tuesday, May 7,
2024 at 1:30 p.m. PT/4:30 p.m. ET. The conference call may be accessed
live with pre-registration via link:
https://registrations.events/direct/Q4I871907. The call will
also 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 Halozyme.com.
About Halozyme
Halozyme is a biopharmaceutical company advancing disruptive
solutions to improve patient experiences and outcomes for emerging
and established therapies. As the innovators of ENHANZE®
drug delivery technology with the proprietary enzyme rHuPH20,
Halozyme's commercially-validated solution is used to facilitate
the subcutaneous delivery of injected drugs and fluids, with the
goal of reducing treatment burden for patients. Having touched more
than 800,000 patient lives in post-marketing use in seven
commercialized products across more than 100 global markets,
Halozyme has licensed its ENHANZE® technology to leading
pharmaceutical and biotechnology companies including Roche, Takeda,
Pfizer, Janssen, AbbVie, Eli Lilly, Bristol-Myers Squibb, argenx,
ViiV Healthcare, Chugai Pharmaceutical and Acumen
Pharmaceuticals.
Halozyme also develops, manufactures and commercializes, for
itself or with partners, drug-device combination products using its
advanced auto-injector technologies that are designed to provide
commercial or functional advantages such as improved convenience,
reliability and tolerability, and enhanced patient comfort and
adherence. The Company has two commercial proprietary products,
Hylenex® and XYOSTED®, partnered
commercial products and ongoing product development programs with
several pharmaceutical companies including Teva Pharmaceuticals and
Idorsia Pharmaceuticals.
Halozyme is headquartered in San
Diego, CA and has offices in Ewing, NJ and Minnetonka, MN. Minnetonka is also the site of its operations
facility.
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 earnings
before interest, taxes, depreciation, and amortization ("EBITDA"),
adjusted EBITDA and Non-GAAP diluted earnings per share, and
guidance with respect to those measures, in addition to, and not as
a substitute for, or superior to, financial measures calculated in
accordance with GAAP. The Company calculates non-GAAP diluted
earnings per share excluding share-based compensation expense,
amortization of debt discounts, intangible asset amortization,
inventory adjustments and certain adjustments to income tax
expense. The Company calculates EBITDA excluding interest, taxes,
depreciation and amortization. The Company calculates adjusted
EBITDA excluding one-time items. Reconciliations between GAAP and
Non-GAAP financial measures are included at the end of this press
release. The Company does not provide reconciliations of
forward-looking adjusted measures to GAAP due to the inherent
difficulty in forecasting and quantifying certain amounts that are
necessary for such reconciliation, including adjustments that could
be made for changes in share-based compensation expense and the
effects of any discrete income tax items. The Company evaluates
other items of income and expense on an individual basis for
potential inclusion in the calculation of Non-GAAP financial
measures 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 the Company'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. The Company 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. The Company uses non-GAAP
financial information in assessing what it believes is a meaningful
and comparable set of financial performance measures to evaluate
operating trends, as well as in establishing portions of our
performance-based incentive compensation programs.
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 financial
performance (including the Company's financial outlook for 2024)
and expectations for future growth, profitability, total revenue,
royalty revenue, revenue durability, EBITDA, Adjusted EBITDA,
non-GAAP diluted earnings-per-share and potential share repurchase
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 higher
volumes of injectable medications through subcutaneous delivery.
Forward-looking statements regarding the Company's 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 and clinical
data, regulatory submissions and product launches, the size and
growth prospects of our partners' drug franchises, potential new or
expanded collaborations and collaborative targets and regulatory
review, PDUFA action dates and potential approvals of new partnered
or proprietary products. These forward-looking statements are
typically, but not always, identified through use of the words
"expect," "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 business, or in
the development, regulatory review or commercialization of the
Company's partnered or proprietary products, 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
recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q
filed with the Securities and Exchange Commission. Except as
required by law, the Company undertakes no duty to update
forward-looking statements to reflect events after the date of this
release.
Contacts:
Tram Bui
VP, Investor Relations and Corporate Communications
609-359-3016
tbui@halozyme.com
Samantha Gaspar
Teneo
212-886-9356
samantha.gaspar@teneo.com
Footnotes:
1. Reconciliations between GAAP
reported and non-GAAP financial information and adjusted guidance
measures are provided at the end.
Halozyme
Therapeutics, Inc. Consolidated Statements of
Operations (Unaudited) (In thousands, except
per share amounts)
|
|
|
|
Three Months
Ended
March 31,
|
|
|
2024
|
|
2023
|
Revenues
|
|
|
|
|
Royalties
|
|
$ 120,593
|
|
$
99,640
|
Product sales,
net
|
|
58,583
|
|
60,794
|
Revenues under
collaborative agreements
|
|
16,703
|
|
1,709
|
Total
revenues
|
|
195,879
|
|
162,143
|
Operating
expenses
|
|
|
|
|
Cost of
sales
|
|
28,329
|
|
35,170
|
Amortization of
intangibles
|
|
17,763
|
|
17,835
|
Research and
development
|
|
19,111
|
|
17,979
|
Selling, general and
administrative
|
|
35,134
|
|
37,357
|
Total operating
expenses
|
|
100,337
|
|
108,341
|
Operating
income
|
|
95,542
|
|
53,802
|
Other income
(expense)
|
|
|
|
|
Investment and other
income, net
|
|
4,993
|
|
2,979
|
Interest
expense
|
|
(4,507)
|
|
(4,543)
|
Net income before
income taxes
|
|
96,028
|
|
52,238
|
Income tax
expense
|
|
19,205
|
|
12,623
|
Net income
|
|
$
76,823
|
|
$
39,615
|
|
|
|
|
|
Earnings per
share
|
|
|
|
|
Basic
|
|
$
0.61
|
|
$
0.29
|
Diluted
|
|
$
0.60
|
|
$
0.29
|
|
|
|
|
|
Weighted average common
shares outstanding
|
|
|
|
|
Basic
|
|
126,941
|
|
135,027
|
Diluted
|
|
128,887
|
|
137,900
|
Halozyme
Therapeutics, Inc. Consolidated Balance
Sheets (Unaudited) (In
thousands)
|
|
|
|
March 31,
2024
|
|
December 31,
2023
|
ASSETS
|
|
|
Current
assets
|
|
|
|
|
Cash and cash
equivalents
|
|
$
164,627
|
|
$
118,370
|
Marketable securities,
available-for-sale
|
|
298,824
|
|
217,630
|
Accounts receivable,
net and contract assets
|
|
195,902
|
|
234,210
|
Inventories,
net
|
|
168,541
|
|
127,601
|
Prepaid expenses and
other current assets
|
|
45,690
|
|
48,613
|
Total current
assets
|
|
873,584
|
|
746,424
|
Property and equipment,
net
|
|
78,071
|
|
74,944
|
Prepaid expenses and
other assets
|
|
17,319
|
|
17,816
|
Goodwill
|
|
416,821
|
|
416,821
|
Intangible assets,
net
|
|
455,116
|
|
472,879
|
Deferred tax assets,
net
|
|
616
|
|
4,386
|
Total
assets
|
|
$ 1,841,527
|
|
$
1,733,270
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
Current
liabilities
|
|
|
|
|
Accounts
payable
|
|
$
13,325
|
|
$
11,816
|
Accrued
expenses
|
|
118,314
|
|
100,678
|
Total current
liabilities
|
|
131,639
|
|
112,494
|
Long-term debt,
net
|
|
1,500,879
|
|
1,499,248
|
Other long-term
liabilities
|
|
31,201
|
|
37,720
|
Total
liabilities
|
|
1,663,719
|
|
1,649,462
|
|
|
|
|
|
Stockholders'
equity
|
|
|
|
|
Common
stock
|
|
127
|
|
127
|
Additional paid-in
capital
|
|
11,794
|
|
2,409
|
Accumulated other
comprehensive loss
|
|
(1,486)
|
|
(9,278)
|
Retained
earnings
|
|
167,373
|
|
90,550
|
Total stockholders'
equity
|
|
177,808
|
|
83,808
|
Total liabilities and
stockholders' equity
|
|
$ 1,841,527
|
|
$
1,733,270
|
Halozyme
Therapeutics, Inc. GAAP to Non-GAAP
Reconciliations EBITDA (Unaudited) (In
thousands)
|
|
|
|
Three Months
Ended
March 31,
|
|
|
2024
|
|
2023
|
GAAP Net
Income
|
|
$
76,823
|
|
$
39,615
|
Adjustments
|
|
|
|
|
Investment and other
income, net
|
|
(4,993)
|
|
(2,979)
|
Interest
expense
|
|
4,507
|
|
4,543
|
Income tax
expense
|
|
19,205
|
|
12,623
|
Depreciation and
amortization
|
|
20,206
|
|
20,457
|
EBITDA
|
|
115,748
|
|
74,259
|
Adjustments
|
|
—
|
|
—
|
Adjusted
EBITDA
|
|
$ 115,748
|
|
$
74,259
|
|
|
|
|
|
Halozyme
Therapeutics, Inc. GAAP to Non-GAAP
Reconciliations Diluted
EPS (Unaudited) (In thousands, except per share
amounts)
|
|
|
|
Three Months
Ended
March 31,
|
|
|
|
2024
|
|
2023
|
|
GAAP Diluted
EPS
|
|
$
0.60
|
|
$
0.29
|
|
Adjustments
|
|
|
|
|
|
Share-based
compensation
|
|
0.08
|
|
0.06
|
|
Amortization of debt
discount
|
|
0.01
|
|
0.01
|
|
Amortization of
intangible assets
|
|
0.14
|
|
0.13
|
|
Amortization of
inventory step-up at fair value(1)
|
|
—
|
|
0.01
|
|
Income tax effect of
above adjustments(2)
|
|
(0.04)
|
|
(0.03)
|
|
Non-GAAP Diluted
EPS
|
|
$
0.79
|
|
$
0.47
|
|
|
|
|
|
|
|
GAAP & Non-GAAP
Diluted Shares
|
|
128,887
|
|
137,900
|
|
|
Dollar amounts, as
presented, are rounded. Consequently, totals may not add
up
|
|
(1) Amounts relate to
amortization of the inventory step-up associated with purchase
accounting for the Antares acquisition.
|
(2) Adjustments relate to
taxes for the reconciling items, as well as excess benefits or tax
deficiencies from stock-based compensation,
and the quarterly impact of other
discrete items
|
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SOURCE Halozyme Therapeutics, Inc.