SAN DIEGO, Feb. 21, 2019
/PRNewswire/ -- Halozyme Therapeutics, Inc. (NASDAQ: HALO), a
biotechnology company developing novel oncology and drug-delivery
therapies, today reported financial results for the fourth quarter
and full year ended December 31, 2018
and provided an update on recent corporate activities.
"Our latest collaboration with argenx demonstrates the broad
applicability of our ENHANZE® drug delivery
technology and is a great way to start the year," said Dr.
Helen Torley, president and chief
executive officer. "We anticipate multiple additional key
milestones in our ENHANZE® business
including potential approval of
Herceptin® SC later this quarter and
potential regulatory submissions for a subcutaneous formulation of
Darzalex® in the second half of the
year. With a total of nine
ENHANZE® collaborations spanning from
established products to new, innovative therapies addressing unmet
needs, we remain confident in the potential for $1 billion in royalty revenue in 2027."
"Our PEGPH20 oncology program achieved a critical milestone
during the fourth quarter with the completion of enrollment in our
pivotal HALO-301 pancreas cancer study with approximately 500
patients. We also reached agreement with the FDA to change the
primary endpoint for HALO-301 to a single primary endpoint of
overall survival (OS), which we believe incrementally de-risked the
study. We look forward with excitement to topline results from
HALO-301, which we currently project in the second half of
2019."
Fourth Quarter 2018 and Recent Highlights Include:
- In February 2019, Halozyme
licensed its ENHANZE® drug delivery
technology to argenx providing exclusive access to
ENHANZE® for any product targeting the human
neonatal Fc receptor FcRn, including argenx's lead asset
efgartigimod (ARGX-113), and up to two additional targets.
Under the terms of the agreement, argenx paid an upfront payment of
$30 million to Halozyme, and will pay
Halozyme $10 million per target for
future target nominations and potential future payments of up to
$160 million per selected target
subject to achievement of specified development, regulatory and
sales-based milestones. Halozyme will also receive mid-single digit
royalties on sales of commercialized products.
- In January 2019, the U.S. Food
and Drug Administration completed its review of the submitted
clinical study protocol amendment and statistical analysis plan for
HALO-301, which included a change in the primary endpoint to a
single primary endpoint of overall survival (OS), with no
additional questions or comments.
- In December, enrollment in HALO-301, the company's Phase 3
study evaluating PEGPH20 in metastatic pancreas cancer, was
completed with approximately 500 subjects enrolled. The company
projects the study will achieve its target of 330 OS events between
August and November of 2019. Based on achieving this timeline, the
company projects topline results will be available in the second
half of 2019.
- In December, Roche dosed the first patient in a Phase
1b/2 study of Tecentriq®
(atezolizumab) with ENHANZE® triggering a $5
million milestone payment to Halozyme.
- During the fourth quarter, BMS began recruitment for a Phase 1
study of OPDIVO® (nivolumab) with ENHANZE®.
- ENHANZE® partner Janssen continued to
make progress in clinical studies for a subcutaneous co-formulation
of Darzalex® (daratumumab) with the recent
initiation of two additional Phase 3 trials. Janssen is planning
regulatory filings in the second half of 2019.
- In October, Halozyme expanded its collaboration with Roche by
licensing its ENHANZE® drug-delivery
technology for exclusive development of a new undisclosed clinical
stage therapeutic target resulting in an upfront payment of
$25 million.
Fourth Quarter and Full Year 2018 Financial
Highlights
- Revenue for the fourth quarter was $60.2
million compared to $189.6
million for the fourth quarter of 2017. The year-over-year
decrease was driven by $141.4 million
upfront license fees for the BMS and Alexion agreements and a
$15.0 million milestone payment from
Janssen recognized in 2017, compared to $30.0 million in upfront and milestone revenue
for the Roche collaboration recognized in 2018. The decrease was
offset by a 9 percent growth in royalties on a reported basis from
partner sales. Revenue for the fourth quarter included $19.3 million in royalties and $4.2 million in HYLENEX® recombinant
(hyaluronidase human injection) product sales.
- Revenue for the full year was $151.9
million, compared to $316.6
million in 2017.
- Revenue from royalties for the full year was $79.0 million, up 24% on an as-reported basis
compared to $63.5 million in
2017.
- Research and development expenses for the fourth quarter were
$36.7 million, compared to
$41.4 million for the fourth quarter
of 2017.
- Research and development expenses for the full year were
$150.3 million, compared to
$150.6 million in 2017.
- Selling, general and administrative expenses for the fourth
quarter were $18.0 million, compared
to $14.8 million for the fourth
quarter of 2017.
- Selling, general and administrative expenses for 2018 were
$60.8 million, compared to
$53.8 million in 2017.
- Net loss for the fourth quarter was $2.1
million, or $0.01 per share,
compared to net income in the fourth quarter of 2017 of
$123.9 million, or $0.85 per share.
- Net loss for the full year was $80.3
million, or $0.56 per share,
compared to net income of $63.0
million in 2017, or $0.45 per
share.
- Cash, cash equivalents and marketable securities were
$354.5 million at December 31, 2018, compared to $469.2 million at December
31, 2017.
Financial Outlook for 2019
Halozyme updated its 2019 financial guidance, first provided on
January 9, 2019, to reflect the
recent argenx collaboration and license agreement:
- Net revenue of $205 million to
$215 million, excluding revenue from
any additional, new ENHANZE® global collaboration and
licensing agreements;
- Operating expenses of $265
million to $275 million, or
$225 million to $235 million excluding an expected increase in
cost of goods sold. Excluding the cost of goods sold the modest
increase in expenses is driven by ENHANZE® partner
support, and support of the potential commercialization of
PEGPH20;
- 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.
Webcast and Conference Call
Halozyme will webcast its Quarterly Update Conference Call for
the fourth quarter of 2018 today, Thursday,
February 21 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 (877) 410-5657 (domestic
callers) or (334) 323-7224 (international callers) using passcode
387156. 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 68892505.
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 Annual
Report on Form 10-K filed with the Securities and Exchange
Commission on February 21, 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
|
|
Twelve Months
Ended
|
|
|
|
December
31,
|
|
December
31,
|
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
Revenues:
|
|
|
|
|
|
|
|
|
Royalties
|
|
$
|
19,338
|
|
|
$
|
17,668
|
|
|
$
|
78,981
|
|
|
$
|
63,507
|
|
Product sales,
net
|
|
10,681
|
|
|
12,593
|
|
|
28,234
|
|
|
50,396
|
|
Revenues under
collaborative agreements
|
|
30,213
|
|
|
159,303
|
|
|
44,647
|
|
|
202,710
|
|
Total
revenues
|
|
60,232
|
|
|
189,564
|
|
|
151,862
|
|
|
316,613
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
Cost of product
sales
|
|
5,622
|
|
|
7,488
|
|
|
10,136
|
|
|
31,152
|
|
Research and
development
|
|
36,650
|
|
|
41,376
|
|
|
150,252
|
|
|
150,643
|
|
Selling, general and
administrative
|
|
18,031
|
|
|
14,771
|
|
|
60,804
|
|
|
53,816
|
|
Total operating
expenses
|
|
60,303
|
|
|
63,635
|
|
|
221,192
|
|
|
235,611
|
|
|
|
|
|
|
|
|
|
|
Operating (loss)
income
|
|
(71)
|
|
|
125,929
|
|
|
(69,330)
|
|
|
81,002
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
Investment and other
income, net
|
|
2,017
|
|
|
1,080
|
|
|
7,578
|
|
|
2,592
|
|
Interest
expense
|
|
(3,755)
|
|
|
(5,458)
|
|
|
(18,041)
|
|
|
(21,984)
|
|
Net (loss) income
before income taxes
|
|
(1,809)
|
|
|
121,551
|
|
|
(79,793)
|
|
|
61,610
|
|
Income tax
expense
|
|
317
|
|
|
(2,331)
|
|
|
537
|
|
|
(1,361)
|
|
Net (loss)
income
|
|
$
|
(2,126)
|
|
|
$
|
123,882
|
|
|
$
|
(80,330)
|
|
|
$
|
62,971
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income per
share:
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
(0.01)
|
|
|
$
|
0.87
|
|
|
$
|
(0.56)
|
|
|
$
|
0.46
|
|
Diluted
|
|
$
|
(0.01)
|
|
|
$
|
0.85
|
|
|
$
|
(0.56)
|
|
|
$
|
0.45
|
|
|
|
|
|
|
|
|
|
|
Shares used in
computing net (loss) income per share:
|
|
|
|
|
|
|
|
|
Basic
|
|
144,203
|
|
|
141,718
|
|
|
143,599
|
|
|
136,419
|
|
Diluted
|
|
144,203
|
|
|
145,633
|
|
|
143,599
|
|
|
139,068
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Halozyme
Therapeutics, Inc.
|
Condensed
Consolidated Balance Sheets
|
(Unaudited)
|
(In
thousands)
|
|
|
|
December 31,
2018
|
|
December 31,
2017
|
ASSETS
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
57,936
|
|
|
$
|
168,740
|
|
Marketable
securities, available-for-sale
|
|
296,590
|
|
|
300,474
|
|
Accounts receivable,
net
|
|
30,005
|
|
|
22,133
|
|
Inventories
|
|
22,625
|
|
|
5,146
|
|
Prepaid expenses and
other assets
|
|
20,693
|
|
|
13,879
|
|
Total current
assets
|
|
427,849
|
|
|
510,372
|
|
Property and
equipment, net
|
|
7,465
|
|
|
3,520
|
|
Prepaid expenses and
other assets
|
|
4,434
|
|
|
5,553
|
|
Restricted
cash
|
|
500
|
|
|
500
|
|
Total
assets
|
|
$
|
440,248
|
|
|
$
|
519,945
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
|
$
|
4,079
|
|
|
$
|
7,948
|
|
Accrued
expenses
|
|
49,529
|
|
|
39,601
|
|
Deferred revenue,
current portion
|
|
4,247
|
|
|
6,568
|
|
Current portion of
long-term debt, net
|
|
91,506
|
|
|
77,211
|
|
Total current
liabilities
|
|
149,361
|
|
|
131,328
|
|
|
|
|
|
|
Deferred revenue, net
of current portion
|
|
5,008
|
|
|
54,297
|
|
Long-term debt,
net
|
|
34,874
|
|
|
125,140
|
|
Other long-term
liabilities
|
|
2,118
|
|
|
814
|
|
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
|
Common
stock
|
|
145
|
|
|
143
|
|
Additional paid-in
capital
|
|
780,457
|
|
|
731,044
|
|
Accumulated other
comprehensive loss
|
|
(277)
|
|
|
(450)
|
|
Accumulated
deficit
|
|
(531,438)
|
|
|
(522,371)
|
|
Total stockholders'
equity
|
|
248,887
|
|
|
208,366
|
|
Total liabilities and
stockholders' equity
|
|
$
|
440,248
|
|
|
$
|
519,945
|
|
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SOURCE Halozyme Therapeutics, Inc.