Total Revenue Increased 34% YOY to
$290 million and Royalty Revenue
Increased 36% YOY to $155
million
Net Income Increased 67% YOY to $137 million and Adjusted EBITDA Increased 60%
YOY to $184 million
GAAP Diluted EPS Increased 72% YOY to
$1.05 and Non-GAAP Diluted EPS
Increased 69% YOY to $1.271
Raised 2024 Financial Guidance Ranges for
Total Revenue of $970-$1,020 million, Representing YOY Growth of
17%-23%, Adjusted EBITDA of $595-$625 million,
Representing YOY Growth of 40%-47%, and Non-GAAP Diluted EPS of
$4.00-$4.20, Representing YOY Growth of 44%-52%
SAN
DIEGO, Oct. 31, 2024 /PRNewswire/ -- Halozyme
Therapeutics, Inc. (NASDAQ: HALO) ("Halozyme" or the "Company")
today reported its financial and operating results for the third
quarter ended September 30, 2024, and
provided an update on its recent corporate activities and
outlook.
"Our robust third quarter financial results highlight the strong
execution and accelerating momentum we have across our business and
exceeded expectations with total revenue growth of 34% and adjusted
EBITDA growth of 60%. Based on the strong performance year-to-date,
we have raised our 2024 guidance ranges and expect the advancement
of our ENHANZE pipeline and new nominations from two global
licensing agreements to support our future growth trajectory," said
Dr. Helen Torley, president and
chief executive officer of Halozyme. "In the quarter, the
announcement of two highly anticipated partner approvals in the
U.S. for Roche's TECENTRIQ HYBREZA and OCREVUS ZUNOVO reinforces
ENHANZE's track record of 100% phase 3 study and subsequent
regulatory success. The new nominations for ENHANZE from argenx,
for a total of six targets, and ViiV Healthcare, for an additional
undisclosed target, further demonstrate the value of our leading
technology for rapid, large volume subcutaneous delivery."
Recent Partner Highlights:
- In October 2024, argenx initiated
two studies evaluating VYVGART® Hytrulo with
ENHANZE®, a Phase 3 study for adult patients with ocular
myasthenia gravis ("oMG") and a Phase 2 study for kidney transplant
recipients with antibody mediated rejection ("AMR").
- In October 2024, Janssen
announced the European Commission approved DARZALEX® SC
for the treatment of patients newly diagnosed with multiple myeloma
("NDMM") who are eligible for autologous stem cell transplant
("ASCT") in combination with bortezomib, lenalidomide, and
dexamethasone ("D-VRd").
- In September 2024, argenx
expanded its global collaboration and license agreement nominating
four additional targets that provides them exclusive access to our
ENHANZE® drug delivery technology for a total of six
targets. Under the terms of the expanded exclusive agreement, we
received upfront payments of $7.5
million per target nomination for a total of $30.0 million. argenx is obligated to make future
milestone payments of up to $85.0
million per new nominated target, subject to achievements of
specified development, regulatory and sales-based milestones. We
are also entitled to receive royalties on net sales of
commercialized products with our ENHANZE®
technology.
- In September 2024, ViiV expanded
its global collaboration and license agreement providing ViiV the
ability to exclusively access our ENHANZE® drug delivery
technology for one additional undisclosed target.
- In September 2024, Roche
announced the U.S. Food and Drug Administration ("FDA") approved
OCREVUS ZUNOVO™ with ENHANZE® as a twice a year
ten-minute subcutaneous ("SC") injection for the treatment of
relapsing multiple sclerosis and primary progressive multiple
sclerosis.
- In September 2024, Roche
announced the FDA approved TECENTRIQ HYBREZA™ with
ENHANZE® for all approved adult indications of
intravenous ("IV") TECENTRIQ® and was made available to
patients, resulting in a $12.0
million milestone payment.
- In September 2024, Janssen
announced the submission of a supplemental Biologic License
Application to the FDA for approval of a new indication of DARZALEX
FASPRO® in combination with D-VRd for the treatment of
adult patients with NDMM for whom ASCT is deferred or who are
ineligible for ASCT.
- In August 2024, the FDA
designated Janssen's Biologics License Application ("BLA") priority
review status for amivantamab SC in combination with LAZCLUZE™ for
currently approved or submitted indication of IV in certain
patients with non-small cell lung cancer.
- In August 2024, Takeda submitted
a New Drug Application in Japan
seeking approval for TAK-771 with ENHANZE® for treatment
of chronic inflammatory demyelinating polyneuropathy/Multifocal
Motor Neuropathy.
- In July 2024, Janssen announced
the FDA approved DARZALEX FASPRO® for an additional
indication in NDMM patients who are eligible for ASCT in
combination with D-VRd.
- In July 2024, argenx announced
the National Medical Products Administration approved the BLA of
efgartigimod SC for generalized myasthenia gravis in China.
- In July 2024, Acumen initiated a
Phase 1 study of sabirnetug ("ACU193") co-formulated with
ENHANZE® for the treatment of early Alzheimer's
disease.
Third Quarter 2024 Financial Highlights:
- Revenue was $290.1 million,
compared to $216.0 million in the
third quarter of 2023. The 34% year-over-year increase was
primarily driven by royalty revenue growth and an increase in
milestone revenue. Revenue for the quarter included $155.1 million in royalties, an increase of 36%
compared to $114.4 million in the
third quarter of 2023, primarily attributable to increases in
revenue of DARZALEX® SC and Phesgo®, and the
prior year launch of VYVGART® Hytrulo.
- Cost of sales was $49.4 million,
compared to $54.8 million in the
third quarter of 2023. The decrease was primarily due to lower
device and bulk rHuPH20 sales.
- Amortization of intangibles expense was $17.8 million, compared to $20.3 million in the third quarter of 2023. The
decrease was primarily due to an impairment charge of $2.5 million recognized in the prior year to
fully impair the TLANDO® product rights intangible
asset.
- Research and development expense was $18.5 million, compared to $17.3 million in the third quarter of 2023. The
increase was primarily due to increased compensation expense.
- Selling, general and administrative expense was $41.2 million, compared to $35.3 million in the third quarter of 2023. The
increase was primarily due to increased compensation expense and
consulting and professional service fees.
- Operating income was $163.2
million, compared to $88.3
million in the third quarter of 2023.
- Net Income was $137.0 million,
compared to $81.8 million in the
third quarter of 2023.
- EBITDA was $183.6 million,
compared to $124.6 million in the
third quarter of 2023. Adjusted EBITDA was $183.6 million, compared to $114.9 million in the third quarter of
2023.1
- GAAP diluted earnings per share was $1.05, compared to $0.61 in the third quarter of 2023. Non-GAAP
diluted earnings per share was $1.27,
compared to $0.75 in the third
quarter of 2023.1
- Cash, cash equivalents and marketable securities were
$666.3 million on September 30, 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 raising its financial guidance for 2024. For the
full year 2024, the Company expects:
- Total revenue of $970 million to
$1,020 million, representing growth
of 17% to 23% over 2023 total revenue primarily driven by increases
in royalty revenue, collaboration revenue and growth in product
sales from XYOSTED®. Revenue from royalties of
$550 million to $565 million, representing growth of 23% to 26%
over 2023.
- Adjusted EBITDA of $595 million
to $625 million, representing growth
of 40% to 47% over 2023.
- Non-GAAP diluted earnings per share of $4.00 to $4.20,
representing growth of 44% to 52% over 2023. The Company's earnings
per share guidance does not consider the impact of potential future
share repurchases.
Table 1. 2024 Financial Guidance
|
|
Previous Guidance
Range
|
New Guidance
Range
|
|
Total
Revenue
|
|
$935 to $1,015
million
|
$970 to $1,020
million
|
|
Royalty
Revenue
|
|
$520 to $555
million
|
$550 to $565
million
|
|
Adjusted
EBITDA
|
|
$555 to $615
million
|
$595 to $625
million
|
|
Non-GAAP Diluted
EPS
|
|
$3.65 to
$4.05
|
$4.00 to
$4.20
|
Webcast and Conference Call
Halozyme will host its Quarterly Update Conference Call for the
third quarter ended September 30,
2024 today, Thursday, October 31,
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/Q4I7813747. 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 improving the patient experience with rapid subcutaneous
delivery and reduced treatment burden. Having touched more
than 800,000 patient lives in post-marketing use in eight
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
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,
one-time changes in contingent liabilities, inventory adjustments,
impairment charges, and certain adjustments to income tax expense.
The Company calculates non-GAAP diluted shares excluding the
dilutive impact of convertible notes which is used in calculating
non-GAAP diluted earnings. The Company calculates EBITDA excluding
interest, taxes, depreciation and amortization. The Company
calculates adjusted EBITDA excluding one-time items such as changes
in contingent liabilities and inventory adjustments.
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, EBITDA, Adjusted EBITDA, and non-GAAP diluted
earnings-per-share. 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, and
potential approvals of new partnered or proprietary products, and
the potential timing of these events. 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 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 for actual results are provided
at the end.
|
Halozyme
Therapeutics, Inc.
Condensed Consolidated
Statements of Operations
(Unaudited)
(In
thousands, except per share amounts)
|
|
|
|
Three Months
Ended
September 30,
|
|
Nine Months
Ended
September 30,
|
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
Royalties
|
|
$ 155,061
|
|
$ 114,433
|
|
$ 400,572
|
|
$ 325,813
|
|
Product sales,
net
|
|
86,659
|
|
86,569
|
|
224,128
|
|
221,252
|
|
Revenues under
collaborative agreements
|
|
48,364
|
|
15,031
|
|
92,616
|
|
52,149
|
|
Total
revenues
|
|
290,084
|
|
216,033
|
|
717,316
|
|
599,214
|
|
Operating
expenses
|
|
|
|
|
|
|
|
|
|
Cost of
sales
|
|
49,426
|
|
54,823
|
|
117,362
|
|
140,063
|
|
Amortization of
intangibles
|
|
17,762
|
|
20,341
|
|
53,287
|
|
56,011
|
|
Research and
development
|
|
18,458
|
|
17,321
|
|
58,607
|
|
55,027
|
|
Selling, general and
administrative
|
|
41,241
|
|
35,269
|
|
112,086
|
|
111,574
|
|
Total operating
expenses
|
|
126,887
|
|
127,754
|
|
341,342
|
|
362,675
|
|
Operating
income
|
|
163,197
|
|
88,279
|
|
375,974
|
|
236,539
|
|
Other income
(expense)
|
|
|
|
|
|
|
|
|
|
Investment and other
income, net
|
|
6,474
|
|
4,786
|
|
16,499
|
|
10,957
|
|
Contingent liability
fair value measurement gain
|
|
—
|
|
13,200
|
|
—
|
|
13,200
|
|
Interest
expense
|
|
(4,524)
|
|
(4,505)
|
|
(13,555)
|
|
(13,542)
|
|
Income before income
tax expense
|
|
165,147
|
|
101,760
|
|
378,918
|
|
247,154
|
|
Income tax
expense
|
|
28,136
|
|
19,923
|
|
71,839
|
|
50,948
|
|
Net income
|
|
$ 137,011
|
|
$
81,837
|
|
$ 307,079
|
|
$ 196,206
|
|
|
|
|
|
|
|
|
|
|
Earnings per
share
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$ 1.08
|
|
$ 0.62
|
|
$ 2.42
|
|
$ 1.48
|
|
Diluted
|
|
$ 1.05
|
|
$ 0.61
|
|
$ 2.37
|
|
$ 1.45
|
|
|
|
|
|
|
|
|
|
|
Weighted average common
shares outstanding
|
|
|
|
|
|
|
|
|
|
Basic
|
|
126,850
|
|
131,965
|
|
126,969
|
|
132,896
|
|
Diluted
|
|
130,134
|
|
134,083
|
|
129,526
|
|
135,233
|
|
Halozyme
Therapeutics, Inc.
Condensed Consolidated Balance
Sheets
(Unaudited)
(In
thousands)
|
|
|
|
September
30,
2024
|
|
December 31,
2023
|
|
ASSETS
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
154,318
|
|
$
118,370
|
|
Marketable securities,
available-for-sale
|
|
511,988
|
|
217,630
|
|
Accounts receivable,
net and contract assets
|
|
285,743
|
|
234,210
|
|
Inventories
|
|
131,412
|
|
127,601
|
|
Prepaid expenses and
other current assets
|
|
43,515
|
|
48,613
|
|
Total current
assets
|
|
1,126,976
|
|
746,424
|
|
Property and equipment,
net
|
|
74,490
|
|
74,944
|
|
Prepaid expenses and
other assets
|
|
80,151
|
|
17,816
|
|
Goodwill
|
|
416,821
|
|
416,821
|
|
Intangible assets,
net
|
|
419,592
|
|
472,879
|
|
Deferred tax assets,
net
|
|
—
|
|
4,386
|
|
Total
assets
|
|
$ 2,118,030
|
|
$
1,733,270
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
Accounts
payable
|
|
$
12,398
|
|
$
11,816
|
|
Accrued
expenses
|
|
96,417
|
|
100,678
|
|
Total current
liabilities
|
|
108,815
|
|
112,494
|
|
Long-term debt,
net
|
|
1,504,154
|
|
1,499,248
|
|
Other long-term
liabilities
|
|
40,406
|
|
37,720
|
|
Deferred tax
liabilities, net
|
|
11,952
|
|
—
|
|
Total
liabilities
|
|
1,665,327
|
|
1,649,462
|
|
|
|
|
|
|
Stockholders'
equity
|
|
|
|
|
|
Common
stock
|
|
127
|
|
127
|
|
Additional paid-in
capital
|
|
61,886
|
|
2,409
|
|
Accumulated other
comprehensive loss
|
|
(6,939)
|
|
(9,278)
|
|
Retained
earnings
|
|
397,629
|
|
90,550
|
|
Total stockholders'
equity
|
|
452,703
|
|
83,808
|
|
Total liabilities and
stockholders' equity
|
|
$ 2,118,030
|
|
$
1,733,270
|
|
Halozyme
Therapeutics, Inc.
GAAP to Non-GAAP
Reconciliations
EBITDA
(Unaudited)
(In
thousands)
|
|
|
|
Three Months
Ended
September 30,
|
|
|
2024
|
|
2023
|
|
GAAP Net
Income
|
|
$
137,011
|
|
$ 81,837
|
|
Adjustments
|
|
|
|
|
|
Investment and other
income, net
|
|
(6,475)
|
|
(4,786)
|
|
Interest
expense
|
|
4,524
|
|
4,505
|
|
Income tax
expense
|
|
28,136
|
|
19,923
|
|
Depreciation and
amortization
|
|
20,360
|
|
23,078
|
|
EBITDA
|
|
183,556
|
|
124,557
|
|
Adjustments
|
|
|
|
|
|
Gain on changes in
fair value of contingent liability(1)
|
|
—
|
|
(13,200)
|
|
Inventory
write-off(2)
|
|
—
|
|
3,509
|
|
Adjusted
EBITDA
|
|
$
183,556
|
|
$
114,866
|
|
|
|
(1)
|
Amount relates to fair
value gain on contingent liability due to the termination of the
TLANDO license agreement in September 2023 ("TLANDO
Termination").
|
|
(2)
|
Amount relates to
inventory write-off due to TLANDO Termination and amortization of
the inventory step-up associated with purchase accounting for the
prior year acquisition of Antares Pharma, Inc.
|
|
Halozyme
Therapeutics, Inc.
GAAP to Non-GAAP
Reconciliations
Diluted
EPS
(Unaudited)
(In thousands, except per share
amounts)
|
|
|
|
Three Months
Ended
September 30,
|
|
|
2024
|
|
2023
|
|
|
|
|
|
|
GAAP Diluted
EPS
|
|
$
1.05
|
|
$
0.61
|
|
Adjustments
|
|
|
|
|
|
Share-based
compensation
|
|
0.10
|
|
0.07
|
|
Amortization of debt
discount
|
|
0.01
|
|
0.01
|
|
Amortization of
intangible assets
|
|
0.14
|
|
0.13
|
|
TLANDO Related
Adjustments
|
|
|
|
|
|
Gain on changes in
fair value of contingent liability(1)
|
|
—
|
|
(0.10)
|
|
Inventory
write-off(1)
|
|
—
|
|
0.03
|
|
Impairment charge of
TLANDO product rights intangible assets(1)
|
|
—
|
|
0.02
|
|
Income tax effect of
above adjustments(2)
|
|
(0.03)
|
|
(0.03)
|
|
Non-GAAP Diluted
EPS
|
|
$
1.27
|
|
$
0.75
|
|
|
|
|
|
|
GAAP Diluted
Shares
|
|
130,134
|
|
134,083
|
|
Adjustments
|
|
130,134
|
|
134,083
|
|
Adjustment for
dilutive impact of senior 2028 Convertible
Notes(3)
|
|
(293)
|
|
—
|
|
Non-GAAP Diluted
Shares
|
|
129,841
|
|
134,083
|
|
|
|
Dollar amounts, as
presented, are rounded. Consequently, totals may not add
up.
|
|
|
|
(1)
|
Amounts relate to fair
value gain on contingent liability, inventory write-off and
impairment of TLANDO product rights intangible assets due to the
TLANDO Termination.
|
|
(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.
|
|
(3)
|
Adjustment made for the
dilutive effect of our Convertible Senior Notes due 2028 when the
effect is not the same on a GAAP and non-GAAP basis for the
reporting period.
|
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SOURCE Halozyme Therapeutics, Inc.