Q4 2021 Halozyme Therapeutics Inc Earnings Call
Good afternoon, everyone. My name is Lisa and I will be your conference operator today at this time I would like to welcome everyone to the house on fourth quarter and full year 2021 financial results Conference call.
All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. If he would like to ask a question. During this time simply press star one on your telephone keypad if.
If you would like to withdraw your question Press Star one again.
At this time I would like to hand things over to Mr. Al killed Donnie. Please go ahead Sir.
Good afternoon, and welcome to our fourth quarter and full year 2021 financial results Conference call.
In addition to our press release issued today. After the close you can find a supplementary slide presentation that will be referenced during today's call in the Investor Relations section of our website, leading the call will be Dr. Helen Torley <unk>.
President and Chief Executive Officer, who will provide an update on our business and Nicole Nebraska, Our new Chief Financial Officer, who will review our financial results for the fourth quarter.
On today's call, both GAAP and non-GAAP financial measures will be discussed.
The non-GAAP or adjusted financial measures are reconciled with comparable GAAP financial measures in our earnings press release and slide presentation.
During the call we will be making forward looking statements I refer you to our SEC filings for a full listing of the risks and uncertainties.
I'll now turn the call over to our CEO Helen Torley.
Thank you al I'm very pleased to welcome Nick Coulter the call on behalf.
New role as our Chief financial Officer, after being such a terrific job as our VP of finance and does that controller.
I'm going to begin today with a brief review of our record 2021 financial performance, which has created strong momentum entering 2022.
Total revenues in 2021 grew 66% year over year to $443 million operating income grew 91% to $276 million.
non-GAAP earnings per share for the year was $2 <unk>.
All of these measures are within the range of our final 2021 guidance.
The strong 66% revenue growth was driven by royalty revenue growth of 130% year over year is $40 million upfront milestone payments for the signing of our 11th enhanced collaboration agreement with speed healthcare and additional development and commercial milestones associated with launch progress and the strong momentum.
In our development portfolio, where we achieved our goal of 10 Newport Our study starts in 2021.
This strong progress and results revenue growth allowed us to continue to demonstrate our strong commitment to capital return through completion of our $550 million share buyback plan.
In October of 2021, and the announcement of a new three year $750 million share repurchase program inclusive of $160 million et cetera did share repurchase program, which was initiated in December 2021.
These achievements and the resultant momentum has positioned us well for continued revenue and operating income growth in 2022 and beyond.
In January we provided our 2022 guidance.
For full year 2022, we expect revenues of 531 million to $560 million, which represent growth of 22% to 26% driven primarily by projected royalty revenue of approximately 50%.
Also contributing to our revenue production. This year, we have included a milestone payment in our guidance based on our expectation for a new agreement to be signed in 2022.
Operating income is projected to be $350 million to $380 million, so robust growth of 27% to 38%.
We expect non-GAAP earnings per share of $2 <unk> dollars 20 with.
We're calling that in 2022, we're seeing the impact of our first year tax expense, which is projected to be 55 to <unk> 60 per share.
With that overview, let me now provide some additional details beginning with the royalty revenue growth starting with a summary of 2021 results shown on slide three.
Royalties during the fourth quarter were $62 6 million. This represented 96% growth year over year and 7% sequential growth.
This resulted in full year 2021 revenue from royalties of $204 million.
Representing approximately 130% year over year growth from $89 million in 2020.
Royalty revenue growth continues to be driven primarily by the successful ongoing global launches of Janssen subcutaneous forms of <unk>, which utilizes our enhanced technology.
Based on the strong momentum of this high margin recurring revenue stream. We project continued royalty revenue growth in 2022 with growth of approximately 50% to approximately $300 million.
Moving now to slide four with five commercialized products utilizing chance that are contributing to our royalty revenues.
It's estimated that these products are being used to treat more than 600000 patients globally.
Our wave two products Janssen stars like sub Q, and most especially the current royalty revenue growth drivers and a substantial growth opportunities ahead for each of them.
Turning to slide five I'll review <unk>.
During the fourth quarter call Johnson, <unk> Johnson, and Johnson reported that following strong fourth quarter sales totaled <unk> sales in 2021, including both IV and so Q4 6 billion.
And a remarkable 42, 3% on an operational basis over 2020.
J&J further stated that the fourth quarter growth was driven by a combination of share gains increased penetration of the subcutaneous formulation in the U S and Europe and continuing launches globally.
Notably <unk> share increased across all lines of therapy with nearly eight points of share growth in the United States.
Turning now to the performance of dark likes SCE using intense which is shown on the right slide <unk> in the United States grew again during the quarter and achieved 76% share of total <unk> sales in the month of December an increase from 72% share of total sales at the end of September .
We estimate the dark lets us see achieved an annualized share of approximately 58% total Darwin sales in 2021.
We project continued strong <unk> growth and resulting growth in our royalty revenues driven by continued growth in the worldwide total doors like sales, which are projected by analysts to increase to approximately $10 billion in 2025 and continued growth in the annualized subcutaneous sure to be notably higher than the current 58%.
Beyond the strong commercialization and financial performance key developments for the subcutaneous Starbucks franchise with Janssen in the quarter included an FDA approval for <unk> in combination with Kyprolis and dexamethasone, which is for patients with relapsed or refractory multiple myeloma, who have received one to three prior lines.
<unk> therapy.
This represented the indication for which starplex faster has been approved in the United States.
<unk> was also received from the China National Medical products administration for the use of <unk> for the treatment of newly diagnosed primary light chain amyloidosis.
I'll move now to our second half our wave two products and driver of royalty revenue growth in that sense Bill.
In the fourth quarter Roche reported fourth quarter sales of 127 million Swiss francs upfront 117 million Swiss francs in the third quarter.
<unk> sales for the year was 340 million Swiss francs.
We continue to expect strong quarter over quarter growth of Fayetteville, as a result of the ongoing launches in Europe and rest of world following attainment of reimbursement and continued penetration into oncology accounts in the United States.
Let me move now to slide six and a discussion of the intense development portfolio.
It is our goal to continuously expand the number of products that are in development and to advance products to later stages of development launch or in many cases. This is associated with milestone revenue payments to handle that.
I'll begin with an overview of the enhance partner product pipeline as of February 2022, I'm pleased to report that our enhanced partners initiated four new phase one trial in the fourth quarter each of our new product. The resulted in an expense in all of our development portfolio specifically.
Specifically in December <unk> initiated enrollment of a phase one study to evaluate capital Goodyear administered subcutaneously with enhance and Janssen also initiated a phase one clinical trial evaluating their small molecule brookfield rate with enhanced.
In November Roche initiated a phase one study combining an undisclosed therapy in target with enhance and in October Takeda initiated the phase one study.
Our ability and safety of immune globulin subcutaneous, 20%, so listen with enhanced.
These new programs are reflected in the updated pipeline chart on slide six with these four phase one study initiations, we exceeded our goal of five new phase one trial start in 2021, achieving a total of six.
Our goal is to have three products in phase III development and to expand the total number of programs in development.
Going ahead for 2022, we expect further pipeline progress and expansion with at least five new phase II or III trial starts for existing enhanced partner programs and four new products utilizing <unk> to enter phase one development by the end of 2022.
Staying on slide six let me now provide a brief update on the next set of potential launches, which we call our wave three launches.
All of our wave three potential launch products are currently approved drugs and are in phase III development at the subcutaneous drug with it hence based.
Based on historical development timelines these represent potential launches in the 2023 to 2025 timeframe and include Bristol Myers, Squibb's, Ebola, Matt <unk> of Lytham that Genesis and cartridge demand.
Analysts project total revenue potential for both the IBM sub Q formulation for this next set of our potential launches will exceed $20 billion in 2025.
What will be key for heelys on is the pace of conversion from IV to subcutaneous and the peak conversion share attained.
Let me move to organic does that particular model at which now has the brand name <unk>.
<unk> was approved IV form by the FDA in December of last year for the treatment of patients with myasthenia gravis.
Currently leading the race to become the first of our wave three product launches with the potential for approval in 2023.
Moving to the subcutaneous development organics is integrated and broadly in its strategy and vision for SRT demand with five phase III studies for five distinct indications now ongoing.
The most advanced FC study is for myasthenia gravis Excitingly <unk> now expects top line data from adapt SC study that strategic moat with enhanced or myasthenia gravis in the first quarter of this year.
Three additional top line data Readouts of Scf prediction on what studies are expected in the next 12 months or so with data from the Pemphigus study in the fourth quarter of this year and from ETP in the CIB studies in the first quarter of 2023.
We're also pleased to add that in December <unk> initiated a trial of subcutaneous at particular, bullous pemphigoid fixed indication to be evaluated.
The projected size of the addressable populations and the large unmet need that exists in each of these indications are resulting in analysts projecting a multibillion dollar opportunity for <unk>.
Moving now to the additional week three products <unk> <unk> and Bms's Opdivo continues to progress in their phase III study evaluating SC deliveries with enhance and these also have the potential for launch in the 23 to 25 timeframe.
Now I'll move to the top of this slide are the products that are in or completed phase one development.
We call. These our wave for potential launch products and we have the potential to launch in the 2025 to 2027 timeframe.
Clearly this pipeline represents a broad diverse and exciting set of opportunities.
Today I'll focus on highlighting series of new studies in HIV.
<unk> is being studied in both small and large molecules.
We're delighted that <unk> initiated a phase one study of HIV therapy, Cabot's CAGR Baird in combination with enhanced <unk>.
As previously indicated that he would expect phase one data from this study and from another study with enhanced which will include Theyre broadly neutralizing antibody and <unk> in 2022.
Veeva is clearly moving at a rapid pace and we're delighted to be supporting them in their mission for HIV patients.
In addition, Janssen initiated the phase one study of their small molecule product will pilfering with enhanced this was the third target Janssen has no study with enhanced.
And finally, Janssen <unk> NV together have indicated they plan to explore the possibility of an ultra long acting version of Kevin Uva using enhanced.
<unk> is a co packaged anti retroviral medication for the treatment of HIV containing both cabot's heck of here and where appropriate.
Let me move now to slide seven.
<unk> progress to date really has been able to drive collaborative revenues per hail events, which are a key contributor to our cash flow and have enabled our commitment to capital return through share buyback.
Over the last several years, we've provided three year guidance on milestone revenue, which is shown in the green bars.
Presented in the Blue bar is our performance against that.
I'll just make some key points here firstly, our three year milestone revenue projections have increased over time with the maturing and the expansion of our portfolio.
Secondly, we have met our track to meet our guidance in each of the periods.
Please note that last month, we updated our outlook for the three year period of 2022 to 2024 during which we expect to increase milestones again to 450 million to $500 million in total milestones, resulting from a mix of development commercial and new agreement milestones.
Let me move now to slide eight and the long term outlook for an enhanced franchise.
As we project forward to 2027, we continue to see the potential to achieve approximately $1 billion in royalty revenues based on one to four products, which are the currently approved products and the products that are projected to be in clinical development with enhanced.
Of 2022.
I know this is a non risk adjusted protection and does assume global launches in all indications.
Looking even beyond 2027 to 2031, we see a clear path to and the potential for royalty revenues to exceed $1 billion.
We're providing this projection today to help our investors better understand the drivers of revenue durability based on our knowledge of our programs our plans and also the confidential terms spelled out in our collaboration agreements.
The continued growth potential post 2027 is driven by four factors firstly the ongoing growth of the products that are creating the $1 billion potential some of which we'll be launching in the 2020 timeframe and we'll be early in their growth cycle.
Secondly, we predict and expect that there will be new product launches that are not reflected in the current financial predictions and would represent our waste five launches.
These new products will result from our current partners, but also new partners advancing additional subcutaneous products into development in late 2022 and beyond.
The third factor is the potential to be granted more co formulation patents, which have be fact of extending the duration of time, we receive royalties.
As a reminder, we typically receive royalties for a minimum of 10 years after the first commercial sale.
In addition, the co formulation patents can all substantially a lot of the base royalty rate to remain unchanged for an extended period. Following the expiry of the <unk> 'twenty based composition of matter patents.
I'm pleased to report that several partners recently filed new co formulation patent applications related to product in the enhanced development pipeline and we look forward to being able to provide further updates on these applications as this information becomes public.
Now the fourth factor is the potential for our current and new partners to utilize our new more extended room temperature stable RFP 'twenty, which has the potential to launch post 2027, and as IP coverage to 2032 in Europe and 2034 in the United States.
Now let me just address the question that comes up and that is the potential for Biosimilar impact.
Specifically, let me address what we see are several unique dynamics around the loss of <unk> exclusivity.
As a reminder, the base composition of matter patents for our 'twenty last until 2024 in Europe and 2027 in the United States.
Often with biotech products with exclusivity loss there can be a sharp drop in revenue, sometimes referred to as a patent cliff. This is a result of biosimilar companies launching and taking a substantial share of the innovator product and also price erosion.
We do not believe this will be the case with our enhanced portfolio, considering the product composition and the projected IP coverage we have.
It simply from the usual dynamic of $1 billion royalty revenue potential is not based on a single product it's based on more than 20 products.
We also project and expect the multiple sub Q products with enhanced will be protected with co formulation patents.
A biosimilar company contemplating in terms for only a portion of the $1 billion, maybe addressable this represent high cost and complexity for a more limited reward.
Further adding to our conviction regarding the durability of our royalty revenues many of our partner products are patent protected beyond 2027.
In addition, our partners have a strong focus on safe and reliable RTP 20 truck products also known as our API.
With more than 600000 patients now treated with in hand, we have a well characterized and established safety track record, including strong data automated unit a key question, new and current partners focus on.
We are continuously improving our API and we are now in <unk>.
First each create next generation higher yields low cost API.
We believe our winning combination of our high quality API plus low cost will result in continued strong collaboration with our partners and strong durability of our revenues.
Now we're excited by the ongoing momentum and growth potential of our enhanced technology franchise.
At the same time, we are continuing to evaluate the potential for new technology platform expansion through acquisition.
Go with M&A is to identify a platform, where we see a clear path to operationalize that platform, just as we've done with enhance and deliver incremental value over and above the acquisition price.
With that I'm now going to turn the call over to Nicole for a discussion of our fourth quarter and full year financial results Nicole.
Thank you Helen.
Before I begin I would like to again note that we now report key measures on a non-GAAP basis. In addition to the GAAP basis, and also provide financial guidance on a non-GAAP basis.
Consider these non-GAAP financial measures to be important because they provide useful measures of our operating performance.
Exclusive of factors that do not directly affect what we consider to be our core operating performance such as stock based compensation and amortization as well as unusual events and their related tax effects.
Please refer to our press release and filings for a reconciliation of GAAP to non-GAAP net income and earnings per share.
With that let me turn to slide nine where I'll focus on some highlights from our fourth quarter results.
Royalty revenue for the quarter was $62 6 million and 96% increase over the prior year period, a $32 million.
This was driven primarily by the continued strong uptake of BMC subcutaneous started utilizing enhanced.
Collaboration revenue for the fourth quarter was $12 3 million.
As compared to $57 3 million in the prior year period.
In Q4 2021.
No new upfront license payments as compared to a $30 million upfront license payment from horizon in Q4 2020.
Lastly, GAAP EPS was <unk> 46 cents and non-GAAP EPS was <unk> 42 per diluted share.
And now let me turn to slide 10 for a review of the full year 2021 diesel.
I'll briefly touch on some highlights here with more details available in our press release and 10-K filed with the SEC today.
Total revenue grew 66% to $443 3 million.
In 2021 off of an already substantial revenue base in 2020.
The biggest contributor by far to this increase with higher revenues from royalties of $203 9 million.
130% from 2020.
Product sales of $104 $2 million were up sharply from $56 million.
Mainly due to higher sales of <unk> <unk> to our partners Janssen and Roche.
Collaborative revenue driven by our partners pipeline progress were $135 2 million.
Up from $123 million in the prior year.
Benefiting from substantial sales milestones from Janssen related to <unk>, and our new enhanced collaboration agreement with <unk>.
Operating income for the full year with $275 9 million up 91% from $144 3 million in 2020.
Earnings per share for 2021 reached the highest level in the company's history.
GAAP EPS was $2 74 up from 91 in the prior year.
As a reminder, GAAP EPS included a onetime tax benefit from the reversal of our tax valuation allowance.
Resenting approximately $1 five per share.
non-GAAP EPS for the year with $2 per share up from $1 12 in the prior year.
Now, let me turn to slide 11 for a review of our 2022 financial guidance.
I am pleased to review our strong guidance for 2022, which was first introduced earlier this year on January 10.
We expect total revenues of $530 million to $560 million representing growth of 20% to 26% over 2021 total revenue.
In terms of the components of our revenue, we expect revenue from royalties to increase approximately 50% over revenues from royalties in 2021 to approximately $300 million.
Product sales and collaborative revenues in total for 2022 are expected to be at similar levels to what we achieved in 2021.
We expect GAAP operating income of 350 million to $380 million representing growth of 27% to 38% over 2021 GAAP operating income.
This includes an incremental $20 million operating expense investments to maximize enhance and extend royalty revenue durability.
With this important investment, we expect operating margins greater than 65%.
We expect GAAP diluted earnings per share of $1 90 to $2 five.
Again in 2021, we recorded a onetime noncash income tax benefit of approximately $1.05 per share.
When comparing with the prior year, it's important to note that 2022 will be the first fiscal year in which we will record income tax expense as part of our income statement.
We expect non-GAAP diluted earnings per share of $2 five to $2 20.
Income tax expense is projected to be 55 to 60 cents per share.
The company's earnings per share guidance does not consider the impact of potential future share repurchases beyond the accelerated share repurchase initiated in December of 2021.
Let me now turn to slide 12 for a summary of our approach to value creation and capital return and our strong progress to date.
We have been consistent regarding our balanced capital allocation priority.
These include maintaining a strong balance sheet capital returned via share repurchases.
Commitment to driving both internal and external growth via M&A.
We have a strong balance sheet with cash cash equivalents in marketable securities.
At the end of the fourth quarter of $749 million.
We continue to expect our strong projected free cash flow driven by our enhanced franchise will support both our commitment to capital return as well as fund both internal and external growth via M&A.
Demonstrating our continued commitment to capital return in the fourth quarter of 2021, we completed our initial three year $550 million share buyback program one year early.
Under the program, which began in November 2019.
A total of 22 3 million shares for $550 million at an average price per share of $24 72.
Further demonstrating our commitment to capital return in December 2021, we announced a new three year $750 million share repurchase program that was authorized by our board and immediately initiated a $150 million accelerated share repurchase program.
With that I'll now turn the call back to Helen Thank.
Thank you Nicole I'd like to think that through with the <unk> team our partners and all of our collaborators for the hard work that resulted in the strong 2021 performance.
In 2022, we will continue to deliver growing revenues growing operating income and expanding our pipeline, resulting in both strong near term and long term growth.
Thank you for joining us today and with that we'd now be delighted to take your questions. Operator would you. Please open the call for questions.
Thank you and once again, ladies and gentlemen, it is star one if you would like to ask a question today, we'll go first to Charles Duncan with Cantor Fitzgerald.
Yeah.
Thanks for taking the question and congratulations on a great year, Helen and team. Thanks.
Quick.
Quick question in terms of royalty growth, you mentioned roughly 50% royalty growth.
This year and I guess I'm kind of wondering if you could provide a little color.
What kind of puts and pulls.
That royalty growth could be is that primarily driven by additional SaaS pro growth or does fees. The fees go come into the picture and then I guess as of as a follow up to that.
When you think about the 76% or so.
Adoption rate for fans pro versus <unk>.
I guess I'm wondering where do you think that can go.
Yes, Thanks Chaz.
In terms of the royalty growth the growth is driven by both <unk> and bi ESCO as we mentioned in the prepared remarks, we see growth for each of them to be.
Call is fast grow with it is a bigger brand is going to be a larger contribution but we're excited about the contribution we're going to see from Fayetteville, as well, which is going to come from additional launches outside the U S and more adoption outside the U S, which lags the U S a bit but also continued penetration into.
In the U S as well so those are two key royalty growth drivers.
Specific to <unk>, while the exit as you saw was 76% our average share in the year, Charles with just 58% and so if you just think about the key drivers of our royalty revenue growth first of all we've got a very fast growing brand endures the legs at $6 billion in 2021, but analyst.
It's going to be $10 billion by 2025. So if you like the whole pie is going to get bigger and then our share will grow from the average share of <unk>, 58% considerably above that and I think a good benchmark is its already at the 76% at the end of last year.
We're going to see more area under the curve sales as we continue to see growth to even catch up to that average of 76% and frankly, there are very few barriers I think to why a patient wouldn't use sub Q over IV given the potential for reduced treatment time, but also reduce infusion related reactions.
So we see a lot of growth to come.
Okay very good one quick pipeline question and that is on <unk>.
<unk> you mentioned possible data here in the near term as guidance guided by your partner and I guess I'm wondering if you could lay out.
Provide a little bit of.
Outlined on the kind of work that youre doing to prepare for regulatory approval and that would be a new partner that you'd support in those efforts.
Yeah, Great question. So as you were mentioning the data readout is sometime in the first quarter. This study that's going to readout is their phase III study, which is measuring reduction in agg levels at day 29.
<unk> has also stated that they are awaiting additional data that's come from longer term studies to complete their package. So we're following our normal process Chaz, we will be ready with all of the sections that are needed related specifically to our drug products.
All of that with our five approvals to date would become very.
<unk> and the quick at doing that so everything is very nicely on track to support our Gen X when they are ready to submit their their BLA.
Okay.
Up next we'll take a question from Michael <unk> Evercore ISI.
Hi, guys. Thanks, so much for taking my question and congrats on a great quarter and a phenomenal year just two for me if I may number one just regarding your nextgen higher yield low cost API I know you said you would.
Just started investing behind that and when can we expect this to become available and the second part to that is that does this have any unique IP.
That may push out the 2024 and 2027 dates and.
A follow up on slide six.
I'm not sure if I'm missing something but I noticed that.
And Alexia on $17 20, and Bristol CD 73 are no longer on that chart.
Any color as to what happened there would be would be great. Thank you.
Yeah. So let me begin with the <unk>.
The next generation high yield low cost API.
Have just very recently began investing in that Mike and so we're still in the process of development and optimization. So we don't have a specific timeline of when it will be introduced but we are working as fast as we can to have that ready, but think in terms of several years in terms of having that fully scaled.
<unk> tested stability and all the other things that we need to do so several years for that to come it does not have unique IP because it is in hands now you will recall that in January we also announced the development of our new are you page 20, which is not in has that one does have unique IP associated.
With it out to 2032.
Europe in 2034 in the United States.
Okay.
And so let me move then to the question of the pipeline, Yes, Youre, absolutely correct, but let me start with CD 73, very recently BMS.
Just on the overall data that they have been seeing on that the drugs that are addressing that target with the IV indicated to us they wouldn't be proceeding with development of that product as a sub Q and so we did remove it from our pipeline chart and again very very recently.
<unk> also indicated to us that they would not be proceeding with the C. Five target and they actually returned that target to us. So always some puts and takes in the pipeline that we're obviously excited to see the six new products starting in 2021, but we did see these programs for.
Different reasons not proceed.
In the case of CD 73, just doesn't seem to be that attractive targets in immuno oncology.
Got it thank you very much.
Up next we'll hear from Corinne Jenkins Goldman Sachs.
Yeah.
Yes.
Afternoon.
First just one you announced obviously this new our <unk> 'twenty back in January and I'm curious if.
The news of that product is shaped if at all your conversations with potential partners or even existing partners thinking about new product targeting partnerships.
Yes.
Yeah. Thanks, Corrina, absolutely, we're we're still in the process of.
Rolling out and getting into deeper conversations with all of our current partners, but I can say that that we're seeing some interest in that and that concept is two areas that we've talked about where it might be interesting is exactly where we're seeing some interest from partners, who are considering developing small molecules where.
A more expanded room temperature stability, maybe attractive to them and also.
Current partners who are developing.
Drugs, where they are more interested in a longer IP, perhaps because their own product does not have as extended.
So we're very much on the current partners very interested in it and we are beginning to introduce it in a new part of our discussions as well because we have seen certainly since the announcement of the beef deal more interest by companies, who are pursuing small molecules and so it's a great additional offering to discuss with them.
Looking about when that might be possible to integrate into their clinical program, but obviously enhance available now to do that.
Thank you and then maybe I'm not sure. If you have good visibility, but in terms of what percentage of total doors like sales, our faas Pro X U S. I'm curious if you have any color on im not trending.
And coram, if that was for the subcutaneous portion of the sales.
Yes for <unk> pro versus the IV, yes.
Unfortunately, janssen doesn't provide that level of detail. So we're not in a position to be able to share that I can say, though when we can go back to comments that janssen themselves made in the in about June or July of last year at that point in time, there were saying ex U S. The fast for a conversion with <unk>.
60%.
So we do expect just based on the growing <unk> sales in the U S and outside the U S testing conversion.
Is that considerably from that 60% reported at that time, but we can't give specifics.
Okay helpful. Thank you.
Next up is Jessica Fye J P. Morgan.
Hey, guys. Good afternoon, Thanks for taking my question.
Just following up on some of the prior questions for the <unk> 'twenty with extended room temperature stability in.
The potential for patient self administration.
When should we expect that to enter the clinic in can you just talk about the type of product that would most benefit from those characteristics.
Yes.
Can you are you page 20.
We are still in the process obviously of.
Developing it and optimizing it so we.
But that would be available to partners to integrate into their clinical program in a couple of years.
From there that they need to do phase, one and phase III studies disliked within hands. So we're estimating this will be available and first potential launch will be post 2027.
With the same expedited development pathway, we see with enhanced but just a couple of years. So this is ready and we have the right stability and information for partners to integrate it into their clinical development program.
As you think about the types of products, but.
It might be useful I don't want to name a specific product, but if you can think about disease conditions, where the patient may be more convenient for them to be carrying rone.
Self injector as an example, or.
Pre filled syringe that has the drug on their person because it's for a chronic use but where they might want to have it with them and not have their life impacted by having to be tied to AUM. That's the type of.
Situation, where we're seeing our partners be very interested in the extended from temperature stability.
Okay got it and maybe just one more for me it's for the long term royalty revenue potential where you are now providing an indication of what that could look like in 2031.
Going out beyond the 2027.
That <unk> been giving for a while how did you select 2031 as the kind of out year to provide there.
Yes.
So what would happen because there was so much focus I will say on 2027.
Just selected something to so pretty close to that but several years out what the dynamic would be Jeff. Obviously, we could have picked up on your before one year after but.
It just was peak too.
So that question that there is.
Strong growth potential for several years after 2027.
Great. Thank you.
Okay.
Our next question comes from Jason Butler with JMP Securities.
Hi, Thanks for taking my questions just a couple on the pipeline I'm just one on <unk>.
One can you maybe just speak to how that product could fit into the overall <unk> franchise particular, and specifically how are 20% sub Q formulation could.
Essentially how the market dynamics could play out there for sub two conversion versus how they played out with with <unk>.
And then just real quick could you remind us on the phase III timelines to the extent, we know when the volume oven.
Your thoughts on how that product could impact the PD one market. Thanks.
Alright.
And then just say, Jason with regard to the <unk>.
<unk> market and exactly what Takeda is planning they have not shared their specific plans and positioning for this new agent publicly so I'm not in a position to go.
Go into any details on that I do see this though as an additional.
<unk> for them and what is a very strong franchise and a franchise that they have commented.
Commented it is one of their key growth drivers moving forward, but I can't comment on any specific positioning there.
Or the <unk> phase III study that continues.
Being executed by Bristol. They haven't provided any specific timeline I can comment that on clinical trials Gov. They have a primary completion date of December of 2023, which is sometimes.
Useful indicator as to a rough timeline as to when they expect perhaps the first analysis to be done, but clearly it doesn't always that do that.
I think with where Bristol is going with <unk> and this is really based on comments that they have made is they do see the opportunity for patients not to be tied to infusion suites, which are often in hospitals a bit further from the patient's home and I think the vision for sub Q is going to allow patients to be treated more in the community.
And with more ease and obviously in Bristol case, a combination therapy of different checkpoint inhibitors to reduce the burden for the patient and also for the caregiver. So we're very excited to see the progress, they're making and recall. They also have a phase one study ongoing with Opdivo and <unk>, which I think is.
Going to be a very interesting combination as well.
Great. Thanks for taking the questions al.
Thanks, David.
Our next step from <unk> capital markets isn't Nida This shan.
Okay.
Okay.
Your line is open.
<unk>.
Hello.
Hi can you hear me.
Yes, Ma'am. Please go and we can now we need to thank you.
Yeah.
Alright, Thanks, I had a quick question on slide six the comment about you know they expect.
And candidates to enter the pipeline.
For new products.
Now did you would that mean that they have an IV version is already in the market or would those be brand new like the new molecules and can claim.
That the partners testing in a sub Q formulation.
<unk> also.
The commentary the five new phase III starts.
Would you be able to give us some specifics on which of those are phase one might progress.
Allison Thank you.
Thanks for the question anything if we go to that chart and the specific or studies that started in the fourth quarter.
Can say that real pillory, which is a.
Janssen struggling HIV is a variable as an oral and than I am today. It actually is a successful commercial drug including being part of the combination therapy, Kevin Hoover that.
<unk> are in collaboration with these four and which recently got a new updated label to every two months injection. So that one is a commercialized drugs.
Cannot comment on the Roche undisclosed drug because obviously they are not disclosed do don't want just discuss that.
Takeda one this is the 20.
20%.
ITG that is is a developmental drug and then have a take or fear the HIV drug as we've mentioned is approved.
Yeah.
And so the defense spend moving to your second question with regard to the pipeline.
Very pleased you've probably noticed on the chart that we are indicating that.
It's close to initiating their phase III study for <unk> is trial design is actually published now on clinical trials Gov.
This is one of the expected phase III starts.
The remaining four will come from products that are on this chart, but unfortunately based on the confidentiality agreements we have until the partner has announced that we cannot comment on it but the good news is these will all be up studies done in patients and so.
Shortly before they start it will be posted on clinical trials Gov, and we'll obviously provide updates just as soon as we can switch these products are.
Thank you that's very helpful and just one more question for me you.
You did talk about looking into.
Some of the potential acquisitions that could happen down the years.
Maybe could you provide some color on what that.
That implies when you say youre looking at Derisked assets without though would be late stage or.
Maybe close to approval are already approved.
Yeah. Thanks.
We're looking at some M&A, we're specifically looking to find a business that is complementary to enhance and we're looking for something where we have confidence that we're going to be able to deliver value because we can operationalize it over and above.
We would pay for it.
So what we is ideal as if we can find something that has got perhaps already has been licensed to partners and demonstrated some clinical or commercial success.
Sorry.
Specifically commercial success.
We're it's a pipeline that's got positive phase III data and a clear path to regulatory approval, but we don't want to do is get into some pipeline, where there was a lot of technical risks still Anita.
<unk>, obviously, it doesn't fit our goal of acquiring something to continue to build and extend the durability of our revenue. So just fit our revenue and financial goals it needs to be more advanced and that's what we mean by Dean risks that we see a clear path to <unk>.
Our revenue and revenue growth in the near term.
Great. Thank you very much.
Our next question will come from Joe <unk>.
<unk> Zoro Piper Sandler.
Hey, guys. Thanks, so much for taking my questions and congrats on the progress I just wanted to follow up on an earlier question. Colin I think you noted that for <unk> 73, maybe as a targeted just didnt meet bristol's expectations, but.
But can you say for Alexia on $17 20, what was the sort of contributing factors that led to that target being returned back to you guys and maybe similarly, I think <unk> was in the <unk>.
Enhanced pipeline earlier last year and then subsequently we came out what drove that decision.
Two questions, maybe you could just speak at a high level what your partners.
Within hands and bi specific molecules.
Yes.
17, 20, I'm afraid I don't have any color on specifically why the return that but we can say that obviously electron have had amazing success of <unk> and the more extended IV dosing interval than in previous years Ludwig did make comments to say.
<unk> was a little bit to their surprise.
And that particular patient staffing meeting many of their needs, but we don't have any more color I can provide.
And that and the Great News is we're now in a position to re license that target potentially to somebody else as there are a number of companies to continue to develop exciting product in that space. So we.
We will we will be obviously doing seeking to do that just as soon as possible.
I mean, ventana, we are continuing in development with <unk>.
Event lab with Janssen.
They have a specific preference as to how and where we.
We articulate that we're proceeding with some events that so you'll find more details on that in our Q.
Which is in a SEC filing but based on Janssen preference is not reflected.
As clearly on our <unk>.
Chart that we used for investor meetings, but just to put a very fine point on it absolutely Janssen continuing with them I mean, thats not about the target sub Q.
Okay got it that's really helpful. Thanks for taking my question.
Yes.
Oh.
Oh.
Yes.
Operator are there any more questions.
There are no further questions at this time would you like to make any closing remarks.
Yeah, just like to thank everybody for your attention obviously, a great year in 2021, we're set up for continued strong progress and growth in 2022, as well and we look forward to updating you on our next quarterly call. Thank you so much and good night.
And once again, ladies and gentlemen that does conclude today's conference we would like to thank you all for your participation you may now disconnect.
Yeah.
Please wait the conference will begin shortly.
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