Q1 2022 Halozyme Therapeutics Inc Earnings Call
Emma: Good afternoon. My name is Emma, and I will be your conference operator today. At this time, I would like to welcome everyone to the Halozyme first quarter 2022 financial results conference call. All lines have been placed on mute to prevent any background noise.
Good afternoon, My name is Emma and I will be your conference operator today.
At this time I would like to welcome everyone to the halos I'm first quarter 2022 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 you'd like to ask a question. During this time simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question again pressed to Starwood. Thank you Don Chatelaine you may begin your conference.
Emma: After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press the star followed by the number 1 on your telephone keypad. If you would like to withdraw your question, again, press the star 1. Thank you. Dawn Shotland, you may begin your conference. Good afternoon, and welcome to our first quarter 2022 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.
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Emma: Leading the call will be Dr. Helen Torley, Halozyme's President and Chief Executive Officer, who will provide an update on our business, and Nicole LaBrosse, our Chief Financial Officer, who will review our financial results for the first 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 the comparable GAAP financial measures in our earnings press release and slide presentation.
Good afternoon, and welcome to our first quarter 2020 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 and 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.
On the call with Ross, our Chief Financial Officer, who will review our financial results for the first 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 the comparable GAAP financial measures in our earnings press release and slide presentation during.
Dawn Shotland: During the call, we will be making forward-looking statements. I refer you to our SEC filing for a full listing of the risks and uncertainties. I'll now turn the call over to our CEO, Helen Torley. Thank you, Don.
During the call we will be making forward looking statements I refer you to our SEC filings for a full listing other risks and uncertainties.
I'll now turn the call over to our CEO Helen Torley.
Helen Torley: 2022 is off to a very strong start for Halozyme from both an operational and a capital allocation standpoint. In April, we announced our planned acquisition of Ontario's Pharma, which is on track to close in the second quarter. This acquisition strengthens Halozyme's position as an industry leader in drug delivery and provides revenue growth and diversification. Halozyme and Antares also share a common culture built around the same mission: innovating to improve the lives of patients.
Thank you Don.
2000, and pointed to is off to a very strong start for halo from both an operational and a capital allocation standpoint.
In April we announced our planned acquisition of Antares pharma, which is on track to close in the second quarter. This acquisition strengthens <unk> position as an industry leader in drug delivery and provides revenue growth and diversification.
Hey, listen I'm Antares also share a common culture built around the same mission innovating to improve the lives of patients. We look forward to building, an even stronger company together with our Antares colleagues and are excited about the greater impact we will continue to drive for patients customers and shareholders.
Helen Torley: We look forward to building an even stronger company together with our Antares colleagues and are excited about the greater impact we will continue to drive for patients, customers, and shareholders. Nicole and her finance team have secured financing to support the acquisition with access to a very favorable debt structure. She will provide more color around that during her remarks.
Nicole and her finance team have secured financing to support the acquisition with access to very favorable debt structure.
She will provide more color around that during her remarks.
Helen Torley: As we progress to the completion of the Antares acquisition, we've continued our demonstration of executional excellence and delivered on the key first quarter milestones. Shown on slide three are Shilla's strategic and capital allocation priorities. These are to invest to maximize enhanced revenue growth and durability, to continue to return capital to our shareholders, and to grow through M&A. Notably, we're making strong progress on each of these. I'll start by reviewing our Q1 operational performance.
As we progressed through the completion of the Antares acquisition. We've continued our demonstration of execution excellence and delivered on the key first quarter milestones.
Shown on slide three our heelys on strategic and capital allocation priorities.
These are to invest to maximize <unk> revenue growth and durability to continue to return capital to our shareholders and to grow through M&A.
Notably, we're making strong progress on each of these.
I'll start by reviewing our Q1 operational performance I'm.
Helen Torley: I'm pleased to report that our first quarter results provided a strong start to 2022 for Halozyme. We reported first-quarter revenues of $117.3 million, a 32% year-over-year increase, resulting in GAAP Q1 2022 earnings per share of $0.43 and non-GAAP adjusted earnings per share of $0.47. This performance is driven by strong enhanced royalty revenue growth and the booking of a milestone payment associated with the signing of what is our 12th Enhanced Collaboration Agreement with Shugai Pharmaceutical. As I will also highlight, we continue to see strong momentum in our enhanced development portfolio. Turning now to slide four.
I am pleased to report that our first quarter results provided a strong start to 2022 for <unk>.
Reported first quarter revenues of $117 $3 million, a 32% year over year increase resulting in GAAP Q1, 2022 earnings per share of <unk> 43.
non-GAAP adjusted earnings per share of 47 cents.
This performance was driven by strong enhance royalty revenue growth and the booking of a milestone payment associated with the signing of what is our 12 enhanced collaboration agreement with Chugai pharmaceutical.
I will also highlight we continue to see strong momentum in our enhanced development portfolio.
Turning now to slide four in the first quarter, we had record quarterly royalties of $69 $6 million, representing 89% growth over first quarter, 2021, and 11% sequential growth.
Helen Torley: In the first quarter, we had record quarterly royalties of $69.6 million, representing 89% growth over first quarter 2021 and 11% sequential growth. This growth continues to be driven primarily by the successful, ongoing global launch of Janssen's subcutaneous forms of Darzalex, and also by Roche's Fezgo. And based on this strong momentum, we project continued royalty revenue growth in 2022, with growth of approximately 50% to approximately $300 million. We're delighted with the continued robust growth of this high-margin, recurring revenue stream.
This growth continues to be driven primarily by the successful ongoing global launch of Janssen subcutaneous forms of doors and also by Roche's Pasco.
Based on the strong momentum we predict continued royalty revenue growth in 2022 with growth of approximately 50% to approximately $300 million.
We're delighted with the continued robust growth of this high margin recurring revenue stream.
Helen Torley: Turning now to slide 5, I'll now provide highlights of our key commercialized products that are contributing to the strong royalty revenues. We currently have five partner products commercialized in approximately 100 global markets that are using the enhanced drug delivery technology. It is estimated that these products have been used to treat more than 600,000 patients globally. Our Wave 2 products, Janssen's Darzalex SubQ and Faspro, and Roche's Fezgo, are the current royalty revenue growth drivers and continue to have substantial growth opportunities ahead for each of them. I'll provide additional color on each of these in a moment.
Turning now to slide five I'll now provide highlights of our key commercialized products that are contributing to the strong royalty revenues.
We currently have five partner products commercialized and approximately 100 global markets that are using the enhanced drug delivery technology.
It's estimated that these products have been used to treat more than 600000 patients globally.
Our wave two products Janssen stars like sub Q, and fast grow and roche's FESCO or the current royalty revenue growth drivers and continue to have substantial growth opportunities ahead for each of them.
I'll provide additional color on each of these in a moment.
Helen Torley: Moving now to the Wave 1 product, Roche continues with its global commercialization of Mapthera SC, which is also called Rituxan Hycella, and subcutaneous Herceptin or Herceptin Hylecta. We project continued decline in minorities from these mature products as a result of the ongoing impact related to similar competition to the IV product. Let me now provide some additional details on the Wave 2 products, beginning with Darzalex, shown on slide 6. During the first quarter of 2022, Janssen's parents, Johnson & Johnson, reported worldwide sales of Darzalex, including both the IV and subcutaneous forms, of $1,856,000,000, which was up 40.3% year-over-year on an operational basis.
Moving now to the wave one products Roche continues with its global commercialization of Mabthera SC, which is also called Rituxan high seller and subcutaneous herceptin or Herceptin highlighter.
We project continued decline in royalties from these mature product as a result of the ongoing impact related biosimilar competition to the IV product.
Let me now provide some additional details on the wave two product beginning with doors elects shown on slide six.
During the first quarter 2020 to Janssen parent Johnson <unk> Johnson reported worldwide sales of dark helix, including both the IV and subcutaneous forms of $1.856 billion, which was up 43% year over year on an operational basis.
Helen Torley: This strong operational growth was driven primarily by the subcutaneous formulation, penetration, and meaningful shared gains across all lines of therapy and in all regions. As illustrated on the slide, Dara Tumamaab's SubQ share continues to grow in the U.S. during the first quarter, with 80% of end-of-quarter share being attributed to Darzalex FastPro, the SubQ version, based on Symfony data. This is an increase from 76% share in December of 2021. Moving to the second of our Wave 2 products, our partner Roche reported during the first quarter of 2022 that Fezgo, one of their newly approved products, is helping to drive growth by providing patients with a new delivery option that decreases the overall administration and monitoring time for patients from two to eight hours to just 20 to 40 minutes. Sales for the quarter were 146 million Swiss francs, up 410% from a year ago.
This strong operational growth was driven primarily by subcutaneous formulation penetration meaningful share gains across all lines of therapy and in all regions.
As illustrated on the slide dairy tumor map subdue share continued to grow in the U S. During the first quarter with 80% end of quarter share being attributed to Darfur Astro. The sub Q version based on Symphony data. This is an increase from 76% share in December of 2021.
Moving to the second of our wave two products our partner Roche reported during the first quarter 2022, the periscope one of their newly approved product is helping to drive growth by providing patients with a new delivery option that decreases the overall administration and monitoring time for patients from two to eight hours to just 20 to 40 minutes.
Sales for the quarter were 146 million Swiss francs up 410% from a year ago.
Helen Torley: We continue to expect strong quarter-over-quarter growth of SESGO as a result of the ongoing launches in Europe and the rest of the world as reimbursement is attained, as well as through continued penetration and oncology accounts in the United States. Moving to slide 7, here we illustrate how the non-risk-adjusted royalty revenues are projected to grow over time, driven by multiple new launches that we project will add royalty revenues incremental to those resulting from the Wave 1 and 2 products that we just discussed. These new potential launches form three additional waves, which we call waves 3, 4, and 5.
We continue to expect strong quarter over quarter growth of Fayetteville, as a result of the ongoing launches in Europe and rest of world as reimbursement is obtained and through continued penetration in oncology accounts in the United States.
Moving to slide seven here, we illustrate how the non risk adjusted royalty revenues are projected to grow over time, driven by multiple new launches that we project will add royalty revenues incremental to those resulting from the wave one and two products. Let me just discussed.
These new potential launches form at three additional weight, which we call wave three four and five.
Helen Torley: And as a brief reminder, Wave 3 products are currently in or have completed Phase 3 studies, and they have the potential to launch between 2023 and 2025. Wave 4 is comprised of the 11 products that are currently in Phase 1 development, which if they continue in development, have the potential to launch between 2025 and 2027, and Wave 5 will be comprised of products entering the clinic later this year and in the years to come.
And as a brief reminder, the wave three products are currently in or completed phase III studies and have the potential to launch between 2023 and 2025.
Wave four is comprised of being live in products that are currently in phase one development, which if they continued development have the potential to launch between 2025, and 2027 and with five will be comprised of products entering the clinic later this year and in the years to come.
Helen Torley: This quarter, we saw important progress advancing Wave 3 and 4. This included the announcement by Argenix that ADAPT-SC, the pivotal study of SCF-Cortegimod and generalized myosinogravis, had met its primary endpoint, Roche initiating a Phase 3 study of subcutaneous ocribis with ENHANCE, and Vive initiating their second Phase 1 study, this time evaluating ENHANCE with N6LS Each of these advances brings us closer to potential new royalty revenue. Let me now provide some more details on the f-carotid tumor.
This quarter, we saw important progress advancing wave three and four.
This included the announcement biogenic that adapt SC the pivotal study of <unk> in generalized myasthenia gravis had met its primary endpoint Roche initiating a phase III study of subcutaneous arquebus with enhance and vive initiating their second phase. One study this time evaluating enhanced with and six L. S.
Which is a broadly neutralizing antibody being evaluated for the treatment and prevention of HIV.
Each of these advances brings us closer to potential new royalty revenues let.
Let me now provide some more details on F <unk>.
Helen Torley: F. cartigemod as an IV administration was approved by the U.S. Food and Drug Administration in December of 2021 for the treatment of adult patients with generalized myasthenia gravis. And just last week, Argenix announced positive results in its Phase III Advanced Study, which is evaluating F. cartigemod IV for the treatment of adult patients with idiopathic thrombocytopenic purpura. We congratulate Argenix on this terrific news. Provided in slide 8 is a summary of the results of the ADAPT-SC study, which is evaluating F-criticism mode within hands in Myasthenia Gravis.
At <unk> as an IV administration was approved by the U S food and drug administration in December of 2021 for the treatment of adult patients with generalized myasthenia gravis.
And just last week <unk> announced positive results in its phase III advance study, which is evaluating <unk> IV for the treatment of adult patients with idiopathic thrombocytopenic purpura, we congratulate our journey on this terrific news.
Provided in slide eight is a summary of the results of the adapt study.
Which is evaluating <unk> with enhanced in myasthenia gravis and this is the most advanced the five indications that are currently being evaluated as sub Q administration with enhanced.
Helen Torley: And this is the most advanced of five indications that are currently being evaluated as sub-Q administration within the hands. The ADAPT-SC study met its primary endpoint, demonstrating non-inferior total IgG reduction at day 29 with subcutaneously administered F-corticimod compared to intravenous administration. Based on these results, Argenix has stated it plans to submit a biologic license application to the U.S. Food and Drug Administration by the end of 2022. FKTGmod subcutaneous is on track to be the first of our Wave 3 potential partner launches, which are launches that we project will occur between 2023 and 2025, with the potential approval for FKTGmod subq anticipated in 2023.
S. C study met its primary endpoint demonstrating non inferior total IGT reduction at day 29, with subcutaneously administered <unk> compared to intravenous administration.
Based on these results are Janet just stated it plans to submit a biologics license application to the U S food and drug administration by the end of 2022.
And particular subcutaneous is on track to be the first of our wave three potential partner launches, which are launches that we project will occur between 2023 and 2025 with the potential approval for <unk>.
Q anticipated in 2023.
Helen Torley: Let me move now to slide 9 and the discussion of the Enhanced 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 and launch. As in many cases, this is associated with milestone revenue payments to Halozyme. I'll begin with an overview of the Enhanced Partner Product Pipeline as of May 2022. We now have four products in Phase 3 development.
Let me move now to slide nine and a discussion of the enhanced development portfolio.
It is our goal to continuously expand the number of products that are in development and to advance product to later stages of development and launch as in many cases. This is associated with milestone revenue payments to halos I'm.
Helen Torley: These are shown at the bottom of the slide and include Argenix's F-cartigemod in multiple indications, BMS's nivolumab, ROSE's atezolizumab, and I'm pleased to announce that the phase three study of ROSE's ocrevus as a subcutaneous delivery has now also started. We consider F-Cartagemut, Nivolumab, and Atizoliz OrcaVis is the first of our week four potential launch products, which we recall have the potential to launch in the 2025 to 2027 timeframe.
I'll begin with an overview of the enhanced partner product pipeline as of May 2022.
We now have four products in phase III development.
These are shown at the bottom of the slide and include organics as effort teach them out in multiple indications BMS as Napoleon map Roche's Ts Iliza map and I'm pleased to announce that the phase III study of Roche's okra as a subcutaneous delivery has now also started.
We consider <unk> the volume up in the teaser lytham up as our waste relaunch products with the potential to launch between 2023 and 2025.
Okay. This is the first of all with for potential launch products, which recall have the potential to launch in the 2025 to 2027 time frame.
Helen Torley: All four of these products are currently approved as IV drugs. Analysts project that the total revenue potential for both the IV and subcutaneous formulations for this set of potential launches will exceed $20 billion in 2025. And what will be key for Halozyme is going to be the pace of the conversion from IV to sub-Q and the peak conversion share attained. Moving to the top of the slide, we currently have 11 products that are in or have completed phase one clinical tests.
All four of these products are currently approved as an IV drugs analysts project that the total revenue potential for both the IV and subcutaneous formulations for this set of potential launches will exceed $20 billion in 2025.
We keep a heel design is going to be the pace of the conversion from IV to sub Q and the peak conversion share attained.
Moving to the top of the slide.
We currently have 11 products that are in or have completed phase one clinical testing.
Helen Torley: Here, I'm also pleased to report that during the quarter, our enhanced partner VEEV initiated a phase one study to evaluate the safety and pharmacokinetics of N6LS administered subcutaneously with the enhanced technology. N6LS is a broadly neutralizing antibody for the treatment and prevention of HIV.
Here I'm also pleased to report that during the quarter, our enhanced partner, we've initiated a phase one study to evaluate safety and pharmacokinetics of six L. S administered subcutaneously with the enhanced technology and six Alaska broadly neutralizing antibody for the treatment and prevention of HIV.
Helen Torley: These Phase 1 products should be preceded in development will also be our way for potential launches. And as you will note, they include a number of already commercialized and successful drugs and cover a range of therapeutic areas and diseases. Looking ahead for 2022, we continue to expect further pipeline progress and expansion and continue to project at least 5 new Phase 2 or Phase 3 trial starts for existing Enhanced Partner Programs and 4 new products entering the clinic this year.
These phase one products should they proceed and development will also be our way for potential launches and as you will note include a number of already commercialized and successful drugs and cover a range of therapeutic areas and diseases.
Looking ahead for 2022, we continue to expect further pipeline progress and expansion and continue to project at least five new phase II <unk> III trial starts for existing enhanced partner programs and four new products entering the clinic this year.
Let me now move to slide 10.
Helen Torley: As we continue to drive long-term, durable growth, I'm also delighted that we announced a new collaboration and licensing agreement with Shigai Pharmaceutical, R12, further strengthening our royalty business and validating Halozyme as a partner of choice for patient-convenient subcutaneous drug delivery. As an illustration, based on historical development timelines for enhanced products, a product entering development in 2023 would have the potential to launch post-2027, adding revenue and growth as part of our Wave 5. Moving now to slide 11.
As we continue to drive long term durable growth I'm also delighted that we announced a new collaboration and licensing agreement with Chugai pharmaceutical or 12 further strengthening our royalty business and validating halos I'm as a partner of choice for patient convenient subcutaneous drug delivery.
As an illustration based on historical development timelines for enhanced product.
Entering development in 2023 would have the potential to launch post 2027, adding revenue and growth as part of our way five.
Helen Torley: Our pipeline and New Deal progress have driven strong milestone revenues for Halozyme historically, and we project this growth will continue and remain a key contributor to our capital allocation progress. As you can note, we have met or are on track to meet the prior three-year Milestone Revenue Guidance Range. For the three-year period of 2022 to 2024, 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.
Moving now to slide 11, our pipeline of new deal progress have driven strong milestone revenues for heelys them historically and we project. This growth will continue and remain a key contributor to our capital allocation progress.
As you can note we have met are on track to meet the prior three year milestone revenue guidance ranges.
For the three year period of 2022 to 2024, 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.
Helen Torley: Let me now move to say a few words regarding NCARI's acquisition. Just a month ago, we announced our agreement to acquire NCARI Pharma, whose business consists of a best-in-class, differentiated, royalty-revenue-generating auto-injector platform that offers new licensing opportunities and a growing commercial business with three proprietary products. As shown in slide 12, this transaction is fully aligned with our previously announced capital allocation priorities for 2022. These priorities are to invest to maximize our enhanced revenue growth and durability, to continue to return capital to our shareholders through share repurchases, and, at the center of the slide, to seek to acquire a platform technology where Halozyme can operationalize it and create additional value, while also adding to and further extending our revenue durability. And Terry's is the perfect partner for this and fulfills each of our business development criteria.
Let me now move to say a few words regarding in Terry's acquisition, just a month ago, we announced our agreement to acquire Antares pharma, whose business consists of a best in class differentiated royalty revenue generating auto injector platform that offers new licensing opportunities and growing commercial business with three proprietary product.
As shown on slide 12. This transaction is fully aligned with our previously announced capital allocation priorities for 2022. These.
These priorities are to invest and maximize our enhanced revenue growth and durability to continue to return capital to our shareholders through share repurchases and at the center of the slide to seek to acquire a platform technology or halos on can operationalize it and create additional value, while also adding to and further extending our revenue durability.
Antares is the perfect partner for this and Fulfils each of our business development criteria.
Helen Torley: The transaction is expected to be accretive to Halozyme's 2022 revenue and non-GAAP earnings and to accelerate top and bottom line growth through 2027, with multiple growth drivers beyond 2027. We expect to build on Ontario's core auto-injector platform technology and capabilities to drive incremental, durable revenue opportunities, with additional intellectual property protections for Ontario's technology in place beyond 2030, in 2027 and beyond. We expect Antares' multiple growth drivers will be highly additive, coming in the form of its growing testosterone replacement product business, revenues from partner products, and new partnerships with companies seeking subcutaneous administration for both small and large molecule products.
Transaction is expected to be accretive to healers onto 2022 revenue and non-GAAP earnings and to accelerate top and bottom line growth through 2027 with multiple growth drivers beyond 2027.
We expect to build in Ontario is core auto injector platform technology and capabilities to drive incremental durable revenue opportunities with additional intellectual property protections for Antares technology in place beyond 2030.
In 2027 and beyond we expect Antares has multiple growth drivers will be highly additive coming in the form of its growing testosterone replacement product business revenue from partner products and new partnerships with companies seeking subcutaneous administration for both small and large molecule products.
Helen Torley: Moving to slide 13, the combined company further expands our leadership and position as a partner of choice for patient-convenient subcutaneous treatment delivery. We believe that Antares's auto-injector technology is complementary to our enhanced technology, potentially allowing the injection of larger volumes of certain drugs subcutaneously or to deliver faster injections.
Moving to slide 13, the combined company further extends our leadership and position as a partner of choice for patient convenient subcutaneous treatment delivery.
We believe that Antares is ultra injector technology is complementary to our in house technology, potentially allowing the injection of larger volumes of certain drugs subcutaneously or to deliver faster injections.
Helen Torley: Ontario's successful development and partnership of its technology platforms offers a widely licensable product suite that can be broadly applied across a spectrum of market segments. We're very much looking forward to welcoming the entire team to Halozyme and leveraging our joint expertise to unlock new subcutaneous drug delivery opportunities that have the potential to help patients globally. With that, I'll now turn the call over to Nicole for a discussion of our first quarter financial results. Thank you, Helen. I'll start on slide 14, where I'll focus on some highlights from our first quarter results. Total revenue for the first quarter was $117.3 million, compared to $89 million in the prior year period.
Antares, a successful development and partnership of its technology platforms offer think widely licensed product suite that can be broadly applied across a spectrum of market segments.
We're very much looking forward to welcoming the antares team to hillenbrand and leveraging our joint expertise to unlock new subcutaneous drug delivery opportunities that have the potential to help patients globally.
Nicole LaBrosse: The year-over-year increase of 32% was primarily driven by an increase in loyalty revenue, partially offset by a modest decrease in revenues under collaborative agreements. Loyalty revenue for the quarter was $69.6 million, an increase of 89% compared to $36.9 million in the prior year period. This was driven primarily by the continued strong uptake of Janssen subcutaneous Darzalex, used by hand. Cost of product sales for the first quarter was $15.9 million compared to $18.2 million in the prior year period.
With that I'll now turn the call over to Nicole for a discussion of our first quarter financial results Nicole.
Nicole LaBrosse: The year-over-year decrease, despite an increase in product sales, was primarily driven by the timing of manufacturing overhead costs in the prior year. Operating income was $75.7 million compared to $50.7 million in the prior year period. The year-over-year increase of 49% is driven by growth in recurring royalties in our leverageable business model, which allows us to grow revenue with minimal investments in operating expenses. On a GAAP basis, diluted earnings per share was $0.43 compared with $0.19 in the prior year period. On a non-GAAP basis, diluted earnings per share were $0.47 compared with $0.37 in the prior year period.
Thank you Helen.
On slide 14, where I'll focus on some highlights from our first quarter results.
Total revenue for the first quarter with $117 3 million compared.
Compared to $89 million in the prior year period.
The year over year increase of 32% was primarily driven by an increase in royalty revenue, partially offset by a modest decrease in revenue under collaborative agreements.
Royalty revenue for the quarter was $69 $6 million, an increase of 89% compared to $36 $9 million in the prior year period.
This was driven primarily by the continued strong uptake of Janssen subcutaneous started utilizing enhanced.
Cost of product sales for the first quarter was $15 9 million compared to $18 $2 million in the prior year period.
The year over year decrease despite an increase in product sales was primarily driven by the timing of manufacturing overhead costs in the prior year.
Operating income was $75 $7 million compared to $57 million in the prior year period.
The year over year increase of 49% is driven by growth of recurring royalties and our leveraged business model, which allows us to grow revenue with minimal investments in operating expenses.
On a GAAP basis diluted earnings per share was <unk> 43 cents compared with 19 in the prior year period.
On a non-GAAP basis diluted earnings per share was 47 cents compared with 37 in the prior year period.
Nicole LaBrosse: When comparing to the prior year, it's important to note that the first quarter of 2022 is our first period recording income tax expense, representing $0.10 per share. Now, let me turn to slide 15 for a review of our 2022 financial guidance, which is Halozyme standalone guidance. This guidance remains unchanged from what we provided at the beginning of the year and does not include any contributions from NTERI.
When comparing to the prior year, it's important to note that the first quarter of 2022 is our first period recording income tax expense.
Presenting 10 cents per share.
Now, let me turn to slide 15 for a review of our 2022 financial guidance, which is he was on the Standalone guidance.
This guidance remains unchanged from what we provided at the beginning of the year and does not include any contribution from impairing.
Nicole LaBrosse: We plan to provide updated guidance, including in Paris, at a quarterly call after the transaction closes and the two companies are combined. For the full year 2022, we continue to expect total revenues of $530 to $560 million, representing growth of 20 to 26 percent over 2021 total revenues. 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.
We plan to provide updated guidance, including in Paris at a quarterly call. After the transaction closes and the two companies are combined.
For the full year 2022, we continue to expect total revenues of 530 $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.
Okay.
Nicole LaBrosse: Product sales and collaborative revenues in total for 2022 are expected to be at similar levels to what we achieved in 2021, with API being balanced throughout the year and milestones substantially more weighted in the second half of the year, based on our expected timing for partner milestone-bearing events. We expect operating income of $350 to $380 million, representing growth of 27 to 38% over 2021 operating income. This includes an incremental $20 million operating expense investment to maximize, enhance, and extend royalty revenue durability.
Product sales and collaborative revenues in total for 2022 are expected to be at similar levels to what we achieved in 2021 with API be balanced throughout the year and milestone substantially more weighted in the second half of the year based on our expected timing for partner milestone bearing event.
We expect the operating income of $350 million to $380 million representing growth of 27% to 38% over 2021 operating income.
This includes an incremental $20 million operating expense investment to maximize enhance and extend royalty revenue durability.
Nicole LaBrosse: Even with this important investment, we expect operating margins of greater than 65%. Moving now to slide 16, a summary of our capital allocation priorities. We have been consistent regarding our balanced capital allocation priorities, which put us in an advantageous position to acquire impurities using a mix of cash and debt while remaining committed to our plans of capital return to shareholders. Our balance sheet remains strong, with cash, cash equivalents, and marketable securities of $786.1 million on March 31, 2022, compared to $740.9 million on December 31, 2021, further strengthening our financial position as we prepare to close the interior transaction.
Even with this important investment, we expect operating margins of greater than 65%.
Moving now to slide 16, and a summary of our capital allocation priorities.
We have been consistent regarding our balanced capital allocation priorities, which put us in an advantageous position to acquire antares using a mix of cash and debt while remaining committed to our plans of capital returned to shareholders.
Our balance sheet remains strong with cash cash equivalents and marketable securities of $786 $1 million on March 31, 2022, compared to $740 9 million on December 31, 2021, further strengthening our financial position as we prepare to close.
Think terry's transaction.
Nicole LaBrosse: We are able to access low-cost pro-rata bank debt to finance the transaction and are pleased with the demand in the market for favorable terms of this non-diluted finance. As we stated, we expect to maintain a strong balance sheet with approximately 3.3 times net debt to EBITDA ratio at the projected time of close, with a significant decline expected in the quarters following the close. While we will maintain a focus on deleveraging, we will also continue to execute on our previously announced three-year, $750 million share repurchase program, inclusive of $150 million accelerated share repurchase program initiated in December 2021. We continue to plan for up to an additional $100 million in share repurchases in 2022, dependent on market conditions and other factors. With that, I'll now turn the call back to Helen. Thank you, Nicole.
We are able to access low cost pro rata bank debt to finance the transaction.
We're pleased with the demand in the market and favorable terms this non dilutive financing.
As we stated we expect to maintain a strong balance sheet with approximately three three times net debt to EBITDA ratio at the projected time of close with a significant decline expected in the quarters following the close.
Well, we will maintain a focus on deleveraging. We will also continue to execute on our previously announced three year $750 million share repurchase program.
<unk> of $150 million accelerated share repurchase program initiated in December 2021.
We continue to plan for up to an additional $100 million in share repurchases in 2022 dependent on market conditions and other factors.
With that I'll now turn the call back to Helen.
Helen Torley: I'd like to close by thanking our Halozyme team, our partners, and all of our collaborators for the hard work that resulted in the strong performance this quarter. 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. I'd like to thank everyone for joining us today, and with that, we'd now be delighted to take your questions. Operator, please would you open the call to questions?
Thank you Nicole I'd like to close by thanking our Halo design team our partners and all of our collaborators for the hard work that resulted in the strong performance. This quarter in 2022, we will continue to deliver growing revenues growing operating income and expanding our pipeline, resulting in both strong near term and long.
Long term growth.
I'd like to thank everyone for joining us today and with that we'd now be delighted to take your questions. Operator. Please would you open the call for questions.
Okay.
Helen Torley: At this time, I would like to remind everyone, in order to ask a question, press star then the number one on your telephone keypad. Your first question today comes from the line of Charles Duncan with Cantor Fitzgerald. Your line is now open. Good afternoon, Helen and Nicole.
At this time I would like to remind everyone in order to ask a question Press Star then the number one on your telephone keypad.
Your first question today comes from the line of Charles Duncan with Cantor Fitzgerald. Your line is now open.
Charles Duncan: Thanks for taking our question and congratulations on a good quarter of progress. Thank you. Yeah, so I had a couple of questions. One is on Darzalex SC in terms of I think I heard you say that 80% SC conversion now. And I guess that's pretty high.
Hey.
Helen and Nicole Thanks for taking our questions and congratulations on a good quarter progress.
Thank you.
Yeah.
Yeah. So I had a couple of questions. One is on select S. C.
In terms of I think I heard you say that 80% SC conversion now and I guess.
That's pretty high that's actually higher than we had anticipated.
Helen Torley: That's actually higher than we had anticipated. Where do you think that can go? And what would be the reason anyone would not convert over to the SC version?
Where do you think that can go and well what would be the reason anyone would not convert over to SC version.
Helen Torley: Yeah, thanks for that. So yes, we did indeed find that at the end of the first quarter in the United States, the conversion was about 80%. Now, we do think that will go higher. And to be very specific about the reasons why people wouldn't convert, there are a small number of patients we hear about anecdotally who may have needle phobia or may be comfortable being in the infusion suite because of the social aspect of that.
Yeah. Thanks for that so yes, we didn't find it at the end of the first quarter in the United States.
The conversion was about 80% sure no.
No. We do think that will go higher and to be very specific about the reasons why people wouldn't convert there are a small number of patients we hear about it anecdotally, who may have needle phobia or me be comfortable being in the infusion suite because of the social aspect of that but I would say, we do see the opportunity.
Helen Torley: But I would say we do see the opportunity to continually grow share in the United States and, importantly, outside the US as well. Danson has not provided any updates on that since the middle of last year when we knew it was lagging behind the US a bit. So expect continued growth throughout this year, as we had projected, it's going to be driven by continued grain share outside the US but also in the US as well.
Need to continually grow share in the United States and unfortunately outside the U S. As well Janssen has not provided any update on that since the middle of last year. When we knew it was a lagging the U S. A bit. So expect continued gross adds right. This year as we had projected that's going to be driven by continued share gains outside the U S.
Helen Torley: And I'll just comment that we're very pleased to see the overall growth of the brand, Charles, because if you recall what we talked about in January, we've got the overall brand growing as well as SC share growing, which is why we have such confidence and conviction in the continued growth for some time to come. Okay, that's helpful. And then I wanted to ask you, Helen, regarding Wave 3. I'm particularly interested in Efkart Tijemond on, you know, generalized myasthenia gravis.
But also the U S as well and I'll just comment that we're very pleased to see the overall growth of the brand Charles because if you recall, what we talked about in January we've got the overall brand growing as well as the S. C share growing which is why we get such confidence and conviction in the continued growth for some time to come.
Okay. That's helpful. And then I wanted to ask you Alan regarding a wave three I'm, particularly interested in <unk>.
Pitch them on on.
In in generalized myasthenia gravis congrats on the recent data there, but I guess I'm wondering if you could share with us your perspective of the value proposition, especially as it may relate to the potential pace and ultimate peak of conversion for that drug from the IV.
Helen Torley: Congratulations on the recent data there. But I guess I'm wondering if you could share with us your perspective of the value proposition, especially as it may relate to the potential pace and ultimate peak of conversion for that drug from the IV. Yeah, absolutely, we were very pleased, as we said in the prepared remarks, to see the positive data for SubQF Cartegimod. And importantly, for anyone who was listening, Argenyx also reported that the launch of the IV is off to a very strong start.
Yeah. So absolutely we were very pleased as we said in the prepared remarks to see the positive data for sub QF Cartage, Martin and importantly for anyone who is listening organics also reported that the launch of the IV is off to a very strong start and there's obviously the new mechanism of action offering new hope for.
Helen Torley: And this obviously is a new mechanism of action, offering new hope for patients. So it's all very good to see the IV taking off well. The SubQ data is expected to be filed by the end of this year. So we're looking at a 2023 launch. And in terms of the value proposition for patients, the SC does offer the opportunity for a quick, non-complex subcutaneous injection, as opposed to a more lengthy IV.
Patients so oh very good to see the IV, taking off well the sub Q data.
Is expected to be filed by the end of this year. So we're looking at a 2023 launch and in terms of the value proposition for patients. The S. C does offer the opportunity for a quick non complex subcutaneous injection as opposed to a more lengthy IV and we do know based on <unk> comments in there.
Helen Torley: And we do know, based on Argenyx's comments in their clinical studies for patients who received both IV and SubQ, 70% of patients expressed a preference for the SubQ. And so this is one test where we do see many dynamics that are going to be similar to what we observed with Darzalex. We see a company that is very motivated to have great success in the market, in what is going to be a growingly competitive environment. And we see an office setting where physicians are very comfortable and used to giving SubQ drugs, perhaps more so than IV.
Clinical studies for patients who received both IV and sub acute 70% of patients express a preference for the sub Q.
And so this is one where we do see many dynamics that are going to be similar to what we observed with them dark alike. We see a company that is very motivated to have high success in the market and what is going to be a growing the competitive environment and we see an office setting where the physicians are very comfortable and used to giving some children or perhaps more.
So then I V and we see a strong value proposition for patients. So we don't give specific guidance as to what we think the conversion rate is but everything does support that the unmet need and I think the the excitement of patients to be using a sub Q in generalized myasthenia gravis in and specifically at Cartage Mod.
Helen Torley: And we see a strong value proposition for patients. So we don't give specific guidance as to what we think the conversion rate is, but everything does support that unmet need. And I think the excitement of patients to be using a SubQ in generalized myosinia gravis, and specifically f-cartigemod, given the convenience of the once-weekly regimen, is very good. It could be a neurology game-changer.
Given the E. The convenience of the the once weekly regimen.
Very good could be neurology game changer. Thanks for taking my questions. Thank you.
Okay.
Charles Duncan: Thanks for taking my questions. Thank you. Your next question comes from the line of Mike DiFiore with Evercore.
Your next question comes from the line of Mike Difiore with Evercore. Your line is now open.
Mike DiFiore: Your line is now open. Hi guys, thanks so much for taking my questions. Two for me, one on FESGO, the ex-US launch of FESGO, if you could provide more color on the actual cadence of EU reimbursement, will it be lumpy throughout the rest of the year or evenly distributed? And also, if there are any additional gating factors in the US for continued growth. And have a follow-up. All right. For the XUS launches, Mike, as I'm sure you may be hearing from other companies, while it used to be that you could consider that the top five or six companies would all get reimbursement within 12 months, we do know that that is sometimes taking up to 24 months.
Hi, guys. Thanks, so much for taking my questions.
Two for me one on SaaS.
U S launch of <unk>, if you could provide more color on the actual cadence of EU reimbursement and what will it be lumpy throughout the rest of the year or evenly distributed.
And also if theres any additional gating factors in the U S for continued growth and I have a follow up.
Alright.
The ex U S launches.
And as I'm sure you may be hearing from other companies, while it used to be that you could consider that the top five or six companies would all get reimbursement within 12 months. We do know that that is sometimes picking up to 24 months and so Roche has not provided specific comments on that but we can see that we know that some of the traditionally larger European market.
Helen Torley: And so Roche has not provided specific comments on that, but we can say that some of the traditionally larger European markets have not yet launched, and so that is taking up to two years. And that is why we're excited about the continued growth in Europe.
Have not yet launched and so that is picking up to two years. So that is why we're excited about the continued growth in Europe strong performance, so far but with some of the more traditional major markets yet to come.
Helen Torley: Strong performance so far, but with some of the more traditional major markets yet to come. And for the United States, we do predict, and this is based on conversations with Roche as well, continued penetration into accounts and new accounts coming on board. So this is a question of them gradually growing throughout the year and adding to the quarter and quarter growth that we have projected for the year. Okay, very helpful. Thank you.
And for the United States E. We do predicting this is based on conversations with Roche as well continued penetration into accounts and new accounts coming on board. So it just is a question of them gradually growing throughout the year and adding to the quarter on quarter growth that we have projected for the year.
Helen Torley: And my final question is regarding the Antares acquisition. You may not be able to comment on this, but I'm not sure if this was commented on during the actual acquisition, the deal called, but Antares has some three very early assets, 1901, 1902, and 1903.
Okay very helpful. Thank you and my final question is regarding the Paris acquisition may or may not be able to comment on this but I'm not sure. If this was commented on during the actual equity the deal call, but tariffs has some three very early assets now.
19, 119 O 2019 O free do you guys intend to develop those and then thereby encouraging and incurring more R&D expense or.
Mike DiFiore: Do you guys intend to develop those and thereby incur more R&D expenses? Or will those be something that you sell? Any color along those lines would be helpful.
Well that would be something that you divest.
Sort of along those lines would be helpful.
Helen Torley: Yeah, thank you. And you know, Mike, what I will say is I'm very pleased with the progress we're making on our integration. Obviously, before the acquisition, we did diligence, we're continuing in the integration work streams, and the R&D programs are certainly an area where we are digging in and seeking to understand. So no decisions have been made on that. And we look forward to continuing to work with Tari's colleagues post-close on really making sure we have a full understanding of that. I will say one differentiation here is the R&D expenses.
Yeah. Thank you and and you know Mike what I will say is I'm very pleased with the progress we're making on our integration obviously before the acquisition. We did diligence we're continuing in our integration work streams and the R&D programs that certainly an area, where we are digging in and seeking to understand the so no decisions made on that.
And we look forward to continue to work with Antares colleagues post close on really making sure. We have a full understanding of that we'll see one differentiation here is the R&D expense. These obviously these programs tend to follow Anda or five O b, two pathways, which are a lot less costly and a lot faster than.
Helen Torley: Obviously, these programs tend to follow the ANDA or 505B2 pathways, which are a lot less costly and a lot faster than traditional drug development. So that obviously is something we're very much going to be taking into consideration as we look at each of these opportunities and look at the potential return for investment that would exist with these areas, each of which is in an interesting area of unmet need. But no decisions as yet. Thank you very much. Very helpful.
Traditional drug development. So that's obviously something we're very much going to be taking into consideration as we look at each of these opportunities and look at the potential return for investment that would exist with these out. These are in areas each of which is in an interesting area of unmet need but no decisions as yet.
Great. Thank you very much very helpful.
Thank you.
Mike DiFiore: Thank you. Your next question comes from the line of Corinne Jenkins with Goldman Sachs. Your line is now open. Good afternoon, everybody. So, obviously, the FOSBRO conversion has been quite high and has probably surprised a lot of people from the outside. But as we think about the next launch with Escart-Tigamod, what are some of the factors that we should keep in mind when thinking about potential conversions there?
Your next question comes from the line of Corinne Jenkins with Goldman Sachs. Your line is now open.
Hey, good afternoon, everybody. So obviously the size of our conversion has been quite high and I think it could probably surprised a lot of people to the upside, but as we think about the next launch with Escarcega marred what are some of the factors that we should keep in mind when thinking about potential conversion there and what does your market research revealed about the appetite to use this.
Corinne Jenkins: And what has your market research revealed about the appetite to use subcutaneous injections in that market versus some of the others we've seen you bring the enhanced co-formulation products to bear? Yeah, thank you. And I'll refer back to comments I made early in the year where we do see a lot of similarities between the F-Cartidgimod opportunity and the Darzalex opportunity. And specifically, we think some of the drivers of Darzalex that are present with F-Cartidgimod. F-Cartidgimod is a very important product, obviously, for our organics who are looking to be successful.
Cutaneous injection in that market versus some of the others. We've seen you bring the enhanced co formulation products to bear.
Yeah. Thank you and you know I'll refer back to comments I made earlier in the year, where we do see a lot of similarities between the <unk> opportunity and the dark links opportunity and specifically.
We think some of the drivers of doors in lakes that are present with after teach them out or at par kicked them out as a very important product, obviously for or organics or looking to be successful. It's an area, where there are additional kind of competition today, but competition coming into the market. Both in form of C. Fives and also F CRM products so having.
Helen Torley: It's an area where there is additional competition today, but competition coming into the market, both in the form of C5s and also FCRNs products. So having a winning strategy with the most convenient type of therapy possible is going to be a very important factor. Corinne, we've not done any detailed market research ourselves, but we can cite comments that Organics has made on their calls to say that in their clinical study where patients received both IV and sub-Q, 70% of patients expressed a preference for the sub-Q after receiving both forms of therapy. So with all of these factors and the fact that the treatment here is happening in immunologist offices and rheumatologist offices, which are not necessarily set up for IV therapy.
A winning strategy with the most convenient type of therapy, a possible I think it's going to be a very important factor I'm, calling we've not done any detailed market research yourself, what we can cite them and comments that <unk> made on the calls to say that in their clinical study where patients received both IV and sub Q 70.
Percent of patients express a preference for the sub Q after receiving both forms of therapy.
So with all of these factors and the fact that the treatment here is happening in immunology as offices rheumatologist offices, who are not necessarily.
Helen Torley: So this is a setting that is very conducive, we believe, to sub-Q drug delivery. We think all of those factors speak very well to robust uptake. And I'll just finish on the patient. You can imagine for a patient with chronic disease, the ability to have a simple, short sub-Q injection delivered versus long IV infusions, IVs, etc.
Necessarily for IV therapies. So this is the same thing that is very I can use if we believed to sub Q drug delivery. We think all of those factors speaks very well to a robust uptake and I'll just finish on the patient. So you can imagine for a patient with chronic disease the ability to have a.
Helen Torley: We think there's a strong winning patient preference here as well. Great, thank you, that's helpful. And then just with respect to completing the Antares acquisition, can you just help us understand what steps remain to complete that deal? I think you said in the second half or the first half this year.
Short sub Q injection delivered versus long IV infusions Ivs etcetera, we think there's a strong winning patient preference.
Preference here as well.
Great. Thank you that's helpful. And then just with respect to completing the <unk> acquisition can you just help us understand what steps remain to complete the deal I think you've said in the second half or the first half this year.
Corinne Jenkins: Yes, the steps include the tender offer completion and also the regulatory reviews, Corinne. So everything is progressing at this point in time, and we can say that, based on the completion of the conditions as well as regular reviews, the earliest time the transaction could close would be the 24th. But we've got to wait for those two areas I just mentioned to be satisfactorily completed before we can close. Wonderful, thank you. Your next question comes from the line of Jessica Fye with JPM Chase. Your line is now open. Hey guys, good afternoon. Thanks for taking my question. Could Sub-2F Cartridgemod be a candidate for auto-injector delivery, and how much work would be required?
Yes.
This includes the tender offer at completion and also the regulatory reviews Korean So everything is is progressing at this point in time and we can see that the based on the completion of the conditions as well as rig to reviews. The earliest time that transaction could close would be the 24th.
But we've got to wait for those that are two areas I just mentioned to be satisfactorily completed before we can close.
Wonderful thank you.
Your next question comes from the line of Jessica Fye with J P. M. Chase. Your line is now open.
Hey, guys. Good afternoon, thanks for taking my questions.
So to have Christian you might be a candidate for auto injector delivery.
And how much work would be required if so what about for the HIV drugs with Janssen and Viv.
Jessica Fye: So what about for the HIV drugs with Janssen and Viz? And then lastly, following the Antares Closed. Recognizing that you've kind of provided some commentary about ShareRepo this year, I guess thinking in 23 and beyond, how will you prioritize paying down debt after the acquisition versus returning cash to shareholders via ShareRepo?
And then lastly, following your entire is close.
Recognizing that you've kind of provided.
Provided some commentary about share repo this year.
Thinking in 'twenty, three and beyond how will you prioritize kind of paying down debt after the acquisition versus returning cash to shareholders via share repo.
Helen Torley: All right, let me take the questions on the auto-injector, and then I'll pass it to Nicole for the question on the paying down of the debt. Yes, obviously, once the transaction is closed, we do plan to engage with all of our partners to take a look at their portfolios and see if there might be a match for the auto-injector. I think the most important thing is going to be the volume of injection.
All right, let me take the two questions and then I'll pass it to Nicole for the question on <unk>.
The paying down of the debt.
We are obviously once the transaction is closed and do plan to engage with all of our partners to take a look at their portfolios and see if there might be a match for the auto injector I think the most important thing is going to be the volume of injection immediately upon the close we would have access to our one ml and a $2.
Helen Torley: Immediately upon the close, we would have access to a 1ml and a 2.25ml auto-injector, but as we see this when we announce the transaction, we're very excited about the potential to be developing a 5ml auto-injector. It is premature to comment specifically on any products that are currently in the portfolio, but we certainly, in doing this transaction, see the opportunity for both biologics and for small molecules that can be delivered in a volume of up to 5ml. So, we believe there is a lot of opportunity out there. And I'm happy to answer your second question, Jessica. So, in regards to our capital allocation priorities, they do remain unchanged.
Two five ml auto injector, but as we stated when we announced the transaction. We are very excited about the potential to be developing five ml auto injector. So premature to comment specifically on any products that are currently in the portfolio, but we certainly.
In doing this transaction and see the opportunity for both biologics and for small molecules that can be delivered in a volume of up to five and so there is a lot of opportunity out there we believe.
Yeah.
Okay.
And I'm happy to cover your second question Jessica.
Nicole LaBrosse: So, we do project, you know, availability to continue on all of our objectives here. And we are projecting to be able to address both our share repurchase plans, which are inclusive of the three-year plan that we announced at the end of last year to purchase $750 million, of which $150 million is in progress via an ASR at the moment. But we are still on track with those plans. And as well, we mentioned that we do plan to quickly de-leverage the debt we're taking for the Ontario acquisition as well in the coming quarters, just again, driven by our really strong cash flow projections. Great, thank you. Your next question comes from the line of Anita Duchamp with Barenberg Capital Markets. Your line is now open.
So in regards to our capital allocation priorities did you remain unchanged. So so we do project availability to continue on all of our objectives here and and we are projecting to to be able to address both our share repurchase plans, which are inclusive of the three.
Three year plan that we announced at the end of last year to purchase $750 million.
Of which 150 million is in progress via an ASR at the moment, but we are still on track with those plans and as well as you know we mentioned that we do plan to quickly deleverage deleverage the debt, we're taking for the interiors acquisition as well in the coming quarters I'm just.
Again, driven by a really strong cash flow projections.
Great. Thank you.
Your next question comes from the line of Anita Dushyanth with burnt Ehrenburg capital markets. Your line is now open.
Anita Duchamp: Hi, good afternoon, thanks for taking my question. Helen, can I ask you about, you know, the guidance you've provided now, obviously, does not include the efforts from Antwerp, but post-closing in the first half, would that be updated towards the second half of the year? Yes, it is our intention to after the close on the next earnings call to provide an update on guidance. Okay, great. And also, regarding your partnerships, I mean, historically, Halo has signed on for one partnership at least annually with the pharma players. So going forward, would there be a preference or...
Hi, good afternoon. Thanks for taking my question, but can I ask you about you know the guidance you've provided now obviously.
Does not include the assets.
Entre, but post closing in the first half or would that be updated oh.
Second half will be yet.
Yes. It is our intention to them after the close of the next earnings call to provide an update on our guidance.
Okay, Great and also regarding your partnerships I mean, historically hill has signed on.
One partnership at least annually.
With the pharma players so going forward would that'd be a pair of friends or.
Helen Torley: Towards, you know, signing on partnerships using NHANDS or auto-injection, or you kind of remain agnostic. It's a great question, and I do think what is exciting for us now is that we have the opportunity. I see three buckets and segments that we're going to seek to address post-close. That would be enhanced only, opto-injector only at a small volume, and enhanced plus opto-injector, probably at 2.25 and 5 ml. And that really is how we're looking at the opportunity as we assess Antares. So we see all three areas where Halozyme may have the potential to create new... Great, thank you.
Towards you know signing on partnerships using and hands are all going to chart <unk>.
Remain agnostic.
It's a great question and I do think what is exciting for US now is that we have the opportunity I see three buckets in segments that we're going to seek to address post close.
That would be in hands only auto injector only small volume and enhanced plus auto injector are probably the 2.25 and five M. O M and that really is how we were looking at the opportunity as we assess that the antares. So we see all three areas our warehouses may have the potential to.
To create new deals.
Great. Thank you.
Okay.
Anita Duchamp: Your last question today comes from the line of Jason Butler with JMP Securities. Your line is now open. Hi, it's Roy, and for Jason, thanks for taking our questions. I had a few on the 5ML.
Your last question today comes from the line of Jason Butler with JMP Securities. Your line is now open.
Hi, it's Roy in for Jason Thanks for taking our questions I had a few on the five ml I guess, how straightforward do you think it will be and what remains gating to get the auto injectors.
Jason Butler: I guess, how straightforward do you think it will be, and what remains gating to get the auto-injector? to 5ml. And based on your preliminary work, what do you think the timelines are to get that option available? And is that going to be generally compatible with the high-viscosity formulation?
To five ml and based on your preliminary work what do you think the timelines are to get that option available and is that going to be generally compatible with the high viscosity formulations. Thanks.
Helen Torley: Yeah, thanks, thanks, Ryan. All great questions and work that is still a little premature for me to be able to comment specifically, but we do expect that we will be able to deliver a range of viscosities. So that's a very important thing for us. We've seen some feasibility testing with regard to this, but in terms of the specific timeline, et cetera, we want to spend a bit more time with the Antares team after the close to really build out those plans.
Yeah. Thanks, Thanks, Brian all the great questions and work that is still a little premature for me to be able to comment specifically, but we do expect that we will be able to deliver a range of viscosity. So that is a very important thing for us we've seen some feasibility testing with regard to this but in terms of.
All of the specific timeline and et cetera.
We want to spend a bit more time with the antares team after the close.
To really build out those plans, but this is going to be a priority for us moving forward I'm very excited with what we've seen so far and the great Antares technology, which we do think EM with together with Ian hands will provide a unique offering in the marketplace to be able to deliver a large volume like buy them all subcutaneously.
Helen Torley: But this is going to be a priority for us moving forward, and we're very excited with what we've seen so far. And the great Antares technology, which we do think, together with the Enhance, will provide a unique offering in the marketplace to be able to deliver a large volume, like 5ml subcutaneously.
Okay very good thanks.
Okay.
Operator: Okay, very good. There are no further questions at this time. Helen Torley, I turn the call back over to you.
There are no further questions at this time, Helen Troy I turn the call back over to you.
Helen Torley: Thank you very much. Well, we thank everybody for joining us today and for your attention and support. Obviously, we're off to a very strong start in Q1. We look forward to the close of the Antares transaction and being able to provide you with further updates on our Q2 call later this year. Thank you very much, everybody. Goodbye. This concludes today's conference call. You may now disconnect.
Lovely. Thank you very much well, we thank everybody for joining us today and for your attention and support obviously, we're off to a very strong start in Q1, we look forward to the close of the Antares transaction and being able to provide you with further updates on our Q2 call. Later this year. Thank you very much everybody.
Goodbye.
This concludes today's conference call you may now disconnect.
Operator: Please wait; the conference will begin shortly. Please wait; the conference will begin shortly. Please wait; the conference will begin shortly. Please wait; the conference will begin shortly.
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