Q2 2022 Halozyme Therapeutics Inc Earnings Call
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Operator: Thank you.
At this time I would like to introduce Trombley, Vice President of Investor Relations and corporate communications.
You may begin your conference. Thank you operator, good afternoon, and welcome to <unk> second quarter, 2022 financial and operating results conference call.
Operator: At this time, I would like to introduce Tram Bui,
Operator: Vice President of Investor Relations and Corporate Communication.
And to the press release issued today after the market close you can find the 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, How's that is president and Chief Executive Officer, who will provide an update on our business and Nicola broth, Our Chief Financial Officer, who will review our financial results for the second quarter ended June 30th 2022 on today's call, we will be making forward looking statements I refer you to our SEC.
For a full list of risks and uncertainties.
Also during the call both GAAP and non-GAAP financial measures will be discussed are non-GAAP or adjusted financial measures are reconciled with the comparable GAAP financial measures in our earnings press release and slide presentation.
Operator: You may begin your conference.
Now I will turn the call over to Helen Torley.
Operator: Thank you, operator.
Thank you Tom and good afternoon, everyone I'll begin on slide three.
Tram Bui: Good afternoon and welcome to Halozyme's second quarter 2022, Financial and Operating Results Conference call.
Tram Bui: In addition to the press release issued today after the market closed, you can find a supplementary slide presentation that will be referenced during today's call in the Investor Relations section of our website.
Our accomplishments in the first half of the year are illustrative of the many opportunities telethon health to continue to enhance our growth.
Tram Bui: Leading the call will be Dr. Helen Torley, Halozyme's President, and Chief Executive Officer, who will provide an update on our business.
With the acquisition of Antares, which further expanded our growth opportunities at <unk>.
Best in class auto injector platform in our specialty commercial business, thereby augmenting channels on strategy.
<unk> further strengthened our position as a leading drug delivery company and extended our strategy to include specialty product.
Tram Bui: And Nicole LaBrosse, our Chief Financial Officer, who will review our financial results for the second quarter into June 30th, 2022.
We continue to deliver operational excellence and taking multiple drug delivery commercial and corporate development milestones.
Tram Bui: On today's call, we will be making forward looking statements.
Tram Bui: I refer you to our SEC filings for a full list of risk and uncertainties.
I'm happy to report that integration activities are proceeding to plan as we have the 90 day time point and we're on track to achieve the goals we established.
It is this combination of opportunity and execution that gives us confidence in our differentiated growth story.
Tram Bui: Also during the call, both GAAP and non-GAAP financial measures will be discussed.
Focusing now on the financial performance highlights we reported second quarter revenues inclusive of <unk> revenues post the may 24th acquisition close.
Tram Bui: The non-GAAP or adjusted financial measures are reconciled, with the comparable GAAP financial measures in our earnings press release and slide presentation.
Tram Bui: I'll now turn the call over to Helen Torley.
$52 4 million.
Helen Torley: Thank you, Tom, and good afternoon, everyone.
A 12% year over year increase.
This resulted in GAAP earnings per share of <unk> 16.
non-GAAP adjusted earnings per share of 53.
Helen Torley: I'll begin on slide three.
Our strong second quarter revenue results were driven by continued growth in royalty revenues from Manhattan, and the addition of the post close royalty revenues from auto injector devices.
As a result of the Arris acquisition.
Helen Torley: Our accomplishments in the first half of the year are illustrative, of the many opportunities Halozyme has to continue to enhance our growth.
Based on the recent close of the entire transaction and strong year to date results together with the latest information from collaboration partners and planned expenditures for the year, we are raising our guidance for 2022.
Helen Torley: With the acquisition of Antares, we further expanded our growth opportunities, adding a best in class auto injector platform and a specialty commercial business, thereby augmenting Halozyme's strategy. These additions further strengthened our position as a leading drug delivery, company and extended our strategy to include specialty products.
Helen Torley: And we continue to deliver operational excellence, achieving multiple drug delivery, commercial and corporate development milestones.
Helen Torley: I'm happy to report that integration activities are proceeding to plan, as we approach the 90 day time point and we're on track to achieve the goals we established.
Helen Torley: It is this combination of opportunity and execution, that gives us confidence in our differentiated growth story.
Our full year 2022, we expect total revenues of 655 to six subject <unk> million dollars.
An increase from our prior guidance range of $570 million to $560 million.
This represents growth of 48% to 55% over 2021 total revenue.
GAAP diluted earnings per share is updated to $1 20 to $1 35, a decrease from our prior guidance of $1 90 to $2 <unk>, mainly due to acquisition related costs in the current year.
Adjusting for acquisition related costs and other adjustments, we expect non-GAAP earnings per share to $2 10 to $2 25, an increase from our prior guidance range of $2 five to $2 20.
Representing an increase of 5% to 12% over 2021 non-GAAP diluted earnings per share.
Let me now move to slide four and I'll provide some more detail on royalty revenue performance.
You need to see a project robust growth in this high margin recurring revenue stream.
Helen Torley: Focusing now on the financial performance highlights, we reported second quarter revenues inclusive of Antares revenue post the May 24th acquisition close of one hundred and fifty two point four million dollars, a 12 percent year over year increase.
Helen Torley: This resulted in gap earnings per share of 16 cents, and non-gap adjusted earnings per share of 53 cents.
In the second quarter total royalty revenue was $85 3 million, representing 86% growth over the second quarter, 2021, and 23% sequential growth.
These results included <unk> royalties and the Antares device royalty stream for the portion of the quarter that followed the nation's actually close.
Royalty revenue growth continues to be driven by our wave two product launches led by the successful ongoing global launches of Janssen subcutaneous formulations of <unk> and also <unk>.
Based on strong momentum we project an increase in royalty revenues for 2022.
Robert Your growth is now projected to be greater than 65%, resulting in royalty revenue of $340 million to $350 million, an increase from our prior projection of 50% growth.
This increased growth is driven by the addition of the Antares device royalty revenues and <unk> subcutaneous performance.
Moving now to slide five I will provide some more color on dark Alexa adopter like subcutaneous performance.
Johnson <unk> Johnson, and Johnson reported second quarter worldwide sales of darice links, including both IV and subcutaneous forms of $2 billion.
An increase of more than 46% year over year on an operational basis.
Company noted that guys like sales was driven by share gains in all regions strong continued uptake and increased use of subcutaneous formulations.
Moving to subcutaneous Starplex SC share continued to grow in the United States during the second quarter with an 83% end of quarter share based on Symphony data.
This is an increase from 80% sure at the end of the first quarter.
Additionally, Johnson and Johnson reported SC conversion grew to 80% in Europe .
Helen Torley: Our strong second quarter revenue results were driven by continued growth, in royalty revenues from Enhance and the addition of the post-close royalty revenues from often gendered devices and product sale as a result of the Antares acquisition.
Moving now to the recent results by our partner Roche for the second quarter of 2022 Roche reported strong sales of Centaur Theyre combination treatment for patients with breast cancer, but used to license the enhanced technology.
Helen Torley: Based on the recent close of the Antares transaction and strong year, to date results, together with the latest information from collaboration partners and planned expenditures for the year, we are raising our guidance for 2022. For full year 2022, we expect total revenues of six hundred and fifty five to six hundred and eighty five million dollars, an increase from our prior guidance range of five hundred and thirty to five hundred and sixty million dollars. This represents growth of 48 to 55 percent over two thousand, and twenty one total revenue.
Helen Torley: Gap diluted earnings per share is updated to a dollar, twenty to a dollar thirty five, a decrease from our prior guidance of a dollar ninety to two dollars and five cents, mainly due to acquisition related costs in the current year. Adjusting for acquisition related costs and other adjustments, we expect non-GAAP earnings per share to be $2.10 to $2.25, an increase from our prior guidance range of $2.05 to $2.20, representing an increase of 5-12% over 2021 non-GAAP diluted earnings per share.
As a result of ongoing conversion and geographic expansion second quarter sales.
Our 325 million Swiss francs, and increase of 241% year over year.
<unk> with its storage five to eight minutes subcutaneous administration time is proven to be an attractive option for patients the healthcare system, especially in countries, where infusion capacity is limited with some countries now reporting up to 90% adoption.
We continue to expect strong quarter over quarter growth as a result of the ongoing launches in Europe and rest of world and through continued penetration in oncology of Kent in the United States.
We're also excited that Roche is initiating a study of <unk> with <unk> in frontline <unk> positive ER positive metastatic breast cancer patients opening up the potential for future oral and subcutaneous regimens.
And just a brief comment on our wave one products, which include Mabthera subcutaneous <unk>, which is also called Rituxan high shallow a subcutaneous herceptin or herceptin, how nectar. We continued to project a modest decline of royalties from these mature products as a result of the ongoing impact related to biosimilar competition to the IV product.
Helen Torley: Let me now move to slide 4 and I'll provide some more detail on royalty revenue performance. We continue to see and project robust growth in this high-margin, recurring revenue stream. In the second quarter, total royalty revenue was $85.3 million, representing 86% growth over the second quarter of 2021 and 23% sequential growth. These results include enhanced royalties and the Antares device royalty stream for the portion of the quarter that followed the May transaction close.
Helen Torley: Year-over-year growth is now projected to be greater than 65%, resulting in royalty revenue of $340 to $350 million, an increase from our prior projection of 50% growth. This increased growth is driven by the addition of the Antares device royalty revenues and Darzalex subcutaneous performance.
Note that these products are still contributing nicely as a recurring source of revenue.
Illustrated on slide six is an overview of the enhance portfolio.
Ill focus your attention on wave, three and four which represent new royalty revenue opportunity for Amazon.
Our waste free products represent the next set of opportunities for potential launches protected between 2023 and 2025.
You will note that we've expanded with three to four products as we're now including <unk>. Following a recent update from both the top line data from the Phase III study will be available in 2023.
Moving now to slide seven I'll begin with the most advanced of our waste stream products to centric and FTR tissue model.
Helen Torley: Moving now to slide 5, I will provide some more color on Darzalex and Darzalex subcutaneous performance. Janssen's parent Johnson & Johnson reported second-quarter worldwide sales of Darzalex, including both the IV and subcutaneous forms, of $2 billion, an increase of more than 46% year-over-year on an operational basis. The company noted that Darzalex sales were driven by share gains in all regions, strong continued uptake, and increased use of subcutaneous formulations.
Helen Torley: Moving to subcutaneous Darzalex, SC share continued to grow in the United States during the second quarter, with an 83% end-of-quarter share, based on Symphony data. This is an increase from 80% share at the end of the first quarter. Additionally, Johnson & Johnson reported SC conversion grew to 80% in Europe.
We are delighted that both of these products recently announced positive phase III subcutaneous study data results.
Most recently Roche announced that its phase III study evaluating subcutaneous formulation of <unk> centric <unk> with <unk> in patients with advanced non small lung cancer met its co primary endpoint.
The study showed non inferior levels of centric in the blood when injected subcutaneously compared with intravenous infusions and immunotherapy naive patients with advanced or metastatic non small cell lung cancer for whom prior platinum therapy has failed.
The safety profile of the subcutaneous formulation was also consistent with IV to centric.
We believe these positive results further demonstrate the opportunity for a co formulation of Manhattan to potentially benefit patients by reducing the treatment time for to centric three to eight minutes as a sub to delivery down from 30 to 60 minutes for IV treatment.
Roche plans to share findings of the study at an upcoming medical meeting and submit for regulatory approval to health authorities globally, including the U S food and drug administration and European Medicines Agency.
During the first half of 2022 to centric administered intravenously had revenues of $1 8 billion Swiss francs growing 11% year over year with Roche reporting strong uptake in lung cancer in the adjuvant setting.
<unk> and <unk>.
Following positive results announced in March of 2022, or <unk> is on track to submit the biologics license agreement for <unk> with enhanced in myasthenia gravis to the U S food and drug administration by the end of this year.
<unk> <unk> FC is on track to be the first of our wave three potential partner launches with potential approval anticipated in 2023.
Expert <unk> IV, which is the brand name <unk> was approved by the FDA in December of 2021, and Japan in January of 'twenty, two for the treatment of adult patients with generalized myasthenia gravis.
On their recent second quarter call, our <unk> reported a strong global launch for <unk> with Q2 revenues of $75 million with an estimated 1400 patients on treatment up from approximately 400 patients in Q1.
Our <unk> management further commented that F. Cartage amok with enhance is currently being evaluated in four additional indications with multiple data readouts projected in 2023, including data and idiopathic thrombocytopenic purpura chronic inflammatory demyelinating polyneuropathy pemphigus.
With analysts' consensus of almost $3 billion in sales for <unk> in 2026, we're excited to be partnering with our journey on this important new therapies for autoimmune diseases.
In closing I would always III products BNS continues with a reevaluation of Napoleon <unk> in their phase III study.
Helen Torley: Moving now to the recent results by our partner Roche. For the second quarter of 2022, Roche reported strong sales of Fezgo, their combination treatment for patients with breast cancer, that utilizes the enhanced technology. As a result of ongoing conversion and geographic expansion, second-quarter sales of Fezgo were $325 million, an increase of 241% year-over-year. Fezgo, with its short 5-8 minutes subcutaneous administration time, is proven to be an attractive option for patients and healthcare systems, especially in countries where infusion capacity is limited, with some countries now reporting up to 90% adoption.
I'll move now to slide eight illustrated on slide eight is the enhanced pipeline by stage of development.
Our goal remains to continuously expand the number of products that are in development and to advance products to later stages of development and launch with many of these events, resulting in milestone revenue payments to handle that.
Highlighted on this slide are the way for potential launches.
These products if they continue and develop a path to potential to launch in the 2025 to 2020 and timeframe.
11 partner products are an ongoing phase one clinical testing or have completed phase one testing.
Let me provide some key updates during the quarter.
<unk> initiated a phase one study to evaluate the pharmacokinetics pharmacodynamics and safety of a targeted antibody administered subcutaneously with enhanced.
It is notable that we announced our collaboration and licensing agreement with Chugai in March of this year, making this our fastest time the phase one dosing in our history at just over two months. This is a strong signal that this collaboration is off to a great start.
In June our partner fees initiated enrollment in a phase one single dose escalation study to evaluate the pharmacokinetics safety and Tolerability of long acting <unk> administered subcutaneously with enhanced.
The second target and the third trial to be initiated since we announced this agreement just over a year ago.
Additionally, our partner Takeda recently reported positive top line results for their phase III advance one clinical study of <unk>, which is immune globulin, 10% with enhanced in patients with chronic inflammatory demyelinating Polyneuropathy, which is also called <unk> and is a rare auto immune disease.
Clinical study met its primary endpoint for maintenance treatment of CIBC and Takeda plans to submit applications for housekeeping as regulatory approval in the United States and European Union by the end of 2022.
Helen Torley: We continue to expect strong quarter-over-quarter growth as a result of the ongoing launches in Europe and the rest of the world, and through continued penetration in oncology accounts in the United States.
In addition to the significant advances in the first half of the year. We continue to expect further pipeline progress and expansion for the remainder of the year.
We protect this will result in more than 10, New study starts in 2022, including more than six new phase II or phase III trial starts for existing it has partnered programs and two new products entering the clinic this year.
You May also have noted that we recognized $15 million in collaboration revenue in the second quarter.
Related to unanticipated study start by a partner in the third quarter.
And concluding this enhanced development program a review.
I am pleased to announce that Didnt Chin BMS nominee to an undisclosed target, resulting in a $5 million payment.
This will add to BMS is ongoing portfolio, which includes a subcutaneous version of <unk>, which is in phase III testing and a subcutaneous and if all of them up with let them have combination which is in phase one development.
Helen Torley: We are also excited that Roche is initiating a study of Spasgo with Giridastrin in frontline, HERT-positive, ER-positive metastatic breast cancer patients, opening up the potential for a future oral and sub-tube treatment regimen.
We are very pleased with the progress over a dozen partner development pipeline I will look forward to supporting the significant enhanced growth opportunities that these represent.
Helen Torley: And just a brief comment on our Wave 1 product, which includes Matfera Subcutaneous, which, is also called Rituxan Hycella, and Subcutaneous Herceptin, or Herceptin Hylecta.
Helen Torley: We continue to project a modest decline in royalties from these mature products as a, result of the ongoing impact related to biosimilar competition to the IV products.
Helen Torley: I will note that these products are still contributing nicely as a recurring source, of revenue.
Okay.
And I'll give you a bit more color regarding the <unk> acquisition and our integration progress since the transaction closed on may 24th.
Helen Torley: Illustrated on slide 6 is an overview of the Enhanced Portfolio.
Helen Torley: I'll focus your attention on Wave 3 and 4, which represent new royalty revenue opportunities, for Halozyme.
Summarized on slide nine is the current <unk> portfolio.
Helen Torley: Our Wave 3 products represent the next set of opportunities with potential launches protected, between 2023 and 2025. You will note that we've expanded Wave 3 to 4 products, as we're now including Ocrevus, following a recent update from Roche that the top-line data from the Phase 3 SC study will be available in 2023.
Our excitement regarding the new opportunities for the entire portfolio brings is high with decades of experience in device development engineering, we gained a strong internal development team, who specialize in creating custom designed drug delivery devices that are tailored to the patient and the therapeutic need.
We've activated teams made up of individuals from both companies, whose goal is to expand the number of companies licensing our auto injector technology.
Work is also underway to design and create a large volume auto injector, which by combining the innovative antares auto injector platform with enhanced will offer unique approach for patient friendly subcutaneous treatment delivery.
Helen Torley: Moving now to slide 7, I'll begin with the most advanced of our Wave 3 products, Tucentric, and F-Cartridgimod.
Helen Torley: We are delighted that both of these products recently announced positive Phase 3 subcutaneous, study data results.
Helen Torley: Most recently, Roche announced that its Phase 3 study evaluating a subcutaneous formulation, of Tucentric or Atezolizumab with enhanced in patients in advanced non-small lung cancer met its co-primary endpoint. The study showed non-inferior levels of Tucentric in the blood when injected subcutaneously, compared with intravenous infusion in immunotherapy-naive patients with advanced or metastatic non-small cell lung cancer for whom prior platinum therapy has failed. The safety profile of the subcutaneous formulation was also consistent with IV Tucentric.
Helen Torley: We believe these positive results further demonstrate the opportunity for a co-formulation, of enhance to potentially benefit patients by reducing the treatment time for Tucentric to 3 to 8 minutes as a subcutaneous delivery down from 30 to 60 minutes for IV treatment.
Helen Torley: Roche plans to share findings of the study at an upcoming medical meeting and submit, for regulatory approval to health authorities globally, including the U.S. Food and Drug, Administration and European Medicines Agency.
Helen Torley: During the first half of 2022, Tucentric administered intravenously had revenues of 1.8 billion, Swiss francs, growing 11% year over year, with Roche reporting strong uptake in lung cancer in the adjuvant setting.
What is so exciting is that we see opportunity for large volume subcutaneous delivery across the spectrum of disease areas for both small molecule drugs and biologics.
The strong cultural fit across our companies, including a focus on innovation for patients have meant that the teams are hitting the ground running.
We're also excited to have added three proprietary products' Zeiss to Lando Donna.
Our focus with dice at our weekly virtually painless subcutaneous testosterone replacement treatment, which is delivered by auto injector is to grow share or gaining patients who previously had been receiving intramuscular treatment.
At least thats the highest <unk> achieved its highest number of weekly prescription units recently sign of its continued growth.
And with our field force expansion executed we launched the Lando several weeks ago in June .
Access team is focused on gaining and then expanding payer coverage as our field team is educating physicians onto lando a twice a day oral testosterone replacement treatment that does not require dose titration.
Moving now to slide 10.
<unk> of Antares through revenue, resulting from commercial product sales and from the innovative auto injector platform is projected at durable revenue and revenue growth on top of the already strong revenue growth potential we see for enhanced.
Our projected enhanced growth is resulting from growth in royalty revenues from the multiple waves of potential new launches we have just discussed.
Moving now to slide 11, the <unk> acquisition fully in line with our previously announced capital allocation priorities.
These priorities were to invest to maximize enhanced revenue growth and your ability to continue to return capital to our shareholders through share repurchases and to seek to acquire a platform technology that would add to and further extend our revenue durability.
As you can see from the updated guidance for the year and in line with our prior comments that transaction is expected to be accretive to hail events 2022 revenue and non-GAAP earnings and supports our growth strategy to 2027 and beyond.
Helen Torley: I'll move now to Argenix and F-Cortegimod. Following positive results announced in March of 2022, Argenix is on track to submit the, Biologics License Agreement for F-Cortegimod with Enhance in Myosin or Gravis to the U.S. Food and Drug Administration by the end of this year.
Helen Torley: We believe F-Cortegimod SE is on track to be the first of our Wave 3 potential partner, launches with potential approval anticipated in 2023.
I'll now turn the call over to Nicole to discuss our second quarter financial results I'll provide more detail on the combined company guidance Nicole Thank.
Helen Torley: F-Cortegimod IV, which has a brand name 5GARD, was approved by the FDA in December of 2021, and in Japan in January of 2022 for the treatment of adult patients with generalized myosin or gravis.
Thank you Helen.
Helen Torley: On their recent second quarter call, Argenix reported a strong global launch for Vygar with Q2 revenues of $75 million, with an estimated 1,400 patients on treatment, up from approximately 400 patients in Q1.
Beginning on slide 12, total revenue for the second quarter with $152 4 million.
Helen Torley: Argenix management further commented that F-Corticimod with Enhance is currently being evaluated and for additional indications, with multiple data readouts projected in 2023, including data in idiopathic thrombocytopenic purpura, chronic inflammatory demyelinating polyneuropathy, and tensicus.
Compared to $136 5 million in the prior year period.
Helen Torley: With an analyst consensus of almost $3 billion in sales for F-Corticimod in 2026, we are excited to be partnering with Argenix on this important new therapy for autoimmune diseases.
Helen Torley: And closing out the Wave 3 products, BMF continues with their evaluation of nivolumab sub-Q in their Phase 3 study.
Year over year increase of 12% was primarily driven by an increase in royalty revenue.
And the addition of product sales as a result have been paired with acquisition.
Actually offset by a decrease in revenues under collaboration agreements due to a $40 million upfront payment associated with entering into the beef collaboration in the prior year period.
Royalty revenue for the second quarter was $85 3 million.
Helen Torley: I'll move now to Slide 8.
Helen Torley: Illustrated on Slide 8 is the Enhanced Pipeline by Stage of Development.
Helen Torley: Our goal remains to continuously expand the number of products that are in development and to advance products to later stages of development and launch, with many of these events resulting in milestone revenue payments to HaloZyme.
Helen Torley: Highlighted on this slide are the Wave 4 potential launches. These products, if they continue in development, have the potential to launch in the 2025 to 2027 timeframe.
Helen Torley: Eleven partner products are in ongoing Phase 1 clinical testing or have completed Phase 1 testing. Let me provide some key updates during the quarter. Sugai initiated a Phase 1 study to evaluate the pharmacokinetics, pharmacodynamics, and the safety of a targeted antibody administered subcutaneously with enhanced.
An increase of 86% compared to $45 8 million in the prior year period.
Helen Torley: It is notable that we announced our collaboration and licensing agreement with Sugai in March of this year, making this the fastest time to Phase 1 dosing in our history at just over two months.
And year over year increase was primarily driven by continued strong uptake of Janssen subcutaneous <unk> utilizing enhanced.
Cost of sales for the second quarter with $33 9 million compared to $23 million in the prior year period.
The year over year increase was primarily driven by an increase in product sales as a result of the <unk> acquisition.
Operating income was $34 1 million.
Compared to $93 million in the prior year period.
Year over year decrease was primarily driven by one time transaction costs related to <unk> acquisition.
<unk> amortization of intangible assets.
On a GAAP basis diluted earnings per share was <unk> 16.
<unk> to <unk> 62 in the prior year period.
On a non-GAAP basis diluted earnings per share was <unk> 53.
Compared to <unk> 66 in the prior year period, when comparing to the prior year. It's important to note that 2022 was our first share recording income tax expense.
It's impacted current period non-GAAP diluted EPS by <unk> 14 per share.
Helen Torley: This is a strong signal that this collaboration is off to a great start.
Moving now to slide 13.
Helen Torley: In June, our partner Veeve initiated enrollment in a Phase 1 single-dose escalation study to evaluate pharmacokinetics, safety, and tolerability of long-acting cabotegravir administered subcutaneously with enhanced.
Helen Torley: This was the second target and the third trial to be initiated since we announced this agreement just over a year ago.
Helen Torley: You may also have noted that we recognized $15 million in collaboration revenue in the second quarter. This is related to an anticipated study start by a partner in the third quarter.
Helen Torley: Additionally, our partner Takeda recently reported positive top-line results for their Phase 3 Advanced 1 clinical study of IQVIA, which is the immune globulin 10% with enhanced, in patients with chronic inflammatory demyelinating polyneuropathy, which is also called CIDP and is a rare autoimmune disease. The clinical study met its primary endpoint for maintenance treatment of CIDP, and Takeda plans to submit applications for IQVIA's regulatory approval in the United States and European Union by the end of 2022.
Helen Torley: And concluding this enhanced development program overview, I'm pleased to announce that in June, BMS nominated an undisclosed target, resulting in a $5 million payment.
Based on the recent close of <unk> transaction and strong year to date until.
Helen Torley: In addition to these significant advances in the first half of the year, we continue to expect further pipeline progress and expansion for the remainder of the year. We predict this will result in more than 10 new study starts in 2022, including more than 6 new Phase 2 or Phase 3 trial starts for existing Enhanced Partner Programs and 2 new products entering the clinic this year.
Helen Torley: This will add to BMS's ongoing portfolio, which includes a subcutaneous version of Nivolumab, which is in Phase 3 testing, and a subcutaneous Nivolumab-Rilatlamab combination, which is in Phase 1 development.
Helen Torley: We are very pleased with the progress over to the partner development pipeline, and we look forward to supporting the significant enhanced growth opportunities that these represent.
Helen Torley: And I'll give you a bit more color regarding the Antares acquisition and our integration, progress since the transaction closed on May 24th. Summarized on slide 9 is the current Antares portfolio.
As well as the latest information from our collaboration partners and planned expenditures for the year, we are raising guidance for 2022.
Helen Torley: Our excitement regarding the new opportunities that the Antares portfolio brings is high. With decades of experience in device development engineering, we gained a strong internal development team who specialize in creating custom-designed drug delivery devices that are tailored to the patient and the therapeutic need.
Helen Torley: We've activated teams made up of individuals from both companies, whose goal it is to expand the number of companies licensing our auto-injector technology.
For the full year 2022, we expect total revenue of $655 million to $685 million, an increase from our prior guidance range of $530 million to $560 million.
Representing growth of 48% to 55% over 2021 total revenue.
The projected revenue contribution from the <unk> business, our full year guidance is $115 million to $125 million.
In terms of the components of our revenue, we expect revenue from royalties to increase by greater than 65% over revenue from royalties in 2021 to $340 million to $315 million.
Collaboration revenues for 2022 are expected to be at similar levels to what we achieved in 2021 and substantially more weighted in the fourth quarter of the year.
From our expected tightening per partner milestone bearing events.
Product sales from 2022 are expected to increase from 2021.
Due to the contribution of sales from the <unk> acquisition.
We expect operating income of $240 million to $265 million, a decrease from our prior guidance range of $350 million to $380 million.
Representing a decline of 4% to 13% over 2021 operating income.
This includes one time transaction costs related to the <unk> acquisition, including amortization of intangible assets.
As well as the planned incremental $20 million operating expense investment in 2022 to maximize enhance and extend royalty revenue durability.
We expect GAAP diluted earnings per share of $1 20 to $1 35.
Decrease from our prior guidance of $1 90 to $2 five.
Mainly due to acquisition related costs in the current year.
Adjusting for acquisition related costs and other adjustments, we expect non-GAAP diluted earnings per share to $2 10 to $2 25, an increase from our prior guidance range of $2 five to $2 20.
And representing an increase of 5% to 12% over 2021 non-GAAP diluted earnings per share.
This increase in the guidance range of five <unk> per share as a result of the projected accretion from the <unk> acquisition.
Our balance sheet remains strong with $3 three times net debt to EBITDA ratio at June 32022, which we expect to reduce to less than three times by the end of the year.
We continue to have access to low cost pro rata bank debt through our revolving credit facility and project strong cash flows from operating activities.
We will continue to execute on our previously announced three year $750 million share repurchase program inclusive of $150 million accelerated share repurchase initiated in December of 2021, which concluded in June .
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.
I would like to thank the entire <unk> team for the hard work that resulted in our strong performance this quarter and for the excellent progress with integration.
As you heard today, we're continuing to deliver growing revenues growing operating income and to expand our pipeline, resulting in strong near term and long term growth.
Thank you all for joining us today and with that we'd be delighted to take your questions. Operator would you. Please open the call for the questions.
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 comes from the line of Mike <unk>. Your line is open.
Hi, guys congrats on the quarter and thank you for taking my questions just two for me.
At the beginning a lot of this a lot of this from investors on.
The potential impact of drug pricing reform on halos topline.
To the extent that you can if you could offer any color on how that may affect your finances, that'd be great and along those lines would co formulated products be considered new products in their own right.
And therefore, not tied to the parent brand's launch date or will they be considered one of them the same.
And separately any color you could give on the <unk> launch the Rx data seems as if it may be restricted in IMS.
Thank you.
Alright, well thanks for the questions Mike Let me just start just with a high level comment.
Drug pricing reform, obviously, the Senate Bill has been issued but we are still awaiting a lot of the regulations will be published by CMS. So it's hard to give a specific answer I do think one of the very important factors of our halos I'm, though.
We do have a broad and diversified portfolio of products that are at different stages of development across multiple partners, who are selling their innovative products and medicines globally and I do think that is a very good picture of the half considering that.
Certain drugs are going to exchange will be impacted in the future by these pricing reforms, but it's a little bit too early to talk about this we can say that for the biologic drugs any impact is expected in 13 years.
After their first launch and certainly as we look at our portfolio those events that certainly would be well past 2025, if that's helpful. But will be sharpening our pencils when more details are available Mike to be able to assess that but certainly we're feeling it a very good position because of.
Our portfolio.
Similar type of response to the co formulation or new I think until the regulations are written and published it.
Is not going to be possible to give an opinion on that or understand exactly. How this is going to be operationalized. So we certainly are beginning our work on the Senate Bill and waiting for those CMS regulations to be able to come up with it.
A full assessment, then obviously, we will share our assessment at that time.
Telander launches as you noticed that launched a few weeks ago in June our focus at the moment is really on market access team is working to gain access and coverage within the key pharmacy benefit managers, while our representatives are out talking to the physicians.
Presenting to them, our overall therapy twice a day oral therapy that doesn't require dose titration. So early days, yet and certainly key.
These are going to be working to get that additional access in place and continuing to educate physicians on what we think is.
An important new offering for patients looking for just saw strong replacement.
Very helpful. Thank you.
Your next question comes from the line of Jacob Walter Your line is open.
Yeah.
Yes.
Yeah.
Okay.
Yes.
Yeah.
Yeah.
Operator, maybe you can we can move to the next question I think we're not able to hear and maybe that could come back.
Certainly.
Your next question comes from the line of Corinne Jenkins Your line is open.
Great. Good afternoon, maybe a little more high level can you just provide an update on rates and the integration of Ontario and <unk>.
What you've learned from that initial group post close of that deal and I think particularly with respect to the commercial infrastructure.
Maybe you are going to be focused.
The business.
Alright, thanks, Thanks, Kurt.
As you know before we completed the acquisition. We had commented that we had detailed integration plans in place and I can say from the point of view of cultural integration process integration and getting some of our performance and new ideas implemented things are growing very nicely on track and I have to give a big thank you to ever.
Body on both sides LSI monetary were contributing.
To that a couple of highlights just mentioned now the teams really did hit the ground running with the.
Concepts and ideas around how do we create a unique offering we think in the market of a high volume auto injector.
Helen Torley: Work is also underway to design and create a large-volume auto-injector, which by combining the innovative Antares auto-injector platform within hands will offer a unique approach for patient-friendly subcutaneous treatment delivery.
Helen Torley: What is so exciting is that we see opportunity for large-volume subcutaneous delivery across, the spectrum of disease areas for both small molecule drugs and biologics.
Helen Torley: The strong cultural fit across our companies, including a focus on innovation for patients, have meant that the teams are hitting the ground running.
Helen Torley: We're also excited to have added three proprietary products, Ziosted, Tolando, and Nocturna. Our focus with Ziosted, our weekly virtually painless subcutaneous testosterone replacement treatment, which is delivered by auto-injector, is to grow share through gaining patients who previously have been receiving intramuscular treatment.
We'd be used within hands and so that's just an example that we were hoping to see in R&D seeing with how the power of bringing the company together.
You asked a specific question about commercial infrastructure I think everybody is aware that the.
At the beginning of this year.
Paris began an expansion of its field footprint from about 90 reps to 108 reps and the goal of that was obviously to prepare for the addition of <unk>.
To increase share of voice and reach in terms of being able to make sure that we were getting to the right frequency and all of the top volume prescribers.
I'm very pleased to say that that is virtually complete that expansion.
And we now have almost all of the territories filled and repsol with late coming up to speed with the new reps coming up to speed with the new products now with that obviously any integration comes a bit of disruption, but I'm very proud to say I'm happy to say that our teams are putting up some very good numbers.
Helen Torley: I'm pleased that Ziosted achieved its highest number of weekly prescription units recently, a sign of its continued growth.
Helen Torley: And with our field force expansion executed, we launched Tolando several weeks ago in June. Our access team is focused on gaining and then expanding, pair coverage as our field team is educating physicians on Tolando, a twice-a-day oral testosterone replacement treatment that does not require dose titration.
Many representatives that are just doing a terrific job moving through that modest disruption that's happening in their physician call list to delivering continued to perform and so very confident as a result of this that we're going to grow.
Helen Torley: Moving now to slide 10, the acquisition of Antares through revenue resulting from commercial product sales and from the innovative auto-injector platform is projected to add durable revenue and revenue growth on top of the already strong revenue growth potential we see for Enhance.
Helen Torley: Our projected Enhance growth is resulting from growth in royalty revenues from the multiple waves of potential new, launches we have just discussed.
Both of our products.
Particularly <unk> and 'twenty two over 2021 and importantly for 2023, we're going to be in a great position to grow both brands.
For the future.
Yes.
Thanks, and then maybe is there any additional color you can provide on the pull forward that created a sub Q.
We get into the wave three group of products.
Essentially any color on what that suggests about the relative importance of Scott products to your partner.
The indication.
I am so sorry, Karen I Couldnt catch some parts of that would you mind repeating.
Sure sorry.
What additional color can you provide on the accretive sub Q pull forward. That's now in way of three of his previously wave four and then any thoughts on what that suggests about the relative importance of that product of Roche.
About the space.
Sure.
Notable update in the quarter.
That's great well with regard to OCA vis.
I don't necessarily think theres sort of a pool award. It was just an update that Roche management happens too.
Mentioned in their most recent earnings call that they did expect data in 2020 through so with that confirmation.
Certainty.
<unk> articulated that we were able to more firmly move that into wave three given the potential now for a launch between $23 25.
So I would look at that more as that clarity provided by Roche.
We could then repeat and plan against.
And with regard to where it fits in the portfolio. If you really look over the last I think 12 to 18 months.
Several comments made by Roche management on its quarterly coal about <unk> being a terrific and important growth brand for them, but recognizing that the marketplace is also seeing more oral and subcutaneous therapy.
And they commented at one point that <unk> been able to move all for Vista sub Q really was fitting with where therapy seems to be going in this marketplace. So those comments certainly at signal to me that they see subdued as an important part of their offerings for patients with myasthenia at with multiple sclerosis.
Great. Thank you.
Again, if you would like to ask a question Press Star then the number one on your telephone keypad.
Your next question comes from David Risinger. Your line is open.
Yes, thanks very much.
So.
I have a couple of questions. Please first could you talk about or tell us what the impact of tariffs was on non-GAAP EPS in the second quarter.
So what the figure was for the second quarter.
Then.
What is the expected impact on a non-GAAP basis on your updated full year 2022.
non-GAAP EPS projection.
Second.
Could you.
Remind us I can't recall I apologize, but what has been said about pursuing a once daily to lando and potential timing.
And then third.
Could you please comment on business development prospects, so opportunities to sign new partnerships.
In the near to medium term. Thank you.
Okay. Thank you David for the question I'll ask Nicole to start though we'll take these in order I would you answer the questions on the non-GAAP EPS.
Yes happy to do so while we haven't provided that level of detail. We we did provide at the.
The interiors revenue streams did contribute $18 7 million for the quarter and just a reminder, on that contribution that is from the time period of May 24th the date of acquisition through to the ended the quarter. So for that period that is the period that we've included in our Q2 results.
And then I can think for full year as well Youll Youll see that we did update our guidance for the full year, including updating our non-GAAP diluted EPS and we've adjusted that range.
We've increased it by <unk> <unk> per share and that is reflective of the accretion that we project for the full year related to the <unk> acquisition and the contribution from that part of the business.
Alright.
I'll move to the once daily to landfill.
Can provide an update that we did not exercise the option to pursue lando XR, which is the once daily.
Thailand or potential development.
Licensee that was based on a comprehensive analysis that looking at our expectations for outsized cost duration, all about the clinical study versus the return on that so.
With our portfolio today, which as our terrific XIAFLEX sub Q the virtually painless a weekly.
Jackson and the twice daily oral we believe was a very different differentiated offerings for the testosterone replacement therapy market.
And then on business development is yes. It is indeed affected we've been very exciting it was already been very busy with our current partners presenting to them. The new options, which include a one ml auto injector two to five ml auto injector and also talking about our plan to develop a five ml auto injector that would be used with <unk>.
Hans and I can tell you the reception has been very positive with a lot of interest.
Being expressed by several partners, who are going back now to look at their portfolios to see if there would be a fit I'm also excited to say incoming calls are increasing but people enquiring is it possible to do X is it possible to do why and that always is a very positive as well to be getting those incoming cold and then I will just say is as we have done in the past.
As we have done a systematic assessment of all of the products that we could find out there that might fit into a one ml two to five ml or five ml auto injector and we're now beginning a proactive outbound set of kohl's to present, our offerings to these companies.
And potential new partners and that kicking off in August . So certainly very good reception very nice response to how differentiated the entire with auto injector is and I think.
It does seem to make it very different and we are getting this feedback from potential partners is the ability to develop a customized device working with the talented killers.
<unk> engineers.
Make sure that whatever the design is fits the desired patient population diseased beat of injection volume of injection.
And so off to a very strong and encouraging start up based on just the last several weeks of BD discussions.
Okay.
Thank you.
Your next question comes from the line of Jessica Fye. Your line is open.
Helen Torley: Moving now to slide 11, the Antares acquisition fully aligned with our previously announced capital allocation priorities. These priorities were to invest to maximize Enhance revenue growth and durability, to continue to return capital to our shareholders through share repurchases, and to seek to acquire a platform technology that would add to and further extend our revenue durability.
Hey, guys. Thanks for taking my question would be on partnering.
Those under your belt I was wondering if you could update us on your capital allocation priorities. When you think about additional share repo versus debt paydown versus.
More acquisition. Thank you.
Yes, let me ask Nicole to address that yes.
I think that I would say, we continue to be focused across the board on our capital allocation priorities.
Typically in regards to share repurchases are our plans remain intact.
With our existing $750 million plan that we.
Initially initiated late last year, a three year plan, we did in this quarter complete the first under $50 million.
Purchase of that which was utilizing an accelerated share repurchase program. So that was completed this quarter and we do plan to purchase up to an additional $100 million in the remaining months of the year. So but that is still tracking nicely again, we do continue to monitor our our access to capital market.
And we and our access to debt and we do have a low net leverage ratio of three three times.
At the end of the quarter, which we expect to reduce to less than three times by the end of the year. So we're continuing to access that that type of leverage as well and then again growing externally on that also continues to be a focus for US is as Helen mentioned, we're very focused on the integration and the success of this of this of.
This acquisition and putting all the pieces in place here, but that will be an area of focus for us to continue to grow externally as well.
Thank you.
Okay.
Again, if you would like to ask a question Press Star then the number one on your telephone keypad.
Yes.
There are no further questions at this time I turn the call back over to you.
Thank you we appreciate everybody joining us for this call obviously, an exciting quarter for us with strong operational performance, which is the key hallmark. We believe all about him is on even as we integrate it in Paris, and so we look forward to providing additional updates in the next quarter, where we expect to continue this very strong momentum.
And success. Thank you all for your attention today Goodbye.
Yes.
Yeah.
Please wait the conference will begin shortly.
Helen Torley: As you can see from the updated guidance for the year and in line with our prior comments, the transaction is expected to be a credit to Halofind's 2022 revenue and non-gap earnings and supports our growth strategy to 2027 and beyond.
Helen Torley: I'll now turn the call over to Nicole to discuss our second quarter financial results and provide
Okay.
Okay.
Okay.
Okay.
Yes.
Yes.
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Yes.
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Yes.
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Sure.
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Okay.
Helen Torley: more detail on the combined company guidance.
Okay.
Helen Torley: Nicole?
Nicole LaBrosse: Thank you, Helen.
Nicole LaBrosse: Beginning on slide 12, total revenue for the second quarter was $152.4 million compared, to $136.5 million in the prior year period. The year-over-year increase of 12% was primarily driven by an increase in royalty revenue, and the addition of product sales as a result of the Interior's acquisition, partially offset by a decrease in revenues under collaboration agreements due to a $40 million upfront payment associated with entering into the VEAP collaboration in the prior year period. The royalty revenue for the second quarter was $85.3 million, an increase of 86% compared, to $45.8 million in the prior year period.
Sure.
Nicole LaBrosse: The year-over-year increase was primarily driven by continued strong uptake of Janssen, subcutaneous Darzalex utilizing Enhance.
Yes.
Nicole LaBrosse: Cost of sales for the second quarter was $33.9 million compared to $23 million in the prior, year period. The year-over-year increase was primarily driven by an increase in product sales as, a result of the Interior's acquisition.
Okay.
Nicole LaBrosse: Operating income was $34.1 million compared to $93 million in the prior year period. The year-over-year decrease was primarily driven by one-time transaction costs related, to the Interior's acquisition, including amortization of intangible assets.
Nicole LaBrosse: On a GAAP basis, diluted earnings per share was $0.16 compared to $0.62 in the prior year, period.
Okay.
Nicole LaBrosse: On a non-GAAP basis, diluted earnings per share was $0.53 compared to $0.66 in the prior, year period. When comparing to the prior year, it's important to note that 2022 was our first year recording, income tax expense, which impacted current period of non-GAAP diluted EPS by $0.14 per share.
Nicole LaBrosse: Our balance sheet remains strong, with 3.3 times net debt to EBITDA ratio at June 30, 2022, which we expect to reduce to less than 3 times by the end of the year. We continue to have access to low-cost pro-rata bank debt through our revolving credit facility, and project strong cash flows from operating activities.
Nicole LaBrosse: Moving now to slide 13.
Nicole LaBrosse: We will continue to execute on our previously announced three-year $750 million share repurchase, program, inclusive of $150 million accelerated share repurchase initiated in December 2021, which concluded in June. We continue to plan for up to an additional $100 million in share repurchases in 2022, dependent on market conditions and other factors.
Okay.
Nicole LaBrosse: Based on the recent close of the Interior's transaction and strong year-to-date results, as well as the latest information from our collaboration partners and planned expenditures for the year, we are raising guidance for 2022. For the full year 2022, we expect total revenue of $655 to $685 million, an increase from, our prior guidance range of $530 to $560 million, representing growth of 48 to 55 percent over 2021 total revenue. The projected revenue contribution from the Interior's business, the full year guidance, is $115 to $125 million.
Nicole LaBrosse: With that, I'll now turn the call back to Helen.
Nicole LaBrosse: In terms of the components of our revenue, we expect revenue from royalties to increase, by greater than 65 percent over revenue from royalties in 2021 to $340 to $350 million.
Helen Torley: Thank you, Nicole.
Sure.
Nicole LaBrosse: Collaboration revenues for 2022 are expected to be at similar levels to what we achieved, in 2021 and substantially more weighted in the fourth quarter of the year, and the others.
Helen Torley: I would like to thank the entire SalesLine team for the hard work that resulted in our, strong performance this quarter and for the excellent progress with integration.
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Nicole LaBrosse: We expect to see a decline in sales from 2022 to 2021, due to the contribution of sales, from Ninteri's acquisition. We expect operating income of $240 to $265 million, a decrease from our prior guidance, range of $350 to $380 million, representing a decline of 4 to 13% over 2021 operating income. This includes one-time transaction costs related to Ninteri's acquisition, including amortization, of intangible assets, as well as the planned incremental $20 million operating expense investment in 2022 to maximize, enhance and extend loyalty revenue durability.
Helen Torley: As you heard today, we're continuing to deliver growing revenues, growing operating income, and to expand our pipeline, resulting in strong near-term and long-term growth.
Nicole LaBrosse: We expect gap diluted earnings per share of $1.20 to $1.35, a decrease from our prior, guidance of $1.90 to $2.05, mainly due to acquisition-related costs in the current year. Adjusting for acquisition-related costs and other adjustments, we expect non-gap diluted, earnings per share to be $2.10 to $2.25, an increase from our prior guidance range of $2.05 to $2.20, and representing an increase of 5 to 12% over 2021 non-gap diluted earnings per share. This increase in the guidance range of $0.05 per share is a result of the projected accretion, from Ninteri's acquisition.
Okay.
Yes.
Helen Torley: Thank you all for joining us today, and with that, we'd be delighted to take your questions.
Okay.
Operator: Operator, would you please open the call for the questions?
unknown: You should finish what you said and come back.
Operator: 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.
unknown: I don't want to keep on waiting for you!
Operator: Our first question comes from the line of Mike DeFiore.
Michael DiFiore: Your line is open.
Michael DiFiore: Hi, guys.
Michael DiFiore: Congrats so much on the quarter, and thanks for taking my questions.
Michael DiFiore: Just two for me.
Michael DiFiore: I've been getting a lot of this from investors on the potential impact of drug pricing reform, on Halo's top line.
Michael DiFiore: To the extent that you can, if you could offer any color on how that may affect your finances, that'd be great.
Michael DiFiore: And along those lines, would co-formulated products be considered new products in their, own right, and therefore not tied to the parent brand's launch date?
Michael DiFiore: Or will they be considered one and the same?
Michael DiFiore: And separately, any color you can give on the Tlando launch, the RX data seems as if, it may be restricted in ICFIA and IMS.
Michael DiFiore: Thank you.
Helen Torley: All right, well, thanks for the questions, Mike.
Helen Torley: Let me just start just with a high level comment on drug pricing reform.
Helen Torley: Obviously, the Senate bill has been issued, but we're still awaiting a lot of the regulations to be published by CMS, so it's hard to give a specific answer.
Helen Torley: I do think one of the very important factors about Halozyme, though, is we do have a broad and diversified portfolio of products that are at different stages of development across multiple partners who are selling their innovative products and medicines globally.
Helen Torley: And I do think that is a very good picture to have, considering that there will only be certain drugs, that are going to potentially be impacted in the future by these pricing reforms.
Helen Torley: But it's a little bit too early to talk about this.
Helen Torley: We can say that for the biologic drugs, any impact is expected in 13 years after their first launch.
Helen Torley: And certainly, as we look at our portfolio, those events certainly would be well past 2025, if that's helpful.
Helen Torley: But we'll be sharpening our pencils when more details are available, Mike, to be able to assess that.
Helen Torley: But certainly, we're feeling in a very good position because of our portfolio.
Helen Torley: Similar type of response to the co-formulation are new.
Helen Torley: I think until the regulations are written and published, it is not going to be possible to give an opinion on that or understand exactly how this is going to be operationalized.
Helen Torley: So we certainly are beginning our work on the Senate bill and waiting for those CMS regulations to be able to come up with a full assessment.
Helen Torley: And obviously, we'll share our assessment at that time.
Helen Torley: To land the launch, yes, as you know, just launched a few weeks ago in June.
Helen Torley: Our focus at the moment is really on market access. Teams working to gain access and coverage within the key pharmacy benefit managers.
Helen Torley: While our representatives are out talking to the physicians, presenting to them our oral therapy, twice a day oral therapy that doesn't require dose titration.
Helen Torley: So early days yet.
Helen Torley: And certainly, the keys are going to be working to get that additional access in place, and continuing to educate physicians on what we think is an important new offering for patients looking for testosterone replacement.
Michael DiFiore: Very helpful.
Operator: Thank you.
Operator: Your next question comes from the line of Jacob Walter.
Operator: Your line is open.
Operator: Operator, maybe we could move to the next question.
Operator: I think we're not able to hear and maybe Jake could come back.
Operator: Your next question comes from the line of Corrine Jenkins.
Corinne Jenkins: Your line is open.
Corinne Jenkins: Great.
Corinne Jenkins: Good afternoon.
Corinne Jenkins: Maybe a little more high-level, can you just provide an update on where you stand with the integration of, Bontaras and what you've learned just in the initial few weeks post-close of that deal?
Corinne Jenkins: And I think particularly with respect to the commercial infrastructure and where maybe you are going to be focused in that.
Corinne Jenkins: Great.
Helen Torley: Thanks.
Helen Torley: Thanks, Corrine.
Helen Torley: Well, as you know, before we completed the acquisition, we commented that we had detailed integration plans in place.
Helen Torley: And I can say from the point of view of cultural integration, process integration, and getting some of our performance and new ideas implemented, things are going very nicely on track.
Helen Torley: And I have to give a big thank you to everybody on both sides, Hela Zyma and Tariq, who were contributing to that.
Helen Torley: A couple of highlights just to mention, the teams really did hit the ground running with the concepts and ideas around how do we create a unique offering, we think, in the market of a high-volume auto-injector that would be used within hands.
Helen Torley: And so that's just an example that we were hoping to see and are indeed seeing with how the power of bringing the company together.
Helen Torley: You asked a specific question about commercial infrastructure.
Helen Torley: I think everybody is aware that at the beginning of this year, the Taris began an expansion of its field footprint from about 90 reps to 108 reps. And the goal of that was obviously to prepare for the addition of Tolando and to increase share of voice and reach in terms of being able to make sure that we were getting to, at the right frequency, all of the top volume prescribers.
Helen Torley: I'm very pleased to say that that is virtually complete, that expansion.
Helen Torley: And we now have almost all of the territories filled and reps obviously coming up to speed with the new reps, coming up to speed with the new products.
Helen Torley: Now, with that, obviously, any integration comes a bit of disruption, but I'm very proud to say and happy to say that our teams are putting up some very good numbers, and many representatives that are just doing a terrific job moving through that modest disruption that's happening in their physician call list to deliver and continue to perform.
Helen Torley: And so I'm very confident as a result of this that we are going to grow both of our products, particularly, as I have said, in 2022 over 2021.
Helen Torley: And importantly for 2023, we're going to be in a great position to grow both brands for the future.
Helen Torley: Thanks Corinne.
Corinne Jenkins: Is there any additional color that you can provide on the pull forward pre the sub queue pulling it into the Wave 3 group of products and potentially any color and what that suggests about the relative importance of that product to your partner and within the education?
Helen Torley: I'm so sorry Corinne, I shouldn't catch some parts of that.
Corinne Jenkins: Would you mind repeating?
Corinne Jenkins: Sure, sorry.
Corinne Jenkins: What additional color can you provide on the previous sub queue pull forward?
Corinne Jenkins: That's now in Wave 3.
Corinne Jenkins: It was previously Wave 4.
Corinne Jenkins: And then any thoughts on what that suggests about the relative importance of that product to Roche in that space?
Helen Torley: And they commented at one point that being able to move Ocrevus to SubQ really was fitting with where therapy seems to be going in this marketplace.
Helen Torley: So those comments certainly signal to me that they see SubQ as an important part of their offerings for patients with multiple sclerosis.
Helen Torley: Great.
Corinne Jenkins: Thank you.
Operator: Again, if you would like to ask a question, press star, then the number one on your telephone keypad.
Operator: Your next question comes from David Rissinger.
David Risinger: Your line is open.
David Risinger: Yes, thanks very much.
David Risinger: So I have a couple questions, please.
David Risinger: First, could you talk about or tell us what the impact of Anteras was on non-GAP EPS in the second quarter? So what the figure was for the second quarter, and then what is the expected impact on a non-GAP basis on your updated full year 2022 non-GAP EPS projection?
David Risinger: Second, could you remind us, I can't recall, I apologize, but what has been said about pursuing a once-daily tolando and potential timing?
David Risinger: And then third, could you please comment on business development prospects, so opportunities to sign new partnerships in the near to medium term?
David Risinger: Thank you.
Helen Torley: Okay, thank you, David, for the questions.
Helen Torley: And I'll ask Nicole to start.
Helen Torley: I will take these in order.
Nicole LaBrosse: Would you answer the questions on the non-GAAP EPS?
Nicole LaBrosse: Yeah, happy to, David.
Nicole LaBrosse: So while we haven't provided that level of detail, we did provide that the Ontario's revenue streams did contribute $18.7 million for the quarter. And just a reminder on that contribution, that is from the time period of May 24th, the date of acquisition, through to the end of the quarter.
Nicole LaBrosse: So for that period, that is the period that we've included in our Q2 results.
Nicole LaBrosse: And then I can say for full year as well, you'll see that we did update our guidance for the full year, including updating our non-GAAP diluted EPS, and we've adjusted that range. We've increased it by five cents per share. And that is reflective of the accretion that we project for the full year related to the Ontario's acquisition and the contribution from that part of the business.
Helen Torley: All right, and I'll move to the once-daily Talando. We can provide an update that we did not exercise the option to pursue a Talando XR, which is the once-daily Talando potential development with lyphosate.
Helen Torley: And so off to a very strong and encouraging start, based on just the last several weeks of BD discussions.
Helen Torley: Thank you.
Operator: Your next question comes from the line of Jessica Fye.
Jessica Fye: Your line is open.
Jessica Fye: Hey, guys.
Jessica Fye: Thanks for taking my question.
Jessica Fye: So with the Antares closed under your belt, I was wondering if you could update us on, your capital allocation priorities when you think about additional share repo versus debt pay down versus more acquisitions.
Helen Torley: Thank you.
Nicole LaBrosse: Yes.
Nicole LaBrosse: Let me ask Nicole to address that.
Nicole LaBrosse: Yeah.
Nicole LaBrosse: Thanks, Jess.
Nicole LaBrosse: I would say we continue to be focused across the board on our capital allocation priorities, specifically in regards to share repurchases. Our plans remain intact with our existing $750 million plan that we initiated late last, year, a three-year plan. We did, in this quarter, complete the first $150 million purchase of that, which was utilizing, an accelerated share repurchase program, so that was completed this quarter, and we do plan to purchase up to an additional $100 million in the remaining months of the year. So that is still tracking nicely.
Nicole LaBrosse: Again, we do continue to monitor our access to capital markets and our access to debt, and we do have a low net leverage ratio of 3.3 times at the end of the quarter, which we expect to reduce to less than three times by the end of the year.
Nicole LaBrosse: So we're continuing to access that type of leverage as well.
Nicole LaBrosse: And then again, growing externally, that also continues to be a focus for us.
Nicole LaBrosse: As Helen mentioned, we're very focused on the integration and the success of this acquisition, and putting all the pieces in place here, but that will be an area of focus for us to continue to grow externally as well.
Jessica Fye: Great, thank you.
Operator: Again, if you would like to ask a question, press star, then the number one on your telephone, keypad.
Operator: There are no further questions at this time.
Operator: Ms. Torley, I turn the call back over to you.
Helen Torley: Well, thank you.
Helen Torley: We appreciate everybody joining us for this call.
Helen Torley: Obviously, an exciting quarter for us with strong operational performance, which is the, key hallmark, we believe, of Helizon, even as we integrated Antares.
Helen Torley: And so we look forward to providing additional updates in the next quarter, where we expect, to continue this very strong momentum and success.
Helen Torley: Thank you all for your attention today.
Helen Torley: Bye-bye.
Operator: Please wait.
unknown: The conference will begin shortly.
unknown: Mr. Carter.
unknown: Mr. Carter!
unknown: It seems ridiculous!
unknown: What業務?
unknown: Boss, take it easy.
unknown: Our company is doing fine!
unknown: Now, don't ask me lentents!
unknown: Boss, please!
unknown: I've been calling you hours, before the scenario!
unknown: I hope you won't forget us.
unknown: You're our family now, so please?
unknown: You're right.
unknown: What was your first choice?
unknown: The party!
unknown: Okay, now.
unknown: Have a seat, and I'll be with you.
unknown: I know where you are.
unknown: Thank you!