Q4 2022 Halozyme Therapeutics Inc Earnings Call
Good afternoon. My name is Regina and I will be your conference operator today at this time I would like to welcome everyone to the halos I'm fourth quarter and full year 2022 financial and operating 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 would like to ask a question. During this time simply press Star then the number one on your telephone keypad. If you would like to withdraw your question Press Star. One again. Please note that this event is being recorded I'll now turn the call over to Trump buoy Halos Vice.
President of Investor Relations and corporate Communications. Please go ahead.
You operator, good afternoon, and welcome to our fourth quarter and full year 2022 financial and operating results conference call.
In addition to the press release issued today after the market close you can find a supplementary slide presentation that will be referenced during today's call in the Investor Relations section of our website.
Leading the call will be Dr. Helen Torley <unk> President.
President and Chief Executive Officer, who will provide an update on our business and no culebra off our Chief Financial Officer will review, our financial results for the fourth quarter and full year 2022, as well as guidance for 2023.
On today's call, we would be making forward looking statements I refer you to our SEC filings for a full list of risks and uncertainties during the call both GAAP and non-GAAP financial measures will be discussed certain non-GAAP or adjusted financial measures are reconciled with the comparable GAAP financial measures in our earnings press release and slide presentation.
I will now turn the call over to Helen Torley.
Thank you Tom and good afternoon, everyone I'm very pleased with our fourth quarter and full year 2022 results, which continues to reflect strong financial and operational performance across the entire company, creating positive momentum and positioning them for an exciting 2023.
In 2022, we extended our leadership as a subcutaneous drug delivery platform company through the continued expansion and progress of our insurance portfolio and through the acquisition of Antares pharma and the small volume auto injector platform.
The acquisition also resulted in the diversification of our revenues with the addition of the auto injector and specialty to stock storm products businesses.
Moving to slide three.
We achieved record revenue of $660 million in 2022, an increase of 49% year over year.
This strong performance was primarily driven by the continued growth of our enhanced portfolio includes revenues from our acquired auto injector and specialty product businesses.
Fourth quarter 2020 revenue was $181 million, an increase of 78% over the same period in the prior year, resulting from continued growth of enhanced royalty revenues incremental product sales and royalties from our small volume auto injectors and sales of <unk>, our commercial testosterone replacement therapy product.
As we look ahead, we entered the new year with compelling growth opportunities.
Our insurance capabilities support our goal to expand the number of current and new partners utilizing enhanced our high volume auto injectors plus in hand and.
Our small volume auto injectors.
As a result, <unk> is well positioned for continued growth.
This growth is reflected in our guidance for 2023.
We predict record revenues of $815 million to $845 million gross of 23% to 28% over 2022.
We project EBITDA of $450 million to $440 million greater than 30% year over year growth.
In 2023, we have multiple drivers of new opportunities contributing to near and long term growth.
These include two potential new commercial lunches Burnham for subcutaneous <unk> subcutaneous Ip's Elizabeth.
Current partners advancing new targets into the clinic and advancing their development program.
And it is our goal to sign a new enhanced agreements and enhanced select high volume water injector agreement any small volume auto injector agreement.
Moving now to slide four I'll provide an overview of the royalty revenue projections for 2023, we project total royalty revenue, including in hand, and our auto injector devices, a 445 to 455 million.
Growth of 23% to 26% from royalty revenue of $360 million in 2022.
This guidance reflects continued projected growth from our strong fourth quarter performance in which total royalty revenue was a record $106 million, which represented 69% growth over the fourth quarter of 2021.
Our wave two products dark like subcutaneous and <unk> continued to drive the strong royalty revenue growth.
The robust and rapid adoption of doors like subcutaneous <unk> in the U S and Europe demonstrate that adoption faces no real barriers in either geography.
As Gulfport rapidly in Europe demonstrates the acceptance of our first product launch utilizing enhanced.
As strong adoption of our enhanced subcutaneous product by physicians and patients worldwide support our excitement for the upcoming wave three four and five product launches.
I'll now move to slide five which focuses on <unk>, which is continuing on its remarkable growth trajectory.
Sure.
The subcutaneous version of <unk> in the United States continued to grow share of total sales achieving 86% share of total sales of <unk> by the end of the fourth quarter of 2022.
Importantly, total <unk> sales in 2022 also continued to demonstrate strong growth.
<unk> parent Johnson <unk> Johnson reported full year 2022 worldwide sales of <unk>, including both the IV and subcutaneous forms of $8 billion.
An increase of almost 40% year over year on an operational basis.
For the fourth quarter worldwide sales of <unk> for more than $2 billion, an increase of almost 34% year over year on an operational basis.
Johnson and Johnson highlighted on their year end results call that the increase in <unk> sales was driven by share gains in all regions continued strong market growth and continued uptake of fast grow.
With the opportunity for more Houston frontline therapy, analysts' projections for Dar slicks total revenue are estimated to achieve more than $16 billion in annual sales by 2028.
We predict <unk> will continue to grow for years to come as a result of this strong growth in Dod likes for the vast majority of use is and will continue to be <unk> subcutaneous.
Our second wave two commercial product is roche's, Tesco, which is a combination of <unk> and herceptin for subcutaneous injection for patients with early and metastatic <unk> positive breast cancer.
In 2022.
We will continue to show good uptake with Roche reporting 740 million Swiss francs in sales for the full year 2022, well on the week of becoming a $1 billion brand.
With 33% conversion and the early launch countries physical offers a five to eight minutes subcutaneous administration time compared to ours with standard intravenous administration.
On their recent fourth quarter call Roche stated that they expect continued growth and significant conversion Fayetteville to continue.
On slide six is an overview of our waves of potential launches.
Focusing on wave three these products represent a mix set of royalty revenue opportunities the potential launches projected between 2023 and 2025.
Three products, our subcutaneous <unk>.
<unk> <unk> and <unk>.
Our longer term growth trajectory is further supported by our with forecast with potential launches in the 2025 to 2027 timeframe.
We forward comprised 10 partner products, two of which are in or about to start phase III and the remaining eight are in the ongoing phase one clinical testing or have completed phase one testing.
I'll move now to slide seven and say a few words about why I'm. So excited about the potential that is represented by our wave three launches.
Firstly all of the <unk> III products are approved in at least one indication as an intravenous administration.
As an important derisked in terms of development risk.
Secondly, all of the potential for long stint between this year and 2025.
Thirdly further de risking the opportunity to have these product sub QF cartage morphine organics and Roche has said <unk> have completed positive phase III studies and are currently under regulatory review with the potential for approval decision and launch in 2023.
And the fourth key point is that the opportunity represented here in terms of analysts' projections for total product sales is $30 billion in 2028 Cigna.
Significantly higher than the opportunity for our wave two products that are driving our strong royalty revenue growth today.
Let me now provide some more detail on each product.
Summary of the ongoing indications seeking studies for the waste stream products is provided on slide eight.
Beginning with our journey.
In November of 2022.
<unk> FDA acceptance of the biologics license application for subcutaneous <unk> utilizing <unk> for the treatment of adults with generalized myasthenia gravis and also the submission of a marketing authorization application to the European Medical agency.
In January of 2023.
We provided an update <unk> date has been extended to June 22023 to allow the FDA sufficient time for a review of the data that had been submitted.
We are excited that subcutaneous expertise <unk> has the potential to be the first of our wave III partner launches with U S approval and commercial launch projected in the second half of 2020.
<unk> flagship pipeline product and <unk> is being developed for the treatment of multiple autoimmune disease indications with subcutaneous development of six indications of which four indications are only for sub two delivery.
Multiple data Readouts are projected in 2023, including data in chronic inflammatory demyelinating polyneuropathy in the second quarter of 2023 and for idiopathic Thrombocytopenic purpura and pemphigus in the second half of the year.
Analysts predict potential total effort <unk> annual revenue of approximately $5 billion in 2028.
The launch of the intravenous version is certainly off to a strong start in the early launch countries.
<unk> preliminary results for the fourth quarter, our Gen X noted strong physician and patient demand for <unk> and reported total quarterly net product revenues of $175 million and full year 2022 revenue of $402 million.
Moving now to Roche Roche is one of our longest standing and experienced partners within <unk> and we're delighted to collaborate with them on to our waste three opportunities subcutaneous Athena lithium up and subcutaneous <unk>.
Beginning with the two the listener in November of 2022, Roche announced the submission of a biologics license application to the FDA and a marketing authorization application to the EMA for subcutaneous <unk> with enhanced.
Subcutaneous appeal as map has the potential to be more convenient for patients and physicians with an approximate seven minutes subcutaneous administration time compared to 30 to 60 minutes for IV treatment.
With a <unk> date of September 15, 2023, Roche expects the T cell is mapped to the only subcutaneous anti PDL one on the market for a full year.
We're excited to see the continued growth of two centric.
In its recent earnings call Roche reported IV centric revenues increased 14% year over year to $3 7 billion Swiss francs for full year 2022.
Transitioning natural Oca's ultra vis for multiple sclerosis.
<unk> achieved sales of more than 6 billion Swiss francs in 2022, representing an increase of 17% year over year for Roche.
Currently there are two IV regimens approved for use.
When considering both the treatment and observation schedule the range of time for patients receiving IV <unk> is three five hours at the fastest to six hours at the longest.
The phase III trial for subcutaneous <unk> ongoing.
Or subcutaneous target total administration and observation time to the first and second doses one hour with the goal that for each subsequent dose the data supports regulators approving a 10 minute administration and observation time.
Is it a readout from this study is expected in mid 2023.
Moving to our fourth wave three products and evolving that BMS.
BMS continues to progress with its phase III study of subcutaneous <unk> utilizing enhanced in patients with renal cell carcinoma.
And BMS also recently initiated a second phase III study of <unk> subcutaneous with enhanced in patients with melanoma.
On its recent fourth quarter call BMS noted Opdivo IV sales of $8 2 billion for full year 2022, an increase of 10% year over year or 14% excluding FX.
In summary wave III represent substantial more derisked near term new royalty revenue opportunity for hail event with that opportunity driven by the timing of approval of the subcutaneous versions of the drugs within the projected 2023, 2025 time window and also the speed and peak all conversion.
Two subcutaneous.
Let me just make a brief comment on the enhanced pipeline progress in 2022.
These to report that we continued to advance and expand our enhanced pipeline supporting 12, New partner study start meeting our 2020 do go to support initiation of at least 10 New studies.
Starts included supporting part is advancing to new products with enhanced into the clinic and supporting initiation of three new phase III programs. The final step in development prior to a regulatory submission.
In addition, we supported the initiation of an additional seven new studies designed to further explore and potentially expand the profile of ongoing partner subcutaneous program.
In 2022 this pipeline progress contributed strongly to recognition of the approximately $109 million in total collaboration revenue with notable milestones recognized for phase III study initiations for Ami vans map sub Q and the volume up to us for <unk>.
In 2023 and beyond our goal is to continue to expand the number of products in development and to advance products through development to regulatory approval and launch, adding multiple new royalty revenue streams.
I'll now move to our <unk> four product candidate pipeline, which is shown on slide nine we.
We have 10 product candidates in our way for pipeline, which if they proceed and development and to approval and launch represent potential revenue drivers between 2025 and 2027.
Two most advance product against <unk> and BMS is fixed dose combination of <unk>, plus relenza month with enhanced which are in or soon to start phase III development.
Both of these products are already proved as IV treatments and important subcutaneous development derisk or.
In 2020 to Janssen initiated a phase III study of <unk>, plus <unk> with enhanced in patients with Egfr mutated advanced or metastatic non small cell lung cancer.
In 2020 to Bristol Myers Squibb also initiated the phase III study called relative with tier 127, which is the goal of demonstrating that drug exposure levels of <unk> plus <unk> fixed dose combination of enhance is not inferior to intravenous administration of the same combination and this is being studied in patients with previously untreated.
Metastatic or Unresectable melanoma.
We're expecting the first patient to be dosed in this study in early 2023.
Let me now transition to an update on our auto injector and specialty product businesses beginning on slide 10.
Our acquisition of Antares last year further strengthened our leadership in direct delivery, creating the opportunity to develop its high volume auto injector by combining enhance with our auto injector knowhow.
In the fourth quarter, we continued our discussions on the opportunity for our high end small volume auto injectors with current and new potential partners.
Our Hy Vo northern gesture for rapid delivery of up to 10 ml enabled by intense offers a truly differentiated opportunity for patient friendly high volume subcutaneous treatment delivery that can be utilized across the spectrum of disease areas for both small molecule drugs and biologics in 2022, the team made significant pro.
<unk> on the development, albeit working prototypes.
Project that is ready for clinical testing and we expect to initiate and complete human feasibility studies by mid year 2023.
Our goal in 2023 is to get an agreement with a current or a new partner to elaborate on the custom development of a high volume auto injector.
I'll turn now to our commercial business, which includes <unk> lando shown on slide 11.
Beginning with dice that this is our weekly virtually painless subcutaneous testosterone replacement treatment, which is patients delivered by auto injector.
Our goal in 2023 is to grow as Ive said to over $100 million in revenue as a stepping stone to accelerate growth in 2024 and beyond.
In 2022 in the seven months since the acquisition, we focused on increasing <unk> demand identifying opportunities to reduce gross to net deductions and identifying and developing plans to address points of prescription leakage that we have identified.
While we have continued to achieve new weekly high prescription levels each month in 2022.
<unk> net revenue came in slightly lower than our expectations driven by a mix of lower demand and lower net price than projected.
As we start 2023 year to date I am pleased to say that <unk> demand is off to an excellent start with the growth over Q4 exit on track with our plan to deliver $100 million in revenues in 2023.
Our growth strategy focuses on converting patients from the most common treatment approach, which is intramuscular injections.
Testosterone injections can be associated with pain and can require physician or health care practitioner administration.
<unk> with its weekly virtually painless subcutaneous injection delivered by a patient administered auto injector offers a new approach that may address these challenges.
We also remain focused on gaining access for <unk>, our oral testosterone treatment.
We have not yet reached agreement with pharmacy benefit managers on an appropriate rebate rate.
<unk> access is established we're projecting low revenue for <unk> in 2023.
Closing and Antares are total revenue since the acquisition was $113 million, which came in slightly below our projected range of $115 million to $125 million.
Which we had provided at the time of the acquisition.
Before I hand, the call over to Nicole let me reiterate our commitment to our strategic growth and capital allocation priorities shown on slide 12.
Our goal continues to be to maximize revenue growth and durability.
We're continuing to return capital to our shareholders with our share buyback plan.
We've now completed $350 million of the $750 million three year program that was approved by the board of directors in December of 2021.
Our goal in 2023 is to repurchase up to an additional $150 million pending market conditions and other factors as part of this plan.
And we're also continuing to evaluate M&A opportunities seeking additional platforms or companies with derisked assets platforms or technologies, where we see the opportunity for significant revenue growth and revenue durability.
I will now turn the call over to Nicole who will discuss our financial results for 2022.
For 2023 Nicole.
Thank you Helen 2022 was a year marked by strong financial performance <unk> recorded record revenue as a result of growing enhanced royalties and the addition of the Antares business.
We completed the acquisition of Antares that met our expectations and being accretive to revenue and non-GAAP EPS.
We also strengthened our balance sheet through a strategic refinancing walking into a lower interest rate.
That combined with our cash generation puts us in a strong capital position with a net debt to EBITDA ratio of three two at year end.
And as Helen mentioned, we remain committed to deploying capital through our share repurchase program to complement our EPS growth with.
With our 2022 repurchases our share buyback programs have resulted in the repurchase of $30 6 million shares since 2019, which contributed 32 cents to non-GAAP earnings per share for the full year 2022.
I'll now turn to slide 13 for our fourth quarter 2022 financial highlights I'll focus on total revenue for the fourth quarter, which was 181 5 million.
78% increase compared to $102 million for the fourth quarter of 2021 the.
The increase was driven by an increase in royalty revenue.
Merrily attributable to subcutaneous <unk> and the addition of product sales as a result of the <unk> acquisition.
Revenue for the quarter included a $106 million in royalties and increased 69% compared to $62 6 million in the prior year period.
Lastly for the quarter GAAP diluted earnings per share was <unk> 42 cents and non-GAAP diluted earnings per share was <unk> 48.
I'll now turn to slide 14 for a review of the full year 2022 adults.
I'll briefly touch on some highlights here with more details available in our press release and 10-K filed with the SEC today.
Total revenues grew 49% to $660 1 million in 2022 off of an already substantial revenue base in 2021 or $443 3 million. The main contributor to this increase with higher revenue from royalties of $365 million.
77% from 2021.
Product sales of $191 million were up sharply from $104 2 million in 2021 due to the product contribution from the Antares acquisition.
Collaborative revenues of $108 6 million a decrease from prior year of 20% from $135 $3 million, resulting from fewer partner milestone driving events.
New for the year is amortization expense of $43 1 million as a result of the Antares acquisition.
Which we acquired intangible assets that are amortized over a useful life related to the auto injector technology platform and proprietary products.
Research and development expenses were $66 6 million compared to $35 $7 million in 2021.
Selling general and administrative expenses were $143 $5 million.
Compared to $53 million in 2021.
These increases were primarily due to the acquisition and an increase in compensation expense related to the ongoing combined larger workforce.
GAAP EPS was $1 44 compared to $2 74 in 2021.
As a reminder, 2021 GAAP EPS included a onetime tax benefit from the reversal of our tax valuation allowance representing approximately $1 <unk> per share.
non-GAAP EPS for the year was $2 21.
An increase from $2 in the prior year and an impressive achievement of 2022 reflects our first year recognizing income tax expense impacting 2022, non-GAAP EPS by approximately <unk> 50 per share.
Cash cash equivalents and marketable securities were $362 8 million on December 31, 2022.
Compared to $749 million on December 31, 2021.
Now, let me turn to our 2023 guidance on slide 15, which we are reiterating and with first provided on January 10th of this year.
For the full year 2023, we expect total revenues of $815 million to $845 million.
Representing growth of between 23% to 20% over 2022 total revenue.
We expect revenue from royalties to increase between 23% to 26% over revenues from royalties in 2022 to a range of $445 million to $455 million.
We expect EBITDA of $415 million to $440 million representing growth of more than 30% over 2022, EBITDA and excludes the impact of amortization costs related to the <unk> acquisition.
We expect non-GAAP diluted earnings per share of $2 50 to $2 65.
Our earnings per share guidance does not consider the impact of potential future share repurchases.
With that I'll now turn the call back over to Helen.
Thank you Nicole 2022 was a transformational year for hail event, we've made great strides as a combined company with our one team culture that enhanced our leadership in drug delivery and supported our continued growth 2023 will be another year with significant growth opportunities highlights include the potential start of our wave three products.
Lunches with two potential approvals in 2023 for a subcutaneous expertise and subcutaneous <unk>.
Continued progress in the development of our high volume auto injector with enhance the golar signing new collaboration agreements across our platforms and continued revenue growth, resulting from our commercial products.
I will end by thanking our Amazon team and our partners and collaborators for the strong progress made in 2022.
I'm excited regarding our 2023 plan that is resulting in our strong revenue and EBITDA growth guidance and.
And with that we will be now delighted to take your questions. Thank you everyone for joining US today, operator would you. Please open the call for the question.
At this time I would like to remind everyone in order to ask a question press star one on your telephone keypad. Our first question will come from the line of Mohit Bansal with Wells Fargo. Please go ahead.
Okay. Thank you for taking my question and congrats on all the progress.
Maybe one question, we get a lot.
Do we have some clarity on.
How inefficient reduction actually greet enhanced products at this point, especially the products which have.
Longer patent protection.
Due to the co formulation patents. Thank you.
Thanks Mohit. This time, we are still awaiting CMS to provide their regulations and the details as to exactly how it's going to be implemented and so there still is not that clarity. We obviously are watching that closely and we'll provide an update as it become cleaner and obviously the.
The question really is as to whether the subcutaneous which have a different BLA filing in a different launch date would restart a different clock and so no answer we can give on that yet, but that definitely of interest to us and our partners.
Got it Super helpful. Thank you.
Your next question will come from the line of Mike Difiore with Evercore ISI. Please go ahead.
Hi, guys. Thanks, so much for taking my question and congrats on the quarter. Two for me number one I noticed that Merck is conducting a phase III.
Non small cell lung cancer trial.
<unk> plus <unk>.
Any thoughts on how this may be different from in <unk>.
And the second question is.
Concerning subcutaneous did guide obviously with regards to expenses it would be a big project in 2023.
And you seem to be pretty bullish on the size of the subsea opportunity so having said that.
Why didn't the <unk> delay not lead to a change in your guidance.
Yes, thanks for those questions and let me begin with the question.
Question on markdown.
The data announced that study start Tom Mike We don't have any details as to exactly worked out mark is that using and how they are proceeding. So we really can't comment on that that would be a question, obviously better addressed to them. What we can see is with regard to enhance we obviously have established based on the proven well.
Tested leader in supporting subcutaneous delivery of drugs and we do find that our proven track record of success with five approval more than 600000 patients who have received treatment with enhance drug really puts us in a great position in a great negotiation position for continued to expand the number of deals we have so.
That's.
All I will say on that one on by Bart.
People may be aware the SDE did feel that due to some additional data that was submitted during the review process that they needed more time to review they extended the <unk> date by three months and so now the <unk> date is June of 2023.
Do have milestones associated with approval of products and so.
Obviously this pushing out three months doesn't make any change to our guidance. We still expect the full within 2023 based on the information we have today.
Got it thanks, so much.
Your next question comes from the line of Jason Butler with JMP Securities. Please go ahead.
Hi, Thanks for taking the questions. Two from me first of all you've pointed previously to the potential for <unk>.
Hans plus auto injector partnership or collaboration this year is that still your expectation that that could occur and then secondly, the clinical work that youre doing the feasibility testing can you maybe give us some parameters about how youre assessing success or progress with that work in 2023.
Yes, thanks for that Jason Yes, we are indeed still planning and actively discussing with both current and potential new partners.
Beginning development program of enhanced with a high volume auto injector, so very happy with the progress of those that those discussions.
The clinical study of which we in my prepared remarks mentioned, we expect to have data for that mid year is a feasibility study we created a prototype we tested it in some other models by the end of last year, which was our goal, but now we want to take it out into patients.
Human volunteers and basically just show the feasibility and reliability of it. So as an example, the primary endpoint will focus on the number of devices that fire it appropriately and delivered the drug in the required amount of time, that's pretty standard for these types of tests and it's a nice week just to confirm.
The prototypes are effective in doing what it was designed to do.
Great. Thanks for taking my questions.
Thank you.
Your next question will come from the line of Jessica Fye with J P. Morgan. Please go ahead.
Great. Good afternoon, thanks for taking my questions.
First.
Can you elaborate a little bit on the.
Studies the profile enhancing studies mentioned on the last slide of the.
Jack.
<unk> patient preference and on body device can be just curious to learn a little more there and then second.
Following up on an earlier question about Merck's sub Q Pembroke there it sounds like it's using hyaluronic days as well.
Can you walk through why you would not be worried about partners trying to pursue a similar.
Approach, creating their own hands ish products with Tyler on a days and or whether you expect Merck to infringe any IP. Thank you.
Okay.
Those questions I'll begin with the profile enhancing studies and for everybody. That's on slide 18 of the deck that we showed I think Jess you, particularly want to hear about the patient preference study on the on body device. These are studies that partners are doing for already.
Commercialize our late stage development drugs.
And it's all.
These types of studies are done to enhance the profile or provide additional information to inform patients and our physicians with regard to how the drug can be used.
These are.
Trials that are actively listed on clinical trials Gov, but we didn't have permission from our partners that are listening here, but you can find more about the lens.
Routine and I think exciting that partners are continuing to explore and expand the profile of drugs that are in development.
With regard to more accounts.
I think.
The reason we are not worried about our current partners wanting to move in and develop their own.
They are on highway runner days and start incorporating that really focuses on a number of factors. The first one is that we bring a very strong safety track record.
The issue when you combine two biologics together is the worry about immunogenicity.
With 600000 patients treated b note that that has been a very well characterized safety profile first question that comes up in all of our new deal negotiations is that way I think about the first one Jack we also have established a very strong relationship with all of our partners demonstrating our expertise and develop.
<unk> and brightcove luxury and reliability of supply.
And then if you if you'd like to phrase of a broken why fix it.
That is another reason they would not consider doing that we obviously are very conscious about being reliable and a low cost supplier to our partners. So I'm thinking about that would make no sense and then the third one I think is a little bit more strategic for the partners or if we look at our partners. Many of them are more focused on developing <unk>.
<unk> entities to deliver new large revenue streams, rather than take the time and resources to focus on a modest reduction to what it's costing for example in our royalty rate and so for all of those factors, we think at Haile.
Unlikely that our partners would want to develop their own.
Are you page 20 with no indication they are.
Our next question will come from the line of Corinne Jenkins with Goldman Sachs. Please go ahead.
Yeah, good afternoon, everyone.
Maybe just for clarification for me I think we've previously talked a lot about the five ml, but now youre talking about <unk> 10, a mile as well can you just talk about where you stand on the development of a 10 ml version and.
What are some of the gating steps before that can enter the clinic.
Yeah. Thanks for that current and dumped a prototype has actually been designed with flexibility, but depending on what a partner actually wants it can deliver anything from.
Five ml to 10 ml.
And so it's the same basic prototype.
We have in development just to fill cartridge will be able to be varied depending on what volumes that partner actually want. So this that clinical testing that we plan to do this year will evaluate several options of ballgame up to 10 ml.
That's helpful. Thanks, and then as you think about kind of your current portfolio of partnered products what portion of them fall under 10 ml versus five ml versus less than that is that something that you can provide clarity on.
Yes, we have.
<unk> mentioned when we did the acquisition that we have a small number of our partner programs to date that are in those volume ranges, we tended to work on larger volume <unk> b being quite common for our Boeing but there are certainly a handful of current partners who are in that five to 10 ml range.
Haven't provided that information public place that we're not in a position to do that but as we said when we did the acquisition. This also.
And part of the strategy and moving to enhance the high volume auto injector is to get new deals and new collaboration partners and I can say from us evaluating the landscape and see it.
A number of opportunities out there that maybe new deals for us in the future that allow us to be delivering that five to 10 ml.
One as well so think of it as some opportunity with our current partners, but really this was to open up a whole new market of opportunity for enhanced scale of that.
Thanks, maybe just one last one for me we've got a couple of product launches coming this year, how should we think about the path to co formulation patents for those products is that something we can get some visibility on in the near term.
Yes, I can say that all of our currently marketed products have received or have pending patents for co formulation patents.
I can also say Karen that all of our development partners are very actively engaged in a number of the ones who got advance to late stage development have already filed applications for co formulation patents.
Specific by partner is not something we can talk about it because that partner confidential information and I think the visibility will come as patents are issued those become public domain and at that point in time youll be able to find them and we'll be able to talk about them, but our partners have been unanimous in their support or.
Protecting their inventions and filing pro form patents, which obviously, we are very pleased and support because in general those have been a bit was in terms of the duration of time, we get royalties and they can also push out the time for the stack done. So we're very very aligned in our very active focus on new co form submission.
Thank you.
Yes.
Your next question will come from the line of Vikram <unk> with Morgan Stanley . Please go ahead.
Vikram your line maybe on mute.
Hi can you hear me now.
We can we can great.
Okay, great. Thanks for taking my question and sorry about that.
So we had one question on the subcutaneous realism app, so assuming the phase III data here is positive how do you see.
<unk> uptake for sub Q option ramping in this market.
Particularly given some recent competitive developments here in the multiple sclerosis space. Thanks.
Yes, and so we are expecting based on the latest comments from Roche the data mid year.
With the goal of taking therapy from the treatment and observation time for a minimum of three to have our fix are done to the initial doses with sub Q being an hour for injection and observation and ultimately the goal is 10 minutes.
The data support that so you can see what a transformation that would be for patients who are receiving therapy.
<unk> therapy lifelong and having to go to an infusion suite.
I do think just based on that profile and be able to get to a simple.
10 minutes.
Jackson this will be very competitive with other products that are available on the market Roche has not commented on specific uptake, but they have commented that they see an exciting market for this sub Q.
Auction and delivery.
Once again for any questions. Please press star one on your telephone keypad. Your next question will come from the line of David Risinger with SBB Securities. Please go ahead.
Hi, This is Dan on for Dave two questions for US. Please. So one can you provide some more color on your portfolio of phase one candidates.
Including the historical there'll be phase one candidate congratulate advancement to phase III.
So the typical timeline for that.
Phase III go no go decision after Canada enters phase one.
Second question any modeling color you can provide on the first quarter of 2023 in the following quarters. Thank you.
All right so with regard to the phase one candidates that though is really today would be what we are calling our wait for products in place.
<unk>.
That phase III, so that will be lifted.
<unk> nine.
As you can imagine that it really does all the pain on the individual partners plans and programs as to exactly what that timeline is.
Two products that are at the top of the list in that case <unk> Nikola map.
Moved up pretty rapidly.
From their end of phase one into into the phase III decision and in other cases, we have studies that are ongoing such as our gen, except 117 and recovery. So those are still active studies and so you wouldn't move forward.
There was one study there <unk> I think we've talked about that before.
Are we.
Heard comments from horizon to say they were evaluating going forward and options with them without Peach 'twenty and so we're still waiting for a final decision on the plan there, but I would say just based on those example, the majority of the studies here listed are still ongoing in the phase one with <unk> being one that's completed.
And so once those studies are finished and a decision is made and often there's a conversation with the FDA about the design of the phase III study.
Usually is measured in months and at that time, I think six months plus or minus is a reasonable time frame for transition we might see between phase one of the phase III for a partner who is wanting to move quickly to move forward into phase III development.
If I start today's meet this repeat the second question you talked a little bit for us.
Yeah no problem. So the second question was any modeling perspective for the first quarter of 2023 in the following quarters.
Yes ill ask Nicole to address that yes, I'd be happy to share. So while we don't provide guidance on a quarterly basis, what I can say as we look forward to Q1.
On a revenue perspective.
Are able to share that total collaboration revenue we are forecasting to be relatively flat in 2023 versus 2022, and we do have line of sight to milestone beginning in the second quarter of the year and really being more weighted into the second half of the year. So that can give you a little bit of blindness.
Line of sight to expectations.
And then and then when I talk about maybe looking at royalties. So just to reiterate our royalty guidance for the full year is $445 million to $455 million.
What we do see in Q1 is sequential growth to be flattening in the first quarter and then grow sequentially thereafter throughout the year and Thats really a driver.
Seasonality with our Epipen, we have FX rate resets at the start of the year.
Also looking into Q1, we're expecting minimal true ups in the first quarter.
So I will just add that.
We wanted to provide that bit of color. We're very excited about the continued growth that we're going to see in the.
Subsequent quarters, both in terms of our royalties, but also milestones that are a little app that will begin in Q2 as Nicole good.
That's very helpful. Thank you.
Do we have no further questions at this time, what is an gentlemen that will conclude today's meeting. Thank you all for joining you may now disconnect.
Please wait the conference will begin shortly.
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