Q2 2023 Halozyme Therapeutics Inc Earnings Call
Good afternoon, My name is Chris and I'll be your conference operator today.
At this time I'd like to welcome everyone to the halos items second quarter 2023 financial and operating results conference call.
After the Speakers' remarks, there will be a question and answer session.
If you'd like to ask a question. During this time simply press Star then the number one on your telephone keypad.
Note. This event is being recorded.
I'll now turn the call over to Trombley Pillows Diamond Vice President Investor Relations and corporate Communications. Please go ahead.
Thank you operator, good afternoon, and welcome to our second quarter 2023 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, telephones, President and Chief Executive Officer, who will provide an update on our business and Nicole look Ross, Our Chief Financial Officer will review, our financial results for the second quarter 2023.
On today's call, we'll be making forward looking statements is outlined on slide two I would also 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'll now turn the call over to Dr. Helen Torley.
Thank you Tom Good afternoon, everyone I'll begin on slide three.
We're very pleased with our second quarter 2023 results, where we delivered strong year over year topline and bottom line growth.
With our partners.
Article milestone bearing value, creating events for the next wave of subcutaneous product that we project will deliver meaningful royalty revenues outweighed III product.
Most notably organic foods five garden high to low that is co formulated with <unk> received FDA approval for a generalized myasthenia gravis in June making this the sixth approved product utilizing enhanced.
We are excited that co formulated products using <unk> technology continued to deliver substantial potential benefits for patients and for the health care system.
Another notable event in the quarter was the publication on June 30 of the final CMS guidance for the Medicare drug price negotiation program, which was created under the inflation reduction.
The final guidance implied for 2026 until Medicare part D drugs.
The final guidance treat fixed combination products, which include two or more active ingredients or moiety as distinct right for the purposes of applying the negotiation provision.
A combination product will be treated as different from a product that contains only one of the combination product active ingredients.
We believe that if the single ingredient product become subject to negotiation and the cap rate the fixed combination product will be subject to its own separate negotiation eligibility timeline.
Today, our fixed combination product or health care practitioners.
I'm covered under Medicare part B.
In light of the part D final guidance, our assessment remains that if CMS continue this approach regarding combination product when the part b drugs become eligible for negotiation are partnered subcutaneous drugs, which are co formulation with intent would be treated as separate from the IV versions of these drugs.
We believe our caps price of closed on any IV version of the drug would that not apply to the enhanced combination product.
Then they'd enhanced combination product would be subject to its own negotiation eligibility timeline.
We believe this outcome is appropriate because of the added patient benefit because as represented by the <unk> combination product.
Our enhanced enzyme RPX 'twenty is listed by the SCE is an active ingredient in theory as a combination product.
Closing out these highlights I'm also delighted to announce that our clinical test of a high volume of auto injector was a success confirming both the feasibility and tolerability of rapid injection of 10 millimeters of a biologic with a high volume of auto injector.
All of this progress strengthens our confidence in achieving our updated full year 2023 financial guidance, where we have raised our non-GAAP EPS range and increased the lower end of the range for total revenue and for EBITDA.
With that summary, let me provide some details on the event during the quarter that are driving revenue in 2023 and beyond.
Turning to slide four <unk> is a leading drug delivery platform company with a diversified our robust portfolio, which includes our enhance royalty business, our auto injector technology business and our specialty commercial products.
As an established leader and rabbit subcutaneous drug delivery with enhanced and differentiated ultra injector technology, we remain the partner of choice across the industry.
Moving now to slide five in.
In the second quarter, our partners make significant progress with their commercialization and development activities related to our <unk> III product.
<unk> is comprised of four products that are projected to launch between 2023 and 2025 and would you expect that to result in strong and durable long term growth for Amazon.
On June 20, <unk>, the first of our wave three products <unk> with enhanced for generalized myasthenia gravis received SBA approval and launch shortly thereafter.
Approval and launch resulted in milestone revenues for hillenbrand in the border.
<unk> will also receive royalties on net product sales.
Shortly thereafter on July 17th Organics announced positive data updates year study, which evaluated <unk> got high truly within hand, and patients with chronic inflammatory demyelinating polyneuropathy or see IDP.
With a 61% reduction in risk of relapse versus placebo. This marks the second positive readout six indications for <unk> that are currently being evaluated.
Moving now to the second of our wave III products that had positive clinical study results in the quarter.
On July 13, Roche reported that their phase III Ocarina, two study of <unk> subcutaneous co formulated with <unk> met the primary and secondary endpoint in patients with relapsing forms of multiple sclerosis, or with primary progressive multiple sclerosis.
The study evaluated subcutaneous okra. This total treatment time in 10 minutes, which compares with multiple Arthur treatment time with the IV.
We are excited by all of this progress and what it can mean for patients as you will see summarized on slide six.
And <unk>, which is an active ingredient, but independent actions when co formulated with our partner product allows for rapid subcutaneous delivery of large volume drugs.
Multiple published studies subcutaneous delivery decreases treatment time on treatment burden for patients, resulting in an improved patient experience.
And as we saw with <unk> that may also be in lower rate, a potentially life threatening infusion related reactions, which is a clear clinical benefit for patients.
Subcutaneous delivery of drugs co formulated with Manhattan has also been demonstrated to translate into meaningful cost savings and advantages to the health care system, including decreased health care practitioner time, and resource utilization greater patient throughput and decreased drug wastage.
As global infusion capacity constraints become more acute subcutaneous delivery can play a vital role in allowing patients to be able to access therapy and to receive their planned treatment on time.
I'll now provide an overview of our financial performance.
For the quarter, we reported total revenues of $221 million.
Representing a 45% year over year increase.
The key driver of revenue and revenue growth is our royalty revenues, which are shown on slide seven.
Second quarter 2023 royalty revenue increased 31% year over year to a record $111 $7 million.
We project continued quarter on quarter growth of royalty revenues throughout the year.
For the full year, we are maintaining our projection of 445 million to $455 million.
In royalty revenue, representing 23% to 26% growth over 2022.
Darko, it's fast food basket, our wave two products are the 2023 royalty revenue growth drivers.
And also included in the royalty revenue contribution from our small volume auto injector business, which remains stable and largely driven by Teva generic epipen.
I will note that for 2023, we estimate nominal royalty revenues for Viper truly and note the centric subcutaneous royalty revenues and this is based on the timing of approvals and the timeline. It takes for physicians to be confident regarding reimbursement.
Moving onto dark electric slide eight Jackson Dunckel X growth remains impressive with combined IV and subcutaneous revenue, increasing approximately 23% year over year on an operational basis in the second quarter of 2023 to approximately $2 4 billion. This increase was driven by share gains in all week.
And continued growth of the market, which was previously reported with the result of increased penetration into the front line treatment setting.
Analysts predict annual GARS like sales of $16 $7 billion in 2028.
Dark like subcutaneous is globally established choice for physicians, who are using dark links for the treatment of multiple myeloma patients with 90% share in the United States and an estimated 80% sure outside the United States.
With the overall brand performance now driven by the use of the subcutaneous formulation total doors lakes brand growth, which was 23% year over year is also the key metric to measure dark licked subcutaneous growth and performance.
Turning now to Roche as Petco, which is shown on slide nine.
It's really the combination of predictor intersected for subcutaneous injections for patients with early and metastatic her two positive breast cancer.
The loans for a single five to eight minutes subcutaneous treatment compared with a much lengthier IV treatment schedule.
Of note, 85% of patients prefer expense go subcutaneous administration over the IV formulation of <unk> and Herceptin.
For the first half of 2023 Roche reported Vasco sales of 517 million Swiss francs and increase of 69% year over year.
<unk> is now launched in 38 countries a recent increase of eight countries and represents 35% sure, which Roche recently commented that they are expecting to grow to 50% share over time.
We also recently highlighted that share in Great Britain is 92% and the U S share continues to grow.
We're also anticipating a potential path for patient self administration of FESCO with an on body injector with pivotal phase one data from Osha study expected in the second half of the year.
I'll turn now to our wave three products, which are shown on slide 10.
As noted earlier these products represent the next group of royalty revenue opportunities for him event with four potential launches projected between this year and 2025.
Let me start with <unk>.
The launch of our <unk> via intravenous formulation in patients with generalized myasthenia gravis is progressing well with growth of 24% quarter over quarter to $269 million in the second quarter of this year analysts predict that <unk> will be a multibillion dollar annual revenue brand in 2000.
In 2008, the recent FDA approval and launch of <unk> with enhanced provides a new 30 to 90 seconds health care practitioner administered subcutaneous injection option with a short term monitoring time for patients with generalized myasthenia gravis.
At grid Mod is our <unk> flagship pipeline product and is being developed within hands in a total of six autoimmune disease indications today as far as these indications are being developed as a subcutaneous only delivery.
Data in the first of these opportunities only indications, which recently reported biogenic on.
On July 17th <unk> announced positive top line data from the adhere study evaluating <unk> had truly with enhanced for chronic inflammatory demyelinating polyneuropathy.
The study met its primary endpoint with a statistically significant P value of 0.000039 and demonstrated a 61% reduction in the risk of relapse with five <unk> compared to placebo.
The safety and Tolerability profile were consistent with the confirmed safety profile of <unk> and we look forward to our <unk> presenting detailed data from this study at an upcoming medical meeting and for preparing for global regulatory submissions.
Are you an exact how much did that work is now underway to evaluate the size of the addressable CIBC population and the opportunity which is informed by the positive adhere study data.
We continue to project two additional study Readouts for Viper Trudeau with enhanced this year with data in idiopathic thrombocytopenic purpura in pemphigus expected in the fourth quarter.
Moving now to Roche and we're looking forward to the potential approval of <unk> centric subcutaneous with inherent in the third quarter with Roche's U S. <unk> date of September 15, 2023.
Statements achieved the lithium app has the potential to offer greater convenience for patients and physicians with an approximately seven minutes subcutaneous administration time, which compares to 30 to 60 minutes for the IV treatment.
We believe this represents a significant advancement for patients health care providers and prepared.
For the first half of 2023 Roche reported IV geocentric revenues of $1 9 billion Swiss franc and increase of 12% year over year, which is driven by growth in the <unk> non small cell lung cancer and frontline <unk> cancer.
Moving now to OCA, but this is the third of the four way three opportunities that have no announced positive phase III data with enhanced.
The <unk> II study met the primary and secondary endpoints supporting preceding with regulatory findings for <unk> subcutaneous injection co formulated with enhanced demonstrating the potential for treatment in just 10 minutes, which compares to our risk for the intravenous formulation.
We look forward to ROE sharing detailed results of the trial at an upcoming medical meeting and to submitting data for regulatory approval to health authorities globally.
<unk> is an IV continues its impressive growth trajectory.
In the first half of the year Roche reported <unk> revenues of $3 2 billion Swiss franc, which represents an increase of 15% year over year and annualized is now integrated into $7 billion.
With a 22% share of patients globally and with more than 300000 patients treated <unk> remains the market leader in the U S and EU five.
We also expect further market share gains with the approval of subcutaneous administration of <unk>, creating the possibility for patients to receive treatment in additional multiple sclerosis centers those that don't have IV infusion infrastructure or where their IV capacity constraints potentially adding new growth opportunity for the brand.
The fourth week three product is such things nimble map Bristol Myers Squibb is also progressing with their phase III registration study of subcutaneous nimble about utilizing enhanced in patients with renal cell carcinoma.
Ines reported Opdivo sales of $2 1 billion in the second quarter of 2023, an increase of 5% year over year, excluding FX.
We are delighted with the advancement and pending regulatory approval for a waiver III pipeline.
In total these projects represent substantial near term new royalty revenue opportunity for <unk>.
Analyst projections for the total product sales for these products is approximately $35 billion in 2028, including the IBM <unk> formulation.
I will note that this is significantly higher than the opportunity for our wave two products, which are driving our strong royalty revenue growth today.
Moving to slide 11, I'll touch on some highlights from our wave four partner product development pipeline with enhanced.
Our longer term growth trajectory is supported by these wait for product with its development continued potential for launches in the 2025 to 2027 timeframe.
Wait for is comprised of 10 partner products two of which are in phase III and the remaining eight are in the ongoing phase one clinical testing or have completed phase one study.
Our goal is to continuously expand the number of products in development and to advance products through development to regulatory approval and launch, adding multiple sustainable new royalty revenue streams.
The two most advance product our Janssen subcutaneous formulation of <unk> and Bristol Myers Squibb fixed dose combination of <unk> plus <unk>.
With enhanced.
Both are already approved design treatment and subcutaneous formulations are in phase III clinical testing.
Notably Janssen presented data at ESMO this year from their phase one Paloma study.
For subcutaneous I'm events map in solid malignancy.
The study was designed to identify the phase two dose.
Also reported was data that showed a reduction in all grade infusion related reactions from 67% with the IV regimen to just 16% with subcutaneous Amazon snap with enhanced.
This data point reinforces the opportunity to drive clinical benefit for patients with our enhanced technology.
Let me comment now when you do we remain highly engaged and new partnership discussions for enhanced and for our auto injector technology at.
It remains our goal of sustaining you enhance scale in new high volume auto injector deal and a new small volume auto injector deal this year.
We believe that clarity on the IRI and the recent positive results of our Hai clinical study will serve to further advance and expand these discussions.
Turning now to slide 12, I'll provide a review of the high level results of the <unk> clinical study.
We were delighted that it was such a success.
The results demonstrated the feasibility of administering a subcutaneous injection of <unk> of a representative biologic, which is immune globulin, 10% with at hand, and approximately 30 seconds using our high volume auto injector.
The injection was delivered successfully was well tolerated in all 23 subjects.
They would be willing to have the injection by the ultra injector again.
No one today to our knowledge has been able to effectively inject 10 ml of a biologic subcutaneously and approximately 30 seconds.
But the combination of our two proprietary and differentiated technologies and trends in our auto injector technology. We're in a unique position to demonstrate that this could be done.
With these positive results, we expect to advance the strong interest that we have already garnered.
High volume auto injector will offer a truly differentiated solution for patient friendly high volume subcutaneous drug delivery that can be utilized across the spectrum of disease area for both small molecule drugs and for biologics.
Let me turn now to our commercial portfolio.
<unk> is our weekly virtually painless subcutaneous testosterone replacement treatment, which is delivered by off injector.
Our strategy is to convert patients who are not achieving their treatment goals with intramuscular injections up their testosterone replacement treatment.
In the second quarter, we saw strong sequential demand growth was 38% demand growth in the first half of 2023 compared to the first half of 2022.
Our goal remains to achieve approximately $100 million in <unk> revenue in 2023, representing a 20% increase from the run rate following the acquisition.
And we also remain focused on gaining access for <unk>, our oral testosterone treatment.
At this time, we have not yet reached agreement with pharmacy benefit managers on an appropriate rebate rate and until this accesses established we're continuing to project low revenues for <unk> in 2023.
I'll move now to our capital allocation priorities, which are shown on slide 13, and I'll focus on our approach to growth through M&A.
Investing in M&A is a key strategy to maximize our revenue growth and durability, which we believe will create long term value for all of our stakeholders.
We're continuing to focus on evaluating platforms and technologies that can extend our leadership in drug delivery with clear line of sight to increasing and extending the durability of our revenues.
We're focused on technologies that can be broadly licensed leverage our demonstrated expertise and partnering with biopharma companies.
Now with that I'm going to turn the call over to Nicole who will discuss the financial results for the second quarter of 2023 Nicole.
Thank you Helen.
Our strong financial performance in the second quarter sets us up well for another record year.
Key directed revenues of $221 million for.
For a total of $383 $2 million year to date.
In line with our plans and supporting our updated financial performance expectations for the full year.
Our cash cash equivalents and marketable securities were $348 3 million as.
As of June 32023, compared to $275 6 million as of March 31, 2023.
Our balance sheet remains strong with continued projected cash generation and EBITDA growth in 2023 and beyond.
Our net debt to EBITDA ratio is two nine times as of June 32023, which is expected to continue to decrease each quarter with EBITDA growth.
We completed the full $150 million in share buybacks planned for the year in the first quarter, we will continue to evaluate our future use of capital and monitor market conditions and other factors, while also preserving capital to fund revenue growth and durability through M&A.
Turning now to slide 14 for our detailed financial results for the second quarter of 2023.
Recall that we closed the <unk> acquisition last year partway through the second quarter on May 24, 2022, and therefore the year over year comparison is impacted by a full quarter versus a partial quarter of contribution from the <unk> business.
Revenue for the second quarter was $221 million compared to $152 4 million.
For the second quarter of 2022.
With 45% year over year increase was largely driven by the strength in growth and enhanced revenue streams related to royalties and an increase in milestones due to the approval and launch of <unk> as.
As well as the addition of product sales as a result of the <unk> pharma acquisition.
Royalty revenue for the quarter was $111 7 million.
An increase of 31% compared to $85 $3 million in the prior year period.
Given by continued strong uptake of Janssen subcutaneous started blocks as well as erosion fetsko.
Research and development expenses for the second quarter were $19 7 million compared to $15 5 million in the second quarter of 2022.
Primarily due to an increase in compensation expense related to the ongoing combined larger workforce to support the device platform and regulatory quality and manufacturing as well as planned investments in enhance.
SG&A expenses were $38 9 million compared to $57 5 million for the second quarter of 2022.
The decrease year over year is primarily due to onetime transaction costs that occurred in the second quarter of last year of approximately $38 million.
Offset by an increase in compensation expenses related to the ongoing combined larger workforce, including the addition of commercial resources in sales and marketing for our testosterone replacement therapy products.
EBITDA in the second quarter was $115 $1 million.
Compared to $46 6 million in the second quarter of 2022, reflecting the strong year over year revenue performance.
Adjusting for onetime transaction cost in the second quarter of 2022, adjusted EBITDA increased from $87 8 million or 31%.
GAAP diluted earnings per share was <unk> 56 in the second quarter and non-GAAP diluted earnings per share was <unk> 74.
Turning now to slide 15, where we are updating our full year 2023 guidance to reflect our strong results to date.
We are increasing the lower end of total revenues and now expect total revenues of $825 million to $845 million.
An increase from $815 million to $845 million, representing growth between 25% and 28% over 2022 total revenue.
We expect total revenue growth to be primarily driven by continued strength in our enhanced suite two products <unk> FC and Tesco.
As well as the full year of <unk> product sales and auto injector royalty contribution.
We are maintaining our royalty revenue expectation of $445 million to $455 million.
An increase of 23% to 26% year over year.
We are increasing the lower end of EBITDA guidance, and now expect EBITDA of $420 million to $440 million, an increase from $415 million to $440 million representing growth of more than 30% over 2022, EBITDA, which excludes the impact of amortization cost.
<unk> to the <unk> acquisition.
And lastly, we are increasing our non-GAAP diluted earnings per share guidance to reflect both the strong results and the impact of our share repurchases that occurred earlier in the year.
And now expect non-GAAP diluted earnings per share of $2 65 to $2 75.
With an increase from our prior guidance range of $2 50 to $2 65.
With that I'll now turn the call back over to Helen.
Thank you Nicole let me conclude by expressing my sincere appreciation to the <unk> team and our partners and collaborators for the strong progress throughout the first half of 2023. This is establishing a strong growth trajectory or 2023 and beyond.
We remain focused on advancing and expanding our diverse and robust portfolio of products that are enabled by our leading drug delivery platform and hands and our differentiated auto injectors.
In the second half we project another product approval with it to centric subcutaneous <unk> date in September .
There is also the potential for additional regulatory submission based on the two recent positive phase III data readouts for <unk> and see IDP and for OCA as a subcutaneous with enhanced.
We're expecting several additional late stage study data readout and investments related to progress in expanding our enhanced and our auto injector partner agreements.
With that we would now be delighted to take your questions. Operator would you. Please open the call for the Q&A.
Thank you and as a reminder, if you would like to ask a question. Please press Star then one on your telephone keypad.
Our first question is from Mohit Bansal with Wells Fargo. Your line is open.
Great. Thank you for taking my question and congrats on all the progress here.
Peter Your question.
So when you talk to your potential partners regarding financing opportunities.
How much.
Does it come into discussions also how do partners think think about a lack of patent protection for <unk> Standalone technology after 2027.
Thanks Mohit.
With regard to conversations with partners I'll divide it into potential partners for I will say the eyrie does not come up.
May come up more now that there's clarity following the part D guidance being issued but it really isn't our focus of conversation what they really are focused on is the clinical benefit and the differentiation that enhance can bring or that our auto injectors in Britain and so I would say conversations still very focused on that differentiation and clinical benefit.
For our current partners after the issuance of the final part D guidance, we have been reaching out to a few of those partners initiated some conversations and I will say that there are.
Are generally aligned with us in terms of what we believe this that this can mean and so that has become a bit of a conversation.
Let me turn now to the passenger.
If you recall the way our contracts are structured.
We received royalties for a period of 10 years. After the first commercial sale and again as we talk to potential partners. They are really focused on that recognizing if there is patent protection, which would be granted if a co formulation patent was granted it would be a higher royalty rate and in the event that there would not.
B.
<unk> co.
Co formulation patents and our composition of matter patents had expired it would say the lower royalty rate in that lease.
Seem to be very comfortable with that and so far as you know the majority of our partners. They're full steam ahead to identify novelty that can result in co formulation patents because they also want to protect their inventions.
We're really not has not held US back you can see a lot of our products are in wave four will not launch till after 2027. So I think that gives you a nice bit of evidence that they really are focused on this is the only way that you can deliver high volume rapidly.
And the opportunity to for co formulation patents gives them that protection on their inventions.
Super helpful. Thank you.
Yeah.
The next question is from Vikram <unk> with Morgan Stanley . Your line is open.
Hi, everyone. This is Scott on for Vikram. We have one question could you provide some color on what your pipeline or backlog of new potential partners look like on which types of products that they are looking to leverage enhanced pool.
Sure.
Yes.
Mentioned, we are working for signing new deals for and hands on its own and has with the high volume auto injector and also the small volume auto injector and I would say that for enhanced and high volume auto injector not surprisingly these really focus on two types of products either large volume.
And <unk> have demonstrated the ability to inject some pretty viscous fluid that remains an unmet need with the off the shelf small volume Los injectors, and that's an area, where we certainly have interests as well.
Alright, thank you.
The next question is from Michael.
Sorry your line is open.
Hi, guys. Thanks for taking my questions and garage all the progress two for me one prior to our <unk> T. C. I D. P top line and subdue Okra Francis trials access the stock did get a nice boost after the final CMS part D guidance documents came out on June 30th.
And from your prepared remarks, it sounds like you are more optimistic about the future could you perhaps offer any further color on whether or not you must doesn't fat considers halos products to be fixed dose combination products and.
What your potential partners are saying about this is there any reason to believe that the future part B guidance documents will not resemble party and then I have a follow up.
Alright, thanks for that Mike in them, Yeah, I I would say, we we were police when we did see the final guidance that data with consistent with the earlier guidance, noting as you say this is the <unk> D guidance and most of <unk> b, but what what the part D guidance really I think very nicely uhm reaffirm that for <unk>.
Combination products, which include two or more active ingredients as distinct drugs with purposes. <unk> found these are going to be treated differently in terms of negotiation timeline from a separate product of just one of the ingredients that is what we had interpreted in March when the draft guidance came out and despite.
Comments and questions coming in a <unk>.
Response to questions coming in C. M. S M reaffirm that for the part D. Drugs now as you know in hands is designated by the F. D. As an active ingredients and so we feel that this was a great recognition of the clinical benefit that drugs that are combinations, where there's two active and.
Greetings, and obviously and hands is bringing the clinical benefit of being able to get it in a rapid Q injection in some cases, we can also reduce infusion related reactions. So clearly fitting into this intent I'm all for C. M S with the with the I R a and <unk>.
<unk>, we have not received any specific feedback from Sam S. As to whether they have provided I comment to say doesn't hands fit in where are basing our confidence on the fact, we are an active ingredient in the part D guidance is very clear on two active ingredients being treated separately.
Our experts believe given that this was a specific question that was asked in the park D final guidance that there is a good probability that won't be a change between <unk> B N part D. But obviously, we can't say that with absolute confidence until we see the part B guidance.
[noise] got it that's very helpful. And my final question is this and I may have missed this in your opening comments, but at least.
Q1 called the federal conversion in Germany.
It seems to be uniquely low compared to other issue of geographies and my question is is there anything unique in Germany and in terms of how physicians practice rare.
Relative to the rest of the E U that would explain the comparatively low fetsko conversion there.
Yeah, I'm <unk>, we've seen and I can't speak specific to fast because I don't have information, but if I go back to the long Super set and Mike The U German health care system is a little bit like the U S, where physicians or receive an administration fee for I V administration and what we saw.
Go with her set and was that the uptake lagged the other countries, where there wasn't that sound reimbursement dynamic so perhaps a little bit more like the U S where you get a lag in terms of the uptake over time, we did see Germany grow with Herceptin and so a I don't believe I ever saw a cat.
But it it's certainly it has been a dynamic we've seen because of the reimbursement.
Mike I realized I didn't answer another of your questions, you're asking whether any of our partners had had a similar interpretation as as to depart D guidance and potential for read through to enhance and I'll say, we're just beginning those conversations but dumped date, we have found our our large pharma partners are in a similar.
Interpretations.
Very helpful. Thank you.
The next question is from David Rosen.
Partners.
Yeah, Thanks, very much and congrats on the updates I have two questions. Please so first.
Okay. What was on previous you included a quarterly fraud unexpected and partnership deals in 23 could you. Please provide an update on your expectations. Helen I heard you comment verbally in response to a question sounded like you know your your dialogue is on track and just wanted to.
Here you out a little more colors since that is in the dark and then second could you remind us about any specific products that will be an.
Impacted by enhances U L O E 24, and the U S <unk> and 27, thanks very much.
Yeah, Thanks that David and eat in the prepared remarks, we we did comment that we continue to be confident in signing a new <unk> a new deal for the eight T I, which of course would include it in the hands as well and a new small volume auto injector D. As in dam, Yeah, where main an active dialogue.
Ross a range of different companies and types of of assets that we believe would clinically benefit from the addition of in hand to improve the patient treatment experience. So.
Hopefully that Sam is clear with regard to the European L. O E and just to say, we we continue to receive royalties I just want to make sure everybody understands it on our products for a period of 10 years. After the first commercial sail and so for all the products that launch from <unk>.
We expect royalty revenues for those to extend to at least 20, Uhm 30, and often it can extend beyond that because of the impact them all of the cool formulation patent and so in terms of the durability of our revenues <unk> does not have an impact on that there are.
We've previously commented in general there could be a step then if there is no valid patents in 2024 in Europe in 2027 in the United States and we are work hard with all of our partners uhm to seek to get co formulation Pattinson. We've previously commented that for all over.
For a product salmon and it will just highlighted that for dark legs, while will continue to get some royalty revenue to at least 2030. There is a set down to half of the current royalty rate in 2024, when the European patent extent am expires and the same in the U S. In 2027 many of our other.
<unk> <unk> <unk> co formulation patterns are expected to have co formulating patent started going to continue to extend the time to step down but the most important factor of just to be very clear is the duration of our royalties is unaffected by any all of the competition battered passing expertise.
Right back to you.
The next question is from Corinne Jenkins with G. O C. Your line is open.
Good afternoon. This is Craig on for <unk> I had one in regards to your recent positive data of your high volume auto injector.
Describe how this data has helped foster partnerships and what partners for potential partners.
As most exciting or differentiating about it.
Yeah, Thanks, Craig and I would say the H B I data specifically is just hot off the press. We completed that study just a few weeks ago and so in terms of our job number one was to file intellectual property filings based on all of the innovations that we found with regard to this <unk>.
[noise] approach that we don't believe is being done so.
So we're just at the very start of actually sharing this data with partners. Neither all of that I P. Filing has been done I will say prior to that we were sharing with partners. They prototype that we had the intent of this study and I can tell you're interested was very strong in learning more about it once we have.
<unk> the clinical data so more to come over the next weeks and months and that Craig I know that we're in a position to safely start sharing the data which is just to reiterate we were delighted with to show the feasibility of that 10, a M. L injection in approximately 30 seconds well tolerated by all of this subject.
And everybody, indicating they would be willing to have the injection again, we couldn't have had a better outcome with this and I know that is exactly what the <unk>.
<unk> Department as we were talking beforehand, we're looking to see so welcome more in the next weeks or months.
Got it thank you very much.
The next question is from Jason Butler with G. M. B a securitas your line is open.
Hi, Thanks for taking my questions.
Follow up from a high volume would you like to study.
How long until you referred to a G G. As a representative biologics preclinical data support the you know there there's.
There's bridging value here I success in this study has brought her predictive value to other molecules.
<unk> thoughts on how how different viscosities would would act in the <unk> <unk> <unk> <unk>.
That your thing.
Thanks, Jason with regard to bridging value I will say, yeah. We do we expect to each partner is going to be able to do this themselves, but what we do know that with the viscosity all of the immune globulin mirrors in many ways to discuss the of many of our other biologic such as her.
<unk> and <unk> and that's why it was selected and so in terms of being able to understand and use this to model based on a lot of great PK data, we have across lots of different products with a similar viscosity I I do believe that's going to be some value, but the ultimate.
Uhm requirement from the F. D is going to be that that partners due to their own clinical studies and so it was it was right in the sweet spot of viscosity, which is why our technical team recommended we select that Jason.
Alright.
<unk> one more can you just give us your current thinking about capital return and how you evaluate whether you would increase or renewable.
Look at other mechanisms returning shareholder capital versus wanting to keep dry powder for for business development purposes.
Yep I'll ask Nicole to address that that's alright. Thanks, Jason So we have not changed capital allocation plans for the year, we continued to them and we did execute on the plan share repurchases for the year because the opportunity to fully execute for the amount we allocated this year of $150 million in the first quarter.
Order when we saw a nice buying opportunity. So no change in plans at this time, we continue to also very much focus on the investments in our platforms and also in in growing our revenue durability via M&A. So we continue to focus on on all avenues at this time.
Okay, great. Thank you.
The next question is from Mitchell to poor Itchy Wainwright per line is open.
Hi, everyone. Thanks for taking my question and congrats on the quarter.
As for seeing success with doors likes bass pro and Fetsko. Just wondering if you can kind of help us understand how future launches in the oncology space will go in terms of uptake being quicker and quicker for instance, with the potential approval of it is Elizabeth and other oncology products. Thank you.
Yeah. Thanks for the question.
You know I do think <unk> the high bar in terms of speed and pace of uptake down just in terms of having been in the launching during COVID-19 nursing shortage and all sorts of Bam challenges like that and so how do we more think about it is that.
We will look to perhaps her set then as it is a good example, where are we so over time approximately 60% sure of sales in about three years and what we do is we just take a look at the different products and we we identify a range around that as to what we think the pace of uptake in the peak of uptake is going to.
Be so certain days, we'll get a taste iliza ma'am, what we're gonna see as for there's plenty of Sir Thanks for Teasel. This map is used either on its own or with a an oral therapy.
That same thing you can imagine that down for patients to be able to avoid being an infusion sweet that's going to be wonderful and so we would expect that a strong uptake there uhm for patients who are in for I V therapy still a strong value proposition being able to reduce the overall treatment time, possibly by almost an hour, which if you've been in.
Huge and sweet and you're getting sequential chemotherapy being sure to buy an hour is very important. So we also see a nice opportunity for uptake in that same thing as well and so I I think I will wait for and see if rows makes a comment as to where they believe the uptake is is going to go there on their earnings call. Just a couple of weeks ago with the dead.
Comment that they do expect to see strong uptake at 10 above what they're saying, but fails go specifically expressing their their their pleasure with the 92 per cent conversion in the U K and saying they thought uhm levels like that in some of the European countries are certainly possible for to centric as well because of the.
Benefit, we're bringing to patients here that reduction in treatment time that reduction in Britain really very important and then the attendant savings for the health care system. So <unk> more to come as we see that launched underway, but we do expect this to be well received by patient <unk> oncologist Some health care.
System because of the clinical benefit.
Great. Thank you Allen.
The next question is from Mac Chandler with Jeffries Wilson.
Hi, Thanks for taking.
Graduations on the corner. One question was just you know so the way for products you noted that in.
In or have completed phase one.
Any color on which ones have completed phase, one and which way for products you expect to be able to progressive.
Okay.
Next thanks.
Yeah, we we were a little bit restricted in what we can communicate on that Mac because that would be partner confidential information and the partners are in the process of analysing their data, making any development decisions and so they certainly don't like has to get ahead of them. So we have to wait until they make out announcements on.
Their next steps and plans obviously, we're delighted that two of the products are in wave three clinical development at that time at <unk>, and <unk> and Nivolumab and we have a very nice array of other products that are in that including products for thyroid disease for H I V for other neurological.
Disorders, but we were going to have to just wait until our our partners are ready to talk about their clinical development programs and recall often they choose not to do that for competitive reasons and so we can't <unk> run them by giving any specifics yet, but we are as interested as you all are in making announcements when and and as soon as we can.
Thank you.
The next question is from Caroline.
Sternberg capital markets.
Alright, thanks for taking the question.
Just to follow up on cash on the balance sheet.
So I can send you you mentioned that you have a runway for about 12 months and I'm just wondering.
Which strategy R. U per 20 thing Uhm, I'm, M&A or a catchphrase and what would that look like thanks.
Yeah. Thanks, Caroline So we ended the quarter with $348.3 million with cash and cash equivalents of marketable securities on the balance sheet. So at this time, we feel very well capitalized.
You too project.
And <unk> flown I'll also note that we ended the quarter with a net debt to EBITDA ratio nine times. So also very nicely within within a from the leverage perspective from a perspective in in a capital allocation perspective in general I mentioned are capital allocation plans.
Remain unchanged will continue to look to deploy our cash mm per our three year share repurchase plan uhm per our investments in our platform and also in investing in M&A and the timing of that will really be when we find the right target to invest in that meets our gross criteria.
Alright. Thanks.
We have no further questions at this time and this will conclude today's conference call. Thank you for participating.
Disconnect.
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