Q1 2024 Halozyme Therapeutics Inc Earnings Call

Prilla: Thank you for standing by. My name is Prilla, and I will be your conference operator today. At this time, I would like to welcome everyone to the Halozyme First Quarter 2020 Financial and Operating Results conference call.

Thank you for standing by my name is reliant and I will be your conference operator today.

Speaker Change: At this time I would like to welcome everyone to the Hela Xylem first quarter 2024 financial and operating results conference call.

Prilla: All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press the star followed by the number one on your telephone keypad. If you would like to withdraw your question, please press the star followed by the number one again. Please note that this event is being recorded. Thank you. I would now like to turn the conference over to Tram Bui, Halozyme's Vice President of Investor Relations and Corporate Communications. Please go ahead.

Tram Bui: 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 the star followed by the number one I guess telephone keypad. If you would like to withdraw your question. Please press the star Oh by the number one again.

Tram Bui: No disadvantage this event is being recorded.

Tram Bui: I would now like to turn the conference over to try and buoy Heelys I was vice President of Investor Relations and corporate Communications. Please go ahead.

Tram Bui: Thank you, Operator. Good afternoon, and welcome to our first quarter 2024 Financial and Operating Results Conference call. 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. Presenting on the call will be Dr. Helen Torley, Halozyme's President and Chief Executive Officer, who will provide an update on our business, and Nicole LaBrosse, our Chief Financial Officer, who will review our financial results as well as our outlook.

Tram Bui: Thank you operator, good afternoon, and welcome to our first quarter 2024 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 industrial relations section of our website.

Speaker Change: Leading the call will be Dr. Helen Torley.

Nicole LaBrosse: President and Chief Executive Officer, who will provide an update on our business and Nicola broth, our chief Financial Officer.

Nicole LaBrosse: Our financial results as well as our outlook.

Tram Bui: On today's call, we will be making forward-looking statements as 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.

Tram Bui: On today's call, we will be making forward looking statements as outlined on slide two I would also refer you to our SEC filings for a full list of risks and uncertainties.

Speaker Change: 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.

Helen I. Torley: Thank you, Tram, and good afternoon, everyone. Beginning on slide three, I'm very pleased to report that our first quarter 2024 operational performance was in line with our expectations and reinforces our confidence in our full year financial guidance. There are three drivers of this confidence in our guidance: our royalties, the expected milestone payments, and our EBITDA. Let me provide some additional details on these three key drivers, which will help you appreciate the Halozyme business model even more. I'll begin with royalties.

Helen I. Torley: Thank you Tom and good afternoon, everyone.

Helen I. Torley: Beginning on slide three I'm very pleased to report that our first quarter 'twenty 'twenty four operational performance was in line with our expectations and reinforces our confidence in our full year financial guidance.

Helen I. Torley: There are three drivers of this confidence in our guidance, our royalties expected milestone payments and our EBITDA.

Helen I. Torley: Let me provide some additional details on these three key drivers, which will help you. Appreciate the hill is on business model even more.

Helen I. Torley: I'll begin with royalties.

Helen I. Torley: The first quarter of 2024 marks the 15th consecutive quarter of greater than 15% year-over-year royalty growth. This provides robust support for continued royalty revenue growth in 2024, driven predominantly by our Wave 2 products, Darzalex Subcutaneous and Fezgo, with growing contributions projected from more recently launched and upcoming products, Vivecart Hytrulo and Ticentric Subcutaneous. The second driver is milestones.

Helen I. Torley: The first quarter of 2024 marks the 15th consecutive quarter of greater than 15% year over year royalty growth. This provides robust support for contingent royalty revenue growth in 2024, driven predominantly by our wave two products Garza like subcutaneous Cisco with growing contributions projected for more recently launched.

Helen I. Torley: And launching products like our high to low and to centric subcutaneous.

Helen I. Torley: The second driver's milestones, we have good visibility to our partner milestone revenues for the remainder of the year for the project contributions from wave 123, and five product.

Helen I. Torley: We have good visibility to our partner milestone revenues for the remainder of the year, where we project contributions from wave 1, 2, 3, and 5 products. You may be surprised to see Wave 1 and 2 product milestones. This is a valuable feature of our agreements, where we can have milestone payments for attainment of pre-specified sales levels, potentially extending to occur many years after the original launch.

Helen I. Torley: You may be surprised to see wave one and two product milestone. This is a valuable feature over agreements, where we can have milestone payments for attainment of pre specified sales levels potentially extending to occur many years after their original launch.

Helen I. Torley: Moving now to the Wave 5 product milestone, we predict a new product will enter the clinic in 2024, resulting in a milestone payment. In the first quarter, we recognized $14 million in milestone payments related to the approval and launch of Vive Dura, which is the brand name for Vivecart Hytrulo in Japan. I'll move now to provide a little more color on the cadence, quality, and probability of the milestone revenues in the upcoming quarters.

Helen I. Torley: Maybe not to the waste byproduct milestone, we predicting new product will enter the clinic in 2024, resulting in a milestone payment.

Helen I. Torley: In the first quarter, we recognized $14 million in milestone payments related to the approval and launch of <unk>, which is the brand name for <unk> in Japan.

Helen I. Torley: In the second quarter, we will recognize a $15 million milestone related to the recently announced U.S. regulatory file acceptance for nivolumab subcutaneous, a waste-free product. In the third quarter, we project two additional milestone payments related to the Wave 3 products, including regulatory filings and a first commercial sale. Also, in the third quarter, we projected milestones for the wave five product phase one study start I just mentioned. In the fourth quarter, it is notable that we project several commercial sales attainment milestones related to wave 1, 2, and 3 products.

Helen I. Torley: I'll move now to provide a little more color on the cadence quality and probability of the milestone revenues in the upcoming quarters.

Helen I. Torley: In the second quarter, we will recognize a $15 million milestone related to the recently announced U S regulatory file acceptance for nimble about subcutaneous waste III product.

Helen I. Torley: In the third quarter, we project two additional milestone payments related to the wave three products, including a regulatory filing in the first commercial sale.

Helen I. Torley: Also in the third quarter, we projected milestone for the <unk> five product phase one studies start I just mentioned.

Helen I. Torley: In the fourth quarter. It is notable that we predict several commercial sales attainment milestones related to wave one two and three products.

Helen I. Torley: For all of the above, we have strong visibility, including the information and trends that give us confidence in these milestone achievements. In addition, we project milestone revenues from new deals and new nominations in 2024. While these may occur at any time in the next three quarters, for planning purposes, we project these in the fourth quarter.

Helen I. Torley: For all of their breadth, we have strong visibility, including to the information and trends that give us confidence in these milestone achievements.

Helen I. Torley: In addition, we predict milestone revenues from new deals and new nominations in 2024, while at least may occur at any time in the next three quarters for planning purposes, We project fees in the fourth quarter.

Helen I. Torley: Currently in very active discussions with multiple pharma and biotech companies and have progressed the terms discussions with several.

Helen I. Torley: We're currently in very active discussions with multiple pharma and biotech companies and have progressed to terms discussions with several. Our strong operating performance and the achievements described above, together with our continued focus on operational expense management, resulted in confidence in delivering our full year EBITDA, and we project that we will deliver 26 to 37% growth. The EBITDA quarterly growth cadence is projected to track well to the quarterly milestone payments I outlined earlier.

Helen I. Torley: Our strong operating performance and the achievements described above together with our continued focus on operational expense management, resulting confidence in delivering our full year EBITDA and we project that we will deliver 26% to 37% growth.

Helen I. Torley: The EBITDA quarterly growth cadence is projected to try it well to the quarterly milestone payments I outlined earlier.

Helen I. Torley: All of these factors provide us with confidence to reiterate our 2024 financial guidance, with total revenue expected to increase 10% to 19% year over year to $915 to $985 million. Royalty revenue continues to be the main driver, which is projected to increase 12 to 17 percent to $500 to 525 million dollars. We project adjusted EBITDA growth of 26-37% to $535-585 million and non-GAAP EPS growth of 28-41% to $3.55 to $3

Helen I. Torley: All of these factors provide us with the confidence to reiterate our 2024 financial guidance with total revenue expected to increase 10% to 19% year over year to $915 million to $985 million.

Helen I. Torley: Royalty revenue continues to be the main driver, which is projected to increase 12% to 17% to $500 million to $525 million.

Helen I. Torley: We project adjusted EBITDA growth of 26% to 37% to $535 million to $585 million and non-GAAP EPS growth of 28% to 41% to $3 55 to $3.90.

Helen I. Torley: With that overview, let me now move to the first quarter operational highlights, which are shown on slide four. The multiple advancements that our partners made in 2023 have paved a clear path for our strong outlook. We entered the year with seven approved Enhanced Partner Products, and there were multiple noteworthy partner product approvals in new regions and new indications already achieved in the first quarter of this year. Beginning with recent approvals, Argenix's F-CortegeMOD subcutaneous within the hands, which is the brand name in Japan of 5-Dura, was approved in Japan for generalized myosinia gravis, including options for patient self-administration. With the subsequent commercial launch of Vive Dura, these events resulted in a combined $14 million in milestone payments to Halozyme.

Helen I. Torley: With that overview, let me now move to the first quarter operational highlights which are shown on slide four.

Helen I. Torley: The multiple advancements that are partners made in 'twenty to 'twenty three update the clear path for our strong outlook. We entered the year with seven approved enhanced partner products and there were multiple noteworthy partner product approvals in your regions and new indications already achieved in the first quarter of this year.

Helen I. Torley: Beginning with recent approvals <unk> <unk> subcutaneous within hands, which is the brand name in Japan <unk> was approved in Japan for generalized myasthenia gravis, including options for patient self administration.

Helen I. Torley: With the subsequent commercial launch of <unk>. These events resulted in a combined $14 billion in milestone payments to handle them.

Helen I. Torley: It was also exciting that Takeda's Hyculia, which is a wave 1 product, received approval for an expanded indication in the United States and Europe during the first quarter. The new indication is for maintenance treatment of patients with chronic inflammatory demyelinating polyneuropathy or CIDP. In addition, Roche received European approval for Ticentric subcutaneous. As a reminder, potential U.S. approval is expected in September of this year.

Helen I. Torley: It was also exciting that Takeda is high <unk>, which is a wave one product received approval for an expanded indication in the United States and Europe. During the first quarter. Then you indication is for maintenance treatment of patients with chronic inflammatory demyelinating polyneuropathy or see IDP.

Helen I. Torley: In addition, Roche received European approval for two centuries subcutaneous as a reminder, the potential U S approval is expected in September of this year.

Helen I. Torley: Also in the first quarter, and more recently, multiple partners advanced regulatory progress towards potential approvals and additional milestones in royalty revenues. In February, Organics announced FDA acceptance of their SBLA with priority review for Vodka Hytrudo in CIDP with a PDUFA target action date in June of 2024. And Roche announced the potential approval for ocrelizumab subcutaneous in Europe in mid-2024 and FDA PDUFA target action dates in September of 2024 for both tecentric subcutaneous and ocrelizumab subcutaneous.

Helen I. Torley: Also in the first quarter and more recently multiple partners advance regulatory progress towards potential approvals and additional milestones and royalty revenues.

Helen I. Torley: In February <unk> announced FDA acceptance of their S. P. L. A with priority review for <unk> and see IDP with a <unk> target action date in June of 2024.

Helen I. Torley: Roche announced the potential approval for <unk> subcutaneous in Europe in mid 2024.

Helen I. Torley: The FDA produce a target action date in September of 2024 for both to centric subcutaneous and awkwardness map subcutaneous.

Helen I. Torley: Jensen announced U.S. and European regulatory submissions for a new indication for Darzalex subcutaneous as part of a regimen for transplant-eligible, newly-diagnosed multiple myeloma patients. And BMS has announced the FDA acceptance of their BLA for nivolumab subcutaneous with a BDUFA target action date of February 2025. We're also pleased to report two pipeline advancements. Firstly, Argenix initiated registrational studies of F-cortigemol subcutaneous within hams for a new indication, thyroid eye disease.

Helen I. Torley: Jensen announced U S and European regulatory submission for a new indication for doors like subcutaneous as part of a regimen for transplant eligible newly diagnosed multiple myeloma patients.

Helen I. Torley: And BMS is announced the FDA acceptance of their BLA for new ballroom at subcutaneous with a <unk> target action date of February 2025.

Helen I. Torley: We're also pleased to report to pipeline advancements.

Helen I. Torley: Firstly <unk> initiated Registrational studies of <unk> subcutaneous within hands for a new indication thyroid eye disease. Excitingly. These studies will utilize expert take them up with enhanced delivered by pre filled syringe.

Helen I. Torley: Excitingly, these studies will utilize F-cortigemol within hams delivered by pre-filtering. And secondly, our partner VEEV initiated another phase one study for VH4524184, which is an integrase inhibitor with enhanced. The performance of our Wave 2 products, along with the start of the launches of our Wave 3 pipeline and the strong regulatory progress I've just discussed, give us high confidence in achieving our projections of $1 billion in royalty revenue in 2027. Let me now provide an update on each of our Royalty Revenue Drivers, starting with Darzalex Faspro on slide 5.

Helen I. Torley: And secondly, our partner vs initiated another phase one study for V. Aged 45 to 4184, which is an integrated inhibitor with enhance.

Helen I. Torley: The performance of our wave two products along with the start of the launches of our wave three pipeline and strong regulatory progress Ive, just discussed give us high confidence in achieving our projections of $1 billion in royalty revenue in 2027.

Helen I. Torley: Let me now provide an update on each of our royalty revenue drivers starting with thoughtful exhaust broke on slide five.

Helen I. Torley: I'll begin each review by highlighting the potential opportunity size for subcutaneous and then cover recent progress and new opportunities. In the first quarter of 2024, J&J stars like sales were $2.7 billion, up 21% year over year on an operational basis.

Helen I. Torley: Again, each review by all reviewing the potential opportunity size for subcutaneous and then cover our recent progress and new opportunities.

Helen I. Torley: In the first quarter of 2020 for J&J stores like sales were $2 7 billion up 21% year over year on operational basis.

Helen I. Torley: This strong growth was driven by share gains in all regions, resulting in share gains of 6 points across all lines of therapy and of 10 points in the frontline setting. With subcutaneous penetration in excess of 90% in the United States, and it's estimated to exceed 80% outside the United States, subcutaneous Darzalex is driving strong demonstrated and projected total brand growth. Analysts continue to expect Darfliq's revenue to grow to exceed $17 billion in 2028.

Helen I. Torley: This strong growth was driven by share gains in all regions, resulting in share gain of six points across all lines of therapy out of 10 points in the frontline setting.

Helen I. Torley: With subcutaneous penetration in excess of 90% in the United States and is estimated to exceed 80% outside the United States.

Helen I. Torley: Sandy Starbucks is driving the strong demonstrated a projected total brand growth.

Helen I. Torley: Analysts continue to expect <unk> revenue to grow to exceed $17 billion in 2028.

Helen I. Torley: The potential approval in 2024 for the new indication of transplant eligible newly diagnosed patients based on recent US and European regulatory submissions would provide an important new frontline opportunity for dorsal-leg subcutaneous. I'll move now to FAFSA, which is shown on slide six.

Helen I. Torley: The potential approval in 2024 for the new indication of transplant eligible newly diagnosed patients based on recent U S and European regulatory submissions would provide an important new frontline opportunity for doors like subcutaneous.

Helen I. Torley: I'll move now to <unk>, which is shown on slide six.

Helen I. Torley: In the first quarter, Fesco sales increased 70% to 388 million Swiss francs, which represented the second best performer in Roche's self-described young portfolio. Roche recently highlighted that U.S. conversion is reaching 25%, and global conversion was 41% in the quarter. With the strong launch update and ongoing geographic expansion, Roche has commented that a project's overall conversion will increase to approximately 50% over time as patients continue to convert from IV progetta. There remains a substantial conversion opportunity from Progetta to Fezco, with Progetta generating almost 1 billion Swiss francs in sales in the quarter.

Helen I. Torley: First quarter <unk> sales increased 70% to 388 million Swiss francs, which represented the second best performer and Roche is self described young portfolio.

Helen I. Torley: Roche recently highlighted that U S conversion is reaching 25% and global conversion was 41% in the quarter.

Helen I. Torley: With the strong launch uptake and ongoing geographic expansion Roche has commented that it projects overall conversion will increase to approximately 50% over time as patients continue to convert from IV projector.

Helen I. Torley: There remains a substantial conversion opportunity from projected to physical with projected generating almost 1 billion Swiss francs in sales in the quarter.

Helen I. Torley: I'll turn now to our Waste-Free products and product candidates, which are shown on the right-hand side of slide 7. The opportunity for Wave 3 is meaningful, with 5 products that analysts project will generate total sales of $35 billion in 2028. This compares to $20 billion for our Wave 2 products, which are driving the robust royalty revenue growth we see today. Importantly, Way 3 is largely derrised, with positive Phase 3 data and regulatory submission plans already reported by our partners for all products, with the exception of Johnson & Johnson's Amavantamab, where Phase 3 data and regulatory submissions are expected this year. Let me begin with Fivegart, Hitrilo, the subcutaneous version.

Helen I. Torley: I'll turn now to our wave three products and product candidates, which are shown on the right hand side of slide seven.

Helen I. Torley: The opportunity for wafer is meaningful with five products at analyst project will generate total sales of $35 billion in 2028.

Helen I. Torley: This compares to $20 billion for our wave two products, which are driving the robust royalty revenue growth we see today.

Helen I. Torley: Importantly, we three is largely derisked with positive phase III data and regulatory submission plants already reported by our partners for all products with the exception of Johnson <unk> Johnson and event I'm up for phase III data and regulatory submissions are expected this year.

Helen I. Torley: Fivecart-Hitulu is currently approved for generalized myasineagravis in the US and Europe, and also in Japan, where it is sold under the brand name Five Dura. Notably, the European and Japanese approvals also allow for patient self-administration subcutaneously. In 2023, Vivecart generated $1.2 billion in sales, and Ergenics continues to broaden ease of access and coverage for generalized myasthenia gravis, securing the J-code for the subcutaneous formulation in January of this year, with Symphony data showing positive quarter-over-quarter growth for the brand.

Helen I. Torley: Let me begin with five star <unk>, the subcutaneous version of <unk>.

Helen I. Torley: <unk> is currently approved for generalized myasthenia gravis in the U S and Europe and also in Japan, where it has a brand named <unk>.

Helen I. Torley: Notably the European and Japanese approvals also allow for patient self administration subcutaneously.

Helen I. Torley: In 2023, <unk> generated $1 $2 billion in sales and organics continues to broaden ease of access and coverage for generalized myasthenia gravis, securing the J code for the subcutaneous formulation in January of this year.

Helen I. Torley: With Symphony data showing positive quarter over quarter growth for the brand, we look forward to growing adoption and use of subcutaneous <unk> at the number of physicians prescribing <unk> truly expense and use increases in the earlier lines of treatment.

Helen I. Torley: We look forward to growing adoption and use of subcutaneous Vivacar Hertoulo as the number of physicians prescribing Vivacar Hertoulo expands and use increases in the earlier lines of treatment. The potential approval of a new indication of CIDP in June in the United States represents another exciting near-term growth opportunity for Vygar Hetrilo. This indication will be a subcutaneous delivery only launch. Based on Organics' research and comments, approximately 42,000 patients are receiving treatment for CIDP today.

Helen I. Torley: The potential approval of a new indication of <unk> in June in the United States represents another exciting near term growth opportunity for <unk>.

Helen I. Torley: This is the indication that will be a subcutaneous delivery only launch.

Helen I. Torley: Based on organics as research and comments approximately 42000 patients are receiving treatment for CIB Pete to date.

Helen I. Torley: Only 20% of those patients are getting to remission on the current standard of care, and 50% of patients remain dissatisfied with the current burden of symptoms, signaling a real unmet need in this challenging condition. We appreciate the strong partnership with Urgenix and share their patient-centric vision as they also grow and expand their pipeline. The recent initiation of two registrational studies evaluating f-cartrigimod in the hands administered by pre-filled syringe for thyroid eye disease represents another future opportunity with f-cartrigimod.

Helen I. Torley: Only 20% of those patients are getting to remission on the current standard of care and 50% of patients remain dissatisfied.

Helen I. Torley: With the current burden symptoms signaling a real unmet need in this challenging condition.

Helen I. Torley: We appreciate the strong partnership with organics and share their patient centric vision as they also grow and expand their pipeline.

Helen I. Torley: The recent initiation of two Registrational studies evaluating <unk> within hands administered by pre filled syringe for thyroid eye disease represents another future opportunity with a particular month.

Helen I. Torley: Mhm.

Helen I. Torley: Moving now to Ticentric subcutaneous, which is approved for subcutaneous delivery in the UK and Europe, with both approvals covering all of the approved indications for Ticentric IV. Total revenue for TCENTRIC was almost 900 million Swiss francs in the first quarter of 2024.

Helen I. Torley: Moving now to centric subcutaneous <unk>, which is approved for subcutaneous delivery in the UK and Europe with both approvals covering all of the approved indications for to centric IV.

Helen I. Torley: Total revenue part to centric was almost 900 million Swiss francs in the first quarter of 2024.

Helen I. Torley: With potential US approval in September of 2024, Roche has commented that they believe subcutaneous ticentric will be largely protective of their IV formulation, with a very modest potential to add to brand growth. Meaning the expectation is that the majority of subcutaneous use will be from patients currently on ticentric IV switching to ticentric subcutaneous with enhanced.

Helen I. Torley: With potential U S approval in September of 2020 for Roche has commented that they believe subcutaneous to centric will be largely protective of their IV formulation with a very modest potential to add to brand growth, meaning the expectation is that the majority of subcutaneous use will be from patients currently on to centric IV switching to <unk>.

Helen I. Torley: Centric subcutaneous with enhance.

Helen I. Torley: I'll move now to <unk>.

Helen I. Torley: In the first quarter of 2024, Ocrevus IV generated approximately 1.7 billion Swiss francs in revenue for Roche, increasing 8% year over year. OrcaVis remains the market leader in the U.S. and EU5, with approximately 24% global market share. The approval of subcutaneous ocrelizumab will dramatically change the patient treatment experience. Today's treatment and observation time can be from three and a half to six and a half hours with the IV given every six months.

Helen I. Torley: In the first quarter of 2020 for Okra vis IV generated approximately $1 7 billion Swiss francs and revenue for Roche, increasing 8% year over year.

Helen I. Torley: <unk> remains the market leader in the U S and EU five with approximately 24% global market share.

Helen I. Torley: The approval of subcutaneous localism will dramatically change the patient treatment experience today.

Helen I. Torley: Todays treatment and observation time can be from three five to six and a half hour to say Ivy given every six months.

Helen I. Torley: The target for total time for subcutaneous treatment and observation is 10 minutes, also every six months. Importantly, Roses commented that they see ochralizumab as a standalone blockbuster opportunity, expanding use of ocarlysmab to treatment centers without IV infrastructure or with IV capacity limitations, supporting even stronger brand growth in the future. Roche recently announced that the European Medicines Agency's Committee for Medicinal Products for Human Use has recommended the approval of ocrelizumab subcutaneous for its multiple sclerosis indication. The European Commission is expected to give a final decision on the approval in mid-2024.

Helen I. Torley: The target for total time for subcutaneous treatment and observation is 10 minutes also every six months.

Helen I. Torley: Importantly, Roche has commented that they see oprah lithium of subcutaneous being a standalone blockbuster opportunity expanding use of bulk releasing map to treatment centers without IV infrastructure with IV capacity limitations supporting even stronger brand growth in the future.

Helen I. Torley: Roche recently announced that the European medicines Agency's committee for medicinal products for human use has recommended the approval of <unk> subcutaneous for its multiple sclerosis indications.

Helen I. Torley: The European Commission is expected to give a final decision on the approval in mid 2024.

Helen I. Torley: Roche also announced that Ocrelizumab subcutaneous has a PDUFA action date in the United States of September 2024. The key data supporting these approvals are from the Ocarina 2 study. Roche recently presented updated longer-term results from the Ocarina 2 study at the 76th American Academy of Neurology annual meeting. The results highlighted the significant potential benefits of subcutaneous ocrelizumab for patients with both relapsing and progressive forms of multiple sclerosis. The data showed that patients receiving ocrelizumab subcutaneous experienced near complete suppression of relapse activity, with 97.2% of patients experiencing no relapse during the treatment phase. In addition, it was reported that patients treated with subcutaneous okra purpose experience appropriate B cell suppression and impressive near complete suppression of new inflammatory disease activity.

Helen I. Torley: Roche also announced the okra lithium of subcutaneous <unk> action date in the United States of September of 2024.

Helen I. Torley: The key data supporting these approvals is from the Ocarina two study.

Helen I. Torley: Roche recently presented updated longer term results from the Ocarina two study at the 76 American Academy of Neurology annual meeting the.

Helen I. Torley: The results highlighted the significant potential benefits of subcutaneous localism them for patients with both relapsing and progressive forms of multiple sclerosis.

Helen I. Torley: The data showed that patients receiving <unk> <unk> subcutaneous experienced near complete suppression of relapse activity with 97, 2% of patients experiencing no relapse during the treatment phase.

Helen I. Torley: In addition, it was reported that patients treated with subcutaneous so Curtis.

Helen I. Torley: <unk> appropriate b cell suppression and impressive near complete suppression of new inflammatory disease activity.

Helen I. Torley: Notably, patients reported a very high 92% satisfaction level, and 90% of patients felt that it was very convenient to receive the ocrelizumab subcutaneous injection. These results demonstrate the potential of subcutaneous relizumab as a treatment option that can be matched to the individual needs of patients with MS and also healthcare professionals. Approval of Ocrelizumab subcutaneous will represent our eighth approved subcutaneous product with Enhance. I'll turn now to Bristol Marsquib Nebola Maps Subcutaneous with Enhance.

Helen I. Torley: Notably patients reported a very high 92% satisfaction level and 90% of patients felt that it was very convenient to receive the awkwardness <unk> subcutaneous injection.

Helen I. Torley: These results demonstrate the potential of subcutaneous rituximab as a treatment option that can be matched to the individual needs of patients with MF and also health care professionals.

Helen I. Torley: Approval of OCA lithium of subcutaneous will represent our eighth approved subcutaneous product with enhanced.

Speaker Change: I'll turn now to Bristol Myers Squibb, Newbolt, imap subcutaneous with enhance.

Helen I. Torley: Bristol-Myers Squibb recently announced the FDA acceptance of its biologic license application for nivolumab subcutaneous coformulators within the hands and assigned a PDUFA action date of February 2025. BMS reported that Obdivo, which is Nivolumab, which is delivered intravenously, generated approximately $2.1 billion in sales in the first quarter of 2024. With subcutaneous nevolomab projected to cover up to 75% of the IV indications over time, BMS has commented that nevolumab subicataneous will help them extend their immunol oncology franchise well into the next decade.

Helen I. Torley: Bristol Myers Squibb recently announced the FDA acceptance of its biologic license application for <unk> subcutaneous co formulated with enhance and assigned a <unk> action date of February 2025.

Helen I. Torley: BMS reported that a depot, which is in the bullet map, which has delivered intravenously generated approximately $2 $1 billion in sales in the first quarter of 2024.

Helen I. Torley: With subcutaneous nimble about projected to cover up to 75% of the IV indications over time BMS has commented that <unk> subcutaneous will help them extend their immuno oncology franchise well into the next decade approval of nimble about subcutaneous will represent our ninth enhance approved partner product.

Helen I. Torley: Approval of nevolumab subcutaneous will represent our ninth and hence approved partner product. I'll move now to Johnson & Johnson's AMI Ventimab Subcutaneous With Enhance. Anivantamab subcutaneous remained on track with the potential for launch in 2025. Amiventumab is already approved as an IV treatment under the brand name Ribrevent, with Johnson & Johnson projecting that Ribrevent will become a multi-billion dollar brand.

Helen I. Torley: I'll move now to Johnson, <unk>, Johnson's <unk> subcutaneous with enhanced.

Helen I. Torley: And event <unk> subcutaneous remains on track with the potential for launch in 2025.

Helen I. Torley: And <unk> is already approved as an IV treatment under the brand name right prevent with Johnson <unk> Johnson projecting that <unk> will become a multibillion dollar brand.

Helen I. Torley: We look forward to Johnson & Johnson presenting the Phase III amivantamab with enhanced subcutaneous data at an upcoming medical meeting. Approval Rule represents our 10th Enhance Partnered Product. I'll now move to slide 8 for an update on our Wave 4 pipeline, which is expected to support our future growth trajectory with potential launches in the 2025 to 2027 timeframe. We have six products currently in development, reflecting a range of therapeutic areas, including oncology, neurology, immune disease, and HIV.

Helen I. Torley: We look forward to Johnson and Johnson, presenting the phase III and events with enhanced subcutaneous data at an upcoming medical meeting.

Helen I. Torley: Approval will represent our 10th enhanced partnered product.

Helen I. Torley: I'll now move to slide eight for an update on our way for pipeline, which is expected to support our future growth trajectory with potential launches in the 2025 to 2027 time frame.

Helen I. Torley: We have six products currently in development, reflecting a range of therapeutic areas, including oncology neurology immune disease and HIV.

Helen I. Torley: Our two most advanced programs that are in Phase 3 development are Takeda's Immune Globulin 20%, which is TAC881 with Enhance, and Bristol-Myers Squibb's Nivolumab-Rilatumab fixed-dose combination subcutaneous with Enhance. The Phase 3 studies of TAC 881 and the Volumab Plus relaplamab continue to progress.

Helen I. Torley: Our two most advanced programs that are in phase III development Arctic caters immune globulin, 20%, which is tak 881, with enhance and Bristol Myers Squibb <unk>.

Helen I. Torley: Fixed dose combination subcutaneous with enhance.

Helen I. Torley: The phase III studies of <unk> 881, and if all of that plus relentless that's continued to progress.

Helen I. Torley: Also advanced into later stage development is Veeve's broadly neutralizing antibody, N6LS, which is progressing in an ongoing Phase 2 study. As I close out this section on our upcoming launches and pipelines, let me now highlight the actions and progress we are making as we seek to expand and add additional partners and development products that will further add to and extend our revenues in the post-2027 time frame. These continue with its mission to transform the treatment experience for HIV patients and recently initiated a new Phase I study for an integrase inhibitor, VH4524184, given subcutaneously with enhanced. And we're also excited that Acumen announced they plan to initiate a phase one study of a subcutaneous version of ACU193 for the treatment of Alzheimer's disease in mid-2024.

Helen I. Torley: Also advance into later stage development is these broadly neutralizing antibody and success, which is progressing in an ongoing phase II study.

Helen I. Torley: At the close out the section on our upcoming launches and pipeline. Let me now highlight the actions and progress we're making as we seek to expand and add additional partners in development products that will further add to and extend our revenues in the post 2027 time frame.

Helen I. Torley: These continues with its mission to transform the treatment experience for HIV patients and recently initiated a new phase one study for an integrated inhibitor VH for $5 24184, given subcutaneously with enhanced.

Helen I. Torley: And we're also excited to acumen announced they plan to initiate a phase one study of a subcutaneous version of <unk> hundred 93 for the treatment of Alzheimer's disease in mid 2024.

Helen I. Torley: We've also continued to be in very active discussions with multiple pharma and biotech companies regarding Enhance and also our high-volume auto-injector. We've progressed several companies to the stage of discussing terms for Enhance. This is the final stage prior to negotiation of the collaboration and licensing agreement. With regard to our high-volume autoinjector, in the first quarter, a current partner completed a human factor study of the high-volume autoinjector to evaluate device usability. Based on the results that were shared confidentially with Halozyme, the test was a success.

Helen I. Torley: We've also continued to be very active discussions with multiple pharma and biotech companies regarding enhance and also our high volume auto injector, where.

Helen I. Torley: Progress several companies to the stage of discussing terms for enhanced this was the final stage prior to negotiation of the collaboration and licensing agreement.

Helen I. Torley: With regard to a high volume auto injector in the first quarter a current partner completed the human factor study all of the high volume auto injector to evaluate device usability based.

Helen I. Torley: Based on the results that were shared confidentially with hail events. The test was a success. We continue in discussions with that partner and several additional companies who are expressing interest in our high volume auto injector.

Helen I. Torley: We continue in discussions with SAP partners and several additional companies who are expressing interest in our high volume autoinjector. With that overview, I'm pleased, and I turn the call over to Nicole who will discuss our financial results in more detail. Thank you, Helen.

Helen I. Torley: With that overview I'm pleased to now turn the call over to Nicole <unk>, who will discuss our financial results in more detail.

Nicole LaBrosse: The first quarter of 2024 is on track with our plans and supports our strong financial performance expectations for the full year from the continued momentum of our business. Let me now briefly touch on our capital allocation priorities on slide nine. We remain consistently focused on a balanced three-pillar strategy, which is to invest in our current business, deploy capital through share purchases, and seek new growth opportunities through M&A. As we continue to execute on the $250 million ASR that was announced in the fourth quarter of 2023.

Nicole: Thank you Helen the first quarter of 2024 is on track with our plans and supports our strong financial performance expectations for the full year from the continued momentum of our business.

Nicole LaBrosse: Let me now briefly touch on our capital allocation priorities on slide nine.

Nicole LaBrosse: We remain consistently focused on a balanced three pillar strategy, which is to invest in our current business deploy capital through share repurchases and seek new growth opportunities through M&A.

Nicole LaBrosse: As we continue to execute on the $250 million ASR that was announced in the fourth quarter of 2023.

Nicole LaBrosse: The new $750 million share repurchase program that was recently approved by the board in February is a reflection of the confidence in our long-term projections regarding the durability of our business. We maintain a strong balance sheet with cash, cash equivalents, and marketable securities of $463.5 million as of March 31st, 2024, compared to $336 million on December 31st, 2026. Our net leverage ratio was two times at the end of the quarter, and we expect to reduce our net leverage ratio as we continue to grow EBITDA throughout the year.

Nicole LaBrosse: The new $750 million share repurchase program that was recently approved by the board in February is a reflection of the confidence in our long term projections and durability of our business.

Nicole LaBrosse: We maintain a strong balance sheet with cash cash equivalents and marketable securities of $463 5 million as of March 31, 2024, compared to $336 million on December 31 2023.

Nicole LaBrosse: Our net leverage ratio was two times at the ended the quarter and we expect to reduce our net leverage ratio as we continue to grow EBITDA throughout the year.

Nicole LaBrosse: Turning now to slide 10, our detailed financial results for the first quarter. Revenue grew 21% to $195.9 million compared to $162.1 million in the prior year period. Royalty revenue for the quarter was $120.6 million, an increase of 21% compared to $99.6 million in the prior year period, primarily attributable to the continued momentum of our Wave 2 products, Darzalex Fast Pro, and Fuzzgo. Research and Development expenses were $19.1 million compared to $18 million in the first quarter of 2023.

Nicole LaBrosse: Turning now to slide 10 for our detailed financial results for the first quarter.

Nicole LaBrosse: Revenue grew 21% to $195 9 million compared to $162 $1 million in the prior year period.

Nicole LaBrosse: Royalty revenue for the quarter was $126 million, an increase of 21% compared to $99 $6 million in the prior year period, primarily attributable to continued momentum of our wave two products <unk> and <unk>.

Nicole LaBrosse: Research and development expenses were $19 1 million.

Nicole LaBrosse: Compared to $18 million in the first quarter of 2023.

Nicole LaBrosse: The increase was primarily due to planned investments in Selling General and Administrative Expenses for $35.1 million in the quarter, down from $37.4 million in the prior year period, primarily due to reductions in commercial marketing, offset slightly by increased compensation. Growing revenues and relatively flat operating expenses resulted in EBDA growth of 56% to $115.7 million from $74.3 million in the prior year period. Gap Diluted Earnings Per Share was $0.60, and Non-Gap Diluted Earnings Per Share was $0.79.

Nicole LaBrosse: The increase was primarily due to planned investments in enhance.

Nicole LaBrosse: Selling general and administrative expenses were $35 $1 million in the quarter down from $37 $4 million in the prior year period, primarily due to reductions in commercial marketing expense.

Nicole LaBrosse: Such slightly by increased compensation expense.

Nicole LaBrosse: Growing revenues and relatively flat operating expenses resulted in EBITDA growth of 56% to $115 7 million from $74 3 million in the prior year period.

Nicole LaBrosse: GAAP diluted earnings per share was <unk> 60, and.

Nicole LaBrosse: And non-GAAP diluted earnings per share was <unk> 79.

Nicole LaBrosse: This is compared with GAAP diluted earnings per share of $0.29 and non-GAAP diluted earnings per share of $0.47 in the first quarter of 2021. Turning now to slide 11 in our 2024 guidance. We continue to see robust growth in our business, and as Helen mentioned, we are reiterating our full year 2024 guidance of revenues of $915 to $985 million, representing growth of 10 to 19%, adjusted EBITDA of $535 to $585 million, representing growth of 26 to 37 percent, and non-GAAP diluted EPS of $3.55 to $3.90, which is growth of 28% to 41% year-over-year. As you refine your models, I'd also like to reiterate the following.

Nicole LaBrosse: This is compared with GAAP diluted earnings per share of <unk> 29 cents.

Nicole LaBrosse: non-GAAP diluted earnings per share of <unk> 47 in the first quarter of 2023.

Nicole LaBrosse: Turning now to slide 11, and our 2020 for guidance.

Nicole LaBrosse: We continue to see robust growth in our business and as Helen mentioned, we are reiterating our full year 2024 guidance of revenues of $915 million to $985 million representing growth of 10% to 19% adjusted.

Nicole LaBrosse: Adjusted EBITDA of $535 to $585 million, representing growth of 26% to 37%.

Nicole LaBrosse: And non-GAAP diluted EPS of $3 55.

Nicole LaBrosse: The $3 90, which is growth of 28% to 41% year over year.

Nicole LaBrosse: As you refine your models I'd also like to reiterate the following.

Nicole LaBrosse: We continue to expect milestones in API sales to be substantially weighted in the second half of the year, with the second quarter flat to the first quarter. For royalties, we expect continued expansion of Wave 2 products and the launch of Wave 3 products, partially offset by a royalty rate step-down for Darulex SC outside the U.S. Q2 royalties will be similar to Q1, with sequential growth in Q3 and Q4, to achieve the $500-$525 million goal. Non-GAAP Diluted EPS growth of 28-41% reflects adjusted EBITDA growth of 26-37% as well as the impact of our 2023 share repurchase. I will now turn the call back to Helen. Thank you, Nicole.

Nicole LaBrosse: We continue to expect milestones in API sales to be substantially weighted in the second half of the year with the second quarter flat to the first quarter.

Nicole LaBrosse: For royalties, we expect continued expansion of wave two products and launched week three products, partially offset by a royalty rate step down for <unk> SC outside the U S. Q.

Nicole LaBrosse: Q2 royalties will be similar to Q1 with sequential growth in Q3, and Q4 to achieve the $500 million to $525 million guidance.

Nicole LaBrosse: non-GAAP diluted EPS growth of 28% to 41% reflects adjusted EBITDA growth of 26% to 37% as well as the impact of our 2023 share repurchases.

Nicole LaBrosse: I will now turn the call back to Helen.

Helen I. Torley: 2024 is off to a strong start, as you've just heard, with excellent momentum in the current business and major progress made in advancing new approvals and growth opportunities. These opportunities include the FDA acceptance of Bristol's submission for their BLA for nivolumab subcutaneous with a BDUFA action date of February 2025. The potential new indication approval and launch for Ergenix's Vivecart Hertoulo in CIDP in the United States in June, and the potential approval and launch of Ocrevus subcutaneous in Europe mid-year.

Helen: Thank you Nicole 'twenty 'twenty four is off to a strong start as you've just heard with excellent momentum in the current business and major progress made in advancing new approvals and growth opportunities.

Helen I. Torley: These opportunities include the FDA acceptance of Bristol's submission for their BLA for Nikola map subcutaneous with a <unk> action date of February 2025, the potential new indication approval and launch for <unk> in <unk> in the United States and Jim potential approval and launch of <unk>.

Helen I. Torley: Possible U.S. approvals and launches for Roche's Ticentric subcutaneous and Ocrevus subcutaneous in September, and a phase 3 data readout for J&J's Amipantumab subcutaneous. I want to close by thanking our terrific Halozyme team, our partners, and collaborators for all of the hard work that resulted in such strong first quarter progress. Operator, we are now ready to open the call for questions. Thank you.

Helen I. Torley: Manias in Europe mid year.

Helen I. Torley: Turning to the U S approvals and launches for Roche has to centric subcutaneous and okra vis subcutaneous in September and a phase III data readout for J&J is tantamount subcutaneous.

Helen I. Torley: Want to close by thanking our terrific <unk> team our partners and collaborators for all of the hard work that resulted in such strong first quarter progress.

Helen I. Torley: Operator, we're now ready to open the call for questions.

Operator: Thank you. We will now begin the question and answer session. If you have dialed in and would like to ask a question, please press star 1 on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, please press star 1 again. If you are called upon to ask your question and are listening via loudspeaker on your device, please pick up your handset and ensure that your phone is not on mute when asking your question. Again, please press star 1 to join the queue. Your first question comes from the lineup. Vikram Purohit from Morgan Stanley, your line is open.

Speaker Change: Thank you we will now begin the question and answer session. If you have dialed in and would like to ask a question. Please press star one on your telephone keypad to raise your hand and joined the queue. If you would like to withdraw your question simply press Star. One again, if you are called upon to ask your question and are listening by allowed sneaker and yard.

Vikram Purohit: Please speak up your handset that ensure that your phone is not on mute when asking your question against these Red Star wanted to join the queue. Your first question comes from the line up Vic Raspberry hit from Morgan Stanley. Your line is open.

Operator: Yeah.

Operator: Yes.

Vikram Purohit: Hi, thank you for taking our questions. We had one on the pace of business development. Helen, you mentioned that there were some discussions ongoing with potential new partners for Enhance. I just wanted to see if you could provide some more color on kind of what the cadence of those discussions could be throughout the rest of the year and kind of the different stages that they're at, and how you might expect those to turn into new agreements throughout the course of the year and 2025.

Vikram Purohit: Hi, Thank you for taking our questions we had one on.

Vikram Purohit: The pace of business development, and how long you mentioned that there were some discussions ongoing with.

Vikram Purohit: Potential new partners for and Hans just wanted to see if you could provide some more color on.

Vikram Purohit: Kind of what the cadence of those discussions could be throughout the rest of the year and kind of the different stages of threat.

Vikram Purohit: How you might expect those to turn into new agreements throughout the course of the year in 2025 and then on the.

Vikram Purohit: And then on the high-volume autoinjector, just also wanted to see if you could provide some more detail on how those discussions are progressing and what it would take, given where some of those discussions are now, to move towards closed agreements. Thank you. Yeah, thank you, Vikram.

Vikram Purohit: High volume auto injector, just also wanted to see if you could provide some more detail on.

Vikram Purohit: How those discussions are progressing and what it would take given where some of those discussions are now to move towards.

Speaker Change: Closed agreements. Thank you.

Helen I. Torley: Yeah, thank you, Vikram. I'm delighted to give an update on both of those areas, which obviously are a strong focus for us. As we mentioned in the prepared remarks, in the quarter, we were delighted to see several companies progressing from technical discussions to terms discussions. And importantly, this is a stage that happens prior to negotiating and signing the CLA.

Speaker Change: Yeah. Thank you Vikram.

Speaker Change: Yeah delighted to give an update on both of those area that obviously is a strong focus for us.

Helen I. Torley: As we mentioned in the prepared remarks in the quarter, we were delighted to see several companies progressing from technical discussions two turns discussions and importantly, this is a state that happens par to negotiating and signing the C. L. A so that is a very strong sign of progress and this is really a result of conversations in the <unk>.

Helen I. Torley: So that is a very strong sign of progress, and this is really the result of conversations in the first quarter with more than 10 pharma and biotech companies where at least one conversation happened, and on several occasions, we had multiple conversations. In terms of the feedback, let me give you the very consistent feedback, which is, I think, a very strong sign of the value proposition that Enhance provides and how companies are thinking more and more about subcutaneous.

Helen I. Torley: First quarter with more than 10 pharma and biotech companies, where at least one conversation is happening in several occasions, we've had multiple conversations.

Helen I. Torley: In terms of the feedback let me give you a they're very.

Helen I. Torley: Insistent feedback.

Helen I. Torley: Which is I think a very strong sign for the value proposition that enhance provide and how companies are thinking more and more about subcutaneous.

Helen I. Torley: The first bit is companies definitely are thinking more and more about subcutaneous delivery right from the start, particularly in diseases like autoimmune disease, CNS disease, and oncology. Moving to Enhance, it's very clear they see Enhance as the gold standard for rapid subcutaneous delivery for patients, particularly in the autoimmune, CNS, and oncology areas, but in all areas as well. And why they think that is because they see Enhance as a highly de-risked product with a strong safety track record and a great history of global regulatory approvals and commercial success.

Helen I. Torley: The first one is our company is definitely are thinking more and more of a subcutaneous delivery right from the start particularly in diseases like autoimmune disease, CNS disease and oncology.

Helen I. Torley: Moving to N hands, it's very clear they see enhances the gold standard for rapid subcutaneous delivery for patients, particularly in the autoimmune CNS and oncology areas, but in all areas as well and why do we think that is because of what they see in hand, as a highly de risked product with a strong.

Helen I. Torley: Safety track record and a great history of global regulatory approvals and commercial success and we've always talked about that that the companies are very focused on the safety profile. They don't want something experimental that could delay their progress with development or do something to their commercial product. So that's a very important fact, and it's great to see.

Helen I. Torley: And we've always talked about that, that companies are very focused on the safety profile. They don't want anything experimental that could delay their progress with development or do something to their commercial product. So that's a very important fact, and it's great to see that our messaging on that and our data on that is well received. While IV to sub-Q conversion is the main focus of discussions, we are seeing more and more companies wanting to get to extended dosing for sub-Q delivery, two weeks to a month, one month to three months, that type of thing.

Helen I. Torley: See that our messaging on that on our data and that is well received.

Helen I. Torley: Well IV to subcutaneous version is the main focus of discussions we are seeing more and more companies wanting to get too extended dosing first sub Q delivery two weeks to a month one month to three months that type of thing and again, particularly in autoimmune and chronic diseases and we are seeing focus expand from the traditional monoclonal.

Helen I. Torley: And again, particularly in autoimmune and chronic diseases. And we are seeing focus expand from the traditional monoclonal antibody space to companies enquiring about the use of Enhance with bi-specifics, nucleic acid therapies, and also antibody drug conjugates. And so, great, very consistent feedback in all of those areas. But in terms of the evaluation and decision-making process, as we've described before, each company is unique.

Helen I. Torley: Antibody space to companies enquiring about use of an hands with bi specifics nucleic acid therapies, and also antibody drug conjugates and so.

Helen I. Torley: Great.

Helen I. Torley: The consistent feedback and all of those areas in terms of the evaluation and decision making process. As we've described before each company is unique they have their own a process for technology approval and then for budget approval each of which moves at a different pace and so it's an N of one with each company, which makes it always hard to predict.

Helen I. Torley: They have their own processes for technology approval and then for budget approval, each of which moves at a different pace. And so, it's an N of 1 with each company, which makes it always hard to predict the exact timeline for signing each deal. But what we can say in the quarter was that we had multiple technical discussions with the decision-makers and separately, several of those then advanced to terms discussions, the last decision point prior to negotiation of the CLA.

Helen I. Torley: The exact timeline for finding each deal, but what we can see in the quarter was we had multiple technical discussions advancing to the decision makers and separately.

Helen I. Torley: A bill has been advancing to terms discussion the last decision point prior to negotiation off the C. L. A so excellent progress vikram, where based on the breadth and depth of discussion and the progress I am confident in signing and hence deal based on all of this strong progress.

Helen I. Torley: So, excellent progress, Vikram, where based on the breadth and depth of discussion and the progress, I'm confident in signing Enhance deals based on all of this strong progress. Now, I'll move to the high-volume autoinjector, where we are delighted with the interest we're seeing since we communicated our Phase 1 clinical study data, and we're in discussions with current partners but also potential new partners as it relates to H We have talked in the past that the HVI really is truly groundbreaking. We hear that often in conversations.

Helen I. Torley: I'll move to the high volume auto injector, where we are delighted with the interest we're seeing since we communicated our phase one clinical study data and we're in discussions with that current partners, but also potential new partners as it relates to H V I.

Helen I. Torley: We talked in the past.

Helen I. Torley: It really is truly groundbreaking we hear that often in conversations it's not something that's been done before and many believed it could not actually be done.

Helen I. Torley: It's not something that's been done before, and many believed it could not actually be done. Within this space, there's been a bit of a history of some of the prior types of on-body injectors and other technologies not meeting biotech and pharma expectations. And so, what we experienced were two things.

Helen I. Torley: Within this space, there's been a bit of a history of some of the prior types of on body injector as in other technologies.

Helen I. Torley: Technologies, not meeting biotech and pharma expectations and so what we experience are two things one as we've talked about companies want to try it they want to test it and that was obviously, an example of our one of our current partners who completed the human factor study to evaluate device usability in the first quarter we were.

Helen I. Torley: One, as we've talked about, companies want to try it. They want to test it, and that was obviously an example of one of our current partners, who completed a human factor study to evaluate device usability in the first quarter. We were delighted that that was a success, and we continue to discuss it with that partner and also with other potential partners. And the second area is that, as companies start thinking about getting into a development agreement and commercialization, they want to understand and have confidence in the device development plan and specifically key aspects like availability of the primary container they want to use, the manufacturing plan, including the sites, the capacity, the equipment, and the slots to meet their demand projections.

Helen I. Torley: Delighted that that was a success. So we continue in discussions with that partner and also with other potential partners.

Helen I. Torley: And the second area is as companies start thinking about getting into a development agreement and commercialization, we wanted to understand and have confidence in the device development plan and specifically key aspects like availability of the primary container they want to use the manufacturing plan, including the sites the capacity equipment.

Helen I. Torley: And so, I think all of these are very good signs of progress in terms of the depth of questions people are getting into, really wanting to understand when this can be commercialized for them and how it will fit. And so, the great news is Halo Xanthema's deep experience in developing and commercializing devices, having done it many times with small volume auto-injectors. And so, all of this work in the manufacturing plan is also well underway at this time. We continue to discuss the details, and we expect those to also advance to development agreements. Again, it is hard to pin the exact time, but the progress has been very strong.

Helen I. Torley: Lots to meet their demand projections and so I think all of these are very good signs of progress in terms of the depth questions people are getting into really wanting to understand when this can be commercialized for them and how it will fit and so the great news is the he lives I'm team has deep experience in developing and commercializing them.

Helen I. Torley: Devices, having done it many times with the small volume altered injectors and so all of this work on the manufacturing plan is also well underway at this time.

Helen I. Torley: We continue in discussions and we expect those to also advance to development agreements again hard to pin the exact time, but the progress has been very strong.

Speaker Change: I appreciate it thank you.

Jessica Macomber Fye: And your next question comes from the line of Jessica Fye with J.P. Morgan. Please go ahead.

Helen I. Torley: And your next question comes from the line of Jessica Fye with JP Morgan. Please go ahead.

Helen I. Torley: Great, thanks for taking my question, sort of sticking with a similar theme here on potential new deals. First, when you say that you're in terms of discussions with several companies, should we think of those potential deals as being both pure enhanced deals and auto injector deals as well? Second, should we think of the terms of these new potential deals at similar economics to Halo as the existing portfolio of deals? And lastly, I think in the past you talked about a partner who is interested in a customized high-volume auto-injector for their patient population. Is that one among the several companies with whom you're having these terms discussions? Yeah, thanks, Jess.

Jessica Macomber Fye: Great. Thanks for taking my question sort of sticking with the similar theme here.

Helen I. Torley: Yes.

Helen I. Torley: Kind of potential new deals first.

Helen I. Torley: You say that you are in terms of discussions with several companies should we think of those potential deals as being both pure enhanced deals and auto injector deals as well.

Helen I. Torley: Second should we think of the terms of these new potential deals at similar economics to Halo.

Helen I. Torley: The existing.

Helen I. Torley: Portfolio of deals and lastly, I think in the past.

Helen I. Torley: <unk> talked about a partner.

Helen I. Torley: Who is interested in a customized high volume auto injector for their patient population is.

Helen I. Torley: Is that one among the several companies with whom you're in these terms discussions.

Helen I. Torley: Yeah, thanks, Jess. With regard to the types of discussions, I can say we're having discussions on Enhance alone, and I would say that is the most frequent discussion we have. But we are also having discussions on Enhance with a high volume autoinjector, as well as small volume autoinjectors, as well. So across the portfolio, but definitely Enhance is the highest volume of the conversations, and particularly the ones that we're seeing advancing at this point in time.

Speaker Change: Yeah. Thanks, Jeff.

Helen I. Torley: With regard to the types of discussions I can say, we're having discussions on and hands alone and I would say that is the most frequent discussion. We're having we are also having discussions on our hands with a high volume auto injector as well as small volume auto injector as well so across the portfolio, but definitely then Hans is that the highest vote.

Helen I. Torley: Liam or instead of conversations and particularly the ones that we're seeing advancing at this point in time.

Helen I. Torley: With regard to terms, in the past, we have mostly done terms for products, and companies are looking for exclusive agreements and exclusive rights. I will say that, as ever, we are also talking to companies about non-exclusive rights. And so there is a difference in our terms between exclusive rights and non-exclusive rights. So I would say you could see some differences in that. But in some of the areas we're talking about, they certainly are areas of strong interest for multiple companies, and so it would be our goal if we did non-exclusive deals to seek to get multiple agreements. And obviously, we'll find ourselves in potentially an even stronger position if we were to be successful with that.

Helen I. Torley: With regard to terms you know in the past we have mostly done terms for our product set and companies are looking for exclusive agreements Ah and exclusive rights I will say that as ever we are talking to companies also non exclusive rights and so there is a difference in our terms between excludes.

Helen I. Torley: So frightened nonexclusive freight so we'd say you could see some differences in that but.

Helen I. Torley: But in some of the areas. We're talking about these certainly are areas of strong interest for multiple companies and so it would be our goal. If we did nonexclusive deals to seek to get multiple agreements and obviously.

Helen I. Torley: We'll find ourselves and potentially even a stronger position. If we were to be successful with that and then they beat the customize H b.

Helen I. Torley: And then the customized HVI; all of the discussions on HVI, frankly, are an element of some customization. Depending on the volume the partner wants to inject, they have to identify what the primary container is going to be. And they may have a preference and a thought for that. They may also, depending on the patient population, have a preference for needle depth. And the viscosity of the drug may dictate a certain difference in needle girth.

Helen I. Torley: Look the discussions on HB, I, frankly, and are an element of some customization depending on the volume they the partner wants to inject they have to identify what the primary container is going to be and they may have a preference in our salt for that they may also depending on the patient population have a preference for needle death.

Helen I. Torley: And and the viscosity of the drug may dictate a certain difference in the volt the needle I'm Juris.

Helen I. Torley: So there is always an element of customization in the discussions of the HVA I Jess nothing major but all kind of appropriate for really having an offering that is the right thing for that partners are patient population and drug.

Helen I. Torley: And so there is always an element of customization in the discussions of the HVI, Jess. Nothing major, but all kind of appropriate for really having an offering that is the right thing for that partner's patient population and drug.

Speaker Change: Thank you.

Michael Gennaro DiFiore: And your next question comes from the line of Michael DiFiore from Evercore ISI. Your line is open.

Helen I. Torley: And your next question comes from the line of Michael Difiore from Evercore Evercore ISI. Your line is open.

Helen I. Torley: Hi guys. Thank you for taking the time to answer my question. Congratulations on all the progress. Two for me, thoughts on, obviously, you know, PheSGO is becoming a huge product for you guys. Thoughts on how a Progetta biosimilar may affect the uptake of PheSGO? And I ask because there's one that seems to be completing phase three trials late this year. And a separate question is, I think you mentioned for subcuneifa, you said that if it's approved, it would cover 75% of the IV indications. And my question is, why not 100%? And could we expect the same 75% of the indications for subcuatezo? Thank you.

Michael Gennaro DiFiore: Hi, guys. Thanks for taking my question and congrats on all the progress two for me.

Helen I. Torley: On obviously.

Helen I. Torley: <unk> is becoming a huge product for you guys thoughts.

Helen I. Torley: Well, it's on how a biosimilar.

Helen I. Torley: Biosimilar.

Helen I. Torley: Take affect.

Helen I. Torley: In fact, the uptake it sounds good when I asked because theres, one that seems to be completing phase III trials.

Helen I. Torley: This year.

Helen I. Torley: And separate question is.

Helen I. Torley: I think he mentioned for sub Q, you said that if it's approved.

Helen I. Torley: It would cover 75% of the IV indications and my question is why not 100%.

Helen I. Torley: Should we expect the same 75% of the indications for subcutaneous <unk>. Thank you.

Helen I. Torley: All right, thanks so much, Mike. With regard to Fesgo, obviously you're right, it's showing very strong progress with 70% growth over year in the first quarter, and that has resulted in 41% global conversion, with the US approaching 25%. And I do think what's going to be important for Roche is that they continue to support the conversion. They've talked about it reaching and exceeding 50%. And I certainly think the progress we're seeing could even be better.

Speaker Change: Alright, thanks, so much Mike with regard to basketball, obviously, you're right. It is showing very strong progress with 70% growth year over year in the first quarter and that has resulted in a 41% global conversion with the U S approaching 25% and I do think.

Helen I. Torley: What's going to be important for roche's that they continue to support the conversion they've talked about it reaching and exceeding 50% and yeah. I certainly think the progress we're seeing it might even do better that's going to be important for the conversation we have a boat dumped biosimilars.

Helen I. Torley: That's going to be important for the conversation we have about dumb biosimilars. Because what we have seen, and I like to use Herceptin, is, I think, a very relevant example for that, that Herceptin got to 60% of sales, whereas sub-Q after about three years. We meet with Roche every twice a year and hear that the share of the Herceptin sub-Q has remained sticky.

Helen I. Torley: <unk>, what we have seen and I like to use Herceptin is I think a very relevant example for that that herceptin got to 60% share of sales Oh, we're sub Q. After about three years, we meet with that Roche every twice a year and here that the share of the Herceptin sub Q.

Helen I. Torley: And by that they mean clinics that moved to giving their patients and themselves, as staff experienced the convenience of sub-Q, did not move to IV biosimilars. And it's because the value proposition is so strong in terms of convenience for patients, and a much shorter treatment time. Obviously, for FESGO, the difference is between five to eight minutes versus what can often be two to two and a half hours for the sequential administration. And for a clinic, that means a lot less need for nursing time, oversight, etc.

Helen I. Torley: Has it remained sticky and by that mean clinics it moved to giving their patients in a themself as staff experience. The convenience of sub acute did not move too IV biosimilars and it's because the value proposition is so strong in terms of.

Helen I. Torley: Convenience for patients much shorter treatment time, obviously for physical with the differences between five to eight minutes versus what can often be two to two and a half hours for the sequential administration and for a clinic that means a lot less need for nursing time oversight et cetera, and not to mention the pharmacy haven't been.

Helen I. Torley: Not to mention the pharmacy having to be involved in making up the IVs. So, you know, I think what's going to be important is that we continue to see this very strong progress to subcutaneous. And then I think the IV Projetta will not, if we can look at that example with Herceptin.

Helen I. Torley: Bold in making up the ivs so.

Helen I. Torley: I think what's going to be important as we continue to see this very strong progress to.

Helen I. Torley: Subcutaneous and then I think that the I V project.

Helen I. Torley: We'll note to a if we can.

Helen I. Torley: Look at that example, with herceptin be an issue.

Helen I. Torley: Okay.

Speaker Change: Got it very helpful.

Speaker Change: Yes, My other question regarding the Geneva one.

Helen I. Torley: Oh yeah, sorry. Yes, this is a comment that Bristol has made with regard to 75% of the IV indications. And I'm not recalling off the top of my head, Mike, exactly what it is and the reason for it. But we do know that for concentric outside the US, UK, and Europe, it got 100% of the indications. And that certainly would be the goal in the United States. So there are, I think, a couple of patient indications which I believe, actually, as I'm recalling this, I think it's when it's combined with the indications for CTLA-4-IG. So when it's a combined indication for Urovoi, those are the ones that are being excluded when they give the 75% because that combination was not studied.

Speaker Change: Oh, yes, sorry.

Speaker Change: Yes. This is a comment that Bristol has made with regard to the 75% of the IV indications on them I'm not recalling off the top of my head Mike exactly what it is and the reason for it but we do know that afford to centric outside the USA.

Helen I. Torley: U K and Europe equaled, 100% of the indications and that certainly would be the goal in United States. So there is I think a couple of the patient indications, which I believe actually as I'm recalling this I think it's where in this combined with the indications for <unk> T tally for IAG. So when it's like your boy am combined indications those are the ones that are being.

Helen I. Torley: Excluded.

Helen I. Torley: They give the 75% because that combination was not studied.

Speaker Change: Got it very helpful. Thanks again.

Helen I. Torley: Yeah.

Helen I. Torley: Thank you. And your next question comes from the line of Mohit Bansal with Wells Fargo. Please go ahead.

Helen I. Torley: Thank you and your next question comes from the line up Mohit Bansal with Wells Fargo. Please go ahead.

Mohit Bansal: Great. Thank you very much for taking my question and congratulations on the progress. I have two questions. So, in terms of the partnership terms discussions, in general, do you expect the newer deals to have some kind of different kind of terms, or do you think they could be generally the same and there would be no meaningful change there?

Mohit Bansal: Great. Thank you very much for taking my question and congrats on the progress.

Speaker Change: I have two questions so I'll ask plus.

Mohit Bansal: Oh.

Helen I. Torley: Yeah, I think Mohit, the way to think about it is, there'll be a difference if the partner is asking for exclusive rights to a target versus non-exclusive, obviously with the economics for non-exclusive being lower, as we have the opportunity to license that to multiple companies. Also, if it is a partner who has a product that is in earlier stages of development, there may be an opportunity for you to see a different distribution between less payments while the product is in development, while it's getting de-risked, and more of a weighting of the payments and a different balance of the royalties based on once the product has achieved regulatory approval and is de-risked.

Mohit Bansal: So in terms of the partnership discussions.

Helen I. Torley: In general.

Helen I. Torley: You should expect the newer deals to have some kind of different.

Helen I. Torley: Uh huh.

Helen I. Torley: Different kind of Toms.

Helen I. Torley: Our R R.

Helen I. Torley: It could be generally the same.

Helen I. Torley: And there'll be a quick change there.

Speaker Change: Yeah, I think mohit the the way to think about it is there'll be a difference if the the eh.

Helen I. Torley: Our partner is asking for exclusive rights to target versus non exclusive obviously with the economics for nonexclusive being lower as we have the opportunity to license that to multiple companies.

Helen I. Torley: Also if it is a partner who has a product that is in earlier stages of development.

Helen I. Torley: Are there there may be an opportunity for you to see a different distribution.

Helen I. Torley: Between less payments, while the product is in development, while it's getting derisked and more more of a weighting of the payments and a different balance of the royalties based on once a product has achieved regulatory approval and is derisked. So it could be a few of those nuances across these are.

Helen I. Torley: So there could be a few of those nuances across our agreements, but obviously, each of these will offer a new royalty revenue stream for Halozyme at the mid-single digit for an exclusive deal and probably be lower than the mid-single digit if it's a non-exclusive deal.

Helen I. Torley: But obviously each of these will will offer a new royalty revenue stream for <unk>.

Helen I. Torley: And and <unk>.

Helen I. Torley: For the mid single digit for an exclusive deal and probably be lower than the mid single digit if it's a nonexclusive deal.

Mohit Bansal: Got it, that's super helpful. And then there was one clarifying question.

Speaker Change: Got it that's Super helpful. And then one clarifying question so.

Helen I. Torley: So, I mean, the Pressley's mentioned that there was a little bit lower bulk RHU-PH20 sales. Should we read anything into it? It was just like a one-off thing.

Mohit Bansal: He has mentioned that there was a little bit lower bulk out at your peers, 25th should we read anything into it. It was just like a one off thing.

Nicole LaBrosse: Yeah, I'll ask Nicole to address that. Yeah, thanks for the question.

Speaker Change: Yeah, I'll ask Nicole to address that.

Nicole LaBrosse: So we were expecting that for the first quarter. You might recall, going into the year, we had indicated that our API sales, just based on our partners' ordering patterns, and as we entered into the firm periods for our orders, we did have a line of sight to the fact that those orders would be more weighted to the second half of the year. So this is all in line with our expectations.

Nicole LaBrosse: For the question. So we were expecting that for the first quarter you might recall going into the year, we had indicated that our API sales.

Nicole LaBrosse: Based on our partners ordering patterns and as we enter into firm the firm periods for our orders. We did have line of sight to the fact that those orders would be more weighted to the second half of the year. So this is all in line with our expectations.

Mohit Bansal: Got it. Super helpful. Thank you. And your next question comes from the line of Corinne Johnson with Goldman Sachs. Please go ahead. Hi, I wanted to clarify one of the comments you made on the term discussions you're having being a mix across

Speaker Change: Got it Super helpful. Thank you very much.

Corinne Johnson: Thank you. And your next question comes from the line of Corinne Johnson with Goldman Sachs. Please go ahead. Hi, I want

Corinne Johnson: Thank you and your next question comes from the line of Corbijn Johnson with Goldman Sachs. Please go ahead.

Corinne Johnson: Hi, I wanted to clarify one of the comments you made on the <unk>.

Corinne Johnson: Term discussions youre having.

Corinne Johnson: Extra costs.

Corinne Johnson: And hands on the auto injector in auto injector, only and just kind of get a sense for the breakdown there and then on the auto injector.

Corinne Johnson: Within hands partnerships I guess are these companies already.

Corinne Johnson: Gone through or fine without doing the human factor studies, you've highlighted as being a key focus for one of the potential partners.

Corinne Johnson: Or will that be another item that you need to check off before announcing a deal.

Helen I. Torley: Yeah, thanks, Corinne. In terms of the discussions, definitely more conversations happening around in-hands only. That is, and again, that is based on the volume of the drugs that we're discussing predominantly. For those where there is a product that is falling into the, for example, three to 10 ml, we are having discussions with several companies with regard to the high volume auto-injector and its applicability, really to give state-of-the-art delivery for that company. And then there are a few conversations on a small volume.

Corinne Johnson: Yeah. Thanks, Karen.

Corinne Johnson: In terms of the discussions are definitely more conversations happening around in hands only that that is and again that is based on the volume of the drugs that we're discussing predominantly for those where there is a product that is falling into the for example, three to 10 ml, we are having discussions with several companies but.

Helen I. Torley: Regard to high volume auto injector and its applicability really to give them state of the art delivery for that company and then there are a few conversations on small volume that really is a lesser focus for us as we have a unique set of circumstances, where our Spi is the best it's in areas, where somebody is looking for.

Helen I. Torley: That really is a lesser focus for us as we have a unique set of circumstances where our SVI is the best. It's in areas where somebody is looking for high reliability or there is a high viscosity drug. So that really is how to think about the number of conversations we're having. I would say in the conversations on the AHVI that, as I mentioned, all companies will want to hold it and test it. That definitely is something that we're seeing. Again, it's something that hasn't been done before. This is a breakthrough!

Helen I. Torley: Our high reliability.

Helen I. Torley: Or there is a high viscosity drugs. So that really is tied to think about the number of conversations we're having I would say in the conversations on the a H V. I as I mentioned, all companies will want to hold it and test it that that definitely is something that we're seeing again its something that hasn't been done before this is a.

Helen I. Torley: And so they want to test it. Whether they'll want to do human factor studies, I don't think we know that yet, but certainly companies are wanting to evaluate it themselves in terms of understanding how it delivers, etc. So we have to stay tuned for any more information as to whether there will be more human factor studies. But definitely, there is an evaluation period where they want to play with it themselves.

Helen I. Torley: Through and so they want to test it whether they'll want to do human factor studies I don't think we know that yet, but certainly companies are wanting to evaluate it themselves in terms of understanding how it delivers et cetera. So we'll have to stay tuned for any more information as to whether it'll be more human factor.

Helen I. Torley: But definitely there is an evaluation period, where they want to play with it themselves.

Speaker Change: Okay. Thanks.

Jason Nicholas Butler: Your next question comes from the line of Jason Butler with Citizens JMP. Please go ahead.

Helen I. Torley: Your next question comes from the line of Jason Butler with citizens JMP. Please go ahead.

Helen I. Torley: the sales potential for the Wave 4 pipeline, or give us some context about, you know, how that magnitude might compare to Wave 1 or Wave 2, or Wave 1, 2, or 3. And then, secondly, can you just give us an update on Ziastat and specifically, what you are seeing in the market in terms of promotion sensitivity, just in the context of your, you know, measured spend on that product? Thanks. Yes, I'd be happy to do that.

Jason Nicholas Butler: Hi, Thanks for taking my question I'm wondering if you're able to comment yet on the sales potential for the wave four pipeline.

Helen I. Torley: Or give us some context about how that magnitude might compare to the wave one wave two.

Helen I. Torley: One two or three.

Speaker Change: And then secondly can you just give us an update on that and specifically.

Helen I. Torley: Specifically what are you seeing in the market in terms of promotion sensitivity.

Helen I. Torley: Just in the context of your measured spend on.

Speaker Change: On that product thanks.

Helen I. Torley: Yeah, happy to do that. So for Wave 4, as we talked about, between Wave 4 and Wave 5, we have nine products that are in development now, which we're obviously very excited about. We aren't giving projections for Wave 4, but I certainly can say that we're excited about some of the products that I mentioned earlier, including Nivolumab Rilatamab, which Brisa Marsquiv talks about as a blockbuster brand, and also Tacx 20%, which has very high potential as well. And then behind that is Vive's N6LS.

Speaker Change: Yeah happy to do that so far the wave for as we as we talked about between wafer and wave five we have nine products that are in development, which we're obviously very excited about we arent, giving projections for wave four but I certainly can say that we're excited about some of the products that I mentioned earlier, including nimble.

Helen I. Torley: And remember a lot of the map, which Bristol Myers Squibb talks about being a blockbuster brand and also tax 20%, which has a very high potential as well and then behind that is beef and fix a L. S. So some of the other products are a little earlier in their development and there arent good estimates.

Helen I. Torley: So some of the other products are a little earlier in their development, and there aren't good estimates as to their potential, but I think all of them are meeting substantial patient unmet needs. It's a little premature for us to be giving projections on Wave 4 and Wave 5, but a very exciting set of products across multiple therapeutic areas. With regard to Ziosted, we have a very focused and clear strategy for Ziosted, with our sales representatives really focusing on driving and identifying the patients that are not doing well on IM therapy and having the conversion and assuring that the patient is connected to all of the great services that we provide to assure affordability.

Helen I. Torley: As to their potential, but I think all of them. We can say our meeting substantial patient unmet need, but a little premature for us to be giving projections on wave four and that way five but a very exciting set of products across multiple therapeutic areas.

Helen I. Torley: With regard to Zaire stead.

Helen I. Torley: We have a very focused unclear strategy for as I said with our sales representatives really focusing on driving and identifying the patients that are not doing well on I am therapy, and having the conversion and assuring that the patient is connected to all of the great services that we.

Helen I. Torley: Vita sure affordability.

Helen I. Torley: We feel we've got the right size of the sales force, the right amount of promotional spend, which actually is less than last year because we've been able to optimize that as we understand it better. So we're at, I think, the right footprint and operating expense to be driving this very nice growth that we saw last year to $100 million, and we're projecting, as you know, strong pay-go growth over the next five years with the current footprint that we have, which is less than 100 representatives.

Helen I. Torley: We feel we've got a the right size of the sales force the right amount of promotional spend which actually is less than last year, because we've been able to optimize that as we understood better. So we're at I think the the right footprint and operating expense to be driving this very nice that growth that we saw last year to 100 million number.

Helen I. Torley: Acting as you know strong CAGR over the next five years with the current footprint that we have which is less than 100 representatives.

Speaker Change: Great. Thank you.

Brandon Smith: Your next question comes from the line of Brandon Smith with TD Cowan. Please go ahead.

Helen I. Torley: Your next question comes from the line of Brendan Smyth with TD Cowen. Please go ahead.

Helen I. Torley: Hi. Thanks very much for taking the time to answer the question. Maybe first on the latest repurchase program, actually, just wondering if you can confirm over what period of time you expect to complete the full $750 million, excuse me, and how we should think about the cadence of buybacks, whether you're kind of planning for steady increments in each quarter or if you'll concentrate them more in certain parts of the year. And then I just wanted to ask quickly about the Vivgard-Hitrullo

Brandon Smith: Hi, Thanks, very much for taking the question maybe first on the latest repurchase program actually just wondering if you can confirm over what period of time, you request to complete the 400.

Helen I. Torley: Excuse me and how we should think about the cadence of buyback, whether you're kind of planning for a steady increments in each quarter or if you are concentrated more in certain parts of the year.

Helen I. Torley: And then I just wanted to ask quickly about the <unk> pipeline can you, maybe remind us which indications are going directly into the enhancement Q or there are some where they either plan to use IV exclusively or IV <unk> confirmatory study just trying to understand what part of that broader portfolio will be focused on ESG.

Helen I. Torley: Can you maybe remind us which indications are going directly into the enhanced sub-Q, or if there are some where they either plan to use IV exclusively or IV first and then run confirmatory studies? Just trying to understand what part of that broader portfolio would be focused on ESC.

Nicole LaBrosse: That's great, thanks. Thanks, Brandon, and welcome. I'll ask Nicole to address your share repurchase question. Yeah, thanks, Brandon. So for on the $750 million $750 million authorized

Speaker Change: Thanks, that's great. Thanks, Thanks, Brandon and welcome I'll ask Nicola to address your share repurchase question. Yeah. Thanks, Brendan so far on the 750 $750 million authorized plan.

Helen I. Torley: Transcribed by https://otter.ai

Nicole LaBrosse: Did not time bound that plan, but to give you a sense in how we've performed historically our prior two plans.

Helen I. Torley: plans and especially the prior plan, which was a similar size, which we completed in less than three years, so you can think about that level of cadence of, you know, historically how much we have repurchased totaling, to date, 1.3 billion dollars deployed to share repurchases, so it continues to be an important pillar of our capital return strategy, but the specific cadence is something that we continue to monitor as we deploy our cash among Great, and I'll take the question on Vivekart-Hatrullo.

Nicole LaBrosse: And especially the prior plan, which was a similar size we completed in less than three years. So you can think about that level of cadence of historically, how much we have repurchased totaling to date $1 $3 billion deployed to share repurchases. So it continues to be an important pillar.

Helen I. Torley: Of our of our capital return strategy, but the specific cadence is something that we continue to monitor as we deploy our cash amongst the pillars and really balance it between investments and our current business as well as investments in growing the business through M&A.

Helen I. Torley: So, obviously, Tim Van Harmeren, the CEO of Regenexx, has talked about his vision that patients with autoimmune disease are going to be able to self-administer Vivekart-Hatrullo over time, where possible. And this really is, you're going to see reflected in his development portfolio where more and more indications are moving toward subcutaneous. What I can say based on what's being shared publicly is that, obviously, generalized myasthenia gravis started as an IV, but the sub-Q obviously launched beginning last year.

Speaker Change: That's great and I'll take the question on five car it truly so I, obviously I'm. The same then how tomorrow and the CEO of organics has talked about.

Helen I. Torley: His vision that patients with autoimmune disease are going to be able to self administer <unk> garre I truly over time, where possible and this really is.

Helen I. Torley: Youre going to see reflected in his development portfolio, where more and more indications are moving towards subcutaneous what I can say based on what's being shared publicly.

Helen I. Torley: Is that obviously generalized myasthenia gravis started as an I V, but the sub Q, obviously launched beginning last year CIBC. This year see IDP. This year, sorry is a sub Q indication only and Pemphigoid I believe is a subcutaneous indication only we're delighted this quarter to be.

Helen I. Torley: CIBP this year is a sub-Q indication only. And pemphigoid, I believe, is a subcutaneous indication only. We're delighted this quarter to be announcing that, with our GenX, they've started two sub-Q studies in TED that are Phase III registration studies. And, as far as I'm aware, there are no IV studies that are listed on clinicaltrials.gov. So, I think that there's a strong opportunity for this to be another sub-Q only indication. And so, I think this will roll out to more information on these over time as our GenX articulates how they're going to go towards all of the 15 indications. But I think to meet Tim's vision of this, or at Vivecart, really being transformative for patients with autoimmune disease, it's my expectation the majority of indications will be sub-Q.

Helen I. Torley: And one thing that with with organics that they've started to sub Q studies in Ted that our phase III registration studies and as far as I'm aware. There are no IV studies that are listed on clinical trials Dot Gov. So I think that that's a strong opportunity to be another sub Q only indication and so I think.

Helen I. Torley: This will rollout to more information on these over time.

Helen I. Torley: As our janick, some articulate how theyre going to go towards all of the 15 indications, but I think to meet Tim's vision of this or it <unk> really being transformative for patients with autoimmune disease I. That's my expectation the majority of indications will be sub Q.

Brandon Smith: All right, great. Thanks very much.

Speaker Change: Alright, great. Thanks very much.

Mitchell Swaroop Kapoor: Your next question comes from the line of Mitchell Kapoor with HSC Wainwright. Please go ahead.

Brandon Smith: Your next question comes from the line of Mitchell Kapoor with each ceiling right. Please go ahead.

Mitchell Swaroop Kapoor: Hi, everyone. Thanks for taking the questions.

Mitchell Swaroop Kapoor: Wanted to ask on doors lacks the ex U S royalties stepped down in March with that happening how much volume growth in the coming quarters do you need to kind of stay on pace for the $500 million royalty revenues or I guess, what would be the necessary performance of some of these wave three launches that you would need to see this year.

Mitchell Swaroop Kapoor: To be successful and kind of meet that threshold.

Nicole LaBrosse: Super, I'll ask Nicole to address that. Yeah, thanks for that.

Mitchell Swaroop Kapoor: Super I'll ask Nicole to address that yeah. Thanks for that so we had included in our forecast the expected step down related to O U S sales for <unk>. So that is part of our plans. It's the driver for our forecast, which demonstrates that we expect Q1 and Q2 royalties to be relatively flat.

Mitchell Swaroop Kapoor: With where we exited 2023, so that's why you see that phenomenon and our expectations for 2024 is that Q1, and Q2 will be flat, but because the brand is expected to grow that will offset that royalty rate reduction and as well as continued growth with FESCO or other wave two product.

Mitchell Swaroop Kapoor: And as he mentioned contribution from our wave three launched products and that's what gives us the confidence to project a sequential growth in the third quarter and the fourth quarter of 2024, allowing us to achieve our total royalty projections for the full year of $500 million to $525 million.

Helen I. Torley: Okay, great. And separately, could you just provide any update on progress towards next-generation enhanced technology? Or is that something that's a little further away?

Mitchell Swaroop Kapoor: Okay great.

Mitchell Swaroop Kapoor: Could you just provide any update on the progress towards our next generation enhanced technology or is that something that's a little further away.

Helen I. Torley: Yeah, we talked about having a more room temperature stable in-hands that we have been talking to different current partners and potential partners about. It's a different structure than the in-hands, and it has slightly more extended IP to 2032 in Europe and 2034 in the United States.

Nicole LaBrosse: Yeah. We are a couple of years ago had talked about having a more room temperature stable in handset, we have been talking to different current partners and potential partners a boat.

Helen I. Torley: It's a different structure than in hands and it has slightly more extended until IP to 2032 in Europe and 2034 in the United States because the majority of products. We continue to work on Mitch R. R.

Helen I. Torley: Because the majority of products we continue to work on are products that need to be refrigerated, such as antibodies and bi-specifics, we have found that there is so far limited interest in a new in-hand. Our current in-hands does everything people need it to do, and importantly, it's coming with this 800,000 patient database now establishing safety and a very strong regulatory track record of success around the world with multiple approvals in up to 100 countries.

Helen I. Torley: But products that need to be refrigerated such as antibodies and bi specifics. We have found that there. So far is limited interest to a new and hands that are current and hands does everything people need it to do and importantly, it's coming with this 800000, a patient database now establishing the same.

Helen I. Torley: Ft in the very strong regulatory track record of success around the world.

Helen I. Torley: Multiple approvals and up to a 100 countries and so I will say that.

Helen I. Torley: And so I will say that because in-hands does everything people need and the products have to be refrigerated anyway, we haven't seen traction with it. I do think in the future, if we had a small molecule where the goal was that the patient would be able to carry an auto-injector around with them, that might be the type of product that the partners would want to use the additional in-hands for, but that's a very limited opportunity, and so far, while we're in discussions, we haven't advanced those discussions.

Helen I. Torley: Because in hands does everything people need and the products have to be refrigerated anyway.

Helen I. Torley: We haven't seen traction with it I do think in the future. If we had a small molecule where the goal was that the patient would be able to carry an auto injector are run with them that might be the type of product that the partners would want to use the additional enhanced four but that's a very limited opportunity and so far while we're in discussions we havent.

Helen I. Torley: Those discussions.

Helen I. Torley: Okay, great. That's super helpful. Thank you, Helen. And thank you, Nicole. I really appreciate it.

Speaker Change: Okay, Great. That's super helpful. Thank you Helen and thank you Nicole I appreciate it.

Helen I. Torley: Right.

Helen I. Torley: Yeah.

David Reed Risinger: Your next question comes from the line of David Risinger with Lyrinc Partners. Please go ahead.

Helen I. Torley: Your next question comes from the line of David Risinger with Leerink Partners. Please go ahead.

Helen I. Torley: Yes, thanks very much. And thank you as well from my side for the updates. So, my questions have been asked. I just have one more, which is that the company spent $19 million on R&D in the first quarter. Is that basically the run rate that we should be expecting going forward, so maybe $75 million plus a year? And could you just provide some more color? I think that is primarily in their hands, but I'm not sure. Could you just help us understand that spending, whether it's for internal activities of innovation, whether it is spending, you know, to help partners develop their products? Just any more color on that would be helpful.

David Reed Risinger: Yes.

David Reed Risinger: Very much.

Speaker Change: Thank you.

Helen I. Torley: As well from my side on the updates.

Helen I. Torley: So.

Helen I. Torley: My questions have been asked I just have one more which is the company spent $19 million on R&D in the first quarter is that basically the run rate that we should be expecting going forward. So maybe $75 million plus a year and could you just provide some more color I.

Helen I. Torley: Thanks.

Helen I. Torley: That is primarily on hands, but I'm not sure could you just help us understand.

Helen I. Torley: That spending whether it's for internal activities of innovation, whether it has been.

Helen I. Torley:

Helen I. Torley: To help partners develop their products just any more.

Helen I. Torley: Color on that would be helpful.

David Reed Risinger: Yep, Nicole will address that.

Helen I. Torley: Yes, Nikola dress up yes, happy too David So your first question on the run rate.

Nicole LaBrosse: Yes, happy to, David. So your first question is on the run rate.

Nicole LaBrosse: I will say that the amounts you saw in the first quarter are expected to grow for the remainder of the year as we make investments in our product development. And so I would advise you to build that into your models as well, growth from the amounts that you saw in the first quarter. And where we spend our R&D dollars is on the enhanced side as well as the HVAI development. We're making investments in the development of the high volume auto injector this year. And so that is another driver of the expenses that we see this year.

Nicole LaBrosse: I'll say that the amounts that you saw in the first quarter are expected to grow for the remainder of the quarters of the year.

Nicole LaBrosse: As we make investments in our in our product development and so that I would I would advise you to build that into your models as well growth from the amounts that you saw in the first quarter and where we spend our R&D dollars.

Nicole LaBrosse: He is on the enhanced side as well as the HVA AI development, we're making.

Nicole LaBrosse: Investments in the development of the high volume auto injector this year and so that is another driver of the expenses that we see in this year.

David Reed Risinger: Thank you. And could you just add a little more color since the hand is going off patent and 2027? What is the product development that you're doing in the R&D line? Just one example, and we've talked about that

Nicole LaBrosse: Yeah.

Nicole LaBrosse: Thank you Ron could you just add a little more color since in hands is going off patent in 2027, what what is the product development that you're doing in the R&D line.

Helen I. Torley: Yet one example, and we've talked about the higher yield API that we're making investments in that is expected to be available to our partners in 2026. That is a good example of the investments we're making that will benefit our partners and, in particular, their cost in buying the API from us. And David, I'll just mention that while the US patent is expiring in 2027, that's basically the composition of matter patent. As we have shown, based on co-formulation patents, we expect to continue to receive royalties on all of our royalty streams until 2030 for many of them, beyond 2030 for a number of them, and beyond 2040 for another.

Speaker Change: Yeah. One example, and we've talked about the higher yield API that we're making investments in that are expected to be available to our partners. In 2026 that is a good example of the investments, we're making that will benefit our partners and in particular, there are cost and buying the API from us.

Helen I. Torley: And David I'll, just just mentioned while the U S patent is expiring in 2027, and that's basically the composition of matter patent.

Helen I. Torley: We have shown we expect based on co formulation patents that were going to continue to receive royalties on all of our royalty streams until 2030 for many of them beyond 2030 for a number of them and beyond 2040 for another and so we have got very durable revenues and so it does make sense.

Helen I. Torley: And so we have got very durable revenues. And so it does make sense for us to invest in the best and lowest cost API because we have got 20 years still ahead of us, or plus that for our product in our hands. And so it's a very wise investment given the durability and length and the long stream of royalties we are expecting.

Helen I. Torley: For us to invest to have the best and lowest cost API.

Helen I. Torley: Cause we have got 20 years still ahead of us.

Helen I. Torley: Plus that for our product in hands and so it's a very wise investment given the durability and length and long stream of royalties we were expecting.

Speaker Change: Got it thank you.

Joseph Michael Catanzaro: And our next question comes from the line of Joe Catanzaro with Piper Sandler. Please go ahead.

Helen I. Torley: And our next question comes from the lineup Joe Catanzaro with Piper Sandler. Please go ahead.

Joseph Michael Catanzaro: Yeah.

Helen I. Torley: Hi, yeah, thanks. Thanks for taking my question. I had maybe a quick one that maybe goes back to the discussion around to centric updevo sub 2 as it relates to the early days of to centric sub 2 and in the EU. Wondering if you have any early data points there on conversion rates, where you're seeing where it's being used, I guess, within indications and settings, and then maybe stepping back more generally. Is it fair to assume what we see around the to Thanks.

Joseph Michael Catanzaro: Hi, yes. Thanks, Thanks for taking my question I had maybe a quick one.

Helen I. Torley: If it goes back to the discussion around to centric opdivo.

Helen I. Torley: Sub Q as it relates to the early days of centric sub Q in the EU wondering if you have any early data points there on conversion rates, where youre seeing where it's being used I guess within indications and settings and then maybe stepping back more generally is it fair to us to assume what we see.

Helen I. Torley: Around the two centric subdued trajectory will be comparable to maybe what we will ultimately see for Opdivo sub Q.

Helen I. Torley: In the 2025 timeframe. Thanks.

Helen I. Torley: Yeah, Roche has not provided a lot of details, but they did on their fourth-quarter call talk about the fact that after one quarter in the UK, they'd seen 18% conversion, which I think is a very strong performance for such a short period of time. But since the European launch in January, they haven't talked about the conversion. And, remember, for Europe, we're going to see countries rolling it out over the course of the year as reimbursement is obtained.

Speaker Change: Yeah, Yeah, Yeah Roche has not provided a lot of details they did on their fourth quarter call talk about the fact that after one quarter in the U K they'd seen 18% conversion, which I think gives a very strong performance for such a short period of time, but since the European launch in January they havent dumped.

Helen I. Torley: Talked about the conversion and recall for Europe, where you're going to see countries ruling out over the course of the year as reimbursement is obtained.

Helen I. Torley: So we look forward to Roche providing some updates on that. With regard to comparing the uptake for Opdivo, you know, Tocentric is going to have a different cadence of the timing of approvals that I think you'll have to factor in as you're thinking about that, because Tocentric obviously is going to have Europe going first, and the US coming nine months later. I would have an expectation that, and we still have to see based on what Bristol says about the Opdivo European file acceptance and launch timing, that that will be closer together.

Helen I. Torley: So we look forward to Roche, providing some updates on that with regard to comparing the uptake for Opdivo E. L F.

Helen I. Torley: Hendrik is going to have a different cadence of the the.

Helen I. Torley: The timing of approvals that I think you'll have to factor in as you're thinking about that because to centric. Obviously is going to have Europe going first U S. Coming nine months later I would have an expectation that and we still have to see based on what Bristol says about the Opdivo European file acceptance and launch timing that will.

Helen I. Torley: Be closer together apart from that I think there the factors are probably going to be pretty similar in terms of strong value proposition where patients get the opportunity for treatment in just five minutes approximately instead of up to 60 minutes and strong patient preference for to centric that we can talk about where I'm at.

Helen I. Torley: Apart from that, I think the factors are probably going to be pretty similar in terms of a strong value proposition, where patients get the opportunity for treatment in just five minutes, approximately instead of up to 60 minutes. And strong patient preference for Tocentric, which we can talk about where 71% of patients preferred subcutaneous Tocentric really citing less time in clinic, and the administration of the subcutaneous was much more comfortable for them. And the treatment was less emotionally distressing for them. And so all of those are good factors. But I think the launch cadence might be one of the factors that would make these launches not identical but a strong value proposition for both.

Helen I. Torley: 71% of patients some preferred subcutaneous to centric really exciting less time in clinic they.

Helen I. Torley: The administration of the subcutaneous was much more comfortable for them and the treatment was less emotionally distressing for them and so all of those are good factors, but I think the launch cadence might be one of the factors that would make these out launches not identical but strong value proposition for both.

Helen I. Torley: Yes.

Joseph Michael Catanzaro: Okay, great. That's helpful. Thanks for taking the time to ask the question.

Speaker Change: Okay, Great. That's helpful. Thanks for taking the question.

Joseph Michael Catanzaro: Okay.

Operator: And we have reached the end of our Q&A session. Thank you, presenters, and ladies and gentlemen. That concludes today's call. Thank you all for joining me now.

Speaker Change: Thank you and we have reached the end of our Q&A session. Thank you presenters, ladies and gentlemen that concludes today's call. Thank you all for joining you may now disconnect.

Operator: Please wait; the conference will begin shortly.

Speaker Change: Please wait the conference will begin shortly.

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