Q3 2024 Halozyme Therapeutics Inc Earnings Call
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Jail: Good afternoon. My name is Jail and I'll be your conference operator today. I just wanted to welcome everyone today. Hey, those I'm third quarter, twenty twenty four financial and operating results conference call.
Online to the place that we need to prevent any backlash.
After the speaker's remarks, there will be a question and answer session. If you would like to ask questions this time, simply press star, follow the number one on your telephone keypad. If you would like to withdraw your question, press star one again.
Jail: is note this event is being recorded.
I'll turn the call over to Tram Bui, Helen Torley, Vice President and then Vester Relations and Corporate Communications. Please go ahead.
Thank you, operator. Good afternoon and welcome to our third quarter 2020 course by the National and Operating Results Conference call.
Speaker Change: In addition to the press release issue today after the market closed, you could find a supplementary slide presentation that will be referenced during today's call in the Investor Relations section of our website.
leading Nicole will be Dr. Helen Torley, Helisem's President and Chief Executive Officer who will provide an update on our business and Nicole LaBrosse, our Chief Financial Officer, will review our financial results as well as our outlook.
On today's call, we will be making forward looking statements as outlined on slide 2. I would also refer you to our SEC filings for a full list of risk and uncertainties.
During the call, both Gap and Mon Gap Financial measures will be discussed.
Certain non-gap or adjusted financial measures are recognized by the comparable gap financial measures in our earnings press release and slide presentation.
Oh, now trying to call over to Dr. Helen Torley.
Speaker Change: Thank you Tram, and good afternoon everyone. Let me start in slide three.
Speaker Change: I'm very pleased to report we delivered strong third quarter financial results with a 34% increase in total revenues to reach an all-time high of $290 million in the quarter.
This was largely driven by Ralph Yrevny, which increased 36% to another record a month of $155 million.
This performance reflects a continued expansion and broadening of adoption of our enhanced drug delivery technology with continued strong growth of Darzul ex-subcutaneous ASCO and Fythgaard Hay Trulow.
Faced on our strong gear-to-date performance, we are raising a total revenue, a relatively revenue adjusted EVITDA and non-gap earnings-per-served guidance range is for the full year.
Speaker Change: Notably, this year we now expect to deliver high double digit revenue growth of 17-23% and an impressive adjusted to even that growth of 40-47%.
and Nicole will go into more detail on this in a moment.
Speaker Change: operationally, it was also another strong quarter.
Two current partners nominated new targets for enhanced under expanded licensing agreements, adding new revenue in terms of milestones and reinforcing the value of our leading drug delivery technology.
We've also continued our focus on securing UN hand deals and also new agreements for our small and our high volume auto injectors with discussions continuing and advancing.
Speaker Change: Rose, one of our most tenured partners, gained two significant regulatory approvals with FDR Proveals for Tecentric Sepcutineis with Enhanced and for all of its sex cutaneous with Enhanced.
and adding to this, multiple partners continue to expand their geographic approvals and advance their clinical development programs.
These achievements are key drivers of our current and future growth trajectory. They reinforce our leading position and rapid large volume sub-tainee structure delivery and illustrate the well-proven success and predictability of our platform technology.
I'm Ammoos to slide four and we'll provide some more details on these recent accomplishments.
In September, we were delighted to announce to Highland-Spatiate Partner Proveble, which reinforced enhanced track record of 100% phase 3 to regulatory approval success.
The U.S. approval approaches to central type reshow within hands, represents availability of the first and only, sub-titanist antipdl1 cancer immunotherapy.
A approval was granted for all of the adult IV to centric indications with treatment delivered as an approximately 7 minutes of safety tennis injection.
Speaker Change: [inaudible]
Speaker Change: We're also a CEO of the U.S. approval of Ocarbyssenuble with Enhanced, which is our eight partner product approval, and further extended Enhanced is reached into neurology.
With Ocarpice and Uble, multiple sclerosis patients can now receive their treatment as a 10-minute sub-genious injection given twice a year compared to a multi-hour treatment for the intravenous, also given twice a year.
Speaker Change: The dramatic simplification of treatment also creates the opportunity for patients to receive their treatment outside the NIV Infusion Facility Potentially closer to their home.
These two recent approval add to the significant growth opportunity we have right in front of us, building on and adding to the recent European launches of the San Trek and Ocrabas subcutaneous within hands.
Let me move now to the partner recruitment expansion.
In Hansen Ziegels Standard for rapid subtenuous, large volume drug delivery. This has been established over the last 10 years as a result of the strong safety track record and the unmatched history of global regulatory approval and commercial success.
This success is supporting productive conversations with existing partners who have experienced firsthand the success they can achieve within hands.
Speaker Change: We're a place that this has resulted in five new target nominations in the quarter.
In our latetober, we announced that our genics expanded their agreement for the exclusive license to an M by nominating 4 additional targets.
Speaker Change: Based on the six-bancin, Arjanics has now exclusively licensed and hands for a total of six targets, including five-guard had trillow.
As part of their agreement, our genics will make a $30 million payment to give us them for the foreign new target.
The reportant will feature milestone payments related to development progress, regulatory approval and salespid attainment of up to $85 million per new target.
We're very excited to expand our relationship with our Janix, who is an innovative leader in immunology.
Speaker Change: As their partner of choice for rapid large volume substitutes and is drug delivery, we appreciate their patient's entry mission, but is so closely aligned with our own commitment to improving the lives of patients through our innovative drug delivery technologies.
Speaker Change: In the quarter, we've also expanded their existing global collaboration and licensing agreement, which gives them exclusive access to our enhanced drug delivery technology for one additional undisclosed target.
Speaker Change: Now with that overview, we've now to discuss the progress, over milestone and role to generating subcutaneous commercial products, starting with Johnson & Johnson's Darzlex on Slide 5.
In the quarter, Worldwide Sales for Darsley increased on a 23% on an operational basis to represent the first asset in the J&J portfolio to reach $3 billion in a single quarter.
Darnellex School was primarily driven by share games of four points across all lanes of therapy with 7.7 points of growth in frontline settings, as well as continues market growth.
With conversion to Darvlake's fast-pro with enhanced exceeding 90% share of sales in the United States and with very high conversion rates outside the United States. Saphke Tene's Darvlake's is the driver of this remarkable continued strong Darvlake's growth.
Further expanding Darzlick's subtenies and occasions and opportunities during the quarter, TNJNN's additional new approvals and regulatory submissions.
Jail: U.S. and European approval were recently received for an additional indication for dialysis of enhanced. In newly diagnosed multiple-mile owned patients who are eligible for a tolligus-thensile transplant, in combination with protezmids, lenolydomyide and dexamethosone.
The company also announced the submission of a supplemental BLA to the Food and Drug Administration for approval of a new indication of Darsal XFASPRO as part of a quadruplet regimen for the treatment of adult patients with newly diagnosed multiple myeloma for whom at all of this stem cell transplant is deferred or who are ineligible.
with that on my turn to roses back go which is shown in flight 6.
As Bill, which is a fixed combination of projector and her set in within hands, continues to demonstrate excellent growth momentum.
Fails increased 58% to 1.2 billion Swiss banks for the first 9 months of 2024.
Update remains strong as the digital country's launch with 55 countries now launched.
Conversion of Projector has also increased to 43% in those countries.
There's got is an extra trajectory and as well positioned to reach and exceed 50% conversion by 2020.
Speaker Change: Also shown in the slide is updated analysts revenue consensus for FEDSGO.
With the strong girls and momentum I've just discussed, there's good as now projected to become a 3.5 billion dollar brand in 2028.
As all of this 3.5 billion dollars in sales represents subcutaneous sales on which Helen's paid in mid-final digit royalty. There's good represents another strong growth opportunity for Helen's.
Moving now to additional highlights on Roast's two most recent launch products which are shown on slide 7.
I'll start with two-centric hybridic.
Following European approval in January of this year, we were very pleased that similarly to Europe, the US approval was granted for all of the adult ID indications.
Speaker Change: To send a cabriza, co-formulated within hands allows for an approximately 7 minutes of continuous injection compared to 30 to 60 minutes for the IT infusion.
Demandializing the opportunity, wrote reported to Centric Revenue of 2.7 billion Swiss Franks for the first 9 months of 2024.
Amos Predictment 10th Centered, Willeteves, $5 billion in 2008.
Roastestated that the expected majority of the sales of subcutaneous to Sandrich will come from conversion of the intravenous portion. Let me move now to Roast's Ocarvice removal. I'm particularly excited for the U.S. launch, following the Food and Drug Administration approval in September.
Speaker Change: This approval follows closely on the European approval which occurred in June of this year.
Speaker Change: Ocarbus, the newville within hands expands our reach in the urology and offers multiple sclerosis patients, treatment administration time of just 10 minutes via subcutaneous injection within hands, which compares to multiple hours required for the IV infusion.
Speaker Change: This Epidine's formulation offers patients all of the benefits that they expect from Ocarvus in terms of this strong clinical profile and every six months dosing, while easing the administration burden of receiving treatment.
Ocarvus Redney, increasing 9% to 5 billion Swiss Franks for the first nine months of the year, driven by all regions.
Welcome to the recent quarterly call to be a confidence that the sub-linear formulation within hands will expand occupies of footprint in the multiple sclerosis market and represent an incremental $2 billion sales opportunity.
Speaker Change: They availability of 70 10 years also makes this possible by opening up the treatment opportunity at smaller community hospitals as an example, making it easier for patients to travel to receive treatment.
Speaker Change: or also sees an opportunity for patients to convert from ideal-crivist to the sub-tainiest version.
Speaker Change: Comments that they are seeing promising first signals regarding the uptake in the US, which is sporting market expansion.
Speaker Change: About 80% of the new starts on Ocarvice and Nouveau are coming from patients who are new to brand and who are not switches from Ocarvice IV.
Let me move now to urgentics and Vygart Rattulo, which is shown on slide 8.
Speaker Change: Our genics of the BideGuard continues to experience strong momentum in its first indication of generalized mice in their graphics. Our genics recently commented that the expect of septidane is BideGuard, will grow an important with patient's physicians and peers.
We're pleased that 17 years of life got within hands. There's already expanding the market by bringing in new patients and providers to live guard with patients switching from oral medications to subcutaneous, including patients who don't have easy access to an IV impusion center.
Speaker Change: Moving now to chronic inflammatory, demyolandating, poly neuropathy, the second indication. While the launchers' recent, agenics has commented that with the unmet medical need, they are happy to see higher awareness for the subtenics option among patients and physicians.
Speaker Change: Our Janet Sixth Bank's to create fast and broad access for CIDD patients similar to what they accomplished in their launch in my senior gravis.
We're also looking forward to the approval of a pre-films range for ViteGuard Head True Live with enhanced, which will introduce a more convenient and administration option for patients with GMD and also CIDP.
The Pre-Pri-Philster Range Violet has a producer-action date of April 10, 2025.
Speaker Change: and are Danics is also continues to expand its presence in additional regions. Most recently, it's PLA for after-to-demot sub-cutting is within hands for GMG with a prison China, increasing number of approvals to more than 25 countries globally.
Given the strong launch of five-guard, most of all analysts currently project total fails to reach almost $5 billion in 2028 for just the first two approved indications.
Speaker Change: We believe there is considerable opportunities to increase the total addressable market for five-car, as our Janix continues to advance its pipeline and the product strategy by expanding to additional indications over time.
We're pleased to be supporting two registrational studies evaluating five-cart hotel within hands administered by pre-fulfill syringe in thyroid eye disease and indication where there is really high on their need.
In addition, in October, our genics initiated a phase 3 study, evaluating five-garde hepulo with an hence for ocular mice in our gravis. And also recently, our genics initiated a phase 2 trial in kidney transplant recipients with antibody mediator's rejection.
Speaker Change: Now, beyond five, Barra Chulow, our genics has a robust pipeline of multi-indication assets, including the M-passive ProBruct or ARGX117.
As an innovator committed to improving patient's life, our genetics was at the forefront of recognized and the benefit of subtenits delivery.
The early success of Vicar Atulo, if you strong proof-wine in the Valley Proposition of Enhancing Able Subtitanist Delivery, and we are very pleased to have expanded our agreement with our genics from two to six nominations and to be the partner choice for rapid large volumes Subtitanist drug delivery.
Speaker Change: The End.
Let me now move to slide 9 for an update, a small product that are a weakened regulatory approval and launched. I'll begin with Bricimar's whip Nevolomaph subcutaneous.
Bristol received regulatory filing acceptance in the U.S. last quarter for the Mollababs subcutaneous within hands with a bidoo for action date of December 29th of this year.
The European submission is also under review.
Speaker Change: Once approved, this week represent our 9th approved products within hands.
Speaker Change: [inaudible]
of Divo, which is the brand name for Ivy in the Volumab. It's currently $9 billion in annual sales.
Speaker Change: First, it will have stated that it projects for the granted subcutaneous indications will represent 75% of these total sales.
They also stated they expect converting 30% of the IZ and the volumet to subcutaneous and volumet.
Johnson & Johnson's amy phantom app subtitanist with enhances all-fabricating regulatory approval, and is currently under prior to review with the FDA.
Speaker Change: A Proval would represent our 10th Launched Partner product.
Speaker Change: Earlier this year, exciting data from the Paloma 312 for Ami Vantam Upceptidaneous was presented at ASCO.
The presenters highlighted a five-fold reduction in infusion-related reactions as compared to the intravenous, a five-fold reduction in treatment time, and also they presented the results of an exploratory analysis, which revealed an improved overall survival rate for the continuous treatment arm.
During their last earnings call, J.J. Highlighted the Faber-Leave Rhyper V. which is a brand name for M event map IV. It's one of the three largest underpricated assets in their portfolio in terms of revenue projections versus what analysts are currently estimating for the back half of this decade.
What is clearly exciting is that the five recently launched and soon to be launched products represent almost $35 billion in total brand opportunity, according to analysts and company estimates.
Speaker Change: This represents an even larger opportunity than the dollars like subcutaneous and fast global opportunity, where analysts projections are $20 billion in $20,28.
As Taylor's and receives on average in this single digital reality in 17 years sales, you can clearly see how these products will add significant revenue over the next year and result in our projecting to achieve greater than $1 billion in royalty revenue in 2027.
Let me know, move this like 10, where I'll mention a few highlights in some of our future potential launch products.
Speaker Change: For some hours, as continued to advance their phase study for Naval Mab plus Relat Mab within hands in first line known small cell lung cancer.
Speaker Change: The Ivy combination is already approved and has the branding of dual-life.
Speaker Change: Takeda also continues to answer phase 3 study with TAQ-881. There are 20% IGG product candidate, which is progressing in a phase 3 trial for the treatment of primary immunodifficiency.
Speaker Change: With all of the continued strong rules of our approved product, the exciting launches that are just beginning and the regulatory and clinical advancements, we are well positioned to continue to deliver double digit top and bottom line growth in the coming years.
Speaker Change: Let me know your suggestions to slide your living and I'll make some comments on intellectual property.
Our extensive pattern is saved, supports a durability of our revenue streams and we continue to take actions to expand and protect our IP portfolio.
In June, we were granted a new patent for enhanced by the European patent office, which extended patent coverage all our technology in that region to mark the 6th of 2020.
This resulted in an update to our guidance.
We currently have a similar pending reassupatment in the United States that we're confident will be granted. We look forward to providing an updated financial outlook if that reassupatment is granted with similar claims.
Speaker Change: And as a pioneer in developing human-hyleronadases for subcutaneous administration lessons, we were very excited to introduce our M-dase patent portfolio that broadly covers modified human-hyleronadases.
Speaker Change: He and the band created the first solvable human-high enormities that was active at neutral pH, which we call in hand.
Notably, we did not stop there. We continued to innovate and experiment. And over many years and thousands and thousands of experiments, we created a large and comprehensive library of modifications and we characterized those modifications.
This groundbreaking work and other research projects created the technology protected by the M-Dase Patents, which are distinct from the patents that cover the trontated human-high-laron days that we license as our enhanced technology.
Speaker Change: Now, why are we discussing the end of this portfolio now? They're really a two-key reason.
Firstly, we recently being issued multiple new M-days patents, bringing the total granted and pending patents to nearly 100 and we wanted to distinguish the M-days patents from enhanced to avoid any confusion.
Secondly, as an intellectual property licensor, we always are looking for new opportunities to commercialize our discoveries and to enable others to bring forward new solutions and therapies that help patients.
The enhanced technology is the de-risk gold standard for conversion of IV therapies to subtertainious administration.
However, we do recognize that not every drug and biologic supplier might be able to or select to use in hands. But they do wish to use lies or are utilizing Helivine pioneering modified hyaluronidies in electro-property.
It's in those cases that the M-Dase passants are no available for license and we'd open up your opportunities for helizine that do not impact our enhanced business.
On those hands, we call over to Nicole who will discuss our financial results in more detail.
Thank you, Helen. I'll begin with an overview of our third quarter performance and then review the increased guidance ranges for 2024 that are resulting from our strong progress.
Our robust financial results for the third quarter exceeded expectations. Due to higher revenues from royal fees and collaboration revenues in the quarter.
Speaker Change: The result is an impressive 34% increase in total revenue from prior year. With the gested EBITDA and non-gap earnings per share growth, outpacing our top line growth at 60% and 69% respectively.
A clear demonstration of the significant leverage we have with our high margin business model.
Let me now turn to Flight 12 for our detailed financial results for the third quarter.
Revenue grew 34% to $290.1 million compared to $216 million in the prior year period.
Royal T-Rabbony's for the quarter were $155.1 million, and increase of 36% compared to $14.4 million in the prior year period.
The continued growth of subcutaneous Darzlacks, Fesgo and Fispar Hicholo were the main drivers of our Royalty revenue growth in the quarter.
The contribution from all three products exceeded our expectations to the quarter, resulting in an increase in guidance for the full year.
Collaboration revenues for the quarter, or 48.4 million dollars, compared to $15 million in the prior year period.
Speaker Change: The performance exceeded our expectations for the quarter due to the meaningful expansion of our genics collaboration.
Research and development expenses were $18.5 million, compared to $17.3 million in the prior year period. The increase was primarily due to increased compensation expense.
Speaker Change: Selling General and Administrative expenses were $41.2 million in the quarter. Up from $35.3 million in the prior year period, primarily due to increased compensation expense and consulting and professional service fees.
Adjusted EBITDA increased 60% to $183.6 million. From $114.9 million last year.
Gap they loaded earnings per share was $1.5 and non-gap they loaded earnings per share was $1.27.
This is compared with Gapta-Luted earnings per share of 61 cents and not Gapta-Luted earnings per share of 75 cents in the third quarter of 2023.
Speaker Change: We maintain a strong balance sheet with cash, cash equivalents, and marketable securities at $666.3 million on September 30, 2024. Compare to $529 million on June 30, 2024.
Speaker Change: The increase of primarily a result of past generated from operations.
Our net leverage ratio is 1.4 times at the end of the quarter, and we still expect to reduce our net leverage ratio as EBITDA continues to grow.
As a result of our strong, year-to-date performance and expectations for continued momentum in the fourth quarter, we are raising our guidance ranges for the full year as shown on slide 13.
We now expect total revenue of $970 million to $1 billion in $20 million and increase year over year from $829 million. Which represents an increase of 17 to 23% over 2023.
Speaker Change: This includes our expectation that collaboration revenue will contribute $130 to $150 million, and products
Speaker Change: We expect royal fee revenues of 550 to $565 million, and increase year over year from $448 million. Which represents 23 to 26% growth over 2023.
Speaker Change: The increase in our expectation for the year is due to the strong performance of subcutaneous star's legs, fezgo and discart hay trulo.
We expected just to EBITDA of 595 to 625 million dollars and increased from 426 million dollars in 2023. A 40 to 47% year-of-year increase.
Speaker Change: And we expect non-gap they rooted EPS of $4 to $4.20 and increase you over year from $2.77 which is a 44 to 52% increase over 2023.
Speaker Change: With that, I'll now turn the call back over to Helen.
Thank you, Nicole. Our strong year-to-date performances are reflected in the execution of our strategy and the power of our durable high growth business model.
This resulted in a meaningful race in our expectations and our financial guidance for the year, resulting in impressive year over year growth and setting up for a strong start to 2025.
Speaker Change: We have multiple drivers that will support our continued growth, including an exciting series of launches that are just beginning or are syndicaments.
I'd like to close by recognizing and thanking the Haila Zain team and all of our collaborators who's continued dedication and performance has made this such a remarkable quarter and year. Operator, where I'd ready to open the call for questions.
Speaker Change: to
Thank you. The floor is open for questions. If you have doubt in and would like to ask a question, please press star one on your telephone, keep out to raise your hand and join the queue.
Speaker Change: If you would like to withdraw your questions simply press star one again.
If you're a call to call to ask me a question and our listening via let's be here on your device. Please pick up your handset to ensure that your phone is not on mute when asking you a question.
Your first question comes from the line of Vikram, pure hit of Morgan Stanley. Your line is open.
Hi everyone, thanks for taking our question. This is Morgan on for Bicram. So, one for us on the OcreVess and Desentric Recent launches. Although it's early, what's your current view on?
Subcue conversion for these products and how that could ramp in the coming quarters and what that may look like long-term honest study safe basis. Thank you.
Yes, thanks, Morgan. We'll start with Ocrivist. I think it's important to note there and Roast reiterated this on their course. They call this a week or so ago. They're going with the sub Q is not to immediately convert the IV to sub Qs. It's not a conversion strategy. It's very much a market growth strategy where they see the availability of sub Qtanas as allowing more treatment centers and more throughput of patients at the end-usings, and sweet community hospitals because of the much shorter treatment time with sub-ditenies and the easier approach to sub Q which doesn't require as much infrastructure. Indeed, they commented that they see the availability of sub Q will expand the Ocrivist.
Market by about $2 billion. So, initially for Ocrivists, feel forced, we very much focused on getting new prescribers, and helping those new prescribers set up and start using Ocrivists.
If I moved to Centric, I'll be speaking to Centric continues to perform well in its key tumor indications as an IV given over 30 to 60 minutes. Within that, there are patients who are receiving Centric as an example as monotherapy or for whom they are on a complex regimen where they want to have a shortened regimen. In that instance, there's going to very much be a field for focus to convert those patients from the IV to the step Q because of a much simpler regimen. So, we are going to see conversion focus with Centric. Market growth for Ocarvice. Roast is not given out.
and a number is as to where they see the conversion. Our approach has generally been to look at the success they had with her acceptance of Q and Europe which got to 60% share of volume and then to have a range around that depending on if it is the company driving for that sub Q conversion. So particularly for it to centric, I think about it in those terms.
Your next question comes from the line of Brendan Smith of TD Cowan. Your line is open.
Brendan Smith: Alright, great. Thanks so much for taking the question. I congratulate on the fall of the quarter.
One of the first asks for a piggyback in that last question about Oprah of its sub cue. You call it the language from Roche about that 2 billion.
Just to kind of better understand that I may be contextualized a bit. I mean, it consensus for PCLs around 9-10 billion there. That might suggest only about 20% share of this up queue.
Speaker Change: Is that maybe the right way to think about that or is just too billion really new to brand?
Aston, so be in addition to IV-disapp queues twitchers
Speaker Change: and then maybe just really quickly on the way for pipeline. Are you able to give us any sense of that what point we might learn about the additional rosh and two-guide drugs, whether target indication, it's like after phase two data, or something like that just trying to understand when we might start focusing more on that way. Thanks very much.
Yes, thanks, Brad, and then thanks for asking that question because I do think the way it roses have been talking about it has like people to be a little bit confused. So there's going to be a market expansion which is on top of the IV opportunity and so it is said 9 billion my view is this is going to take the total growth in the next several years to be 11 feet of the 9 billion will we strongly believe be converted when you think about what the difference is going to be for a patient instead of up to 3.5 hours to 5.5 hours and then in fusion sweet it's going to be 30 minutes and an impusence sweet.
and so there is also going to be that conversion of the IV to subcube. I think what you're going to see is it's going to be phase. The initial launch focus is on expanding the market. And over time we're going to see the conversion begin and grow as well. But when we're peering for rows, they very much want to highlight this is not just a cannibalization opportunity, so don't think about the same size it is today. The pie is going to get bigger and then it's also going to be the opportunity to convert that bigger pie to be more subcube sales.
Githam, on that date, they also made a comment on their call that they are seeing already the strategy at work in the U.S. obviously very recent launch in the U.S., but they're seeing that 80% of new starts on Ocarvus's newville are new to brand.
So very much supporting that approach they have where they don't want to cannibalize their IV cells, they want to further expand their opportunity while they also will be able to over time get that subcuponversion to.
With regard to the specific rose and two-guide products that are listed on our way for portfolio, unfortunately until the partners want to discuss exactly what those indications are and then their plans for them we are unable to discuss the any further. So, can't give any updates at this time.
Alright, thank you very much. Appreciate it.
Speaker Change: [inaudible]
Hi guys, thanks so much for taking the question and congrats on a solid quarter. Two for me, first question is any status update regarding your expectations for new collaboration deals to be made before the end of the year and I have a follow-up.
Speaker Change: Thank you for your time. Thank you. Thank you.
Speaker Change: Got it, got it. And my follow-up question is regarding MDAS. Considering that the MDAS licensees are non-exclusive and won't involve Halozyme support services or API supply, as you previously noted,
Speaker Change: How will licensees manage development and regulatory challenges that are typically supported in traditional Enhance partnerships, and how might this affect MDACE's adoption and commercial success compared to Enhance?
Yeah I will be clear and say we do expect that the vast majority of companies are going to want to and be able to work with Enhance and so as we think about where we're going to be focusing and our growth is going to come from it's going to be new partners and expanded partnerships related to Enhance but as we pointed out there may be instances where somebody is unable to or for some reason doesn't want to work with Enhance but they are utilizing our Modified Hyaluronidase IP. We are in that instance only going to grant them a license as you point out. Now we obviously don't have a Modified Hyaluronidase VP product substance so that company will have to do what we do.
Speaker Change: for the last ten years, which is identify how to develop a product, engage with the regulatory authorities, start developing that safety database we have to demonstrate the product is safe and effective, but we would not propose to help them because we are going to be continuing to support our current enhanced partners.
But we will license the IP because they're going to be using their M-Days, the modified hyaluronidase, for the same purpose as Enhance, and obviously that's where the value of our IP is being realized.
Speaker Change: Got it. Very helpful.
Your next question comes from line of Jason Butler of Citizens JMP. Your line is open.
Jason Butler: Hi. Thanks for taking the question. Just one on Vivkart Hydrolove and the prefilled syringe. Can you maybe just speak to the progress there with FDA and how your work with other collaborators or other products has inputted into this regulatory process? Thanks.
Yeah, thanks Jason. If you listened to the call today, as we did, our genics provided the update and just summarized that they are expecting a PDUFA action date that is going to be in April. We don't have any other information that we can share with regard to that, but we are excited that they are obviously progressing with that in studies that are ongoing, both in thyroid eye disease and other indications now.
Again, this really has been work that we have done, obviously, in providing the Enhance for that pre-filled syringe work, but I will say our GenX has been lead with regard to the actual mechanical work in that. We obviously continue to advise on the formulation of Enhance, and so we don't have any information other than that I can share, Jason.
Jason Butler: Okay, great. Thanks for taking the question.
Speaker Change: Your next question comes from the line of Corrine Johnson of Goldman Sachs. Your line is open.
Corrine Johnson: Hi, good afternoon, everybody. Mamie, could you expand a little bit on the primary drivers of that increase in royalty revenues? You mentioned the products that are driving it, but I'm curious if it was...
additional indications within DARS-Lex, etc., better than expected conversion on the key products, or anything else that you could kind of point to. And then could you also talk a little bit about where you stand on potential auto injector partnership deals? We haven't really seen anything yet. I'm curious.
If there's any additional work you're doing to kind of prove out that technology is safe.
So that is on a strong trajectory.
and the availability of sub-Q to really penetrate into earlier lines of therapy where patients tend to stay on therapy longer.
Speaker Change: And then on the autoinjector side.
Speaker Change: Oh, sorry, on the auto-injectors. I mentioned them on the call, Corrine. We are continuing in discussions both with the high-volume auto-injector and also small-volume auto-injector. Similarly to comments I made on the enhanced discussions, there just always is a process we go through as the companies go through their technical evaluation process and then their decision process. So, we're moving our way through those processes with those companies. And so, no updates on that today, but continuing to make progress and still remain very confident we're going to be signing and announcing deals.
Thank you for watching. Bye-bye.
Speaker Change: Thank you.
Speaker Change: Your next question comes from the line of Mitchell Kapoor of HC Wainwright. Your line is open.
Hey everyone, thanks for taking the question. Just wanted to know a little bit more about the MDASE platform opportunity. Can you just give a little context to how big or narrow of an opportunity this might be based on how many types of opportunities might be out there for this when you do have the enhanced platform and the eligible partners that were likely focused on that side of the business for the BD partnerships?
Licenses available to them. So we don't think this is in terms of the number of deals going to be like we do with Enhance and we're talking about new partners, you know, with the frequency of which we've done over the years, Mitch, but for anyone who is developing or thinking about developing a drug with a modified hyaluronidase, that's going to be the opportunity for us. It's an emerging field and so we haven't, we can't really comment on how many people we think will want to do that, but the great news is it's another growth driver for us if companies are developing modified hyaluronidase sub-Q drugs, copying what we have been doing with Enhance.
Speaker Change: Great, thank you for taking my question and congrats on the quarter.
Thank you.
Your next question comes from the line of Mohit Bansal of Wells Fargo. Your line is open.
Great. Thank you very much for taking my question. I have two questions. So, one is, how should we think about your guidance update philosophy going forward? Because I understand that you'll be providing guidance to 25 as next year rolls over, but
Speaker Change: your Enhanced Platform, I'm asking from the point of view of
your existing partners who have exclusive licensing with certain products, if it kind of infringes upon that...
What gives you comfort that your existing partners would be fine with that?
Speaker Change: Thank you.
Yes, I'll ask Nicole to comment on your question on the guidance and I'll talk about MDs.
Thanks for the question, Ojai. So from a guidance perspective today, we are focused on the third quarter results and the full year updated guidance, which we're really excited to raise for top line and bottom line for the full year. And you saw, we do republish our five year projections. Those are unchanged at the moment, but we continue to evaluate those in the new year. We'll give more line of sight and color into our updated expectations for 2025.
All right, and maybe I'll take a step back and just say, you know, we talked about all of the experiments that we did and the experiments that we did on the human hyaluronidase area and we came up with Enhance that we patented and that's a truncated human hyaluronidase. But we also did lots of experiments, thousands and thousands of experiments on different structures of hyaluronidases and we called those our modified hyaluronidase. So Enhance has got one structure, the modified hyaluronidases have a different structure from Enhance.
at www.helentorley.com.
Now, our Enhance partners do not need and are unlikely to want the MD's portfolio because they have Enhance, which does what it needs to do, which is this delivery of drugs, high volume rapid sub-Q delivery.
and have chosen or will choose to work in a modified hyaluronidase.
And what we wanted everyone to recognize is because of our pioneering work in this area, we have actually got an extensive patent portfolio that covers many modified hyaluronidases.
Speaker Change: And so for those companies, if they want to develop a modified hyaluronidase for doing the same thing as Enhance, which is the rapid large-volume sub-delivery, we wanted to make them aware that we are open and willing to license our patents that relate to the modified hyaluronidase.
So it's a different product, it's a different structure, but Halozyme was really the pioneer of making these new offerings that have enabled such an important advancement for patients.
So let me just check in and see, did that clarify for you the difference between these two?
Very helpful. Thank you very much, Helen and Nicole. Really appreciate it.
Speaker Change: Thank you.
Your next question comes from the line of Jessica Fye of J.P. Morgan. Your line is open.
Speaker Change: Hey guys, this is Nassan. I'm for Jessica Fy. Congratulations on a strong quarter. My question goes back to
You know, I think I've always thought about Enhance giving exclusive targets as a sort of
defensive for, how it's attractive for, and defensive for its partners. So for M-Days wouldn't it give sort of like a, you know, escape hatch if you will?
for competitors. And then secondly, I noticed that for the collaboration revenue guidance, the top range came down a little bit. Can you just talk about a little bit, like, what is driving that? Thank you.
Yep. So we'll, um, it's.
with regard to the situation where people couldn't work within hands and I think it's a great question and you're quite right because we do the exclusive target
If somebody was unable to work with us because we had already licensed an exclusive target, they might choose to work with a modified hyaluronidase.
Speaker Change: work and develop.
modified hyaluronidase sub-q enabled drug against that target. We are simply because we're not supporting them from a clinical development perspective and we're also not supplying the API.
We are simply making them aware that if they want to go down that path, we have got strong IP in that area that is available for license.
Speaker Change: And this is why as we have conversed and shared this approach with our current partners, we have really received no pushback or concerns that have been voiced on it, because we're not enabling and supporting the development of drugs that are doing anything against the exclusive license of Enhance.
Speaker Change: We are simply recognizing and seeking to create value for halozyme from our inventions that were done all those years ago related to the modified hyaluronidases.
Speaker Change: So I hope that that clarified that. And in terms of the guidance ranges, yes, we are where we sit today, we've got a line of sight to 130 to 150 million. We're continuing, as I mentioned earlier, to work hard to gain new deals and additional new nominations. But that was our best estimate based on where we are today for how the year is going to end. We certainly are going to be nicely above 130 in terms of collaborations. And so we're definitely fully in line with our original guidance. We just tightened the range a little.
Your last question comes from the line of David Rissinger of Lerink Partners. Your line is open.
David Rissinger: Thanks very much. So my key questions have been asked, so I just wanted to ask about product sales.
David Rissinger: So if you could just educate a little bit more, Helen, with respect to...
David Rissinger: why product sales are flattish in 2024, and then why they are expected to grow by 50% over the next four years. So I see your 2028 target for revenue is up about 50% from $300 million this year.
Speaker Change: to roughly $450,028,000. Thanks so much.
Tram Bui, Helen Torley, Nicole LaBrosse
With no further questions, this concludes our Q&A session, and this also concludes today's conference call. You may now disconnect.
Speaker Change: [music]