HALOZYME REPORTS SECOND QUARTER 2024 FINANCIAL AND OPERATING RESULTS
Total Revenue of
Royalty Revenue Increased 12% YOY to
Partner Approvals for Ocrevus® SC in
Maintain Recently Increased 2024 Financial Guidance: Total Revenue of
"Our strong financial results reflect another quarter of double-digit royalty revenue, EBITDA and earnings growth. We remain on track to deliver on our financial guidance for the full year that was recently raised following the issuance and validation of a new EU patent covering the ENHANZE rHuPH20 product. In the quarter, we also expanded ENHANZE into neurology treatment with Roche's EU and
Recent Partner Highlights:
- In July, 2024, Janssen announced the
U.S. Food and Drug Administration ("FDA") approved DARZALEX FASPRO® for an additional indication in newly diagnosed multiple myeloma patients who are eligible for autologous stem cell transplant in combination with bortezomib, lenalidomide, and dexamethasone. - In
July 2024 , argenx announced theNational Medical Products Administration ("NMPA") approved its Biologics License Application ("BLA") of efgartigimod subcutaneous ("SC") injection for generalized myasthenia gravis inChina . - In
July 2024 , Roche announced the approval of Ocrevus® (ocrelizumab) SC for the treatment of relapsing multiple sclerosis ("RMS") and primary progressive multiple sclerosis ("PPMS") by the Medicines and Healthcare products Regulatory Agency inGreat Britain . - In
July 2024 ,Acumen initiated a Phase 1 study of sabirnetug (ACU193) co-formulated with ENHANZE® for the treatment of early Alzheimer's disease, resulting in a$3.0 million milestone payment recognized inJune 2024 . - In
June 2024 , argenx announced the FDA approved VYVGART® Hytrulo with ENHANZE® for the treatment of chronic inflammatory demyelinating polyneuropathy ("CIDP"), and completed the regulatory submissions of VYVGART® SC for CIDP inJapan ,Europe , andChina during the second quarter of 2024. - In
June 2024 , Roche announced theEuropean Commission granted marketing authorization in theEuropean Union of Ocrevus ® (ocrelizumab) SC for the treatment of RMS and PPMS, marking our eighth approved partner product with ENHANZE®. - In
June 2024 , Takeda announced thatHealth Canada approved HyQvia as a replacement therapy for primary humoral immunodeficiency and a secondary humoral immunodeficiency in pediatric patients two years of age and older. - In
June 2024 ,Bristol Myers Squibb ("BMS") announced theEuropean Medicines Agency ("EMA") validated its Extension Application for the SC formulation of Opdivo (nivolumab) co-formulated with ENHANZE®, resulting in a$7.0 million milestone payment. - In
June 2024 , Janssen announced the submission of a BLA to the FDA for amivantamab SC co-formulated with ENHANZE® for the treatment of patients with epidermal growth factor receptor ("EGFR") mutated non-small cell lung cancer ("NSCLC"). - In
May 2024 , BMS announced the FDA accepted its BLA for the SC formulation of Opdivo® (nivolumab) co-formulated with ENHANZE®, resulting in a$15.0 million milestone payment. The FDA assigned an updated Prescription Drug User Fee Act ("PDUFA") goal date ofDecember 29, 2024 . - In
May 2024 , Janssen announced the submission of a marketing authorization application to the EMA for the SC formulation of RYBREVANT® (amivantamab) with ENHANZE® for the treatment of patients with EGFR mutated NSCLC. - In
April 2024 , Roche announced the FDA accepted its BLA submission of ocrelizumab SC with a PDUFA goal date ofSeptember 13, 2024 . - In
April 2024 , Roche's MabThera® SC was approved byChina's NMPA to treat diffuse large B-cell lymphoma.
Recent Corporate Highlights:
- In
June 2024 , we announced the issuance of a new European patent covering the ENHANZE® rHuPH20 product obtained from our ENHANZE® manufacturing methods that we provide to our licensees. The newly granted patent maintains the original royalty rate on sales of DARZALEX® SC in 37 European countries until expiration of the patent inMarch 2029 . - In
June 2024 , we completed the$250 million Accelerated Share Repurchase that was initiated in November of 2023, resulting in a total repurchase of 6.5 million shares at a price of$38.35 per share which concluded ourDecember 2021 share repurchase program resulting in a total of 19.1 million shares repurchased over the three-year period at an average price per share of$39.31 .
Second Quarter 2024 Financial Highlights:
- Revenue was
$231.4 million , compared to$221.0 million in the second quarter of 2023. The 5% year-over-year increase was primarily driven by royalty revenue growth and an increase in proprietary product sales, partially offset by lower milestone revenue. Revenue for the quarter included$124.9 million in royalties, an increase of 12% compared to$111.7 million in the second quarter of 2023, primarily attributable to increases in revenue of Phesgo®, the launch of VYVGART® Hytrulo and theU.S. launch of Teriparatide. DARZALEX® SC royalties were temporarily lowered inEurope between March and June prior to the issuance of the new European patent covering the ENHANZE® rHuPH20 product. - Cost of sales was
$39.6 million , compared to$50.1 million in the second quarter of 2023. The decrease was primarily due to lower device and bulk rHuPH20 sales, partially offset by higher proprietary product sales. - Amortization of intangibles expense remained flat at
$17.8 million , compared to the second quarter of 2023. - Research and development expense was
$21.0 million , compared to$19.7 million in the second quarter of 2023. The increase was primarily due to planned investments in ENHANZE® related to the development of our new high yield API manufacturing processes. - Selling, general and administrative expense was
$35.7 million , compared to$38.9 million in the second quarter of 2023. The decrease was primarily due to planned reductions in commercial marketing expense. - Operating income was
$117.2 million , compared to$94.5 million in the second quarter of 2023. - Net Income was
$93.2 million , compared to$74.8 million in the second quarter of 2023. - EBITDA and Adjusted EBITDA was
$137.0 million , compared to$115.1 million in the second quarter of 2023.1 - GAAP diluted earnings per share was
$0.72 , compared to$0.56 in the second quarter of 2023. Non-GAAP diluted earnings per share was$0.91 , compared to$0.74 in the second quarter of 2023.1 - Cash, cash equivalents and marketable securities were
$529.0 million onJune 30, 2024 , compared to$336.0 million onDecember 31, 2023 . The increase was primarily a result of cash generated from operations.
Financial Outlook for 2024
The Company is reiterating its financial guidance for 2024, which was increased on
- Total revenue of
$935 million to$1,015 million , representing growth of 13% to 22% over 2023 total revenue primarily driven by increases in royalty revenue, collaboration revenue and growth in product sales from XYOSTED®. Revenue from royalties of$520 million to$555 million , representing growth of 16% to 24% over 2023. - Adjusted EBITDA of
$555 million to$615 million , representing growth of 30% to 44% over 2023. - Non-GAAP diluted earnings per share of
$3.65 to$4.05 , representing growth of 32% to 46% over 2023. The Company's earnings per share guidance does not consider the impact of potential future share repurchases.
Table 1. 2024 Financial Guidance
|
|
|
Total Revenue |
|
|
Royalty Revenue |
|
|
Adjusted EBITDA |
|
|
Non-GAAP Diluted EPS |
|
|
Webcast and Conference Call
About
For more information visit www.halozyme.com and connect with us on LinkedIn and Twitter.
Note Regarding Use of Non-GAAP Financial Measures
In addition to disclosing financial measures prepared in accordance with
Safe Harbor Statement
In addition to historical information, the statements set forth in this press release include forward-looking statements including, without limitation, statements concerning the Company's financial performance (including the Company's financial outlook for 2024) and expectations for future growth, profitability, total revenue, royalty revenue, EBITDA, Adjusted EBITDA, non-GAAP diluted earnings-per-share and potential share repurchases under its share repurchase program. Forward-looking statements regarding the Company's ENHANZE® drug delivery technology may include the possible benefits and attributes of ENHANZE®, its potential application to aid in the dispersion and absorption of other injected therapeutic drugs and facilitating more rapid delivery and administration of higher volumes of injectable medications through subcutaneous delivery. Forward-looking statements regarding the Company's business may include potential growth and receipt of royalty and milestone payments driven by our partners' development and commercialization efforts, potential new clinical trial study starts and clinical data, regulatory submissions and product launches, the size and growth prospects of our partners' drug franchises, potential new or expanded collaborations and collaborative targets and regulatory review, PDUFA action dates and potential approvals of new partnered or proprietary products, and the potential timing of these events. These forward-looking statements are typically, but not always, identified through use of the words "expect," "believe," "enable," "may," "will," "could," "intends," "estimate," "anticipate," "plan," "predict," "probable," "potential," "possible," "should," "continue," and other words of similar meaning and involve risk and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Actual results could differ materially from the expectations contained in these forward-looking statements as a result of several factors, including unexpected levels of revenues, expenditures and costs, unexpected delays in the execution of the Company's share repurchase program, unexpected results or delays in the growth of the Company's business, or in the development, regulatory review or commercialization of the Company's partnered or proprietary products, regulatory approval requirements, unexpected adverse events or patient outcomes and competitive conditions. These and other factors that may result in differences are discussed in greater detail in the Company's most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q filed with the
Contacts:
Tram Bui
VP, Investor Relations and Corporate Communications
609-359-3016
tbui@halozyme.com
Teneo
212-886-9356
samantha.gaspar@teneo.com
Footnotes:
- Reconciliations between GAAP reported and non-GAAP financial information for actual results are provided at the end.
Condensed Consolidated Statements of Operations (Unaudited) (In thousands, except per share amounts) |
||||||||
|
||||||||
|
|
Three Months Ended |
|
Six Months Ended |
||||
|
|
2024 |
|
2023 |
|
2024 |
|
2023 |
Revenues |
|
|
|
|
|
|
|
|
Royalties |
|
|
|
|
|
|
|
|
Product sales, net |
|
78,886 |
|
73,889 |
|
137,469 |
|
134,683 |
Revenues under collaborative agreements |
|
27,549 |
|
35,409 |
|
44,252 |
|
37,118 |
Total revenues |
|
231,353 |
|
221,038 |
|
427,232 |
|
383,181 |
Operating expenses |
|
|
|
|
|
|
|
|
Cost of sales |
|
39,607 |
|
50,070 |
|
67,936 |
|
85,240 |
Amortization of intangibles |
|
17,762 |
|
17,835 |
|
35,525 |
|
35,670 |
Research and development |
|
21,038 |
|
19,727 |
|
40,149 |
|
37,706 |
Selling, general and administrative |
|
35,711 |
|
38,948 |
|
70,845 |
|
76,305 |
Total operating expenses |
|
114,118 |
|
126,580 |
|
214,455 |
|
234,921 |
Operating income |
|
117,235 |
|
94,458 |
|
212,777 |
|
148,260 |
Other income (expense) |
|
|
|
|
|
|
|
|
Investment and other income, net |
|
5,032 |
|
3,192 |
|
10,025 |
|
6,171 |
Interest expense |
|
(4,524) |
|
(4,494) |
|
(9,031) |
|
(9,037) |
Net income before income taxes |
|
117,743 |
|
93,156 |
|
213,771 |
|
145,394 |
Income tax expense |
|
24,498 |
|
18,402 |
|
43,703 |
|
31,025 |
Net income |
|
$ 93,245 |
|
$ 74,754 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share |
|
|
|
|
|
|
|
|
Basic |
|
$ 0.73 |
|
$ 0.57 |
|
$ 1.34 |
|
$ 0.86 |
Diluted |
|
$ 0.72 |
|
$ 0.56 |
|
$ 1.32 |
|
$ 0.84 |
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding |
|
|
|
|
|
|
|
|
Basic |
|
127,116 |
|
131,730 |
|
127,029 |
|
133,369 |
Diluted |
|
129,222 |
|
133,543 |
|
129,097 |
|
135,758 |
Condensed Consolidated Balance Sheets (Unaudited) (In thousands) |
||||
|
||||
|
|
|
|
|
ASSETS |
|
|
|
|
Current assets |
|
|
|
|
Cash and cash equivalents |
|
$ 187,864 |
|
$ 118,370 |
Marketable securities, available-for-sale |
|
341,166 |
|
217,630 |
Accounts receivable, net and contract assets |
|
214,524 |
|
234,210 |
Inventories, net |
|
159,312 |
|
127,601 |
Prepaid expenses and other current assets |
|
84,931 |
|
48,613 |
Total current assets |
|
987,797 |
|
746,424 |
Property and equipment, net |
|
75,000 |
|
74,944 |
Prepaid expenses and other assets |
|
52,481 |
|
17,816 |
|
|
416,821 |
|
416,821 |
Intangible assets, net |
|
437,354 |
|
472,879 |
Deferred tax assets, net |
|
— |
|
4,386 |
Total assets |
|
$ 1,969,453 |
|
$ 1,733,270 |
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
Current liabilities |
|
|
|
|
Accounts payable |
|
$ 15,430 |
|
$ 11,816 |
Accrued expenses |
|
117,930 |
|
100,678 |
Total current liabilities |
|
133,360 |
|
112,494 |
Long-term debt, net |
|
1,502,515 |
|
1,499,248 |
Other long-term liabilities |
|
30,507 |
|
37,720 |
Deferred tax liabilities, net |
|
13,647 |
|
— |
Total liabilities |
|
1,680,029 |
|
1,649,462 |
|
|
|
|
|
Stockholders' equity |
|
|
|
|
Common stock |
|
127 |
|
127 |
Additional paid-in capital |
|
30,747 |
|
2,409 |
Accumulated other comprehensive loss |
|
(2,068) |
|
(9,278) |
Retained earnings |
|
260,618 |
|
90,550 |
Total stockholders' equity |
|
289,424 |
|
83,808 |
Total liabilities and stockholders' equity |
|
$ 1,969,453 |
|
$ 1,733,270 |
GAAP to Non-GAAP Reconciliations EBITDA (Unaudited) (In thousands) |
||||
|
||||
|
|
Three Months Ended |
||
|
|
2024 |
|
2023 |
GAAP Net Income |
|
$ 93,245 |
|
$ 74,754 |
Adjustments |
|
|
|
|
Investment and other income, net |
|
(5,568) |
|
(3,192) |
Interest expense |
|
4,524 |
|
4,494 |
Income tax expense |
|
24,498 |
|
18,402 |
Depreciation and amortization |
|
20,331 |
|
20,628 |
EBITDA |
|
137,030 |
|
115,086 |
Adjustments |
|
— |
|
— |
Adjusted EBITDA |
|
$ 137,030 |
|
$ 115,086 |
|
|
|
|
|
GAAP to Non-GAAP Reconciliations Diluted EPS (Unaudited) (In thousands, except per share amounts) |
|||||
|
|||||
|
|
Three Months Ended |
|
||
|
|
2024 |
|
2023 |
|
GAAP Diluted EPS |
|
$ 0.72 |
|
$ 0.56 |
|
Adjustments |
|
|
|
|
|
Share-based compensation |
|
0.07 |
|
0.07 |
|
Amortization of debt discount |
|
0.01 |
|
0.01 |
|
Amortization of intangible assets |
|
0.14 |
|
0.13 |
|
Amortization of inventory step-up at fair value(1) |
|
— |
|
0.01 |
|
Income tax effect of above adjustments(2) |
|
(0.04) |
|
(0.05) |
|
Non-GAAP Diluted EPS |
|
$ 0.91 |
|
$ 0.74 |
|
|
|
|
|
|
|
GAAP & Non-GAAP Diluted Shares |
|
129,222 |
|
133,543 |
|
|
|
Dollar amounts, as presented, are rounded. Consequently, totals may not add up. |
|
|
|
(1) |
Amount relates to amortization of the inventory step-up associated with purchase accounting for the Antares acquisition. |
(2) |
Adjustments relate to taxes for the reconciling items, as well as excess benefits or tax deficiencies from stock-based compensation, and the quarterly impact of other discrete items. |
View original content to download multimedia:https://www.prnewswire.com/news-releases/halozyme-reports-second-quarter-2024-financial-and-operating-results-302215808.html
SOURCE