Halozyme Therapeutics (HALO) DEF 14A Definitive proxy

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934

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Halozyme Therapeutics, Inc.

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March 31, 2006

Dear Stockholder:

      This year’s annual meeting of stockholders will be held on Thursday, May 4, 2006, at 9:00 a.m. local time, in the Dana Point room at the San Diego Marriott Hotel, 11966 El Camino Real, San Diego 92130. You are cordially invited to attend.

      The Notice of Annual Meeting of Stockholders and a Proxy Statement, which describes the formal business to be conducted at the meeting, follow this letter.

      It is important that you use this opportunity to take part in the affairs of Halozyme Therapeutics, Inc. by voting on the business to come before this meeting. After reading the Proxy Statement, please promptly mark, sign, date and return the enclosed proxy card in the prepaid envelope to assure that your shares will be represented. Regardless of the number of shares you own, your careful consideration of, and vote on, the matters before our stockholders is important.

      A copy of Halozyme’s Annual Report to Stockholders is also enclosed for your information. At the annual meeting we will review Halozyme’s activities over the past year and our plans for the future. The Board of Directors and management look forward to seeing you at the annual meeting.

Sincerely yours,

Jonathan E. Lim, M.D.

President and Chief Executive Officer

TABLE OF CONTENTS

11588 Sorrento Valley Road, Suite 17

San Diego, California 92121

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

To Be Held May 4, 2006

TO OUR STOCKHOLDERS:

      Notice is hereby given that the annual meeting of the stockholders of Halozyme Therapeutics, Inc., a Nevada corporation, will be held on May 4, 2006, at 9:00 a.m. local time, in the Dana Point room at the San Diego Marriott Hotel located at 11966 El Camino Real, San Diego 92130, for the following purposes:

      1. To elect two Class II directors.

      2. To approve an amendment to our Amended and Restated Articles of Incorporation to increase the number of authorized shares of Common Stock from 100,000,000 to 150,000,000 and to eliminate references to former directors.

      3. To consider a proposal to approve our 2005 Outside Directors’ Plan and to reserve an aggregate of 500,000 shares of our Common Stock for issuance under this plan.

      4. To consider a proposal to approve our 2006 Stock Plan and to reserve an aggregate of 2,000,000 shares of our Common Stock for issuance under this plan.

      5. To approve any adjournments of the meeting to another time or place, if necessary in the judgment of the proxy holders, for the purpose of soliciting additional proxies in favor of any of the foregoing proposals.

      6. To transact such other business as may properly come before the meeting or any adjournment or postponement thereof.

      Stockholders of record at the close of business on March 31, 2006 are entitled to notice of, and to vote at, this meeting and any adjournment or postponement.

David A. Ramsay

Chief Financial Officer and Secretary

San Diego, California

March 31, 2006

IMPORTANT: Please fill in, date, sign and promptly mail the enclosed proxy card in the accompanying postage-paid envelope to assure that your shares are represented at the meeting. If you attend the meeting, you may choose to vote in person even if you have previously sent in your proxy card.

PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS

      The accompanying proxy is solicited by the Board of Directors of Halozyme Therapeutics, Inc., a Nevada corporation, for use at its annual meeting of stockholders to be held on May 4, 2006, or any adjournment or postponement thereof, for the purposes set forth in the accompanying Notice of Annual Meeting of Stockholders. This Proxy Statement and the enclosed proxy are being mailed to stockholders on or about March 31, 2006.

HISTORICAL NOTE

      Halozyme Therapeutics, Inc. is the product of the March 11, 2004, merger between DeliaTroph Pharmaceuticals, Inc. (“DeliaTroph”), a private biopharmaceutical company, and Global Yacht Services, Inc. (“Global”), a publicly traded yacht chartering and sales company. In the merger, Global issued Common Stock to the former shareholders of DeliaTroph in exchange for all of their interests in DeliaTroph. Although Global conducted limited operations prior to the merger and was the parent entity of DeliaTroph following the merger, the former shareholders of DeliaTroph held approximately 90% of the outstanding voting interest in the combined enterprise immediately after the merger. DeliaTroph’s management and Board of Directors assumed operational control of Global immediately following the merger and Global changed its name to Halozyme Therapeutics, Inc. The historical operations of Global ceased in connection with the merger and the historical operations of DeliaTroph continued. The merger has been treated as a re-capitalization of DeliaTroph for accounting purposes and the historical and financial information presented here and in our Annual Report reflects the pre-merger activities of DeliaTroph and does not include information relating to the activities of Global prior to the merger unless otherwise indicated.

SOLICITATION AND VOTING

     Voting Securities. Only stockholders of record as of the close of business on March 31, 2006, will be entitled to vote at the meeting and any adjournment thereof. As of that time, we had approximately 61.3 million shares of Common Stock outstanding, all of which are entitled to vote with respect to all matters to be acted upon at the annual meeting. Each stockholder of record as of that date is entitled to one vote for each share of Common Stock held by him or her. Our Bylaws provide that a majority of all of the shares of the stock entitled to vote, whether present in person or represented by proxy, shall constitute a quorum for the transaction of business at the meeting. Votes for and against, abstentions and “broker non-votes” will each be counted as present for purposes of determining the presence of a quorum.

     Broker Non-Votes. A broker non-vote occurs when a broker submits a proxy card with respect to shares held in a fiduciary capacity (typically referred to as being held in “street name”) but declines to vote on a particular matter because the broker has not received voting instructions from the beneficial owner. Under the rules that govern brokers who are voting with respect to shares held in street name, brokers have the discretion to vote such shares on routine matters, but not on non-routine matters. Routine matters include the election of directors, increases in authorized common stock for general corporate purposes and ratification of auditors. Non-routine matters include adoptions of, and amendments to, stock plans.

     Solicitation of Proxies. We will bear the entire cost of soliciting proxies. In addition to soliciting stockholders by mail through our employees, we will request banks, brokers and other custodians, nominees and fiduciaries to solicit customers for whom they hold our stock and will reimburse them for their reasonable,out-of-pocket costs. We may use the services of our officers, directors and others to solicit proxies, personally or by telephone, without additional compensation. In addition, we may retain a proxy solicitation firm or other third party to assist us in collecting or soliciting proxies from our stockholders, although we do not currently plan on retaining such a proxy solicitor.

     Voting of Proxies. All valid proxies received before the meeting will be exercised. All shares represented by a proxy will be voted, and where a proxy specifies a stockholder’s choice with respect to any matter to be acted upon, the shares will be voted in accordance with that specification. If no choice is indicated on the proxy, the shares will be voted in favor of the proposal. A stockholder giving a proxy has the power to revoke his or her proxy at any time before it is exercised by delivering to the Secretary of Halozyme a written instrument revoking the proxy or a duly executed proxy with a later date, or by attending the meeting and voting in person.

PROPOSAL NO. 1

ELECTION OF DIRECTORS

      We have a classified Board of Directors that consists of two Class I directors, two Class II directors and two Class III directors. Our directors are elected for a term of three years, with one class of directors up for election every year. In connection with the 2006 annual meeting of stockholders we will be electing two Class II directors, while two Class III directors will be elected at the 2007 annual meeting of stockholders and two Class I directors will be elected at the 2008 annual meeting of stockholders. Once elected, directors serve until their respective successors are duly elected and qualified.

      Management’s Class II nominees for election by the stockholders are John S. Patton and Steven T. Thornton. Both Dr. Patton and Mr. Thornton are current members of our Board of Directors and, if elected, they will serve as directors until our annual meeting of stockholders in 2009 and until their successors are elected and qualified. If either nominee declines to serve or becomes unavailable for any reason, or if a vacancy occurs before the election (although we know of no reason to anticipate that this will occur), the proxies may be voted for such substitute nominees as we may designate.

      If a quorum is present and voting, the two nominees for Class II directors receiving the highest number of votes will be elected as the Class II directors. Abstentions and broker non-votes have no effect on the vote.

     The Board of Directors recommends a vote “FOR” each of the nominees named above.

      The following table sets forth, for our current directors, including the Class II nominees to be elected at this meeting, information with respect to their ages and background:

				Director
Name	Principal Occupation	Age		Since
Class II directors nominated for election at the 2006 annual meeting of stockholders:
John S. Patton, Ph.D.	Chief Scientific Officer, Nektar Therapeutics		58		2000
Steven T. Thornton	President, SkyePharma, Inc.		48		2005
Class I directors whose terms expire at the 2008 annual meeting of stockholders:
Kenneth J. Kelley	Managing Director, K2 Bioventures		47		2004
Jonathan E. Lim, M.D.	Chief Executive Officer, Halozyme		34		2003
Class III directors whose terms expire at the 2007 annual meeting of stockholders:
Robert L. Engler, M.D.	Professor Emeritus, University of California, San Diego		61		2004
Gregory I. Frost, Ph.D	Chief Scientific Officer, Halozyme		34		1999

Nominees for Election at this Meeting

     John S. Patton, Ph.D. Dr. Patton is co-Founder and Vice President, Research of Nektar Therapeutics (Nasdaq-NKTR) (formerly Inhale Therapeutic Systems) and has served as Chief Scientific Officer since November 2001 and as a director since July 1990. He is an expert in the delivery of peptides and proteins. Before co-founding Inhale, Dr. Patton led the drug delivery group at Genentech, Inc., where he demonstrated the feasibility of systemic delivery of large molecules through the lungs. Prior to joining Genentech, Inc., he was a tenured professor at the University of Georgia. He has published a wide range of articles and has presented his work in national and international arenas. Dr. Patton received his Ph.D. in Biology from the University of California, San Diego, and held post-doctoral positions in biomedicine at Harvard Medical School and the University of Lund in Sweden. Dr. Patton also chairs our Scientific and Clinical Advisory Board.

     Steven T. Thornton. Mr. Thornton has been President of SkyePharma, Inc. since 2002. SkyePharma develops and manufactures injectable, sustained-release therapeutic products. Prior to SkyePharma, Mr. Thornton was an Executive Vice President of Business Development at Elan from 1999 to 2002. Mr. Thornton has been involved in a significant number of business development activities and partnerships

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across the industry, with both major pharmaceutical and emerging biotechnology companies. Mr. Thornton represented Elan on a number of joint venture boards with biotechnology partners, giving him insight into the workings of relatively early company organizations. He is highly experienced in the areas of in- and out-licensing of products and has been involved in a variety ofstart-up operations, joint ventures and acquisitions. Mr. Thornton has also held senior executive positions at Eli Lilly and Bayer. Mr. Thornton earned his B.A. in Applied Social Sciences from Lancaster University UK. Mr. Thornton is the chairman of our Compensation Committee.

Directors Elected to Continue in Office Until the 2007 Annual Meeting

     Robert L. Engler, M.D. Dr. Engler spent his career as a Cardiologist at the Veterans Affairs Medical Center and the University of California, San Diego, where he retired as Professor Emeritus in 2001. While at the Veterans Affairs Medical Center, Dr. Engler served as Associate Chief of Staff and Chief of Research and was an attending physician, in addition to running an active cardiovascular research laboratory. His research and clinical work led to the founding of two successful biotechnology companies: Gensia, Inc., and Collateral Therapeutics, Inc. He also founded and served as President of the Veterans Medical Research Foundation. Dr. Engler graduated from Georgetown Medical School. Dr. Engler is the chairman of our Nominating and Governance Committee.

     Gregory I. Frost, Ph.D., Vice President & Chief Scientific Officer and Director. Dr. Frost co-founded Halozyme in 1999 and has spent more than twelve years researching the hyaluronidase family of enzymes. Previously he was a Senior Research Scientist at the Sidney Kimmel Cancer Center (SKCC), where he focused much of his work developing the hyaluronidase technology. Prior to SKCC, his research in the Department of Pathology at the University of California, San Francisco, led directly to the purification, cloning, and characterization of human hyaluronidase gene family, and the discovery of several metabolic disorders. He has authored multiple scientific peer-reviewed and invited articles in the Hyaluronidase field and is an inventor on several key patents. Dr. Frost’s prior experience includes serving as a scientific consultant to a number of biopharmaceutical companies, including Q-Med (SE), Biophausia AB (SE), and Active Biotech (SE). Dr. Frost is registered to practice before the US Patent Trademark Office, and earned his BA in biochemistry and molecular biology from the University of California, Santa Cruz and his Ph.D. in the department of Pathology at the University of California, San Francisco, where he was an ARCS-Scholar.

Directors Elected to Continue in Office Until the 2008 Annual Meeting

     Kenneth J. Kelley. Mr. Kelley brings over 25 years of entrepreneurial, venture capital, operational and technical biotechnology experience to Halozyme. Mr. Kelley has been the managing director of K2 Bioventures, a biomedical startup consulting company, since July 2004. From April 2002 through June 2004, Mr. Kelley was a General Partner at Latterell Venture Partners, where he made investments in early stage biotechnology and medical device startups. Mr. Kelley founded IntraBiotics Pharmaceuticals in January 1994 and over eight years served as CEO, Director and Chairman. Earlier, Mr. Kelley was an Associate at Institutional Venture Partners (IVP), where he participated in the financing of twenty biotech and medical companies, fifteen of which became public companies. Prior to IVP, he was a consultant for McKinsey & Company and a scientist at Integrated Genetics (acquired by Genzyme). Mr. Kelley earned an M.B.A. from Stanford University and a B.A. in biochemical sciences from Harvard University. Mr. Kelley is the chairman of the Board of Directors as well as our Audit Committee. Mr. Kelley also serves on the Compensation Committee and the Nominating and Governance Committee.

     Jonathan E. Lim, M.D. Dr. Lim joined Halozyme in 2003 and has served as Halozyme’s President and Chief Executive Officer since that time. From 2001 to 2003, Dr. Lim was a management consultant at McKinsey & Company, where he specialized in the health care industry, serving a wide range ofstart-ups to Fortune 500 companies in the biopharmaceutical, medical products, and payor/provider segments. From 1999 to 2001, Dr. Lim was a recipient of a National Institutes of Health Postdoctoral Fellowship, during which time he conducted clinical outcomes research at Harvard Medical School. He has published articles in peer-reviewed medical journals such as the Annals of Surgery and the Journal of Refractive Surgery. Dr. Lim’s prior experience also includes two years of clinical training in general surgery at the New York Hospital-

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Cornell Medical Center and Memorial Sloan-Kettering Cancer Center; Founder and President of a health care software company; FoundingEditor-in-Chief of the McGill Journal of Medicine; and basic science and clinical research at the Salk Institute for Biological Studies and Massachusetts Eye and Ear Infirmary. Dr. Lim is currently a California-licensed physician and was a member of the strategic planning committee of the American Medical Association from 2002 to 2005. He earned his B.S., with honors, and M.S. degrees in molecular biology from Stanford University, his M.D. degree from McGill University, and his M.P.H. degree in health care management from Harvard University.

      The Board of Directors has determined that, other than Drs. Lim and Frost, each of the members of the Board of Directors is an independent director for purposes of the listing requirements of the American Stock Exchange.

Board Meetings and Committees

      The Board of Directors held eight meetings during the fiscal year ended December 31, 2005. The Board of Directors has an Audit Committee, a Compensation Committee and a Nominating and Governance Committee. During the last fiscal year, no director other than Steven T. Thornton attended fewer than 75% of the total number of meetings of the Board and all of the committees of the Board on which such director served during that period. Mr. Thornton joined the Board in June of 2005 and was unable to attend one Board meeting that was scheduled prior to his joining the Board as well as one special meeting of the Board.

     Audit Committee. The members of the Audit Committee are Kenneth J. Kelley (Chairman), Steven T. Thornton and Robert L. Engler. Each of the members of the Audit Committee satisfy the independence requirements established by the rules of the American Stock Exchange. Mr. Kelley is an audit committee financial expert, as defined in the rules of the Securities and Exchange Commission. The primary purpose of the Audit Committee is to oversee our accounting and financial reporting processes and the function of the Audit Committee includes retaining our independent auditors, reviewing their independence, reviewing and approving the planned scope of our annual audit, reviewing and approving any fee arrangements with our auditors, overseeing their audit work, reviewing and pre-approving any non-audit services that may be performed by them, reviewing the adequacy of accounting and financial controls, reviewing our critical accounting policies and reviewing and approving any related party transactions. The Audit Committee held six meetings during the fiscal year ended December 31, 2005.

     Compensation Committee. The members of the Compensation Committee are Steven T. Thornton (Chairman), Robert L. Engler, Kenneth J. Kelley and John S. Patton. Each of the members of the Compensation Committee satisfy the independence requirements established by the rules of the American Stock Exchange. The primary purpose of the Compensation Committee is to discharge the Board’s responsibilities relating to compensation and benefits of our executive officers. The Compensation Committee recommends the salary and bonus earned by the Chief Executive Officer, reviews and approves salary and bonus levels for other executive officers, approves stock option grants to executive officers and other employees and approves all employment and severance agreements. The Compensation Committee held six meetings during the fiscal year ended December 31, 2005.

     Nominating and Governance Committee. The members of the Nominating and Governance Committee are Robert L. Engler (Chairman), Kenneth J. Kelley and Steven T. Thornton. Each of the members of the Nominating and Governance Committee satisfy the independence requirements established by the rules of the American Stock Exchange. The primary responsibilities of the Nominating and Governance Committee are to (i) identify individuals qualified to become Board members; (ii) select, or recommend to the Board, director nominees for each election of directors; (iii) develop and recommend to the Board criteria for selecting qualified director candidates; (iv) consider committee member qualifications, appointment and removal; (v) recommend applicable corporate governance principles, codes of conduct and compliance mechanisms, and (vi) provide oversight in the evaluation of the Board and each committee. The Nominating and Governance Committee held six meetings during the fiscal year ended December 31, 2005.

      The Nominating and Governance Committee’s goal is to assemble a Board of Directors that brings a variety of perspectives and skills derived from high quality business and professional experience. There are no

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stated minimum criteria for director nominees, but the Nominating and Governance Committee believes that at least one member of the Board meet the criteria for an “audit committee financial expert” as defined by SEC rules, and that a majority of the members of the Board meet the definition of “independent director” under the rules of the American Stock Exchange. The Nominating and Governance Committee also believes it appropriate for certain key members of management to participate as members of the Board.

      When considering whether to recommend any candidate for inclusion in the Board’s slate of recommended director nominees, including candidates recommended by our stockholders, the Nominating and Governance Committee will review the candidate’s integrity, business acumen, age, experience, commitment, diligence, conflicts of interest, existing time commitments and the ability to act in the interests of all stockholders. Once a potential qualified candidate is identified, one or more members of the Nominating and Governance Committee will interview that candidate. The committee may also ask the candidate to meet with non-committee members of the Board and/or members of management and, if the committee believes a candidate would be a valuable addition to the Board, it will recommend that candidate to the full Board.

      Pursuant to the terms of its charter, the Nominating and Governance Committee will consider qualified director candidates suggested by our stockholders. Stockholders may recommend individuals for the Nominating and Governance Committee to consider as potential director candidates by submitting the candidate’s name, contact information and biographical information in writing to the “Halozyme Nominating and Governance Committee” c/o Corporate Secretary, 11588 Sorrento Valley Road, Suite 17, San Diego, California 92121. The biographical information and background materials will be forwarded to the Nominating and Governance Committee for its review and consideration. The committee’s review of candidates identified by our stockholders is essentially identical to the review process for candidates identified by the committee. The Nominating and Governance Committee will review periodically whether a more formal policy regarding stockholder nominations should be adopted. In addition to the process discussed above regarding the consideration of the Nominating and Governance Committee of candidates suggested by our stockholders, our Bylaws contain provisions that address the process by which a stockholder may nominate an individual to stand for election to our Board at our annual meeting of stockholders.

Communications with Directors

      Any stockholder who desires to contact any members of our Board of Directors may do so by writing to: Board of Directors, c/o Corporate Secretary, 11588 Sorrento Valley Road, Suite 17, San Diego, California 92121. Communications received in writing are distributed to the Chairman of the Board or the other members of the Board as appropriate depending on the facts and circumstances outlined in the communication received. Alternatively, any stockholder who desires to contact an independent member of our Board of Directors directly, may contact the Chairman of our Board of Directors, Kenneth J. Kelley, electronically by sending an email to the following address: kkelley@halozyme.com.

Director Attendance at Annual Meetings

      Although we do not have a formal policy regarding attendance by members of the Board at our annual meeting of stockholders, we encourage directors to attend. Drs. Lim, Frost and Engler attended our annual meeting of stockholders in 2005. Mr. Thornton was not a member of the Board at the time of this meeting.

Committee Charters

      The Board has adopted a charter for each of the committees described above and links to these charters are available on our website,www.halozyme.com.

Code of Ethics

      The Board has adopted a Code of Conduct and Ethics that applies to all of our employees, officers and directors. A copy of our Code of Conduct and Ethics is currently available on our website,www.halozyme.com. Please note that the information on our website is not incorporated by reference in this Proxy Statement.

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PROPOSAL NO. 2

APPROVAL OF AMENDMENTS TO THE AMENDED AND RESTATED ARTICLES OF INCORPORATION TO INCREASE THE AUTHORIZED NUMBER OF SHARES OF COMMON STOCK FROM 100,000,000 TO 150,000,000 AND TO ELIMINATE OUTDATED REFERENCES TO FORMER DIRECTORS

      The Board has adopted, subject to stockholder approval, amendments to our Amended and Restated Articles of Incorporation (the “Articles”) to increase our authorized number of shares of Common Stock from 100,000,000 to 150,000,000 and to remove outdated references to individuals that no longer serve on the Board.

Background of Proposal

      Under Nevada law, we may only issue shares of Common Stock to the extent such shares have been authorized for issuance under the Articles. The Articles currently authorize the issuance of up to 100,000,000 shares of Common Stock, each having a par value of one-tenth of one cent ($0.001). However, as of March 1, 2006, approximately 60.3 million shares of Common Stock were issued and outstanding and approximately 20.0 million unissued shares were reserved for issuance (i) under our equity compensation plans and (ii) upon exercise of outstanding warrants, leaving approximately 19.7 million shares of Common Stock unissued and unreserved. In order to ensure sufficient shares of Common Stock will be available for issuance by us, the Board of Directors has approved, subject to stockholder approval, amendments to our Articles to increase the number of shares of such Common Stock authorized for issuance from 100,000,000 to 150,000,000.

      The Articles also currently list the five members of the Board as of March 11, 2004 (the date that the Articles were filed). The composition and size of the Board has changed since that time and the Board has approved, subject to stockholder approval, amendments to our Articles that remove references to specific Board size as well as the names of particular individuals on the Board.

Purpose and Effect of the Amendments

      The principal purpose of the proposed amendment to the Articles is to authorize additional shares of Common Stock, which will be available in the event the Board determines that it is necessary or appropriate to permit future stock splits in the form of stock dividends, to raise additional capital through the sale of equity securities, to acquire another company or its assets, to establish strategic relationships with corporate partners, to provide equity incentives to employees and officers or for other corporate purposes. The availability of additional shares of Common Stock is particularly important in the event that the Board needs to undertake any of the foregoing actions on an expedited basis and thus to avoid the time and expense of seeking stockholder approval in connection with the contemplated issuance of Common Stock. We do not currently have any plan, commitment, arrangement, understanding or agreement, either oral or written, regarding the issuance of these additional shares of Common Stock. If the amendments are approved by the stockholders, the Board does not intend to solicit further stockholder approval prior to the issuance of any additional shares of Common Stock, except as may be required by applicable law.

      The increase in authorized common stock will not have any immediate effect on the rights of existing stockholders. However, the Board will have the authority to issue authorized Common Stock without requiring future stockholder approval of such issuances, except as may be required by applicable law. To the extent that additional authorized shares are issued in the future, they may decrease the existing stockholders’ percentage equity ownership and, depending on the price at which they are issued, could be dilutive to the existing stockholders. The holders of Common Stock have no preemptive rights and the Board has no plans to grant such rights with respect to any such shares.

      The increase in the authorized number of shares of Common Stock and the subsequent issuance of such shares could have the effect of delaying or preventing a change in control of Halozyme without further action by the stockholders. Shares of authorized and unissued Common Stock could, within the limits imposed by applicable law, be issued in one or more transactions which would make a change in control of Halozyme more difficult, and therefore less likely. Any such issuance of additional stock could have the effect of diluting

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the earnings per share and book value per share of outstanding shares of common stock and such additional shares could be used to dilute the stock ownership or voting rights of a person seeking to obtain control of Halozyme.

      The Board is not currently aware of any attempt to take over or acquire Halozyme. While it may be deemed to have potential anti-takeover effects, the proposed amendments to increase the authorized Common Stock are not prompted by any specific effort or takeover threat currently perceived by management.

      If this proposal is approved by the stockholders, the first paragraph of Article IV of the Articles will be amended to read in its entirety substantially as follows:

      “The Corporation is authorized to issue two classes of stock to be designated “Common Stock” and “Preferred Stock.” The total number of shares of Common Stock that the Corporation is authorized to issue is One Hundred Fifty Million (150,000,000) shares, with a par value of $0.001 per share. The total number of shares of Preferred Stock that the Corporation is authorized to issue is Twenty Million (20,000,000) shares, with a par value of $0.001 per share.”

      In addition, the Articles currently list the five Board members that were sitting on March 11, 2004 (the date that the Articles were filed with the Nevada Secretary of State). Since that time the size and composition of the Board has changed as certain directors left the Board and others were added. If this proposal is approved by the stockholders, Article V of the Articles will be amended to read in its entirety substantially as follows:

      “The number of Directors constituting the Board of Directors shall be determined pursuant to the Bylaws of the Corporation. Such Directors shall so serve until the successors thereto are elected and qualified pursuant to the Bylaws of the Corporation.”

      These proposed amendments to the Articles are set forth in Appendix A. The additional shares of Common Stock to be authorized pursuant to the proposed amendment will be of the same class of common stock as is currently authorized under the Articles. If approved, this proposal will become effective upon the filing of Amended and Restated Articles of Incorporation with the Secretary of State of the State of Nevada containing substantially these amendments, which Halozyme will do promptly after the annual meeting.

Required Vote and Board of Directors Recommendation

      Approval of this proposal requires the affirmative vote of the holders of a majority of the shares of our Common Stock outstanding on the Record Date. Abstentions and broker non-votes will be counted as present for purposes of determining if a quorum is present, but will have the same effect as a negative vote on the outcome of this proposal.

      The Board believes that the proposed amendments to the Articles are in the best interests of Halozyme and its stockholders for the reasons stated above.Therefore, the Board unanimously recommends a vote “FOR” amendments to our Amended and Restated Articles of Incorporation to increase the number of authorized shares of Common Stock from 100,000,000 to 150,000,000 and to eliminate references to former directors.

PROPOSAL NO. 3

APPROVAL OF THE HALOZYME THERAPEUTICS, INC.

2005 OUTSIDE DIRECTORS’ STOCK PLAN

      The Board of Directors adopted the Halozyme Therapeutics, Inc. 2005 Outside Director’s Stock Plan (the “Director Plan”), in June 2005.

      The Board believes that the Company must offer competitive compensation, including an equity incentive program, if it is to continue to successfully attract and retain the best possible directors. The Board expects that the Director Plan will be an important factor in attracting and retaining the high caliber directors essential

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to our success, in motivating such directors to strive to increase the value of the Company for its stockholders and in aligning the interest of the directors and the stockholders.

Summary of the Director Plan

      The following is a summary of the material terms of the Director Plan. It is qualified in its entirety by the specific language of the Director Plan, which is available to any stockholder upon request.

     General. The Director Plan provides to members of the Board of Directors who are not employees of the Company or of any subsidiary or parent of the Company (“Outside Directors”) the (i) automatic grant of nonstatutory stock options, and (ii) automatic grant of restricted stock. The Director Plan is intended to qualify as a “formula plan” within the meaning of Rule 16b-3 under the Securities Exchange Act of 1934.

     Authorized Shares. A maximum of 500,000 of the authorized but unissued or reacquired shares of our Common Stock may be issued under the Director Plan. If any award expires, lapses or otherwise terminates for any reason without having been exercised or settled in full, or if shares subject to forfeiture or repurchase are forfeited or repurchased by the Company, any such shares that are reacquired or subject to such a terminated award will again become available for issuance under the Director Plan. If shares are surrendered in satisfaction of tax obligations, such shares shall not be deemed to be issued under the Director Plan. Upon any stock dividend, stock split, reverse stock split, recapitalization or similar change in our capital structure, appropriate adjustments will be made to the shares subject to the Director Plan, to the terms applicable to any automatic grant of awards described below, and to all outstanding awards.

     Administration. The Director Plan is intended to operate automatically without discretionary administration. To the extent administration is necessary, it will be performed by the Board or a committee of the Board. (For purposes of this discussion, the term “Board” refers to either the Board of Directors or such committee.) The Director Plan will be administered in a manner intended to permit awards to be exempt from Section 16(b) of the Securities Exchange Act of 1934 in accordance with Rule 16b-3 thereunder. The Board will approve forms of award agreements for use under the Director Plan, determine the terms and conditions of awards consistent with the requirements of the Director Plan, and construe and interpret the terms of the Director Plan and awards granted under it. However, the Board has no discretion to select the Outside Directors who are granted awards under the Director Plan.

     Eligibility. Only directors of the Company who are Outside Directors at the time of grant are eligible to participate in the Director Plan. Currently, four Outside Directors are eligible for the Director Plan.

     Automatic Grant of Stock Options. Stock options will be granted automatically under the Director Plan. Each person who first becomes an Outside Director on or after the Director Plan’s adoption in June 2005 shall be granted on the date he or she becomes an Outside Director an option (an “Initial Option”) for ten thousand (10,000) shares of Common Stock. In addition, following stockholder approval of the Director Plan each Outside Director who has served on the Board for at least six (6) full months prior to an annual meeting of the stockholders shall be granted an Option (“Annual Option”) to purchase ten thousand (10,000) shares immediately following such annual meeting.

     Terms and Conditions of Stock Options. Each Initial Option and Annual Option granted under the Director Plan will be evidenced by a written agreement specifying the number of shares subject to the option and the other terms and conditions of the option, consistent with the provisions of the Director Plan. The per-share exercise price for each Option will be equal to the fair market value of a share of our Common Stock on the date of grant. Generally, the fair market value of the Common Stock is the closing price per share on the date of grant as quoted by the national or regional securities exchange or market system on which the Common Stock is listed. The closing price of our Common Stock as reported on the American Stock Exchange on March 16, 2006 was $3.39 per share.

      The Director Plan provides that the option exercise price may be paid in cash, by check, by tender or attestation of previously owned shares, by assignment of the proceeds of a sale with respect to some or all of the shares acquired upon the exercise or by any other legal means approved by the Board.

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      Subject to stockholder approval of the Director Plan, Initial Options will become vested and exercisable in full on the later of the date six (6) months from the grant date or the next annual meeting following the grant date. Annual Options will become vested and exercisable in full on the date immediately preceding the annual meeting following the grant date. Option vesting is subject to the Outside Director’s continuous service to the Company. Unless earlier terminated under the terms of the Director Plan or the option agreement, each option will remain exercisable for ten (10) years after the date of grant. An option may be transferred or assigned to the extent permitted by the Board and set forth in the option agreement.

     Automatic Grant of Restricted Stock. Awards of restricted stock will be granted automatically under the Director Plan. Initial Grants and Annual Grants of restricted stock covering fifteen thousand (15,000) shares each shall be granted on the same schedule and on the same basis as Initial Options and Annual Options.

     Terms and Conditions of Restricted Stock. Each award of restricted stock granted under the Director Plan will be evidenced by a written agreement specifying the number of shares subject to the award and the other terms and conditions of the award, consistent with the provisions of the Director Plan.

      Subject to stockholder approval of the Director Plan, Initial Grants of restricted stock vest in full on the first day the holder may trade Company Stock in compliance with the insider trading policy of the Company following the later of (a) the six month anniversary of the grant date, or (b) the first annual meeting of stockholders following the grant date. Annual Grants of restricted stock vest in full on the first day the holder may trade Company stock in compliance with the Company’s insider trading policy following the date immediately preceding the first annual meeting of stockholders following the grant date.

     Change in Control. If a change in control (as defined in the Director Plan) occurs, all stock options and restricted stock shall be 100% vested prior to the effective date of any change in control. As a result of such a change in control, the surviving, continuing, successor or purchasing corporation or parent corporation thereof may either assume all outstanding awards or substitute new awards having an equivalent value.

     Termination or Amendment. The Director Plan has a term of 10 years. The Director Plan shall continue in effect until the end of the term or until the earlier of its termination by the Board or the date on which all of the shares of Common Stock available for issuance under the Director Plan have been issued and all restrictions on such shares under the terms of the Director Plan have lapsed. The Board may terminate or amend the Director Plan at any time, provided that no amendment may be made without stockholder approval if the Board deems such approval necessary for compliance with any applicable tax or securities law or other regulatory requirements, including the requirements of any stock exchange or market system on which the Common Stock of the Company is then listed. No termination or amendment may affect any outstanding award unless expressly provided by the Board, and, in any event, may not adversely affect an outstanding award without the consent of the Outside Director unless necessary to comply with any applicable law, regulation or rule.

Summary of U.S. Federal Income Tax Consequences

      The following summary is intended only as a general guide to the U.S. federal income tax consequences of participation in the Director Plan and does not attempt to describe all possible federal or other tax consequences of such participation or tax consequences based on particular circumstances.

     Nonstatutory Stock Options. All stock options shall be nonstatutory stock options having no special tax status. An Outside Director generally recognizes no taxable income upon receipt of such an option. Upon exercising a nonstatutory stock option, the Outside Director normally recognizes ordinary income equal to the difference between the exercise price paid and the fair market value of the shares on the date when the option is exercised or such later date as the shares become vested and free of any restrictions on transfer (the later of such dates being referred to as the “determination date”). Upon the sale of stock acquired by the exercise of a nonstatutory stock option, any gain or loss, based on the difference between the sale price and the fair market value of the shares on the determination date, will be taxed as capital gain or loss. The Company generally should be entitled to a tax deduction equal to the amount of ordinary income recognized by the Outside

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Director as a result of the exercise of a nonstatutory stock option, except to the extent such deduction is limited by applicable provisions of the Internal Revenue Code.

     Restricted Stock. Acquisitions of restricted stock receive tax treatment that is similar to that of exercises of nonstatutory stock options. An Outside Director acquiring restricted stock normally recognizes ordinary income equal to the difference between the amount, if any, the Outside Director paid for the restricted stock and the fair market value of the shares on the determination date. The Outside Director may elect, pursuant to Section 83(b) of the Internal Revenue Code, to treat the acquisition date as the determination date by filing an election with the Internal Revenue Service. Upon the sale of restricted stock, any gain or loss, based on the difference between the sale price and the fair market value of the shares on the determination date, will be taxed as capital gain or loss. The Company generally should be entitled to a tax deduction equal to the amount of ordinary income recognized by the Outside Director as a result of the acquisition of restricted stock, except to the extent such deduction is limited by applicable provisions of the Internal Revenue Code.

New Plan Benefits

      Only Outside Directors are eligible to participate in the Director Plan. 40,000 shares of our Common Stock underlying the automatic grants of stock options and 75,000 shares of restricted stock will be received under the Director Plan during the 2006 fiscal year by the Outside Directors, assuming no new Outside Directors not currently anticipated join the Board.

Vote Required and Board of Directors Recommendation

      Approval of this proposal would require the affirmative vote of a majority of the votes cast affirmatively or negatively on the proposal at the annual meeting of stockholders, as well as the presence of a quorum representing a majority of all outstanding shares of common stock of the Company, either in person or by proxy. Abstentions and broker non-votes would be counted for purposes of determining the presence of a quorum but otherwise would not have any effect on the outcome of the proposal.

      The Board believes that the adoption of the Director Stock Plan is in the best interests of Halozyme and its stockholders for the reasons stated above.Therefore, the Board unanimously recommends a vote “FOR” approval of the 2005 Stock Plan.

PROPOSAL NO. 4

APPROVAL OF THE HALOZYME THERAPEUTICS, INC.

2006 STOCK PLAN

      In March 2006, the Board of Directors adopted, subject to stockholder approval, the Company’s 2006 Stock Plan (the “2006 Plan”). The 2006 Plan has a share reserve of 2,000,000 shares. As of March 31, 2006, 8,599,833 shares were subject to options under the Company’s existing stock option plans and 2,642,201 shares remained eligible for grant under those plans.

      The Company believes that appropriate equity incentives are critical to attracting and retaining the best employees in its industry. The approval of this proposal will enable the Company to continue to provide such incentives.

      The Board has full discretion to determine the number of awards to be granted to participants under the 2006 Plan, subject to an annual limitation on the total number of awards that may be granted to any employee. Prior to the Annual Meeting, the Company will not grant any awards under the 2006 Plan.

Summary of the 2006 Plan

      The following is a summary of the material terms of the 2006 Plan. It is qualified in its entirety by the specific language of the 2006 Plan, a copy of which is available to any stockholder upon request.

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     General. The 2006 Plan provides for the grant of incentive and nonstatutory stock options as well as stock appreciation rights, restricted stock, restricted stock units, performance units and shares and other stock-based awards. Incentive stock options granted under the 2006 Plan are intended to qualify as “incentive stock options” within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”). Nonstatutory stock options granted under the 2006 Plan are not intended to qualify as incentive stock options under the Code.

     Purpose. The purpose of the 2006 Plan is to advance the interests of the Company and its stockholders by providing an incentive to attract and retain persons eligible to receive options under the 2006 Plan and by motivating such persons to contribute to the growth and profitability of the Company.

     Administration. The 2006 Plan is administered by the Board of Directors and its designees. The Board has the power to construe and interpret the 2006 Plan and, subject to the provisions of the 2006 Plan, to determine the persons to whom and the dates on which awards will be granted, the number of shares to be subject to each award, the time or times during the term of each award within which all or a portion of such award may be exercised, the exercise price, the type of consideration to be paid upon exercise of an award, and other terms of the award. The Board of Directors is authorized to delegate administration of the 2006 Plan to a committee of outside directors. The Board has delegated administration of the 2006 Plan to the Compensation Committee of the Board. As used herein with respect to the 2006 Plan, the “Board” refers to the Compensation Committee, as well as to the Board of Directors itself.

     Stock Subject to the 2006 Plan. The share reserve under the 2006 Plan will be equal to 2,000,000 shares. If awards granted under the 2006 Plan expire, are cancelled or otherwise terminate without being exercised, the shares of Common Stock subject to such expired, cancelled or terminated awards will then be available for grant under the 2006 Plan. In addition, to the extent (a) shares are surrendered in exercise of awards or payment of tax, or (b) awards are settled in cash, such shares will not be deemed to be issued under the Plan.

      In general, no more than 2,000,000 shares may be issued under the 2006 Plan pursuant to restricted stock awards, restricted stock unit awards and performance awards.

     Eligibility. Awards other than incentive stock options generally may be granted only to employees, directors and consultants of the Company, or certain related entities or designated affiliates. An incentive stock option can only be granted to a person who, on the effective date of grant, is an employee of the Company, a parent corporation or a subsidiary corporation. As of March 31, 2006, approximately 34 persons would have been eligible to receive grants under the 2006 Plan.

      No incentive stock options may be granted under the 2006 Plan to any person who, at the time of the grant, owns (or is deemed to own) stock possessing more than 10% of the total combined voting power of the Company, or any of its parent or subsidiary corporations, unless the option exercise price is at least 110% of the fair market value of the stock subject to the option on the date of grant, and the term of the option does not exceed 5 years from the date of grant. The aggregate fair market value, determined at the time of grant, of the shares of Common Stock with respect to which incentive stock options granted under the 2006 Plan are exercisable for the first time by an optionee during any calendar year (under all such plans of the Company and its parent and subsidiary corporations) may not exceed $100,000. In order to permit awards to qualify as “performance based compensation” under Code Section 162(m) no employee may be granted awards under the 2006 Plan in excess of the following in each fiscal year of the Company:

•  Stock options and stock appreciation rights: No more than 500,000 shares.

•  Restricted stock and restricted stock unit awards having vesting based upon the attainment of performance goals: No more than 250,000 shares.

•  Performance share awards: No more than 250,000 shares for year each full fiscal year contained in the performance period of the award.

•  Performance unit awards: No more than $300,000 for each full fiscal year contained in the performance period of the award.

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Options and Stock Appreciation Rights

      The following is a description of the general terms of options and stock appreciation rights under the 2006 Plan. Individual grants may have terms that differ from those described below.

     Exercise Price; Payment. The exercise price of incentive stock options under the 2001 Option Plan may not be less than the fair market value of the Common Stock subject to the option on the date of the option grant, and in some cases (see “Eligibility” above), may not be less than 110% of such fair market value. The exercise price of nonstatutory stock options and stock appreciation rights may not be less than the fair market value of the stock subject to the award on the date of the option grant. On March 16, 2006, the closing price of the Company’s Common Stock as reported on the American Stock Exchange was $3.39 per share. The exercise price of options granted under the 2006 Plan must be paid: (i) in cash, by check or cash equivalent, (ii) by tender to the Company, or attestation to the ownership of shares of Common Stock of the Company owned by the optionee having a fair market value not less than the exercise price, (iii) for optionees who are employees, in the Company’s sole and absolute discretion, by delivery of a promissory note, (iv) in any other form of legal consideration acceptable to the Board, or (v) any combination of the above.

     No Repricing. The 2006 Plan does not permit the Company to lower the exercise price of options or stock appreciation rights or to exchange options or stock appreciation rights for awards with a lower exercise price without further stockholder approval.

     Exercise. Options and stock appreciation rights granted under the 2006 Plan may become exercisable (“vest”) in cumulative increments as determined by the Board provided that the holder’s employment by, or service as a director or consultant to the Company or certain related entities or designated affiliates (“service”) continues from the date of grant until the applicable vesting date. Shares covered by awards granted under the 2006 Plan may be subject to different vesting terms. The Board has the power to accelerate the time during which an award may be exercised.

     Term. The maximum term of options and stock appreciation rights under the 2006 Plan is ten years, except that in certain cases (see “Eligibility” above) the maximum term is five years. The 2006 Plan provides for earlier termination of an award due to the holder’s cessation of service.

     Restrictions on Transfer. Incentive stock options granted under the 2006 Plan may not be transferred except by will or by the laws of descent and distribution, and may be exercised during the lifetime of the person to whom the option is granted only by such person. A nonstatutory stock option or stock appreciation right is not transferable in any manner other than (i) by will or by the laws of descent and distribution, (ii) by written designation of a beneficiary taking effect upon the death of the optionee, (iii) by delivering written notice to the Company that the optionee will be gifting to certain family members or other specific entities controlled by or for the benefit of such family members, and such other transferees as the Board may approve.

Restricted Stock Units

      The Board may grant restricted stock units under the 2006 Plan that represent a right to receive shares of our common stock at a future date determined in accordance with the participant’s award agreement. No monetary payment is required for receipt of restricted stock units or the shares issued in settlement of the award, the consideration for which is furnished in the form of the participant’s services to the company. The Board may grant restricted stock unit awards subject to the attainment of one or more performance goals similar to those described below in connection with performance awards, or may make the awards subject to vesting conditions similar to those applicable to restricted stock awards. Unless otherwise provided by the Board, a participant will forfeit any restricted stock units which have not vested prior to the participant’s termination of service. Participants have no voting rights or rights to receive cash dividends with respect to restricted stock unit awards until shares of common stock are issued in settlement of such awards. However, the Board may grant restricted stock units that entitle their holders to receive dividend equivalents, which are rights to receive additional restricted stock units for a number of shares whose value is equal to any cash dividends we pay.

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Restricted Stock Awards

      The Board may grant restricted stock awards under the 2006 Plan either in the form of a restricted stock purchase right, giving a participant an immediate right to purchase common stock, or in the form of a restricted stock bonus, for which the participant furnishes consideration in the form of services to the company. The Board determines the purchase price payable under restricted stock purchase awards, which may be less than the then current fair market value of our common stock. Restricted stock awards may be subject to vesting conditions based on such service or performance criteria as the Board specifies, including the attainment of one or more performance goals similar to those described below in connection with performance awards. Shares acquired pursuant to a restricted stock award may not be transferred by the participant until vested. Unless otherwise provided by the Board, a participant will forfeit any shares of restricted stock as to which the restrictions have not lapsed prior to the participant’s termination of service. Participants holding restricted stock will generally have the right to vote the shares and to receive any dividends paid, except that dividends or other distributions paid in shares will be subject to the same restrictions as the original award.

Performance Awards

      The Board may grant performance awards subject to such conditions and the attainment of such performance goals over such periods as the determines in writing and sets forth in a written agreement between the company and the participant. To the extent compliance with Section 162(m) of the Code is desired, a committee comprised solely of “outside directors” under Section 162(m) shall act with respect to performance awards, and “Board” as used in this section shall mean this committee. These awards may be designated as performance shares or performance units. Performance shares and performance units are unfunded bookkeeping entries generally having initial values, respectively, equal to the fair market value determined on the grant date of a share of common stock and a value set by the Board. Performance awards will specify a predetermined amount of performance shares or performance units that may be earned by the participant to the extent that one or more predetermined performance goals are attained within a predetermined performance period. To the extent earned, performance awards may be settled in cash, shares of common stock (including shares of restricted stock) or any combination thereof.

      Prior to the beginning of the applicable performance period or such later date as permitted under Section 162(m) of the Code, the Board will establish one or more performance goals applicable to the award. Performance goals will be based on the attainment of specified target levels with respect to one or more measures of business or financial performance of the company and each subsidiary corporation consolidated with the company for financial reporting purposes, or such division or business unit of the company as may be selected by the Board. The Board, in its discretion, may base performance goals on one or more of the following such measures: sales revenue, gross margin, operating margin, operating income, pre-tax profit, earnings before stock-based compensation expense, interest, taxes, depreciation and amortization, net income, expenses, the market price of our common stock, earnings per share, return on stockholder equity, return on capital, return on net assets, economic value added, market share, customer service, customer satisfaction, safety, total stockholder return, free cash flow, net operating income, operating cash flow, return on investment, employee satisfaction, employee retention, balance of cash, cash equivalents and marketable securities, product development, research and development expenses, completion of an identified special project, completion of a joint venture or other corporate transaction, or other measures as determined by the Board. The target levels with respect to these performance measures may be expressed on an absolute basis or relative to a standard specified by the Board. The degree of attainment of performance measures will be calculated in accordance with generally accepted accounting principles, but prior to the accrual or payment of any performance award for the same performance period, and, according to criteria established by the Board, excluding the effect (whether positive or negative) of changes in accounting standards or any extraordinary, unusual or nonrecurring item occurring after the establishment of the performance goals applicable to a performance award.

      Following completion of the applicable performance period, the Board will certify in writing the extent to which the applicable performance goals have been attained and the resulting value to be paid to the participant. The Board retains the discretion to eliminate or reduce, but not increase, the amount that would

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otherwise be payable on the basis of the performance goals attained to a participant who is a “covered employee” within the meaning of Section 162(m) of the Code. However, no such reduction may increase the amount paid to any other participant. The Board may make positive or negative adjustments to performance award payments to participants other than covered employees to reflect the participant’s individual job performance or other factors determined by the Board. In its discretion, the Board may provide for the payment to a participant awarded performance shares of dividend equivalents with respect to cash dividends paid on the company’s common stock. The Board may provide for performance award payments in lump sums or installments. If any payment is to be made on a deferred basis, the Board may provide for the payment of dividend equivalents or interest during the deferral period.

      Unless otherwise provided by the Board, if a participant’s service terminates due to the participant’s death or disability prior to completion of the applicable performance period, the final award value will be determined at the end of the performance period on the basis of the performance goals attained during the entire performance period but will be prorated for the number of months of the participant’s service during the performance period. If a participant’s service terminates prior to completion of the applicable performance period for any other reason, the 2006 Plan provides that, unless otherwise determined by the Board, the performance award will be forfeited. No performance award may be sold or transferred other than by will or the laws of descent and distribution prior to the end of the applicable performance period.

Deferred Compensation Awards

      The 2006 Plan authorizes the Board to establish a deferred compensation award program. If and when implemented, participants designated by the Board who are officers, directors or members of a select group of highly compensated employees may elect to receive, in lieu of compensation otherwise payable in cash or in lieu of cash or shares of common stock issuable upon the exercise or settlement of stock options, stock appreciation rights or performance share or performance unit awards, an award of deferred stock units. Each such stock unit represents a right to receive one share of our common stock at a future date determined in accordance with the participant’s award agreement. Deferred stock units are fully vested upon grant and will be settled by distribution to the participant of a number of whole shares of common stock equal to the number of stock units subject to the award as soon as practicable following the earlier of the date on which the participant’s service terminates or a settlement date elected by the participant at the time of his or her election to receive the deferred stock unit award. Participants are not required to pay any additional consideration in connection with the settlement of deferred stock units. A holder of deferred stock units has no voting rights or other rights as a stockholder until shares of common stock are issued to the participant in settlement of the stock units. However, participants holding deferred stock units will be entitled to receive dividend equivalents with respect to any payment of cash dividends on an equivalent number of shares of common stock. Such dividend equivalents will be credited in the form of additional whole and fractional stock units determined in accordance with a method specified by the Board in the participant’s award agreement. Prior to settlement, deferred stock units may not be assigned or transferred other than by will or the laws of descent and distribution.

Other Stock-Based Awards

      The Plan permits the Board to grant other awards based on the Company’s stock or on dividends on the Company’s stock.

Effect of Certain Corporate Events

      In the event of any stock dividend, stock split, reverse stock split, recapitalization, combination, reclassification or similar change in the capital structure of the Company, appropriate adjustments will be made in the number and class of shares subject to the 2006 Plan and to any outstanding awards, in the aggregate and Section 162(m) per employee grant limits (see “Federal Income Tax Information — Potential Limitation on Company Deductions,” below), and in the exercise price per share of any outstanding awards. Any fractional share resulting from an adjustment will be rounded down to the nearest whole number, and at

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no time will the exercise price of any option or stock appreciation right be decreased to an amount less than par value of the stock subject to the award.

      If a change in control occurs, the surviving, continuing, successor or purchasing corporation or parent corporation thereof may either assume the Company’s rights and obligations under the outstanding awards or substitute substantially equivalent awards for such corporation’s stock. Awards that are not assumed, replaced or exercised prior to the change in control will terminate. The Board may grant awards that will accelerate in connection with a change in control. The acceleration of an award in the event of an acquisition or similar corporate event may be viewed as an anti-takeover provision, which may have the effect of discouraging a proposal to acquire or otherwise obtain control of the Company.

Duration, Amendment and Termination

      The Board may amend or terminate the 2006 Plan at any time. If not earlier terminated, the 2006 Plan will expire on the tenth anniversary of stockholder approval.

      The Board may also amend the 2006 Plan at any time or from time to time. However, no amendment authorized by the Board will be effective unless approved by the stockholders of the Company if the amendment would: (i) increase the number of shares reserved for options under the 2006 Plan; (ii) change the class of persons eligible to receive incentive stock options; or (iii) modify the 2006 Plan in any other way if such modification requires stockholder approval under applicable law, regulation or rule.

Specific Grants

      Awards under the 2006 Plan are discretionary. Accordingly, it is not possible to determine the number of awards that may be granted under the 2006 Plan to specific individuals.

Federal Income Tax Information

     Incentive Stock Options. An optionee recognizes no taxable income for regular income tax purposes as the result of the grant or exercise of an incentive stock option. Optionees who do not dispose of their shares for two years following the date the incentive stock option was granted or within one year following the exercise of the option will normally recognize a long-term capital gain or loss equal to the difference, if any, between the sale price and the purchase price of the shares. If an optionee satisfies both such holding periods upon a sale of the shares, the Company will not be entitled to any deduction for federal income tax purposes. If an optionee disposes of shares either within two years after the date of grant or within one year from the date of exercise (referred to as a “disqualifying disposition”), the difference between the fair market value of the shares on the exercise date and the option exercise price (not to exceed the gain realized on the sale if the disposition is a transaction with respect to which a loss, if sustained, would be recognized) will be taxed as ordinary income at the time of disposition. Any gain in excess of that amount will be a capital gain. If a loss is recognized, there will be no ordinary income, and such loss will be a capital loss. A capital gain or loss will be long-term if the optionee’s holding period is more than 12 months. Any ordinary income recognized by the optionee upon the disqualifying disposition of the shares generally should be deductible by the Company for federal income tax purposes, except to the extent such deduction is limited by applicable provisions of the Code or the regulations thereunder. The difference between the option exercise price and the fair market value of the shares on the exercise date of an incentive stock option is an adjustment in computing the optionee’s alternative minimum taxable income and may be subject to an alternative minimum tax which is paid if such tax exceeds the regular tax for the year. Special rules may apply with respect to certain subsequent sales of the shares in a disqualifying disposition, certain basis adjustments for purposes of computing the alternative minimum taxable income on a subsequent sale of the shares and certain tax credits which may arise with respect to optionees subject to the alternative minimum tax.

     Nonstatutory Stock Options and Stock Appreciation Rights. Nonstatutory stock options and stock appreciation rights have no special tax status. A holder of these awards generally does not recognize taxable income as the result of the grant of such award. Upon exercise of a nonstatutory stock option or stock appreciation right, the holder normally recognizes ordinary income in an amount equal to the difference

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between the exercise price and the fair market value of the shares on the exercise date. If the holder is an employee, such ordinary income generally is subject to withholding of income and employment taxes. Upon the sale of stock acquired by the exercise of a nonstatutory stock option or stock appreciation right, any gain or loss, based on the difference between the sale price and the fair market value on the exercise date, will be taxed as capital gain or loss. A capital gain or loss will be long-term if the holding period of the shares is more than 12 months. The Company generally should be entitled to a deduction equal to the amount of ordinary income recognized by the optionee as a result of the exercise of a nonstatutory stock option or stock appreciation right, except to the extent such deduction is limited by applicable provisions of the Code or the regulations thereunder. No tax deduction is available to the Company with respect to the grant of a nonstatutory stock option or stock appreciation right or the sale of the stock acquired pursuant to such grant.

     Restricted Stock. A participant acquiring restricted stock generally will recognize ordinary income equal to the fair market value of the shares on the “determination date.” The “determination date” is the date on which the participant acquires the shares unless the shares are subject to a substantial risk of forfeiture and are not transferable, in which case the determination date is the earlier of (i) the date on which the shares become transferable or (ii) the date on which the shares are no longer subject to a substantial risk of forfeiture. If the determination date is after the date on which the participant acquires the shares, the participant may elect, pursuant to Section 83(b) of the Code, to have the date of acquisition be the determination date by filing an election with the Internal Revenue Service no later than 30 days after the date on which the shares are acquired. If the participant is an employee, such ordinary income generally is subject to withholding of income and employment taxes. Upon the sale of shares acquired pursuant to a restricted stock award, any gain or loss, based on the difference between the sale price and the fair market value on the determination date, will be taxed as capital gain or loss. We generally should be entitled to a deduction equal to the amount of ordinary income recognized by the participant on the determination date, except to the extent such deduction is limited by applicable provisions of the Code.

     Performance and Restricted Stock Unit Awards. A participant generally will recognize no income upon the receipt of a performance share, performance unit or restricted stock unit award. Upon the settlement of such awards, participants normally will recognize ordinary income in the year of receipt in an amount equal to the cash received and the fair market value of any substantially vested shares received. If the participant is an employee, such ordinary income generally is subject to withholding of income and employment taxes. If the participant receives shares of restricted stock, the participant generally will be taxed in the same manner as described above (see discussion under “Restricted Stock”). Upon the sale of any shares received, any gain or loss, based on the difference between the sale price and the fair market value on the “determination date” (as defined above under “Restricted Stock”), will be taxed as capital gain or loss. The company generally should be entitled to a deduction equal to the amount of ordinary income recognized by the participant on the determination date, except to the extent such deduction is limited by applicable provisions of the Code.

     Deferred Compensation Awards. A participant generally will recognize no income upon the receipt of deferred compensation awards. Upon the settlement of the awards, the participant normally will recognize ordinary income in the year of settlement in an amount equal to the fair market value of the shares received. Upon the sale of any shares received, any gain or loss, based on the difference between the sale price and the fair market value of the shares on the date they are transferred to the participant, will be taxed as capital gain or loss. The Company generally should be entitled to a deduction equal to the amount of ordinary income recognized by the participant, except to the extent such deduction is limited by applicable provisions of the Internal Revenue Code.

     Potential Limitation on Company Deductions. Code Section 162(m) denies a deduction to the Company for compensation paid to certain employees in a taxable year to the extent that compensation exceeds $1 million for a covered employee. It is possible that compensation attributable to stock options, when combined with all other types of compensation received by a covered employee from the Company, may cause this limitation to be exceeded in any particular year. Certain kinds of compensation, including qualified “performance-based compensation,” are disregarded for purposes of the deduction limitation. In accordance with applicable regulations issued under Section 162(m), compensation attributable to stock options and stock appreciation rights will qualify as performance-based compensation, provided that: (i) the option plan

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contains a per-employee limitation on the number of shares for which options or stock appreciation rights may be granted during a specified period, (ii) the per-employee limitation is approved by the stockholders, (iii) the option is granted by a Compensation Committee comprised solely of “outside directors” (as defined in Section 162(m)) and (iv) the exercise price of the option or right is no less than the fair market value of the stock on the date of grant.

      For the aforementioned reasons, the 2006 Plan provides for an annual per employee limitation as required under Section 162(m) and the Company’s Compensation Committee is comprised solely of outside directors. Accordingly, options or stock appreciation rights granted by the Compensation Committee qualify as performance-based compensation, and the other awards subject to performance goals may qualify.

     Other Tax Consequences. The foregoing discussion is intended to be a general summary only of the federal income tax aspects of awards granted under the 2006 Plan; tax consequences may vary depending on the particular circumstances at hand. In addition, administrative and judicial interpretations of the application of the federal income tax laws are subject to change. Furthermore, no information is given with respect to state or local taxes that may be applicable. Participants in the 2006 Plan who are residents of or are employed in a country other than the United States may be subject to taxation in accordance with the tax laws of that particular country in addition to or in lieu of United States federal income taxes.

Vote Required and Board of Directors Recommendation

      Approval of this proposal would require the affirmative vote of a majority of the votes cast affirmatively or negatively on the proposal at the annual meeting of stockholders, as well as the presence of a quorum representing a majority of all outstanding shares of common stock of the Company, either in person or by proxy. Abstentions and broker non-votes would be counted for purposes of determining the presence of a quorum but otherwise would not have any effect on the outcome of the proposal.

      The Board believes that the adoption of the 2006 Stock Plan is in the best interests of Halozyme and its stockholders for the reasons stated above.Therefore, the Board unanimously recommends a vote “FOR” approval of the 2006 Stock Plan.

PROPOSAL NO. 5

ADJOURNMENT OF THE MEETING, IF NECESSARY, TO SOLICIT ADDITIONAL PROXIES

      Under our Bylaws, any meeting of stockholders, whether or not a quorum is present or has been established, may be adjourned by the affirmative vote of a majority of the shares casting votes that are entitled to vote and are present, in person or by proxy. No new notice need be given of the date, time or place of the adjourned meeting if such date, time or place is announced at the meeting before adjournment, unless the meeting is adjourned to a date more than 60 days after the date fixed for the original meeting or if a new record date is fixed for the adjourned meeting. If the proxy holders determine that an adjournment of the meeting is appropriate for the purpose of soliciting additional proxies in favor of any proposal being submitted at the meeting, such adjournment will be submitted for a stockholder vote under Proposal 5 of the attached Notice of Meeting. We will also use the discretionary authority conferred on our proxy holders by duly executed proxy cards to vote for any other matter as Halozyme determines to be appropriate.

Vote Required and Board of Directors Recommendation

      The affirmative vote of a majority of the votes cast at the meeting, at which a quorum is present, either in person or by proxy, is required to approve this proposal. Abstentions and broker non-votes will each be counted as present for purposes of determining the presence of a quorum, but will not have any effect on the outcome of the proposal.

     The Board believes that the adoption of this proposal is in the best interests of Halozyme and its stockholders. Therefore, the Board unanimously recommends a vote “FOR” adjournment of the meeting, if necessary in the judgment of the proxy holders, to solicit additional proxies in favor of the proposals in this proxy statement.

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STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

      The following table sets forth, as of March 1, 2006, certain information with respect to the beneficial ownership of our Common Stock by (i) each stockholder known by Halozyme to be the beneficial owner of more than 5% of our Common Stock, (ii) each director and director-nominee of Halozyme, (iii) each executive officer named in the Summary Compensation Table below, and (iv) all directors and executive officers of Halozyme as a group:

		Number of Shares
		Beneficially
Beneficial Owner(1)		Owned(2)		Percent(3)
QVT Fund LP(4)			6,036,779		9.99
	527 Madison Avenue, 8th Floor
	New York, New York 10022
Randal J. Kirk(5)			5,198,050		8.62
	The Governor Tyler, 1881 Grove Avenue
	Radford, Virginia 24141
Elliot Feuerstein(6)			3,561,516		5.91
Gregory I. Frost(7)			4,256,123		6.92
Jonathan E. Lim(8)			2,766,592		4.43
David A. Ramsay(9)			817,523		1.35
Mark Wilson(10)			570,950		*
Don. A. Kennard(11)			523,950		*
Carolyn M. Rynard(12)			520,950		*
Richard C. Yocum(13)			50,000		*
John S. Patton(14)			522,471		*
Kenneth J. Kelley(15)			170,833		*
Robert L. Engler(16)			205,833		*
Steven T. Thornton(17)			10,000		*
Directors and executive officers as a group (11 persons)(18)			10,415,227		16.94

* Less than 1%.

(1)	Except as otherwise indicated, the persons named in this table have sole voting and investment power with respect to all shares of Common Stock shown as beneficially owned by them, subject to community property laws where applicable and to the information contained in the footnotes to this table. Unless otherwise noted, the address for each beneficial owner is: c/o Halozyme Therapeutics, Inc., 11588 Sorrento Valley Rd., Suite 17, San Diego, CA 92121.
(2)	Under the rules of the Securities and Exchange Commission, a person is deemed to be the beneficial owner of shares that can be acquired by such person within 60 days upon the exercise of options or warrants. Certain options granted under the DeliaTroph Pharmaceuticals, Inc. 2001 Stock Plan that were assumed by Halozyme in connection with the March 2004 merger of DeliaTroph Pharmaceuticals, Inc. and Global Yacht Services, Inc. are immediately exercisable, subject to our right to repurchase unvested shares upon termination of employment or other service at a price equal to the option exercise price.
(3)	Calculated on the basis of 60,300,795 shares of Common Stock outstanding as of March 1, 2006, provided that any additional shares of Common Stock that a stockholder has the right to acquire within 60 days after March 1, 2006, are deemed to be outstanding for the purpose of calculating that stockholder’s percentage beneficial ownership.

(4)    Based on a Schedule 13G/A filed by QVT Fund LP with the SEC on February 13, 2006. QVT Financial LP (“QVT Financial”) is the investment manager for QVT Fund LP (the “Fund”), which beneficially owns 5,611,779 shares of Common Stock, consisting of 5,285,000 shares of Common Stock

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and 326,779 warrants to purchase additional Common Shares (the “Warrants”). QVT Financial is also the investment manager for a separate discretionary account managed for Deutsche Bank AG (the “Separate Account”), which holds 425,000 shares of Common Stock. QVT Financial has the power to direct the vote and disposition of the Common Stock held by each of the Fund and the Separate Account. Accordingly, QVT Financial may be deemed to be the beneficial owner of an aggregate amount of 6,036,779 shares of Common Stock, consisting of the shares owned or eligible for purchase by the Fund and the shares held in the Separate Account.

QVT Financial GP LLC, as General Partner of QVT Financial, may be deemed to beneficially own the same number of shares of Common Stock reported by QVT Financial. QVT Associates GP LLC, as General Partner of the Fund, may be deemed to beneficially own the same number of shares of Common Stock reported by the Fund. Each of QVT Financial and QVT Financial GP LLC disclaim beneficial ownership of the shares of Common Stock beneficially owned by the Fund and the shares of Common Stock held in the Separate Account. QVT Associates GP LLC disclaims beneficial ownership of all shares of Common Stock beneficially owned by the Fund, except to the extent of its pecuniary interest therein.

QVT Financial GP LLC, as General Partner of QVT Financial, may be deemed to beneficially own the same number of shares of Common Stock reported by QVT Financial. QVT Associates GP LLC, as General Partner of the Fund, may be deemed to beneficially own the same number of shares of Common Stock reported by the Fund. Each of QVT Financial and QVT Financial GP LLC disclaim beneficial ownership of the 4,160,000 shares of Common Stock owned by the Fund.

(5)	Based on a Schedule 13G filed by Randal J. Kirk with the SEC on March 3, 2006. Includes shares held by the following entities over which Mr. Kirk (or an entity over which he exercises exclusive control) exercises exclusive control: 510,500 shares held by RJK, L.L.C.; 135,000 shares held by Third Security Staff 2001, LLC; 3,000,000 shares held by Radford Investments Limited Partnership; and 1,552,550 shares held by Randal J. Kirk (2000) Limited Partnership.
(6)	Based on a Schedule 13G filed by Elliot Feuerstein with the SEC on February 11, 2005.
(7)	Includes 1,192,344 shares subject to warrants and options that may be exercised within 60 days after March 1, 2006, of which 315,463 of these shares are subject to a right of repurchase on behalf of Halozyme that will expire within 60 days after March 1, 2006. See footnote 2 above.
(8)	Includes 2,177,095 shares subject to warrants and options that may be exercised within 60 days after March 1, 2006, of which 617,800 of these shares are subject to a right of repurchase on behalf of Halozyme that will expire within 60 days after March 1, 2006. See footnote 2 above.
(9)	Includes 416,113 shares subject to warrants and options that may be exercised within 60 days after March 1, 2006, of which 384,950 of these shares are subject to a right of repurchase on behalf of Halozyme that will expire within 60 days after March 1, 2006. See footnote 2 above.

(10)	Includes 520,950 shares subject to warrants and options that may be exercised within 60 days after March 1, 2006, of which 133,857 of these shares are subject to a right of repurchase on behalf of Halozyme that will expire within 60 days after March 1, 2006. See footnote 2 above.
(11)	Includes 520,950 shares subject to warrants and options that may be exercised within 60 days after March 1, 2006, of which 205,934 of these shares are subject to a right of repurchase on behalf of Halozyme that will expire within 60 days after March 1, 2006. See footnote 2 above.
(12)	Includes 320,950 shares subject to warrants and options that may be exercised within 60 days after March 1, 2006, of which 175,044 of these shares are subject to a right of repurchase on behalf of Halozyme that will expire within 60 days after March 1, 2006. See footnote 2 above.
(13)	Includes 50,000 shares subject to options that may be exercised within 60 days after March 1, 2006.
(14)	Includes 175,000 shares subject to warrants and options that may be exercised within 60 days after March 1, 2006, as well as 264,420 shares held in the name of the John S. & Jamie S. Patton TTEES F/T Patton Revocable Trust DTD 7/2/97.
(15)	Includes 170,833 shares subject to options that may be exercised within 60 days after March 1, 2006.

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(16)	Includes 170,833 shares subject to options that may be exercised within 60 days after March 1, 2006.
(17)	Includes 10,000 shares subject to options that may be exercised within 60 days after March 1, 2006, contingent upon stockholder approval of the 2005 Outside Directors’ Stock Plan.
(18)	Includes 5,725,070 shares subject to warrants and options that may be exercised within 60 days after March 1, 2006 beneficially owned by all executive officers and directors, of which 1,833,048 of these shares would not be vested within 60 days after March 1, 2006, and thus would be subject to repurchase by Halozyme during that period.

COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS

Compensation of Directors

      Upon joining the Board, outside directors receive an initial option grant of 10,000 shares of Common Stock and an initial restricted stock grant of 15,000 shares of Common Stock. The initial option grant will vest upon the later of: (a) the six month anniversary of the date of grant or (b) the date of the first annual meeting following the grant of the initial option. The initial restricted stock grant will vest upon the later of: (a) the first day that the outside director may trade our stock in compliance with our Insider Trading Policy that occurs after the six month anniversary of the date of grant or (b) the first day that the outside director may trade our stock in compliance with our Insider Trading Policy that occurs after the date of the first annual meeting following the initial restricted stock grant.

      Outside directors also receive annual option grants of 10,000 shares of Common Stock and restricted stock grants of 15,000 shares of Common Stock immediately following future annual meetings of stockholders. The annual option grant will vest and become exercisable on the date immediately preceding the date of the annual meeting following the date of grant. The annual restricted stock grant will vest on the first day that the outside director may trade our stock in compliance with our Insider Trading Policy that occurs after the date immediately preceding the annual meeting following the date of grant.

      Outside directors receive an annual retainer of $10,000 for service on the Board as well as an annual retainer of $5,000 for service on any committee of the Board. The chairman of the Board of Directors receives an annual retainer of $25,000. The chairman of the Board’s Audit Committee receives an annual retainer of $10,000 and the chairmen of the Board’s Nominating and Governance Committee and Compensation Committee each receive an annual retainer of $7,500 for their service on these committees.

      Halozyme directors who are also employees of Halozyme do not receive any compensation for their services as members of the Board of Directors.

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Executive Compensation

      The following table sets forth information concerning the compensation earned during the fiscal years ended December 31, 2005, 2004 and 2003 by our Chief Executive Officer and our four other most highly compensated executive officers whose salary and bonus for the last fiscal year exceeded $100,000.

SUMMARY COMPENSATION TABLE

										Long Term
										Compensation
										Awards
				Annual Compensation
										Shares
								Other Annual		Underlying		All Other
Name and Principal Position		Year		Salary		Bonus		Compensation		Options		Compensation
Jonathan E. Lim(1)			2005	$	200,000	$	70,000	$	—		—	$	—
	President and Chief Executive Officer		2004	$	158,085	$	—	$	—		303,422	$	—
			2003	$	66,667	$	—	$	—		2,471,201	$	—
Gregory I. Frost			2005	$	160,000	$	50,000	$	—		—	$	—
	Chief Scientific Officer		2004	$	153,390	$	—	$	—		111,753	$	—
			2003	$	92,500	$	—	$	—		1,235,601	$	—
David A. Ramsay(2)			2005	$	150,000	$	50,000	$	—		—	$	—
	Vice President and Chief		2004	$	138,935	$	—	$	—		96,745	$	—
	Financial Officer		2003	$	12,240	$	—	$	—		741,360	$	—
Carolyn M. Rynard(3)			2005	$	140,000	$	40,000	$	—		—	$	—
	Vice President of Product		2004	$	120,225	$	—	$	—		75,067	$	—
	Development and Manufacturing		2003	$	17,660	$	—	$	—		494,240	$	—
Don A. Kennard(4)			2005	$	150,000	$	50,000	$	—		—	$	—
	Vice President of Regulatory Affairs		2004	$	118,459	$	—	$	—		569,307	$	—
	and Quality Assurance

(1)	Dr. Lim joined Halozyme in May 2003 as President and Chief Executive Officer.
(2)	Mr. Ramsay joined Halozyme in November 2003 as Vice President and Chief Financial Officer.
(3)	Ms. Rynard joined Halozyme in October 2003 as Vice President of Product Development and Manufacturing.
(4)	Mr. Kennard joined Halozyme in January 2004 as Vice President of Regulatory Affairs and Quality Assurance.

Stock Options Granted in Fiscal 2005

      We did not grant stock options to any of the above executive officers during the year ended December 31, 2005.

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Option Exercises and Fiscal 2005 Year-End Values

      The following table provides the specified information concerning exercises of options to purchase our Common Stock in the fiscal year ended December 31, 2005, and unexercised options held as of December 31, 2005, by the persons named in the Summary Compensation Table above. A portion of the shares subject to these options are not yet vested, and thus would be subject to repurchase by Halozyme at a price equal to the option exercise price, if the corresponding options were exercised before those shares had vested.

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR

AND FISCAL YEAR-END VALUES

					Number of Shares				Value of Unexercised
	Shares				Underlying Unexercised Options				In-the-Money Options at Fiscal
	Acquired				at Fiscal Year End				Year End(1)
	on		Value
Name	Exercise		Realized		Exercisable(2)		Unexercisable		Exercisable(2)		Unexercisable
Jonathan E. Lim		100,000	$	121,000		1,904,737		513,476	$	2,676,029	$	348,122
Gregory I. Frost		100,000	$	147,000		866,261		381,093	$	1,159,142	$	419,344
David A. Ramsay		100,000	$	150,000		414,166		67,529	$	550,479	$	—
Carolyn M. Rynard		200,000	$	316,000		319,281		50,025	$	420,763	$	—
Don A. Kennard		—	$	—		519,282		50,025	$	706,763	$	—

(1)	Based on a market value of $1.82 per share, the closing price of our Common Stock on December 30, 2005, as reported by the American Stock Exchange.
(2)	Stock options granted under the 2001 Stock Plan are generally immediately exercisable at the date of grant, but any shares received upon exercise of unvested options are subject to repurchase by Halozyme. Options granted under the 2004 Stock Plan typically vest and become exercisable 1/4 after one year and an additional 1/48 per month thereafter.

Employment Contracts and Termination of Employment andChange-in-Control Arrangements

      We have not entered into employment agreements with any of our employees or officers. Options granted to employees and officers of Halozyme under our 2001 Stock Plan provide for full acceleration of the unvested portion of an option if the option is not assumed or substituted by an acquiring entity in certain change in control events. Furthermore, if the option is substituted or assumed the unvested portion of the option will become fully vested if the option holder is terminated “without cause”, as defined in the 2001 Stock Plan, or resigns after an “adverse change”, as defined in the 2001 Stock Plan, following certain change in control events. Options granted to employees and officers of Halozyme under our 2004 Stock Plan provide for full acceleration of the unvested portion of an option if the option is not assumed or substituted by an acquiring entity upon a “Change in Control”, as defined under the 2004 Stock Plan.

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EQUITY COMPENSATION PLAN INFORMATION

      The following table sets forth information regarding outstanding options and shares reserved for future issuance under our current equity compensation plans as of December 31, 2005:

						Number of Shares
						Remaining Available
						for Future Issuance
		Number of Shares to				under Equity
		Be Issued upon		Weighted-Average		Compensation Plans
		Exercise of		Exercise Price of		(Excluding Shares
		Outstanding Options,		Outstanding Options,		Reflected in
		Warrants and Rights		Warrants and Rights		Column(a))
Plan Category		(a)		(b)		(c)
Equity compensation plans approved by stockholders(1)			8,400,751	$	1.01		216,283
Equity compensation plans not approved by stockholders(2)			135,000	$	1.29		2,490,000
	Total		8,535,751	$	1.01		2,706,283

(1)

Represents stock options under the 2004 Stock Plan and the 2001 Stock Plan. Options under the 2001 Stock Plan were assumed by Halozyme as part of the March 2004 merger between DeliaTroph Pharmaceuticals, Inc. and Global Yacht Services, Inc. The 2001 Stock Plan was approved by the shareholders of DeliaTroph prior to the merger and the former shareholders of DeliaTroph held approximately 90% of the voting stock of Halozyme immediately following the merger. No additional options will be granted under the 2001 Stock Plan. The material features of the 2001 Stock Plan and 2004 Stock Plan are described below.

(2)

Represents the Halozyme 2005 Outside Directors’ Stock Plan, 2006 Stock Plan as well as the grant by Halozyme to a non-executive employee of an option to purchase 125,000 shares of Common Stock at an exercise price of $1.25 per share through a nonstatutory stock option that is not under any of Halozyme’s existing stock plans. This option has a ten year term and vests at the rate of1/4 of the shares on the first anniversary of the employee’s date of hire and1/48 of the shares monthly thereafter. The material features of the 2005 Outside Directors’ Stock Plan and the 2006 Stock Plan are described below.

Material Features of the 2001 Stock Plan

      As of December 31, 2005, we had reserved 7,143,217 shares of our Common Stock for issuance under the 2001 Stock Plan. At December 31, 2005, there were 5,760,251 shares issuable upon exercise of outstanding options under the 2001 Stock Plan, at a weighted average exercise price of $0.40. The 2001 Stock Plan provides for the granting of incentive and nonstatutory stock options to employees and nonstatutory stock options to consultants with exercise prices equal to the fair market value of our Common Stock on the date of grant. Options granted under the 2001 Stock Plan generally have a10-year term and vest at the rate of¹/4 of the shares on the first anniversary of the date of grant and¹/48 of the shares monthly thereafter. Options granted to employees and officers of Halozyme under our 2001 Stock Plan provide for full acceleration of the unvested portion of an option if the option is not assumed or substituted by an acquiring entity in certain change in control events. Furthermore, if the option is substituted or assumed the unvested portion of the option will become fully vested if the option holder is terminated “without cause,” as defined in the 2001 Stock Plan, or resigns after an “adverse change,” as defined in the 2001 Stock Plan, following certain change in control events.

Material Features of the 2004 Stock Plan

      As of December 31, 2005, we had reserved 2,856,783 shares of our Common Stock for issuance under the 2004 Stock Plan. At December 31, 2005, there were 2,640,500 shares issuable upon exercise of outstanding options under the 2004 Stock Plan, at a weighted average exercise price of $2.34. The 2004 Stock Plan provides for the granting of incentive and nonstatutory stock options to employees and nonstatutory stock options to consultants with exercise prices equal to the fair market value of our Common Stock on the date of

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grant. Options granted under the 2004 Stock Plan generally have a10-year term and vest at the rate of¹/4 of the shares on the first anniversary of the date of grant and¹/48 of the shares monthly thereafter. Options granted to employees and officers of Halozyme under our 2004 Stock Plan provide for full acceleration of the unvested portion of an option if the option is not assumed or substituted by an acquiring entity upon a “Change in Control,” as defined under the 2004 Stock Plan.

Material Features of the 2005 Outside Directors’ Stock Plan

      As of December 31, 2005, we had reserved 500,000 shares of our Common Stock for issuance under the 2005 Outside Directors’ Stock Plan. At December 31, 2005, there were 10,000 shares issuable upon exercise of outstanding options under the 2005 Outside Directors’ Stock Plan at a weighted average exercise price of $1.75. The 2005 Outside Directors’ Stock Plan provides for the granting of nonstatutory stock options and restricted stock grants to non-employee directors that meet currently applicable standards for independence. The exercise prices for stock options granted under the 2005 Outside Directors’ Stock Plan equal the fair market value of our Common Stock on the date of grant. Options granted under the 2005 Outside Directors’ Stock Plan generally have a10-year term and vest over one year. Options granted under our 2005 Outside Directors’ Stock Plan provide for full acceleration of the unvested portion of an option if the option is not assumed or substituted by an acquiring entity upon a “Change in Control,” as defined under the 2005 Outside Directors’ Stock Plan. See “Approval of Halozyme Therapeutics, Inc. 2005 Outside Directors’ Stock Plan — Summary of the 2005 Outside Directors’ Stock Plan.”

Material Features of the 2006 Stock Plan

      As of December 31, 2005, we had not yet reserved any shares of our Common Stock for issuance under the 2006 Stock Plan as that plan was not adopted by our Board until March 21, 2006. The 2006 Stock Plan provides for the granting of restricted stock, restricted stock units, incentive and nonstatutory stock options, stock appreciation rights, performance units and shares, deferred compensation awards and other stock-based awards. The Board will determine the purchase price payable under restricted stock purchase awards, which may be less than the then current fair market value of our common stock. Restricted stock awards may be subject to vesting conditions based on such service or performance criteria as the Board specifies, including the attainment of one or more performance goals. Unless otherwise provided by the Board, a participant will forfeit any shares of restricted stock as to which the restrictions have not lapsed prior to the participant’s termination of service. Options granted under the 2006 Stock Plan will generally have a 10-year term and vest at the rate of 1/4 of the shares on the first anniversary of the date of grant and 1/48 of the shares monthly thereafter. Options granted under our 2006 Stock Plan provide for full acceleration of the unvested portion of an option if the option is not assumed or substituted by an acquiring entity upon a “Change in Control,” as defined under the 2006 Stock Plan. See “Approval of Halozyme Therapeutics, Inc. 2006 Stock Plan — Summary of the 2006 Stock Plan.”

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

      We have entered into indemnification agreements with each of our executive officers and directors containing provisions that may require us, among other things, to indemnify those officers and directors against liabilities that may arise by reasons of their status or service as officers or directors. The agreements also provide for Halozyme to advance to the officers and directors expenses that they expect to incur as a result of any proceeding against them as to which they could be indemnified. We also intend to execute such agreements with our future directors and executive officers.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

      Section 16(a) of the Securities Exchange Act of 1934 requires our executive officers and directors and persons who beneficially own more than 10% of our Common Stock to file initial reports of beneficial ownership and reports of changes in beneficial ownership with the SEC. Such persons are required by SEC regulations to furnish us with copies of all Section 16(a) forms filed by such person.

      Based solely on our review of such forms furnished to us and written representations from certain reporting persons, we believe that all filing requirements applicable to our executive officers, directors and greater-than-10% stockholders were met.

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APPOINTMENT OF INDEPENDENT AUDITORS

      The Audit Committee of the Board of Directors of Halozyme has not yet selected an independent auditor to audit the consolidated financial statements of Halozyme for the fiscal year ending December 31, 2006, as it is still reviewing various independent auditor candidates. Cacciamatta Accountancy Corporation has acted in such capacity since its appointment in fiscal year 2003. A representative of Cacciamatta Accountancy Corporation is expected to be present at the annual meeting and to make a statement. A representative of Cacciamatta Accountancy Corporation is also expected to be available to respond to appropriate questions.

      The following table sets forth the aggregate fees billed to Halozyme for the fiscal years ended December 31, 2005, and December 31, 2004, by Cacciamatta Accountancy Corporation:

	Fiscal 2005		Fiscal 2004
Audit Fees(1)	$	101,000	$	85,000
Audit-Related Fees(2)	$	—	$	—
Tax Fees(3)	$	—	$	—
All Other Fees(4)	$	—	$	—

(1)	Audit Fees consist of fees billed for professional services rendered for the audit of our consolidated annual financial statements and review of the interim consolidated financial statements included in quarterly reports and services that are normally provided by Cacciamatta Accountancy Corporation in connection with statutory and regulatory filings or engagements.
(2)	Audit-Related Fees consist of fees billed for assurance and related services that are reasonably related to the performance of the audit or review of our consolidated financial statements and are not reported under “Audit Fees.”
(3)	Tax Fees consist of fees billed for professional services rendered for tax compliance, tax advice and tax planning (domestic and international). These services include assistance regarding federal, state and international tax compliance, acquisitions and international tax planning.
(4)	All Other Fees consist of fees for products and services other than the services reported above.

      The Audit Committee’s policy is to pre-approve all audit and permissible non-audit services provided by our independent auditors. These services may include audit services, audit-related services, tax services and other services. Pre-approval is generally provided for up to one year and any pre-approval is detailed as to the particular service or category of services. The independent auditor and management are required to periodically report to the Audit Committee regarding the extent of services provided by the independent auditor in accordance with this pre-approval. The chair of the Audit Committee is also authorized, pursuant to delegated authority, to pre-approve additional services of up to $25,000 per engagement on a case-by-case basis, and such approvals are communicated to the full Audit Committee at its next meeting.

      On March 12, 2004, our Board of Directors voted to replace the independent accountant that had reported on the financial statements for Global Yacht Services, Inc., Hall & Company (“Hall”). We authorized Hall to respond fully to any inquiries from Cacciamatta Accountancy Corporation and to make Hall’s work papers available to Cacciamatta Accountancy Corporation. We did not have any disagreements with Hall nor did Hall’s prior reports contain adverse opinions or disclaimers of opinions. Hall did not make any negative report regarding our internal controls, management or prior financial statements prior to its dismissal.

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REPORT OF THE AUDIT COMMITTEE

      The Audit Committee oversees Halozyme’s financial reporting process on behalf of the Board of Directors. The Audit Committee consists of three directors each of whom, in the judgment of the Board, is an “independent director” as defined in the listing standards for The American Stock Exchange. The Audit Committee acts pursuant to a written charter that has been adopted by the Board of Directors.

      Management has the primary responsibility for the financial statements and the reporting process, including internal control systems. Our independent auditor, Cacciamatta Accountancy Corporation, is responsible for expressing an opinion as to the conformity of our audited financial statements with generally accepted accounting principles. The Audit Committee has reviewed and discussed the consolidated financial statements with management and Cacciamatta Accountancy Corporation.

      The Committee has also discussed and reviewed with the auditors all matters required to be disclosed in Statement on Auditing Standards No. 61 (Communication with Audit Committees). The Committee has met with Cacciamatta Accountancy Corporation, with and without management present, to discuss the overall scope of the Cacciamatta Accountancy Corporation audit, the results of its examinations, its evaluations of Halozyme’s internal controls and the overall quality of its financial reporting.

      The Audit Committee has received from the auditors a formal written statement describing all relationships between the auditors and Halozyme that might bear on the auditors’ independence consistent with Independence Standards Board Standard No. 1 (Independence Discussions with Audit Committees), discussed with the auditors any relationships that may impact their objectivity and independence, and satisfied itself as to the auditors’ independence.

      Based on the review and discussions referred to above, the committee recommended to the Board of Directors that Halozyme’s audited financial statements be included in Halozyme’s Annual Report on Form 10-KSB for the fiscal year ended December 31, 2005.

AUDIT COMMITTEE

Kenneth J. Kelley (Chairman)

Robert L. Engler

Steven T. Thornton

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STOCKHOLDER PROPOSALS TO BE PRESENTED AT NEXT ANNUAL MEETING

      Stockholder proposals may be included in our proxy materials for an annual meeting so long as they are provided to us on a timely basis and satisfy the other conditions set forth in applicable SEC rules. For a stockholder proposal to be included in our proxy materials for the 2007 annual meeting, the proposal must be received at our principal executive offices, addressed to the Secretary, not later than November 30, 2006. Stockholder business that is not intended for inclusion in our proxy materials may be brought before the annual meeting so long as we receive notice of the proposal as specified by our Bylaws, addressed to the Secretary at our principal executive offices, not later than November 30, 2006.

TRANSACTION OF OTHER BUSINESS

      At the date of this Proxy Statement, the Board of Directors knows of no other business that will be conducted at the 2006 annual meeting other than as described in this Proxy Statement. If any other matter or matters are properly brought before the meeting, or any adjournment or postponement of the meeting, it is the intention of the persons named in the accompanying form of proxy to vote the proxy on such matters in accordance with their best judgment.

David A. Ramsay

Chief Financial Officer and Secretary

March 31, 2006

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APPENDIX A

HALOZYME THERAPEUTICS, INC.

AMENDED AND RESTATED ARTICLES OF INCORPORATION

AMENDED AND RESTATED ARTICLES OF INCORPORATION

OF

HALOZYME THERAPEUTICS, INC.

      Pursuant to the provisions of Section 78.403 of the Nevada Revised Statutes, the undersigned corporation adopts the following Amended and Restated Articles of Incorporation as of this date:

     FIRST: The name of the corporation is Halozyme Therapeutics, Inc. (the “Corporation”).

     SECOND: The Corporation’s initial Articles of Incorporation were filed with the Secretary of State on February 22, 2001 (under the Corporation’s former name, Global Yacht Services, Inc.), were amended by a Certificate of Amendment filed on June 6, 2001 and subsequently amended on March 11, 2004.

     THIRD: The board of directors at a meeting duly convened and held on March 21, 2006, adopted a resolution to amend and restate the Articles of Incorporation of Halozyme Therapeutics, Inc., as amended, as follows:

ARTICLE I

      The name of the corporation is Halozyme Therapeutics, Inc. (the “Corporation”).

ARTICLE II

      The Corporation’s principle office in the State of Nevada is located at 251 Jeanell Dr., Suite 3, Carson City, Nevada 89703, although this Corporation may maintain an office, or offices, in such other place within or without the state of Nevada as may from time to time be designated by the Board of Directors of the Corporation, or by the Bylaws of said Corporation, and that this Corporation may conduct all Corporation business of every kind and nature, including the holding of all meetings of the Board of Directors and stockholders, outside the State of Nevada as well as within the State of Nevada.

ARTICLE III

      The purpose of the Corporation is to engage in any lawful act or activity for which a corporation may be organized under the Nevada General Corporation Law.

ARTICLE IV

      The Corporation is authorized to issue two classes of stock to be designated “Common Stock” and “Preferred Stock.” The total number of shares of Common Stock that the Corporation is authorized to issue is One Hundred Fifty Million (150,000,000) shares, with a par value of $0.001 per share. The total number of shares of Preferred Stock that the Corporation is authorized to issue is Twenty Million (20,000,000) shares, with a par value of $0.001 per share.

      The Preferred Stock authorized by these Amended and Restated Articles of Incorporation may be issued from time to time in one or more series. The Board of Directors is expressly authorized to increase or decrease (but not below the number of shares of such series then outstanding ) the number of shares of any series prior to or subsequent to the issue of shares in that series. In case the number of shares of any such series shall be so decreased, the shares constituting such decrease shall resume the status that they had prior to the adoption of the resolution originally fixing the number of shares of such series.

ARTICLE V

      The number of Directors constituting the Board of Directors shall be determined pursuant to the Bylaws of the Corporation. Such Directors shall so serve until the successors thereto are elected and qualified pursuant to the Bylaws of the Corporation.

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ARTICLE VI

      No director or officer of the Corporation shall have any personal liability to the Corporation or its stockholders for damages resulting from breach of fiduciary duty by said director or officer unless such damages result from: (a) acts or omissions which involve intentional misconduct, fraud or a knowing violation of law; or (b) the payment of dividends in violation of Nevada General Corporation Law Chapter 78.300.

      No amendment or repeal of this Article VI applies to or has any effect on the liability or alleged liability of any officer or director of this Corporation for or with respect to any acts or omissions of the officer or director occurring prior to the amendment or repeal, except as otherwise required by law.

ARTICLE VII

      In furtherance and not in limitation of the rights, powers, privileges, and discretionary authority granted or conferred by Chapter 78 of the Nevada General Corporation Law or other statutes or laws of the State of Nevada, the Board of Directors is expressly authorized:

      1. To make, amend, alter, or repeal the Bylaws of the Corporation;

      2. To adopt from time to time bylaw provisions with respect to indemnification of directors, officers, employees, agents, and other persons as it shall deem expedient and in the best interests of the Corporation and to the extent permitted by law; and

      3. To fix and determine designations, preferences, privileges, rights, and powers and relative, participating, optional, or other special rights, qualifications, limitations, or restrictions on the capital stock of the Corporation as provided by Chapter 78.195 of the Nevada General Corporation Law, unless otherwise provided herein.

ARTICLE VIII

      The capital stock, after the amount of the subscription price, or par value, has been paid in, shall not be subject to assessment to pay the debts of this Corporation.

ARTICLE IX

      This Corporation is to have perpetual existence.

ARTICLE X

      No stockholder shall be entitled as a matter of right to subscribe for, or receive additional shares of any class of stock of the Corporation, whether now or hereafter authorized, or any bonds, debentures or securities convertible into stock may be issued or disposed of by the Board of Directors to such persons and on such terms as is in its discretion it shall deem advisable.

ARTICLE XI

      This Corporation reserves the right to amend, alter, change, in any manner now or hereafter prescribed by statute, or by the Articles of Incorporation, as amended, these Amended and Restated Articles of Incorporation, and all rights conferred upon stockholders herein are granted subject to this reservation.

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* * *

     FIFTH: The number of shares of the corporation outstanding and entitled to vote on an amendment and restatement to the Articles of Incorporation is                     , and the above changes and amendment has been consented to and approved by a majority vote of the stockholders holding at least a majority of each class of stock outstanding and entitled to vote thereon.

     SIXTH: Jonathan Lim is the president and David Ramsay is the secretary of Halozyme Therapeutics, Inc. and they have been authorized to execute the foregoing certificate by resolution of the board of directors, adopted at a meeting of the board of directors duly called and that such meeting was held on March 21, 2006, and the foregoing certificate sets forth the text of the Articles of Incorporation, as amended, to the date of the certificate.

HALOZYME THERAPEUTICS, INC.

By: 

Jonathan Lim, President

and

David Ramsay, Secretary

Date: May      , 2006

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HALOZYME THERAPEUTICS, INC.

PROXY SOLICITED BY THE BOARD OF DIRECTORS

FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 4, 2006

     The undersigned hereby appoints Jonathan E. Lim and David A. Ramsay, and each of them, as attorneys and proxies of the undersigned, with full power of substitution, to vote all of the shares of stock of Halozyme Therapeutics, Inc. (the “Company”) which the undersigned may be entitled to vote at the Annual Meeting of Stockholders of the Company to be held at the San Diego Marriott Hotel, 11966 El Camino Real, San Diego 92130, on Thursday, May 4, 2006, at 9:00 a.m. local time and at any and all adjournments or postponements thereof, with all powers that the undersigned would possess if personally present, upon and in respect of the following matters and in accordance with the following instructions, with discretionary authority as to any and all other matters that may properly come before the meeting.

     The shares represented by this proxy card will be voted as directed or, if this card contains no specific voting instructions, these shares will be voted in accordance with the recommendations of the Board of Directors.

     YOUR VOTE IS IMPORTANT. You are urged to complete, sign, date and promptly return the accompanying proxy in the enclosed envelope, which is postage prepaid if mailed in the United States.

(CONTINUED AND TO BE SIGNED ON REVERSE SIDE.)

Board of Directors recommends a vote FOR all proposals.

1. To elect John S. Patton and Steven T. Thornton as Class II Directors, to hold office until the 2009 Annual Meeting of Stockholders.

(INSTRUCTIONS: To withhold authority to vote for any individual nominee mark the “Exceptions” box above and write the name of the nominee(s) that you do not wish to vote for on the line below.)

EXCEPTIONS:                                                       

2. To approve an amendment to our Amended and Restated Articles of Incorporation to increase the number of authorized shares of Common Stock from 100,000,000 to 150,000,000 and to eliminate references to former directors.

3. To approve our 2005 Outside Directors’ Stock Plan and to reserve an aggregate of 500,000 shares of our Common Stock for issuance under the 2005 Outside Directors’ Stock Plan.

4. To approve our 2006 Stock Plan and to reserve an aggregate of 2,000,000 shares of our Common Stock for issuance under the 2006 Stock Plan.

5. To approve any adjournments of the meeting to another time or place, if necessary in the judgment of the proxy holders, for the purpose of soliciting additional proxies in favor of any of the foregoing proposals.

o MARK HERE FOR ADDRESS CHANGE
AND NOTE BELOW

o	FOR ALL	o	WITHHOLD ALL	o	EXCEPTION
o	FOR	o	AGAINST	o	ABSTAIN
o	FOR	o	AGAINST	o	ABSTAIN
o	FOR	o	AGAINST	o	ABSTAIN
o	FOR	o	AGAINST	o	ABSTAIN

Please sign below, exactly as name or names appear on this proxy. If the stock is registered in the names of two or more persons (Joint Holders), each should sign. When signing as attorney, executor, administrator, trustee, custodian, guardian or corporate officer, give printed name and full title. If more than one trustee, all should sign.

Dated: __________________________________, 2006

_______________________________________________
Signature

_______________________________________________
Signature

Whether or not you plan to attend the meeting in person, you are urged to sign and promptly mail this proxy in the return envelope so that your stock may be represented at the meeting.