HALO - Earnings call transcript Q1 2018 | Halozyme Therapeutics, Inc.

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Operator

Good afternoon and welcome to the Halozyme Therapeutics First Quarter 2018 Financial Results Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this call is being recorded. It is now my pleasure to introduce your host, Jim Mazzola, Vice President of Investor Relations at Halozyme. Mr. your begin may you conference. Mazzola,

Jim Mazzola

Brandon. Okay, to everyone. welcome afternoon first thank quarter you, Halozyme’s call. XXXX And conference Good financial results

market and issued summary Following call. presentation we release this today, a with to a accompany of a posted news results short slide our close

Chief call CEO, on find will Q&A. our who Chondros, the financial Laurie an and will update our Officer will business; review the always and is Stelzer, join at halozyme.com. Chief Investor our by provide Officer You as page Helen our results then quarter on for Medical March Demetrius Leading a both will today Financial Torley, Halozyme’s overview period. Q&A for followed

making materially me results you conference begin, forward-looking those during from let The we Before Company's statements. in such may forward-looking remind by actual or will indicated differ that the statements. expressed be call, we

the filings description Exchange Commission. a and quarterly For annual risks, our of Securities and to refer with please

to Now, let me turn over the Helen. call

Helen Torley

and good momentum we the pillars building strong the you, of year on of in the Thank XXXX. strategic both across afternoon. established our Jim, well company executing started We

Let the me for takeaways quarter. begin key the with

Firstly, first XXXX a for to the with explore quarter basis position we over XX% cash on as this adjusting ENHANZE over accounting ended the quarter or royalty of XX% we in growth continued grew reported change $XXX implemented royalties This the quarter. our million. strong

reached target HALO-XXX clinical progressing, thirdly, year. success execute now in studies following update, being well continue have at the the Based build now Secondly, our an in April, time achieve six partner the With our our Survival more from studies increase the enrolling with we Since which important the study. of to than between projection XXXX. and at in the our an ENHANZE to approximately forecast expect milestone rHuPHXX XXX me additional we by XXX on registration we of our strategic XXXX, In we December have have products end. project ENHANZE companies we to-date. to last we February licensed XXXX pillar. number leading beginning to color the continues us are Events patients momentum rate patients pillar, eight of on in to of And in had our our eight year key in provide partners enrolled Progression-Free XXXX. of Enzyme In now ENHANZE putting study takeaways, on some those each let

X, potential billion launched on in based shown and penetration royalty of revenue in $X As Slide the at to on the indications time. approved, market in number average the the we product XXXX. ENHANZE’s project Halozyme over on formulation reach approximately received of ENHANZE single-digit has royalty sales degree net geographies this

XXXX in focus to be eight reflect X, will Slide XXXX. to support target clinical is studies commercialization. This slide our advancing in the in our in products project partners now Turning towards to is now updated we

population, Janssen X XXXX. in ml allowed for data Last Let evaluating multiple trials SC five Phase ASH, me Janssen’s is continue delivered shared second-line soon the myeloma, studies. product in myeloma Myeloma. with refractory DARZALEX or SC in four the evaluating SC pomalidomide program with dexamethasone, registration combination amyloidosis injection in in their minutes a relapsed and Phase and them with of be XX less. DARZALEX enters be DARZALEX patient studying X to ENHANZE X December in clinical to begin Smoldering multiple with now or plan SC to development which ENHANZE Phase clinical at and DARZALEX Jansen following

with X patients. Phase relapsed in Janssen or study is various of therapies SC addition, refractory in Darzalex combination frontline, In a planning and

Janssen’s were continues DARZALEX. sales development program ongoing with continues the role in Commercialization $XXX well SC of DARZALEX for of to a reported studies plans the and this for regimen, million planned to key see XXXX. $X With XX% Recall, IV play progress growing frontline of pleased analysts DARZALEX very QX, billion. greater sales in to QX myeloma of the of project announcement of from peak multiple than in too. We FDA this approval week

Europe expect Phase of study represent opinion commercialization at studies on the study Herceptin in the U.S. the of path the positive San ROCHE ENHANZE of X in also ROCHE These Antonio events shared ENHANZE. the with the the with combination Phase SC cancer Cancer Phase Breast SC adjuvant fixed-dose this later We year to to combination patients. technology. approval a IV Perjeta This Symposium, initiate early Herceptin our significant Perjeta and X results fixed-dose breast and derisking and and from follows HER X X CHMP XXXX using positive support approval

is and Now Alexion’s X Phase with in quarter, early-stage this to products Bristol-Myer’s third partner January, X X our moving projected SC enter initiate programs. earlier to Roche be the clinical Phase separate In XXXX planned to which in study a begin testing investigational a or to unnamed new which enabled testing four we Phase year. which to in XXXX. ALXXXXX target, included ENHANZE nivolumab, These Lilly's testing year, a clinical this in later study began plans target began clinical

in our and support sight not closely XXXX, targets quarter, to to starts we first were our two During worked original new additional study have with now in which of development the forecast. line partners

we confidence ways parallel, products scope clinics. I treatment is now collaborations. enter additional competitive in XXXX companies targeted investigational for by secure sharing coming targets with have to and by around accumulate to we tumors through teams constrict with Squibb to One timing remains seek of build oncology differentiation quarter. to PEGPHXX for hyaluronan turn look in Phase continue the studies ENHANZE to see to to and have since rapid vasculature. product undisclosed partnerships X a to and signing competitive Bristol-Myer and reduce I the testament and differentiation study our we additional interest these plans moved supporting progress information the on forward moving unlock to current tumor will drug months. opportunity ENHANZE, is focus multiple our PEGPHXX. unpredictable that update inherently is the patients. that partners technology. subcutaneous close our new to I clinic temporarily in the evaluate into will strong can burden is of additional therapy, To value second making looks agreement agreements run continue as quickly are the partners the pillar initiate a strong will In of to The the that HA, and for and or and additional and degrades target certain The our but be ENHANZE initiated the an

patients to and On is Ventana an overview studying We cancer are of PEGPHXX cancer diagnostic, Slide a study with and project PEGPHXX an gemcitabine our developed in with opportunity with in HALO-XXX tumors patients. our $X HA first-line high companion pancreas X Phase evaluating approximately pancreas billion X alone. potential with partner identify ABRAXANE in global combination

of in the if conducted interim interim collection of basis achieve year-end. by time continue treatment analysis for primary be and survival United data the the see approximately number to supportive, Upon patients now the in by and screening and for we final With XXXX which States analysis, overall enroll data marketing overall endpoint two February form prior progression-free a marketing will and pancreas target progress project, We benefit the currently the events, steps cancer. patients XXX the clean progression-free in continue an conducted number for arm, risk the survival. we survival analysis strong will the database first data both and survival getting our benefit committee. enrolled, to enrollment. interim Europe XXXX. monitoring application to survival project will show events, and when in PEGPHXX which required we Recall, HALO-XXXhas we are endpoints, independent over PFS may and the PFS between conditional significant of be At a target primary the will of and lock progression-free the both for December authorization occur these data of XXX overall the

Let me lung in we types. Beginning the started target reached of assess combination KEYTRUDA plus trials progress and in gastric are in an arm other PEGPHXX X pembrolizumab gastric and turn enrollment development provide last have of now screening PEGPHXX studying cell cancer have of non-small to and in cancer I patients. potential inhibitors, study to patients. and or with we our the Since update, our our the tumor clinical Slide checkpoint update on will the new

have not KEYTRUDA We continue immune lung to non-small studying data our previously PEGPHXX expect with checkpoint are cancer and treated treatment the monotherapy forum year. inhibitor. who and second-line to follow this cell are to plus still who In medical patients submit later-stage in later we receiving an arm, been patients

evaluating in lung first-line Following as KEYTRUDA care in the with cancer expected to treatment, study results change. of is chemotherapy combination Merck’s of the KEYNOTE-XXX standard a

result, our patients a non-small closed of a with of plus collaboration XX Xb working determine In we I’ll enrollment forward our the lung As advisors study of in the are in to our was cell clinical enrolled. and path now investigators were Phase move EISAI. total our to Eribulin and with cancer. PEGPHXX January portion

studies in Roche We good to we plan and PEGPHXX of collaboration the portion cancer, with At continuing atezolizumab the pancreas bladder later to are of submit encouraged this gall also Medical the we and cancer. year. cholangiocarcinoma Forum and gastric our data by our dose-finding and making the response results progress in studies, cancer, are

detail. so over discuss our greater in turn now that, Laurie? I financial to Laurie will results And to with call the

Laurie Stelzer

basis outside contributor. where quarter Thank SC was XX% an in ENHANZE first you, Royalty remaining X first the compared that you revenue $XX.X U.S. sales totaled primarily on million, of will million, on prior the see million as the reported $XX.X to largest $XX.X by year of the revenue period. Helen. products driven an increase of Slide will the begin with I for quarter XXXX, from Herceptin

sales subcutaneous last growing on quarters important for and continues with Roche call, U.S. rituximab option highlighted an As recent serve for in patients the earnings stable the to Europe their four in holding as

that by of as Roche’s formulations subcutaneous remains continue biosimilar of they the We in are entrants IV monitor Rituxan Herceptin to encouraged sticky launch and comments the Europe. indicating

reported down the as $X.X manufacturing year Moving we and totaled continue the have down totaled the due from $X.X other orders transitions. $X.X million million statement, product previously API their prior sales $X.X sales rHuPHXX million, HYLENEX planned partners million. collaboration in totaled our decline in income period book to revenue product of

FASB this is in received quarter reminder, royalty a topic our record true-up estimate royalty our the recognized partners. actual revenue to royalty revenue. subsequent current we from arrears the the quarter As we guidance, Slide received. in income we in Under quarter the we difference reports to our to royalty financial XXX for when are due comparisons. new close transition, January, includes revenue this reports – pertains royalty To to it reporting X the timing as first will between period we assist estimate this and when two Prior how and one now

shows of XX% The of reported reported which first our is our from table the revenue in the for $XX.X increase XXXX. first in royalty this we estimate an quarter million royalties million, of quarter, $XX

compares shows of The second in year growth received we under the estimate QX XX%. of million QX $XX.X our royalties the million $XX.X were This methodology. of due actual prior table adjusted recorded prior in which of to XXXX the

receive of model royalties call, I in we to from flows detail quarter of that you and fourth level were million on cash and a estimate the royalties as have reported and plan transition. XXXX of during sheet. accumulated estimate with of to reduction partner related provide our year-over-year deficit been an for February until to statement line as $XX.X our help partners our throughout sales. We corresponding addition, we the The In payments on annualize XXXX compare this cash balance provided

of a primarily per XXXX for now the first year from period. $X.XX per lower compensation was expenses operating million Research breakdown $XX.X were were equivalents the would by the X for product P&L, compared year. and million compared in $XX.X to for and our period product in share total in the in compared $XXX quarter March a $XX.X personnel start the stock-based of to cash at XXXX. prior to orders. administrative our to a $XX.X the driven like to period. compared due guidance The shown XX, to the or and XXXX, the for the increase quarter including were quarter was million from on year of the general quarter March of expenses Slide in to X million, of of Net development million, Turning million, mainly $XX.X prior and $X.XX securities $X.X XXXX. more XXXX $XX.X cost million expenses sales Selling, were $XXX.X is loss million million slide API unchanged XX, cash, guidance million loss we increase detailed $XX slight $X.X million at marketable first share, which net were for move quarter or at I provided to on as expenses the

the net revenue million, to For continue $XXX for include which of ENHANZE expect million we year does new XXXX, potential full not deals. $XXX the to

Within revenue to for XX%. forecast our growth we XX% line, the are maintaining of royalty

We and their API manufacturing currently as to plans. sufficient our have partners in product continue support near-term decline continue their transition forecast to stock as a orders API safety in

first reflect further modestly API the quarter from For the by modeling the of second to rebound the $X.X expect year. in third end and with to purposes, XXXX beginning million reductions the of we quarters

loans expect We cash cash $XXX of XXXX provide turn to year-end to and XXXX $XXX balance to Helen, of $XX to operating that, related and us includes expenses into million million. which payments royalty-backed XXXX. comments. approximately project million, interest of will SVB, take will operating million, With who to XXXX $XX repayment we for and and million me both back which principal of to our let call continue $XX the million $XXX million flat burn closing Oxford to $XXX and Debt

Helen Torley

and in deliver execution XXXX position value company Laurie, phase XXXX. than a create began in in a and greater we you to are did of Thank even summary, as on strong we a

starts in pillar number oncology continue ENHANZE We reported including of the coming months strong a the royalties enter contemplated our study the highlights make PFS our in that in clear year-on-year on we and In a continue events two study progress December between target momentum project our pillar to not increasing of line our XXXX of in build and to the targets clinic XX% including currently expected basis sight beginning new HALO-XXX to at and XXXX. February were projections of to year. achieving multiple

plan to we in we Above the studies of making that second and from data submit strategy medical investments our confident in addition, In the pillars year. both will pan-tumor remain half to all, fora the generate by two near of support to appreciation their continued of long-term and our expressing value patients, ongoing for gratitude to in team and and shareholders, talented my want and our programs Halozyme I close we're our for patients. to partners work advance partners. hard

would We are now please ready to take your questions, call? open and you operator, the

Operator

first Butler go question you. question. Thank The JMP Please Jason Instructions] will come Securities. your with with [Operator from ahead

Jason Butler

Thanks great. I had two. question. the for taking Hi,

you still AICR. cell Thanks. how can non-small it’s and after but cancer PEGPHXX give biomarker any anymore are can about all updated given the know the thinking I how on thoughts you abstract? one, First And at us details for question, AICR, on second into an lung or evolving landscape, that? focus emerging ASCO presentations you thoughts fit updated the give can any then

Helen Torley

Yes, biomarker of we our our excitement and to as the implications. prepared ask comment investigators lots of AICR approach. mentioned to coming the Demetrius Obviously, take we Jason, advisors liquid are out understand on the and in I’ll certainly question with working AICR remarks, and I’ll

frontline are standard. data KEYTRUDA KEYTRUDA the is that become obviously and We the the second-line suggest perhaps in going with to studying some a population chemotherapy plus PEG of

turn just update Demetrius the then lung cancer brief a biomarker. in in we and PEGPHXX do So provide the over things evaluation and for what update plan be. of we I don’t specific to And will an with that, appropriate non-small would are have the have moment. will to right continue discussions we at deep But a identified once to on we it the cell

Demetrius Chondros

much, Well, thank you very Helen.

of approach aspects course, So, in biomarkers, different options of soluble alternative in exploratory disease of an to we all of the incorporate biomarkers. research we studies, where and also look at PEGPHXX particularly

the publish scientific not explore attempt which is this some on to So data not this continue ongoing of basis. is where first we approach first the the and we intriguing and

Jason Butler

Thanks. Good.

Helen Torley

Thanks, Jason.

Jason Butler

the for Thanks Great. question.

Operator

Flanders go The question your Please will ahead question. next from you. Thank with Sachs. with come Dana Goldman

Dana Flanders

thinking your how understand well. are originally royalties have couple there role months I just product that. now the us subcue by then, ago, of biosimilar to in the for positive And you my just about had second two much first maybe of I help on and February. December just – PEGPHXX, a I very on you questions. just on light you CHMP thank the said A know PFS got Hi, was one, as question saying Maybe think year-end Herceptin.

mean just what your retell. very push Thank and little a program out when that that So thoughts much. on updated some could of there, maybe data you PEGPHXX a bit

Helen Torley

ask Herceptin begin by I’ll and biosimilars. to on Laurie question answering Yes, the

Laurie Stelzer

Hi, Dana.

and I about we range QX projections for think, year growth we maintaining strength primary programs been believe basis. But have We we’ve see think in encouraged will think about our to in the very year. think growth for That we of and the really that to obviously QX. the you of the growth contributor are best was by growth a have a across that robust on it, way from still over for all come the growth if our where year, XX% XX% I year-over-year we be will still the did of seen nice said high.

the Europe. imagine on this a that the more from mature on the at products projecting result a impact that’s of We year. a market grow bit programs And in bit did of biosimilars are we the subcutaneous and forecast will you can slower that rate time IV

call and their of Now has biosimilars very you very said has or power if been comments the encouraging. said, of by Roche on IV with the stickiness Europe encouraged the about will we’ve recent subcutaneous formulations their what about the stay been in that impact

that. as to to royalties the are watch the going SC on so stays And very That it we version. closely relates

Helen Torley

recall proposition was patient strong if healthcare within system focused the the you really clinics. value of preference, reduced was the Dana, and the that use ease on of of the the the Roche subcue cost

of in are turn the talk about to to see today timing. just so, latest the I’ll to projection out well Laurie in of that terms the PFS the delighted it said very Demetrius move And Herceptin. subcue for we as playing the stickiness

Demetrius Chondros

Sure, thank you very Helen. much,

closely We So, PFS how projections function coming in. of is the basis. coming a events events very a shift on are the are we slight regular the update this pressed in, our and

project final of to and between events available we currently PFS number the XXXX. So be XXXX February December

events there the variation time less Now events come There in some events come periods time is as when some come in. periods in. where are and more some

projection update basis. on this a we So regular

In this sites encouragement but enrollments, April and XXX strong end by continue have the enrolled strong of is we very pleased. are terms patients have year. we the we project a enrolled patients at to of There and excitement in XXX to

overall So we pleased very of are – with study. the the enrollment

Dana Flanders

you much. Thank very Wonderful.

Helen Torley

Thanks, Dana.

Operator

next will from Please The go Fye you. question Thank Jessica JPMorgan. ahead question. with come your with

Jessica Fye

for question. Thanks guys. taking my Hey

I I one to the me. the want just XXX study. sure from in understand Just enrollment make

ago clinical think trial, couple targeted a on the I to months from enrollment XXX. shifted XXX

want plan PFS enroll turning advance patients that the range I of was book? by always to enrolling to the So, the beyond about just XXX over XXX talk you when understand, year-end, in

Helen Torley

the coincide ago, I that The Jess. listed enroll when update events, patients. quarters XXX target of was think to that of we PFS thanks, provided couple we and achieve thought designed The Yes, we as gave say we we would was between number update we with XXX expect patients. only study to the to a XXX

to events updated color little provide of just We difference. PFS on the occurrence a actual based really not a you. to more bit So,

we clear exactly in is of with is had to line enrollment terms going when might of events occur. the expectations the how a and just PFS So more line the when as every that or of things sight in range our

Jessica Fye

of got Okay, is it. PFS target And what number the events?

Helen Torley

provide We not information, Jess. that with would

Jessica Fye

you. no Okay, Thank problem.

Helen Torley

Okay, thanks.

Operator

your Thank you for question.

from with ahead. come Citi. Beatty Joel go Next Please question will

Shawn Egan

I filling my this Shawn question. here. guys for two have Thanks is for Hi, in Joel. taking

Helen Torley

Hi, Shawn.

Shawn Egan

The study. first regarding PEGPHXX the one pivotal

whether on this with point? you have your that Now provide initial screening patients, color at in line can you failure XXX assumptions any HA rates have enrolled been

Helen Torley

to I’ll ask Demetrius address that.

Demetrius Chondros

screening the Yes, that initial assumption. and XX% will and rate assumptions support high our were overall this is our population HA of between activities XX% ongoing the

Shawn Egan

to you Great, patients great. regards any in have provide the the formulary second just And formulation launch, in then and adoption subcue receptive color the HYCELA is can to states and the how on how question, going? clinicians been

Helen Torley

is update other only comments give initial with than comments they can we repeat the publicly at that this. additional Roche The on HYCELA Yes, time. that the pleased made we made color this launch. have have Roche don’t can We on are have the

Shawn Egan

you. Thank right. All

Jim Mazzola

Thanks, Shawn.

Next question

Operator

go you. Please next Thank Gena Wang Barclays. come The question ahead. from will with

Gena Wang

the other questions. don’t rate regarding can example, you HERCEPTIN Europe? if, colors in Also conversion U.S. maybe one the Thank previous also you also follow taking the my I the two in the first the for questions, question for and in Europe provide, any for HYCELA. and know well as

Helen Torley

what point represented MabThera due XX% ago Yes, Gena, just launch only agreements of on They we it’s our a sales position progress. of provided XX%. really except least a pleased with launch color say SC Europe, Herceptin that was are slightly the haven’t the situation Probably, the to and at are update in where repeat said. where confidentiality has that can European we we HYCELA year they with progress over time, the same countries, volumes to got lot on Roche the in last a the in in at of

of additional we can Europe. conversion any give in conversions what’s that happening we time. So obviously, since that strong the public have supporting of don’t update But you

Gena Wang

in And question pancreatic regarding PEGPHXX you. Thank cancer. then, another

whether positive will negative, programs? wondering Just oncology would other on or affect your that outcome decision

Helen Torley

also each XXXX, breast we in as cancer have mentioned and data. prepared position in We believe the to differently. some at we are the of potentially that the in remarks will As type we we evaluate data, look cancer the Obviously, gastric in end cancer.

the of evaluate And tumor consider will differently so, certainly we type the each data. we as

Gena Wang

Thank you.

Helen Torley

Gena. Thanks,

Jim Mazzola

Gena. Thanks,

Operator

Arlinda Lee ahead. with go come The question. the for you Canaccord. question from next Please will Thank

Arlinda Lee

question. Thanks Hi for taking guys. my

Helen Torley

Arlinda. Hi,

Arlinda Lee

The your questions. royalties And to Curious now Hi. are Laurie. partnered can bump the then, have the – about would one Maybe Thanks. the the maybe the on in I these financial a of you for identity in on from? couple undisclosed royalties, what programs. some point on that about of follow-up might had we us clinic? when been of some things hear a

Helen Torley

ask I’ll give right. Laurie All to update. an

I related what royalties. think XX% the question is to the in am Arlinda, right increase that? year-on-year was I with driving

Arlinda Lee

right. That’s

Helen Torley

Okay.

Laurie Stelzer

the so Yes, an as was reported increase, this XX% basis. on

were So across Herceptin imagine of you in But most one prior can the as commercial year reporting is you growth apples-and-apples the programs. remember contributing the if an the to did growth it’s that biggest that XX% of commercial on – partners’ and and really our we the one was are sales. the program quarter lag. driver was we see It of more of the comparing largest all

There all so, that might have And number undisclosed it’s and undisclosed pleased the an BMS growth. reason. are of companies programs, why can program. not very Roche, with want reasons we disclose. obviously, And – comment Often on competitive Lilly for I are a to

speeds provide So the potential more than greater with continuing are value seen a recognize moving we that we any and ENHANZE to clinic and our those additional than other we’ve to on very not are I partners to think, into of historically. targets are unfortunately say information pleased more the position are in

Arlinda Lee

you. Thank

Jim Mazzola

Arlinda. Thanks,

Next question.

Operator

question next ahead. come will go with from BMO. The Singh Gobind Please

Gobind Singh

Kim. for Do Thank on am Hi you. guys, I

you remind kind only understand what for, of other Thanks. with you I say, of you would quick outs? kind chemotherapies read of hoping enough in there will of is And X out were those a believe trial, what – and the see that us you in read any a terms coming Phase I guess. but can support of combination what you good can I big to lot the Is chance be have and had pancreatic the from know of terms Phase help any with might the is trials in bar up question. much I trials think there came be what to PFS so we X. us are of other just Just know

Helen Torley

to Gobind. you Nice Thanks, too. meet

data target we made is hazard our In ratio the have X.XX. PFS public terms was fact out of what that read the

And the clinical think information so, that bit that a in as potential might outcome is, range you of looking of for thinking about be useful we to that I we study.

to half of a Medical position in second with we Forum of the – in We be the reporting data the XXXX in arm breast and cancer. our for study Eribulin to fora believe combination KEYTRUDA submitting gastric are study and also

And that. those so, look for sometime data following on

Gobind Singh

Thank you.

Jim Mazzola

Great. more questions for just any with and ready are Operator, comments? are think probably I there we Helen, closing that, no so –

Helen Torley

to That’s great. everybody. continued We Well forward . we you appreciate our you. and Halozyme you updating strong thank and Obviously, questions at another both next look quarter pillars quarter of attention across your your on our progress. Thank

Halozyme Therapeutics (HALO) 10 May 182018 Q1 Earnings call transcript