On May 11, 2020 Halozyme Therapeutics, Inc. (NASDAQ: HALO) reported financial results for the first quarter ended March 31, 2020 and provided an update on its recent corporate activities and outlook (Press release, Halozyme, MAY 11, 2020, View Source [SID1234557489]).
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"This has been a very exciting start to the year for Halozyme as we have achieved multiple value-creating events in our ENHANZE business, including U.S. FDA approval for DARZALEX FASPROTM with a broad set of label indications, and the receipt of a positive CHMP opinion in the EU, also recommending a broad set of label indications. The positive CHMP opinion is typically a precursor to marketing clearance," said Dr. Helen Torley, president and chief executive officer. "As we look ahead, we are excited about the launches of subcutaneous DARZALEX in the U.S. and E.U. as well as the potential FDA approval of the subcutaneous fixed-dose combination of Perjeta and Herceptin later this year, and what they may mean for patients."
"I want to express my gratitude to the Halozyme team, our partners and suppliers for our continued progress in spite of the challenges posed by COVID-19," continued Dr. Torley. "In light of these challenges, it is obviously difficult to predict how the pandemic recovery will unfold in the coming quarters. However, based on the latest information from our partners and suppliers, and our team’s commitment to maintaining a lean operating structure, we feel confident maintaining our 2020 financial guidance at this time."
First Quarter 2020 and Recent Highlights Include:
On May 1, the Company announced that The Janssen Pharmaceutical Companies of Johnson and Johnson received U.S. FDA approval of DARZALEX FASPROTM in four regimens across five indications in multiple myeloma patients, including newly diagnosed, transplant-ineligible patients as well as relapsed or refractory patients. As a fixed-dose formulation, DARZALEX FASPROTM can be administered subcutaneously over three to five minutes, significantly less time than IV DARZALEX which requires multi-hour infusions.
On April 30, the Company announced that Janssen-Cilag International NV (Janssen) received a Committee for Medicinal Products for Human Use (CHMP) Positive Opinion from the European Medicines Agency (EMA) recommending approval of a DARZALEX (daratumumab) subcutaneous (SC) formulation for the treatment of adult patients with multiple myeloma in frontline and relapsed/refractory settings. The CHMP’s Positive Opinion for daratumumab SC formulation applies to multiple current daratumumab indications including newly diagnosed and transplant-ineligible patients, as well as relapsed or refractory patients.
In April, the Company announced the submission of a New Drug Application (NDA) to Japan’s Ministry of Health, Labour and Welfare (MHLW) by Janssen Pharmaceutical K.K. (Janssen) seeking approval of a new subcutaneous (SC) formulation of daratumumab, an intravenous (IV) treatment approved for patients with multiple myeloma.
During the first quarter, the Company repurchased 3.2 million shares of its common stock at a weighted average price of $16.15 per share. These repurchased shares were in addition to shares repurchased as part of an Accelerated Share Repurchase plan that was completed in mid-February. To date the Company has repurchased over $250 million in shares as part of its three-year share repurchase authorization of up to $550 million approved by the Board in November 2019.
In February, the Company announced that the FDA has accepted a Biologics License Application (BLA) from Genentech, a member of the Roche Group, for the fixed-dose combination of pertuzumab (Perjeta) and trastuzumab (Herceptin ) for subcutaneous administration using ENHANZE technology in combination with IV chemotherapy for the treatment of eligible patients with HER2-positive breast cancer, with an action date of October 18, 2020.
First Quarter 2020 Financial Highlights
Revenue for the first quarter was $25.4 million compared to $56.9 million for the first quarter of 2019. The year-over-year decrease was primarily driven by a $30 million upfront payment from argenx in the prior year period. Revenue for the quarter included $16.8 million in royalties, which compared to $18.0 million in the prior year period.
Research and development expenses for the first quarter were $10.2 million, compared to $31.3 million for the first quarter of 2019. The decrease in expenses was due to a decrease in clinical trial activities-related costs as a result of the Company halting its oncology drug development efforts and related restructuring as announced in November 2019.
Selling, general and administrative expenses for the first quarter were $12.6 million, compared to $18.0 million for the first quarter of 2019. The decrease was due to lower compensation and commercial-related expenses related to the corporate restructuring announced in November 2019.
Net loss for the first quarter was $6.1 million, or $0.04 per share, compared to a net income in the first quarter of 2019 of $1.8 million, or $0.01 per share.
Cash, cash equivalents and marketable securities were $368.2 million at March 31, 2020, compared to $421.3 million at December 31, 2019.
Financial Outlook for 2020
The Company continues to monitor the impact of the COVID-19 pandemic on its business and receive updates from its partners and suppliers on how their businesses are affected. Based on this information and Halozyme’s planned expenditures for the year, the Company’s 2020 financial guidance remains unchanged from that first provided on January 14, 2020. For 2020 Halozyme continues to expect:
Revenues of $230 million to $245 million, representing growth of 17% to 25%;
Earnings per share on a GAAP basis of $0.60 to $0.75 with the first quarter of sustainable profitability beginning in Q2 2020.
The guidance on earnings per share does not reflect any potential impact from the Company’s plans to repurchase any additional number of shares, up to an additional $98 million worth, during the remainder of 2020. The amount and timing of shares repurchased during 2020 will be subject to a variety of factors including market conditions, other business considerations and applicable legal requirements.
Webcast and Conference Call
Halozyme will webcast its Quarterly Update Conference Call for the first quarter of 2020 today, Monday, May 11, 2020 at 4:30 p.m. ET/1:30 p.m. PT. Dr. Torley will lead the call, which will be webcast live through the "Investors" section of Halozyme’s corporate website and a replay will be available following the close of the call. To access the webcast and additional documents related to the call, please visit halozyme.com approximately fifteen minutes prior to the call to register, download and install any necessary audio software. The call may also be accessed by dialing (833) 968-2181 (domestic callers) or (825) 312-2108 (international callers). A telephone replay will be available after the call by dialing (800) 585-8367 (domestic callers) or (416) 621-4642 (international callers) using replay ID number 3199114.