On August 9, 2021 Halozyme Therapeutics, Inc. (NASDAQ: HALO) reported financial results for the second quarter ended June 30, 2021 and provided an update on its recent corporate activities and outlook (Press release, Halozyme, AUG 9, 2021, View Source [SID1234586107]).
Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:
Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing
Schedule Your 30 min Free Demo!
"Our excellent start to 2021 continued in the second quarter with strong quarterly growth resulting in record quarterly revenues from royalties and the signing of our eleventh collaboration and license agreement," said Dr. Helen Torley, president and chief executive officer. "Our recently announced collaboration with ViiV Healthcare demonstrates the potential for our ENHANZE technology to meet evolving patients’ needs by creating long-acting drugs that facilitate rapid, large volume subcutaneous injections of small molecule drugs. This collaboration also highlights the potential for ENHANZE in new disease areas like infectious disease. As a result of this new collaboration and our strong results to date, we are pleased to share that we are raising our guidance for revenues and earnings for the year."
Recent Partner Highlights:
In July 2021, Janssen received U.S. Food and Drug Administration (FDA) approval for DARZALEX FASPRO (daratumumab and hyaluronidase – fijh) in combination with pomalidomide and dexamethasone for patients with multiple myeloma after first or subsequent relapse, marking the sixth indication for DARZALEX FASPRO in the treatment of multiple myeloma.
In June 2021, Halozyme announced a global collaboration and license agreement with ViiV Healthcare, the global specialist HIV company majority owned by GlaxoSmithKline plc. This license gives ViiV exclusive access to Halozyme’s ENHANZE technology for four specific small and large molecule targets for the treatment and prevention of HIV. Under the terms of the agreement, Halozyme received an upfront payment of $40 million and ViiV is obligated to make potential future payments of up to $175 million in development and commercial milestones per target, subject to achievement of specified development and commercial milestones, including certain specified sales milestones. Halozyme will also be entitled to receive mid-single digit royalties on sales of commercialized medicines using the ENHANZE technology.
In June 2021, Janssen was granted two marketing authorizations by the European Commission (EC) for DARZALEX (daratumumab) SC in two new indications in the European Union. The first authorization was for use in combination with cyclophosphamide, bortezomib and dexamethasone (D-VCd) in newly diagnosed adult patients with systemic light chain (AL) amyloidosis marking the first approved therapy for AL amyloidosis in Europe. The second authorization was for use in combination with pomalidomide and dexamethasone (D-Pd) in adult patients with relapsed or refractory multiple myeloma.
In June 2021, Bristol Myers Squibb enrolled the first patient in a Phase 3 study of nivolumab using ENHANZE technology for patients with advanced or metastatic clear cell renal cell carcinoma.
Recent Corporate Highlights:
During the second quarter, the Company repurchased approximately 1.0 million shares of common stock for $48.8 million at an average price per share of $47.05, achieving its target for share repurchases in 2021 with a total of $125 million at an average price per share of $44.43.
Second Quarter Financial Highlights
Revenue for the second quarter was $136.5 million compared to $55.2 million for the second quarter of 2020. The year-over-year increase was primarily driven by $60.0 million in milestone revenues, including $40 million from ViiV and $20 million from Janssen that was earned upon achievement of a commercial milestone related to subcutaneous DARZALEX, an increase in royalty revenue primarily attributable to subcutaneous DARZALEX and an increase in product sales. Revenue for the quarter included $45.8 million in royalties, an increase of 189% compared to $15.8 million in the prior year period.
Cost of product sales for the second quarter was $23.0 million, compared to $5.7 million for the second quarter of 2020. The year-over-year increase was primarily driven by higher product sales, principally the sales of bulk rHuPH20 to the Company’s partners.
Research and development expenses for the second quarter were $8.1 million, compared to $9.0 million for the second quarter of 2020. The decrease in expenses was due to the discontinuation of some development related activities for PEGPH20 and closure of the Company’s oncology operations, partially offset by an increase in costs to support additional ENHANZE targets.
Selling, general and administrative expenses for the second quarter were $12.3 million, compared to $11.0 million for the second quarter of 2020. The increase was primarily due to an increase in compensation expense, including stock compensation, for personnel to support additional ENHANZE targets entering clinical development.
Operating Income: On a GAAP basis in the second quarter of 2021, operating income was $93.0 million, compared to an operating income of $29.6 million in the second quarter of 2020.
Net Income: On a GAAP basis in the second quarter of 2021, net income was $91.5 million, compared with net income of $25.8 million in the second quarter of 2020. Non-GAAP net income was $97.8 million in the second quarter of 2021, compared with Non-GAAP net income of $33.6 million in the second quarter of 2020.1
Earnings per Share: On a GAAP basis in the second quarter of 2021, diluted earnings per share was $0.62, compared with $0.19 in the second quarter of 2020. On a Non-GAAP basis diluted earnings per share was $0.66, compared with diluted earnings per share of $0.24 in the second quarter of 2020.1
Cash, cash equivalents and marketable securities were $755.3 million on June 30, 2021, compared to $368.0 million on December 31, 2020.
During the second quarter, the Company repurchased 1.0 million shares of common stock for $48.8 million at an average price of $47.05, bringing the total for share repurchases since the announcement of the Company’s three-year share repurchase program to $475.0 million at an average price of $23.27.
Financial Outlook for 2021
Based on the recent signing of a new collaboration and license agreement and strong year-to-date results as well as the latest information from collaboration partners and planned expenditures for the year, the Company is raising guidance for 2021 and now expects:
Revenues of $425 million to $445 million, representing year-over-year growth of 59%-66%, and up from prior guidance of $375 to $395 million;
GAAP Operating Income of $260 million to $280 million, representing year-over-year growth of 80%-94%;
GAAP Net Income of $235 million to $255 million, representing year-over-year growth of 82%-98% and Non-GAAP Net Income of $280 million to $300 million, representing year-over-year growth of 75%-87%;1
GAAP Diluted Earnings per Share of $1.55 to $1.70, representing year-over-year growth of 70%-86%, up from prior guidance of $1.25 to $1.40; and
Non-GAAP Diluted Earnings per Share of $1.85 to $2.00, representing year-over-year growth of 65%-78%, up from prior guidance of $1.55 to $1.70.1
Webcast and Conference Call
Halozyme will webcast its Quarterly Update Conference Call for the second quarter of 2021 today, Monday, August 9, 2021, 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 register for this conference call, please use this link: View Source After registering, you will receive an email confirmation that includes dial in details and unique conference call codes for entry. Registration is open through the live call. However, to ensure you are connected for the full call, please register a day in advance or at minimum 10 minutes before the start of the call.