On August 8, 2017 Halozyme Therapeutics, Inc. (NASDAQ: HALO), a biotechnology company developing novel oncology and drug-delivery therapies, reported financial results and recent highlights for the second quarter ended June 30 (Press release, Halozyme, AUG 8, 2017, View Source [SID1234520172]).
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"A clear highlight of the second quarter was approval of Genentech’s RITUXAN HYCELATM in the U.S., and the resulting strong interest from new potential partners who seek to coformulate with our ENHANZE technology," said Dr. Helen Torley, president and chief executive officer. "We have strong momentum in the ENHANZE business with continued growth in royalties and a number of catalysts in the second half of 2017, including Lilly’s recent start of their Phase 1 study, Janssen’s upcoming start of their Phase 3 study of subcutaneous daratumumab and our expectation for a new collaboration agreement.
"At the same time, we are executing well in our HALO-301 study of PEGPH20 with screening and enrollment tracking to our expectations and investigator enthusiasm continuing to be strong. I also remain encouraged by recent progress screening and enrolling patients in the dose expansion portion of our Phase 1b study of PEGPH20 in combination with KEYTRUDA and the recent initiation of Genentech’s study of PEGPH20 with TECENTRIQ.
"With strategic and operational progress across both pillars, we look forward to the potential for additional value inflecting events in the coming months."
Second Quarter 2017 and Recent Highlights include:
Approval of Genentech’s RITUXAN HYCELA by the Food and Drug Administration (FDA). The combination of rituximab and Halozyme’s hyaluronidase human ENHANZE technology has been approved for patients with follicular lymphoma, diffuse large B-cell lymphoma and chronic lymphocytic leukemia and is now available to patients in more than 60 countries worldwide.
Eli Lilly initiating a Phase 1 study of an investigational new therapy in combination with Halozyme’s ENHANZE technology as part of the companies’ 2015 Global Collaboration and Licensing agreement.
Johnson and Johnson highlighting progress with the subcutaneous formulation of DARZALEX (daratumumab) during their 2017 Pharmaceutical Business Review. The formulation, which uses Halozyme’s ENHANZE technology to enable a 5-minute infusion, is currently being studied in a Phase 1b clinical trial and planned to begin a Phase 3 study later this year.
Progress in the HALO-301 study of PEGPH20 in combination with ABRAXANE (nab-paclitaxel) and gemcitabine in first line metastatic pancreas cancer patients with high levels of tumor hyaluronan (HA-High). Screening and enrollment in the study continues to track in line with expectations and investigator enthusiasm remains strong.
Initiation of a Genentech-funded Phase 1b/2 multi-arm clinical trial evaluating PEGPH20 with TECENTRIQ (atezolizumab) in patients with previously treated metastatic pancreatic ductal adenocarcinoma. The study is part of a clinical collaboration agreement announced in 2016 to evaluate PEGPH20 and atezolizumab in up to eight tumor types.
Progress in the dose expansion phase of the ongoing Phase 1b clinical study evaluating PEGPH20 in combination with KEYTRUDA (pembrolizumab) in non-small cell lung and gastric cancer patients. Halozyme may report initial response rate data by the end of the year, depending on the pace of enrollment and time to response.
Oral presentations of Halozyme’s Phase 2 randomized HALO-202 study data at the European Society for Medical Oncology’s World Congress on Gastrointestinal Cancer and American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) annual meeting. The presentations expanded on the topline results shared in January with additional data from the study as of December 2016.
Second Quarter 2017 Financial Highlights
Revenue for the second quarter was $33.8 million compared to $33.3 million for the second quarter of 2016. The year-over-year increase was driven by growth in royalties from partner sales of Herceptin SC, MabThera SC and HYQVIA, offset by a decrease in research and development reimbursements and license payments from ENHANZE partners. Revenue for the second quarter included $14.7 million in royalties, an increase of 20 percent from the prior-year period, $8.9 million in sales of bulk rHuPH20 primarily for use in manufacturing collaboration products and $3.9 million in HYLENEX recombinant (hyaluronidase human injection) product sales.
Research and development expenses for the second quarter were $38.3 million, compared to $35.5 million for the second quarter of 2016. The increase was primarily due to a ramp in spending associated with the HALO-301 study.
Selling, general and administrative expenses for the second quarter were $13.1 million, compared to $11.2 million for the second quarter of 2016. The increase was primarily due to personnel expenses, including stock compensation, for the period.
Net loss for the second quarter was $30.8 million, or $0.23 per share, compared to net loss in the second quarter of 2016 of $26.9 million, or $0.21 per share.
Cash, cash equivalents and marketable securities were $297.5 million at June 30, 2017, compared to $179 million at March 31, 2017.
Financial Outlook for 2017
Halozyme increased year-end cash guidance and reiterated all other components of its financial guidance, now expecting:
Net revenue of $115 million to $130 million;
Operating expenses of $240 million to $250 million;
Operating cash burn of $75 million to $85 million; and
Year-end cash balance of $245 million to $260 million, an increase from its prior range of $110 million to $125 million to reflect net proceeds of $135 million from a previously announced public offering of 11.5 million shares of common stock.