On August 6, 2019 Halozyme Therapeutics, Inc. (NASDAQ: HALO), a biotechnology company developing novel oncology and drug-delivery therapies, reported financial results for the second quarter ended June 30, 2019 and provided an update on recent corporate activities (Press release, Halozyme, AUG 6, 2019, View Source [SID1234538191]).
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"We are very pleased with the strong progress in both pillars of our business in 2019," said Dr. Helen Torley, president and chief executive officer. "ENHANZE progress included Janssen recently submitting regulatory applications to the U.S. Food and Drug Administration and the European Medicines Agency, and our most recently announced partner, argenx, initiating its first phase 1 study utilizing the ENHANZE drug delivery technology. In addition, we remain focused on PEGPH20, where our HALO-301 pivotal phase 3 trial in metastatic front-line pancreas cancer is on track for the announcement of topline results by December 2019."
Second Quarter 2019 and Recent Highlights Include:
In July 2019, ENHANZE collaborator Janssen Biotech, Inc. (Janssen) submitted a Biologics License Application to the U.S. Food and Drug Administration and an extension application to the European Medicines Agency for the subcutaneous delivery of DARZALEX (daratumumab) for patients with multiple myeloma. Janssen’s regulatory submissions followed the announcement and subsequent presentation of positive results from its phase 3 COLUMBA study at the American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) Annual Meeting in June 2019. The COLUMBA study investigated subcutaneously administered DARZALEX in comparison to intravenous DARZALEX in patients with relapsed or refractory multiple myeloma.
In July 2019, argenx dosed the first subject in a phase 1 clinical trial evaluating the safety, pharmacokinetics and pharmacodynamics of efgartigimod (ARGX-113), using Halozyme’s proprietary ENHANZE drug delivery technology, triggering a $5 million payment to Halozyme. Additionally, in May 2019, argenx nominated a second target to be studied using ENHANZE technology, a human complement factor C2 associated with the product
candidate ARGX-117, which is being developed to treat severe autoimmune diseases, triggering a $10 million payment to Halozyme.
In June 2019, the target number of 330 overall survival events in the HALO-301 clinical trial was reached. The company plans to conduct the final overall survival analysis upon data maturity which will occur when all patients enrolled in the study have been followed for at least 8.5 months. Accordingly, data maturity is projected to be achieved in mid-September 2019. Based on this timing of data maturity, the company expects to announce topline results for the HALO-301 clinical trial by December 2019.
In June 2019, a Cooperative Research and Development Agreement (CRADA) was announced with the National Institute of Allergy and Infectious Diseases’ Vaccine Research Center (VRC), part of the National Institute of Health, enabling the VRC’s use of ENHANZE technology to develop subcutaneous formulations of broadly neutralizing antibodies (bnAbs) against HIV for HIV treatment.
Second Quarter 2019 Financial Highlights
Revenue for the second quarter was $39.1 million compared to $35.2 million for the second quarter of 2018. The year-over-year increase was primarily driven by higher ENHANZE license payments. Revenue for the quarter included $18.1 million in royalties and $5.8 million in product sales, which compared to $20.0 million and $4.5 million, respectively, in the prior year period. The decrease in royalties was mainly driven by lower sales of Herceptin SC by Roche, partially offset by higher sales of RITUXAN HYCELA in the U.S. by Roche and higher sales of HyQvia by Takeda.
Research and development expenses for the second quarter were $33.9 million, compared to $40.1 million for the second quarter of 2018. The decline in expenses was driven by reduced clinical trial activity due to the completion of enrollment in HALO-301.
Selling, general and administrative expenses for the second quarter were $17.3 million, compared to $14.4 million for the second quarter of 2018. The increase is related to an increase in personnel expenses as well as preparations for the potential commercial launch of PEGPH20.
Net loss for the second quarter was $14.6 million, or $0.10 per share, compared to a net loss in the second quarter of 2018 of $22.9 million, or $0.16 per share.
Cash, cash equivalents and marketable securities were $287.5 million at June 30, 2019, compared to $354.5 million at December 31, 2018.
Financial Outlook for 2019
Halozyme is updating its 2019 financial guidance ranges:
Total revenues unchanged from prior guidance of $205 million to $215 million, including revenue from royalties of $72 million to $74 million;
Operating expenses of $255 million to $265 million, down from prior guidance of $265 million to $275 million, or operating expenses excluding cost of goods sold $215 million to $225;
million, down from prior guidance of $225 million to $235 million
Operating cash burn of $40 million to $50 million, down from prior guidance of $45 million to $55 million;
Debt repayment of approximately $90 million; the company now expects to pay off the remainder of the royalty-backed debt by the end of the second quarter of 2020;
Year-end cash, cash equivalents and marketable securities balance of $220 million to $230 million, up from prior guidance of $210 million to $220 million.
This guidance continues to exclude revenue from any potential, new ENHANZE global collaboration and licensing agreements.
Webcast and Conference Call
Halozyme will webcast its Quarterly Update Conference Call for the second quarter of 2019 today, Tuesday, August 6, 2019 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 (877) 824-0907 (domestic callers) or (647) 689-5655 (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 5549627.