HALOZYME REPORTS FIRST QUARTER 2024 FINANCIAL AND OPERATING RESULTS
Revenue Increased 21% YOY to
Royalty Revenue Increased 21% YOY to
Reiterating 2024 Financial Guidance: Total Revenue of
Announced New
"We are pleased to report another quarter of double-digit revenue and earnings growth, which keeps us on track to meet our financial guidance for the full year. We entered the new year with continued strong advancement of our ENHANZE partner products and pipeline. Our partnership with argenx represents a significant growth opportunity following the approval for VYVDURA, efgartigimod co-formulated with ENHANZE, for generalized myasthenia gravis in
Recent Partner Highlights:
- In
May 2024 ,Bristol Myers Squibb announced that theU.S. Food and Drug Administration ("FDA") accepted its Biologics License Application for the subcutaneous formulation of Opdivo® (nivolumab) co-formulated with ENHANZE®, resulting in a$15.0 million milestone payment. The FDA assigned a Prescription Drug User Fee Act ("PDUFA") goal date ofFebruary 28, 2025 . - In
April 2024 , Roche announced thatEuropean Medicines Agency's Committee for Medicinal Products for Human Use has recommended the approval of Ocrevus® (ocrelizumab) subcutaneous ("SC") for its multiple sclerosis indications. A final decision on its approval from theEuropean Commission ("EC") is expected mid-2024. - In
April 2024 , Roche announced that the FDA has accepted the submission of ocrelizumab SC with potential approval inSeptember 2024 . - In
March 2024 , ViiV initiated a Phase 1 study of VH4524184 with ENHANZE® to evaluate the safety, tolerability, and pharmacokinetics in healthy adults. - In the first quarter of 2024, argenx initiated two registrational studies evaluating efgartigimod with ENHANZE® administered by pre-filled syringe in subjects with thyroid eye disease.
- In
February 2024 , argenx announced that the FDA has accepted for priority review a supplemental Biologics License Application ("sBLA") for VYVGART® Hytrulo (efgartigimod alfa and hyaluronidase-qvfc) for the treatment of chronic inflammatory demyelinating polyneuropathy ("CIDP"). The application has been granted a PDUFA action date ofJune 21, 2024 . - In
February 2024 , Takeda submitted a New Drug Application inJapan seeking approval for TAK-771, subcutaneous 10% human immunoglobulin with ENHANZE®, for treatment of primary immunodeficiency. - In
January 2024 , Janssen announced submission of a sBLA to the FDA seeking approval of a new indication for DARZALEX FASPRO® in combination with bortezomib, lenalidomide and dexamethasone for induction and consolidation treatment and with lenalidomide for maintenance treatment of adult patients who are newly diagnosed with multiple myeloma and are eligible for autologous stem cell transplant. - In
January 2024 , Roche receivedEuropean Commission marketing authorization for Tecentriq® subcutaneous for all approved indications of Tecentriq® IV for multiple cancer types. - In
January 2024 , Takeda received FDA approval for HYQVIA® for the treatment of CIDP as maintenance therapy to prevent the relapse of neuromuscular disability and impairment in adults. - In
January 2024 , Takeda received EC approval for HYQVIA® for the treatment of CIDP as maintenance therapy in patients of all ages after stabilization with intravenous immunoglobulin therapy. - In
January 2024 , argenx received regulatory approval inJapan for VYVDURA® (efgartigimod alfa and hyaluronidase-qvfc) co-formulated with ENHANZE® for the treatment of adult patients with generalized myasthenia gravis including options for self-administration, and inApril 2024 , VYVDURA® was made available to patients resulting in$14.0 million total milestone payments.
Recent Corporate Highlights:
- In
February 2024 , the Company announced its third share repurchase program to repurchase up to$750 million of its outstanding common stock.
First Quarter 2024 Financial Highlights:
- Revenue was
$195.9 million compared to$162.1 million in the first quarter of 2023. The 21% year-over-year increase was primarily driven by royalty revenue growth and an increase in milestone revenue. Revenue for the quarter included$120.6 million in royalties, an increase of 21% compared to$99.6 million in the prior year period, primarily attributable to increases in revenue of subcutaneous DARZALEX® (daratumumab) and Phesgo®. - Cost of sales was
$28.3 million , compared to$35.2 million in the first quarter of 2023. The decrease was primarily driven by lower bulk rHuPH20 sales, partially offset by higher proprietary product sales. - Amortization of intangibles expense remained flat at
$17.8 million compared to the first quarter of 2023. - Research and development expense was
$19.1 million , compared to$18.0 million in the first quarter of 2023. The increase was primarily due to planned investments in ENHANZE®. - Selling, general and administrative expense was
$35.1 million , compared to$37.4 million in the first quarter of 2023. The decrease was primarily due to reductions in commercial marketing expense, partially offset by increased compensation expense. - Operating income was
$95.5 million , compared to$53.8 million in the first quarter of 2023. - Net Income was
$76.8 million , compared to$39.6 million in the first quarter of 2023. - EBITDA and Adjusted EBITDA were
$115.7 million , compared to$74.3 million in the first quarter of 2023.1 - GAAP diluted earnings per share was
$0.60 , compared to$0.29 in the first quarter of 2023. Non-GAAP diluted earnings per share was$0.79 , compared to$0.47 in the first quarter of 2023.1 - Cash, cash equivalents and marketable securities were
$463.5 million onMarch 31, 2024 , compared to$336.0 million onDecember 31, 2023 . The increase was primarily a result of cash generated from operations.
Financial Outlook for 2024
The Company is reiterating its financial guidance for 2024, which was initially provided on
- Total revenue of
$915 million to$985 million , representing growth of 10% to 19% over 2023 total revenue primarily driven by increases in royalty revenue, collaboration revenue and growth in product sales from XYOSTED®. Revenue from royalties of$500 million to$525 million , representing growth of 12% to 17% over 2023. - Adjusted EBITDA of
$535 million to$585 million , representing growth of 26% to 37% over 2023. - Non-GAAP diluted earnings per share of
$3.55 to$3.90 , representing growth of 28% to 41% over 2023.1 The Company's earnings per share guidance does not consider the impact of potential future share repurchases.
Table 1. 2024 Financial Guidance
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Total Revenue |
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Royalty Revenue |
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Adjusted EBITDA |
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Non-GAAP Diluted EPS |
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Webcast and Conference Call
About
For more information visit www.halozyme.com and connect with us on LinkedIn and Twitter.
Note Regarding Use of Non-GAAP Financial Measures
In addition to disclosing financial measures prepared in accordance with
Safe Harbor Statement
In addition to historical information, the statements set forth in this press release include forward-looking statements including, without limitation, statements concerning the Company's financial performance (including the Company's financial outlook for 2024) and expectations for future growth, profitability, total revenue, royalty revenue, revenue durability, EBITDA, Adjusted EBITDA, non-GAAP diluted earnings-per-share and potential share repurchase under its share repurchase program. Forward-looking statements regarding the Company's ENHANZE® drug delivery technology may include the possible benefits and attributes of ENHANZE®, its potential application to aid in the dispersion and absorption of other injected therapeutic drugs and facilitating more rapid delivery and administration of higher volumes of injectable medications through subcutaneous delivery. Forward-looking statements regarding the Company's business may include potential growth and receipt of royalty and milestone payments driven by our partners' development and commercialization efforts, potential new clinical trial study starts and clinical data, regulatory submissions and product launches, the size and growth prospects of our partners' drug franchises, potential new or expanded collaborations and collaborative targets and regulatory review, PDUFA action dates and potential approvals of new partnered or proprietary products. These forward-looking statements are typically, but not always, identified through use of the words "expect," "believe," "enable," "may," "will," "could," "intends," "estimate," "anticipate," "plan," "predict," "probable," "potential," "possible," "should," "continue," and other words of similar meaning and involve risk and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Actual results could differ materially from the expectations contained in these forward-looking statements as a result of several factors, including unexpected levels of revenues, expenditures and costs, unexpected delays in the execution of the Company's share repurchase program, unexpected results or delays in the growth of the Company's business, or in the development, regulatory review or commercialization of the Company's partnered or proprietary products, regulatory approval requirements, unexpected adverse events or patient outcomes and competitive conditions. These and other factors that may result in differences are discussed in greater detail in the Company's most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q filed with the
Contacts:
Tram Bui
VP, Investor Relations and Corporate Communications
609-359-3016
tbui@halozyme.com
Teneo
212-886-9356
samantha.gaspar@teneo.com
Footnotes:
1. Reconciliations between GAAP reported and non-GAAP financial information and adjusted guidance measures are provided at the end.
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Three Months Ended |
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2024 |
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2023 |
Revenues |
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Royalties |
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$ 120,593 |
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$ 99,640 |
Product sales, net |
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58,583 |
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60,794 |
Revenues under collaborative agreements |
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16,703 |
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1,709 |
Total revenues |
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195,879 |
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162,143 |
Operating expenses |
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Cost of sales |
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28,329 |
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35,170 |
Amortization of intangibles |
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17,763 |
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17,835 |
Research and development |
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19,111 |
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17,979 |
Selling, general and administrative |
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35,134 |
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37,357 |
Total operating expenses |
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100,337 |
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108,341 |
Operating income |
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95,542 |
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53,802 |
Other income (expense) |
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Investment and other income, net |
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4,993 |
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2,979 |
Interest expense |
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(4,507) |
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(4,543) |
Net income before income taxes |
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96,028 |
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52,238 |
Income tax expense |
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19,205 |
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12,623 |
Net income |
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$ 76,823 |
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$ 39,615 |
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Earnings per share |
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Basic |
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$ 0.61 |
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$ 0.29 |
Diluted |
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$ 0.60 |
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$ 0.29 |
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Weighted average common shares outstanding |
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Basic |
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126,941 |
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135,027 |
Diluted |
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128,887 |
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137,900 |
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ASSETS |
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Current assets |
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Cash and cash equivalents |
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$ 164,627 |
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$ 118,370 |
Marketable securities, available-for-sale |
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298,824 |
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217,630 |
Accounts receivable, net and contract assets |
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195,902 |
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234,210 |
Inventories, net |
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168,541 |
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127,601 |
Prepaid expenses and other current assets |
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45,690 |
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48,613 |
Total current assets |
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873,584 |
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746,424 |
Property and equipment, net |
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78,071 |
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74,944 |
Prepaid expenses and other assets |
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17,319 |
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17,816 |
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416,821 |
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416,821 |
Intangible assets, net |
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455,116 |
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472,879 |
Deferred tax assets, net |
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616 |
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4,386 |
Total assets |
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$ 1,841,527 |
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$ 1,733,270 |
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LIABILITIES AND STOCKHOLDERS' EQUITY |
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Current liabilities |
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Accounts payable |
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$ 13,325 |
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$ 11,816 |
Accrued expenses |
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118,314 |
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100,678 |
Total current liabilities |
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131,639 |
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112,494 |
Long-term debt, net |
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1,500,879 |
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1,499,248 |
Other long-term liabilities |
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31,201 |
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37,720 |
Total liabilities |
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1,663,719 |
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1,649,462 |
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Stockholders' equity |
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Common stock |
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127 |
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127 |
Additional paid-in capital |
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11,794 |
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2,409 |
Accumulated other comprehensive loss |
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(1,486) |
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(9,278) |
Retained earnings |
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167,373 |
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90,550 |
Total stockholders' equity |
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177,808 |
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83,808 |
Total liabilities and stockholders' equity |
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$ 1,841,527 |
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$ 1,733,270 |
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Three Months Ended |
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2024 |
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2023 |
GAAP Net Income |
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$ 76,823 |
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$ 39,615 |
Adjustments |
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Investment and other income, net |
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(4,993) |
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(2,979) |
Interest expense |
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4,507 |
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4,543 |
Income tax expense |
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19,205 |
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12,623 |
Depreciation and amortization |
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20,206 |
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20,457 |
EBITDA |
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115,748 |
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74,259 |
Adjustments |
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— |
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— |
Adjusted EBITDA |
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$ 115,748 |
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$ 74,259 |
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Three Months Ended |
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2024 |
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2023 |
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GAAP Diluted EPS |
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$ 0.60 |
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$ 0.29 |
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Adjustments |
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Share-based compensation |
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0.08 |
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0.06 |
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Amortization of debt discount |
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0.01 |
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0.01 |
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Amortization of intangible assets |
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0.14 |
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0.13 |
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Amortization of inventory step-up at fair value(1) |
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— |
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0.01 |
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Income tax effect of above adjustments(2) |
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(0.04) |
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(0.03) |
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Non-GAAP Diluted EPS |
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$ 0.79 |
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$ 0.47 |
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GAAP & Non-GAAP Diluted Shares |
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128,887 |
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137,900 |
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Dollar amounts, as presented, are rounded. Consequently, totals may not add up |
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(1) Amounts relate to amortization of the inventory step-up associated with purchase accounting for the Antares acquisition. |
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(2) Adjustments relate to taxes for the reconciling items, as well as excess benefits or tax deficiencies from stock-based compensation, |
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