Date of Report (Date of Earliest Event Reported): | November 7, 2017 |
Delaware | 001-32335 | 88-0488686 | |
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
11388 Sorrento Valley Road, San Diego, California | 92121 |
(Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code: | (858) 794-8889 |
Exhibit No. | Description | |
Press release dated | November 7, 2017 | |
HALOZYME THERAPEUTICS, INC. | ||||
November 7, 2017 | By: | /s/ Harry J. Leonhardt, Esq. | ||
Name: | Harry J. Leonhardt, Esq. | |||
Title: | Senior Vice President, General Counsel, Chief Compliance Officer and Corporate Secretary |
Exhibit No. | Description | ||
Press release dated | November 7, 2017 |
• | Announcing a Global Collaboration and License Agreement with Bristol-Myers Squibb to develop subcutaneously administered Bristol-Myers Squibb immuno-oncology medicines using Halozyme’s ENHANZE drug-delivery technology. The agreement is the largest in company history including a $105 million upfront payment and $160 million in potential milestones for each of 11 immuno-oncology targets, including the initial target selection of programmed death 1 (PD-1). |
• | Roche licensing a new ENHANZE target in exchange for a $30 million upfront payment and up to $160 million in potential development, regulatory and sales-based milestones. The agreement serves as an extension to the original collaboration between the companies, under which Roche has developed two subcutaneous formulations of cancer drugs for markets worldwide. |
• | Janssen initiating the first of three planned Phase 3 studies of the subcutaneous formulation of DARZALEX® (daratumumab). Halozyme’s ENHANZE technology has the potential to enable a 15 ml injection to be delivered in five minutes or less, with no requirement for an intravenous loading dose. Data informing this decision from the Phase 1 PAVO study in patients with relapsed or refractory multiple myeloma were accepted for presentation at the 2017 American Society of Hematology Annual Meeting and Exposition. Upon the dosing of the third patient in the recently initiated study, Halozyme will earn a $15 million milestone payment. |
• | Genentech launching RITUXAN HYCELA™ (rituximab/hyaluronidase human) for subcutaneous injection, a combination of rituximab and Halozyme's hyaluronidase human ENHANZE technology, for patients with follicular lymphoma, diffuse large B-cell lymphoma and chronic lymphocytic leukemia. |
• | Continued progress screening and enrolling patients 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). An interim analysis will be conducted for the first primary endpoint of progression-free survival when the target number of events has been reached, which the company projects will be in late Q4 2018. At that time, Halozyme projects approximately 500 patients will have been enrolled in the study. |
• | Initiating multiple trials in collaboration with Genentech to evaluate PEGPH20 in combination with TECENTRIQ® (atezolizumab) in four tumor types. Studies include a Halozyme-sponsored randomized clinical trial in patients with previously untreated, unresectable, locally advanced, or metastatic cholangiocarcinoma and gallbladder adenocarcinoma and two Genentech-funded and operated, Phase 1b/2 multi-arm clinical studies evaluating patients with previously treated metastatic pancreatic ductal adenocarcinoma and previously treated locally advanced unresectable or metastatic gastric cancer. The studies are part of a clinical collaboration agreement announced in 2016 to evaluate PEGPH20 and atezolizumab in up to eight tumor types. |
• | Revenue for the third quarter was $63.7 million compared to $31.9 million for the third quarter of 2016. The year-over-year increase was driven by a $30 million upfront payment from Roche and growth in royalties from partner sales of Herceptin® (trastuzumab) SC, MabThera® (rituximab) SC and HYQVIA®(Immune Globulin Infusion 10% (Human) with Recombinant Human Hyaluronidase) offset by a decrease in research and development reimbursements and license payments from ENHANZE partners. Revenue for the third quarter included $17.1 million in royalties, an increase of 31 percent from the prior-year period, $9.8 million in sales of bulk rHuPH20 primarily for use in manufacturing collaboration products and $3.8 million in HYLENEX® recombinant (hyaluronidase human injection) product sales. |
• | Research and development expenses for the third quarter were $34.0 million, compared to $33.9 million for the third 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 third quarter were $13.3 million, compared to $11.6 million for the third quarter of 2016. The increase was primarily due to personnel expenses, including stock compensation, for the period. |
• | Net income for the third quarter was $2.7 million, or $0.02 per share, compared to net loss in the third quarter of 2016 of $28.9 million, or $0.23 per share. |
• | Cash, cash equivalents and marketable securities were $316.9 million at September 30, 2017, compared to $297.5 million at June 30, 2017. |
• | Net revenue increasing from the prior range of $245 million to $260 million announced on Sept. 14 to $265 million to $280 million, driven by stronger product sales, royalties, and sponsored research; |
• | Operating expenses decreasing from the prior range of $240 million to $250 million to $230 million to $240 million; |
• | Positive operating cash flow increasing from the prior range of $50 million to $60 million to $70 million to $85 million; |
• | Year-end cash balance increasing from the prior range of $380 million to $395 million to $400 million to $415 million. |
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Revenues: | ||||||||||||||||
Product sales, net | $ | 13,589 | $ | 13,331 | $ | 37,803 | $ | 39,970 | ||||||||
Royalties | 17,119 | 13,036 | 45,839 | 36,695 | ||||||||||||
Revenues under collaborative agreements | 33,023 | 5,486 | 43,407 | 31,023 | ||||||||||||
Total revenues | 63,731 | 31,853 | 127,049 | 107,688 | ||||||||||||
Operating expenses: | ||||||||||||||||
Cost of product sales | 8,332 | 9,134 | 23,664 | 25,204 | ||||||||||||
Research and development | 33,993 | 33,863 | 109,267 | 109,493 | ||||||||||||
Selling, general and administrative | 13,329 | 11,599 | 39,045 | 33,626 | ||||||||||||
Total operating expenses | 55,654 | 54,596 | 171,976 | 168,323 | ||||||||||||
Operating income (loss) | 8,077 | (22,743 | ) | (44,927 | ) | (60,635 | ) | |||||||||
Other income (expense): | ||||||||||||||||
Investment and other income, net | 790 | 334 | 1,512 | 960 | ||||||||||||
Interest expense | (5,538 | ) | (5,253 | ) | (16,526 | ) | (14,378 | ) | ||||||||
Income (loss) before income taxes | 3,329 | (27,662 | ) | (59,941 | ) | (74,053 | ) | |||||||||
Income tax expense | 580 | 1,284 | 970 | 1,584 | ||||||||||||
Net income (loss) | $ | 2,749 | $ | (28,946 | ) | $ | (60,911 | ) | $ | (75,637 | ) | |||||
Net income (loss) per share: | ||||||||||||||||
Basic | $ | 0.02 | $ | (0.23 | ) | $ | (0.45 | ) | $ | (0.59 | ) | |||||
Diluted | $ | 0.02 | $ | (0.23 | ) | $ | (0.45 | ) | $ | (0.59 | ) | |||||
Shares used in computing net income (loss) per share: | ||||||||||||||||
Basic | 141,190 | 128,154 | 134,633 | 127,886 | ||||||||||||
Diluted | 143,236 | 128,154 | 134,633 | 127,886 |
September 30, 2017 | December 31, 2016 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 164,397 | $ | 66,764 | ||||
Marketable securities, available-for-sale | 152,525 | 138,217 | ||||||
Accounts receivable, net | 14,695 | 15,680 | ||||||
Inventories | 9,331 | 14,623 | ||||||
Prepaid expenses and other assets | 12,397 | 21,248 | ||||||
Total current assets | 353,345 | 256,532 | ||||||
Property and equipment, net | 3,232 | 4,264 | ||||||
Prepaid expenses and other assets | 72 | 219 | ||||||
Restricted cash | 500 | 500 | ||||||
Total assets | $ | 357,149 | $ | 261,515 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 4,152 | $ | 3,578 | ||||
Accrued expenses | 32,370 | 28,821 | ||||||
Deferred revenue, current portion | 4,093 | 4,793 | ||||||
Current portion of long-term debt, net | 61,433 | 17,393 | ||||||
Total current liabilities | 102,048 | 54,585 | ||||||
Deferred revenue, net of current portion | 36,755 | 39,825 | ||||||
Long-term debt, net | 145,417 | 199,228 | ||||||
Other long-term liabilities | 540 | 358 | ||||||
Stockholders’ equity (deficit): | ||||||||
Common stock | 142 | 130 | ||||||
Additional paid-in capital | 718,553 | 552,737 | ||||||
Accumulated other comprehensive loss | (53 | ) | (6 | ) | ||||
Accumulated deficit | (646,253 | ) | (585,342 | ) | ||||
Total stockholders’ equity (deficit) | 72,389 | (32,481 | ) | |||||
Total liabilities and stockholders’ equity (deficit) | $ | 357,149 | $ | 261,515 |