Date of Report (Date of Earliest Event Reported): | February 21, 2019 |
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 | February 21, 2019 | |
HALOZYME THERAPEUTICS, INC. | ||||
February 21, 2019 | By: | /s/ Harry J. Leonhardt, Esq. | ||
Name: | Harry J. Leonhardt, Esq. | |||
Title: | Senior Vice President, General Counsel and Corporate Secretary |
Exhibit No. | Description | ||
Press release dated | February 21, 2019 |
• | In February 2019, Halozyme licensed its ENHANZE® drug delivery technology to argenx providing exclusive access to ENHANZE® for any product targeting the human neonatal Fc receptor FcRn, including argenx's lead asset efgartigimod (ARGX-113), and up to two additional targets. Under the terms of the agreement, argenx paid an upfront payment of $30 million to Halozyme, and will pay Halozyme $10 million per target for future target nominations and potential future payments of up to $160 million per selected target subject to achievement of specified development, regulatory and sales-based milestones. Halozyme will also receive mid-single digit royalties on sales of commercialized products. |
• | In January 2019, the U.S. Food and Drug Administration completed its review of the submitted clinical study protocol amendment and statistical analysis plan for HALO-301, which included a change in the primary endpoint to a single primary endpoint of overall survival (OS), with no additional questions or comments. |
• | In December, enrollment in HALO-301, the company's Phase 3 study evaluating PEGPH20 in metastatic pancreas cancer, was completed with approximately 500 subjects enrolled. The company projects the study will achieve its target of 330 OS events between August and November of 2019. Based on achieving this timeline, the company projects topline results will be available in the second half of 2019. |
• | In December, Roche dosed the first patient in a Phase 1b/2 study of Tecentriq® (atezolizumab) with ENHANZE® triggering a $5 million milestone payment to Halozyme. |
• | During the fourth quarter, BMS began recruitment for a Phase 1 study of OPDIVO® (nivolumab) with ENHANZE®. |
• | ENHANZE® partner Janssen continued to make progress in clinical studies for a subcutaneous co-formulation of Darzalex® (daratumumab) with the recent initiation of two additional Phase 3 trials. Janssen is planning regulatory filings in the second half of 2019. |
• | In October, Halozyme expanded its collaboration with Roche by licensing its ENHANZE® drug-delivery technology for exclusive development of a new undisclosed clinical stage therapeutic target resulting in an upfront payment of $25 million. |
• | Revenue for the fourth quarter was $60.2 million compared to $189.6 million for the fourth quarter of 2017. The year-over-year decrease was driven by $141.4 million upfront license fees for the BMS and Alexion agreements and a $15.0 million milestone payment from Janssen recognized in 2017, compared to $30.0 million in upfront and milestone revenue for the Roche collaboration recognized in 2018. The decrease was offset by a 9 percent growth in royalties on a reported basis from partner sales. Revenue for the fourth quarter included $19.3 million in royalties and $4.2 million in HYLENEX® recombinant (hyaluronidase human injection) product sales. |
• | Research and development expenses for the fourth quarter were $36.7 million, compared to $41.4 million for the fourth quarter of 2017. |
• | Selling, general and administrative expenses for the fourth quarter were $18.0 million, compared to $14.8 million for the fourth quarter of 2017. |
• | Net loss for the fourth quarter was $2.1 million, or $0.01 per share, compared to net income in the fourth quarter of 2017 of $123.9 million, or $0.85 per share. |
• | Cash, cash equivalents and marketable securities were $354.5 million at December 31, 2018, compared to $469.2 million at December 31, 2017. |
• | Net revenue of $205 million to $215 million, excluding revenue from any additional, new ENHANZE® global collaboration and licensing agreements; |
• | Operating expenses of $265 million to $275 million, or $225 million to $235 million excluding an expected increase in cost of goods sold. Excluding the cost of goods sold the modest increase in expenses is driven by ENHANZE partner support, and support of the potential commercialization of PEGPH20; |
• | Operating cash burn of $45 million to $55 million; |
• | Debt repayment of approximately $90 million, the company expects to pay off the remainder of the royalty-backed debt by the end of the first quarter of 2020; |
• | Year-end cash, cash equivalents and marketable securities balance of $210 million to $220 million. |
Three Months Ended | Twelve Months Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
Revenues: | ||||||||||||||||
Royalties | $ | 19,338 | $ | 17,668 | $ | 78,981 | $ | 63,507 | ||||||||
Product sales, net | 10,681 | 12,593 | 28,234 | 50,396 | ||||||||||||
Revenues under collaborative agreements | 30,213 | 159,303 | 44,647 | 202,710 | ||||||||||||
Total revenues | 60,232 | 189,564 | 151,862 | 316,613 | ||||||||||||
Operating expenses: | ||||||||||||||||
Cost of product sales | 5,622 | 7,488 | 10,136 | 31,152 | ||||||||||||
Research and development | 36,650 | 41,376 | 150,252 | 150,643 | ||||||||||||
Selling, general and administrative | 18,031 | 14,771 | 60,804 | 53,816 | ||||||||||||
Total operating expenses | 60,303 | 63,635 | 221,192 | 235,611 | ||||||||||||
Operating (loss) income | (71 | ) | 125,929 | (69,330 | ) | 81,002 | ||||||||||
Other income (expense): | ||||||||||||||||
Investment and other income, net | 2,017 | 1,080 | 7,578 | 2,592 | ||||||||||||
Interest expense | (3,755 | ) | (5,458 | ) | (18,041 | ) | (21,984 | ) | ||||||||
Net (loss) income before income taxes | (1,809 | ) | 121,551 | (79,793 | ) | 61,610 | ||||||||||
Income tax expense | 317 | (2,331 | ) | 537 | (1,361 | ) | ||||||||||
Net (loss) income | $ | (2,126 | ) | $ | 123,882 | $ | (80,330 | ) | $ | 62,971 | ||||||
Net (loss) income per share: | ||||||||||||||||
Basic | $ | (0.01 | ) | $ | 0.87 | $ | (0.56 | ) | $ | 0.46 | ||||||
Diluted | $ | (0.01 | ) | $ | 0.85 | $ | (0.56 | ) | $ | 0.45 | ||||||
Shares used in computing net (loss) income per share: | ||||||||||||||||
Basic | 144,203 | 141,718 | 143,599 | 136,419 | ||||||||||||
Diluted | 144,203 | 145,633 | 143,599 | 139,068 |
December 31, 2018 | December 31, 2017 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 57,936 | $ | 168,740 | ||||
Marketable securities, available-for-sale | 296,590 | 300,474 | ||||||
Accounts receivable, net | 30,005 | 22,133 | ||||||
Inventories | 22,625 | 5,146 | ||||||
Prepaid expenses and other assets | 20,693 | 13,879 | ||||||
Total current assets | 427,849 | 510,372 | ||||||
Property and equipment, net | 7,465 | 3,520 | ||||||
Prepaid expenses and other assets | 4,434 | 5,553 | ||||||
Restricted cash | 500 | 500 | ||||||
Total assets | $ | 440,248 | $ | 519,945 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 4,079 | $ | 7,948 | ||||
Accrued expenses | 49,529 | 39,601 | ||||||
Deferred revenue, current portion | 4,247 | 6,568 | ||||||
Current portion of long-term debt, net | 91,506 | 77,211 | ||||||
Total current liabilities | 149,361 | 131,328 | ||||||
Deferred revenue, net of current portion | 5,008 | 54,297 | ||||||
Long-term debt, net | 34,874 | 125,140 | ||||||
Other long-term liabilities | 2,118 | 814 | ||||||
Stockholders’ equity: | ||||||||
Common stock | 145 | 143 | ||||||
Additional paid-in capital | 780,457 | 731,044 | ||||||
Accumulated other comprehensive loss | (277 | ) | (450 | ) | ||||
Accumulated deficit | (531,438 | ) | (522,371 | ) | ||||
Total stockholders’ equity | 248,887 | 208,366 | ||||||
Total liabilities and stockholders’ equity | $ | 440,248 | $ | 519,945 |