HALOZYME REPORTS FOURTH QUARTER AND FULL YEAR 2023 FINANCIAL AND OPERATING RESULTS
- Strong financial performance for Q4 2023 and FY 2023, with total revenue reaching $829 million and a 26% YoY growth.
- Reiteration of 2024 financial guidance of $915-985 million in total revenue, a 10-19% YoY growth, and a $750 million share repurchase program.
- Positive partner highlights including FDA acceptance for VYVGART Hytrulo and new drug applications by Takeda and Janssen.
- Q4 2023 revenue increased by 27% YoY to $230 million, with GAAP diluted EPS of $0.65 and non-GAAP diluted EPS of $0.821.
- None.
Insights
The financial results of Halozyme Therapeutics, Inc. indicate a substantial year-over-year growth in revenue, adjusted EBITDA and non-GAAP diluted EPS. The projected growth rates for total revenue (10-19%), adjusted EBITDA (26-37%) and non-GAAP diluted EPS (28-41%) for the fiscal year 2024 are noteworthy as they suggest a strong financial performance and operational efficiency. The initiation of a new $750 million share repurchase program could be interpreted as a signal of management's confidence in the company's future prospects and a commitment to delivering shareholder value. Share repurchases often improve earnings per share by reducing the number of shares outstanding, which can positively influence investor sentiment and the stock price.
However, one must consider the broader market conditions and sector performance when evaluating these figures. The biotechnology sector is known for its volatility and the high level of risk associated with the development and commercialization of new therapies. Additionally, the company's reliance on royalty revenue from partnerships and product sales, such as XYOSTED® and the performance of its ENHANZE® technology platform, are critical factors for its sustained growth.
Halozyme's strategic collaborations and licensing agreements, such as those with argenx, Takeda and Janssen, are pivotal for its revenue growth. The acceptance of a supplemental Biologics License Application by the FDA and marketing authorizations by the European Commission for products using Halozyme's ENHANZE® technology platform underscore the potential for expansion into new therapeutic areas and international markets. These partnerships not only provide immediate milestone payments but also secure long-term royalty streams.
Furthermore, the company's ability to leverage its proprietary ENHANZE® technology to enhance the delivery of biologics represents a competitive advantage in the pharmaceutical industry. This technology allows for subcutaneous administration of drugs that would otherwise require intravenous infusion, potentially improving patient compliance and expanding market share. The market's response to new drug approvals and the outcomes of ongoing clinical trials will be critical in assessing the company's future performance.
The clinical advancements mentioned, such as the first approvals of VYVGART Hytrulo and Tecentriq SC and positive phase 3 data readouts, are significant for Halozyme's business model, which capitalizes on the integration of its ENHANZE® drug-delivery technology with partner drugs. The technology's ability to facilitate subcutaneous drug administration can potentially reduce healthcare costs, improve patient quality of life and increase treatment adherence, which, in turn, may drive higher demand and adoption rates. The regulatory milestones achieved and the submissions for new drug applications suggest a robust pipeline with potential for growth in the biopharmaceutical market.
The financial implications of these clinical milestones are twofold: they can lead to an increase in milestone payments from partners and bolster the royalty revenue stream as these therapies gain market approval and are commercialized. However, it is crucial to monitor the regulatory review outcomes and market adoption post-approval to fully assess the long-term financial impact of these developments on Halozyme's revenue trajectory.
Reiterating 2024 Financial Guidance: Total Revenue of
Fourth Quarter Revenue Increased
Full Year 2023 Revenue Increased
Announcing New
"We are pleased to reiterate our 2024 financial guidance, which represents continued robust growth of total revenue, royalty revenue, adjusted EBITDA and non-GAAP diluted EPS, and builds upon our strong 2023 performance and results. Multiple, positive, value-creating events including the first approvals of VYVGART Hytrulo and Tecentriq SC and positive phase 3 data readouts with ENHANZE for VYVGART Hytrulo in CIDP, ocrelizumab SC and nivolumab SC all achieved in 2023, add new opportunities for continued revenue growth," said Dr. Helen Torley, president and chief executive officer of Halozyme. "Today's announcement of a new
Fourth Quarter and Recent Corporate Highlights:
- Reiterating 2024 financial guidance announced January 17th including total revenue of
$915 million $985 million 10% to19% , adjusted EBITDA of$535 million $585 million 26% to37% and non-GAAP diluted earnings per share of$3.55 $3.90 28% to41% . - In February 2024, the Company announced its third share repurchase program to repurchase up to
$750 million - In November 2023, Halozyme entered into an Accelerated Share Repurchase agreement to accelerate the remaining
$250.0 million $750 million
Fourth Quarter and Recent Partner Highlights:
- In February 2024, argenx announced that the
U.S. Food and Drug Administration ("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 of June 21, 2024. - In February 2024, Takeda submitted a New Drug Application in
Japan seeking approval for TAK-771, subcutaneous10% 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 received European Commission ("EC") marketing authorization for Tecentriq® subcutaneous ("SC") 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 in
Japan for VYVDURA® (efgartigimod alfa and hyaluronidase-qvfc) co-formulated with ENHANZE® for the treatment of adult patients with generalized myasthenia gravis ("gMG") including options for self-administration, resulting in a$5.0 million - In 2023, Roche filed ocrelizumab SC with ENHANZE® with regulatory authorities in the
U.S. , European Union andGreat Britain . - In November 2023, Halozyme and Acumen entered into a global collaboration and non-exclusive license agreement that provides Acumen access to ENHANZE® for a single target. Acumen intends to explore the potential use of ENHANZE® for ACU193, Acumen's clinical stage monoclonal antibody candidate to target Amyloid-β Oligomers for the treatment of early Alzheimer's disease.
- In November 2023, Teva announced FDA approval of the generic version of Forteo®, featuring Halozyme's multi-dose auto-injector pen platform for the treatment of osteoporosis among certain women and men.
- In November 2023, argenx received EC approval of VYVGART® SC (efgartigimod alfa and hyaluronidase-qvfc) co-formulated with ENHANZE® for the treatment of gMG in adult patients who are AChR antibody positive, and in December 2023, VYVGART® SC was made available to patients, resulting in
$23.0 million - In October 2023, Takeda initiated a Phase 2/3 study to evaluate the pharmacokinetics, safety, and tolerability of subcutaneous administration of TAK-881 in adult and pediatric participants with Primary Immunodeficiency Diseases.
Fourth Quarter 2023 Financial Highlights:
- Revenue was
$230.0 million $181.5 million 27% year-over-year increase was primarily driven by royalty revenue growth, higher product sales as a result of an increase in bulk rHuPH20 sales driven by partner demand and continued growth in XYOSTED® and an increase in milestone revenue. Revenue for the quarter included$122.1 million 15% compared to$106.0 million
Total revenue for the full year was$829.3 million $660.1 million 26% year-over-year growth. The increase was primarily driven by royalty revenue growth, full year revenue contributions from the Antares acquisition in May 2022, and higher sales of bulk rHuPH20, partially offset by timing of milestone revenue driven by partner activities. - Cost of sales was
$52.3 million $42.1 million
Cost of sales for the full year was$192.4 million $139.3 million - Amortization of intangibles expense was
$17.8 million $4.6 million
Amortization of intangible expenses for the full year$73.8 million $43.1 million $2.5 million - Research and development expense was
$21.3 million $22.6 million
Research and development expense for the full year was$76.4 million $66.6 million - Selling, general and administrative expense remained flat at
$37.6 million $37.7 million
Selling, general and administrative expense for the full year was$149.2 million $143.5 million - Operating income was
$101.0 million $74.5 million $337.6 million $267.5 million - Net Income was
$85.4 million $57.7 million $281.6 million $202.1 million - EBITDA was
$121.7 million $81.6 million $121.7 million $83.0 million
EBITDA for the full year was$435.6 million $314.5 million $426.2 million $358.9 million - GAAP diluted earnings per share was
$0.65 $0.42 $0.82 $0.48
GAAP diluted earnings per share for the full year was$2.10 $1.44 $2.77 $2.21 - Cash, cash equivalents and marketable securities were
$336.0 million $362.8 million $400.0 million
Financial Outlook for 2024
The Company is reiterating its financial guidance for 2024, which was initially provided on January 17, 2024. For the full year 2024, the Company expects:
- Total revenue of
$915 million $985 million 10% to19% 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 $525 million 12% to17% over 2023. - Adjusted EBITDA of
$535 million $585 million 26% to37% over 2023. - Non-GAAP diluted earnings per share of
$3.55 $3.90 28% to41% 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
Guidance Range | |||
Total Revenue | |||
Royalty Revenue | |||
Adjusted EBITDA | |||
Non-GAAP Diluted EPS |
Webcast and Conference Call
Halozyme will host its Quarterly Update Conference Call for the fourth quarter and full year December 31, 2023 today, Tuesday, February 20, 2024 at 1:30 p.m. PT/4:30 p.m. ET. The conference call may be accessed live with pre-registration via link: https://registrations.events/direct/Q4I871904. The call will also be webcast live through the "Investors" section of Halozyme's corporate website and a recording will be made available following the close of the call. To access the webcast and additional documents related to the call, please visit Halozyme.com.
About Halozyme
Halozyme is a biopharmaceutical company advancing disruptive solutions to improve patient experiences and outcomes for emerging and established therapies. As the innovators of ENHANZE® drug delivery technology with the proprietary enzyme rHuPH20, Halozyme's commercially-validated solution is used to facilitate the subcutaneous delivery of injected drugs and fluids, with the goal of reducing treatment burden for patients. Having touched more than 800,000 patient lives in post-marketing use in seven commercialized products across more than 100 global markets, Halozyme has licensed its ENHANZE® technology to leading pharmaceutical and biotechnology companies including Roche, Takeda, Pfizer, Janssen, AbbVie, Eli Lilly, Bristol-Myers Squibb, argenx, ViiV Healthcare, Chugai Pharmaceutical and Acumen Pharmaceuticals.
Halozyme also develops, manufactures and commercializes, for itself or with partners, drug-device combination products using its advanced auto-injector technologies that are designed to provide commercial or functional advantages such as improved convenience, reliability and tolerability, and enhanced patient comfort and adherence. The Company has two commercial proprietary products, Hylenex® and XYOSTED®, partnered commercial products and ongoing product development programs with several pharmaceutical companies including Teva Pharmaceuticals and Idorsia Pharmaceuticals.
Halozyme is headquartered in
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 longer term projections) and expectations for future growth, profitability, total revenue, royalty revenue, 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 and potential approvals of new partnered or proprietary products and the Company's development and partnership potential of a high volume auto-injector. 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 (including its high volume auto-injector), 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 filed with the Securities and Exchange Commission. Except as required by law, the Company undertakes no duty to update forward-looking statements to reflect events after the date of this release.
Contacts:
Tram Bui
VP, Investor Relations and Corporate Communications
609-359-3016
tbui@halozyme.com
Samantha Gaspar
Teneo
617-877-9710
samantha.gaspar@teneo.com
Footnotes:
1. Reconciliations between GAAP reported and non-GAAP financial information and adjusted guidance measures are provided at the end.
Halozyme Therapeutics, Inc. Consolidated Statements of Operations (Unaudited) (In thousands, except per share amounts) | ||||||||
Three Months Ended | Twelve Months Ended | |||||||
2023 | 2022 | 2023 | 2022 | |||||
Revenues | ||||||||
Royalties | $ 122,052 | $ 105,979 | $ 447,865 | $ 360,475 | ||||
Product sales, net | 79,602 | 61,163 | 300,854 | 191,030 | ||||
Revenues under collaborative agreements | 28,385 | 14,354 | 80,534 | 108,611 | ||||
Total revenues | 230,039 | 181,496 | 829,253 | 660,116 | ||||
Operating expenses | ||||||||
Cost of sales | 52,298 | 42,120 | 192,361 | 139,304 | ||||
Amortization of intangibles | 17,762 | 4,552 | 73,773 | 43,148 | ||||
Research and development | 21,336 | 22,566 | 76,363 | 66,607 | ||||
Selling, general and administrative | 37,608 | 37,749 | 149,182 | 143,526 | ||||
Total operating expenses | 129,004 | 106,987 | 491,679 | 392,585 | ||||
Operating income | 101,035 | 74,509 | 337,574 | 267,531 | ||||
Other income (expense) | ||||||||
Investment and other (expense) income, net | 5,360 | 852 | 16,317 | 1,046 | ||||
Inducement expense related to convertible note | — | — | — | (2,712) | ||||
Contingent liability fair value measurement gain | — | — | 13,200 | — | ||||
Interest expense | (5,220) | (4,570) | (18,762) | (16,947) | ||||
Net income before income taxes | 101,175 | 70,791 | 348,329 | 248,918 | ||||
Income tax expense | 15,787 | 13,089 | 66,735 | 46,789 | ||||
Net income | $ 85,388 | $ 57,702 | $ 281,594 | $ 202,129 | ||||
Earnings per share | ||||||||
Basic | $ 0.66 | $ 0.43 | $ 2.13 | $ 1.48 | ||||
Diluted | $ 0.65 | $ 0.42 | $ 2.10 | $ 1.44 | ||||
Weighted average common shares outstanding | ||||||||
Basic | 129,054 | 135,284 | 131,927 | 136,844 | ||||
Diluted | 131,035 | 138,601 | 134,197 | 140,608 | ||||
Halozyme Therapeutics, Inc. Consolidated Balance Sheets (Unaudited) (In thousands) | ||||
December 31, | December 31, | |||
ASSETS | ||||
Current assets | ||||
Cash and cash equivalents | $ 118,370 | $ 234,195 | ||
Marketable securities, available-for-sale | 217,630 | 128,599 | ||
Accounts receivable, net and contract assets | 234,210 | 231,072 | ||
Inventories, net | 127,601 | 100,123 | ||
Prepaid expenses and other current assets | 48,613 | 45,024 | ||
Total current assets | 746,424 | 739,013 | ||
Property and equipment, net | 74,944 | 75,570 | ||
Prepaid expenses and other assets | 17,816 | 26,301 | ||
Goodwill | 416,821 | 409,049 | ||
Intangible assets, net | 472,879 | 546,652 | ||
Deferred tax assets, net | 4,386 | 44,426 | ||
Restricted cash | — | 500 | ||
Total assets | $ 1,733,270 | $ 1,841,511 | ||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||
Current liabilities | ||||
Accounts payable | $ 11,816 | $ 17,693 | ||
Accrued expenses | 100,678 | 99,762 | ||
Current portion of long-term debt, net | — | 13,334 | ||
Total current liabilities | 112,494 | 130,789 | ||
Long-term debt, net | 1,499,248 | 1,492,766 | ||
Other long-term liabilities | 37,720 | 32,686 | ||
Contingent liability | — | 15,472 | ||
Total liabilities | 1,649,462 | 1,671,713 | ||
Stockholders' equity | ||||
Common stock | 127 | 135 | ||
Additional paid-in capital | 2,409 | 27,368 | ||
Accumulated other comprehensive loss | (9,278) | (922) | ||
Retained earnings | 90,550 | 143,217 | ||
Total stockholders' equity | 83,808 | 169,798 | ||
Total liabilities and stockholders' equity | $ 1,733,270 | $ 1,841,511 | ||
Halozyme Therapeutics, Inc. GAAP to Non-GAAP Reconciliations EBITDA (Unaudited) (In thousands) | ||||||||
Three Months Ended | Twelve Months Ended | |||||||
2023 | 2022 | 2023 | 2022 | |||||
GAAP Net Income | $ 85,388 | $ 57,702 | $ 281,594 | $ 202,129 | ||||
Adjustments | ||||||||
Investment and other income | (5,360) | (852) | (16,317) | (1,046) | ||||
Interest expense | 5,220 | 4,570 | 18,762 | 16,947 | ||||
Income tax expense | 15,787 | 13,089 | 66,735 | 46,789 | ||||
Depreciation and amortization | 20,693 | 7,114 | 84,856 | 49,641 | ||||
EBITDA | 121,728 | 81,623 | 435,630 | 314,460 | ||||
Adjustments | ||||||||
Gain on changes in fair value of contingent liability(1) | — | — | (13,200) | — | ||||
Inventory write-off(2) | — | — | 3,509 | — | ||||
Transaction costs for business combinations(3) | — | 1,391 | 278 | 21,934 | ||||
Severance and share-based compensation acceleration expense(4) | — | — | — | 22,552 | ||||
Adjusted EBITDA | $ 121,728 | $ 83,014 | $ 426,217 | $ 358,946 | ||||
Dollar amounts, as presented, are rounded. Consequently, totals may not add up. | |
(1) | Amount relates to fair value gain on contingent liability due to the termination of the TLANDO license agreement in September 2023 ("TLANDO Termination"). |
(2) | Amount relates to inventory write-off due to TLANDO Termination and amortization of the inventory step-up associated with purchase accounting for the prior year acquisition of Antares Pharma, Inc. ("Antares"). |
(3) | Amounts represent incremental costs including legal fees, accounting fees and advisory fees incurred for the prior year Antares acquisition. |
(4) | Amount represents severance cost and acceleration of unvested equity awards as part of the Antares merger agreement. |
Halozyme Therapeutics, Inc. GAAP to Non-GAAP Reconciliations Net Income and Diluted EPS (Unaudited) (In thousands, except per share amounts) | ||||||||
Three Months Ended | Twelve Months Ended | |||||||
2023 | 2022 | 2023 | 2022 | |||||
GAAP Diluted EPS | $ 0.65 | $ 0.42 | $ 2.10 | $ 1.44 | ||||
Adjustments | ||||||||
Inducement expense related to convertible notes | — | — | — | 0.02 | ||||
Share-based compensation | 0.07 | 0.05 | 0.27 | 0.17 | ||||
Amortization of debt discount | 0.01 | 0.01 | 0.05 | 0.06 | ||||
Amortization of intangible assets | 0.14 | 0.03 | 0.53 | 0.31 | ||||
Transaction costs for business combinations(1) | — | — | — | 0.16 | ||||
Severance and share-based compensation acceleration expense(2) | — | — | — | 0.16 | ||||
Amortization of inventory step-up at fair value(3) | — | (0.01) | 0.02 | 0.06 | ||||
Realized loss from marketable securities(4) | — | — | — | 0.01 | ||||
Prior income tax benefit adjustments | (0.04) | — | (0.04) | — | ||||
TLANDO Related Adjustments | ||||||||
Gain on changes in fair value of contingent liability(5) | — | — | (0.10) | — | ||||
Inventory write-off(5) | — | — | 0.03 | — | ||||
Impairment charge of TLANDO product rights intangible assets(5) | — | — | 0.02 | — | ||||
Income tax effect of above adjustments(6) | (0.01) | (0.03) | (0.12) | (0.17) | ||||
Non-GAAP Diluted EPS | $ 0.82 | $ 0.48 | $ 2.77 | $ 2.21 | ||||
GAAP & Non-GAAP Diluted Shares | 131,035 | 138,601 | 134,197 | 140,608 | ||||
Dollar amounts, as presented, are rounded. Consequently, totals may not add up. | |
(1) | Amount represents incremental costs including legal fees, accounting fees and advisory fees incurred for the prior year Antares acquisition. |
(2) | Amount represents severance cost and acceleration of unvested equity awards as part of the Antares merger agreement. |
(3) | Amounts relate to amortization of the inventory step-up associated with purchase accounting for the Antares acquisition. |
(4) | Amount represents a realized loss from the sale of our marketable securities to finance the prior year acquisition of Antares. |
(5) | Amounts relate to a fair value gain on contingent liability, inventory write-off and impairment of TLANDO product rights intangible assets due to the TLANDO Termination. |
(6) | Adjustments relate to taxes for the reconciling items, as well as excess benefits or tax deficiencies from stock-based compensation, and the quarterly impact of other discrete items. |
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SOURCE Halozyme Therapeutics, Inc.
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