HALOZYME REPORTS SECOND QUARTER 2023 FINANCIAL AND OPERATING RESULTS
- None.
- None.
Revenue Increased
Royalty Revenue Increased
Raised 2023 Non-GAAP Diluted EPS Guidance to
Updated Revenue Guidance to
"Our strong second quarter results with record revenue of
Recent Partner Highlights:
- In July 2023, argenx reported positive data from the ADHERE study evaluating VYVGART® Hytrulo with ENHANZE® in adults with chronic inflammatory demyelinating polyneuropathy ("CIDP"). The study met its primary endpoint resulting in a
61% reduction in risk of relapse compared to placebo. - In July 2023, Roche announced that the Phase III OCARINA II trial evaluating OCREVUS® (ocrelizumab) with ENHANZE® as a twice a year 10-minute subcutaneous injection met its primary and secondary endpoints in patients with relapsing forms of multiple sclerosis ("MS") or primary progressive MS ("RMS" or "PPMS").
- In June 2023, argenx received
U.S. Food and Drug Administration ("FDA") approval for VYVGART® Hytrulo injection with ENHANZE® for SC use for the treatment of generalized myasthenia gravis in adult patients who are anti-acetylcholine receptor ("AChR") antibody positive and in July 2023, VYVGART® Hytrulo was made available to patients, triggering in milestone payments and the right to receive royalties on net product sales.$33.0 million - In June 2023, Takeda announced positive results from a pivotal Phase 3 trial evaluating HYQVIA® for maintenance treatment of chronic inflammatory demyelinating polyneuropathy ("CIDP") and confirmed regulatory applications were under review in the
U.S. and European Union. - In April 2023, Takeda announced that the FDA approved a supplemental Biologics License Application ("sBLA") to expand the use of HYQVIA® to treat primary immunodeficiency in children.
Second Quarter 2023 Financial Highlights:
- Revenue in the second quarter was
compared to$221.0 million in the second quarter of 2022. The$152.4 million 45% year-over-year increase was driven by growth in ENHANZE® revenue streams with an increase in royalty revenue and an increase in milestone revenue due to the approval and launch of VYVGART® Hytrulo as well as the addition of product sales as a result of the Antares Pharma acquisition. Revenue for the quarter included in royalties, an increase of$111.7 million 31% compared to in the prior year period, primarily attributable to subcutaneous DARZALEX® (daratumumab).$85.3 million - Cost of sales in the second quarter was
, compared to$50.1 million in the second quarter of 2022. The increase was driven by an increase in product sales as a result of the Antares Pharma acquisition and amortization of inventory step-up associated with purchase accounting for the Antares Pharma acquisition.$33.9 million - Amortization of intangibles expense in the second quarter was
, due to the Antares Pharma acquisition, in which Halozyme acquired intangible assets that are amortized over a useful life related to the auto injector technology platform, XYOSTED® and TLANDO®.$17.8 million - Research and development expense in the second quarter was
, compared to$19.7 million in the second quarter of 2022. The increase is primarily due to an increase in compensation expense related to the ongoing combined larger workforce as a result of the Antares Pharma acquisition, which added device platform resources in regulatory, quality and manufacturing, as well as planned investments in ENHANZE®.$15.5 million - Selling, general and administrative expense in the second quarter was
, compared to$38.9 million in the second quarter of 2022. The decrease was primarily due to one-time transaction costs in the prior year, partially offset by an increase in compensation expense related to the ongoing combined larger workforce, including the addition of commercial resources in sales and marketing for the testosterone replacement therapy products.$57.5 million - Operating income in the second quarter was
, compared to operating income of$94.5 million in the second quarter of 2022. Net Income in the second quarter was$34.1 million , compared with net income of$74.8 million in the second quarter of 2022. EBITDA in the second quarter was$22.7 million , compared with EBITDA of$115.1 million in the second quarter of 2022. Adjusted EBITDA in the second quarter was$46.6 million , compared with Adjusted EBITDA of$115.1 million in the second quarter of 2022.$87.8 million - Earnings per Share: On a GAAP basis in the second quarter of 2023, diluted earnings per share was
, compared with$0.56 in the second quarter of 2022. On a non-GAAP basis, diluted earnings per share was$0.16 , compared with diluted earnings per share of$0.74 in the second quarter of 2022.1$0.53 - Cash, cash equivalents and marketable securities were
on June 30, 2023, compared to$348.3 million on December 31, 2022. The decrease was primarily due to the repurchase of common stock for$362.8 million in the first quarter of 2023.$150.0 million
Financial Outlook for 2023
The Company is increasing the lower end of revenue and EBITDA guidance ranges to reflect strong second quarter results. In addition, the Company is increasing non-GAAP diluted earnings per share guidance to reflect the impact of share repurchases that occurred earlier in the year. For the full year 2023, the Company now expects:
- Total revenue of
to$825 million , representing growth of$845 million 25% to28% over 2022 total revenue primarily driven by continued strength in Wave 2 products, including DARZALEX® SC (daratumumab) and Phesgo® (pertuzumab, trastuzumab and hyaluronidase) utilizing ENHANZE®, as well as full year auto-injector royalty and product contribution. The Company expects revenue from royalties of to$445 million , representing growth of$455 million 23% to26% . - EBITDA of
to$420 million , representing growth of >$440 million 30% over 2022. EBITDA excludes the impact of amortization costs related to the Antares Pharma acquisition.1 - Non-GAAP diluted earnings per share of
to$2.65 , representing growth of$2.75 20% over 20221. The Company's earnings per share guidance does not consider the impact of potential future share repurchases.
Table 1. 2023 Financial Guidance
Guidance Range | Previous Guidance Range | |||
Total Revenue | ||||
Royalty Revenue | ||||
EBITDA | ||||
Non-GAAP Diluted EPS |
Webcast and Conference Call
Halozyme will host its Quarterly Update Conference Call for the second quarter ended June 30, 2023 today, Tuesday, August 8, 2023 at 4:30 p.m. ET/1:30 p.m. PT. The conference call may be accessed live with pre-registration via this link: https://conferencingportals.com/event/QfiVLXsr. 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 the "Investors" section of www.halozyme.com.
About Halozyme
Halozyme is a biopharmaceutical company bringing disruptive solutions to significantly improve patient experiences and outcomes for emerging and established therapies. As the innovators of the ENHANZE® technology with the proprietary enzyme rHuPH20, Halozyme's commercially-validated solution is used to facilitate the delivery of injected drugs and fluids in order to reduce the treatment burden to patients. Having touched more than 700,000 patient lives in post-marketing use in six commercialized products across more than 100 global markets, Halozyme has licensed its ENHANZE® technology to leading pharmaceutical and biotechnology companies including Roche, Takeda, Pfizer, AbbVie, Eli Lilly, Bristol-Myers Squibb, Alexion, argenx, Horizon Therapeutics, ViiV Healthcare and Chugai Pharmaceutical.
Halozyme also develops, manufactures and commercializes, for itself or with partners, drug-device combination products using its advanced auto-injector technology that are designed to provide commercial or functional advantages such as improved convenience and tolerability, and enhanced patient comfort and adherence. The Company has a commercial portfolio of proprietary products including XYOSTED®, TLANDO® and NOCDURNA® and 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 2023) and expectations for future growth, achieving operational goals, profitability, revenues (including royalty, milestone and product sales revenue), EBITDA and 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. These forward-looking statements are typically, but not always, identified through use of the words "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 Securities and Exchange Commission.
Contacts:
Tram Bui
VP, Investor Relations and Corporate Communications
609-359-3016
tbui@halozyme.com
Dawn Schottlandt
Argot Partners
212-600-1902
Halozyme@argotpartners.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 June 30, | Six Months Ended June 30, | |||||||
2023 | 2022 | 2023 | 2022 | |||||
Revenues: | ||||||||
Royalties | $ 111,740 | $ 85,340 | $ 211,380 | $ 154,945 | ||||
Product sales, net | 73,889 | 46,300 | 134,683 | 68,440 | ||||
Revenues under collaborative agreements | 35,409 | 20,725 | 37,118 | 46,259 | ||||
Total revenues | 221,038 | 152,365 | 383,181 | 269,644 | ||||
Operating expenses: | ||||||||
Cost of sales | 50,070 | 33,943 | 85,240 | 49,865 | ||||
Amortization of intangibles | 17,835 | 11,403 | 35,670 | 11,403 | ||||
Research and development | 19,727 | 15,483 | 37,706 | 27,336 | ||||
Selling, general and administrative | 38,948 | 57,476 | 76,305 | 71,310 | ||||
Total operating expenses | 126,580 | 118,305 | 234,921 | 159,914 | ||||
Operating income | 94,458 | 34,060 | 148,260 | 109,730 | ||||
Other income (expense): | ||||||||
Investment and other (expense) income, net | 3,192 | (945) | 6,171 | (447) | ||||
Interest expense | (4,494) | (3,104) | (9,037) | (4,863) | ||||
Net income before income taxes | 93,156 | 30,011 | 145,394 | 104,420 | ||||
Income tax expense | 18,402 | 7,326 | 31,025 | 21,627 | ||||
Net income | $ 74,754 | $ 22,685 | $ 114,369 | $ 82,793 | ||||
Net income per share: | ||||||||
Basic | $ 0.57 | $ 0.16 | $ 0.86 | $ 0.60 | ||||
Diluted | $ 0.56 | $ 0.16 | $ 0.84 | $ 0.58 | ||||
Shares used in computing net income per share: | ||||||||
Basic | 131,730 | 137,937 | 133,369 | 137,798 | ||||
Diluted | 133,543 | 142,216 | 135,758 | 141,795 |
Halozyme Therapeutics, Inc Consolidated Balance Sheets (Unaudited) (In thousands) | ||||
June 30, | December 31, | |||
ASSETS | ||||
Current assets: | ||||
Cash and cash equivalents | $ 221,165 | $ 234,195 | ||
Marketable securities, available-for-sale | 127,110 | 128,599 | ||
Accounts receivable, net and contract assets | 246,179 | 231,072 | ||
Inventories, net | 132,406 | 100,123 | ||
Prepaid expenses and other current assets | 38,885 | 45,024 | ||
Total current assets | 765,745 | 739,013 | ||
Property and equipment, net | 74,559 | 75,570 | ||
Prepaid expenses and other assets | 18,409 | 26,301 | ||
Goodwill | 416,821 | 409,049 | ||
Intangible assets, net | 510,982 | 546,652 | ||
Deferred tax assets, net | 23,924 | 44,426 | ||
Restricted cash | — | 500 | ||
Total assets | $ 1,810,440 | $ 1,841,511 | ||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||
Current liabilities: | ||||
Accounts payable | $ 10,120 | $ 17,693 | ||
Accrued expenses | 105,431 | 96,516 | ||
Deferred revenue, current portion | 842 | 3,246 | ||
Current portion of long-term debt, net | — | 13,334 | ||
Total current liabilities | 116,393 | 130,789 | ||
Deferred revenue, net of current portion | 2,253 | 2,253 | ||
Long-term debt, net | 1,495,998 | 1,492,766 | ||
Other long-term liabilities | 30,875 | 30,433 | ||
Contingent liability | 13,888 | 15,472 | ||
Total liabilities | 1,659,407 | 1,671,713 | ||
Stockholders' equity: | ||||
Common stock | 132 | 135 | ||
Additional paid-in capital | 12,068 | 27,368 | ||
Accumulated other comprehensive loss | (1,615) | (922) | ||
Retained earnings (accumulated deficit) | 140,448 | 143,217 | ||
Total stockholders' equity | 151,033 | 169,798 | ||
Total liabilities and stockholders' equity | $ 1,810,440 | $ 1,841,511 |
Halozyme Therapeutics, Inc GAAP to Non-GAAP Reconciliations Net Income and Diluted EPS (Unaudited) (In thousands, except per share amounts) | ||||
Three Months Ended June 30, | ||||
2023 | 2022 | |||
GAAP Net Income | $ 74,754 | $ 22,685 | ||
Adjustments: | ||||
Share-based compensation | 9,622 | 5,635 | ||
Amortization of debt discount | 1,817 | 1,112 | ||
Amortization of intangible assets | 17,835 | 11,403 | ||
Transaction costs for business combinations(1) | — | 18,593 | ||
Severance and share-based compensation acceleration expense(2) | — | 22,552 | ||
Amortization of inventory step-up at fair value(3) | 763 | 4,454 | ||
Realized loss from marketable securities(4) | — | 1,727 | ||
Income tax effect of above adjustments(5) | (6,355) | (12,432) | ||
Non-GAAP Net Income | $ 98,436 | $ 75,729 | ||
GAAP Diluted EPS | $ 0.56 | $ 0.16 | ||
Adjustments: | ||||
Share-based compensation | 0.07 | 0.04 | ||
Amortization of debt discount | 0.01 | 0.01 | ||
Amortization of intangible assets | 0.13 | 0.08 | ||
Transaction costs for business combinations(1) | — | 0.13 | ||
Severance and share-based compensation acceleration expense(2) | — | 0.16 | ||
Amortization of inventory step-up at fair value(3) | 0.01 | 0.03 | ||
Realized loss from marketable securities(4) | — | 0.01 | ||
Income tax effect of above adjustments(5) | (0.05) | (0.09) | ||
Non-GAAP Diluted EPS | $ 0.74 | $ 0.53 | ||
GAAP & Non-GAAP Diluted Shares | 133,543 | 142,216 |
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 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 the realized loss from the sale of our marketable securities to finance the acquisition of Antares. |
(5) | 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. |
Halozyme Therapeutics, Inc GAAP to Non-GAAP Reconciliations EBITDA (Unaudited) (In thousands) | ||||
Three Months Ended June 30, | ||||
2023 | 2022 | |||
GAAP Net Income | $ 74,754 | $ 22,685 | ||
Adjustments: | ||||
Investment and other income | (3,192) | 945 | ||
Interest expense | 4,494 | 3,104 | ||
Income tax expense | 18,402 | 7,326 | ||
Depreciation and amortization | 20,628 | 12,546 | ||
EBITDA | 115,086 | 46,606 | ||
Adjustments: | ||||
Transaction costs for business combinations | — | 18,593 | ||
Severance and share-based compensation acceleration expense | — | 22,552 | ||
Adjusted EBITDA | $ 115,086 | $ 87,751 |
Halozyme Therapeutics, Inc. GAAP to Non-GAAP Reconciliations EBITDA (Unaudited) (In millions) | ||||||
Twelve Months | 2023 Guidance | Percentage | ||||
GAAP Net Income | $ 202 | |||||
Adjustments: | ||||||
Investment and other income | (1) | |||||
Interest expense | 17 | |||||
Income tax expense | 47 | |||||
Depreciation and amortization | 50 | |||||
EBITDA | 315 | |||||
Adjustments: | ||||||
Transaction costs for business combinations | 22 | |||||
Severance and share-based compensation acceleration expense | 23 | |||||
Adjusted EBITDA | $ 360 |
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SOURCE Halozyme Therapeutics, Inc.
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