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HALO / Halozyme Therapeutics, Inc. 8-K (Current Report)

SecurityHALO / Halozyme Therapeutics, Inc.
Form Type8-K
File Date2018-02-20

Document List

HALO / Halozyme Therapeutics, Inc. 8-K (Current Report)
HALO / Halozyme Therapeutics, Inc. EXHIBIT 99.1
Document




UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________________________________
FORM 8-K
_____________________________________________
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 
 
 
Date of Report (Date of Earliest Event Reported):
 
February 20, 2018
________________________
HALOZYME THERAPEUTICS, INC.
(Exact name of registrant as specified in its charter)
________________________
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
Not Applicable
(Former name or former address, if changed since last report)
  _________________________
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 





Item 2.02 Results of Operations and Financial Condition.
On February 20, 2018 , Halozyme Therapeutics, Inc. issued a press release to report its financial results for the fourth quarter and full year ended December 31, 2017 . A copy of the press release is attached as Exhibit 99.1, which is furnished under Item 2.02 of this report and shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, (the Exchange Act ) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language in such filing.
Item 9.01 Financial Statements and Exhibits.
Exhibit No.
Description
 
 
 
 
99.1
Press release dated
February 20, 2018
 
 
 






SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
 
 
 
 
 
HALOZYME THERAPEUTICS, INC.
  
 
 
 
 
February 20, 2018
 
By:
 
/s/ Harry J. Leonhardt, Esq.
 
 
 
 
 
 
 
Name:
 
Harry J. Leonhardt, Esq.
 
 
Title:
 
Senior Vice President, General Counsel, Chief Compliance Officer and Corporate Secretary





Exhibit Index

 
 
 
 
Exhibit No.
 
Description
 
 
 
 
 
99.1
 
Press release dated
February 20, 2018


Exhibit


Exhibit 99.1
https://www.sec.gov/Archives/edgar/data/1159036/000115903618000010/halozymea06.jpg
Contacts:
Jim Mazzola
858-704-8122
[email protected]

Chris Burton
858-704-8352
[email protected]

    



HALOZYME REPORTS FOURTH QUARTER AND FULL-YEAR 2017 RESULTS

-- Continued Momentum from ENHANZE ® Technology with Q4 Royalty Revenue Increasing 24 Percent from Prior-Year Period to $17.7 million --

-- HALO-301 Study of Investigational New Drug PEGPH20 Remains on Track to Achieve Target Number of Progression-Free Survival Events Late in Q4 --

-- Strong Financial Performance in 2017 Results in $469 million of Cash Entering 2018 --


SAN DIEGO, February 20, 2018 - Halozyme Therapeutics, Inc. (NASDAQ: HALO), a biotechnology company developing novel oncology and drug-delivery therapies, today reported financial results and recent highlights for the fourth quarter and full-year ended December 31, 2017.

“Building on a truly transformative year in 2017, we begin 2018 executing against a strong portfolio of new ENHANZE collaborations,” said Dr. Helen Torley, president and chief executive officer. “With Janssen now studying Darzalex ® SC in four Phase 3 trials, Roche recently initiating a Phase 1 study with ENHANZE and multiple targets projected to enter the clinic in the coming quarters, we have good line of sight to our goal of having six targets in clinical development by year-end, doubling the number of targets in the clinic from 2017.

“In our oncology pillar, we continue to project achieving the target number of progression-free survival events in HALO-301 late in the fourth quarter of 2018. In addition, we are making good progress in our exploration of the pan-tumor potential of PEGPH20 and look forward to sharing response-rate data from our combination studies with Halaven ® and potentially with Keytruda ® in the second half of the year. We begin 2018 in a strong position with multiple value-generating opportunities ahead for patients, the company and for shareholders.”
  





Fourth Quarter 2017 and Recent Highlights include:

Janssen expanding its development program for the subcutaneous formulation of DARZALEX (daratumumab) with six planned and ongoing clinical studies. Halozyme’s ENHANZE technology has the potential to enable a 15-ml injection to be delivered in five minutes or less. The ongoing or planned trials in patients with Amyloidosis, Smoldering Myeloma and Multiple Myeloma include four Phase 3 studies, one Phase 2 study and one Phase 1 study .

Roche initiating a Phase 1 study of an undisclosed target with Halozyme’s ENHANZE drug-delivery technology.

Alexion announcing plans to initiate a Phase 1 trial in 2018 to study a next-generation subcutaneous formulation of ALXN1210 (ALXN1210 SC) with ENHANZE.

Baxalta and Roche achieving commercial milestones for products using ENHANZE triggering $5 million and $7 million in respective milestone payments.

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 continues to project will be in late Q4 .

Fourth Quarter 2017 Financial Highlights

Revenue for the fourth quarter was $189.6 million compared to $39 million for the fourth quarter of 2016 . The year-over-year increase was driven by $101.4 million recognized upon the effective date of the BMS collaboration, a $15 million milestone payment from Janssen, a $40 million upfront payment from Alexion 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. Revenue for the fourth quarter included $17.7 million in royalties, an increase of 24 percent from the prior-year period, $8.4 million in sales of bulk rHuPH20 primarily for use in manufacturing collaboration products and $4.2 million in HYLENEX ® recombinant (hyaluronidase human injection) product sales.
Revenue for the full year was $316.6 million , compared to $146.7 million in 2016.
Research and development expenses for the fourth quarter were $41.4 million , compared to $41.3 million for the fourth quarter of 2016 .
Research and development expenses for the full year were $150.6 million , compared to $150.8 million in 2016.
Selling, general and administrative expenses for the fourth quarter were $14.8 million , compared to $12.2 million for the fourth quarter of 2016 . The increase was primarily due to personnel expenses, including stock compensation, for the period.
Selling, general and administrative expenses for 2017 were $53.8 million , compared to $45.9 million in 2016.





Net income for the fourth quarter was $123.9 million , or $0.85 per share, compared to net loss in the fourth quarter of 2016 of $27.4 million , or $0.21 per share.
Net income for the full year was $63 million , or $0.45 per share, compared to a net loss of $103 million in 2016, or $0.81 per share.
Cash, cash equivalents and marketable securities were $469.2 million at December 31, 2017 , compared to $316.9 million at September 30, 2017.

Financial Outlook for 2018

Halozyme reiterated its financial guidance of:

Net revenue of $115 million to $125 million, including 25% to 30% royalty growth;
Operating expenses of $230 million to $240 million;
Operating cash burn of $75 million to $85 million; and
Year-end cash balance of $305 million to $315 million .

Webcast and Conference Call
Halozyme will webcast its Quarterly Update Conference Call for the fourth quarter of 2017 today, Tuesday, February 20 at 4:30 p.m. ET/1:30 p.m. PT. Dr. Torley will lead the call, which will be webcast live through the "Investors" section of Halozyme's corporate website and a recording made available following the close of the call. To access the webcast and additional documents related to the call, please visit halozyme.com approximately fifteen minutes prior to the call to register, download and install any necessary audio software. The call may also be accessed by dialing (877) 410-5657 (domestic callers) or (334) 323-7224 (international callers) using passcode 769890. A telephone replay will be available after the call by dialing (877) 919-4059 (domestic callers) or (334) 323-0140 (international callers) using replay ID number 95494046.

About Halozyme

Halozyme Therapeutics is a biotechnology company focused on developing and commercializing novel oncology therapies that target the tumor microenvironment. Halozyme’s lead proprietary program, investigational drug pegvorhyaluronidase alfa (PEGPH20), applies a unique approach to targeting solid tumors, allowing increased access of co-administered cancer drug therapies to the tumor in animal models. PEGPH20 is currently in development for metastatic pancreatic cancer, non-small cell lung cancer, gastric cancer, metastatic breast cancer and has potential across additional cancers in combination with different types of cancer therapies. In addition to its proprietary product portfolio, Halozyme has established value-driving partnerships with leading pharmaceutical companies including Roche, Baxalta, Pfizer, Janssen, AbbVie, Lilly, Bristol-Myers Squibb and Alexion for its ENHANZE ® drug delivery technology. Halozyme is headquartered in San Diego. For more information visit www.halozyme.com .

Safe Harbor Statement

In addition to historical information, the statements set forth above include forward-looking statements (including, without limitation, statements concerning the Company's future expectations and plans for growth in 2018, entering into new collaboration agreements, the development and commercialization of product candidates, including timing of clinical trial results announcements and future development and





commercial activities of our collaboration partners, the potential benefits and attributes of such product candidates and expected financial outlook for 2018) that involve risk and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. The 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. Actual results could differ materially from the expectations contained in forward-looking statements as a result of several factors, including unexpected expenditures and costs, unexpected fluctuations or changes in revenues, including revenues from collaborators, unexpected delays in entering into new collaboration agreements, unexpected results or delays in development of product candidates, including delays in clinical trial patient enrollment and development activities of our collaboration partners, and regulatory review, regulatory approval requirements, unexpected adverse events and competitive conditions. These and other factors that may result in differences are discussed in greater detail in the Company's Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 20, 2018 .






Halozyme Therapeutics, Inc.
Condensed Consolidated Statements of Operations
(Unaudited)
(In thousands, except per share amounts)
 
 
Three Months Ended
 
Twelve Months Ended
 
 
December 31,
 
December 31,
 
 
2017
 
2016
 
2017
 
2016
Revenues:
 
 
 
 
 
 
 
 
Product sales, net
 
$
12,593

 
$
13,422

 
$
50,396

 
$
53,392

Royalties
 
17,668

 
14,289

 
63,507

 
50,984

Revenues under collaborative agreements
 
159,303

 
11,292

 
202,710

 
42,315

Total revenues
 
189,564

 
39,003

 
316,613

 
146,691

 
 
 
 
 
 
 
 
 
Operating expenses:
 
 
 
 
 
 
 
 
Cost of product sales
 
7,488

 
8,002

 
31,152

 
33,206

Research and development
 
41,376

 
41,349

 
150,643

 
150,842

Selling, general and administrative
 
14,771

 
12,227

 
53,816

 
45,853

Total operating expenses
 
63,635

 
61,578

 
235,611

 
229,901

 
 
 
 
 
 
 
 
 
Operating income (loss)
 
125,929

 
(22,575
)
 
81,002

 
(83,210
)
Other income (expense):
 


 


 


 


Investment and other income, net
 
1,080

 
366

 
2,592

 
1,326

Interest expense
 
(5,458
)
 
(5,599
)
 
(21,984
)
 
(19,977
)
Income (loss) before income taxes
 
121,551

 
(27,808
)
 
61,610

 
(101,861
)
Income tax (benefit) expense
 
(2,331
)
 
(422
)
 
(1,361
)
 
1,162

Net income (loss)
 
$
123,882

 
$
(27,386
)
 
$
62,971

 
$
(103,023
)
 
 
 
 
 
 
 
 
 
Net income (loss) per share:
 
 
 
 
 
 
 
 
Basic
 
$
0.87

 
$
(0.21
)
 
$
0.46

 
$
(0.81
)
Diluted
 
$
0.85

 
$
(0.21
)
 
$
0.45

 
$
(0.81
)
 
 

 

 

 

Shares used in computing net income (loss) per share:
 

 

 

 

Basic
 
141,718

 
128,185

 
136,419

 
127,964

Diluted
 
145,633

 
128,185

 
139,068

 
127,964






Halozyme Therapeutics, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
(In thousands)
 
 
December 31,
2017
 
December 31,
2016
ASSETS
 
 
 
 
Current assets:
 
 
 
 
Cash and cash equivalents
 
$
168,740

 
$
66,764

Marketable securities, available-for-sale
 
300,474

 
138,217

Accounts receivable, net
 
22,133

 
15,680

Inventories
 
5,146

 
14,623

Prepaid expenses and other assets
 
13,879

 
21,248

Total current assets
 
510,372

 
256,532

Property and equipment, net
 
3,520

 
4,264

Prepaid expenses and other assets
 
5,553

 
219

Restricted cash
 
500

 
500

Total assets
 
$
519,945

 
$
261,515

 
 
 
 
 
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
 
 
 
 
Current liabilities:
 
 
 
 
Accounts payable
 
$
7,948

 
$
3,578

Accrued expenses
 
39,601

 
28,821

Deferred revenue, current portion
 
6,568

 
4,793

Current portion of long-term debt, net
 
77,211

 
17,393

Total current liabilities
 
131,328

 
54,585

 
 
 
 
 
Deferred revenue, net of current portion
 
54,297

 
39,825

Long-term debt, net
 
125,140

 
199,228

Other long-term liabilities
 
814

 
358

 
 
 
 
 
Stockholders’ equity (deficit):
 
 
 
 
Common stock
 
143

 
130

Additional paid-in capital
 
731,044

 
552,737

Accumulated other comprehensive loss
 
(450
)
 
(6
)
Accumulated deficit
 
(522,371
)
 
(585,342
)
Total stockholders’ equity (deficit)
 
208,366

 
(32,481
)
Total liabilities and stockholders’ equity (deficit)
 
$
519,945

 
$
261,515


###