Halozyme Therapeutics, Inc. Price & Performance (HALO)

Certain non GAAP or adjusted financial measures are reconciled with the comparable GAAP financial measures in our earnings press release and slide presentation. I will now turn the call over to Doctor. Helen Torley. Thank you, Tom, and good afternoon, everyone. Our strong fourth quarter results concluded what proved to be an exceptional year for Halozyme Halozyme. I will start by recapping our record breaking performance in 2024. Total revenue exceeded $1,000,000,000 for the first time, growing 22% over prior year. We also raised our financial guidance twice during the year. And I'm pleased to report that full year results exceeded our raised guidance for royalty revenue adjusted EBITDA and non GAAP EPS. We estimate that 1,000,000 peso have now received drugs delivered subcutaneously with ENHANZE, establishing unsurpassed and we believe unsurpassable safety database to inform regulators and new partners. Importantly, multiple impressive milestones were achieved in 2024. That will accelerate our near term and long term growth, and extend the durability of the royalty revenue streams. Four major products are new indications with ENHANCE, received approval in a major region adding future growth. Current Partners nominated five new targets to advance into the clinic for subcutaneous development expanding opportunity.

We extended the patent protect of ENHANZE in Europe out to 2029 with issuance of a new patent with the effect of maintaining our royalty rate for DARZALEX subcutaneous and amivantumab subcutaneous unchanged at the mid single digit rate for the next five years until March of twenty twenty nine. And we also remain confident in the opportunity for The U. S. Patent reissue which will have the same effect of extending full royalty rate, in this case, from September of twenty twenty seven to March of twenty twenty nine. Noting that this is currently not reflected in our five year financial outlook. This remarkable financial and operational performance plus our continued business expansion will deliver strong revenue and earnings growth for many years to come. Moving now to Slide four, I'll just call out SaaS's few financial highlights before I provide more details on the key business drivers. Our strong fourth quarter performance resulted in record full year 2024 results. Strong royalty revenue growth of 27% in 2024 resulted in $571,000,000 in royalty revenue exceeding our raised guidance and that was a key driver of total revenues exceeding $1,000,000,000 And this strong revenue performance coupled with our careful management of expenses, resulted in 2024 net income increasing an impressive 58% year over year to $444,000,000 As we discussed in January on our 2025 and multiyear guidance The momentum and opportunity we have across our business gives us confidence that we are firmly on track to deliver another record year and to meet our target in 2025 and beyond.

I'm pleased to reiterate our 2025 guidance including for total revenue, where we project $1,150,000,000 to $1,225,000,000 representing growth of 13% to 21% year over year. This continued strong growth will be primarily driven by three products: DARZLEX Subcutaneous, SESSCO and Five Star HYTrullo. Let me begin with Darklyx on Slide five. For the fourth quarter of twenty twenty four, Johnson and Johnson reported worldwide sales of DARZALIC grew almost 24% on an operational basis to $3,100,000,000 with full year revenue We are delighted that DARZLEX growth and total revenue was driven by demand for DARZLEX subcutaneous with 95% share of total DARZLEX sales in The United States, and has a similar high share of sales outside The United States too. DARFLEX growth was driven by share gains of over three points across all lines of therapy and importantly by six points of growth in the longer treatment duration frontline setting. DARZALIKES now represents J and J's largest product, [indiscernible] This growth is a result of investments Johnson and Johnson has made in new studies to increase access to DARZALEX subcutaneous with ENHANZE for more early stage and frontline patients. Further expanding the commercial opportunity, As examples, in 2024, DARZALEX SUCTANIS with ENHANCE in U. S. And European regulatory approval for newly diagnosed patients who are eligible for autologous stem cell transplant.

In a combination regimen. A supplemental BLA has also been submitted for FDA approval for DARZALEX subcutaneous within hands as part of a quadruplet regimen for newly diagnosed multiple myeloma patients for whom autologous stem cell transplant is deferred or they are ineligible. And we're also anticipating U. S. And European approval for smoldering multiple myeloma. Each of these represents a compelling growth opportunity for DARZLEX Subtaneous. These advancements support analyst projections of more than $17,000,000,000 in total revenue for DARZALEX in 2028, with virtually all of this coming from DARZALEX subsidies with ENHANZE. And recall, we predict earning royalties in DARZALEXCEPTINIS until 02/1932. I'll now move to our second key driver, which is Roche's [indiscernible] FESGO is the combined therapy of Projeta, Herceptin and ENHANZE. Which is given in a single seven minute subcutaneous injection for the treatment of breast cancer. We believe FESKO is an underappreciated asset that has been garnering growing adoption globally. In the fourth quarter, Roche reported that FESSCO grew to CHF500 million, representing an increase of 72% year over year. And reached CHF1.7 billion, or approximately CHF2 billion for full year 2024. Fiasco had a strong uptake across all regions with conversion climbing to 46% in the 55 launch countries.

Roche commented that they project conversion will continue to increase and will exceed 50% in 2025. With these strong results and expectations for continued growth, analysts project FESCO will reach $3,400,000,000 in revenue in 2028 all of which is substantiated use with ENHANZE. And recall, we project earning mid single digit royalty on FASCO until 02/1930. Let me now transition to REGENX's VIBGART and VIVEGAR HATTRUDA within hand on Slide seven. Ardenix pre announced preliminary results in January. With total VybeGuard including VybeGuard, Haltrila with ENHANZE fourth quarter sales reaching $737,000,000 for full year revenue of $2,200,000,000 This remarkable launch success is driven predominantly generalized Myacina Gravis, where Vadgar Hextralia with ENHANZE was approved in 2023. Vygaard Hertrula with ENHANCE is playing a key role in Vygaard growth by expanding the number of physicians using Vivgar, adding those who do not wish to, or who cannot administer IV infusions. The ease of use of subcutaneous delivery is also enabling Vygardt to move earlier in the treatment paradigm expanding the addressable population. And note that we project earning royalties in Viagra Hertrulow through the early two thousand and forty. Further innovations that will expand the Vysegrat Huttrula With Enhanced Opportunity Is Projected In The United States in April of twenty twenty five.

With the potential FDA approval of a pre filled syringe treatment option for Vyvansekar, Curula with ENHANZE for all of the currently approved indications. Halethan co created the prefilled syringe with Hergenics which may allow patients self administration in just twenty seconds. Argenx is also expecting the prefilled [indiscernible] and Canada in 2025. Halozyme will receive the same royalty rate on the pre filled syringe delivery as we receive on the file. Also through the early 2040s. Let me move now to the second indication, which is chronic inflammatory dalomyelinating polyneuropathy or CIDP. Which is a stop cutaneous Vibacart hematullia with enhanced only indication. This is an exciting new growth driver that is really just beginning following the mid-twenty twenty four approval in The United States and the end of twenty twenty four approval in Japan. Argenx has seen strong interest and adoption with more than one thousand CIDP patients already receiving Vyevgar Hetrolib. The patient testimonials shared by argenx tell a powerful story of how VIBGAR HITRULO is helping CIDP patients regain their lives. Strong progress has been made in gaining that all important with now ninety percent of covered lives having access to Bifur Hetrolo for CIDP under favorable or highly favorable policies, The brand is also benefiting from a halo effect of Regenexx being able to promote CIDP next to Generalize Myosin Air Gravis to open up new prescribers.

Already 25% of prescribers for CIDPs were physicians who had not previously been seen by argenx. In 2025, argenx projects to continue on this powerful trajectory. And also to expand the number global approvals in CIDP. And not only are we just at the beginning in terms of these two indication launches, As you can see on Slide eight, Halozyme's journey with argenx on their next wave of innovation for VybeGuard highlights the many exciting opportunities for many years to come. With multiple active subcutaneous programs with ENHANZE in development including in thyroid eye disease and ocular myosinibravus. And as we look out even further, our journey with argenx was enhanced in 2024 with four new nominations with ENHANZE which creates new opportunity and reinforces our leadership position as argenx's rapid large volume subcutaneous delivery technology of I'll move now to Slide nine. We had three additional significant approvals in 2024. Becoming more meaningful in 2026 and beyond. Let me begin with Roche's Ocrevus Sanuvel. Which received EMA and FDA approval for the treatment of Ocrevista Nuva with ENHANZE, allows for an approximately ten minutes subcutaneous injection which compares with multiple hour infusions that is typically required for the IV administration time.

Roche has been very consistent with their comments that they believe the subcutaneous formulation with ENHANZE would expand the addressable market and grow the brand, adding prescribers and patients who did not have access to an infusion suite. In its most recent earnings call, Roche commented that the launch is progressing very much as planned with more than 2,500 patients on Ocrevus Sanuvo globally. In The United States, they're seeing positive signals with 50% share of new ORCHIVUS subcutaneous patients being naive to ORCHIVUS. This is great news for two reasons. Firstly, it demonstrates market expansion and growth for Ocrefus, which is being driven by 50% is coming from early conversion to subcutaneous ocrephous from the very large patient pool who are on intravenous ocrevus. Focusing on market expansion and growth, Roche commented that they are seeing accounts that have not used Okervis ID in the past who are now prescribing subcutaneous ORKRAVIS. With the permanent J code expected in April, and projected to accelerate uptake, Roche further commented that they are confident that Ocrevista Nuvo represents an incremental CHF2 billion or more than $2,000,000,000 opportunity for the brand. With full year 2024 sales reaching $6 This represents a very attractive growth opportunity for Halozyme.

We project receiving mid single digit royalties on Ocrevus Anuvo until 02/1930, and at a step down rate until at least 02/1934. We are also excited that Roche's Tecentriqibriza was ENHANZE gained FDA approval in September of twenty twenty four. The approval was for all of the IV indications and offers patients and providers with a more convenient treatment option within approximately seven minutes subcutaneous injection. Total Tecentriq revenue represented CHF3.6 billion, or approximately US4 billion dollars in 2024. Roche plans to drive IV to SUBSCUE conversion and believes that the subcutaneous formulation will be protective of the brand. And recall that we project receivables on to Centra Ibiza until 02/1940. Moving now to Bristol Myers Squibb of VivoQ Vantage. Which was approved by the FDA in December of twenty twenty four. And represents our ninth approved product with ENHANCE. I will also note that the European submission is currently under review. Bristol Myers Squibb commented recently that they are excited from the launch and what it can mean for patients, physicians and the durability of their immuno oncology business with the new subcutaneous formulation helping to extend the reach and impact of our immuno oncology franchise into the next decade.

With their sales team out in the field relaying the benefits of Opdivo Q Vantage, Bristol shares that the early feedback has been positive for the shorter injection time compared to IV nivolumab. Initial positive feedback they highlighted is in use in the adjuvant patients and in patients who are treated in combination with the Urofelix such as in first line metastatic melanoma, and renal cell carcinoma. Bristol expects that thirty percent to forty percent of Opdivo IV could be converted to subcutaneous. Similar to any launch, reimbursement dynamics are going to take time. And BMS projects conversion will accelerate in the second half of twenty twenty five after they transition to our permanent J code in July. Avdevo Q Vantage represents another very attractive conversion opportunity for Halozyme. Opdivo, which is a brand name for IV nivolumab, grew 7% excluding FX in the fourth quarter to $2,500,000,000 and reach $9,300,000,000 in annual sales in 2024. Now, I may also take this opportunity to comment on amivantimab such subcutaneous, which would represent our TENS approved partner product. Recall amivantumab is included in our longer term projections as we consider it derisked following its strong Phase three data. Recently, Johnson and Johnson announced that they had received a positive opinion from the Committee for Medicinal Products of Human Use of the European Medicines Agency.

Recommending an extension of marketing authorization for the subcutaneous formulation of amivantumab with ENHANZE in combination with a lascetronib in the first line treatment of adult patients with advanced non small cell lung cancer. The European Commission approval is typically granted sixty seven days the recommendation which would support approval in the April 2025 timeframe. We're excited for the amivantumab subcu potential approval and put this could mean for patients. The subcutaneous formulation of amiventumab offers an improved treatment experience for patients, reducing administration time to approximately five minutes compared to anything from two to four hours for the IV. Importantly, there is also a fivefold reduction in infusion related [indiscernible] Moving now to The U. S. Timeline, In December, Johnson and Johnson announced that they had received a complete response letter for amibantamax subcutaneous, which was related to observations at part of a standard preapproval inspection at a manufacturing facility. J and J highlighted that the CRL is unrelated to the product formulation or the efficacy and safety data submitted in the regulatory application. And that the FDA is not requesting any additional clinical studies. They are working closely with the FDA to bring subcutaneous amivantamab to patients as quickly as possible and are confident in a path to resolution.

G and A has publicly commented that they believe Amivantimab has a $5,000,000,000 revenue potential. Moving now to Slide 10. We are confident in reaching our $1,000,000,000 royalty revenue projection in '20 and indeed we project we will exceed that. This confidence is driven by the DARZALEX and FESSCO, which represent a $20,000,000,000 total opportunity. And the layering of the four recent launches [indiscernible] [indiscernible] [indiscernible] and OPDIVO QVANTAGE plus the upcoming potential launch of adivantumab subcutaneous. Analysts project these five products represent an even greater opportunity in 2020 I know that you agree that the near term revenue growth 2028 is very strong. And I often get the question, what's next? The good news is that the launched and launching products that we've just reviewed continue to provide very strong revenue post 2028 and we project several current pipeline products will contribute additional meaningful revenue post twenty twenty eight-two. Let me walk you through some of the specifics, which are shown on Slide 11 SESSCO is projected to continue to grow post 2028 and earn Halozyme royalties at its full unchanged mid single digit rate until 02/1930. DARTHLEX phosphorone subcutaneous is projected to remain our largest revenue driver until 02/1932.

In Europe earning Halozyme royalties at its full unchanged mid single rate until March of twenty twenty nine. And to continue to earn as royalties at half that rate until 02/1932. In The United States, we are confident that the pending new manufacturing IP will be issued which would also result in Halozyme earning royalties at the unchanged mid single digit rate until March of twenty twenty nine, and continue to earn as royalties at half that rate until 02/1932. This is not currently reflected in our long term guidance. Vibra Hatrulho is projected to earn HALOZYMRAIL for all of its indications sold either in the vial or through the pre filter range at its full unchanged current mid single digit royalty rate until March of twenty twenty nine. And then to continue to earn royalties until 02/1933 at a mid single digit rate even after a step down in the royalty rate. Royalties will continue until the 2040s after further step down in rate. Moving to Oak Vista Nuvo, this is projected to earn Halozyme royalties at the full mid single digit rate until 02/1930 and at a step down rate until at least 02/1934. And with Tecentriq HIBRIZA projected to earn Halozyme royalties at full mid single digit rate until the 2040s, and Opdivo Q Vantage projected to earn Halozyme royalties until at least 02/1934.

You can see why we project continued strong revenue from the current launch products beyond 2028. In addition, we're confident that the more advanced derisked products from our pipeline will contribute revenue post 2028 For example, Opdivo fixed dose combination with rilatlimab and TAK-eight eighty one are two additional derisk revenue growth drivers post 2028. And we also anticipate additional products from our current Phase one pipeline new nominations from existing partners, and from new deals we'll add additional royalty revenue streams. Now let me turn to the very important topic of new deals and new nominations. Our discussions continue with multiple companies regarding enhanced new nominations, enhanced new deals, our high volume auto injector and our small volume auto injector, I'm going to start with some very exciting news on our small volume auto injector. I'm pleased to announce that yesterday, we signed a development agreement for our small volume auto injector with one of our current partners for a commercial product. Moving to ENHANZE, recall we have two paths for growth. The first is gaining new nominations by current partners and the second is through signing new deals. Beginning with the new nominations, In 2024, we made excellent progress with current partners selecting five new targets for ENHANZE.

In 2025, we will continue to work closely with partners to identify opportunities to select new nominations from the currently available open slots. Recall these additional new nominations together with our current drive durability of revenue post 2029. And moving to the new enhanced deals, we are in In 2025, our goal is to advance the collaboration and licensing agreements with at least one. And moving to our high volume auto injector, our goal is to advance to a development agreement this year. And often that's why we've not yet signed a deal with high volume oxygen injector. What's the hold up? Our high volume auto injector is a real innovation, which means some components are not available off the shelf. Some parts needed to be invented and designed. In 2024, we made progress with this securing an exclusive supply for a high volume primary container. This accomplishment has significantly de risked the high volume of injector for partners and we're actively engaged in discussions with several With that, let me now turn the call over to Nicole, who will discuss our financial results in more detail. Thank you, Helen. Our strong fourth quarter results marked the end to another record year for the company.

With the achievement of more than $1,000,000,000 in total revenue for the year. We grew total revenue by 22% and beat our guidance, which we increased twice during the year. And helped us grow non GAAP EPS by 53%. With our bottom line growth outpacing the top line, due to our high margin royalty revenue, we converted 74% of our adjusted EBITDA into free cash flow representing $468,000,000 Free cash flow is expected to increase over the next few years to 80% of adjusted EBITDA in 2026. As we look ahead, we remain firmly on track to hit another mile in 2027 with projections of more than $1,000,000,000 in royalty revenue Let me now turn to our detailed fourth quarter results on Slide 12. Revenue grew 30% to $298,000,000 compared to $230,000,000 in the prior year period. Growth was primarily driven by royalty revenue, up 40% to $170,000,000 and higher revenues under collaborative agreements up 70% to $48,000,000 mainly due to more milestones achieved for enhanced sales based milestones. The continued commercial success of subcutaneous STARZLEX and SESGO and early growth of VivGart Hytrolo for GMG. Which launched in 2023, were the main drivers for our royalty revenue growth for the quarter.

Adjusted EBITDA increased 61 percent $196,000,000 in the fourth quarter, from $122,000,000 in the prior year period, driven by high gross margins 86% coupled with modest operating expense growth of 5%. We also maintained a strong balance sheet, with cash, cash equivalents and marketable securities at $596,000,000 on 12/31/2024. Compared to $336,000,000 on 12/31/2023. Our net debt position was $929,000,000 with a net leverage ratio of 1.3 times. The increase in cash was primarily a result of cash generated from operations. Offset by $250,000,000 deployed for share repurchases. Turning now to Slide 13 for our detailed financial results for the full year 2024. I will briefly touch on some highlights here with more details available in our press release and 10 ks filed with the SEC today, Total revenues grew 22% year over year to $1,015,000,000 in 2024. Off an already substantial revenue base in 2023 of $829,000,000 Robust growth was primarily driven by 27% growth in loyalty revenue, totaling $571,000,000 as well as higher revenues under collaborative agreements and higher sales of proprietary products. Research and development expenses were $79,000,000 compared to $76,000,000 in 2023. Primarily due to planned investments in Enhance related to the development of our new high yield [indiscernible] Selling, general and administrative compared to $149,000,000 in 2023.

Primarily due to increased compensation expense and professional service fees. Partially offset by planned reductions in commercial marketing expenses. Adjusted EBITDA increased 48 percent $632,000,000 from $426,000,000 in 2023. GAAP diluted earnings per share was $3.43 and non GAAP diluted earnings per share was $4.23 This is compared with GAAP diluted earnings per share of $2.1 and non GAAP diluted earnings per share of $2.77 in '20 In January, we raised our previous 2025 financial guidance for total revenue our high margin royalty revenue, adjusted EBITDA, and non GAAP EPS. As you can see on Slide 14, we continue to expect total revenue of $1,150,000,000 to $1,225,000,000 dollars representing year over year growth of 13% to 21%. Royalty revenues of $7.25 to $750,000,000 representing year over year growth of 27% to 31%, As Helen touched on, we project DARZALIC SubQ and FESGO will continue to grow substantially in 2025 and for the first time, VISTART HYTRULO with ENHANCE is expected to be the largest royalty dollar growth driver. When you couple our high margin royalty growth with flat operating expenses from our continued focus on operational efficiencies, we expect adjusted EBITDA of between $755,000,000 representing year over year growth of 19% to 27%.

And non GAAP diluted EPS of $4.95 to $5.35 representing year over year growth of 17% to 26%. Let me also take the opportunity to highlight how to think about the quarterly cadence for modeling. We expect first quarter royalty revenue to be less than the fourth quarter of twenty twenty four by approximately 10% due to annual contractual rate resets. With quarterly sequential growth thereafter. We project total revenues to decrease sequentially from the fourth quarter of twenty the first quarter of twenty twenty five, as no milestones are planned in the first quarter. And milestones are expected to be weighted in the second half of the year, And our product sales are also expected to be weighted in the second half of 2025. Let me now turn to Slide 15, and highlight the remarkable growth we project over the next four years. From 2024 to 2028, we expect royalty revenue, adjusted EBITDA and non GAAP earnings per share will more than double while total revenue comes close to doubling. Increasing from our record greater than $1,000,000,000 we just achieved to $1,700,000,000 to $1,900,000,000 in 2028. Let me conclude on Slide 16 and provide an update on our share repurchase In December of twenty twenty four, we entered into a $250,000,000 ASR Under the $750,000,000 approved program from February of twenty twenty This will complete by the end of the first quarter of twenty twenty five.

Since the inception of the first program in 2019, we've returned $1,550,000,000 in share repurchases an average of approximately $250,000,000 a year. The average repurchase price from 2019 to 2023 was $31.46 per share. The impact of share repurchases has allowed us to reduce our diluted share count by 10%. As disciplined stewards of free cash flow, we will continue to evaluate share repurchase opportunities that offer a compelling return versus other capital deployment initiatives. Our strong EBITDA growth significantly derisks our capital position as we have capacity to cover our debt obligations without over extending our resources, as evidenced by our low net leverage profile of 1.3 times at year end, coupled with our impressive interest rate coverage of 30 times, we are in an excellent capital position to execute on both share repurchases and growth opportunities via M and A. With that, I'll now turn the call back over to Helen. Thank you, Nicole. We're truly at a remarkable time in Haemazim Halozyme. With nine products now approved and almost but one launched in multiple regions. Our high 2025 revenue and royalty growth is driven by just three of these products, [indiscernible] Cisco and Vyevgar Hatrulho, each of which bring durable revenues until at least 02/1930 and in the case of Five Garrotechulub, Tullo into the 2040s.

Our confidence and conviction in our multiyear guidance was further reinforced with the 2024 approvals of Tecentriq Ibreza, [indiscernible] and Opdivo QVANTAGE. Next up will be amivantamab subcu following the successful completion of the regulatory reviews. This adds for additional durable royalty streams which will begin to contribute meaningfully in 2026 and continue to at least in mid-2030s and in several cases to the 2040s. Our progress and performance would not have occurred without the dedication and hard work of the exceptional Halozyme team and our partners. And I'd like to take just a moment to thank everybody contributed. Operator, we are now ready to open the call for questions. At this time, I would like to remind everyone in order to ask a question. The first question comes from Sean Lamant from Morgan Stanley. Your line is open. Hi, Helen and Colin Tramm. Hope you're all well. And nice set of results. Congratulations. I guess over the last week and it's not lost on me that you've provided 28 guidance, which not many companies look out that far. But I guess a lot of the inbound that I get is what's beyond that and what's the terminal value should you think about with Halozyme?

So looking at your Slide 11, And some of the issues that are going on there What's your confidence around some of the new uses, for example? We're we've got that you've detailed today? And and maybe even some of the further argenx related program that might come on board to mitigate any reduction in earnings beyond that sort of '28 period [indiscernible] Great. Thanks, Son, and welcome to the coverage of Halozyme. It's a great question. And in the prepared remarks, I I covered that the way we think about post-twenty twenty is really to look at the current 10 products that are approved or soon to be approved with amiventumab subcu and consider that they are going to continue to be contributing considerably at that time. And the slide that we show with the duration and raw rate really does help bring that picture into perspective showing every product will get royalties until 02/1930. Many of them will go to the mid-2030s and ones will also go to the 2040s. Now for Five Gartens particular, that is just considering GMG and CIDP. We are aware and we've got six products that are public that are already subcu development plans are soon to start with with argenx.

But I do think we're going to have to wait for the results. On a mechanistic basis, I have high confidence they're IgG driven diseases. And there's a lot of mechanistic rationale for why the work But we don't forecast them in our near term revenues just until we see that data. Now on top of that though, don't forget that we have a pipeline, which is in the deck as well. And if we look at some of the pipeline products, some like relatinibab, Opdivo and TAC eight eighty one, those are highly derisked as they already are approved as an IV and other formats. And so those will layer on top. Other products in that pipeline that are currently in Phase one, new nominations that we expect from current partners, and new deals all start to potentially contribute in that twenty eighttwenty nine timeframe as well. And so on top of that strong base we've got multiple opportunities to layer and add in it And that's what makes us so excited about the durability and the strength of our royalty revenues for many years to come.

Thank you. I might save the rest of my questions for when we're due to this evening, but thank you. Thanks, Sean.

The next question comes from the line of Brendan Smith of TD Cohen. Please go ahead. Your line is open.

Great. Thanks for taking the question. Congrats on the strong quarter.

Maybe really quickly on BD. Can you just tell us a bit more about what does the inclusion or integration of that small volume auto injector realistically due for the existing or new partnerships for that matter when you're having those BD conversations really just in terms of economics? And is that answer any different for the high volume auto injector And then just on the ENHANZE conversations, maybe what is left in some of those late stage discussions to really get partners over the finish line that gives you confidence in signing at least one new deal this year?

Yes. Thanks, Brandon. And obviously, we're excited to announce the small volume ultra injector deal with a current partner. Who signed up for a commercial product. Now that particular deal and any more information is confidential at this time. But what we can see is that when we add on a small injector deal, it starts with a development agreement. Those are structured in such a way that there's a certain fee for service if you think about it like that. As we make progress in creating and developing the auto injector. And then is that progress is made, we move into discussions on the commercial agreement. And for small volume injectors, the traditional structure would be that there would be a certain price per device depending on volume. That includes a margin or a markup for the manufacturer in the case of Halozyme. So it will be another revenue stream for Halozyme that would be reflected in product sales. Now that's specific for the small volumetric injector in but that does not need ENHANZE in it necessarily. When we think about the opportunity for the high volume auto injector, ENHANZE is the secret sauce for the high volume auto injector to work.

And so high volume multi injector deals will be either associated with our current partners who already have ENHANCE or could be with new parts auto injector. With shipper weight goes, it is driving new royalty streams for us. As it could be bringing new products into the clinic for current partners or brand new products into the clinic. And in addition to that, we would receive a certain fee product sales once again on the sale of each and every device that we sell. So a nice layering on of both royalty addition and product sales in the case of the high volume auto injector. And the current agreement with the small volume auto injector is I think a nice illustration of patients. We have been in that conversation for a period of time. We've continued to work through just internal reviews and approvals and it's exactly the same as what's happening on our discussions with high volume injector well, high volume auto injectors and also ENHANZE. And so we are in conversations with large pharma with biotech. We're at different stages, still in technical review with some, but moved on to terms discussions with others. And we just have to patiently walk through each company's process to get to that decision.

But based on the progress that we've continued to make, and I know from the outside it seems slow, but we are very pleased with the progress we're making, I am very confident we're going to sign additional enhanced deals and high volume auto injector deals. We just have to go through the processes.

Okay, great. Very much. Thanks, Brian.

The next question comes from the line of Mohit Bansal from Wells Fargo. Please go ahead. Your line is open.

Great. Thank you very much for taking my questions.

And congrats on all the progress. So a couple of questions from my side. One is, Nicole, you mentioned that you're modeling negative 10% royalties for first quarter over fourth quarter. Hello. Can you help me understand What is the part of the dynamics there because it has not happened in the past and specifically, VivGuard and CIDP launch is going really well. That's the first question. And the second question is, how are you incorporating pre sales sales transition and its uptake in the guidance because it seems to be going really well? Yes. Thanks for the question, Mogi.

So when we look at royalties quarter over quarter, what we're seeing is, we do have contracts that have an annual rate reset. So that will start over in January at a lower rate and as we achieve volumes during the year, it gets back to the regular rate. The most material impact to us is from DARZALEX And we have seen that last year, but as DARZALEX continues to grow and contribute more, that impact is just a little bit more impactful to us. So that is the biggest driver I would say in the quarter over quarter impact that we see. With that product, I can share that the time to get to the full rate is very quick. It happens within the first few months of the year. So it is just a small portion of the quarter leading that impact. And then also just highlight too, we also see an impact related to our EpiPen royalties. That's just related to seasonality That's also something we expect in the first quarter. But so those are really the drivers for just that sequential quarter over quarter growth. But also highlighting very strong sequential growth expected in 2025 for the full year.

It's achieving full year growth from prior year of 27% to 31%, so very strong expectations for the full year. And the second question, Nicole, Mohit, would you you cut out a little bit for me on the second question. Would you mind just repeating it?

Sure.

Thank you for the first answer. So how are you incorporating refill syringe transition for VIBGARD and uptake in the guidance? Because it seems to be going really, really well here.

Yes. Based on public comments that argenx has made, they are expecting the prefilled syringe approval in April. Of this year. I think we've talked in the past that we meet with our partners towards the end of the year and they give us their projections arranged for performance in 2025. And so we understand that argenx will have contemplated that in the information and the range they gave us. So while we can't get into specifics, it does our guidance already reflects the potential increase that prefilled syringe could bring. And I think what people are, I think, very excited about, it can bring potential for a twenty second at home injection by patients. And could be adding more patients in both GMG and CIDP in 2025. We believe it's already reflected in the ranges we received. Great. Thank you, sir. Thank you. Thank you, Alan and Nicole. The next question comes from the line of Jessica Fye from JPMorgan. Your line is open. Hey guys, good evening. Thanks for taking my questions. With the small volume auto injector deal you signed with an existing existing partner for existing commercial product. When would you anticipate that we might discover which partner that was and on which product?

And just for the avoidance of doubt, this was for a product that's not a current ENHANZE product. Is that correct? And then second, just a quick one. Can you just remind us how you define mid single digits when you talk about the royalties you receive? Thank you.

All right, Seth. I'll take the first one. So obviously, we're excited that we just signed the small volume of injector. Based on the partner's desire to keep this confidential. We actually have not missed established with them yet when they would want to talk about it.

And I really can't see any more about it at at this period of time. But we obviously are interested in communicating as soon as possible and we'll provide updates as soon as we learn more with regard to that. Nicole, would you talk about the range for mid single digits? Yes. So when we talk about mid single digit, we're really plus or minus 5%. And so in our minds, we use 3% to 7% to represent mid single digits. Great. Thank you. The next question comes from the line of Michael Dufour from Evercore ISI. Please go ahead. Your line is open.

Hey, guys. Thanks for taking my question and congrats on the progress this year.

In light of the fact that, Vidyard's overall brand sales in 4Q had a noticeable inflection, and your comments on how VivGuard HYTRA will be the biggest growth want to get your take on whether 2025 may be the year that the subcu formulation exceeds the IV sales. The extent that you can, if you could add any color on that, I know back in November, argenx mentioned that the IV still comprises the bulk of sales, but wondering if you see any change in the mix over the course of 2025?

Yes. Thanks for that question, Mike. I mean, obviously, the comments that Arginic has made, we're delighted with the success and up uptake that we're seeing with Vygart both in CIDP and at GMG. In terms of WAYNE M, Vybe Gart subcu could take over IV, as Argenix has note, provided any perspective on that, it wouldn't be appropriate for us to comment on that. But certainly, we are hearing very much that because it's allowing more physicians to start prescribing, because it's moving therapy earlier in the treatment, and because the CIDP launch is going so well already. With already 1,000 patients on treatment, we are very excited to win that event actually happens, but I can't communicate when that's anticipated. Got it. I have one quick follow-up too. Thank you for that, Helen.

And maybe I'm reading too much into this, but on Slide 23, the three undisclosed products and indications at the bottom of the table on Slide 23. Could this mean that three new deals are expected to be announced this year or does that reflect current partnerships? Thank you.

Yes, all of those three are coming from current partners. As an example, recall that we had five new nominations from current partners last year, but we also have the opportunity for our current partners also to nominate any time with their open slot And so all of them are current partners and any new deals moving forward would be over and above that.

Got it. Thanks so much.

The next question comes from Jason Butler from Citizens JMP. Your line is open.

Hi, thanks for taking the questions.

Helen, you mentioned for the large volume auto injectors, both the need and the work you did in 2024 to invent and build new device components I guess to what extent is that work potentially specific to a product or small number of products versus broadly leverageable across multiple partnering conversations, And then second question for me is, I guess for Nicole, any color you can give on what remaining on the $250,000,000 accelerated buyback Thanks.

Yes. With the high volume injector, we have been engaged in multiple conversations with various companies and it has given us a perspective as to what is going to be an attractive primary container. And so that's exactly what we proceeded with. We believe that what we have moved with that particular element will be suitable for multiple partners. Now it might not be suitable for every partner. Someone may want something custom developed but we decided to make the investment so that we are ready and prepared for partners who are most likely going to want that size of primary container based on the conversations that we have had. Nicole, on the ASR? Yes. Thanks, Jason. On the ASR, I can't share specifically how much our bank has executed through the $250,000,000 They did start executing on our behalf in December that will run for a number of months. But the benefit recall the benefit of this is that we did get a approximately an estimate of 80% of the shares delivered to us in December. So those were retired at the start of the program. At the final settlement date, we will then calculate with our bank what the final average purchase price was and the final the final delivery of the shares So have already received a good majority of the benefit from a retiring the shares perspective.

And then in the coming months, we will know the final, averaging date and have completed the $250,000,000 Great.

Thank you. The next question comes from Michel Kapoor from H. C. Wainwright.

Your line is open. Good afternoon. This is Dan on for Mitch.

Congratulations on the earnings feed. Thanks for taking our questions.

So when you think about business development, are you more focused on larger deals or or groups of smaller deals? And are there any contract obligations prohibiting partnering agreements with PD-one BGF bispecific programs? And if not, what's the interest in partnering with one? Thank you. All right. Thanks for the question, Dan.

With regard to BD, I can say that we are talking to multiple companies across large and small deals. As you hear, small deals, which we could define as companies who are perhaps earlier stage can turn out to be incredibly attractive future opportunities. And I'll use the [indiscernible] when we kind of started working with them. And so we look at each individual opportunity, assess the opportunity and base proceed based on that. But we're talking about IV to subcu conversion, we're talking about subcu extended dose, we're talking about exclusive and non exclusive arrangements There's really a very nice array of opportunities that we are progressing towards consummation of deals in 2020 With regard to the specific question on the PD-onefive specific, based on the exclusive terms of the agreement we have with Bristol, we would not be able to partner on PD-one bispecific.

Okay. Thank you very much.

And that's the end of our Q and A session. Ladies and gentlemen, that concludes today's call. Thank you all for joining and you may now disconnect.