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Would also refer you to our SEC filings for a full list of risks and uncertainties. During the call, both GAAP and non GAAP financial measures will be discussed. Certain non GAAP or adjusted financial measures are reconciled with the comparable GAAP financial measures in our earnings press release and slide presentation. Will now turn the call over to Doctor. Helen Torley. Afternoon, everyone, and thank you for joining us today. It really has been a tremendous start to 2025.
11m 33s
Before I describe the many events and successes in the first quarter, let me begin by thanking the many shareholders and sell side analysts who participated in our investor feedback interviews earlier this year. We really appreciate your feedback, and it has been invaluable. Your feedback helped us understand more granularly the role that we are playing in different investor portfolios and we're very pleased to be considered your consistent stock grower. Not surprisingly, each of you recognize our leadership in drug delivery for biologics and how this foundation can be expanded to additional areas of drug delivery. All investors agreed on key themes about Halozyme. For example, no investor wants Halozyme to invest in drug development binary risk. We agree. All investors want to make sure that we maximize the organic growth represented by ENHANZE and our auto injectors by fully investing where there are opportunities. Again, we agree. And later this year, we will set schedule an update about potential new ENHANZE uses and the opportunity. All investors encourage us to also seek to grow inorganically. Through m and a.
12m 40s
While opinions differed about the exact destination for our m and a, all investors want us to remain disciplined about our net leverage. And we listen to your feedback. With this in mind, I am pleased to reiterate our strategy. Our goal, set simply, is to grow organically and through serial acquisitions excelling in licensing disruptive drug delivery platform technologies that improve the patient treatment experience and result in better outcomes. With the strategy, we aim to deliver strong and durable revenue and EBITDA growth. Well into the next decade. We will achieve this performance by continuing to focus first and foremost on organic growth, We will continue to invest in and grow ENHANZE and our auto injector businesses, for we are absolutely the best positioned company to capitalize on the growing pharma and patient priority for at home patient delivered treatment. We will also seek to grow inorganically through m and a. Our focus here is on identifying new drug delivery platforms where the business model results in long durable revenue streams such as through royalties, and where we see the opportunity to license to multiple pharma partners. We heard you in leverage, and we will be seeking deals that can be accomplished without the need for significant increase in net debt to EBITDA leverage.
14m 3s
And we heard how much our share buybacks are appreciated by our investors given the high IRR they have delivered. I am pleased to announce that we are planning to continue this in 2025. Announcing today the plan to repurchase $250,000,000 in shares. Let me now move to the Q1 performance beginning on Slide three. Now here's how I'd like you to think about our business, our performance, and our future. Firstly, we have three blockbusters that are driving our current growth. We'll go into more detail on those in a moment. Secondly, we have 11 new growth catalysts that have either just happened or will happen in the next month. These catalysts will drive our growth for multiple years to come. And thirdly, we have several products in our development pipeline plus our auto injector technology that will drive additional future growth.
14m 57s
As an example, today, we are pleased to amend our very first high volume auto injector agreement. Turning now to Slide four, let me briefly highlight the strong first quarter results. Total revenue increased 35% year over year to $265,000,000 with royalty revenue increasing by 39% to a hundred and $68,000,000 primarily driven by the three blockbusters DARZALEX subcutaneous, VESGO and Bydgar Hertullo. Adjusted EBITDA increased to $162,000,000 and non GAAP EPS increased to $1.11 both representing approximately 40% year over year growth. Net income also grew an impressive 54% in the quarter to $118,000,000 Let me now expand on the three blockbusters that are key revenue drivers and that are projected to keep growing for years to come, Darth Vague Fast Pro, [indiscernible] [indiscernible] I'll begin with Dorzalex shown on slide five. In the first quarter, Johnson and Johnson reported another strong quarter of growth for DARZALEX. Which increased 22% year over year on an operational basis to $3,200,000,000 The growth was primarily driven by continued share gains of approximately three points across all lines of therapy and approximately five points in the frontline setting. As well as through market growth. DARZALEX subcutaneous with ENHANZE, which is marketed as DARZALEX FASPRO in The United States, accounts for approximately 95% of all DARZALEX sales in The United States.
16m 38s
And commands a similarly high proportion of share in the major ex US markets. And DARZALEX continues to set the standard in multiple myeloma treatment with Johnson and Johnson's commitment to its clinical advancement continuing to solidify its role as the backbone of treatment across front and second line patients. Moving now to the first of the 11 new growth catalysts which is a recent European approval of a DARZALEX based quadruplet regimen for patients with newly diagnosed multiple myeloma regardless of eligibility. Further support near term growth, and the analyst estimates for DARZALEX to reach $17,000,000,000 in sales in 2028, with the subcutaneous formulation driving this growth and the vast majority of the sales. We project royalties on DARZALEX subcutaneous through 2032. Let me move now to slide six and Roche's PESCO. Which is the combined therapy of Perjeta, Herceptin, and ENHANZE. VSCO continues to demonstrate strong adoption and commercial success. In the first quarter, Tesco was the number one growth driver in Roche's pharmaceutical portfolio with sales increasing 52% to approximately $675,000,000 with strong performance in international regions. Our second new growth catalyst is FASCO gaining national reimbursement drug listing in China. With Roche commenting on their q one call that the growth in China is accelerating noticeably following the listing which happened earlier this year.
18m 10s
Conversion from Perjeta to Fasco is ongoing reaching 47% in the 58 launch countries in the first quarter, with expectations for conversion to reach more than 50% across global markets in 2025. In April of twenty twenty five, the CHMP recommendation in Europe to expand the FSGO label to allow administration outside of a clinical setting is our third growth catalyst. Availability of this option will deliver on patient preference for at home administration We see this also as an important step in freeing up cancer care capacity in the clinical settings. Sales of FSGO are projected to reach approximately $3,300,000,000 by 2028, entirely from the ENHANZE enabled subcutaneous formulation where we earn a mid single digit royalty on net sales through 2030. The product's strong growth and broad geographic uptake underscore the commercial success possible with ENHANZE enabled therapies. Let me now move to Argenx's WeiGART and Hartulo, which is a subcutaneous version enabled by ENHANZE. These are shown on slide seven. Today, Bydgar Herculo approved for two indications in The United States generalized myasthenia gravis and chronic inflammatory demyelinating polyneuropathy. And for one indication, generalized myasthenia gravis in Europe. In The United States, Weipka Hertulla with ENHANZE has played a pivotal role in adding new prescribers and new patients in the first approved indication, generalized myasthenia gravis.
19m 45s
Reaching patients earlier in the treatment paradigm and accessing uterine branches. Moving now to the second approved US indication, CIDP, Viagra Heptula was approved as a subcutaneous only treatment recently in September of twenty twenty four. Argenx has reported initial strong demand from patients and physicians highlighting the unmet need for safe and effective treatment alternatives. As reported in February of twenty twenty five, more than one thousand CIDP patients were in therapy. For CIDP, Argenx has stated that they have attained favorable or highly favorable coverage for ninety percent of US lives. They further commented that their recent sales force expansion has contributed to deeper community reach, noting that twenty five percent of prescribers for CIBP are new to Viveguard. In Europe, Wevgart Hetrolo was approved for generalized myasthenia gravis in November of twenty twenty three. Fivegart total sales reached $2,200,000,000 in 2024, with continued strong growth especially of Viagra Her Tulip, projected in 2025. Turning now to Slide eight, I'll comment on the growth catalyst number five, six, and seven. In April of twenty twenty five, the FDA approved the new option for patients to self inject Argenx's Viagra Hetulo prefilled syringe. Which contains the same Viagra, which is co formulated with ENHANZE as is in the vial and where Halozyme received the same mid single digit royalty on net sales.
21m 19s
This FDA approval of the prefilled syringe is our fifth new growth catalyst. The five star Hetulip prefilled syringe is approved as a twenty to thirty second subcutaneous injection which is administered by a patient, a caregiver, or a health care professional. And will contribute to Weibar Hetula's strong growth trajectory for 2025 and beyond. The prefilled syringe also received a positive recommendation in Europe for use in generalized myasthenia gravis patients in February of this year. This is projected to result in approval in the second quarter of twenty twenty five and is our sixth growth catalyst. In April of twenty twenty five, argenx received a positive opinion for Vibtat Hetulov from the CHMP in Europe or the indication of chronic inflammatory demyelinating polyneuropathy. With approval expected to occur midyear twenty twenty five. Following the CHMP opinion, This new indication which we expect to be for a vial and for the prefilled syringe, will significantly expand the opportunity and add new growth. And this is our seventh new growth catalyst in 2025. Fivegart is just starting its journey of innovation, as you will see on slide nine. Argenx has multiple active subcutaneous programs in development with ENHANZE, including for ocular myasthenia gravis and for thyroid eye disease, which will further fuel the revenue growth.
22m 48s
With Halozyme earning royalties, through the early twenty forties, Five Guard Hetulo represents one of the most significant and durable contributors to our long term financial performance. Continuing to expand the new growth catalyst, I'll now move to Slide 10 and the four additional recently launched products that are just warming up, are at the start of what promised to be exciting launches. Let me begin with Ocrevus Zenuvo with ENHANZE, which was approved last year for multiple sclerosis an approximately ten minute subcutaneous injection. This compares with multiple hours that is typically required the intravenous administration. Importantly, and the eighth new growth catalyst most recently reported that Ocrevus Sanuvo received its permanent j code in The US on April 1. Which they stated will help accelerate uptake in the second half of twenty twenty five. Outside The United States, work continues to gain that all important reimbursement in each country. Roche reported that fifty percent of patients who start on Ocrevus and Nuvo were naive to the brand. Providing Roche with confidence that ZINUVA will open up new patient populations to Ocrevus and not simply cannibalize existing share. Roche believes that Ocrevus de Nuvo could represent an incremental or approximately $2,000,000,000 opportunity for the brand through this expansion.
24m 14s
Resulting in an approximately 10,000,000,000 analyst projection for IV and subcutaneous Ocrevus in 2028. Ocrevus Inuvo is projected to earn Halozyme royalties at its full mid single digit rate until 02/1930 and at a step down rate until at least 2034. I'll move now to Roche's Tecentriq Hybrisa with ENHANZE, which gained FDA and EMA approval in 2024. The approvals were for all of the intravenous indications, offering patients the convenience of an approximately seven minute subcutaneous injection. With a permanent J code in place and work continuing to gain reimbursement in all the strategy is to convert IV to centric patients to Tecentriq Hybrisa. Halozyme will earn royalties on Tecentriq Hybrisa at the low mid single digit rate until the 2040s. Moving now to Bristol Myers Squibb of DIVO COMPANYTAGE. The subcutaneous formulation of nivo eleven with ENHANZE which was granted FDA approval at the end of twenty twenty four, in The United States. CMS is focused on continuing to increase breadth of prescribing in both the community and academic settings and the permanent j code our ninth new growth catalyst, is expected on July 1 The J code is expected to drive adoption of the subcutaneous formulation in the second half of the year.
25m 38s
BMS recently commented that they're receiving promising early feedback from practices and patients on the subcutaneous formulation which is a three to five minute subcutaneous injection. Use is predominantly happening in the community setting and is occurring across multiple tumor types. In April of twenty twenty five, BMS announced the positive CHMP opinion for Opdivo subcutaneous with ENHANZE representing our tenth new growth catalyst. We anticipate European approval in mid-twenty twenty five. I'll move now to subcutaneous Ribrovant is Johnson and Johnson's innovative EGFR c Met inhibitor. Johnson and Johnson gained European approval of subcutaneous bribrivance, co formulated with ENHANZE in April of twenty twenty five. Use in combination with lisetronib in the first line treatment of adult patients with advanced EGFR mutated non small cell lung cancer. Subcutaneous Ribrovant represents a more convenient patient friendly formulation reducing administration time from multiple hours required for the IV to just five minutes for the subcutaneous. Importantly, there is a fivefold reduction in infusion related reactions compared to the IV formulation. Work is now underway to get reimbursement for subcutaneous ribavent in each country. And our eleventh new growth catalyst is a potential US approval of Rivariant subcutaneous. G and J is continuing to work on gaining this approval in 2025.
27m 11s
I wanted to also highlight recent data on Ribrovant Very excitingly, the results of the Phase three Mariposa trial were presented at the European Lung Cancer Congress in March of twenty twenty five, The combination of Ribrovant and losetranib significantly reduced the risk of death by twenty five percent versus Tagrisso which is considered by many to be the current standard of care in patients with newly diagnosed EGFR mutated non small cell lung cancer. With a projected improvement projected of more than twelve month survival benefit over this current standard of care, This is certainly a potentially important advance for patients with this type of cancer where only twenty percent of patients survive beyond five years today.
27m 55s
With our now 10 launch products, which are shown on Slide 11, we remain on track to deliver over $1,000,000,000 in royalty revenue in 2027 with all products continue to generate royalties to at least 2030 and many expected to continue to the twenty forties. I'll move now to slide 12 and to some highlights on our pipeline that represent potential new growth drivers the royalty revenues of which are not included our multiyear guidance. During the first quarter, AccuMed reported top line results for Supernitech subcutaneous with ENHANZE for Alzheimer's disease, which support further clinical development for the subcutaneous formulation with ENHANZE. We've also reported positive phase two data for N6LS with ENHANZE in combination with cabotegravir, The study demonstrated the promise of an every four month treatment in combination with cabotegravir. This is another terrific example of how ENHANZE can support a more extended dosing interval, reducing the treatment burden for patients.
29m
And we were also very hard at work during the quarter continuing to discussions with several companies and entering into discussions with multiple new companies with regard to new deals. I'm pleased to announce that we have signed our first development agreement with the current enhanced partner for development of our high volume auto injector. The majority of the ongoing discussions continue to focus on enhanced alone and ENHANZE with the high volume auto injector if the volume is between two to 10 mL. I can update that we are progressing through the multi review and decision making committees in several of these discussions. And turning to our small volume auto injector business, I'm pleased to say that one of our current partners is progressing now to test the small volume auto injector in a phase one study. There has not been a time in 10, derisk proven approved subcutaneous products with 11 recent or soon to happen events that are catalysts to expand opportunity adoption, and growth. The underlying continued strength of DARZALEX subcutaneous, [indiscernible] have resulted in the increased 2025 guidance which Nicole will review in a moment after she discusses our first quarter results in more detail.
30m 22s
Nicole?
30m 24s
Thank you, Helen. The first quarter of twenty twenty five represented a strong start to the year.
30m 29s
And we are excited to raise our full year expectations based on these strong results.
30m 34s
We grew revenue by 35% with EBITDA growth of 40%.
30m 39s
As we continue to drive leverage on our high margin royalty revenue.
30m 43s
Contributing $153,000,000 in free cash flow in the quarter. Let me start on Slide 13. In the first quarter, we completed the $250,000,000 ASR announced in December of twenty twenty four. Since 2019, we have repurchased $1,550,000,000 of shares. Which is on average $250,000,000 each year. At an average price of $33.72 Due to the strong performance to date, we are announcing an additional $250,000,000 of share repurchases to be executed during the remainder of the year. As Helen mentioned, we continue to evaluate M and A opportunities to complement our organic growth expectations.
31m 32s
Let me now turn to our detailed first quarter results on Slide 14. Revenue grew 35% to $264,900,000 compared to $195,900,000 in the prior year period.
31m 49s
This includes higher than expected revenue in all categories. Royalty revenue of $168,200,000 increased by 39% from $120,600,000 in the prior year and was higher than our original expectations. The continued commercial success of subcutaneous DARZALEX and GO, and the robust growth of VizgartHytrulo exceeded our expectations for the quarter. Driving an increase in our full year guidance. Product sales of $78,000,000 increased by 33% from $58,600,000 in the prior year period. Mainly driven by higher API sales than originally estimated due to an increase in partner orders. We have an increase in partner orders in later quarters of 2025. Which is also a driver of the increase in our full year guidance. Collaboration revenue of $18,600,000 an increase of 12% from $16,700,000 in the prior year [indiscernible] was also higher than expected due to the achievement of a VibgartHytrulo sales milestone one quarter earlier than originally projected. Projected. Research and development expenses were $14,800,000 compared to $19,100,000 in the prior year period.
33m 13s
The decrease was primarily due to lower compensation expense driven by resource optimization and improved labor allocations to COGS.
33m 21s
And the timing of planned investments in Enhance related to the development of our new high yield RHuPH20 manufacturing process.
33m 31s
Selling, general and administrative expenses were $42,400,000 in the quarter.
33m 36s
Up from $35,100,000 in the prior year period primarily due to increased compensation expense and consulting and professional service fees. Adjusted EBITDA increased 40% to $162,000,000 from $115,700,000 last year.
33m 55s
GAAP diluted earnings per share was $0.93 and non GAAP diluted earnings per share was $1.11 This is compared with GAAP diluted earnings per share of $0.6 and non GAAP diluted earnings per share of $0.79 in the first quarter of twenty twenty four. We continue to maintain a strong balance sheet. With cash, cash equivalents and marketable securities of $747,900,000 on 03/31/2025.
34m 23s
Compared to $596,100,000 on 12/31/2024. The increase was primarily a result of cash generated from operations, Our net debt position was $777,000,000 with a net leverage ratio of one time. As a result of our strong first quarter performance, we are raising our guidance as you can see on Slide 15. We now expect total revenues of 1,200,000,000.0 to $1,280,000,000 representing year over year growth of 18% to 26%.
35m 1s
Driven by increased projections in all three revenue categories. Royalties, product sales and collaboration revenue. Royalty revenues of $7.50 to $785,000,000 representing year over year growth of 31% to 37%.
35m 19s
We continue to expect Vibarte HiTruvo with ENHANCE to be the largest loyalty dollar growth driver. Product sales of $340,000,000 to $365,000,000 driven by higher partner demand for rHuPH20 in the year. Collaboration revenue of 110,000,000 to $130,000,000 driven by the EU approval of Ribrovant SD in April. For which a milestone will be recognized in the second quarter. Adjusted EBITDA of between $7.90 to $840,000,000 representing year over year growth of 25% to 33%.
35m 58s
Reflecting high margin royalty growth coupled with flat operating expenses from our continued focus on operational efficiency. And non GAAP diluted EPS of $5.3 to $5.7 representing year over year growth of 25% to 35%.
36m 16s
Which does not include the impact of future share repurchases including the $250,000,000 announced today. As you refine your models, I'd like to reiterate the following.
36m 28s
While we achieved a Bisbart Hytrulo milestone one quarter earlier than expected in the first quarter, we continue to expect collaboration revenues for the year be more weighted in the second half of twenty twenty five.
36m 42s
We continue to expect product sales to be weighted in the second half of the year. With the second quarter flat with the first quarter. For royalties, we continue to expect quarterly sequential growth the remaining quarters in the year. With that, I'll now turn the call back over to Helen. Thank you, Nicole.
37m 2s
Our strong first quarter performance, particularly of DARZALEX subcutaneous, [indiscernible] plus our 11 new growth catalysts gave us the confidence to raise the full year 2025 financial guidance ranges. With 10 products now approved and launched in at least one major region, we have durable revenue streams that will continue to support our conviction in the future success of Halozyme. Our robust pipeline along with our ability to defend our intellectual property further strengthens our confidence in delivering sustainable growth and profitability well into the future. This is an incredibly exciting time of growth for Halozyme, and this would not have been possible without our terrific partners and our dedicated and expert Halozyme team. And I'd like to say a sincere thank you to everybody who has contributed. Operator, with that, we are now ready to open the call for questions. Thank you.
37m 58s
At this time, I would like to remind everyone in order to ask a Your first question comes from the line of Mohit Bansal with Wells Fargo. Your line is open. Hi. Sorry about that. I was on mute. Hi. This is Saadia Rahman on for Mohit. Thanks for taking the questions. So on the IP case, with Mark, I had a question about that. Can you comment on the expected timelines, for the PGR decisions? And what, action you could take if the PGR goes in Merck's favor.
38m 41s
Yeah, thanks for that. With regard to the PGR, [indiscernible] first decision by the patent office on institution will be in early June. And if there is institution that will mean that the case will be reviewed about twelve months from them. They also can decide not to pick up the case, in which case it would not proceed.
39m 9s
Got it. And just related to that, is there a possibility that, that PGR case and your patent infringement lawsuit could be tied together, or is that not possible to due to logistical reasons? [indiscernible] two very different, approaches, that that are going on there. Obviously, PGR we consider to be frankly a little bit of a sideshow. PGR tend to be filed when companies are concerned that they are infringing and they seek to invalidate the patents. We feel very confident in our ability to prevail in those PJRs. And even if they were to win one or two of the PGRs, because there are several in place, we do not believe that will have any impact at all on our infringement at case. Where we have multiple additional claims that are not subject to the PGR that are the basis of that infringement case. So two very separate things. The most important one is at actually the actual lawsuit that we filed. I'd keep your attention on that one.
40m 22s
Got it. Thanks so much. Your next question comes from the line of Sean Laughman with Morgan Stanley. Your line is open.
40m 31s
Thank you, operator. Hello, Helen. Hope you're well and congratulation on a set of numbers. What's the, you know, the the be down number today, and and you've up upgraded guidance, but there was is there one particular area of strength that surprised you during the quarter and is driving the upgrade? Or is it more broad based?
40m 51s
Yeah. I I will say it's it's our three blockbuster products that have been performing for us for the last several years and frankly are expected to continue to have this excellent performance. So it's across the board with DARZALEX subcutaneous. Stesco and also with VIBORT HYTULLO. And so one of the other things we mentioned not just the royalties, but that we achieved a milestone on Weifgart Hytrula one quarter earlier than we had anticipated as well and that was a commercial sales attainment milestone. So they are just continuing to perform very, very well, Sean. Behind them, we're obviously excited about the other four launch products that are really just at the very beginning. But just based on the performance comments from the partners and our we're going to continue to see strong growth from all of those products. For many years to come.
41m 46s
Great. Thank you. And on that small volume auto injector, when might you be in a position tell us who the partner is? And do the economics of that deal compare to the high volume auto injector partnerships? And when do you ultimately see commercialization might be a reality?
42m 4s
Yeah. The with the regard to when that might become, public, that really will be, the partner who will be in control of that. I would take an estimate and guess that when it enters clinical studies, it might be public that it's our small volume auto injector. But for competitive reasons, we're seeing again that our partners don't want to be signaling to their competition exactly what they're doing to continue to evolve their product offering and differentiate it down for patients. The small volume and the high volume in injector agreements are both development agreements, Sean. They really lay out exactly how we will work together to create a auto injector for use in clinical development. We have yet to move forward to the commercial licensing at a supply agreement, where the actual financial terms will be there. But I would expect in both instances what you're going to see is going to be where we have a price per device that is based on the cost of manufacturing and the time it takes us to manufacture and some cost plus benefit for Halozyme. But more to come on that later, we're just incredibly excited that we're now moving forward with two of our partners to be using and test our auto injectors in the future in their clinical studies.
43m 28s
Great. Thank you, Helen. That's all I have for now.
43m 31s
Thanks, John.
43m 34s
Next question comes from the line of Michael DeFeura with Evercore Evercore ISI. Your line is open.
43m 42s
Thanks a lot. Hey guys, thanks for taking my question.
43m 45s
Congrats on all the continued progress. Two questions from me centering on the Merck Halozyme litigation. Number one, do you guys see AstraZeneca's Altigen deal as as evidence that large pharma companies are willing to accept patent litigation risk rather than sign enhanced deals. And if so, how do you counter that narrative? Second question is, have any enhanced partners paused new target add ons or renegotiations while they watch this litigation play out? And if so, how material could that be to long term growth? Thank you.
44m 26s
Yes. I'll tackle the second one first, Mike. And no, we have not heard from any partner who is a current partner or even conversations we're having with potential future partners, where anything is being paused to evaluate the outcome of the market litigation. And I don't expect that really to happen at all. I think it's very clear Enhance is seen as the market leader here We're the most derisked, the most validated with a million patients treated. And I can say that for all of the people who are looking at hyaluronidase including all of the ones who have signed deals with them, Altiagen, all of them have come to Halozyme first and perhaps found that the target they were intending or wanting to use it for was not available. And I think we're going to continue to see that pattern. With regard to your specific question on AstraZeneca, again, don't want to speculate on AstraZeneca is thinking with regard to litigation, but I'll come back the comment I made a moment ago. All of the people that that have moved forward with the deal with LTH and have actually discussed specific targets with Halozyme that were taken.
45m 42s
By other of our current partners. And I think again that is the trend that we have seen to date.
45m 50s
Okay. Very helpful.
45m 51s
Thank you.
45m 54s
Your next question comes from the line of Jessica Fye with JPMorgan. Your line is open.
46m
Hello. This is Adam on for Jess.
46m 3s
You for taking our question. I just wanted to ask how are you thinking about the implications of the HER two frontline breast cancer data for FSGOs sales and royalties? Thank you. You. Yeah.
46m 17s
Obviously, we're keeping a close watch on that. What we are seeing with, FESGO is with the the great long term data and there's more long term data as you know that's going to coming out on FASGO this year as well. Together with the very convenient patient administration. In just five to seven minutes for it. We believe that the sales team is going to continue demonstrate this very strong market adoption and uptake where there is incredibly high patient satisfaction for it. So not just the clinical benefits, the administration benefits, but also the patient satisfaction So we're not concerned with regard to the HER2 data that will be emerging. Delighted to see the strong uptake continues for FASGO, We mentioned on the call 47% share now in the 58 launch markets, expected to get to more than 50% this year. And we've seen with our our products that when a patient has moved to the subcu version of the product, they tend to be very sticky. So we are projecting continued strong growth of, FASGO for multiple years to come.
47m 45s
Next question comes from the line of Mitchell Kapoor with H. C. Wainwright. Your line is open.
47m 51s
Hi, everyone. Thanks for taking the question. I wanted to ask a little bit about your views in the future of the changing portion of the mix of royalty revenues. As your pipeline evolves Just kind of trying to understand when we could get to more even proportions versus the three blockbusters serving as the heavyweights for the royalty revenues? All right.
48m 15s
It's when you have such great products, Mitch, it's an embarrassment of Ritu's and we do expect several of our products that are currently just starting. They're their launch trajectories to also be meaningful contributors. There was a time where people were very focused on DARZALEX and it having a very large proportion of our sales. It will continue to be a very important contributor to us for many years to come. But products like Five Star Hetulo, FeSco, Ocrevus, others are going to be very important contributors as well. I think Nicole mentioned that this year the larger dollar growth is actually Bydgar Heitrulla, which shows you how our portfolio is broadening. So we're going to have multiple very high impact blockbusters like DARZALEX and in Frank frankly by the end of this year, next year. Let me see if Nicole would add anything to that. Yes. And we don't break out our royalties by products, but we have shared the buckets as we think about our royalty projections. We shared [indiscernible] that they're expected to have in the long term. And then the next wave of our products so comparing it to DARZALEX and FSGO having a $20,000,000,000 market opportunity in 2028, And then looking at the next wave of our products in totality, having a $35,000,000,000 market opportunity in 2028, I think that gives you that good sense for how over the next few years those products will start contributing very meaningfully.
49m 54s
And taking up a good proportion of our royalty revenue.
49m 58s
Thank you. That's very helpful. And one more from me. Just talking about the M and A activity and the expectations for future activity in that space, could you talk a little bit about what you're looking for in your next BD deal there? And how that contrasts with, you know, your strategy with Evotec? And then if you could just talk about timing on when you would like to execute on one of those transactions. Is there kind of a timeline for that? And kind of the size, larger or smaller multiple smaller ones? You know, any any clarity around those particular aspects of the M and A strategy?
50m 36s
Yes. Thanks, Mitch. Well, with regard to M and A, we're very focused on seeking to find opportunities in the drug delivery space. Where their platform technologies that can result in long durable revenues including and particularly for royalties. Obviously, like that model. But I will say we are not in a hurry to it and we're going to be carefully evaluating and being thoughtful as we've always been to identify something that we believe would be needed and required by multiple pharma companies. And result in a very positive contribution to Halozyme long term growth. So think drug delivery, think licensing business, that is where we are evaluating today. No specific timeline, And as we're still evaluating, it should be premature to comment on the size. But it so I can't comment on that at this period of time. So that's where we're going to be focused. And, we we're excited to try to create new platforms and create just great businesses like Enhance and that we've done so successfully with that.
51m 49s
Great. Thank you all very much for taking the questions.
52m 1s
Your next question comes from the line of Brendan Smith with TD Cowen. Your line is open.
52m 7s
Great. Thanks for taking the questions guys and congrats on all the great updates. Maybe just another one kind of regarding the litigation for Kiki Truda. Just kind of in point blank terms, can you just confirm first that, you know, whatever the outcome for your litigation against Merck, that the decision will have no impact on your actual core and Hanes business. And then on the flip side, kind of same question regarding the PGR suit from Merck. Or is the one from them a little bit more targeted to enhance itself? Just to kind of understand the relative potential impact down the line.
52m 39s
That's great, Brandon. And and to be very clear, the what is going on in the m days, is a separate and of patents from ENHANZE, will have absolutely no impact whatsoever on our ENHANZE business. Our guidance that we have provided or our future growth of ENHANZE. Think of the MDs as future upside opportunity. That has been identified as we are finding that companies are infringing our intellectual property and we're seeking to have those companies take licenses from us. So that's that's it, bottom line with regard to what would happen. So specifically with the outcome of the PGRs, yes, no impact on our ENHANZE business and same with the infringement case, no impact on the enhanced business. All potential upside if we were to win either a license with Merck or when compensatory damages as we are seeking in the litigation.
53m 43s
So two very distinct things where MDAYS is just a potential upside coming from great innovation and inventions that Halozyme has created over the years.
53m 56s
Got it. Okay. Great. Thank you. And then maybe just a quick one on tariffs just because we do get a lot of questions about this. Can you just speak really quickly to how we should be thinking about the potential impact of pharma and maybe EU tariffs? And if you've had any conversations with any of your partners about them, I guess, particularly relevant for Darzalex and and Vivintage, just given their global footprint. Thank you. [indiscernible] start with Halozyme's manufacturing, where we've been very deliberate ourselves in this establishing manufacturing in The United States. And we also have been seeking to assure we can source all or virtually all of our components and materials needed in the United States too. And so I can confirm that from the Halozyme point of view for the products we produce and our API there is a very, very limited exposure to the currently imposed tariffs and any small impact is already contemplated in our our guidance. With regard to the PharmaTaurus, I can say that based on our agreements, if the pharma tariffs were implemented for products being imported into The U. S, Halozyme will not see or should not see any impact on our royalty, revenues.
55m 11s
And so it's based on our agreements and based on what we're aware of with regard to the manufacturing of our partner products and importantly also U. S. Distribution and how that works. So we should not see any impact with regard to tariffs.
55m 29s
All right. Great.
55m 30s
Thank you.
55m 34s
Your next question comes from the line of David Risinger with Leerink Partners. Your line is open.
55m 41s
Thanks very much and congrats, Helen and team. On the very strong financial progress.
55m 47s
I have two questions. The first is with respect to external acquisitions, are you also considering broadening your royalty streams by considering acquiring royalty companies?
56m 3s
And then with respect to potential new customer deals, could you just talk about the gating factors for new business announcements? For example, some customers awaiting FDA guidance or sorry, CMS guidance for IRA negotiations in coming months for 2028 under the new administration. Thanks very much.
56m 34s
All right. So with regard to external acquisitions, David, I mentioned that we really are focused on creating new platform businesses. That can result in durable long revenue streams such as we've created for ENHANZE. And so think drug delivery platforms as being our primary focus in terms of where we are evaluating opportunities today. On the new customer deals and specifically for Enhance, the and I've talked about this before, what we do see in companies is there's a multi step review process. And then a multi step decision process. And so really what we're doing at the moment is working through that process in each company, where each company has a slightly different process. Now you do get to the end of it as we've seen very nicely by announcing our small volume option injector deal last quarter, the high volume one. And we are in several discussions going through that process, on ENHANZE. So simply it's more a question of getting through the internal decision making processes in the pharma and biotech companies that will result in an enhanced deal and I remain confident we will sign a deal on ENHANZE this year. It's been interesting on CMS and people are awaiting the IRA.
57m 58s
I would not say that's a gate at all. It just is a question of interest to see whether CMS will continue to recognize that a product that is too active ingredients is a separate drug from the single ingredients. And so if anything that might bring us some additional new opportunities David, but it hasn't been holding anyone back waiting to see that that is confirmed. Much more focused on the strong differentiation that Enhance is able to bring for their patients and their mission for improving the patient treatment experience.
58m 35s
Got it.
58m 37s
Thank you.
58m 39s
Thanks very much.
58m 43s
And there are no further questions at this time. This does conclude today's conference call. You may now disconnect.
Key Insights
Halozyme reported a strong Q1 2025, with total revenue up 35% year-over-year to $265M, royalty revenue up 39% to $168M, adjusted EBITDA up 40% to $162M, and non-GAAP EPS up 40% to $1.11; net income grew 54% to $118M.
The company raised its full-year 2025 guidance: total revenue expected at $1.2B–$1.28B (18–26% YoY growth), royalty revenue at $750M–$785M (31–37% YoY growth), adjusted EBITDA at $790M–$840M (25–33% YoY growth), and non-GAAP EPS at $5.30–$5.70 (25–35% YoY growth).
Growth is driven by three blockbuster products (DARZALEX subcutaneous, FASGO, and VYVGART HYTRULO), with 11 new growth catalysts including recent product launches, label expansions, and new approvals expected to drive multi-year growth.
Halozyme announced a new $250M share repurchase plan for 2025, continuing its capital return strategy; since 2019, the company has repurchased $1.55B in shares.
The company remains focused on organic growth through ENHANZE and auto-injector platforms, while also seeking disciplined M&A in drug delivery technologies that provide durable royalty streams; ongoing patent litigation is not expected to impact core business or guidance.
