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spk00: 33% increase over prior year revenue. We're also increasing our earnings per share guidance to 80 to 85 cents from our prior guidance of 60 to 75 cents. As these results demonstrate, the vision we described for the future of our company approximately one year ago when we transitioned our business to focus on enhance is now truly bearing fruit in the form of growing revenues, earnings, and cash flow. This has also enabled us to deliver on our commitment to return capital to shareholders in a meaningful way. In the third quarter, we repurchased $58.9 million worth of shares, or approximately 2.1 million shares, resulting in $312.4 million in capital returned to investors via our share repurchases in less than one year as part of the authorized three-year $550 million share buyback program. All of this progress was made possible by our partners and the Hirazan team adapting very effectively to the many changes imposed by COVID-19 on the business and our life. As a result, we're in a strong position as we close out 2020 and look forward into 2021. Turning now to slide three, I'll discuss our growth in royalties. We are delighted by the strong growth in royalties and I wanted to provide some context for this achievement. As illustrated on the left, in the third quarter, revenue from royalties grew 44% year-over-year and 51% sequentially. We're delighted to be embarking upon a period of projected strong growth in royalties propelled by the launch of Darzalex FASBRO in the US and Darzalex SC outside the US. I'm pleased to report that we now project full-year royalty revenue growth of 14% to 22% compared to the prior year. resulted in projected 2020 royalty revenues of $80 to $85 million. Let me now provide some additional color on the subcutaneous Darzalex launch. Janssen received regulatory approvals for US and EU in May and June, respectively, meaning that the third quarter was the first full quarter of sales. During the third quarter, Janssen's parent, J&J, reported worldwide sales of Darzalex, including the IV and SC forms, of $1.1 billion, up 44% year-over-year on an as-reported basis. While J&J does not provide a breakdown of sales between the IV form of the drug and the sub-Q form utilizing hands, we can share, based on our evaluation of syndicated sales data, that the launch is off to a strong start in the U.S. and in countries outside the United States. We project continued growth in royalties of Darzalex FASPRO and Darzalex SC adoption and conversion increase in the already launched countries, and new launches occur in additional countries following reimbursement confirmation. Turning now to the additional positive data readout and potential label expansion for Darzalex FASPRO and Darzalex SC. On October 21st, Janssen development partner GenMap announced data from the second part of the phase three Cassiopeia study evaluating daratumumab as maintenance treatment in patients with newly diagnosed multiple myeloma eligible for autologous stem cell transplant who had achieved a response during part one of this trial. The study met the primary endpoint of progression-free survival at a pre-planned interim analysis. Based on the data, Janssen plans to discuss the potential for a regulatory submission with health authorities, and the data are expected to be presented at an upcoming medical meeting. On September 10th, we announced that Janssen submitted a supplemental biologic license application to the FDA seeking approval for Darzalex Faspro utilizing Halozymes enhanced technology for the treatment of patients with light chain amyloidosis, which is a rare and potentially fatal disease for which there are currently no approved therapies. The supplemental BLA was based on positive phase three data from the Andromeda study. There are an estimated 30 to 45,000 patients in the United States and European Union who have light chain amyloidosis. Notably, only the subcutaneous version of Darzalex within hands was selected to be studied for this indication, and upon positive regulatory opinion, Darzalex SC would be specifically approved for this indication. We look forward to a future decision on acceptance of this filing by the FDA. As I just highlighted, not only is the launch of subcutaneous Darzalex off to a strong start, Janssen also has a robust development program with the potential to further expand the patient population that can be treated with Darzalex SC. And we look forward to providing further updates in this area. Let me move now to slide four for a discussion of the additional products that are commercialized in the U.S. and rest of the world utilizing our enhanced technology. Roche continues with its global commercialization of Mapthera or Rituxan Hycella and subcutaneous Herceptin and Herceptin Hylecta. Royalties from these more mature products are projected to decline modestly this year, primarily as a result of the ongoing impact from biosimilars. We do expect to see future growth in the roast portfolio of products driven by Fezgo, which was recently launched in the United States. Fezgo is a fixed-dose combination of two roast drugs that are the backbone of treatment for early and metastatic HER2-positive breast cancer, specifically Progetta and Herceptin. Fesco was in the early launch stage and, as a result, did not contribute meaningfully in the quarter, with Roche reporting third quarter sales of 7 million Swiss francs. This is not unexpected, as Roche is working through all of the steps to support full access in the United States, including gaining formulary approvals and inclusion into electronic medical records. Based on submission timing for Fezgo in Europe and assuming standard review time, we see the potential for approval of Fezgo in Europe in the first quarter of 2021. In Europe, gaining reimbursement approval will be a key step for launch, and this can take up to six to nine months in several of the key European markets. Rounding out our discussion of the current products, on September 15, Takeda Pharmaceutical announced that the European Medicines Agency approved a label update for Hycuvia, broadening its use and making it the first and only facilitated subcutaneous immunoglobulin replacement therapy in adults, adolescents, and children with an expanded range of secondary immunodeficiencies. Takeda will now be able to target this segment of the market, which, according to Takeda, is estimated to represent about 15% of IgG use in the US and EU. I'll move now to slide five and a discussion of our partners' development pipelines. I'm pleased to update the progress our partners are making in the clinic with drugs utilizing our enhanced technology. At the beginning of the year, we projected nine study starts in 2020. I'm pleased to say that based on latest partner communications, this remains our expectation. To date, three studies have started, and we project an additional six studies will be ready to start in the fourth quarter. Let me recap the three trials that have already started. These are the Ergenix phase 2 trial of F-cartitumab in CIDP, which began in the second quarter. BMS's Relatlamab plus Nivolumab phase 1 study, which also began in Q2. And what we call the CAPRISA study, which began in Q3. Let me just say a word about this CAPRISA study. This is a study that's been conducted by the Center for AIDS Program of South Africa, or CAPRISA, in conjunction with the Vaccine Research Center, a division of one of the institutes within the NIH. The study is evaluating the safety, tolerability, and pharmacokinetics of a sub-Q human monoclonal antibody administered within hands in HIV-negative and HIV-positive women in South Africa. Turning now to the six remaining studies, we project that three phase three or registration trials will start in the fourth quarter. These are the recently announced Ergenics F. kardichmod study in Pemphigus vulgaris and foliaceus, the Roche Phase III study with Ticentric, and we recognize $32 million in milestone payments in the third quarter, including $15 million for the Ergenics and $17 million for Ticentric related to progress to date towards these two study starts. A third Phase III study is also projected to be ready to start in the fourth quarter. This is currently undisclosed at the request of the partner. And we continue to expect our partners to be ready to start three additional Phase I studies in the fourth quarter. Let me now provide a brief partner-by-partner discussion of these programs. I'll begin with Ergenix, which has nominated two targets to date, the human neonatal FC receptor, which F-critizumab is designed to block, and complement component C2 with ARGX117. Argenix is progressing three separate studies at this time for SCF Cartigimod within HANZ. Argenix recently provided an update that enrollment in its Phase II ADHER study, which is evaluating F-Cartigimod within HANZ in CIDP, is progressing well. Argenix expects a go-no-go decision to expand the trial up to 130 patients will occur after the first 30 patients are treated in Part A of the study, and expects the decision will occur to expand in the first half of 2021. With regard to SCF-Cortijamod with Enhanced Myasthenia Gravis, Argenix plans to meet with the FDA during the current quarter to discuss a bridging strategy for SC based on the positive results of its ADAPT trial which evaluated the IV form of F-cortisomide in myasthenia gravis. Ergenix has stated it will communicate its plans as soon as it has written minutes from the FDA meeting. We look forward to learning of the next steps for this exciting program, which could result in initiation of testing of SCF-cortisomide within hands in myasthenia gravis in a registration study in 2021. also recently announced that it plans to evaluate SCF kergingemod within hands in its Phase III address trial in pemphigus vulgaris and foliaceous, which they indicated is on track to start this quarter. Pemphigus is a serious skin barrier disease which is associated with painful blistering. The phase three ADDRESS trial will be a randomized, double-blind, placebo-controlled study where the objective is to assess the efficacy, safety, and tolerability in up to 150 newly diagnosed or relapsing patients with moderate to severe pemphigus. The primary endpoint will assess the proportion of patients who achieve complete remission on a minimal steroid dose at 30 weeks. As noted earlier, the advancement of this program to this stage triggered recognition of $15 million of revenue during the third quarter. Now turning to the second ARGENIX-nominated target, ARGX117. ARGENIX announced they recently initiated a phase one study evaluating ARGX117 in healthy volunteers with data expected in mid-2021. ARGX117 is targeting C2 for the treatment of multifocal motor neuropathy, or MN, a severe autoimmune disease. We expect to receive a milestone payment in the near term related to the subcutaneous component of this study. As you have heard, Ergenix is making rapid progress in the clinic with subcutaneous forms of its drugs utilizing enhance and are evaluating a broad range of potential indications with the goal of accommodating patient preference and to adjust to the new norm where patients may not always have easy access to all sites of care. And building on this progress and vision, we were delighted to expand our collaboration and licensing agreement with Argenix last month. As a result, Argenix will now have the ability to exclusively access our enhanced technology for three additional targets upon nomination, for a total of up to six targets under the existing and newly expanded collaboration. Let me move now to Roche. In September, we announced that Roche presented a poster with data from part one of its phase 1B study evaluating atezolizumab or Ticentric for subcutaneous administration using enhanced in patients with locally advanced or metastatic non-small cell lung cancer. This data was presented at the European Society for Medical Oncology virtual congress. The poster concluded that atezolizumab utilizing enhanced provided similar exposure as atezolizumab IV and that the results supported further development of subcutaneous atezolizumab in a confirmatory Phase III study. In October, Roche provided details of the planned Phase III trial design on clinicaltrials.gov. Significant progress towards the start of the Ticentric Phase III trial triggered recognition of $17 million in revenue during the third quarter. And in addition, Roche continues with its phase one study, which is evaluating sub-Q administration of ocrelizumab or Ocrevus with NHANES. I'll move now to Bristol-Myers Squibb. BMS is progressing three separate targets utilizing NHANES across four distinct programs. Specifically, BMS continues with four phase one programs. These are with nivolumab, BMS is anti-CD73, and rilatilamab in combination with nivolumab. Additionally, BMS initiated in the second quarter of 2020 a phase 1-2 study of ipilimumab in combination with nivolumab utilizing our enhanced technology. We are excited that our current partners continue to provide new growth opportunities for enhanced And I can say we already have line of sight to several potential additional new target selections by current partners and plans to progress from phase one to phase three development in 2021. We look forward to providing more updates as additional programs are nominated and enter or advance in the clinic. And let me now just comment on new enhanced deals. It remains the case that we have a broad slate of ongoing discussions with both biotech and pharma companies I continue to be pleased with the pace of these discussions and remain confident that we will sign additional deals. As ever, the timing is hard to predict. Turning now to slide six, we'll discuss our outlook for anticipated growth in milestone revenues. The growth and the progress of our enhanced portfolio is projected to drive strong growth in milestone revenues in the coming years. Based on the latest information from partners, we continue to project cumulative milestone revenues in the 2020 to 2022 three-year period of between $350 to $450 million. This near-term milestone revenue precedes the royalty revenues and is an important and strong indicator for future royalty revenues, which we project to have the potential to be approximately $1 billion in 2027, based on our non-risk adjusted revenue projections for programs that are currently in or in planning for development. Turning now to slide seven, we'll discuss our approach to value creation and capital return. Our first priority is always to drive the growth in our enhanced business by maximizing the value of our current collaborations and working to sign and advance new collaboration partners. With strong projected free cash flow, our next goal is returning capital to investors via share repurchases through our three-year $550 million share repurchase program. We've demonstrated our commitment to this goal by already repurchasing more than $312 million worth of shares or approximately 57% of the amount authorized in less than one year. We will continue pursuing share repurchases under this program for the remaining period of the authorization pending market conditions and other factors. In addition, we continue to evaluate the potential for new technology platform expansion through acquisition with the goal of accelerating our long-term revenue growth. In evaluating this, we are seeking an approach that has high growth potential and high margin like our enhanced business. As we look longer term, we are confident that Kalenzyme's strong financial position will enable us to continue delivering value to shareholders via capital return. And with that update, I'll now turn the call over to Elaine for a discussion of our third quarter financial results.
spk02: Thank you, Helen. Let me start by turning to slide eight for a review of our third quarter revenues. So as Helen indicated, we saw strong growth in the quarter as our partners continued to execute on their commercial and development plans. Total revenue for the third quarter was $65.3 million, an increase of 41% compared to $46.2 million in the prior year period. I'll now discuss the three components of our revenue. Revenue from royalties for the quarter was $23.9 million, a year-over-year increase of 44%. And as Helen discussed, our royalties returned to growth sooner than expected, primarily due to the successful launch of subcutaneous Darzalex, utilizing enhanced technology by our partner, Janssen. Product sales were $9 million in the quarter, compared with $29.2 million in the year-ago period, during which there was a large sale of bulk RUPH20 to Janssen in preparation for their launch of sub-Q Darzalex. Collaboration revenue in the quarter totaled $32.3 million, up from $0.4 million in the year-ago period as a result of recognizing revenue for expected milestone payments from our partners, Argenic and Roche, related to their progress to date toward phase three study starts. Let me move to slide nine, and you'll find a more detailed breakdown of our third quarter P&L. So beginning with total operating expenses, which were $25 million in the third quarter, down 65% from $70.8 million in the prior year period. The overall decrease in total operating expenses resulted from our shift in strategic focus to the company's enhanced drug delivery technology in November of 2019 and the related restructuring, which has now been completed. Cost of product sales were $5.6 million, compared with $22.3 million in the year-ago period, with a decrease attributable to the same large sale of bulk RUPH20 to Janssen that I mentioned a moment ago, related to their preparations for the launch of subsea Darzalex. Research and development expenses of $7.7 million decreased 75% from $30.5 million in the prior year period as a result of halting our PEG-PH20 oncology drug development activities in November of last year. And SG&A expenses were $11.7 million, down 35% from $18 million in the prior year primarily due to the reduction in force and discontinuation of PEG-PH20-related launch readiness expenses following the company's restructuring. And I'm pleased to report that net income for the quarter was $36.2 million, or 25 cents per share, compared to a net loss of $25 million, or 17 cents per share, in the third quarter of 2019. And this marks our second consecutive quarter of what we expect will be sustainable profitability and cash flow generation going forward for Halozyme. With respect to our cash position, cash, cash equivalents, and marketable securities were $346.7 million at September 30th, 2020, compared to $421.3 million at December 31st, 2019. This decrease reflects the impact from our operating loss in the first quarter and share repurchase activities through the first three quarters of 2020. Now let me turn to slide 10 for a discussion of our 2020 financial guidance. Based on the latest information from our partners and our planned expenditures for the year, I'm pleased to share our increased guidance for 2020. We now expect total revenues of $250 to $260 million from our prior guidance of $230 to $245 million, which would represent year-over-year growth of 28% to 33%. Of that total, we expect revenue from royalties to comprise $80 to $85 million. We had previously anticipated flat royalties year-over-year in 2020. However, we are now in a position to increase our expectations based on the early sales trends for Subtube Darzelex utilizing Enhance. Looking at the other components of our projected 2020 revenue guidance range, we further expect revenue under collaborations of $115 to $120 million, driven by new clinical trial starts and commercial milestones. In addition, we expect a substantial increase in API revenue in the fourth quarter, resulting in projected full-year product sales between $52 and $57 million. Excluding non-recurring expenses related to the wind down of our former oncology operations in the first half of 2020, we continue to expect annualized operating expenses, excluding COGS, to be at the top end of our guidance of $65 to $75 million in the fourth quarter of 2020, or between $18 and $19 million for the quarter. Moving to earnings per share, we are increasing our guidance range to 80 to 85 cents, up from our prior guidance range of 60 to 75 cents. During the quarter, we continued our share repurchase activities under our three-year $550 million share repurchase program that was authorized by our board a year ago. And in the third quarter, we repurchased $59 million worth of our common shares or 2.1 million shares at a weighted average price of $27.57. Our commitment to capital return driven by a diversified portfolio of partnered products and programs, sustainable profitability, and a strong growth and cash flow outlook has resulted in share purchases through end of the third quarter of $312.4 million at a weighted average price of $18.92. And all of this has been accomplished less than one year into our $550 million three-year buyback program. We continue to expect we'll repurchase up to $150 million in our shares this year, which would mean up to an additional $37.6 million that could be repurchased in the fourth quarter, pending market conditions and other factors. So with that, I'll now turn the call back to Helen.
spk00: Thank you, Elaine. We believe we are still only at the beginning stages of delivering on both the clinical and financial promise of our enhanced drug delivery technology. Our technology delivers value for our partners, our patients, and our Halazyme shareholders. Helizyme is in the strongest financial position ever as a company. And we look forward to strong growth in our revenues, profitability and cash flow in the coming quarters and years, which will allow us to deliver on our commitment to return capital to shareholders, maintain long-term sustainable growth and maximize shareholder value. I'll close on slide 11. Entering 2020, we established this ambitious set of goals to measure our performance as we completed the company restructuring. I could not be more pleased with the tremendous progress to date. And as you've just heard, we project we will finish the fourth quarter as strongly as this one. I'd like to end, as ever, by thanking the amazing Halozyme team for your tremendous effort and these strong results. And with that, we'd now be delighted to take your questions. Operator, please would you open up the call for the questions?
spk05: As a reminder, to ask a question, you will need to press star 1 on your telephone. To withdraw your question, press the pound or hash key. Please stand by while we compile the Q&A roster. Your first question comes from Charles Duncan from Cantor Fitzgerald. Please go ahead.
spk03: Thank you. Hi, Helen and Elaine. Congratulations on some really awesome results in this quarter.
spk00: Thank you.
spk03: Thank you very much. Yeah. So also, thanks for taking my questions. I had two. One is kind of a financial one, and one is a pipeline one. Helen, with regard to the launch of FastPro, I'm sure you won't be able to say too much on this, but maybe provide a little bit of color. When you think about the conversion rate thus far, how much of it was driven perhaps by say, the COVID environment and how much of it is driven by substantial difference in the clinical profile of the compound or of the drug? And where would you expect the conversion rate to end up over time?
spk00: Yeah, thanks, Ches. You know, I don't have any data to support, you know, the impact of COVID and the uptake of Darzalex and FazPro in the US. And we also know that there has been successful launch outside the US as well. What I can say is the performance has certainly exceeded our expectations. and whether COVID has played a role in that it would seem possible it had but I don't have any data to support that but we are certainly absolutely delighted with the strong initial uptake. We don't provide and we haven't provided any specific guidance as to what we think that the conversion will be but I would just say that when you think about a patient today facing what is often four to six hours IV infusion who could have the option of receiving the treatment in just the three to five minutes in a sub-Q injection, we certainly think this is a very strong value proposition. And we think patients are definitely going to welcome it, both the new to start patients, but also the patients currently receiving the IV.
spk03: Makes sense. Appreciate that. And then a quick question on the pipeline. If I look at you know, but for, I guess, hycubia, you know, all of the drugs are primarily used in the oncology setting or hematology setting, yet you're moving into, you know, with this diversification with argenics and escartizumab into neurology, and I guess I'm wondering if you think neurological disorders or neurology is really a growth opportunity, number one, and could you see more movement in that diversification direction? And number two, what do you think the agency is going to think about in terms of reviewing the product profile, you know, say the neurology division versus oncology? Do you think there will be a different risk benefit or do you think that's pretty well established across the agency?
spk00: Yeah, I think as it turns out, many of our initial approvals, as you point out, Chas, were in oncology. That just happens to be that many of the most successful brands in the world are in oncology. And we're delighted to be seeing us not just moving into neurology, as you mentioned, but also into autoimmune diseases. And so we see continued strong potential to expand outside of oncology into multiple additional indications where patients are receiving their therapies via long IV infusions. You know, in neurology, we also have Ocrevus, if you recall that I mentioned that Roche's is developing. So lots of potential, any injectable drug with a long infusion, we certainly welcome talking to companies to see whether a sub-Q would bring benefits like competitive differentiation. We now have five approvals given by the FDA and four so far outside the U.S. And I do feel that with the comments we've been getting back with each subsequent review, there are less and less. And I do believe that the safety profile of RUPH20 is now very well characterized in more than 400,000 patients treated commercially with the drug. And so I would not expect a big difference between a neurology division from an oncology division because of that long track record of safety data we'll be able to bring forward.
spk03: Okay. That's helpful, Culler. Thank you for taking my questions. Congrats.
spk00: Thanks, guys.
spk05: Your next question comes from Jim Perchino from Wells Fargo. Please go ahead.
spk09: Hi, guys. Let me add my congratulations on the quarter. A couple questions. I guess first, Helen, just on Darzalex, FASPRO, and SubQ, can you remind us, is there anything in terms of the agreement where the royalties might tear up with increasing sales, or is it fixed independent of the level of sales? And then I guess a second question is just as you look at the ramp of Dargelex FazPro and early launch of FezGo, are there hair dynamics or market dynamics that are different between those two products, if you can comment at all? And then I have a follow-up.
spk00: Yeah, we don't provide specific details on a contract-by-contract basis. We certainly, in some of our contracts, do have tiering, but I can't speak specifically to the Janssen one. With regard to the launch uptake of FezGo versus FastPro, it certainly does appear that FASPRO is out of the gate very fast. And I recall it has been approved in the U.S. and Europe and was approved in May and June, respectively, whereas FESGO was only approved in the U.S. so far and at the very end of June, so really launching in July. So I do think timing is a factor. And, you know, we would expect and we had signaled that our expectation was that the first few quarters would be very much focused on laying down the groundwork for physicians to be able to freely write these drugs, getting EMRs, formularies, etc. So we would expect the first quarters to be slow and obviously the exception to that is how Faspro is performing as well as Darzalex SC. But for Fezgo, as we get all of that in place, we expect 2021 to be a year of robust uptake of Fezgo as well.
spk09: And Helen, just a second line of inquiry just around IP. And we get the question often about how to think about the 2027 and 2024, you know, quote unquote, patent cliffs for PH20. So just giving you an opportunity, how do you think about it both in terms of new deals post those fine points, products and development and products on the market? You know, what do you see in terms of the risk to each of those layers of the business?
spk00: Yeah, I think what's unique about Enhance and the fact that, yes, our US patent does expire in 2027, recall the construct of our contract is that we will continue to receive royalties for a minimum of 10 years after the first commercial sale. So, you know, that's a very important factor as you're thinking about the products that are entering the clinic today that could get approved in 2004, 5, 6. In 2027, they will be in a very robust part of their growth cycle. Now, at the time of the patent expiry, if there's no co-formulation patent in place, there is a step down to approximately 50%. But recall, these could be products that are in a very attractive growth period, so you've got to layer that on and think about that dynamic as well. Our current projections only include those products that we have line of sight for today. And so I've already mentioned that in 2021, we expect additional partners will bring targets into the clinic. Those are additional launches that are going to continue that overall revenue growth so that even if there is a step down, there is still the potential that we can continue to grow beyond that. And then finally, we have this wonderful option of applying for co-formulation patents, which are not all guaranteed to be granted, but if there's novelty, can be granted. And the general effect of those is that they can prolong the time that we can get the duration of the royalties and can push out the time to the step down. And so I will say that post-2027, Jim, the key takeaway is we can see a very clear path to continued royalty growth after 2027. We know exactly what we need to do that. We need to launch more products, and we need to get more co-formulation patents. And so that is unique about Enhance, and we're excited about that and what it can mean for the ongoing substantial royalty revenues from our pipeline.
spk09: Helen, just quickly on that last point, can you say if there's been any new co-formulation patents filed this year or expected to be filed this year without naming any specific products?
spk00: Yes, we do have one partner who is intending to file a co-formulation patent this year.
spk09: Perfect. Thanks for taking the questions.
spk00: Thanks, Jim.
spk05: Your next question comes from Joe Kim from BMO Capital Markets.
spk06: Good afternoon, and congrats on the quarter for myself also. First, on the performance of Garzalex SE, do you have a sense of what the distribution of sales was between the U.S. and EU? And also, do you think that timing is a potential factor for the difference between FastPro and FezGo? Is it possible that we could see a kind of a strong quarter for FESGO and 4Q? And does your RAISE guidance include that possibility?
spk00: Yeah, let me start for the second question. We expect that the European approval, the earliest that will occur is the first quarter of 2021. And so, as we think about the total potential for FESGO, approval in Europe in 2021. The duration of time it takes to get things in place in the US really does signal towards us thinking the robust growth of Fesco is in 2021. With the fourth quarter really being a set-up year. We don't have, and J&J did not provide, though, any specific breakdown between the U.S. and Europe. Based on our triangulation of syndicated sales data and reported sales, we estimate that the majority of sales are occurring in the U.S., but there has been good uptake in European markets as well. So we look forward to perhaps Janssen providing some more color in that at a later date.
spk06: Great. Understood. Thank you. And a question on the pipeline. For Roche, when they start the phase three for tezolizumab in lung cancer, do you know what their potential registration path for expanding that therapy beyond its current approval in lung cancer and all the other cancers that it's already approved for?
spk00: I will say that in conversations that each individual partner has with the FDA, they talk with them about what the potential scope of indications that might be possible from their proposed clinical development programs. That obviously is proprietary information that is the property of each of those companies, so while we are aware of it, we unfortunately aren't able to talk. What we do know is that the FDA at the Rituxan-Hysela ODAC did say that a separate study may not be needed for each and every indication as we go forward. And we know that all of our partners who are aware of that engage in discussions with the FDA to try and identify what is the right size clinical program for all of the indications that they want.
spk06: That's great. That's very helpful. Thank you very much.
spk05: Your next question comes from Jessica Five from JP Morgan. Please go ahead.
spk01: Hey, this is with Brennan on for Jess. Thanks for taking our questions. So with how lumpy share repo has been, can we get some color on how your team has approached those decisions and if that's sort of going to be your strategy moving forward?
spk00: All right. Let me ask Elaine to address that.
spk02: Sure. Thanks for the question. So I think we've indicated that we have a total three-year share buyback program that was approved by the board in November of 2019. We're about 56, 50 or so percent of the way there with only one year into the program. To date, we've repurchased about just over $312 million of our common shares about 16.5 million shares at an average price of $18.92. This year, we've purchased of that $112.4 million at an average price of $20.76. Obviously, our stock has traded up, I think, reflecting the strong growth potential of our partners' products and programs and the strong growth trajectory for Halazine. We continue to have, I think, a lot of confidence in terms of the diversified portfolio that Halazine represents. of the multiple Blockbuster products and programs of our partners. And our share buyback program, I think, will continue to reflect that.
spk01: Okay, thanks. And then just looking at Fezgo, you mentioned a couple times, you expect a really robust year headed into 2021 here. Do you have any color or expectations you can give us for timeline on getting UM or you reimbursement contract set up there?
spk00: Yeah, we know if the EMA do a standard review based on when Roche indicated they had submitted the application, we would expect a positive, if there's a positive opinion, approval in the first quarter of 2021.
spk01: Okay, thanks for taking questions.
spk05: Your next question comes from Jason Butler from GMP Securities. Please go ahead.
spk07: Hi, thanks for taking the questions, and let me add my congrats on the quarter. Helen, just wanted to follow up on a couple comments you made about, you know, FDA, and you said we're talks in high clear the FDA adcom comment that not all indications may need separate trials. Is there anything that, you know, that you're, you know, in your dialogue with partners and FDA that suggest this perspective is shared broadly across the agency versus being specific to that review division or specific to oncology or hematology?
spk00: Yeah, as I think Chas pointed out, the majority of our products have been in the oncology division, and I'd say that's where many of the conversations are happening. But there are also conversations happening with some of the other divisions based on the stage of the programs, but there are less of those. But I do think, I mean, if we triangulate as to what the FDA might have in their mind, and, you know, we see that through Darzalex, with them not receiving the pomalidomide with daratumumab indication initially for the sub-Q because there wasn't any data supporting it, and there might have been a safety question. And so what I think is logical for the FDA, no matter the division to support, is to look at this from the perspective of, is there any theoretical reason why the addition of RUPH20 would add a new safety question? In the majority of cases, that is not going to be the case, and therefore, we don't think that's going to be an issue. But there will be instances where the FDA does say, please generate data. There isn't any data, and this is a theoretical concern. So I think that is the logic the FDA will apply, and I think it could happen in any of the divisions. And I'll just say again, you know, we have a robust safety database with now over 400,000 patients treated commercially, which I do think really does help with the FDA in understanding that it's very well established and clear strong safety profile of RUPH20. Okay, great.
spk07: And then in terms of the additional trial phase three study from the undisclosed, program to start in 4Q. Is there a milestone payable on the start of that study and also either of the other two undisclosed phase one studies that could start this quarter?
spk00: Yes, there are milestones associated with the phase three and the phase ones.
spk07: Great. Okay. Thanks for taking the questions.
spk05: Your next question comes from the line of
spk08: joe catanzaro from piper sandler please go ahead hey guys uh congrats on the nice quarter here and thanks uh for taking my questions helen you may have uh touched on this a bit in your prepared remarks but wondering if you could comment a little bit more qualitatively maybe on how the legacy products performed sequentially in the quarter um just to maybe get a better sense of darah's full contribution in the quarter and then i i know you mentioned you didn't have visibility into uh revenues with regards to us and xus and and darzelex spaz pro but wondering if you can speak to just the general conversion rate you're seeing in different territories and whether the u.s is in fact seeing the highest early conversion rate or are there other ex-us territories that are seeing that thanks
spk00: I'll take the Darzalex one and then I'll turn the legacy products over to Elaine. With the uptake of Darzalex, we're aware from triangulating on the syndicated sales data and the overall sales that are published by J&J that there are sales in the U.S. and ex-U.S. for SubQ. with the US being the larger one of the two. We do not have any insights into the actual specific conversion rate outside the US. There is some directional information, as you're probably aware, in the syndicated data. However, this has not been confirmed or verified by J&J, and so we're not in a position to talk about the uptake. You know, I think it's very clear to see that with this substantial increase that we saw quarter on quarter, which we've said is primarily driven by Darzalex, there has been very strong uptake, predominantly in the U.S., but also in markets outside the U.S., coming from new and continuing patients. And with that, I'll turn it over to Elaine just to talk about the trends with the legacy products.
spk02: Sure. So, as you know, Joe, we don't break out our individual royalties, but, you know, for quarter-on-quarter, you know, the overall royalties were relatively flat for all the sub-Q products, excluding Darzalex, so Herceptin, Medthera, and Hycubia. And, you know, for 2020, we projected a decline in Herceptin sub-Q and Medthera sub-Q as a result of ongoing biosimilar competition based on the information that Roche has provided as well.
spk08: Okay, got it. Thanks. That's helpful, and thanks for taking my questions here.
spk00: Thanks, Eric.
spk05: Your next question comes from Anna from Goldman Sachs. Please go ahead.
spk10: Hi, this is Anna. I'm on for Greg Sivanovich. Thank you for taking our questions, and congratulations on the quarter. Just a few questions from us. You know, when can we expect to see some changes uh contributions some meaningful contributions from the sc darzalex to hit the top line from eu and also similar for fesco and just also any comments for any additional updates on any potential bd in the future i think so
spk00: All right. So we do have commented, Anna, that all of the royalties that we're seeing in the third quarter, there are already contributions from outside the U.S. We don't have any details as to exactly where those are coming from as yet, but already there is uptake in markets outside the U.S., For FESGO, we anticipate European approval, if it follows standard timelines, would occur in the first quarter of 2021. And so at the moment, as I mentioned earlier, really the focus is on getting everything set up in the United States and continuing to get the formularies and the EMR and all of the other logistics with FESGO. For additional BD, we are very engaged in a number of discussions with regard to Enhance, and I remain very confident we'll sign additional deals for Enhance. And then as we're looking at other technologies, yes, we continue to be evaluating a number of technologies. Looking for a match to what we've stated is going to be important, an opportunity to increase our revenue growth in a manner that has a profile like in hands with the high margin and high growth. So nothing to update specifically there, but actively at work looking at opportunities.
spk10: Great. Thanks so much.
spk05: As a reminder, to ask a question, press star 1 on your telephone. Your next question comes from Joel Beatty from Citi. Please go ahead.
spk04: Hi. Congratulations on the quarter. My question's on FASBRO. Are you able to provide any context on the trajectory of growth in royalties that you're seeing and trajectory of the conversion from IV to sub-Q? And any reason to think that the next few months could be any different than the trajectory you saw over the last few months?
spk00: Yeah, thanks, Joel. You know, as we look at it, we mentioned that this is the first full quarter of sales for FastPro. And so we are going to be evaluating the continued trend and the additional data points over the next month. When we think about where additional growth will come from, in the already launched markets, which is U.S. and some of the markets outside the U.S., Obviously, there's an opportunity, given we're only one quarter in, the growth is going to come from more physicians adopting and getting deeper penetration and uptake in the individual clinics. And so that, I think, will continue to drive strong growth. And then as we think about markets that have not yet launched, we know that as reimbursement is got in place, we're going to see a cascade of additional launches occurring over the next months and quarters. So many growth drivers with only one quarter of sales under our belt. I do expect to see a very good trend, but we're trending off three data points at the moment. And so we certainly are going to be watching very carefully in the next month to see exactly what that rate of growth is going to be. But there are, as I mentioned, many drivers for strong continued growth.
spk04: That makes sense. And then maybe another question, and it's just at a higher level on partnering. When you have new targets that are not selected by any partners to date, how does that discussion go in terms of who gets first preference? Can a new company come in and grab it, or do existing partners get any type of
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