Halozyme Therapeutics, Inc.

Simply press star, then the number one on your telephone keypad. Please note, this event is being recorded. I will now turn the call over to Tram Bui, Halazim's Vice President of Investor Relations and Corporate Communications. Please go ahead.

Thank you, operator. Good afternoon, and welcome to our third quarter 2025 Financial and Operating Results Conference call. In addition to the press release issued today after the market closed, you could find a supplementary slide presentation that will be referenced during today's call in the investor relations section of our website. Leading the call will be Dr. Helen Torley, HALA Science President and Chief Executive Officer, who will provide an update on our business, and Nicole Labrosse, our Chief Financial Officer, will review our financial results as well as our outlook. On today's call, we will be making forward-looking statements as outlined on slide two. I 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. I will now turn the call over to Dr. Helen Torley.

Good afternoon everyone and thank you for joining us today. I will begin on slide 3. I am very pleased to report another quarter of record royalty revenue of 236M dollars representing a remarkable 52% increase year over year and resulting in total revenue of 354M dollars representing 22% growth year over year. These results were driven by the continued momentum of our three established blockbuster subcutaneous therapies, Darcelic subcutaneous, Fezgo, and Vodgar Hytrulo. Adjusted EBITDA growth exceeded top-line growth, increasing 35% over prior year third quarter to $248 million, reflecting the strength inherent in our royalty-based business model. Our core enhanced drug delivery technology continues to drive the significant momentum in our business and reflects the powerful and growing opportunity for subcutaneous delivery to reshape the future of healthcare. Enhance can allow treatments that once required lengthy infusions in hospitals or infusion suites to be administered in minutes more conveniently, including in the doctor's office and in the patient's home. For patients, it means less time spent traveling, fewer invasive procedures, and greater independence, all while maintaining efficacy and safety. At the same time, it is reducing the burden on the healthcare systems, lowering total cost of care, and freeing up capacity in hospitals and infusion centers. Turning now to slide four. Year to date, 13 of the 15 growth catalysts have been achieved, including new product approvals, expanded indications, reaching new regions, and achieving key reimbursement milestones across major markets. These new growth catalysts support our near and long-term revenue opportunity. This quarter, there were two notable indication approvals for our two leading growth drivers. Firstly, Darzalex subcutaneous received European Commission approval for a new indication in smoldering multiple myeloma, providing another meaningful growth catalyst for the franchise. Smoldering multiple myeloma is a precursor condition to active multiple myeloma, expanding Darzalex subcutaneous reach into a new early disease stage patient population and potentially increasing treatment duration and the lifetime value per patient. And the second indication was Argenix's Vive Dura pre-filled syringe with Enhance, approved in Japan for self-injection for generalized myasthenia gravis and chronic inflammatory demyelinating polyneuropathy. Delivered as a once-weekly, 30-90-second subcutaneous injection, Vive Dura can be self-administered at home, eliminating the need for lengthy infusions in clinical settings. The pre-tilt syringe with Enhance is a key enabler of broader adoption because it simplifies administration, reduces treatment burden, and potentially enhances patient adherence. Rounding out the 15 growth catalysts, we project two additional meaningful U.S. approvals this year. One for Darzalex subcutaneous and smoldering multiple myeloma, and the second for Ribravant subcutaneous, an EGFR-mutated non-small cell lung cancer. I'll move now to slide 5. Driven by the continued strong performance of our core enhanced technology, we are pleased to rate our full year 2025 guidance ranges. Driven by royalty revenue, we now project total revenue of $1.3 to $1.375 billion, reflecting 28 to 35% growth over 2024. Royalty revenue is now expected to grow 49% to 54% to $850 to $880 million for the full year. Primarily driven by our three established blockbuster subcutaneous therapies, Darzalex subcutaneous, Fezgo, and Viagart Hytrulo with Enhance. We now anticipate adjusted EBITDA of between $885 million and $935 million, representing year-over-year growth of 40% to 48%. And we expect non-GAAP diluted earnings for sure of $6.10 to $6.50, representing year-over-year growth of 44% to 54%. Moving now to slide six. Recently, we announced the acquisition of Electrify, furthering our vision to enable at-home administration of biologic therapies. This strategic move supports our ambition to expand our portfolio of drug delivery technologies. With Electrify's innovative technology, we aim to extend subcutaneous delivery to a broader range of biologics, reinforcing our focus on patient-centric drug delivery technology solutions. By applying Electrify's HyperCon technology, concentrations of 400 to 500 milligrams per ml, or as much as four to five times higher than many current conventional formulations, can now be achieved. This breakthrough technology will enable more drugs to be delivered at home via AusInjector. A treatment option we know is of high interest and demand for pharma and biotech companies, particularly those working in inflammation and immunology, neurology, nephrology, and oncology. By bringing together now three innovative drug delivery technology solutions, Enhance, our auto-injectors, and HyperCon, we will create a new commercial opportunity for our partners and further strengthen Halosam's role as the partner of choice in patient-centered drug delivery, expanding our long-term growth horizon. Moving now to slide seven. Importantly, HyperCon is at the value inflection point. The three partner agreements in place have resulted in two products projected to enter the clinic and begin clinical development of the HyperCon formulation by the end of 2026 or earlier. Each of these two products, as a different formulation, is already approved and has achieved blockbuster sales already. With Halozyme's established expertise in subcutaneous we are well positioned to identify opportunities to accelerate the time to approval and to unlock significant new revenue potential through advancing new nominations and signing new agreements. The addition of Electrify's HyperCon technology further enhances our offerings, enabling us to provide best-in-class solutions and maintain strong momentum in transforming the subcutaneous delivery landscape. Now let me move to Flight 8, where I will review our current growth drivers for the quarter. Let me begin with Darzalex, which continued its exceptional performance this quarter. Sales for Darzalex increased 20% on an operational basis to $3.7 billion, primarily driven by the continued strong share gains of approximately 5.7 points across all lines of therapy, and nearly 9 points in the frontline setting, as well as through market growth. This marks the seventh consecutive quarter of frontline growth of five or more points, underscoring the continued momentum of the brand. With 96% share of sales resulting from the subcutaneous formulation with Enhance in the United States and more than 90% global subcutaneous share, Enhance is bringing value to patients earlier in treatment as they live longer on therapy. Darzalex is, and we project will remain, the gold standard of treatment for multiple myeloma, holding more than 50% market share across all lines of therapy. And there are two additional new catalysts that are projected to continue the strength of Darzalex subcutaneous. These include the recent European Commission approval of Darzalex subcutaneous for patients with high-risk smoldering multiple myeloma, which occurred in July, and it marks the first approved treatment for this early stage of the disease. We also anticipate potential U.S. approval for smoldering multiple myeloma following the FDA's favorable vote on the risk-benefit profile earlier this year. And separately, Johnson & Johnson reported positive top-line results from the Phase III Majestic III studies, which further validated the role of Darzalex Faspro in later lines of multiple myeloma treatment. The combination with Tecvalli and Darzalex Faspro in relapsed refractory multiple myeloma demonstrated at a planned interim analysis a statistically significant improvement in both progression-free survival and overall survival when compared to standard of care for patients who had received one to three prior lines of treatment, highlighting once again the clinical value of Darzalex Faspro with Enhance. These milestones add to the growing list of approvals and clinical successes that continues to expand the reach of Darzalex subcutaneous and to support analyst projections for the brand to reach more than $18 billion in 2028. And Helizine will continue to earn royalties on the subcutaneous formulation of Darzalex through 2032. Let me move now to Fezgo, which is shown on slide 9. Fesgo continues to be Roche's number one growth driver with nine months revenue of 1.8 billion Swiss francs or approximately 2.3 billion dollars, reflecting a 54% year-over-year increase. In the third quarter, the increasing conversion from intravenous progetta and Herceptin reached 51% in 78 launch countries, up five points from the prior quarter. Conversion of Progetta to Fesgo is now projected to achieve 60%, increasing from the prior 50% peak conversion, and this is driven by the strong value proposition. We are pleased with Fesgo's growing adoption, with royalties secured at the full mid-single-digit rate through 2030. I'll turn now to Vivegard, which is shown on slide 10. Vivegard Hurtulo continues to be a key driver of the exceptional growth of the Vivegard franchise, with total sales of Vivegard increasing 96% year-over-year in the third quarter to $1.13 billion. The subcutaneous formulation enabled by Enhance has been instrumental in expanding access to new prescribers and patients across both approved indications of generalized myasthenia gravis and chronic inflammatory demyelinating polyneuropathy. Supporting both of these indications, the pre-filled syringe with Enhance, which was launched in April of 2025, is now approved in most major markets. By enabling cell subjection in just 20 to 30 seconds, whether at home, in the clinic, or while traveling, this innovation has expanded access to new patient populations, simplified treatment logistics, and accelerated adoption in earlier lines of treatment for both GMG and CIDP. The pre-filled syringe has expanded the number of prescribers by 260 physicians, opening up new pockets of patients in GMG and CIDP. With approximately 50% of patients using the pre-filled syringe who are new to Viveguard, Argenic stated that this is still the beginning of the growth curve for both indications. Argenix also stated that they project FiveGuard's total addressable GMG market could ultimately approach approximately 60,000 patients globally versus roughly 17,000 at launch as the biologic opportunity expands and with the future potential addition of ocular and seronegative patient populations. I'll turn now to the CIDP indication. Argenix commented that they are seeing consistent growth in both patient start and prescriber engagement, driven by physician trust in the safety profile of Asgard Hotrulo and its ability to deliver meaningful, functional improvements. The pre-filled syringe is driving additional demand, offering convenience of self-injection and enabling flexible administration. 85% of CIBP patients are switching from IVIG and there is also early adoption amongst treatment-naive patients. Argenix believes they are at the beginning of the growth curve for CIDP and that they will see continued expansion of the prescriber base. 5-part Hytrula's strong commercial success, growing approvals, launches in GMG and CIDP, and plans to expand its autoimmune disease indication footprint represent a compelling royalty growth opportunity for Halazan. We project VibeGuard Arturo will be a durable contributor to our long-term financial performance, with analysts projecting total VibeGuard sales of $7.7 billion in Myasthenia Gravis and CIDP in 2028, and with Halazine earning royalties through the early 2040s. It is truly remarkable how only these three products I've just described, Darcelic, Subcutaneous, Fezgal, and Viagra or Trulio, are driving our 52% year-over-year growth in royalty revenue this quarter and will have continued growth opportunity for years to come. Moving now to slide 11, I'll review the progress of our recently launched products, which will begin to contribute meaningfully in 2026. Beginning with Ocrevus. Roche reported continued strong momentum for Ocrevus, which represented 5.2 billion Swiss francs, or approximately $6.5 billion, up 7% for the first nine months of 2025. The company reaffirmed its expectation for high single-digit growth of Ocrevus this year. Ocrevus Zenugo, which utilizes our enhanced technology, received approval in 2024 and offers a rapid 10-minute subcutaneous injection, a significant improvement over the multi-hour intravenous administration and monitoring process. The subcutaneous formulation of Ocrevus is a key growth driver for Roche's neurology franchise. It enables penetration into community neurology practices and rural areas where IV infusion capacity is limited, which unlocks access to previously underserved patient populations. More than 12,500 patients are now on the subcutaneous formulation globally, representing more than a 75% increase from the 7,000 patients receiving subcutaneous Ocrevus that we reported last quarter. Uptake is also increasing in the United States, following the permanent J-code, which was granted on April 1st, which is simplifying reimbursement and enabling broader adoption. In the United States, approximately 800 healthcare providers are now prescribing Ocrevus Zanubo with Enhance, and 60% of the subcutaneous volume is coming from community practices, demonstrating strong traction outside the traditional site of academic centers. 50% of Ocrevus renewable patients are new to brand, indicating market expansion beyond IV conversions. In early launch countries like Germany, similar trends are being observed, reinforcing the enhanced formulation's ability to grow the overall Ocrevus patient base. Roche anticipates the subcutaneous formulation to represent an incremental $2 billion opportunity, while analysts project the total Ocrevus brand opportunity will reach $10 billion by 2028. We're pleased with how Ocrevus Zenuvo powered by our enhanced technology is transforming the multiple sclerosis treatment landscape with its rapid 10-minute subcutaneous delivery. unlocking new patient access, accelerating adoption across community practices, and driving meaningful franchise growth. Helizine will earn royalties on the subcutaneous formulation at the full mid-single-digit royalty rate through 2030 and at a step-down rate until at least 2034. Let me turn now to Roche's Ticentric Hybrisa with Enhance. Ticentric Hybrisa was approved in the United States and Europe in 2024 for all of the IV indications. offering patients and providers a more convenient seven-minute subcutaneous injection. Roche has stated its strategy is to drive conversion from IV to subcutaneous use. Ticentric generated 2.6 billion Swiss francs in revenue for the first nine months of 2025, or approximately $3.3 billion, and analysts project revenue of approximately $4.5 billion by 2028. Halazyme earns royalties and net sales of the subcutaneous formulation at the full mid-single-digit rate through the 2040s, underscoring the long-term value of this partnership. Let me move now to Bristol Myers Squibb's Updivo. In the third quarter, global Updivo sales reached approximately $2.5 billion, reflecting a 6% year-over-year increase driven primarily by strong demand. The U.S. launch of OpdivoQuantage with Enhance is progressing well, with growth fueled by the continued use of OpdivoQuantage across all of the indicated tumor types, as well as the permanent J-code, which was received in the quarter. Sales in the third quarter were $67 million, a doubling from $30 million in the second quarter. Opdivo Quantage offers the convenience of a three to five minute subcutaneous administration and the flexibility of outpatient infusion, features that are driving growing adoption among both patients and providers across all of the indicated tumor types. Based on the strong year-to-date performance of Opdivo and Opdivo Quantage, BMS now expects stronger growth than previously guided, with sales expected in the high single-digit to the low double-digit range for the full year. Analyst forecasts total brand sales of $9.5 billion by 2028. And let me move now to Ribervent. Ribervent continues to demonstrate strong growth. In the third quarter, Johnson & Johnson reported total Ribervent ID and SC revenue of $198 million, reflecting triple-digit year-over-year growth. The European approval of Ribrovan subcutaneous with Enhance in April marks Halazan's 10th commercialized partner product and is a key milestone in our global expansion. The subcutaneous delivery of Enhance provides the strong efficacy profile of IV Ribrovan while reducing administration time from multiple hours to just minutes and results in a five-fold reduction in the potentially serious adverse event of infusion-related reactions when compared to the IV formulation. J&J's strategy to simplify treatment and enhance patient convenience is resonating with physicians for use in combination with lezetronib in the first-line treatment of adult patients with advanced EGFR-mutated non-small-cell lung cancer and for the same population following failure of a platinum-based regimen. Ribrovan is an important brand for Johnson & Johnson, who are continuing to invest in clinical studies to demonstrate the full potential. recently published results in the New England Journal of Medicine from the Phase III Mariposa study reported that Ribravan plus Lazetranib significantly reduced the risk of death when compared to Osteometrinib, which is the current standard of care in EGFR-mutated non-small cell lung cancer. Recall, Osimetronib is marketed as Tadryso by AstraZeneca and generated $6.6 billion in global revenue in 2024, which underscores the potential commercial opportunity for Ribrovan. And at ESMO 2025, Johnson & Johnson also presented new data in a different high-unmet need patient population from the Origami 4 study, showing that subcutaneous amivantamab enabled by Enhance achieved a 45% overall response rate in patients with recurrent or metastatic head and neck cancer. These results could mark a turning point in the treatment paradigm and certainly could provide further support for Johnson & Johnson's statements that Ribrovent will be a $5 billion product. Dimensionalizing all of the opportunity for Helizyme Our three blockbusters that are driving today's strong growth, Darzalex, Fezgo and 5GAR, represent an approximately $30 billion in TAM opportunity in 2028. What is very exciting is that these newer launches I've just described also represent an additional approximately $30 billion in opportunity in 2028. With the recent approvals, our total opportunity doubled, setting the stage for our strong continued royalty revenue performance. Our portfolio of 10 launch products is well positioned to deliver $1 billion in annual revenue in 2027. And this milestone reflects the strength of our long-term strategy and our partnerships. Importantly, we anticipate sustained royalty contributions from all products through at least 2030, with several extending into the 2040s, ensuring a robust and durable revenue stream. Let me turn now to slide 12, and I'll review the development opportunities that are not reflected in our royalty revenue projections today. We have eight programs that are currently in various stages of clinical development, with two additional programs anticipated. Among the most advanced opportunities are Bristol-Myers Squibb's subcutaneous nivolumab with rilatilumab and Takeda's TAC881, both of which are in phase 3 development. These programs represent potential new royalty growth opportunities beyond what is currently reflected in our forecast through 2028. And let me now turn to our progress in new deals. I have said before that we will sign a new enhanced agreement this year and remain confident that we will. This confidence is supported by the stage of the discussions we're having and the proximity to finalization. Interest in Enhance is strong as more companies seek meaningful competitive differentiation. And on our two development auto-injector agreements, I am pleased to say we're making progress and project completion of planned human factor studies by mid-2026. With that, let me now turn the call over to Nicole.