Halozyme Reports First Quarter 2014 Financial Results

Positive top-line data from studies with HTI-501 in cellulite and Hylenex with insulin pumps

12 May, 2014, 16:15 ET from Halozyme Therapeutics, Inc.

SAN DIEGO, May 12, 2014 /PRNewswire/ -- Halozyme Therapeutics, Inc. (NASDAQ: HALO) today reported financial results for the first quarter ended March 31, 2014. Financial highlights for the first quarter include revenues of $12.0 million and a net loss of $26.5 million, or $0.22 per share. This compares to revenues of $11.8 million and a net loss of $19.3 million, or $0.17 per share, for the first quarter of 2013.  The increase in net loss reflects Halozyme's increased investment in clinical trials for its PEGPH20 and Hylenex® proprietary programs.

"In the first quarter we saw advances in both our proprietary programs and in our partnered programs. We reported positive clinical trial results for the use of Hylenex in type 1 diabetes and for HTI-501 in cellulite.  We also announced the European marketing authorization for MabThera SC, which is the third European approval for partnered programs that utilize our rHuPH20 technology. We ended the quarter in a strong financial position, supported by approximately $165 million in cash, cash equivalents and marketable securities," stated Dr. Helen Torley, President and Chief Executive Officer.  "In early April, we temporarily halted dosing of PEGPH20 in Study 202 so the Data Monitoring Committee (DMC) could evaluate a possible imbalance in the rate of thromboembolic events between the drug arm and the control arm in the trial. We have since provided the DMC with requested information including an amended study protocol, and the DMC has informed us that they now support continued enrollment of patients and dosing of PEGPH20 in the trial with the proposed study modifications.  We have provided information to the U.S. Food and Drug Administration (FDA) so they can conduct their assessment of our request for the clinical hold to be lifted so we may continue enrollment of patients and dosing of PEGPH20 in the Phase 2 trial."

First Quarter 2014 Highlights

  • MabThera SC approved by the European Commission: In March 2014, the European Commission approved Roche's new subcutaneous (SC) formulation of MabThera (rituximab) using Halozyme's recombinant human hyaluronidase (rHuPH20) for the treatment of patients with follicular lymphoma and diffuse large B-cell lymphoma. The previously approved formulation of MabThera is delivered by an intravenous infusion which takes approximately 2.5 hours. The new MabThera SC formulation can be administered subcutaneously in approximately 5 minutes and comes as a ready-to-use, fixed dose, 1,400 mg solution, which shortens pharmacy preparation time and reduces the overall impact on hospital resources.
  • CONSISTENT 1 clinical trial of Hylenex® Recombinant met the primary endpoint: In March 2014, Halozyme announced that the primary endpoint of non-inferiority of A1C levels at six months was met for the CONSISTENT 1 trial. The trial is evaluating Hylenex recombinant and a new formulation of Hylenex currently under review by the FDA when used as pre-treatment of the insulin infusion site in patients with type 1 diabetes receiving continuous subcutaneous insulin infusion (CSII) in comparison to no pre-treatment. Data on the secondary endpoints in the trial indicate a potential reduction in the rate of hypoglycemic events associated with the use of Hylenex and new formulation of Hylenex in the trial in comparison to no pre-treatment. The Company plans to present additional data from this study at the 74th Scientific Sessions of the American Diabetes Association being held in San Francisco from June 13–17, 2014.
  • Positive Proof of Concept Results for HTI-501: In March 2014, Halozyme announced positive top-line results from a proof of concept Phase 1/2 clinical trial evaluating the use of HTI-501 in the treatment of cellulite. The primary endpoint of the clinical trial was met, showing a statistically significant improvement in the appearance of cellulite in the areas of the patients' skin treated with HTI-501 as determined by physician assessment 28 days after treatment compared to the same skin areas prior to treatment and skin areas treated with vehicle control. In follow up, the effect, based on physician assessment, was maintained at three and six months.

First Quarter 2014 Financial Highlights

  • Revenues for the first quarter of 2014 were $12.0 million, compared to $11.8 million for the first quarter of 2013. Revenues in the first quarter included $5.9 million in product sales of bulk rHuPH20 for use in manufacturing Roche products, $2.6 million in collaboration revenues, $2.5 million in Hylenex product sales, and $0.8 million in royalty revenue from sales of partnered products.
  • Research and development expenses for the first quarter of 2014 were $21.4 million, compared to $22.0 million for the first quarter of 2013.
  • Selling, general and administrative expenses for the first quarter of 2014 were $10.3 million, compared to $7.6 million for the first quarter of 2013. The increase was primarily due to an increase in compensation costs, including stock compensation expense.
  • The net loss for the first quarter of 2014 was $26.5 million, or $0.22 per share, compared with a net loss for the first quarter of 2013 of $19.3 million, or $0.17 per share.
  • Cash, cash equivalents and marketable securities were $164.5 million at March 31, 2014, compared with $71.5 million at December 31, 2013. Excluding the net proceeds of $107.7 million from the February 2014 financing, net cash used in the first quarter of 2014 was approximately $14.7 million.

Financial Outlook for 2014

  • For 2014, excluding the proceeds from the recent financing, Halozyme continues to expect net cash burn to be between $45 and $55 million for the year.

Webcast and Conference Call

Halozyme will webcast its quarterly update conference call today, May 12, 2014 at 4:30 p.m. EDT/1:30 p.m. PDT. During the call, management will discuss the financial results for the first quarter of 2014 and provide a business update. To listen to the live webcast please visit the "Investors" section of Halozyme's corporate website at www.halozyme.com. A webcast replay will be available shortly after the call at the same address. For those without access to the Internet, the live call may be accessed by phone by calling (866) 710-0179 (domestic callers) or (334) 323-7224 (international callers) using passcode 769890. A telephone replay will be available shortly after the call by dialing (877) 919-4059 (domestic callers) or (334) 323-0140 (international callers) using replay ID number 74917420.

About Halozyme

Halozyme Therapeutics is a biopharmaceutical company dedicated to developing and commercializing innovative products that advance patient care. With a diversified portfolio of enzymes that target the extracellular matrix, the Company's research focuses primarily on a family of human enzymes, known as hyaluronidases, which increase the dispersion and absorption of biologics, drugs and fluids. Halozyme's pipeline addresses therapeutic areas, including oncology, diabetes and dermatology that have significant unmet medical need today. The Company markets Hylenex® recombinant (hyaluronidase human injection) and has partnerships with Roche, Pfizer and Baxter. Halozyme is headquartered in San Diego. For more information on how we are innovating, please visit our corporate website at www.halozyme.com.

Safe Harbor Statement

In addition to historical information, the statements set forth above include forward-looking statements (including, without limitation, statements concerning the possibility that FDA may lift the clinical hold on patient enrollment and dosing of PEGPH20, the Company's planned presentation of data from CONSISTENT 1 at the 74th Scientific Sessions of the American Diabetes Association, the Company's expected net cash burn for 2014 and Company's other future expectations and plans for its business, financial results and the development and commercialization of product candidates and the potential benefits and attributes of such product candidates) that involve risk and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. The forward-looking statements are typically, but not always, identified through use of the words "believe," "enable," "may," "will," "could," "intends," "estimate," "anticipate," "plan," "predict," "probable," "potential," "possible," "should," "continue," and other words of similar meaning. Actual results could differ materially from the expectations contained in forward-looking statements as a result of several factors, including regulatory requirements, delays in development and regulatory review, unexpected adverse events, unexpected expenditures and costs, unexpected fluctuations or changes in revenues from collaborators and competitive conditions. These and other factors that may result in differences are discussed in greater detail in the Company's Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 28, 2014.

Investor Contact: Schond Greenway Halozyme Therapeutics 858-704-8352 ir@halozyme.com

Media Contact: Denise Powell 510-703-9491 dpowell@brewlife.com

Halozyme Therapeutics, Inc

 Condensed Consolidated Statements of Operations

(Unaudited)

(in thousands, except per share data)

Three Months Ended March 31,

2014

2013

REVENUES:

Product sales, net

$    8,568

$    1,509

Royalties

799

-

Revenues under collaborative agreements

2,599

10,325

Total revenues

11,966

11,834

OPERATING EXPENSES:

Cost of product sales

5,520

739

Research and development

21,415

22,034

Selling, general and administrative

10,250

7,556

Total operating expenses

37,185

30,329

OPERATING LOSS

(25,219)

(18,495)

Investment and other income

47

55

Interest expense

(1,376)

(848)

NET LOSS

$ (26,548)

$ (19,288)

Basic and diluted net loss per share

$     (0.22)

$     (0.17)

Shares used in computing basic and diluted net loss per share

118,943

112,417

 

Halozyme Therapeutics, Inc

Condensed Consolidated Balance Sheets

(Unaudited)

(in thousands)

March 31,

December 31,

2014

2013

ASSETS

Current assets:

Cash and cash equivalents

$    76,570

$          27,357

Marketable securities, available-for-sale

87,919

44,146

Accounts receivable, net

10,956

9,097

Inventories

6,765

6,170

Prepaid expenses and other assets

8,704

8,425

Total current assets

190,914

95,195

Property and equipment, net

3,628

3,422

Prepaid expenses and other assets

2,645

2,676

Restricted cash

500

500

Total Assets

$  197,687

$        101,793

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

Current liabilities:

Accounts payable

$      8,658

$            3,135

Accrued expenses

12,272

14,369

Deferred revenue, current portion

13,026

7,398

Current portion of long-term debt, net

2,404

-

Total current liabilities

36,360

24,902

Deferred revenue, net of current portion

44,847

45,745

Long-term debt, net

47,389

49,772

Other long-term liabilities

2,343

1,364

Stockholders' equity (deficit):

Common stock

124

115

Additional paid-in capital

475,249

361,930

Accumulated other comprehensive (loss) income

(25)

17

Accumulated deficit

(408,600)

(382,052)

Total stockholders' equity (deficit)

66,748

(19,990)

Total Liabilities and Stockholders' Equity (Deficit)

$  197,687

$        101,793

 

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SOURCE Halozyme Therapeutics, Inc.



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