SAN DIEGO, Nov. 4, 2019 /PRNewswire/ -- Halozyme Therapeutics, Inc. (NASDAQ: HALO) today announced strategic actions to reposition the Company with a focus solely on its ENHANZE® drug delivery technology.
In order to implement this strategic shift, Halozyme will immediately initiate an organizational restructuring to halt development activities for PEGPH20 and close its oncology operations. As a result, Halozyme expects the following:
- Headcount will be reduced by approximately 55%, or approximately 160 positions, with over 80% of the reduction completed in early January 2020.
- Restructuring and other cost saving efforts will result in savings of $130 to $140 million in 2020 compared with the Company's most recent guidance for 2019 operating expenses excluding cost of goods sold.
- Upon completion of the restructuring and after booking all related one-time charges, Halozyme anticipates becoming a sustainably profitable company beginning in the second quarter of 2020.
- Projected annualized operating expenses excluding cost of goods sold of between $65 million and $75 million will be achieved by the fourth quarter of 2020.
The Company expects to book separation and contract termination fees in the fourth quarter of 2019 and will provide further details during its third quarter 2019 financial results webcast and conference call on Tuesday, November 12.
The go-forward organization will comprise approximately 120 employees focused on driving the continued growth of ENHANZE®, specifically in areas that are critical to supporting partners such as manufacturing, quality, regulatory and product development. An additional 12 employees will continue promoting the Company's commercial drug Hylenex®.
The Company's ENHANZE® business continues to grow with three commercial products and 11 products currently in clinical trials. Halozyme will provide a more detailed update for its ENHANZE® business during its third quarter financial results webcast and conference call.
Halozyme's Board of Directors has also authorized the initiation of a capital return program to repurchase up to $350 million of the Company's outstanding common stock over the next three years. The timing of share repurchases and the number of shares of common stock that are repurchased will depend on market conditions and other factors. Repurchases may be commenced or suspended at any time or from time-to-time at the Company's discretion without prior notice. Repurchases may be made through both public market and private transactions. The Board will regularly review this capital return policy in connection with a balanced capital allocation strategy.
"Our mission now is to transition our strategy to focus on our high-growth, high-margin ENHANZE® drug delivery technology platform," said Dr. Helen Torley, president and CEO of Halozyme. "Our ENHANZE® business is well positioned for this growth, supported by strong partnerships with leading brands and a promising development pipeline. As a result, Halozyme now has a clear path to near-term, sustainable profitability with strong cash flows and high growth prospects. In addition, our share repurchase program reflects our continued commitment to creating value for our shareholders and to implementing a capital return philosophy aligned with our new company profile."
Dr. Torley continued, "The results of the well-designed and well-executed HALO-301 study were not what we wanted or expected. I wish to extend my deep appreciation for all who supported this study and made it possible, in particular the patients, their families, our investigators and their staff, our investors and the Halozyme team."
The actions taken by the Company follow the results of its HALO-301 Phase 3 clinical study, which were disclosed in a separate press release issued today.
Conference Call and Webcast Information
Halozyme will webcast a conference call today at 8:30 a.m. ET / 5:30 a.m. PT to discuss its plans to focus strategy on its ENHANZE® drug delivery technology. Dr. Helen Torley, president and chief executive officer, will lead the call, which will be webcast live through the "Investors" section of Halozyme's corporate website and a replay will be available following the close of the call. To access the webcast, please visit www.halozyme.com approximately fifteen minutes prior to the call to register, download and install any necessary audio software. The call may also be accessed by dialing (877) 824-0907 (domestic callers) or (647) 689-5655 (international callers) using passcode 3069304. A telephone replay will be available after the call by dialing (800) 585-8367 (domestic callers) or (416) 621-4642 (international callers) using replay ID number 3069304.
Halozyme Therapeutics is a biotechnology that has established value-driving partnerships with leading pharmaceutical companies including Roche, Baxalta, Pfizer, Janssen, AbbVie, Lilly, Bristol-Myers Squibb, Alexion and argenx for its ENHANZE® drug delivery technology. Halozyme is headquartered in San Diego. For more information visit 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 Company's future financial performance including expectations for profitability and reduced expenses, plans to implement an organizational restructuring including anticipated reductions in employee headcount, plans to focus its operations solely on its ENHANZE® drug delivery technology, and the size and timing of share repurchases under the Company's share repurchase program. Forward-looking statements regarding the Company's ENHANZE® drug delivery technology may include potential growth of the ENHANZE® business, the possible activity, benefits and attributes of ENHANZE®, the possible method of action of ENHANZE®, its potential application to aid in the dispersion and absorption of other injected therapeutic drugs, the number of collaborative targets actually chosen, whether such products are ultimately developed or commercialized, whether milestones triggering milestone payments will be achieved, and statements concerning facilitating more rapid delivery of injectable medications through subcutaneous delivery 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 unexpected delays or results of the Company's organizational restructuring, unexpected expenditures and costs, unexpected delays in the execution of the planned share repurchase, unexpected results or delays in the growth of the Company's ENHANZE® business, unexpected results or delays in the development and regulatory review of ENHANZE® products, regulatory approval requirements, changes in strategic priorities and product development and commercialization plans by ENHANZE® collaborators, unexpected adverse events and competitive conditions. These and other factors that may result in differences are discussed in greater detail in the Company's most recently filed Annual Report on Form 10-K and Quarterly Reports on Form 10-Q filed with the Securities and Exchange Commission.
Vice President, Investor Relations and Corporate Communications
SOURCE Halozyme Therapeutics, Inc.