Halozyme Provides Update on Non-Binding Proposal to Combine with Evotec

Would establish an innovative pharma services company with capabilities spanning drug discovery and development, biologic manufacturing and drug delivery technologies

Would meaningfully diversify, scale and extend Halozyme's revenue and adjusted EBITDA well into the next decade and beyond

All-cash transaction would be funded by cash on hand and new debt with expected pro forma net leverage less than 2x two years post close

SAN DIEGO, Nov. 18, 2024 /PRNewswire/ -- Halozyme Therapeutics, Inc. (NASDAQ: HALO) ("Halozyme" or the "Company") today provided an update on its non-binding proposal to acquire Evotec SE (NASDAQ: EVO) ("Evotec") for €11.00 per share in cash, implying a fully diluted equity value of €2.0 billion. In a presentation posted on its investor relations website, Halozyme highlights how its proposed combination with Evotec would create a leading global innovative pharma services company that would deliver significant value to all stakeholders.

The presentation highlights include:

The acquisition of Evotec would be a logical extension and diversification of Halozyme's business, and is aligned with Halozyme's M&A criteria:

• De-risked business: Evotec has a large, diverse revenue base with expected future revenue and margin expansion opportunities.
• Structurally similar business model: Evotec has a proprietary and innovative platform of technologies in drug discovery, development and biologic manufacturing.
• Strong biopharma partnerships: Evotec partners with more than 500 biopharma companies globally.
• Potential for durable long-term revenue growth: Evotec has platform opportunities and a pipeline that would be additive to future potential revenue streams.

The combination would create a unique B2B global innovative pharma services company with complementary and leverageable platforms and cross-selling opportunities:

• Drug discovery: Evotec's Shared R&D platform is an established and comprehensive continuum of innovative discovery platform tools with a strong track record of success and more than 500 partners and 140+ partnered and unpartnered asset opportunities.
• Continuous biologics manufacturing: Just – Evotec Biologics is a pioneer in end-to-end continuous manufacturing, a breakthrough biologic manufacturing capability with 10 products in late-stage development and clinical manufacturing and more than 50 products in CMC development/IND enabling.
• Drug delivery: Halozyme's ENHANZE^® drug delivery technology is the leading, commercially-validated solution to facilitate the subcutaneous delivery of large volume injected biologic drugs, currently approved in eight products in more than 100 global markets, with expected near-term approvals, a robust pipeline in development and new deal opportunities.

The combination would meaningfully diversify, scale and extend Halozyme's revenue and adjusted EBITDA well into the next decade and beyond.

• Establishes a diversified pharma services portfolio with approximately $2 billion in annual revenue projected in 2025.
• Enhances long-term growth profile and maintains 15-20%+ 2023A – 2028E revenue CAGR while extending and accelerating growth into the next decade and beyond.
• Delivers robust long-term margin profile with a pro forma 45- 50% adjusted EBITDA margin by 2026 and significant cash flow generation over time.

The all-cash transaction would be supported by an existing lender group with a clear path to less than 2x net leverage within two years post-close.

• Halozyme has significant cash reserves on-hand and a strong balance sheet with cash projected to be more than $800 million at year-end 2024.The transaction would not be subject to a financing condition.
• Halozyme is working with financing relationship partners on optimal financing structure and confirms equity will not be used to finance the transaction.
• Assuming a transaction is consummated, net debt on balance sheet at close would be approximately $3 billion, with a significant portion prepayable, and net leverage for funding at transaction close projected to be less than 4.75x.
• Net leverage is expected to decrease to less than 2x within two years post-close and quickly reducing meaningfully below that level through debt paydown and adjusted EBITDA growth, with additional multiple levers to further accelerate debt paydown over time.

For more information about Halozyme, its strategy, financials and capital allocation priorities, please visit https://ir.halozyme.com/overview/default.aspx.

Advisors

Centerview Partners is serving as Halozyme's financial advisor and Weil, Gotshal & Manges LLP, as legal advisor.

About Halozyme

Halozyme is a biopharmaceutical company advancing disruptive solutions to improve patient experiences and outcomes for emerging and established therapies. As the innovators of ENHANZE^® drug delivery technology with the proprietary enzyme rHuPH20, Halozyme's commercially-validated solution is used to facilitate the subcutaneous delivery of injected drugs and fluids, with the goal of improving the patient experience with rapid subcutaneous delivery and reduced treatment burden. Having touched more than 800,000 patient lives in post-marketing use in eight commercialized products across more than 100 global markets, Halozyme has licensed its ENHANZE^® technology to leading pharmaceutical and biotechnology companies including Roche, Takeda, Pfizer, Janssen, AbbVie, Eli Lilly, Bristol-Myers Squibb, argenx, ViiV Healthcare, Chugai Pharmaceutical and Acumen Pharmaceuticals.

Halozyme also develops, manufactures and commercializes, for itself or with partners, drug-device combination products using its advanced auto-injector technologies that are designed to provide commercial or functional advantages such as improved convenience, reliability and tolerability, and enhanced patient comfort and adherence. The Company has two commercial proprietary products, Hylenex^® and XYOSTED^®, partnered commercial products and ongoing product development programs with Teva Pharmaceuticals and Idorsia Pharmaceuticals.

Halozyme is headquartered in San Diego, CA and has offices in Ewing, NJ and Minnetonka, MN. Minnetonka is also the site of its operations facility.

For more information visit www.halozyme.com and connect with us on LinkedIn and Twitter.

Forward-Looking Statements

In addition to historical information, the statements set forth in this press release include forward-looking statements including, without limitation, statements concerning the Company's and Evotec's expected future financial performance and growth rates, including expectations for future total revenues, gross margin expansion, and adjusted EBITDA margin, as well as the Company's future plans, objectives, expectations and intentions relating to a potential transaction concerning Evotec, such potential transaction's expected impact and contributions to the Company's and the combined group's operations and financial results, the financing and closing of such potential transaction, as well as the expected timing and benefits of such potential  transaction, the Company's and Evotec's future product development and regulatory events and goals, product collaborations, the Company's business intentions and financial statements and anticipated results.  These forward-looking statements are typically, but not always, identified through use of the words "expect," "believe," "enable," "may," "will," "could," "can," "durable," "growth," "innovate," "potential," "intends," "estimate," "anticipate," "plan," "predict," "probable," "potential," "possible," "should," "continue," and other words of similar meaning and involve risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Actual results could differ materially from the expectations contained in these forward-looking statements as a result of several factors, including  uncertainties concerning future matters such as market conditions, changes in domestic and foreign business changes in the competitive environment in which the Company and Evotec operate, discussions with Evotec and its board of directors, and financing a potential transaction, inability of the parties to successfully or timely enter into or consummate a transaction, including the risk that any required regulatory approvals are not obtained, are delayed or are subject to unanticipated conditions that could adversely affect the combined group or the expected benefits of a transaction, unexpected levels of the combined group's revenues, expenditures and costs, unexpected results or delays in the growth of the combined group's business, or in the development, regulatory review or commercialization of the combined group's partnered or proprietary products, regulatory approval requirements, unexpected adverse events or patient outcomes and competitive conditions. These and other factors that may result in differences are discussed in greater detail in the Company's most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q filed with the Securities and Exchange Commission. Except as required by law, the Company undertakes no duty to update forward-looking statements to reflect events after the date of this release.

Non-GAAP Financial Measures:

These materials contain certain non-GAAP financial measures and projections. The Company reports Adjusted EBITDA, Adjusted EBITDA Margin and non-GAAP diluted earnings per share and expectations of those measures in addition to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. The Company does not provide reconciliations for forward-looking adjusted measures to GAAP, including as to the projected benefits of the potential transaction concerning Evotec, due to the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliation.

Halozyme Contacts

Investors
Tram Bui
Halozyme VP, Investor Relations and Corporate Communications
609-359-3016
[email protected]

U.S. Media
Andrea Calise
Teneo
917-826-3804
[email protected] 

Christina Coronios
Teneo
646-531-2882
[email protected] 

German Media
Felix Schoenauer
Teneo
+49 69 867906054
[email protected] 

SOURCE Halozyme Therapeutics, Inc.