Halozyme Reports Fourth Quarter and Year End 2011 Financial Results and Provides Guidance for 2012

Company Announces Roche Submission of a Line Extension Application for Subcutaneous Herceptin, Triggering a $4 Million Milestone Payment

Mar 09, 2012, 07:00 ET from Halozyme Therapeutics, Inc.

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SAN DIEGO, March 9, 2012 /PRNewswire/ -- Halozyme Therapeutics, Inc. (NASDAQ: HALO) today reported financial results for the quarter and year ended December 31, 2011, and announced that Roche has submitted a Line Extension Application to the European Medicines Agency (EMA) for a subcutaneous (SC) formulation of Herceptin® (trastuzumab) to treat patients with HER2-positive breast cancer. The filing of the application triggers a $4 million milestone payment to Halozyme under the License and Collaboration Agreement between Halozyme and Roche.

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"2011 was a year of high productivity at Halozyme. We made significant progress advancing all of our product candidates, including ones that could improve patient care in oncology, diabetes, and dermatology," said Gregory I. Frost, Ph.D., President and Chief Executive Officer, Halozyme. "The European regulatory filing for subcutaneous Herceptin is particularly exciting as it could represent a more convenient treatment option for many women with this life-threatening disease."

Fourth Quarter Highlights Highlights of Halozyme's fourth quarter and recent activities include:

Proprietary Programs

  • Presented data from two Phase 1 studies which indicate pegylated rHuPH20 (PEGPH20) can favorably alter the tumor stroma of hyaluronin-rich tumors.
  • Began a Phase 2 clinical trial with PEGPH20 in patients with advanced pancreatic cancer to study the safety, tolerability, and efficacy of gemcitabine (a chemotherapeutic) plus PEGPH20 compared to gemcitabine plus placebo.
  • Announced positive results from two Phase 2 clinical trials of ultrafast Analog-PH20 (analog insulin + rHuPH20) in patients with Type 1 and Type 2 diabetes. Both trials met their primary endpoint of non-inferiority of A1C compared to the insulin analog comparator, with superior reductions in post-prandial glucose excursions in the Analog-PH20 arms. The data from the trials indicate that, compared to insulin analog alone, Analog-PH20 use resulted in a greater than 50% increase in the proportion of patients able to consistently achieve the American Association of Clinical Endocrinologists guideline targets for post-prandial glucose at both one and two hours after meals.
  • Announced positive results from a Phase 1b trial indicating that pre-administration of 150 units of rHuPH20 prior to the start of three days of NovoLog® insulin aspart pump infusion therapy led to consistent insulin exposure over the infusion set life and superior glucose control following meals.
  • Presented data from a Phase 1/2 trial of HTI-501 (an investigational, conditionally active recombinant human cathepsin) in female patients with fibrosclerotic panniculopathy, more commonly known as cellulite. No serious or severe adverse events were reported in the ongoing Phase 1 portion of the trial. These data support commencement of the Phase 2 trial.

Partnered Programs

  • Announced that Roche has submitted a Line Extension Application to the EMA for subcutaneous Herceptin to treat patients with HER2-positive breast cancer. Herceptin SC uses Halozyme's Enhanze™ technology which enables the injection of a large volume of medication to be administered subcutaneously (under the skin) and may result in faster administration times versus intravenously (IV) administered Herceptin.
  • Announced positive results from Roche's Phase 3 trial that showed women with HER-2 positive early breast cancer who received Herceptin SC experienced comparable results to Herceptin given as an IV infusion. The full data set from this trial is scheduled to be presented by Roche at the European Breast Cancer Conference (EBCC) on March 23rd in Vienna, Austria.
  • Baxter presented long-term clinical data on HyQ (Immune Globulin + rHuPH20), proposed brand name HyQvia, indicating the investigational therapy continued to demonstrate favorable safety and activity during the extension phase.
  • Announced positive top-line data from a Phase 2 study that suggest rHuPH20 enhances the delivery and absorption of Cinryze® (C1 esterase inhibitor [human]) in subjects with hereditary angioedema.

Fourth Quarter and Year End 2011 Financial Results The net loss for the fourth quarter of 2011 was $18.4 million, or $0.18 per share, compared with a net loss for the fourth quarter of 2010 of $16.9 million, or $0.17 per share. The net loss for the year ended December 31, 2011 was $19.8 million, or $0.19 per share, compared to a net loss of $53.2 million, or $0.56 per share, for the comparable period in 2010.

  • Revenues for the fourth quarter of 2011 were $2.4 million, compared to $3.6 million for the fourth quarter of 2010. Revenues in the fourth quarter of 2011 also consisted of the amortization of upfront payments received from Baxter and Roche of $0.6 million and research and development reimbursements from Baxter and Roche of $1.2 million.
  • Research and development expenses for the fourth quarter of 2011 were $14.9 million, compared with $15.9 million for the fourth quarter of 2010, primarily due to a decrease in clinical trial activities, partially offset by an increase in manufacturing activities.  
  • Selling, general and administrative (SG&A) expenses for the fourth quarter of 2011 were $5.9 million, compared to $4.6 million for the fourth quarter of 2010. The increase for SG&A results from higher marketing and market research expenses during the quarter.  
  • Cash and cash equivalents were $52.8 million as of December 31, 2011, compared with $83.3 million as of December 31, 2010 and $66.3 million as of September 30, 2011. Net cash used in the fourth quarter of 2011 was approximately $13.5 million. In February, the Company raised approximately $82 million through an underwritten public offering of 7,820,000 shares of its common stock.

Financial Outlook for 2012

  • For 2012, operating expenses are expected to grow at a mid-teens growth rate, compared to 2011, due to increased costs in manufacturing, clinical trials, marketing, and reimbursable partner-related costs. Excluding a recent financing, with net proceeds of approximately $82 million, the Company expects net cash burn to be between $50 and $55 million.

Conference Call Halozyme will webcast its Quarterly Update and Year End Conference Call today at 8:00 a.m. ET/5:00 a.m. PT. Gregory I. Frost, Ph.D., Halozyme's President and Chief Executive Officer, will lead the call. During the call, the Company plans to provide further details underlying its fourth quarter and full year end 2011 financial results. To access the webcast, please log on to www.halozyme.com approximately fifteen minutes prior to the call to register, download, and install any necessary audio software. For those without access to the Internet, the live call may be accessed by phone by calling (877) 407-8037 (domestic callers) or (201) 689-8037 (international callers). A telephone replay will be available shortly after the call by dialing (877) 660-6853 (domestic callers) or (201) 612-7415 (international callers) using account number 367 and replay ID number 390311.

Upcoming Corporate Presentations Halozyme is scheduled to present at two upcoming investor conferences.

  • 24th Annual Roth Conference in Dana Point on March 14, 2012 at 12:30 p.m. ET/9:30 a.m. PT. Kurt Gustafson, Chief Financial Officer of Halozyme Therapeutics, will provide a corporate overview.
  • Barclays Capital 2012 Global Healthcare Conference in Miami on March 14, 2012 at 4:15 p.m. ET/1:15 p.m. PT. Gregory I. Frost, Ph.D., President and Chief Executive Officer of Halozyme Therapeutics, will provide a corporate overview.

The presentations will be webcast through the "Investors" section of Halozyme's corporate website at www.halozyme.com, and recordings will be made available for 90 days following the events. To access the live webcasts, please log on to Halozyme's website approximately fifteen minutes prior to the presentations to register and download any necessary audio software.

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, that increase the absorption and dispersion of biologics. Halozyme's pipeline addresses therapeutic areas, such as diabetes, oncology and dermatology that have significant unmet medical need. The Company markets Hylenex® recombinant (hyaluronidase human injection) and has partnerships with Roche, Baxter, ViroPharma and Intrexon. Halozyme is headquartered in San Diego, CA. 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 our anticipated financial results for 2012 (including operating expense and cash burn) and potential benefits and attributes of our product candidates. These statements involve risk and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. The forward-looking statements are also 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 expenditures, clinical trial results, delays in development and regulatory review, regulatory approval requirements and competitive conditions. These and other factors that may result in differences are discussed in greater detail in the Company's reports on Forms 10-K, 10-Q, and other filings with the Securities and Exchange Commission.

Media/Investor Contact: Anne Erickson Executive Director Halozyme Therapeutics 858-704-8264 aerickson@halozyme.com

Halozyme Therapeutics, Inc.

Unaudited Condensed Consolidated Statements of Operations

Three Months Ended

Twelve Months Ended

December 31,

December 31,

2011

2010

2011

2010

REVENUES:

Product sales

$        348,280

$        200,078

$     1,836,102

$        895,518

Revenues under collaborative agreements

2,062,886

3,372,446

54,250,334

12,728,597

Total revenues

2,411,166

3,572,524

56,086,436

13,624,115

OPERATING EXPENSES:

Cost of product sales

56,159

888,870

257,834

985,283

Research and development

14,916,205

15,933,029

57,563,470

51,773,504

Selling, general and administrative

5,866,921

4,634,392

18,104,073

15,122,960

Total operating expenses

20,839,285

21,456,291

75,925,377

67,881,747

OPERATING LOSS

(18,428,119)

(17,883,767)

(19,838,941)

(54,257,632)

OTHER INCOME, NET:

Interest income, net

7,521

17,287

63,530

49,015

Other income, net

4,983

972,806

5,560

966,967

Total other income, net

12,504

990,093

69,090

1,015,982

NET LOSS

$ (18,415,615)

$ (16,893,674)

$(19,769,851)

$  (53,241,650)

Basic and diluted net loss per share

$            (0.18)

$         (0.17)

$        (0.19)

$          (0.56)

Shares used in computing basic and diluted

net loss per share

103,406,407

100,337,075

102,566,089

94,357,695

Halozyme Therapeutics, Inc.

Unaudited Condensed Consolidated Balance Sheets

December 31,

December 31,

2011

2010

ASSETS

Current assets:

Cash and cash equivalents

$  52,825,527

$ 83,255,848

Accounts receivable

2,262,465

2,328,268

Inventory

567,263

193,422

Prepaid expenses and other assets

8,332,242

3,720,896

Total current assets

63,987,497

89,498,434

Property and equipment, net

1,771,048

1,846,899

Total Assets

$ 65,758,545

$ 91,345,333

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Accounts payable

$ 7,556,859

$ 3,820,368

Accrued expenses

5,615,574

8,605,569

Deferred revenue

4,129,407

2,917,129

Total current liabilities

17,301,840

15,343,066

Deferred revenue, net of current portion

36,754,583

55,176,422

Deferred rent, net of current portion

802,006

474,389

Stockholders' equity:

Common stock

103,990

100,581

Additional paid-in capital

255,817,772

245,502,670

Accumulated deficit

(245,021,646)

(225,251,795)

Total stockholders' equity

10,900,116

20,351,456

Total Liabilities and Stockholders' Equity

$  65,758,545

$  91,345,333

SOURCE Halozyme Therapeutics, Inc.



RELATED LINKS

http://www.halozyme.com