Halozyme Therapeutics, Inc. Q2 FY2025 earnings call

Key Points

• Announced another record quarter with total revenue of $326 million, a 41% increase year-over-year. Royalty revenue grew 65% to $206 million, and adjusted EBITDA increased 65% to $226 million.
• Raised 2025 financial guidance. Projecting total revenue of $1.275 billion to $1.355 billion (26%-33% growth over 2024), royalty revenue of $825 million to $860 million (44%-51% growth year-over-year), adjusted EBITDA between $865 million and $915 million, and non-GAAP diluted EPS of $6 to $6.40.
• Completed the second $250 million share repurchase tranche and initiated the third $250 million share repurchase program.
• There are 14 growth catalysts, with 11 already occurred. Highlighted new product approvals, new indication approvals, and reimbursement milestones for products like DARZALEX subcutaneous, Phesgo, and VYVGART Hytrulo.
• Detailed performance of key products: DARZALEX subcutaneous had strong growth in royalty revenue; Phesgo had 55% year-over-year revenue growth in the first half of 2025; VYVGART Hytrulo's sales increased 97% year-over-year in the second quarter.
• Introduced pipeline with 9 product candidates, including potential new growth drivers and royalty streams.

Total revenue in the second quarter was $326 million, representing a 41% increase over the second quarter of the prior year. Royalty revenue grew 65% year-over-year to $206 million, which is approximately 63.8% of the total revenue. Adjusted EBITDA increased 65% over the prior year second quarter to $226 million.

Guidance Details

• Total revenue projection for 2025: $1.275 billion to $1.355 billion, representing 26% to 33% growth over 2024.
• Royalty revenue projection for 2025: $825 million to $860 million, representing 44% to 51% growth year-over-year.
• Adjusted EBITDA projection for 2025: Between $865 million and $915 million, representing 37% to 45% growth year-over-year.
• Non-GAAP diluted EPS projection for 2025: $6 to $6.40, representing 42% to 51% growth year-over-year.

Risks

• IP litigation with Merck: Filed a district court case suing Merck for infringing 15 MDASE patents. There are PGRs filed by Merck, with hearing dates set and potential invalidity challenges. Also, the One Big Beautiful Bill Act has the potential to impact DARZALEX IV inclusion for certain indications.

Q: Can you help us understand the status of the IP litigation with Merck?

A: We have filed a district court case suing Merck for infringing 15 MDASE patents. We don't yet have a scheduling order from the court but expect to receive it in the next couple of months. There are 4 PGRs filed by Merck with hearing dates set for March 2, 2026, and first decisions on common issues expected on June 2, 2026.

Q: How much do you use sell side as an input to setting guidance?

A: When setting guidance, we use trends, inputs from partners, and royalty reports. We triangulate these data points to give the updated view for the full year.

Q: What's the status of the OCREVUS launch?

A: Roche reported about 7,000 patients globally have started OCREVUS subcu. About 50% of patients in the U.S. are new to brand, and about 50% are from IV switch.

Q: When could we expect more clarity on Halo driving royalties associated with the MDASE patents?

A: It could be resolved if Merck settles or upon success in the district court case. The district court case is ongoing with no clear timeline yet, but we believe we will win and Merck is infringing.