Halozyme Therapeutics, Inc. Q3 FY2025 earnings call

• Record royalty revenue of $236 million, 52% y-o-y growth, total revenue $354 million, 22% y-o-y growth. • Adjusted EBITDA grew 35% to $248 million. • Core ENHANZE technology drives momentum, enabling subcutaneous delivery to reshape healthcare. • Achieved 13 of 15 growth catalysts, including new indications for DARZALEX and VYVGART. • Acquired Elektrofi to expand drug delivery technology portfolio, leveraging Hypercon technology for higher concentrations. • Recently launched products like OCREVUS ZUNOVO and Tecentriq Hybreza show strong momentum.

Royalty revenue was $236 million, representing a 52% increase year-over-year, contributing to total revenue of $354 million, a 22% year-over-year growth. Adjusted EBITDA grew 35% to $248 million. The core ENHANZE drug delivery technology drives momentum. Key products like DARZALEX subcutaneous, Phesgo, and VYVGART Hytrulo are major contributors. DARZALEX had $3.7 billion in sales with 20% operational growth; Phesgo had 9-month revenue of CHF 1.8 billion (approx $2.3 billion) up 54% y-o-y; VYVGART Hytrulo had total sales up 96% y-o-y to $1.13 billion.

• Full-year total revenue expected $1.3 billion to $1.375 billion, 28%-35% y-o-y growth. • Royalty revenue expected $850 million to $880 million, 49%-54% y-o-y growth. • Adjusted EBITDA expected $885 million to $935 million, 40%-48% y-o-y growth. • Non-GAAP diluted EPS expected $6.10 to $6.50, 44%-54% y-o-y growth.

Q: On capital allocation, how to weigh paying down debt, buybacks, and Elektrofi-like opportunities, and how to monitor Elektrofi's performance?

A: Helen Torley and Nicole LaBrosse discussed being patient in finding opportunities, expecting to delever quickly with robust cash flows, and monitoring Elektrofi via metrics like 2 partner first-in-human starts by end 2026, streamlined development plans, and advancement of Hypercon with partners.

Q: On Elektrofi, awareness with current ENHANZE partners and OCREVUS market growth?

A: Helen Torley said there's good awareness of Hypercon technology, with partners showing support for cross-platform opportunities; on OCREVUS, 50% of patients are new to brand, expanding market footprint.

Q: On M&A, how high to lever up, potential for another transaction, and Elektrofi combinability studies?

A: Nicole LaBrosse said willing to go up to 3x net leverage, unlikely another acquisition this year; Helen Torley mentioned initial focus on separate strategies of ENHANZE and Hypercon, with technical experts to determine combinability path.

Q: On new ENHANZE deals and guidance upside contributors?

A: Helen Torley said confident in new deal this year due to proximity to completion, and Nicole LaBrosse said guidance driven by strong royalties from VYVGART Hytrulo, Phesgo, and DARZALEX, with new indications contributing to upside.

Q: On auto-injector business, development path, economics, and pipeline updates?

A: Helen Torley discussed auto-injector compatibility with Hypercon, straightforward integration into development, and noted no recent public updates from ViiV and Acumen, with economics described in deal press releases.

Q: On partnership and pipeline for revenue growth, addressing royalty sustainability?

A: Helen Torley explained royalty streams from current blockbusters, recently launched products, and development pipeline, with new deals signed now potentially launching in early 2030s, ensuring sustainable royalty revenue for years to come.