Advertisement
Singapore markets closed

  • Straits Times Index

    3,344.73
    +8.14 (+0.24%)
     

  • S&P 500

    5,277.51
    +42.03 (+0.80%)
     

  • Dow

    38,686.32
    +574.82 (+1.51%)
     

  • Nasdaq

    16,735.02
    -2.08 (-0.01%)
     

  • Bitcoin USD

    69,041.64
    +1,343.73 (+1.98%)
     

  • CMC Crypto 200

    1,491.22
    +23.29 (+1.59%)
     

  • FTSE 100

    8,304.69
    +29.31 (+0.35%)
     

  • Gold

    2,346.60
    +0.80 (+0.03%)
     

  • Crude Oil

    77.18
    +0.19 (+0.25%)
     

  • 10-Yr Bond

    4.5140
    -0.0400 (-0.88%)
     

  • Nikkei

    38,923.03
    +435.13 (+1.13%)
     

  • Hang Seng

    18,403.04
    +323.43 (+1.79%)
     

  • FTSE Bursa Malaysia

    1,596.68
    -7.58 (-0.47%)
     

  • Jakarta Composite Index

    7,036.19
    +65.46 (+0.94%)
     

  • PSE Index

    6,470.74
    +37.64 (+0.59%)
     

Halozyme Therapeutics Inc (HALO) (Q1 2024) Earnings Call Transcript Highlights: Robust Growth ...

GuruFocus Research
·4-min read

  • Total Revenue: $195.9 million, up 21% year-over-year.

  • Royalty Revenue: $120.6 million, increased by 21% from the previous year.

  • EBITDA: $115.7 million, representing a 56% increase from the prior year.

  • Net Income: GAAP diluted earnings per share at $0.60; non-GAAP diluted earnings per share at $0.79.

  • 2024 Revenue Guidance: Projected to be between $915 million to $985 million, indicating a 10% to 19% growth.

  • 2024 Adjusted EBITDA Guidance: Expected to range from $535 million to $585 million, growth of 26% to 37%.

  • 2024 Non-GAAP EPS Guidance: Anticipated to be between $3.55 to $3.90, reflecting a 28% to 41% increase.

Release Date: May 07, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Halozyme Therapeutics Inc (NASDAQ:HALO) reported a 15th consecutive quarter of over 15% year-over-year royalty growth, driven by products like Darzalex and Phesgo.

  • The company recognized $14 million in milestone payments in Q1 2024, with strong visibility on future milestones from various product waves.

  • Halozyme Therapeutics Inc (NASDAQ:HALO) reiterated its 2024 financial guidance, projecting total revenue to increase by 10% to 19% year-over-year, with significant contributions from royalty revenue.

  • Operational highlights include multiple partner product approvals and advancements in regulatory progress, enhancing confidence in future revenue streams.

  • The company maintains a strong balance sheet with substantial cash reserves and a low net leverage ratio, supporting ongoing investments and shareholder returns through repurchases.

Negative Points

  • Despite strong financial performance, Halozyme Therapeutics Inc (NASDAQ:HALO) faces the challenge of a royalty rate step-down for Darzalex SC outside the US, which could impact future royalty income.

  • The company anticipates an increase in R&D expenses as it invests in product development, including the high-volume auto-injector, which could pressure short-term earnings.

  • There is a potential risk in the pace of converting discussions into finalized agreements for the Enhanze technology and high-volume auto-injectors, which could delay expected revenue streams from new partnerships.

  • The upcoming patent expiration in 2027 for Enhanze poses a long-term risk, although the company has strategies to manage the impact.

  • Halozyme Therapeutics Inc (NASDAQ:HALO) faces intense competition in the biopharmaceuticals market, which could affect its market share and pricing power.

Q & A Highlights

Q: Can you provide more details on the ongoing discussions with potential new partners for Enhanze? A: Helen Torley, President and CEO of Halozyme, explained that the company is in advanced discussions with several pharma and biotech companies, having moved from technical to terms discussions, which is the final stage before negotiating collaboration and licensing agreements. She highlighted the strong interest in subcutaneous delivery and the recognition of Enhanze as a gold standard due to its safety profile and regulatory success.

ADVERTISEMENT

Q: Are the potential new deals for Enhanze expected to have similar economic terms to existing deals? A: Helen Torley noted that while most discussions involve exclusive rights with mid-single digit royalties, there are also talks about non-exclusive rights, which would potentially lower the economic terms. However, non-exclusive deals could lead to multiple agreements, strengthening Halozyme's position.

Q: How might the introduction of biosimilars impact the uptake of Phesgo? A: Helen Torley discussed the strong growth and market conversion of Phesgo, suggesting that its convenience over IV formulations could maintain its market share despite potential competition from biosimilars, similar to what was observed with Herceptin.

Q: What are the expectations for the subcutaneous versions of Tecentriq and Opdivo in terms of covering IV indications? A: Helen Torley clarified that while Tecentriq subcutaneous is expected to cover all approved IV indications in the U.S., U.K., and Europe, Opdivo subcutaneous might cover up to 75% of IV indications due to its combination with other treatments not being studied in subcutaneous form.

Q: Can you discuss the financial guidance and expectations for royalty revenue growth in 2024? A: Nicole Labrosse, CFO, reiterated the full-year 2024 guidance, expecting robust growth driven by the expansion of Wave two products and the launch of Wave three products. She confirmed that the royalty rate step down for Darzalex SC outside the U.S. was anticipated and factored into their projections.

Q: What updates can you provide on the high-volume auto-injector developments? A: Helen Torley shared that Halozyme is in discussions with current and potential new partners about the high-volume auto-injector, which has seen strong interest due to its groundbreaking nature. She mentioned ongoing evaluations and potential development agreements expected to advance.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

This article first appeared on GuruFocus.