Group 1 - Halozyme Therapeutics, Inc. (HALO) has reached a key level of support, indicating a potential bullish breakout from a technical perspective [1] - A "golden cross" has occurred, where HALO's 50-day simple moving average crossed above its 200-day simple moving average, signaling a strong bullish indicator [1] - The stock has moved 7.8% higher over the last four weeks, suggesting positive momentum [3] Group 2 - The current earnings outlook for HALO is positive, with no earnings estimates cut and one revision higher in the past 60 days [3] - The Zacks Consensus Estimate for HALO has increased, further supporting the bullish case for the stock [3] - Investors are encouraged to monitor HALO for potential gains due to the combination of earnings estimate revisions and technical indicators [5]

Core Insights - Halozyme Therapeutics (HALO) reported strong second-quarter 2025 adjusted earnings of $1.54 per share, exceeding the Zacks Consensus Estimate of $1.23, with a year-over-year increase of 69.2% [1][7] - Total revenues for the second quarter reached $325.7 million, a 41% increase year over year, surpassing the Zacks Consensus Estimate of $286 million [1][7] Revenue Drivers - The significant revenue growth was primarily attributed to increased royalty payments from Roche for Phesgo and Johnson & Johnson for subcutaneous Darzalex, as well as argenx's Vyvgart Hytrulo [2] - Royalty revenues amounted to $205.6 million, reflecting a 65% increase from the previous year, driven by strong demand for Phesgo, subcutaneous Darzalex, and Vyvgart Hytrulo [6][8] Financial Performance - Adjusted EBITDA for the second quarter was $225.5 million, marking a 64.6% increase from the prior year [9] - Product sales were reported at $81.5 million, a 3.3% increase year over year, although this fell short of the model estimate of $87.7 million [8] Guidance Update - The company raised its 2025 revenue guidance to a range of $1.28 billion to $1.36 billion, up from the previous estimate of $1.20 billion to $1.28 billion [10] - Royalty revenues are now expected to be between $825 million and $860 million, compared to the earlier forecast of $750 million to $785 million [11] - Adjusted earnings per share guidance for 2025 has been increased to a range of $6.00 to $6.40, up from $5.30 to $5.70 [11] Stock Performance - Following the positive results, shares of Halozyme rose by 5.3% in after-hours trading on August 5 [3] - Year-to-date, Halozyme's shares have increased by 27.2%, significantly outperforming the industry average rise of 1.9% [5]

Core Insights - Halozyme Therapeutics reported strong Q2 2025 results, with non-GAAP EPS of $1.54, exceeding the consensus of $1.24, and a year-over-year growth of 69.2% from $0.91 in Q2 2024 [1][2] - Revenue reached $325.7 million, surpassing analyst expectations by 13.9% and reflecting a 41% increase year-over-year [1][2] - The company raised its FY2025 financial guidance, indicating continued momentum in its royalty-driven business model [1] Financial Performance - Non-GAAP EPS for Q2 2025 was $1.54, compared to an estimate of $1.24 and $0.91 in Q2 2024, marking a 69% increase [2] - Total revenue was $325.7 million, exceeding the estimate of $285.91 million and up 41% from $231.4 million in Q2 2024 [2] - Royalty revenue grew 65% to $205.6 million, driven by ENHANZE-enabled therapies [2][5] - Adjusted EBITDA increased by 64.6% to $225.5 million, while net income rose 77.3% to $165.2 million [2][7] Business Model and Strategy - Halozyme focuses on drug delivery solutions, particularly its ENHANZE technology, which allows for subcutaneous drug administration [3] - The company licenses its technology to large pharmaceutical firms, earning royalties and milestone payments [3] - Key success factors include expanding partner adoption of ENHANZE, protecting intellectual property, and scaling manufacturing [4] Product and Market Developments - Royalty revenue was primarily driven by three ENHANZE-enabled therapies: DARZALEX SC, VYVGART Hytrulo, and Phesgo, which received additional approvals [5] - Product sales from manufacturing the proprietary enzyme grew 3.3% year-over-year to $81.5 million [6] - Collaborative agreements contributed $38.6 million, reflecting a 40% year-over-year increase [6] Future Outlook - Management raised FY2025 guidance for total revenue to between $1,275 million and $1,355 million, with royalty revenue expected between $825 million and $860 million [10] - Adjusted EBITDA guidance is now projected in the range of $865 million to $915 million, with non-GAAP diluted EPS expected at $6.00 to $6.40 [10] - The company executed $303 million in share repurchases, potentially increasing future earnings per share [11]

Company Performance - Halozyme Therapeutics reported quarterly earnings of $1.54 per share, exceeding the Zacks Consensus Estimate of $1.23 per share, and up from $0.91 per share a year ago, representing an earnings surprise of +25.20% [1] - The company achieved revenues of $325.72 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 13.84%, compared to $231.35 million in the same quarter last year [2] - Over the last four quarters, Halozyme has consistently surpassed consensus EPS and revenue estimates [2] Stock Performance - Halozyme shares have increased approximately 25.5% since the beginning of the year, significantly outperforming the S&P 500's gain of 7.6% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating it is expected to perform in line with the market in the near future [6] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $1.45 on revenues of $327.83 million, and for the current fiscal year, it is $5.50 on revenues of $1.25 billion [7] - The outlook for the industry, specifically the Medical - Biomedical and Genetics sector, is currently in the bottom 43% of Zacks industries, which may impact stock performance [8]

Financial Data and Key Metrics Changes - Total revenue for the quarter was $326 million, representing a 41% increase year-over-year [6][39] - Royalty revenue grew 65% year-over-year to $206 million, driven by strong performance from established therapies [7][39] - Adjusted EBITDA increased 65% to $226 million compared to the prior year [7][39] - Full-year revenue guidance for 2025 was raised to $1.275 billion to $1.355 billion, reflecting 26% to 33% growth over 2024 [7][42] - Full-year royalty revenue guidance was increased to $825 million to $860 million, representing growth of 44% to 51% year-over-year [8][42] Business Line Data and Key Metrics Changes - The three established blockbuster therapies driving growth are Darzalex subcutaneous, FSGO, and Vyvgart Hytrulo [6][11] - Darzalex reported a revenue increase of almost 22% to $3.5 billion in the quarter, with a 96% conversion rate to subcutaneous delivery in the U.S. [13][16] - FSGO revenue for the first half of 2025 was approximately $1.5 billion, reflecting a 55% year-over-year growth [16][17] - Vyvgart Hytrulo sales increased 97% year-over-year to $949 million in the second quarter [18][39] Market Data and Key Metrics Changes - The global conversion rate for FSGO from Perjeta to FSGO was 46% across 78 launch countries [16][17] - Ocrevus revenue increased 8% to approximately $4.4 billion in 2025, with expectations for high single-digit growth [24][25] - Ribrovant subcutaneous revenue was $179 million, representing over 100% year-over-year growth [31][39] Company Strategy and Development Direction - The company is focusing on identifying new drug delivery platforms that can generate long-lasting revenue streams through royalties [9] - There is an emphasis on expanding the use of ENHANZE technology to enhance patient access and convenience [11][12] - The company is pursuing M&A opportunities while maintaining a disciplined approach to leverage [9][37] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the durability of revenue streams and the potential for continued growth driven by multiple catalysts [44] - The company is actively engaging with regulatory bodies to ensure favorable outcomes regarding the IRA and CMS guidance [55][56] - Management remains optimistic about the ongoing performance of their blockbuster products and the potential for new product launches [44][66] Other Important Information - The company completed a $250 million share repurchase in the quarter and initiated a third tranche under a $750 million plan [9][37] - The company maintains a strong balance sheet with cash and marketable securities of $548 million as of June 30, 2025 [41] Q&A Session Summary Question: Status of IP litigation with Merck - The company is suing Merck for infringing 15 of its patents, with a scheduling order expected in the coming months [47][48] - Four PGRs filed by Merck have been scheduled for a hearing in March 2026, with decisions anticipated by June 2026 [49][50] Question: Confidence in regulatory front - Management is confident that there will be no impactful changes regarding the IRA and has submitted feedback to CMS [55][56] Question: Guidance setting process - The company uses trends and inputs from partners to set guidance, with updates occurring based on new data points [57][58] Question: Interest in high-volume auto injectors - There is strong interest from multiple companies in the high-volume auto injectors, with ongoing discussions at various stages [69][70] Question: Long-term guidance updates - The company updates long-term guidance annually, with more information expected at the start of the next year [66] Question: Impact of CMS guidance on deal conversations - The pending CMS guidance has not impacted deal conversations, as many companies are still interested in subcutaneous delivery options [88][89]

Financial Data and Key Metrics Changes - Total revenue for Q2 2025 was $326 million, representing a 41% increase year-over-year [5][35] - Royalty revenue grew 65% year-over-year to $206 million, driven by strong performance from established therapies [6][37] - Adjusted EBITDA increased 65% to $226 million compared to $137 million in the prior year [6][39] - Full-year revenue guidance for 2025 was raised to $1.275 billion to $1.355 billion, reflecting 26% to 33% growth over 2024 [6][41] Business Line Data and Key Metrics Changes - The three established blockbuster therapies driving growth are Darzalex subcutaneous, FSGO, and Vyvgart Hytrulo [5][10] - Darzalex revenue increased almost 22% to $3.5 billion in Q2 2025, with a 96% conversion rate to subcutaneous delivery in the U.S. [12][13] - FSGO revenue for the first half of 2025 was approximately $1.5 billion, reflecting a 55% year-over-year growth [16] - Vyvgart Hytrulo sales increased 97% year-over-year to $949 million in Q2 2025 [18] Market Data and Key Metrics Changes - The U.S. market for Darzalex subcutaneous is projected to continue strong growth due to increased penetration in frontline settings [12][13] - The total addressable market for generalized myasthenia gravis in the U.S. is now estimated at 60,000 patients, significantly higher than initial estimates [19] - Analysts project total brand sales for Ocrevus to reach $10 billion by 2028, with Halozyme earning royalties on the subcutaneous formulation [24] Company Strategy and Development Direction - The company is focusing on identifying new drug delivery platforms that can generate long-term revenue streams through royalties [7] - There is an emphasis on expanding the use of subcutaneous delivery systems to improve patient access and convenience [10][19] - The company is actively pursuing M&A opportunities while maintaining a disciplined approach to leverage [7][36] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the durability of revenue streams and the potential for continued growth driven by multiple catalysts [43] - The company is optimistic about the regulatory environment and believes it will prevail in ongoing litigation with Merck [52] - Management highlighted the importance of the IRA and ongoing discussions with CMS regarding the impact on their products [55] Other Important Information - The company completed a $250 million share repurchase in Q2 2025 and initiated a third tranche under a $750 million plan [7][36] - The company maintains a strong balance sheet with cash and marketable securities of $548.2 million as of June 30, 2025 [40] Q&A Session Summary Question: Status of IP litigation with Merck - The company is suing Merck for infringing 15 of its patents and expects to receive a scheduling order from the court in the coming months [46][48] Question: Confidence in regulatory front - Management is confident that there will be no impactful changes from CMS regarding the IRA and has submitted arguments to support this [55][56] Question: Guidance setting process - The company uses trends and inputs from partners to set guidance, with a focus on the latest data points [58][59] Question: Interest in high-volume auto injectors - There is strong interest from multiple companies in the high-volume auto injectors, with ongoing discussions at various stages [69][70] Question: Long-term guidance updates - The company updates long-term guidance annually, with more information expected at the start of the next year [66]

Second Quarter 2025 Financial Results - Total revenue reached $325.7 million, a 41% increase compared to the second quarter of 2024[32] - Royalty revenue increased by 65% to $205.6 million[32] - Net income was $165.2 million, a 77% increase year-over-year[32] - Adjusted EBITDA was $225.5 million, a 65% increase compared to the same period last year[32] - GAAP diluted EPS increased by 85% to $1.33, while Non-GAAP diluted EPS increased by 69% to $1.54[32] Full Year 2025 Guidance - Total revenue is projected to be between $1.275 billion and $1.355 billion, representing a 26-33% increase[6] - Royalty revenue is expected to be between $825 million and $860 million, a 44-51% increase[6] - Adjusted EBITDA is guided to be between $865 million and $915 million, a 37-45% increase[6] - Non-GAAP diluted EPS is projected to be between $6.00 and $6.40, a 42-51% increase[6] Share Repurchase Program - The company completed a $250 million accelerated share repurchase program[6] - A new $250 million share repurchase program was announced[6]

PART I — FINANCIAL INFORMATION [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents Halozyme Therapeutics, Inc.'s unaudited condensed consolidated financial statements for the periods ended June 30, 2025, and December 31, 2024, including balance sheets, statements of income, comprehensive income, cash flows, and stockholders' equity, along with detailed notes explaining accounting policies, fair value measurements, revenue recognition, balance sheet items, goodwill, intangible assets, long-term debt, share-based compensation, earnings per share, and commitments [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The Condensed Consolidated Balance Sheets show a slight decrease in total assets and stockholders' equity from December 31, 2024, to June 30, 2025, primarily due to a reduction in cash and cash equivalents and accumulated other comprehensive income (loss), while liabilities saw a modest increase **Condensed Consolidated Balance Sheets (In thousands):** | Item | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :---------------- | | Total assets | $2,053,899 | $2,063,477 | | Total liabilities | $1,721,151 | $1,699,656 | | Total stockholders' equity | $332,748 | $363,821 | | Cash and cash equivalents | $61,861 | $115,850 | | Marketable securities, available-for-sale | $486,316 | $480,224 | | Accounts receivable, net and contract assets | $316,339 | $308,455 | | Inventories | $181,505 | $141,860 | | Long-term debt, net | $1,509,100 | $1,505,798 | - Cash and cash equivalents decreased by **$53,989 thousand** from December 31, 2024, to June 30, 2025[9](index=9&type=chunk) - Total stockholders' equity decreased by **$31,073 thousand**, primarily due to accumulated other comprehensive loss[9](index=9&type=chunk) [Condensed Consolidated Statements of Income](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) The Condensed Consolidated Statements of Income show significant revenue and net income growth for both the three and six months ended June 30, 2025, compared to the same periods in 2024, driven primarily by increased royalties and product sales **Condensed Consolidated Statements of Income (In thousands, except per share amounts):** | Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total revenues | $325,719 | $231,353 | $590,580 | $427,232 | | Operating income | $202,441 | $117,235 | $343,976 | $212,777 | | Net income | $165,160 | $93,245 | $283,255 | $170,068 | | Basic EPS | $1.36 | $0.73 | $2.32 | $1.34 | | Diluted EPS | $1.33 | $0.72 | $2.26 | $1.32 | - Total revenues increased by **40.8%** for the three months ended June 30, 2025, and by **38.2%** for the six months ended June 30, 2025, compared to the respective prior year periods[11](index=11&type=chunk) - Net income increased by **77.1%** for the three months ended June 30, 2025, and by **66.5%** for the six months ended June 30, 2025, year-over-year[11](index=11&type=chunk) [Condensed Consolidated Statements of Comprehensive Income](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) The Condensed Consolidated Statements of Comprehensive Income show a significant increase in comprehensive income for both the three and six months ended June 30, 2025, compared to 2024, despite unrealized losses on derivative instruments in 2025 **Condensed Consolidated Statements of Comprehensive Income (In thousands):** | Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income | $165,160 | $93,245 | $283,255 | $170,068 | | Unrealized (loss) gain on derivative instruments, net | $(27,047) | $76 | $(34,270) | $8,691 | | Comprehensive income | $140,170 | $92,663 | $251,023 | $177,278 | - Comprehensive income increased by **51.3%** for the three months ended June 30, 2025, and by **41.6%** for the six months ended June 30, 2025, year-over-year[14](index=14&type=chunk) - Unrealized loss on derivative instruments significantly impacted comprehensive income in 2025, contrasting with a gain in 2024[14](index=14&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) The Condensed Consolidated Statements of Cash Flows show a net decrease in cash and cash equivalents for the six months ended June 30, 2025, primarily due to significant share repurchases in financing activities, despite strong cash generation from operating activities **Condensed Consolidated Statements of Cash Flows (In thousands):** | Item | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $253,932 | $185,221 | | Net cash used in investing activities | $(5,634) | $(124,720) | | Net cash (used in) provided by financing activities | $(302,287) | $8,993 | | Net (decrease) increase in cash and cash equivalents | $(53,989) | $69,494 | | Cash and cash equivalents at end of period | $61,861 | $187,864 | - Net cash provided by operating activities increased by **$68,711 thousand (37.1%)** for the six months ended June 30, 2025, compared to the same period in 2024[17](index=17&type=chunk)[220](index=220&type=chunk) - Net cash used in financing activities significantly increased to **$(302,287) thousand** in 2025, primarily due to **$303.5 million** in common stock repurchases[17](index=17&type=chunk)[222](index=222&type=chunk) [Condensed Consolidated Statements of Stockholders' Equity](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders%27%20Equity) The Condensed Consolidated Statements of Stockholders' Equity show a decrease in total stockholders' equity from December 31, 2024, to June 30, 2025, primarily driven by significant share repurchases and other comprehensive loss, partially offset by net income and share-based compensation **Condensed Consolidated Statements of Stockholders' Equity (In thousands):** | Item | Balance as of Dec 31, 2024 | Balance as of Jun 30, 2025 | | :-------------------------------- | :------------------------- | :------------------------- | | Total Stockholders' Equity | $363,821 | $332,748 | | Net income | $283,255 | $283,255 | | Repurchase of common stock | $(306,132) | $(306,132) | | Other comprehensive income (loss) | $(32,232) | $(32,232) | | Share-based compensation expense | $22,834 | $22,834 | - Total stockholders' equity decreased by **$31,073 thousand** from December 31, 2024, to June 30, 2025[20](index=20&type=chunk) - Repurchase of common stock amounted to **$306,132 thousand** for the six months ended June 30, 2025, significantly impacting equity[20](index=20&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes provide detailed explanations of the company's accounting policies, financial instrument fair value measurements, revenue recognition methods, and specific balance sheet items, also covering goodwill and intangible assets, long-term debt, stockholders' equity activities including share-based compensation and repurchases, earnings per share calculations, and commitments and contingencies [1. Organization and Business](index=8&type=section&id=1.%20Organization%20and%20Business) Halozyme Therapeutics, Inc. is a biopharmaceutical company focused on improving patient experiences and outcomes through its ENHANZE drug delivery technology (rHuPH20) for subcutaneous drug delivery and advanced auto-injector technologies - Halozyme's core business involves the ENHANZE drug delivery technology (rHuPH20) for subcutaneous drug delivery, licensed to biopharmaceutical companies[23](index=23&type=chunk) - The company earns royalties, event and sales-based milestone payments, and revenues from bulk rHuPH20 sales from its ENHANZE collaborations[24](index=24&type=chunk) - Halozyme currently earns royalties from **10 commercial products**, including five from Roche, two from Janssen, and one each from Takeda, argenx, and BMS collaborations[24](index=24&type=chunk) - Proprietary commercial products include Hylenex (rHuPH20) and XYOSTED (auto-injector technology)[25](index=25&type=chunk) [2. Summary of Significant Accounting Policies](index=9&type=section&id=2.%20Summary%20of%20Significant%20Accounting%20Policies) This section outlines Halozyme's key accounting policies, including the basis of presentation for interim unaudited condensed consolidated financial statements, use of estimates, classification and valuation of cash equivalents and marketable securities, fair value measurements, accounting for accounts receivable and contract assets, inventories, leases, property and equipment, comprehensive income, convertible notes, cash flow hedges for currency risks, business combinations, goodwill, intangible assets, and revenue recognition, detailing the company's single operating segment and recent accounting pronouncements - The company operates as a single operating segment, with the CEO reviewing results on an aggregate basis[94](index=94&type=chunk)[95](index=95&type=chunk) - Halozyme uses cash flow hedging to mitigate foreign currency exchange risk for forecasted Swiss franc-denominated royalty revenue, with all hedges determined to be highly effective as of June 30, 2025[42](index=42&type=chunk)[43](index=43&type=chunk) - Revenue is recognized when promised goods or services are transferred to customers, with specific five-step guidance applied to collaborative agreements and product sales[53](index=53&type=chunk) - New accounting standards, ASU 2023-09 (Income Taxes) and ASU 2024-03 (Expense Disaggregation), are being evaluated for their impact on financial statements, with effective dates in 2025 and 2026/2027 respectively[96](index=96&type=chunk)[98](index=98&type=chunk) [3. Fair Value Measurement](index=19&type=section&id=3.%20Fair%20Value%20Measurement) This section details the fair value measurement of Halozyme's financial instruments, primarily available-for-sale marketable securities and cash equivalents, categorized using the three-tier fair value hierarchy, with **$486.3 million** in marketable securities as of June 30, 2025, and derivative liabilities for currency hedging contracts **Available-for-sale marketable securities (In thousands):** | Security Type | June 30, 2025 Estimated Fair Value | December 31, 2024 Estimated Fair Value | | :-------------------------------- | :--------------------------------- | :--------------------------------- | | Corporate debt securities | $130,893 | $102,575 | | U.S. treasury securities | $337,705 | $367,570 | | Agency bonds | $9,824 | $9,828 | | Commercial paper | $7,894 | $0 | | Total marketable securities | $486,316 | $480,224 | - As of June 30, 2025, **27 available-for-sale marketable securities** with a fair market value of **$280.8 million** were in a gross unrealized loss position of **$0.3 million**, but no credit loss is expected[99](index=99&type=chunk) **Fair Value Hierarchy of Cash Equivalents and Marketable Securities (In thousands) as of June 30, 2025:** | Asset Type | Level 1 | Level 2 | Total Estimated Fair Value | | :-------------------------------- | :------ | :------ | :------------------------- | | Money market funds | $4,977 | $0 | $4,977 | | Corporate debt securities | $0 | $130,893 | $130,893 | | U.S. treasury securities | $337,705 | $0 | $337,705 | | Agency bonds | $9,824 | $0 | $9,824 | | Commercial paper | $0 | $7,894 | $7,894 | | Currency hedging contracts (Liabilities) | $0 | $34,795 | $34,795 | [4. Revenue](index=21&type=section&id=4.%20Revenue) Halozyme's revenue streams include royalties, product sales (proprietary, bulk rHuPH20, and device partnered), and revenues under collaborative agreements (upfront license fees, milestones, and device licensing/development), with significant revenue recognized from licenses granted in prior periods, and accounts receivable and contract assets reflecting amounts due from partners **Disaggregated Revenues (In thousands):** | Revenue Type | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Royalties | $205,639 | $124,918 | $373,831 | $245,511 | | Product sales, net | $81,510 | $78,886 | $159,551 | $137,469 | | Revenues under collaborative agreements | $38,570 | $27,549 | $57,198 | $44,252 | | Total revenues | $325,719 | $231,353 | $590,580 | $427,232 | - For the three months ended June 30, 2025, royalties increased by **64.6%** and revenues under collaborative agreements increased by **40.0%** year-over-year[103](index=103&type=chunk) - For the six months ended June 30, 2025, royalties increased by **52.3%** and product sales, net increased by **16.1%** year-over-year[103](index=103&type=chunk) **Accounts Receivable, Net, Other Contract Assets and Deferred Revenues (In thousands):** | Item | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :---------------- | | Accounts receivable, net | $315,073 | $288,204 | | Other contract assets | $1,266 | $20,251 | | Deferred revenues | $8,373 | $10,343 | [5. Certain Balance Sheet Items](index=22&type=section&id=5.%20Certain%20Balance%20Sheet%20Items) This section provides a detailed breakdown of specific balance sheet items, including accounts receivable, inventories, prepaid expenses and other assets, property and equipment, and accrued expenses, highlighting changes between June 30, 2025, and December 31, 2024 **Accounts Receivable, Net and Contract Assets (In thousands):** | Item | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :---------------- | | Royalty payments | $203,070 | $164,348 | | Other product sales | $61,132 | $65,542 | | Contract assets | $1,266 | $20,251 | | Total accounts receivable, net and contract assets | $316,339 | $308,455 | **Inventories (In thousands):** | Item | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :---------------- | | Raw materials | $17,785 | $24,015 | | Work-in-process | $30,932 | $30,169 | | Finished goods | $164,871 | $142,944 | | Total inventories, current | $181,505 | $141,860 | **Accrued Expenses (In thousands):** | Item | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :---------------- | | Accrued compensation and payroll taxes | $12,365 | $24,400 | | Taxes payable | $24,959 | $30,995 | | Product returns and sales allowance | $55,064 | $54,588 | | Other accrued expenses | $62,041 | $26,239 | | Lease liability | $28,970 | $30,705 | | Total accrued expenses, current | $115,591 | $128,851 | [6. Goodwill and Intangible Assets, net](index=24&type=section&id=6.%20Goodwill%20and%20Intangible%20Assets%2C%20net) This section details the company's goodwill and intangible assets, with goodwill remaining stable at **$416.8 million**, and finite-lived intangible assets, primarily auto-injector technology and XYOSTED product rights, having a net carrying value of **$317.6 million** as of June 30, 2025, with an estimated future annual amortization schedule provided **Goodwill and Intangible Assets, net (In thousands):** | Item | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :---------------- | | Goodwill | $416,821 | $416,821 | | Total finite-lived intangibles, net | $317,606 | $317,606 (implied from total intangibles) | | ATRS-1902 (IPR&D) | $48,700 | $48,700 (implied from total intangibles) | | Total intangibles, net | $366,306 | $401,830 | **Estimated Future Annual Amortization of Finite-Lived Intangible Assets (In thousands):** | Year | Amortization Expense | | :-------------------------------- | :------------------- | | Remainder of 2025 | $35,525 | | 2026 | $71,049 | | 2027 | $71,049 | | 2028 | $71,049 | | 2029 | $36,313 | | Thereafter | $32,621 | | Total | $317,606 | [7. Long-Term Debt, Net](index=25&type=section&id=7.%20Long-Term%20Debt%2C%20Net) This section details Halozyme's long-term debt, primarily consisting of **1.00% Convertible Senior Notes due 2028 ($720.0 million principal)** and **0.25% Convertible Senior Notes due 2027 ($805.0 million principal)**, outlining their terms, conversion features, and associated capped call transactions, along with the company's revolving credit and term loan facilities, noting that neither series of Convertible Notes was convertible and the Revolving Credit Facility was undrawn as of June 30, 2025 **Net Carrying Amounts and Fair Value of Convertible Notes (In thousands):** | Item | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :---------------- | | 2027 Convertible Notes (Principal) | $805,000 | $805,000 | | 2028 Convertible Notes (Principal) | $720,000 | $720,000 | | Total principal amount | $1,525,000 | $1,525,000 | | Total carrying amount | $1,509,100 | $1,505,798 | | Total fair value of outstanding notes | $1,627,750 | $1,549,100 | **Interest Expense and Effective Interest Rates (In thousands):** | Item | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | | :-------------------------------- | :------------------------------- | :----------------------------- | | Total coupon interest | $2,303 | $4,606 | | Total amortization of debt discount | $1,653 | $3,301 | | Total interest expense | $3,956 | $7,907 | | 2027 Convertible Notes Effective Rate | 0.7% | 0.7% | | 2028 Convertible Notes Effective Rate | 1.5% | 1.5% | - The 2028 Convertible Notes have an initial conversion price of approximately **$56.02 per share**, and the 2027 Convertible Notes have an initial conversion price of approximately **$77.17 per share**[120](index=120&type=chunk)[127](index=127&type=chunk) - The company has a **$575 million** revolving credit facility and a **$250 million** term loan facility, with the revolving credit facility undrawn as of June 30, 2025[134](index=134&type=chunk)[137](index=137&type=chunk) [8. Stockholders' Equity](index=29&type=section&id=8.%20Stockholders%27%20Equity) This section details changes in stockholders' equity, including share-based compensation expenses for stock options, RSUs, PSUs, and ESPP, and significant share repurchase activities, with the company completing a **$750.0 million** repurchase program in June 2024 and initiating a new **$750.0 million** program in February 2024, with substantial repurchases made in Q1 and Q2 2025 **Total Share-Based Compensation Expense (In thousands):** | Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Research and development | $3,545 | $2,568 | $6,774 | $5,913 | | Selling, general and administrative | $8,616 | $6,903 | $16,060 | $13,432 | | Total share-based compensation expense | $12,161 | $9,471 | $22,834 | $19,345 | - Total share-based compensation expense increased by **28.4%** for the three months ended June 30, 2025, and by **18.0%** for the six months ended June 30, 2025, year-over-year[138](index=138&type=chunk) **Share Repurchase Activity (In thousands, except share and per share amounts):** | Period | Total Number of Shares Purchased | Weighted-Average Price Paid Per Share | Total Cost | | :-------------------------------- | :------------------------------- | :------------------------------------ | :--------- | | First quarter 2025 | 452,453 | $53.95 | $24,410 | | Second quarter 2025 | 5,818,338 | $52.16 | $303,490 | | Total (Six Months Ended June 30, 2025) | 6,270,791 | $52.29 | $327,900 | - The company initiated a third **$250.0 million** share repurchase tranche in June 2025 under the **$750.0 million** program approved in February 2024[143](index=143&type=chunk) [9. Earnings per share](index=31&type=section&id=9.%20Earnings%20per%20share) This section details the calculation of basic and diluted earnings per share (EPS), showing a significant increase in both basic and diluted EPS for the three and six months ended June 30, 2025, compared to the prior year, with the reconciliation including the impact of dilutive potential common shares from stock options, RSUs, PSUs, ESPP, and Convertible Notes **Earnings Per Share (In thousands, except per share amounts):** | Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income | $165,160 | $93,245 | $283,255 | $170,068 | | Basic EPS | $1.36 | $0.73 | $2.32 | $1.34 | | Diluted EPS | $1.33 | $0.72 | $2.26 | $1.32 | | Weighted average common shares outstanding for basic EPS | 121,343 | 127,116 | 122,274 | 127,029 | | Weighted average common shares outstanding for diluted EPS | 124,158 | 129,222 | 125,452 | 129,097 | - Basic EPS increased by **86.3%** and diluted EPS increased by **84.7%** for the three months ended June 30, 2025, year-over-year[146](index=146&type=chunk) - Basic EPS increased by **73.1%** and diluted EPS increased by **71.2%** for the six months ended June 30, 2025, year-over-year[146](index=146&type=chunk) - Anti-dilutive securities, including stock options, RSUs, PSUs, ESPP, and Convertible Notes, totaled **24.4 million shares** for the three months ended June 30, 2025[146](index=146&type=chunk) [10. Commitments and Contingencies](index=32&type=section&id=10.%20Commitments%20and%20Contingencies) Halozyme may be involved in disputes and litigation in the normal course of business, and while the company believes it has adequate insurance, adverse outcomes could materially affect its financial statements and reputation, though currently no legal proceedings are expected to have a material adverse effect - The company is not currently a party to any legal proceedings that, in its opinion, would have a material adverse effect on its condensed consolidated statements of income or balance sheets[147](index=147&type=chunk) - Potential legal claims could lead to costly legal expenses, and insurance coverage may be inadequate, potentially damaging reputation and business[147](index=147&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=33&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on Halozyme's financial condition and results of operations, highlighting the company's business overview, recent key events, product pipeline, and a detailed comparison of financial performance for the three and six months ended June 30, 2025, versus 2024, also discussing liquidity, capital resources, and critical accounting policies [Overview](index=33&type=section&id=Overview) Halozyme Therapeutics, Inc. is a biopharmaceutical company focused on improving patient experiences through its ENHANZE drug delivery technology and auto-injector products, licensing ENHANZE to partners for royalties and milestone payments, and commercializing proprietary products, with recent key events including multiple regulatory approvals for partner products utilizing ENHANZE and new share repurchase tranches - Halozyme's ENHANZE technology facilitates subcutaneous delivery of injected drugs, aiming to reduce treatment burden and enable flexible administration options[153](index=153&type=chunk)[154](index=154&type=chunk) - Key recent partner approvals include Janssen's DARZALEX SC for smoldering multiple myeloma (EU), Takeda's HYQVIA SC for chronic inflammatory demyelinating polyneuropathy (Japan), argenx's VYVGART SC for chronic inflammatory demyelinating polyneuropathy (EU), and BMS's Opdivo SC for multiple adult solid tumors (EU)[157](index=157&type=chunk) - The company initiated the third **$250 million** share repurchase tranche in June 2025, part of a **$750 million** program approved in February 2024[159](index=159&type=chunk) - Halozyme filed a patent infringement lawsuit against Merck Sharp & Dohme Corp. in April 2025, alleging infringement of its MDASE™ SC delivery technology by Merck's SC Keytruda[159](index=159&type=chunk) [Product and Product Candidates](index=36&type=section&id=Product%20and%20Product%20Candidates) This section provides a comprehensive overview of Halozyme's proprietary and partnered product portfolio, including marketed products and candidates in various stages of development, highlighting the broad application of ENHANZE technology across multiple therapeutic areas and the company's device collaboration products [Proprietary Products and Product Candidates](index=39&type=section&id=Proprietary%20Products%20and%20Product%20Candidates) Halozyme's proprietary portfolio includes Hylenex recombinant, a hyaluronidase product for subcutaneous fluid delivery, and XYOSTED, an FDA-approved subcutaneous testosterone enanthate for testosterone replacement therapy, with the company also developing ATRS-1902, a proprietary drug-device combination for adrenal crisis rescue, which has shown positive Phase 1 results and received Fast Track designation from the FDA - Hylenex recombinant is the number one prescribed branded hyaluronidase, facilitating SC administration of fluids and other injected drugs[162](index=162&type=chunk) - XYOSTED is the only FDA-approved once-weekly, at-home self-administered SC testosterone enanthate product[163](index=163&type=chunk) - ATRS-1902, a proprietary hydrocortisone auto-injector for adrenal crisis rescue, received positive Phase 1 results and FDA Fast Track designation, advancing to a pivotal study[164](index=164&type=chunk)[166](index=166&type=chunk) [Partnered Products (ENHANZE Collaborations)](index=39&type=section&id=Partnered%20Products%20%28ENHANZE%20Collaborations%29) Halozyme has extensive ENHANZE collaborations with major biopharmaceutical companies like Roche, Takeda, Janssen, AbbVie, Lilly, BMS, argenx, ViiV Healthcare, Chugai, and Acumen, resulting in multiple approved products across various therapeutic areas, with ongoing development for new indications and product candidates, and recent approvals expanding market reach and patient convenience - Roche collaboration includes approved ENHANZE products like Herceptin SC, Phesgo, MabThera SC, TECENTRIQ SC, and OCREVUS SC, with recent EU label updates for Phesgo and OCREVUS SC[168](index=168&type=chunk)[170](index=170&type=chunk)[171](index=171&type=chunk) - Takeda's HYQVIA, an ENHANZE product, received FDA and European Commission approval for chronic inflammatory demyelinating polyneuropathy and Japan approval for multifocal motor neuropathy[177](index=177&type=chunk) - Janssen's DARZALEX FASPRO/SC (ENHANZE) received multiple approvals for various multiple myeloma indications, including a new EU approval for smoldering multiple myeloma, and RYBREVANT SC (ENHANZE) was approved in the EU for non-small cell lung cancer[179](index=179&type=chunk)[180](index=180&type=chunk) - argenx's VYVGART Hytrulo/SC (ENHANZE) received FDA approval for self-injection in generalized myasthenia gravis and EU approval for chronic inflammatory demyelinating polyneuropathy[185](index=185&type=chunk)[186](index=186&type=chunk) - BMS's Opdivo Qvantig/SC (ENHANZE) was approved by the FDA for SC use in most previously approved adult, solid IV Opdivo indications and received EU approval for multiple solid tumors[183](index=183&type=chunk) - ViiV Healthcare, Chugai, and Acumen collaborations are advancing new ENHANZE-enabled product candidates, including N6LS for HIV treatment and ACU193 for Alzheimer's disease, with positive Phase 1 results for sabirnetug (ACU193) SC administration[190](index=190&type=chunk)[191](index=191&type=chunk)[192](index=192&type=chunk)[193](index=193&type=chunk) [Device and Other Drug Product Collaborations](index=44&type=section&id=Device%20and%20Other%20Drug%20Product%20Collaborations) Halozyme collaborates with Teva, Pfizer, Viatris, and Otter on device and other drug product development, including supplying auto-injectors for Teva's generic epinephrine and teriparatide products, developing a rescue pen with Pfizer, and supplying the VIBEX auto-injection system for Otter's OTREXUP, with Viatris also developing selatogrel with Halozyme's QuickShot auto-injector for acute myocardial infarction, currently in Phase 3 - Halozyme is the exclusive supplier of auto-injector devices for Teva's generic Epinephrine Injection USP and Teriparatide Injection products[194](index=194&type=chunk) - The company supplies the VIBEX auto-injection system for Otter's OTREXUP (methotrexate) injection, used for rheumatoid arthritis, pJIA, and psoriasis[198](index=198&type=chunk) - A global development agreement with Viatris (formerly Idorsia) is progressing selatogrel, a novel drug-device product for acute myocardial infarction, which is currently in a Phase 3 study[196](index=196&type=chunk)[197](index=197&type=chunk) [Results of Operations](index=46&type=section&id=Results%20of%20Operations) This section analyzes Halozyme's financial performance for the three and six months ended June 30, 2025, compared to the same periods in 2024, detailing changes in revenues (royalties, product sales, collaborative agreements) and operating expenses (cost of sales, R&D, SG&A), as well as investment income and income tax expense [Three Months Ended June 30, 2025 Compared to Three Months Ended June 30, 2024](index=46&type=section&id=Three%20Months%20Ended%20June%2030%2C%202025%20Compared%20to%20Three%20Months%20Ended%20June%2030%2C%202024) For the three months ended June 30, 2025, total revenues increased by **40.8%** year-over-year, driven by a **65%** increase in royalties and a **40%** increase in revenues under collaborative agreements, while operating expenses increased by **8.0%**, primarily due to higher cost of sales and SG&A, with R&D decreasing, and net income seeing a substantial **77.1%** increase **Revenues (In thousands):** | Revenue Type | 2025 | 2024 | Change (Dollar) | Change (%) | | :-------------------------------- | :----- | :----- | :-------------- | :--------- | | Royalties | $205,639 | $124,918 | $80,721 | 65% | | Product sales, net | $81,510 | $78,886 | $2,624 | 3% | | Revenues under collaborative agreements | $38,570 | $27,549 | $11,021 | 40% | | Total revenues | $325,719 | $231,353 | $94,366 | 41% | - Royalty increase was primarily due to continued sales uptake of DARZALEX SC, VYVGART Hytrulo, and Phesgo[199](index=199&type=chunk) - Product sales, net increased due to XYOSTED market penetration and device partnered products, partially offset by bulk rHuPH20 timing[200](index=200&type=chunk) **Operating Expenses (In thousands):** | Expense Type | 2025 | 2024 | Change (Dollar) | Change (%) | | :-------------------------------- | :----- | :----- | :-------------- | :--------- | | Cost of sales | $46,359 | $39,607 | $6,752 | 17% | | Research and development | $17,543 | $21,038 | $(3,495) | (17)% | | Selling, general and administrative | $41,614 | $35,711 | $5,903 | 17% | - R&D expense decreased due to lower compensation and timing of ENHANZE manufacturing process investments[205](index=205&type=chunk) - SG&A expense increased due to higher consulting fees, including **$2.6 million** in patent infringement litigation costs, and increased compensation[206](index=206&type=chunk) - Income tax expense increased by **62%** due to higher income before tax, partially offset by tax benefits from share-based compensation and Foreign Derived Intangible Income deduction[209](index=209&type=chunk) [Six Months Ended June 30, 2025 Compared to Six Months Ended June 30, 2024](index=48&type=section&id=Six%20Months%20Ended%20June%2030%2C%202025%20Compared%20to%20Six%20Months%20Ended%20June%2030%2C%202024) For the six months ended June 30, 2025, total revenues increased by **38.2%** year-over-year, driven by a **52%** increase in royalties and a **16%** increase in product sales, while operating expenses increased by **15.0%**, with higher cost of sales and SG&A, R&D decreasing, and net income increasing by **66.5%** **Revenues (In thousands):** | Revenue Type | 2025 | 2024 | Change (Dollar) | Change (%) | | :-------------------------------- | :----- | :----- | :-------------- | :--------- | | Royalties | $373,831 | $245,511 | $128,320 | 52% | | Product sales, net | $159,551 | $137,469 | $22,082 | 16% | | Revenues under collaborative agreements | $57,198 | $44,252 | $12,946 | 29% | | Total revenues | $590,580 | $427,232 | $163,348 | 38% | - Royalty increase was primarily due to continued sales uptake of DARZALEX SC, VYVGART Hytrulo, and Phesgo[210](index=210&type=chunk) - Product sales, net increased due to higher bulk rHuPH20 and device partnered product sales, and XYOSTED market penetration[211](index=211&type=chunk) **Operating Expenses (In thousands):** | Expense Type | 2025 | 2024 | Change (Dollar) | Change (%) | | :-------------------------------- | :----- | :----- | :-------------- | :--------- | | Cost of sales | $94,762 | $67,936 | $26,826 | 39% | | Research and development | $32,342 | $40,149 | $(7,807) | (19)% | | Selling, general and administrative | $83,976 | $70,845 | $13,131 | 19% | - R&D expense decreased due to lower compensation, resource optimization, and timing of ENHANZE manufacturing process investments[214](index=214&type=chunk) - SG&A expense increased due to higher consulting and professional service fees, including litigation costs, and increased compensation[215](index=215&type=chunk) - Income tax expense increased by **50%** due to higher income before tax, partially offset by tax benefits from share-based compensation, Foreign Derived Intangible Income deduction, and uncertain tax benefit adjustments[216](index=216&type=chunk) [Liquidity and Capital Resources](index=50&type=section&id=Liquidity%20and%20Capital%20Resources) Halozyme's primary liquidity sources are cash, cash equivalents, and marketable securities, totaling **$548.2 million** as of June 30, 2025, with the company expecting these resources, along with anticipated revenues, to fund operations for at least the next 12 months, and cash flows for the six months ended June 30, 2025, showing increased cash from operations, decreased cash used in investing, and a significant increase in cash used in financing due to share repurchases, also detailing its convertible notes and undrawn revolving credit facility - As of June 30, 2025, Halozyme had **$548.2 million** in cash, cash equivalents, and marketable securities[217](index=217&type=chunk) - The company expects existing cash resources and anticipated revenues to fund operations for at least the next 12 months[217](index=217&type=chunk) **Cash Flows (Six Months Ended June 30, In thousands):** | Activity | 2025 | 2024 | Change | | :-------------------------------- | :----- | :----- | :----- | | Net cash provided by operating activities | $253,932 | $185,221 | $68,711 | | Net cash used in investing activities | $(5,634) | $(124,720) | $119,086 | | Net cash (used in) provided by financing activities | $(302,287) | $8,993 | $(311,280) | | Net (decrease) increase in cash and cash equivalents | $(53,989) | $69,494 | $(123,483) | - The increase in net cash used in financing activities was primarily due to a **$303.5 million** increase in common stock repurchases[222](index=222&type=chunk) - The Revolving Credit Facility of **$575 million** was undrawn as of June 30, 2025[237](index=237&type=chunk) [Critical Accounting Policies and Estimates](index=52&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This section states that there were no material changes to Halozyme's critical accounting policies or estimates during the six months ended June 30, 2025, as compared to those described in the Annual Report on Form 10-K for the year ended December 31, 2024 - No material changes occurred in critical accounting policies or estimates during the six months ended June 30, 2025[240](index=240&type=chunk) [Recent Accounting Pronouncements](index=52&type=section&id=Recent%20Accounting%20Pronouncements) This section refers to Note 2, Summary of Significant Accounting Policies, for a discussion of recently issued accounting standards and their potential effects on the financial statements - Refer to Note 2 for details on recent accounting pronouncements and their potential impact[241](index=241&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=53&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Halozyme's market risks, primarily related to interest rate fluctuations on investments and foreign currency exchange risk on royalty revenue, remained unchanged during the quarter ended June 30, 2025, with the company using cash flow hedges to mitigate foreign currency risk and believing its investment portfolio does not have significant default or illiquidity risk - No material changes in market risks occurred during the quarter ended June 30, 2025[242](index=242&type=chunk) - The company hedges foreign currency exchange risk associated with forecasted Swiss franc-denominated royalty revenue using cash flow hedges[244](index=244&type=chunk) - The investment portfolio, consisting of money market funds, U.S. Treasury securities, corporate debt, commercial paper, and agency bonds, is managed to preserve principal and maximize income without significantly increasing risk[243](index=243&type=chunk) [Item 4. Controls and Procedures](index=53&type=section&id=Item%204.%20Controls%20and%20Procedures) Halozyme's management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective as of June 30, 2025, with no significant changes in internal control over financial reporting during the quarter that materially affected or are reasonably likely to materially affect these controls - Disclosure controls and procedures were effective as of June 30, 2025[247](index=247&type=chunk) - No significant changes in internal control over financial reporting occurred during the quarter ended June 30, 2025[248](index=248&type=chunk) PART II — OTHER INFORMATION [Item 1. Legal Proceedings](index=54&type=section&id=Item%201.%20Legal%20Proceedings) Halozyme may face disputes and litigation in the normal course of business, which could lead to substantial expenses and reputational damage, and while the company believes it has adequate insurance, there is no assurance that coverage will be sufficient, though currently no legal proceedings are expected to have a material adverse effect on the company's financial condition - The company is not currently a party to any legal proceedings that, in its opinion, would have a material adverse effect on its condensed consolidated statements of income or balance sheets[250](index=250&type=chunk) - Potential legal claims could lead to costly legal expenses, and insurance coverage may be inadequate, potentially damaging reputation and business[250](index=250&type=chunk) [Item 1A. Risk Factors](index=54&type=section&id=Item%201A.%20Risk%20Factors) This section updates the risk factors, noting no material changes other than those discussed, with key risks including potential legal proceedings related to intellectual property rights, such as the patent infringement lawsuit against Merck, and the impact of rising healthcare costs, government policies (like the IRA and MFN pricing proposals), and workforce reductions at federal agencies on product pricing, reimbursement, and regulatory approvals - No material changes to risk factors were identified, other than those specifically discussed in this section[251](index=251&type=chunk) - The company filed a patent infringement lawsuit against Merck Sharp & Dohme Corp. in April 2025, alleging infringement of its MDASE™ SC delivery technology[253](index=253&type=chunk) - Challenges to intellectual property, including patent validity (e.g., European Patent Office revoking Janssen's DARZALEX co-formulation patents), could materially adversely affect the business[254](index=254&type=chunk) - The Inflation Reduction Act of 2022 (IRA) and potential Most Favored Nations (MFN) pricing policies could negatively impact product pricing, reimbursement, and revenue[261](index=261&type=chunk)[262](index=262&type=chunk) - Workforce reductions at federal health agencies and changes in U.S. trade policy (e.g., tariffs) could delay regulatory approvals and increase costs[269](index=269&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=57&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details the company's share repurchase activities under the **$750.0 million** capital return program authorized in February 2024, with Halozyme repurchasing **5.8 million shares** at an average price of **$52.16 per share**, totaling **$303.5 million**, for the three months ended June 30, 2025 - A new capital return program to repurchase up to **$750.0 million** of outstanding common stock was authorized in February 2024[270](index=270&type=chunk) **Share Repurchase Activity (Three Months Ended June 30, 2025, in thousands, except share and per share amounts):** | Period | Total Number of Shares Purchased | Average Price Paid Per Share | Total Cost | | :-------------------------------- | :------------------------------- | :--------------------------- | :--------- | | April 1, 2025 through April 30, 2025 | — | $— | $0 | | May 1, 2025 through May 31, 2025 | 2,966,648 | $51.23 | $151,900 | | June 1, 2025 through June 30, 2025 | 2,851,690 | $53.13 | $151,590 | | Total | 5,818,338 | $52.16 | $303,490 | - As of June 30, 2025, approximately **$196.5 million** remained available for repurchase under the program[270](index=270&type=chunk) [Item 3. Defaults Upon Senior Securities](index=58&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This item is not applicable to Halozyme for the reporting period [Item 4. Mine Safety Disclosures](index=58&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to Halozyme for the reporting period [Item 5. Other Information](index=58&type=section&id=Item%205.%20Other%20Information) This section discloses Rule 10b5-1 trading arrangements adopted by two officers, Bernadette Connaughton (Director) and Nicole LaBrosse (SVP and CFO), during the three months ended June 30, 2025, for the sale of common stock **Rule 10b5-1 Trading Arrangements Adopted (Three Months Ended June 30, 2025):** | Name and Title | Action Date | Rule 10b5-1* | Total Shares To Be Sold | Expiration Date | | :-------------------------------- | :---------- | :----------- | :---------------------- | :-------------- | | Bernadette Connaughton, Director | 5/29/2025 | X | 17,330 | 8/31/2026 | | Nicole LaBrosse, SVP and CFO | 6/11/2025 | X | 39,337 | 4/22/2026 | - Nicole LaBrosse's plan includes **22,227 shares** plus an undetermined number from vesting restricted stock units, less shares withheld for tax obligations[275](index=275&type=chunk) [Item 6. Exhibits](index=59&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including organizational documents, indenture agreements for convertible notes, certifications from the CEO and CFO, and various Inline XBRL documents - Exhibits include Amended and Restated Certificate of Incorporation, Company Bylaws, Indentures for 2021 and 2022 Convertible Notes, CEO and CFO certifications (Rule 13a-14(a) and 18 U.S.C. 1350), and Inline XBRL documents[276](index=276&type=chunk)[278](index=278&type=chunk) SIGNATURES [SIGNATURES](index=60&type=section&id=SIGNATURES) This section contains the required signatures for the Form 10-Q, certifying its submission by Halozyme Therapeutics, Inc. on August 5, 2025, by the President and Chief Executive Officer, Helen I. Torley, and the Senior Vice President and Chief Financial Officer, Nicole LaBrosse - The report was signed by Helen I. Torley, President and Chief Executive Officer, and Nicole LaBrosse, Senior Vice President and Chief Financial Officer, on August 5, 2025[280](index=280&type=chunk)

[Executive Summary & Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Highlights) Halozyme achieved strong Q2 2025 growth, raising full-year guidance and announcing a new share repurchase program, alongside key partner milestones [Second Quarter 2025 Performance Overview](index=1&type=section&id=Second%20Quarter%202025%20Performance%20Overview) Halozyme delivered strong Q2 2025 financial results with significant year-over-year growth across key metrics, leading to an updated full-year guidance and a new share repurchase program Second Quarter 2025 Key Financial Data | Metric | Q2 2025 (Millions USD) | YoY Growth | | :--- | :--- | :--- | | Total Revenue | $326 | 41% | | Royalty Revenue | $206 | 65% | | Net Income | $165 | 77% | | Adjusted EBITDA | $226 | 65% | | GAAP Diluted EPS | $1.33 | 85% | | Non-GAAP Diluted EPS | $1.54 | 69% | - Upward revision of 2025 full-year financial guidance: - Total Revenue: **$1,275 - $1,355 million** (26% - 33% YoY growth) - Adjusted EBITDA: **$865 - $915 million** (37% - 45% YoY growth) - Non-GAAP Diluted EPS: **$6.00 - $6.40** (42% - 51% YoY growth)[1](index=1&type=chunk) - Announced the initiation of a **$250 million** third tranche of the stock repurchase program under the **$750 million** authorization[1](index=1&type=chunk) [Second Quarter and Recent Corporate Highlights](index=2&type=section&id=Second%20Quarter%20and%20Recent%20Corporate%20Highlights) Halozyme completed significant share repurchases, initiated patent litigation against Merck, and saw multiple regulatory approvals and milestones for ENHANZE®-enabled drugs by its partners - The company completed **$303 million** in share repurchases during Q2, including the **$250 million** second tranche announced in May, and initiated the **$250 million** third tranche in June, repurchasing approximately **1 million shares** for **$53.5 million**[3](index=3&type=chunk)[6](index=6&type=chunk) - Halozyme filed a patent infringement lawsuit against Merck in April 2025, alleging the use of Halozyme's MDASE™ subcutaneous drug delivery technology in the development of SC Keytruda[6](index=6&type=chunk) - Multiple regulatory approvals and milestones for ENHANZE®-enabled partner products: - In July 2025, Janssen's DARZALEX SC received European approval for monotherapy in high-risk smoldering multiple myeloma (SMM)[2](index=2&type=chunk) - In June 2025, Takeda's HYQVIA SC was approved in Japan for chronic inflammatory demyelinating polyneuropathy (CIDP) and multifocal motor neuropathy[6](index=6&type=chunk) - In June 2025, argenx's VYVGART SC received European approval for generalized myasthenia gravis (gMG) and CIDP in adults[6](index=6&type=chunk) - In May 2025, Bristol Myers Squibb's Opdivo SC received European approval for various adult solid tumors, triggering a **$12 million** milestone payment[6](index=6&type=chunk) - In April 2025, argenx's VYVGART Hytrulo pre-filled syringe received FDA approval for gMG and CIDP in adults[8](index=8&type=chunk) - In April 2025, Janssen's RYBREVANT SC received European approval for first-line treatment of advanced non-small cell lung cancer (NSCLC), triggering a **$10 million** milestone payment[6](index=6&type=chunk) [Financial Results](index=3&type=section&id=Financial%20Results) Halozyme's Q2 2025 financial performance is detailed, covering revenue, expenses, profitability, and the updated full-year financial outlook [Second Quarter 2025 Financial Highlights](index=3&type=section&id=Second%20Quarter%202025%20Financial%20Highlights) Halozyme's Q2 2025 total revenue grew 41% year-over-year, driven by royalty and milestone income, with increased operating expenses but decreased R&D, resulting in substantial net income and EPS growth Second Quarter 2025 Revenue Overview | Revenue Category | Q2 2025 (Millions USD) | Q2 2024 (Millions USD) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Royalties | 205.6 | 124.9 | 65% | | Product Sales, Net | 81.5 | 78.9 | 3% | | Collaboration Revenue | 38.6 | 27.5 | 40% | | **Total Revenue** | **325.7** | **231.4** | **41%** | Second Quarter 2025 Operating Expenses Overview | Expense Category | Q2 2025 (Millions USD) | Q2 2024 (Millions USD) | YoY Change (%) | Primary Drivers | | :--- | :--- | :--- | :--- | :--- | | Cost of Sales | 46.4 | 39.6 | 17% | Increased product sales and labor allocation | | Amortization of Intangible Assets | 17.8 | 17.8 | 0% | Remained consistent | | Research and Development | 17.5 | 21.0 | -17% | Lower compensation expenses, resource optimization, and ENHANZE® investment timing | | Selling, General and Administrative | 41.6 | 35.7 | 17% | Increased consulting and professional services (including **$2.6 million** in litigation fees) and higher compensation expenses | Second Quarter 2025 Profitability Metrics | Metric | Q2 2025 (Millions USD) | Q2 2024 (Millions USD) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Operating Income | 202.4 | 117.2 | 73% | | Net Income | 165.2 | 93.2 | 77% | | EBITDA | 222.9 | 137.0 | 63% | | Adjusted EBITDA | 225.5 | 137.0 | 65% | | GAAP Diluted EPS | $1.33 | $0.72 | 85% | | Non-GAAP Diluted EPS | $1.54 | $0.91 | 69% | - Cash, cash equivalents, and marketable securities totaled **$548.2 million** as of June 30, 2025, a decrease from **$596.1 million** as of December 31, 2024, primarily due to share repurchase activities partially offset by cash generated from operations[8](index=8&type=chunk) [Financial Outlook for 2025](index=4&type=section&id=Financial%20Outlook%20for%202025) Halozyme raised its 2025 full-year financial guidance for the second time, projecting significant growth in total revenue, royalty revenue, adjusted EBITDA, and non-GAAP diluted EPS 2025 Financial Guidance Update | Metric | Previous Guidance Range (Millions USD) | New Guidance Range (Millions USD) | YoY Growth (%) | | :--- | :--- | :--- | :--- | | Total Revenue | $1,200 - $1,280 | $1,275 - $1,355 | 26% - 33% | | Royalty Revenue | $750 - $785 | $825 - $860 | 44% - 51% | | Adjusted EBITDA | $790 - $840 | $865 - $915 | 37% - 45% | | Non-GAAP Diluted EPS | $5.30 - $5.70 | $6.00 - $6.40 | 42% - 51% | [Company Information](index=4&type=section&id=Company%20Information) This section outlines Halozyme's business, ENHANZE® technology, and clarifies the use of non-GAAP financial measures and forward-looking statements [About Halozyme](index=4&type=section&id=About%20Halozyme) Halozyme is a biopharmaceutical company focused on improving patient experience and treatment outcomes through its ENHANZE® drug delivery technology, which is licensed to leading pharmaceutical companies - Halozyme is a biopharmaceutical company focused on improving patient experience and treatment outcomes through its ENHANZE® drug delivery technology, which utilizes a proprietary enzyme rHuPH20 to facilitate subcutaneous drug administration and reduce treatment burden[11](index=11&type=chunk) - The ENHANZE® technology is licensed to leading pharmaceutical and biotechnology companies, including Roche, Takeda, Pfizer, and Janssen, and is incorporated into **ten commercialized products** benefiting **over one million patients** in **over 100 markets** globally[11](index=11&type=chunk) - The company also develops, manufactures, and commercializes its own products, Hylenex® and XYOSTED®, as well as commercial products and development programs in collaboration with Teva Pharmaceuticals and McDermott Laboratories Limited (an affiliate of Viatris Inc)[11](index=11&type=chunk)[13](index=13&type=chunk) [Note Regarding Use of Non-GAAP Financial Measures](index=5&type=section&id=Note%20Regarding%20Use%20of%20Non-GAAP%20Financial%20Measures) This section explains Halozyme's use of non-GAAP financial measures, such as EBITDA and non-GAAP diluted EPS, to provide a clearer view of core operational performance by excluding specific non-recurring or non-cash items - The company reports non-GAAP financial measures such as EBITDA, Adjusted EBITDA, and non-GAAP diluted EPS as supplemental information to, and not as a substitute for, GAAP financial measures[14](index=14&type=chunk) - Non-GAAP diluted EPS excludes stock-based compensation expense, debt discount amortization, amortization of intangible assets, one-time items (such as changes in contingent consideration, inventory adjustments, impairment charges, and intellectual property litigation expenses), and certain income tax adjustments[14](index=14&type=chunk) - Adjusted EBITDA excludes one-time items such as changes in contingent consideration, inventory adjustments, impairment charges, business combination transaction costs, and intellectual property litigation expenses[14](index=14&type=chunk) - The company believes these non-GAAP measures provide a useful method for evaluating its operating performance by excluding factors that do not directly impact core operations and unusual events, aiding investors and analysts in comparisons and trend assessment[16](index=16&type=chunk) [Safe Harbor Statement](index=6&type=section&id=Safe%20Harbor%20Statement) The Safe Harbor Statement clarifies that the press release contains forward-looking statements, and actual results may differ significantly due to various risks and uncertainties, with no obligation to update - This press release contains "forward-looking statements" regarding the company's financial performance, future growth, profitability, stock repurchase plans, platform expansion, and ENHANZE® drug delivery technology[18](index=18&type=chunk) - Actual results may differ materially from those projected in forward-looking statements due to various factors, including unexpected levels of revenue, expenses, and costs, unexpected delays in stock repurchase plans or platform expansion, unexpected outcomes or delays in business growth or product development, regulatory review or commercialization, regulatory approval requirements, tariffs, trade and drug pricing policies, tax legislation uncertainties, unexpected adverse events or patient outcomes, and competitive conditions[18](index=18&type=chunk) - The company undertakes no obligation to update any forward-looking statements to reflect events after the date of this release, except as required by law[18](index=18&type=chunk) [Financial Statements](index=7&type=section&id=Financial%20Statements) This section presents Halozyme's unaudited condensed consolidated statements of operations, balance sheets, and GAAP to non-GAAP reconciliations for specified periods [Condensed Consolidated Statements of Operations](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) This section provides unaudited condensed consolidated statements of operations for the three and six months ended June 30, 2025 and 2024, detailing revenue, operating expenses, and net income Condensed Consolidated Statements of Operations (Unaudited) | (In Thousands USD, except per share amounts) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Revenue: | | | | | | Royalties | $205,639 | $124,918 | $373,831 | $245,511 | | Product sales, net | 81,510 | 78,886 | 159,551 | 137,469 | | Collaboration revenue | 38,570 | 27,549 | 57,198 | 44,252 | | **Total revenue** | **325,719** | **231,353** | **590,580** | **427,232** | | Operating expenses: | | | | | | Cost of sales | 46,359 | 39,607 | 94,762 | 67,936 | | Amortization of intangible assets | 17,762 | 17,762 | 35,524 | 35,525 | | Research and development | 17,543 | 21,038 | 32,342 | 40,149 | | Selling, general and administrative | 41,614 | 35,711 | 83,976 | 70,845 | | **Total operating expenses** | **123,278** | **114,118** | **246,604** | **214,455** | | **Operating income** | **202,441** | **117,235** | **343,976** | **212,777** | | Other income (expense): | | | | | | Investment and other income, net | 6,891 | 5,032 | 13,709 | 10,025 | | Interest expense | (4,394) | (4,524) | (8,919) | (9,031) | | Income before income taxes | 204,938 | 117,743 | 348,766 | 213,771 | | Income tax expense | 39,778 | 24,498 | 65,511 | 43,703 | | **Net income** | **$165,160** | **$93,245** | **$283,255** | **$170,068** | | Earnings per share: | | | | | | Basic | $1.36 | $0.73 | $2.32 | $1.34 | | Diluted | $1.33 | $0.72 | $2.26 | $1.32 | | Weighted-average common shares outstanding: | | | | | | Basic | 121,343 | 127,116 | 122,274 | 127,029 | | Diluted | 124,158 | 129,222 | 125,452 | 129,097 | [Condensed Consolidated Balance Sheets](index=8&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section presents unaudited condensed consolidated balance sheets as of June 30, 2025, and December 31, 2024, outlining the company's assets, liabilities, and stockholders' equity Condensed Consolidated Balance Sheets (Unaudited) | (In Thousands USD) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Current assets: | | | | Cash and cash equivalents | $61,861 | $115,850 | | Available-for-sale marketable securities | 486,316 | 480,224 | | Accounts receivable, net and contract assets | 316,339 | 308,455 | | Inventories | 181,505 | 141,860 | | Prepaid expenses and other current assets | 76,652 | 38,951 | | **Total current assets** | **1,122,673** | **1,085,340** | | Property and equipment, net | 71,520 | 75,035 | | Prepaid expenses and other assets | 56,371 | 80,596 | | Goodwill | 416,821 | 416,821 | | Intangible assets, net | 366,306 | 401,830 | | Deferred income tax assets, net | 20,208 | 3,855 | | **Total assets** | **$2,053,899** | **$2,063,477** | | **Liabilities and Stockholders’ Equity** | | | | Current liabilities: | | | | Accounts payable | $18,691 | $10,249 | | Accrued expenses | 115,591 | 128,851 | | **Total current liabilities** | **134,282** | **139,100** | | Long-term debt, net | 1,509,100 | 1,505,798 | | Other long-term liabilities | 77,769 | 54,758 | | **Total liabilities** | **1,721,151** | **1,699,656** | | Stockholders’ equity: | | | | Common stock | 118 | 123 | | Additional paid-in capital | — | — | | Accumulated other comprehensive income (loss) | (28,403) | 3,829 | | Retained earnings | 361,033 | 359,869 | | **Total stockholders’ equity** | **332,748** | **363,821** | | **Total liabilities and stockholders’ equity** | **$2,053,899** | **$2,063,477** | [GAAP to Non-GAAP Reconciliations](index=9&type=section&id=GAAP%20to%20Non-GAAP%20Reconciliations) This section provides reconciliation tables for GAAP net income to EBITDA and adjusted EBITDA, and GAAP diluted EPS to non-GAAP diluted EPS, for the three months ended June 30, 2025 and 2024 GAAP to Non-GAAP EBITDA Reconciliation (Unaudited) | (In Thousands USD) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | GAAP net income | $165,160 | $93,245 | | Adjustments: | | | | Investment and other income, net | (6,891) | (5,568) | | Interest expense | 4,394 | 4,524 | | Income tax expense | 39,778 | 24,498 | | Depreciation and amortization | 20,502 | 20,331 | | **EBITDA** | **222,943** | **137,030** | | Adjustments: | | | | (1) Intellectual property litigation expenses | 2,561 | — | | **Adjusted EBITDA** | **$225,504** | **$137,030** | GAAP to Non-GAAP Diluted EPS Reconciliation (Unaudited) | (In Thousands USD, except per share amounts) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | GAAP diluted EPS | $1.33 | $0.72 | | Adjustments: | | | | Stock-based compensation | 0.10 | 0.07 | | Debt discount amortization | 0.01 | 0.01 | | Amortization of intangible assets | 0.14 | 0.14 | | (1) Intellectual property litigation expenses | 0.02 | — | | (2) Income tax impact of above adjustments | (0.07) | (0.04) | | **Non-GAAP diluted EPS** | **$1.54** | **$0.91** | | GAAP diluted shares | 124,158 | 129,222 | | Adjustments: | | | | (3) Dilutive impact of 2028 Senior Convertible Notes | (199) | — | | **Non-GAAP diluted shares** | **123,959** | **129,222** |

Core Insights - Halozyme Therapeutics reported a significant financial performance for the second quarter of 2025, with total revenue increasing by 41% year-over-year to $326 million, driven by a 65% increase in royalty revenue to $206 million [1][8] - The company raised its financial guidance for 2025, expecting total revenue between $1,275 million and $1,355 million, representing a year-over-year growth of 26% to 33% [11][17] Financial Performance - Net income rose by 77% year-over-year to $165 million, while adjusted EBITDA increased by 65% to $226 million [1][8] - GAAP diluted EPS increased by 85% year-over-year to $1.33, and non-GAAP diluted EPS rose by 69% to $1.54 [1][8] Share Repurchase and Capital Allocation - The company announced the initiation of a third $250 million share repurchase tranche under a $750 million authorized plan, completing a total of $303 million in share repurchases during the second quarter [2][4][7] - Strong cash generation supports a balanced capital allocation strategy, including investments in growth through mergers and acquisitions and returning capital to shareholders [4] Regulatory Approvals and Product Development - The company achieved notable regulatory milestones, including approvals for RYBREVANT SC in Europe and VYVGART Hytrulo for chronic inflammatory demyelinating polyneuropathy in Europe [3][10] - The ENHANZE drug delivery technology continues to gain traction, with increasing global demand and new indications being approved for existing therapies [3][4] Future Outlook - The updated financial guidance for 2025 includes expectations for royalty revenue between $825 million and $860 million, adjusted EBITDA between $865 million and $915 million, and non-GAAP diluted EPS between $6.00 and $6.40 [11][17] - The company anticipates continued growth driven by its blockbuster therapies and expanding regulatory approvals [3][11]