Core Viewpoint - Halozyme Therapeutics, Inc. has announced the pricing of $650 million in 0% convertible senior notes due 2031 and $650 million in 0.875% convertible senior notes due 2032, with an option for initial purchasers to buy an additional $100 million of each series [1][4]. Summary by Sections Convertible Notes Details - The 2031 Notes are senior, unsecured obligations with no regular interest and no principal accretion, while the 2032 Notes will accrue interest at an annual rate of 0.875% payable semi-annually [2]. - The initial conversion rate for both series is 11.4683 shares per $1,000 principal amount, equating to a conversion price of approximately $87.20 per share, representing a 27.5% premium over the closing price of $68.39 on November 6, 2025 [2]. Use of Proceeds - The company expects to receive net proceeds of approximately $1.274 billion, or $1.47 billion if the option for additional notes is fully exercised, after deducting discounts and expenses [4]. - Approximately $182.7 million of the proceeds will fund capped call transactions, while about $1.020 billion will be used to repurchase existing convertible notes due 2027 and 2028 [4][5]. Capped Call Transactions - Capped call transactions have been established to cover the shares underlying the convertible notes, with a cap price of $136.78 per share, representing a 100% premium over the last reported sale price [3][7]. - These transactions are expected to reduce potential dilution upon conversion of the notes and offset cash payments if the market price exceeds the cap price [7]. Market Impact - The note repurchases may influence the market price of the company's common stock and convertible notes, potentially affecting the conversion price and the number of shares received upon conversion [6][10]. - The company anticipates that hedging activities related to the capped call transactions could also impact the market price of its common stock [8][9]. Company Overview - Halozyme is a biopharmaceutical company focused on innovative drug delivery solutions, particularly through its ENHANZE® technology, which facilitates subcutaneous delivery of drugs [14][15]. - The company has partnered with major pharmaceutical firms and has a presence in over 100 global markets, impacting approximately one million patients [14].

Core Insights - Halozyme Therapeutics (HALO) reported Q3 2025 adjusted earnings of $1.72 per share, exceeding the Zacks Consensus Estimate of $1.63, with a year-over-year increase of 35.4% [1][7] - Total revenues for Q3 2025 reached $354.3 million, a 22% increase year-over-year, surpassing the Zacks Consensus Estimate of $337 million [1][7] Revenue Breakdown - The growth in total revenues was primarily driven by increased product sales and higher royalty payments [2] - Royalty revenues amounted to $236 million in Q3, reflecting a 52% increase from the previous year, driven by strong demand for Phesgo, subcutaneous Darzalex, and Vyvgart Hytrulo [6] - Product sales were reported at $94.2 million, an 8.7% increase year-over-year, exceeding the model estimate of $83.8 million [8] - Revenues from collaborative agreements decreased by 50.4% year-over-year to $24 million [8] Financial Performance - Adjusted EBITDA for Q3 was $248.2 million, representing a 35% increase from the prior year [8] - As of September 30, 2025, the company had cash, cash equivalents, and marketable securities totaling $702 million, up from $548.2 million as of June 30, 2025 [9] Guidance Update - Halozyme raised its 2025 revenue guidance to a range of $1.30 billion to $1.38 billion, up from the previous range of $1.28 billion to $1.36 billion [10] - Royalty revenue expectations were adjusted to $850-$880 million, compared to the earlier forecast of $825-$860 million [11] - Adjusted EBITDA guidance was increased to $885-$935 million, up from $865-$915 million [11] - Adjusted earnings per share guidance was raised to a range of $6.10-$6.50, compared to the previous range of $6.00-$6.40 [11] Recent Developments - Halozyme announced a definitive agreement to acquire Elektrofi, a biopharmaceutical company specializing in ultra-high concentration microparticle technology for biologics [12] - The acquisition involves an upfront payment of $750 million, with potential milestone payments of $50 million each, contingent on regulatory approvals for three products [13]

Financial Data and Key Metrics Changes - The company reported record royalty revenue of $236 million, a 52% increase year over year, contributing to total revenue of $354 million, which reflects a 22% growth year over year [4][27] - Adjusted EBITDA grew by 35% to $248 million, outpacing top-line growth, showcasing the strength of the royalty-based business model [4][30] - The company raised its full-year 2025 guidance, projecting total revenue of $1.3 billion to $1.375 billion, representing 28% to 35% growth over 2024 [7][31] Business Line Data and Key Metrics Changes - Darzalex Subcutaneous sales increased by 20% to $3.7 billion, with a significant market share gain of approximately 5.7 percentage points across all therapy lines [10][11] - Fesgo generated revenue of approximately $2.3 billion, reflecting a 54% year-over-year increase, with conversion from intravenous therapies reaching 51% [13] - Vyvgart Hytrulo saw total sales increase by 96% year-over-year to $1.13 billion, driven by the subcutaneous formulation enabling self-injection [14][16] Market Data and Key Metrics Changes - The company achieved 13 out of 15 growth catalysts year to date, including new product approvals and expanded indications [5] - The approval of Darzalex Subcutaneous for smoldering multiple myeloma in Europe is expected to expand its market reach significantly [6] - The subcutaneous formulation of Ocrevus is projected to represent an incremental $2 billion opportunity, with analysts estimating total brand sales to reach $10 billion by 2028 [18][19] Company Strategy and Development Direction - The acquisition of Electrovive aims to enhance at-home administration of biologic therapies, expanding the portfolio of drug delivery technologies [8] - The company is focused on patient-centric drug delivery solutions, leveraging its ENHANZE technology alongside new innovations like HyperCon [9] - The strategic goal is to maintain strong momentum in transforming the subcutaneous delivery landscape, with a robust pipeline of future royalty streams [24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the continued strength of the core ENHANZE business and the accelerating momentum across the partner portfolio [34] - The company anticipates sustained royalty contributions from all products through at least 2030, ensuring a robust revenue stream [24] - Management highlighted the importance of ongoing discussions for new ENHANZE agreements, indicating strong interest from potential partners [48] Other Important Information - The company reported a strong balance sheet with cash and marketable securities of $702 million as of September 30, 2025, up from $596.1 million at the end of 2024 [28] - The net debt-to-EBITDA ratio was 0.9 times at the end of the third quarter, indicating a solid financial position [28] Q&A Session Summary Question: Thoughts on capital allocation and debt management - Management indicated a balanced approach to capital allocation, with plans to pay down debt while considering share repurchases and new acquisition opportunities [35][36] Question: Awareness of Electrovive technology among partners - Management noted that there is good awareness of the HyperCon technology among current partners, with strong support for potential collaboration [39] Question: Market growth sources for products - Management highlighted that market growth is coming from both share gains from other therapies and earlier use in treatment [40] Question: Future M&A opportunities - Management stated that while they are actively looking for new opportunities, it is unlikely there will be another acquisition this year following the Electrovive deal [42][43] Question: Updates on pipeline products - Management confirmed that there have not been any public updates from ViiV or Acumen recently, but they are awaiting further information [57]

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Halozyme Therapeutics, Inc. Third Quarter Financial & Operating Results NASDAQ: HALO November 3, 2025 1 Forward-Looking Statements In addition to historical information, the statements set forth in this presentation include forward-looking statements including, without limitation, statements concerning the Company's expected future financial performance and growth rates (including the Company's 2025 financial guidance and longer term financial outlook through 2028 and the assumptions used in deriving such g ...

Regulatory Approvals - In September 2025, argenx received approval in Japan for VYVDURA prefilled syringe for self-injection for treating adult patients with generalized myasthenia gravis and chronic inflammatory demyelinating polyneuropathy [152]. - In July 2025, Janssen announced European Commission approval for a new indication for DARZALEX SC as a monotherapy for high-risk adult patients with smoldering multiple myeloma [152]. - In June 2023, argenx received FDA approval for VYVGART Hytrulo for generalized myasthenia gravis, followed by European Commission approval in November 2023 and Japan approval in January 2024 [178]. - In July 2023, argenx reported positive data from the ADHERE study for VYVGART Hytrulo in chronic inflammatory demyelinating polyneuropathy, with FDA approval announced in June 2024 [178]. - OCREVUS SC received EU marketing authorization in June 2024 for a ten-minute injection, administered twice a year for multiple sclerosis [164]. - Takeda's HYQVIA received FDA approval for treating Primary Immunodeficiency in children in April 2023, expanding its use [169]. - BMS's Opdivo Qvantig, the first SC programmed death 1 inhibitor, received FDA approval in December 2024 for multiple adult solid tumors [176]. - Roche's TECENTRIQ SC was approved by the FDA in September 2024, further enhancing its market presence [163]. Collaborations and Acquisitions - Halozyme agreed to acquire Elektrofi, Inc. for $750 million upfront and up to three $50 million milestone payments contingent on product regulatory approvals, expected to close in Q4 2025 [152]. - The company licenses its ENHANZE technology to major biopharmaceutical companies, enhancing the delivery of high-dose injectable biologics [148]. - Halozyme's collaborations include partnerships with Roche, Takeda, Pfizer, Janssen, AbbVie, Lilly, BMS, argenx, ViiV, Chugai, and Acumen [149]. - In November 2023, argenx entered into a collaboration with Acumen to explore the use of ENHANZE for ACU193, targeting early Alzheimer's disease [185]. - In March 2025, ViiV announced that N6LS administered every four months with ENHANZE successfully maintained viral suppression in adults living with HIV [182]. Product Development and Technology - Halozyme has commercialized auto-injector products with Teva and Otter, and has development programs with McDermott Laboratories Limited [150]. - Halozyme's proprietary product portfolio includes Hylenex and XYOSTED, utilizing rHuPH20 and auto-injector technology respectively [150]. - ENHANZE technology may reduce patient treatment burden by enabling shorter administration times compared to intravenous methods [148]. - ATRS-1902 is a proprietary drug-device combination product for adrenal crisis rescue, with a Phase 1 clinical study initiated in September 2021 [158]. - Positive results from the Phase 1 study of ATRS-1902 led to Fast Track designation by the FDA, advancing the program to a pivotal study [159]. - The FDA accepted the IND application for ATRS-1902, allowing the initiation of clinical studies to compare its pharmacokinetics with Solu-Cortef [158]. - The company is actively expanding its product portfolio through collaborations and new product candidates in the pipeline [154]. Financial Performance - Royalties for the three months ended September 30, 2025, were $236,038, a 52% increase from $155,061 in 2024, driven by sales of ENHANZE partner products [192]. - Proprietary product sales for the three months ended September 30, 2025, were $52,242, a 31% increase from $39,925 in 2024, primarily due to market penetration of XYOSTED [192]. - Total product sales, net for the three months ended September 30, 2025, were $94,228, a 9% increase from $86,659 in 2024 [192]. - Revenues under collaborative agreements for the three months ended September 30, 2025, were $23,998, a 50% decrease from $48,364 in 2024, primarily due to timing of milestones achieved [194]. - Royalties for the nine months ended September 30, 2025, increased by 52% to $609,869,000 compared to $400,572,000 in 2024, driven by sales of ENHANZE partner products [202]. - Total product sales, net for the nine months ended September 30, 2025, increased by 13% to $253,779,000 from $224,128,000, primarily due to increased sales of proprietary product XYOSTED [203]. - Revenues under collaborative agreements decreased by 12% to $81,196,000 from $92,616,000, primarily due to the timing of milestones achieved [204]. Operating Expenses and Cash Flow - Operating expenses for the three months ended September 30, 2025, increased by 12% in cost of sales to $55,242,000 compared to $49,426,000 in 2024 [195]. - Research and development expenses decreased by 7% to $17,251,000 from $18,458,000, primarily due to lower compensation expenses [197]. - Selling, general and administrative expenses rose by 12% to $46,088,000, driven by increased consulting and professional service fees, including $6,000,000 in litigation costs [198]. - Investment and other income, net decreased by 18% to $5,333,000 from $6,474,000, mainly due to lower market interest rates [199]. - Income tax expense increased by 55% to $43,733,000 from $28,136,000, attributed to higher income before tax [201]. - Net cash provided by operating activities increased by $131,932,000 to $432,529,000 for the nine months ended September 30, 2025 [212]. - As of September 30, 2025, the company had cash, cash equivalents, and marketable securities totaling $702,000,000, sufficient to fund operations for at least the next 12 months [210]. Debt and Financing - As of September 30, 2025, the conditional conversion feature of the 2028 Convertible Notes was triggered, classifying them as current portion of long-term debt [219]. - The initial conversion rate for the 2028 Convertible Notes is 17.8517 shares per $1,000 principal amount, equivalent to a conversion price of approximately $56.02 per share [220]. - The cap price of the Capped Call Transactions is initially $75.4075 per share, representing a 75% premium above the last reported sale price of $43.09 per share on August 15, 2022 [221]. - The company paid approximately $69.1 million for the Capped Calls, recorded as a reduction to additional paid-in capital [222]. - The company completed the sale of $805.0 million in aggregate principal amount of 0.25% Convertible Senior Notes due 2027, with net proceeds of approximately $784.9 million after fees [223]. - The initial conversion rate for the 2027 Convertible Notes is 12.9576 shares per $1,000 principal amount, equivalent to a conversion price of approximately $77.17 per share [226]. - The 2022 Credit Agreement provides for a $575 million revolving credit facility and a $250 million term loan facility, maturing on November 30, 2026 [227]. - The Term Facility requires quarterly repayments of 2.50%, 5.00%, 7.50%, and 10.00% of the initial principal amount in the first four years, respectively [228]. - As of September 30, 2025, the revolving credit facility was undrawn [230]. - The company does not believe that an immediate change of 10% in interest rates would materially impact its results of operations [237].

Financial Performance - Royalty revenue increased 52% year-over-year to a record $236 million, driving total revenue to a record $354 million, representing a 22% increase year-over-year[4] - Net income rose 28% year-over-year to $175 million; adjusted EBITDA increased 35% year-over-year to $248 million; GAAP diluted EPS increased 36% year-over-year to $1.43[1] - Total revenues for the three months ended September 30, 2025, were $354.3 million, a 22.1% increase from $290.1 million in the same period of 2024[25] - Royalty revenues reached $236.0 million for the three months ended September 30, 2025, compared to $155.1 million in the prior year, reflecting a 52.3% increase[25] - Net income for the three months ended September 30, 2025, was $175.2 million, up 28.0% from $137.0 million in the same period of 2024[25] - Adjusted EBITDA for the three months ended September 30, 2025, was $248.2 million, compared to $183.6 million in the same period of 2024, representing a 35.3% increase[29] - The company raised its 2025 financial guidance for total revenue to $1,300 - $1,375 million, representing year-over-year growth of 28% - 35%[12] - Adjusted EBITDA guidance for 2025 is set at $885 - $935 million, representing year-over-year growth of 40% - 48%[12] - Non-GAAP diluted EPS guidance for 2025 is projected at $6.10 - $6.50, representing year-over-year growth of 44% - 54%[12] Cash and Assets - Cash, cash equivalents, and marketable securities increased to $702 million as of September 30, 2025, compared to $596.1 million on December 31, 2024[13] - Cash and cash equivalents increased to $419.7 million as of September 30, 2025, from $115.9 million at the end of 2024[27] - Total assets as of September 30, 2025, were $2.22 billion, an increase from $2.06 billion at the end of 2024[27] Strategic Initiatives - The company plans to acquire Elektrofi for $750 million, with potential milestone payments of up to $150 million contingent on product regulatory approvals[10] - The company is pursuing the acquisition of Elektrofi, which is expected to enhance its platform and financial results[22] - The company achieved 13 out of 15 growth catalysts announced in Q1, including new product approvals and geographic expansion[4] - The company anticipates potential growth driven by new clinical trials and regulatory submissions related to its ENHANZE drug delivery technology[22] - The company has outlined plans for share repurchases and potential collaborations to expand its market presence[22] - The company initiated a $250 million share repurchase tranche, with $92.3 million used to repurchase approximately 1.7 million shares at an average price of $52.89 per share[10]

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Financial Performance - Royalty revenue increased 52% year-over-year to a record $236 million, driving total revenue to a record $354 million, representing a 22% increase year-over-year [1][3][13] - Net income rose 28% year-over-year to $175 million, with adjusted EBITDA increasing 35% year-over-year to $248 million [1][10][13] - GAAP diluted EPS increased 36% year-over-year to $1.43, while non-GAAP diluted EPS rose 35% year-over-year to $1.72 [1][10][13] Financial Guidance - The company raised its 2025 financial guidance ranges for total revenue to $1,300 - $1,375 million, representing year-over-year growth of 28% - 35% [1][11] - Adjusted EBITDA guidance was raised to $885 - $935 million, indicating year-over-year growth of 40% - 48% [1][11] - Non-GAAP diluted EPS guidance was increased to $6.10 - $6.50, reflecting year-over-year growth of 44% - 54% [1][11] Corporate Developments - The company announced a transition plan for its Chief Financial Officer, Nicole LaBrosse, who will remain in her position until a successor is found or until March 30, 2026 [2][5] - Halozyme is set to acquire Elektrofi, a biopharmaceutical company, for $750 million in upfront consideration, with additional milestone payments contingent upon product regulatory approvals [8][11] - The acquisition is expected to close in the fourth quarter of 2025, pending regulatory review [8][11] Product and Market Expansion - The company achieved two new indication approvals this quarter, enhancing its growth catalysts [3][4] - The continued success of ENHANZE-enabled therapies, including DARZALEX SC, Phesgo, and VYVGART Hytrulo, underscores the strength of Halozyme's royalty-driven business model [3][4] - The company anticipates revenue growth contributions from additional launched ENHANZE products to increase in 2026 and beyond [3][4]

Core Viewpoint - Halozyme Therapeutics, Inc. is focused on enhancing drug delivery technology through its ENHANZE platform, with significant developments including a recent acquisition and expectations for strong earnings growth [1][3][4]. Company Overview - Halozyme Therapeutics specializes in drug delivery technology, particularly through its ENHANZE platform, which allows for subcutaneous delivery of injectable biologics [1]. - The company's flagship product, Hylenex recombinant, is essential for improving subcutaneous fluid administration [1]. Financial Performance and Expectations - The consensus price target for HALO stock has fluctuated, currently at $74.5, down from $79.67 last quarter but up from $70.6 last year, indicating changing analyst expectations [2][5]. - Halozyme is preparing for its third-quarter earnings report, with expectations of robust royalty growth and a strong track record of surpassing earnings expectations [3][4]. Strategic Developments - The company has made a significant acquisition of Elektrofi, Inc. for an upfront payment of $750 million, which is expected to enhance its drug delivery offerings and influence its outlook for 2025 [3][5]. - The acquisition is anticipated to contribute to royalty revenue by 2030, targeting approved blockbuster mechanisms, thereby bolstering long-term growth prospects [4].