Halozyme Therapeutics, Inc. (HALO)

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Halozyme Therapeutics, Inc. (HALO)

Q3 2009 Earnings Call Transcript

November 6, 2009 11:00 am ET


Robert Uhl – Senior Director, IR

Jonathan Lim – President and CEO

Kurt Gustafson – VP and CFO

Greg Frost – VP and Chief Scientific Officer


Eun Yang – Jefferies & Company

Terence Flynn – Lazard Capital Markets

Chris Geston – UBS

Andrew Vaino – Roth Capital Partners

Jonathan Aschoff – Brean Murray, Carret & Co.



Welcome to the Halozyme 2009 third quarter financial results and pipeline update conference call. At this time all participants are in a listen-only mode. Following management’s prepared remarks we will hold a question-and-answer session. (Operator Instructions). As a reminder this conference call is being recorded today, November 6, 2009.

I would now like to turn the call over to Robert Uhl. Please go ahead.

Robert Uhl

Thank you, Adrian, and thanks also to everyone for participating in today’s call. I’m Robert Uhl, Senior Director of Investor Relations at Halozyme Therapeutics.

Joining me on the call today from Halozyme are Jonathan Lim, President and Chief Executive Officer, and Kurt Gustafson, Chief Financial Officer. Additional members of the Halozyme management team will also be available to address your questions during the Q&A portion of the call.

This morning Halozyme released 2009 third quarter financial results. If you have not received this news release or if you would like to be added to the company’s distribution list please call Alex Schlam [ph] at 858-704-8288. This call is also being webcast live over the Internet at www.halozyme.com and a replay will be available on the company’s website for the next seven days.

Before we begin let me remind you that during this conference call we will be making forward-looking statements. The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements. All statements made during this conference call that are not statements of historical fact constitute forward-looking statements. The matters referred to in forward-looking statements could be affected by the risks and uncertainties of Halozyme’s business both known and unknown.

Such risks inherent to the company’s business are described in our filings with the Securities and Exchange Commission as well as in our news releases. The company’s actual results may differ materially from those expressed in or indicated by such forward-looking statements.

With that I would like to turn the call over to Jonathan Lim, President and CEO.

Jonathan Lim

Thanks Robert. Good morning everyone and thank you for joining us on the call. Halozyme continues to make exceptional progress in 2009. Today, I will review our recent accomplishments and update the status of our key proprietary product development programs and our three alliance programs with Roche and Baxter. Also on the call today Kurt Gustafson, our CFO, will provide the highlights of our financial results for the most recently completed quarter and for the nine months.

We had an opportunity to see many of you at our recent Analyst Day meeting in New York on October 15th, where we provided an extensive discussion of our technology and our scientific understanding of the extracellular matrix. We also provided an update on our key programs and revealed some of the earlier stage preclinical activities at Halozyme including enzymes that degrade collagen within certain temperature and PH ranges. A replay of the Analyst Day presentation can be found on Halozyme’s website at www.halozyme.com.

Since our Analyst Day, we were able to make a very exciting disclosure with the announcement of patient dosing in a Phase III trial of subcutaneous Herceptin with our PH20 enzyme. What makes Halozyme an incredibly unique and attractive investment opportunity is the fact that our core technology is being applied to existing blockbuster products such as Herceptin, a product with almost $5 billion in worldwide sales in oncology, mealtime insulin which is in a rapidly growing $3 billion market in endocrinology, and GAMMAGARD a product with approximately $1 billion in worldwide sales.

We continued to pursue large multi-billion dollar franchise opportunities in the areas of endocrinology, oncology, dermatology and drug delivery. And we have a robust pipeline of therapeutic candidates within these therapeutic areas. Within these categories, we have proprietary product development programs where our goal is to identify innovative new drugs with highly differentiated value-added characteristics that will allow them to be either best-in-class or first-in-class products that make an impact on patients’ lives and enjoy large commercial sales potential.

Halozyme maintains all commercial rights on a worldwide basis to all of our proprietary programs. Now in the case of our partnered programs, we out licensed an approved product for our technology for specific applications. As the partnerships with Roche and Baxter advance in development and reach commercialization, Halozyme expects to receive milestone and royalty payments which we may use to help fundamental of our exciting proprietary programs. In fact, we have received nearly $100 million from these two partners during the past 2.5 years.

To remind you, we have three product development alliances, two of the alliances involve our Enhanze Technology or a high-dose PH20 with Roche and Baxter BioScience. While the third partnership is with Baxter Medication Delivery for Hylenex, our FDA approved drug.

Recently the Halozyme Roche alliance reached a significant milestone with the first patient dosing in the Phase III registration trial for subcutaneous formulation of Herceptin with PH20 in the treatment of HER2-positive breast cancer. The start of the trial triggered a milestone payment of $5 million to Halozyme. According to analyst estimates, worldwide sales for Herceptin which is approved for intravenous or IV administration are approaching $5 billion per year as I mentioned earlier.

Read the rest of this transcript for free on seekingalpha.com