Halozyme Therapeutics, Inc. H.C. Wainwright 28th Annual Global Investment Conference

We appreciate the invite to be here.

Yeah. Halozyme is transforming how biologics are delivered subcutaneously, and we are entering just a terrific period of value creation as a result of that. How do we do this? We today have four technologies that enable subcutaneous delivery. ENHANZE, which is our flagship product, but we acquired recently two hyperconcentration technologies that will be entering the clinic and will offer a brand new value proposition for patients of being able to deliver biologics in volumes as low as 2 mLs via small volume autoinjectors. And we also have our own autoinjector line. ENHANZE has really been terrific. We describe it as a compounding platform engine for Halozyme because it is resulting in multiple royalty streams that are contributing meaningful revenue to Halozyme. We are just coming off a record second quarter. Our total revenue grew 48% year-over-year to $481 million.

This was really driven by our royalty revenues, which grew 50% year-over-year to $308 million. The top drivers of our royalties were our products that were launched in 2020 and 2023. That is DARZALEX subcutaneous and VYVGART Hytrulo. These are products that are going to continue to grow for many years to come because the companies are investing in new indications. There is deeper penetration into patient populations because of the great convenience that is being offered by the subQ, either as a push injection or as a prefilled syringe. What was very exciting in the quarter was also on top of this, to see products that we launched more recently and specifically RYBREVANT subcutaneous, OPDIVO subcutaneous, and OCREVUS subcutaneous grow 80% quarter-on-quarter.

That is a terrific growth to see, which means that we now have multiple diversified royalty streams that are contributing to the tremendous growth we see today, but that is going to continue for many years to come. That is not all because we expect by the end of the year to have 13 products with ENHANZE in clinical development, and again, we plan to continue to add more and more to that pipeline with products that can launch in the late 2020s and early 2030s, resulting from that particular pipeline of products, which will grow with additional new deals and current partners moving more products into the clinic. Then we have our new technology, Hypercon, which enables high concentration biologics. We expect our first two products there to enter the clinic in the first half of 2027.

You can see we have a very diversified, exciting, growing set of royalty revenues that is going to deliver very strong value for our shareholders.

Yes. As you point out, in the last nine months or so, we have had six new ENHANZE deals. That comes after a period where we had not had as many deals and people are saying, "Is this true demand or is this a pull forward?" It really is true demand because of the secular trend that we are seeing with companies, particularly those in inflammation and immunology, nephrology, gastroenterology, CNS, recognizing that the standard of care and what patients are looking for is delivery at home as simply as possible, or in the doctor's office given in a simple subQ injection so the patient does not have to be in the infusion suites all the time. Our structure has really been pretty standard for the last 15 years.

We receive an upfront payment, we receive milestones as the partners are making progress and clinical progress as well as achieving certain sales thresholds. Then we receive royalties which today are at the on average mid-single digit royalty rate in terms of the royalties that we are delivering today. Importantly for Halozyme, the model we have is we do not invest in any of the clinical development. We do not invest in the commercialization. So it is a very high margin business as a result. We do provide advisory services, but you can see how this is a business we can scale rapidly and grow without us having to add a lot of operating expense to be able to run this business. We do expect to continue to sign more ENHANZE deals. Everybody is recognizing subQ is the way to go, so look for more announcements.

We have said we expect one additional deal this year, and I believe it will be an ENHANZE one. I also want to mention Hypercon where we signed two deals this year as well, taking the Hypercon business to five deals. It is terrific companies, Eli Lilly, argenx, J&J, Vertex, and Oruka. Same structure as the ENHANZE agreement, same mid-single-digit royalty, and same operating model where we are not investing in the high expense areas of getting these products developed and launched. So two compounding platform engines that are going to be driving durable long-term royalty revenues for Halozyme.

Yep. Let me ask Darren to take that one.