Halozyme second-quarter revenue increases to $3.2 million

Halozyme Therapeutics, Inc.Aug 7 2010

Halozyme Therapeutics, Inc. (Nasdaq: HALO), a biopharmaceutical company developing and commercializing products targeting the extracellular matrix for the endocrinology, oncology, dermatology and drug delivery markets, today reported financial results for the second quarter ended June 30, 2010.

"Halozyme continued to make good progress across multiple development programs in the second quarter, including Ultrafast Insulin, PEGPH20, and our alliance programs with Roche and Baxter," said Jonathan Lim, M.D., Halozyme's president and CEO. "The exciting clinical results that we presented at the ADA provided additional evidence that the fast-in, fast-out profile for Halozyme's Ultrafast Insulin leads to better glycemic control for patients with diabetes. Two additional treatment studies will be underway soon, which we believe will provide further support for this hypothesis."

Second Quarter 2010 and Recent Business Highlights

• Halozyme presented the results from three of its Ultrafast Insulin studies at this year's American Diabetes Association (ADA) 70th Scientific Sessions – June 25-29, 2010 in Orlando:
  • A Phase 1 study of three mealtime insulin analogs with and without rHuPH20 (recombinant human hyaluronidase, PH20) demonstrated that the coinjection of PH20 with lispro (Humalog®), aspart (NovoLog®) and glulisine (Apidra®) results in a more physiologic fast-in, fast-out profile and enhances the glucodynamic performance for each analog.  
  • A Phase 2 mealtime study demonstrated that subcutaneous coadministration of rHuPH20 with lispro significantly improved postprandial hyperglycemia, reduced hypoglycemia, and accelerated the absorption of mealtime insulin in patients with type 2 diabetes.
  • A poster presentation described the effects in a preclinical pharmacokinetic study on several insulins formulated with and without rHuPh20 in three animal models and determined that the Yucatan minipig was most comparable to humans.
• Halozyme initiated a voluntary recall of HYLENEX in May due to the presence of particles in a small number of vials of the product. No related medical events have been reported. Halozyme is working to identify and resolve the cause of the problem with the goal of returning HYLENEX to the marketplace as quickly as possible.
• The PEGPH20 cancer program recently expanded with the initiation of a second Phase 1 clinical trial. Patients with advanced cancer enrolled in the study will receive intravenous PEGPH20 plus oral dexamethasone. Animal models support the use of dexamethasone to achieve higher and more intensive dosing regimens of PEGPH20. The two parallel Phase 1 trials are designed to identify recommended Phase 2 doses of PEGPH20 with and without concomitant dexamethasone administration. Halozyme plans to report interim results from the ongoing Phase 1 studies during the fourth quarter of 2010 at a regional scientific oncology meeting. Additional information about these PEGPH20 trials can be found at clinicaltrials.gov using the identifiers NCT00834704 and NCT01170897.

Second Quarter 2010 Financial Results

The net loss for the second quarter of 2010 was $12.2 million, or $0.13 per share, compared with a net loss for the second quarter of 2009 of $17.1 million, or $0.21 per share.

• Revenue for the second quarter of 2010 was $3.2 million, compared to $1.4 million for the second quarter of 2009. Revenues under collaborative agreements for the second quarter of 2010 were $3.0 million, compared to $1.2 million for the second quarter of 2009. Revenues under collaborative agreements in the second quarter 2010 primarily consisted of the amortization of upfront fees received from Baxter and Roche of $804,000 and research and development reimbursements from Baxter and Roche of $2.1 million.
• Research and development expenses for the second quarter of 2010 were $11.9 million, compared with $14.6 million for the second quarter of 2009, primarily due to lower manufacturing costs associated with clinical trial material and a decrease in clinical trial expenses.  
• Selling, general and administrative expenses for the second quarter of 2010 were $3.4 million, compared to $3.9 million for the second quarter of 2009, reflecting lower salary and bonus accruals.  
• Cash and cash equivalents were $41.3 million as of June 30, 2010, compared with $67.5 million as of December 31, 2009 and $89.2 million as of June 30, 2009. Net cash burn for the second quarter of 2010 was approximately $13.9 million.

Upcoming Corporate Presentations

Halozyme representatives are scheduled to present at the following investor conferences:

• Collins Stewart, LLC Health Care Event to be held in New York, August 11, 2010
• UBS Global Life Sciences Conference to be held in New York, September 20-22, 2010
• The Fifth Annual JMP Securities Healthcare Conference to be held in New York, September 27-28, 2010