Halozyme Therapeutics reports net loss of $9.6 million for first quarter 2011

Halozyme Therapeutics, Inc.May 7 2011

Halozyme Therapeutics, Inc. (Nasdaq: HALO), a biopharmaceutical company developing and commercializing products targeting the extracellular matrix for the diabetes, cancer, dermatology and drug delivery markets, today reported financial results for the first quarter 2011.

"The faster insulin absorption and shorter duration of action observed in our first ultrafast insulin pump study is exciting," stated Gregory I. Frost, Ph.D., Halozyme's president and CEO. "Patients with diabetes that use insulin pumps could see unique benefits from Halozyme's Ultrafast Insulin."

First Quarter 2011 and Recent Business Highlights

• Halozyme presented preliminary results from its first Ultrafast Insulin study in type 1 diabetes patients who receive their treatment with an insulin pump demonstrating that Aspart-PH20 generates a faster-in and faster-out profile with accelerated insulin absorption and a shorter duration of action compared to aspart alone. Aspart-PH20 is a formulation of Halozyme's rHuPH20 (recombinant human hyaluronidase) enzyme with the active ingredient in NovoLog® that was administered as a continuous subcutaneous insulin infusion over 72 hours with an insulin pump. Halozyme presented these results at the American Association of Clinical Endocrinologists meeting in San Diego on April 14, 2011.  
• American Diabetes Association (ADA) 71st Scientific Sessions – June 24-28, 2011 in San Diego. Halozyme has received acceptance notification for two presentations of results from its Ultrafast Insulin studies at this year's ADA. A poster presentation examines the role that the coinjection of rHuPH20 with prandial insulin plays in the acceleration of pharmacokinetics and glucodynamics across a variety of populations. The second data set to be presented utilizes continuous glucose monitoring over a 72-hour period to test the variability of insulin absorption with and without rHuPH20 at the beginning and the end of a 12-week treatment study. The goal of Halozyme's Ultrafast Insulin program is to develop a best-in-class mealtime insulin product compared to the currently prescribed analogs that participate in the growing $3.8 billion worldwide prandial insulin market.

First Quarter 2011 Financial Results

The net loss for the first quarter of 2011 was $9.6 million, or $0.10 per share, compared with a net loss for the first quarter of 2010 of $11.8 million, or $0.13 per share.

• Revenue for the first quarter of 2011 was $7.5 million, compared to $3.4 million for the first quarter of 2010. Revenues under collaborative agreements for the first quarter of 2011 were $7.4 million, compared to $3.0 million for the first quarter of 2010. Revenues under collaborative agreements in the first quarter of 2011 primarily consisted of a milestone payment and the amortization of upfront payments received from Baxter and Roche of $5.7 million and research and development reimbursements from Baxter and Roche of $1.6 million.
• Research and development expenses for the first quarter of 2011 were $13.8 million, compared with $11.5 million for the first quarter of 2010, primarily due to an increase in clinical trial activities supporting the Ultrafast Insulin program.  
• Selling, general and administrative expenses for the first quarter of 2011 were $3.4 million, compared to $3.8 million for the first quarter of 2010. The decline for SG&A results from lower compensation and market research expenses during the quarter.  
• Cash and cash equivalents were $73.8 million as of March 31, 2011, compared with $83.3 million as of December 31, 2010 and $55.2 million as of March 31, 2010. Net cash burn for the first quarter of 2011 was approximately $9.4 million.
• For 2011, management anticipates total operating expenses will be slightly higher than those reported for 2010, which were approximately $68 million. The increase for operating expense is expected to arise from costs associated with additional activities related to clinical trials and manufacturing. The company continues to expect net cash burn of $47 to $52 million for the year 2011.