On May 11, 2015 Halozyme Therapeutics, Inc. (NASDAQ: HALO), a biotechnology company developing novel oncology and drug-delivery therapies, reported financial results for the first quarter ended March 31, 2015 (Press release, Halozyme, MAY 11, 2015, View Source [SID:1234506620]). Financial highlights include revenues of $18.7 million and a net loss of $15.1 million, or $0.12 per share, compared to revenues of $12.0 million and a net loss of $26.5 million, or $0.22 per share, for the first quarter of 2014.
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"We continued to execute well in the first quarter against a focused strategy in oncology, ramping investments in our core program and achieving significant milestones toward the initiation of a Phase 3 study in pancreatic cancer patients early next year," said Dr. Helen Torley, president and chief executive officer. "In addition to this strategic progress, we exited the quarter in a much stronger financial position than last year due to a steady increase in royalty revenues from our rHuPH20 platform."
First Quarter 2015 Highlights and Subsequent Events
Announced plans to initiate a Phase 3 clinical study (Study 301) in metastatic pancreatic cancer patients with high-hyaluronan (HA) tumors: Based on feedback following a Type B meeting with the FDA, the company intends to initiate a Phase 3 study that will allow for a potential marketing application based on either progression free survival (PFS) or overall survival. Use of PFS as the basis for marketing approval will be subject to the overall benefit and risk associated with Halozyme’s investigational new drug, PEGPH20, combined with nab-paclitaxel (ABRAXANE) and gemcitabine therapy, including the:
Magnitude of the PFS treatment effect observed;
Toxicity profile; and
Interim overall survival.
The company plans to use a companion diagnostic test to prospectively identify and select patients with high levels of HA for its Phase 3 trial. The FDA provided feedback supporting the selection of high-HA patients and confirmed that an Investigational Device Exemption – or IDE – will be required prior to initiating the Phase 3 study. An IDE is a regulatory application that summarizes the methodology, validation and proposed cut-point for patient selection. The company plans to submit the IDE to support the late Q1 2016 Study 301 start.
Presented in January the interim results of Study 202 evaluating PEGPH20 with gemcitabine and ABRAXANE (nab-paclitaxel) in metastatic pancreatic cancer patients: In a retrospectively defined sub-population of patients, the data showed a statistically significant doubling in median PFS in metastatic pancreatic cancer patients with high levels of HA who were treated with PEGPH20 combined with nab-paclitaxel (ABRAXANE) and gemcitabine (9.2 months vs. 4.3 months in patients treated with nab-paclitaxel ABRAXANE and gemcitabine alone). The potential risk profile, including rate of thromboembolic events, was also evaluated.
In April, the company also announced plans to present the interim results of the study during an oral presentation by Dr. Sunil Hingorani, a principal investigator, at the annual meeting of the American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper).
Initiated enrollment in a Phase 1b/2 clinical trial of investigational PEGPH20 in non-small cell lung cancer (NSCLC): The company began enrollment in the Phase 1b/2 randomized clinical trial (PRIMAL) of PEGPH20 in combination with docetaxel as a second-line therapy for patients with locally advanced and metastatic NSCLC.
Published preclinical study results of PEGPH20 in Molecular Cancer Therapeutics (Singha et al., February 2015 14:523-532): Data highlights the use and potential of PEGPH20 to enhance the anti-cancer activity of the accompanying immunotherapy (trastuzumab and immune cells) in high-HA breast and ovarian cancer preclinical models. The paper expands on previously reported data in a poster presentation at the ASCO (Free ASCO Whitepaper) 2015 Gastrointestinal Cancers Symposium in San Francisco. The manuscript was written and funded by Halozyme.
Daratumumab selected as the first product candidate under Janssen collaboration: In March, Genmab A/S announced plans for a Phase 1 clinical trial of a subcutaneous formulation of the anti-CD38 antibody daratumumab using the ENHANZE technology. Daratumumab is being developed under a collaboration between Janssen and Genmab A/S since August 2012 when Genmab granted Janssen an exclusive worldwide license to develop, manufacture, and commercialize daratumumab. Daratumumab, a human monoclonal antibody that targets CD38, is in clinical development as a single agent and in combination with standard of care therapies in several settings of multiple myeloma.
First Quarter 2015 Financial Highlights
Revenues for the first quarter of 2015 were $18.7 million, compared to $12.0 million for the first quarter of 2014. Revenues in the first quarter included $6.8 million in royalty revenue from sales of products under collaboration agreements, $6.1 million in product sales of bulk rHuPH20 for use in manufacturing collaboration products for Roche, $3.8 million in Hylenex recombinant (hyaluronidase human injection) product sales, and $2.0 million in collaboration revenues. Royalty revenues represent October to December 2014 sales as a result of the one quarter lag in royalty reports.
Research and development expenses for the first quarter of 2015 were $16.7 million, compared to $21.4 million for the first quarter of 2014. The decrease was primarily due to a planned decrease in expenses associated with the diabetes program.
Selling, general and administrative expenses for the first quarter of 2015 were $9.4 million, compared to $10.3 million for the first quarter of 2014. The decrease was primarily due to a decrease in compensation expenses.
The net loss for the first quarter of 2015 was $15.1 million, or $0.12 per share, compared to a net loss for the first quarter of 2014 of $26.5 million, or $0.22 per share.
Cash, cash equivalents and marketable securities were $128.5 million at March 31, 2015, compared to $135.6 million at December 31, 2014. Net cash used in the first quarter of 2015 was approximately $7.1 million.
Financial Outlook for 2015
For the full year 2015, the company reiterated its previously disclosed guidance of:
Net revenues to be in the range of $85 million to $95 million.
Operating expenses to be in the range of $145 million to $155 million.
Net cash burn to be between $35 million to $45 million.