Earnings call transcript: Halozyme Q2 2025 sees EPS beat, revenue miss

Halozyme Therapeutics Inc. (HALO), currently valued at $7.49 billion by market capitalization, reported its Q2 2025 earnings on August 5, showcasing a notable earnings per share (EPS) beat but falling short on revenue expectations. According to InvestingPro analysis, the company maintains a "GREAT" financial health score of 3.7 out of 5, and their analysis suggests the stock is currently undervalued. The company delivered an actual EPS of $1.54, surpassing the forecasted $1.24 by 24.19%. However, revenue came in at $206 million, significantly below the expected $286.01 million, marking a surprise drop of 27.97%. In after-hours trading, Halozyme’s stock price rose by 1.37%, closing at $60.88.

Key Takeaways

• EPS of $1.54 exceeded forecasts by 24.19%.
• Revenue of $206 million missed expectations by 27.97%.
• Stock price increased by 1.37% in after-hours trading.
• Raised 2025 total revenue guidance to $1.275-$1.355 billion.
• Continued strong growth in royalty revenues, particularly from ENHANZE technology.

Company Performance

Halozyme continues to demonstrate robust performance in its core operations, particularly in the royalty revenue segment, which grew by 65% year-over-year. The company’s ENHANZE technology remains a key driver, with products like DARZALEX and Opdivo showing strong market traction. Despite missing revenue forecasts, Halozyme’s strategic focus on expanding patient access through subcutaneous delivery and at-home drug administration is yielding positive results.

Financial Highlights

• Total quarterly revenue: $326 million, a 41% increase year-over-year.
• Royalty revenue: $206 million, up 65% year-over-year.
• Adjusted EBITDA: $225.5 million, up 65% year-over-year.

Earnings vs. Forecast

Halozyme’s EPS of $1.54 represents a significant beat over the forecasted $1.24, reflecting a 24.19% surprise. This marks a strong performance compared to previous quarters, where EPS surprises have been less pronounced. However, the revenue shortfall of $80.01 million against expectations is a notable miss, highlighting potential challenges in market conditions or execution.

Market Reaction

Following the earnings announcement, Halozyme’s stock price increased by 1.37% in after-hours trading, reaching $60.88. This movement suggests a positive investor response to the EPS beat and forward guidance, despite the revenue miss. The stock has demonstrated strong momentum with a 27.19% year-to-date return and trades at an attractive PEG ratio of 0.27, indicating potential value relative to its growth rate. The stock remains within its 52-week range, with a high of $70.51 and a low of $42.01.

Outlook & Guidance

Halozyme has revised its 2025 total revenue guidance upwards to a range of $1.275-$1.355 billion, anticipating a growth rate of 26-33%. Royalty revenue guidance has also been increased to $825-$860 million, reflecting a growth expectation of 44-51%. The company remains optimistic about its pipeline, with nine product candidates and the potential for at least one new ENHANZE deal in 2025.

Executive Commentary

CEO Helen Torley emphasized the company’s growth catalysts, stating, "We have never had such a broad and meaningful set of growth catalysts." She also credited the success to the dedication of employees. CFO Nicole LaBrosse highlighted the company’s commitment to capital returns, stating, "We are very committed to continuing to use our capital for share repurchases."

Risks and Challenges

• Potential impacts from ongoing patent litigation with Merck.
• Regulatory changes from CMS could affect operations.
• Market saturation in the subcutaneous drug delivery space.
• Supply chain disruptions could impact product availability.
• Economic uncertainties may influence consumer spending and healthcare budgets.

Q&A

During the earnings call, analysts focused on the company’s litigation with Merck and the potential regulatory changes from CMS. Questions also centered on the company’s auto injector technology and its strategic initiatives in the subcutaneous drug delivery market. Halozyme expressed confidence in addressing these challenges and highlighted strong interest in its innovative solutions.

Full transcript - Halozyme Therapeutics Inc (HALO) Q2 2025:

Kaelin, Conference Operator: Good afternoon. My name is Kaelin. I will be your conference operator today. At this time, I would like to welcome everyone to the Halozyme’s Second Quarter twenty twenty five Financial and Operating Results Conference Call. All lines have been placed on mute to prevent any background noise.

After the speakers’ remarks, there will be a question and answer session. Please note this event is being recorded. I will now turn the call over to Tram Bui, Halozyme’s Vice President of Investor Relations and Corporate Communications. Please go ahead.

Tram Bui, Vice President of Investor Relations and Corporate Communications, Halozyme: Thank you, operator. Good afternoon, and welcome to our second quarter twenty twenty five financial and operating results conference call. In addition to the press release issued today after the market closed, you could find a supplementary slide presentation that will be referenced during today’s call in the Investor Relations section of our website. Leading the call will be Doctor. Helen Torley, Halozyme’s President and Chief Executive Officer, who will provide an update on our business and Nicole LaBrosse, our Chief Financial Officer, will review our financial results as well as our outlook.

We will be making forward looking statements as outlined on Slide two. I would also refer you to our SEC filings for a full list of risks and uncertainties. During the call, both GAAP and non GAAP financial measures will be discussed. Certain non GAAP or adjusted financial measures are reconciled with the comparable GAAP financial measures in our earnings press release and slide presentation. I will now turn the call over to Doctor.

Helen Torley.

Helen Torley, President and Chief Executive Officer, Halozyme: Good afternoon, everyone, and thank you for joining us today. Let me begin on Slide three. I’m pleased to announce another record quarter, which highlights the significant growth and accelerating momentum we have across the business. Total revenue in the quarter was $326,000,000 representing a 41% increase over second quarter prior year. This robust growth was driven by continued strong royalty revenue performance driven by our three established blockbuster subcutaneous therapies Darzalex subcutaneous, subcutaneous FSGO and five CAR HYTULLO.

This quarter’s royalty revenue grew an impressive 65% year over year to $2.00 $6,000,000 and adjusted EBITDA increased an outstanding 65% over prior year second quarter to $226,000,000 This was driven by the accelerating growth of our high margin royalty revenue streams as a result of increasing demand for products incorporating our leading drug delivery technology, ENHANZE. Based on this strong continued performance and the growth trends, I am pleased to announce that we are raising our 2025 financial for the second time this year. We are now projecting total revenue of 1,275,000,000 to $1,355,000,000 representing 26% to 33% growth over 2024. This is a further increase to revenue guidance of $75,000,000 after raising guidance by approximately $50,000,000 in the first quarter reporting. 2025 full year royalty revenue guidance is increased to $825 to $860,000,000 representing growth year over year of 44 to 51%.

Adjusted EBITDA and non GAAP EPS guidance have also been raised and Nicole will go into more detail on this shortly. During the quarter, we completed the second $250,000,000 share repurchase tranche of our authorized $750,000,000 share repurchase plan. I’m pleased that we also initiated our third $250,000,000 share repurchase program under the approved $750,000,000 plan. Importantly, the strength of our revenue growth and the resulting strong cash generation enable us to be able to add this additional $250,000,000 of share repurchases while being able to pursue our M and A goals. With regard to M and A, we are continuing to focus on identifying new drug delivery platforms where their business model results in long durable revenue streams such as through royalties and where we see the opportunity to license the technology to multiple pharma partners.

We heard your leverage and we are seeking deals that can be accomplished without the need for significant increase in net debt to EBITDA leverage. I’ll move now to slide four. On the first quarter call, I highlighted multiple catalysts for our current portfolio, which had just occurred or which we are expecting throughout the year that will drive incremental strong revenue and EBITDA growth for multiple years to come. There are now 14 catalysts, of which I am pleased to note 11 have already occurred. While I will highlight these exciting growth catalysts in more detail as we review each product, I want to highlight and emphasize how each catalyst represents a meaningful revenue growth inflection for our royalty revenue.

Let me begin with a new product approval and a new royalty revenue stream, which was for Ribrovant subcutaneous in Europe in April. Johnson and Johnson has commented on the critical role that subcutaneous Ribrovant is playing in achieving their ambitions to grow Ribrovant to become a $5,000,000,000 brand. There are two recent first time approvals in a major region, specifically for Opdivo subcutaneous in Europe and for Vazda Hertullo in chronic inflammatory demyelinating polyneuropathy or CIDP also in Europe, both of which occurred in the second quarter and which represents additional revenue inflecting opportunity as adoption grows in Europe. There have been five new indication approvals. Let me highlight DARZALEX subcutaneous, which gained new indication approvals in smoldering multiple myeloma and in a new frontline indication in Europe, which expands their TAM in patients early in the disease and provides a meaningful new growth opportunity and revenue inflection opportunity to Halozyme.

Another new indication approval was the Vagart Hetulo prefilled syringe, which we know is already contributing and creating an inflection in the growth of Vyvagart Hetulo after just one quarter. And I will close on three major reimbursement milestones, which have recently occurred, including FEZCO’s reimbursement in China and permanent J codes added for Ocrevizinuvo and Opdivo Quantych, all of which add to and will expand our opportunity, adoption, and create royalty revenue inflections. In our history as a company, we have never had such a broad and meaningful set of growth catalyst, creating new additional incremental royalty streams and revenue inflection across so many products. These catalysts extend beyond supporting our growing commercial success, but also reflect the important role our enhanced technology is playing in significantly enhancing patient access, improving convenience for patients and addressing unmet patient needs. I’ll now focus on the three blockbuster products that are driving our remarkable current growth, starting with DARZALEX, which is shown on Slide five.

Johnson and Johnson reported strong second quarter results for DARZALEX with revenue increasing almost 22% to $3,500,000,000 in the quarter. Growth was driven by share gains of approximately four points across all lines of therapy and almost eight points in the frontline setting in addition to market growth. I want to highlight two critical points here. Firstly, the subcutaneous delivery of DARZALEX with ENHANZE has reached 96% conversion in The United States with a similarly high conversion rate outside The United States, meaning that it is a subcutaneous treatment version on which Halozyme receives a mid single digit royalty that is driving and benefiting from the strong growth I just mentioned. And secondly, quarter after quarter, Johnson and Johnson has commented on the robust share gains for DARZALEX subcutaneous in the frontline setting.

This is important as frontline patients as a whole have a longer survival and often a longer duration of treatment compared to the later line patients. The increased penetration in frontline is what is driving today’s strong growth and we project that it will continue for many years to come. Moving now to the recent catalysts that provide new opportunity and growth. DARZALEX subcutaneous recently received two new approvals in Europe. The first is for subcutaneous DARZALEX as part of a quadruplet regimen for newly diagnosed patients regardless of transplant eligibility, and the second is for high risk smoldering multiple myeloma.

The approval in high risk smoldering multiple myeloma was based on the phase three Aquila study, which showed a significantly reduced risk of progression to active multiple myeloma or death by fifty one percent compared to the current standard of care, which is active monitoring. The new indication addresses a longstanding unmet clinical need and marks a critical advancement in the early intervention of the disease for those who are at high risk. To help you dimensionalize this opportunity, in Europe in 2022, approximately thirty five thousand patients were diagnosed with multiple myeloma, often fifteen percent had smoldering multiple myeloma. For those with high risk smoldering multiple myeloma, half will progress to multiple myeloma within two years. For these patients, this approval for DARZALEX subcutaneous marks the first ever approved therapeutic intervention and the hope that progression to full blown multiple myeloma can be slowed.

Turning to The US regulatory approval status, in May, Johnson and Johnson announced the US Food and Drug Administration Oncologic Drug Advisory Committee voted in favor of the benefit risk profile of DARZALEX FASPRO for the treatment of adult patients with high risk smoldering multiple myeloma. The protection from analysts for DARZALEX is approximately $18,000,000,000 in sales in 2028 and Halozyme will earn royalties in DARZALEX with ENHANZE through 02/1932. Turning to our second blockbuster, Roche’s FSGO, which is shown on Slide six. FSGO, which is the combination of Perjeta, Herceptin and ENHANZE, represented the leading growth driver in Roche’s pharma portfolio with first half twenty twenty five revenue of CHF1.2 billion or approximately US1.5 billion dollars reflecting a 55% year over year growth. There was strong uptake across all regions with the global conversion from Perjeta to FSGO at 46% across 78 launch countries, which increased from 58 launch countries in the first quarter.

The convenience of FEZCO was also reinforced in April with a CHMP recommendation for European label expansion allowing administration outside of clinical settings, such as at home by a healthcare professional once safety has been established. This label expansion represents another growth catalyst for FEZCO. Roche project conversion from Perjeta will continue bringing an improved treatment experience for patients and the potential to significantly reduce treatment administration costs. We’re pleased with FASCO’s increasing reach and the impact of our enhanced technology platform with royalties at the full mid single digit rate through 02/1930. Let me move now to Slide seven.

Our partnership with Ergenx reflects a shared mission to provide innovative new treatment options for patients globally. The success of VIBORT and of VIBORT HYTULLO, which is a subcutaneous formulation with ENHANZE, are a great demonstration of how innovation can support patient outcomes. Wegart Hytrulo continues to be a key driver of the exceptional growth of Wegart total sales, which increased 97% year over year in the second quarter to $949,000,000 Fivegart Hertullo is now approved in The United States and Europe in two indications, generalized myasthenia gravis and CIDP. The subcutaneous formulation with ENHANZE has been essential to broaden Five Heart’s reach to gain new prescribers and new patients in both indications. And the prefilled syringe for subcutaneous delivery, which is also enabled by ENHANZE, is playing a key role in reaching even more patients earlier in the treatment paradigm.

I’ll begin with generalized myasthenia gravis and provide some more details. Argenx reported a strong quarter in generalized myasthenia gravis, marking the fourteenth quarter of consistent growth. The launch of the prefilled syringe is helping argenx reach new gMG patient segments, particularly those who have previously been out of reach for the HCP administered option. Argenx further commented that they see that Mycenaegravis total addressable market to be sixty thousand patients in The United States, which is significantly higher than the initial estimates at launch, which were of seventeen thousand patients. This increase is driven by the potential addition of seronegative myasthenia gravis and ocular myasthenia gravis indications, plus the availability of biologics adding twenty five thousand patients to the addressable population.

The prefilled syringe is emerging as a key differentiator that will help increase penetration into this additional twenty five thousand patient opportunity. I’ll turn now to CIDP. As of the June, Argenx reported over two thousand five hundred CIDP patients had been treated globally with Bygone hadrulo. A majority of these patients are in The United States. Argenx also noted that the launches in Japan and Germany are off to a fast start.

This momentum was driven by the unmet need, meaningful outcomes driven by the safety and efficacy profile and the availability of the prefilled syringe. With an estimated 12,000 patient population, there is significant growth opportunity ahead in CIDP. Recall only Viagra Hertullo with ENHANZE is approved to treat CIDP, so 100% of sales are subcutaneous on which Halozyme receives a mid single digit royalty. Moving now to the prefilled syringe, which was approved in The United States and Europe in the second quarter. Argenx on their second quarter call commented that the introduction of the prefilled syringe led to a notable increase in demand.

In The United States, Argenx reported that prefilled syringe drove record patient adoption with fifty percent of prefilled syringe users being entirely new to the brand and the rest switching from vial or IV. The prefilled syringe also broadened the prescriber base with over 1,000 physicians writing prescriptions in the first quarter of launch, fifteen percent of whom were first time prescribers of any WeiGart product presentation. This really is a testament to the innovative technology, convenience of treatment and suggests that the prefilled syringe is a long term growth enabler for all current and future indications for Weibar Hertullo. Weibar Hertullo is a prime example of a durable contributor to our long term financial expectations with analyst projections of $7,000,000,000 just in myasthenia gravisin CIDP and Halozyme earning royalties through the early twenty forties. Now in addition to these three blockbusters that are driving our growth to date, have four recently launched products with ENHANZE, Ocrevus Inuvo, Tecentriq Hibriza, Opdivo Quantij and Ribrovant Subcutaneous, which are still early in their launches and will become more meaningful contributors in 2026 and beyond.

I’ll now move to Slide eight and begin with Ocrevus. Roche reported continued good momentum for Ocrevus with total revenue increasing 8% to CHF3.5 billion or approximately US4.4 billion dollars in the 2025. Roche recently affirmed that they are confident in their outlook for Ocrevus to grow high single digits in 2025. Ocrevus Inuva with ENHANZE was approved in 2024 and allows for an approximately ten minutes subcutaneous injection, which compares with multiple hours that is typically required for the intravenous administration and monitoring time. In the second quarter, Roche reported that almost seven thousand patients have already been treated with the subcutaneous formulation globally.

With fifty percent of new Ocrevus Zenuvo patients in The United States and Germany being reported as being naive to the brand, Ocrevus Zenuvo is expected to continue to increase access and reach more patients. Existing large academic centers are adopting ZENUVO as a more convenient option for patients, while community neurologists with more limited IV capacity are seeing it open up the patient population they are able to treat. The ongoing launch of the subcutaneous formulation with ENHANZE is expected to continue to accelerate in The United States following the permanent J code, which was granted on April 1. We look forward to increasing adoption of subcutaneous coming from both switches from the IV formulation and from new to brand patients. The total brand opportunity for Ocreviz is projected by analysts to be $10,000,000,000 in 2028 and Halozyme will earn royalties on the subcutaneous formulation at its full mid single digit rate until 2030 and at a step down rate until at least 02/1934.

I’ll move now to Roche’s Tecentriq Cabrizo with ENHANZE. Tecentriq Cabrizo was approved in The United States and Europe in 2024 for all of the IV indications and the ENHANZE enabled formulation offers patients and providers with a more convenient seven minute subcutaneous injection. Roche has previously commented that it is their strategy to convert the IV to subcutaneous use. Tecentriq represented CHF1.7 billion of revenue in the 2025. Looking forward, analysts project revenue of approximately $4,500,000,000 in 2028.

Halozyme will earn royalties on net sales of the subcutaneous formulation at its full mid single digit rate until the 2040s. Now moving to brismara scrub Opdivo subcutaneous with ENHANZE, which was granted FDA approval at the 2024 and approval in Europe in May. BMS recently reported that the early feedback in The US is encouraging with the three minute subcutaneous treatment saving patients, caregivers, and providers time while also improving clinic efficiency, increasing patient comfort, and reducing treatment complexity. Additionally, PurePort procedures streamline care, allowing physicians to treat more patients. In the second quarter, Opdivo global sales were approximately $2,600,000,000 up 7%, driven primarily by demand.

BMS reported that The U. S. Launch of QUANTIG is progressing well with sales of approximately $30,000,000 with the use across all indicated tumor types. The permanent J code that was received on July 1 will support additional conversion. The strong year to date performance of Opdivo plus Opdivo Qantas are now projected to result in mid to high single digit growth of global Opdivo sales for the full year.

Analysts project total brand sales of 9,500,000,000 in 2028. I’ll move now to Johnson and Johnson’s Riborvant subcutaneous, which represents our tenth approved partner product. Ribrovant subcutaneous co formulated with ENHANZE was approved in Europe in April 2025 for use in combination with lisatronib for the first line treatment of adult patients with advanced EGFR mutated non small cell lung cancer. The subcutaneous delivery with ENHANZE reduces administration time from multiple hours to minutes and results in a fivefold reduction in the potentially serious adverse event of infusion related reactions when compared to the IV formulation. Furthermore, in an exploratory analysis, the subcutaneous formulation improved overall survival compared to the IV formulation.

In the second quarter, Johnson and Johnson reported Ribrovant revenue of $179,000,000 representing an increase of over 100% year over year and growth of approximately 27% sequentially, which was driven by continued strong launch uptake. There were share gains in both first and second lines of treatment and consistent growth in intent to prescribe. Ribrovant subcutaneous with ENHANZE is currently under FDA review in The United States. Our 10 launch products are on track to deliver over $1,000,000,000 in royalty revenue, now possibly even before 2027. Recall that ten years ago, I made the projection that we would achieve $1,000,000,000 in royalty revenue in 2027, and we are delivering according to this guidance.

Notably, we also project all products will continue to generate royalties to at least 2,030 and that many are expected to continue into the 2040s. On Slide nine is an overview of our pipeline, which includes a total of nine product candidates and highlights multiple future potential new growth drivers and royalty streams that I will remind you are not included in our multiyear royalty guidance. Bristol subcutaneous nivolumab plus raletinib and Takeda’s TAK-eight eighty one are the first potential new royalty revenue growth drivers with potential to launch in the next two years. Both are progressing in Phase three. In addition, we have one product in Phase two testing and six products that are in planning or in or have completed Phase one studies.

This includes ARGX-two thirteen, ARGX’s next generation FcRn blocker, which recently started a Phase I study. We expect two additional new target Phase I trial starts, one this year and one that has now moved into 2026. Now also adding to our new growth will be new nominations and new deals. Our new partner discussions with ENHANZE are progressing well, and we are on track for at least one new ENHANZE deal announcement this year. Our conversations range from approved IV treatment where the partner wishes to move to subcutaneous, developmental IV assets where the partner wishes to move to subcu for an improved treatment patient experience, and products that are already subcutaneous, where the goal is subcutaneous extended dosing, also for improved patient experience, but also improved adherence and compliance.

Let me now turn to our auto injector business, which consists of two partnered products, Teva’s EpiPen and their version of teriparatide, plus the Attrus’ theatrical, which is in development with our small volume auto injector for the prevention of myocardial infarction. As announced on our Q4 twenty twenty four call, we were pleased to have signed a development agreement for our small volume auto injector with a current partner. We expect to enter clinical testing with this partner in 2026. We also announced a high volume oxygen detector development agreement also with the current partner on our first quarter twenty twenty five call, and we are projecting to conduct a human factor study on usability by the end of this year. In parallel, we have been investing in advancing our high volume devices for clinical readiness.

We expect our five ml high volume auto injector to be ready for use in clinical human studies in the fourth quarter. In addition, the updated design of our 10 ml high volume auto injector will be ready for partner testing in a non clinical setting also in the fourth quarter. And we’re continuing to seek new partner agreements for both the small volume and the high volume auto injectors, where I’m pleased to say we’re hearing consistently from pharma that there is a clear goal to enable more and more at home delivery of biologics by the patient. I’m now pleased to turn the call over to Nicole.

Nicole LaBrosse, Chief Financial Officer, Halozyme: Thank you, Helen. Our outperformance in the second quarter reflects the growing momentum in the business, supporting another raise to our 2025 financial guidance. Total quarterly revenue increased by 41% with $2.00 $6,000,000 in royalty revenue increasing 65 percent. Adjusted EBITDA growth of 65% once again outpaced top line growth with high margin royalty revenue contributing to the $98,000,000 in free cash flow in the quarter. Moving to Slide 10.

In the second quarter, we completed the $250,000,000 share repurchases announced in May 2025. Given our expectation for continued strong cash generation, we have allocated an additional $250,000,000 to share repurchases. Of this third and final tranche of our current $750,000,000 approved plan, 53,500,000.0 was deployed in the second quarter, bringing our total share repurchases in the second quarter to $303,500,000 This brings total share repurchases since 2019 to more than $1,850,000,000 reflecting 117% of our cumulative free cash flow during that period. We continue to balance our use of capital with a focus on evaluating M and A opportunities to complement our strong organic growth profile while remaining disciplined about our net leverage. Let me now turn to our detailed second quarter results on Slide 11.

Revenue grew 41 to $325,700,000 compared to $231,400,000 in the prior year period. Royalty revenue of $205,600,000 increased by 65% from $124,900,000 in the prior year period. The continued commercial success of subcutaneous DARZALEX and FEZZCO and the robust growth of Vipcart Hytrulo contributed to the higher than expected royalty growth. Product sales of $81,500,000 increased by 3% from $78,900,000 in the prior year period, mainly driven by higher proprietary product sales. Collaboration revenue of $38,600,000 an increase of 40% from $27,500,000 in the prior year period, reflect the milestone recognition of the approval and EU launch of Ribrovant SC in April and a milestone recognized for the EU approval of Opdivo SC.

Research and development expenses were $17,500,000 compared to $21,000,000 in the prior year period. The decrease was primarily due to lower compensation expense driven by resource optimization and labor allocation initiatives, offset by timing of planned investments in Enhance related to the development of our new high yield rHuPH20 manufacturing process. Selling, general and administrative expenses were $41,600,000 in the quarter, up from $35,700,000 in the prior year period, primarily due to increased compensation expense and consulting and professional service fees. Adjusted EBITDA increased by 65% to $225,500,000 from $137,000,000 last year. GAAP diluted earnings per share was 1.33 and non GAAP diluted earnings per share was $1.54 This is compared with GAAP diluted earnings per share of $0.72 and non GAAP diluted earnings per share of $0.91 in the 2024.

We continue to maintain a strong balance sheet with cash, cash equivalents and marketable securities of $548,200,000 on 06/30/2025 compared to $596,100,000 on 12/31/2024. The decrease was primarily a result of share repurchases, offset by an increase in cash generated from operations. Our net debt position was $977,000,000 with a net leverage ratio of 1.2 times. Turning now to slide 12 and our updated 2025 guidance. We are excited to be able to raise our guidance for the second time this year.

We now expect total revenues of $1,275,000,000 to $1,355,000,000 representing year over year growth of 26% to 33% driven by an increase in projections for royalty revenues. Royalty revenue of $825,000,000 to $860,000,000 representing year over year growth of 44% to 51%. As Helen touched on, we expect DARZALEX SC, FESGO and Vivint High Trullo to drive the strong expectations with Vivint High Trullo being the largest royalty dollar growth driver. Product sales have not changed at $340,000,000 to $365,000,000 representing year over year growth of 12% to 20%. Collaboration revenue is also maintained at $110,000,000 to $130,000,000 We expect adjusted EBITDA of between $865 and $915,000,000 representing year over year growth of 37% to 45%, reflecting high margin royalty growth coupled with flat operating expense from our continued focus on operational efficiency and non GAAP diluted EPS of $6 to $6.4 representing year over year growth of 42% to 51%.

As you refine your models, I’d also like to reiterate the following: We expect collaboration revenue for the rest of the year to be more weighted in the fourth quarter. We expect product sales for the rest of the year to also be more weighted in the fourth quarter, with quarterly sequential growth in each quarter. For royalties, we expect quarterly sequential growth for the remaining quarters in the year. With that, I’ll now turn the call back over to Helen. Thank you, Nicole.

It is certainly an exciting time

Helen Torley, President and Chief Executive Officer, Halozyme: in Halozyme’s history as we continue to achieve new record revenue and earnings growth. With 14 catalysts for growth now realized or on the near term horizon, we have even greater conviction and line of sight in the durability of our revenue streams and the expanding opportunities ahead. Our success would not have been possible without the incredible dedication of our employees and the trust and collaboration of our valued partners. And with that, operator, we are now ready to open the call for questions.

Kaelin, Conference Operator: Your first question comes from the line of Karina Chen with Wells Fargo. Your line is open.

Nicole LaBrosse, Chief Financial Officer, Halozyme: Hi, this is Serena on for Mohit Bansal.

Serena: Thanks for taking our question and congrats on the quarter. Can you help us understand the status of the IP litigation with Merck? We saw that with the patent grant review being instituted, but just wondering like what are

Nicole LaBrosse, Chief Financial Officer, Halozyme: the next steps and potential outcomes of the next decision? Thank you.

Helen Torley, President and Chief Executive Officer, Halozyme: Yes. So with regard to our litigation against Merck, this is the district court case that we have filed and we’re suing Merck for infringing 15 of our MDAZA patents. We do not yet have a scheduling order from the court that would set up the schedule for the proceedings, but we do expect to receive that in the next couple of months.

Tram Bui, Vice President of Investor Relations and Corporate Communications, Halozyme: Okay. And then just wondering,

Nicole LaBrosse, Chief Financial Officer, Halozyme: I think the PGR might be a separate process, but do you

Serena: have an idea what the timeline is there?

Helen Torley, President and Chief Executive Officer, Halozyme: Yes. With regard to the PGRs, there have been four PGRs filed by Merck that have been instituted by the Patent Office. And all of these have been given a hearing date that is set for March 2026. We anticipate that the first decisions on the issues that are common to all of those four PGR petitions will occur on 06/02/2026. So in terms of the timeline, that’s when the final adjudication on these first four invalidity challenges that were brought by Merck will be adjudicated.

There remain several other PGR petitions that are still under review by the PTAB at this time, but you’ll start to get insights next year.

Nicole LaBrosse, Chief Financial Officer, Halozyme: That’s helpful. Thanks so much.

Helen Torley, President and Chief Executive Officer, Halozyme: And I’ll just say we continue to be very confident in the fact that we will prevail on these validity issues in all of the PGRs and that Merck will be signed to be infringing, but we just have to go through this entire process.

Kaelin, Conference Operator: And your next question comes from the line of Sean Layman with Morgan Stanley. Your line is open.

Sean Layman, Analyst, Morgan Stanley: Good afternoon, Helen. Congratulations on some very strong results. Your crystal ball seems to working pretty well. On the regulatory front, you just there’s been quite a few moving pieces over the last few months, a lot of scuttlebutt on your stock a few months back with respect to certain issues, CMS draft guidance, etcetera. But as you sit today, what’s your confidence that we’re going to see no change that will be impactful on the regulatory front?

Helen Torley, President and Chief Executive Officer, Halozyme: Yes. So I’ll start with the IRA, which as you rightly say is something that is did cause a little bit of commentary a few weeks ago. I can say that on the IRA and this is related to fixed combinations of two active ingredients where for the Part B guidance, was some slightly different wording that was proposed. We’ve been very active and have submitted a common letter to CMS that lays out how the draft B policy as written is flawed in both a policy and a legal basis. And very importantly, we laid out all of the clinically meaningful benefits that subcu delivery with ENHANZE has brought to patients, which is one of the key areas that we know CMS was asking for feedback on.

We know that many other groups have done the same, Sean, very similar arguments that they arrived at and we’ve been very active meeting with the OMB, also with members of Senate staff and Congress to articulate these arguments and why there really there should be no change in the definition of fixed combination between the Part D guidance, has been in play for the last two rounds of IPAY Part B. Now we believe it’s the fall when the final guidance will be there and we believe we have very compelling arguments and that we will prevail and there being no changes with regard to that. I think that’s the only with the regulatory one we’re talking about, Sean. Is there anything else you wanted to get our feedback on?

Sean Layman, Analyst, Morgan Stanley: On a separate topic, if I may, just on the that’s great on the regulatory front, appreciate it. But on the setting of guidance front, congratulations on the upgrade. But when how much do you use sell side as an input to setting guidance?

Nicole LaBrosse, Chief Financial Officer, Halozyme: Yes. Nicole? Yes. I can take that one, Sean. So when we look at our guidance, we’re really using the trends.

And at this time in the second quarter, we have a new data point that indicated new trends. And that’s why we’re so excited to share new full year projections for the full year. So we look at trends. We have inputs from our partners. We have our royalty reports that we get on a quarterly basis.

So all of that is really the data points that we triangulate to use to now give the updated view for the full year.

Sean Layman, Analyst, Morgan Stanley: Awesome. And just a very quick one, Nicole, the $250,000,000 buyback. Just remind us on the comfort levels or targets for gearing ratios.

Nicole LaBrosse, Chief Financial Officer, Halozyme: I’m sorry, what ratios?

Sean Layman, Analyst, Morgan Stanley: Sorry, for gearing or leverage or how much what’s sort of the debt equity balance that you like to keep on the balance sheet?

Nicole LaBrosse, Chief Financial Officer, Halozyme: Okay. So we do have a very nice leverage ratio at the moment. We’re just at about one time. We are very committed to continuing to use our capital for share repurchases as well as using it for investing in the business and for M and A. And so we do see that we have room.

We can increase our leverage, especially if we found the right opportunity for M and A. We really like around three times leverage if we were in that type of situation. And so because of our robust cash flow, we really have all of those opportunities available to us to continue to use cash and keep a very nice net leverage ratio.

Sean Layman, Analyst, Morgan Stanley: Wonderful. Thank you, That’s all I have for now.

Kaelin, Conference Operator: And your next question comes from the line of Jason Butler with Citizens JMP. Your line is open.

Serena: Hi, thanks for taking the questions and congrats on a strong quarter. I’m wondering if I could maybe ask you to expand a little bit on the guidance and longer term guidance. Helen, you pointed to reiterating on track to hit that $1,000,000,000 in royalty revenue. If you take Nicole’s comments that you’ll see expect to see sequential increases in royalties in the second half of the year, it looks like you’re going to end up annualizing in fourth quarter at a level well above your guide at the upper end of the year your guidance range for 2026. Just any comments there on the potential to update the longer term guidance ranges?

Nicole LaBrosse, Chief Financial Officer, Halozyme: Yes. Thanks, Jason. So we do see great trends into 2025. Our practice is during the calendar year as we have these new data points, we do update the current calendar year. Subsequent years in those guidance updates, we do once a year and at the start of the year.

So more to come next year on that.

Serena: Got it. And then maybe just, Helen, on the Acrivus launch, anything you can say about where patients are coming on to drug? Is it new to brand patients versus switches? Or is there a waiting between the two?

Helen Torley, President and Chief Executive Officer, Halozyme: Yes. What Roche has commented on is the indicator there are about seven thousand patients globally who have started over the subcu, which I think is excellent obviously adoption as we expected given the ten minute subcu injection versus the many hours for the IV. They have commented that about fifty percent of patients in The U. S. Are coming on NutraBrand.

So doing exactly what they hoped, which the availability of subcu would expand the number of doctors and patients who have access to the drug. And about fifty percent of patients are coming from IV switch. So exactly on track with what they had hoped to see with the launch with this very nice expansion in the total market and sales for Ocrevus over time.

Serena: Great. And then just last one for me. You mentioned that the high volume auto inject will be ready for partners to start working with later this year. What’s the interest level right now? Or do you have people lined up waiting for that device?

Helen Torley, President and Chief Executive Officer, Halozyme: Yes, Jason, can comment that we’re in multiple discussions on this and they’re all at different stages as you would imagine with any of these licensing conversations we talk about. We have the current partner who has signed the development agreement with us is continuing to advance with us towards that development and additional testing of the high volume auto injector. And we have other ones who are waiting to see and test themselves this new prototype that we’ll have for the high volume auto injector. So definitely strong interest. And I did say in my remarks and I just want to underscore it that in areas like inflammation and immunology, neurology, nephrology, there has been a concerted effort by companies to get products that can be delivered at home by the patient.

It’s recognized particularly for those indications that’s just the way of the future. The government as an example in terms of the outpatient payment schedule commented that too many drugs are being delivered in hospitals and there’s a real push for this. So we’re definitely seeing a very nice response to our auto injectors as the companies are looking to get more and more drugs into the patient’s home delivered by the patient themselves.

Serena: Great. Thanks for taking the questions.

Kaelin, Conference Operator: And your next question comes from the line of Brendan Smith with TD Cowen. Your line is open.

Brendan Smith, Analyst, TD Cowen: Great. Thanks for taking the question guys. Really congrats on the quarter. It’s great to see. I wanted to first ask maybe actually related to the CMS conversation from earlier.

Can you speak just briefly to some of these next gen assets that you have advancing through the clinic? Think you highlighted them on slide nine. And really just how many of those are essentially leading more or less with versus maybe a slightly older strategy of bridging from a commercial IV to a subcu like J and J did with DARZALEX? Just trying to get a sense of realistically how many of the next wave of inhaled assets would or would not potentially be impacted by whatever CMS decides.

Helen Torley, President and Chief Executive Officer, Halozyme: Yes. Thanks for that, Brendan. And I will say that as we do look towards that our pipeline, if you like, we the most advanced asset there is relatlimab with OPDIVO. Now that was approved in IV just a couple of years ago. So even in that case, companies are moving pretty fast with their subcu.

But for the rest of the products in that, you make a great point that the majority of those are either subcu only or doing subcu and IV in development together. Such that there will be not much space between an IV launch and a subcu launch or there will only be a subcu launch. So the majority is definitely going in that direction. And I think that’s pretty in line with what I mentioned about companies recognizing at home delivery is the way to go in conditions. And in that particular portfolio, we’ve got conditions like Alzheimer’s, HIV, autoimmune diseases.

These are all areas where we’re seeing that move towards patient self delivery or at least in the home. So the majority are going to be subcu at the start or subcu very shortly after the IV launch.

Brendan Smith, Analyst, TD Cowen: Got you. Okay. Great. Thanks. And then, just maybe quickly, have you heard from or coordinated with J and J at all, just about what it would potentially mean to try and appeal the CMS for some of these biosimilar related exemptions, maybe a la STELARA next year if DARZALEX does wind up named in in early next year, after CMS draft clarification of that?

Nicole LaBrosse, Chief Financial Officer, Halozyme: Yeah. No. No. We we

Helen Torley, President and Chief Executive Officer, Halozyme: have not discussed that, specific, topic with J and J. One thing, Brandon, I just do want to bring up, with the One Big Beautiful Bill Act, that expansion in the One Big Beautiful Bill to have drugs that have more than one orphan indication and have those drugs excluded from the IRA, we believe has the potential to be impacting DARZALEX IV inclusion. The two indications that DARZALEX IV has, which is for multiple myeloma and for amyloidosis were both designated by the FDA as orphan drugs. And the way the one big beautiful bill, reads, that would mean that, DARZALEX would not be included as an IV, in the IRA because it’s only an orphan drug.

Brendan Smith, Analyst, TD Cowen: Got it. Okay. All right. Thank you very much.

Kaelin, Conference Operator: And your next question comes from the line of Jessica Fye with JPMorgan. Your line is open.

Adam/Mitchell Kapoor, Analyst, JPMorgan/H.C. Wainwright: Hello. This is Adam on for Jess. Thank you for taking our I do apologize if you mentioned this, but when could we expect more clarity on halo driving royalties associated with the MDACE patents? Yes.

Helen Torley, President and Chief Executive Officer, Halozyme: Thanks for that question. So the key place that will be fully resolved, it could happen at any time if Merck chose to settle and sign a license with us. And historically that does happen as these types of infringement cases are going on. But obviously that’s an uncertain timeline. The second would be at the end of the district court case.

And assuming success for Halozyme, which obviously we believe we will win it because we do believe very strongly that Merck is infringing. Now we are awaiting a date for the district court case that has not been given yet. And we do expect that to be a process that will take a couple of years. So there’s no clear timeline, Adam, but I would track two things, potentially Merck settling because of the strength of our case or the second one would be upon our success going through the district court case, which would be several years from now.

Kaelin, Conference Operator: And your next question comes from the line of Michael DiFior with Evercore ISI. Your line is open.

Michael DiFior, Analyst, Evercore ISI: Hi guys. Thanks for the questions and congrats on all the continued progress. Two for me. Just one revisiting the Merck litigation. So with multiple PGRs now instituted and others potentially likely to file on similar grounds, how should we think about the likelihood of or timing of a settlement?

And do you believe that the expanding PTAB docket strengthens Merck’s hand? And I have a follow-up.

Helen Torley, President and Chief Executive Officer, Halozyme: Yes. So with regard to the settlement, obviously is in Merck’s hands, Mike. We believe very strongly that Mark is infringing our patents and the only place that, that infringement will be resolved is going to be in the district court case. And we have patents that are part of the district court case that are not subject to the PFAP process. And so really I think will just come down to when Merck decides they want to settle it, they’re going to do so before we go through that whole district court case.

But that is the ultimate arbiter of this infringement.

Michael DiFior, Analyst, Evercore ISI: Got it. That’s helpful. Separately, just curious if deal conversations have slowed down in light of the pending final Part B guidance documents. Obviously, this could swing either way. Have you sensed that company just want to wait this out and see what happens?

Helen Torley, President and Chief Executive Officer, Halozyme: Haven’t. The IRA discussions have never been a big part of our sales pitch and never been a big part of the conversations to date. And so this draft Part B guidance is not impacting it at all Mike. And that’s probably because we are, as I mentioned a moment ago, talking with a lot of companies who are considering subcu delivery even as they’ve initiated their initial testing with the IV or they’re planning subcu right from the start. And so we definitely do have some conversations which are IV to subcu switch, but the wealth of opportunities and conversations are early use in consideration for subcu taking the whole IRA discussion as an irrelevant.

And so that is also why it’s not coming up.

Adam/Mitchell Kapoor, Analyst, JPMorgan/H.C. Wainwright: Got it. Thank you.

Kaelin, Conference Operator: And your next question comes from the line of Mitchell Kapoor with H. C. Wainwright. Your line is open.

Adam/Mitchell Kapoor, Analyst, JPMorgan/H.C. Wainwright: Hey, everyone. Thanks for taking the questions. And I’ll add my congrats on the quarter. And on that note, I would like to ask, this seems like it’s the third time raising guidance in 2025 when you include the increase during the multiyear guidance raise in January. It’s a nice trend for us, but we’re wondering how conservative or reasonable would you say the guidance is at this point?

Helen Torley, President and Chief Executive Officer, Halozyme: Yes. I’ll ask Nicole to address that, and then I’ll add my comment.

Nicole LaBrosse, Chief Financial Officer, Halozyme: Thanks, Mitchell. We do see and we’re excited to see that each quarter, really, what we’re seeing is a new latest trend point. And that trend point does identify for us what are the latest projections. And so what you see at each of those stages is us taking that data and using the latest data available to really support what we see for the full year. Just great examples of what we saw this quarter is DARZALEX outperformed for the quarter, really driven by the frontline setting.

We thought, for example, expanded in 20 new countries, and their growth remains really robust. And then again, the strong patient and physician adoption for Vipcar Heirolo in their launch of the PFS really supported our updated outlook. And again, that latest data point that gives us the conviction that we now have put out there for full year guidance for 2025.

Helen Torley, President and Chief Executive Officer, Halozyme: Yes. And I’ll just add, when we put our guidance in January, that is I’m highly informed by the guidance ranges that our partners all give us. And so we do take our judgment within those ranges they give us. And so I would say first quarter Q4 and Q1 reporting really does reflect that input we get from the partners. They definitely were seeing some acceleration and momentum.

Now I talked at the beginning of my prepared remarks about having achieved 11 of the 14 catalysts. Those kind of catalysts can be hard to predict exactly. But Nicole mentioned the prefilled syringe, we will say, Argenx itself said that, that was already impacting even after just one quarter. We are early in the launch in CIDP, that’s another example. And for DARZALEX, they just keep expanding into that frontline population.

And as I mentioned, those patients stay on therapy longer and so it has a compounding effect. And the longer we go, the more it’s going to compound. And so those are just some very exciting dynamics that I think in terms of what our partners projected for the year are even more to the upside than they had indicated to us based on the information they provided. So it is all good news. It’s never our intent to be conservative.

We like to guide us to what we believe is going to happen. But when you’re in this dynamic circumstance with lots of new catalysts, it’s hard to get them all exactly right. And we’re just getting a very nice benefit of the partners overperforming in many of the catalysts versus what they had anticipated.

Adam/Mitchell Kapoor, Analyst, JPMorgan/H.C. Wainwright: Definitely. That’s super helpful. And just one more from us. So it looks like Merck filed a couple of more PGRs since June. Can you provide your current outlook on this impact?

And why do you think they’re choosing these particular patents and continuing to file more instead of filing them all at once?

Helen Torley, President and Chief Executive Officer, Halozyme: Yes. As to their motivation for that, Mitch, I don’t The PGR process that can happen within nine months of a new patent being issued. And so what they’re looking at is they continued and this is work that this happens has been happening for the last ten years at Halozyme There are more patents filed and issued. And so they simply are looking at the new issuances and they have elected to challenge the validity of some of these.

Now we believe very strongly that these patents are valid and that the ultimate settlement of the PTAB will show that. They’re not having any impact on what is a very important thing, which is our district court case, which is not a question of the invalidity of patents, but their infringement of our patents. And no matter what happens in PTAB, we have patents that cannot be subject to challenge that we believe strongly demonstrate the infringement by Merck on our IP. So that’s how to think about both of those. So the district court case is obviously the key one for us to have eyes on.

And we’d expect Merck to continue, I believe, and news to continue on these PTRs. But we’re also very focused on the district court case.

Adam/Mitchell Kapoor, Analyst, JPMorgan/H.C. Wainwright: Great. Thank you, Helen and Nicole.

Helen Torley, President and Chief Executive Officer, Halozyme: Your

Kaelin, Conference Operator: next question comes from the line of Corinne Johnson with Goldman Sachs. Your line is open.

Corinne Johnson, Analyst, Goldman Sachs: Good afternoon. A couple from us. Maybe one, now we have a couple of neurology kind of launches underway and demonstrating pretty good uptake. I guess what are your thoughts on the pace and peak potential for conversion to subcu in these markets, perhaps just relative to the oncology business? And then maybe separately on the high volume auto injector, a human factor study you’re running with a partner by later this year.

I guess, should we expect this kind of, like, prework to be done more frequently with the auto injector deals? And maybe help us understand sort of whether human factor studies are going to be different from drug to drug or if that’s kind of auto injector specific?

Helen Torley, President and Chief Executive Officer, Halozyme: Yes. Thanks, Corinne. With regard to neurology launches, obviously, OCREVUS is off to a very And when you think about the value proposition here for patients just ten minutes versus many hours for the infusion and observation time for the IV, it definitely is one of the drugs where we think there will be a robust conversion driven by the patient factors, but also infusion suite capacity constraints and the cost of care globally. So that really does have all the hallmarks for being a very nice uptake.

And CIDP, I would consider another neurology indication and the great news with five gs had Trullo and CIDP of course is that that is all subcu. There is no IV five gs approval for CIDP. So that’s 100% of the sales mid single digit royalty on those. So I think we’re going to see very nice uptake overall in neurology and those two specific indications. On the high volume auto injector, so I think it’s going be different partner by partner.

One of the things in the human factor studies are very straightforward to do. Often it is on the usability of the device. They may have a patient population where they’re wanting understand how the patient uses the device and understand, is there a customization of something about the device that they want to test out before they would go into formal clinical studies. So they’re pretty straightforward, short types of things, but think about it more in terms of just testing and optimizing exactly the design that they want. And so I think sometimes some partners want that off the shelf, sometimes they want to do a bit of human factor testing.

It will be a mix. And

Kaelin, Conference Operator: this concludes today’s conference call. You may now disconnect.

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