Halozyme at Morgan Stanley Conference: Strategic Innovations in Drug Delivery

On Monday, 08 September 2025, Halozyme Therapeutics (NASDAQ:HALO) presented at the Morgan Stanley 23rd Annual Global Healthcare Conference. The discussion highlighted Halozyme’s advanced drug delivery platforms, focusing on robust revenue growth, strategic investments, and emerging market opportunities. The company also addressed macroeconomic factors and regulatory landscapes impacting its operations.

Key Takeaways

• Halozyme projects royalty revenues of $825 million to $860 million, marking a 44% to 51% year-over-year increase.
• Strong revenue growth is expected, with total revenue projected between $1.27 billion and $1.335 billion.
• Halozyme is actively exploring 30 potential areas for mergers and acquisitions to expand its drug delivery platforms.
• The company is leveraging artificial intelligence to enhance operational efficiency and regulatory processes.
• Merck litigation poses no risk to Halozyme’s ENHANZE® platform, with further updates anticipated soon.

Financial Results

• Total Revenue: Anticipated between $1.27 billion and $1.335 billion, driven by key products like Darzalex Faspro, Phesgo, and Vyvgart Hytrulo.
• Royalty Revenue: Projected to reach $825 million to $860 million, reflecting substantial growth.
• EBITDA Margin: Adjusted EBITDA margin is forecasted to be 73% to 75% by 2028.
• Share Repurchases: Since 2019, Halozyme has returned approximately $1.85 billion to shareholders.

Operational Updates

• China Market: Phesgo has received national reimbursement, and Vyvgart Hytrulo is approved for treating generalized myasthenia gravis and CIDP.
• Artificial Intelligence: AI is utilized to improve document management, regulatory signal detection, and business development screening.
• Vyvgart Hytrulo Prefilled Syringe: Launched in April, it supports a 20-second subcutaneous injection, broadening the prescriber base.

Future Outlook

• Long-Term Revenue: Halozyme anticipates sustained revenue growth well beyond the 2030s, fueled by increased interest in subcutaneous drug delivery.
• Additional Platforms: The company is evaluating 30 areas for potential M&A to enhance its portfolio.
• ENHANZE® Agreements: At least one new ENHANZE® agreement is expected to be signed this year.

Q&A Highlights

• Inflation Reduction Act (IRA): Halozyme suggests Part B guidance should align with Part D for fixed combination drugs.
• Orphan Drug Designation: The IRA’s impact on Halozyme is minimal due to clarity in orphan drug regulations.
• Merck Litigation: The litigation is separate from ENHANZE® and poses no risk, with updates on court scheduling expected soon.

For more detailed insights, please refer to the full transcript.

Full transcript - Morgan Stanley 23rd Annual Global Healthcare Conference:

Sean Lam, Head of the SmidtCap Biotech Equity Research team, Morgan Stanley: Good morning, everyone. Welcome to Morgan Stanley’s Global Healthcare Conference. I’m Sean Lam, the Head of the SmidtCap Biotech Equity Research team here at the firm. For important disclosures, please see Morgan Stanley Research Disclosure website at www.morganstanley.com/research-disclosures. If you have any questions, please reach out to your Morgan Stanley sales representative. For this session, we have Dr. Helen Torley, President and CEO, Halozyme Therapeutics. Thank you for your time today. Greatly appreciate you being here. Maybe just to set the scene a little bit, if you’d like to make some opening remarks, Helen, that’d be amazing.

Helen Torley, President and CEO, Halozyme Therapeutics: Yes, Halozyme is a biotech company, and we have a mission to help important therapies fit into the patient’s life rather than the recovery be impacted by some restrictive schedule of having to travel for treatment. We do that with two drug delivery platforms. The first is our ENHANZE® platform, which is based on hyaluronidase enzymes, which facilitate large volume delivery of biologics, delivering up to 15 mL in, inevitably, three minutes or 5 mL in just 20 seconds, as is the case with Vyvgart Hytrulo on the prefilled syringe that you may just have heard about. We also have autoinjectors, a small volume autoinjector, which delivers up to 2.25 mL in just seconds.

By bringing together the amazing technology of ENHANZE® plus our autoinjector technology, we have created the first ever high volume autoinjector that has been demonstrated to be able to deliver up to 10 mL of biologic in just 30 seconds. This is a very profitable business for Halozyme in terms of the fact that we earn milestones and royalties. That has resulted in Halozyme having not just a very high top line revenue growth this year, where we’re projecting $1.27 to $1.335 billion strong growth, primarily driven by our royalties, which we project this year at $825 to $860 million, which is a growth of 44% to 51% year over year, really being driven by three products that have been launched fairly recently. The first one is Darzalex Faspro, the second one is Phesgo, and the third one is Vyvgart Hytrulo from our partner argenx.

These three products are still making a remarkable difference in patient lives and leading to a lot of excellent growth at Halozyme. In terms of capital allocation, always an important decision when you’ve got a high cash flow business like we have. First and foremost, you invest in our business. Secondly, we’ve been returning capital to our investors through share repurchases. The third one, we have an ambition to add additional drug delivery platforms to continue to build on the excellent growth we’re seeing today with ENHANZE® and our autoinjectors and deliver that long-term, durable, high profitability growth.

Sean Lam, Head of the SmidtCap Biotech Equity Research team, Morgan Stanley: Wonderful. Thank you, Helen. Just some macro considerations that I’d like to start with. China’s biotech innovation, it’s really going hot. How do you think about Halozyme’s competitive positioning here? Are there opportunities there? How does it influence, if at all, your R&D and business development strategy?

Helen Torley, President and CEO, Halozyme Therapeutics: Yes, I mentioned we’re focused on subcutaneous drug delivery, and that is something that is actually gaining traction globally. You can imagine that instead of lengthy, hours-long intravenous infusions, we’re facilitating simple, short subcutaneous injections in seconds to minutes. Certainly in China, we’re seeing that trend of people wanting subcutaneous therapy, which can perhaps be done in a doctor’s office instead of an expensive hospital infusion suite or even in the patient’s home. That’s a trend that is very much present in China. Just earlier this year, Phesgo, which is actually Roche’s product for breast cancer, it’s a combination of Perjeta and Herceptin, got national reimbursement. That actually led to very strong growth of Phesgo in the first and second quarter as China adopts and increases.

Other products that we have that have very recently been approved in China that we expect to grow in the same way once all of the reimbursement is in place would be Vyvgart Hytrulo for generalized myasthenia gravis and also for CIDP. China is very much another market that is seeing the benefit for the patient, for the healthcare system, and for the healthcare professionals of the short, simple subcutaneous injection.

Sean Lam, Head of the SmidtCap Biotech Equity Research team, Morgan Stanley: Thank you. A question on artificial intelligence. How do you currently leverage artificial intelligence or think about leveraging artificial intelligence in your business? How do you see it as a potential future disruptor?

Helen Torley, President and CEO, Halozyme Therapeutics: Yeah, we’ve certainly been embracing the innovation that comes with artificial intelligence, and it’s very much in our operations. Areas I can highlight that we’re seeing benefits already in terms of efficiency would be in improving document flow and regulatory signal detection in terms of safety, but also in our operations and manufacturing. The third one, we’re using it to accelerate our decision making as well in areas like business development screening. Certainly a huge benefit in terms of efficiency, and we’re just planning to keep expanding that with that focus on improving our operations.

Sean Lam, Head of the SmidtCap Biotech Equity Research team, Morgan Stanley: Wonderful. Thank you, Helen. There is a lot more debate in the market around this next question that I would use on the macro side. How much or how impactful, what’s been most impactful on Halozyme from the regulatory side? Would it be FDA, MSN, or TARIS?

Helen Torley, President and CEO, Halozyme Therapeutics: Yeah, I’m going to mention FDA, and it’s actually coming from a very positive place where we’ve seen a lot of very positive impact over the last years in the Food and Drug Administration and changes they’ve made. I’ll begin with when thinking about the ease and simplicity of getting a product approved with subcutaneous with ENHANZE®. Known for our partners, and I’ll use AbbVie or Bristol-Myers Squibb as an example, with a single study in renal cell carcinoma, the FDA granted them a very broad set of indications in multiple other solid tumors. I think that recognition as to how to streamline the development of important medicines has been very positive and welcomed change in terms of FDA mindset. I think it’s really just the beginning if we think about Commissioner McCary’s comments also about making drug development flexible and commonsense.

We plan to continue to engage with the FDA in further streamlining those efforts. I think that also, I’ll just comment that certainly for us and our partners, we’re finding everything proceeding according to the usual timeline. Nothing delayed, everything very much according to plan. We deeply appreciate that with some of the changes, no impact in how the regulators are interacting with us.

Sean Lam, Head of the SmidtCap Biotech Equity Research team, Morgan Stanley: Thank you, Helen. To get more Helen specific, how confident are you that the ENHANZE® will be treated favorably under CMS IRA and the guidance? How should we think about the steps unfolding to kind of clear that investment thesis over the next three to six months?

Helen Torley, President and CEO, Halozyme Therapeutics: Yeah, just a little bit of background context there. Under the Inflation Reduction Act (IRA), there’s an area of it that focuses on treating fixed combination drugs that are made up of two active ingredients as a separate drug from the individual ingredient. When the Part D guidance first came out, that was the language that was used there. Importantly, ENHANZE® is an active ingredient. It’s designated as such by the FDA. If you look at the labels of our products, it’s listed there as an active ingredient. Yet we have a separate BLA for Hylenex®, which is the rHuPH20 enzyme. The area that’s under comment at the moment was when the Part B guidance came out a few months ago.

While it continued to preserve the recognition of a product with two active ingredients as a fixed combination, it brought some questions for the community to comment on, does the active ingredient need to have a direct impact on the disease or does it have to have clinical benefit? We and many of our partners have actually commented to CMS with regard to the fact that the Part B guidance should be kept the same as Part D. There are a number of policy and legal reasons why that makes sense. Very importantly, if you think about the clinical benefit that is, and the IRA is looking to see clinically meaningful benefit, which the FDA describes as how a patient feels, functions, and survives, we’ve wrote many, many examples of how ENHANZE® subcutaneous delivery has done that.

Just to give a few examples, you often hear about infusion-related reactions with drugs. That sounds like, well, that’s just a side effect. It’s a side effect that makes a patient feel very unwell. It causes low blood pressure, headache, breathlessness, and it can lead to anaphylaxis and death. When we think about some of the drugs we work with, like Johnson & Johnson’s terrific drug for lung cancer called Amivantamab or Rybrevant with the IV, the rate of infusion-related reactions was 67%. It is reduced by a factor of five down to just 13% with subcutaneous. I think you’ll all agree that’s a clinically meaningful benefit for patients. Importantly, with Rybrevant also, there was an overall survival benefit in an analysis, an exploratory analysis that was done, another clinically meaningful benefit.

It’s been pretty common throughout all of our partner filings that the rate of serious and serious adverse events is also a lot lower with the subcutaneous. When we think about all of the clinically meaningful benefits, we feel very strongly that the language should be unchanged between D and B. We have written a comment letter. We have visited with the OMB to present those arguments. We have had conversations with CMS also about those arguments, also highlighting the reduced cost of care. We did an analysis in Medicare, and for subcutaneous therapy versus the IV, the average cost savings per year are between $12,000 and $56,000 per patient per year. If the clinical argument does not get you for CMS and for people who are worried about the cost of care, the clinical benefits in terms of cost of care are remarkable as well. Lots of arguments shown.

We very much hope that we do prevail on that. I’ll just mention one thing that’s also come out since then, though, that has the potential to impact Halozyme that was causing questions. That relates to what will happen with the orphan drug designation. If anybody was watching the one big beautiful bill, it actually did make it clear that if a drug has two orphan indications, it will be excluded from the IRA. That is relevant to Halozyme because Darzalex Faspro was one of the first drugs that we are involved in that could be up for inclusion in the IRA price negotiations. Both of the indications are orphan. Under the one big beautiful bill, that will no longer be included in the IRA for consideration. Also, Vyvgart Hytrulo. Naturally, the first indication for Vyvgart Hytrulo was an orphan as well. That pushes out the timeline for Vyvgart Hytrulo.

Obviously, an area we’re watching carefully, Sean, and we’re very hopeful that our arguments will prevail. Even beyond that, for Halozyme, the clarity in the orphan drug has also made the IRA a lot less relevant and impactful to Halozyme.

Sean Lam, Head of the SmidtCap Biotech Equity Research team, Morgan Stanley: Sure, that was a wonderfully full answer. If I can, I might have missed it a little, so full, but just can I push you on timing? Do you have a view on when this might get resolved?

Helen Torley, President and CEO, Halozyme Therapeutics: Yeah, there’s no official timing that comes out with a clock for this. Based on prior precedent of the time between the draft guidance and final, we would expect it in September or October. In the upcoming weeks, there will be the final guidance there.

Sean Lam, Head of the SmidtCap Biotech Equity Research team, Morgan Stanley: Wonderful. I guess on guidance, the company has raised guidance multiple times. Just remind us what have been the key factors behind driving such a big uplift in earnings expectations.

Helen Torley, President and CEO, Halozyme Therapeutics: Yeah, I mentioned in my introductory remarks what our updated guidance for the year is, but just to reiterate, for total revenue $1.27 billion to $1.325 billion. The key driver of that is the royalty revenue, which is growing remarkably to $825 million to $860 million this year. The key drivers of that are the three products that were launched in 2020 and 2023. These are products that we expect to continue to grow for multiple years to come. The first is Darzalex Faspro, which is obviously Johnson & Johnson’s terrific drug primarily for multiple myeloma patients. The subcutaneous version is now 96% of the use of that. All of this growth is subcutaneous. You may say, it’s already at 96%. Is this going to keep growing? Analysts project that Darzalex will grow from $13 billion today to $18 billion in 2028.

It’s doing that by continuing to increase its penetration into the frontline population. The frontline population is the largest population, so there’s obviously a lot of growth to come from that. The compounding effect of the fact that the frontline patients stay on therapy for many years is really, I think, what’s causing that accelerated growth over and above, frankly, what we had predicted for this year in terms of a very nice story there that’s going to continue to grow for years to come. Phesgo, I mentioned, is accelerating this year because of China reimbursement, but also launched in 20 additional countries in the second quarter, growing from 58 launch countries to 78. That’s going to continue to grow. The third one is Vyvgart Hytrulo, launched in CIDP, more recently launched in CIDP.

We’re very excited about the April launch of the prefilled syringe, which has got the formulation of Vyvgart Hytrulo with ENHANZE. Delivered subcutaneous in just 20 seconds because of the ENHANZE technology. That, based on argenx’s comments, is causing new physicians to come into the market to start using Vyvgart and more patients able to access the important therapy, being able to receive Vyvgart. That’s another driver of the growth. All three of those products are exceeding our initial expectations for this year, and that’s what drove the increase in guidance.

Sean Lam, Head of the SmidtCap Biotech Equity Research team, Morgan Stanley: Yeah, wonderful. We still have long-term guidance out there, 26 to 28, which hasn’t moved yet. I believe you’ll revisit that early in the new year and maybe sort of give us some comment on how to think about that.

Helen Torley, President and CEO, Halozyme Therapeutics: Yes, it was about 2017 where we gave a prediction of being able to achieve $1 billion in royalty revenue by 2027. I think based on my comments I’ve made, you realize probably that we’re probably going to achieve that a bit earlier. That does bode very well. In addition to these three products that we have, there’s also four additional products that we just launched in 2024 and 2025. Those are going to be beginning to contribute in 2026 and beyond and further fuel the strong growth. As you say, Sean, what we have tended to do is update the guidance during the year for any new insights. At the beginning of the following year, that’s where you’ll see us update the guidance. That will reflect the continued strength of Darzalex Faspro, Phesgo, and Vyvgart Hytrulo and our expectations for these four new launch products.

Sean Lam, Head of the SmidtCap Biotech Equity Research team, Morgan Stanley: Sure, thank you. This is one of the hot debates, and maybe you get tired of talking about it, but just sort of the long-term revenue projections, you know, going beyond 2030, and how should investors sort of think about that?

Helen Torley, President and CEO, Halozyme Therapeutics: Yeah, I think there’s two key trends that underpin our strong confidence in the durability of our revenues. The first is that secular trend that I’ve mentioned a couple of times, which is the increasing interest by pharma companies, but also healthcare systems and patients for subcutaneous drug delivery. We obviously are in a licensing business. We get many companies now coming to us saying, can you help us bring our products subcutaneous? Can you help us extend the dosing interval so it’s easier for patients to do this? There’s a real push for more and more therapies being able to be delivered at home. That secular trend is going to continue to have adoption of our current products, but allow us to expand our portfolio and add new royalty streams.

The second one is by combining a product with ENHANZE®, you can get new inventions, some new benefits that were unexpected for patients. I talked about Phesgo a moment ago, that five-fold reduction in infusion-related reactions that increased overall survival, both unexpected and unpredicted if you’re delivering a similar amount of the drug as with the IV. That results in new intellectual property for partners. For Halozyme, it also results in a longer duration of our royalty and very often can keep the royalty rates maintained at a mid-single-digit level. Those two combinations of the increasing trend of subcutaneous use and continued growth of the current products and new products and that durability of revenue, Sean, is what gives us confidence in very robust revenues continuing in 2030 and well beyond that.

Sean Lam, Head of the SmidtCap Biotech Equity Research team, Morgan Stanley: Sure, thank you. I sort of had this question later in my question list, but I think it’s kind of relevant now. When I look at modeling your business, and maybe I’m not the best modeler, but when I think about your, I’m not, but when you think about, I guess, sort of the gross margin, it seems sort of pretty stable. You don’t see too many changes there. You, versus a traditional, I’ll call it a traditional biotech company that’s heavily involved in drug development, then your R&D expenditure is probably light on versus a more drug development type company. You could argue on the SG&A front as well, like it’s your partners that really support the OpEx in some senses. What might get missed about your business therefore is the cash flow that’s being generated.

Even if you took this very pessimistic long-term view that maybe you apply a negative 100% terminal growth rate to Halozyme’s business, you look at the cash generation at that period of time, which on my math is much bigger than what the current market cap of the company is. If you stuck that at the bank and let it earn an interest rate, you’ve still got like long-term value. Are we thinking about the cash flow generating nature of your business in the right way? Is that the right way to think about it, that the cash that is coming out is going to present potentially that ongoing capital return story and that the business development opportunity is potentially numerous? Maybe talk us through those big strategic pictures.

Helen Torley, President and CEO, Halozyme Therapeutics: Yeah, I think it’s a great observation, Sean, that we have an unusual business model and a very highly leverageable business model because our role with our partners is very much advisory. We don’t have the R&D cost. We don’t have the commercialization cost, but we do participate in the upside of our partners’ commercial success with our royalties. As an example, our predicted adjusted EBITDA margin in 2028 is 73% to 75%, almost all of which is free cash flow to the company. It is a very cash flow positive company. In terms of how we plan to use that cash, we do invest in the business, as I mentioned earlier. We do use it to return capital to our shareholders, and we do want to build on the very strong revenue growth we have by adding new platforms.

I will just say, you know, you said even if you apply a negative terminal value to the company, we do, just to reiterate, because of the nature of the business and because of our contractual agreements, have strong royalty revenues continuing well past the 2030s. Just to kind of give a couple of examples, these co-formulation patterns that come because we find these innovations, these unexpected benefits, all of our royalty streams will go to at least 2030. Several will go into the mid-2030s and multiple go into the 2040s. You’re balancing a very strong cash flow business with long, durable revenues. It is a great story. Importantly, the opportunity now for us to use M&A to build on that very strong story to add new revenue streams on top of that, looking again for these more royalty-based businesses, which can be so highly profitable.

Sean Lam, Head of the SmidtCap Biotech Equity Research team, Morgan Stanley: Sure, thank you, Helen. Great answer. I think you’ve got 10 approved products, several more in development. How do you prioritize further pipeline investments?

Helen Torley, President and CEO, Halozyme Therapeutics: Yeah, I mean, the great news is based on our business model, Sean, we don’t really have a challenge with prioritization because it is not a capital-intensive business supporting ENHANZE®. This advisory nature that we have really means that our team, who are excellent and they work very closely with our partners, can support multiple partners at once. We can add new partnerships without having to expand a lot of people, as an example. Because it’s an established business, we don’t have a lot of capital investment at this stage. We are obviously continuing to make sure we focus first and foremost on our current business. Beyond that, we have the opportunity to return capital via share repurchases. Since 2019, we’ve returned about $1.85 billion to our shareholders with an average price of $33.72, really buying opportunistically.

We found that, and I find our investors very appreciative of just how successful we’ve been with share buyback. We also have retained enough capital for acquisitions. We’re very mindful of keeping our net debt to EBITDA leverage below 3% in terms of where we’re going. Today, we are sitting in the position of looking for additional platforms to acquire to add to our attractive business and can do all three at the same time because of the strong cash flow of the business.

Sean Lam, Head of the SmidtCap Biotech Equity Research team, Morgan Stanley: Wonderful. Jumping sideways a little bit, what lessons have you learned from the launch of Vyvgart Hytrulo on the prefilled syringe? Can it be applied to other drugs?

Helen Torley, President and CEO, Halozyme Therapeutics: Yeah, I think first and foremost, argenx has just done a super job with the entire launch, both in Johnson & Johnson and now looking at CIDP. This is a therapy that is transforming the lives of many patients who haven’t had terrific options up to this point in time. What the prefilled syringe launch has really just shown, not unexpectedly, is that patients are ready to embrace being able to treat themselves at home in the privacy of their own home, on their own time, and on their own conditions. The prefilled syringe, which includes the ENHANZE® technology to make it a simple subcutaneous injection, is allowing a 20-second subcutaneous 5 mL injection. Now a patient, and I think actually Carl mentioned this, that patient is able to, if they’re working, do it before they go to work. They don’t have that disruption.

They don’t need to be traveling to the doctor’s office or in the infusion suite. It’s just freeing and allowing patients to get back to their everyday lives. I do think that move in inflammation and immunology, neurology, nephrology, cardiovascular to more at-home care, we do see that as just being a great example for other companies to look at and follow and see how argenx is leading in being able to free the patient up even further from the burden of their disease. What the prefilled syringe has also done is expand the number of prescribers. Of the 1,000 people who have prescribed the prefilled syringe, 150 or 15% are new to Vyvgart Hytrulo. That is something that we are seeing with some of our other products.

The ability of the right delivery to expand the number of prescribers, I’m going to talk about Roche’s Ocrevus, where today the Ocrevus, which is a great treatment for multiple sclerosis, is a multi-hour IV infusion. The patient, it will take them their entire day. For the subcutaneous version, it’s given in just 10 minutes. Roche was hoping they would see with the launch and they’re seeing just like for Vyvgart Hytrulo is they are getting new prescribers because some doctors don’t have a setup or don’t want to get involved in IV infusions. Now the subcutaneous is so simple to give. They’ve seen that all of the people who have adopted the Ocrevus subcutaneous, 50% were brand new to using Ocrevus. Market expansion is the other thing I think that is very nicely demonstrated with Vyvgart Hytrulo’s prefilled syringe. I’ll say it’s happening with Ocrevus subcutaneous.

Subcutaneous in and of itself, it simplifies care, will expand the opportunity for pharmaceutical companies, and that’s the other very important lesson we want people to take from this.

Sean Lam, Head of the SmidtCap Biotech Equity Research team, Morgan Stanley: Sure. Do you get much inbound on the prefilled syringe, and the market expansion opportunities? Do you think it’s a fairly well understood part of the Halozyme story, or is it something that’s yet to come?

Helen Torley, President and CEO, Halozyme Therapeutics: It’s definitely growing. I mean, prefilled syringe just launched in April, and argenx talked about the results in their quarterly call. They were, I think, early. I do think companies are coming to terms with it. If a company is in inflammation and immunology, they’re following argenx, and they are talking about it. I don’t think everybody’s heard about it yet.

Sean Lam, Head of the SmidtCap Biotech Equity Research team, Morgan Stanley: Great. Thank you, Helen. What are the most promising areas of innovation with drug delivery platforms that aren’t beyond subcutaneous delivery? Maybe set the scene for us a little bit there.

Helen Torley, President and CEO, Halozyme Therapeutics: Yes, we talk about adding platforms to our remarkable business. We think about drug delivery and did a joint survey to say what else would be helpful. We actually came up with 30 different areas. I’ll mention a range of them just so you see the breadth of what we consider drug delivery and where we think there could be an opportunity for a similar business, which is where pharma and biotech is not investing themselves in a technology, but they’re willing to license it for the drugs in their portfolio if they need it. There are therapies that are used, as an example, in our delivery devices that are used in intraocular delivery, lipid nanoparticles, oral delivery of biologics, long-acting delivery for small molecules.

These are all platforms that exist, and another 25 on top of that, that we are actively mining to look for the opportunity to either get a platform that is more advanced than DRisk, if that exists, which is more of a challenge, or something earlier on where we can do exactly what we did with ENHANZE®, which is take something from the lab or early stage to commercialization using the expertise and the learnings we have as a company to birth a new terrific licensing business model like we’ve done with ENHANZE®. That’s what we’re very actively looking at for M&A. Our business is strong. We’ve got strong growth projected, so we’re not rushing into it. We’re going to wait till we find the right type of platform to add to our already terrific business.

Sean Lam, Head of the SmidtCap Biotech Equity Research team, Morgan Stanley: Sure. I guess just generally on that front, when it comes to business development, how competitive a space is it? I think Halozyme is the biggest business that I’m aware of in the drug delivery platform space. How competitive do you think that space is in terms of business development opportunities?

Helen Torley, President and CEO, Halozyme Therapeutics: Without being modest on the part of Dr. Helen Torley, I don’t think there’s anyone who is quite like us in terms of being able to take something from the lab to such broad commercial success. For platforms that have that potential, we don’t come across many other companies who are, to our knowledge, kicking the tires and evaluating it because it’s not necessarily a business model people have experience with. They don’t necessarily want to go down that path. Not too competitive. I think what the art here, Sean, is identifying that asset that is needed by multiple pharma and biotech companies where we can replicate the ENHANZE® business model. Yeah, obviously, there’s a great opportunity there for the relationships we already have and getting some great synergies in terms of the cross-selling. We’re in a very strong position when we’re looking at drug delivery platforms.

Sean Lam, Head of the SmidtCap Biotech Equity Research team, Morgan Stanley: Wonderful. You’ve historically signed, I believe, one ENHANZE® deal per year. How do you view the cadence of those deals going forward?

Helen Torley, President and CEO, Halozyme Therapeutics: Yeah, this year already, I’m very proud to say that we’ve already signed one small volume alternate active development agreement, and that’s with a current partner, one high volume alternate active development agreement with a current partner. We’re very active in a broad set of discussions on ENHANZE®. I will say based on the cadence and the progress of those conversations, Sean, I’m very confident we will sign another ENHANZE® agreement this year, at least one. We are seeing that there’s just a certain period of time of going through decision making in the pharma and biotech companies. You have to be patient, but we’re working through that. I say at least one. We may be successful with getting more than one over the finish line, but I’ll be very happy to have an additional one.

I’ll just mention, in addition to new deals, and that’s an important metric for us for sure, recollect that many of our partners also have open slots. They don’t necessarily, if they want to work in a drug, just take one slot. They take multiple slots. We’re going to continue to see our pipeline expanding with current partners, moving more products into the clinic. One’s already happened this year. We’re projecting another one by year end and then another one at the beginning of 2026. That’s another important source of growth and expansion for our pipeline.

Sean Lam, Head of the SmidtCap Biotech Equity Research team, Morgan Stanley: Thank you. What criteria do you use to evaluate potential partners for ENHANZE® or autoinjector technologies?

Helen Torley, President and CEO, Halozyme Therapeutics: Yeah, when partners come to us, I mentioned we’ve got such a leverageable business model and so much expertise in our team. We actually evaluate everybody, and we’re very happy to work with everybody, Sean, in terms of potentially having our therapy extend the use of the product for more patients. It’s a terrific thing about the leverageability. No challenges there.

Sean Lam, Head of the SmidtCap Biotech Equity Research team, Morgan Stanley: All right, thank you. A couple of competitive considerations, but how do you plan to maintain ENHANZE®’s leadership as competitors explore alternative hyaluronidase?

Helen Torley, President and CEO, Halozyme Therapeutics: Yeah, we are the pioneer in the hyaluronidase, inventing the whole field, if you like. With that leadership have come many, many years of progress and success. We talked earlier about there being 10 products already approved. With those comes an incredible depth of knowledge and expertise that is valued by our partners in terms of how to get a drug quickly to the clinic and approved, advising on regulatory strategy and CMC strategy. With those 10 approvals, we’ve come now an amazing million patients treated. That gives us an extensive safety database. It’s something that isn’t talked about often, but there’s always a worry when you combine two biologics together of a safety issue called immunogenicity. It’s an unusual, unexpected event where you need to have a lot of exposure to identify whether or not you’re having a problem of immunogenicity.

Every partner who comes to us wants to understand that immunogenicity risk, and we’re in a position with this giant safety database to assuage those concerns. I think the third area is continuity of supply. I was just in the argenx talk, and that was one of the top things mentioned by Carl, the CFO. We have 10 years of reliable, high-quality supply, and that’s not to be ignored either. That combination, Sean, is what’s important to our partners. Because we’ve been in this leadership position, we have the first mover advantage. That will be unassailable in terms of people trying to come in and do similar copycat activities.

Sean Lam, Head of the SmidtCap Biotech Equity Research team, Morgan Stanley: Wonderful, thank you. Next question, this seems like very asymmetric risk. Can you remind us what the current status of the Merck litigation is and how it might impact your royalty streams?

Helen Torley, President and CEO, Halozyme Therapeutics: Yeah, I mentioned we’re the pioneer in hyaluronidase. When we were inventing ENHANZE®, we also did a lot of experiments, thousands of experiments, actually looking at different modified hyaluronidases. By that, ENHANZE® is a human truncated hyaluronidase, so an identical amino acid structure to the human. Our modified hyaluronidases have got different amino acid sequences from the human. We’ve patented those modified hyaluronidases. The Merck litigation is that we have sued Merck for infringing our rHuPH20 enzyme portfolio. Importantly, rHuPH20 enzyme is totally separate from ENHANZE®. Think about rHuPH20 enzyme, and this Merck litigation is being all upside. There is zero risk, zero risk to it because ENHANZE® is separate. We believe that Merck is infringing, and we expect to hear about the scheduling of that court case in the next week, Sean.

It will take a number of years to play out unless Merck settles before that, but all upside and protecting our intellectual property.

Sean Lam, Head of the SmidtCap Biotech Equity Research team, Morgan Stanley: Wonderful. Just out of time, is there anything that you’d like to leave the investor base with?

Helen Torley, President and CEO, Halozyme Therapeutics: No, I think you’ve covered it very nicely, Sean. I would just say that we have these 10 amazing products that are going to be resulting in strong, durable royalty revenue growth for the company for years to come. We’ve got the opportunity to build on top of that with our strong cash flow, allowing us to replicate this brilliant ENHANZE® model. We are very excited to be focused on that today.

Sean Lam, Head of the SmidtCap Biotech Equity Research team, Morgan Stanley: Wonderful. Thank you for your time today, Helen. Thank you for contributing to the conference. Appreciate it.

Helen Torley, President and CEO, Halozyme Therapeutics: Thank you.

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