• Total Revenue: Exceeded $1 billion for the first time in 2024, growing 22% over the prior year.
• Royalty Revenue: Increased 27% to $571 million in 2024.
• Net Income: Increased 58% year over year to $444 million in 2024.
• Adjusted EBITDA: Increased 48% to $632 million in 2024.
• Non-GAAP EPS: Grew 53% to $4.23 in 2024.
• Free Cash Flow: Converted 74% of adjusted EBITDA into free cash flow, totaling $468 million.
• Cash and Equivalents: $596 million as of December 31, 2024.
• Net Debt: $929 million with a net leverage ratio of 1.3x.
• 2025 Revenue Guidance: Projected between $1.15 billion to $1.225 billion, representing growth of 13% to 21% year over year.
• 2025 Royalty Revenue Guidance: Expected to be $725 million to $750 million, representing growth of 27% to 31% year over year.
• 2025 Adjusted EBITDA Guidance: Projected between $755 million and $805 million, representing growth of 19% to 27% year over year.
• 2025 Non-GAAP EPS Guidance: Expected to be between $4.95 to $5.35, representing growth of 17% to 26% year over year.
• Share Repurchases: $250 million deployed in 2024, with a total of $1.55 billion returned since 2019.

• Warning! GuruFocus has detected 5 Warning Signs with HALO.

Release Date: February 18, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Halozyme Therapeutics Inc (NASDAQ:HALO) achieved record-breaking performance in 2024, with total revenue exceeding $1 billion for the first time, marking a 22% growth over the prior year.
• The company raised its financial guidance twice during the year and exceeded its raised guidance for royalty revenue, adjusted EBITDA, and non-GAAP EPS.
• Strong royalty revenue growth of 27% in 2024 resulted in $571 million in royalty revenue, driven by products like DARZALEX subcutaneous, Phesgo, and VYVGART Hytrulo.
• Halozyme Therapeutics Inc (NASDAQ:HALO) extended the patent protection of ENHANZE in Europe to 2029, maintaining its royalty rate for DARZALEX subcutaneous and amivantamab subcutaneous.
• The company projects continued strong growth in 2025, with total revenue expected to reach between $1.15 billion and $1.225 billion, representing growth of 13% to 21% year over year.

Negative Points

• Despite strong performance, the company faces challenges with the U.S. patent reissue for ENHANZE, which is not yet reflected in their five-year financial outlook.
• The recent approvals of products like OCREVUS Zunovo, TECENTRIQ Hybreza, and OPDIVO Qvantig are expected to have minimal contribution to 2025 revenues, with more meaningful contributions anticipated in 2026 and beyond.
• The company is experiencing a temporary impact on royalty revenue due to annual contractual rate resets, particularly affecting DARZALEX, which may result in a 10% decrease in first-quarter royalty revenue compared to the fourth quarter of 2024.
• Halozyme Therapeutics Inc (NASDAQ:HALO) is still in the process of securing new deals and nominations, with some discussions in early technical review stages, indicating potential delays in finalizing agreements.
• The company received a complete response letter from the FDA for amivantamab subcutaneous, related to observations at a manufacturing facility, delaying its U.S. approval.

Q & A Highlights

Q: What is Halozyme's confidence in maintaining growth beyond 2028, and how do new programs contribute to this? A: Helen Torley, CEO, explained that the company is confident in its growth beyond 2028 due to the continued contribution of its current 10 approved products, with royalties expected until at least 2030 and some extending into the 2040s. Additionally, new programs with partners like Argenx and pipeline products such as relatlimab Opdivo and TAK-881 are expected to contribute to growth. The company is also pursuing new nominations and deals to further bolster revenue streams.

Q: Can you provide more details on the small volume auto-injector deal and its impact on partnerships? A: Helen Torley, CEO, stated that the small volume auto-injector deal with a current partner is confidential, but it starts with a development agreement and progresses to a commercial agreement. This will create a new revenue stream for Halozyme through product sales. The high-volume auto-injector, which relies on ENHANZE, could also drive new royalty streams and product sales.

Q: Why is there a projected 10% decrease in first-quarter royalties compared to the fourth quarter? A: Nicole Labrosse, CFO, explained that the decrease is due to annual contractual rate resets, particularly with DARZALEX, which starts at a lower rate in January and quickly returns to the regular rate. Additionally, EpiPen royalties are affected by seasonality. Despite this, strong full-year growth of 27% to 31% is expected.

Q: How is the transition to prefilled syringes for VYVGART being incorporated into guidance? A: Helen Torley, CEO, mentioned that Argenx expects prefilled syringe approval in April, and this potential increase is already reflected in Halozyme's guidance. The prefilled syringe could allow for at-home injections and expand patient access in both gMG and CIDP.

Q: What is the potential for VYVGART Hytrulo to surpass IV sales in 2025? A: Helen Torley, CEO, noted that while Argenx has not provided specific guidance on when VYVGART Hytrulo might surpass IV sales, the subcutaneous formulation is expanding physician prescribing and moving therapy earlier in treatment. The CIDP launch is also progressing well, with 1,000 patients already on treatment.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.