Halozyme (HALO) Q4 2025 Earnings Call Transcript

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Date

Feb. 17, 2026 at 4:30 p.m. ET

Call participants

• Chief Executive Officer — Helen I. Torley
• Chief Scientific Officer — Chris Wall
• Chief Financial Officer — Nicole LaBrosse

Takeaways

• Total revenue -- $1.4 billion for 2025, up 38%, driven by strong performance across royalty streams and product sales.
• Royalty revenue -- $867.8 million, up 52%, predominantly from ENHANZE-enabled products including DARZALEX SC, Vyvgart Hytrulo, and Phesgo.
• DARZALEX SC royalty revenue -- $483 million, representing 29% growth; subcutaneous formulation achieved 97% US market share in this franchise.
• Phesgo royalty revenue -- $105.6 million, up 51%; global conversion from IV Perjeta reached 54% in the quarter.
• Vyvgart/Vyvgart Hytrulo royalty revenue -- $157.2 million, up 444%; Vyvgart Hytrulo and prefilled syringe launches expanded prescriber base and patient access.
• Fourth quarter financials -- Total revenue $451.8 million, up 52%; royalty revenue $258 million, up 51%.
• Net income -- $316.9 million, including a $285 million acquired IPR&D expense from Surf Bio, down from $444.1 million in 2024.
• Adjusted EBITDA -- $657 million, up from $632.2 million, both figures include the impact of acquired IPR&D.
• GAAP diluted EPS -- $2.50, compared to $3.43 in 2024; non-GAAP diluted EPS $4.15, compared to $4.23 in 2024, both reflecting negative impact from Surf Bio-acquired IPR&D.
• Financial guidance for 2026 -- Total revenue projected at $1.71–$1.81 billion, year-over-year growth of 22%-30%; royalty revenue guidance $1.13–$1.17 billion, reflecting 30%-35% growth; adjusted EBITDA expected at $1.125–$1.205 billion; non-GAAP diluted EPS $7.75–$8.25.
• Pipeline expansion -- Commercial and development portfolio anticipated to nearly double to 36 products by 2028 through ENHANZE, Hypercon, and Surf Bio platforms.
• ENHANZE product progress -- 10 ENHANZE-enabled global blockbuster opportunities cited, with major approvals for DARZALEX FASPRO and Rybrevant SC in large international markets supporting royalty streams.
• New collaborations -- Three new ENHANZE licensing agreements signed in 2025, including entry into obesity and inflammatory bowel disease therapies; three to six additional agreements anticipated for 2026.
• Product-specific volume data -- Roche reported 17,500 patients on Ocrevus Xevudy de novo (subcutaneous ENHANZE), a 5,000-patient increase sequentially; 50% are Ocrevus-naïve, demonstrating market expansion.
• Hypercon & Surf Bio acquisitions -- Hypercon and Surf Bio platforms acquired, broadening IP coverage into the mid-2040s with projected $1 billion royalty run-rate within five years of Hypercon’s first launches.
• Capital structure actions -- $1.5 billion in convertible notes issued (2031/2032 maturities); portion used to repurchase earlier notes; revolving credit facility upsized to $750 million, lowering near-term refinancing risk and extending maturities.
• Debt metrics -- End of year 2.1x net debt to EBITDA (credit agreement basis, excludes IPR&D); management expects deleveraging below 1x by 2026.
• ENHANZE ADC data -- Chris Wall presented preclinical results where “subcutaneous delivery with ENHANZE can result in more rapid absorption and uptake” for ADCs, achieving reductions in injection-site payload of 87% and over 50% for two tested ADCs, and reducing Cmax by 75% and 61%, respectively, compared to IV.
• R&D and SG&A expense growth -- R&D was $81.5 million (up from $79 million); SG&A $207.1 million (up from $154.3 million), primarily reflecting expenses tied to acquisitions, litigation, and merit increases.
• Quarterly royalty cadence -- Q1 2026 royalty revenues are expected to be 5%-10% lower sequentially from Q4 2025, due to annual contractual rate resets; company projects sequential quarterly growth for the balance of the year.

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Risks

• Net income and EPS impact -- Net income and both GAAP and non-GAAP diluted EPS declined due to the $285 million acquired IPR&D expense associated with the Surf Bio acquisition; management quantified an approximately $2.30 per share unfavorable impact.
• Royalty revenue seasonality -- Management stated, “We expect first quarter royalty revenues to be less than the fourth quarter of 2025 by approximately 5% to 10% due to annual contractual rate resets,” introducing expected short-term top-line pressure.

Summary

Halozyme Therapeutics (NASDAQ:HALO) reported record total and royalty revenues, propelled by blockbuster performance in its ENHANZE-enabled portfolio and expanded breadth through transformative acquisitions and new collaborations. Management highlighted substantial pipeline growth, aiming to double the product portfolio by 2028, while also forecasting durable high-margin royalty streams extending into the 2040s based on first-in-class technology platforms and new modalities like antibody-drug conjugates. Strategic use of capital enhanced financial flexibility and extended maturities, positioning the company for continued acquisitive and organic growth, while guidance anticipates sustained double-digit revenue and EBITDA expansion despite short-term IPR&D and seasonal effects on earnings metrics.

• Company cited advancements in enabling subcutaneous administration of antibody-drug conjugates, providing data on “more rapid absorption and uptake” that showed substantially reduced local toxicity and Cmax versus IV, supporting future regulatory and commercial discussions with prospective partners.
• Helen I. Torley noted active pursuit of new licensing and development deals for both ENHANZE and Hypercon, forecasting three new ENHANZE agreements and between one and two Hypercon collaborations to close in 2026, and outlined plans for additional M&A targeting revenue and margin accretive assets.
• Nicole LaBrosse detailed strategic capital actions, including issuance and repurchase of convertible notes and upsizing of the revolving credit facility to $750 million, enhancing liquidity and reducing refinancing risk.
• Newly acquired Hypercon and Surf Bio technologies are projected to contribute $1 billion in annual royalties five years after first launches, supporting high-confidence, long-term royalty durability alongside existing blockbusters.
• Product-specific dynamics revealed rapid adoption and share gains, with Vyvgart Hytrulo, Phesgo, and Ocrevus ENHANZE SC each cited as key drivers of blockbuster franchise momentum and increasing addressable market, especially through broadening indications and expanded patient reach enabled by subcutaneous formulations.

Industry glossary

• ENHANZE: Proprietary recombinant human hyaluronidase technology platform used to enable subcutaneous drug delivery of biologics and small molecules.
• ADC (Antibody-Drug Conjugate): Drug class combining an antibody linked to a cytotoxic agent, used for targeted therapy; represents a rapidly expanding modality in oncology.
• IPR&D (In-Process Research and Development): Accounting term for the fair value of ongoing research and development projects acquired in a business combination, recorded as an expense.
• PK (Pharmacokinetics): Study of drug absorption, distribution, metabolism, and excretion, especially as measured through metrics like Cmax and area under the curve (AUC).
• Cmax: Peak serum concentration a drug achieves after administration, used as a pharmacokinetic measure frequently referenced for safety and dosing strategy.
• Autoinjector: Medical device that delivers a pre-measured dose of medication via subcutaneous injection, developed for patient self-administration.
• Hypercon: Proprietary hyperconcentration platform acquired by Halozyme Therapeutics for higher-concentration, lower-volume subcutaneous formulations supporting autoinjector use.
• gMG (generalized Myasthenia Gravis): Chronic autoimmune neuromuscular disease, an indication for Vyvgart and Vyvgart Hytrulo.
• CIDP (Chronic Inflammatory Demyelinating Polyneuropathy): Rare neurological disorder, another indication for Vyvgart Hytrulo.

Full Conference Call Transcript

Thank you, Tram, and good afternoon, everyone. As I look back on the past year, it is clear that 2025 was one of the most significant and value-creating years in Halozyme Therapeutics, Inc.'s history. We showcased our ability to execute across every dimension strategically, operationally, and financially. This level of execution has created a clear value inflection for Halozyme Therapeutics, Inc., unlocking multiple drivers of long-term, durable, and profitable revenue. I am incredibly energized by the pace of progress and excited for the opportunities that are ahead of us. And today, I am pleased to welcome Chris Wall, our Chief Scientific Officer, to the call.

Chris will be reviewing the new potential opportunity that is emerging on the uses of ENHANZE with antibody-drug conjugates. Let me begin with the corporate highlights from the fourth quarter, beginning on slide three. As you can see, it was a busy and successful fourth quarter. We expanded our portfolio from two to four subcutaneous drug delivery technologies with two acquisitions, the first being Electrifi’s Hypercon technology, and the second being Surf Bio’s hyperconcentration technology, both with long-duration IP into the mid-2040s. These acquisitions significantly broaden our delivery capabilities and meaningfully expand our opportunities to collaborate across a wide range of targets, modalities, and therapeutic areas, both exclusively and nonexclusively.

Together, ENHANZE, our autoinjectors, Hypercon, and Surf Bio position Halozyme Therapeutics, Inc. as the one-stop shop for the biopharma industry for subcutaneous drug delivery. In the fourth quarter and more recently, our partners also continued to add and advance ENHANZE subcutaneous new approvals, expanding our near- and long-term royalty opportunity. DARZALEX FASPRO was approved in the United States for smoldering multiple myeloma. In addition, Johnson & Johnson recently announced another approval for newly diagnosed multiple myeloma patients, marking the fifth indication for newly diagnosed patients and the twelfth indication overall. Johnson & Johnson’s Rybrevant subcutaneous with ENHANZE achieved regulatory approval in the US, Japan, and China. This resulted in there now being 10 ENHANZE-enabled global blockbuster opportunities.

Roche nominated one new ENHANZE target, which sustains a steady cadence of target additions from our current partners. argenx expanded its ARGX-121 phase 1 study with ENHANZE, representing another example of partners moving earlier-stage assets into subcutaneous development. And importantly, in the final months of the year, we signed three new ENHANZE collaboration and licensing agreements, further expanding our reach beyond oncology into obesity and inflammatory bowel disease, with clinical planning already underway for all three products. We were also pleased to have signed a commercial licensing and supply agreement with Thea for our small-volume autoinjector. And we continue to make progress with the two autoinjector development agreements we signed in 2025 with current partners.

Our achievements throughout 2025 supported another year of strong financial performance, as we delivered total revenue growth of 38%, reaching a record of $1,400,000,000, including royalty revenue increasing 52% to $868,000,000 for the full year 2025. The increase in our royalty revenue reflects the continued strength of our ENHANZE-enabled products, and in particular, DARZALEX subcutaneous, Phesgo, and Vyvgart Hytrulo. Moving to slide four, I will provide some performance details for these products. Let me begin with DARZALEX subcutaneous, which continues to be a standout example of how ENHANZE enables sustained blockbuster performance. Johnson & Johnson reported total DARZALEX sales grew 22% operationally in 2025, reaching $14,400,000,000 for the year.

This makes DARZALEX not only the largest medicine in their pharmaceutical portfolio, but also reinforces its role as a foundational, gold-standard therapy in multiple myeloma. This performance resulted in $483,000,000 in royalty revenues to Halozyme Therapeutics, Inc., representing 29% year-over-year growth. And looking ahead, DARZALEX is expected to continue the strong trajectory with sales projected to exceed $18,000,000,000 in 2028. This continued strong growth will be driven by DARZALEX subcutaneous with ENHANZE, which today represents 97% share of sales in the United States. I will move now to Phesgo. Phesgo also delivered meaningful growth for Roche in 2025, increasing 48% year over year to CHF 2,400,000,000, or approximately $3,000,000,000, reflecting its position as a durable global blockbuster.

This resulted in $105,600,000 in royalty revenue to Halozyme Therapeutics, Inc., a 51% year-over-year growth. Analysts project that Phesgo will reach $3,600,000,000 in 2028. As Roche’s number one growth driver for the fourth quarter in a row, Phesgo conversion from IV Perjeta increased to 54% in the quarter, and Roche increased its global conversion goal to 60% after surpassing their initial 50% target. Key milestones in 2025 included continued geographic expansion and important reimbursement progress, most notably in large international markets, driving further conversion to subcutaneous Phesgo with ENHANZE. Moving now to Vyvgart. Vyvgart and Vyvgart Hytrulo with ENHANZE grew 90% year over year to $4,150,000,000.

This performance resulted in royalty revenues of $157,200,000 for Halozyme Therapeutics, Inc., representing 444% year-over-year growth. Throughout the year, adoption and use of Vyvgart Hytrulo with ENHANZE for gMG and CIDP patients continued to expand. The launch and uptake of the prefilled syringe for both indications with ENHANZE represented a major milestone, enabling both at-home and in-clinic administration. argenx has commented that the prefilled syringe has expanded the prescriber base, increased patient reach, and accelerated adoption earlier in the treatment paradigm. And this is really just the beginning for Vyvgart Hytrulo, with multiple studies exploring expanded and new indications supporting the long-term growth of this important blockbuster product.

Let me now move to our most recently launched products, which include subcutaneous formulations of Ocrevus, Opdivo, Rybrevant, and Tecentriq with ENHANZE. Each of these products represents blockbuster opportunity for subcutaneous use, collectively representing an approximately $30,000,000,000 total IV and subcutaneous opportunity in 2028 based on analyst estimates. Some recent exciting highlights that have been reported by our partners include Roche reporting that there are now 17,500 patients on Ocrevus Xevudy de novo, the subcutaneous formulation with ENHANZE, a 5,000 patient increase from the third quarter. Importantly, 50% of patients in the US and many other early launch countries are naïve to Ocrevus, emphasizing that de novo is expanding the addressable market through enabling use in community practices.

This is demonstrating that de novo can help overcome intravenous infusion capacity constraints, allowing more access to treatment. Roche recently increased sales expectations for the Ocrevus franchise to CHF 9,000,000,000, or approximately $11,500,000,000. Moving now to Opdivo, Cutaquig. BMS reported $133,000,000 in sales of the subcutaneous product with ENHANZE in the fourth quarter, noting continued growth in accounts adopting Cutaquig following issuance of the permanent J-code July 2025. BMS noted that use is across tumor types and in both monotherapy and combination settings, further adding that they were on track to achieve their target 30% to 40% conversion by their loss of exclusivity, which many project will be in 2028.

And during 2025, Johnson & Johnson’s Rybrevant subcutaneous with ENHANZE achieved regulatory approvals in the US, Japan, and China. Rybrevant subcutaneous offers a strong value proposition with meaningfully shorter administration time and a significantly lower rate of infusion-related reactions. Johnson & Johnson has commented that this subcutaneous formulation is key to achieving their multibillion-dollar opportunity they project that Rybrevant will become. All of these products are benefiting from the same ENHANZE-driven advantages that patients, healthcare providers, and our partners have come to expect from our pioneering technology. This includes shorter administration times, reduced treatment burden, and improved site-of-care flexibility. It is these factors that are driving forces for continued strong adoption and conversion over time.

With those 2025 operational highlights, let me now hand the call over to Nicole, who will review our strong 2025 financial performance, following which we will discuss the key drivers of 2026 and beyond revenue and our 2026 guidance.

Nicole LaBrosse: Thank you, Helen. Let me start on slide five. 2025 marked a year of disciplined execution and financial strength for Halozyme Therapeutics, Inc., highlighted by robust top-line growth, solid profitability, and a strengthened balance sheet that positions us firmly to advance our long-term strategy. I will begin with the full year 2025 results. Total revenue grew 38% to $1,400,000,000, reflecting sustained ENHANZE momentum. The principal growth drivers continue to be our royalty stream. Total royalty revenue increased 52% to $867,800,000, driven by continued uptake of ENHANZE-enabled products, most notably DARZALEX SC, Vyvgart Hytrulo, and Phesgo. Product sales also contributed to the year-over-year total revenue growth. Cost of sales was $228,800,000 compared to $159,400,000 in 2024, primarily reflecting higher product volume.

Amortization of intangibles was $76,700,000, up from $71,000,000 in 2024 due to the Electrifi acquisition completed in November. R&D expense was $81,500,000 compared to $79,000,000 in 2024, reflecting the stub portion related to the Electrifi acquisition, partially offset by lower compensation from resource optimization and the timing of planned ENHANZE investments, especially as we advanced our high-yield rHuPH20 manufacturing process. SG&A was $207,100,000 compared to $154,300,000 in 2024, with the increase driven by litigation expenses, consulting and professional services, and transaction-related costs for Electrifi and Surf Bio, as well as higher compensation due to annual merit increases.

Net income for the full year was $316,900,000, which includes $285,000,000 of acquired IPR&D expense related to the Surf Bio acquisition recognized in the fourth quarter. This compares with $444,100,000 reported in 2024. Adjusted EBITDA was $657,000,000, also including the impact of $285,000,000 for acquired IPR&D expense. This compares to $632,200,000 in 2024. GAAP diluted EPS was $2.50 compared with $3.43 in 2024, and non-GAAP diluted EPS was $4.15 compared with $4.23 in 2024. Both 2025 GAAP and non-GAAP diluted EPS included the unfavorable impact of approximately $2.30 per share from the Surf Bio acquired IPR&D expense.

Absent the IPR&D charge, our business continued to strengthen in the year, yielding a $2.22 non-GAAP EPS improvement over 2024, representing 52% growth, exceeding our revenue growth of 38%. I will just briefly highlight our strong fourth quarter results. Total revenue increased 52% to $451,800,000, with royalty revenue contributing $258,000,000, representing a 51% year-over-year increase. Also seen here are the fourth quarter bottom-line results, which were also impacted by the acquired IPR&D charge of $285,000,000. Moving to our balance sheet, in 2025, we meaningfully enhanced our capital structure.

We issued $750,000,000 of 2031 and $750,000,000 of 2032 convertible notes, used a portion of proceeds to repurchase portions of our 2027 and 2028 notes, and upsized our revolving credit facility to $750,000,000, actions that extended maturities, reduced near-term refinancing risk, increased liquidity, and improved strategic flexibility. Our asset-light model continues to generate significant cash, and we ended the year at 2.1 times net debt to EBITDA as calculated per our credit agreement, which excludes acquired IPR&D, even after acquiring two long-duration IP subcutaneous delivery technologies. We expect to delever to below one times by 2026. I will now turn the call back over to Helen to walk through how we are converting this financial strength into durable long-term revenue.

Helen I. Torley: Thank you, Nicole. Let us move now to slide six. As we look ahead, I could not be more energized by the momentum we have built and more confident in the long-term trajectory of the company. We have multiple levers and drivers of revenue that will position Halozyme Therapeutics, Inc. for royalty revenue durability and exceptional value creation well into the 2040s. At the foundation of this growth engine is ENHANZE, with now 10 global approvals. Our three blockbuster franchises, DARZALEX subcutaneous, Phesgo, and Vyvgart Hytrulo, all launched between 2020 and 2023, are delivering extraordinary performance today and for years to come.

Building upon these three blockbusters are four additional blockbuster products that were launched in 2024 and 2025 as subcutaneous products with ENHANZE. The subcutaneous versions of Ocrevus, Opdivo, Rybrevant, and Tecentriq are still early in their subcutaneous growth trajectories, with a lot of revenue growth and contribution to come. And adding on top of this, we have an exciting and expanding ENHANZE pipeline. In 2026, we project six new ENHANZE programs will enter phase 1, bringing our development portfolio to 15 products, 13 of which are with ENHANZE. And with development timelines that could shorten to three to four years in select cases, we have line of sight to accelerating royalty contributions from this pipeline portfolio beginning in 2029.

Now let me answer a question I get occasionally. What is next for ENHANZE? After signing three new licensing agreements last year, we expect to add between one and three more ENHANZE agreements in 2026. Interest for ENHANZE has never been higher from pharma and biotech for the use of ENHANZE with monoclonal antibodies, where ENHANZE is clearly recognized as the gold standard. And in addition, and a potential new growth opportunity, in response to data we have generated to demonstrate the potential value subcutaneous delivery with ENHANZE can bring for companies developing antibody-drug conjugates and nucleic acids, we are also engaged in multiple discussions on the use of ENHANZE with these two modalities.

Chris Wall, our Chief Scientific Officer, will provide more details on this in just a moment. Let me move now to our second powerful growth engine, Hypercon. Hypercon is a natural evolution of our strategy designed to meet the growing demand for lower-volume, autoinjector-ready, at-home or in-HCP-office therapies. With three partnerships with leading biopharma companies today, we expect to advance two exciting programs into phase 1 testing by 2026, with first approvals projected in the 2030 to 2031 timeframe. Recall that these two assets are mechanisms of action that are already blockbusters today.

Furthermore, we project that as a result of current agreements and the potential of between one and two new agreements in 2026, there will be three to five additional Hypercon launches by the mid-2030s. We are projecting that, taken together, these launches will result in $1,000,000,000 in Hypercon royalty revenue within five years of the first launches for this new technology in the mid-2030s. Hypercon also creates a compelling strategic path for our ENHANZE partners, offering them the ability to evolve towards smaller-volume injections, which is another way that we will extend our royalty streams into the 2040s.

We were also excited in the fourth quarter to complete the acquisition of Surf Bio, obtaining a second differentiated hyperconcentration technology with long IP to the mid-2040s. Our focus here is to advance the development and enable clinical readiness in late 2027 or 2028. Importantly, by 2028, we expect our combined commercial and development portfolio with ENHANZE, Hypercon, and Surf Bio to nearly double from 19 products today to 36, unlocking a powerful new wave of royalty revenue. And we are not stopping there. We will continue to deploy our strong cash flow towards strategic M&A. We are continuing to evaluate additional drug delivery technologies that can expand our offering and opportunity.

And we are also evaluating assets with strong revenue and margin opportunity that will drive near-term and long-term growth. As we continue to make acquisitions, we will maintain financial discipline while investing in long-term value creation. With that, let me now turn the call over to Chris to highlight the exciting new expanded opportunity that we have with ENHANZE.

Chris Wall: Thank you, Helen. I will begin on slide seven. We recognize the potential for ENHANZE to improve the clinical profile and deliver convenience of two emerging and rapidly growing classes of drugs: antibody-drug conjugates and nucleic acids. We initiated a series of internal experiments in collaborations with leading companies to generate data to evaluate and demonstrate the benefits of ENHANZE. Today, I will focus on the use of ENHANZE with antibody-drug conjugates and share some of the data that is creating strong interest from potential partners. As you may know, ADCs comprise an antibody, a linker, and a cytotoxic payload. As demonstrated with our ENHANZE-enabled products, subcutaneous delivery can improve the patient experience.

But conversion of ADCs to subcutaneous has been limited by concerns over injection-site toxicity. In addition, given the toxic nature of delivered payloads, there are also significant adverse events that can be dose limiting, some of which are associated with peak blood concentration, or Cmax, such as interstitial lung disease and cardiac toxicities. Hypotheses we tested in our experiments were: firstly, would subcutaneous delivery of ADCs with ENHANZE result in good local injection-site tolerability? Secondly, as we have demonstrated with monoclonal antibodies, would subcutaneous delivery of ADCs with ENHANZE result in a lower Cmax, or peak concentration, than IV? And thirdly, could subcutaneous delivery of ADCs with ENHANZE result in a similar or higher overall exposure compared to IV?

Achievement of all three would suggest the potential for an improved benefit-risk profile with subcutaneous delivery with ENHANZE. To answer these questions, we tested two approved ADCs in separate preclinical studies. We compared equivalent doses of the ADC either IV, subcutaneous with ENHANZE, or subcutaneous without ENHANZE, measuring key PK parameters at the injection site and in serum. On slide eight, I am showing the injection-site data for each of the two ADCs comparing subcutaneous delivery with ENHANZE to subcutaneous delivery without. Our data supports that subcutaneous delivery with ENHANZE can result in more rapid absorption and uptake, resulting in low levels of ADC payload at the injection site within hours. This is a situation where lower is better.

In fact, at 24 hours, the reduction was 87% for ADC 1 and over 50% for ADC 2 with ENHANZE compared to subcutaneous without. I will add that in these and additional experiments, skin biopsies reviewed by experienced pathologists were reported to be normal, supporting strong subcutaneous tolerability of the ADCs we tested. Let me now move on to the serum PK data on slide nine. I am showing the data for each of the two ADCs comparing IV to subcutaneous delivery with ENHANZE and subcutaneous delivery without. Our data shows that, as we see with antibodies, Cmax, or peak blood concentration, is significantly decreased with subcutaneous administration compared to IV.

Cmax was 75% lower for ADC 1 and 61% lower for ADC 2. Moving now to slide 10. Using PK modeling, we can predict that a higher dose of the ADCs we tested could be administered subcutaneously with ENHANZE, and that would result in equivalent or higher overall exposure with a still lower peak concentration than IV. Moving to slide 11. In summary, the preclinical data supports that subcutaneous delivery with ENHANZE could improve the benefit-risk profile for ADCs. Good local injection-site tolerability was demonstrated. For 2025 and into this year, I have had the opportunity to present and discuss this data with multiple pharma and biotech companies advancing antibody-drug conjugates.

The feedback I get consistently is, the data supports not only the ability to deliver ADCs subcutaneously, but the potential for improvements in the benefit-risk profile. With that, let me now hand the call back over to Helen.

Helen I. Torley: Let us move now to slide 12 and review our goals for 2026. We project supporting six new ENHANZE programs and two new Hypercon programs entering phase 1 clinical studies, bringing our total development portfolio to 15 products. Building on this momentum, our existing partners expect to deliver multiple phase 2 and phase 3 data readouts, further expanding the commercial opportunity for ENHANZE. In 2026, we plan to deliver at least three new licensing agreements, including between one and three new ENHANZE collaborations and between one and two new Hypercon collaborations.

And we will pursue strategic acquisitions that further strengthen our drug delivery portfolio and focus also on adding assets with strong revenue and margin opportunity that will drive near-term and long-term growth. Let me now turn the call back to Nicole. As we look ahead, we are pleased to reiterate our 2026 financial guidance, shown here on slide 13. We continue to expect total revenue of $1,710,000,000 to $1,810,000,000, representing year-over-year growth of 22% to 30%, driven by royalty revenue and product sales from API. Royalty revenues of $1,130,000,000 to $1,170,000,000, representing year-over-year growth of 30% to 35%. We continue to expect DARZALEX SC, Phesgo, and Vyvgart Hytrulo to drive the strong expectations.

We expect adjusted EBITDA of between $1,125,000,000 and $1,205,000,000, including new Hypercon and Surf Bio investment of approximately $60,000,000, and non-GAAP diluted EPS of $7.75 to $8.25, which also reflects the new Hypercon and Surf Bio investment and does not consider the impact of potential future share repurchases. Let me also take the opportunity to highlight how to think about quarterly cadence for your modeling. We expect first quarter royalty revenues to be less than the fourth quarter of 2025 by approximately 5% to 10% due to annual contractual rate resets, with quarterly sequential growth thereafter.

We project total revenue to decrease sequentially from 2025 to 2026 as new milestones are planned in the first quarter, with milestones expected to be weighted in the second half of the year. I will now turn the call back over to Helen. Thank you, Nicole. Let me conclude with these final remarks. Across ENHANZE, our autoinjectors, Hypercon, and Surf Bio, our strategy is clear, our priorities are aligned, our execution is disciplined. We are building a future that is defined by innovation, durability, and high-margin royalties that extend throughout the next two decades. These priorities position Halozyme Therapeutics, Inc. not just for another strong year, but for a new era of durable long-term revenue.

We have the portfolio, we have the technologies, and we have the strong cash generation. And most importantly, we have a clear, confident, and compelling path forward. Operator, you can now open the call for questions.

Operator: We will now begin the question and answer session. If you would like to ask a question, please press 1 on your telephone keypad. To withdraw your question, press 1 again. Please pick up your handset when asking a question. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster.

Operator: Your first question comes from the line of Mohit Bansal with Wells Fargo. Your line is open. Please go ahead.

Mohit Bansal: For the first time, really appreciate it. I have a question regarding the mechanics of DARZALEX collaboration with J&J. I know you last time in late January, you talked about to extend the deal with J&J on DARZALEX. Can you just elaborate this further? Is this related to ENHANZE, or do you think that there is a potential expansion with Hypercon here? And the related question is that what happens after the expiry of ENHANZE collaboration with J&J? J&J has to manufacture hyaluronidase on their own and then sell on their own? I mean, how does this mechanics work? Thank you very much.

Helen I. Torley: Thanks, Mohit. Yes, we are very proud to partner with Johnson & Johnson on creating such an important brand for patients with multiple myeloma with $14,400,000,000 with the majority of that being powered by subcutaneous with ENHANZE, because, as you know, it really is enabling a lot of that early frontline durable patient treatment. Now our terms of our licensing agreement end with J&J in 2032.

But given the importance of this brand to J&J, given how we are the core to helping get into this frontline setting, we absolutely expect to enter into discussions with Johnson & Johnson closer to the time, because we are obviously many years out from that today, to extend our agreement and our supply of them of API. So we do not expect J&J to take the risk of going to get another source of API. We expect them to want to continue to work with us with the strong reliability and the great safety track record that we have generated together on the use of DARZALEX subcutaneous.

So, Mohit, my comments were specifically about continuing to work with J&J on ENHANZE when we made them on the last call. Helpful. Thank you.

Operator: Your next question comes from the line of Jason Nicholas Butler with Citizens. Your line is now open. Please go ahead.

Jason Nicholas Butler: Thanks. Can you guys hear me?

Helen I. Torley: Yes, Jason. Thanks.

Jason Nicholas Butler: Okay. Alright. I have two questions on the ADC strategy. I guess the first one is one thing that is really increasing clarity and confidence is regulatory path with ENHANZE. Can you give any thoughts on if you are going to be essentially improving product profile of approved therapies, how do you think about regulatory path there versus regulatory path for not-yet-approved molecules? And then just secondly, on the kind of improvements that you are, can you give, sorry, just give us some context on the kind of treatment paradigms today for the approved ADCs, and, you know, obviously, there is the preference for not IV infusion, but what are these patients doing anyway?

Are they in the IV center anyway? Or can they truly free up time by not having to go to the IV center? Thank you.

Helen I. Torley: Yes. Let me ask Chris to address both of those. And, Chris, the first one was what we believe the regulatory pathway would be, obviously, today, we are basing on PK noninferiority. Will that be the path? And the second one was with regard to the paradigm. Is this going to be one where it might be a short injection in the infusion suite as opposed to subcutaneous, or can it be given at home?

Chris Wall: Thank you for the question, Jason. So regarding the regulatory path, as per those companies that wish to convert from IV to subcutaneous, as we have seen with our traditional monoclonal antibody products, we would expect a traditional approach that we have seen with PK noninferiority studies. To your point, to the extent that those partners are developing products that are not approved, or are seeking additional benefits related to efficacy and safety, those benefits would need to be proven through appropriate phase trials beyond PK noninferiority that include both efficacy and safety endpoints.

In terms of the approved ADCs and the benefit that we can provide, as you likely know, a lot of ADCs were developed not as monotherapy but as combo therapy. So there is the benefit there to reduce the infusion center time that those patients spend in those infusion centers. But we are seeing more movement of ADCs to first-line therapy. So to the extent that they are not administered in combination therapy, there would be potential for IV-free regimens. And also note that many of the ADCs are being used in combination with products that are subcutaneous or going subcutaneous, in large part enabled by ENHANZE and Halozyme Therapeutics, Inc.

So you will see a spectrum of treatment modalities, but I think as more and more drugs go subcutaneous, you will see a significant reduction in those patients needing to go to infusion centers.

Jason Nicholas Butler: Great. Thank you.

Operator: Your next question comes from the line of Michael Gennaro DiFiore with Evercore ISI. Your line is now open. Please go ahead.

Michael Gennaro DiFiore: Hi, guys. Thanks so much for taking my questions, and congrats on all the continued progress. Two questions for me. One, regarding the IPR filed against Alteogen back in December. How might the outcome of this influence the outcome of the Merck District Court litigation? And then separately, with regards to Merus’ petosemtamab, a new trial was listed on ClinicalTrials.gov back in January. It was a first-line non-small cell lung cancer study. I guess my question is, as development extends beyond head and neck, how should we think about the potential incremental ENHANZE royalty opportunity from additional indications here? Like, does a long-term commercial strategy for petosemtamab hinge primarily on the IV or the subcutaneous ENHANZE formulation? Thank you.

Helen I. Torley: Mike, with regard to the IPR filed against Alteogen, I would think of it very separately from our infringement case that is being brought against Merck, where we have identified that Merck is infringing multiple of Halozyme Therapeutics, Inc.’s already-filed patents. So it is a very different part of our IP strategy. With regard to the District Court case, we are still awaiting a scheduling order from the judge for that. The judge allowed for certain discovery for Halozyme Therapeutics, Inc., including access to the Merck-Alteogen agreement and also access to Keytruda SC to continue testing of that.

And we do expect that both parties will appear before the District Court in June, following the output of the PTAB, to receive further information and instructions. But PGR and Alteogen, very distinct from the District Court case. With regard to Merus’ terrific drug, as we looked at that, we looked at the potential. Obviously, I think it is just at the beginning of its potential utility based on its mechanism of action.

It is currently used in regimens including Keytruda, and I do believe it is possible that there are going to be an extensive number of indications that are explored over time where this mechanism is going to be relevant for patients, and I think this is where, you know, we really enjoyed working with the team with regard to the fact that they are recognizing that if the PD-1s go subcutaneously, the benefit of having an all-subcutaneous regimen is going to be terrific for patients.

And so I think that is where the puck is going in terms of how treatment is going to be delivered, and we are excited to see additional work being done to expand the indications over time for the subcutaneous version.

Michael Gennaro DiFiore: Very helpful. Thank you.

Operator: Your next question comes from the line of Corinne Jenkins with Goldman. Your line is open. Please go ahead.

Corinne Jenkins: Thanks. Maybe you could provide just a quick update on the progress you are making towards the clinic with the Hypercon products and kind of what remains to be done before you can start testing that technology in patients. And on a related note, what should we anticipate with respect to any update on the products and the progress they are making in terms of phase 1 study, etcetera. Thanks. I am sorry, Corinne. I caught most of that. Towards the end, you just, unfortunately, could not hear you. I got the progress to the Hypercon clinical testing and the second part to the question. Is that better?

Helen I. Torley: That is much better. Thank you.

Corinne Jenkins: Okay. The second part was just what should we anticipate with respect to updates through the year as you get those drugs into the clinic, and should we anticipate getting a better understanding of what the products are and the development strategy once they are in phase 1? Thanks.

Helen I. Torley: Yes, thank you. So we are continuing with the Hypercon team to support two partners in advancing to phase 1 clinical testing in 2026. And as a reminder, these are already approved blockbuster MOAs. The additional steps that are happening include completion of the clinical scale-up batches, as an example, and then the companies will also be moving forward to file their IND packages, their protocols, with the regulatory authorities, etcetera. But everything, as of today, is very much on track for these two clinical starts in the fourth quarter and before the end of the year. This is partner-confidential information, Corinne. In terms of what updates will be available, it will be very much driven by the partners.

I will say, if these clinical studies are being done in patient populations, it is very likely that they will be posted on ClinicalTrials.gov as the studies are about to start, and I think that might be the first indication publicly of who the partners are, and certainly visibility into the design of the phase 1 studies. I do not believe there will be a lot of information available at that time with regard to the full development pathway, but I will say that, from our perspective, development pathway will be very familiar to you if you are familiar with ENHANZE. We anticipate phase 1 studies to identify a dose, and then phase 3 studies on noninferiority in this instance.

Thanks.

Operator: Your next question comes from the line of Sean M. Laaman with Morgan Stanley. Your line is now open. Please go ahead.

Sean M. Laaman: Thank you. Good afternoon, Helen and team. Hope everyone is well, and thanks for taking my questions. Helen, just to double click on the last question, just to clarify, the two phase 1 starts with Hypercon, are they existing ENHANZE products? That is the first question. The second is, how many of the ENHANZE products do you envisage could be transitioned across to Hypercon over time? And then while we well understand the move from IV to subcutaneous and the clinical benefits there, what are you hoping to show the clinical benefits when you compare existing products and Hypercon compared to existing products with ENHANZE? Thank you.

Helen I. Torley: Thanks, Sean. Because the targets are confidential for the partners, we really cannot make any further comments other than to say that these are established blockbuster drugs with approved mechanisms of action. So afraid we are limited to talk about that. If we think about our ENHANZE portfolio, we are seeing very much with our partners in biotech and pharma, there is a real push towards getting treatment moved in a simple, short, small injection in the doctor’s office or in the patient’s home for certain conditions, including autoimmune diseases, neurology, nephrology.

And so as you think in our portfolio about anything that has the potential to be moved into a smaller volume, and drugs that perhaps today are given in the doctor’s office moving them into the patient’s home, or in the doctor’s office to allow for higher throughput of patients. Those are the types of opportunities you would be thinking about with the potential for a three to four times increase in concentration in most of our drugs, so a three to four times reduction in volume.

And so you can see from what I am saying that the value proposition here is very much the patient getting more charge of their disease, being able to do it at home, or be able to do it in a very short trip to their doctor’s office, and really putting the power back into the patient in terms of when and how and where they are getting their treatment. That is what is exciting companies as they are thinking about how best to meet the needs of patients with certain conditions where the patients really are overall quite well, want to get back to work, want to be able to go on trips, all of those conditions.

So it is, I think, a very logical evolution of subcutaneous treatment and putting the patient at the center and the next evolution for certain conditions.

Operator: Thank you, Helen. A reminder, if you would like to ask a question, please press 1 on your telephone keypad. To withdraw your question, press 1 again. Your next question comes from the line of Brendan Mychal Smith with TD Cowen. Your line is now open. Please go ahead.

Brendan Mychal Smith: Great. Thanks for taking the question, and congrats on all the great progress. I actually wanted to ask about the autoinjector part of the business a bit. I am wondering what your expectations for new partnerships there look like and if we should expect maybe any overlap in the new ENHANZE and Hypercon deals you plan to announce this year with some of those autoinjectors. And maybe on a related note, can you just remind us how you plan to report sales in autoinjection?

Is it going to be, should we think about it similarly to ENHANZE, like with product sales to partners during development and then adding royalties on top for commercial sales, or are there any kind of notable differences there? Thanks.

Helen I. Torley: Thanks for that question. Yes. I will start with the high-volume autoinjector, which we have continued to advance readiness for clinical test for our partners. As you know, we have got a development agreement that is advancing with one of our current partners, and our high-volume autoinjector, which is able to inject between 3 and 10 mL, with 10 mL going in just 30 seconds. We are seeing interest in it from current partners. We are seeing interest in it from new potential partners who are coming to evaluate the opportunity of ENHANZE and Hypercon, and even to a degree Surf Bio, even though that is earlier.

So, Brendan, I do anticipate we are going to see some progress with the high-volume autoinjector this year. And, again, it is a beautiful part of the story towards imagine, for the patient, being able to do their own delivery of a 3 mL, a 5 mL, a 6 mL, a 10 mL injection at home, putting the power into the patient’s hands for when, how, and where they have their treatment. So look for updates on that as the year progresses. I will have Nicole talk about how we report the sales.

Nicole LaBrosse: Yes, Brendan. So from a revenue perspective, we do recognize product sales from selling the devices, so you can think about that as similar to the way we recognize revenue from the sale of API. And when there are associated royalties, then we would recognize those as royalty revenues. So think about a situation where you are having a high-volume autoinjector that is licensed with our ENHANZE technology. Our expectation is that would drive royalties, and you would see royalties recognized with that product.

Brendan Mychal Smith: Got it. Thanks very much.

Operator: There are no further questions at this time. This concludes today’s call. Thank you for attending. You may now disconnect.

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