Halozyme first quarter net loss increases to $15.1 million

Halozyme Therapeutics, Inc. (NASDAQ: HALO) today reported financial results for the quarter ended March 31, 2012.

"We achieved a significant milestone in the first quarter with the European regulatory filing of the subcutaneous Herceptin program by our partner Roche," said Gregory I. Frost, Ph.D., President and Chief Executive Officer, Halozyme. "Despite the HyQ regulatory delay from our Baxter collaboration, our pipeline has continued to make tangible progress on all fronts, as well as across diverse therapeutic areas and geographies."

First Quarter Highlights

Highlights of Halozyme's first quarter activities and recent events include:

• Notification from the European Patent Office (EPO) that a hearing scheduled in opposition of the European patent for Halozyme's recombinant human hyaluronidase enzyme (rHuPH20) was cancelled and the EPO acknowledged the patentability of the claims. The Company anticipates the EPO to issue a final written decision to this effect.
• Announced with our collaborator, Baxter, that the U.S. Food and Drug Administration (FDA) requested additional information to complete its review of the HyQ Biologics License Application (BLA).The Companies will work together to develop studies to provide additional data to address the concerns raised by the agency.
• In addition to filing a Line Extension Application for subcutaneous (SC) Herceptin® (trastuzumab) with the European Medicines Agency (EMA), Roche presented Phase 3 registration data from the HannaH trial at the Early Breast Cancer Conference in Vienna. The study met its co-primary endpoints of pharmacokinetics and efficacy. Herceptin SC, using rHuPH20, may provide greater convenience to patients versus the traditional IV method due to its less invasive administration route and quicker administration time (5 minutes versus 30 – 90 minutes).  
• Roche reiterated their intent to file the Line Extension Application of subcutaneous MabThera® (rituxumab with rHuPH20) to the EMA this year for the treatment of Non-Hodgkin's Lymphoma, Chronic Lymphocytic Leukemia and Follicular Lymphoma.
• Announced positive data with ViroPharma regarding a Phase 2 SC trial of Cinryze® (C1 esterase inhibitor [human]) in combination with rHuPH20, in patients with hereditary angioedema. Presented at the American Academy of Allergy Asthma & Immunology, the study demonstrated that SC co-administration of Cinryze with rHuPH20 was well tolerated and resulted in sustained physiologically relevant C1 INH functional concentrations.
• Updated the Hylenex® recombinant (hyaluronidase human injection) label to include instructions for pre-administration of the enzyme in advance of other injected or subcutaneously infused drugs, and information from non-clinical studies that provide further data on the safety profile of Hylenex.

First Quarter 2012 Financial Results

The net loss for the first quarter of 2012 was $15.1 million, or $0.14 per share, compared with a net loss for the first quarter of 2011 of $9.6 million, or $0.10 per share.

• Revenues for the first quarter of 2012 were $7.4 million, compared to $7.5 million for the first quarter of 2011. Revenues in the first quarter of 2012 primarily consisted of a milestone payment from Roche of $4 million and research and development reimbursements from partners.
• Research and development expenses for the first quarter of 2012 were $15.9 million, compared with $13.8 million for the first quarter of 2011, primarily due to an increase in manufacturing activities and compensation costs, partially offset by a decrease in clinical trial activities. 
• Selling, general and administrative (SG&A) expenses for the first quarter of 2012 were $6.6 million, compared to $3.4 million for the first quarter of 2011. The increase for SG&A was due to higher compensation costs and higher marketing and market research expenses during the quarter. 
• Cash and cash equivalents were $116.6 million as of March 31, 2012, compared with $73.8 million as of March 31, 2011. Excluding the net proceeds of $81.5 million from the financing in February 2012, net cash used in the first quarter of 2012 was approximately $17.7 million.

Due to the HyQ regulatory delay, we anticipate 2012 cash burn to be $55-$60 million, instead of $50-$55 million as previously forecasted.