Halozyme Therapeutics (HALO) Morgan Stanley 23rd Annual Global Healthcare Conference summary

Business model and financial performance

• Focus on subcutaneous drug delivery platforms, notably ENHANZE and autoinjectors, enabling rapid, high-volume biologic administration.

• Projected 2024 revenue of $1.27–$1.335 billion, with royalty revenue expected to reach $825–$860 million, driven by Darzalex Faspro, Phesgo, and Vyvgart Hytrulo.

• High EBITDA margins (73–75% projected for 2028) and strong free cash flow due to a leverageable, advisory-based business model with minimal R&D and commercialization costs.

• Capital allocation prioritizes business investment, share repurchases (over $1.85 billion since 2019), and acquisitions to add new platforms.

• Royalty streams are expected to last into the 2030s and 2040s, supporting long-term durable growth.

Market trends and growth drivers

• Global shift toward subcutaneous therapies is accelerating, with significant adoption in China and other markets, reducing the need for hospital-based infusions.

• Recent product launches and expanded reimbursement, especially for Phesgo in China, are fueling growth.

• Prefilled syringe technology for Vyvgart Hytrulo has expanded prescriber base and patient access, demonstrating market expansion potential.

• Secular trends in pharma and healthcare systems favor at-home care and easier drug administration, supporting continued portfolio expansion.

• Four additional products launched in 2024–2025 are expected to contribute to revenue from 2026 onward.

Regulatory and policy environment

• Positive regulatory environment with streamlined FDA approvals for subcutaneous products, enabling broader indications from single studies.

• Ongoing engagement with CMS regarding IRA guidance; strong arguments presented for maintaining favorable classification of ENHANZE as an active ingredient.

• Orphan drug designation changes reduce IRA impact on key products, extending their revenue timelines.

• Final CMS guidance expected in September or October, with ongoing advocacy efforts.