Halozyme Therapeutics — Third Quarter 2026 Earnings Summary

Financial Performance:

• Total revenue increased 39% year-over-year to $493.0 million in Q3 2026, compared to $354.3 million in Q3 2025.
• Royalty revenue increased 44% year-over-year to $341.0 million in Q3 2026, compared to $236.0 million in Q3 2025.
• Product sales net revenue was $137.3 million in Q3 2026, compared to $94.2 million in Q3 2025.
• Revenue from collaborative agreements was $14.6 million in Q3 2026, compared to $24.0 million in Q3 2025.
• Cost of sales was $82.5 million in Q3 2026, compared to $55.2 million in Q3 2025, driven by increased bulk rHuPH20 sales.
• Operating income was $295.0 million in Q3 2026, compared to $217.9 million in Q3 2025.
• Net income was $247.0 million in Q3 2026, compared to $175.2 million in Q3 2025.
• EBITDA was $328.7 million in Q3 2026, compared to $238.3 million in Q3 2025.
• Adjusted EBITDA was $336.2 million in Q3 2026, compared to $248.2 million in Q3 2025.
• GAAP diluted EPS was $2.01 in Q3 2026, compared to $1.43 in Q3 2025.
• Non-GAAP diluted EPS was $2.39 in Q3 2026, compared to $1.72 in Q3 2025.
• Cash, cash equivalents, restricted cash, and marketable securities totaled $1.08 billion as of September 30, 2026, compared to $145.4 million as of December 31, 2025.

Guidance and Future Outlook:

• Full-year 2026 total revenue guidance raised to $1.860 billion – $1.925 billion, representing 33% – 38% year-over-year growth.
• Full-year 2026 royalty revenue guidance raised to $1.235 billion – $1.255 billion, representing 42% – 45% year-over-year growth.
• Full-year 2026 Adjusted EBITDA guidance raised to $1.240 billion – $1.290 billion, representing 89% – 96% year-over-year growth.
• Full-year 2026 Non-GAAP diluted EPS guidance raised to $8.75 – $9.05, representing 111% – 118% year-over-year growth.
• The 2026 Adjusted EBITDA and Non-GAAP EPS guidance include approximately $60 million in new Hypercon™ and Aerocon™ investments.
• The company expects to retire remaining 2027 and 2028 notes at maturity using strong cash generation.

Business Segments and Product Lines:

• Three ENHANZE® programs advanced into Phase 1 clinical development: one each with Pfizer, Incyte, and argenx, bringing the total products in development to twelve.
• Collaboration agreements expanded with argenx to include additional targets; argenx nominated two additional targets in September 2026, providing exclusive access to ENHANZE® for a total of eight targets.
• Collaboration agreement expanded with Incyte to evaluate the subcutaneous formulation of axatilimab with ENHANZE®; Incyte made an upfront payment and agreed to potential future milestone payments and royalties.
• Collaboration agreement expanded with Johnson & Johnson (Janssen) for one additional oncology target in October 2026.
• Takeda filed a Biologics License Application with the FDA for TAK-881 for Primary Immunodeficiency Disease in October 2026.
• Roche announced FDA approval of TECENTRIQ® and TECENTRIQ HYBREZA® for the adjuvant treatment of stage III dMMR colon cancer, marking the twelfth U.S. indication for TECENTRIQ.
• argenx submitted a supplemental Biologics License Application for VYVGART® in ocular myasthenia gravis to the FDA in Q3 2026.
• Pfizer initiated a Phase 1 study for tilrekimig with ENHANZE® in healthy adults in September 2026.
• GSK plans to initiate a Phase 1b study for a subcutaneous belantamab formulation with ENHANZE® in multiple myeloma patients in August 2026.
• The ongoing Phase 1 study for INCA033989, a mutant calreticulin-targeted monoclonal antibody, continues.
• Janssen received FDA priority review for the supplemental Biologics License Application for SC amivantamab and hyaluronidase-lpuj for head and neck squamous cell carcinoma in July 2026.
• The ARGX-119 adimanebart program expanded to include a Phase 1 SC bioavailability study with ENHANZE® in Q3 2026.
• Hypercon™ and Aerocon™ technologies were highlighted as complementary to ENHANZE® for enabling highly concentrated biologics.

Market and Competitive Landscape:

• ENHANZE® technology is used in ten commercialized products across over 100 global markets, touching more than one million patient lives.
• The company holds partnerships with major pharmaceutical and biotechnology companies including Roche, Takeda, Pfizer, Janssen, AbbVie, Eli Lilly, Bristol-Myers Squibb, argenx, ViiV Healthcare, Chugai Pharmaceutical, Acumen Pharmaceuticals, Merus N.V., GSK, and Incyte.
• Hypercon™ technology has been licensed to Janssen, Eli Lilly, argenx, Vertex Pharmaceuticals, and Oruka Therapeutics.

Risks and Challenges:

• The company incurred intellectual property litigation costs of $7.5 million in Q3 2026 related to patent infringement litigation against Merck Sharp & Dohme LLC.
• The company faces risks related to the timing of regulatory approvals, development delays, and commercialization of partnered products.
• Forward-looking statements involve risks including judicial decisions related to patent injunctions, potential expiration of patent terms, and changes in market conditions.

Management Commentary and Tone:

• Dr. Helen Torley, President and CEO, described the quarter as "exceptional," citing record revenue levels and milestones that expand opportunity and diversify revenue.
• Dr. Torley highlighted the Dutch patent court victory against Merck as an important step in protecting intellectual property and preventing the launch of Keytruda Qlex in multiple European markets.
• Darren Snellgrove, EVP and CFO, expressed pleasure in raising guidance due to strong financial performance and noted the successful completion of a $1.5 billion convertible notes issuance.
• Management emphasized a disciplined capital allocation strategy, focusing on high-return organic opportunities and maximizing long-term value creation.

Analyst Questions and Answers:

• No specific analyst questions and answers were included in the provided press release text.

Other Key Points:

• The Dutch specialized patent court of the Hague found Merck Sharp & Dohme B.V. infringing an MDASE™ patent and granted an injunction prohibiting the manufacturing, offering, placing on the market, and importing of Keytruda Qlex in Belgium, Denmark, France, Ireland, Italy, Sweden, Switzerland, and the Netherlands.
• The company repurchased approximately 0.8 million shares for $67.2 million in Q3 2026, bringing total share repurchases for 2026 to $400 million.
• The company completed the issuance of $1.5 billion in convertible notes, enhancing financial flexibility.
• Amortization of intangibles expense increased to $29.5 million in Q3 2026 from $17.8 million in Q3 2025, primarily due to the acquisition of Elektrofi, Inc. in November 2025.
• Research and development expense increased to $27.8 million in Q3 2026 from $17.3 million in Q3 2025, driven by the acquisition of Elektrofi and Surf Bio, Inc. in Q4 2025.
• Selling, general and administrative expense increased to $58.2 million in Q3 2026 from $46.1 million in Q3 2025, due to increased consulting fees, litigation costs, and compensation expenses.