Halozyme Therapeutics (NASDAQ:HALO) raised its full-year 2026 guidance after reporting record third-quarter revenue and royalties, driven by growth in established partner products and contributions from newer subcutaneous drug launches.
Total revenue rose 39% to $493 million from $354.3 million a year earlier, while royalty revenue increased 44% to $341 million. Net income rose 41% to $247 million, and adjusted EBITDA increased 35% to $336.2 million.
President and CEO Helen Torley said three existing ENHANZE partners added four targets to their collaborations during and after the quarter. The company also expects 13 ENHANZE-enabled programs to be in clinical development by year-end, up from 12 currently.
Royalty Growth Drives Higher Outlook
Halozyme’s ENHANZE technology enables subcutaneous delivery of medicines that might otherwise be administered intravenously. Its royalty portfolio includes products from partners Johnson & Johnson, Roche, argenx and Bristol Myers Squibb.
Third-quarter royalties from DARZALEX rose 20% to $153.5 million, while VYVGART royalties increased 89% to $88.1 million. Phesgo royalties rose 23% to $34.3 million. Other royalties grew 92% to $65.1 million, helped by Ocrevus Zunovo, OPDIVO Qvantig, RYBREVANT FASPRO and TECENTRIQ HYBREZA, Chief Financial Officer Darren Snellgrove said.
GAAP diluted earnings per share rose to $2.01 from $1.43 a year earlier. Non-GAAP diluted earnings per share increased to $2.39 from $1.72.
For 2026, Halozyme now expects:
- Total revenue of $1.86 billion to $1.925 billion, up $20 million at the midpoint from its prior outlook.
- Royalty revenue of $1.235 billion to $1.255 billion, up $12.5 million at the midpoint.
- Adjusted EBITDA of $1.24 billion to $1.29 billion, up $12.5 million at the midpoint.
- Non-GAAP diluted earnings per share of $8.75 to $9.05, up $0.08 at the midpoint.
Snellgrove said royalties were the main driver of the guidance increase. The company also raised its product sales outlook to $525 million to $540 million and expects an adjusted EBITDA margin of approximately 67%.
Halozyme ended the quarter with $1.08 billion in cash, equivalents and marketable securities and $3.3 billion in long-term debt. It completed $400 million in share repurchases in 2026 and a $1.5 billion convertible note offering, Snellgrove said. The company plans to provide 2027 guidance and an updated long-range outlook with fourth-quarter results in February.
Partners Expand ENHANZE Programs
Argenx added two exclusive targets to its ENHANZE agreement, bringing its total to eight, while Incyte added a target to evaluate subcutaneous axatilimab. Johnson & Johnson added an oncology target in October, Torley said.
Pfizer, Incyte and argenx each advanced an ENHANZE-enabled program into phase 1 development. GSK plans to begin a phase 1b study of subcutaneous belantamab with ENHANZE, which would bring the number of clinical-stage programs to 13 by year-end.
Among commercial products, Torley said Roche reported that global conversion from intravenous OCREVUS to Ocrevus Zunovo had exceeded 20%. Bristol Myers Squibb reported approximately 17% conversion of its intravenous OPDIVO business to OPDIVO Qvantig, with conversion tracking toward the higher end of its ultimate 30% to 40% expectation.
Torley said up to 13 new products could launch between 2029 and approximately 2032 if they advance through development on typical timelines. That projection excludes new indications for existing products.
Hypercon Development and Merck Litigation
Halozyme is also developing Hypercon and Aerocon, technologies designed to produce more concentrated formulations of biologic drugs. Torley said the company expects to complete clinical supplies for two Hypercon partner products in the first quarter of 2027, supporting phase 1 trial starts in the first half of the year.
Halozyme has signed five Hypercon collaboration and licensing agreements covering potential use with more than 20 targets or drugs. Torley said the company’s projection of a $1 billion Hypercon royalty opportunity assumes five to seven products in the clinic before the mid-2030s, with the majority based on already launched products.
On patent litigation, Torley said a Dutch court rejected Merck’s invalidity challenges to Halozyme’s EP622 patent and found that KEYTRUDA QLEX infringed it. The ruling restricts certain activities involving the product in eight European countries; a separate preliminary injunction in Germany had already halted its launch and distribution there.
Torley said Halozyme believes the Dutch ruling affects the ability of Merck’s marketing authorization holder and affiliates to supply KEYTRUDA QLEX from manufacturer BSP Pharmaceuticals in Italy, regardless of destination. She said Halozyme could not assess the potential impact on U.S. supply because it lacked full knowledge of Merck’s supply chain, and added that Halozyme had sued BSP directly for infringement.
In the U.S., Torley acknowledged adverse validity decisions involving multiple Halozyme patents, which she said are distinct from EP622. Halozyme expects an appeal process to last until 2028 and believes it will prevail. She also said the company had not engaged in conversations with Merck.
About Halozyme Therapeutics (NASDAQ:HALO)
Halozyme Therapeutics, Inc is a biopharmaceutical company focused on developing and commercializing drug-delivery technologies that can improve the administration of injectable medicines. The company’s primary platform, ENHANZE, uses a proprietary recombinant human hyaluronidase enzyme to facilitate the subcutaneous delivery of biologic drugs and other injectable therapies that may otherwise require intravenous infusion.
Halozyme licenses its technologies to pharmaceutical and biotechnology companies, which use them in a range of marketed and investigational products.
