Out of here. Thank you everybody for joining us again this morning at the Citizens Life Sciences Conference. Really excited to be joined next by Halozyme CEO Helen Torley. Helen, thank you for being with us this morning. You gave guidance and reported earnings a few weeks ago, maybe we just start there at a high level. What drives success in 2026?
Yeah, we're very excited with our growth story, which has been going on for many years and will continue for many years to come. Just as a refresher, in terms of our revenues this year, we're expecting $1.7-$1.8 billion in total revenue, which is 22%-30% growth year-over-year. Now, that is driven by our royalties, which come from our partnered products and ENHANZE. That is expected to be about $1.1-$1.2 billion. Again, growing at the 30%-35% rate. Obviously, because we have a royalty business, we have very strong profitability.
As an example of that, our Adjusted EBITDA is going to be in that $1.1-$1.2 billion range as well. The growth is predominantly the royalties, as you just heard Jason. We're very excited to have three products that are driving the majority of that growth today. DARZALEX FASPRO, which is the subcutaneous version with ENHANZE, is our leading product. argenx's VYVGART Hytrulo is becoming a bigger and bigger dollar contributor with the strong adoption and growth they're seeing, particularly of the pre-filled syringe, so that includes our ENHANZE product, and then Roche's Perjeta used in breast cancer.
Behind that, we've got four more recently launched products, which actually represent a TAM or an opportunity just as big as the first three that really is just in the infancy of the launches. Companies have been working hard to be getting all the reimbursement in place, and I'm sure we'll talk about Opdivo subcutaneous, OCREVUS subcutaneous, RYBREVANT subcutaneous, and Tecentriq subcutaneous are beginning to contribute more in 2026, and that is driving that additional growth as well. That's not it for Halozyme. Very proud that we signed three new deals at the end of 2025 for ENHANZE. We expect more new deals this year and that really is the lifeblood.
These will result in new products launching on and before the 2029-2030 timeframe and some of them after that. Think about these as each representing attractive new royalty streams that are going to add and top and continue that robust growth. That's Halozyme in a summary.
Let's talk about the three products that are driving most of the growth today, and I'm gonna do it probably the one you got asked about least, Perjeta. It took a while to get going, but now it really feels like in 2025, the conversion to Perjeta has accelerated. What have you seen in the market, and what are your expectations for that asset in the, you know, the coming years?
Yeah, Perjeta is a combination of two biologics. It actually contains Herceptin and Perjeta, given in a single injection over about 5 minutes. That is very different from patients who get the IV version, which is sequential therapy, which can take up to 2.5 hours. Transformative experience for patients. We did see outside the U.S. robust adoption, and that's pretty traditional where, Europe in particular, really does embrace subcutaneous delivery, and that's because obviously the patient experience is better, but the overall cost of care is less as well with the subcu because you've got all of the savings associated with less time in the chair, less physician oversight.
In the U.S., it's been more of a gradual uptake, but we're delighted that it's now at 52% share of Perjeta is already converted, and Roche actually put out a new target of 60% conversion by 2028. This is just going to continue that quarter-over-quarter growth. All of the sales of Perjeta are SubQ for us, and we receive a mid-single-digit royalty, so that's why that is becoming such an important contributor to us as well.
Moving on to VYVGART, I kind of view VYVGART as the poster child for where I think the future of infusions is going, and that's more and more at-home use, right? The pre-filled syringe has been a real driver for argenx in the second half of 2025. Just how do you think about what VYVGART can do and how much of the product will be used at home versus in the physician's or healthcare provider office?
Yeah. argenx's VYVGART, an amazing performance. You know, obviously last year reported sales of $4.2 billion, which is 100% year-over-year growth, and it really fueled, as Jason is mentioning, by subcutaneous launch of the pre-filled syringe. The vision that Tim, the CEO of argenx, has had was he started with IV, but for autoimmune diseases, he knows the patients want to be freed from their disease. They want to be able to treat themselves when they want, including at home. He has evolved and invested to move to a 5 ml pre-filled syringe that now the patient administers at home in just 20 seconds.
It is just so freeing up patients from disease as opposed to going for an immune globulin infusion, which is a day or half a day in the infusion suite or an IV infusion. What we saw after the launch in May was increasing conversion and use of the SubQ. What argenx has said is it's really helping penetrate into new physicians treating, 'cause not all doctors want to be doing IV infusions or have the infrastructure to do IV infusions. It broadened adoption that way, but it also for patients moved it earlier in the treatment paradigm, again, broadening the opportunity.
You know, I do see that we're going to see just continued growth in the two approved indications, which is generalized myasthenia gravis and CIDP, and sales of all of CIDP is subcutaneous with ENHANZE today. That is just going to continue as more people become aware of the ease of treatment. You can take this pre-filled syringe on a cruise, you can take it to the golf course, you can take it anywhere. It is going to be the core to all of the new indications that are even being studied. You know, analysts today project that the two currently approved indications will grow from about $4 billion to $8 billion.
argenx is investing in a pipeline and a product, so it has got additional neurology and autoimmune indications which are just going to continue to expand. SubQ delivery, including at home where appropriate, is just going to be the way of the future.
Just remind us to that point, because there are a lot of opportunities for VYVGART to expand. What's included in how you think about your 2026 guidance and the longer-term outlook?
Yeah, when we give guidance, we really just looked at the de-risked the approved indications or any that, as we did our forecasts in 2025, had already very strong phase 3 data. At the moment, we just have GMG. We don't have the recent positive data on ocular as a specific breakout in there, nor do we have seronegative.
Okay.
Just those two indications at this point in time.
Okay. You mentioned growth today is largely those three products, but there are a bunch of products, four roughly, that are driving, you know, the near term and are starting to contribute. When do you think as a collective, those four products actually become really meaningful to guidance?
I mean, in 2026, they are beginning their contribution. You know, I'll just mention a couple of them that I think are particularly notable and perhaps are underrecognized because we're watching them very closely and see a huge value proposition. OCREVUS is a terrific example. It's Roche's drug for multiple sclerosis, an $8 billion drug today, predominantly as an IV. With the IV, the patient, it's a 4-6 hour infusion, and then they have to stay in the infusion suite to be monitored. With the SubQ with ENHANZE, it's 10 minutes and there is a 30-minute observation. Absolutely transformative for patients. Again, autoimmune disease patients don't necessarily want to be sitting in infusion suites.
What we've seen is a robust uptake, 17,500 patients on drug, Roche recently reported. Importantly, this is another instance where SubQ is just not converting IV to SubQ. What Roche has expected and they are seeing is that this will expand the market. Because again, not every doctor has access to IV infrastructure. Not every patient can travel to an infusion center or get a seat in an infusion center because there are capacity constraints. About 50% of the patients for the OCREVUS are coming from conversion from IV, but 50% are brand-new doctors, brand-new patients. Getting that market expansion, which Roche has indicated they expect a $2 billion increase in the overall sales of OCREVUS just because of the SubQ.
Now, that $2 billion plus the $8 billion is our addressable market. We aim and we hope that all $10 billion of that will convert to our ENHANZE. But that is, I think, an incredible example. You know, we can talk about RYBREVANT afterwards if you'd like.
Just on OCREVUS, it does feel like that, you know, Roche is being really vocal about the fact that they are expanding the market. In the past, you know, a lot of the conversations from your partners has been about conversion. OCREVUS seems to be the first example where there's a lot of new patients coming in the door because of the SubQ.
You know, I would argue that has actually happened with Darzalex. It's perhaps not as much discussed, but the subQ, again, Darzalex, 4-6-hour IV infusion, the subQ is 3 minutes. What we heard from Janssen at the time of the launch was this will allow faster, more rapid expansion into the frontline population. Frontline population are the patients who live the longest, and can continue on therapy for many, many years, especially as they may move on to a regimen in second line that still has Darzalex as the backbone.
I would argue that phenomenal growth with $14 billion in sales of Darzalex last year, 95%+ of which is subQ with ENHANZE, where we're getting mid-single-digit royalty, is really that was a market expansion as well, but not described as such. I don't think it would have been as possible to go as fast if everybody was getting a 4- to 6-hour infusion. That, that's one. I do agree with. We talked about VYVGART, and now we've got OCREVUS as another example. You know, the one I was going to talk about was RYBREVANT. You may know that that's Johnson & Johnson's drug for a specific population of lung cancer patients. A terrific drug in terms of its efficacy.
Think about it being very much on a par with Tagrisso, if not even better than Tagrisso. Its uptake as an IV has been limited by a 5-hour IV infusion and 67% incidence of infusion-related reactions. Now, if you have an infusion-related reaction, you are going to feel lightheaded, headache, sweaty, very low blood pressure, and you can even go into anaphylactic shock. That really is a worry of oncologists. Well, I think J&J would agree that has limited the uptake. The subQ study takes that 5-hour infusion to make it 5 minutes, and it reduced infusion-related reactions by a factor of 5-fold. It's only a 13%-14% incidence now.
That has transformed this therapy where it's got the great efficacy and now because of the better safety profile, a fabulous risk-benefit. It is J&J's ambition to create a $5 billion brand from RYBREVANT. They've less than $1 billion today to go to $5 billion. Early indicators I was hearing from investors yesterday are that their IQVIA data is showing a very strong uptake of the SubQ. Not surprisingly, because what a great proposition. That's another market building opportunity for SubQ. I didn't say this at the start, Jason, but we are seeing a new interest, a new wave of interest from pharma and biotech in SubQ.
I think it is that product differentiation, it's a recognition it can grow and expand markets, and then obviously, the recognition that Halozyme has got deep expertise that we can apply to help partners speed their development and get through that regulatory process all the quicker. All of these are terrific examples, and the world is watching and saying, "I would like to do that too.
That's sort of a good point, 'cause you mentioned three deals, you know, at the end of last year. As much as ENHANZE has been around and has driven a lot of success, it's still there are still new partners coming to the table. What's your expectation for the potential for? I guess two questions. One, your current partners to continue to expand their use with other drugs, but also new partners coming on board.
The great answer is yes to both of those. We are seeing our current partners moving more nominations into the clinic. Often when our partners take a deal, they have 1 or 2 drugs in mind, but they reserve some slots. We announced last year 1 of our partners, Roche, advanced another slot in. You're going to hear more about that this year from the current partners just growing and expanding. New partners as well, those 3 deals that happened at the end of last year happened after a period where pharma had slowed down a little bit its decision-making, I think, related to IRA, perhaps the MFN.
It's as though that everybody has got their head around that and is now moving forward to invest for growth, which is where we play such an important role in our partners' portfolio. We ended the year with that terrific true momentum with the three deals, Takeda, Skye Bioscience, and Merus. Very exciting targets, all three of them. Importantly, that momentum is continuing into 2026, and we've given a projection of at least 3 new deals this year. There'll be 1-3 with ENHANZE, but we also at the end of last year acquired a new technology for SubQ delivery called Hypercon, and we expect to have 1-2 new deals from Hypercon this year as well.
Just continuing that enormous momentum that is terrific, this new wave of interest.
Before maybe jumping into the acquisition, it's just one of the earlier stage pipeline, development stage pipeline for ENHANZE now is still robust. Just kind of give us the overview and, you know, what are we expecting to see both from a clinical readout, but also, you know, new clinical programs going into the clinic in 2026.
We have currently about seven products that are in development with ENHANZE. These cover some of the argenx products such as Empasiprubart. There's Takeda's TAK-881, which is a 20% immune globulin. We have a couple of targets that are being developed by ViiV for HIV disease. A diverse portfolio of products that are in or have completed phase 1 development and are progressing, some of which can launch in that 2028, 2027, 2028 timeframe, adding new important royalty streams at that period of time. Now, as we look forward to today with 10 approved products and you know, these seven in development, we expect six new ENHANZE phase 1 starts this year, two new Hypercon starts this year.
Playing that forward a little bit, even with a little bit of a conservative lens, we expect to be having 40 either approved or in development drugs by 2028. That is this new renewed energy and momentum, and there's some very exciting products that we expect to be in the clinic this year and next year, based on the conversations that we're having today.
I know there's not going to be a lot that you're going to say new here, but can we talk about the Merck litigation a little bit? We've seen Alteogen take on a couple of new partners over the last six months. Our assumption is it's likely that their, you know, companies are looking at targets that they can't get through ENHANZE. Just what's the update and what's the potential new learnings we could get from that process this year and next?
Yeah. I'll start with your correct comment that, as far as we're aware, for all of the companies that have approached Alteogen or are working with them, it's a limited number. All of them approached us first, but the target was taken. We've done exclusive licenses on targets like PD-1 and HER2. We can't work with other companies on that. The good news is we're continued to be viewed, and we will always be continued to be viewed as the leader in the space. You know, ENHANZE has now got 1.3 million patients that have been treated. That it just creates an enormous, you know, moat of safety data, expertise, et cetera, for why we will always remain the first choice there.
With regard to the litigation, just a little context there. We have sued Merck for infringing what we call our MDASE patents. That stands for modified hyaluronidase patents. Now, it's very important to say these are a very different family and are not related at all to ENHANZE. Anything that happens in the litigation on MDASE has no read-through or any impact on any of our ENHANZE agreements or ENHANZE royalties. We believe that Merck, through licensing the Alteogen drug and using it to launch the subQ version of Keytruda, is infringing. We have asked in district court that we receive damages because of willful infringement and also create what's called a permanent injunction, which would stop them from being able to continue the commercialization unless they pay us a royalty.
Where we are with that is that we're expecting to meet with the judge in the U.S. in June to hear about the scheduling order. This will be the timeline of the court case. Now, this is not going to be over fast. These litigations unfortunately can be rather drawn out, can take several years, but we feel very confident in the fact that we will prevail, as we do believe and have a lot of good evidence that they are infringing inventions that were created by Halozyme many years ago. Outside the U.S., it's also very active.
I'll just mention that in Germany we actually in the fourth quarter received a very positive outcome in a court case where we got a preliminary injunction that has stopped Merck being able to launch SubQ Keytruda in Germany. There's several other countries where we're pursuing that course as well. Stay tuned in this. We'll provide updates. Most important thing is all upside, no downside whatsoever from the MDASE litigation. As an inventor of this entire space of hyaluronidases, we absolutely feel we must defend our IP and stop infringers.
Yeah. To that point, you are, I think it's fairly straightforward to say that you are the leader in innovating in subcutaneous drug delivery, and you're continuing to do that through acquisitions now, with Surf Bio and Elektrofi. Can you just walk us through, you know, your rationale for those transactions and what you think those platforms bring to Halozyme?
Yes, Sam. In mid-November, we closed on the acquisition of Elektrofi. Some of you may have heard of it. They have a Hypercon technology that takes biologic drugs that generally are at a con of 100 or 120 mg/mL, and can increase that concentration to 500 mg/mL, while still preserving the activity and stability of the drug. If you can imagine you can increase the concentration by 4- to 5-fold, you're reducing the volume. The reason we did this acquisition, while ENHANZE's obviously got a terrific opportunity for certain disease conditions, companies want to have small volume delivery by the patient at home in a simple auto-injector.
ENHANZE's great at delivering larger volumes, but if you can concentrate more biologics down to that 2 mL or below, they fit into a standard auto-injector, and again, the patient can do that at home. That was a bit of the market we weren't participating in today, and that's why we brought the Hypercon technology. Now, importantly, that in our view is the most advanced type of concentration technology with impressive IP. The IP goes out in several families till the mid-2040s. It's our goal to continue the terrific development that Chase Coffman, who is the CEO, and his team have been doing, and we expect products to enter the clinic this year, which was a nice de-risking value inflection in terms of the timing.
This expands our opportunity, as I've just described to you in terms of subcutaneous delivery, so very complementary, but an opportunity where we weren't playing before. In December, we also closed on another acquisition of a company called Surf Bio. That one is out of Stanford. It has a different approach to hyperconcentration, but the same value proposition, able to concentrate molecules, maintaining stability and syringeability up to 500 milligrams per ml, and it does it through a spray drying process.
Now, some people say, "Why did you need two?" We believe that with our expertise, we're going to be able to accelerate the development of Surf Bio, and each partner is going to come to us and may have a different point of view as to a preferred approach to how you get that hyperconcentration. Or we could find out that there are different molecules that fit better to the dehydration process versus the spray drying process. So that's the first reason. It's a technical reason that I think makes a lot of sense. We're expanding our opportunity by having two of these. We also have the potential that I mentioned earlier, we've done exclusive agreements.
Once we do that, we can't participate again, but if we have two hyperconcentration technologies, it is possible that in certain circumstances we'll be able to work with two partners exclusively. Again, this gets to the expanded opportunity or expect higher fees for the one technology if they want to have access to both of them. It just seemed like a no-brainer in terms of expanding our TAM, our opportunity, and the combined expertise of Hypercon and Halozyme is going to accelerate the development of the Surf Bio technology. That's our plan.
Hypercon's a little further down the line than Surf Bio. What gives you comfort that the program, the platform is de-risked, not just from a, you know, can it deliver a low volume, but is it a tolerable administration?
Yeah. At this point in time, neither of the technologies has been in human, so we'll just say that. You were able to look at the toxicology data that has been generated to date, understand exactly what are the constituents of each of the solutions that are going in, and all of that suggests a very strong path to good tolerability as well as retaining the efficacy of the reformulated molecules.
Specifically for Hypercon, you've now given guidance that you think this can be generating $1 billion of royalties. You were very good at predicting what ENHANZE could do when you gave the long-term guidance many years before it actually happened. What drives your confidence that it can happen again with Hypercon?
Yes. For everybody in 2018, we said ENHANZE would be $1 billion in royalty revenues, and it was well below $100 million at that period of time. Really what I have the benefit of, which you don't all have the benefit of, is understanding the partner plans, and the opportunities that are sitting ahead of us. Now, I can not share that because a lot of that is confidential information. That's what happened on ENHANZE, and we actually are achieving the $1 billion this year, a whole year earlier than we had predicted, because we said it would be in 2027. As we closed the acquisition, we took a look at the Hypercon Elektrofi opportunity. Similarly, we have got information from partners.
We've got our own plans as to what we think can happen and, I can't, once again, due to confidentiality, give you the play-by-play, but several things to comment. The market is now much more accepting of sub-Q delivery, embracing of it even. You're gonna see a much faster uptake. We've got partners already engaged. There's already Lilly, J&J, argenx are already partners of Hypercon. And just based on what we expect to proceed with those partners and new partnerships that are under discussion, we expect between 5 and 7 launches by the mid-2030s, and that is what gives me that confidence in that $1 billion in royalty revenues in the mid-2030s.
I know you've been asked about the long-term guidance and whether you'll extend it. Just what are your thoughts here about first of all, I think we have to recognize, like I just said, the fact that you were definitely an outlier in giving that longer term guidance, and even more of an outlier in being right?
Mm.
What are your, you know, the pushes and pulls about extending that guidance out into the 2030s?
We actually in 2023 put out a five-year very detailed guidance that I think we understand is very unusual, but also very helpful to our investors. We did it at that time because we had 10 products that were de-risked, and we could forecast the royalties. Our philosophy is that our guidance should be based on de-risked assets. As we sit here today, we don't have any more of the products that are de-risked. We're still going to continue. We've got guidance out till 2028, Jason. We've got lots of levers that we are pulling at this point in time.
Mm.
We talked about the current enhanced products. We have royalties for many of those products that go out to the mid-2030s and even into the early 2040s. They're going to continue to grow. We've got new enhanced deals happening. Those products will launch in 2029, 2030. That's going to be another source of growth. We talked about Hypercon coming in in about 2030, 2031. That's another source of growth. Surf Bio will follow about 18 months behind that, we estimate. That's another source of growth. Because of the very strong cash generation we have, we also will continue on this path of M&A, adding where we can assets that have recurring royalty-like revenue that results in high profitability. So what a lot of levers we have to pull, and a lot can happen, you know, anytime now.
You know, take it to say that we have got incredible growth ambitions for our product portfolio. Our guidance will be based on the de-risked assets, so you can have confidence in the numbers we put out there as opposed to having to, "Well, I'll de-risk that one by that, I'll de-risk that one by that." That just causes confusion and actually dilutes the power of us putting out guidance based on fully de-risked assets and, as you say, Jason, beating those numbers.
Great. Helen, really appreciate you being with us this morning, and we're looking forward to watching more success this year.
Great. Thank you very much.