Halozyme Therapeutics, Inc. (HALO) Earnings Call Transcript & Summary

Okay. Well, good morning, everyone, and welcome to the 11:20 a.m. session of 42nd Annual Goldman Sachs Global Healthcare Conference. My name is Graig Suvannavejh. I cover both European and U.S. biopharma names here at the firm. It's my great pleasure to be hosting Halozyme Therapeutics today in a fireside chat. And with that, let me welcome company President -- company CEO, Helen Torley. Helen, it's great to see you again and welcome.

Thanks so much, Graig. Really looking forward to today.

Sure. Halozyme is a very unique company and a unique story, I think. It's a company we've been positive on for some time. But for those who may be new to the story or perhaps revisiting the story, can you please maybe just start with some brief highlights about the company, kind of where it came from and where it is today?

Yes. So Halozyme is today a profitable company, and that's a result of the exposure we have to multiple leading pharma and biotech companies through the products that we work with. This is all -- profitability is driven by our lean and leverageable ENHANZE business model where we license our proprietary enzyme -- it's called ENHANZE, which is rHuPH20 -- to leading companies that enable their IV drugs to be given subcutaneously or underneath the skin. And in return for that, we receive milestone payments at an average of mid-single-digit royalty on net sales. This business model has already resulted in 5 approved products in global markets. And today, I can say that Halozyme is certainly experiencing our largest commercial transformation, which is driven in large part by the mid-2020 DARZALEX subcutaneous launches using ENHANZE. And near term, we see great potential for additional growth. If we look just over the next several years, for example, to the '23 to '25 time frame, we're poised for additional growth. And this will result from a third wave of potential launches with 4 exciting products already expected to be in Phase III by the end of this year, including argenx' efgartigimod, BMS' Opdivo and Roche's Tecentriq.

Okay. Great. You referenced a third wave of launches and perhaps for those who aren't familiar with the story, that implies you had a first and a second wave. So maybe can you kind of describe those first and second waves for us? And how different do you think the third wave will be relative to the first 2 waves?

Yes. Well our first wave were the launches that happened between 2013 and 2017. And that was Roche's 2 amazing cancer products, Herceptin and Rituxan. And we also launched HyQvia, which is now Takeda's immunoglobulin. And we consider that the Wave 1 launches. Wave 2 launches are the ones that happened in mid-2020 and that was DARZALEX subcu, which is Janssen's product, and also Roche's Phesgo. And so now we're on to Wave 3, which will launch in that '23 to '25 time frame. We're very excited about each and every one of those products. They are all either multibillion products today or have the potential to be multibillion-dollar products. And we see a strong value proposition for patients moving from receiving lengthy IV infusions to getting subcu infusions, which generally are shorter, simpler for the patient and can be given in different settings in many instances, which obviously reduces the burden and potentially the cost of care.

Yes, certainly. Given the explosion in IV-based products over the past couple of decades, I would think, at least on paper, that you are targeting large and attractive markets. And I do think that -- I think in your 1Q earnings deck, there might be a relatively newer slide that talks about kind of the potential market that you see in terms of the potential opportunity. So I guess a big picture question is, can you use ENHANZE for all products? Or are there certain characteristics of certain IV drugs that makes ENHANZE more amenable?

Yes. The great part is that we have found that ENHANZE is compatible and can enable subcu delivery of virtually every IV monoclonal antibody, bispecific, small molecule or oligonucleotide that we have tested. And so this is because of its formulation being compatible with many more drugs and its mechanism of action being a temporary degradation of the hyaluronan underneath the skin, basically creating a passage where fluid can then be injected and exposed to the lymphatics for absorption. So very compatible with a broad range of products. And I will just state that in terms of the size of the market, as an example, we looked recently, and today, there are over 600 monoclonal antibodies in clinical trials. So it certainly is -- actually all of these areas continue to be a very strong focus for innovative drug development.

Great. I appreciate that. I do want to talk about the addressable market and then you just mentioned there are 600 IV-based products that are antibodies that are in the clinic today. There is, at least based on my conversations, still some investor questions and debates around kind of the underlying IP of your company. And as we think about the potential of using ENHANZE for perhaps the next wave of new IV-based therapeutics, how should we be thinking about that underlying IP and anticipated loss of exclusivity in the 2024, whether it be Europe for 2027, whether it be in the U.S. time frame?

Let me start just by talking about how partners when they come to talk to us think about that LOE. And we do not find that the LOE, which just to be specific, for the composition of matter patents is 2024 in Europe and 2027 in the U.S., recall that we have a unique market position. If you have a large volume intravenous drug and you want to deliver it in a short single subcu injection, we are the only option. And so we find that partners, while they evaluate obviously the IP, are still signing deals. And great proof of that is the Horizon deal that was signed at the end of 2020 and also argenx in 2019. We really do have something unique that many companies are now looking for as they're contemplating taking they're major medicines subcutaneously. So we don't find that a barrier certainly to signing new deals. And our contract structure, just to add grade, we receive royalties for a minimum of 10 years after our first commercial sale. So for products that are going to be developed and launched between now and, for example, 2027, we will be receiving royalties into 2030s. If there is no remaining patent, we would have a step-down in our royalty rate. Today, it is mid-single-digit royalty, but it will reduce by 50% for the remainder to make up that full 10 years. And we also have this great approach where co-formulation patents are granted, that can extend the duration of time for the royalties as well as push out the times of the step-down. And so from a partner perspective, they need us. And from our business perspective, the way we structured our contracts, we have revenues well beyond 2027 and a clear path to continued growth, which will all depend on the number of launches we have between now and then, and I'm sure we'll talk about our exciting broader portfolio, Wave 4, potentially Wave 5, but also the potential for co-formulation patents. So we do not see this as a worry and there is no patent cliff with ENHANZE.

Yes. Thank you for that clarification because I think it's a complicated or it can be a complicated concept for some, but it's relatively straightforward. So thank you for that in terms of how to think about those LOE issues. Another debate that's related to the LOE issues has to do, and I think you partially answered it in your response, is the ability to attract new partnerships. You did speak about argenx in 2019. You did speak about Horizon Therapeutics for TEPEZZA in 2020. Can you help frame for us maybe how investors should be thinking about the ability to secure new partnerships? And you already have a roster of partners as it is, so is it a situation to contemplate that if you already have a partnership with, say, a BMS or Eli Lilly, that the ability to sign a second partnership either is off the table? Or could you sign additional partnerships with the same company? Just trying to get that dynamic of where that kind of pipeline of partnerships may come from.

Yes. Let me describe how we partner with these leading companies, and we've got 10 companies today who we partner with. We've mentioned Bristol-Myers Squibb and argenx and Roche. We -- but we have many other partners, including Lilly and AbbVie and Takeda. And when we go into these agreements, we generally license the use of ENHANZE with a certain number of targets. And think of a target as being a drug with a specific mechanism of action. And we generally give exclusive rights for using that target. So argenx, as an example, got exclusive access to using ENHANZE with 4 targets. If those current partners have used up all their targets, and I'll use Roche as an example, Roche used up all their targets, we've actually done 2 extensions with them to add more targets on. And so for our current partners, when they go through all their targets and the current partners have about 20 targets overall left to go, which is a very important source of growth for us because those partners look at their portfolios and bring products forward all the time. But that's -- that would be the mechanism there. Let me turn to new partnerships because that's a very important part and we spend a lot of time looking at companies' portfolios, reaching out to them or having them reach out to us to talk about how ENHANZE could work to enhance their competitive differentiation. It is clear that the vast majority of companies who want to work with us today are -- it's all about competitive differentiation and being able to simplify care for patients. And so we engage in discussions. I can say we're in a broad range of discussions today. We never can put a time line on when a deal will be signed because we don't control that. But I am very confident we are going to sign additional deals just based on the tone and tenor of conversations we are still having with these companies today.

Okay. Great. And if I could, I might ask a question just about the competitive landscape. I mean, I think we are aware or at least I'm aware of at least one additional company. So what can you say in terms of like how -- what the competitive impact could there be of there being another company? And do you know enough about their technology at this point to know how similar or dissimilar the subcutaneous formulation technologies are?

Yes. There is one company, as you mentioned, that is purported to be developing a hyaluronidase. At this point in time, they have not published -- I believe they haven't been in clinical development yet or may just have entered. So it's very early. And so there is limited information to be able to say anything about it, Graig. Obviously, it's a space watch carefully. But I don't have enough information to even comment on it because it is still early.

Okay. Great. Maybe we'll move into kind of your near-term growth drivers. And clearly, in the near term while you do have legacy products that are contributing some revenue, I think most of the focus is clearly on the subcu version of DARZALEX. By most measures, if not all, measures, I think it's been a relatively robust launch. And with that in mind, can you frame for us how the success of that product basically ties into your success right now?

Yes. Well, for people not familiar with it, Janssen's daratumumab, treatment of multiple myeloma, it's already a large and growing opportunity, more than a $4 billion brand in 2020 and analysts project it's going to grow to $7.3 billion in 2024. Now what's going to be key for Halozyme is how much all of that is converted to subcutaneous use because recall, we receive across all of our contracts, and we can't give you contract-by-contract specifics, but we receive on average a mid-single-digit royalty across all of our contracts. So just think about the size of that whole opportunity. And depending on how much of that converts to subcu, the revenue to Halozyme is a mid-single-digit percentage of that. So this is very important to Halozyme. As you comment, it's off to a very strong start. We took a look at data 5 months after the launch in October of last year in the U.S. and already 40% share of sales were as a subcu version. That is remarkable. And I can tell you based on comments that the CEO of Genmab, who actually licensed daratumumab to Janssen, has indicated by the end of March that's already grown to 60% in the United States. And I think that I don't believe I've seen as quick of a conversion in the market ever as to what's being accomplished here. We also know for Europe conversion is going well in many markets. There's not the same type of centralized data source. But again, comments from Genmab talked about 90% conversion in the Nordic countries, 30% in some other countries that we're a little bit behind that. So we do know that the market, the physicians and the patients are embracing this. For the patients, the difference is from what is sometimes a 4- to 6-hour infusion, down to 3- to 5-minute subcu. It's remarkable. There's lower risk of infusion-related reactions as well, 35% with the IV versus 13% for the subcu. And when you think about the dynamics of the infusion suite, less nursing time, less oversight, it just is an incredibly strong and powerful contribution. And so this year, we predicted a doubling in our royalty revenues. DARZALEX subcu is the driver of that. We have another launch going on with Phesgo that is also important, but we've indicated that DARZALEX subcu is the key driver of that 100% year-over-year growth in our royalties.

Great. And can you maybe remind for us how you're thinking about the durability of that revenue stream? Certainly, as someone who covers Genmab -- and we'll be hosting the company later today actually in a fireside chat -- I believe that the formulation patent goes out on subcu DARZALEX or FASPRO to 2036. But with that in mind, as you look at your own perhaps internal forecasts and you see a drug as successful as FASPRO has been, can you give us a sense of do you see this continually growing until 2036? Or is there other considerations for us to think as we're modeling the potential contribution of royalties from this product?

Yes, Graig. Based on the confidentiality of our contracts, we're actually not able to talk on a product-by-product basis. So I really can't provide any color related to daratumumab. Obviously, we're very focused on what's going on at this point in time and I'm absolutely thrilled with the speed and rate of conversion. We can talk in generalities about the impact of the co-formulation patents as a separate conversation, where we generally see extension of the duration of royalties and we can see a push out to the time of step-down, but it's on an individual by contract-by-contract basis. And so really, unfortunately, due to confidentiality, that's all I can say.

Okay. And I do think that you did reference Phesgo, which is another product, and I think it somehow gets lost in FASPRO's shadow given the success of FASPRO. But could you remind us of the opportunity that you and your partners see with Phesgo?

Yes. And for those not familiar with Phesgo, this is Roche's fixed-dose combination of Perjeta and Herceptin with ENHANZE, which is for early and metastatic breast cancer. If you're receiving the IV therapies, you receive them sequentially, and that can take up to 19 minutes. With Phesgo, the fixed-dose combination with ENHANZE, it's just a 5- to 8-minute subcu. So again, for the patient, for the patient's carer, these are important differences. As we think about the opportunity here, a good benchmark is to look at Perjeta sales, a key component of Phesgo. And in 2020, those sales were $4 billion. So this is already a very successful drug and a very large opportunity for conversion. And Phesgo launched in the U.S. in the third quarter of 2020 and has just launched during the first quarter actually in some European countries. And obviously, throughout 2021, we're going to see more launches in Europe. In the early launch quarters, the uptake has been slower and lower than the U.S. than we've seen for Janssen's DARZALEX FASPRO. I think that's what you're referring to, Graig. But we are seeing strong quarter-on-quarter growth for Phesgo, and we continue to predict that this is going to continue and that over time, we're going to see a large proportion of patients converting, particularly in Europe and other international markets, but also in the U.S. And so Phesgo will be contributing to our growth. But in terms of rank of -- the degree of impact, FASPRO is going to have a far higher impact in this 2021 time period. But Phesgo will grow and contribute as well over time.

Okay. We talked earlier or you mentioned earlier, argenx's efgartigimod, and we have argenx presenting later today as well. I'll be doing a fireside with Tim, the CEO. Efgartigimod is certainly a potentially very exciting next opportunity for autoimmune diseases. Would you consider that your next real growth driver? Or how do you think about the rest of the pipeline in terms of the products that you think can be very impactful to particularly your P&L? You've got so many products in your pipeline, would love to get your view of kind of which are the next potential great ones.

Yes. I would look at the broad set of what we call our Wave 3 launches we talked about a little bit earlier. These will be the 4 products that are in Phase III clinical development this year. We know 3 of them today. The fourth one will be in clinical development during the second half of this year, and we'll make it public at that point in time. But if we just focus on the 3 ones, and recall, Wave 3 have the potential to launch in 2023 to 2025, so just around the corner. They are BMS' Opdivo and Roche's Tecentriq and argenx' efgartigimod. And for Opdivo and Tecentriq, we are very excited about those. Those are drugs that are in highly competitive basis where the ability to deliver subcu and the potential for combination treatments or putting 2 PD-1 inhibitors, as an example, in 1 single injection offers meaningful differentiation. And so clearly, those are very successful large multibillion-dollar drugs and, again, we see them as exciting. Efgartigimod, as you probably know is -- probably people are a little less familiar with it -- in late-stage development, actually has one of its indications under review, which could be the first indication as an IV for myasthenia gravis. Analysts are projecting this to have the potential to be a $4 billion drug. And this is in autoimmune diseases. And so any disease that are driven by IgG have the potential to potentially be addressable by efgartigimod. And if we think about the 4 indications, that they're currently in Phase III development with us, it's myasthenia gravis, chronic inflammatory demyelinating polyneuropathy, idiopathic thrombocytopenic purpura and pemphigus. These are conditions that have unmet need with the treatments today, many patients are getting IVIG. And so we've got some sense of just the size and opportunity here with probably an incident population in the range of 75,000 patients a year. And so it is a large opportunity. This new way to potentially treat all of this large range of autoimmune diseases driven by IgG, and that's what makes us so excited also about efgartigimod.

Is there a way to think about this upcoming potential Wave 3 -- this set of Wave 3 launches in terms of the noticeable improvement in delivery times of the subcu versus what those original drugs in terms of the infusion from an IV perspective? So clearly, the value proposition, for example, for DARZALEX is perhaps 7, 8 hours that's been condensed to a very short time. And you may know this, maybe you don't, but can you frame for us like whether it's Opdivo or whether it is Tecentriq? Do we have similar magnitudes in terms of the reduction in infusion times?

Well, maybe I can share how we think about it. Obviously, the infusion time is just one of them. But I will say before the launch of DARZALEX and subcu, the primary reason I heard from physicians for wanting to convert was actually a very strong focus on the reduced infusion-related reactions and actually nursing coverage shortages. And so you have to look at each indication I think differently to understand what the key drivers. So duration could be one, having better tolerability given subcu can be another. Site of care. Site of care is a very important one, where IVs generally have to be administered in the care of a health care professional, often in an infusion suite, often in a hospital, often far away from the patient's home. Subcu offers the possibility to have care closer to home and potentially even in the patients home. So for all of these reasons, it's a more complex, I think, situation on a case-by-case basis where duration of administration is just one factor, often is actually a more important key driver that will drive the conversion.

Okay. And then obviously, you alluded to potentially a Wave 4 set of launches. And I noticed on your first quarter of '21 earnings corporate deck, you've fleshed out that pipeline a lot more, at least in terms of the granularity, and so we appreciate that, obviously. Many of those are like in earlier stage. But clearly, there are more compounds that are getting added to the pipeline. And so I know every year, you kind of give a goal around how many new compounds you expect to go into Phase III or Phase II or Phase I. Maybe could you remind us what -- for 2021, what that guidance is in terms of what you anticipate to be newly disclosed or making progress in the clinic since we are at a place that unfortunately can't really disclose everything, every specific product, but any high-level thoughts there?

Yes. So at the beginning of the year, it was our goal to have 4 products in Phase III clinical development across multiple different studies as well as have 12 products in clinical development by the end of the year, which would be influenced by 5 new Phase I starts. And so for -- we entered the year actually with 2 Phase IIIs already ongoing, so that Tecentriq and efgartigimod and a couple of indications. Since the beginning of the year, Opdivo, will be starting their Phase III very, very shortly. We announced that last quarter. And there's a fourth product that will enter in the second half of the year. Excitingly, efgartigimod has expanded their clinical development program, adding 2 additional Phase III studies in the first quarter. So we now have 4 Phase IIIs underway with efgartigimod. And so with the Phase III, expectations are very much tracking to our plan. For Phase I, we have 5 new Phase I starts. Very happy to say that in the first quarter, we were able to announce 2. All of these have occurred, so 2, and we expect the additional 3 in the second half of this year. The 2, that started very excitingly. We talked about Horizon signing the deal with us in November. Horizon has moved at breakneck speed with their Phase I study with subcu and announced on their first quarter call that they already were -- had dosed the patients and were now moving forward to analyze the data and go talk to the FDA about what the path to regulatory approval would be, specifically what the design of the next study they need to do is. So very excited about that. For those not familiar with TEPEZZA, this is a very exciting product for thyroid eye disease, high unmet need area, projected to be a $3.5 billion brand. And so we're very excited to be partnering with Horizon. And then the second one that started was actually a collaboration we have with the NIH Vaccine Research Center, which is for N6LS, which is a broadly neutralizing antibody for HIV. And so I can summarize by saying, we are tracking very much to our expectations for the year with strong execution by our partners and supported by our terrific Halozyme team.

And in addition to helping investors understand what the expectations for 2021 could look like in terms of the pipeline and advancements, I think you've also put out 2025 goals in terms of what you're looking for, in terms of product approvals, how many products you might anticipate in Phase III. Could you remind us what that 2025 guidance looks like?

Yes. I think based on our current portfolio of marketed products and also the products that are in development, these Wave 3 and even some of the Wave 4s, it is our goal to have 10 products that are approved and on the market in 2025 with 5 products in Phase III clinical development with the potential to launch shortly thereafter. And we estimate all of this based on our traditional development time lines, which to date has been 4.5 to 5 years from first-in-human to launch. And so we're applying that to all of these -- all our products in our portfolio. So I think you'll agree that it will be a very exciting and robust portfolio particularly given products we're partnered with.

Yes. And just if I could follow up on that time line that you just laid out for us at 4.5 years from kind of starts to almost finish. What are the variables there? In other words, could some programs take longer? Is there a way to expedite that? My sense is that the FDA, having seen multiple ENHANZE-enabled products, there's probably increasing comfort around what the technology is. And I'm just wondering, for those of us who are trying to model, for example, when Horizon says, hey, we're signing a deal with Horizon to evaluate a certain compound, how should we be thinking about 4.5 years? Is that -- that's just how it is? Or are there opportunities to perhaps even accelerate that?

It's a great point, Graig. And You're absolutely right about the regulators growing comfort with rHuPH20. We now have over 500,000 patients treated commercially with ENHANZE. And so there's a large safety database. So thank you for bringing up that point. With regard to the time line, all of the products that have been approved today, except for HyQvia, all have been in oncology. And so as we talk about the drivers as to what could make it shorter, I think the first one is the FDA was very clear at the Rituxan Hycela ODAC that going forward, a separate controlled clinical study might not be needed for each and every indication. And this could mean leaner, faster clinical studies. So -- but still, I can say that's a conversation our partners have with the FDA. I don't have any evidence yet that I can say exactly how that has played out. The second one is, it is all very indication-dependent. If you were able to do a smaller study with a shorter time to a clinical end point, then perhaps it has been required in oncology, you're absolutely right, those time lines can shrink. And we do have examples at the moment as you're thinking about argenx, who's not in oncology, where the question will be, can they get an even faster time line to approval? Obviously, that is playing out today. They're executing their clinical studies. But those are 2 factors that absolutely could shorten this time line. We are obviously using the 4.5 to 5 years because that's what we can point to and say this is what's happened so far. But we are absolutely working with partners to abbreviate that time line.

Okay. Thank you very much. Clearly, if I move on to financial matters for the company. The transformation of what the P&L looks like for Halozyme has been quite dramatic over the past several years. And you mentioned your very first sentence on this fireside chat is we are a profitable company. Can you just remind us your 2021 financial guidance? And what do you think -- you give a range, which is typical for guidance, but what are the pushes and pulls? And does COVID have to do with any of the kind of the ability to hit the higher end? Or how do you think about your financial guidance for 2021?

Yes. So let me begin with the guidance. Our revenue guidance is $375 million to $395 million, which reflects 40% to 48% year-over-year growth. And this really is driven by a doubling in our royalties that we talked about. I will just also note that we never include the potential for new deals in our guidance. So insofar as if we were to sign a new deal, that would be additive on top of this. Our operating income, our guidance is $215 million to $235 million, which is 59% to 63% growth. And what is so exciting about ENHANZE is our lean and leverageable business model. And as just one other metric, our operating expense guidance, excluding COGS, is in the range of $80 million to $83 million. I'll move on to our EPS guidance and just a little bit of background there. We recently took action to retire a large portion of our deeply in the money 2024 convertible note. And we also completed a sale of $805 million in convertible senior notes that are due in 2027. As a result of that, because of the onetime charges and wanting to truly reflect our operating business, we are now also reporting non-GAAP EPS. So if I can start with the GAAP diluted EPS, that's $1.25 to $1.40. The non-GAAP diluted EPS is $1.55 to $1.70. And so obviously, a very strong picture for 2021 driven by this growth in ENHANZE we've been talking about. To answer your specific question on why we give a range, obviously, there's a number of factors there. Sometimes some of this is being driven by milestone revenues. It is possible a milestone could move from when we expect it in Q4 this year into Q1 next year. It can be the difference of a month, but that could -- so we always have to plan for events like that as we put our guidance out there to not disappoint obviously, but that is why we have a range.

And you do actually, besides royalties, record sales, but the sales can be quite lumpy. And I'm wondering if you can speak to the lumpiness around your sales line.

Yes. And this is really driven by the API sales to our partners. And yes, we do call it lumpy because it can vary quarter-to-quarter depending on which partner is ordering, what that partner's ordering philosophy is, how much in advance they order, and importantly, what their philosophy and safety stock is. And so we predict for the future we're going to continue to see lumpiness. We're going to continue to see some growth in it though as we're now supporting more launches and more sales. But it is going to continue to be lumpy just based on the nature of partner ordering.

I want to quickly turn. We've got about 5 minutes left in our fireside chat, but I do want to quickly turn to other financial guidance matters, which is a guidance that you put out several years ago, which I think at the time was a bit controversial, into 2027 royalty revenue guidance, which was $1 billion. And I think, at the time, it had been perhaps a bit cloudy for investors to be able to get visibility into like how you could possibly get there. I've been covering the company since January of last year. And so with that said, it seems as if the pipeline is fleshing out a lot more. But how can you address kind of any lingering potential investor concerns around being able to actually achieve $1 billion in royalty revenue in 2027.

Yes. When we put this number out, there are a couple of things. We consider it a projection rather than guidance. And that's really great because it's non-risk-adjusted number. But what we do, do is we take a look at all of the products, we have line of sight that are either marketed or in development and we project forward based on our assessment of time lines for development and our assessment for how much of the market we think will convert and what we believe the royalty revenues will grow to over time. And if you think about we're in Wave 2 launches, that is causing 100% growth year-over-year in royalty revenues from what was 90%, approximately $1 million last year to double that. So we're well on our path now just with DARZALEX. The whole goal was to illustrate how each product will add onto stepping stones to get to that $1 billion, and there's a total of 20 products in there today that we do assume global launches in all indications. And I mentioned it's not risk-adjusted. But if you just think about the waves. Wave 2 is today, Wave 3 will come '23 to '25 -- and we've talked about the products there -- Wave 4 will come from the 12 products that are currently in Phase I development or will be by the end of this year. Now if those progress, those would form the next wave of launches. And we haven't talked in summary about Wave 5, but we're not done. Our current partners, as I mentioned earlier, have 20 slots that are open. Any time they can move those forward into the clinic, and I'm very confident we're going to continue to sign new deals, which also will enter the clinic. And so it is this wave after wave of products, each contributing, they all contribute a different amount, but they stack up when you think about it. And so that's why we think the wave concept is so powerful in helping our investors understand where this growth is coming from.

The return in shareholder value appears to have become a very important element of your current strategy, especially as you're a very profitable company. You alluded to some of the things you've done recently. But on the go forward, how should we be thinking about your commitment to shareholder -- returning shareholder value?

Yes. Our strategy is really twofold: one is share repurchase and the second one is M&A. For share repurchase, we made a commitment to do a $550 million buyback at the end of 2019. We have already completed $426 million of that at a share price of $21.99, which versus today's price obviously has been a very successful program. And then for M&A, we believe that if we can find the right platform that leverages our experiences as a company and where, with our skills, we can take a technology, license it to additional companies and enhance the success that the innovator company already had, that will be another good return for our shareholders as we expect to be able to drive more revenues, increase the durability of the revenues as well and add on to the already successful ENHANZE platform without a large risk and without a high expense.

Yes. I've had many conversations with investors. In fact, I was marketing in Chicago not too long ago and spoke -- every account I spoke with was stocking. We talked about Halozyme and we did talk about this topic of M&A. And I do think that there is a large element or some element of the investor base that's a little nervous about this M&A component. And so with that in mind, how could you perhaps soothe any investor fears around the potential of Halozyme maybe doing a bad deal or doing a deal that their back's against the wall and because they said they were going to do a deal and then they've got to do something. So what can you say to that?

Yes. Well, let me reassure investors. We don't feel any pressure to do a deal. We obviously are a very exciting part of the ENHANZE growth, and you will know we haven't put a time line on the deal. We just said this is our capital allocation strategy. So no urgency with that. And we're going to take our time and find something that we believe will add on to the success of ENHANZE. The success of ENHANZE is a particular model, which is high margin, high growth. And our goal is to find a good deal that allows us to share with investors exactly how this new platform will add on to the current success. As I mentioned, it's core that we leverage our core skills and it's core that we continue with a lean scalable business where it's our expertise that is accelerating the growth and potential of whatever platform we acquire. We're actively looking for platforms at the moment and we will continue to do so until we find the right one. And so I more hear from investors, do a good deal, Helen or don't do a deal. And obviously, it's our goal to do a good deal.

Maybe with the last minute or so that we have, maybe as we think about the next 6 to 12 months for the company, you did speak on some pipeline advancements, but could you just maybe summarize for investors what we should be looking forward to.

Yes. I think second half continued growth of our royalties coming from both DARZALEX as the primary driver, but Phesgo also growing nicely as well; an additional Phase III start, bringing us to 4 products in Phase III, giving us that line of sight to the potential '23 to '25 next wave of launches; and obviously, the broadening of our Phase I portfolio as well. And while we've never put a time line on it, we always work towards the potential of signing additional new deals, which also can add and important to not just our financial picture, but also our portfolio. So strong execution so far this year. We're very pleased with our performance and the progression we're seeing and we're going to keep doing it.

Great. Maybe a last question for you, Helen. If you look at the company in perhaps 5 years from now, what would you like Halozyme to look like?

Yes. A multiproduct company that is delivering superior revenue growth and earnings as a result of our lean and leverageable business model. We would hope to, perhaps in that time frame, have acquired an additional platform that's beginning to contribute over and above that already attractive ENHANZE platform already. And we'd be well on our path too to the peak sales of ENHANZE revenue we've talked about earlier.

Fair enough. Well, with that, Helen, thank you very much for your time. Thank you all for joining us and wish you all a great rest of the conference and great rest of the day. Thank you.

That's great. I appreciate it. Thanks, Graig. Bye now.