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

Good morning, everyone. My name is Jess Fye. I'm a senior biotech analyst at JPMorgan, and we're continuing the 40th Annual Healthcare Conference today with Halozyme. I'm joined by the company's CEO, Dr. Helen Torley, who is going to give a presentation, and then we're going to go into Q&A after that. If you want to ask a question, there's a blue, ask a question button on your screen. Enter it, and then it'll send it to me, and I can ask management during the Q&A session. So with that, let me turn it over to Helen.

Thanks, Jess, and I'm delighted to be here to provide an update on the Halozyme growth story. This presentation is also available on the Halozyme website. I'll begin on Slide 2. In the course of all of my presentation, I will be making forward-looking statements, and I refer you to our SEC filings for a full listing of the risks and uncertainties. And moving now to Slide 3. I'm pleased to begin this presentation with highlights from our 2022 financial guidance. Our total revenue guidance is projected to exceed $500 million for the first time in company history. Our revenue guidance range is $530 million to $560 million, which represents 23% to 26% growth. over 2021. Importantly, our royalty revenue is projected to grow by $100 million for the second year in a row and achieved approximately $300 million in total, representing 50% growth over prior year. And the strong revenue growth is resulting in strong projecting operating income of 32% to 36% growth over 2021 to a range of $350 million to $380 million. I'll move now to the EPS guidance. And as a brief reminder, the 2022 guidance and our year-over-year comparison is impacted by the onetime reversal of the tax valuation allowance event, which occurred in the third quarter of 2021 and which resulted in a few dynamics. This is why we provide both GAAP and non-GAAP guidance. I'm going to begin with the non-GAAP guidance of our EPS, which is in the bottom row, as this excludes the onetime income benefit of the tax valuation allowance reversal from 2021, and I'll also say, as a reminder, 2022 is the first year of tax expense, which we project to be $0.55 to $0.60 per share this year. With that context, the non-GAAP guidance for 2022 is $2.05 to $2.20, which is up from our guidance of $1.90 to $2 for 2021. Recalling that the '22 number is impacted by the tax expense of $0.55 to $0.60. Moving now to our GAAP earnings per share. Our guidance is $1.90 to $2.05 and with the year-over-year comparison impacted by both the onetime income of $0.97 a share in 2021, which was a result of the tax valuation allowance reversal, and also the first year of tax expense of $0.55 to $0.60 a share, and this compares to $2.60 to $2.70 projected for 2021. And so with this strong operating performance, let me now move to our capital allocation priorities for 2022, which are shown on Slide 4. Our capital allocation priorities are unchanged. Firstly, we're investing to maximize ENHANZE revenue growth and durability. In 2022, we're going to be increasing our investment in ENHANZE to expand capacity and to develop a next-generation API, which has improved yield. And we're also investing to develop a new rHuPH20 which has extended room temperature stability, which we're seeing as being complementary to but distinct from ENHANZE. Secondly, we're going to continue to return capital to shareholders through share repurchase. And thirdly, we'll continue to seek to acquire a platform technology where Halozyme can operationalize and create additional value and which can add to and further extend our revenue durability. Let me move now to a review all of the ENHANZE business, which is on Slide 5. The 2021 was an inflection point year for Halozyme. Our top catalyst was the unprecedented speed of the uptake of DARZALEX FASPRO in the United States. In 2021, FASPRO, which is the subcutaneous version of daratumumab using it Telezymes enhanced technology overtook the daratumumab in terms of share of sales, becoming the #1 in U.S. sales of daratumumab. Outside the U.S., I'm pleased to say we also saw strong market receptivity with DARZALEX subcu demonstrating strong share gains, a pattern also seen in prior ex-U.S. launches with ENHANZE products. And we exited 2021 with an addition to 5 approved products using ENHANZE, our broadest and largest pipeline of potential future royalty-bearing launch products with a record 16 products in development. Those demonstrated success in the U.S. and also outside the U.S. and the rich and exciting pipeline provides a very clear path for strong royalty revenue growth for many years to come, as I'll illustrate on Slide 6. Let me start with the headline here. For 2022, we project royalty revenue to grow by $100 million year-over-year to achieve approximately $300 million. Notably, this is the second year of projected growth of $100 million with 2021 royalty estimate of $200 million, up from $89 million in 2020. This growth has been driven predominantly by subcutaneous DARZALEX and also by Roche's Phesgo, our 2 most recent launch products. And as we project forward looking at 2027, we see the potential to achieve approximately $1 billion in royalty revenues based on the currently approved products and products projected to be in clinical development with ENHANZE by the end of 2022. I will note that this is a non-risk-adjusted number and assumes global launches in all indications. Now moving now to 2031. We project a clear path to and the potential for royalty revenues to exceed $1 billion in 2031. And this is going to be driven by 3 dynamics. First is the ongoing growth of the products that are creating the $1 billion potential. The second will be new launches that are not in our current financial projections, resulting -- and these will result from current and new partners advancing additional subcutaneous products into development in late 2022 and beyond. And the third is the royalty contract terms, including both the durability of our revenues and also the royalty rate over time. Over the next 20 minutes, I'm going to be reviewing each of these dynamics in detail and why we create such a compelling opportunity for long-term royalty revenue growth. Let me now move to describe ENHANZE and our ENHANZE business model, which will begin on Slide 7. ENHANZE is Halozyme's proven and ENHANZE technology. It's a leader in enabling rapid subcutaneous delivery of therapies, which require volume of 5 milliliters or more to deliver subcutaneously, which means to deliver it underneath the skin. When ENHANZE is co-formulated with therapies, it enables increased fluid flow and dispersion of all that therapy into the subcutaneous space. So for patients instead of time-consuming multiple intravenous infusions, the therapy can be given in just a minute in this subcutaneous injection. Our partners value this for the potential for competitive differentiation. The potential to reduce the treatment burden for patients and also for the potential for new intellectual property that can be granted for the co-formulated product. Now moving to Slide 8, and I'll describe how we make money on ENHANZE. Our partners license exclusive access to use ENHANZE with a specific target, which is a drug with a specific mechanism of action, for example, anti-CD20 or anti-PD-L1. In return, our partners will pay royalties, development and commercial milestones and they purchase the drug product also called API from Halozyme, each of which represent the revenue streams for Halozyme that are illustrated on this slide. I'm going to focus on the royalty revenues, which are on the top row, which is our recurring revenue stream. We receive on average a mid-single-digit royalty on net sales across all of our products. In general, we receive royalties for a minimum of 10 years from the first launch with a 50% step down in the royalty rate if there are no remaining patents. Deeming additional exclusivity for the co-formulated product with ENHANZE through the issuance of co-formulation patents for novel findings is the key part of our strategy to increase and extend the royalty revenue durability. When granted, in general, these co-formulation patents have a favorable effect on the length of the royalty term extending it longer than the 10 years, and they can also delay and push out the time to any step back. So with that, our relative revenues that you see, are currently the largest revenue component and they're projected to further increase to represent approximately 65% of the revenue in 2025. With this business model, the opportunity for multiple co-formulation patents and our contract structure, it's easy to see understand why our focus is to support our partners moving products into development to launch and also to support them in submitting co-formulation patents, as this results in meaningful milestone revenue for Halozyme, but also future royalty revenue growth. Let me move now to an overview of our pipeline, which is shown on Slide 9. Our current pipeline is comprised of Waves 1 to 4 and the future potential pipeline in Wave 5. We introduced this concept of waves to help illustrate the power and the potential of our broad pipeline. Waves 1 and 2, which are on the far left are the currently approved products. The 2 most recent approvals Janssen's DARZALEX FASPRO and Roche's Phesgo drove the more than doubling in royalty revenue in 2021. And as I review in just a moment, will drive royalty revenue growth for years to come. Wave 3 is made up of the 3 products that are currently in Phase III. These have the potential to launch in the 2023-2025 time frame, adding revenue and growth as early as 2023, based on what we've seen as a standard development time line of approximately 5 years. Wave 4 is comprised of the 13 products that are currently in or have completed Phase I development. If development proceeds for these products, they have the potential to launch in the '25 to '27 time frame, adding revenue and growth beginning as early as 2025. And driving the potential for additional growth in 2027 and beyond is Wave 5, which will be comprised of products that enter development later this year or in the next several years. We're already hard at work at creating this fifth wave. I'll move now to Slide 10, as this illustrates how the potential royalty revenue from these waves build upon each other. Our portfolio of Wave 1 to 4 products creates the potential to grossly achieve the approximately $1 billion of revenue in 2027. Now this projection is a non-risk-adjusted number, assumes that 20 products currently in wave 1 to 4 launch globally in all indications by 2027. And it assumes that several co-formulation patents that were recently submitted and are under review today are granted. The drivers of continued royalty revenue growth after 2027 are also illustrated, in the far right-hand column, which is cycled 2031 potential. These are the potential for Wave 5 launches I just discussed. These are not in our current projections, and they will add revenue in 2027 and beyond. These can provide an offset to any reduced revenue from any step downs in royalty rate that we might experience at that time. There's also potential for new co-formulation patents that will be submitted in the upcoming years, which is granted and can have the effect of extending the royalty term to longer than 10 years and also push out and delay any time to any step down. And finally, a new opportunity, I'll be discussing more later related to our planned introduction post 2027 of a new rHuPH20, which has extended room temperature stability and has patent projections to 2032 in Europe and 2034 in the United States. Let me now provide a little additional detail on select products in our portfolio with the goal of highlighting the exciting growth potential of our portfolio, and I'll begin on Slide 11. Illustrated here is dramatic growth in our royalty revenues, which has been driven by the Wave 2 launch products, beginning in mid-2020. This more than 100% year-over-year royalty revenue growth to achieve our estimate of $200 million in royalty revenue in '21, was driven predominantly by subcutaneous DARZALEX with ENHANZE and also Roche's Phesgo. And we project strong continued growth of both of these products contributing for years to come. And I'm going to illustrate this by a bit more of a description of subcutaneous DARZALEX. Moving now to Slide 12. We really are still in very early innings of realizing the full subcutaneous DARZALEX royalty revenue. On the left, is a chart of the analyst consensus projections for daratumumab, which includes both the IV and the subcutaneous sales. The brand is projected to grow approximately 37% in 2021 to just under $6 billion in revenue and to achieve $10 billion in annual total revenue in 2025. This is clearly a fast-growing brand. If we move to the bottom of the slide -- sorry, the right hand of the slide and look at subcutaneous conversion, Halozyme estimates today that the annualized share for subcu in 2021 was 58%. With September U.S. reported at 74% and ex U.S. reported approximately 6% and growing. The peak share of subcu has not yet been achieved. So when we contrast the subcutaneous royalty revenue in '21, which was based on an annualized subcutaneous share of 58% on a total DARZALEX sales growing to $6 billion and look at the projected 2025 royalty revenue, where DARZALEX total sales are projected to be $10 billion and where the annualized share will be greater than 58% and we conclude that the clear remains strong royalty revenue growth potential for DARZALEX subcu with ENHANZE for years to come. And we've seen the dramatic impact on the royalties of the Wave 2 launches. Let me now turn to Slide 13 and our Wave 3 launches, which has an even greater potential in terms of analyst projections and for total innovator product sales. The 3 products that are listed here, which are Bristol-Myers Squibb's nivolumab, Roche's Atezolizumab and argenx's Efgartigimod are all approved IV products to date, with analyst projection of a total of revenue potential exceeding $20 billion in 2025. Based on our standard development time of approximately 5 years, we project the potential for these Wave 3 subcutaneous products to launch in the 2023 to '25 time frame. Now what's going to be key for Halozyme is going to be the pace and the peak over the conversion to subcutaneous. I'm sure everyone is very familiar with Opdivo and also with TECENTRIQ. So I'm going to spend a few moments on Efgartigimod which launched under the brand name of Vyvgart and which has the potential to be the next ENHANZE subcutaneous launch in 2023. So on Slide 14, which is shown here, let me begin by describing what efgartigimod is. It is a first-in-class anti-FcRn with a potential in a broad range of serious autoimmune diseases. In December of 2021, argenx received its first approval for IV efgartigimod, which was in generalized myasthenia gravis. Analyst consensus revenue projections are approximately $2.5 billion which is actually based on quite a wide range of individual projections, reflecting the evolving range of assumptions on the number of indications that will be approved and also the [Indiscernible] share penetration into each of these indications. Now we certainly believe in the potential for efgartigimod here to be a blockbuster brand, given that large unmet need that exists in the indications argenx is pursuing. If I move now to the bottom of the slide to subcutaneous development, argenx has integrated ENHANZE broadly into its strategy and vision for efgartigimod with 4 Phase III studies for 4 distinct indications currently ongoing. The first projected readout is in myasthenia gravis with data projected in the first half of 2022 and possibly during the first quarter. On Slide 15, I've got the drivers of subcutaneous uptake and how that might apply to efgartigimod subcu. And we actually see several similar drivers and dynamics for efgartigimod subcu to those we saw with DARZALEX FASPRO in the United States. After decades of work by biogenic, efgartigimod is clearly a very important first launch for the company. The anti-FcRn space is one which is highly competitive. And for argenx, establishing winning differentiation, including with a rapid subcu injection, we believe will be important. So we show that the patients will be receptive to the potential for a new therapy and a new therapy that has a reduced treatment burden, particularly in the form that a subcu injection could bring. And in our assessment, the physician and practice dynamics for the rheumatologist and immunologists who are treating these conditions also support subcutaneous delivery. So we very much are looking forward to the subcu data readout in the first half of 2022 and to the potential for a 2023 launch for subcu efgartigimod. Let me turn now to Slide 16, and I'm now will describe the wave 4 portfolio. I think what is remarkable about our portfolio of Phase 1 product is the bridge and the depth. As you'll note on the top part, analyst consensus in 2026 for total IV and subcu of the parent products here, where projections are available, exceeds $55 billion. You'll also note that the products are in a broad range of therapeutic areas, really supporting biotech and pharmas, increasing focus on subcutaneous delivery. In addition, many of the products we are working on are already approved for IV administration, which is an important derisking event. And importantly, we project that at least 5 of these products shown here will advance into Phase II or Phase III testing in 2022, which is an important step towards commercialization and towards the revenues. Of note, we have to date, 100% success rate for approval for products entering Phase III. Let me highlight our most recent partnerships that we signed in 2021, which was with ViiV, a GSK company, and this is shown on Slide 17. These license enhance with the goal of significantly reducing the number of treatment days for patients with HIV. It's their goal to be able to deliver treatment for both the setting of preexposure prophylaxis and also for the treatment of HIV as 4 subcutaneous doses a year or even 2 subcutaneous doses a year, contrasting that to daily oral therapy. Each of these treatment settings are projected to be $5 billion market opportunities in total. These have license access to 4 targets, 3 of which are small molecules and 1 of which is a monoclonal antibody. In a recent R&D Day, we've indicated that they expect Phase I data for 2 of these targets in 2022, and this includes cabotegravir and they're broadly neutralizing antibody N6LS. ViiV is clearly moving at a rapid pace, and we're delighted to be supporting them in their mission for HIV patients. Let me move now to Slide 18. I mentioned that we're working with both small and with large molecules. This demonstrates the broad applicability and compatibility of ENHANZE, and illustrated on this slide are examples of monoclonal antibodies, bispecific antibodies and small molecules that are currently in development with ENHANZE. When ENHANZE was created, great thought was actually given to assuring it would be compatible with co-formulated -- when co-formulated with multiple different types of products. So when a partner approaches us, our first test is compatibility. This is usually strong, and we then proceed with a high degree of confidence into clinical trials to confirm that ENHANZE will support successful subcutaneous administration. With this broad applicability, our unrivaled leadership in rapid large volume subcu delivery, the terrific partners we have, and the broad and significantly derisk portfolio, this gives us confidence to establish our 2025 goals, which are illustrated on Slide 19. In 2025, our goal is to have at least 10 products using their hands approved and generating royalty revenue. Our goal in '25 is also to have 10 products and Phase III development with the goal to launch and generate royalty revenues beginning in 2026. And we also plan to have created 10 new opportunities that will enter development in the next years that will be in wave 1, 2 or 3 development in 2025 with potential to generate royalty revenues beginning in 2027. So once again, the waves of launches that gives us the conviction for ENHANZE royalty revenue growth and durability. Now on Slide 20, let me spend a moment on our plan to develop a new rHuPH20. We're pleased to capitalize on an opportunity to further increase and extend our revenue durability by advancing to develop a new rHuPH20, which has extended room temperature stability. We're seeing increase in subcu delivery of small molecules. And with this, this new rHuPH20 offers a new option for both existing and new partners. For those interested, for example, in self-administrative at home of small molecules, where a lack of a need for refrigeration or a low need for refrigeration can be seen as advantageous. This new rHuPH20 is patent protected to 2032 in Europe and 2034 in the United States. Turning now to Slide 21. To summarize, we're projecting strong royalty revenue growth to 2027 and well beyond. And this growth, as I've described, is going to be driven by the number and success of the launches, particularly in the post '25 time period when the products can be expected to be in a rapid revenue growth phase, and also driven by the number of co-formulation patents that are granted. Our growth is projected to be further accelerated by the introduction of the new rHuPH20, which will occur in the post-2027 time period. Let me now address a question that comes up, and that's a potential for biosimilar impact and specifically address what we see are several unique dynamics around the loss of our rHuPH20 exclusivity beginning on Slide 22. Our base composition of matter patents for rHuPH20 last till 2024 in Europe and 2027 in the United States. Often with biotech products with exclusivity loss, there can be a sharp drop in revenue, sometimes referred to as a patent cliff. This is a result of biosimilar companies launching and taking a substantial share of the innovator product and also price erosion. This, we believe, will not be the case, and indeed is not possible with our enhanced portfolio. Distinctly from the usual dynamic, our $1 billion approximate and royalty revenue potential is not based on a single product, but it's based on a greater than 20 products. We project and expect that multiple subcu products with ENHANZE will be protected at that time by co-formulation patents. And for a biosimilar company contemplating ENHANZE where only a portion of the $1 billion may be addressable, this represents a high cost and complexity for a more limited return than other options that might be out there. I'll turn now to 23, and I want to further add some reasons for our conviction regarding the durability of our royalty revenues. And this includes the fact that many of our partner products were also partner -- patent-protected, sorry, beyond 2027. And our partners have a strong focus on safe and reliable API. These are flagship products often and so safe and reliable API is a key. With more than 500,000 patients treated with ENHANZE, we have been well characterized and established safety track record. And I can tell you that very often, the very first question, potential new partners ask us relate to safety and immunogenicity risk, which is a real risk when you combine 2 biologics together. This immunogenetic risk can really only be evaluated in the study of large groups of patients. And clearly, with ENHANZE, we can provide data now across a range of products. In addition, over the years, we've continuously worked to improve our API. And as you just heard, we're now investing to bring a next-generation higher yield, low-cost API to further strengthen our position as a strong partner. We believe that this winning combination of high-quality plus low-cost API will result in continued strong collaboration with our partners and durability of our revenues. Let me move now to Slide 24, which illustrates the multiple launch waves and the potential for multiple co-formulation patents in each of those waves, which together with the new rHuPH20 are the compelling drivers of our royalty revenue growth to 2027 and well beyond. Let me move now to Slide 25. Having described our enhanced growth story that's resulting in the increasing operating income, I want to move now to our second capital allocation priority, which is returning capital to our shareholders. And I'll begin on Slide 26 with the milestone revenue. And this is because these have been a key contributor to our cash flow, and have enabled our commitment to capital return through share buyback. Over the last years, I have provided 3-year guidance on milestone revenue, which is shown in the green bars and the blue bars is our performance against that. Two key takeaways on this slide. Firstly, our 3-year milestone revenue projections have increased over time with the maturing and expansion of the portfolio. And secondly, we are met or are on track to meet our guidance in each period. I'll note at the bottom that for this 3-year period of 2022 to 2025, our guidance for total milestones, which includes development, commercial and new agreement milestones, is higher again at $450 million to $500 million. On Slide 27, I'm providing a summary of the status of the 2 share buyback plans. We completed our first planned 3-year share buyback of $550 million in just 2 years and completed that in October of 2021, achieving a very attractive price per share of $24.72. In December of 2021, we announced our second larger share buyback plan of $750 million over 3 years inclusive of a $150 million accelerated share repurchase, which was initiated in December of 2021. The projected growth of ENHANZE is what's providing us with the opportunity to return capital through share buyback to the benefit of all of our shareholders while maintaining sufficient firepower for our M&A. Now on Slide 28, I'll close by returning to our financial guidance highlights. We project revenue will reach a record level of $530 million to $560 million in 2022, representing 23% to 26% year-over-year growth. Our royalty revenue is projected to grow by $100 million for the second year in a row, achieving approximately $300 million, which is a 50% projected growth over 2021 estimate. We look forward to another strong enhanced operational year in which we also aim to execute our share buyback plan and identify M&A opportunities as well. I thank you for your attention, and I'm pleased to take any questions now.

Great. Thanks, Helen, for the presentation. And as a reminder, if anyone watching has a question, you can use the blue, ask a question button, send in questions through the portal. Maybe to stick with DARZALEX. And maybe I'll add FASPRO in here, too. Those products have been on the market for about 18 months now. How much more growth do you think they could drive? And what do you see driving that growth?

Yes. Thanks, Jess, for that. Yes, we see strong growth still to come for both of those products. If I begin with DARZALEX. I think some people may not recognize that while we've seen strong share gains in the U.S. and ex U.S. in 2021, the average share across the whole year is still approximately in our estimate, about 58% globally. Now we also know we're in a circumstance where the overall brand is continuing to grow remarkably with analysts projecting close to $10 billion in 2025. So if we take that dynamic that we're only at an average share of 58%, and our brand is going to grow from -- total brand is going to grow from $6 billion to $10 billion. We see dynamics there showing a clear path to continued royalty growth for years to come for DARZALEX subcu. Turning to FASPRO, it also only began its rollout in European and ex U.S. markets really beginning at -- in January of 2021. And so we know that the process of gaining reimbursement in different countries is still ongoing. And so this is going to be a great story of continued quarter-over-quarter growth for some time to come as well. And we do expect to see a strong contribution from FASPRO to our overall royalties in 2022 as well.

There's a question in the portal here. Not sure how much color you can provide, but is there any color you can offer regarding which product or products drive the latest revenue guidance?

So our revenue guidance, and that's thinking to look forward to the potential for $1 billion in 2027, it includes the currently marketed products and also the products that I showed in Waves 3 and Wave 4. So wave 1 to 4 of the products that are illustrated in the presentation deck that drive that potential. Now we assume a global launches in all indications, and it is a non-risk-adjusted number. But as I illustrated in the presentation, many of the products that we're working with are already approved as IVs. And so the risk of our portfolio is less than a general development portfolio, as we don't carry that specific risk of will the product in its initial formulation get approved. So if you want to kind of do the tally of all of the products, I have everything that's in Wave 1, 2, 3 and 4.

Okay. And I guess, of the 3 products in Phase III between Opdivo, TECENTRIQ and efgartigimod. Can you tell us when to expect Phase III data for each of those and which one you expect will be approved first?

Yes. So I'll begin with efgartigimod. I believe this morning that argenx confirmed first half data for their Phase III study for efgartigimod subcu, maybe even as early as the first quarter. Now they also are waiting for long-term safety data to come in, so they haven't given a specific filing time line. But we do think that efgartigimod has the potential to be our first launch, all this launches in 2023. BMS has provided no specific updates on the timing for Opdivo, but we do know they continue to make with their Phase III study. And for Roche's atezolizumab, they also haven't provided any update, but as many investors point out to us on clinicaltrials.gov they have a completion date or a nasal completion date for the study mid this year. So we don't know exactly what that means. But in summary, efgartigimod is the one where we see potential for the earliest launch in '23 with the other ones potentially launching anytime between '23 and '25. We just don't have specifics there.

Okay. And with north of 10 Phase I trials, can you give us any specifics around which ones are sort of farthest along and could move to Phase III first?

Hard to do that because, obviously, we are always bound by our partners' confidentiality. And so I really can't say that. But what I will say is, we're very excited that 5 of these products will move into Phase II or Phase III development based on latest partner plans. And as those happen, we obviously will be announcing that and those trials will be posted on clinicaltrials.gov. So stay tuned. I think the message here is it's an exciting in that dynamic portfolio with this setting up the future potential waves for additional launches.

Okay. You talked a little bit about the value to Halozyme from the co-formulation IP. Can you spend a little more time walking us through the process for pursuing and attaining those co-formulation patents when you're working with your partners?

Yes. So co-formulation patents are granted by the patents office, if they see some unexpected or novel finding that is not obvious. That's the basis of it. So as we start to do formulation work with our partners, get the Phase I data, start to get clinical data. Our team, so our scientific experts and our alliance managers sit with their counterparts in our partner companies and evaluate the data, obviously, to inform the next stage of design, but also to look for nonobvious or new findings that were unexpected. And so those have been identified across a range of areas, which includes is the formulation, unexpectedly stable, is there unexpected difference in efficacy between -- or safety, frankly, between the IV and the subcu? Or is there an unusual pharmacodynamic effect that was not anticipated? And so we work with our partners to identify that and then our partners take the lead in creating the documentation to submit those applications to the patent offices.

Got it. You alluded to the potential for business development. Are there any platforms in particular that you think would complement ENHANZE?

So our goal with M&A is to identify a platform where the Halozyme skill set is able to operationalize it to deliver incremental value over what we had acquired -- of what we have paid for the company. So it actually does with our great and talented team, allow us to look at a range of different types platforms. We'd like it to have a royalty model as we think our ability to commercialize that type of thing, we've clearly demonstrated with ENHANZE. So I can't say any more than that on specifics, but there definitely are platforms out there that fit that model that have the same similarities to ENHANZE of being able to have a great licensing model where we provide support and expertise, but we don't provide a high level of investment to advance and grow that portfolio.

In your mind, do you think that 2024 and 2027 represent relevant dates when you're considering business development? Or do you kind of evaluate these opportunities irrespective of those ENHANZE IP dates?

Yes. Our M&A opportunity is really to continue to identify ways to increase and extend our revenue durability. So that increases design to -- delight our shareholders. So we are looking at any time. We just want to look at the fit and what it does to the overall value that Halozyme is delivering to our shareholders.

Okay. Great. Well, it looks like we're about out of time here. So we'll leave it there. Thank you, Helen, so much, and thanks, everyone, for tuning in.

Thank you so much.