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

Good morning. My name is Todd, and I will be your conference operator today. At this time, I would like to welcome everyone to Halozyme Investor Update. [Operator Instructions] Please note today's call is being recorded, and I'll be standing by if you should need any assistance. Now my pleasure to turn the conference over to Tram Bui, Halozyme's Vice President of Investor Relations and Corporate Communications. Please go ahead.

Welcome to Halozyme's Virtual Investor Update. Let me begin by briefly reviewing today's format. We will have a presentation followed by a Q&A session. During the presentation, we will be displaying a slide deck that will advance with each speaker's comments. On today's call, we will be making forward-looking statements as shown on Slide 2. I would also refer you to our SEC filings for full list of risks and uncertainties. I will now turn the call over to Dr. Helen Torley, President and CEO.

Thank you, Tram. And moving to Slide 3. At Halozyme, we have a clear vision to transform the patient treatment experience so that breakthrough therapies fit the patient's life. Today, we achieved this through our innovative ENHANZE and autoinjector technologies. Shown on Slide 4 is our agenda for today's call. I am delighted to be joined by Mark Snyder, our Chief Legal Officer; and Nicole LaBrosse, our Chief Financial Officer. Yesterday, we announced the granting of a new product by process patent ENHANZE by the European Patent Office. Mark will begin our presentation today by providing an overview of the patent and the expected impact of this patent on royalty rates. Following this, Nicole will review the implications of the new patent on our 2024 guidance and 5-year outlook. We will then be happy to take your questions. I'll now hand the call over to Mark.

Thank you, Helen. As noted, Halozyme has been granted a new European patent that protects the ENHANZE commercial product or rHuPH20 that Halozyme provides to its ENHANZE licensees. The new patent complements Halozyme's existing portfolio of patents that are licensed in its ENHANZE licenses. I'll provide some context on that portfolio of patents and the impact of the new patent on ENHANZE licenses. In addition to our ENHANZE patents, our licenses cover the patents we obtained from our collaborations with our licensees. I will conclude with some remarks about how these collaboration patents extend the durability of Halozyme's royalty revenues. Moving to Slide 5. Halozyme discovered and developed the first soluble human-derived hyaluronidase that was active at neutral pH and how to manufacture the commercial product. Our innovations enabled a safe and effective way of subcutaneously administering drugs and biologics that in the past have only been administered as an intravenous infusion. The Halozyme ENHANZE innovations are protected by patents owned solely by Halozyme. We think about this portfolio patents in 3 main categories. Patents that claim ENHANZE compositions, patents that claim methods of using ENHANZE to administer a drug, and patents that claim methods of manufacturing ENHANZE. All of these patents are licensed in our ENHANZE licenses with one limited exception, one of our recent licenses does not include our manufacturing method patents. In the past, we have focused our public comments on the subset of Halozyme's composition patents and for the rest of my comments, I will also focus on the composition patents to highlight the exciting new developments. There are multiple ways to protect compositions under the patent laws. Our ENHANZE composition patents include patents that claim specific amino acid sequences and structures and patents that claim products made from Halozyme's proprietary biologic manufacturing methods. In Europe, our patents that claim only manufacturing methods also protect under European patent law, the products directly obtained from the patented methods even if those products are not expressly claimed. I will now take you through some details of these composition patents and why they are important on Slide 6. We have spoken in the past about our composition patents that claim specific amino acid sequences and molecular structure of rHuPH20 that we refer to as ENHANZE. These patents are licensed in every ENHANZE license. Patent coverage extends in the United States to September 2027 and outside of the United States extends to March 2024. Despite the expiration of some of these patents outside the United States, for the reasons we discussed in our prior business update, we expect Halozyme's royalty revenues for existing licenses and future licenses to extend far out into the future beyond the expiration of all our ENHANZE patents. Importantly, our ENHANZE composition patents also include patents that claim or cover products derived from our manufacturing methods. These patents cover the ENHANZE commercial product that Halozyme supplies to its licensees. We are now also pleased to be able to share with you that on June 5, 2024, Halozyme was granted a new patent in Europe that expressly claims the ENHANZE product, produced from our protected biologic manufacturing methods. This new patent will be validated in 37 European countries. In the United States, we also had a reissue patent pending that has similar claims to this new European patents. These issued in pending patents are also licensed in every enhanced license without exception. Those licenses automatically include all new patent [indiscernible] during the term of the license that cover these subject matter of the license. Patent coverage in Europe extends to March 6, 2029, and will be the same in the United States if the pending reissue patent in the United States is also granted. Now, moving to slide 7, What does this mean for our licensees and investors. Well, it means that the starting royalty rate in the Janssen license for sales of licensed products in Europe will be maintained from the validation date of the new European patents until March 6, 2029, which is about 5 years longer than previously estimated. This is because patents covering compositions of matter for ENHANZE prevent reduction in the royalty rate paid by Janssen on sales of the licensed products through the expiration of the patents, unless the patent is validated earlier without the possibility of further appeal. The new patent does not extend outside Europe, and as a result, will not impact reduction in the royalty on sales outside the European countries, where it is validated. Royalties under Halozyme's other ENHANZE licenses are not expected to be impacted. That is because, as I will discuss in a moment, there is an issued or pending collaboration patent for co-formulated products under those licenses that extends the royalty payment period at the starting royalty rate beyond March 6, 2029. I will now give you a graphic representation on Slide 8 of the expected impact on our licensed products in Waves 1, 2 and 3, including the Janssen license. At our business update in January 2024, we provided you with a similar chart showing our expectations for certain Wave 1, 2 and 3 products in terms of the period in which royalties would be paid in the royalty rate. On the left side, we list the license products and summarize the expected durability impact of the issued or pending co-formulation patent unless the pending patent has not yet published. The bar chart shows how far out into the future we expect to obtain royalties under our ENHANZE licenses for each product. The dark green portion of the bar indicates the expected royalties being paid at the starting rate, and the lighter green portion of the bar indicates the expected royalties being paid at a reduced rate. For DARZALEX subcutaneous, royalties are now expected to resume being paid in Europe at the original starting rate from the validation date of our new European patents until March 6, 2029. We have added a blue box to the chart that shows the additional period of time, represented by a a purple bar that we now expect rate in the Janssen license to remain at the starting rate before adjustment to the lower rate in 2029. This extends the time for any reduction in the rate where we have these composition patents validated to March 6, 2029. I will conclude with a few remarks about Halozyme's collaboration patents on Slide 9. Collaboration patents are distinct from Halozyme's ENHANZE license patents, since they result from our collaborative activities after a license is signed. Our ENHANZE licenses require licensees to pay royalties and milestones during the term of the licenses, and that term is typically the longer of a fix period of at least 10 years and extends out to the expiration of any Halozyme ENHANZE patents or collaboration patents covering the subcutaneous product. The royalty rates for calculating royalties on net sales are set at the time we sign the license and the royalty rate debt applies typically increases with sales volumes. The rate can also be reduced, in some cases, up to 50% when our patents covering in hands expire, and there is no collaboration patent covering the licensees subcutaneous product. As previously noted, our license with Janssen is a bit different, and the collaboration patents do not extend the term beyond 12 years for paying royalties fully through the expiration of the patent or prevent reduction in royalties once the Halozyme ENHANZE patents expire. All of the approved products that utilize ENHANZE and all of the products in development from Wave 1, 2 and 3 have collaboration patents granted or pending. With this track record of success, we are confident that additional collaboration patents will be granted as new products are approved using ENHANZE. Collaboration patents provide exclusivity for the combination product that includes ENHANZE and typically are jointly owned by Halozyme and its licensees. I will now graphically illustrate on Slide 10, the benefit to Halozyme of collaboration patents and how they are additive to the ENHANZE licensed patents. In the chart, the gray banner represents commercial sales over time. The Y-axis of the chart represents relative royalty rate and the X-axis represents time. We show graphically that royalties for the fixed term are paid at the original starting royalty rate represented by the purple shaded area in the chart and are reduced once the Halozyme ENHANZE patents expire in March 2029 and remain at that level until the end of the fixed term. However, when a collaboration patent covers a licensed product as represented by the green shaded area, both the time period for paying royalties is extended and the royalty rate is preserved for the remaining royalty period to prevent reduction when Halozyme's ENHANZE patents expire. The combined effect is meaningful and demonstrates how impactful co-formulation patents can be to maintain the durability of Halozyme's royalty revenues even well beyond the expiration of Halozyme's ENHANZE patents. Halozyme is pleased to share these developments with you today to give you a better understanding of our ENHANZE licenses. Moving now to Slide 11. I will turn the call over to Nicole.

Thank you, Mark. As you've just heard, the newly issued EU patent has the effect of reinstating the original royalty rate in the Janssen license for sales of DARZALEX SC and amivantamab subcu upon approval at the mid-single-digit rate in Europe from the validation date until March 2029. This is about 5 years longer than previously estimated. Recall that our previous projections included the impact of a royalty rate step down in Europe for both of these products. Therefore, I am happy to share that we are updating our 2024 guidance and 5-year outlook, to now reflect the additional royalties to be earned related to the increased royalty rate now applying in Europe. Beginning with our 2024 guidance on Slide 12. We are updating our full year guidance to reflect the additional royalty contribution from DARZALEX SC beginning in June 2024. Royalties for the year are now expected to be $520 million to $555 million, an increase from our previous guidance range of $500 million to $525 million. This now represents annual growth of 16% to 24%, an increase from 12% to 17% growth. The quarterly cadence of royalties in 2024 remains consistent with our prior comments, where the second quarter will be similar to the amount recognized in the first quarter. This is due to the timing of this update occurring late in the second quarter. We then expect sequential growth in the third and fourth quarters to achieve the full year amount of $520 million to $555 million. The increase in royalties is the driver for increase in total revenue guidance. Total revenues for the year are now expected to be $935 million to $1.015 billion an increase from our previous guidance range of $915 million to $985 million. This now represents annual growth of 13% to 22%, an increase from 10% to 19% growth. The update to royalties translates to even greater EBITDA expansion than previously projected. With 2024 adjusted EBITDA, now projected to achieve $555 million to $615 million, an increase from our previous guidance range of $535 million to $585 million, and now represents annual growth of 30% to 44%, an increase from 26% to 37% growth. Non-GAAP diluted EPS is now expected to be $3.65 to $4.05, an increase from $3.55 to $3.90, representing annual growth of 32% to 46%, an increase from 28% to 37% growth. Turning now to an update on our 5-year outlook, starting on Slide 13. Growth rates for our long-term view are calculated from midpoint to midpoint of the ranges. Both royalty revenue and total revenue are now increased in each year of the 5-year outlook. We now project additional royalties to be earned in each year, with the 5-year royalty CAGR increased to 20% from 18%. Year-over-year growth is now expected at or greater than approximately 20% in the next 4 years, tracking to exceed $1 billion in royalty revenue by 2027. Note that our royalty projections continue to include an assumption that amivantamab will launch in the U.S. and the EU in 2025. And that there will be a reduction in the royalty rate applicable to both DARZALEX SC and amivantamab SC for U.S. sales in 2027. Recall that these 5-year royalty projections only include all the products that are currently approved across our 2 technology platforms and 3 additional products projected to be approved by 2025 and does not reflect the potential for additional growth when additional products in our pipeline are added to the portfolio. Total revenue is now expected to achieve a 5-year CAGR of 16%, an increase from 14% in our previous projections. This growth is largely driven by royalty growth. We continue to project achievement of $1 billion in total revenue by 2025 and $1.5 billion in 2027. Moving to Slide 14. The impact to the bottom line demonstrates increased growth in EBITDA and EPS. We project growth in adjusted EBITDA in the high 20% and in the 30% year-over-year with an increase in the 5-year CAGR to 25% from 23%. We continue to expect to achieve $1 billion in adjusted EBITDA in 2027. Similar growth rates are seen in non-GAAP diluted EPS, which only includes the impact of share repurchases through 2023 and the potential benefit of additional share repurchases are not reflected. On Slide 15, we've provided more details on growth year-over-year. I will highlight that we now see an acceleration of margin expansion over this horizon, with adjusted EBITDA margins now projected to reach as high as 61% in 2024 and as high as 75% in 2028. With that, I'll now turn the call back over to Helen.

Thank you, Nicole. That concludes our remarks. Operator, we are now ready to open the call for questions.

[Operator Instructions] Our first question will come from Jessica Fye with JPMorgan.

Congrats on this update. I had two, first, curious about the time frame when we could hear about similar IP for the U.S. formally? And then second on amivantamab, is there any co-formulation IP issued or pending there? And if so, when could that extend to?

All right, I'm going to turn both of those over to Mark.

Thanks, Jess. In terms of the time frame for similar IP in the United States, as noted, we do have a reissue patent in the United States that is pending. We can't predict precisely whether or not that will grant or a time frame for it to grant with the patent office. Obviously, we do believe it will grant. What I can say is that we have confidence that it will be taken up for examination by the patent office this calendar year. But we don't have a precise time estimate. That said, bear in mind, our other composition matter patents, which we've been talking about for quite some time, that extends to September 23, 2027. So there's a bit of time for us to get through the prosecution of that re-issue patent application before there would be any kind of a reduction in the royalty rate for sales in the United States. Second, with respect to amivantamab and collaboration IP, we're not free to be able to talk about intellectual property filings that are not public. And so we can't really talk about that. But just looking at what we've talked about with respect to all of our Wave 1, 2 and 3 products where there is collaboration, intellectual property pending, I would just use that as a guide for what to expect with respect to amivantamab.

I have a follow-up. I'm not sure if you'll be able to answer this, but do you guys have any hypothesis for what appears to be better efficacy with subcu versus IV amivantamab?

Yes. Thanks, Jess, for that question. Yes. As people may have seen at ASCO last Friday, there was a presentation that showed that there was a very interesting finding on the exploratory overall survival that the subcutaneous delivery of amivantimab was actually statistically superior to the IV. Two factors are playing there, Jess, is we believe the overall exposure in the time the patients were spending with a higher level of exposure to amivantamab because of the pharmacokinetic effect of the subcu delivery, possibly contributed to that. And the second one, and this is a very exciting area that's getting more and more attention is because when you deliver drug subcutaneously, there are traffics through the lymphatic system. They are exposed to more of the immune cells there, and that could be causing a greater efficacy of amivantamab through that lymph trafficking, very interesting exploratory data we've been working on with [indiscernible] University for a number of years with regard to that. So those are the 2 hypotheses and certainly is very exciting, and we know it's very much grab the attention of the oncology community to think about what other therapies could be improved there. Obviously, it's a core mechanism for the PD-1s and PD-L1s, but there are multiple other therapies like amivantamab being a bi-specific where this may be possible, too. So look to hear us talking more about this in the future.

Our next question will come from Vikram Purohit with Morgan Stanley.

We had 2 as well. So first, to clarify on the new patent that's going to be expiring in March 2029. Do you anticipate there being any term extensions possible for this patent in the EU? And then secondly, have you been able to discuss this new IP through recent BD discussions? And if not, and if you're going to be factoring them into future BD discussions, how do you think those conversations might change as a result of this newly issued patent?

Yes. Mark will take the first one, and I'll take the second one. Thanks Vikram.

Thanks, Vikram. The new patent -- right now, we're not anticipating any term extensions beyond the March 6, 2029 date.

All right. And then in terms of discussions with BD, obviously, this just issued yesterday. So no, we haven't, but it's obviously something we will be sharing in our ongoing BD discussions. I think the reaction very much is going to be one of the partners and potential partners being delighted with this additional patent protection. This new patent will provide for them with regard to the manufacturing process all the way now through March of 2029. So we think it's going to be a very welcome addition to our patent portfolio.

Understood. And Helen as a follow-up, do you expect the pace of BD to potentially change versus what you had kind of telegraphed with your 1Q earnings update as a result of this IP? Or do you still think that the cadence is going to be kind of in line with what you had mentioned previously?

Yes, we talked in the past that IP is always a focus for discussion in these conversations with our potential new partners. However, they're looking for are the advantages that ENHANZE brings in terms of competitive differentiation? So based on that, I don't think it's going to change the pace. And we'll be providing, obviously, the usual business updates in August on our quarterly call. But this is just a welcome addition to that conversation in IP.

Our next question will come from Mike DiFiore with Evercore ISI.

Congrats on the news. Two for me. First one, just out of curiosity, this EU application was originally filed back in 2009. Like why does it take so long to be granted? Or did something recently change at the EPO that caused them to revisit this patent? And my second question is just a clarification on the pending patent language mentioned for ocrelizumab in one of your slides. Any update on the timing as to when that patent may be granted?

Yes, I'll turn that over to Mark.

Thanks, Mike. In terms of the filing of this particular patent that was just granted yesterday, it claims priority back to 2009. So we had an original filing of what we call a parent patent application back in 2009. And these claims stem in this patent that was granted stems from that original disclosure that was filed back in 2009. The patent itself was not filed at that point in time, it's filled more recently. And so that's why it's just recently issued. It's not as though it's been pending for 15 years. So that explains why we're just seeing a grant today. In terms of the pending patents...

Ocrelizumab?

That's correct, for ocrelizumab, I'm sorry. We can't really share anything with respect to the prosecution of our partners' activities and working with us on collaboration patents. So we don't have anything further we can share today.

Our next question will come from Mohit Bansal with Wells Fargo.

One clarification and one other question. So are you at the liberty to talk about what percentage of DARZALEX ex-U.S. sales are European? I know this is not your place, but again, if you have some color would be very helpful? And number two, in terms of the patents for the checkpoint inhibitor or PD-1 and PD-L1, I know you have not talked the Opdivo coformulation, but is there a key difference between these 2 patents or they are part of a similar family patterns between Tecentriq and Opdivo?

All right, I'll turn to Nicole for the first question. And then Mark will tackle one is there a difference between the approach to filing co-form patents for PD-1 and PD-L1.

Thanks, Mohit. So we can't give the precise breakdown. Janssen doesn't provide that precise breakdown related to these specific EU countries. But what we can share and a data point we look at is that in 2023 of the total DARZALEX sales, 46% related to OUS sales. And I'll just highlight that, that does includes sales from large pharma markets, for example, Japan, Canada, South America in addition to the EU regions that we're talking about today.

And with respect to the approach on patenting with respect to the PD-1 and PD-L1 targets, the way -- you should think about this as the every single target, the way that collaboration IP is looked at really depends on a complex set of factors that relate to the target, the disease state, the drug, its formulation, dosing, the modality of action and what happens in clinical trials, both during and after administration. So what might be observed with respect of what might be patentable for one drug with respect to target would be entirely different potentially for other drugs. And so, there's no one size fits all, and we wouldn't necessarily map over from a drug's interaction for one target to another target.

Our next question will come from Corinne Johnson with Goldman Sachs.

Maybe a couple of questions from us. On a clarification point, I guess, it sounds like the amivantamab partnership agreement is basically the same as the agreement in place for DARZALEX. Could you just confirm or provide any like differences? And then are there any additional patentable opportunities that you see like we could expect to see of all over the next couple of years or could you expect that to be kind of from the ENHANZE specific patent perspective?

Yes, I'll turn it over to Mark.

Thank you, Corinne. The amivantamab collaboration falls under our Janssen license. And so the way to think about that is, yes, that it's consistent with the way that DARZALEX falls under our relationship with them.

And then new patents. So any other areas we're exploring for ENHANZE that could result in new patent mark?

Yes. In terms of additional patentable areas for ENHANZE, we, of course, have our collaborations and partnerships where we are pursuing the collaboration IP and that's something that we highlighted, of course, in the presentation today. With respect to ENHANZE, we are constantly innovating. We are protecting those innovations and looking at our portfolio and seeing if there are other ways that we can protect our innovations and add value to our licensees. But at this time, we haven't identified any additional IP rights that would extend beyond March 6, 2029.

Our next question will come from Joe Catanzaro with Piper Sandler.

I guess I just had really one quick one and I guess, a point of clarification. So for the the U.S. pending patent as it relates to this product by process IP. I understand the timing is hard to predict. But it sounds like if I understand it correctly, our assumption should be that if that patent is issued, its expiry will also be March 2029. Can you just sort of confirm that or not?

Yes, that is correct. When it issues, it's based off the same parent application that I mentioned before. And so the expectation is it will also expire if it's granted it will also expire on March 6, 2029.

Our next question will come from Brendan Smith with TDCowen.

Maybe first, just wanted to take in again kind of on the latest share repurchase plan and what we should maybe expect if you're thinking about a fairly steady cadence each quarter moving forward? Just kind of give us a sense of what you're able to share with us there? And then maybe secondly for I kind of wanted to just ask about the potential Wave 4 products. Kind of wondering how you're thinking about when some of those might get integrated into your guidance? Maybe what's the most important ones from your perspective there are kind of the more important inflection point kind of dictating that decision?

All right. Nicole, you do address the share repurchase, and I'll talk the answer to Wave 4.

Yes. Thanks, Brendan. In regards to share repurchases, we call our Board did authorize a new $750 million share repurchase plan in the first quarter. So that remains intact and available for our use. We are completing the final tranche of our prior plan at the moment under an ASR, and we will continue to evaluate the best approach of returning our capital to shareholders throughout the year, as we have always done.

Yes. And Brendan with regard to the Wave 4 products, I'll highlight 2 of the Wave 4 products that are in Phase III at the moment, down that is Bristol's nivolumab/relatlimab combination product, as well as Takeda's 20%. We don't have a specific time line as to when we'll update the guidance for that. What we wanted to do when we gave you the royalty guidance was based on products that were either approved or where we had a strong line of sight to upcoming approvals such as with amivantimab. So we will check-in obviously, the approval time line for additional products. And as we believe they are largely derisked, that would be an appropriate time to potentially update the guidance. But we wanted to be sure that people were looking at our royalty guidance, recognizing that all the products were approved or had positive Phase III data or there was a very strong indication that Phase III data was going to be positive. So that's the way to think about the timing and what would drive us to provide any updates.

Our next question will come from Mitchell Kapoor with H.C. Wainright.

Congratulations on the patent. This is -- actually, this is Dan speaking for Mitchell. And we had a few questions if we could. We're curious what manufacturing methods, does this patent protect and if there are ways to manufacture the product in alternative formats that might lead to a similar compound? And also as an add-on, I thought the lymphatic transport stuff was really interesting. Did the teams have any ideas on biomarkers that might be able to track that for the future?

All right. Mark, would you address just describing the manufacturing methods that are covered and could ENHANZE be made in a different way?

Thanks, Dan. In terms of the manufacturing methods that are covered, we have patents covering our manufacturing methods. This new European patent actually covers the product that results from that. Biologic products are heavily influenced by the manufacturing process parameters and how something is manufactured. And so, that's why we think this is such great news and such great value to our licensees because this covers the product that we provide to our licensees. But we do have additional patents as well. They cover our manufacturing methods precisely for just the manufacturing methods themselves. That said, remember, we are the pioneer in this space. We are the company that developed first, the use of human-derived hyaluronidases for converting intravenous treatments to subcutaneous administration and their manufacturing methods. And as a result, by being first, we think we have the broadest scope in terms of the protection afforded to the manufacturing, and we think that those patents are broad and do provide value to our licensees. As noted, they're included in every single one of our licenses with the exception of just one more recent license agreement.

That's great. And with regard to the lymphatic transport, we did mention this is an exciting new area. We're going to look for a forum to provide some updates about it. I can't answer specifically today the answer and biomarkers, but I certainly know this is one of the questions that is being evaluated at the moment, and we look forward to continuing to lead the exploration of this space -- could -- I think, result in some remarkable opportunities to improve efficacy and get an improved risk-benefit profile for product delivered subcutaneously.

Our next question comes from David Risinger with Leerink Partners.

Congratulations, Helen and team on the updates. So I have a couple of questions, please. So 3, which cover different topics. So first, just thinking about the comment that was just made about Halozyme's innovation, could you just talk a little bit about Merck's Korean partners hyaluronidase? I'm assuming that they were able to engineer around Halozyme patents, but is Halozyme pursuing litigation against that Korean company? Second, with respect to OCREVUS subcutaneous, the PDUFA's in September, could you discuss its profile versus the IV and any clinician feedback or commentary on that subcutaneous profile and its differentiation. And then third, with respect to M&A, considering the additional cash flow into the company in coming years. Obviously, you can buy back more stock as people have noted. But could you just talk about M&A prospects as you see them, Helen?

All right. So Mark, I'll ask you to tackle the question that David asked with regard to the Korean company, Alteogen, who are developing hyaluronidase. And what we know about that and any plans for litigation, I think David asked...

Very good. David there is no commercial product out. We're not aware of anything that's been approved with respect to the Green company noted. And so we don't know for sure what we know is based on purely their public statements and documents that are published. And from what we see, we're not convinced that they have designed around all of our IP. Remember, we have our ENHANZE IP, and we also have a substantial amount of intellectual property that relates to a variety of different technologies that Halozyme has innovated and explored in the space over many years. But to the extent that we discovered that they're producing something that is infringing, we will take a look at that when we have information that allows us to make that determination, and we'll address it.

It's great. I'll tackle the one on OCREVUS subcu. So yes, we're very excited about the PDUFA date coming up in the U.S. in September of this year. Recall for IV OCREVUS, it is the leading brand in the U.S. and EU 5, for patients with multiple sclerosis because of its outstanding efficacy profile. And importantly, its great long-term data. The IV is given every 6 months, and it requires, however, between the treatment and observation approximately 3.5 to 6.5 hours. Now, we see subcu, which is designed to have a noninferior PK profile, It was able to deliver the drug in just 10 minutes. And so we're getting that great contrast again between a very long, difficult time for the patient sitting in an infusion suite for multiple hours like with daratumumab down to just 10 minutes. And I think what's very exciting about OCREVUS is when Roche talks about it, they see it just as happened with daratumumab and moving into front line. They say the subcu as a great opportunity to expand and grow the market for OCREVUS. To date, the treatment is limited to centers, often academic centers, particularly in Europe, where they have the infrastructure and capacity to do IV infusions. What Roche has talked about is the fact that when we have this subcu, it is going to be able to be given in community hospitals, potentially in doctors' offices and so patient access to care is going to expand considerably, but also patient's [indiscernible] care is also going to expand. And so we see it as a strong growth opportunity, talking about the subcu being on its own standalone. And this is one where we're going to be monitoring as much growth in the market as conversion from the IV. So we're very excited and do think of this as just a terrific opportunity for patients. On M&A, I'll say that we continue to be very active and looking for opportunities to deploy our capital to add additional revenue growth and revenue durability. We continue to look in the space of drug delivery to find opportunities that would do that and add to that revenue profile. And also, as we've talked about in the past, we are expanding into adjacent areas to look where it's a great match for our capabilities and demonstrate its skills. But again, where we see that very nice complementarity in terms of the current strong revenue growth profile to add on top of that. So no other updates other than that, other than to say we're very actively evaluating that as we believe that, that is a good use of our capital for our shareholders if we can find the right opportunity.

At this time, we have no further questions in queue. This will conclude the Halozyme Investor Update. Thank you for your participation. You may disconnect your line at this time, and have a wonderful day.