Halozyme Therapeutics, Inc. Q2 2025 results
Snapshot
Halozyme Therapeutics, Inc. reported $326M of revenue in Q2 2025, up 40.8% year over year, with diluted EPS of $1.33 and an operating margin of 62.2%.
- Revenue
- $326M
- YoY growth
- +40.8%
- Diluted EPS
- $1.33
- Operating margin
- 62.2%
What management said
- •Helen Torley, Halozyme's President and Chief Executive Officer, who will provide an update on our business, and Nicole LaBrosse, our Chief Financial Officer, will review our financial results as well as our outlook.
- •Certain non-GAAP or adjusted financial measures are reconciled with the comparable GAAP financial measures in our earnings press release and slide presentation.
- •I'm pleased to announce another record quarter, which highlights the significant growth and accelerating momentum we have across the business.
- •Total revenue in the quarter was $326 million, representing a 41% increase over the second quarter of the prior year.
- •This robust growth was driven by continued strong royalty revenue performance, driven by our three established blockbuster subcutaneous therapies, Darzalex subcutaneous, subcutaneous Phesgo, and Vyvgart Hytrulo.
- •This quarter's royalty revenue grew an impressive 65% year-over-year to $206 million.
- •Adjusted EBITDA increased an outstanding 65% over the prior year's second quarter to $226 million.
- •This was driven by the accelerating growth of our high-margin royalty revenue streams, as a result of increasing demand for products, incorporating our leading drug delivery technology, ENHANZE.
- •Based on this strong continued performance and the growth trends, I am pleased to announce that we are raising our 2025 financial guidance for the second time this year.
- •We are now projecting total revenue of $1.275 billion-$1.355 billion, representing 26%-33% growth over 2024.
- •This is a further increase to revenue guidance of $75 million, after raising guidance by approximately $50 million in the first quarter reporting.
- •2025 full-year royalty revenue guidance has increased to $825 million-$860 million, representing growth year-over-year of 44%-51%.
What went well
- •Total revenue reached a record $326 million in the second quarter, a 41% increase over the prior-year period, driven by strong royalty revenue from the three blockbuster subcutaneous therapies Darzalex SC, Phesgo, and Vyvgart Hytrulo.
- •Royalty revenue grew 65% year-over-year to $206 million, with high-margin royalty streams reflecting increasing demand for products using the ENHANZE drug delivery technology.
- •Adjusted EBITDA increased 65% over the prior-year quarter to $225.5 million, outpacing top-line growth and contributing to $98 million in free cash flow.
- •The company raised its 2025 financial guidance for the second time this year, lifting total revenue projections by an additional $75 million.
- •Of 14 identified growth catalysts, 11 have already occurred, including new approvals for Rybrevant SC in Europe, Opdivo SC in Europe, and Vyvgart Hytrulo in CIDP, plus five new indication approvals and three reimbursement milestones.
- •Subcutaneous Darzalex with ENHANZE reached 96% conversion in the United States, with J&J reporting Darzalex revenue up almost 22% to $3.5 billion on share gains in the frontline setting.
Guidance changes
| Metric | Period | Previous | Current | Change |
|---|---|---|---|---|
| Total revenue | FY2025 | raised ~$50M in Q1 | $1.275B-$1.355B (26%-33% growth) | raised by $75M, second raise this year |
| Royalty revenue | FY2025 | — | $825M-$860M (44%-51% growth) | raised |
| Adjusted EBITDA | FY2025 | — | $865M-$915M (37%-45% growth) | raised |
| Non-GAAP diluted EPS | FY2025 | — | $6.00-$6.40 (42%-51% growth) | raised |
| Product sales | FY2025 | $340M-$365M | $340M-$365M (12%-20% growth) | unchanged |
| Collaboration revenue | FY2025 | $110M-$130M | $110M-$130M | unchanged |
Performance breakdown
| Metric | YoY change | Reason |
|---|---|---|
| Total revenue | +41% to $325.7M | Continued commercial success of subcutaneous Darzalex and Phesgo plus robust growth of Vyvgart Hytrulo. |
| Royalty revenue | +65% to $205.6M | Higher-than-expected royalty growth from the three blockbuster subcutaneous therapies using ENHANZE. |
| Product sales | +3% to $81.5M | Mainly driven by higher proprietary product sales. |
| Collaboration revenue | +40% to $38.6M | Milestone recognition of the EU approval and launch of Rybrevant SC in April and a milestone for the EU approval of Opdivo SC. |
| Adjusted EBITDA | +65% to $225.5M | Accelerating growth of high-margin royalty revenue streams. |
| R&D expense | Decreased to $17.5M from $21M | Lower compensation from resource optimization and labor allocation, partly offset by timing of ENHANZE investments in the new high-yield rHuPH20 manufacturing process. |
| SG&A expense | Increased to $41.6M from $35.7M | Increased compensation expense and consulting and professional service fees. |
Earnings call themes & trends
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| Merck IP litigation and PGR challenges | — | District court case for infringement of 15 MDASE patents awaiting a scheduling order; four Merck PGRs instituted with a March 2, 2026 hearing and first decisions expected June 2, 2026. | rising |
| Growth catalysts driving royalty inflections | — | 14 catalysts identified, 11 already realized, described as the broadest set in company history. | rising |
| CMS draft Part B guidance / IRA risk | — | Company submitted a comment letter arguing the draft policy is flawed; final guidance expected in the fall; management confident in no change. | steady |
| Capital return via share repurchases | — | Completed second $250M tranche and initiated a third $250M tranche of the $750M plan; over $1.85B repurchased since 2019. | rising |
| Shift toward subcutaneous and at-home delivery | — | Most next-generation ENHANZE assets are subcutaneous-only or developing subcu alongside IV, reflecting a push toward patient self-delivery. | rising |
| M&A focus on durable royalty platforms | — | Pursuing new drug delivery platforms with long royalty streams, disciplined on net leverage, willing to go up toward ~3x for the right deal. | steady |
Q&A summary
What is the status and timeline of the IP litigation and PGRs with Merck?
The district court case pursues Merck for infringing 15 MDASE patents; a scheduling order is expected in the next couple of months. Four instituted PGRs have a hearing set for March 2, 2026, with first decisions on common issues expected June 2, 2026. Management remains confident it will prevail on validity and that Merck is infringing.
What is your confidence regulatory changes (CMS draft Part B guidance, IRA) won't be impactful?
On the IRA fixed-combination Part B guidance, Halozyme submitted a comment letter arguing the draft is flawed on policy and legal grounds and laid out ENHANZE's clinical benefits. Management has engaged OMB, Senate staff, and Congress, expects final guidance in the fall, and believes it will prevail with no change.
Given strong trends, is there potential to update longer-term guidance, and how conservative is current guidance?
The company updates current-calendar-year guidance as new data points emerge but updates subsequent-year guidance only once a year at the start of the year. Guidance is set using latest trends and partner inputs; it is not intended to be conservative, and partners are overperforming on several catalysts.
On the Ocrevus subcutaneous launch, where are patients coming from?
Roche reported about 7,000 patients globally started Ocrevus subcu, with roughly 50% new-to-brand and roughly 50% switching from IV, expanding the total market as hoped given the 10-minute injection versus hours for IV.
What is the interest level in the high-volume autoinjector ready for partners later this year?
Management is in multiple discussions at different stages; one current partner signed a development agreement and is advancing, while others are waiting to test the prototype. Interest is strong, driven by a push toward at-home patient self-delivery in inflammation, neurology, and nephrology.
How many next-generation ENHANZE assets lead with subcutaneous versus bridging from IV, relative to CMS risk?
The most advanced asset is relatlimab with Opdivo (recently IV-approved); the majority of the remaining pipeline is subcutaneous-only or developing subcu alongside IV with little gap, reflecting the industry move toward at-home delivery.