Halozyme Therapeutics Inc

NASDAQ:HALO

Earnings Call Transcript 2022-Q2

[Operator]

Good afternoon. My name is Rex, and I will be your conference operator today. At this time, I would like to welcome everyone to the Halozyme Q2 2022 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. [Operator Instructions]

Thank you. At this time, I would like to introduce Tram Bui, Vice President, Investor Relations and Corporate Communication. You may begin your conference.

[Tram Bui]

Thank you, operator. Good afternoon and welcome to Halozyme second quarter 2022 financial and operating results conference call. In addition to our press release issued today after the market close, you can find a supplementary slide presentation that will be referenced during today's call in the Investor Relations section of our website.

Leading the call will be Dr. Helen Torley, Halozyme's President and Chief Executive Officer, who will provide an update on our business; and Nicole LaBrosse, our Chief Financial Officer, who will review our financial results for the second quarter ended June 30th, 2022.

On today's call, we will be making forward-looking statements. I refer you to our SEC filings for a risk and uncertainties. Also during the call, both GAAP and non-GAAP financial measures will be discussed. The non-GAAP or adjusted financial measures are reconciled with the comparable GAAP financial measures in our earnings press release and slide presentation.

I'll now turn the call over to Helen Torley.

[Helen Torley, President & Chief Executive Officer]

Thank you, Tram and good afternoon everyone. I'll begin on slide three. Our accomplishments in the first half of the year are illustrative of the many opportunities Halozyme has to continue to enhance our growth. With the acquisition of Antares, which further expanded our growth opportunities, adding a best-in-class auto-injector vector platform and a specialty commercial business, thereby augmenting Halozyme's strategy.

These additions further strengthened our position as a leading drug delivery company and expanded our strategy to include specialty products. And we continue to deliver operational excellence, achieving multiple drug delivery, commercial and corporate development milestones.

I'm happy to report that integration activities are proceeding to plan as we approach the 90-day time point, and we're on track to achieve the goals we established. It is this combination of opportunity and execution that gives us confidence in our differentiated growth story.

Focusing now on the financial performance highlights, we reported second quarter revenues, inclusive of Ontario's revenue post the May 24th acquisition close of $152.4 million, a 12% year-over-year increase. This resulted in GAAP earnings per share of $0.16, and non-GAAP adjusted earnings per share of $0.53.

Our strong second quarter revenue results were driven by continued growth in royalty revenues from ENHANCE and the addition of the post-close royalty revenues from auto-injector devices and product sales as a result of the Antares acquisition.

Based on the recent close of the Antares transaction and strong year-to-date results, together with the latest information from collaboration partners and planned expenditures for the year, we are raising our guidance for 2022.

For full year 2022, we expect total revenues of $655 million to $685 million, an increase from our prior guidance range of $530 million to $560 million. This represents growth of 48% to 55% over 2021 total revenue.

GAAP diluted earnings per share is updated to $1.20 to $1.25, a decrease from our prior guidance of $1.90 to $2.05, mainly due to acquisition-related costs in the current year.

Adjusting for acquisition-related costs and other adjustments, we expect non-GAAP earnings per share to be $2.10 to $2.25, an increase from our prior guidance range of $2.05 to $2.20, representing an increase of 5% to 12% over 2021, non-GAAP diluted earnings per share.

Let me now move to slide 4, and I'll provide some more detail on royalty revenue performance. We continue to see and project robust growth in this high-margin recurring revenue stream. In the second quarter, total royalty revenue was $85.3 million, representing 86% growth over the second quarter of 2021 and 23% sequential growth. These results include ENHANZE royalty, and we encourage drug-device royalty stream for the portion of the quarter that follows the May transaction close.

Royalty revenue growth continues to be driven by our Wave 2 product launches, led by the successful ongoing global launches of Janssen's subcutaneous formulations of DARZALEX and also by Roche’s Phesgo. Based on strong momentum, we project an increase in royalty revenues for 2022. Year-over-year growth is now projected to be greater than 65%, resulting in royalty revenue of $340 million to $350 million, an increase from our prior projection of 50% growth. This increased growth is driven by the addition of the ENHANZE device royalty revenues and DARZALEX subcutaneous performance.

Turning now to slide 5. I will provide some more color on DARZALEX and DARZALEX subcutaneous performance. Janssen’s parent Johnson & Johnson reported second quarter worldwide sales of DARZALEX, including both the IV and subcutaneous forms of $2 billion, an increase of more than 46% year-over-year on an operational basis. The company notice that DARZALEX sales was driven by share gains in all regions, strong continued uptake and increased use of subcutaneous formulation.

Moving to subcutaneous DARZALEX, SC share continues to grow in the United States during the second quarter with an 83% end of quarter share based on Symphony data. This is an increase from 80% share at the end of the first quarter. Additionally, Johnson & Johnson reported SC conversion grew to 80% in Europe.

Moving now to the recent results by our partner Roche for the second quarter of 2022, Roche reported strong sales of Phesgo their combination treatment for patients with breast cancer that utilizes the ENHANZE technology. As a result of ongoing conversion and geographic expansion, second quarter sales of Phesgo were CHF325 million, an increase of 241% year-over-year. Phesgo with a short five to eight minute subcutaneous administration plan is proven to be an attractive option for patients with healthcare systems, especially in countries where infusion capacity is limited with some countries now reporting up to 90% adoption.

We continue to expect strong quarter-over-quarter growth as a result of the ongoing launches in Europe and rest of world and through continued penetration in oncology accounts in the United States. We're also excited that Roche is initiating a study of Phesgo with giredestrant in frontline encouraging positive, ER positive metastatic breast cancer patients, opening up the potential for a future oral and subcu treatment regimen.

And just a brief comment on Wave 1 products, which include MabThera subcutaneous, which is also called Rituxan Hycela or subcutaneous Herceptin or Herceptin Hylecta. We continue to project a modest decline in royalties from these mature products as a result of the ongoing impact related to biosimilar competition to the IV product. I will note that these products are still contributing nicely as a recurring source of revenue.

Illustrated on Slide 6 is an overview of the ENHANZE portfolio. I'll focus your attention on Wave 3 and 4, which represent new royalty revenue opportunity for Halozyme. Our Wave 3 products represent the next set of opportunities with potential launches protected between 2023 and 2025. You will note that we've expanded Wave 3 to four products, as we are now including OCREVUS following the recent update from both the top line data from the Phase 3 SC study will be available in 2023.

Moving now to Slide 7. I'll begin with the most advanced of our Wave 3 products Tecentriq and efgartigimod. We are delighted that both of these products recently ENHANZE positive Phase III subcutaneous study data results. Most recently, Roche announced that its Phase III study evaluating subcutaneous formulation of Tecentriq or atezolizumab, with ENHANZE in patients in advanced non-small lung cancer met its co-primary end point.

The study showed non-inferior levels of Tecentriq in the blood were injected subcutaneously compared with intravenous infusion in immunotherapy-naive patients with advanced or metastatic non-small cell lung cancer for whom prior platinum therapy has failed. The safety profile of the subcutaneous formulation was also consistent with IV Tecentriq. We believe these positive results further demonstrate the opportunity for our core formulation of ENHANZE to potentially benefit patients by reducing the treatment time for Tecentriq to three to eight minutes as a subcu delivery, down from 30 to 60 minutes for IV treatment.

Roche plans to serve findings of the study at an upcoming medical meeting and submit for regulatory approval to health authorities globally, including the US Food and Drug Administration and European Medicines Agency. During the first half of 2022, Tecentriq administered intravenously, had revenues of CHF1.8 billion, growing 11% year-over-year, with Roche reporting strong uptick in lung cancer in the adjuvant setting.

I'll move now to argenx and efgartigimod. Following positive results announced in March of 2022, argenx is on track to submit the biologics license agreement for efgartigimod with ENHANZE in Myasthenia Gravis to the US Food and Drug Administration by the end of this year. We believe efgartigimod SC is on track to be the first of our Wave 3 potential partner launches with potential approval anticipated in 2023.

efgartigimod IV, which has a brand named Five Guard, was approved by the FDA in December of 2021 and in Japan in January of 2022 for the treatment of adult patients with generalized Myasthenia Gravis. On their recent second quarter call, Argenx reported a strong global launch for byproduct with Q2 revenues of $75 million, with an estimated 1,400 patients on treatment, up from approximately 400 patients in Q1.

argenx management further commented that efgartigimod with ENHANZE is currently being evaluated in four additional indications with multiple data readouts projected in 2023 including data in idiopathic thrombocytopenic purpura, chronic inflammatory demyelinating polyneuropathy and Penthagus [ph]. With analyst consensus of almost $3 billion in sales for efgartigimod in 2026, we were excited to be partnering with argenx on this important new therapy for auto immune diseases. In closing, out of the Wave 3 products, BMS continues with their evaluation of nivolumab subcu in their Phase III study.

I'll move now to Slide 8, illustrated on Slide 8 is the enhanced pipeline by stage of development. Our goal remains to continuously expand the number of products that are in development and to advance products to major stages of development and launch with many of these events resulting in milestone revenue payments to Halozyme.

Highlighted on this slide are the wave four potential launches. These products, if they continue in development have the potential to launch in the 2025 to 2027 time frame. 11 partner products are an ongoing Phase I clinical testing or has completed Phase I testing.

Let me provide some key updates during the quarter. Chugai initiated a Phase I study to evaluate the pharmacokinetics, pharmacodynamics and the safety of a targeted antibody administered subcutaneously with ENHANZE.

It is notable that we announced our collaboration and licensing agreement with Chugai in March of this year, making this the fastest time to Phase I dosing in our history at just over two months. This is a strong signal that this collaboration is off to a great start.

In June, our partner ViiV initiated enrollment in a Phase I single-dose escalation study to evaluate pharmacokinetics, safety and tolerability of long-acting cabotegravir administered subcutaneously with ENHANZE. This is the second target and the third trial to be initiated since we announced this agreement just over a year ago.

Additionally, our partner Takeda recently reported positive top line results for their Phase III ADVANCE-1 clinical study of HYQVIA, which is Immune Globulin 10% with ENHANZE in patients with chronic inflammatory demyelinating polyneuropathy, which is also called CIDP, and is a rare autoimmune disease.

The clinical study met its primary endpoint for maintenance treatment of CIDP and Takeda plans to submit applications for HYQVIA's regulatory approval in the United States and European Union by the end of 2022.

In addition to these significant advances in the first half of the year, we continue to expect further pipeline progress and expansion for the remainder of the year. We project this will result in more than 10 new study starts in 2022, including more than six new Phase II or Phase III trial starts for existing enhanced partner programs and two new products entering the clinic this year.

You may also have noted that we recognized $15 million in collaboration revenue in the second quarter. This is related to an anticipated study start by a partner in the third quarter.

And concluding this ENHANZE development program overview, I'm pleased to announce that in June, BMS nominated an undisclosed target, resulting in a $5 million payment. This will add to BMS' ongoing portfolio, which includes a subcutaneous version of nivolumab, which is in Phase III testing and a subcutaneous nivolumab relatlimab combination which is in Phase I development.

We are very pleased with the progress over to the partner development pipeline, and we look forward to supporting the significant enhanced growth opportunities that these represent.

And I'll give you a bit more color regarding the Antares acquisition and our integration progress since this transaction closed on May 24. Summarized on slide nine is the current Antares portfolio.

Our excitement regarding the new opportunities that the Antares portfolio brings is high, with decades of experience in device development, engineering, we gained a strong internal development team who specialize in creating custom-design drug delivery devices that are tailored to the patient and their therapeutic need.

We’ve activated teams made up of individuals from both companies whose goal it is to expand the number of companies licensing our auto-injector technology. Work is also underway to design and create a large volume auto-injector, which, by combining the innovative Antares auto-injector platform with ENHANCE, will offer a unique approach for patient-friendly subcutaneous treatment delivery.

What is so exciting is that we see opportunity for large volume subcutaneous delivery across the spectrum of disease areas for both small molecule drugs and biologics. The strong cultural fit across our companies, including a focus on innovation for patients have meant that the teams are hitting the ground running. We are also excited to have added three proprietary products, XYOSTED TLANDO, and NAPTURNA [ph].

Our focus with XYOSTED, our weekly virtually painless subcutaneous testosterone replacement treatment, which is delivered by auto-injector is to grow share through gaining patients who previously have been receiving intramuscular treatment.

I'm pleased that XYOSTED achieved its highest number of weekly prescription is recently, a sign of its continued growth. And with our field force expense and executed, we launched TLANDO several weeks ago in June. Our access team is focused on gaining and then expanding payer coverage as our field team is educating physicians on TLANDO a twice-a-day oral testosterone replacement treatment that does not require dose titration.

Moving now to slide 10, the acquisition of Antares through revenue resulting from commercial product sales and from the innovative autoinjector platform, is projected to add durable revenue and revenue growth on top of the already strong revenue growth to can we see for ENHANZE. Our projected ENHANZE growth is resulting from growth in royalty revenues from the multiple waves of potential new launches we have just discussed.

Moving now to slide 11, the Antares acquisition fully aligned with our previously announced capital allocation priorities. These priorities were to invest maximize ENHANZE revenue growth and durability, to continue to return capital to our shareholders through share repurchases, and to seek to acquire a platform technology that would add to and further extend our revenue durability.

As you can see from the updated guidance for the year and in line with our prior comments, the transaction is expected to be accretive to Halozymes' 2022 revenue and non-GAAP earnings and supports our growth strategy to 2027 and beyond.

I'll now turn the call over to Nicole to discuss our second quarter financial results. I'll provide more detail on the combined company guidance. Nicole?

[Nicole LaBrosse, Chief Financial Officer]

Thank you, Helen. Beginning on slide 12, total revenue for the second quarter was $152.4 million compared to $136.5 million in the prior year period. The year-over-year increase of 12% was primarily driven by an increase in royalty revenue and the addition of product sales as a result of Antares acquisition, partially offset by a decrease in revenues under collaboration agreements due to a $40 million upfront payment associated with entering into the beef collaboration in the prior year period.

Royalty revenue for the second quarter was $85.3 million, an increase of 86% compared to $45.8 million in the prior year period. The year-over-year increase was primarily driven by continued strong uptake of Janssen's subcutaneous DARZALEX utilizing ENHANZE.

Cost of sales for the second quarter were $33.9 million compared to $23 million in the prior year period. The year-over-year increase was primarily driven by an increase in product sales as a result of Antares acquisition.

Operating income was $34.1 million compared to $93 million in the prior year period. The year-over-year decrease was primarily driven by onetime transaction costs related to the Antares acquisition, including amortization of intangible assets.

On a GAAP basis, diluted earnings per share was $0.16 compared to $0.62 in the prior year period. On a non-GAAP basis, diluted earnings per share was $0.53 compared to $0.66 in the prior year period. When comparing to the prior year, it's important to note that 2022 was our first year recorded income tax expense, which impacted current period of non-GAAP diluted EPS by $0.14 per share.

Moving now to slide 13. Based on the recent close of the Antares transaction and strong year-to-date results, as well as the latest information from our collaboration partners and planned expenditures for the year, we are raising guidance for 2022. For the full year 2022, we expect total revenue of $655 million to $685 million, an increase from our prior guidance range of $530 million to $560 million, representing growth of 48% to 55% over 2021 total revenue. The projected revenue contribution from the Antares business, the full year guidance is $115 million to $125 million.

In terms of the components of our revenue, we expect revenue from royalties to increase by greater than 65% over revenue from royalties in 2021 to $340 million to $350 million. Collaboration revenues for 2022 are expected to be at similar levels to what we achieved in 2021 and substantially more weighted in the fourth quarter of the year based on our expected tightening for partner milestone bearing events.

Product sales from 2022 are expected to increase from 2021 due to the contribution of sales from the Antares acquisitions. We expect operating income of $240 million to $265 million, a decrease from our prior guidance range of $350 million to $380 million, representing a decline of 4% to 13% over 2021 operating income. This includes onetime transaction costs related to the Antares acquisition, including amortization of intangible assets, as well as the planned incremental $20 million operating expense investment in 2022 to maximize ENHANZE and extend royalty revenue durability.

We expect GAAP diluted earnings per share of $1.20 to $1.35, a decrease from our prior guidance of $1.90 to $2.05, mainly due to acquisition related costs in the current year. Adjusting for acquisition related costs and other adjustments, we expect non-GAAP diluted earnings per share to be $2.10 to $2.25, an increase from the prior guidance range of $2.05 to $2.20 and representing an increase of 5% to 12% over 2021 non-GAAP diluted earnings per share. This increase in the guidance range of $0.05 per share is a result of the projected accretion from the Antares acquisition.

Our balance sheet remained strong with 3.3 times net debt-to-EBITDA ratio at June 30, 2022, which we expect to reduce to less than three times by the end of the year. We continue to have access to low-cost pro rata based debt through our revolving credit facility and project strong cash flows from operating activities.

We will continue to execute on our previously announced three-year $750 million share repurchase program, inclusive of $150 million accelerated share repurchase initiated in December of 2021, which concluded in June. We continue to plan for up to an additional $100 million in share repurchases in 2022, depending on market conditions and other factors.

With that, I'll now turn the call back to Helen.

[Helen Torley, President & Chief Executive Officer]

Thank you, Nicole. I would like to thank the entire Halozyme team for the hard work that resulted in our strong performance this quarter and for the excellent progress with integration. As you heard today, we are continuing to deliver growing revenues, growing operating income and to expand our pipeline, resulting in strong near-term and long-term growth. Thank you all for joining us today. And with that, we'll be delighted to take your questions.

Operator, would you please open the call for the questions.

[Operator]

[Operator Instructions] Your first question comes from the line of Mike DiFiore. Your line is open.

[Mike DiFiore, Evercore]

Hi, guys. Congrats also in the quarter and thanks for taking my questions. Just two for me. beginning a lot of this from investors on the potential impact of drug pricing reform on HALO's top line, to the extent if you can, if you could offer any color on how that may affect your finances, that would be great. And along those lines, would co-formulated products be considered new products in their own right. And therefore, not tied to the parent brand launch date, or will they be considered one and the same? And separately, any color you can give on the TLANDO launch. The Rx data seems as if it may be restricted in ICFI [ph] and IMS. Thank you.

[Helen Torley, President & Chief Executive Officer]

All right. Well, thanks for the questions, Mike. Let me just start just with a high-level comment on drug pricing reform. Obviously, the Senate Bill has been issued, but we're still awaiting a lot of the regulations to be published by CMS, so it's hard to give a specific answer.

I do think one of the very important factors of a Halozyme though, is we do have a broad and diversified portfolio of products that are in different stages of development across multiple partners for selling their innovative products and medicines globally. And I do think that is a very picture they have, considering that there will only be certain drugs that are going to potentially be impacted in the future by these pricing performs. But it's a little bit too early to talk about this. We can say that for the biologic drugs any impact is expected in 13 years after their first launch.

And certainly, as we look at our portfolio, those events that certainly would be well passed 2025, if that's helpful. But we'll be sharpening our pencils when more details are available, Mike, to be able to assess that. But certainly, we're feeling in a very good position because of our portfolio.

Similar type of response to the co-formulation are new. I think until the regulations are written and published, it is not going to be possible to give an opinion on that or understand exactly how this is going to be operationalized. So we certainly are beginning our work on the Senate Bill and waiting for those CMS regulations to be able to come up with a full assessment. And obviously, we'll share our assessment at that time.

TLANDO launch, as you know, just launched a few weeks ago in June. Our focus at the moment is really on market access. Our team is working to gain access and coverage within the key pharmacy benefit managers. While our representatives are out talking to the physicians, presenting to them our oral therapy, twice a day oral therapy that doesn't require dose titration. So early days yet. And certainly, key are going to be working to get that additional access in place and continuing to educate positions on what we think is an important new offering for patients looking for just a strong replacement.

[Mike DiFiore, Evercore]

Very helpful. Thank you.

[Operator]

Your next question comes from the line of Jacob Walter [ph]. Your line is open.

[Helen Torley, President & Chief Executive Officer]

Operator, maybe we can move to the next question. I think we're not able to hear and maybe Jake could come back

[Operator]

Certainly. Your next question comes from the line of Corinne Jenkins. Your line is open.

[Corinne Jenkins, Goldman Sachs]

Great. Good afternoon. Maybe a little more high level. Can you just provide an update on rate, then the integration of Antares and what you've learned, just in the initial two weeks post close of that deal? And anything particular with respect to the commercial infrastructure and where maybe you are going to be focused in that business?

[Helen Torley, President & Chief Executive Officer]

All right. Thanks Corinne. Well, as you know, before, we completed the acquisition we had commented that we had detailed integration plans in place. And I can say from the point of the cultural integration, process integration and getting some of our performance and new ideas implemented, things are going very nicely on track, and I have to give a big thank you to everybody on both sides, Halozyme and Antares who were contributing to that.

A couple of highlights, just to mention, now the teams really did hit the ground running with the concepts and ideas around how do we create a unique offering, we think, in the market of a high volume auto-injector that would be used with ENHANZE. And so, that's just an example that we were hoping to see and are indeed seeing with how the power of bringing the company together.

You asked a specific question about commercial infrastructure. I think everybody is aware that at the beginning of this year, the Antares began an expansion of its field footprint from about 90 reps to 108 reps. And the goal of that was obviously to prepare for the addition of TLANDO and to increase share of voice and reach, in terms of being able to make sure that we were getting to at the right frequency all of the top volume prescribers.

I'm very pleased to say that, that is virtually complete that expansion. And we now have almost all of the territories filled and reps obviously coming up to speed with the new reps coming up to speed with the new product.

Now with that, obviously, any integration comes a bit of disruption, but I'm very proud to see and happy to that our teams are putting up some very good numbers and many representatives that are just doing a terrific job moving through that modest disruption that's happening in their physician call list to deliver and continue to perform.

And so, very confident as a result of this that we are going to grow our -- both of our products, particularly as I have said in 2022 over 2021. And importantly, for 2023, we're going to be in a great position to grow both our brands for the future.

[Corinne Jenkins, Goldman Sachs]

Thanks. And then maybe, is there any additional color that you can provide on the pull-forward of Ocrevus subcu, pulling it into the Wave 3 group of products? And potentially any color on what that suggests about relative importance of that product to your partner within the indication?

[Helen Torley, President & Chief Executive Officer]

And so sorry, Corinne, I couldn't catch some parts of that. Would you mind repeating?

[Corinne Jenkins, Goldman Sachs]

Sure. Sorry. What additional color can you provide on the Ocrevus subcu pull-forward that's now in Wave 3, it was previously Wave 4? And then any thoughts on what that suggests about the relative importance of that product to Roche in that space? Can you just give a little sense with like a notable update in the quarter?

[Helen Torley, President & Chief Executive Officer]

That's great. With regard to Ocrevus, I don't necessarily think there's sort of a proof forward. It was just an update that Roche management happened to mention in their most recent earnings call that they did expect data in 2022. So, with that confirmation and certainty of them articulating that were able to more firmly move that into Wave 3 given the potential now for a launch between 2023 and 2025. So I would look at that more as a clarity provided by Roche that we could be a repeat and plan again.

And with regard to where it fits in the portfolio, if you really look over the last, I think, 12 to 18 months, there's been several comments made by Roche management on its quarterly calls about Ocrevus being a terrific and important growth brand for them, but recognizing that the marketplace is also seeing more oral and subcutaneous therapy. And they commented at one point that being able to move over the subcu really was fitting with where therapy seems to be going in this marketplace. So those comments certainly a signal to me that they see subcu as an important part of their offerings for patients with myasthenia -- with multiple sclerosis.

[Corinne Jenkins, Goldman Sachs]

Thank you.

[Operator]

[Operator Instructions] Your next question comes from David Risinger. Your line is open.

[David Risinger, SVB Securities]

Yes. Thanks very much. So I have a couple of questions, please. First, could you talk about -- or tell us what the impact of Antares was on non-GAAP EPS in the second quarter? So what the figure was for the second quarter? And then what is the expected impact on a non-GAAP basis on your updated full year 2022 non-GAAP EPS projection?

Second, could you remind us -- I can't recall. I apologize. But what has been said about pursuing a once-daily TLANDO and potential timing? And then third, could you please comment on business development prospects, so opportunities to sign new partnerships in the near to medium term? Thank you.

[Helen Torley, President & Chief Executive Officer]

Thank you, David, for the question. And I'll ask Nicole to start, I will take these in order. Would you answer the questions on the non-GAAP EPS?

[Nicole LaBrosse, Chief Financial Officer]

Yes, happy to do this. So, while we haven't provided that level of detail, we did provide that the Antares revenue streams did contribute $18.7 million for the quarter. And just a reminder on that contribution, that is from the time period of May 24th, the date of acquisition through to the end of the quarter. So, for that period, that is the period that we've included in our Q2 results.

And then I can say for full year as well, you'll see that we did update our guidance for the full year, including updating our non-GAAP diluted EPS and we've adjusted that range, we've increased it by $0.05 per share, and that is reflective of the accretion that we project for the full year related to the Antares acquisition and the contribution from that part of the business.

[Helen Torley, President & Chief Executive Officer]

All right. And I'll move to the once-daily TLANDO. We can provide an update that we don’t exercise the option to pursue at TLANDO XR, which is the fairly TLANDO, potential development with legacy. That was based on a comprehensive analysis looking at our expectations for outsized cost duration of the clinical study versus the return on that. So, we -- with our portfolio today, which as our terrific XYOSTED subcu that virtually came a weekly injection and the twice-daily oral, we believe was very differentiated offerings for the testosterone replacement therapy market.

And then on business development, the test indeed has been very exciting. It has already been very busy with our current partners, presenting to them the new options, which include a one ml auto-injector, 2.25 ml auto-injector, and also talking about our plan to develop a 5 ml auto-injector that would be used with ENHANZE. And I can tell you the reception has been very positive with a lot of interest being expressed by several partners who are going back now to look at their portfolio to see if they would be a fit.

I'm also excited to say incoming calls are increasing, the people inquiring is it possible to do X? Is it possible to do Y? And that always is very positive as well to be getting those incoming calls. And then I'll just say, as we have done in the past, we have done a systematic assessment, all of the products that we could find out there that might fit into a one million, 2.5 ml or 5 ml auto-injector, and we are now beginning a proactive out burned that call to present offerings to these companies, and potential new partners, and that's kicking off in August.

So certainly, a very good reception, very nice response to how differentiated is the Antares auto-injector is. And I think what does seem to make it very different, and we're getting this feedback from potential partners is the ability to develop a customized device, working with the talented Halozyme engineers to make sure that whatever the design is, it's the desired patient population, disease, speed of injection, volume of injection. And so off to a very strong and encouraging start based on just the last several weeks of BD discussions.

[David Risinger, SVB Securities]

Thank you.

[Operator]

Your next question comes from the line of Jessica Fye. Your line is open.

[Jessica Fye, JPM Chase]

Hi, guys, thanks for taking my question. So with the Antares closed under your belt, I was wondering if you could update us on your capital allocation priorities, when you think about additional share repo versus debt pay down versus more acquisitions? Thank you.

[Helen Torley, President & Chief Executive Officer]

Yes. Well, let me ask Nicole to address that.

[Nicole LaBrosse, Chief Financial Officer]

Yeah. Thanks Jess. I would say we continue to be focused across the board on our capital allocation priorities, specifically in regards to share repurchases, our plans remain intact with our existing $750 million plan that we initiated late last year a three-year plan. We did in this quarter complete the first $150 million purchase of that, which was utilizing an accelerated share repurchase program. So that was completed this quarter, and we do plan to purchase up to an additional $100 million in the remaining months of the year. So that is still tracking nicely.

Again, we do continue to monitor our access to capital markets, and we -- our access to debt, and we do have a low net leverage ratio of 3.3 times at the end of the quarter, which we expect to reduce to less than three times by the end of the year. So we're continuing to access that type of leverage as well.

And then again, growing externally that also continues to be a focus for us as Helen mentioned, we're very focused on integration and the success of this acquisition and putting all the pieces in place here, but that will be an area of focus for us to continue to grow externally as well.

[Operator]

[Operator Instructions] There are no further questions at this time. Ms. Torley, I turn the call back over to you.

[Helen Torley, President & Chief Executive Officer]

Well, thank you. We appreciate everybody joining us for this call. Obviously, an exciting quarter for us with strong operational performance, which is the key hallmark we believe, of Halozyme even as we integrated and carries. And so we look forward to providing additional updates in the next quarter, where we expect to continue this very strong momentum and success. Thank you all for your attention today. Bye-bye.