Halozyme Therapeutics Inc
NASDAQ:HALO
If you don’t study any companies, you have the same success buying stocks as you do in a poker game if you bet without looking at your cards.
Utilize notes to systematically review your investment decisions. By reflecting on past outcomes, you can discern effective strategies and identify those that underperformed. This continuous feedback loop enables you to adapt and refine your approach, optimizing for future success.
Each note serves as a learning point, offering insights into your decision-making processes. Over time, you'll accumulate a personalized database of knowledge, enhancing your ability to make informed decisions quickly and effectively.
With a comprehensive record of your investment history at your fingertips, you can compare current opportunities against past experiences. This not only bolsters your confidence but also ensures that each decision is grounded in a well-documented rationale.
Do you really want to delete this note?
This action cannot be undone.
| 52 Week Range |
33.68
64.42
|
| Price Target |
|
We'll email you a reminder when the closing price reaches USD.
Choose the stock you wish to monitor with a price alert.
This alert will be permanently deleted.
Halozyme Therapeutics Inc
You don't have any saved screeners yet
Good afternoon, everyone, and welcome to the Halozyme Therapeutics Third Quarter 2018 Financial Results and Corporate Update Conference Call. [Operator Instructions].
I will now turn the call over to Dr. Helen Torley, Chief Executive Officer of Halozyme Therapeutics.
Good afternoon, everyone, and thank you for joining us today. I'm pleased to share details of Halozyme's continuing progress and momentum in the third quarter as we look forward to the conclusion of a successful 2018 and anticipate an exciting year ahead of us in 2019. During the call, we will be making forward-looking statements, and I refer you to our SEC filings for a full listing of the risks and uncertainties.
Joining me on today's call are Laurie Seltzer, our Chief Financial Officer; and Dr. Dimitrios Chondros, our Chief Medical Officer. And I'm also delighted to introduce Al Kildani, who has joined us in the role of Vice President of Investor Relations and Corporate Communications. As a reminder, during the call, we will be referring to supplementary slides. These can be found in the Investor Relations section of our company website.
I'll begin with the key takeaways for the quarter. Firstly, for the third quarter, we reported 9% year-on-year growth for ENHANZE royalties on a reported basis or 6% adjusting for the change in accounting we implemented at the beginning of the year. We remain on track to achieve royalty revenue growth for the year of 25% to 30%. Secondly, I'm very pleased that we signed another ENHANZE development deal with Roche for three undisclosed targets. The deal covers exclusive development of an unnamed therapeutic target currently in clinical development and the option for Roche to select two additional targets within four years.
And thirdly, we're continuing to make steady progress toward realizing the ENHANZE $1 billion royalty revenue potential in 2027 and up to $1 billion in lifetime milestones if all specified targets are met. This projection was based on the performance of our three currently marketed products and the successful development, approval and global launches of additional products. As of today, we have a broad ENHANZE pipeline with our partners that includes two products in Phase III clinical testing, four products in Phase I clinical testing, one product that has started screening patients for a Phase I trial and two additional products expected to enter Phase I testing by the end of this year or early in 2019.
And finally, our HALO-301 registration study remains on track to achieve the target number of progression free survival events between December of 2018 and February of 2019. And the trial also remains on target to achieve enrollment of approximately 500 patients by year-end. With those key takeaways, let me now provide some additional details on our recent progress and results. Importantly, on ENHANZE, just last week, once again, we expanded our agreement with Roche, licensing our ENHANZE drug-delivery technology for exclusive development by Roche of a new undisclosed clinical stage therapeutic target, with an option to select two additional targets within four years.
Halozyme will receive an initial payment of $25 million, nomination fees upon target nomination and potential milestone payments of up to $160 million to $165 million per target, subject to the achievement of specified development, regulatory and field-based milestones. Halozyme will also receive mid-single-digit royalties on net sales of the commercialized product. Roche has been a long-standing partner of Halozyme, and this most recent expansion of our agreement signifies our continuing support for the value that our ENHANZE technology offers.
Turning now to Slide 2. We've licensed rHuPH20 enzyme to eight leading pharmaceutical and biotech companies, covering 53 potential drug targets in total. The potential royalties from our three marketed products, plus the products that we expect to be in clinical development in 2018, results in the potential for approximately $1 billion in royalty revenue in 2027 and up to $1 billion in lifetime milestones if all specified targets are met. The royalty potential assumes approval in multiple indications, global launches and on average a mid-single-digit royalty on net sales of ENHANZE formulated products.
Moving now to Slide 3, I'll provide an update on the status of the ENHANZE development pipeline, beginning with our currently marketed products. Let me begin with comments made by Roche leadership on their recent quarterly call.
After a full year of availability of MabThera biosimilars and two quarters of Herceptin biosimilars outside the United States, Roche reported that the durability of the subcutaneous products persist with the SC products maintaining share. Pricing pressures on the IV products have modestly impacted subcu.
Turning now to the United States. Roche's RITUXAN HYCELA, a subcutaneous co-formulation of rituximab with ENHANZE, was approved by the FDA in multiple blood cancer indication in mid-2017. The commercial launch of RITUXAN HYCELA continues to progress, with additional clinics initiating and driving conversion. And Roche's BLA for subcutaneous Herceptin with ENHANZE was accepted by the FDA in July of this year, with an action date of March 2019. If approved, this formulation would allow for a new administration option and potential shorter treatment times for patients.
Intravenous Herceptin reported sales of CHF 2.7 billion for 2017 in the United States, and a successful launch in this market of subcutaneous Herceptin in 2019 could represent a meaningful source for additional royalties for Halozyme.
Let's move now to the new products already in clinical development or plan to enter development in 2018. Two of these products are in Phase III clinical studies: daratumumab and the fixed dose combination of Perjeta and Herceptin. Janssen has initiated four Phase III trials of daratumumab SC with ENHANZE in patients with multiple myeloma, amyloidosis and smoldering myeloma. This follows the presentation of data supporting a 15-millimeter injection of the subcutaneous formulation delivered in five minutes or less. Two additional Phase III studies are currently planned. These are listed on clinicaltrials.gov and are expected to start shortly.
The new Phase III trials will evaluate daratumumab SC with and without the combination treatment of pertuzumab, lenalidomide and dexamethasone. One of the trials will be conducted in patients with previously untreated multiple myeloma who are eligible for high-dose therapy and the other in patients with untreated multiple myeloma for whom hematopoietic stem-cell transplant is not planned as initial therapy. This ongoing expansion and the strong execution of the Phase III clinical studies clearly demonstrate Janssen's commitment to developing and, upon approval, launching an SC version of daratumumab.
The DARZALEX IV formulation reported worldwide sales of $498 million in the third quarter, representing growth of approximately 60% compared to a year ago. We call analysts project peak sales of DARZALEX in excess of $7 billion. If the daratumumab SC administration time of 3 to 5 minutes being tested is successful, this could represent a meaningful reduction in treatment burden for patients, many of whom received their IV treatment in a 4 to 6 hour IV infusion today.
Let's turn now to the co-formulation of Herceptin SC and Perjeta SC using ENHANZE. Roche initiated a global Phase III study for the fixed-dose combination in July. The Phase III study will enroll approximately 500 patients with HER2-positive early breast cancer in the neoadjuvant and adjuvant settings. Today, patients received Perjeta IV and Herceptin IV by sequential administration, which can take 2.5 hours for loading dose and 1 to 2 hours for subsequent doses. With the fixed-dose subcu, the times are substantially shorter, with the loading dose expected to take 7 to 8 minutes and subsequent doses just 5 minutes. Roche expects to submit data from the Phase III study for approval in 2020.
I'll next provide an update on the Phase I trial. Of the total seven targets projected to enter the clinic in 2018, to date, four products are already in Phase I clinical testing, two are expected to begin clinical testing by year-end and one is now expected to begin in the first quarter of 2019. Of the products already in Phase I, in addition to Lilly's undisclosed target and a second undisclosed target for Roche, we are very pleased that Alexion subcutaneous, ALXN1210 with ENHANZE and BMS's anti-CD73 have entered the Phase I clinical testing. We project the Opdivo Phase I will start shortly, as BMS is currently screening patients for enrollment.
We expect the first dosing of the sixth Phase I study with an undisclosed target in the fourth quarter and for a seventh undisclosed target, which is a BMS target, in the first quarter of 2019. At the start of the year, I talked about the value of ENHANZE coming from both unlocking the value of our current partnership and from signing new agreements. As you've just heard, working with our partners, we expect to enter 2018 with more than double the number of new targets in clinical testing. This is the first key step for unlocking the full value and potential of ENHANZE.
And in new agreements, interest in new collaboration agreements with ENHANZE remained strong. I have confidence we will continue to secure additional partnerships as shown by the new Roche agreement we announced just a few days ago. Companies continue to look for competitive differentiation, the potential to reduce the treatment burden for patients and for greater efficacy. Sorry, I apologize for - for greater efficiency at the treatment site. While the time of new agreements is always unpredictable, we're excited by the potential these new relationships can represent.
I'll now begin on PEGPH20 if you would turn to Slide 4. PEGPH20 is a targeted therapy that temporarily degrades hyaluronan or HA, that can accumulate our uncertain tumors and constrict the tumor vasculature. We're studying PEGPH20 with the companion diagnostics developed with our partner, Ventana, to identify patients with high HA tumors. Our Phase III study, HALO-301, is evaluating PEGPH20 in combination with ABRAXANE and gemcitabine in first-line metastatic pancreatic cancer patients. We project an approximately $1 billion potential global opportunity in this indication. Screening and enrollment for the study are on target, and we project enrollment of approximately 500 patients by year-end.
HALO-301 has two primary endpoints, progression free survival and overall survival. An interim analysis is planned for the first primary endpoint, progression free survival, when we achieve the target number of PFS events. We continue to predict reaching the PFS event target between December of 2018 and February of 2019.
After reaching the target number of events, the next steps will be the final data collection, database cleaning and lock and data analysis. The independent data monitoring committee will conduct the interim analysis. Recently at ESMO, Dr. Kenneth Yu of Memorial Sloan Kettering Cancer Center, provided an update and data from his investigative sponsored trial, evaluating the combination of PEGPH20 plus ABRAXANE and gemcitabine in first-line advanced pancreas cancer patients. The single-arm study examines the use of the oral anticoagulant, rivaroxaban. Dr. Yu reported that two grade 3/4 thromboembolic events occurred, representing a 3% incident, and 2 grade 3 GI hemorrhages occurred, which result with supported treatment. Dr. Yu also provided an update on efficacy results in 60 patients. Highlights included an overall response rate of 53% with three complete responses, 1 in a Stage 3 patient and two in a Stage 4 metastatic patient.
Patient collection for HA analysis has been completed and will be conducted by Ventana. The analysis of efficacy by HA level is expected to be completed in the first quarter of 2019. I want to think many, including myself, find so encouraging of the three complete responses and the overall high response rate. This data in the complete responses not being interpreted in the context that this is a single center - single-arm study, but in speaking to experts and the review, it certainly warrants that continued evaluation.
Dr. Yu is now continuing to enroll patients in the study. And in parallel, we're continuing to assess the feasibility of and path to achieving future regulatory labeling for the use of rivaroxaban with PEGPH20. Let's now turn to Slide 5 on an update on our evaluation of PEGPH20 in other tumor types. Data from the Phase I portion of our clinical collaboration with Eisai, evaluating PEGPH20 plus Heregulin methylate, have also been presented at the 2018 ESMO Congress. The Phase I portion of the study enrolled 14 patients, with HER2-negative metastatic breast cancer without regard for HA status. Based on a February 2018 data count, four patients had a partial response, representing a 28.6% overall response rate. A fifth patient also experienced a confirmed response following the data cut, bringing the overall response rate to 36%, which is approximately double the 18% overall response rate reported for eribulin monotherapy in this patient population.
Drug-related treatment emergent adverse events occurred in 86% of patients, and individual safety profile was as expected with no new safety signals reported. We're now evaluating and discussing these encouraging results and the potential path forward in breast cancer with our advisers. Now regarding our collaboration studies; with Roche, we continue to make progress in the evaluation of PEGPH20 and atezolizumab in pancreas, gastric and gallbladder cancers as well as in cholangiocarcinoma. In particular, we're making good progress in the randomization phase of the Halozyme life study in cholangiocarcinoma and gallbladder cancer. Both of the safety running portions of the study, PEGPH20 in combination with cisplatin and gemcitabine, and PEGPH20 atezolizumab in combination with cisplatin and gemcitabine, are completed. The IDMC overseeing the study reviewed the data in August and recommended opening up the randomization phase of the study, continuing the dose of 3 micrograms per kilogram, the same dose that is being evaluated in HALO-301. Since then, 21 patients have been randomized, with a total enrollment goal of approximately 50 patients. We're delighted with the interest and strong enrollment in this study in a population with a high unmet need.
So in summary, we've seen encouraging efficacy data in our combination studies of PEGPH20 plus chemotherapy in pancreas and in breast cancer, and we're also very pleased with the ongoing progress of our exploration of potential of PEGPH20 plus atezolizumab, including, in particular, our gallbladder cancer and cholangiocarcinoma study.
And with that update, I'll now turn the call over to Laurie, who will discuss our financial results in greater detail. Laurie?
Thank you, and good afternoon, everyone. As Helen mentioned, we are pleased to have just recently signed another deal with Roche, representing an expansion of our long-term relationship. Under terms of the agreement, Halozyme has licensed its ENHANZE drug-delivery technology to Roche for exclusive development of a new undisclosed clinical stage therapeutic target, with an option for Roche to select two additional targets within four years.
Halozyme will receive an additional - an initial payment of $25 million, nomination fees upon target nomination and potential milestone payments of up to $160 million to $165 million per target, subject to the achievement of specified development, regulatory and sales-based milestone. Halozyme will also receive mid-single-digit royalties on the sale of its commercialize products. We expect to recognize the initial $25 million upfront payment in the fourth quarter of 2018. Now let me turn to a discussion of our third quarter financial results. I will begin on Slide 6 where you will see that revenue for the third quarter was $25.6 million compared to $63.7 million in the prior year period, which included a $30 million upfront license fee from Roche. Royalty revenue totaled $18.7 million, an increase of 9% on an as reported basis compared to the third quarter of 2017, primarily driven by sales of ENHANZE products outside the U.S., with Herceptin SC continuing to be the largest contributor. On a sequential quarter basis, Q3 royalties were down 6% compared to the $20 million we reported in Q2. We remain encouraged by recent comments from Roche on their third quarter earnings call, indicating that the shares of the subcutaneous formulations of Rituxan and Herceptin continued to be durable despite the impact of biosimilars to the IV versions of MabThera and Herceptin in Europe, although they have seen some impact on price.
Bulk sales of rHuPH20 and ENHANZE drug product totaled $2.6 million compared to $0.7 million in Q2 and $9.7 million in the prior year period. We expect to see orders continued to increase into Q4 and 2019 as our partners continue their clinical programs and begin preparing for commercialization. HYLENEX product sales totaled $3.7 million, and collaboration revenue totaled $0.6 million.
Moving to Slide 7. Starting in Q1 2018, we implemented a new process related to FASB Topic 606 for how we record royalty revenue. As many of you are aware, prior to January 2018, we recognized royalty revenue one quarter in arrears due to the timing difference between our financial call and when we receive royalty reports from our partners. Under the new guidance, we now estimate royalty revenue for the current reporting quarter and will true-up this estimate to actuals in the subsequent period when the royalty reports are received. To assist in this transition, two comparisons are shown on the slide. The first table shows reported royalties for this quarter, which is our estimate at $18.7 million, an increase of 9% from the $17.1 million in royalty revenue we reported for the third quarter 2017. The second table compares our Q3 estimates of $18.7 million to the actual royalties we received in the prior year of $17.7 million, which were recorded in Q4 of 2017 under the prior methodology. This adjusted view shows growth of 6%.
To close on royalties, our year-over-year growth rate for the third quarter royalty revenue was negatively impacted by the strength of the U.S. dollar, which we calculated to be approximately $0.5 million. Adjusting for that impact, Q3 royalties were up 12% compared to Q3 2017. Turning to Slide 8 for a more detailed breakdown of our P&L. Total operating expenses in Q3 were $51 million. Cost of product sales was $0.6 million in the quarter compared to $8.3 million in the prior year period, driven by lower API product orders. Research and development expenses for the quarter were $35.5 million compared to $34 million in the third quarter of 2017. Selling, general and administrative expenses were $14.9 million compared to $13.3 million in the prior year period. Net loss for the quarter was $27.9 million or $0.19 per share compared to net income of $2.7 million or $0.02 per share in the third quarter of 2017, which includes the effect of a $30 million upfront license fee from Roche. And cash, cash equivalents and marketable securities were $364.4 million at September 30, 2018, as compared to $398.9 million at June 30, 2018.
Finally, I would like to update our 2018 guidance ranges as shown on Slide 9. For the full year 2018, we now expect net revenue increasing to $150 million to $160 million from the prior range of $125 million to $135 million, driven by the $25 million payment from the recent Roche agreement now expected in the fourth quarter. Within the revenue line, we are maintaining our forecast for royalty growth of 25% to 30%. In addition, we continue to forecast a decline in full year 2018 API product orders as our partners implement their manufacturing transition and currently have sufficient API and safety stocks to support their near-term plans. For modeling purposes, we expect API sales to continue to rebound in the fourth quarter this year and into 2019.
We continue to manage expenses and spend carefully, and now expect operating expenses for 2018 of $220 million to $230 million compared to the prior range of $230 million to $240 million. Operating cash burn of $50 million to $60 million compared to the prior range of $75 million to $85 million for the year. Not included in operating cash burn, we expect debt repayment of approximately $95 million, which includes principal and interest payments related to our royalty backed and SVB/Oxford loans. And we are increasing our year-end cash balance to a range of $340 million to $350 million from the previous range of $310 million to $320 million. This increase is driven by the $25 million upfront payment from the recently announced Roche ENHANZE agreement and the reduction in operating expenses, partially offset by changes in our working capital.
With that, let me turn the call back to Helen, who will provide closing comments.
Thank you, Laurie. In summary, I'm very pleased with Halozyme's 2018 performance, and we're positioned to continue to generate value across the ENHANZE and PEGPH20 program through year-end and into 2019. Key ENHANZE highlights include the royalties increasing 9% year-on-year on a reported basis, with the subcu versions of MabThera and Herceptin showing durability in terms of share in the face of IV biosimilar. As the strong progress is being made across multiple development stage products, supporting the potential for $1 billion in royalty revenue in 2027 and up to $1 billion in lifetime milestones, and the signing of our new collaboration agreement with Roche for three additional targets, which resulted - will result in an initial upfront payment of $25 million.
And in an oncology filler, we continue to see strong progress in the HALO-301 Phase III trial and in our combination trials with atezolizumab and, in particular, our cholangiocarcinoma and gallbladder cancer trials.
I spoke in January about the $1 billion potential for each of our pillars. As you can see, our execution throughout 2018 continues to reinforce this potential. And I want to close by expressing my ongoing gratitude and appreciation to the talented Halozyme team for their continued hard work as we advance our programs and support our patients and partners.
And with that, we are now ready to take your questions. Operator, please, would you open the call?
[Operator Instructions]. We'll take our first question from Jason Butler with JMP Securities.
I have two. Just first one, can you give us any more details on the patient characteristics that you - the target patient you're enrolling into the cholangiocarcinoma and gallbladder trial? And then second question, can you just run us through the value proposition of applying the ENHANZE technology to BMS-986179?
I'd like to make sure it's the start, just with an overview of the type of patient, we're enrolling in the cholangio and gallbladder, is that it?
Thank you very much, Helen. Yes, we're enrolling advanced biliary tract cancer patients, the advanced defined by locally advanced on metastatic disease stage patients, and they have either cholangiocarcinoma, intrahepatic or extrahepatic or gallbladder cancers. And with regard to the biomarker, it's an all-comer's population where we test for [indiscernible] retrospective test.
Yes. And Jason, if I can answer the question on BMS and ENHANZE. We know from remarks BMS has made publicly that they do see the future of care for oncology products, particularly for patients who are in long-term care, will start to be given in the doctor's office closer to the patient's home. And so the whole strategy that we're aware our of, with all of their checkpoint inhibitors is creating a subcu version, ideally, at an infrequent dosing interval. So you're going to see additional studies as they progress in the clinic looking to do exactly as that.
We'll take our next question from Charles Duncan with Cantor Fitzgerald.
This is Pete Stavropoulos for Charles. I just have a question. With regards to conversations with perspective projects with ENHANZE, are those conversations mainly being driven by the companies that you currently have partners with? Or are they potentially new partners?
Yes. I can say, and I'll maybe ask Laurie to comment that we continue an active dialogue with a broad range of companies. 2017, really, was a transformative year, and I think for two reasons. Firstly, people began to really understand the potential of ENHANZE with the ability to take daratumumab, currently 4 to 6 IV infusions down to just a 3 to 5 minute injection. And certainly, some of our landmark deal with Bristol and the deals with Roche and Alexion really got people's attention. But Laurie is leading up the business development effort, who wants to provide a little bit of color on the range of types of engagements they're involved in at the moment.
Absolutely. It's really both aspects to the ENHANZE franchise. We feel that there's a lot of value still locked with our current partners. And so we are in constant dialogue with our partners, looking for programs in their portfolios that would benefit from the ENHANZE technology. There's a lot of targets that haven't yet been named or designated, and so we think that that's a key to unlocking the value with our current partners. And I'd say the second part is we are in ongoing dialogue with many potential partners. Certainly, there've been a lot of momentum and a lot of interest. ENHANZE is being seen as the go-to for moving from an IV to a subcutaneous injection. And so we have a lot of interest. We are confident that we will sign other deals. And as always, it's very hard to say exactly when new deals will be signed, but we've got a great deal of confidence right now.
And also for your recent Roche collaboration, the expansion, could that collaboration have a defined life in many other targets?
I'm sorry, you just cut out there, Pete, does that collaboration have a - can we just repeat the rest of the question?
Sure. Have defined life on any other targets?
Well, what we did with this new agreement was added the rights for three additional targets, so selected one upon signing, but they have the opportunity to select two additional targets anytime between now and the next four years. And when we do that, they'll pay us a nomination fee when we] do that. And the beauty of that is that in addition to the many targets that Roche has already signed up with us, including the one additional target that they haven't yet disclosed from 2017.
And just one question on pancreatic. If all the Phase III study are positive, do you think that will probably accelerate the investment in other cancer programs?
What we're doing at the moment is, obviously, go through this process of generating data. We're obviously encouraged by the breast cancer data as an example and very pleased with the progress we're making in our combination studies with atezolizumab. What we will do is continue to evaluate the business case for additional investments, taking into account the clinical data we have but also the patient population we can go after and what the future market evolution is. So that is something we are all working on. We don't have a specific timeline of we'll be ready to make those decisions, but it will be based on certainly strong business case.
We'll take our next question from Gena Wang with Barclays.
I have two. The first one, regarding the revenue. You also mentioned that the revenue slightly declined compared to the last quarter. Curious of the subcu Herceptin and rituximab relatively stabilized. Just wondering if you can share with us about the conversion rate. Are there any improvement there? Or do we expect further improvement, going forward, or it's already peaked out?
I'll ask Laurie to address that, Gena.
Gina, thanks for the question. You're right, we did see a quarter-over-quarter decline. Roche did mention on the call that they are seeing - while they are seeing share pressure on the IV, from the IV biosimilars, they are seeing durable shares in the subcutaneous versions of their drug, they are seeing some price pressures. And so that's really what's driving that decline. As far as conversion rates, it's been a while since Roche has commented on conversion rates, but we are seeing and expecting to see continued conversion. And then in the U.S., with Roche's HYCELA, they're continuing to see conversion there as well, and that's contributing to the 25% to 30% growth rate year-over-year that we're still expecting.
Okay. And then another question regarding HALO-301. Just wondering, I know the primary endpoint PFS interim analysis will be anytime soon. Just wondering if you can walk us through the different scenarios of the PFS and what will be the consequences to the - lead to the last analysis?
All right. I'll ask Dimitrios to walk you through what the potential outcomes of the interim analysis on PFS are, I think we'll address your question.
Sure. So as you recall, the study has two primary endpoints. One is progression free survival and the other one is overall survival. The interim analysis will be the final analysis of the progression free survival. And at that time point, we'll also look at the threat of overall survival and the overall benefit risk assessment of the drug. And if all of this is supported together with the significant tests, positive significant tests for PFS, this will be the foundation for an accelerated approval filing. Already, that's a very upset scenario. There's also a very high likelihood that there is a continuation of the study to the final OS Analysis later on, and there's also utility boundary that would then stop the study.
So Gena, just to summarize, we obviously will do the analysis, the potential for the study to stop for utility, there's potential for the study to stop for benefit. And as Dimitrios said, the study is designed to answer your question that it will go on to look at overall survival as well because that is the second primary endpoint.
So just regarding the middle scenario, like, say, if the PFS - like, do you have any threshold you have to achieve certain benefit? Or has a ratio for you can stop trial or like with positive trend of OS can stop for efficacy? So do you have any threshold for stop for efficacy?
Yes. The study is designed to be potentially supportive of a filing if we get statistical significance. We did power the study with a hazard ratio of 0.59. And so we would expect it to be somewhere in that range. But obviously, what really matters is that we see the statistically significant difference for the filing.
Okay. In the case, if it has a ratio higher than 0.59, do you have to continue until OS matures in order to submit the filing?
So I probably would separate it from the hazard ratio. If we don't achieve statistical significance, the study will continue to the overall survival endpoint.
We'll take our next question from Jim Birchenough with Wells Fargo.
This is Yanan in for Jim. So a question on future deals and the - particularly on the economics of the future deals. So how do you - you've talked about your confidence of, going forward, with more deals. Should we think of the economics to be mostly consistent with the current deals? Or could we also factor in some potential changes in economics going forward?
We negotiate each deal separately, but I do think we have established that value in the marketplace. And so I expect it will be in the range of what we've demonstrated as an example with the recent Roche and Alexion deals. But we always have some nuances and differences across our partnership, depending on what the partner is attempting to achieve. So we're very pleased with the value we've established today, and we expect to maintain that and always look for opportunities to even enhance that.
Great. And then a question regarding the regulatory path for future trials, involving the ENHANZE platform. Because as you gain more and more experience with different combinations, would it be - I'm just curious, would it be possible at some point to use, instead of a clinical outcome, to use a PK biomarker outcome to accelerate the trials?
Yes. I certainly think that is a terrific question. To date, all of the companies have proceeded with clinical studies. I know that's a question some people are asking, but we don't have any specific piece of fact we can give you today to say that's feasible. But as the safety profile and tolerability of ENHANZE becomes better and better established in multiple indications, it certainly is something that I think people will discuss with the FDA. But there's nothing we can support for that today.
We'll take our next question from Joel Beatty with Citi.
With regards to the pan-tumor potential of PEGPH20, could you discuss, are there any tumor types that you see as more promising to respond, whether certain sites of the tumor or histology characteristics or HA status? Is there anything in particular that you see as promising now that you had additional data rollout from different tumor types?
Yes. Let me ask Dimitrios to give you his thoughts.
Sure. Thank you very much, Helen. So besides the registration for the pancreatic cancer, Helen already spoke to the encouraging data in breast cancer. That is certainly an indication where we have an extensive dialogue with our experts in the field. We also have great interest in our enrollment in the biliary tract cancer study for cholangiocarcinoma and gallbladder carcinoma. And in the previous call, Helen also mentioned that in our own KEYTRUDA study for the non-small cell lung cancer, we saw some encouraging signals, particularly in PD-L1 negative patients. So this is certainly areas where we show - where we look into it. In terms of the HA subgroup, as you recall, the registration study in pancreatic cancer is in biomarker selected HA-high subgroup. In the other tumor types, we generated data, so far, in all-comer population, and we're looking into the different HA subgroups, and this analysis in [indiscernible] is ongoing.
Great. And maybe one other question. Could you characterize how the number of potential targets to be paired with the ENHANZE platform has changed over time? Or any changes in the types of those targets that are being pursued nowadays compared to the initial part of the program?
Yes, Joel. It's a very good question. As we mentioned on the call, the 53 targets are now available to our various partners. About half of them are - have been nominated by the partners. What we've seen in the last two years is people moving - partners moving earlier and earlier in the pipeline to start the development of the subcu version in Phase I clinical testing or even Phase II clinical testing, while their IV formulation is still in development. And so this is a very nice balance to where we've demonstrated that ENHANZE can be useful at the end of the life cycle of a product, as it's happening with the Roche product. Janssen is doing it to get more penetration and more success, I think, and capture its market shortly after its launch. And our partners are moving very early in the pipeline to start it to be competitive right out of the gate as they're anticipating what the market is going to be. The other thing we're seeing very much is that we're getting a much broader set of therapeutic areas. A lot of the injectable drugs are in oncology, and so far, while we did have a predominance of oncology, but we are seeing partners move in to multiple different therapeutic areas because there really is no limitation from a therapeutic area perspective for - ENHANZE can work. And I think we've mentioned before, something that we continue to believe, there are many targets out there and many products out there that could potentially benefit from ENHANZE, and that is also what gives us confidence that we will be signing additional future deals and agreements.
We'll take our next question from Jessica Fye, JPMorgan.
This is Daniel for Jess. Following on the last question on 301, what overall survival trend in 301 would be viewed as a win, assuming the study has gone PFS?
We haven't provided that level of detail. We did give the average range for PFS, but we haven't talked about and it's not our practice, particularly with a double-blind study like this, to be giving out that level of detail on overall survival.
And one more question. How should we think about results on the recently read-out Phase I of PEGPH20 in breast cancer, given that the patient selection was not dependent on HA status?
Yes. I'll give you my perspective and invite Dimitrios to comment. What we were looking for, and this was just the initial Phase I portion, was to identify if breast cancer should be responsive to PEGPH20 when it was added to eribulin. And so the mechanism by which PEGPH20 works is to increase the access of the chemotherapy to the tumor as well as potentially through increasing in the in-cell. So we do look at data as an encouraging proof-of-concept because we got a doubling of the response rate than it seemed with eribulin alone. You're absolutely right, we didn't get all of the data on HA, and so that is exactly the type of thing we're discussing with our advisers as we identify if it's a population of patients and an approach in breast cancer that would make sense for pursuing with PEGPH20. But it is our first demonstration of pan-tumor potential and, certainly, we were very encourage to be able to see that doubling of response rate in a hard-to-treat population. Dimitrios, would you add anything to that?
It seems that's a very complete response. Nothing to add from my side.
We'll take our next question from Arlinda Lee with Canaccord Genuity.
I guess maybe first on ALXN1210. Is this is a co-formulation that is progressing forward? Or is this another version? And then, I guess, maybe going back to some of the scenario discussions. When do you think we might have oversaturation from the 301 study? And I guess, how does that decision point kind of affect all the other discussions you're having in connection HALAVEN breast, there was that MS case study that was very encouraging as well. I'm just kind of curious how you guys think about this whole program ultimately?
Yes. Thanks, Arlinda. So the ALXN1210 is a mixture with ENHANZE. It isn't a co-formulated product that's currently being tested in Phase I. That is in development. So this is the admixture of 1210 with ENHANZE, which is what a number of our partners do to be able to get quickly into the clinic. A good example of that is the exactly how daratumumab conducted their Phase I study. And on the overall survival, we've not given any update as to the expectation on the OS maturation. And so that's again something that the data monitoring committee is obviously continuing to oversee the study and monitor, but we don't have any update that I can provide on that. I don't have a specific time line for when we will complete our business case analysis. Certainly, it's something we want to take into consideration as we wait for and evaluate the PEGPH20 pancreas cancer data. So we are just doing the work at the moment. And until we finish the business cases, we're not really going to be in a position to say are there any business cases that merit us, moving forward, with another study. And obviously, that would be something that would happen late in 2019 if we're raising to start considering that now. But we have to wait and get the business cases before we're in a position to give a clear answer on that. And we obviously are setting a good hurdle for that to be confident that it's going to be a wise investment to do that.
We'll take our next question from Do Kim with BMO Capital Markets.
This is Kit Tabor [ph] calling in for Do. First question, can you talk a little bit about the therapeutic area of the undisclosed Roche target? Is it still in oncology? Or is it extending to another disease area? And then you mentioned earlier about kind of the wild world of collaborations in the future. Can you give any color as to where that might be headed other than oncology?
Yes, let me ask Laurie to address that.
So unfortunately, when our partners haven't disclosed, we're a little bit limited. So no, I can't give any more color on Roche's undisclosed program. And as soon as we are able to, we will certainly share that information. And I think it's safe to say, with future collaborations on ENHANZE, we'll start to see different therapeutic areas as we expand beyond oncology. As Helen said, our partners are really starting to explore options earlier in their clinical development cycle. And so I think you'll see some different therapeutic areas with future deals.
Yes. We obviously already are in a couple of different therapeutic areas. Think about the HYQVIA products, Alexion's products, those are just examples and several other examples, unfortunately, aren't disclosed at this point in time. But we can say there are a number of different therapeutic areas outside of oncology, and we expect that to grow based on the interest we're seeing.
Okay, that's helpful. And one more, just with the constantly shifting landscape for immuno-oncology therapies. Is there anything that's making you reassess the non-small cell lung cancer and breast cancer development? Have you determined where would be the best cancer area to evaluate PEGPH20 after pancreatic cancer?
Yes. That's exactly the exercise we're going through. I think, there's no doubt that it's non-small cell lung cancer. In particular, it's a very fast-moving marketplace, and that's exactly why we want to have a very thorough business case that says, by the time we do a study, it's the marketplace and the position we are anticipating we want to enter at is still going to be relevant. And these are big decisions or big investments. And so what you're hearing from me is that we're not going to rush into anything. We've got to get the business case. We've got to have a very - a lot of confident that how we're going to design and which patient population we have there isn't going to be a dramatic shift in the future. So we're going to take our time, we're going to assess carefully and not rush to invest unless we have confidence.
[Operator Instructions]. We'll take our next question from Joe Catanzaro with Piper Jaffray.
Just one quick one for me, following up on the ALXN1210 product. So it appears that Alexion is advancing a subcutaneous delivery version of 1210 into Phase III later this year, in addition to the Phase I trial with the ENHANZE platform. So I was wondering if you could comment on the difference between the two products, I guess, mainly around dosing profile. And then, do you envision a scenario playing out with this - where this first-gen subcu product sort of drives this initial conversion, and then ENHANZE product can sort of come in at a later date and just simply be swapped in?
All right. I can comment on the - the ALXN1210 is being studied as a subcu today is expected to have a dosing frequency of weekly. And when Alexion signed the deal with us, their goal is that with ENHANZE, they're going to test every two weeks or every month because they cannot get to that dosing interval with their own product, 1210. With regard to their - Alexion's marketing and commercialization strategy, they haven't shared that with us, so I'm not in a position to be able to answer what their launch plans are for either product.
[Operator Instructions].
All right. I believe there are no additional questions. I really like to thank everyone for your participation in the call. As you heard, we've had another quarter of strong progress at Halozyme. Have a good evening, everyone. We look forward to updating you in another quarter. Thank you. Good night.
Thank you, ladies and gentlemen. This concludes today's teleconference. You may now disconnect.