- Initiates Organizational Restructuring to Close Oncology Operations, Reducing Headcount by Approximately 55%
- Board Authorizes Initiation of Capital Return with Share Repurchase Program for $350 Million Over Three Years
- First Quarter of Sustainable Profitability Expected in Second Quarter of 2020
SAN DIEGO /PRNewswire/ -- Halozyme Therapeutics, Inc. (NASDAQ: HALO) today announced strategic actions to reposition the Company with a focus solely on its ENHANZE® drug delivery technology.
In order to implement this strategic shift, Halozyme will immediately initiate an organizational restructuring to halt development activities for PEGPH20 and close its oncology operations. As a result, Halozyme expects the following:
- Headcount will be reduced by approximately 55%, or approximately 160 positions, with over 80% of the reduction completed in early January 2020.
- Restructuring and other cost saving efforts will result in savings of $130 to $140 million in 2020 compared with the Company's most recent guidance for 2019 operating expenses excluding cost of goods sold.
- Upon completion of the restructuring and after booking all related one-time charges, Halozyme anticipates becoming a sustainably profitable company beginning in the second quarter of 2020.
- Projected annualized operating expenses excluding cost of goods sold of between $65 million and $75 million will be achieved by the fourth quarter of 2020.
The Company expects to book separation and contract termination fees in the fourth quarter of 2019 and will provide further details during its third quarter 2019 financial results webcast and conference call on Tuesday, November 12.
The go-forward organization will comprise approximately 120 employees focused on driving the continued growth of ENHANZE®, specifically in areas that are critical to supporting partners such as manufacturing, quality, regulatory and product development. An additional 12 employees will continue promoting the Company's commercial drug Hylenex®.
The Company's ENHANZE® business continues to grow with three commercial products and 11 products currently in clinical trials. Halozyme will provide a more detailed update for its ENHANZE® business during its third quarter financial results webcast and conference call.
Halozyme's Board of Directors has also authorized the initiation of a capital return program to repurchase up to $350 million of the Company's outstanding common stock over the next three years. The timing of share repurchases and the number of shares of common stock that are repurchased will depend on market conditions and other factors. Repurchases may be commenced or suspended at any time or from time-to-time at the Company's discretion without prior notice. Repurchases may be made through both public market and private transactions. The Board will regularly review this capital return policy in connection with a balanced capital allocation strategy.
"Our mission now is to transition our strategy to focus on our high-growth, high-margin ENHANZE® drug delivery technology platform," said Dr. Helen Torley, president and CEO of Halozyme. "Our ENHANZE® business is well positioned for this growth, supported by strong partnerships with leading brands and a promising development pipeline. As a result, Halozyme now has a clear path to near-term, sustainable profitability with strong cash flows and high growth prospects. In addition, our share repurchase program reflects our continued commitment to creating value for our shareholders and to implementing a capital return philosophy aligned with our new company profile."
Dr. Torley continued, "The results of the well-designed and well-executed HALO-301 study were not what we wanted or expected. I wish to extend my deep appreciation for all who supported this study and made it possible, in particular the patients, their families, our investigators and their staff, our investors and the Halozyme team."
The actions taken by the Company follow the results of its HALO-301 Phase 3 clinical study, which were disclosed in a separate press release issued today.