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Halozyme adds BMS pact, widens Roche deal for Enhanze; $135M up front, $1.92B more possible

By Randy Osborne, Staff Writer

Halozyme Corp. nailed down a pair of deals – one with a new partner, another broadening the relationship already in place – that together are worth $135 million up front, with as much as $1.92 billion in potential milestone payments.

Shares of Halozyme (NASDAQ:HALO) were trading premarket at $14.96, up $1.78, or 13 percent.

The San Diego-based firm broke ground with Bristol-Myers Squibb Co. (BMS), of New York, by way of the global collaboration and license agreement to develop BMS immuno-oncology (I-O) medicines using Halozyme’s Enhanze drug delivery technology. Enhanze, based on recombinant human hyaluronidase enzyme, or rHuPH20, can let drugs ordinarily given by the intravenous route be used subcutaneously and, for those already given subcutaneously, reduce the need for multiple injections.

Under the terms of the BMS arrangement, Halozyme will collect $105 million for access to Enhanze. BMS has designated multiple I-O targets, including PD-1, and owns an option to select up to 11 more targets within five years. Halozyme stands to earn milestone payments of up to $160 million for each target, and more for combo products, subject to achievement of specified development, regulatory and sales-based goals. If drugs are commercialized, BMS will pay royalties, too.

For BMS, the pact will be dilutive to non-GAAP earnings per share in 2017 and 2018 by about 1 cent, and by about 5 cents in 2019.

In the second news item, Halozyme is expanding a 2006 arrangement with Roche Holding AG, of Basel, Switzerland, which has agreed to license Enhanze for exclusive development of an undisclosed therapeutic target. Halozyme gets $30 million right away, with the chance to bank up to $160 million more if specified bells ring in the development, regulatory and sales areas. Included are tiered, mid-single-digit royalties.

Halozyme’s first tie-up with Roche led to the pharma giant developing a pair of subcutaneous formulations of cancer drugs for markets worldwide. More recently folded into the contract was the study of Halozyme’s oncology drug, PEGPH-20, with Roche’s Tecentriq (atezolizumab); a clinical collaboration started last year. Tecentriq is indicated for advanced urothelial carcinoma and patients with metastatic non-small-cell lung cancer.

The Enhanze approach has lured a handful of partners to Halozyme’s table so far, including (apart from Roche and BMS) Pfizer Inc., Eli Lilly and Co., Johnson & Johnson, Abbvie Inc. and Shire plc, with three related products on the market globally.

In June, the FDA cleared Roche’s Rituxan Hycela (rituximab and hyaluronidase human) as a subcutaneous injection for the treatment of adults with previously untreated and relapsed or refractory follicular lymphoma, previously untreated diffuse large B-cell lymphoma, and previously untreated as well as previously treated chronic lymphocytic leukemia. The new therapy includes the same monoclonal antibody as intravenous Rituxan in combination with hyaluronidase, thereby reducing administration time from 1.5 hours or longer to five to seven minutes.