Halozyme Therapeutics Management Discusses Q2 2012 Results - Earnings Call Transcript

Halozyme Therapeutics (HALO)

Q2 2012 Earnings Call

August 06, 2012 4:30 pm ET

Executives

Anne Erickson

Gregory I. Frost - Co-Founder, Chief Executive Officer, President and Director

Kurt A. Gustafson - Chief Financial Officer, Principal Accounting Officer, Vice President and Secretary

Analysts

John S. Sonnier - William Blair & Company L.L.C., Research Division

Jason N. Butler - JMP Securities LLC, Research Division

Christopher Holterhoff - Oppenheimer & Co. Inc., Research Division

Daniel Chung - Jefferies & Company, Inc., Research Division

Ying Huang - Barclays Capital, Research Division

Presentation

Operator

Greetings, and welcome to the Halozyme Therapeutics Second Quarter 2012 Financial Results Conference Call. [Operator Instructions] As a reminder, this conference call is being recorded. It is now my pleasure to introduce your host, Anne Erickson, Executive Director of Investor Relations at Halozyme Therapeutics. Thank you, Ms. Erickson. You may begin your conference.

Anne Erickson

Good afternoon. Thank you for joining Halozyme's quarterly update conference call. With me on the call today are Gregory Frost, President and Chief Executive Officer; and Kurt Gustafson, Chief Financial Officer.

This afternoon, Halozyme released second quarter 2012 financial results. If you've not received this news release or if you'd like to be added to the company's distribution list, please e-mail me at aerickson@halozyme.com.

This call is also being webcast live over the Internet at www.halozyme.com, and a replay will be available on the company's website for the next 14 days.

Before we begin, let me remind you that during this conference call, we will be making forward-looking statements. The Private Securities Litigation Reform Act of 1995 provides the Safe Harbor for forward-looking statements. All statements made during this conference call that are not statements of historical fact constitute forward-looking statements. The matters referred to in forward-looking statements could be affected by the risks and uncertainties of Halozyme's business, both known and unknown. Such risks inherent in the company's business are described in our filings with the Securities and Exchange Commission, as well as in our news releases. The company's actual results may differ materially from those expressed in or indicated by such forward-looking statements.

With that, I'd like to turn the call over to Gregory Frost, Halozyme's President and CEO.

Gregory I. Frost

Thank you, Anne, and good afternoon to everyone. We appreciate you participating in our second quarter call for 2012.

Today, I'll be elaborating on the announcement we made last week, as well as providing an update on the business. After that, Kurt Gustafson, Halozyme's CFO, will review the quarter's underlying financial results with you.

As you know, we confirmed last week that Baxter received the Complete Response Letter from FDA's Blood Products division for the HyQ BLA. And at this point in time, the subcutaneous plasma derivatives programs for the recombinant human hyaluronidase, or rHuPH20, are not dosing patients.

Upon receiving this information from Baxter and ViroPharma early last week, we contacted FDA's Drug division to ascertain whether this regulatory action would apply to other programs using rHuPH20. According to our most recent communications with the drug divisions last Wednesday, following submission of a data supplement to the Hylenex NDA, including detailed immunogenicity data from insulin and subcutaneous Herceptin programs, we were informed by the drug division that concerns appear to be related to potential interactions with certain biologics that generate an antibody response that is different from what we've seen in other development programs using rHuPH20.

Furthermore, the drug division confirmed that there is no need for actions against Hylenex or clinical programs under the Hylenex IND. As a reminder, the only open trial at this time under the Hylenex IND is the ongoing Hylenex insulin pump study.

For these reasons, we believe that the regulatory concerns raised by FDA's Blood Products division are specific to Baxter and ViroPharma's clinical programs.

It's not abnormal to see some form of antibodies to recombinant proteins with sufficient assays. In fact, approximately 10% of the general population test positive to anti-rHuPH20 antibodies prior to any exposure to the rHuPH20 enzyme. This is also not uncommon for other proteins.

What was different here is the relative levels of antibodies or titers. Levels of these antibodies in both the insulin and Herceptin studies were within the same levels posttreatment as seen in the pretreatment populations, or in other words, no signals of treatment boosting.

In the HyQ registration study, we observed antibody levels that were orders of magnitude higher than have previously been observed in any other repeat dose clinical trial, which is suggestive of some form of immune response with this combination. So it is possible that there is some form of interaction between these plasma derivatives that's leading to these high antibody levels, but further investigation is required.

However, it's still important to note that the antibodies have not been associated with any adverse events, and again, none of the samples were neutralizing against the rHuPH20 enzyme.

The Complete Response Letter for HyQ has requested additional preclinical data to support the BLA application and primarily focused on these elevated levels of non-neutralizing antibodies generated against rHuPH20 and any possible effects of these antibodies.

So I want to reiterate that no adverse events related to these antibodies were seen in the Phase III HyQ registration trial. However, much like the standard battery of toxicology tests we've already completed in order to establish the safety profile of the rHuPH20 enzyme, the CRL has requested that we address any potential risk of exposure to the elevated enzyme antibody titers observed in the HyQ program through this similar battery of tests.

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