Halozyme Therapeutics (HALO) TD Cowen 45th Annual Healthcare Conference summary

Patent portfolio and licensing strategy

• MHA patent portfolio, unveiled in October, targets modified hyaluronidase technologies and is distinct from ENHANZE, with over 100 patents globally and coverage through 2032 (EU) and 2034 (US).

• Licensing is the preferred business model, with outreach to Merck for a license on MHA IP related to subcutaneous Keytruda; if unsuccessful, litigation is planned.

• Royalty rates for MHA licenses are expected in the mid-single digits (3–7%), with milestone payments for exclusive licenses historically ranging from $130–160 million.

• ENHANZE and MHA are separate IP portfolios, so exclusivity with Bristol on ENHANZE does not restrict MHA licensing to others.

• Patent challenges by Merck are underway, with a USPTO decision on review expected in June; only a small subset of patents are under review, and the portfolio is much broader.

Legal and regulatory considerations

• If Merck does not license, patent litigation could seek to enjoin subcutaneous Keytruda sales, but IV Keytruda would remain available.

• Any invalidation of MHA patents under review would not affect ENHANZE or the broader MHA portfolio due to the large number of additional patents.

• MHA licensing agreements differ from ENHANZE collaborations, as they do not involve development support or API supply.

• New modified hyaluronidases must independently demonstrate safety and efficacy to regulators, similar to the original ENHANZE pathway.

Market opportunity and financial outlook

• Subcutaneous Keytruda represents a significant royalty opportunity, with Merck targeting 30–50% conversion of eligible patients.

• ENHANZE patent extension in the US could increase royalty revenue, especially for Darzalex, projected at $9 billion in 2027.

• Guidance to 2028 assumes the first 10 ENHANZE products, with upside potential from additional indications and higher conversion rates for drugs like VYVGART Hytrulo and Ocrevus Zunovo.

• Additional ENHANZE deals are expected this year, with ongoing discussions for both IV-to-SubQ conversions and extended dosing opportunities.

• Long-term strategy includes using strong free cash flow for new platform acquisitions and continued share buybacks, aiming for diversified royalty streams by 2030.