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Halozyme Therapeutics Inc. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: May 7, 2012 05:29PM
Halozyme Therapeutics Inc. (HALO) filed Quarterly Report for the period ended 2012-03-31. Halozyme Thera has a market cap of $907.4 million; its shares were traded at around $7.89 with and P/S ratio of 16.2.
Highlight of Business Operations:Product Sales, Net Product sales, net were $187,000 for the three months ended March 31, 2012 compared to $165,000 for the three months ended March 31, 2011. Based on the reintroduction of Hylenex recombinant in December 2011, we expect product sales to increase in 2012 as compared to 2011.
Revenues Under Collaborative Agreements Revenues under collaborative agreements were $7.3 million for the three months ended March 31, 2012 compared to $7.4 million for the three months ended March 31, 2011. Revenues under collaborative agreements primarily consisted of the amortization of license fees and milestone payments received from Roche and Baxter of approximately $4.6 million and $5.7 million for three months ended March 31, 2012 and 2011, respectively. Revenues under collaborative agreements also included reimbursements for research and development services from our partners of approximately $2.4 million and $1.6 million for the three months ended March 31, 2012 and 2011, respectively. Research and development services rendered by us on behalf of our partners are at the request of the partners; therefore, the amount of future revenues related to reimbursable research and development services is uncertain. We expect the non-reimbursement revenues under our collaborative agreements to continue to fluctuate in future periods based on our partners abilities to meet various clinical and regulatory milestones set forth in such agreements and our abilities to obtain new collaborative agreements.
Selling, General and Administrative SG&A expenses were $6.6 million for the three months ended March 31, 2012 compared to $3.4 million for the three months ended March 31, 2011. The increase of $3.2 million, or 94%, was primarily due to increases of $2.1 million in compensation costs, including a $497,000 increase in stock-based compensation, and $375,000 in sales and marketing expenses mainly associated with the reintroduction of Hylenex recombinant in December 2011. SG&A headcount increased to 41 employees at March 31, 2012 from 24 employees at March 31, 2011. In connection with the reintroduction of Hylenex recombinant in December 2011, we expect SG&A expenses to increase in 2012 as compared to 2011.
We believe that our current cash and cash equivalents will be sufficient to fund our operations for at least the next twelve months. Currently, we anticipate total net cash burn of approximately $55.0 to $60.0 million for the year ending December 31, 2012, depending on the progress of various preclinical and clinical programs, the timing of our manufacturing scale up and the achievement of various milestones under our existing collaborative agreements. We do not expect our revenues to be sufficient to fund operations for several years. We expect to fund our operations going forward with existing cash resources, anticipated revenues from our existing collaborations and cash that we may raise through future transactions. We may finance future cash needs through any one of the following financing vehicles: (i) the public offering of securities; (ii) new collaborative agreements; (iii) expansions or revisions to existing collaborative relationships; (iv) private financings; and/or (v) other equity or debt financings.
We participate in a highly dynamic industry which often results in significant volatility in the market price of common stock irrespective of company performance. As a result, our high and low sales prices of our common stock during the twelve months ended March 31, 2012 were $13.50 and $5.54, respectively. We expect our stock price to continue to be subject to significant volatility and, in addition to the other risks and uncertainties described
Stocks Discussed: HALO,