Halozyme Therapeutics, Inc. Q2 FY2022 Earnings Call

Good afternoon. My name is Rex, and I will be your conference operator today. At this time, I would like to welcome everyone to the Halozyme Q2 2022 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. Thank you. At this time, I would like to introduce Tram Bui, Vice President, Investor Relations and Corporate Communication. You may begin your conference.

Thank you, operator. Good afternoon and welcome to Halozyme's second quarter 2022 financial and operating results conference call. In addition to our press release issued today after the market close, you can find a supplementary slide presentation that will be referenced during today's call in the Investor Relations section of our website. Leading the call will be Dr. Helen Torley, Halozyme's President and Chief Executive Officer, who will provide an update on our business; and Nicole LaBrosse, our Chief Financial Officer, who will review our financial results for the second quarter ended June 30th, 2022. On today's call, we will be making forward-looking statements. I refer you to our SEC filings for a risk and uncertainties. Also during the call, both GAAP and non-GAAP financial measures will be discussed. The non-GAAP or adjusted financial measures are reconciled with the comparable GAAP financial measures in our earnings press release and slide presentation. I'll now turn the call over to Helen Torley.

Thank you, Tram and good afternoon, everyone. I'll begin on slide three. Our accomplishments in the first half of the year are illustrative of the many opportunities Halozyme has to continue to enhance our growth. With the acquisition of Antares, which further expanded our growth opportunities, adding a best-in-class auto-injector vector platform and a specialty commercial business, thereby augmenting Halozyme's strategy. These additions further strengthened our position as a leading drug delivery company and expanded our strategy to include specialty products. And we continue to deliver operational excellence, achieving multiple drug delivery, commercial, and corporate development milestones. I'm happy to report that integration activities are proceeding to plan as we approach the 90-day time point, and we're on track to achieve the goals we established. It is this combination of opportunity and execution that gives us confidence in our differentiated growth story. Focusing now on the financial performance highlights, we reported second quarter revenues, inclusive of Antares's revenue post the May 24th acquisition close of $152.4 million, a 12% year-over-year increase. This resulted in GAAP earnings per share of $0.16, and non-GAAP adjusted earnings per share of $0.53. Our strong second quarter revenue results were driven by continued growth in royalty revenues from ENHANCE and the addition of the post-close royalty revenues from auto-injector devices and product sales as a result of the Antares acquisition. Based on the recent close of the Antares transaction and strong year-to-date results, together with the latest information from collaboration partners and planned expenditures for the year, we are raising our guidance for 2022. For full year 2022, we expect total revenues of $655 million to $685 million, an increase from our prior guidance range of $530 million to $560 million. This represents growth of 48% to 55% over 2021 total revenue. GAAP diluted earnings per share is updated to $1.20 to $1.25, a decrease from our prior guidance of $1.90 to $2.05, mainly due to acquisition-related costs in the current year. Adjusting for acquisition-related costs and other adjustments, we expect non-GAAP earnings per share to be $2.10 to $2.25, an increase from our prior guidance range of $2.05 to $2.20, representing an increase of 5% to 12% over 2021 non-GAAP diluted earnings per share. Let me now move to slide four, and I'll provide some more detail on royalty revenue performance. We continue to see and project robust growth in this high-margin recurring revenue stream. In the second quarter, total royalty revenue was $85.3 million, representing 86% growth over the second quarter of 2021 and 23% sequential growth. These results include ENHANZE royalty and our encourage drug-device royalty stream for the portion of the quarter that follows the May transaction close. Royalty revenue growth continues to be driven by our Wave 2 product launches, led by the successful ongoing global launches of Janssen's subcutaneous formulations of DARZALEX and also by Roche’s Phesgo. Based on strong momentum, we project an increase in royalty revenues for 2022. Year-over-year growth is now projected to be greater than 65%, resulting in royalty revenue of $340 million to $350 million, an increase from our prior projection of 50% growth. This increased growth is driven by the addition of the ENHANZE device royalty revenues and DARZALEX subcutaneous performance. Turning now to slide 5, I will provide some more color on DARZALEX and DARZALEX subcutaneous performance. Janssen’s parent Johnson & Johnson reported second quarter worldwide sales of DARZALEX, including both the IV and subcutaneous forms of $2 billion, an increase of more than 46% year-over-year on an operational basis. The company noted that DARZALEX sales were driven by share gains in all regions, strong continued uptake, and increased use of subcutaneous formulation. Moving to subcutaneous DARZALEX, SC share continues to grow in the United States during the second quarter with an 83% end of quarter share based on Symphony data. This is an increase from 80% share at the end of the first quarter. Additionally, Johnson & Johnson reported SC conversion grew to 80% in Europe. Moving now to the recent results by our partner Roche for the second quarter of 2022, Roche reported strong sales of Phesgo, their combination treatment for patients with breast cancer that utilizes the ENHANZE technology. As a result of ongoing conversion and geographic expansion, second quarter sales of Phesgo were CHF325 million, an increase of 241% year-over-year. Phesgo, with a short five to eight minute subcutaneous administration plan, has proven to be an attractive option for patients with healthcare systems, especially in countries where infusion capacity is limited, with some countries now reporting up to 90% adoption. We continue to expect strong quarter-over-quarter growth as a result of the ongoing launches in Europe and the rest of the world and through continued penetration in oncology accounts in the United States. We're also excited that Roche is initiating a study of Phesgo with giredestrant in frontline encouraging positive, ER positive metastatic breast cancer patients, opening up the potential for a future oral and SubQ treatment regimen. And just a brief comment on Wave 1 products, which include MabThera subcutaneous, also called Rituxan Hycela, or subcutaneous Herceptin or Herceptin Hylecta. We continue to project a modest decline in royalties from these mature products as a result of the ongoing impact related to biosimilar competition to the IV product. I will note that these products are still contributing nicely as a recurring source of revenue. Illustrated on Slide 6 is an overview of the ENHANZE portfolio. I'll focus your attention on Wave 3 and 4, which represent new royalty revenue opportunities for Halozyme. Our Wave 3 products represent the next set of opportunities with potential launches projected between 2023 and 2025. You will note that we've expanded Wave 3 to four products, as we are now including OCREVUS following the recent update from both the top-line data from the Phase 3 SC study, which will be available in 2023. The study showed non-inferior levels of Tecentriq in the blood were injected subcutaneously compared with intravenous infusion in immunotherapy-naive patients with advanced or metastatic non-small cell lung cancer for whom prior platinum therapy has failed. The safety profile of the subcutaneous formulation was also consistent with IV Tecentriq. We believe these positive results further demonstrate the opportunity for our core formulation of ENHANZE to potentially benefit patients by reducing the treatment time for Tecentriq to three to eight minutes as a subcutaneous delivery, down from 30 to 60 minutes for IV treatment. Roche plans to present the findings of the study at an upcoming medical meeting and submit for regulatory approval to health authorities globally, including the U.S. Food and Drug Administration and European Medicines Agency. During the first half of 2022, Tecentriq administered intravenously had revenues of CHF1.8 billion, growing 11% year-over-year, with Roche reporting a strong uptick in lung cancer in the adjuvant setting. I'll move now to argenx and efgartigimod. Following positive results announced in March of 2022, argenx is on track to submit the biologics license agreement for efgartigimod with ENHANZE in Myasthenia Gravis to the U.S. Food and Drug Administration by the end of this year. We believe efgartigimod SC is on track to be the first of our Wave 3 potential partner launches with potential approval anticipated in 2023. Efgartigimod IV, which has the brand name Five Guard, was approved by the FDA in December of 2021 and in Japan in January of 2022 for the treatment of adult patients with generalized Myasthenia Gravis. On their recent second quarter call, argenx reported a strong global launch for the byproduct with Q2 revenues of $75 million, with an estimated 1,400 patients on treatment, up from approximately 400 patients in Q1. Argenx management further commented that efgartigimod with ENHANZE is currently being evaluated in four additional indications with multiple data readouts projected in 2023, including data in idiopathic thrombocytopenic purpura, chronic inflammatory demyelinating polyneuropathy, and Penthagus. With analyst consensus of almost $3 billion in sales for efgartigimod in 2026, we are excited to be partnering with argenx on this important new therapy for autoimmune diseases. In closing, out of the Wave 3 products, BMS continues with their evaluation of nivolumab subcutaneous in their Phase III study. I'll move now to Slide 8, which illustrates the enhanced pipeline by stage of development. Our goal remains to continuously expand the number of products that are in development and to advance products to major stages of development and launch with many of these events resulting in milestone revenue payments to Halozyme. Highlighted on this slide are the wave four potential launches. These products, if they continue in development, have the potential to launch in the 2025 to 2027 timeframe. Eleven partner products are in ongoing Phase I clinical testing or have completed Phase I testing. Let me provide some key updates during the quarter. Chugai initiated a Phase I study to evaluate the pharmacokinetics, pharmacodynamics, and the safety of a targeted antibody administered subcutaneously with ENHANZE. It is notable that we announced our collaboration and licensing agreement with Chugai in March of this year, making this the fastest time to Phase I dosing in our history at just over two months. This is a strong signal that this collaboration is off to a great start. In June, our partner ViiV initiated enrollment in a Phase I single-dose escalation study to evaluate pharmacokinetics, safety, and tolerability of long-acting cabotegravir administered subcutaneously with ENHANZE. This is the second target and the third trial to be initiated since we announced this agreement just over a year ago. Additionally, our partner Takeda recently reported positive top-line results for their Phase III ADVANCE-1 clinical study of HYQVIA, which is Immune Globulin 10% with ENHANZE in patients with chronic inflammatory demyelinating polyneuropathy, which is also called CIDP, and is a rare autoimmune disease. The clinical study met its primary endpoint for maintenance treatment of CIDP, and Takeda plans to submit applications for HYQVIA's regulatory approval in the United States and European Union by the end of 2022. In addition to these significant advances in the first half of the year, we continue to expect further pipeline progress and expansion for the remainder of the year. We project this will result in more than 10 new study starts in 2022, including more than six new Phase II or Phase III trial starts for existing enhanced partner programs and two new products entering the clinic this year. You may also have noted that we recognized $15 million in collaboration revenue in the second quarter. This is related to an anticipated study start by a partner in the third quarter. And concluding this ENHANZE development program overview, I'm pleased to announce that in June, BMS nominated an undisclosed target, resulting in a $5 million payment. This will add to BMS' ongoing portfolio, which includes a subcutaneous version of nivolumab, which is in Phase III testing, and a subcutaneous nivolumab relatlimab combination which is in Phase I development. We are very pleased with the progress over to the partner development pipeline, and we look forward to supporting the significant enhanced growth opportunities that these represent. And I'll give you a bit more color regarding the Antares acquisition and our integration progress since this transaction closed on May 24. Summarized on slide nine is the current Antares portfolio. Our excitement regarding the new opportunities that the Antares portfolio brings is high, with decades of experience in device development and engineering. We gained a strong internal development team who specialize in creating custom-designed drug delivery devices that are tailored to the patient and their therapeutic need. We've activated teams made up of individuals from both companies whose goal is to expand the number of companies licensing our auto-injector technology. Work is also underway to design and create a large volume auto-injector, which, by combining the innovative Antares auto-injector platform with ENHANZE, will offer a unique approach for patient-friendly subcutaneous treatment delivery. What is so exciting is that we see opportunities for large volume subcutaneous delivery across the spectrum of disease areas for both small molecule drugs and biologics. The strong cultural fit across our companies, including a focus on innovation for patients, has meant that the teams are hitting the ground running. We are also excited to have added three proprietary products: XYOSTED, TLANDO, and NAPTURNA. Our focus with XYOSTED, our weekly virtually painless subcutaneous testosterone replacement treatment, which is delivered by auto-injector, is to grow share through gaining patients who previously have been receiving intramuscular treatment. I'm pleased that XYOSTED achieved its highest number of weekly prescriptions recently, a sign of its continued growth. And with our field force expense executed, we launched TLANDO several weeks ago in June. Our access team is focused on gaining and then expanding payer coverage as our field team is educating physicians on TLANDO, a twice-a-day oral testosterone replacement treatment that does not require dose titration. Moving now to slide 10, the acquisition of Antares through revenue resulting from commercial product sales and from the innovative auto-injector platform, is projected to add durable revenue and revenue growth on top of the already strong revenue growth to expect to see for ENHANZE. Our projected ENHANZE growth is resulting from growth in royalty revenues from the multiple waves of potential new launches we have just discussed. Moving now to slide 11, the Antares acquisition is fully aligned with our previously announced capital allocation priorities. These priorities were to invest to maximize ENHANZE revenue growth and durability, to continue to return capital to our shareholders through share repurchases, and to seek to acquire a platform technology that would add to and further extend our revenue durability. As you can see from the updated guidance for the year and in line with our prior comments, the transaction is expected to be accretive to Halozyme's 2022 revenue and non-GAAP earnings and supports our growth strategy to 2027 and beyond. I'll now turn the call over to Nicole to discuss our second-quarter financial results and provide more detail on the combined company guidance.

Thank you, Helen. Beginning on slide 12, total revenue for the second quarter was $152.4 million compared to $136.5 million in the prior year period. The year-over-year increase of 12% was primarily driven by an increase in royalty revenue and the addition of product sales as a result of the Antares acquisition, partially offset by a decrease in revenues under collaboration agreements due to a $40 million upfront payment associated with entering into the collaboration in the prior year period. Royalty revenue for the second quarter was $85.3 million, an increase of 86% compared to $45.8 million in the prior year period. The year-over-year increase was primarily driven by continued strong uptake of Janssen's subcutaneous DARZALEX utilizing ENHANZE. Cost of sales for the second quarter were $33.9 million compared to $23 million in the prior year period. The year-over-year increase was primarily driven by an increase in product sales as a result of the Antares acquisition. Operating income was $34.1 million compared to $93 million in the prior year period. The year-over-year decrease was primarily driven by one-time transaction costs related to the Antares acquisition, including amortization of intangible assets. On a GAAP basis, diluted earnings per share was $0.16 compared to $0.62 in the prior year period. On a non-GAAP basis, diluted earnings per share was $0.53 compared to $0.66 in the prior year period. When comparing to the prior year, it's important to note that 2022 was our first year recorded income tax expense, which impacted the current period of non-GAAP diluted EPS by $0.14 per share. Moving now to slide 13. Based on the recent close of the Antares transaction and strong year-to-date results, as well as the latest information from our collaboration partners and planned expenditures for the year, we are raising guidance for 2022. For the full year 2022, we expect total revenue of $655 million to $685 million, an increase from our prior guidance range of $530 million to $560 million, representing growth of 48% to 55% over 2021 total revenue. The projected revenue contribution from the Antares business for the full year guidance is $115 million to $125 million. In terms of the components of our revenue, we expect revenue from royalties to increase by greater than 65% over royalty revenue in 2021 to $340 million to $350 million. Collaboration revenues for 2022 are expected to be at similar levels to what we achieved in 2021 and substantially more weighted in the fourth quarter of the year based on our expected tightening for partner milestone-bearing events. Product sales from 2022 are expected to increase from 2021 due to the contribution of sales from the Antares acquisitions. We expect operating income of $240 million to $265 million, a decrease from our prior guidance range of $350 million to $380 million, representing a decline of 4% to 13% over 2021 operating income. This includes one-time transaction costs related to the Antares acquisition, including amortization of intangible assets, as well as the planned incremental $20 million operating expense investment in 2022 to maximize ENHANZE and extend royalty revenue durability. We expect GAAP diluted earnings per share of $1.20 to $1.35, a decrease from our prior guidance of $1.90 to $2.05, mainly due to acquisition-related costs in the current year. Adjusting for acquisition-related costs and other adjustments, we expect non-GAAP diluted earnings per share to be $2.10 to $2.25, an increase from the prior guidance range of $2.05 to $2.20 and representing an increase of 5% to 12% over 2021 non-GAAP diluted earnings per share. This increase in the guidance range of $0.05 per share is a result of the projected accretion from the Antares acquisition. Our balance sheet remains strong with a 3.3 times net debt-to-EBITDA ratio at June 30, 2022, which we expect to reduce to less than three times by the end of the year. We continue to have access to low-cost pro-rata based debt through our revolving credit facility and project strong cash flows from operating activities. We will continue to execute on our previously announced three-year $750 million share repurchase program, inclusive of a $150 million accelerated share repurchase initiated in December of 2021, which concluded in June. We continue to plan for up to an additional $100 million in share repurchases in 2022, depending on market conditions and other factors. With that, I'll now turn the call back to Helen.

Thank you, Nicole. I would like to thank the entire Halozyme team for the hard work that resulted in our strong performance this quarter and for the excellent progress with integration. As you heard today, we are continuing to deliver growing revenues, growing operating income, and to expand our pipeline, resulting in strong near-term and long-term growth. Thank you all for joining us today. And with that, we'll be delighted to take your questions. Operator, would you please open the call for the questions.

Your first question comes from the line of Mike DiFiore. Your line is open.

Hi, guys. Congrats on the quarter and thanks for taking my questions. Just two for me. beginning a lot of this from investors on the potential impact of drug pricing reform on HALO's top line, to the extent if you can, if you could offer any color on how that may affect your finances, that would be great. And along those lines, would co-formulated products be considered new products in their own right? And therefore, not tied to the parent brand launch date, or will they be considered one and the same? And separately, any color you can give on the TLANDO launch. The Rx data seems as if it may be restricted in ICFI and IMS. Thank you.

All right. Well, thanks for the questions, Mike. Let me just start with a high-level comment on drug pricing reform. Obviously, the Senate Bill has been issued, but we're still awaiting a lot of the regulations to be published by CMS, so it's hard to give a specific answer. I do think one of the very important factors of Halozyme though, is we do have a broad and diversified portfolio of products that are in different stages of development across multiple partners for selling their innovative products and medicines globally. And I do think that is a very strong position to have, considering that there will only be certain drugs that are going to potentially be impacted in the future by these pricing reforms. But it's a little bit too early to talk about this. We can say that for the biologic drugs, any impact is expected in 13 years after their first launch. And certainly, as we look at our portfolio, those events will certainly be well past 2025, if that's helpful. But we'll be sharpening our pencils when more details are available, Mike, to be able to assess that. But certainly, we're feeling in a very good position because of our portfolio. Similar type of response to the co-formulations, I think until the regulations are written and published, it is not going to be possible to give an opinion on that or understand exactly how this is going to be operationalized. So we certainly are beginning our work on the Senate Bill and waiting for those CMS regulations to be able to come up with a full assessment. And obviously, we'll share our assessment at that time. TLANDO launch, as you know, just launched a few weeks ago in June. Our focus at the moment is really on market access. Our team is working to gain access and coverage within the key pharmacy benefit managers. While our representatives are out talking to the physicians, presenting to them our oral therapy, a twice-daily oral therapy that doesn't require dose titration. So early days yet. And certainly, key are going to be working to get that additional access in place and continuing to educate physicians on what we think is an important new offering for patients looking for just a strong replacement.

Very helpful. Thank you.

Your next question comes from the line of Jacob Walter. Your line is open.

Operator, maybe we can move to the next question. I think we're not able to hear and maybe Jake could come back.

Certainly. Your next question comes from the line of Corinne Jenkins. Your line is open.

Great. Good afternoon. Maybe a little more high level. Can you just provide an update on rate, then the integration of Antares and what you've learned, just in the initial two weeks post-close of that deal? And anything particular with respect to the commercial infrastructure and where maybe you are going to be focused in that business?

Thank you, Corinne. Before completing the acquisition, we had shared that we had thorough integration plans prepared. I can report that from the perspectives of cultural and process integration, as well as implementing our performance strategies and new ideas, everything is going very well and is on track. I want to express my gratitude to everyone at both Halozyme and Antares for their contributions. A couple of highlights to note include how the teams quickly began developing ideas for a distinctive high-volume auto-injector compatible with ENHANZE. This is a great example of the synergy created by bringing our companies together. Regarding your question about commercial infrastructure, at the start of this year, Antares expanded its field team from about 90 to 108 representatives to prepare for the addition of TLANDO and to enhance our visibility and reach among top prescribers. I’m pleased to report that this expansion is nearly complete, and most territories are now filled with representatives who are getting up to speed with the new product. While any integration does bring some disruption, I’m proud of our teams for achieving strong results and managing to navigate the modest disruptions in their physician call lists while continuing to perform. I am confident that this will lead to growth for both our products, especially as we compare 2022 to 2021. Looking ahead to 2023, we are well positioned to grow both our brands.

Thanks. And then maybe, is there any additional color that you can provide on the pull-forward of Ocrevus subcu, pulling it into the Wave 3 group of products? And potentially any color on what that suggests about relative importance of that product to your partner within the indication?

And so sorry, Corinne, I couldn't catch some parts of that. Would you mind repeating?

Sure. Sorry. What additional color can you provide on the Ocrevus subcu pull-forward that's now in Wave 3? It was previously Wave 4. And then any thoughts on what that suggests about the relative importance of that product to Roche in that space? Can you just give a little sense with like a notable update in the quarter?

That's great. With regard to Ocrevus, I don't necessarily think there's sort of a proof forward. It was just an update that Roche management happened to mention in their most recent earnings call that they did expect data in 2022. So, with that confirmation and certainty of them articulating that, we were able to more firmly move that into Wave 3 given the potential now for a launch between 2023 and 2025. So I would look at that more as clarity provided by Roche that we could be a repeat and plan again. And with regard to where it fits in the portfolio, if you really look over the last, I think, 12 to 18 months, there's been several comments made by Roche management on its quarterly calls about Ocrevus being a terrific and important growth brand for them. But recognizing that the marketplace is also seeing more oral and subcutaneous therapy. And they commented at one point that being able to move over the subcutaneous really was fitting with where therapy seems to be going in this marketplace. So those comments certainly signal to me that they see subcu as an important part of their offerings for patients with multiple sclerosis.

Thank you.

Your next question comes from the line of David Risinger. Your line is open.

Thank you very much. I have a couple of questions. First, could you discuss the impact of Antares on non-GAAP EPS for the second quarter? What was the figure for that quarter? Additionally, what is the anticipated effect on your updated full-year 2022 non-GAAP EPS projection? Second, could you remind us about the discussions regarding a once-daily TLANDO and the potential timing for it? Lastly, could you provide insights on business development prospects and opportunities for new partnerships in the near to medium term? Thank you.

Thank you, David, for the question. And I'll ask Nicole to start; I will take these in order. Would you answer the questions on the non-GAAP EPS?

Yes, happy to do this. So, while we haven't provided that level of detail, we did provide that the Antares revenue streams did contribute $18.7 million for the quarter. And just a reminder on that contribution, that is from the time period of May 24th, the date of acquisition through to the end of the quarter. So, for that period, that is the period that we've included in our Q2 results. And then I can say for full year as well, you'll see that we did update our guidance for the full year, including updating our non-GAAP diluted EPS, and we've adjusted that range; we've increased it by $0.05 per share, and that is reflective of the accretion that we project for the full year related to the Antares acquisition and the contribution from that part of the business.

I will now provide an update on the once-daily TLANDO. We have decided not to pursue the option for TLANDO XR, which is the lower-dose version, based on a thorough analysis of the anticipated high costs and duration of the clinical study compared to the expected return. With our current portfolio, which includes the exceptional XYOSTED subcutaneous option that allows for a weekly injection and the twice-daily oral form, we believe we have unique offerings in the testosterone replacement therapy market. In terms of business development, there has been significant activity. We've been busy presenting new options to our current partners, including a 1 ml auto-injector, a 2.25 ml auto-injector, and discussing plans for a 5 ml auto-injector utilizing ENHANZE technology. The feedback has been very positive, with numerous partners expressing interest and revisiting their portfolios for potential fit. I'm also pleased to report an increase in incoming inquiries about various possibilities, which is a positive sign. As we have done previously, we conducted a systematic assessment of potential products suitable for a 1 ml, 2.5 ml, or 5 ml auto-injector and are initiating outreach to present these offerings to new companies and partners starting in August. Overall, the reception has been very encouraging, highlighting how distinct the Antares auto-injector is. We've received feedback indicating that what sets it apart is our ability to create a customized device in collaboration with Halozyme engineers, ensuring the design meets the needs of the target patient population, addresses the disease, and optimizes the injection speed and volume. Our recent business development discussions have started off very strong and encouraging.

Thank you.

Your next question comes from the line of Jessica Fye. Your line is open.

Hi, guys, thanks for taking my question. So with the Antares closed under your belt, I was wondering if you could update us on your capital allocation priorities, when you think about additional share repurchase versus debt pay down versus more acquisitions. Thank you.

Yes. Well, let me ask Nicole to address that.

We remain focused on our capital allocation priorities, particularly concerning share repurchases. Our $750 million plan, initiated late last year and spanning three years, is still in place. This quarter, we completed the first $150 million purchase through an accelerated share repurchase program. We also plan to buy up to an additional $100 million in the remaining months of the year, which is on track. We are closely monitoring our access to capital markets and have a low net leverage ratio of 3.3 times at the end of the quarter, which we expect to decrease to below three times by year-end. We will continue to utilize that type of leverage. Additionally, as mentioned by Helen, we are concentrating on the integration and success of our recent acquisition, while also aiming to grow externally.

There are no further questions at this time. Ms. Torley, I turn the call back over to you.

Well, thank you. We appreciate everybody joining us for this call. Obviously, an exciting quarter for us with strong operational performance, which is the key hallmark we believe, of Halozyme even as we integrated Antares. And so we look forward to providing additional updates in the next quarter, where we expect to continue this very strong momentum and success. Thank you all for your attention today. Bye-bye.