Good afternoon. My name is Melissa, and I will be your conference operator today. At this time, I would like to welcome everyone to Halazine's first quarter 2026 Financial and Operating Results Conference Call. Please note, this event is being recorded. I will now turn the call over to Tram Bui, Halazine's Vice President of Investor Relations and Corporate Communications. Please go ahead.

Thank you, Operator. Good afternoon and welcome to our first quarter 2026 Financial and Operating Results Conference Call. In addition to the press release issued today after the market closed, 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, Halazam's President and Chief Executive Officer, who will provide an update on our business, and David Ramsey, our Interim Chief Financial Officer, will review our financial results as well as our outlook. On today's call, we will be making forward-looking statements as outlined on slide two. I would also refer you to our SEC filings for a full list of risks and uncertainties. During the call, both GAAP and non-GAAP financial measures will be discussed. Certain non-GAAP or adjusted financial measures are reconciled with the comparable GAAP financial measures in our earnings press release and slide presentation. I will now turn the call over to Dr. Helen Torley, and we will start on slide three.

Thank you, Tom, and good afternoon, everyone. We started 2026 with exceptional momentum. The continued strong performance of our current approved products gives us strong conviction in the 2026 to 2028 financial guidance our recent new deal momentum and new nominations by partners accompanied by the expanding number of new phase one starts is bending the curve in the 2029 plus period and the business momentum is resulting in strong free cash flow we have clear priorities for capital allocation reinvesting at compelling returns to create new value and returning value to our shareholders today my presentation will address how our strategy will deliver durable value for investors during our current guidance period of 2026 to 2028 continue to compound value in the 2029 plus time frame and deploy robust free cash flow judiciously over the short and the long term i'll begin with our 2026 to 2028 time frame which is shown on slide four the key drivers of revenue in the 2026 to 2028 timeframe are our first 10 enhanced launch products which includes Starzlick Subcutaneous, Vibgarhead Trillo and Fesco. Our strong first quarter financial results reflect continued adoption of such ten historic delivery enabled by Enhance with royalty revenues driven by our commercial enhanced portfolio increasing 43% year-over-year to $241 million. Torber revenue for the quarter increased 42% year-over-year to $377 million, reflecting the strength of our commercial royalty portfolio. This revenue growth translated into adjusted EBITDA of $230 million and non-GAAP earnings per share of $1.60, representing a greater than 40% increase year-over-year. I'll move now to slide five. Based on these results, I am pleased to reaffirm our full year 2026 financial guidance and the 2026 to 2028 financial guidance. Two highlights I'll point out. For 2026, we continue to project enhanced royalties to exceed $1 billion for the first time, representing 30 to 35% growth over 2025. And during the 2026 to 2028 timeframe, we project our adjusted EBITDA margin will be greater than 65%, growing to approximately 70%. Moving now to slide 6. As you know, our business converts revenue to free cash flow very efficiently, which provides us with the capital to deliver durable, long-term value for our shareholders. During 2026 to 2028, we plan to deploy our capital predominantly in four key areas. Firstly, we will invest to maximize the value of our organic investments, predominantly to support partner success, with investments in Enhance, Hypercon, and CertFile. Secondly, we are pleased to announce a new $1 billion share buyback authorization, with an expectation of buying back at least $400 million of our shares in 2026. Over the next years, we project we will achieve a 3% annual share buyback yield. Our own equity is an asset we know best, and we're comfortable reinvesting against a compelling return plan. Thirdly, we plan to de-leverage further by retiring the 2027 and 2028 remaining notes at their maturity. And fourthly, we will continue to evaluate drug delivery M&A opportunities with a continued focus on identifying high demand, large-time drug delivery licensing technologies. I will say that based on our high bar and our assessment year-to-date, it is unlikely that we will identify a drug delivery opportunity that meets our criteria to transact on in 2026, and we do not foresee M&A outside of drug delivery. I'll move now to our second time frame, which is 2029+. Let me be very clear, we intend to bend the trend far more favourably beginning in 2029 than our sceptics fear. Let me explain why I believe this to be the case on Slide 7. Our revenue in and post-2029 will come from four key sources. The first driver is the continued performance and contribution from our 10 current enhanced launch products. The second driver is up to 13 new launches in the 2029 plus timeframe, arising from the current enhanced pipeline of 13 products that are projected within clinical development by the end of 2026. The third driver is the two Hypercon product launches in the 2030-31 timeframe. And the fourth driver is the next wave of launches that will result from partners progressing additional targets under already signed Hypercon and Enhance agreements and from new Hypercon and Enhance collaboration and licensing agreements. Turning now to slide eight, I'll say a few words on each of these significant revenue opportunities beginning with the first driver the current 10 enhanced products. As a reminder, all of our signed contracts have long durations. What you may not know is that the majority of the royalty revenue from these 10 products is still to come. Yet let me repeat that, the majority of the royalty revenue is still to come. Let me dimensionalise that comment. By the end of 2025, we estimate that our 10 approved products generated about 25% of their projected potential royalties. We estimate that we have about 66% of the additional projected royalty revenue still to come in the next six years between 2026 and 2032, with the remaining 9% in the years beyond that. In some industries, they call our 66% royalty revenue still to come in the next six years, with more after that, our contracted revenue backlog, which I'm sure sounds familiar to many of our shareholders. I'll move now to the second driver, the current enhanced pipeline products, with first launches projected in the 2029 plus timeframe. We project to have up to 13 additional enhanced partner products potentially approved in the 2029 plus timeframe. These have arisen from new collaboration and licensing agreements and from current partners nominating and adding additional targets. The new revenue from these projects and launches will add to and buoy our revenues. In the first quarter, I am pleased to report that two enhanced partners initiated Phase I studies of new targets, in alignment with our expectation for six new enhanced targets to initiate Phase I testing in 2026. This adds to the seven products that are already in development. Eugenics initiated a Phase I study with ARGX124, making this the fifth product in the Eugenics collaboration to advance to the clinic. And a second Enhanced Partner, who for competitive reasons does not wish us to provide detailed information, initiated and completed their Phase I testing in the quarter. In parallel, we continue to build the Enhanced Pipeline by supporting our current partners to identify and advance new targets to be nominated. These actions also add to this new wave of launches in the 2029-plus period. I am pleased that in the first quarter, Pfizer nominated a new, undisclosed, non-exclusive target to be studied with Enhanced, which will add to the already impressive 13 Enhanced Product Pipeline with the potential to launch in the 2029-plus time frame. I will now move to the third driver, HyperCon. We intend to make Hypercon the next and hands-like success story. To achieve this goal, we plan to invest in manufacturing capacity that will allow Halosline to offer end-to-end services to our Hypercon partners. We receive offering manufacturing from drug substance to commercial film finish for Hypercon products. As part of this plan, we are currently finalizing the clinical supply manufacturing as we ramp up our manufacturing efforts and we now predict that the first two Phase 1 clinical starts will occur in the first half of 2027. The launch timing for these two products continues to be 2030-2031. As I said in the past, we continue to see the opportunity for Hypercon to be at very large, achieving approximately $1 billion in royalty revenues by the mid-2030s. Turning now to slide 9, and our fourth 2029 plus driver, the next waves of launches that will result from partners progressing additional targets under already signed HyperCon and Enhance Agreements, and from new HyperCon and Enhance Collaboration and Licensing Agreements. Under our current Enhance and HyperCon agreement, there remain opportunities for partners to nominate additional targets. As an example, there are up to another 15 Hypercom targets available in already signed CLAs and tens of targets for enhanced. We are seeing heightened interest in expansion of targets consistent with the interest in new CLAs. Turning now to the new agreements, we are delighted to have signed three new collaboration and licensing agreements in 2026, already meeting our goal for 2026 to execute three new deals this year. and we are not stopping here let me say that we have line of sight to additional agreements in 2026 based on the status of our ongoing discussions we are delighted that with these agreements we receive upfront milestones and have the potential to earn milestones and up to the single digit royalties royalties being the most important recurring and the largest revenue stream for each product each of these deals includes one or more targets that represent multi-billion dollar total sales potential. We entered the new enhanced collaboration agreement with GSK for multiple promising oncology targets including with antibody drug conjugates. This collaboration with GSK expands our enhanced footprint with another global pharmaceutical leader and marks our first enhanced collaboration for antibody drug conjugates, extending our enhanced technology into one of the fastest growing and largest TAM areas of oncology. We believe enhanced is the potential to meaningfully improve the benefit-risk profile of these therapies by enabling subcutaneous administration and reducing the treatment burden for patients. We look forward to the initiation of the first clinical trial under this agreement. In early April we announced a new Hypercon collaboration with Vertex Pharmaceuticals, enabling the use of our hyperconcentration technology with up to three Vertex targets. Hypercon addresses real-world delivery challenges by reducing injection volume and enabling at-home or office-based low-volume administration. Vertix is a recognized leader in developing transformative medicines and this agreement demonstrates growing demand for next-generation delivery solutions that extend beyond enhanced. In May, we announced a second HyperCon collaboration and licensing agreement that's done with ARUCA for the use of HyperCon with ORTA-001 in development for psoriasis and related inflammatory diseases and for up to one additional target or a zero zero one recently presented base two data showing best-in-class efficacy making this an exciting future potential entrance into what is already a twenty to twenty five billion dollar global moderate to severe psoriasis market these collaborations further validate hypercon of the differentiated royalty bearing durable revenue duration technology that supports our expectation that Hypercon will drive a separate and additional royalty engine projected to achieve an estimated billion dollars in royalty revenue in the mid-2030s. To date Hypercon assigns CLAs with five companies for a total of 17 potential targets and we project to continue to add to this already impressive number of CLAs and potential targets for Hypercon just as we are building for Enhance and soon for Servbio to result in commercial product launches throughout the 2030s. I trust that you will agree that our four drivers of revenue strategy will deliver durable long-term value to our shareholders. Let me now provide some details on product progress, all reinforcing the durable growth story. Moving to slide 10. Our 10 launch products, including Jarzlik Subcutaneous, Vigrat Head Trulo and Fesco, continues to demonstrate strong revenue growth which will be further fueled by expanding indication approvals. Let me start with Darcelex which is the gold standard in multiple myeloma and remains Johnson & Johnson's number one product. In the first quarter of 2026 Darcelex generated approximately four billion dollars in global sales representing nearly 18% operational growth. This sustained double-digit growth is remarkable and a testament to the product and to J&J's development and commercial strategy. This strong performance translated into $129 million in royalty revenue for Halosan during the quarter, reflecting a 26% year-over-year increase and underscoring the strength and durability of this important product. As you notice from the higher royalty revenue growth rate achieved in the first quarter, the royalty rate step-up was achieved faster during the first quarter of 2026 than in prior For a patient with multiple myeloma, what the enhanced-enabled subcutaneous delivery of Darzolex has meant is a treatment time, which is reduced from multiple hours to just minutes, and a three-fold lower chance of experiencing a potentially life-threatening side effect called infusion-related reactions. Think of what this time back can mean to a patient who is fighting cancer. Additional growth is projected to come from new indications. In the first quarter, the FDA approved Darzlix FastPro in its fifth frontline approval, and also approved Pick Valley Plus Darzlix FastPro for as early as second-line treatment for patients with relapsed or refractory multiple myeloma. I'll turn now to Argenix's VivGart Hurtrulo with Enhance. In the first quarter of 2026, VivGart generated approximately $1.3 billion in global sales, representing nearly 63% growth. Vivgarth-Hertrillo continues to be a growing and meaningful contributor to the royalty revenue during the quarter, increasing 119% to $46.3 million, resulting from growing demand and uptake. The introduction of the prefilled syringe for Vivgarth-Hertrillo with Enhance has proven an acceleration in subcutaneous uptake, reflected by the subcutaneous growth outstripping total growth through its strong profile to reduce the administration burden and increase flexibility for patients with generalized myosinogravis and CIDP, allowing work and travel where this may not have been possible before. In CIDP, which remains earlier in its launch, Organix continues to see steady progress supported by increasing prescriber familiarity, expanding pair coverage, and the convenience of the subcutaneous formulation. Looking ahead, in addition to continued penetration and adoption of the two currently approved subcutaneous indications, we see meaningful growth opportunities driven by label expansions in myasthenia gravis. Last Friday, Argenix announced that ViveGuard and ViveGuard-Hitrudo received FDA approval as the first and only treatment approved for all serotypes of adult patients with generalized Myasthenia Gravis. Argenix has also reported positive phase three data in ocular Myasthenia Gravis, estimated by Argenix to affect approximately 7,000 patients in the US alone. These populations, when both approved, would double the potential addressable Myasthenia Gravis patient rates from launch, doubling the halogen opportunity too. Moving out of Fesco, Roche reported that Fesco continues to deliver strong growth, increasing 27% year-over-year to 686 million Swiss francs, or approximately 877 million U.S. dollars. This performance generated $30.2 million in royalty revenue for Halogen, representing 25% year-over-year growth. The small difference between reported sales and Halogen royalties was a result of currency. Roche reiterated its expectation to reach at least 60% conversion and emphasized that Fesco is expected to maintain a strong and durable revenue tail. I'll move now to slide 11 and highlight how the growth of the more recently launched partner products, with the continued growth of DARSLEX, FASPRO, BIPART, Hydril and Fesco, will deliver strong revenues in 2029 plus we have four recently launched products with subcutaneous formulations of Ocrevus, of Devo, Decentric and Ribrovan within hand. Each of these products represents a significant blockbuster opportunity for subcutaneous use, collectively addressing an estimated $30 billion total IV and subcu market opportunity in 2028 based on the analyst's estimates. I'll share two recent highlights, one for Ocrevus Zinopo and one for Ribrovan subcu, which have been reported by our partners, which underscored the continued momentum across this portfolio. For Ocrevus de novo, Roche highlighted strong and accelerated an update of the enhanced enabled subcutaneous formulations, which continues to meaningfully expand access to Ocrevus across multiple sclerosis care settings. Roche reported that there are now approximately 24,000 patients globally receiving subcutaneous Ocrevus, representing an increase of roughly 7,000 patients versus the prior quarter, an acceleration relative to the fourth quarter trend. Of note, Roche emphasized that approximately 60% of U.S. Ocrevus Zenovo starts are now coming from community practices, and around half of the new subcutaneous Ocrevus patients are naive to brand. This underscores Zenovo's ability to expand the addressable market by reducing infusion burden and enabling treatment outside of the traditional infusion centers. Roche reiterated its peak brand sales expectation of 9 billion Swiss francs by 2029, which includes a brand expansion of approximately 2 billion Swiss francs of sales as a result of additional new opportunity created by the easier-to-use subcutaneous formulation. Let me now highlight the new momentum with Ryprovan, which has been driven by the launch of the Enhanced SC formulation. In the first quarter, Johnson & Johnson reported sales of $257 million for RibroVan plus LeCouze, representing an 80% year-over-year growth, which has been driven by launch uptake and share gains across regions. Increasing contribution from RibroVan FASPRO with subcutaneous formulation within hands is supporting adoption and helping reinforce RibroVan's positioning as a new standard of care in EJFR mutated non-small cell lung cancer. Looking ahead, J&J has identified Rabravan as an important longer-term growth driver with their projection that this will be a $5 billion brand. A move now to slide 12. In closing my section, I want to make several important comments. Firstly, today we announced a new $1 billion share repurchase program signaling our confidence and conviction in our business secondly we're pleased to reaffirm our school year 2026 guidance and reiterate our 2026 to 2028 financial guidance and thirdly we have four drivers of revenue growth in the 2029 plus time period the continued performance of our 10 approved enhanced products a pipeline by the end of 2026 of 13 additional enhanced products with potential for launches beginning in 2029, two HyperCon launches projected in the 2030-2031 timeframe, and multiple additional launches that will arise from new nominations that are currently signed to contracts and from new collaboration and licensing agreements. By owning a share of Halosan, you're owning a broad swath of the biopharma industry. Let me now introduce you to David Ramsey and welcome him back as our Interim Chief Financial Officer. David's deep knowledge of Halosyne, strong capital markets, and investor expertise has enabled a seamless transition and immediate impact. David?

Thank you, Helen. Let me start by saying how excited I am to be back at Halosyne and to step into this role as such a strong point in the company's evolution. I was pleasantly surprised to learn about our deal pipeline and how we are still in the early stages of realizing the full potential of our enhanced royalties. HaloZine is operating from a position of strength, and my focus is on maintaining the disciplined framework and execution already in place, supporting our partners, investing in our core business, and working to ensure the long-term growth and durability of our royalty businesses. We delivered a strong start to the year, with results consistent with expectations and robust year-over-year royalty growth. Adjusted ETHDA grew meaningfully, even as we continue to invest in HyperCon and ServeBio, which is a clear demonstration of the opportunity we have to invest in our core businesses while maintaining the operating leverage inherent in our high-margin, royalty-driven business model. Let me now turn to our detailed first quarter results on slide 13. Revenue increased approximately 42% to $376.7 million, compared to $264.9 million in the prior year period. This performance was driven by broad-based strength across the business, including strong growth in royalty revenue and higher product sales to partners. Royalty revenue of $240.7 million increased approximately 43% from $168.2 million in the prior year period, reflecting the continued commercial success of key enhanced partner products, including subcutaneous Darzelex, Bodgar Hytrulo, and Fesco, as well as the continued ramp from recently launched SC Therapies, Ocrevus, Opdivo, Dicentric, and Ryderbath. Research and development expenses were $25.6 million compared to $14.8 million in the prior year period as we integrate our HyperCon and ServBio acquisitions. Selling, general, and administrative expenses were $57.9 million in the quarter compared to $42.4 million in the prior year period. Adjusted EBITDA increased 42% to $229.5 million from $162 million in the prior year period, driven by continued strong royalty growth gap diluted earnings per share was a dollar 22 compared to 93 cents in the prior year period and non-gap diluted earnings per share was a dollar 60 compared to a dollar 11 in the first quarter of 2025 we ended the quarter with net leverage of approximately 2.5 times reflecting the acquisitions of hypercon and surf bio following our announced plan to buy back at least 400 million dollars in shares this year we We project our net leverage will be approximately 1.2 times by the end of 2026, supported by our strong cash generation. Turning to our 2026 outlook, as Helen briefly touched upon, we are reiterating the strong financial guidance the company provided earlier this year. As shown on slide 14, we continue to expect total revenue of $1.71 billion to $1.81 billion, representing year-over-year growth of 22 to 30 percent, driven by royalty revenues and product sales from API. Royalty revenues of $1.13 billion to $1.17 billion, representing year-over-year growth of 30% to 35%. We continue to expect Dargalix SC, Vodgart Hytrulo, and Fezgo to drive these strong expectations, with a growing contribution from recently launched enhanced products. We expect adjusted EBITDA of between $1.125 billion and $1.205 billion, which includes approximately $50 million of planned investment in HyperCon and ServeBio, and non-GAAP diluted EPS of $7.75 to $8.25, which does not assume the impact of any potential future share repurchases. I am pleased with the continuing strength of our business as reflected in our strong first quarter performance and the team's execution.

We are still in the early stages of realizing the value from our enhanced business, and we are investing in HyperCon and ServeBio to drive the next blockbuster royalty business. our business model positions us well to sustain long-term value creation and I look forward to contributing to that progress with that I'll turn the call back to Helen thank you David in conclusion let me just close by reiterating what makes Halo Bank such a compelling investment we demonstrate our conviction today with our new 1 billion dollars to repurchase program they continue strong performance of our current approved product and the increasing number of indications gives us strong confidence in the 2026 to 2028 financial guidance and we plan to stand skeptics and bend the curve in the 2029 plus period building on top of the durable substantial revenue of our 10 approved products where we have realized only 25% of the revenue to date and project to receive 66% of the total projected royalties between 2026 and 2032. That's a 2.5 times still to come. On top of this strong base of revenue, our four drivers of revenue, the continued contribution of our currently launched 10 products, the potential launches of up to 13 additional enhanced products beginning in 2029, the two projected Hypergon launches in 2030 and 31, and the additional launches arising from currently signed agreement new nominations and new sales for an enhanced Hypergon and SERP BIOS all add long-term durable revenue streams. The business momentum is resulting in strong free cash flow. I'm sure that we have clear priorities for disciplined capital allocation and we're deploying this to create new value and return value to our shareholders. Thank you very much for your attention today and operator you can now open the line for questions.

We will now begin the question and answer session if you would like to ask a question please press star one to raise your hand to withdraw your question press star one again we ask that you pick up your handset when asking a question to allow for optimum sound quality if you are muted locally please remember to unmute your device please stand by while we compile the Q&A roster your first question comes from the line of Jason Butler with Citizens J&P. Your line is now open. Please go ahead.

Hey, thanks for taking the questions and congrats on the quarter. First one, when you think about the 2029 and after enhanced product profile, what do you expect to be the biggest products in that portfolio? And then when are they coming to essentially peak in your model? And then secondly, the HyperCon transactions or discussions that are ongoing today, including the transactions you announced, how many of those conversations were ongoing before you acquired the company, and how many new conversations are you having or relationships that you're bringing to the conversation?

Yeah, thanks so much, Jason. Yeah, we're very excited today to share additional color, What gives us so much conviction on the trajectory we're going to have post-2029? I think what we shared was, and I think it was probably a surprise to many of our investors, that we still have 66% of the revenue from our currently 10 launch products coming between 2026 and 2032. There are multiple large contributors within that, Jason. We haven't broken it down on an individual basis, but when you think about products like like Ocrevus, like Rybravant, like ViveGuard, I mean really I can name multiple ones like Tarzilex of course, we are continuing to expect to see substantial revenues from each and every one of those contributing. And that's not to talk about the additional launches we're going to start seeing from the current enhanced pipeline, so a very bright future for sure. Turning now to HyperCon, in terms of the discussions, I would say one was ongoing before. one was new and the company does continue in discussion with multiple other groups, including some early feasibility testing, which is a step before the companies will sometimes make a decision to move to a CLA. It doesn't always work that, some go straight to CLA, but also there's some additional targets that are now in development testing, so to find the formulation before going into clinical. And so, I can say there's been really remarkable progress since the acquisition, both from targets and collaborations that are already underway, as well as this broadening of interest, which is just part of a secular trend I've talked a lot about. SC and SC delivery at home is really the target product profile now for so many disease conditions.

Great, thank you.

Your next call comes from the line of Brendan Smith with P.D. Cowan. Your line is now open. Please go ahead.

Great. Thanks for taking the questions, and congrats for the quarterbacks. Maybe just first, for the two Phase I clinical starts with HyperCon app that's, I think, now going to be in first half of next year, can you help us understand, I guess, what's left to finish up there on Hales on 5 from just a manufacturing standpoint and get those ready to go? And can you just maybe confirm that timing to hear what those two programs are will still be whenever they start that Phase I?

Yes, thank you, Brandon. Yes, I would say that that is most likely from a partner perspective that they will be comfortable revealing what those targets are when they have to post them on clinicaltrials.gov, so very close to when the Phase I clinical study starts. With regard to what's still to be done, we are really working on the clinical manufacturing at this point in time. As you heard in my preferred remarks, we are investing in the manufacturing capacity that's going to be able to allow Halozyme to provide the end-to-end service to our Hypercom partners and become an invaluable partner for everybody, just as we do today. And so, you will see us continuing with that investment, finishing off the clinical supply manufacturing, and that is exactly what will enable these phase one starts in the first half of 2027.

And then just maybe quickly, I wanted to make sure I didn't miss it, but the competition about 13 additional launches in 2029 plus um i guess can you get a sense over what time frame you might expect those to kind of launch that you know fully appreciate subject to change but is it like 13 between 2029 and 2032 or 2035 or just kind of helping help us to kind of contextualize that 13 number again yes i think a futuristic to use brendan is that it is taken between four and five years for enhanced products to get to approval for when they enter phase one clinical testing and so as we're looking towards the end of 2026 for the full 13 to be in development

i'd be looking towards the 2031 32 for the latest of these with it beginning in 29th and occurring over that 29 to 32 time frame got it great thanks thanks your next question comes from the line of Mohit Bansal with Wells Fargo.

Your line is now open. Please go ahead.

Thank you very much for taking my question, and congrats on all the deal-making progress here. So, Helen, one question I have is, and this is a question you get a lot from investors, is that how comfortable are we with the scalability of the HyperCon technology, given that such a unique technology and ElectroFi did not, enter into the clinics with that technology you are you are taking it forward so wondering how what what was you have done to help understand the the scalability and what your know-how with enhanced capabilities could actually be useful in terms of making it more scalable for the commercial for the clinical as well as commercial use thank you yeah thanks Moethe and um you know

thanks for the comments on the deal making. As you're seeing, our organic opportunities really are so attractive and we can deliver such value to our shareholders that we are very focused in resourcing them fully and that does include our plan to invest in manufacturing capacity. So we offer an end-to-end service from the making of the drug substance to commercial fill and finish. Hypercoin got off to a very good start of this by collaborating with a strong CDMO called Thermo Fisher Paceon and they are the ones who did the engineering batches and are working to be able to complete the clinical batches in the first half of 2027 and so we are obviously very engaged working with the Hypercon experts on the full plan now to take this into clinical and then into commercial manufacturing so I'm feeling good about the progress that we're making Mojit, but we are at the clinical stage now, and that's why we're excited to invest and select the CDMOs who are going to take us to the next level, expanding now into commercial manufacturing, too.

Your next question comes from the line of Dave Reisinger with Leerink Partners. Your line is now open. Please go ahead.

Yes, thanks very much, and congrats, Helen, to you and your team on all the great fundamental momentum in the business and new contract signings. So I have a few questions. First, could you just help us understand a few of the financial items for 2026? So what milestones are in guidance for the year and what milestones are not in guidance? because you signed some recent deals, but you didn't update your revenue guidance. And then next, a similar question for EPS guidance. When you gave the EPS guidance in February, what amount of buyback was reflected in that guidance and how much of the $400 million that you disclosed today for 2026 is in the unchanged EPS guidance for the year. So I guess those are the financial questions. And then with respect to HyperCon versus SurfBio, I think it would be helpful if you just compare and contrast the manufacturing scale-up for both. Obviously, you're getting questions on the HyperCon scale-up, But if you could compare and contrast them, I think that would be helpful. Thank you.

All right, David. Thank you so much. If we begin with how much of the milestone revenue was included in this year's guidance, we always face some partner communications. We'll put whatever phase one, phase three, or any commercial milestones that are projected for the year. So all of those that we anticipated were included. If you recall, at the end of last year, I also said that based on the three deals we signed in December, I was very confident in signing multiple additional new deals in 2026. And so we did have a very nice number in our 2026 guidance for new milestones coming from new collaborations. And so we put that in because we obviously wanted our guidance to reflect our true view of how the year was going to perform. So, we have included all of the predictable milestones for the year, including a certain amount of money for new deal milestones at this time. Just to summarize the buyback impact on our EPS guidance.

Yeah, hi, David. So, you know, in our earlier guidance this year, obviously, we did not make any assumptions for levels of buyback. and also today in the guidance that we are reiterating, it does not include any potential impact from the share repurchases that we will do this year. So we'll update that as the year progresses, obviously.

Yeah, thank you, David. And then the third question just is, what are the differences in the manufacturer between HyperCon and SurfBio? First difference would be, SurfBio is 18 to 24 months earlier in development than HyperCon, so we are working very hard at the moment in advancing our non-clinical existing qualification, beginning to plan for our GMP manufacturing, and our spray-dry readiness. Now, in terms of the types of manufacturing, both are novel processes. The CERF Bio relies on spray-drying, which is actually a very commonly used type of manufacturing, And for HyperCon, it is a novel process that relies on dehydration to result in innovative microparticles that can then be injected with the help of being in a solvent. And so different processes, different stages of development, but we're very excited particularly seeing the degree of interest we're getting from potential partners for the hyperconcentration technologies to have made substantial progress on Servbio as well as Hypercon in the quarter and we look forward to providing further updates throughout the year as we're advancing both of these innovative hyperconcentration technologies.

Thank you.

Your next question comes from the line of Sean Laman with Morgan Stanley. Your line is now open. Please go ahead.

Good afternoon, Helen and team. Hope everyone's well. Now, Helen, on the 13 enhanced products due for launch a bit later, you know, what royalty rates can we expect or, you know, even just to ballpark and just to walk us through the IP position at that point would be super helpful. And then any comment that you can provide us on, you know, competing hyaluronidase, you know, technologies out there, you know, REES, Sanofi, and Dupixen. Thanks, Helen.

Let me start with the 13 products that have the potential to be launching in 2029 plus. If you recall with our contracts, we have historically been in the mid-single-digit range and I'm very pleased to say that for the current contract, we also are in that potential for a mid-single-digit royalty with some of the newer contracts starting at a single-digit royalty but escalating with increasing sales into that mid-single-digit royalty. So, we still feel very great about the strength of the royalties with these multiple new royalty streams, all of which have the potential to be getting into that mid-single-digit royalty place. With regard to IP at that point, for all of these products, they will retain the potential to be able to get co-formulation IP. The base composition of matter patents will expire in 2029 in the US and in Europe. However, the power of our business model that is sometimes underestimated is the power of getting co-formulation patents. And the reason that is so important is in the majority of our contract, that will extend our royalty term from what is common in all of our contracts to be a minimum of 10 years to additional years up to and including for the full royalty term of the co-form patent, which is 20 years from filing. So think of these co-form patents as keeping our royalties progressing for many years after that initial 10 years in a number of cases and accompanying that in a number of these cases, the royalties can also be maintained at the original royalty rate. And so the IP position in summary, Sean, it is strong. It's strong because of our unique co-formulation patent business model leading to that revenue durability and in many cases maintaining the royalty rate at the original level. With regard to complementary hyaluronidases and specifically asking about Sanofi, we really can't comment we're not 100% aware of exactly what Sanofi is doing with regard to a complementary hyaluronidase. I can say in general that for all of the partners who are companies who have chosen to work with Altagene as an example. They have come to us first. We have got an exclusive license already in place unfortunately that precludes us from being able to work with them. And you might say, you know, why do all these companies still come to Halosyne first? It is because of our, we are the gold standard and Hans has got now more than 1.3 million patients treated. And very importantly, our expertise is so acknowledged now in the community in terms of our understanding how to get partners into the clinic quickly and through development quickly because of all the expertise that we have gained. And so we continue to expect to, as we've demonstrated so ably in the last five months or so with the signing of four new enhanced deals, continue to expect more enhanced deals this year just based on the strong interest and our leadership position in the space.

Your next question comes from the line of Corrine Johnson with Goldman Sachs. Your line is now open. Please go ahead.

Thanks, and good afternoon. Maybe you could just kind of spend some time walking us through the development timelines after you get into Phase 1 with HyperCon, I guess early next year now, and sort of how do you kind of get to the potential approval then in a three- to four-year timeline from there?

Yes, thanks, Corinne. I have the expectation that because many of our partners are considering an already sub-Q drug, moving to a lower volume sub-Q drug, that the pathway will be based on comparability of the PK between the two sub-Q formulations, and I'll start with that, as that is a very common approach that partners are using. We are seeing that with our enhanced experience with recent examples, The FDA expectations for the endpoints of those studies, as well as the duration and size of those studies, is shrinking. And that, I think, is in part largely due to the comfort level with the great safety database that now is available for Enhance. And it is really that a direct experience we have from Enhance as to how studies are being done now to make them go faster and have less patient exposure, Corinne, is what gives us a lot of confidence in the three to four years. And that's where they're informed with some early conversations that partners are having with the FDA who seem to be very much in support with that type of thinking.

Very interesting. Early success in terms of getting new partnerships for hyper-conditioning. Can you just kind of talk about where you're or what's resonating as you bring that profile to potential partners?

Yeah, you know, we talked about this when we did the acquisition. Companies have an idea in their head of what they think is going to be the most competitive target product profile for their product. If they are coming into an area, as an example, like psoriasis, they recognize that extended dosing is just the norm now. And to be competitive, they're going to have to get extended dosing. Now, there might be, and I will also add, that extended dosing ideally should be able to be delivered by the patient themselves because that's where the standard of care And so, because companies have that mindset and know what is going to be the most competitive profile, that is what is bringing them to us and I've always said it's areas like inflammation and immunology, nephrology, cardiovascular, the areas where there's a lot of patient freedom, a lot of desire by the patients to be able to treat themselves, we are a terrific fit for that because we're able to hyperconcentrate many antibodies down into this 2ml, allowing it to be given by a simple off-the-shelf auto-injector. And so we're just a great fit, a perfect fit actually, with Hypergon and Surfbio for where the market is going for those types of conditions so that the products can be competitive and so that the companies can meet the patient expectations for care.

Thanks. Your next question comes from the line of Jessica Fai with J.P. Morgan. Your line is now open. Please go ahead.

Hey guys, good afternoon. Thanks so much for taking my questions. I had a few more on HyperCon. So you mentioned that some companies conduct early feasibility testing prior to signing HyperCon deals. Can you say whether Vertex or Aruka, who you recently signed deals with, did they conduct any early feasibility testing? The second, as HyperCon deals roll in, how do we think about the timelines from when a HyperCon deal is announced to when the product with that partner could enter the clinic? And then last one, I'm just curious on how you think about like how big a deal or like how big a de-risking event would you view IND clearance for a HyperCon product? relative to, say, Phase 1 data. Thank you.

Thanks, Jess, for that. You know, we aren't able to go into more detail on the individual collaborations and whether or not they did feasibility testing. That would be considered their partner confidential, so can't talk about that. I would say, though, the trend that we have now is the partners are going straight into the agreement based on the data that they are seeing and their confidence in moving forward. So, as you might expect with the maturing of the technology, that's a very nice trend that we are certainly seeing. In terms of the timing from when the HackerCon deal is announced to being in the clinic, you know, that is something that is going to get shorter and shorter as we, again, have been evolving the technology, developing the technology and so it's a little premature for me to give a specific number of months at the moment but know that that is something that is going to be a big focus for us to be able to rapidly support partners in getting into the clinic in a matter of months. Just the process that is evolving from when we did the acquisition just a couple of quarters ago. So, you know, I'm looking forward to the phase one data. We've got some of the pre-clinical data that obviously gave us a lot of confidence and conviction in the acquisition. But I would say that the phase one data is what I'm excited to see for each of these new partners.

Thank you.

As a reminder, if you would like to ask a question, please press star one to raise your hand. Your next question comes from the line of Ahmed Mahmood with H.C. Wainwright. Your line is now open. Please go ahead.

Hi, this is Ahmed. I'm on for Mitchell Kapoor at H.C. Thank you for taking the question. I was wondering, as Hale continues to have partnerships and accumulate additional approvals, validating the enhanced platform, has the economics of the new licensing deals evolved? Are you seeing more leverage? Should we expect a trend toward the higher end of the single-digit range?

You know, let me talk about the Hypercom types of deals, which obviously is an exciting new technology. The deal terms have been very consistent across what are now five agreements, which cover up to 17 targets. Those are upfront milestones, milestones for progress and development and with sales and mid-single-digit royalties and that has been very consistent, very reminiscent of Enhance as we were establishing that technology and obviously what is resulting in the very attractive performance we have today at HaloZime. For Enhance, we see a different trend with exclusive and non-exclusive agreements just There's a little bit of a range as it relates to that that gives different numbers for the peak milestones and also the royalty rates. But as I mentioned earlier, in all of our enhanced agreements as well, we see the potential based on escalating sales to get to the mid-single-digit royalty in each of those as well.

While we recompile the Q&A roster. Your next question comes from the line of Michael DeFior with Evercore ICI, ISI. Your line is now open. Please go ahead.

Hi, guys. Thanks so much for taking my question and congrats on all the continued progress. Two questions for me regarding your antibody drug conjugate. Your ADC-IP names a broad set of specific drugs, it seems, from across pharma pipelines. is that package itself driving partner engagement or are the discussions still largely target specific? And my follow-up is, you know, regarding nucleic acids. I mean, you mentioned ADCs in detail, but in terms of nucleic acids, is partner interest there at a similar stage or is just ADC the more advanced near-term modality? Thank you.

Yeah, thanks, Mike. With regard to the ADCs, I would say that we are engaged with several farm and biotech companies and it is based on a specific set of products they have in development or have commercialized. So it's very much on a company by company, brand by brand basis. What's striking the interest is the potential to optimize the target product profile to get an improved benefit risk profile and obviously we have files or a number of patents which of course is covered in the discussions with the partners as well. But it really is this ideal to get the optimal profile that is driving this on a product by product basis. The nucleic acid discussions are actually occurring in parallel. Again, we have generated compelling non-clinical data that is being discussed across several companies at this point in time and I look forward to those progressing and sometime in the next months and quarters being able to announce a deal there as well.

ADC has got out of the gate faster but that doesn't mean to say that nucleic acids aren't coming at some time in the next quarters too. we have reached the end of the Q&A session this concludes today's call thank you for attending you may now disconnect