On this page of StockholderLetter.com we present the latest annual shareholder letter from HALOZYME THERAPEUTICS, INC. — ticker symbol HALO. Reading current and past HALO letters to shareholders can bring important insights into the investment thesis.

 •  3/15/2024 Letter Continued (Full PDF)
 •  3/24/2023 HALO Stockholder Letter
 •  More "Biotechnology" Category Stockholder Letters
 •  HALO Benford's Law Stock Score = 100

HALO Shareholder/Stockholder Letter Transcript:

2023
Annual Report

We are proud of the many milestones and
accomplishments that we achieved as an
organization and with our partners throughout
the year. These accomplishments supported
another year of record growth while also serving
as a strong foundation for our future growth.
lives touched
by ENHANZE
800,000 patient

> 40 million devices supplied
Dear Fellow
Shareholders:
partner commercial products
7 in up to100 global markets
As I re   ect on the achievements of the past
year, I am proud of the growth and progress
accomplished during 2023.
It has been a year of many successes and
signi   cant impact as we made progress with
our commitment to advance new solutions
for patients.
At the heart of our vision is an unyielding
dedication to the patients we serve. Today,
many breakthrough therapies require the
patient   s life to    t the treatment. Our vision is
that breakthrough treatments    t the patient   s
life.
Each member of our team is driven by a
shared mission to alleviate the burden of
treatment and enhance outcomes for those
battling illnesses.
In 2023, our reach expanded signi   cantly. Our
ENHANZE   drug delivery technology has now
touched the lives of over 800,000 patients
across more than 100 global markets. And our
auto-injector technology has been used in
more than 40 million devices.

In 2023, we increased the total number of
ENHANZE   commercial partner products from 5 to
7, with the approval of argenx   s VYVGART   Hytrulo
for generalized myasthenia gravis in the U.S. and
EU and the approval of Roche   s Tecentriq SC in
Great Britain for multiple cancer types.

We had multiple, positive phase 3 data readouts,
supporting regulatory submissions for approval of
the ENHANZE   subcutaneous (SC) formulations
for argenx   s VYVGART   Hytrulo for chronic
in   ammatory demyelinating polyneuropathy
(CIDP), Roche   s ocrelizumab SC for multiple
sclerosis and Bristol Myers Squibb   s nivolumab SC
for cancer.

We added a new ENHANZE   partner, Acumen
Pharmaceuticals, for the potential use of
ENHANZE   for ACU193, Acumen   s clinical stage
monoclonal antibody candidate to target
Amyloid-         Oligomers for the treatment of early
Alzheimer   s disease.

We achieved an important milestone for our
new high-volume auto-injector, successfully
demonstrating the feasibility of administering
a subcutaneous injection of 10 mLs of a
representative biologic, immunoglobulin 10% with
ENHANZE  , in approximately 30 seconds using our
high volume auto-injector.


In our proprietary commercial portfolio, XYOSTED  ,
the    rst and only weekly auto-injector for subcutaneous (SC) delivery of testosterone replacement
therapy, achieved $100 million in sales in 2023.
Based on this exciting progress, we project to grow the
number of new product launches of products delivered
subcutaneously with ENHANZE   from 7 exiting 2023 to 10
by end of 2025, with potential launches of ocrelizumab
SC in 2024 and nivolumab SC and amivantamab SC in
2025.
We also advanced our broad ENHANZE   development
pipeline in 2023, which can add additional new royalty
revenue opportunity beginning as early as 2027.
ROBUST CAPITAL ALLOCATION
STRATEGY
As we continue to generate signi   cant cash, we maintain a three-pillar capital allocation strategy with a
focus on driving growth and value for shareholders. This
strategy is comprised of three core objectives:

Invest to maximize revenue growth and durability.
We continue to invest in ENHANZE   and auto-injector
innovation to maximize revenue growth and durability.

Return capital to shareholders. In 2023, we deployed $400 million to shareholders through share
repurchases and have returned a total of $1.3 billion to shareholders in share buybacks over the past
   ve years. We are excited to share that we have
Board approval for a new $750 million program that
was announced in February 2024 and re   ects our
con   dence in the sustained and durable growth of
the company.

Identify opportunities for external growth. We consistently evaluate opportunities to accelerate and
extend revenue.
We currently have seven Wave 4 products in development, of which two products are in phase 3, and one
product is in phase 2.

Bristol Myers Squibb   s nivolumab plus relatlimab for
melanoma continues to advance in phase 3 development.

We are pleased that Takeda   s TAK-881 for primary
immune de   ciency advanced into phase 3.

In addition, ViiV initiated a phase 2 study for N6LS
for an HIV treatment.
STRONG FINANCIAL GROWTH AND OUTLOOK
We continued our strong growth trajectory in 2023, delivering a 26% year-over-year increase in total revenue to $829
million, and reaching a record $448 million in royalty revenue, which represents a 24% year-over-year increase. We
reported adjusted EBITDA of $426 million and non-GAAP diluted earnings per share reached $2.77.
As we look ahead to 2024, we are poised for another record year, driven by the momentum of our recent successes.
We recently reiterated our 2024    nancial guidance for total revenue of $915 million to $985 million, representing yearover-year growth of 10% to 19%, adjusted EBITDA of $535 million to $585 million, representing year-over-year growth
of 26% to 37% and non-GAAP diluted earnings per share of $3.55 to $3.90, representing year-over-year growth of 28%
to 41%.
We were also delighted to recently share our longer-term guidance that projects total revenue hitting more than
$1.5 billion in 2027 and royalty revenue reaching approximately $1 billion in 2027 and 2028.
Revenue Projections
$915M - $985M
$1,565M - $1,690M
Total
$829M
Total
$448M
$829M
10%-19%
YoY
12%-17%
YoY
Total
Total
+14%
CAGR
+18%
CAGR
$500M-$525M
Royalty
Royalty
Revenue 2023-2024
$448M
$1,000M$1,050M
Royalty
Royalty
Revenue 2023-2028
CAGR calculated from 2023 actual to 2028 midpoint

FOCUS ON CONTINUOUS IMPROVEMENT
At Halozyme, we believe operating responsibly and efficiently is vital to creating long-term value for our company
and stakeholders. In early 2023, we launched a new continuous improvement initiative, engaging every employee in
bringing forth new ideas to increase our operating effectiveness and efficiency.
Our stakeholders are considered in every aspect of our business. We are focused on delivering on the key metrics
and goals we established to advance our strategy. As part of this focus, we continue to evolve and strengthen our
Environmental, Social and Governance (ESG) program as well as executing our commitment to transparency. Notable ESG highlights from 2023 include:

Supporting employees    continuous growth and development through dedicated learning time and an extensive
in-person and online curriculum.

Serving our various communities, including hosting our inaugural Dedicated Service Time bene   ting organizations
such as Boys and Girls Club, Habitat for Humanity, Ronald McDonald House and Bikes for Goodness Sakes. In
addition, we supported St. Jude Children   s Research Hospital at the enterprise-level.

Demonstrating our commitment to governance and board refreshment, we welcomed Barbara Duncan to the
board and, after 8 years of strong service, thanked Jim Daly for his many contributions.
As a testament to our commitment to sustainability, in 2023 we were named by Barron   s as one of the 100 Most Sustainable Companies. We were also recently named as one of America   s Greenest Companies by Newsweek.
As we lead the way in drug delivery innovation, I am immensely proud of the strides we have made and the impact
we have had on patients    lives. We are excited to build upon our progress, driving value creation for all our stakeholders.
Thank you for your ongoing support and partnership as we continue this journey together.
Best Regards,
Helen Torley
Forward Looking Statements: Statements set forth in this letter to shareholders include forward-looking statements including,
without limitation, statements concerning the Company   s expected future    nancial performance (including the Company   s 2024    nancial guidance and long-term revenue projections), plans to repurchase shares under its share repurchase
program and to potentially expand the Company   s platform through acquisitions, expectations concerning the Company   s
and its partners    development programs and potential approvals and commercial launches of partnered products. These
forward-looking statements are typically, but not always, identi   ed through use of the words    believe,       enable,       may,   
   will,       could,       intends,       estimate,       anticipate,       plan,       predict,       probable,       potential,       possible,       should,       continue,    and other words of similar meaning and involve risk and uncertainties that could cause actual results to differ materially
from those in the forward-looking statements. Actual results could differ materially from the expectations contained in these
forward-looking statements as a result of several factors, including unexpected levels of revenues, expenditures and costs,
unexpected delays in the execution of the Company   s share repurchase program or platform expansion, unexpected
results or delays in the development, regulatory review or commercialization of the Company   s partnered or proprietary
products. These and other factors that may result in differences are discussed in greater detail in the Company   s most
recently    led Annual Report on Form 10-K    led with the Securities and Exchange Commission. The Company undertakes no
obligation to update or revise any forward-looking statements or any other information contained herein.
Note: This letter to shareholders contains product names, trademarks and registered trademarks that are the property of
their respective owners.

Note Regarding Use Non-GAAP Financial Measures: In addition to disclosing    nancial measures prepared in accordance with U.S. generally
accepted accounting principles (GAAP), this letter to shareholders contains certain non-GAAP    nancial measures. The Company reports
EBITDA, Adjusted EBITDA and non-GAAP diluted earnings per share and expectations of those measures in addition to, and not as a substitute
for, or superior to,    nancial measures calculated in accordance with GAAP. The Company uses Non-GAAP    nancial information in assessing
what it believes is a meaningful and comparable set of    nancial performance measures to evaluate operating trends, as well as in establishing portions of our performance-based incentive compensation programs. Reconciliations between GAAP and non-GAAP    nancial measures
are included in this letter to shareholders. The Company does not provide reconciliations for forward-looking adjusted measures to GAAP due
to the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliation, including adjustments that
could be made for changes in contingent liabilities, share based compensation expense and the effects of any discrete income tax items.
GAAP to Non-GAAP Reconciliation: EBITDA and Adjusted EBITDA
($ in thousands)
1.
Amount relates to fair value gain on contingent liability due to the due
to the termination of the TLANDO license agreement in September
2023 (   TLANDO Termination   ).
2.
Amount relates to inventory write-off due to TLANDO Termination and
amortization of the inventory step-up associated with purchase accounting for the prior year Antares acquisition.
3.
Amounts represent incremental costs including legal fees, accounting
fees and advisory fees incurred for the prior year Antares acquisition.
4.
Amount represents severance cost and acceleration of unvested equity awards as part of the Antares merger agreement.
1.
Amount represents incremental costs including legal fees, accounting
fees and advisory fees incurred for the prior year Antares acquisition.
2.
Amount represents severance cost and acceleration of unvested equity awards as part of the Antares merger agreement.
3.
Amounts relate to amortization of the inventory step-up associated with
purchase accounting for the Antares acquisition.
4.
Amount represents a realized loss from the sale of our marketable securities to    nance the prior year acquisition of Antares.
5.
Amounts relate to a fair value gain on contingent liability, inventory
write-off and impairment of TLANDO product rights intangible assets due
to the TLANDO Termination.
6.
Adjustments relate to taxes for the reconciling items, as well as excess
bene   ts or tax de   ciencies from stock-based compensation, and the
quarterly impact of other discrete items.
GAAP to Non-GAAP Reconciliation: Net Income and Diluted EPS
($ in thousands)
Dollar amounts, as presented, are rounded. Consequently, totals may not add up.



 3/15/2024 Letter Continued (Full PDF)