Executive Summary

Q4 2024 delivered strong top-line and bottom-line growth: total revenue $298.0M (+30% YoY), royalties $170.4M (+40% YoY), adjusted EBITDA $195.8M (+61% YoY), GAAP EPS $1.06 (+63% YoY), non-GAAP EPS $1.26 (+54% YoY) .
Outperformance was driven by robust royalty streams from DARZALEX SC, Phesgo, and growing VYVGART Hytrulo adoption, plus higher milestone collaboration revenues; cost of sales declined YoY on lower bulk rHuPH20 sales .
Halozyme reiterated 2025 guidance: total revenue $1.150–$1.225B, royalty revenue $725–$750M, adjusted EBITDA $755–$805M, non-GAAP EPS $4.95–$5.35, underscoring confidence in continued growth with VYVGART Hytrulo cited as the largest royalty dollar growth driver in 2025 .
Near-term catalysts include: amivantamab SC EU approval expected around April 2025, U.S. permanent J-codes for Ocrevus Zunovo (April) and Opdivo Qvantig (July), and VYVGART Hytrulo prefilled syringe PDUFA April 10, 2025; management also guided Q1 royalties to be ~10% below Q4 due to annual rate resets before sequential growth resumes .

What Went Well and What Went Wrong

What Went Well
- Royalties and total revenue scaled strongly; Q4 royalties rose 40% YoY to $170.4M led by DARZALEX SC, Phesgo, and initial VYVGART Hytrulo contribution; adjusted EBITDA up 61% YoY to $195.8M on 86% gross margins and disciplined OpEx growth (~5%) .
- Strategic approvals expanded future royalty durability: FDA approval of Opdivo Qvantig (first SC PD‑1 inhibitor) and U.S. launches of Tecentriq Hybreza and Ocrevus Zunovo, with BMS and Roche signaling substantial SC conversion and market expansion potential .
- Management highlighted reaching 1 million ENHANZE patients and extended EU ENHANZE patent to 2029, sustaining mid‑single‑digit rates on DARZALEX SC and amivantamab SC, with a similar U.S. reissue patent sought .
What Went Wrong
- Q1 2025 modeled royalty step-down (~10% vs Q4) from annual rate resets, with no Q1 milestones planned and product sales weighted to H2; this cadence could pressure near-term quarterly optics despite strong full-year guide .
- Amivantamab SC received a U.S. CRL tied to manufacturing-site observations (not clinical), delaying U.S. launch timing; J&J is working with FDA on resolution, but it adds execution risk to near-term royalty layering .
- Collaboration/API sales timing remains lumpy quarter-to-quarter; while Q4 benefited from milestones, variability can create quarterly noise even as annual trajectories remain intact .

Financial Results

Metric	Q2 2024	Q3 2024	Q4 2024
Total Revenue ($M)	$231.353	$290.084	$298.008
Royalties ($M)	$124.918	$155.061	$170.419
Revenues under collaborative agreements ($M)	$27.549	$48.364	$48.225
Product sales, net ($M)	$78.886	$86.659	$79.364
Operating Income ($M)	$117.235	$163.197	$175.501
Net Income ($M)	$93.245	$137.011	$137.012
Adjusted EBITDA ($M)	$137.030	$183.556	$195.849
GAAP Diluted EPS ($)	$0.72	$1.05	$1.06
Non-GAAP Diluted EPS ($)	$0.91	$1.27	$1.26
Gross Margin %	82.9% (calc from $231.353M, $39.607M)	82.9% (calc from $290.084M, $49.426M)	85.9% (calc from $298.008M, $42.055M)
Operating Margin %	50.7% (calc from $117.235M, $231.353M)	56.3% (calc from $163.197M, $290.084M)	58.9% (calc from $175.501M, $298.008M)
Net Income Margin %	40.3% (calc from $93.245M, $231.353M)	47.2% (calc from $137.011M, $290.084M)	46.0% (calc from $137.012M, $298.008M)

Segment breakdown:

Revenue Component ($M)	Q2 2024	Q3 2024	Q4 2024
Royalties	$124.918	$155.061	$170.419
Product Sales, net	$78.886	$86.659	$79.364
Collaborative Agreements	$27.549	$48.364	$48.225

KPIs and balance metrics:

KPI	Q2 2024	Q3 2024	Q4 2024
Cash + Marketable Securities ($M)	$529.0	$666.3	$596.1
Weighted Avg Diluted Shares (M)	129.222	130.134	128.980
Gross Margin Commentary	n/a	n/a	“86% gross margins”

Notes: Margins are calculated from cited revenue and cost of sales; Adjusted EBITDA per quarter as per GAAP-to-non-GAAP reconciliations .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Total Revenue	FY2025	$1,150–$1,225M (Jan 8, 2025 reference)	$1,150–$1,225M	Maintained
Royalty Revenue	FY2025	$725–$750M (Jan 8, 2025 reference)	$725–$750M	Maintained
Adjusted EBITDA	FY2025	$755–$805M (Jan 8, 2025 reference)	$755–$805M	Maintained
Non-GAAP Diluted EPS	FY2025	$4.95–$5.35 (Jan 8, 2025 reference)	$4.95–$5.35	Maintained
Total Revenue	FY2024	$935–$1,015M (Q2 guide)	$970–$1,020M (Q3 raise)	Raised
Royalty Revenue	FY2024	$520–$555M (Q2 guide)	$550–$565M (Q3 raise)	Raised
Adjusted EBITDA	FY2024	$555–$615M (Q2 guide)	$595–$625M (Q3 raise)	Raised
Non-GAAP Diluted EPS	FY2024	$3.65–$4.05 (Q2 guide)	$4.00–$4.20 (Q3 raise)	Raised

Cadence commentary: Q1 2025 royalties expected ~10% below Q4 due to annual rate resets, no Q1 milestones, collaboration milestones weighted to 2H, product sales weighted to 2H; sequential royalty growth thereafter in 2025 .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2 2024)	Previous Mentions (Q3 2024)	Current Period (Q4 2024)	Trend
ENHANZE approvals & launches	EU/UK approval for Ocrevus SC; VYVGART Hytrulo CIDP FDA approval; Tecentriq/Opdivo filings advancing	U.S. approval for Tecentriq Hybreza and Ocrevus Zunovo; early EU uptake; Phesgo momentum	FDA approval of Opdivo Qvantig; early Ocrevus Zunovo patient starts; more 2024 approvals (Cidp Japan, etc.)	Accelerating
Royalty growth drivers	DARZALEX frontline share gains; Phesgo conversion path; VYVGART Hytrulo expanding early lines	DARZALEX >90% SC in U.S., Phesgo projected to >50% conversion; VYVGART prelim ~$5B by 2028 (analysts)	2025 largest dollar growth driver: VYVGART Hytrulo; continued DARZALEX/Phesgo growth	Broadening
Patent/IP durability	EU patent extends ENHANZE to 2029; U.S. reissue pending	Reinforced IP narrative; MDA patents introduced for modified hyaluronidase portfolio	EU royalty rates sustained to 2029; confidence in U.S. reissue; mid‑single‑digit clarity (3–7%)	Supportive
BD & auto-injectors	Active terms and technical discussions; HVAI interest; M&A optionality	ENHANZE expansions (argenx 4 targets; ViiV 1 target); continued HVAI evals	New small-volume auto-injector development deal signed; target at least one ENHANZE new deal in 2025	Building
Ocrevus strategy	Market expansion focus; stand-alone incremental ~$2B opportunity	Early EU/UK uptake; U.S. launch goal to expand prescribers; 80% new-to-brand early starts	U.S. positive signals; permanent J-code expected April; expansion before conversion	Positive
Amivantamab SC	Priority review; strong PALOMA-3 data	Under review; derisked launch expectation	U.S. CRL (manufacturing inspection); EU CHMP positive opinion; path to resolve	Mixed near term

Management Commentary

“Significant growth…culminated in two important milestones: achievement of more than $1 billion in total revenue and reaching a cumulative one million patients with our ENHANZE drug delivery technology.” — Dr. Helen Torley .
“These three products will continue to drive our 2025 royalty revenues, with VYVGART Hytrulo becoming the largest dollar growth contributor in 2025.” — Dr. Torley .
“We converted 74% of our adjusted EBITDA into free cash flow…expected to increase to 80% of adjusted EBITDA in 2026…net leverage ratio of 1.3x.” — CFO Nicole LaBrosse .
“Mid-single digit [royalties]…we use 3% to 7% to represent mid-single digits.” — CFO LaBrosse .
On Ocrevus Zunovo: “In the United States…50% [of new SC patients] being naive to OCREVUS…permanent J code expected in April…projected to accelerate uptake.” — Dr. Torley .

Q&A Highlights

Quarterly cadence: Q1 royalties expected ~10% below Q4 on annual rate resets (primarily DARZALEX), with sequential growth thereafter; no Q1 milestones planned; collaboration milestones and product sales weighted to H2 .
VYVGART Hytrulo prefilled syringe: PDUFA in April 2025; Halozyme believes guidance reflects potential adoption impact across gMG and CIDP .
Auto-injector economics: small-volume auto-injector development deal signed; commercial structures typically per-device pricing with margin; HVAI tied to ENHANZE and could add both royalty streams and product device sales .
Royalty rate clarity: mid‑single‑digit defined as 3%–7%; supports long-term royalty durability narrative .
ASR update: ~$250M accelerated repurchase initiated December; ~80% shares delivered at start; final settlement after averaging period .

Estimates Context

S&P Global/Capital IQ consensus estimates were not available at the time of analysis due to data access limits; therefore, comparisons to Wall Street consensus for Q4 2024 are omitted (values unavailable).
Given management’s 2025 cadence and reiterated guidance, near-term models likely adjust for: Q1 royalty reset (-~10% vs Q4) before sequential recovery, limited Q1 milestones, and VYVGART Hytrulo acting as the largest royalty dollar growth driver in 2025 .

Key Takeaways for Investors

Q4 momentum is intact: double-digit YoY revenue and EPS growth, with royalty streams scaling and margin leverage evident from 86% gross margins and disciplined OpEx growth .
Near-term trading watch: Q1 royalty rate reset could create a transient sequential dip; expect inflection from Q2 onward; use cadence commentary to frame quarter-to-quarter expectations .
Royalty durability: EU patent extension to 2029 and anticipated U.S. reissue underpin mid‑single‑digit rates on flagship franchises (DARZALEX SC) into late decade .
2025 catalysts: VYVGART Hytrulo prefilled syringe (April), Ocrevus Zunovo permanent J-code (April), Opdivo Qvantig J-code transition (July), amivantamab SC EU approval expected around April—each supports adoption/conversion narratives .
Mix shift: VYVGART Hytrulo identified as 2025’s largest royalty dollar growth driver; monitor CIDP payer coverage/build (now ~90% covered lives, favorable policies) and prefilled syringe self‑administration tailwinds .
BD optionality: New small-volume auto-injector deal signed; management targeting at least one new ENHANZE deal in 2025; device and licensing layering adds product sales and future royalties .
Capital deployment: Active $250M ASR, low net leverage (~1.3x), high FCF conversion; supports continued buybacks/M&A while funding growth .

Management and Document Citations: Q4 2024 8-K press release and financial tables ; Q4 2024 earnings call transcript ; Q3 2024 8-K and call ; Q2 2024 8-K and call ; Press releases (Dec 30, 2024) for Opdivo Qvantig (BMS), HYQVIA (Takeda), VYVDURA (argenx) .

HALOZYME THERAPEUTICS, INC. (HALO)·Q4 2024 Earnings Summary