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DATE
Monday, Nov. 3, 2025 at 4:30 p.m. ET
CALL PARTICIPANTS
President and Chief Executive Officer — Helen Torley
Senior Vice President and Chief Financial Officer — Nicole LaBrosse
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TAKEAWAYS
Total Revenue -- Total revenue was $354 million in Q3 2025, up 22% year over year, reflecting contributions from royalty revenue and product sales.
Royalty Revenue -- Royalty revenue totaled $236 million in Q3 2025, increasing 52% year over year, driven by continued adoption of DARZALEX subcutaneous, FESGO, and VIBGARTE HITRULO.
Adjusted EBITDA -- Adjusted EBITDA was $248 million in Q3 2025, rising 35% year over year, outpacing revenue growth and demonstrating high-margin leverage.
Non-GAAP Diluted EPS -- Non-GAAP diluted earnings per share were $1.72 in Q3 2025, compared to $1.27 in the prior year period; Diluted EPS was $1.43 in Q3 2025 versus $1.05 in the prior year period.
Revised 2025 Full-Year Guidance -- Total revenue projected at $1.3-$1.375 billion (28%-35% growth) for full-year 2025; Royalty revenue now guided to $850-$880 million (49%-54% growth) for full-year 2025; Adjusted EBITDA expected at $885-$935 million (40%-48% growth) for full-year 2025; Non-GAAP diluted EPS raised to $6.10-$6.50 (44%-54% growth) for full-year 2025.
Major Product Drivers -- DARZALEX subcutaneous sales increased 20% operationally to $3.7 billion in Q3 2025, with U.S. subcutaneous share at 96% and global share exceeding 90%.
FESGO Franchise -- Nine-month revenue reached CHF1.8 billion ($2.3 billion) for the first nine months of 2025, up 54% year over year, Perjeta-to-FESGO conversion now at 51% in Q3 2025 and targeted to achieve 60%.
VIBGARTE HITRULO -- Total VIBGARTE sales grew 96% to $1.13 billion in Q3 2025, supported by prefilled syringe adoption.
Cash and Equivalent Position -- $702 million as of September 30, 2025, an increase from $596.1 million at year-end 2024, driven by operating cash flow, partly offset by $342 million in year-to-date share repurchases.
Electrify Acquisition -- Announced transaction expected to raise net debt to EBITDA to approximately two times at closing, with a plan to delever in coming quarters.
Electrify Financial Impact -- Projected to be less than 5% dilutive to non-GAAP diluted EPS over the medium term, excluding milestone payments; full-year 2026 incremental operating expense is expected to be approximately $55 million.
New Indication Approvals -- DARZALEX subcutaneous approved in Europe for smoldering multiple myeloma; VIBGARTE prefilled syringe with ENHANZE approved in Japan for self-injection in two indications.
Ocrevus de Nuvo Adoption -- More than 12,500 global patients were on the subcutaneous formulation as of Q3 2025, up from 7,000 in the prior quarter; 60% of volume from community practices and 50% of U.S. Ocrevus de Nuvo patients are new to brand.
Ribrovant Performance -- IV and SC revenue totaled $198 million in Q3 2025, marking triple-digit year-over-year growth; five-fold reduction in infusion-related reactions observed in subcutaneous delivery versus IV.
Guidance Drivers -- The increase in full-year guidance is attributed mainly to upside from new indication launches for DARZALEX and VIBGARTE HITRULO, which outperformed initial forecast expectations.
Share Repurchases -- $342 million repurchased year to date; $158 million remains under current authorization.
SUMMARY
The earnings call highlighted Halozyme Therapeutics (HALO +2.85%) stronger-than-expected royalty revenue acceleration, with royalty revenue increasing 52% year over year to $236 million. This led to raised full-year 2025 guidance across revenue, adjusted EBITDA, and non-GAAP EPS. Management emphasized that three established products—DARZALEX subcutaneous, FESGO, and VIBGARTE HITRULO—are collectively enabling rapid revenue and profit expansion through elevated adoption and successful indication launches, driving record royalty revenue and profit growth. The Electrify acquisition was framed as a transformative step to strengthen Halozyme's technology portfolio, with explicit metrics for monitoring progress and a stated financial impact on leverage and EPS. Further, management noted a robust pipeline of partner launches and clinical-stage development programs positioned to sustain royalty streams through the next decade.
Helen Torley cited, "13 of the 15 growth catalysts have been achieved," with two major approvals and expecting two additional U.S. product approvals in 2025.
The addition of Electrify's HYPERCON technology brings the ability to formulate concentrations up to 400-500 mg/ml, enabling new at-home administration options for biologics.
Nicole LaBrosse reported, "Since 2019, we have returned approximately $1.9 billion to shareholders through repurchases, representing greater than 100% of cumulative free cash flow over that period."
Management confirmed ongoing discussions toward a new ENHANZE deal, expressing high confidence that it will close within the year.
The pipeline includes eight clinical-stage programs not yet reflected in current royalty projections, with potential new launches prior to 2028.
Halozyme's royalty arrangements for key products extend beyond 2030, with several into the 2040s, supporting long-term recurring revenue visibility.
Executive transition was disclosed, as Nicole LaBrosse is to depart as CFO by March 30, 2026, or upon hiring her successor.
INDUSTRY GLOSSARY
ENHANZE: Halozyme's proprietary drug delivery technology based on recombinant human hyaluronidase, enabling rapid, large-volume subcutaneous biologic administration.
HYPERCON: Electrify's high-concentration formulation technology allowing increased protein drug concentration for subcutaneous delivery.
Subcutaneous (SC): Administration of a drug by injection under the skin, allowing for at-home and rapid delivery, as opposed to intravenous (IV) infusions.
Auto-injector: Device that delivers a preset dose of medication subcutaneously, often designed for patient self-administration.
J code: Permanent Healthcare Common Procedure Coding System (HCPCS) reimbursement code for drugs and biologics, facilitating implementation in U.S. clinical practice.
gMG: Generalized myasthenia gravis, an autoimmune neuromuscular disorder treated by VIBGARTE with ENHANZE.
CIDP: Chronic inflammatory demyelinating polyneuropathy, a neurological disorder, noted as an approved indication for VIBGARTE with ENHANZE.
IVIG: Intravenous immunoglobulin, commonly replaced by subcutaneous formulations in CIDP treatment.
Smoldering multiple myeloma: Early, asymptomatic phase of multiple myeloma, addressed by new DARZALEX subcutaneous approvals.
Net debt to EBITDA: Financial leverage metric indicating total net debt relative to earnings before interest, taxes, depreciation, and amortization.
Full Conference Call Transcript
Helen Torley: Good afternoon, everyone, and thank you for joining us today. I will begin on Slide three. I am very pleased to report another quarter of record royalty revenue of $236 million, representing a remarkable 52% increase year over year, and resulting in total revenue of $354 million, representing 22% growth year over year. These results were driven by the continued momentum of our three established blockbuster subcutaneous therapies: DARZALEX subcutaneous, FESGO, and VIBGARTE HITRULO. Adjusted EBITDA growth exceeded top-line growth, increasing 35% over the prior year's third quarter to $248 million, reflecting the strength inherent in our royalty-based business model.
Our core enhanced drug delivery technology continues to drive the significant momentum in our business and reflects the powerful and growing opportunity for subcutaneous delivery to reshape the future of healthcare. ENHANZE can allow treatments that once required lengthy infusions in hospitals or infusion suites to be administered in minutes, more conveniently, including in the doctor's office and in the patient's home. For patients, it means less time spent traveling, fewer invasive procedures, and greater independence, all while maintaining efficacy and safety. At the same time, it is reducing the burden on the healthcare systems, lowering total cost of care, and freeing up capacity in hospitals and infusion centers.
Turning now to slide four. Year to date, 13 of the 15 growth catalysts have been achieved, including new product approvals, expanded indications, reaching new regions, and achieving key reimbursement milestones across major markets. These new growth catalysts support our near and long-term revenue opportunity. This quarter, there were two notable indication approvals for our two leading growth drivers. Firstly, DARZALEX subcutaneous received European Commission approval for a new indication in smoldering multiple myeloma, providing another meaningful growth catalyst for the franchise. Smoldering multiple myeloma is a precursor condition to active myeloma, expanding DARZALEX subcutaneous reach into a new early disease stage patient population and potentially increasing treatment duration and the lifetime value per patient.
And the second indication was Argenx's VIBGARTE prefilled syringe with ENHANZE approved in Japan for self-injection for generalized myasthenia gravis and chronic inflammatory demyelinating polyneuropathy. Delivered as a once-weekly, thirty to ninety-second subcutaneous injection, VIBGARTE can be self-administered at home, eliminating the need for lengthy infusions in clinical settings. The prefilled syringe with ENHANZE is a key enabler of broader adoption because it simplifies administration, reduces treatment burden, and potentially enhances patient adherence. Rounding out the 15 growth catalysts, we project two additional meaningful US approvals this year. One for DARZALEX subcutaneous and smoldering multiple myeloma, and the second for Ribrovant subcutaneous and EGFR mutated non-small cell lung cancer.
I'll move now to Slide five. Driven by the continued strong performance of our core ENHANZE technology, we are pleased to raise our full-year 2025 guidance ranges. Driven by royalty revenues, we now project total revenue of $1.3 to $1.375 billion, reflecting 28 to 35% growth over 2024. Royalty revenue is now expected to grow 49% to 54% to $850 million to $880 million for the full year, primarily driven by our three established blockbuster subcutaneous therapies: DARZALEX subcutaneous, FESGO, and VIBGARTE HITRULO with ENHANZE. We now anticipate adjusted EBITDA of between $885 million and $935 million, representing year-over-year growth of 40 to 48%. And we expect non-GAAP diluted earnings per share of $6.1 to $6.5, representing year-over-year growth of 44 to 54%.
Moving now to slide six. Recently, we announced the acquisition of Electrify, furthering our vision to enable at-home administration of biologic therapies. This strategic move supports our ambition to expand our portfolio of drug delivery technologies. With Electrify's innovative technology, we aim to extend subcutaneous delivery to a broader range of biologics, reinforcing our focus on patient-centric drug delivery technology solutions. By applying Electrify's HYPERCON technology, concentrations of four hundred to five hundred milligrams per ml or as much as four to five times higher than many current conventional formulations can now be achieved. This breakthrough technology will enable more drugs to be delivered at home via auto-injector, a treatment option we know is of high interest and demand for pharma and biotech companies, particularly those working in inflammation and immunology, neurology, nephrology, and oncology. By bringing together now three innovative drug delivery technology solutions: ENHANZE, our auto-injectors, and HYPERCON, we will create a new commercial opportunity for our partners and further strengthen Halozyme's role as a partner of choice in patient-centered drug delivery, expanding our long-term growth horizon.
Moving now to slide seven. Importantly, HYPERCON is at a value inflection point. The three partner agreements in place have resulted in two products projected to enter the clinic and begin clinical development of the HYPERCON formulation by 2026 or earlier. Each of these two products, as a different formulation, is already approved and has achieved blockbuster sales already. With Halozyme's established expertise in subcutaneous drug delivery, we are well-positioned to identify opportunities to accelerate the time to approval and to unlock significant new revenue potential through advancing new nominations and signing new agreements. The addition of Electrify's HYPERCON technology further enhances our offerings, enabling us to provide best-in-class solutions and maintain strong momentum in transforming the subcutaneous delivery landscape.
Now let me move to slide eight where I will review our current growth drivers for the quarter. Let me begin with DARZALEX, which continued its exceptional performance this quarter. Sales for DARZALEX increased 20% on an operational basis to $3.7 billion, primarily driven by the continued strong share gains of approximately 5.7 points across all lines of therapy and nearly nine points in the frontline setting, as well as through market growth. This marks the seventh consecutive quarter of frontline growth of five or more points, underscoring the continued momentum of the brand.
With 96% share of sales resulting from the subcutaneous formulation with ENHANZE in the United States and more than 90% global subcutaneous share, ENHANZE is bringing value to patients earlier in treatment as they live longer on therapy. DARZALEX is, and we project, will remain the gold standard of treatment for multiple myeloma, holding more than 50% market share across all lines of therapy. And there are two additional new catalysts that are projected to continue the strength of DARZALEX subcutaneous. These include the recent European Commission approval of DARZALEX subcutaneous for patients with high-risk smoldering multiple myeloma, which occurred in July, and it marks the first approved treatment for this early stage of the disease.
We also anticipate potential U.S. approval for smoldering multiple myeloma following the FDA's favorable vote on the risk-benefit profile earlier this year. And separately, Johnson and Johnson reported positive top-line results from the phase three MAJESTIC three study, which further validated the role of DARZALEX FASPRO in later lines of multiple myeloma treatment. The combination with Tegvely and DARZALEX FASPRO in relapsed/refractory multiple myeloma demonstrated at a planned interim analysis a statistically significant improvement in both progression-free survival and overall survival when compared to standard of care. For patients who had received one to three prior lines of treatment, highlighting once again the clinical value of DARZALEX FASPRO with ENHANZE.
These milestones add to the growing list of approvals and clinical successes that continue to expand the reach of DARZALEX subcutaneous and to support analyst projections for the brand to reach more than $18 billion in 2028. And Halozyme will continue to earn royalties on the subcutaneous formulation of DARZALEX through 2032.
Let me move now to FESGO, which is shown on slide nine. FESGO continues to be Roche's number one growth driver with nine months revenue of CHF1.8 billion or approximately $2.3 billion, reflecting a 54% year-over-year increase. In the third quarter, the increasing conversion from intravenous Perjeta and Herceptin reached 51% in 78 launch countries, up five points from the prior quarter. Conversion of Perjeta to FESGO is now projected to achieve 60%, increasing from the prior 50% peak conversion, and this is driven by the strong value proposition. We are pleased with FESGO's growing adoption, royalty secured at the full mid-single-digit rate through 2030.
I'll turn now to VIBGARTE, which is shown on slide 10. VIBGARTE HITRULO continues to be a key driver of the exceptional growth of the VIBGARTE franchise. With total sales of VIBGARTE increasing 96% year over year in the third quarter to $1.13 billion. The subcutaneous formulation enabled by ENHANZE has been instrumental in expanding access to new prescribers and patients across both approved indications of generalized myasthenia gravis and chronic inflammatory demyelinating polyneuropathy. Supporting both of these indications, the prefilled syringe with ENHANZE, which was launched in April 2025, is now approved in most major markets.
By enabling self-injection in just twenty to thirty seconds, whether at home, in the clinic, or while traveling, this innovation has expanded access to new patient populations, simplified treatment logistics, and accelerated adoption in earlier lines of treatment for both gMG and CIDP. The prefilled syringe has expanded the number of prescribers by 260 physicians, opening up new pockets of patients in gMG and CIDP. With approximately fifty percent of patients using the prefilled syringe who are new to VIBGARTE, Argenx stated that this is still the beginning of the growth curve for both indications.
Argenx also stated that they project VIBGARTE's total addressable gMG market could ultimately approach approximately sixty thousand patients globally versus roughly seventeen thousand at launch, as the biologic opportunity expands, and with the future potential addition of ocular and seronegative patient populations.
I'll turn now to the CIDP indication. Argenx commented that they are seeing consistent growth in both patient starts and prescriber engagement driven by physician trust in the safety profile of VIBGARTE HITRULO and its ability to deliver meaningful functional improvements. The prefilled syringe is driving additional demand, offering convenience of self-injection and enabling flexible administration. Eighty-five percent of CIDP patients are switching from IVIG. And there is also early adoption amongst treatment-naive patients. Argenx believes they are at the beginning of the growth curve for CIDP and that they will see continued expansion of the prescriber base.
VIBGARTE HITRULO's strong commercial success, growing approvals, launches in gMG and CIDP, and plans to expand its autoimmune disease indication footprint represent a compelling royalty growth opportunity for Halozyme. We project VIBGARTE HITRULO will be a durable contributor to our long-term financial performance, with analysts projecting total VIBGARTE sales of $7.7 billion in myasthenia gravis and CIDP in 2028, and with Halozyme earning royalties through the early 2040s. It is truly remarkable how only these three products I've just described, DARZALEX subcutaneous, FESGO, and VIBGARTE HITRULO, are driving our 52% year-over-year growth in royalty revenue this quarter and will have continued growth opportunity for years to come.
Moving now to slide 11, I'll review the progress of our recently launched products, which will begin to contribute meaningfully in 2026. Beginning with Ocrevus, Roche reported continued strong momentum for Ocrevus, which represented CHF 5.2 billion or approximately $6.5 billion, up 7% for the first nine months of 2025. The company reaffirmed its expectation for high single-digit growth of Ocrevus this year. Ocrevus Renewable, which utilizes our ENHANZE technology, received approval in 2024 and offers a rapid, ten-minute subcutaneous injection, a significant improvement over the multi-hour intravenous administration and monitoring process. The subcutaneous formulation of Ocrevus is a key growth driver for Roche's neurology franchise.
It enables penetration into community neurology practices and rural areas where IV infusion capacity is limited, which unlocks access to previously underserved patient populations. More than 12,500 patients are now on the subcutaneous formulation globally, representing more than a 75% increase from the 7,000 patients receiving subcutaneous Ocrevus that we reported last quarter. Uptake is also increasing in the United States. Following the permanent J code, which was granted on April 1, which is simplifying reimbursement and enabling broader adoption. In the United States, approximately 800 care providers are now prescribing Ocrevus de Nuvo with ENHANZE, and 60% of the subcutaneous volume is coming from community practices, demonstrating strong traction outside the traditional site of academic centers.
Fifty percent of Ocrevus de Nuvo patients are new to brand, indicating market expansion beyond IV conversions. In early launch countries like Germany, similar trends are being observed, reinforcing the enhanced formulation's ability to grow the overall Ocrevus patient base. Roche anticipates the subcutaneous formulation to represent an incremental $2 billion opportunity, while analysts project the total Ocrevus brand opportunity will reach $10 billion by 2028. We're pleased with how Ocrevus de Nuvo, powered by our ENHANZE technology, is transforming the multiple sclerosis treatment landscape with its rapid ten-minute subcutaneous delivery, unlocking new patient access, accelerating adoption across community practices, and driving meaningful franchise growth.
Halozyme will earn royalties on the subcutaneous formulation at the full mid-single-digit royalty rate through 2030 and at a step-down rate until at least 2034.
Let me turn now to Roche's Tecentriq Hybrisa with ENHANZE. Tecentriq Hybrisa was approved in the United States and Europe in 2024 for all of the IV indications, offering patients and providers a more convenient seven-minute subcutaneous injection. Roche has stated its strategy is to drive conversion from IV to subcutaneous use. Tecentriq generated CHF2.6 billion in revenue for the first nine months of 2025, or approximately $3.3 billion, and analysts project revenue of approximately $4.5 billion by 2028. Halozyme earns royalties on net sales of the sub formulation at the full mid-single-digit rate through the 2040s, underscoring the long-term value of this partnership.
Let me move now to Bristol Myers Squibb's Opdivo. In the third quarter, global Opdivo sales reached approximately $2.5 billion, reflecting a 6% year-over-year increase driven primarily by strong demand. The U.S. launch of Opdivo Quantage with ENHANZE is progressing well, with growth fueled by the continued use of Opdivo Quantage across all of the indicated tumor types, as well as the permanent J code, which was received in the quarter. Sales in the third quarter were $67 million, a doubling from $30 million in the second quarter.
Opdivo Quantage offers the convenience of a three to five-minute subcutaneous administration and the flexibility of outpatient infusion, features that are driving growing adoption among both patients and providers across all of the indicated tumor types. Based on the strong year-to-date performance of Opdivo and Opdivo Quantage, BMS now expects stronger growth than previously guided, with sales expected in the high single-digit to the low double-digit range for the full year. Analysts forecast total brand sales of $9.5 billion by 2028.
And let me move now to Ribrovant. Ribrovant continues to demonstrate strong growth. In the third quarter, Johnson and Johnson reported total Ribrovant IV and SC revenue of $198 million, reflecting triple-digit year-over-year growth. The European approval of Ribrovant subcutaneous with ENHANZE in April marks Halozyme's tenth commercialized partner product and is a key milestone in our global expansion. This subcutaneous delivery of ENHANZE provides the strong efficacy profile of IV Ribrovant, reducing administration time from multiple hours to just minutes, and results in a five-fold reduction in the potentially serious adverse event of infusion-related reactions when compared to the IV formulation.
J&J's strategy to simplify treatment and enhance patient convenience is resonating with physicians for use in combination with lisotronib in the first-line treatment of adult patients with advanced EGFR mutated non-small cell lung cancer and for the same population following failure of a platinum-based regimen. Ribrovant is an important brand for Johnson and Johnson, who are continuing to invest in clinical studies to demonstrate the full potential. Recently published results in the New England Journal of Medicine from the phase three Mariposa study reported that Ribrovant plus lisotronib significantly reduced the risk of death when compared to osimetronib, which is the current standard of care in EGFR mutated non-small cell lung cancer.
Recall, osimetronib is marketed as Tagrisso by AstraZeneca and generated $6.6 billion in global revenue in 2024, which underscores the potential commercial opportunity for Ribrovant. And at ESMO 2025, Johnson and Johnson also presented new data in a different high unmet need patient population from the Origami four study, showing the subcutaneous amazantinib enabled by ENHANZE achieved a 45% overall response rate in patients with recurrent or metastatic head and neck cancer. These results could mark a turning point in the treatment paradigm and certainly could provide further support for Johnson and Johnson's statements that Ribrovant will be a $5 billion product.
Dimensionalizing all of the opportunity for Halozyme, our three blockbusters that are driving today's strong growth, DARZALEX, FESGO, and VIBGARTE, represent an approximately $30 billion in TAM opportunity in 2028. What is very exciting is that these newer launches I've just described also represent an additional approximately $30 billion in opportunity in 2028. With the recent approval, our total opportunity doubled, setting the stage for our strong continued royalty revenue performance. Our portfolio of 10 launch products is well-positioned to deliver $1 billion in annual revenue in 2027.
And this milestone reflects the strength of our long-term strategy and our Importantly, we anticipate royalty contributions from all products through at least 2030, with several extending into the 2040s, ensuring a robust and durable revenue stream.
Let me turn now to slide 12. And I'll review the development opportunities that are not reflected in our royalty revenue projections today. We have eight programs that are currently in various stages of clinical development, with two additional programs anticipated. Among the most advanced opportunities are Bristol Myers Squibb's subcutaneous nivolumab with ralatlimab and Takeda's TAK-881, both of which are in Phase III development. These programs represent potential new royalty growth opportunities beyond what is currently reflected in our forecast through 2028.
And let me now turn to our progress in new deals. I have said before that we will sign a new ENHANZE agreement this year, and remain confident that we will. This confidence is supported by the stage of the discussions we're having and the proximity to finalization. Interest in ENHANZE is strong, as more companies seek meaningful competitive differentiation. And on our two development auto-injector agreements, I am pleased to say we are making progress and project completion of planned human factor studies by mid-2026. With that, let me now turn the call over to Nicole.
Nicole LaBrosse: Thank you, Helen. Our strong third-quarter performance continues to reflect the momentum of our core ENHANZE technology. Total quarterly revenues grew by approximately 22% to $354 million, with royalty revenue increasing 52% to $236 million. Adjusted EBITDA grew 35%, outpacing top-line growth and showcasing the exceptional leverage of our high-margin royalty-driven model. Let me start on Slide 13. We continue to generate robust cash flow, which supports our balanced capital allocation priorities. Year to date, we repurchased $342 million of shares, with $158 million remaining under the current authorized plan. Since 2019, we have returned approximately $1.9 billion to shareholders through repurchases, representing greater than 100% of cumulative free cash flow over that period.
We have a strong balance sheet with cash, cash equivalents, and marketable securities of $702 million on September 30, 2025, compared to $596.1 million on December 31, 2024. The increase was driven by an increase in cash generated from operations, primarily offset by share repurchases. Our net debt to EBITDA ratio was 0.9 times at the end of the third quarter. As Helen mentioned, we announced our acquisition of Electrify in the third quarter, a transaction that strengthens our leadership in drug delivery and complements our strong organic growth opportunities. We are pleased that the acquisition is expected to have a minimal increase in our net leverage, estimated to be at approximately two times net debt to EBITDA at closing.
Our goal is to delever in the subsequent quarters, supported by our robust free cash flows.
Let me now turn to our detailed third-quarter results on Slide 14. Total revenue grew 22% to $354.3 million compared to $290.1 million in the prior year period. Royalty revenue of $236 million increased by 52% from $155.1 million in the prior year period. The commercial success of subcutaneous DARZALEX, FESGO, and VIBGARTE HITRULO continue to drive robust royalty revenue growth. Product sales of $94.2 million increased by 9% from $86.7 million in the prior year period, mainly driven by the contribution from proprietary product sales. Collaboration revenues of $24 million compared to $48.4 million in the prior year period. The difference was primarily due to the timing of milestones achieved.
Research and development expenses were $17.3 million compared to $18.5 million in the prior year period. The decrease was primarily due to lower compensation expense driven by resource optimization and labor allocation initiatives, offset by the timing of planned investments in ENHANZE related to the development of our new high-yield RUPH20 manufacturing process. Selling, general, and administrative expenses were $40.1 million, up from $41.2 million in the prior year period, primarily due to increased consulting and professional service fees partially offset by compensation expense. Adjusted EBITDA increased by 30% to $248.2 million from $183.6 million in the prior year. GAAP diluted earnings per share was $1.43 and non-GAAP diluted earnings per share was $1.72.
This is compared with GAAP diluted earnings per share of $1.05 and non-GAAP diluted earnings per share of $1.27 in 2024.
Turning now to slide 15. Based on our strong performance year to date, we are raising our guidance ranges for the full year. As a reminder, our expectations exclude the impact of the accounting treatment of the Electrify transaction. The final determination of whether this transaction will be accounted for as a business combination or an asset acquisition will be determined at the close. We now expect total revenues of $1.3 to $1.375 billion, representing year-over-year growth of 28% to 35%, driven by an increase in projections for royalty revenues. Royalty revenues of $850 million to $880 million, representing year-over-year growth of 49% to 54%.
We continue to expect DARZALEX SC, FESGO, and VIBGARTE HITRULO to drive the strong expectations, with VIBGARTE HITRULO being the largest royalty dollar growth driver. Product sales of $340 to $365 million, representing year-over-year growth of 12% to 20%. Collaboration revenues of $110 million to $130 million, adjusted EBITDA of between $885 and $935 million, representing year-over-year growth of 40% to 48%. And non-GAAP diluted EPS of $6.1 to $6.5, representing year-over-year growth of 44% to 54%.
Regarding the future financial expectations of our acquisition of Electrify, we continue to expect the transaction to be less than 5% dilutive to non-GAAP diluted EPS over the medium term, excluding potential milestone payments related to the programs in development, which could offset dilution prior to the projected royalty revenues in 2030 and beyond. We also expect full-year 2026 incremental operating expense of approximately $55 million.
With that, I'll now turn the call back over to Helen.
Helen Torley: Thank you, Nicole. In closing, our third-quarter results reflect the continued strength of our core ENHANZE business and the accelerating momentum across our partner portfolio. With 10 launch products, a robust pipeline of future royalty streams, and the addition of the HYPERCON technology, we're well-positioned to deliver strong revenue and shareholder value for years to come. And let me just close with a few words on Nicole. While Nicole will be with us on our fourth-quarter call in February, I did want to take this moment to thank Nicole for her many contributions to Halozyme. These have really helped us accomplish our growth strategy to date.
Throughout this time, Nicole has helped design and lead multiple financing transactions that provide us the capital that enables the strong growth that you see today. Nicole will be transitioning to a new opportunity in 2026 when a new CFO is hired or by March 30, 2026. Operator, with that, we are now ready to open the call for questions.
Operator: Your first question comes from the line of Sean Laaman with Morgan Stanley. Please go ahead.
Sean Laaman: Good afternoon, Helen. Hope you're well. Yeah. On capital allocation, you know, you're two times levered now. You know, how do you think about paying down debt, getting even more conservative balance sheet and weighing that up against potential buybacks for next year and what opportunities there Electrify-like opportunities there might be out there. That's the second first question. And then the second part would be you know, how are investors going to be able to monitor the performance of Electrify going forward?
Helen Torley: Yeah. So I'll start by just saying with regard to opportunities like Electrify, we are continuing to look for those opportunities, Sean, because we do believe that we're in a great position to be the partner of choice for our pharma and biotech partners as they're looking to optimize the patient treatment experience. So keeping looking and obviously we will transact when we do find appropriate things. Let me ask though Nicole to comment on the capital allocation. And the plan to delever.
Nicole LaBrosse: Yes. Thanks, Sean. So we do have robust cash flows and cash growth in coming quarters. And so while we will have a modest draw on our credit facility to fund the acquisition, we do expect to pay that down in the coming quarters. And to delever very quickly. And so what you've seen us be able to do this year is have capital to fund share repurchases. We've done $342 million within the year. And be able to fund the Electrify acquisition. And you'll see us continue to have that balanced approach going forward.
Helen Torley: Alright. And Sean, the last part of it, how to monitor the success of Electrify. I'm going to give you three metrics there. One is we are anticipating the potential for two partner first in human starts, both with already blocked products in their current formulation. That will happen by 2026 or before. So that will be the first metric. I do think as we work through, working with closely, we'll be finding opportunities to develop and be able to communicate a streamlined development plan approach, which we see as another benefit of bringing our two expertise together.
And then the third one, we will continue to look for Electrify and support the advancement of HYPERCON with the current partners potentially agreeing to move more products into the clinic from their open nomination slot or indeed signing new deals. And so we're very excited about the Electrify acquisition. Still in the planning phase obviously at this point in time, but we see great opportunity for the business synergies that are going to come from being able to bring our two companies together.
Sean Laaman: Wonderful. Thank you, Helen. Thank you, Nicole. Appreciate it.
Operator: Thanks, Helen. Your next question comes from the line of Jason Butler with Citizens JMP. Please go ahead.
Jason Butler: Hi, thanks for taking the questions and congrats on the quarter.
Nicole LaBrosse: Let me pass my congratulations on to Nicole as well. It's been great work. So let me start on Electrify. Understanding that the deal hasn't closed yet, can you talk about what you think the awareness level of the company and the technology is with your current ENHANZE partners? And just any feedback you've gotten from partners on the company? And then second on Ocrevus, can you talk a little bit about where market growth is coming from? Are they taking share from other therapies? Are they getting used earlier in treatment? Just how should we think about how that market opportunity is growing? Thanks.
Helen Torley: Yes, thanks. With regard to the knowledge level of our current partners for Electrify, I can see we're only aware of that really by the diligence we've done because we're still at a stage of we're not talking about Electrify and they're not talking about obviously given that the HSR review hasn't closed. But I would say just based on our diligence and market research we did prior to the acquisition, there is a good awareness of the HYPERCON technology, but obviously one of the benefits of bringing our companies together is to elevate that awareness and broaden awareness within each of the companies based on who we're each talking with. We've received small amounts of spontaneous feedback.
Again, I think people are being thoughtful and cautious that the deal hasn't closed. But a number of our partners, particularly the ones who are working with both companies, have provided feedback that I would say signals a strong support for the additional opportunities that might exist of being able to work across both of our platforms. So definitely resounding support from everything that we are hearing out with regard to that. On Ocrevus, yes, based on the comments that Roche made on the last call, obviously delighted to see that they grew 5,000 patients from the 7,500 patients on therapy. That was the number in the second quarter.
They are saying that in the U.S. and Germany, in particular, fifty percent of the patients are new to brand. Jason, I didn't hear them say where those patients were coming from. So I don't know if it is brand new to treatment patients, or it is switched from other therapies. We haven't been provided that level of granularity. But what I do obviously think is terrific to know is that this is expanding the market footprint for Ocrevus exactly as Roche had anticipated, now allowing patients to be treated in physician offices, community hospitals, and opening up access that was a bit restricted before because of the capacity constraints in infusion suites. So sorry, I can't answer that specifically.
If we do find out about that, we will make sure to update on the next call.
Jason Butler: Okay. Thanks. Thank you.
Operator: Your next question comes from the line of Michael DiFiore with Evercore ISI. Please go ahead.
Michael DiFiore: Hi guys. Thanks so much for taking my questions and congrats on the continued progress. Two for me. The first, I wanted to expand upon the M&A question that was asked before. Obviously, your press release said in no uncertain terms that the next chapter of growth will include M&A. And I guess my question is how and how high are you willing to lever up for this transaction? And I know you said that we could expect for you to delever in the next few quarters. And so I guess the ultimate question is could we possibly expect another transaction towards the end of the year? And I have a follow-up.
Helen Torley: Yes. Thanks for that, Mike. Obviously, our focus at the moment is completing the Electrify acquisition. And so I think I can say that it's unlikely there'll be another acquisition this year. But we are actively looking because we do want to be able to continue to add to our growth and our momentum that is so strong at this point in time. Nicole, will you comment on the approach we're taking to leverage?
Nicole LaBrosse: Yes. And as Helen noted, while we will evaluate targets, I can say from a financial perspective, we do have the capacity. We're willing to go up to three times net leverage. We mentioned with this transaction, at close, we expect to be at about two times, but that will quickly come down. And so there will be capacity. And again, we'll just be patient and find the right next opportunity.
Helen Torley: And I think just to kind of emphasize what Nicole said, you've seen us demonstrate a lot of patience in terms of finding the right asset, doing the appropriate diligence, and seeking to only transact and make a formal offer to the company once we have completed all of that. So we will take that same very thoughtful approach. We are in a great growth position. We're excited about the growth that's going to come from Electrify. So don't think of this as something we're rushing into. We're just going to continue to the strategy we've had in place for the last several years.
And because of our strong cash flow, we're in a position to contemplate that in 2026, but only if we find it meets our criteria and is the right move for Halozyme.
Michael DiFiore: Excellent. Thank you for that, Helen. And my follow-up question is, again, I know it's super early regarding Electrify, but on the prior call, I think I asked about the potential to combine ENHANZE with HYPERCON. And I think you had said that feasibility studies regarding the combinability still need to be done. When might we see such studies be conducted and yes, I'll just leave it there. Thank you.
Nicole LaBrosse: Yes. Thanks, Mike. Yes, it is something obviously that we are interested in and it is one of the work streams that will be one of the early conversations that we're going to have between the technical experts from both companies to determine what the path would be for that. But I think my more important message is each company has its own pipeline of ongoing conversations for a great fit for each of our technologies to different partner products. And so that is where the initial focus is going to be just based on the fact that for those people who are seeking a more high-volume rapid delivery, ENHANZE is the way to go.
If they are wanting a potential for an auto-injector in the patient's home, perhaps the Electrify technology and HYPERCON is going to be a better one. You will see the initial focus most assuredly being on pursuing those two successful strategies to date. We're interested to see can they come together. But we don't have to wait for that data. The strategy will be to pursue each of them separately. As we know there's opportunity for them individually.
Michael DiFiore: I see.
Operator: Your next question comes from the line of Jessica Fye with JPMorgan. Please go ahead.
Adam Ferrari: Hello, this is Adam on for Jess. Thank you for taking our questions. I really just had two. Can you share your latest thoughts on potential for new ENHANZE deals near term? I think you mentioned one in the prepared remarks, but any details around that? And second, which product or products contributed the most to the guidance upside this time around? Thank you.
Helen Torley: Yes. Let me take the first one, then Nicole will talk about the guidance. Adam, with regard to new deals, I did say in my prepared remarks we're very confident to have a new deal this year. That confidence comes from proximity to completion of discussions. We have several discussions that are ongoing. And so it isn't our practice to preannounce anything, but all I can say is that we're excited with the continued interest in ENHANZE and whichever of these conversations we've crossed the finish line first, we're very excited and think it represents a great opportunity for patients but also for Halozyme. Nicole, would you talk about the guidance?
Nicole LaBrosse: So our guidance is driven by the strength of our royalties, and we continue to see royalties being very strong in our main royalty drivers, which are VIBGARTE HITRULO, FESGO, and DARZALEX. And I'll also point out, just recall that DARZALEX and VIBGARTE HITRULO both had new indications launching this year. As you can are aware, first-year launch estimates are notoriously hard to project exactly, and that's where we're seeing the upside and reflecting that now given that latest data trend in the full-year projections.
Adam Ferrari: Thank you very much.
Operator: Your next question comes from the line of Mitchell Kapoor with HCW. Please go ahead.
Mitchell Kapoor: Hey, team. Thanks for taking the questions. I wanted to ask about forward guidance. Of course, you know, recognizing that you only formally update the five-year guidance once a year, we're getting close to 2026. So wondering, with the strong momentum that we have been seeing quarter to quarter and the subsequent guidance raises for this year, how you're thinking about maintaining that growth into the next few quarters in 2026. Does the current trajectory suggest that the previous 2026 ranges might already be tracking towards the upper end of what was outlined earlier last this year? Thanks.
Helen Torley: Yeah. Thanks, Mitchell. So we will be able to provide more on that early in 2026 when we are able to really collect all of our trends and input from our partners comes in towards the end of the year. So more details come, but we are tracking, as you can see, to exceed 2025 original expectations. But we will be able to reflect the latest information when we give full-year guidance and update in the New Year.
Mitchell Kapoor: Okay, great. And then the second one is just on how you're doing conducting outreach for prospective partners between ENHANZE and HYPERCON. Are these parallel tracks? Or how do you kind of discuss those with prospective partners?
Helen Torley: Yes. Thanks, Mitch. At the moment, the HSR review period is completed, our two businesses are operating separately. We can have conversations about planning as to how we're going to operate together. But we do not share any information with regard to partners. Each of those is talking to or anything like that. So I would expect upon completion and the close, which we do expect to happen in the fourth quarter, we will be in a position to have conversations and identify who's talking to whom. But at this point in time, that's not something we are aware of or want to share. We're each pursuing our own separate conversations and targeted outreach.
Again, each of the products works in a slightly different space. All of them are for subcutaneous delivery. ENHANZE is more focused towards the larger volume, which is often in the doctor's office or occasionally at home, whereas the opportunity with HYPERCON is a bit more focused at that at-home potentially auto-injector delivery because the volumes can be potentially reduced to as low as two ml. So I would expect we may have talking to the same companies, but probably not talking on exactly the same products, which is why this is such an attractive deal expanding our TAM because each of them is going to have a different, best use case.
And that's what I expect to see when we're able to talk in more detail.
Mitchell Kapoor: Great. Thank you, and congrats on an impressive quarter.
Helen Torley: Thanks, Mitch.
Operator: Your next question comes from the line of Brendan Smith with TD Cowen. Please go ahead.
Brendan Smith: Great. Thanks for taking our questions. And congrats on the quarter as well. Maybe just a couple quick ones from us. First, actually, on the auto-injector business. Can you maybe just remind us what the development path there is looking like and how we should think about economics and timing of that over the next couple of years? You know, if you think that would be compatible with HYPERCON or that would require something with separate validation. And then just maybe quickly on the earlier pipeline, can you remind us when we can expect updates from the VIVE and Acumen products?
And if you disclosed anything about those economics that we should make sure that we flag as we try to think about royalties for the next wave of ENHANZE drugs. Thanks.
Helen Torley: Yeah. Thanks, Brendan. With regard to the auto-injector business, so the small volume auto-injectors are obviously for products that are 2.25 ml or less. And there is an immediate applicability and use with the HYPERCON product if a partner is developing that. So those are basically there's some customization that's possible. But for a partner who wants to integrate it into their development, that's pretty straightforward. With the high volume auto-injector, we have progressed to having very strong clinic-ready prototypes that are able to be integrated into development plans now.
And so for a company who is wanting to use those, that is also going to be pretty straightforward for them to put into whatever clinical trial they're going to do to test it and start doing the development. The actual separate development you need for a device can all happen in parallel to the clinical development. You've got to do stability studies, it's usually human studies, but that is usually all happening in parallel to what's the traditional clinical pathway and integrated into a single filing.
So I would say we're in a great position for partners who want to use HYPERCON to be using either small volume or high volume auto-injectors and integrating them immediately as soon as they want to be able to do them. On the economics, if you recall for the auto-injector, this is much more of a business model where for the small volume auto-injector, it is generally a cost model where there's a certain charge per device. For the high volume auto-injector, it will because of the size of injection need to be used with ENHANZE. So we think of those as being associated with royalties because of the need to have ENHANZE use with them.
But they will also come with a cost per device adding additional revenue there. Brendan, did that answer your question on that? And I can move to the pipeline.
Brendan Smith: It did. Yep. Be great. Thanks.
Helen Torley: Okay. So with regards to the earlier pipeline, there haven't been any public updates from VIVE or from Acumen in the last couple of quarters. And so we're not in a position of being able to share any additional information. The last update from Acumen, as you probably are aware, was that they had finished their Phase one testing. And so that was great to see. And they reported the results actually publicly. But we're waiting to be able to provide any updates beyond that.
On the economics, in the when the deals were announced in the releases insofar as what was permitted to be made public, it does include some high-level description of the milestones and royalty structure of these agreements, Brendan. So I would recommend if you could maybe just go back and look at those, you'll get a bit of color, not granular, but a bit of color that might be helpful.
Brendan Smith: Okay. Great. Thank you.
Helen Torley: Thank you.
Operator: Your next question comes from the line of Corinne Johnson with Goldman Sachs. Please go ahead. Corinne, your line is open.
Corinne Johnson: Hi, good afternoon. Maybe following up on some of the BD commentary earlier. I guess, how do you think about whether you currently have the partnerships you need to drive revenue growth kind of into the next decade, particularly as some of the key products like DARZALEX contracts terminate in that early 2030s period. And given there's a five-year development timeline for new partner products? Thanks.
Helen Torley: Yes. Thanks, Corinne. Let me start by saying for each of the products that are in development, we kind of group them into three groups. Now we've got the current blockbusters. And I think what's the first thing to note about those is those products and Nicole commented on it, VIBGARTE and DARZALEX are having new indications every year at this point in time, which is super in terms of driving their continued growth for a period of time. We talked about DARZALEX with smoldering multiple myeloma with first line, which is why despite that being a product been in the market now for many, many years, it's still putting up 19%, 20% year-over-year growth.
And we do are excited to see that continue to grow for years to come. VIBGARTE is a very interesting one. That's very early in its life cycle. And obviously, all the growth we're seeing today are driven by gMG and CIDP. But next year as you're aware, there's going to be readouts in thyroid eye disease, ocular myasthenia gravis, myositis. And Phase II data in systemic sclerosis. So we think of VIBGARTE where we get royalties out to the 2040s as being an incredibly valuable growth engine for multiple years to come.
And then if we go to the second block, which are the most recently launched ones, so Ocrevus and Opdivo and Tecentriq, and amivantamab, those are also just at the beginning of their growth trajectory where we expect growth for many years to come. Given they are just at the start. And in many of those cases, we've got royalties going out certainly well into the 2030s and in some instances into the 2040s. So that's another set of sustainable royalty revenue streams. And then behind that, let's look to our development pipeline. The products that are in Phase one, two, and three, so they're going to have different timings for launch.
Some of them potentially launching before 2028, other ones shortly after 2028. So again, another set of new royalty streams adding in that. And your point of the five years really does say that for any new deals we signed now, which we're very actively working on and have new products starting at next year, those have the potential to be launching in the early 2030s adding once again new royalty revenue streams. So we continue to be very excited by these.
Not just waves, which are a very important part of it, but within each several of our products, they have power being developed in a way that is having them grow and grow beyond probably what we also initially because of the value of the new indications and the investments and the companies are making. To have these become truly mega blockbuster drugs. So that's the way we think about it and that's what we work towards just that wave upon wave of new royalty revenue.
Corinne Johnson: Thank you.
Operator: Ladies and gentlemen, this concludes Halozyme Therapeutics, Inc.'s third quarter 2025 Financial and Operating Results Conference Call. Thank you all for joining. You may now disconnect.