Halozyme picks up $150M credit deal on its Roche, Baxalta royalties

A depiction of the subcutaneous space following injection of Haloyzme's Enhanze enzyme--Courtesy of Halozyme

In a deal expected to close this month, pharma collaborator Halozyme has picked up a $150 million credit deal based on future royalties from its Enhanze line of drug delivery products associated with Roche and Baxalta.

Halozyme ($HALO), which has been collecting partnerships in the heights of Big Pharma, has seen a flurry of action from the likes of Eli Lilly ($LLY), AbbVie ($ABBV), Roche ($RHHBY), Baxalta ($BXLT), Pfizer ($PFE) and Johnson & Johnson ($JNJ), all tied to its Enhanze technology, which uses the enzyme hyaluronidase to ease subcutaneous injections by breaking down barriers in the body. The same treatments might otherwise require infusion, but Halozyme's Enhanze provides a more suitable option that pharma companies are clamoring to incorporate into their own drugs.

Halozyme most recently signed an $825 million deal with Lilly in late December that comes with $25 million up front.

The recent financing, managed by Pharmakon Advisors and Athyrium Capital Management, creates the subsidiary Halozyme Royalty, which will receive royalty payments based on only the company's collaborations with Roche and Baxalta. Enhanze is used with Roche's Herceptin and MabThera and Baxalta's Hyqvia. Halozyme will give up half of its royalty payments on these treatments in 2017 to repay the loan, and thereafter all of the royalties will go toward fulfilling the payments.

Halozyme CEO Helen Torley

"This transaction allows us to continue to execute our two pillar strategy supporting the initiation of our phase III study in pancreatic cancer, ongoing studies in non-small cell lung and gastric cancers, and start of our planned trial in breast cancer in collaboration with Eisai," Halozyme CEO Helen Torley said in a statement. "This opportunity for non-dilutive financing further demonstrates how our ENHANZE platform can drive value, and is additive to the $25 million upfront payment from the recently announced licensing and collaboration agreement with Eli Lilly."

- here's the release