Halozyme Raises 2026 Outlook as Q3 Revenue Jumps 39%

Halozyme Therapeutics Inc. raised its full-year 2026 guidance after its ENHANZE drug-delivery portfolio drove record third-quarter revenue, led by a 44% increase in royalty income from partner products.

The San Diego-based biotechnology company reported total revenue of $493.0 million for the third quarter, up 39% from $354.3 million a year earlier. Royalty revenue rose to $341.0 million from $236.0 million, while net product sales increased 46% to $137.3 million. Collaboration revenue declined 39% to $14.6 million.

Halozyme said growth in royalties was supported by established products including VYVGART Hytrulo, subcutaneous DARZALEX and PHESGO, alongside increasing contributions from OPDIVO Qvantig, RYBREVANT FASPRO and OCREVUS ZUNOVO.

Earnings rise as operating costs increase

Third-quarter operating income increased 35% to $295.0 million, while net income rose 41% to $247.0 million. The GAAP net income margin was 50%, compared with 49% in the prior-year period.

GAAP diluted earnings per share advanced 41% to $2.01. Non-GAAP diluted EPS increased 39% to $2.39, and adjusted EBITDA rose 35% to $336.2 million. Adjusted EBITDA margin narrowed to 68% from 70%.

Total operating expenses increased 45% to $198.0 million. Cost of sales rose 49% to $82.5 million, research and development expense increased 61% to $27.8 million, and selling, general and administrative expense grew 26% to $58.2 million. Amortization of intangible assets climbed 66% to $29.5 million.

Commercial portfolio supports royalty growth

Partner-reported commercial metrics showed continued adoption across Halozyme’s launched ENHANZE portfolio. DARZALEX FASPRO-related performance included approximately 98% subcutaneous use in the U.S., while total DARZALEX intravenous and subcutaneous revenue increased 15.6% year over year to $4.2 billion.

Global conversion to PHESGO reached 59%, five percentage points higher than at midyear. OCREVUS ZUNOVO had about 56,000 patients globally, an increase of 12,000 since the first half of 2026, with subcutaneous conversion from intravenous OCREVUS above 20%.

Subcutaneous conversion for OPDIVO Qvantig was 17%, with management projecting conversion at the high end of a 30% to 40% range. The RYBREVANT and LAZCLUZE franchise grew 63.5% in the quarter, with the presentation citing continued regional uptake and adoption of RYBREVANT FASPRO.

Halozyme also highlighted growth from the VYVGART Hytrulo prefilled syringe in generalized myasthenia gravis and chronic inflammatory demyelinating polyneuropathy. Potential approvals in pediatric and ocular myasthenia gravis are expected in 2027, while a supplemental biologics license application for immune-mediated necrotizing myopathy is expected by the end of 2026.

Collaboration and clinical pipeline expand

Halozyme expanded ENHANZE agreements with three existing partners, covering four additional targets. Johnson & Johnson added an oncology target, argenx added two exclusive targets to bring its collaboration to eight, and Incyte expanded its agreement to evaluate subcutaneous axatilimab with ENHANZE.

The company also reported three new Phase 1 study starts involving Pfizer’s subcutaneous tilrekimig, argenx’s ARGX-119 and GSK’s subcutaneous belantamab. A Phase 1b study of subcutaneous INCA033989 is planned, and three additional undisclosed Phase 1 programs were projected to be in development by year-end.

Full-year guidance increases

Halozyme now expects 2026 revenue of $1.860 billion to $1.925 billion, compared with its previous range of $1.835 billion to $1.910 billion. The updated range represents projected growth of 33% to 38% from 2025.

Royalty revenue is forecast at $1.235 billion to $1.255 billion, up from the prior range of $1.220 billion to $1.245 billion and representing anticipated annual growth of 42% to 45%.

The company increased its adjusted EBITDA outlook to between $1.240 billion and $1.290 billion from $1.225 billion to $1.280 billion. Non-GAAP diluted EPS is expected to range from $8.75 to $9.05, compared with the previous forecast of $8.65 to $9.00.

The guidance includes approximately $60 million of new investment in Halozyme’s Hypercon and Aerocon platforms. Management expects operating expenses to rise modestly on a sequential basis. Product sales are expected to remain relatively flat sequentially as growth in proprietary products is partly offset by the timing of partner product orders, while collaboration revenue is expected to return to second-quarter levels.

Halozyme repurchased $400 million of shares during 2026 under its February 2024 and May 2026 authorizations. The company ended the quarter with net leverage of about 2.4 times trailing adjusted EBITDA and said it remained on track to reduce that ratio to approximately 1.5 times by year-end.

The outlook remains dependent on partner product adoption, conversion rates, development and regulatory timelines, commercialization performance and royalty receipts. Halozyme also identified competition, pharmaceutical pricing and trade policies, tariffs, tax legislation, litigation costs and possible delays in capital allocation or acquisitions as factors that could cause actual results to differ from its expectations.