Halozyme Therapeutics Inc (HALO) 2018 Q2 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the Halozyme Investor Call. (Operator Instructions) It is now my pleasure to turn the conference over to Dr. Helen Torley. Dr. Torley, please begin.

Good afternoon, and thank you for joining us today. Today, I'm joined by Laurie Seltzer, our CFO; and Dr. Dimitrios Chondros, our Chief Medical Officer.

As we enter the second half of 2018, I'm pleased to share details of the strong progress and continued momentum across both of our value-creating pillars. And during the call, we will be making forward-looking statements, and I refer you to our SEC filings for a full listing of risks and uncertainties.

I'll begin the call with the key takeaways for the quarter. Firstly, we reported yet another quarter of strong growth in ENHANZE royalties. They increased 36% over the second quarter of 2017 on a reported basis or 17% adjusting for the change in accounting we implemented at the beginning of the year. And secondly, we're making strong progress towards realizing the ENHANZE $1 billion royalty revenue potential in 2027 that I discussed in January. This projection was based on the continued growth of our 3 currently marketed products and the successful development, approval and launch of 7 new products. The great news is that we expect all 7 of these new products will be in the clinic by the end of this year. And I'll give more details on this in just a moment. And thirdly, our HALO-301 registration study remains on track to achieve the target number of progression-free survival events between December of 2018 and February of 2019. Enrollment is also on track to achieve approximately 500 patients by year-end.

Now with those key takeaways, let me now provide some additional color on each pillar. On ENHANZE we've licensed our rHuPH20 enzyme to 8 leading companies to date. As shown on Slide 2, the projected royalties from our 3 marketed products, plus the 7 new products that are projected to be in clinical development in 2018, result in the potential for approximately $1 billion in royalty revenue in 2027. Now this assumes multiple indications and global launches. And recall that Halozyme received, on average, a mid-single-digit royalty on net sales of ENHANZE formulated products.

Let me begin the update on progress in the currently marketed products. In July, we announced the achievement of a major milestone, the FDA acceptance of Roche's BLA for a subcutaneous version of Herceptin in its approved breast cancer indication. The action date is March of 2019. Upon approval, this would allow for a new administration option and potential shorter treatment times for patients. With reported 2017 U.S. sales of IV Herceptin of CHF 2.7 billion, the potential royalties from a successful U.S. launch of subcutaneous Herceptin represents a meaningful opportunity for Halozyme.

And Roche's RITUXAN HYCELA, a subcutaneous formulation of rituximab, co-formulated with ENHANZE, was approved by the FDA in multiple blood cancer indications in mid-2017. The commercial launch of RITUXAN HYCELA continues to progress with additional clinics initiating and driving conversion. Roche began piloting direct-to-patient strategies in July, highlighting the potential benefit of replacing the RITUXAN IV infusion with a 5- to 7-minute injection using RITUXAN HYCELA.

Let's move now to the 7 new products that are already in clinical development or plan to enter development in 2018. I'm going to break the discussion into 2 parts. Firstly, I'll focus on the 4 targets that have already been disclosed, and the second will focus on the 3 additional undisclosed targets. If you turn now to Slide 3, if we consider the 4 disclosed targets shown here, together with the 3 currently marketed products, these represent more than 60% of the $1 billion royalty revenue potential in 2027. Excitingly, 2 of these targets are now in Phase III clinical studies, Daratumumab and fixed-dose combination of Perjeta and Herceptin.

As we said before, in our experience, a product entering Phase III testing represents a significant derisking event on the path to approval and commercialization with ENHANZE. Focusing firstly on DARZALEX SC. In December of 2017, Janssen initiated the first of multiple Phase III studies with ENHANZE. This followed the presentation of data supporting a 15-millimeter injection of the subcutaneous formulation delivered in 5 minutes or less. Janssen is currently studying DARZALEX SC with ENHANZE in 4 Phase III trials in patients with multiple myeloma, amyloidosis and smoldering myeloma. In addition, the company has initiated the Phase II study of DARZALEX SC with various combination therapies in frontline and relapse refractory multiple myeloma patients.

Commercialization of the DARZALEX IV formulation continues to progress well. Reported sales were $511 million in Q2, an 18% growth from last quarter. Recall that analysts project peak sales of DARZALEX will exceed $7 billion. With the ongoing studies for the SC regimen progressing well, this program continues to play a key role in Janssen's development plans for DARZALEX.

Turning now to Herceptin SC and Perjeta SC using ENHANZE. In July, we announced Roche initiated a global Phase III study of the fixed-dose combination, following supported Phase I results from the same combination that was shared at the 2017 San Antonio Breast Cancer Symposium. The Phase III study will enroll approximately 500 patients, with HER2-positive early breast cancer in the neoadjuvant and adjuvant settings. Today's patients receiving Perjeta IV and Herceptin IV administers sequentially can expect it to take 2.5 hours for the loading dose and between 1 and 2.5 hours for subsequent doses. With the fixed-dose subcutaneous approach, the times are substantially shorter, with the loading dose expected to takes 7 to 8 minutes, and subsequent doses, 5 minutes. Roche expects to submit data from the Phase III study for approval in 2020.

The remaining 2 disclosed targets are firstly, Bristol-Myers' nivolumab where a Phase I study is planned to begin in the third quarter. And secondly, Alexion's ALXN1210, where a Phase I study is planned for the second half of this year.

Now I'll turn to the 3 undisclosed targets to complete those initial 7 targets we discussed. These development programs include: Lilly's investigational target, which began a Phase I study in 2017; a new unnamed Roche target, which began clinical testing earlier this year; and another unnamed target, which is expected to enter the clinic later this year. Each of these programs is also progressing to plan. We're really delighted with the acceleration in the number of products planned for development, with all 7 of these new potential products expected to be in clinical testing by the end of 2018.

And now we have some additional good news. During the first half of the year, we worked closely with Bristol-Myers Squibb to support additional development target. As a result, we now have line of sight to studies for 2 new targets to start in 2018 that were not in our original projection. In the first study, Bristol-Myers will be evaluating their investigational anti-CD73 antibody in a Phase I study to begin in the third quarter of this year. The second study, which is also planned to begin in the third quarter, will evaluate a currently undisclosed target.

Our partners' continued progress, swiftly moving into and through the clinic is testament to the opportunity for strong competitive differentiation with ENHANZE, and I look forward to sharing additional information and updates around these programs in the coming months. To close in ENHANZE, interest in new collaboration agreements remained strong. I have confidence we will continue to secure additional partnerships, as companies look for competitive differentiation and the potential to reduce the treatment burden for patients. While the timing of new agreements is always unpredictable, we're very excited by the potential these new agreements can represent.

I'll turn now to our oncology pillar and our investigational drug PEGPH20. PEGPH20 is a targeted therapy that temporally degrades hyaluronan or HA that can accumulate around certain tumors and constrict the tumor vasculature. We're studying PEGPH20 with a companion diagnostics developed with our partner, Ventana, to identify patients with HA-high tumors. And we project an approximately $1 billion potential global opportunity in pancreas cancer alone.

On Slide 4 is an overview of our Phase III study, HALO-301, which is evaluating PEGPH20 in combination with ABRAXANE and gemcitabine in first-line pancreas cancer patients. Screening and enrollment for the study are on target, and we project enrollment of approximately 500 patients by year-end.

HALO-301 has 2 primary endpoints, progression-free survival and overall survival. Recall, an interim analysis is planned for our first primary endpoint, progression-free survival, when we achieve the target number of PFS events. We continue to predict this will occur between December of 2018 and February of 2019.

Upon achieving the target number of PFS events, the next step will be final data collection and database cleaning and lock. The independent data monitoring committee will conduct the interim analysis. At that time, if the progression-free survival data show a significant benefit in the PEGPH20 treatment arm and both the overall survival and overall risk benefit are supported, these data may form the basis for a marketing application in the United States and a conditional marketing authorization in Europe.

Now there's a second ongoing study evaluating the combination of PEGPH20 plus ABRAXANE and gemcitabine in first-line metastatic pancreas cancer patients. This is an investigator-sponsored trial, which is being conducted by Dr. Kenneth Yu at the Memorial Sloan Kettering Cancer Center. This study is a single-arm study, which examines the use also of the oral anticoagulant, rivaroxaban, in place of using low-molecular-weight heparin injection. Data from the first part of Dr. Yu's study were presented at ASCO GI earlier this year and included 28 patients irrespective of HA status. Results showed a 67% overall response rate and no cases of (inaudible). Dr. Yu will report updated data, including data on additional patients who have been enrolled. The data will show the strong overall response rate was maintained. A retrospective efficacy analysis based on patient HA status will also be conducted. With this encouraging data, we are continuing to assess the feasibility of, and the path to, achieving future regulatory labelings for the use of rivaroxaban with PEGPH20.

Now let's turn to Slide 5 and an update on our evaluation of PEGPH20 in other tumor types. Data from the Phase I portion of our clinical collaboration with Eisai, evaluating PEGPH20 plus eribulin have also been accepted for presentation at the 2018 ESMO Congress. The addition of PEGPH20 to eribulin showed an overall response rate of 36% in the single-arm trial. Now what's important is that this is double the response rate reported with single-agent eribulin in prior studies of patients with HER2-negative metastatic breast cancer. This is our first demonstration of PEGPH20's positive effect outside of pancreas cancer.

Moving now to our trials in combination with checkpoint inhibitors, I'll focus firstly on our study evaluating PEGPH20 plus KEYTRUDA, or pembrolizumab, in non-small cell lung cancer and gastric cancer. In the non-small cell lung cancer cohort, we're evaluating PEGPH20 plus KEYTRUDA monotherapy in second-line and later-stage patients who have not previously been treated with any new checkpoint inhibitor. In June, we announced the early closing of enrollment in this cohort, and this was in anticipation of a change in the standard of care resulting from the recent reported studies of KEYTRUDA plus chemotherapy in frontline patients. Prior to closing enrollment, the total -- a total of 17 of the target's 30 patients were enrolled in the expansion cohort. And while there is still 3 patients on treatment, I'm comfortable providing a brief update today. Of the 13 currently evaluable patients, 4 patients experienced a more than 30% reduction in tumor volume, as assessed by the investigator site. Two of these patients had a further scan confirming that the 30% reduction was maintained. Of the 4 patients who experienced the more than 30% reduction, 3 were PD-L1 negative, while data on -- is unavailable at the moment for the fourth. Now acknowledging the small sample size, the reduction in tumor size in 4 patients, of whom 3 were PD-L1 negative, is certainly intriguing. And we're now working with investigators and advisers to understand how to further evaluate PEGPH20 in non-small cell lung cancer, given the highly competitive and dynamic environment.

Turning to the gastric cancer cohort. Earlier this year, we reached enrollment of 34 patients. Three patients remain ongoing in the trial, and PD-L1 testing has not yet been completed. Of the current 26 evaluable patients, to-date, we've seen one responder who has PD-L1-positive status. The response rate does not meet our threshold to continue development of PEGPH20 in combination with KEYTRUDA alone in gastric cancer.

Regarding our collaboration studies with Roche. We continue to make progress in the evaluation of PEGPH20 and atezolizumab in pancreas, gastric and gallbladder cancers as well as in cholangiocarcinoma. In particular, we're making good progress in the dose escalation portion of the Halozyme life study in cholangiocarcinoma and gallbladder cancer. If all continues well, we would expect to begin dose-expansion portion of the study later this year, and we will there evaluate efficacy parameters.

So in summary, we've seen encouraging efficacy results in our combination studies of PEGPH20 plus chemotherapy in pancreas and in breast cancer, an intriguing data in PD-L1-negative non-small cell lung cancer. We look forward to the presentation of the new data in pancreas and breast cancer at ESMO in October.

And finally, I'd like to highlight a recent development in the Halozyme intellectual property portfolio. In March, the U.S. Patent and Trademark Office granted Halozyme a patent covering the combination of PEGPH20, ABRAXANE and gemcitabine. This is the combination being studied in our HALO-301 registration trial in pancreas cancer. Following this action, Halozyme has obtained exclusive rights to the claimed combination through March of 2033, which is subject the potential for patent term extension that may further prolong the exclusivity period. And this same application is pending or has been issued in multiple countries outside the United States.

With that update, it's my pleasure now turn the call over to Laurie, who will discuss our financial results in greater detail. Laurie?

Thank you, Helen. I will begin on Slide 6, where you will see that revenue for the second quarter was $35.2 million compared to $33.7 million in the prior year period. Royalty revenue totaled $20 million, an increase of 36% on an as-reported basis from the second quarter of 2017, primarily driven by sales of ENHANZE products outside the U.S., with Herceptin SC continuing to be the largest contributor. We remain encouraged by recent comments from Roche on their Q2 earnings call, indicating the subcutaneous formulations of Rituxan and Herceptin have proven to be durable and despite the impact of biosimilars to the IV version of MabThera in Europe, MabThera SC has maintained market share.

Moving down the income statement. Bulk sales of rHuPH20 and ENHANZE drug product totaled $0.7 million compared to $8.9 million in the prior year period. This reduction is the result of the planned decline in API product orders we previously reported as our partners continue their manufacturing transition.

Hylenex product sales totaled $3.8 million, and collaboration revenue totaled $10.7 million, including the recognition of two $5 million milestones from our ENHANZE partners. Prior to the adoption of FASB Topic 606, we typically recognize clinical milestone payments upon the achievement of the underlying event, such as the dosing of the first patient in a study. Under the new accounting standard, we are required to recognize revenue associated to a given milestone, if a high likelihood for achieving that milestone exists. As a result, we are recognizing a total of $10 million of milestone revenue in the second quarter in connection with the upcoming initiation of Bristol-Myers Squibb's Phase I study of CD73 target with ENHANZE and the Alexion Phase I study of ALXN1210 with ENHANZE.

Moving to Slide 7. Starting last quarter, we implemented a new process related to FASB Topic 606 for how we record royalty revenue. Prior to January, we recognize royalty revenue 1 quarter in arrears due to the timing difference between our financial close and when we receive royalty reports from our partners. Under the new guidance, we now estimate royalty revenue for the current reporting quarter and will true-up this estimate to actuals in the subsequent period when the royalty reports are received. To assist in this transition, 2 comparisons are shown on the slide. The first table shows reported royalties for the quarter, which is our estimate of $20 million, an increase of 36% from the $14.7 million in royalty revenue we reported for the second quarter of 2017. And the second table compares our Q2 estimate of $20 million to the actual royalties we received in the prior year of $17.1 million, which were recorded in Q3 of 2017 under the prior methodology. This adjusted view shows growth of 17%.

To close on royalties, our estimate for the second quarter royalty revenue was negatively impacted by the strength of the U.S. dollar, which we calculated to be approximately $0.9 million. Adjusted for that impact, Q2 royalties were sequentially flat to the $20.9 million we reported in Q1. From a year-on-year perspective, foreign exchange did not have an impact to the as-reported royalty growth of 36% from Q2 2017.

Turning to Slide 8 for a more detailed breakdown of our P&L. Total operating expenses were $55.3 million. Cost of product sales was $0.8 million in the quarter compared to $7.8 million in the prior year period, driven by lower API product orders. Research and development expenses for the quarter were $40.1 million compared to $38.3 million in the second quarter of 2017. Selling, general and administrative expenses were $14.4 million compared to $13.1 million in the prior year period. Net loss for the quarter was $22.9 million or $0.16 per share compared to a net loss of $30.8 million or $0.23 per share in the second quarter of 2017. And cash, cash equivalents and marketable securities were $398.9 million at June 30, 2018, compared to $297.5 million at June 30, 2017.

Finally, I would like to update our revenue and year-end cash guidance and reiterate our other 2018 guidance ranges, as shown on Slide 9. For the full year 2018, we now expect net revenue increasing from the prior range of $115 million to $125 million to $125 million to $135 million, driven by ENHANZE milestones not contemplated in our guidance from the beginning of the year. Within the revenue line, we are maintaining our forecast for royalty growth of 25% to 30%. In addition, we continue to forecast a decline in API product orders, as our partners continue in their manufacturing transition and currently have sufficient API and safety stocks to support their near-term plans. For modeling purposes, we expect third quarter of 2018 to be consistent with Q2 and for API sales to begin to rebound by the end of the year.

We continue to expect operating expenses for 2018 of $230 million to $240 million, flat to both 2017 and 2016; operating cash burn of $75 million to $85 million; debt repayment of approximately $95 million, which includes principal and interest payments related to our royalty-backed and SVB/Oxford loans; and we are increasing our year-end cash balance from the prior range of $305 million to $315 million to a new range of $310 million to $320 million. This increase is driven by the ENHANZE milestones revenue partially offset by a modest build in rHuPH20 inventory in anticipation of future partner demand.

And with that, let me turn the call back to Helen, who will provide closing comments.

Thank you, Laurie. In summary, you've just heard, we executed well in the first half of 2018 and are poised to continue to generate value across the ENHANZE and PEGPH20 pillars in the second half of the year. Highlights for ENHANZE include royalties increasing 36% year-on-year on a reported basis, strong progress being made with the 3 currently marketed products and across the 7 development-stage products, supporting our projection for the potential $1 billion in royalty revenue in 2027. And 2 new targets plan to enter clinical testing in 2018 that were not in our initial projections from January. And in our oncology pillar, HALO-301 execution remained strong, with the target number of PFS events projected between December of 2018 and February 2019. And additional data in pancreas and breast cancer data are to be presented at ESMO of 2018.

Recall, I spoke in January about the $1 billion potential for each of our pillars. As you can see, our execution throughout the first half of 2018 has reinforced and derisked these projections. And I want to close by expressing my ongoing gratitude and appreciation to the talented Halozyme team for their continued hard work as we advance our programs and support partners and patients.

We're now ready to take your questions. Operator, please, would you open the call?

(Operator Instructions) Our first question comes from Gena Wang with Barclays.

This is actually Xiaobin Gao in for Gina. Maybe just to start, could you please share with us about the conversion rate of the subcu versions for the launch product, especially like Herceptin, Rituxan and HYQVIA?

Yes, let me ask Laurie to address that.

Yes, thanks for that question. As you know, we are limited to what we can say, but -- based on what our partners have said. But what I can say, what I can point to is some recent comments from Roche that the Herceptin SC conversion outside the U.S. is about 60%. And of course, that is a number of years since program launch. Unfortunately, they haven't commented on the MabThera outside the U.S. conversion in a couple of years since 2016. But in 2016, they did say that, that had converted about 34% of the market. So again, the most near-term data point I have is that 60% Herceptin outside the U.S.

And just to add, for RITUXAN HYCELA, Roche hasn't provided any details. But as I mentioned in the prepared remarks, they did provide us an update of seeing more clinics beginning the conversion. The conversion continuing in clinics, and they're supporting the launch now with some exciting direct-to-patient activities as well.

Got it. Maybe just a quick question on the financials. So for the Phase I initiation of your partner program, should we continue to see -- expect like roughly $5 million milestones?

Yes, that's a great question. This is Laurie. All of our partner agreements are slightly different. And so while many have Phase I milestones, not all of our study starts will have a Phase I milestone associated with it. Again, our most recent partnered -- partners have $160 million in milestones per target. But again, the amount and timing of those targets is different depending on the partner and the studies they're starting.

Our next question will come from Joel Beatty with Citi.

The first one is on the ENHANZE platform and the several undisclosed assets. Could you, just at a high level, explain, based on the current phase that they're at, what's the likelihood of those agents moving on to become -- named to late-stage assets later on in their development?

Thanks, Joel. It's certainly our hope and our expectation that majority of these products, if not all, will move forward into full development. We've most often seen that ENHANZE is able to very effectively change IV drugs to subcutaneous. So it's my expectation that baring an expected technical difficulty, once we get the Phase I data, which is generally done to help pick the dose, these products will all move into Phase III clinical testing and ultimately, approval.

Great. And then one other question related to PEGPH20 and the combination with KEYTRUDA. I think I heard you mention earlier in the call that it seems like the response rate for non-small cell lung cancer seemed to be higher than the response for gastric cancer. Do you happen to have any hypothesis on why this might have been the case?

Yes, let me ask Dimitrios for that question.

Sure, sure. Thank you very much. You're right, the response rate or the initial response rate in lung cancer appear higher to be in gastric cancer. Now there might be a variety of reasons. One reason certainly is that based on emerging data, we saw with other checkpoint inhibitors in the gastric cancer disease that gastric cancer is not a very immune-sensitive tumor type and that might be the most prominent explanation for these results.

Our next question comes from Jessica Fye with JPMorgan.

This is Daniel for Jessica. For PEGPH20, could you provide us with an update on how you're thinking about developing and commercializing this asset?

Yes. Thank you, Daniel. We, as you know, retain the global rights to PEGPH20. And as we are preparing for the upcoming data read, we've initiated planning for commercial launch in both the U.S. and key European markets because that is prudent to do at this stage we are at. We certainly will continue to evaluate European environment to determine going alone versus a partner. But at this point in time, we are preparing and will be fully ready to launch on our own in U.S. and top European markets.

Got it. If I could follow up. For the data for the KEYTRUDA combo, besides response rate, what are -- what should we expect at the data presentation?

Yes, Daniel. I'm sorry, you cut out a little bit. Sorry, which data?

For the KEYTRUDA combo study?

Right. So we are -- as we mentioned during the prepared remarks, the study is still ongoing. So what we've been planning to do is continue to collect the data on the 3 ongoing patients in each cohort of this study. Once we have that, we will submit this to a scientific meeting, which is likely to occur now in 2019. And of course, that time, we would report all of the data, including the standard parameters like the response rate, PFS and OS in the single-arm study. But giving the response rates today, I think, really gives you a good color and picture that we're seeing something intriguing in the PD-L1-negative patients with non-small cell lung cancer, and we obviously didn't see the response that we were looking for in gastric cancer.

Next, we have a question from Jason Butler with JMP Securities.

It's Roy in for Jason. I have kind of a similar question about the data at ESMO for the eribulin combo in breast cancer. I think, you shared with us, other than doubling the [OR], why you're excited about it. I kind of thought that program was on hold and just like to hear more about why you're excited about breast cancer in PEGPH20.

Let begin that and we'll see if Dimitrios has anything to add. What we're excited is that this 36% response rate reported is double anything the eribulin single agent has ever been able to see. So clearly, that sends a very encouraging signal for us for what we might be reporting in progression-free survival and other parameters at ESMO. Because this is going to be presented at a major scientific forum and because some of the analysis is still ongoing, we're not in a position today to give any additional data, but we certainly, and speaking with our advisers, people are certainly highly encouraged by this response rate. What we're doing is talking to our advisers about whether we -- the path forward to further study PEGPH20 in breast cancer. Key things that we always want to consider are, what is the future competitive environment going to be like? What is the future standard of care? And it what is the size of the opportunity? So while we're analyzing the data, those discussions are ongoing. So it's a -- when we finish that assessment, we'll be in a position to talk about how we see future development in breast cancer. Dimitrios, anything to add to that?

No, I think you've captured it comprehensively, Helen.

Okay. Do you think we'll have a comprehensive update at the same time as ESMO or possibly after?

I think possibly after. But I think you'll get the efficacy data that is available at ESMO. But I do imagine this taking in context wanting to make sure we're looking at all of the changes in the landscape, we'll be continuing to assess that certainly through the ESMO Congress.

(Operator Instructions) Our next question will come from Jim Birchenough with Wells Fargo.

I guess a couple questions. On PEGPH20 -- Helen, can you hear me?

Yes, yes, we can, Jim.

So just on PEGPH20 and further investment in breast cancer and PD-1 combinations and I guess, overall, broader investment. How will the 301 study results inform that investment? I guess, what I'm looking for is, if it turns out that the Phase II data in pancreatic cancer weren't predictive of Phase III success, does set a much higher bar for advancing PEGPH20 in other cancers? And I guess, the opposite as well, if you have a positive 301 results, does that accelerate the investment in other cancers?

Yes. Thanks, Jim. I think it's fair to say that, we are setting a high bar based on the Phase III data for PEGPH20 in pancreas cancer. Now as we're awaiting that data, what we are planning to do is to assess the opportunity and assess what the next steps would be to advance PEGPH20 in different tumors. And I do anticipate that's going to take a number of months. And coincidently, I think the timing of all these decisions is very likely to be sometime in the early 2019 in parallel when we get the pancreas cancer data. So just by terms of our planning, we're going to likely be making those decisions all around the same time.

Okay. And then maybe just on the ENHANZE side, Helen. I might have missed it. But when you're talking about what's underlying your $1 billion 2027 royalty target, did that include all 8 programs going to the clinic this year? Or there were -- was there something carved out that was unexpected that would add to that peak or that 2027 revenue projection?

Yes. Great question. It's based on the 3 marketed products and 7 of the programs that are in development that we have line of sight to at the beginning of this year, Jim. So on the call, announced that Bristol-Myers Squibb is actually moving not just 1 product into the clinic this year, but 3. These last 2 products were unexpected at the start of the year. And so those were not in the original $1 billion projection. So it's 3 marketed products and 7 of the development products that make up the $1 billion. And I think it's nicely illustrated on Slide 3, where you can see at the bottom, those are the 2 undisclosed targets that weren't included in the original $1 billion forecast.

And can you remind us, Helen, of if you look at all the collaboration ENHANZE programs, how many there are left to be identified and what the mix is between marketed products and development-stage candidates?

So Jim, making sure I understand your question. Of our current partners, how many have targets that they haven't selected yet?

Okay. So they have -- yes, I guess, I'm trying to get a sense of what the pipeline may be feeding in subsequently 2019 and 2020 in terms of targets. How many targets in aggregate are out there? And if you think the cadence of programs you've seen this year can continue in subsequent years, based on the pipeline?

All right. Just to -- I'll use a couple to illustrate it. Alexion is a good example, they picked 4 targets. They've only taken one of the targets in terms of what they have disclosed. So certainly there's 3 additional targets and Alexion is certainly very enthusiastic to continue develop new subcu formulations. From Bristol, they picked 11 targets. You're seeing them move very quickly into the clinic with 3 targets. They have 8 other ones. I wouldn't be surprised if they continue to do that because this is a part of their immuno-oncology strategy. So just speaking of those companies, we've got 3 plus 8, that's 11 more. And within the other partners, there are some other targets that are -- there -- I know companies are thinking of potentially moving in. So multiple opportunities in our current partners. But don't forget, we've got the potential for new agreements. And so as we mentioned on the call, we continue an active dialogue with a number of partners. And I do expect that we're going to see more partners sign up and move products into the clinic as well. So I'm excited about this continued momentum that really began in 2017 and it's going to continue in 2019 with more products in and making progress through the clinic.

Our next question will come from Eun Yang with Jefferies.

In terms of partnership update, and you provided update on Roche, Bristol and Alexion, how about other partners such as Pfizer, AbbVie and Lilly, is there any update to be provided?

Yes. I can say with Pfizer and with AbbVie, we have no active programs in the clinic with them. But we continue in a very active dialogue, as they consider and evaluate their portfolio to identify if there's any more products they want to move into the clinic. And Lilly, as you know, already has a product that is in Phase I testing, that was the study that started in 2017. And once again, we continue in a very active dialogue of -- about potential other targets as well.

How about Pfizer?

Pfizer. Pfizer, I'm -- I covered at the start that Pfizer don't have any products actively in the clinic at the moment. We do continue in dialogue with them to identify if there's anything in their portfolio that would be suitable for taking IV to subcu. So perhaps, more to come in that at a later date. But for AbbVie and for Pfizer, later, maybe for the future.

And then you mentioned U.S. patent issuance of PEGPH20, ABRAXANE and gemcitabine. Is there a method of...

(technical difficulty)

Thank you. And there are currently no further questions in queue at this time.

All right. With that, I'd really thank everybody for your attention and your questions. We look forward to seeing many of you at the upcoming conferences. Laurie is going to be at the Canaccord Genuity conference later this week, and I'll be at Wells Fargo and the Citi conferences in September. Have a good evening, everybody. Thank you.

Thank you, ladies and gentlemen. This concludes today's conference, and you may now disconnect.