Halozyme Therapeutics Inc (HALO) 2010 Q3 法說會逐字稿

Greetings, and welcome to the Halozyme Therapeutics third quarter 2010 financial results.

(Operator instructions.)

As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Mr. Robert Uhl, Senior Director, Investor Relations for Halozyme Therapeutics. Thank you, Mr. Uhl. You may begin.

Thank you, Latonya, and thanks also to everyone for participating in today's call.

I'm Robert Uhl, Senior Director of Investor Relations at Halozyme. Joining me on the call today from Halozyme are Jonathan Lim, President and Chief Executive Officer, and Kurt Gustafson, Chief Financial Officer. Additional members of the Halozyme management team will also be available to address your questions during the Q&A portion of the call.

This morning, Halozyme released 2010 third quarter financial results. If you have not received this news release or if you would like to be added to the Company's distribution list, please send an email to me at this address, ruhl@halozyme.com. This call is also being webcast live over the Internet at www.halozyme.com, and a replay will be available on the Company's website for the next seven days.

Before we begin, let me remind you that during this conference call we will be making forward-looking statements. The Private Securities Litigation Reform Act of 1995 provides a Safe Harbor for forward-looking statements. All statements made during this call that are not statements of historical fact constitute forward-looking statements. The matters referred to in forward-looking statements could be affected by the risks and uncertainties of Halozyme's business, both known and unknown. Such risks inherent in the Company's business are described in our filings with the Securities and Exchange Commission as well as in our news releases. The Company's actual results may differ materially from those expressed in or indicated by such forward-looking statements.

With that, I would like to turn the call over to Jonathan Lim, Halozyme's President and CEO.

Thank you, Robert. Good morning, everyone, and thank you for joining us on the call.

I'm going to provide an update on the status of our key proprietary product development programs and our three alliance programs with Roche and Baxter. Also on the call today Kurt Gustafson, our CFO, will provide the highlights of our financial results for the quarter.

I will start off by bringing you up to date on Halozyme's Ultrafast Insulin program. During the third quarter Halozyme's Ultrafast Insulin program took another significant step forward with the start of two Phase 2 treatment studies, one in type 1 diabetes patients and the other in patients with type 2 diabetes. Each study will compare Aspart-PH20 and Lispro-PH20 with an active comparator, Lispro alone. As a reminder, Aspart is the generic name for NovoLog and Lispro is the generic name for Humalog.

Endpoints in these trials will be medical benefits such as improved glycemic control or A1C, reduced hypoglycemia and reduced weight gain. We expect these studies to be completed roughly one year after initial patient enrollment and dosing, which should be during the third quarter of 2011. At that point we will have data from at least nine Ultrafast Insulin clinical trials. The results from these studies are driving the value of the program, and we continue to provide periodic updates to potential partners as new information becomes available. Our clinical development program is designed to provide information regarding key product attributes that we as well as a potential partner would want to know.

The primary goal for our Ultrafast Insulin program is to develop a best-in-class mealtime insulin product compared to the currently prescribed analog products that participate in the growing $3.8 billion prandial or mealtime insulin market. With Halozyme's more rapidly absorbed, faster acting insulin product, we seek to demonstrate one or more significant improvements relative to existing treatment, such as improved glycemic control, less hypoglycemia and less weight gain.

At the Diabetes Technology Society meeting in Bethesda this coming November 12, we'll be presenting the results from our first Phase 2 treatment study that employed a two-way crossover design in patients with type 1 diabetes. This clinical trial compares regular human insulin plus PH20 to insulin analog alone, used as the mealtime insulin. Our previous pharmacokinetic or PK studies have shown that adding rHuPH20 to regular insulin makes the combination as fast as the mealtime insulin analogs used today.

After a one-month dose stabilization period, patients were randomized to 12 weeks of treatment with their first study drug, after which they crossed over to the other study drug for an additional 12 weeks of treatment. This study provides important safety information with respect to three times a day chronic dosing for our PH20 enzyme over a 12-week period.

Now let's switch to our PEG PH20 program and its potential in the treatment of solid tumors. We have recently presented interim data from our PEG PH20 program at the ASCO-NCI-EORTC Annual Meeting on Molecular Markers in Cancer, which was held in Hollywood, Florida on October 18 to 20. As a reminder, we recently initiated a second Phase 1 clinical trial for PEG PH20. Patients with advanced cancer enrolled in this study received intravenous PEG PH20 plus pretreatment with oral dexamethasone.

Tests that Halozyme has conducted in animal models support the use of dexamethasone to achieve higher and more intensive dosing regimens of PEG PH20. Data included in our recent poster presentation at the Molecular Markers meeting demonstrated that the addition of dexamethasone does not impair the ability of PEG PH20 to remove tumor hyaluronan, or HA, or change its effects on tumor growth inhibition. In addition, the preliminary human data indicate that dexamethasone may ameliorate the noninflammatory musculoskeletal pain observed in some patients dosed with PEG PH20 without dexamethasone.

Our two ongoing parallel Phase 1 clinical trials are collectively designed to identify recommended doses for Phase 2 trials from twice weekly, weekly and every third week dosing of PEG PH20 with and without concomitant dexamethasone administration. These data will be useful in future trials with PEG PH20 as a single agent and in combination with other chemotherapeutics. Based upon the evolving data, we are in the planning stages to conduct a Phase 2 clinical trial with PEG PH20 in pancreatic cancer that we expect to begin in mid 2011.

To remind you, many solid tumors, including breast, prostate, pancreas, gastric and lung accumulate the extracellular matrix polysaccharide known as hyaluronan that protects the tumor from anticancer therapy. PEG PH20, which is a pegylated version of Halozyme's proprietary rHuPH20 enzyme designed for systemic administration, remodels the tumor stroma of HA-producing solid tumors, making these tumors more susceptible to anticancer treatment.

Roughly 20% to 30% of solid tumors accumulate HA. In the case of pancreatic cancer, we have found that the majority of these tumors accumulate HA, which is why we are interested in moving forward with the initiation of a Phase 2 trial in pancreatic cancer. PEG PH20 represents an entirely new therapeutic approach against cancer.

So I'm now going to switch gears to HTI-501, which is our first conditionally active recombinant human cathepsin enzyme that degrades collagen. There are numerous collagen-based conditions such as keloids, hypertrophic scars and cellulite that are inadequately served by existing treatments and where a product such as HTI-501 may prove useful. We now have the ability to produce the enzyme in high-expression cell banks and have manufactured HTI-501 at clinical scale. We are moving forward to conduct a proof-of-concept clinical trial ex-US in cellulite beginning in the third quarter of 2011. We will update you with additional information about the program as we get closer to the start of this study.

Now let's move over to our partnership alliance activities with Baxter and Roche.

I'll begin with HYLENEX. Halozyme licensed marketing rights for HYLENEX to Baxter, and they launched the product in October 2009 for use in pediatric rehydration. In May of this year Halozyme initiated a voluntary recall of HYLENEX due to the presence of particles in a small number of vials that were discovered during a routine stability inspection. Since the recall, Halozyme has been working to identify the root cause and to develop a corrective action plan, with a goal of returning HYLENEX to the marketplace. We have submitted the findings of our investigation along with our reintroduction plans to the FDA and look forward to future discussions with the agency. After those discussions have taken place, we'll have a better sense for the timing of a potential product reintroduction.

The product candidate under development with Baxter's BioScience group, which we previously referred to as Gammagard SC, is now being referred to as HyQ. HyQ consists of immunoglobulin plus our rHuPH20 enzyme, and it can be administered subcutaneously instead of intravenously. The pivotal Phase 3 clinical trial for HyQ in the treatment of primary immunodeficiency disorder, or PID, will be completed during the fourth quarter of this year. Top-line results should be available after completion of this study, and Baxter has stated at recent investor meetings that it expects to file its BLA during 2011.

The goal of the HyQ development program is a once every three to four weekly subcutaneous product offering to be administered through a single injection site. Such a product would allow patients the convenience of self-administration in the home setting and more freedom and flexibility in the decision of when to administer their treatment. HyQ will have advantages compared to currently available subcutaneous immunoglobulin products that must be dosed once a week through multiple needles and at higher doses to compensate for their lower bioavailability. The annual global immunoglobulin market is approaching nearly $6 billion.

In early October, Baxter presented some interim results at the European Society for Immunodeficiencies, or ESID, meeting, from its ongoing Phase 3 trial in PID. The interim analyses showed that 28 out of 29 patients were able to infuse their HyQ under the skin using a single injection site at infusion volumes, intervals and rates equivalent to their previous IV administration regimen. On the basis of these encouraging interim results, we look forward to completion of the trial and the full data set that includes approximately 80 patients.

The Halozyme/Roche alliance is also making steady progress. The Phase 3 registration trial for a subcutaneous formulation of Herceptin with rHuPH20 in the treatment of HER2-positive breast cancer, which began in October 2009, continues to enroll patients. Roche started a Phase 1 clinical trial last September 2009 with a subQ formulation of MabThera that also incorporates our rHuPH20 enzyme. MabThera, or rituximab, is approved for the treatment of non-Hodgkin's lymphoma. The Phase 3 study for MabThera SC is expected to be underway by the end of this year and has been posted on clintrials.gov but is not yet open for participant enrollment. The combined worldwide sales for these two products, Herceptin and MabThera, totaled approximately $11 billion in 2009.

Roche also announced early this year its development of a ready-to-use device that would be capable of administering Herceptin subcutaneously in less than five minutes. Treatment with Herceptin usually involves an inconvenient and time-consuming 30- to 90-minute IV infusion at the hospital or a specialized treatment facility. SubQ administration of Herceptin and PH20 with a proprietary device holds the promise of a five-minute administration, which could be a significant time saver for patients. Instead of that long IV infusion and the medical resources that it involves, patients will be able to choose the convenience of a prefilled device to deliver their Herceptin treatment subcutaneously. Use of the device would not require any mixing or reconstitution of the drug by a pharmacist, which represents a potential savings of healthcare resources.

We have seen numerous clinical advancements for the Halozyme/Roche alliance during the past two years, beginning with initiation of a Phase 1 Herceptin SC trial in December 2008. We continue to anticipate additional clinical progress for the partnership.

These are the latest updates on our proprietary product programs and our development partnerships.

Before I hand the call over to Kurt, I'd like to describe two important changes we have made recently at Halozyme.

The first is the implementation of a strategic alignment of our resources to concentrate on advancing our core proprietary programs through key clinical inflection points during the next two years. We will also be continuing to fully support our alliance partnerships with Baxter and Roche to ensure successful launches of their near-term products, including Herceptin SC, MabThera SC, HyQ and HYLENEX.

In line with this change, we reduced our basic research efforts relating to the discovery and preclinical work associated with new compounds. This strategy resulted in a reduction in the work force of approximately 25%. This was a difficult decision for Halozyme, but we believe it is in the best interests of all our shareholders to concentrate our resources in this manner, and it strengthens our economic position.

We have also made a change in our business development management team with the hiring of Bill Daly as VP of Business Development. Bill has broad BD experience and has held a number of positions where he screened, evaluated, conducted the due diligence and consummated corporate transactions with approximately $10 billion in aggregate deal value at such companies as Cougar Biotechnology, Allergan, Chiron and Novartis. He has also fulfilled a similar role with several start-up biotech companies and has expertise in the negotiation of deal structures and in the integration and management of partnerships and alliances. I'm pleased to have Bill onboard and look forward to working with him.

Now I'll hand the call over to Kurt Gustafson for his financial commentary.

Thank you, Jonathan, and good morning, everyone.

The net loss for the third quarter of 2010 was $12.4 million, or $0.13 per share, compared with a net loss for the third quarter of 2009 of $13.9 million or $0.16 a share.

Revenue for the third quarter of 2010 was $3.4 million, compared with $3 million for the third quarter of 2009. Most of this revenue is reimbursement revenue for work that we do for Roche and Baxter that's reimbursed under our agreements.

Research and development expenses for the third quarter of 2010 were $12.4 million, compared with $13.2 million for the third quarter of 2009. This decrease is primarily due to lower clinical trial expenses related to the Ultrafast Insulin program. However, these costs will ramp up again in the fourth quarter as the insulin treatment study continues to enroll more patients.

SG&A costs for the third quarter of 2010 were $3.4 million, compared to $3.7 million last year.

We ended the third quarter with a cash balance of approximately $90 million, and our net cash burn for the third quarter of 2010 was $11.4 million, which brings our net cash burn for the first nine months of the year to $38 million.

I was pleased that Halozyme received four awards under the Qualifying Therapeutic Discovery Project Tax Credit process totaling close to $1 million. All of this cash is expected to be paid in 2010. This is a government program designed for companies with less than 250 employees to submit grant applications for various research projects. Halozyme submitted four applications, and I was pleased to receive notice earlier this week that we had received approval for all four of our submissions.

So we have an update to our operating expense guidance. For 2010, we now expect that total operating expenses will be $3 million to $5 million less than those reported for 2009, which were approximately $72 million. Excluding the proceeds from the financing, we remain comfortable with our full-year net cash burn guidance of $40 million to $45 million.

And with that, I'll turn the call back over to Jonathan.

Thank you, Kurt.

I'm pleased with the progress Halozyme continues to make in advancing both our proprietary programs and our partnerships. And with that overview let's open it up for questions.

Operator?

Thank you.

(Operator instructions.)

Our first question comes from Andrew Vaino, with Roth Capital Partners. Please proceed with your question.

All right, thanks for taking the question. You mentioned musculoskeletal pain associated with the PEG PH20. Is it possible to elaborate on that, for example, the incidence and severity?

Hi, Andrew. It's Greg Frost here. So very specifically, the musculoskeletal discomfort that was observed in the first few patients on trial without dexamethasone was associated from the standpoint of onset within the first 24 hours and resolved within seven days. But, very importantly, this was not associated with any increase in inflammatory markers in circulation or any signs of muscle damage, and this is consistent with what was seen in animal models, as well, that there's no histologic findings in such tissues.

So from that context going through the rationale on dexamethasone, while still, I think, the exact mechanism of action by which it is protective is undefined, is something that we feel quite good about that we have I think targeted that specific pharmacologic-based toxicity that should allow us to go through and reach higher doses more rapidly.

Okay. Is there any possibility that this pain is associated at all with cartilage degradation?

We don't believe so at all, under two reasons. One of them is the absence of any histologic findings based on articular surfaces that were examined, and, secondly, from the standpoint of location and the fact that it appears to be more directly related to muscle itself and muscle contraction.

Okay. And then just a quick financial question, I'm just looking at your guidance of a $45 million net burn for the year. You guys have been burning about $12 million a quarter so far. So to get to $12 million you've got to cut fairly severely, by about 40%. Is that, you think, still doable? Is that going to be mostly out of R&D, I assume?

Yes, you know, Andrew, I think if you take a look at the guidance on both OpEx that we've provided and where we were for the first three quarters and where we have to be for the fourth quarter, I'm not sure that the delta that you're going to be looking at -- well, I'm quite certain the delta you're going to be looking at is not coming from a cut in OpEx. What I would point you to is you have to take into account revenues. We receive reimbursement revenues for some of our operating expenses when we do work for partners. We may also receive revenues based on milestone payments.

And remember that a portion of our OpEx is noncash. We'll also receive cash from other sources that don't hit the P&L, things like maintenance payments or exercises of employee stock options. And don't forget we also see changes in our working capital requirements that impact the cash. So we're not looking at a cut in OpEx as we go into Q4. In fact, if you take a look at the guidance it would actually point you to an increase in OpEx in Q4. So it's going to be other factors that are driving that difference.

Okay. Thank you.

Our next question comes from David Moskowitz, with Madison Williams. Please proceed with your question.

Thanks. Just continuing on with that question, I actually was looking at it from the revenue side. It looks like you fell a little bit short of expectations this quarter, I'm sorry, in 3Q, because of the revenue side. So we had advancement of Rituxan. And so I'm just wondering, when do you book that milestone? And, well, I guess that would be considered in, I think, the calculation that you're going through, Kurt. And then I guess the other part of that question is once you book that is there any other milestone revenue that you expect could come in before year end that hasn't been announced yet?

Yes, so, David, I'll refer kind of to how things work contractually, but probably I'm not going to connect this stuff to the guidance. And so contractually we book milestone revenue when our partners start a clinical trial, so when they dose the first patient. That triggers a milestone payment to us and we'll book the revenue then. I will say in the Roche contract, though, also, that the actual cash payment to us does not occur until 30 days post the dosing of a patient. So I'll give you that language out of the contract, but you can kind of then go do your own math.

Okay, so, number one, I guess, look, I'm just trying to get a model that reflects reality. So is it reasonable -- I mean, I'm going to expect that payment this quarter. I don't know when Roche is dosing the patient and I don't know when the 30 days is from that. So is that a reasonable assumption? And then the other part of the question, again, was is there any other revenue milestone that you might expect to make that burn that hasn't been announced yet?

The only thing that I would say, David, is Roche has indicated to us that they expect to start this trial before the end of the year. If you go look at clintrials.gov it says December. And so 30 days post December might be January from when the cash actually flows.

And the other part of the question, anything else in the revenue assumptions that you guys have that we generally don't have at this point?

We're not providing specific guidance on that.

Okay. Appreciate it. And just one other question, and that is, I'm noticing in the new Phase 2 programs for insulin-PH20, Ultrafast Insulin, you guys have dropped one of the insulin analogs. I believe it's Apidra. Can you explain why you've done that?

Yes, David, we actually added an insulin analog. And so the trial was originally conceived to explore the characteristics of one of the insulin analogs and we added another one. I think what you're referring to is the comprehensive analog study that we conducted in healthy volunteers. That was the six-way crossover. It would be impractical for us to take all three of those forward into a randomized Phase 2, and so we decided to focus on the two market-leading analogs, which are NovoLog and Humalog.

And just following that through a little bit, so, I mean, if we talk about the three manufacturers sitting at the table looking at this as an add-on to their product, there's nothing we should read into, or you don't think that hinders that third competitor, Sanofi, from being at the table if you're not doing further tests with their product?

Yes, I wouldn't read too much into that, David. The data that we get from the crossover study or this Phase 2 TID study will be representative data that any of the incumbents would be interested in.

Excellent. Okay. Thanks for taking my questions.

Sure.

Our next question comes from John Newman, with Oppenheimer Funds. Please proceed with your question.

Hi, guys. Thanks for taking the question. Just had a clarification question on the Phase 3 data for HyQ with Baxter. It seems like Baxter has suggested they could have some data by the end of the year. Seems like you're being a little bit more maybe cautious or realistic that it's probably going to come in early 2011. Just wondering if you could comment on that. And then also in terms of how we should think about potential partnering discussions or acceleration in those discussions, is the Phase 2 study that's running now for your product in diabetes, is that sort of an important piece of those negotiations? Thanks.

Sure. Yes, John, so what Baxter and Halozyme have publicly stated is that the current HyQ Phase 3 study will complete by the end of the year. And so I can confidently say that it would be challenging before the study is completed for Baxter to report data from that trial. Now, they did report interim data at ESID, which was well received. So once they wrap up the trial by year end, then what they've publicly stated is that they hope to present the clinical data from the complete trial in 2011, and we've been guiding people to the first half of next year.

Now, with respect to partnership discussions, business development for insulin is really a function of value over time, and so as we further drive the program forward with the Phase 2 TID study we believe that the value of the program goes up considerably, and so we have said that we're in discussions and have been sharing data with prospective partners as we've gone along with the program, and we'll continue to do that. So it's just a matter of pulling the trigger when we see the value that we're looking for for this program.

Great. And then on the PEG PH20 program, is that a program that you would envision keeping in house at Halozyme or is it something where you just need to wait and evaluate the data and then decide accordingly?

Yes, so it's going to be a data-driven decision. And so we are focusing on three core property programs, including Ultrafast Insulin, PEG PH20 and HTI-501, PEG PH20, because it's targeting solid tumor oncology, oncology is a market that lends itself fairly readily to a potential specialty market type of focus if we were to decide to commercialize in that area. And so that certainly would be a program that we could hang onto a little longer, and, depending on the data, we'll decide whether we want to keep developing it on our own or seek partnership for that.

Great. Thanks.

Sure.

And your next question comes from Ryan Martins, with Barclays Capital. Please proceed with your question.

Good morning. Firstly, just on your HYLENEX update, I was wondering if you could give us some comfort around the fact now that you've completed your root cause analysis that this -- the (inaudible) that you saw were actually related to something that was at Baxter's fill-and-finish facility?

Yes, so what we've publicly stated is that we've completed our root cause analysis. We feel very comfortable that the findings do not relate to the enzyme itself but basically have to do with particles that were found in the HYLENEX-filled vial on routine stability testing. Now, we have put in place a corrective action plan and we've filed that package to FDA. And so we're waiting for FDA's feedback on a meeting, and once we have that meeting then we'll be able to provide better guidance as to the potential timing of reintroduction of the HYLENEX product.

Thanks. And on the safety study for diabetes that you're going to have data for at the Diabetes Technology Society in about a week from now, are we going to see any efficacy related to glucose lowering or pharmacokinetics?

Yes, the main focus of that study, because it was performed with regular insulin with PH20, what we've seen historically with the PK studies that we've done comparing regular insulin with PH20 relative to the analogs is that usually the analogs are much faster than regular insulin. But PH20, when it's added to regular, puts it on an equal performance characteristics from a PK perspective to the analogs. So it boosts the performance of regular so that it's roughly similar to the standard of care. So the focus of the three times a day for three months of treatment with regular plus PH20 is to really assess the PH20 enzyme from a repeat administration or a safety perspective over a three-month period.

Okay. And, finally, just looking ahead to the Gammagard, or I should say HyQ Phase 3 data, just wanted to confirm that the (inaudible) for the primary endpoint is still going to be validated, (inaudible) [infection] rates of less than one per year.

That's our understanding at this point, yes.

Okay, thank you.

Our next question comes from Chris Geston, with UBS. Please proceed with your question.

Good morning.

Morning.

In terms of the bus dev area and potential partnership opportunities, could you discuss just generally what the motivation was for the hiring of Mr. Daly in terms of, I mean, is this a shift in strategy? Does it point to the difficulty of what you're seeing out there, a learning curve, some weaknesses in the last approach or the old team? Anything to add color there would be helpful.

Sure. Yes, I wouldn't read too much into it. I mean, we're always looking out for top talent in the industry, and this is just another example of Halozyme recruiting a strong, experienced industry executive to the team. Our business development strategy remains unchanged, and so we're still very focused on both product-related deals around our Ultrafast Insulin program as well as potentially other products as well as the enhanced technology licensing.

All right. Thank you. And also, in terms of the recent Biodel setback, there was a lot of talk about the competing add-ons or additions, improvements in the insulin area with the pharmas and Mannkind and Biodel, maybe even yourself. Have you sensed any change at all? Has anything as far as the landscape out there and your discussions changed at all since then?

Well, look, this is a $3.8 billion Ultrafast Insulin market, so it's a sizable prandial insulin market. Biodel, Mannkind and Halozyme have Ultrafast Insulin products, and we believe that our product is very well positioned in the marketplace. There has been active interest in our program, and I expect that to continue.

Thank you.

You're welcome.

(Operator instructions.)

Our next question comes from John Sonnier, with William Blair. Please proceed with your question.

Thanks for taking the question, and congrats on a lot of good progress there. Most of my questions have been answered. I guess it's just maybe a little bit more granularity, Jonathan, on the business development side. It has been a while since you've done an IV to subQ [enhanced] deal, and you now have a much leaner organization, albeit with new business development leadership. So I guess to me it was a question of do you have (a) the interest in doing more enhanced deals, and (b) do you have the capacity? In other words, I don't know how much it takes organizationally for you to manage two or three additional relationships.

Yes, that's a great question, John. We still have the interest in doing partnerships. We have been in a number of discussions. And the bar is fairly high on our side, because over the last few years in terms of supporting Baxter as well as Roche it does take a lot of organizational bandwidth to support those alliances, and in a few months we're going to have -- we'll be able to say that we've got three Phase 3 programs with partners, and that takes a substantial commitment. And so we're looking for enhanced technology partnerships, but also ones that are fairly lucrative and can support the headcount required to support those.

That's helpful. Thanks so much.

Sure.

There are no further questions in queue at this time. I would like to turn the conference back over to Dr. Jonathan Lim for closing comments.

2010 is shaping up to be a year of significant clinical advancement for Halozyme. Our Ultrafast Insulin program will be reporting the results of our first three-times-per-day treatment study next week at the Diabetes Technology Society meeting. Our Phase 2 analog treatment studies that began in the third quarter are moving forward on plan with patient enrollment. Halozyme's expanded PEG PH20 cancer program with two ongoing Phase 1 clinical trials is continuing, and plans are underway to initiate a Phase 2 trial in pancreatic cancer next year. Our HTI-501 program is expected to enter a proof-of-concept human study next year, as well.

The documentation describing our root cause investigation and corrective action plan associated with HYLENEX has been sent to the FDA, and we await further discussion with the agency. Baxter's Phase 3 registration study for subcutaneous HyQ with PH20 is expected to be completed during the fourth quarter of 2010, followed by a BLA filing in 2011. Roche's Phase 3 registration trial for a subcutaneous formulation of Herceptin with rHuPH20 along with its Phase 1 clinical trial for subcutaneous MabThera with PH20 continue to enroll and treat patients. We anticipate the start of the Phase 3 for MabThera subQ in the treatment of follicular non-Hodgkin's lymphoma by the end of this year, which would mean we will have three partnered programs in Phase 3 development, as I mentioned earlier.

We're fortunate to have numerous product opportunities in various stages of development, and it looks like we have another busy year ahead of us. We look forward to updating you again soon on our progress. We will be participating in two investor conferences during the coming weeks, including the Lazard Capital Markets Healthcare Conference on November 17 in New York and the Canaccord Cardiovascular, Diabetes and Obesity Conference in San Francisco on December 8. Again, thank you for your interest in Halozyme and for your participation in today's call. Take care, everyone.

This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.