Halozyme Therapeutics Inc (HALO) 2022 Q1 法說會逐字稿

Good afternoon. My name is Emma, and I will be your conference operator today. At this time, I would like to welcome everyone to the Halozyme First Quarter 2022 Financial Results Conference Call. (Operator Instructions)

Don (inaudible), you may begin your conference.

Good afternoon, and welcome to our first quarter 2022 financial results conference call. In addition to our press release issued today after the close, you can find a supplementary slide presentation that will be referenced during today's call in the Investor Relations section of our website.

Leading the call will be Dr. Helen Torley, Halozyme's President and Chief Executive Officer, who will provide an update on our business; and Nicole LaBrosse, our Chief Financial Officer, who will review our financial results for the first quarter.

On today's call, both GAAP and non-GAAP financial measures will be discussed. The non-GAAP or adjusted financial measures are reconciled with the comparable GAAP financial measures in our earnings press release and slide presentation.

During the call, we will be making forward-looking statements. I refer you to our SEC filings for a full listing of the risks and uncertainties.

I'll now turn the call over to our CEO, Helen Torley.

Thank you, Don. 2022 is also a very strong start for Halozyme from both an operational and a capital allocation standpoint. In April, we announced our planned acquisition of Antares Pharma, which is on track to close in the second quarter. This acquisition strengthens Halozyme's position as an industry leader in drug delivery and provides revenue growth and diversification. Halozyme and Antares also share a common culture built around the same mission, innovating to improve the lives of patients. We look forward to building an even stronger company together with our entire colleagues and are excited about the greater impact we will continue to drive for patients, customers and shareholders.

Nicole and her finance team have secured financing to support the acquisition with access to very favorable debt structure. She will provide more color around that during her remarks. As we progress through the completion of the Antares acquisition, we've continued our demonstration of executional excellence and delivered on the key first quarter milestones.

Shown on Slide 3 are Halozyme's strategic and capital allocation priorities. These are to invest to maximize ENHANZE revenue growth and durability, to continue to return capital to our shareholders and to grow through M&A. Notably, we are making strong progress on each of these.

I'll start by reviewing our Q1 operational performance. I'm pleased to report that our first quarter results provided a strong start to 2022 for Halozyme. We reported first quarter revenues of $117.3 million, a 32% year-over-year increase, resulting in GAAP Q1 2022 earnings per share of $0.43 and non-GAAP adjusted earnings per share of $0.47. This performance is driven by strong ENHANZE royalty revenue growth and the booking of a milestone payment associated with the signing of what is our 12th ENHANZE collaboration agreement with Chugai Pharmaceutical. As we will also highlight, we continue to see strong momentum in our ENHANZE development portfolio.

Turning now to Slide 4. In the first quarter, we had record quarterly royalties of $69.6 million, representing 89% growth over first quarter 2021, an 11% sequential growth. This growth continues to be driven primarily by the successful ongoing global launch of Janssen's subcutaneous forms of DARZALEX and also by Roche's Phesgo. Based on the strong momentum, we project continued royalty revenue growth in 2022 with growth of approximately 50% to approximately $300 million. We're delighted with the continued robust growth of this high-margin recurring revenue stream.

Turning now to Slide 5. I'll now provide highlights of our key commercialized products that are contributing to the strong royalty revenues. We currently have 5 partner products commercialized in approximately 100 global markets that are using the ENHANZE drug delivery technology. It's estimated that these products have been used to treat more than 600,000 patients globally. Our Wave 2 products, Janssen's DARZALEX Subcu and Faspro and Roche's Phesgo are the current royalty revenue growth drivers and continue to have substantial growth opportunities ahead for each of them. I'll provide additional color on each of these in a moment.

Moving now to the Wave 1 product. Roche continues with its global commercialization of MabThera SC, which is also called Rituxan Hycela and subcutaneous Herceptin or Herceptin Hylecta. We project continued decline in royalties from these mature products as a result of the ongoing impact related biosimilar competition to the IV product. Let me now provide some additional details on the Wave 2 product, beginning with DARZALEX shown on Slide 6. During the first quarter 2022, Janssen's parent Johnson & Johnson reported worldwide sales of DARZALEX, including both the IV and subcutaneous forms of $1.856 billion, which was up 40.3% year-over-year on an operational basis. This strong operational growth was driven primarily by subcutaneous formulation penetration and meaningful share gains across all lines of therapy and in all regions. As illustrated on the slide, daratumumab subcu share continues to grow in the U.S. during the first quarter, with 80% end of quarter share being attributed to DARZALEX Faspro, the subcu version based on Symphony data. This is an increase from 76% share in December of 2021.

Moving to the second of our Wave 2 products. Our partner, Roche, reported during the first quarter 2022, that Phesgo, one of their newly approved products is helping to drive growth by providing patients with a new delivery option that decreases the overall administration and monitoring time from patients from 2 to 8 hours to just 20 to 40 minutes. Sales for the quarter were CHF 146 million, up 410% from a year ago. We continue to expect strong quarter-over-quarter growth of Phesgo as a result of the ongoing launches in Europe and Rest of World as reimbursement is attained and through continued penetration of oncology accounts in the United States.

Moving to Slide 7. Here, we illustrate how the non-risk adjusted royalty revenues are projected to grow over time, driven by multiple new launches that we project will add royalty revenues incremental to those resulting from the Wave 1 and 2 products that we just discussed. These new potential launches form at 3 additional waves, which we call Wave 3, 4 and 5. And as a brief reminder, the Wave 3 products are currently in our completed Phase III studies and have the potential to launch between 2023 and 2025. Wave 4 is comprised of the 11 products that are currently in Phase I development, which should they continue in development have the potential to launch between 2025 and 2027. And with 5 will be comprised of products entering the clinic later this year and in the years to come.

This quarter, we saw important progress advancing Wave 3 and 4. This included the announcement by Argenx that ADAPT-SC, the pivotal study of SC Efgartigimod in generalized myasthenia gravis had met its primary endpoint, Roche initiating a Phase III study of subcutaneous [acorpus] with ENHANZE and initiating their second Phase I study, this time evaluating ENHANZE with N6LS which is a broadly neutralizing antibody being evaluated for the treatment and prevention of HIV. Each of these advances brings us closer to potential new royalty revenues.

Let me now provide some more details on Efgartigimod. Efgartigimod as an IV administration was approved by the U.S. Food & Drug Administration in December of 2021 for the treatment of adult patients with generalized myasthenia gravis. And this last week, Argenx announced positive results in its Phase III ADVANCE study, which is evaluating Efgartigimod IV for the treatment of adult patients with idiopathic thrombocytopenic purpura. We congratulate Argenx on this terrific use.

Provided in Slide 8 is a summary of the results of the ADAPT-SC study, which is evaluating Efgartigimod with ENHANZE in myasthenia gravis. And this is the most advanced of 5 indications that are currently being evaluated as subcu administration with ENHANZE. The ADAPT-SC study met its primary endpoint, demonstrating non-inferior total IgG reduction at day 29 with subcutaneously administered Efgartigimod compared to intravenous administration. Based on these results, Argenx has stated it plans to submit a biologic license application to the U.S. Food & Drug Administration by the end of 2022. Efgartigimod subcutaneous is on track to be the first of our Wave 3 potential partner launches, which are launches that we project will occur between 2023 and 2025 with the potential approval for Efgartigimod subcu anticipated in 2023.

Let me move now to Slide 9 and the discussion of the ENHANZE development portfolio. It is our goal to continuously expand the number of products that are in development and to advance products to later stages of development and launch as in many cases, this is associated with milestone revenue payments to Halozyme.

I'll begin with an overview of the ENHANZE partner product pipeline as of May 2022. We now have 4 products in Phase III development. These are shown at the bottom of the slide and include Argenx' Efgartigimod in multiple indications, BMS's nivolumab, Roche's atezolizumab, and I'm pleased to announce that the Phase III study of Roche's Ocrevus as a subcutaneous delivery has now also started.

We consider Efgartigimod, nivolumab and atezolizumab as our Wave 3 launch product with the potential to launch between 2023 and 2025. Ocrevus is the first of our Wave 4 potential launch product, which we call have the potential to launch in the 2025 to 2027 time frame. All 4 of these products are currently approved as IV drugs. Analysts project that the total revenue potential for both the IV and subcutaneous formulations for this set of potential launches will exceed $20 billion in 2025. And what will be key for Halozyme is going to be the pace of the conversion from IV to subcu and the peak conversion share attained.

Moving to the top of the slide. We currently have 11 products that are in or have completed Phase I clinical testing. Here, I'm also pleased to report that during the quarter, our ENHANZE partner ViiV, initiated a Phase I study to evaluate the safety and pharmacokinetics of N6LS administered subcutaneously with the ENHANZE technology. N6LS is a broadly utilizing antibody for the treatment and prevention of HIV. These Phase I products should be preceded in development but also be our Wave 4 potential launches. And as you will note, we include a number of already commercialized and successful drugs and cover a range of therapeutic areas and diseases. Looking ahead for 2022, we continue to expect further pipeline progress and expansion and continue to project at least 5 new Phase II or Phase III trial starts for existing ENHANZE partner programs and 4 new products entering the clinic this year.

Let me now move to Slide 10. As we continue to drive long-term durable growth, I'm also delighted that we announced a new collaboration and licensing agreement with Chugai Pharmaceutical [R-12], further strengthening our royalty business and validating Halozyme as a partner of choice for patient convenience, subcutaneous drug delivery. As an illustration, based on historical development time lines for ENHANZE products, a product entering development in 2023 would have the potential to launch post 2027, adding revenue and growth as part of our Wave 5.

Moving now to Slide 11. Our pipeline and new deal progress have driven strong milestone revenues for Halozyme historically, and we project this growth will continue and remain a key contributor to our capital allocation progress. As you can note, we have met or are on track to meet the prior 3-year milestone revenue guidance ranges. For the 3-year period of 2022 to 2024, we expect to increase milestones again to $450 million to $500 million in total milestones, resulting from a mix of development, commercial and new agreement milestones.

Let me now move to say a few words regarding Antares acquisition. Just a month ago, we announced our agreement to acquire Antares Pharma, whose business consists of a best-in-class differentiated royalty revenue-generating auto-injector platform that offers new licensing opportunities and a growing commercial business with 3 proprietary products.

As shown on Slide 12, this transaction is fully aligned with our previously announced capital allocation priorities for 2022. These priorities are to invest to maximize our ENHANZE revenue growth and durability, to continue to return capital to our shareholders through share repurchases and at the center of the slide to seek to acquire a platform technology where Halozyme can operationalize and create additional value while also adding to and further extending our revenue durability.

Antares is a perfect partner for this and fulfills each of our business development criteria. The transaction is expected to be accretive to Halozyme's 2022 revenue and non-GAAP earnings and to accelerate top and bottom line growth through 2027 with multiple growth drivers beyond 2027. We expect to build on Antares' core auto-injector platform technology and capabilities to drive incremental durable revenue opportunities with additional intellectual property protections for Antares technology in place beyond 2030.

In 2027 and beyond, we expect Antares' multiple growth drivers will be highly additive coming in the form of its growing to sell strong replacement product business, revenues from partner products and new partnerships with companies seeking subcutaneous administration for both small and large molecule products.

Moving to Slide 13. The combined company further extends our leadership and position as a partner of choice for patient-convenient subcutaneous treatment delivery. We believe that Antares' auto-injector technology is complementary to our ENHANZE technology, potentially allowing the injection of larger volumes of certain drugs subcutaneously or to deliver faster injections. And carries a successful development and partnership of its technology platform offers a widely licensable product suite that can be broadly applied across a spectrum of market segments. We're very much looking forward to welcoming the Antares team to Halozyme and leveraging our joint expertise to unlock new subcutaneous drug delivery opportunities that have the potential to help patients globally.

With that, I'll now turn the call over to Nicole for a discussion of our first quarter financial results. Nicole?

Thank you, Helen. I'll start on Slide 14, where I'll focus on some highlights from our first quarter results. Total revenue for the first quarter was $117.3 million compared to $89 million in the prior year period. The year-over-year increase of 32% was primarily driven by an increase in royalty revenue, partially offset by a modest decrease in revenue under collaborative agreements. Royalty revenue for the quarter was $69.6 million, an increase of 89% compared to $36.9 million in the prior year period. This was driven primarily by the continued strong uptake of Janssen's subcutaneous DARZALEX utilizing enhanced. Cost of product sales for the first quarter was $15.9 million compared to $18.2 million in the prior year period. The year-over-year decrease despite an increase in product sales was primarily driven by the timing of manufacturing overhead costs in the prior year.

Operating income was $75.7 million compared to $50.7 million in the prior year period. The year-over-year increase of 49% is driven by growth of recurring royalties in our leverageable business model, which allows us to grow revenue with minimal investments in operating expenses.

On a GAAP basis, diluted earnings per share was $0.43 compared with $0.19 in the prior year period. On a non-GAAP basis, diluted earnings per share was $0.47 compared with $0.37 in the prior year period. When comparing to the prior year, it's important to note that the first quarter of 2022 is our first period recording income tax expense, representing $0.10 per share.

Now let me turn to Slide 15 for a review of our 2022 financial guidance, which is Halozyme's stand-alone guidance. This guidance remains unchanged from what we provided at the beginning of the year and does not include any contribution from Antares. We plan to provide updated guidance, including Antares at a quarterly call after the transaction closes and the 2 companies are combined. For the full year 2022, we continue to expect total revenues of $530 million to $560 million, representing growth of 20% to 26% over 2021 total revenue. In terms of the components of our revenue, we expect revenue from royalties to increase approximately 50% over revenues from royalties in 2021 to approximately $300 million. Product sales and collaborative revenues in total for 2022 are expected to be at similar levels to what we achieved in 2021, with API being balanced throughout the year and milestones substantially more weighted in the second half of the year based on our expected timing for partner milestone-bearing events.

We expect operating income of $350 million to $380 million, representing growth of 27% to 38% over 2021 operating income. This includes an incremental $20 million operating expense investment to maximize ENHANCE and extend royalty revenue durability. Even with this important investment, we expect operating margins of greater than 65%.

Moving now to Slide 16 and a summary of our capital allocation priorities. We have been consistent regarding our balanced capital allocation priorities, which put us in an advantageous position to acquire Antares using a mix of cash and debt while remaining committed to our plans of capital return to shareholders.

Our balance sheet remains strong with cash, cash equivalents and marketable securities of $786.1 million on March 31, 2022, compared to $740.9 million on December 31, 2021, further strengthening our financial position as we prepare to close the Antares transaction. We are able to access low-cost pro rata bank debt to finance the transaction and are pleased with the demand in the market and favorable terms of this non-diluted financing. As we stated, we expect to maintain a strong balance sheet with approximately 3.3x net debt-to-EBITDA ratio at the projected time of close, with a significant decline expected in the quarters following the close. While we will maintain a focus on deleveraging, we will also continue to execute on our previously announced 3-year $750 million share repurchase program, inclusive of $150 million accelerated share repurchase program initiated in December 2021. We continue to plan for up to an additional $100 million in share repurchases in 2022, dependent on market conditions and other factors.

With that, I'll now turn the call back to Helen.

Thank you, Nicole. I'd like to close by thanking our Halozyme team, our partners and all of our collaborators for the hard work that resulted in the strong performance this quarter. In 2022, we will continue to deliver growing revenues, growing operating income and expanding our pipeline, resulting in both strong near-term and long-term growth. I'd like to thank everyone for joining us today. And with that, we'd now be delighted to take your questions.

Operator, please would you open the call for questions?

(Operator Instructions) Your first question today comes from the line of Charles Duncan with Cantor Fitzgerald.

Helen and Nicole, congratulations on a good quarter of progress. So I had a couple of questions. One is on DARZALEX SC. In terms of -- I think I heard you say that 80% SC conversion now and I guess that's pretty high, that's actually higher than we had anticipated. Where do you think that can go? And what would be the reason anyone would not convert over to the SC version?

So yes, we did indeed find that at the end of the first quarter in the United States, the conversion was about 80% share. Now we do think that will go higher. And to be very specific about the reasons why people wouldn't convert, there are a small number of patients we hear about anecdotally who may have needle phobia or may be comfortable being in the infusion suite because of the social aspect of that. But I would say we do see the opportunity to continually grow share in the United States, and importantly, outside the U.S. as well. Janssen has not provided any update on that since the middle of last year when we knew it was lagging the U.S. a bit. So expect continued growth throughout this year, as we had projected. It's going to be driven by continued share gains outside the U.S., but also the U.S. as well. And I'll just comment that we're very pleased to see the overall growth of the brand, Charles, because if you recall what we talked about in January, we've got the overall brand growing as well as SC share growing, which is why we get such confidence and conviction in the continued growth for some time to come.

Okay. That's helpful. And then I wanted to ask you, Helen, regarding Wave 3. I'm particularly interested in Efgartigimod and in generalized myasthenia gravis. Congrats on the recent data there. But I guess I'm wondering if you could share with us your perspective of the value proposition, especially as it may relate to the potential pace and ultimate peak of conversion for that drug from the IV?

Yes. So absolutely, we were very pleased, as we said in the prepared remarks, to see the positive data for subcu Efgartigimod and importantly, for anyone who was listening Argenx also reported that the launch of the IV is off to a very strong start. And this obviously is a new mechanism of action, offering new hope for patients. So all very good to see the IV taking off well. The subcu data is expected to be filed by the end of this year.

So we're looking at a 2023 launch. And in terms of the value proposition for patients, the SC does offer the opportunity for a quick non-complex subcutaneous injection as opposed to a more lengthy IV. And we do know based on Argenx' comments in their clinical studies for patients who received both IV and subcu, 70% of patients expressed the preference for the subcu. And so this is one chance where we do see many dynamics that are going to be similar to what we observed with DARZALEX.

We see a company that is very motivated to have high success in the market and what is going to be a growingly competitive environment. And we see an office setting where the physicians are very comfortable and used to giving subcu drugs that perhaps more so than IV, as we see a strong value proposition for patients. So we don't give specific guidance as to what we think the conversion rate is, but everything does support the unmet need, and I think the excitement of patients to be using a subcu in generalized myasthenia gravis and specifically Efgartigimod, given the convenience or the once-weekly regimen.

Very good. Could be a neurology game changer.

Your next question comes from the line of Mike DiFiore with Evercore.

Two for me. One on Phesgo, ex U.S. launch of Phesgo, if you could provide more color on the actual cadence of EU reimbursement, will it be lumpy throughout the rest of the year or evenly distributed? And also, if there's any additional gating factors in the U.S. for continued growth? And I have a follow-up.

All right. For the ex U.S. launches, Mike, as I'm sure you may be hearing from other companies, while it used to be that you could consider that the top 5 or 6 companies would all get reimbursement within 12 months, we do know that, that is sometimes ticking up to 24 months. And so Roche has not provided specific comments on that, but we can say that we know that some of the traditionally larger European markets have not yet launched. And so that is taking up to 2 years. So that is why we're excited about the continued growth in Europe, strong performance so far, but with some of the more traditional major markets yet to come.

And for the United States, we do predict then this is based on conversations with Roche as well, continued penetration into accounts and new accounts coming on board. So this is a question of them gradually growing throughout the year and adding to the quarter-on-quarter growth that we have projected for the year.

Okay. Very helpful. And my final question is regarding the Antares acquisition. You may not be able to comment on this, but I'm not sure if this was commented on during the actual acquisition -- the deal call, but Antares has some 3 very early assets, 1901, 1902 and 1903. Do you guys intend to develop those and then thereby incurring more R&D expense? Or will those be something that you divest? Any color along those lines would be helpful?

Yes. And Mike, what I will say is I'm very pleased with the progress we're making on our integration. Obviously, before the acquisition, we did diligence. We're continuing in integration work streams and the R&D program is certainly an area where we are digging in and seeking to understand. So no decisions made on that, and we look forward to continuing to work with Antares colleagues post close on really making sure we have a full understanding of that. I will say one differentiation here is the R&D expense. These obviously -- these programs tend to follow ANDA or 505(b)(2) pathways, which are a lot less costly and a lot faster than traditional drug development. So that obviously is something we're very much going to be taking into consideration as we look at each of these opportunities and look at the potential return for investment that would exist with these areas, each of which is in an interesting area of unmet need, but no decisions as yet.

Your next question comes from the line of Corinne Jenkins with Goldman Sachs.

So obviously, the FASPRO conversion has been quite high, and I think probably surprised a lot of people for the upside. But as we think about the next launch with Efgartigimod, what are some of the factors that we should keep in mind when thinking about potential conversion there? And what has your market research revealed about the appetite to use the subcutaneous injection in that market versus some of the others we've seen you bring the ENHANZE co-formulation products to bear?

Yes. And I'll refer back to comments I made earlier in the year, where we do see a lot of similarities between the Efgartigimod opportunity and the DARZALEX opportunity. And specifically, we think some of the drivers of DARZALEX that are present with Efgartigimod are, Efgartigimod is a very important product, obviously, for Argenx or looking to be successful. It's an area where there are additional competition today, but competition coming into the market, both in form of C5 and also FcRn products.

So having a winning strategy with the most convenient type of therapy possible, I think, is going to be a very important factor. Corinne, we've not done any detailed market research ourselves, but we can cite comments that Argenx has made on the calls to say that in their clinical study where patients received both IV and subcu, 70% of patients expressed a preference for the subcu after receiving both forms of therapy.

So with all of these factors and the fact that the treatment here is happening in immunologist offices, rheumatologist offices who are not set up necessarily for IV therapy. So this is saying that is very conducive, we believe, to subcu drug delivery. We think all of those factors speaks very well to a robust uptake. And I'll just finish on the patients. You can imagine for a patient with chronic disease, the ability to have a simple short subcu injection delivered versus long-IV infusions, IVs, et cetera, we think there's a strong winning patient preference here as well.

Great. That's helpful. And then just with respect to completing the Antares acquisition, can you help us understand what steps remain to complete that deal, I think you said in the second half -- or the first half of this year?

Yes. This include the tender offer at completion, not also the regulatory reviews Corinne. So everything is progressing at this point in time. And we can say that based on the completion of the conditions as well as regulatory reviews, the earliest time the transaction could close would be '24, but we've got to wait for those 2 areas I just mentioned to be satisfactorily completed before we can close.

Your next question comes from the line of Jessica Fye with JPM Chase.

Could subcu Efgartigimod be a candidate for auto-injector delivery? And how much work would be required, if so? What about for the HIV drugs with Janssen and ViiV? And then lastly, following the Antares close, recognizing that you've kind of provided some commentary about share repo this year, thinking in '23 and beyond, how will you prioritize paying down debt after the acquisition versus returning cash to shareholders via share repo?

Let me take the auto-injector questions, and then I'll pass it to Nicole for the question on paying down of the debt. Yes, we -- obviously, once the transaction is closed, do plan to engage with all of our partners to take a look at their portfolios and see if there might be a match for the auto-injector. I think the most important thing is going to be the volume of injection immediately upon the close, we would have access to a 1 ml and a 2.25 ml auto-injector. But as we stated when we announced the transaction, we're very excited about the potential to be developing a 5 ml auto-injector. So premature to comment specifically on any products that are currently in the portfolio, but we certainly, in doing this transaction, see the opportunity for both biologics and for small molecules that can be delivered in a volume of up to 5 ml. So there is a lot of opportunity out there, we believe.

And I'm happy to cover your second question, Jessica. So in regards to our capital allocation priorities, they do remain unchanged. So we do project availability to continue on all of our objectives here, and we are projecting to be able to address both our share repurchase plans which are inclusive of the 3-year plan that we announced at the end of last year to purchase $750 million, of which $115 million is in progress via an ASR at the moment, but we are still on track with those plans. And as well as we mentioned that we do plan to quickly deleverage the debt we're taking for the Antares acquisition as well in the coming quarters, just again driven by our really strong cash flow projections.

Your next question comes from the line of Anita Dushyanth with Berenberg Capital Markets.

Helen, can I ask you about the guidance you've provided now, obviously, does not include the assets from Antares, but post closing in the first half, would that be updated towards the second half of the year?

Yes. It is our intention to -- after the close at the next earnings call to provide an update on guidance.

Okay. Great. And also regarding your partnerships, I mean, historically, HALO has signed on one partnership at least annually with the pharma players. So going forward, would there be a preference or towards signing on partnerships using ENHANZE or auto-injector or you kind of remain agnostic?

It's a great question, and I do think what's exciting for us now is that we have the opportunity, I see 3 buckets and segments that we're going to seek to address post close, that would be ENHANZE only. Auto-injector only small volume and ENHANZE plus auto-injector, probably the 2.25 and 5 ml. And that really is how we are looking at the opportunity as we assess Antares. So we see all 3 areas where Halozyme have the potential to create new deals.

Your last question today comes from the line of Jason Butler with JMP Securities.

It's Roy in for Jason. I had a few on the 5 ml. I guess how straightforward do you think it will be? And what remains gating to get the auto-injectors to 5 ml? And based on your preliminary work, what do you think the time lines are to get that option available? And is that going to be generally compatible with the high viscosity formulations?

Yes. Roy, all great questions and work that is still a little premature for me to be able to comment specifically, but we do expect that we'll be able to deliver a range of viscosity. So that's a very important thing for us. We've seen some feasibility testing with regard to this. But in terms of the specific time line, et cetera, we want to spend a bit more time with the Antares team after the close to really build out those plans. But this is going to be a priority for us moving forward and very excited with what we've seen so far. And the great Antares technology, which we do think work together with the ENHANZE will provide a unique offering in the marketplace to be able to deliver a large volume like 5 ml subcutaneously.

There are no further questions at this time. Helen Torley, I turn the call back over to you.

Lovely. Thank you very much. Well, we thank everybody for joining us today and for your attention and support. Obviously, we are off to a very strong start in Q1. We look forward to the close of the Antares transaction and being able to provide you with further updates on our Q2 call later this year. Thank you very much, everybody. Goodbye.

This concludes today's conference call. You may now disconnect.