At Fierce Biotech Week 2025 in Boston, Halozyme Therapeutics CEO Helen Torley called on the pharma industry to break from the old habit of going to intravenous first and to start thinking about subcutaneous development early on.
Halozyme Therapeutics has been busy. While fighting a patent dispute with Merck & Co. and navigating the impact of the Inflation Reduction Act (IRA), the company has penned an acquisition of fellow drug delivery biotech Elektrofi.Halozyme scoured very broadly for potential acquisitions in the drug delivery field before landing on Elektrofi, Halozyme CEO Helen Torley said during an interview on the sidelines of Fierce Biotech Week in Boston.The San Diego biotech evaluated other areas such as the blood-brain barrier and oral delivery of biologics, looking for companies operating on similar business models, namely, a royalty-generating licensing platform built on a technology with sizable demand from pharma companies.Elektrofi fits that profile. The company’s Hypercon technology enables under-the-skin injections of drug substances at high concentrations, thereby reducing the volume of under-the-skin injections to levels that are suitable for at-home administration. Like Halozyme, Elektrofi grants its technology to biopharma companies for use in their subcutaneous products and earns licensing fees in return.Three attributes of Elektrofi stood out to Torley. Hypercon boasts a large total addressable market because a lot of antibodies are currently limited in their ability to be given in a simple, at-home subcutaneous injection. The technology has already attracted argenx, Eli Lilly and Johnson & Johnson with a near-term inflection point—entering in-human testing—within the next year or so. With intellectual property projection out to the mid-2040s, Hypercon offers another source of long, durable revenues, the Halozyme chief executive explained.Despite Hypercon and Halozyme’s own Enhanze—already used in 10 commercial drugs—both being subcutaneous delivery technologies, Torley sees no antitrust risk in the acquisition.The two technologies “fit different segments of the market,” and potential clients will “either want to get to the very small volume with the Elektrofi technology, or they’ll be very happy with Enhanze” at a relatively larger volume, Torley said. The patient population and the target site of care will be key determinants of a client’s choice between the two technologies, Torley explained. For some cancer drugs, such as J&J’s multiple myeloma therapy Darzalex Faspro, treating patients in the doctor’s office for a short time will be ideal so healthcare practitioners can talk with them during treatment, she said.There's a much stronger shift toward at-home treatment and self-administration by patients in inflammation and immunology, "and that's where the Hypercon technology comes in," the executive explained, adding that similar needs exist in nephrology, neurology and some oncology products. Halozyme shifted to an external innovation model in 2019 after discontinuing its internal drug development efforts following the failure of its then-lead PEGylated recombinant human hyaluronidase program in pancreatic cancer.The Elektrofi deal comes after a failed bid for Evotec last year. The German company insisted on a standalone strategy and didn’t engage with Halozyme on the biotech’s $2.1 billion buyout offer.The deal also comes after a relatively quiet period for Halozyme’s own Enhanze technology. The last major partnership Halozyme penned for Enhanze can be traced to a March 2022 agreement with Roche’s Chugai Pharmaceutical on an undisclosed drug candidate, and, before that, an “ultra-long-acting” HIV drug pact with GSK’s ViiV Healthcare in 2021.Torley said the lull was caused by the IRA, signed into law in August 2022. She said Halozyme saw a slowdown in deal talks for its Enhanze platform as biopharma companies reevaluated their portfolios and strategies.The silence of Enhanze was even more jarring compared to recent licensing deals Korean company Alteogen signed with AstraZeneca and Daiichi Sankyo for its human recombinant hyaluronidase enzyme ALT-B4.In both cases, the pharma companies had approached Halozyme, but a deal couldn’t be made because they involved targets that Halozyme had exclusively partnered with somebody else, Torley said.Halozyme is deep in a patent dispute with Merck around the New Jersey pharma’s newly FDA-approved subcutaneous version of Keytruda, which was the first Big Pharma client of the Alteogen tech. The U.S. Patent and Trademark Office (USPTO) has allowed a post-grant review for Merck’s challenge to some of Halozyme’s patents around modified human hyaluronidase, and Halozyme is seeking royalty payments on Merck’s sales of subcutaneous Keytruda.Halozyme is confident in its case because it has determined, based on public information of molecular structure, that ALT-B4 is one of the products the company invented and patented, Torley said.Halozyme expects the USPTO will schedule a hearing this month, but years of potential legal tug-of-war are ahead if the two firms fight to the end. Torley reiterated that Halozyme is open to a licensing deal with Merck. While discussions of new partnerships are resuming at Halozyme, some uncertainties with the IRA remain that could impact Halozyme.The Centers for Medicare & Medicaid Services (CMS) recently proposed a policy change for fixed combination drugs when determining drugs for price adjustments. Specifically, in a draft guidance, the CMS solicited comments on whether certain drug products with ingredients that it described as “not biologically active against the disease state(s)” should be aggregated with products made with at least one but not all of the active ingredients. In previous rounds of IRA negotiations, the CMS had regarded fixed combination drugs as distinct qualifying single source drugs from their individual active ingredients. The proposed rule would directly impact subcutaneous drugs co-formulated with Halozyme’s recombinant human hyaluronidase. A drug would be more susceptible to IRA price negotiations if its intravenous version and its Enhanze-based subcutaneous formulation are considered the same product. After industry pushback, the CMS abandoned the policy in final guidance released Sept. 30 for prices taking effect in 2028. The agency said it will revisit the idea next year for prices taking effect in 2029.“Due to the complexity and scope of this issue as noted above in stakeholder comments, CMS believes additional time would be necessary to develop objective policy criteria if CMS were to finalize such a policy, and thus will not make a change to the fixed combination drug policy in this final guidance,” the agency said in the final guidance (PDF). “CMS intends to address this program integrity risk and is continuing to consider the appropriate policy to implement in rulemaking beginning in initial price applicability year 2029.”“We applaud CMS for recognizing that it was a very complex topic,” Torley said.Although Enhanze may not be a therapeutically active pharmaceutical ingredient in a traditional sense, Halozyme has argued that the technology offers clinically meaningful benefits for patients and that the CMS lacks the authority to make that determination. For example, a subcutaneous version of J&J’s Rybrevant using Enhanze showed statistically superior overall survival compared with its original intravenous version in a phase 3 trial in first-line EGFR-mutated non-small cell lung cancer.Overall, Torley said the IRA’s impact on Halozyme is overblown. Darzalex Faspro, the biggest Enhanze-based product by sales, is shielded from price negotiations as all of the drug’s indications have orphan designations.In another positive development for the company, the recently enacted One Big Beautiful Bill Act includes a term that delays the price negotiation countdown for rare disease therapies until after the drug expands beyond orphan indications. Torley raised the example of Bristol Myers Squibb’s subcutaneous Opdivo, the initial FDA approval for which in 2014 was for late-line melanoma, an orphan indication. By the time Opdivo is up for evaluation, biosimilar products are expected to have arrived, making the PD-1 inhibitor ineligible for IRA price reduction.All told, Medicare Part B constitutes about 20% of Enhanze-partnered product sales, according to Torley.Now that drug developers have a better grasp of the IRA’s impact, Halozyme has seen a ramp-up of deal discussions over the last 12 months, and Torley said she’s “very pleased" with the ongoing conversations. “We are going to sign and announce a deal this year, and we’re very excited about that,” the Halozyme CEO said.While most of Halozyme’s existing partnerships are focused on turning intravenous infusions into subcutaneous injections, Torley said extending the drug release time or reducing the dosing frequency—like the HIV collaboration with GSK—has become a very hot topic in the company’s deal discussions, especially in inflammatory diseases as customers look to improve their drugs’ competitive profiles.At Fierce Biotech Week in Boston, the Halozyme CEO called on the industry to break from the old habit of going to intravenous first and to start thinking about subcutaneous development early on, potentially in a separate arm in a phase 1 trial. “The early development is a very important time to get to that staging of de-risking to be able to get support, to continue to invest in the drug, and everybody is used to seeing the PK of IV drugs,” Torley said during a fireside chat. “So there needs to just be that comfort level with understanding how the subQ profile can also be translated into the endpoints and the data you need to pick the dose in phase 2 and 3.”As for potential additional acquisitions, Torley said the company is currently focused on completing the integration with Elektrofi. “But, if we can continue to find businesses that have got high growth potential, durable revenue, this high-margin, a profitability model that the licensing model is, absolutely we’re going to keep growing by using the cash to add additional revenue streams, because we’re not investing in the internal innovation.”
