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Executives

Robert Uhl – Senior Director, IR

Jonathan Lim – President and CEO

Kurt Gustafson – VP and CFO

Greg Frost – VP and Chief Scientific Officer

Analysts

Eun Yang – Jefferies & Company

Terence Flynn – Lazard Capital Markets

Chris Geston – UBS

Andrew Vaino – Roth Capital Partners

Jonathan Aschoff – Brean Murray, Carret & Co.

Halozyme Therapeutics, Inc. (HALO) Q3 2009 Earnings Call Transcript November 6, 2009 11:00 AM ET

Operator

Welcome to the Halozyme 2009 third quarter financial results and pipeline update conference call. At this time all participants are in a listen-only mode. Following management’s prepared remarks we will hold a question-and-answer session. (Operator Instructions). As a reminder this conference call is being recorded today, November 6, 2009.

I would now like to turn the call over to Robert Uhl. Please go ahead.

Robert Uhl

Thank you, Adrian, and thanks also to everyone for participating in today’s call. I’m Robert Uhl, Senior Director of Investor Relations at Halozyme Therapeutics.

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 2009 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 call Alex Schlam [ph] at 858-704-8288. 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 conference 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 to 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, President and CEO.

Jonathan Lim

Thanks Robert. Good morning everyone and thank you for joining us on the call. Halozyme continues to make exceptional progress in 2009. Today, I will review our recent accomplishments and update 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 most recently completed quarter and for the nine months.

We had an opportunity to see many of you at our recent Analyst Day meeting in New York on October 15th, where we provided an extensive discussion of our technology and our scientific understanding of the extracellular matrix. We also provided an update on our key programs and revealed some of the earlier stage preclinical activities at Halozyme including enzymes that degrade collagen within certain temperature and PH ranges. A replay of the Analyst Day presentation can be found on Halozyme’s website at www.halozyme.com.

Since our Analyst Day, we were able to make a very exciting disclosure with the announcement of patient dosing in a Phase III trial of subcutaneous Herceptin with our PH20 enzyme. What makes Halozyme an incredibly unique and attractive investment opportunity is the fact that our core technology is being applied to existing blockbuster products such as Herceptin, a product with almost $5 billion in worldwide sales in oncology, mealtime insulin which is in a rapidly growing $3 billion market in endocrinology, and GAMMAGARD a product with approximately $1 billion in worldwide sales.

We continued to pursue large multi-billion dollar franchise opportunities in the areas of endocrinology, oncology, dermatology and drug delivery. And we have a robust pipeline of therapeutic candidates within these therapeutic areas. Within these categories, we have proprietary product development programs where our goal is to identify innovative new drugs with highly differentiated value-added characteristics that will allow them to be either best-in-class or first-in-class products that make an impact on patients’ lives and enjoy large commercial sales potential.

Halozyme maintains all commercial rights on a worldwide basis to all of our proprietary programs. Now in the case of our partnered programs, we out licensed an approved product for our technology for specific applications. As the partnerships with Roche and Baxter advance in development and reach commercialization, Halozyme expects to receive milestone and royalty payments which we may use to help fundamental of our exciting proprietary programs. In fact, we have received nearly $100 million from these two partners during the past 2.5 years.

To remind you, we have three product development alliances, two of the alliances involve our Enhanze Technology or a high-dose PH20 with Roche and Baxter BioScience. While the third partnership is with Baxter Medication Delivery for Hylenex, our FDA approved drug.

Recently the Halozyme Roche alliance reached a significant milestone with the first patient dosing in the Phase III registration trial for subcutaneous formulation of Herceptin with PH20 in the treatment of HER2-positive breast cancer. The start of the trial triggered a milestone payment of $5 million to Halozyme. According to analyst estimates, worldwide sales for Herceptin which is approved for intravenous or IV administration are approaching $5 billion per year as I mentioned earlier.

Roche also began a Phase I clinical trial in September with a subcutaneous formulation of another Roche biologic using Halozyme’s PH20 enzyme. This biologic represents the third exclusive target covered by the Halozyme Roche alliance to enter the clinic. The start of this Phase I trial also triggered a milestone payment to Halozyme. And we believe this progress by Roche and its commitment to multiple clinical studies further signifies and validates their belief in our PH20 technology. The Halo Roche covers up to 13 potential biologic targets, five of which have already been selected on an exclusive basis by Roche.

Under terms of the alliance, milestone payments are triggered by enrollment of the first patient in the clinical trial with Enhanze Technology. Historically, we have announced when a milestone payment has been triggered following the dosing of the first patient in a clinical trial. We are excited by the many clinical advancements that we have seen during the past year. And while we cannot predict the specific timing for future milestones covered in the Roche agreement, we expect additional clinical progress in milestone activity to occur under the alliance.

We also have two alliance programs with Baxter, one is GAMMAGARD with Baxter BioScience and the other is Hylenex with Baxter Medication Delivery. Now, we have discussed both of these programs extensively at our analyst meeting and they were also discussed extensively at Baxter’s analyst meeting in mid-September.

In July, we announced that Baxter BioScience completed enrollment in its pivotal Phase III clinical trial for subcutaneous GAMMAGARD with PH20 in the treatment of primary immunodeficiency disorder or PID. The completion of enrollment occurred about five months earlier than we had originally expected. This clinical study is a prospect of open label non-controlled design underway in the US and Canada and has enrolled approximately 80 patients.

The primary endpoint assesses the prevention of acute serious bacterial infections during 12 months of treatment with once monthly subcutaneous administration of GAMMAGARD and PH20. Baxter has indicated that this trial should be completed during the fourth quarter of next year with results available during the first half of 2011. Now GAMMAGARD is currently approved for IV administration and has a meaningful share of the $5 billion worldwide market for immunoglobulin. The goal of GAMMAGARD PH20 development program as I mentioned is a once-monthly subcutaneous formulation to be administered through a single injection site. Such a product would allow patients to convenience of self administration in the home setting.

Switching gears to Baxter Med Delivery, they launched Hylenex for pediatric rehydration at the ACEP or American College of Emergency Physicians Meeting in early October in Boston and a full-scale marketing effort is underway. Hylenex allows fluid administration subcutaneously instead of IV. And therefore, eliminates the need to find a vein and the multiple sticks that can significantly delay the start of hydration treatment.

Publication of Baxter’s first pediatric hydration clinical study in the peer-reviewed journal Pediatrics occurred just as the launch began. The second pediatric hydration study or PEDS 2 in currently underway and directly compares subcutaneous hydration with Hylenex versus conventional IV administration. Subcu fluid administration with Hylenex has received satisfaction ratings from both physicians where 96% rated the procedure easy to perform as well as parents where nine out of ten survey were either satisfied or very satisfied with the procedure.

Overtime, we anticipate gradual market acceptance of Hylenex as physicians and ER staff gain experience with the product and become aware of its benefits relative to IV fluid hydration. Interim results from the PEDS 2 study presented at the ACEP meeting last month were very encouraging showing that subcutaneous hydration with Hylenex resulted in faster times for numerous endpoints including catheter replacement, the start of infusion and the first year in output after the start of infusion.

2009 has been a significant year for our partnered programs as two of our alliance product candidates subcutaneous Herceptin and subcutaneous GAMMAGARD began pivotal Phase III registration trials. In addition, we are hopeful that the resources allocated by Baxter to support the full-scale lots of Hylenex will lead to the realization of this product’s full potential. I believe you can see that important programs has been made for our partner alliances.

Now I am going to switch gears and review for you some of our individual proprietary programs beginning with ultrafast insulin. So the primary goal of our ultrafast insulin program is to develop a best-in-class mealtime insulin product in comparison to the current goal standard analog products that participate in the growing $3 billion prandial or mealtime insulin market. With the 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.

Currently there are three ongoing insulin studies as part of our ultrafast insulin program. And as I mentioned at the Analyst Day, we will have had about a dozen different studies prior to entering into pivotals that really flesh out the full value proposition of this program. I am going to summarize each of the three ongoing studies for you.

The first is a Phase II treatment study that employs a two-way crossover design in type 1 diabetic patients that compares three times per day dosing of regular insulin with PH20 to insulin analog alone.

After a one month dose stabilization period, patients were randomized to three months of treatment with each study drug. This study will provide insight into the ability of PH20 to improve regular insulin to compare the treatment with analog insulin and will also provide important safety information with regard to chronic dosing for our PH20 enzyme. This study is fully enrolled and results should be available by the third of 2010.

Our first study in type 2 patients, a standard meal study began in July. This is a three-way crossover study that compares insulin lispro with PH20 and regular insulin with PH20 to lispro alone. Lispro is a generic name for Humalog a widely prescribed insulin analog. The primary endpoint of this trial is glycemic excursion over the first four hours following the meal challenge. Type 2 diabetes patients typically mistake higher doses of insulin and we believe our enzyme will produce more pronounced absorption effects as the insulin dosage increases. Results from this type 2 study are expected in the middle of next year.

In September, we began a Phase I study to compare the three approved three prandial insulin analogs with and without PH20 in a six-way crossover design trial in healthy subjects. This euglycemic clamp study will compare the post-prandial pharmacokinetics and glucodynamics of the insulin analogs. It’s a head-to-head comparison of all three analogs and the way our enzyme may influence their effects. Results should be available in the second quarter of 2010.

We have also been active in presenting the results from recently completed studies in our ultrafast insulin program. At October 1st, at the European Association for the Study of Diabetes in Vienna, Halo presented additional results from our first Phase II trial for PH20 combined with regular insulin and with insulin lispro compared to each insulin alone. The objective for this study was to demonstrate in type 1 diabetes patients that regular insulin and insulin lispro administered at therapeutic doses along with our enzyme would show us superior PK and glucodynamic profile relative to dosing either insulin alone.

This study confirmed our previous finding in healthy volunteers that PH20 accelerates insulin absorption to yield a more rapid mealtime insulin concentration profile. It also extended these findings to patients with type 1 diabetes at lower more physiologically appropriate doses of insulin. This more rapid PK profile led to improvements in the blood glucose response to a meal challenge has demonstrated in the study by the significant reduction in both peak and total hyperglycemic or blood sugar excursion for the combination of lispro and PH20 and regular insulin with PH20 versus either insulin alone.

This is an important demonstration that the accelerated PK profile associated with co-administration of PH20 can result in a clinically meaningful reduction in post-meal glycemic excursion, an important component of diabetes management. Results from a Phase I dose ranging PK glucodynamics safety and tolerability study, was also recently presented at the IDF or International Diabetes Federation’s Triennial World Diabetes Congress in Montréal in October.

This study was conducted in order to determine the optimal ratio of enzyme to insulin concentration that should be utilized in our future clinical trials. The results demonstrated that PH20 is a potent enhancer of insulin absorption over a wide range of concentrations, 0.3 to 80 micrograms per mil with an optimum effect at about 5 micrograms per mil. Observed adverse events were generally mild and PH20 was well tolerated when co-injected with either a regular human insulin or insulin lispro.

An intra-subject variability study began dosing in March and the results will be presented tonight at the Diabetes Technology Society Meeting in San Francisco. A problem in diabetes management is that the amount of insulin absorbed the patient can vary from dose to dose. This trial characterize the PK and GD response and associated variability in each subject for two doses of each test drug, insulin analog alone, insulin lispro with PH20 and regular insulin with PH20.

The study evaluated and quantified the ability of PH20 to produce a more consistent PK profile relative to both time related and exposure related PK variance produced by the insulin analog alone. Some of you are probably curious about our partnering strategy and the timing for such a decision with regard to our ultrafast insulin program. We are a data driven organization and 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.

Results of our first two treatment studies, the one that compares regular insulin with PH20 to analog insulin alone will be available in mid-2010. Our second treatment study should be getting underway in mid 2010 and will compare analog insulin with and without PH20 and we would have results about a year later in mid-2011. We believe the results for these two studies will be inflection points for a potential licensing decision and will likely provide key information that a potential partner would evaluate to make that decision.

In the meantime, we are prepared to move forward and fund these studies ourselves as we continue to generate data and build value for the program. Critical patents for the insulin analogs NovoLog and Humalog expire in the US in 2014. And the improvement of these insulin products with our technology may serve as an important tool for lifecycle management and franchise preservation.

Our technology could also provide an opportunity for a company with an existing endocrinology franchise without a presence in the insulin market to extend and broaden its product offerings. As you can tell, our insulin program is moving forward at full speed with a broad array of capital efficient clinical investigations underway with a potential for multiple value inflection points in the future.

So now let’s shift over to our PEGPH20 oncology program. The pegylated version of our hyaluronidase enzyme began its first Phase I clinical study earlier this year and is still in early stage development. Pegylation of the enzyme increases its half-life from less than one minute to about 24 hours. This trial in cancer patients with refractory solid tumors is a range finding repeat dose pharmacokinetic and pharmacodynamic safety trial of PEGPH20 administered IV as a single agent.

The study is designed to determine the recommended dose for future trials and to evaluate the safety and tolerability of PEGPH20. A wide array of solid tumor types produce hyaluronan, or HA, including prostate, ovarian, breast, colon, pancreas, and gastric. Based on this observation, we believe that our pegylated hyaluronidase enzyme may eventually play an important role in solid tumor treatment.

Halo has conducted tests in animal tumor models that produce HA and found that removal of HA with our novel PEGPH20 enzyme occurs in a dose-dependent manner, which results in a meaningful reduction in tumor size and prolonged time to progression compared to controls. So that’s our oncology program.

Now I am going to briefly speak about our dermatology program. Preclinical activities are continuing in our dermatology program for HTI-501, a human, not bacterial, lysosomal enzyme also known as recombinant human enzyme [ph] that degrades collagen accumulations found in many medical conditions. We have been conducting studies in animal models to learn more about the dosing, formulation, and characterization of this new enzyme.

We expect preclinical investigations to continue through 2009 followed by cGMP manufacturing in 2010 in preparation for clinical testing. We believe HTI-501 may play a role in both medical and aesthetic dermatology applications such as cellulite, Dupuytren’s contracture, and other orthopedic complications.

So those are the latest updates on our proprietary product programs and as well as our development partnerships. Our programs continue moving forward and we are pleased by their steady progress.

Now I will turn the call over to Kurt Gustafson for his financial commentary.

Kurt Gustafson

Thank you, Jonathan, and good morning, everyone. The net loss for the third quarter of 2009 was $13.9 million, or $0.16 per share, compared with a net loss for the third quarter of 2008 of $10.9 million, or $0.14 per share. For the nine months ended September 30th, the net loss was $45.7 million, or $0.54 per share, compared with a net loss of $31.8 million, or $0.40 per share for the comparable period last year.

Revenue for the third quarter of 2009 was $3 million, compared to $2.5 million for the third quarter of 2008. Revenues under collaborative agreements for the third quarter of 2009 were $2.6 million, compared to $2.2 million for the third quarter last year. Revenues under collaborative agreements for the third quarter of 2009 consisted of the amortization of license fees and a milestone payment received from Baxter and Roche as well as the reimbursement of research and development work for our partners.

Research and development expenses for the third quarter of 2009 were $13.2 million that compares to $10.1 million for the third quarter in 2008. This is primarily due to an increase in the clinical trial expenses as a result of higher spending on the ultrafast insulin program, and an increase in our R&D headcount.

SG&A expenses for the third quarter of 2009 were $3.7 million, compared to $3.5 million for the comparable period in 2008.

Our financial position remains solid with cash and cash equivalents of $77.6 million as of the end of September 2009. That compares with $63.7 million as of December 31st, 2008. Our net cash burn for the third quarter of 2009 was $11.6 million. Excluding the proceeds of the $40 million from our equity financing in June, we are still comfortable with our net cash burn guidance of between $30 million and $35 million for the year.

We are in the midst of our budget planning process right now, and so, we would expect to provide financial guidance for 2010 when we report our results for the fourth quarter of 2009 and should be in the first part of next year.

I will now turn the call back to you, Jonathan.

Jonathan Lim

Thanks Kurt. At Halozyme, I believe we are making tremendous progress in advancing both our proprietary programs and our partnerships as rapidly as we can. So with that overview, let’s open it up for questions. Operator?

Question-and-Answer Session

Operator

(Operator Instructions). And your first question comes from the line of Eun Yang.

Eun Yang – Jefferies & Company

Thanks. Regarding the Baxter collaboration for subcu GAMMAGARD, CSL also has subcutaneous immunoglobulin product that is currently under regulatory review. Could you Jonathan – could you comment on the difference between CSL product versus subcu GAMMAGARD from Baxter?

Jonathan Lim

Yes, so the CSL product which is called Vivaglobin is essentially a product that’s given subcutaneously. The problem with IGG when you take IGG without enzyme and you try and inject it subcutaneously is the fact that it has very low bioavailability or absorption in the bloodstream relative to the IV. So the bioavailability is on the order of roughly 63% or so. And as a result of that, you have to give a super high dose, so you have to give about 135% of what you would normally give.

You have to do it through multiple injection sites, often four to six injection sites because you got to fractionate the doses and then you also have to give it weekly instead of monthly. So the benefit of subcutaneous GAMMAGARD with PH20 is the fact that the bioavailability in the Phase I-II study showed that the BA goes up to 93% or 92% and therefore allowing you to give just the usual dose of GAMMAGARD subcu through just one injection site and through once-monthly frequency instead of once weekly.

So from a convenience perspective, the value to the patient is significant, because they can continue to get the GAMMAGARD as an outpatient therapy through one injection site on a monthly basis.

Eun Yang – Jefferies & Company

Okay. And that’s helpful. And one question around financials, OpEx for third quarter was a little bit down sequentially. Is that the third quarter raised rate that we should assume for the remainder of the year?

Kurt Gustafson

I think typically our third quarter is a light spending just over the summer time periods. And I think if you take a look at our nine-month results and used that that might be a better trending sort of number.

Eun Yang – Jefferies & Company

Okay. Thank you.

Operator

And your next question comes from the line of Terence Flynn.

Terence Flynn – Lazard Capital Markets

Hi, thanks for taking the question. Just I was wondering if you guys can comment on now that Roche has announced the start of the Phase III Herceptin trial which is the first one under that collaboration, if that’s generated any interest among new potential partners and maybe you can provide us some insight into any discussions there. Thanks.

Jonathan Lim

Sure. Yes, any – what I can say Terrence is that any validation that we display with our existing partnerships is good signals to ongoing discussions with prospective partners. So the simple answer is yes. That’s a a major milestone for the collaboration with Roche and it’s beneficial for business development activities which continue to be underway.

Terence Flynn – Lazard Capital Markets

Okay. Thanks a lot.

Jonathan Lim

Sure.

Operator

(Operator Instructions). And your next question comes from the line of Chris Geston.

Chris Geston – UBS

Good morning.

Jonathan Lim

Good morning, Chris.

Chris Geston – UBS

This may have been answered somewhat, but along the lines of the partnership question, you have given some additional color on all that goes into those discussions, the analysis both from the potential partner and your side. Could you give any more detail as far as what you are the profile of what you all are looking for – how many serious candidates are in that process, given that it can take 12 to 18 months I think that’s what you said, and what the tone those are, and just your idea of probability and optimism?

Jonathan Lim

And Chris is your question with respect to insulin or Enhanze Technology or both?

Chris Geston – UBS

Partnership in all phases, all areas.

Jonathan Lim

Okay.

Chris Geston – UBS

Partnership discussions.

Jonathan Lim

Well, what I can say is that just laying out the process to answer your process question. Typically, you give a non-confidential presentation to the prospective biopharmaceutical partner. And then if there is further interest, then you both parties sign a CDA or a confidentiality agreement, and then a confidential presentation is given. And then after that, if there is further interest, then it can proceed to an MTA or a material transfer agreement.

And from the MTA, that’s a proof-of-concept animal study typically for the partner to run a study or two with the enzyme plus their candidates. And then from there, if there is further interest, it goes to term sheet discussions and then to contract discussions. So that basically is the process. And that process can often times take a while with the prospected partners. And so what we have said is that we continue to move folks along that process and there is multiple parties that are moving along in different phases.

Chris Geston – UBS

And includes term sheet base, proof-of-concept base and everything.

Jonathan Lim

Yes, I mean I am going to give you a detailed breakdown, but what I can say is that we are advancing discussions in with every new milestone in validation of existing partnerships, all of that is very helpful.

Chris Geston – UBS

Thank you.

Operator

And your next question comes from the line of Andrew Vaino.

Andrew Vaino – Roth Capital Partners

Hi, just a quick question on the pegylated hyaluronidase the Phase I study. In terms of the adverse events, you guys can be looking specifically at effects on joint movement and the like?

Greg Frost

Hi Andrew, it’s Greg Frost here. Yes, obviously the program has all of the standard criteria to look for at any AE profile going through in addition to the pharmacokinetics and as well as pharmacodynamic markers if looked at. Obviously as you can imagine from the standpoint patient population is going through, always going to be comorbidities and other elements going through. But the groups that are running this are very experienced as far as teasing through all those sorts of things.

Andrew Vaino – Roth Capital Partners

Okay, thanks. And on the program for the dermal scalping, can I assume since you guys are going to start the GMP manufacturing next year that a Phase I clinical or an IND filing won’t be until the last half of next year or first half of 2011?

Greg Frost

Yes in essence what we would like to do from the stamp and I think it’s a good ideas to check in mid next year when we go through. From a development standpoint, I think you are aware the sets that go through as far as GMP manufacturing and then IND enabling toxicology.

But because in each process there is different gates where there can be elements from timing that we think it’s best to go through and check in mid next year, we can give you probably some more granularity about specific timing at least (inaudible) is going to be what quarter sort of thing you might be looking at.

Jonathan Lim

But it’s an element that’s just better to give more granularity next year.

Andrew Vaino – Roth Capital Partners

Great, thanks.

Operator

And your next question comes from the line of Jonathan Aschoff.

Jonathan Aschoff – Brean Murray, Carret & Co.

Hi guys, good morning.

Jonathan Lim

Hi Jonathan.

Greg Frost

Jonathan.

Jonathan Aschoff – Brean Murray, Carret & Co.

I was wondering if you could help me understand the GAMMAGARD population or is there any – are there any sub populations that would be extremely rapid adopters of a subcu version, are there any reason that any population would be particularly slow geographically whatever reason there is? And afterwards if this were to work, is there any reason Baxter or whoever want to continue offering an IV version?

Greg Frost

Yes I can go through and speak a little bit to the prevalent element going through. There are certain indications – so if you look today, for example, about 40% of all IGIV is administered from home infusion services going through, so those are obviously the first key targets we think that make sense.

As far as sub populations, there are things for example Kawasaki’s disease which are rare indications for IGIV products. But these aren’t given in either acute settings or other areas where they are predominantly administer in a hospital setting while they comprise a very small part of the overall market. Those would be specific areas where we wouldn’t see rapid adoption. So obviously you can go through and say that people that are on subcu today, those are going to be your early adopters and then probably the folks that are using the product at home.

Jonathan Aschoff – Brean Murray, Carret & Co.

Okay. You were saying 40% at home.

Greg Frost

If you go back, there is a meter deficiency surveys that goes through an absolute breakdowns of these products, little bated, but still quite relevant.

Jonathan Aschoff – Brean Murray, Carret & Co.

Okay thank you very much.

Operator

And there are no further questions at this time.

Jonathan Lim

All right. Well, thank you everyone for joining us on this call. As I mentioned in our opening remarks, Halozyme has accomplished an impressive list of milestones in 2009. Our ultrafast insulin program has advanced into Phase II and additional studies continue to build value for the program.

Roche has started its first Phase III registration trial for a subcutaneous formulation of Herceptin with PH20 resulting in a $5 million milestone payment to Halozyme. Baxter’s Phase III registration study for subcutaneous GAMMAGARD with PH20 is fully enrolled and is expected to be completed by the end of 2010. The launch of Hylenex is underway for pediatric rehydration with the substantial marketing resource commitment by Baxter.

In June, Halozyme successfully completed a $40 million equity financing when the window for biotech first opened. We expect the momentum for many of our activities will continue into 2010 when we look forward to updating you on our future progress. Halozyme’s business strategy strikes a balance between proprietary product development programs and partnerships with other companies that aim to leverage a core technology and knowledge base.

We continue to operate in a capital efficient manner as demonstrated by our use of $34 million of net cash for the year 2008, followed by our net cash burn of approximately $25 million during the first nine months of 2009, excluding the effect of the June financing. We believe our strategy will provide multiple opportunities for success that can drive significant value for our shareholders.

We look forward to updating you again soon on our progress and we will be participating in the Lazard Capital Markets Healthcare Conference in New York on November 18th, and we will also be at the JPMorgan Conference in San Francisco during the second week of January.

Again, thank you for your interest in Halozyme and for your participation in today’s call. Take care, everyone.

Operator

And this concludes today’s conference. You may now disconnect.

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