Schond Greenway - Executive Director, Strategy and IR Helen Torley - President, Chief Executive Officer and member of the Board of Directors David Ramsay - Vice President, Chief Financial Officer Athena Countouriotis - Senior Vice President & Chief Medical Officer Jim S. Mazzola - Vice President, Corporate Communication and Investor Relations

Jessica Fye - JPMorgan Andrew Peters - UBS Arlinda Lee - MLV & Company Kennen Mackay - Citigroup Global Markets Inc

Good afternoon, and welcome to the Halozyme Therapeutics First Quarter and 2015 Financial Results Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this call is being recorded. It is now my pleasure to introduce your host, Schond Greenway, Executive Director, Investor Relations and Strategy at Halozyme Therapeutics. Mr. Greenway, you may begin.

Thank you, operator. Good afternoon, everyone, and welcome to Halozyme's first quarter 2015 financial results conference call. Leading our call today is Halozyme's President and Chief Executive Officer, Dr. Helen Torley. Helen will provide an overview and update on our business. Following on, David Ramsay, our Chief Financial Officer, will review our financial results. Helen will then issue some closing remarks after which, we will open the call to your questions. Also participating on today's call is Dr. Athena Countouriotis, our Medical Officer and Jim S. Mazzola our Vice President of Corporate Communication and Investor Relations. We also posted slides to accompany today's webcast which may be found on the investor section of our website along with our earnings materials. Before we begin, let me remind you that during this conference call, we will be making forward-looking statements. All statements made during this conference call that are not statements of historical fact constitute forward-looking statements. The company's actual results may differ materially from those expressed in or indicated by such forward-looking statements. For description of the risks that may affect the outcome, please refer to our quarterly and annual filings with the Securities and Exchange Commission. I will now turn the call over to Helen.

Thank you, Schond. Good afternoon everyone and thank you for joining us today. It really a pleasure to update you all on our recent progress, I'll begin with a review of our strategy and the progress we made against it during the quarter, then David will cover our financial results in greater detail before we take your questions. The first quarter was marked by strong execution on both sides of our two pillar strategy. The first pillar is our oncology business, with our investigational drug PEGPH20 at its core. We're currently studying PEGPH20 and pancreatic and non-small cell lung cancer, but see broader potential applicability in its use in multiple tumor types in combination with chemotherapy and monoclonal antibodies. And we are also excited to begin exploring the potential to improve the effectiveness of immune oncology agents. Our work in oncology is in part funded by the second pillar of our strategy which is centered on licensing agreements with (ph) [Mark E] partners including Roche, Baxter, Pfizer, and Janssen. These partners co-formulate our co-administer, the authorities with our enhanced platform to introduce subcutaneous dosage forms as is we taste with Herceptin SC and MabThera SC or change the frequency or number of injections required. An example of which is HYQVIA. Our financial results are driven by the second pillar, and we are pleased to report $18.7 million in revenue in the first quarter. A year-over-year increase of approximately 56%. Royalty revenue grew over the prior quarter by nearly 70% to $6.8 million reflecting predominately Herceptin SC sales in October, November, and December of 2014. We expect the ramp in partner product sales to continue in 2015, which keeps us track for the full-year guidance we provided last quarter. With that summary of our strategy, let me now provide a more comprehensive update on our progress in the oncology pillar. Our vision at Halozyme is to establish PEGPH20 trendy as a foundation of therapy for solid tumor malignance in combination with the broad range of today’s cancer therapies including immuno-oncology agents. Our current and future clinical programs target a range of solid tumors, where there is a high accumulation of hyaluronan. Hyaluronan or HA is a glycosaminoglycan, which is a chain of natural sugars that can accumulate around cancer cells and block access to the tumor. PEGPH20 works by degrading HA to improve access for chemotherapy and immune-oncology agents with the potential benefit of increasing the effectiveness and bringing new hope to the many patients who are underserved by current therapies. We believe that if we are successful in showing PEGPH20 to be effective in pancreatic and non-small cell lung cancer populations, achieve our target product profile in terms of efficacy and safety and gain marketing authorizations. PEGPH20 has the potential to become a blockbuster oncology brand. Now let me provide an update on our pancreatic cancer program, Study 202 is our ongoing Phase II trial in metastatic pancreatic ductal adenocarcinoma patients and has two stages. At our Analyst Day in January, we presented interim results from 146 randomized patients enrolled in stage one of study 202, evaluating PEGPH20 with ABRAXANE and gemcitabine, versus ABRAXANE and gemcitabine alone. These data are summarized in Slides 4 and 5 of the presentation and the full data set is available in our January 7, 2015, SEC filing. Shown in Slide 5, in retrospectively defined select population, there was that statistically significant doubling in median progression free survival and patients with high levels of HA treated for PEGPH20 plus ABRAXANE and gemcitabine compared with ABRAXANE and gemcitabine alone. The potential risk profile was also evaluated and is highlighted in Slide 5. The combination therapy including PEGPH20 was generally well tolerated with peripheral edema, muscle spasms, and neutropenia, the most frequent treatment related adverse events reported at a higher rate in the PEGPH20 arm. Treatment emergent thromboembolic events occurred in the PEGPH20 treatment arm at a rate of 42% compared with 25% in the ABRAXANE and gemcitabine alone arm. Stage two of Study 202 refers to the stage post implementation of a protocol amendment, which excluded patient’s at higher risk of TE events and in which low molecular heparin prophylaxis was added for all patients. Efficacy, safety, and the rate of thromboembolic events compared to the stage of one portion of being evaluated. Enrollment of the additional 114 patients is on track to complete by the end of the year, and I can say that we are seeing an encouraging reduction in the rate of TE events compared to stage one. Turing now to Slide 6, one of our goals in 2015 was to discuss the benefit risk profile of PEGPH20 with the U.S. Food and Drug Administration, and the potential to move forward with the Phase III study in pancreatic cancer patients with high HA. During the quarter, we discussed the study of part of (ph) [type E] meeting with the agency, Athena Halozyme group in the meeting, which also included two key opinion leaders in the pancreatic cancer field. The tone in the sentiment of the meeting was positive and certainly very help as we plan for our Phase III study, which will be global trail and will focus on metastatic pancreatic ductal patients whose tumors accumulate high levels of HA. As we are doing Study 202 we will evaluate on PEGPH20 ABRAXANE and gemcitabine compared to ABRAXANE and gemcitabine alone. We discussed the trial design with the FDA where we proposed progression free survival or PFS and the overall survival as two separate primary endpoints. As we communicated in our April 8 commencement FDA supported PFS as a primary endpoint and noted that its potential use for marketing applications will be subject to the magnitude of the PFS treatment effect observed the toxicity profile and the interim overall survival data. While there was general agreement on the design and key elements of our global Phase III clinical trial the specific details including the proposed number of patients are currently being finalized. And we also expect to receive feedback from the European Medicines Agency in the second half of 2015 and we’ll seek to incorporate their feedback into the final protocol. As the trial design is finalized more details will be provided at the time of the study start. Now let me say a few words about our companion diagnostic, we plan to use a proprietary diagnostic to prospectively identify and select patients with high levels of HA for Phase III trial with the goal of seeking to increase the probability of clinical trial success by identifying the patients whom we believe are most likely to benefit from PEGPH20 treatment, as we anticipated the FDA provided feedback supporting the selection of high HA patients and confirms that an Investigational Device Exemption or IDE will be required partly initiating the Phase III study. The IDE is a regulatory application that we will use just to summarize the methodology, validation, and proposed high HA cut points for patient selection. Our proprietary HA binding protein will be the foundation for the companion diagnostic given its high degree of specificity and sensitivity and as we mentioned in January, it’s our goal to enter into a partnership for the final stages of companion diagnostic development and commercialization. We are in late stage discussions with potential partners whom we believe will provide additional expertise including support of the IDE submission. So to summarize the upcoming milestones for our pancreatic cancer program, it’s our goal to complete enrolment in stage two of Study 202 by end of the year and if you recall this is an event driven study with PFS as a primary endpoint and it will be our goal to present the data as an appropriate scientific form in 2016. Secondly we plan to finalize the specifications of our companion diagnostic and submit an IDE to support initiation of patients screening in the planned Phase III study by the end of 2013 and thirdly on unparallel we will finalize the design of a Phase III study with input from the EMA to remain track for the Q1 2016 initiation and patient enrolment. Now I will turn to our non-small cell lung cancer program, a preclinical model support the PEGPH20 for a broad range of solid tumors and we selected non-small cell lung cancer as the next tumor setting to explore. The primal study is designed to evaluate PEGPH20 in combination with docetaxol as a second line therapy for patients with locally advanced metastatic non-small cell lung cancer. This study will enroll previously treated patients who did not respond adequately or lost their response to a platinum based regimen, the initial Phase 1b portion is designed to evaluate and identify the dose schedule and safety of PEGPH20 plus docetaxol, enrolment and dosing are ongoing and we expect to complete this phase in the third quarter of 2015 the timing of which will depend on the number dose escalation cohorts required. The start of the Phase II portion of the study will follow the evaluation of the Phase 1b data now while we are studying PEGPH20 in combination with chemotherapy today the standard of care in non-small cell lung cancer is expected to evolve to include immuno-oncology agents in the future. Today we are enhancing our goals to initiate a Phase 1b study of PEGPH20 with Keytruda, pembrolizumab and a non-small cell lung cancer patients who have failed response to a platinum based regimen, with this study which will start in the second half of 2015 we plan to initiatively evaluate the dose safety and tolerability before expanding into our Phase II study of patients selected dose. This trial is a Halozym sponsored trial and the Phase 1b portion is being conducted at a leading oncology center with Keytruda experience. Now let me switch gears and provide you with the deeper look of progress in the upper pillar of our strategy and that our enhanced drug delivery platform. Our enhance technology can be used in combination with a variety of other drugs and as applicable across many therapeutic categories The value per proposition we may offer partners and patients include lifecycle management with the opportunity to prolong the exclusivity period for the combined product and the ability to reduce dosing frequency and duration by taking drugs from an IV to subcutaneous formulation. Turning to Slide 7, and an update on our product development programs with Roche, we continued to be please with the uptake of our sets in SC. Recent comment from Roche confirmed that her sets in SC is now launched in 44 markets with the patient share that exceeds 30%. Roche had additionally indicated in at least five markets the conversion rate is more than 60%. Based on recent comments from Roche, we expect continued growth in SC market share versus the IV product through 2015 as our Herceptin SC continues to gain share and is launched in additional countries. Turning to MabThera SC, while the product continues to be in its early launch pace having launched in June of 2014, recent comments from Roche indicate that MabThera SC has received a positive reception in a number of countries as well as experienced good uptake particularly in the maintenance setting of hematological indications. Which also disclose that in the fourth quarter of 2014 not MabThera SC was filed in Europe for previously untreated chronic Lymphocytic leukemia? Now let’s turn to review the pervasive we've been making with our collaboration with Baxter which is shown on Slide 8. On its first quarter conference call, Baxter described HYQVIA which was launched in the U.S. in October of 2014 as a transformational therapy within an attractive value proposition for patients, physicians and cares. Baxter estimates that the global market for primary immune deficiency PID is approximately $2 billion with only approximately 35% of patients proceeding subcutaneous therapy today. As reported by Baxter HYQVIA continues to experience a favorable reception in the U.S. marketplace based on its differentiation. Of the 15,000 adult PDI subcutaneous patients approximately 1500 of these patients are on HYQVIA with the majority converting from competitive subcutaneous therapies. And with the launch now well under way Baxter is also evaluating additional potential indications for HYQVIA including CIDP. With that and I’ll turn the call over to David Ramsey to discuss our financial results for the quarter in greater detail. David.

Thank you, Helen. And welcome to the call everyone. If you turn to Slide 10, you will see the revenues for the first quarter of 2015 were $18.7 million compared to $12 million for the first quarter of 2014. Revenues in the first quarter included $6.8 million in royalty revenue from sales and products under collaboration agreements, $6.1 million in product sales rHuPH20 for user manufacturing collaboration products for Roche, $3.8 million in Hylenex product sales and $2 million in collaboration revenues. Royalty revenue grew approximately 70% sequentially to $6.8 million in the first quarter reflecting sales in the October to December 2014 period. This is up from $4 million in the prior quarter. The key driver of this increase in royalties has been increasing sales of Herceptin SC. As we continued to see new countries launching Herceptin SC, MabThera SC and then increased conversion coupled with the recent launch of HYQVIA in the U.S. We expect over the next several quarters to see continued uptake and sales of these partnered products. Turning to slide 11 for a more detailed breakdown of our P&L now. Research and development expenses for the first quarter of 2014 were $16.7 million compared to $21.4 million for the first quarter of 2014. The decrease was primarily due to a planned reduction and expense associated with the diabetes program. Selling, general and administrative expenses for the first quarter of 2015 were $9.4 million compared to -$10.3 million for the first quarter of 2014. The decrease was primarily due to the client and compensation related expenses. The net loss for the first quarter of 2015 was $15.1 million or $0.12 per share compared to a net loss of the first quarter of 2014 of $26.5 million or $0.22 per share. Cash, cash equivalents and marketable securities were $128.5 million at March 31, 2015 compared to a $135.6 million at December 31, 2014. Net cash used in the first quarter of 2015 was approximately $7.1 million. I will not turn the call back to Helen, who will provide some closing comments.

Thank you, David. In closing, as you’ve just heard, we made excellent strategic and operational progress during the quarter. We’ve moving forward with our plans for our Phase III study falling a key end of Phase II meeting with the FDA. We are making additional investments in our oncology franchise based on the encouraging data we’ve seen in preclinical model about how PEGPH20 could benefit patients with the range of different humor types. And we continue to see the value of our enhanced technology demonstrated through the positive results of our partners. As I stated in our year end call, 2015 promises to be a very exciting year for Halozyme. We continue to work them diligently to execute our strategy, drive value in our program and build on the momentum we have gained or generated since the beginning of the year. Some of our key upcoming events are detailed on Slide 13 and these include presenting interim results from our 202 study at the annual meeting of the American Society of Clinical Oncology which will be at the end of this month. Completion of enrollment in study 202 by the end of 2015 continuing Phase 1b enrollment and dosing for our Phase 1b2 primal study in non-small cell lung cancer. Discussing the Phase III study designed with the European Medicines Agency, signing a partnership for companion diagnostics for PEGPH20 initiating our immuno-oncology study evaluating PEGPH20 with Keytruda and finally it remains in our goal to support progress in our current partner advancing products into the clinic and to sign new enhanced partnerships. I want to close by thanking the Halozyme team for another quarter of strong execution and focus on driving those program that benefit patients, supporting the work of our partners and driving value for our shareholders. We’re now ready to take your questions. Operator, would you please open the call for questions.

Thank you, Ma’am. [Operator Instructions] Our first question will come from Jessica Fey from JPMorgan.

Hey, guys, thanks for taking the questions.

Hi, Jessica.

Hello, Hi.

I guess I have a couple, but first, Helen, I think in your prepared remarks you said you are seeing an encouraging reduction in the rate of TE events compared to stage one. I guess what’s that data point based on, is that overall or is that comment specific to the PEGPH20 arm?

Jessica, it’s actually specific to both treatment arms. Actually we believe the low molecular heparin in particular it’s probably having an effect in both arms. So it would be both arms.

Okay. Great. And then, maybe the FDA’s decision to are you to file on PSS data from Phase III, I mean I guess I would assume that’s predicated on a magnitude benefit that they felt was possible based on the Phase II data or at least the interim Phase II data. How should we think about what the hurdle is to be able to file on PFS from an efficacy standpoint?

While we have a general discussion with regard to PFS as an endpoint and obviously the - you saw the data that we showed in January that showed the dumpling in PFS and the high HA population, PFA did not give specific guidance on the magnitude of the benefit, that is something I’ve see it and the team are working through as we finalized our protocol. So I can’t give you any more specifics on that as of this time.

Okay. Got it. And then, on the Opteva and combo study I think you mentioned your goal was to initiate Phase Ib using Keytruda and Halozyme sponsored study, I guess, can you help us what factored into selecting that product as opposed to Opteva and were there conversations previously with Merck about a correspond trail that didn’t advance for some reason.

Yes. We did inconsiltation with our global advisors – look at all of the available data Jessica to say which PD1 inhibitor we might want to study and we obviously also looked at the data ourselves. Based on that assessment that’s really what led us to decide we would study with Keytruda. We certainly do intend to do clinical collaboration later this year, but for this particular study it was our decision to move forward in a Halozyme sponsored study with the goal of starting it down in the third quarter.

Understood. And then maybe just one last one. Forgive me if I misheard you, but I think at the very end of your prepared remarks did you say you are looking forward to moving into Phase III after and end of Phase II meeting and does that mean that Phase II or some element of Phase II has to be complete before you start Phase III?

No Jessica sorry if I may have misstated something. The end of Phase II meeting has happened that is the one that we had in March of this year, what we intend to do is to start Phase III at the end of the first quarter of 2016, we will file an IDE for the companion diagnostic to support that but this time we don’t expect any additional need for any end of Phase II meetings with the FDA.

Okay. So we don’t have to wait for the completion of 202?

No we do not have to wait for the completion of 202, although we will be continuing to report the results of that launch, rest of the data but we are not waiting for that data.

Okay. Got it. Thank you.

Thank you. Our next question comes from Kennen Mackay from Citi.

Hi thanks for taking my question, I have a question on the – study that came out this quarter there is lot of evidence suggesting PEGPH20 really reinstall contributes to access to solid tumor given the cough therapies have had some issues with solid tumor access have you been in discussion with [indiscernible] companies who have the potential to combine with PEGPH to increase the selling and this is something that you are capable considering?

Kennen thanks for that question, we are certainly are excited by the data that was presented at AACR and the potential to be able to we combined also with CAR-T as you know they are quite early in their development in terms of solid tumors but based on the mechanisms we understand to-date we certainly see that as potential and something that we are going to be continuing to follow upon and potentially exploring the future.

Got it, that one is terrifically exciting and then just on the continuing Phase II study wondering what you are sort of hoping to get out of that and if the FDA required you to keep that going and if that still be need to sort of refine the outlines of the companion diagnostic and any other sort of color you can provide us to why you are continuing that stage?

Thanks I am going to Athena to address that

Hi Kennen thank you for that question. The first thing I would say is in regards to the Phase III study we do believe that the stage 1 component is robust dataset and clearly the discussion with the FDA revolved around not only the overall benefit risk that focused predominantly on Stage 1 PFS, but also overall survival and as Helen mentioned the encouraging reduction we are seeing in the rate of TEs in Stage 2 we are continuing to follow Stage 2 clearly to increase our safety database but as Helen said it is not rate limiting to start off the Phase III.

Got it. Thank you very much.

Thanks Athena.

Thank you. Our next question comes from Charles Duncan from Piper Jaffray.

Hey it is Ryan for Charles. Thanks for taking my question that is on the – combo plan is very exciting just couple quick ones I guess no general order but has Roche ever indicated what expects for peak conversion rate is there any reason that it won’t be 100% or shouldn’t be 100%?

Roche has not provided any guidance as to what we think the peak conversion will be I certainly think like we are delighted with the over 30% conversion in the – markets to date and some markets already over 60% but no specific thoughts from them as to the peak.

And there is no technical reason for every patient in our converted are accurate or would there be…

So I think if you recall some of our previous investor slides we did lay out some just to give a sense of the size of the markets for the Ex -, the side of the addressable population not absolutely every user [indiscernible] is indicated for the SC portion that is indicated for the IV, the vast majority is but if you refer to those slides that will give you I think a picture of that. The vast majority though is accessible and addressable to Herceptin and MabThera SC.

Okay. What is a general timeframe on IDE approval?

So within IDE, what the FDA is 30 days period for the can review it and if there are no comments the company proceeds.

Okay. Great and then I’m not choosing the good question but you guys are planning to report the – data from Stage 1 right at some point in the future and would you look for Stage had one arm within valuable median and another that is undetermined do you think it is still best time or you look for the data to be matured?

We do plan to present the data when it is matured and we do expect to report that in the upcoming scientific meeting.

Okay, great. Thank you.

[Operator Instructions] Our next question comes from Andrew Peters from UBS.

Hi guys thanks for taking my questions and congrats on progress. A couple of quick questions I guess the first on the second part of the 202 study, with the late 1Q start of the Phase III it seems possible that you could have that data prior to the start of the Phase II Iwas just curious what the FDA has set around possible follow up meetings if necessary or you going to provide that data to the agency if it is available before starting to Phase III and then just secondly while I think it makes sense to start the combination study with – do you have plans to start maybe a second study with – in the future to provide kind of a broader data set around different immune-oncology agents? Thanks.

Thanks Andrew with regard to 202 we do expect to complete enrolment by the end of this year, it is an event driven study and so when we can report the PSS data is obviously going to be very dependent on the rate of events we see but for us to start the Phase III trial we do not need to report CFT data from study 202 we will obviously will do so when that data is available as just part of our ongoing safety reporting to the FDA and with regard to the broader program of PEGPH20 and immune-oncology we do see PEGPH20 just based on the data we have generated to data as I have potential to increase the efficacy of this immune-oncology agents so I think I can agree with you that the Keytruda an exciting start, we do plan to expand beyond that over time and as I mentioned we expect to sign clinical collaboration through the course of this year and next year to help us expand our immune-oncology program.

Great. Thanks.

Thank you. Our next question comes from Arlinda Lee from MLV.

Hi, Guys. Thanks for taking my question. Could you may be provide an update on what the follow-up is for the 202 addition that are still on trail from the data that you presented in January. And then separate on after the immuno-oncology part, can you maybe help us understand what kind of data have you seen in the past, and why are you encouraging about this particular combination of the first starting point. Thank you.

I’m going to ask Athena to address the question on 202 follow-up.

Hi, Arlinda.

Hi.

So as you may remember in January in our Analyst Day presentation for – we had two different data cuts as reminder, the April data cut, predominantly driving the overall response rate, which was a median three month, a follow-up and the progression free survival announces that was a data card of December of last year with approximately a seven month follow-up. We can’t provide more guidance obviously the ASCO abstracts will come live on Wednesday and then will more details to follow.

Okay.

With regard to the immune quality data if you recall from the data represented in January 7, we are excited have been able to see certainly in vitro study, the ability of PEGPH20 to increase the access of both PD1 and PDL1 inhibitors, as well as immune cell into tumor cell. And it really is that data has encouraged us to be able to – I mean afford in a clinical study to identify, can we do that same in the clinical setting Arlinda.

Okay. And then maybe as a follow-up on this your decision, I know that you haven’t have discussion with the European Agencies yet but could you maybe help us offer it if you are planning to trying to do one registration platform for both U.S. and Europe, how they might work and they have different space or what's the time line is for that?

Certainly Orleda it’s our goal to do a single study to satisfy both agencies. We expect to have feedback from EMA in the second half of this year and we do expect to receive input that will allow us to do a single study and that's our plan at this point in time.

Okay great. Thank you very much.

Thank you. Again, we are now holding for questions. [Operator Instructions] Dr. Torley, there are no further questions at this time. I'd now like to turn the call back over for closing remarks.

All right. Thank you so much to everybody for joining us today. As you heard great progress by the team here at Halozyme through the first quarter, we look forward to continuing this momentum in 2015 and we look forward to updating you next quarter. Thank you very much

Thank you. Ladies and gentlemen, this concludes today's conference. You may now disconnect.