Jim Mazzola – Vice President and Investor Relations Helen Torley – President and Chief Executive Officer Laurie Stelzer – Senior Vice President and Chief Financial Officer Athena Countouriotis – Chief Medical Officer

Charles Duncan – Piper Jaffray Andrew Peters – Deutsche Bank Joel Beatty – Citi Yanan Zhu – Wells Fargo Securities

Good afternoon and welcome to the Halozyme Therapeutics Fourth Quarter 2016 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] And as a reminder, this conference call is being recorded. It is now my pleasure to introduce our host, Jim Mazzola, Vice President and Investor Relations at Halozyme. Mr. Mazzola, you may now begin your conference.

Okay. Thank you, Carrie, and good afternoon, everyone. Welcome to Halozyme’s fourth quarter of 2016 financial results conference call. Following market close today, we issued a news release with the summary of our results and posted a short slide presentation to accompany the call. You will find both of them on the Investors page at halozyme.com. Leading our call today is Halozyme's President and Chief Executive Officer, Dr. Helen Torley, who will provide an overview and update on our business. Then Laurie Stelzer, our Chief Financial Officer will review the financial results for the September quarter followed by a Q&A period. And also with us today as always is Dr. Athena Countouriotis, our Chief Medical Officer. Before we begin, let me remind you that during this conference call, we will be making forward-looking statements. The Company's actual results may differ materially from those expressed in or indicated by such forward-looking statements. For a description of risks, please refer to our quarterly and annual filings with the Securities and Exchange Commission. Now, let me turn the call over to Helen.

Thank you, Jim. Good afternoon everyone and thank you for joining us today. I’ll begin the call with the key takeaways for the quarter. Firstly, following the release of our positive Phase 2 HALO-202 data last month, we continue to see increased momentum in our clinical development program for PEGPH20. In the HALO-301 study our global study of PEGPH20 in pancreatic cancer patients, patient screenings have increased during the two months of the year and interest from opinion leaders and investigators in our science has never been higher. At the same time, we are making progress in the dose expansion portion of our KEYTRUDA study and waiting for the start of our collaborative studies with Genentech Tecentriq in multiple tumor types. Secondly, we are pleased with the recent progress and have strong confidence in the growth potential of our ENHANZE platform, which is a key differentiator for Halozyme. Data presented at ASH by Genentech and Janssen on their programs using ENHANZE reinforces that value creating potential that exist through our current partnerships. In addition, we foresee continued growth in royalty revenues from currently marketed products. Our team remains focused on delivering new ENHANZE partnerships, as we support existing partners to advance their program. And thirdly, our results again demonstrate the financial strength of our business models. We reported a 65% increase in royalty revenue and exited the year with more than $200 million in cash, the ability to generate revenue as we invest for the future in oncology is a key differentiator of our business model. And continue to distinguish of the company in the fourth quarter. For additional details on our progress, I will start with an overview of our strategy. As a diversified oncology biotech company, we operate our business and make investment decisions in two strategic pillars. The first pillar is our oncology pipeline with investigational drug PEGPH20 at the core. PEGPH20 temporarily degrades hyaluronan, a glycosaminoglycan or chain of natural sugars in that body that can accumulate around certain tumors and constrict the tumor vasculature. In animal models, we have demonstrated that degrading hyaluronan or HA reduces tumor pressure, increasing blood flow and thereby the access of cancer treatments into the tumor. We are most advanced in evaluating PEGPH20 in pancreatic cancer. Each year more than 100,000 patients in U.S. and EU5 were diagnosed with pancreatic cancer. Of which are estimated 65,000 have metastatic disease. PEGPH20 as a targeted therapy being developed for patients with high levels of HA and in the U.S. and EU5 it is estimated that there are approximately 25,000 HA high pancreatic cancer patients annually. With five-year survival of patients with metastatic disease at just 3% that remains major unmet need. And we would expect the high degree of market penetration upon the approval of PEGPH20. We are also evaluating the pan-tumor potential of PEGPH20 in a range of solid tumors. And on an annual basis project that there are an additional 50,000 non-small cell lung cancer, gastric cancer and breast cancer patients who are HA high. Our work in oncology is funded in part by the second pillar of our strategy, which is centered on our licensing agreements with the six marquee partners including Roche, Baxalta, Pfizer, Janssen, AbbVie and Eli Lilly. These partnerships delivered $129 million in annual revenues to the company in 2016. Now let me provide some additional details on PEGPH20 on Slide 2. We are furthest along in our study of PEGPH20 in pancreatic cancer, where last month we reported positive data from our randomized Phase 2 HALO-202 study of PEGPH20 and combination with ABRAXANE and gemcitabine or PAG, compared to ABRAXANE and gemcitabine alone or AG. This study enrolled a total of 279 patients in two stages, we are very encouraged by the results which based on December 2016 data cut make both primary efficacy endpoint of progression-free survival in the total efficacy-evaluable population as well as the primary safety endpoint of a reduction in thromboembolic event rate in Stage 2 of the study. Moving now to Slide 3, in addition to meeting the primary endpoint as we have a targeted therapy what was as important in the results was achieving statistical significance and meeting the secondary endpoint of progression-free survival in the HA high patients. In the Stage 1 and Stage 2 combined population of 84 HA high patients, we showed a 77% improvement in the median PFS or 9.2 months in the PAG arm, compared to 5.2 months in the AG arm with a hazard ratio of 0.51 and a P value of 0.048. For the exploratory overall survival endpoint in the combined Stage 1 and Stage 2 HA high population, the median overall survival was similar between both treatment arms. Given the importance of the recently unblinded Stage 2 HA high patient dataset, we are encouraged by the positive progression-free survival and overall survival finding shown in Slide 4. Given that this population closely mirrors the population currently enrolling, the ongoing HALO-301 Phase 3 study. The Stage 2 data demonstrated a 91% improvement in median progression-free survival with 8.6 months in the PAG arm compared to 4.5 months in the AG arm, a 4.1 month improvement with a hazard ratio of 0.63. And a 50% improvement was demonstrated in median overall survival with 11.7 months in the PAG arm, compared to 7.8 months in the AG arm also a meaningful improvement of approximately 4 months with a hazard ratio of 0.52. What was also important was Stage 2 data validated the Ventana companion diagnostic algorithm of cut points and supported the literature that high HA is a poor prognostic factor. Now moving to the tolerability profile, the treatment-related adverse events in a combined dataset or well balanced with the exception of the highlighted rows shown in Slide 5, or we saw higher rates of peripheral edema, muscle spasms, Neutropenia and Myalgia in the PAG arm that infrequently resulted in treatment discontinuation. Close on the HALO-202 study, the results we reported are supportive of our ongoing HALO-301 Phase 3 study, which is being conducted in a similar patient population. These results are firm and add to our confidence in the potential benefit of PEGPH20. We expect to present the results of study 202 at a medical form in 2017. I also want to remind you that while I summarize the key findings today we have a presentation posted on our website and an archive – our conference call from January 5, with detailed findings for our top line analysis. Moving now to Slide 6, for an overview of our Phase 3 study, HALO-301 is a global double-blind placebo controlled randomized trial of patients with Stage 4 pancreatic ductal adenocarcinoma, prospectively identified and randomized based on high levels of HA. The protocol includes one interim analysis when the target number of progression-free survival events is reached. At the time of the interim analysis if the progression-free survival data shows a significant benefit in the PAG treatment arm, and both the overall survival and overall risk benefit are supportive, these data may form the basis for marketing application in the U.S. and a conditional marketing authorization in Europe. During the fourth quarter and for the first two months of 2017, we made strong progress initiating our global sites. Since our last call, we are now actively screening or ready to screen patients at nearly 200 sites, the study protocol has been approved in all 22 participating countries and we are consistently achieving our three to five day target to analyze patient biopsies and report HA levels to sites. I’m very pleased with the ramp and momentum and projected 2017 will be a year in which we make the strong progress towards our enrollment goals. Turning now to Slide 7, I will now provide an update on our clinical development progress just as a pan-tumor potential of PEGPH20. The PEGPH20 plus KEYTRUDA or pembrolizumab trial is enrolling Stage 3B and Stage 4 non-small cell lung cancer patients and metastatic gastric adenocarcinoma patients who are still at least one chemotherapy regimen. Our goal in this study is to evaluate PEGPH20’s potential to improve the efficacy of therapies targeted to PD-1, as it has been demonstrated in our preclinical models. At the end of 2016, we moved into the dose expansion phase of the study, where we are now selecting HA high patients with either gastric or non-small cell lung cancer. Multiple patients have been dosed and we are targeting at total enrollment of approximately 50 patients at 30 U.S. sites, screening is going well and enrollment is ongoing. Since our last call, we also announced a broad clinical collaboration with Genentech to study PEGPH20 with their cancer immunotherapy Tecentriq or tezolizumab, an anti-PDL1 monoclonal antibody in up to eight different tumor types with studies to begin in 2017. The first study will be a Phase 1b/2 open-label, multi-arm randomized global trial led by Genentech and up to six tumor types, initially focusing on gastrointestinal malignancies including pancreas and gastric cancers. On the most recent earnings calls, we’ll share details of the novel immunotherapy clinical trial platform, MORPHEUS, which is the platform under which the studies with PEGPH20 will be conducted. In addition, Halozyme will conduct a Phase 1b open-label randomized study of Tecentriq in combination with PEGPH20 in chemotherapy in advanced metastatic biliary of gallbladder cancers. Since we are announcing the agreement in November, we have selected our CLO for the study and are collaborating with Genentech on the selection of global sites in anticipation of the trial starting in the second half of 2017. And finally, we have our Phase 1b/2 clinical trial with our collaboration partner Eisai, as previously announced the first metastatic breast cancer patient was dosed in July and enrollment is ongoing. The other ongoing studies underway with PEGPH20, the randomized Phase 2 clinical trial led by SWOG of PEGPH20 and combination with modified FOLFIRINOX is furthest along. We were pleased to learn that SWOG is now enrolled more than 120 patients and is making good progress towards the target enrollment of 172 patients. As a reminder, the primary endpoint of the SWOG study is overall survival and HA status will be determined retrospectively. We're also encouraged by interest from investigators at leading academic centers and have a number of promising investigator sponsored trials ongoing and under consideration. I expect we'll be in a position in the coming months to share additional details for exciting new areas of future study. Those are the discussion on PEGPH20. We are also looking forward to the upcoming annual meeting of the American Association of Cancer Research where we have research abstracts that have been accepted proposed to presentations. Our scientists will present findings from our preclinical models that further illustrate the potential benefits of PEGPH20 in combination with immunotherapy and on its ability to increase immune cell access. Turning to Slide 8 and I will move to the second pillar of our strategy, our ENHANZE platform where we licensed our rUpH20 enzyme to leading company. In November, at the American Society of Hematology Annual Meeting two of our partners presented a supportive data of their ongoing development program using our ENHANZE platform. Genentech presented data from their SABRINA Phase 3 study which showed comparable responsive rates and time-to-event data for a subcutaneous rituximab compared to IV administration. The presentation followed acceptance by the FDA of a biologic license application for a subcutaneous formulation of rituximab using Halozyme’s ENHANZE technology. More recently, Roche’s indicated it is seeking approval in chronic lymphocytic leukemia and non-Hodgkin's lymphoma and the FDA action date is in June. An approval represents a significant new royalty opportunity for Halozyme with oncology sales of rituximab in the U.S. estimated to have exceeded $3 billion in 2016, our revenue growth will clearly be driven by the indications approved and the degree of market penetration. In addition on Slide 9, Janssen presented data at ASH indicating subcutaneous formulation of daratumumab on the ENHANZE platform was well tolerated and had an efficacy and pharmacokinetic profile consistent with the IV formulation in patients with relapse and refractory multiple myeloma supporting further study in a Phase 3 clinical trial. The data demonstrated feasibility of a 30 minute 90 mL dosing, which would offer shorter treatment duration for patients and caregivers compared to the current multi-hour infusion. Additional work is underway by Janssen to determine an even shorter dosing time maybe achieved in the planned Phase 3 study. Slide 10 provides an overview of our current ENHANZE portfolio and the potential future opportunity associated with the platform. Beginning with our current opportunity at the top of the slide, the innovator products that today utilize our ENHANZE platform reported total European and international 2016 sales exceeding $7 billion. In parallel, we saw a 65% increase in our year-over-year royalty revenue. And looking ahead to 2017, Roche’s think that they expect further conversion from Herceptin IV to SC. In their last detailed update which was provided in July of 2016, Roche reported Herceptin SC accounted for approximately 50% of total Herceptin sales volume in launched countries. And MabThera SC accounted for 34% of total MabThera sales volume in launched countries. U.S. sales for Rituxan oncology for which the BLA is under FDA review, represent an additional $3 billion in potential opportunity. Recall we receive a mid single-digit royalty in net sales with our royalty potential being based in the number of indications approved and the degree of market penetration for each product. Moving now to our future potential opportunity, our partner pipeline includes Janssen daratumumab, which I discussed a moment ago, and Roche’s PERJETA which is being studied within hand in a Phase 1 trial of HER2-positive breast cancer patients. We’ve announced another sources projecting future sales in these two products totaling greater than $10 billion, we're very excited to be working with these companies to value the potential of our combined technologies and to develop additional product offerings. And finally, we have four other targets that have been selected but not disclosed by our partners and 26 additional targets that have been licensed. We also continue to assess new deal to expand the value of our ENHANZE platform and believe many targets are still available to made benefit from ENHANZE. While it is always difficult to predict the timing of a new deal, this is something our team continuously works towards and we continue in dialogue with a number of companies towards a new agreement in 2017. I'm pleased with our commercial progress and see clear opportunities for continued growth through new collaboration and as we support our current partners in advancing their program. With that, I will now turn it over to Laurie to discuss our financial results in greater detail. Laurie?

Thank you, Helen. I will begin on Slide 11, where you will see that revenue for the fourth quarter was $39 million compared to $52.2 million in the prior year period. The decrease was expected due to the $25 million we recorded in the fourth quarter of 2015 with the signing of our global collaboration and licensing agreement with Lilly. Adjusting for this one-time revenue grew 43% in the fourth quarter, the largest contributor with royalty revenue which totaled $14.3 million increasing 10% sequentially from last quarter and 50% from the fourth quarter of 2015. This increase came from higher sales of our partners’ products during the third quarter of 2016. Bulk sales of bulk rHuPH20 totaled $9 million, Hylenex product sales totaled $4.4 million and other collaboration revenue totaled $11.3 million. Revenue for 2016 totaled $146.7 million, an increase of 9% from 2015. This included royalty revenue of $51 million, an increase of 65% from 2015. During 2016, we were reimbursed for expenses related to a new manufacturing facility for Roche API that resulted in nearly $20 million in sponsored research revenue and associated expenses, the majority of which will not repeat in 2017. Once this new facility is approved, it will become the primary source for Roche API. As a result, we anticipate Roche will deplete their existing inventory of rHuPH20 ahead of the transition to the new facility, which will result in lower bulk product sales during 2017 and 2018. This transition is fully reflected in our 2017 revenue guidance. Turning to Slide 12, for a more detailed breakdown of our P&L, cost of product sales was $8 million in the quarter nearly even with $8.4 million in the prior year period. Research and development expenses for the quarter were $41.3 million compared to $27.7 million for the fourth quarter of 2015. As we have reported in prior quarters, this planned increase was primarily due to a ramp in spend associated with HALO-301 as well as manufacturing and clinical supply expenses that are reimbursed by our ENHANZE partners. Selling, general and administrative expenses were $12.2 million compared to $10.6 million for the fourth quarter of 2015, the increase was primarily due to personnel expenses including stock-based compensation for the period. In total, our operating expenses increased by $14.8 million from the fourth quarter of last year as we ramped the Phase 3 study and continue to support new programs initiated during the year. For the full year, operating expenses were $230 an increase of 41% from 2015 and consistent with the step-up we forecasted at the beginning of the year that said our 2016 operating expenses were lower as compared to the guidance range we updated last quarter, driven by a number of projects. We do not expect any program delays or impact on 2017 spend as a result of this variance. Net loss for the quarter was $27.4 million or $0.21 per share compared to net income of $4.3 million or $0.03 per share in the fourth quarter of 2015, driven again by $25 million we recorded in the fourth quarter of 2015 with the signing of our Lilly agreement. Net loss for 2016 totaled $103 million or $0.81 per share. Cash, cash equivalents and marketable securities were $205 million at December 31, 2016 compared to $221 million at September 30, 2016 and $108.3 million December 31, 2015. I would like to reiterate the 2017 guidance ranges we provided last month and update the cash positions as shown on Slide 13. For the full year 2017, we expect net revenue of $115 million to $1130 million, which does not include potential revenue from new ENHANZE partnership. Operating expenses of $240 million to $250 million, operating cash burn of $75 million to $85 million, which excludes the impact of financing and debt principle repayment and year-end cash balance of $110 million to $125 million, an increase from where we have forecasted last month, based on where we exited 2016. Finally, as you may have seen today, we filed a self registration statement on Form S-3 with the Securities and Exchange Commission as part of normal business practices. With that, let me turn the call back to Helen, who will provide closing statements.

Thank you, Laurie. In summary, as you heard, we made strong progress across both pillars of our strategy during 2016 and as we have entered 2017. In the oncology pillar, we start 2017 with positive randomized Phase 2 data that continues to generate enthusiasm from opinion leaders and our Phase 3 investigators. With follows the progress, we made at the end of 2016 with the announcement of our clinical collaboration with Genentech and progression of our KEYTRUDA study into the expansion phase. The events we expect in 2017, includes presenting new preclinical data on the effects of PEGPH20 with immuno-oncology therapy. Presentation of the study 202 data in a scientific forum making strong progress on study 301 enrollment and enrolling and in generating data in HA high patients in our KEYTRUDA study. Similarly, our enhanced platform continues to generate value for the company with growing royalties and supportive data from our partners in their key programs. In 2017, key events include the potential approval of rituximab SC in the U.S. and advances in the daratumumab SC development program. In addition, it is my goal to sign a new ENHANZE collaboration and licensing agreement. These events also create our next inflection point in ENHANZE growth. At levels, we remain confident that the investments we are making in both pillars will generate near and long-term value for our shareholders and partners. And I’d like to close by expressing my gratitude and appreciation for our talented Halozyme team for their continued hard work to advance our programs and in support of our partners and patients. We are now ready to take your questions. Operator, please would you open the call?

[Operator Instructions] Looks like our first question will be from Charles Duncan with Piper Jaffray.

Hi, Helen and team, congrats on a great quarter of progress and thanks for taking my questions. Just two quick questions on PEGPH20, first of all kind of looking backwards at the Stage 2, Phase 2 data. I’m wondering if you would characterize any impact on patient interest and/or investigator interest any feedback from investigators on that data and then one would you anticipate being able to present that, could that be at the upcoming ASCO meeting?

Thanks Charles and thanks for the feedback of the quarter. Athena, do you want to address Charles’s question?

Yes, hi, Charles. Thank you for the question. As Helen mentioned in her prepared remarks, we’ve seen a continued increase interest in regards to not only the screening that we are seeing in the Phase 3 that also just in active dialogue with a very positive ASCO GI meeting, we had an advisory board meeting, specifically just to talk about our new study with Tecentriq but also again just continued interest in the Stage 2 data, what we have said is that we do plan on updating the 202 data in terms of providing additional information at a medical form in terms – in 2017 and as you can appreciate we’ve just committed our abstract pillar this month at ASCO.

Sure. And then my last question or other question regarding PEGPH20 in the pancreatic cancer program. I’m wondering if you could provide us any color on kind of this screen failure rate in terms of HA high percentage and if the protocol for establishing HA high is fairly well established, do you see any risk of operator across geographies. And then finally is there any chance that you'll give us the number of events that would trigger PSS interim or at least a percentage expected.

Hi, Charles, well, obviously its our practice whereby detailed statistical assumption. So we will be providing the number of PSS events that we would trigger the interim analysis. But I will ask Athena to comment on the screen failure rate and also our approach to measuring HA high which I think you'll hear the approach that limits the possibility of enter observer?

Hi, Charles, so in regards to what we've known from the randomized Phase 2 data in pancreatic cancer we've shown a prevalence of approximately 35% to 40% of patients are HA high and that's consistent with what we are seeing in the Phase 3 study, we are seeing a screen failure rate of approximately 60% based on HA level. As Helen mentioned remember as you establish the companion diagnostic and as we have with our partner Ventana, we had to go through quite a bit of additional steps to have IDE approval for the diagnostic specifically inter-rater and intra-rater variability which passed with a very high precision rate. And so we have not seen any changes in regards to geography, we now as Helen mentioned have all 22 countries with approval of the protocol and many countries are obviously submitting biopsies to Ventana for evaluation. Just to ask the screen failure point that I made that the number I gave in terms of 60% to 65% predominantly due to HA and then obviously you lose a few patients due to other inclusion and exclusion criteria.

Okay, thanks for the added color.

Thanks Charles. Next question, please?

Thank you. Our next question will be from Andrew Peters of Deutsche Bank.

Hi, thanks for taking my questions and let me add my congrats on the progress as well.

Thanks Andrew.

Question on the Tecentriq combinations, kind of going back to the initial press release it seemed like you described the ability to go from Phase 1b studies to scale to registration studies. I guess I wanted to understand a bit more exactly kind of what striving that confidence is it because the studies are targeting a specific sub-population and how should we think about those specific comments as it relates to the ongoing pembro study.

All right, Athena is working closely with the Roche team, so I will ask her to comment on that.

Hi, Andrew, in regards to the collaboration with Genentech, as Helen mentioned there are two studies that we will be doing in the collaboration, the first is our own study in both gallbladder and biliary tract tumors where we’ll be testing all patients for HA upfront prospectively. And then Genentech most recently and Roche in last Investor presentation, they had a very nice slide that showed the design of their unique in immuno-oncology study called MORPHEUS, which really is a platform study. I think they showed nicely, how they will have multiple arms within an umbrella study that potentially could progress right from Phase 1 into a Phase 3. And so I would guide you towards their presentation because from what I remember it was very well outlined in one slide.

I guess maybe the questions more, is that a possibility then as you think about your own study with KEYTRUDA?

I think it's always an option to try to advance, as fast as possible when you have a strong signal and then as you've seen that pembrolizumab have initially got approval on the Phase 1 study in lung cancer. So I think we've learned a lot from Genentech already and how we've also designed our study and that's one of the key points, I think we will update later this year is more details in regards to both of those study designs.

Okay. Thanks and then just quickly you mentioned that it seems like in enrollment in the 301 study may have been positively impacted by the 202 data. That means the enrollments ahead of kind of your initial assumptions on timelines when you first design the study or had you kind of taken into consideration the possibility that – on post data. I just want to get a sense of kind of how enrollments going in, how you think about kind of timelines relative to your initial assumptions?

Thanks Andrew. I will take that one. With regard to enrollment, we are very much tracking in line with how we expected it to happen. And what I mentioned was that we have seen an uptick in screening in the beginning of this year and a number of factors I think are obviously impacting that including the positive data. But we've also been through out 2016 adding countries and centers and we did have a number of centers come on board just in the fourth quarter. So we're very much tracking to our original timeline and expectations with regard to enrollment and do we expect to see as I mentioned in my prepared remarks, as making very strong progress towards our enrollment goals in 2017. But it's still premature to give an update as I mentioned, we're still adding centers as of the fourth quarter.

Okay. Thank you.

Thank you. Our next question will be from Jason Butler with JMP Securities.

Hi, this is Harry on for Jason. Congrats on the progress.

Thanks, Harry.

Just have two questions. One on the PEGPH20 driven process, can you talk a bit about the other clinical trials that are enrolling that patients and the landscape there?

All right. Harry, just to say are there competing pancreatic cancer study to our HALO-301.

Right, exactly.

Okay. Thank you. Athena, do you want to address that?

Yes, sure. Hi, Harry. If you looked at clinical trial stock, I think what you would see in regards to offline metastatic patient physically in the stage in Phase 3 there really is only one, that's just recently started enrolling in the United States. We are also aware of the ongoing Phase 2/3 pancreatic study with ibrutinib that both of those studies would be slightly different and that they're not using a biomarker driven asset, they are clearly not using a companion diagnostic and so we do believe that we still are unique trial and much of our conversations our investigators are always try to screen patients for our study first. And then if they are not eligible for the study based on being HALO then to potentially offer one of the other two. I mean obviously additionally, there are also other earlier Phase 1 studies as well.

Okay. Great, thanks. And on daratumumab progress what sort of I guess considerations are being made you think regarding the trial design for the upcoming Phase3?

Harry. This is one of these areas obviously where Janssen has not provided any details updates on that, so we are not in a position to add any color other than to say we certainly were excited to see the Phase 1 data that was prevented at ASH that does suggest that there is a dose that the company is considering taking into their Phase 3 study. But no additional details are available at this point in time.

Okay. Understood. And then final question just on the PEGPH20 collaboration programs, are there any chance you could sorry, if I missed this earlier provide any color on the time for data from the KEYTRUDA and Halaven studies?

Let me ask Anthena to comment.

Hi, Harry. So we are furthest along in our study with pembrolizumab, as Helen mentioned in both relapsed non-small cell lung cancer and gastric cancer patients, we moved into the dose expansion phase toward the end of last year. So we are still early in terms of enrollment. I think the based on where we are at enrollment, data generation really will depend – be dependent on when we achieve significant number of patients enrolled as well as substantial follow up. The Eisai collaboration remains in the dose escalation phase. So we've yet to determine an NCD. So it is premature to speculate where that data will be shown.

Great. Thank you very much.

Thanks, Athena.

Next question, please

Thank you. Our next question will be from Joel Beatty with Citi.

Hi, thanks for taking the question. First question is on the biomarker task that's needed for the Phase 3 study, with a three to five day delay in getting those results back. Could you give any feedback from the sites and how the three to five day way effects the interest in involvement in your stud?

Yes, Let Athena address that.

Hi Joel. I have actually wouldn't characterize it as a delay as much as it's one of the many screening tests that have to be performed for a patient enrol into a clinical trial. So remember patients undergo CT scans as well as laboratory evaluations. So the biopsy is sent during a window that typically between 21 and 28 days. I think from what we heard initially from investigators up to five days was very tolerable and this is obviously a global trial. We haven't heard necessarily negative feedback or in any way that it is a delay. Again it is just part of many one of the many screening procedures that done for the eligibility being confirmed.

Okay. Thank you. that’s helpful. And one other question, the royalties your referred, could you provide a sense of the breakout and how they compare between different products?

Let me ask Laurie just to address that. But I will say we don't break down our royalty basically at the request of our partners, but we can maybe discuss some general color.

Yes. That's a great question and we typically don't break that down. But to reiterate we did see royalties grow 65% year-over-year. We do anticipate strong growth in 2017 as well and it's been reflected in our guidance.

Okay. Great. Thank you.

Thank you. Our next question will be from with Douglas Tsao with Barclays.

Hi, thanks for taking my questions. It’s [indiscernible] on for Doug Tsao. I just want to follow maybe a little bit of color on the new partnership with Genentech regarding to Tecentriq, whose mainly funding the trial to get any color on that, maybe on what specific type of tumor type and – are there any of these new indications for Tecentriq and maybe timeline?

Yes. Maybe Athena, you can just walk through just how it’s structured and the initial areas of focus.

Sure. So the initial focus is that we will run one study using Tecentriq with PEGPH20 and chemotherapy in the first line non-previously treated gallbladder cancer as well as biliary tract cancers. This is a small Phase 1b study where Genentech will be providing drugs to us and the cost of the trial will be at our expense. In contrast to Genentech study, as I mentioned previously, is part of a much larger umbrella study, where they'll be using PEGPH20 with a specific focus initially in gastrointestinal malignancies, predominately pancreatic cancer and gastric cancer initially, but they have the option to go up to six tumor types total. And I think in regards to where Tecentriq is currently approved yet, these are obviously areas where they do not currently have an approved label.

Great, thank you very much. And I just have one more follow-up on the facility that recently built there that Genentech is partially funding. Can you give any details on what other products that will be able to be manufactured there as you're going to support anything else in the business? Any additional color, that would be great.

Yes. Let me ask Laurie to just give a bit color on that.

Yes. So just to clarify it is a new facility at one of our contract manufacturers. It is dedicated to Roche AG material. So won't be shared, but it is flexible manufacturing, so our contract manufacturers will be managing that line. And it was just about $20 million in expenses that were reimbursed fully by Roche in 2016.

Thanks very much. Thanks for taking my question.

Our next question will be from Jessica Fye with JPMorgan.

Hi guys, this is Ryan on for Jessica. Thanks for taking our question. Helen, I know you've been talking about trying to sign a new enhanced collaboration during the year, but maybe for existing partnerships that you have, it sounds like there's a lot of products in that pipeline. So is there any color you can kind of give us on targets that may be coming that we could see in the near future?

Yes. Thanks, Ryan. Well, as I mentioned in the prepared remarks, that we do have some four targets have been selected by our current partners, where we're working with them, but they have not declared those targets yet. And as we're working on them, we’re obviously working to make progress towards identifying the path to get those to the clinic. So those are always our potential that sometime in 2017 you may hear something from our partners about one of those products. In addition, now our partners have targets available for them to select that they have not selected yet, and our team continue to work with them to identify if anything in their portfolio, it may benefits from PEGPH20 and again that is something we would obviously provide an update on Eisai and if and do elected to do that. And so with our current partners you're absolutely right, there are several ways where we can expect them to be able to select and make progress of new products towards and into the clinic.

Great. Thank you.

Thank you. Next question will be from Jim Birchenough with Wells Fargo Securities.

Hi, thanks for taking the question. This is Yanan Zhu on for Jim. First question is looking ahead for the Herceptin SC in the U.S. Would you expect a similar pattern for adoption in the U.S. compared with MabThera in EU? And along that line, what is the highest percentage for market penetration in EU in the select EU market?

Yes, thanks for question. So we've obviously been very pleased with the reaction to Herceptin SC in the ex-U.S. markets. And if we step back and ask why that is, it really relates to two things. I think the first thing is the added convenience for patients and caregivers to have the shorter duration of infusion is obviously benefit and with that come healthcare system cost saving. I think both of those will be factors that will be important in the U.S. adoption and I do expect strong adoption in the United States as well. Recently Roche has not provided a detail update as to by country what the highest market penetration is, but what we said in our prepared remarks, is that a overall SC represents over 30% all of the sales volume suggesting it is a very nice volume and certainly in some market is above 70% to get to that average. But we don't have any additional details we can share as Roche hasn't provided that publicly.

Got it. The last question from is us that is going to for the gallbladder study, the Tecentriq combination. I'm just curious, down the line do you anticipate a comparative study with against Tecentriq low arm to kind of satisfy the combination rule by the agency.

Athena will address that.

Yes. What I can say is that, we are continuing to work with Genentech very closely, on the design we have joint development committees now in place. And again without getting too many details to the protocols, now been finalized CLO has been selected and we're sending it to the FDA for feedback. But this trial does have multiple arms, that we will give more information after we've received the FDA feedback on design later this year.

Great. Thank you for taking the questions.

Great. Operator, do we’ve any other questions?

I’m showing no further questions in the queue at this time. [Operator Instructions]

All right. Well, if there are no further questions, I'd just like to thank everyone for joining us today. We look forward to speaking with you at our next call and providing an update then. Have a great evening. Thank you.

Thank you. Ladies and gentleman, this concludes today’s teleconference. You may now disconnect.