Until today, Halozyme worked under a two-pillar strategy, with licensing dollars from its Enhanze drug delivery technology bankrolling its cancer pipeline. Now, with the failure of its lead program in pancreatic cancer, the company is pulling the plug on drug development to focus solely on Enhanze and cutting 55% of its staff in the process.
Halozyme will lay off the bulk of that 55%—about 160 staffers—by the end of January 2020, the company said in a statement. The new Halozyme will move forward with 120 employees. The move is expected to save the company between $130 million and $140 million in 2020 and make it a “sustainably profitable company” starting in the second quarter of 2020.
It was not an unforeseen development. Although the San Diego-based biotech had ambitions to become an oncology company, CEO Dr. Helen Torley told FierceBiotech in June that it would abandon its two-pillar approach if its cancer programs didn’t deliver.
“Our mission now is to transition our strategy to focus on our high-growth, high-margin ENHANZE drug delivery technology platform," said Torley in a statement Monday. "Our ENHANZE business is well positioned for this growth, supported by strong partnerships with leading brands and a promising development pipeline. As a result, Halozyme now has a clear path to near-term, sustainable profitability with strong cash flows and high growth prospects.”
Enhanze uses the enzyme hyaluronidase to break down hyaluronan, a natural sugar chain that forms a gel in the innermost layer of skin. This allows drugs that would otherwise require hourslong intravenous infusion to be injected just under the skin.
Halozyme has struck partnerships with the likes of Roche, AbbVie, Eli Lilly and Johnson & Johnson and has seen three partnered products approved. The latest was a subcutaneous form of Roche’s breast cancer med Herceptin, which can be given to a patient in two to five minutes rather than an infusion that can take up to 90 minutes. The next will likely be a subcutaneous form of J&J’s multiple myeloma drug Darzalex, which put up encouraging data at this year’s American Society for Clinical Oncology meeting. The Enhanze-based form of the blockbuster could cut treatment time from seven to eight hours for an infusion to just five minutes.
The downsized Halozyme will focus on key areas to support its partners, including manufacturing, quality, regulatory and product development. A dozen employees will keep promoting Hylenex, its hyaluronidase enzyme approved as an adjuvant to boost the dispersion and absorption of injected drugs.
The restructuring comes as Halozyme’s lead program failed a phase 3 study in pancreatic cancer. The trial tested PEGPH20, a PEGylated version of Halozyme’s hyaluronidase enzyme, with Celgene’s Abraxane and chemo drug gemcitabine. The combo did not extend patients’ lives compared to Abraxane and gemcitabine alone.
"This well-designed and well-executed study did not have the outcome that we or the study participants wanted or expected. I would like to extend a heartfelt thank you to all those who supported and who made this study possible, including the patients who were enrolled, their families, our investigators, their staff, our investors and all of the dedicated Halozyme employees,” Torley said in a statement.