J&J rents Halozyme's R&D technology for up to $581M

Halozyme CEO Helen Torley

Johnson & Johnson ($JNJ) has signed a deal to use Halozyme Therapeutics' ($HALO) drug delivery platform in its own R&D efforts, agreeing to pay as much as $581 million for the privilege.

Under the agreement, J&J's Janssen Biotech unit will take advantage of Halozyme's Enhanze technology, which allows for the under-the-skin administration of large-molecule treatments that would otherwise require intravenous delivery. J&J will put the platform to use on as many of 5 of its own drug candidates, retaining its partner's expertise in the process. Halozyme is due $15 million up front, and J&J is promising up to $566 million in milestone payments plus royalties on any approved therapies.

Enhanze works by using Halozyme's in-house recombinant human hyaluronidase enzyme (rHuPH20) to temporarily break down hyaluronan, a key component of the cellular structures just beneath the skin. Doing so allows antibodies and other large therapeutic agents to be delivered subcutaneously, Halozyme says, and the affected hyaluronan harmlessly returns to normal within a few days.

The deal spells another co-sign for Halozyme's baseline technology, which helped partner Baxter ($BAX) win FDA approval this year for the immunodeficiency treatment HyQvia, a pairing of rHuPH20 and immunoglobin. The homespun enzyme is also key to the biotech's proprietary pipeline of treatments and its collaborations with Roche ($RHHBY) and Pfizer ($PFE).

"We are pleased that Janssen, a global leader in the development of novel therapeutics, has selected our Enhanze technology to further augment their development pipeline," Halozyme CEO Helen Torley said in a statement. "This new global licensing agreement further validates our Enhanze platform technology, which we believe may benefit a growing number of patients worldwide by making therapies more convenient."

Halozyme's latest deal sent its shares up about 7% on Wednesday morning.

- read the statement

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