Halozyme abandons cancer R&D as lead drug failed

US biotech Halozyme has been forced to cut more than half its workforce and exit cancer R&D after the failure of lead drug PEGPH20 in a phase 3 pancreatic cancer trial.

The decision leaves the company focused entirely on its Enhanze drug delivery technology, which is already generating revenues as it is being used in three already-marketed products and has another 11 in clinical testing.

San Diego-based Halozyme said it intends to cut staff numbers by around 160 (55%), leaving it with 120 staffers working on the Enhanze platform, based on a patented recombinant human hyaluronidase enzyme (rHuPH20), and another 12 handling commercial operations for its already-approved drug Hylenex.

The cutbacks will slash its costs by $130 to $140 million next year, according to the company, which also says it will buy back $350 million of its shares over the next three years. More than 80% of the staff cuts are expected to be delivered by January 2020.

The reorganisation has been prompted by the HALO-301 trial, which was testing PEGPH20 (pegvorhyaluronidase alfa) as a first-line therapy alongside gemcitabine and Celgene’s Abraxane (nab-paclitaxel) for patients with metastatic pancreatic cancer.

In the study, PEGPH20 failed to achieve an improvement in median overall survival (OS) compared to gemcitabine and Abraxane given alone, coming in at 11.2 months and 11.5 months, respectively.

Whilst lamenting the cancer decision and the impact on staff, Halozyme is quick to point to the big potential in Enhanze, which is already being used in Roche’s subcutaneous formulations of Rituxan (ritiuxumab) and Herceptin (trastuzumab) as well as Takeda’s immune globulin product HyQvia.

Three more products are due in late-stage development by year-end, including a subcutaneous formulation of Janssen's blockbuster multiple myeloma therapy Darzalex, Roche's fixed-dose combination of Perjeta (pertuzumab) and Herceptin, and a third product which is currently in phase 1 testing.

Halozyme has previously predicted the platform could make approximately $1bn in royalty revenue in 2027, with cumulative milestone payments of $225 to $300 million by the end of 2021 based on current partnerships alone.

The company’s chief executive Dr Helen Torley said the decision delivers “a clear path to near-term, sustainable profitability with strong cash flows and high growth prospects.”