What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-11-03 compared with 2025-08-05 · 82 added, 67 removed, 398 unchanged (27% of the section changed)

35 unchanged sentences

In addition to receiving upfront licensing fees from our ENHANZE collaborations, we are entitled to receive event and sales-based milestone payments, revenues from the sale of bulk rHuPH20 and royalties from commercial sales of approved partner products co-formulated with ENHANZE.

We currently earn royalties from the sales of 10 commercial products including sales of five commercial products from the Roche collaboration, two commercial products from the Janssen collaboration and one commercial product from each of the Takeda, argenx and BMS collaborations.

We currently earn royalties from the sales of ten commercial products including sales of five commercial products from the Roche collaboration, two commercial products from the Janssen collaboration and one commercial product from each of the Takeda, argenx and BMS collaborations.

We have commercialized auto-injector products with Teva Pharmaceutical Industries, Ltd.

2 unchanged sentences

Our commercial portfolio of proprietary products includes Hylenex ® , utilizing rHuPH20, and XYOSTED ® , utilizing our auto-injector technology.

Our second quarter of 2025 and recent key events are as follows:

Our third quarter of 2025 and recent key events are as follows:

• In September 2025, argenx received approval from the Ministry of Health, Labour and Welfare in Japan for VYVDURA prefilled syringe for self-injection for the treatment of adult patients with generalized myasthenia gravis and adult patients with chronic inflammatory demyelinating polyneuropathy.

• In July 2025, Janssen announced the European Commission approved a new indication for DARZALEX SC as a monotherapy for the treatment of adult patients with smoldering multiple myeloma at high risk of developing multiple myeloma.

• In June 2025, Takeda announced the Ministry of Health, Labour and Welfare in Japan approved HYQVIA SC with ENHANZE for treatment of patients with chronic inflammatory demyelinating polyneuropathy and multifocal motor neuropathy.

• In June 2025, argenx announced European Commission approval of VYVGART SC with ENHANZE for the treatment of adult patients with progressive or relapsing active chronic inflammatory demyelinating polyneuropathy after prior treatment with corticosteroids or immunoglobulins.

VYVGART SC injection is available as a vial or prefilled syringe and can be administered by a patient, caregiver, or healthcare professional.

• In May 2025, BMS received European Commission approval of Opdivo SC, the SC formulation of Opdivo (nivolumab) developed with ENHANZE, for use across multiple adult solid tumors, resulting in the recognition of $12.0 million in milestone revenue.

• In May 2025, argenx initiated a Phase 1 study to evaluate ARGX-213 with ENHANZE.

• In May 2025, Janssen announced the U.S.

Food and Drug Administration (“FDA”) Oncologic Drug Advisory Committee voted in favor of the benefit-risk profile of DARZALEX FASPRO for the treatment of adult patients with high risk smoldering multiple myeloma.

• In April 2025, Roche received a positive opinion from the European Medicines Agency’s Committee for Medicinal Products for Human Use recommending an update to the European Union (“EU”) label for Phesgo for human epidermal growth factor receptor 2-positive breast cancer.

Administration of Phesgo outside of a clinical setting (such as in a person’s home) by a healthcare professional will be possible, once safely established in a clinical setting.

• In April 2025, argenx received FDA approval of VYVGART Hytrulo prefilled syringe for self-injection for the treatment of adult patients with generalized myasthenia gravis who are anti-acetylcholine receptor antibody positive and adult patients with chronic inflammatory demyelinating polyneuropathy.

• In April 2025, Janssen received European Commission marketing authorization of the SC formulation of RYBREVANT (amivantamab) with ENHANZE, in combination with LAZCLUZE (lazertinib), for the first-line treatment of adult patients with advanced non-small cell lung cancer with epidermal growth factor receptor exon 19 deletions or exon 21 L858R substitution mutations.

Additionally, RYBREVANT (amivantamab) is approved as a monotherapy for adult patients with advanced non-small cell lung cancer with activating epidermal growth factor receptor exon 20 insertion mutations after the failure of platinum-based therapy.

This represents the tenth partnered product with ENHANZE to be commercialized.

In May 2025, amivantamab was made available to patients in the EU resulting in a $10.0 million milestone payment.

• In April 2025, Janssen received European Commission approval for an indication extension of DARZALEX SC in combination with bortezomib, lenalidomide, and dexamethasone for the treatment of adult patients with newly diagnosed multiple myeloma regardless of transplant eligibility.

• In June 2025, we initiated the third $250 million share repurchase tranche under the $750 million approved program from February 2024, of which $53.5 million was used to repurchase approximately 1.0 million shares at an average price of $52.40 per share in June 2025 for a total of $303.4 million of share repurchases in the second quarter.

• In May 2025, we announced a second $250 million share repurchase under the $750 million approved program from February 2024.

The second $250 million share repurchase was completed in June 2025, resulting in a total purchase of 4.8 million shares at an average price of $52.09 per share.

• In April 2025, we filed a patent infringement lawsuit against Merck Sharp & Dohme Corp.

(“Merck”) in the U.S.

District Court in New Jersey.

We believe the SC formulation of Merck's cancer medicine, Keytruda, infringes multiple patents that protect our MDASE™ SC delivery technology.

We believe Merck has used our technology to develop SC Keytruda without our permission.

We are seeking damages and injunctive relief to stop the infringement.

In addition, the Patent Trial and Appeal Board (“PTAB”) of the U.S.

Patent and Trademark Office has instituted post-grant reviews brought by Merck challenging the validity of certain U.S.

patents covering our MDASE™ technology.

The PTAB proceedings and the lawsuit are not related to our ENHANZE ® intellectual property.

• In September 2025, we agreed to acquire Elektrofi, Inc.

(“Elektrofi”), a biopharmaceutical company with an ultra-high concentration microparticle technology for biologics, branded Hypercon™.

Under the terms of the Agreement and Plan of Merger, we will acquire Elektrofi for $750 million in upfront consideration and up to three $50 million milestone payments contingent upon three separate product regulatory approvals.

We expect the transaction to close in the fourth quarter of 2025, subject to completion of antitrust review under the Hart-Scott-Rodino Antitrust Improvements Act and other customary closing conditions.

• In June 2025, we initiated the third $250 million share repurchase tranche under the $750 million approved program from February 2024.

As of September 30, 2025, $92.3 million has been used to repurchase approximately 1.7 million shares at an average price of $52.89 per share.

Product and Product Candidates

17 unchanged sentences

The positive results supported the advancement of our ATRS-1902 development program to a pivotal study for the treatment of acute adrenal insufficiency, using our Vai novel proprietary rescue pen platform to deliver a liquid stable formulation of hydrocortisone.

In September 2025, the FDA published a Complete Response Letter to a New Drug Application citing observations related to a third-party drug product manufacturing site.

Partnered Products

73 unchanged sentences

In November 2022, Janssen initiated a Phase 2 study of amivantamab with ENHANZE in multiple regimens in patients with advanced or metastatic solid tumors including epidermal growth factor receptor-mutated non-small cell lung cancer (PALOMA-2).

In May 2024, Janssen announced positive data from the Phase 3 PALOMA-3 study which supported the submission of a marketing authorization application to the European Medicines Agency for SC formulation of RYBREVANT (amivantamab) with ENHANZE for the treatment of patients with epidermal growth factor receptor-mutated non-small cell lung cancer.

In June 2024, Janssen announced the submission of a Biologics License Application to the FDA for amivantamab SC co-formulated with ENHANZE also for patients with epidermal growth factor receptor-mutated non-small cell lung cancer.

The administration time for SC amivantamab was reduced to approximately five minutes from five hours for the first IV amivantamab infusion (across two days) and showed a five-fold reduction in infusion-related reactions.

The administration time for SC amivantamab was reduced to approximately five minutes from approximately five hours per day for the first IV amivantamab infusion and an average of 2.3 hours for subcutaneous infusions and showed a five-fold reduction in infusion-related reactions.

SC amivantamab also demonstrated longer overall survival, progression-free survival and duration of response.

18 unchanged sentences

Opdivo Qvantig is the first and only SC administered programmed death 1 inhibitor.

In March 2025, BMS received a positive opinion from the Committee for Medicinal Products for Human Use of the European Medicines Agency recommending approval of Opdivo (nivolumab) with ENHANZE across multiple solid tumor indications.

In May 2025, BMS received European Commission approval of Opdivo SC, the subcutaneous formulation of Opdivo (nivolumab) developed with ENHANZE, for use across multiple adult solid tumors.

16 unchanged sentences

In April 2025, argenx received FDA approval of VYVGART Hytrulo prefilled syringe for self-injection for the treatment of adult patients with generalized myasthenia gravis who are anti-acetylcholine receptor antibody positive and adult patients with chronic inflammatory demyelinating polyneuropathy.

In September 2025, argenx announced the Ministry of Health, Labour and Welfare in Japan approved VYVDURA prefilled syringe for self-injection for the treatment of adult patients with generalized myasthenia gravis and adult patients with chronic inflammatory demyelinating polyneuropathy.

argenx is currently conducting the following studies with the goal of expanding approved indications for efgartigimod with ENHANZE:

13 unchanged sentences

In March 2022, we and Chugai entered into a global collaboration and license agreement that gives Chugai exclusive access to ENHANZE technology for an undisclosed target.

Chugai intends to explore the potential use of ENHANZE for a Chugai drug candidate.

In May 2022, Chugai initiated a Phase 1 study to evaluate the pharmacokinetic measures, pharmacodynamics, and safety of a targeted antibody administered subcutaneously with ENHANZE.

Chugai has notified us that they have terminated this program and are evaluating other potential target programs with ENHANZE.

Acumen Collaboration

28 unchanged sentences

Further, we entered into a license agreement with Otter in which we granted Otter a worldwide, exclusive, fully paid-up license to certain patents relating to OTREXUP that may also relate to our other products for Otter to commercialize and otherwise exploit OTREXUP in the field as defined in the license agreement.

In August 2025, Otter discontinued marketing OTREXUP, and terminated the supply agreement in the fourth quarter of 2025.

Results of Operations

Three Months Ended June 30, 2025 Compared to Three Months Ended June 30, 2024

Three Months Ended September 30, 2025 Compared to Three Months Ended September 30, 2024

Royalties – Royalties were as follows (in thousands):

Three Months Ended Increase / (Decrease)

September 30,

2025 2024 Dollar

Royalties $ 236,038 $ 155,061 $ 80,977 52 %

The increase in royalties was primarily driven by continued sales uptake of DARZALEX SC by Janssen, VYVGART Hytrulo by argenx and Phesgo by Roche in all geographies.

We expect royalty revenue to further grow as a result of anticipated increasing partner product sales of DARZALEX SC, Phesgo and VYVGART SC, and sales of recently launched ENHANZE partner products, TECENTRIQ SC, OCREVUS SC, Opdivo SC and RYBREVANT SC.

The increase in royalties was primarily driven by continued sales uptake of ENHANZE partner products that have launched since 2020, predominantly by VYVGART Hytrulo by argenx, DARZALEX SC by Janssen and Phesgo by Roche in all geographies.

Together these products contributed approximately $71.2 million to the year-over-year increase, representing a 55% increase for these products.

This growth was diluted by earlier-launched ENHANZE partner products that are later in their life cycle and experiencing modest price erosion, such as Herceptin and MabThera by Roche.

These products along with all other products contributed approximately $9.8 million to the year-over-year-increase, representing a 37% increase.

We expect royalty revenue to grow further as a result of anticipated increasing partner product sales of DARZALEX SC, Phesgo and VYVGART Hytrulo, and sales of recently launched ENHANZE partner products, TECENTRIQ SC and OCREVUS SC by Roche, RYBREVANT SC by Janssen and Opdivo Qvantig by BMS.

We expect modest price erosion to continue on earlier launched ENHANZE partner products, Herceptin and MabThera.

1 unchanged sentence

Three Months Ended Increase / (Decrease)

September 30,

2025 2024 Dollar

6 unchanged sentences

Total product sales, net $ 94,228 $ 86,659 $ 7,569 9 %

The increase in product sales, net was primarily due to contributions from our proprietary product, XYOSTED, driven by continued market penetration, as well as increased sales of device partnered products driven by partner demand, partially offset by a decrease in sales in bulk rHuPH20 driven by the timing of partner demand.

The increase in product sales, net was primarily due to contributions from our proprietary product XYOSTED, driven by continued market penetration, as well as increased sales of bulk rHuPH20, driven by the timing of partner demand.

The increase is partially offset by a decrease in sales of device partnered products driven by timing of partner demand.

We expect sales of our proprietary products will grow in future years as we continue to gain market share in the testosterone replacement therapy market.

We expect product sales of bulk rHuPH20 and device partnered products to fluctuate in future periods based on the needs of our partners.

1 unchanged sentence

Three Months Ended Increase / (Decrease)

September 30,

2025 2024 Dollar

Event-based development milestones and regulatory milestones and other fees $ 24,500 $ 25,500 $ (1,000) (4) %

Upfront license and target nomination fees

$ — $ 27,000 $ (27,000) (100) %

Event-based development and regulatory milestones and other fees

— 18,000 (18,000) (100) %

Sales-based milestones

20,000 — 20,000 100 %

Device licensing and development revenue

3,998 3,364 634 19 %

Total revenues under collaborative agreements $ 23,998 $ 48,364 $ (24,366) (50) %

The increase in revenues under collaborative agreements was primarily due to the timing of milestones achieved.

The decrease in revenues under collaborative agreements was primarily due to the timing of milestones achieved.

Revenue from upfront licenses fees, license fees for the election of additional targets, event-based payments, license maintenance and other license fees vary from period to period based on our ENHANZE collaboration activity.

2 unchanged sentences

Three Months Ended Increase / (Decrease)

September 30,

2025 2024 Dollar

4 unchanged sentences

Cost of Sales – Cost of sales consists primarily of raw materials, third-party manufacturing costs, fill and finish costs, freight costs, internal costs and manufacturing overhead associated with the production of our proprietary products, device partnered products and bulk rHuPH20.

The increase in cost of sales was primarily due to an increase in product sales and labor allocation initiatives.

The increase in cost of sales was primarily due to an increase in product sales, material scrap and labor allocation initiatives.

Amortization of intangibles – Amortization of intangibles consists primarily of expense associated with the amortization of acquired device technologies and product rights.

3 unchanged sentences

Selling, General and Administrative – Selling, general and administrative (“SG&A”) expenses consist primarily of salaries and related costs for personnel in executive, selling and administrative functions, as well as professional fees for legal and accounting, business development, commercial operations support for proprietary products and alliance management, and marketing support for our collaborations.

The increase in SG&A expense was primarily due to an increase in consulting and professional service fees, including $2.6 million of litigation costs incurred in connection with a patent infringement litigation case, and an increase in compensation expense.

The increase in SG&A expense was primarily due to an increase in consulting and professional service fees, including $6.0 million of litigation costs incurred in connection with a patent infringement litigation case and diligence costs incurred in support of the planned acquisition of Elektrofi, partially offset by lower compensation expense.

Investment and other income , net – investment and other income, net was as follows (in thousands):

Three Months Ended Increase / (Decrease)

September 30,

2025 2024 Dollar

1 unchanged sentence

Investment and other income, net consists primarily of interest income on our cash, cash-equivalent and marketable securities.

The increase in investment and other income, net was primarily due to an increase in the average invested balance, partially offset by lower market interest rates.

The decrease in investment and other income, net was primarily due to lower market interest rates, partially offset by an increase in the average invested balance.

Interest Expense – Interest expense was as follows (in thousands):

Three Months Ended Increase / (Decrease)

September 30,

2025 2024 Dollar

4 unchanged sentences

Three Months Ended Increase / (Decrease)

September 30,

2025 2024 Dollar

1 unchanged sentence

The increase in income tax expense was primarily due to higher income before income tax expense, partially offset by an increase in tax benefits associated with share-based compensation windfall and Foreign Derived Intangible Income deduction.

Six Months Ended June 30, 2025 Compared to Six Months Ended June 30, 2024

Nine Months Ended September 30, 2025 Compared to Nine Months Ended September 30, 2024

Royalties – Royalties were as follows (in thousands):

Six Months Ended Increase / (Decrease)

Nine Months Ended Increase / (Decrease)

September 30,

2025 2024 Dollar

Royalties $ 609,869 $ 400,572 $ 209,297 52 %

The increase in royalties was primarily driven by continued sales uptake of DARZALEX SC by Janssen, VYVGART Hytrulo by argenx and Phesgo by Roche in all geographies.

Together these products contributed approximately $188.9 million to the year-over-year increase, representing a 57% increase for these products.

This growth was diluted by earlier-launched ENHANZE partner products that are later in their life cycle and experiencing modest price erosion, such as Herceptin and MabThera by Roche.

These products along with all other products contributed approximately $20.4 million to the year-over-year-increase, representing a 30% increase.

Product Sales, Net – Product sales, net were as follows (in thousands):

Six Months Ended Increase / (Decrease)

Nine Months Ended Increase / (Decrease)

September 30,

2025 2024 Dollar

Proprietary product sales

$ 135,035 $ 119,319 $ 15,716 13 %

Bulk rHuPH20 sales

82,787 66,637 16,150 24 %

Device partnered product sales

35,957 38,172 (2,215) (6) %

Total product sales, net $ 253,779 $ 224,128 $ 29,651 13 %

The increase in product sales, net was primarily due to increased sales of bulk rHuPH20 and device partnered products driven by partner demand, as well as contributions from our proprietary product, XYOSTED, driven by continued market penetration.

The increase in product sales, net was primarily due to increased sales contributions from our proprietary product XYOSTED, driven by continued market penetration, and increased sales of bulk rHuPH20, partially offset by device partnered products driven by partner demand.

Revenues Under Collaborative Agreements – Revenues under collaborative agreements were as follows (in thousands):

Six Months Ended Increase / (Decrease)

Nine Months Ended Increase / (Decrease)

September 30,

2025 2024 Dollar

Upfront license and target nomination fees

Event-based development milestones and regulatory milestones and other fees 24,500 39,500 (15,000) (38) %

$ 220 $ 27,000 $ (26,780) (99) %

Event-based development and regulatory milestones and other fees

24,500 57,500 (33,000) (57) %

Sales-based milestones

45,000 — 45,000 100 %

Device licensing and development revenue

11,476 8,116 3,360 41 %

Total revenues under collaborative agreements $ 81,196 $ 92,616 $ (11,420) (12) %

The increase in revenues under collaborative agreements was primarily due to the timing of milestones achieved.

The decrease in revenues under collaborative agreements was primarily due to the timing of milestones achieved.

Operating expenses - Operating expenses were as follows (in thousands):

Six Months Ended Increase / (Decrease)

Nine Months Ended Increase / (Decrease)

September 30,

2025 2024 Dollar

6 unchanged sentences

Research and Development – The decrease in research and development expense was primarily due to lower compensation expense driven by resource optimization, labor allocation initiatives, and timing of planned investments in ENHANZE related to the development of our new high-yield rHuPH20 manufacturing process.

Selling, General and Administrative – The increase in SG&A expense was primarily due to an increase in consulting and professional service fees, including litigation costs incurred in connection with a patent infringement litigation case, and an increase in compensation expense.

Investment and other income , net - Investment and other income, net was as follows (in thousands):

Six Months Ended Increase / (Decrease)

Nine Months Ended Increase / (Decrease)

September 30,

2025 2024 Dollar

2 unchanged sentences

Interest Expense – Interest expense was as follows (in thousands):

Six Months Ended Increase / (Decrease)

Nine Months Ended Increase / (Decrease)

September 30,

2025 2024 Dollar

2 unchanged sentences

Income Tax Expense – Income tax expense was as follows (in thousands):

Six Months Ended Increase / (Decrease)

Nine Months Ended Increase / (Decrease)

September 30,

2025 2024 Dollar

3 unchanged sentences

Our principal sources of liquidity are our existing cash, cash equivalents and available-for-sale marketable securities.

As of June 30, 2025, we had cash, cash equivalents and marketable securities of $548.2 million.

As of September 30, 2025, we had cash, cash equivalents and marketable securities of $702.0 million.

We believe that our current cash, cash equivalents and marketable securities will be sufficient to fund our operations for at least the next 12 months.

8 unchanged sentences

We may, in the future, draw on our existing line of credit or offer and sell additional equity, debt securities and warrants to purchase any of such securities, either individually or in units to raise capital for additional working capital, capital expenditures, share repurchases, acquisitions or for other general corporate purposes.

Six Months Ended

Nine Months Ended

September 30,

(in thousands)

1 unchanged sentence

Net cash provided by operating activities $ 432,529 $ 300,597 $ 131,932

Net cash used in investing activities (5,634) (124,720) 119,086

Net cash provided by (used in) investing activities 195,975 (292,203) 488,178

Net cash (used in) provided by financing activities (324,689) 27,554 (352,243)

Net (decrease) increase in cash and cash equivalents $ (53,989) $ 69,494 $ (123,483)

Net increase in cash and cash equivalents $ 303,815 $ 35,948 $ 267,867

Operating Activities

1 unchanged sentence

Investing Activities

The decrease in net cash used in investing activities was primarily due to a decrease in net purchases of marketable securities, as well as a decrease in capital spend for property and equipment.

The increase in net cash provided by investing activities was primarily due to a net sale of $201.5 million of marketable securities compared to a net purchase of $284.6 million of marketable securities in the prior year, as well as a decrease in capital spend for property and equipment.

Financing Activities

18 unchanged sentences

and (5) at any time from, and including, February 15, 2028 until the close of business on the second scheduled trading day immediately before the maturity date.

As of June 30, 2025, the 2028 Convertible Notes were not convertible.

As of September 30, 2025, the conditional conversion feature of the 2028 Convertible Notes was triggered, and as a result, the 2028 Convertible Notes were classified to current portion of long-term debt, net in our condensed consolidated balance sheets.

Upon conversion, we will pay cash for the settlement of principal, and for the premium, if applicable, we will pay cash, deliver shares of common stock or a combination of cash and shares of common stock, at our election.

5 unchanged sentences

The cap price of the Capped Call Transactions is initially $75.4075 per share of common stock, representing a premium of 75% above the last reported sale price of $43.09 per share of common stock on August 15, 2022, and is subject to certain adjustments under the terms of the Capped Call Transactions.

As of June 30, 2025, no capped calls had been exercised.

As of September 30, 2025, no capped calls had been exercised.

Pursuant to their terms, the capped calls qualify for classification within stockholders’ equity in our condensed consolidated balance sheets, and their fair value is not remeasured and adjusted as long as they continue to qualify for stockholders’ equity classification.

16 unchanged sentences

and (5) at any time from, and including, September 1, 2026 until the close of business on the scheduled trading day immediately before the maturity date.

As of June 30, 2025, the 2027 Convertible Notes were not convertible.

As of September 30, 2025, the 2027 Convertible Notes were not convertible.

12 unchanged sentences

The commitment fees range from 0.15% to 0.35% per annum based on our consolidated net leverage ratio.

As of June 30, 2025, the revolving credit facility was undrawn.

As of September 30, 2025, the revolving credit facility was undrawn.

Additional Capital Requirements

1 unchanged sentence

Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2024.

As of June 30, 2025, there have been no material changes to our expected working capital and other capital requirements described in our Annual Report on Form 10-K for the year ended December 31, 2024.

As of September 30, 2025, there have been no material changes to our expected working capital and other capital requirements described in our Annual Report on Form 10-K for the year ended December 31, 2024.

Critical Accounting Policies and Estimates

3 unchanged sentences

The accounting policies and estimates that are most critical to a full understanding and evaluation of our reported financial results are described in Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations of our Annual Report on Form 10-K for the year ended December 31, 2024.

There were no material changes to our critical accounting policies or estimates during the six months ended June 30, 2025.

There were no material changes to our critical accounting policies or estimates during the nine months ended September 30, 2025.

Recent Accounting Pronouncements

1 unchanged sentence

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis