Halozyme posted record royalty revenue of $236 million, up 52%, lifting total revenue 22% to $354 million and adjusted EBITDA 35% to $248.2 million on the strength of its subcutaneous ENHANZE franchise led by Darzalex. Collaboration revenue fell on milestone timing, but the company raised full-year guidance across revenue, EBITDA, and EPS. It also announced the Elektrofi acquisition to add at-home delivery technology, which will lift net leverage to roughly 2x and add about $55 million of operating expense in 2026.
Thank you, operator. Good afternoon and welcome to our third quarter 2025 financial and operating results conference call. In addition to the press release issued today after the market close, you can find a supplementary slide presentation that will be referenced during today's call in the Investor Relations section of our website. Leading the call will be Dr. Helen Torley, Halozyme's President and Chief Executive Officer, who will provide an update on our business, and Nicole LaBrosse, our Chief Financial Officer, will review our financial results as well as our outlook. On today's call, we will be making forward-looking statements as outlined on slide two. I would also refer you to our SEC filings for a full list of risks and uncertainties. During the call, both GAAP and non-GAAP financial measures will be discussed.
Certain non-GAAP or adjusted financial measures are reconciled with the comparable GAAP financial measures in our earnings press release and slide presentation. I will now turn the call over to Dr. Helen Torley.
Good afternoon, everyone, and thank you for joining us today. I will begin on slide three. I am very pleased to report another quarter of record royalty revenue of $236 million, representing a remarkable 52% increase year-over-year, and resulting in total revenue of $354 million, representing 22% growth year-over-year. These results were driven by the continued momentum of our three established blockbuster subcutaneous therapies, Darzalex Subcutaneous, Phesgo, and VYVGART Hytrulo. Adjusted EBITDA growth exceeded top-line growth, increasing 35% over prior year's third quarter to $248 million, reflecting the strength inherent in our royalty-based business model. Our core ENHANZE drug delivery technology continues to drive the significant momentum in our business and reflects a powerful and growing opportunity for subcutaneous delivery to reshape the future of healthcare.
ENHANZE can allow treatments that once required lengthy infusions in hospitals or infusion suites to be administered in minutes more conveniently, including in the doctor's office and in the patient's home. For patients, it means less time spent traveling, fewer invasive procedures, and greater independence, all while maintaining efficacy and safety. At the same time, it is reducing the burden on the healthcare systems, lowering total cost of care, and freeing up capacity in hospitals and infusion centers. Turning now to slide four. Year to date, 13 of the 15 growth catalysts have been achieved, including new product approvals, expanded indications, reaching new regions, and achieving key reimbursement milestones across major markets. These new growth catalysts support our near and long-term revenue opportunity. This quarter, there were two notable indication approvals for our two leading growth drivers.
Firstly, Darzalex Subcutaneous received European Commission approval for a new indication in smoldering multiple myeloma, providing another meaningful growth catalyst for the franchise. Smoldering multiple myeloma is a precursor condition to active multiple myeloma, expanding Darzalex Subcutaneous' reach into a new early disease-stage patient population and potentially increasing treatment duration and the lifetime value per patient. The second indication was argenx's VYVGART Hytrulo prefilled syringe with ENHANZE, approved in Japan for self-injection for generalized myasthenia gravis and chronic inflammatory demyelinating polyneuropathy. Delivered as a once-weekly, 30-90 seconds subcutaneous injection, VYVGART can be self-administered at home, eliminating the need for lengthy infusions in clinical settings. The prefilled syringe with ENHANZE is a key enabler of broader adoption because it simplifies administration, reduces treatment burden, and potentially enhances patient adherence.
Rounding out the 15 growth catalysts, we project two additional meaningful US approvals this year: one for Darzalex Subcutaneous in smoldering multiple myeloma and the second for RYBREVANT Subcutaneous in EGFR-mutated non-small cell lung cancer. I'll move now to slide five. Driven by the continued strong performance of our core ENHANZE technology, we are pleased to raise our full year 2025 guidance ranges. Driven by royalty revenues, we now project total revenue of $1.3 billion-$1.375 billion, reflecting 28%-35% growth over 2024. Royalty revenue is now expected to grow 49%-54% to $850 million-$880 million for the full year, primarily driven by our three established blockbuster subcutaneous therapies, Darzalex Subcutaneous, Phesgo, and VYVGART Hytrulo with ENHANZE. We now anticipate adjusted EBITDA of between $885 million and $935 million, representing year-over-year growth of 40%-48%. We expect non-GAAP diluted earnings per share of $6.10-$6.50, representing year-over-year growth of 44%-54%. Moving now to slide six.
Recently, we announced the acquisition of Elektrofi, furthering our vision to enable at-home administration of biologic therapies. This strategic move supports our ambition to expand our portfolio of drug delivery technologies. With Elektrofi's innovative technology, we aim to extend subcutaneous delivery to a broader range of biologics, reinforcing our focus on patient-centric drug delivery technology solutions. By applying Elektrofi's Hypercon technology, concentrations of 400-500 milligrams per ml, or as much as 4x-5x higher than many current conventional formulations, can now be achieved. This breakthrough technology will enable more drugs to be delivered at home via autoinjector, a treatment option we know is of high interest and demand for pharma and biotech companies, particularly those working in inflammation and immunology, neurology, nephrology, and oncology.
By bringing together now three innovative drug delivery technology solutions, ENHANZE, our autoinjectors, and Hypercon, we will create a new commercial opportunity for our partners and further strengthen Halozyme's role as a partner of choice in patient-centered drug delivery, expanding our long-term growth horizon. Moving now to slide seven. Importantly, Hypercon is at a value inflection point. The three partner agreements in place have resulted in two products projected to enter the clinic and begin clinical development of the Hypercon formulation by the end of 2026 or earlier. Each of these two products, as a different formulation, is already approved and has achieved blockbuster sales already. With Halozyme's established expertise in subcutaneous drug delivery, we are well positioned to identify opportunities to accelerate the time to approval and to unlock significant new revenue potential through advancing new nominations and signing new agreements.
The addition of Elektrofi's Hypercon technology further enhances our offerings, enabling us to provide best-in-class solutions and maintain strong momentum in transforming the subcutaneous delivery landscape. Now, let me move to slide eight, where I will review our current growth drivers for the quarter. Let me begin with Darzalex, which continued its exceptional performance this quarter. Sales for Darzalex increased 20% on an operational basis to $3.7 billion, primarily driven by the continued strong share gains of approximately 5.7 percentage points across all lines of therapy and nearly 9 percentage points in the front-line setting, as well as through market growth. This marks the seventh consecutive quarter of front-line growth of five or more percentage points, underscoring the continued momentum of the brand.
With 96% share of sales resulting from the subcutaneous formulation with ENHANZE in the United States and more than 90% global subcutaneous share, ENHANZE is bringing value to patients earlier in treatment as they live longer on therapy. Darzalex is, and we project will remain, the gold standard of treatment for multiple myeloma, holding more than 50% market share across all lines of therapy. There are two additional new catalysts that are projected to continue the strength of Darzalex Subcutaneous. These include the recent European Commission approval of Darzalex Subcutaneous for patients with high-risk smoldering multiple myeloma, which occurred in July, and it marks the first approved treatment for this early stage of the disease. We also anticipate potential U.S. approval for smoldering multiple myeloma following the FDA's favorable vote on the risk-benefit profile earlier this year.
Separately, Johnson & Johnson reported positive top-line results from the phase III MajesTEC-3 study, which further validated the role of DARZALEX FASPRO in later lines of multiple myeloma treatment. The combination with Tecvayli and DARZALEX FASPRO in relapsed refractory multiple myeloma demonstrated, at a planned interim analysis, a statistically significant improvement in both progression-free survival and overall survival when compared to standard of care for patients who had received one to three prior lines of treatment. Highlighting once again the clinical value of DARZALEX FASPRO with ENHANZE. These milestones add to the growing list of approvals and clinical successes that continue to expand the reach of Darzalex Subcutaneous and to support analyst projections for the brand to reach more than $18 billion in 2028. Halozyme will continue to earn royalties on the subcutaneous formulation of Darzalex through 2032.
Let me move now to Phesgo, which is shown on slide nine. Phesgo continues to be Roche's number one growth driver, with nine months revenue of CHF 1.8 billion, or approximately $2.3 billion, reflecting a 54% year-over-year increase. In the third quarter, the increasing conversion from intravenous Perjeta and Herceptin reached 51% in 78 launch countries, up five percentage points from the prior quarter. Conversion of Perjeta to Phesgo is now projected to achieve 60%, increasing from the prior 50% peak conversion, and this is driven by the strong value proposition. We are pleased with Phesgo's growing adoption, with royalties secured at the full mid-single digit rate through 2030. I'll turn now to VYVGART, which is shown on slide 10.
VYVGART Hytrulo continues to be a key driver of the exceptional growth of the VYVGART franchise, with total sales of VYVGART increasing 96% year-over-year in the third quarter to $1.13 billion. The subcutaneous formulation enabled by ENHANZE has been instrumental in expanding access to new prescribers and patients across both approved indications of generalized myasthenia gravis and chronic inflammatory demyelinating polyneuropathy. Supporting both of these indications, the prefilled syringe with ENHANZE, which was launched in April of 2023, is now approved in most major markets. By enabling self-injection in just 20-30 seconds, whether at home, in the clinic, or while traveling, this innovation has expanded access to new patient populations, simplified treatment logistics, and accelerated adoption in earlier lines of treatment for both GNG and CIDP. The prefilled syringe has expanded the number of prescribers by 260 physicians, opening up new pockets of patients in GNG and CIDP.
With approximately 50% of patients using the prefilled syringe who are new to VYVGART, argenx stated that this is still the beginning of the growth curve for both indications. Argenx also stated that they project VYVGART's total addressable GNG market could ultimately approach approximately 60,000 patients globally versus roughly 17,000 at launch as the biologic opportunity expands and with the future potential addition of ocular and seronegative patient populations. I'll turn now to the CIDP indication. Argenx commented that they are seeing consistent growth in both patient start and prescriber engagement, driven by physician trust in the safety profile of VYVGART Hytrulo and its ability to deliver meaningful functional improvements. The prefilled syringe is driving additional demand, offering convenience of self-injection and enabling flexible administration. 85% of CIDP patients are switching from IVIG, and there is also early adoption amongst treatment-naive patients.
Thank you, Helen. Our strong third-quarter performance continues to reflect the momentum of our core ENHANZE technology. Total quarterly revenues grew by approximately 22% to $354 million, with royalty revenue increasing 52% to $236 million. Adjusted EBITDA grew 35%, outpacing top-line growth and showcasing the exceptional leverage of our high-margin royalty-driven model. Let me start on slide 13. We continue to generate robust cash flow, which supports our balanced capital allocation priorities. Year to date, we repurchased $342 million of shares, with $158 million remaining under the current authorized plan. Since 2019, we have returned approximately $1.9 billion to shareholders through repurchases, representing greater than 100% of cumulative free cash flow over that period.
We have a strong balance sheet with cash, cash equivalents, and marketable securities of $702 million on September 30th, 2025, compared to $596.1 million on December 31st, 2024. The increase was driven by an increase in cash generated from operations, primarily offset by share repurchases. Our net debt-to-EBITDA ratio was 0.9x at the end of the third quarter. As Helen mentioned, we announced our acquisition of Elektrofi in the third quarter, a transaction that strengthens our leadership in drug delivery and complements our strong organic growth opportunities. We are pleased that the acquisition is expected to have a minimal increase in our net leverage, estimated to be at approximately 2x net debt-to-EBITDA at closing. Our goal is to delever in the subsequent quarters, supported by our robust free cash flows. Let me now turn to our detailed third-quarter results on slide 14.
Total revenue grew 22% to $354.3 million, compared to $290.1 million in the prior year period. Royalty revenue of $236 million increased by 52% from $155.1 million in the prior year period. The commercial success of subcutaneous Darzalex, Phesgo, and VYVGART Hytrulo continue to drive robust royalty revenue growth. Product sales of $94.2 million increased by 9% from $86.7 million in the prior year period, mainly driven by the contribution from proprietary product sales. Collaboration revenues of $24 million compared to $48.4 million in the prior year period. The difference was primarily due to the timing of milestones achieved. Research and development expenses were $17.3 million, compared to $18.5 million in the prior year period.
The decrease was primarily due to lower compensation expense driven by resource optimization and labor allocation initiatives, offset by the timing of planned investments in ENHANZE related to the development of our new high-yield rHuPH20 manufacturing process. Selling, general, and administrative expenses were $46.1 million, up from $41.2 million in the prior year period, primarily due to increased consulting and professional service fees, partially offset by compensation expense. Adjusted EBITDA increased by 35% to $248.2 million, from $183.6 million in the prior year. GAAP diluted earnings per share was $1.43, and non-GAAP diluted earnings per share was $1.72. This is compared with GAAP diluted earnings per share of $1.05 and non-GAAP diluted earnings per share of $1.27 in the third quarter of 2024. Turning now to slide 15. Based on our strong performance year to date, we are raising our guidance ranges for the full year.
As a reminder, our expectations exclude the impact of the accounting treatment of the Elektrofi transaction. The final determination of whether this transaction will be accounted for as a business combination or an asset acquisition will be determined at the close. We now expect total revenues of $1.3 billion-$1.375 billion, representing year-over-year growth of 28%-35%, driven by an increase in projections for royalty revenues. Royalty revenues of $850 million-$880 million, representing year-over-year growth of 49%-54%. We continue to expect Darzalex SC, Phesgo, and VYVGART Hytrulo to drive the strong expectations, with VYVGART Hytrulo being the largest royalty dollar growth driver. Product sales of $340 million-$365 million, representing year-over-year growth of 12%-20%. Collaboration revenues of $110 million-$130 million. Adjusted EBITDA of between $885 million and $935 million, representing year-over-year growth of 40%-48%. And non-GAAP diluted EPS of $6.10-$6.50, representing year-over-year growth of 44%-54%.
Regarding the future financial expectations of our acquisition of Elektrofi, we continue to expect the transaction to be less than 5% diluted to non-GAAP diluted EPS over the medium term, excluding potential milestone payments related to the programs in development, which could offset dilution. Prior to the projected royalty revenues in 2030 and beyond. We also expect full year 2026 incremental operating expense of approximately $55 million. With that, I'll now turn the call back over to Helen.
Thank you, Nicole. In closing, our third-quarter results reflect the continued strength of our core ENHANZE business and the accelerating momentum across our partner portfolio. With 10 launch products, a robust pipeline of future royalty streams, and the addition of the Hypercon technology, we're well positioned to deliver strong revenue and shareholder value for years to come. Let me just close with a few words on Nicole.
While Nicole will be with us on our fourth-quarter call in February, I did want to take this moment to thank Nicole for her many contributions to Halozyme. These have really helped us accomplish our growth strategy to date. Throughout this time, Nicole has helped design and lead multiple financing transactions that have provided the capital that enabled the strong growth that you see today. Nicole will be transitioning to a new opportunity in 2026 when a new CFO is hired or by March 30th, 2026. Operator, with that, we are now ready to open the call for questions.