HALO (HALO) Q3 2025: Royalty Revenue Surges 52% as Subcutaneous Therapies Expand Market Reach

November 3, 2025 | By EarningsIQ Research

HALO delivered record royalty revenue growth, powered by blockbuster subcutaneous therapies and strategic portfolio expansion. The company’s model leverages high-margin royalty streams from partner-launched biologics and is further strengthened by the Electrify acquisition, positioning HALO for sustained multi-year growth. Investor focus shifts to pipeline execution and the durability of new launches as management raises guidance and signals confidence in further deal-making.

Summary

• Subcutaneous Franchise Momentum: Three core therapies accelerated adoption and expanded into new indications, broadening HALO’s revenue base.
• Portfolio Diversification Advances: Electrify acquisition and new product launches extend the addressable market and deepen partner engagement.
• Guidance Raised on Visibility: Upward revisions reflect durable royalty streams and near-term catalysts, setting the stage for further growth in 2026.

Performance Analysis

HALO’s royalty-driven business model, which collects a percentage of sales from partner-launched biologics using its Enhance technology, continues to deliver exceptional leverage. Royalty revenue rose 52% year over year, outpacing total revenue growth of 22%, as blockbuster subcutaneous therapies—Darzalex subcutaneous, Fezgo, and Vyvgart Hytrulo—drove the bulk of incremental earnings. These three products alone contributed to the majority of the revenue surge, with Darzalex subcutaneous maintaining a dominant market share and expanding into new patient populations such as smoldering multiple myeloma.

Adjusted EBITDA grew 35%, reflecting the scalability and high-margin nature of HALO’s royalty streams. The company’s operational cash flow remains robust, supporting both share repurchases and the Electrify acquisition. Product sales also increased, though at a slower pace than royalties, while collaboration revenue declined due to timing of milestones. R&D spend was modest and disciplined, with efficiency gains offsetting incremental investments in manufacturing process innovation.

• Subcutaneous Adoption Drives Upside: Rapid conversion from intravenous to subcutaneous formulations is accelerating partner sales and expanding HALO’s royalty base.
• High-Margin Model Delivers Leverage: Royalty streams flow directly to the bottom line, amplifying EBITDA growth beyond top-line expansion.
• Shareholder Return Remains a Priority: Over $340 million of buybacks year-to-date, with further capacity signaled for 2026.

HALO’s financial profile is increasingly defined by durable, growing royalty streams, with upside from new indications and recently launched partner products poised to contribute meaningfully from 2026 onward.

Executive Commentary

Strategic Positioning

1. Blockbuster Subcutaneous Therapies as Core Growth Engine

HALO’s Enhance platform, a drug delivery technology enabling rapid subcutaneous injection, underpins the company’s royalty streams. The three flagship products—Darzalex subcutaneous (multiple myeloma), Fezgo (oncology), and Vyvgart Hytrulo (autoimmune)—are gaining both market share and new indications, expanding the company’s addressable royalty pool. Darzalex subcutaneous achieved a 96% share of sales in the U.S. and more than 90% globally, while Fezgo and Vyvgart Hytrulo are seeing accelerated adoption and new patient populations unlocked by recent approvals.

2. Electrify Acquisition and Portfolio Expansion

The Electrify acquisition, which brings HyperCon technology (ultra-high concentration subcutaneous delivery), positions HALO to address a broader range of biologics and delivery settings, including at-home administration and auto-injectors. This complements the existing Enhance platform and opens new commercial opportunities in inflammation, neurology, nephrology, and oncology. Electrify’s HyperCon is already partnered with blockbuster products, with first clinical entries expected by 2026.

3. Partner Pipeline and Launch Cadence

HALO’s royalty pipeline is set to expand further, with 10 launched products and eight more in clinical development. Recently launched products such as Ocrevus subcutaneous (multiple sclerosis) and Opdivo Quantage (oncology) are early in their adoption curves and expected to become material contributors. The company’s model relies on partner R&D and commercialization, reducing HALO’s direct development risk while ensuring a steady stream of new royalty sources.

4. Capital Allocation and Deleveraging

Management is balancing M&A, share repurchases, and debt management. The Electrify deal will temporarily raise leverage to about two times net debt to EBITDA, but strong free cash flow is expected to bring this down quickly. HALO has demonstrated capacity for both strategic acquisitions and consistent shareholder return, with a willingness to lever up to three times for the right opportunity.

5. Long-Term Royalty Durability and New Deal Flow

Royalty streams from current blockbusters extend into the 2030s and 2040s, providing visibility for long-term cash flows. Management is confident in signing at least one new Enhance agreement this year, and new deals are expected to launch in the early 2030s, sustaining revenue beyond current contract expirations.

Key Considerations

HALO’s quarter highlights a business model that is both highly leveraged to partner execution and increasingly diversified by new technologies and products. Investors should weigh the following:

Key Considerations:

• Royalty Growth Outpaces Product Sales: The company’s financial engine is tied to partner sales growth, especially as subcutaneous delivery gains preference across indications.
• Electrify Integration and Synergy Realization: Execution risk exists in integrating HyperCon technology and realizing cross-platform synergies, but early partner feedback is supportive.
• Pipeline and Launch Visibility: Upcoming launches and new indications for existing products will determine the durability of outperformance into 2026 and beyond.
• Capital Flexibility for M&A: Management’s willingness to lever up for strategic deals signals continued portfolio expansion, but patience and discipline remain central to their approach.
• Contract Durability and New Deal Flow: With key contracts expiring in the 2030s, ongoing deal-making and pipeline development are essential for sustaining long-term growth.

Risks

HALO’s reliance on partner commercialization, regulatory approvals, and new indication launches introduces execution risk outside its direct control. Integration of Electrify brings operational complexity, and the company’s willingness to lever up for M&A could increase financial risk if new deals underperform. Contract expirations after 2030 and evolving competitive dynamics in drug delivery technology are additional factors to monitor.

Forward Outlook

For Q4 2025, HALO guided to:

• Total revenue of $1.3 to $1.375 billion for the full year (28% to 35% YoY growth)
• Royalty revenue of $850 to $880 million (49% to 54% YoY growth)
• Adjusted EBITDA of $885 to $935 million (40% to 48% YoY growth)
• Non-GAAP diluted EPS of $6.10 to $6.50 (44% to 54% YoY growth)

Management highlighted several factors that will shape performance:

• Continued momentum from new product launches and indication expansions
• Potential for at least one new Enhance partnership agreement before year-end
• Electrify acquisition expected to be less than 5% dilutive to non-GAAP EPS over the medium term, with incremental operating expense of $55 million in 2026

Takeaways

HALO’s royalty-centric model is delivering on its promise of scalable, high-margin growth, with new technologies and launches extending the company’s opportunity set. The business is well-positioned for durable revenue streams, but the long-term trajectory will depend on continued partner success, effective integration of new platforms, and the pace of new deal flow.

• Royalty Powerhouse: Subcutaneous franchise and new launches are expanding HALO’s royalty base and driving EBITDA leverage.
• Strategic Optionality: Electrify acquisition and willingness to pursue additional M&A provide levers for further growth, but integration and execution are critical.
• Pipeline Execution: Investor focus should remain on partner launches, new indication uptake, and the cadence of new agreements to sustain multi-year growth.

Conclusion

HALO’s Q3 2025 results reinforce its status as a royalty-driven growth story, with expanding market reach and a deepening technology portfolio. The company’s ability to convert partner success into high-margin revenue, combined with disciplined capital allocation and ongoing deal-making, positions it as a leader in the evolving biologics delivery landscape.

Industry Read-Through

HALO’s results highlight a major shift toward subcutaneous drug delivery, as biopharma partners increasingly prioritize patient convenience and healthcare system efficiency. The company’s success demonstrates the value of enabling technologies that reduce infusion times and expand access to biologics, a trend likely to accelerate as more therapies transition to at-home administration. For other drug delivery and specialty pharma players, the quarter underscores the importance of platform scalability, robust partnership models, and the ability to address new indications and delivery settings. Ongoing innovation in formulation and device integration will remain a key competitive battleground across the sector.

HALO Healthcare Pharmaceuticals Royalties Drug Delivery M&A Subcutaneous