Nasdaq-listed Halozyme Therapeutics Inc. (HALO) said AbbVie Inc. (ABBV) has discontinued a development program using Halozyme’s Enhanze drug-delivery technology and the tumor necrosis factor alpha (TNF-alpha) target. The decision was based on the outcome of a failed Phase 1 study.

While most drugs require intravenous administering, Halozyme’s proprietary drug delivery platform called Enhanze uses enzymes to allow certain drugs to be delivered under the skin. It results in more efficient and convenient drug delivery. (For more, see How Halozyme Uses Enzymes to Deliver Drugs.)

In June 2015, Halozyme and AbbVie entered into a global licensing agreement to develop drugs combining proprietary AbbVie compounds with Halozyme's Enhanze platform. The deal involved nine collaboration targets, each having a potential of $130 million in milestone-based payments.

TNF-alpha was the first target of nine included in the deal, but its recent failure during early-stage studies resulted in the program's discontinuation. 

Will Continue to Work Together

Halozyme said the two companies “will continue to work collaboratively to identify additional targets for co-development under their 2015 global collaboration and licensing agreement.”

A significant part of Halozyme’s current operations and future prospects depend on the partnerships it has with pharmaceutical giants like Roche, Baxalta International Inc. (BAX), EIi Lilly & Co (LLY), Pfizer Inc. (PFE), Janssen, and AbbVie.

While Halozyme’s Enhanze technology has potential, it may take years to show a profit, as most of its drug partnerships are in the early stages. However, the company remains optimistic about the future potential from such collaborations. (For more, see Halozyme 3Q Loss Beats Street Estimates.)

If the prospective drugs can make it to market, Halozyme could see $900 million from royalty payments on future sales. 

Want to learn how to invest?

Get a free 10 week email series that will teach you how to start investing.

Delivered twice a week, straight to your inbox.