Greetings, and welcome to the Halozyme Therapeutics Second Quarter 2012 Financial Results Conference Call. [Operator Instructions] As a reminder, this conference call is being recorded. It is now my pleasure to introduce your host, Anne Erickson, Executive Director of Investor Relations at Halozyme Therapeutics. Thank you, Ms. Erickson. You may begin your conference.

Good afternoon. Thank you for joining Halozyme's quarterly update conference call. With me on the call today are Gregory Frost, President and Chief Executive Officer; and Kurt Gustafson, Chief Financial Officer. This afternoon, Halozyme released second quarter 2012 financial results. If you've not received this news release or if you'd like to be added to the company's distribution list, please e-mail me at aerickson@halozyme.com. This call is also being webcast live over the Internet at www.halozyme.com, and a replay will be available on the company's website for the next 14 days. Before we begin, let me remind you that during this conference call, we will be making forward-looking statements. The Private Securities Litigation Reform Act of 1995 provides the Safe Harbor for forward-looking statements. All statements made during this conference call that are not statements of historical fact constitute forward-looking statements. The matters referred to in forward-looking statements could be affected by the risks and uncertainties of Halozyme's business, both known and unknown. Such risks inherent in the company's business are described in our filings with the Securities and Exchange Commission, as well as in our news releases. The company's actual results may differ materially from those expressed in or indicated by such forward-looking statements. With that, I'd like to turn the call over to Gregory Frost, Halozyme's President and CEO.

Thank you, Anne, and good afternoon to everyone. We appreciate you participating in our second quarter call for 2012. Today, I'll be elaborating on the announcement we made last week, as well as providing an update on the business. After that, Kurt Gustafson, Halozyme's CFO, will review the quarter's underlying financial results with you. As you know, we confirmed last week that Baxter received the Complete Response Letter from FDA's Blood Products division for the HyQ BLA. And at this point in time, the subcutaneous plasma derivatives programs for the recombinant human hyaluronidase, or rHuPH20, are not dosing patients. Upon receiving this information from Baxter and ViroPharma early last week, we contacted FDA's Drug division to ascertain whether this regulatory action would apply to other programs using rHuPH20. According to our most recent communications with the drug divisions last Wednesday, following submission of a data supplement to the Hylenex NDA, including detailed immunogenicity data from insulin and subcutaneous Herceptin programs, we were informed by the drug division that concerns appear to be related to potential interactions with certain biologics that generate an antibody response that is different from what we've seen in other development programs using rHuPH20. Furthermore, the drug division confirmed that there is no need for actions against Hylenex or clinical programs under the Hylenex IND. As a reminder, the only open trial at this time under the Hylenex IND is the ongoing Hylenex insulin pump study. For these reasons, we believe that the regulatory concerns raised by FDA's Blood Products division are specific to Baxter and ViroPharma's clinical programs. It's not abnormal to see some form of antibodies to recombinant proteins with sufficient assays. In fact, approximately 10% of the general population test positive to anti-rHuPH20 antibodies prior to any exposure to the rHuPH20 enzyme. This is…

Thanks, Greg and hello to everyone. Earlier today, we announced our financial results for the second quarter of 2012. The net loss for the second quarter of 2012 was $14 million, or $0.13 per share, compared with the net income for the second quarter of 2011 of $3.1 million, or $0.03 per share. The net loss for the 6 months ended June 30, 2012 was $29.1 million or, $0.27 per share, compared to a net loss of $6.5 million, or $0.06 per share, for the same period last year. Revenues for the second quarter of 2012 were $7.8 million compared to $23.2 million for the second quarter of 2011. Revenue was higher last year as we signed 2 partnerships, where we recorded $18 million of upfront licensing revenue. Research and development expenses for the second quarter of 2012 were $16.1 million, compared with $15.3 million for the second quarter of 2011. SG&A expenses for the second quarter of 2012 were $5.6 million compared to $4.6 million last year. Cash and cash equivalents were $102 million as of June 30, 2012, and net cash used in the second quarter of 2012 was $14.6 million. Lastly, we are leaving our 2012 cash burn guidance unchanged at $55 million to $60 million. And I'll now turn the call back over to Greg.

Thanks, Kurt. While we received some disappointing news last week, I want to assure you that everyone at Halozyme is dedicated to doing what it takes to advance all the programs in our pipeline, on behalf of you, our shareholders and the patients we serve. [Audio Gap] Operator?

[Operator Instructions] Our first question comes from the line of John Sonnier with William Blair. John S. Sonnier - William Blair & Company L.L.C., Research Division: I just want to clarify on some of the commentary around the antibodies. It sounds like you've highlighted, Greg, both differences in type, as well as in magnitude. So if you could confirm that. And then on the magnitude, you're talking about just the absolute number comparing what the incidence of antibodies was trial to trial. Or are you talking about changes from baseline?

Sure, John. No, to be very specific, so this is not related to the type of antibodies observed. And as we mentioned, all of these were non-neutralizing antibodies and no signs of any allergic type reactions in any case. Specifically, this relates simply to the magnitude. And so as I mentioned last week, we use an analytical method for all of our programs. That's common, so you get an apples-to-apples comparison. And simply what's been observed is that titers or absolute levels of these antibodies, not the incidence per se, but the actual titers, which haven't been presented, which are orders of magnitude different than what you see in the general population. In contrast, what we've seen in the diabetes studies and also in the Herceptin studies, they actually look very similar to each other and that's essentially that the antibody levels in titer that you see after exposure to the enzyme are in the same general range of what you see in the population before exposure. In other words, no signs or signals about what we would call boosting, from that standpoint, or mounting an immune response to the protein. John S. Sonnier - William Blair & Company L.L.C., Research Division: Well, I think you've seen like 5% to 10% as the baseline in a lot of the studies in the general population. So I guess what I'm trying to get at is whether or not there's been a disclosure around the order of magnitude change from baseline and the HyQvia study versus that, that was observed in the Roche studies?

No, no. What we have disclosed is the titer values, for example,what's been seen in the diabetes trials. And so what you have is the titer values. So of that 5% to 10%, how much antibody is present in the blood of those individuals? And then what is the change after exposure to enzyme? And so the change that you see after exposure is essentially in the same range of what you see prior to exposure. So if a patient is positive before and has a titer of, say, 1 to 500, is it 1 to 500 afterwards or is it higher? And that's what we're looking at on the basis of the general range on these types of things, which is similar between the Herceptin and diabetes studies. John S. Sonnier - William Blair & Company L.L.C., Research Division: That's a helpful clarification. Just a quick one for Kurt. You had previously talked about a 24-team profitability goal. Is that maintained today? Is that still feasible without HyQvia?

Yes, John. I think the major drivers for us to achieve profitability have always been the Roche programs, given the size of those programs. And so yes, I think the Roche programs alone can certainly drive us to that. We'll probably provide some more specific guidance on that when we redo our numbers here in the fall and talk with you at Analyst Day. But if your question is if it's still feasible, clearly, the Roche programs can drive it by themselves.

Our next question comes from the line of Jason Butler with JMP Securities.

Just a follow-up question now on the titers. We did see an increase in frequency of patients positive for antibodies in the Herceptin study. Can we read from that, that FDA is more concerned with magnitude than incidents?

Yes, that's essentially what we're getting at here, Jason, which is that if you find, for example, with these very sensitive assays, you essentially want to go through a measure of someone who's mounting a response to the protein, and so essentially what you do is you're measuring their titers under what's called the longitudinal analysis, or before exposure at, during and after exposure. And so what you're seeing is that the types of antibody responses that you'd get after exposure in these populations are within the same sort of range that you see in the general population before.

Okay, great. And then acknowledging that we've only just had the top line data released, can you guys make any statements about what the antibiotic -- sorry, antibody profiles were in the MabThera Phase III trial?

No, I can't comment on that, only to say obviously, we've been in very active communication with Roche and have not been informed of any red flags from their standpoint at this point.

Our next question comes from the line of Chris Holterhoff with Oppenheimer. Christopher Holterhoff - Oppenheimer & Co. Inc., Research Division: Just another question on the HyQvia program. Just wondering if you can kind of remind us and maybe speak generally about what type of preclinical data you already have on end versus new data you might need to generate that you think could address some of the agency's concerns on reproduction and development and fertility?

Sure. So just to be clear, kind of when we started on this is that there's no adverse events that have been seen to data associated with anti-PH20 antibodies. The questions of the Blood Products division aren't based on any animal finding, for example, that we have with the enzyme, which includes the full battery of tests, which includes fertility, development, as well as chronic administration. However, due to the magnitude of the titers that were observed, they're essentially asking for preclinical safety studies to evaluate the potential risk of exposure to these antibodies in a similar battery of tests in relevant models. So what we're doing right now is we've kind of mentioned is a gap analysis of the studies that have been performed, how many of them developed antibodies that are relevant or not relevant, and then as for as the specific animal model, whether or not the ones that have been performed address the concerns or not. And so some of the animal models that we performed to date, we have a pretty good evaluation of that. And then in others, it's going to require, I think, discussion with the agency and proposals based upon that gap analysis, as far as how you do fill those. Christopher Holterhoff - Oppenheimer & Co. Inc., Research Division: Okay. That's helpful. And then maybe just one for Kurt. On the cash burn guidance for this year. I know it's unchanged, so I'm just kind of wondering what that implies. Should we read into that, that you don't plan on starting any new significant preclinical or clinical studies to address some of these HyQvia concerns maybe before the end of this year?

Yes, Chris. I think we don't really know what those studies will be until we sit down with FDA. I guess, we have a sense of what they might be. There's also -- we have to have a conversation with Baxter about the reimbursement of those. So yes, until we can get a little bit more data, we don't have a -- we didn't have an ability to raise the forecast, if you will. And I think Chris, by the time we meet with the FDA and design those things, the impact, especially if we're thinking about preclinical studies, I don't think we're going to see a large impact from that. Christopher Holterhoff - Oppenheimer & Co. Inc., Research Division: Okay. That's great. And then just lastly, can you just break down your -- the product revenues between Hylenex and [indiscernible] this quarter?

I think as we've said earlier, Chris, in the year that we're not going to provide any specific revenue guidance on Hylenex and break this out until it becomes a meaningful number. These numbers are still real small. And I think that we'll probably talk more about it as the quarters progress and this becomes a more meaningful number.

[Operator Instructions] Our next question comes from the line of Dan Chung with Jefferies. Daniel Chung - Jefferies & Company, Inc., Research Division: This is actually a question for Kurt. Do you have a forecast on the stock option expenses for 2012?

Yes, we do. But I don't -- it's not a number that we provide. I think the best guidance that I could give you there is to take a look at where we've been historically. We have a few more staff than we had probably in previous years. And so you -- one would expect that that goes up slightly based on that number. But I can't provide you any specific guidance on that.

Our next question comes from the line of Ying Huang with Barclays.

Number one, Greg, can you elaborate a little bit about why FDA is concerned with specifically around reproductive and development issues even though they do not see anything in human patients. And then, number two, I understand that Roche subcu -- subcu Herceptin are using the so-called second-generation technology, which does not have any [indiscernible] in that formulation. Beyond that, can you tell us what's the difference between the 2 formulations used by HyQ versus the Roche programs?

Sure, Ying. Well, so let's see if I can tackle those 2 questions specifically. So the first one, as far as the FDA's concerns, so just to start with that. As a reminder, we didn't see any adverse events in patients that had anti-PH20 antibodies that gave rise to these concerns or any preclinical toxicology animal findings. The questions are raised about understanding the effect of exposure of these antibodies in a standard safety assessment settings. So the studies on fertility, reproduction and early development, they're much like the standard battery of tox tests that we've already completed, and this is essentially your standard battery that one performs. So the CRLs requested that we address any potential risk of exposure to elevated enzyme titers in the HyQ program through a similar battery of test. Now your second question, which is regarding Roche. So we have multiple scales and processes for bulk enzyme production, and these are provided to our partners for formulation into distinct drug products. While these differences, I think, could in theory have an impact in immunogenicity, our analysis, which has been reviewed with the regulatory agencies last week, suggests that the difference in immunogenicity profile that's been observed is unrelated to these manufacturing differences.

Our next question comes from the line of Jesse Grossman [ph] with Jesse Grossman.

I think this is for Kurt. The sales from the Roche 6 months indicated approximately $2 billion for Herceptin, which is x Japan and x United States. And those $2 billion were made up about 50% Western Europe and 50% rest of the world. And MabThera was about $1.6 billion with the same 50-50 breakdown. For purposes of modeling, would you consider the rest of the world sales?

Well, yes, from the standpoint of what the license that Roche signed with us, it was a worldwide license. And so as we think about where Roche is studying both Herceptin, as well as MabThera, these studies are going on. I mean, basically, it's everywhere but the U.S. at this point. And I think one of the recent studies that they're doing for Herceptin was in over 60 different countries around the world. So yes, I guess, the answer is the way we would look at this from a modeling standpoint would be to include Western Europe, as well as other places in the rest of the world.

Dr. Frost, there are no further questions at this time. I would like to turn the floor back over to you for closing comments.

Thanks. This concludes today's conference call. And thanks again for joining us.

Thank you. This concludes today's teleconference. You may disconnect your lines at this time, and thank you for your participation.