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UNITED
    STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C.
    20549
  Form 10-K
   þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) 
    OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended
    December 31, 2010ORo

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period
    from          to   Commission File Number: 001-32335
 Halozyme Therapeutics,
    Inc.
 (Exact name of registrant as
    specified in its charter)
  Delaware(State or other jurisdiction
    of
    incorporation or organization)

88-0488686(I.R.S. Employer
    Identification No.)11388 Sorrento Valley Road,
    San Diego, California(Address of principal
    executive offices)

92121(Zip
    Code)   (858)
    794-8889
 (Registrants Telephone
    Number, Including Area Code)
  Securities registered under Section 12(b) of the Act:
  Title of Each Class

Name of Each Exchange on Which RegisteredCommon Stock, $0.001 Par Value

The NASDAQ Stock Market, LLC   Securities registered under Section 12(g) of the Act:
    None
  o þ
  o þ
  þ o
  Regulation S-T o o
  Regulation S-K Form 10-K Form 10-K. þ
    Large accelerated
    filer o

Accelerated
    filer þ

Non-accelerated
    filer o

Smaller reporting
    company o(Do not check if a smaller reporting company)   Rule 12b-2 o þ
      DOCUMENTS
    INCORPORATED BY REFERENCE




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##### 





Table of
    Contents
   
 PagePART IItem 1.

Business


1Item 1A.

Risk Factors


12Item 1B.

Unresolved Staff Comments


23Item 2.

Properties


23Item 3.

Legal Proceedings


23Item 4.

Removed and Reserved


23PART IIItem 5.

Market For Registrants Common Equity,
    Related Stockholder Matters and Issuer Purchases of Equity
    Securities


24Item 6.

Selected Financial Data


26Item 7.

Managements Discussion and Analysis of
    Financial Condition and Results of Operations


26Item 7A.

Quantitative and Qualitative Disclosures About
    Market Risk


37Item 8.

Financial Statements and Supplementary Data


37Item 9.

Changes in and Disagreements with Accountants on
    Accounting and Financial Disclosure


37Item 9A.

Controls and Procedures


37Item 9B.

Other Information


40PART IIIItem 10.

Directors, Executive Officers and Corporate
    Governance


40Item 11.

Executive Compensation


41Item 12.

Security Ownership of Certain Beneficial Owners
    and Management and Related Stockholder Matters


41Item 13.

Certain Relationships and Related Transactions,
    and Director Independence


42Item 14.

Principal Accounting Fees and Services


42PART IVItem 15.

Exhibits and Financial Statement Schedules


43SIGNATURES


46EX-10.36EX-23.1EX-31.1EX-31.2EX-32




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PART I  Item 1.
    Business  This Annual Report on
    Form 10-K
    contains forward-looking statements regarding our business,
    financial condition, results of operations and prospects. Words
    such as expects, anticipates,
    intends, plans, believes,
    seeks, estimates, thinks,
    may, could, will,
    would, should, continues,
    potential, likely,
    opportunity and similar expressions or variations of
    such words are intended to identify forward-looking statements,
    but are not the exclusive means of identifying forward-looking
    statements in this Annual Report. Additionally, statements
    concerning future matters such as the development or regulatory
    approval of new products, enhancements of existing products or
    technologies, third party performance under key collaboration
    agreements, revenue and expense levels and other statements
    regarding matters that are not historical are forward-looking
    statements.
  Although forward-looking statements in this Annual Report
    reflect the good faith judgment of our management, such
    statements can only be based on facts and factors currently
    known by us. Consequently, forward-looking statements are
    inherently subject to risks and uncertainties and actual results
    and outcomes may differ materially from the results and outcomes
    discussed in or anticipated by the forward-looking statements.
    Factors that could cause or contribute to such differences in
    results and outcomes include without limitation those discussed
    under the heading Risk Factors below, as well as
    those discussed elsewhere in this Annual Report. Readers are
    urged not to place undue reliance on these forward-looking
    statements, which speak only as of the date of this Annual
    Report. We undertake no obligation to revise or update any
    forward-looking statements in order to reflect any event or
    circumstance that may arise after the date of this Annual
    Report. Readers are urged to carefully review and consider the
    various disclosures made in this Annual Report, which attempt to
    advise interested parties of the risks and factors that may
    affect our business, financial condition, results of operations
    and prospects.
  Overview
    tm tm ® ® in vitro
   1




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and/or
  Form S-3 No. 333-164215)
  (858) 794-8889 e-mail info@halozyme.com
 2




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Technology
    Strategy
      
    Develop our own proprietary products based on our PH20 enzyme
    and other new molecular entities;
    Seek partnerships for our Enhanze Technology drug delivery
    platform;
    Support product development and commercialization under our
    Roche Enhanze Technology collaboration;
    Support product development and commercialization under our
    Baxter BioScience Enhanze Technology collaboration; and
    Reintroduce HYLENEX to the market. 3




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Products
    and Product Candidates
    
  Ultrafast
    Insulin Program
  ® ® ®
 4




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best-in-class
  
    In January 2011, we initiated an insulin pump study that
    utilizes rHuPH20 combined with two commercially available
    mealtime insulin analogs: insulin aspart and insulin glulisine.
    Patients with type 1 diabetes enrolled in these pump studies
    will receive the insulin analog alone and the Analog-PH20
    combination for three days each. Data for pharmacokinetic and
    glucodynamic measures as well as safety and tolerability will be
    collected and compared for each treatment. The double-blind
    crossover pump study will enroll approximately 36 type 1
    diabetes patients who already receive their insulin therapy with
    a pump. Patients will receive subcutaneous continuous infusions
    of either insulin aspart alone and insulin aspart with rHuPH20
    for 72 hours each or insulin glulisine alone and insulin
    glulisine with rHuPH20 for 72 hours each. The primary
    endpoint of the study is a comparison of the early insulin
    exposure as measured by the area under the curve during the
    first 60 minutes following a bolus infusion of insulin delivered
    by a pump. Various pharmacokinetic and glucodynamic measures
    including
    Cmax,
    Tmax,
    glucose infusion rates, glycemic response to standard meal
    challenges, and area under the curve at specified time intervals
    will also be measured. An evaluation of the safety and local
    tolerability of the analogs with and without rHuPH20 will also
    be performed. We currently expect that results from the study
    will be available for presentation at a scientific forum by
    mid-2011.
    In January 2011, we completed patient enrollment for two
    randomized double-blind Phase 2 clinical trials that utilize our
    rHuPH20 in combination with the two leading commercially
    available mealtime analogs: insulin aspart and insulin lispro.
    Diabetes patients enrolled in these cross-over design studies
    receive an insulin analog alone and the Analog-PH20 treatment
    for 12 weeks each. Previous studies have demonstrated that
    the coinjection of rHuPH20 with an insulin analog results in a
    more physiologic fast-in, fast-out profile that enhances the
    mealtime glycemic control for each analog. These Phase 2
    clinical trials, one in type 1 diabetes patients and the other
    in type 2 patients, will compare two ultrafast insulin
    analog products formulated with rHuPH20 to an active comparator,
    Humalog. Each study enrolled approximately 110 patients and
    began with a 4 to 6 week titration period where patients
    optimized their basal insulin dosing. Patients then randomized
    to receive either the Lispro-PH20 or Aspart-PH20 investigational
    study drugs and the active comparator three times daily for
    12 weeks each in a random sequence. The primary endpoint of
    each study will be a comparison of improved glycemic control, as
    assessed by the change in glycemic control from baseline. Data
    regarding postprandial glucose levels, the proportion of
    patients that safely achieve glycemic control targets, rates of
    hypoglycemia, weight change and additional endpoints will be
    collected.
    In August 2010, we completed a Phase 2 clinical trial to compare
    regular insulin with rHuPH20 to lispro alone. After a one-month
    observation period that included dose optimization, patients
    were randomized to regular insulin with rHuPH20 or lispro and
    treated for three months. At the end of three months, patients
    were crossed over to the other study treatment for another three
    months. This study was designed to evaluate the safety and
    efficacy of Insulin-PH20 relative to a standard of care therapy,
    Humalog. The results of this study were presented at the Tenth
    Annual Diabetes Technology Meeting, November 2010, in Bethesda,
    Maryland.
    In March 2010, we completed a Phase 2 clinical study in patients
    with type 2 diabetes mellitus. This randomized cross-over design
    study was designed to compare the postprandial glycemic
    excursions 5




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following a standardized test meal for three treatment regimens:
    insulin lispro with rHuPH20, regular insulin with rHuPH20 and
    lispro alone, each delivered at an individually optimized dose.
    The clinical trial results showed that injection of insulin
    lispro with rHuPH20 reduces both hyperglycemic excursions and
    incidence of hypoglycemia relative to insulin lispro alone, and
    that the optimum dose of insulin lispro was reduced when
    coinjected with rHuPH20. The results from this study were
    presented at the American Diabetes Association, or ADA, 70th
    Scientific Sessions in Orlando in June 2010 and at the 46th
    Annual Meeting of the European Association for the Study of
    Diabetes, or EASD, in Stockholm, Sweden in September 2010.  
    In February 2010, we completed a Phase 1 clinical study designed
    to assess the effects of three approved prandial insulin analogs
    administered with rHuPH20 compared to each of the analogs alone,
    each delivered at a standardized dose. This randomized, six-way
    cross-over design, euglycemic clamp study compared the
    postprandial pharmacokinetics and glucodynamics of the insulin
    analogs with and without rHuPH20. The clinical trial results
    showed that the addition of rHuPH20 to three different mealtime
    insulin analogs accelerated their absorption. The acceleration
    produced by the coadministration of rHuPH20 produced
    significantly more pronounced insulin action during the first
    two hours after injection followed by a more rapid diminution of
    insulin effects compared to the analogs alone. The coinjection
    of PH20 with lispro, aspart and glulisine results in a more
    physiologic fast-in, fast-out profile and accelerates the
    glucodynamic profile for each analog. The results from this
    study were also presented at the ADA 70th Scientific Sessions in
    Orlando in June 2010 and the 46th Annual Meeting of the EASD in
    Stockholm, Sweden in September 2010.  PEGPH20
  48-72 hours.
      Enhanze
    Technology
   6




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Roche
    Partnership
    ® ® ®
  20-25%
        Baxter
    Gammagard Partnership
   7




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HYLENEX
    Partnership
          Cumulase
  ex vivo
  Patents
    and Proprietary Rights
   8




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Research
    and Development Activities
      Manufacturing
   9




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Sales and
    Marketing
  HYLENEX
      Cumulase
    Competition
  HYLENEX
  ® tm
  Cumulase
    Government
    Regulations
    
    Animal pharmacology studies to obtain preliminary information on
    the safety and efficacy of a drug;
    Laboratory and preclinical evaluation in vitroand
    in vivoincluding extensive toxicology studies.   10




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
    Phase 1 investigations are generally conducted in healthy
    subjects. In certain instances, subjects with a life-threatening
    disease, such as cancer, may participate in Phase 1 studies that
    determine the maximum tolerated dose and initial safety of the
    product;
    Phase 2 studies are conducted in limited numbers of subjects
    with the disease or condition to be treated and are aimed at
    determining the most effective dose and schedule of
    administration, evaluating both safety and whether the product
    demonstrates therapeutic effectiveness against the
    disease; and
    Phase 3 studies involve large, well-controlled investigations in
    diseased subjects and are aimed at verifying the safety and
    effectiveness of the drug.  and/or
          Product
    Liability Insurance
    Executive
    Officers of the Registrant
  Part III-Item 10.
 11




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Employees
    Item 1A.
    Risk
    Factors  Risks
    Related To Our Business
  We
    have generated only minimal revenue from product sales to date;
    we have a history of net losses and negative cash flow, and we
    may never achieve or maintain profitability.
  and/or
  If our
    proprietary and partnered product candidates do not receive and
    maintain regulatory approvals, or if approvals are not obtained
    in a timely manner, such failure or delay would substantially
    impair our ability to generate revenues.
  Our proprietary and partnered product candidates
    may not receive regulatory approvals for a variety of reasons,
    including unsuccessful clinical trials.
    If our
    contract manufacturers are unable to manufacture significant
    amounts of the API used in our products and product candidates,
    our product development and commercialization efforts could be
    delayed or stopped and our collaborative partnerships could be
    damaged.
   12




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and/or and/or and/or
  If any
    party to a key collaboration agreement, including us, fails to
    perform material obligations under such agreement, or if a key
    collaboration agreement, or any other collaboration agreement,
    is terminated for any reason, our business could significantly
    suffer.
      Most
    of our current proprietary and partnered products and product
    candidates rely on the rHuPH20 enzyme.
    Our
    proprietary and partnered product candidates may not receive
    regulatory approvals for a variety of reasons, including
    unsuccessful clinical trials.
   13




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
    regulatory review may not find a product candidate safe or
    effective enough to merit either continued testing or final
    approval;
    regulatory review may not find that the data from preclinical
    testing and clinical trials justifies approval, or they may
    require additional studies that would significantly delay or
    make continued pursuit of approval commercially unattractive;
    a regulatory agency may reject our trial data or disagree with
    our interpretations of either clinical trial data or applicable
    regulations;
    the cost of a clinical trial may be greater than what we
    originally anticipate, and we may decide to not pursue
    regulatory approval for such a trial;
    a regulatory agency may not approve our manufacturing processes
    or facilities, or the processes or facilities of our partners,
    our contract manufacturers or our raw material suppliers;
    a regulatory agency may identify problems or other deficiencies
    in our existing manufacturing processes or facilities, or the
    existing processes or facilities of our partners, our contract
    manufacturers or our raw material suppliers;
    a regulatory agency may change its formal or informal approval
    requirements and policies, act contrary to previous guidance,
    adopt new regulations or raise new issues or concerns late in
    the approval process; or
    a product candidate may be approved only for indications that
    are narrow or under conditions that place the product at a
    competitive disadvantage, which may limit the sales and
    marketing activities for such product candidate or otherwise
    adversely impact the commercial potential of a product.  and/or
    Our
    key partners are responsible for providing certain proprietary
    materials that are essential components of our partnered product
    candidates, and any failure to supply these materials could
    delay the development and commercialization efforts for these
    partnered product candidates and/or damage our collaborative
    partnerships.
  and/or
 14




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If we
    have problems with third parties that either distribute API on
    our behalf or prepare, fill, finish and package our products and
    product candidates for distribution, our commercialization and
    development efforts for our products and product candidates
    could be delayed or stopped.
    We may
    wish to raise additional capital in the next twelve months and
    there can be no assurance that we will be able to obtain such
    funds.
  and/or
    If we
    are unable to sufficiently develop our sales, marketing and
    distribution capabilities or enter into successful agreements
    with third parties to perform these functions, we will not be
    able to fully commercialize our products.
   15




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If we
    or our partners fail to comply with regulatory requirements,
    regulatory agencies may take action against us or them, which
    could significantly harm our business.
        
    restrictions on our products or manufacturing processes;
    warning letters;
    withdrawal of the products from the market;
    voluntary or mandatory recall;
    fines;
    suspension or withdrawal of regulatory approvals;
    suspension or termination of any of our ongoing clinical trials;
    refusal to permit the import or export of our products;
    refusal to approve pending applications or supplements to
    approved applications that we submit;
    product seizure; or
    injunctions or the imposition of civil or criminal penalties. 16




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If
    proprietary or partnered product candidates are approved by
    regulatory bodies such as the FDA but do not gain market
    acceptance, our business may suffer and we may not be able to
    fund future operations.
    
    the price of products relative to other therapies for the same
    or similar treatments;
    the perception by patients, physicians and other members of the
    health care community of the effectiveness and safety of these
    products for their prescribed treatments;
    our ability to fund our sales and marketing efforts and the
    ability and willingness of our partners to fund sales and
    marketing efforts;
    the degree to which the use of these products is restricted by
    the approved product label;
    the effectiveness of our sales and marketing efforts and the
    effectiveness of the sales and marketing efforts of our partners;
    the introduction of generic competitors; and
    the extent to which reimbursement for our products and related
    treatments will be available from third party payors.  and/or
    Developing
    and marketing pharmaceutical products for human use involves
    product liability risks, for which we currently have limited
    insurance coverage.
    Our
    inability to attract, hire and retain key management and
    scientific personnel could negatively affect our
    business.
   17




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Our
    operations might be interrupted by the occurrence of a natural
    disaster or other catastrophic event.
    If we
    or our partners do not achieve projected development goals in
    the timeframes we publicly announce or otherwise expect, the
    commercialization of our products and the development of our
    product candidates may be delayed and, as a result, our stock
    price may decline.
    Future
    acquisitions could disrupt our business and harm our financial
    condition.
    
    we may have to issue convertible debt or equity securities to
    complete an acquisition, which would dilute our stockholders and
    could adversely affect the market price of our common stock;
    an acquisition may negatively impact our results of operations
    because it may require us to amortize or write down amounts
    related to goodwill and other intangible assets, or incur or
    assume substantial debt or liabilities, or it may cause adverse
    tax consequences, substantial depreciation or deferred
    compensation charges;
    we may encounter difficulties in assimilating and integrating
    the business, products, technologies, personnel or operations of
    companies that we acquire;
    certain acquisitions may impact our relationship with existing
    or potential partners who are competitive with the acquired
    business, products or technologies; 18




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
    acquisitions may require significant capital infusions and the
    acquired businesses, products or technologies may not generate
    sufficient value to justify acquisition costs;
    an acquisition may disrupt our ongoing business, divert
    resources, increase our expenses and distract our management;
    acquisitions may involve the entry into a geographic or business
    market in which we have little or no prior experience; and
    key personnel of an acquired company may decide not to work for
    us.    Risks
    Related To Ownership of Our Common Stock
  Our
    stock price is subject to significant volatility.
  Form 10-K
  
    a dispute regarding our failure, or the failure of one of our
    third party partners, to comply with the terms of a
    collaboration agreement;
    the termination, for any reason, of any of our collaboration
    agreements;
    the sale of common stock by any significant stockholder,
    including, but not limited to, direct or indirect sales by
    members of management or our Board of Directors;
    the resignation, or other departure, of members of management or
    our Board of Directors;
    general negative conditions in the healthcare industry;
    general negative conditions in the financial markets;
    the failure, for any reason, to obtain regulatory approval for
    any of our proprietary or partnered product candidates;
    the failure, for any reason, to secure or defend our
    intellectual property position;
    for those products that are waiting to be approved by the FDA,
    the failure of the FDA to approve such products in a timely
    manner consistent with the FDAs historical approval
    process;
    the suspension of any clinical trial due to safety or patient
    tolerability issues;
    the suspension of any clinical trial due to market
    and/or
    competitive conditions;
    our failure, or the failure of our third party partners, to
    successfully commercialize products approved by applicable
    regulatory bodies such as the FDA;
    our failure, or the failure of our third party partners, to
    generate product revenues anticipated by investors;
    problems with an API contract manufacturer or a fill and finish
    manufacturer for any product or product candidate;
    the sale of additional debt
    and/or
    equity securities by us;
    our failure to obtain financing on acceptable terms; or
    a restructuring of our operations. 19




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Future
    sales of shares of our common stock pursuant to our universal
    shelf registration statement may negatively affect our stock
    price.
    Trading
    in our stock has historically been limited, so investors may not
    be able to sell as much stock as they want to at prevailing
    market prices.
    Risks
    Related To Our Industry
  Compliance
    with the extensive government regulations to which we are
    subject is expensive and time consuming and may result in the
    delay or cancellation of product sales, introductions or
    modifications.
  and/or
  direct-to-consumer
    We may
    be required to initiate or defend against legal proceedings
    related to intellectual property rights, which may result in
    substantial expense, delay and/or cessation of the development
    and commercialization of our products.
    
    our patents and pending patent applications cover products
    and/or
    technology that we invented first;
    we were the first to file patent applications for these
    inventions;
    others will not independently develop similar or alternative
    technologies or duplicate our technologies;
    any of our pending patent applications will result in issued
    patents; and
    any of our issued patents, or patent pending applications that
    result in issued patents, will be held valid and infringed in
    the event the patents are asserted against others. 20




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Patent
    protection for protein-based therapeutic products and other
    biotechnology inventions is subject to a great deal of
    uncertainty, and if patent laws or the interpretation of patent
    laws change, our competitors may be able to develop and
    commercialize products based on our discoveries.
     21




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If
    third party reimbursement and customer contracts are not
    available, our products may not be accepted in the
    market.
        The
    rising cost of healthcare and related pharmaceutical product
    pricing has led to cost containment pressures that could cause
    us to sell our products at lower prices, resulting in less
    revenue to us.
  and/or
     22




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We
    face intense competition and rapid technological change that
    could result in the development of products by others that are
    superior to our proprietary and partnered products under
    development.
    Item 1B.
    Unresolved
    Staff Comments    Item 2.
    Properties    Item 3.
    Legal
    Proceedings    Item 4.
    Removed
    and Reserved 23




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PART II  Item 5.
    Market
    for Registrants Common Equity, Related Stockholder Matters
    and Issuer Purchases of Equity Securities  Market
    Information
    2010


2009High


Low


High


LowFirst Quarter

$
8.67


$
5.22


$
6.41


$
3.93Second Quarter

$
9.11


$
6.08


$
8.09


$
5.07Third Quarter

$
8.10


$
6.41


$
7.91


$
6.11Fourth Quarter

$
8.31


$
6.68


$
7.86


$
5.22     Securities
    Authorized for Issuance Under Equity Compensation
    Plans
    Number ofSharesNumber of





RemainingShares to be





Available forIssued upon


Weighted-Average


Future IssuanceExercise of


Exercise Price


Under EquityOutstanding


of Outstanding


CompensationOptions,


Options,


Plans (ExcludingWarrants and


Warrants and


Shares ReflectedRights


Rights


in Column (a))Plan Category

(a)


(b)


(c)Equity compensation plans approved by stockholders(1)


7,975,365


$
3.87



3,246,559Equity compensation plans not approved by stockholders










Total


7,975,365


$
3.87



3,246,559     (1)
    
    Represents stock options under the 2008 Stock Plan, 2008 Outside
    Directors Stock Plan, 2006 Stock Plan, 2005 Outside
    Directors Stock Plan, 2004 Stock Plan and the 2001 Stock
    Plan. Options under the 2001 Stock Plan were assumed by Halozyme
    as part of the March 2004 merger between DeliaTroph
    Pharmaceuticals, Inc. (DeliaTroph) and Global Yacht
    Services, Inc. The 2001 Stock Plan was approved by the
    shareholders of DeliaTroph prior to the merger and the former
    shareholders of DeliaTroph held approximately 90% of the voting
    stock of Halozyme immediately following the merger. The 2001
    Stock Plan expired in January 2011. 24




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Stock
    Performance Graph and Cumulative Total Return
  Notwithstanding any statement to the contrary in any of our
    previous or future filings with the SEC, the following
    information relating to the price performance of our common
    stock shall not be deemed to be filed with the SEC
    or to be soliciting material under the Securities
    Exchange Act of 1934, as amended, or the Exchange Act, and it
    shall not be deemed to be incorporated by reference into any of
    our filings under the Securities Act of 1933, as amended, or the
    Exchange Act, except to the extent we specifically incorporate
    it by reference into such filing.
    COMPARISON
    OF 5 YEAR CUMULATIVE TOTAL RETURN*
    
  *
    $100 invested on 12/31/05 in stock or index, including
    reinvestment of dividends.
    Fiscal year ending December 31.  12/05


12/06


12/07


12/08


12/09


12/10Halozyme Therapeutics, Inc.


$
100.00



$
442.31



$
390.66



$
307.69



$
322.53



$
435.16NASDAQ Composite


$
100.00



$
112.51



$
122.09



$
72.15



$
104.22



$
123.00NASDAQ Biotechnology


$
100.00



$
99.85



$
103.25



$
96.48



$
105.99



$
122.16  25




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Item 6.
    Selected
    Financial Data    Summary
    Financial Information
  Years Ended December 31,Statement of Operations Data:

2010


2009


2008


2007


2006Total revenues

$
13,624,115


$
13,671,305


$
8,764,139


$
3,799,521


$
981,746Net loss


(53,241,650
)


(58,360,523
)


(48,654,199
)


(23,896,183
)


(14,751,986
)Net loss per share, basic and diluted

$
(0.56
)

$
(0.67
)

$
(0.61
)

$
(0.32
)

$
(0.24
)Shares used in computing net loss per share, basic and diluted


94,357,695



86,700,094



79,843,707



74,317,930



62,610,265   As of December 31,Balance Sheet Data:

2010


2009


2008


2007


2006Cash and cash equivalents

$
83,255,848


$
67,464,506


$
63,715,906


$
97,679,085


$
44,189,403Working capital


74,155,368



60,044,794



59,794,370



92,312,937



41,343,010Total assets


91,345,333



77,149,759



76,562,713



103,460,374



46,091,320Deferred revenues


58,093,551



60,482,192



49,448,456



39,269,491



19,981,537Total liabilities


70,993,877



70,246,370



61,182,717



45,692,450



23,010,085Stockholders equity


20,351,456



6,903,389



15,379,996



57,767,924



23,081,235   Item 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operation  In addition to historical information, the following
    discussion contains forward-looking statements that are subject
    to risks and uncertainties. Actual results may differ
    substantially from those referred to herein due to a number of
    factors, including but not limited to risks described in the
    Part I, Item 1A Risks Factors and
    elsewhere in this Annual Report.
  Overview
     26




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##### Table of Contents



tm tm ® ® in vitro
    Form S-3 No. 333-164215)
  Collaborative
    Partnerships
  Roche
    Partnership
    ® ® ®
  20-25%
 27




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##### Table of Contents



Baxter
    Gammagard Partnership
    HYLENEX
    Partnership
       28




---



##### Table of Contents



Revenues
        Costs
    and Expenses
  Cost of Sales.
  Research and Development.
       29




---



##### Table of Contents



Selling, General and Administrative.
  Critical
    Accounting Policies and Estimates
    Revenue
    Recognition
  and/or
    Product
    Sales
       30




---



##### Table of Contents



Revenues
    under Collaborative Agreements
      Share-Based
    Payments
     31




---



##### Table of Contents



Research
    and Development Expenses
      time-and-material and/or
  Inventory
  first-in,
   32




---



##### Table of Contents



Results
    of Operations
  Comparison
    of Years Ended December 31, 2010 and 2009
  Product Sales
  Revenues Under Collaborative Agreements
    Cost of Sales
  Research and Development
  Selling, General and Administrative
  Share-Based Compensation
 33




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##### Table of Contents



Other Income, net
  Net Loss
  Comparison
    of Years Ended December 31, 2009 and 2008
  Product Sales
  Revenues Under Collaborative Agreements
  Cost of Sales
  Research and Development
  Selling, General and Administrative
  Share-Based Compensation
  Other Income, net
  Net Loss
 34




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##### Table of Contents



Liquidity
    and Capital Resources
    and/or
  Form S-3 No. 333-164215)
  Form S-3 No. 333-155787)
  and/or
  Operating
    Activities
      Investing
    Activities
   35




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##### Table of Contents



Financing
    Activities
      Off-Balance
    Sheet Arrangements
    Contractual
    Obligations
    Payments Due by PeriodLess than








More thanContractual Obligations:

Total


1 Year


1-3 Years


4-5 Years


5 YearsOperating leases

$
4,603,757


$
2,217,810


$
2,385,428


$
519


$
License payments


1,975,000



775,000



600,000



600,000



Purchase obligations(1)


30,703,423



28,389,966



1,636,396



533,271



143,790Total

$
37,282,180


$
31,382,776


$
4,621,824


$
1,133,790


$
143,790     (1)
    
    Purchase obligations include outstanding purchase orders for
    outsourced research and development services for our various
    preclinical and clinical programs, for the manufacturing of our
    products for clinical and commercial use and other recurring
    purchases and services made in the normal course of business.      
    the rate of progress and cost of research and development
    activities;
    the number and scope of our research activities;
    the costs of filing, prosecuting, defending and enforcing any
    patent claims and other intellectual property rights;
    our ability to establish and maintain product discovery and
    development collaborations;
    the effect of competing technological and market developments;
    the terms and timing of any collaborative, licensing and other
    arrangements that we may establish; and
    the extent to which we acquire or in-license new products,
    technologies or businesses. 36




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##### Table of Contents



Recent
    Accounting Pronouncements
  Summary of Significant Accounting
    Policies  Pending Adoption of Recent Accounting
    Pronouncements
  Item 7A.
    Quantitative
    and Qualitative Disclosures About Market Risk    Item 8.
    Financial
    Statements and Supplementary Data  page F-1.
  Item 9.
    Changes
    In and Disagreements with Accountants on Accounting and
    Financial Disclosure    Item 9A.
    Controls
    and Procedures  Evaluation
    of Disclosure Controls and Procedures
    Rule 13a-15(e) Form 10-K.
  Changes
    in Internal Control Over Financial Reporting
   37




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##### Table of Contents



Managements
    Report on Internal Control Over Financial Reporting
  Rule 13a-15(f) Rule 15d-15(f)
  
    Pertain to the maintenance of records that in reasonable detail
    accurately and fairly reflect the transactions and dispositions
    of our assets;
    Provide reasonable assurance that transactions are recorded as
    necessary to permit preparation of financial statements in
    accordance with generally accepted accounting principles, and
    that receipts and expenditures are being made only in accordance
    with authorizations of our management and directors; and
    Provide reasonable assurance regarding prevention or timely
    detection of unauthorized acquisition, use or disposition of our
    assets that could have a material effect on our financial
    statements.        Form 10-K
 38




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##### Table of Contents



Report of
    Independent Registered Public Accounting Firm
                 
    39




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##### Table of Contents



Item 9B.
    Other
    Information   PART III  Item 10.
    Directors,
    Executive Officers and Corporate Governance    Executive
    Officers
  Gregory I. Frost, Ph.D. (39),
  Kurt A. Gustafson (43),
  William J. Fallon (54),
 40




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##### Table of Contents



H. Michael Shepard, Ph.D. (61), 2003-2008), 1997-2002), 1992-1997), 1980-1992). ®
  Michael J. LaBarre, Ph. D. (47) ® ®
  Item 11.
    Executive
    Compensation    Item 12.
    Security
    Ownership of Certain Beneficial Owners and Management and
    Related Stockholder Matters   41




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##### Table of Contents



Item 13.
    Certain
    Relationships and Related Transactions, and Director
    Independence    Item 14.
    Principal
    Accounting Fees and Services   42




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##### Table of Contents



PART IV  Item 15.
    Exhibits
    and Financial Statement Schedules  (a) Documents filed as part of this report.
   PageReport of Independent Registered Public
    Accounting Firm


F-1Consolidated Balance Sheets at December 31,
    2010 and 2009


F-2Consolidated Statements of Operations for Each of
    the Years Ended December 31, 2010, 2009 and 2008


F-3Consolidated Statements of Cash Flows for Each of
    the Years Ended December 31, 2010, 2009 and 2008


F-4Consolidated Statements of Stockholders
    Equity for Each of the Years Ended December 31, 2010, 2009
    and 2008


F-5Notes to the Consolidated Financial Statements


F-6     Regulation S-K.
  (b) Exhibits:
  2
.1

Agreement and Plan of Merger, dated November 14, 2007, by
    and between the Registrant and the Registrants predecessor
    Nevada corporation(1)3
.1

Amended and Restated Certificate of Incorporation, as filed with
    the Delaware Secretary of State on October 7, 2007(2)3
.2

Certificate of Designation, Preferences and Rights of the terms
    of the Series A Preferred Stock(1)3
.3

Bylaws(2)4
.1

Amended Rights Agreement between Corporate Stock Transfer, as
    rights agent, and Registrant, dated November 12, 2007(18)10
.1

License Agreement between University of Connecticut and
    Registrant, dated November 15, 2002(3)10
.2

First Amendment to the License Agreement between University of
    Connecticut and Registrant, dated January 9, 2006(8)10
.3*

Commercial Supply Agreement with Avid Bioservices, Inc. and
    Registrant, dated February 16, 2005(6)10
.4*

First Amendment to the Commercial Supply Agreement between Avid
    Bioservices, Inc. and Registrant, dated December 15,
    2006(13)10
.5*

Clinical Supply Agreement between Cook Pharmica, LLC and
    Registrant, dated August 15, 2008(22)10
.6#

DeliaTroph Pharmaceuticals, Inc. 2001 Amended and Restated Stock
    Plan and form of Stock Option Agreements for options assumed
    thereunder(5)10
.7#

2004 Stock Plan and Form of Option Agreement thereunder(4)10
.8#

Halozyme Therapeutics, Inc. 2005 Outside Directors Stock
    Plan(7)10
.9#

Form of Stock Option Agreement (2005 Outside Directors
    Stock Plan)(11)10
.10#

Form of Restricted Stock Agreement (2005 Outside Directors
    Stock Plan)(11)10
.11#

Halozyme Therapeutics, Inc. 2006 Stock Plan(10)10
.12#

Form of Stock Option Agreement (2006 Stock Plan)(11)10
.13#

Form of Restricted Stock Agreement (2006 Stock Plan)(11)10
.14#

Halozyme Therapeutics, Inc. 2008 Stock Plan(19)10
.15#

Form of Stock Option Agreement (2008 Stock Plan)(25)10
.16#

Form of Restricted Stock Agreement (2008 Stock Plan)(25)10
.17#

Halozyme Therapeutics, Inc. 2008 Outside Directors Stock
    Plan(19)10
.18#

Form of Restricted Stock Agreement (2008 Outside Directors
    Stock Plan)(25) 43




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##### Table of Contents



10
.19#

Form of Indemnity Agreement for Directors and Executive
    Officers(17)10
.20#

Outside Director Compensation Plan(21)10
.21#

2008 Senior Executive Incentive Structure(20)10
.22#

2009 Senior Executive Incentive Plan(23)10
.23#

2010 Senior Executive Incentive Plan(26)10
.24#

Change in Control Policy(20)10
.25#

Severance Policy(21)10
.26*

Amended and Restated Exclusive Distribution Agreement between
    Baxter Healthcare Corporation, Baxter Healthcare S.A. and
    Registrant, dated February 14, 2007(14)10
.27*

Amended and Restated Development and Supply Agreement between
    Baxter Healthcare Corporation, Baxter Healthcare S.A. and
    Registrant, dated February 14, 2007(14)10
.28*

License and Collaboration Agreement between Baxter Healthcare
    Corporation, Baxter Healthcare S.A. and Registrant, dated
    February 14, 2007(14)10
.29

Termination Agreement between Halozyme Inc., Baxter Healthcare
    Corporation and Baxter Healthcare S.A, effective January 7,
    2011(28)10
.30*

Enhanze Technology License and Collaboration Agreement between
    Baxter Healthcare Corporation, Baxter Healthcare S.A. and
    Registrant, dated September 7, 2007(16)10
.31*

License and Collaboration Agreement between F.
    Hoffmann-La Roche Ltd, Hoffmann-La Roche Inc. and
    Registrant dated December 5, 2006(12)10
.32

Sublease Agreement (11404 Sorrento Valley Road), effective as of
    July 2, 2007(15)10
.33

Standard Industrial Net Lease (11388 Sorrento Valley Road),
    effective as of July 26, 2007(15)10
.34

Underwriting Agreement between Halozyme Therapeutics, Inc. and
    Jefferies & Company, Inc., dated June 23, 2009(27)10
.35

Underwriting Agreement between Halozyme Therapeutics, Inc. and
    Barclays Capital Inc., dated September 8, 2010(25)10
.36

Separation Agreement And General Release of All Claims between
    Halozyme Therapeutics, Inc. and Jonathan E. Lim21
.1

Subsidiaries of Registrant(9)23
.1

Consent of Independent Registered Public Accounting Firm31
.1

Certification of Chief Executive Officer pursuant to
    Rule 13a-14(a)
    and 15d-14(a) of the Securities Exchange Act of 1934, as amended31
.2

Certification of Chief Financial Officer pursuant to
    Rule 13a-14(a)
    and 15d-14(a) of the Securities Exchange Act of 1934, as amended32


Certification of Chief Executive Officer and Chief Financial
    Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002     (1)
    
    Incorporated by reference to the Registrants Current
    Report on
    Form 8-K,
    filed November 20, 2007.(2)
    
    Incorporated by reference to the Registrants definitive
    proxy statement filed with the SEC on Form DEF14A on
    October 11, 2007.(3)
    
    Incorporated by reference to the Registrants Registration
    Statement on
    Form SB-2
    filed with the Commission on April 23, 2004.(4)
    
    Incorporated by reference to the Registrants amendment
    number two to the Registration Statement on
    Form SB-2
    filed with the Commission on July 23, 2004.(5)
    
    Incorporated by reference to the Registrants Registration
    Statement on
    Form S-8
    filed with the Commission on October 26, 2004.(6)
    
    Incorporated by reference to the Registrants Current
    Report on
    Form 8-K,
    filed February 22, 2005.(7)
    
    Incorporated by reference to the Registrants Current
    Report on
    Form 8-K,
    filed July 6, 2005.(8)
    
    Incorporated by reference to the Registrants Current
    Report on
    Form 8-K,
    filed January 12, 2006.(9)
    
    Incorporated by reference to the Registrants Annual Report
    on
    Form 10-KSB/A,
    filed March 29, 2005. 44




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##### Table of Contents



(10)
    
    Incorporated by reference to the Registrants Current
    Report on
    Form 8-K,
    filed March 24, 2006.(11)
    
    Incorporated by reference to the Registrants Quarterly
    Report on
    Form 10-Q,
    filed August 8, 2006.(12)
    
    Incorporated by reference to the Registrants Current
    Report on
    Form 8-K/A,
    filed December 15, 2006.(13)
    
    Incorporated by reference to the Registrants Current
    Report on
    Form 8-K,
    filed December 21, 2006.(14)
    
    Incorporated by reference to the Registrants Current
    Report on
    Form 8-K/A,
    filed February 20, 2007.(15)
    
    Incorporated by reference to the Registrants Current
    Report on
    Form 8-K,
    filed July 31, 2007.(16)
    
    Incorporated by reference to the Registrants Current
    Report on
    Form 8-K,
    filed September 12, 2007.(17)
    
    Incorporated by reference to the Registrants Current
    Report on
    Form 8-K,
    filed December 20, 2007.(18)
    
    Incorporated by reference to the Registrants Annual Report
    on
    Form 10-K,
    filed March 14, 2008.(19)
    
    Incorporated by reference to the Registrants Current
    Report on
    Form 8-K,
    filed March 19, 2008.(20)
    
    Incorporated by reference to the Registrants Current
    Report on
    Form 8-K,
    filed April 21, 2008.(21)
    
    Incorporated by reference to the Registrants Quarterly
    Report on
    Form 10-Q,
    filed May 9, 2008.(22)
    
    Incorporated by reference to the Registrants Quarterly
    Report on
    Form 10-Q,
    filed November 7, 2008.(23)
    
    Incorporated by reference to the Registrants Current
    Report on
    Form 8-K,
    filed February 9, 2009.(24)
    
    Incorporated by reference to the Registrants Current
    Report on
    Form 8-K,
    filed June 23, 2009.(25)
    
    Incorporated by reference to the Registrants Quarterly
    Report on
    Form 10-Q,
    filed August 7, 2009.(26)
    
    Incorporated by reference to the Registrants Current
    Report on
    Form 8-K,
    filed February 8, 2010.(27)
    
    Incorporated by reference to the Registrants Current
    Report on
    Form 8-K,
    filed September 9, 2010.(28)
    
    Incorporated by reference to the Registrants Current
    Report on
    Form 8-K,
    January 10, 2011.*
    
    Confidential treatment has been requested for certain portions
    of this exhibit. These portions have been omitted from this
    agreement and have been filed separately with the Securities and
    Exchange Commission.#
    
    Indicates management contract or compensatory plan or
    arrangement.  (c) Financial
    Statement Schedules.  See Item 15(a)2 above.
 45




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##### Table of Contents



SIGNATURES    Halozyme Therapeutics, Inc.,
    a Delaware corporationDate: March 11, 2011

By: /s/  Gregory
    I. Frost, Ph.D.Gregory I. Frost, Ph.D.President and Chief
    Executive Officer   POWER OF
    ATTORNEY
      Signature

Title

Date/s/  Gregory
    I. Frost, Ph.D.Gregory
    I. Frost, Ph.D.

President and Chief Executive Officer (Principal Executive
    Officer), Director

March 11, 2011/s/  Kurt
    A. GustafsonKurt
    A. Gustafson

Vice President, Secretary and Chief Financial Officer (Principal
    Financial and Accounting Officer)

March 11, 2011/s/  Kenneth
    J. KelleyKenneth
    J. Kelley

Chairman of the Board of Directors

March 11, 2011/s/  Robert
    L. Engler, M.D.Robert
    L. Engler, M.D.

Director

March 11, 2011/s/  Kathryn
    E. FalbergKathryn
    E. Falberg

Director

March 11, 2011/s/  Randal
    J. KirkRandal
    J. Kirk

Director

March 11, 2011/s/  Connie
    L. MatsuiConnie
    L. Matsui

Director

March 11, 2011/s/  John
    S. Patton, Ph.D.John
    S. Patton, Ph.D.

Director

March 11, 2011  46




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##### Table of Contents



Report of
    Independent Registered Public Accounting Firm             
    F-1




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##### Table of Contents



HALOZYME
    THERAPEUTICS, INC.
   CONSOLIDATED
    BALANCE SHEETS  December 31,


December 31,2010


2009ASSETSCurrent assets:Cash and cash equivalents

$
83,255,848


$
67,464,506Accounts receivable


2,328,268



4,243,909Inventory


193,422



1,159,551Prepaid expenses and other assets


3,720,896



1,573,777Total current assets


89,498,434



74,441,743Property and equipment, net


1,846,899



2,708,016Total Assets

$
91,345,333


$
77,149,759LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable

$
3,820,368


$
2,820,491Accrued expenses


8,605,569



6,083,854Deferred revenue


2,917,129



5,492,604Total current liabilities


15,343,066



14,396,949Deferred revenue, net of current portion


55,176,422



54,989,588Deferred rent, net of current portion


474,389



859,833Commitments and contingencies (Note 11)Stockholders equity:Preferred stock  $0.001 par value;
    20,000,000 shares authorized; no shares issued and
    outstanding






Common stock  $0.001 par value;
    150,000,000 shares authorized; 100,580,849 and
    91,681,756 shares issued and outstanding at
    December 31, 2010 and 2009, respectively


100,581



91,682Additional paid-in capital


245,502,670



178,821,852Accumulated deficit


(225,251,795
)


(172,010,145
)Total stockholders equity


20,351,456



6,903,389Total Liabilities and Stockholders Equity

$
91,345,333


$
77,149,759    F-2




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##### Table of Contents



HALOZYME
    THERAPEUTICS, INC.
   CONSOLIDATED
    STATEMENTS OF OPERATIONS  Years Ended December 31,2010


2009


2008REVENUES:Product sales

$
895,518


$
970,847


$
711,937Revenues under collaborative agreements


12,728,597



12,700,458



8,052,202Total revenues


13,624,115



13,671,305



8,764,139OPERATING EXPENSES:Cost of product sales


985,283



311,891



332,324Research and development


51,773,504



56,614,266



44,232,936Selling, general and administrative


15,122,960



15,203,408



14,633,581Total operating expenses


67,881,747



72,129,565



59,198,841OPERATING LOSS


(54,257,632
)


(58,458,260
)


(50,434,702
)OTHER INCOME (EXPENSE):Other income (expense)


966,967



(3,010
)


(3,024
)Interest income, net


49,015



100,747



1,720,527Total other income, net


1,015,982



97,737



1,717,503NET LOSS BEFORE INCOME TAXES


(53,241,650
)


(58,360,523
)


(48,717,199
)Income tax benefit










(63,000
)NET LOSS

$
(53,241,650
)

$
(58,360,523
)

$
(48,654,199
)Basic and diluted net loss per share

$
(0.56
)

$
(0.67
)

$
(0.61
)Shares used in computing basic and diluted net loss per share


94,357,695



86,700,094



79,843,707    F-3




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##### Table of Contents



HALOZYME
    THERAPEUTICS, INC.
   CONSOLIDATED
    STATEMENTS OF CASH FLOWS  Years Ended December 31,2010


2009


2008OPERATING ACTIVITIES:Net loss

$
(53,241,650
)

$
(58,360,523
)

$
(48,654,199
)Adjustments to reconcile net loss to net cash used in operating
    activities:Share-based compensation


4,866,325



4,526,030



3,695,842Depreciation and amortization


1,507,925



1,443,738



1,047,878Loss on disposal of equipment


13,542



2,685



4,729Changes in operating assets and liabilities:Accounts receivable


1,915,641



3,020,501



(6,484,585
)Inventory


966,129



(718,228
)


262,145Prepaid expenses and other assets


(2,147,119
)


1,017,372



(576,469
)Accounts payable and accrued expenses


3,437,089



(2,000,233
)


4,788,346Deferred rent


(314,747
)


(113,343
)


363,484Deferred revenue


(2,388,641
)


11,033,736



10,178,965Net cash used in operating activities


(45,385,506
)


(40,148,265
)


(35,373,864
)INVESTING ACTIVITIES:Purchases of property and equipment


(646,544
)


(1,461,021
)


(1,159,744
)Net cash used in investing activities


(646,544
)


(1,461,021
)


(1,159,744
)FINANCING ACTIVITIES:Proceeds from issuance of common stock, net


59,965,059



38,174,371



Proceeds from exercise of stock options, net


1,858,333



1,018,357



843,716Proceeds from exercise of warrants, net






6,165,158



1,726,713Net cash provided by financing activities


61,823,392



45,357,886



2,570,429Net increase (decrease) in cash and cash equivalents


15,791,342



3,748,600



(33,963,179
)Cash and cash equivalents at beginning of period


67,464,506



63,715,906



97,679,085Cash and cash equivalents at end of period

$
83,255,848


$
67,464,506


$
63,715,906Supplemental disclosure of non-cash investing and financing
    activities:Accounts payable for purchases of property and equipment

$
13,806


$
143,493


$
159,472    F-4




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##### Table of Contents



HALOZYME
    THERAPEUTICS, INC.
   CONSOLIDATED
    STATEMENTS OF STOCKHOLDERS EQUITYYears Ended December 31, 2010, 2009 and
    2008  Additional





TotalCommon Stock


Paid-In


Accumulated


StockholdersShares


Amount


Capital


Deficit


EquityBALANCE AT JANUARY 1, 2008


77,903,944


$
77,904


$
122,685,443


$
(64,995,423
)

$
57,767,924Share-based compensation expense










3,695,842







3,695,842Issuance of common stock pursuant to exercise of warrants, net


1,628,374



1,628



1,725,085







1,726,713Issuance of common stock pursuant to exercise of stock options


1,828,836



1,829



841,887







843,716Issuance of restricted stock awards


192,500



193



(193
)






Net loss














(48,654,199
)


(48,654,199
)BALANCE AT DECEMBER 31, 2008


81,553,654



81,554



128,948,064



(113,649,622
)


15,379,996Share-based compensation expense










4,526,030







4,526,030Issuance of common stock for cash, net


6,150,000



6,150



38,168,221







38,174,371Issuance of common stock pursuant to exercise of warrants, net


3,140,780



3,141



6,162,017







6,165,158Issuance of common stock pursuant to exercise of stock options


717,322



717



1,017,447







1,018,164Issuance of restricted stock awards


120,000



120



73







193Net loss














(58,360,523
)


(58,360,523
)BALANCE AT DECEMBER 31, 2009


91,681,756



91,682



178,821,852



(172,010,145
)


6,903,389Share-based compensation expense










4,866,325







4,866,325Issuance of common stock for cash, net


8,300,000



8,300



59,956,759







59,965,059Issuance of common stock pursuant to exercise of stock options


479,093



479



1,857,734







1,858,213Issuance of restricted stock awards


120,000



120











120Net loss














(53,241,650
)


(53,241,650
)BALANCE AT DECEMBER 31, 2010


100,580,849


$
100,581


$
245,502,670


$
(225,251,795
)

$
20,351,456    F-5




---



##### Table of Contents



Halozyme
    Therapeutics, Inc.
  Notes
    to Consolidated Financial Statements
  1.
    Organization
    and Business    tm tm ® ® in vitro
  2.
    Summary
    of Significant Accounting Policies  Basis
    of Presentation
    Use of
    Estimates
    Cash
    and Cash Equivalents
    Concentrations
     F-6




---



##### Table of Contents



Halozyme
    Therapeutics, Inc.
  Notes to
    Consolidated Financial Statements 
    (Continued)
      Accounts
    Receivable
    Inventory
  first-in,
    Property
    and Equipment
    Impairment
    of Long-Lived Assets
    Fair
    Value of Financial Instruments
  Fair Value Measurements
  Fair
    Value Measurements
   F-7




---



##### Table of Contents



Halozyme
    Therapeutics, Inc.
  Notes to
    Consolidated Financial Statements 
    (Continued)
    Level 1

Quoted prices (unadjusted) in active markets for identical
    assets or liabilities;Level 2

Inputs other than quoted prices included within Level 1 that are
    either directly or indirectly observable; andLevel 3

Unobservable inputs in which little or no market activity
    exists, therefore requiring an entity to develop its own
    assumptions about the assumptions that market participants would
    use in pricing.
     Deferred
    Rent
    Comprehensive
    Income/Loss
    Revenue
    Recognition
  and/or
    Product Sales 
   F-8




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##### Table of Contents



Halozyme
    Therapeutics, Inc.
  Notes to
    Consolidated Financial Statements 
    (Continued)
  Collaborative Agreements 
  Cost
    of Sales
    Research
    and Development Expenses
        Clinical
    Trial Expenses
  and/or
 F-9




---



##### Table of Contents



Halozyme
    Therapeutics, Inc.
  Notes to
    Consolidated Financial Statements 
    (Continued)
  Restructuring
    Expense
    Share-Based
    Payments
    Years Ended December 31,2010


2009


2008Research and development

$
2,517,172


$
2,441,907


$
1,541,003Selling, general and administrative


2,349,153



2,084,123



2,154,839Share-based compensation expense

$
4,866,325


$
4,526,030


$
3,695,842Net share-based compensation expense, per basic and diluted share

$
0.05


$
0.05


$
0.05Share-based compensation expense from:Stock options

$
4,022,790


$
3,648,174


$
2,691,571Restricted stock awards


843,535



877,856



1,004,271$
4,866,325


$
4,526,030


$
3,695,842      F-10




---



##### Table of Contents



Halozyme
    Therapeutics, Inc.
  Notes to
    Consolidated Financial Statements 
    (Continued)
  Income
    Taxes
    Other
    Income
    Net
    Loss Per Share
    2010


2009


2008Stock options and awards


8,095,365



7,924,266



7,447,285Warrants










3,230,6568,095,365



7,924,266



10,677,941   Segment
    Information
    Pending
    Adoption of Recent Accounting Pronouncement
  No. 2010-17, Milestone Method of Revenue
    Recognition No. 2010-17 states No. 2010-17
 F-11




---



##### Table of Contents



Halozyme
    Therapeutics, Inc.
  Notes to
    Consolidated Financial Statements 
    (Continued)
  No. 2010-17
  No. 2009-13, Multiple-Deliverable Revenue
    Arrangements No. 2009-13 No. 2009-13 605-25. No. 2009-13 No. 2009-13
  3.
    Property
    and Equipment    December 31,


December 31,2010


2009Research equipment

$
4,308,654


$
3,838,307Computer and office equipment


1,215,894



1,333,924Leasehold improvements


998,368



981,1406,522,916



6,153,371Accumulated depreciation and amortization


(4,676,017
)


(3,445,355
)$
1,846,899


$
2,708,016     4.
    Accrued
    Expenses    December 31,


December 31,2010


2009Accrued outsourced research and development expenses

$
3,647,762


$
2,609,819Accrued compensation and payroll taxes


3,045,950



2,945,498Accrued expenses


1,911,857



528,537$
8,605,569


$
6,083,854   5.
    Deferred
    Revenue    December 31,


December 31,2010


2009Collaborative agreements

$
48,761,361


$
50,390,400Product sales


9,332,190



10,091,792Total deferred revenue


58,093,551



60,482,192Less current portion


2,917,129



5,492,604Deferred revenue, net of current portion

$
55,176,422


$
54,989,588  F-12




---



##### Table of Contents



Halozyme
    Therapeutics, Inc.
  Notes to
    Consolidated Financial Statements 
    (Continued)
  Roche Partnership
    Baxter Partnerships
       F-13




---



##### Table of Contents



Halozyme
    Therapeutics, Inc.
  Notes to
    Consolidated Financial Statements 
    (Continued)
    6.
    Stockholders
    Equity  Issuance of Common Stock
          7.
    Equity
    Incentive Plans      Stock Options.
 F-14




---



##### Table of Contents



Halozyme
    Therapeutics, Inc.
  Notes to
    Consolidated Financial Statements 
    (Continued)
    Shares


Weighted


Weighted


AggregateUnderlying


Average Exercise


Average Remaining


IntrinsicStock Options


Price per Share


Contractual Term (yrs)


ValueOutstanding at January 1, 2008


7,809,979


$
2.03Granted


1,513,650


$
5.76Exercised


(1,857,478
)

$
0.55Cancelled/forfeited


(211,366
)

$
7.60Outstanding at December 31, 2008


7,254,785


$
3.02Granted


1,519,405


$
6.41Exercised


(717,322
)

$
1.42Cancelled/forfeited


(252,602
)

$
6.11Outstanding at December 31, 2009


7,804,266


$
3.73Granted


1,332,714


$
5.94Exercised


(479,093
)

$
3.88Cancelled/forfeited


(682,522
)

$
6.29Outstanding at December 31, 2010


7,975,365


$
3.87



4.4


$
32.7 millionVested and expected to vest atDecember 31, 2010


7,730,469


$
3.80



4.3


$
32.3 millionExercisable at December 31, 2010


5,824,507


$
3.05



3.3


$
28.7 million       Years Ended December 31,2010

2009

2008Expected volatility


65.8-70.8
%


65.0
%


65.0
%Average expected term (in years)


5.7



5.5



5.5Risk-free interest rate


1.39-2.80
%


1.65-2.73
%


1.26-3.14
%Expected dividend yield


0
%


0
%


0
%  F-15




---



##### Table of Contents



Halozyme
    Therapeutics, Inc.
  Notes to
    Consolidated Financial Statements 
    (Continued)
  Restricted stock awards.
      Weighted AverageNumber of


Grant DateShares


Fair ValueUnvested at January 1, 2008


105,000


$
10.37Granted


192,500


$
4.94Vested


(105,000
)

$
10.37Forfeited





$
Unvested at December 31, 2008


192,500


$
4.94Granted


120,000


$
5.81Vested


(192,500
)

$
4.94Forfeited





$
Unvested at December 31, 2009


120,000


$
5.81Granted


120,000


$
7.67Vested


(120,000
)

$
5.81Forfeited





$
Unvested at December 31, 2010


120,000


$
7.67     8.
    Commitments
    and Contingencies  Operating Leases
   F-16




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##### Table of Contents



Halozyme
    Therapeutics, Inc.
  Notes to
    Consolidated Financial Statements 
    (Continued)
      sub-sublease Sub-Sublease) Sub-Sublease
        OperatingYear:

Leases2011

$
1,926,0002012


1,999,0002013


83,0002014


1,000Total minimum lease payments

$
4,009,000   Material Agreements
 F-17




---



##### Table of Contents



Halozyme
    Therapeutics, Inc.
  Notes to
    Consolidated Financial Statements 
    (Continued)
       F-18




---



##### Table of Contents



Halozyme
    Therapeutics, Inc.
  Notes to
    Consolidated Financial Statements 
    (Continued)
            Legal Contingencies
  9.
    Income
    Taxes    2010


2009Deferred tax assets:Net operating loss carryforwards

$
57,035,000


$
42,253,000Deferred revenue


22,248,000



18,370,000Research and development credits


15,540,000



12,175,000Share-based compensation


1,449,000



1,171,000Depreciation


533,000



327,000Other, net


749,000



789,000Total deferred tax assets


97,554,000



75,085,000Valuation allowance for deferred tax assets


(97,554,000
)


(75,085,000
)Net deferred tax assets

$



$
  F-19




---



##### Table of Contents



Halozyme
    Therapeutics, Inc.
  Notes to
    Consolidated Financial Statements 
    (Continued)
    2010


2009


2008Federal income tax rate of 34%

$
(18,102,000
)

$
(19,843,000
)

$
(16,544,000
)State income tax, net of federal benefit


(3,106,000
)


(3,405,000
)


(2,839,000
)Research and development credits


(3,379,000
)


(4,464,000
)


(3,099,000
)Tax effect on non-deductible expenses and other


2,118,000



2,186,000



2,445,000Increase in valuation allowance


22,469,000



25,526,000



20,037,000Benefit due to refundable R&D credit










(63,000
)$



$



$
(63,000
)         and/or
    10.
    Employee
    Savings Plan    11.
    Restructuring
    Expense   F-20




---



##### Table of Contents



Halozyme
    Therapeutics, Inc.
  Notes to
    Consolidated Financial Statements 
    (Continued)
      EmployeeSeveranceand BenefitsBalance, January 1, 2010

$
Accruals during the year


1,321,579Cash payments


(1,204,902
)Balance, December 31, 2010

$
116,677   12.
    Management
    Changes      13.
    Related
    Party Transactions     F-21




---



##### Table of Contents



Halozyme
    Therapeutics, Inc.
  Notes to
    Consolidated Financial Statements 
    (Continued)
    14.
    Summary
    of Unaudited Quarterly Financial Information  Form 10-Q:
  Quarters Ended2010 (Unaudited):

March 31,

June 30,

September 30,

December 31,Total revenues

$
3,441,731


$
3,213,353


$
3,396,507


$
3,572,524Total operating expenses

$
15,229,877


$
15,365,431


$
15,830,148


$
21,456,291Net loss

$
(11,787,477
)

$
(12,150,923
)

$
(12,409,576
)

$
(16,893,674
)Net loss per share, basic and diluted

$
(0.13
)

$
(0.13
)

$
(0.13
)

$
(0.17
)Shares used in computing net loss per share, basic and diluted


91,610,830



91,766,799



93,626,893



100,337,075   Quarters Ended2009 (Unaudited):

March 31,

June 30,

September 30,

December 31,Total revenues

$
2,772,371


$
1,426,156


$
3,028,885


$
6,443,893Total operating expenses

$
17,531,113


$
18,509,876


$
16,968,485


$
19,120,091Net loss

$
(14,725,364
)

$
(17,060,025
)

$
(13,910,282
)

$
(12,664,852
)Net loss per share, basic and diluted

$
(0.18
)

$
(0.21
)

$
(0.16
)

$
(0.14
)Shares used in computing net loss per share, basic and diluted


82,429,868



82,990,107



89,570,540



91,488,388  F-22