Halozyme Therapeutics Inc. won FDA approval for its drug-enhancement agent, Hylenex, a recombinant human hyaluronidase meant to improve the delivery of local anesthesia and other drugs, and for subcutaneous fluid replacement.

"This is very exciting for us," said Jonathan Lim, chairman and CEO of the San Diego-based company, which has had "two FDA approvals in one year."

In April, the agency gave the nod for Halozyme's first product, Cumulase, a recombinant human hyaluronidase for the treatment of oocytes to facilitate certain in vitro fertilization procedures. Cumulase was approved under the FDA's medical device guidelines and launched in June.

Hylenex is expected to hit the U.S. market during the first half of 2006 through the channels of Halozyme's partner, Deerfield, Ill.-based Baxter Healthcare Corp., which holds an exclusive license for distribution, marketing and sales. The companies have a 50/50 profit-sharing arrangement.

Lim said the partners also are developing a plan for regulatory filing in the European Union.

The enzyme hyaluronidase breaks down hyaluronic acid in connective tissue to increase tissue permeability. As the first approved synthetic hyaluronidase, Hylenex is intended to provide a safer and "much more pure" alternative for patients previously given a now-discontinued bovine-derived hyaluronidase, Lim said. He referred to Wydase, which was used for more than 50 years before being discontinued by its maker, Madison, N.J.-based Wyeth, in 2001 due to manufacturing issues.

Hylenex will be sold in two primary markets: for use as an adjunct to increase absorption in ophthalmic indications, and for use in hypodermoclysis, described as the subcutaneous injection of saline or other solutions.

In ophthalmology, the product would be "mixed with a local anesthetic, such as lidocaine and bupivacaine, and injected into the patient prior to cataract surgery," Lim told BioWorld Today. "It would both anesthetize and immobilize the eye."

For hypodermoclysis, the use of Hylenex would allow physicians and caregivers to give subcutaneous infusions of saline or other drugs, rather than relying on intravenous injection. The U.S. market for Hylenex is estimated at $50 million in ophthalmology and between $200 million and $300 million in hypodermoclysis, Lim said.

Halozyme's development pipeline includes a Phase I product, Chemophase, a recombinant therapeutic designed to enhance the delivery of chemotherapy that's being tested as a single intravesical administration in combination with mitomycin in patients with superficial bladder cancer. Lim said that trial is proceeding as planned, and a dose-escalation study is expected to begin in the first half of next year.

The company also plans to seek licensing partners for its Enhanze technology, designed to deliver drugs rapidly by temporarily degrading hyaluronic acid.

Halozyme reported a net loss of $3.7 million, or 7 cents per share, for the third quarter. As of Sept. 30, the company had cash and cash equivalents of $6.6 million.

Shares of Halozyme (AMEX:HTI) closed at $2.05 Monday, up 28 cents.