Halozyme Therapeutics Inc (HALO)

[Fred Kadiddlehopper]

FOTD's WAGs Preserved for the record.
Snagged this from another board but worth putting up in lights for fun, profit and future reference.
Copyright, bragging rights or otherwise, Friendofthedevil 10.5.2015

You want my WAG HALO analysis? Here goes:

I don't think we ever get to produce any bulk sales before we are bought out. I think we sell HALO lock, stock and barrel as soon as we get PEG approval.

I think we get some very encouraging OS numbers on stage1 of 202 in January. I would estimate Ph2 202 completed EOY 2016 with good OS numbers. We might get a look at PFS earlier in the year - possibly Q1'16.

I'll guess the Ph3 starts 1H'16 and has good PFS numbers 2H'18 - good enough for FDA approval by EOY.

By 1H'19 we also have a completed Ph2 SWOG study, some Ph2 data on a couple of lung cancer trials, probably some good gastric data, and any number of new trials started with new compounds by companies excited by PEG's prospects. HALO is also well in the black by then because Hyqvia and Enhanze have grown to 200 million in annual revenues and trial costs of PEG are helped enormously (ie: reduced) by companies who want to trial their own drugs with it.

Big pharma then competes to buy this newly approved PEG that will clearly ramp sales over the next decade in one indication after another. HALO plays hard to get since it doesn't need cash and could keep the golden goose for itself. Ultimately, though, it caves to the pressures of impatient shareholders who want to monetize now and to the temptation of cushy positions with enormous salaries at the new company. The deal, north of 10 billion (a number with some history for our CEO), gets done in 1H'20.

Discount 20% per year and the company should be worth about $4 billion now - or $30 per share. The buyout price in 2020 would then be 80. If they diluted with large option and share grants just before sale, let's say $75.

Fezz will say we get approval sooner based upon outstanding early results and breakthrough status granted, perhaps, a year earlier. Maybe. But this is how I think about HALO. And that discount rate is fair because the MOA and early preclinical and clinical studies are so consistent.