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Overall Perjeta sales were up 22% in Q1 but interestingly in the US they were down 1%. I didn’t listen to the call - was that point addressed?
Do you guys never listen. Roche have frequently told us that doctors and hospitals in the US have continually refused to use SC Herceptin and Rituxan. IV versions make them more money. With they be any more obliging with SC Herceptin/Perjeta and Darzalex remains to be seen. History tells us to beware. Who cares about patients eh! From Roche and J&J’s viewpoint they make money both ways - clearly Roche didn’t want to rock the boat on SC Herceptin and Rituxan in the US. Baxter have never pushed SC Gammagard anywhere in world. Halozyme cannot influence events. What they can’t do however is deal with rival products now they’re signed up with Roche, J&J, Baxter etc. That’s a weak position to be in if your borrowing £400m to be buying in stock - a loan that has to be repaid in 2024.
What a time to be spending $400m of borrowed money on share buy-backs eh.
What slide number is that?
What did she say about royalties halving after patent expiry dates? Did she explain what she means by co-formulations?
What did she say about royalties halving after patent expiry dates? Did she explain what she means by co-formulations?
“In the U.S., the issued patent would expire in March 5, 2024, but the term will be extended until September 23, 2027 with the addition of patent term adjustment time of 1,297 days. A broad European counterpart, EP1603541, has also been granted to Halozyme that will provide protection until March 5, 2024. To date, similar claims have been granted in India, Japan, Eurasia, Hong Kong, Mexico, New Zealand, Singapore and South Africa.”
Royalties halve from Sept 2027 in the US and from March 2024 in the rest of the world except on co-formulations. I don’t think that SC Darzalex or SC Herceptin/Perjeta are considered co-formulations so you need to adjust your figures downwards accordingly.
HALO haven’t been truthful with shareholders (until after the PEG disaster) about the halving of royalty rates after the Enhanze patents expire in just a few years time. It’s clear that big pharma is well aware that the longer they delay the cheaper the royalties payable to HALO will be (other than on co-formulations). I thought it was just Baxter and then Roche (in the US) who were taking advantage of the situation but I think that they’re all at it. I think HALO’s future lies in the hands of big pharma, who in fact only have their own best interests at heart - not HALO’s. I am hugely disillusioned by HALO being so economical with the truth for so long. In my opinion nobody is going to be buying HALO at anything like the current inflated price. It’s all very clever to borrow huge amounts of money to buy-back your own shares - but in reality to was just a smart device to enable RJK to exit quickly. I’ve done the same.
Nobody would buyout HALO before SC Darzalex and Perjeta/Herceptin are approved.
In theory you’re right about HALOising generic IV drugs. However if those drugs are in competition with any of the drugs that they’re already partnered with then they would be precluded from doing so. Gammagard is a perfect example. It’s off patent so HALO could have made their own SC version but decided instead to do the deal with Baxter. They get HyQ approved and then Baxter decides not to actively promote it and probably won’t until the 2027 patent expires. Did Baxter do this on purpose to stop HALO being their competitor? Almost certainly and of course I’ve been saying precisely that for years. How many of the other partners are playing the same game? ViroPharma almost certainly did it with Cinryse - another drug that is now off patent.
It’s convertible into equity. If it was convertible at say $16 and they buy back shares at a higher price then that would make no sense. The hedge funds buying the notes would simply convert them into equity and sell at a profit. Doesn’t make sense to me.
Helen was more forthcoming on the drop in royalty rates after 2024 in Europe and after 2027 in the US. They halve. The dates relate to the expiry of patents. The royalties are payable for 10 years and maybe longer in co-formulated products but the rates are reduced on the dates above. So they need to get a move on.
Wow. What did you make of all that. Unconvincing in the extreme like me? A lot of stuttering Scottish talk from Helen. It’ll be interesting to see what the conversion price of the convertible stock is. Pretty low I would hazard a guess. Borrowing $400m and then immediately using half to buy back stock. Why? What’s the point? It seems to me like they’ve completely lost the plot.
I don’t agree with your math!
Hundreds of millions down the tubes. All the warning signs were there after highly confusing Phase 2 PEG data. RJK seemed to know but Helen didn’t. Amazing she’s still there.
Why as the Enhanze royalty rates will be cut dramatically between 2027 and 2030 after the Enhanze patents expire. The patents actually expire in 2024 but there’s a 3 year period before anyone else can launch a competitive product. Big Pharma have picked up on the patent expiry position hence the big drop in the royalty rate. This was partially explained in the Q&A - and Helen was clearly feeling very uncomfortable as this had never been explained before.
Patent expires in 2027. After that (or in 2030 in some undisclosed cases) the royalties drop to much smaller amounts than mid single digits. If peak sales aren’t until 2027 that doesn’t leave much time to cash in. If only they hadn’t taken so long to develop the business opportunities beyond Roche and that waste of space Baxter. I can’t see them being worth much more than the current share price.
She also said that royalty rates don’t stay at mid single digits forever. They drop after a set period but wouldn’t get drawn into what that period for each of the drugs. However she did say that on those drugs the percentage would drop by 2030. That’s not good news if royalties peak in 2027 and then drop by 2030 unless new drugs come along, which of course they may.
Other than the hundreds of millions of new shareholder monies and new borrowings and Enhanze upfronts that we’ve blown on failed cancer, cellulite, insulin etc products. If we’d stuck with Enhanze the share price would be over $100 by now. With all the dilution we’re never going to see that level now.
Good call by Kirky to sell out when he did.
I must say I thought that HALO was already using the new marker to test for HA levels in the 301 trial. I was obviously wrong. So potentially we could get HALO (or even more likely the FDA) saying that the final data is flawed because the HA levels collected by biopsy weren’t necessarily accurate. How ridiculous would that be after waiting years and spending hundreds of millions on these PEGPH20 trials. Maybe the FDA has already said that to HALO hence the new trial. Presumably since the marker was developed HALO has been using it to test the HA levels on still surviving 301 patients to confirm the HA levels determined by the biopsies. It appears that their findings are worrying.
So as if the 201 results weren’t confusing enough we now have the potential of the 301 results being even more confusing. And it looks like the market may already have grasped this problem.
Great news in theory but will the profit conscious US doctors and hospitals be promoting it or will they prefer to stick with the IV versions and charge the poor patients for inconveniencing them unnecessarily for an extra hour or two. And nobody kicks up a fuss. HALO will never get to $1b in royalties by 2028 unless someone stands up and says patients first.
Of course the doctors and hospitals are the problem. They make very little money from the SC version compared to the IV version. We know from disappointing US sales of SC Rituxan that doctors are ‘comfortable’ with the IV version and are refusing to switch patients to the SC version like they do in the EU. That’s a disgrace but Roche don’t seem to be that bothered. They win either way - it’s only the patients who suffer unnecessarily. JNJ don’t seem to have considered this potential problem.
Pound to a penny that Kirky is selling again now. Nothing declared but you can tell by price movements. So does he need the money or does he know something bad? Any thoughts?
Kirk selling again.
His total holdings are now just 7.2% of the company - down from over 20% in 2014. When he resigned as Chairman he said he had no intention of selling his shares. Times have changed.
Not the SC version by the look of it. Those pesky US doctors and hospitals prefer the IV version as it makes them more money. To hell with the kids having to endure a completely unnecessary long IV procedure when a quick less painful SC alternative is approved and readily available. Somebody should do something about this travesty. Halo’s future rests on US doctors accepting that SC is best for patients and that takes priority over their own profits. So far the US uptake is lagging way behind Europe.
Maybe SQ Enbrel might be worth looking into in a hurry!
https://www.washingtonpost.com/business/economy/pfizer-had-clues-its-blockbuster-drug-could-prevent-alzheimers-why-didnt-it-tell-the-world/2019/06/04/9092e08a-7a61-11e9-8bb7-0fc796cf2ec0_story.html?noredirect=on&utm_term=.b5daafed0e73&wpisrc=al_news__alert-exclusive--alert-national&wpmk=1
I was just looking back and HALO was $10.64 twelve years ago and $17.03 five and a half years ago and $24.66 four years ago. Basically it’s been a hugely disappointing investment for a long time. Not without reason of course. Two FDA Enhanze rejections for titers, Enhanze royalties way less than anticipated, US doctors not committed to switching from IV to SC and indifferent PEGPH20 data. Crunch time is fast approaching. Which way will it go?
“Physicians are very comfortable with the IV formulation”.
Of course who’s to say that those wretched US doctors and hospitals, that put their own finances ahead of patients’ comfort and convenience, won’t play the very same sorry game when HALO’s other partners eventually launch their own SQ versions of their leading IV drugs. It appears that Roche is not prepared to take on these doctors and hospitals in fear of their other drugs being ostrasized. Someone in authority should take the lead here. Bribery and corruption is a serious crime and when you get a world leading Pharma caving in to it something needs to be done. At the present time HALO’s claim of having over $1b in annual royalties by 2027 looks ridiculously optimistic.
US doctors should be strung up!
Doctors in the US should be prosecuted for patient abuse. 67% conversion rate in the EU for SC Rituxan but now expectations in the US are being lowered because doctors are ‘very comfortable with IV Rituxan’. I bet they are - very comfortable financially - they make more money using it and that’s what it’s all about right? To hell with benefits for the patients. I’ve heard that doctors and hospitals have threatened Roche that they won’t use their drugs if they sell SC versions of their drugs.
“Laurie D. Stelzer -- Senior Vice President & Chief Financial Officer
Yes, it's -- I mean for the US, our understanding is that they are having some reduced expectations in the US, and it's really around a couple of factors. The first is, physicians are very comfortable with the IV formulation. And I think the second is, there are some centers that have had some (inaudible) they are perhaps, waiting for biosimilars to enter the market in the second half of the year. And so, that's one of the factors for bringing down the forecast for this year.”
Very interesting and revealing post Maumar. So all the theories about Roche not seeking FDA approval of SQ Herceptin because the patents were expiring later in the US than in the EU were incorrect. In reality Roche had been told by the FDA that they were unlikely to approve SQ Herceptin presumably because of titer concerns. I guess they have changed their tone because of the success of SQ Herceptin in the EU without seemingly any side effects.
I hope the FDA aren’t going to take a similar hard line on the new Enhanze SQ candidates or HALO is in big trouble.
So basically what she’s saying is that the PFS numbers will yet again be messy - just as they were from the Phase 2 trial. You’d have thought that they would have learned how to address this problem after the Phase 2 fiasco but apparently not.
The thing that’s difficult to grasp is that she seems to be saying that it’s the control arm that’s producing longer than expected PFS numbers caused by patients coming off PEG and going onto new treatments. If that’s correct surely that’s really bad for PEG - coming off it and going onto different drugs and subsequently coming up with higher than expected PFS numbers is surely bad for PEG. You’d logically think that if those control arm patients were followed through to death then their OS numbers would be higher than PEG. But I suspect that those patients’ OS data will be eliminated from the control arms’ OS numbers so as to make the PEG numbers look better. I can see the FDA issuing a CRL and demanding yet another trial as basically it’s all HALO’s fault for their very sloppy Phase 3 trial design. Helen could find herself out of a job for this mess.
Interesting that HALO started to talk to the FDA about switching the primary outcome in August - just before RJ Kirk started selling his shares.
Well what to make of all this eh! To tell us a few weeks ago that the PFS data would be ready in Q1 and now PFS is being dropped in favour of OS with results due in H2 - wow. So is this because PFS results maybe aren’t up to expectations. They’re blinded right? Well actually they’re not fully blinded because of the high level of AEs in PEG patients. HALO were pretty non committal on this meaning almost certainly that results aren’t as good as expected. But they did tell us that the PFS part of the trial was not halted for futility so they weren’t disastrous. But in my view there was no reason to make the switch as the FDA had said the OS trend would be sufficient to allow approval based on good PFS numbers. Now we are relying on OS. What a mess. And then there was the question about what treatments patients were on when the PFS period was up. This was up to the doctors and HALO has no influence on this. So that’s going to be a big factor in determining whether it’s PEG or the final treatment that is improving OS. So if PFS levels are disappointing but OR is good why would HALO be allowed to claim that that improvement is down to PEG when it could just as easily be down to different treatments after PFS is over. I can see this being a nightmare to get approval on. Contrary to what HALO are saying it is going to be way harder to get approval on OS than PFS when final treatments are all different.
I didn’t like the way HALO handled the call. Confusing everyone with complicated statistical stuff was just there to muddy the waters. You could tell that most of the analysts had absolutely no idea what HALO were talking about. That’s what HALO wanted.
Well the way they’re spending money like water on all the PEGPH20 trials at the moment means they need a couple of new deals every year just to stave off more secondaries. If the 201 trial is a failure they should really rethink their whole PEG strategy. Enough is enough. The stock price could have been $100 by now if we hadn’t diluted endlessly on PEG for so far no reward whatsoever. HALO has been one of the worst performing big biotechs over the past decade because of their obsession to spend, spend, spend on PEG, Insulin, Hylenex, Cellulite etc. Hundreds of millions have been spent on these - if PEG fails on 201 let’s go back to basics on Enhanze and at least cut out these endless losses.
So why were the PEG/GEM/AB PFS figures announced at ESMO 2018 way lower than in the 201 trial? The market clearly thinks this is a sign that the 301 trial results will be poor too. If they can’t beat 8.5 months then they might as well shelve it for PC. Maybe the addition of new patients is in the hope that the OS figures are better than anticipated and the only way of coming up with the OS results at the same time as announcing the PFS results is to increase the trial size and buy more time.
Saw this on Shire, which is relevant to HyQ. Remember they said that HyQ sales would ramp up once the new manufacturing facility came on line. We shall see shortly whether that’s true or not.
“Shire received its first FDA approval for the Georgia facility, to manufacture GAMMAGARD LIQUID® [Immune Globulin Infusion (Human)] 10% Solution, in June 2018
This state-of the art facility supports continued growth of Shire’s immunoglobulin and bio-therapeutics portfolio and further strengthens our ability to deliver complex therapies for patients”
With Intrexon on the slide again I guess that Kirky is selling more HALO.
Over the years there has been plenty of speculation about takeovers but there is one thing that has never been clear to me. HALO now has numerous Enhanze partnerships and some PEG partnerships with many of the world’s elite big Pharmas. Many if these Pharmas are sharing extremely confidential information with HALO. If Roche, for example, buys HALO then Roche will finish up having access to competitors secrets. This could be a major hurdle to a deal. As I see it it is much more likely that HALO will be acquired by somebody outside of big Pharma as that would allow the business to expand in all areas with all big Pharmas.
Kirky sells another 644k shares like an amateur between 24 and 28th August. The guys in big trouble or does he know something that we don’t. This was the guy who said he’d got no intention of selling any shares when he resigned as Chairman.
Well you don’t need telling what Kirky’s been up to today. Is he going to sell out HALO completely to save his empire?
Another 1,194k shares dumped by Kirky like an amateur between 21-23 August. The run on his funds seemingly continues unabated. The guy has a big problem.