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Why do you think it is trading at these low levels and when do you expect it to start getting back to previous highs?
Do you think that this is a frank assessment?
By the way, (and you probably already know this) Benzinga keeps a list of analyst coverage for HALO so one could cross compare that list with the participants in the call to see any differences. I've no idea if that Benzinga list is current or comprehensive.
Reflecting this morning on the fact that if HALO hadn't spent $550 million on share buybacks they would have ~$1 billion in the bank today, giving them much more flexibility in pursuing new technologies to add to the one trick pony we have now.
Share buybacks are often a sign that a company is out of ideas, stale and with no strategic plan and I think the HALO board and C suite execs are guilty of that in spades here. In my opinion this company feels rudderless and is in a dire need of a shakeup.
All of them say "outperform" I think, which makes sence given the upside of even the more conservative estimates from this low level. This would be a ~$100 stock today with a current return of $2 per share if there was crystal clear clarity on future revenue streams.
re: analyst coverage, good question and I'm not sure how to get a definitive answer. A reduction in number wouldn't surprise me, though. HALO has managed to severely embarrass the bullish analysts in the past miserable year, so it's possible a few drop out given the uncertainties in the future development, if only to avoid further sullied reputations.
I think a new deal, as you suggest, one which demonstrates a fertile new path (like maybe the "cell therapies" Which to be honest, I have no understanding of right now), will spark more active interest. Otherwise we are stuck in the doldrums.
Leerink also dropped their PT to $48 from $50
If I recall correctly, in the discussion about patent extensions, Helen said there were applications pending but did not indicate that they had been approved. Was that your impression?
It's the first I've heard of "cell therapies". Good to hear they've explored some new wrinkles.
You nailed it.
Get ready to bounce - maybe.
From Marketwatch
-------------------
Does October offer up more opportunity than we realize? Perhaps so, says our call of the day from MacroTourist newsletter editor Kevin Muir, who highlights seemingly little known selling of “losers” by mutual fund portfolio managers late in the month.
As Muir explains via some broker pals in the know, all U.S. mutual funds must have an October year-end, and a settlement lag made Wednesday the last day for any transactions to be included in that 2021 tax year.
He notes that biotechs are among the stocks that seemed to be getting the chop, with the Nasdaq Biotech Index NBI, -1.63% up just 3% year to date — down 3% this month —- against the Nasdaq Composite’s COMP, +0.00% 18% gain.
But Muir also thinks those managers may be throwing out decent opportunities for others to catch. Here’s what he found after crunching some numbers on the iShares Biotechnology ETF IBB, -1.56% : “With an average return of 3.78% over the past two decades of Novembers, that’s a rather admirable performance record considering it also includes the usually brutal 2007/8,” says Muir.
What that kind of selling could do is help “create a seasonal tendency for this index to bottom into the end of the month when mutual funds flip their books to the next tax year,” he says, adding he’s going long on this under-the-radar trade that could be poised to rally next month.
https://www.marketwatch.com/story/fund-managers-are-tossing-out-their-losers-here-are-the-bargains-investors-might-not-want-to-miss-11635419238?mod=home-page
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This could explain the recent weakness.
Good luck!
-Fritz
Somebody spent all of $350.00 for this big price move. LOL! Scam Scam Scam
HALO posted on twitter. Not much. 20% off coupon. LOL!
So on an annual basis we are up to ~$180 million on Phesgo and Darzelex royalties, does that sound correct?
Thanks for the overview. Much appreciated. EOM
Dew, ENTA has had a nice run. What is your estimation of their upside from here?
Thanks!
-Fritz
TAK-771 appears to be the old Baxter HyQvia.
I'm guessing somebody is unloading their position. I wonder if we'll get to know who?
Clearly I was dead wrong about the death cross. Geez...
If this was as unambiguous a situation as you contend, it is extremely problematic that neither Helen, nor her deputiy Elaine could not articulate as much during the last two or three opportunities they had to put the issue to rest. That, in itself, leaves room for doubt IMHO.
Helen has very recently said that investors should assume a step down.
This is still the case in Europe where that patent extensions you cite are not valid. EU step down starts in 2024 unless the patents are extended there as well.
Also, we don't know for sure if the step down is avoided in the case of a patent extension. It's possible, yes, but not certain. This is a matter of the details of the contract and we don't have those details.
In additon, step down or no, the royalty deals only last 10 years as mentioned by Elaine the CFO just this week.
So, Elaine wasn't a disaster but it was more of the same. I did hear her say that the ViiV partnership is evidence of the viability of using HALO tech in small molecule contexts, so for me that was a little bit of an insight. She was given the opportunity by a very friendly Charles Duncan to discuss the ViiV partnership as evidence of more uses in the vaccine space but she really didn't run with it, and so it seemed like she was quashing that idea. That may not have been her intent but that's what I took away from that particular question.
Patent exclusivity rolls off in 2024 in EU and 2027 in US and the halving of royalties happens in conjunction with those events. Royalties are given for 10 years in each indication. More patent protection can be obtained as a result of co-formulations "in some instances". This is still a black hole in my knowledge and she did nothing to expand my understanding of it.
Duncan was a great cheerleader but nothing much else to be had. The idea of buying new platforms was laughably short - addressed only in the final seconds whe they were "out of time". LMAO.
Not yet, maybe time tomorrow. How was she?
They can't keep pretending that they can just hold pat and rest on their laurels.
Got it, thanks. I guess she won't divulge the actual numbers for the same reason she never gets more specific than "mid-dingle digits".
"there is a step down in 2024 in Europe and 2027 in the U.S."
I'm not sure I understand what she is referring to hear. Is it a change in the royalty rate to lower than "mid-single digits" or is it just an anticipated drop off in the overall sales of these co-formulated drugs?
Maybe the next presentation will have some useful info.
Unfortunately CFO Elaine Sun is the presenter and she is not good at that.
HALO always sags in the summer and it's probably true for the sector as well. I do see a bounce coming but not to the former highs due to issues covered on this board.
I am not clear on all of this and Helen and even her predecessors have not explaiined it in a way that can be easily understood (by me at least); but I'd think the partners (Roche, et. al) have a distinct incentive to keep the exclusivity granted by patent extensions, if only because they would need to go through another round of trials, with all of their uncertainties and costs, with a new bio-similar co-formula. I believe that was one of Helen's primary points. Again, it's not a clear subject for me and I'd like to have a lot more clarity on the whole topic, but I guess it'll have to come in dribs and drabs over time.
Overall it was a good, tight, well-scripted presentation and it was obvious that she is getting the message that these things are of concern to the investors.
Not really new, just a question of emphasis. She did mention that there could be extensions in patents based on the theory that the new combos are patentable; this is a theory that HALO put forth years ago and has been somewhat undermentioned until now that the topic is more urgent. I'm not a patent expert but it has always made sense to me that this extension theory was valid. That being said, there is no real world evidence of that viz-a-viz Enhanze, though, and I'd guess the interested parties are not going to seek such a patent extension until the 11th hour, so it will remain a theory until then.
She also mentioned that another company has a competing hyaluronidase product in the early stages (ph 1) but emphasised the barriers to entry for any competing product are very high, especially given PEGph20's extensive safety profile with a large variety of combined drugs.
Then there was the metion of seeking new technologies, but with the usual caveat "we're not in a hurry".
Curious if you hear anything more when you listen to it.
Best,
-Fritz
Helen spent a little more time addressing the IP rolloff question today.
Agree with your last paragraph. I was thinking how clueless the new CFO is about the whole IP rolloff thing and how it is affecting investor sentiment. This is clearly demonstrated in the way she misjudged pulling the trigger in the stock buyback scheme and ended up paying way too much for our own stock. The only one who thinks this person is a financial wizard is Helen.
Geez.....
Is 4% of the float short interest enough to cause any significant movement?
Thanks for posting those analyst reports. I've been waiting to see what they took away from the last call.
Sounds realistic.
Also, in case you were wondering, I'm not ready to eat crow yet on my shrugging off the death cross a few weeks ago. LOL!
I still think it's going to bounce, but not until September, probably. Just speculation on my part. The sector is out of favor at the moment, so we've got some external headwinds. How high it bounces I can't say, (see our recent discussion on valuation and the problems holding it back).
So FASPRO subcu conversion should approach 100% then. What's your take?
Good find. Agree with your assessment. Thanks for posting it.
Their brilliant new CFO is a disaster IMHO.
How are upfront payments classified by the accountants?