Halozyme Therapeutics Inc (HALO)

[biotechinvestor1]

How high will the share price soar if phase 3 is a success?

If approved, a 15x multiple (i.e. P/E multiple) is conservative when considering the potential growth opportunity for Pegph20 in other solid tumors and the growth of Enhanze.

15 x $1 billion annual earnings (from pancreatic cancer ALONE per Helen in multiple presentations during 2015-2018 and knowing Enhanze revenue will cover all ongoing expenses in near future) = $15 billion market cap. This would be 7 times today’s market cap or $100 per share.

I think the retail investors are sleep at the switch/not aware of this potential since HALO does not get much media or analyst attention. Also, a lot of folks have been burned before with other candidates for pancreatic cancer so most assume Pegph20 will fail. What if phase is de-risked as Hellen keeps repeating at every CC.

Applying even the traditional 30% phase 3 success to this model, would put the market cap at about $5 billion which is roughly twice the current value.

My sense (based on many phase 3’s I’ve seen over the past 20 years) is that we will see share price gradually rise and nearly double prior to the release of the data. If positive, the MC will spike toward $15 billion. If negative, we’ll be back around $2 billion market cap (which gives no value to Pegph20 and undervalues Enhanze).