I agree we will probably not have a significant breakout unless Helen delivers substantive new deals and/or acquisitions. If we do get approvals in June (Hytrulo) and in September (Ocrevus and Tecentriq), we may get close to $50 and any pullbacks will hopefully be shallow.
Here's a MS note from today. This is what I found most interesting:
"On BD, mgt. expressed a continued interest in drug delivery capabilities and noted the
ability to add leverage for opportunities that would allow the company to de-lever
rapidly post-transaction (for reference, Halozyme's net leverage ratio was 2x as of
the close of 1Q24);"
Does this seem like a good strategy?
Halozyme Therapeutics (OW, $59 PT, covered by Vikram Purohit)
• Management Attendees: CEO Helen Torley, CFO Nicole LaBrosse, Head of IR &
Corporate Communications Tram Bui
• Key Takeaways: (1) Mgt. does not foresee a step down in royalty revenues
resulting from the expiration of Enhanze composition of matter (COM) IP in 2024
(EU) / 2027 (U.S.) due to the breadth of co-formulation patents across Enhanze
partnered products; (2) Halozyme has not observed an acceleration in biopharma
companies attempting to develop in-house versions of hyaluronidase to replace
use of Enhanze ahead of COM patent expiration, and does not believe there is a
strategic incentive for partners to prefer the use of an in-house product given the
risk of immunogenicity posed by a potential novel hyaluronidase product and the
relative low cost of Enhanze within the overall drug development process; (3)
Mgt. noted that the company continues to evaluate potential competitors in the
space (including Alteogen) to understand any potential infringement of Halozyme's
IP; (4) Halozyme’s capital allocation priorities include investments into the current
business, share repurchases, and potential business development (BD). On BD,
mgt. expressed a continued interest in drug delivery capabilities and noted the
ability to add leverage for opportunities that would allow the company to de-lever
rapidly post-transaction (for reference, Halozyme's net leverage ratio was 2x as of
the close of 1Q24); (5) The company’s 2024 royalty revenues guidance of $500M-
$525M includes only a modest contribution from Vyvgart Hytrulo in CIDP, for
which the PDUFA date is 6/21.
