Halozyme Therapeutics Inc (HALO)

[rod5247]

Total of 13 targets with the first three approved drugs. The additional 10 could be in any stage of developement.

We recived $10 million upfront for the fourth target and $250K for milestone and license.

I am a little more coservative on the cash position. Counting the $5.5 million from Baxter in January and not counting any additional income from Baxter, Roche, or new partner except R&D reimbursement from Baxter & Roche, I see enough cash to get through June-September, 2010 or 18-21 months from Jan. 1, 2009. Reasoning for this, $72 million end Q3, Roche paid for Q4, + $5.5 million Jan., 2009 gives us $77 million. The cash burn should increase as developement increases.

The better outlook is, Baxter going to Phase III with IVIG should bring a milestone payment. Roche further validating the technology with likely additional targets and milestones within the next 18 months. Hylenex full launch within 6-12 months, starting growing revenue stream. With strong validation by Baxter & Roche, the increased potential for new partners within 18 months for unknown targets. Add to this two internal indications that could produce large buy-ins within 12 months, Chemophase upon Phase III enabling data and the insulin program.

Lilly continues to be the most likely insulin partner based on past discussed items and new trials still using their products. The longer Halozyme developes the insulin program on its own, the more a partner will have to pay. With Humulin off patent and Humalog coming off patent by 2015, it is only logical that Lilly would want to protect and even increase its market share in this multi-billion $ market. Convert Humulin from an off-patent low revenue producer to a best in class with patent protection to at least 2024. Co-formulate Humalog before patent expiration for another best in class with at least another 9 years of patent protection. If Cheetah performs as expected and Lilly allows others to partner, they lose billions.