Replies to post #6529 on Halozyme Therapeutics Inc (HALO)

[biotechinvestor1]

We can speculate positively or negatively all we want regarding how many new molecules will be combined with Enhanze. The indisputable reality, however, is the following key stats (from Fidelity) BASED ON THE EXISTING PARTNERSHIPS:

-Projected EPS Growth (Next Year vs. This Year):

HALO +71.61 %
Biotechnology Average +9.80%
Industry Percentile 97th

-Forward EPS Long Term Growth (3-5 Yrs):

HALO +44.00%
Biotechnology Average +5.23%
Industry Percentile 89th

Halo is trading at 18 forward P/E (https://finviz.com/quote.ashx?t=HALO&ty=c&ta=1&p=d)

This is extremely cheap for a profitable drug (biotech) maker. Don’t take my word for it. See the data (link below) yourself. Average Forward PE ratio of the 547 profitable companies in the Drugs (biotech) sector is 75.

http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/pedata.html

Halozyme is extremely cheap. The bond purchasers know this and this is why they have a nearly $800 million bet that halozyme will soar above $77.

Other institutional investors also know this and that’s why halo is 95% institutionally owned.

[maumar]

"The fact is that many IV drugs are not necessarily going to switch to subcu."

Agreed. Or, even if an Enhanze formulation is developed, the conversion rate is likely to be low.

This is essentially the crux of the matter. In general, the conversion rate to SC is going to be directly proportional to the reduction in administration time. So, unless Halo gets another Enhanze product where the reduction is as dramatic as that with Darzalex FasPro, it needs many new products to compensate for the lower conversion rate even if those drugs have huge sales with their IV formulations. Good examples are Herceptin and Mabthera, which I believe had combined yearly sales between $12B and $14B in 2018 and 2019, and yet Halo's quarterly royalties peaked at around $20M. I believe the Enhanze formulations were approved in 2013 and 2014 in Europe, Mabthera (Jun 2017) and Herceptin (Feb 2019) in US.