Replies to post #6841 on Halozyme Therapeutics Inc (HALO)

[maumar]

Unfortunately, it could be the case with some of them.

[maumar]

I tried to do my own projection of Darzalex FasPro royalties based on Helen's latest comments.

SC conversion rate was 72% in US and 60% ROW at the end of September 2021. My best case scenario is that Darzalex FasPro will capture about 70% of total revenues at the beginning of 2022 (say, 76% in Us and 64% ROW) and 85% by EOY. In 2023 conversion rate would start at 85% and peak at 95%. I am going to average conversion rate at 78% for 2022, 90% for '23, and 95% for '24 and '25. These are aggressive estimates but Helen seemed very confident and bullish about this so hopefully they are realistic.

Helen also said 2021 total revenues for Darzalex are expected to be around $6B and consensus revenue estimates are $10B in 2025. In order to get from $6B in 2021 to $10B in 2025 I am projecting 20% growth in 2022, 15% in 2023, and 10% in '24 and '25. Assuming Halo's royalties are 4% and there is no step down in 2024, this is what I come up with:

2022 total revenues ($7.2B), 78% = $5.6B, 4% Royalties = $224M
2023 total revenues ($8.28B), 90% = $7.45B, 4% Royalties = $298M
2024 total revenues ($9.1B), 95% = $8.65B, 4% Royalties = $346M
2025 total revenues ($10.01B), 95% = $9.5B, 4% Royalties = $380 M

If we assume Darzalex revenues will continue to grow at 10%, Royalties to Halo would be $418M in 2026 and $456 in 2027.

Not sure what Wave 1 products and Phesgo will contribute. Efgartigimod is expected to start contributing to the royalties in 2024, hopefully Opdivo and Tecentriq in 2025.

Can we get to $1B in royalties in 2027?

[maumar]

I am afraid you were right. Painfully weak stock action today with the XBI up almost 6%, IBB 4%, and QQQ almost 3%!