Replies to post #7203 on Halozyme Therapeutics Inc (HALO)

[maumar]

Well, unfortunately some big players have been getting out, though they've been replaced by some other big players. It's been kind of a slow process but Kirk sold his few remaining shares last quarter and Bellevue, which used to have a large stake has been selling some shares for several quarters. It now has less than one million shares. In any case, I think/hope that there should not be a lot of downside from these levels.

The problem is, how do we get to $60 PPS? It's hard to see an easy, quick path there. Darzalex, Phesgo and Antares cannot get us there by themselves. I don't see significant near term catalysts other than Argenx and Roche filing for SC Efga and SC Tecentriq. But even those are not game changers. Small new deals would also not be enough imo. Clinical development has been painfully slow. For instance, ARGX announced positive results from their Phase 3 Adapt SC trial back in March but they still haven't filed, so Halo will probably not have a new product for at least another year, and that will be only for one indication, Myasthenia Gravis. I think the PE is kind of low because of the Darzalex concentration risk and the uncertainties about the durability of Halo's revenues. We need more products. The 5ml auto-injector with Enhanze could be significant but it will take years to develop.

All in all I see little downside and little upside in the near term. I hope I am wrong about the upside!

[maumar]

I read the Morgan Stanley report. It's 27 pages and packed with some interesting information. For better or worse, it may help reinforce a floor for the stock near $40 and a ceiling near $50.

"Given the macro backdrop, we view Halozyme as the most
defensive name in our coverage given its established royalty
business, long-term potential for growth, and diversified base
business via its acquisition of Antares.

Halozyme presents an interesting opportunity within smid cap biotech given it
has diversified revenue streams through its Enhanze platform, which combines
their proprietary enzyme (rHuPH20) with intravenously dosed biologics to allow
for subcutaneous dosing; Halozyme’s approach has the additional benefit of
relatively low-risk clinical trials given it only needs bridging. While the recent
Antares acquisition remains to be proven, it has a track record in high value
products like EpiPen and Forteo.

Enhanze is a low-risk, high-value platform that’s attractive in the current
environment. In a biotech market where a number of smid cap names are trading
at negative enterprise value or overly weighted to the commercial launches of a
first product, we view a name like Halozyme as an attractive, defensive name
given its royalty revenues are diversified across a number of larger biopharma
products. From a binary risk perspective, we view it as relatively low given Wave
3 and the earlier Wave 4 products (such as PD-1/L1 inhibitors and Ocrevus) are
relatively low-risk clinical trial programs given the validation of the Enhanze
platform and the low hurdle of PK/PD bridging studies. Over time, however, the
risk profile of the Enhanze platform increases as more products go directly to
market with an Enhanze platform and require clinical outcomes. Regarding IP,
there may be questions around the strength of coformulation patents given
Enhanze IP expires in the mid-to-late 2020’s, but we think this will be on a caseby-
case basis and it’s difficult to make sweeping statements."