Helen had mentioned it in passing in at least one of the recent calls. But the analyst and Nicole LaBrosse spent quite a bit of time on the issue of the patent expiries in 2024 and 2027. She clarified that Halo's royalty rate for all the Enhanze products on the market now will not be affected, except for Darzalex FasPro. Therefore, royalties for Darzalex FasPro in Europe will be cut in half starting from next year. I am still not clear what happens in the rest of the world ex US. Unfortunately, they made their worst deal for their most important partnership.
The analyst also said that he found it very hard to model future royalties especially for Tecentriq and Opdivo. LaBrosse said that Darzalex got to an 80% conversion rate in two years, Herceptin to 60% in Europe, and Phesgo to 35%. I kind of doubt he found her answer helpful but I understand that they have to be careful and cautious.
I am concerned that royalty growth will stall in the first half of 2024 and the stock will struggle, especially if Halo is not able to sign some new, large deals.
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