Replies to post #8552 on Halozyme Therapeutics Inc (HALO)

[maumar]

I agree we will probably not have a significant breakout unless Helen delivers substantive new deals and/or acquisitions. If we do get approvals in June (Hytrulo) and in September (Ocrevus and Tecentriq), we may get close to $50 and any pullbacks will hopefully be shallow.

Here's a MS note from today. This is what I found most interesting:

"On BD, mgt. expressed a continued interest in drug delivery capabilities and noted the
ability to add leverage for opportunities that would allow the company to de-lever
rapidly post-transaction (for reference, Halozyme's net leverage ratio was 2x as of
the close of 1Q24);"

Does this seem like a good strategy?

Halozyme Therapeutics (OW, $59 PT, covered by Vikram Purohit)
• Management Attendees: CEO Helen Torley, CFO Nicole LaBrosse, Head of IR &
Corporate Communications Tram Bui
• Key Takeaways: (1) Mgt. does not foresee a step down in royalty revenues
resulting from the expiration of Enhanze composition of matter (COM) IP in 2024
(EU) / 2027 (U.S.) due to the breadth of co-formulation patents across Enhanze
partnered products; (2) Halozyme has not observed an acceleration in biopharma
companies attempting to develop in-house versions of hyaluronidase to replace
use of Enhanze ahead of COM patent expiration, and does not believe there is a
strategic incentive for partners to prefer the use of an in-house product given the
risk of immunogenicity posed by a potential novel hyaluronidase product and the
relative low cost of Enhanze within the overall drug development process; (3)
Mgt. noted that the company continues to evaluate potential competitors in the
space (including Alteogen) to understand any potential infringement of Halozyme's
IP; (4) Halozyme’s capital allocation priorities include investments into the current
business, share repurchases, and potential business development (BD). On BD,
mgt. expressed a continued interest in drug delivery capabilities and noted the
ability to add leverage for opportunities that would allow the company to de-lever
rapidly post-transaction (for reference, Halozyme's net leverage ratio was 2x as of
the close of 1Q24); (5) The company’s 2024 royalty revenues guidance of $500M-
$525M includes only a modest contribution from Vyvgart Hytrulo in CIDP, for
which the PDUFA date is 6/21.

[biotechinvestor1]

I wonder if you will move the goal post again. When we were in low 30’s you predicted we will be in 20’s for a long time. Then you said we are range bound in the 30’s. Then your “range” move to $40-45 with an upper limit of 45.5

I rather go with fundamentals than gut feelings. With 2024 PE in the low teens and a sustained CAGR of around 30% through 2028, halozyme is still a bargain even if Helen failed to deliver on new deals in 2023. I shared this thesis on this board when we were in the 30’s and it has proven correct. Helen still has not produced new deals or any hype and yet we are about 50% higher. This is due to fundamentals. If you want to call 50% gain, “range bound,” go ahead. I’ll keep enjoying my gains!