On Friday, H.C. Wainwright maintained a positive outlook on shares of Halozyme (NASDAQ:HALO) Therapeutics (NASDAQ:HALO) with a Buy rating and a $65.00 price target. This affirmation comes despite the recent notification from the European Patent Office (EPO) to Halozyme and its partner Janssen, a division of Johnson & Johnson, regarding the revocation of coformulation patents in the European Union (EU) that protect DARZALEX SC, a treatment for multiple myeloma.
Halozyme has expressed confidence in its financial guidance, emphasizing that the revocation will not affect the company's projected royalties from DARZALEX SC sales in Europe, which are expected to continue into 2032. Moreover, the company anticipates no change to its royalty projections for DARZALEX FASPRO in the United States.
The decision to revoke the patents was based on the timing of a clinical trial protocol publication by Janssen, which occurred prior to the priority date of the patents in question. Janssen has initiated an appeal against the first of the two revoked patents and is likely to appeal the second as well. These patents will remain in force until a final appellate decision is made.
Moreover, Halozyme is looking forward to a resolution regarding a third patent application currently under EPO review. The company believes this application contains patentable material, which could further solidify its intellectual property position.
In other recent news, Halozyme Therapeutics continues to maintain its revenue forecast for 2024 despite the revocation of a co-formulation patent by the European Patent Office. The company anticipates surpassing $1 billion in royalty revenues by 2027.
Halozyme has also reported robust Q2 2024 earnings, with total revenue reaching $231 million, largely due to a 12% increase in royalty revenue from key products. TD Cowen has maintained its Buy rating and a price target of $70.00 for Halozyme, highlighting the company's potential for an expansion of the U.S. patent portfolio and an active pursuit of mergers and acquisitions.
However, JPMorgan has downgraded Halozyme's stock from Overweight to Neutral, despite an increased price target. The company has expanded its global collaboration license agreement, enabling partners to utilize Halozyme's ENHANZE technology for the development of rapid subcutaneous delivery systems.
The expansion is expected to generate upfront fees of $7.5 million for each of the four new targets, totaling $30 million, with potential future milestone payments of up to $85 million per target.
Lastly, Halozyme has broadened its partnership with argenx, adding four new pipeline candidates. These are recent developments in the company's ongoing business operations and financial performance.
InvestingPro Insights
Halozyme Therapeutics (NASDAQ:HALO) continues to demonstrate strong financial performance despite the recent patent challenges in the European Union. According to InvestingPro data, the company boasts a robust revenue of $873.3 million over the last twelve months as of Q2 2023, with an impressive revenue growth of 12.88% during the same period. This growth aligns with the company's confidence in maintaining its financial guidance.
InvestingPro Tips highlight that Halozyme has a perfect Piotroski Score of 9, indicating strong financial health and operational efficiency. This score supports H.C. Wainwright's positive outlook on the company. Moreover, the company is trading at a low P/E ratio relative to near-term earnings growth, with a PEG ratio of 0.36, suggesting potential undervaluation despite the recent patent news.
It is worth noting that Halozyme's management has been aggressively buying back shares, which could be interpreted as a sign of confidence in the company's future prospects. For investors seeking more comprehensive analysis, InvestingPro offers 12 additional tips for Halozyme Therapeutics, providing a deeper understanding of the company's position in the market.
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