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Halozyme (HALO) Beats on Q3 Earnings, Tweaks 2021 Guidance
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Halozyme Therapeutics, Inc. (HALO - Free Report) reported third-quarter 2021 adjusted earnings of 55 cents per share (excluding stock-based compensation expense), which beat the Zacks Consensus Estimate of 42 cents. The company’s earnings were 31 cents per share in the year-ago period.
Total revenues increased 77.3% year over year to $115.8 million, primarily driven by milestone payments from J&J (JNJ - Free Report) and robust royalty revenues. The top line also beat the Zacks Consensus Estimate of $101.94 million. Based on encouraging quarterly results in the first nine months of 2021, the company also updated its guidance for 2021.
Halozyme’s stock was up 1.3% in after-market trading on Nov 2, following the robust third-quarter results and encouraging guidance. However, the stock has declined 7.6% this year so far compared with the industry’s 8.9% decrease.
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Quarterly Highlights
Halozyme’s top line comprises product sales, royalties and revenues under collaborative agreements.
Several companies are using Halozyme’s ENHANZE technology for developing a subcutaneous formulation of their currently marketed drugs. The company has five marketed partnered drugs based on this technology.
Royalty revenues were $58.6 million in the third quarter, up 144.7% from the year-ago quarter, mainly driven by strong sales uptake of J&J’s subcutaneous Darzalex (Darzalex SC / Darzalex Faspro) and to a lesser extent by Roche’s (RHHBY - Free Report) Phesgo. Royalty revenues generated approximately 50% of the total revenues for the company. Robust demand for subcutaneous Darzalex, multiple label expansions and continued launches in new territories are likely to drive Halozyme’s strong royalty revenues.
Product sales, solely from the sale of bulk API to collaborators using the ENHANZE platform for drug development, were $25 million in the quarter compared with $9 million in the year-ago quarter. The increase was driven by higher bulk API sales to ENHANZE partners, J&J and Roche.
Revenues under collaborative agreements were $30.2 million, almost flat year over year. The company also recorded $30 million in commercial milestone payments related to Darzalex SC during the reported quarter.
Research and development ([R&D] including stock-based compensation) expense increased 9.5% year over year to $8.5 million due to higher costs to support additional ENHANZE targets.
Selling, general and administrative ([SG&A] including stock-based compensation) expenses were $13.2 million, up 12.5% from the year-ago period.
2021 Guidance Updated
Halozyme raised the lower end of its previously issued guidance for revenues and earnings for 2021. The company expects total revenues in 2021 to be between $430 million and $445 million, indicating year-over-year growth of 61%-66%. Previously, the company expected revenues to be between $425 million and $445 million.
The company continues to expect revenues from royalties to more than double year over year on the back of strong uptake of a subcutaneous formulation of J&J’s Darzalex and growth in Roche’s Phesgo. Product sales are now expected to increase 79% to 88% from 2020 levels, up from the previous expectation of 70% to 80%.
The company now expects adjusted earnings to be in the range of $1.90-$2.00 per share (excluding stock-based compensation expense), implying year-over-year growth of 70%-79%. Previously, the company expected the metric to be in the range of $1.85-$2.00 per share.
Halozyme Therapeutics, Inc. Price, Consensus and EPS Surprise
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Halozyme (HALO) Beats on Q3 Earnings, Tweaks 2021 Guidance
Halozyme Therapeutics, Inc. (HALO - Free Report) reported third-quarter 2021 adjusted earnings of 55 cents per share (excluding stock-based compensation expense), which beat the Zacks Consensus Estimate of 42 cents. The company’s earnings were 31 cents per share in the year-ago period.
Total revenues increased 77.3% year over year to $115.8 million, primarily driven by milestone payments from J&J (JNJ - Free Report) and robust royalty revenues. The top line also beat the Zacks Consensus Estimate of $101.94 million. Based on encouraging quarterly results in the first nine months of 2021, the company also updated its guidance for 2021.
Halozyme’s stock was up 1.3% in after-market trading on Nov 2, following the robust third-quarter results and encouraging guidance. However, the stock has declined 7.6% this year so far compared with the industry’s 8.9% decrease.
Quarterly Highlights
Halozyme’s top line comprises product sales, royalties and revenues under collaborative agreements.
Several companies are using Halozyme’s ENHANZE technology for developing a subcutaneous formulation of their currently marketed drugs. The company has five marketed partnered drugs based on this technology.
Royalty revenues were $58.6 million in the third quarter, up 144.7% from the year-ago quarter, mainly driven by strong sales uptake of J&J’s subcutaneous Darzalex (Darzalex SC / Darzalex Faspro) and to a lesser extent by Roche’s (RHHBY - Free Report) Phesgo. Royalty revenues generated approximately 50% of the total revenues for the company. Robust demand for subcutaneous Darzalex, multiple label expansions and continued launches in new territories are likely to drive Halozyme’s strong royalty revenues.
Product sales, solely from the sale of bulk API to collaborators using the ENHANZE platform for drug development, were $25 million in the quarter compared with $9 million in the year-ago quarter. The increase was driven by higher bulk API sales to ENHANZE partners, J&J and Roche.
Revenues under collaborative agreements were $30.2 million, almost flat year over year. The company also recorded $30 million in commercial milestone payments related to Darzalex SC during the reported quarter.
Research and development ([R&D] including stock-based compensation) expense increased 9.5% year over year to $8.5 million due to higher costs to support additional ENHANZE targets.
Selling, general and administrative ([SG&A] including stock-based compensation) expenses were $13.2 million, up 12.5% from the year-ago period.
2021 Guidance Updated
Halozyme raised the lower end of its previously issued guidance for revenues and earnings for 2021. The company expects total revenues in 2021 to be between $430 million and $445 million, indicating year-over-year growth of 61%-66%. Previously, the company expected revenues to be between $425 million and $445 million.
The company continues to expect revenues from royalties to more than double year over year on the back of strong uptake of a subcutaneous formulation of J&J’s Darzalex and growth in Roche’s Phesgo. Product sales are now expected to increase 79% to 88% from 2020 levels, up from the previous expectation of 70% to 80%.
The company now expects adjusted earnings to be in the range of $1.90-$2.00 per share (excluding stock-based compensation expense), implying year-over-year growth of 70%-79%. Previously, the company expected the metric to be in the range of $1.85-$2.00 per share.
Halozyme Therapeutics, Inc. Price, Consensus and EPS Surprise
Halozyme Therapeutics, Inc. price-consensus-eps-surprise-chart | Halozyme Therapeutics, Inc. Quote
Zacks Rank
Halozyme currently carries a Zacks Rank #2 (Buy).
A better-ranked company from the biotech sector is Vertex Pharmaceuticals Incorporated (VRTX - Free Report) , sporting a Zacks Rank #2 (Buy). Earnings estimates for 2021 and 2022 have risen 0.5% and 0.2%, respectively, over the past 30 days.You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.