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Halozyme Therapeutics (HALO) Down 19.7% Since Last Earnings Report: Can It Rebound?
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A month has gone by since the last earnings report for Halozyme Therapeutics (HALO - Free Report) . Shares have lost about 19.7% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Halozyme Therapeutics due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Halozyme Q3 Earnings & Sales Beat Estimates
Halozyme 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 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.
Quarterly Highlights
Halozyme’s top line comprises product sales, royalties and revenues under collaborative agreements.
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 Darzalex Faspro and to a lesser extent by 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. 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 Darzalex and growth in 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. Previously, the company expected the metric to be in the range of $1.85-$2.00 per share.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision. The consensus estimate has shifted -12.06% due to these changes.
VGM Scores
At this time, Halozyme Therapeutics has a nice Growth Score of B, however its Momentum Score is doing a bit better with an A. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Halozyme Therapeutics has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Halozyme Therapeutics (HALO) Down 19.7% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for Halozyme Therapeutics (HALO - Free Report) . Shares have lost about 19.7% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Halozyme Therapeutics due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Halozyme Q3 Earnings & Sales Beat Estimates
Halozyme 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 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.
Quarterly Highlights
Halozyme’s top line comprises product sales, royalties and revenues under collaborative agreements.
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 Darzalex Faspro and to a lesser extent by 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. 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 Darzalex and growth in 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. Previously, the company expected the metric to be in the range of $1.85-$2.00 per share.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision. The consensus estimate has shifted -12.06% due to these changes.
VGM Scores
At this time, Halozyme Therapeutics has a nice Growth Score of B, however its Momentum Score is doing a bit better with an A. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Halozyme Therapeutics has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.