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Halozyme Therapeutics (HALO) Up 11.4% Since Last Earnings Report: Can It Continue?
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It has been about a month since the last earnings report for Halozyme Therapeutics (HALO - Free Report) . Shares have added about 11.4% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Halozyme Therapeutics due for a pullback? 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 catalysts.
Halozyme Q4 Earnings & Sales Beat Estimates
Halozyme reported fourth-quarter 2021 adjusted earnings of 42 cents per share (excluding stock-based compensation expense), which beat the Zacks Consensus Estimate of 40 cents. The company’s earnings were 56 cents per share in the year-ago period.
Total revenues decreased 16.2% year over year to $102 million, primarily due to lower revenues under collaboration agreements and product sales, which were partially offset by strong royalty payments, especially from J&J. The top line however beat the Zacks Consensus Estimate of $97.1 million.
Quarterly Highlights
Halozyme’s top line comprises product sales, royalties and revenues under collaborative agreements.
Royalty revenues were $62.6 million in the fourth quarter, up 96% from the year-ago quarter, mainly driven by strong sales uptake of J&J’s subcutaneous Darzalex and to a lesser extent by Roche’s Phesgo. Royalty revenues generated more than 60% of the total revenues for the company. Robust demand for J&J’s subcutaneous Darzalex, multiple label expansions and continued launches in new territories along with an additional contribution from Roche’s Phesgo 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 $27.1 million in the quarter, down 16.7% from the year-ago quarter. The company supplies API to ENHANZE partners like J&J and Roche.
Revenues under collaborative agreements were $12.3 million, down 78.5% year over year. The company had recorded an upfront license payment of $30 million from one of its partners in the fourth quarter of 2020, which was absent in the reported quarter.
Research and development ([R&D] including stock-based compensation) expense increased 37% year over year to $10.1 million due to higher costs to support additional ENHANZE targets.
Selling, general and administrative (SG&A) including stock-based compensation) expenses were $13.8 million, up 32.1% from the year-ago period.
Full-Year Results
Halozyme reported revenues of $443.3 million in 2021, up 65.7% year over year, primarily driven by strong growth in royalties. The company’s earnings for 2021 were $2.00 per share, compared with $1.12 in the year-ago period.
2022 Guidance
Halozyme maintained its guidance for revenues and earnings for 2022 issued last month. The company expects total revenues in 2022 to be between $530 million and $560 million, indicating year-over-year growth of 20.
The company expects revenues from royalties to increase approximately 50% year over year to $300 million on the back of strong uptake of a subcutaneous formulation of J&J’s Darzalex as well as growth in Roche’s Phesgo. Product sales and collaborative revenues are expected to be flat year over year.
The company expects adjusted earnings to be in the range of $2.05-$2.20 per share (excluding stock-based compensation expense), implying year-over-year growth of 2.5.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision flatlined during the past month.
VGM Scores
At this time, Halozyme Therapeutics has an average Growth Score of C, a grade with the same score on the momentum front. Following the exact same course, 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 C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
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) Up 11.4% Since Last Earnings Report: Can It Continue?
It has been about a month since the last earnings report for Halozyme Therapeutics (HALO - Free Report) . Shares have added about 11.4% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Halozyme Therapeutics due for a pullback? 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 catalysts.
Halozyme Q4 Earnings & Sales Beat Estimates
Halozyme reported fourth-quarter 2021 adjusted earnings of 42 cents per share (excluding stock-based compensation expense), which beat the Zacks Consensus Estimate of 40 cents. The company’s earnings were 56 cents per share in the year-ago period.
Total revenues decreased 16.2% year over year to $102 million, primarily due to lower revenues under collaboration agreements and product sales, which were partially offset by strong royalty payments, especially from J&J. The top line however beat the Zacks Consensus Estimate of $97.1 million.
Quarterly Highlights
Halozyme’s top line comprises product sales, royalties and revenues under collaborative agreements.
Royalty revenues were $62.6 million in the fourth quarter, up 96% from the year-ago quarter, mainly driven by strong sales uptake of J&J’s subcutaneous Darzalex and to a lesser extent by Roche’s Phesgo. Royalty revenues generated more than 60% of the total revenues for the company. Robust demand for J&J’s subcutaneous Darzalex, multiple label expansions and continued launches in new territories along with an additional contribution from Roche’s Phesgo 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 $27.1 million in the quarter, down 16.7% from the year-ago quarter. The company supplies API to ENHANZE partners like J&J and Roche.
Revenues under collaborative agreements were $12.3 million, down 78.5% year over year. The company had recorded an upfront license payment of $30 million from one of its partners in the fourth quarter of 2020, which was absent in the reported quarter.
Research and development ([R&D] including stock-based compensation) expense increased 37% year over year to $10.1 million due to higher costs to support additional ENHANZE targets.
Selling, general and administrative (SG&A) including stock-based compensation) expenses were $13.8 million, up 32.1% from the year-ago period.
Full-Year Results
Halozyme reported revenues of $443.3 million in 2021, up 65.7% year over year, primarily driven by strong growth in royalties. The company’s earnings for 2021 were $2.00 per share, compared with $1.12 in the year-ago period.
2022 Guidance
Halozyme maintained its guidance for revenues and earnings for 2022 issued last month. The company expects total revenues in 2022 to be between $530 million and $560 million, indicating year-over-year growth of 20.
The company expects revenues from royalties to increase approximately 50% year over year to $300 million on the back of strong uptake of a subcutaneous formulation of J&J’s Darzalex as well as growth in Roche’s Phesgo. Product sales and collaborative revenues are expected to be flat year over year.
The company expects adjusted earnings to be in the range of $2.05-$2.20 per share (excluding stock-based compensation expense), implying year-over-year growth of 2.5.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision flatlined during the past month.
VGM Scores
At this time, Halozyme Therapeutics has an average Growth Score of C, a grade with the same score on the momentum front. Following the exact same course, 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 C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Halozyme Therapeutics has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.