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Halozyme (HALO) Q2 Earnings and Sales Beat, Ups '22 Outlook
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Halozyme Therapeutics, Inc. (HALO - Free Report) reported second-quarter 2022 adjusted earnings of 53 cents per share (excluding stock-based compensation expense), which beat the Zacks Consensus Estimate of 50 cents. The company’s earnings were 66 cents per share in the year-ago period.
Total revenues increased 11.7% year over year to $152.4 million, primarily driven by strong royalty payments, especially from J&J (JNJ - Free Report) and the addition of product sales following the completion of the acquisition of Antares Pharma. However, growth in revenues was partially offset by lower revenues under collaboration agreements. The top line also beat the Zacks Consensus Estimate of $132.02 million.
Halozyme stock has increased 7.8% so far this year against the industry’s 18.5% decline.
Image Source: Zacks Investment Research
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, including the subcutaneous formulation of J&J’s Darzalex and Roche’s (RHHBY - Free Report) Phesgo.
In May 2022, Antares announced that it had completed the acquisition of Antares Pharma. The acquisition, which valued Antares at approximately $960 million, added an industry-leading auto-injector platform and a commercial business with three proprietary products to Halozyme’s portfolio.
Royalty revenues were $85.3 million in the second quarter, up 86.4% 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 nearly 56% of the total revenues for the company during the second quarter. Robust demand for J&J’s subcutaneous Darzalex, multiple label expansions and continued launches in new territories and 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 $46.3 million in the quarter, up 52.5% from the year-ago quarter. The company supplies API to ENHANZE partners like J&J and Roche.
Revenues under collaborative agreements were $20.7 million, down 65.6% year over year. This significant fall was due to the receipt of a $40 million upfront payment from ViiV Healthcare in the year-ago quarter,
Research and development ([R&D] including stock-based compensation) expense increased 91.9% year over year to $15.5 million, mainly due to planned investments in the ENHANZE technology as well as one-time compensation costs incurred by HALO related to the recently-completed Antares Pharma acquisition.
Selling, general and administrative (SG&A) expenses (including stock-based compensation) expenses were $57.5 million, up 366.5% from the year-ago period. This significant rise was on account of one-time compensation costs incurred by HALO in relation to the recently completed Antares Pharma acquisition.
2022 Guidance Raised
Following the completion of the acquisition of Antares Pharma, Halozyme raised its guidance for revenues and earnings for 2022. HALO expects the Antares acquisition to be accretive to Halozyme’s 2022 earnings and also support its growth strategy over the next five years and beyond.
The company now expects total revenues in 2022 to be between $655 million and $685 million, up from the previously provided range of $530 million and $560 million. This new revenue guidance indicates year-over-year growth of 48%-55%. It expects the Antares transaction to contribute $115 million to $125 million in revenues.
The company now expects revenues from royalties to increase greater than 65% year over year to approximately $340 million to $350 million, up from the previously provided guidance of $300 million on the back of strong uptake of the subcutaneous formulation of J&J’s Darzalex, growth in Roche’s Phesgo and additional royalty revenues from auto-injector devices following the Antares acquisition. While collaborative revenues are expected to be flat year over year, product sales are expected to increase as a result of the Antares acquisition.
The company now expects adjusted earnings to be in the range of $2.10-$2.25 per share (excluding stock-based compensation expense), up from the previous guidance of $2.05-$2.20.
In the past 30 days, estimates for Morphic’s 2022 loss per share have narrowed from $3.47 to $2.90. Loss estimates for 2023 have narrowed from $3.96 to $3.90 during the same period. Shares of Morphic have lost 34.6% in the year-to-date period.
Earnings of Morphic beat estimates in three of the last four quarters and missed the mark just once, witnessing a surprise of 48.29%, on average. In the last reported quarter, MORF delivered an earnings surprise of 183.95%.
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Halozyme (HALO) Q2 Earnings and Sales Beat, Ups '22 Outlook
Halozyme Therapeutics, Inc. (HALO - Free Report) reported second-quarter 2022 adjusted earnings of 53 cents per share (excluding stock-based compensation expense), which beat the Zacks Consensus Estimate of 50 cents. The company’s earnings were 66 cents per share in the year-ago period.
Total revenues increased 11.7% year over year to $152.4 million, primarily driven by strong royalty payments, especially from J&J (JNJ - Free Report) and the addition of product sales following the completion of the acquisition of Antares Pharma. However, growth in revenues was partially offset by lower revenues under collaboration agreements. The top line also beat the Zacks Consensus Estimate of $132.02 million.
Halozyme stock has increased 7.8% so far this year against the industry’s 18.5% decline.
Image Source: Zacks Investment Research
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, including the subcutaneous formulation of J&J’s Darzalex and Roche’s (RHHBY - Free Report) Phesgo.
In May 2022, Antares announced that it had completed the acquisition of Antares Pharma. The acquisition, which valued Antares at approximately $960 million, added an industry-leading auto-injector platform and a commercial business with three proprietary products to Halozyme’s portfolio.
Royalty revenues were $85.3 million in the second quarter, up 86.4% 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 nearly 56% of the total revenues for the company during the second quarter. Robust demand for J&J’s subcutaneous Darzalex, multiple label expansions and continued launches in new territories and 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 $46.3 million in the quarter, up 52.5% from the year-ago quarter. The company supplies API to ENHANZE partners like J&J and Roche.
Revenues under collaborative agreements were $20.7 million, down 65.6% year over year. This significant fall was due to the receipt of a $40 million upfront payment from ViiV Healthcare in the year-ago quarter,
Research and development ([R&D] including stock-based compensation) expense increased 91.9% year over year to $15.5 million, mainly due to planned investments in the ENHANZE technology as well as one-time compensation costs incurred by HALO related to the recently-completed Antares Pharma acquisition.
Selling, general and administrative (SG&A) expenses (including stock-based compensation) expenses were $57.5 million, up 366.5% from the year-ago period. This significant rise was on account of one-time compensation costs incurred by HALO in relation to the recently completed Antares Pharma acquisition.
2022 Guidance Raised
Following the completion of the acquisition of Antares Pharma, Halozyme raised its guidance for revenues and earnings for 2022. HALO expects the Antares acquisition to be accretive to Halozyme’s 2022 earnings and also support its growth strategy over the next five years and beyond.
The company now expects total revenues in 2022 to be between $655 million and $685 million, up from the previously provided range of $530 million and $560 million. This new revenue guidance indicates year-over-year growth of 48%-55%. It expects the Antares transaction to contribute $115 million to $125 million in revenues.
The company now expects revenues from royalties to increase greater than 65% year over year to approximately $340 million to $350 million, up from the previously provided guidance of $300 million on the back of strong uptake of the subcutaneous formulation of J&J’s Darzalex, growth in Roche’s Phesgo and additional royalty revenues from auto-injector devices following the Antares acquisition. While collaborative revenues are expected to be flat year over year, product sales are expected to increase as a result of the Antares acquisition.
The company now expects adjusted earnings to be in the range of $2.10-$2.25 per share (excluding stock-based compensation expense), up from the previous guidance of $2.05-$2.20.
Halozyme Therapeutics, Inc. Price
Halozyme Therapeutics, Inc. price | Halozyme Therapeutics, Inc. Quote
Zacks Rank & Other Stocks to Consider
Halozyme currently has a Zacks Rank #3 (Hold).
Another better-ranked stock in the overall healthcare sector is Morphic (MORF - Free Report) , which sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
In the past 30 days, estimates for Morphic’s 2022 loss per share have narrowed from $3.47 to $2.90. Loss estimates for 2023 have narrowed from $3.96 to $3.90 during the same period. Shares of Morphic have lost 34.6% in the year-to-date period.
Earnings of Morphic beat estimates in three of the last four quarters and missed the mark just once, witnessing a surprise of 48.29%, on average. In the last reported quarter, MORF delivered an earnings surprise of 183.95%.