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Halozyme (HALO) Q4 Earnings Top, Revenues Miss, Stock Down
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Halozyme Therapeutics, Inc. (HALO - Free Report) reported fourth-quarter 2022 adjusted earnings of 48 cents per share, narrowly beating the Zacks Consensus Estimate of 47 cents. Adjusted earnings were also higher than our estimate of 44 cents per share. The company’s earnings were 42 cents per share in the year-ago period.
Total revenues increased 78% year over year to $181.4 million, primarily driven by strong royalty payments from J&J (JNJ - Free Report) for subcutaneous Darzalex (daratumumab). The addition of product sales following the acquisition of Antares Pharma in May 2022 and higher collaboration revenues also boosted the top line. Revenues, however, fell short of the Zacks Consensus Estimate of $186 million.
Total revenues also missed our estimate of $182.9 million in the reported quarter.
Shares of Halozyme were down 3.34% in after-hours trading on Tuesday following the mixed results reported by the company. The stock has rallied 47.1% in the past year against the industry’s decline of 5.1%.
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.
Royalty revenues were $106 million in the fourth quarter, up 69% from the year-ago quarter, mainly driven by robust demand for J&J’s subcutaneous Darzalex and to a lesser extent, Roche’s Phesgo.Royalty revenues generated nearly 58.6% of the total revenues for the company during the reported quarter.
Product sales were $61.1 million in the quarter, significantly up from the year-ago quarter. The company supplies API to ENHANZE partners like J&J and Roche which makes up its product revenues.
Revenues under collaborative agreements were $14.4 million, witnessing growth of 16.5% year over year.
Research and development expenses increased 123.2% year over year to $22.6 million, mainly because of planned investments in the ENHANZE technology, as well as one-time compensation costs incurred by HALO related to the Antares Pharma acquisition.
Selling, general and administrative expenses were $37.7 million, significantly up from the year-ago period. The rise was mainly on account of one-time compensation costs incurred by HALO for the Antares Pharma acquisition as well as higher compensation expenses related to the ongoing combined larger workforce.
Full-Year 2022 Results
Halozyme reported revenues of $660.1 million in 2022, up 48.9% year over year, primarily driven by strong growth in royalties, However, revenues fell short of the Zacks Consensus Estimate of $665.6 million and our estimate of $661.6 million.
The company’s adjusted diluted earnings for 2022 were $2.21 per share, compared with $2.00 per share in the year-ago period. The reported earnings beat the Zacks Consensus Estimate of $2.20 per share as well as our estimate of $2.18 per share.
2023 Guidance
The company maintained its previously issued financial guidance for 2023.
The company expects total revenues in 2023 to be between $815 million and $845 million, indicating year-over-year growth of 23%-28% on the back of the continued strength of Darzalex SC and Phesgo, using ENHANZE technology, along with royalty and product combination.
The company expects revenues from royalties to increase approximately 23%-26% year over year to $445-$455 million. Collaborative revenues are expected to be flat year over year.
The company expects adjusted earnings to be in the range of $2.50-$2.65 per share (excluding stock-based compensation expense), implying year-over-year growth greater than 10%.
Halozyme Therapeutics, Inc. Price, Consensus and EPS Surprise
In the past 90 days, the consensus estimate for ADMA Biologics’ 2022 loss per share has remained stable at a loss of 33 cents. But, during the same period, the loss estimate per share for 2023 has narrowed from 20 cents to 19 cents. In the past year, the shares of ADMA Biologics have increased by 129.2%.
ADMA’s earnings beat estimates in three of the trailing four quarters, delivering an average earnings surprise of 1.81%.
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Halozyme (HALO) Q4 Earnings Top, Revenues Miss, Stock Down
Halozyme Therapeutics, Inc. (HALO - Free Report) reported fourth-quarter 2022 adjusted earnings of 48 cents per share, narrowly beating the Zacks Consensus Estimate of 47 cents. Adjusted earnings were also higher than our estimate of 44 cents per share. The company’s earnings were 42 cents per share in the year-ago period.
Total revenues increased 78% year over year to $181.4 million, primarily driven by strong royalty payments from J&J (JNJ - Free Report) for subcutaneous Darzalex (daratumumab). The addition of product sales following the acquisition of Antares Pharma in May 2022 and higher collaboration revenues also boosted the top line. Revenues, however, fell short of the Zacks Consensus Estimate of $186 million.
Total revenues also missed our estimate of $182.9 million in the reported quarter.
Shares of Halozyme were down 3.34% in after-hours trading on Tuesday following the mixed results reported by the company. The stock has rallied 47.1% in the past year against the industry’s decline of 5.1%.
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.
Royalty revenues were $106 million in the fourth quarter, up 69% from the year-ago quarter, mainly driven by robust demand for J&J’s subcutaneous Darzalex and to a lesser extent, Roche’s Phesgo.Royalty revenues generated nearly 58.6% of the total revenues for the company during the reported quarter.
Product sales were $61.1 million in the quarter, significantly up from the year-ago quarter. The company supplies API to ENHANZE partners like J&J and Roche which makes up its product revenues.
Revenues under collaborative agreements were $14.4 million, witnessing growth of 16.5% year over year.
Research and development expenses increased 123.2% year over year to $22.6 million, mainly because of planned investments in the ENHANZE technology, as well as one-time compensation costs incurred by HALO related to the Antares Pharma acquisition.
Selling, general and administrative expenses were $37.7 million, significantly up from the year-ago period. The rise was mainly on account of one-time compensation costs incurred by HALO for the Antares Pharma acquisition as well as higher compensation expenses related to the ongoing combined larger workforce.
Full-Year 2022 Results
Halozyme reported revenues of $660.1 million in 2022, up 48.9% year over year, primarily driven by strong growth in royalties, However, revenues fell short of the Zacks Consensus Estimate of $665.6 million and our estimate of $661.6 million.
The company’s adjusted diluted earnings for 2022 were $2.21 per share, compared with $2.00 per share in the year-ago period. The reported earnings beat the Zacks Consensus Estimate of $2.20 per share as well as our estimate of $2.18 per share.
2023 Guidance
The company maintained its previously issued financial guidance for 2023.
The company expects total revenues in 2023 to be between $815 million and $845 million, indicating year-over-year growth of 23%-28% on the back of the continued strength of Darzalex SC and Phesgo, using ENHANZE technology, along with royalty and product combination.
The company expects revenues from royalties to increase approximately 23%-26% year over year to $445-$455 million. Collaborative revenues are expected to be flat year over year.
The company expects adjusted earnings to be in the range of $2.50-$2.65 per share (excluding stock-based compensation expense), implying year-over-year growth greater than 10%.
Halozyme Therapeutics, Inc. Price, Consensus and EPS Surprise
Halozyme Therapeutics, Inc. price-consensus-eps-surprise-chart | Halozyme Therapeutics, Inc. Quote
Zacks Rank & Stock to Consider
Halozyme currently carries a Zacks Rank #4 (Sell).
A top-ranked stock in the same industry is ADMA Biologics, Inc. (ADMA - Free Report) , carrying a Zacks Ranks #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
In the past 90 days, the consensus estimate for ADMA Biologics’ 2022 loss per share has remained stable at a loss of 33 cents. But, during the same period, the loss estimate per share for 2023 has narrowed from 20 cents to 19 cents. In the past year, the shares of ADMA Biologics have increased by 129.2%.
ADMA’s earnings beat estimates in three of the trailing four quarters, delivering an average earnings surprise of 1.81%.