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Halozyme Therapeutics (HALO) Up 0.7% 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 0.7% in that time frame, underperforming 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 drivers.
Halozymereported first-quarter 2023 adjusted earnings of 47 cents per share, which missed the Zacks Consensus Estimate of 48 cents. The bottom line also lagged our model estimates of 54 cents. The company recorded earnings of 47 cents per share in the year-ago period.
Total revenues increased 38% year over year to $162.1 million, primarily driven by higher royalty payments from J&J for subcutaneous Darzalex. The figure, however, missed the Zacks Consensus Estimate of $174 million and our model estimates of $180.4 million.
Quarterly Highlights
Halozyme’s top line comprises of product sales, royalties and revenues under collaborative agreements.
Royalty revenues totaled $99.6 million in the first quarter, up 43% from the prior-year period’s level. This was mainly due to robust demand for J&J’s subcutaneous Darzalex and Roche’s Phesgo. Royalty revenues accounted for nearly 61.4% of the company’s net revenues during the reported quarter.
Product sales came in at $60.7 million, significantly higher than the year-ago quarter’s figure.
Revenues under collaborative agreements totaled $1.7 million, down 93% from the year-ago quarter’s actual.
Research and development expenses increased 51.2% year over year to $18 million. This was mainly due to planned investments in the ENHANZE technology, as well as a rise in compensation costs related to the Antares Pharma acquisition.
Selling, general and administrative expenses totaled $37.4 million compared with $13.8 million in the year-ago period.
The rise was mainly on account of higher compensation expenses related to the ongoing combined larger workforce for Antares Pharma’s acquisition. It was also due to an addition of commercial resources for the sales and marketing of testosterone replacement therapy products.
2023 Guidance
Halozyme maintained its previously issued guidance for 2023, which was provided in January this year.
The company expects total revenues in the range of $815-$845 million for 2023, indicating year-over-year growth of 23-28%. This improvement reflects continued strength of Darzalex SC and Phesgo, using ENHANZE technology, along with significant growth in royalty and products.
Revenues from royalties are anticipated to increase approximately 23-26% to $445-$455 million year over year.
EBITDA is projected in the band of $415-$440 million (excluding amortization costs), implying year-over-year growth of more than 30%.
The company expects adjusted earnings in the range of $2.50-$2.65 per share (excluding stock-based compensation expense), indicating an improvement of more than 10% year over year.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates revision.
VGM Scores
Currently, Halozyme Therapeutics has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Halozyme Therapeutics has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Halozyme Therapeutics belongs to the Zacks Medical - Biomedical and Genetics industry. Another stock from the same industry, Fate Therapeutics (FATE - Free Report) , has gained 2.4% over the past month. More than a month has passed since the company reported results for the quarter ended March 2023.
Fate Therapeutics reported revenues of $58.98 million in the last reported quarter, representing a year-over-year change of +220.4%. EPS of -$0.19 for the same period compares with -$0.68 a year ago.
Fate Therapeutics is expected to post a loss of $0.59 per share for the current quarter, representing a year-over-year change of +25.3%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.
Fate Therapeutics has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of F.
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Halozyme Therapeutics (HALO) Up 0.7% 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 0.7% in that time frame, underperforming 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 drivers.
Halozyme Q1 Earnings Disappoint, Revenues Rise Y/Y
Halozymereported first-quarter 2023 adjusted earnings of 47 cents per share, which missed the Zacks Consensus Estimate of 48 cents. The bottom line also lagged our model estimates of 54 cents. The company recorded earnings of 47 cents per share in the year-ago period.
Total revenues increased 38% year over year to $162.1 million, primarily driven by higher royalty payments from J&J for subcutaneous Darzalex. The figure, however, missed the Zacks Consensus Estimate of $174 million and our model estimates of $180.4 million.
Quarterly Highlights
Halozyme’s top line comprises of product sales, royalties and revenues under collaborative agreements.
Royalty revenues totaled $99.6 million in the first quarter, up 43% from the prior-year period’s level. This was mainly due to robust demand for J&J’s subcutaneous Darzalex and Roche’s Phesgo. Royalty revenues accounted for nearly 61.4% of the company’s net revenues during the reported quarter.
Product sales came in at $60.7 million, significantly higher than the year-ago quarter’s figure.
Revenues under collaborative agreements totaled $1.7 million, down 93% from the year-ago quarter’s actual.
Research and development expenses increased 51.2% year over year to $18 million. This was mainly due to planned investments in the ENHANZE technology, as well as a rise in compensation costs related to the Antares Pharma acquisition.
Selling, general and administrative expenses totaled $37.4 million compared with $13.8 million in the year-ago period.
The rise was mainly on account of higher compensation expenses related to the ongoing combined larger workforce for Antares Pharma’s acquisition. It was also due to an addition of commercial resources for the sales and marketing of testosterone replacement therapy products.
2023 Guidance
Halozyme maintained its previously issued guidance for 2023, which was provided in January this year.
The company expects total revenues in the range of $815-$845 million for 2023, indicating year-over-year growth of 23-28%. This improvement reflects continued strength of Darzalex SC and Phesgo, using ENHANZE technology, along with significant growth in royalty and products.
Revenues from royalties are anticipated to increase approximately 23-26% to $445-$455 million year over year.
EBITDA is projected in the band of $415-$440 million (excluding amortization costs), implying year-over-year growth of more than 30%.
The company expects adjusted earnings in the range of $2.50-$2.65 per share (excluding stock-based compensation expense), indicating an improvement of more than 10% year over year.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates revision.
VGM Scores
Currently, Halozyme Therapeutics has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Halozyme Therapeutics has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Halozyme Therapeutics belongs to the Zacks Medical - Biomedical and Genetics industry. Another stock from the same industry, Fate Therapeutics (FATE - Free Report) , has gained 2.4% over the past month. More than a month has passed since the company reported results for the quarter ended March 2023.
Fate Therapeutics reported revenues of $58.98 million in the last reported quarter, representing a year-over-year change of +220.4%. EPS of -$0.19 for the same period compares with -$0.68 a year ago.
Fate Therapeutics is expected to post a loss of $0.59 per share for the current quarter, representing a year-over-year change of +25.3%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.
Fate Therapeutics has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of F.