Halozyme Therapeutics Incorporated (HALO) Share Price

Continuing with your line of thinking, (as you say pipe dreaming), it would be a bidding war between Merck and Bristol Myeres.

If that were the case, Halo would not have introduced the MDASE portfolio. MDASE allows competition to come to market as long as they pay license fee. It makes good Business sense.

If it was at you say and he, I wanted to stop competition in their tracks, they would not have introduced the MDASE licensing portfolio.

I disagree. Stopping a potential competitor like Alteogen in its tracks would benefit Halozyme immensely, IMHO.

Decease and desist that you referred to in your message, would not benefit Halozyme. Halo  would much rather have either a license fee or some penalty for infringement. The only real entity that would benefit from a C and desist would be brystol Myers, in which case they would be back in Halozyme with their size power and influence. Either way it won't be a giant Pharma like Merck  versus Halo.

Thank you for posting this.

-- OJ

To your point, though, it is possible that BMY might be willing to chip in to the HALO legal fund in order to slow or otherwise hamper SC Keytruda's entry into the marketplace, thus strengthening HALO's hand.

You are assuming that HALO's only recourse is to ask for a cut of the royalties. One might assume HALO could, in the alternative, gain a cease-and-desist order before SC Keytruda ever makes it to market. Thus, Merck has skin in the game, and they are not going to be passively watching from the sidelines.

Those are all valid observations. Do you think there would be anti-trust issues related to BMY?
In any event, I've been waiting for someone to purchase HALO for 16 years and so far, it's not happened for one reason or another.

I wonder if Merck would be interested in purchasing Halozyme thus locking up the portfolio of patents for the next so many years and be able to go ahead with the Keytruda sub q with the Korean company. They are looking at losing market share over the next 3 to 5 years if they can't get to market with their sub Q. I think (don't know) that Keytruda is approaching a 30 Billion dollar market. If they lost 30% of that to BMS and Optivo that is 10 billion over say 5 years. Why not get to market and protect your advantage and get paid 1 billion a year for the next 10 years for all of Halozyme's business. It really does put you in the driver's seat going forward with Keytruda and who knows what else they could put Sub Q in their portfolio. A 10 to 12 billion dollar spend now could easily pay for itself in a very short term. They just need to realize not all of the savings comes from an increase in market share but a extension of current market share for the next so many years. I also think in a pipe dream type thought process (again just dreaming not trying to sell anything) that Halozyme buying the German company could have been part of a 3 party deal where we Locked them up and Merck bought the whole enchilada and got all the great points Helen was making in her attempt to purchase. A 2 for 1 easy to sell to their board. Again just a pipe dream on my part.

Merck had no problems mivung forward because they are not at risk. It is Alteogen who has infringed Halozyme's patents. Merck has nothing to lose. They will pay alteogen and not care who alteogen has to pay for licensing or penalties.

It won't be halozyme vs. Merck. It's halozyme vs. Alteogen.

Merck will be paying Alteogen a royalty for Keytruda SC. MERCK will not care if Alteogen will have to pay Halozyme a licensing fee or penalties.

If you think Merck would get invovled then by the same rational so would BMS. BMS would back Halozyme for the same reasons you opine Merck would get involved. 

That's a thoughtful post and it will be interesting to see it play out. Merck has unlimited budget to spend on litigation compared to HALO, so that is always a consideration when going up against big pharma and Merck knows this, so they can make decisions like going ahead on SC Keytruda with a feeling of impunity. On the other side of the coin, Merck really didn't have another option if they wanted to bring SC Keytruday to market, so what choice did they have but to forge ahead knowing the patent risks. My guess is that all parties will be seeking a comfortable monetary settlement, which will ultimately cut HALO in on the royalties. If this happens it will boost HALO's stock considerably as well as drive partners back into HALO's camp. but it will take time to sort out.

I think you are probably right. We certainly need great lawyers to handle this.

It's impossible to measure the extent of it, but I think Merck's validation of Alteogen's technology has damaged Halo's reputation and may have affected their ability to sign new deals.

I am a little skeptical that Merck did not have their lawyers take a very deep and extensive look into this issue before spending a ton of money testing SC Keytruda, but if they and DS's lawyers screwed up, I would be thrilled. If Halo thinks they have a strong case and the market agrees with them, that would be fantastic.

I would think BMY's exclusivity adds another level of complexity. Do they become part of the lawsuit? Do we sue for damages? Do we try and get an injunction, which is what I imagine BMY would want, or do we try and settle for a portion of Alteogen's royalties?

Your point number 1 makes perfect sense to me.

As much as I think HALO management is truly subpar, I have a high regard for their patent attorney, who seems to be a real asset to the company. I'm watching his strategic moves with a great deal of interest.

Thanks for posting that.

The reason to wait until now is likely 2 fold;

1) see if there is it there there (i.e. see if alteogen's phase 3 was successful). No need to sue them if their phase 3 had failed

2) take time to prepare for a strong case. This is why Halo hired the chief legal officer of QUALCOMM. He is highly experienced from the litigations between QUALCOMM and Apple.

I'm grateful for your posts. They are not only informative but often also somehow about important nuggets that are missed by others on this bored and other media.

I remember you were the first one to bring to our attention that Roche is working on a high volume auto injector (likely with halo) from their slide deck.

A lawsuit against Alteogen and presumably Merck and DS would be a big deal. I had noticed that Alteogen’s stock was down 33% in the last 5 days and 15% on Friday and assumed it was a “sell the news” move after the end of the phase 3 trial of SC Keytruda, but this makes more sense. If it is true, I hope Halo has a very strong case that will lead to a quick settlement with a portion of Alteogen’s royalties to Halo, and not years of litigation. I wonder what the rationale was for waiting until now. Merck’s stock has been weak lately too but it could be unrelated.

... In fact, Alteogen is down 30% in the past 5 days

https://www.google.com/search?q=alteogen+stock+chart&ie=UTF-8&oe=UTF-8&hl=en-us&client=safari

https://cdn.abcotvs.com/dip/images/2584949_103017wlsmcdowells4.jpg

Thanks for sharing. This is big news. Alteogen's stock being down 20% on rumors of a patent law suit tells me market participants think halozyme has a high chance of prevailing. Remeber, Alteogen has other products generating earnings (unrelated to hyaluronidase) and for it to be down 20% on this news is very telling. If hyaluronidase was its only product it would have been down even more.

I expect that will happen. Kinda reminds
Me of McDowells in the moving coming to America.

https://www.msn.com/en-xl/news/other/alteogen-s-trading-volume-surges-exceeding-samsung-for-the-day/ar-AA1uy48T?ocid=socialshare

This link talks about pending law suit from Halozyme

For sure a bargain. I would also point out that alteogen stock has been down 35% in the last couple weeks. Got hammered Friday on big volume.

These graphs/comps put things in perspective for anyone investing based on fundamentals. Halozyme is trading at outsatnding bargain values. Don't take my words for it. Have a look!

Fred, why not pin these on top of this board?

yo..

yo..

Thank for this. I know I’m biased but Jason Butler has been following Halo a long time. He knows what he’s talking about and always has a higher target. And he’s right.

In a report released today, Jason Butler from JMP Securities reiterated a Buy rating on Halozyme (HALO – Research Report), with a price target of $73.00.Don't Miss our Black Friday Offers:Unlock your investing potential with TipRanks Premium - Now At 40% OFF!Make smarter investments with weekly expert stock picks from the Smart Investor NewsletterJason Butler’s rating is based on several considerations, primarily highlighting the robustness and continued prospects of Halozyme’s ENHANZE technology. Despite the emergence of potential competitors, such as Merck’s new subcutaneous formulation of Keytruda, Butler maintains confidence in Halozyme due to the company’s established reputation and comprehensive intellectual property portfolio. He suggests that Halozyme’s partners will likely continue to see ENHANZE as the industry standard, given its proven track record in manufacturing, development, and regulatory compliance over the years.
Furthermore, Butler suggests that the impact of new competitors on Halozyme’s royalty streams and pipeline potential is minimal, especially considering the forthcoming PDUFA date for Bristol’s subcutaneous OPDIVO. The analyst also notes the strategic importance of Halozyme’s new MDASE platform, which could serve as a superior alternative to ENHANZE. Overall, Butler’s Buy rating reflects his belief in the company’s enduring competitive advantage and its compelling value proposition for partners.

https://www.tipranks.com/news/blurbs/halozymes-competitive-edge-butlers-buy-rating-amid-emerging-competitors

X

100% spot on in all respects. Thanks for sharing that.

Agree, these comments make a lot of sense, especially this part:

introduced investor questions around why HALO would pursue something seemingly so divergent from its current business.

Thank you very much for sharing this analysis, Maumar.

But if the MDASE patent portfolio is as broad and all-encompassing as Helen says it is, then the elephant in the room is a patent infringement suit filed by Halozyme against Alteogen. Jessica Fye did not mention this possibility.

-- OJ

P.S. Breathing a sigh of relief that this EvoTech deal is not going ahead. Helen seems more and more like a loose cannon. Agree with Jessica Fye that the best thing HALO could do right now would be to announce a new partnered subQ product, demonstrate commitment to its business model and related stability of future income streams/EPS.

Thanks for sharing. JPM analyst has not been on top of her game over the past few months. She made some silly calls that were proven unwise in retrospect. 

Regarding JPM's most recent view, I don't see Helen moving too quickly to buy another company. She (Helen) learned a valuable lesson here.  I hope/think she will wait until she has an HVAI deal in the bag before shopping around again.

Roche likely working on HVAI with enhanze. See slide 64 on this Roche slide deck. Note Roche made a distinction between on-body injector and high-volume autoinjectors (halozyme) https://assets.roche.com/f/176343/x/f513f69de2/pharma_day_20240930_final_online_v02.pdf

I think her comments make sense. From JPM's Jessica Fye:

HALO announced this morning that the company is withdrawing its proposal to acquire Evotec due to the target’s unwillingness to engage. We believe HALO was initially attracted to Evotec’s potential to offer durable, de-risked revenue, potential for attractive margins, and similar business model. Still, the bid was unexpected given the significant difference between the two companies (see our initial take here) and introduced investor questions around why HALO would pursue something seemingly so divergent from its current business. Indeed, at one point HALO had lost >$2bn in mkt cap since last Wednesday’s close (the day before the Evotec headlines emerged), similar to the proposed deal size. While we expect HALO retracting its bid will come as a relief, we believe it could take time for HALO shares to fully recover, and based on our investor conversations, we think this proposal has introduced uncertainty around what other deal proposal might be next, in addition to what the pursuit of Evotec suggests about HALO’s long-term outlook. Bigger picture, while we are encouraged by the growth of HALO’s currently partnered subQ products, we would like to see more deals with new or existing partners with good economics and more visibility on Wave 4/5 products to get more constructive.

Monitoring recent developments with Alteogen. We have been watching developments with Alteogen and its berahyaluronidase alfa (aka ALT-B4, a hyaluronidase variant). Merck recently announced positive top-line results for subQ Keytruda using Alteogen’s ALT-B4. Recall that Bristol secured exclusive rights to use Enhanze with PD-1, and the PDUFA for subQ Opdivo is Dec 29th. HALO recently unveiled its portfolio of MDASE patents, which broadly cover modified human hyaluronidases for potential use in subQ delivery of drugs/biologics. These MDASE patents are distinct from the Enhanze patents and essentially cover various alternative hyaluronidases . While we have yet to hear HALO explicitly state whether it believes ALT-B4 may be covered by the MDASE IP, broadly speaking, we believe HALO aims to leverage this IP to capture royalty economics on hyaluronidase-containing products that don’t use Enhanze, and we will watch for how successful this may prove. We also noticed that Alteogen recently entered into a deal with Daiichi Sankyo to develop subQ Enhertu (HER2 ADC). Recall that Roche utilizes Enhanze for its SubQ HER2 products Herceptin SC and Phesgo (subQ Herceptin+Perjeta combo).

Upcoming catalysts:

US patent extension for Enhanze

BMS Opdivo SC approval PDUFA date in December

Milestone payment(s) for new Argenx trials in Sjogran's trial

HVAI deal with Roche (Roche hinted at it in their investors slide deck)

MODERATE Fred.

Centerview Partners is serving as Halozyme's financial advisor and Weil, Gotshal & Manges LLP, as legal advisor.

I wonder how many millions of dollars we paid these experts for this train wreck?

You are wrong again. It's clear that it is you who does "not know how things work." If evo was truly a good fit, and the investors had supported Helen's idea to buy it, Helen would not have withdrawn so quickly. She would've raised the bid to see if Evo board would engage or use other means for a hostile takeover clearly no one thought this was a good buy for Helen and she withdrew.

I like how you were proven wrong on the way down and now on the way up and you still insist.

I hope I’m right but I see what you’re saying to an extent. Read my post that I made to Bio and you’ll see what I think. When I invest I always bet on the CEO. Buying companies as a strategy sometimes works and sometimes doesn’t. By waiting for the right deal she is doing the right thing. That being said I would like to see more partnerships.

I don’t think you really get how things work sometimes. As an experienced business operator who has merged companies in the past Helen’s decision to walk was the right one to make because she knows as well as I do that there has to be chemistry between upper mgmt and clearly there was not. You or I should have never even known that Helen was exploring this combination until it was agreed on. Someone on Evo side purposely leaked this to crater any hope that this will happen. In the meantime there has been damage done to Halo and their stock price at least for a while. She is approaching deal making in the appropriate manner and you have consistently bashed her for how she runs the company in spite of the great success thus far. I still think the buybacks and the Antares deal were good for the company and accretive. In reality Halo paid a net price of about 7-8 hundred million for an injector platform and commercial products that generate cash flow. At some point she’s going to sell off the commercial business and get most of the cash back that she paid and get the injector business for pretty much nothing. Let’s she what she can make of it. I also think she had the right idea on Evo but we’ll never know.

This is where we part, Howee, she's had the benefit of the doubt for far too long. The leak has nothing to do with the failure to execute new deals, with EVO or otherwise. She's been riding on the coat tails of the success of her processors and has shown us that she just can't grow the company with new partnerships. Time to move on.

Don't forget that she could have let her ego get in the way, double down and raise her bid for Evotec. Instead she showed discipline and listen to her investors. This will bode very well for future of halozyme. It shows her management is pragmatic and not driven by ego. I'm glad I bought more on the dip (see my multiple posts over the past week) that I was buying.)

This whole episode was a great test of Helen and the posters here. Congratulations to the longs who saw Evotec for what it was and still had the fortitude to buy at the dips.

I have been critical of Helen, but she just gained much respect from me. Thank you for showing discipline, Helen and listening to your true investors.

Nearly everything you said in this post was wrong. Your posts over the years have shown us that you are a permabear on halo. There is little doubt on this for anyone who has been here.

Howee's posts like the one in favor of the deal because it would be good for Evotec's employees or because Evotec on its has doone little, or his post about Halozyme paying Deutsche Bank to downgrade Evotec and many others makes little sense. Not sure if one should take his posts seriously or if he is a closet bear.

Too bad IH won't let you delete this and other posts you wrote un favor of the deal and predicting that it would take place. Same goes for Stock Rafter.

I’ll give her the benefit of the doubt. We would have never known about this except for the leak. That was clearly done as part of Evo strategy to avoid this deal and Helen was forced to come out with the news. Pretty shady on Evos part but it worked.