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Long Position on HALO @ $17.40 on 9/29/2017 (Momentum)

Bullish Flag on HALOHalozyme Therapeutics, Inc. (HALO) develops, and commercializes human enzymes and other drug candidates in the United States, Switzerland, and internationally.

The company's human enzymes are used to facilitate the delivery of injected drugs and fluids, enhancing the efficacy and the convenience of other drugs or can be used to alter tissue structures for clinical benefit.

Its products are based on the Enhanze technology, a patented recombinant human hyaluronidase enzyme (rHuPH20) that enables the subcutaneous delivery of injectable biologics, such as monoclonal antibodies and other therapeutic molecules, as well as small molecules and fluids.

The company offers Hylenex recombinant, a formulation of rHuPH20 to facilitate subcutaneous fluid administration for achieving hydration; to enhance the dispersion and absorption of other injected drugs; in subcutaneous urography; and to enhance resorption of radiopaque agents. It also develops PEGylated recombinant human hyaluronidase for the treatment of pancreatic ductal adenocarcinoma, non-small cell lung cancer, gastric cancer, and metastatic breast cancer.

It has collaborations with F. Hoffmann-La Roche, Ltd.; Hoffmann-La Roche, Inc.; Baxalta US Inc.; Baxalta GmbH; Pfizer Inc.; Janssen Biotech, Inc.; AbbVie, Inc.; Eli Lilly and Company; and Genentech. 

Shares have formed a bullish "flag" following several positive developments:

  • Bristol-Myers (BMY) and Halozyme (HALO) announced a global collaboration and license agreement to develop subcutaneously administered Bristol-Myers Squibb immuno-oncology medicines using Halozyme’s Enhanze drug-delivery technology. Halozyme will receive an initial $105M for access to the Enhanze technology. Halozyme has the potential to earn milestone payments of up to $160M for each of the nominated collaboration targets and additional milestone payments for combination products.
  • Separately, Halozyme (HALO) licensed its Enhanze drug-delivery technology to Roche (RHHBY) for exclusive development of an undisclosed therapeutic target. Halozyme will receive an initial $30M with the potential to earn additional payments of up to $160M subject to achievement of specified development, regulatory and sales-based milestones.
  • Based on the payments, the company raised its guidance. Halozyme raised its FY17 revenue view guidance to $245M-$260M from $115M-$130M vs FY17 consensus $131.9M. Reflecting the portion of upfront payments from the new agreements expected to be recorded as revenue in 2017.

Higher share prices are expected for this stock.

 

Entry Point: $17.40

52-Weeks Trading Range: $8.18 - $17.56

Stop Loss: $16.50

Target Price: $19.14

 

Updates

11/8/2017 10:13:05 AM

HALO closed at $18.60.

Position closed on 11/8/2017 at price of $18.60 with a 6.90% gain in 40 days.

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