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Halozyme's (HALO) Q2 Earnings & Sales Top Estimates, Stock Up
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Halozyme Therapeutics, Inc. (HALO - Free Report) reported second-quarter 2024 adjusted earnings of 91 cents per share, which surpassed the Zacks Consensus Estimate of 78 cents. The company had recorded earnings of 74 cents per share in the year-ago period.
Total revenues increased almost 5% year over year to $231.4 million in the second quarter. Revenues surpassed the Zacks Consensus Estimate of $211 million.
The top line was driven by higher royalty payments from Roche (RHHBY - Free Report) for Phesgo and higher sales of proprietary products. Revenues were partially offset by lower milestone payments from collaboration partners.
During the second quarter, royalties from J&J (JNJ - Free Report) for subcutaneous Darzalex (daratumumab) were lowered temporarily in Europe between March and June before the issuance of the new European patent covering the Enhanze rHuPH20 product.
We remind investors that in June 2024, the company was granted a new patent in the EU that covers the ENHANZE rHuPH20 product, which is produced using the company's proprietary ENHANZE manufacturing methods. Following this, HALO updated its five-year financial outlook.
Per Halozyme, the new patent is included in all of HALO's existing and future ENHANZE licenses, meaning that all of its licensees will benefit from this patent. The patent is set to be validated in 37 EU countries, where it will be legally recognized and enforced until the expiry date of Mar 6, 2029.
Shares of Halozyme were up 5% in after-hours trading on Aug 6 owing to the better-than-expected results. The stock has rallied 40.5% in the year-to-date period against the industry’s decline of 4.8%.
Image Source: Zacks Investment Research
Quarter in Detail
Halozyme’s top line comprises product sales, royalties and revenues under collaborative agreements.
Royalty revenues totaled $124.9 million in the second quarter, up 12% from the year-ago quarter’s level. This was mainly due to the robust demand for Phesgo. Royalty revenues accounted for nearly 54% of the company’s total revenues in the reported quarter. Royalty revenues beat our model estimate of $116.3 million.
Several companies use HALO’s Enhanze technology to develop a subcutaneous formulation of their currently marketed drugs. Halozyme now has six marketed partnered drugs based on this technology, including the subcutaneous formulation of J&J’s Darzalex and Roche’s Phesgo.
Product sales were $78.9 million, down 6.8% from the year-ago quarter figure. HALO has two commercial proprietary products, Hylenex and Xyosted, with the latter acquired from Antares Pharma in 2022. Product sales beat our model estimate of $69.4 million.
Revenues under collaborative agreements were $27.5 million in the second quarter, down 22.3% from $35.4 million reported in the year-ago quarter.
Adjusted EBITDA was $137 million in the second quarter, reflecting around 19% increase from the prior-year quarter.
Halozyme had cash, cash equivalents and marketable securities of $529 million as of Jun 30, 2024, compared with $463.5 million as of Mar 31, 2024.
2024 Guidance
Halozyme reiterated its 2024 guidance provided in June.
The company still expects total revenues in the range of $935 million to $1,015 million in 2024, implying year-over-year growth of 13% to 22%, based primarily on increases in royalty revenues, collaboration revenues and growth in product sales from Xyosted.
Halozyme anticipates royalty revenues in the range of $520-$555 million, implying year-over-year growth of 16% to 24%.
Adjusted EBITDA is expected between $555 million and $615 million in 2024, implying growth of 30% to 44% year over year.
The company expects adjusted earnings in the range of $3.65-$4.05 per share, indicating an improvement of 32% to 46% year over year. HALO’s earnings per share guidance does not consider the impact of potential future share repurchases.
Halozyme Therapeutics, Inc. Price, Consensus and EPS Surprise
In the past 60 days, estimates for Exact Sciences’ 2024 loss per share have narrowed from $1.09 to $1.04. Loss per share estimates for 2025 have narrowed from 21 cents to 11 cents. Year to date, shares of EXAS have increased 24.3%.
EXAS’ earnings beat estimates in three of the trailing four quarters while meeting the same on the remaining occasion, the average surprise being 56.19%.
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Halozyme's (HALO) Q2 Earnings & Sales Top Estimates, Stock Up
Halozyme Therapeutics, Inc. (HALO - Free Report) reported second-quarter 2024 adjusted earnings of 91 cents per share, which surpassed the Zacks Consensus Estimate of 78 cents. The company had recorded earnings of 74 cents per share in the year-ago period.
Total revenues increased almost 5% year over year to $231.4 million in the second quarter. Revenues surpassed the Zacks Consensus Estimate of $211 million.
The top line was driven by higher royalty payments from Roche (RHHBY - Free Report) for Phesgo and higher sales of proprietary products. Revenues were partially offset by lower milestone payments from collaboration partners.
During the second quarter, royalties from J&J (JNJ - Free Report) for subcutaneous Darzalex (daratumumab) were lowered temporarily in Europe between March and June before the issuance of the new European patent covering the Enhanze rHuPH20 product.
We remind investors that in June 2024, the company was granted a new patent in the EU that covers the ENHANZE rHuPH20 product, which is produced using the company's proprietary ENHANZE manufacturing methods. Following this, HALO updated its five-year financial outlook.
Per Halozyme, the new patent is included in all of HALO's existing and future ENHANZE licenses, meaning that all of its licensees will benefit from this patent. The patent is set to be validated in 37 EU countries, where it will be legally recognized and enforced until the expiry date of Mar 6, 2029.
Shares of Halozyme were up 5% in after-hours trading on Aug 6 owing to the better-than-expected results. The stock has rallied 40.5% in the year-to-date period against the industry’s decline of 4.8%.
Image Source: Zacks Investment Research
Quarter in Detail
Halozyme’s top line comprises product sales, royalties and revenues under collaborative agreements.
Royalty revenues totaled $124.9 million in the second quarter, up 12% from the year-ago quarter’s level. This was mainly due to the robust demand for Phesgo. Royalty revenues accounted for nearly 54% of the company’s total revenues in the reported quarter. Royalty revenues beat our model estimate of $116.3 million.
Several companies use HALO’s Enhanze technology to develop a subcutaneous formulation of their currently marketed drugs. Halozyme now has six marketed partnered drugs based on this technology, including the subcutaneous formulation of J&J’s Darzalex and Roche’s Phesgo.
Product sales were $78.9 million, down 6.8% from the year-ago quarter figure. HALO has two commercial proprietary products, Hylenex and Xyosted, with the latter acquired from Antares Pharma in 2022. Product sales beat our model estimate of $69.4 million.
Revenues under collaborative agreements were $27.5 million in the second quarter, down 22.3% from $35.4 million reported in the year-ago quarter.
Adjusted EBITDA was $137 million in the second quarter, reflecting around 19% increase from the prior-year quarter.
Halozyme had cash, cash equivalents and marketable securities of $529 million as of Jun 30, 2024, compared with $463.5 million as of Mar 31, 2024.
2024 Guidance
Halozyme reiterated its 2024 guidance provided in June.
The company still expects total revenues in the range of $935 million to $1,015 million in 2024, implying year-over-year growth of 13% to 22%, based primarily on increases in royalty revenues, collaboration revenues and growth in product sales from Xyosted.
Halozyme anticipates royalty revenues in the range of $520-$555 million, implying year-over-year growth of 16% to 24%.
Adjusted EBITDA is expected between $555 million and $615 million in 2024, implying growth of 30% to 44% year over year.
The company expects adjusted earnings in the range of $3.65-$4.05 per share, indicating an improvement of 32% to 46% year over year. HALO’s earnings per share guidance does not consider the impact of potential future share repurchases.
Halozyme Therapeutics, Inc. Price, Consensus and EPS Surprise
Halozyme Therapeutics, Inc. price-consensus-eps-surprise-chart | Halozyme Therapeutics, Inc. Quote
Zacks Rank & Key Pick
Halozyme currently carries a Zacks Rank #2 (Buy).
A top-ranked stock in the biotech sector is Exact Sciences Corporation (EXAS - Free Report) , sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
In the past 60 days, estimates for Exact Sciences’ 2024 loss per share have narrowed from $1.09 to $1.04. Loss per share estimates for 2025 have narrowed from 21 cents to 11 cents. Year to date, shares of EXAS have increased 24.3%.
EXAS’ earnings beat estimates in three of the trailing four quarters while meeting the same on the remaining occasion, the average surprise being 56.19%.