On Wednesday, H.C. Wainwright reaffirmed its Buy rating on shares of Halozyme Therapeutics (NASDAQ:HALO), maintaining a $68.00 price target for the stock. The firm's position comes after recent news from Johnson & Johnson (NYSE:NYSE:JNJ) regarding a regulatory setback for one of its products, which Halozyme is indirectly associated with.
Johnson & Johnson announced this week that it had received a Complete Response Letter (CRL) from the FDA concerning the Biologics License Application for the subcutaneous version of amivantimab.
The CRL was issued due to observations made during a pre-approval inspection at a manufacturing facility. However, the letter does not pertain to the product's formulation or its previously submitted efficacy and safety data, and no additional clinical studies have been requested by the agency.
The FDA's concerns do not affect the currently approved intravenous formulation of RYBREVANT (amivantimab-vmjw). H.C. Wainwright believes these developments are unlikely to have a significant impact on Halozyme or the future success of the subcutaneous formulation of amivantimab. The firm's confidence is based on the absence of a request for further clinical studies and the assumption that the manufacturing issues can be resolved swiftly.
Furthermore, Halozyme's track record of securing regulatory approvals for its Enhanze-coformulated products supports the firm's optimistic outlook. The company's strong performance is reflected in its impressive 21.35% revenue growth and healthy gross profit margin of 73.65%. H.C. Wainwright suggests that Halozyme's experience bodes well for a timely resolution of the current manufacturing facility issue.
In light of the FDA's CRL to Johnson & Johnson and the implications for Halozyme, H.C. Wainwright stands by its Buy rating and 12-month price target of $68 per share. The analyst firm underscores the point that the CRL's focus on manufacturing facility matters should not impede the progress of Halozyme's associated products.
In other recent news, Halozyme Therapeutics reported substantial increases in third-quarter revenues and earnings, exceeding market expectations. The company's revenues reached $290 million, primarily driven by royalty-based income from its ENHANZE technology, while net earnings stood at $137 million, equating to $1.05 per diluted share.
Following these results, Halozyme's full-year 2024 revenue guidance was revised upwards to between $970 million and $1.02 billion, anticipating an increase in royalty revenues.
In a separate development, Halozyme withdrew its proposal to acquire Evotec AG (ETR:EVTG), a European drug discovery and development company, after facing resistance from Evotec's management. Despite this, H.C. Wainwright maintained its Buy rating for Halozyme, viewing the outcome as neutral and expressing confidence in the company's future growth prospects.
Piper Sandler, on the other hand, adjusted its stock price target for Halozyme to $52.00, retaining a Neutral rating. The firm cited Halozyme's strong third-quarter performance and potential future impact of Wave 3 products as reasons for the adjustment.
Despite projections of flat product sales in 2024, Halozyme anticipates maintaining strong momentum into 2025, supported by a robust pipeline and market expansion strategies. The company's management expressed confidence in securing new partnerships and leveraging its robust patent portfolio for future growth. These are the recent developments for Halozyme Therapeutics.
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