On Friday, Leerink Partners maintained a Market Perform rating on Halozyme (NASDAQ:HALO) Therapeutics (NASDAQ: HALO) stock, following the company's announcement of an expanded ENHANZE partnership with ARGX. The collaboration builds on existing projects, potentially adding four new pipeline candidates, contingent on their successful development.
Despite this expansion, the financial terms are notably less favorable than the original 2019 agreement, with estimated potential royalty rates approximately half of those for Vyvgart™, assuming launches post-ENHANZE's loss of exclusivity in 2029.
The expanded partnership with ARGX includes work on VYVGART (efgartigimod, FcRn) and empasiprubart (C2), and aims to strengthen Halozyme's pipeline with additional candidates. The analyst from Leerink Partners views the development positively, noting the potential growth in Halozyme's pipeline if the drugs are successful. However, the analyst also pointed out that the economic terms of the new agreement are less lucrative compared to the initial deal made in 2019.
In addition to the partnership news, Halozyme's stock performance on Monday was influenced by the Centers for Medicare & Medicaid Services' (CMS) guidance on the Inflation Reduction Act (IRA) for 2027 drug negotiations. This guidance is expected to have an impact on the pharmaceutical industry, as it pertains to drug pricing negotiations.
Leerink Partners' decision to maintain a Market Perform rating on Halozyme reflects a cautious stance, acknowledging the potential pipeline expansion while also considering the reduced economic benefits of the latest agreement and the broader implications of the CMS guidance. The firm's analysis indicates a watchful approach to the stock's future performance based on these developments.
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