Pfizer’s Backing Spurs Halozyme's Growth

Josef Ray is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.

An upcoming partnership with pharmaceutical giant Pfizer undoubtedly boosted the reputation of Halozyme Therapeutics (NASDAQ: HALO), allowing it to regain market standing via its proprietary Enhanze technology. Intraday trading this past Friday, December 21, saw shares rise around thirty percent, and prices grow by almost the same percentage when it went up by $1.49 and closed at $7.01, making it the day’s top-dollar gainer.

The licensing agreement will see the collaboration of the two corporations on the development and subsequent mass-market distribution of subcutaneous biologics; essentially the introduction of medication, etc. into the human body via injections into the skin as opposed to conventional IV drips and similar, older methods of medication. The agreement will give Pfizer (NYSE: PFE) a license to globally commercialize products using Enhanze; products that combine the rHuPH20 enzyme and biologics Halozyme developed for a maximum of half a dozen medical applications. The latter has received an eight-million dollar initial payment from the former, and is set to collect $507 million once Pfizer meets milestones set for product development, regulations, and sales, in addition to royalties for use of said technology. Halozyme stocks, as of the closing of the last trading day, are now at a two-and-a-half month high.

This proves to be welcome news for Halozyme investors, who may have been put off by the corporation’s lackluster performance and its seeming lethargy following what could have been groundbreaking deals with medical companies Roche Holding (ADR) (PINK:RHBBY) and Baxter International (NYSE: BAX). Purported safety concerns with the technology may have also thrown off shareholders, who are now likely to be pacified and encouraged by the Pfizer’s backing towards the partnership.

Pfizer has, as of yet, not confirmed which products will utilize Enhanze, but pundits forecast the collaboration’s focus on follow-on biologics, or generic variants of biotech drugs. If this pushes through, government approval may follow at a rate much like that of generic drugs. Notably, these drugs would, due to ease of use encouraging proper self-medication, further cement Pfizer and Halozyme’s respective footholds in the biotech/medical industry and augment the strong standing Halozyme currently as a stock market player.

Halo’s current stock price of $7.01 also has the possibility of shooting up to a hefty $8 and shares potentially trading in the double digits, especially as it had also partnered with Viropharma (NASDAQ: VPHM), in addition to Roche, Baxter, and the aforementioned Pfizer. The year-end should see Halo thriving and closing strong, despite the apparently weak opening it had, edging in at less than $6.5 at the start of Friday’s trading day – a sharp gap sparked by its climb in the earlier part of the trading day. Main partner Pfizer, on the other hand, saw share prices drop by about a third of a dollar, closing at $25.08. Roche’s stock price steadily grew by 0.86% on Friday despite opening slow at about $50.5 and ended that trading day at $51.34. Viropharma was not as fortunate, taking a loss of 1.82% and closing at a sluggish $22.75 from more than $23 the previous trading day.

Halozyme Therapeutics develops commercial products that focus on the treatment of diabetes, cancer, dermatological conditions, and forms of drug delivery. It fundamental product range works on the extracellular matrix, and is built on intellectual property that’s on the cutting edge of biologic dispersion and absorption.

JosefRayDagatan has no positions in the stocks mentioned above. The Motley Fool has no positions in the stocks mentioned above. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. Is this post wrong? Click here. Think you can do better? Join us and write your own!

blog comments powered by Disqus