Halozyme Therapeutics Inc. (NASDAQ: HALO)

Halozyme Therapeutics Inc. (HALO) is a biopharmaceutical company developing and commercializing products targeting the extracellular matrix (Matrix) for the endocrinology, oncology, dermatology and drug delivery markets. The Company’s products are based on the property covering the family of human enzymes known as hyaluronidases. The Company has two marketed products: HYLENEX, a product used as an adjuvant to increase the absorption and dispersion of other injected drugs and fluids, and Cumulase, a product used for in vitro fertilization (IVF). The Company has partnerships with F. Hoffmann-La Roche Ltd. and Hoffmann-La Roche Inc. (Roche), to apply Enhanze Technology to Roche’s biological therapeutic compounds for up to 13 targets, and with Baxter Healthcare Corp. (Baxter), to apply Enhanze Technology to Baxter’s biological therapeutic compound, GAMMAGARD LIQUID.

The Company was founded in 1998 and is based in San Diego, California.

Source: Reuters.com, SEC Filings.

Financial Summary

HALO recently announced it plans to report fourth-quarter and annual 2009 financial results on Friday, March 12, 2010, before the open of the financial markets. The announcement will be followed by a conference call with the investment community at 8:00 a.m. PST (11:00 a.m. EST), which will be simultaneously broadcast over the Internet. Management will discuss the financial results and highlights for the fourth quarter 2009 and provide a product pipeline update.

The net loss for the third quarter of 2009 was $13.9 million, or 16 cents per share, compared with a net loss for the third quarter of 2008 of $10.9 million, or 14 cents per share. Net loss for the nine months ended September 30, 2009, was $45.7 million, or 54 cents per share, compared with a net loss of $31.8 million, or 40 cents per share for the comparable period last year.

Revenue for the third quarter of 2009 was $3.0 million, compared to $2.5 million for the third quarter of 2008. Revenues under collaborative agreements for the third quarter of 2009 were $2.6 million, compared to $2.2 million for the third quarter of 2008. Revenues under collaborative agreements in the third quarter of 2009 primarily consisted of the amortization of license fees and a milestone payment received from Baxter and Roche of $1.8 million and research and development reimbursements from Baxter and Roche of $0.8 million.

Research and development expenses for the third quarter of 2009 were $13.2 million, compared to $10.1 million for the third quarter of 2008, primarily due to an increase in clinical trial expenses as a result of higher spending on the ultrafast insulin program, and an increase in research and development headcount.

Selling, general and administrative expenses for the third quarter of 2009 were $3.7 million, compared to $3.5 million for the third quarter of 2008.

Cash and cash equivalents totaled $77.6 million as of September 30, 2009, compared with $63.7 million as of December 31, 2008, and $72.5 million as of September 30, 2008. During the third quarter of 2009 the company received cash of $2.8 million related to warrant exercises. Net cash burn for the third quarter of 2009 was $11.6 million.

Source: Reuters.com, SEC Filings.

Analyst Consensus

This is the consensus forecast among 7 polled investment analysts. Against the Halozyme Therapeutics Inc. company.

The 5 analysts offering 12-month price targets for HALO have a median target of 10.00, with a high estimate of 14.00 and a low estimate of 9.00. The median estimate represents a 50.83% increase from the last price of 6.63.

Source: www.ft.com

Consensus Estimates Analysis

Source: http://www.reuters.com/finance/stocks/financialHighlights?symbol=HALO.W

Investment Highlights

HALO in late January announced the signing of an exclusive, worldwide, contract research collaboration agreement with BioAtla LLC for the development of novel high throughput recombinant protein screening libraries directed against targets in oncology, aesthetic dermatology and inflammation. During the initial three-year term of the research collaboration, HALO will receive exclusive worldwide commercial rights from BioAtla to Conditionally Active Biologics (CABs) that arise from the agreement. The objectives of this program are to generate novel CABs that interact with their targets under highly specific, predefined conditions in the body. HALO will leverage its expertise in the extracellular matrix and experience targeting unique tissue microenvironments to identify, generate and develop biologics directed against both novel and existing targets. BioAtla will apply its proprietary gene synthesis and high throughput expression screening expertise in the library generation and screening of protein analogs with evolved specificity and activity.

Source: http://www.halozyme.com/

Technical Analysis

Source: http://stockcharts.com

HALO’s recent volatility has been greater than normal. This is evidenced by the increased distance between the upper and lower Bollinger Bands. These bands measure volatility using standard deviation and a large width is due to high volatility. Additionally, HALO is trading above its upper Bollinger Band. Relative to recent price action, the stock is currently overextended and due for either a pause or retracement.

The MACD for HALO currently indicates a strong bullish signal for two reasons. First, the MACD is above the signal line, a 9-day moving average. Second, the MACD is above 0, which implies that the underlying moving averages are trending higher.

Comparative Analysis

Source: Thomson Financial

Insider Trading Activity

Source: Yahoo Finance

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