After inking a deal to acquire small-cap auto-injector specialist Antares Pharma Inc. (
Speaking on a conference call, CEO Helen Torley said the company is open to adding assets “over time” if they fit with its existing business in endocrinology and urology.
Since the purchase was announced last week, Atares shares have jumped about 50% to $5.57, a price at which it appears to be fully valued given downgrades by five brokerage companies that cited the unlikelihood of competitive bids.
Halozyme’s mainstay is it under-the-skin delivery system, which is used by some of the biggest names in the pharmaceutical industry, including Johnson & Johnson (
JNJ, Financial), GlaxoSmithKline PLC (GSK, Financial), Roche Holding AG (RHHBY, Financial), Bristol-Myers Squibb Co. (BMY, Financial) and Pfizer Inc. (PFE, Financial). That will expand since Antares already has licensing deals in place with Teva Pharmaceutical Industries Ltd. (TEVA, Financial), Pfizer and other companies.
The company hopes to combine its Enhanze technology with Antares’ to develop a rapid subcutaneous drug delivery that can be used to administer larger volumes of drugs that currently have to be given intravenously.
The acquisition of Atares signifies Halozyme is going back to the future. Prior to 2019, the company had a drug development progam, but got out of that business when its late-stage cancer drug failed in clinical trials. Now, with Antares, Halozyme obtains three commercial drugs, an equal number of internal development programs and a sales force of 122.
Since 2019, the biotech has been funded on partner revenues and sales-related royalties.
In the past year, Halozyme’s stock has declined more than 15% to $42.70, but has gained more than 260% over the past five years.
The company had fourth-quarter 2021 adjusted earnings of 42 cents per share, which beat the Zacks consensus estimate of 40 cents. Revenue declined more than 16% year over year to $102 million, mainly because of declines from collaboration agreements and product sales, which were partially offset by strong royalty payments, especially from Johnson & Johnson.
The company expects total revenue in 2022 to be between $530 million and $560 million, up 20% to 26% from 2021.
Seven of 10 analysts rate Halozyme a buy, with an average 12-month target price of $48.25, a high of $62 and a low of $19, according to Yahoo Finance.