Halozyme stock resumes coverage at Goldman Sachs with Neutral rating

Investing.com - Goldman Sachs has resumed coverage of Halozyme Therapeutics (NASDAQ:HALO) with a Neutral rating and a $55.00 price target. The company, which has achieved a perfect Piotroski Score of 9 according to InvestingPro data, currently trades at an attractive P/E ratio of 14.6x while maintaining strong revenue growth of 25.7% over the last twelve months.

The investment bank cited uncertainty around how the Centers for Medicare and Medicaid Services (CMS) will address Halozyme’s Enhanze technology in upcoming drug pricing negotiations.

Goldman Sachs notes there is a "non-zero chance" that the final CMS guidance this fall may not clarify whether Enhanze coformulations will be included with base drugs during price negotiations, or might explicitly state they will be included.

The firm expects HALO shares to remain range-bound until greater clarity emerges, potentially extending beyond the fall timeframe.

Under a worst-case scenario where Enhanze formulations are negotiated alongside partner products, Goldman Sachs calculates approximately 6% downside to modeled royalty revenues, while warning of potentially greater impact if subcutaneous formulation becomes less attractive for future partners.

In other recent news, Halozyme Therapeutics has been added to the U.S. large-cap Russell 1000 Index, marking a significant milestone for the company. This inclusion reflects its standing among the largest U.S. securities based on market capitalization. Additionally, the European Commission has approved a subcutaneous formulation of Opdivo, developed in collaboration with Halozyme’s ENHANZE technology, for use in various adult solid tumors across the European Union and other regions. This approval follows the U.S. authorization of the same formulation, highlighting the global expansion of Halozyme’s technology.

In another development, Halozyme announced that argenx received European approval for VYVGART 1000mg, utilizing Halozyme’s ENHANZE technology, to treat chronic inflammatory demyelinating polyneuropathy. This marks a significant advancement in treatment options for CIDP patients. Analysts at TD Cowen have reiterated a Buy rating for Halozyme, suggesting that the company’s shares remain undervalued despite potential pricing impacts from regulatory changes. Similarly, H.C. Wainwright maintained a Buy rating, expressing confidence in Halozyme’s prospects following the recent regulatory approvals. These developments underscore the company’s expanding influence in the biopharmaceutical sector.

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