TD Cowen maintained a positive stance on Halozyme (NASDAQ:HALO) Therapeutics (NASDAQ:HALO), reiterating a Buy rating with a $70.00 price target. The firm addressed recent concerns regarding the potential decrease in royalties for Vyvgart, stating that worries are overstated. According to the firm, the market consensus already accounts for two indications of Vyvgart, with the potential for eight to ten more over time.
The firm's analyst emphasized that Halozyme's valuation benefits from the possibility of adding five additional drugs, which are currently viewed as an upside. The analyst argued that the market's intense focus on the anticipated drop in Vyvgart royalties fails to consider the significant value of four new assets likely to enhance Halozyme's pipeline.
Halozyme's stock has experienced a pullback as investors reacted to the prospect of reduced royalties from Vyvgart. The analyst from TD Cowen suggested that this reaction might be excessive, given that the anticipated stepdown in royalties for Vyvgart is expected to remain in the "mid-single digit" range.
Despite the concerns over Vyvgart royalties, TD Cowen's analysis suggests that the broader potential of Halozyme's drug pipeline is not being fully appreciated by the market. The firm believes that the current valuation of Halozyme does not fully reflect the positive impact of the additional drugs that are likely to be part of the company's product offerings in the future.
TD Cowen's reaffirmed Buy rating and $70.00 price target for Halozyme Therapeutics reflects confidence in the company's future growth prospects, despite the near-term concerns over Vyvgart royalties. The firm advises that the current market valuation underestimates the potential contribution of new assets to Halozyme's pipeline.
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