Halozyme Q4 Loss Narrower-than-Expected, Revenues Up – Analyst Blog
Halozyme Therapeutics, Inc. HALO reported a loss of 4 cents per share in the fourth quarter of 2014, narrower than the Zacks Consensus Estimate of a loss of 9 cents and the year-ago loss of 19 cents per share.
Revenues for the reported quarter came in at $30.4 million, significantly above the year-ago revenues of $12.5 million and the Zacks Consensus Estimate of $23 million.
Full-year net loss decreased 24.3% to 56 cents per share. Full-year revenues increased 37.5% to $75.3 million.
Results were boosted primarily by the receipt of royalty revenues and licensing fees. The latter was received under a deal with Janssen Biotech, a Johnson & Johnson JNJ company.
The company generated revenues of $5.9 million and $4.1 million from the sale of rHuPH20 and Hylenex, respectively.
The company earned $4 million from royalties owing to the increasing sales of Herceptin SC. The company also earned $16.2 million from collaborations including $15 million licensing fees from Janssen.
In the fourth quarter, Baxter International BAX launched HyQvia in the U.S., which posted sales of approximately $35 million. Baxter expects HyQvia sales of $100 million in 2015. Halozyme has a licensing agreement with Baxter.
R&D expenses decreased 5.7% to $19.7 million. SG&A expenses also decreased 10.7% to $8.4 million. The decrease was primarily due to a decline in expenses related to the company’s diabetes program.
Halozyme announced that it expects to discuss interim results from the ongoing phase II Study 202 (evaluating PEGPH20 in combination with gemcitabine and Abraxane in patients suffering from stage IV metastatic pancreatic cancer) with the FDA in the first quarter of 2015. The company will also discuss the benefit:risk of PEGPH20 and its plans to start a registration study. Positive feedback from the FDA would allow the company to start the registration study in the fourth quarter of 2015 or the first quarter of 2016.
Halozyme is also evaluating PEGPH20 in a phase Ib/II study (PRIMAL) as a second-line therapy for patients with locally advanced and metastatic non-small cell lung cancer. The company expects to complete the phase Ib part of the study in the second half of 2015. The company also plans to initiate a study to evaluate PEGPH20 in combination with a PD-1 inhibitor.
Halozyme expects net revenues in the range of $85 million to $95 million reflecting higher royalty revenues. Operating expenses are expected in the range of $145 million to $155 million, representing a slight increase over 2014.
The company anticipates first quarter 2015 royalty revenues in the range of $6 million to $7 million given the new country launches and sales growth of its partnered products (MabThera SC, Herceptin SC and HyQvia).
Halozyme currently carries a Zacks Rank #3 (Hold). A better-ranked stock in the health care sector is Cambrex Corp. CBM, sporting a Zacks Rank #1 (Strong Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report