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Halozyme Therapeutics, Inc. Message Board

  • g_noh g_noh Jan 18, 2013 5:19 PM Flag

    Fansteman, Bikesurfer, and Soho-riots - Part II

    I took my initial position in HALO today. I must confess my initial inclination was just to play the upcoming EMA decision on Herceptin, buying both calls and puts to participate in what's likely to be a significant move in one direction or the other. Many days of due diligence later, however, including a valuable education from you guys, I've positioned myself to perhaps be a long-term investor. The key near-term hurdle is clearly the EMA decision. A positive decision could set the stage for a string of favorable developments and catalysts for the stock.

    Sentiment: Buy

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    • G_noh, I'm also viewing this as a long term position, especially now that Pfizer has given plenty validation regarding HALO's Enhanze platform by partnering up with the company. Down the road, if the company's technology becomes a proven better alternative to IV infusion for a variety of drugs from many pharmas then I really see a big pharma out there, probably Pfizer itself, saying "I think we should really buy this company outright".

      Sentiment: Strong Buy

      • 1 Reply to bikesurfer
      • I obviously expect Herceptin SC to get approved too but I would also make the following points for some perspective.... 1) Pfizer only paid $8 million up front, merely a rounding error for the company, so not a gigantic commitment or endorsement. 2) Given Halo's need to work with as many pharma and biotech companies as possible, it's probably going to stay independent for a long time; a takeover is not a consideration for me. 3) I don't think Roche's decision to file it's second product with the EMA adds any significant insight. I think the timing simply reflects the fact that the studies were completed, the data analyzed, and the application ready for filing. It's highly unlikely that the EMA gave Roche a green light of any sort. 4) Wall Street analysts frequently don't know all that much more than the average interested observer. In fact, their revenue and earnings estimates, as well as their price targets, often mean very little, especially when it comes to developmental stage biotechs. All in all, my long experience with FDA and EMA decisions suggest it's usually best not to take anything for granted and not to read too much into individual developments. In other words, it never hurts to hedge. I bought June in-the-money call options and will exercise if all goes well. Indeed, I'll probably add to my position soon after the EMA ruling.

        Sentiment: Buy

    • EMA approval can be taken as a given, if you ask me. I expect it in Q1/13. The question - again - will be the labelled indications and the safety section of the SPC.

      Why am I so confident? (1) A company like Roche wouldn't have filed a second product with the same technology (MabThera SC) half way into the Herceptin SC review process if they had come across real major stumbling blocks related to the ENHANZE technology. In other words: Roche appears certain to push this first file across the finishing line, (2) Having deep inside knowledge of the files' progress HALO signed the Pfizer deal. If they would have deliberately withheld any serious insights from the on-going regulatory reviews in the DD, this deal could be called null and void by Pfizer. In other words: No such issues exist with the files under review.

      I take these as two extremely re-assuring endorsements from two very serious big pharma co's.


    • Nice. Two major reasons why I took a position in HALO a little while back: (1) like soho_riots points out, HALO has "many bullets in its gun" and (2) reading that Kirk does serious scientific and financial due diligence before taking a position in a biotech. Yeah, a positive EMA decision will definitely start the train moving forward and insulin pumps using the FDA approved product Hylenex should steadily make it gain momentum.

      Sentiment: Strong Buy

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