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Halozyme Falls on Phase II Study Halt

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Halozyme Therapeutics, Inc.’s (HALO) shares fell 27.3% after the company announced its decision to temporarily halt patient enrollment and dosing of PEGPH20 in a phase II study (Study 202).

Halozyme is evaluating PEGPH20 as a first-line therapy for patients suffering from stage IV metastatic pancreatic cancer. Patients enrolled in Study 202 so far received a combination of Abraxane (nab-paclitaxel) and Gemzar (gemcitabine) either with or without PEGPH20. Patient enrolment was expected to complete in the second half of 2014.

Halozyme’s decision to halt the study was based on the recommendation of an independent Data Monitoring Committee (:DMC), which is currently assessing the data obtained from the study. The DMC indicated a possible difference in the rate of thromboembolism (movement of blood clot from the original source to another blood vessel blocking blood flow in the process) between the patient groups treated with or without PEGPH20.

The company said that it will furnish additional information to the DMC, which will help the committee to complete data evaluation.

Our take

The temporary halting of the phase II study due to safety signals is a matter of concern and creates uncertainty regarding the future of this program. We note that Halozyme had plans to start a study on PEGPH20 for a second solid tumor setting in the fourth quarter of 2014.

Currently, we have low visibility as to when and whether Study 202 will resume. We expect investor focus to remain on updates regarding the status of this program.

Halozyme holds a Zacks Rank #3 (Hold). Some better-ranked stocks in the biotech sector include Alkermes plc (ALKS), Alexion Pharmaceuticals, Inc. (ALXN) and Amgen Inc. (AMGN). All these stocks carry a Zacks Rank #1 (Strong Buy).

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