Halozyme (HALO) Q4 Earnings Match Estimates, Revenues Lag
Halozyme Therapeutics, Inc. HALO delivered fourth-quarter 2023 adjusted earnings of 82 cents per share, which came in line with the Zacks Consensus Estimate. The company had recorded earnings of 48 cents per share in the year-ago period.
Total revenues increased 27% year over year to $230 million in the fourth quarter. The top line was driven by higher product sales and continued growth in demand for Xyosted (acquired from Antares Pharma in 2022) and higher royalty payments from J&J JNJ for subcutaneous Darzalex (daratumumab) and Roche’s RHHBY Phesgo.
Revenues, however, missed the Zacks Consensus Estimate of $235 million.
Shares of Halozyme have plunged 28.1% in the past year compared with the industry’s decline of 8.6%.
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Quarter in Detail
Halozyme’s top line comprises product sales, royalties and revenues under collaborative agreements.
Several companies use HALO’s Enhanze technology to develop a subcutaneous formulation of their currently marketed drugs. Halozyme now has six marketed partnered drugs based on this technology, including the subcutaneous formulation of J&J’s Darzalex and Roche’s Phesgo.
Royalty revenues totaled $122.1 million in the fourth quarter, up 15% from the year-ago quarter’s level. This was mainly due to robust demand for Darzalex and Phesgo. Royalty revenues accounted for nearly 53.1% of the company’s total revenues in the reported quarter. Royalty revenues missed our model estimate of $125.6 million.
Product sales came in at $79.6 million, about 30.1% higher than the year-ago quarter figure. HALO supplies API to ENHANZE partners like JNJ and RHHBY, contributing to product revenues as well as higher sales of the proprietary product Xyosted, which was acquired from Antares. Product sales beat our model estimate of $70.3 million.
Revenues under collaborative agreements were $28.4 million, increasing almost 97.7% from the year-ago quarter’s level. Collaboration revenues missed our model estimate of $45.6 million.
Adjusted EBITDA was $121.7 million in the fourth quarter, reflecting a 46.6% increase from the prior-year quarter.
Halozyme had cash, cash equivalents and marketable securities of $336 million as of Dec 31, 2023, compared with $483.3 million as of Sep 30, 2023.
Full-Year Results
For 2023, Halozyme generated revenues of $829.3 million, up 26% year over year.
For the same period, the company reported earnings of $2.77 per share, which increased 25.3% on a year-over-year basis.
2024 Guidance
Halozyme reiterated the guidance for full-year 2024 that it had provided in January 2024.
The company expects total revenues in the range of $915-$985 million in 2024, implying year-over-year growth of 10% to 19%.
Revenues from royalties are anticipated in the range of $500-$525 million.
Adjusted EBITDA is expected in the range of $535-$585 million, implying year-over-year growth of 26% to 37%.
The company expects adjusted earnings in the range of $3.55-$3.90 per share, indicating an improvement of 28% to 41% year over year. Halozyme’s earnings per share guidance does not consider the impact of potential future share repurchases.
In February 2024, Halozyme announced a third share repurchase program to buy back up to $750 million of the company’s common stock.
Halozyme Therapeutics, Inc. Price, Consensus and EPS Surprise
Halozyme Therapeutics, Inc. price-consensus-eps-surprise-chart | Halozyme Therapeutics, Inc. Quote
Zacks Rank & Stock to Consider
Halozyme currently carries a Zacks Rank #4 (Sell).
A better-ranked stock in the biotech sector is Exact Sciences Corp. EXAS, sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
In the past 60 days, estimates for Exact Sciences’ 2024 loss per share have narrowed from $1.22 to $1.15. In the past year, shares of EXAS have gained 2.4%.
Exact Sciences’ earnings beat estimates in each of the trailing four quarters. EXAS delivered an average earnings surprise of 44.21%.
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