What: Shares of Halozyme Therapeutics (NASDAQ:HALO), a biotechnology company focused on developing human enzymes, are down more than 10% today after the company released its third quarter earnings report.
So what: The biopharmaceutical company produced total revenue of $20.8 million during the quarter, which was up a strong 42% over the year ago period as the company managed to show growth in all four of its revenue segments.
Revenue growth from its royalty segment looked especially strong during the quarter, and its partnership with pharma giant Roche Holdings (NASDAQOTH:RHHBY) appears to be going particularly well. As a reminder, Roche's blockbuster breast cancer drug Herceptin has been combined with Halozyme's Enhanze technology into a drug called Herceptin SC, which allows patients to take Herceptin as a subcutaneous injection rather than only from an IV. The rollout continues to be going quite well -- Roche reported that the drug is now available in more than 44 different countries and that Herceptin SC sales now account for more than 35% of total Herceptin sales in the EU.
Despite the strong revenue growth, spending continues to grow as Halozyme works to build out its robust pipeline. That spending took a toll on its bottom line as the company reported a net loss of $24.5 million, $0.19 per share, during the quarter, which was a bit worse that then $0.15 per-share loss that Wall Street expected. The larger-than-expected loss appears to be the reason that the stock is trending lower today.
For the full year, Halozyme reaffirmed its guidance of revenue between $110 million to $115 million, with a cash burn between $20 million to $30 million. Given that the company has $123.7 million cash on its books, it remains in a strong financial position.
Now what: Despite today's drubbing, shares of Halozyme have been on fire since the start of the year, as they are up more than 65% during that time. Perhaps seeing a pullback after releasing results that came up short of expectations isn't such a surprise.
In the press release, Halozyme confirmed that it remains on track to complete enrollment of its Phase 2 study of PEGPH20 in pancreatic cancer by the end of the year, and it should have its Phase 3 study up and running by the end of the first quarter of 2016.
All in all I think this quarter looked just fine, so despite today's sell-off if you were bullish on Halozyme's stock before this report was released I see no reason to change your tune today.
Brian Feroldi has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.