What: Shares of Halozyme Therapeutics (HALO -0.58%), 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.
Image Source: Halozyme
Revenue growth from its royalty segment looked especially strong during the quarter, and its partnership with pharma giant Roche Holdings (RHHBY -1.15%) 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.
