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Why Halozyme Therapeutics Inc. Rose 76% in 2015

By Brian Feroldi - Jan 9, 2016 at 1:39PM

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It was a banner year for the human enzyme specialist.

Halozyme Therapeutics ( HALO -0.55% ) had a seemingly endless stream of good news for its investors in 2015, causing its shares to soar 76% higher during the year, according to data from S&P Capital IQ.

HALO Chart

Halozyme had quite a few highlights this year:

  • A global collaboration and license agreement with AbbVie ( ABBV 0.72% ) provided Halozyme with an initial $23 million payment and could be worth up to $130 million more if milestones are met. AbbVie also agreed to pay Halozyme royalties if products are ultimately commercialized.
  • A clinical collaboration agreement with Eisai, a Japanese pharmaceutical company, to study its drug eribulin mesylate in combination with Halozyme's investigational drug PEGPH20 as a potential treatment for first-line HER2-negative metastatic breast cancer.
  • The first clinical dosing of a patient in a phase 1 trial that combined Rivipansel, one of Pfizer's ( PFE 1.39% ) experimental compounds, with Halozyme's Enhanze platform. Given that Pfizer is currently also running a phase 3 study testing Rivipansel as a potential treatment for individuals hospitalized with vaso-occlusive crisis of sickle cell disease, the odds look favorable that this combination will progress through the early clinical trials. 
  • A global collaboration deal with Eli Lilly ( LLY 0.27% ) to develop new products that utilize Halozyme's Enhanze platform brought in an immediate $25 million in fresh capital, with the potential to earn up to $800 million more if milestones are met.

Given that the company has successfully signed up big pharma companies like AbbVie, Pfizer, Eli Lilly, and more as partners, it's clear that the Enhanze platform offers a lot of value.

It also continues to show solid clinical progress with its lead compound, called PEGPH20, which is being tested in a variety of cancer indications at the moment. Analysts believe that, if all goes well, it could eventually produced peak sales of $1.5 billion for the drug, which is a huge number for a company that is currently valued below $2 billion.

2015 was a terrific year for Halozyme Therapeutics, and since the company continues to play well with others, I also continue to think it's a solid choice going forward for the speculative portion of your portfolio.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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Stocks Mentioned

Halozyme Therapeutics, Inc. Stock Quote
Halozyme Therapeutics, Inc.
$33.06 (-0.55%) $0.18
Pfizer Inc. Stock Quote
Pfizer Inc.
$52.12 (1.39%) $0.72
Eli Lilly and Company Stock Quote
Eli Lilly and Company
$244.99 (0.27%) $0.67
AbbVie Inc. Stock Quote
AbbVie Inc.
$122.75 (0.72%) $0.88

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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