Roche Says No Safety Issues With Halozyme-Partnered Drug: PropThink Exclusive
(Thomson Reuters ONE) -
Sources at Roche (OTCQX: RHHBY) told PropThink on Wednesday that products being
jointly developed with Halozyme Therapeutics (NASDAQ: HALO) will not face issues
seen with HyQ, an intravenous immunoglobulin (IVIg) candidate being jointly
developed with Baxter International (NYSE:BAX), or ViroPharma's (NASDAQ:VPHM)
Halozyme-enhanced formulation of Cinryze.
Roche said that its products were formulated using a newer generation of
Halozyme's enzyme technology and that regulators had not communicated the
concerns shared by Baxter and ViroPharma. The Swiss pharmaceuticals giant
conducted thorough toxicology studies that prove these issues will not apply to
its products since no albumen is contained in the Roche formulations.
Baxter's and ViroPharma's product-candidates are being evaluated by the same
division of the FDA (The Blood Products Division), which suggests that the
request for additional animal data may just be a quirk of the reviewers. Another
division of the FDA (CDER) has conducted a separate analysis on the antibody
issue, and has concluded that it will not be requiring additional data. The
Roche/Halozyme product candidates are being developed for cancer indications
where theoretical concerns over fertility and child development are less of an
issue.
Baxter's 'HyQ' is formulated with Halozyme's enzyme technology to create a
potential best-in-class self-injected IVIg product, which could achieve billion-
dollar sales, if approved. Baxter said that the FDA issued a complete response
letter, or CRL, asking for additional pre-clinical data. ViroPharma received a
similar request from the FDA, who halted clinical development in the interim.
Notwithstanding, Baxter, who voluntarily withdrew patients from ongoing trials,
said that the company will resubmit a new drug application (NDA) for HyQ
following additional discussions with the FDA. Investors should view this as a
strong indication that Baxter/Halozyme have the preclinical data necessary for a
resubmission of their approval package.
Shares of Halozyme were off by more than 54% in after-hours trading after
investors translated the FDA's request for more transparency on the formation of
antibodies underlying Halozyme's technology into complete platform decay. This
interpretation was oversubscribed to, which implies a gross overreaction by the
market and a potential opportunity to acquire Halozyme's shares at a discount to
their intrinsic value.
Wall Street analysts, who have an average $12 price target on Halozyme,
attribute approximately $7 per share to products co-developed with Roche.
Discounted cash flow estimates suggest that there is significant upside even if
issues with HyQ or Cinryze persist and programs under Roche are the only
remaining assets.
Insider buying furthers the idea that concerns over Halozyme's platform
technology has been blown out of proportion - management and members of the
board continued to acquire Halozyme shares on the open market even after Baxter
was handed an initial rejection letter by the FDA for HyQ in April. At prices
quoted in after-hours trading on Wednesday, investors are assigning virtually no
value to Halozyme's pipeline of products. While the risk in Halozyme has
inevitably increased, shares grossly overreacted to the FDA's request for
additional data. Speculative investors might consider owning Halozyme at these
depressed levels as a call option, on the premise that the Roche assets remain
viable and the company's pipeline retains substantial value.
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decision with respect to securities covered herein. You should assume that as of
the publication date of any report or letter, PropThink, LLC (possibly along
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covered herein that is consistent with the position set forth in our research
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a long position in Halozyme at any time.
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Source: PropThink via Thomson Reuters ONE
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Datum: 02.08.2012 - 08:16 Uhr
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News-ID 171051
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