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Halozyme Therapeutics Inc. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: November 8, 2011 04:36PM

Halozyme Therapeutics Inc. (HALO) filed Quarterly Report for the period ended 2011-09-30. Halozyme Therapeutics Inc. has a market cap of $872.5 million; its shares were traded at around $8.42 with and P/S ratio of 64. Halozyme Therapeutics Inc. had an annual average earning growth of 24.8% over the past 5 years.



Highlight of Business Operations:

Product Sales – Product sales were $1.2 million for the three months ended September 30, 2011 compared to $98,000 for the three months ended September 30, 2010. The increase of $1.1 million was primarily due to the recognition of approximately $991,000 of deferred revenue in the three months ended September 30, 2011, related to API for Hylenex recombinant previously delivered to Baxter, because the earnings process related to these product sales was complete in the three months ended September 30, 2011. Based on the termination of the Hylenex Partnership in January 2011, we expect only product sales of API for ICSI Cumulase in future periods until Hylenex recombinant is reintroduced to the market. We expect to reintroduce Hylenex recombinant by the end of 2011.

Net Income (Loss) – Net income for the three months ended September 30, 2011 was $5.2 million, or $0.05 per basic and diluted common share, compared to a net loss of ($12.4) million, or ($0.13) per basic and diluted common share for the three months ended September 30, 2010. The increase in net income was primarily due to the recognition of deferred upfront license fees, deferred product-based payments and deferred product sales in connection with the termination of the Hylenex Partnership totaling $17.9 million in the three months ended September 30, 2011. In addition, we received a $3.0 million milestone payment under the ViroPharma Partnership that was earned in the three months ended September 30, 2011. The increase in net income was offset in part by an increase in operating expenses in 2011 as compared to the same period in 2010.

Product Sales – Product sales were $1.5 million for the nine months ended September 30, 2011 compared to $695,000 for the nine months ended September 30, 2010. The increase of $792,000 was primarily due to the recognition of $991,000 of deferred revenues related to API for Hylenex recombinant previously delivered to Baxter in the nine months ended September 30, 2011, because the earnings process related to these product sales was complete in July 2011 pursuant to the terms of the Transition Agreement between us and Baxter, signed on July 18, 2011. Based on the termination of the Hylenex Partnership in January 2011, we expect only product sales of API for ICSI Cumulase in future periods until Hylenex recombinant is reintroduced to the market. We expect to reintroduce Hylenex recombinant by the end of 2011.

Selling, General and Administrative – SG&A expenses were $12.2 million for the nine months ended September 30, 2011 compared to $10.5 million for the nine months ended September 30, 2010. The increase of $1.7 million, or 16%, was primarily due to increases of $797,000 in marketing expenses and $335,000 in legal expenses. In connection with our plan to reintroduce Hylenex recombinant by the end of 2011, we expect SG&A expenses to increase in future periods as we plan to increase sales and marketing activities.

Net Loss – Net loss for the nine months ended September 30, 2011 was $1.4 million, or $0.01 per common share, compared to net loss of $36.3 million, or $0.39 per common share for the nine months ended September 30, 2010. The decrease in net loss was primarily due to an increase in revenues under collaborative agreements resulting from $18.0 million of upfront license fees we received from the ViroPharma and Intrexon Partnerships and $11.0 million in milestone payments from Roche, Baxter and ViroPharma which were earned in the nine months ended September 30, 2011. The increase was also due to the recognition of deferred upfront license fees, deferred product-based payments and deferred product sales in connection with the termination of the Hylenex Partnership totaling $17.9 million in the three months ended September 30, 2011. The decrease in net loss was offset in part by an increase in operating expenses in 2011 as compared to the same period in 2010.

Read the The complete Report



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