Halozyme Rallies Almost 40% YTD: How Should You Play the Stock?

Halozyme Therapeutics HALO has witnessed steady growth in 2025, driven by growing investor confidence surrounding the company’s novel drug delivery technology, ENHANZE, for the subcutaneous (SC) administration of drugs.

Halozyme has collaboration agreements with large pharma companies that use its ENHANZE technology for the development of SC formulations of their various approved drugs. These agreements generate royalties on sales of marketed drugs, milestone payments and annual license fees, which comprise Halozyme’s top line.

Halozyme has eight marketed partnered drugs based on this technology, including the subcutaneous formulation of J&J’s JNJ Darzalex and Roche’s RHHBY Phesgo.

Let’s analyze Halozyme’s strengths and weaknesses to understand how to play the stock amid the price rally this year.

HALO Aims to Diversify With Elektrofi Deal

Earlier this month, Halozyme entered into a definitive agreement to acquire Elektrofi, a biopharmaceutical company known for its ultra-high concentration microparticle technology for biologics, branded as Hypercon.

Management believes that adding Elektrofi’s Hypercon technology will strengthen HALO’s drug delivery capabilities, broaden its technology platform and support long-term growth through licensing and royalty income.

The deal, expected to be closed in the fourth quarter of 2025, should help expand and diversify Halozyme’s business, supporting steady revenue growth through 2040. Royalty revenues from the Elektrofi partnership are expected to begin in 2030.

Under the agreement, Halozyme will pay Elektrofi $750 million upfront, plus up to three milestone payments of $50 million each, contingent upon regulatory approvals for three separate products.

HALO Thrives on ENHANZE Technology

Halozyme’s top line is being driven by higher royalty payments from Roche for Phesgo and J&J for SC Darzalex, among others.

Revenues from royalties rose 52.3% year over year to $373.8 million during the first half of 2025.

Total revenues in the first half of 2025 were driven by higher royalty payments from Roche for Phesgo and J&J for SC Darzalex as well as argenx’s Vyvgart Hytrulo. Management expects total revenues in the second half of 2025 to be driven by continued strong growth of J&J’s Darzalex SC, Roche’s Phesgo and argenx’s Vyvgart Hytrulo.

In 2025, the company expects its total revenues to be in the range of $1.28 billion to $1.36 billion, indicating growth of 26% to 33% over 2024.

Halozyme has two commercial proprietary products, Hylenex and Xyosted, with the latter acquired from Antares Pharma in 2022. Incremental sales from these products also boosted Halozyme’s revenues during the first half of 2025.

Although Halozyme’s revenue growth is fueled by rising royalty payments, its heavy reliance on partners for income through royalties and collaborations remains a challenge. In addition, many of its partnered products face strong competition in the United States, including from biosimilars.

HALO Stock Price, Valuation & Estimates

Year to date, shares of Halozyme have rallied 38.8% compared with the industry’s rise of 8.2%. The stock has also outperformed the sector and the S&P 500 during the same time frame, as seen in the chart below.

HALO Stock Outperforms Industry, Sector & S&P 500

From a valuation standpoint, Halozyme is trading at a premium to the industry. Going by the price-to-sales (P/S) ratio, the stock currently trades at 6.99 times trailing 12-month sales value, higher than 2.23 times for the industry. The stock is trading below its five-year mean of 8.76.

The Zacks Consensus Estimate for 2025 EPS has been stable at $6.18 over the past 30 days. During the same time frame, EPS estimates for 2026 have moved up from $7.57 to $7.61.

How to Play HALO Stock

We would suggest holding on to this Zacks Rank #3 (Hold) stock for now. Though it is trading at a premium compared to the industry, the recent price rally, buoyed by its strong performance in the first half of 2025 and the upbeat guidance for 2025, is likely to keep investors optimistic.

Royalties from partners should boost the top line, while incremental contributions from its proprietary products should also aid revenues during the second half of 2025.

The recent Elektrofi Deal should help the company diversify its drug delivery technology offerings and drive long-term growth. The company is also focused on signing new collaboration deals for ENHANZE technology.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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