Will Higher Royalties From Partners Fuel HALO's Growth in H2 2025?

Halozyme Therapeutics HALO has collaboration agreements with large pharma companies, which use its ENHANZE technology for the development of subcutaneous (SC) formulations of their various approved drugs. Halozyme now has eight marketed partnered drugs based on this technology, including the subcutaneous formulation of J&J’s JNJ Darzalex and Roche’s RHHBY Phesgo.

Per the agreements, these companies have been granted worldwide license rights to develop and commercialize their products using ENHANZE technology. These deals generate royalties on sales of marketed drugs, milestone payments and annual license fees, which comprise Halozyme’s top line.

Halozyme’s top line also comprises product sales, royalty payments from Roche for Phesgo and J&J for SC Darzalex as well as revenues under collaboration agreements related to its Enhanze technology with some large pharma companies. Total revenues in the first half of 2025 were driven by higher royalty payments from Roche for Phesgo and J&J for SC Darzalex (daratumumab), as well as argenx’s Vyvgart Hytrulo. Revenues from royalties rose 52.3% year over year to $373.8 million during the first half of 2025.

Halozyme is gearing up to report its third-quarter results on Nov. 3.

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. Our model estimates Halozyme's revenues from royalties to increase at a CAGR of 23.2% over the next three years.

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.

For 2025, Halozyme projects total revenues in the range of $1.28 billion to $1.36 billion. Royalty revenues are anticipated in the range of $825-$860 million.

HALO's Price Performance, Valuation and Estimates

Year to date, shares of Halozyme have rallied 37.6% compared with the industry’s rise of 10.5%. The stock has also outperformed the sector and the S&P 500 during the same time frame, as seen in the chart below.

From a valuation standpoint, Halozyme is trading at a premium to the industry. Going by the price-to-sales (P/S) ratio, the company’s shares currently trade at 6.93, higher than 2.28 for the industry. The stock is trading below its five-year mean of 8.43.

The Zacks Consensus Estimate for 2025 earnings per share (EPS) has increased from $6.01 to $6.17 over the past 60 days. During the same time frame, EPS estimates for 2026 have moved up from $7.48 to $7.62.

HALO's Zacks Rank

Halozyme currently carries a Zacks Rank #3 (Hold). 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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