Wedbush Says HALO Is "No Fallen Angel"

In a report published by Wedbush, Halozyme Therapeutics

has been under pressure, trading in the $6 range. Wedbush said that it sees 55-68% potential upside for the stock on the way to its $10 fair value estimate. “Maintaining our OUTPERFORM rating and our $10/share fair value. We arrive at our fair value estimate of $10/share by splitting the difference between our 2014 and 2015 valuations since it appears to us the Street is not yet valuing Halozyme off of 2015 numbers. We arrived at our 2014 and 2015 numbers by applying a 15x multiple to our estimate of 2015 Baxter and Roche royalties, and discounting this back by 3 and 4 years, respectively, at 20% per year, while taking into account reduced dilutive effects from future financings. At present, we prefer to ascribe no value to the company's insulin and PEGPH20 programs, and note that investors could realize significant upside from present levels if the former is partnered or the latter has positive clinical data.” Halozyme Therapeutics closed yesterday at $6.06.