Halozyme downgraded to Neutral from Buy at Goldman Sachs

Goldman Sachs downgraded Halozyme Therapeutics to Neutral from Buy with a price target of $45, up from $43. The shares have recently underperformed due to uncertainty introduced by Centers for Medicare and Medicaid Services’ proposed implementation of the Inflation Reduction Act on the company’s business model, the analyst tells investors in a research note. The firm views the most recent CMS guidance as supportive of its view that Halozyme’s co-formulation products will be subject to their own negotiation timelines under the “fixed dose combination” protocols, but says full certainty may not come until the first Enhanze partnered product comes up for negotiation. In addition, Goldman takes a positive view on the company’s pending diversification of its royalty revenue stream via the recent approval of Vyvgart Hytrulo and anticipated launches of additional Wave 3 products in the 2023-2025 time frame, but it does not expect these launches to drive an inflection in shares.