SVB Securities downgrades Halozyme to Market Perform given growth uncertainty

As previously reported SVB Securities analyst David Risinger downgraded Halozyme to Market Perform from Outperform with a price target of $42, down from $61, based upon lower long-term forecasts and new DCF assumptions. The firm notes that Wednesday’s CMS news is negative for investor perception about the long-term value proposition of Halozyme’s technologies as it pertains to the Medicare portion of partner-product sales. The catalyst for SVB Securities’ downgrade was publication of CMS drug price negotiation regulations on March 15, which is potentially negative for the durability of the company’s Darzalex royalty streams and for the value of HALO-partnered products’ Medicare sales. In addition, SVB learned that a key EU Darzalex patent was invalidated.