Halozyme Therapeutics Inc. shares jumped Friday after the biopharmaceutical company said it received a positive opinion from a European panel for one of its treatments.
THE SPARK: Halozyme and Baxter International Inc. said Friday the European Medicines Agency's Committee for Medicinal Products for Human Use granted a positive opinion for the use of HyQvia as a replacement therapy for adult patients with primary and secondary immunodeficiencies.
THE BIG PICTURE: The immune system normally protects the body from bacteria, viruses, fungi and other pathogenic microorganisms that can cause infectious diseases. If someone suffers from immunodeficiency, part of the body's immune system is missing or does not function properly, making them more likely to suffer infections and it may take longer to recover from infections.
When a defect in the immune system is inherited, it is called primary, or inherited, immune deficiency. Secondary immunodeficiencies develop as a result of a variety of conditions, such as some forms of leukemia, metabolic disease or malnutrition. Burns or severe infection can also cause defective immune function and poor antibody response
THE ANALYSIS: While investors drove up the stock Friday, Wedbush analysts Gregory Wade, David Nierengarten and Christopher Marai reiterated a "Neutral" rating on the company's shares.
The analysts said in a research note that HyQvia does not represent a significant opportunity to Halozyme and it represents only part of Baxter's $1.4 billion in annual antibody therapy sales worldwide. They noted that Halozyme's royalty on the drug's sale is only 5 percent. As a result, they said they don't see much more than $1 per share in value to this product for the company.
SHARE ACTION: Shares of Halozyme jumped more than 31 percent to $6.89 in late trading. Its stock remains in the middle of its 52-week trading range of $3.86 to $13.50. Baxter's shares rose 74 cents, or 1 percent, to $70.80.