Halozyme Therapeutics: A Breakthrough in CIDP and an Undervalued Gem in Biotech

On June 20, 2025, Halozyme Therapeutics (NASDAQ: HALO) announced a landmark achievement: the European Commission (EC) approved VYVGART® (efgartigimod alfa), developed in partnership with argenx, for the treatment of chronic inflammatory demyelinating polyneuropathy (CIDP) in adults. This approval, leveraging Halozyme's proprietary ENHANZE® drug delivery technology, marks a critical step forward in addressing a historically underserved disease and positions Halozyme as a leader in targeted therapies.

A Breakthrough in CIDP: Why This Matters

CIDP is a rare autoimmune disorder causing progressive nerve damage, with limited treatment options. VYVGART is the first and only targeted IgG Fc-antibody fragment therapy for CIDP, offering a novel mechanism of action after decades of reliance on corticosteroids or immunoglobulins. The EC's approval, based on data from the ADHERE clinical trial—the largest CIDP study to date—validates the drug's efficacy and safety.

The EU market, covering 27 member states plus Iceland, Norway, and Liechtenstein, represents a significant expansion for Halozyme. With an estimated 300,000–500,000 CIDP patients globally, VYVGART's subcutaneous formulation (administered via ENHANZE) simplifies treatment, reducing reliance on IV infusions and improving patient adherence. This approval not only strengthens Halozyme's partnership with argenx but also reinforces its ENHANZE platform as a gold-standard drug delivery tool.

Strategic Impact: Growth Through Partnerships and Pipeline Catalysts

Halozyme's value proposition extends far beyond CIDP. Its ENHANZE technology has been licensed to major pharmaceutical companies like Roche, Janssen, and Bristol Myers Squibb, enabling subcutaneous delivery of blockbuster drugs such as:
- Darzalex SC (multiple myeloma)
- Phesgo (breast cancer)
- Rybrevant SC (lung cancer)

The recent Q1 2025 financial results underscore this partnership-driven growth:
- Revenue surged 35% YoY to $264.9 million, fueled by 39% growth in royalty revenue to $168.2 million.
- Net income jumped 54% YoY to $118.1 million, with Adjusted EBITDA up 40% to $162 million.
- Halozyme raised its 2025 guidance, projecting $1.2–1.28 billion in total revenue (+18–26% YoY) and non-GAAP EPS of $5.30–5.70 (+25–35% YoY).

Undervalued Metrics: A Compelling Entry Point

Despite this strong performance, Halozyme remains significantly undervalued relative to peers. Key metrics include:
- P/E Ratio: 14.17 (vs. 30.81 historical average and peers like JNJ's 16.88 and LLY's 57.84).
- Forward P/E: 12.81, 54% below its 8-year average, signaling potential upside.
- Value and Growth Metrics: A VGM Score of A/B and B Value Style Score highlight its appeal as a value stock with growth catalysts.

The company's $747.9 million in cash and a $250 million share repurchase (under a $750 million program) further underscore management's confidence. With a Zacks Rank of #3 (Hold)—driven by near-term valuation—investors may find it a contrarian buy, especially with the EU approval unlocking new revenue streams.

Risks and Considerations

• Patent Litigation: Halozyme's lawsuit against Merck over its MDASE™ technology could impact future revenue.
• Regulatory Hurdles: While VYVGART's EU approval is a win, market adoption depends on reimbursement agreements.

Investment Thesis: Buy on Dip, Hold for Growth

Halozyme's multi-pronged strategy—expanding its ENHANZE platform, leveraging partnerships, and capitalizing on novel therapies like VYVGART—positions it for sustained growth. Its undervalued valuation and strong margin expansion (Adjusted EBITDA margins up to 61% in Q1 2025) make it a compelling play in the biotech sector.

Historical data supports this thesis: buying HALO on earnings announcement dates and holding for 20 trading days since 2020 has averaged an 8.78% return, with gains as high as 21.78% in 2021. However, performance is uneven—2020 saw a modest 2.61% gain and a 26.78% drawdown, underscoring the need for risk management. These results align with Halozyme's volatile biotech profile but highlight the potential rewards of disciplined, earnings-driven entry points.

For investors seeking high-potential, underappreciated names, HALO offers a rare combination of innovation, financial resilience, and geographic diversification. With the EU approval as a catalyst, now is an opportune time to consider a position—particularly if the stock remains undervalued relative to its peers and growth trajectory.

Recommendation: Buy for long-term growth investors, with a price target of $65–70 based on consensus EPS estimates and peer valuations.

This analysis combines Halozyme's clinical and commercial milestones with robust financials, making a clear case for its undervaluation and growth potential. The EU approval for VYVGART is just the beginning of Halozyme's next phase of innovation—and investors who act now may secure outsized returns.