Halozyme Therapeutics, Inc. (HALO): Is This Delivery-Focused Biotech a Buy?

What is the upside?

Combined, with these three products alone, we’re talking about $12.5 billion in peak total revenue; and this does not include a partnership with Pfizer that could total $507 million. If we use the same 5% royalty rate, and 80% of products using the technology, than Halozyme Therapeutics, Inc. (NASDAQ:HALO) could earn $500 million on the development of its late-stage pipeline.

If we use the same five times peak sales ratio, which is the industry average, than Halozyme Therapeutics, Inc. (NASDAQ:HALO) could have upside of at least 170%. In terms of risks, there is always a chance that its technology will be a commercial flop; although I would be highly surprised due to its benefit for patients.

Thus, I do believe that Halozyme Therapeutics, Inc. (NASDAQ:HALO) is presenting a great deal of upside. Moreover, it is an attractive acquisition target. Roche is the world leader in vaccines, and may find Halozyme’s technology beneficial long-term to its current product offerings.

Baxter might even find Halozyme Therapeutics, Inc. (NASDAQ:HALO) attractive. Last year, Baxter spent $1.2 billion on R&D and has expanded its pipeline abruptly. Therefore, with Baxter being a leader in hospital-based IV treatments, I think it could be a viable option as a potential acquirer.

In other words, there are several options for this company, all of which I think will produce gains for investors.

The article Is This Delivery-Focused Biotech a Buy? originally appeared on Fool.com.

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