Can Elektrofi Acquisition Drive Halozyme's Long-Term Growth?

Halozyme Therapeutics HALO has collaboration deals related to its ENHANZE technology with large pharma companies that use the technology for the development of subcutaneous (“SC”) formulations of their various approved drugs. These deals generate royalties on sales of marketed drugs, milestone payments and annual license fees, which comprise Halozyme’s top-line.

Halozyme has eight marketed partnered drugs based on this technology, including the subcutaneous formulation of J&J’s JNJ Darzalex and Roche’s RHHBY Phesgo. The company’s top line comprises product sales, royalty payments from partners and revenues under collaboration agreements related to its ENHANZE technology with several pharma bigwigs.

Though Halozyme’s top line is being driven by higher royalty payments from Roche for Phesgo and J&J for SC Darzalex, among others, it is actively seeking new deals to diversify and expand growth.

Halozyme recently entered into a definitive agreement to acquire Elektrofi, a biopharmaceutical company known for its ultra-high concentration microparticle technology for biologics, branded as Hypercon.

Per the deal, Halozyme will make an upfront payment of $750 million to Elektrofi, with up to three additional milestone payments of $50 million each, contingent upon regulatory approvals for three separate products.

The transaction is expected to close in the fourth quarter of 2025 and likely to expand and diversify Halozyme’s drug delivery technology offerings for continued long-term revenue growth into 2040.

More on the Elektrofi Deal, HALO Maintains 2025 Revenue Outlook

Per the company, the addition of Elektrofi’s Hypercon technology is likely to expand its drug delivery capabilities, diversifying the technology platform and driving long-term revenue growth through a licensing and royalty-driven model. Royalty revenues from the Elektrofi deal are expected to begin in 2030.

Simultaneously with the Elektrofi Deal, Halozyme reaffirmed the 2025 revenue guidance that it had provided earlier in August during the second-quarter earnings call.

The company continues to expect total revenues in the range of $1.28 billion to $1.36 billion, while royalty revenues are anticipated in the range of $825-$860 million.

Adjusted EBITDA is expected in the band of $865-$915 million. Adjusted EPS are expected in the range of $6.00-$6.40 in 2025.

HALO’s Price Performance, Valuation and Estimates

Year to date, shares of Halozyme have rallied 38.1% compared with the industry’s rise of 8.1%. The stock has also outperformed the sector and the S&P 500 during the same time frame, as seen in the chart below.

Image Source: Zacks Investment Research

From a valuation standpoint, Halozyme is trading at a premium to the industry. Going by the price-to-sales (P/S) ratio, the company’s shares currently trade at 6.95, higher than 2.23 for the industry. The stock is trading below its five-year mean of 8.80.

Image Source: Zacks Investment Research

The Zacks Consensus Estimate for 2025 EPS has decreased from $6.22 to $6.18 over the past 60 days. During the same time frame, EPS estimates for 2026 have moved up from $7.15 to $7.58.

Image Source: Zacks Investment Research

HALO’s Zacks Rank

Halozyme currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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