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Contrarian daytrading technician who specializes in locating high probability short term trades while predicting price movement directions with over 85% accuracy. Most of my trading involves either extremely short term micro scalping of stocks or commodities (using 1 minute bar charts), or swing... More
  • All Halozyme Therapeutics, Inc. (HALO) Bulls: "Be Greedy When Others Are Fearful..." 4 comments
    Apr 11, 2014 8:41 AM | about stocks: HALO

    Warren Buffett said, "Be Fearful When Others Are Greedy and Greedy When Others Are Fearful." I opine that now is the time for Halozyme Therapeutics, Inc. (HALO) bulls to be greedy rather than fearful, and buy into the current weakness. The ones who will buy HALO now when it is trading with a "7" handle and lower, should be richly rewarded in the future, in my opinion. The situation is anything but hopeless.

    Here is a posting I found on the Yahoo message board, click here, that describes some analyst reactions to the recent selloff in the stock. I will repeat the post here:

    Piper Jaffray analyst Charles Duncan said he expects the pancreatic cancer halt to be resolved in "weeks, not months" and that it would not hurt the broader technology platform as the dosing levels varied significantly from those of Hylenex.

    Jefferies & Co analyst Eun Yang maintained her assumption that the pancreatic cancer treatment would be launched in the United States and Europe by 2019, and generate combined peak sales of about $548 million in 2027.

    UBS maintains $14 price target. Thinks Hylenex Diabetes potential upside surprise. Gives $5 value to PEG but not changing estimate.

    BMO Capital analyst Jim Birchenough, M.D. is out defending Halozyme BMO Capital analyst Jim Birchenough, M.D. is out defending Halozyme Therapeutics (NASDAQ: HALO), which is down 29% after temporary halt of phase 2 trial enrollment and dosing for PEGPH20 in pancreatic cancer. "We believe HALO weakness represents an over-reaction to today's news given that PEGPH20 represents only ~$1.00/share in our NPV estimate for the company," Birchenough said. "Any imbalance in thromboembolic risk should be easily manageable with ASA +/- anticoagulant, as is done commonly with large cancer drugs like REVLIMID." He added, "Thromboembolic risk for an IV formulation of PEGPH20 has no implications for the broader PH20 SubQ platform and we continue to see upside to recent EU approvals of HERCEPTIN SC and MABTHERA SC." The analyst maintained an Outperform rating and price target of $24.00.

    HALO Is Approaching Significant Long-Term Support at $7.25, $6.50, $6.00 & $5.00

    (click to enlarge)

    The above weekly chart of HALO is updated through Thursday's close, 4/10/14. From a recent high of $18.18, today's low in HALO reached $7.29, a drop of 59.9%. The last major bull leg started last August at $6.51. The stock then rallied $11.67 over the next 5 months, but has given back 93.3% of those gains in the past 3 months. With Thursday's close of $7.49, the stock is just $2.49 from major support at $5.00. The last 3 times the stock bottomed at the $5.00 level or a bit lower, it quickly rallied back to $8.50. Should the stock fall to $5.00 again in the near future, it should also rally back quickly to $8.50. So anyone who buys shares in the $7, $6 and/or $5 area, should do just fine if they hold for that snap back rally. If you follow this company back over its history, it has had several of these short-term setbacks, and each time the stock recovered to a price close to where it was trading prior to the setback. There is no reason to believe that this time will be any different. If you liked owning the stock at $13 or $14, you should love owning the stock at $6.50 or $7.00. From the current levels, all speculative frothiness has been washed out of the stock, and it should start building a nice base to work on up to higher prices. At worst, the stock should base either at $7.00, $6.50, $6.00 or $5.00 and then rally $3 to $3.50 from the low and then trade back and forth in a trading range. If $6.50 to $7.00 holds the bottom, we could soon see $10.00. But if the stock continues to fall to its long-term support at $5.00, it should quickly recover back to $8.50, as it did three times in the recent past, as shown on the above chart.

    Disclaimer:

    The thoughts and opinions in this article, along with all stock talk posts made by Robert Edwards, are my own. I am merely giving my interpretation of market moves as I see them. I am sharing what I am doing in my own trading. Sometimes I am correct, while other times I am wrong. They are not trading recommendations, but just another opinion that one may consider as one does their own due diligence.

    Disclosure: I am long HALO.

    Stocks: HALO
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Comments (4)
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  • fezziwig2008
    , contributor
    Comments (135) | Send Message
     
    "If you liked owning the stock at $13 or $14, you should love owning the stock at $6.50 or $7.00."

     

    I owned the stock at 3,4,5.....13.....18 and at all those levels, the hope of pegpH20 leading to a new level of pancreatic cancer care was prominent. I sold at 8 when that hope was suspended- certainly not over- but indefinitely on hold. The ph1b high hyaluron overall survival seemed to be a number so impressive that any HALO leader, employee, or institutional owner would want to trumpet. Yet at the Q4 2013 Earnings call, all HALO's new CEO would share was that the data was near being analyzed. I analyzed it at the Q3 2013 call when HALO's former CEO and coFounder claimed the PegpH20-Gemcitabine Ph1b data was not yet mature. That meant on that day- 11/8/13 at least 4 of the 6 patients in the high hyaluron cohort were still alive. That finding equated to a running total of 568 days. Compare that to the OS of Gemcitabine alone- 180 days, Abraxane and Gemcitaboine- 255 days, and Folfirinox- 333 days. One would thinkHalozyme would want its investors to know the running figure. There are some Biotechs, named for Egypryian goddesses, who would have sent out weekly email updates of the total. This number is even more impressive, because no thromboemboli were reported to be associated with it. Yet when the HALO CFO presented weeks later at Cowen, he barely touched on the total- Why? Well, until we hear why and more about Ph1b- perhaps at ASCO- as well as the exact nature of the thrombemboli (were these Cerebrovascular accidents, deep vein thromboses, pulmonary emboli?) the level of speculation is raised higher than it was when the stock was at 13, 14, or 18. I'm waiting to hear.
    13 Apr 2014, 09:00 PM Reply Like
  • Robert Edwards
    , contributor
    Comments (497) | Send Message
     
    Author’s reply » The survival rate is so high using PEGPH20 that I would assume that this drug will ultimately be approved. They may need to add a blood thinner and take other precautions, etc. There are other drugs approved that had similar problems. The potential for good news coming out to counteract the current bad news situation should keep the bears from knocking this stock down too much, one would think. I will keep repositioning in the interim, buying on dips and selling out partially on rallies.
    14 Apr 2014, 06:55 AM Reply Like
  • UncleSam187
    , contributor
    Comments (205) | Send Message
     
    Hi Robert, can you update on the technical picture for HALO?
    the trading range today seemed large, 7.05 - 7.75, with a large body "candle". not sure how the interpret this consolidation after the gap down. thx
    15 Apr 2014, 08:10 PM Reply Like
  • Robert Edwards
    , contributor
    Comments (497) | Send Message
     
    Author’s reply » Citigroup initiated coverage on the stock and rated it a buy with a $12 target, so the stock shot above $8 in the premarket, but the day session high was $7.75. Then with the tech weakness most of today, the stock fell to $7.05, just 4 cents above yesterday's low, only to rally to midrange to close.

     

    They are buying the stock under $7.20 but it may still run stops below $7 and could trade to $6.50 or $6 in the short-term but should bounce quickly to $8 or $8.50 even if HALO sells off towards the lower targets. I sold shares on the premarket and early day session strength, and bot back shares $7.21 and lower later in the day, that I will sell out at a profit on strength, hopefully tomorrow. Still holding my higher priced shares. I see the stock trading to $10 in the intermediate term with the stock in a large $3.50 to $4 trading range for awhile till the fundamental picture clears up.
    15 Apr 2014, 08:31 PM Reply Like
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