In a report released today, Sean Laaman from Morgan Stanley downgraded Halozyme (HALO – Research Report) to a Hold, with a price target of $62.00.
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Sean Laaman has given his Hold rating due to a combination of factors related to recent developments in drug pricing regulations. The issuance of draft guidance by CMS on May 12 has introduced uncertainty regarding drug pricing negotiations, particularly for fixed combination drugs like those involving hyaluronidase. This guidance suggests that such combinations may face earlier price negotiations, which could impact industry incentives and pose challenges for products like those offered by Halozyme.
Given that the finalization of this guidance is expected later this year, with initial price applicability in 2028, there is a significant period of uncertainty ahead. While the stock price has already adjusted to some extent for this risk, the lack of a specific date for the final guidance adds to the unpredictability. As a result, Sean Laaman has shifted his rating to Hold, reflecting the potential challenges and uncertainties that Halozyme may face in the near term due to these regulatory developments.
In another report released on May 7, Leerink Partners also maintained a Hold rating on the stock with a $63.00 price target.