What: Shares Halozyme Therapeutics,a developer of human enzymes,got caught up in the market's chaos during August as the company shed more than 24% of its value during the month, according to S&P Capital IQ.
So what: There doesn't appear to be any particular news that caused the market to shy away from the stock, so I think it's fair to blame the weakness on general macroeconomic issues that caused investors to flee the markets in general last month.
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In fact, the company released a great earnings report last month that investors cheered. Revenue swelled to $43.4 million during the quarter, which was up huge from the $18.3 million recorded in the year-ago period. This strong revenue generated a $3 million profit during the quarter, though it should be noted that those results were largely driven by a one-time payment from a lucrative licensing agreement it signed withAbbVie.
Beyond the reported results, Halozyme continues to make progress on a phase 3 trial for its flagship drug, PEGPH20, which it is studying to treat pancreatic cancer.
Now what: For the full year, the company expects to report revenue of $110 million to $115 million and burn a total of $20 million to $30 million of its cash. Despite that, it should end the year with around $110 million in the bank, which gives it plenty of room to meet its financial commitments. The company also sets itself apart from many other small-cap biotechs in that it already has products on the market that are generating revenue, and it boasts a nice list of partnerships that should give investors some confidence in its future.
Halozyme is an intriguing company, and this recent share-price weakness makes me think it could make a great addition to the more speculative portion of my portfolio.
The article Why Shares of Halozyme Therapeutics Inc. Plunged 24% in August originally appeared on Fool.com.
Brian Feroldi has no position in any stocks mentioned, and neither does The Motley Fool. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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