Buy - Price 6.37 on July 14
by Merriman Curhan Ford

Halozyme announced initiation of a Phase II trial for Type II diabetics [which] will complement the ongoing Phase II trial in Type 1 diabetics using Lispro and Humulin, along with rHuPH20...all three drugs will be titrated in the Type 2 Phase II, as opposed to remaining static in dose. The reason for independent drug titration is to...study glycemic control under optimal conditions [and to try] to replicate real-world behavior [in] insulin activity. We remain bullish on the Halozyme story...the insulin program is key to our Buy rating, given that Halozyme owns all rights to the program and therefore will garner greater economics on any deal [or] eventual marketing. ...The larger part of Halozyme's business is royalty-generation. HALO has deals with Roche and Baxter, which would provide future milestone payments and royalties. ...We believe HALO shares are undervalued now...[and] should trade in a range of 10 to 13, based upon a 25 times multiple on our [fiscal-year] '14E-EPS of $1.40, discounted back by 35%. Market cap: $528.4 million.

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management.

Downgraded by Roth Capital from Buy to Hold