Leerink Downgrades Halozyme Amid CMS 2028 Drug Pricing Guidance

Halozyme Therapeutics' stock has been downgraded by multiple analysts, including Morgan Stanley and Leerink Partners, due to concerns stemming from draft guidance issued by the Centers for Medicare & Medicaid Services (CMS) related to the 2028 Inflation Reduction Act. The guidance suggests that hyaluronidase combination products may face Medicare price negotiations 13 years after the approval of the original active ingredient rather than after the combination product approval, potentially accelerating pricing pressures on key products such as Opdivo SC, Darzalex Faspro, and Ocrevus SC. These developments have led to lowered price targets, with Leerink Partners reducing its target from $63 to $47 and Morgan Stanley lowering its target to $62, reflecting increased uncertainty about Halozyme's revenue outlook and growth prospects. Despite these downgrades, Halozyme maintains strong financial health, including a high gross margin, robust revenue growth, and a perfect Piotroski Score, while management emphasizes the clinical benefits of its ENHANZE technology. Analysts note that discussions around the clinical significance of improved bioavailability will continue until CMS finalizes the guidance expected by mid-2025, which will be critical for clarifying long-term impacts on Halozyme's market position. Overall, while the company faces near-term challenges due to regulatory uncertainty, the broader analyst consensus still reflects potential upside based on average price targets and fundamental strengths.