Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of human enzyme development company Halozyme Therapeutics (NAS: HALO) jumped as much as 35% on Friday following a favorable decision from the Food and Drug Administration to unhalt a clinical study on Cinryze.
So what: Cinryze, ViroPharma's (NAS: VPHM) FDA-approved best-selling drug to treat hereditary angioedema, is currently being tested with Halozyme's human enzyme rHuPH20 for quicker and more efficient subcutaneous delivery. In early August, the FDA halted the clinical study because of concerns over elevated antibody levels and patient safety. Friday's ruling allows both companies to resume the study as long as ViroPharma keeps the FDA informed about elevated levels of antibodies during the study.
Now what: As you can see by Friday's action, the FDA's ruling has considerably more bearing on the unprofitable Halozyme than it does on ViroPharma, whose Cinryze is already pumping out profits. As for me, I'm not nearly as excited about the news -- at least not as excited as investors seem to be. In December, I noted Halozyme's lofty valuation as a reason to avoid the stock, and I'm sticking with that assertion even today. With losses expected well into 2014 and possibly beyond, I see little reason to chase Halozyme higher.
Craving more input? Start by adding Halozyme Therapeutics to your free and personalized watchlist so you can keep up on the latest news with the company.
The article Why Halozyme Therapeutics Shares Soared originally appeared on Fool.com.
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