(By Street Authority) Randal J. Kirk is beside himself right now. The legendary biotech investor, who is now worth more than $2 billion, made a rare misstep by plunking down $14 million (at $10.61 a share) on Halozyme Therapeutics (Nasdaq: HALO) in February, only to see that investment lose a quarter of its value on Monday, April 16.
His nearly 8% stake in the company is now worth roughly $70 million, down from nearly $100 million before Monday's plunge. That's when the Food & Drug Administration (FDA) told Halozyme -- along with key partner Baxter (NYSE: BAX) -- that further clinical testing for a key drug would be required.
This put an abrupt end to a solid upward move in the stock, which only recently saw the company's value move past the $1 billion mark. But Kirk figures to still profit handsomely, as Halozyme's biotechnology platform should still reap solid rewards in the years to come.
Halozyme has been garnering a steadily rising buzz in biotech circles, thanks to the impressive action of its key product, hyalurodinase. The drug mimics hyoluric acid, which is naturally produced by the body as a gel-like substance. Halozyme's hyalurodinase has proven quite effective at helping drugs to be absorbed into the bloodstream. Baxter and Roche Holdings (Pink Sheets: RHBBY) have poured money into Halozyme in exchange for the rights to market several drugs that are currently before the FDA. In both instances, those two Big Pharma players want to use hyalurodinase to convert existing intravenous (IV) drugs into subcutaneous (injectable) drugs.
Roche, for example, has paired up Halozyme's drug with its own Herceptin and Rituxan drugs, both of which are seen as key parts of Roche's future sales growth. Analysts at Brean Murray have repeatedly suggested that Roche might look to buy Halozyme (at around $13 a share) if the FDA issues a full set of green lights for the drug combinations.