Halozyme Secures Preliminary Injunction Against Merck's Keytruda SC in Eight European Markets

What happened

On October 7, 2026, Halozyme announced that the Dutch patent court in The Hague ruled that Merck's Keytruda SC infringes EP 2,797,622, one of Halozyme's MDASE patents, and issued an injunction barring MSD BV from manufacturing, marketing, or distributing Keytruda SC in Belgium, Denmark, France, Ireland, Italy, Sweden, Switzerland, and the Netherlands. This is a pivotal development in the ongoing litigation that began after licensing talks between the two companies failed, as detailed in the latest master report. The injunction directly targets Merck's supply chain, as MSD BV serves as the central European marketing authorization holder and worldwide packaging hub, potentially disrupting Keytruda SC availability in those markets. However, the ruling is preliminary and subject to appeal, and its practical impact may be limited if Merck can redesign its formulation or rely on alternative delivery technologies not covered by the patent. Moreover, the injunction does not cover other major markets like the US, where Keytruda SC is already approved, so the financial impact on Halozyme's royalty stream remains uncertain and may be modest.

Implication

Investors should view this as a positive data point for the ENHANZE IP moat, directly addressing one of the master report's key watch items: favorable litigation outcomes could support an upgrade from WAIT toward POTENTIAL BUY. However, the injunction is preliminary, likely to be appealed, and limited to eight European countries, leaving the core question of ENHANZE's post-2027 economics unresolved. Merck may pursue workarounds or alternative subcutaneous technologies, and the broader litigation could still end in a settlement that limits Halozyme's upside. The master report's valuation anchor of ~$49.46 DCF versus the current price of $65.77 suggests the stock already prices in significant optimism, so this event alone may not justify chasing the stock. A measured response would be to monitor subsequent legal rulings and any licensing negotiations, while awaiting clearer evidence that the injunction translates into higher royalties or a favorable settlement.

Thesis delta

The previously WAIT stance was predicated partly on uncertainty around ENHANZE IP durability and litigation outcomes; this injunction provides concrete evidence that Halozyme's patents can be enforced against a major competitor. However, the ruling is preliminary and geographically limited, so it does not fully resolve the post-2027 IP cliff risk or justify upgrading to POTENTIAL BUY at this time. The thesis shifts from cautious to cautiously optimistic, with a higher probability of favorable ENHANZE economics but still requiring confirmation through final rulings and commercial impact.