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ABBV 1Q20 results—HCV sales=$564M, -10.8% QoQ:
https://investors.abbvie.com/news-releases/news-release-details/abbvie-reports-first-quarter-2020-financial-results
1Q20 HCV sales were $234M US, $330M ex-US.
Right. It shows how low Yahoo Finance has sunk under Verizon’s tutelage that they carry such drivel.
Those articles are computer generated click bait. The same article comes out for every ticker eventually with only the numbers differing.
Correct. That was my mistake. Sorry for the confusion. Surprised by the magnitude of today’s sell off still.
The nonsensical article about ENTA’s “debt” came out on 4/17/20, so I doubt that it was a factor in the price action today:
https://finance.yahoo.com/news/enanta-pharmaceuticals-nasdaq-enta-using-141916507.html
ENTA's FY2Q20 earnings will likely be soft for two reasons: 1) The Mavyret royalty rate drops to 10% at the beginning of each calendar year and has to work its way back to the higher tiers as the year progresses; and 2) ABBV's Mavyret sales to new patients presumably fell in March, when people started deferring non-essential doctor visits.
I still think ENTA is a strong buyout candidate, FWIW.
I’m pretty sure ENTA is down 6% right now, partially because of some misleading computer generated articles. On is titled, Is “ENTA Using Too Much Debt?” What debt? They have almost no debt compared to their $350+ Mil cash position. Also worth noting, IBB -1.5% today.
Addendum—ENTA’s COVID-19 PR is silent about expected Mavyret royalties from ABBV. ENTA is not in a position to comment on this until ABBV does.
I expect some degradation in Mavyret royalties from the COVID-19 outbreak, as there will certainly be fewer patients starting HCV drugs during the next several months. However, this patient-start shortfall ought to be temporary insofar as people who defer HCV treatment are still going to need it, unless they die in the interim.
ENTA new slide set—includes info on COVID-19 discovery program:
https://s22.q4cdn.com/306858242/files/doc_presentations/2020/03/Enanta-Corporate-Presentation-March-17-2020-FINAL.pdf
Baird upgrades 'defensive' Enanta, sees 'real COVID-19 potential'
Baird analyst Brian Skorney upgraded Enanta to Outperform from Neutral with a $60 price target. He sees the company having a defensive cash and royalty position and also views its core competencies in virology and respiratory disease as "among the best to tackle COVID-19," Skorney tells investors. Enanta's two-pronged development approach should give it the potential for a viable COVID-19 candidate to come from it pipeline in either the near or long term, Skorney added.
I don't consider today's PR promotional as much as showing that ENTA is trying to be part of the solution.
I agree that ENTA does not need to expend a lot of financial resources on this.
ENTA’s PR on COVID-19 effort:
https://finance.yahoo.com/news/enanta-pharmaceuticals-announces-efforts-discover-110000020.html
ENTA isn’t getting a bounce from this announcement—and it doesn’t deserve one insofar as this is a low-key program that’s unlikely to bear fruit in a manner that’s commercially material.
ENTA’s CEO is a 5.8% shareholder—1.19M shares by SEC calculation method*—according to Form 13D/A filed today:
https://www.sec.gov/Archives/edgar/data/1177648/000119312520061622/d888879dsc13da.htm
*The SEC calculation method includes all derivatives that are convertible into common shares during the next 60 days.
USPSTF recommends HCV screening for all US adults age 18-79 (unless they have another known liver disease):
https://www.cnn.com/2020/03/02/health/hepatitis-c-screening-recommendations-study/index.html
The prior USPSTF recommendation for HCV screening was limited to people between 1945 and 1965 and those at high-risk for HCV infection based on lifestyle, so the new recommendation is a huge expansion in the screen-worthy population on the young side.
EDP-514 (for HBV) has a higher probability of success than either of ENTA’s FXR compounds, IMO. First, HBV is much better understood than NASH, where drug-developers aren’t sure which biological targets are the best ones to modulate.
Second, HBV is an enormous—and readymade—commercial market; diagnosis is trivial and any functional cure will fly off the shelves with scarcely any need for marketing or cajoling of third-party payers. With NASH, on the other hand, a firm diagnosis requires a liver biopsy and, even when a biopsy is performed, determining whether treatment is warranted is a hazy decision in all but the most advanced cases.
How would you rank the prob of success for their pipeline between hbv and fxr? Too bad there are no good animal models for pruritis, apparently.
Thanks for posting that excerpt. EDP-297 sounds highly promising.
Inasmuch as finding an effective and well-tolerated dose of EDP-305 looks like a longshot, I think ENTA should redirect the R&D expenditures on EDP-305 to EDP-297, instead of advancing both compounds.
Transcipt (Seeking Alpha)
Excerpt on the new NASH drug:
Sure. So shifting gears to FXR now. So 297 are follow-on FXR agonist. We spent a lot of time trying to optimize whatever characteristics of the molecule we could. Obviously looking at potency and selectivity and other kinds of things. What surprised us as you know with 305 in the ARGON study was that the doses that we used, we saw more pruritus than we would have expected from all the information we saw in Phase 1. And so for us thinking about how to use 305 in a way that gives better tolerability going forward is the path that we’re thinking about for 305, but 297 then it became clear that pruritus perhaps more so than lipids is the thing we needed to really try to figure out how to improve upon. The confounding part of that is that nobody -- nobody really understands what’s causing pruritus with these various FXRs that have seen it, is it on target, is it off target, is it on target in certain tissues, but not others and so absent having the sort of confirmed mechanistic understanding of how to reduce pruritus, what we did was took other approaches that we could do sort of independent of knowing the mechanism.
So number one is drill down the potency to as good a potency is you could possibly do. So we worked and worked and worked on that you’ve -- we put the data out at JP Morgan initially, we’ll have more at EASL, but it’s a very, very potent FXR. It is the most potent one based on the data that we’ve generated side by side versus any other FXR agonist that’s in development today. So number one, that’s good because you will reduce the amount of drug that it takes to deliver the punch. So we know that FXR receptors are in the intestine and also in the liver in terms of the sites of efficacy for a compound that we would be looking for in NASH. And so in addition to making these exquisitely potent for FXR and hopefully less potent for something else that we might not know, we aimed it directly at liver and intestine and not had plasma and skin, because obviously if you have high plasma levels you are going be circulating the drug around to all kinds of other tissues in the body and we specifically thought it would be interesting to minimize the skin exposure of the drug as well.
So it’s really the twofold combination of having very, very good potency. So that we’ll be dosing just very small amounts of drug and then having that drug go directly to the sites where we need the drug and hopefully not at the sites where we don’t need the drug were only -- were only -- were only other things could happen. So that’s our thesis and there is a scenario where it might not play out as we hoped, but that sort of narrow scenario of bad luck would be, if it is FXR mediated, the pruritus and if it’s FXR mediated by FXR receptors inside the liver or intestine, then we may only have achieved a super, super potent version of 305 or some of the other FXRs that are out there today. But if it’s any other scenario, we have the chance to come up with benefit and that’s what we’ll be exploring. We think we can learn actually, a fair amount in Phase 1 and we’re on track to start that Phase 1 study in the middle of this year with -- with the -- with the data coming in the first half of next year. So it’s a pretty straightforward plan, it looks like an excellent molecule chemical profile more at EASL, but it’s a -- it’s a polished entrant into the field.
ABBV’s 2020 HCV guidance=$2.5B—essentially the same run rate as in 4Q19 (#msg-153703042).
ENTA FY1Q20* results:
https://www.enanta.com/investors/news-releases/press-release/2020/Enanta-Pharmaceuticals-Reports-Financial-Results-for-its-Fiscal-First-Quarter-and-Three-Months-Ended-December-31-2019/default.aspx
FY1Q20 royalty revenue=52.6M, up slightly from $51.3M in FY4Q19.
ENTA’s royalty rate from ABBV is tiered, as shown in the table in #msg-142808661. The royalty rate is applied to the 50% Glecaprevir component of Mavyret (a 2-drug combination).
During ENTA’s FY1Q20, the royalty rate was 17% (the second-highest tier in the table), which equates to 8.5% when applied to ABBV’s actual Mavyret sales.
Based on this known royalty rate and ENTA’s reported FY1Q20 royalty income, we can infer that ABBV’s worldwide Mavyret sales during calendar 4Q19 were approximately $619M.
ENTA’s 12/31/19 cash=$415M (up from $400M on 9/30/19).
FY1Q20 GAAP EPS=$0.65.
*ENTA fiscal year 2020 ends 9/30/20.
Looks like Spring Bank Pharma tanked on their HBV program...
I concur with the report that the phase-1 HBV data will likely be the biggest pipeline event in the early part of the year.
Good to see their mention of EDP-297; I commented on EDP-297 in #msg-153275794.
BUY rating issued by ROTH Capital Partners... some better news as of late...
Yasmeen Rahimi, Ph.D., yrahimi@roth.com
(646) 616-2787
Sales (800) 933-6830, Trading (800) 933-6820
COMPANY NOTE | EQUITY RESEARCH | January 21, 2020
Healthcare: Biotechnology For full report in pdf, please click here
Enanta Pharmaceuticals, Inc. | ENTA - $57.94 - NASDAQ | Buy
Company Update
Stock Data
52-Week Low - High $57.15 - $106.80
Shares Out. (mil) 19.76
Mkt. Cap.(mil) $1,145.11
3-Mo. Avg. Vol. 176,293
12-Mo.Price Target $130.00
Cash (mil) $400.0
Tot. Debt (mil) $0.0
EPS $
Yr Sep --2018-- --2019-- --2020E--
Curr Curr
1Q 0.59A 1.25A 0.76E
2Q 0.61A 0.20A (0.63)E
3Q 0.97A 0.33A (0.51)E
4Q 1.30A 0.44A (0.18)E
YEAR 3.48A 2.21A (0.55)E
P/E 16.6x 26.2x NM
Diluted EPS shown.
Revenue ($ millions)
Yr Sep --2018-- --2019-- --2020E--
Curr Curr
1Q 38.1A 69.9A 60.7E
2Q 44.0A 39.6A 33.9E
3Q 57.3A 44.4A 38.9E
4Q 67.2A 51.3A 48.3E
YEAR 206.6A 205.2A 181.8E
ENTA: Our JPM Takeaways Set the Tone for a Productive 2020
We came away from JPM impressed by our meeting with ENTA which highlighted key upcoming catalysts in four clinical programs (NASH, RSV, PBC, and HBV), with the most imminent being Ph1 PK/PD and safety readout for EDP-514 in 1Q20. We view ENTA's continued program updates as commitment to bringing each asset to the clinic, including a new, differented FXR agonist EDP-297, and expect 2020 to be rich with catalysts in each of ENTA's clinical programs.
ENTA has its sights set on HBV, with Ph1 PK/PD and safety data for EDP-514 as the most impending catalyst in 1Q20. Importantly, the Ph1a/1b trial comprises two parts, and Part 1 is evaluating the safety of a once daily dose of EDP-514 in healthy subjects (n=98) which will be tested in two phases: 1) A single ascending dose, placebo-controlled study will evaluate six doses of EDP-514 in healthy subjects for a total of eight days. A simultaneous study will determine the food effect of EDP-514, in two cohorts of healthy subjects in either a "fasted" or "fed" state; and 2) Three doses of EDP-514 will be evaluated in a multiple-ascending dose, placebo-controlled study for 14 days, and will have key endpoints of tolerability and safety, in addition to PK data, specifically AUC and Cmax, which we view as key for determining future dosing, as well as a clinical confirmation of the efficacy that EDP-514 has shown in preclincal studies. Following completion of Part 1, we highlight that Part 2 of ENTA's Ph1 trial will enroll HBV patients with Nuc suppression, and will be critical for determining the antiviral efficacy and safety of EDP-514, and this second part is expected to begin in 1Q20. We believe that anticipation is high for EDP-514's Ph1 readout on the heels of a compelling preclinical dataset that strongly supports EDP-514's role as a core inhibitor for the treatment of HBV. Specifically, EDP-514 exerts its effects upon multiple steps in HBV replication, compared to other therapies with narrower MOAs, including reverse transcriptase inhibitors and interferons. Continue to page 2 for preclinical data backing up EDP-514's efficacy against HBV.
Must read pp. 2-3 for additional key takeaways from JPM:
• Most significant stock-moving event is likely to be RSV readout for EDP-938 in 3Q20
• All eyes are on newcomer EDP-297, a targeted, differentiated FXR agonist with potential for minimized pruritus
• ENTA is taking strides to advance FXR agonists in NASH and PBC, with a stream of clinical updates expected in 2020.
Intraday Price: $57.40 of 10:57AM ET
Important Disclosures & Regulation AC Certification(s) are located on the last page of this report.
Click here to remove your contact information from our research distribution list.
VALUATION
Our $130/share price target is derived from a risk-adjusted net present value (rNPV) analysis, based on 1) $49.80 per share, driven by HCV royalty revenues from ABBV ($155.0M peak revenue by 2022); 2) $28.50 per share, driven by U.S. and EU sales of EDP-938 in RSV (2023 launch, 55% POS, $1.7B peak sales); 3) $29.00 per share, driven by U.S. and EU sales of EDP-305 in NASH (2024 launch, 50% POS, $2.2B peak sales); 4) $2.30 per share, driven by U.S. and EU sales of EDP-305 in PBC (2023/24 launch, 50% POS, $423.9M peak sales); and 5) $20 additional cash per share (as of September 30, 2019). We take our model out to 2028 and use a discount rate of 8.0%. Impediments to our price target include clinical, regulatory, and financial risks.
As of September 30, 2019, ENTA reports cash, cash equivalents, and short-term and long-term marketable securities of $400M, sufficient to fund business and development programs for the forseeable future.
Impediments to our price target include clinical, regulatory, and financial risks.
RISKS
Company-related risks. ENTA’s financial prospects for the next several years are most heavily dependent upon its partnership with ABBV for the treatment of HCV. Should ABBV act in its own best interest, there would be adverse material effects on ENTA’s business. Similarly, ABBV has priced MAVYRET/MAVIRET well below the price of its first HCV regimen and its primary competitor, and therefore, maintenance and growth of royalty revenues ENTA will receive will be dependent upon ABBV’s ability to capture a significant market portion. Additionally, ENTA faces heavy competition in HCV, NASH, PBC, and RSV, and competitors could achieve greater success in clinical and regulatory development, and future commercialization and sales.
Clinical risks. Clinical success in previous clinical trials or in other indications do not necessarily guarantee success for current and future products. The regulatory path for RSV, in particular, and endpoints to be utilized for clinical trials are still under investigation and debate, which can hinder ENTA’s prospects and can result in potential delays as ENTA navigates this regulatory landscape. Similarly, the RSV regulatory path as it relates to the infant and elderly population will have to be carefully navigated by ENTA and trials will likely need to consider the differences in drug exposure, formulations, and endpoints between the two distinct populations.
Commercialization risks. ENTA has not commercialized a product on its own, which makes it difficult to assess the company’s ability to do so for additional pipeline products. ENTA plans to either commercialize on its own future product candidates or will look for partnership opportunities, which may or may not be obtained.
COMPANY DESCRIPTION
Enanta Pharmaceuticals, Inc. is clinical-stage biotechnology company focused on developing small molecule drugs for viral infections and liver diseases, such as Hepatitis B Virus (HBV), NASH, PBC, and Respiratory Syncytial Virus (RSV). WIth partner ABBV, ENTA discovered, developed, and achieved approval on two direct-acting anti-viral (DAA) regimens. They are marketed in the U.S. as Mavyret (glecaprevir/pibrentasvir) and Viekira Park (paritaprevir/ritonavir/ombiasvir/dasabuvir) for the treatment of hepatitis C virus (HCV) infection. A reason for ENTA's successful development of two blockbuster HCV drugs is due to the company's strength in medicinal chemistry, molecular virology, and pharmacology, with highly developed sets of skills in compound generation, target selection, screening, pharmacology, and lead optimization. Continuing with its track record in viral and liver diseases, ENTA generated the following enriched pipeline 1) EDP-938, a novel, small molecule N-protein inhibitor in Phase 1 testing in 82 healthy volunteers; 2) EDP-027367 (plus several back-up compounds), a core inhibitor for HBV; 3) EDP-305, a non-steroidal, non-carboxylic FXR agonist in Phase 2 testing in PBC patients (INTREPID, n=119) and NASH (ARGON-1, n=125) with top-line results expected in mid-2019; and 4) Several FXR agonist follow-on in pre-clinical evaluation and undisclosed targets in NASH in discovery. ENTA is located in Watertown, Massachusetts.
Regulation Analyst Certification ("Reg AC"): The research analyst primarily responsible for the content of this report certifies the following under Reg AC: I hereby certify that all views expressed in this report accurately reflect my personal views about the subject company or companies and its or their securities. I also certify that no part of my compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in this report.
Disclosures:
ROTH makes a market in shares of Enanta Pharmaceuticals, Inc. and as such, buys and sells from customers on a principal basis.
Each box on the Rating and Price Target History chart above represents a date on which an analyst made a change to a rating or price target, except for the first box, which may only represent the first note written during the past three years. Distribution Ratings/IB Services shows the number of companies in each rating category from which Roth or an affiliate received compensation for investment banking services in the past 12 month.
Distribution of IB Services Firmwide
IB Serv./Past 12 Mos.
as of 01/21/20
Rating Count Percent Count Percent
Buy [B] 282 80.34 159 56.38
Neutral [N] 46 13.11 18 39.13
Sell [S] 5 1.42 2 40.00
Under Review [UR] 18 5.13 13 72.22
Our rating system attempts to incorporate industry, company and/or overall market risk and volatility. Consequently, at any given point in time, our investment rating on a stock and its implied price movement may not correspond to the stated 12-month price target.
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Sell: A rating, which at the time it is instituted and or reiterated, that indicates an expectation that the price will depreciate by more than 10% over the next 12 months.
Under Review [UR]: A rating, which at the time it is instituted and or reiterated, indicates the temporary removal of the prior rating, price target and estimates for the security. Prior rating, price target and estimates should no longer be relied upon for UR-rated securities.
Not Covered [NC]: ROTH does not publish research or have an opinion about this security.
ROTH Capital Partners, LLC expects to receive or intends to seek compensation for investment banking or other business relationships with the covered companies mentioned in this report in the next three months. The material, information and facts discussed in this report other than the information regarding ROTH Capital Partners, LLC and its affiliates, are from sources believed to be reliable, but are in no way guaranteed to be complete or accurate. This report should not be used as a complete analysis of the company, industry or security discussed in the report. Additional information is available upon request. This is not, however, an offer or solicitation of the securities discussed. Any opinions or estimates in this report are subject to change without notice. An investment in the stock may involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. Additionally, an investment in the stock may involve a high degree of risk and may not be suitable for all investors. No part of this report may be reproduced in any form without the express written permission of ROTH. Copyright 2020. Member: FINRA/SIPC.
The FY2019 annual-meeting proxy (DEF14A) has been filed:
https://www.sec.gov/Archives/edgar/data/1177648/000119312520010035/d820003ddef14a.htm
ENTA—Re: hMPV
This excerpt from ENTA’s 1/9/20 PR (#msg-153206240) is being discussed on the JPM webcast:
One more HBV competitor bites the dust: #msg-152982734.
ENTA's enterprise value at the current share price ($65.47) is approximately $1.04B, based on 22.7M fully-diluted shares (#msg-152977518) and pro forma cash of $444.2M (#msg-152977520).
See #msg-151399889 for related info.
ENTA’s pro forma cash @9/30/19=$444.2M—an increase of $13.4M since 6/30/19 (#msg-150437994).
The $444.2M figure consists of: $379.2M of net current assets on the 9/30/19 balance sheet (https://www.sec.gov/ix?doc=/Archives/edgar/data/1177648/000156459019044729/enta-10k_20190930.htm#CONSOLIDATED_BALANCE_SHEETS ); and $65.0M of marketable securities on the 9/30/19 balance sheet designated as non-current (e.g. bonds with a time to maturity greater than one year).
ENTA’s fully-diluted* share count @9/30/19=22.7M—unchanged since 6/30/19 (#msg-150437998).
The 22.7M figure above consists of: 19.7M basic shares on the 9/30/19 balance sheet (https://www.sec.gov/ix?doc=/Archives/edgar/data/1177648/000156459019044729/enta-10k_20190930.htm#CONSOLIDATED_BALANCE_SHEETS ); and 3.0M options outstanding (whether or not exercisable) (ibid, page F-23).
*Non-treasury method.
ENTA’s insiders are bullish: #msg-152478615.
ENTA’s follow-on FXR agonist is called EDP-297. Phase-1 is expected to start in mid 2020.
ENTA FY4Q19 results:
https://www.enanta.com/investors/news-releases/press-release/2019/Enanta-Pharmaceuticals-Reports-Financial-Results-for-its-Fiscal-Fourth-Quarter-and-Year-Ended-September-30-2019/default.aspx
FY4Q19 royalty revenue=$51.3M, up from $44.4M in FY3Q19 (Apr-Jun 2019).
ENTA’s royalty rate from ABBV resets to the lowest tier at the start of each calendar year; the royalty tiers applicable to the 50% Glecaprevir component of Mavyret are shown in #msg-142808661.
9/30/19 cash=$400M.
FY4Q19 GAAP EPS=$0.44.
FY2020 R&D guidance is $155-175M.
EDP-938 ancillary phase-2a data presented at IDWeek:
https://www.enanta.com/investors/news-releases/press-release/2019/New-Data-from-Enantas-Phase-2a-Human-Challenge-Study-of-EDP-938-for-RSV-Demonstrates-Highly-Statistically-Significant-Reductions-p0001-in-Total-Symptom-Score-Mucus-Weight-and-RSV-Viral-Load-as-Measured-by-RT-PCR-Assay-and-by-Plaque-Assay/default.aspx
Another bullish insider transaction: #msg-151441695.
Musings on ENTA’s buyout vig: #msg-151399889.
Deja vu?
Ah...... it was approved 2 months ago in the EU.
This was the FDA.
Enanta’s HCV Collaboration Partner AbbVie receives Approval by the European Commission for MAVIRET™ (glecaprevir/pibrentasvir) to Shorten Treatment Duration to Eight Weeks for Treatment-Naïve HCV Patients with Compensated Cirrhosis
https://finance.yahoo.com/news/enanta-hcv-collaboration-partner-abbvie-125100455.html
****************************
An aside; This continues to only improve as the easiest, fastest HCV treatment.
There are still huge numbers to treat, and the ability to prescribe and start treating w/o genotyping, doing viral load tests, without needing higher competency in treating physicians seems like the market share may continue to grow.
I WONDER? Seeing how successful this treatment has become, seeing a long treatment tail, I wonder what would have happened if somehow ENTA had been able to have paid for half the trials? What kind of money would they have spent, versus what they might currently be making, now, and in the future?
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