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ENTA’s phase-2b trial in RSV misses primary endpoint:
https://ir.enanta.com/news-releases/news-release-details/enanta-pharmaceuticals-reports-topline-data-rsvp-study-edp-938
From the recent price action, it seems that this result may have been leaked.
NIH wants_to_study longer treatment_course for Paxlovid:
https://finance.yahoo.com/news/u-study-whether-longer-paxlovid-162143570.html
The Paxlovid treatment course under the existing EUA is 5 days. However, this is not because 5 days is necessarily optimal, but rather because 5 days is how long the treatment was in PFE’s phase-3 clinical trial.
I added last week at about $50.00
....after I swore I wouldn't till there was some hard data or positive catalyst. : )
I rather expect at some point another HBV candidate to combine with EDP 514.
Or the announcement of a partner in covid after the drug shows promise.
We are half way thru the 2nd quarter so news on Covid and RSV are right around the corner.
Out of Ignorance profile picture
Out of Ignorance
Today, 10:18 AM
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@George Rho
Thanks for reading and for your interesting comment.
I appreciate your insights on its COVID therapy. I seldom discuss early stage projects in my articles, no matter how potentially transformative they may be. This goes doubly for early stage COVID therapies. There are just too many molecules with fabulous potential and intriguing clinical breadcrumbs for me to highlight any one. Every time I think something will break free from the pack, I am disappointed. Most recently Omeros' narsoplimab was my fair hair boy.
As for the reason underlying the spike last year, you sound like you have better insights on that than I do; you played it well selling at $90.
George Rho profile picture
George Rho
Today, 4:21 AM
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I read your bio with some interest. I, too, like to learn from the responses of readers, although some can be harsh. Indeed, I started to pen an article on Alector recently, mainly to glean what others might see that I was apparently missing. Just briefly, the stock about doubled in price last summer after it inked a significant partnership with Glaxo, but has been on an extended slide ever since, the huge cash horde and pipeline prospects notwithstanding. In any case, laziness set in and I didn’t get far beyond the starting point.
As to your article, it left me feeling that you’d left out way too much, especially for someone who is familiar with the March quarter conference call. Principally, you completely ignore the Covid pill that’s under development. It apparently has the potential to be superior to both Pfizer’s and Merck’s Covid drugs, in terms of efficacy, dosing, and administration. As you undoubtedly know, both are huge sellers, massive enough to move the needle on the bottom line even though both companies have billions of shares outstanding.
To be sure, it’s only in phase 1. But it has received fast track designation. Plus, as evidenced but Pfizer’s and Merck’s, the clinical program shouldn’t take too long since there are many eligible patients out there and the drug is taken for only four or five days. Also important to note is Enanta’s minuscule equity base, at about 20 million shares outstanding. Imagine the impact of a billion dollars in sales on the bottom line.
Another fact you didn’t cover in your article was the reason for the sharp rise in share price last year. For whatever it’s worth, I bought the stock many years ago for the company’s hcv products and sold it last year at $90. I’ve been rebuilding my position over the past several weeks. If I were a betting man, I’d put my money on Enanta partnering with Abbvie for the Covid product, too. Full disclosure, I’m long both and have written articles on each.
https://seekingalpha.com/article/4512678-enanta-slow-drip
A very worth while reply to the article is in a first response in the reply section.
The SA article seems to ignore the Enanta covid candidate EDP-325.
Per J.Luly CEO the SAD & MAD dosing studies- and phase 1 of testing of the covid drug EDP 325 will be done in the 2nd quarter, and are presumed to be starting Phase 2 in the 3rd quarter.
One could surmise that if indeed EDP 325 is able to prove once a day ritonovir free dosing that it could soon be shown to be a best in class covid drug.
Per Enanta; " Fast Track designation [of EDP-325] enables more frequent communication with the FDA and eligibility for FDA programs such as priority review and rolling review, if relevant criteria are met. "
More clarity on what this means exactly could come in the next few months.
In short, the article took pains to ignore any of Enanta's pipeline other than RSV.
It seems to me that if the covid candidate is successful it could have more value- and sooner than the RSV pipeline. If that were the case it would seem a glaring omission in the article.
Thoughts on this post on “seeking alpha”
“Enanta: Slow Drip
May 17, 2022 6:06 PM ETEnanta Pharmaceuticals, Inc. (ENTA)1 Comment
Out of Ignorance profile picture
Out of Ignorance
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Summary
Enanta's pipeline is stuffed with mid-stage RSV therapies and other earlier-stage programs.
Enanta is one of many little biotechs which has a cash cow that can't keep up.
Enanta has a solid balance sheet and a strong albeit recently stressed share price.
Alcohol distillation process in Laos.
Varaporn_Chaisin/iStock via Getty Images
I last checked in on Enanta (NASDAQ:ENTA) in 2016's "Parsing Liver Therapy Perspectives: Gilead And Enanta". At the time I contrasted the two, with Gilead a major player and Enanta a mere small-time character actor.
This article evaluates Enanta on its own with particular attention to its 05/09/2022 fiscal Q2, 2022 earnings call (the "Call").
With the exception of its lead marketed therapy, Enanta's pipeline is a yawn
Enanta's pipeline below is devoid of late-stage molecules likely to bring it near-term cash. As shown by its pipeline slide below it has no phase 3 candidates. It has one molecule, its N-Protein Inhibitor EDP-938, which is in three phase 2 trials in treatment of RSV for differing patient groups:
Enanta Q2, 2022 Earnings Presentation
Enanta Q2, 2022 Earnings Presentation (ir.enanta.com)
During the Call, CEO Luly described its EDP-938 program at considerable length. He characterizes the study molecule as the "most advanced N-protein inhibitor in development". In the phase 2 challenge study, it was safe and well-tolerated. In terms of effect, it reduced viral load and symptoms of infection.
This 179 participant challenge study (NCT03691623) was written up in an 02/2022 article in the New England Journal of Medicine supporting its effects. It concluded, in addition to its favorable safety profile, all four dosing regimens were superior to placebo in terms of their effect as noted and in lowering mucus weight.
During the Call, Luly characterized the RSVP study as:
...a Phase 2b trial in otherwise healthy adults with community-acquired RSV infection... designed to confirm in a community-acquired setting the positive results of our Phase IIa challenge study and to further characterize efficacy by measuring symptom alleviation and viral load decline.
The good news for Enanta shareholders is that enrollment in the study is complete. The plan is to report topline data later this quarter.
Enanta's other two phase 2 studies are expected to see enrollment extending into 2023. They include:
RSVPEDs, a phase 2 study in pediatric patients with RSV (NCT04816721, estimated completion date of 12/2023) and
RSVPTx, a study in adult hematopoietic cell transplant recipients with RSV (NCT04633187, estimated completion date of 12/2022).
The cell transplant study is a larger study of 200 patients. Since enrollment is extending into 2023, its completion date will obviously extend beyond the date listed above from clinicaltrials.gov.
Enanta is going "all in", on its RSV trials. It plans to start yet another phase 2b trial in high-risk adult patients in the fourth quarter of 2022. Its strategy is to focus its RSV treatment on high-risk populations where it believes their suboptimal RSV immunity and greater RSV disease severity and mortality can best showcase EDP-938's full potential.
As an aside, Enanta has some 34 clinical trials listed on clinicaltrials.gov; the overwhelming majority of which (27) are shown as completed. That is a tremendous body of completed trials which have resulted in but two marketed therapies as discussed below.
Enanta's revenues help it with its expenses, but they are slowing
Enanta's main claim to fame is its highly successful research and development collaboration with AbbVie (ABBV) which resulted in two successful HCV therapies. First was its paritaprevir included in AbbVie's Viekira Pak (ombitasvir/paritaprevir/ritonavir tablets; dasabuvir tablets) in treatment of HCV.
Viekira Pak FDA approval generated a $75 million milestone for Enanta. Subsequently, AbbVie discontinued Viekira Pak after it was associated with rare cases of liver toxicity.
More recently Enanta discovered glecaprevir which it developed with AbbVie. Glecaprevir was co-formulated as part of AbbVie's direct-acting antiviral combination treatment for HCV, which is marketed under the tradenames MAVYRET (U.S.) and MAVIRET (ex-U.S.).
The FDA approved MAVYRET in 08/2017. Enanta earns royalties in accordance with the schedule below:
Enanta Q2, 2022 Earnings Presentation
Enanta Q2, 2022 Earnings Presentation (ir.enanta.com)
Since its 2017 approval, Glecaprevir generated royalties totaling $722 million per Enanta's fiscal year ending 09/2021 10-K. As of 03/31/2022, it generated an additional ~$46 million.
The pandemic has negatively impacted sales of MAVYRET, as have declining patient counts as more patients are cured. AbbVie's 10-K shows sequential MAVYRET revenue declines of ~37% from pre-pandemic year 2019 to year 2020. The decline moderated to a decline of ~7% from year 2020 to year 2021. AbbVie has guided to essentially flat MAVYRET revenues for 2022. Enanta's fiscal 2021 MAVYRET revenues were ~$97 million.
Enanta's liquidity is easily sufficient for its near to mid-term needs
Enanta offered no projections for future revenue during the Call. CFO Mellett did offer the following revenue observation:
..for our second fiscal quarter ended March 31, 2022...total revenue was $18.7 million and consisted entirely of royalty revenue earned on AbbVie's global HCV product sales of $380 million. This compares to total revenue of $20.1 million for the same period in 2021. This decrease is due to treated patient volumes continuing to remain suppressed compared to pre-COVID levels.
Additionally, Mellett noted:
Enanta ended the quarter with $322.5 million in cash and marketable securities. Enanta expects that its current cash, cash equivalents and marketable securities as well as its continuing royalty revenue will be sufficient to meet the anticipated cash requirements of its existing business and development programs for at least the next two years.
With so many little biotechs stretched for cash, Enanta situation appears enviable. Its cash flows are in good shape over the near term. Nonetheless as shown by its operating results below from its Q2, 2022 10-Q, it is slowly running through its liquidity:
Enanta Q2, 2022 10-Q excerpt
Enanta Q2, 2022 10-Q excerpt (seekingalpha.com)
Enanta's operations as shown above are leaking solvency; its pristine balance sheet below presents a much brighter picture:
Enanta Q2, 2022 10-Q excerpt, 1st column showing Q2, 2022, 2d column showing previous quarter
Enanta Q2, 2022 10-Q excerpt, 1st column showing Q2, 2022, 2d column showing previous quarter (seekingalpha.com)
Enanta's aggregate liabilities for its latest quarter are easily manageable and show no signs of operational stress.
As for Enanta's share price, it is likewise comforting, although it has popped and dropped over the last year as shown below:
Chart
Data by YCharts
Conclusion
Existing Enanta shareholders are likely kicking themselves for holding during its brief 11/05/2021 run to over $100 for no apparent compelling reason. Been there, done that.
As I write on 05/17/2022, Enanta shares trade at ~$50 with a market cap of ~$1 billion. By my thinking that is a fair price for a company with its finances and prospects as described. In this regard, I am mindful that Seeking Alpha's Quant Ratings and Wall Street Analysts both hold it in higher regard.”
ENTA’s enterprise value at the current share price ($51.50) is about $900M. This is based on 24.7M fully-diluted shares (#msg-168831164) and pro forma cash of $353.3M (#msg-168831159), both figures as of 3/31/22.
ENTA’s fully-diluted share count @3/31/22=24.7M—unchanged since 12/31/21 (#msg-167844216).
The 24.7M figure above consists of: 20.6M basic shares on the 3/31/22 balance sheet (https://www.sec.gov/ix?doc=/Archives/edgar/data/0001177648/000095017022008483/enta-20220331.htm#consolidated_balance_sheets ); and 4.1M options outstanding at 3/31/22 (whether or not exercisable) (ibid, p.12).
ENTA’s pro forma cash @3/31/22=$353.3M—a decrease of $24.4M since 12/31/21 (#msg-167844185).
The $353.3M figure above consists of: $311.1M of net current assets on the 3/31/22 balance sheet (https://www.sec.gov/ix?doc=/Archives/edgar/data/0001177648/000095017022008483/enta-20220331.htm#consolidated_balance_sheets ); and $42.2M of marketable securities on the 3/31/22 balance sheet designated as long-term (e.g. bonds with a time to maturity greater than one year).
The main difference between the latest slide set and the previous version is on slide #15, which shows in vitro assays for EDP-323, the L-protein inhibitor for RSV.
I too noticed the lack of a meaningful update on the HBV program. HBV has apparently taken a back seat to EDP-235, at least for now.
Thanks Dew.
ENTA new corporate slide set (5/9/22):
https://ir.enanta.com/static-files/fb5db89a-b15b-4820-9e77-b8c5b087f869
ENTA FY2Q22* financials—royalty_revenue=$18.7M—3/31/22_cash=$322.5M (down from $347.7M at 12/31/21):
https://ir.enanta.com/news-releases/news-release-details/enanta-pharmaceuticals-reports-financial-results-its-fiscal-31
FY2Q22 R&D expenses were $42.1M, inline with prior guidance of $150-170M for FY2022; FY2Q22 SG&A expenses were $10.5M, very slightly above the annualized run rate of prior guidance of $35-41M for FY2022 (#msg-166871344).
--
How ENTA’s Mavyret royalty is calculated
ENTA’s royalty rate on Mavyret sales 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). The royalty tiers reset at the start of each calendar year (like tax brackets), so ENTA’s royalty rate is highest in the fourth calendar quarter (ENTA’s fiscal* Q1) and is lowest during the first calendar quarter (ENTA’s fiscal* Q2).
During calendar 1Q22 (ENTA’s FY2Q22*), ABBV sold $380M of Mavyret (#msg-168696795), noting that HCV new-patient starts were still below pre-pandemic levels. In Feb 2022, ABBV issued calendar-2022 guidance for Mavyret sales of $1.7B (#msg-167728327). ABBV left this guidance unchanged in May 2022 after reporting 1Q22 results.
*ENTA’s fiscal year ends on September 30.
Paxlovid misses primary endpoint in post-exposure prophylaxis:
#msg-168706013
Thanks.
The response and use of the word "inoculation" makes more sense in that regard.
He’s using the word, inoculation to mean infection with the virus. I.e. he mistakenly thinks ENTA’s 'RSVP' trial is a “challenge” study.
As noted in my prior post here (and also on Twitter), the poster in question also does not understand the MoA of EDP-938.
I'm still just trying to unpack the first tweet?!?
Sounds like he's confused; he has a lot of followers on Twitter, but he's not a science person.
Use of a P-glycoprotein inhibitor (https://twitter.com/Biohazard3737/status/1519372525263802373 ). Can you comment on this? TIA
What technical details?
It seems to me that @Biohazard3737 (“Sheep of Wall Street”) is drawing a negative inference about EDP-235 based on the technical details of the potency assays used by ENTA without his considering alternative explanations for the way the assays were conducted. Only people inside ENTA would know the rationale for these details, as far as I can tell.
Regarding RSV, @Biohazard3737 evidently does not understand that the MoA of EDP-938 (an N-protein inhibitor) is intended to work later in the course of an infection than a fusion inhibitor. Of course, the RSVP trial might fail to meet its primary endpoint, but if that happens it won’t be for the reason cited by @Biohazard3737.
I read the guy’s dismissal of EDP-235 and it doesn’t make sense. He doesn’t state why it wouldn’t be an important drug if approved. Obviously we need efficacy data in Covid patients after safety data comes in this quarter. However, EDP-235 advantages would be significant as it would be only one pill a day and no need for a second drug to maintain Paxlovid levels high, and the drawbacks that has regarding other drugs.
My two replies (one re RSV and one re EDP-235) are within the same thread.
And what were your replies to those comments?
Tweet thread from a short:
https://twitter.com/Biohazard3737/status/1519372523892363266?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E1519372523892363266%7Ctwgr%5E%7Ctwcon%5Es1_&ref_url=https%3A%2F%2Fpublish.twitter.com%2F%3Fquery%3Dhttps3A2F2Ftwitter.com2FBiohazard37372Fstatus2F1519372523892363266widget%3DTweet
I replied to two of the tweets in the thread.
Shionogi PR re COVID antiviral fails to mention teratogenicity!
https://www.businesswire.com/news/home/20220423005001/en
Shionogi is evidently acting like MRK did with Molnupiravir—i.e. pretending that a safety issue does not exist. In MRK’s case, the result was a product with essentially no demand because the FDA EUA restricts usage to patients “for whom alternative COVID-19 treatment options authorized by the FDA are not accessible or clinically appropriate” (#msg-167236732).
Wow, ENTA has been a roller coaster recently. I look forward to the rebound tomorrow.
Some_patients_may_need_longer_treatment_course_of Paxlovid, according_ to_anecdotal_info:
https://www.bostonglobe.com/2022/04/21/metro/puzzling-phenomenon-patients-report-rebound-covid-19-symptoms-after-taking-antiviral-paxlovid/
The FDA EUA specifies a 5-day treatment course because that’s what PFE tested in its clinical trials.
Ascletis’ ASC11 could be a serious competitor to EDP-235 based on the in vitro assays of potency described in the PR (https://finance.yahoo.com/news/ascletis-announces-3clpro-inhibitor-asc11-085000053.html ). However, the most consequential differentiators among agents from this drug class are safety and pharmacokinetics, and Ascletis’ PR is silent on these points. We’ll have to wait for Ascletis’ phase-1 data in late 2022 (or early 2023) to know how their drug actually stacks up.
Thoughts on the news from ASCLF today on a possible best in class competitor?
XBI was -4.8%, so today’s selloff was not ENTA-specific.
Why the purge today? Yikes.
One fewer serious competitor for EDP-235.
https://www.bloomberg.com/news/articles/2022-04-13/shionogi-falls-most-in-decade-on-birth-defect-risk-of-covid-pill
"The pill’s [shionogi's covid antiviral] chance of commercial success fell to 5% from 50% after the report tying it to birth defects, which may make it less competitive, said Stephen Baker, an equities analyst at Jefferies & Co."
also
" Demand for drugs to treat Covid is fierce as the world transitions to an endemic state and the focus shifts to easy-to-take medications."
--------------
Enanta's covid candidate EDP-325 is expected to finish it's Phase 1 MAD and SAD dosing in the 2nd quarter and commence phase 2 in Q3
ENTA’s EDP-235 presentation slides and poster at the ASBMB* annual meeting:
https://www.enanta.com/wp-content/uploads/2022/04/Enanta_EDP-235-ASBMB-Annual-Meeting-Seminar_Final.pdf
https://www.enanta.com/wp-content/uploads/2022/04/EDP-235-2022-ASBMB-Annual-Meeting-Poster-Final.pdf
*American Society for Biochemistry and Molecular Biology.
(ENTA)—PFE acquires private RSV-therapeutics company for undisclosed up-front and $525 biobucks:
https://www.businesswire.com/news/home/20220407005081/en/
https://www.evaluate.com/vantage/articles/news/deals-snippets/pfizer-doubles-down-respiratory-syncytial-virus
Reviral (the private company being acquired) has an RSV fusion inhibitor, Sisunatovir, in phase-2 trials for hospitalized infants (https://www.businesswire.com/news/home/20210616005103/en ) and immune-comprised adults, with data from both expected in 2H23. Reviral also has an N-protein inhibitor in phase-1.
As ENTA’s Jay Luly has mentioned on many occasions, RSV fusion inhibitors, which seek to prevent the virus from entering cells, haven’t worked especially well for patients who have a high viral load at treatment start. That’s why ENTA’s lead RSV compound is the N-protein inhibitor, EDP-938. ENTA expects to report phase-2b (‘RSVP’) data for EDP-938 during 2Q22; the phase-2a data were recently published in NEJM (#msg-167916018).
ENTA also has a second RSV compound, EDP-323, an L-protein inhibitor; this is an MoA no other company is pursuing (yet), as far as I know.
PFE hits_goal_of_shipping_6M_courses*_of Paxlovid during_1Q22:
https://finance.yahoo.com/news/1-pfizer-made-6-mln-214629742.html
The company's targets for 2Q22 and full-year 2022 are 24M and 100M courses, respectively. Demand is not an issue—PFE does not expect to have any problem whatsoever in selling as many courses as it can produce.
*Each course of treatment consists of 20 tablets of Paxlovid and 10 tablets of ritonavir.
New Covid Variant XE Found In UK, More Transmissible Than Omicron: WHO
https://www.ndtv.com/world-news/new-covid-variant-xe-found-in-uk-more-transmissible-than-omicron-who-2858643
Continued need for ENTA’s anti-viral candidate.
ENTA’s EDP-235 featured in C&EN:
https://cen.acs.org/business/next-generation-COVID-19-antivirals/100/i11
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