Enanta Pharmaceuticals Inc (ENTA)

[vinmantoo]

So....how long will it be till the Pfizer is replaced by a non-boosted one? A once a day antiviral instead of a twice a day?
I guess the market thinks covid is departing. But is it?

If EDP-235 turns out to be the real deal, it will be the choice over Paxlovid. Governments will want a stockpile to be ready if Covid surges again, and that is a huge market.

[willyw]

(written but not posted Valentines day Monday 2/14)
I know that the posts are merely observing that money is moving out of covid; Molnupiravir, Moderna, Pfizer, Novamax. I guess that Mr. Market has spoken and the market is always right. : )
I have to wonder if covid is over. I have to wonder if this is an opportunity.
The news with Molnupiravir shows us that a superior antiviral will beat out an inferior one. So....how long will it be till the Pfizer is replaced by a non-boosted one? A once a day antiviral instead of a twice a day?
I guess the market thinks covid is departing. But is it?

Even without a new variant, there is no reason to think that Delta or Omicron will magically leave. They will stay and still have lots of un vaxxed and unboosted to infect.
https://www.mayoclinic.org/coronavirus-covid-19/vaccine-tracker

So I wouldn't celebrate too fast.
And we are seeing that boosting only lasts so long.
Covid can revisit the past infected, the un vaxxed and underboosted.
So for me, it looks like a time to bet that it isn't ending, that it will continue. Is the USA still populated with the old, the overweight? Diabetics? People with multiple co-morbidities? Cancer patients/ people w/ compromised immune systems? People who eschew vaccinations, boosters, masks and mandates?

Were I to guess we may have a series of descending waves- but we are FAR from over. Perhaps the tremendous years Pfizer has had may be decreasing, but I have a sense of optimism about the next best in class antivirals.

Finally..... what if there is yet another variant?

And it appears that there IS yet another variant.
Even as many proclaim that the pandemic is over.
Right or wrong I have been adding as the share price dropped.

[JK2016]

A new drug shows promise against respiratory virus, study shows
By Brenda Goodman, CNN

Updated 1:39 PM ET, Thu February 17, 2022
A 3-year-old patient in the hospital receives medication via an inhalation mask to treat Respiratory Syncytial Virus (RSV).
A 3-year-old patient in the hospital receives medication via an inhalation mask to treat Respiratory Syncytial Virus (RSV).
(CNN)A new antiviral medication against respiratory syncytial virus, or RSV, appears to be safe and lowered viral levels and symptoms significantly more than a placebo, according to the results of a study published Wednesday in The New England Journal of Medicine.

The study is unusual in that it is based on a two-part human challenge trial, where researchers purposefully infect people with a pathogen to test a new therapy. Challenge studies speed up research because scientists don't have to wait for their study participants to get sick out in the real world. They can also enroll fewer people, knowing that participants will inevitably catch a germ. But they're also risky and only considered ethical when the need for a new treatment or therapy is thought to outweigh the potential risks to study participants.

[DewDiligence]

Comments on ALGS' ALGS-097111: #msg-167924816.

[DewDiligence]

ENTA’s PR on NEJM article:

https://www.enanta.com/investors/news-releases/press-release/2022/Enanta-Pharmaceuticals-Announces-Publication-in-The-New-England-Journal-of-Medicine-of-Data-from-the-Phase-2a-Human-Challenge-Study-of-EDP-938-for-the-Treatment-of-Respiratory-Syncytial-Virus-RSV/default.aspx

[DewDiligence]

ENTA’s phase-2a RSV trial published in NEJM:

https://www.nejm.org/doi/full/10.1056/NEJMoa2108903

[JK2016]

And the dosing begins with expected read out Q2.

[DewDiligence]

ENTA’s fully-diluted share count @12/31/21=24.7M—an increase of 0.3M since 9/30/21 (#msg-166903176).

The 24.7M figure above consists of: 20.5M basic shares on the 12/31/21 balance sheet (https://www.sec.gov/ix?doc=/Archives/edgar/data/0001177648/000095017022001018/enta-20211231.htm p.2 ); and 4.2M options outstanding at 12/31/21 (whether or not exercisable) (ibid, p.11).

[DewDiligence]

ENTA’s pro forma cash @12/31/21=$377.7M—a decrease of $13.6M since 9/30/21 (#msg-166903163).

The $377.7M figure above consists of: $289.1M of net current assets on the 12/31/21 balance sheet (https://www.sec.gov/ix?doc=/Archives/edgar/data/0001177648/000095017022001018/enta-20211231.htm p.2); and $88.7M of marketable securities on the 12/31/21 balance sheet designated as long-term (e.g. bonds with a time to maturity greater than one year).

[willyw]

Dang; BMY's Daclatasvir

[willyw]

Yes, thanks for the transcript Dew. I sometimes have trouble hearing and need the transcripts to affirm what I thought I heard.

So far as some derisking - both the RSV and Covid phase 1 data at the 54:25 minute mark Luly mentioned both will be complete next Q.
EDP-325 phase 2/3 covid should start in the 2nd half.

RE: EDP 514, it almost appears that Enanta is in no hurry to partner with sub-optimal HBV compounds that stand lesser chances of success.

Gilead's HCV program succeeded due to several shrewd acts;
1) They were willing to pay more than anyone for the best nuke.
2) They partnered, then abandoned Merck'sDaclatasvir as a second combination agent (with their own in house NS5a Ledipasvir), thus retaining 100% of the HCV sales from the start.

I have to suspect that this is what Enanta would like to do with HBV. I'd guess that they are trying hard to find another/create another MOA or agent to combine EDP-514 with. That act of not partnering may show some confidence in what they have (EDP-514) and -perhaps- confidence that they can create a 2nd compound in house.

IMHO, this also rather explains also WHY the L- inhibitor in RSV.
IF Enanta can have a total lock on RSV from the get go they may reduce the enticement for others to follow in with vaccines or anti-virals.
SURE- many tried with HCV.... but how many succeeded? Still trying? Few- very few.

Time will tell if that could repeat with RSV and HBV.

[vinmantoo]

Thanks Dew. Good to hear that EDP-235 will begin phase I trials this month. Plenty of room for and money to be made with a best-in-class Covid protease inhibitor.

I will feel even better when another HepB drug is chosen for trials for future combination with EDP-514.

[DewDiligence]

ENTA FY1Q22 CC transcript:

https://www.fool.com/earnings/call-transcripts/2022/02/09/enanta-pharmaceuticals-enta-q1-2022-earnings-call/

[DewDiligence]

Phase-1 for EDP-235 (qD SARS-CoV-2 protease inhibitor WITHOUT ritonavir boosting) will stat during Febuary:

https://www.sec.gov/Archives/edgar/data/0001177648/000095017022000875/enta-ex99_1.htm

[DewDiligence]

ENTA FY1Q22* financials—royalty_revenue=$27.6M—12/31/21_cash=$347.7M—(down_from_$352.4M_@9/30/21):

https://www.sec.gov/Archives/edgar/data/0001177648/000095017022000875/enta-ex99_1.htm

FY1Q22 R&D expenses were $48.5M, slightly high relative to prior guidance of $150-170M for the full FY2022; FY1Q22 SG&A expenses were $9.5M, inline with prior guidance of $35-41M for full fiscal 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 4Q21 (ENTA’s FY1Q22*), ABBV sold $427M of Mavyret (#msg-167727290), noting that HCV new-patient starts were still below pre-pandemic levels. ABBV issued calendar-2022 guidance for Mavyret sales of $1.7B, unchanged from the calendar-2021 number (#msg-167728327).

*ENTA’s fiscal year ends on September 30.

[willyw]

As it pertains to Enants's Covid program
https://www.marketwatch.com/story/shionogi-aims-to-begin-global-phase-3-trial-of-covid-19-pill-late-february-271643611039

"Currently, Shionogi is conducting what it calls a Phase 2b/3 trial in Japan and some other countries but not in the U.S. That trial is expected to end by late July this year, it said. Separately, it said it is talking to the Food and Drug Administration and the European Medicines Agency about a global Phase 3 trial that it targets to begin in late February."
---------

It appears that Shionogi's covid program entered phase 1 the end of July- 6 months ago. Which may help gauge the speed of Entanta's program.
As the Pfizer covid antiviral will be first to market it should see huge demand, but it will not likely be best in class and could soon yield to an unboosted antiviral- such as Shionogi's.

As recently as 3 weeks ago at the JP Morgan healthcare conference J Luly reiterated that there will be a shortage of covid antiviral product and that Enanta could have potentially a best in class protease inhibitor.
Enanta's drug will commence Phase 1 clinic in Febuary 2022.

[willyw]

What I'm kicking around is the trajectory of covid, the possible extended use of EUA which could greatly benefit ENTA, and the failures or weaknesses of Enanta's covid competitors. (MRK, AVIR, PRDS?--maybe ultimately PFE)

IF both Enanta and Shionogi did well with their covid theraputic protease inhibitors it's hard to see Paxlovid being a long term preferred med.
The question is how effective will they be? Will one be better? How quickly can they get US/EU approval?

It seems that the worst case covid investing scenario for Enanta would have been a short pandemic- like traditional influenza.

But instead the reverse happened; Alpha, then Delta, now Omicron, and there may be more resistant variants on the way.
There is still a lot of vaccine hesitancy. It seems obvious that a sizeable un-vaccinated (or under boosted) pool will remain and face both the current covid and future resistant strains. A prolonged pandemic with elusive cures may encourage the continued use of EUA.

Equally interesting as it pertains to VIR you can see that support can quickly be withdrawn. Can they scale up quick enough if the target keeps shifting? The antivirals look good there.

RE: HBV Enanta hasn't rushed into other collaborations. It makes me think that they prefer in-house. There truly may not be much out there worthy of a collaboration. Enanta can carefully tailor two Enanta compounds to work together instead of bolting together random parts available thru collaboration.
--Although the RNA destabilzer didn't work out they still may have some worthwhile data that helps with the next compound. Enanta has combined 514 with a nuke so they must have an idea of what they need for the next piece. I'm not sure the competition has that.

[vinmantoo]

A large number of biotech stocks are at or close to their 52 week lows now. I bought a small amount of several today including ABBV, ENTA, SGEN,IMGN and even CDMO. I was toying with opening a position in VIR as their monoclonal antibody is the only one that works with omicron and they are now scaling up production. One caveat is their HepB program doesn't look stellar to me but that is down the road.

[willyw]

LOL: Idenix. That's one I hadn't heard in a longer while. : )

IF I had thought there was potential for Zepatier level success I might have tripled my SMALL position.

Meanwhile I'm out 10-20 bucks for being impetuous.

[DewDiligence]

Zepatier—that's a name I hadn't heard in a while, LOL.

[willyw]

I purchased a small amount a few weeks ago to force my attention- which worked.
I had thought; well, what if it became a Zepatier?
But the more I investigated the less attractive it looked. That ended yesterday when I sold.

It was never just one thing, but a number of things- and that disquieting number only grew.

[DewDiligence]

ENTA’s insiders cumulatively own a 12.4% equity stake:

https://www.sec.gov/Archives/edgar/data/0001177648/000156459022001953/enta-def14a_20220303.htm#BENEFICIAL_OWNERSHIP_COMMON_STOCK

[DewDiligence]

More from PRDS S-1 filing (p.97):

All employees currently work remotely. We intend to lease office space and labs in mid-2022.

[DewDiligence]

That's a reasonable inference. PBI-0451 may need ritonavir boosting to enable qD dosing.

[vinmantoo]

PRDS phase-1a is investigating ritonavir boosting:

Sounds like the half-life of their protease inhibitor might not be as good as they hoped for to maintain an inhibitory concentration.

[DewDiligence]

PRDS phase-1a is investigating ritonavir boosting:

#msg-167618930

[vinmantoo]

What takes a lot of time is generating enough API for high-volume output. Producing small amounts of the drug for early-stage clinical trials is not a problem.

Agreed. My point was about manufacturing large quantities post-approval, which is why I say way down the road.

[willyw]

I cannot comment on that with any knowledge or authority.
Years back when I was in a Gilead trial I was curious where the drug batches came from for trials. I'm in Iowa, and as it happened it seemed that one location may have been my hometown.

I think there may be a difference between the early trials and small batches and the large scale final formulations. Recall that in NASH Enanta shifted I think from a liquid to pill form which changed the bio-availability.

I think both Enanta and Pardes maintained they had adequate funding (and I think adequate supply) until such a time as large amounts of drug (and I'd suppose some registered/validated process of mass production) was required. I'm absolutely out of my depth here. : )

I also wonder if the EUA amount of drug required, let's say for a phase 2 is less than a standard amount for a full blown standard phase 2. It seemed to me that in vaccines one of the criticisms was that the FDA was proceeding with scant data -based upon trial participant cohort size.

Finally, the trial I was in I was in a 24 week once a day 200mg dose. (if I correctly recall)
In the case of Enanta it could be once a day between 100 to 500mg for 5 days. That's a large difference in quantity required.

[DewDiligence]

What takes a lot of time is generating enough API for high-volume output. Producing small amounts of the drug for early-stage clinical trials is not a problem.

[vinmantoo]

The article was primarily about Pardes which doesn't look that promising to me -albeit possibly better than Pfizer. In a recent pitch they mentioned that they were going to have to run more phase 1 in the USA, and the once a day dosing without boosting seemed a bit more tentative.

While it is well down the road and a lot of has to happen first, I wonder about how easy it will be to scale up ENTA's or Pardes' drugs. Pfizer says the chemistry of their drug is extremely complex takes several months to get the finished product, which limits how quickly and how much they can produce. I wonder whether such issues will arise for ENTA or Pardes.

[DewDiligence]

…I often wondered what is [Twitter’s] source of revenue…

If mobile access works the same way as the website, then I fail to see how Twitter makes money. I’m not a TWTR shareholder, so I guess I don’t need to know the answer :- )

[midastouch017]

[OT]—Registering for Twitter is free.

True (in Israel too)

I never see any ads (a/k/a promoted tweets),
and this can't be due to my having an browser-based ad-blocker

I have no ad-blocker, and see no ads.

I access Twitter using the website

Me too , as well as via mobile

maybe things are different for those who access
Twitter via mobile platforms.

Mobile=website same same.

As a matter of fact i often wondered what is their
source of revenue under the above?

[DewDiligence]

[OT]—Registering for Twitter is free. Moreover, I never see any ads (a/k/a promoted tweets), and this can't be due to my having an browser-based ad-blocker (which wouldn't be able to recognize promoted tweets as ads). I access Twitter using the website; maybe things are different for those who access Twitter via mobile platforms.

[willyw]

I don't know, but possibly.... just as paywalls have become more stringent I think twitter has tightened up content provided as a means to lever the unregistered.
I used to be able to view months, perhaps years.
Over time, but today particularly by clicking on your link a few posts back I could view 3 tweets of yours.
By clicking on your profile I am able to view 4 (the Pharmasett tweet being one)
By viewing $ENTA daily I am likely able to read yours as they arrive.

I suppose I should register or pay. Probably true also-subscribe to Ihub. : )

[DewDiligence]

I didn't realize there were restrictions on what a non-subscriber could read.

[willyw]

Yes. I read as much as I'm allowed to as an unregistered twitter lurker. I suppose I should register/join. I think in the past I could view more. It's a great resource. : )

[DewDiligence]

Good points. Did you read the other tweets in the thread I linked to?

[willyw]

The article was primarily about Pardes which doesn't look that promising to me -albeit possibly better than Pfizer. In a recent pitch they mentioned that they were going to have to run more phase 1 in the USA, and the once a day dosing without boosting seemed a bit more tentative.
Further, a follow on compound so close to their lead covid program seems to suggest a rushed entry.
The very last line in the article stated the Pardes compound *could* be approved at the very earliest by year end. That seemed like a stretch.

Shionogi seems far more promising. (I've seen no response data tho)

The covid landscape keeps changing. There always seems to be a new resistant variant to vaccines. The seriousness of covid to the unvaxxed remains, and may take a while before it visits both the unvaxxed and the less protected or immunocompromised/ aged/ groups plagued by other co-morbidities and diminishing vaccine protection. (4th shot boosters not very effective?)

On the other hand the focus on the main players in antivirals will become more clear - as will the treatment tail of covid. Will it become like the swine flu and depart, or will it become something more like a continual almost endemic- leaving far more slowly than we first expected?

Much like early HCV programs, the initial players success may be short lived. Pfizer's Paxlovid seems the main player. The Merck compound molnupiravir seems far less important.
The Pardes covid presentations might be better than their lead compound. : )

[DewDiligence]

More on the same topic:

https://twitter.com/DewDiligence/status/1483520010903605250

[DewDiligence]

Jay Luly exercised and held $600K of stock on 1/15/21:

https://www.sec.gov/Archives/edgar/data/0001177648/000106299322001104/xslF345X03/form4.xml

Exercising and holding—paying the withholding tax with cash rather than forfeited shares—is mathematically equivalent to an open-mkt purchase.

[willyw]

Even IF it was so that the Leerink price of $80.00 is correct....
we are still 20 dollars under that.

I feel as though once the covid molecule EDP-325 moves along and is de-risked the share price will move.

If ONLY the covid program is good- just that one thing will surely move us upward- well beyond $80.00/share.

[vinmantoo]

Willow,

We are on the same wavelength as I bought more yesterday and bought again today.

[willyw]

Enanta is thinly traded. So it doesn't take much trading to move the needle.
There was ONE downgrade of 5 dollars and it fell over $10 in two days. A downgrade might do that. A retiring board member selling shares adds fuel and velocity to the selling..... triggering yet more selling.

What will the stock trade at when they start covid clinic work in a few weeks?
When they post (and if) positive RSV data soon?
When (and if) they start covid phase 2/3 in second half of year?

I bought more today.

[vinmantoo]

Why the plunge today on a $5 price target drop?

Because the market isn't based on rational thought and logic.

[JK2016]

Why the plunge today on a $5 price target drop?

[DewDiligence]

Correct—the "second" MoA is an off-patent nuc.

[vinmantoo]

The main differences between the 1/11/22 slide set and the previous (11/18/21) slide set are in slide #15 (EDP-323 info) and #30 (2022 news flow).

Thanks Dew for the cliff notes version. In slide 30 they mention select a third mechanism for HBV combination regimen with EDP-514. I assume the second mechanism will be a nucleoside analog, right?

[DewDiligence]

The main differences between the 1/11/22 slide set and the previous (11/18/21) slide set are in slide #15 (EDP-323 info) and #30 (2022 news flow).

[DewDiligence]

ENTA new corporate slide set:

https://s22.q4cdn.com/306858242/files/doc_presentations/2022/01/Enanta-Corporate-Presentation-1.6.22-Final.pdf

[willyw]

the program is in phase-2/3 in Asia

AH, in that Enanta is running trials in other countries that wasn't clear to me- I assumed it was US.
Thanks.