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Zelicapavir (EDP-938) study results in HCST study
This pt population continued to be very cautious post covid w masking etc making enrollment difficult so the study was terminated early
there were 6 efficacy evaluable patients, 3 tx and 3 pbo, with detectable RSV by PCR.
Mean reduction in VL was -7.072 log in the tx arm versus -2.221 in the pbo arm
clinical endpoint of patients progressing to respiratory failure/mechanical ventilation was zero in both arms, not surprising w such low enrollment
While N is very low this is still a very dramatic difference in VL reduction in a real world setting and bodes well IMO for the outcome of the peds study where change in VL is a primary outcome
https://clinicaltrials.gov/study/NCT04633187?term=edp-938&rank=9&tab=results
If you think the proper definition of real cash is 149M (your take) and they burn around 100M a year then they have 6 quarters in which to do something.
The company states they have cash for about 12 more quarters.
That’s quite the disconnect
Every small biotech has to “win” (in court or in the pipeline) before cash runs out
The $174.2M figure can also be derived by summing the current ($32.3M) and non-current ($141.9M) balance-sheet lines for, "Liability related to the sale of future royalties" on the 6/30/24 balance sheet.
I’d also point out that the $200 of debt isn’t $200 anymore, its been partially paid down. The 6/30/2024 Q says the balance as of 6/30/2024 is $174 million. See page 12 of https://www.sec.gov/Archives/edgar/data/1177648/000095017024092714/enta-20240630.htm
If you believe that 54.5 percent of the royalty stream is worth at least $174 as of 6/30, the remaining unemcumbered 45.5 is worth at least $145.
I agree. Focusing on the “shareholder equity” line on the GASP balance counts the royalty stream obligation as a liability but fails to include any value for the royalty stream — that may be the proper GAAP treatment but seems especially wrong from an economic standpoint where the “liability” is nonrecourse and secured by only 54 percent of the royalties.
yes semantics, except that rocky feels this is the correct way to look at the financial health of the company
Stepping back, I understand this is old, but I never understood this entire discussion and now that I’ve looked at the financial statements, it seems clearer than ever that it’s all semantics.
The bottom line is that ENTA received $200 million and agreed to pay back 1.42x that amount over time. Assuming the cap will be reached, you can view it as
(I) a sale of $200 million of future royalties for $284 million (providing the buyer with an estimated IRR of 5.6%), in which case the $284 million of royalties would be income to the buyer and not to ENTA but there would be no explicit financing charge on an the ENTA financial statements. Presumably ENTA would report the $200 million of proceeds as income or
(II) a borrowing, in which case ENTA is paid the $282 million of royalties, treats that as income but pays it all over to the “lender”, $200 million as principal and $82 million as interest. The net effect of this is that ENTA has $200 million of income (since the principal repayment is not a deduction) over the life of the deal, exactly equal to the cash “borrowing” proceeds, and the same net result as in (I).
The second of these is what ENTA bean counters decided was appropriate. And the financial statements, including the cash flow, which adjusts from income statement, makes appropriate adjustments.
Sure and I think that is another proper way to look at the transaction - higher burn*, but more net** cash on hand to cover that burn after the transaction
* burn is still lower than most small bios that have zero royalty interest
** net bc the debt on the balance sheet equates to less income rather than a true liability owed
Glad we now agree :)
Is Enanta Pharmaceuticals (NASDAQ:ENTA) Using Debt In A Risky Way? June 19, 2024
According to the last reported balance sheet, Enanta Pharmaceuticals had liabilities of US$54.6m due within 12 months, and liabilities of US$192.8m due beyond 12 months. Offsetting this, it had US$300.3m in cash and US$39.8m in receivables that were due within 12 months. So it can boast US$92.7m more liquid assets than total liabilities.
This surplus strongly suggests that Enanta Pharmaceuticals has a rock-solid balance sheet (and the debt is of no concern whatsoever). Having regard to this fact, we think its balance sheet is as strong as an ox. Simply put, the fact that Enanta Pharmaceuticals has more cash than debt is arguably a good indication that it can manage its debt safely. The balance sheet is clearly the area to focus on when you are analysing debt. But it is future earnings, more than anything, that will determine Enanta Pharmaceuticals's ability to maintain a healthy balance sheet going forward.
Read more:
https://simplywall.st/stocks/us/pharmaceuticals-biotech/nasdaq-enta/enanta-pharmaceuticals/news/is-enanta-pharmaceuticals-nasdaqenta-using-debt-in-a-risky-w-1
I like that you take this view, and imagine others do too. It artificially suppresses the share price and over time this debt gets written down simply by transferring a portion of the royalty to the creditor without drawdown from cash on hand
Your objection is noted, but this matter has been previously debated on this board and there is nothing new to say about it.
Correction—#msg-174935984 says:
got it, and I appreciate your going through the balance sheet bc it's easy to forget they have this substantial tax asset - their PR states 272M in cash but it really is 300M and change when you factor in that receivable
Understood. My method of counting fully-diluted shares is intentionally a worst-case scenario. In the same vein, in my calculation of pro forma cash, I don't give the company credit for the cash it receives when stock options are exercised.
You’re the best at sharing information!!
Thank you!
4.36M of the 5.86M shares have an average exercise price of 52.68
when that many options are that far out of the money it's worth pointing out IMO
Thank you! Do you have anything where you also assign values to drugs in the pipeline, lawsuits, etc…
Are you referring to the post at #msg-172945060? The numbers have changed slightly since that post was written in Oct 2023, but the basic idea is the same: After taking into account ENTA’s net cash and its retained 45.5% ownership of the Mavyret royalty stream, investors are ascribing a negative valuation to ENTA’s pipeline.
Dew in the past you posted a value assigned to each major asset, and a
Risk, etc.. to arrive at share price. Do you happen to have that info for ENTA that you could share? No worries if that’s not something you have or wish to share.
Thank you!
Randy
ENTA’s fully-diluted share count @6/30/24=27.04M—unchanged since 3/31/24.
The 27.04M figure consists of: 21.18 basic shares on the 6/30/24 balance sheet (https://www.sec.gov/ix?doc=/Archives/edgar/data/0001177648/000095017024092714/enta-20240630.htm p.3); and 5.86M options and unvested restricted-stock shares and equivalents (whether or not exercisable) (ibid, p.9).
ENTA’s pro forma net cash @6/30/24=$303.2M—excluding balance-sheet “debt” relating to ENTA’s deferred-royalty obligations, which is a GAAP artifact rather than an actual debt instrument.*
The $303.2M figure, which declined $26.9M since 3/31/24, consists of:
• $260.6M net current assets on the 6/30/24 balance sheet (https://www.sec.gov/ix?doc=/Archives/edgar/data/0001177648/000095017024092714/enta-20240630.htm p.3), after excluding the $32.3M line under Current Liabilities called, “Liability related to the sale of future royalties.” *
• $42.5M of marketable securities on the 6/30/24 balance sheet (ibid) designated as long term (e.g. T-notes and bonds with a time to maturity greater than one year).
*The GAAP treatment for ENTA’s deferred-royalty “debt” is described in #msg-172603887.
The US is experiencing its largest summer Covid wave in at least two years
It may be time to dust off the face masks and air purifiers.
The US is in the midst of a significant Covid-19 wave, and when the US Centers for Disease Control and Prevention updates its wastewater dashboard on Friday, experts expect it to confirm that viral activity levels are the highest they’ve been during a summer surge since the CDC began publicly tracking such data in January 2022.
As of August 3, the CDC’s measure of national Covid viral activity in wastewater is at 9.01 and rising - just shy of the peak at 9.28 in July 2022. Before it started rising again in May, it was at 1.36.
Read more:
https://www.cnn.com/2024/08/16/health/covid-largest-summer-wave/index.html
no real news until Q4 so if you are a trader probably not the best, but if you are an investor it is IMO very undervalued
I briefly went through the link - what seems to have happened is that the judge let the case proceed to trial (not granting summary judgement to invalidate the patents), then after the trial reversed the jury's verdict claiming now there was enough to invalidate the patents summarily
so you can win the summary judgment and get the case to trial, win the trial, and still lose the case in the end
obviously I agree is is hard to see how this would impact the odds for enanta - each case is unique
Looking where to redeploy RVNC funds and looked at this, a previous holding, but this chart looks to be the absolute worst in my biotech watch list. Can’t touch this.
Thanks for the correction.
Maybe PFE's lawsuit win against PUMA spooked or confused ENTA investors.
https://finance.yahoo.com/news/federal-judge-rejects-patent-claims-211116499.html
in a more serious note, it seems today AI names and some of the big techs are rebounding.. and that probably drawing money out from small caps ($IWM and bio index, etc...). I am kind of glad that RVNC is sold, otherwise, day like today, it will probably be down 10% randomly.
because I moved some RVNC money to ENTA?
No clue
Latest earnings from competitors in the KiT Space (but this is a few days ago and regardless nothing material):
THRD phase 1 readout for kit inhibitor from q1 2025 (previously I thin q2). BPMC started phase 1 for their candidate but this was expected
Any reason for ENTA falling 7% today other than normal market ups and downs? I bot 2500 shares today.
Looks like PFE lost a similar motion back in may:
“Magistrate Judge Jennifer C. Boal: ORDER entered. re 160 MOTION to Compel Production of Documents Improperly Withheld as Privileged filed by Pfizer Inc. (Hutchins, Aaron)”
Im hoping all of this info that each side seems to want to keep suppressed means that there is enough here to need to go to trial
Enanta Pharmaceuticals, Inc. v. Pfizer Inc.
Friday, August 09, 2024
367 Notice Setting or Resetting Hearing on Motion Fri 08/09 9:15 AM
ELECTRONIC NOTICE Setting Hearing on Motion296 MOTION to Compel Defendant Pfizer Inc. to Produce Documents and Provide Deposition Testimony : Motion Hearing set for September 25, 2024 at 11:30 AM in Courtroom 14 (In person only) before Magistrate Judge Jennifer C. Boal. Plaintiff Enanta Pharmaceuticals, Inc. has filed a motion to, among other things, compel Pfizer to produce an April 6, 2022 email as well as the attachments to that email. Docket No. 296. Defendant Pfizer, Inc. maintains that the email is privileged and has offered to submit the email ex parte for in camera review. See Docket No. 334 at 17. No later than August 22, 2024, Pfizer shall submit the email and attachments for in camera review. The documents must be submitted in hard copy at the Clerk's Office and marked DO NOT DOCKET, SUBMITTED FOR IN CAMERA REVIEW. (Hutchins, Aaron)
https://www.pacermonitor.com/public/case/44980990/Enanta_Pharmaceuticals,_Inc_v_Pfizer_Inc
Inch by inch, we're getting there -
Barbara A. Fiacco - ENTA's Attorney - additional info -
She has represented leading pharmaceutical and life sciences clients in significant patent infringement lawsuits that have resulted in summary judgment or other favorable outcomes for her clients. Barbara also represents these clients in trade secret, inventorship, and technology transfer disputes as well as other commercial litigation.
Barbara is a Past President of the American Intellectual Property Law Association (AIPLA) and a Past President of the United States section of the International Association for the Protection of Intellectual Property (AIPPI-US), serving from 2019 to 2020. She has held a number of leadership roles in AIPLA and has represented this premier intellectual property law association in testimony on behalf of AIPLA before the Senate Judiciary Committee’s Subcommittee on Intellectual Property as well as in amicus briefs to the Supreme Court.
https://foleyhoag.com/people/fiacco-barbara/
FWIW - Patents Assigned to Enanta Pharmaceuticals, Inc.
Hepatitis B antiviral agents
Patent number: 12054493
Abstract: The present invention discloses compounds of Formula (I), or pharmaceutically acceptable salts, esters, or prodrugs thereof: X-A-Y-L-R??(I) which inhibit the protein(s) encoded by hepatitis B virus (HBV) or interfere with the function of the HBV life cycle of the hepatitis B virus and are also useful as antiviral agents. The present invention further relates to pharmaceutical compositions comprising the aforementioned compounds for administration to a subject suffering from HBV infection. The invention also relates to methods of treating an HBV infection in a subject by administering a pharmaceutical composition comprising the compounds of the present invention.
Type: Grant
Filed: January 7, 2021
Date of Patent: August 6, 2024
Assignee: Enanta Pharmaceuticals, Inc.
Inventors: Yao-Ling Qiu, Xuri Gao, Wei Li, Hui Cao, Meizhong Jin, Jorden Kass, Xiaowen Peng, Yat Sun Or
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