Enanta Pharmaceuticals Inc (ENTA)

[DewDiligence]

New corporate slide set:

https://s22.q4cdn.com/306858242/files/doc_presentations/2019/11/November-21-2019-Corporate-Presentation.pdf

[DewDiligence]

ENTA’s follow-on FXR agonist is called EDP-297. Phase-1 is expected to start in mid 2020.

[DewDiligence]

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.

[DewDiligence]

Yet another: #msg-151617214.

[DewDiligence]

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

[DewDiligence]

Another bullish insider transaction: #msg-151441695.

[DewDiligence]

Musings on ENTA’s buyout vig: #msg-151399889.

[willyw]

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?

[DewDiligence]

FDA shortens approved Mavyret regimen for treatment-naïve cirrhotics to 8w for all genotypes:

https://finance.yahoo.com/news/abbvie-receives-fda-approval-mavyret-000000712.html

Mavyret is the only HCV regimen with an 8w FDA label for all treatment-naïve patients including cirrhotics.

[DewDiligence]

FDA shortens approved Mavyret regimen for treatment-naïve cirrhotics to 8w for all genotypes:

https://finance.yahoo.com/news/abbvie-receives-fda-approval-mavyret-000000712.html

Mavyret is the only HCV regimen with an 8w FDA label for all treatment-naïve patients including cirrhotics.

[willyw]

Many thanks! I always appreciate your informed and seasoned viewpoint.

[DewDiligence]

This isn’t a yes/no binary matter—it’s a question of probabilities. In other words, I’m not totally ruling out ENTA’s continuing to pursue NASH with EDP-305 or a follow-on FXR compound.

[willyw]

"It might be a mistake to interpret Luly’s comments on yesterday’s CC as the gospel truth." (wrote DD)

No question with a 15% drop in value the market is with you on this.
Thank you for your feedback. The default answer is that it is more safe to trust your take on this.

[willyw]

I'm certainly not as up to speed as w/ HCV, nor with you or others that have a greater depth of understanding than do I.

I think that based on the market most would agree that there might be better compounds or MOA's
STILL...Luly did seem to reiterate that he believed in FXR. I'll have to listen again.

I'm not saying that Luly doubled down on the higher dose 2.5mg (I really thought it was out of the picture), but he also seemed to be interested in higher dose (what if it were 2.mg?) for heavier lifting, but also the lower dose (1. or .75mg hypothetically) for a longer term or with coupled with a 2nd partnered agent.
The words he said made me think they would go ahead; but middle of next year gives one pause; not like we are starting enrollment next week. : )

So far as "surprise"; if you have about a 50% discontinuation rate at 2.5 and even a 2% discontinuation rate at 1.mg, some element is not a surprise; but yes, perhaps a surprise you've known about for a while.

Here's the thing.
When Vertex started phase 2a trials in what would become Telaprevir/Incivek caused severe rash- SJS (Stevens-Johnson syndrome). I met a guy in a trial that showed up in the ER, and it scared the hell out of the staff; like initial reaction as if the guy had ebola. : )
In time it became something that they would anticipate, and "try to stay ahead of". Same happened w/ simeprevir. This a a far more mild rash, and when people understand it won't kill them they may be less likely to drop out. Even doctors can get spooked. Rates can change when people know it's safer than their fears.

There may be ways to augment or modify TX where they can improve response without throwing out the compound.
(which is why other trials continue, subpar as they may be)

AND.... what if one of ENTA's other follow on compounds could be partnered? Luly and ENTA know a lot more about their cards than investors. They may even also know something about the other cards in other players hands.

I realize I'm spinning this to be positive on a down day. I may not be as far along as you are on wanting them to stop. Their best judgement is far better than mine. : )

[DewDiligence]

You make some good points. However, I’m not yet convinced that ENTA is serious about remaining in the NASH hunt for the long haul, as they were in HCV.

It might be a mistake to interpret Luly’s comments on yesterday’s CC as the gospel truth. It’s more likely, IMO, that ENTA was stunned by the EDP-305 results and wasn’t fully prepared to level with investors about the consequences.

[willyw]

Oh, I'm in agreement that Viekira wasn't a bust either for the company or for investors. It (and several other compounds and therapies) weren't the first and final iteration of what has become (what appears to be) the final HCV treatment. (IMHO, if money wasn't the object, it could be further developed to become more effective, shorter TX, improvement for certain harder to treat groups, etc- it just isn't economically feasible to try. It becomes harder as you approach 100% cure rate))

"HCV is neither"
Yes, that is true today, but as little as 7 years ago they had a completely different MOA, didn't understand the relatively great difference in response in various groups, genotype, alleles, and resistant mutation issues or with the toxicity of the interferon based therapies. I think I heard about the abbvie multiple cocktail in 2011 or 12, soon thereafter Gilead bought Pharmasett, just for one asset (7977) to be used w/IFN/RBV therapy, then in an antiviral cocktail. It's fairly recent history. Established now for 5ish years.

"NASH is a multifactorial and poorly understood disease"
I agree completely. Even now they are even trying to figure out how to diagnose NASH or how to quantify response, or qualify NASH damage for trials without biopsy.
I guess I am saying that ENTA is one of those who does possess some of that understanding of the disease, and if you were to compare results to Gilead or Intercept I cannot tell who is ahead. I haven't had time to compare the 3, but my guess is that ENTA did as well the 2 much larger companies.(but not strongly differentiated)
Perhaps this is why ENTA wants to press ahead. I think they possess a longer view than investors.

Comparing to back to HCV MAY be instructive for comparison reference.
Those companies without the understanding were not able to successfully acquire HCV assets. They spent lots of $$$ and ultimately failed. Ultimately, they couldn't buy, and couldn't develop internally so they backed away.

I'm just saying, ENTA seems to be prepared to fail a bit more, if that's requisite to do the work necessary for success.

ENTA remains a company with a strong background of success in liver disease and virology.

[DewDiligence]

I harken back to Viekira. What if ENTA had thrown in the towel after "failing" with that?

HCV might not be a helpful template for the way the NASH market will play out. NASH is a multifactorial and poorly understood disease, while HCV is neither.

p.s. Viekira had peak annual sales of $1.5B (in 2015), so it was by no means a complete bust.

[semi_infinite]

Thx. I must be confusing some recently released HBV results with Enta. Agree on RSV. I thought they are good enough but market reaction was bearish for whatever reason. Perhaps the 305 itching AE's were too loud to be not noticed by longs with some knowledge of patients involved in trial.

[DewDiligence]

…given so-so results in RSV and HBV (if recollection serves).

ENTA hasn’t yet had any clinical results in HBV.

In RSV, there isn’t any competition for a treatment (rather than a vaccine), so even a “so-so” drug in an absolute sense could be a big commercial success.

In short, ENTA’s pipeline definitely has value.

[semi_infinite]

Besides that FXR prospect, do you ascribe any value to the pipeline given so so results in RSV and HBV (if recollection serves).

[willyw]

Several points I'd make;

The price of the stock today shows market sentiment. It *seems* that there may be other compounds that are effective w/ fewer sides.

OTOH, I would argue that many of the players, like as was true in HCV, are still trying to sort NASH out. I still consider ENTA as having a fair amount of expertise in this area.

Given that..... I'm a little confused at Luly's response that the 2.5mg dose (or future undisclosed higher and lower dose, whatever they may be). It would seem that the community response it that the 2.5 dose is toast. Luly's response makes me feel ENTA hasn't discarded that. This leads me to feel that they still see it as potentially viable. I can't tell (from only having listened to it once) that they strongly favor one dose over the other. My thinking the 2.5 discontinuation rate makes it a non-player.

I harken back to viekira. What if ENTA had thrown in the towel after "failing" with that?



There seems like a disconnect in ENTA's response and the markets.

"I have not failed. I've just found 10,000 ways that won't work." Thos Edison

I'm not sure that ENTA is quite done with NASH (or FXR). I'm sure that several other companies probably are.

It is certainly true that both intercept and Gilead seemed positive with their results and the market was also very underwhelmed. My thinking is that the pros are less crushed by "failure" than the market. I have no clue. I only see the failure. Luly, ENTA and others who have expertise see the ares in which they succeeded and want to continue going to the next step.

The ultimate winner won't be the company that fails and quits. That may be the preferred course that many would take today. Fewer still are those who get it right on the first try.

[DewDiligence]

Do you see any value [for the 1.0mg dose] as a combo with molecules from mdgl/vktx or others?

Possibly. But I would rather see ENTA switch to their backup FXR compound than spend money seeking an opening for EDP-305 that might not exist.

[semi_infinite]

Too bad about the itching at 2.5mg. The 1 mg doesn't look bad in comparison with OCA if the 12 week itching data doesn't get worse with time. Do you see any value as a combo with molecules from mdgl/vktx or others?

[DewDiligence]

ENTA reports phase-2a NASH data for EDP-305: #msg-151356515.

[DewDiligence]

EDP-938 oral presentation at IDWeek* on 10/3/19:

https://www.enanta.com/investors/news-releases/press-release/2019/New-Data-from-Enantas-Phase-2a-Human-Challenge-Study-of-EDP-938-for-RSV-to-be-Presented-at-IDWeek-2019/default.aspx

https://www.idsociety.org/events2/events/2019/October/idweek-2019/

*Conference sponsored by Infectious Diseases Society of America (IDSA).

[DewDiligence]

New slide set (for today’s Baird webcast):

https://s22.q4cdn.com/306858242/files/doc_presentations/2019/08/September-4-2019-Corporate-Presentation.pdf

[DewDiligence]

USPSTF recommends HCV screening for essentially all US adults:

#msg-150806950

[DewDiligence]

ENTA FY3Q19 CC transcript:

https://finance.yahoo.com/news/edited-transcript-enta-earnings-conference-060539181.html

[DewDiligence]

ENTA latest slide set (7/11/19):

https://s22.q4cdn.com/306858242/files/doc_presentations/2019/07/17/July-11-2019-Corporate-Presentation.pdf

[DewDiligence]

ENTA FY3Q19 results:

https://www.enanta.com/investors/news-releases/press-release/2019/Enanta-Pharmaceuticals-Reports-Financial-Results-for-its-Fiscal-Third-Quarter-Ended-June-30-2019/default.aspx

FY3Q19 royalty revenue=$44.4M, up from $39.6M in FY2Q19 (Jan-Mar 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.

ENTA’s 6/30/19 cash balance=$389.2M.

FY3Q19 GAAP EPS=$0.33 (including an $0.04 tax credit).

[DewDiligence]

EDP-305 cannot logically be worse than OCA on safety/tolerability; it is not a bile acid.

[semi_infinite]

thx. If recollection serves, OCA complications were itching and raising of cholesterol. Could 305 be worse IYO? Even if so, seems a lot of negativity is already priced in. Although it could still be a rough ride technically if 60 is broken. I had an alert triggered today via execution of single put being sold. Now I am waiting for the final bloodletting. Trump is determined get this over with in a hurry.

[DewDiligence]

FYI: #msg-150331278.

[semi_infinite]

I would agree on the granular level. However, as a group, IMO the data is useful even if the timing is inaccurate. Eg. I got lucky in selling July credit spreads in ENTA (expired OTM) although option pricing had the direction right two weeks after expiration. Another recent example was FGEN, timing there was off by ~4 weeks but the stock did dive after MACE data release. That was a nice opp to add and many of us did either via rich put premiums or directly on data release. Looks like there will be an opp here upon OCA data release.

[willyw]

(Dew Wrote)

Moreover, the patient pool in question is now be more likely to use Mavyret in the first place, offsetting some (or all) of the royalty effect from a shorter duration.

Exactly correct; they lose a small amount of income by shortening the treatment time for a pivotal patient group from 12 to 8 weeks.

The overall effect on those prescribing or paying has a more universal effect; they can prescribe G/P without thinking about liver damage, viral load, genotype (excepting G-3 as noted) to the broad population group irrespective also of whether they are HIV+, on opioid treatments, have kidney disease, etc.

It just makes G/P the "go to" treatment for general populations, and therefore may make it a more prescribed therapy. (It already is for several reasons-add one more)

Gilead, on the other hand has more different treatments, treatment durations, some viral load requirements for some treatments.

BOTH Gilead and Abbvie have prescribed longer treatment (+/- riba) for stage 4 cirrhotics, generally speaking.

[DewDiligence]

Option pricing was prescient in the way the stock has moved.

I doubt that the option holders know anything material that we don’t.

[DewDiligence]

How does the newly EMA approved shorter treatment regiment [sic!] impact ENTA royalties?

The effect on ENTA royalties is negligible. Cirrhotic (Child-Pugh A), non-GT3 patients are a small (single-digit) proportion of Mavyret patients, and the newly approved 8-week regimen in the EU affects only 1/3 of the royalties from this patient pool (by shortening the approved regimen from 12w to 8w).

Moreover, the patient pool in question is now be more likely to use Mavyret in the first place, offsetting some (or all) of the royalty effect from a shorter duration.

[semi_infinite]

Option pricing was prescient in the way the stock has moved. Looks like it will get into the 60's. One sdev band now ~ 55-83.

How does the newly EMA approved shorter treatment regiment impact ENTA royalties?

[willyw]

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
August 02, 2019

https://www.enanta.com/investors/news-releases/press-release/2019/Enantas-HCV-Collaboration-Partner-AbbVie-receives-Approval-by-the-European-Commission-for-MAVIRET-glecaprevirpibrentasvir-to-Shorten-Treatment-Duration-to-Eight-Weeks-for-Treatment-Nave-HCV-Patients-with-Compensated-Cirrhosis/default.aspx


MAVIRET™ is now available as a shorter, 8-week, once-daily option for treatment-naïve, compensated cirrhotic, chronic hepatitis C (HCV) patients with genotype (GT)1, 2, 4, 5 or 6
Marketing authorization is supported by 97.9 percent cure* rate across this group of patients with no reported virologic failures
Analysis evaluating MAVIRET as an 8-week, once-daily treatment option for treatment-naïve, compensated cirrhotic, GT3 HCV patients is ongoing
Glecaprevir, is one of the two direct-acting antivirals (DAAs) in MAVIRET and is Enanta’s second protease inhibitor developed and commercialized by AbbVie

(visit the link for the full text) ~W

I was diagnosed in 2003. Back then the cure rate was less than 50% after a year of chemotherapy like symptoms. Some people suffered lasting serious disorders from the treatment; brain fog, auto-immune disorders, chronic fatigue, and other disorders which defied diagnosis or treatment. Through it all cirrhotics have remained the most difficult to treat. 8 weeks seems like a miracle to those of us who saw many treat repeatedly and fail, or those who kept waiting for a treatment and were lost before one came.

I believe I became infected in the 90's via surgery. I had zero damage in 2002, and by 2013 I was on the verge of cirrhosis, in spite of doing everything I could to stay healthy. I was able to get cured in a Gilead trial, but if I had to have waited for approvals either drug approval or insurance approval I have no doubt I would have been among those who became cirrhotic or who passed waiting for a treatment that could cure me.

This is a great treatment and close to a miracle for many people.

[semi_infinite]

At current stock price, options no longer skewed like last week so perhaps this news was anticipated. One sdev move still 65 to 95 for Aug expiration.

[DewDiligence]

ABBV’s 2Q19 HCV sales=$784M—2019 guidance lowered $3.3B—>$3.1B:

https://finance.yahoo.com/news/abbvie-reports-second-quarter-2019-114200464.html

[DewDiligence]

I reposted with full URLs.

[Glider549]

I couldn't open it.
Give me the 5 cent tour :)

[DewDiligence]

Here's a capsule summary of the trial:

https://investorshub.advfn.com/boards/read_msg.aspx?message_id=145935658

https://investorshub.advfn.com/boards/read_msg.aspx?message_id=149911798

[Glider549]

EDP 305 Argon 1 Phase 2 initial Dara due 3q 2019

[DewDiligence]

ENTA starts phase-1 of EDP-514 for treatment of HBV:

#msg-149783907

[DewDiligence]

ENTA’s General Counsel exercised and held ~$270K of stock today:

https://www.sec.gov/Archives/edgar/data/1177648/000117764819000033/xslF345X03/edgar.xml

The options in question did not expire until 2025.

Today’s transaction is in addition to the $250K exercise-and-hold in Mar 2019 (#msg-147373277) and the $150K exercise-and-hold in Jan 2019 (#msg-146329304).

[DewDiligence]

On today’s CC, ABBV reiterated its guidance for 2019 Mavyret sales of $3.3B.

[guyschmid]

ABBV's Mavyret weekly NRx market share of the HCV market is at 49% (from 50% the prior week) for the week ending 6/14.

[DewDiligence]

New corporate slide set:

https://s22.q4cdn.com/306858242/files/doc_presentations/2019/06/June-18-2019-Corporate-Presentation.pdf