Biotech Values

[DewDiligence]

Re: ENTA’s cash balance and liquidity (corrected)

http://finance.yahoo.com/news/enanta-pharmaceuticals-reports-financial-results-113000006.html

ENTA’s cash balance at 3/31/14 was $102.0M, implying a net cash usage of $4.2M during FY2Q14.*

Since ENTA received a $20M milestone payment from ABBV on 4/22/14 for the US NDA submission of the 3-DAA HCV regimen (#msg-100942274), and another $20M milestone from ABBV on 5/8/14 for the EU MAA submission of the 3-DAA HCV regimen (#msg-101689317), ENTA’s current cash balance is $142.0M, less whatever has been spent to date in net operating expenses during FY3Q14 (the current quarter).*

ENTA’s R&D expenses are projected to total $30M for FY2014; however, these expenses are small compared to the current cash balance (see above) and the expected $150M in milestones from ABBV for FDA and EMA approvals of the 3-DAA regimen in late 2014 and early 2015, respectively [#msg-100940717].

Moreover, there’s a chance that ENTA will receive a $15M milestone payment from NVS during 2014 for the start of phase-2 combination studies of ENTA’s EDP-239 and NVS’ alisporivir (DEB 025) in HCV patients. (DDI studies of EDP-239 + alisporivir in healthy volunteers are slated to begin during the current quarter, according to ENTA’s CC today.)

All told, it’s clear that ENTA does not have a concern about liquidity; to the contrary, ENTA may soon have a good kind of problem: what to do with its growing cash hoard.

*ENTA’s fiscal years end on Sep 30; thus FY2Q14 ended 3/31/14 and FY3Q14 ends on 6/30/14.