Enanta Pharmaceuticals Inc (ENTA)

[DewDiligence]

[the CSO also] sold 25K of the 129K sh he exercised back in Jan2014 or 20% thereof. If the fact that he exercised and held back then is bullish, which I agreed and that was the reason I added before the last 3 P3s were released, then this drip-drip selling is definitely not bullish. It may not be negative but it is certainly not very positive imo.

The premise for our adding shares in Jan 2014 (when the CEO and CSO exercised and held their shares) was valid, and ENTA is indeed up nicely since then. Naturally, I would rather the CSO and CEO had met their tax liability stemming from the Jan 2014 option exercises without selling shares, but this may have been impractical.

Inasmuch as the CSO’s 10b5-1 plan was established in Feb 2014 (one month after his large exercise-and-hold transaction), it seems pretty clear that the motivation for the 10b5-1 plan, at least in part, was to raise money for the tax liability.

Although I’m mildly disappointed by the moderate 10b5-1 selling from ENTA’s executive officers, I’m pleased by the lack of recent selling by ENTA’s founding VCs.