Biotech Values

[DewDiligence]

ENTA—If I remember correctly...you don't favor share buybacks?

In general, for companies who generate excess cash and are trading at less than what I consider fair value, I strongly favor share buybacks. (Share buybacks are more tax-efficient for shareholders than dividends.)

However, I do not sanction share buybacks for a small biotech company such as ENTA. Even though ENTA's balance sheet is extremely strong, there are things that could conceivably go wrong, such as a delay in regulatory approval for the G/P HCV regimen. For ENTA, it's better to hold on to the cash for now; when large royalties are flowing in from G/P sales (#msg-126723412), the desirability of share buybacks can be revisited.