Biotech Values

[Rocky3]

ENTA is looking at roughly 35 mil cash burn per quarter for fiscal year 2018.
Not true! The guidance you cited is for gross operating expenses, not cash burn. ENTA will have substantial royalty income on Mavyret during FY2018 (and beyond).


So the question is how much more than $35MM a quarter will the royalty income be, and, even more important, how long will it last?

At the current ABBV guidance of $2.5B for 12/31/18 year, I come out with about $137.5MM of royalty income for ENTA, which is less than the $140MM of expense guidance for 12 months ending 9/30/18. So unless ABBV revenue guidance is way too low, ENTA expense guidance is too high, or my estimate of 5.5% of royalty percentage is too low, ENTA will NOT have income this year. And seems unlikely that next year will be better given direction of scripts in marketplace.

Today's BBG's weekly script numbers have ABBV at 24.3% of TRx and 28.7% of NRx. And the total for HCV TRx is down ~11% and NRx is down 1% from prior week. Big drop in TRx for GILD, though ABBV TRx is also down 11.5% too.

FWIW, I sold ~50% of my remaining ENTA holding on Wednesday. Missed this last run. But bought more FGEN, which has done well enough for me. Plus still have some ENTA left (about 20% of highest position).