Enanta Pharmaceuticals Inc (ENTA)

[DewDiligence]

Re: HBV functional-cure market size

Let’s use the HCV market as a comparator, based on the assumption that ENTA (or somebody’s combination regimen) will be is successful in providing a functional cure for HBV.

The number of patients infected with chronic HBV is considerably larger than it ever was for HCV. However, a larger proportion of chronic-HBV patients live in poor countries as compared to HCV, which offsets the larger number of total patients. Thus, as a rough first-order approximation, we could hypothesize that the peak annual size of the addressable market for an HBV-curing regimen will be comparable to what it was for HCV.

The peak-sales year for HCV (2015) saw worldwide sales of approximately $23B, which dropped to about $19B the following year (2016) and has declined steadily since then as more and more patients are cured and the average selling price for a course of treatment has come down.

For HBV, the sales trajectory will not be as parabolic as it was for HCV; due to the greater difficulty diagnosing and treating patients in poorer countries, the initial bolus will be smaller and the rate of decline following the peak will be more gradual. Therefore, as compared to HCV, we should probably model a somewhat lower number for peak annual sales, but perhaps an equal or higher NPV for the total (all years) revenue stream.

For ENTA, specifically, an important question is what proportion of the total HBV functional-cure market will be comprised of all-oral regimens, assuming that an all-oral regimen exists. I would submit that this proportion will likely be at least 50%.