Enanta Pharmaceuticals Inc (ENTA)

[DewDiligence]

Re: Paxlovid settlement estimate

Let's estimate what ENTA would be due from PFE if ENTA prevailed in a trial. Including PFE's guidance for 2024, PFE will have sold about $12B of Paxlovid in the US market from product inception (Dec 2021) to 12/31/24. Let's apply a 3% royalty rate, which is pretty conservative for a patent-infringement case. Then the cumulative royalties due to ENTA would be (0.03)($12B) = $360M, plus interest.

(If the court found PFE to be guilty of willfull infringement, it could award ENTA treble damages, or about $1B plus interest. However, few patent-infringement suits result in treble damages, so this outcome is a longshot.)

If a win at trial would result in an award to ENTA of $360M plus interest, a settlement of $150M to ENTA (the estimate you cited from a sell-side analyst) seems like a lower bound. A settlement of $200-250M is more likely, IMO.