Enanta Pharmaceuticals Inc (ENTA)

[DewDiligence]

Re: Leerink’s discount rate

For ENTA’s royalty stream from ABBV pertaining to ABT-450, Leerink is applying a “probability” discount of 15% and a value-of-time discount of 6%. The net effect of using these two forms of discounting is equivalent to a single discount rate of 20%*, which is unduly steep and substantially lowers the resulting calculation of fair value.

* 1.0 - (.85 x .94).