Replies to post #215366 on Biotech Values

[jbog]

Rocky3,

I've been trying to match up Enta's royalty stream with Abbvie's sales and unless the income is recorded in later time periods I'm having a little trouble.

In Q2 Abbvie made this statement:

Global Viekira sales in the quarter were $225 million, down versus the prior year. In the coming weeks, we expect U.S. and European regulatory decisions for our next-generation HCV treatment, MAVIRET. Based on the timing of reimbursement decisions outside the U.S. and managed-care contracting cycles in the U.S., we expect to see meaningful sales contribution from MAVIRET starting in 2018.

In response Enta recorded (Q3) Total revenue for the three months ended June 30, 2017 was $7.5 million (approx 3.3%)


In Q3 Abbvie made this statement:

Global HCV sales in the third quarter were $276 million. During the quarter we received regulatory approval for MAVYRET, our next-generation HCV offering in the U.S., Europe, and Japan. While we are still in the early stages of our launch, we've been pleased with its initial uptake globally, and physician feedback on the product has been very favorable. Global sales of MAVYRET approached $100 million in the quarter.

In Response Enta recorded (Q4) Product Revenue of $10.9 Million and $65.0 Million in milestones.

Total revenue for the three months ended September 30, 2017 was $75.9 million. The increase in revenue for the quarter was due to $65.0 million in milestone payments for the U.S. and EU approvals of AbbVie’s new HCV regimen under the tradenames MAVYRET™ and MAVIRET™, respectively.

With the 'almost' $100 million in Mav sales I would have expected the Revenue to be higher than 3.9 percent in aggregate. There must be many levels or another entry I'm not aware of.

Any Thoughts?

[DewDiligence]

ENTA’s actual FY2018 guidance for gross operating expenses is $28-35M per quarter—not simply $35M per quarter as implied by prior posts in this thread.

FY1Q18 (ending 12/31/17) will likely be the lowest-spending quarter of the fiscal year, since clinical trials will be ramping up as the fiscal year progresses.

[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).