Replies to post #2230 on Enanta Pharmaceuticals Inc (ENTA)

[willyw]

George Rho profile picture
George Rho
Today, 4:21 AM
Comments (1.11K)
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I read your bio with some interest. I, too, like to learn from the responses of readers, although some can be harsh. Indeed, I started to pen an article on Alector recently, mainly to glean what others might see that I was apparently missing. Just briefly, the stock about doubled in price last summer after it inked a significant partnership with Glaxo, but has been on an extended slide ever since, the huge cash horde and pipeline prospects notwithstanding. In any case, laziness set in and I didn’t get far beyond the starting point.

As to your article, it left me feeling that you’d left out way too much, especially for someone who is familiar with the March quarter conference call. Principally, you completely ignore the Covid pill that’s under development. It apparently has the potential to be superior to both Pfizer’s and Merck’s Covid drugs, in terms of efficacy, dosing, and administration. As you undoubtedly know, both are huge sellers, massive enough to move the needle on the bottom line even though both companies have billions of shares outstanding.

To be sure, it’s only in phase 1. But it has received fast track designation. Plus, as evidenced but Pfizer’s and Merck’s, the clinical program shouldn’t take too long since there are many eligible patients out there and the drug is taken for only four or five days. Also important to note is Enanta’s minuscule equity base, at about 20 million shares outstanding. Imagine the impact of a billion dollars in sales on the bottom line.

Another fact you didn’t cover in your article was the reason for the sharp rise in share price last year. For whatever it’s worth, I bought the stock many years ago for the company’s hcv products and sold it last year at $90. I’ve been rebuilding my position over the past several weeks. If I were a betting man, I’d put my money on Enanta partnering with Abbvie for the Covid product, too. Full disclosure, I’m long both and have written articles on each.