Replies to post #254054 on Biotech Values

[WorstLuck]

Enanta (ENTA) views

Hi. I see you just signed up today and made your first post.

There is an ENTA board where you can get all the bullish views on the stock. There is occasional and sporadic posting here on specific aspects that some find interesting. Someone else may take a stab at your questions - I don't have a strong interest in the discussion you want.

Best of luck to you.

[dewophile]

I am long ENTA but as a general matter say that if you don't like management then you probably shouldn't invest in the stock
To me the misfires are part of drug development, I have seen no indication they are slower in getting to clinic than others, and the immunology choices seem excellent - there are several preclinical stat6 companies now that have funding (suggesting positive valuation), c-kit could be hot and get hotter as more data emerges from the mabs in the clinic, and RSV is tricky so i am glad they are not rushing forward with large phase 3s for 938 - get the adult data, see what shionogi delivers for their L , then make a decision bc they have 2 candidates to juggle and limited funding. As a contrast PFE was about to start a 2700+ adult phase 2/3 for their fusion inhibitor to race ahead - it got derailed (lots if DDIs among other issues), but I am glad enta didnt shoot their load on a study like this when they entered phase 2 for example

[DewDiligence]

Re: ENTA and CEO Jay Luly

It seems to be they need to be quick and decisive and I don't think Jay Luly is the answer. I'm curious what others think of him? I'm a retail investor with a 6-figure investment but I would prefer a change at the top to consider further investment. Any thoughts on Jay Luly's performance or the possibility of replacing him would be appreciated.

Luly is 67, the age for retirement at many companies, yet ENTA has never announced or even hinted at a succession plan. My sense is that ENTA’s BoD thinks the company is likely to be acquired in the next few years, and so there is no need to groom a successor.

Regarding Luly’s job performance, I think your criticism is a little unfair. Luly has always been direct and honest with investors, which is more than one can say about many biotech CEOs. Moreover, Luly has been a protector of shareholder value insofar as the company has not sold any shares since its IPO twelve years ago, and the share-count increase from “option creep” has been modest by the industry standards.

True, several of ENTA’s pipeline compounds have fallen short, but (as ‘dewophile’ stated in reply to your post) failure is the industry norm for early-stage compounds. A different CEO would not have made ENTA’s compounds better.

Your assertion that Luly is not “quick and decisive” has more to do with style than substance, IMO. Luly speaks in a monotone and rarely shows emotion, and sometimes comes across as though he doesn’t particularly enjoy what he is doing. However, this is just Luly being Luly, and it should not be interpreted as an actual disinterest in the job.

All told, I’m ok with Luly as CEO, now and in the near future. I have tripled the number of ENTA shares I own during the recent downturn because misvaluations of this magnitude do not come along very often.