Replies to post #254107 on Biotech Values

[Fred Kadiddlehopper]

You've laid out a nice summary on why the current cratering is not the fault of bad management and this is an important topic for any potential investor to have a handle on, but what is your thesis on why one should buy here? What are the next visible catalysts in the pipeline which would reverse the downtrend? Thanks!

[WorstLuck]

The HBV program ? Well, a hit and a miss. The miss never made it out of phase 1- discontinued quickly and cheaply. Their antiviral got a 4 log drop but is still lacking (in theory) one more antiviral to combine. I've almost stopped following HBV, but it seems to be a tough nut to crack- not an error or failure per se that other companies also didn't make. The fact that Enanta stopped developing seems a conscious risk/reward decision. I have no issue with that.

It got 4 log in mice?

https://www.enanta.com/pipeline/hepatitis-b-virus/

Results demonstrated that EDP-514 was safe and well-tolerated through 28 days of treatment, displayed pharmacokinetics supportive of once-daily dosing, and resulted in mean HBV DNA reductions of 2.9, 3.3, and 3.5 logs at 28 days for the 200 mg, 400 mg, and 800 mg cohorts, respectively, compared to 0.2 log in placebo. HBV RNA was undetectable at Day 28 in 11 patients in the three EDP-514 cohorts as compared to none in placebo. Mean HBV RNA reductions were 2.9, 2.4, and 2.0 logs for the 200 mg, 400 mg, and 800 mg cohorts, respectively, compared to 0.02 log in placebo.

The miss in 721 had the effect of making the whole program a miss.

https://www.biospace.com/enanta-pharmaceuticals-doses-first-subject-in-a-phase-1-clinical-study-of-edp-721-its-oral-hepatitis-b-virus-rna-destabilizer

“We are pleased to advance our HBV program by dosing the first subject in our Phase 1 clinical study of EDP-721, an orally administered HBV RNA destabilizer that has the potential to reduce S antigen. As we believe that achieving a functional cure for HBV will involve a combination approach, this milestone brings us closer to our vision of developing an all-oral regimen for HBV,” said Jay R. Luly, Ph.D., President and Chief Executive Officer of Enanta Pharmaceuticals. “The current standard of care for chronic HBV involves nucleoside reverse transcriptase inhibitors, or NUCs, which can suppress HBV replication. In addition, EDP-514, our potent core inhibitor inhibits several stages of HBV replication, from uncoating and nuclear import of the virus, to capsid assembly and recycling. Now, with EDP-721, we have an oral compound that has demonstrated preclinically the ability to destabilize HBV RNAs, leading to a reduction in viral proteins, including S antigen, which we believe is essential for the treatment of HBV. With this triple combination of a NUC, EDP-514, and EDP-721, we see the potential for an all-oral functional cure and look forward to progressing this study.”

So, they wanted to do HBV on their own. The P1b in 514 was already running when they killed 721, stopping further development after that trial was easy. Was 514 a hit? I think that is the wrong question. They killed the program once they could no longer advance it on their own. Producing a core inhibitor that can't be marketed might be a success of some kind I suppose.

Bottom line is yes, they efficiently killed the program (pretty much forced into it.)

[vinmantoo]

The HBV program ? Well, a hit and a miss. The miss never made it out of phase 1- discontinued quickly and cheaply. Their antiviral got a 4 log drop but is still lacking (in theory) one more antiviral to combine. I've almost stopped following HBV, but it seems to be a tough nut to crack- not an error or failure per se that other companies also didn't make. The fact that Enanta stopped developing seems a conscious risk/reward decision. I have no issue with that.

What I don't understand is why ENTA doesn't seem to have pushed harder or talked more repeatedly about partnering EDP-514. HBV is such a big market that surely there must be interested parties. Could it be that ENTA is making unrealistic demands?

BOTH RSV and the Covid program had troubles with enrolling people for trials due to covid itself. The sheltering and isolation stopped flu and RSV transmission. I don't see that as a failing by Luly. So far as Covid? Pfizer was a success because the bar was incredibly low. They were first and those who followed had a much higher bar to approval. Is this a failing by a CEO? I don't think so. I believe that the Enanta covid drug is far superior to Pfizers. It could be better than Shionogi's but that's pure speculation unless/until a phase 3 trial is run. Which today seems unlikely. As an investor that got in deeper due to covid, even I, a knucklehead of the first order knew it was going to be highly time sensitive and the clock might run out. IF it were so that Enanta created the best or second best Covid drug do I think they made a poor decision? No. It was, and could still be an opportunity even though today it looks like a bust.

The slow progress of EDP-235 for Covid was really a surprise to me, and one that really stings when I look back on it. I put some of the blame on ENTA management for that slow progress. Was it about not being willing to partner unless they had a mega-deal? Maybe, as there had to be a lot of interest at the time in a better drug than Paxlovid. Is it possible there is a future for EDP-235? I guess we can't rule it out if a new variant arises but I don't factors in Covid anymore for ENTA.

As far as RSV, ENTA gets a pass for now due to the lack of RSV during the shutdowns but the onus is on ENTA management now.

Call me stupid but I increased my shares of ENTA by 20% at $5.55 on Friday. Maybe it will just be for tax loss purposes in a month or two as ENTA is my biggest loser.

[alertmeipp]

For sure, it is an opportunity, a great one. Pretty certain that I will make money here eventually. Main concern for me is selling too early and then it runs significiantly higher afterwards. Sometimes, when you have a fat pitch, the hardest part is to do the home run. Good luck.