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Enanta Pharmaceuticals Inc

Enanta Pharmaceuticals Inc (ENTA)

7.14
-0.36
(-4.80%)
Closed February 16 3:00PM
7.14
0.00
(0.00%)
After Hours: 5:56PM

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ENTA News

Official News Only

ENTA Discussion

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dewophile dewophile 19 hours ago
Thx for sharing
have a nice weekend as well
👍️ 2
dewophile dewophile 21 hours ago
JNJ had a fusion inhibitor that got dropped after lackluster results in phase 2 (peds data is published adult data reportedly not good as well)
They had an RSV vaccine that had good phase 2b data but company halted development in or after phase 3 I forget exact timing.
Not sure how interested they would be to get back into the RSV game but they certainly are heavy into immunology
👍️ 3
alertmeipp alertmeipp 21 hours ago
Re: RSV deal - ChatGPT - Part 2

Then it tried to tailor this further based on Enanta’s financials and strategic goals. Obviously, some mistakes in the response... but still think its response is quite good and does provide some values.


Enanta Pharmaceuticals (NASDAQ: ENTA) is a clinical-stage biotechnology company specializing in small molecule drugs for viral infections and liver diseases. As of February 15, 2025, ENTA's stock is trading at $7.14, with an intraday high of $7.64 and a low of $7.10.

In the fiscal first quarter ended December 31, 2024, Enanta reported a net loss of $30.5 million, reflecting its ongoing investments in research and development. The company maintains a strong cash position, with $250 million in cash and marketable securities, providing a runway for its clinical programs.

Strategically, Enanta is focused on advancing its pipeline in virology and immunology, with a particular emphasis on its Respiratory Syncytial Virus (RSV) program. The company aims to bring innovative treatments to market, addressing significant unmet medical needs.

Given Enanta's financial standing and strategic objectives, a partnership for its RSV program would likely involve:

- **Upfront Payment**: $50M–$100M, providing immediate capital to support ongoing R&D activities.

- **Milestone Payments**: Up to $500M, contingent on achieving specific developmental and regulatory milestones.

- **Royalties**: Tiered royalties ranging from 10% to 20% on net sales, ensuring long-term revenue sharing.

These terms would align with Enanta's goal of accelerating the development and commercialization of its RSV therapy while maintaining financial stability.


Then, I questioned why it lowered the upfront payment:

Why I Adjusted to $50M–$100M (More Realistic for Enanta)
Stock Price & Market Cap: Trading at $7.14/share, Enanta has a market cap below $200M, limiting its negotiating power.
Cash Position: $250M in cash provides some runway, but Enanta is burning ~$30M per quarter, so they might accept a lower upfront to secure a deal.
Recent Court Loss (vs. Pfizer): The patent invalidation for their hepatitis C drug may weaken their leverage in negotiations.
Competitive RSV Landscape: Big pharma (PFE, GSK, AZN, MRK, SNY) already has RSV vaccines/therapies, which could reduce urgency to partner with Enanta.
👍 1
alertmeipp alertmeipp 21 hours ago
Re: RSV deal - ChatGPT - Pretty impressive.

It suggests JNJ the most likely partnership - "Johnson & Johnson (JNJ) stands out as a potential partner. While JNJ has been involved in RSV vaccine development, there is limited information about their current RSV therapeutic pipeline, suggesting they might be interested in collaborating to strengthen their position in RSV treatments."

As to deal terms, it states the below:

If Enanta Pharmaceuticals (ENTA) were to partner with a major pharmaceutical company for its RSV program, the deal terms would likely follow a standard biotech licensing or co-development agreement. Based on industry norms and Enanta’s past deals, here’s what the terms might look like:

---

### **1. Upfront Payment**
- **Range**: $75M–$250M
- The upfront payment would depend on the strength of Enanta’s RSV data (Phase 2 results), the level of interest from multiple bidders, and whether a partner sees it as best-in-class.

---

### **2. Milestone Payments**
- **Regulatory Milestones**: $300M–$600M
- Example:
- $50M for the initiation of a **Phase 3 trial**
- $100M upon successful **completion of Phase 3**
- $150M for **FDA approval**
- Additional payouts for **EMA & other regulatory approvals**

- **Sales Milestones**: $500M–$1B
- Example:
- $100M if **annual sales exceed $500M**
- $250M if **annual sales exceed $1B**
- Additional tiers if sales surpass **$2B+**

---

### **3. Royalties on Net Sales**
- **Tiered Royalties**: 12%–22%
- Example:
- **12% on sales up to $500M**
- **16% on sales between $500M–$1B**
- **20%–22% on sales over $1B**
- This is in line with industry norms for small biotechs licensing out late-stage assets.

---

### **4. Co-Development / Co-Promotion (Optional)**
- If Enanta wants to retain some commercialization rights (e.g., **North America or EU**), they may negotiate **cost-sharing** for Phase 3, with a profit split (e.g., **50/50 or 60/40**).
- More likely, Enanta would **out-license the entire asset** due to its small size and limited commercial infrastructure.

---

### **5. Manufacturing & Supply Agreements**
- Enanta may **retain manufacturing rights** or grant exclusive supply agreements for royalty-bearing sales.

---

### **6. Option to Buyout**
- Some deals include an **M&A trigger**, allowing the partner to acquire Enanta at a premium (e.g., **2–3x the stock price**) if the RSV asset meets key milestones.

---

### **Example of Comparable Deals**
- **Pfizer–ReViral (2022)**: $525M acquisition for RSV assets
- **Merck–Molnupiravir (Ridgeback)**: Upfront + royalties structure
- **Gilead–Galapagos (2019)**: $3.95B upfront for a broad partnership

---

### **Final Valuation Estimate**
- **Total Deal Size**: $1B–$2.5B, assuming strong Phase 2 data
- **Upfront Cash**: $100M–$250M
- **Royalties**: 12%–22%

Would you like me to tailor this further based on Enanta’s financials and strategic goals?
👍️ 3
dewophile dewophile 23 hours ago
any guesses on what we would consider buy on the news terms?

Well for starters unless the share price reaches a point where it is greater than net cash there won't be a sell on the news event here if they partner on any terms that at least cover residual RSV costs from current trials. This assumes zero value (but not negative value from ongoing cash expenditures) on preclinical assets.
If the deal assumes a partner takes over full development responsibility for milestones and royalties and the company doesn't opt to co-develop/co-promote the calculation IMO is up front dollars + probability weighted estimate for each of the milestones (many of those are often redacted so best guess) + value of the royalty also probability weighted. then the stock should trade at that value + net assets. So if the price falls short of this valuation I would consider it a buy
👍 4
DewDiligence DewDiligence 2 days ago
ENTA’s fully-diluted share count @12/31/24=27.95M—an increase of 0.96M since 9/30/24 due to the end-of-fiscal-year options granted on 11/27/24.

The 27.95M figure consists of: 21.33M basic shares on the 12/31/24 balance sheet (https://www.sec.gov/ix?doc=/Archives/edgar/data/0001177648/000095017025018810/enta-20241231.htm p.3); and 6.62M options and unvested restricted-stock shares and equivalents (whether or not exercisable) (ibid, p.9).

NOTE: My method of counting fully-diluted shares is intentionally a maximum-case scenario—i.e. intentionally conservative for calculating enterprise value. My count includes all options, regardless of how far out of the money they may be.
👍️ 3
DewDiligence DewDiligence 2 days ago
ENTA’s pro forma net cash @12/31/24=$251.8M—excluding balance-sheet “debt” relating to ENTA’s deferred-royalty obligations, which is a GAAP artifact rather than an actual debt instrument.*

The $251.8M figure, which declined $25.0M since 9/30/24, consists of the net current assets on the 12/31/24 balance sheet (https://www.sec.gov/ix?doc=/Archives/edgar/data/0001177648/000095017025018810/enta-20241231.htm p.3) after excluding the $32.7M line under Current Liabilities called, “Liability related to the sale of future royalties.” *

NOTE: My calculation of pro forma net cash is intentionally conservative—i.e. I do not count the cash receivable by the company when existing options are exercised.

*The GAAP treatment for ENTA’s deferred-royalty obligations is described in #msg-172603887.
👍️ 4
biotech_researcher biotech_researcher 2 days ago
Thanks!
👍️0
DewDiligence DewDiligence 2 days ago
Re: PSU awards Kind of interesting that the performance criteria was met despite the stock performance. The performance criteria for these specific PSUs were solely related to (undisclosed) achievements in R&D.
👍️ 3
alertmeipp alertmeipp 2 days ago
Not a bad week at all. Happy weekend everyone! The best is yet to come ;)
👍 2
InefficientMarket InefficientMarket 2 days ago
PSUs were filed by six of the officers.
Kind of interesting that the performance criteria was met despite the stock performance. Overall I consider it generally bullish because they elected to only sell such portion to satisfy the tax liabilities and hold the rest.
👍 2
randychub randychub 2 days ago
Thank you!   A lot of good choices on that list.  Got any  guesses on what we would  consider buy on the news terms?
👍️0
dewophile dewophile 2 days ago
anyone with an interest in infectious disease (and immunology if it is a sale of the company)
GSK
JNJ
GILD
RHHBY
MRK
AZN
SNY
SHionogi
the list goes on
👍 4
dewophile dewophile 2 days ago
RSV seasonal patterns in peds and adults updated:

The current RSV season is on the downswing and clearly past peak so a few observations from the RSV-NET site https://www.cdc.gov/rsv/php/surveillance/rsv-net.html

1. Among all age groups last season hospitalization rates peaked at 4.3/100K persons on 12/28/2023. This year the peak was 3.9 per 100K on 1/4/2025. The AUCs (i.e. overall hospitalization burden due to RSV) appear on track to be slightly lower this year than last, but pretty close - just shifted a bit later overall. For comparison in the year prior to the pandemic 2019-2020 the burden was clearly lower looking at the curves (AUC), with a peak on 1/4/2020 of 2.6 per 100k persons.

*so overall RSV burden the last 2 years appears as high or higher than historical standards (the site only has data as far back as the 2018 season but it was a bit lower than 2019 even)

2. Among neonates and infants 0-6 months of age you can clearly see an effect of Mabs and maternal vaccines. The peak this year (which was a worse season than per-covid overall) was lower with peak hospitalization rate of 74.4 per 100k versus lst year's 136.9 per 100K, and 125 per 100K 2019 season

3. In infants 6 months to 1 year this beneficial effect is markedly attenuated - with peaks of 49.6 per 100k this year vs 67 per 100K last year, 50 per 100k 2019

4. in 1-2 year olds, this year was worse than last year with peak hospitalization of 47.7 per 100k versus 42 per 100k , so even though this season a bit milder overall you can start to see the upward shift in age for hospitalization rates due to kids getting first infections at older age. for comparison this figure was a lot lower prepandemic with a peak at 29.6. so while the last 2 seasons were worse than 2019, I don't know if that lone can account for the doubling in hospitalization rates

5. Similar patterns emerge if you look at hospitalization rates in 1-4 year olds

6. The overall peds hospitalization rates 0-4 year olds this year peaked at 29.9 vs 36.7 last year vs 24.9 in 2019, but the overall burden when eyeballing the curves and AUC seems narrower between this year and last, but certainly lower this year, and probably a bit lower year on year than the overall RSV hospitalization burden for all comers.
My take here is that neonates and young infants get hospitalized a bit more commonly than a first infection in a 1-2 year old, so despite the upward shift in age for first severe infection, the overall burden is *slightly lower overall in peds with the introduction of passive immunity for this population. **
Obviously studies that are sure to be forthcoming will shed more light but I figured I would share a quick real time glean on seasonal patterns.

For Adults:

1. >65 year olds had slightly higher peak hospitalization rates last year versus this year at 9.4 vs 8.7. It peaked at 4.2 in 2019-2020. Adult vaccines are simply not making headway into curbing the RSV disease burden which is consisten with the fact that only 10% or so of older adults got vaccinated so far (thank you ACIP and shame on you)

2. This last year RSV vaccines were universally recommended without a shared decision making for 75 yo and up, yet the hospitalization rates this year was a smidge higher than last year even peaking at 14.7 vs 14.5 per 100K persons. Again the effect of vaccines is simply not there

If you are curious what one of the vaccine makers thinks of the risk benefit of the RSV vaccine in older adults, here is a copy of response I recently got from GSK IR:

We believe in the overall clinical profile and benefits of Arexvy. The GBS signal is rare <10 cases per 1 million vaccinated. CDC analysis showed up to 15K hospitalisations and 2K deaths are prevented over 3 seasons per 1 million vaccinations in each of the ACIP recommended populations vs up to 18 cases of GBS per 1 million vaccinations
and yet
We have not assumed any cohort expansion (or revaccination) in our 2025 forecasts

All of this is to once again say the introduction of all the preventative measures for RSV have not had a material effect on either the peds or adult market opportunity for an antiviral IMO

** because in peds dosing is weight based, even with slightly overall lower disease burden in peds the commercial opportunity will not be affected as much as the gap in disease burden because older kid simply require more drug per course of treatment
👍️ 8
randychub randychub 2 days ago
Possible partners other then PFE?  
👍️0
alertmeipp alertmeipp 2 days ago
Agree, market cap is merely 160mm, the RSV program alone can easily worth 3x of that. Maybe a bit of hype but only a tiny bit. 😉
👍️0
DewDiligence DewDiligence 3 days ago
It seems to me that the up-front payment for the [RSV] partnership is around 1 year of cash flow or around $100 million. You are correct that the one-year extension to the cash-runway guidance equates to roughly $100M of cash burn, but I would not infer that the amount of up-front cash in a prospective RSV partnership is expected to be $100M. The amount of up-front cash depends to a great extent on the other deal terms such as the regulatory milestone payments and the royalty rate on sales.

What I infer from the roughly $100M of reduced cash-burn guidance is that ENTA thought it would have cost about $100M to run the phase-3 trials without a partner.

p.s. Thank you for your kind words.
👍️ 5
DewDiligence DewDiligence 3 days ago
[hype!]—The share price is up ~60% from_the_January_low, but this is just the tip of the iceberg, IMO. [/hype!]
👍️ 7 😆 2 😎 2
go seek go seek 3 days ago
Watch video
👍️0
WID WID 3 days ago
Thank Dew for the documentation of the company guidance. It seems to me that the up front payment for the partnership is around 1 year of cash flow or around $100 million.

That is my two cents.
👍️ 2
alertmeipp alertmeipp 3 days ago
It’s a good day. Especially for all of us that know the real good news has not even hit yet.
👍️ 6
dewophile dewophile 3 days ago
There was a few day delay between my emailing IR and yesterdays response. Usually they get back within a day. I bet the same email sent to multiple investors. Maybe they wanted to wait until Luly bought (kidding but maybe not?!)
I’m pretty sure they essentially went public yesterday that a partnership is built into guidance. It’s akin to answering this on a cc and it’s kosher bc it doesn’t promise anything. If you don’t trust management it’s meaningless. If you are like me and have confidence in management and know they don’t talk crap you take something like this as a real positive. Had I gotten the email a few days ago before a 50 percent 2-3 day move I would have bought some trading shares.
Anyway regardless the reason it’s up a lot today it’s a good day
👍️ 7
go seek go seek 3 days ago
I don’t think ENTA is going back to $5 any time soon… ENTA should continue to move higher as we approach the Annual Meeting.
//..\\ Best wishes.
👍️ 3
vinmantoo vinmantoo 3 days ago
I don’t think the ceo buying 45k shares alone would trigger a 30 percent move

dewophile, I never underestimate the power of CEO buys to influence the price of a beaten down biotech. CEO sales can have a similar effect. I think such moves just amplify the recent sentiment one way or another. I do agree that more focus by ENTA on an RSV partnership can have a big effect.
👍️ 1
vinmantoo vinmantoo 3 days ago
Just need 70% more to reach cash value. 150% to include the royalty value.

Sounds good to me. I am now down "only" 30% on my ENTA investment so the next big surge puts me in the money! It has been quite a while.
👍️0
dewophile dewophile 3 days ago
They have really shot into the lead wow. The mechanism is tricky though to balance risk benefit - companies are talking about different levels of amylase for different indications, Jasper was talking about drug holidays where you can avoid some AEs while it takes mast cells some time to reconstitute (so still get efficacy while off drug).
It would obviously be nice to be in the lead, but sometimes going second can help you learn from more advanced programs - they can work out the dosing kinks
👍️ 7
dewophile dewophile 3 days ago
Building a partnership deal into your guidance is a bit different than talking about it like they did at JPM, or even a month prior on the peds call (wasn't that the one where Jay used the term "in earest"), but I get your point
👍️ 2
DewDiligence DewDiligence 3 days ago
In related news, BPMC expects to start phase-1b for BLU-808 during 1H25:

https://www.prnewswire.com/news-releases/blueprint-medicines-reports-fourth-quarter-and-full-year-2024-results-302375527.html

BLU-808 is an oral KIT inhibitor. Patients in the phase-1b will have either CSU or CIU*. BPMC expects to run another phase-1b in allergic rhinitis/allergic conjunctivitis.

*Chronic Inducible Urticaria.
👍️0
DewDiligence DewDiligence 3 days ago
The RSV-partnership hint has been out there since the January JPM webcast, but investors apparently didn’t take it seriously until ENTA updated the cash-runway guidance dramatically (#msg-175800700). Even after the guidance update, there was apparently enough confusion about the matter that it took investors—and shortsellers—a few days to figure it out. I don’t think the ceo buying 45k shares alone would trigger a 30 percent move.Agreed.
👍️ 3
DewDiligence DewDiligence 3 days ago
It's not possible for a company to acquire majority control on the sly. Any company (including affiliates) that reaches a 10% equity stake has to file SEC Form 4 within two business days.
👍️ 3
DewDiligence DewDiligence 3 days ago
Haha! In all seriousness, ENTA’s recent spike is based on investors coming to their senses about valuation, which is the polar opposite of the price action that drove meme stocks such as AMC. The only commonality is short covering.
👍️ 2
PioneerUniverse8 PioneerUniverse8 3 days ago
how about if some fund calculated that they can acquire majority of the control without moving the price above cash per share? I often wonder whether price dynamics in depressed market like biotech would allow such an event,
👍️0
biotech_researcher biotech_researcher 3 days ago
Welcome aboard to a new MEME stock! Move over AMC.
👍 1 😂 1
dewophile dewophile 3 days ago
Yeah I have a feeling I’m not the only person they told that updated guidance assumes partnership (ie confident it will get done )
I don’t think the ceo buying 45k shares alone would trigger a 30 percent move
👍️ 2
go seek go seek 3 days ago
Wow!
👍️ 3
alertmeipp alertmeipp 3 days ago
Just need 70% more to reach cash value. 150% to include the royalty value.
👍️ 5 😀 2 😝 1
go seek go seek 3 days ago
IBKR shows 6.04x500 bid and 6.40x100 ask
👍️ 1
alertmeipp alertmeipp 3 days ago
It's entirely possible that they are waiting for the initial bid or proposal to come in, possibly later this month. Insider buying before the bids come in should be fine since they have already publicly disclosed their plans to evaluate deals.

After that, there would be two more rounds before they select the final winner. They need to secure something soon, or I suspect many will vote against them in the annual meeting. On top, they have a competitor that is right behind them, seemingly willing to move as fast as possible.

I hope the exclusion of Phase 3 from their guidance signals their confidence in securing a deal soon.
👍️ 1
alertmeipp alertmeipp 3 days ago
Very disappointed with insider buy ;) /s

I guess I will have to wait a bit longer for the deal.
👍 1 😆 1 🤑 1
dewophile dewophile 3 days ago
From someone w SEC experience:
Can't be a serious discussion w a particular partner on price, ok if just general discussions w different parties, and in between tougher to assess
👍️ 5
dewophile dewophile 3 days ago
Thx DD
The other SEC filing out today is the 10K:

https://ir.enanta.com/sec-filings/sec-filing/10-q/0000950170-25-018810

The costs in our immunology programs increased by $2.5 million primarily due to the scale-up and IND-enabling activities related to our KIT program and the initiation of preclinical studies for our STAT6 program.

Other Programs

Other program costs decreased by $2.2 million primarily due to the completion of the discovery and optimization activities related to our STAT6 program.

So while the company talks about scale up and ind enabling activities for kit as a 2025 event, it definitely started in earnest last quarter (no surprise). what is a bit unclear to me is they are most definitely in the discovery and optimization phase for stat6, yet in the 10k they say this is at "completion". I think they mean the costs are shifted from "early discovery" to the new stat 6 line item, but it is also possible they are further along and sandbagging a bit.
The big drop in early discovery program costs which is most of the 2,2M cited suggests to me they are probably winding down very early discovery, and perhaps the 3rd immunology program to be announced later this year may be the last. No complaints here I mean 4.4M in the same quarter last year on other early discovery might not sound like much, but at a 100M MC cutting down on this 18M annual burn is welcome news
👍 1 👍️ 3
dewophile dewophile 3 days ago
Thanks. Some obvious errors in there but the calculation of the NPV of the royalty is nice to see laid out. Also how to view the debt may be helpful to some. The Competitive landscape in RSV is both outdated and inaccurate. Thanks for sharing
👍️ 2
jcrty jcrty 3 days ago
While it indicates no partnership or other deal is at the finish line, a great indication. IMO many small insider buys as practiced these days are fluff and even a negative for their transparent effort to signal to shareholders. It's the $10,000 signaling buy from wealthy executives that is a disaster - an empty charade treated as a cost of doing (promotional) business. In contrast, a guy like Luly laying down this cash is significant.

Keep in mind per his ownership what his personal net worth in ENTA was a few years ago vs today. Having seen a pretty reasonable fortune slashed he's putting in real money to own more.

At the risk of taking it a bridge too far, the lack of a conf call combined with the purchase shows that the buy is all about the opportunity at this price rather than a desire to be noticed.
👍 4
DewDiligence DewDiligence 3 days ago
It rules out an imminent deal, but it's bullish in every other way.
👍️ 6
PioneerUniverse8 PioneerUniverse8 3 days ago
Yep. Btw, it gives sources as links. That's where the question marks come from, it is simply artifact of copy paste to ascii.
👍️0
DewDiligence DewDiligence 3 days ago
AI has its limitations! From your post: Competitive Pressures: In each of Enanta’s target areas, competition is intense. For RSV, big players like Pfizer and GSK have recently launched RSV vaccines for adults, and others (Johnson & Johnson via its ReViral acquisition, ReViral’s sisunatovir, etc.) are developing small-molecule RSV antivirals. This is wrong on two counts: 1) RSV vaccines are not competitors; and 2) The JNJ program has been discontinued. Moreover, the bot fails to mention Shionogi’s program.
👍 6
PioneerUniverse8 PioneerUniverse8 3 days ago
I'd say that's not "short term" bullish :)
👍 1
DewDiligence DewDiligence 3 days ago
Jay Luly bought $256K of stock today_on_the_open_market:

https://www.sec.gov/Archives/edgar/data/1177648/000106299325002225/xslF345X05/form4.xml
👍️ 5
PioneerUniverse8 PioneerUniverse8 3 days ago
Nothing that we didn't know, but still pretty impressive since it took less than 5 minutes:

Sources of Recurring Revenue: Enanta’s primary recurring revenue comes from royalties on AbbVie’s hepatitis C virus (HCV) drug MAVYRET®/MAVIRET® (a combination of glecaprevir/pibrentasvir). Enanta co-discovered the protease inhibitor glecaprevir, and under its agreement with AbbVie it earns tiered double-digit royalties on 50% of net sales of the MAVYRET/MAVIRET regimen?
IN.MARKETSCREENER.COM
. In fiscal 2023, Enanta earned about $79–$86 million in royalty revenue from AbbVie’s MAVYRET sales?
SEC.GOV
, which made up essentially all of the company’s revenue. This royalty stream has been ongoing since MAVYRET’s 2017 launch and remains a leading HCV therapy, though sales have been declining modestly year over year as the pool of untreated HCV patients shrinks?
SEC.GOV
. Enanta does not currently have other significant recurring revenues (no marketed proprietary drugs of its own), aside from minor interest income on its cash holdings (for example, ~$3–5 million per quarter in interest income recently?
IR.ENANTA.COM
).Partial Royalty Monetization: In April 2023, Enanta sold 54.5% of its future MAVYRET royalties (from July 2023 through June 2032) to the Canadian pension plan OMERS for a $200 million upfront payment?
BUSINESSWIRE.COM
. Enanta retains the remaining 45.5% of those royalties during that period, after which 100% of royalties will revert to Enanta (or earlier if a 1.42× payment cap is reached)?
BUSINESSWIRE.COM
. For accounting purposes, Enanta still reports 100% of the royalties as revenue and treats the OMERS payment as a liability (amortized as royalties are paid out to OMERS)?
SEC.GOV
. The royalty sale was a non-dilutive way to bolster cash for R&D, but it reduces the portion of future royalty cash flows that Enanta will directly receive.Royalty Stream NPV: We can estimate the net present value (NPV) of Enanta’s retained royalty stream. AbbVie’s MAVYRET sales have been trending downward (e.g. Enanta’s FY2023 royalties of ~$79M were down from ~$86M in FY2022 due to lower HCV sales?
IR.ENANTA.COM
). Assuming a continued decline (for instance, on the order of ~10% per year as the HCV patient pool contracts), the annual royalties attributable to Enanta’s remaining 45.5% stake might fall from roughly ~$35–40 million (Enanta’s share) in the near term to perhaps ~$15–20 million by 2031. Using a 10–12% discount rate, the NPV of Enanta’s retained royalty portion through 2032 can be estimated on the order of $130–$150 million. For example, under a scenario of royalties declining ~10% annually from an ~$79M base (100% royalty in FY2023) and using a 10% discount rate, Enanta’s 45.5% share yields roughly $140 million NPV (this aligns with the OMERS deal implying a total stream value in the mid-$300M range for 100% of royalties).Calculation detail: Enanta received $200M for a 54.5% share of royalties capped at $284M?
BUSINESSWIRE.COM
. This suggests the full stream was valued in the ballpark of $366M (uncapped) on a risk-adjusted basis. Enanta’s remaining share plus any post-2032 tail could thus be worth roughly $166M (uncapped) by the same measure. After discounting to present value (and given the cap risk), our ~$130–150M NPV estimate for Enanta’s portion is reasonable. In summary, Enanta’s recurrent royalty revenue – primarily from MAVYRET – has a substantial, measurable value on a DCF basis (well into nine figures) even as the HCV franchise gradually declines.
Financial Position & Cash Burn
Cash and Investments: Enanta’s balance sheet is strong, with a large cash reserve from past royalties and the OMERS monetization. As of September 30, 2023 (end of FY2023), Enanta had $370 million in cash, equivalents and marketable securities?
SEC.GOV
?
SEC.GOV
. By September 30, 2024, cash had declined to about $248.2 million?
IR.ENANTA.COM
, reflecting the year’s operational spending. Most recently, at December 31, 2024, cash stood at $216.7 million?
IR.ENANTA.COM
. Enanta carries no traditional debt – the only significant liability is the accounting “royalty financing” liability corresponding to the OMERS deal (the $200M upfront is recorded as a debt-like liability to be paid down via the 54.5% royalty pass-through)?
SEC.GOV
. Aside from that, Enanta’s other liabilities (accounts payable, lease obligations, etc.) are relatively minor compared to its cash hoard.Cash Burn Rate: Enanta has been operating at a substantial net loss due to heavy R&D investment. In FY2023, the net loss was $133.8 million (loss of $6.38 per share)?
SEC.GOV
, slightly higher than the $121.8M loss in FY2022. R&D expense in FY2023 was $163.5M, with an additional ~$52M in G&A?
SEC.GOV
. The company recognized $79M in revenue that year from royalties?
SEC.GOV
, so operating cash burn (excluding the one-time royalty sale) was on the order of $120–130M for the year. In FY2024, Enanta moved to reduce spending: management guided R&D expense down to $100–120M and G&A to $45–50M?
SEC.GOV
. This represents a meaningful cut (>25%) in R&D outlays to slow the burn. Indeed, Enanta’s quarterly net losses have started to shrink (e.g. $22.3M loss in a recent quarter versus $33.4M in the prior year’s quarter?
QZ.COM
), indicating cost controls.At the FY2024 spending pace (~$145–170M/year operating costs) and assuming royalty and interest income on the order of ~$70–80M/year, Enanta’s net cash burn is roughly ~$70–90 million per year. The company explicitly states that its existing cash plus ongoing royalty inflows are sufficient to fund operations through fiscal 2027?
SEC.GOV
. This projected runway suggests that, barring major changes, Enanta has about 3+ years of funding for its R&D programs before needing additional capital. The net cash position (cash minus any debt) is effectively ~$216M as of end-2024 (or ~$10 per share in cash, after accounting for a few quarters of burn). Even including the $200M royalty liability as debt, the net cash would still be roughly equal to the remaining cash because that liability is serviced by future royalties rather than by drawing down cash reserves.Liabilities: Other than the royalty obligation, Enanta’s balance sheet shows minimal debt. The OMERS royalty liability was initially $200M and will decline as royalties are paid out?
SEC.GOV
. Importantly, this is non-recourse to Enanta’s other assets (OMERS recoups only from MAVYRET royalties, capped at $284M)?
BUSINESSWIRE.COM
. Enanta’s accounts payable and accrued expenses are relatively low (for instance, R&D and trial costs accrued each quarter, but these are part of operating expenses). There are no indications of significant hidden liabilities that could jeopardize the cash position. Therefore, Enanta’s financial position is very liquid and solvent, with its cash vastly exceeding any obligations. The key question is how effectively that cash will be used to create value (through successful R&D) versus consumed by ongoing losses.
Stock Valuation & Comparison
Market Cap vs Cash and Assets: Enanta’s current market valuation appears exceptionally low relative to its assets. At recent prices around $5–6 per share (early 2025), Enanta’s market capitalization is only about $100–120 million?
MACROTRENDS.NET
?
MACROTRENDS.NET
. This is far below the company’s cash holdings alone – for example, cash was ~$248M at FY2024 and ~$216M at the end of 2024, which equates to ~$11.70 per share in cash?
REUTERS.COM
. In other words, the stock trades at roughly half of its cash book value, implying a deeply negative enterprise value once one subtracts net cash. Even adding the NPV of the remaining royalty stream (estimated ~$130M+) to the cash, Enanta’s asset coverage is several times the market cap. The market is effectively assigning little or no value (or even negative value) to Enanta’s drug pipeline – it values the company at less than cash-on-hand, suggesting investors believe a significant portion of that cash will be burned without yielding returns.To put this in context, Enanta’s enterprise value (EV) is negative. With ~$216M cash and a ~$110M market cap, EV is roughly –$100 million (i.e. the market cap minus cash). This indicates extreme pessimism. By comparison, many development-stage biotech peers trade near or above 1× cash if their pipelines have promise. Enanta’s discount to cash is unusually steep even in a generally beaten-down biotech sector. The stock’s price-to-book ratio is well below 1 (signaling investors doubt the book assets will translate into shareholder value). Furthermore, Enanta’s price-to-sales ratio is also low given ~$68–79M annual royalty revenue?
MACROTRENDS.NET
; the market cap is barely 1.3× trailing royalty revenue – very low for a biotech with a revenue stream.Historical Stock Performance: Enanta’s stock has declined dramatically from prior highs. It reached an all-time high of ~$126/share in 2018 when HCV royalties were robust and investor optimism about its pipeline (and HCV franchise) was high?
MACROTRENDS.NET
?
MACROTRENDS.NET
. Even in recent years, the stock traded in the $50–70 range in 2021–2022?
MACROTRENDS.NET
. However, a combination of factors (discussed below) caused a slide to the mid-teens in 2023 and then a collapse to single digits in 2024, hitting a 52-week low of $4.71?
MACROTRENDS.NET
. Currently, at ~$5–6, the stock is at multi-year lows not seen since 2017. Relative to peers, Enanta’s valuation appears anomalously low: many biotech companies with a single late-stage asset and no revenue might trade at >$200M market caps, whereas Enanta has a steady royalty income and multiple pipeline programs yet is valued barely above $100M. This suggests that the market is extremely skeptical about Enanta’s ability to generate future value from its pipeline or even to fully capitalize on its cash (perhaps expecting the cash to be eroded by ongoing losses).Peer Comparison: In the antiviral development space, Enanta could be compared to other small-cap biotechs with royalty income or those developing RSV or hepatitis treatments. While direct apples-to-apples peers are few, one can note that Enanta’s price-to-cash ratio is far lower than most. Investors appear to be pricing Enanta as if its pipeline is worth less than zero, which is a stance typically reserved for companies facing imminent distress or major pipeline failures. The broader biotech bear market has driven many stocks below cash value, but Enanta’s case stands out because it does have a revenue-generating asset and a track record of successful drug discovery (MAVYRET’s development). This discrepancy underscores a potentially significant valuation disconnect – either the market is overly penalizing Enanta for risks, or there are serious concerns about future prospects (or a bit of both).
Potential Risks & Market Perception
The deep discounted valuation of Enanta reflects multiple risks and negative market perceptions:
Declining HCV Royalties: Enanta’s sole revenue source is shrinking. The HCV market is mature – many patients have been cured, and fewer new patients require treatment each year. AbbVie’s MAVYRET sales have been trending down (e.g. ~8–10% decline in 2023 vs 2022)?
SEC.GOV
. While MAVYRET remains a leading therapy, the continued slide in royalty revenue is a concern. The royalty stream is finite (the OMERS deal effectively “ends” Enanta’s full participation by 2032), and there is a possibility that sales could fall faster due to competition or eventual generic entrants. This means Enanta’s recurrent revenue base will likely dwindle over time, putting more pressure on the pipeline to deliver new revenue sources.
Heavy Cash Burn and No Profitable Products: Enanta is still a clinical-stage biotech beyond the HCV royalties. Its R&D programs (for RSV, hepatitis B, human metapneumovirus, etc.) consume a lot of cash, and none are yet approved or generating revenue. The company has been losing over $100M per year?
SEC.GOV
, essentially using its royalty income and cash reserves to fund trials. Investors worry that Enanta could burn through its cash by 2027 (when current cash is projected to run out?
SEC.GOV
) without producing a successful drug. If that happens, Enanta might need dilutive equity raises or other financings. This risk of “cash burn without payoff” leads the market to heavily discount the company’s cash – every $1 in cash is valued at much less, since it may be spent on unsuccessful R&D.
Pipeline Uncertainty and R&D Risk: Enanta’s pipeline is focused on antiviral programs that carry significant technical and regulatory risk. Notably, its lead internal program in respiratory syncytial virus (RSV), the N-protein inhibitor EDP-938 (generic name zelicapavir), has encountered setbacks. In May 2022, a Phase 2b trial of EDP-938 in otherwise healthy adult RSV patients failed to meet its primary endpoint, causing the stock to plunge to its lowest level since 2017?
CAFEPHARMA.COM
. More recently, Enanta was testing EDP-938 in higher-risk patient populations (pediatric and transplant patients). However, expectations have been tempered – the market has low confidence after the earlier failure. This was reinforced when top-line results in a Phase 2b RSV trial (likely in a low-risk population) reportedly “flamed out,” again sending the stock to multi-year lows?
CAFEPHARMA.COM
. Such trial failures highlight the real possibility that key programs might never reach approval. In addition, Enanta had a COVID-19 oral protease inhibitor (EDP-235) that was discontinued after Phase 1 due to liver enzyme elevations – another pipeline setback (and competition from approved drugs like Paxlovid made that program less viable). Overall, the pipeline has promise but has not yet produced a new winner, and clinical development is inherently fraught with risk of failure or delays (RSV trials, for example, can be affected by virus seasonality, trial recruitment challenges, etc.).
Competitive Pressures: In each of Enanta’s target areas, competition is intense. For RSV, big players like Pfizer and GSK have recently launched RSV vaccines for adults, and others (Johnson & Johnson via its ReViral acquisition, ReViral’s sisunatovir, etc.) are developing small-molecule RSV antivirals. Enanta’s RSV N-inhibitor must prove distinct value in high-risk patients to carve out a niche. There is also the threat that alternative approaches (e.g. long-acting monoclonal antibodies for infants, like nirsevimab, or other mechanism antivirals) could reduce the opportunity. In hepatitis B (HBV) and other virology targets Enanta is exploring, numerous biotech and pharma companies are competing, many of which may have more advanced candidates. This competitive landscape raises concern that even if Enanta’s R&D succeeds scientifically, the commercial opportunity might be limited or crowded, affecting the potential payoff.
Regulatory and Development Hurdles: Enanta’s drug candidates must navigate clinical trials and regulatory approval – processes that are lengthy and uncertain. For instance, Phase 3 trials would be needed for RSV candidates if Phase 2 results (in high-risk patients) are positive. Those trials would be expensive and time-consuming, likely pushing potential approval to 2026–2027 or beyond. Any regulatory setbacks, clinical holds, or safety issues could derail these programs. The market may be factoring in that even in a best-case scenario, Enanta is years away from a new product on the market, during which time a lot of cash will be spent. There is also some legal/regulatory risk in the form of a patent infringement lawsuit Enanta has initiated (as noted by their increased legal expenses?
SEC.GOV
) – while details aren’t provided in the question, such lawsuits (perhaps related to competitor drugs overlapping Enanta’s IP) can be costly and their outcomes uncertain.
Investor Sentiment and Recent Developments: The sentiment around Enanta has been quite bearish, reflecting both company-specific events and broader market trends. The biotech sector experienced a downturn in 2022–2023, and Enanta’s setbacks made it worse. Analysts have noted that Enanta’s share price decline appears disproportionate, possibly due to “the broader downturn in biotech, mixed results from their RSV treatment (zelicapavir), and possibly misplaced safety concerns”?
MARKETS.BUSINESSINSIDER.COM
. Essentially, bad news has piled on: the 2022 RSV trial failure, the high cash burn, and no major positive catalysts in 2023 led many investors to capitulate. By late 2024, as the stock hit all-time lows, some analysts suggested the market was not recognizing Enanta’s potential in its pipeline?
MARKETS.BUSINESSINSIDER.COM
and was “giving little credit” to anything beyond the cash and royalty projections?
MARKETS.BUSINESSINSIDER.COM
. Indeed, one JMP Securities analyst commented that Enanta’s valuation “appears to be limited to its current cash projections and retained economics from Mavyret, with little credit given to its broader pipeline.”?
MARKETS.BUSINESSINSIDER.COM
This lack of confidence can become a self-fulfilling prophecy in the short term, as a depressed stock makes financing harder and can pressure the company’s strategy.
It’s worth highlighting some recent positive developments that could counterbalance the risks, though the market’s reaction has been muted so far. In late 2024, Enanta announced positive Phase 2a results for EDP-323, an RSV L-protein inhibitor, in a human challenge study – demonstrating antiviral activity in healthy adults inoculated with RSV?
IR.ENANTA.COM
. Also, in September 2024 Enanta reported encouraging data from a pediatric RSV trial of EDP-938 (zelicapavir). In hospitalized and non-hospitalized infants (28 days to 36 months old), zelicapavir was well-tolerated and achieved target drug exposure; the company stated that “Zelicapavir demonstrated an antiviral effect on both primary endpoints, as well as secondary virology endpoints,” reinforcing its potential in high-risk settings?
CLINICALTRIALSARENA.COM
?
CLINICALTRIALSARENA.COM
. These developments suggest the pipeline still has life – particularly in RSV – but investors may be taking a “wait and see” approach until these translate into clear efficacy in Phase 2b/3 trials. In the meantime, the overhang of past trial failures and ongoing cash burn continues to dampen enthusiasm.In summary, the market’s deeply discounted valuation of Enanta can be explained by fears that the declining HCV royalties and large cash reserve will be exhausted by R&D efforts that might not succeed. Essentially, investors are pricing in a strong possibility that Enanta’s pipeline could fail to generate significant future revenue, leaving the company’s cash as the only asset – and even that cash will shrink over time with the current burn rate. This pessimistic view has been exacerbated by recent trial disappointments and a tough biotech funding climate. Only tangible signs of pipeline success or other value-creating events (partnerships, asset sales, etc.) are likely to change this perception.
Conclusion & Fair Value Outlook
Is Enanta underpriced? Based on the fundamentals, Enanta appears significantly underpriced relative to its liquid assets and royalty stream. The stock is trading at a deep discount to net cash – for example, ~$5–6 share price vs ~$11+ per share in cash?
REUTERS.COM
– which implies that the market expects substantial value destruction from here. However, if one assumes even a baseline scenario (no pipeline success but orderly use of cash), the intrinsic value would seem higher than the current price. Enanta’s net cash ($216M as of end-2024) plus the NPV of its retained royalties (~$130M) sum to roughly $350M, which on ~21 million shares would be about $16–$17 per share. In a sense, that $16–$17 could be viewed as a liquidation or floor value if the company simply ran down its HCV royalties and cash. The stock trading around one-third of that value suggests an overly bearish stance – or at least a very high risk discount being applied.Fair Value Estimate: A reasonable fair value for Enanta’s stock depends on how one weighs the pipeline prospects. If one were to assign zero value to the pipeline (assuming all pipeline programs fail), a fair value might roughly equal the net cash + royalty value indicated above (mid-teens per share, albeit declining over time as cash is spent). If one is more optimistic and assigns some probability-weighted value to the pipeline (for example, factoring in that at least one of the RSV programs could succeed and generate future cash flows), the fair value would be higher. Wall Street analysts with bullish views have set price targets around $20–$21 per share?
MARKETS.BUSINESSINSIDER.COM
?
MARKETS.BUSINESSINSIDER.COM
, which implicitly assume that Enanta will deliver on some pipeline milestones (e.g. successful Phase 2 results in RSV and advancement toward Phase 3) and that the market will start to credit those opportunities. Evercore ISI and JMP Securities both recently reiterated Buy ratings in Dec 2024, with targets near $20, seeing the sell-off as overdone?
MARKETS.BUSINESSINSIDER.COM
?
MARKETS.BUSINESSINSIDER.COM
.That said, for Enanta to realize a fair value closer to its intrinsic worth, it will likely need to demonstrate progress (or secure partnerships) in its pipeline in the coming 1-2 years. Successful trial readouts in RSV – for instance, showing clear efficacy in a high-risk population – could be a catalyst to change investor sentiment. Enanta’s management has a strong track record (they discovered a blockbuster HCV drug), and they are now deploying that expertise in new areas. If investors begin to view at least one of Enanta’s programs (RSV N-inhibitor, RSV L-inhibitor, HBV, etc.) as likely to succeed, the current discount to cash should narrow quickly. Conversely, the risks remain that continued cash burn and any further trial disappointments could keep the stock depressed.In conclusion, Enanta’s stock does appear undervalued on an asset basis, but the discount reflects real uncertainties. A fair value in the mid-teens per share can be justified by existing assets alone (cash + royalties), suggesting the current price is overly punitive. For long-term value, one must consider the pipeline: if Enanta’s RSV drugs or other candidates pan out, the upside could far exceed the mid-teens (given the multi-billion-dollar markets at stake). However, without pipeline success, that cash will dwindle. Investors seem to be taking a “prove it” attitude – essentially valuing Enanta at liquidation levels and waiting for clear evidence of a turnaround. Thus, for an investor who believes in Enanta’s science, the stock looks unduly cheap, whereas skeptics would argue the price is justified by the probability of cash burn. On balance, given the data we have, Enanta appears to be undervalued relative to its probable future value, with a reasonable fair value estimate around $15–$20 per share in the near-to-medium term (assuming no further negative surprises and some pipeline progress). This represents a significant premium over the current market price, suggesting a potential opportunity – albeit one accompanied by the high risk typical of biotech investments.
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PioneerUniverse8 PioneerUniverse8 3 days ago
open ai pro subscription ($200 a month), lets see if it is worth it..... :
I'll conduct a deep dive into Enanta Pharmaceuticals (ENTA) to determine why it is trading at a deep discount to its cash holdings despite having a recurrent revenue stream. This will include:

Analyzing its recurrent revenue stream and calculating its net present value (NPV).
Evaluating its cash position relative to liabilities and burn rate.
Assessing potential risks, such as R&D spending, pipeline challenges, or regulatory concerns.
Comparing its valuation to peers and historical trading levels to determine if it is underpriced.
I will report back with my findings and an estimated fair value for the stock.


I will report back when it is done :)
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