Enanta Pharmaceuticals, Inc. Reports Financial Results For Its Fiscal Third Quarter Ended June 30, 2017
WATERTOWN, Mass.--(BUSINESS WIRE)--Enanta Pharmaceuticals, Inc. (NASDAQ:ENTA), a research and development-focused biotechnology company dedicated to creating small molecule drugs for viral infections and liver diseases, today reported financial results for its fiscal third quarter ended June 30, 2017.
Enanta’s cash, cash equivalents and short-term and long-term marketable securities totaled $235.3 million at June 30, 2017. This compares to a total of $242.2 million in such accounts at September 30, 2016. Enanta expects that its current cash, cash equivalents and marketable securities will be sufficient to meet the anticipated cash requirements of its existing business and development programs for the foreseeable future.
Fiscal Third Quarter Ended June 30, 2017 Financial Results
Total revenue for the three months ended June 30, 2017 was $7.5 million, compared to $14.0 million for the three months ended June 30, 2016. For the nine months ended June 30, 2017, total revenue was $26.9 million, compared to $75.4 million for the same period in 2016. For the three and nine month periods ended June 30, 2017, revenue consisted exclusively of royalties earned on AbbVie’s worldwide net sales of HCV regimens containing paritaprevir. For the 2016 nine month period, revenue consisted primarily of royalty revenues as well as a $30.0 million milestone payment for the reimbursement approval of VIEKIRAX® in Japan in November 2015. Milestone payments and royalties have varied significantly from period to period, and we expect that variability to continue in the future.
Research and development expenses totaled $15.4 million for the three months ended June 30, 2017, compared to $10.8 million for the three months ended June 30, 2016. For the nine months ended June 30, 2017, research and development expenses totaled $40.9 million compared to $29.0 million for the same period in 2016. The increase in research and development expenses in both periods was primarily due to increased preclinical and clinical costs associated with the progression of Enanta’s wholly-owned R&D programs in non-alcoholic steatohepatitis (NASH)/primary biliary cholangitis (PBC), respiratory syncytial virus (RSV) and hepatitis B virus (HBV).
General and administrative expenses totaled $5.2 million for the three months ended June 30, 2017, compared to $4.3 million for the three months ended June 30, 2016. For the nine months ended June 30, 2017, general and administrative expenses totaled $15.6 million, compared to $12.5 million for the same period in 2016. For the three month period, the increase in general and administrative expenses was primarily due to increases in compensation expense driven substantially by increased headcount. For the nine month period, the increase was due to increased headcount as well as achievement of milestones under existing performance-based stock awards.
Enanta recorded an income tax benefit for the three months ended June 30, 2017 of $4.1 million compared to an income tax expense of $0.4 million for the same period in 2016. The Company’s estimated annual effective tax rate for fiscal 2017 of approximately 33% was slightly below the statutory rate of 35% due to the availability of research and development tax credits.
The net loss for the three months ended June 30, 2017 was $8.4 million, or $(0.44) per diluted common share, compared to a net loss of $1.1 million, or $(0.06) per diluted common share, for the corresponding period in 2016. For the nine months ended June 30, 2017, net loss was $18.8 million, or $(0.99) per diluted common share, compared to net income of $23.5 million, or $1.22 per diluted common share, for the corresponding period in 2016.
“Enanta continues to make great progress from a research and development perspective,” stated Jay R. Luly, Ph.D., President and Chief Executive Officer of Enanta. Our second commercialized protease inhibitor product, glecaprevir, is one of the two new DAAs in AbbVie’s new pan-genotypic treatment regimen for HCV, which was recently approved in the EU and in the U.S. under the names MAVIRET™ and MAVYRET™, respectively. Additionally, data from the Phase 1 clinical study on our NASH candidate EDP-305 will be available soon, and, with our strong cash resources of over $235 million, we are well funded to continue to advance our clinical programs in NASH, PBC, RSV and HCV.”
Development Program and Business Review
- On June 25 at the XIX International Symposium on Respiratory Viral Infections in Berlin, Germany, Enanta presented data on its respiratory syncytial virus inhibitor candidate EDP-938, which demonstrated a greater than 4-log reduction in viral load in an animal model challenged with RSV. Enanta expects to initiate a Phase 1 clinical study with EDP-938 during the fourth quarter of calendar 2017.
- On July 28, the European Commission granted AbbVie marketing authorization for MAVIRET (glecaprevir/pibrentasvir), and on August 3, the U.S. Food and Drug Administration (FDA) granted AbbVie marketing approval for MAVYRET (glecaprevir/pibrentasvir), sometimes referred to as the G/P regimen, AbbVie’s new pan-genotypic treatment for patients with chronic hepatitis C virus (HCV) infection. Glecaprevir is Enanta’s second protease inhibitor being developed and commercialized by AbbVie and is one of the two new direct-acting antivirals in G/P. Enanta earned a total of $65 million in milestone payments following the EU and U.S. approvals. Enanta is eligible to earn the remaining $15 million milestone payment upon G/P receiving commercial regulatory approval in Japan, which is anticipated next quarter. Additionally, Enanta is eligible to receive annually tiered, double digit, per product royalties on 50% of the net sales of G/P.
- Enanta expects to announce clinical data from its ongoing Phase 1 clinical study of EDP-305 in healthy volunteers and presumed NAFLD subjects1 at the AASLD meeting in October and is conducting NASH-enabling studies during the second half of this year. A Phase 2 study in PBC is also expected to begin in the next quarter, and a Phase 2 study in NASH is expected to begin in early 2018.
Upcoming Events and Presentations
- September 6, 2017 - Baird 2017 Global Healthcare Conference, New York
- September 11-13, 2017 – Morgan Stanley 15th Annual Global Healthcare Conference, New York
- September 25-27, 2017 - Cantor Fitzgerald Global Healthcare Conference, New York
- Enanta plans to issue its fiscal fourth quarter financial results press release, and hold a conference call regarding those results, on November 20, 2017.
Conference Call and Webcast Information
Enanta will host a conference call and webcast today at 4:30 p.m. ET. To participate in the live conference call, please dial (855) 840-0595 in the U.S. or (518) 444-4814 for international callers. A replay of the conference call will be available starting at approximately 7:30 p.m. ET on August 7, 2017, through 11:59 p.m. ET on August 10, 2017 by dialing (855) 859-2056 from the U.S. or (404) 537-3406 for international callers. The passcode for both the live call and the replay is 47670579. A live audio webcast of the call and replay can be accessed by visiting the “Events and Presentation” section on the “Investors” page of Enanta’s website at www.enanta.com.