Enanta Pharmaceuticals, Inc. (NASDAQ:ENTA) is a biotechnology company that is firmly focused on advancing its pipeline of novel small molecule therapeutics targeting virology and immunology indications. With a strong financial position and a commitment to innovation, Enanta is well-positioned to drive progress across its diverse portfolio and deliver transformative treatments to patients.

Financials

For the fiscal year ended September 30, 2023, Enanta reported annual revenue of $79,204,000 and a net loss of $133,816,000. The company's annual operating cash flow was -$103,154,000, and its annual free cash flow was -$112,212,000. These financial results reflect Enanta's ongoing investments in its research and development programs as it advances its pipeline.

In the most recent quarter ended March 31, 2024, Enanta generated total revenue of $17,054,000, primarily from royalty payments on AbbVie's global sales of the MAVYRET/MAVIRET hepatitis C virus (HCV) regimen. This compares to $17,795,000 in revenue for the same period in the prior year. The decrease in revenue was due to lower reported HCV sales by AbbVie.

Research and development expenses for the quarter were $35,585,000, down from $43,468,000 in the prior-year period. The decrease was primarily driven by a reduction in costs associated with Enanta's COVID-19 program, as the company has decided to only progress this program in the context of a collaboration. This was partially offset by increased spending on Enanta's respiratory syncytial virus (RSV) and immunology programs.

General and administrative expenses for the quarter were $14,235,000, up from $13,778,000 in the same period last year, primarily due to an increase in legal expenses related to Enanta's patent infringement lawsuit against Pfizer.

Enanta reported a net loss of $31,157,000, or $1.47 per diluted share, for the quarter ended March 31, 2024, compared to a net loss of $37,658,000, or $1.79 per diluted share, in the prior-year period.

Business Overview

Enanta Pharmaceuticals was founded in 1995 and has established itself as a leader in the discovery and development of small molecule drugs, with a focus on virology and immunology indications. The company's robust, chemistry-driven approach has enabled it to discover and develop several promising therapeutic candidates.

Virology Programs

Enanta's virology pipeline is anchored by its respiratory syncytial virus (RSV) programs, which include the clinical-stage candidates zelicapavir (formerly EDP-938) and EDP-323. Both compounds are replication inhibitors that work by shutting down viral replication and the production of new virions, as opposed to fusion inhibition, which only blocks viral entry.

Zelicapavir, which has received Fast Track designation from the FDA, is being evaluated in two ongoing Phase 2 studies, RSVPEDs and RSVHR, targeting pediatric and high-risk adult populations, respectively. The RSVPEDs study is designed to assess the safety, pharmacokinetics, and antiviral activity of zelicapavir in children aged 28 days to 36 months. The RSVHR study is evaluating the time to resolution of RSV lower respiratory tract disease symptoms in high-risk adults, including the elderly and those with conditions such as congestive heart failure, chronic obstructive pulmonary disease, or asthma.

Enanta's second clinical-stage RSV candidate, EDP-323, is a novel oral, direct-acting antiviral targeting the RSV L-protein, a viral RNA-dependent RNA polymerase enzyme. EDP-323 has demonstrated potent antiviral activity against both RSV-A and RSV-B in preclinical studies and is currently being evaluated in a Phase 2 challenge study.

In addition to its RSV programs, Enanta has also developed EDP-235, an oral inhibitor of the SARS-CoV-2 3CL protease. While Enanta will not advance EDP-235 into Phase 3 studies on its own, the company is exploring potential collaborations to further develop this COVID-19 therapeutic candidate.

Immunology Program

Enanta's first immunology program is focused on the development of an oral KIT inhibitor for the treatment of chronic spontaneous urticaria (CSU), a severely debilitating chronic inflammatory skin disease. Mast cells, which are primarily driven by the KIT receptor, are the primary drivers of pathology in CSU. Enanta's prototype KIT inhibitors have demonstrated potent inhibition and high selectivity in preclinical studies, and the company is on track to select a development candidate in the fourth quarter of 2024.

In addition to the CSU program, Enanta is also pursuing a second immunology program, which it plans to introduce later this year.

Upcoming Milestones

Enanta has several important milestones on the horizon. The company anticipates reporting data from the Phase 2a challenge study of EDP-323 in the third quarter of 2024 and data from the Phase 2 pediatric study of zelicapavir in the second half of 2024. Additionally, Enanta plans to identify a clinical candidate for its CSU program in the fourth quarter of 2024 and introduce a second immunology program this year.

Liquidity

As of March 31, 2024, Enanta had approximately $300 million in cash, cash equivalents, and short-term marketable securities. The company believes that its existing financial resources, combined with the retained portion of its ongoing HCV royalties, will be sufficient to fund its operating expenses and capital expenditure requirements through the third quarter of fiscal 2027.

For the fiscal year 2024, Enanta has updated its expense guidance. The company now expects research and development expenses to be between $125 million and $145 million, reflecting the impact of its new immunology program and additional efforts to accelerate its RSV clinical studies. General and administrative expenses are expected to be between $50 million and $60 million, primarily due to increased stock compensation expense and costs associated with the patent infringement lawsuit.

Conclusion

Enanta Pharmaceuticals is making significant strides in advancing its pipeline of novel small molecule therapeutics targeting virology and immunology indications. With a robust financial position and a commitment to innovation, the company is well-positioned to deliver on its milestones and potentially transform the treatment landscape for patients suffering from RSV, COVID-19, and chronic spontaneous urticaria. As Enanta continues to execute on its strategic priorities, investors will be closely watching the progress of its diverse pipeline and the company's ability to capitalize on the significant unmet medical needs in these therapeutic areas.