Enanta Pharmaceuticals (ENTA) Stock: Why The Price Surged Today

By Amit Chowdhry ● Nov 23, 2021
  • The stock price of Enanta Pharmaceuticals Inc (NASDAQ: ENTA) increased by over 10% during intraday trading today. This is why it happened.

The stock price of Enanta Pharmaceuticals Inc (NASDAQ: ENTA) – a clinical-stage biotechnology company dedicated to creating small molecule drugs for viral infections and liver diseases – increased by over 10% during intraday trading today. Investors are responding positively to the company’s fiscal fourth quarter and year ended September 30, 2021.

Q4 Quarter and Year Ended September 30, 2021 Financial Results

— Total revenue of $23.6 million for the three months ended September 30, 2021 consisted of royalty revenue derived almost entirely from worldwide net sales of AbbVie’s hepatitis C virus (HCV) regimen MAVYRET/MAVIRET, which was unchanged from the royalty revenue of $23.6 million for the 3 months ended September 30, 2020. For the 12 months ended September 30, 2021, total revenue was $97.1 million compared to $122.5 million for the same period in 2020. Royalty revenue for these periods reflect that treated patient volumes remain suppressed compared to pre-COVID levels, as reported by AbbVie.

— Research and development expenses were $48.9 million for the 3 months ended September 30, 2021, compared to $36.7 million for the 3 months ended September 30, 2020. For the 12 months ended September 30, 2021, research and development expenses were $174.1 million compared to $136.8 million in 2020. The increases in both periods were due to the timing of clinical trials in the company’s virology programs.

— General and administrative expenses totaled $8.4 million for the 3 months ended September 30, 2021, compared to $6.7 million for the 3 months ended September 30, 2020. For the 12 months ended September 30, 2021, general and administrative expenses were $32.5 million compared to $27.4 million in 2020. This increase was due to additional headcount and related compensation expense.

— Enanta recorded an income tax benefit of $8.8 million for the 3 months ended September 30, 2021 compared to an income tax expense of $10.7 million for the same period in 2020. And for the 12 months ended September 30, 2021, Enanta recorded an income tax benefit of $28.6 million, compared to income tax expense of $1.1 million for the 12 months ended September 30, 2020. The income tax expense in 2020 was due to a tax valuation allowance charge of $18.3 million recorded against the company’s deferred tax assets in the three months ended September 30, 2020. The income tax benefit in the current period was due to the provision of the CARES Act of 2020, which enables the company to carry back its current year tax loss to offset taxable income in prior years. This provision will not apply to periods ending after September 30, 2021.

— The net loss for the 3 months ended September 30, 2021 was $24.6 million, or a loss of $1.22 per diluted common share, compared to a net loss of $29.3 million, or a loss of $1.46 per diluted common share, for the corresponding period in 2020. And for the 12 months ended September 30, 2021, net loss was $79.0 million, or a loss of $3.92 per diluted common share, compared to a net loss of $36.2 million, or loss of $1.81 per diluted common share for corresponding period in 2020.

— Enanta’s cash, cash equivalents and marketable securities totaled $352.4 million at September 30, 2021. And Enanta expects that its current cash, cash equivalents and short-term and long-term marketable securities, as well as its continuing royalty revenue, will continue to be sufficient to meet the anticipated cash requirements of its existing business and development programs for at least the next 2 years.

Financial Guidance for Fiscal Year 2022

— Research and Development Expense: $150 million to $170 million

— General and Administrative Expense: $35 million to $41 million

KEY QUOTE:

“We ended fiscal 2021 achieving multiple milestones including presenting positive Phase 1b data of EDP-514 in two major HBV patient populations. We were also excited to present the first preclinical data for EDP-235, our oral protease inhibitor specifically designed to target SARS-CoV-2, and we are making meaningful progress with our Phase 2b RSVP study in RSV. Looking ahead, we expect to make significant advancements across our pipeline and are on schedule to select a new clinical development candidate from our RSV L-inhibitor program by year-end and to report initial data from RSVP in the first half of 2022.”

— Jay R. Luly, Ph.D., President and Chief Executive Officer of Enanta Pharmaceuticals

Disclaimer: This content is intended for informational purposes. Before making any investment, you should do your own analysis.