Webcast and Conference Call today at 4:30 p.m. ET
- Initiation of RSVP, a Phase 2b study of EDP-938 in adult outpatients with RSV
- EDP-297 selected as follow-on FXR agonist with differentiated preclinical profile
- Royalty revenue for the quarter was $51.3 million
- Cash and marketable securities totaled approximately $400 million at September 30, 2019
WATERTOWN, Mass.--(BUSINESS WIRE)-- Enanta Pharmaceuticals, Inc. (NASDAQ:ENTA), a clinical stage biotechnology company dedicated to creating small molecule drugs for viral infections and liver diseases, today reported financial results for its fiscal fourth quarter and year ended September 30, 2019.
“During 2019, we successfully advanced our lead RSV, NASH and HBV compounds in clinical trials,” commented Jay R. Luly, Ph.D., Enanta President and CEO. “EDP-938, the only RSV N-protein inhibitor in clinical development today, has shown highly statistically significant reductions in RSV viral load and total symptom score endpoints in a human challenge study, and we have initiated RSVP, our first Phase 2b study, which is in adult outpatients with community-acquired RSV. Following RSVP, we are planning additional studies in other patients such as the elderly, immune-compromised patients and pediatric populations. In NASH, we plan to further evaluate EDP-305 in a Phase 2b study, known as ARGON-2, in biopsy-proven NASH patients. This study will include an interim readout to enhance our ability to seek opportunities more quickly for development of EDP-305 in combinations with other mechanisms in NASH. Additionally, in NASH, Enanta has selected EDP-297 as its follow-on FXR development candidate. Preclinical data on EDP-297 reveal a differentiated profile that delivers high target-tissue distribution along with potency greater than that published on any FXR agonist in clinical development today. Finally, our Phase 1a study of EDP-514, our lead core inhibitor candidate for treatment of chronic HBV , is on track to have topline data from healthy volunteers in the first quarter of calendar 2020, after which we plan to proceed to study EDP-514 in ‘nuc-suppressed’ HBV patients and viremic HBV patients in the first and second quarters, respectively.”
Fiscal Fourth Quarter and Year Ended September 30, 2019 Financial Results
Total revenue of $51.3 million for the three months ended September 30, 2019 consisted of royalty revenue derived primarily from worldwide net sales of AbbVie’s hepatitis C virus (HCV) regimen MAVYRET®/MAVIRET™. Total revenue for the three months ended September 30, 2018, was $67.2 million. For the twelve months ended September 30, 2019, total revenue was $205.2 million compared to $206.6 million in the same period in 2018.
The decrease in royalty revenue quarter over quarter was driven by lower HCV product sales as reported by AbbVie. Year over year, revenues decreased slightly due to the fact that the 2018 revenue included receipt of the final $15.0 million milestone payment for reimbursement approval of MAVIRET™ in Japan. The absence of any milestone payment in 2019 was substantially offset by increased royalty revenue due to the higher proportion of HCV product sales in 2019 being derived from MAVYRET®/MAVIRET™, for which Enanta earns a higher royalty allocation.
Research and development expenses increased to $38.7 million for the three months ended September 30, 2019, compared to $26.9 million for the three months ended September 30, 2018. For the twelve months ended September 30, 2019, research and development costs were $142.2 million compared to $94.9 million in 2018. The increase was primarily due to increased clinical costs associated with the progression of Enanta’s wholly owned clinical programs in respiratory syncytial virus (RSV), non-alcoholic steatohepatitis (NASH), primary biliary cholangitis (PBC), and hepatitis B virus (HBV).
General and administrative expenses totaled $6.2 million for the three months ended September 30, 2019, compared to $5.8 million for the three months ended September 30, 2018. For the twelve months ended September 30, 2019, general and administrative costs were $26.2 million compared to $23.4 million in 2018. The increase in general and administrative expenses was primarily due to increases in compensation expense driven by increased headcount.
Enanta recorded an income tax benefit of $0.5 million for the three months ended September 30, 2019 compared to income tax expense of $8.5 million for the same period in 2018. For the twelve months ended September 30, 2019, Enanta recorded an income tax benefit $0.8 million at a tax rate benefit of approximately 2%, compared to income tax expense of $21.2 million at an effective tax rate of approximately 23%, for the twelve months ended September 30, 2018. The income tax benefit in 2019 was driven by lower income before taxes, a federal tax benefit from foreign derived royalty income, higher research and development tax credits due to higher research and development expenses, and tax deductions from employee stock-award related activity during the year. Income tax expense in 2018 was driven by higher income before taxes as well as a non-cash revaluation charge against deferred tax assets due to the reduced federal corporate income tax rate in the U.S. Tax Cuts and Jobs Act enacted in December 2017.
Net income for the three months ended September 30, 2019 was $9.2 million, or $0.44 per diluted common share, compared to net income of $27.4 million, or $1.30 per diluted common share, for the corresponding period in 2018. For the twelve months ended September 30, 2019, net income was $46.4 million, or $2.21 per diluted common share, compared to net income of $72.0 million, or $3.48 per diluted common share for the twelve months ended September 30, 2018.
Enanta’s cash, cash equivalents and marketable securities totaled approximately $400 million at September 30, 2019. This compares to a total of approximately $325 million at September 30, 2018. Enanta expects that its current cash, cash equivalents and marketable securities, as well as its continuing royalty revenue, will be sufficient to meet the anticipated cash requirements of its existing business and development programs for the foreseeable future.
Financial Guidance for Fiscal Year 2020
- Research and Development Expense: $155 million to $175 million
- General and Administrative Expense: $27 million to $33 million
Development Programs and Business Review
EDP-938, N-Protein Inhibitor for Respiratory Syncytial Virus (RSV):
- Enanta has initiated a Phase 2b study of EDP-938. This study, named RSVP, will be in adult outpatients with community-acquired RSV infection. Future Phase 2b studies are planned to focus on pediatric populations, as well as immune-compromised and other adult populations where RSV morbidity is significant.
- Data from Enanta’s Phase 2a human challenge study of EDP-938 in healthy adults infected with respiratory syncytial virus (RSV) was presented in October at IDWeek™ 2019 in Washington, DC. EDP-938 demonstrated highly statistically significant reductions (p