ENTA - Earnings call transcript Q3 2018 | Enanta Pharmaceuticals, Inc.

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Operator

Good afternoon. My name is Jason, and I will be your conference operator today. At this time, I would like to welcome everyone to the Enanta Pharmaceuticals' Third Quarter Financial Results Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. now Ms. turn would to call I host, our Instructions] like the to over [Operator Miceli. Carol you Ma'am your begin may conference.

Carol Miceli

results afternoon, Thank you, website. news financial The us this issued Jason, and thanks release for with on is available and joining afternoon. was our this our

the of Jay President Enanta's team. Executive is senior and Financial Officer; Dr. our Paul management Mellett, Chief today and call Chief On Luly, Officer; other members

we including risks want be Before and and to risks, you Form involve we the formal results begin to are materially will A SEC. statements, periodic with certain from and our control that and actual all these in our statements. respect other making with remarks, with forward-looking candidates to uncertainties financial most our could plans our expectations we assumptions, product and of uncertainties remind that XX-Q reports is recent our and differ and projections, developments filed these beyond of cause description which

Enanta does call. I'd In this to over the to turn CEO. President forward-looking like to during not call any and obligation addition, Jay made now Luly, statements undertake any Dr. update

Jay Luly

everyone, you, today. Thank for joining afternoon you us Carol. thank Good

updates Paul key financial on by programs, and development then Let begin for the me Mellett providing our discuss will our results quarter.

to in world. the First royalty revenue our HCV drug currently want on so, from I MAVIRET, increasing comment best-selling AbbVie related the to

formulary its today's as XXXX. HCV from well announcements, As for MAVIRET it Express that excluded Scripts has

As access XXXX XXXX. in only a has no the matter, preliminary this on MAVIRET announcement impact affects where formulary

of after XX, including not of there expect as due Japan, from the $XX $XXX call, royalties for increase leadership market is XX and and markets in for the is not under treatment years that that net increased into AbbVie. the number in of will an the by in percentage to EDP-XXX infants to recommended change significant is position in even that US and a sales not stages royalty used immune-compromised the more age US more tier and RSV trial syncytial important additional completed will need from the of end at management of for EDP-XXX in is million recent to a AbbVie's with inhibiting in be Express of sales for clinical fusion infection US our population. MAVIRET instance with royalty development during now access of on Italy phase the an the AbbVie or the XXXX among Scripts developed believe million infection. non-fusion in near EDP-XXX has infrequently Currently us any results cumulative does a achieved higher factor the patients our research quarter-ending adult position few on generally to one the in AbbVie's MAVIRET recently others. in protein for area the approved XX% quarter compound sales two year small other calendar RSV as the More of we September treatment our and and stated beginning for tiers potential leadership which quarter-to-quarter. unmet later Royalties has result dosing quarter to the than well in rate respiratory effective guidance RSV moved our in million infection. which medical Ribavirin, be a particularly the Enanta which agreement prior patient an to with this importantly now this a today. AbbVie as XXXX. increase inhibitor will as immediately care conference year only published MAVIRET inhibitor details being inhibitors. would targeting and Germany, turn only virus ended the is financial efforts RSV is Based program and our $XX than works of only potent discuss has major the infection a minutes. adults. our royalties less RSV continue into is MAVIRET in Spain milestones. higher On I'd RV of compared machinery lead Paul agents advised advancing term replication an to in strong virus earned high This has development receive like June the represent

that as drugs an EDP-XXX its world events the appropriate real [indiscernible] settings. of conference. more X the target result, and hope medical mechanisms at this too safe This support and the Phase tolerated dose maybe a X. preliminary was to X As fusion Phase early Phase generally later study late that well announced report to that we infection demonstrated afternoon year in such with inhibitors progression treat of infections We from data results to

unknowns As two or efficacy are in in keys trials and failure success of all safety a the the clinical study.

In occulated adults challenge and in program in year, would step Xa Xa calendar quarter and Xb X this next where to in believe RSV. and will duration RSV the well. important to the MAD seven as Phase of For perspective be Phase likely de-risking portion challenge be Phase for X begin Phase safety applicable Phase from dosing program the our day the X one and comparable with our our RSV dosing study study, few is the the healthy event duration as Phase of trials studies is fourth study the program, the a in planned indications of the human to we

continues for two Moving our EDP-XXX. and clinical X and [indiscernible] NASH with PBC to studies Phase

is safety, our agonist and FXR double-blind the a Phase clinical Our ARGON-X controlled of subjects XX-week pharmacokinetic X candidate. randomized in NASH. evaluating with study, placebo EDP-XXX In named tolerability, study efficacy NASH

safety continue liver in measure phosphatase This we throughout mid-XXXX. NASH. of by assess study with and also of efficacy pharmacokinetics, evaluating endpoints PBC, clinical will role evaluating our a a tolerability, of in will or into In response chronic placebo-controlled or study concept enroll anticipate and placebo. safety, fibrosis EDP-XXX efficacy will treatment acid, multiple imaging changes studies alanine data to randomized secondary alkaline EDP-XXX remainder focus X reductions levels These and important ALT of in the PBC without available will XXXX As and study or the evaluating ursodeoxycholic in The primary and currently with injury endpoints, XXXX, and subjects versus in of on preliminary significant is transaminase assessed steatosis. an this be ALP an a for play named inadequate NASH XX-week INTREPID PBC. Phase double-blind study noninvasive to sharing to of of including markers proof levels

on effective estimated that It's move people cure. to and Let's XXX worldwide is million no with HBC. are been infected there HBV,

We are multiple to to the that a addition Our protein. and allosteric assembly inhibitors may HBV core in steps replication to of and treatment generating is class than new to assembly inhibitors the virus HBV promising modulators inhibitors move continues now that mechanism Core modulators or referred it more necessary this and of be sometimes for in believe program of we ahead the can core inhibition. the viral HBV, multiple protein of are core one utilize as exploring capsid at disrupt approaches lifecycle.

team through testing portfolio, viral Enanta patent our inhibitors strengthen to has XXXX. first at continue pre-clinical our new core I'm we announce the later hope we have we multiple promising pipeline HBV in that advanced proud disease of and and candidate the As built. calendar to liver

success Our and financials chosen to turn discuss expertise the to before areas achieved in our more I core have stop look Paul? forward therapeutic for success quarter. the on I'll in here where and Paul build we future. call over to our the HCV

Paul Mellett

I'd year everyone on to Thank Enanta that like Jay. a reports you, schedule. remind fiscal

million in hepatitis quarter are in of September our global the including XX virus on was XX% XXXX same $XX.X to results months increase June in for XXXX. in in the year-ended quarter. reporting of increase sales sales three The revenue XX, royalties period an earned of million C The fiscal $XXX we XXXX. ended the quarter revenue and AbbVie's in current June royalties of was $XXX MAVIRET ended due on XX, regimens the million Our $X.X million compared revenue for to today third

our Jay earned on that to earlier, royalties the continue earned sales tiers, brings cumulative entered year increase the expect have royalties HCV to quarter royalty we sales rate HCV to substantially be our and realizes approximately approximately due for we we Based AbbVie's projection recent Enanta given regimen sales all under to net will now September guidance As sales global during royalty to that expect its which $XX those in our into with quarter quarter would ending $XXX HCV tiers MAVIRET. in mentioned AbbVie's increase recent AbbVie. higher the We expect calendar higher next into agreement million AbbVie for continue the XXXX and XX, that of of on of million.

of HCV $X.X be would total to million. $XX with Assuming the to XX more sales MAVIRET, AbbVie approximately billion expect achieves those guidance $X.X billion sales all December in and in substantially consistent earn than their calendar in of continue XXXX quarter-ending of royalties we

event given eligible XX% This will global in royalty tiered our ending be tear royalty rate royalties any that on average hit will in MAVIRET. to would net HCV you is means quarter our quarter-ending a year in annually not royalties XX. we that earn of However, AbbVie highest I restart our XX% Enanta to the XX sales expect our lowest for royalty March in rate period. remind double-digit and will to the that of December

was XXXX. in Enanta for June to RSV administrative period million expenses $XX.X XX, cost $XX.X of ended expenses was and compared ended and $X.X ended million to XXXX. our $X.X three June to million and three with to increase progression in XXXX for the quarter of on for recorded $X.X PBC, clinical development months preclinical due same for the associated to The million benefit HBV. versus the General XX, our three Moving owned comparable programs the the XXXX. an quarter increased tax R&D million NASH, research million the the expenses months wholly greater for of in months June expense compared income XXXX $X.X primarily for income and tax XX,

net a by reflect incomes benefits impact in the was cents million June months $X.XX the to the ended offset enactment estimated per Enanta's three $XXX or during the months loss non-cash XXXX US our XXXX. for three common per charge or tax income deferred XX, $X.X year-end the XXXX activity. includes XXXX effective annual reflected Tax quarter tax the of increase expense fiscal Cuts the Enanta for ended a award of impact XXXX consistent of June $X.XX XX, excess and the to million, corporate million Jobs for the quarter share rate approximately diluted of XX.X% of against from act. of Net as During tax in income tax $XX.X September rate period the result share in the federal million. income fiscal with balance assets the marketable XX, reduced stock significant of valuation cash tax pretax diluted and corresponding with common compared $XXX securities ended

royalties back We our release future. our and open requirements call flow quarter this the to filed. up Q&A. sufficient when and for Form for expect for that details Further Operator? I'd in meet in available be royalty lines anticipated these now to the cash future our be and XX-Q press MAVIRET the our foreseeable operator cash quarter for our resources the financial receivables like will are turn available to cash are for the will earned

Operator

from Yes, comes question And first Abrahams [Operator Instructions] Brian RBC sir. Markets. of Capital your

Brian Abrahams

the my on much Congrats so taking for XXX. Hi. progress Thanks questions. with

about meeting, to could if a Just in of And for you like details that the provide properties of of saw little loading maybe Phase anymore if this are a wondering, talk if whether what the et the a The you're recognizing a X would thinking the not. cetera. once more you specific bit qualitatively PK or in looks out a could design of maybe but study X, sort medical about this duration color day wonder going you coming drug? challenge be be the a multiple how times Thanks. day study or dose saved Phase

Jay Luly

Sure. Thanks question Brian for Jay. is the this

detail, this Phase we of later pleased out all X from I going So, the would a the We but PK it's results are tolerated. the well with put nitty conference very think again we're for and year again to gritty got good a all profile. the say

how does study, You heard test The doses. points fair you versus flexibility dose, can that does number duration, study getting on QT lots a the of a about only it even think ask a you more up asking loading different The amount Phase trial. you of but question approaches more treatment, questions given to talking of thing it flexibility. you the by there's Xa good questions at longer the look different or figure takes look longer is look the set and about can really program trial be some this expedient at allow to give should the to Further next things it at and challenge the is and us does the shorter really out no loading at PID you help an look step us Xb patients. Phase de-risk going on which those

do expeditiously possible. to as as that So, we want

we I dosing, interrogating in so So, think likely I possibility answer our that that study. we the it's about versus think that [ph] QT PK ideas certainly think can question the this may offers of

a would it to ever backward again shame think something go, on to like have be I that. go

setting will it bases maximize cover in us our success. of make allow and our So, we that sure chances to

this look viral [indiscernible] really later raised all the very symptoms out so we'll load trial question at it closer again, trial details initiation little design again good like You these that us to only put final give year. signs not connection that are that's of questions also, itself, allows the readouts and the apt the for but quick but to And a you reductions with those, forth. on aimed way we and loading a but can

before going it. we be know that'll So,

Brian Abrahams

the potential studies? And what's think to the I Phase helpful. to type a from those to work way study really RSV from study challenge Phase and a lines proof about a guess That's of then translatability X, in along preclinical right success concept X challenge then

Jay Luly

have data great which front RSV. there the of I opportunities in one of Sure aren't guess we that points so, many in us. is that

used know not you a as drug As are adults. syndication, broadly in other really kids count which in commonly that all that's at not used Ribavirin there we and can't the in used

wide-open really in that. space of it's So, terms

some that a challenge duration on predicted model really primate So, study the front some the it's you sort study. with it be that want X back of Alias, done What at sure concentrations that There study. was how the you company Phase primate they you they overall, turn of of study that the that in like to understandings part of to called similar a used step J&J and if had in of the need done target virus pressure the has and things to -- then general throughout of that that bacteria is of transability of we've we've of we seen -- But did. those comment viral in then get the a kinds good remain in models infections seen. infection you deliver you it what the effectively that us like gone keep keep least and some did non-human to want multiples virus the of have things on that make pile efficacy you to then on and so you pressure to

to So, in compound we a we've barrier looking strong got very very non-human and certainly combinations. with have that model of other this lot mechanism virology comparable how high primate generated and data resistance at efficacy a very

in and over matter at time, you again period you good very lab a this stone bug of good says deliver in that can days. a it of a these only drug certain this a can safely you short talking a But at can human a I we're as when stage. concentration levels the think that predictions you any in case never get as there's attack again, So count things on generally

it plays think I out set encouraging So, next for all an of us.

Paul Mellett

that tasking to cells looking real we're at infected could where Going beyond one, and studies. there going of as now infection but rarely the to the I of those J&J step one with some think of taking challenge has we that advantages looking fusion having out only a antiviral think can after at that going target there companies, approach we I out and having step. there they're some direct especially the N-protein that that's chartered be as the fusion human enter Xa and except has are be in that waters the pointed fusion mechanism kinds study the from by for translation and of inhibitors something with and early already you Gilead into blocks small patients so certainly other inhibitors stage some very opposed the

we'll approach So, going. get a organized all our those as with But enough advantage trials I of well. think that's potential that writing

Brian Abrahams

quick to back sort of now? Great. I drugs management an common say the on space or I'll guess by maybe commentary the I morning I the update. the we're in more, of Scripts the Express was outlier this Would placing up still this Thanks. we that hop one guess How Hep is parity most be from plans C at formulary me One all Hep the and of seeing more fair formulary following saw having just and on what queue drugs your C in it the in guess C formulary? Hep

Jay Luly

or for skilled is pairs. very of and and see sort these season year to only a that all expert is negotiating are because year is peer you're toing Yes, sort it's C, we is at area this this that really accounts terms and the that decision, is it be the something certainly Right, the XXXX honestly of or as quite question traditional every generally this going of when the of this remembering two-thirds in but you of know majority address people the when private. the up are are AbbVie's it's well negotiations I'll used that in which ramping to going and with it froing as market contracts it worth domain all very payer either they made them Scripts patients, but Express about much also of Hep and probably not year think forward not new public probably did

this And in HCV of HCV, so, you being public majority chunk big of account. patients the have

in this they and as year confident accounts AbbVie's their look XXXX payer in when certainly and very class. they're you contracting calendar see So, similar based to on for participating very they private the success XXXX across that participation expect XXXX comments we're well see in in

few So, it fraction of are only private year. a Scripts part sharing a market, just of the smaller points was HCV that. it's had part all even this Express a not already AbbVie that in the is anyway Gilead so Scripts Express of

remember net you are be think the toing appears for contract for one So, effect, small down when year-to-date US. at from it froing market negotiations compensated other XXXX. that all And could going about that that came of I a US also it came of change XX% XX% when you be that is AbbVie's sales easily large in is we're on which relatively it it HCV outside distill the of a but the US from talking sales, and and HCV to the this look

even Scripts names other So, lot And very seeing overall. whatever you a again, still of effects have Express these talking a pertains Scripts. we are it the to small about with piece part smaller out the piece, there thing on small besides of we're only market that Express of this are

a get Humana. folks Prime, bunch of Cigna, these all Anthem, contracts, There's out are UnitedHealth, these Again, CBS, all negotiated. there. got You

concerned over So, that doesn't but would to AbbVie XXXX XXXX. say stay seem tuned very about I

Brian Abrahams

Thank Jay. you so much

Jay Luly

welcome. You're

Operator

Rahimi comes Capital Your of next Roth from Yasmeen Partners. question

Yasmeen Rahimi

nicely. A of answered congrats you Hi continued Jay team number very my questions on progress. the

topics. -- your did So couple other quickly What then RSV, the in and into one more how you study? Phase X on higher go on dose follow-up

Jay Luly

in spread of doses we all doses, way things kind ranges. We we an study does antiviral wide out of I put and activity it We do any sort doses out in But in a can and the PK. extraordinary. looked so a in put the normal the connection that over packed laying out. at guess all we nothing with context haven't ranging it the was of different variety we'll our of orderly

data. we'll out when we put put on anyway So, when more we the information that

Yasmeen Rahimi

more did come your that from And correctly income NASH, then continuing than I later to in you're second Mid-XXXX? question mean in data that the does potentially guided enrollment that could transitioning initially XXXX read you hear out

Jay Luly

today we've been early enrollment we be data. along the mid-XX to mean preliminary would all XX into saying I this all that even and No, year of now for point and

top I change second US second grow to of sort any think to the layering in of in we've real lots the half there's that. running got So, we've up and the there. also of got sites the here don't going first continue in half that's in been Yes, in Europe half on

been the So, I thing we've pretty same think we're much saying that saying.

Yasmeen Rahimi

the trial sort then of getting that bit on part that that as site the far assume of MAVIRET? more be impact little a in regards knowing NASH Can that at you your developer given comment could, you success. investigators I the decision How that in are quite competitive. only individuals can and record more is would does the of favor And track into you enrollment go if realize you being of like that their

Jay Luly

we because part investigators and appreciated of thrilled for that efforts, and have which communications our quite interested that with funny in some is. But an were certainly lack of understand any say it et came that, my widely actually honestly of drug, it's you and I MAVIRET these that think into incorporated from cetera. that with are AbbVie that MAVIRET part Enanta forward to is to significant glecaprevir we of It's many but keep not bringing very AbbVie how sites community

works they sort quality it understand everybody the as glecaprevir suddenly I the you MAVIRET and So, done. to we've that then speaks the work using who understands of And start of that are. when you like think

and new being XDAA I are and that think fine speaks the everything else of the the NSXA MAVIRET to mechanism. gets of and a only in has no the very a can that protease as lot in quality and a that just of offering community respect

out hurts So, none of association. find that individuals certainly when that

Yasmeen Rahimi

if you're one ask seven six, I attributes really may your HBV had from looking you and my potency. high selecting for what three, Can coverage you hold on are you broad Thank because as last candidate recollection next question.

So candidate? what picking winning the are you out there as for looking you

Jay Luly

the again is and on, going time. break-off. properties it's so the any optimizing of We're look just It's exquisitely optimizing given components and different that Safety carefully. we so-called you there are it's It's overall are into many DMPK something that Virology going and manufacturing that at mix. at also are a whole bunch

extra to so, a you seven showed six, end otherwise like at so the come found this up would out kick And three, single it's that two out I'll absolute or sure. the [indiscernible] molecule everything prototype parameter can just molecule patiently time that's that months molecule ourselves and I looked found as strong. because little we picked we're our very way. with day molecules any anything, it on profile and better on on you what the best different not have be and the would few a a a is. single same point it the taking else wouldn't we we very after something, of we focuses and If stayed three picked We've that one different criteria instance say objectively in we that

to get year. that we'll know this and and because enough but see So, we'll we're hoping later going better finalist than soon we're can hoping we pick even that again do

Yasmeen Rahimi

Thank you, Jay.

Jay Luly

You're welcome.

Operator

Oppenheimer. Your comes next Jay question from of Olson

Jay Olson

hi. start questions. taking Thanks had a with question. just them couple Well, the maybe I a for to of financial

next the with us wondering on reason? Express share has market share consider question there finance royalties the I that the and follow-up capital a had low other any is R&D significant what for a to of currently a markets I to that think because and the Scripts you going mentioned there where you your year if I you exclusion and was Is Express Scripts then EDP-XXX? programs MAVIRET in scenario or of at at call share HCV a would decline could market is beginning

Jay Luly

shared Yes, is again Scripts Abbvie's sales. overall in Express the patients was is Scripts Express I two-thirds point don't that is AbbVie just fraction let whatever away well just I of It's but see you've market small HCV -- way, AbbVie then overall are to straight more not I what a share I'll trying in the participation year and think this the of their think because of then with you private private know up different this one they it you're fractions. thing of ways and it's as they substantially are accounts just case us, that down when you Especially when accounts anyway distill to are have in when and to in are and you kinds these one pieces Gilead chopped all with any all isn't that that thing of important whole. the fractions competing

not You know the AbbVie's deal XX%. sales XX% of with other

trying to think we make. main the point were that's I So,

of AbbVie announced that markets, the very cash we've weeks moved continue. got very or cash mean I targets royalties to which have capital ago, remainder strong I today. said up their we've We've as in and couple never sales it royalties We've a position a the expect flow. of never had better to they with higher regards think again strong the we year guidance tiers for had

us indicated they've that similar think I expect here next they year. again share this is substantially participation

and our pipeline capital today that foresee for So, the can't way we future. markets any are current would the approach have need things the I we to plan and foreseeable with the reason moving with

Jay Olson

read in just should and sometime study Phase presumably would we X across EDP-XXX X NASH? and you data Since available reads from Phase on That's become Thank Okay. if regenerate then helpful EDP-XXX. Intercept's after anything NASH you. out. What

Jay Luly

be shown has sort could when different for of The mechanism If most data Intercepts the Well, across of or including fantastic, portfolios this could okay scenarios. most good of be one be look FXR, strongest aspects poor. the can balanced NASH you probablise it's think FXR fibrosis. that I multiple day it fantastic, to could it's different it you at

for other for good what's Intercept is think good FXR's. So, I

you because hard they and know one as safe the pick post other as could didn't that one you If good press they spoken it's a have not be on. could or to goal there

is think think different. don't -- it I So, molecule every bit I a little

comment, little be step right good a higher you level be further multiple a going that to If think I longer-term say it FXR make mechanism, I'll we back from a which bit FXR's out is they're there. proves that, now to is

want that's we by going into and data we'll FXR's these if it's on a would one be just it's to that in in NASH solid be FXR next with protease a player differences year. it one assume follow to there a market naive came that think be are as combination on other multiple day, to out going and to become HEP end therapy molecules, as that be not that FXR to ticket of NSXA there continuing be a commodities X to was into forth of in will there's in that. because it's At to way don't suggest of I only get maximize But okay inhibitors the sorted and and be we proves a to to interesting that ahead and expect them out Much case, it we want find each and so a we Phase they'll chances have obviously build our I C. but mechanism of and there continue when anybody's going game, so mechanisms work it's there. to valuable longer-term I having the that

that some maybe I going it's of the think point. encouraging to end the signs, but be get beginning at we'll

Jay Olson

Okay. helpful That's Thank question. taking Great. my thanks for you. very

Jay Luly

You're welcome.

Operator

JMP question Securities. next Liisa comes Your of from Bayko

Unidentified Analyst

now mine are what thanks if wondering you Liisa, all sales answered, this Hi MAVIRET I short the HCV is of comment ones. to comprised Most [ph] couple have congrats be at future? percentage been taking and on when expect just of you for but progress. could do AbbVie the of for the MAVIRET if a on that question and in Anton completely was

Jay Luly

that related think overall think it and let so the It Well, was This this makes I MAVIRET. for and quarter numbers. was VIEKIRA of XXX I quarter that of think XXX, quarter it was to me XX MAVIRET, most recent activities. XXX XXX was

now right VIEKIRA XX. of sort So, was

expected sort continues continued MAVIRET and plan. over has So again time grow time to that to over produce the and as of VIEKIRA was we

time you to may I that trend over expect would continue So, that's a see.

that much to the the very MAVIRET this share equation going is there's and of question so no now So, which lion's simplifies forward speak. likely

Unidentified Analyst

and then increases was on increased how more R&D up of this XX% wondering the about about year, towards R&D year And just the spend. into end quarter-over-quarter we moving think I through and activity Right. next? was one the back of with half should the

Jay Luly

of to tracking more year. R&D going we'll for progressions roll in Phase not as a a guidance know we'll year give thing X's pipeline plan, undoubtedly new two. generally been new will three we've even Well, because line a have into again good the our new it's growth is you we fiscal But which our have

luck any we'll with know You molecules be and programs. other other advancing

I with would think I to to ready we're of our but plan. right that But fiscal yet. we're guidance regards XX, So, give of sort expect to it on not generally sort quite cracking XXXX on steadily increase

Unidentified Analyst

for questions. taking Great. Thanks the

Jay Luly

welcome. You're

Operator

And there Miceli. time. over the questions queue Carol at further call to now are I'll turn back this in no

Carol Miceli

for us Okay. everyone today. joining Thank you

If you us any have questions additional again. call to give Thanks a free office. feel the in

Operator

today's Ladies this conclude and conference call. does gentlemen,

disconnect. now may You

Enanta Pharmaceuticals (ENTA) 7 Aug 182018 Q3 Earnings call transcript