UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 8, 2016
ENANTA PHARMACEUTICALS, INC.
(Exact name of registrant as specified in its charter)
| Delaware | 001-35839 | 04-3205099 | ||
| (State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
500 Arsenal Street, Watertown, Massachusetts 02472
(Address of principal executive offices and zip code)
(617) 607-0800
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02 Results of Operations and Financial Condition.
On August 8, 2016, Enanta Pharmaceuticals, Inc. announced via press release its results for the quarter ended June 30, 2016. A copy of Enanta’s press release is hereby furnished to the Commission and incorporated by reference herein as Exhibit 99.1.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
| Exhibit |
Description | |
| 99.1 | Press Release of Enanta Pharmaceuticals, Inc., dated August 8, 2016, reporting Enanta’s financial results for the quarter ended June 30, 2016. | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Date: August 8, 2016 | ENANTA PHARMACEUTICALS, INC. | |||||
| By: | /s/ Paul J. Mellett | |||||
| Paul J. Mellett | ||||||
| Senior Vice President, Finance and Administration and Chief Financial Officer | ||||||
EXHIBIT INDEX
| Exhibit |
Description | |
| 99.1 | Press Release of Enanta Pharmaceuticals, Inc., dated August 8, 2016, reporting Enanta’s financial results for the quarter ended June 30, 2016. | |
Exhibit 99.1
For Immediate Release
Enanta Pharmaceuticals Reports Financial Results for its
Fiscal Third Quarter Ended June 30, 2016
Conference Call and Webcast Today at 4:30 p.m. ET
| • | Royalty revenue was $14.0 million |
| • | R&D expense increased to $10.8 million in support of pipeline development |
| • | Cash and marketable securities totaled $244.7 million at June 30, 2016 |
WATERTOWN, Mass., August 8, 2016 — 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, 2016.
Enanta’s cash, cash equivalents and short-term and long-term marketable securities totaled $244.7 million at June 30, 2016. This compares to a total of $209.4 million in such accounts at September 30, 2015. Enanta expects that its current cash, cash equivalents and marketable securities will be sufficient to meet the anticipated cash requirements of its existing business for the foreseeable future.
Fiscal Third Quarter Ended June 30, 2016 Financial Results
Revenue for the three months ended June 30, 2016 was $14.0 million, compared to $11.6 million for the three months ended June 30, 2015. The increase in revenue in 2016 was attributable to higher royalties earned from AbbVie as a result of higher sales of its hepatitis C virus (HCV) treatment regimens outside of the U.S. For the nine months ended June 30, 2016, revenue was $75.4 million compared to revenue of $146.5 million for the same period in 2015. The decrease in revenue in the year-to-date 2016 period was due primarily to a reduction in milestone payments versus the comparable period in 2015. Enanta earned $125.0 million in milestone payments from AbbVie in 2015 compared to $30.0 million in 2016 based on timing of achievement of commercialization regulatory approvals of its HCV treatment regimens in the U.S. and Europe (2015) and Japan (2016). In 2016, the decrease in milestone payments was partially offset by higher royalties earned from AbbVie’s worldwide net sales of its HCV regimens. Enanta’s milestone payments, royalties and other payments received from collaborations have varied significantly from period to period, and are expected to continue to do so.
Research and development expenses totaled $10.8 million for the three months ended June 30, 2016, compared to $6.3 million for the three months ended June 30, 2015. For the nine months ended June 30, 2016, research and development expenses were $29.0 million, compared to $16.1 million for the same period in 2015. The increase in the three and nine month periods was primarily due to increased pre-
| Enanta Pharmaceuticals, Inc. | Page | 1 of 5 |
clinical and clinical costs due to the progression of Enanta’s wholly-owned R&D programs in HCV cyclophilin, non-alcoholic steatohepatitis (NASH), respiratory syncytial virus (RSV) and hepatitis B virus (HBV).
General and administrative expenses totaled $4.3 million for the three months ended June 30, 2016, compared to $3.6 million for the three months ended June 30, 2015. For the nine months ended June 30, 2016, general and administrative expenses were $12.5 million compared to $9.9 million for the same period in 2015. The increase in the three and nine month periods primarily reflects increases in stock-based compensation expense driven by increased headcount.
Income tax (expense) benefit for the three months ended June 30, 2016 was ($0.4) million compared to $0.4 million for the corresponding period in 2015. During the three months ended June 30, 2016, Enanta increased its estimate of its annual effective tax rate for fiscal 2016, which resulted in an income tax provision despite a pre-tax loss for the quarter. Income tax (expense) for the nine months ended June 30, 2016 was ($11.7) million compared to ($48.1) million for the corresponding period in 2015, representing annual effective tax rates of 33.3% and 39.7%, respectively, for those periods.
Net loss for the three months ended June 30, 2016 was ($1.1) million, or ($0.06) per diluted common share, compared to net income of $2.4 million or $0.13 per diluted common share, for the corresponding period in 2015. Net income for the nine months ended June 30, 2016 was $23.5 million, or $1.22 per diluted common share, compared to net income of $73.2 million or $3.80 per diluted common share, for the corresponding period in 2015.
“Enanta is fortunate to be in a position to fund substantial R&D programs to build shareholder value without dilution. Our diverse, wholly-owned pipeline is progressing well and as expected,” commented Jay R. Luly, Ph.D., President and Chief Executive Officer. “EDP-305, our FXR agonist candidate for non-alcoholic steatohepatitis and primary biliary cholangitis, is on track to be in the clinic in the coming months, and we have several promising leads in RSV and HBV which we are evaluating to move forward in 2017.”
Development Program and Business Review
| • | Enanta is planning to initiate phase 1 clinical development in the second half of calendar 2016 for EDP-305, Enanta’s wholly-owned Farnesoid X Receptor (FXR) agonist candidate for non-alcoholic steatohepatitis (NASH) and Primary Biliary Cholangitis (PBC). |
| • | Several abstracts regarding Enanta’s wholly-owned pipeline programs in HCV and NASH have been accepted for presentation at The Liver Meeting® in November 2016. |
| • | The U.S. Food and Drug Administration granted marketing approval for AbbVie’s VIEKIRA XR™ for the treatment of genotype 1 hepatitis C virus. VIEKIRA XR, which includes paritaprevir, is a once-daily dosing regimen of the three direct-acting antivirals (DAAs) in VIEKIRA PAK®. |
| • | Enanta initiated a phase 1 proof-of-concept study in HCV using EDP-494, Enanta’s cyclophilin inhibitor targeted to treat resistance-associated variants, DAA failures and other hard to treat populations with HCV infection. |
| Enanta Pharmaceuticals, Inc. | Page | 2 of 5 |
Upcoming Events and Presentations
| • | September 7-8, 2016 – Baird 2016 Global Healthcare Conference, New York |
| • | September 12-14, 2016 – Morgan Stanley Global Healthcare Conference, New York |
| • | Enanta plans to issue its fourth quarter financial results press release, and hold a conference call regarding those results, during the week of November 21, 2016. |
Conference Call and Webcast Information
Enanta will host a conference call and webcast today at 4:30 p.m. Eastern time. 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. Eastern time on August 8, 2016, through 11:59 p.m. Eastern time on August 12, 2016 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 46602812. A live audio webcast of the call and replay can be accessed by visiting the “Calendar of Events” section on the “Investors” page of Enanta’s website at www.enanta.com.
About Enanta
Enanta Pharmaceuticals is a research and development-focused biotechnology company that uses its robust chemistry-driven approach and drug discovery capabilities to create small molecule drugs for viral infections and liver diseases. Enanta’s research and development is currently focused on four disease targets: Hepatitis C Virus (HCV), Hepatitis B Virus (HBV), Non-alcoholic Steatohepatitis (NASH) and Respiratory Syncytial Virus (RSV).
Enanta has developed direct-acting-antiviral (DAA) inhibitors designed for use against HCV. Enanta’s protease inhibitors, developed through its collaboration with AbbVie, include paritaprevir, which is contained in AbbVie’s marketed DAA regimens for HCV, and ABT-493, Enanta’s second protease inhibitor, which AbbVie is developing in phase 3 studies in combination with ABT-530, AbbVie’s NS5A inhibitor. Enanta has also discovered a cyclophilin inhibitor, EDP-494, a novel, host-targeting mechanism for HCV, which is now in phase 1 clinical development, and EDP-305, an FXR agonist, which Enanta plans to advance into clinical development for NASH later in 2016. In addition, Enanta has early lead candidates for HBV and RSV in preclinical testing. Please visit www.enanta.com for more information on Enanta’s programs and pipeline.
Forward Looking Statements Disclaimer
This press release contains forward-looking statements, including statements with respect to the prospects for further clinical development of Enanta’s cyclophilin inhibitor for the treatment of HCV, the prospects for advancing EDP-305 for the treatment of NASH into clinical development, the prospects for advancement of another program in HBV or RSV, and the projected sufficiency of Enanta’s cash-equivalent resources and marketable securities. Statements that are not historical facts are based on management’s current expectations, estimates, forecasts and projections about Enanta’s business and the industry in which it operates and management’s beliefs and assumptions. The statements contained in this release are not guarantees of future performance and involve certain risks, uncertainties and assumptions, which are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed in such forward-looking statements. Important factors and risks that may affect
| Enanta Pharmaceuticals, Inc. | Page | 3 of 5 |
actual results include: Enanta’s revenues in the short-term are dependent upon the success of AbbVie’s continuing commercialization efforts for its HCV treatment regimens containing paritaprevir; Enanta’s longer term revenues will be dependent upon the success of AbbVie’s planned clinical development, regulatory approval and commercialization of its investigational HCV treatment regimen containing ABT-493; competitive pricing, market acceptance and reimbursement rates of AbbVie’s treatment regimens containing paritaprevir or ABT-493 compared to competitive HCV products on the market and product candidates of other companies under development; the discovery and development risks of early stage discovery efforts in new disease areas such as HBV, NASH and RSV; potential competition from the development efforts of others in those new disease areas; Enanta’s lack of clinical development experience; Enanta’s need to attract and retain senior management and key scientific personnel; Enanta’s need to obtain and maintain patent protection for its product candidates and avoid potential infringement of the intellectual property rights of others; and other risk factors described or referred to in “Risk Factors” in Enanta’s most recent Form 10-K for the fiscal year ended September 30, 2015 and other periodic reports filed more recently with the Securities and Exchange Commission. Enanta cautions investors not to place undue reliance on the forward-looking statements contained in this release. These statements speak only as of the date of this release, and Enanta undertakes no obligation to update or revise these statements, except as may be required by law.
ENANTA PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
| Three Months Ended June 30, |
Nine Months Ended June 30, |
|||||||||||||||
| 2016 | 2015 | 2016 | 2015 | |||||||||||||
| Revenue |
$ | 13,978 | $ | 11,599 | $ | 75,427 | $ | 146,464 | ||||||||
| Operating expenses |
||||||||||||||||
| Research and development |
10,785 | 6,253 | 28,961 | 16,140 | ||||||||||||
| General and administrative |
4,282 | 3,643 | 12,526 | 9,850 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total operating expenses |
15,067 | 9,896 | 41,487 | 25,990 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Income (loss) from operations |
(1,089 | ) | 1,703 | 33,940 | 120,474 | |||||||||||
| Other income, net |
447 | 287 | 1,248 | 798 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Income (loss) before income taxes |
(642 | ) | 1,990 | 35,188 | 121,272 | |||||||||||
| Income tax (expense) benefit |
(434 | ) | 428 | (11,720 | ) | (48,092 | ) | |||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net income (loss) |
$ | (1,076 | ) | $ | 2,418 | $ | 23,468 | $ | 73,180 | |||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net income (loss) per share |
||||||||||||||||
| Basic |
$ | (0.06 | ) | $ | 0.13 | $ | 1.24 | $ | 3.92 | |||||||
| Diluted |
$ | (0.06 | ) | $ | 0.13 | $ | 1.22 | $ | 3.80 | |||||||
| Weighted average common shares outstanding |
||||||||||||||||
| Basic |
18,983 | 18,697 | 18,893 | 18,660 | ||||||||||||
| Diluted |
18,983 | 19,278 | 19,223 | 19,277 | ||||||||||||
| Enanta Pharmaceuticals, Inc. | Page | 4 of 5 |
ENANTA PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
| June 30, 2016 |
September 30, 2015 |
|||||||
| Assets |
||||||||
| Current assets |
||||||||
| Cash and cash equivalents |
$ | 24,789 | $ | 21,726 | ||||
| Short-term marketable securities |
193,676 | 123,479 | ||||||
| Accounts receivable |
13,978 | 15,289 | ||||||
| Unbilled receivables |
— | 433 | ||||||
| Deferred tax assets |
1,147 | 1,447 | ||||||
| Prepaid expenses and other current assets |
8,200 | 8,267 | ||||||
|
|
|
|
|
|||||
| Total current assets |
241,790 | 170,641 | ||||||
| Property and equipment, net |
7,499 | 5,886 | ||||||
| Long-term marketable securities |
26,194 | 64,238 | ||||||
| Deferred tax assets |
5,843 | 4,640 | ||||||
| Restricted cash |
608 | 608 | ||||||
|
|
|
|
|
|||||
| Total assets |
$ | 281,934 | $ | 246,013 | ||||
|
|
|
|
|
|||||
| Liabilities and Stockholders’ Equity |
||||||||
| Current liabilities |
||||||||
| Accounts payable |
$ | 2,044 | $ | 1,543 | ||||
| Accrued expenses and other current liabilities |
4,583 | 3,962 | ||||||
| Income taxes payable |
2,942 | 1,199 | ||||||
|
|
|
|
|
|||||
| Total current liabilities |
9,569 | 6,704 | ||||||
| Warrant liability |
1,237 | 1,276 | ||||||
| Series 1 nonconvertible preferred stock |
158 | 163 | ||||||
| Other long-term liabilities |
1,963 | 1,713 | ||||||
|
|
|
|
|
|||||
| Total liabilities |
12,927 | 9,856 | ||||||
|
|
|
|
|
|||||
| Total stockholders’ equity |
269,007 | 236,157 | ||||||
|
|
|
|
|
|||||
| Total liabilities and stockholders’ equity |
$ | 281,934 | $ | 246,013 | ||||
|
|
|
|
|
|||||
Investor Contact
Carol Miceli
Enanta Pharmaceuticals, Inc.
617-607-0710
cmiceli@enanta.com
Media Contact
Kari Watson
MacDougall Biomedical Communications
781-235-3060
kwatson@macbiocom.com
###
| Enanta Pharmaceuticals, Inc. | Page | 5 of 5 |