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): May 8, 2017
ENANTA PHARMACEUTICALS, INC.
(Exact name of Registrant as Specified in Its Charter)
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Delaware |
001-35839 |
04-3205099 |
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(State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
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500 Arsenal Street, Watertown, Massachusetts 02472
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(Address of principal executive offices and zip code)
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(617) 607-0800 |
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(Registrant’s telephone number, including area code)
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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 Instructions A.2. below):
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933
(17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
Emerging growth company ☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒
Item 2.02 Results of Operations and Financial Condition.
On May 8, 2017, Enanta Pharmaceuticals, Inc. announced via press release its results for the fiscal quarter ended March 31, 2017. 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
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Exhibit No. |
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Description |
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99.1 |
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Press Release of Enanta Pharmaceuticals, Inc., dated May 8, 2017, reporting Enanta’s financial results for the fiscal quarter ended March 31, 2017. |
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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 thereunto duly authorized.
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ENANTA PHARMACEUTICALS, INC. |
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Date: May 8, 2017 |
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By: |
/s/ Paul J. Mellett |
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Paul J. Mellett |
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Senior Vice President, Finance and Administration and Chief Financial Officer |
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Exhibit No. |
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Description |
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99.1 |
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Press Release of Enanta Pharmaceuticals, Inc., dated May 8, 2017, reporting Enanta’s financial results for the fiscal quarter ended March 31, 2017. |
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Exhibit 99.1
For Immediate Release
Enanta Pharmaceuticals Reports Financial Results for its Fiscal Second Quarter Ended
March 31, 2017
Webcast and Conference Call today at 4:30 p.m. ET
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Royalty revenue was $9.0 million |
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R&D expense increased to $13.0 million in support of pipeline development |
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Cash and marketable securities totaled $240.9 million at March 31, 2017 |
WATERTOWN, Mass., May 8, 2017 – 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 second quarter ended March 31, 2017.
Enanta’s cash, cash equivalents and short-term and long-term marketable securities totaled $240.9 million at March 31, 2017. This compares to a total of $242.2 million in such accounts at September 30, 2016. Enanta expects that its current cash, cash equivalents and marketable securities will be sufficient to meet the anticipated cash requirements of its existing business and development programs for the foreseeable future.
Fiscal Second Quarter Ended March 31, 2017 Financial Results
Total revenue for the three months ended March 31, 2017 was $9.0 million, compared to $13.0 million for the three months ended March 31, 2016. For the six months ended March 31, 2017, total revenue was $19.4 million, compared to $61.4 million for the same period in 2016. For the three and six month periods ended March 31 2017, revenue consisted exclusively of royalties earned on AbbVie’s worldwide net sales of HCV regimens containing paritaprevir. For the 2016 six month period, revenue consisted primarily of royalty revenues as well as a $30.0 million milestone payment for the reimbursement approval of VIEKIRAX® in Japan. Milestone payments and royalties have varied significantly from period to period, and we expect that variability to continue in the future.
Research and development expenses totaled $13.0 million for the three months ended March 31, 2017, compared to $9.1 million for the three months ended March 31, 2016. For the six months ended March 31, 2017, research and development expenses totaled $25.5 million compared to $18.2 million for the same period in 2016. The increase in research and development expenses was primarily due to increased preclinical and clinical costs associated with the progression of Enanta’s wholly-owned R&D programs in non-alcoholic steatohepatitis (NASH)/primary biliary cholangitis (PBC), respiratory syncytial virus (RSV) and hepatitis B virus (HBV).
General and administrative expenses totaled $5.5 million for the three months ended March 31, 2017, compared to $4.4 million for the three months ended March 31, 2016. For the six months ended March 31, 2017, general and administrative expenses was $10.4 million, compared to $8.2 million for the same period in 2016. For the three month period, the increase in general and administrative expenses was primarily due to increases in stock-based compensation expense driven by increased headcount. For the six month period, the increase was due to increased headcount as well as achievement of milestones under existing performance-based stock awards.
Enanta recorded an income tax benefit for the three months ended March 31, 2017 of $3.6 million compared to an income tax expense of $1.6 million for the same period in 2016. The Company’s estimated annual effective tax rate for fiscal 2017 of 33.0 percent was slightly below the statutory rate of 35.0 percent due to the availability of federal research and development tax credits.
Net loss for the three months ended March 31, 2017 was $5.4 million, or $(0.28) per diluted common share, compared to net loss of $1.6 million, or ($0.09) per diluted common share, for the corresponding period in 2016. For the six months ended March 31, 2017, net loss was $10.4 million, or ($0.54) per diluted common share, compared to net income of $24.5 million, or $1.28 million per diluted common share, for the corresponding period in 2016.
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Enanta Pharmaceuticals, Inc. |
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Page | 1 of 5 |
“With our second partnered protease inhibitor product, glecaprevir, expected to launch starting in August, as part of AbbVie’s new, investigational G/P treatment for HCV, the prospects for additional milestone and royalty payments to us for G/P are significant,” stated Jay R. Luly, Ph.D., President and Chief Executive Officer, Enanta. “Any such payments, coupled with our existing financial resources, will allow us to advance our clinical program in NASH/PBC and also fund our additional R&D programs, including our lead compound EDP-938 for RSV, scheduled to begin clinical development later this year.”
Development Program and Business Review
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Enanta presented new preclinical data on EDP-305, its wholly-owned FXR agonist for non-alcoholic steatohepatitis, at the International Liver Congress™ (ILC) 2017 in Amsterdam. Data from three poster presentations presented at the Congress demonstrated that EDP-305 is a potent Farnesoid X receptor (FXR) agonist that has been shown to reduce expression of fibrogenic genes, reduce fibrosis progression and improve non-alcoholic fatty liver disease (NAFLD) activity scores (NAS) in a variety of preclinical models. |
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Enanta expects to present clinical data from our ongoing Phase 1 clinical study of EDP-305 in healthy volunteers and presumed NAFLD subjects1 and to initiate NASH-enabling studies in the second half of this year. A Phase 2 study in PBC is expected to begin in the fourth quarter of calendar 2017 and Phase 2 studies in NASH are expected to begin in early 2018. |
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Also at the ILC, AbbVie presented new data from its investigational, pan-genotypic, ribavirin-free regimen for hepatitis C virus (HCV) consisting of a combination of glecaprevir/pibrentasvir (G/P). Data from the EXPEDITION-1 study demonstrated that 99 percent (n=145/146) of chronic HCV infected patients with genotype 1, 2, 4, 5 or 6 and compensated cirrhosis (Child-Pugh A) achieved sustained virologic response at 12 weeks post-treatment (SVR12) with G/P. This high SVR12 rate was seen following 12 weeks of G/P treatment without ribavirin. Data were also presented at the ILC from the ENDURANCE-3 study. In this study, 95 percent (n=149/157) of genotype 3 (GT3) chronic HCV-infected patients without cirrhosis and who were new to treatment, achieved sustained virologic response at 12 weeks post-treatment (SVR12) following 8 weeks of treatment with G/P. |
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In March, Enanta announced the Japanese Ministry of Health, Labour and Welfare (MHLW) granted priority review designation to AbbVie’s G/P combination for the treatment of all major genotypes (GT1-6) of chronic hepatitis C virus (HCV) infection. AbbVie had submitted the NDA for the G/P regimen in Japan in February 2017. The NDAs for G/P in the U.S and Japan have been granted priority review designation, and the MAA for G/P has been granted accelerated assessment in the E.U. |
Upcoming Events and Presentations
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On June 25 at the XIX International Symposium on Respiratory Viral Infections in Berlin, Germany, Enanta will present data on EDP-938, its respiratory syncytial virus inhibitor candidate in an oral presentation titled: “EDP-938, a Novel Non-Fusion Replication Inhibitor of Respiratory Syncytial Virus, Demonstrates Potent Antiviral Activities both In Vitro and In Vivo”. |
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Enanta plans to issue its fiscal third quarter financial results press release, and hold a conference call regarding those results, in the week of August 7, 2017. |
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 May 8, 2017, through 11:59 p.m. Eastern time on May 12, 2017 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 6851190. 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 efforts are currently focused on the following disease targets: non-alcoholic steatohepatitis (NASH)/ primary biliary cholangitis (PBC), respiratory syncytial virus (RSV) and hepatitis B virus (HBV).
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Presumed NAFLD subjects in this study are obese subjects, with or without pre-diabetes or type-2 diabetes. |
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Enanta Pharmaceuticals, Inc. |
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Page | 2 of 5 |
Enanta has discovered novel protease inhibitors for use against the hepatitis C virus (HCV). These protease inhibitors, developed through Enanta’s collaboration with AbbVie, include paritaprevir, currently marketed in AbbVie’s HCV regimens, and glecaprevir (ABT-493), Enanta’s second protease inhibitor product, which AbbVie is developing as part of its investigational, pan-genotypic HCV regimen of glecaprevir/pibrentasvir (G/P) now in registration in the U.S., the E.U. and Japan and other jurisdictions. Royalties and any further milestone payments from this collaboration will provide additional funding for Enanta’s earlier development programs, including its Phase 1 FXR agonist program for NASH/PBC, and its preclinical programs for HBV and RSV. Please visit www.enanta.com for more information on Enanta’s programs and pipeline.
Forward Looking Statements
This press release contains forward-looking statements, including statements with respect to the prospects for AbbVie’s investigational G/P regimen in HCV and the prospects for advancement of Enanta’s earlier stage programs in NASH/PBC and RSV. 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 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 efforts to obtain regulatory approvals for G/P and commercialize that regimen; competitive pricing, market acceptance and reimbursement rates of AbbVie’s treatment regimens containing paritaprevir or its G/P combination 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 other disease areas such as NASH, PBC,RSV and HBV; potential competition from the development efforts of others in those other 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, 2016 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.
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Enanta Pharmaceuticals, Inc. |
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Page | 3 of 5 |
ENANTA PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
UNAUDITED
(in thousands, except per share amounts)
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Three Months Ended |
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Six Months Ended |
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March 31, |
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March 31, |
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2017 |
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2016 |
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2017 |
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2016 |
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Revenue |
$ |
8,959 |
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$ |
13,004 |
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$ |
19,376 |
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$ |
61,449 |
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Operating expenses |
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Research and development |
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13,004 |
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9,143 |
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25,530 |
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18,176 |
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General and administrative |
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5,461 |
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4,426 |
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10,398 |
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8,244 |
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Total operating expenses |
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18,465 |
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13,569 |
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35,928 |
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26,420 |
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Income (loss) from operations |
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(9,506 |
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(565 |
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(16,552 |
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35,029 |
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Other income, net |
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549 |
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472 |
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1,073 |
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801 |
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Income (loss) before income taxes |
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(8,957 |
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(93 |
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(15,479 |
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35,830 |
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Income tax (expense) benefit |
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3,565 |
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(1,552 |
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5,107 |
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(11,286 |
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Net income (loss) |
$ |
(5,392 |
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$ |
(1,645 |
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$ |
(10,372 |
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$ |
24,544 |
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Net income (loss) per share |
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Basic |
$ |
(0.28 |
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$ |
(0.09 |
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$ |
(0.54 |
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$ |
1.30 |
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Diluted |
$ |
(0.28 |
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$ |
(0.09 |
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$ |
(0.54 |
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$ |
1.28 |
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Weighted average common shares outstanding |
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Basic |
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19,047 |
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18,921 |
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19,042 |
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18,848 |
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Diluted |
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19,047 |
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18,921 |
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19,042 |
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19,225 |
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Enanta Pharmaceuticals, Inc. |
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CONDENSED CONSOLIDATED BALANCE SHEETS
UNAUDITED
(in thousands)
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March 31, |
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September 30, |
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2017 |
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2016 |
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Assets |
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Current assets |
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Cash and cash equivalents |
$ |
19,211 |
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$ |
16,577 |
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Short-term marketable securities |
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156,362 |
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193,507 |
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Accounts receivable |
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8,959 |
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12,841 |
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Prepaid expenses and other current assets |
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6,059 |
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9,231 |
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Total current assets |
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190,591 |
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232,156 |
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Property and equipment, net |
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8,526 |
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8,004 |
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Long-term marketable securities |
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65,330 |
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32,119 |
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Deferred tax assets |
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13,903 |
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8,390 |
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Restricted cash |
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608 |
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608 |
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Total assets |
$ |
278,958 |
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$ |
281,277 |
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Liabilities and Stockholders' Equity |
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Current liabilities |
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Accounts payable |
$ |
4,056 |
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$ |
3,377 |
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Accrued expenses and other current liabilities |
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5,098 |
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4,512 |
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Total current liabilities |
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9,154 |
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7,889 |
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Warrant liability |
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1,276 |
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1,251 |
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Series 1 nonconvertible preferred stock |
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162 |
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159 |
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Other long-term liabilities |
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2,355 |
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2,042 |
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Total liabilities |
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12,947 |
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11,341 |
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Total stockholders' equity |
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266,011 |
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269,936 |
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Total liabilities and stockholders' equity |
$ |
278,958 |
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$ |
281,277 |
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Investor Contact
Carol Miceli
617-607-0710
cmiceli@enanta.com
Media Contact
Kari Watson
MacDougall Biomedical Communications
781-235-3060
kwatson@macbiocom.com
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Enanta Pharmaceuticals, Inc. |
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Page | 5 of 5 |