10-Q 1 enta-20231231.htm 10-Q 10-Q
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

Form 10-Q

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 31, 2023

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number 001-35839

 

ENANTA PHARMACEUTICALS, INC.

(Exact name of registrant as specified in its charter)

 

DELAWARE

 

04-3205099

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification Number)

 

500 Arsenal Street

Watertown, Massachusetts

 

02472

(Address of principal executive offices)

 

(Zip Code)

 

(Registrants telephone number, including area code:) (617) 607-0800

 

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, par value $0.01 per share

ENTA

NASDAQ

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No ☒

As of January 31, 2024, the registrant had 21,155,983 shares of common stock, $0.01 par value per share, outstanding.

 

 

 


Table of Contents

 

Page

PART I.

UNAUDITED FINANCIAL INFORMATION

Item 1.

Condensed Consolidated Financial Statements

3

Condensed Consolidated Balance Sheets

3

Condensed Consolidated Statements of Operations

4

Condensed Consolidated Statements of Comprehensive Loss

5

 

Condensed Consolidated Statements of Stockholders' Equity

6

Condensed Consolidated Statements of Cash Flows

7

Notes to Condensed Consolidated Financial Statements (unaudited)

8

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

16

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

26

Item 4.

Controls and Procedures

26

PART II.

OTHER INFORMATION

 

Item 1A.

Risk Factors

26

Item 5.

Other Information

27

Item 6.

Exhibits

28

Signatures

29

 

NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q ("Quarterly Report") contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) about us and our industry that involve substantial risks and uncertainties. All statements other than statements of historical facts contained in this Quarterly Report, including statements regarding our future results of operations and financial condition, business strategy and plans and objectives of management for future operations, are forward-looking statements. In some cases, forward-looking statements may be identified by words such as “anticipate,” “believe,” “continue,” “could,” “design,” “estimate,” “expect,” “intend,” “may,” “plan,” “potentially,” “predict,” “project,” “should,” “will” or the negative of these terms or other similar expressions. We caution you that the foregoing list may not encompass all of the forward-looking statements made in this Quarterly Report.

Forward-looking statements are based on our management’s beliefs and assumptions and on information currently available. These forward-looking statements are subject to a number of known and unknown risks, uncertainties and assumptions, including risks described in the section titled “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended September 30, 2023 and as updated in Item 1A herein.

2


PART I—UNAUDITED FINANCIAL INFORMATION

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

ENANTA PHARMACEUTICALS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited)

(in thousands, except per share data)

 

 

 

December 31,

 

 

September 30,

 

 

 

2023

 

 

2023

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

39,933

 

 

$

85,388

 

Short-term marketable securities

 

 

297,218

 

 

 

284,522

 

Accounts receivable

 

 

8,173

 

 

 

8,614

 

Prepaid expenses and other current assets

 

 

13,245

 

 

 

13,263

 

Income tax receivable

 

 

31,734

 

 

 

31,004

 

Total current assets

 

 

390,303

 

 

 

422,791

 

Property and equipment, net

 

 

12,119

 

 

 

11,919

 

Operating lease, right-of-use assets

 

 

21,344

 

 

 

22,794

 

Restricted cash

 

 

3,968

 

 

 

3,968

 

Other long-term assets

 

 

765

 

 

 

803

 

Total assets

 

$

428,499

 

 

$

462,275

 

Liabilities and Stockholders' Equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

9,326

 

 

$

4,097

 

Accrued expenses and other current liabilities

 

 

11,603

 

 

 

18,339

 

Liability related to the sale of future royalties

 

 

36,512

 

 

 

35,076

 

Operating lease liabilities

 

 

4,966

 

 

 

5,275

 

Total current liabilities

 

 

62,407

 

 

 

62,787

 

Liability related to the sale of future royalties, net of current portion

 

 

151,612

 

 

 

159,429

 

Operating lease liabilities, net of current portion

 

 

20,524

 

 

 

21,238

 

Series 1 nonconvertible preferred stock

 

 

1,423

 

 

 

1,423

 

Other long-term liabilities

 

 

649

 

 

 

663

 

Total liabilities

 

 

236,615

 

 

 

245,540

 

Commitments and contingencies (Note 11)

 

 

 

 

 

 

Stockholders' equity:

 

 

 

 

 

 

Common stock; $0.01 par value per share, 100,000 shares authorized;
   
21,156 and 21,059 shares issued and outstanding at December 31, 2023
   and September 30, 2023, respectively

 

 

212

 

 

 

211

 

Additional paid-in capital

 

 

432,608

 

 

 

424,693

 

Accumulated other comprehensive loss

 

 

(534

)

 

 

(1,174

)

Accumulated deficit

 

 

(240,402

)

 

 

(206,995

)

Total stockholders' equity

 

 

191,884

 

 

 

216,735

 

Total liabilities and stockholders' equity

 

$

428,499

 

 

$

462,275

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

3


ENANTA PHARMACEUTICALS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

(in thousands, except per share data)

 

 

 

 

 

 

Three Months Ended December 31,

 

 

 

2023

 

 

2022

 

Revenue

 

 

 

 

 

 

Royalty revenue

 

$

18,003

 

 

$

22,585

 

License revenue

 

 

 

 

 

1,000

 

Total revenue

 

 

18,003

 

 

 

23,585

 

Operating expenses:

 

 

 

 

 

 

Research and development

 

 

36,371

 

 

 

40,902

 

General and administrative

 

 

16,518

 

 

 

12,696

 

Total operating expenses

 

 

52,889

 

 

 

53,598

 

Loss from operations

 

 

(34,886

)

 

 

(30,013

)

Other income (expense):

 

 

 

 

 

 

Interest expense

 

 

(3,441

)

 

 

 

Interest and investment income, net

 

 

4,298

 

 

 

993

 

Total other income, net

 

 

857

 

 

 

993

 

Loss before income taxes

 

 

(34,029

)

 

 

(29,020

)

Income tax benefit

 

 

622

 

 

 

34

 

Net loss

 

$

(33,407

)

 

$

(28,986

)

Net loss per share, basic and diluted

 

$

(1.58

)

 

$

(1.39

)

Weighted average common shares outstanding, basic and
   diluted

 

 

21,088

 

 

 

20,816

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

4


ENANTA PHARMACEUTICALS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(unaudited)

(in thousands)

 

 

 

 

 

 

 

Three Months Ended December 31,

 

 

 

2023

 

 

2022

 

Net loss

 

$

(33,407

)

 

$

(28,986

)

Other comprehensive income:

 

 

 

 

 

 

Net unrealized gains on marketable securities

 

 

640

 

 

 

1,049

 

Total other comprehensive income

 

 

640

 

 

 

1,049

 

Comprehensive loss

 

$

(32,767

)

 

$

(27,937

)

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

5


ENANTA PHARMACEUTICALS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(unaudited)

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

Other

 

 

 

 

 

Total

 

 

 

Common Stock

 

 

Paid-In

 

 

Comprehensive

 

 

Accumulated

 

 

Stockholders'

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Loss

 

 

Deficit

 

 

Equity

 

Balances, September 30, 2023

 

 

21,059

 

 

$

211

 

 

$

424,693

 

 

$

(1,174

)

 

$

(206,995

)

 

$

216,735

 

Vesting of restricted stock units, net of
   withholding

 

 

97

 

 

 

1

 

 

 

(184

)

 

 

 

 

 

 

 

 

(183

)

Stock-based compensation expense

 

 

 

 

 

 

 

 

8,099

 

 

 

 

 

 

 

 

 

8,099

 

Other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

640

 

 

 

 

 

 

640

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(33,407

)

 

 

(33,407

)

Balances, December 31, 2023

 

 

21,156

 

 

$

212

 

 

$

432,608

 

 

$

(534

)

 

$

(240,402

)

 

$

191,884

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

Other

 

 

 

 

 

Total

 

 

 

Common Stock

 

 

Paid-In

 

 

Comprehensive

 

 

Accumulated

 

 

Stockholders'

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Loss

 

 

Deficit

 

 

Equity

 

Balances, September 30, 2022

 

 

20,791

 

 

$

208

 

 

$

398,029

 

 

$

(3,724

)

 

$

(73,179

)

 

$

321,334

 

Exercise of stock options

 

 

56

 

 

 

1

 

 

 

1,125

 

 

 

 

 

 

 

 

 

1,126

 

Vesting of restricted stock units, net of
   withholding

 

 

37

 

 

 

 

 

 

(825

)

 

 

 

 

 

 

 

 

(825

)

Stock-based compensation expense

 

 

 

 

 

 

 

 

7,139

 

 

 

 

 

 

 

 

 

7,139

 

Other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

1,049

 

 

 

 

 

 

1,049

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(28,986

)

 

 

(28,986

)

Balances, December 31, 2022

 

 

20,884

 

 

$

209

 

 

$

405,468

 

 

$

(2,675

)

 

$

(102,165

)

 

$

300,837

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

6


ENANTA PHARMACEUTICALS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

(in thousands)

 

 

Three Months Ended December 31,

 

 

 

2023

 

 

2022

 

Cash flows from operating activities

 

 

 

 

 

 

Net loss

 

$

(33,407

)

 

$

(28,986

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

Stock-based compensation expense

 

 

8,099

 

 

 

7,139

 

Depreciation and amortization expense

 

 

642

 

 

 

511

 

Non-cash interest expense associated with the sale of future royalties

 

 

299

 

 

 

 

Non-cash royalty revenue

 

 

487

 

 

 

 

Amortization (accretion) of premiums (discounts) on marketable securities

 

 

274

 

 

 

(339

)

Change in operating assets and liabilities:

 

 

 

 

 

 

Accounts receivable

 

 

441

 

 

 

(2,267

)

Prepaid expenses and other current assets

 

 

18

 

 

 

(4,501

)

Income tax receivable

 

 

(730

)

 

 

15

 

Operating lease, right-of-use assets

 

 

1,450

 

 

 

834

 

Other long-term assets

 

 

38

 

 

 

(5

)

Accounts payable

 

 

5,174

 

 

 

(686

)

Accrued expenses

 

 

(6,736

)

 

 

(6,599

)

Operating lease liabilities

 

 

(1,023

)

 

 

(717

)

Other long-term liabilities

 

 

(14

)

 

 

(40

)

Net cash used in operating activities

 

 

(24,988

)

 

 

(35,641

)

Cash flows from investing activities

 

 

 

 

 

 

Purchase of marketable securities

 

 

(146,845

)

 

 

(67,375

)

Proceeds from maturities and sale of marketable securities

 

 

134,515

 

 

 

104,100

 

Purchase of property and equipment

 

 

(787

)

 

 

(3,156

)

Net cash provided by (used in) investing activities

 

 

(13,117

)

 

 

33,569

 

Cash flows from financing activities

 

 

 

 

 

 

Payments on royalty sale liability, net of imputed interest

 

 

(7,167

)

 

 

 

Payments for settlement of share-based awards

 

 

(183

)

 

 

(825

)

Proceeds from the exercise of stock options

 

 

 

 

 

1,126

 

Net cash provided by (used in) financing activities

 

 

(7,350

)

 

 

301

 

Net decrease in cash, cash equivalents and restricted cash

 

 

(45,455

)

 

 

(1,771

)

Cash, cash equivalents and restricted cash at beginning of period

 

 

89,356

 

 

 

47,962

 

Cash, cash equivalents and restricted cash at end of period

 

$

43,901

 

 

$

46,191

 

Supplemental disclosure of noncash information:

 

 

 

 

 

 

Purchases of fixed assets included in accounts payable and
   accrued expenses

 

$

479

 

 

$

1,079

 

Operating lease liabilities arising from obtaining right-of-use assets

 

$

 

 

$

799

 

Supplemental disclosure of cash flow information

 

 

 

 

 

 

Cash paid for interest

 

$

3,143

 

 

$

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

7


ENANTA PHARMACEUTICALS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

(amounts in thousands, except per share data)

1. Nature of the Business and Basis of Presentation

Enanta Pharmaceuticals, Inc. (collectively with its subsidiary, the “Company”), incorporated in Delaware in 1995, is a biotechnology company that uses its robust, chemistry-driven approach and drug discovery capabilities to discover and develop small molecule drugs with an emphasis on virology and immunology indications. The Company discovered glecaprevir, the second of two protease inhibitors discovered and developed through its collaboration with AbbVie for the treatment of chronic infection with hepatitis C virus (“HCV”). Glecaprevir is co-formulated as part of AbbVie’s leading direct-acting antiviral (“DAA”) combination treatment for HCV, which is marketed under the tradenames MAVYRET® (U.S.) and MAVIRET®(ex-U.S.) (glecaprevir/pibrentasvir). Royalties from the Company’s AbbVie collaboration and its existing financial resources provide funding to support the Company’s wholly-owned research and development programs, which are primarily focused on the following disease targets: respiratory syncytial virus (“RSV”), SARS-CoV-2, hepatitis B virus (“HBV”) and Chronic Spontaneous Urticaria (“CSU”).

The Company is subject to many of the risks common to companies in the biotechnology industry, including but not limited to, the uncertainties of research and development, competition from technological innovations of others, dependence on collaborative arrangements, protection of proprietary technology, dependence on key personnel and compliance with government regulation. Product candidates currently under development will require significant additional research and development efforts, including extensive preclinical and clinical testing and regulatory approvals, prior to commercialization. These efforts require significant amounts of capital, adequate personnel and infrastructure, and extensive compliance reporting capabilities.

Unaudited Interim Financial Information

The condensed consolidated balance sheet as of September 30, 2023 was derived from audited financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America (“GAAP”). The accompanying unaudited condensed consolidated financial statements as of December 31, 2023 and for the three months ended December 31, 2023 and 2022 have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial statements. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. These condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2023.

In the opinion of management, all adjustments, consisting of normal recurring adjustments necessary for a fair statement of the Company’s financial position as of December 31, 2023 and results of operations for the three months ended December 31, 2023 and 2022 and cash flows for the three months ended December 31, 2023 and 2022 have been made. The results of operations for the three months ended December 31, 2023 are not necessarily indicative of the results of operations that may be expected for subsequent quarters or the year ending September 30, 2024.

The accompanying condensed consolidated financial statements have been prepared in conformity with GAAP. All amounts in the condensed consolidated financial statements and in the notes to the condensed consolidated financial statements, except per share amounts, are in thousands unless otherwise indicated.

The accompanying condensed consolidated financial statements have been prepared based on continuity of operations, realization of assets and the satisfaction of liabilities and commitments in the ordinary course of business. The Company began reporting a net loss in fiscal 2020 and reported a net loss of $33,407 for the three months ended December 31, 2023 and $133,816 for the year ended September 30, 2023. As of December 31, 2023, the Company had an accumulated deficit of $240,402. The Company expects to continue to generate operating losses for the foreseeable future as the Company continues to advance its wholly-owned programs. As of December 31, 2023, the Company had $337,151 in cash, cash equivalents and short-term marketable securities. The Company expects that its cash, cash equivalents and short-term marketable securities will be sufficient to fund its operating expenses and capital expenditure requirements for at least 12 months from the issuance date of the interim condensed consolidated financial statements. The Company may seek additional funding through equity offerings, non-dilutive financings, collaborations, strategic alliances or licensing agreements. The Company may not be able to obtain sufficient financing on acceptable terms, or at all, and the Company may not be able to enter into collaborations or other arrangements. The terms of any financing may adversely affect the holdings or the rights of the Company’s stockholders. If the Company is unable to obtain funding, the Company could be forced to delay, reduce or eliminate some or all of its research and development programs, product expansion or commercialization efforts, or the Company may be unable to continue operations.

8


2. Summary of Significant Accounting Policies

For the Company’s Significant Accounting Policies, please refer to its Annual Report on Form 10-K for the fiscal year ended September 30, 2023. Any reference in these notes to applicable guidance is meant to refer to the authoritative GAAP as found in the Accounting Standards Codification and Accounting Standards Update (“ASU”) of the Financial Accounting Standards Board (“FASB”).

Use of Estimates

The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Significant estimates and assumptions reflected in these condensed consolidated financial statements include, but are not limited to, management’s judgments with respect to its revenue arrangements; liability related to the sale of future royalties; valuation of stock-based awards and the accrual of research and development expenses. Estimates are periodically reviewed in light of changes in circumstances, facts and experience.

Net Loss per Share

Basic net loss per common share is computed by dividing the net loss by the weighted average number of shares of common stock outstanding for the period. In periods in which the Company has reported a net loss, diluted net loss per common share is the same as basic net loss per common share since dilutive common shares are not assumed to have been issued if their effect is anti-dilutive. Therefore, the Company excluded the following potential common shares, presented based on amounts outstanding at each period end, from the computation of diluted net loss as its effect would have been anti-dilutive:


 

 

 

As of December 31,

 

 

 

2023

 

 

2022

 

 

 

(in thousands)

 

Options to purchase common stock

 

 

5,213

 

 

 

4,511

 

Unvested rTSRUs

 

 

129

 

 

 

151

 

Unvested PSUs

 

 

129

 

 

 

151

 

Unvested restricted stock units

 

 

455

 

 

 

439

 

Recently Issued Accounting Pronouncements

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which requires public entities to disclose information about their reportable segments’ significant expenses and other segment items on an interim and annual basis. Public entities with a single reportable segment are required to apply the disclosure requirements in ASU 2023-07, as well as all existing segment disclosures and reconciliation requirements in ASC 280 on an interim and annual basis. This amendment is effective for the Company in the fiscal year beginning October 1, 2024, with early adoption permitted. The Company is currently evaluating the potential impact that ASU 2023-07 may have on its financial statement disclosures.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires public entities, on an annual basis, to provide disclosure of specific categories in the rate reconciliation, as well as disclosure of income taxes paid disaggregated by jurisdiction. ASU 2023-09 is effective for the Company in the fiscal year beginning October 1, 2025, with early adoption permitted. The Company is currently evaluating the potential impact that ASU 2023-09 may have on its financial statement disclosures.

9


3. Fair Value of Financial Assets and Liabilities

The following tables present information about the Company’s financial assets and liabilities that were subject to fair value measurement on a recurring basis as of December 31, 2023 and September 30, 2023, and indicate the fair value hierarchy of the valuation inputs utilized to determine such fair value:

 

 

Fair Value Measurements as of December 31, 2023 Using:

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

 

 

(in thousands)

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents:

 

 

 

 

 

 

 

 

 

 

 

 

Money market funds

 

$

38,905

 

 

$

 

 

$

 

 

$

38,905

 

Marketable securities:

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury notes

 

 

264,537

 

 

 

 

 

 

 

 

 

264,537

 

Corporate bonds

 

 

 

 

 

26,706

 

 

 

 

 

 

26,706

 

Commercial paper

 

 

 

 

 

5,975

 

 

 

 

 

 

5,975

 

 

$

303,442

 

 

$

32,681

 

 

$

 

 

$

336,123

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Series 1 nonconvertible preferred stock

 

$

 

 

$

 

 

$

1,423

 

 

$

1,423

 

 

$

 

 

$

 

 

$

1,423

 

 

$

1,423

 

 

 

 

Fair Value Measurements as of September 30, 2023 Using:

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

 

 

(in thousands)

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents:

 

 

 

 

 

 

 

 

 

 

 

 

Money market funds

 

$

55,357

 

 

$

 

 

$

 

 

$

55,357

 

U.S. Treasury notes

 

 

29,755

 

 

 

 

 

 

 

 

 

29,755

 

Marketable securities:

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury notes

 

 

236,782

 

 

 

 

 

 

 

 

 

236,782

 

Corporate bonds

 

 

 

 

 

26,435

 

 

 

 

 

 

26,435

 

Commercial paper

 

 

 

 

 

21,305

 

 

 

 

 

 

21,305

 

 

$

321,894

 

 

$

47,740

 

 

$

 

 

$

369,634

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Series 1 nonconvertible preferred stock

 

$

 

 

$

 

 

$

1,423

 

 

$

1,423

 

 

 

$

 

 

$

 

 

$

1,423

 

 

$

1,423

 

During the three months ended December 31, 2023 and 2022, there were no transfers between Level 1, Level 2 and Level 3.

The fair value of Level 2 instruments classified as marketable securities were determined through third-party pricing services. The pricing services use many observable market inputs to determine value, including reportable trades, benchmark yields, credit spreads, broker/dealer quotes, bids, offers, and current spot rates.

The outstanding shares of Series 1 nonconvertible preferred stock as of December 31, 2023 and September 30, 2023 are measured at fair value. These outstanding shares are financial instruments that might require a transfer of assets because of the liquidation features in the contract and are therefore recorded as liabilities and measured at fair value. The fair value of the outstanding shares is based on significant inputs not observable in the market, which represent a Level 3 measurement within the fair value hierarchy. The Company utilizes a probability-weighted valuation model which takes into consideration various outcomes that may require the Company to transfer assets upon liquidation. Changes in the fair values of the Series 1 nonconvertible preferred stock are recognized in other income (expense) in the condensed consolidated statements of operations.

The recurring Level 3 fair value measurements of the Company’s outstanding Series 1 nonconvertible preferred stock using probability-weighted discounted cash flow include the following significant unobservable inputs:

 

 

 

Range

 

 

 

December 31,

 

September 30,

 

Unobservable Input

 

2023

 

2023

 

Probabilities of payout

 

0%-65%

 

0%-65%

 

Discount rate

 

7.25%

 

7.25%

 

 

10


 

There were no changes in the fair value of nonconvertible preferred stock during the three months ended December 31, 2023 and 2022.

In April 2023, the Company entered into a royalty sale agreement with an affiliate of OMERS, pursuant to which the Company was paid a $200,000 cash purchase price in exchange for 54.5% of future quarterly royalty payments on net sales of MAVYRET/MAVIRET, after June 30, 2023, through June 30, 2032, subject to a cap on aggregate payments equal to 1.42 times the purchase price. The Company accounted for the upfront payment as a liability related to the sale of future royalties. The carrying value of the liability related to the sale of future royalties approximates fair value as of December 31, 2023 and is based on current estimates of future royalties expected to be paid to OMERS over the next 10 years, which are considered Level 3 inputs. See Note 7 for a rollforward of the liability.

4. Marketable Securities

As of December 31, 2023 and September 30, 2023, the fair value of available-for-sale marketable securities, by type of security, was as follows:

 

 

December 31, 2023

 

 

 

Amortized
Cost

 

 

Gross
Unrealized
Gains

 

 

Gross
Unrealized
Losses

 

 

Credit Losses

 

 

Fair Value

 

 

 

(in thousands)

 

Corporate bonds

 

$

27,043

 

 

$

 

 

$

(337

)

 

$

 

 

$

26,706

 

Commercial paper

 

 

5,975

 

 

 

 

 

 

 

 

 

 

 

 

5,975

 

U.S. Treasury notes

 

 

264,350

 

 

 

207

 

 

 

(20

)

 

 

 

 

 

264,537

 

 

 

$

297,368

 

 

$

207

 

 

$

(357

)

 

$

 

 

$

297,218

 

 

 

 

September 30, 2023

 

 

 

Amortized
Cost

 

 

Gross
Unrealized
Gains

 

 

Gross
Unrealized
Losses

 

 

Credit Losses

 

 

Fair Value

 

 

 

(in thousands)

 

Corporate bonds

 

$

27,127

 

 

$

 

 

$

(692

)

 

$

 

 

$

26,435

 

Commercial paper

 

 

21,305

 

 

 

 

 

 

 

 

 

 

 

 

21,305

 

U.S. Treasury notes

 

 

236,880

 

 

 

12

 

 

 

(110

)

 

 

 

 

 

236,782

 

 

 

$

285,312

 

 

$

12

 

 

$

(802

)

 

$

 

 

$

284,522

 

 

As of December 31, 2023 and September 30, 2023, marketable securities consisted of investments that mature within one year.

5. Accrued Expenses

Accrued expenses and other current liabilities consisted of the following as of December 31, 2023 and September 30, 2023:

 

 

December 31,

 

 

September 30,

 

 

 

2023

 

 

2023

 

 

 

(in thousands)

 

Accrued pharmaceutical drug manufacturing

 

$

1,099

 

 

$

3,083

 

Accrued research and development expenses

 

 

3,707

 

 

 

6,120

 

Accrued payroll and related expenses

 

 

4,310

 

 

 

7,037

 

Accrued other

 

 

2,487

 

 

 

2,099

 

 

 

$

11,603

 

 

$

18,339

 

 

11


6. AbbVie Collaboration

The Company has a Collaborative Development and License Agreement (as amended, the “AbbVie Agreement”), with AbbVie to identify, develop and commercialize HCV NS3 and NS3/4A protease inhibitor compounds, including paritaprevir and glecaprevir, under which the Company has received license payments, proceeds from a sale of preferred stock, research funding payments, milestone payments and royalties totaling approximately $1,296,000 through December 31, 2023. Since the Company satisfied all of its performance obligations under the AbbVie Agreement by the end of fiscal 2011, all milestone payments received since then have been recognized as revenue when the milestones were achieved by AbbVie.

The Company is receiving annually tiered royalties per Company protease product ranging from ten percent up to twenty percent, or on a blended basis from ten percent up to the high teens, on the portion of AbbVie’s calendar year net sales of each HCV regimen that is allocated to the protease inhibitor in the regimen. Beginning with each January 1, the cumulative net sales of a given royalty-bearing protease inhibitor product start at zero for purposes of calculating the tiered royalties on a product-by-product basis.

7. Liability Related to the Sale of Future Royalties

In April 2023, the Company entered into a royalty sale agreement with an affiliate of OMERS, pursuant to which the Company was paid a $200,000 cash purchase price in exchange for 54.5% of future quarterly royalty payments on net sales of MAVYRET/MAVIRET, after June 30, 2023, through June 30, 2032, subject to a cap on aggregate payments equal to 1.42 times the purchase price.

Because the royalty sale agreement will be paid back to OMERS up to a capped amount as well as the Company’s significant continuing involvement in the generation of future cash flows under its AbbVie Agreement, the Company recorded the proceeds from the transaction as a liability on its condensed consolidated balance sheets which will be amortized as interest expense in the condensed consolidated statements of operations under the effective interest rate method over the life of the royalty sale agreement. The Company will continue to record the full amount of royalties earned on MAVYRET/MAVIRET sales as royalty revenue in the condensed consolidated statements of operations.

The Company’s liability related to the sale of future royalties is estimated based on forecasted worldwide MAVYRET/MAVYRET royalties to be paid to OMERS over the course of the royalty sale agreement. This estimate requires significant judgment, including the amount and timing of royalty payments up until the end of the royalty sale agreement, which is estimated to be the stated term of June 30, 2032. As royalties are earned by OMERS, the liability is reduced on the Company’s condensed consolidated balance sheets.

At December 31, 2023, the estimated future cash flows resulted in an effective annual imputed interest rate of approximately 7.05%.

The following table summarizes the activity of the liability related to the sale of future royalties:

 

 

Liability related to the sale of future royalties

 

 

 

(in thousands)

 

Balance - September 30, 2023

 

$

194,505

 

Royalty payable to purchaser

 

 

(9,822

)

Interest expense

 

 

3,441

 

Balance - December 31, 2023

 

$

188,124

 

 

8. Series 1 Nonconvertible Preferred Stock

As of December 31, 2023, 1,930 shares of Series 1 nonconvertible preferred stock were issued and outstanding. The outstanding shares are financial instruments that might require a transfer of assets because of the liquidation features in the contract and are carried at fair value as a liability on the Company’s condensed consolidated balance sheets.

9. Stock-Based Awards

The Company grants stock-based awards, including stock options, restricted stock units and other unit awards under its 2019 Equity Incentive Plan (the “2019 Plan”), which was approved by its stockholders on February 28, 2019 and amended in March 2021, March 2022 and March 2023. The Company also has outstanding stock option awards under its 2012 Equity Incentive Plan (the “2012 Plan”) but is no longer granting awards under this plan.

 

12


The following table summarizes stock option activity, including performance-based options, for the year-to-date period ending December 31, 2023:

 

 

Shares
Issuable
Under
Options

 

 

Weighted
Average
Exercise
Price

 

 

Weighted
Average
Remaining
Contractual
Term

 

 

Aggregate
Intrinsic
Value

 

 

 

(in thousands)

 

 

 

 

 

(in years)

 

 

(in thousands)

 

Outstanding as of September 30, 2023

 

 

4,365

 

 

$

52.68

 

 

 

5.9

 

 

$

 

Granted

 

 

1,092

 

 

 

8.99

 

 

 

 

 

 

 

Exercised

 

 

 

 

 

 

 

 

 

 

 

 

Forfeited

 

 

(244

)

 

 

38.99

 

 

 

 

 

 

 

Outstanding as of December 31, 2023

 

 

5,213

 

 

$

44.17

 

 

 

6.7

 

 

$

459

 

Options vested and expected to vest as of
   December 31, 2023

 

 

5,213

 

 

$

44.17

 

 

 

6.7

 

 

$

459

 

Options exercisable as of December 31, 2023

 

 

3,028

 

 

$

53.37

 

 

 

5.1

 

 

$

 

Market and Performance-Based Stock Unit Awards

The Company awards both performance share units, or PSUs, and relative total stockholder return units, or rTSRUs, to its executive officers. The number of units granted represents the target number of shares of common stock that may be earned; however, the actual number of shares that may be earned ranges from 0% to 150% of the target number. The number of shares cancelled represents the target number of shares, less any shares that vested. The following table summarizes PSU and rTSRU activity for the year-to-date period ending December 31, 2023:

 

 

PSUs

 

 

rTSRUs

 

 

 

Shares

 

 

Weighted
Average
Grant Date Fair
Value

 

 

Shares

 

 

Weighted
Average
Grant Date Fair
Value

 

 

 

(in thousands)

 

 

 

 

 

(in thousands)

 

 

 

 

Unvested as of September 30, 2023

 

 

81

 

 

$

58.58

 

 

 

81

 

 

$

45.82

 

Granted

 

 

48

 

 

 

9.21

 

 

 

48

 

 

 

9.89

 

Vested

 

 

 

 

 

 

 

 

 

 

 

 

Unvested as of December 31, 2023

 

 

129

 

 

$

40.23

 

 

 

129

 

 

$

32.47

 

Restricted Stock Units

The following table summarizes the restricted stock unit activity for the year-to-date period ending December 31, 2023:

 

 

Restricted Stock
Units

 

 

Weighted
Average Grant
Date Fair
Value

 

 

 

(in thousands)

 

 

 

 

Unvested as of September 30, 2023

 

 

411

 

 

$

51.78

 

Granted

 

 

162

 

 

 

8.99

 

Vested

 

 

(116

)

 

 

52.00

 

Cancelled

 

 

(2

)

 

 

54.27

 

Unvested as of December 31, 2023

 

 

455

 

 

$

36.45

 

 

Stock-Based Compensation Expense

During the three months ended December 31, 2023 and 2022 the Company recognized the following stock-based compensation expense:

 

 

 

 

 

 

Three Months Ended December 31,

 

 

 

2023

 

 

2022

 

 

 

(in thousands)

 

Research and development

 

$

2,055

 

 

$

2,532

 

General and administrative

 

 

6,044

 

 

 

4,607

 

 

$

8,099

 

 

$

7,139

 

 

13


 

 

 

 

 

 

 

Three Months Ended December 31,

 

 

 

2023

 

 

2022

 

 

 

(in thousands)

 

Stock options

 

$

4,462

 

 

$

5,046

 

rTSRUs

 

 

445

 

 

 

461

 

Performance stock units

 

 

1,579

 

 

 

367

 

Restricted stock units

 

 

1,613

 

 

 

1,265

 

 

$

8,099

 

 

$

7,139

 

 

During the three months ended December 31, 2023 and 2022, the Company recognized stock-based compensation expense for performance-based stock units for which vesting became probable upon achievement of performance-based targets that occurred during the performance period.

As of December 31, 2023, the Company had an aggregate of $60,806 of unrecognized stock-based compensation cost, which is expected to be recognized over a weighted average period of 2.2 years.

10. Income Taxes

For the three months ended December 31, 2023, the Company recorded an income tax benefit of $622 due to interest recorded on a pending federal income tax refund. For the three months ended December 31, 2022, the Company recorded an income tax benefit of $34 due to the release of a state tax reserve during the period.

11. Commitments and Contingencies

Litigation and Contingencies Related to Use of Intellectual Property

From time to time, the Company may become subject to legal proceedings, claims and litigation arising in the ordinary course of business. Except as described below, the Company currently is not a party to any material threatened or pending litigation. However, third parties might allege that the Company or its collaborators are infringing their patent rights or that the Company is otherwise violating their intellectual property rights. Such third parties may resort to litigation against the Company or its collaborators, which the Company has agreed to indemnify. With respect to some of these patents, the Company expects that it will be required to obtain licenses and could be required to pay license fees or royalties, or both. These licenses may not be available on acceptable terms, or at all. A costly license, or inability to obtain a necessary license, would have a material adverse effect on the Company’s financial condition, results of operations or cash flows. The Company accrues contingent liabilities when it is probable that future expenditures will be made and such expenditures can be reasonably estimated.

In June 2022, the Company announced that it filed suit in the United States District Court for the District of Massachusetts on June 21, 2022, against Pfizer, Inc. seeking damages for infringement of U.S. Patent No. 11,358,953 (the ’953 Patent) in the manufacture, use and sale of Pfizer’s COVID-19 antiviral, Paxlovid (nirmatrelvir tablets; ritonavir tablets). The United States Patent and Trademark Office awarded the '953 Patent to the Company in June 2022 based on the Company's July 2020 patent application describing coronavirus protease inhibitors invented by the Company. The Company is seeking fair compensation for Pfizer’s use of a coronavirus protease inhibitor claimed in the ‘953 patent. The Company records all legal expenses associated with the patent infringement suit as incurred in the condensed consolidated statements of operations.

Indemnification Agreements

In the ordinary course of business, the Company may provide indemnifications of varying scope and terms to customers, vendors, lessors, business partners, and other parties with respect to certain matters including, but not limited to, losses arising out of breach of such agreements or from services to be provided to the Company, or from intellectual property infringement claims made by third parties. In addition, the Company has entered into indemnification agreements with members of its board of directors and its executive officers that will require the Company, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors or officers. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is, in many cases, unlimited. To date, the Company has not incurred any material costs as a result of such indemnifications. In addition, the Company maintains directors’ and officers’ insurance coverage. The Company does not believe that the outcome of any claims under indemnification arrangements will have a material effect on its financial position, results of operations or cash flows, and has not accrued any liabilities related to such obligations in its condensed consolidated financial statements as of December 31, 2023.

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Leases

The Company leases laboratory and office space under various non-cancelable operating leases. There have been no material changes to the Company’s leases during the three months ended December 31, 2023. For additional information, please read Note 12, Leases, to the consolidated financial statements in the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 2023.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the unaudited condensed consolidated financial statements and notes thereto included elsewhere in this Quarterly Report on Form 10-Q, or Form 10-Q, and the audited consolidated financial statements and notes thereto for our fiscal year ended September 30, 2023 included in our Annual Report on Form 10-K for that fiscal year, which is referred to as our 2023 Form 10-K. Please refer to our note regarding forward-looking statements on page 2 of this Form 10-Q, which is incorporated herein by this reference.

The Enanta name and logo are our trademarks. This Form 10-Q also includes trademarks, trade names and service marks of other persons. All other trademarks, trade names and service marks appearing in this Form 10-Q are the property of their respective owners.

Overview

We are a biotechnology company that uses our robust, chemistry-driven approach and drug discovery capabilities to discover and develop small molecule drugs with an emphasis on virology and immunology indications. We discovered glecaprevir, the second of two protease inhibitors discovered and developed through our collaboration with AbbVie for the treatment of chronic infection with hepatitis C virus, or HCV. Glecaprevir is co-formulated as part of AbbVie’s leading brand of direct-acting antiviral, or DAA, combination treatment for HCV, which is marketed under the tradenames MAVYRET® (U.S.) and MAVIRET® (ex-U.S.) (glecaprevir/pibrentasvir). The ongoing royalties from our AbbVie collaboration, combined with the proceeds from our April 2023 royalty sale transaction, have provided us funding to support our wholly-owned research and development programs primarily focused on the following disease targets:

Virology:

Respiratory syncytial virus, or RSV, the most common cause of bronchiolitis and pneumonia in young children and a significant cause of respiratory illness in older adults, with estimates suggesting that on average each year RSV leads to 3 million hospitalizations globally in children under 5 years old and 177,000 hospitalizations in the U.S. in adults over the age of 65;
SARS-CoV-2, the virus that causes COVID-19, with estimates suggesting that COVID-19 continues to have a disease burden greater than influenza, including persistent cases of infection often referred to as long COVID and hospitalization and death among the elderly and those with comorbidities, while new variants continue to emerge on a regular basis; and
Hepatitis B virus, or HBV, the most prevalent chronic hepatitis, which is estimated by the World Health Organization to affect close to 300 million individuals worldwide.

Immunology:

Chronic spontaneous urticaria (CSU) is a severely debilitating, chronic inflammatory skin disease with no identified triggers. Clinical manifestations include hives, angioedema, or both. Patients with CSU also experience symptoms beyond the skin manifestations, including sleep disturbances, fatigue, irritability, anxiety and depression. The estimated global prevalence is between 0.5% – 1% of the population, which means that at any given time in the U.S. alone approximately 1.75-3.5 million people are experiencing this condition. Standard of care treatment for CSU is antihistamines, however in approximately half the patients, symptom alleviation is not adequate. There is a substantial unmet need for an efficacious oral agent as only a minority of these uncontrolled cases are treated with one indicated biologic (<28%).

As of December 31, 2023, we had $337.2 million in cash, cash equivalents and short-term marketable securities. We expect that our existing cash, cash equivalents, short-term marketable securities and our retained portion of future HCV royalties, will enable us to fund our operating expenses and capital expenditure requirements through fiscal 2027.

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Our Wholly-Owned Programs

Our primary wholly-owned research and development programs are in virology and immunology. Our virology programs have been focused on RSV, SARS-CoV-2 and HBV and our immunology program is focused on oral inhibitors of the receptor tyrosine kinase known as KIT for the treatment of CSU, and potentially other mast-cell-driven diseases.

Virology Programs:

RSV: We have two clinical stage programs for RSV – zelicapavir (formerly EDP-938) and EDP-323. Both of these compounds are replication inhibitors that work by shutting down replication and the production of new virions, as opposed to the other mechanism in development of fusion inhibition that only blocks viral entry. Zelicapivir, which has Fast Track designation from the U.S. Food and Drug Administration, or FDA, is a potent inhibitor of the RSV N-protein being studied in two ongoing Phase 2 studies, each in a different patient population. EDP-323, which also has a Fast Track designation from the FDA is an inhibitor of the RSV L-protein that is currently in a Phase 2 challenge study.

 

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Zelicapavir - N-protein Inhibitor Candidate: We have studied zelicapavir in two Phase 2 studies that were designed to be proof-of-concept and exploratory studies to understand the viral response in the context of RSV infection. With these studies, zelicapavir has demonstrated a favorable safety profile, consistent with that observed in over 500 subjects exposed to zelicapavir to date. These studies were conducted in otherwise healthy adults (not at high-risk for serious outcomes with RSV) infected with RSV. The first study was a challenge study, in which healthy adults were infected with RSV in a clinical setting and statistically significant effects on viral load and symptoms were observed. The second study, known as RSVP, was in an otherwise healthy adult outpatient population with community-acquired RSV infection and showed that this population resolves quickly from infection and is not in need of treatment. We believe that zelicapavir has the greatest potential to show optimal efficacy in high-risk populations since these patients have reduced RSV immunity, which manifests in a higher and longer duration of viral load and greater disease severity, allowing a bigger window to realize the full potential of zelicapavir. Based on the growing safety profile of zelicapavir, we are continuing to evaluate zelicapavir in high-risk populations in the following ongoing clinical studies, including pediatric patients and high-risk adults, all of which have significant unmet need:
RSVPEDs: RSVPEDs is a Phase 2 study in pediatric patients. This dose-ranging, randomized, double-blind, placebo-controlled study, is evaluating multiple ascending doses for five days in two age cohorts to determine safety, tolerability, and pharmacokinetics, as well as a second part evaluating antiviral activity at the selected dose.
RSVHR: RSVHR is a Phase 2b study in high-risk adults, including those who are older than 65 years of age and those who have asthma, chronic obstructive pulmonary disease, or COPD, or congestive heart failure. Approximately 180 patients will be treated with zelicapavir or placebo for five days with a primary endpoint of time to resolution of RSV lower respiratory tract disease symptoms.
Next steps: We anticipate completing enrollment in the RSVPEDs study and report data in the third quarter of calendar 2024, assuming the normal RSV season in the Northern Hemisphere continues.
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EDP-323 - L-protein Inhibitor Candidate: Our second clinical RSV candidate, EDP-323, is a novel oral, direct-acting antiviral selectively targeting the RSV L-protein, a viral RNA-dependent RNA polymerase enzyme that contains multiple enzymatic activities required for RSV replication. EDP-323 has sub-nanomolar potency against RSV-A and RSV-B in vitro and protected mice in a dose-dependent manner from RSV infection as demonstrated by both virological and pathological endpoints. EDP-323 is not expected to have cross-resistance to other classes of inhibitors and has the potential to be used alone, or in combination with other RSV mechanisms, to broaden the treatment window or addressable patient populations. In June 2023, we completed a Phase 1 clinical study and reported positive topline results, which demonstrated that EDP-323 was safe and well-tolerated with pharmacokinetics supportive of once-daily dosing with target exposures achieved and no food effect. Based on these positive data, we initiated a Phase 2 challenge study of EDP-323 in the fourth quarter of calendar 2023 and anticipate topline data in the third quarter of calendar 2024.
COVID-19: We have leveraged our expertise in developing protease inhibitors to discover compounds specifically designed to target the SARS-CoV-2 virus and potentially other coronaviruses.
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EDP-235 - Protease Inhibitor Candidate: EDP-235 is an oral inhibitor of the coronavirus 3CL protease, also referred to as 3CLpro or the main coronavirus protease, or Mpro, which has been granted Fast Track designation by the FDA. In addition to nanomolar activity against all SARS-CoV-2 variants tested to date, EDP-235 has potent antiviral activity against other human coronaviruses, enabling the potential for a pan-coronavirus treatment, including possibly coronaviruses that may infect human populations in the future. Furthermore,

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EDP-235 has good tissue distribution, and is projected to have four times higher drug levels in lung tissue compared to plasma. A robust treatment effect and prevention of transmission was observed in a ferret model.
Phase 1 Study: In July 2022, we completed a Phase 1 study and reported positive topline results which demonstrated EDP-235 was generally safe and well-tolerated in doses up to 400 mg for seven days and adverse events were infrequent and mild. Pharmacokinetics were supportive of once-daily dosing without ritonavir and without regard to food and achieved target exposure levels of up to 13-fold over the plasma protein-adjusted EC90.
Phase 2 Study: In May 2023, we reported topline results from SPRINT (SARS-CoV-2 Protease Inhibitor Treatment), a Phase 2 clinical trial of EDP-235. This randomized, double-blind, placebo-controlled study evaluated the safety, tolerability, antiviral activity and affect on clinical symptoms of EDP-235 compared to placebo in approximately 230 non-hospitalized, symptomatic patients with mild to moderate COVID-19 who were not at increased risk for developing severe disease. Patients received either 200 mg or 400 mg EDP-235 or placebo orally once daily for five days. EDP-235 met the primary endpoint of the trial and was generally safe and well-tolerated. A dose-dependent improvement in total symptom score was observed with EDP-235 treatment compared to placebo, which achieved statistical significance (p<0.05) in the 400 mg tre