Enanta Pharmaceuticals Q3 2023 Earnings Results & Report

Enanta Pharmaceuticals EPS Results

• Actual EPS: -$1.86
• Consensus EPS: -$2.38
• Beat/Miss: Beat by +$0.52
• One Year Ago EPS: N/A
• EPS Beat Rate: 6 of last 8 quarters

Enanta Pharmaceuticals Revenue Results

• Actual Revenue: $18.89 million
• Expected Revenue: $15.88 million
• Beat/Miss: Beat by +$3.01 million
• YoY Revenue Growth: N/A

Enanta Pharmaceuticals (NASDAQ:ENTA) is a clinical-stage biotechnology company focused on discovering and developing small-molecule therapies for viral infections and other diseases. The company’s research has primarily centered on treatments for hepatitis B virus (HBV), respiratory syncytial virus (RSV), and other serious infectious diseases.

Enanta’s most notable commercial contribution is its discovery of glecaprevir, an active component of the hepatitis C treatment Mavyret, also marketed as Maviret outside the United States. The therapy was developed and commercialized in collaboration with AbbVie. Enanta also discovered paritaprevir, which was included in earlier AbbVie hepatitis C treatment regimens. These partnerships have enabled Enanta’s medicines to reach patients in markets around the world.

The company continues to advance an internal pipeline of antiviral candidates, including investigational treatments targeting RSV and chronic hepatitis B. Enanta is headquartered in Watertown, Massachusetts, and its products and development programs are supported through collaborations and licensing relationships. Jay R. Luly has served as the company’s president and chief executive officer.

Enanta Pharmaceuticals Q3 2023 Earnings Call Transcript

Key Takeaways

• EDP-323, the company’s once-daily oral RSV L protein inhibitor, was well tolerated in Phase 1 with up to 44-fold EC90 multiples and no serious adverse events, and is entering a human challenge trial in early Q4 with results expected in Q2 2024.
• Three Phase 2 studies of EDP-938, the only clinical‐stage RSV N protein inhibitor, are actively enrolling pediatric, high‐risk adult, and hematopoietic transplant cohorts across both hemispheres, with data anticipated in fiscal 2024 pending a normal RSV season.
• EDP-235, the oral coronavirus 3CL protease inhibitor, showed a statistically significant symptom improvement by day 1 at 400 mg and a 0.8–1.0 log viral load reduction in nucleocapsid-negative patients in the Phase 2 SPRINT trial; Enanta is now seeking a Phase 3 partner and regulatory feedback.
• The dual hMPV/RSV small-molecule program demonstrated nanomolar activity across multiple genotypes in preclinical studies, with a clinical candidate selection planned for Q4 2023 to create a broad-spectrum respiratory antiviral.
• Following a $200 million upfront sale of 54.5% of MAVYRD royalties from AbbVie, Enanta has ~$393 million cash runway, updated FY23 R&D guidance to $165–175 million and G&A to $50–55 million, and expects funding into 2H FY27.

Presentation

[Operator]

Good afternoon, and welcome to Enanta Pharmaceuticals' fiscal third quarter financial results conference call. At this time, all participants are in listen-only mode. There'll be a question and answer session at the end of the prepared remarks. Please be advised that this call is being recorded. I would now like to turn the call over to Jennifer Viera, Investor Relations. Please go ahead.

[Jennifer Viera, Senior Director of IR and Corporate Communications at Enanta Pharmaceuticals]

Thank you, operator, thanks to everyone for joining us this afternoon. The news release with our fiscal third quarter 2023 financial results was issued this afternoon and is available on our website. Making formal remarks on today's call are Dr. Jay Luly, president and chief executive officer, and Paul Mellett, our chief financial officer. Dr. Scott Rottinghaus, our chief medical officer, and Dr. Tara Kieffer, our senior vice president of new product strategy and development, will be available during the Q&A portion of the call. Before we begin with our formal remarks, we want to remind you that we will be making forward-looking statements, which may include our plans and expectations with respect to our research and development pipeline and financial projections, all of which involve certain assumptions and risks beyond our control that could cause our actual developments and results to differ materially from those statements.

[Jennifer Viera, Senior Director of IR and Corporate Communications at Enanta Pharmaceuticals]

A description of these risks is in our most recent Form 10-Q and other periodic reports filed with the SEC. Enanta does not undertake any obligation to update any forward-looking statements made during this call. I'd now like to turn the call over to Dr. Jay Luly, President and CEO. Jay?

[Jay Luly, President and CEO at Enanta Pharmaceuticals]

Thank you, Jennifer, and good afternoon, everyone. At Enanta, we are committed to our mission of being a leader in the development of groundbreaking therapeutics for viral infections. In this quarter, we made important strides to bring us closer to impactful inflection points and ultimately our goals. I'm proud of the work our team has accomplished this quarter and throughout the year so far across our pipeline and business, most notably in our respiratory syncytial virus, or RSV program, and our COVID-19 program. We're in a strong position to continue to advance our pipeline, and I am confident in our team's efforts to progress antiviral small molecule medicines to treat life-threatening viral infections. Today, I'll provide an overview of our progress during the third quarter, beginning with our RSV program. Then I'll comment on our COVID-19 program and the rest of our pipeline.

[Jay Luly, President and CEO at Enanta Pharmaceuticals]

RSV is a severe respiratory infection associated with significant morbidity and mortality that can cause serious disease in children, the elderly, and the immune-compromised. RSV has received a significant amount of attention recently with the approvals of new vaccines and monoclonal antibodies to help prevent severe infection. However, given the experience with COVID and flu vaccines, including limited adoption and breakthrough infections, we believe a safe and effective oral RSV antiviral medication can bring significant value to patients infected with RSV. Starting with our most current update, we recently announced positive data from the phase I trial of EDP-323 in healthy volunteers. As a reminder, EDP-323 is our L-protein inhibitor in development as a once-daily oral treatment for RSV, with Fast Track designation from the FDA.

[Jay Luly, President and CEO at Enanta Pharmaceuticals]

This phase I study enrolled healthy volunteers to evaluate the safety, tolerability, and pharmacokinetics of oral EDP-323 in single ascending doses and multiple ascending doses for seven days, along with the effect of food. The SAD phase enrolled a total of six cohorts, ranging in dose from 50 mg-800 mg, and the MAD phase enrolled four cohorts, with doses ranging from 200 mg-800 mg. EDP-323 was found to be generally safe and well-tolerated up to the highest dose tested of 800 mg over seven days. Most adverse events were mild, and there were no serious or severe adverse events. There was one study discontinuation due to syncope, which was deemed unlikely to be related to EDP-323.

[Jay Luly, President and CEO at Enanta Pharmaceuticals]

EDP-323 exposure increased with increasing single and multiple dosing up to 600 mg, with a half-life ranging from 11-17 hours, supporting once-daily dosing. EDP-323 doses ranging from 200 mg-800 mg once daily resulted in strong EC90 multiples against both RSV A and B strains, and when administered for seven days, were found to result in C24 concentrations at steady state of 11-44 fold over protein-adjusted EC90 of 0.3 nanomolar against both RSV A and B strains. Additionally, no food effect was observed with a high-fat meal, suggesting that EDP-323 can be administered without regard to food. We are pleased with this encouraging safety and pharmacokinetic data.

[Jay Luly, President and CEO at Enanta Pharmaceuticals]

In virology, when a potent antiviral such as EDP-323 achieves high multiples of EC90 safely, it is a very positive signal and an important de-risking step for the program. These data enhance our belief in EDP-323 as a potential therapeutic and give us the confidence to continue to progress the program. We believe EDP-323 could serve as a standalone treatment or be used in combination with other agents, such as EDP-938, to broaden the treatment window or addressable patient population for RSV. We plan to initiate a human RSV challenge study evaluating EDP-323 early in the fourth quarter, we anticipate having results in the second quarter of 2024.

[Jay Luly, President and CEO at Enanta Pharmaceuticals]

Our broad RSV program also includes EDP-938, the only N-protein inhibitor in clinical development, which we are currently evaluating in multiple phase II studies as a potential treatment in high-risk patient populations. These studies include RSV-Peds, a phase II randomized, double-blind, placebo-controlled study in hospitalized and non-hospitalized pediatric RSV patients; RSV-HR, a phase II-B randomized, double-blind, placebo-controlled study in adults with RSV infection who are at high risk of complications, including the elderly and individuals with congestive heart failure, chronic obstructive pulmonary disease, or asthma; and RSVTx, a phase II-B randomized, double-blind, placebo-controlled study in adult hematopoietic cell transplant recipients with RSV and symptoms of upper respiratory tract infection. Enrollment for RSV-Peds, RSV-HR, and RSVTx is ongoing, we're utilizing sites in both the northern and southern hemispheres to optimize our coverage of potential RSV surges.

[Jay Luly, President and CEO at Enanta Pharmaceuticals]

If there is a return to a normal pre-pandemic type of RSV season in the northern hemisphere, we expect to complete enrollment in one or more of these studies in the upcoming northern hemisphere season and to have data in fiscal year 2024. Turning to COVID-19, we announced additional analyses from the phase II SARS-CoV-2 SPRINT study, which built upon our positive top-line results that we announced in May of this year. EDP-235 is our clinical-stage, once-daily, orally dosed inhibitor of coronavirus 3CL protease that was evaluated in SPRINT, a randomized, double-blind, placebo-controlled phase II clinical trial in 231 adults with mild or moderate COVID-19 who did not have risk factors for progression to severe disease. Patients received 200 mg or 400 mg of EDP-235 or placebo orally once daily for five days.

[Jay Luly, President and CEO at Enanta Pharmaceuticals]

In the phase II study, EDP-235 was found to be generally safe and well-tolerated. A statistically significant dose improvement in symptoms was observed in the 400 mg cohort, starting as early as one day following the first dose. In a predefined subset of patients enrolled within three days of symptom onset, a statistically significant dose-dependent improvement in symptoms was observed at all time points, and a two-day shorter time to improvement was observed in a subset of six symptoms in the 400 mg cohort compared to placebo. Additional analyses announced in June demonstrated a virologic effect of EDP-235 in the subset of patients who had not recently been infected, as measured by lack of antibodies to the SARS-CoV-2 nucleocapsid, whom we refer to as nucleocapsid-negative patients.

[Jay Luly, President and CEO at Enanta Pharmaceuticals]

Specifically, in nucleocapsid-negative patients, a 0.8 log decline in viral load was observed at day 5 with 400 mg of EDP-235 compared to placebo, and a one log viral load decline at day 5 in the subset of nucleocapsid-negative patients who were treated within three days after symptom onset. Looking ahead, our current plan is to conduct all future COVID-19 work in the context of a collaboration. In particular, we continue to focus on progressing EDP-235 into phase III trials with a partner and gaining regulatory feedback to further enable a partnership. Moving on to our dual inhibitor research program targeting hMPV and RSV, we plan to select a clinical candidate in the fourth quarter of this year.

[Jay Luly, President and CEO at Enanta Pharmaceuticals]

In preclinical studies, our prototype dual inhibitor potently inhibited both hMPV and RSV replication in a dose-dependent manner, demonstrating a significant reduction in viral load of each virus and maintains nanomolar activity against multiple genotypes and strains of hMPV and RSV in a range of cell types. Our dual inhibitor is a broader-spectrum antiviral that would allow respiratory infections diagnosed as either hMPV or RSV, both of which are significant causes of respiratory tract infections globally, to be treated with a single agent, aiding populations such as children and the elderly, who are at greatest risk. In hepatitis B, we continue to monitor the field for compounds to develop in combination with EDP-514, our potent core inhibitor with FDA Fast Track designation and a nucleoside reverse transcriptase inhibitor.

[Jay Luly, President and CEO at Enanta Pharmaceuticals]

We believe a core inhibitor such as EDP-514 will ultimately be an important component of a successful combination regimen and that can potentially help us address the high level of unmet need in HBV. Finally, looking beyond virology, we are piloting new programs that leverage our core strength in small molecule drug discovery and look forward to sharing more details on these growth areas with you in the coming months. I'd like to wrap up by highlighting our near-term milestones. Again, we are thrilled with the progress of EDP-323 and the positive results from our phase I study, and we plan to advance EDP-323 into a human challenge study early in the fourth quarter. We anticipate having results in the second quarter of 2024.

[Jay Luly, President and CEO at Enanta Pharmaceuticals]

We plan to announce the selection of a dual inhibitor clinical candidate targeting both hMPV and RSV in the fourth quarter of this year. If there is a return to a normal pre-pandemic type of RSV season in the Northern Hemisphere, we expect to complete enrollment in one or more of our phase II studies of EDP-938 in the upcoming Northern Hemisphere season and have data in fiscal year 2024. With that, I'll turn the call over to Paul to discuss our financials. Paul?

[Paul Mellett, CFO at Enanta Pharmaceuticals]

Thank you, Jay. For the quarter, total revenue was $18.9 million and consisted of royalty revenue earned on AbbVie's global MAVYRET net product sales. This compared to total revenue of $19.5 million for the same period in 2022. In April 2023, we sold 54.5% of our ongoing MAVYRET royalties from AbbVie for an upfront payment of $200 million from OMERS, one of Canada's largest defined benefit pension plans. For financial reporting purposes, the transaction will be treated as debt, with the upfront purchase payment of $200 million paid to us being recorded as a liability. Enanta will continue to record 100% of future royalty payments as revenue, and will then amortize the debt liability proportionately as royalties are paid to OMERS until a cap of 1.42 times the purchase payment is met.

[Paul Mellett, CFO at Enanta Pharmaceuticals]

Interest expense will be recorded in our consolidated statement of operations as other expense based on an imputed interest rate. Moving on to our expenses. For the three months ended June 30th, 2023, research and development expense totaled $43 million, compared to $39.1 million for the same period in 2022. General and administrative expense for the quarter was $12.6 million, compared to $12.9 million for the same period in 2022. Enanta recorded income tax expense of $4.2 million for the three months ended June 30th, 2023, driven by the receipt of the $200 million from the royalty sale agreement, which is taxable for federal and state purposes.

[Paul Mellett, CFO at Enanta Pharmaceuticals]

Enanta was able to utilize federal net operating loss and research and development tax credit carryforwards, as well as the deduction for foreign-derived intangible income, to substantially offset the taxable effect of the royalty sale agreement. For the three months ended June 30th, 2022, Enanta recorded an income tax benefit of $0.4 million, which was due to the release of a state tax reserve during the period. Net loss for the three months ended June 30th, 2023, was $39.1 million, or a loss of $1.86 per diluted common share, compared to a net loss of $31.7 million, or a loss of $1.53 per diluted common share for the corresponding period in 2022. Enanta ended the quarter with approximately $392.5 million in cash and marketable securities.

[Paul Mellett, CFO at Enanta Pharmaceuticals]

We expect that our current cash, cash equivalents, and short-term and long-term marketable securities, as well as our ongoing royalty revenue, should be sufficient to meet the anticipated cash requirements of our existing business and development programs into the second half of fiscal 2027. Driven by changes to our COVID clinical development plans, we are reducing external spending. To that end, we've updated our guidance for fiscal 2023. We now expect our research and development expense to be between $165 million and $175 million, and our general and administrative expense to be between $50 million and $55 million. Further financial details are available in our press release and will be available in our quarterly report on Form 10-Q when filed. I'd now like to turn the call back to the operator and open the lines up for questions.

[Operator]

Thank you. To ask a question, you'll need to press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster. Our first question will come from Brian Abrahams with RBC Capital Markets. Your line is open.

[Brian Abrahams, Managing Director and Head of Biotechnology Equity Research at RBC Capital Markets]

Hi there. Thanks so much for taking my questions. Just a couple of questions from me. First off, on the RSV program and EDP-323, given the PK data that you and the safety data that you saw with EDP-323 in healthy volunteers, I'm curious if you could maybe elaborate a little bit more on your latest views on the combinability and complementarity between EDP-323 and EDP-938, and then had a follow-up. Thanks.

[Jay Luly, President and CEO at Enanta Pharmaceuticals]

Sure. Thanks, Brian. This is Jay. You know, the EDP-323 and EDP-938, you know, we've studied them pre-clinically to look at their combinability, and pre-clinically, they behave very well together. One's an N-protein inhibitor, that's EDP-938, one's an L-protein inhibitor, that's EDP-323. We don't expect any issues with combinability from, you know, from an interaction standpoint. I think, I think the real question is, is, you know, will we need to combine them, or will we ultimately want to combine them in certain patient populations? Those are the kinds of things that are gonna take a little bit longer to sort out. Number 1, you know, we believe that EDP-938 as a standalone-...

[Jay Luly, President and CEO at Enanta Pharmaceuticals]

you know, could well have all the horsepower we need in garden variety RSV. you know, EDP-323 could also perform very well as a single agent. We'll get more insights into that as we get data from the upcoming human challenge study. I guess the question is, is mightn't you want or need to combine them in a certain, very difficult to treat patient population? That's something that we can certainly explore down the road. Mightn't you want to combine them to see if you could open up a treatment window that would be wider than either agent alone? Again, that's something that we can look at down the line as we're, you know, optimizing the, you know, the category. Those are the, the initial thoughts right now.

[Brian Abrahams, Managing Director and Head of Biotechnology Equity Research at RBC Capital Markets]

Got it. Oh, that makes a lot of sense. Thanks, Jay. Then on the COVID program, can you help us understand the implications of the data you recently reported showing those viral load reductions in the nucleocapsid-negative patients? Should we think about that as potentially speaking to a subpopulation that could, down the line, be uniquely targetable, or, or, or just more as in further evidence, or biological evidence of the mechanism here? I guess, where do you stand in terms of the regulatory path forward? Can you maybe speak to some of the paths you're exploring? Might this still involve an additional phase II work or moving right into phase III, perhaps, exploring Long COVID as well? Thanks.

[Brian Abrahams, Managing Director and Head of Biotechnology Equity Research at RBC Capital Markets]

I'll hop back in the queue.

[Jay Luly, President and CEO at Enanta Pharmaceuticals]

Yeah. The, the patient population that you're referring to, I think is the nucleocapsid-negative patient population. These are people who haven't had a recent COVID infection or haven't had one at all. That's a, sort of a unique antigen that you can look at to determine whether or not someone's, you know, again, had the, the virus somewhat recently. I think one of the, the takeaways that we gleaned from our further analysis of the data is, it's hard to measure viral load changes in the nose of people who have more recently been infected. And when you look at the patient population who hadn't been most recently affected, you could measure, you know, viral load changes in the nose. As time goes on, probably everybody who hasn't been infected is gonna be infected.

[Jay Luly, President and CEO at Enanta Pharmaceuticals]

You know, so variously, that's gonna sort of challenge the ability to, you know, look at that measurement of viral load change in the nose. That doesn't, that doesn't tell you anything close to the whole story, because what really matters is the viral load changes that are happening elsewhere in the body, where sites of infection can, can set up shop in the respiratory tract and in other tissues. We feel that that's the more important thing overall. This is why FDA has not sort of embraced using viral load endpoints as a path to approval, but rather to focus on symptoms and outcomes as it relates to COVID infections. Looking at symptoms where, as you know, in the SPRINT data, we had very nice data set on symptoms.

[Jay Luly, President and CEO at Enanta Pharmaceuticals]

Then ult- ultimately, you know, that endpoint, probably changes to hospitalization and death in certain patient populations that are at high risk. I think that's sort of our takeaway from the data set. As I look forward, it really doesn't change, I think, you know, how you progress a drug through registration studies. Again, that's all gonna be based on symptoms and other kinds of endpoints. With regards to registration, we are in communication with the regulators, and this is not just in the U.S., but elsewhere. You know, really getting the latest thinking on pathways to approval and, and, you know, different kinds of trial designs. Those discussions are in progress.

[Jay Luly, President and CEO at Enanta Pharmaceuticals]

Then, you know, as we said before, you know, any next study is our plan to be conducting that study in the, in the context of a partnership. That's ultimately is our, is our plan, is to identify that phase III and commercialization partner, and do so, you know, hopefully with greater insights from the latest thinkings of the regulators in terms of pathways to approval.

[Brian Abrahams, Managing Director and Head of Biotechnology Equity Research at RBC Capital Markets]

Makes sense. Thanks so much, Jay.

[Jay Luly, President and CEO at Enanta Pharmaceuticals]

You're welcome.

[Operator]

Thank you. Our next question comes from Jay Olson with Oppenheimer. Your line is open.

[Jay Olson, Research Analyst at Oppenheimer]

Oh, hey, thanks for taking the questions. We're curious about the three RSV phase II studies currently enrolling for EDP-938. Can you talk about the enrollment speed, interest level, and which one is gaining the most attention? Then for 2024 updates, do you expect to provide each phase II readout one by one as the results become available, or will you wait until they're all complete and disclose all the results together? If you do choose to read them out sequentially, what would be the read across from one trial to another? Then I had a follow-up, if I could.

[Jay Luly, President and CEO at Enanta Pharmaceuticals]

Sure. Thanks, Jay. This is Jay. We have the three phase IIs for EDP-938, you know, up and running. We've, you know, kind of doubled down on the footprint of trial sites. It's, you know, not a robust RSV season exactly now. We're sort of between seasons, although we're still seeing activity in the Southern Hemisphere. You know, we have sites down in Brazil and Argentina, New Zealand, Australia, South Africa, and then in the Northern Hemisphere, we're, you know, in another 10 countries waiting for the virus to come north. Big footprint, it's hard to know, you know, exactly because they're very different patient populations. Peds is sort of 1 set of circumstances and trial size.

[Jay Luly, President and CEO at Enanta Pharmaceuticals]

The adult high risk is a different one yet, you know, bone marrow transplant recipients are a very different patient population. Each is gonna proceed at its own pace. I think the only thing that I would say is transplant is probably the hardest because you're, again, asking for a few different, you know, not that common things to happen. One is to have a bone marrow transplant, and another is to get RSV in a very careful, locked-down world for bone marrow transplant recipients, where they're extremely cautious. I think, if I were, you know, again, you, you can't truly predict, but I would predict that transplant will be lagging behind the other two. With the other two, again, we've got. We're in 15 countries.

[Jay Luly, President and CEO at Enanta Pharmaceuticals]

In peds, I think we have over 70 sites now active. In the adult transplant, or I'm sorry, in the adult high risk, we've got over 100 sites active. We're just waiting for the virus to come back this fall and hopefully have a really, for the sake of the trials anyway, a really robust sort of standard North American, or Northern Hemisphere, I should say, season. You know, we're throughout Europe, you know, we're in the Middle East, we're in Asia and obviously all across North America. When it comes to reporting out, we're not gonna wait, you know, we're not gonna harvest all 3 at once. We'll read them out as they, as they, as they come.

[Jay Olson, Research Analyst at Oppenheimer]

Okay, great. I guess as you look ahead to the phase III studies for EDP-938, how will the adoption of the RSV vaccine play a role in your phase III strategy?

[Jay Luly, President and CEO at Enanta Pharmaceuticals]

Yeah, sure. Yeah, there's vaccines and monoclonal antibodies. Maybe I'll let Tara Kieffer speak to that one.

[Tara Kieffer, Senior VP of New Product Strategy and Development at Enanta Pharmaceuticals]

Sure. Hi, Jay, this is Tara. In terms of the, you know, the vaccines that have been recently approved in adults, you know, we don't anticipate that having much of an impact. Both GSK and Pfizer have guided toward minimal uptake of their vaccines, at least initially in the first season. You know, just by way of example, GSK has sort of guided to expectations, to be less than what they saw with Shingrix in the first year. That was, you know, say, 7% in the first full year. We don't, we don't expect that to have too much of an impact.

[Jay Olson, Research Analyst at Oppenheimer]

Okay, great. Thank you for taking the questions.

[Jay Luly, President and CEO at Enanta Pharmaceuticals]

You're welcome.

[Operator]

Thank you. One moment for our next question. We have a question from Ed Arce with H.C. Wainwright. Your line is open.

[Ed Arce, Senior Research Analyst at H.C. Wainwright]

Hi, Jay, and hi, Tara. Thanks for taking our questions. Wanted to start with the RSV program, EDP-323, and the recent results from your phase I, including the PK, supportive of once daily. I missed the EC90 multiples that you stated, as well as the nanomolar potency. Then beyond that, I just wanted to ask if you could opine on how we should think about benchmarking those relative to, you know, potential other agents in development, or indeed, how to handicap or handicap the probability of success.

[Jay Luly, President and CEO at Enanta Pharmaceuticals]

Sure.

[Ed Arce, Senior Research Analyst at H.C. Wainwright]

I have a follow-up.

[Jay Luly, President and CEO at Enanta Pharmaceuticals]

Thanks, Ed. This is Jay. The potency of EDP-323, again, this is the L-protein inhibitor, it's extremely potent. It's 0.3 nanomolar, 300 picomolar in terms of an inhibitor. That's good, you know, but it's good but not necessarily sufficient. What you wanna see is obviously good PK and safety. Those were the two other things that we clicked off in the phase I study. We, in the MAD doses, we looked at 200, 400, 600, and 800, so a range of 200-800 milligrams.

[Jay Luly, President and CEO at Enanta Pharmaceuticals]

When we looked at the 24-hour trough time point after a single dose, at the low dose, we saw multiples that were 11x the EC90, at the high dose, we saw multiples that were 44x the EC90. Just whopping, whopping multiples of that very potent EC90, and we were able to do that in a manner that was very safe and well-tolerated. I know, Ed, you've focused on infectious disease for a long time. When you have, you know, an agent where you know the potency it takes to sort of take out the bug, and you can deliver those concentrations or high multiples of those EC90s, safely, with either antibacterials or antivirals, it's usually a very significant de-risking step along the way.

[Jay Luly, President and CEO at Enanta Pharmaceuticals]

I think you know, it bodes well. You know, the next proof in the pudding, I guess, goes to when we get inside that human challenge study, which again, will be starting early next quarter. With that, we'll actually be able to look at antiviral effects, you know, at various at various doses. Stay tuned for that. You know, hopefully, that'll enroll fairly straightforwardly because the human challenge study recall, is in healthy volunteers that we then infect with RSV. It's not a question of seasonality, it's really just a question of bringing in cohort after cohort of healthy volunteers to do your exploration. That'll be the next step where we actually show, hopefully, some very solid antiviral activity.

[Ed Arce, Senior Research Analyst at H.C. Wainwright]

Great. Well, I, I, I agree that the, these, these early readouts do give a lot of confidence in the correlations to actual, you know, patient results. The other question I had, was around the, the COVID program, and I, I believe this is a, a new sort of decision, to look for partnerships, you know, for phase III, once you've completed the ongoing study. I'm wondering if, the, the rapid drop in COVID vaccine demand, as described recently by both Pfizer and Moderna, impact, you know, the potential of that program, either for out-licensing or, or otherwise?

[Jay Luly, President and CEO at Enanta Pharmaceuticals]

Well, a reduction in vaccination, you know, can only lead to an increase in infection where you need an antiviral. You know, we've always believed this to be the case, that ultimately, you know, vaccines would never have 100% efficacy. You know, I, I had five vaccinations and still got COVID. They're never 100% efficacious, and, and compliance is never 100%. We've seen that compliance drop way, way off. Now meanwhile, COVID is, you know, the COVID levels right now are a little, you know, they're pretty, pretty low. Starting to creep up a little bit here in, in Boston as we watch the wastewater every day. It's, they're still pretty low.

[Jay Luly, President and CEO at Enanta Pharmaceuticals]

We'll see what happens in, in the fall as we get closer to the, sort of the, the normal season. I, I think ultimately, you know, we all now believe that the virus is, is not going away. It's gonna go back into, you know, sort of being like a, a nasty flu, and we need drugs for that. I think, you know, it, it's actually not new news, Ed, that our decision on the partnering front.

[Jay Luly, President and CEO at Enanta Pharmaceuticals]

I mean, we made that, I-- You know, I think it's pretty clear last last quarter that, and even before that, we've telegraphed for, you know, really since the beginning of the pandemic, that our ultimate aim is to to find that commercial partner that would really handle the late-stage work and give us a global footprint that we couldn't possibly achieve as well alone, were we to do it. That's that's still our plan. We'll see what happens to the the virus starting the fall.

[Ed Arce, Senior Research Analyst at H.C. Wainwright]

Appreciate your comments, Jay. Thank you.

[Jay Luly, President and CEO at Enanta Pharmaceuticals]

You're welcome.

[Jay Olson, Research Analyst at Oppenheimer]

Thank you.

[Operator]

Our next question comes from Eric Joseph with JPMorgan. Your line is open.

[Eric Joseph, VP and Senior Analyst at JPMorgan]

Thanks for taking the question. Just actually sticking with the point about benchmarking for EDP-323, I guess, what type of data read out from the human challenge study would kind of give you an indication if the molecule is, you know, differentiated perhaps from EDP-938? Would you perhaps be including EDP-938 as an active comparator in the trial? Maybe just more generally, with respect to the trial design, are there any key differences in the design of this upcoming human challenge study compared to that conducted in 2019 for EDP-938? Thank you.

[Jay Luly, President and CEO at Enanta Pharmaceuticals]

Yeah, I think, I mean, we're gonna use the same outfit to conduct the study. I, I think you should be thinking of this study as being very, very much the same design. I think the, you know, one of the, the world's best benchmarks to look at is EDP-938. That was, you know, one of the most robust datasets ever ever performed in a or achieved in a human challenge study. EDP-938 will be the standard that we'll compare it to. We're not gonna do sort of a side-by-side in this study. That's that would only drag it out further and, and, and postpone the time for us to, you know, get into later stage studies with the molecule.

[Jay Luly, President and CEO at Enanta Pharmaceuticals]

I think we've got such a good handle on that challenge data, and how to look at that challenge data, that we'll be able to, to get pretty much everything we need to know from, from just the, the drug versus placebo. To remind you, you know, EDP-938, the kinds of data that we showed with that was an extremely robust antiviral effect. Pretty much within 12 hours of dosing EDP-938, it altered the course of the infection. People who were on EDP-938 had viral loads that started to stabilize and decline, and people on placebo, viral loads continued to rise and plateau, and only after many days, you know, returned back toward normal. It was a highly statistically significant antiviral effect that we achieved versus placebo.

[Jay Luly, President and CEO at Enanta Pharmaceuticals]

The same was the exact result when you looked at it, was achieved with symptom scores as well. From a symptom standpoint, within a day of dosing, symptoms had stabilized and started to go down, whereas people on placebo, symptoms continued to progress. They got worse, and they plateaued at an elevated level and then only gradually resolved over time. That's the kind of data that we're looking for, and again, we've got a very excellent benchmark comparator with EDP-938.

[Operator]

Thank you. One moment for our next question. We have a question from Roy Buchanan with JMP. Your line is open.

[Roy Buchanan, Equity Research Analyst at JMP]

Hey, thanks for taking the questions. A couple on 235. Are any publications or presentations of details from the SPRINT data expected later this year?

[Jay Luly, President and CEO at Enanta Pharmaceuticals]

you know, that's the, the, the timing on that is subject to getting presentations accepted at conferences. We'll, we are planning presentation of the data. What I will say is, stay tuned on that front with regards to timing, and we'll certainly announce the time and place and the venue once we've been accepted for presentation.

[Roy Buchanan, Equity Research Analyst at JMP]

Okay, great. Anything you can give us on the, the tone of the partner discussions for EDP-235? As you mentioned, cases are pretty low in the U.S. at least. Are people waiting to see how that plays out this winter? You also mentioned regulatory uncertainty maybe. Is that a gating factor? Anything you can tell us about that?

[Jay Luly, President and CEO at Enanta Pharmaceuticals]

Not in any degree of specificity. You've hit on, you know, interesting bits that are not only on our minds, obviously, partners think about these things too, you know, and trying to exactly size what the market is and understand as clearly as they can, what that regulatory pathway is. You know, we can't, we can't control the what the infection looks like, you know, in a given season, but what we can try to do is glean clarity from regulators in terms of pathways. We're working on the part that we can control right now.

[Roy Buchanan, Equity Research Analyst at JMP]

Okay, great. One last one on EDP-514. Just mechanisms for, for combination. Are, are you looking at things that are already out there and being tested, like just a TLR random choice? Or are you pretty much through those already, and are you looking at something completely novel, maybe hasn't been in the clinic, maybe even from an academic lab? Thanks.

[Jay Luly, President and CEO at Enanta Pharmaceuticals]

... We're very, you know, we've looked at a lot of the usual suspects that are out there. I mean, obviously, the TLRs are out there. People have looked at, you know, various RNAi approaches and whatnot. We haven't, we haven't grabbed on to what we think is necessarily the right mechanism yet, so we're still monitoring the field. It's a little bit frustrating, you know, there aren't a lot of, you know, sort of profound new steps forward in this and in this field of HBV. You know, right now it's a little bit of a holding pattern, as I've said before. We're not going to throw other agents in to create the triple combo until we have a great deal of confidence that it's, you know, a study worth funding.

[Jay Luly, President and CEO at Enanta Pharmaceuticals]

In the meantime, you know, we're, we're hunting still.

[Roy Buchanan, Equity Research Analyst at JMP]

Okay. Thank you.

[Jay Luly, President and CEO at Enanta Pharmaceuticals]

You're welcome.

[Operator]

Thank you. Our next question comes from Akash Tewari from Jefferies. Your line is open.

[Analyst at Jefferies]

Hey, this is Amy on for Akash. Thanks so much for taking our questions. The first question on EDP-323, what percent of the drug is bound to plasma protein in vivo? Additionally, do you expect any safety risks from targeting RNA polymerization? We've seen neutropenia with lumicitabine, but know that's a nuc analog, which is a little different, but would love to hear your thoughts here.

[Jay Luly, President and CEO at Enanta Pharmaceuticals]

Yeah, I, I don't recall the level of protein binding, but the ratio or the multiples of the EC90 that I quoted earlier, which were ranged between 11 and 44-fold, were already adjusted for that protein binding. Whatever the protein binding is, this is multiples on top of that, when you look at it from a free drug perspective. You're correct, lumicitabine, you know, being a nuc, a lot of the nucs in the field had, you know, issues. You know, nucs, not uncommonly, suffer or benefit from, I guess, depending upon how you look at it, broad activity across other polymerases, selectivity, you know, can be a problem.

[Jay Luly, President and CEO at Enanta Pharmaceuticals]

EDP-323 is a, a non-nuc polymerase inhibitor, and so far, preclinical safety, you know, was excellent. Human safety in terms of safety and tolerability, at least from our phase I study, was also very, very strong.

[Akash Tewari, Global Head of Biopharmaceutical Research at Jefferies]

Great. Then on EDP-235, are there any additional data sets that a potential partner would be looking for to support a collaboration? When do you expect to get clarity from a regulatory perspective on path to registration?

[Jay Luly, President and CEO at Enanta Pharmaceuticals]

I think right now we have the, you know, the clinical data that we have, you know, with regards to the SPRINT study. Again, we saw antiviral effect. We saw effect on symptom improvement. Those are the data that we have, and the, as I mentioned, the regulatory discussions are ongoing. You know, when we'll finish those, they'll be done when we're done with the exchanges. It's hard for me to put a time point on that right now, but, you know, we'll have further updates as, as we progress.

[Akash Tewari, Global Head of Biopharmaceutical Research at Jefferies]

Great. Then finally, one last one on cash runway. Can you go over the main drivers for you extending runway from 2026 last quarter to 2027 now? Outside of the OMERS royalty sale, are there any other ongoing portfolio prioritization activities that we should be aware of?

[Paul Mellett, CFO at Enanta Pharmaceuticals]

Well, as, as we've indicated, this is Paul Mellett. We, we've made the decision to wait for a partnering situation to continue the phase III work on EDP-235, and that's a significant extension of our runway for the most part, and that's the primary driver. Obviously, we've not, we've not discussed any potential revenue or anything like that from a partnering arrangement. It's just simply the expense bearing of the phase III trials.

[Akash Tewari, Global Head of Biopharmaceutical Research at Jefferies]

Got it. Thank you so much.

[Operator]

Thank you. Our next question comes from Brian Skorney from Baird. Your line is open.

[Analyst at Baird]

Hey, this is Luke on for Brian. Thanks for taking the questions. First on EDP-323, any consideration with regard to the human challenge study design to maximize potential read-through to real-world populations? Then, just a second one on hMPV and RSV, the dual inhibitor. As you finalize selection of that candidate, is there any consideration of potential compromises that make the candidate more or less able to potently inhibit either virus, or are trade-offs not really a necessity in this situation? Thanks.

[Jay Luly, President and CEO at Enanta Pharmaceuticals]

Yeah, so, EDP-323, this is Jay. EDP-323, the, the challenge study, again, the, it's the challenge study, right? It's the sort of rite of passage for RSV molecules. Everybody puts them through the challenge study, and for the most part, everybody runs the challenge study in a very similar way so that you can, you know, cross-trial comparisons are always, you know, never perfect or ideal, but to the extent that you can, you know, compare data in this setup, it's, it's helpful to run it in the same way. Not every molecule that goes into a challenge study comes out successfully from a challenge study, so it's not a given.

[Jay Luly, President and CEO at Enanta Pharmaceuticals]

We view it as a, as a, as a good next step and one, that, again, further de-risks things. Because if you come out of the challenge study with really robust data, you, you know that you have a good antiviral in a human setting, you know, you put that in your, in your back pocket. And then with regards to hMPV RSV dual, I don't, you know, there's not really I'm not sure I fully understand your question. I mean, there, we have, again, we've, we put data out on a, on a prototype. We're, you know, aiming to have our final candidate or our candidate finalized in Q4. You can never exactly balance potency.

[Jay Luly, President and CEO at Enanta Pharmaceuticals]

Well, I, I suspect you could try to do that, you know, maybe for your, for the rest of your life, trying to get everything exactly balanced, but that doesn't kind of matter because you always, whenever you have a broader spectrum drug, there's always a dose-defining pathogen, which is the one that you're the least potent against. Knowing that, if you dose for that and account for that, then you'll be good against the, in this case, the other pathogen, which has even greater potency. You know, we're optimizing different, you know, characteristics of the molecule in that program, settling down to finalists that we're just doing, you know, sort of final characterization on the profile.

[Jay Luly, President and CEO at Enanta Pharmaceuticals]

Assuming that all goes well, again, we're targeting Q4 as the timing for that candidate selection, final selection.

[Jennifer Viera, Senior Director of IR and Corporate Communications at Enanta Pharmaceuticals]

Great. Thanks. I'll hop back in the queue.

[Jay Luly, President and CEO at Enanta Pharmaceuticals]

Welcome.

[Operator]

Thank you.

[Brian Skorney, Managing Director at Baird]

Yep.

[Operator]

We also have a question from Nik Gasic with Leerink Partners. Your line is open.

[Nik Gasic, Research Analyst at Leerink Partners]

Hi, everybody. Good afternoon. This is Nik Gasic on the line, for Roanna Ruiz. Thanks for taking our questions. Maybe first off, on your RSV program, which EDP-323 doses are you planning to evaluate in the upcoming challenge study? I don't know if you've mentioned that. Maybe also, I guess, what learnings from the development of EDP-938 so far, you know, could you apply to possible future development of EDP-323? Are you planning to go after, you know, similar patient populations for EDP-323, or, you know, could you explore other populations as well?

[Jay Luly, President and CEO at Enanta Pharmaceuticals]

Yeah. We, we haven't disclosed the final doses for that study. You know, we're likely to do that in connection with the announcement of the initiation of the study, stay tuned for that. Again, we're aiming for early, early Q4. Suffice it to say, there'll be doses within the ranges that we've studied. We're really trying to just figure out, you know, what optimal doses for various exposures that we wanna try to hit and look at the product profile overall. Then, with regards to EDP-938, I mean, we've learned a lot about RSV through the use of EDP-938, and, you know, I can only imagine that we'll have a more targeted, expedient pathway for EDP-323, you know, based on our learnings.

[Jay Luly, President and CEO at Enanta Pharmaceuticals]

You know, whether it was what we learned in the standard-risk patient population, which is, you know, that patient population doesn't need a drug. Then through the recruitment of our three high-risk patient populations, you know, there's very interesting teachings in each of those patient populations that you can only sort of figure out once you get into them. You know, we've learned a lot along the way with, you know, with EDP-938. You know, exactly the trial after the human challenge study, that's something that we're, you know, thinking about very diligently right now, but not ready to speak to today.

[Nik Gasic, Research Analyst at Leerink Partners]

Got it. Also, are you planning to pursue or, you know, evaluate EDP-323 in similar patient populations? You know, would you explore other types of patients as well?

[Jay Luly, President and CEO at Enanta Pharmaceuticals]

Well, those are the three high-risk patient populations. You know, peds, probably the largest patient population from a market perspective. You know, high-risk adults and immune-compromised patients of different flavors. I mean, we've chosen from immune-compromised, we, at least in RSVTx with EDP-938, we've zeroed in on hematopoietic cell transplant, but there's other immune patient populations, immune-suppressed patient populations that 1, you know, could also consider. But anyway, you want to be in a high-risk patient population of 1 flavor or another if you really want to, you know, to get it over the finish line.

[Nik Gasic, Research Analyst at Leerink Partners]

Helpful. Thanks, Jay.

[Jay Luly, President and CEO at Enanta Pharmaceuticals]

You're welcome.

[Operator]

Thank you. I'm showing no further questions at this time. I'd like to turn the call back over to Jennifer Viera for any closing remarks.

[Jennifer Viera, Senior Director of IR and Corporate Communications at Enanta Pharmaceuticals]

Thank you, operator, and thanks to everyone for joining us today. If you have additional questions, please feel free to contact us by email or call us at the office. Thanks so much and have a good night.

[Operator]

This concludes today's conference call. Thank you for participating. You may now disconnect.

Participants

Executives

• Jennifer Viera, Senior Director of IR and Corporate Communications
• Jay Luly, President and CEO
• Paul Mellett, CFO
• Tara Kieffer, Senior VP of New Product Strategy and Development

Analysts

• Brian Abrahams, Managing Director and Head of Biotechnology Equity Research at RBC Capital Markets
• Jay Olson, Research Analyst at Oppenheimer
• Ed Arce, Senior Research Analyst at H.C. Wainwright
• Eric Joseph, VP and Senior Analyst at JPMorgan
• Roy Buchanan, Equity Research Analyst at JMP
• Analyst at Jefferies
• Akash Tewari, Global Head of Biopharmaceutical Research at Jefferies
• Analyst at Baird
• Brian Skorney, Managing Director at Baird
• Nik Gasic, Research Analyst at Leerink Partners