Enanta Pharmaceuticals Inc. (ENTA, Financial), a collaboration partner of AbbVie (ABBV, Financial), reported its fourth-quarter and full-year 2016 financial results.
In the fourth quarter, the biotechnology company reported revenue of $12.8 million, an 11.11% decrease from the same quarter of the previous year. The company missed analyst expectations on revenue by $0.4 million.
For the fourth quarter of 2016, analysts estimated Enanta would report revenue of $13.23 million, down 8.20% from the same quarter of the prior year. The estimate ranged from a low of $12.07 million and a high of $15 million.
Source: Yahoo Finance
Concerning the income of the period, the biotechnology company reported a net loss of $1.8 million, a 131.03% decrease from the same quarter of 2015.
In the fourth quarter, the loss per diluted common share was nine cents, compared to net income per diluted common share of 29 cents the company reported in the fourth quarter of 2015.
Enanta Pharmaceuticals beat analyst expectations on earnings by five cents. For the quarter, analysts expected the company would report a net loss per diluted common share of 14 cents.
Source: Yahoo Finance
Concerning full-year results, Enanta reported a 45.12% decrease in revenues and a 72.53% decrease in the bottom line.
Revenue was $88.3 million versus revenue of $160.9 million reported by the company in 2015. The net income was $21.7 million (or $1.13 per share) versus a net income of $79 million (or $4.09 per share) reported by the company in 2015.
The company says that the decrease in revenue in 2016 was due to a 76% decrease in milestone payments. In 2016, Enanta Pharmaceuticals realized $30 million versus $125 million received in 2015 for collaborations with AbbVie.
The increase in royalty revenue of $23.6 could only counteract the decrease in sales due to less payments received from AbbVie.
The company says that “due to increased pre-clinical and clinical costs associated with the progression of Enanta’s wholly-owned R&D programs in HCV cyclophilin, non-alcoholic steatohepatitis (NASH), respiratory syncytial virus (RSV) and hepatitis B virus (HBV),” research and development expenses were higher in the fourth quarter of 2016 (up 64% on a year over year basis) and the full year of 2016 (up 74% on a year over year basis).
As of the fourth quarter, the company had $242.2 million in cash on hand and securities to be converted into cash. The company says “that its current cash, cash equivalents and marketable securities will be sufficient to meet the anticipated cash requirements of its existing business for the foreseeable future.”
In 2016, Enanta Pharmaceuticals made significant strides in advancing its pipeline:
“Enanta made significant progress this past year and executed on its stated goals for advancing our pipeline,” commented Jay R. Luly, president and chief executive officer. “We initiated Phase 1 trials of EDP-305, our lead FXR agonist, which we are developing for the treatment of NASH, as well as EDP-494, our novel cyclophilin inhibitor. In addition, we advanced promising leads in RSV and HBV, which we are evaluating to move forward in 2017.” (Source: Fiscal Q4 2016 and Full 2016 Financial Report of Enanta Pharmaceuticals)
The farnesoid X receptor (FXR) is a receptor for bile acids in the gut and liver. It plays a role in the regulation of cholesterol, levels of liver triglycerides and balancing gut fluids. NASH stands for nonalcoholic steatohepatitis, which resembles alcoholic liver disease but occurs in people who drink little or no alcohol. HBV stands for hepatities B virus and RSV stands for human respiratory syncytial virus.
On Nov. 21, Enanta Pharmaceuticals Inc. closed at $30.07 per share, up seven cents (0.23%) from the previous trading day with a volume of 218,800 shares traded on the Nasdaq.
The 52-week range is between $20.39 per share and $34.49 per share.
The stock is less volatile than the stock market (beta = 0.62).
Enanta Pharmaceuticals has a market capitalization of $572.41 million and 19.04 million shares outstanding. The percentage of shares held by insiders is 24.7% and institutional ownership is 78.40%.
The number of shares available for trading is 14.04 million. The price-earnings (P/E) ratio is 19.89 and the EPS (TTM) is $1.51.
The company has approximately $218.5 million of cash on hand ($11.48 per share). The total debt (mrq) is $707,000 and the book value per Share (mrq) is $14.13.
Disclosure: I have no positions in Enanta Pharmaceuticals or AbbVie Inc.
Start a free 7-day trial of Premium Membership to GuruFocus.
