ENANTA PHARMACEUTICALS INC

Enanta Pharmaceuticals is a biotechnology company that uses a chemistry-driven approach and drug discovery capabilities to discover and develop small molecule drugs for virology and immunology indications. The company operates in the pharmaceutical and biotechnology industries, which are intensely competitive and rapidly changing. Many large pharmaceutical and biotechnology companies, academic institutions, governmental agencies and other public and private research organizations are commercializing or pursuing the development of products that target HCV, RSV, SARS-CoV-2, HBV, CSU, AD and other virology and immunology indications that Enanta may target now or in the future. The industry is characterized by competition based on safety and effectiveness, reimbursement coverage, price, patent position, marketing and sales capabilities, and other factors.

Primary competitors named in the filing include AbbVie (collaborator and competitor in HCV), Gilead (Epclusa, Vosevi, Harvoni), Merck (Zepatier), Ark Biosciences, Shionogi, AstraZeneca/Sanofi (BEYFORTUS), Merck (ENFLONSIA), Pfizer (ABRYSVO), Moderna (mRESVIA), GSK (AREXVY), Celldex, Jasper, Sanofi/Blueprint, Evommune, Corvus, Kymera, Sanofi/Recludix, J&J/Kaken, Gilead/LEO, DeepCure, JW Pharma, Vir, GSK, Arbutus, and Roche. Enanta's stated competitive advantages include its robust, chemistry-driven approach and drug discovery capabilities, and its focus on replication inhibitors (N-protein and L-protein) for RSV that have demonstrated a higher bar to the emergence of viral resistance compared to fusion inhibitors. The company believes 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 replication and greater disease severity, allowing a bigger window to realize the full potential of zelicapavir.

Enanta generates revenue primarily through royalty revenue from its Collaborative Development and License Agreement with AbbVie, under which it discovered and out-licensed two protease inhibitor compounds (glecaprevir and paritaprevir) that have been clinically tested, manufactured, and commercialized by AbbVie as part of its combination regimens for HCV. Since August 2017, substantially all of Enanta's royalty revenue has been derived from AbbVie's net sales of MAVYRET/MAVIRET. The ongoing royalty revenues from this regimen consist of annually tiered, double-digit, per-product royalties on 50% of the calendar year net sales of the glecaprevir/pibrentasvir combination in MAVYRET/MAVIRET. In April 2023, Enanta sold 54.5% of its future MAVYRET/MAVIRET royalties to an affiliate of OMERS for a $200.0 million ¹ cash payment, subject to a cap of total royalties sold equal to 1.42 times the cash payment. For accounting purposes, Enanta continues to record 100% of HCV royalties earned under the AbbVie agreement as royalty revenue. Enanta also has wholly-owned development programs in virology (RSV, SARS-CoV-2, HBV) and immunology (KIT, STAT6) that are not yet generating product revenue. The company does not have its own manufacturing capabilities and relies on third-party manufacturers, including manufacturers in China, for supply of active pharmaceutical ingredients and ingredients for use in clinical trials.

Enanta's virology programs include its RSV program with two clinical stage candidates: zelicapavir (formerly EDP-938), an N-protein inhibitor, and EDP-323, an L-protein inhibitor. Zelicapavir has Fast Track designation from the FDA and has been studied in two Phase 2 studies in high-risk patient populations. In September 2025, Enanta announced positive topline results from 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 congestive heart failure. In December 2024, Enanta announced positive topline results from the first-in-pediatrics Phase 2 study evaluating zelicapavir in 96 hospitalized and non-hospitalized children aged 28 days to 36 months with RSV. EDP-323, which also has Fast Track designation from the FDA, completed a Phase 2a challenge study in September 2024. Enanta also has clinical-stage programs in virology for SARS-CoV-2 (EDP-235, a 3CL protease inhibitor) and Hepatitis B virus (EDP-514, a core inhibitor). In immunology, Enanta has a preclinical stage program to develop oral KIT inhibitors (EDP-978 selected as clinical candidate) for the treatment of CSU and potentially other indications, and a preclinical stage program to develop oral STAT6 inhibitors (EPS-3903 selected as lead development candidate) for the treatment of type 2 immune driven diseases, initially focusing on AD. Enanta plans to expand its presence in immunology with the introduction of a third program in the fourth quarter of 2025.

Enanta's out-licensed products include two protease inhibitors developed through its collaboration with AbbVie: glecaprevir and paritaprevir. Glecaprevir is co-formulated as part of AbbVie's MAVYRET/MAVIRET regimen for the treatment of chronic HCV, and in June 2025 it was also approved by the FDA as the first and only treatment for acute HCV infection. Enanta has received the full $330.0 million ² of contractual milestone payments under the agreement related to clinical development and commercialization regulatory approvals of these regimens in major markets. The first protease inhibitor, paritaprevir, is part of AbbVie's initial HCV regimens, which have been almost entirely replaced by MAVYRET/MAVIRET. Enanta also out-licensed one of its antibiotic compounds in December 2022 in exchange for a $1.0 million ³ up-front fee and future milestone payments and royalties.

Significant operational developments during the period include the positive topline results from the Phase 2b high-risk adults study of zelicapavir announced on September 29, 2025, and the positive topline results from the first-in-pediatrics Phase 2 study of zelicapavir announced in December 2024. Enanta also announced positive topline results for EDP-323 in a Phase 2a challenge study in September 2024. In April 2023, Enanta entered into a royalty sale agreement with an affiliate of OMERS, receiving a $200.0 million ⁴ 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 to OMERS equal to 1.42 times the purchase price. In October 2025, Enanta completed a public offering of its common stock, resulting in gross proceeds of approximately $74.8 million ⁵. Enanta also completed the buildout of its new office and laboratory space at 4 Kingsbury Avenue in Watertown, Massachusetts during fiscal 2025.

For the fiscal year ended September 30, 2025, total revenue was $65.324 million ⁶, compared to $67.635 million ⁷ in fiscal 2024 and $79.204 million ⁸ in fiscal 2023. The decrease in revenue year-over-year was primarily due to AbbVie's lower reported HCV sales. Net loss for fiscal 2025 was $81.889 million ⁹, compared to $116.045 million ¹⁰ in fiscal 2024 and $133.816 million ¹¹ in fiscal 2023. Research and development expenses decreased to $106.740 million ¹² in fiscal 2025 from $131.476 million ¹³ in fiscal 2024, primarily due to the timing of clinical trials in the RSV programs. General and administrative expenses decreased to $43.933 million ¹⁴ in fiscal 2025 from $57.850 million ¹⁵ in fiscal 2024, primarily due to a decrease in legal expenses related to the patent infringement suit against Pfizer and a decrease in stock-based compensation expenses. As of September 30, 2025, Enanta had $188.9 million ¹⁶ in cash, cash equivalents and short-term marketable securities.

The company states that based on its operating plan, it believes that its existing cash, cash equivalents and short-term marketable securities as of September 30, 2025, as well as the cash flows from its retained portion of future HCV royalties and the proceeds from its public offering in October 2025, will enable it to fund its operating expenses and capital expenditure requirements into fiscal 2029.

A key growth vector is the advancement of Enanta's RSV programs. The company has completed clinical studies of two compounds (zelicapavir and EDP-323) for RSV, a viral infection for which there is currently no safe and effective treatment and as such there exists a substantial unmet medical need. Recent CDC estimates suggest a significant RSV burden in the U.S., with up to 6.5 million outpatient visits, 350,000 hospitalizations and 23,000 deaths annually. Enanta is evaluating potential partnership opportunities to advance its RSV programs to the next stage of clinical development. The company believes 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 replication and greater disease severity, allowing a bigger window to realize the full potential of zelicapavir.

Another major growth vector is Enanta's immunology portfolio. The company is advancing preclinical immunology programs targeting KIT (for mast cell driven diseases with an initial focus on CSU) and STAT6 (for type 2 immune driven diseases with an initial focus on AD). Based on industry reports, by 2030 the market is projected to be approximately $5 billion ¹⁷ for urticaria, $30 billion ¹⁸ for AD and $35 billion ¹⁹ for the combined market of asthma, COPD, CRSwNP, and PN. Enanta has selected EDP-978 as its clinical candidate for the KIT program and expects to file an IND in the first quarter of 2026. For the STAT6 program, Enanta has selected EPS-3903 as its lead development candidate and expects to file an IND in the second half of 2026. Enanta also plans to expand its presence in immunology with the introduction of a third program in the fourth quarter of 2025.

Enanta expects that its research and development expenses will fluctuate from period to period as it advances its research and development programs. However, in the next 12 months, the company expects its external research and development expenses generally to decrease since it has completed its Phase 2 studies of zelicapavir and EDP-323 and is evaluating partnering opportunities for the RSV programs. General and administrative expenses may increase in the long term. To date, Enanta has not identified any significant impact of inflation on spending in research and development or general and administrative expenses, but it is uncertain whether there will be inflationary impacts in future periods.

Enanta does not have its own manufacturing capabilities and relies on third-party manufacturers, including manufacturers in China, for supply of active pharmaceutical ingredients and ingredients for use in clinical trials. The company expects to continue to rely on such manufacturers to produce commercial quantities of any product candidates that it commercializes itself. Wherever possible, Enanta seeks to identify multiple suppliers for raw materials and key intermediaries. As of September 30, 2025, Enanta had 120 full-time employees ²⁰, 61 of whom hold Ph.D. or M.D. degrees and an additional 29 of whom hold a master's degree or other post-graduate degree. The company considers the intellectual capital of its employees to be an essential driver of its business and key to its future prospects.

Enanta's capital allocation strategy includes funding research and development activities through its existing resources and future cash flow from its AbbVie collaboration. Research and development expenses were $106.740 million ²¹ for fiscal 2025, $131.476 million ²² for fiscal 2024, and $163.524 million ²³ for fiscal 2023. Capital expenditures in fiscal 2025 included the buildout of new office and laboratory space at 4 Kingsbury Avenue. In October 2025, Enanta completed a public offering of its common stock, resulting in gross proceeds of approximately $74.8 million ²⁴. Enanta does not anticipate paying any cash dividends on its common stock for the foreseeable future. As of September 30, 2025, Enanta had 1.9 million ²⁵ outstanding shares of Series 1 nonconvertible preferred stock, classified as a long-term liability at fair value of $1.311 million ²⁶.

A significant headwind is the dependence of Enanta's revenues on royalty revenues derived from AbbVie's net sales of its MAVYRET/MAVIRET regimen for HCV. AbbVie may experience lower sales volume in future quarters, primarily due to a reduction in diagnoses and treatment rates of HCV. AbbVie's MAVYRET/MAVIRET regimen faces intense competition from existing approved products in the HCV market, including Gilead's Epclusa, Vosevi, and Harvoni, and Merck's Zepatier. Gilead launched authorized generic versions of Epclusa and Harvoni through its subsidiary, Asegua Therapeutics, LLC, which have had an impact on the competitive landscape. Beginning after June 30, 2023, 54.5% of Enanta's reported revenues represent payments that go directly to OMERS following the April 2023 sale of that portion of MAVYRET/MAVIRET royalties earned through June 30, 2032, subject to a cap on aggregate payments to OMERS equal to 1.42 times the purchase price.

Another constraint is that Enanta has not developed independently any approved products and has limited clinical development experience. None of Enanta's product candidates in its pipeline, other than glecaprevir which was clinically developed by AbbVie, has yet to advance beyond Phase 2 clinical trials. The company faces substantial competition in all its target disease areas, and in most of these areas, there are other companies with product candidates that are more advanced than Enanta's. If Enanta is not 'first to market' or sufficiently differentiated with one of its product candidates, its competitive position could be compromised. Additionally, Enanta will require substantial additional funding to achieve its goals, and a failure to obtain this funding when needed could force the company to delay, limit, reduce or terminate some or all of its product development efforts.

Enanta's revenues are substantially dependent upon AbbVie's success selling MAVYRET/MAVIRET for HCV, and AbbVie may experience lower sales volume due to a reduction in diagnoses and treatment rates of HCV, intense competition from Gilead and other companies, and pricing pressure. Beginning after June 30, 2023, 54.5% of reported revenues represent payments that go directly to OMERS following the April 2023 sale of that portion of MAVYRET/MAVIRET royalties earned through June 30, 2032, subject to a cap on aggregate payments to OMERS equal to 1.42 times the $200.0 million ²⁷ purchase price. Enanta will require substantial additional funding to achieve its goals, and a failure to obtain funding when needed could force the company to delay, limit, reduce or terminate some or all of its product development efforts. Clinical drug development for viral infections and immunology indications involves a lengthy and expensive process with uncertain timelines and outcomes, and none of Enanta's wholly-owned product candidates has yet to advance beyond Phase 2 clinical trials. The company faces intense competition in all target disease areas, with many competitors having substantially greater resources and more advanced product candidates. If Enanta is not 'first to market' or sufficiently differentiated with a product candidate, its competitive position could be compromised. Enanta also faces risks related to its reliance on third-party manufacturers in China for key intermediates used in the manufacture of active pharmaceutical ingredients, and any disruption in production could impair the company's ability to continue its research and development.

Management's message emphasizes Enanta's strategy to become a leader in the discovery and development of small molecule drugs with an emphasis on first-in-disease treatments for RSV and best-in-class small molecule treatments for diseases with significant unmet medical needs in immunology. Key strategic priorities include advancing clinical development of novel virology product candidates for RSV, advancing the preclinical immunology portfolio of novel oral inhibitors (KIT and STAT6), investing in research and development of compounds against other immunology targets, and collaborating or out-licensing with pharmaceutical partners where appropriate. Management highlights the positive topline results from the Phase 2b high-risk adults study of zelicapavir and the first-in-pediatrics Phase 2 study, as well as the positive Phase 2a challenge study results for EDP-323. The company is evaluating potential partnership opportunities to advance its RSV programs to the next stage of clinical development. Based on the operating plan, management believes that existing cash, cash equivalents and short-term marketable securities as of September 30, 2025, as well as the cash flows from the retained portion of future HCV royalties and the proceeds from the October 2025 public offering, will enable the company to fund its operating expenses and capital expenditure requirements into fiscal 2029.