E N A N T A Pharmaceuticals CREATING SMALL MOLECULE DRUGS FOR VIRAL INFECTIONS AND LIVER DISEASES Corporate Presentation June 22, 2021 Forward Looking Statements Disclaimer This presentation contains forward-looking statements concerning our business, operations and financial performance and condition, as well as our plans, objectives and expectations for our research and development programs, our business and the industry in which we operate. Any statements contained herein that are not statements of histo ...

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 March 31, 2021 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 2834 04-3205099 (State or other jurisdiction of incorporation or organizat ...

Financial Data and Key Metrics Changes - For Q2 2021, total revenue was $20.1 million, a decrease from $27.6 million in the same period of 2020, primarily due to lower royalty revenue from AbbVie's MAVYRET product sales [31][32] - Royalty revenue was based on 50% of MAVYRET sales at a royalty rate of 10%, with AbbVie's global MAVYRET product sales reported at $415 million [31][32] - Net loss for the quarter was $22 million, or a loss of $1.09 per diluted common share, compared to a net loss of $6 million, or a loss of $0.30 per diluted common share, for the same period in 2020 [36] Business Line Data and Key Metrics Changes - The company has three active clinical programs in virology and liver diseases, conducting seven clinical trials, including studies for hepatitis B, respiratory syncytial virus (RSV), and non-alcoholic steatohepatitis (NASH) [6][7][27] - Preliminary data from the Phase 1b study of EDP-514 in chronic HBV patients showed it was safe and well-tolerated, with a mean reduction of 1 log in HBV RNA compared to 0.3 log reduction in placebo [10][13] Market Data and Key Metrics Changes - The ongoing studies for EDP-938 in RSV are crucial as RSV is expected to reemerge globally after COVID-19 mitigation measures subside, with trial sites established in multiple regions [22][23] - The company is preparing for the initiation of clinical trials for EDP-721, an oral HBV RNA destabilizer, expected to start in mid-2021 [19][29] Company Strategy and Development Direction - The company aims to develop an all-oral functional cure for chronic HBV infection by combining EDP-514 and EDP-721, targeting multiple mechanisms to enhance treatment efficacy [16][18][66] - The strategy includes exploring combination therapies with external agents, such as siRNA or immunotherapy, to enhance the chances of achieving a functional cure for HBV [62][66] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the upcoming catalysts across the pipeline, including preliminary results from the Phase 1b study of EDP-514 in viremic HBV patients and the initiation of EDP-721 trials [5][29] - The impact of COVID-19 on clinical trial recruitment and timelines was acknowledged, particularly for the NASH program, with expectations for interim analysis data to be reported in Q3 2021 [27][51] Other Important Information - The company ended the quarter with approximately $400 million in cash and marketable securities, providing a strong financial position to support ongoing and future clinical trials [36] - The company is also advancing its discovery initiatives for SARS-CoV-2, focusing on developing oral protease and polymerase inhibitors [26][71] Q&A Session Summary Question: Can you provide more granularity on RNA declines and the 800 mg dose optimization for EDP-514? - Management noted high trough levels at both 200 mg and 400 mg doses, with a focus on safety and tolerability rather than virology in the current study [38][40][41] Question: What are the latest views on the NASH program and potential paths forward? - Management highlighted the ongoing studies for EDP-297 and EDP-305, with expectations for data in mid-2021 and a focus on identifying effective doses for combination therapies [47][52] Question: Were any serological tests done at week 2 for EDP-514? - Management clarified that the study was not designed to assess viral loads at that time, but the data will be compiled for future analysis [54][57] Question: Can you discuss the safety profile of EDP-514 and the onset of adverse events? - Management indicated that adverse events were mild and scattered throughout the study, with no concerning patterns observed [63] Question: How does the company view the potential for protease inhibitors versus polymerase inhibitors for COVID-19? - Management expressed confidence in both targets, emphasizing the importance of targeting conserved regions to minimize resistance [78][79] Question: What are the regulatory considerations for the RSV program? - Management stated that discussions with the FDA regarding pivotal trial designs and endpoints will occur after finalizing the Phase 2b program [89]

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, 2020 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 2834 04-3205099 (State or other jurisdiction of incorporation or organi ...

Part I [Business Overview](index=6&type=section&id=Item%201.%20Business) Enanta Pharmaceuticals develops small molecule drugs for viral infections and liver diseases, funding its R&D pipeline primarily through royalties from AbbVie's HCV treatment - The company's primary focus is on discovering and developing **small molecule drugs** for **viral infections** (RSV, HBV, SARS-CoV-2, hMPV) and **liver diseases** (NASH)[20](index=20&type=chunk) - Funding for wholly-owned R&D programs is supported by **royalties** from the collaboration with AbbVie on the HCV treatment MAVYRET/MAVIRET[20](index=20&type=chunk) Financial Metrics (as of FY 2020) | Financial Metric | Value (as of FY 2020) | | :--- | :--- | | Cash, Cash Equivalents & Marketable Securities | $419 million | | Fiscal 2020 Royalty Revenue | $122.5 million | Enanta's Research and Development Pipeline (as of September 30, 2020) | Disease Area | Product Candidate / Class | Discovery/Preclinical | Phase 1 | Phase 2 | Phase 3 | Marketed | Status | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | **HCV** | glecaprevir (Protease Inhibitor) | | | | | ✓ | Marketed by AbbVie in MAVYRET/MAVIRET | | **RSV** | EDP-938 (N-Protein Inhibitor) | | | ✓ | | | Phase 2b RSVP study ongoing | | **NASH** | EDP-305 (FXR Agonist) | | | ✓ | | | Phase 2b ARGON-2 study ongoing | | **HBV** | EDP-514 (Core Inhibitor) | | ✓ | | | | Two Phase 1b studies ongoing | | **NASH** | EDP-297 (FXR Agonist Follow-on) | | ✓ | | | | Phase 1 study ongoing | | **hMPV** | Non-Fusion Inhibitor | ✓ | | | | | Discovery | | **COVID-19** | SARS-CoV-2 Inhibitor | ✓ | | | | | Discovery | [Risk Factors](index=29&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks including heavy reliance on AbbVie's HCV drug sales, clinical development uncertainties, intense competition, and potential impacts from the COVID-19 pandemic - Financial prospects are **heavily dependent on AbbVie's success** in selling MAVYRET/MAVIRET for HCV, with sales potentially impacted by reduced diagnoses and treatment rates due to the COVID-19 pandemic[101](index=101&type=chunk) - The company faces **substantial competition** in all its target disease areas (HCV, RSV, HBV, NASH, hMPV, SARS-CoV-2), with many competitors having more advanced product candidates and greater resources[104](index=104&type=chunk)[107](index=107&type=chunk) - Clinical drug development is a **lengthy, expensive, and uncertain process**, and the company's pipeline candidates have not yet advanced beyond Phase 2 trials, with potential for delays or failures[121](index=121&type=chunk) - The ongoing COVID-19 pandemic has **impacted business operations and clinical trials**, causing delays in recruitment for studies like the ARGON-2 (NASH) and RSVP (RSV) trials[108](index=108&type=chunk)[110](index=110&type=chunk) - The company **relies on third-party manufacturers**, including some in China, for clinical drug supplies, with potential disruptions from trade wars, political unrest, or pandemics adversely affecting operations[145](index=145&type=chunk)[148](index=148&type=chunk) [Properties](index=54&type=section&id=Item%202.%20Properties) Enanta leases approximately 67,000 square feet of office and laboratory space for its corporate headquarters in Watertown, Massachusetts - The company leases a total of approximately **67,000 square feet** of office and laboratory space in Watertown, Massachusetts, across two separate lease agreements[191](index=191&type=chunk) [Legal Proceedings](index=54&type=section&id=Item%203.%20Legal%20Proceedings) The company is not currently involved in any material legal proceedings as of the report date - The company is **not currently involved in any material legal proceedings**[192](index=192&type=chunk) Part II [Market for Common Equity and Related Matters](index=55&type=section&id=Item%205.%20Market%20for%20the%20Company%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Enanta's common stock trades on NASDAQ under "ENTA", and the company has never paid cash dividends nor anticipates doing so - Common stock is traded on **The NASDAQ Global Select Market** under the symbol "**ENTA**"[198](index=198&type=chunk) Quarterly Stock Price (Fiscal Years 2020 & 2019) | Fiscal Year | Quarter | High ($) | Low ($) | | :--- | :--- | :--- | :--- | | **2020** | First | 67.88 | 57.15 | | | Second | 62.12 | 38.40 | | | Third | 58.59 | 44.90 | | | Fourth | 54.57 | 42.07 | | **2019** | First | 86.42 | 64.09 | | | Second | 106.80 | 68.67 | | | Third | 101.27 | 80.52 | | | Fourth | 89.25 | 58.02 | - The company has **never declared or paid cash dividends** and does not expect to in the foreseeable future[199](index=199&type=chunk) [Selected Consolidated Financial Data](index=57&type=section&id=Item%206.%20Selected%20Consolidated%20Financial%20Data) This section provides selected financial data for the past five fiscal years, highlighting a shift to a net loss in FY2020 despite stable total assets Selected Historical Financial Data (in thousands, except per share data) | Metric | 2020 | 2019 | 2018 | | :--- | :--- | :--- | :--- | | **Revenue** | $122,473 | $205,197 | $206,625 | | **Research and development** | $136,756 | $142,213 | $94,856 | | **Total operating expenses** | $164,112 | $168,459 | $118,297 | | **Income (loss) from operations** | $(41,639) | $36,738 | $88,328 | | **Net income (loss)** | $(36,168) | $46,383 | $71,956 | | **Diluted net income (loss) per share** | $(1.81) | $2.21 | $3.48 | | **Total assets (at year end)** | $486,132 | $489,829 | $414,227 | | **Cash, cash equivalents and marketable securities** | $419,283 | $400,249 | $325,119 | [Management's Discussion and Analysis (MD&A)](index=58&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial performance, noting a significant revenue decrease and net loss in FY2020, while maintaining strong liquidity [Results of Operations](index=63&type=section&id=Results%20of%20Operations) FY2020 revenue decreased significantly to $122.5 million due to lower AbbVie royalties, resulting in a net loss of $36.2 million despite slightly reduced R&D expenses Revenue Comparison (in thousands) | Year Ended September 30, | 2020 | 2019 | 2018 | | :--- | :--- | :--- | :--- | | Royalties | $122,473 | $205,197 | $191,625 | | Milestones | — | — | $15,000 | | **Total revenue** | **$122,473** | **$205,197** | **$206,625** | - The **$82.7 million decrease** in revenue in FY2020 was due to lower numbers of treated HCV patients as a result of the worldwide COVID-19 pandemic and competitive pricing pressures[233](index=233&type=chunk) R&D Expense by Program (in thousands) | R&D Program | 2020 | 2019 | 2018 | | :--- | :--- | :--- | :--- | | Virology | $85,856 | $75,087 | $40,047 | | Liver disease | $45,001 | $66,892 | $54,691 | | Other | $5,899 | $234 | $118 | | **Total R&D expenses** | **$136,756** | **$142,213** | **$94,856** | - R&D expense decreased by **$5.5 million** in FY2020 compared to FY2019, primarily due to the timing of clinical studies and the impact of the COVID-19 pandemic, which paused or delayed enrollment in several trials[237](index=237&type=chunk) [Liquidity and Capital Resources](index=65&type=section&id=Liquidity%20and%20Capital%20Resources) As of September 30, 2020, Enanta maintained strong liquidity with $419 million in cash and securities, despite a significant decrease in operating cash flow in FY2020 - The company's principal sources of liquidity are cash, cash equivalents, and marketable securities, totaling **$419 million** as of September 30, 2020[241](index=241&type=chunk) Summary of Cash Flows (in thousands) | Activity | 2020 | 2019 | 2018 | | :--- | :--- | :--- | :--- | | Net cash from Operating | $7,088 | $71,418 | $29,220 | | Net cash from Investing | $19,830 | $(86,664) | $(35,402) | | Net cash from Financing | $8,983 | $2,574 | $4,409 | - The **decrease in cash from operations** in FY2020 was primarily driven by a decrease in royalty payments received from AbbVie and an increase in R&D costs[241](index=241&type=chunk) [Consolidated Financial Statements and Supplementary Data](index=68&type=section&id=Item%208.%20Consolidated%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the audited consolidated financial statements and the independent auditor's unqualified opinion, highlighting critical audit matters related to R&D accruals - The independent auditor, PricewaterhouseCoopers LLP, issued an **unqualified opinion** on the consolidated financial statements and the effectiveness of internal control over financial reporting as of September 30, 2020[293](index=293&type=chunk) - A **critical audit matter** identified was the significant management judgment required in **estimating research and development and pharmaceutical drug manufacturing accruals**, which are based on contract terms, timelines, and progress of activities[303](index=303&type=chunk)[304](index=304&type=chunk) - The company **adopted the new lease accounting standard (Topic 842)** on October 1, 2019, resulting in the recognition of right-of-use assets of $7.2 million and lease liabilities of $8.6 million[350](index=350&type=chunk) [Controls and Procedures](index=68&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that both disclosure controls and internal control over financial reporting were effective as of September 30, 2020, with no material changes - Management concluded that the company's disclosure controls and procedures were **effective** at a reasonable assurance level as of September 30, 2020[258](index=258&type=chunk) - Based on the COSO 2013 framework, management concluded that the company's internal control over financial reporting was **effective** as of September 30, 2020[260](index=260&type=chunk) Part III [Directors, Executive Officers and Corporate Governance](index=70&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information on directors, executive officers, and corporate governance is incorporated by reference from the company's 2021 Proxy Statement - Detailed information on directors, executive officers, and corporate governance is **incorporated by reference** from the 2021 Proxy Statement[265](index=265&type=chunk) [Executive Compensation](index=70&type=section&id=Item%2011.%20Executive%20Compensation) Details regarding executive compensation are incorporated by reference from the company's 2021 Proxy Statement - Information on executive compensation is **incorporated by reference** from the 2021 Proxy Statement[266](index=266&type=chunk) [Security Ownership and Equity Compensation Plans](index=70&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) This section details securities authorized under equity compensation plans as of September 30, 2020, with further ownership details incorporated by reference Equity Compensation Plan Information (as of September 30, 2020) | Plan Category | Securities to be issued upon exercise (a) | Weighted-average exercise price ($) (b) | Securities remaining for future issuance (c) | | :--- | :--- | :--- | :--- | | **Equity plans approved by security holders** | 3,399,000 | $47.81 | 1,407,000 | | **Equity plans not approved by security holders** | — | — | — | | **Total** | **3,399,000** | **$47.81** | **1,407,000** | Part IV [Exhibits and Financial Statement Schedules](index=72&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists all financial statements, schedules, and exhibits filed as part of the Form 10-K, including governance documents and material contracts - The financial statements are included under **Part II, Item 8** of the report[274](index=274&type=chunk) - A **list of all exhibits** filed with the report is provided, including governance documents, material contracts like the AbbVie agreement, and compensatory plans[277](index=277&type=chunk)

PART I—FINANCIAL INFORMATION [ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS](index=3&type=section&id=ITEM%201.%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) This section presents Enanta Pharmaceuticals' unaudited consolidated financial statements and detailed notes for periods ending March 31, 2020, and September 30, 2019 [Unaudited Consolidated Balance Sheets](index=3&type=section&id=Unaudited%20Consolidated%20Balance%20Sheets) This section provides a snapshot of the company's financial position, detailing assets, liabilities, and equity at specific dates Consolidated Balance Sheet Highlights (in thousands) | Metric | March 31, 2020 (in thousands) | September 30, 2019 (in thousands) | | :---------------------------------- | :------------- | :----------------- | | Cash and cash equivalents | $74,338 | $51,230 | | Short-term marketable securities | $280,917 | $284,006 | | Accounts receivable | $27,619 | $51,313 | | Total current assets | $402,709 | $401,848 | | Total assets | $513,501 | $489,829 | | Total current liabilities | $19,516 | $22,609 | | Total liabilities | $27,510 | $27,337 | | Total stockholders' equity | $485,991 | $462,492 | - Total assets increased by **$23.67 million**, primarily driven by an increase in cash and cash equivalents, while accounts receivable decreased significantly[11](index=11&type=chunk) [Unaudited Consolidated Statements of Operations](index=4&type=section&id=Unaudited%20Consolidated%20Statements%20of%20Operations) This section details the company's revenues, expenses, and net income or loss over specific reporting periods Consolidated Statements of Operations Highlights (in thousands, except per share amounts) | Metric | Three Months Ended March 31, 2020 (in thousands) | Three Months Ended March 31, 2019 (in thousands) | Six Months Ended March 31, 2020 (in thousands) | Six Months Ended March 31, 2019 (in thousands) | | :---------------------------------- | :-------------------------------- | :-------------------------------- | :------------------------------ | :------------------------------ | | Royalty revenue | $27,619 | $39,631 | $80,189 | $109,517 | | Research and development expenses | $32,610 | $34,155 | $65,388 | $69,033 | | General and administrative expenses | $6,884 | $6,780 | $13,805 | $13,932 | | Income (loss) from operations | $(11,875) | $(1,304) | $996 | $26,552 | | Net income (loss) | $(6,005) | $4,145 | $7,438 | $30,156 | | Basic net income (loss) per share | $(0.30) | $0.21 | $0.37 | $1.55 | | Diluted net income (loss) per share | $(0.30) | $0.20 | $0.36 | $1.44 | - For the three months ended March 31, 2020, the company reported a net loss of **$6.005 million**, a significant decline from a net income of **$4.145 million** in the prior-year period, primarily due to decreased royalty revenue[15](index=15&type=chunk) - For the six months ended March 31, 2020, net income decreased substantially to **$7.438 million** from **$30.156 million** in the prior-year period, driven by a **$29.328 million** reduction in royalty revenue[15](index=15&type=chunk) [Unaudited Consolidated Statements of Comprehensive Income (Loss)](index=5&type=section&id=Unaudited%20Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)) This section presents the total comprehensive income or loss, including net income and other comprehensive income items Consolidated Statements of Comprehensive Income (Loss) Highlights (in thousands) | Metric | Three Months Ended March 31, 2020 (in thousands) | Three Months Ended March 31, 2019 (in thousands) | Six Months Ended March 31, 2020 (in thousands) | Six Months Ended March 31, 2019 (in thousands) | | :---------------------------------- | :-------------------------------- | :-------------------------------- | :------------------------------ | :------------------------------ | | Net income (loss) | $(6,005) | $4,145 | $7,438 | $30,156 | | Net unrealized gains on marketable securities, net of tax | $374 | $245 | $462 | $386 | | Comprehensive income (loss) | $(5,631) | $4,390 | $7,900 | $30,542 | - Comprehensive loss for the three months ended March 31, 2020, was **$5.631 million**, compared to comprehensive income of **$4.390 million** in the same period last year, reflecting the shift to a net loss[18](index=18&type=chunk) [Unaudited Consolidated Statements of Stockholders' Equity](index=6&type=section&id=Unaudited%20Consolidated%20Statements%20of%20Stockholders'%20Equity) This section outlines changes in the company's equity accounts, including common stock, retained earnings, and comprehensive income Consolidated Statements of Stockholders' Equity Highlights (in thousands) | Metric | March 31, 2020 (in thousands) | September 30, 2019 (in thousands) | | :---------------------------------- | :------------- | :----------------- | | Common Stock | $200 | $197 | | Additional Paid-In Capital | $314,005 | $298,409 | | Accumulated Other Comprehensive Income | $608 | $146 | | Retained Earnings | $171,178 | $163,740 | | Total Stockholders' Equity | $485,991 | $462,492 | - Total stockholders' equity increased by **$23.499 million** from September 30, 2019, to March 31, 2020, primarily due to increases in additional paid-in capital and retained earnings, despite a net loss in the most recent quarter[21](index=21&type=chunk) [Unaudited Consolidated Statements of Cash Flows](index=7&type=section&id=Unaudited%20Consolidated%20Statements%20of%20Cash%20Flows) This section reports the cash generated and used by operating, investing, and financing activities over specific periods Consolidated Statements of Cash Flows Highlights (in thousands) | Metric | Six Months Ended March 31, 2020 (in thousands) | Six Months Ended March 31, 2019 (in thousands) | | :---------------------------------- | :------------------------------ | :------------------------------ | | Net cash provided by operating activities | $27,037 | $60,340 | | Net cash used in investing activities | $(9,453) | $(19,609) | | Net cash provided by financing activities | $5,524 | $1,397 | | Net increase in cash, cash equivalents and restricted cash | $23,108 | $42,128 | | Cash, cash equivalents and restricted cash at end of period | $74,946 | $106,638 | - Net cash provided by operating activities decreased by **$33.303 million** for the six months ended March 31, 2020, compared to the same period in 2019, mainly due to lower net income[23](index=23&type=chunk)[124](index=124&type=chunk) - Net cash used in investing activities decreased by **$10.156 million**, primarily due to the timing of purchases, sales, and maturities of marketable securities[23](index=23&type=chunk)[125](index=125&type=chunk) [Unaudited Notes to Consolidated Financial Statements](index=8&type=section&id=Unaudited%20Notes%20to%20Consolidated%20Financial%20Statements) This section provides detailed explanations and additional information supporting the consolidated financial statements [1. Nature of the Business and Basis of Presentation](index=8&type=section&id=1.%20Nature%20of%20the%20Business%20and%20Basis%20of%20Presentation) This note describes Enanta Pharmaceuticals' core business, R&D focus, and the basis for financial statement presentation - Enanta Pharmaceuticals, Inc. is a biotechnology company focused on discovering and developing small molecule drugs for viral infections and liver diseases[26](index=26&type=chunk) - The company's R&D programs are primarily focused on respiratory syncytial virus (RSV), non-alcoholic steatohepatitis (NASH), hepatitis B virus (HBV), human metapneumovirus (hMPV), and SARS-CoV-2 (COVID-19)[26](index=26&type=chunk) - The COVID-19 pandemic had no material impact on the company's consolidated financial position, results of operations, and cash flows for the three months ended March 31, 2020, but future impacts are highly uncertain[28](index=28&type=chunk)[29](index=29&type=chunk) [2. Summary of Significant Accounting Policies](index=9&type=section&id=2.%20Summary%20of%20Significant%20Accounting%20Policies) This note outlines the key accounting principles and policies applied in preparing the consolidated financial statements - The company adopted ASU No. 2016-02, Leases (Topic 842), on October 1, 2019, resulting in the recording of right-of-use (ROU) assets of **$7.151 million** and lease liabilities of **$8.622 million**, with no material impact on results of operations or cash flows[36](index=36&type=chunk) - ASU No. 2017-08, Receivables—Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities, was also adopted on October 1, 2019, without material impact[38](index=38&type=chunk) - The company is evaluating the potential impact of recently issued accounting pronouncements ASU No. 2016-13 (Credit Losses) and ASU 2019-12 (Income Taxes), effective for fiscal years beginning October 1, 2020, and October 1, 2021, respectively[40](index=40&type=chunk)[41](index=41&type=chunk) [3. Fair Value of Financial Assets and Liabilities](index=10&type=section&id=3.%20Fair%20Value%20of%20Financial%20Assets%20and%20Liabilities) This note details the valuation methods and fair values of the company's financial assets and liabilities Fair Value of Financial Assets and Liabilities (in thousands) | Asset/Liability | March 31, 2020 Total (in thousands) | September 30, 2019 Total (in thousands) | | :---------------------------------- | :------------------- | :--------------------- | | Money market funds | $69,304 | $44,569 | | U.S. Treasury notes | $168,191 | $170,515 | | Commercial paper | $45,876 | $66,667 | | Corporate bonds | $146,949 | $111,837 | | Total Assets | $430,320 | $393,588 | | Series 1 nonconvertible preferred stock | $1,628 | $1,628 | - The company's financial assets, primarily cash equivalents and marketable securities, are measured at fair value using Level 1 and Level 2 inputs[43](index=43&type=chunk)[45](index=45&type=chunk) - Series 1 nonconvertible preferred stock is measured at fair value using Level 3 inputs, based on a probability-weighted valuation model, with no change in fair value during the six months ended March 31, 2020[46](index=46&type=chunk)[47](index=47&type=chunk) [4. Marketable Securities](index=12&type=section&id=4.%20Marketable%20Securities) This note provides a breakdown of the company's marketable securities, including their fair values and maturity profiles Marketable Securities (Fair Value in thousands) | Security Type | March 31, 2020 (in thousands) | September 30, 2019 (in thousands) | | :------------------ | :------------- | :----------------- | | U.S. Treasury notes | $168,191 | $170,515 | | Corporate bonds | $146,949 | $111,837 | | Commercial Paper | $45,876 | $66,667 | | Total Fair Value | $361,016 | $349,019 | - As of March 31, 2020, marketable securities primarily consisted of U.S. Treasury notes and corporate bonds, with an aggregate fair value of **$361.016 million**, an increase from **$349.019 million** at September 30, 2019[49](index=49&type=chunk) - Most marketable securities mature within one year, except for certain corporate bonds and U.S. Treasury notes with maturities between one and three years, totaling **$80.099 million** at March 31, 2020[49](index=49&type=chunk) [5. Accrued Expenses and Other Long-Term Liabilities](index=12&type=section&id=5.%20Accrued%20Expenses%20and%20Other%20Long-Term%20Liabilities) This note details the composition and changes in accrued expenses and other long-term liabilities Accrued Expenses and Other Long-Term Liabilities (in thousands) | Category | March 31, 2020 (in thousands) | September 30, 2019 (in thousands) | | :---------------------------------- | :------------- | :----------------- | | Accrued research and development expenses | $2,880 | $6,936 | | Accrued payroll and related expenses | $1,969 | $3,894 | | Accrued clinical manufacturing | $3,819 | $3,447 | | Total Accrued Expenses | $9,807 | $15,920 | | Uncertain tax positions | $764 | $1,746 | | Total Other Long-Term Liabilities | $1,036 | $3,100 | - Total accrued expenses decreased from **$15.920 million** to **$9.807 million**, primarily due to reductions in accrued R&D and payroll expenses[50](index=50&type=chunk) - Other long-term liabilities decreased from **$3.100 million** to **$1.036 million**, largely driven by a reduction in uncertain tax positions and the elimination of accrued rent and capital lease obligations[50](index=50&type=chunk) [6. AbbVie Collaboration](index=13&type=section&id=6.%20AbbVie%20Collaboration) This note describes the company's collaboration agreement with AbbVie, including royalty arrangements and payments received - The company has a Collaborative Development and License Agreement with AbbVie for HCV NS3 and NS3/4A protease inhibitor compounds, including glecaprevir (MAVYRET®/MAVIRET®)[52](index=52&type=chunk)[26](index=26&type=chunk) - Through March 31, 2020, the company received approximately **$975 million** in license payments, preferred stock proceeds, research funding, milestone payments, and royalties from the AbbVie collaboration[52](index=52&type=chunk) - The company receives annually tiered royalties ranging from ten percent up to twenty percent on AbbVie's calendar year net sales of each HCV regimen allocated to the protease inhibitor[53](index=53&type=chunk) [7. Series 1 Nonconvertible Preferred Stock](index=13&type=section&id=7.%20Series%201%20Nonconvertible%20Preferred%20Stock) This note provides details on the outstanding Series 1 nonconvertible preferred stock, carried as a liability at fair value - As of March 31, 2020, **1,931 shares** of Series 1 nonconvertible preferred stock were outstanding and carried at fair value as a liability on the consolidated balance sheet[54](index=54&type=chunk) [8. Stock-Based Awards](index=13&type=section&id=8.%20Stock-Based%20Awards) This note details the company's stock option activity, stock-based compensation expense, and unrecognized compensation costs Stock Option Activity (in thousands, except per share amounts) | Metric | Shares Issuable Under Options (in thousands) | Weighted Average Exercise Price | | :---------------------------------- | :---------------------------- | :------------------------------ | | Outstanding as of September 30, 2019 | 2,967 | $46.54 | | Granted | 684 | $61.80 | | Exercised | (237) | $29.68 | | Forfeited | (100) | $69.61 | | Outstanding as of March 31, 2020 | 3,314 | $50.20 | Stock-Based Compensation Expense (in thousands) | Category | Three Months Ended March 31, 2020 (in thousands) | Three Months Ended March 31, 2019 (in thousands) | Six Months Ended March 31, 2020 (in thousands) | Six Months Ended March 31, 2019 (in thousands) | | :---------------------------------- | :-------------------------------- | :-------------------------------- | :------------------------------ | :------------------------------ | | Research and development | $2,688 | $2,194 | $5,180 | $4,468 | | General and administrative | $2,289 | $2,513 | $4,896 | $6,082 | | Total stock-based compensation expense | $4,977 | $4,707 | $10,076 | $10,550 | | Stock options | $4,441 | $3,949 | $8,777 | $7,853 | | Performance stock units | $16 | $72 | $259 | $1,278 | | rTSRUs | $359 | $493 | $721 | $1,025 | | Restricted stock units | $161 | $193 | $319 | $394 | - As of March 31, 2020, the company had **$47.904 million** of unrecognized stock-based compensation cost, expected to be recognized over a weighted average period of **2.6 years**[64](index=64&type=chunk) [9. Net Income (Loss) Per Share](index=15&type=section&id=9.%20Net%20Income%20(Loss)%20Per%20Share) This note presents the calculation of basic and diluted net income or loss per share for various periods Net Income (Loss) Per Share (in thousands, except per share data) | Metric | Three Months Ended March 31, 2020 (in thousands) | Three Months Ended March 31, 2019 (in thousands) | Six Months Ended March 31, 2020 (in thousands) | Six Months Ended March 31, 2019 (in thousands) | | :---------------------------------- | :-------------------------------- | :-------------------------------- | :------------------------------ | :------------------------------ | | Net income (loss) | $(6,005) | $4,145 | $7,438 | $30,156 | | Weighted average common shares outstanding—basic | 19,922 | 19,549 | 19,836 | 19,487 | | Net income (loss) per share common share—basic | $(0.30) | $0.21 | $0.37 | $1.55 | | Weighted average common shares outstanding—diluted | 19,922 | 21,084 | 20,692 | 20,946 | | Net income (loss) per share common share—diluted | $(0.30) | $0.20 | $0.36 | $1.44 | - Basic and diluted net loss per share for the three months ended March 31, 2020, was **$(0.30)**, compared to net income per share of **$0.21** (basic) and **$0.20** (diluted) in the prior-year period[65](index=65&type=chunk) - For the six months ended March 31, 2020, basic and diluted net income per share were **$0.37** and **$0.36**, respectively, a significant decrease from **$1.55** (basic) and **$1.44** (diluted) in the prior-year period[65](index=65&type=chunk) [10. Income Taxes](index=16&type=section&id=10.%20Income%20Taxes) This note explains the company's income tax expense or benefit, including the impact of tax credits and legislative changes - The company recorded an income tax benefit of **$3.920 million** for the three months ended March 31, 2020, primarily due to a pre-tax loss, federal R&D tax credits, and the release of an uncertain tax liability[67](index=67&type=chunk)[114](index=114&type=chunk) - For the six months ended March 31, 2020, an income tax benefit of **$2.416 million** was recognized, despite pre-tax income, due to federal R&D tax credits, release of an uncertain tax position, and stock award-related activity[67](index=67&type=chunk)[121](index=121&type=chunk) - The CARES Act, enacted in March 2020, allows for net operating loss carrybacks and eliminates certain taxable income limitations, but did not result in material adjustments for the three months ended March 31, 2020[70](index=70&type=chunk) [11. Leases](index=16&type=section&id=11.%20Leases) This note details the company's lease agreements, including right-of-use assets, lease liabilities, and lease expense components - The company has two real estate leases for office and laboratory space in Watertown, Massachusetts, expiring in September 2022 and August 2024, respectively[71](index=71&type=chunk) - In October 2019, an agreement to lease equipment over eighteen-month periods was entered into[73](index=73&type=chunk) Lease Expense Components (in thousands) | Metric | Three Months Ended March 31, 2020 (in thousands) | Six Months Ended March 31, 2020 (in thousands) | | :---------------------------------- | :-------------------------------- | :------------------------------ | | Operating lease cost | $950 | $1,613 | | Variable lease cost | $488 | $967 | | Total lease expense | $1,438 | $2,580 | | Weighted-average remaining lease term - operating leases | 2.70 years | 2.70 years | | Weighted-average discount rate - operating leases | 6.50% | 6.50% | [12. Commitments and Contingencies](index=18&type=section&id=12.%20Commitments%20and%20Contingencies) This note discloses potential future obligations and legal matters that could impact the company's financial position - The company is not currently a party to any litigation but may become subject to legal proceedings in the ordinary course of business, including intellectual property infringement claims[78](index=78&type=chunk) - Indemnification agreements with directors and executive officers have unlimited maximum potential payments, but the company has not incurred material costs to date and does not expect a material effect on its financial position[79](index=79&type=chunk) [ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=19&type=section&id=ITEM%202.%20MANAGEMENT'S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) This section analyzes Enanta Pharmaceuticals' financial condition, results of operations, and liquidity, highlighting business programs, AbbVie royalties, R&D investments, and COVID-19 impacts [Overview](index=19&type=section&id=Overview) This overview introduces Enanta Pharmaceuticals' biotechnology focus, key R&D programs, and primary funding sources - Enanta Pharmaceuticals is a biotechnology company focused on small molecule drugs for viral infections and liver diseases, with key programs in RSV (EDP-938), NASH (EDP-305), and HBV (EDP-514)[83](index=83&type=chunk) - The company's primary funding comes from royalties on glecaprevir (MAVYRET®/MAVIRET®) through its collaboration with AbbVie, supplemented by **$435.4 million** in cash and marketable securities as of March 31, 2020[83](index=83&type=chunk) [Our Wholly Owned Programs](index=19&type=section&id=Our%20Wholly%20Owned%20Programs) This section details the progress and status of Enanta's proprietary drug development programs in RSV, NASH, and HBV - RSV program: EDP-938, an N-protein inhibitor, is in a Phase 2b RSVP study, with plans to initiate two additional RSV studies in pediatric and adult transplant patients in Q4 2020[86](index=86&type=chunk) - NASH program: The Phase 2b ARGON-2 study for EDP-305 was paused due to COVID-19, and Phase 1 development for EDP-297 is planned for Q3 2020, subject to pandemic conditions; the INTREPID Phase 2a study for EDP-305 in PBC did not meet its primary endpoint, shifting focus to NASH[86](index=86&type=chunk) - HBV program: The Phase 1a/1b study for EDP-514 completed SAD/MAD, but Part 2 (nuc-suppressed patients) was paused due to COVID-19; a separate Phase 1b study in viremic HBV patients is planned for Q2 2020[88](index=88&type=chunk) - New discovery efforts were launched for hMPV (January 2020) and SARS-CoV-2 (COVID-19) (March 2020)[84](index=84&type=chunk)[85](index=85&type=chunk) [Our Out-Licensed Products](index=21&type=section&id=Our%20Out-Licensed%20Products) This section describes the company's out-licensed product, glecaprevir, and the royalty revenue derived from its sales - The company out-licensed glecaprevir to AbbVie, which is commercialized as MAVYRET®/MAVIRET® for HCV treatment[89](index=89&type=chunk) - Royalty revenue is derived from annually tiered, double-digit royalties on **50%** of AbbVie's net sales of MAVYRET/MAVIRET, with no further milestone payments expected[89](index=89&type=chunk)[98](index=98&type=chunk) [COVID-19 Update](index=22&type=section&id=COVID-19%20Update) This section outlines the operational and financial impacts of the COVID-19 pandemic on the company's clinical trials and sales estimates - The COVID-19 pandemic has presented substantial challenges, leading to employees working remotely and reduced laboratory spending[93](index=93&type=chunk)[94](index=94&type=chunk) - Enrollment in the ARGON-2 (NASH) and EDP-514 Phase 1b (HBV) clinical trials has been paused, potentially delaying completion[94](index=94&type=chunk) - AbbVie reduced its calendar 2020 HCV sales estimate from **$2.5 billion** to **$2.3 billion**, partly due to lower patient volumes in international markets affected by COVID-19[96](index=96&type=chunk) [Financial Operations Overview](index=23&type=section&id=Financial%20Operations%20Overview) This overview summarizes the company's funding strategy, R&D expense expectations, and revenue uncertainties - The company funds its R&D programs primarily through AbbVie collaboration payments and existing cash, cash equivalents, and marketable securities[97](index=97&type=chunk) - R&D expenses are expected to increase in fiscal 2020 compared to 2019, but the COVID-19 pandemic may slow down development programs and reduce near-term spending[97](index=97&type=chunk) - Future revenues versus expenses are uncertain due to fluctuating AbbVie sales, R&D development risks, and the ongoing impact of COVID-19[97](index=97&type=chunk) [Royalty Revenue](index=23&type=section&id=Royalty%20Revenue) This section analyzes the trends and factors influencing the company's royalty revenue, particularly from AbbVie's HCV sales - Royalty revenue for the three months ended March 31, 2020, was **$27.6 million**, down from **$39.6 million** in the prior-year period[108](index=108&type=chunk) - The decrease is attributed to lower patient volumes in international markets due to COVID-19 and increased competition affecting pricing and market share in the U.S. Managed Medicaid segment[108](index=108&type=chunk) - AbbVie expects its calendar 2020 HCV sales to be approximately **$2.3 billion**[108](index=108&type=chunk) [Internal Programs](index=24&type=section&id=Internal%20Programs) This section clarifies that the company does not expect revenue from its internal product candidates for several years - The company has not generated revenue from its own product sales and does not expect to for at least the next several years, as internal product candidates are in Phase 1 or Phase 2 clinical development[100](index=100&type=chunk) [Operating Expenses](index=24&type=section&id=Operating%20Expenses) This section provides an analysis of the company's research and development and general and administrative expenses Operating Expenses (in thousands) | Expense Type | Three Months Ended March 31, 2020 (in thousands) | Three Months Ended March 31, 2019 (in thousands) | Six Months Ended March 31, 2020 (in thousands) | Six Months Ended March 31, 2019 (in thousands) | | :---------------------------------- | :-------------------------------- | :-------------------------------- | :------------------------------ | :------------------------------ | | Research and development | $32,610 | $34,155 | $65,388 | $69,033 | | General and administrative | $6,884 | $6,780 | $13,805 | $13,932 | | Total operating expenses | $39,494 | $40,935 | $79,193 | $82,965 | [Research and Development Expenses](index=24&type=section&id=Research%20and%20Development%20Expenses) This subsection details the changes in R&D expenses, attributing them to clinical study timing and program progression - R&D expenses decreased by **$1.6 million** for the three months ended March 31, 2020, and by **$3.6 million** for the six months ended March 31, 2020, compared to the same periods in 2019[111](index=111&type=chunk)[118](index=118&type=chunk) - The decrease in liver disease program expenses was due to the timing of clinical studies (ARGON-1 completion, ARGON-2 pause), while virology program expenses increased due to the progression of the HBV program[111](index=111&type=chunk)[118](index=118&type=chunk) - Future R&D expenses are expected to increase as wholly-owned programs advance, but near-term expenses could fluctuate due to COVID-19 impacts on clinical trials[111](index=111&type=chunk) [General and Administrative Expenses](index=24&type=section&id=General%20and%20Administrative%20Expenses) This subsection discusses the stability and future expectations for general and administrative expenses - General and administrative expenses remained relatively flat for both the three and six months ended March 31, 2020, compared to the prior-year periods[112](index=112&type=chunk)[119](index=119&type=chunk) - These expenses are expected to increase in the future due to the expansion of operating activities and costs associated with being a growing publicly traded company[102](index=102&type=chunk) [Other Income (Expense), Net](index=25&type=section&id=Other%20Income%20(Expense),%20Net) This section analyzes the components and changes in the company's other income and expenses, net - Other income (expense), net, decreased by **$0.3 million** for the three months ended March 31, 2020, due to a net decrease in investment income[113](index=113&type=chunk) - For the six months ended March 31, 2020, other income (expense), net, remained relatively flat compared to the prior-year period[120](index=120&type=chunk) [Income Tax (Expense) Benefit](index=25&type=section&id=Income%20Tax%20(Expense)%20Benefit) This section explains the income tax expense or benefit recognized, including the impact of tax credits and pre-tax income/loss - The company recorded an income tax benefit of **$3.9 million** for the three months ended March 31, 2020, driven by a pre-tax loss, R&D tax credits, and the release of an uncertain tax liability[114](index=114&type=chunk) - For the six months ended March 31, 2020, an income tax benefit of **$2.4 million** was recognized, primarily due to federal R&D tax credits, release of an uncertain tax liability, and stock award-related activity, despite reporting pre-tax income[121](index=121&type=chunk) [Results of Operations](index=25&type=section&id=Results%20of%20Operations) This section provides a comparative analysis of the company's financial performance for the specified reporting periods [Comparison of Three Months Ended March 31, 2020 and 2019](index=25&type=section&id=Comparison%20of%20Three%20Months%20Ended%20March%2031,%202020%20and%202019) This subsection compares key financial metrics for the three months ended March 31, 2020, and the prior-year period - Royalty revenue decreased to **$27.6 million** in Q1 2020 from **$39.6 million** in Q1 2019, primarily due to lower HCV patient volumes in international markets affected by COVID-19 and increased competition[108](index=108&type=chunk) - Research and development expenses decreased by **$1.6 million**, mainly due to the timing of liver disease clinical studies, while virology program expenses increased[111](index=111&type=chunk) - The company reported a net loss of **$6.0 million** for Q1 2020, compared to a net income of **$4.1 million** in Q1 2019[15](index=15&type=chunk) [Comparison of the Six Months Ended March 31, 2020 and 2019](index=26&type=section&id=Comparison%20of%20the%20Six%20Months%20Ended%20March%2031,%202020%20and%202019) This subsection compares key financial metrics for the six months ended March 31, 2020, and the prior-year period - Royalty revenue decreased by **$29.3 million** to **$80.2 million** for the six months ended March 31, 2020, compared to **$109.5 million** in the prior-year period, driven by lower HCV sales due to increased competition and patient volumes[115](index=115&type=chunk) - Research and development expenses decreased by **$3.6 million**, with a decrease in liver disease program expenses offset by an increase in virology program expenses[118](index=118&type=chunk) - Net income for the six months ended March 31, 2020, was **$7.4 million**, a significant decrease from **$30.2 million** in the prior-year period[15](index=15&type=chunk) [Liquidity and Capital Resources](index=27&type=section&id=Liquidity%20and%20Capital%20Resources) This section assesses the company's ability to meet its financial obligations, detailing cash, marketable securities, and cash flow activities - As of March 31, 2020, the company had **$435.4 million** in cash, cash equivalents, and short-term and long-term marketable securities, which are believed to be sufficient for anticipated cash requirements for the foreseeable future despite COVID-19[122](index=122&type=chunk)[127](index=127&type=chunk) - Net cash provided by operating activities decreased by **$33.3 million** for the six months ended March 31, 2020, primarily due to lower net income[124](index=124&type=chunk) - Net cash provided by financing activities increased due to higher proceeds from stock option exercises and lower withholding tax payments for share-based awards[126](index=126&type=chunk) [Off-Balance Sheet Arrangements](index=28&type=section&id=Off-Balance%20Sheet%20Arrangements) This section confirms the absence of off-balance sheet financing activities or variable interest entities - The company does not engage in any off-balance sheet financing activities and has no interest in variable interest entities[128](index=128&type=chunk) [Contractual Obligations and Commitments](index=29&type=section&id=Contractual%20Obligations%20and%20Commitments) This section notes the stability of the company's contractual commitments and obligations since the last annual report - There were no material changes to the company's total contractual commitments and obligations during the six months ended March 31, 2020, as previously disclosed in its 2019 Annual Report on Form 10-K[130](index=130&type=chunk) [Critical Accounting Policies](index=29&type=section&id=Critical%20Accounting%20Policies) This section highlights any material changes to the company's critical accounting policies, specifically the adoption of ASC 842 - No material changes to significant accounting policies have occurred since September 30, 2019, other than the impact of adopting ASC 842 in the first quarter of fiscal 2020[131](index=131&type=chunk) [Recently Issued Accounting Pronouncements](index=29&type=section&id=Recently%20Issued%20Accounting%20Pronouncements) This section refers to Note 2 for details on recently issued accounting pronouncements and their potential impact - A description of recently issued accounting pronouncements that may potentially impact the company's financial position and results of operations is set forth in Note 2 to the consolidated financial statements[132](index=132&type=chunk) [ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=29&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) This section assesses the company's market risk exposure, primarily interest rate sensitivity, concluding no material impact from significant interest rate changes - As of March 31, 2020, the company held **$435.4 million** in cash, cash equivalents, and marketable securities, including money market funds, agency securities, commercial paper, treasury notes, and corporate bonds[133](index=133&type=chunk) - Due to the nature of these investments, a **100 basis point** change in market interest rates is not expected to have a material impact on the company's financial condition or results of operations[133](index=133&type=chunk) [ITEM 4. CONTROLS AND PROCEDURES](index=29&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) This section confirms the effectiveness of disclosure controls and procedures and reports no material changes in internal control over financial reporting - Management, including the principal executive and financial officers, concluded that the company's disclosure controls and procedures were effective as of March 31, 2020[135](index=135&type=chunk) - There were no changes in internal control over financial reporting during the three months ended March 31, 2020, that materially affected or are reasonably likely to materially affect internal control over financial reporting[136](index=136&type=chunk) PART II—OTHER INFORMATION [ITEM 1A. RISK FACTORS](index=30&type=section&id=ITEM%201A.%20RISK%20FACTORS) This section details significant risks, including reliance on AbbVie, intense competition, COVID-19 impacts, development challenges, regulatory hurdles, and intellectual property concerns - The company's financial prospects are highly dependent on AbbVie's sales of MAVYRET/MAVIRET, which are subject to competitive pressures, pricing declines, and potential reductions in patient volumes due to the COVID-19 pandemic[139](index=139&type=chunk)[141](index=141&type=chunk) - The ongoing COVID-19 pandemic has led to pauses in recruitment for the ARGON-2 (NASH) and EDP-514 Phase 1b (HBV) studies, and may cause further delays in clinical trials and impact royalty revenues[143](index=143&type=chunk)[145](index=145&type=chunk) - The company faces substantial competition in HCV, NASH, RSV, and HBV markets, with many competitors having greater resources and more advanced product candidates[141](index=141&type=chunk)[143](index=143&type=chunk) [Risks Related to Our Business](index=30&type=section&id=Risks%20Related%20to%20Our%20Business) This subsection highlights business-specific risks, including dependence on AbbVie, market competition, and COVID-19 impacts - The company's financial prospects are heavily reliant on AbbVie's success in selling MAVYRET/MAVIRET, over which Enanta has no control, and AbbVie may act in its own best interest[139](index=139&type=chunk)[141](index=141&type=chunk) - The company faces substantial competition in HCV, NASH, RSV, and HBV markets from companies with greater resources and more advanced product candidates[141](index=141&type=chunk)[143](index=143&type=chunk) - The ongoing COVID-19 pandemic may adversely affect business operations, clinical trials (e.g., paused ARGON-2 and EDP-514 studies), and AbbVie's HCV sales[143](index=143&type=chunk)[145](index=145&type=chunk) [Risks Related to Development, Clinical Testing and Regulatory Approval of Our Product Candidates](index=36&type=section&id=Risks%20Related%20to%20Development,%20Clinical%20Testing%20and%20Regulatory%20Approval%20of%20Our%20Product%20Candidates) This subsection addresses risks associated with drug development, clinical trials, potential side effects, and regulatory approval processes - Clinical drug development is lengthy, expensive, and uncertain, with potential for delays due to various factors including CRO negotiations, regulatory approvals, patient recruitment, and the COVID-19 pandemic[152](index=152&type=chunk) - Product candidates (EDP-305, EDP-938, EDP-514) may have undesirable side effects, which could delay or prevent marketing approval, or lead to market withdrawal or safety warnings if approved[154](index=154&type=chunk)[157](index=157&type=chunk) - Regulatory approval processes are lengthy, unpredictable, and subject to substantial discretion by authorities, with no guarantee of timely approval for any product candidates[159](index=159&type=chunk) [Risks Related to Commercialization of Our Product Candidates](index=40&type=section&id=Risks%20Related%20to%20Commercialization%20of%20Our%20Product%20Candidates) This subsection covers risks concerning product commercialization, including pricing regulations, reimbursement, and market acceptance - Unfavorable pricing regulations, third-party reimbursement practices, and healthcare reform initiatives (e.g., ACA, drug pricing scrutiny) could harm the business by limiting coverage and reimbursement for products[163](index=163&type=chunk)[165](index=165&type=chunk) - Foreign governments often impose strict price controls, which can delay commercial launch and negatively impact revenues from product sales[165](index=165&type=chunk) - Commercial success depends on significant market acceptance among physicians, patients, and healthcare payors, which is influenced by efficacy, safety, pricing, reimbursement, and competition[167](index=167&type=chunk) [Risks Related to Our Dependence on Third Parties](index=43&type=section&id=Risks%20Related%20to%20Our%20Dependence%20on%20Third%20Parties) This subsection details risks arising from reliance on third parties for collaborations, manufacturing, and clinical trial conduct - The company may not be successful in establishing new product collaborations, which could adversely affect its ability to develop and commercialize product candidates[173](index=173&type=chunk) - Reliance on third-party manufacturers for product candidate supplies carries risks, including regulatory compliance, quality control, supply chain disruptions (e.g., COVID-19 in China), and timely delivery[169](index=169&type=chunk)[171](index=171&type=chunk) - Reliance on third parties (CROs, hospitals) to monitor and conduct clinical trials means less control over timing and cost, and potential for delays or data rejection if they fail to perform as required[172](index=172&type=chunk) [Risks Related to Our Intellectual Property Rights](index=45&type=section&id=Risks%20Related%20to%20Our%20Intellectual%20Property%20Rights) This subsection addresses risks concerning patent protection, intellectual property infringement claims, and trade secret confidentiality - The company may be unsuccessful in obtaining or maintaining adequate patent protection for its product candidates, and issued patents could be found invalid or unenforceable if challenged[175](index=175&type=chunk)[177](index=177&type=chunk) - Claims that the company's product candidates infringe third-party intellectual property rights could result in costly litigation, require substantial time and money to resolve, or necessitate expensive licenses[178](index=178&type=chunk) - Confidentiality agreements with employees and third parties may not prevent unauthorized disclosure of trade secrets and other proprietary information, potentially compromising the company's competitive position[180](index=180&type=chunk)[182](index=182&type=chunk) [Risks Related to Our Industry](index=49&type=section&id=Risks%20Related%20to%20Our%20Industry) This subsection covers industry-specific risks such as product liability, system security breaches, and healthcare regulatory compliance - The company faces an inherent risk of product liability lawsuits from clinical testing and commercialization, which could result in substantial liabilities, decreased demand, and reputational harm[187](index=187&type=chunk) - Internal computer systems or those of collaborators may fail or suffer security breaches, leading to disruptions in development programs, data loss, and potential liability[188](index=188&type=chunk) - Relationships with customers and third-party payors are subject to complex anti-kickback, fraud and abuse, and other healthcare laws, non-compliance with which could lead to criminal sanctions, civil penalties, and exclusion from government programs[189](index=189&type=chunk) [Risks Related to Our Common Stock](index=51&type=section&id=Risks%20Related%20to%20Our%20Common%20Stock) This subsection discusses factors affecting common stock price volatility, acquisition difficulties, and dividend policy - The company's stock price has been and is likely to remain volatile, influenced by clinical trial results, AbbVie's commercial actions, competition, regulatory developments, and general market conditions, potentially leading to substantial losses for stockholders[192](index=192&type=chunk) - Provisions in corporate charter documents and Delaware law could make an acquisition of the company more difficult and may prevent attempts by stockholders to replace or remove current management[194](index=194&type=chunk) - The company does not anticipate paying cash dividends for the foreseeable future, meaning investors must rely on stock price appreciation for returns[196](index=196&type=chunk) [ITEM 6. EXHIBITS](index=54&type=section&id=ITEM%206.%20EXHIBITS) This section lists exhibits filed with the Quarterly Report on Form 10-Q, including officer certifications and Inline XBRL financial statements - Exhibit 3.1 and 3.2 refer to the Restated Certificate of Incorporation and Amended and Restated Bylaws, respectively[199](index=199&type=chunk) - Exhibits 31.1, 31.2, and 32.1 are certifications from the Chief Executive Officer and Chief Financial Officer as required by the Securities Exchange Act and Sarbanes-Oxley Act[200](index=200&type=chunk)[201](index=201&type=chunk) - Exhibits 101 and 104 include the financial statements formatted in Inline XBRL and the Cover Page Interactive Data File[202](index=202&type=chunk)[203](index=203&type=chunk) [SIGNATURE](index=55&type=section&id=SIGNATURE) This section contains the official signature of Enanta Pharmaceuticals, Inc., by its Chief Financial Officer, certifying the report's authorization and filing - The report was signed on May 11, 2020, by Paul J. Mellett, Chief Financial Officer (Principal Financial and Accounting Officer) of Enanta Pharmaceuticals, Inc[209](index=209&type=chunk)

From Chemistry to Cures ENANTA Pharmaceuticals 1 A Phase 2 dose ranging, randomized, double-blind and placebo-controlled study of EDP-305 in subjects with primary biliary cholangitis (PBC) with or without an inadequate response to ursodeoxycholic acid (UDCA) Topline Results 06MAY2020 Forward Looking Statements Disclaimer This presentation contains forward-looking statements concerning our plans, objectives and expectations for EDP-305 and its development for NASH. Any statements contained herein that are no ...

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, 2019 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) 2834 (Primary Standard Industrial Classification Code Number) DELAWARE 04-320509 ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended September 30, 2019 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 001-35839 | --- | --- | --- | |-----------------------------------------|-----------------------------------------------------------------|------------------------------------------ ...

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 March 31, 2019 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) 2834 (Primary Standard Industrial Classification Code Number) DELAWARE 04-3205099 ( ...