Skip to main content

Jefferies Financial Group Inc(JEF-N)

Today's Change
Real-Time Last Update Last Sale Cboe BZX Real-Time

Why Shares of Enanta Pharmaceuticals Are Dropping Tuesday

Motley Fool - Tue Aug 8, 2023

What happened

Shares of Enanta Pharmaceuticals(NASDAQ: ENTA) were down more than 9% as of 11:45 a.m. on Tuesday after the clinical-stage biotech released fiscal third-quarter earnings on Tuesday. The stock is down more than 62% so far this year.

So what

Enanta focuses on finding small-molecule drugs to treat viral infections and liver diseases. The company's quarterly revenue, all from royalties regarding sales of Mavyret, a hepatitis C therapy sold by AbbVie, fell 3% year over year to $18.9 million. Enanta reported a net loss of $39.1 million, or an earnings per share (EPS) loss of $1.86, compared to a loss of $31.7 million for an EPS loss of $1.53 in the same quarter a year ago.

The company cited increased clinical trial costs for the greater net loss. It said it had $392.5 million in cash, enough to fund operations into midyear in fiscal 2027.

In response to the earnings report, Jefferies downgraded its position on the company from buy to hold, and JMP Securities downgraded its price target for Enanta from $65 to $42.

Now what

The drop was a bit steep considering that the company, as a clinical-stage biotech, isn't expected to be profitable yet. The company had some positive phase 1 trial news regarding its respiratory syncytial virus (RSV) therapy EDP-323.

The company said encouraging safety and tolerability results for the drug means Enanta will start a phase 2 trial to see if it is effective as a monotherapy or combination therapy as an antiviral to treat RSV.

Enanta has a fairly robust pipeline of eight programs. Besides EDP-323, the company said that EDP-235, its oral protease inhibitor designed as a COVID antiviral, showed an improvement in 14 symptoms compared to a placebo in a recently completed phase 2 trial.

10 stocks we like better than Enanta Pharmaceuticals
When our analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

They just revealed what they believe are the ten best stocks for investors to buy right now... and Enanta Pharmaceuticals wasn't one of them! That's right -- they think these 10 stocks are even better buys.

See the 10 stocks

*Stock Advisor returns as of August 1, 2023

Jim Halley has positions in AbbVie. The Motley Fool has positions in and recommends Jefferies Financial Group. The Motley Fool has a disclosure policy.

Paid Post: Content produced by Motley Fool. The Globe and Mail was not involved, and material was not reviewed prior to publication.

More from The Globe