0001564590-21-042612.txt : 20210809 0001564590-21-042612.hdr.sgml : 20210809 20210809160436 ACCESSION NUMBER: 0001564590-21-042612 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 59 CONFORMED PERIOD OF REPORT: 20210630 FILED AS OF DATE: 20210809 DATE AS OF CHANGE: 20210809 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ENANTA PHARMACEUTICALS INC CENTRAL INDEX KEY: 0001177648 STANDARD INDUSTRIAL CLASSIFICATION: PHARMACEUTICAL PREPARATIONS [2834] IRS NUMBER: 000000000 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-35839 FILM NUMBER: 211156416 BUSINESS ADDRESS: STREET 1: 500 ARSENAL STREET CITY: WATERTOWN STATE: MA ZIP: 02472 BUSINESS PHONE: 617 607 0800 MAIL ADDRESS: STREET 1: 500 ARSENAL STREET CITY: WATERTOWN STATE: MA ZIP: 02472 10-Q 1 enta-10q_20210630.htm Q3 2021 10-Q enta-10q_20210630.htm
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2020-06-30

 

  

 

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 June 30, 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 organization)

(Primary Standard Industrial

Classification Code Number)

(I.R.S. Employer

Identification Number)

500 Arsenal Street

Watertown, Massachusetts 02472

(617) 607-0800

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

 

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, par value $0.01 per share

ENTA

NASDAQ

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes      No  

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes      No  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

 

  

Accelerated filer

 

Non-accelerated filer

 

☐  

  

Smaller reporting company

 

Emerging growth company

 

 

 

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.      

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes      No  

As of July 29, 2021, the registrant had 20,214,850 shares of common stock, $0.01 par value per share, outstanding.

 

 

 


 

 

ENANTA PHARMACEUTICALS, INC.

FORM 10-Q — Quarterly Report

For the Quarterly Period Ended June 30, 2021

TABLE OF CONTENTS

 

 

NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q, or Form 10-Q, contains forward-looking statements concerning our business, operations and financial performance and condition, as well as our plans, objectives and expectations for our business operations and financial performance and condition. Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “aim,” “anticipate,” “assume,” “believe,” “contemplate,” “continue,” “could,” “due,” “estimate,” “expect,” “goal,” “intend,” “may,” “objective,” “plan,” “predict,” “potential,” “positioned,” “seek,” “should,” “target,” “will,” “would,” and other similar expressions that are predictions of or indicate future events and future trends, or the negative of these terms or other comparable terminology. These forward-looking statements include, but are not limited to, statements about overall trends, royalty revenue trends, research and clinical development plans, liquidity and capital needs and other statements of expectations, beliefs, future plans and strategies, anticipated events or trends and similar expressions. These forward-looking statements are based on our management’s current expectations, estimates, forecasts and projections about our business and the industry in which we operate and our management’s beliefs and assumptions. These forward-looking statements are not guarantees of future performance or development and involve known and unknown risks, uncertainties and other factors that are in some cases beyond our control. As a result, any or all of our forward-looking statements in this Form 10-Q may turn out to be inaccurate. Factors that may cause actual results to differ materially from current expectations include, among other things, those listed under “Risk Factors” and discussed elsewhere in this Form 10-Q. These forward-looking statements speak only as of the date of this Form 10-Q. Except as required by law, we assume no obligation to update or revise these forward-looking statements for any reason, even if new information becomes available in the future. You should, however, review the factors and risks we describe in the reports we will file from time to time with the SEC after the date of this Form 10-Q.

2


 

PART I—FINANCIAL INFORMATION

ITEM 1.

CONSOLIDATED FINANCIAL STATEMENTS

ENANTA PHARMACEUTICALS, INC.

CONSOLIDATED BALANCE SHEETS

(unaudited)

(in thousands, except per share amounts)

 

 

 

June 30,

 

 

September 30,

 

 

 

2021

 

 

2020

 

Assets

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

4,601

 

 

$

87,131

 

Short-term marketable securities

 

 

252,223

 

 

 

299,518

 

Accounts receivable

 

 

21,624

 

 

 

23,492

 

Prepaid expenses and other current assets

 

 

12,137

 

 

 

13,655

 

Income tax receivable

 

 

30,570

 

 

 

13,041

 

Total current assets

 

 

321,155

 

 

 

436,837

 

Long-term marketable securities

 

 

115,706

 

 

 

32,634

 

Property and equipment, net

 

 

6,613

 

 

 

8,596

 

Deferred tax assets

 

 

345

 

 

 

345

 

Operating lease, right-of-use assets

 

 

5,917

 

 

 

7,020

 

Restricted cash

 

 

608

 

 

 

608

 

Other long-term assets

 

 

92

 

 

 

92

 

Total assets

 

$

450,436

 

 

$

486,132

 

Liabilities and Stockholders' Equity

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

5,895

 

 

$

5,737

 

Accrued expenses and other current liabilities

 

 

17,695

 

 

 

14,159

 

Operating lease liabilities

 

 

5,034

 

 

 

4,261

 

Total current liabilities

 

 

28,624

 

 

 

24,157

 

Operating lease liabilities, net of current portion

 

 

1,637

 

 

 

3,838

 

Series 1 nonconvertible preferred stock

 

 

1,479

 

 

 

1,479

 

Other long-term liabilities

 

 

846

 

 

 

1,078

 

Total liabilities

 

 

32,586

 

 

 

30,552

 

Commitments and contingencies (Note 11)

 

 

 

 

 

 

 

 

Stockholders' equity:

 

 

 

 

 

 

 

 

Common stock; $0.01 par value per share, 100,000 shares authorized; 20,211 and

   20,077 shares issued and outstanding at June 30, 2021 and

   September 30, 2020, respectively

 

 

202

 

 

 

201

 

Additional paid-in capital

 

 

344,737

 

 

 

326,963

 

Accumulated other comprehensive income (loss)

 

 

(264

)

 

 

844

 

Retained earnings

 

 

73,175

 

 

 

127,572

 

Total stockholders' equity

 

 

417,850

 

 

 

455,580

 

Total liabilities and stockholders' equity

 

$

450,436

 

 

$

486,132

 

 

The accompanying notes are an integral part of these consolidated financial statements.

3


 

ENANTA PHARMACEUTICALS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

(in thousands, except per share amounts)

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Royalty revenue

 

$

21,624

 

 

$

18,653

 

 

$

73,499

 

 

$

98,842

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

46,994

 

 

 

34,682

 

 

 

125,165

 

 

 

100,070

 

General and administrative

 

 

8,477

 

 

 

6,823

 

 

 

24,180

 

 

 

20,628

 

Total operating expenses

 

 

55,471

 

 

 

41,505

 

 

 

149,345

 

 

 

120,698

 

Loss from operations

 

 

(33,847

)

 

 

(22,852

)

 

 

(75,846

)

 

 

(21,856

)

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income (expense), net

 

 

439

 

 

 

1,445

 

 

 

1,661

 

 

 

5,471

 

Total other income (expense), net

 

 

439

 

 

 

1,445

 

 

 

1,661

 

 

 

5,471

 

Loss before income taxes

 

 

(33,408

)

 

 

(21,407

)

 

 

(74,185

)

 

 

(16,385

)

Income tax benefit

 

 

9,384

 

 

 

7,142

 

 

 

19,788

 

 

 

9,558

 

Net loss

 

$

(24,024

)

 

$

(14,265

)

 

$

(54,397

)

 

$

(6,827

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

(1.19

)

 

$

(0.71

)

 

$

(2.70

)

 

$

(0.34

)

Diluted

 

$

(1.19

)

 

$

(0.71

)

 

$

(2.70

)

 

$

(0.34

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

20,201

 

 

 

20,020

 

 

 

20,155

 

 

 

19,897

 

Diluted

 

 

20,201

 

 

 

20,020

 

 

 

20,155

 

 

 

19,897

 

 

The accompanying notes are an integral part of these consolidated financial statements.

4


 

ENANTA PHARMACEUTICALS, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(unaudited)

(in thousands)

 

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Net loss

 

$

(24,024

)

 

$

(14,265

)

 

$

(54,397

)

 

$

(6,827

)

Other comprehensive income (loss):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net unrealized gains (losses) on marketable securities, net of tax of $0, $271, $0 and $418

 

 

(319

)

 

 

850

 

 

$

(1,108

)

 

$

1,312

 

Total other comprehensive income (loss), net of tax

 

 

(319

)

 

 

850

 

 

 

(1,108

)

 

 

1,312

 

Comprehensive loss

 

$

(24,343

)

 

$

(13,415

)

 

$

(55,505

)

 

$

(5,515

)

 

The accompanying notes are an integral part of these consolidated financial statements.

5


 

ENANTA PHARMACEUTICALS, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(unaudited)

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

Other

 

 

 

 

 

 

Total

 

 

 

Common Stock

 

 

Paid-In

 

 

Comprehensive

 

 

Retained

 

 

Stockholders'

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Income

 

 

Earnings

 

 

Equity

 

Balances at September 30, 2019

 

 

19,703

 

 

$

197

 

 

$

298,409

 

 

$

146

 

 

$

163,740

 

 

$

462,492

 

Exercise of stock options

 

 

76

 

 

 

1

 

 

 

2,305

 

 

 

 

 

 

 

 

 

2,306

 

Vesting of restricted stock units, net of

   withholding

 

 

31

 

 

 

 

 

 

(1,140

)

 

 

 

 

 

 

 

 

(1,140

)

Stock-based compensation expense

 

 

 

 

 

 

 

 

5,098

 

 

 

 

 

 

 

 

 

5,098

 

Other comprehensive income, net of tax

 

 

 

 

 

 

 

 

 

 

 

88

 

 

 

 

 

 

88

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

13,443

 

 

 

13,443

 

Balances at December 31, 2019

 

 

19,810

 

 

$

198

 

 

$

304,672

 

 

$

234

 

 

$

177,183

 

 

$

482,287

 

Exercise of stock options

 

 

160

 

 

 

2

 

 

 

4,714

 

 

 

 

 

 

 

 

 

4,716

 

Vesting of restricted stock units, net of

   withholding

 

 

16

 

 

 

 

 

 

(358

)

 

 

 

 

 

 

 

 

(358

)

Stock-based compensation expense

 

 

 

 

 

 

 

 

4,977

 

 

 

 

 

 

 

 

 

4,977

 

Other comprehensive income, net of tax

 

 

 

 

 

 

 

 

 

 

 

374

 

 

 

 

 

 

374

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(6,005

)

 

 

(6,005

)

Balances at March 31, 2020

 

 

19,986

 

 

 

200

 

 

 

314,005

 

 

 

608

 

 

 

171,178

 

 

 

485,991

 

Exercise of stock options

 

 

84

 

 

 

1

 

 

 

3,225

 

 

 

 

 

 

 

 

 

3,226

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

4,755

 

 

 

 

 

 

 

 

 

4,755

 

Other comprehensive income, net of tax

 

 

 

 

 

 

 

 

 

 

 

850

 

 

 

 

 

 

850

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(14,265

)

 

 

(14,265

)

Balances at June 30, 2020

 

 

20,070

 

 

 

201

 

 

 

321,985

 

 

 

1,458

 

 

 

156,913

 

 

 

480,557

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

Other

 

 

 

 

 

 

Total

 

 

 

Common Stock

 

 

Paid-In

 

 

Comprehensive

 

 

Retained

 

 

Stockholders'

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Income (Loss)

 

 

Earnings

 

 

Equity

 

Balances at September 30, 2020

 

 

20,077

 

 

$

201

 

 

$

326,963

 

 

$

844

 

 

$

127,572

 

 

$

455,580

 

Exercise of stock options

 

 

33

 

 

 

 

 

 

833

 

 

 

 

 

 

 

 

 

833

 

Vesting of restricted stock units, net of

   withholding

 

 

32

 

 

 

 

 

 

(534

)

 

 

 

 

 

 

 

 

(534

)

Stock-based compensation expense

 

 

 

 

 

 

 

 

4,883

 

 

 

 

 

 

 

 

 

4,883

 

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

(439

)

 

 

 

 

 

(439

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(8,328

)

 

 

(8,328

)

Balances at December 31, 2020

 

 

20,142

 

 

$

201

 

 

$

332,145

 

 

$

405

 

 

$

119,244

 

 

$

451,995

 

Exercise of stock options

 

 

43

 

 

 

1

 

 

 

1,151

 

 

 

 

 

 

 

 

 

1,152

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

5,280

 

 

 

 

 

 

 

 

 

5,280

 

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

(350

)

 

 

 

 

 

 

(350

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(22,045

)

 

 

(22,045

)

Balances at March 31, 2021

 

 

20,185

 

 

 

202

 

 

 

338,576

 

 

 

55

 

 

 

97,199

 

 

 

436,032

 

Exercise of stock options

 

 

26

 

 

 

 

 

 

686

 

 

 

 

 

 

 

 

 

686

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

5,475

 

 

 

 

 

 

 

 

 

5,475

 

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

(319

)

 

 

 

 

 

(319

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(24,024

)

 

 

(24,024

)

Balances at June 30, 2021

 

 

20,211

 

 

 

202

 

 

 

344,737

 

 

 

(264

)

 

 

73,175

 

 

 

417,850

 

 

The accompanying notes are an integral part of these consolidated financial statements

6


 

ENANTA PHARMACEUTICALS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

(in thousands)

 

 

 

 

 

 

Nine Months Ended

 

 

 

June 30,

 

 

 

2021

 

 

2020

 

Cash flows from operating activities

 

 

 

 

 

 

 

 

Net loss

 

$

(54,397

)

 

$

(6,827

)

Adjustments to reconcile net income to net cash provided by

   operating activities:

 

 

 

 

 

 

 

 

Stock-based compensation expense

 

 

15,638

 

 

 

14,830

 

Depreciation and amortization expense

 

 

2,528

 

 

 

2,735

 

Deferred income taxes

 

 

 

 

 

(4,366

)

Premium paid on marketable securities

 

 

(3,427

)

 

 

(3,094

)

(Accretion) amortization of (discount) premium on marketable securities

 

 

1,516

 

 

 

(95

)

Other non-cash items

 

 

 

 

 

(51

)

Change in operating assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable

 

 

1,868

 

 

 

32,660

 

Prepaid expenses and other current assets

 

 

1,518

 

 

 

(5,161

)

Income tax receivable

 

 

(17,529

)

 

 

(4,268

)

Operating lease, right-of-use assets

 

 

4,019

 

 

 

2,182

 

Accounts payable

 

 

195

 

 

 

(672

)

Accrued expenses

 

 

3,671

 

 

 

(1,936

)

Operating lease liabilities

 

 

(4,343

)

 

 

(2,446

)

Other long-term liabilities

 

 

(232

)

 

 

(942

)

Net cash provided by (used in) operating activities

 

 

(48,975

)

 

 

22,549

 

Cash flows from investing activities

 

 

 

 

 

 

 

 

Purchase of marketable securities

 

 

(307,949

)