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Edited Transcript of ENTA earnings conference call or presentation 7-Aug-18 8:30pm GMT

Q3 2018 Enanta Pharmaceuticals Inc Earnings Call

WATERTOWN Sep 4, 2018 (Thomson StreetEvents) -- Edited Transcript of Enanta Pharmaceuticals Inc earnings conference call or presentation Tuesday, August 7, 2018 at 8:30:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Carol Miceli

Enanta Pharmaceuticals, Inc. - Director of IR

* Jay R. Luly

Enanta Pharmaceuticals, Inc. - President, CEO & Director

* Paul J. Mellett

Enanta Pharmaceuticals, Inc. - Senior VP of Finance & Administration and CFO

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Conference Call Participants

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* Brian Corey Abrahams

RBC Capital Markets, LLC, Research Division - Senior Analyst

* Jay Olson

Oppenheimer & Co. Inc., Research Division - Executive Director & Senior Analyst

* Jonathan Patrick Wolleben

JMP Securities LLC, Research Division - Associate

* Yasmeen Rahimi

Roth Capital Partners, LLC, Research Division - MD & Senior Research Analyst

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Presentation

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Operator [1]

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Good afternoon. My name is Jason, and I will be your conference operator today. At this time, I would like to welcome everyone to the Enanta Pharmaceuticals Third Quarter Financial Results Conference Call. (Operator Instructions)

I would now like to turn the call over to our host, Ms. Carol Miceli. Ma'am, you may begin your conference.

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Carol Miceli, Enanta Pharmaceuticals, Inc. - Director of IR [2]

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Thank you, Jason and thanks for joining us this afternoon. The news release with our financial results was issued this afternoon and is available on our website. On the call today is Dr. Jay Luly, President and Chief Executive Officer; Paul Mellett, our Chief Financial Officer; and other members of Enanta's senior management team.

Before we begin with our formal remarks, we want to remind you that we will be making forward-looking statements, including plans and expectations with respect to our product candidates and financial projections, all of which involve certain assumptions, risks and uncertainties that are beyond our control and could cause our actual developments and results to differ materially from these statements. A description of these risks and uncertainties is in our most recent Form 10-Q and other periodic reports filed with the SEC.

In addition, Enanta does not undertake any obligation to update any forward-looking statements made during this call.

I'd now like to turn the call over to Dr. Jay Luly, President and CEO.

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Jay R. Luly, Enanta Pharmaceuticals, Inc. - President, CEO & Director [3]

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Thank you, Carol. Good afternoon, everyone. Thank you for joining us today. Let me begin by providing updates on our key development programs and then Paul Mellett will discuss our financial results for the quarter.

First though I want to comment on our increasing royalty revenue from AbbVie related to MAVIRET, currently the best-selling HCV drug in the world. As well as today's announcements from Express Scripts that it has excluded MAVIRET from its HCV formulary for 2019.

As a preliminary matter, this announcement only affects the formulary for 2019, has no impact on MAVIRET access in 2018. More importantly, AbbVie has advised us that Express Scripts' sales represent only a small percentage of MAVIRET sales in the U.S. this year. And that AbbVie does not believe there will be any significant change in market access for MAVIRET in the U.S. in 2019 compared to 2018.

On AbbVie's recent financial results conference call, management stated that MAVIRET has now achieved a leadership position in the U.S. as well as a strong leadership position in a number of other major markets including Japan, Germany, Spain, and Italy among others. Royalties on MAVIRET from the quarter ended June 30 moved into higher royalty-rate tiers, which increased our royalties to $57 million from $44 million in the prior quarter, an increase of 30% quarter-to-quarter. Based on AbbVie's published guidance of $850 million for the quarter ending September 30, we expect our royalties earned will continue to increase due to the cumulative net sales during the calendar year, advancing Enanta into an even higher royalty tier under our agreement with AbbVie. Paul will discuss this in more detail in a few minutes.

I'd like to turn now to our research and development efforts, beginning with our RSV program, which recently completed dosing in the Phase I trial and has additional near-term milestones. EDP-938 is our lead compound being development for the treatment of RSV, or respiratory syncytial virus infection. RSV infection is an area of high unmet need, particularly for infants less than 2 years of age and immunocompromised adults. Currently, the only approved agent for the treatment of RSV is ribavirin, which is not recommended for infants and is infrequently used in adult patient populations. EDP-938 is a potent non-fusion inhibitor targeting the N protein in RSV and the only N inhibitor in clinical development today. EDP-938 works by inhibiting the replication machinery of the virus and as a result, has the potential to be more effective at later stages of infection than fusion inhibitors. This is an important factor as patients with RSV would generally not receive medical care immediately after infection. As a result, drugs with mechanisms that target early events of infection such as fusion inhibitors, may be dosed too late to treat the infection in real-world settings.

This afternoon, we announced preliminary Phase I results that demonstrated that EDP-938 was generally safe and well tolerated and support its progression to Phase II. We hope to report more detailed data from the Phase I study later this year at an appropriate medical conference. As in all clinical trials, safety and efficacy are the 2 key unknowns in the success or failure of a study. For our RSV program, we believe the Phase I trial is an important derisking event for the program from a safety perspective, as RSV is one of the few indications where the 7-day dosing duration in the MAD portion of the Phase I study is comparable in dosing duration to our planned Phase IIa challenge study and will likely be applicable to Phase IIb and Phase III studies as well.

In the fourth calendar quarter of this year, our next step in the program would be to begin the Phase IIa human challenge study in healthy adults inoculated with RSV. Moving to NASH and PBC, enrollment continues for our 2 Phase II clinical studies with EDP-305, our FXR agonist candidate. In NASH, our Phase II clinical study named ARGON-1 is a 12-week randomized double-blind placebo-controlled study evaluating the safety, tolerability, pharmacokinetics and efficacy of EDP-305 in subjects with NASH. This primary endpoint [says] proof-of-concept study will assess safety and changes in alanine transaminase, or ALT, levels, an important measure of liver injury in NASH. The study will also focus on evaluating multiple secondary endpoints that play a significant role in NASH, including [imaging] and noninvasive markers of fibrosis and steatosis.

In PBC, our Phase II clinical study named INTREPID is a 12-week randomized double-blind placebo-controlled study evaluating the safety, tolerability, pharmacokinetics and efficacy of EDP-305 in subjects with PBC, with or without an inadequate response to ursodeoxycholic acid, a currently available chronic treatment for PBC. The efficacy of EDP-305 will be assessed by evaluating reductions in levels of alkaline phosphatase, or ALP, versus placebo. These studies will continue to enroll throughout the remainder of 2018 and into 2019. We anticipate sharing preliminary data in mid-2019.

Let's move on to HBV. It's been estimated that 250 million people worldwide are infected with HBV and there is no effective cure. Our HBV program continues to move ahead and is generating promising inhibitors of the core protein. Core inhibitor, sometimes referred to as capsid assembly modulators, or core protein allosteric modulators, are a new class of HBV inhibitors that can disrupt the assembly and replication of this virus at multiple steps in the viral life cycle. We believe that it may be necessary to utilize more than 1 mechanism for the treatment of HBV, and we are now exploring multiple approaches in addition to core inhibition. As we continue to strengthen our patent portfolio, we have advanced multiple new core inhibitors through preclinical testing, and we hope to announce our first HBV candidate later in calendar 2018.

I'm proud of the promising liver and viral disease pipeline the team at Enanta has built. Our chosen therapeutic area is built on our core expertise in HCV where we have achieved success before, and I look forward to more success in the future. I'll stop here and turn the call over to Paul to discuss our financials for the quarter. Paul?

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Paul J. Mellett, Enanta Pharmaceuticals, Inc. - Senior VP of Finance & Administration and CFO [4]

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Thank you, Jay. I'd like to remind everyone that Enanta reports on a fiscal year schedule. Our year ended September 30, and today, we are reporting results for our third fiscal quarter ended June 30, 2018.

For the 3 months ended June 30, 2018, revenue was $57.3 million compared to revenue of $7.5 million for the same period in 2017. The increase in revenue in the current quarter was due to an increase in royalties earned on AbbVie's $973 million in global sales of hepatitis C virus regimens, including royalties on 50% of the $932 million of MAVIRET sales in the quarter. As Jay mentioned earlier, we expect our royalties earned will continue to increase in the next quarter due to the cumulative sales earned during the calendar year, which brings Enanta into higher royalty tiers under our agreement with AbbVie. Based on AbbVie's recent HCV guidance and given that we have entered into higher royalty-rate tiers, we now expect that if AbbVie realizes its recent projection of approximately $850 million in global HCV sales for the quarter ending September 30, 2018, and substantially all of those sales continue to be MAVIRET, we would expect our royalties on AbbVie's net sales of HCV regimens for that quarter to increase to approximately $67 million. Assuming AbbVie achieves $3.6 billion in total HCV sales for calendar 2018, consistent with their guidance of more than $3.5 billion and substantially all of those sales continue to be MAVIRET, we would expect to earn royalties in the quarter ending December 31 of approximately $72 million. However, in any event, we would not expect our royalties to hit the 20% royalty tier in that period. I will remind you that Enanta is eligible to earn annually tiered double-digit royalties on 50% of AbbVie's global net HCV sales of MAVIRET. This means that our average royalty rate for a given royalty year will restart at the lowest rate in our quarter ending March 31 and will be highest in our quarter ending December 31.

Moving on to our expenses. For the 3 months ended June 30, 2018, research and development expenses increased to $28.5 million compared to $15.4 million for the same period in 2017. The increase was primarily due to greater preclinical and clinical cost associated with the progression of our wholly owned R&D programs in NASH, PBC, RSV and HBV. General and administrative expenses for the quarter was $6.1 million versus $5.2 million for the comparable quarter in 2017. Enanta recorded income tax expense of $3.7 million for the 3 months ended June 30, 2018, compared to an income tax benefit of $4.1 million for the 3 months ended June 30, 2017. During our 3 months ended June 30, 2018, income tax expense reflected the significant increase in pretax income during the quarter, offset by the impact of excess tax benefits from stock award activity.

Enanta's estimated effective annual tax rate for fiscal 2018 of 22.2% includes the impact of a noncash valuation charge against deferred taxed assets to reflect the reduced federal corporate income tax rate as a result of the enactment of the U.S. Tax Cuts and Jobs Act.

Net income for the 3 months ended June 30, 2018, was $20.3 million or $0.97 per diluted common share compared to a net loss of $8.4 million or $0.44 per diluted common share for the corresponding period in 2017. Enanta ended the quarter with approximately $296 million in cash and marketable securities consistent with our September 30, 2017, fiscal year-end balance of $294 million. We expect that these cash resources, our receivables for our royalties earned this quarter and our future royalty cash flow from MAVIRET will be sufficient to meet our anticipated cash requirements for the foreseeable future. Further financial details are available in our press release and will be available in our Form 10-Q for the quarter when filed.

I'd now like to turn the call back to the operator and open the lines up for Q&A. Operator?

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Questions and Answers

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Operator [1]

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(Operator Instructions) And your first question comes from Brian Abrahams of RBC Capital Markets.

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Brian Corey Abrahams, RBC Capital Markets, LLC, Research Division - Senior Analyst [2]

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Congrats on the progress with 938. Just wondering, recognizing the specific details are going to be saved for a medical meeting. But wondering if you could maybe talk a little bit more qualitatively about what you saw in this -- in Phase I? If you could provide maybe any more color on the PK properties? Whether this looks like a once-a-day or multiple-times-a-day drug? And sort of how you're thinking about the design of the challenge study coming out of the Phase I, if this would be a loading dose or not, the duration of that study, et cetera?

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Jay R. Luly, Enanta Pharmaceuticals, Inc. - President, CEO & Director [3]

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Sure. Thanks for the question, Brian. This is Jay. So again, we are very pleased with the results from the Phase I, and we are going to aim for a conference later this year to put out all the nitty gritties of all the detail. But again, it's safe, well tolerated, we think it's a got a good PK profile. You hit on some good points in talking about our challenge study, the Phase IIa study. It does allow us, given the flexibility of how you can set those things up, to test a number of different approaches. You can look at QD versus BID, you can look at loading dose/no loading dose, you can look at different durations of treatment, shorter, longer. It really does give you a fair amount of flexibility. The only thing is, like any trial, the more questions -- the less questions that you think about asking but the more questions you ask, the longer it takes. And this an expedient trial to help us figure out doses, further derisk the program and look at the next step, which should be going on to Phase IIb patients. So we want to try to do that as expeditiously as possible. So I think our PK certainly offers possibility of QD dosing. I think it's likely that we may think about interrogating that versus BID, so we can answer that question in this study. I think it would be, again, a shame to have to go -- ever go backward on something like that. So it'll allow us in that setting to make sure we cover our bases and maximize our chances of success. You raised the question of loading dose. These are all very apt good questions. But we'll put out the final details of that trial design a little closer to the connection with the trial initiation itself. But that's aimed for, again, later this year. And again, we like the way that Phase IIa can really give us quick readouts on not only viral load reductions but also -- it allows you to look at signs and symptoms and so forth. So that will be going before we know it.

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Brian Corey Abrahams, RBC Capital Markets, LLC, Research Division - Senior Analyst [4]

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That's really helpful. And what's the right way to think about, I guess, along those lines, the translatability from preclinical work in RSV to potential success in a challenge study? And then from a challenge study to a Phase II, Phase III proof-of-concept type studies?

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Jay R. Luly, Enanta Pharmaceuticals, Inc. - President, CEO & Director [5]

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Sure. So there aren't that many data points in RSV, I guess, which is one of the great opportunities that we have in front of us. As you know, there are -- other than ribavirin, which we can't really count as a drug that is broadly used in this indication. Not used at all in kids and not that commonly used in adults. So it's really wide open space in terms of that. So some of the translatability of those kinds of things remain to be seen. But overall, if you step back, viral infections have, sort of like bacteria, as a general comment, you get really good understandings of how -- what concentrations you need to deliver to effectively target the virus. And then, you want to pile on multiples of that so that you keep pressure on it. You want to make sure you keep that pressure on the virus throughout the duration of the study. What we've seen, at least with some things that have gone in front of us is that some of the models that we've done like the -- we did a nonhuman primate infection study. There's a company that used to be called Alios, it's part of J&J, they had done a similar study in the primate model. And that in turn then predicted efficacy in the Phase II challenge study that they did. So we've got certainly very comparable efficacy in that nonhuman primate model and have generated a lot of other very strong virology data. Looking at how we have a very high barrier to resistance with this compound and mechanism combination. So again, there's never any predictions that you can cast in stone at this stage. But I think it's as generally as good as these things get when you attack a bug in a lab at a certain concentration, you can deliver at good drug levels in a human safely. And in this case, again, over a very short period of time, we're only talking a matter of days. So I think it all lays out for an encouraging set of next steps. Going beyond that, from the human challenge study in the IIa going into patients, that's where you enter especially rarely chartered waters, except for fusion inhibitors. So some of the fusion inhibitors are out there, looking at those kinds of studies. Gilead certainly has one, J&J has one and some other small companies. So I think that's -- they're looking at the translation step but only with that mechanism. And as we pointed out, I think there could be some real advantages of the approach we're taking by having a direct-acting antiviral going after the N protein, and we can target already infected cells as opposed to having to be there very, very early in the stage of infection with something that blocks the fusion step. So I think that's a potential advantage of our approach as well. But we'll get all that organized and up and running and get those trials going.

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Brian Corey Abrahams, RBC Capital Markets, LLC, Research Division - Senior Analyst [6]

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Great. One more quick one from me and I'll hop back in the queue. Just I guess following up on your commentary on the Express Scripts formulary updates, how common is this sort of formulary management in the hep C space now? Would you -- would it be fair to say that, I guess, what we saw this morning was maybe more of an outlier? And are we still seeing most of the plans -- I guess placing the hep C drugs or having all the hep C drugs at parity in the formularies?

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Jay R. Luly, Enanta Pharmaceuticals, Inc. - President, CEO & Director [7]

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Yes. I'll only address that question very generally because this, quite honestly, is AbbVie's domain. It's something they're very skilled at. They're expert in terms of negotiating all of these payer contracts. But sort of "tis the season." This is when people are wrapping up negotiations for the 2019 year. And yes, you're going to see this toing and froing with all the payers, right? Every year's a new year. And Express Scripts made the decision it did. Probably it's worth also remembering that when you think about this area of hep C, it's not really sort of the traditional market that either it used to be or certainly that it is going forward. And as much as the majority of patients, probably 2/3 of them are in public payer accounts not private. And so you have this big chunk of HCV, the majority of HCV patients being in public accounts. So we're certainly participating very well this year in private payer accounts per AbbVie's success in contracting in 2018. And they're very confident based on their comments that they expect to see similar participation in calendar 2019 as they see in 2018 when you lump it across a class. So just a few points, the privates are a smaller part of the HCV market, Express Scripts is only a fraction of that. Gilead was already sharing in part of Express Scripts anyway so it's not that AbbVie had it all even this year. So the net effect, I think, when you distill it all down, is that it appears to be a relatively small change, one that could easily be compensated for in this toing and froing of other contract negotiations that are going on for 2019. And also remember that we're only -- we're talking about the U.S, which is a large market. But when you look at HCV sales, AbbVie's HCV sales year-to-date, 40% of it came from the U.S. and 60% of it came from outside the U.S. So we're talking about whatever these effects are even on this very -- thing with Express Scripts, it's -- only pertains to a small piece of a small piece of the smaller part of the market that we're seeing overall. And again, you still have lots of other names out there besides Express Scripts. You've got CVS, UnitedHealth, Anthem, Cigna, Prime, Humana. There's a bunch of these folks out there. And again, all these contracts are -- all get negotiated. So I would say stay tuned to that. But AbbVie doesn't seem very concerned about 2019 over 2018.

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Operator [8]

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Your next question comes from Yasmeen Rahimi of Roth Capital Partners.

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Yasmeen Rahimi, Roth Capital Partners, LLC, Research Division - MD & Senior Research Analyst [9]

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Number of my questions you answered, Jay, very nicely. So quickly on RSV, one follow-up and then couple more on other topics. What -- how high of a dose did you go into in your Phase I study?

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Jay R. Luly, Enanta Pharmaceuticals, Inc. - President, CEO & Director [10]

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That's the question?

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Yasmeen Rahimi, Roth Capital Partners, LLC, Research Division - MD & Senior Research Analyst [11]

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That's the question.

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Jay R. Luly, Enanta Pharmaceuticals, Inc. - President, CEO & Director [12]

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We didn't put out all the doses. We haven't put any of the doses out. I guess, we'll do that in an orderly way, laying out all the different doses and things we've [picked] in connection and -- so we can put it into context with our antiviral activity in PK. But it was a normal sort of dose ranging study, nothing extraordinary. We looked over a wide variety of ranges. So anyway, we'll put out more information on that when we put the data out.

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Yasmeen Rahimi, Roth Capital Partners, LLC, Research Division - MD & Senior Research Analyst [13]

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And then second question is more transitioning to NASH. Did I hear correctly that you're continuing enrollment in 2019? Does that mean that you potentially -- your interim data readout could come in later than initially guided for mid-2019?

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Jay R. Luly, Enanta Pharmaceuticals, Inc. - President, CEO & Director [14]

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No. I mean, we've been saying all along now that the enrollment would be all of this year and into early '19. And even today, we point to mid-'19 for preliminary data. So I don't think there's been any real change there. We've got lots of sites up and running in the U.S. We're sort of here in the first half, that's going to continue to grow in the second half. Also in the second half, we've got Europe layering in on top of that. So I think we're pretty much saying the same thing that we've been saying.

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Yasmeen Rahimi, Roth Capital Partners, LLC, Research Division - MD & Senior Research Analyst [15]

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And then in that regard, given that the NASH enrollment is getting quite competitive, can you comment a little bit more as you go into the sites and investigators realize that you are the developer of MAVIRET, how does that sort of impact their decision on being part of the trial? Like, if you could -- I can only assume that individuals would be far more in favor knowing that -- your track record of success?

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Jay R. Luly, Enanta Pharmaceuticals, Inc. - President, CEO & Director [16]

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Yes. It's funny you say that you say that because we certainly have incorporated that into some of our communications with sites. It's a key part. And quite honestly, not for any lack of my efforts but it's -- I think it's widely appreciated in that community that MAVIRET is an AbbVie drug, which it is. But they -- many of these investigators are thrilled and very interested to understand that actually we were a significant part of bringing MAVIRET forward with AbbVie. And that glecaprevir came from Enanta, et cetera, et cetera. So when you start using words like glecaprevir and MAVIRET, suddenly everybody then understands who you're about. And I think they understand that it speaks to the sort of the quality of the work that we've done. I think MAVIRET gets a lot of respect in that community as being a very fine offering and it's only a 2-DAA and no nuke in it, and everything else, just speaks to the quality of the protease in the NS5A that are in that mechanism. So none of that certainly hurts when individuals find out that association.

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Yasmeen Rahimi, Roth Capital Partners, LLC, Research Division - MD & Senior Research Analyst [17]

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And if I may ask one last question. Can you help us, as you're selecting your next HBV candidate, what type of attributes are you looking for? Because from my recollection, 367 had really broad coverage, high potency. So what else are you looking for as you're picking the winning candidate?

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Jay R. Luly, Enanta Pharmaceuticals, Inc. - President, CEO & Director [18]

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Yes. This so-called bake off that's going on. There's so many properties that you're optimizing at any given time. Virology is something that we look at exquisitely, carefully. We're also optimizing DM PK and safety and manufacturing and there's just a whole bunch of different components that are going into the overall mix. But -- and so it's not any single parameter at the end of the day that one focuses on in this instance. It's can you come up with something -- well I'll say it a different way, if we were -- if we found a molecule that objectively looked better on 2 or 3 different criteria and everything else stayed the same and we found it a few months after we would have otherwise picked a molecule like 367, we would kick ourselves. So we're just -- patiently taking that little extra time to be sure we've picked our absolute best molecule. So that's what it is. I wouldn't single out anything. Because as you point out, the profile and the prototype molecule we showed at EASL was very, very strong. So we're hoping we can do even better than that. But we'll see and we'll know soon enough because again, we're hoping to pick that finalist and get going later this year.

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Operator [19]

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Your next question comes from Jay Olson of Oppenheimer.

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Jay Olson, Oppenheimer & Co. Inc., Research Division - Executive Director & Senior Analyst [20]

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I had a couple of them. Maybe just to start with a financial question. I think you mentioned at the beginning of the call that MAVIRET currently has a low market share at Express Scripts. And I was wondering, could you share with us what that market share is? And if there is a significant decline in HCV royalties next year because of the Express Scripts exclusion or for any other reason, is there a scenario where you would consider going to the capital markets to finance your R&D programs? And then I had a follow-up question on EDP-305.

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Jay R. Luly, Enanta Pharmaceuticals, Inc. - President, CEO & Director [21]

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I don't think AbbVie's share at Express Scripts this year is -- well, I'll let AbbVie say what AbbVie's share is. But I was more, I think, trying to point that Express Scripts' participation in the overall HCV market is just a small fraction of AbbVie's overall sales. It's just because of the way -- straightaway, you've got a -- when 2/3 of the patients are not in private accounts anyway. And then when you have private accounts and they're chopped up in all different kinds of ways, and you're competing, in this case, with Gilead as they are with us, it's just that when you distill it down to any one thing, that one thing isn't substantially important to the whole, especially when all these pieces that are fractions of fractions, deal with 40% of AbbVie sales, not the other 60%. So I think that's the main point we were trying to make. I think that -- and with regards to the capital markets, I mean, again, we've got a very strong cash position today. We've never had better cash flow. We've never had higher royalties or royalties have, as we've said, moved up in tiers. And if AbbVie targets their guidance for the remainder of the year, which they announced a couple of weeks ago, we expect very strong sales to continue. I think they've indicated to us that they expect, again, substantially similar share and participation next year as this year. So I can't foresee any reason with our current plan and with the pipeline we have today and the way things are moving that we would need to approach the capital markets for the foreseeable future.

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Jay Olson, Oppenheimer & Co. Inc., Research Division - Executive Director & Senior Analyst [22]

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Okay. That's helpful. And just on EDP-305, since your Phase II data in NASH would presumably become available sometime after Intercept's Phase III REGENERATE study reads out, what, if anything, should we read across from OCA to EDP-305 in NASH?

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Jay R. Luly, Enanta Pharmaceuticals, Inc. - President, CEO & Director [23]

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Well, you can [probabilize] that across multiple different scenarios. Intercept's data could be fantastic, it could be okay or it could be poor. If it's fantastic, I think it's good for the mechanism FXR. To this day, FXR has shown one of the, sort of strongest, most balanced portfolios when you look at different aspects of NASH, including fibrosis. So what's good for Intercept, I think, is good for other FXRs. If you pick the other goalpost and it's not as good, it could be because they didn't have as potent a one or as safe a one that they could press hard on. So I don't think it -- I think every molecule's a little bit different. If you step back a little bit further from that, I'd make a higher level comment. I'll say right now, if FXR proves to be a good mechanism, which we think it is, longer term, they're going to be multiple FXRs out there. I think it would be naïve to assume there's only going to be one. And in that case, I don't want to suggest that they will become commodities because there are differences in each of these molecules. But I expect, in combination therapy, going ahead in NASH, if FXR proves to be a valuable mechanism, there will be multiple of them out there, much as the way it was with protease inhibitors and NS5As when it came to hep C. At the end of the day, that's okay. And we just want to maximize our chances of having a solid FXR that's a player so that we have a ticket into that market. And that's one that we find to be interesting, obviously, we're -- continue to work on follow-on FXRs in other mechanisms and so forth. And we'll be continuing to build into that. But it's a longer-term game. It's not going to get sorted out by anybody's Phase III data next year. I think we'll get some encouraging signs but it's going to be maybe the end of the beginning at that point.

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Operator [24]

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(Operator Instructions) Your next question comes from Liisa Bayko of JMP Securities.

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Jonathan Patrick Wolleben, JMP Securities LLC, Research Division - Associate [25]

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This is Jon for Liisa. Most of mine have been answered but just a couple of short ones. I was wondering if you can comment on what percentage of AbbVie's HCV sales are comprised of MAVIRET now? And when do you expect that to be completely MAVIRET, if at all, in the future?

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Jay R. Luly, Enanta Pharmaceuticals, Inc. - President, CEO & Director [26]

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Well, I think this quarter -- so last quarter, let me think of the numbers, it was [919] overall. And it was [850] MAVIRET. So that makes 69 for the VIEKIRA-related activities. This most recent quarter, it was [973], and I think [932] of that was MAVIRET. So VIEKIRA now was sort of 41. So MAVIRET continues to grow as we expected. And VIEKIRA over time has continued to reduce over time. And again, that was sort of the plan. So I would expect over time, that's a trend that you may continue to see. So there's no question that the lion's share of this now and likely going forward, is MAVIRET, which very much simplifies the equation, so to speak.

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Jonathan Patrick Wolleben, JMP Securities LLC, Research Division - Associate [27]

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Great. And then just one more on spend. R&D was up about 30% quarter-over-quarter. And with the increased activity towards the back half of the year, I was wondering, how should we think about R&D increases moving through the end of this year and into next?

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Jay R. Luly, Enanta Pharmaceuticals, Inc. - President, CEO & Director [28]

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Well, we'll give new guidance for our new fiscal year. But we've been generally tracking to plan. And again, as we roll into a new year, we'll have undoubtedly even more growth in our R&D line, which is a good thing. It's because of the pipeline progressions, we'll have 3 Phase IIs going, not 2. With any luck, we'll be advancing other molecules and other programs. So I would expect it to steadily increase. But we're not ready to give our sort of fiscal 2019 guidance on that quite yet. But generally, with regards to '18, I think we're tracking sort of right on plan.

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Operator [29]

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And there are no further questions in queue at this time. I'll now turn the call back over to Carol Miceli.

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Carol Miceli, Enanta Pharmaceuticals, Inc. - Director of IR [30]

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Okay. Thank you, everyone, for joining us today. If you have any additional questions, feel free to give us a call in the office. Thanks again.

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Operator [31]

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Ladies and gentlemen, this does conclude today's conference call. You may now disconnect.