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Enanta Pharmaceuticals raises $56 million in IPO

The Associated Press

Enanta Pharmaceuticals Inc. raised $56 million in an initial public offering of 4 million shares after the drug developer priced the stock at $14 per share, which was at the low end of its expected range.

Shares will start trading Thursday under the ticker symbol ENTA on the Nasdaq stock market.

The Watertown, Mass., company said Wednesday that its underwriters have a 30-day option to buy up to an additional 600,000 shares to cover any excess demand. It had expected a range of $14 to $16 for shares in the IPO.

Enanta is developing potential hepatitis C treatments, but it has no products on the market yet. Its most advanced product, an experimental drug labeled ABT-450, started late-stage clinical testing last October.

Enanta said in a filing with the Securities and Exchange Commission that it will be at least two years before the drug is submitted to regulators for approval. The company is collaborating with another drugmaker, AbbVie Inc., on ABT-450.

Enanta said worldwide sales for hepatitis C treatments topped $3.5 billion in 2011, and it expects that to increase to between $10 billion and $20 billion in the next decade.

Hepatitis C is a virus that can lead to life-threatening liver damage and is the main cause of liver transplants in the United States. The disease is spread through the blood, and that can happen through sharing intravenous drug needles or having sex with an infected person. It can take years to manifest.

Analysts see hepatitis treatments as potentially lucrative for drugmakers because they expect the virus to become a growing health problem as the U.S. baby boom generation ages. Drug makers are working to develop treatments that don't involve interferon, which causes serious side effects, including flu-like symptoms that can last for months.

Enanta said ABT-450 is being developed in treatment regimens that don't use interferon.

The company plans to use proceeds from the offering to help with drug research and development and for working capital. Enanta also is developing antibiotics to treat multi-drug resistant bacteria like MRSA.

JP Morgan Securities and Credit Suisse Securities are acting as joint book-running managers for the offering, which is expected to close March 26. Leerink Swann and JMP Securities are co-managers.