Friday, December 20, 2013

The Thin Ice Enanta Was Standing On Has Cracked

Just two days after I posted this Gilead released some positive data. The thin ice Enanta was standing on cracked as I expected and the stock has lost 25%. You'll notice some very negative comments, you'll also notice things got very quiet very fast! I'll paste a snip from the conclusion. See the complete post here.
The risk-to-reward profile of its current partnerships, make Enanta just the sort of well managed biotechnology company I would recommend owning for the long haul, but I wouldn't start a position now at $37 per share. Given the lack of late stage candidates beyond ABT-450, the recent price is too dependent on a blended percentage of royalties from a not-yet-approved therapy for an increasingly competitive indication.
Enanta is certainly worth a spot in a watch list. It doesn't need Abbvie's combination to succeed, or even win approval, to remain buoyant. The risk is entirely on Abbvie. Enanta has no debts and is producing positive net income on a trailing twelve month basis. With four of the six Phase 3 trials associated with the Abbvie NDA to be completed by March 2014, an entry opportunity may present itself fairly soon. In the mean time I recommend keeping a close eye on this promising upstart.
Again the complete post is only available at Seeking Alpha here.