Enanta Pharmaceuticals Inc (NASDAQ:ENTA) stock surges 19.46% (As on November 21, 11:22:10 AM UTC-4, Source: Google Finance) after the company posted better than expected results for the fourth quarter of FY 23. Beginning with the quarter ended September 30, 2023, 54.5% of Enanta’s ongoing royalties from AbbVie’s net sales of MAVYRET^®/MAVIRET^® are being paid to OMERS, one of Canada’s largest defined benefit pension plans, pursuant to a royalty sale transaction in April 2023. For financial reporting purposes, the transaction was treated as debt, with the upfront purchase payment of $200.0 million recorded as a liability. Enanta will continue to record 100% of the royalty earned as revenue and will then amortize the debt liability proportionally as 54.5% of the cash royalty payments are paid to OMERS, until a cap of 1.42 times the purchase payment is met, after which point 100% of the cash royalty payments will be retained by Enanta. Net loss for the three months ended September 30, 2023, was $28.1 million, compared to a net loss of $26.3 million for the corresponding period in 2022. Enanta’s cash, cash equivalents and marketable securities totaled $370.0 million at September 30, 2023. Enanta expects that its current cash, cash equivalents and short-term marketable securities, as well as its continuing retained portion of royalty revenue, will continue to be sufficient to meet the anticipated cash requirements of its existing business and development programs through fiscal 2027.

ENTA in the fourth quarter of FY 23 has reported the adjusted loss per share of $1.33, beating the analysts’ estimates for the adjusted loss per share of $2.11, according to  Zacks Investment Research. The company had reported the adjusted revenue of $18.9 million in the fourth quarter of FY 23, beating the analysts’ estimates for revenue of $17.9 million. This includes  royalty revenue derived from worldwide net sales of AbbVie’s hepatitis C virus (HCV) regimen MAVYRET/MAVIRET, compared to royalty revenue of $20.3 million for the three months ended September 30, 2022.  The decrease in the quarter and in year-over-year revenue is due to a decline in AbbVie’s sales of MAVYRET/MAVIRET.

For fiscal 2024, Research and Development Expense to be in the range of $100 million to $120 million (reduced from $163.5 million of actual expense in 2023) and General and Administrative Expense to be in the range of $45 million to $50 million (reduced from $52 million of actual expense in 2023; guidance includes an increase in legal fees associated with the company’s patent infringement lawsuit)