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Enanta pockets $57 million in HCV deal with Abbott
WATERTOWN, Mass.—Enanta Pharmaceuticals and Abbott announced in early December a worldwide agreement for the research, development and commercialization of hepatitis C virus (HCV) NS3 and NS3/4A protease inhibitors.
Under the terms of the deal, Enanta received an upfront payment of $57 million, a portion of which represents an equity investment by Abbott. Milestone payments have the potential to add as much as $250 million more to Enanta's coffers with additional payments due the company should more than one product be developed as a result of the alliance.
"There were a lot of companies that were interested in our HCV program," says Jay R. Luly, Ph.D., president and CEO of Enanta. "But I think there was a good fit between our approach, versus what Abbott was looking for to complement their HCV work."
According to Terry Opgenorth, divisional VP for antiviral research at Abbott, the company—already well-known for its history in antiviral work and leading position in the treatment of HIV—was actively looking for other HCV avenues and approaches that would complement its program, which focuses on polymerase.
"We are very interested in continuing being [active] in antivirals. Because of the unmet need in HCV, in particular, we are working in that area while also looking for other opportunities," says Opgenorth. "Enanta emerged as a top candidate because of what we felt they have in terms of proprietary chemistry—a breadth of chemistry in terms of numbers of leads and structures available—the drug-like properties those leads appear to have and their potency and preclinical lead status. It's because of all those things that we aggressively pursued a partnership with them."
For Enanta, founded in the late 1990s, the upfront payment and investment in the company provides a measure of stability as it continues its work in both viral and bacterial infections, including MRSA.
"This deal is hugely important for Enanta," notes Luly. "In the immediate term, it represents a financing event that provides us with a few years of capital. But it is also attractive in terms of the mid-term potential milestones, future royalties and the option for a profit share in the U.S. market."
That profit share, should Enanta exercise its option, could go as high as 40 percent should the company provide 40 percent of the development costs. Opgenorth notes that these kinds of options are becoming more prevalent in the industry.
"In [today's] environment, where the cost of development is increasing at a rapid rate and the risks associated with those development costs are also high, this is way a company like Abbott can mitigate its development expense risk. It's also a way for a company like Enanta to share that risk to gain additional reward—a higher profit return if the compound is successful."
And the potential rewards are huge. According to both companies, the market today for HCV therapeutics—mostly interferon—is roughly $3 billion worldwide. But as companies like Abbott and others get closer to bringing new therapeutics to market, the market is expected to surge to between $12 billion and $15 billion within seven or eight years.
One reason a quick rise is expected is due to the fact that, like HIV, "cocktails" of multiple therapies should prove to be most effective against the HCV. For Enanta and Abbott, the market opportunity in the United States alone could be significant as estimates peg the total number of infected people at 3 million, or roughly one out of every 100 people. Worldwide estimates are equally staggering with as many as 170 million infected with HCV.