Why Enanta Pharmaceuticals Inc. Shares Soared

Enanta shares soar after it and development partner AbbVie report phase 3 results of their direct-acting antiviral combo drug for hepatitis-C. Should investors be excited?

Jan 31, 2014 at 2:20PM

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Enanta Pharmaceuticals (NASDAQ:ENTA), a developer of small-molecule drugs to treat infectious diseases, rallied as much as 18% after it and development partner AbbVie (NYSE:ABBV) reported positive results from its late-stage hepatitis-C trial involving AbbVie's direct-acting antiviral combo.

So what: According to the press release, the DAA combo drug, of which Enanta supplied ABT-450, successfully demonstrated efficacy and safety in its final four trials involving genotype 1 patients, the most common, but most difficult to treat variation of the disease. Although I would strongly encourage you to look at the results from each individual trial to gauge performance, the primary conclusion is that sustained virologic response -- with the exception of the genotype 1a, treatment-naïve study utilizing the DAA combo without ribavirin which produced "only" a 90% SVR after 12 weeks – was 92% to 100% throughout its four studies. In fact, the majority of studies delivered an eradication of detectable levels of the virus of 96% to 99%.

Now what: Clearly these are strong results, and they're very likely to merit an approval from the Food and Drug Administration before 2014 is over barring some unforeseen curveball. Plenty of investors are worried about competition from Gilead Sciences' (NASDAQ:GILD) Sovaldi, which is more convenient in that there are fewer pills for a patient to take on a daily basis. I would contend, though, that based on the overwhelmingly strong efficacy of both drugs, that each has the opportunity to share the space and attain blockbuster status. I'd urge you not to count your chickens before they are hatched, but if my arm were twisted I'd say Enanta and AbbVie are both sitting on a potentially lucrative hepatitis-C therapy at the moment.

Enanta shares have soared in the past couple of months, but even it may have a hard time keeping up with this top stock in 2014
There's a huge difference between a good stock and a stock that can make you rich. The Motley Fool's chief investment officer has selected his No. 1 stock for 2014, and it's one of those stocks that could make you rich. You can find out which stock it is in the special free report "The Motley Fool's Top Stock for 2014." Just click here to access the report and find out the name of this under-the-radar company.

Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.

The Motley Fool recommends Gilead Sciences. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

©1995-2014 The Motley Fool. All rights reserved. | Privacy/Legal Information