Logo of jester cap with thought bubble with words 'Fool Transcripts' below it

Image source: The Motley Fool.

Enanta Pharmaceuticals, Inc. (NASDAQ:ENTA)
Q2 2019 Earnings Call
May 7, 2019, 4:30 p.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good afternoon; my name is Jesse, and I'll be your conference operator today. At this time, I'd like to welcome everyone to the Enanta Pharmaceuticals second quarter financial results call. All lines are placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. If you'd like to ask a question, please press *1 on your telephone keypad. To withdraw your question, press the # key. Thank you. Carol Miceli, Director of Investor Relations, you may begin your conference.

Carol Miceli -- Director, Investor Relations

Thank you, Jesse, and thanks for joining us this afternoon. Today's release of our financial results for the recent quarter was issued this afternoon, and is available on our website. On the call today is Dr. Jay Luly, President and Chief Executive Officer, Paul Mellett, our Chief Financial Officer, and other members of Enanta's senior management team.

Before we begin with our formal remarks, we want to remind you that we will be making forward-looking statements, which may include our plans and expectations with respect to our product candidate and financial projections, all of which involve certain assumptions beyond our control that could cause our actual development and results to differ materially from those statements. A description of these risks is in our most recent Form 10-Q, and other periodic reports filed with the SEC. Enanta does not undertake any obligation to update any forward-looking statements made during this call. I'd now like to turn the call over to Dr. Jay Luly, President and CEO.

Jay R Luly, Ph.D. -- President, Chief Executive Officer and Director

Thank you, Carol. Good afternoon, everyone, and thank you for joining us today. Enanta ended the quarter with approximately $387 million in cash and marketable securities. We continue to make progress in each of our clinical development programs, with three clinical milestones expected by the end of the next quarter.

I'll begin with our RSV program: in March we announced that enrollment was complete, and the Phase 2A RSV challenge study for EDP-938, and we expect top line data mid-2019. This randomized, double blind, placebo-controlled human challenge study enrolled healthy adult subjects who were randomized into one of two dosing arms, or the placebo arm, and dosed for five days. Subjects received a once-daily 600mg dose, or a single 500mg loading dose followed by 300mg doses twice daily, or a placebo. Primary and secondary outcome measures include changes in viral load measurements, changes in baseline symptoms, and safety. Following the completion of the Phase 2A study, and assuming a positive outcome, the next step would be to initiate our first Phase 2B study, which will be with adult outpatients with RSV infections. Our goal is to initiate this study before the end of calendar 2019.

EDP-938 is the only N-inhibitor for RSV in clinical development today, and we believe that it is differentiated from fusion inhibitors because it directly targets the viral replication process of RSV, and has demonstrated a high barrier to resistance in vitro.

Moving to EDP-305, our lead FXR agonist, we have two Phase 2 studies ongoing. ARGON-1, our NASH study, is a 12-week randomized double blind, placebo-controlled study designed to evaluate the safety, tolerability, pharmacokinetics, and efficacy of EDP-305. In March, we announced that enrollment was completed in the study. Treatment is ongoing, and we anticipate sharing top-line data by the end of the third quarter of calendar 2019.

Enrollment continues in the INTREPID study, our Phase 2 study in PBC. Recruitment has been challenging, due to multiple clinical trials attempting to access a limited number of patients for this potential second line therapy in this orphan indication. We'll provide further updates on PBC enrollment in the coming months. We believe that FXR is one of the most promising mechanisms in development today for NASH. We've made good progress with our follow-on program. We expect to also announce a development candidate later this year. In addition to FXR, we continue our research into other mechanisms as well.

Let's turn to our next program, our core inhibitor EDP-514 for HBV. EDP-514 was selected from our lead series of HBV compounds that are characterized by potent anti-viral activity. Core inhibitors are a relatively new class of HBV inhibitor that can disrupt the assembly and replication of the virus at multiple steps in the viral life cycle. Most recently, at the International Liver Congress in April, new pre-clinical data on EDP-514 was presented. In-vitro data demonstrated that EDP-514, a novel class-2 core inhibitor, is a potent inhibitor of HBV replication that prevents the de novo formation of new cccDNA in primary human hepatocytes when given early during an infection. Data also show that EDP-514 is pan-genotypic, and that combinations of EDP-514 with either a nucleoside reverse-transcriptase inhibitors, which are the current anti-viral therapies for HBV, or a class-1 core inhibitor resulted in additive to synergistic antiviral effects. In vivo, EDP-514 demonstrated excellent efficacy with >4-log viral load reductions in HBV-infected PXB mice.

Based on our preclinical data, we believe EDP-514 may have best-in-class potential for the core inhibitor mechanism. A Phase 1 study of EDP-514 is expected to begin next quarter. The design of this study will evaluate single and multiple doses of drug in healthy volunteers, and incorporate a Phase 1B arm in patients with chronic HBV infections. In addition to EDP-514, we are exploring other anti-HBV approaches, as we believe that it will likely be necessary to utilize multiple mechanisms for the treatment of HBV.

In summary, Enanta continues to advance its promising and broad pipeline of clinical candidates, as well as other compounds in earlier stages of development. Our science has been validated by our partner in HCV protease inhibitor program, which has resulted in two approved products marketed by AbbVie, including MAVYRET, the leading HCV treatment in the world. We are working diligently to duplicate this success within our current clinical programs, and to bring new therapies to challenging disease areas with high medical need. I'll stop here, and turn the call over to Paul to discuss our financials for the quarter. Paul?

Paul J Mellett -- Chief Financial Officer

Thank you, Jay. I'd like to remind everyone that Enanta reports on September 30th fiscal year schedule. Today, we are reporting results for our second fiscal quarter, ended March 31, 2019. For the quarter, total revenue was $39.6 million, and consisted entirely of royalty revenue. This compares to total revenue of $44 million for the same period in 2018. Royalty revenue in the current quarter was earned on AbbVie's $815 million in global sales of HCV regimens. Royalty revenue was calculated on 50% of MAVYRET sales at a royalty rate of 10%, and approximately 30% of VIEKIRA sales at a royalty rate of 10%, after adjustments for certain contractual discounts and rebates, which historically had been approximately 1.5% of AbbVie's reported HCV sales.

I will remind everyone that our royalties, which are calculated separately for each product, are on a calendar year basis through a tiered royalty schedule of rising royalty rates. The royalty schedule restarted at our lowest royalty rate of 10% in our quarter ending March 31. This means that the quarter ending March 31 royalties being reported today will be at the lowest royalty rate of 10%, and our royalties for the quarter ending December 31 will have the highest royalty rates for our fiscal year. You can review our royalty tier schedule in our 2018 Form 10-K.

Moving on to our expenses: for the three months ended March 31, 2019, research and development expenses totaled $34.2 million, compared to $21.5 million for the same period in 2018. The increase was primarily due to greater pre-clinical and clinical costs associated with the progression of our wholly owned R$D programs in RSV, NASH, PBC, and HPV, including our three Phase 2 clinical trials.

General and administrative expense for the quarter was $6.8 million, versus $5.7 million for the comparable quarter of 2018. The increase was driven by increases in compensation expense, primarily due to increased headcount. Enanta reported an income tax benefit of $3.2 million for the three months ended March 31, 2019, compared to an income tax expense of $5.4 million for the same period 2018. Despite reporting pre-tax income, Enanta recorded an income tax benefit during the quarter due to tax deductions from employees' stock award-related activity during the quarter.

Enanta's effective tax rate for the six months ended March 31, 2019 was approximately 2%, compared to approximately 27% for the same period in 2018. This 2% rate differs from the federal statutory rate of 21% due to federal research and development tax credits and tax deductions from employees' stock award-related activity. In 2018, Enanta accounted for the enactment of the Tax Cuts and Jobs Act, which resulted in the reevaluation adjustment of deferred tax assets during the 2018 year. We expect our effective tax rate for Fiscal 2019 to be approximately 10%, which reflects the impact of both R&D credits, as well as tax benefits from stock award activity.

Net income for the three months ended March 31, 2019 was $4.1 million, or $0.20 per diluted common share, compared to net income of $12.6 million or $0.61 per diluted common share for the corresponding period in 2018.

Enanta entered the quarter with approximately $387 million in cash and marketable securities, an increase of approximately $62 million to our 2018 fiscal year end balance of $325 million. We expect that these cash resources, as well as our continuing royalty revenue will be sufficient to meet our anticipated cash requirements for the foreseeable future. Further financial details are available in our press release, and will be available in our Form 10-Q for the quarter when it is filed. I'd now like to turn the call back to the operator, and open up the lines for questions. Operator?

Questions and Answers:

Operator

Thank you. At this time, I like to remind everyone: in order to ask a question, please press *, then 1 on your telephone keypad to queue for a question. We will pause for just a moment to compile the Q&A roster. Your first question comes from Brian Abrahams with RBC Capital Markets; your line is open.

Brian Abrahams -- RBC Capital Markets -- Analyst

Hi there, thanks for taking my questions, and congrats on the continued progress. On NASH, on 938: sort of wondering, coming out of the EASL conference, what are your latest views on what sorts of ALT declines or improvements on other measures you'd want to see, to suggest a competitive profile or even a potential advantage, versus some of the latest HFXRs, and I'm also curious how the follow-on program you mentioned fits in profile-wise; then I had a follow-up.

Jay R Luly, Ph.D. -- President, Chief Executive Officer and Director

Sure, thanks for the question, Brian. This is Jay. I think you meant EDP-305, not 938, regarding the NASH study.

Brian Abrahams -- RBC Capital Markets -- Analyst

Yes, sorry about that.

Jay R Luly, Ph.D. -- President, Chief Executive Officer and Director

So yeah, about that: with regards to the ARGON-1 study, as I mentioned, and we reported that enrollment's complete. We're now just working through the last patients in the study, and we are due to [inaudible] by the end of calendar Q3. We're gonna look at a lot of different readouts in that study, once it's completed: of course, we'll be looking at ALT, which we think is sort of a general parameter, looking at the effects that are going on in NASH patients with the elevated ALTs. We had hoped to see a significant reduction there, but we'll also be looking at liver fat; we'll be looking at our vital markers that we've looked at in the past, signs of true target engagement, including FGF-19 elevation, C4 reduction, and there will be other sort of exploratory readouts that we've baked into this study as well, so I think it's really gonna be a snapshot.

Again, this is a 12-week non-biopsy study, so there's only a certain amount of things that you would expect to see in such a study, but directionally, we want to see positive improvements in -- as I mentioned -- the ALT, C4, FGF-19, etc., and we're going to look at the aggregate of that data in making a decision to proceed. Certainly, some of the FXRs that have come out, they have shown some impact in terms of the readouts that I've mentioned, but -- for example, in fat -- there are other, more direct fat-based mechanisms if you're looking just at liver fat by MRI-PDFF than FXRs are likely to show, but that said, the aggregate balance of touching a whole bunch of different mechanisms, including those that could ultimately lead to improvements in fibrosis -- those are the hallmarks of FXR, and what we would like to do is see the expected readouts, and then continue the path forward with appropriate doses in a Phase 2B, assuming the data are supportive.

Brian Abrahams -- RBC Capital Markets -- Analyst

Makes sense, and as you think about next steps for 305, what's your latest view on potential partnership strategy there? Has that evolved at all, coming out of EASL, now that we've seen some corroborative data for the FXR mechanism, and -- what's your latest thinking on that, and what the next step could be?

Jay R Luly, Ph.D. -- President, Chief Executive Officer and Director

Yeah, our thinking, it hasn't really changed on that. We're gonna build up a body of Phase 2 results, and we believe that on the other side of Phase 2 data or data sets that that would be the best value and inflection point for us to then team up with another party for the later-stage development, potential partnered combination therapies. So prior to Phase 3 is still our thinking. When, between now and that time, still remains to be seen. We wanna continue to work up our own data sets; we'll be looking, obviously, externally at other people's data sets, and be thinking about where combinations might or might not make sense, and then explore that pathway as we go forward.

Brian Abrahams -- RBC Capital Markets -- Analyst

That's really helpful. Maybe one more question, perhaps for Paul. Your R&D expenses have been relatively steady. What's the right way to think about the run rate over the course of the rest of this fiscal year, especially as we look toward your programs advancing further? Thanks.

Paul J Mellett -- Chief Financial Officer

Well, we've guided, Brian, to between $135 and $155 million in R&D spend for the year, so that's the range that we're still looking at for Fiscal 2019.

Brian Abrahams -- RBC Capital Markets -- Analyst

Okay, thanks.

Operator

Your next question comes from Yasmeen Rahimi with ROTH Capital; your line is open. (Paul O'Brian on for Jasmine)

Paul O'Brien -- ROTH Capital Partners -- Analyst

Hi, team, this is Paul O'Brien on for Yasmeen; thanks for taking my question. I just wanted to talk about the Phase 2A RSV challenge study, and how do you determine which -- from the data -- which patient population would be most ideal to go into, and like, what types of modeling is performed to understand what this population will be for the 2B? Thanks.

Jay R Luly, Ph.D. -- President, Chief Executive Officer and Director

Sure, so the human challenge study for RSV, as we also reported, is completely enrolled, and that we are still on track to have data mid-this year. We're gonna take those results, which we expect will show viral load reduction, we should also see -- again, this is assuming it's a positive study -- we'd expect to see viral load reduction; you would expect to see improvement in signs and symptoms, and general safety. With that kind of a challenge study data set in hand, you're really poised to then propel yourself into lots of different sort of patient populations.

We've said before that we're going to do an adult population first, prior to going into Peds. We really wanna understand the drug as best we can in adults, and then make the transition ultimately to Peds, and then within that arena, you have sort of three adult populations that one might consider. So you can think about elderly hospitalized patients; you can think about bone marrow transplant recipients, for example, or you could think about sort of an outpatient all-comers adult type of study. And that's where we've actually landed, so that is going to be the first patient population that we're targeting, is an outpatient adult population, sort of a point of care study, and that will -- again, we're targeting to initiate that by year-end this year.

Paul O'Brien -- ROTH Capital Partners -- Analyst

Okay, great, if I could just ask one more question: in that Phase 2A study, I just was wondering how critical is it to administer the loading dose, like at the right time, and getting that dose correctly?

Jay R Luly, Ph.D. -- President, Chief Executive Officer and Director

Yeah, well, we don't know, quite honestly. That's why we baked it into the study. We don't know if we'll need a loading dose, or if we won't need a loading dose, but what we did wanna do was bake that into the challenge study now, rather than wishing we had done that later, and so that's why we sort of stacked the two regimens that we did. We got 600mg QD, or we got a 500mg loading dose, and then 3mg BID. When you model that out, the loading dose followed by the BID that I just mentioned, it does give sort of a strong smack right out of the gates at the virus, which in the syndication could well be important.

Is 600mg QD sufficient for that early smack of the virus? It may well be, and so -- but we really put that in there just to ask that question. It's not uncommon in respiratory infections to use a loading dose just to get the drug onboard more quickly, get to study state sooner, etc., etc., so we'll just wait and see where the data lead us.

Paul O'Brien -- ROTH Capital Partners -- Analyst

Okay, thanks for clarifying. Thanks.

Jay R Luly, Ph.D. -- President, Chief Executive Officer and Director

You're welcome.

Operator

Your next question comes from Eric Joseph with JP Morgan; your line is open.

Eric Joseph -- J.P. Morgan -- Biotech Analyst

Hey, guys, thanks for taking the questions, and congrats on the progress for the quarter. I just have a couple questions on 514 for chronic HPV. I guess I'm just trying to appropriately understand the clinical potential with 514, and what are the expectations that you would ultimately expect to achieve single agent activity, or should we be thinking of this more as an adjunctive therapy to the current nukes, and -- if in the latter vein -- whether you'll be able to assess safety and tolerability in the context of background nuke analog standard of care in the Phase 1 as designed? Thanks.

Jay R Luly, Ph.D. -- President, Chief Executive Officer and Director

Sure, so to answer the very last part of it first, it won't be in a Phase 1 with a nuke, but what I'll go back and say is what we're thinking about it as a single agent, much like others who have programs in this mechanism. The first job is to go into Phase 1 in "healthies," getting a SAD and MAD, which again, we plan to initiate now next quarter. We had been guiding second half, and we're putting it into next quarter, and then once we do that, we'll repeat the 1B, effectively, in HPV patients to get a sense of viral kinetics in that HPV patient population. This is a very common data set to sort of capture this, so the 1B is gonna be in nuke-suppressed naïve -- nuke-suppressed and naïve, perhaps, patients -- so we will get some sense of that in the 1B. Ultimately, though, the core is really gonna be part of a bigger cocktail, we ultimately imagine. The question is, is a core and a nuke enough?

Clearly, Assembly, and J&J, and Roche are in the process of trying to answer these questions, and we did get some data that came out of EASL recently that [inaudible] with Assembly's molecule on top of a nuke, and it's not clear that you don't need a more potent core inhibitor than the one that was tested. We'll wait and see what others show from, again, J&J and Roche, or that you may need a core inhibitor on top of a nuke for longer than six months. Again, that's an unknown at this point, but there's no question that the core is contributing, it's just that HPV -- I think that so much of the -- not so much people who treat HPV for a living, but a lot of the street, I think, assumes that HPV might come round quickly like Hep-C, and I just don't think it's gonna be -- we're still in an earlier stage of learning to figure out what is the right set of combination ingredients that's really gonna pull cure rates up from low-single-digits, and what's gonna pull cure duration in from -- right now, it's sort of never -- down into reasonable time frames for patients.

Will that be a year of treatment? Will it be longer than a year of treatment, or maybe if we get the right combinations together, can we come down to shorter durations than a year? These are all sort of the old questions that people asked with Hep-C, and then once you sort of got to Paragriva, and then you added a protease on top of that, and then you added something else, you could ultimately just dial down and continue to perfect these regimens. So we're at an earlier stage now, the whole field is. It's an exciting time for patients, but I do believe core is gonna be an important mechanism in that ultimate regimen. The only question after that is, what other things are you going to need? And that's why we're already internally exploring some other mechanisms that we may well add to the cocktail in the future, so stay tuned on that front.

Operator

Your next question comes from Jay Olson with Oppenheimer. Your line is open.

Jay Olson -- Oppenheimer -- Analyst

Hey, thanks for taking the questions, and congrats on the progress. I was wondering if you could please remind us, for the Phase 2A human challenge study of EDP-938 in RSV, what is the timing of the onset of therapy, with regards to the timing of the inoculation with the virus? Does therapy begin before inoculation? And also, could you tell us the timing of the therapy, with respect to the onset of RSV symptoms?

Jay R Luly, Ph.D. -- President, Chief Executive Officer and Director

Sure, so it's not given prophylactically, it's given therapeutically, so you infect the volunteers, and you basically are then starting to track them regularly. They're domiciled, so the subjects are watched very closely, and they're monitored for presence of virus continually by PCR. And once you get detectable load by PCR, you usually dose within 12 hours, I believe it is, from that time point. So that's the point of dosing.

Jay Olson -- Oppenheimer -- Analyst

Okay, great. Thank you, that's very helpful. And can you just remind us, is the timing of onset of treatment in the human challenge study the same as timing that you used in the primate study, and -- maybe as a follow-up -- can you just comment on how de-risked the human study is by the results of the primate study?

Jay R Luly, Ph.D. -- President, Chief Executive Officer and Director

Yeah, so the primate study was a different sort of a study; that one was run a little bit more in prophylactic mode. Again, what we're trying to do, it's a temptation to veer off, and do a lot of other kinds of preclinical studies and exploratory clinical studies, etc., etc., but the punch line is in that primate study, there was sort of a known protocol and path that had been developed in the African green monkey, and we chose to follow that in large part so that we could compare our data sets against those of others.

In one case, a company that used to be called Allios had done a non-human primate study, and generated positive data in that model, and then had continued on to the human challenge study. They ran it like we're running it, and like others had run it; it's a fairly standardized protocol that people use. But anyway, Allios then went on to demonstrate success in their human challenge study. So we felt that, again, we showed very robust activity in the non-human primate; we're now going into that next step, into the human challenge study, so there's never any perfect de-risking. That's why you have to ultimately do the experiments, but you are dealing with a primate with similar lung architecture, and you know that the drug needed to get to the site of infection, and in that case, we did see a very strong anti-viral effect.

So going now into the human challenge study, the prequel to that was a Phase 1, where we had demonstrated a very good safety over a seven-day period. I'll remind you that the Phase 2 challenge study is only five days in duration, and that the doses that we're using, we demonstrated very high multiples of the DC90 in Phase 1, so high multiple of DC90 is generally a sought-after profile to go into the viral disease, because you wanna have a lot of pressure, if you will, on the virus, so we were able to deliver that very high multiple of the DC90 quite safely in Phase 1, and now have progressed obviously with those types of dosing in our Phase 2 study, so I -- again, you can never fully de-risk any study, but I think it was a well-conducted pathway to get to this study, and again, I think we're doing it in a way that allows us to sort of compare results with others.

Jay Olson -- Oppenheimer -- Analyst

That's great. Thanks for all the details; I appreciate it. That's very helpful, thank you.

Jay R Luly, Ph.D. -- President, Chief Executive Officer and Director

You're welcome.

Operator

Your next question comes from Brian Skorney with Baird. Your line is open.

Jack Allen -- Baird -- Equity Research Associate

Hi, this is Jack Allen, dialing in for Brian; thank you so much for taking our questions. We just had one on the recent happenings in the ASK-1 inhibitor space, with respect to Gilead's clinical trial data. I think on your last earnings call, you mentioned that you were working on a ASK-1 inhibitor; we were wondering what your thoughts were on Gilead's data, and how that might affect your willingness to move forward with your compound, and if you're also monitoring the ATLAS trial that's expected later this year, with respect to ASK-1 as a combination in NASH, and how that would, I guess, play a role in your decisions to move forward with your potential combination of an FXR and the ASK-1 as well. Thank you so much for the question.

Jay R Luly, Ph.D. -- President, Chief Executive Officer and Director

Sure. We did mentioned on our last call that we had one of the programs that's not FXR in-house, we have multiple of those, was an ASK-1 program. We started to have IP coming out, and in fact, we had submitted abstracts at the EASL conference, and we showed some very good preclinical data in NASH models using an ASK-1 inhibitor. In fact, we had one comparative study versus selonsertib that actually looked very encouraging for our molecule.

We also showed data that took apart, sort of, the kinase selectivity profile of one of our ASK-1 molecules that was showcased versus Gilead's selonsertib, and in fact showed that ours had a cleaner kinase profile than did theirs. So that's all backdrops, as of April.

Of course, going into EASL, we knew that STELLAR-4 had failed. Quite honestly, even though Gilead is certainly a formidable competitor, we had hoped for success in that study, for obvious reasons, in terms of continual validation of the mechanism, and then we were waiting to see what happened with STELLAR-3, and now we know the answer to that, and that that study also was not positive. So I guess the question for us, that we have, is, "Did Gilead dose high enough?"

We know that they were capped at 18mg in virtually all the studies that they've run, and they've run numerous Phase 2 and Phase 3 studies, and they always capped out at 18mg, except for, I think -- the early Phase 1 study they dosed higher, but they never dosed higher after that. So we keep asking ourselves whether or not they dosed higher, would they have seen a better outcome? And since it appears they weren't able to do that, we won't know the answer to that question.

I think what we need to see is more details on the Phase 3 data, thinking about it from the perspective of target engagement and other parameters, but I guess the question for Enanta remains: were you to have a cleaner, more selective molecule that proved to be safer, and allowed you to dose higher, would you have a different result? And that's something that we're just gonna have to stew on a little bit, internally, before we make any sort of a final decision.

I mean, it appears that Gilead is aiming to go forward in Phase 3 in kidney disease with that, and I think there's probably a -- might be a more compelling argument in that indication, based on the biology, but we'll have to sit and think about that a little bit.

Regarding the ATLAS study, of course, now they're continuing to have combination studies with FXR and ASK-1 and other combinations, and you can be sure we will have our eye on that data, because I guess we're really the only other company that can put together that combination. The question is, if we did it with potentially -- we were able to achieve a better profile in our molecules, could that be a combination that would be worth pursuing also? We'll wait, and see what their data set looks like.

Jack Allen -- Baird -- Equity Research Associate

Awesome, thank you so much for the question.

Jay R Luly, Ph.D. -- President, Chief Executive Officer and Director

You're welcome.

Operator

Again, if you'd like to ask a question, please press *1. Your next question comes from Patrick Trucchio with Berenberg Capital Markets; your line is open.

Patrick Trucchio -- Berenberg Capital Markets -- Equity Analyst

All right, thanks. Good afternoon. Just a few follow-ups on the NASH: first, how should we think about the follow-on FXR agonist to be announced later this year? In what ways will it be differentiated from EDP-305, or the other FXRs in development from NASH, and is it possible this follow-on candidate could eventually become your lead FXR agonist for NASH?

Jay R Luly, Ph.D. -- President, Chief Executive Officer and Director

Well, so starting with the last question, anything is possible. I guess, No. 1, we have to harvest the finalists, and we have certainly some very, very strong contenders that we're choosing among right now, and again, our aim was to try come up with things that are as good as we can find out there, and that would include EDP-305, our current lead.

What we have done, we set out years ago since we didn't license this stuff in from anywhere; we sort of built the program from scratch, we've been working on multiple different classes of FXRs for years, and 305 is a member of one class. We certainly have some contenders that are in other classes that we're looking at. It's all the usual things: potency, safety, efficacy, combinability, manufacturing properties, all kinds of other kinds of parameters that we're looking at in these potential candidates, and it's too early to say today what that final profile will look like, but we're hoping to -- again, iterate with a profile that could be potentially even better, and again, we'll just have to wait and see what that finalist molecule looks like, but we're very excited about the sort of runner-ups that we have right now, and it's just a question of making final selections, and then we'll -- again, aim to do that later in the year, and we'll have a lot more information about it at that time, including timelines that we're envisioning.

Patrick Trucchio -- Berenberg Capital Markets -- Equity Analyst

And then can you discuss the ASK-1, and its role in the pathogenesis of NASH, and you think an ASK-1 inhibitor would perhaps be more appropriate in earlier fibrosis-stage patients, or is it more the case where you have a more potent ASK-1 inhibitor, it could be an effective mechanism also in later fibrosis-stage patients, as well?

Jay R Luly, Ph.D. -- President, Chief Executive Officer and Director

Yeah, I would really be just speculating on those fine points. I mean, I think the home run, although it was an uber-aggressive one, but it was one worth taking, and Gilead's to be commended for running STELLAR-4, because these patients are really hurting. They come pre-diagnosed, and there's clearly a need to treat them. I think most people are gonna be swinging for F2s and F3s, in terms of a pro file, but whether -- I think at the end of the day, single mechanisms are probably, in NASH, gonna be sub-optimal versus what you can do with multiple mechanisms, and -- again, every successful drug in a lot of these spaces -- for every mechanism gets sorted out by having a drug that really works, and demonstrates the power of that mechanism clinically, certainly pre-clinically there's a lot of data around ASK-1, but if you don't make that translation, you have a bunch of preclinical data.

But I think, again, we've been focused on creating with ASK-1, like all of our other programs, very selective, highly potent molecules that we can hopefully dose hard, and I think, unfortunately, right now, based on STELLAR-3 and STELLAR-4 failures, there's still just a few questions with ASK-1 that we need to answer ourselves before we press hard ahead.

Patrick Trucchio -- Berenberg Capital Markets -- Equity Analyst

That's really helpful, thank you.

Jay R Luly, Ph.D. -- President, Chief Executive Officer and Director

You're welcome

Operator

There are no further questions. I'll turn the call back to Carol Miceli for any closing remark.

Carol Miceli -- Director, Investor Relations

Thank you, everyone, for joining us today. If you have any additional questions, feel free to give us a call back in the office. Thank you.

Operator

This concludes today's conference call; you may now [audio cuts off].

Duration: 44 minutes

Carol Miceli -- Director, Investor Relations

Jay R Luly, Ph.D. -- President, Chief Executive Officer and Director

Paul J Mellett -- Chief Financial Officer

Brian Abrahams -- RBC Capital Markets -- Analyst

Paul O'Brien -- ROTH Capital Partners -- Analyst

Eric Joseph -- J.P. Morgan -- Biotech Analyst

Jay Olson -- Oppenheimer -- Analyst

Jack Allen -- Baird -- Equity Research Associate

Patrick Trucchio -- Berenberg Capital Markets -- Equity Analyst

More ENTA analysis

This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability.

10 stocks we like better than Enanta Pharmaceuticals
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has quadrupled the market.*

David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Enanta Pharmaceuticals wasn't one of them! That's right -- they think these 10 stocks are even better buys.

See the 10 stocks

*Stock Advisor returns as of March 1, 2019