Business description of ENANTA-PHARMACEUTICALS-INC

Overview

We are a research and development-focused biotechnology company that uses its robust chemistry-driven approach and drug discovery capabilities to create small molecule drugs in the infectious disease field. We are discovering and developing inhibitors designed for use against the hepatitis C virus, referred to as HCV. We believe that a successful approach to a complete cure for HCV in most patients will likely require treatment with a combination of drugs that attack different mechanisms necessary for replication and survival of HCV. Further, as there are many variants of HCV, we are developing inhibitors that may be used in multiple combination therapies, each designed and tested for effectiveness against one or more of those variants. Our development of inhibitors for validated HCV target mechanisms, as well as our collaborations with AbbVie (which name refers to Abbott Laboratories for all periods before January 1, 2013) and Novartis, should allow us to participate in multiple drug combinations as we and our collaborators seek the best combination therapies for HCV in its various forms. We estimate that total worldwide sales of HCV therapies were over $4 billion in 2012, and we expect that sales will continue to grow with the anticipated introduction of new therapies. In addition to our HCV programs, we have used our internal research capabilities to discover a new class of antibiotics, which we are developing for the treatment of multi-drug resistant bacteria, including MRSA. We have utilized our internal chemistry and drug discovery capabilities and our collaborations to generate all of our development-stage programs, and we have active research efforts to broaden our infectious disease drug pipeline.

Our HCV portfolio includes inhibitors of four fundamental, validated HCV targets:

In November and December 2013 AbbVie released preliminary results from the first two of these clinical trials, SAPPHIRE-I and SAPPHIRE-II, which were the first announced Phase 3 trial results of any company for an all-oral, interferon-free therapy in genotype 1 HCV patients. SAPPHIRE-I was a 631-patient trial of previously untreated, or naïve, adult patients and SAPPHIRE-II was a 394-patient trial of treatment-experienced adult patients who had previously failed pegylated interferon and ribavirin treatment. Both of these trials demonstrated after 12 weeks of treatment that 96% of patients treated with the new regimen had no quantifiable virus in their blood 12 weeks after treatment, also known as SVR₁₂. AbbVie has guided that preliminary results from the remaining four phase 3 trials will be released during 2013 and into early 2014. AbbVie has publicly projected that its development plan would support a target commercial launch of a combination HCV therapy in early 2015. We believe that we, together with AbbVie, will obtain exclusivity in ABT-450 in the United States and other major market jurisdictions based on pending composition and use patent claims for ABT-450, which we expect will continue at least into 2029, assuming all such patents issue.


ENANTA PHARMACEUTICALS, INC.

By:		/s/ Jay R. Luly, Ph.D.
		Jay R. Luly, Ph.D.
		Chief Executive Officer


	Series C, D, E, F and G Redeemable Convertible Preferred Stock						Series A and B Convertible Preferred Stock						Common Stock				Additional Paid-in Capital			Treasury Stock						Accumulated Other Compre- hensive Income (Loss)			Accumulated Deficit			Total Stockholders’ Equity (Deficit)
	Shares			Amount			Shares			Amount			Shares		Amount		Additional Paid-in Capital			Shares			Amount			Accumulated Other Compre- hensive Income (Loss)			Accumulated Deficit			Total Stockholders’ Equity (Deficit)
Balance at September 30, 2010		43,115,343		$	148,134			566,450		$	327			1,209,464	$	12	$	—			(71,926	)	$	(1	)	$	—		$	(150,086	)	$	(150,075	)
Exercise of stock options		—			—			—			—			16,435		—		34			—			—			—			—			34
Restricted common stock forfeited by former employees		—			—			—			—			—		—		1			(136,890	)		(1	)		—			—			—
Compensation expense related to stock options		—			—			—			—			—		—		225			—			—			—			—			225
Accretion of redeemable convertible preferred stock to redemption value		—			5,454			—			—			—		—		(260	)		—			—			—			(5,194	)		(5,454	)
Other comprehensive loss		—			—			—			—			—		—		—			—			—			(1	)		—			(1	)
Net income		—			—			—			—			—		—		—			—			—			—			23,310			23,310

Balance at September 30, 2011		43,115,343			153,588			566,450			327			1,225,899		12		—			(208,816	)		(2	)		(1	)		(131,970	)		(131,961	)
Exercise of stock options		—			—			—			—			117,248		1		140			—			—			—			—			141
Compensation expense related to stock options		—			—			—			—			—		—		424			—			—			—			—			424
Accretion of redeemable convertible preferred stock to redemption value		—			5,367			—			—			—		—		(564	)		—			—			—			(4,803	)		(5,367	)
Other comprehensive income		—			—			—			—			—		—		—			—			—			11			—			11
Net income		—			—			—			—			—		—		—			—			—			—			21,399			21,399

Balance at September 30, 2012		43,115,343			158,955			566,450			327			1,343,147		13		—			(208,816	)		(2	)		10			(115,374	)		(115,353	)
Exercise of stock options		—			—			—			—			538,575		5		554			—			—			—			—			559
Compensation expense related to stock options		—			—			—			—			—		—		1,063			—			—			—			—			1,063
Accretion of redeemable convertible preferred stock to redemption value		—			2,526			—			—			—		—		(823	)		—			—			—			(1,703	)		(2,526	)
Conversion of preferred stock to common stock		(43,115,343	)		(161,481	)		(566,450	)		(327	)		11,656,875		117		161,691			—			—			—			—			161,808
Issuance of common stock upon initial public offering		—			—			—			—			4,600,000		46		59,846			—			—			—			—			59,892
Issuance costs		—			—			—			—			—		—		(4,590	)		—			—			—			—			(4,590	)
Other comprehensive loss		—			—			—			—			—		—		—			—			—			(12	)		—			(12	)
Net income		—			—			—			—			—		—		—			—			—			—			9,627			9,627

Balance at September 30, 2013		—		$	—			—		$	—			18,138,597	$	181	$	217,741			(208,816	)	$	(2	)	$	(2	)	$	(107,450	)	$	110,468

Business description of ENANTA-PHARMACEUTICALS-INC from last 10-k form