Deutsche Bank: Buy Enanta Pharma And Its Near-Term Upside

In a report published Monday, Deutsche Bank analysts imitated coverage of Enanta Pharmaceuticals, Inc ENTA with a Buy rating and a price target of $42. Enanta is a small cap HCV company that is partnered with big cap Abbvie selling Viekira. With concerns surrounding investments in HCV at all time highs, Enanta's shares have declined by 33% so far this year. The analysts add, however, that the company "is uniquely positioned to benefit from a potential big windfall of annual HCV sales." Abbvie estimates, of about 27% exclusive share among contracted lives so far, suggests that the 1Q US consensus of about $212M could be conservative. The analysts expect demand to be about $315M in the first quarter. "Similarly, the increased access could lead to a beat on 2015 US Viekira consensus of ~$2.1B (we model ~$2.4B). We see the 2015 exit run rate at ~$3.2B vs. the company guidance of ‚>$3B‛ for HCV." Enanta could receive an additional $80M in cash in FY15 from a $50M and $30M approval milestones in EU and Japan, respectively. Abbvie expects to receive approval in Japan in the first half of this year. The analysts expect the Japan milestone to be paid in Enanta's FY4Q15 as compared to the Street's assumption of 2016. "Insights from our proprietary HCV survey suggest near-term volumes in the next two years may surprise & confirm IMS analysis," the report adds. This is a positive for Enanta.