When Jay Luly took the reins at a privately-held biotech startup called Enanta Pharmaceuticals in 2003, he thought he was in for a quick fix. A floundering biotech based on a peptide-morphing technology, Enanta needed a new direction. He was an entrepreneur-in-residence at a venture firm at the time, which is a sort of gig for an entrepreneur between gigs. Enanta looked to him to help turn the Watertown, MA-based company into something totally different—a drug developer.
“I jumped in for what I thought would be a shallow dive to get that going,” Luly says.
It’s turned out to be much deeper than that. Some 11 years later, Luly is still the president and CEO of Enanta (NASDAQ: [[ticker:ENTA]]), and it’s nothing like the teetering enterprise he took over all those years ago. Enanta’s now a publicly-traded company worth more than $500 million. Its shares are worth about $31 apiece, more than double the $14 figure it debuted at in March. And through a variety of reinventions, strategic partnerships, and early intellectual property work, it’s set itself up to become one of the biggest beneficiaries of the new all-oral, interferon-free treatment regimens that are beginning to dominate the landscape of hepatitis C.
Indeed, within the next year or so, Enanta’s got a good chance to get $195 million from AbbVie. The big drugmaker from Chicago is developing a treatment Enanta helped create, ABT-450, as part of a massive slate of late-stage clinical trials for hepatitis C that’ll wrap up in 2014. Should AbbVie file applications with regulators, and win approval, that $195 million will flow to Enanta. Just how much share of the market AbbVie will be able to take from Gilead Sciences (NASDAQ: [[ticker:GILD]]) and its powerhouse sofusbuvir (Sovaldi) is open for debate, of course. Enanta traded worldwide rights to ABT-450 to AbbVie for a series of milestone payments, and royalty streams, long ago, and has since declined an option to pick up 40 percent of the U.S. profits in exchange for a like-sized share of the development and commercialization costs. That means AbbVie is the company in line to potentially pull in billions in sales, leaving Enanta a relatively small share of the proceeds. Even so, it’s a big turnaround from where Enanta was when Luly first walked in the door in 2003.
“It was hard. There were certainly harrowing financial moments,” Luly says, looking back to his early days. “Probably the hardest part is trying to be competitive and do everything that you want to do when you’ve got really limited private company resources. But the flip side is it makes you smarter, it makes you more efficient with capital, it makes you prioritize, it makes you work really hard to make things successful, and it gives you all the right sort of motivations for success in a way.”
Luly is a chemist by training. He worked at Abbott Laboratories, LeukoSite, and Millennium Pharmaceuticals in the ‘80s and ‘90s. Eventually he settled in as an entrepreneur-in-residence at Oxford Bioscience Partners in 2002. One of Oxford’s portfolio companies was Enanta, which incidentally had a chief scientific officer—Yat Sun Or—who had worked previously as a scientist with Luly at Abbott.
That company, however, was lost. Enanta was originally incorporated in 1995 and started out as a platform company, built on a technology out of Harvard University that was designed to take peptide molecules and morph them into small molecules that had better characteristics. But the plan wasn’t working—“it didn’t materialize into what people had hoped for,” Luly says—and the technology was returned to Harvard. Luly was then brought in to help reshape Enanta, and turn it into a “products” company. A drug developer.
That, it turned out, would take a lot of work. Enanta was in need of
