Quarterly Report for Quarter Ending March 31, 2026 (Form 10-Q)

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the unaudited condensed consolidated financial statements and notes thereto included elsewhere in this Quarterly Report on Form 10-Q, or Form 10-Q, and the audited consolidated financial statements and notes thereto for our fiscal year ended September 30, 2025 included in our Annual Report on Form 10-K for that fiscal year, which is referred to as our 2025 Form 10-K. Please refer to our note regarding forward-looking statements on page 2 of this Form 10-Q, which is incorporated herein by this reference.

The Enanta name and logo are our trademarks. This Form 10-Q also includes trademarks, trade names and service marks of other persons. All other trademarks, trade names and service marks appearing in this Form 10-Q are the property of their respective owners.

Overview

We are a biotechnology company that uses our robust, chemistry-driven approach and drug discovery capabilities to discover and develop small molecule drugs for virology and immunology indications.

Virology:

We discovered glecaprevir, the second of two antiviral protease inhibitors developed through our collaboration with AbbVie for the treatment of acute or chronic infection with hepatitis C virus, or HCV. Glecaprevir is co-formulated as part of AbbVie's leading brand of direct-acting antiviral, or DAA, combination treatment for HCV, which has been marketed under the tradenames MAVYRET® (U.S.) and MAVIRET® (ex-U.S.) (glecaprevir/pibrentasvir) since 2017 for the treatment of chronic HCV. MAVYRET® was also approved as the first and only treatment for acute HCV infection in June 2025.

Our active development programs in virology are focused on respiratory syncytial virus, or RSV, the most common cause of bronchiolitis and pneumonia in young children and a significant cause of respiratory illness in older adults. Populations at high risk for severe RSV infection include infants and young children, adults older than 65 years of age, and those with comorbidities such as chronic heart or lung disease. Recent CDC estimates suggest a significant RSV burden in the U.S., with up to 6.5 million outpatient visits, 350,000 hospitalizations and 23,000 deaths annually.

We also have clinical-stage programs in virology for SARS-CoV-2, the virus that causes COVID-19, and Hepatitis B virus, or HBV, the most prevalent chronic hepatitis.

Immunology:

In immunology, we are designing and developing highly potent and selective, oral small molecule inhibitors for the treatment of type 2 inflammatory disease by targeting key mechanisms of the immune response. An overactive immune response is a primary driver of a number of inflammatory diseases for which there is an enduring unmet need including atopic dermatitis, or AD, urticarias, asthma, prurigo nodularis, or PN, chronic rhinosinusitis with nasal polyps, or CRSwNP, as well as some forms of chronic obstructive pulmonary disease, or COPD, and other conditions. Based on industry reports, by 2030 the market is projected to be approximately $5 billion for urticaria, $30 billion for AD and $35 billion for the combined market of asthma, COPD, CRSwNP, and PN.

Our initial immunology targets involve the following mechanisms of immune response:

These mechanisms are implicated, along with others, in several diseases, and it is not uncommon for an efficacious treatment for one disease to be tested and approved for other immunology indications. In addition, these mechanisms are orthogonal approaches that may provide additive or complementary benefit if used in combination. We currently plan to focus our initial immunology drug development, proof-of-concept efforts on the following disease indications:

As of March 31, 2026, we had $227.0 million in cash, cash equivalents and short-term and long-term marketable securities. Based on our operating plan, we believe that our existing cash, cash equivalents and short-term and long-term marketable securities as of March 31, 2026, as well as the cash flows from our retained portion of future HCV royalties, will enable us to fund our operating expenses and capital expenditure requirements into fiscal 2029.

Our Wholly-Owned Programs

All of our development programs are wholly-owned, including our RSV and immunology programs.

RSV. We have two clinical stage candidates for RSV - zelicapavir (formerly EDP-938) and EDP-323. Both candidates inhibit viral replication and the production of new virions. These clinical candidates differ from fusion inhibitors, which act only at viral entry. Zelicapavir, which has Fast Track designation from the U.S. Food and Drug Administration, or FDA, is a potent inhibitor of the RSV N-protein. EDP-323, which also has a Fast Track designation from the FDA, is an inhibitor of the RSV L-protein.

In these Phase 2 clinical studies, zelicapavir has demonstrated a favorable safety profile, consistent with that observed in over 700 subjects exposed to zelicapavir to date, as well as antiviral activity and reductions in symptom duration. We are continuing to conduct enabling activities for a pivotal study of zelicapavir in high-risk patients with RSV, including engaging with the FDA on the registrational development path. We plan to provide an update on the study design and development path in the second quarter of 2026. In parallel, we are exploring potential business development opportunities related to our RSV programs.

Immunology. We are leveraging our expertise in developing small molecule inhibitors to design and develop highly potent and selective oral medicines targeting the following mechanisms of immune response:

We have utilized our internal chemistry and drug discovery capabilities to generate all of our development-stage programs. We continue to invest substantial resources in research programs to discover compounds targeting new disease areas.

The following table summarizes our product development pipeline in our virology and immunology programs:

*Fixed-dose antiviral combination contains glecaprevir and AbbVie's NS5A inhibitor, pibrentasvir. Marketed by AbbVie as MAVYRET® (U.S.) and MAVIRET® (ex-U.S.).

**Continued development dependent on a future collaboration.

***Initial indications. Potential future indications include asthma, chronic inducible urticaria (CIndU), eosinophilic esophagitis (EoE); prurigo nodularis (PN), migraine and others.

Our Royalty Revenue Collaboration and Royalty Sale Agreement

Our royalty revenue is generated through our Collaborative Development and License Agreement with AbbVie, under which we have discovered and out-licensed to AbbVie two protease inhibitor compounds that have been clinically tested, manufactured, and commercialized by AbbVie as part of its combination regimens for HCV.

Glecaprevir is the HCV protease inhibitor we discovered that was developed by AbbVie in a fixed-dose combination with its NS5A inhibitor, pibrentasvir, for the treatment of chronic HCV. In June 2025 it was also approved by the FDA as the first and only treatment for acute HCV infection. This patented combination, currently marketed under the brand names MAVYRET® (U.S.) and MAVIRET® (ex-U.S.), is referred to in this report as MAVYRET/MAVIRET. The first protease inhibitor developed through this collaboration, paritaprevir, is part of AbbVie's initial HCV regimens, which have been almost entirely replaced by MAVYRET/MAVIRET. Since August 2017, substantially all of our royalty revenue has been derived from AbbVie's net sales of MAVYRET/MAVIRET. Our ongoing royalty revenues from this regimen consist of annually tiered, double-digit, per-product royalties on 50% of the calendar year net sales of the glecaprevir/pibrentasvir combination in MAVYRET/MAVIRET. The annual royalty tiers return to the lowest tier for sales on and after each January 1.

In April 2023, we entered into a royalty sale agreement with an affiliate of OMERS, a Canadian public employee pension fund, pursuant to which we were paid a $200.0 million cash purchase price in exchange for 54.5% of our future quarterly royalty payments on net sales of MAVYRET/MAVIRET, after June 30, 2023, through June 30, 2032, subject to a cap on aggregate payments to OMERS equal to 1.42 times the purchase price.

For accounting purposes, we continue to record 100% of HCV royalties earned under the AbbVie agreement as royalty revenue in our consolidated statements of operations. The $200.0 million received in April 2023 was recognized on our condensed consolidated balance sheets as a liability, which will be reduced by the payments made to OMERS over the term of the Agreement. We recognize imputed interest expense over the life of the royalty sale agreement based on our estimated future MAVYRET/MAVIRET royalties.

Financial Operations Overview

We are currently funding all research and development for our wholly-owned programs, which are targeted toward the discovery and development of novel compounds. We are currently conducting enabling activities for a pivotal study of zelicapavir in high-risk patients with RSV. In addition, we initiated a Phase 1 clinical trial of EDP-978, our lead immunology program. We are also continuing to conduct pre-clinical discovery research efforts in immunology.

As a result of the timing of our clinical and pre-clinical development programs, we expect our research and development expenses will fluctuate from period to period. In the next 12 months, we expect a reduction in our external research and development expenses, primarily driven by the timing of clinical trials in our RSV programs.

To date, we have funded our operations primarily through royalty payments received under our collaboration agreement with AbbVie, a $200.0 million payment received in April 2023 from our royalty sale agreement and our existing cash, cash equivalents and short-term and long-term marketable securities. Based on our operating plan, we believe that our existing cash, cash equivalents and short-term and long-term marketable securities, as well as the cash flows from our retained portion of future HCV royalties, will enable us to fund our operating expenses and capital expenditure requirements into fiscal 2029.

Revenue

Our revenue is primarily derived from our collaboration agreement with AbbVie and AbbVie's sales of MAVYRET/MAVIRET, an 8-week treatment regimen for acute or chronic HCV.

The following table is a summary of revenue recognized for the three and six months ended March 31, 2026 and 2025:

As disclosed above regarding our OMERS royalty sale agreement, we only retain 45.5% of the cash payments from royalties on net sales of MAVYRET/MAVIRET occurring after June 30, 2023 through June 30, 2032, subject to a cap on aggregate payments to OMERS equal to 1.42 times OMERS' purchase price.

Internal Programs

As our internal product candidates are currently in pre-clinical or clinical development, we have not generated any revenue from our own product sales. We do not expect to generate any revenue from product sales derived from these product candidates for at least the next several years.

Operating Expenses

Our operating expenses are comprised of research and development expenses and general and administrative expenses.

Research and Development Expenses

Research and development expenses consist of costs incurred to conduct basic research, such as the discovery and development of novel small molecules as therapeutics, as well as any external expenses of pre-clinical and clinical development activities. We expense all costs of research and development as incurred. These expenses consist primarily of:

At any given time, we have later stage programs in clinical development as well as several active early-stage research and drug discovery projects. Our internal resources, employees and infrastructure are utilized across multiple projects, including our early-stage discovery projects. As such, we report information regarding costs incurred based on our programs (i.e., disease area) rather than on a project specific basis. All indirect costs are allocated to programs based on headcount and square footage of our facilities. We expect that our research and development expenses will fluctuate from period to period as we advance our research and development programs. However, in the next 12 months, we expect a reduction in our external research and development expenses, primarily driven by the timing of clinical trials in our RSV programs. To date, we have not identified any significant impact of inflation on spending in research and development, but it is uncertain whether there will be inflationary impacts in future periods.

Our research and drug discovery and development programs are in early stages; therefore, the successful development of our product candidates is highly uncertain and may not result in approved products. Completion dates and completion costs can vary significantly for each product candidate and are difficult to predict. Given the uncertainty associated with clinical trial enrollments and the risks inherent in the development process, we are unable to determine the duration and completion costs of the current or future clinical trials of our product candidates or if, or to what extent, we will generate revenue from the commercialization and sale of any of our product candidates. We anticipate that we will make determinations as to which development programs to pursue and how much funding to direct to each program on an ongoing basis in response to the pre-clinical and clinical success and prospects of each product candidate, as well as ongoing assessments of the commercial potential of each product candidate.

General and Administrative Expenses

General and administrative expenses consist primarily of personnel costs, which include salaries, related benefits and stock-based compensation, of our executive, finance, business and corporate development and other administrative functions. General and administrative expenses also include allocated facility-related costs not otherwise included in research and development expenses, directors' and officers' liability insurance premiums, professional fees for auditing, tax, and legal services, patent expenses and litigation expenses associated with prosecuting our patent infringement litigation.

We expect that general and administrative expenses may increase in the long term. To date we have not experienced a significant impact of inflation on general and administrative expenses.

Other Income (Expense)

Other income (expense) consists of interest expense, interest and investment income, net and the change in fair value of our outstanding Series 1 nonconvertible preferred stock. Interest expense consists of the interest expense and amortization of debt issuance costs associated with the royalty sale agreement with an affiliate of OMERS. Interest income consists of interest earned on our cash

equivalents and marketable securities balances. Investment income consists of the amortization or accretion of any purchased premium or discount, respectively, on our marketable securities. The change in fair value of our Series 1 nonconvertible preferred stock relates to the remeasurement of these financial instruments from period to period as these instruments may require a transfer of assets because of the liquidation preference features of the underlying instrument.

Income Tax (Expense) Benefit

Income tax (expense) benefit is based on our best estimate of taxable net income (loss), applicable income tax rates, net research and development tax credits and carryforwards, net operating loss carrybacks and interest earned on such refunds, changes in valuation allowance estimates and deferred income taxes.

Results of Operations

Comparison of the Three Months Ended March 31, 2026 and 2025

Revenue

We recognized revenue of $17.2 million during the three months ended March 31, 2026 as compared to $14.9 million during the three months ended March 31, 2025. The $2.2 million increase in revenue was primarily due to AbbVie's higher reported HCV sales as compared to the same period in 2025.

Our royalty revenues eligible to be earned in the future will depend on AbbVie's HCV market share, the pricing of the MAVYRET/MAVIRET regimen, the number of patients treated and the effect of the label expansion for MAVYRET in the United States for the treatment of patients with acute HCV. In addition, at the beginning of each calendar year (the second quarter of our fiscal year), our royalty rate resets to the lowest tier for each of our royalty-bearing products licensed to AbbVie.

Beginning with the three months ended September 30, 2023, 54.5% of our quarterly royalty payments on net sales of MAVYRET/MAVIRET that are included in our total revenue are paid to OMERS through June 30, 2032, subject to a cap on aggregate payments equal to 1.42 times the purchase price. The $200.0 million received in April 2023 was recognized on our condensed consolidated balance sheets as a liability which will be reduced by the payments made to OMERS over the term of the royalty sale agreement. We will continue to record 100% of HCV royalties earned under the AbbVie Agreement as royalty revenue in our condensed consolidated statements of operations since the AbbVie Agreement has not been amended and is independent of our agreement with OMERS.

Research and development expenses

Research and development expenses for the three months ended March 31, 2026 decreased by $8.6 million compared to the same period in 2025.

Virology

The costs in our virology programs decreased by $12.9 million due to the timing of clinical trials in our RSV programs.

Immunology

The costs in our immunology programs increased by $3.0 million due to scale-up and IND-enabling activities for such programs.

Other Programs

Other program costs increased by $1.3 million as we advanced early-stage drug discovery efforts.

General and administrative expenses

General and administrative expenses decreased by $1.8 million for the three months ended March 31, 2026 compared to the same period in 2025. The decrease was primarily due to lower stock-based compensation expenses during the three months ended March 31, 2026.

Other income (expense)

Changes in components of other income (expense) were as follows:

Interest expense

Interest expense increased by $1.6 million for the three months ended March 31, 2026, as compared to the same period in 2025, due to an increase in royalties arising from AbbVie's product sales under the AbbVie Agreement and corresponding royalty payment to OMERS arising from such sales pursuant to our OMERS royalty sales agreement.

Interest and investment income, net

Interest and investment income, net, decreased by $0.2 million for the three months ended March 31, 2026, as compared to the same period in 2025. The decrease was due to lower interest rates year over year.

Income tax (expense) benefit

The income tax expense of less than $0.1 million during the three months ended March 31, 2026 was primarily due to state income taxes. The income tax benefit during the three months ended March 31, 2025 was primarily due to an additional federal income tax refund from a net operating loss carryback of $0.9 million. We received the federal income tax refund of $33.8 million, inclusive of interest, in April 2025.

On July 4, 2025, the U.S. government enacted the One Big Beautiful Bill Act, which includes several changes to U.S. federal income tax law, including the temporary and permanent extension of expiring provisions of the Tax Cuts and Jobs Act of 2017, such as 100% bonus depreciation and immediate expensing of domestic research and development costs. The new legislation has multiple effective

dates, with certain provisions effective in 2025 and others in the future. We determined that the legislation does not have a material impact on our condensed consolidated financial statements for the three and six months ended March 31, 2026.

Results of Operations

Comparison of the Six Months Ended March 31, 2026 and 2025

Revenue

We recognized revenue of $35.8 million during the six months ended March 31, 2026 as compared to $31.9 million during the six months ended March 31, 2025. The $3.9 million increase in revenue was primarily due to AbbVie's higher reported HCV sales as compared to the same period in 2025.

Research and development expenses

Research and development expenses for the six months ended March 31, 2026 decreased by $15.4 million compared to the same period in 2025.

Virology

The costs in our virology program decreased by $26.4 million due to the timing of our clinical trials in our RSV program.

Immunology

The costs in our immunology programs increased by $8.5 million due to scale-up and IND-enabling activities for such programs.

Other Programs

Other program costs increased by $2.4 million as we advanced early-stage drug discovery efforts.

General and administrative expenses

General and administrative expenses decreased by $5.7 million for the six months ended March 31, 2026 compared to the same period in 2025. The decrease was primarily due to lower stock-based compensation expenses during the six months ended March 31, 2026 and a decrease in legal expenses related to our patent infringement suit against Pfizer for the '953 Patent.

Other income (expense)

Changes in components of other income (expense) were as follows:

Interest expense

Interest expense increased by $2.7 million for the six months ended March 31, 2026, as compared to the same period in 2025 due to an increase in royalties arising from AbbVie's product sales under the AbbVie Agreement and corresponding royalty payment to OMERS arising from such sales pursuant to our OMERS royalty sales agreement.

Interest and investment income, net

Interest and investment income, net, decreased by $0.6 million for the six months ended March 31, 2026, as compared to the same period in 2025. The decrease was due to lower interest rates year over year.

Income tax (expense) benefit

The income tax expense of less than $0.1 million during the six months ended March 31, 2026 was primarily due to state income taxes. The income tax benefit during the six months ended March 31, 2025 was primarily due to an additional federal income tax refund from a net operating loss carryback of $0.9 million. We received the federal income tax refund of $33.8 million, inclusive of interest, in April 2025.

Liquidity and Capital Resources

We fund our operations with cash flows from our retained portion of our royalty revenue and our existing financial resources. At March 31, 2026, our principal sources of liquidity were cash and cash equivalents and short-term and long-term marketable securities of $227.0 million.

The following table shows a summary of our cash flows:

Net cash used in operating activities

Cash used in operating activities was $18.9 million for the six months ended March 31, 2026 as compared to cash used in operating activities of $30.3 million for the same period in 2025. Our cash used in operating activities decreased by $11.4 million primarily due to lower research and development payments.

Net cash (used in) provided by investing activities

Cash used in investing activities was $35.4 million for the six months ended March 31, 2026 as compared to cash provided by investing activities of $64.5 million for the same period in 2025. Our cash used in investing activities increased by $99.9 million, driven by the timing of purchases and maturities of marketable securities in 2026 compared to 2025.

Net cash provided by (used in) financing activities

Cash provided by financing activities was $56.8 million for the six months ended March 31, 2026 as compared to cash used in financing activities of $11.9 million for the same period in 2025. Our cash provided by financing activities increased by $68.7 million, driven primarily by proceeds received from our public offering which closed in October 2025.

Funding Requirements

As of March 31, 2026, we had $227.0 million in cash, cash equivalents and short-term and long-term marketable securities. Based on our operating plan, we believe that our existing cash, cash equivalents and short-term and long-term marketable securities as of March 31, 2026, as well as the cash flows from our retained portion of future HCV royalties, will enable us to fund our operating expenses and capital expenditure requirements into fiscal 2029. However, our projection of the period of time through which our financial resources will be adequate to support our operations is a forward-looking statement that involves risks and uncertainties, and actual results could vary materially.

Our future capital requirements are difficult to forecast and will depend on many factors, including:

Off-Balance Sheet Arrangements

We do not engage in any off-balance sheet financing activities. We do not have any interest in entities referred to as variable interest entities, which include special purpose entities and other structured finance entities.

Contractual Obligations and Commitments

Facility Leases

As of the date of this report, we lease space in Watertown, Massachusetts, under two separate lease agreements with one landlord.

In May 2022, we entered into a ten-year lease for new laboratory and office space in Watertown, Massachusetts, adjacent to our 400 Talcott Avenue premises at Arsenal on the Charles at 4 Kingsbury Avenue since our lease for office and laboratory space at 500 Arsenal Street was to expire on September 1, 2027. The construction of the facility shell was completed and we gained access to the building to construct tenant improvements during the three months ended March 31, 2024. Upon gaining access to the 4 Kingsbury Avenue building, we capitalized a right-of-use asset and lease liability of approximately $32 million on our consolidated balance sheets which reflects our fixed base rent payments, net of approximately $15 million of a tenant improvement allowance provided by the landlord, over the 10-year term of the lease. The 4 Kingsbury Avenue lease ends on September 30, 2034.

In conjunction with the commencement of our lease at 4 Kingsbury Avenue, during the three months ended March 31, 2024, we adjusted our 500 Arsenal Street lease liability to shorten the expiration date from September 2027 to the date the 4 Kingsbury Avenue building became ready for our occupancy. This resulted in a decrease in the lease liability and right-of-use asset on our consolidated balance sheets by approximately $9.0 million. The rent commencement date for our 4 Kingsbury Avenue lease was September 12, 2024, and we moved into the space in November 2024, at which time our lease at 500 Arsenal Street expired.

The second lease for office space located at 400 Talcott Avenue commenced on September 24, 2018 for a term of six years. In May 2022, we amended this lease to expand the rented space and extend the lease term through June 1, 2034. We spent approximately $6.3 million in capital expenditures for the additional space, which primarily relate to tenant improvements. We received a tenant improvement allowance from the landlord of $2.5 million. In July 2024, we amended our lease agreement to confirm alignment with the lease end date of our 4 Kingsbury Avenue lease at September 30, 2034.

Total estimated minimum lease payments for the next 5 years and thereafter under our existing facility and leased equipment agreements are $4.2 million for the remainder of 2026, $8.7 million in 2027, $9.0 million in 2028, $9.3 million in 2029, $9.5 million in 2030, and $41.1 million thereafter.

OMERS Agreement

In April 2023, we entered into a royalty sale agreement with an affiliate of OMERS, pursuant to which we were paid a $200.0 million cash purchase price in exchange for 54.5% of our future quarterly royalty payments on net sales of MAVYRET/MAVIRET after June 30, 2023, through June 30, 2032, subject to a cap on aggregate payments equal to 1.42 times the purchase price.

The $200.0 million received in April 2023 was recognized on our condensed consolidated balance sheets as a liability which will be reduced by the payments made to OMERS over the term of the Agreement.

Preferred Stock

As of March 31, 2026, we had 1.9 million outstanding shares of Series 1 nonconvertible preferred stock, all of which we classified as a long-term liability on our consolidated balance sheet and recorded at fair value of $1.3 million. The fair value of the preferred stock was measured based on significant inputs not observable in the market, which represented a Level 3 measurement within the fair value hierarchy. The fair value of these instruments represents less than 10% of liabilities as of March 31, 2026. The Series 1 nonconvertible preferred stock issued would require the payment of $2.0 million in the event of a qualifying merger or sale of the company.

Critical Accounting Policies

Our condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of our condensed consolidated financial statements and related disclosures requires us to make estimates and assumptions that affect the reported amount of assets, liabilities, revenue, costs and expenses, and related disclosures. We evaluate our estimates and assumptions on an ongoing basis. Our actual results may differ from these estimates under different assumptions and conditions. See our 2025 Form 10-K for information about our critical accounting policies as well as a description of our other significant accounting policies. There have been no significant changes to our critical accounting policies since the beginning of this fiscal year.

Recently Issued Accounting Pronouncements

A description of recently issued accounting pronouncements that may potentially impact our financial position and results of operations is set forth in Note 2 to the condensed consolidated financial statements included in this Form 10-Q.