Enanta Pharmaceuticals Inc. (NASDAQ: ENTA) shares dropped on Thursday after the company announced topline results from its Argon-1 Phase 2a study of EDP-305 for the treatment of non-alcoholic steatohepatitis (NASH).

Ultimately, the results were positive, and although the stock is down, this seems to be a case of “sell the news.”

The primary objectives of the study were to evaluate change in alanine transaminase (ALT) levels at week 12 and to evaluate the safety and tolerability of EDP-305. Key secondary objectives included change in liver fat content, change in lipids and pharmacokinetics and pharmacodynamic parameters.

The study’s primary endpoint was achieved, with a statistically significant ALT reduction compared with the placebo arm at week 12.

As with the primary endpoint, there was a statistically significant reduction in liver fat content with EDP-305.

Jay R. Luly, Ph.D., president and CEO, commented:

Today’s statistically significant results demonstrate that EDP-305 is a potent FXR agonist that reduces ALT and has exhibited strong target engagement in NASH subjects. Additionally, EDP-305 is differentiated from other FXR agonists in development today by its significant reduction in liver fat at 12 weeks. Our goal now is to initiate a 72-week Phase 2b study named ARGON-2 with histological endpoints in NASH patients, which we plan to initiate in the first half of calendar 2020.

Shares of Enanta traded down 16% to $59.87 Thursday morning, in a 52-week range of $58.33 to $106.80. The consensus price target is $109.00.

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