Genfit: H1 2019 Results and R&D Pipeline Progression
GENFIT: H1 2019 RESULTS AND R&D PIPELINE PROGRESSION
- Cash position of €282 million (€207 million at December 31, 2018)
- USD $155 million gross proceeds from the IPO on the Nasdaq Global Select market
- Signature of a license agreement with Labcorp to expand access to NIS4, a non-invasive diagnostic test to identify and monitor NASH patients, in the clinical research field
- Signature of a license and collaboration agreement with Terns Pharmaceuticals, granting a license to develop and market elafibranor in NASH and PBC in Greater China
- Launch of a pediatric phase 2 clinical trial evaluating elafibranor in children and adolescents with NASH
- Launch of a phase 2 clinical trial evaluating elafibranor’s activity on liver fat composition in NAFLD patients
- FDA grants elafibranor Breakthrough Therapy designation for treatment of adults with PBC
Lille (France), Cambridge (Massachusetts, United States), September 30, 2019 – GENFIT (Nasdaq and Euronext: GNFT), a late-stage biopharmaceutical company dedicated to the discovery and development of innovative therapeutic and diagnostic solutions in metabolic and liver related diseases, today announces its first half 2019 financial results. The Half Year Business and Financial Report is available to the public and was filed with the French Autorité des marchés financiers (French Financial Markets Authority) today. The condensed consolidated financial statements are included in this press release and the complete financial statements are available on the “Investors” page of the GENFIT website.
Pascal Prigent, Chief Executive Officer of GENFIT, commented:
“The first half of the year was particularly eventful for GENFIT, whether in terms of financial, organizational, clinical or commercial aspects of our business.
The listing of the Company's securities on the NASDAQ and the related fundraising brought our closing cash position to €282 million while also raising our profile in the United States. Our half-year financial results also reflect the effort and significant progress made in the development of our portfolio of R&D programs, including the launch of two new Phase 2 clinical trials. In addition, elafibranor’s potential in PBC was recognized by the major regulatory agencies, with the FDA's Breakthrough Therapy designation and Orphan Drug designation granted by both the FDA and EMA.
Our business development efforts to sign licensing agreements or collaboration agreements came to fruition with the signature of agreements with Labcorp and Terns Pharmaceuticals. We are preparing to ramp-up these efforts in 2020 if, as we hope, the intermediate results of the ongoing RESOLVE-IT Phase 3 trial evaluating the efficacy and safety of elafibranor in adult NASH are conclusive.
We have also been expanding our teams with the recruitment, during the first half of the year, of senior executives and experienced consultants, particularly to prepare for the potential market launch of elafibranor and NIS4 in NASH and, more broadly, to support the Company's international expansion and its gradual evolution towards a specialty biopharmaceutical company in liver diseases of metabolic origin and hepatobiliary diseases.
As we celebrate GENFIT’s 20th anniversary, we want to warmly thank the doctors and the many patients who have participated and still participate in our ongoing clinical trials, our shareholders, and more broadly all stakeholders who share our ambition to be able to offer, in the near future for our most advanced programs, treatments and diagnostic solutions aimed at meeting largely unmet medical needs. "
Main financial results:
Key aspects of the half-year 2019 results are:
- Cash and cash equivalents of €281.9 million at June 30, 2019 (€207.2 million at December 31, 2018).
- Operating income of €5.4 million (€5.1 million at June 30, 2018), essentially from the Research Tax Credit, which amounted to €5.3 million for the first half 2019 (€5 million in the preceding half year), reflecting the increase in operating expenses related to the progression of the R&D portfolio over the two half-years. Given the date of the signature of the agreement with Terns Pharmaceuticals (June 24, 2019) and the obligations thereunder, the revenues from the USD$35 million upfront payment will be recognized in the second half of 2019.
- Operating expenses of €51.3 million (€36.7 million at June 30, 2018) of which 76% represented R&D expenses. The increase in operating expenses is due to increases in:
-
- contracted research and development expenses (from €22.7 million at June 30, 2018 to €25.9 million at June 30, 2019) resulting from the start of new phase 3 RESOLVE-IT satellite studies, work necessary to prepare the new drug application for elafibranor in NASH, and the increase in production of active principal ingredient required to carry out the various clinical studies;
-
- employee-related expenses (from €6 million excluding share-based payments on June 30, 2018 to €10.8 million excluding share-based payments as of June 30, 2019) mainly due to an increase in headcount (174 vs 130 employees), changes in employee profiles, a related increase in salaries, as well as bonuses that were awarded to employees for their contribution to the Group’s development; and
-
- other operating expenses (from €5.9 million at June 30, 2018 to €9.8 million at June 30, 2019) mainly related to the cost of insurance premiums in relation to the listing of the Company’s shares on the Nasdaq, accounting and statutory auditor fees related to the listing, expenses for market access and pre-marketing projects.
As a result of changes in revenues and expenses, the net loss amounted to €51.1 million at June 30, 2019 (€36.7 million at June 30, 2018). The net loss for the 2018 was €79.5 million.
The table below presents the condensed Consolidated Statement of Operations under IFRS for the first half 2019, with comparative figures for the first half 2018.
Half-year ended | |||
(in € thousands, except earnings per share data) | 2018/06/30 | 2019/06/30 | |
corrected (*) | |||
Revenues and other income | |||
Revenue | 64 | 1 | |
Other income | 5 057 | 5 356 | |
Revenues and other income | 5 122 | 5 357 | |
Operating expenses and other operating income (expenses) | |||
Research and development expenses | (32 072) | (38 899) | |
General and administrative expenses | (4 565) | (12 402) | |
Other operating income (expenses) | (40) | 7 | |
Operating loss | (31 555) | (45 936) | |
Financial income | 331 | 1 755 | |
Financial expenses | (5 572) | (7 240) | |
Financial loss | (5 241) | (5 485) | |
Net loss before tax | (36 796) | (51 422) | |
Income tax expense | 121 | 289 | |
Net loss | (36 675) | (51 132) | |
Attributable to owners of the Company | (36 675) | (51 132) | |
Attributable to non-controlling interests | 0 | 0 | |
Basic and diluted loss per share | |||
Basic loss per share (€/share) | (1.18) | (1.64) |
*See note 6.3.3 “Correction of Errors” to the 2019 half year consolidated financial statements.
The condensed consolidated financial statements at June 30, 2019 under IFRS as well as the management discussion of the results are provided in the appendix at the end of this document. The full consolidated financial statements as well as statutory auditors’ report on the consolidated financial statements are included in appendices to the 2019 Half Year Business and Financial Report and available on the “Investors” page of the GENFIT website.
Key events of the first half 2019 and main post closing event
GENFIT’s R&D Programs
- Elafibranor development program in NAFLD/NASH
RESOLVE-IT Phase 3 study in NASH
Enrollment of patients in the RESOLVE-IT Phase 3 clinical trial of elafibranor in NASH progressed actively during the course of the first half 2019. All patients required for the interim analysis have already been enrolled and the last biopsy to be performed on the last patient required for the interim analysis is expected to occur in the fourth quarter of 2019. In May, the Company also announced the results of the 36 month review of the Data Safety Monitoring Board (DSMB), based on tolerability and safety data. The DSMB issued a positive recommendation for the continuation of the RESOLVE-IT Phase 3 trial in NASH without any modifications. This sixth DSMB planned review did not identify any safety issues, as was the case with the previous reviews.
Pediatric Program in NASH
In March, we announced protocol clearance by the FDA for a Phase 2 trial evaluating elafibranor in children and adolescents with non-alcoholic steatohepatitis (NASH).
The trial, which is enrolling patients, is designed as follows:
- Study to assess the pharmacokinetic and pharmacodynamic profile and the safety and tolerability of two dose levels of elafibranor (80 mg and 120 mg);
- 20 patients between 8 to 17 years of age, with NASH;
- 12-week trial duration;
- Open-label study;
- Randomized across two arms;
- U.S. multicenter study.
Disease awareness program in NASH
In 2017, the Company launched a disease awareness initiative through the endowment fund it founded, The NASH Education Program™, confirming its leadership in NASH, and sparked an unprecedented wave of interest in the French media. This initiative is crucial in the context of enrollment for a little known and asymptomatic pathology like NASH.
During the first half of 2019, the Company continued its disease awareness effort by participating in the 2nd Annual International NASH Day that was organized on June 12, 2019 by the Global Liver Institute, with support from organizations including the American Liver Foundation, EASL International Liver Foundation, European Liver Patients Association, NASH Knowledge and Fatty Liver Foundation.
Opportunities in NASH combination therapy
After having identified several molecules having a synergistic activity with elafibranor, we presented our ongoing approach to evaluating elafibranor as the basis for combination therapies in NASH during the 2019 International Liver Congress (ILC), which was held in Vienna, Austria from April 10-14, 2019. The abstract of the poster presented at the ILC “Elafibranor, a drug candidate for first line NASH monotherapy and a universal backbone for drug combination treatment,” is available on the ILC’s website.
In May and on this basis, we announced our intention to launch a Phase 2 study to evaluate synergies between elafibranor and certain diabetes medications, namely between elafibranor and a GLP-1 receptor agonist, and elafibranor in combination with an SGLT2 inhibitor. This clinical trial, which is expected to launch in the first quarter of 2020, will be a proof of concept study evaluating safety, tolerability and exploratory markers of efficacy in both combinations for the treatment of NASH.
Trial Design:
- Study to assess safety, tolerability and exploratory markers of efficacy of elafibranor (120mg) in combination with a GLP1 analogue or in combination with an SGLT2 inhibitor;
- Study will enroll and monitor patients with suspected NASH and significant to advanced fibrosis, through the use of non-invasive technologies;
- U.S. multi-center study with 24-week trial duration.
The study will also utilize non-invasive diagnostic tools, including NIS4, GENFIT’s innovative diagnostic blood test for NASH patient identification and monitoring.
New Phase 2 clinical trial in NAFLD
In June, the Company announced the launch of a Phase 2 clinical trial evaluating elafibranor’s activity on liver fat quantity and – most importantly – fat composition in nonalcoholic fatty liver disease (NAFLD) patients.
NAFLD is a common disorder referring to a condition associated with an accumulation of fat in the liver. Although persistent fat in the liver is common and can remain static, NAFLD is known to be a precursor for a much more serious condition, non-alcoholic steatohepatitis or NASH. The composition of hepatic lipids is altered in NASH, especially in patients with diabetes, where polyunsaturated fatty acids are more prominent and give rise to toxic lipid species, such as hepatic ceramides. It is therefore crucial for NASH-targeted drugs to preferentially eliminate lipid species that are substrates for toxic lipid production.
In this context, elafibranor’s pluripotent mechanism of a PPAR alpha and delta and its beneficial effects on cardiometabolic lipids (LDL decrease, HDL increase, and TG decrease), glucose metabolism (HbA1c, HOMA-IR, FPG, FFA, C-peptide) could be beneficial in improving the quantity and quality of fat in the liver, specifically targeting the more harmful, lipotoxic fat subtypes that buildup in NAFLD and drive progression to NASH.
The trial, for which patient enrolment is underway, is a Phase 2 randomized, placebo-controlled, double-blind, cross-over study in sixteen patients with NAFL as identified with magnetic resonance spectroscopy (H-MRS). The primary objective will evaluate the effects of treatment with elafibranor (120mg/daily) for 6-weeks vs. placebo on changes in hepatic lipid composition in subjects with fatty liver. Secondary measurements include impact on hepatic glucose production (HGP), glucose homeostasis, lipid metabolism, inflammatory markers and liver function, as well as safety. The trial is conducted in The Netherlands.
- Elafibranor development program in Primary Biliary Cholangitis (PBC)
In April, during the 2019 ILC, GENFIT presented new data from the positive Phase 2 results of elafibranor in PBC, for which the top line results had been published by the company in December 2018, in particular on the primary endpoint of ALP percentage change from baseline to week 12. The anti-cholestatic effects of elafibranor were evaluated in a 12-week double-blind randomized placebo-controlled Phase 2 trial of non-cirrhotic patients with PBC and with inadequate response to ursodeoxycholic acid (UDCA). Patients were randomly assigned to receive elafibranor 80 mg/day, 120 mg/day or placebo (15 patients per group).
In addition to significant reductions in ALP already published in December 2018, the new data set presented at the 2019 ILC showed that patients, in both elafibranor-treated groups, showed improvements in other PBC markers. The effect on gamma-glutamyl transferase (GGT) was highly significant as compared to placebo: -39% (80mg) and -40% (120mg), (p=0.001 and p=0.002 respectively). Improvements in lipid markers including total cholesterol, low-density lipoprotein and triglycerides, as well as reduction of anti-inflammatory markers (such as IgM, CRP, haptoglobin and fibrinogen); and a decrease in C4, an intermediate of bile acid synthesis, were also noted.
This new data set also suggests an improvement in pruritus – a major symptom of PBC. By self-reported visual analogue scale (VAS) in patients with pruritus at baseline (10/group), the VAS median percentage change from baseline to week 12 was -24%, -49% and -7% in the 80mg, 120 mg and Pbo groups, respectively.
On the basis of this positive data set and the results announced in December 2018, the Company announced its plans to launch a phase 3 trial of elafibranor in PBC, expected in the first quarter of 2020.
Also in April, the Company announced that the FDA had granted elafibranor Breakthrough Therapy Designation for the treatment of PBC in adults with inadequate response to UDCA
Breakthrough Therapy Designation is granted by the FDA to expedite the development and review of drugs designed to treat serious conditions for which preliminary data and evidence indicate that the product candidate may demonstrate substantial improvements over existing therapies on one or more clinically significant endpoints.
Finally, in July 2019, the Company announced that the FDA and EMA had granted Orphan Drug designation to elafibranor for the treatment of PBC.
- Diagnostic biomarker program in NASH (NIS4)
At the 2019 ILC, the Company presented a poster entitled “Assessment of NIS4 clinical utility for identification of patients with active NASH (NAS>=4) and significant fibrosis (F>=2) in patients at risk of NASH”.
This poster, the abstract of which can be viewed and downloaded on the ILC’s website, provides key insights on the use of clinically meaningful threshold NIS4 values for non-invasive screening of patients with risk factors for NASH and accurate identification of patients who should be considered for pharmacological intervention (NASH with NAS?4 and significant fibrosis defined as F?2).
As indicated below, in January 2019, the Company signed a license agreement with Covance regarding NIS4 (see section 2.2 below).
- Repurposing of nitazoxanide in fibrosis (TGFTX4 program)
Enrollment of patients in the Phase 2 proof-of-concept study to evaluate nitazoxanide in NASH patients with advanced fibrosis continued throughout the first half of 2019. We expect to publish the top line results of this trial in mid-2020.
In April, at the 2019 ILC, GENFIT presented its ongoing approach to evaluating elafibranor as the basis for combination therapies in NASH in an oral presentation “Elafibranor and nitazoxanide synergize to reduce fibrosis in a NASH model” that highlighted new results on the complementary actions of both GENFIT drug candidates, elafibranor and nitazoxanide, to reduce fibrosis in NASH. The abstract is available to view and download on the ILC’s website.
Business Development Activities
Our business development efforts to sign licensing agreements or joint marketing agreements with one or more pharmaceutical companies with the financial capacity and specific expertise required to successfully complete clinical trials and bring medicines and/or diagnostic tools to market materialized in the first half of 2019 with the signature of two agreements, one in the field of diagnostics and the other concerning the development of elafibranor in China.
In January, the Company signed a licensing agreement with Covance, LabCorp’s drug development business. The licensing agreement aims to expand access to NIS4, a non-invasive IVD test developed by GENFIT to identify and monitor NASH patients, in the clinical research space. The primary focus of the licensing agreement is to deploy NIS4 in the clinical research space through Covance’s central laboratories to further validate the test’s use for better identification and characterization of patients, and to generate new biological insights on NASH disease pathogenesis.
Both LabCorp Diagnostics and Covance have been involved in the development of drugs and diagnostics for more than 20 years, and Covance is a recognized global leader in NASH clinical trials.
At the end of June, the Company announced the signing of a licensing and collaboration agreement with Terns Pharmaceuticals (“Terns”), granting Terns the rights to develop and commercialize elafibranor, GENFIT’s proprietary compound, in Greater China. Under the terms of the licensing agreement, GENFIT received an upfront payment from Terns of $35 million and will be eligible to receive up to $193 million in potential clinical, regulatory and commercial milestone payments. Terns obtains the exclusive rights to develop, register and market elafibranor in mainland China, Hong Kong, Macau and Taiwan (“Greater China”) for both NASH and PBC. Upon commercial launch of elafibranor for the treatment of NASH in Greater China, GENFIT will be entitled to receive mid-teen percentage royalties from Terns based on sales in the territory.
As part of the deal, GENFIT and Terns will also undertake joint R&D projects in liver disease, including the development of elafibranor in combination with Terns’ proprietary compounds.
Backed by experienced investors in the pharmaceutical industry, including Orbimed, Lilly Asia Ventures, Vivo Capital and Decheng Capital, Terns, an international company based in the United States and China, has extensive clinical development capabilities in China and a robust pipeline of early-stage candidates that present promising opportunities for potential combination therapy with elafibranor.
We believe that, with a strong presence in China, a seasoned leadership team, and roots in the San Francisco Bay Area biotechnology hub, Terns is well-positioned to maximize elafibranor’s value in China. Terns’ large footprint in both geographies provides an advantage in navigating the development and regulatory processes required to obtain approvals in Greater China territories, while also ensuring the preparation for a strong commercial launch and long-term sales growth.
Corporate development activities
At the end of March, the Company completed its initial public offering on the Nasdaq Select Global Market, raising a total gross amount of approximately US $ 155.4 million in a global offer of American Depositary Shares (ADS) in the United States and a private placement of shares in Europe (including in France) and other countries outside the United States. GENFIT placed 7,647,500 new shares at an issue price of USD 20.32 per ADS and EUR 18.00 per new share. The offer represented approximately 20% of the share capital before the transaction and brought the total number of shares after IPO to 38,831,421.
GENFIT’s ordinary shares are listed on the regulated market of Euronext in Paris under the symbol “GNFT”. Since March 27, 2019, our ADSs are listed on the Nasdaq Global Select Market in the United States, under the symbol “GNFT”.
Main events after the reporting period
At the end of July, the Company announced that the FDA and EMA had granted Orphan Drug designation to elafibranor for the treatment of PBC.
Early September, following the decision of Jean-François Mouney to focus exclusively on his roles as Chairman of the Board and member/chairman of several of its committees, the Company announced that it would separate the roles of Chairman and CEO. On his recommendation, Pascal Prigent, currently the EVP of Marketing and Commercial Development, has been appointed as CEO by the Board, starting from September 16, 2019. Dr. Dean Hum, Chief Operating Officer and Chief Scientific Officer, was named Chairman of GENFIT Corp, the Company’s US subsidiary.
Since joining GENFIT in May 2018, Pascal Prigent has worked closely with Jean-François Mouney and Dr. Hum, since his arrival. A member of the Executive Committee, Pascal is instrumental in establishing a global team of high profile collaborators and consultants with the objective to prepare for the potential commercialization of elafibranor and NIS4. Prior to GENFIT, Pascal had over 20 years of experience in the pharmaceutical industry, including international management roles with Eli Lilly and GlaxoSmithKline.
In September, we also announced the:
- arrival of Dr. Carol L. Addy as Chief Medical Officer. Dr. Addy, who is based in the Cambridge, M.A. office, will drive the medical strategy of the Company, including clinical development and medical affairs. She brings with her over 20 years of experience in the healthcare space, and over 10 years leading clinical development teams in the pharmaceutical industry, supporting early and late-stage investigation of novel drugs and creating innovative solutions for the life-cycle management of approved therapies in obesity and diabetes. Prior to joining GENFIT, she held various leadership roles, including most recently, Chief Medical Officer at Health Management Resources, a subsidiary of Merck & Co., and as Associate Director, Director and Senior Principal Scientist at Merck Research Laboratories.
- the promotion of Dr. Suneil Hosmane to Head of Global Diagnostics. Suneil, who joined GENFIT Corp. in 2018 as Executive Vice President of Strategic Development, will manage the development and marketing activities related to NIS4. Beyond NIS4, Suneil will also be spearheading the in-house biomarker discovery program and designing additional non-invasive diagnostic solutions for metabolic and liver diseases.
Dr. Addy and Dr. Hosmane have both joined the Company’s Executive Committee.
Finally, through its strategic partnership with Terns Pharmaceuticals, the Company received, after the reporting period, the USD $35 million upfront payment under the license and collaboration agreement.
See also Note 6.27 to the 2019 half year consolidated financial statements for other events after the reporting period.
APPENDICES
GENFIT
Half-year Consolidated
Financial Results
At June 30, 2019
The Condensed Consolidated Statements of Financial Position, Statements of Operations and Statements of Cash Flow of the Group were prepared in accordance International Financial Reporting Standards (IFRS).
The limited review procedures on the condensed consolidated financial statements have been performed. The half year consolidated financial statements for the period ended June 30, 2019 were approved by Board of Directors on September 30, 2019.
The full consolidated financial statements as well as the notes to the consolidated financial statements for the period ended June 30, 2019 and the statutory auditor’s report on the consolidated financial statements are included in appendices of the Half Year Business and Financial Report at June 30, 2019 and available on the “Investors” page of the GENFIT website.
Condensed Consolidated Statement of Financial Position
ASSETS | As of | ||
(in € thousands) | 2018/12/31 | 2019/06/30 | |
Current assets | |||
Cash and cash equivalents | 207 240 | 281 920 | |
Current trade and others receivables | 8 794 | 19 161 | |
Other current assets | 2 078 | 3 303 | |
Inventories | 4 | 4 | |
Total - Current assets | 218 116 | 304 389 | |
Non-current assets | |||
Intangible assets | 796 | 1 017 | |
Property, plant and equipment | 7 764 | 17 250 | |
Non-current trade and others receivables | 1 489 | 0 | |
Other non-current financial assets | 1 313 | 1 055 | |
Deferred tax assets | 0 | 0 | |
Total - Non-current assets | 11 362 | 19 322 | |
Total – Assets | 229 478 | 323 710 | |
SHAREHOLDERS' EQUITY AND LIABILITIES | As of | ||
(in € thousands) | 2018/12/31 | 2019/06/30 | |
Current liabilities | |||
Current convertible loans | 1 312 | 1 312 | |
Other current loans and borrowings | 1 848 | 3 061 | |
Current trade and other payables | 35 974 | 40 948 | |
Current deferred income and revenue | 1 | 1 | |
Current provisions | 112 | 1 906 | |
Total - Current liabilities | 39 248 | 47 229 | |
Non-current liabilities | |||
Non-current convertible loans | 159 176 | 161 612 | |
Other non-current loans and borrowings | 7 255 | 16 048 | |
Non-current employee benefits | 1 085 | 1 291 | |
Deferred tax liabilities | 1 773 | 1 486 | |
Total - Non-current liabilities | 169 291 | 180 437 | |
Shareholders' equity | |||
Share capital | 7 796 | 9 708 | |
Share premium | 251 554 | 376 477 | |
Accumulated deficit | (158 897) | (239 014) | |
Currency translation adjustment | 6 | 7 | |
Net loss | (79 521) | (51 132) | |
Total shareholders' equity - Group share | 20 939 | 96 044 | |
Non-controlling interests | 0 | 0 | |
Total - Shareholders' equity | 20 939 | 96 044 | |
Total - Shareholders' equity & liabilities | 229 478 | 323 710 |
Condensed Consolidated Statement of Operations
Half-year ended | |||
(in € thousands, except earnings per share data) | 2018/06/30 | 2019/06/30 | |
corrected (*) | |||
Revenues and other income | |||
Revenue | 64 | 1 | |
Other income | 5 057 | 5 356 | |
Revenues and other income | 5 122 | 5 357 | |
Operating expenses and other operating income (expenses) | |||
By: Nasdaq / GlobeNewswire
- 30 Sep 2019
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