On April 8, 2020 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, reported its annual financial results for the full year ended December 31, 2019 (Press release, Genfit, APR 8, 2020, https://ir.genfit.com/news-releases/news-release-details/genfit-reports-full-year-2019-financial-results-and-corporate [SID1234561497]). A summary of the consolidated financial statements is included below.
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Pascal Prigent, CEO of GENFIT, commented: "2019 has been a year of significant progress for GENFIT and, despite the current challenges due to the COVID-19 pandemic, 2020 is starting strong with a critical milestone coming up shortly.
We are targeting the end of May to communicate the interim results of RESOLVE-IT, our Phase 3 clinical trial in patients with non-alcoholic steatohepatitis (NASH). We locked the study database in February and are now adjusting the study protocol and statistical analysis plan following recent receipt of FDA insights. We are working with our CRO (Clinical Research Organization) partner to better understand the time needed to incorporate these changes, conduct the analyses, and execute thorough standard quality checks on both side – a process that could be impacted by the fast-evolving COVID-19 pandemic. We are eagerly anticipating these results and are hopeful that they will support that elafibranor is safe and efficacious for the treatment of NASH, a disease that is affecting millions of patients globally, who are currently without any approved treatments.
In 2019, GENFIT also presented positive results from our Phase 2 trial in patients with primary biliary cholangitis (PBC) at major international congresses, showing that elafibranor was significantly better than placebo for both primary and composite endpoints of the study. Elafibranor was awarded "breakthrough therapy" and "orphan drug" designations from the FDA and EMA/FDA, respectively. PBC is a disease where there is still significant unmet medical need, and thus we are committed to the development of elafibranor for this indication. GENFIT also furthered the development of NIS4, our non-invasive diagnostic tool for use in identifying NASH with fibrosis patients who are at risk for progression and who may benefit from treatment. This past year, NIS4 became available for use in clinical research through our partner Labcorp-Covance and has been selected by several sponsors to assist with patient identification and recruitment for NASH clinical trials.
Beyond clinical development, 2019 was a year of important commercial activity. GENFIT signed two major deals: one with LabCorp-Covance for the development of NIS4, and secondly with Terns Pharmaceuticals for both the licensing rights of elafibranor in Greater China and an ambitious R&D partnership. We also continued to strengthen our commercial team, through the hiring of new marketing talents and by partnering with leading consultancies. Together, we executed several market research and payer research studies providing valuable insight on needs and expectations of patients, healthcare professionals and payers.
Earlier in the year, we solidified our foothold in the U.S. with a successful global offering and Nasdaq initial public offering (IPO) raising gross proceeds of $155MM. Our balance sheet was further bolstered with a $35MM upfront payment from Terns Pharmaceuticals and we finished 2019 with a cash position of €277MM. In September, I had the pleasure of stepping into a new role as CEO with co-founder Jean-François Mouney choosing to transition to full-time leadership as Chairman of the Board, and GENFIT expanded our Executive Committee with the recruitment of a new CMO and the promotion of our Head of Diagnostic business unit. Combined with the relocation of our COO, Dean Hum, to our Cambridge, Massachusetts office, roughly half of our leadership team is now based in the U.S.
GENFIT, similar to many biotechnology companies, is affected by the COVID-19 pandemic. The RESOLVE-IT extension phase remains on-going with a few adjustments to protect our patients but, as recently communicated, the remainder of our clinical programs have been put on hold. It is still too early to accurately assess the impact these operational delays will have on our regulatory timelines for NASH, but at this stage, we estimate the timelines to shift by one to two quarters and expect to file the NDA for elafibranor in NASH in 1H21."
Financial results
* Financial statements are not audited. The audit procedures by the Statutory Auditors are underway. The Group adopted IFRS 16 Leases for the first time on January 1, 2019
Revenues and other incomes
– The main contributor to our revenue stream was the $35MM upfront payment received from Terns Pharmaceuticals for the licensing rights of elafibranor in NASH and PBC in Greater China.
Operating results and expenses
R&D expenditures were stable and aligned with our sustained effort to progress both clinical trials and R&D activities in the diagnostic field.
The main driver behind the increased level of expenditures is the ambitious market access, commercial and marketing plan designed to support our Launch Excellence program which is currently driven by an expanding team of internal experts and external consultants.
Cash position
– Cash position of €277MM, increased versus last year, thanks to the global financing and U.S. IPO on Nasdaq in March 2019, and the upfront payment received by Terns Pharmaceuticals in July 2019.
2020 Outlook
Clinical and regulatory update
The announcement of the Phase 3 RESOLVE-IT interim results is now expected by the end of May. We will disclose topline results on the primary efficacy endpoint (the resolution of NASH without worsening of fibrosis), the key secondary endpoints (the improvement of fibrosis, and the recently elevated metabolic parameters) and safety. We anticipate presenting these data at one of the major hepatology congresses in the second part of the year pending confirmation of dates.
All other clinical trials have been paused or postponed due to the COVID-19 pandemic, but will resume as soon as the situation allows clinical centers to ensure safety for patients and healthcare providers. All supporting activities pertaining to continuation of ongoing studies or the initiation of new studies will continue in order to minimize potential delays when the pandemic crisis subsides. As the situation evolves, further guidance will be provided on the following programs currently on-hold:
Phase 3 clinical trial evaluating elafibranor in PBC;
Phase 2 clinical trials evaluating potential synergies between elafibranor and antidiabetic drugs from the GLP-1 agonist class, and from the SGLT2 inhibitor class;
Phase 2 clinical trial evaluating elafibranor in pediatric patients with NASH;
Phase 2 clinical trial evaluating elafibranor’s efficacy on liver fat composition in patients with NAFLD, a known precursor for NASH;
Phase 1 clinical trials required for the NASH NDA dossier, which include pharmacokinetic, food effect and bioequivalence studies;
Phase 2 clinical trial evaluating NTZ in fibrosis.
NIS4 development will continue, aiming for FDA submission of the IVD (In Vitro Diagnostic) in 1H21.
Commercial update
Assuming positive Phase 3 RESOLVE-IT interim results for elafibranor in NASH, GENFIT will:
prepare the full dossier for the NDA submission now targeted in 1H21;
consolidate its global market access and commercial strategy for elafibranor in NASH, capitalizing on the valuable insights gained from the extensive market research effort initiated in 2019, to shape the market and optimize potential sales uptake at the time of launch;
NIS4 technology will continue to be deployed in the clinical research field through our commercial partner LabCorp-Covance, and expansion plans are underway, with a goal to commercialize this technology as a Laboratory Developed Test (LDT) beyond the clinical research environment. This 2H20 expected roll-out is considered as an essential step aimed at developing the recognition of the NIS4 technology, within the KOL community, and ahead of the IVD FDA submission.
Financial update
-GENFIT does not provide guidance on expected cash burn and anticipated cash runway. Expenditures in 2020 will strongly depend on the nature of the topline results from the RESOLVE-IT Phase 3 clinical trial, which remain unknown as of today.
2019 Key Highlights
Clinical and regulatory milestones
·Investigation of elafibranor in NASH
In May and November, GENFIT announced Data and Safety Monitoring Board (DSMB) recommendations for the continuation of the Phase 3 RESOLVE-IT study of elafibranor in NASH without modification following their review at 36- and 42-months, respectively;
In May, GENFIT announced the initiation of a combination therapy clinical program in NASH to investigate elafibranor as a backbone in combination with a GLP-1 agonist and in combination with an SGLT-2 inhibitor. The metabolic mechanisms of elafibranor (a PPAR alpha/delta agonist) and the mechanisms of other therapies may provide additive or synergistic effects by addressing the underlying drivers of NASH progression;
In early June, GENFIT launched a Phase 2 trial to evaluate elafibranor’s activity on hepatic lipid composition for NAFLD. The study is designed to explore how elafibranor’s pluripotent PPAR alpha and delta mechanism of action, could be beneficial by improving 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.
·Investigation of elafibranor in PBC
In April, at EASL ILC, GENFIT presented detailed data from the Phase 2 clinical trial of elafibranor in PBC, showing a reduction in alkaline phosphatase (ALP) of 52% (80mg) and 44% (120mg) when compared to placebo (p<0.001). In addition, elafibranor demonstrated a statistically significant response rate of 67% (80mg, p=0.002) and 79% (120mg, p<0.001) versus 6.7% (placebo) on the composite endpoint previously used for regulatory approval of the current second line treatment. Elafibranor was associated with significant improvements in cholestatic markers, reduction on immune/inflammation markers, decrease in bile acid precursors, and improvement in metabolic markers. Additional data also suggested potential improvement in pruritus, which will be further evaluated in a Phase 3 study. The Phase 2 efficacy and safety data are supportive of longer-term, larger scale studies in patients with PBC;
In April, the FDA granted elafibranor "Breakthrough Therapy" designation for the treatment of PBC in adults with inadequate response to UDCA, and in July the FDA and EMA granted elafibranor "Orphan Drug" designation for PBC.
·NIS4
– At AASLD, in November 2019, GENFIT presented new data suggesting that NIS4 was able to outperform other non-invasive diagnostics in identifying NASH with fibrosis in people with type 2 diabetes, a known risk-factor for NASH.
Commercial milestones
In January 2019, GENFIT announced a licensing agreement with LabCorp-Covance to expand access to its NIS4 technology for the identification and monitoring of patients with NASH and fibrosis for the clinical research market. NIS4, a non-invasive blood-based tool, is now utilized by LabCorp-Covance in their clinical research setting for the identification of patients with NASH and fibrosis (NAS>4, F>2), to optimize patient enrollment in clinical trials;
In late June, GENFIT announced a $228MM strategic partnership deal with Terns Pharmaceuticals for the development and commercialization of elafibranor for the treatment of NASH and PBC in Greater China. GENFIT received a $35MM upfront payment from Terns, and is eligible to receive up to $193MM in potential clinical, regulatory, and commercial milestone payments, as well as mid-teen percentage royalties on sales in the territory.
Governance and organizational evolution
·Leadership
In September, GENFIT announced the appointment of Pascal Prigent as CEO, and Jean-François Mouney’s decision to transition to full-time Chairman of the Board. The team also added Dr. Carol L. Addy as Chief Medical Officer, based in Cambridge, Massachusetts;
Later in September, GENFIT announced the appointments of Dr. Dean Hum as President of GENFIT Corp. and Dr. Suneil Hosmane as Head of Global Diagnostics, both based at GENFIT’s U.S. headquarters in Cambridge, Massachusetts.
·Corporate headcount growth
– In 2019, GENFIT’s global headcount increased from 148 to 194 employees, through new department creation and expansion of existing teams: market access, commercial, medical affairs, pharmacovigilance, etc.
Conference Call on April 9, 2020 at 8:00 AM EDT / 14:00 CEST
– GENFIT will host a Full-Year 2019 Financial Results and Corporate Update conference call on Thursday, April 9, 2020 at 8:00 AM EDT/14:00 CEST. The conference call will be accessible on the investor page of our website, under the events section at https://ir.genfit.com/ or by calling 877-407-9167 (toll-free U.S. and Canada), 201-493-6754 (international) or 0 800 912 848 (France) five minutes prior to the start time (no passcode needed). A replay will be available shortly after the call.