On February 28, 2022 GENFIT (Nasdaq and Euronext: GNFT), a late- stage biopharmaceutical company dedicated to improving the lives of patients with severe chronic liver diseases, reported its cash position as of December 31, 2021 and revenues for 2021 (Press release, Genfit, MAR 1, 2022, View Source [SID1234609221]).

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Financials

As of December 31, 2021, the Company’s cash and cash equivalents amounted to €258.8 million compared with €171.0 million, as of December 31, 2020. This amount includes:

•A €120 million non-refundable upfront payment from Ipsen received in December 2021, as well as €24 million in VAT collected on that amount
•A €28 million equity investment from Ipsen in December 2021
•A €7.9 million Research Tax Credit 2020 reimbursement received in October 2021
•A €2.25 million subsidized loan from Bpifrance in November 2021 in addition to the State Guaranteed Loans received in June and July 2021

As of June 30, 2021, cash and cash equivalents amounted to €104.4 million.

The solid cash position as of December 31, 2021 takes into account the collaboration and license agreement signed with Ipsen in December 2021 which gives Ipsen exclusive worldwide2 license to develop, manufacture and commercialize GENFIT’s investigational treatment elafibranor for people living with Primary Biliary Cholangitis (PBC), in return for a €120 million upfront payment. In addition to the upfront payment GENFIT is eligible to receive up to €360 million in milestone payments as well as tiered double-digit royalties of up to 20%. To underscore the long-term commitment represented by this partnership, Ipsen also purchased newly issued GENFIT equity representing 8% post-issuance through a €28 million investment in GENFIT, becoming one of the largest shareholders.

1Unaudited financial information under IFRS
2With the exception of China, Hong Kong, Taiwan, and Macau where Terns Pharmaceuticals holds the exclusive license to develop and commercialize elafibranor

1 Pascal Prigent, CEO of GENFIT, commented: "This breakthrough strategic partnership with Ipsen marks the beginning of a new chapter for GENFIT. With a considerably improved financial situation, we’re now in a good position to accelerate our development."

Revenues3

Revenues for 2021 were €80.06 million compared to €0.76 million for 2020. This mainly results from the receipt of the €120 million upfront payment from Ipsen, out of which €80 million is recognized as 2021 revenue, after deduction of €40 million deferred revenue, which will gradually be recognized as revenue following the completion of the ELATIVE double-blind study, in accordance with the IFRS 15 norms.

As a comparison, revenues for 2020 mainly resulted from the licensing agreements with Labcorp to roll out the NIS4 diagnostic technology in NASH and the sale of goods and services provided pursuant to the collaboration and license agreement with Terns Pharmaceuticals.

A note about the COVID-19 pandemic and its potential consequences on our business

During this evolving crisis, our priorities continue to be to ensure the safety and well-being of our employees, of the patients and healthcare professionals involved in our clinical trials, as well as the integrity of our ongoing clinical trials. We remain committed to ensuring business continuity and have been monitoring the situation closely.

We have worked with our contract research organizations (CRO), trial sites and investigators to regularly revise our program execution estimations to take into account the evolution of the pandemic situation and its impact on our activities.

As a result of measures implemented in consultation with our CRO we were able to minimize disruption to our ELATIVE Phase 3 clinical trial of elafibranor in PBC, which enrolled its first patient in September 2020. At the start of the trial, and considering the pandemic situation, we had estimated that enrollment in the ELATIVE study would take approximately 18 months and so far, we have been broadly in-line with this estimate. However, the recent rapid expansion of the highly contagious Omicron strain of COVID has created additional complications for us in enrolling patients and in clinical trial operations generally. The rate of infection, as well as the containment measures put in place to control its growth have led to patients postponing site visits or having to be re-screened because they had fallen outside the screening window. This recent worsening of the COVID pandemic has also created significant additional administrative backlogs at sites and regulatory agencies, due to the combination of continued high volume of trials and staffing shortages. This has disproportionately impacted regions where there were already significant delays, such as Latin America. Although we currently do not anticipate these recent complexities to substantially change the guidance related to availability of the ELATIVE top line results, we are currently assessing with our CRO the extent of impact on enrollment timelines. We will provide an update during our next webcast scheduled for April 7, 2022.

3 Revenues recognized under IFRS 15

2 Upcoming Financial Communications

The Company will release its full-year 2021 financial results on April 7, 2022. The 2021 Universal Registration Document, the 2021 Annual Financial Report (included in the 2021 Universal Registration Document), and the Annual Report on Form 20-F will be published by the end of April 2022.