GNFT - Genfit: Major Data Release Before End Of Q2 Of 2023 Could Get Ball Rolling

2023-05-11 16:04:46 ET

Summary

• Results from the phase 3 ELATIVE study, using elafibranor to treat patients with primary biliary cholangitis, are expected to be released before end of Q2 of 2023.
• The primary biliary cholangitis market is expected to reach $1.7 billion by 2029.
• VS-01 and NTZ are two clinical products being developed in the pipeline to target patients with acute chronic liver failure.
• It is said that the overall market size of ACLF is estimated to be worth almost $4 billion in the U.S. and in the five main European countries by 2030.

Genfit S.A. ( GNFT )( OTCPK:GNFTF ) is a good speculative biotech play to look into, because it has a huge data readout which is expected to take place during this quarter. That is, it should release results any day now from the phase 3 ELATIVE study, which is using elafibranor for the treatment of patients with primary biliary cholangitis [PBC]. Besides this program still moving forward, it acquired another pharmaceutical company, which brought in four phase 2 programs and 2 preclinical programs as well. It also has a next-generation NASH drug it is advancing known as NIS2+. Lastly, it is important to note that it has two clinical candidates in the pipeline which might be able to go after patients with acute on-chronic liver failure [ACLF]. One clinical candidate for ACLF is VS-01 and it is expected that the 1st patient will be screened for this phase 2 study in Q2 of 2023. A second clinical candidate for ACLF is NTZ, which is being explored in a phase 1 study for the time being. Matter of fact, results from this study are to be announced in May of 2023 any day now. With a few data readouts in the coming days/weeks, plus several new additions to its pipeline, these are the reasons why I believe Genfit is a good speculative biotech play to look into.

Elafibranor For The Treatment Of Patients With Primary Biliary Cholangitis

Elafibranor is being explored in the phase 3 ELATIVE study for the treatment of patients with primary biliary cholangitis [PBC]. Primary biliary cholangitis is a chronic disease whereby bile ducts in the liver become inflamed. Not only can this happen, but they can also destroyed. This disorder is considered an autoimmune disease, because the person's own immune system is what starts to attack cells of these bile ducts, which leads to inflammation and significant damage. With limited function of bile ducts, plus many others destroyed, bile starts to back up into the liver causing damage inside. The damaging of the liver can lead to cirrhosis, which is why it is important for medication to help treat/prevent this disease from happening. The most common type of symptoms found for these patients are fatigue and/or skin itching. It is pretty good sized market opportunity as well. It is said that the global Primary Biliary Cholangitis Treatment Market size could reach $1.55 billion by 2027 . In order to establish confirmatory proof that Elafibranor can help this patient population, there will be the release of results from this phase 3 ELATIVE study by the end of Q2 of 2023. This means this data should be out any day now and if the primary endpoint is met, then that will allow the biotech to file for regulatory approval of elafibranor for the treatment of patients with PBC.

A downside is that Genfit has already established a licensing deal relating to the use of elafibranor for PBC. Such an agreement , for the use of this drug for the treatment of this patient population, was made with Ipsen ( OTCPK:IPSEY ) back in 2021. Under the terms of the agreement, Genfit could receive regulatory, commercial and sales-based milestone payments of up to $394.8 million. The first possible payment is expected as early as 2023 and then another in 2024. Of course, for this licensing deal to work out, the phase 3 ELATIVE study to be readout any day now must be successful. If Elafibranor is ultimately approved for marketing, then Genfit could receive double-digit royalties of 20% for net product sales.

Potential Competitors For The Treatment Of Patients With Primary Biliary Cholangitis

There are a few competitors which Genfit may have to compete against, should it ultimately achieve positive results from the phase 3 ELATIVE study. For instance, one such biotech advancing a treatment for Primary biliary cholangitis [PBC], would be CymaBay Therapeutics ( CBAY ). That's because it published positive results from the phase 3 ENHANCE study , which used seladelpar for the treatment of patients with PBC over a 3-month period. It was a double-blind, placebo-controlled global phase 3 study. There was a composite endpoint looking at alkaline phosphatase and bilirubin levels. The composite endpoint was achieved in 78.2% of patients who took 10 mg of seladelpar and then 57.1% of patients who took 5 mg of seladelpar. This, compared to only 12.5% of placebo patients who achieved this composite endpoint. However, whether or not CymaBay receives FDA approval is up in the air still. The reason why I state this is because it expects to release results from another phase 3 study, known as RESPONSE. This is a 52-week phase 3 study which recruited a total of 193 PBC patients. Patients were randomized 2:1 to either receive 10 mg of seladelpar or placebo once daily. The primary endpoint is composite biochemical responder rate at 52 weeks. Again, this responder rate will be looking at whether or not a patient achieves an alkaline phosphatase [ALP] level < 1.67 times the upper limit of normal with at least a 15% decrease from baseline and normal level of total bilirubin. Results from this phase 3 RESPONSE study for CymaBay are expected to be released Q3 of 2023.

Another potential competitor would be Intercept Pharmaceuticals ( ICPT ), because it has already received FDA approval of Ocaliva for the treatment of patients with PBC. Ocaliva net sales for its fiscal Q1 2023 reached $68 million , which was a 15% year over year growth from the same quarter of the prior year. However, there is still a hurdle for this biotech in terms of Ocaliva approval for PBC. It is in the process of completing post-marketing studies such as COBALTA and other studies and expects a regulatory submission to the FDA with all this data in 2023. Besides this, Intercept may have another possible way to treat PBC as well. That is, it is running two phase 2 studies, which are using multiple dose combinations of Ocaliva together with bezafibrate to treat patients with PBC. It is expected that this company will release interim results from both of these mid-stage studies in 2023. Matter of fact, the first of the two studies, will have data presented at the 2023 European Association for the Study of the Liver [EASL] Congress. Seven abstracts were accepted to be presented at the 2023 EASL Congress , to be held from June 21st to June 24th of 2023. Should the two ongoing phase 2 studies using this Ocaliva combination for PBC be successful, Intercept expects to submit this along with other data to achieve an end of phase 2 meeting with the FDA. This step could serve as a way for the company to advance this combination towards phase 3 development.

Financials

According to the 6-K SEC Filing , Genfit had cash, cash equivalents and current financial assets totaling $153.83 million cash as of December 31, 2022. It believes that it has enough cash to fund its operations through Q3 of 2024. Being that there is roughly a little bit over 1-year worth of cash, I believe it will need to enact a cash raise by at least the 2nd half of 2023. However, should any of the upcoming data readouts cause the stock price to trade incrementally higher, then I believe it would enact a cash raise immediately.

Risks To Business

There are several risks that traders/investors should be aware of before investing in this biotech. The first risk to consider would be with respect to the ongoing phase 3 ELATIVE study, which is using elafibranor for the treatment of patients with PBC. That's because final results from this study are going to be released by the end of Q2 of 2023 any day now. There is no guarantee that the final primary endpoint of this phase 3 ELATIVE study will be met. In addition, if the results are bad, that might then cause Ipsen to rethink its licensing of elafibranor for the treatment of patients with PBC. A second risk to consider would be with respect to an ongoing phase 1 study, which is using NTZ for the treatment of patients with acute chronic liver failure [ACLF]. It is expected that results from this phase 1 study are going to be announced any day now in May of 2023. The final risk to consider would be with respect to the financial position that it is in. It believes that it only has enough cash to fund its operations through Q3 of 2024. It will definitely need to find a way to raise additional cash in the coming months. My feeling is that if it can at least obtain positive results from either the phase 3 ELATIVE study with elafibranor or the phase 1 study using NTZ for the treatment of patients with ACLF, then it could choose to immediately raise cash after such announcements. Of course, it will have to achieve successful study outcomes to consider raising cash after these events. Either way, it will need to raise cash soon to keep its pipeline funded.

Conclusion

The final conclusion is that Genfit is a good speculative biotech play to look into. That's because it is gearing up to report results from its phase 3 ELATIVE study, which is using elafibranor for the treatment of patients with PBC. Results from this study are expected to be released by the end of the current second quarter of 2023. In addition to having this program, it is also advancing two clinical candidates noted above, to treat patients with acute chronic liver failure [ACLF]. These two candidates being developed for ACLF are VS-01 and NTZ respectively. This provides two shots on goal in being able to target this multi-billion dollar market opportunity. It is said that the overall market size of ACLF is estimated to be worth almost $4 billion in the U.S. and in the five main European countries by 2030 . With a major data readout coming before the end of Q2 of 2023 with respect to elafibranor in PBC, plus several other new drugs being advanced in the pipeline, these are the reasons why Genfit is a good speculative biotech play to look into.

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