2017: a year of very significant reinforcement of the cash position (€274M at 12.31.2017), with all programs in the Company's pipeline moving forward
2017: a year of very significant reinforcement of the cash position (€274M at 12.31.2017), with all programs in the Company's pipeline moving forward
- Financial results reflect in particular the signficiant ramp-up of the phase 3 RESOLVE-IT study of elafibranor in NASH and the €180M convertible bond issuance in Fall 2017
- Important progress in all of the Company's other development programs and in particular those that are the most advanced: in vitro diagnostic and pediatric NASH; clinical development of elafibranor in PBC
- Results of the phase 2 study of elafibranor in PBC and filing of an IND application for the launch of a phase 2 study in fibrosis expected in 2018
Lille (France), Cambridge (Massachusetts, United States), March 13, 2018 - GENFIT (Euronext: GNFT - ISIN: FR0004163111), a biopharmaceutical group at the forefront of developing therapeutic and diagnostic solutions in metabolic and inflammatory diseases, that notably affect the liver or the gastrointestinal system, today announces its annual financial results for 2017. A summary of the consolidated financial statements is included in this press release. The 2017 annual consolidated financial statements are available on the "Investors" page of the GENFIT website.
Jean-François Mouney, Chairman & CEO of GENFIT, commented: "All programs in the pipeline, particularly those that are the most advanced, have moved forward or have reached significant milestones in 2017; whether it is the phase 3 clinical development program of elafibranor in NASH; phase 2 clinical development program evaluating elafibranor in PBC, which mid-year entered its active recruitment phase; or even our NASH in vitro diagnostic (IVD) program that successfully completed its feasibility phase and began its development phase last June.
Despite the increased costs engendered by these advances and which are reflected in our financial results, the success of the €180 million convertible bond issue last Fall has improved our cash position. It amounted to €274 million at the end of the financial year, compared to €152 million a year earlier. Beyond increasing our ability to invest in our various programs, the scale of this fundraising gives us significantly greater freedom in view of marketing elafibranor by 2020, with the unchanged view to generate a dual source of income - retaining rights in certain territories and reserving a significant share of the market for future partnerships.
In the meantime, the results of the phase 2 clinical trial evaluating elafibranor in PBC are expected by the end of 2018. We also hope that an authorization to launch another phase 2 trial with another pipeline product in liver fibrosis will be obtained in the coming months.
Finally, GENFIT will take advantage of the fact that the EASL Annual Meeting is taking place this year in Paris from April 11 to 15, 2018, to be particularly present during this event and to provide an update on the enrollment of the first group of approximately 1,000 patients in the RESOLVE-IT phase 3 study."
Main financial results:
Key aspects of the 2017 results are:
- Cash, cash equivalents and other current financial assets of €273.8 million at December 31, 2017 (€152.4 million at December 31, 2016) reinforced by an issuance of convertible bonds (OCEANE) for a nominal amount of approximately €180 million in October 2017 in a context of a significant increase in current and projected operating expenses relating to the progression of the R&D portfolio;
- Operating income of €6.9 million (€6.8 million at December 31, 2016) essentially from the Research Tax Credit, which amounted to €6.5 million for 2017 compared with €6 million in 2016;
- Operating expenses of €63.6 million (€40.9 million in 2016) of which 85% represented R&D expenses. The increase in operating expenses is due:
- to the increase in contracted research and development expenses resulting from the progress of the R&D program pipeline, of which the majority relate to expenses for the phase 3 study of elafibranor in NASH;
- an increase in payroll expense, resulting from changes in employee profiles, salary increases, the impact of bonuses paid to employees in light of their implication in the Group's development and finally, the increase in headcount (from 119 at December 31, 2016 to 125 at December 31, 2017);
- an increase in other operating expenses relating to the yearly grant to The NASH Education ProgramTM endowment fund, the use of external service providers for clinical development and intellectual property expenses and fees.
- As a result of changes in revenues and expenses, a net loss of €58.6 million at December 31, 2017 (€33.7 million in 2016).
The following table summarizes the Consolidated Statement of Operations under IFRS for the 2017 fiscal year, with comparative figures for the 2016 fiscal year.
Year ended | |||
(in € thousands, except earnings per share data) | 2016/12/31 | 2017/12/31 | |
Revenues and other income | |||
Revenue | 284 | 118 | |
Other income | 6 499 | 6 737 | |
Revenues and other income | 6 783 | 6 856 | |
Operating expenses and other operating income (expenses) | |||
Research & development expenses | (32 959) | (54 189) | |
General & administrative expenses | (7 938) | (9 421) | |
Other operating income | (2) | (9) | |
Other operating expenses | (42) | 69 | |
Operating loss | (34 158) | (56 695) | |
Financial revenue | 729 | 642 | |
Financial expenses | (203) | (2 168) | |
Financial loss | 526 | (1 526) | |
Income tax | (35) | (384) | |
Net loss | (33 667) | (58 604) |
The summary IFRS consolidated financial statements at December 31, 2017 as well as the management discussion of the results, are presented in the appendix at the end of this document.
Main developments in the R&D pipeline programs since January 1, 2017
Clinical development program of elafibranor in NASH
Elafibranor is GENFIT's lead pipeline product. It is an oral once-daily treatment, and a first-in-class drug acting via dual peroxisome proliferator-activated alpha/delta pathways developed to treat, in particular, nonalcoholic steatohepatitis (NASH).
NASH is a liver disease characterized by an accumulation of fat (lipid droplets), along with inflammation and degeneration of hepatocytes. The disease is associated with long term risk of progression to cirrhosis, a state where liver function is diminished, leading to liver insufficiency, and also progression to liver cancer but also a severe increase in the risk of cardiovascular problems. Elafibranor has demonstrated its ability to treat the multiple factors in NASH, in particular necro-inflammation, the main cause of progression to cirrhosis, all the while improving the cardiometabolic risk profile.
RESOLVE-IT Phase 3 study
Enrollment and treatment of patients in the RESOLVE-IT Phase 3 study continued during the course of 2017.
RESOLVE-IT is a phase 3 study to evaluate the beneficial effect and safety of elafibranor against placebo in NASH patients with fibrosis. RESOLVE-IT is a multicenter a randomized, double-blind, placebo-controlled (2:1) trial. An interim analysis under an accelerate process for initial market approval under Subpart H (Food and Drug Administration (FDA)/US) and conditional approval (European Medicines Agency (EMA)/Europe) will be performed after 72 weeks.
Subject to satisfactory clinical results obtained during the first stage of this study in approximately 1,000 patients, which is expected to be made public at the end of 2019, if the timelines estimated by the Company for its completion and analysis are met, a conditional marketing authorization, in particular in the United States and Europe, could be obtained for elafibranor in NASH during the course of 2020 subject to approval by the regulatory agencies.
The Data Safety Monitoring Board (DSMB) -a monitoring committee set up as part of the RESOLVE-IT trial - conducted a safety and tolerability review of the safety data collected during the study, including adverse events and laboratory data, during its planned 18-month review. It recommended, in November 2017, the continuation of the clinical trial without any modification; which allowed for the continued active enrolment of patients.
The positive outcome of this review, based on a large number of patients already enrolled in RESOLVE-IT, confirmed the good safety and tolerability profile of elafibranor; which is crucial for any drug candidate designed to treat a chronic disease such as NASH.
Pediatric program in NASH
After the agreement on the pediatric investigation plan obtained from the EMA, in January 2018, the FDA accepted the initial pediatric study plan (PSP) in NASH in the United States. Data from the GOLDEN 505 Phase 2b trial presented in support of this application show the potential benefit of elafibranor in the pediatric population in terms of safety and histological efficacy and cardiometabolic benefit.
This agreement allows the launch of the pediatric clinical study to evaluate the safety and efficacy of elafibranor in children with NASH.
Opportunities in combination therapy
During 2017, the Company was proactive in its combination therapy approaches in NASH, with elafibranor as the background therapy.
To address the multifactoral nature of the disease and the multiple co-morbidities that NASH patients face, the Company is evaluating the following therapeutic potential of combinations with elafibranor:
- compounds from other GENFIT programs;
- already marketed drugs with complementary mechanisms of action;
- the most advanced compounds in the current NASH clinical landscape.
In this context, during the International Liver Congress organized by EASL in April 2017, the Company presented promising preclinical data on the therapeutic synergies of elafibranor with an FXR agonist illustrating the potential for new combination treatments with elafibranor.
Elafibranor development program in PBC
Elafibranor is also evaluated in a phase 2 clinical trial in patients with Primary Biliary Cholangitis (PBC).
PBC is a rare, chronic disease with unmet needs and only two approved orphan drugs available to date. This disease is characterized by a gradual destruction of the bile ducts in the liver which can inhibit the liver's ability to rid the body of toxins, and lead to scarring of liver tissue known as cirrhosis. Current treatments treat only a portion of the patient population and/or generate significant side effects such as pruritus, a major and well-known symptom already affecting most patients with this disease.
The main objective of this study is to determine the effect of daily oral administration of elafibranor on serum alkaline phosphatase (ALP) in PBC patients with an inadequate response to ursodeoxycholic acid.
The first patient was enrolled in the study in May 2017 and patients have been actively enrolling in the study since then. The main characteristics of this international, multicenter study in the U.S. and in three European countries are as follows:
- 3 arms: elafibranor 80mg, 120mg, placebo;
- 45 patients (15 patients per arm);
- 12 weeks treatment.
The preliminary study results should be available, subject to meeting the Company's estimated timelines for carrying out the study and analyzing its results, at the end of 2018.
In vitro diagnostic program in NASH (BMGFT03)
As a major player in NASH engaged in the development of an integrated approach to the clinical management of NASH patients, GENFIT is leading an ambitious research and development program (BMGFT03) aimed at providing patients and practitioners a non-invasive and easy to access diagnostic blood test for NASH. This in vitro diagnostic program entered the development phase in June 2017, and is expected to be commercialized in 2020/2021.
The test that the Company intends to develop will avoid the known risks and limitations of biopsy, and ideally, provide access to the greatest number of patients, including in primary care settings, to a tool able to diagnose NASH at risk of progression.
On the basis of a discovery program to identify circulating miRNAs as potential biomarkers of NASH and fibrosis in two independent cohorts of patients (Professor Sven Francque, LBP-535, EASL 2017), GENFIT presented in April 2017 data concerning the identification of a simple diagnostic score to identify NASH patients to be treated (Professor Stephen A. Harrison, LBP-534, EASL 2017).
This unique signature combining miR34a and three independent biomarkers was identified using advanced biostatistical approaches, and validated in samples from multiple cohorts, including patients selected for recruitment in the RESOLVE-IT phase 3 study.
This validation thus concluded the numerous feasibility studies undertaken under the BMGFT3 program; work that suggests that this signature could answer different medical needs, at different steps of the patient journey, allowing general practitioners, endocrinologists, diabetologists and hepatologists to support their diagnosis including decision to treat a patient with an anti-NASH drug.
Based on this, starting in June 2017, GENFIT entered the development phase for this diagnostic score in the form of an in vitro diagnostic test/kit (IVD). GENFIT intends to partner with a major diagnostic company with particular expertise in microRNA application to IVD, for the development of the test within IVD regulatory requirements, as well as the manufacturing of the kits.
Although GENFIT is undertaking, through its BMGFT03 program, one of the most developed industrial programs in the field of NASH diagnostic biomarkers, but also recognizing the potential of industry-wide approaches to broaden the scope of research and develop its collaborative programs, in 2017, GENFIT signed onto the LITMUS program. LITMUS (Liver Investigation: Testing Marker Utility in Steatohepatitis) is a consortium funded by the European Innovative Medicines Initiative 2 Joint Undertaking (Grant Agreement No.777377), a public-private partnership between the European Union and the European pharmaceutical industry (via EFPIA). GENFIT will provide LITMUS with samples from its RESOLVE-IT clinical trial and, importantly thanks to the sizeable longitudinal cohorts it will be able to access through the consortium, will have the opportunity to further demonstrate clinical performance of GENFIT diagnostic solution, accelerating clinical adoption by the medical community through production of scientific publications and increased visibility.
Clinical development program of anti-fibrotic drug candidates (TGFTX4 program)
In the context of the TGFTX4 program, the Company has identified several potential drug candidates that show strong anti-fibrotic activity in both cell-based assays and in vivo disease models.
These results were obtained either by the therapeutic repurposing of compounds approved in another indication - allowing the Company to shorten development time - or by a more classical hit-to-lead optimization of the Company's proprietary compounds using a phenotypic screening approach in TGF beta-activated human hepatic stellate cells.
Nitazoxanide, an antiparasitic drug with proven safety, was repurposed as a potent antifibrotic agent with efficacy demonstrated in two disease models of liver fibrosis, as presented at the International Liver Congress organized by EASL in April 2017.
An application for authorization to launch a first Proof-of-concept phase 2a study of nitazoxanide in NASH patients with advanced fibrosis is expected to be filed with the FDA in the coming months.
TGFTX1 program (RORgt)
As part of ambitious efforts to diversify and expand its development pipeline in the treatment of autoimmune, inflammatory and fibrotic diseases, the Company has conducted significant work in the design and optimization of novel RORgt inverse agonists.
The Company has recently launched pre-IND studies for a topically delivered treatment in mild to moderate psoriasis vulgaris and also for the treatment of certain respiratory illnesses by inhalation.
As the Company is not a specialist in preclinical and clinical development in these therapeutic areas, it is exploring the possibilities of partnering with a player with an established franchise in dermatology and respiratory diseases to further develop this program.
Main corporate developments
Issuance of convertible bonds
In October 2017, GENFIT issued bonds convertible or exchangeable into new or existing shares (OCEANE) due October 16, 2022 via a private placement to institutional investors for a nominal amount of approximately €180 million.
The proceeds of the Offering will be used by the Company notably to:
- Complete the Phase 3 clinical development program for elafibranor in NASH and continue the Pediatric Investigation Plan in the same disease;
- Prepare, subject to the results of the Phase 3 pivotal study, the application for marketing approval of elafibranor in NASH;
- Prepare the potential commercialization of elafibranor in certain diseases and/or in certain territories;
- Finance the industrial development stage of a new in vitro diagnostic (IVD) test as part of the continuation of the biomarker program; and
- Reinforce the Company's pipeline through in-licensing or combination therapy strategies in therapeutic areas of interest to the Company.
Governance
At the June 16, 2017 Extraordinary Shareholders' Meeting, the shareholders approved the change in mode of administration and management of the Company proposed by the management and decided to change from the historical two-tiered board structure of the Company (Executive Board and Supervisory Board) to a one tiered board with a Board of Directors.
The same Meeting also appointed all of the new members of the Board of Directors proposed by management, which is now composed of the following members:
- Jean-François Mouney
- Xavier Guille des Buttes
- Anne-Hélène Monsellato
- Catherine Larue
- Frédéric Desdouits
- Philippe Moons
- Biotech Avenir, represented by Florence Séjourné
The new Board of Directors met following the Ordinary and Extraordinary Shareholders' Meeting and appointed Mr. Jean-François Mouney as Chairman of the Board of Directors and Chief Executive Officer of the Company. Mr. Xavier Guille des Buttes was appointed Vice-Chairman of the Board of Directors.
The members of the Audit Committee and the Nominations and Compensation Committee were also appointed:
Audit Committee:
- Anne-Hélène Monsellato, Chairman
- Philippe Moons
- Xavier Guille des Buttes
Nominations and Compensation Committee:
- Xavier Guille des Buttes, Chairman
- Jean-François Mouney
- Catherine Larue
By decision on September 22, 2017, the Board of Directors decided to create an Alliance Committee composed of the following members:
Alliance Committee
- Jean-François Mouney, Chairman
- Frédéric Desdouits
- Xavier Guille des Buttes
Finally, by decision on November 21, 2017, GENFIT's Board of Directors made use of the authorizations granted by the Extraordinary Shareholders' Meeting of June 16, 2017 by granting stock options and free shares to its employees and chief executive officer.
The exercise of stock options and the definitive allocation of free shares are subject to internal and external collective performance conditions assessed over a period of three years, which reflect GENFIT's medium-term objectives. In addition, the Board of Directors used the authorizations granted by the same Shareholders' Meeting to allocate share subscription warrants to its independent board members and to a scientific consultant of the Company.
Disease awareness program run by the endowment fund founded by GENFIT
In March 2017, the Company launched a disease awareness initiative through the endowment fund it founded in 2016, The NASH Education Program(TM), asserting its leadership in this area, and sparked an unprecedented wave of interest in the French media, even though it is a little known and asymptomatic disease.
This initiative was also intended to be launched in other countries. Encouraged by the interest in its initiatives, The NASH Education Program(TM) is organizing the first International NASH Information Day on June 12, 2018 to be held in several different countries.
Main upcoming events
- 30th Annual ROTH Conference
March 11-14, 2018
Dana Point, CA - USA
- Cowen & Co 38th Annual Healthcare Conference
March 12-14, 2018
Boston, MA - USA
- 2nd HC Wainwright & Co Annual NASH Investor Conference
March 19, 2018
New York, NY - USA
- EASL International Liver Congress
April 11-15, 2018
Paris - France
- 2nd Annual NASH Summit
April 23-25, 2018
Boston, MA - USA
- International NASH Information Day 2018
June 12, 2018
APPENDICES
GENFIT
Annual Consolidated
Financial Results
At December 31, 2017
The 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 audit procedures on the consolidated financial statements have been performed. The consolidated financial statements for the period ended December 31, 2017 were approved by Board of Directors on March 12, 2018 and will be submitted to the shareholders at the Shareholders' Meeting on June 15, 2018.
The full consolidated financial statements as well as the notes to the consolidated financial statements for the period ended December 31, 2017 are available on GENFIT's website in the "Investors" tab. The annual financial report, included in the registration document, will be available on GENFIT's website in April 2018.
Consolidated Statement of Financial Position
ASSETS | As of | ||
(in € thousands) | 2016/12/31 | 2017/12/31 | |
Non-current assets | |||
Intangible assets | 668 | 636 | |
Property, plant & equipment | 3 010 | 6 324 | |
Non current trade & others receivables | 0 | 1 921 | |
Other non-current financial assets | 541 | 729 | |
Total - Non-current assets | 4 219 | 9 611 | |
Current assets | |||
Inventories | 14 | 4 | |
Current trade & others receivables | 8 394 | 7 955 | |
Other current financial assets | 174 | 31 | |
Other current assets | 1 137 | 1 761 | |
Cash & cash equivalents | 152 277 | 273 820 | |
Total - Current assets | 161 996 | 283 572 | |
Total - Assets | 166 214 | 293 183 | |
EQUITY & LIABILITIES | As of | ||
(in € thousands) | 2016/12/31 | 2017/12/31 | |
Shareholders' equity | |||
Share capital | 7 792 | 7 792 | |
Share premium | 237 305 | 257 580 | |
Retained earnings | (68 654) | (102 531) | |
Currency translation adjustment | 21 | (8) | |
Net loss | (33 667) | (58 604) | |
Total shareholders' equity - Group share | 142 797 | 104 229 | |
Non-controlling interests | 0 | 0 | |
Total - Shareholders' equity | 142 797 | 104 229 | |
Non-current liabilities | |||
Non current convertible loans | 0 | 153 611 | |
Other non-current loans & borrowings | 5 004 | 6 978 | |
Non-current deferred income and revenue | 3 | 2 | |
Non-current employee benefits | 849 | 936 | |
Deferred tax liabilities | 0 | 321 | |
Total - Non-current liabilities | 5 855 | 161 848 | |
Current liabilities | |||
Current convertible loans | 0 | 1 329 | |
Other current loans & borrowings | 1 248 | 1 834 | |
Current trade & other payables | 16 146 | 23 580 | |
Current deferred income and revenue | 1 | 1 | |
Current provisions | 167 | 361 | |
Total - Current liabilities | 17 562 | 27 106 | |
Total - Equity & liabilities | 166 214 | 293 183 |
Statement of Operations
Year ended | |||
(in € thousands, except earnings per share data) | 2016/12/31 | 2017/12/31 | |
Revenues and other income | |||
Revenue | 284 | 118 | |
Other income | 6 499 | 6 737 | |
Revenues and other income | 6 783 | 6 856 | |
Operating expenses and other operating income (expenses) | |||
Research & development expenses | (32 959) | (54 189) | |
General & administrative expenses | (7 938) | (9 421) | |
Other operating income | (2) | (9) | |
Other operating expenses | (42) | 69 | |
Operating loss | (34 158) | (56 695) | |
Financial revenue | 729 | 642 | |
Financial expenses | (203) | (2 168) | |
Financial loss | 526 | (1 526) | |
Income tax | (35) | (384) | |
Net loss | (33 667) | (58 604) | |
Attributable to owners of the Company | (33 667) | (58 604) | |
Attributable to non-controlling interests | 0 | 0 | |
Basic / diluted loss per share attributable to shareholders of GENFIT | |||
Basic earnings per share (€/share) | (1.25) | (1.88) |
Statement of Cash Flows
Year ended | Year ended | ||
(in € thousands) | 31/12/2016 | 31/12/2017 | |
Cash flows from operating activities | |||
+ Net loss | (33 667) | (58 604) | |
+ Non-controlling interest | |||
Reconciliation of net loss and of the cash used for operating activities | |||
Adjustments for: | |||
+ Amortization | 630 | 1 226 | |
+ Depreciation & impairment charges | 186 | 186 | |
+ Expenses related to share-based compensation | 11 | 278 | |
- Gain / (loss) on disposal of property, plant & equipment | 0 | 8 | |
+ Net finance expenses / (revenue) | 45 | 1 368 | |
+ Income tax expense | 35 | 384 | |
+ Other non-cash items | (338) | 17 | |
Operating cash flows before change in working capital | (33 098) | (55 137) | |
Change in: | |||
Decrease (+) / increase (-) in inventories | 14 | 10 | |
Decrease (+) / increase (-) in trade receivables & other assets | (2 942) | (2 106) | |
Decrease (-) / increase (+) in trade payables & other liabilities | 8 828 | 7 377 | |
Change in working capital | 5 900 | 5 281 | |
Income tax paid | (28) | 0 | |
Net cash flows provided by (used in) operating activities | (27 226) | (49 856) | |
Cash flows from investment activities | |||
- Acquisition of property, plant & equipment | (2 036) | (2 800) | |
+ Proceeds from disposal of property, plant & equipment | (0) | 15 | |
- Acquisition of financial instruments | (51) | (163) | |
+ Proceeds from sale of financial instruments | 0 | 0 | |
- Acquisition of subsidiary, net of cash acquired | 0 | 0 | |
Net cash flows provided by (used in) investment activities |
By: Nasdaq / GlobeNewswire
- 13 Mar 2018
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