GENFIT Reports First Half-Year 2021 Financial Results and Provides Corporate Update
GENFIT Reports First Half-Year 2021 Financial Results and Provides Corporate Update
- Financial highlights
- Cash and cash equivalents totaled €104 million as of June 30, 2021 (including €11 million non-dilutive financing obtained in the first half 2021)
- Net income totaled €9 million for the first half 2021, due to a one-off revenue following the successful outcome of the convertible debt restructuring in January and the OCEANEs conversions in the first quarter
- Positive developments with elafibranor in PBC (ELATIVETM Phase 3)
- Foresee completion of enrolment in first quarter 2022
- Timeline for potential FDA filing now estimated in second half 2023, based on a successful Phase 3 trial outcome
- New clinical data expected in several indications, starting as early as the third quarter 2022
- NTZ in ACLF (Phase 1)
- Elafibranor in PSC (Phase 2 PoC)
- Elafibranor in PBC (exploratory and complementary study to ELATIVE™ in treatment-naïve patients)
Lille, France; Cambridge, MA; September 29, 2021 - GENFIT (Nasdaq and Euronext: GNFT), a late-stage biopharmaceutical company dedicated to improving the lives of patients with metabolic and chronic liver diseases, today announced its first half-year financial results and provided a corporate update.
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.
Conference Call in English on September 29, 2021 at 4:15pm EDT | 9:15 BST | 10:15pm CEST, and in French on September 30, 2021 at 7:30am CEST | 1:30am EDT
Both the English and French conference calls will be accessible on the investor page of our website, under the events section at https://ir.genfit.com/ or by phone five minutes prior to the start time:
- English session dial-in information:
- United States/Canada Tollfree: 800-289-0438 | United Kingdom Tollfree: 0800 358 6377 | France Tollfree: 0805 101 219
- Confirmation Code: 6014676
- French session dial-in information:
- United States/Canada Tollfree: 866-548-4713 | United Kingdom Tollfree: 0800 358 6377 | France Tollfree: 0805 101 219
- Confirmation Code: 3525672
A replay will be available shortly after the call.
Pascal Prigent, CEO of GENFIT, commented: “We are pleased with the progress made in the first half of 2021. Our lead program, the development of elafibranor in PBC, is on track, with the pace of patient enrolment for our Phase 3 ELATIVETM clinical trial broadly in line with our expectations. Our updated R&D strategy, announced in May 2021, has allowed us to concentrate our efforts on new growth drivers in therapeutic areas with significant unmet medical needs and, as a result, we will start generating new clinical data as early as September next year. Financially, we are pleased with the successful outcome of the convertible debt restructuring. It has given us, in addition to the €11 million State Guaranteed Loan, more visibility and flexibility. Lastly, on the diagnostics side, the first qualitative feedback obtained from our partner Labcorp confirms the interest for NASHnextTM, although the conditions for commercial success have not yet been met.”
I. Key aspects of business activity
- Elafibranor development program in PBC
Patient enrolment for the Phase 3 ELATIVETM clinical trial progressed well throughout the first half of 2021 and we expect to complete enrolment in the first quarter of 2022. We anticipate being able to announce ELATIVETM topline data between the end of the first quarter and the middle of the second quarter 2023. We now expect to file our new drug application (NDA) with the Food and Drug Administration (FDA) during the second half 2023, subject to a successful trial outcome. Based on these projections, we are targeting a potential approval of elafibranor in PBC in the US in the second half 2024.
In February 2021, the Company announced the publication, in the Journal of Hepatology, of the positive results of the Phase 2 clinical trial evaluating elafibranor in patients with PBC and an incomplete response to ursodeoxycholic acid (UDCA). These results show a clinically significant improvement on the primary and composite biochemical evaluation criteria and a positive trend on the improvement of pruritus, while preserving a favorable tolerability profile.
During a KOL analyst event organized the same month, the Company provided details of the results of three market studies undertaken by IQVIA 1 evaluating the commercial opportunity presented by elafibranor if approved as a second-line treatment in PBC. The presentation and the related references are available on the Company’s website. These studies support that elafibranor is expected to gain a significant market share in the PBC market, the size of which is expected to reach about $1billion a year at the time of elafibranor’s commercial launch. 2
- Re-focusing our R&D efforts on programs with high potential
In May, the Company announced the new strategic direction for its research and development (R&D) programs, with a pipeline now focused on two therapeutic areas with serious health implications: cholestatic diseases and Acute on Chronic Liver Failure. The rationale behind this approach is to maximize our chances of success in the therapeutic areas that represent high costs for the healthcare system and in which there are significant unmet medical needs for patients. More details on this new strategic positioning are available on the “News” section of the Company’s “Investors & Media” website page.
Clinical data is expected as early as the third quarter of 2022 in the two franchises : for NTZ in ACLF (Phase 1), for elafibranor in PSC (Phase 2 PoC) and for elafibranor in PBC (exploratory and complementary study to ELATIVE™ in treatment-naïve patients).
- Diagnostic program in NASH
In May, the Company announced the launch of the non-invasive diagnostic test NASHnext™, based on GENFIT’s NIS4® technology, by our partner Labcorp. NASHnext™ is now commercially available in the US and Canada and its purpose is to diagnose at-risk NASH in patients presenting with at least one metabolic risk factor. The initial feedback from Labcorp confirms interest in this test and its market, however, significant commercial success is going to be dependent upon availability of approved therapeutic options as well as re-imbursement for NASHnext™, which is not expected in the immediate future.
We continue to see strong interest in the research area and the use of NIS4® in clinical trials continues to grow. We are also committed to continue to grow the body of evidence supporting the use of NIS4®. In June, the Company presented new data on NIS4® at the International Liver Congress™ 2021, organized by the European Association for the Study of the Liver (EASL) and at the 81st Scientific Sessions of the American Diabetes Association (ADA). These data show the clinical performance of NIS4® for diagnosing at-risk NASH in patients with type 2 diabetes compared to other non-invasive tests. They highlight the potential of NIS4® technology to be a valuable clinical tool, either alone or in sequential combination with other blood-based non-invasive tests, in identifying at-risk NASH in patients with and without type 2 diabetes.
- Governance
At the Company’s annual shareholders meeting in June, where the new strategic directions and perspectives for the Company were presented, shareholders adopted, by a large majority of the votes cast, all the resolutions recommended by the Board of Directors, including the financial authorizations to allow the Company to access financing solutions that are adapted to future market conditions, and to seize new opportunities.
Several additions were also made in the first half of 2021 to our Board of Directors and Executive Committee. In March, the Board of Directors appointed Mr. Jean-François Tiné to replace Mr. Philippe Moons, and two new members were added to the Executive Committee: Thomas Baetz, Chief Finance Officer and Stefanie Magner, Chief Compliance Officer and VP International Legal Affairs.
II. Key financial events of the first half-year 2021
- Partial buyback operation and amendment of the terms of the OCEANEs
In January, the Company announced the success of the partial buyback offer and amendment of the terms of 6,081,081 bonds convertible or exchangeable into new or existing shares (OCEANEs) due in October 2022, and issued in the context of the convertible loan of €180 million in October 2017. The renegotiation of the bond debt – approved by more than 98% of shareholders that took part in the vote – has enabled the Company to defer its final maturity date to October 16, 2025 and reduce its nominal amount by half. The conversion ratio went from 1 OCEANE for 1 share to 1 OCEANE for 5.5 shares.
- Reduction of the residual bond debt amount thanks to the conversion of OCEANEs into shares
Following the implementation of the partial buyback operation and the approval of the amendment of the terms of the OCEANEs, the Company received OCEANE conversion notifications as follows: 552,238 of the new OCEANEs were converted in January 2021; 483, 330 of the new OCEANEs were converted in February 2021 and 216, 591 of the new OCEANEs were converted at the end of March 2021. As a result, at June 30, 2021, the Company’s share capital was €11, 443, 812.50, represented by 45,775,250 shares. In August 2021, after the half-year period, 10,000 OCEANEs were converted, and the Company therefore recognized a capital increase of €13,750, corresponding to the issuance of 55,000 new shares.
At the date of the current half-year report, the par value of residual bond debt is approximately €56.9 million, i.e. less than a third of the initial nominal debt amount of €180 million.
- New non-dilutive financing for shareholders
In June, the Company announced the signing of a loan agreement for €11 million. The loan, granted in the context of the COVID-19 pandemic by a syndicate of 4 French banks (BNP Paribas, Natixis, CIC Nord Ouest et Crédit du Nord), is 90% guaranteed by the French government. In July, after the first half-year period, the Company obtained an additional loan of €2 million from BPI France, also 90% guaranteed by the French government. These two loans have an initial term of one year with repayment options up to six years.
III. Key aspects of the first half 2021 financial results
- Cash and cash equivalents
As of June 30, 2021, GENFIT had €104.4 million in cash and cash equivalents (€171 million as of December 31, 2020) which essentially came from using €47.5 million for the partial buyback of the OCEANEs in January 2021 and the State-guaranteed loan amounting to €11 million in June 2021.
- Operating income
Operating income amounted to €3.4 million in the first half 2021 (compared with €5.9 million in the first half 2020), which essentially came from the Research Tax Credit of €3.2 million (€5.2 million for the first half 2020).
- Operating expenses
Operating expenses amounted to €33 million in the first half 2021 (compared with €55 million in the first half 2020), of which 70% represented R&D expenses.
The decrease in operating expenses is due to:
- The decrease in R&D expenses which amounted to €23.1 million in the first half 2021 compared with €36.9 million in the first half 2020, mainly due to the termination of the RESOLVE-IT trial from July 2020;
- The decrease in marketing and pre-commercialization expenses, which amounted to €0.8 million in the first half 2021 (as opposed to €9.5 million in the first half 2020), is mainly due to the discontinuation of the pre-commercialization work for elafibranor in NASH;
- The decrease in general and administrative expenses, which amounted to €7.6 million in the first half 2021 (compared with €8.3 million in the first half 2020) was due to the execution of a cost-saving plan over 3 years, announced in September 2020. Savings on administrative expenses (-9.6%) were realized despite restructuration and reorganization expenses of €1.8 million in the first half 2021 (including a €0.2 million reversal of a provision and €1.9 million in fees related to the renegotiation of the OCEANEs in January 2021).
- Financial results
In the first half 2021, GENFIT registered a one-off financial income of €35.6 million corresponding to a repurchase bonus following the renegotiation of the OCEANEs in January 2021. The financial result, including the one-off financial income and foreign exchange gains and losses amounted to €35.7 million in the first half 2021 (compared with €4 million in the first half 2020).
- Net gains (net losses)
Taking into account the cash and cash equivalents, operating income and one-off financial income, GENFIT generated a half-year net gain of €9.1 million at June 30, 2021 (compared with a net loss of €53.0 million at June 30, 2020). The net loss in 2020 amounted to €101.2 million.
The table below presents the condensed Consolidated Statement of Operations under IFRS for the first half 2021, with comparative figures for the first half 2020.
(in € thousands, except earnings per share data) | For the six-month period ended | |
June 30, 2020 | June 30, 2021 | |
Revenues and other income | ||
Revenue | 122 | 11 |
Other income | 5 745 | 3 417 |
Revenues and other income | 5 867 | 3 428 |
Operating expenses and other operating income (expenses) | ||
Research and development expenses | (36 867) | (23 079) |
General and administrative expenses | (8 251) | (7 632) |
Marketing and market access expenses | (9 490) | (783) |
Reorganization and restructuring expenses | — | (1 786) |
Other operating income (expenses) | (423) | 301 |
Operating income (loss) | (49 163) | (29 551) |
Financial income (1) | 2 095 | 40 822 |
Financial expenses | (6 102) | (5 107) |
Financial profit (loss) | (4 007) | 35 714 |
Net profit (loss) before tax | (53 170) | 6 163 |
Income tax benefit (expense) | 159 | 2 895 |
Net profit (loss) | (53 011) | 9 058 |
Attributable to owners of the Company | (53 011) | 9 058 |
Attributable to non-controlling interests | — | — |
Basic and diluted earnings (loss) per share | ||
Basic earnings (loss) per share (€/share) | (1,36) | 0,21 |
Diluted earnings (loss) per share (€/share) | (1,36) | 0,19 |
(1): Of which Financial income incurred by renegotiating the convertible bond debt OCEANE | — | 35 578 |
Further information is provided in the above “Key aspects of business activity” and “Key financial events of the first half 2021” sections of this press release and in the condensed consolidated financial statements at June 30, 2021 under IFRS as well as the management discussion of the results are provided in the appendix at the end of this press release. The condensed consolidated financial statements as well as the statutory auditors' report on those financial statements are included in the 2021 Half Year Business and Financial Report and available on the “Investors” page of the GENFIT website.
We encourage investors to take into consideration all the information presented in our 2020 Annual Report on Form 20-F (“Form 20-F”) filed with the U.S. Securities Exchange Commission and the 2020 Universal Registration Document filed under n°D.20-0503 with the French Autorité des Marchés Financiers (AMF) on April 23, 2021 and in this Half-Year Business and Financial Report before deciding to invest in Company shares; these documents are available on GENFIT’s website: www.genfit.com and on the website of the AMF (www.amf-france.org). This includes, in particular, the risk factors described in Item 2 of the Form 20-F (and the contents of this section) and section 2 of the 2020 Universal Registration Document, as well as the update provided in section 8 of the 2021 Half-Year Business and Financial report, of which the realization may have (or has had in some cases) material adverse effect on the Group and its activity, financial situation, results, development or perspectives, and which are of importance in the investment decision-making process.
APPENDICES
Half-year Consolidated Financial Results at June 30, 2021
The Condensed Consolidated Statements of Financial Position, Statements of Operations and Statements of Cash Flow of the Group were prepared in accordance with 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, 2021 were approved by Board of Directors on September 29, 2021.
The condensed consolidated financial statements as well as the notes to the consolidated financial statements for the period ended June 30, 2021 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, 2021 and available on the “Investors” page of the GENFIT website.
Condensed Consolidated Statement of Financial Position
ASSETS | As of | |||||
(in € thousands) | December 31, 2020 | June 30, 2021 | ||||
Current assets | ||||||
Cash and cash equivalents | 171 029 | 104 379 | ||||
Current trade and others receivables | 11 919 | 13 842 | ||||
Other current assets | 1 765 | 3 058 | ||||
Inventories | 4 | 4 | ||||
Total - Current assets | 184 717 | 121 283 | ||||
Non-current assets | ||||||
Intangible assets | 791 | 704 | ||||
Property, plant and equipment | 11 648 | 10 328 | ||||
Other non-current financial assets | 1 458 | 1 398 | ||||
Deferred tax assets | — | — | ||||
Total - Non-current assets | 13 897 | 12 429 | ||||
Total - Assets | 198 614 | 133 712 | ||||
SHAREHOLDERS' EQUITY AND LIABILITIES | As of | |||||
(in € thousands) | December 31, 2020 | June 30, 2021 | ||||
Current liabilities | ||||||
Current convertible loans | 1 312 | 417 | ||||
Other current loans and borrowings | 3 035 | 2 457 | ||||
Current trade and other payables | 25 564 | 27 231 | ||||
Current deferred income and revenue | 124 | 122 | ||||
Current provisions | 1 031 | 736 | ||||
Total - Current liabilities | 31 067 | 30 964 | ||||
Non-current liabilities | ||||||
Non-current convertible loans | 169 470 | 46 913 | ||||
Other non-current loans and borrowings | 11 873 | 21 144 | ||||
Non-current trade and other payables | 450 | 447 | ||||
Non-current employee benefits | 1 148 | 1 071 | ||||
Deferred tax liabilities | 767 | 608 | ||||
Total - Non-current liabilities | 183 709 | 70 183 | ||||
Shareholders' equity | ||||||
Share capital | 9 722 | 11 444 | ||||
Share premium | 379 057 | 416 965 | ||||
Retained earnings (accumulated deficit) | (303 629) | (404 849) | ||||
Currency translation adjustment | (92) | (52) | ||||
Net profit (loss) | (101 221) | 9 058 | ||||
Total shareholders' equity - Group share | (16 162) | 32 566 | ||||
Non-controlling interests | — | — | ||||
Total - Shareholders' equity | (16 162) | 32 566 | ||||
Total - Shareholders' equity & liabilities | 198 614 | 133 712 |
Condensed Consolidated Statement of Operations
For the six-month period ended | |||
(in € thousands, except earnings per share data) | June 30, 2020 | June 30, 2021 | |
Revenues and other income | |||
Revenue | 122 | 11 | |
Other income | 5 745 | 3 417 | |
Revenues and other income | 5 867 | 3 428 | |
Operating expenses and other operating income (expenses) | |||
Research and development expenses | (36 867) | (23 079) | |
General and administrative expenses | (8 251) | (7 632) | |
Marketing and market access expenses | (9 490) | (783) | |
Reorganization and restructuring expenses | — | (1 786) | |
Other operating income (expenses) | (423) | 301 | |
Operating income (loss) | (49 163) | (29 551) | |
Financial income (1) | 2 095 | 40 822 | |
Financial expenses | (6 102) | (5 107) | |
Financial profit (loss) | (4 007) | 35 714 | |
By: GlobeNewswire
- 29 Sep 2021
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