Genfit SA Q2 FY2020 earnings call

• Resolved to terminate RESOLVE-IT Phase 3 study for NASH after in-depth analysis of dataset, lack of significant clinical outcome justification, and evolving NASH landscape.
• New corporate strategy focuses on two programs: elafibranor as second-line treatment in PBC and NIS4 diagnostic. ELATIVE Phase 3 trial in PBC has started recruiting patients. NIS4 diagnostic has an exclusive license agreement with LabCorp for commercial launch in early 2021.
• Restructuring of company structure into two separate entities for PBC and diagnostic programs to enhance partnerships, operational excellence, and shareholder value. Workforce reduced by ~40% and cash burn reduced by over 50%.
• Terminated all studies related to elafibranor in NASH, stopped non-essential R&D projects, and streamlined support functions to align with new strategy.

As of June 30, 2020, cash position was €226 million versus €277 million as of December 31, 2019. Operating income was €5.9 million, up from €5.4 million in H1 2019. Operating expenses were €55 million, up from €51.3 million in H1 2019. Net loss amounted to €53 million in H1 2020 versus €51.1 million in H1 2019. The increase in operating expenses was due to marketing and premarketing expenses, but will decrease in the second half as studies in NASH are terminated. There are no specific product segments with revenue contributions detailed.

• ELATIVE Phase 3 trial in PBC expects results around 2023, with buffer added for COVID and biopsy requirements.
• Plans to propose adjustment of convertible bond terms to align balance sheet with new strategy. Expect to fund ELATIVE trial through cost-cutting measures and debt restructuring.
• Anticipate data from NTZ proof-of-concept trial in Q1 next year to decide its future.

• Inter-reader variability in liver biopsy evaluations as highlighted in EMMINENCE study, which could impact trial outcomes and regulatory decisions.
• Challenges in clinical trial recruitment for PBC due to biopsy requirement, though investigator motivation is expected to help.
• Uncertainties in regulatory approvals and market adoption for NIS4 diagnostic and elafibranor in PBC.

Q: Can you give color on Elafibranor dose selection in Phase 3 PBC trial?

A: Phase 2 trial showed efficacy of 80 and 120 mg doses, but 80 mg was chosen as it had equal potency with no off-target effects and a clean safety profile.

Q: How does the agreement with LabCorp for NIS4 diagnostic work?

A: LabCorp will handle marketing, market access, and reimbursement in the U.S. No additional regulatory approval needed; it's a standard licensing deal with upfront milestone and royalty.

Q: Estimated timing for ELATIVE study results and buffer for COVID/biopsy?

A: Results expected in 2023, with 6 months added for COVID and ongoing discussions with FDA to address biopsy requirement impact.

Q: Long-term plans for pipeline and NTZ program?

A: NTZ proof-of-concept trial expected to have data in Q1 next year; NTZ has potential for other indications beyond fibrosis, with ongoing R&D on monitoring disease progression and specific ID tools in diagnostics