Genfit rises from the ashes of elafibranor

Ipsen hopes to draw a line under its earlier deal-making snafu with a bet on Genfit, and investors have just over a year’s wait for the proof.

A licensing deal worth €120m ($136m) up front is probably the last thing the markets expected when Genfit’s elafibranor bombed in pivotal trials in Nash 18 months ago. But this is precisely what investors are waking up to as Ipsen this morning signed on the dotted line to take the troubled asset forward – not in Nash, of course, but in liver cirrhosis.

The deal validates Genfit’s decision to press on with elafibranor in the new indication, primary biliary cholangitis (PBC), where the project’s pivotal Elative study will read out in early 2023. And Genfit, up 30% this morning, is not wasting any time: a separate licensing deal with the private French biotech Genoscience has brought in an oncology asset that it will now work on.

That asset, the PPT1 inhibitor GNS561, has apparently cost Genfit nothing beyond a promise to pay future milestones. It yielded early phase 1 data at Asco, and phase 2 studies in cholangiocarcinoma, a cancer that has seen competitors make notable progress recently, is to begin in the first half of next year.

However, it will not be Genfit’s main focus. This remains firmly on running the key double-blind stage of the Elative trial, testing elafibranor against placebo in patients unresponsive to front-line ursodeoxycholic acid. Ipsen will then take responsibility for all clinical development, including a long-term extension stage of Elative.

8% stake

These rights have cost Ipsen €120m up front, plus an €28m equity stake that will make the company an 8% Genfit investor. Elafibranor has 2026 revenue forecasts of $137m, according to Evaluate Pharma sellside consensus, which now reflects solely PBC; at the height of Genfit euphoria elafibranor was seen as a blockbuster in Nash, archived Evaluate forecasts reveal.

That PBC is a far smaller opportunity than Nash is abundantly clear. Intercept’s Ocaliva, which kicked off investors’ love affair with Nash, was once seen as a $3bn drug in Nash. But that dream ended in a US complete response letter, and in PBC Intercept expects to sell $355-370m of Ocaliva this year.

Genfit was not the only Nash player to pivot into PBC after clinical failure. Cymabay’s seladelpar failed in Nash in 2019, but since then has shown promise in a PBC trial; a registrational study, Response, is now under way in a similar PBC setting to Elative, and should yield data next year.

Competition in PBC drug development also includes Zydus Cadila’s saroglitazar, while perhaps the most prominent phase 3 asset still in studies for Nash is Inventiva’s lanifibranor. Beyond Elative the plan for elafibranor is to expand into front-line PBC, as well as exploring primary sclerosing cholangitis, moves that Ipsen will presumably now drive.

Ipsen is under mounting pressure to deliver. The group’s business development team is still smarting from a disastrous $1bn acquisition of Clementia, whose lead project blew up in the clinic less than a year later, causing Ipsen’s share price to crash and ultimately leading to the departure of its chief executive, David Meek.

Investors will have to hope that, under new management, Ipsen has now learned from its mistakes.

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