The Genfit IPO: What You Need To Know

Genfit S.A. (GNFT) wants to splice the loose ends of your portfolio as the gene editor hits the Nasdaq this week. The stock could debut as soon as Wednesday, according to IPO Scoop.

The Offering

Genfit is expected to issue 5 million shares at $26.33 apiece representing 13.8 percent of its outstanding shares. The firm has been listed on Euronext Paris since 2006.

In the U.S., it qualifies as an emerging growth company under the JOBS Act, which entitles management to less stringent disclosure standards.

The Products

Since its 1999 inception in France, the late-stage biopharmaceutical company has created treatments and diagnostics targeting metabolic and liver-related diseases. Its nuclear receptor-based platform has so far yielded candidates for nonalcoholic steatohepatitis (NASH), primary biliary cholangitis (PBC), NASH-induced fibrosis and IL-17 autoimmune diseases.

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“A key differentiator of our development strategy is our NASH biomarker-based diagnostic program, in which we are developing a new in vitro diagnostic, or IVD, test to identify patients with NASH who may be appropriate candidates for drug therapy,” the firm’s F-1 filing read. NASH is an expanding market projected to strike $20 billion by 2025.

Genfit’s most advanced drug, elafibranor, is in a pivotal Phase 3 clinical trial for NASH and a Phase 2 trial for PBC. The latter produced positive preliminary results in December.

“We believe elafibranor, if approved, has the potential to become a first-line treatment as a monotherapy and the backbone of combination regimens,” management said in its F-1.

Genfit offered no timeline to file a New Drug Application with the FDA, but it has already secured fast-track designation. Two other candidates lie in Phase 2 or pre-IND studies.

The Operations

Genfit has historically completed R&D through academic and pharmaceutical partnerships and has relied on third-party manufacturers.

Former and current partners include the likes of Sanofi SA SNY, Solvay, Servier, UCB and more. In January, it entered a licensing agreement with LabCorp to launch its proprietary IVD test in clinical research.

Genfit incorporated a wholly owned U.S. subsidiary in 2003, and another French subsidiary followed in 2011. Between its Lille, Paris and Cambridge, Mass., offices, the firm tallies 150 employees.

The Finances

In 2018, Genfit recorded €7.49 million in revenue with a loss of €2.55 per share. The previous year, it notched €6.86 million in revenue and €1.79 loss per share.

Management issued €180 million in convertible bonds in October 2017, and bondholders are eligible to exchange or convert their bonds into ordinary shares in October 2022.

“The conversion of some or all of our currently outstanding convertible bonds into ordinary shares would dilute the ownership interests of existing shareholders,” the F-1 read. “Any sales in the public market of the ordinary shares issuable upon such conversion or any anticipated conversion of our convertible bonds into ordinary shares could adversely affect prevailing market prices of our ordinary shares.”