Investment summary: Cash dash for NASH
The future success of Genfit (ALGFT) pivots on its ability to secure adequate funding for the ongoing Phase IIb trial of its lead product, GFT505, in non-alcoholic steatohepatitis (NASH). Some €25m is being sought to move the PPAR α/δ agonist to ‘Phase III-ready’ stage. The robust Phase I/IIa package, the relative paucity of competition, and the lack of an approved treatment should make it an attractive asset to fund and/or partner. While the high prevalence of NASH implies a substantial opportunity, identifying patients for treatment may represent a challenge without a simple diagnostic test to fully open the commercial potential of this market.
Phase IIb GFT505 study in NASH underway
Encouraging data from four Phase II GFT505 studies and longer-term animal toxicology studies were sufficient to gain EMA and FDA approval for a pivotal Phase IIb trial. The safety and efficacy trial assessing 270 patients with NASH is due to read out final results in December 2014. Positive data could see the product partnered and the start of a Phase III trial in 2015. Approval is possible in 2020. GFT505 is among the most advanced. Gilead has an anti-LOXL2 mAb (GS-6624) and Intercept has an FXR agonist (INT747), both also in Phase IIb NASH trials.
High prevalence: Around a third of diabetics develop NASH
NASH is the progressive form of NAFLD (non-alcoholic fatty liver disease) and although asymptomatic, it can lead to cirrhosis and liver cancer. The prevalence of NAFLD is estimated at 20-30% of US adults and 70-80% of diabetics, of which 20-50% progress to NASH. The high prevalence implies a significant market opportunity, although identifying patients for treatment may be challenging.
Diagnostic would help attain full commercial potential
Current US guidelines do not recommend screening, even for diabetic or obese patients, due to uncertainties surrounding diagnostic tests and treatment options. However, two recent studies in c 10,500 patients demonstrate rising prevalence and strongly support screening. The gold standard test for NASH is by liver biopsy, although a clinical picture of obesity, hypertriglyceridemia and high transaminases with ultrasound is enough to make a diagnosis. The availability of a drug for NASH should increase the number of patients diagnosed. Ideally, a single non-invasive test would identify patients suitable for treatment fully opening the commercial potential.
Valuation: Share price boost supports further funding
Genfit has an EV of €90m, assuming gross cash of €11m (June 2012). With c €10-12m burn rate in 2013, supported by the €8m convertible bond, fresh funds are needed. The boosted share price (+c100% ytd) implies support for a funding round.
To Read the Entire Report Please Click on the pdf File Below.
The future success of Genfit (ALGFT) pivots on its ability to secure adequate funding for the ongoing Phase IIb trial of its lead product, GFT505, in non-alcoholic steatohepatitis (NASH). Some €25m is being sought to move the PPAR α/δ agonist to ‘Phase III-ready’ stage. The robust Phase I/IIa package, the relative paucity of competition, and the lack of an approved treatment should make it an attractive asset to fund and/or partner. While the high prevalence of NASH implies a substantial opportunity, identifying patients for treatment may represent a challenge without a simple diagnostic test to fully open the commercial potential of this market.
Phase IIb GFT505 study in NASH underway
Encouraging data from four Phase II GFT505 studies and longer-term animal toxicology studies were sufficient to gain EMA and FDA approval for a pivotal Phase IIb trial. The safety and efficacy trial assessing 270 patients with NASH is due to read out final results in December 2014. Positive data could see the product partnered and the start of a Phase III trial in 2015. Approval is possible in 2020. GFT505 is among the most advanced. Gilead has an anti-LOXL2 mAb (GS-6624) and Intercept has an FXR agonist (INT747), both also in Phase IIb NASH trials.
High prevalence: Around a third of diabetics develop NASH
NASH is the progressive form of NAFLD (non-alcoholic fatty liver disease) and although asymptomatic, it can lead to cirrhosis and liver cancer. The prevalence of NAFLD is estimated at 20-30% of US adults and 70-80% of diabetics, of which 20-50% progress to NASH. The high prevalence implies a significant market opportunity, although identifying patients for treatment may be challenging.
Diagnostic would help attain full commercial potential
Current US guidelines do not recommend screening, even for diabetic or obese patients, due to uncertainties surrounding diagnostic tests and treatment options. However, two recent studies in c 10,500 patients demonstrate rising prevalence and strongly support screening. The gold standard test for NASH is by liver biopsy, although a clinical picture of obesity, hypertriglyceridemia and high transaminases with ultrasound is enough to make a diagnosis. The availability of a drug for NASH should increase the number of patients diagnosed. Ideally, a single non-invasive test would identify patients suitable for treatment fully opening the commercial potential.
Valuation: Share price boost supports further funding
Genfit has an EV of €90m, assuming gross cash of €11m (June 2012). With c €10-12m burn rate in 2013, supported by the €8m convertible bond, fresh funds are needed. The boosted share price (+c100% ytd) implies support for a funding round.
To Read the Entire Report Please Click on the pdf File Below.