Genfit prunes nearly half its workforce after NASH exit — but CEO promises a future in PBC, diagnostics
Two months after Genfit’s lead drug, elafibranor, failed a closely-watched Phase III showdown, the French biotech threw in the towel on NASH altogether. Another two months later, top execs are laying off 40% of the workforce — 75 positions in total — as they look to rebuild.
The restructuring is part of a plan to reduce the cash burn by more than half, according to Genfit, from €110 million annually before the Phase III RESOLVE-IT data dropped to around €45 million in 2022. With fewer than 125 staffers between France and the US, the downsized company will focus on pushing elafibranor in primary biliary cholangitis and commercializing a diagnostic tool for NASH.
It will take some time and extra money to fully close RESOLVE-IT, CEO Pascal Prigent noted, in addition to shutting down previous commercial launch preparations.
In an analyst call of Genfit’s future priorities, he explained that the decision to exit NASH didn’t just have to do with the data but latest developments of the field:
We considered the FDA’s feedback regarding the other completed Phase 3 NASH program as well as new data from several ongoing NASH programs, and we feel confident we made the right decision. Indeed, clinical trials in the NASH space are large, long and very expensive. Considering the evolving NASH landscape and the results of the analysis from our complete dataset, we determined that the cost to probability of success ratio was not acceptable to continue development of elafibranor in NASH, and officially terminated RESOLVE-IT, in line with our earlier guidance in July.
It is quite a damning assessment coming from one of the two biotechs that, at the beginning of the year, were tapped as the players to watch following a slew of failures at other companies in 2019.
The other, Intercept, bitterly reported in June the FDA’s rejection of their NDA for obeticholic acid — a major setback that they blamed on regulators’ change of heart regarding a surrogate endpoint.
Despite already booking revenue from the drug, which is approved as Ocaliva for PBC, Intercept was still forced to chop 170 jobs — 25% of the headcount — and tighten its belt while trying to win the FDA back.
For Genfit, the OK in PBC won’t come for quite some time. Having just started patient enrollment, which they envision will take 18 months after factoring in Covid-19 constraints, execs are expecting results from the Phase III ELATIVE study in 2023. Their drug is a dual agonist of PPAR-alpha and PPAR-delta.
In the meantime, though, it does expect to start earning money soon with its diagnostic arm.
Genfit struck a deal with LabCorp just two days ago where the diagnostics giant would lead the marketing effort of its NIS4 test, designed to determine whether a patient needs to be treated for NASH based on four blood-based biomarkers.
While the diagnostic was originally developed as part of the elafibranor NASH program, Prigent believes it has a future on its own. Biopsies, after all, are a way-too-expensive, resource-intensive and painful way to find out if patients are at the stage of needing treatment. Launching the test now, the reasoning goes, paves the way for when the diagnostic market takes off with the first NASH drugs.
Genfit’s blood test promises to be a simple way to find patients with at-risk NASH, meaning fibrosis stage 2 above and a disease activity score of at least 4.
“As a reminder, the scope of the initial agreement was to provide a solution for sponsors running clinical trials in NASH,” Prigent said. “By using NIS4 as a prescreening tool, sponsors have been able to drastically reduce the number of screen failures, thus expediting recruitment and saving both, time and money, as well as better protecting patients.”