Biding its time on Nasdaq IPO, Genfit extends runway with €50M private placement

Genfit (EPA:GNFT) has raised €49.6 million ($53.9 million) in a private placement, giving it enough cash to reach the first quarter of 2018. If all goes to plan, by the time the money is due to run out, Genfit will be a little more than one year away from bringing its nonalcoholic steatohepatitis (NASH) drug elafibranor to market--and will have pulled off its long-anticipated Nasdaq IPO.

For now, big questions hang over both Genfit's plan to secure a quickie approval and ambition to list in the U.S. But, by tapping institutional investors for just shy of €50 million through a placement of 2.4 million new shares at €20.70 a piece, the biotech has set itself up to resolve the outstanding uncertainties one way or the other.

The money will go toward the Phase III trial of elafibranor, which is on track to enroll its first patient this month. If an interim analysis of the first 900 patients enrolled in the study is favorable, Genfit could win conditional approval and have elafibranor on the market by the middle of 2019.

In preparation, Genfit has been talking to "several pharma companies" about co-development and co-commercialization deals, CEO Jean-François Mouney told FierceBiotech. With more money in the bank, Mouney thinks Genfit is equipped to emerge from these talks with favorable terms.

"When you have just six months of cash, it's always a very bad situation to negotiate," he said. "Now, I'm very comfortable. I have the time to [make] the best deal." Mouney cited the strengthening of his hand in negotiations as "probably the most important" aspect of the fundraising.

The placement also appears to have made Genfit's investors feel more comfortable. In the two days after disclosing the private placement, Genfit's stock rose 10%, an increase Mouney attributes to the fact that investors, particularly individual backers, had concerns about Genfit's balance sheet going into the Phase III trial. "It's proof of the fact that they wanted us to have more money in the bank," Mouney said. Genfit had €60.1 million in cash at the end of 2015.

On this occasion, Mouney concluded that the private placement was the "most efficient" way to add to the €60 million, but a Nasdaq IPO is still a possibility in the future. "We have not changed our mind regarding the fact that it could be a good thing for Genfit to be listed on Nasdaq," Mouney said.

While Genfit's interest in listing on Nasdaq is undiminished, the market for biotech IPOs has soured. In response, Genfit is waiting in a state of readiness for an opportune moment to make its move.

"All the team is prepared. We have all the competencies, all the consultants needed to make an IPO when we want. It could be Q3 2016, it could be Q1 2017," Mouney said. "Our intention is the same, but the agenda has to be adapted to the evolution of the market."

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