Genfit is looking to raise €150 million ($177 million) to wrap up phase 3 development of its NASH candidate. The planned cash injection will also position Genfit to look to life beyond the phase 3 by supporting commercial preparations and the in-licensing of assets.
Lille, France-based Genfit is offering bonds owners can convert into shares or exchange for existing shares to raise the cash. The bond-based financing diverges from Genfit’s earlier fundraising moves and those being executed by other European biotechs, which are once again looking to Nasdaq for money. But Genfit CEO Jean-François Mouney thinks bonds have their advantages.
“Genfit intends to carry out a different type of fund raise from the previous dilutive transactions and to take advantage of the leverage from 30% to 35% premium compared to the reference price included in the [bond] price,” Mouney said in a statement. “The fund raise offers a new type of institutional investor the opportunity to participate in Genfit`s development.”
The French biotech has repeatedly expressed an interest in adding a Nasdaq listing to its existing spot on a European exchange in recent years. But, despite the IPO window reopening, it has opted against hitting go on that plan.
From a near-term drug development perspective, the important thing is what the money enables Genfit to do, not where it comes from. In this regard, elafibranor, Genfit’s phase 3 NASH asset, is the centerpiece of the financing.
Genfit thinks the financing, when added to the €114 million it had at the last count, will see it through the elafibranor phase 3 and onto a filing for approval, provided the data are good enough. In parallel, Genfit will start gearing up to commercialize elafibranor in certain markets and advance the noninvasive diagnostic it thinks will identify which NASH patients need treating.
The financing comes shortly after Intercept, one of Genfit’s closest rivals in the race for the NASH market, was hit by reports of deaths in its clinical trial. The FDA sent a warning to doctors about the risks posed by the candidate, particularly when it is given at too high a dose. Intercept’s stock is down 41% over the past month.
Both companies have raised as many questions as they have answered with the data generated to date. Those doubts about the data are spurring on a large chasing pack, which includes Allergan, Bristol-Myers Squibb and Gilead.