Genfit is next up in the M&A rumor mill thanks to its NASH drug

French biotech Genfit is considering putting itself up for sale, Bloomberg reports, citing people close to the situation who say the company's in-development treatment for a pervasive liver disease could bring buyers to the table.

According to Bloomberg's unnamed sources, the discussions are at an early stage, and Genfit could still decide against taking a buyout. But the suggestion was enough to move the market, as the company's shares jumped by more than 7% on the Paris exchange, giving the company a $1.6 billion market cap.

The jewel of Genfit's pipeline is GFT505, an oral treatment for nonalcoholic steatohepatitis (NASH), which is a liver-scarring disease that affects as many as 5% of Americans but has no approved therapies. The commercial prospects of NASH have spurred a frenzy of activity in R&D around the industry, as drugmakers pile into the field with hopes of meeting blockbuster expectations.

But despite that promise, talk of a Genfit buyout might be a bit premature. The company is currently working through a Phase IIb study of GFT505, expecting to present results later this month. If they are positive, Genfit will command a much higher market value, but if it fails, the rap on Genfit will be quite different. And that makes the timing of sale rumors seem a bit odd.

According to Bloomberg's sources, Sanofi ($SNY), Novartis ($NVS) and Shire ($SHPG), which already has a NASH program, are among the potential suitors.

Elsewhere in NASH, Intercept Pharmaceuticals ($ICPT) is leading the way with its obeticholic acid, an FDA-designated breakthrough therapy on its way to Phase III. Gilead Sciences ($GILD) is paying $470 million to get its hands on a Phase II treatment for the disease, and the hepatitis C experts at Enanta Pharmaceuticals ($ENTA) are entering the field.

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