If you go by the market's reaction, you'd think Genfit is out of the highly watched race to bring a drug for the liver disease NASH to market. Genfit Chief Executive Jean-Francois Mouney said that's a mistake.
"It's an overreaction," Mouney said by telephone Friday, of Genfit stock's 31 percent decline. "We have proven that our compound can reverse NASH."
The study, reported Thursday afternoon, missed its primary goal, as many patients with earlier stages of the disease, non-alcoholic steatohepatitis, saw the condition clear up on its own. Genfit said excluding those patients, the study was a success. It plans to move forward to later stages of trials.
In the study, about 15 percent of the patients were in the early stages of the disease, Mouney said.
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The results drove up shares of competitor Intercept, which analysts have now named the clear leader in the race to market. NASH affects as many as 5 to 10 percent of Americans and is associated with obesity and diabetes, making it a large market, worth potentially $30 billion to $40 billion annually, by some estimates.
"Because the design was confounded, we find it very hard to draw conclusions based on today's dataset," Alethia Young, an analyst at Deutsche Bank, wrote Friday in a research note on Genfit. "Beyond publication and color from regulators on phase 3 design, we see limited upside catalysts to the Genfit story."
Young lowered her rating on Genfit's stock to hold. She also raised her price target on Intercept, to $400, citing an improved competitive position and its drug's effect on liver scarring seen in NASH, known as fibrosis.
Both companies are looking to start the late stages of clinical trials this year, with Intercept expected to provide information about study design in the next few months. Genfit will now also focus on higher risk patients, as Mouney said the trial showed those in earlier stages of the disease may not require treatment. He also pointed out the drug, GFT-505, had potential "cardioprotective" effects, lowering bad cholesterol in the blood while raising the good.
Mouney said Genfit will look to raise money to fund the next trial, or seek a partnership with a larger pharmaceutical company.
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"We don't want to lose time for the phase 3," Mouney said. "We are very open to discussions with pharma companies. They're very interested in the NASH field for many reasons," including its sheer size, he said. (Tweet this)
Bloomberg News reported this month that Genfit was considering selling itself, with discussions hinging on these results. Mouney declined to comment specifically on that prospect, but said, "It's an option among other options," including a partnership.
The company plans to list on the Nasdaq by year end, Mouney said. "Everything is open."