Genfit SA (GNFTF)

[Wildbilly]

Genfit Next Up In The M&A Rumor Mill

Thanks to It's NASH Drug
March 4, 2015

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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