SVB Leerink slashes Genfit PT to $20 from $50

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SVB Leerink slashed its price target for Genfit (NASDAQ:GNFT) to $20 from $50, but maintained its “outperform” rating, citing topline interim Phase 3 results that showed elafibranor failed to demonstrate a statistically significant benefit, compared with placebo, at the 72-week interim analysis on the primary endpoint of non-alcoholic steatohepatitis (NASH) resolution, without worsening of fibrosis. The stock closed at $22 on May 11.

Analyst Thomas Smith writes that while the company intends to discuss these results with regulators, it appears that a path forward in NASH is unlikely in the absence of a new clinical trial.

“While we expect significant volatility in Genfit shares following these topline data, we believe investors may ultimately step in for the elafibranor opportunity in primary biliary cholangitis (PBC),” a cholestatic liver disease in which bile ducts in the liver are gradually destroyed, he added.

The drug has shown competitive Phase 2 data in PBC, Mr. Smith said, with a Phase 3 pivotal trial expected to begin in the second half of 2020, pending some resolution of the COVID-19 pandemic.

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