Full Year 2020 Genfit SA Earnings Presentation
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Greetings and welcome to the Gen set full year 2020 financial statement.
Time, all participants are in a listen only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance. During the conference. Please press star zero on your telephone keypad.
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I will now turn the call over to our host Stephanie Magner Vice President.
At this national legal affairs. Thank you you may begin.
Thank you and good afternoon, everyone. Thanks for joining us for <unk> 'twenty 'twenty financial results call.
We just issued a press release, providing our 'twenty 'twenty financials adults, which also included useful reminders with regards to our 'twenty 'twenty One road map.
If he was key highlights.
Of interest rate.
Press release can be accessed on our website at IR day since the dotcom.
During our call, including during the Q&A session, we will be making forward looking statements with respect to junket, including those within the meaning of the private Securities Litigation Reform Act of 1995.
Including statements regarding our you've tried to do an objective.
20, and relative stability of the PC market interest.
Favorite timelines and data preclinical data on regular trackable, especially commercial performance of our product candidate.
No cash burn.
Although the company believes these statements are based on reasonable expectations and assumptions of the company's management.
These forward looking statements are subs.
So I can with known and unknown risks and uncertainties, which could cause actual results to differ materially from those expressed in or implied or projected by forward looking statements.
Risks and uncertainties include among other things on.
Certainly okay.
And research and development.
Putting in relation to safety biomarkers crashing out of any results.
Just a number of ongoing and planned clinical trials for.
Revenue in approvals by regulatory authorities are on Dragon diagnostic candidates.
Change rate fluctuations and the company's continued ability to raise capital to fund its development.
Those risks and uncertainties discussed are identified in our public filings with the M. S N S.
These forward looking statements.
Speak only as of the date of this broadcast.
Other than as required by applicable law. The company does not undertake any obligation to update or revise any forward looking information or statements, whether as a result of new information future events or otherwise.
Joining me on this call and Petco opinion on our C. A.
Following the prepared remarks.
Statements will open up the call for questions that will be addressed by Jan said management.
Please limit yourself to one initial question to allow time for others.
I'll now turn the call over to our CEO Pascal PS zone.
Thank you Stephanie.
Let's begin with an overview of fall 2020 financial results.
On the revenue side most of all growth in income for 2020 comes from of your research tax credits, which amounted to 6 million euros compared to 8 million euros in 2019.
In 2020, the revenue line is significantly below below that of 2019.
<unk>.
So any six media index was 51 million and this is because in 2019, we had a one time event with a payment of the $35 million.
<unk> received from Terns pharmaceuticals.
Collaboration and license agreement for it if you're going on in China.
On the expense side R&D expenditures.
Throw in administrative expenses marketing and market access expenses and overall operating expenses were reduced to approximately approximately $85 million in 2020 compared to about $100 million. In 2019. This reduction in operating expenses is a result of the cost reduction plan.
Jetblue entered into 2020.
Since this plan implementation started towards the end of the year.
FX will just become more visible in 2021 and even more so in 2022.
In 2020, we had a financial loss of $18 7 million euros compared to a financial growth of approximately.
But we really on in 2019. This difference can be explained mostly by an exchange rate impact with a U S dollar weakening against the euro.
Let's.
Now move to the cash position no surprise here as announced in our press release issued at the end of February or cash and cash.
H amounted 271 million euros as of December 31, 2020. This does not include the cost of Apache on buyback by the company of its convertible bond, which was completed in January 2021.
You can find the detailed 2020 financial results.
You know press release.
Before we move on through 2021 outlook I would like to quickly go over some key highlights of 2020.
And obviously for Genesis at the main highlight as you know was when we.
In may the topline results from our.
Those were disappointing result, as we did not meet the predefined primary endpoint.
As Youll remember the placebo response rate was higher than expected. Therefore, the difference was not statistically significant and these results could not support.
Successful application for market authorization, we conducted an in depth analysis of the response data and given the low probability of success compared to the significant investments that would have been required to continue the program, we decided to terminate all studies related to the development of you brought on in Nash.
In September we announced on new corporate strategy, which is now focused on two priority programs.
One the development of <unk> and primary biliary cholangitis and to the development of solutions to better identify and manage patients.
In Nash, including on zone.
<unk> Nash diagnostic technology this fall.
In order to enable the implementation of this new strategy. We also had to improve our financial position and create visibility on optional 80 ahead of our phase III results in PBC.
In early 2020 free.
As outlined.
On slide in our corporate update from last September.
Oh, two financial priorities were to drastically reduce our cash burn and to renegotiate on debt.
In order to reduce the cash burn we first terminated all programs, which were associated with a potential launch of it if you want on.
Nash.
We.
Also reorganized R&D prioritize all programs to focus on a few with higher probability of success and higher commercial potential.
We also implemented a restructuring plan that reduced the overall workforce by about 40% profit, France, and the U S and we launched a large cost saving plan.
<unk> to eliminate all nonessential expenses.
All of those initiatives has been fully completed and at the end of the day, we should be able to reduce on personal cash burn by more than 50% from 2022 2022. This means that we planned for an operational cash burn of about 45 million.
Euro in 2022.
Against a.
Our cash balance, which was about $110 million before as a result of it data.
Note that in 2021, it will be a transition year as we will still have significant residual expenses from resolve it.
As well as some restructuring costs, and therefore 2021 cash burn will be around $75 million.
From November 2020 to January 2021, we led a number of major project, which consisted in a restructuring of our convertible debt.
As a reminder, we initially had.
Outstanding debt of 180 million euros with a maturity date in October 2022.
Following a negotiation with bondholders at the end of the year.
And the two meetings with shareholders. We are on one with bondholders at the end of January.
We essentially implemented a planning.
Two parts with partial buyback and new terms for the bonds essentially we managed to cut the debt roughly in half from 180 million to 95 million and we just spent about $47 million to buyback.
$85 million.
The maturity was pushed by free years until October 2025.
We should give us ample time to make the most of our phase III data in PBC, if we're successful.
It should be noted that since this operation the convertible debt has been further reduced.
Due to conversions made by bondholders in January and February.
In early March the outstanding debt.
It was $63 million so about a third of its initial initial amount.
So said differently, it's another $30 million that had been canceled in Q1 2021.
So the second half of 2020.
Very much dedicated to the restructuring.
<unk> of Gen fit and adapting to a new reality that I want here to really thank the teams that worked really hard to execute on our strategy and deliver on key milestones in record time.
In 2021, we're going to shift the focus to executing our plan and resuming our development.
Our first priority is the development of our drug candidates and a few burn off of a second line treatment of primary biliary cholangitis or PBC.
In 2021, we will continue to actively enroll patients in our phase III clinical trial additive that started back in September 2020.
As a reminder, if you don't know obtained promising results in our phase II clinical trial evaluating efficacy and safety in this indication.
<unk> has been published in February 2021 into drawn out of the pathology is essentially showed that following 12 weeks of treatment. If she went on.
Our demonstrated statistically.
Significant results on the composite endpoint.
On the same endpoint that was the basis for regulatory approval for second line treatment at.
At 52 weeks of treatment.
We believe that beyond that the efficacy. If you went on all might also bring additional benefit to PBC patients, especially.
On quality of life.
And one of the reason why we are very confident in this development is also because we have thanks to the reservoir with database and ex.
Sensitive database of safety data with many more patients that in typical PBC trial.
This data is concerned if you run on safety.
In total RBC profile.
So far and despite the Covid pandemic, which remain a concern across the globe, we on tract with low enrollment plan. So we maintain our guidance for top line results in early 2020 free.
So beyond the probability of technical success. We are also excited.
It is about the commercial prospects for PBC program, we actually organize the PVC day in February you had highlighted a potential for <unk> in.
This indication we heard from a couple of opinion leaders per circles as you asked and professor Franck in Europe.
Index veins at the unmet medical.
I'll need remains very substantial interest space. We also shared some market research data from <unk>, which obviously is a recognized leader in research and consulting services for the pharmaceutical industry.
This market.
Our market research findings clearly showed if all phase three is positive and if approved.
For commercialization if you go on a per.
Profile will make it an attractive alternative in the market is estimated to be $1 billion worth by the time of launch.
And I should point that this research was based on a robust methodology not only relying on the analysis of analog market, but also.
In depth interviews with about 28 opening in EDA and 240 HCP across the world as well as 15 payers in both U S and Europe.
So, let's now talk about Nash, we will unfortunately, not launch <unk> in.
In Nash, but we do know this market very.
We've been at the forefront of our quest to develop solutions for Nash patients for over a decade.
And over the years, we have invested a lot to really understand this disease.
Unmet medical needs of patients.
Hcp's payers the constraints and the key drivers of this market.
Although we still.
Strongly feel that there is a huge unmet medical need. We are also convinced that this market will never reach its full potential. If there is no simple reliable and cost effective noninvasive solution, that's commercially available and accessible to diagnose and later monitor patients with disease.
Just like the diabetes market needs <unk> with Nash drug market. We will also need a similar with fit for purpose noninvasive approach with the goal of eventually alleviating the need for more invasive approach like for a liver biopsy.
We are very encouraged to see an ever increasing number of.
Key biotech and large pharma companies have integrated <unk> into our Nash clinical trials and development program because that gives us confidence in the potential of these four two because one of the few widely utilize technology in the field of Nash.
As I've mentioned earlier our partner.
Cogs is about to launch a blood based molecular diagnostic test powered by on these four technology.
It will be rolled out in the U S in the coming weeks and in Canada at a later time.
It will be a major milestone as it will make these four commercially available to many of care professionals beyond the clinical.
Net leverage and beyond leave a specialty care such as the pathology.
As a reminder, labcorp is a world leader in the diagnostic industry and they have chosen to launch with this now because we consider it as a real unmet medical need.
We know that market growth will probably be ultimately linked to the availability of our first.
Total recipes, but there is still value in having a debt no to indicate a market generate real world evidence and demonstrate clinical utility to fully unlock access.
In doing so the testing market will be primed and ready to expand as novel Nash therapeutics come to market.
Indeed, two day millions of patients with suspected Nash, including those with diabetes pre diabetes obesity and over metabolic risk factors can benefit from a more definitive assessment of Nash severity on fibrosis stage.
This information will be employing to hcp's and patience.
Who can now understand the state of their disease downstream consequences and act towards impact the progression of their disease.
As you're all aware lifestyle behavioral and nutritional programs.
As a potential to be highly efficacious in this.
Yes.
As already announced we.
To create a subsidiary Thats dedicated to the development of solution to aid in the identification evaluation and monitoring of patients with Nash one of our main objective for this new structure is just to facilitate implementation of future partnership for diagnostic technologies, including this fall and have a clear delineation between.
Aim project development activity and on diagnostic activity.
The last but not the least priority of our corporate strategy announced last fall was on pipeline.
Following the R&D restructuring, we've now focused on our most promising program and thanks to his focus we should be in a position to shortly move.
It'll drop those preclinical programs into the clinic, we will provide more details on early stage programs during a media corporate debt.
Exact dates for these corporates update will be announced.
Accordingly.
Now to conclude I will say that seems very solid data readout.
So may 2020 with managed to pretty much reinvent ourselves in a very short time.
Most of the restructuring work is done and we are on a much better financial position. Thanks to a debt restructuring on one side and a reduced cash burn on the other side.
We are now clearly focused on executing on our two price.
In program, which in our opinion presented a good probability of technical success.
If a real commercial potential.
And finally R&D engine should soon offer additional clinical stage opportunity because I am looking forward to our next corporate update in June to discuss them in more detail.
Thank you for your attention and with that I'll end the call back to the operator for the Q&A session. Thank you.
Alright. Thanks.
Sure.
At this time, we will be conducting a question and answer session.
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Our first question comes from Thomas Smith with SVP Leerink. Please state your question.
Hey, guys. Thanks for taking the questions I.
I guess first can you add any additional color on the early enrollment trends that youre seeing on the <unk> trial and then.
I think you've been in the process here of incorporating.
The FDA feedback on patients won't need a mandatory paired biopsy to enter the study can you talk about your progress there and whether the feedback has been fully implemented at this point.
Hi, Hi, Doug. Thanks, Thanks for the question so first of all.
Not commenting on the exact numbers.
<unk>.
Of patient enrolled in fee interest trial, so far we might give a little bit more color.
Joining on.
Midyear mid.
<unk>.
But we are on track with what we plan, which is why we're sort of confirming the topline topline results.
Beginning of 2020 free.
Of course, the uncertainty remains the COVID-19 situation around the globe, but we feel we've been share.
Early conservative.
In our planning and therefore, we feel we feel confident that we have that debt.
Safety cushion if you will.
As far as the.
The requirement for biopsy is concerns have been lifted it's no it's not optional.
As I think we've we've discussed in the past.
The initial.
Will request from the.
EBITDA.
Probably because of.
A question that debt from from.
And have a program since.
Our understanding is that some of those question I've been on third the FDA felt much more comfortable with steel.
<unk>.
Ask that we.
As per patient, whether they will be volume during four for biopsy.
The two.
Improve the from our research.
Active but it is no longer the mandatory safety safety requirement.
And all of you.
Based on historical precedent, we feel that maybe about 15% of patient should be answering.
I don't know if Jean you want to add anything.
No I think that was pretty comprehensive Pascal, but the only thing I would add is.
As we had guided in the past.
We have ongoing interactions with the FDA and displays.
Important question for Us and.
When we went back to the FDA to discuss at this point, what we had in hand was the safety data coming.
From a resolve it trial, so remember very continuously to have a clean safety profile, but we also had a wealth.
Histological data.
Of course had no indication of any safety issues.
So we've provided on this data to the FDA and in our discussions to them.
There was on alignment.
Following that interaction debt.
On the biopsy for the latest trial should only be on voluntary basis.
Okay got it.
Got it thanks for the color and then on.
You also mentioned several preclinical programs that youre expecting to move into the clinic.
In 2021 and.
I understand you want to wait to the mid year review to kind of.
Outline exactly what those programs are but can you provide any additional color on what types of assets or targets or should we think about adjacencies too.
PVC rare liver disease called static liver disease, just any additional color that you can provide would be really helpful.
We have.
Sure.
Both.
Additional.
<unk> indication for you if you don't know.
And.
So.
New molecule.
We are still in the space of.
Liver disease and.
Specialty.
Specialty liver disease. So the reason why we're not providing more coal right now is we're still.
Finishing up some of the preclinical work and depending on.
How it how it goes we may prioritize one or two of them. So that's why.
We are waiting for those to come in before we give because before we give more color, but we are in general.
<unk>.
Specialty lever.
So thats, where <unk> sweet spot is from.
And experience standpoint.
Right, Okay that makes sense alright, guys. Thanks for taking the questions I appreciate the color.
Thanks, Tom.
Our next question.
Comes from Ed Arce with H C. Wainwright. Please state your question.
Hello, everyone.
Thomas asked in a couple of questions for up.
Congratulations on the financial and operational it's free.
Shipments in 2020.
Perhaps.
Last question.
Sharon about on this for our base Nash diagnostics that is debt.
That will be available in the coming weeks.
Can you give us some details of this launch by Lab Corp, and what are your revenue expectations for.
For this year.
So we're not guiding on.
On the.
Expectation, because it's really a labcorp.
The responsibility of the way.
Agreement work as such we continue to work on R&D and further developing this fall with Labcorp is really full responsibility for.
Market access marketing and sales.
And therefore, we're not we're not guiding.
And we're not pointing more but they might.
Update on the launch which.
Again will be is really imminent.
Okay understood.
Just another question from us.
Regarding.
The new independent subsidiary for Nash diagnostics.
Mentioned in the past can.
Can you give us some more details in terms of timing and the rationale.
Net.
This implementation this year.
Sure. So the rationale is really.
In order to further develop this for.
And.
Diagnostic and then beyond diagnostic over solution, it's going to be really a partnership with a company.
Currently.
On developing drugs in the Nash space.
Some early discussion with them we sense that.
For some of them we feel.
You saw us as a potential competitor.
Company that has developed.
<unk>.
Good night.
Is that on a nice comeback into the Nash space and that was.
In a way a barrier to really sort of in depth collaboration and sharing of data and sort of developing custom made diagnostic solutions for them.
Bye.
Sure thing with them, which are now on customers.
We identified the need.
We need to create a separate structure with a Chinese wall. If you will between ultra development activities and diagnostic solution on activity.
And we feel.
By doing this we will be able to really sort of have more of this partnership and more in depth partnership. So in terms of timing. We are working on it right now there are a few sort of.
Legal question.
To make sure that we have the right setup and there are few.
Feel free implications that that affects the timing, but clearly it's a matter of low.
<unk>.
Before before its implemented in any case before the end of the year.
Okay. Thank you so much for the channel questions.
Just to follow up.
Tax questions here.
Sure. Thank you.
And just a reminder to ask a question press star one on your telephone keypad to remove yourself from the queue you can press star two.
Our next question comes from Geoff Meacham with Bank of America. Please state your question.
Two questions asked me in on for Jonathan Thanks for taking my questions. Just first off on this for maybe you could talk about a little bit more about what youre seeing in terms of uptake in the clinic and what kind of <unk>.
Nash studies on what phase of studies are you are you seeing this for most applicable zone.
Hey, guys sure. Thanks for the question. So we are very encouraged by the reception we got from our sponsors.
Nash clinical trial. So currently we are used in about a dozen.
Nash clinical trials at various states on early stage phase II phase.
Free.
So we can comment on on actual sponsors.
But.
But just just looking at the number it's the majority of current.
<unk> net Charles what are using old technology, and we have.
Volume arrangement.
If a sponsor.
In some cases, it's a fairly direct collaboration in some cases, we have just.
Buying fee.
The test from from Covance, but it's.
It's being it's being used.
And the feedback we're getting is also.
So very positive in terms of so to two things really.
But we are hearing first is.
The ability to reduce the number of unnecessary biopsy.
When you just screen all coming patient.
And.
So do a biopsy.
In typical Nash trials the failure rate is about 70%.
So thats a lot of unnecessary biopsy each biopsy in a clinical trial setting is about $5000, which a lot of money, but it's also a lot of.
Unnecessary invasive.
<unk>.
Gesture COVID-19 patients so by base sort of pre screening.
On this tool.
We hear that if he can.
Very much increase that.
But heat rate if you will.
And pretty much.
<unk>.
The majority of unnecessary biopsy. The other things that we are hearing is that.
It has been.
Some of it's consoles has been using these flow even retrospectively in previous clinical trial.
And really sort of mapped.
The evolution, we've disease progression.
And sort of baseline NIS four.
With.
Prognosis, which.
We think is also something thats extremely interesting Phil.
As I mentioned earlier for us.
The important.
Of being in this.
On this space is really that the more.
Sponsors will be using that technology for the higher likelihood.
<unk> ultimately come to market.
We will be using <unk> technology.
AT&T.
On site and ready to patients.
Got it that's helpful and one follow up.
So on the new pipeline that you guys are on hoping to announce I think I said mid.
Yes.
I guess, you don't have to necessarily go into the details of what indications youre looking at maybe on a more high level are you using this new pipeline to expand into.
If however indications or is it more of an opportunity to dive down more so until the indications you've already looked into the company new indication.
This new indication.
Some new indication for that people are now some some new indication for other molecules, but it's all in different.
Audition.
Thanks.
Thank you.
Ladies and gentlemen, there are no further questions at this time I will turn it back to management for closing remarks. Thank you.
Thank you.
And do you think that.
Ted.
As I said, it's been it's been a heck of a ride.
The <unk> data, but we know feels that.
The restructuring part is behind us.
And now we're moving moving forward with the new strategy.
I see.
And really focused on the execution.
At the corporate strategy.
Thank you and we'll talk again sort of midyear and we'll give you that update on.
On the strategy in general and R&D in particular, thank you very much.
This concludes today's conference all parties may disconnect have a good evening.