RBC $GNFT $ICPT Genfit generally positive after some tweaking,
ICPT remains the leader
Impact:
Initial Genfit data looks generally positive although a bit confusing. We
believe ICPT's FLINT data is much more clear and convincing.
First impression
First look at Genfit data appears confusing and blurred although
conclusion may be that it is "generally positive". The press release notes
that the study met the primary endpoint at the high dose only after
correcting for some "baseline severity and site heterogeneity". We do not
understand exactly what this is but what we do know is that anything that
is positive only after slicing the data in different ways is not usually that
good. However, the good news for Genfit may be the benign safety, at
least according to limited data in the PR. Weight gain, cardiac events, or
cancer are some risks associated with the mechanism and so far in the
1-year study it looks like there were no signals. Overall, we believe this
supports our Outperform on ICPT as we believe it has the best oral drug
for NASH with potential anti-fibrotic effects.
Efficacy looks generally positive although the degree of benefit may
be questionable and no mention on fibrosis. After "correcting" for
some baseline heterogeneity, it says that the high dose met the primary
endpoint of NASH resolution of p-value 0.016. If they exclude the NAS=3
early stage patients, it reports that the p-value = 0.046, just below the
threshold of stat-sig. When we look at the other measure of decrease
of NAS-score > or = 2, which is more similar to ICPT FLINT's primary
endpoint, the p-value here is 0.04 (in contrast, FLINT's primary endpoint
p-value was 0.0002 even after stopping the trial early). Lastly, one of the
key differentiating factors for OCA has been its stat-sig improvement on
fibrosis. Here with Genfit, there is no mention; granted, it's a shorter 52
weeks study. We believe investors were at least looking for positive trends
as pre-clinical models showed potential anti-fibrotic effects.
Safety looks generally benign, could potentially be used in combination
with OCA. One of the downside arguments with OCA has been its safety
with lipid imbalances and severe pruritus. However here GFT505 may
have an edge on tolerability as markers such as lipids, weight, etc. all
look generally benign. Our discussion with KOLs recently suggest there
is greater push for combination work for NASH and we believe OCA and
GFT505 could be good combination partners given both are oral, have
efficacy trends, and do not have overlapping safety signals.