Investigation of Genfit SA
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Genfit SA (GNFT) Misled Shareholders Regarding the Viability of its Lead Drug Candidate Elafibranor
Genfit conducted its IPO on March 27, 2019, at the price of $20.32 per share.
At the time of the IPO, elafibranor was in a “pivotal” phase 3 clinical trial called “RESOLVE-IT,” which evaluated the efficacy and safety of elafibranor 120mg versus placebo in patients with nonalcoholic steatohepatitis (“NASH”) and fibrosis. Genfit planned to use the data from the RESOLVE-IT study to support the Company’s new drug application to the FDA for elafibranor. The Offering Documents supporting the IPO stated that Genfit had progressed to the phase 3 RESOLVE-IT study based on the positive results from Genfit’s phase 2b study concerning the efficacy elafibranor. Genfit stated that “The results provide strong and unequivocal evidence of the beneficial effects of [elafibranor] at 120 mg/d on the primary endpoint.” Further, the Offering Documents repeatedly stated that elafibranor was “well-positioned” for FDA approval.
On February 20, 2020, post-market, Genfit issued a press release announcing a delay in the release of topline interim results from the RESOLVE-IT study. On this news, Genfit’s stock fell $1.05 per share, or 5.87% over two trading days. Then, on May 11, 2020, during after-market hours, Genfit issued a press release announcing results from an interim analysis of the RESOLVE-IT phase 3 study of elafibranor, disclosing that “[e]lafibranor did not demonstrate a statistically significant effect on the primary endpoint of NASH resolution without worsening of fibrosis.” On this news, Genfit’s ADS price fell 67.73%, or $14.90 per share, to close at $7.10 per share on May 12, 2020.