GENFIT: 2017 HALF-YEAR RESULTS: CASH POSITION AT E

2017 HALF-YEAR Results: Cash position at end of period at €126M and significant advances in the Company's pipeline

- Half year results reflect the progress of elafibranor Phase 3 RESOLVE-IT study  in NASH

- Launch of the development stage of an in vitro diagnostic (IVD) test designed to identify NASH patients to be treated

- Enrollment of the first patients in elafibranor Phase 2 study  in PBC

- Submission of request to launch a Phase 2 study to evaluate the efficacy of nitazoxanide in liver fibrosis before the end of 2017

Lille (France), Cambridge (Massachusetts, United States), September 25, 2017 - GENFIT (Euronext: GNFT - ISIN: FR0004163111), a biopharmaceutical group at the forefront of developing therapeutic and diagnostic solutions in metabolic and inflammatory diseases, that notably affect the liver or the gastrointestinal system, today announces its financial results for the 2017 half-year. It's 2017 half year business and financial report was made available to the public and filed with the Autorité des marchés financiers ("AMF") today. A summary of the consolidated financial statements is included in this press release.  The 2017 half-year consolidated financial statements are available on the "Investors" page of the GENFIT website.

Jean-François Mouney, Chairman & CEO of GENFIT, commented:

"Our 2017 half-year results mainly reflect the very significant acceleration of the RESOLVE-IT study of elafibranor in NASH, which will continue to expand considerably in the second half of 2017, given our objective to finish enrollment of approximately 1,000 patients towards the end of Q1 2018. 

They also reflect the efforts and scientific advances realized in other important programs in our pipeline such as our NASH biomarkers program, which is entering its industrial development stage for a new in vitro diagnostic (IVD) test, after a feasibility stage that confirmed the competitiveness of the diagnostic performance of our signature to identify NASH patients to be treated.

In the first half of 2017 the first patients were enrolled in the phase 2 study evaluating the efficacy of elafibranor in PBC, a rare chronic liver disease in which a substantial number of patients have no treatment options under the currently available therapies - UDCA or OCA - either because of not reaching treatment goals or because of major side effects.

We are very enthusiastic for the potential of elafibranor in PBC: in previous clinical trials, our molecule has shown a good safety profile and demonstrated its ability to act on the main efficacy marker used in PBC studies. We expect the results of this Phase 2 study to be available in the second half of next year.

By the end of this year, we expect to have filed an application for authorization to launch a Phase 2 trial to evaluate the efficacy of nitazoxanide in liver fibrosis,  currently prescribed as an anti-parasite, with proven safety of use, and whose antifibrotic potential was demonstrated in two pathological models presented by the Company last April at the International Liver Congress organized by EASL."

Main financial results:

Key aspects of the half-year 2017 results are:

• cash and cash equivalents of €126.3 million at June 30, 2017 (€152.3 million at December 31, 2016) in a context of a significant increase in current and projected operating expenses relating to the progression of the R&D portfolio;  
• Operating income of €4.7 million (€3.7 million at June 30, 2016, essentially from the Research Tax Credit, which amounted to €4.5 million for the first half 2017 compared with €3 million in the preceding half year;  
• Operating expenses of €27.1 million (€16.5 million at June 30, 2016) of which 87% represented R&D expenses. The increase in operating expenses is due :
  • mainly, to the increase in contracted research and development expenses (from €6.2 million at June 30, 2016 to €14.3 million at June 30, 2017) resulting from the  progress of the R&D program pipeline, of which the majority relate to expenses for the Phase 3 study of elafibranor in NASH;
  • and to a lesser extent, an increase in other operating expenses (from €3.2 million at June 30, 2016 to €5.2 million at June 30, 2017) relating from the grant given by the Company to The NASH Education Program ^TM , endowment fund to carry out its educational outreach program on NASH, the increase in cost of external service providers for the management of clinical trials, and the increase in intellectual property expenses and fees.  
• As a result of changes in revenues and expenses, a net loss of €22.6 million at June 30, 2017 (€12.7 million at June 30, 2016).

The following table summarizes the Consolidated Statement of Operations under IFRS for the first half 2017, with comparative figures for the first half 2016.

The summary IFRS consolidated financial statements at June 30, 2017 as well as the management discussion of the results, are presented in the appendix at the end of this document.

Main developments in the R&D pipeline programs during the first half 2017

Elafibranor in NASH

RESOLVE-IT Phase 3 study

Enrollment of patients in the RESOLVE-IT Phase 3 study progressed actively during the course of the first half 2017.

A 4 to 6 month delay in the initial enrollment calendar was observed during the first half, partly due to the increasing number of clinical trials now being launched in NASH, but is mainly attributable to the Company's desire to ensure enrollment quality in order to produce the most statistically robust clinical trial by ensuring that patient stratification ratios remain as close as possible to the medical reality.

Thus, during the half year and based on its past experience, the Company paid close attention to the following factors:

• Ethnically-balanced enrollment, even if the diversity sought creates administrative delays, in particular in certain countries in South America;  
• Balance between the two arms of the study in each study center, leading to the selection of those centers which are able to mobilize a sufficiently large number of potentially eligible patients;  
• Balance within the randomized patient population (gender, disease severity) and among geographical regions of enrollment. 

With these precautions and despite the need, in this context, to open more centers, enrollment of the first ~1000 patients to participate in the first phase of the trial is expected to be completed towards the end of Q1 2018.

Early June, approximately one year after enrollment of the first patient in the RESOLVE-IT study, based on the initial tolerability and safety data, the Data Safety Monitoring Board (DSMB) issued a positive recommendation for the continuation of the RESOLVE-IT Phase 3 trial in NASH without any modifications.

Progress in the disease awareness program

In March 2017, the Company launched a disease awareness initiative through the endowment fund it founded in 2016, The NASH Education Program(TM), asserting its leadership in this area, and sparked an unprecedented wave of interest in the French media.  This initiative is an important element in the awareness of all the stakeholders in NASH. It is also crucial in the context of enrollment for a little known and asymptomatic disease like NASH.

This initiative, welcomed by a growing number of industry specialists and analysts, is planned to be launched in other countries. The Company announced that The NASH Education Program (TM) will organize the first International NASH Information Day in June 2018.

Opportunities in combination therapy

The Company is proactive in its combination therapy approaches in NASH, with elafibranor as the background therapy. 

To address the multifactoral nature of the disease and the multiple co-morbidities that NASH patients face, the Company is evaluating the following therapeutic potential of combinations with elafibranor:

• compounds from other GENFIT programs,
• already marketed drugs with complementary mechanisms of action,
• the most advanced compounds in the current NASH clinical landscape.

The goal is to treat the largest number of NASH patients, and if possible, using reduced dosages of the drugs to be combined with elafibranor.

In this context, during the International Liver Congress (held on April 19-23, 2017 in Amsterdam, and organized by EASL), the Company presented preclinical data on the therapeutic synergies of elafibranor with an FXR agonist (exemplified with obeticholic acid). These results illustrate the potential for new combination treatments with elafibranor for the best possible care for NASH patients.

The synergistic effect obtained in the disease models used showed an attenuation of fibrosis at submaximal doses, which confirmed the relevance of these combination approaches.

Elafibranor development program in Primary Biliary Cholangitis (PBC)

The Phase 2a clinical trial which is designed to evaluate the efficacy and safety of elafibranor in patients with Primary Biliary Cholangitis (PBC) and inadequate response to ursodeoxycholic acid, entered into its active enrollment phase. 

The Company announced in April that the European and American centers participating in the Phase 2 study had all been identified, and the first patient had been enrolled in the study at the beginning of May. 

The trial is designed as follows:

• 3 arms: elafibranor 80mg, 120mg, placebo
• 45 patients (15 patients per arm)
• 12 weeks treatment
• International, multicenter study in the U.S. and in three European countries

The primary objective is to determine the effect of daily oral administration of elafibranor on serum alkaline phosphatase (ALP) in these patients, based on relative change from baseline to end of treatment compared to placebo.

Secondary endpoints will include:

• ALP < 1.67 × upper limit of normal (ULN) and total bilirubin within normal limit and > 15% decrease in ALP
• Paris, Toronto, UK PBC scores
• Pruritus and QoL (Quality of Life)
• Safety of elafibranor in a PBC population

The preliminary study results should be available, subject to meeting the Company's estimated timelines for carrying out the study and, in particular, the date of the last enrolled patient, during the second half of 2018.

Diagnostic biomarker program in NASH (BMGFT03)

At the International Liver Congress organized by EASL, the Company presented two abstracts on its biomarker program and development opportunities for a non-invasive in-vitro diagnostic (IVD) test in NASH. 

The Company presented new data on:

• Identification of a simplified diagnostic score to identify NASH patients and monitor their disease evolution; and
• New advances in research in miRNAs with diagnostic value.

These new, innovative miRNAs were identified by analyzing samples of over 500 NAFLD patients from different cohorts, including those from the RESOLVE-IT Phase 3 study.

The scoring method is the result of identifying a new algorithm based on a smaller number of variables, generating a powerful score with good performance based on AUROC (Area Under the Receiver Operating Curve), sensitivity, specificity, NPV (Negative Predictive Value) and PPV (Positive Predictive Value).

The two presentations/posters confirmed the potential of the approach developed by the Company and its ability to provide an IVD solution based on a blood test which is non-invasive, easy to use, and at lower cost and thus able to be widely available compared with other existing approaches or those in development. Although these other approaches, such as imaging and elastography, are complementary, they nevertheless require greater investment in equipment and training and would not, in any case, be able to replace a widely available point-of-care IVD tool.

Other results obtained in June confirmed the diagnostic potential of circulating microRNAs and the relevance of GENFIT's signature to identify patients with active NASH (NAS>=4) and significant fibrosis (F>=2), i.e. patients who should be treated:

• -A new Next Generation Sequencing (NGS) experiment validates the diagnostic value of 13 circulating microRNAs, previously identified in GOLDEN-505 cohort and in a cohort of obese patients (Professor Sven Francque, LB 535, EASL 2017), in the Phase 3 RESOLVE-IT serum samples.
• A bioinformatics analysis confirms that a previously described signature combining miR-34a, alpha-2 macroglobulin, HbA1c and YKL-40 (Professor Stephan A. Harrison, LB 534, EASL 2017) has a significantly better diagnostic performance than other main scores described in scientific literature, when tested in both GOLDEN-Diag and RESOLVE-IT cohorts (see table below):

This data and the level of statistical performance obtained suggest that the GENFIT signature can answer different medical needs, at different steps of the patient journey, allowing general practitioners, endocrinologists, diabetologists and hepatologists to support their diagnosis including decision to treat a patient with an anti-NASH drug.  The Company has finished the feasibility phase of the program to begin, in the second half of the year the phase of development which should be carried out with an industrial partner.

As part of the industrial phase for the development of a new In vitro Diagnostic (IVD) test, GENFIT intends to partner with a major diagnostic company with particular expertise in microRNA application to IVD, which would also include the development of the test within IVD regulatory requirements, as well as the manufacturing of the kits.

Finally, during the first half, GENFIT continued to widen its research collaboration program on NASH biomarkers and announces the signing of an agreement with the University Hospital Center Angers (France). This collaboration with Professor Jérôme Boursier and Professor Paul Calès will provide access to an additional independent cohort of NASH and non-NASH patients. In the coming months, GENFIT expects to sign other collaborations to obtain access to new prospective longitudinal cohorts for further validation of GENFIT diagnostic test in future intended uses.

Repurposing of nitazoxanide in fibrosis (TGFTX4 program)

In the context of the TGFTX4 program, the Company has identified several potential drug candidates that show a strong anti-fibrotic activity in both cell-based assays and in vivo disease models.

These results were obtained either by the therapeutic repurposing of compounds approved in another indication - allowing the Company to shorten development time - or by a more classical hit-to-lead optimization of the Company's proprietary compounds using a phenotypic screening approach in TGF beta-activated human hepatic stellate cells.

Nitazoxanide, an antiparasitic drug with proven safety, was repurposed as a potent antifibrotic agent with efficacy demonstrated in two disease models of liver fibrosis, as presented at the International Liver Congress organized by EASL.

The Company plans to submit to the FDA an application for authorization to launch a first Proof-of-concept phase 2 study of nitazoxanide in NASH patients with advanced fibrosis, before the end of 2017.

TGFTX1 program (RORgt)

As part of ambitious efforts to diversify and expand its development pipeline in the treatment of autoimmune, inflammatory and fibrotic diseases, the Company has conducted significant work in the design and optimization of novel RORgt inverse agonists.

The Company has recently launched pre-IND studies for a topically delivered treatment in mild to moderate psoriasis vulgaris . The Company is currently looking to forge a partnership with a company that has an established dermatology franchise for both topically and orally administered drugs, to move this program forward.

Main corporate developments

Governance

At the June 16, 2017 Extraordinary Shareholders' Meeting, the shareholders approved the change in mode of administration and management of the Company proposed by the management and decided to change from the historical two-tiered board structure of the Company (Executive Board and Supervisory Board) to a one tiered board with a Board of Directors.  

The same Meeting also appointed all of the new members of the Board of Directors proposed by management, which is now composed of the following members:

• Jean-François Mouney
• Xavier Guille des Buttes
• Anne-Hélène Monsellato
• Catherine Larue
• Frédéric Desdouits
• Philippe Moons
• Biotech Avenir, represented by Florence Séjourné

GENFIT also welcomed two new Board members to the Company:

Dr. Catherine Larue   who has been CEO ad interim of Luxembourg Institute of Health (LIH), a biomedical research institute, since January 2016. 

From 2012 to end 2015, she was CEO of the Integrated Biobank of Luxembourg (IBBL), where she led the development of the biobanking strategy and new initiatives in the field of personalized medicine. Prior to joining the IBBL, Dr. Larue piloted the biomarker program at Genfit until 2012.  

Dr. Catherine Larue began her career as team leader at Sanofi at the Montpellier, France based R&D center in the cardiovascular research department.  She later joined Sanofi Diagnostics Pasteur Inc., in Minnesota, United States, where she ran the immunology department for three years, developing tests and instruments.  She thereafter returned to Paris, France as Director at Sanofi Diagnostics Pasteur, and then spent 11 years at the Bio-Rad group, holding different management positions.  She participated in the discovery of several innovative biomarkers and the commercialization of dozens of diagnostic products. 

Dr. Catherine Larue is the author of 85 articles and has filed 13 patents.  She holds a doctorate in experimental biology and an accreditation to direct research ( Habilitation à Diriger la Recherche or HDR) from the University of Rouen, a degree in clinical oncology from the University of Paris VI and an executive MBA from St John's University (New York).  In 2014, she was voted Luxembourg's most inspiring woman of the year in the "Science, Technology and Research" category.

Anne-Hélène Monsellato is a Certified Public Accountant in France since 2008 and graduated from EM Lyon in 1990 with a degree in Business Management.

Since May 2015, she has been an independent director, the Chairman of the Audit and Risk Committee and a member of the Corporate Governance and Nomination Committee of Euronav, a Belgian crude oil tanker company listed on NYSE and Euronext Brussels.  In addition, she serves as the Vice President and Treasurer of the Mona Bismarck American Center for Art and Culture, a U.S. public foundation based in New York.

From 2005 until 2013, Mrs. Monsellato served as a Partner with Ernst & Young (now EY), Paris, after having served as Auditor/Senior, Manager and Senior Manager for the firm starting in 1990. During her time at EY, she gained extensive experience in cross border listing transactions, in particular with the U.S., internal control and risk management, and was involved with several companies in the pharmaceutical and biotechnology sector. 

Mrs. Monsellato is an active member of the French Association of Directors (IFA) and of the selection committee of Femmes Business Angels since 2013. 

The new Board of Directors met following the Ordinary and Extraordinary Shareholders' Meeting and appointed Mr. Jean-François MOUNEY as Chairman of the Board of Directors and Chief Executive Officer of the Company.  Mr. Xavier GUILLE DES BUTTES was appointed Vice-Chairman of the Board of Directors.

The members of the Audit Committee and the Nominations and Compensation Committee were also appointed:

Audit Committee:

• Anne-Hélène Monsellato, Chairman
• Philippe Moons
• Xavier Guille des Buttes

Nominations and Compensation Committee:

• Xavier Guille des Buttes, Chairman
• Jean-François Mouney
• Catherine Larue

Main upcoming events

GENFIT participates in a number of scientific and investor events.  More details on the calendar are available on GENFIT's website under the "Media-Events" tab.

APPENDICES

GENFIT

Half-year Consolidated

Financial Results

At June 30, 2017

The Statements of Financial Position, Statements of Operations and Statements of Cash Flow of the Group were prepared in accordance International Financial Reporting Standards (IFRS).

The audit procedures on the consolidated financial statements have been performed. The half year consolidated financial statements for the period ended June 30, 2017 were approved by Board of Directors on September 22, 2017.

The full consolidated financial statements as well as the notes to the consolidated financial statements for the period ended June 30, 2017 are available on GENFIT's website in the "Investors" tab.

Consolidated Statement of Financial Position

ASSETS

As of (in € thousands)

2016/12/31 2017/06/30 Non-current assets Intangible assets 668 778 Property, plant & equipment 3 010 4 676 Other non-current financial assets 541 571 Total - Non-current assets

4 219 6 025 Current assets Inventories 14 4 Current trade & others receivables 8 394 13 192

174 173 Other current assets 1 137 1 723 Cash & cash equivalents 152 277 126 286 Total - Current assets

161 996 141 379 Total - Assets

166 214 147 404 EQUITY & LIABILITIES

As of (in € thousands)

2016/12/31 2017/06/30 Shareholders' equity Share capital 7 792 7 792 Share premium 237 305 237 434 Retained earnings (68 654) (102 321) Currency translation adjustment 21 4 Net loss (33 667) (22 615) Total shareholders' equity - Group share

142 797 120 294 Non-controlling interests 0 0 Total - Shareholders' equity

142 797 120 294 Non-current liabilities Non-current loans & borrowings 5 004 6 916 Non-current deferred income and revenue 3 3 Non-current employee benefits 849 893 Total - Non-current liabilities

5 855 7 812 Current liabilities Current loans & borrowings 1 248 1 587 Current trade & other payables 16 146 17 549 Current deferred income and revenue 1 1 Current provisions 167 162 Total - Current liabilities

17 562 19 299 Total - Equity & liabilities

166 214 147 404

Statement of Operations

Statement of Cash Flows

Discussion of the 2017 half year results

1 - Comments on the statement of consolidated net income for the periods ended June 30, 2016 and June 30, 2017

1. Revenue and other income

The Company's revenue and other income results, in particular, from the research tax credit, its revenues, government grants and other operating income.

Revenue and other income amounts to €4,710 thousand at June 30, 2017 compared to €3,647 thousand for the same period in the previous year representing an increase of 29%.

Revenues and other income are mainly made up of the Research Tax Credit which amounted to €4,533 thousand in the first half 2017 compared to €3,043 thousand in the first half 2016. This increase of 49% of the Research Tax Credit is many due to the increase in research and development expenses over the two halves, which is due to the progress of the RESOLVE-IT Phase III clinical study (see in particular, (ii) "operating expenses and other operating income by destination" below).

Revenues totaled €65 thousand at June 30, 2017 compared with €151 thousand for the same period in the previous half year, or a decrease of 51% (for more detail, see note 6.3.17 of the notes to the 2017 half year consolidated financial statements). 

Government grants in the first half 2017 were €21 thousand compared with €384 thousand for the same period the previous year, owing to the end of the last subsidized research programs.

Finally, other operating income increased from €69 thousand at June 30, 2016 to €91 thousand at June 30, 2017. 

1. Operating expenses and other operating income by destination

The tables below breaks down operating expenses by destination mainly into research and development expenses on the one hand, and general and administrative expenses on the other, for the half years ended June 30, 2016 and 2017.

Operating expenses in the first half 2017 amounted to €27,084 thousand compared to €16,489 thousand in first half 2016, or a 64% increase. They include, in particular:

• research and development expenses , which include the wages and salaries paid to the research staff (€3,984 thousand at June 30, 2017 compared to €3,566 thousand at June 30, 2016), the cost of consumables and operational outsourcing (particularly clinical and pharmaceutical representing €14,329 thousand at June 30, 2017 compared to €6,226 thousand at June 30, 2016), expenses related to intellectual property and the grant to the endowment fund, The NASH Education Program founded in December 2016. These research and development expenses amounted to €23,670 thousand at June 30, 2017 compared to €12,323 thousand at June 30, 2016), or 87% and 75% of operating expenses, respectively.

The first half 2017 was marked by the increase in operational outsourcing costs related to the Phase III RESOLVE-IT study compared with the first half 2016 which was the beginning of the study.  Although other programs also generated operational outsourcing costs in the first half 2017, these amounts were less significant compared to those related to the Phase III RESOLVE-IT because they are in an earlier stage of R&D.

The expenses for personnel assigned to research in the first half 2017 increased by 12% compared to the expenses for the previous period a year earlier due to the increase in research personnel (93 versus 83), and to a lesser extent, the impact in the first half 2017 of expenses related to the implementation of stock option and free share plans on December 15, 2016, while no equity incentive compensation of this kind was granted during the first half 2016. These two elements compensated the fact the Company's incentive plan was not used in the first half 2017, whereas bonuses were granted under the plan in the first half 2016.

• general and administrative expenses , which include the costs of personnel not assigned to research (€1,664 thousand at June 30, 2017 compared to €2,202 thousand at June 30, 2016), and administrative and commercial costs.

These general and administrative expenses amounted to €3,448 thousand in the first half 2017 compared with €4,166 thousand in the first half 2016, or 13% and 25% of operating expenses and other operating income, respectively.

The expenses for personnel not assigned to research in the first half 2017 decreased 24% compared with the expenses in the same period in the preceding year. Although the average number of personnel not assigned to research (31 versus 25) increased from one half to the other, in the absence of eligible events under the incentive plan, the bonuses granted to certain of these employees under the incentive plan in the first half 2016, were not granted in the first half 2017.    

1. Operating expenses and other operating income by type

Broken down by type instead of by destination, operating expenses mainly included the following:

Contracted research and development activities conducted by third parties

Contracted research and development expenses conducted by third parties amounted to €14,333 thousand in the first half 2017 compared to €6,226 thousand in the first half 2016, corresponding to a 130% increase, which is mainly due to the increase in costs related to the Phase III RESOLVE-IT study.  The Company expects this expense item to continue to increase substantially during the second half of 2017 in conjunction with the progress of the RESOLVE-IT study.

Employee expenses

Employee expenses excluding share-based compensation amounted to €5,519 thousand in the first half 2017 compared to €5,768 thousand in the first half 2016, or a 4% decrease, despite the average number of employees increasing from 103 in the first half 2016 to 124 in the first half 2017.

This change is mainly due to bonuses granted to certain employees under the Company's incentive plan during the first half 2016, whereas the incentive plan was not used in the first half 2017.

The amount recognized as share-based compensation free of any impact on cash flow increased from €0 in the first half 2016 to €129 thousand in the first half 2017 as a result of the stock option and free share plans put in place by the Company on December 16, 2016. For further information, please refer to Note 6.20 of the Notes to the Consolidated Financial Statements for the period ended June 30, 2017.

Other expenses

Other expenses amount to €5,190 thousand in the first half 2017 compared to €3,152 thousand in the first half 2016, or an increase of 65%. They include, in particular:

• "fees," which include legal, audit, accounting and recruiting fees, the fees of various advisors (press relations, investor relations, communication, IT), external service providers (guard, security, reception and clinical trial management), as well as the fees of some of its scientific advisers.  This amount also includes Intellectual Property expenditures corresponding the fees incurred by the Company in connection with the registration and protection of its patents;  
• expenses related to the rental, use, and maintenance of its registered offices, and rental of offices in the United States;  
• expenses related to business travel and conferences of employees and external service providers' as well as the costs of participation in scientific, medical, financial, and business development conferences.

This increase is mainly due to the Group's business' faster pace of development and its stronger presence in the United States.

In particular, the growth in other operating expenses related to R & D activity from one semester to the next is mainly due to:

• the impact in the first half 2017 accounts of the Company's grant to the endowment fund, The NASH Education Program (the fund had not yet been created in the first half 2016);
• the increase in staffing costs for the management of ongoing clinical trials; and
• the increase in fees and charges for Intellectual Property.

The decrease in other operating expenses related to general and administrative activities from one semester to the next is essentially due to a decrease in legal fees.

Financial income

Financial income amounted to a loss of €214 thousand at June 30, 2017 compared to financial income of €181 thousand in the first half 2016.

This loss is due to an increase in financial expenses which increased from €97 thousand at June 30, 2016 to €555 thousand at June 30, 2017, which was mainly the result of an exchange rate loss of €511 thousand (compared with €19 thousand at June 30, 2016) due to changes in the euro to dollar exchange rate.

1. Net income (loss)

The first half 2017 resulted in a net loss of €22,615 thousand compared to a net loss of €12,662 thousand in the first half 2016.

2- Comments on the statement of financial position at June 30, 2017

At June 30, 2017, the total amount of the Group's Statement of Financial Position amounts to €147,404 thousand compared to €166,214 thousand as of December 31, 2016.

At June 30, 2017, the Group's cash and cash equivalents amount to €126,286 thousand, compared to €152,277 thousand as of December 31, 2016.

1. Non current assets

Non-current assets, which include goodwill and intangible, tangible, and financial assets, increase from €4,219 thousand as of December 31, 2016 to €6,025 thousand at June 30, 2017.  This increase is mainly due to investments made in the first half 2017 (scientific equipment and IT materials).

1. Current assets

Current assets amount to €141,379 thousand at June 30, 2017 compared to €161,996 thousand as of December 31, 2016. 

The variation of trade and other receivables is justified by the receivables related to the research tax credit for the fiscal years 2014, 2016 and the first half 2017.  Further information regarding the nature of these receivables is provided in note 6.7 of the Notes to the half 2017 year consolidated financial statements included herein.

The variation of trade and other receivables corresponds to the increase in expenses recognized in advance related to current operating expenses.

Cash and cash equivalents went from €152,277 thousand as of December 31, 2016 to €126,286 thousand at June 30, 2017, a decrease of 17%.

1. Shareholders' equity

As of June 30, 2017, the amount of the Group's shareholders' equity totaled €120,293 thousand compared to €142,797 thousand as of December 31, 2016. 

The change in the Company's shareholders' equity is mainly due to the recognition of the half year loss.

The Notes to the 2017 half year consolidated financial statements included herein, as well as the Table of Changes in Shareholders' Equity established under IFRS provide details on the change in the Company's share capital and the Group's shareholders' equity, respectively.

1. Non current liabilities

This mainly concerns the following liabilities reaching maturity in more than one year:

• conditional advances granted to GENFIT SA by Bpifrance for the purpose of financing the research programs detailed in Note 6.12.1.1 "Refundable and Conditional Advances" of the notes to the 2017 half year  consolidated financial statements included herein; and
• bank loans (for further detail, please refer to section note 6.12.1.2 "Bank loans" of the notes to the 2017 half year consolidated financial statements included herein).  
• Current liabilities

This balance sheet item mainly includes liabilities reaching maturity in less than one year, such as conditional advances granted by Bpifrance to GENFIT, trade payables, and social security expenses. Please also refer to notes 6.12.2 and 6.13 of the notes to the 2017 half year consolidated financial statements included herein. Changes in current liabilities are essentially due to, as indicated above, the increase in trade payables related to the increase in contracted research and development activities.

About elafibranor

Elafibranor is GENFIT's lead pipeline product. Elafibranor is an oral once-daily treatment, and a first-in-class drug acting via dual peroxisome proliferator-activated alpha/delta pathways developed to treat, in particular, nonalcoholic steatohepatitis (NASH). Elafibranor is believed to address multiple facets of NASH, including inflammation, insulin sensitivity, lipid/metabolic profile, and liver markers.

About NASH

"NASH", or nonalcoholic steatohepatitis, is a liver disease characterized by an accumulation of fat (lipid droplets), along with inflammation and degeneration of hepatocytes. The disease is associated with long term risk of progression to cirrhosis, a state where liver function is diminished, leading to liver insufficiency, and also progression to liver cancer.

About PBC

"PBC", or Primary Biliary Cholangitis, is a chronic disease in which bile ducts in the liver are gradually destroyed. The damage to bile ducts can inhibit the liver's ability to rid the body of toxins, and can lead to scarring of liver tissue known as cirrhosis.

About GENFIT

GENFIT is a biopharmaceutical company focused on the discovery and development of drug candidates in areas of high unmet medical needs corresponding to a lack of suitable treatment and an increasing number of patients worldwide. GENFIT's R&D efforts are focused on bringing new medicines to market for patients with metabolic, inflammatory, autoimmune and fibrotic diseases, that affect the liver (such as NASH - Nonalcoholic steatohepatitis) and more generally the gastro-intestinal arena. GENFIT's approach combines novel treatments and biomarkers. Its lead proprietary compound, elafibranor, is currently in a Phase 3 study. With facilities in Lille and Paris, France, and Cambridge, MA (USA), the Company has approximately 130 employees. GENFIT is a public company listed in compartment B of Euronext's regulated market in Paris (Euronext: GNFT - ISIN: FR0004163111). www.genfit.com

Forward Looking Statement / Disclaimer This press release contains certain forward-looking statements. Although the Company believes its expectations are based on reasonable assumptions, these forward-looking statements are subject to numerous risks and uncertainties, which could cause actual results to differ materially from those expressed in, or implied or projected by, the forward-looking statements. These risks and uncertainties include among other things, the uncertainties inherent in research and development, including related to biomarkers, progression of, and results of clinical data from, the RESOLVE-IT trial and the trial of elafibranor in PBC, review and approvals by regulatory authorities, such as the FDA or the EMA, regarding in particular, elafibranor in NASH and PBC, as well as other drug candidates in other indications and biomarkers candidates, the success of any inlicensing strategies, the Company's continued ability to raise capital to fund its development, as well as those discussed or identified in the Company's public filings with the AMF, including those listed under Section 4 "Main Risks and Uncertainties" of the Company's 2016 Registration Document registered with the French Autorité des marchés financiers on April 28, 2017 under n° R.17-034, which is available on GENFIT's website ( www.genfit.com ) and on the website of the AMF ( www.amf-france.org ). Other than as required by applicable law, the Company does not undertake any obligation to update or revise any forward-looking information or statements.

This press release and the information contained herein do not constitute an offer to sell or a solicitation of an offer to buy or subscribe to shares in GENFIT in any country. This press release has been prepared in both French and English. In the event of any differences between the two texts, the French language version shall supersede.

CONTACT

GENFIT | Jean-François Mouney - Chairman & CEO | +333 2016 4000 PRESS RELATIONS | Bruno Arabian | +33 6 8788 4726

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