French biotechnology company Genfit on Monday announced plans to acquire privately held startup Versantis in a bid to expand its portfolio of liver disease drugs.
GenFit will pay 40 million Swiss francs, or about $41 million up front, for Versantis. The deal could include another $67 million in payments for Versantis’ shareholders if the startup’s two drug candidates each succeed in Phase 2 testing. The deal is expected to close in the fourth quarter of 2022.
GenFit is best known for its work in nonalcoholic steatohepatitis, a leading cause of liver disease and a condition that can cause inflammation, scarring and eventually a liver transplant. The company spent years developing a drug called elafibranor for NASH and, despite mixed results in early trials, advanced it to the final stages of clinical testing.
GenFit, which is publicly traded in Europe, priced an initial public offering in the U.S. in 2019 on the promise of elafibranor. But the drug ultimately failed a Phase 3 study a year later, triggering job cuts and a strategic restructuring.
GenFit has since been focused on rebuilding its pipeline while developing elafibranor for primary biliary cholangitis, or PBC, another liver disorder. A Phase 3 study in PBC is currently underway, with results expected next year. The company also has a drug for fibrosis that’s in early-stage testing and last year acquired rights to another candidate, for cholangiocarcinoma, that’s now in Phase 2 testing.
By acquiring Versantis, GenFit has added two more prospects to its portfolio. One candidate, VS-01, is in clinical development for acute liver failure and urea cycle disorders and is ready for Phase 2 testing. A second drug, VS-02, is in early testing for hepatic encephalopathy.
Genfit went public in the U.S. at about $20 per share. The company has lost more than 80% of its value since. Shares traded at just over $4 apiece on Monday.