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A recent article published in french by AFP and relayed in many media like Science & Avenir reveal an interesting sentence exprimed  by Jean François Mouney, Chairman of the Executive Board of GENFIT..

This sentence is teasing on a possible acquisition of GENFIT by a big Pharmaceutical Laboratory.

In French :

"La probabilité d'être acquis par un grand groupe pharmaceutique reste très élevée", dit à l'AFP Jean-François Mouney, PDG de Genfit. "Mais on ne reste pas plantés sur notre chaise à attendre que le client frappe à la porte, on avance. Et plus on avance, plus on fait envie »

can be translated as:

"The probability of being acquired by a major pharmaceutical group remains very high," Jean-François Mouney, CEO of Genfit, told AFP. "But we do not stay on our chair waiting for the customer to knock on the door, we go ahead, and the more we advance, the more we envy »

This statement is important because, without constituting a major break with the discourse held until then, it is nevertheless a significant inflection of the elements of languages ​​used previously.

The message that prevailed to date was:

1 - Genfit wants to remain master of its destiny, the preferred strategy is the establishment of licensing agreements for the USA and Asia and a co-development in Europe. The aim is to make Genfit a Mid Pharma.

2 -  If a Lab propose a big amount of money , its offer will be examined.

Yet, Mr Mouney's necessarily thoughtful and weighed statement, suggests that solution two is becoming more consistent.

Speaking of the very high likelihood of a takeover by a major pharmaceutical group, the company indirectly suggests that the direct offers, or  technical and financial proposals of big laboratories gradually approach the threshold valuation which could allow an offer to be examined with benevolence.

The second part of the message also implies that GENFIT is working to increase its value each day and that, as a result, the threshold valuation rises every day. One way, perhaps, to remind the major pharmaceutical groups that time does not really play in their favor.

It is to wonder to whom this message is really intended?

  • At the market, to prepare it ?
  • To investors, to encourage them to boost the value which will facilitate the negotiation ? (Although the transaction on Tobira showed that in this kind of deals the initial market capitalization may be 10 times less than the deal amount without causing any problems)
  • At the laboratories to point out that we are approaching the final negociation phase and it is time that they clarify their position ?

In all cases it seems that things are accelerating behind the scenes.

The second information found in the article is a confirmation of the cost of treatment taken into account by the laboratories in the market projections

"Ultimately, prices in NASH are expected to reach those of oral anti-diabetics, around $ 13-15,000 a year in the US and about half as much in Europe," said Mouney.

It should be noted that these values ​​are somewhat similar to the values ​​used by NASHBIOTECHS in its market forecast simulator, which makes it possible to confirm estimates of projected turnover from 2021.

An estimated annual turnover peak over $ 6 billion could gives a good indication of the minimum valuation that GENFIT expects from an offer from a large laboratory.

 I have my idea on this valuation but I let each reader proceed to his own estimation.

G. Divry

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