–~~Elafibranor in PBC: Phase 3 ELATIVE clinical trial topline data readout in the second quarter of 2023;~~

–~~NTZ in ACLF: Phase 1 data readout by third quarter of 2022 ;~~

–~~GNS561 in CCA: Finalize development plan and start Phase 2 trial by the second half of 2022;~~

–~~NASH Diagnostics: Further establish NIS4 technology.~~

~~The third priority is to further strengthen our internal organization, to ensure our ability to meet our corporate ambitions for the coming years.~~

ix. Our Drug Candidates and Diagnostic Development Programs

~~Cholestatic Diseases~~Our pipeline includes our most advanced asset elafibranor in PBC (out-licensed to Ipsen) and two therapeutic franchises: one focused on ACLF with five proprietary or in-licensed assets, and one focused on other life threatening diseases with two proprietary assets. We also have developed two programs in a diagnostic franchise.

~~Chronic cholestatic diseases are~~1.Elafibranor in Primary Biliary Cholangitis (PBC) - out-licensed to Ipsen

•About PBC

PBC is a rare, chronic, progressive liver disease of autoimmune etiology, characterized by ~~defective~~injury of the intrahepatic bile ducts that, in untreated patients or non-responders to existing therapies, may progress to hepatic fibrosis, cirrhosis, hepatic decompensation, and death unless they receive a liver transplant. PBC disproportionately affects women versus men (approximately 10:1) and is typically diagnosed in patients between 40 years to 60 years of age. The incidence and prevalence rates for PBC in Europe, North America, Asia, and Australia are reported as ranging from 0.33 to 5.8 per 100,000 inhabitants and 1.91 to 40.2 per 100,000 inhabitants, respectively. It is estimated that there were 47,000 prevalent cases of PBC in the United States white population and that approximately 3500 new cases are diagnosed each year. Over 60% of the newly diagnosed cases are asymptomatic. The majority of asymptomatic patients become symptomatic within 10 years and the estimates for developing symptoms at 5 and 20 years are 50% and 95%, respectively. Patients with PBC progress at varying rates, some experiencing liver decompensation over a period of several years while others experience liver decompensation over decades. PBC is one of the leading indications for liver transplantation. Despite its rarity, PBC remains an important cause of morbidity in the Western world. PBC has also been identified as an important risk factor for hepatocellular carcinoma.

PBC is characterized by cholestasis caused by autoimmune destruction of biliary ducts with progressive impairment of bile flow in the liver. This results in increased hepatocellular bile acid ~~transport from the liver~~concentrations, which are toxic to the ~~intestine, which~~liver. Such hepatocellular injury is ~~caused by~~associated with a local inflammatory response resulting early on in an abnormal elevation of serum alkaline phosphatase (ALP) levels, a hallmark of the disease. Antimitochondrial antibody and IgM are specific immunological hallmarks of PBC, and antimitochondrial antibody is a diagnostic marker of the disease in approximately 90% of patients. Liver biopsy, while confirmatory, is no longer the standard of care.

ALP is also routinely used to clinically monitor the disease and serves as a leading indicator of disease progression. ALP increases with disease progression as bilirubin starts to decline in more advanced disease (as the excretory function starts to decline), and both have been shown to be highly predictive of long-term clinical outcomes (e.g., transplant-free survival). There is a near log-linear correlation of both elevated ALP and bilirubin after 1 year of follow-up with long-term liver transplant-free survival.

The most common symptoms of PBC are fatigue and pruritus. The mechanisms underlying these symptoms are not well elucidated and neither correlates with disease stage or clinical outcomes.

The following diagram depicts where and how bile ducts are destroyed.

–Limitations of Current Treatment Options

Ursodeoxycholic acid (UDCA), an epimer of the primary ~~damage~~human bile acid, was the only medicine approved to ~~the biliary epithelium~~treat PBC until May 2016. UDCA has been shown to improve ALP and bilirubin, and to delay histological progression, thereby increasing liver transplant-free survival. While UDCA has had a marked impact on clinical outcomes in ~~most cases.~~PBC, a large proportion of patients have an inadequate response. It is estimated that up to 40% of UDCA-treated patients have a suboptimal response to UDCA. ALP levels remain elevated in up to 70% of patients who are currently being treated or are intolerant to UDCA. Such patients remain at risk of disease progression and longer term adverse clinical outcomes.

5350

~~Elafibranor for the Potential Treatment of PBC~~

~~About PBC~~

PBC is an autoimmune disease resulting from progressive destruction of the small bile ducts inside the liver. When liver bile ducts are destroyed, the bile which normally would travel to the small intestines to aid in digestion and elimination of waste instead accumulates in the liver, contributing to inflammation and fibrosis. PBC is believed to be an autoimmune disease in which a person’s immune system is overactive and attacks normal, healthy bile duct cells. The following diagram depicts the distinction between normal bile ducts and those that have been destroyed.

PBC is a disease with a global prevalence of approximately 40 cases per 100,000. In the United States, the prevalence of PBC increased from 21.7 to 39.2 per 100,000 from 2006 through 2014. Women are much more likely to be affected by PBC than men, and the incidence increases after the age of 50.

The initial symptoms of PBC are general fatigue and pruritus, which is itchy skin; other potentially associated symptoms include dry eyes, dry mouth and jaundice. However, approximately 60% of patients are asymptomatic when the disease is diagnosed. PBC is diagnosed based on blood tests revealing the presence of anti-mitochondrial antibodies, or AMAs, and high levels of the liver enzyme ALP (alkaline phosphatase). Although cirrhosis occurs in advanced stages of the disease, most patients do not have cirrhosis at the time of PBC diagnosis.

Left untreated, PBC typically leads to cirrhosis, liver failure and the need for liver transplantation. In the absence of treatment, the 10-year survival of asymptomatic patients is estimated to be between 50 and 70%, with a median survival of 16 years. Among symptomatic patients, median survival in the absence of treatment is only seven to eight years. PBC is believed to be responsible for 2-3% of deaths by cirrhosis.

~~Limitations of Current Treatment Options~~

There is currently no cure for PBC, although there are medications that work to slow its progression. For many years, ursodeoxycholic acid, or UDCA, was the only drug approved by the FDA for the treatment of PBC. UDCA is a naturally occurring bile acid that is normally produced in the liver by healthy cells. UDCA, administered orally, is designed to help move bile through the liver and into the intestines. Although UDCA is effective in more than 50% of patients, up to 40% of patients do not respond or respond poorly to treatment and an additional 5-10% of patients are unable to tolerate the drug.

In May 2016, the FDA approved obeticholic acid, marketed as Ocaliva™ by Intercept Pharmaceuticals, Inc., for the treatment of PBC in combination with UDCA in adults with an inadequate response to UDCA, or as a ~~single therapy~~monotherapy in adults unable to tolerate UDCA. In September 2017, following the death of 19 PBC patients being treated with Ocaliva,™, the FDA published a safety announcement for Ocaliva,™, indicating that some patients with moderate to severe decreases in liver function had been incorrectly dosed, resulting in an increased risk of serious liver injury and death. The FDA also indicated that Ocaliva™ may also be associated with liver injury in some patients with mild disease who are receiving the correct dose. In February 2018, the FDA issued a Boxed Warning added to the Ocaliva™ label, the most severe warning required to be included in labeling by the FDA. Concerns remain over pruritus and serious liver injury or liver death caused by administration of ~~Ocaliva~~™.Ocaliva. In its Phase 3 clinical trial, severe pruritus was reported in 23% of patients in the Ocaliva™ 10 mg dose cohort and in 19% of patients in the Ocaliva™ titration cohort, in which dosing was initiated at 5 mg and titrated up to 10 mg based on clinical response, compared to 7% of patients in the placebo group. In May 2021, the FDA issued a drug safety communication restricting the use of Ocaliva™ in patients with PBC having advanced cirrhosis. The use of Ocaliva™ is now contraindicated in advanced cirrhosis due to the risk of liver failure, which may require liver transplant.

Accordingly, we believe there is still a significant medical need for new therapies, as current treatments either are ineffective for a large portion of PBC patients, cause significant side effects or include safety risks.

•Our ~~Solution:~~Program: Elafibranor for the Potential Treatment of PBC

We believe that elafibranor has the potential to offer a therapeutic solution that can be effective in treating PBC while also maintaining a favorable tolerability ~~profile~~ and ~~lack~~safety profile.

–Elafibranor in PBC: rationale and mechanism of ~~demonstrated safety concerns.~~action

Elafibranor mechanism of action targets PPARα and PPARδ. Targeting PPAR receptors has shown multiple beneficial ~~activities,~~effects, including the reduction of bile acid synthesis, improved detoxification of bile in the bile duct and anti-inflammatory activity. ~~In third-party clinical trials, drugs targeting PPAR receptors resulted in a significant decrease in serum alkaline phosphatase (ALP) and improved biochemical profiles and pruritus in PBC patients.~~ Patients with PBC often have elevated ALP, a marker of cholestasis, and studies have shown a correlation between elevated ALP levels and increased risk of adverse patient outcomes.

We have observed elafibranor’s effect in ~~lowering~~reducing ALP levels and markers of inflammation in our Phase 2 clinical trial in patients with PBC.

–

~~Our Clinical Program for Elafibranor~~Phase 2: positive Phase 2 results published in ~~the Treatment of PBC~~

~~Phase 3 ELATIVE trial~~a renowned scientific journal

Positive results from our Phase 2 clinical trial of elafibranor in PBC ~~which~~formed the rationale to launch the ELATIVE® Phase 3 trial previously described. These results were announced in December 2018 and then presented in April 2019 at the International Liver Congress 2019 organized by EASL (European Association for the Study of the Liver), ~~formed the rationale to move the program into~~and then published in The Journal of Hepatology in 2021.

The Phase ~~3 and to launch the ELATIVE Phase 3~~2 clinical trial ~~for the evaluation~~ of elafibranor in ~~this indication.~~

ELATIVE is an international Phase 3 double-blind randomized placebo-controlled study with an open-label long-term extension (LTE) evaluating the efficacy and safety of 80 mg elafibranor once daily versus placebo in patients with PBC ~~and inadequate response or intolerance to UDCA. In the double-blind treatment period, patients will be randomized in~~was a ~~2:1 ratio to receive 80 mg elafibranor (n=100) or placebo (n=50) once daily.~~

~~After the variable double-blind treatment period (52 - 104 weeks), all patients will receive elafibranor at 80 mg per day for five years at most during the LTE.~~

The primary endpoint is the response to treatment at week 52 defined as defined by biochemical parameters: ALP < 1.67 x ULN and total bilirubin ≤ ULN and ALP decrease ≥ 15%. Secondary endpoints include response to treatment based on ALP normalization at week 52 and change from baseline in pruritus through week 52 on PBC Worst Itch NRS score.

Due to the COVID-19 pandemic, we announced in March 2020 a delay in the initiation of the ELATIVE trial. In September 2020, we announced the first patient first visit in the ELATIVE trial. Appropriate measures have been implemented, including virtual appointments, biological evaluations performed by local laboratories and delivery of the drug candidate to the patients’ homes, to ensure the safety of participants in the study. Enrollment is expected to be completed in the second quarter of 2022 ~~for the double-blind part of ELATIVE, which is to be used to support accelerated approval. We remain committee to delivering ELATIVE topline data in the second quarter of 2023.~~

Following publication of the interim Phase 3 topline results, Ipsen will lead the further clinical and commercial development of elafibranor in PBC. See below "Partnering with elafibranor - Strategic Collaboration with Ipsen" for additional information. In addition to the ELATIVE Phase 3 trial that will be used to support and seek regulatory approval under the accelerated approval pathway, led by Ipsen, the program will also include a confirmatory study based on hard clinical endpoints, which will be conducted by Ipsen and which is required in order to obtain full marketing approval.

~~Phase 2~~

~~In December 2018, we announced positive preliminary results, including achievement of the primary endpoint and the composite endpoint, from our Phase 2~~ multi-center, double-blind, randomized, placebo-controlled clinical trial ~~to evaluate~~evaluating the efficacy and safety of elafibranor after 12 weeks of treatment in patients with PBC and inadequate response to UDCA. The trial was conducted at multiple clinical centers in the United States and in three European countries and enrolled a total of 45 patients. The patients were randomized into one of three treatment arms, receiving either elafibranor 80 mg, elafibranor 120 mg or placebo.

The primary objective of the trial was to determine the effect of daily oral administration of elafibranor on ALP in these patients, based on relative change from baseline in serum ALP levels compared to placebo. In addition to assessing the tolerability and safety of elafibranor in patients with PBC, secondary endpoints included assessment of elafibranor 80 mg and 120 mg as compared to placebo on several outcome measures, including:

•composite endpoint composed of ALP and bilirubin, with response defined as (1) ALP less than 1.67 times the upper limit of normal, or ULN, (2) total bilirubin within normal limits and (3) a reduction of ALP of more than 15%;

•changes in patients’ risk scores as measured by several PBC risk scoring systems (Paris I and II, Toronto I and II and UK-PBC);

•change from baseline in pruritus, as measured by a 5-D itch scale and visual analogue scale; and

•change from baseline in quality of life, as measured by PBC-40, a patient-derived questionnaire.

~~In the preliminary results published in December 2018, we~~We observed that the mean ~~decrease~~changes from baseline in ALP in both of the elafibranor treatment groups showed statistically significant ~~improvement~~decreases compared to placebo. In the elafibranor 80 mg and 120 mg treatment groups mean decreases in ALP were 48% (n=15) and 41% (n=14), respectively, whereas the mean ALP increased by 3% (n=15) in the placebo group. When adjusted for placebo, the treatment effect of the elafibranor 80 mg and 120 mg treatment groups was a mean decrease in ALP of 52% (p<0.001) and 44% (p<0.001), respectively. Based on these results, elafibranor achieved the primary endpoint of the trial with high statistical significance.



			(1) Schattenberg et al. J. of Hepatol. 2021, Vol. 74, Issue 6:1344-1354;

Elafibranor also achieved high statistical significance on the composite endpoint of ALP and bilirubin, with response defined as (1) ALP less than 1.67 times the ULN, (2) total bilirubin within normal limits and (3) a reduction of ALP of more than 15%. The elafibranor 80 mg and 120 mg treatment groups achieved mean response rates of 67% (p=0.001) and 79% (p<0.001), respectively, as compared to 6.7% in the placebo group. This composite endpoint was the primary endpoint in the Phase 3 clinical trial of ~~Ocaliva™~~Ocaliva that led to its FDA marketing approval. In a three-month Phase 2 clinical trial of ~~Ocaliva™,~~Ocaliva, treatment with ~~Ocaliva™~~10 mg of Ocaliva resulted in a mean response rate of 23%, compared to a placebo response rate of 10%, on this composite endpoint.

Patients treated with elafibranor showed improvement in other PBC markers such as gamma-glutamyl transferase (γGT), markers of inflammation, and metabolic markers such as total cholesterol, low-density lipoprotein-C, and triglycerides. γGT level remained stable throughout the treatment period in placebo treated patients (+0.2±26%), while significant reductions were observed in both elafibranor-treated groups (at week-12: -37.1±25.5%; p<0.001 vs placebo with 80 mg and -40.0±24.1%; p<0.01 vs placebo with 120 mg). The γGT change over time was similar to the changes in ALP observed in the elafibranor-treated groups. Additionally, a reduction of 5’-nucleotidase at both doses of elafibranor vs placebo was observed at week 12. Finally, significant decreases in the elafibranor-treated groups relative to placebo patients were observed in IgM and inflammatory markers including C-reactive protein and haptoglobin. As expected, patients had features of PBC-related dyslipidemia, notably high HDL-cholesterol at baseline. As compared to placebo, elafibranor-treated groups showed decreases in total cholesterol, LDL-cholesterol and triglycerides. Finally, circulating levels of the bile acid precursor C4 were decreased in the elafibranor-treated groups, but not in the placebo group.

Elafibranor treatment did not induce or exacerbate pruritus. In contrast, a favorable trend was evidenced by a reduction of the virtual analogue scale or VAS score in patients that reported pruritus (VAS ≥0 mm) at baseline. A similar trend was observed in the pruritus domain of the PBC-40 QoL questionnaire with a median change from baseline of -25% and -21% in the 80 mg and 120 mg group, compared to placebo, which remained unchanged. This apparent improvement in pruritus is particularly impressive considering that it was observed in this trial of a duration of 3-months. Considering the burden that pruritus has on the quality of life in a significant proportion of patients with PBC, ~~it will be important~~we designed our ELATIVE® Phase 3 trial with several secondary endpoints designed to ~~confirm~~measure the ~~benefit~~potential benefits that elafibranor may have in ~~the phase 3 study, which will be of longer duration.~~alleviating this symptom.

Treatment with elafibranor was generally well tolerated, with a similar number of patients experiencing adverse events in the drug treatment and placebo arms of the trial, with the most common adverse events being of a gastrointestinal nature and of mild or moderate intensity, and included nausea, fatigue and headache. Two patients experienced serious adverse events, of which only one was considered as possibly drug-related. The latter patient suffered from two preexisting auto-immune diseases (PBC and myasthenia gravis) and during the trial presented with a third auto-immune disease (auto-immune hepatitis, or AIH). This diagnosis was made in a patient with poly-auto-immune diseases, and AIH consecutive to PBC or AIH-PBC overlap syndrome are not uncommon, occurring in up to 2.5% and 14% of PBC patients, respectively. While this factor and/or other concomitant medications could be considered as confounding factors, a causal relationship to study drug could not be excluded. The other patient experienced a serious adverse event or SAE deemed unrelated to treatment with elafibranor and withdrew from the trial after only one daily dose.

In April 2019, the FDA granted elafibranor Breakthrough Therapy Designation, based on the Phase 2 data, for treatment of PBC in adults with inadequate response to UDCA and in July 2019, both the FDA and EMA granted elafibranor Orphan Drug Designation in PBC.

–Phase 3 ELATIVE® trial: topline data announced in June 2023

On June 30, 2023 we and Ipsen announced positive 52-week interim topline data from the pivotal ELATIVE® Phase 3 trial. In November 2023, Ipsen provided additional details in a late breaking oral presentation during the American Association for the Study of Liver Diseases congress in Boston, Massachusetts, USA, and published detailed results in the New England Journal of Medicine.

The first part of the trial assessed the efficacy and safety of elafibranor, an investigational dual α,δ PPAR agonist, in the treatment of patients with the rare cholestatic liver disease, PBC, who have an inadequate response or intolerance to the current standard of care therapy, UDCA. Results position elafibranor as a potentially important new treatment option, where there is still high unmet need.

Results showed statistically significant improvements in biomarkers of disease progression across key endpoints with a significant treatment benefit achieved in the primary composite endpoint, demonstrating a 47% placebo-adjusted difference (P<0.001) between patients on elafibranor 80mg (51%) compared with patients on placebo (4%) achieving a biochemical response. In the trial, a biochemical response is defined as alkaline phosphatase (ALP) <1.67 x upper limit of normal (ULN), an ALP decrease ≥ 15 percent and total bilirubin (TB) ≤ ULN at 52 weeks. ALP and bilirubin are important predictors of PBC disease progression. Reductions in levels of both can indicate reduced cholestatic injury and improved liver function.

Only patients receiving elafibranor achieved normalization of ALP (upper limit of normal 104 U/L in females and 129 U/L in males) at Week 52 (15% vs 0% placebo, P=0.002), a key secondary endpoint of the trial. The significant biochemical effect of elafibranor measured by ALP reduction was further supported by data demonstrating reductions from baseline in ALP levels were rapid, seen as early as Week 4 in the elafibranor group, and were sustained through Week 52, with a decrease in ALP of 41% on elafibranor compared with placebo.

Additional details covered the effect of treatment with elafibranor on pruritus (severe itch) across three separate patient-reported outcome measures. On the key secondary endpoint using the PBC Worst Itch NRS score, the reduction of pruritus observed for elafibranor versus placebo was not statistically significant (LS mean, –1.93 versus –1.15; difference, –0.78; 95% CI, –1.99 to 0.42; P=0.20). Two other secondary patient-reported outcome measures were used to assess itch, and greater reductions in pruritus were observed with elafibranor compared with placebo at Week 52, according to the itch domain of PBC-40 quality of life questionnaire (LS mean difference -2.3; 95% CI, -4.0 to -0.7) and 5-D Itch total score (LS mean difference, -3.0; 95% CI, -5.5 to -0.5).

In the study, elafibranor was generally well tolerated with a safety profile consistent with that observed in previously reported studies.

Ipsen will assume responsibility for all additional clinical development, including completion of the long-term extension period of the ELATIVE® trial, and global commercialization (outside of Greater China, where elafibranor is licensed to Terns).

On December 7, 2023, Ipsen confirmed U.S. FDA granted priority review for New Drug Application for elafibranor for the treatment of PBC, with a PDUFA date set for June 10, 2024. The European Medicines Agency (EMA) has also validated Ipsen’s Marketing Authorization Application (MAA) for elafibranor and the review of the submission to the EMA’s Committee for Medicinal Products for Human Use (CHMP) began on October 26, 2023. Furthermore, a third simultaneous regulatory filing of elafibranor has been validated for review by the UK Medicines and Healthcare products Regulatory Agency (MHRA).

–Next milestones

Acceptance of filings in the US and Europe have triggered the first milestone payment for GENFIT in December 2023. In case of favorable decision by the authorities, we would receive additional milestone payments after US and European commercial launches by Ipsen, and royalties on the sales of elafibranor by Ipsen. For more information about the financial terms of the agreement, including the milestone payment received in 2023, see Note 2.1.1 - "Major Events in the Period and Events aft er the Period - Positive Results from Phase 3 ELATIVE® trial " to our consolidated financial statements included in this annual report.

2. Our therapeutic franchise in ACLF

GENFIT’s ACLF franchise is now comprised of five assets (VS-01-ACLF, NTZ, SRT-015, CLM-022, VS-02-HE) based on differentiated mechanisms of action leveraging complementary pathways.

•About ACLF

ACLF is a rare, life-threatening, but potentially reversible condition of varied etiology. ACLF is a syndrome, globally defined by multi-organ dysfunction and failure in patients with chronic liver disease or liver cirrhosis and high short-term mortality within a period of 28 to 90 days. Today, hepatologists recognize ACLF to be a medical entity as a whole.

Patients with cirrhosis may initially be compensated. With progression, many patients will go on to have acute decompensation of cirrhosis characterized by the rapid development of complications such as ascites, HE, gastrointestinal hemorrhage, or bacterial infection, which are very common causes of hospitalization. On admission, approximately 30% of these patients will have or develop liver and/or other organ failure(s) (i.e, brain, kidneys, cardiovascular and respiratory) and will be considered as having ACLF.

ACLF is an underserved medical condition associated with high short-term mortality (23% to 74% mortality at 28 days, depending on severity grade). Currently, no drugs have been approved in ACLF. In 2021, the prevalence of ACLF is estimated to be approximately 294 thousand across the U.S., EU4 (France, Germany, Italy, and Spain) and UK. This market is expected to grow to approximately 300 thousand patients by 2036 due to an aging population and a higher prevalence of non-alcoholic fatty liver disease (MAFLD)/MASH, diabetes, obesity, alcohol consumption and drug induced liver injuries.

Rising alcohol consumption has already impacted China, the United States, and Denmark, all of which have documented a doubling in alcoholic liver disease hospitalizations over a 10-year period.

In the U.S., there are over 600,000 hospitalizations per year for decompensated cirrhosis. With a 10-30% ACLF prevalence in this population the annual number of ACLF hospitalizations in the U.S. is estimated to be between 60,000 and 180,000. In the five major European countries, there are about 800,000 hospitalizations for decompensated cirrhosis. With a 20-30% prevalence in this population, the annual number of ACLF hospitalization is estimated to be between 160,000 and 240,000.

Cirrhosis and ACLF represent a substantial health and economic burden. For example, in the United States in 2011, the total inpatient costs for cirrhosis with and without ACLF was estimated to be more than $10 billion. In the same study, the cost per hospitalization was 3.5-fold higher for patients with ACLF than for patients with cirrhosis who did not have ACLF.

Such high hospitalization costs for critically ill patients with ACLF as compared to patients with cirrhosis without ACLF can be easily explained by higher rates of hospitalization in the ICU and, most importantly, by 2-3-fold longer hospital stays: average of 16 days for patients with ACLF versus 7 days for patients with cirrhosis who did not have ACLF. Complications are the key drivers impacting the length of patient's hospital stays with renal and infectious complications being associated with the longest hospital stays.

–A high unmet medical need

There are no approved therapies currently available for patients with ACLF other than treatment of precipitating events, when identified, and organ failure support (e.g., renal replacement therapy in the case of kidney failure). The only definitive treatment option is liver transplantation. Due to the emergency setting, limited access to compatible liver donors and, in some cases, no accessible liver transplant capabilities, approximately 15-30% of patients die while awaiting liver transplant.

Patients with acute decompensated cirrhosis are generally hospitalized in the regular hepatology ward. Within one week, patients may progress to ACLF and are usually transferred to an intensive care unit where organ support and general care can most effectively be provided. Despite intense efforts to improve the standard of care, the current high short-term mortality rate highlights the critical medical need of new therapies to help patients to rapidly recover and survive an ACLF episode without liver transplantation or bridge them to liver transplant, when appropriate.

The mean survival time in patients with ACLF is 3-5 years. In a study of 1,343 hospitalized patients with cirrhosis and acute decompensation, 303 had ACLF when the study began, 112 developed ACLF, and 928 did not have ACLF. The 28-day mortality rate among patients who had ACLF when the study began was 33.9%, among those who developed ACLF was 29.7%, and among those who did not have ACLF was 1.9%. In general, a greater number of organ failures is associated with higher short-term mortality. For example, the 28-day mortality rate for patients having 3 or more organ failures approaches 80%.

–Bedside management of ACLF patient hospitalized in Intensive Care Unit


			Bernal W. et al, J Hepatol 2021

•Our first program: VS-01-ACLF for enhancing the systemic elimination of ammonia and other ACLF-related metabolites

–Rationale and mechanism of action

VS-01-ACLF is an innovative, potential first-in-class investigational drug candidate based on a proprietary scavenging liposomal technology. It is administered directly into the peritoneal (abdominal) cavity following drainage (paracentesis) of ascites, one of the most common complications in patients with ACLF. VS-01-ACLF was granted the Orphan Drug Designation in ACLF by the FDA.

In the setting of ACLF, toxic metabolites build up in the bloodstream due to organ failures. VS-01-ACLF is designed to enhance the clearance of ACLF-related metabolites by extracting them from the blood into the peritoneal cavity by passive diffusion. Toxic metabolites, either captured by the liposomes or in the surrounding fluid, are then drained from the body.

VS-01-ACLF is in clinical development as a potential first-line therapy for the timely resolution of ACLF. The identification of the toxic metabolites extracted by VS-01 and associated clinical outcomes are being further investigated in the ongoing proof of concept Phase 2a study. Preclinical and clinical pharmacodynamic and metabolomic studies have shown that VS-01-ACLF could be the first drug to use the intraperitoneal route to:

•Simultaneously support the liver, kidney and brain, the organs that most often fail in patients with cirrhosis, ACLF, and ascites; and

•Reduce inflammation, which is a key driver of ACLF.

More specifically, VS-01-ACLF liposomes are designed to trap bacterial endotoxins and mediators of inflammation as well as ammonia, one of the main toxins associated with Hepatic Encephalopathy and brain failure. Overall, we believe VS-01-ACLF will enhance the clearance of hepatic and uremic toxins to support liver, kidney and brain function.

Thus, VS-01-ACLF may be well suited as a treatment for patients with ACLF, with the potential to improve survival, to increase the probability of success for liver transplant in selected patients, and to reduce healthcare costs.

–Evidence supporting further development

◦Non-clinical evidence

Non-clinical studies evaluated the efficacy of VS-01-ACLF in small and large animal models. VS-01-ACLF was shown to extract kidney and liver toxins (185 extracted metabolites, including ACLF-related metabolites and uremic toxins) as well as inflammation mediators (28 lipophilic compounds identified including fatty acids and bile acids). Moreover, VS-01-ACLF efficiently captured ammonia. In healthy rats, VS-01-ACLF was shown to remove 20 times more ammonia than a control solution without liposomes. The extraction of ammonia in the peritoneal space led to a decrease in ammonemia in rats and pigs and to a decrease in brain edema in a model of bile duct ligated rats.

In rats, VS-01-ACLF was shown to be safe and well tolerated during a prolonged intraperitoneal dwell time (>4h) and during single and multiple doses.

Based on safety pharmacology studies and a GLP repeated dose toxicity study in minipigs receiving a daily session for 10 days, VS-01-ACLF was found to be safe and well tolerated. No immune reactions were observed in pigs which are known to be highly sensitive to colloidal formulation and prone to the so-called complement activation-related pseudoallergy (CARPA) reaction following single and daily administration for 10 days.

◦Clinical evidence

A Phase 1b first-in-human (FIH) open-label study has been completed in 12 patients with cirrhosis, ascites, and covert Hepatic Encephalopathy. As a primary objective, the study assessed the safety and tolerability of VS-01-ACLF following intraperitoneal administrations of single-ascending doses and multiple doses on top of standard of care (SOC). VS-01-ACLF pharmacokinetics and efficacy profile were assessed as secondary objectives. VS-01-ACLF was generally well tolerated. Importantly, >80% of patients demonstrated improvement or stabilization of the severity of their liver disease (as assessed by Child-Pugh score). There was a trend towards dose related increases in the clearance of ammonia removed from the peritoneal cavity as well as improvement in cognitive assessments used in the evaluation of patients with Hepatic Encephalopathy. Taken together, the benefit risk profile of VS-01-ACLF is supportive of ongoing clinical investigation in patients with ACLF having ascites. The main outcomes of the Phase 1b FIH study were presented at the AASLD 2021.

Effect of VS-01-ACLF on metabolites reduction presented at EASL 2022 (2 abstracts):

•Abstract 1 (metabolites associated with organ failure)

•Abstract 2 (metabolites associated with bacterial infection

–Next milestones

An international Phase 2a, open-label, randomized, controlled, multi-center, proof of concept study (UNVEIL-IT®) is ongoing and aims to assess the efficacy, safety and tolerability of VS-01 in addition to standard of care (SOC), compared to SOC alone, in approximately 60 adult patients with ACLF grades 1 and 2 and ascites.

The primary objective is to evaluate efficacy as measured by the CLIF-C ACLF (Chronic Liver Failure Consortium Acute on Chronic Liver Failure score) at Day 7, which is highly correlated with mortality in patients with ACLF. Secondary objectives include 90-day mortality, 28-day mortality, time to death, change in ACLF grade, transplant-free survival, and safety and tolerability.

Interim data from the UNVEIL-IT® trial are targeted for the second half of 2024.

•Our second program: nitazoxanide (NTZ)

–Rationale and mechanism of action

The identification of NTZ is the result of our research program initially designed to discover novel anti-fibrotic molecules with a priority given to liver fibrosis.

During further research we have also discovered that NTZ and its circulating metabolite, tizoxanide (TZ), have additional anti-inflammatory effects through the inhibition of inflammatory cell activation. In our preclinical research, the apparent beneficial effects we have observed with NTZ may be explained in part by the anti-bacterial properties of NTZ (acting on intestinal microbiota dysbiosis/overgrowth and improving the intestinal barrier), and direct dose-dependent anti-inflammatory effects on immune cells (macrophages).

–Evidence supporting further development

~~Partnering~~

◦Preclinical evidence

As part of our preclinical program, we have studied NTZ in cell and animal disease models.

NTZ and TZ, its active circulating metabolite, have a wide anti-infectious spectrum acting on bacteria, viruses and parasites commonly encountered in human intestinal flora. Thus, an oral treatment with ~~elafibranor~~NTZ is expected to improve bacteria overgrowth and dysbiosis and possibly preserve the intestinal barrier in patients with ACLF. We also observed that, in cultured human liver cells, TZ inhibits a key pathway of programmed cell death (apoptosis) in a dose dependent manner.

•NTZ reduces LPS-induced inflammation in healthy rats: our research has demonstrated that an oral administration of NTZ concomitant with intraperitoneal injection of LPS significantly reduced the LPS-induced rise in circulating cytokines and inflammatory markers;

•NTZ showed beneficial effects on liver function markers (bilirubin, albumin) in two distinct rat models of ACLF (cirrhotic rats given LPS), we found that NTZ has hepatoprotective effects by reducing ALT and AST while totally preventing LPS-induced rise in GGT and total bilirubin, as well as two markers in renal function in plasma (cystatin C and creatinine);

•NTZ reduced brain edema in a model of ACLF (rats with bile duct ligation);

•NTZ reduced inflammation markers in a model of ACLF (rats with bile duct ligation); and

•NTZ improved survival in treatment models of Sepsis (cecal ligation puncture, or CLP): the mortality rates in NTZ treated vs vehicle treated group were 53% vs 90% at 72 hours and 67% vs 100% 5 days after CLP surgery.

◦Clinical evidence

Two Phase 1 studies were conducted to evaluate the safety and pharmacokinetics of NTZ metabolites in the setting of hepatic impairment or renal impairment. These studies were completed in the fourth quarter of 2022 and the first quarter of 2023, respectively, and are supportive of future investigation in patients with ACLF. The data for the hepatic impairment study were presented in a poster presentation during Digestive Disease Week® (DDW) 2023, taking place May 6-9, 2023, at McCormick Place in Chicago, IL, and online.

–Next milestones

A new formulation of NTZ is currently under development to permit greater dosing flexibility and to optimize dose-response in patients with ACLF, who are known to have varying degrees of organ impairment or failure. The new formulation will also permit the optimization of the benefit/risk profile in this patient population.

The reformulation and Phase 2 is under preparation in 2024 with a proof-of-concept study initiation targeted for the first half of 2025.

•Our third program SRT-015 (injectable formulation): an ASK1 inhibitor with multi-system benefits

–Rationale and mechanism of action

SRT-015 is an ASK1 inhibitor in-licensed from Seal Rock Therapeutics in acute liver diseases. It targets the inhibition of cellular apoptosis, inflammation and fibrosis.

ASK1 triggers the activation of several pathways, most notably two key ones: the p38 MAPK pathway and the JNK pathway. This activation contributes to increased inflammation, cell death and fibrosis.

ASK1 inhibition has shown several potentially beneficial effects that may be relevant in ACLF, such as blocking LPS (lipopolysaccharide) associated hyperinflammatory response, reducing the ROS (Reactive Oxygen Species)-related immune response, reducing apoptosis, reducing release of the proinflammatory cytokines, reducing fibrosis, and protecting macrophage mitochondrial function.

–Evidence supporting further development

Preclinical and clinical evidence support ASK1 inhibition as a relevant therapeutic strategy in multi-system disorders such as Acute-on-Chronic Liver Failure (ACLF). Multi-organ activities of ASK1 inhibitors have been observed in several animal models and clinical trials. SRT-015 alleviates hepatic injury in a model of drug-induced liver injury, in association with reduction of phosphorylation of both JNK and ASK1. In addition, SRT-015 alleviates hepatic injury in a model of alcoholic hepatitis.

–Next Milestones

A First-in-Human study with an intravenous formulation of SRT-015 is planned in the first quarter of 2025.

•Our fourth program CLM-022: a potential first-in-class NLRP3 inflammasome inhibitor

–Rationale and mechanism of action

CLM-022 is a small molecule inhibitor targeting the NLRP3 inflammasome. This pathway is particularly relevant to ACLF (Acute-on-Chronic Liver Failure). The significance of this pathway is underscored by several studies, including one which observed a key difference in NLRP3 inflammasome activity between patients with chronic HBV infection alone and those with both HBV infection and ACLF. Thus, inhibiting the NLRP3 pathway is a promising strategy for treating ACLF.

Activation of the NLRP3 pathway leads to proinflammatory cell death, known as pyroptosis, and also initiates the synthesis and maturation of pro-inflammatory cytokines, particularly IL-1β and IL-18.

–Evidence supporting further development

Primarily in animal models of liver injury and inflammation studies have shown promise for NLRP3 inflammasome inhibitors in reducing liver damage and inflammation.

It was shown to:

• Block the production of inflammatory cytokines in a LPS-induced endotoxemia model;

• Block ASC speck formation at nanomolar concentrations;

• Decreases IL-1β secretion by macrophages stimulated with LPS and nigericin; and

• Protect against nigericin-induced pyroptosis in LPS-primed macrophages.

–Next Milestones

Preclinical Proof of Concept is expected to be obtained by end-2024.

•Our fifth program VS-02-HE: a urease inhibitor

VS-02-HE is being developed in HE, one of the major complications of advanced liver disease and portal hypertension.

–About HE

HE is a central nervous system disorder representing a diverse spectrum of neurologic symptoms (sleep-wake cycle disturbance, fatigue, concentration difficulty, personality changes, tremor, cognitive deficits, and, in severe cases, coma), and typically occurs in patients with advanced chronic liver disease or porto-systemic shunting. In chronic liver disease, toxins, including ammonia, accumulate in the systemic circulation and can cross the blood-brain barrier. Excess ammonia induces accumulation of glutamine in astrocytes causing osmotic stress and alteration of cell metabolism and can result in brain edema or swelling. As many as 45% of patients with cirrhosis will experience at least one episode of HE. In the U.S. only, two million patients are believed to be at risk of developing HE and 200,000 patients are hospitalized yearly. In Europe, incidence is close to one million patients. Patients with ACLF and HE have higher mortality rates compared to patients who have ACLF only. The prevalence of overt HE at the time of cirrhosis diagnosis is approximately 10–14%. The estimated annual economic burden associated with HE in the US was $7.2 billion in 2009 and around $12 billion in 2014.

–A high unmet medical need

HE is largely underdiagnosed and undertreated and is associated with poor quality of life. Due to its neurotoxic effect, ammonia has been the main target for HE therapy. Current treatment options for HE focus on either reducing ammonia production and absorption (e.g., non-absorbable disaccharides) or on promoting its elimination by eliminating ammonia-producing colonic bacteria (e.g., antibiotics). Non-absorbable disaccharides such as lactulose, however, exhibit various limitations such as persistent side effects leading to poor compliance which indirectly affects overall efficacy. Additionally, antibiotics (e.g., rifaximin), according to the approved label for rifaximin as of the date of this annual report, are limited to the reduction of overt HE recurrence rather to the treatment of overt HE.

•VS-02-HE : Our Program to Reduce Hyperammonemia and Stabilize Ammonia Levels in the Blood

–Rationale and mechanism of action

VS-02-HE is a urease inhibitor designed to inhibit ureases by binding to nickel atoms in their active site. As urease-producing bacteria in the gut are one of the main sources of circulating ammonia in humans, urease-inhibitors may represent a promising therapeutic approach for HE.

We are developing VS-02, a urease inhibitor currently in preclinical stage. VS-02 is a hydroxamic acid (HA) derivative, which is designed to inhibit ureases by binding to nickel atoms in their active site. Inspired by earlier studies, the in vitro activity of a series of novel hydroxamic acid (HA) derivatives was investigated on rat caecum content. The lead candidate, VS-02, showed a potency largely exceeding that of HA derivatives tested in former clinical trials. It was further found that VS-02 was neither cytotoxic nor mutagenic at up to 1 mM, which makes it an ideal candidate for development as a novel treatment for HE via a colonic formulation.

–Evidence supporting further development

In vivo efficacy studies showed that VS-02-HE (30 mg/kg) was able to reduce ammonia blood levels in bile-duct ligated (BDL) rats. Additionally, in vivo 1H MRS measurements performed at 9.4T in the cerebellum (SPECIAL sequence, TE=2.8ms, VOI=2.5x2.5x2.5mm3) showed a significant decrease in brain glutamine levels after 5 days of treatment compared to non-treated BDL rats confirming the therapeutic effects of VS-02-HE. In summary, we believe VS-02-HE represents a promising oral candidate for further evaluation in the treatment of HE.

–Next milestones

We intend to develop VS-02-HE as a unique oral formulation designed to act where ammonia is primarily produced, minimizing systemic absorption of ammonia while reducing glutamine levels in the brain. The treatment goal is to reduce/stabilize the accumulation of ammonia in the blood and prevent rehospitalization.

Investigational New Drug-enabling nonclinical studies starting in 2024 with completion expected in 2025.

3. Other life-threatening diseases franchise

•GNS561 in Cholangiocarcinoma (CCA)

•About Cholangiocarcinoma

Biliary tract cancer (BTC) is the second most common primary liver malignancy diagnosed globally. Cholangiocarcinoma (CCA) is a type of BTC and represents approximately 15% of all primary liver tumors and 3% of gastrointestinal cancers.



			Adapted from Nature Reviews Gastroenterology & Hepatology volume 17, p. 557–588

CCA is comprised of a heterogeneous group of cancers with pathologic features of biliary tract differentiation and is presumed to arise from the intra- or extrahepatic biliary tract. Gallbladder cancer is distinct from Cholangiocarcinoma in epidemiology, pathophysiology, clinical presentation, and management and is considered as a different type of biliary tract cancer. Based on its anatomical origin, CCA is best classified anatomically as intrahepatic (iCCA) or extrahepatic (eCCA), which is comprised of perihilar (pCCA) and distal (dCCA) CCA. The incidence of iCCA appears to be increasing and may be as high as 2.1 per 100,000 person years in Western countries.

CCA may occur in normal livers or in the setting of underlying liver disease, and in these cases, it appears as a mixed type hepatocellular-cholangiocarcinoma instead of traditional adenocarcinoma. Several risk factors of chronic inflammatory damage and increased cellular turnover have been established, such as hepatobiliary flukes (Opistorchis viverrini and Clonorchis sinensis), primary sclerosing cholangitis, biliary tract cysts, hepatolithiasis and toxins. Cirrhosis, chronic hepatitis B and C, obesity, diabetes mellitus and alcohol-related liver disease are also emerging as risk factors for CCA.

The clinical presentation of CCA is non-specific and most often insufficient to establish a diagnosis. Early diagnosis is a major challenge as most patients with early-stage disease do not have symptoms due to limited biliary obstruction. Rather, patients characteristically manifest symptoms related to their underlying cirrhosis, a condition present in some patients with CCA.

Taken together, the majority of patients with CCA are diagnosed with advanced disease, often precluding potentially curative therapies. Once symptomatic, CCA is often associated with non-specific complaints, including right upper abdominal or epigastric pain or discomfort, jaundice, weight loss, malaise, hepatomegaly or a palpable abdominal mass. The onset of ascites, encephalopathy, jaundice or variceal bleeding in patients with previously compensated cirrhosis also increases the clinical suspicion for liver tumor. Tumor-related fever may rarely occur, although night sweats are common in advanced disease. CCA should be considered in patients with underlying hepatolithiasis or primary sclerosing cholangitis (PSC) with worsening performance status, unexplained loss of weight or failure to thrive.

–A high unmet medical need

There are limited therapeutic options for this aggressive disease. The 5-year survival rates drop to 5-15% in the advanced and unresectable settings. The only potentially curative treatment remains surgical resection. Unfortunately, at time of first diagnosis, only about 25% of the patients are eligible for surgery. Moreover, even after curative intent surgery, the clinical outcomes are disappointing, with 5-year survival rates of 7% to 20%. The role of adjuvant therapies, including systemic chemotherapy and radiotherapy, remains poorly defined yielding only a modest survival benefit. Around 60% to 70% of patients are diagnosed with advanced disease, which is defined as unresectable or metastatic disease. For these patients, palliative treatment with systemic chemotherapy is the only treatment option. Patients progressing on first line chemotherapy often have a rapidly worsening performance status, and only a small number of patients may be suitable for further treatment. The estimated median survival for these patients is 3.7 months.

In the advanced setting, the standard of care for first line therapy is a combination of gemcitabine and platinum-based chemotherapy; other gemcitabine- or fluoropyrimidines-based regimens are also commonly used. At time of relapse, patients whose tumor displays fibroblast growth factor receptor 2 (FGFR2) or isocitrate dehydrogenase 1 (IDH-1) alterations may receive approved therapies that target these specific alterations. All other patients are offered second line chemotherapy. The most efficacious regimen is currently a combination of cytotoxics (folic acid, 5-FU/fluorouracil, and liposomal irinotecan (FOLFIRI)) yielding a median overall survival of 8.6 months.

•Our Program: GNS561

To address the significant unmet need in patients diagnosed with CCA, GENFIT is developing GNS561 to prolong the overall survival of patients who present with iCCA and eCCA. GNS561 is a Palmitoyl Protein Thioesterase-1 (PPT-1) inhibitor that blocks autophagy, which GENFIT in-licensed in 2021 from Genoscience (See Item 4.B - "In formation o n the Company -Out-licensing partnerships").

–GNS561: rationale and mechanism of action

Autophagy is activated in tumor cells as a survival mechanism in a nutrient poor environment, due to tumor cell growth in advanced cancers. One of the key cellular organelles implicated in the autophagy process is the lysosome. By decreasing the activity of PPT1 in lysosomes, GNS561 may have an important inhibiting activity on late-stage autophagy, which leads to tumor cell death.

–Evidence supporting development

Lysosomal function is an essential element in autophagy, and GNS561 is a lysosomotropic small molecule which inhibits PPT1, a lysosomal enzyme required to maintain lysosome-autophagy function. PPT1 expression is high in most cancer cell lines, increased in tumors compared with paired normal tissue, and in metastases versus primary tumors, and high levels of PPT1 have been associated with shorter overall survival. Thus, these findings, along with the role of PPT1 in maintaining lysosome-autophagy function, establishes the potential of PPT1 inhibition as a strategy in cancer therapy. In addition to its inhibition of PPT1, studies with GNS561 showed that it has high liver tropism when administered orally, significantly reduced cell viability in human iCCA cell lines and induced apoptosis. GNS561-mediated cell death was correlated with inhibition of late-stage autophagy and induction of a dose-dependent build-up of dysfunctional lysosomes. GNS561 was also efficient in vivo against a human intrahepatic CCA cell line in a chicken chorioallantoic membrane xenograft model, with a good tolerance at doses high enough to induce an antitumor effect in this model.

In a first-in-human Phase 1 study in patients with advanced primary (HCC and iCCA) and secondary liver cancer (metastasis from distant carcinomas), GNS561 was observed to have good tolerability, exposure, and preliminary signal of activity. Taken together, the results generated with GNS561 highlight its potential to provide benefit in prolonging survival of patients diagnosed with CCA. In particular, we believe that GNS561, as an inhibitor of autophagy, could potentially be beneficial in combination therapy, including combinations with inhibitors of the MAP kinase pathway or immunotherapy/checkpoint inhibitors.

Cytotoxic chemotherapy drugs as well as multiple targeted therapies such as kinase inhibitors have been proposed to induce autophagy as a survival mechanism in cancer cells. In 2019, the results of two major studies showed that, in the context of a cancer with the KRAS mutation (active RAS leading to activation of the MAP kinase pathway), inhibitors of the MAP kinase pathway can induce autophagy in pancreatic cancer, and combinations of MAP kinase pathway inhibitors with autophagy inhibition can enhance tumor cell killing. Importantly, a significant proportion of CCA patients have mutations including KRAS. Therefore, the combination of therapies targeting the MAP kinase pathway with GNS561 to inhibit autophagy is a potential therapeutic strategy to treat CCA patients.

–Next milestones

GNS561 received orphan drug designation for CCA from the FDA in September 2022. Given the high unmet need in this indication and the Orphan Drug Designation obtained from the FDA for GNS561, we believe that the program should qualify for some of the expedited regulatory pathways provided by health authorities.

The GNS561 Phase 1b/2a clinical trial.is currently ongoing. Phase 1b/2a clinical trial is currently ongoing. In Phase 1b of this study, patients with advanced KRAS mutated CCA, who have previously failed a standard of care first line therapy,, will be enrolled to evaluate the safety and tolerability of GNS561 when given in combination with trametinib, a MEK inhibitor, and to identify the recommended doses of the combination to be administered in Phase 2a. In Phase 2a, the safety and efficacy of the combination will be assessed in patients with advanced KRAS mutated CCA who have otherwise failed standard-of-care for first line therapy and who do not have an actionable mutation. Preliminary data from Phase 1b is targeted by the end of 2024.

•VS-01-HAC in Urea Cycle Disorders (UCD) and Organic Acidemias (OA)

•About Hyperammonemic Crisis (HAC) in UCDs and OAs

Hyperammonemia is defined as plasma ammonia levels above 80 µmol/L in newborns up to 1 month of age and above 55 µmol/L in older children. In the mammalian organism, the hepatic urea cycle is the main pathway to detoxify ammonia. Hyperammonemic crisis occurs whenever the load of waste nitrogen exceeds the detoxification capacity. Plasma ammonia levels in HAC can reach up to 1000 µmol/L.

Inborn errors of metabolism causing HAC comprise a group of hereditary disorders in which a single gene defect results in a clinically significant block of the urea cycle responsible for the metabolic clearance of ammonia from the bloodstream. The accumulation of ammonia, which is continuously produced by the breakdown of protein and other nitrogen-containing molecules, rapidly leads to cerebral edema and the related signs of lethargy, anorexia, hyperventilation or hypoventilation, hypothermia, seizures, neurologic posturing, and coma.



			Adapted from Rupesh Raina et al., Nature 2020

Hyperammonemia in Inborn Errors of Metabolism (IEM) is classified as follows:

•Primary hyperammonemia, when the urea cycle is directly affected by a defect of any of the involved enzymes or transporters, defining UCDs; and

•Secondary hyperammonemia, when enzymes of the urea cycle are inhibited due to accumulating metabolites or substrate deficiencies. The most relevant group of disorders associated with secondary hyperammonemia is called Organic Acidemias, or OAs.

Regardless of the underlying genetic disorder, the clinical characteristics, outcome, prognosis and treatment of HACs associated with IEM are similar.

Patients are usually diagnosed shortly after birth via universal newborn screening tests. The clinical presentation of patients with HAC caused by IEM may start as early as the first days of life and as late as adulthood. The most severe cases present in the first week after birth with unspecific symptoms like feeding refusal and vomiting, loss of thermoregulation, neurologic posturing, seizures, hyperventilation and then hypoventilation, and irritability that progress rapidly to somnolence, lethargy, coma, multi-organ failure and death.

While these conditions are ultra-rare with 1,900 acute hyperammonemic crisis in the U.S. and the five major European countries per year, the mortality rate is as high as 75%. Most patients will die after 5 years, and survivors will often have severe brain injuries. Patients with HAC associated to IEM must be transferred to specialized tertiary centers to be treated which increases the costs on the healthcare system.

–A high unmet medical need

The treatment of hyperammonemic crisis typically involves prompt management of the elevated ammonia levels in the blood. This may involve hospitalization, administration of medications such as sodium benzoate and phenylacetate, and intravenous fluids to help remove excess ammonia from the bloodstream. In severe cases, hemodialysis may be necessary to help remove ammonia from the blood. In centers where hemodialysis is not available, hemofiltration or other forms of dialysis should be used.

In practice, pediatric patients presenting HAC must be transferred in highly specialized tertiary centers having devices adapted to their size. Consequently, dialysis in IEM HAC is often initiated late when ammonia levels are above 1000 µmol /L and this may contribute to poor outcomes. Moreover, neonatal hemodialysis is risky, highly invasive and widely unavailable. As many as 45% of UCD patients remain untreated, and no drug is currently approved for treatment of OA.

•Our Program: VS-01-HAC for Ammonia Clearance and Prevention of HAC

–VS-01-HAC: rationale and mechanism of action

We are developing VS-01-HAC, a potential first-line lifesaving treatment for acute hyperammonemic crisis associated with IEMs.

To reduce high mortality and morbidity associated with HAC in IEMs, early diagnosis and immediate start of treatment are thought to improve the prognosis. Indeed, coma duration and levels of ammonia blood concentration are the main factors for determining mortality and neurologic outcome.

Therefore, a new drug using the peritoneal route with optimized ammonia clearance and a quick implementations time, would allow for the initiation of efficient dialysis immediately after HAC is confirmed and could help in overcoming the crises. Moreover, as the peritoneal route of administration is well adapted to pediatric patients, this treatment could be safely feasible in the hospital setting. Speed of implementation and safety represent tremendous improvements over neonatal hemodialysis, which is only possible in specialized centers and is a long and risky procedure in pediatric patients.

Use of a new treatment before transferring the patient to a tertiary center would save costs to the healthcare system as well as reduce burden on pediatric patients and their parents.

In addition to Orphan Drug Designation for the treatment of hyperammonemia in inborn errors of metabolism, Rare Pediatric Disease Designation (RPDD) has been granted to VS-01-HAC by the FDA for treatment of Urea Cycle Disorders (UCD) indication. GENFIT is potentially eligible to receive a Priority Review Voucher upon approval of an NDA by the FDA.

–Evidence supporting further development

An in vivo feasibility study was performed with OTC-deficient mice (homozygous females (Otcspf-ash/spf-ash) and hemizygous males (Otcspf-ash/Y)), a gold standard model which develops hyperammonemia and presents many characteristics of the human disorder. The results showed that ammonia extracted from blood into the peritoneal cavity was significantly (p < 0.0006) higher following single intraperitoneal injection of VS-01 compared to the control solution at all timepoints during the dwell time and led to a significant decrease in blood ammonia.

Our non-clinical and first-in-human clinical data showed that ammonia clearance in the peritoneal fluid increased proportionally with the volume of fluid infused and ranged between 5 and 95 mL/min following treatment with 0.3 L and 3 L VS-01, respectively. These values are in the same range as those reported in UCD patients treated with different extra corporal dialysis modalities.

–Next milestones

Following completion of the non-clinical feasibility study, we plan to develop formulation optimization for specific pediatric implementation and conduct IND-enabling nonclinical studies with a target to complete such studies in 2024.

4. Our diagnostics franchise

–NIS2+®, a next-generation technology derived from NIS4® for the identification of patients with at-risk NASH/MASH

•About NASH/MASH

At EASL Congress in June 2023 it was announced that nonalcoholic steatohepatitis (NASH) would now be referred to as Metabolic dysfunction-Associated Steatohepatitis (MASH). Nonalcoholic fatty liver disease (NAFLD) will now be referred to as metabolic dysfunction-associated steatotic liver disease (MASLD).

MASH, the most severe form of metabolic dysfunction-associated steatotic liver disease (MASLD) is characterized by the presence of hepatocyte ballooning and inflammation, in addition to steatosis. MASH can progress silently towards cirrhosis, precluding the opportunity for clinicians to diagnose and intervene therapeutically prior to the development of severe liver complications, and constitutes a growing cause of cirrhosis, liver failure, and liver cancer globally. Furthermore, MASH is projected to become the leading cause of liver transplantation in the United States—it already is the primary cause among women and the secondary cause overall. Given this clinical scenario, there is a pressing need to identify patients at higher risk of disease progression, who could be considered for therapeutic intervention with existing options or when potentially promising agents currently in late-stage clinical development obtain regulatory approval.

•Today’s Challenges in Diagnosing MASH

Liver biopsy is the reference standard for the diagnosis of MASH among patients with clinical risk factors for this disease, such as metabolic disorders in the absence of alternative causes for steatosis. The implementation of this diagnostic approach, however, is limited in routine clinical practice by its invasive procedure, cost, attendant risks, variability in interpretation, and the restricted number of professionals able to perform and interpret the test, among other factors. These limitations preclude liver biopsies from being broadly used as the primary diagnostic in such a prevalent disease. Providing a non-invasive alternative to liver biopsy will therefore be critical to facilitate improved patient diagnosis, management, and future treatment access in routine clinical practice, and may eventually reduce the morbidity and mortality associated with this disease.

At the end of 2022, Madrigal Pharmaceuticals announced positive data in its pivotal Phase 3 MAESTRO-NASH clinical trial of resmetirom for the treatment of MASH and liver fibrosis. On March 14, 2024, Madrigal Pharmaceuticals announced FDA approval of Rezdiffra™ (resmetirom) in conjunction with diet and exercise for the treatment of adults with noncirrhotic NASH with moderate to advanced liver fibrosis. Rezdiffra™ is thus the first-ever approved drug for the treatment of MASH, which should increase the focus on diagnosis over the coming years.

The treatment of MASH is a pressing public health challenge and there is a large unmet need for a widely available, non-invasive test, or NIT, to identify patients with at-risk MASH as an alternative to liver biopsy. The availability of such a test would help address the under diagnosis of MASH by supporting physicians in identifying patients with at-risk MASH, who are at higher risk for clinical outcomes and would be eligible for therapeutic intervention.

•Our Program: NIS Technology Comprising Our Proprietary Biomarker Algorithms

As part of our strategy to address unmet needs in MASH, we have an advanced diagnostic program based on the identification of specific biomarkers that are expressed at different levels in patients with MASH and significant fibrosis (F≥2) as compared to patients with less severe disease. This discovery kicked off a multi-year effort that has resulted in the development of NIS4® technology, a blood-based molecular technology for the identification of patients with MASH (NAS≥4) and significant fibrosis (F≥2), also referred to as “at-risk” MASH, who are at higher risk of disease progression and may be appropriate candidates for therapeutic intervention.

Our first biomarker technology, NIS4®, integrated the outputs of four MASH-associated biomarkers (alpha-2-macroglobulin, YKL-40, hemoglobin A1c, and miR-34a-5p) through an algorithm to produce a single score that can be utilized to rule in and rule out at-risk MASH, while minimizing the number of indeterminate test results.

•In August 2020, we announced that pivotal data describing the derivation and validation of NIS4® technology was accepted for publication by The Lancet Gastroenterology & Hepatology.

•In November 2021, NIS4® technology’s utility was demonstrated in a biomarker qualification Phase 1 study undertaken by the NIMBLE consortium with a strong performance for identifying patients with “at-risk” MASH and the components of "at-risk MASH (MASH, NAS ≥ 4 and fibrosis stage ≥ 2). In September 2023, these data have been published in the prestigious scientific journal Nature Medicine.

We out-licensed our NIS4® technology to Labcorp in 2019 and 2020 in the field of clinical research and for the development of a laboratory-developed test (LDT), respectively. In 2021, we also signed a non-exclusive license with Q Squared Solutions LLC, or Q2, with the objective to broaden access to our NIS4® technology in the clinical research space. See Item 4.B - "Commercialization perspectives—Out-licensing partnerships ”.

In October 2022, we announced the development of NIS2+®, a next-generation technology for the diagnosis of at-risk MASH, designed as a robust optimization of NIS4®. Since then, NIS2+® performances were detailed and presented in four different manuscripts, accepted and published in important scientific journals.

•The first paper, published in the Journal of Hepatology in May 2023, highlighted the development and validation of NIS2+® as an optimization of NIS4® technology for identifying at-risk MASH. NIS2+® demonstrated strong clinical performance in detecting at-risk MASH, while its composite scores were not impacted by the status of important subpopulations such as Type-2 diabetes, age and sex, addressing an important unmet need. In addition, the increased robustness and simplicity of NIS2+® technology (from a 4 to a 2-biomarker panel) should allow for a wider and easier application in clinical settings.

•The second paper, published in conjunction with Labcorp in Hepatology Communications in August 2023, highlighted the high clinical performances of NIS2+® in a population of older adults (≥65 years of age), which were superior to other well-known tests for the diagnosis of at-risk MASH. These data support the clinical value of this blood-based technology for the diagnosis of at-risk MASH in older adults who would benefit from intensive lifestyle or therapeutic interventions, and is expected to greatly assist with US Centers for Medicare & Medicaid Services (CMS) reimbursement efforts.

•The third paper, published in the Journal of Hepatology in December 2023, positioned NIS2+® as a powerful tool for improving the recruitment of at-risk MASH patients into clinical trials, reducing the high inclusion failure rates based on liver biopsy results (>60%) and thus the overall cost associated with recruitment, without significantly increasing the number of patients to be examined or introducing bias into the recruited patient population.

•The last in date paper, published in JHep Reports in January 2024, provided a global analysis of the impact of age on different NITs concluding that, unlike other usual NITs such as FIB-4 or ELF, NIS2+® was not impacted by this factor, allowing physicians to use and interpret NIS2+® results irrespective of patients' age.

Besides these publications in scientific journals, further data on NIS2+® (diagnostic, screening, prognostic, subpopulations analyses) were presented in 10 posters and three oral presentations at five international congresses.

Our agreements with Labcorp and Q2 also provide access to NIS2+®.

–Next milestones

We believe the future of NIS2+® is through an IVD test as a standalone diagnostic with the potential to enable a non-invasive, accessible and validated alternative to the liver biopsy to benefit patients, improve overall clinical care and greatly reduce barriers to entry for innovative therapies.

We continue to explore the possibility of initiating and completing validation studies necessary to obtain regulatory approval and CE Certificates of Conformity, alone or with a development and commercial partner, to release an IVD powered by NIS2+® technology on the U.S. and European markets. In the meantime, we will continue to seek the most appropriate ways to optimize on the potential of NIS2+®.

–TS-01 as a point of care (POC) device for measuring ammonia in blood

Approximately 90% of hyperammonemia cases in adults are in people who have cirrhosis of the liver. Cirrhosis is the end stage of every chronic liver disease and is the 11th leading cause of death worldwide. Globally, an estimated 112 million people suffer from compensated cirrhosis, claiming more than 1.3 million lives in 2017. Complications of cirrhosis are marked by liver metabolic dysfunctions and the development of clinical signs, of which the most frequent is HE. HE is a serious neurologic condition caused when ammonia accumulates in blood, eventually affecting the brain. Elevated ammonia concentration in blood and brain (hyperammonemia) is associated with high mortality and is the mainstay for pathogenesis and treatment of HE. In patients with cirrhosis, fully symptomatic overt HE leads to hospitalizations and readmissions. HE-related hospitalizations generated charges of approximately US $11.9 billion per year in the United States, a 46% cost increase from 2010 to 2014. Costs are expected to further increase due to disease progression, requiring more complex health care efforts.

Overt HE occurs in 30-45% of patients with cirrhosis, leading to approximately 1 million cases considering 2,828,000 cases of cirrhosis worldwide. There is a need for a reliable point of care devise to measure ammonia in the blood in patients with HE, so that there can be a repeated quantification of ammonia levels to test the efficacy of ammonia-lowering treatments. Furthermore, ammonia levels can predict the onset of new episodes of HE even with mild hyperammonemia, but there are currently logistical challenges to accurately measure ammonia in the blood.

We believe that the ammonia POC diagnosis would complement both VS-01 and VS-02 product candidates and is in line with our business strategy to improve the management of severe liver diseases globally. We believe combining diagnostics with therapeutics under one umbrella synergistically multiplies the value of each product.

–A high unmet medical need

When patients with altered mental status are admitted to the emergency department, HE should be diagnosed as fast as possible to initiate further diagnostic tests, especially in the emergency department, where resources of medical staff and time are limited. Since many of the symptoms of HE also occur in people with other types of brain disease or damage (e.g., stroke, brain tumor, or bleeding inside the skull), an ideal bedside test for fast, precise and accurate ammonia measurements would:

–Allow for the rapid diagnosis of HE. A high ammonia level increases the probability of HE especially in patients who have known liver disease.

–Trigger other diagnostic steps to explore other etiologies of altered mental status (a low ammonia level reduces the probability of HE) or to rule out potential gastrointestinal bleeding if HE confirms (e.g., endoscopy).

–Initiate specific medical treatment (e.g., lactulose/antibiotic therapy). Especially in the emergency department, where resources of medical staff and time are limited.

In addition, self-monitoring of ammonia with an accurate and user-friendly POC ("Point of Care") device offers the opportunity for early identification of severe HE episodes, timely therapeutic management, and therefore decreasing hospital visits, long-term risks of complications, and global burden on public health. Moreover, close follow-up of the ammonia offers the possibility to better tailor current therapies for HE, which are unfortunately associated with poor compliance due to their side effects. Adapting treatment dose and schedule, can increase compliance and hence reduce occurrence of severe episodes. Finally, HE impacts daily functioning by altering fitness to drive, attention, memory, mood, and psychomotor speed. A tighter control of the disease is expected to increase the quality of life of patients and their families.

Today, serum ammonia testing and interpretation remain logistically challenging. After the sample is collected, erythrocyte and platelet metabolism persist in vitro, and ammonia concentrations increases at room temperature. Therefore, it is recommended that samples are kept on ice and immediately processed after collection, which increases the overall burden on staff.

Despite these challenges, the literature indicate that serum ammonia testing is increasing. Future improved ammonia testing may enhance value-based use of ammonia in patients with cirrhosis and HE. A POC device for ammonia is expected to save time, efforts, and expenses to the health care professionals while supporting caregivers, and family members.

Currently, the only marketed POC device for ammonia measurement is the PocketChem. It is mainly used in research because of its narrow quantification range (7-286 µmol/L), its interference issues and underestimation of ammonia levels in comparison to enzymatic assays.

•TS-01 for at-home monitoring of ammonia in liver disease patients to help detect HE

TS-01 is a device based on a "transmembrane pH-gradient polymersome" technology designed to easily measure ammonia levels at home.

The underlying technology behind the Transmembrane pH-gradient polymersomes for ammonia quantification in blood consist of vesicles made of non-biodegradable polymers that form a bi-layer membrane. The aqueous core of the vesicles is loaded with a pH-sensitive dye in an acidic buffer. An alkaline buffer on the outside generates the pH-gradient across the polymersomes’ membrane. Uncharged ammonia in blood samples can easily diffuse across the polymeric membrane into the core of the polymersomes, where it is protonated due to the acidic environment. Generated ammonium ions cannot diffuse back due to their charge. Accumulation of protonated ammonia inside the core of the vesicles triggers an increase in pH and consequently an increase in fluorescence intensity of the pH-sensitive dye. The increase correlates with the ammonia concentrations in the sample. When an equilibrium state is reached, fluorescence can be easily measured and thus ammonia concentrations in blood derived. We believe this unique mechanism will allow us to scale polymersome technology from high throughput to single measurements in a POC.

The polymersomes technology was developed and validated by the Federal Institute of Technology Zurich (ETH Zurich) and we hold an exclusive worldwide license to develop and commercialize this technology in all fields, with an option to purchase the intellectual property subject to certain conditions.

–Next milestones

The development of TS-01 based on the polymersome technology is performed in collaboration with ZHAW School of Engineering with expertise in optoelectronics as well as in the development of demanding biomedical instrumentation. The lab-bench prototype has been miniaturized to allow portability of the device. The next steps include validation of the test in blood and further miniaturization of the device.

–Strategic Partnerships

•Out-Licensing Partnerships

◦Strategic Collaboration with Ipsen

In December 2021, we entered into a long-term strategic partnership for global collaboration with Ipsen Pharma SAS, or Ipsen, a global, mid-sized biopharmaceutical company focused on transformative medicines in oncology, rare disease and neuroscience. The agreement gives Ipsen an exclusive worldwide (excluding Greater China which is licensed to Terns, see below) license to develop, manufacture and commercialize our investigational treatment elafibranor, for people living with PBC, and in other indications. The partnership also gives Ipsen access to future clinical programs led by GENFIT through rights to first negotiation and combines GENFIT’s scientific expertise and proprietary technologies in liver disease with Ipsen’s development and commercialization capabilities.

GENFIT ~~remains~~remained responsible for the Phase ~~III ELATIVE~~3 ELATIVE® trial ~~until~~through the completion of the double-blind treatment period. Ipsen ~~will assume~~has assumed responsibility for all additional clinical development, including completion of the long-term, open-label extension period of the ~~ELATIVE~~ELATIVE® trial, and global (excluding Greater China) commercialization. ~~This newly established strategic partnership will also provide~~At the date of this report, the responsibility of the pursuit of the trial is almost entirely transferred to Ipsen ~~with access~~(only one clinical investigation site remains to ~~GENFIT’s research capabilities and other clinical programs through rights to first negotiation.~~be transferred).

Under the agreement, Ipsen will pay GENFIT up to ~~€480m,~~€480 million, comprising an upfront cash payment of ~~€120m,~~€120 million received in 2021, as well as regulatory, commercial, and sales-based milestone payments up to ~~€360m,~~€360 million, plus tiered double-digit royalties of up to 20%. In addition, to underscore its long-term commitment, Ipsen also became our largest shareholder through the purchase of 3,985,239 newly issued shares representing 8% of GENFIT S.A after issuance, via a ~~€28m~~€28 million investment. The new shares are subject to a lock-up period ending on the earlier of the date on which the EMA makes a formal recommendation to the European Commission for the marketing authorization of elafibranor in PBC, the date on which the FDA grants approval of elafibranor in PBC (PDUFA action date: June 10, 2024) or in the event the ~~ELATIVE~~ELATIVE® trial does not meet its primary endpoint. For more information about the financial terms of the agreement, including milestones received to date, see Note 7 - "Revenues and other i ncome" as well as Note 29 - "Com mitments and contingent liabilities" to our consolidated financial statements included in this annual report.

This agreement will remain in force until the later of either a 10-year period after the first sale of a licensed product in the territory or the expiration of the last patent concerning such a licensed product in the relevant country (determined on a per-country basis). ~~For more information, see "~~

◦~~Item 10.C – Collaboration and License Agreement with Ipsen Pharma SAS~~".

Agreement with Terns Pharmaceuticals

In June 2019, we announced the signing of a licensing and collaboration agreement with Terns Pharmaceuticals, a global biopharmaceutical company based in the U.S. and China with a focus on developing novel and combination therapies to treat liver disease. Under the agreement, Terns has been granted the exclusive rights to develop, register and commercialize elafibranor in Greater China (mainland China, Hong Kong, Macau, and Taiwan), for the treatment of ~~NASH~~MASH and PBC.

Under the terms of the license agreement, GENFIT has received an initial payment of $35 million from Terns and may receive up to $193 million in additional payments upon completion of clinical, regulatory and commercial milestones. At commercial launch of elafibranor in Greater China, GENFIT may receive mid-teen percentage royalties from Terns based on the sales in this territory. As part of the agreement, GENFIT and Terns will also undertake joint R&D projects in liver disease.

The preparation of the inception of clinical trials with elafibranor in PBC in China is underway, and its timeline will be determined by the resolution of the COVID-19 crisis and discussions with regulatory authorities.

This agreement will remain in force until the later of either a 10-year period after the first sale of a licensed product in the territory or the expiration of the last patent concerning such a licensed product in the relevant territory (determined on a per-territory basis). ~~For more information, see "~~

◦~~Item 10.C – Collaboration~~Agreements with LabCorp and ~~License Agreement with Terns Pharmaceuticals, Inc~~".Q2

~~Cholangiocarcinoma (CCA)~~

~~About Cholangiocarcinoma~~

~~CCA is~~In January 2019, we entered into a type of cancer that forms in the bile ducts that carry the digestive fluid bile and is the second most common primary hepatic malignancy comprising approximately 15% of all primary liver tumors. Cases of CCA are usually asymptomatic in early stages, and are therefore often diagnosed when the disease is already in advanced stages. The silent presentation of these tumors combinedworldwide, non-exclusive license agreement with ~~their highly aggressive nature and being refractory to chemotherapy contribute to poor prognosis and high mortality, representing ~2% of all cancer-related deaths worldwide yearly.~~

Although CCA is a rare cancer, its incidence (0.3–6 per 100,000 inhabitants per year) and mortality (1–6 per 100,000 inhabitants per year), have been increasing in the past few decades worldwide, representingLabcorp, a global life sciences leader specializing in health ~~problem.~~

CCA constitutes a diverse group of heterogeneous biliary malignant tumors that can arise at any point of the biliary tree. CCAs are divided into two subtypes depending on their anatomical site of origin into intrahepatic CCA (iCCA)improvement and ~~extrahepatic CCA (eCCA). Lesions involving the second-order bile ducts are defined as iCCA~~patient treatment decision support, to enable them to further develop and account for up to 50% of all CCAs. On the other hand, eCCAs are divided into perihilar CCAs (pCCAs), when they arise in the right or left hepatic duct or at their junction (50-60% of eCCAs), and distal CCAs (dCCAs), when they arise in the common bile duct (approx. 20-30% of eCCAs).

Several risk factors have been linked to CCA. However, a common characteristic amongst many of these risk factors is the association with chronic inflammation of the biliary epithelium and bile stasis, which are features of cholestatic diseases. In particular, primary sclerosing cholangitis has been identified as a risk factor linked to CCA. Several recognized risk factors have increased globally over recent decades and could be contributing to increasing CCA rates. These factors include high alcohol consumption, tobacco smoking, viral infections (hepatitis B virus and hepatitis C virus), as well as the global obesity pandemic, the metabolic syndrome and nonalcoholic fatty liver disease, which have been reported to increase the risk of CCA.

Although surgery is a potential curative option for CCA, most patients are diagnosed at late stages due to lack of specific symptoms. The majority of patients with CCA have metastatic or locally advanced (that is, unresectable) disease at presentation, and only ∼25% are eligible for resection. When disease is unresectable, the current first-line treatment is chemotherapy with gemcitabine + cisplatin. After progression on first-line chemotherapy, the second-line treatment includes FOLFOX chemotherapy, along with several targeted therapies including pemigatinib, dabrafenib + trametinib, and ivosidenib. However, despite the treatment options presently available, the unmet need remains high due to limited benefits on survival, and numerous programs are ongoing to develop additional first-line and second-line therapies in CCA.

~~GNS561 in CCA~~

To address the significant unmet need in patients diagnosed with CCA, GENFIT is developing GNS561 to prolong the overall survival of patients who present with iCCA and eCCA. GNS561 is a PPT-1 (Palmitoyl Protein Thioesterase-1) inhibitor that blocks autophagy. Autophagy is activated in tumor cells as a survival mechanism in a nutrient poor environment, due to tumor cell growth in advanced cancers. One of the key cellular organelles implicated in the autophagy process is the lysosome. By decreasing the activity of PPT1 in lysosomes, GNS561 may have an important inhibiting activity on late-stage autophagy, which leads to tumor cell death.

Autophagy is induced by starvation to capture and degrade intracellular proteins and organelles in lysosomes, which recycles intracellular components to sustain metabolism and survival. Autophagy also plays a major homeostatic role in controlling protein and organelle quality and quantity, and through these processes play a role in protecting cells from undergoing programmed cell death. Therefore, autophagy confers the ability to adapt to environmental stresses, preventing cellular damage, and promoting cell survival. Autophagy has opposing roles in cancer, preventing tumor initiation in healthy tissues, but favoring cancer progression once the tumor is formed. Although autophagy may play a role to prevent tumor initiation, it often promotes tumor cell proliferation and survival in more advanced cancers, where it is able to help cancer cells cope with the harsh tumor environments characterized by nutrient depletion, hypoxia, and other stresses such as chemotherapy. As such, autophagy has been described as a pro-survival mechanism present in most advanced tumors, facilitating tumor adaptation to different stresses, thus mediating tumor progression. Accordingly, many types of advanced cancers show higher basal autophagic activity than normal tissues, and some have been described as “autophagy-dependent” tumors, such as pancreatic cancer or tumors with active RAS (leading to active MAP kinase pathway). This basal autophagy also facilitates cancer cell adaptation to therapy-induced stresses, provoking therapy resistance in these tumors, which is one of the major challenges in the clinic.

Beyond the variable basal levels of autophagy, many general cytotoxic chemotherapy drugs as well as multiple targeted therapies such as kinase inhibitors have been proposed to induce autophagy as a protective measure in cancer cells. In 2019, the results of two major studies showed that,deploy NIS4® in the context of ~~a cancer with the KRAS mutation (active RAS leading~~clinical research. We believe this agreement will provide expanded access to, ~~activation~~and further validation of ~~the MAP kinase pathway), inhibitors of the MAP kinase pathway can induce autophagy in pancreatic cancer,~~an LDT powered by NIS4®. The license agreement permits Labcorp, through its subsidiary Covance, to market and combinations of these kinase inhibitors with autophagy inhibition can enhance tumor cell killing (Bryant et al., 2019; Kinsey et al., 2019). Importantly, a significant proportion of CCA patients have mutations including KRAS. Therefore, the combination of therapies targeting the MAP kinase pathway with GNS561 to inhibit autophagy is a potential therapeutic strategy to treat CCA patients.

~~Lysosomal function is~~sell an essential element in autophagy (macroautophagy) and GNS561 is a lysosomotropic small molecule which inhibits PPT1, a lysosomal enzyme required to maintain lysosome-autophagy function. PPT1 expression is high in most cancer cell lines, increased in tumors compared with paired normal tissue, and in metastases versus primary tumors. As well,LDT powered by NIS4® test in the ~~TCGA database, stage IV~~context of clinical research studies. Covance processes samples and provides test results to clinical trial sponsors. Covance has made significant progress in the deployment of NIS4® in several clinical trials conducted by leading players in the pharmaceutical industry. Covance is permitted and accredited, and will be responsible for submitting any validation that may be required under applicable state and federal laws.

In September 2020 we and Labcorp announced the signature of a five-year exclusive license agreement for our NIS4® technology, which seeks to enable easier identification of patients with ~~multiple tumor types had significantly shorter overall survival if they exhibited high expression of PPT1. Thus, these findings along with~~at-risk MASH. Under the ~~role of PPT1 in maintaining lysosome-autophagy function establishes the potential of PPT1 inhibition as~~license agreement, Labcorp will commercialize a strategy in cancer therapy. In addition to its inhibition of PPT1, studies with GNS561 showed that it has high liver tropism when administered orally, significantly reduced cell viability in two human iCCA cell lines and induced apoptosis. GNS561-mediated cell death was correlated with inhibition of late-stage autophagy and induction of a dose-dependent build-up of dysfunctional lysosomes. GNS561 was also efficient in vivo against a human intrahepatic CCA cell line in a chicken chorioallantoic membrane xenograft model, with a good tolerance at doses high enough to induce an antitumor effect in this model.

~~Based~~blood-based molecular test based on the current knowledge of the tumor-promoting role of autophagy, numerous pharmacological approaches aimed at inhibiting autophagy at different stages of the pathway are being developed, the majority of which are in preclinical stage. However, the lysosomal inhibitor CQ and its derivative hydroxychloroquine (HCQ) are the only drugs that are currently used in patients with the deliberate goal of targeting autophagy (Towers and Thorburn, 2016). The first wave of clinical trials with CQ/HCQ alone or in combination with other therapies showed promising results, but more recent trial results have been less positive, which may be due to insufficient drug concentrations being used, leading to inconsistent results. Retinopathy and cardiac toxicity (QT prolongation) are major toxicities reported with CQ and HCQ. It has been suggested that novel PPT1 inhibitors which do not cross the blood brain barrier could have an advantage to avoid this retinal toxicity. In comparison, in preclinical studies, GNS561 has been observed to have a 10-fold higher potency than CQ/HCQ to decrease the viability of CCA cell lines (GNS communication). As well, a whole body tissue distribution study of GNS561NIS4® technology in the ~~rat showed very limited exposure~~United States and Canada, thereby making it more widely accessible to health professionals. Leveraging the NIS4® technology, in April 2021, Labcorp launched the LDT "NASHNext®".

In May 2021, we signed a worldwide, non-exclusive license agreement with Q2 to broaden the availability of NIS4® technology in the brain and eyes. GNS561 has been evaluated in a Phase 1b trial which included patients diagnosed with CCA and HCC, and did not detect any neurological or retinal toxicity, cardiac toxicity, or any dose limiting toxicity.

GNS561 is an inhibitor of PPT1, which has been observed to induces lysosomal dysregulation, inhibit autophagy, induce CCA cell killing, and has demonstrated anti-tumor activity in an in vivo allograft model. Taken together, the compelling results generated with GNS561 highlight its potential to provide benefit in prolonging survival of patients diagnosed with CCA. In particular, we believe that GNS561, as an inhibitor of autophagy, is well positioned to be beneficial in combination therapy, including combinations with inhibitors of the MAP kinase pathway or immunotherapy/checkpoint inhibitors.

~~GNS561 is an investigational compound and has not been registered by any regulatory authority. It is a candidate for breakthrough therapy designation, orphan drug designation and accelerated approval.~~

~~We plan to start the Phase 2~~ clinical ~~trial by the fourth quarter of 2022.~~

research field.

•In-Licensing Partnerships

◦License and Development Agreement with Genoscience Pharma

On December 16, 2021, we signed an exclusive license from Genoscience Pharma to develop and commercialize the investigational treatment GNS561 in CCA in the United States, Canada and Europe, including the United Kingdom and Switzerland. Genoscience Pharma is a French clinical-stage biotechnology company developing novel lysosomotropic therapeutics to establish a new standard of care against cancer, autoimmune and infectious diseases.

Under the agreement, Genoscience Pharma is eligible for clinical and regulatory milestone payments of up to €50 million and tiered royalties. The first payable milestone is contingent on positive Phase 2 clinical trial ~~results.~~results, and may result in payments of up to €20 million.

In addition, we also have a right of first negotiation with respect to any license or assignment, or option for a license or an assignment, with any third party to develop or commercialize other Genoscience Pharma assets in the field of CCA, to the extent Genoscience Pharma is looking to partner the asset with a third party or receives a spontaneous offer for collaboration.

For the period commencing on the date of the agreement until the first regulatory approval of GNS561 for commercialization, Genoscience Pharma has the right to repurchase the license to GNS561 in CCA at a pre-determined price in the event that Genoscience Pharma receives an offer from a third party to acquire or obtain a license to GNS561 in all indications, provided that GENFIT shall first have the opportunity to negotiate the acquisition or license to GNS561 in all indications.

The agreement shall remain in force, on a country by country basis in the territory until the later of (i) the date on which the last patent rights included in the licensed patents expires, or is otherwise cancelled, withdrawn or abandoned, in such country, or (ii) upon the regulatory approval of a generic product with respect to the licensed product in such country or (iii) the tenth anniversary of the first commercial sale of the licensed product in such country.

GENFIT also purchased a 10% equity stake in Genoscience Pharma through the subscription of new ordinary shares for a ~~total~~total amount of approximately ~~€3.1~~€2.3 million.

◦License Agreement with Seal Rock Therapeutics

In May 2023, GENFIT licensed the exclusive worldwide rights of ASK1 Inhibitor SRT-015 (injectable formulation in acute liver disease) from Seal Rock Therapeutics, a Seattle, Washington (USA) based clinical stage company.

Under the terms of the agreement, Seal Rock Therapeutics is eligible for payments of up to €100 million, including regulatory, clinical and commercial milestones, as well as tiered royalties. All of these payments would only begin to become due following positive Phase 2 results, which would not occur before 2026, according to our best estimates. For more information about the financial terms of the agreement, see Note ~~2.5~~2 - "Major Events in the Period and Events after the Period - Major events in the period" "~~Signature of a Licensing~~ to our consolidated financial statements included in this annual report

◦License Agreement with ~~Genoscience Pharma~~"Celloram

~~Acute on Chronic Liver Failure~~On July 28 2023, GENFIT licensed the exclusive worldwide rights to CLM-022, a first-in-class inflammasome inhibitor in liver disease, from Celloram Inc., a Cleveland-based biotechnology company.

~~Regardless of their etiology, chronic liver diseases, or CLD are invariably associated with progressive accumulation of fibrosis in~~Under the liver culminating in cirrhosis. At a compensated stage, cirrhosis is a silently evolving disease with no specific symptoms. In the absence of an approved anti-fibrotic drug and if the underlying CLD is not treated, fibrosis further invades the liver, which is ultimately no longer able to efficiently function. This transition from compensated to decompensated cirrhosis occurs when anyterms of the ~~following~~agreement, Celloram is eligible for payments of up to €160 million, including regulatory, clinical ~~hallmark events occur: presence of ascites, variceal hemorrhage and/or hepatic encephalopathy.~~

~~Patients with CLD,~~ and particularly patients with compensated and decompensated cirrhosis, are highly sensitive to acute insults triggering a sudden deterioration of liver function, which may consequently jeopardize normal functioning of other organs. Such an acute decompensation (AD) event is typically the result of a precipitating event, such as bacterial infection, acute alcoholic hepatitis, relapse of viral hepatitis or drug-induced liver injury, although as many as 40% of patients with AD have no identifiable precipitating event.

Acute on Chronic Liver Failure or ACLF syndrome is generally recognized as an episode of AD associated with one or more failures affecting vital organ systems including the liver, kidneys, brain, coagulation, circulation and/or respiratory systems.

Due to associated organ failures, patients with ACLF syndrome are at very high risk for short-term mortality, and globally the mean survival time in this population is 3 – 5 years. In a study of 1,343 hospitalized patients with cirrhosis and AD, 303 had ACLF when the study began, 112 developed ACLF, and 928 did not have ACLF. The 28-day mortality rate among patients who had ACLF when the study began was 33.9%, among those who developed ACLF was 29.7%, and among those who did not have ACLF was 1.9%. In general, a greater number of organ failures is associated with higher short-term mortality. For example, the 28-day mortality rate for patients having 3 or more organ failures approaches 80%.

~~Management of patients with ACLF~~

There are no specific therapies currently available for patients with ACLF other than treatment of precipitating events, when identified, and organ failure support (e.g., hemodialysis in the case of kidney failure). The only definitive treatment option is liver transplantation but due to emergency setting, limited access to compatible liver donors and in some case no accessible liver transplant capabilities, a vast majority of patients experiencing a life-threatening ACLF episode do not have access to transplant surgery.

Patients with AD are generally hospitalized in the regular hepatology ward, although an intensive care unit where organ support can most effectively be provided generally provides optimal care of patients with ACLF.

Despite intense efforts to improve the standard of care, the current high short-term mortality rate highlights the critical medical need of new therapies to help patients to rapidly recover and survive an ACLF episode without liver transplantation.

~~ACLF is a rare life-threatening condition with significant costs for health care systems~~

Worldwide, there are about 10 million hospitalizations per year for decompensated cirrhosis. With a 35% ACLF prevalence in patients hospitalized for decompensated cirrhosis, there are approximately 3-4 million hospitalizations for ACLF each year.

In the US, there are over 600,000 hospitalizations per year for decompensated cirrhosis. With a 10-30% ACLF prevalence in this population the annual number of ACLF hospitalizations in the US is estimated to be between 60,000 and 180,000. In the 5 major European countries, there are about 800,000 hospitalizations for decompensated cirrhosis. With a 20-30% prevalence in this population, the annual number of ACLF hospitalization is estimated to be between 160,000 and 240,000.

Cirrhosis and ACLF represent a substantial health and economic burden. For example, in the United States in 2011, the total inpatient costs for cirrhosis with and without ACLF was estimated to be more than $10 billion. In the same study, the cost per hospitalization was 3.5-fold higher for ACLF patients with two or more organ failures than for patients with cirrhosis who did not have ACLF.

Such high hospitalization costs for critically ill ACLF patients as compared to cirrhotic patients without ACLF can be easily explained by higher rates of hospitalization in the ICU and, most importantly, by 2-3-fold longer hospital stays: average of 16 days for ACLF patient versus 7 days for patients with cirrhosis who did not have ACLF.

~~ACLF pathophysiological mechanisms and GENFIT research strategies~~

In the absence of available treatments for the management of ACLF, we believe R&D efforts should focus on scientific strategies targeted on mechanisms leading to rapid development of organ failures after an acute insult. Although the pathophysiological processes driving ACLF development are not fully understood, some events appear as particularly important. For instance, there is now a large body of evidence implying that an uncontrolled and generalized inflammatory storm (so called Systemic Inflammatory Response Syndrome or SIRS) plays a key role in ACLF development. This may at least partly result from rapid translocation of intact bacteria and bacterial products (pathogen-associated molecular patterns or PAMPs) crossing the intestinal barrier, reaching the circulation and peripheral organs. About 30% of patients with ACLF have sepsis, which confirms this hypothesis.

~~GENFIT believes that the ideal treatment must simultaneously target all components of the pathological process.~~

In ACLF, GENFIT is assessing two classes of compounds, NTZ , on the one hand, an antiparasitic drug which we are repositioning, and compounds within the PPAR agonist therapeutic class with optimized metabolic and anti-inflammatory effects, on the other hand.

~~Preclinical and Clinical Development Program~~

~~The identification of NTZ is the result of our research program initially designed to discover novel anti-fibrotic molecules with a priority given to liver fibrosis.~~

During further research,we have also discovered that NTZ and its circulating metabolite, tizoxanide or TZ, have additional anti-inflammatory effects through the inhibition of inflammatory cell activation. In our preclinical research, we have observed that NTZ's anti-infectious properties may act on intestinal microbiota dysbiosis/overgrowth and improve the intestinal barrier and direct dose-dependent anti-inflammatory effects on immune cells (macrophages and polymorphonuclear leukocytes).

~~As part of our preclinical program, we have studied NTZ in in vitro and in vivo disease models .~~

~~In disease models, NTZ~~commercial milestones, as well as its active circulating metabolite, have a wide anti-infectious spectrum acting on bacteria, viruses and parasites commonly encountered in human intestinal flora. Thus, an oral treatment with NTZ is expectedtiered royalties. Almost all of these payments would only begin to ~~improve bacteria overgrowth and dysbiosis and possibly preserve~~become due following positive Phase 2 results, which would not occur before 2028, according to our best estimates. For more information about the ~~intestinal barrier in patients with ACLF. We also observed that, in cultured human liver cells, TZ inhibits a key pathway~~financial terms of ~~programmed cell death (apoptosis) in a dose dependent manner.~~

~~Our research has demonstrated that in healthy rats, an oral administration of NTZ concomitant with intraperitoneal injection of LPS significantly reduced~~ the ~~LPS-induced rise in circulating cytokines and inflammatory markers.~~

In two distinct rat models of ACLF, we found that NTZ has hepatoprotective effects by reducing ALT and AST while totally preventing LPS-induced rise in GGT and total bilirubin. NTZ also significantly reduced LPS induced brain edema and LPS-induced rise in inflammatory markers. Treatment with NTZ also prevented plasma increases in two renal function markers : cystatin C and creatinine.

In addition, we are currently researching the effects of NTZ on sepsis, with encouraging preliminary results. In the sepsis model, the mortality rates in NTZ treated vs vehicle treated group were 53% vs 90% at 72 hours and 67% vs 100% 5 days after CLP surgery.

agreement, see

~~NTZ clinical program~~

On November 9, 2021, we announced the first patient first visit in a Phase 1 study for the evaluation of NTZ in subjects with hepatic impairment. This open-label, non-randomized, 2-center, repeated-dose, parallel-group study will provide preliminary insight into NTZ pharmacokinetics (PK) and safetyNote 2 - "Major Events in the ~~setting of hepatic impairment~~Period and ~~will inform~~Events after the potential need for dose adjustment in future studies to be conducted in patients with cirrhosis and hepatic impairment. In this study, adult subjects with moderate and severe hepatic impairment will be given NTZ 500mg twice daily for 7 days, and the PK of NTZ will be compared with the PK in volunteers without hepatic impairment. Data is expected from this study as early as the third quarter 2022.

~~A Phase 1 study to evaluate the safety and PK in individuals with renal impairment is planned to initiate~~Period - Major events in the ~~second quarter of 2022.~~

~~Both of these studies will be supportive of an IND~~period" and ~~a Phase 2 proof of concept study in patients with AD~~N ote 29 - "Commitments and ~~ACLF. We would expect to initiate a Phase 2 trial in the first quarter of 2023.~~

~~NIS4 Technology to Power the Identification of Patients with NASH and Fibrosis~~

As part of our strategy to address unmet needs in NASH, we have advanced a diagnostic program based on the identification of specific biomarkers that are expressed at different levels in patients with NASH and significant fibrosis (F≥2) as compared to patients with less severe disease. This discovery kicked off a multi-year effort that has resulted in the development of NIS4 technology, a blood-based molecular technology for the identification of patients with NASH (NAS≥4) and significant fibrosis (F≥2), also referred to as “at-risk” NASH, who are at higher risk of disease progression and may be appropriate candidates for therapeutic intervention. In January 2019, we entered into a license agreement with Labcorp to allow them to develop, market, and sell a test powered by NIS4 in the clinical research space. In September 2020, we signed a five-year exclusive license agreement with Labcorp to allow them to develop and commercialize a Laboratory Developed Test or LDT powered by NIS4 technology for use in routine clinical diagnostic testing in the United States and Canada. In late April 2021, Labcorp launched its LDT NASHnext powered by NIS4 technology. Its commercial launch is however still constrained by the lack of approved therapeutic options in NASH.

~~In May 2021, we signed a worldwide, non-exclusive license agreement with Q Squared Solutions LLC or Q2, to broaden the availability of NIS4 technology in the clinical research field.~~

~~Today’s Challenges in Diagnosing NASH~~

NASH, the most severe form of NAFLD, is characterized by the presence of hepatocyte ballooning and inflammation, in addition to steatosis. NASH can progress silently towards cirrhosis, precluding the opportunity for clinicians to diagnose and intervene therapeutically prior to the development of severe liver complications, and constitutes a growing cause of cirrhosis, liver failure, and liver cancer globally. Furthermore, NASH is projected to become the leading cause of liver transplantation in the United States—it already is the primary cause among women and the secondary cause overall. Given this clinical scenario, there is a pressing need to identify patients at higher risk of disease progression, who could be considered for therapeutic intervention with existing options or when potentially promising agents currently in late-stage clinical development obtain regulatory approval.

The main histological determinants of the risk for long-term severe liver outcomes are NASH activity and fibrosis stage (F). NASH activity is assessed by the NAFLD activity score (NAS), a composite index derived from the sum of the scores for macrovesicular steatosis, hepatocellular injury (i.e., ballooning), and lobular inflammation. In a study with paired liver biopsies, steatohepatitis was associated with liver-related outcomes, and a higher NAS at baseline was associated with a high probability of fibrosis stage increase after ≥1 year, suggesting an association between increased NASH activity and fibrosis progression. Furthermore, a Phase 2b clinical trial in NASH demonstrated higher rates of spontaneous disease regression in both treated and untreated patients with milder NASH severity (NAS=3) compared with patients with higher activity (NAS ≥4) at baseline. Additionally, multiple studies have shown that fibrosis stage reflects the extent of disease progression toward cirrhosis—in particular, that F ≥2 (significant fibrosis) increases the risk of liver-related clinical outcomes. Given that the overall disease state is described by the combination of NASH activity and fibrosis stage, this is the rationale for inclusion of patients with NASH, a NAS ≥4 and a F ≥2 (referred to as “at-risk NASH”) in pharmacological intervention clinical trials.

Liver biopsy is the clinical reference standard for the diagnosis of NASH among patients with clinical risk factors for this disease, such as metabolic disorders (with or without abnormal liver biochemistries) in the absence of alternative causes for steatosis. The implementation of this diagnostic approach, however, is limited in routine clinical practice by its invasiveness, cost, attendant risks, variability in interpretation, and the restricted number of professionals able to perform and interpret the test, among other factors. These limitations preclude liver biopsies from being broadly used as the primary diagnostic in such a prevalent disease. Providing a non-invasive alternative to liver biopsy will therefore be critical to facilitate improved patient diagnosis, management, and future treatment access in routine clinical practice, and may eventually reduce the morbidity and mortality associated with this disease.

Currently, there are few non-invasive diagnostics specifically designed to identify at-risk NASH. Existing tests used in a NAFLD or NASH clinical context can be generally characterized as either repurposed or not optimized for the identification of this condition. Multiple algorithm or imaging-based tests used today (e.g., Fibrosis-4 [FIB-4] score, aspartate aminotransferase [AST]-to- Platelet Ratio Index [APRI], Enhanced Liver Fibrosis [ELF] score, vibration-controlled transient elastography ([VCTE] also known as FibroScan) were originally designed for use in mixed liver aetiologies (e.g., hepatitis C virus, hepatitis B virus), and have since been repurposed for use in NAFLD or NASH. Limitations associated with many of these tests have been reported, including performance (area under the receiver operating characteristics curve [AUROC] <0∙80) for the identification of NASH or fibrosis stage ≥2, or both, in individuals with type 2 diabetes. Additionally, several NAFLD-focused or NASH-focused tests (e.g., body-mass index [BMI], AST/alanine aminotransferase [ALT] ratio and diabetes [BARD] score, and NAFLD Fibrosis Sore [NFS]) were developed to identify advanced liver fibrosis (i.e., fibrosis stage ≥3), and might therefore not be optimized for the identification of at-risk NASH. Even widely used imaging-based techniques for liver disease management, such as VCTE, have been shown to be influenced by a number of clinical features, including the presence of type 2 diabetes, dyslipidaemia, elevated waist circumference, elevated AST concentrations, and elevated systolic blood pressure at the time of examination. Limitations or confounders of non-invasive tests are of importance to clinicians to help them assess the right NASH diagnostic tests to use in their patients. We aimed to develop and validate a blood-based diagnostic multivariate index test that is specifically designed to rule in and rule out at-risk NASH.

The treatment of NASH being a pressing public health challenge, there is a large unmet need for a widely available, non-invasive tool to identify patients with at-risk NASH as an alternative to liver biopsy. The availability of such a test would help address the under diagnosis of NASH by supporting physicians in identifying patients with at-risk NASH, who are at higher risk for clinical outcomes and would be eligible for therapeutic intervention. We believe a test powered by our NIS4 technology, if validated and approved for marketing, may directly address this clinical gap.

~~Circulating Biomarkers and miRNA~~

Biomarkers are characteristics of the body that are objectively measured and have the potential to correlate to a specific biological state or disease condition. Circulating biomarkers are biological molecules, such as proteins, DNA or RNA, found in body fluids such as cerebrospinal fluid, blood or urine that modulate with disease. A single circulating biomarker or a panel of markers has the potential to be used to not only identify but also monitor the progression, regression, or stability of disease.

MicroRNAs or miRNA represent an emerging class of small non-coding RNA whose principal function is the regulation of the expression of target genes by acting on the stability and the translation of their messenger RNA, or mRNA. miRNAs play an essential role in many cell functions, such as development, proliferation, differentiation, cell-cycle arrest and apoptosis, or cell death. Multiple studies have shown a close association between circulating levels of miRNA and the development and progression of several cancers and have highlighted an important role for miRNAs in the regulation of human liver development and pathophysiology. Because miRNAs are released from cells in response to stress, they can be detected in most biological fluids, including blood.

~~Our Solution: NIS4 Technology Comprising Our Proprietary Biomarker Algorithm~~

Aware of the challenges associated with diagnosing at-risk NASH, we initiated a research program to combine our technical expertise in informatics, machine learning and molecular biology with access to our extensive NASH clinical biobank, including cohorts from our GOLDEN-505 and RESOLVE-IT clinical trials, in addition to cohorts from academic partnerships, to pursue the discovery of novel biomarkers that may hold the key in developing novel diagnostic tests or technologies in NASH. In 2015, we reached a key milestone with the discovery that two miRNA biomarkers, miR-200a and miR-34a-5p, that were expressed at higher levels in patients with at-risk NASH as compared to patients with less severe disease.

Since then, we have further refined our science which has uncovered four unique biomarkers that we believe provide the best overall diagnostic performance to identify patients with at-risk NASH. Our lead technology, NIS4, integrates the outputs of four independent NASH-associated biomarkers [alpha-2-macroglobulin, YKL-40, hemoglobin A1c, and miR-34a-5p] through an algorithm to produce a single score that can be utilized to rule in and rule out at-risk NASH, while minimizing the number of indeterminate test results. We intend to market an IVD-powered by NIS4 technology, if it receives FDA/CE marketing authorization, as a standalone diagnostic with the potential to enable a non-invasive, accessible and validated alternative to the liver biopsy to benefit patients, improve overall clinical care and greatly reduce barriers to entry for innovative therapies.

~~Development and validation of NIS4 technology~~

Blood samples, clinical data, and liver biopsy results from three independent cohorts with suspected NAFLD were used to develop and validate the NIS4 non-invasive blood-based diagnostic technology. Derivation was done in the discovery cohort, which comprised 239 prospectively recruited patients with biopsy-confirmed NASH (NAFLD NAS ≥3; fibrosis stage 0‒3) from the international GOLDEN-505 phase 2b clinical trial. The overall diagnostic performance of NIS4 was externally validated in two independent cohorts: RESOLVE-IT diag and Angers. The RESOLVE-IT diag cohort comprised the first 475 patients screened for potential inclusion into the randomized, double-blind, placebo-controlled, multicenter, international RESOLVE-IT phase 3 clinical trial. ANGERS was a retrospective cohort of 227 prospectively recruited patients with suspected NAFLD and clinical risk factors for NASH or fibrosis stage 2 or more according to abnormal elastography results or abnormal liver biochemistry. Clinical cutoffs were established within the discovery cohort to optimize both rule out and rule in clinical performance while minimizing indeterminate results. NIS4 was validated in the RESOLVE-IT diag cohort (AUROC 0∙83, 95% CI 0∙79‒0∙86) and the Angers cohort (AUROC 0∙76, 0∙69‒0∙82). The diagnostic performance of NIS4 within the external validation cohorts was not influenced by age, sex, BMI, or aminotransferase concentrations.

In the pooled validation cohort, NIS4 significantly outperformed other non-invasive NASH or fibrosis diagnostics, including FIB-4, NFS, ELF, APRI, and BARD for the identification of “at-risk” NASH (all p<0∙010, figure below). The overall performance of NIS4 and VCTE was not statistically different. In addition, although NIS4 was not developed to specifically identify the subpopulation of “at-risk” NASH with fibrosis stage ≥3, performance was significantly better than FIB-4, NFS, BARD and APRI (all p<0∙05), with performance not significantly different to VCTE and ELF.

Subpopulation analyses were done in the pooled validation cohort to assess the overall performance of NIS4 compared with other diagnostics among specific subpopulations of clinical relevance in NASH (figure below). The overall diagnostic performance of NIS4 was the highest across non-invasive tests evaluated, and was neither dependent on (i.e., included as variables in the NIS4 algorithm) nor statistically affected by patient age within the range studied, sex, BMI, or transaminase concentrations. The clinical performance of NFS was significantly better in patients 55 years or older than in those younger than 55 years (AUROC 0∙69 vs 0∙59; p=0∙013), whereas FIB-4 showed higher performance in females than in males (0∙75 vs 0∙67; p=0∙039). Similarly, APRI showed higher performance in females than in males (0∙79 vs 0∙68; p=0∙0040). ELF however showed higher performance in patients with a BMI of 30 kg/m2 or less than in those with a BMI of more than 30 kg/m2 (0∙84 vs 0∙74; p= 0∙029), and in females than in males (0∙81 vs 0∙71; p= 0∙019). BARD showed consistent results across the categories explored, and VCTE— although not significant—had directionally higher performance in patients without type 2 diabetes than in those with type 2 diabetes (AUROC 0∙80 vs 0∙65; p= 0∙056).

We believe that an LDT or IVD powered by NIS4 technology can provide an effective way to noninvasively rule in or rule out at-risk NASH in patients with metabolic risk factors and suspected disease. Use of an LDT or IVD powered by NIS4 in clinical trials or in the clinic has the potential to greatly reduce unnecessary liver biopsies in patients with lower risk of disease progression, achieve straightforward integration into clinical care pathways, and be more cost-effective, accessible, and acceptable for patients than liver biopsy. In doing so, an LDT or IVD powered by NIS4 could also help improve the accuracy of NASH diagnosis in patients with suspected disease, and help healthcare providers identify those most in need of therapeutic intervention.

In August 2020, we announced that pivotal data describing the derivation and validation of NIS4 technology has been accepted for publication by The Lancet Gastroenterology & Hepatology. This published study details NIS4 algorithm development and clinical validation against the liver biopsy reference standard in two independent populations comprised of data from over 700 patients. In addition to the high overall performance in identifying patients with at-risk NASH, NIS4 technology also provided consistent results in critical sub-populations (i.e. diabetic vs. non-diabetic, men vs. women) as compared to other non-invasive tests evaluated in the same individuals.

In November 2020, we announced that data relating to the NIS4 technology and the final results of the RESOLVE-IT Phase 3 clinical trial could be consulted on five posters in the context of the Liver Meeting Digital Experience, the annual conference of the American Association for the Study of Liver Diseases, which was held virtually on 13, 14 and 15 November 2020.

In June 2021, we presented new NIS4 data at the International Liver Congress™ organized by the European Association for the Study of the Liver (EASL), and the 81st Scientific Sessions of the American Diabetes Association (ADA). The data highlights the clinical performance of NIS4 technology in diagnosing at-risk NASH in patients with type 2 diabetes compared to other non-invasive tests. It shows the potential of NIS4 technology to be a valuable clinical tool either alone or in sequential combination with other blood-based non-invasive tests in identifying at-risk NASH in patients with and without type 2 diabetes.

In November 2021, NIS4 technology’s utility was recognized in a study undertaken by NIMBLE as demonstrating a unique performance in identifying patients with “at-risk” NASH. This study highlighted the importance for the diagnosis of “at risk” NASH patients (defined as NASH + NAS ≥4 and fibrosis ≥2) as a subpopulation at greater risk of liver-related outcomes. Of the five blood-based biomarker panels which were assessed in this study, only NIS4 technology produced results showing the capacity to identify these “at-risk” NASH patients.

The study also provided evidence that NIS4 technology – with a sensitivity of 82.3 and a specificity of 79.9 – had the best results among the other biomarkers tested for the diagnosis of fibrosis stage ≥ 2, a critical component of “at-risk” NASH. The presentation concluded that NIS4 technology met the a priori criteria established for Stage 1 by the NIMBLE Circulating Biomarkers Workstream (CWS) for:

•cont ingent liabilities " ~~Diagnosis of NASH~~

• ~~Diagnosis of NAS≥4~~

• ~~Fibrosis stage 2 or higher~~.

~~Regulatory~~• ~~and Commercial Strategy~~Competitive Landscape

~~We began communications with the FDA in 2017 to discuss potential regulatory pathways for an IVD powered by NIS4 technology. Based on these discussions,~~Because we will be using blood samples and liver biopsy results from non-treated patients enrolled in our clinical trials conducted to date in order to provide support for the potential validation of our test. By calculating NIS4 from a patient’s blood sample, and then comparing the test score to that patient’s liver biopsy result, we can assess whether an IVD powered byNIS4 is accurate in diagnosing patients with at-risk NASH, who are at higher risk of disease progression and may be considered for therapeutic intervention. We are conducting physician, payer, and patient primary market research to best understand clinical performance goals that would meet the needs of the evolving NASH marketplace. Based on these insights, we will finalize the analytical and clinical study designs, which are required prior to initiating formal validation studies for both the FDA and Notified Body submissions.

~~We continue to explore the possibility of obtaining regulatory approval and CE Certificates of Conformity to release an IVD powered by NIS4 technology on the US and European markets.~~

In January 2019, we entered into a license agreement with Labcorp, a global life sciences leader specializing in health improvement and patient treatment decision support, to enable them to further develop and deploy NIS4 in the context of clinical research. We believe this agreement will provide expanded access to, and further validation of an LDT powered by NIS4. Initially, we will enable Labcorp through its subsidiary Covance to market and sell an LDT powered by NIS4 test in the context of clinical research studies. Covance will process samples and provide test results to clinical trial sponsors. Covance is permitted and accredited, and will be responsible for submitting any validation that may be required under applicable state and federal laws.

In September 2020 we and Labcorp announced the signature of a five-year exclusive license agreement for our NIS4 technology, which seeks to enable easier identification of patients with at-risk NASH. Under the license agreement, Labcorp will commercialize a blood-based molecular test based on NIS4 technology in the United States and Canada, thereby making it more widely accessible to health professionals.

In May 2021, we announced that Labcorp had launched NASHnext, a novel, noninvasive diagnostic test powered by GENFIT’s NIS4 technology for the identification of NASH patients with significant fibrosis – also known as “at-risk” NASH. The test, offered by Labcorp exclusively in the U.S. and Canada, aims to identify at-risk NASH in patients with at least one metabolic risk factor. The clinical pertinence as well as the market potential for this test have been confirmed through its use in clinical trials and the new data presented in the first half of 2021. Nonetheless, the COVID-19 pandemic, the lack of approved therapeutic options in NASH and the current lack of reimbursement for NASHnext have contributed to commercial launch that remains modest at the time of this annual report.

~~Our Clinical Program for Elafibranor in the Potential Treatment of NASH~~

~~RESOLVE-IT—Pivotal Phase 3 Clinical Trial in NASH~~

In May 2020, we announced the topline results of the interim analysis of the RESOLVE-IT Phase 3 clinical trial evaluating the efficacy of the daily administration of elafibranor 120 mg in adults with NASH.

The RESOLVE-IT Phase 3 clinical trial evaluated the effect of elafibranor compared to placebo in 1,070 patients (ITT population) with biopsy proven NASH as defined by NAFLD activity score (NAS) greater than or equal to 4, fibrosis stage 2 or 3. Patients were randomized 2:1 to receive elafibranor 120mg or placebo once daily, with a follow-up liver biopsy at week 72 to evaluate histologic endpoints (resolution of NASH without worsening of fibrosis or fibrosis improvement of at least one stage).

~~Resolution of NASH is defined by a ballooning score of 0 and an inflammation score of 0 or 1, and the non-worsening of fibrosis corresponds to a fibrosis score that does not increase.~~

The trial did not meet the predefined primary endpoint of NASH resolution without worsening of fibrosis in the ITT population. In the ITT population, 19.2% of patients who received elafibranor (N=138) achieved NASH resolution without worsening of fibrosis compared to 14.7% of patients in the placebo arm (N=52) (p=0.07).

On the key secondary endpoint of fibrosis improvement of at least one stage, 24.5% of patients who received elafibranor (N=176) achieved fibrosis improvement of at least one stage compared to 22.4% (N=79) in the placebo arm (p=0.445).

Elafibranor was generally well tolerated over the 72 weeks of exposure, which is consistent with previously conducted studies and with DSMB conclusions based upon their review of RESOLVE-IT safety data throughout the study. The safety, including histological assessment, and tolerability profile of elafibranor continues to be supportive of ongoing clinical investigation, which is encouraging for the ongoing Phase 3 trial evaluating elafibranor in PBC.

On July 22, 2020, following the detailed review of the full RESOLVE-IT interim efficacy dataset, we determined that the investment needed to continue the trial was not justified, as it was unlikely to provide results that would be sufficient to support elafibranor for registration in NASH in the United States and Europe.

~~Competition~~

We focus on therapeutic areas with high unmet medical needs, ~~i.e. areas~~ characterized by a lack of diagnostic or treatment ~~options. As a result,~~options, there are relatively few companies with approved products compared with other therapeutic or diagnostic areas where several options are already approved from a regulatory standpoint, and available for healthcare providers and patients.

We however operate in a competitive sector. Several companies are working on technologies, therapeutic targets or drug or biomarker candidates that aim to treat or diagnose the same diseases or identify the same patient population as our product candidates. While we believe that our drug candidates and diagnostic solutions, combined with our expertise and know-how, provide us with competitive advantages, we face potential competition from various sources, including pharmaceutical and biotechnology companies, as well as from academic institutions, governmental agencies and public and private research institutions. We anticipate that we will face intense and increasing competition as new drugs and therapies enter the market and advanced technologies become available.

~~Cholestatic Diseases~~ In some indications, off-label use of non-approved drugs can also be considered as competition.

•◦PBC

Only two drugs are approved in this indication. UDCA, ~~was~~ approved by the FDA to treat PBC in 1997, ~~and~~ remained the only approved treatment for PBC until 2016, when ~~Ocaliva™~~Ocaliva was approved by the FDA and ECEuropean Medicines Agency for the treatment of PBC in combination with UDCA in adults with an inadequate response to UDCA, or as monotherapy in adults unable to tolerate UDCA. Although approved as a second-line treatment, Ocaliva™ is the subject of continued safety concerns (with respect to pruritus and serious liver injury or death, leading to the FDA issuing a Black Box Warning in 2018). If approved, elafibranor would compete with these drugs already approved for the treatment of PBC.

The other molecule that could become a direct competitor of elafibranor is seladelpar, developed by the American company CymaBay, which announced at the ~~end~~readout of ~~March 2021 that it had commenced recruitment~~topline data for its ~~new~~ Phase 3 (RESPONSE) ~~trial. We know that~~trial early September 2023 and NDA submission mid-December 2023. In February 2024, Gilead announced the acquisition of CymaBay Therapeutics.

Other companies are developing other ~~companies develop other~~less advanced drug candidates ~~to treat PBC,~~ and ~~therefore~~ may also become competitors. The latest IQVIA study made available to the Company however indicates that these molecules are in relatively early stages of clinical development compared to elafibranor, and would capture together – if approved – less than 20% of market shares. This includedFor instance, Calliditas Therapeutics ~~which~~ announced ~~on February 15,~~in 2022 that the first patient was ~~randomized~~enrolled in its Phase 2b/3 TRANSFORM study evaluating setanaxib in patients with PBC. ~~In addition~~

◦ACLF

No drugs have been approved in this indication so far and the only therapeutic option currently available is liver transplantation. Some companies, such as Cellaïon, are investigating the potential of certain technologies, but given known challenges in the space, we believe those would likely become complementary to ~~these approved drugs and drug candidates in development, we also may compete with approved drugs in other indications which could be used off-label for the treatment of PBC.~~what GENFIT is developing rather than serve as direct competitors.

•◦CCA

~~There is a high unmet need in CCA patients without actionable alterations as current~~Current treatment options are limited to chemotherapy. The current pipeline of drugs in development includes anti-PD-(L)1 combinations, FGFR2 and PARP inhibitors. FGFR2 and PARP inhibitors are limited to patients with specific alterations, while the expectations from anti-PD-(L) to work in CCA are currently low. A combination of atezolizumab and cobimetinib (anti-PD-(L)1 and MEKi) is being evaluated but preliminary data do not show a major benefit.

•◦~~ACLF~~HAC in UCD and OA

~~There is also a high unmet need~~No drugs have been approved for HAC. However, Buphenyl and Ravicti are ammonia scavengers approved in ~~ACLF, a serious condition for which~~UCD in the ~~only therapeutic option is liver transplantation. There is therefore a strong need for~~U.S. and in the ~~development of a promising therapy~~US and Europe, respectively.

◦HE

Standard-of-care therapeutics include lactulose (with various brands) and rifaximin (Xifaxan approved in the U.S. and EU, and Rifxima approved in Japan), both oral treatments aiming to reduce ammonia. LOLA (Hepa-Merz approved in the ~~morbidity and mortality~~EU) is a third option, but not approved in ~~these patients, as well as to provide healthcare professionals with non-surgical therapeutic options. Some companies, such as Versantis or Promethera, are investigating~~ the ~~potential of certain technologies that may become complementary to what GENFIT is developing, rather than direct competitors.~~U.S.

•◦~~NASH~~MASH Diagnostics

~~With respect to NIS4, our technology that uses~~No blood-based ~~biomarkers~~diagnostic solution is approved to identify ~~patients with NASH~~"at-risk" MASH.

◦At-home ammonia monitoring

The international state of the art of ammonia quantification in blood is enzymatic assays that are implemented in extremely costly large automatic analyzer machines usually only available at central or hospital clinical laboratories. Considering that ammonia blood samples should be collected on ice and ~~fibrosis who we believe could benefit from therapeutic intervention, there are a number of clinical diagnostic tools available for~~analyzed within the management of chronic liver disease patients, but none are validated for NASH. In November 2021, NIS4 technology’s utility was recognized in a Stage 1 study undertaken by NIMBLE as demonstrating a unique performance in identifying patients with “at-risk” NASH. The report highlightedhour, these limitations may delay the ~~importance for~~results and may add uncertainties to the diagnosis of ~~“at risk” NASH patients (defined as NASH + NAS ≥4~~HE.

These main limitations of the current gold standard can be resolved with a reliable point of care device at the patients' bedside. The current point of care device commercially available (Arkray’s PocketChem BA analyzer) is however limited by its narrow quantification range (7-286 µmol/L), its interference issues and ~~fibrosis ≥2) as~~its underestimation of ammonia levels in comparison to enzymatic assays.

Therefore, the need of a ~~subpopulation at greater risk~~fast, accurate, and precise point of liver-related outcomes, and of all blood-based biomarkers which were assessed in this study (FIB4, ALT, OWL, NIS4, ELF, PROC3, FM-VCTE), only NIS4 technology produced results showing the capacity to identify these “at-risk” NASH patients.care device has not yet been achieved satisfactorily.

◦Other considerations

We believe that elafibranor’s differentiated mechanism of action in targeting PPARα and PPARδ, and the favorable tolerability profile observed to date suggest the potential for elafibranor to have competitive advantages over approved drugs and drug candidates in development by our competitors. NTZ also provided encouraging preclinical data.

~~However, many~~Many of our competitors, either alone or with their strategic collaborators, have substantially greater financial, technical and human resources than we do. Accordingly, our competitors may be more successful than we are in obtaining approval for their drug candidates and achieving widespread market acceptance and may render our drug candidates, such as elafibranor, obsolete or non-competitive. Mergers and acquisitions in the biotechnology and pharmaceutical industries may result in even more resources being concentrated among a smaller number of our competitors. These competitors also compete with us in recruiting and retaining qualified scientific and management personnel and establishing clinical study sites and patient registration for clinical studies, as well as in acquiring technologies complementary to, or necessary for, our programs.

We anticipate that we will face intense and increasing competition as new drugs and therapies enter the market and advanced technologies become available. We expect any drugs that we develop and commercialize to compete on the basis of, among other things, efficacy, safety, delivery, price and the availability of reimbursement from government and other third-party payors.

Our commercial opportunity could be reduced or eliminated if our competitors develop and commercialize drugs that are safer, more effective, have fewer or less severe side effects, are more convenient or are less expensive or better reimbursed than any drugs that we may commercialize. Our competitors also may obtain FDA, EMA or other regulatory approval for their drugs more rapidly than we may obtain approval for ours, which could result in our competitors establishing a strong market position for either the product or a specific indication before we are able to enter the market.

~~The same considerations apply in the NASH diagnostic field.~~

–Manufacturing and Supply

We do not have any manufacturing facilities or personnel. We currently rely, and expect to continue to rely, on third parties for the manufacturing of our drug candidates for preclinical and clinical testing, as well as for commercial manufacturing if our drug candidates receive marketing approval.

With respect to our lead drug candidate, elafibranor, ~~we use one supplier for the~~our remaining active ingredient and ~~another manufacturer for the~~ therapeutic units ~~used in our~~stocks were sold to Ipsen to meet their short term clinical trials. Although we could use a substitute company in the event of failure or breach of these two manufacturers, we may face challenges in finding new suppliers within an acceptable timeframe or under commercially reasonable conditions. To mitigate this risk, we have performed an evaluation of the expectedneeds. Ipsen is responsible for managing its clinical and commercial needs for elafibranor manufacturing delays and costs in the event of a disaster at the supplier of the active ingredient or at the manufacturer of therapeutic units. Based on the results of this evaluation, we believe that given the current inventory and drugs in production at various levels of the production chain, which is sufficient to supply our ongoing clinical trials, the short-term failure of one of these manufacturers would not be critical.directly.

Pursuant to our agreement with Genoscience Pharma, Genoscience Pharma will supply our clinical and commercial requirements for GNS561.

NTZ is already approved and commercialized in several jurisdictions in various indications and we therefore ~~purchase~~purchased our supply of NTZ for clinical purposes in the market through pharmaceutical wholesalers. A new formulation of NTZ to be used for our upcoming clinical trials is in development. We will use one supplier for the active substance NTZ and another CDMO for the manufacture of the therapeutic units.

VS-01 contains citric acid anhydrous as active ingredient for which a supply agreement covering clinical trials is in place with a third party GMP supplier. VS-01 is a kit containing three intermediate products, supplied by different GMP suppliers, each responsible for the production of VS-01 lipid blend, citric acid solution, liposomal aqueous suspension, xylitol alkaline solution and the kitting activities. The supply of VS-01 kits to clinical sites is managed by an external supplier in accordance with the GDP. The kits are to be reconstituted at the pharmacy hospital based on the instructions provided in the pharmacy manual and prior administration to patients.

With respect to our ~~NIS4~~NIS4® technology, we have entered into two license agreements with Labcorp to further develop and manufacture a test using ~~NIS4~~NIS4® technology for clinical research as well as to allow them to develop and commercialize an LDT named NASHNext® and powered by our ~~NIS4~~NIS4® technology in routine clinical care in the USU.S. and ~~Canada, respectively.~~Canada.

x. Intellectual Property

Our intellectual property is critical to our business, which we strive to protect by obtaining and maintaining patent protection in territories throughout the world for our drug and biomarker candidates, innovative methods and tools, production methods and other inventions that are important to our business. We also rely on trade secrets to protect aspects of our business that are not amenable to, or that we do not consider appropriate for, patent protection.

Our commercial success depends in part upon obtaining and maintaining patent protection and trade secret protection of our current and future drug and biomarker candidates and the methods used to develop and manufacture them, as well as successfully defending these patents against third-party challenges. Our ability to stop third parties from making, using, selling, offering for sale in the United Sates or importing into the United States, our products depends on the extent to which we have rights under valid and enforceable patents or trade secrets that cover these activities. We cannot guarantee that patents will be granted with respect to any of our pending patent applications or with respect to any patent applications filed by us in the future, nor can we guarantee that any of our existing patents or any patents that may be granted to us in the future will be commercially useful in protecting our drug and biomarker candidates, discovery programs and processes from competitors. Furthermore, our patents may be challenged, circumvented, or invalidated by third parties. Because patent applications in the United States and certain other jurisdictions are maintained in secrecy for 18 months or potentially even longer, and since publication of discoveries in the scientific or patent literature often lags behind actual discoveries, we cannot be certain of the priority of inventions covered by our pending patent applications. For this and more comprehensive risks related to our intellectual property, please see “Item 3D - "Risk Factors—Risks Relating to Our Intellectual Property”.”

We monitor our competitors and seek to challenge patent infringements when such infringements would negatively impact our business. We also seek to challenge validity of our competitors’ patents when we think that these patents do not fulfill patentability or validity requirements.

–Patents

As of March 31, ~~2022,~~2024, we own ~~or have rights to 43~~49 issued U.S. patents, over ~~440~~500 issued foreign patents in force, ~~and 24~~32 pending U.S. applications, and over ~~319~~324 pending foreign patent applications. Our patent portfolio contains 6073 different patent families, which are made up of over ~~760~~824 patents and patents applications. ~~Twenty-two~~Twenty-five of our patent families relate to our lead product candidate, elafibranor. Following the acquisition of Versantis AG, three patent families (including three U.S. patent applications and two issued U.S. patents) were integrated into our patent portfolio.

•Elafibranor

Our patent portfolio for elafibranor, a molecule synthesized by us, includes issued patents and pending patent applications directed to compositions of matter, manufacturing methods, and methods of use. As of March 31, ~~2022,~~2024, we own ~~three~~one U.S. ~~patents~~patent directed to the composition of matter of elafibranor, which ~~are expected to~~will expire in September 2024 without any significant impact on the monopoly of elafibranor in the treatment of PBC, protected in several later patents, without taking patent term extensions into account. We also have counterpart patents in various countries and regions, including Australia, Brazil, Canada, China, Europe, Israel and Japan.

In addition, we own ~~six~~four U.S. granted patents and ten U.S. patent applications (some of them derivable from PCT applications) directed to the treatment of cholestatic diseases, in particular PBC, which, if issued, are expected to expire infrom 2037 ~~and~~to 2041, without taking patent term extensions into account. We also have counterpart pending patent applications in various countries or regions, including Australia, Canada, Europe, Israel, China, and Japan.

In addition, we own two U.S. patents directed to the method of preparing elafibranor, which are expected to expire in 2024 without any significant impact for the business of elafibranor, and 2031. We also have counterpart patents granted in various countries and regions, including Canada, China, Europe, and Israel.

In addition to these patents and pending applications, we are also pursuing additional patents directed to specific forms of elafibranor, and combinations with other pharmaceutical compounds.

~~Repurposing of molecules~~We also filed in 2023 three new priority patent applications on elafibranor for treating PBC, thus reinforcing and further protecting our lead product.

All the U.S. patent applications and patents are under license to IPSEN.

•ACLF franchise

We are ~~pursuing~~further developing patent protection directed to our repositioning of nitazoxanide for treating ACLF/sepsis. As of March 31, 2024, two U.S. patent applications are pending. These patent applications, if granted, would be expected to expire in 2041 and 2042 (excluding any patent term extension). In addition, we maintain protection directed to nitazoxanide for treating cholestatic and fibrotic diseases. As of March 31, ~~2022,~~2024, six U.S. patents have been granted ~~to us~~ for the use of NTZ in the treatment of different fibrotic ~~diseases and one~~diseases. Three U.S. ~~patent application is pending. One U.S. patent has~~patents have been granted for combination of NTZ with other therapeutic agents in the treatment of different fibrotic diseases ~~and one other U.S. patent application is pending in this family.~~. These patents and patent applications, if granted, would be expected to expire infrom 2037 to 2038 (excluding any patent term extension).

We also filed in ~~2021 four priority~~2023 one international patent ~~applications~~application for the use of nitazoxanide ~~and some other proprietary molecules~~ in the treatment of ACLF / ~~sepsis.~~

~~Diagnostic Tools and Biomarkers~~sepsis, reinforcing our patent portfolio on this compound.

As of March 31, ~~2022,~~2024, we also own ~~five~~two U.S. patent applications directed to proprietary compounds for treating ACLF/sepsis. These patent applications, if granted, would be expected to expire in 2042 (excluding any patent term extension). We also filed in 2023 one international patent application for the use of other compounds in the treatment of ACLF/sepsis.

Acquisition of VERSANTIS has allowed us to reinforce our patent portfolio for the treatment of ACLF. As of March 31, 2023, we own three U.S. granted patents and one U.S. patent application (some of them derivable from PCT applications) directed to VS-01 for the treatment of ACLF. These patent applications, if granted, would be expected to expire from 2033 to 2036 (excluding any patent term extension).

We also filed in 2023 one international patent application for the use of VS-01 in the treatment of UCD (Urea Cycle Disorder) reinforcing our patent portfolio on this compound.

We also own one U.S. patent application directed to VS-02 in the treatment of UCD or Hepatic Encephalopathy.

•Diagnostic Franchise

As of March 31, 2024, we own nine U.S. patent applications and one U.S. granted patent directed to the diagnosis of ~~NASH,~~MASH, in particular our ~~NIS4~~NIS2+® and NIS4® diagnostic technology, using certain biomarkers. The U.S. applications, if issued, would be expected to expire between 2036 and 2041.

We also have filed several US patent applications covering some other ~~NIS4~~ diagnostic tools and protecting some other research tools. We filed in 2023 an international patent application and four priority patent applications to reinforce our protection on this diagnostic technology.

As of March 31, 2024, we also own one U.S. patent applications and one U.S. granted patent directed to the diagnosis of MASH, using other biomarkers. The U.S. applications, if issued, would be expected to expire from 2038 to 2040. We also filed in 2023 two international patent applications on methods and devices for the diagnosis of advanced liver fibrosis or liver cirrhosis.

•In-licensed compounds

The licensing agreements signed in 2023 have reinforced our leadership position in the treatment of ACLF, with the intellectual property rights attached to the candidate drugs SRT-015 and CLM-022. The licensing agreements have also reinforced our intellectual property rights of the diagnostic franchise with TS-01 and in oncology with GNS561.

As of March 31, 2024, two U.S. patent applications and one U.S. granted patent are directed to SRT-015. The U.S. applications, if issued, would be expected to expire from 2038 and 2044. An international patent application was also filed in 2023 for CLM-022 in relation with the treatment of ACLF.

As of March 31, 2024, three U.S. patent applications and one U.S. granted patent are directed to TS-01, a diagnostic device for hyperammonemia. The U.S. applications, if issued, would be expected to expire from 2037 to 2038.

One U.S. patent application has been filed in relation with GNS561. This U.S. application, if issued, would be expected to expire in 2035. One international patent application and one priority patent application were also filed in 2023 to further develop the protection on this compound.

•Patent Term Extension (PTE)

In the United States, the term of a patent covering an FDA-approved drug may be eligible for a patent term extension, or PTE, under the Hatch-Waxman Act as compensation for the reduction of patent monopoly time during the FDA regulatory review process. This extended coverage period, PTE, can only be obtained provided we apply for and receive a marketing authorization for a product. The period of extension may be up to five years beyond the normal expiration of the patent, but cannot extend the remaining term of a patent beyond a total of 14 years from the date of product approval. Only one patent among those eligible for an extension may be extended. In Europe, Supplementary Protection Certificates, or SPCs, may also be available to patents, which would be available by application to the member states. However, there is no guarantee that the applicable authorities, including the FDA, will agree with our assessment of whether such extensions should be granted, and even if granted, the length of such extensions. We will use the procedures established to compensate regulatory delays via Patent Term Extension in the USU.S. and via Supplementary Protection Certificates in the EU as soon as Health authorities grant NDA in the USU.S. or MA in the EU for our products.

•Trademarks

Our candidate products are protected and will be sold around the world under trademarks that we consider to be of material importance.

Our trademarks will help to identify our products and services and will protect the sustainability of our growth.

It is our policy to file and protect our trademarks with a strategy adapted to each product or service, depending on the countries where the product will be commercialized or where the service will be proposed. Basically our trademarks are protected worldwide for our products and services.

We own ~~close to 500~~more than 530 registered or filed trademarks worldwide.

The protection offered by trademark varies country by country. In most of the countries, trademark right may only be obtained through the filing and registration of a trademark application at the corresponding Patent and Trademark Office. Registrations are granted for a fixed term (usually ten years) and can be renewed indefinitely, except in certain countries where use of the trademark needs to be demonstrated at renewal time.

In most of the countries, protection of the trademark applies to the products and services designated in the registration certificate.

We monitor our trademarks and defend them against competing trademarks by filing oppositions, observations when appropriate. Similarly, we may enter into coexistence agreement when a third party owns a potentially conflicting or confusing trademark with some of our products or services.

It is also our policy to defend our trademarks against infringement, counterfeiting and/or unfair competition.

•Domain names

It is our policy to file domain names for communicating or giving information on our products or services to patients, prescribers or payers. We own today ~~more than 210~~close to 170 domain names.

•Know-How and Trade Secrets

In addition to patent protection, we also rely on trade secret protection of our proprietary information that is not amenable to, or that we do not consider appropriate for, patent protection. However, trade secrets can be difficult to protect. Although we take steps to protect our proprietary information, including restricting access to our premises (we seek to preserve the integrity and confidentiality of our data, trade secrets and know-how by maintaining physical security of our premises and physical and electronic security of our information technology systems) and our confidential information, as well as entering into agreements with our employees, consultants, advisors, and potential collaborators, that prohibit the disclosure of confidential information, and require disclosure and assignment to us of ideas, developments, discoveries and inventions important to our business.

xi. Government Regulation

Our drug candidates must be approved by the FDA through the NDA process before they may be legally marketed in the United States and by the European Commission following a positive opinion provided by the EMA through the MAA process for a drug falling within the scope of the Centralized procedure before they may be legally marketed in the European Economic Area or by aone of the procedures administered by the national Competent ~~Authority through other MAA processes~~Authorities of EEA countries (National Procedure, Mutual Recognition or Decentralized procedure) before they may be legally marketed in the ~~European Union.~~ respective country/countries.

Our drug candidates will be subject to similar requirements in other countries prior to marketing in those countries. The process of obtaining regulatory approvals and the compliance with applicable federal, state, local and foreign statutes and regulations require the expenditure of substantial time and financial resources.

–United States Government Regulation

In the United States, the FDA regulates drugs under the Federal Food, Drug, and Cosmetic Act, or the FDCA, and its implementing regulations. The process of obtaining regulatory approvals and compliance with ~~appropriate~~applicable federal, state, local and foreign statutes and regulations requires the expenditure of substantial time and financial resources. Failure to comply with the applicable ~~U.S.~~legal requirements at any time during the drug development process, approval process or ~~after~~post approval may subject an applicant and/or sponsor to a variety of administrative or ~~judicial sanctions,~~other enforcement proceedings, including imposition of a clinical hold, refusal by the FDA to approve applications, withdrawal of an approval, import/export delays, issuance of warning letters and other types of enforcement ~~letters,~~actions, product recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines, refusals of government contracts, restitution, disgorgement of profits, or civil or criminal investigations and ~~penalties brought~~penalties. These actions may be instituted or prosecuted by a variety of governmental entities, such as the FDA, ~~and~~ the U.S. Department of Justice, state attorneys general or ~~other~~ governmental ~~entities.~~entities and, in certain cases, by private parties.

The clinical testing, manufacturing, labeling, storage, distribution, record keeping, advertising, promotion, import, export and marketing, among other things, of our drug candidates are governed by extensive regulation by governmental authorities in the United States and other countries. ~~The FDA, under the FDCA, regulates pharmaceutical products in the United States.~~ The steps required before a drug may be approved for marketing in the United States generally include:

•completion of preclinical laboratory tests, animal studies and formulation studies in compliance with the FDA’s good laboratory practice, or GLP, regulations;

•the submission to the FDA of an IND application for human clinical testing, which must become effective before human clinical trials commence;

•approval by anone or more independent institutional review ~~board,~~boards, or ~~IRB, representing~~IRBs, or ethics committees covering each clinical site before each clinical trial may be initiated;

•performance of adequate and well-controlled human clinical trials to establish the safety and efficacy of the drug for each indication and conducted in accordance with good clinical practices, or ~~GCP;~~GCPs;

•preparation and submission to the FDA of an NDA;

•FDA acceptance, review and approval of the NDA, which might include an Advisory Committee review;

•satisfactory completion of an FDA inspection of the manufacturing facilities at which the drug, or components thereof, are made to assess compliance with current good manufacturing practices, or cGMPs;

•satisfactory completion of FDA audits of clinical trial sites to assure compliance with GCPs and the integrity of the clinical data; and

•agreement for compliance with any post-approval requirements, including Risk Evaluation and Mitigation Strategies, or REMS, and post-approval studies required by the FDA.

The testing and approval process requires substantial time, effort and financial resources, and the receipt and timing of any approval is uncertain. The FDA may suspend clinical trials at any time on various grounds, including a finding that the subjects or patients are being exposed to an unacceptable health risk.

Preclinical and Human Clinical Trials in Support of an NDA

Preclinical studies include laboratory evaluations of the drug candidate, as well as in vitro and animal studies to assess the potential safety and efficacy of the drug candidate. The conduct of preclinical studies is subject to federal regulations and requirements including GLP regulations. The results of the preclinical studies, together with manufacturing information and analytical data, among other things, are submitted to the FDA as part of the IND, which must become effective before human clinical trials may commence. The IND will become effective automatically 30 days after receipt by the FDA, unless the FDA raises concerns or questions about the conduct of the trials as outlined in the IND prior to that time and places a clinical hold on the IND. In this case, the IND sponsor and the FDA must resolve any outstanding concerns before clinical trials can proceed. The FDA may nevertheless initiate a clinical hold after the 30 days if, for example, significant public health risks arise.

Clinical trials involve the administration of the drug candidate to human subjects under the supervision of qualified investigators in accordance with GCP requirements, which include the requirement that all research subjects provide their informed consent in writing for their participation in any clinical trial. Clinical trials are conducted under protocols detailing, among other things, the objectives of the trial, the parameters to be used in monitoring safety, and the effectiveness criteria to be evaluated. A protocol for each clinical trial and any subsequent protocol amendments must be submitted to the FDA as part of the

IND. Each clinical trial must be reviewed and approved by ~~an IRB at each of~~one or more IRBs or Ethics Committees covering the sites at which the trial will be conducted. The IRB or Ethics Committee will consider, among other things, ethical factors, the safety of human subjects and the possible liability of the institution.

Clinical trials are typically conducted in three sequential phases prior to approval, but the phases may overlap or be combined. These phases generally include the following:

•Phase 1. Phase 1 clinical trials represent the initial introduction of a drug candidate into human subjects, frequently healthy volunteers. In Phase 1, the drug candidate is usually tested for safety, including adverse effects, dosage tolerance, absorption, distribution, metabolism, excretion and pharmacodynamics.

•Phase 2. Phase 2 clinical trials usually involve studies in a limited patient population to (1) evaluate the efficacy of the drug candidate for specific indications, (2) determine dosage tolerance and optimal dosage and (3) identify possible adverse effects and safety risks.

•Phase 3. If a drug candidate is found to be potentially effective and to have an acceptable safety profile in Phase 2 clinical trials, the clinical trial program will be expanded to Phase 3 clinical trials to further demonstrate clinical efficacy, optimal dosage and safety within an expanded patient population at geographically dispersed clinical trial sites.

Post-approval trials, sometimes referred to as Phase 4 clinical trials, may be conducted after approval to gain additional experience from the treatment of patients in the intended therapeutic indication and to document a clinical benefit in the case of drugs approved under accelerated approval regulations, or when otherwise requested or required by the FDA in the form of post-market requirements or commitments. Failure to promptly conduct any required Phase 4 clinical trials could result in enforcement action or withdrawal of approval. Companies that conduct certain clinical trials are also ~~are~~ required to register them and post the results of completed clinical trials on a government-sponsored database, such as ClinicalTrials.gov in the United States, within certain timeframes. Failure to do so can result in fines, adverse publicity and civil and criminal sanctions.

Submission and Review of an NDA

The results of preclinical studies and clinical trials, together with detailed information on the drug’s manufacture, composition, quality, controls and proposed labeling, among other things, are submitted to the FDA in the form of an NDA, requesting approval to market the drug for one or more indications. The application must be accompanied by a significant user fee payment, which typically increases annually, although waivers may be granted in limited cases. The FDA conducts a preliminary review of all NDAs within the first 60 days after submission, before accepting them for filing, to determine whether they are sufficiently complete to permit substantive review. The FDA may request additional information rather than accept an NDA for filing. In this event, the application must be resubmitted with the additional information. The resubmitted application is also subject to review before the FDA accepts it for filing. The FDA has substantial discretion in the approval process and may refuse to file or approve any application or decide that the data is insufficient for approval and require additional preclinical, clinical or other studies.

Once an NDA has been accepted for filing, the FDA sets a user fee goal date that informs the applicant of the specific date by which the FDA intends to complete its review. This goal date is typically 10 months from the date that the FDA accepts the filing. The review process can be extended by FDA requests for additional information or clarification. The FDA reviews NDAs to determine, among other things, whether the proposed drug is safe and effective for its intended use, and whether the drug is being manufactured in accordance with cGMPs to assure and preserve the drug’s identity, strength, quality and purity. Before approving an NDA, the FDA typically will inspect the facilities at which the drug is manufactured and will not approve the drug unless the manufacturing facilities comply with cGMPs. Additionally, the FDA will typically inspect one or more clinical trial sites for compliance with GCP and integrity of the data supporting safety and efficacy.

During the approval process, the FDA also will determine whether a REMS is necessary to assure the safe use of the drug. REMS can include medication guides, communication plans for healthcare professionals, and elements to assure safe use, or ETASU. ETASU can include, but are not limited to, special training or certification for prescribing or dispensing, dispensing only under certain circumstances, special monitoring and the use of patient registries. If the FDA concludes a REMS is needed, the sponsor of the application must submit a proposed REMS, and the FDA will not approve the application without an approved REMS, if required. A REMS can substantially increase the costs of obtaining approval. The FDA may also convene an advisory committee of external experts to provide input on certain review issues relating to risk, benefit and interpretation of clinical trial data. The FDA may delay approval of an NDA if applicable regulatory criteria are not satisfied and/or the FDA requires additional testing or information.

On the basis of the FDA’s evaluation of the NDA and accompanying information, including the results of the inspection of the manufacturing facilities and clinical trial sites, the FDA will issue either an approval of the NDA or a Complete Response Letter, detailing the deficiencies in the submission and the additional testing or information required for reconsideration of the application. Even with submission of this additional information, the FDA may ultimately decide that the application does not satisfy the regulatory criteria for approval.

If the FDA approves a new drug, it may limit the approved indications for use of the drug. It may also require that contraindications, warnings or precautions be included in the drug labeling, such as a special warning, known as a boxed warning, to highlight a particular safety risk. In addition, the FDA may call for post-approval studies, including Phase 4 clinical trials, to further assess the drug’s safety after approval. The agency may also require testing and surveillance programs to monitor the drug after commercialization, or impose other conditions, including distribution restrictions or other risk management mechanisms, including REMS, to help ensure that the benefits of the drug outweigh the potential risks. The FDA may prevent or limit further marketing of a drug based on the results of post-market studies or surveillance programs.

After approval, many types of changes to the approved drug, such as adding new indications, manufacturing changes and additional labeling claims, are subject to further testing requirements and FDA review and approval.

Fast Track, Breakthrough Therapy and ~~Breakthrough~~Priority Review Designations

The FDA is authorized to designate certain drugs for ~~expedited~~ programs intended to facilitate and expedite development and review if they are intended to address an unmet medical need in the treatment of a serious or life-threatening disease or condition. These programs are fast track designation, breakthrough therapy designation and priority review designation.

~~The~~Fast track designation may be granted by the FDA ~~may designate~~to a drug ~~for fast track designation~~ if it is intended, whether alone or in combination with one or more other drugs, for the treatment of a serious or life-threatening disease or condition, and ~~it demonstrates~~nonclinical or clinical date demonstrate the potential to address unmet medical ~~needs~~need for such a disease or condition. For fast track designated drugs, sponsors may have a higher number of interactions with the FDA. In addition, the FDA may review sections of the NDA for a fast track designated drug on a rolling basis before the complete application is submitted. Fast track designation may be rescinded if the qualifying criteria are no longer met.

~~The~~Breakthrough therapy designation may be granted by the FDA ~~may designate~~to a drug ~~for breakthrough designation if the drug is~~ intended to treat a serious or life-threatening disease or condition and ~~that~~ preliminary clinical evidence indicates that the drug may demonstrate substantial improvement on a clinically significant endpoint(s) over available therapies. The ~~feature~~features of this program ~~allows~~provide the same advantages of the fast track designation, but also intensive FDA guidance to promote efficient development and FDA organizational commitment. Breakthrough therapy designation may be rescinded if the qualifying criteria are no longer met.

Priority review designation may be granted by the FDA to an application (original or efficacy supplement) for a drug that treats a serious condition and, if approved, would provide a significant improvement in safety or effectiveness, among other qualifying criteria. Priority review provides a shorter clock for review of marketing application (i.e. six months compared with the 10-month standard review) following acceptance of the NDA.

Accelerated Approval Pathway

The FDA may grant accelerated approval, under Subpart H of 21 CFR Part 314, to a drug for a serious or life-threatening condition that provides meaningful ~~therapeutic~~ advantage to patients over ~~existing treatments~~available therapies based upon a determination that the drug ~~has~~demonstrates an effect on a surrogate endpoint that is reasonably likely to predict clinical benefit. The FDA may also grant accelerated approval for such a disease or condition when the drug ~~has~~demonstrates an effect on an intermediate clinical endpoint that can be measured earlier than an effect on irreversible morbidity or mortality, or IMM, ~~and~~ that is reasonably likely to predict an effect on IMM or other clinical benefit, taking into account the severity, rarity or prevalence of the condition and the availability or lack of alternative treatments. Drugs granted accelerated approval must meet the same statutory standards for safety and effectiveness as those granted traditional approval.

For the purposes of accelerated approval, a surrogate endpoint is a marker, such as a laboratory measurement, radiographic image, physical sign or other measure that is thought to predict clinical benefit, but is not itself a measure of clinical benefit. Surrogate endpoints can often be measured more easily or more rapidly than clinical endpoints. An intermediate clinical endpoint is a measurement of a therapeutic effect that is considered reasonably likely to predict the ~~clinical benefit of a drug, such as an~~drug's effect on ~~IMM.~~IMM or other clinical benefit. The FDA has ~~limited experience with accelerated approvals based on intermediate clinical endpoints, but has indicated~~stated its belief that such endpoints generally may support accelerated approval where the therapeutic effect measured by the endpoint is not itself a clinical benefit and basis for traditional approval, if there is a basis for concluding that the therapeutic effect is reasonably likely to predict the ultimate clinical benefit of a drug.

The accelerated approval pathway ~~is most often~~has been primarily used ~~in settings in which~~where the course of a disease is long and an extended period of time is required to measure the intended clinical benefit of a drug, even if the effect on the surrogate or intermediate clinical endpoint occurs rapidly. Thus, accelerated approval has been used extensively in the development and approval of drugs for treatment of a variety of cancers in which the goal of therapy is generally to improve survival or decrease morbidity and the duration of the typical disease course requires lengthy and sometimes large trials to demonstrate a clinical or survival benefit. The benefit of accelerated approval derives from the potential to receive approval based on surrogate endpoints sooner than possible for trials with clinical or survival endpoints, rather than deriving from any explicit shortening of the FDA approval timeline, as is the case with priority review.

The accelerated approval pathway is usually contingent on a sponsor’s agreement to conduct, in a diligent manner, confirmatory studies to verify and describe the drug’s clinical ~~benefit. As~~benefit, the design of which must be agreed upon with the FDA prior to approval. No later than the date of the accelerated approval, the FDA must specify the conditions for a ~~result, a~~post-approval trial or trials required to be conducted with respect to the drug, ~~candidate approved on this basis is subject to rigorous post-marketing compliance requirements,~~which may include enrollment targets, the trial protocol and milestones, including the ~~completion~~target date of ~~Phase 4 or~~trial completion. Sponsors must submit progress reports on required post-approval ~~clinical~~ trials ~~to confirm the effect on the clinical endpoint.~~every six months. Failure to conduct required post-approval studies, or confirm a clinical benefit during post-marketing studies, would allow the FDA to initiate expedited proceedings to withdraw approval of the drug. All promotional materials for drug candidates approved under accelerated regulations are subject to prior review by the FDA.

Post-Approval Requirements

In ~~additional~~addition to the post-approval requirements specific to an accelerated approval pathway, ~~there are~~ other post-approval requirements ~~whatever~~apply regardless of the registration pathway.

Approved drugs that are manufactured or distributed in the United States pursuant to FDA approvals are subject to pervasive and continuing regulation by the FDA, including, among other things, requirements relating to recordkeeping, periodic reporting, drug sampling and distribution, advertising and promotion and reporting of adverse experiences with the drug. After approval, most changes to the approved drug, such as adding new indications or other labeling claims and some manufacturing and supplier changes are subject to prior FDA review and approval. There also are continuing, annual program user fee requirements for marketed drugs, as well as new application fees for certain supplemental applications.

The FDA may impose a number of post-approval requirements as a condition of approval of an NDA. For example, the FDA may require post-marketing testing, including Phase 4 clinical trials, and surveillance programs to further assess and monitor the drug’s safety and effectiveness after commercialization. The FDA may also require a REMS, which could involve requirements for, among other things, medication guides, special trainings for prescribers and dispensers, patient registries, and elements to assure safe use.

In addition, entities involved in the manufacture and distribution of approved drugs are required to register their establishments with the FDA and state agencies, and are subject to periodic unannounced inspections by the FDA and these state agencies for compliance with cGMP requirements. The FDA has promulgated specific requirements for drug cGMPs. Changes to the manufacturing process are strictly regulated and often require prior FDA approval before being implemented. FDA regulations also require investigation and correction of any deviations from cGMP requirements and impose reporting and documentation requirements upon the sponsor and any third-party manufacturers that the sponsor may decide to use. Accordingly, manufacturers must continue to expend time, money, and effort in the area of production and quality control to maintain cGMP compliance.

~~Once an approval is granted, the~~The FDA may issue enforcement letters or withdraw the approval if compliance with regulatory requirements and standards is not maintained or if problems occur after the drug reaches the market. Corrective action could delay drug distribution and require significant time and financial expenditures. Later discovery of previously unknown problems with a drug, including adverse events or AEs of unanticipated severity or frequency, or with manufacturing processes, or failure to comply with regulatory requirements, may result in revisions to the approved labeling to add new safety information; imposition of post-market studies or clinical trials to assess new safety risks; or imposition of distribution or other restrictions under a REMS program. Other potential consequences include, among other things:

•restrictions on the marketing or manufacturing of the drug, suspension of the approval, complete withdrawal of the drug from the market or product recalls;

•fines, warning letters or holds on post-approval clinical trials;

•refusal of the FDA to approve applications or supplements to approved applications, or suspension or revocation of drug approvals;

•drug seizure or detention, or refusal to permit the import or export of drugs; or

•injunctions or the imposition of civil or criminal penalties.

The FDA strictly regulates marketing, labeling, advertising and promotion of drugs that are placed on the market. Drugs may be promoted only for the approved indications and in ~~accordance~~a manner consistent with the ~~provisions of the~~final approved label. The FDA and other agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses, and a company that is found to have improperly promoted off-label uses may be subject to significant liability, including investigation by federal and state authorities. However, physicians may, in their independent medical judgment, prescribe legally available products for off-label uses. The FDA does not regulate the practice of medicine and the behavior of physicians in their choice of treatments but the FDA does restrict manufacturer’s promotional communications on the subject of off-label use of their products.

Section 505(b)(2) NDAs

As an alternative path to FDA approval for modifications to formulations or uses of drugs previously approved by the FDA, an applicant may submit an NDA as described under Section 505(b)(2) of the FDCA. ~~Section~~A 505(b)(2) ~~was enacted as part~~application is submitted under section 505(b)(1) of the ~~Hatch-~~

~~Waxman Amendments.~~FDCA and approved under section 505(c). The 505(b)(2) pathway allows for flexibility in the characteristics of the proposed product without having to conduct studies on what is already known about the product. A ~~Section~~ 505(b)(2) ~~NDA~~ is an application that contains full reports of investigations of safety and effectiveness, but where at least some of the information required for approval comes from studies not conducted by or for the applicant and for which the applicant has not obtained a right of ~~reference or use from the person by or~~reference. A 505(b)(2) application may rely on, for ~~whom the investigations were conducted. This type of application permits reliance for such approvals on~~example, published literature or ~~on an FDA~~FDA's finding of safety, effectiveness or both for an approved drug product. ~~As such, under Section 505(b)(2), the FDA may rely, for approval of an NDA, on data not developed by the applicant.~~ The FDA may ~~also~~ require ~~companies~~505(b)(2) applicants to perform additional studies or measurements, including clinical trials, to support ~~the change~~changes from the approved ~~branded~~ reference drug.

US Pediatric Studies and Exclusivity

The Pediatric Research Equity Act of 2003 (“PREA”) requires all applications (or supplements thereto) submitted under section 505 of the FDCA (i.e., NDA, 505(b)(2), or supplement to the same) for a new active ingredient, new indication, new dosage form, new dosing regimen or new route of administration to contain a pediatric assessment unless the applicant has obtained a waiver or deferral. It authorizes the FDA to require holders of approved NDAs for marketed drugs to conduct pediatric studies under certain circumstances. The required clinical assessment must evaluate the safety and effectiveness of the product for the claimed indications in all relevant pediatric subpopulations and support dosing and administration for each pediatric subpopulation for which the product is safe and effective. The sponsor or FDA may request a deferral of required pediatric clinical trials for some or all of the pediatric subpopulations. A deferral may be granted for several reasons, including a finding that the drug is ready for approval for use in adults before pediatric clinical trials are complete or that additional safety or effectiveness data needs to be collected before the pediatric clinical trials begin. The FDA must send a non-compliance letter to any sponsor that fails to submit the required assessment, keep a deferral current or fails to submit a request for approval of a pediatric formulation. The PREA pediatric studies requirement do not apply to certain drugs with orphan drug designation.

In addition, the Best Pharmaceuticals for Children Act (“BPCA”), provides NDA holders a six-month extension of any eligible exclusivity—patent or nonpatent—for a drug, if a sponsor conducts clinical trials in children in response to a written request from the FDA. The issuance of a written request does not require the sponsor to undertake the described clinical trials. If the sponsor does undertake the clinical trials and submits pediatric data that fairly respond to the written request, the FDA may ~~then approve~~grant six-months exclusivity. The data do not need to show the ~~new~~ product ~~candidate for~~to be effective in the ~~new indication sought by the 505(b)(2) applicant.~~pediatric population studied. The six-month exclusivity attaches to all existing, eligible exclusivity and patents.

Orphan Drug Designation

Under the Orphan Drug Act, the FDA may grant orphan designation to a drug intended to treat a rare disease or condition, which is a disease or condition that affects fewer than 200,000 individuals in the United States or, if it affects more than 200,000 individuals in the United States, there is no reasonable expectation that the cost of developing and making a drug product available in the United States for this type of disease or condition will be recovered from sales of the product. Orphan drug designation must be requested before submitting ~~an NDA.~~a marketing application for the drug for the orphan use. After the FDA grants orphan designation, the FDA publicly discloses the identity of the therapeutic agent and its potential orphan ~~use are disclosed publicly by the FDA.~~use. The designation of such drug entitles a party to financial incentives such as opportunities for grant funding towards clinical trial costs, tax advantages and user-fee waivers. Orphan drug designation does not convey any advantage in or shorten the duration of the regulatory review and approval process.

If a product that has orphan drug designation subsequently receives the first FDA approval of the drug for the disease or condition for which it has such designation, the product is entitled to orphan product exclusivity, which means that the FDA may not approve any other applications to market the same drug ~~or biological product~~ for the same use or indication for seven years, except in limited circumstances, such as a showing of clinical superiority to the product with orphan exclusivity or inability to manufacture the product in sufficient quantities. ~~The designation of such drug also entitles a party to financial incentives such as opportunities for grant funding towards clinical trial costs, tax advantages and user-fee waivers.~~ Competitors, however, may receive approval of different products for the indication for which the orphan product has exclusivity or obtain approval for the same product but for a different indication for which the orphan product has exclusivity.

Orphan exclusivity also could block the approval of one of our products for seven years if a competitor obtains approval of the same drug as defined by the FDA for an indication we intend to pursue or are pursuing or if our product candidate is determined to be contained within the competitor’s product for the same indication or disease. If an orphan designated product receives marketing approval for an indication broader than what is designated, it may not be entitled to orphan exclusivity.

–FDA Regulation of In Vitro Diagnostics

Under the FDCA, in vitro diagnostics are regulated as medical devices. In the United States, the FDCA and its implementing regulations, and other federal and state statutes and regulations govern, among other things, medical device design and development, preclinical and clinical testing, premarket clearance or approval, registration and listing, manufacturing, labeling, storage, advertising and promotion, sales and distribution, export and import, and post-market surveillance. Unless an exemption applies, diagnostic tests require marketing clearance or approval from the FDA prior to commercial distribution. The two primary types of FDA marketing authorization applicable to a medical device are premarket notification, also called 510(k) clearance, and premarket approval, or PMA; however, other devices may be commercialized after the FDA grants a de novo request.

Device Classification

Under the FDCA, medical devices are classified into one of three classes—Class I, Class II or Class III—depending on the degree of risk associated with each medical device and the extent of control needed to provide reasonable assurances with respect to safety and effectiveness.

Class I devices are those for which safety and effectiveness can be reasonably assured by adherence to a set of regulations, referred to as General Controls, which often require compliance with the applicable portions of the FDA’s Quality System Regulation, or QSR, facility registration and product listing, reporting of adverse events and malfunctions, and appropriate, truthful and non-misleading labeling and promotional materials. Most Class I products are exempt from the premarket notification requirements.

Class II devices are those that are subject to the General Controls, as well as Special Controls, which can include performance standards, guidelines and post market surveillance. Most Class II devices are subject to premarket review and clearance by the FDA. Premarket review and clearance by the FDA for Class II devices is accomplished through the 510(k) premarket notification process. Under the 510(k) process, the manufacturer must submit to the FDA a premarket notification, demonstrating that the device is “substantially equivalent,” as defined in the statute, to either:

•a device that was legally marketed prior to May 28, 1976, the date upon which the Medical Device Amendments of 1976 were enacted, or

•another commercially available, similar device that was cleared through the 510(k) process.

To be “substantially equivalent,” the proposed device must have the same intended use as the predicate device, and either have the same technological characteristics as the predicate device or have different technological characteristics and not raise different questions of safety or effectiveness than the predicate device. Clinical data are sometimes required to support substantial equivalence.

After a 510(k) ~~notice~~ is submitted, the FDA determines whether to accept it for substantive review. If it lacks necessary information for substantive review, the FDA will refuse to accept the 510(k) ~~notification.~~. If it is accepted for filing, the FDA begins a substantive review. If the FDA agrees that the device is substantially equivalent, it will grant clearance to commercially market the device.

~~The PMA Process~~

If the FDA determines that the device is not “substantially equivalent” to a predicate device, or if the device is classified into Class III by operation of law, the device sponsor must then fulfill the much more rigorous premarketing requirements of the PMA process, or seek classification of the device through the de novo process by submitting a de novo request. A manufacturer can also submit a direct de novo request if the manufacturer is unable to identify an appropriate predicate device and the new device or new use of the device presents a moderate or low risk. In response to a de novo request, FDA may classify the device into class I or II. When FDA grants a de novo request, the device is granted marketing authorization and further can serve as a predicate for future devices of that type, including for 510(k)s.

Class III devices include devices deemed by the FDA to pose the greatest risk such as life-supporting or life-sustaining devices, or implantable devices, in addition to those deemed not substantially equivalent following the 510(k) process. The safety and effectiveness of Class III devices cannot be reasonably assured solely by the General Controls and Special Controls described above. Therefore, these devices are subject to the PMA application process, which is generally more costly and time consuming than the 510(k) process. Through the PMA application process, the applicant must submit data and information ~~demonstrating~~to demonstrate reasonable assurance of the safety and effectiveness of the device for its intended use to the FDA’s satisfaction. Accordingly, a PMA application typically includes, but is not limited to, extensive technical information regarding device design and development, preclinical and clinical study data, manufacturing information, labeling and financial disclosure information for the clinical investigators in device studies. The PMA application must provide valid scientific evidence that demonstrates to the FDA’s satisfaction reasonable assurance of the safety and effectiveness of the device for its intended use. Overall, the FDA review of a PMA application generally takes between one and three years, but may take significantly longer.

~~Laboratory-developed~~If the FDA determines that a device is not “substantially equivalent” to a predicate device pursuant to a 510(k) submission, or if the device is classified into Class III by operation of law, the device sponsor must then fulfill the much more rigorous premarketing requirements of the PMA process, described above, or seek classification of the device through the de novo process by submitting a de novo request. This process allows a manufacturer whose novel device is automatically classified into Class III to request down-classification of its medical device into Class I or Class II on the basis that the device presents low or moderate risk. If the manufacturer seeks reclassification into Class II, the manufacturer must include a draft proposal for special controls that are necessary to provide a reasonable assurance of the safety and effectiveness of the medical device. The FDA may reject the reclassification petition if it identifies a legally marketed predicate device that would be appropriate for a 510(k) or that general controls would be inadequate to control the risks and special controls cannot be developed. In response to a de novo request, FDA may classify the device into class I or II. When FDA grants a de novo request, the device is granted marketing authorization and further can serve as a predicate for future devices of that type, including for 510(k)s.

Laboratory Developed Tests (LDTs)

~~LDTs have~~The FDA has generally ~~been~~ considered LDTs to be ~~tests~~in vitro diagnostic products that are intended for clinical use and that are designed, manufactured and used within a single ~~laboratory.~~clinical laboratory certified under the Clinical Laboratory Improvement Amendments of 1988 (“CLIA”) and meeting the regulator requirements under CLIA to perform high complexity testing. The FDA takes the position that it has the authority to regulate such tests as devices under the FDCA. ~~The~~Historically, the FDA has ~~historically~~ exercised enforcement discretion, meaning FDA has not enforced premarket review or other applicable FDA requirements with respect to most LDTs. In addition, the New York State Department of Health, or NYSDOH, separately approves certain LDTs offered to New York State patients. The laboratory partner to whom we license our technology will be responsible for obtaining the requisite approvals for our LDT in New York, and maintaining CLIA-certification and state clinical laboratory licenses, where applicable.

~~On October 3, 2014,~~In September 2023, the FDA ~~issued two draft guidance documents regarding oversight~~proposed a rule to amend its regulations to make explicit that in vitro diagnostic products are devices under the FDCA, including when the manufacturer of ~~LDTs. These draft guidance documents proposed more active oversight over LDTs. The draft guidance documents have been~~ the ~~subject of considerable controversy, and~~ in ~~November 2016,~~vitro diagnostic is a laboratory. At the same time, FDA announced ~~that it would not~~its coordinate intent to phase out its general enforcement discretion approach over a period of years should the proposed rule be ~~finalizing the 2014 draft guidance documents. On January 13, 2017, the~~finalized and at which time FDA ~~issued~~will publish a discussion paper which laid out elements of a possible revised future LDT regulatory framework, but did not establish any regulatory requirements. The FDA’s efforts to regulate LDTs have prompted the drafting of legislation governing diagnostic products and services, including LDTs. Congress or FDA may still act to provide further direction on the regulation of LDTs.final phaseout policy.

–European Union Regulation for Drug Development and Registration

Privacy and Security

We may be subject to diverse laws and regulations relating to data privacy and security as a result of our employee data or other personal information that we may collect. In addition, if we do collect personal data as part of any clinical trials or other testing, we would be subject to regulatory obligations. This includes, (i) in the European Union, or EU, and the European Economic Area, or EEA, the EU General Data Protection Regulation, or EU GDPR, (ii) in the United Kingdom, or UK, the UK GDPR. EU member states are also able to legislate separately on health and genetic information, and we must comply with these local laws where we operate. For example, in France, the conduct of clinical trials is subject to compliance with reference methodologies (such as MR-001) imposing stringent rules to process health-related information.

Preclinical and Clinical Development

In the European Economic Area ~~or EEA~~ (which is comprised of the 27 Member States of the European Union plus Norway, Iceland and Liechtenstein), our drug candidates are also subject to extensive regulatory requirements. As in the United States, medicinal products can only be marketed if a marketing authorization from the competent regulatory ~~agencies~~authorities has been obtained.

Similar to the United States, the various phases of preclinical and clinical research in the ~~European Union~~EEA are subject to significant regulatory controls. ~~Although~~

In the ~~EU Clinical Trials Directive 2001/20/EC has sought to harmonize the European Union~~EEA, clinical trials ~~regulatory framework, setting out common rules for~~are governed by the control and authorization of clinical trials in the European Union, the EU Member States have transposed and applied the provisions of the Directive differently. This has led to significant variations in the Member State regimes. To improve the current system,Clinical Trials Regulation (EU) No 536/2014, ~~on clinical trials on medicinal products for human use,~~or CTR, which ~~repealed Directive 2001/20/EC, was adopted on April 16, 2014 and published in the European Official Journal on May 27, 2014. The Regulation~~ entered into application on January 31, ~~2022.~~2022 repealing and replacing the former Clinical Trials Directive 2001/20, or CTD, and related national implementing legislation of EEA countries.

The ~~Regulation aims at harmonizing~~CTR is intended to harmonize and ~~streamlining the~~streamline clinical ~~trials authorization process, simplifying adverse event~~trial authorizations, simplify adverse-event reporting procedures, ~~improving~~improve the supervision of clinical trials and increasing their transparency. ~~The main characteristics of~~Specifically, the Regulation, ~~include:~~which is directly applicable in all EEA countries, introduces a streamlined application procedure ~~via~~through a ~~single entry~~single-entry point, the ~~“EU portal”;~~"EU portal", the Clinical Trials Information System, or CTIS; a single set of documents to be prepared and submitted for the ~~application~~application; as well as simplified reporting procedures for clinical trial ~~sponsors; and a~~sponsors. A harmonized procedure for the assessment of applications for clinical trials ~~which~~has been introduced and is divided ininto two parts. Part I assessment is ~~assessed first by a single “reference” Member State whose conclusions are then assessed~~led by the competent authorities of a reporting Member State selected by the trial sponsor and relates to clinical trial aspects that are considered to be scientifically harmonized across EEA countries. This assessment is then submitted to the competent authorities of all EUconcerned Member States in which ~~an application~~the trial is to be conducted for ~~authorization of a clinical trial has been submitted, the “concerned” Member States.~~their review. Part II is assessed separately by the competent authorities and Ethics Committees in each concerned Member State. ~~Strict deadlines have been established for~~Individual EEA countries retain the ~~assessment~~power to authorize the conduct of clinical ~~trial applications.~~ trials on their territory.

The ~~role of the relevant ethics committees in the assessment procedure~~extent to which on-going clinical trials will ~~continue to~~ be governed by the ~~national law~~CTR will depend on the duration of the ~~concerned Member State. However, overall related timelines~~individual clinical trial. Sponsors could choose to submit a clinical trial application under either the CTD or the CTR until January 31, 2023. For clinical trials in relation to which application for approval was made on the basis of the CTD before January 31, 2022, the CTD will continue to apply on a transitional basis for three years. If authorized, those clinical trials will be ~~defined~~governed by the ~~Clinical Trials Regulation.~~CTD until January 31, 2025. By that date, all ongoing trials will become subject to the provisions of the CTR. The CTR will apply to clinical trials from an earlier date if the clinical trial has already transitioned to the CTR framework.

European Union Drug Review and Approval

In the EEA, medicinal products can only be commercialized after obtaining a Marketing Authorization, or MA.

To obtain an MA for a product in the EEA, an applicant must submit a Marketing ~~Authorizations~~Authorization Application, or MAA, either under a centralized procedure administered by the EMA or one of the procedures administered by the Competent Authorities of EEA countries (decentralized procedure, national procedure or mutual recognition procedure). An MA may be granted ~~either centrally (EU MA) or nationally (National MA).~~only to an applicant established in the EEA.

The EUcentralized procedure provides for the grant of a single MA ~~is issued centrally~~ by the European Commission ~~through the Centralized Procedure, based on the opinion of the CHMP of the EMA and~~that is valid ~~throughout~~for all EEA countries. Pursuant to Regulation (EC) No 726/2004, the ~~entire territory of the EEA. The Centralized Procedure~~centralized procedure is ~~mandatory~~compulsory for ~~certain types of~~specific products, ~~such as biotechnology~~including for (i) medicinal products derived from biotechnological processes, (ii) products designated as orphan medicinal products, ~~and~~(iii) advanced therapy medicinal products, ~~containing~~or ATMPs, and (iv) products with a new active substance indicated for the treatment of HIV/AIDS, cancer, neurodegenerative ~~disorders,~~diseases, diabetes, auto-immune and other immune dysfunctions and viral diseases. ~~The Centralized Procedure is optional for~~For products ~~containing~~with a new active substance ~~not yet authorized in~~indicated for the ~~EEA,~~treatment of other diseases and products that are highly innovative or for ~~products that constitute~~which a ~~significant therapeutic, scientific or technical innovation or which are~~centralized process is in the interest of patients, authorization through the centralized procedure is optional on related approval. Under the centralized procedure, the EMA’s Committee for Medicinal Products for Human Use, or CHMP, conducts the initial assessment of a product. The CHMP is also responsible for several post-authorization and maintenance activities, such as the assessment of modifications or extensions to an existing MA.

Under the centralized procedure in the EU, the maximum timeframe for the evaluation of an MAA is 210 days, excluding clock stops when additional information or written or oral explanation is to be provided by the applicant in response to questions of the CHMP. Accelerated assessment may be granted by the CHMP in exceptional cases, when a medicinal product targeting an unmet medical need is expected to be of major interest from the point of view of public health and, in particular, from the ~~European Union.~~viewpoint of therapeutic innovation. If the CHMP accepts a request for accelerated assessment, the time limit of 210 days will be reduced to 150 days (excluding clock stops). The CHMP can, however, revert to the standard time limit for the centralized procedure if it considers that it is no longer appropriate to conduct an accelerated assessment.

~~National MAs are issued nationally~~

Unlike the centralized authorization procedure, the decentralized MA procedure requires a separate application to, and leads to separate approval by, the competent authorities of each EEA country in which the product is to be marketed. This application is identical to the application that would be submitted to the EMA for authorization through the centralized procedure. The reference Member State prepares a draft assessment and drafts of the related materials within 120 days after receipt of a valid application. The resulting assessment report is submitted to the concerned Member States who, within 90 days of receipt, must decide whether to approve the assessment report and related materials. If a concerned Member State cannot approve the assessment report and related materials due to concerns relating to a potential serious risk to public health, disputed elements may be referred to the Heads of Medicines Agencies’ Coordination Group for Mutual Recognition and Decentralised Procedures – Human, or CMDh, for review. The subsequent decision of the European Commission is binding on all EEA countries.

The mutual recognition procedure allows companies that have a medicinal product already authorized in one EEA country to apply for this authorization to be recognized by the competent authorities in other EEA countries. Like the decentralized procedure, the mutual recognition procedure is based on the acceptance by the competent authorities of EEA countries of the MA of a medicinal product by the competent authorities of other EEA countries. The holder of a national MA may submit an application to the competent authority of an EEA country requesting that this authority recognize the MA delivered by the competent authority of another EEA country.

An MA has, in principle, an initial validity of five years. The MA may be renewed after five years on the basis of a re-evaluation of the risk-benefit balance by the EMA or by the competent authority of the EEA ~~and only cover their respective territory. National MAs are available for products not falling within~~country in which the ~~mandatory scope of~~original MA was granted. To support the ~~Centralized Procedure. We do not foresee that any of our current drug candidates will be suitable for a National~~application, the MA ~~as they fall within the mandatory criteria for the Centralized Procedure. Therefore, our drug candidates should be approved through EU MAs.~~

~~Under the above-described procedures, before granting the MA,~~holder must provide the EMA or the competent ~~authorities~~authority with a consolidated version of the ~~Member States of~~eCTD (Common Technical Document) providing up-to-date data concerning the ~~EEA make an assessment of the risk-benefit balance~~quality, safety and efficacy of the product, including all variations introduced since the MA was granted, at least nine months before the MA ceases to be valid. The European Commission or the competent authorities of EEA countries may decide on justified grounds relating to pharmacovigilance, to proceed with one further five year renewal period for the MA. Once subsequently definitively renewed, the MA shall be valid for an unlimited period. Any authorization which is not followed by the actual placing of the medicinal product on the ~~basis~~EEA market (for a centralized MA) or on the market of ~~scientific criteria concerning its quality,~~the authorizing EEA country within three years after authorization ceases to be valid (the so-called sunset clause).

Innovative products that target an unmet medical need and are expected to be of major public health interest may be eligible for a number of expedited development and review programs, such as the Priority Medicines, or PRIME, scheme, which provides incentives similar to the breakthrough therapy designation in the U.S. PRIME is a voluntary scheme aimed at enhancing the EMA’s support for the development of medicinal products that target unmet medical needs. Eligible products must target conditions for which there is an unmet medical need (there is no satisfactory method of diagnosis, prevention or treatment in the EU or, if there is, the new medicinal product will bring a major therapeutic advantage) and they must demonstrate the potential to address the unmet medical need by introducing new methods of therapy or improving existing ones. Benefits accrue to sponsors of product candidates with PRIME designation, including but not limited to, early and proactive regulatory dialogue with the EMA, frequent discussions on clinical trial designs and other development program elements, and potentially accelerated MAA assessment once a dossier has been submitted.

In the EEA, a “conditional” MA may be granted in cases where all the required safety and ~~efficacy.~~efficacy data are not yet available. The ~~EMA~~European Commission may ~~give~~grant a ~~positive opinion for~~ conditional ~~marketing authorization based on interim clinical data~~MA for a medicinal product ~~for human use~~ if ~~(1)~~it is demonstrated that all of the ~~risk-benefit~~following criteria are met: (i) the benefit-risk balance of the medicinal product is ~~positive, (2)~~positive; (ii) it is likely that the applicant will be ~~in a position~~able to provide comprehensive data post-authorization; (iii) the ~~required comprehensive clinical trial data, (3)~~medicinal product fulfills an unmet medical ~~needs will be fulfilled~~need; and ~~(4)~~(iv) the benefit ~~to public health~~ of the immediate availability ~~on the market~~to patients of the medicinal product ~~outweighs~~is greater than the risk inherent in the fact that additional data are still required. ~~Specific obligations, including with respect~~The conditional MA is subject to conditions to be fulfilled for generating the ~~completion of ongoing~~missing data or ~~new studies, and with respect to the collection of pharmacovigilance data, may be specified in the conditional marketing authorization. Conditional marketing authorizations are~~ensuring increased safety measures. It is valid for one year and ~~may~~must be renewed annually until all related conditions have been fulfilled. Once any pending studies are provided, the conditional MA can be converted into a traditional MA. However, if the conditions are not fulfilled within the timeframe set by the EMA and approved by the European Commission, the MA will cease to be renewed.

An MA may also be granted “under exceptional circumstances” where the applicant can show that it is unable to provide comprehensive data on efficacy and safety under normal conditions of use even after the product has been authorized and subject to specific procedures being introduced. These circumstances may arise in particular when the intended indications are very rare and, in the state of scientific knowledge at that time, it is not possible to provide comprehensive information, or when generating data may be contrary to generally accepted ethical principles. Like a conditional MA, an MA granted in exceptional circumstances is reserved to medicinal products intended to be authorized for treatment of rare diseases or unmet medical needs for which the applicant does not hold a complete data set that is required for the grant of a standard MA. However, unlike the conditional MA, an applicant for authorization in exceptional circumstances is not subsequently required to provide the missing data. Although the MA “under exceptional circumstances” is granted definitively, the risk-benefit balance of the medicinal product is reviewed annually, and the MA will be withdrawn if the risk-benefit ~~balance remains positive,~~ratio is no longer favorable.

EU Pediatric Development

In the EEA, Regulation (EC) No 1901/2006 provides that all marketing authorization applications for new medicinal products must include the results of trials conducted in the pediatric population, in compliance with a pediatric investigation plan, or PIP, agreed with the EMA’s Pediatric Committee, or PDCO. The PIP sets out the timing and ~~after an assessment~~measures proposed to generate data to support a pediatric indication of the ~~need~~medicinal product for ~~additional~~which marketing authorization is being sought. The PDCO may grant a deferral of the obligation to implement some or ~~modified conditions.~~

~~In addition~~all of the measures provided in the PIP until there are sufficient data to ~~an MA, various other requirements apply~~demonstrate the efficacy and safety of the product in adults. Furthermore, the obligation to provide pediatric clinical trial data can be waived by the PDCO when these data are not needed or appropriate because the product is likely to be ineffective or unsafe in children, the disease or condition for which the product is intended occurs only in adult populations, or when the product does not represent a significant therapeutic benefit over existing treatments for pediatric patients. Once the marketing authorization is obtained in all EEA countries and study results are included in the product information, even when negative, the product is eligible for a six-month extension to the ~~manufacturing and placing on~~Supplementary Protection Certificate, or SPC, if any is in effect at the ~~EU market~~time of ~~medicinal products. Manufacture~~authorization or, in the case of orphan medicinal products, a two-year extension of orphan market exclusivity.

Orphan Drugs in the EU requires a manufacturing authorization, and import of medicinal products into the EU requires a manufacturing authorization allowing for import. The manufacturing authorization holder must comply with various requirements set out in the applicable EU laws, regulations and guidance. These requirements include compliance with EU GMP standards when manufacturing medicinal products and APIs, including the manufacture of APIs outside of the EU with the intention to import the APIs into the EU. Similarly, the distribution of medicinal products within the EU is subject to compliance with the applicable EU laws, regulations and guidelines, including the requirement to hold appropriate authorizations for distribution granted by the competent authorities of the EU Member States. MA holders and/or manufacturing and import authorization, or MIA holders and/or distribution authorization holders may be subject to civil, criminal or administrative sanctions, including suspension of manufacturing authorization, in case of non-compliance with the EU or EU Member States’ requirements applicable to the manufacturing of medicinal products.

~~Orphan Drugs~~

In the EEA, Regulation (EC) No 141/2000, as ~~amended,~~implemented by Regulation (EC) No. 847/2000, provides that a drug will be designated as an orphan drug if its sponsor can establish:

•that it is intended for the diagnosis, prevention or treatment of a life-threatening or chronically debilitating condition affecting not more than five in ten thousand persons in the European Union when the application is made, or that it is intended for the diagnosis, prevention or treatment of a life-threatening, seriously debilitating or serious and chronic condition in the European Union and that without incentives it is unlikely that the marketing of the drug in the European Union would generate sufficient return to justify the necessary investment; and

•that there exists no satisfactory method of diagnosis, prevention or treatment of the condition in question that has been authorized in the European Union or, if such method exists, that the drug will be of significant benefit to those affected by that condition.

Regulation (EC) No 847/2000 sets out further provisions for implementation of the criteria for designation of a drug as an orphan drug. An application for the designation of a drug as an orphan drug must be submitted at any stage of development of the drug but before filing of a ~~MA application.~~MAA. A MA for an orphan drug may only include indications designated as orphan. For non-orphan indications treated with the same active pharmaceutical ingredient, as a separate MA has to be sought.

Orphan medicinal product designation entitles an applicant to incentives such fee reductions or fee waivers, protocol assistance, and access to the centralized marketing authorization procedure. If an EU MA in respect of an orphan drug is granted pursuant to Regulation (EC) No 726/2004, ~~regulatory authorities will not,~~the EMA cannot, for a period of usually 10 years, accept another application for a MA, or grant a MA or accept an application to extend an existing MA, for the same therapeutic indication, in respect of a similar drug. This period may however be reduced to six years if, at the end of the fifth year, it is established, in respect of the drug concerned, that the criteria for orphan drug designation are no longer met, ~~in other words,~~including, when it is shown on the basis of available evidence that the product is sufficiently profitable not to justify maintenance of market ~~exclusivity.~~exclusivity or where the prevalence of the condition has increased above the threshold. The exclusivity period may increase to 12 years if, among other things, the MAA includes the results of studies from an agreed pediatric investigation plan. Notwithstanding the foregoing, a MA may be granted, for the same therapeutic indication, to a similar drug if:

•the holder of the MA for the original orphan drug has given its consent to the second applicant;

•the ~~holder of the MA~~manufacturer for the original orphan drug is unable to supply sufficient quantities of the drug; or

•the second applicant can establish in the application that the second drug, although similar to the orphan drug already authorized, is safer, more effective or otherwise clinically superior.

Regulation (EC) No 847/2000 lays down definitions of the concepts ‘similar ~~drug’~~medicinal product’ and ‘clinical superiority’.

Other incentives available to orphan drugs in the European Union include financial incentives such as a reduction of fees or fee waivers and protocol assistance. Orphan drug designation does not shorten the duration of the regulatory review and approval process.

EU Data and Market Exclusivity

The EU provides opportunities for data and market exclusivity related to MAs. Upon receiving marketing authorization, innovative, medicinal products are generally entitled to receive eight years of data exclusivity and 10 years of market exclusivity. Data exclusivity, if granted, prevents ~~regulatory authorities in the EU~~generic or biosimilar applicants from referencing the innovator’s ~~data to assess~~pre-clinical and clinical trial contained in the dossier of the reference product when submitting a generic application or biosimilar ~~application~~MAA for eight years from the date of authorization of the ~~innovative product, after which~~reference product. During the additional two-year period of market exclusivity, a generic or biosimilar MAA can be submitted, and the innovator’s data may be ~~referenced. The market exclusivity period prevents a successful~~referenced, but no generic or biosimilar ~~applicant from commercializing its~~ product can be marketed in the EU until ten years have elapsed from the initial MA of the reference product in the EU. The overall ten-year period ~~may, occasionally,~~will be extended for a further year to a maximum of 11 years if, during the first eight years of those ten years, the MA holder obtains an authorization for one or more new therapeutic indications which, during the scientific evaluation prior to their authorization, are held to bring a significant clinical benefit in comparison with existing therapies. However, there is no guarantee that a product will be considered by the EU’s regulatory authorities to be a new chemical/biological entity, and products may not qualify for data exclusivity. In the EEA, there is a special regime for biosimilars, or biological medicinal products that are similar to a reference medicinal product but that do not meet the definition of a generic medicinal product. For such products, the results of appropriate preclinical or clinical trials must be provided in support of an MAA. Guidelines from the EMA detail the type of quantity of supplementary data to be provided for different types of biological product.

EU Regulatory Requirements after Marketing Authorization

Where an MA is granted in relation to a medicinal product in the EU, the holder of the MA is required to comply with a range of regulatory requirements applicable to the manufacturing, marketing, promotion and sale of medicinal products.

Similar to the United States, both MA holders and manufacturers of medicinal products are subject to comprehensive regulatory oversight by the EMA, the European Commission and/or the competent regulatory authorities of the individual ~~EU Member States.~~EEA countries. The holder of an MA must establish and maintain a pharmacovigilance system and appoint an individual qualified person for pharmacovigilance who is responsible for oversight of that system. Key obligations include expedited reporting of suspected serious adverse reactions and submission of periodic safety update reports, or PSURs.

All new MAAs must include a risk management plan, or RMP, describing the risk management system that the company will put in place and documenting measures to prevent or minimize the risks associated with the product. The regulatory authorities may also impose specific obligations as a condition of the MA. Such risk-minimization measures or post-authorization obligations may include additional safety monitoring, more frequent submission of PSURs, or the conduct of additional clinical trials or post-authorization safety studies.

In the EEA, the advertising and promotion of medicinal products are subject to both EU and EEA countries’ laws governing promotion of medicinal products, interactions with physicians and other healthcare professionals, misleading and comparative advertising and unfair commercial practices. Although general requirements for advertising and promotion of medicinal products are established under EU legislation, the details are governed by regulations in individual EEA countries and can differ from one country to another. For example, applicable laws require that promotional materials and advertising in relation to medicinal products comply with the product’s Summary of Product Characteristics, or SmPC, as approved by the competent authorities in connection with an MA. The SmPC is the document that provides information to physicians concerning the safe and effective use of the product. Promotional activity that does not comply with the SmPC is considered off-label and is prohibited in the EEA. Direct-to-consumer advertising of prescription medicinal products is also prohibited in the EEA.

In Vitro Diagnostics

~~The regulations on IVDs are currently harmonized through the Directive 98/79/EC on in vitro diagnostic medical devices (the IVD Directive), which will be replaced by~~On 26 May 2022, Regulation (EU) 2017/746 on in vitro diagnostic medical devices ~~(IVDR) from May 26, 2022, with certain exceptions for earlier~~(IVDs), or the IVDR, entered into application, repealing and ~~transitional periods for later application.~~replacing Directive 98/79/EC concerning IVDs, or IVDD. The IVDR and its associated guidance documents and harmonized standards govern, among other things, device design and development, preclinical and clinical or performance testing, premarket conformity assessment, registration and listing, manufacturing, labeling, storage, claims, sales and distribution, export and import and post-market surveillance, vigilance, and market ~~surveillance of IVDs.~~surveillance. IVDs must comply with the General Safety and Performance Requirements, or GSPRs, set out in Annex I of the IVDR. Compliance with these requirements is a prerequisite to be able to affix the CE mark to devices, without which they cannot be marketed or sold in the EEA. To demonstrate compliance with the GSPRs provided in the IVDR and obtain the right to affix the CE mark, medical devices manufacturers must undergo a conformity assessment procedure, which varies according to the type of IVD and its classification. Apart from low risk IVDs (Class A which are not sterile), in relation to which the manufacturer may issue an EU Declaration of Conformity based on a self-assessment of the conformity of its products with the GSPRs, a conformity assessment procedure requires the intervention of a Notified Body, which is an organization designated by a competent authority of an EEA country to conduct conformity assessments. Depending on the relevant conformity assessment procedure, the Notified Body audits and examines the technical documentation and the quality system for the manufacture, design and final inspection of the medical devices. The Notified Body issues a CE Certificate of Conformity following successful completion of a conformity assessment procedure conducted in relation to the ~~IVD~~medical device and its manufacturer and their conformity with the GSPRs. This Certificate and the related conformity assessment process entitles the manufacturer to affix the CE mark to its ~~IVDs~~medical devices after having prepared and signed a related EC Declaration of Conformity.

As a general rule, demonstration of conformity of medical devices and their manufacturers with the GSPRs must be based, among other things, on the evaluation of clinical data supporting the safety and performance of the products during normal conditions of use. Specifically, a manufacturer must demonstrate that the device achieves its intended performance during normal conditions of use and that the known and foreseeable risks, and any adverse events, are minimized and acceptable when weighed against the benefits of its intended performance, and that any claims made about the performance and safety of the device (e.g., product labeling and instructions for use) are supported by suitable evidence. This assessment must be based on clinical data, which can be obtained from (1) clinical studies conducted on the devices being assessed, (2) scientific literature from similar devices whose equivalence with the assessed device can be demonstrated or (3) both clinical studies and scientific literature. The conduct of clinical studies in the EEA is governed by detailed regulatory obligations. These may include the requirement of prior authorization by the Competent Authorities of the country in which the study takes place and the requirement to obtain a positive opinion from a competent Ethics Committee. This process can be expensive and time-consuming. After a device is placed on the market, it remains subject to significant regulatory requirements.

French Regulatory Framework on Transfer of Values to Health Care Professionals

The French Public Health Code provides for two sets of requirements regarding the transfer of values by health care companies to health care professionals:

•The Anti-Benefit regime prohibits companies that produce or market healthcare products or provide services related to healthcare products, or healthcare companies, from offering or promising benefits in cash or kind to healthcare professionals admitted to practice in France (Article L.1453-3 of the French Public Health Code). In certain limited circumstances, benefits may be excluded from this general prohibition. Exceptions include benefits of negligible value (Article L.1453-6 of the French Public Health Code). Additional exceptions apply to benefits such as remuneration, compensation or disbursements to healthcare professionals in relation to scientific research, speaker fees or hospitality provided in the course of scientific event. This includes benefits provided on the basis of a prior written agreement concluded between the parties where, depending on the amount of the benefit, the benefit is either notified to or authorized by the French competent authority prior to granting the benefit (Article L.1453-7 of the French Public Health Code).

•The Transparency or Sunshine regime, set out by Article L.1453-1 of the Public Health Code, requires healthcare companies ~~manufacturing or marketing health care products (medicinal products, medical devices, etc.)~~ in France to publicly disclose the ~~advantages~~benefits and fees paid to healthcare professionals ~~amounting~~admitted to practice in France where the related amount is 10 euros or ~~above, as well as the~~above. The related agreements concluded ~~with~~between the ~~latter,~~parties, along with detailed information about each agreement (the precise subject matter of the agreement, the date of signature of the agreement, its end date, the total amount paid to the healthcare professional, etc.). must also be disclosed. Information must be submitted to the website https://www.entreprisestransparence.sante.gouv.fr and will be disclosed twice a year through this website.

•–The Anti-Gift regime, regarding the general prohibition of payments from pharmaceutical and device manufacturers to healthcare professionals (Article L.1453-3 of the French Public Health Code), except in certain circumstances in particular scientific research, speaker fees and hospitality provided in the course of scientific event. The Anti-Gift regime was modified by the implementation of the provisions of Ordinance n° 2017-49 of January 19, 2017. The new regime includes a prior declaration or prior authorization procedure for the transfers of values which do not fall under the above-mentioned prohibition. The related Decree concerning the advantages granted by persons manufacturing or marketing health products or services was finally published on June 17, 2020 and entered into force on October 1, 2020.Reimbursement

~~Reimbursement~~

Significant uncertainty exists in the United States as to the coverage and reimbursement status of any drug candidates for which we obtain regulatory approval. Sales of our products will depend, in part, on the extent to which our products, once approved, will be covered and reimbursed by third-party payors, such as government health programs, commercial insurance and managed healthcare organizations. These third-party payors are increasingly reducing reimbursement levels for medical products and services. The process for determining whether a third-party payor will provide coverage for a drug product typically is separate from the process for setting the price of a drug product or for establishing the reimbursement rate that a payor will pay for the drug product once coverage is approved. Third-party payors may limit coverage to specific drug products on an approved list, also known as a formulary, which might not include all of the approved drugs for a particular indication.

To secure coverage and reimbursement for any product candidate that might be approved for sale, we may need to conduct expensive pharmacoeconomic studies in order to demonstrate the medical necessity and cost-effectiveness of the product candidate.

These costs are in addition to the costs required to obtain FDA or other comparable regulatory approvals. Whether or not we conduct such studies, our drug candidates may not be considered medically necessary or cost-effective. A third-party payor’s decision to provide coverage for a drug product does not imply that an adequate reimbursement rate will be approved. Further, no uniform policy for coverage and reimbursement exists in the United States, and coverage and reimbursement can differ significantly from payor to payor. One payor’s determination to provide coverage for a product does not assure that other payors will also provide coverage, and adequate reimbursement, for the product. Third-party reimbursement may not be sufficient to enable us to realize an appropriate return on our investment in product development.

In January 2019, we entered into a license agreement with Labcorp to enable them to further develop and deploy NIS4 in the context of clinical research. Initially, we will enable Labcorp through its subsidiary Covance to market and sell an LDT powered by NIS4t in the context of clinical research studies. Covance will not seek or receive third-party insurance reimbursement because clinical trial sponsors will directly cover testing costs. In September 2020, we signed a five-year exclusive license agreement with Labcorp to allow them to develop and commercialize an LDT powered by NIS4 technology for use in routine clinical diagnostic testing in the United States and Canada.

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~~As an~~With respect to NASHNext®, the LDT powered by NIS4® technology, Labcorp, as the laboratory partner, ~~will be~~is responsible for marketing the product to healthcare providers and is responsible for seeking coverage and reimbursement from third party payors, including Medicare and Medicaid. ~~We will separately~~Separately, our strategy is to seek FDA marketing authorization for a kit-based IVD powered by ~~NIS4~~NIS4® or its improvements to allow us to commercialize the test within the United States as a medical device. In parallel, we intend to progress towards submitting an application for a ~~data package~~CE Certificate of Conformity to a European Notified Body in the EEA to enable CE marking, ~~and associated marketing approval in key European markets in 2021.~~alone or with a potential future partner. In Europe, we are still finalizing our plans but are considering, if ~~approved,~~the appropriate approvals or certifications are obtained, selling the IVD powered by ~~NIS4~~NIS4® through a distributor or commercial partner to independent, smaller laboratories, as there are fewer large central laboratories in these regions. We, or our collaborators, will be required to obtain coverage and reimbursement for this test separate and apart from the coverage and reimbursement we plan to seek for our product candidates, ~~once~~if approved. There is significant uncertainty regarding our ability to obtain coverage and adequate reimbursement in some or all commercial territories for this test for the same reasons applicable to our product candidates.

The containment of healthcare costs has become a priority of federal, state and foreign governments, and the prices of drugs have been a focus in this effort. The United States federal government, state legislatures and foreign governments have shown significant interest in implementing cost-containment programs, including price controls, restrictions on reimbursement, utilization management and requirements for substitution of generic products. Adoption of price controls and cost-containment measures, and adoption of more restrictive policies in jurisdictions with existing controls and measures, could further limit our net revenue and results. Decreases in third-party reimbursement for our drug candidates or a decision by a third-party payor to not cover our drug candidates could reduce physician usage of the drug candidates and could have a material adverse effect on our sales, results of operations and financial condition.

In addition, in some foreign countries, the proposed pricing and reimbursement for a drug must be approved before it may be lawfully marketed. The requirements governing drug pricing and reimbursement vary widely from country to country.

The complexity of this process explains why, there can be no assurance that any country that has price controls or reimbursement limitations for pharmaceutical products will allow favorable reimbursement and pricing arrangements for any of our drug candidates. Historically, products launched in the EEA do not follow price structures of the United States and generally prices tend to be significantly lower.

~~Many EEA countries periodically review their reimbursement of medicinal products, which could have an adverse impact on reimbursement status.~~ In ~~addition, we expect that legislators, policymakers and healthcare insurance funds in~~ the EEA, pricing and reimbursement schemes vary widely from country to country. Some countries ~~will continue~~provide that products may be marketed only after a reimbursement price has been agreed. Other countries may require the completion of additional studies that compare the cost-effectiveness of a particular product candidate to propose and implement cost-containing measures, such as lower maximum prices, lower or lack of reimbursement coverage and incentives to use cheaper, usually generic, products as an alternative to branded products, and/or branded productscurrently available ~~through parallel import to keep healthcare costs down. Moreover,~~therapies (so called health technology assessments) in order to obtain reimbursement ~~for our products in~~or pricing approval. For example, some EEA countries we may ~~be required~~approve a specific price for a product, or they may instead adopt a system of direct or indirect controls on the profitability of the company placing the product on the market. Other EEA countries allow companies to ~~compile~~fix their own prices for products but monitor and control prescription volumes and issue guidance to physicians to limit prescriptions. Recently, many EEA countries have increased the amount of discounts that pharmaceutical companies are requirement to offer. These efforts could continue as countries attempt to manage healthcare expenditures. The downward pressure on healthcare costs in general, particularly prescription products, has become intense. As a result, increasingly high barriers are being erected to the entry of new products onto national markets. Political, economic, and regulatory developments may further complicate pricing negotiations, and pricing negotiations may continue after reimbursement has been obtained. Reference pricing used by various EEA countries, and parallel trade (arbitrage between low-priced and high-priced member states), can further reduce prices.

In addition, some EEA countries may require the completion of additional ~~data comparing~~studies that compare the cost-effectiveness of ~~our products~~a particular medicinal product candidate to ~~other~~currently available therapies. Health Technology Assessment, or HTA, of medicinal products is becoming an increasingly common part of the pricing and reimbursement procedures in some ~~EU member states,~~EEA countries, including those representing the larger markets. The HTA process, which is currently governed by national laws in each ~~EU member state,~~EEA country, is the procedure to assess therapeutic, economic and societal impact of a given medicinal product in the national healthcare systems of the individual country. The outcome of an HTA will often influence the pricing and reimbursement status granted to these medicinal products by the competent authorities of individual ~~EU member states.~~EEA countries. The extent to which pricing and reimbursement decisions are influenced by the HTA of the specific medicinal product currently varies between EEA countries. In December ~~June~~ 2021, the EU Parliament adopted the HTA Regulation which aims to harmonize the clinical benefit assessment of HTA across the ~~EU,~~EEA, the consequences of which remain unknown at this time. The anticipated revenue from and growth prospects for products in the EEA could be negatively affected by the HTA Regulation.

Legislators, policymakers and healthcare insurance funds in the EEA may continue to propose and implement cost-containing measures to keep healthcare costs down; particularly due to the financial strain that the COVID-19 pandemic has placed on national healthcare systems of the EEA countries. These measures could include limitations on the prices of medicinal products or the level of reimbursement available for these products from governmental authorities or third party payors. Further, an increasing number of EEA and other foreign countries use prices for medicinal products established in other countries as “reference prices” to help determine the price of the product in their own territory. Consequently, a downward trend in prices of medicinal products in some countries could contribute to similar downward trends elsewhere.

–Healthcare Reform

In the United States and some foreign jurisdictions, there have been, and continue to be, several legislative and regulatory changes and proposed changes regarding the healthcare system that could prevent or delay marketing approval of product candidates, restrict or regulate post-approval activities, and affect the ability to profitably sell product candidates for which marketing approval is obtained. Among policy makers and payors in the United States and elsewhere, there is significant interest in promoting changes in healthcare systems with the stated goals of containing healthcare costs, improving quality and/or expanding access. In the United States, the pharmaceutical industry has been a particular focus of these efforts and has been significantly affected by major legislative initiatives.

For example, the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act, or collectively, ACA, enacted in the United States in March 2010, has ~~already~~ had ~~and is expected to continue to have,~~ a significant impact on the healthcare industry. The ACA, ~~has expanded coverage for the uninsured while at the same time containing overall healthcare costs. With regard to pharmaceutical products,~~ among other things, ~~the ACA~~ expanded and increased industry rebates for drugs covered under Medicaid programs and made changes to the coverage requirements under the Medicare Part D program.

There have been judicial, executive and Congressional challenges, as well as ~~challenges by the executive branch to~~a number of proposed and enacted health reform measures that have impacted certain aspects of the ACA. For example, President Trump signed Executive Orders and other directives designed to delay the implementation of certain provisions of the ACA or otherwise circumvent some of the requirements for health insurance mandated by the ACA. Concurrently, Congress has considered legislation that would repeal or repeal and replace all or part of the ACA. While Congress has not passed comprehensive repeal legislation, it has enacted laws that modify certain provisions of the ACA such as removing penalties, starting January 1, 2019, for not complying with the ACA’s individual mandate to carry health insurance, eliminating the implementation of certain ACA-mandated fees, and increasing the point-of-sale discount that is owed by pharmaceutical manufacturers who participate in Medicare Part D. For example, on June 17, 2021, the U.S. Supreme Court dismissed a challenge on procedural grounds that argued that the ACA is unconstitutional in its entirety because the individual mandate was repealed by Congress. Thus, the ACA will remain in effect in its current form. Moreover prior to the U.S. Supreme Court ruling,August 16, 2022, President Biden signed ~~an Executive Order on January 28, 2021 to establish a Special Enrollment Period to seek~~the Inflation Reduction Act of 2022, or IRA, into law, which among other things, extends enhanced subsidies for individuals purchasing health insurance coverage in ACA marketplaces through plan year 2025. The IRA also eliminates the ~~ACA marketplace. The Executive Order also requires that some government agencies review~~"donut hole" under the Medicare Part D program beginning in 2025 by significantly lowering the beneficiary maximum out-of-pocket cost and reconsider their current policies and practices that may undermine access to health care, including, among others, the review of Medicaid demonstration and waiver policies including work requirements, and policies that may present unnecessary barriers to accessing health care, Medicaid or ACA coverage.creating a new manufacturer discount program. It is possible that the ACA will be subject to additional judicial or Congressional challenges in the future. It is unclear how any such challenges or the health reform measures of the Biden Administration will affect the ACA.

In addition, other legislative changes have been proposed and adopted in the United States since the ACA was enacted. For example, on August 2, 2011, the Budget Control Act of 2011 among other things, created measures for spending reductions by Congress. Specifically, the Joint Select Committee on Deficit Reduction was created to recommend to Congress proposals in spending reductions. The Joint Select Committee on Deficit Reduction did not achieve a targeted deficit reduction of at least $1.2 trillion for the years 2012 through 2021, thereby triggering the legislation’s automatic reduction to several government programs. This includes aggregate reductions to Medicare payments to providers of up to 2% per fiscal year, started in April 2013 and which, due to subsequent legislative amendments, including the BBA, will stay in effect through 2031 unless additional Congressional action is taken. These Medicare sequester reductions will be suspended from May 1, 2020 through March 31, 2022 due to the COVID-19 pandemic. Under current legislation, the actual reduction in Medicare payments will vary from 1% in 2022 to up to 3% in the final fiscal year of the sequester. Additionally, on January 2, 2013, President Obama signed into law the American Taxpayer Relief Act of 2012, or the ATRA. The ATRA, among other things, reduced Medicare payments to several providers and increased the statute of limitations period for the government to recover overpayments to providers from three to five years. Congress is considering additional health reform measures.

~~Recently,~~ there has been heightened governmental scrutiny over the manner in which manufacturers set prices for their marketed products. Such scrutiny has resulted in several recent U.S Presidential Orders, U.S. Congressional inquiries and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to drug pricing, review the relationship between pricing and manufacturer patient programs, reduce the cost of drugs under Medicare and reform government program reimbursement methodologies for drug products. At the federal level, for example, the Trump administration used several means to propose or implement a reform of drug pricing, notably through federal budget proposals, executive orders and political initiatives. For example, on July 24, 2020 and September 13, 2020, the Trump administration announced several executive orders related to prescription drug pricing, which attempted to implement several of the administration’s proposals. The FDA concurrently issued a rule and guidance in September 2020, implementing part of the Executive Order on Prescription Drug Importation, providing guidance to the States to prepare and submit importation plans for drugs from Canada. Further, on November 20, 2020,IRA, among other things (i) directs the Department of Health and Human Services, or HHS, ~~issued a final rule for~~to negotiate the ~~removal~~price of ~~safe harbor protection for rebates involving prescription pharmaceuticals to plan sponsors~~certain high-expenditure, single-source drugs and biologics covered under Medicare ~~part D, either directly or through the certain pharmacy benefit managers, unless the rebate is required by law. The implementation of the rule has been delayed by the Infrastructure Investment~~ and ~~Jobs Act to January 1, 2026. T The rule also created a new safe harbor protection for~~(ii) imposes rebates reflected at the point of sale, as well as a new safe harbor protection for certain fixed fees that manufacturers pay to pharmacy benefit managers for services rendered, of which the implementation has also been postponed until January 1, 2026. On November 20, 2020, the Center for Medicare & Medicaid Services issued an interim final rule implementing the Most Favored Nation Executive Order signed by President Trump, which would closely align payments for someunder Medicare Part B ~~drugs administered by physicians~~and Medicare Part D to ~~the lowest cost paid~~penalize price increases that outpace inflation. These provisions will take effect progressively starting in other economically advanced countries as of January 1, 2021 As a result of litigation challenging the Most Favored Nation model, on December 27, 2021, CMS published a final rule that rescinds the Most Favored Nation model interim final rule. In July 2021,fiscal year 2023, although they may be subject to legal challenges. Additionally, the Biden administration released an ~~executive order "Promoting Competition in the American Economy", with multiple provisions aimed at prescription drugs. In response to Biden's~~additional executive order on ~~September 9, 2021,~~October 14, 2022, directing HHS ~~released a Comprehensive Plan~~to report on how the Center for ~~Addressing High Drug Prices that outlines principles~~Medicare and Medicaid Innovation can be further leveraged to test new models for lowering drug ~~pricing reform~~costs for Medicare and sets out a variety of potential legislative policies that Congress could pursue as well as potential administrative actions HHS can take to advance these principles. No legislation or administrative actions have been finalized to implement these principles. In addition, Congress is considering drug pricing as part of other reform initiatives. It is unclear whether these or similar policy initiatives will be implemented in the future.Medicaid beneficiaries. At the state level, legislatures have increasingly passed legislation and implemented regulations designed to control pharmaceutical product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing. ~~Moreover, it is possible that additional governmental measures will be taken in response to the Covid-19 pandemic.~~

–Other U.S. Healthcare Laws and Compliance Requirements

Our business operations in the United States and our arrangements with clinical investigators, healthcare providers, consultants, third-party payors and patients expose us to broadly applicable federal and state fraud and abuse and other healthcare laws. These laws may impact, among other things, our research, and if approved, proposed sales, marketing and education programs of our drug candidates. The laws that may affect our ability to operate include, among others:

•the U.S. federal Anti-Kickback Statute, which prohibits, among other things, persons and entities from knowingly and willfully soliciting, receiving, offering or paying remuneration (including any kickback, bribe or rebate), directly or indirectly, in cash or in kind, to induce or reward, or in return for, either the referral of an individual for, or the purchase, lease, order, or recommendation of, an item, good, facility or service reimbursable under a federal healthcare program, such as the Medicare and Medicaid programs;

•federal civil and criminal false claims laws, including the federal civil False Claims Act, which can be enforced by private individuals acting on behalf of the federal government, through civil whistleblower or qui tam actions, and civil monetary penalty laws, which prohibits individuals and entities from, among other things, knowingly presenting, or causing to be presented, claims for payment from Medicare, Medicaid, or other third-party payors that are false or fraudulent, or making a false statement or record material to payment of a false claim or avoiding, decreasing, or concealing an obligation to pay money to the federal government, including for example, providing inaccurate billing or coding information to customers or promoting a product off-label;

•the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which created additional federal criminal statutes that prohibit, among other things, knowingly and willfully executing or attempting to execute a scheme to defraud any healthcare benefit program, knowingly and willfully embezzling or stealing from a healthcare benefit program, willfully obstructing a criminal investigation of a healthcare offense, and knowingly and willingly falsifying, concealing or covering up a material fact or making materially false statements, fictitious, or fraudulent statements in connection with the delivery of or payment for healthcare benefits, items, or services;

•the federal Physician Payments Sunshine Act, enacted as part of the ACA, which requires applicable manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid, or the Children’s Health Insurance Program, with specific exceptions, to track and annually report to CMS payments and other transfers of value provided to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), certain other healthcare professionals (such as physician assistants and nurse practitioners), and teaching hospitals and certain ownership and investment interests held by physicians and their immediate family ~~members. ;~~members;

•HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act, or HITECH, and their implementing regulations, which imposes certain requirements on certain healthcare providers, health plans, and healthcare clearinghouses, known as covered entities, and their business associates, which are individuals and entities that perform functions or activities on behalf of covered entities that involve protected health information, relating to the privacy, security and transmission of protected health information; and

•State and foreign equivalents of each of the above federal laws and regulations, such as: state anti-kickback and false claims laws which may apply to items or services reimbursed by any third-party payor, including commercial insurers; state marketing and/or transparency laws applicable to manufacturers that may be broader in scope than the federal requirements; state laws that require biopharmaceutical companies to comply with the biopharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government; state and local laws that require the registration of pharmaceutical sales representatives; and state and/or foreign laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and may not have the same effect as HIPAA, thus complicating compliance efforts.

The ACA broadened the reach of the federal fraud and abuse laws by, among other things, amending the intent requirement of the U.S. federal Anti-Kickback Statute and certain federal criminal healthcare fraud statutes. Pursuant to the statutory amendment, a person or entity ~~no longer needs~~does not need to have actual knowledge of these statutes or specific intent to violate them in order to have committed a violation. In addition, the ACA provides ~~that the government may assert~~ that a claim including items or services resulting from a violation of the U.S. federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the federal civil False Claims ~~Act or the civil monetary penalties laws.~~Act.

Efforts to ensure that our business arrangements with third parties comply with applicable healthcare laws involves substantial costs. It is possible that governmental authorities will conclude that our business practices may not comply with current or future statutes, regulations or case law involving applicable fraud and abuse or other healthcare laws. If our operations are found to be in violation of any of these laws or any other governmental regulations that may apply to us, we may be subject to, for example, significant administrative, civil, and/or criminal penalties, damages, fines, disgorgement, contractual damages, reputational harm, diminished profits and future earnings, imprisonment, exclusion from government funded healthcare programs, such as Medicare and Medicaid, additional reporting requirements and oversight if we become subject to a corporate integrity agreement or similar agreement to resolve allegations of non-compliance with these laws and the curtailment or restructuring of our operations. If the physicians or other healthcare providers or entities with whom we expect to do business are found to be not in compliance with applicable laws, they may be subject to significant administrative, civil, and/or criminal sanctions, including exclusions from government funded healthcare programs.


C.			Organizational Structure

In ~~2021,~~September 2022, we ~~announced that as part~~finalized the acquisition of ~~our new corporate strategy,~~Versantis AG, and its U.S.-based wholly-owned subsidiary, Versantis, Inc. Versantis, Inc. does not currently have any operational activities. For more information about the acquisition, see Note 30 - "Acquisitions ”.

In June 2023, we ~~expected to distinguish our pharmaceutical and diagnostic technologies activities, in order to ensure more independent management and growth. In light of~~ ~~the COVID-19 pandemic, the lack of approved therapeutic options in NASH and the current lack of reimbursement for NASHnext, our partner Labcorp has experienced~~liquidated Versantis Inc., a ~~slow commercial uptake. As a result, we~~wholly-owned subsidiary which did not have ~~decided to postpone the creation of a dedicated diagnostic entity in the near term.~~any operational activities.


D.			Property, Plants and Equipment

Our corporate headquarters are located in Loos, France. To date, the total surface occupied is approximately 5,500 square meters of office space. The lease for our Loos headquarters continues through March 2029. We also lease office space in Paris, France, ~~and,~~in Cambridge, Massachusetts for our U.S. subsidiary, ~~Genfit~~GENFIT Corp., and in ~~Cambridge, Massachusetts.~~Zurich, Switzerland, for our Swiss subsidiary, Versantis AG.


Item 4A.			Unresolved Staff Comments.

Not applicable.


Item 5.			Operating and Financial Review and Prospects.

Overview

We are a late-stage clinical biopharmaceutical company dedicated to the discovery and development of innovative drug candidates and diagnostic solutions targeting ~~metabolic and~~ liver-related diseases where there is considerable unmet medical need. We are a ~~leader~~pioneer in the ~~field~~discovery and development of ~~nuclear receptor-based drug discovery~~drugs for liver diseases with a rich history and strong scientific heritage spanning almost two decades. Since 2016, we had been evaluating our most advanced drug candidate, elafibranor, in a pivotal Phase 3 clinical trial (the RESOLVE-IT trial) as a potential treatment for nonalcoholic steatohepatitis, or NASH. , On May 11, 2020, we publishedOur pipeline now covers the topline data from the interim analysis of the RESOLVE-IT trial. In these interim results, elafibranor did not demonstrate a statistically significant effect on the primary surrogate endpoint which was NASH resolution without worsening of fibrosis nor did it achieve the key secondary endpoints. These results led us, after a detailed review of the whole dataset, to initiate the trial termination process for RESOLVE-IT at the end of July 2020 for lack of efficacy, but not due to safety reasons. In May 2021, we announced, following ~~the termination of all development of elafibranor in NASH and the redefinition of our clinical products portfolio, that we had redeployed our R&D effort across three franchises covering~~ therapeutic areas ~~where patients have little~~with the following drugs at different development stages (preclinical, Phase 1, Phase 2 and Phase 3), with different mechanisms of action:

Primary Bilary Cholangitis, or ~~no treatment and/or diagnostics options: cholestatic diseases,~~ PBC:

•Elafibranor

Acute on Chronic Liver Failure, ~~(ACLF),~~or ACLF:

•VS-01-ACLF,

•Nitazoxanide, or NTZ,

•SRT-015,

•CML-022,

Hepatic Encephalopathy, or HE:

•VS-02-HE

Cholangiocarcinoma, or CCA:

•GNS561

Urea Cycle Disorder, or UCD, and ~~diagnostics.~~Organic Acidemia, or OA:

~~Elafibranor is currently being evaluated~~•VS-01-HAC

In addition, our pipeline includes a diagnostic franchise including NIS2+® in Metabolic dysfunction-Associated Steatohepatitis (MASH, previously known as NASH, for nonalcoholic steatohepatitis) and TS-01 focusing on blood ammonia levels.

In September 2022, we acquired Versantis AG, a ~~potential treatment for primary biliary cholangitis, or PBC. PBC is an autoimmune disease unrelated~~private Swiss-based clinical stage biotechnology company, focused on addressing the growing unmet medical needs in liver diseases. With the acquisition, we added the following Versantis' assets to ~~the metabolic origins of NASH~~our pipeline: VS-01, VS-02 and is independent from our evaluation of elafibranor in NASH. Our phase 3 trial of elafibranor in PBC, ELATIVE, began in 2020. The first patient first visit in the ELATIVE trial took place on September 24, 2020. Enrollment is expected to be completed in the second quarter 2022 ~~for the double-blind part of ELATIVE, which is the part to be used to support accelerated approval and we remain committed to delivering ELATIVE topline data in the second quarter 2023.~~TS-01.

The worldwide development and commercialization rights in elafibranor for the treatment of PBC and other indications were licensed to Ipsen Pharma SAS, or Ipsen, through a partnership agreement signed in December 2021, the Ipsen Agreement, with the exception of Greater China, which is licensed to Terns Pharmaceuticals, Inc., or Terns, in ~~NASH~~MASH and PBC since June 2019. In June 2023, we and Ipsen announced positive 52-week interim topline data from the pivotal ELATIVE® Phase 3 trial.

~~In addition~~VS-01-ACLF, our first ACLF program, is currently in a Phase 2a proof of concept study (UNVEIL-IT®) and interim data from the trial are targeted for the second half of 2024.

Our second ACLF program is aimed at developing the repurposed drug nitazoxanide (NTZ) either as a standalone treatment or in combination with another treatment. A new formulation of NTZ is currently under development to ~~PBC, our cholestatic diseases program~~permit greater dosing flexibility and to optimize dose-response in patients with ACLF, which are known to have varying degrees of organ impairment or failure. The new formulation is also ~~includes cholangiocarcinoma or~~intended to optimize the benefit/risk profile in this patient population. A Phase 2a proof of concept study in patients with ACLF grades 1 and 2 is targeted to initiate in the first half of 2025.

We are also developing GNS561 in CCA following the execution in December 2021 of an exclusive license to develop and commercialize GNS561 in the United States, Canada and Europe (including United Kingdom and Switzerland) from Genoscience ~~Pharma,~~Pharma. Enrollment for ~~CCA. Our~~the Phase 21b/2a clinical trial for GNS561 began in ~~CCA~~2023 and is expected to ~~start in~~provide preliminary data by the ~~second half~~end of ~~2022.~~2024.

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~~The~~In 2023, we in-licensed two additional investigational drugs in ACLF. SRT-015 is an ASK1 inhibitor in-licensed from Seal Rock Therapeutics in acute liver diseases. It targets the inhibition of cellular apoptosis, inflammation and fibrosis. A First-in-Human study with an intravenous formulation of SRT-015 is planned in the first ~~program in our ACLF franchise aims at developing~~quarter of 2025. CLM-022 is a small molecule inhibitor targeting the ~~repurposed drug nitazoxanide (NTZ). A Phase 1 open-label, non-randomized, 2-center, repeated-dose, parallel-group study~~NLRP3 inflammasome in-licensed from Celloram. Preclinical Proof of Concept is expected to ~~provide preliminary insight into NTZ pharmacokinetics,~~be obtained or PK, and safety in the setting of hepatic impairment in the second half of 2022. A second Phase 1 study to evaluate NTZ PK and safety is planned to initiate in the first half of 2022. The results of these studies will inform the potential need for dose adjustment in future studies to be conducted in patients with cirrhosis and hepatic impairment.attained by end-2024.

A key differentiator of our development strategy is our ~~NASH~~MASH biomarker-based diagnostic program, called ~~NIS4,~~NIS4® and its improvement, NIS2+®, a technology which we are developing to power a new in vitro diagnostic, or IVD, test to identify patients with ~~NASH~~MASH who may be appropriate candidates for drug therapy. In January 2019, we entered into a first license agreement with Labcorp to allow Labcorp to develop and commercialize ~~NIS4~~NIS4® in the clinical research space through their drug development subsidiary, Covance. ~~Since then, Covance has made significant progress in the deployment of NIS4 in several clinical trials conducted by leading players in the pharmaceutical industry.~~ A second exclusive license agreement with Labcorp to allow them to develop and commercialize an LDT powered by ~~NIS4~~NIS4® technology for use in routine clinical diagnostic testing in the United States and Canada ~~was signed in September 2020~~ and in ~~April~~ 2021, Labcorp launched commercialization of ~~NASHnext,~~NASHNext®, an LDT powered by our ~~NIS4~~NIS4® technology. The technology is also licensed to Q Squared Solutions LLC (Q2) in the clinical research field.

~~Although~~In 2021, we recorded revenue ~~in 2019~~ from the receipt of an upfront payment under ~~our collaboration~~the Ipsen Agreement (part of which was recognized in 2022 and ~~license agreement with Terns Pharmaceuticals~~2023). In 2023, we recorded revenue from a first milestone payment from Ipsen, which was triggered by the acceptance of the NDA filing by the FDA and MAA by the EMA for accelerated approval of elafibranor in ~~2021 from the receipt of an upfront payment under our agreement with Ipsen,~~PBC in December 2023. However, we have never generated significant revenues from product sales. WeWhile we expect to receive additional milestone payments and revenues from the Ipsen agreement in 2024 if elafibranor receives marketing authorization in PBC and is commercialized, we do not expect to generate material revenue from other product sales unless and until we successfully complete clinical development of, obtain marketing approval for and commercialize our drug candidates and LDT and IVD ~~test.~~tests. Clinical development, regulatory approval and commercial launch of a product candidate or diagnostic can take several years and are subject to significant uncertainty.

Historically, we have financed our operations and growth through issuances of share capital and convertible bonds, through conditional advances and subsidies from Banque Publique d'Investissement (BPI France) ~~and~~, from research tax ~~credits.~~credits and through the upfront milestone of €120 million from the Ipsen agreement. In 2006, we completed the initial public offering of our ordinary shares on the Alternext market of Euronext in Paris and transferred to the Euronext Paris in April 2014. Between 2010 and 2016, we raised a total of over €220 million in gross proceeds from the issuance of ordinary shares. In October 2017, we issued €180 million in convertible bonds. In March 2019, we completed a global offering consisting of an initial public offering of our American Depositary Shares, or ADSs, in the United States, and a private placement of our ordinary shares in Europe and other countries outside the United States, including France. Aggregate gross proceeds from the global offering, before deducting underwriting discounts and commissions and offering expenses payable by us, were approximately $155.4 million. Additionally, in 2021, Ipsen also became a shareholder of GENFIT through the purchase of 3,985,239 newly issued shares representing 8% of GENFIT after issuance, via a €28 million investment. There have been no subsequent equity raises.

Since our inception, we have incurred significant operating losses. ~~Our net loss was €65.1 million and €101.2 million for the years ended December 31, 2019 and 2020, respectively.~~ For the year ended December 31, 2021, ~~we had a~~our net ~~profit of~~gain was €67.3 million, ~~owing~~primarily due to the upfront payment received from Ipsen. ~~Following~~For the ~~results of~~year ended December 31, 2022, our net loss was €23.7 million. For the Phase 3 RESOLVE-IT trial in the first half of 2020, we implemented a cost savings plan to reduce operational expenses, including a workforce reduction plan and eliminate non-essential expenses, which contributed to reducingyear ended December 31, 2023, our cash flows used in operating activities from €96.4 million in 2020 to €44.0 million in 2021 (excluding the upfront payment received from Ipsen in 2021). Nevertheless, as we continue our efforts to identify product candidates with the highest potential, conduct preclinical studies and clinical trials and advance the development of our diagnostic test, we expect that our cash used in operational activities will increase to €65 million in 2022 (excluding exceptional items of €30.0 million payable in 2022 in relation to the upfront payment received from Ipsen in late 2021, i.e. primarily VAT collected and corporate income tax, as well as potential costs and expenses in future business development activities such as in-licensing). This estimate takes into account our projected cash flows from operating activities and government funding of research programs. We have based this estimate on assumptions that may prove to be wrong. Our net losses may fluctuate significantly from quarter to quarter and year to year, notably depending on the timing of our clinical trials and our expenditures on other research and development activities. Also, we could use our available capital resources sooner than we currently expect.loss was €28.9 million.

Financial Operations Overview

Revenue and Other Income

For the year ended December 31, 2020, our revenue was €0.8 million, mainly due to a one-time transaction as well as the income recognized within the scope of our license agreements with Labcorp. For the year ended December 31, 2021, our revenue was €80.1 million, mainly from the receipt of the €120 million upfront payment from Ipsen, out of which €80 million is recognized as 2021 revenue, after deduction of €40 million deferred revenue, which will gradually be recognized as revenue following the completion of the ELATIVE double-blind study, pursuant to IFRS 15. Other income recognized in 2021 is related to licensing agreements with Labcorp for the deployment of NIS4 technology in NASH. For the year ended December 31, 2020, our revenue was €0.8 million, mainly due to a one-time transaction as well as the income recognized within the scope of our license agreements with Labcorp.

In 2019, we entered into two licensing agreements, one with Terns with respect to the development and commercialization of elafibranor in Greater China, or the Terns Agreement, and one with Covance, Labcorp’s drug development business, with respect to the development and deployment of a test powered by ~~NIS4~~NIS4® technology in the clinical research space. Pursuant to ~~our agreement with~~the Terns Agreement, we received an upfront payment of $35 million in 2019, and are eligible for up to $193 million in clinical, regulatory and commercial milestone payments, as well as mid-teen percentage royalties (For more information see Note ~~4.4.1~~ 29 - "Commitments and contingent liabilities"to our consolidated financial ~~statements)~~statements included in this annual report). In ~~September~~ 2020, we entered into a second agreement with Labcorp, for a five-year exclusive licensing agreement with Labcorp to develop and commercialize an LDT powered ~~by NIS4~~by NIS4® technology and its improvements in the clinical diagnostic ~~market.In~~market. In May 2021, we signed a worldwide, non-exclusive license agreement with Q Squared Solutions LLC, to broaden the availability of NIS4® technology and its improvements in the clinical research field.

In December 2021, we entered into ~~a long-term strategic partnership for global collaboration with~~the Ipsen Agreement granting Ipsen an exclusive worldwide (excluding Greater China which is licensed to Terns) license to develop, manufacture and commercialize elafibranor, for people living with PBC, and in other indications. Under the ~~agreement,~~Ipsen Agreement, Ipsen will pay ~~GENFIT~~us up to €480 million, ~~comprising~~which is comprised of an upfront cash payment of €120 million, as well as regulatory, commercial, and sales-based milestone payments of up to €360 million, plus tiered double-digit royalties of up to 20%. (For more information see Note 29 - "Commitments and contingent liabilities" to our consolidated financial statements included in this annual report). Other than pursuant to these three agreements, we do not expect to receive any revenue from any of our product candidates until we obtain regulatory approval and commercialize such products, or until we potentially enter into collaborative agreements with third parties for the development and commercialization of such candidates.

In 2022, we entered into the Inventory Purchase Agreement signed with Ipsen, pursuant to which Ipsen purchased inventory of elafibranor active pharmaceutical ingredient and drug product during the second half of 2022 with the prospect of transferring the conduct of the ELATIVE® study to Ipsen. In addition, we entered into the Transition Services Agreement with Ipsen, which essentially outlines the scope of services to facilitate the transition of some activities related to the Phase 3 clinical trial evaluating elafibranor in Primary Biliary Cholangitis.

In 2023, we entered into the Part B Transition Services Agreement with Ipsen, in order to facilitate the transition of certain services related to the Phase 3 ELATIVE® clinical trial until the complete transfer of the responsibility of the trial to Ipsen.

Our other income results principally from the research tax credits. We expect to continue to be eligible for these tax credits and subsidies for so long as we incur eligible expenses.

CIR Research Tax Credit

We benefit from a tax credit known as Crédit d’Impôt Recherche, or CIR, which is granted by French tax authorities to encourage companies to conduct technical and scientific research. Companies demonstrating that they have expenses that meet the required criteria, including research expenses located in France or within the European Union or in another state that is a party to the agreement in the European Economic Area that has concluded a tax treaty with France that contains an administrative assistance clause, receive a tax credit that can be used against the payment of French corporate income tax due for the fiscal year in which the expenses were incurred and the three fiscal years thereafter, or, as applicable, can be reimbursed for the excess portion. The expenses taken into account for the calculation of the CIR only involve certain eligible research and development expenses. The subcontracting expenses are limited to an amount equal to €10 million.

The main characteristics of the CIR are the following:

•the CIR results in a cash inflow from the tax authorities paid to us as we are not subject to corporate income tax;

•a company’s corporate income tax liability does not limit the amount of the CIR—a company which meets certain criteria in terms of sales, headcount or assets to be considered a small/~~mid size~~mid-size company and that does not pay any corporate income tax can request cash payment of the research tax credit; and

•the CIR is not included in the determination of the corporate income tax.

We have concluded that the CIR meets the definition of a government grant as defined in IAS 20, Accounting for Government Grants and Disclosure of Government Assistance, and, as a result, it has been classified as other income within operating income in our statement of operations.

Exchange Gain on trade receivables and liabilities

We also recognize in other operating income within “other income” the exchange gains on trade receivables because we determined that they are attributable to the related revenue and other income ~~initial~~initially recognized.

Operating Expenses

Research and Development Expenses

We engage in substantial research and development (R&D) efforts to develop our drug and diagnostic candidates. Research and development expenses include:

•raw materials and consumables, such as lab supplies, used in research and development activities;

•fees and costs paid to third parties, such as clinical research organizations and scientific advisors, for clinical trial and other research and development activities, including services subcontracted to research partners for technical or regulatory reasons;

•employee-related costs and costs related to external employees seconded to us for clinical development, biometrics and information technology; and

•intellectual property fees related to the filing of patents.

•~~The provision recognized in 2019 due to the research tax credit dispute with the French revenue services and reversed in 2020~~

Research and development activities are central to our business model. Drug candidates in later stages of clinical development generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials, such as the ~~RESOLVE-IT and ELATIVE~~ELATIVE® trials. We expect that our research and development expenses will increase compared to ~~2021~~2023 for the foreseeable ~~future, as~~future. As we continue to advance our ~~efforts to identify potential~~current product candidates, conduct preclinical studies and conduct clinical trials, we expect that our cash used in operational activities will amount to €75 million in 2024. This estimate takes into account our projected cash flows from operating activities and government funding of research programs. We have based this estimate on assumptions that may prove to be wrong. Our net losses may fluctuate significantly from quarter to quarter and year to year, notably depending on the timing of our clinical trials and ~~advance the~~our expenditures on other research and development ofactivities. Also, we could use our ~~diagnostic test.~~available capital resources sooner than we currently expect. They may also fluctuate depending on the next steps initiated in the clinical development of our drug candidates, new development programs, which we may decide to start, and progress in the development of our diagnostic ~~test. The impact of the RESOLVE-IT study in NASH on our 2022 results will be limited as the residual amount for termination costs is estimated to be €0.5 million.~~tests.

We generally do not track our research and development expenses by product candidate. However, the substantial majority of our direct expenses incurred, such as for contract research organizations, or CROs, and other contracted research and development activities, as well as raw materials, relate to elafibranor, our lead drug candidate.

General and Administrative Expenses

General and administrative expenses include:

•employee-related costs for executive, intellectual property, finance, legal and human resources and communications functions;

•facility-related costs;

•~~grants to The NASH Epidemiology Institute (formerly The NASH Education Program) for 2018 and 2019, primarily to finance International NASH Day;~~

•fees for third-party providers of administrative services, including legal, audit and accounting, press relations and communication services, security and reception and recruiting; and

•intellectual property fees for the registration and maintenance of our patents.

~~The cost-saving plan initiated in September 2020 has led to a decrease in general~~General and administrative expenses ~~in 2021, compared to 2020. However, expenses~~ will remain significant ~~over the next several years~~ due to expenses associated with being a public company in the United States, including costs related to audit, legal, regulatory and tax-related services associated with maintaining compliance with U.S. exchange listing and SEC requirements, director and officer insurance premiums, investor relations and litigation costs. In particular, we will continue to incur additional expenses associated with accounting and internal control over financial reporting to comply with the Sarbanes-Oxley Act of 2002 in the United States.

Marketing and Market Access Expenses

Marketing and market access expenses include:

•employee-related costs for marketing, and business development functions;

•facility-related costs; and

•fees for third-party providers of marketing and pre-commercialization services including market surveys, brand strategy, medical communication and market access services.

~~The cost-saving plan initiated in the summer of 2020 allowed us to decrease our marketing~~Reorganization and ~~market access expenses in 2021. We expect that they will not increase significantly in 2022.~~Restructuring Expenses

Reorganization and restructuring expenses include:

•~~the~~the accruals and provisions recognized within the scope of the reduction in force plan;

•the extraordinary amortization, loss of value and impairment of fixed assets recognized within the scope of the ~~reorganization of GENFIT;~~reorganization;

•the impairment of the right of use of the leased equipment and ~~premises,~~premises;

•the portion of the ~~OCEANE~~OCEANEs renegotiation expenses recognized in 2021; and

•the provision recognized for some of the costs of the closing process for the ~~RESOLVE-IT~~RESOLVE-IT® study, which, after detailed analysis, we concluded do not have any future economic advantage for the PBC program.

The impact of the RESOLVE-IT® study in MASH on our 2023 results was insignificant.

Financial Income (Expense)

Financial income relates primarily to interest income received from cash and cash equivalents deposits. Our cash and cash equivalents have been deposited primarily in cash accounts and term deposit accounts with short maturities, as well as medium term notes or ~~UCITS~~Undertaking for Collective Investment in Transferable Securities and therefore generate only a modest amount of interest income.

Financial expense relates primarily to interest expense on our outstanding convertible bonds as well as interest expense for bank loans and for leases. We also incur foreign exchange losses related to our purchases of services in U.S. dollars and Swiss Francs, which amounts are recorded as financial expense and interest expenses due to leases in application of ~~IFRS16.~~IFRS 16.

~~Financial~~In 2021, financial income ~~includes notably~~included the one-time buyback bonus of €35.6 million issued from the renegotiation of the OCEANEs completed in January ~~2021 (See~~ ~~note 2~~2 ~~"Financial Income"~~).2021.


A.			Operating Results

Our results of operations for the years ended December 31, ~~2019, 2020~~2021, 2022 and ~~2021~~2023 are summarized in the table below.

Notes Year ended
(in € thousands, except earnings per share data) 2019/12/31 2020/12/31 2021/12/31
Revenues and other income
Revenue 19 30,839 765 80,069
Other income 19 10,122 6,993 5,510
Revenues and other income 40,961 7,758 85,579
Operating expenses and other operating income (expenses)
Research and development expenses 20 (66,170) (59,097) (35,166)
General and administrative expenses 20 (17,265) (14,270) (16,153)
Marketing and market access expenses 20 (13,708) (11,216) (1,539)
Reorganization and restructuring expenses 20 — (5,308) (142)
Other operating income (expenses) 20 (1,649) (764) (763)
Operating income (loss) (57,832) (82,897) 31,816
Financial income (1) 22 5,221 6,544 44,780
Financial expenses 22 (13,110) (25,296) (7,122)
Financial profit (loss) (7,889) (18,752) 37,658
Net profit (loss) before tax (65,721) (101,649) 69,474
Income tax benefit (expense) 23 576 428 (2,215)
Net profit (loss) (65,144) (101,221) 67,259





	Notes	Year ended
(in € thousands, except earnings per share data)		2021/12/31	2022/12/31	2023/12/31

Revenues and other income
Revenue	7	80,069	20,195	28,565
Other income	7	5,510	6,371	9,610
Revenues and other income		85,579	26,566	38,176

Operating expenses and other operating income (expenses)
Research and development expenses	8	(35,166)	(35,818)	(46,503)
General and administrative expenses	8	(16,153)	(16,405)	(17,741)
Marketing and market access expenses	8	(1,539)	(992)	(876)
Reorganization and restructuring income (expenses)	8	(142)	11	505
Other operating expenses	8	(763)	(652)	(141)








Operating income (loss)		31,816	(27,289)	(26,580)

Financial income	10	44,780	8,212	3,680
Financial expenses	10	(7,122)	(4,758)	(5,614)
Financial profit (loss)		37,658	3,453	(1,934)

Net profit (loss) before tax		69,474	(23,836)	(28,514)

Income tax benefit (expense)	11	(2,215)	116	(380)

Net profit (loss)		67,259	(23,719)	(28,894)

Comparisons for the Years Ended December 31, ~~2020~~2022 and 2023

A discussion and analysis of our financial condition and operating results for the year ended December 31, 2022 as compared to the year ended December 31, 2021 is included in Item 5 of our Annual Report on Form 20-F for the year ended December 31, 2022, filed with the SEC on April 18, 2023 and is incorporated herein by reference.

Revenue

Revenue ~~of €0.8~~amounted to €20.2 million during the year ended December 31, ~~2020 was~~2022, which includes €15.9 million attributable to the ~~result of a one-time transaction and the~~partial recognition of the €40.0 million deferred income from 2021 related to the Ipsen Agreement, €1.0 million in revenue ~~under~~generated from the ~~Labcorp licensing agreements.~~services we rendered to Ipsen in accordance with the Transition Services Agreement signed in April 2022, which outlines the scope of services to facilitate the transition of certain activities related to the Phase 3 ELATIVE® clinical trial evaluating elafibranor in PBC and €3.3 million that was recognized as revenue in accordance with the Inventory Purchase Agreement signed with Ipsen in July 2022, pursuant to which Ipsen purchased inventory of the elafibranor active pharmaceutical ingredient and drug product during the second half of 2022 with the prospect of transferring the conduct of the ELATIVE® study to Ipsen.

Revenue ~~of €80.1~~amounted to €28.6 million during the year ended December 31, ~~2021~~2023. €13.3 million was attributable to a milestone invoiced to Ipsen in December 2023 in accordance with the ~~result~~Ipsen Licence and Collaboration Agreement. This milestone was earned following the NDA filing acceptance by the FDA and MAA filing acceptance by the EMA for accelerated approval of elafibranor. €8.7 million in revenue was attributable to the partial recognition of the ~~upfront payment for a licensing agreement with Ipsen recognized in 2021. Regarding the Application of IFRS15~~€40.0 million deferred income from 2021 related to the ~~IPSEN License~~Ipsen Licence and Collaboration Agreement. €6.5 million in revenue was generated from the services rendered under the Transition Services Agreement and Part B Transition Services Agreement, signed in ~~2021, see~~ ~~Note 1~~9 ~~"Operating Income"~~.April 2022 and September 2023 respectively by GENFIT and Ipsen, in order to facilitate the transition of certain services related to the Phase 3 ELATIVE® clinical trial until the complete transfer of the responsibility of the trial to Ipsen. €0.1 million was attributable to other ancillary activities.

Other Income

Other income for the years ended December 31, ~~2020~~2022 and ~~2021~~2023 consisted of the following:

Other income Year ended
(in € thousands) 2020/12/31 2021/12/31
CIR tax credit 6,020 5,282
Other operating income 968 223
Government grants and subsidies 5 5
TOTAL 6,993 5,510





Other income	Year ended
(in € thousands)	2022/12/31	2023/12/31
CIR tax credit	6,017	5,807
Other operating income	320	464
Government grants and subsidies	34	3,340
TOTAL	6,371	9,610

~~During the year ended December 31, 2020,~~Changes in other income ~~amounted to €7.0 million.~~

~~During the year ended December 31, 2021 other income amounted to €5.5 million.~~

~~The decrease in Other Income~~ compared to the previous year is mainly due to:

CIR tax credit

–Decreasing CIR tax credit (research tax credit granted by the French tax authorities) from ~~€7.9~~€6.0 million for ~~2020, and~~2022 to ~~€5.3~~€5.8 million for ~~2021~~2023 due to ~~lower~~less eligible research and development ~~activities~~expenditures in ~~2021 compared to 2020; as~~2023. As a ~~reminder, CIR tax credit for 2020 was partially balanced with an expense of €1.9 million related to~~result, the ~~settlement of a dispute regarding~~slight drop in the CIR in 2023 is mainly linked to a reduction in eligible personnel costs.

Note: There is currently a tax ~~credit for~~inspection taking place by the ~~years 2010, 2011, 2012 and 2014; and~~French tax authorities. For further information, see N ote 11 - "Income ta x ".

Other operating income

–~~Decreasing~~Increasing foreign exchange gains related to trade receivables, which is included in ~~the Operating~~other operating income, ~~which~~and amounted to ~~€0.2~~€0.5 million in ~~2021,~~2023, compared to ~~€1.0~~€0.3 million in ~~2020.~~2022.

Government grants and subsidies

–The one-time cancellation of €3.2 million refundable government grant from Bpifrance (the BPI France IT-DIAB) as part of a framework innovation aid agreement involving several scientific partners and for which the Group was the lead partner. For further information refer to Note 20.2.1 - "Breakdown of other loans and borrowings - Refundable and conditional advances" to our consolidated financial statements included in this annual report.

Operating Expenses

The tables below summarize our operating expenses for the years ended December 31, ~~2020~~2022 and ~~2021.~~2023.

Operating Expenses for the Year Ended December 31, ~~2021~~2023

Operating expenses and other operating income (expenses) Year ended Of which :
2021/12/31 Raw Contracted Employee Other Depreciation, Gain /
materials research and expenses expenses amortization (loss) on
and development (maintenance, and disposal of
consumables activities fees, travel, impairment property,
used conducted by taxes…) charges plant and
(in € thousands) third parties equipment
Research and development expenses (35,166) (1,305) (18,808) (8,192) (4,593) (2,247) (19)
General and administrative expenses (16,153) (161) (85) (7,379) (8,003) (541) 15
Marketing and market access expenses (1,539) (1) (1) (783) (741) (13) —
Reorganization and restructuring expenses (142) (5) — — (2,343) 2,206 —
Other operating income (expenses) (763) — — — (338) 4 (429)
TOTAL (53,763) (1,472) (18,895) (16,354) (16,019) (591) (433)
(*) : including reversals





Operating expenses and other operating income (expenses)	Year ended	Of which :
	2023/12/31	Raw	Contracted	Employee	Other	Depreciation,	Gain /
		materials	research and	expenses	expenses	amortization	(loss) on
		and	development		(maintenance,	and	disposal of
		consumables	activities		fees, travel,	impairment	property,
		used	conducted by		taxes…)	charges	plant and
(in € thousands)			third parties				equipment
Research and development expenses	(46,503)	(1,831)	(23,455)	(12,475)	(7,452)	(1,291)	—
General and administrative expenses	(17,741)	(337)	(205)	(7,486)	(9,396)	(317)	—
Marketing and market access expenses	(876)	(4)	(1)	(556)	(300)	(14)	—
Reorganization and restructuring expenses	505	—	—	—	—	505	—
Other operating income (expenses)	(141)	—	—	—	(222)	—	81
TOTAL	(64,756)	(2,172)	(23,661)	(20,517)	(17,370)	(1,117)	81

Operating Expenses for the Year Ended December 31, ~~2020~~2022

Operating expenses and other operating income (expenses) Year ended Of which :
2020/12/31 Raw Contracted Employee Other Depreciation, Gain /
materials research and expenses expenses amortization (loss) on
and development (maintenance, and disposal of
consumables activities fees, travel, impairment property,
used conducted by taxes…) charges plant and
(in € thousands) third parties equipment
Research and development expenses (59,097) (1,876) (39,216) (11,554) (5,465) (985) —
General and administrative expenses (14,270) (202) (92) (6,936) (6,545) (495) —
Marketing and market access expenses (11,216) (7) (2) (1,298) (9,818) (90) —
Reorganization and restructuring expenses (5,308) — — 8 (2,141) (3,175) —
Other operating income (expenses) (764) — — — (684) — (80)
TOTAL (90,655) (2,085) (39,310) (19,779) (24,655) (4,746) (80)
(*) : including reversals





Operating expenses and other operating income (expenses)	Year ended	Of which :
	2022/12/31	Raw	Contracted	Employee	Other	Depreciation,	Gain /
		materials	research and	expenses	expenses	amortization	(loss) on
		and	development		(maintenance,	and	disposal of
		consumables	activities		fees, travel,	impairment	property,
		used	conducted by		taxes…)	charges	plant and
(in € thousands)			third parties				equipment
Research and development expenses	(35,818)	(1,876)	(17,407)	(10,029)	(5,177)	(1,328)	—
General and administrative income (expenses)	(16,405)	(248)	(71)	(6,772)	(9,168)	(146)	—
Marketing and market access expenses	(992)	(3)	(1)	(565)	(416)	(6)	—
Reorganization and restructuring income (expenses)	11	—	—	—	—	11	—
Other operating income (expenses)	(652)	—	—	—	(667)	—	16
TOTAL	(53,855)	(2,128)	(17,479)	(17,366)	(15,429)	(1,469)	16

Research and Development Expenses

~~Research and development expenses totaled €59.1 million, or 65.2% of our total operating expenses, for~~For the year ended December 31, ~~2020.~~2022, research and development expenses totaled €35.8 million, or 66.5% of our total operating expenses. These expenses ~~consisted notably~~were comprised of ~~€39.2~~€17.4 million in contracted research and development conducted by third parties, ~~€11.6~~€10.0 million in employee expenses, ~~and €1.9~~€5.2 million in ~~consumables. The clinical development costs related to the RESOLVE-IT Phase 3 trial evaluating elafibranor~~other expenses, €1.3 million in NASH remained high notwithstanding the decision made in July 2020 to terminate the study. The suspension or termination of some Phase 1 and Phase 2 trials related to NASH contributed to the decrease in contracting costs for 2020 compared to the previous year. To a lesser extent, the development costs related to the PBC and NTZ programs also generated contracting costs in 2020, but those were much less significant than the aforementioned trials.

We also incurred €11.6 million of employee-related expenses, consisting of wages, salaries, social security and pension costs and share-based compensation paid to employees in research and development functions. The changes in employee expenses for employees in research and development were mainly due to the reduction in force (82 vs. 127 employees) balanced with the change in employee profile, noting that bonuses granted to these employees for their involvement in the development of the Group affected these expenses in 2019 and such bonuses were not granted in 2020.

~~The~~ depreciation, amortization and impairment charges ~~amounted to €2.9 million reduced by the reversal of a provision of~~and €1.9 million ~~which was recognized~~ in ~~2019 relating to the research tax credit dispute with the French revenue services.~~raw materials and consumables.

~~Research and development expenses totaled €35.2 million, or 65.4% of our total operating expenses, for~~For the year ended December 31, ~~2021.~~2023, research and development expenses totaled €46.5 million, or 71.3% of our total operating expenses. These expenses were comprised ~~€18.8~~of €23.5 million in contracted research and development conducted by third parties, ~~and~~€12.5 million in employee expenses, €7.5 million in other expenses, €1.3 million in depreciation, amortization and impairment charges and €1.8 million in raw materials and consumables.

The ~~clinical~~increase of €6.1 million in contracted research and development conducted by third parties is mainly due to:

–Increasing costs related to the ~~RESOLVE-IT Phase 3 trial evaluating elafibranor in NASH continued to decrease over 2021 following the decision made in July 2020 to terminate the study. The suspension or termination~~GNS 561 product candidate of some Phase 1 and Phase 2 trials related to NASH contributed to the decrease in contracting costs for 2021. The decrease in the development costs related to these trials in NASH was partly balanced with increasing development€4.8 million,

–Increasing costs related to the ~~PBC~~VS-01 product candidate of €4.0 million,

–Decreasing costs related to the NTZ product candidate of €3.7 million,

–Decreasing costs related to the elafibranor program in Primary Sclerosing Cholangitis, or PSC, of €0.2 million,

–Increasing costs related to NIS4® and ~~NTZ programs.~~its improvements of €0.1 million, and

~~We also incurred €8.2~~–Accrual reversals of €1.1 million related to the RESOLVE-IT® study in MASH in 2022 which did not repeat in 2023.

The increase of ~~employee-related~~€2.5 million in employee expenses, consisting of wages, salaries, social security, ~~and~~ pension costs and share-based compensation paid to employees in the research and development ~~functions. The changes in employee expenses for employees in research and development were~~function is mainly due to ~~the reduction~~an increase in ~~force (73~~workforce (91 employees in 2022 vs. ~~82 employees)~~96 employees in 2023).

The ~~depreciation, amortization and impairment charges impacted the results by~~increase of €2.2 million ~~i.e. a €0.7~~in other expenses is mainly due to strategic consulting R&D services amounting to €1.4 million, ~~decrease compared to 2020 (after adjustment for the reversal, in 2020,~~increased intellectual property costs of ~~the €1.9~~€0.2 million, ~~provision~~increased costs related to ELATIVE® of €0.2 million, and increased costs related to VS-01 and the ~~settlement~~Versantis subsidiary of ~~the research tax credit dispute with the French revenue services).~~€0.4 million.

We expect our research and development expenses to increase in ~~the foreseeable future~~2024 compared to ~~2021,~~2023, as we continue our efforts to identify potential product candidates, conduct preclinical studies and clinical trials and advance the development of our diagnostic ~~test.~~tests. They may fluctuate depending on the next steps initiated in the clinical development of our drug candidates, new development programs, which we may decide to start, and progress in the development of our diagnostic ~~test. The impact of the RESOLVE-IT study in NASH on our 2022 results will be limited as the residual amount for termination costs is estimated to be lower than €0.5 million.~~tests.

General and Administrative Expenses

~~General and administrative expenses totaled €14.3 million, or 15.7% of our total operating expenses, for~~For the year ended December 31, ~~2020.~~2022, general and administrative expenses totaled €16.4 million, or 30.5% of our total operating expenses. These expenses ~~consisted~~were composed primarily inof employee-related expenses, consisting of wages, salaries, social security and pension costs and share-based compensation paid to employees in general and administrative function ~~for €6.9~~of €6.8 million, as well as ~~€6.5~~€9.2 million in other expenses. The reduction in non-R&D and marketing employee expenses was mainly due to the reduction in force (— vs. — employees), and the reduction in compensation as bonuses granted to these employees for their involvement in the development of the Group which affected these expenses in 2019 and such bonuses were not granted in 2020, with the impact being partly balanced with the change in profile of these employees.

The impact of the insurance specific to the year of the IPO and costs following the listing on NASDAQ in 2019 mainly explain the relative decrease of general and administrative expenses in operational expenses for 2020.

~~General and administrative expenses totaled €16.2 million, or 30.0% of our total operating expenses, for~~For the year ended December 31, ~~2021.~~2023, general and administrative expenses totaled €17.7 million, or 27.2% of our total operating expenses. These expenses ~~consisted~~were composed primarily inof employee-related expenses, consisting of wages, salaries, social security and pension costs and share-based compensation paid to employees in general and administrative function ~~for €7.4~~of €7.5 million, as well as ~~€8.0~~€9.4 million in other expenses.

The increase of €0.7 million in ~~non-R&D and marketing~~ employee expenses ~~was~~consisting of wages, salaries, social security, pension costs and share-based compensation paid to employees in the general and administrative function is mainly due to ~~the~~an increase in ~~force (—~~workforce (57 employees in 2022 vs. ~~— employees)~~63 employees in 2023).

The increase of €0.2 million in other expenses in the general and administrative ~~expenses was~~function is mainly due to ~~increasing directors and officers insurance premiums.~~increased consulting fees related to the Versantis subsidiary.

The general and administrative expenses will remain significant ~~over the next several years~~ due to expenses associated with being a public company in the United States, including costs related to audit, legal, regulatory and tax-related services associated with maintaining compliance with U.S. exchange listing and SEC requirements, director and officer insurance premiums, investor relations and litigation costs. In particular, we will continue to incur additional expenses associated with accounting and internal control over financial reporting to comply with the Sarbanes-Oxley Act of 2002 in the United States.

In addition, we will also incur future expenses associated with the Corporate Sustainability Reporting Directive (CSRD).

Marketing and Market Access Expenses

~~Marketing~~For the year ended December 31, 2022, marketing and market access expenses totaled ~~€11.2~~€1.0 million, or ~~12.4%~~1.8% of our total operating ~~expenses, for the year ended December 31, 2020.~~expenses. These expenses consisted primarily of €10 million of other expenses, in particular, related to preparation for the potential marketing of elafibranor and NIS4 in NASH. The services performed include market surveys, brand strategy, medical communication and market access services. We also incurred €1.3 million in employee-related expenses, consisting of wages, salaries, social security and pension costs paid to employees in marketing and business development functions. This decrease of €1.5 million was primarily due to the cost saving plan linked to the termination of the development program of elafibranor in NASH.

~~Marketing and market access expenses totaled €1.5 million, or 2.9% of our total operating expenses, for the year ended December 31, 2021. These expenses consisted primarily of €0.7~~€0.4 million of other expenses, including market surveys, brand strategy, medical communication and market access services. We also incurred ~~€0.8~~€0.6 million in employee-related expenses, consisting of wages, salaries, social security and pension costs paid to employees in marketing and business development functions.

This decrease of €9.7 million was primarily due to the cost saving plan linked to the termination of the development program of elafibranor in NASH, which allowed us to effectively terminate the other expenses related to preparation for the potential marketing of elafibranor in NASH. The reduction in marketing and market access employee expenses was mainly due to the reduction in force (5 vs. 2 employees).

~~We anticipate that our marketing and market access costs will not increase significantly in 2022.~~

~~Reorganization and Restructuration Expenses~~

~~Reorganization and restructuration expenses totaled €5.3 million, or 5.9% of our total operating expenses, for~~For the year ended December 31, ~~2020.~~2023, marketing and market access expenses totaled €0.9 million, or 1.3% of our total operating expenses. These expenses consisted primarily of expenses and accruals related to employees within the scope of the reduction in force (Plan de Sauvegarde de l’Emploi or PSE) of €1.9 million, the part of renegotiation fees for the OCEANE recognized in 2020 for €0.8 million, the amortization and impairment loss of fixed assets recognized following the reorganization, the impairment of rights of use of leased premises and leased equipment notably for €2.2 million, and the provision of €0.4 million recognized for some termination costs of the RESOLVE-IT study.

Reorganization and restructuration expenses totaled €0.1 million, or 0.3% of our total operating expenses, for the year ended December 31, 2021. These expenses consisted primarily of the part of renegotiation fees for the OCEANE recognized in 2021 for €2.3 million, the reversal of the impairment of rights related to the use of leased premises for €0.7 million, following the relocation of our Paris office, and to leased equipment for €0.4 million, following the sale of certain equipment, the reversal of amortization and impairment loss related to fixed assets for €0.4 million, the reversal of accruals related to employees within the scope of the reduction in force (Plan de Sauvegarde de l’Emploi or PSE) for €0.4 million and the reversal of the provision of €0.4 million previously recognized for some termination costs of the RESOLVE-IT study.

~~Financial Income (Expense)~~

Our net financial expense for the year ended December 31, 2020 was €18.8 million, consisting primarily of €11.6 million of interest expense on our convertible bonds, and €13.5 million of foreign exchange losses, offset partially by €5.0 million in foreign exchange gain on cash and cash equivalents and €1.4 million in interest income. The exchange result was a loss of €8.5 million and is notably related to the exchange rate fluctuations on the cash held in US dollars, as the Company made the decision to keep part of its cash in US dollars. These cash holdings in US dollars are to be used to pay directly expenses in US dollars (natural currency hedge).

Our net financial income for the year ended December 31, 2021 was €37.7 million, consisting primarily of the financial income of €35.6 million corresponding to a repurchase bonus following the renegotiation of the OCEANEs in January 2021, €4.8 million of interest expense on our convertible bonds, €8.9 million in foreign exchange gain on cash and cash equivalents, offset partially by €2.2 million of foreign exchange losses, and €0.3 ~~million in interest income.~~

The exchange result was a gain of €6.7 million and is notably related to the exchange rate fluctuations on the cash held in US dollars, as the Company made the decision to keep part of its cash in US dollars. These cash holdings in US dollars are to be used to pay directly expenses in US dollars (natural currency hedge).

~~Comparisons for the Years Ended December 31, 2019 and 2020~~

~~Revenue~~

Revenue of €30.8 million during the year ended December 31, 2019 related to the recognition of the revenue related to the license transferred to Terns under the Terns licensing agreement, after deduction of deferred revenue. Deferred revenue amounted to €0.1 million, which corresponds to our expected revenue in relation with the costs to be incurred to assist Terns under the Terns licensing agreement.

Revenue of €0.8 million during the year ended December 31, 2020 was the result of a one-time transaction and the recognition of the revenue under the Labcorp licensing agreements. The decrease in revenue compared to 2019 is due to the one-time nature of the payment for a licensing agreement with Terns recognized in 2019.

~~Other Income~~

~~Other income for the years ended December 31, 2019 and 2020 consisted of the following:~~

Other income Year ended
(in € thousands) 2019/12/31 2020/12/31
CIR tax credit 8,125 6,020
Other operating income 1,992 968
Government grants and subsidies 5 5
TOTAL 10,122 6,993

During the year ended December 31, 2019 we had foreign exchange gains linked to trade receivables linked to services denominated in U.S. dollars, which amounted to €2.0 million and are recorded as Other operating income (see table above ).

~~During the year ended December 31, 2020, other income amounted to €7.0 million. The decrease compared to the previous year is mainly due to:~~

–the effect of the expense recorded in 2020 related to the end of the research tax credit dispute for 2010, 2011, 2012 and 2014. This expense was balanced with the reversal of the provision recognized in 2019. The research tax credit for the year 2020 amounted to €7.9 million; and

–~~the decrease in foreign exchange gains related to trade receivables, which amounted to €1.0 million and are recorded as Other operating income.~~

~~Operating Expenses~~

~~The tables below summarize our operating expenses for the years ended December 31, 2019 and 2020.~~

~~Operating Expenses for the Year Ended December 31, 2019~~

Operating expenses and other operating income (expenses) Year ended Of which :
2019/12/31 Raw Contracted Employee Other Depreciation, Gain /
materials research and expenses expenses amortization (loss) on
and development (maintenance, and disposal of
consumables activities fees, travel, impairment property,
used conducted by taxes…) charges plant and
(in € thousands) third parties equipment
Research and development expenses (66,170) (2,017) (41,509) (11,740) (6,188) (4,716) 0
General and administrative expenses (17,265) (177) (59) (7,598) (8,972) (458) 0
Marketing and market access expenses (13,708) (8) 0 (1,645) (11,979) (76) 0
Reorganization and restructuring expenses 0 0 0 0 0 0 0
Other operating income (expenses) (1,649) 0 0 0 (1,668) 0 19
TOTAL (98,793) (2,202) (41,568) (20,984) (28,807) (5,251) 19
(*) : including reversals

~~Operating Expenses for the Year Ended December 31, 2020~~

~~Research and Development Expenses~~

Research and development expenses totaled €66.2 million, or 67% of our total operating expenses, for the year ended December 31, 2019. These expenses consisted primarily of €41.5 million in contracted research and development conducted by third parties, the substantial majority of which were incurred in connection with the progression of our RESOLVE-IT Phase 3 trial. The clinical development costs related to the RESOLVE-IT Phase 3 trial, were lower in 2019 than in 2018 due in particular to a revised estimate of expensed yet unbilled investigator costs which led a decrease in costs of €7.0 million. To a lesser extent, the development costs related to the PBC and NTZ programs also generated subcontracting costs in 2019.

We also incurred €11.7 million of employee-related expenses, consisting of wages, salaries, social security and pension costs and share-based compensation paid to employees in research and development functions and patents. This increase of €2.3 million of employee-related expenses over the prior year was primarily due to changes in seniority, increase in headcount, wage increases and bonuses for our workforce in the research and development functions. Other expenses of €6.2 million consisted primarily of maintenance and other facility costs, as well as employee travel expenses and third-party fees incurred for seconded employees in research and development functions.

~~The depreciation, amortization and impairment charges totaled €4.7 million, consisting of a provision of €1.9 million with respect to the research tax credit (more information is provided in~~ ~~Note 2~~0 ~~of our consolidated financial statements for the year ended December 31, 2020), and due to additional depreciation due to the adoption of IFRS 16.~~

Research and development expenses totaled €59.1 million, or 65% of our total operating expenses, for the year ended December 31, 2020. These expenses consisted primarily of €39.2 million in contracted research and development conducted by third parties and €1.9 million of consumables. The clinical development costs related to the RESOLVE-IT Phase 3 trial evaluating elafibranor in NASH remained high notwithstanding the decision made in July 2020 to terminate the study. The suspension or termination of some Phase 1 and Phase 2 trials related to NASH contributed to the decrease in contracting costs for 2020. To a lesser extent, the development costs related to the PBC and NTZ programs also generated contracting costs in 2020, but those were much less significant than the aforementioned trials.

We also incurred €11.6 million of employee-related expenses, consisting of wages, salaries, social security and pension costs and share-based compensation paid to employees in research and development functions. The changes in employee expenses for employees in research and development are mainly due to the reduction in force (82 vs. 127 employees) balanced with the change in employee profile, noting that bonuses granted to these employees for their involvement in the development of the Group affected these expenses in 2019 and such bonuses were not granted in 2020.

The changes in depreciation, amortization and impairment charges is mainly related to the provision of €1.9 million recognized in 2019 due to the research tax credit dispute with the French revenue services and reversed in 2020, and to the consequence of the application of IFRS16 in 2019, while in 2020, the amortization impacted the results for up to €2.9 million.

We expect our research and development expenses to decrease in the foreseeable future compared to 2020 . They will nonetheless remain significant and may increase depending on the next steps initiated in the clinical development of our drug candidates and progress in the development of our diagnostic test. Moreover, the RESOLVE-IT study in NASH will continue to impact our 2021 results insofar as the residual amount for termination costs is estimated to be between €8 and 10 million in 2021.

~~General and Administrative Expenses~~

~~General and administrative expenses totaled €17.3 million, or 17% of our total operating expenses, for the year ended December 31, 2019. These expenses consisted primarily of €9.0~~ million of other expenses, in particular, related to the insurance costs and audit and communication costs and third-party fees incurred for seconded employees in general and administrative functions. This increase compared to 2018 of €3.5 million was primarily due to an increase related to the insurance costs and costs following the listing on NASDAQ .We also incurred €7.6 million in employee-related expenses, consisting of wages, salaries, social security and pension costs and share-based compensation paid to employees in general and administrative functions. This increase compared to 2018 of €3.8 million was primarily due to an increase in headcount, changes in seniority, wage increases and to the bonuses paid to employees in those functions.

General and administrative expenses totaled €14.3 million, or 15.7% of our total operating expenses, for the year ended December 31, 2020. These expenses consisted primarily in employee-related expenses, consisting of wages, salaries, social security and pension costs and share-based compensation paid to employees in general and administrative function for €6.9 million, as well as €6.5 million in other expenses. The reduction in non-R&D and marketing employee expenses was mainly due to the reduction in force (— vs. — employees), and the reduction in compensation as bonuses granted to these employees for their involvement in the development of the Group which affected these expenses in 2019 and such bonuses were not granted in 2020, with the impact being partly balanced with the change in profile of these employees.

We anticipate that the cost-saving plan initiated in September 2020 will lead to a decrease in general and administrative expenses over 2021. However, they will remain significant due to expenses associated with being a public company in the United States, including costs related to audit, legal, regulatory and tax-related services associated with maintaining compliance with U.S. exchange listing and SEC requirements, director and officer insurance premiums, investor relations and litigation costs. In particular, we will continue to incur additional accounting expenses to comply with the Sarbanes-Oxley Act of 2002 in the United States.

~~Marketing and Market Access Expenses~~

Marketing and market access expenses totaled €13.7 million, or 14% of our total operating expenses, for the year ended December 31, 2019. These expenses consisted primarily of €12.0 million of other expenses, in particular, related to preparation for the potential marketing of elafibranor and NIS4 in NASH. The services performed include market surveys, brand strategy, medical communication and market access services. We also incurred ~~€1.6~~€0.6 million in employee-related expenses, consisting of wages, salaries, social security and pension costs paid to employees in marketing and business development functions. ~~This increase of €1.2 million was primarily due to an increase in headcount, changes in seniority, wage increases.~~

Marketing and market access expenses totaled €11.2 million, or 12% of our total operating expenses, for the year ended December 31, 2020. These expenses consisted primarily of €10 million of other expenses, in particular, related to preparation for the potential marketing of elafibranor and NIS4 in NASH. The services performed include market surveys, brand strategy, medical communication and market access services. We also incurred €1.3 million in employee-related expenses, consisting of wages, salaries, social security and pension costs paid to employees in marketing and business development functions. This decrease of €1.5 million was primarily due to the cost saving plan linked to the termination of the development program of elafibranor in NASH.

We ~~expect~~do not anticipate that ~~the decrease in~~ our marketing and market access costs ~~initiated in the summer of 2020 with our cost-saving plan~~ will ~~continue in 2021.~~increase significantly.

Reorganization and Restructuration Expenses

~~Reorganization~~For the year ended December 31, 2022, reorganization and restructuration expenses ~~included mainly expenses and accruals related to employees within~~were not significant.

For the ~~scope~~year ended December 31, 2023, the €0.5 million amount consisted of unused office space provision reversals as the RESOLVE-IT® study is complete. As a reminder, a provision was recorded in 2020 as part of the reduction in force (Plan de Sauvegarde de l’Emploi or PSE) of €1.9 million, the part of renegotiation fees for the OCEANE recognized in 2020 for €0.8 million, the amortization and impairment loss of fixed assets recognizedreorganization following the reorganization, the impairment of rights of use of leased premises and leased equipment notably for €2.2 million, and the provision of €0.4 million recognized for some termination costs of the RESOLVE-IT study.

RESOLVE-IT® failure.

Financial Income (Expense)

Our net financial income ~~(expense)~~ for the year ended December 31, ~~2019~~2022 was ~~€(7.9)~~€3.5 million, consisting primarily of ~~€11.3 million of interest expense on our convertible bonds, and €1.7 million of foreign exchange losses, offset partially by € 2.3~~€7.5 million in foreign exchange gain on cash and cash equivalents and ~~€2.6~~€0.7 million in interest ~~income. The increase~~income, partially offset by €4.3 million of interest expense, €0.3 million in foreign exchange losses, and €0.1 million in other financial ~~income is due to the increase in interest on term accounts as we keep some of our cash in US dollars. Interest rates received on investments in US dollars were higher than for investments in euros.~~

expenses.

Our net financial ~~expense~~loss for the year ended December 31, ~~2020~~2023 was ~~€(18.8)~~€1.9 million, consisting primarily of ~~€11.6 million of interest expense on our convertible bonds, and €13.5 million of foreign exchange losses, offset partially by €5~~€0.5 million in foreign exchange gain on cash and cash equivalents, ~~and €1.4~~€3.2 million in interest ~~income.~~ income, offset by €4.6 million of interest expense, and €1.0 million in foreign exchange losses.

The foreign exchange result was a net loss of ~~€8.5~~€0.5 million and is notably related to the exchange rate fluctuations on the cash held in USU.S. dollars, as ~~the Company~~we made the decision to keep part of ~~its~~our cash in USU.S. dollars. These cash holdings in USU.S. dollars are to be used to pay ~~directly~~ expenses in USU.S. dollars directly (natural currency hedge).


B.			Liquidity and Capital Resources

Overview

As of December 31, ~~2019, 2020~~2022 and ~~2021,~~2023, we had ~~€276.7 million, €171.0~~€136.0 million and ~~€258.8~~€77.8 million respectively, in cash and cash equivalents. In addition, as of December 31, 2022, we had €4.6 million in other current financial assets which consisted of a single short-term instrument whose term was 180 days. Cash, cash equivalents, and other current financial assets are used to finance key business activities, notably research and developments expenses.

Since our inception, we have financed our operations primarily through the issuance of new ordinary shares and bonds convertible into new ordinary shares in public offerings and private financing ~~transactions.~~transactions, as well as an upfront payment pursuant to our collaboration with Ipsen. In 2006, we completed the initial public offering of our ordinary shares on the Alternext market of Euronext in Paris. The listing of our ordinary shares was transferred to the regulated market of Euronext Paris in 2014. Between 2010 and 2016, we raised a total of over €220.0 million in gross proceeds from the issuance of additional ordinary shares for cash. In October 2017, we issued €180.0 million in bonds convertible into new ordinary shares or exchangeable for existing ordinary shares. In March 2019, we completed a global offering consisting of an initial public offering of our ~~American Depositary Shares, or~~ ADSs in the United States, and a private placement of our ordinary shares in Europe and other countries outside the United States, including France. Aggregate gross proceeds from the global offering, before deducting underwriting discounts and commissions and offering expenses paid by us, were approximately $155.4 million. Additionally, in 2021, Ipsen also became a shareholder of GENFIT through the purchase of 3,985,239 newly issued shares representing 8% of GENFIT S.A after issuance, via a €28 million investment. There have been no subsequent equity raises.

We have also financed our operations through ~~historical~~ collaborative research alliances, ~~as well as research tax credits and subsidies granted by various public institutions,~~ such as ~~BPI France Institutions. We also entered into conditional~~the Terns Agreement and repayable advances agreements with governmental entities and had a liability of €3.2 million, €3.2 million and €3.2 million associated with these types of arrangements as of December 31, 2019, 2020 and 2021, respectively. Additional information is provided in the ~~note 12~~Ipsen Agreement. Pursuant to ~~our consolidated financial statements under~~ the ~~captions “Subsidies and Refundable and Conditional Advances” and “Loans and Borrowings”. We also entered into loans with commercial banks and BPI France.~~

~~In 2021,~~Terns Agreement, we ~~entered into three bank loans for a total nominal amount of €15.2 million, granted in the context of the COVID-19 pandemic, including:~~

•~~A €11.0 million loan in June 2021 by a pool of four French commercial banks,~~

•~~A €2.0 million loan in July 2021 by BPI France,~~

both of which are 90% guaranteed by the French government (State-Guaranteed Loans or Prêts Garantis par l’Etat "PGE") and carry an initial term of one year with repayment options up to six years, as well as a €2.2 million subsidized loan in November 2021 by BPI France, with an initial term of six years.

~~Our loans with commercial banks and BPI France had an outstanding balance of €2.6 million, €1.5 million and €15.8 million as of December 31, 2019, 2020 and 2021, respectively.~~

~~In 2019, our cash and cash equivalents were increased by~~received an upfront payment of $35 million ~~of which $34.9~~in 2019. Pursuant to the Ipsen Agreement, we received a €120 million ~~was recognized as revenue in 2019, pursuant to a licensing and collaboration agreement with Terns.~~

~~In 2021, our cash and cash equivalents were also increased significantly by an~~ upfront payment ~~of €120 million,~~in 2021, out of which €80 million was recognized as revenue in 2021, ~~pursuant to a licensing~~ and ~~collaboration agreement with Ipsen,~~ ~~after deduction of~~ €40 million was deducted as deferred ~~revenue, which will be recognized as revenue following the completion of the ELATIVE double-blind study, in accordance with IFRS 15~~.revenue. We also received €28 million from Ipsen as a result of their purchase of an 8% equity stake in ~~GENFIT,~~

~~Following~~us in 2021. During the ~~results~~years ended December 31, 2022 and 2023, we recognized €15.9 million and €8.7 million respectively, out of the ~~Phase 3 RESOLVE-IT trial,~~€40.0 million deferred income from Ipsen. In addition, during the year ended December 31, 2023, we ~~implemented~~recognized a cost savings plan to reduce operational expenses, including a workforce reduction plan and eliminate non-essential expenses, which contributed to reducing our cash flows used in operating activities from €96.4€13.3 million in 2020 to €44.0 million in 2021 (excluding the upfront payment received from Ipsen in 2021). We will incur higher expenses and substantial operating losses over the next several years, as we continue our efforts to identify potential product candidates, conduct preclinical studies and clinical trials and advance the development of diagnostic tests based on our NIS4 technology. We expect that our cash flows used in operating activities will increase to €65 million in 2022 (excluding VAT, corporate tax and employee profit-sharing to be paid in 2022 relatedmilestone pursuant to the ~~initial upfront received from~~ Ipsen inAgreement following the ~~previous year). This estimate takes into account~~NDA filing acceptance by the FDA and MAA filing acceptance by the EMA for accelerated approval of elafibranor.

Additionally, we have financed our ~~projected cash flow from~~ operations ~~and government funding~~through the receipt of research ~~programs. We have based this estimate on assumptions that may prove to be wrong~~tax credits and ~~we could use our available capital resources sooner than we currently expect.~~

In light of this, we will likely continue relying on some or all of these sources of financing, as well as potential milestone payments and royalties that may result from licensing agreements for our drug candidates, diagnostic solutions and results of our research programs,subsidies granted by various public institutions, such as ~~our~~BPI France, conditional and repayable advances agreements with ~~Ipsen, Labcorp~~governmental entities, loans with commercial banks and ~~Terns.~~BPI France and the issuance of convertible bonds.

Cash Flows

The table below summarizes our cash flows for the years ended December 31, ~~2019, 2020~~2021, 2022 and ~~2021:~~2023:

Year ended
(in € thousands) 2019/12/31 2020/12/31 2021/12/31
Cash flows provided by (used in) operating activities (47,680) (96,371) 99,915
Cash flows provided by (used in) investment activities 327 (966) (3,377)
Cash flows provided by (used in) financing activities 116,860 (8,256) (8,916)
69,507 (105,593) 87,622





	Year ended
(in € thousands)		2021/12/31	2022/12/31	2023/12/31
Cash flows provided by (used in) operating activities		99,915	(72,638)	(55,429)
Cash flows provided by (used in) investment activities		(3,377)	(46,266)	2,234
Cash flows provided by (used in) financing activities		(8,916)	(3,786)	(5,098)
		87,622	(122,690)	(58,293)

Operating Activities

Cash ~~used in~~provided by (used in) operating activities was ~~€47.7~~€99.9 million, ~~€96.4~~€(72.6) million and €(55.4) million for the years ended December 31, ~~2019~~2021, 2022 and ~~2020 respectively and cash provided by operating activities was €99.9 million for~~2023, respectively.

For the ~~year ended December 31,2021.~~

~~With respect to the 2019~~2022 period, this amount ~~primarily~~ resulted from our net loss of ~~€65.1~~€23.7 million, ~~largely the result of our~~in addition to significant research and development efforts ~~as we progressed our Phase 3 clinical trial of elafibranor in NASH~~including ELATIVE®, GNS561, and ~~prepared for the potential commercialization of elafibranor in NASH,~~VS-01, adjusted by ~~€17.8~~€6. million in non-cash ~~and financial~~ expenses, a decrease in payables and other ~~adjustments~~liabilities of ~~€-0.4~~€46.2 million, and an increase in receivables of €8.6 million.

~~With respect~~ Specifically regarding the decrease in payables and other liabilities, this is primarily attributable to a one-time payment in early 2022 amounting to €24.0 million of VAT related to the ~~2020~~Ipsen upfront initial payment of €120 million from 2021.

For the 2023 period, this amount ~~primarily~~ resulted from our net loss of ~~€101.2~~€28.9 million, ~~largely the result of our~~in addition to significant research and development efforts ~~as we incurred significant costs for RESOLVE-IT, our Phase 3 clinical trial~~including ELATIVE®, GNS561, and VS-01, an increase in receivables of ~~elafibranor~~€17.4 million, a decrease in ~~NASH,~~payables and ~~before implementing the cost saving plan during the summer 2020, for the preparation for the potential commercialization~~other liabilities of ~~elafibranor in NASH,~~€10.4 million, taxes paid of €0.5 million, and adjusted by ~~€16~~€1.8 million in non-cash ~~and financial expenses and other adjustments of €-11.1 million.~~

~~With respect to~~expenses. Specifically regarding the ~~2021 period,~~increase in receivables, this ~~amount~~is primarily ~~resulted from our net profit of €67.3 million largely the result of :~~

•~~The receipt of a €120 million initial upfront payment~~ ~~pursuant~~attributable to a ~~licensing and collaboration agreement with Ipsen,~~

•~~Our significant research and development efforts as we incurred significant costs for ELATIVE, our Phase 3 clinical trial of elafibranor~~milestone payment recognized in ~~PBC,~~

•~~Adjusted by (€27,0)~~2023 amounting to €13.3 million ~~in non-cash~~ ~~and financial expenses, including the recognition of a €35.6 million repurchase bonus~~ related to Ipsen as discussed in the ~~partial buyback of our convertible bonds,~~revenue related paragraphs in the above section entitled "Comparisons for the Years Ended December 31, 2022 and

•Other adjustments of €59.7 million, including the recognition of a €40.0 million deferred income and €24.0 million of VAT collected, both of which are related to the initial upfront payment from Ipsen. 2023."

Investing Activities

Cash provided by ~~investing~~(used in) investment activities was ~~€0.3~~€(3.4) million, €(46.3) million and €2.2 million for the year ended December 31, 2019, due to the reimbursement by the landlord of the costs associated with the expansion of our corporate headquarters when construction was completed in April 2019 . Cash used in investing activities was €1 million for the year ended December 31, 2020 and consisted primarily of equipment. Cash used in investing activities was €3.4 million for the yearyears ended December 31, 2021, 2022 and 2023, respectively.

For the 2022 period, this consisted primarily of the ~~€3.0~~Versantis acquisition of €41.5 million ~~subscription~~(net of ~~new ordinary shares~~cash acquired) and short term investments of ~~Genoscience Pharma (more information is provided in~~ ~~Note 8~~€5.0 million.

For the 2023 period, this consisted primarily of ~~our consolidated financial statements, included in this report).~~a liquidation of a short term investment of €4.6 million offset by acquisitions of intangible assets and property, plant and equipment (net of disposals) of €2.3 million.

Financing Activities

~~For the 2019 period, cash~~Cash provided by (used in) financing activities was ~~€116.9~~€(8.9) million, €(3.8) million and ~~primarily consisted of €125.3~~€(5.1) million ~~in net proceeds from~~for the ~~March 2019 global offering, partially offset by the repayment of loans~~years ended December 31, 2021, 2022 and ~~borrowings and including the impact of lease payments due to the implementation of IFRS16 on January 1, 2019.~~2023, respectively.

For the ~~2020~~2022 period, ~~cash used in financing activities was €8.3 million, which~~this amount consisted primarily of ~~(€7.8)~~€2.2 million in interest paid on our ~~convertible bonds~~debt and ~~(€2.1)~~€1.7 million in repayments of loans and lease ~~repayments.~~repayments, offset by €0.1 million in financial interest payments received.

For the ~~2021~~2023 period, ~~cash used in financing activities was €8.9 million, which~~this amount consisted primarily of ~~(€47.5) million used for the partial buy-back of our OCEANEs, €28.0 million of equity investment received from Ipsen, €15,2 million provided by new bank loans, and (€4.8)~~€2.2 million in interest paid on our ~~convertible bonds.~~debt and €4.6 million in repayments of loans and lease repayments, offset by €1.7 million in financial interest payments received.

Restriction on use of capital

With the exception of deposits and guarantees (€0.3 million) recognized in non-current and current financial assets as of December 31, 2023, the Company is not faced with any restrictions as to the availability of its capital.

Currencies

GENFIT has expenses and holds cash and cash equivalents in multiple currencies, namely the Euro, the U.S. Dollar and the Swiss Franc (following the acquisition of Versantis in 2022). For further information refer to

Note 6.1 - "Financial Risk s Management - Foreign exchange risk ”

Operating and Capital Expenditure Requirements

Since our inception, we have incurred significant operating losses. Our net loss was ~~€65.1~~€23.7 million and ~~€101.2~~€28.9 million for the years ended December ~~31,2019~~31, 2022 and ~~2020,~~2023, respectively. For the year ended December 31, 2021 we had net profit of €67.3 million owing to the upfront payment received from Ipsen. Following the results of the Phase 3 RESOLVE-IT trial in May 2020, we implemented a cost savings plan to reduce operational expenses, including a workforce reduction plan and eliminate non-essential expenses. Nevertheless, weWe expect to incur higher expenses and substantial operating losses over the next several years, as we:

•~~initiate and~~ conduct our planned preclinical studies and clinical trials of our drug candidates, including ~~ELATIVE,~~in particular, our Phase 32 clinical trial of ~~elafibranor~~VS-01 for the treatment of ~~PBC,~~ACLF and our Phase ~~1 clinical~~1b/2 trial of ~~NTZ for the treatment~~GNS561 in CCA, as well as pre-clinical development of ~~ACLF;~~SRT-15 and CLM-022 ;

•continue and complete the validation and development of ~~NIS4~~NIS4® and its improvements for ~~NASH;~~diagnosis of at-risk MASH;

•continue the research and development of our other drug candidates, including planned and future preclinical studies and clinical ~~trials, notably a Phase 2 clinical program of GNS561 in CCA expected to start in the first half of 2022;~~trials;

•seek to discover and develop additional drug candidates and explore combination therapies for our existing drug candidates;

•continue our efforts to identify potential product ~~candidates,.~~candidates;

•seek regulatory approval for an IVD powered by ~~NIS4~~NIS4® or its variations and any drug candidates that successfully complete clinical trials;

•assist with the scale-up of our subcontractors’ manufacturing capabilities in order to support the launch of additional clinical trials and the commercialization of our drug candidates, if approved;

•establish a sales and marketing infrastructure for the commercialization of our drug candidates and diagnostic candidates, if approved, in certain geographies, either on our own or in partnership with a third party;

•maintain, expand and protect our intellectual property portfolio;

•hire additional clinical, quality control and scientific personnel; and

•add operational, financial and management information systems and personnel, including personnel to support our product development and commercialization efforts and our operations as a public company listed in the United States.

Our present and future funding requirements will depend on many factors, including, among other things:

•the size, progress, timing and completion of our clinical trials of elafibranor and our other current or future product candidates;

•the number of potential new product candidates we identify and decide to develop;

•the costs involved in filing patent applications and maintaining and enforcing patents or defending against claims of infringement raised by third parties;

•the time and costs involved in obtaining regulatory approval for our product candidates and any delays we may encounter as a result of evolving regulatory requirements or adverse results with respect to any of these product candidates;

•selling and marketing activities undertaken in connection with the anticipated commercialization of elafibranor and our other current or future product candidates, including other product candidates in preclinical development, together with the costs involved in the creation of an effective sales and marketing organization; and

•the amount of revenues, if any, we may derive either directly, or in the form of royalty payments from any future potential collaboration agreements.

Until such time, if ever, that we can generate substantial revenue from product sales, we expect to finance these expenses and our operating activities through a combination of our existing liquidity, equity offerings, debt financings, collaborations, strategic alliances and licensing arrangements. To the extent that we raise additional capital through the sale of equity or convertible debt securities, your ownership interest will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect your rights as a holder of ordinary shares or ADSs. Debt financing, if available, may involve agreements that include covenants that would further limit or restrict our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends.

If we raise funds through additional collaborations, strategic alliances or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or to grant licenses on terms that may not be favorable to us.

If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves, which could materially adversely affect our business, financial condition and results of operations.

We believe that our existing cash and cash equivalents as of December 31, ~~2021,~~2023, will enable us to fund our operating expenses and capital expenditure requirements for at least the next 12 months at least. We have based this estimate on assumptions that may prove to be wrong, and we could use our capital resources sooner than we currently expect.

For more information as to the risks associated with our future funding needs, see the section of this annual report titled “Risk Factors.”

Liquidity Contract

Consistent with customary practice in the French securities market, we entered into a liquidity agreement (contrat de liquidité) with Crédit Industriel et Commercial S.A. ("CIC") in August 2013. The liquidity agreement was entered into in accordance with applicable laws and regulations in France. The liquidity agreement authorizes CIC to carry out market purchases and sales of our shares on Euronext Paris. The amount is classified in other non-current financial assets in our statement of financial position. At December 31, 2023, 147,812 shares and $0.5 million were in the liquidity account. The liquidity agreement has a term of one year and will renew automatically unless otherwise terminated by either party. On a half-yearly basis, we provide a report on the use of the liquidity contract through a press release.

Disclosure of Contractual Obligations

Our contractual obligations as of December 31, ~~2021~~2023 as noted immediately below are disclosed in Note ~~12.4~~29 - ~~– “Maturities of Financial Liabilities”~~"Commi tments and contingent liabilities ~~of the Notes~~" to ~~the~~our consolidated financial statements.

We enter into contracts in the normal course of business with CROs and contract manufacturing organizations, or CMOs, for clinical trials, preclinical studies and clinical manufacturing, and with vendors for pre-commercial activities, research and development activities, research supplies and other services and products for operating purposes. These contracts generally provide for termination upon notice. Such agreements may be terminated at will.

We have entered into a licensing agreement with Genoscience Pharma whereby we are obligated to pay royalties and milestone payments based on future events that are uncertain and therefore they constitute contingent liabilities not recognized in our consolidated financial statements for the period ending December 31, ~~2021.~~2023.

We have entered into a share purchase agreement with the former shareholders of Versantis AG whereby we are obligated to pay milestone payments based on future events that are uncertain and therefore they constitute contingent liabilities not recognized in our consolidated financial statements for the period ending December 31, 2023.

We have entered into a licensing agreement with Seal Rock Therapeutics pursuant to which we may be required to pay royalties and milestone payments based on future events that are uncertain and therefore they constitute contingent liabilities not recognized in our consolidated financial statements for the period ending December 31, 2023.

We have entered into a licensing agreement with Celloram, Inc. pursuant to which we may be required to pay royalties and milestone payments based on future events that are uncertain and therefore they constitute contingent liabilities not recognized in our consolidated financial statements for the period ending December 31, 2023.

Subsidies

~~Subsidies~~ and Refundable and Conditional Advances

We have received financial assistance from BPI France, and other governmental organizations in connection with the development of our product candidates. ~~BPI France’s mission is to provide assistance and support to emerging French enterprises to facilitate the development and commercialization of innovative technologies.~~ Such funding, in the form of refundable and conditional advances, is intended to finance our research and development efforts and the recruitment of specific personnel.

We account for non-refundable subsidies as other income ratably over the duration of the funded project. Funds received in the form of refundable advances are recognized as financial liabilities, as we are obligated to reimburse BPI France for such refundable advances in cash based on a repayment schedule if specified conditions are met.

100

As of December 31, ~~2019, December 31, 2020 and December 31, 2021 respectively,~~2022, we had one outstanding repayable advance from BPI France with an aggregate remaining balance of €3.2 million. This advance, in an amount of €3.2 million, is a conditional advance we received in our capacity as leader of a research consortium initiated in 2008 called IT-DIAB to follow patients at risk for type 2 diabetes. The program ended on December 31, 2014. The conditional advance is not refundable except in the event of technical or commercial success of the consortium’s activities, defined as the sale of related drugs or diagnostic devices developed using research results. We would then be required to repay the advance, plus an additional specified amount, based on a percentage of any revenues generated from the licensing of such products over a 10-year period. The maximum amount that we would behave been required to pay under this arrangement iswas €14.8 million, inclusive of the €3.2 million advance to be repaid.

As provided in the contract, we sent a letter to BPI France in December 2019 in order to notify it of our Labcorp and Terns contracts while indicating that elafibranor was now aimed at treating hepatic diseases and no longer type 2 diabetes as provided for in the agreement. We proposed to BPI France to acknowledge the failure of the ~~IT DIAB~~IT-DIAB project. Following this letter, the parties met in March 2020 for the presentation of our arguments, and were in contact again in June 2020 following the results of the ~~RESOLVE IT~~RESOLVE-IT® trial. We sent another letter in November 2020. ~~We are awaiting a proposal from~~

On October 20, 2023, BPI France ~~on new~~agreed to formally recognize the failure of the project and therefore write off their outstanding receivable as previously mentioned. As of December 31, 2023, GENFIT had no remaining obligation associated with this, and thus the liability was reversed with the amount recognized in "Other income" in the 2023 consolidated statement of operations. Refer to Note 20.2.1 - "Breakdown of other loans and borrowings - Refundable and conditional advances" to our consolidated financial ~~terms related to~~statements included in this ~~situation and a draft amendment to the repayable advance agreement.~~

annual report for further information.

Convertible Bonds

In October 2017, we issued convertible bonds (OCEANEs) for gross proceeds of €180.0 ~~million. The convertible bonds carry~~million, with a ~~fixed interest rate~~maturity date initially of ~~3.5%, with an effective interest rate of 7.2%, payable semi-annually in arrears in April and October.~~October 16, 2022.

On November 23, 2020, we presented to all ~~OCEANE~~OCEANEs bondholders a two-prong renegotiation offer:

•A partial buyback of the outstanding OCEANEs for a maximum amount of 3,048,780 OCEANEs at €16.40 per bond; and

•An amendment of the terms of the remaining OCEANEs to extend their maturity (by 3three years) and increase the conversion ratio (to 5.5 shares per bond).

At the Shareholders’ and Bondholders’ Meetings on January 25, 2021, the shareholders and bondholders approved this renegotiation ~~offer.~~

~~Following the shareholders’~~offer and ~~bondholders’ decisions, GENFIT~~we completed the partial buyback of 2,895,260 OCEANEs at a price of €16.40 (including accrued interest of €0.30) per bond for a total buyback cost of €47.48 ~~million. The settlement operations occurred~~million on January 29, 2021. ~~The repurchased OCEANEs were~~We then cancelled ~~by GENFIT.~~the repurchase of OCEANEs. Following the renegotiation, the OCEANEs bear interest at an annual nominal rate of 3.50% payable semi-annually in arrears on April 16 and October 16 of each year (or the following business day if this date is not a business day). The OCEANEs will be redeemed at par on October 16, 2025 (or the following business day if this date is not a business day). The effective interest rate is 8.8%.

We incurred and recognized fees related to this renegotiation (including financial advising, counsel fees and meeting costs) in the amount of €0.7 million and €2.3 million in 2020 and 2021 respectively.

~~Following conversion~~The nominal unit value of the OCEANEs ~~into~~was set at €29.60. The OCEANEs conversion ratio is 5.5 shares ~~up until April 1, 2022, which led~~for one OCEANE, subject to any subsequent adjustments.

The OCEANEs may be redeemed early at the ~~creation~~option of ~~6,941,875 new~~the Company, under certain conditions. Specifically, the OCEANEs may be redeemed early at the option of the Company from November 3, 2023 onward if i) the mathematical average of the volume-weighted average price of GENFIT shares on the ~~residual~~regulated market of Euronext in Paris and ii) the conversion ratio of the shares in force (over a period of 20 trading days) exceeds 150% of the nominal ~~convertible debt, initially reduced~~value of the OCEANEs bonds.

As of December 31, 2023, there were 1,923,662 OCEANEs outstanding, and the maximum dilution to ~~a nominal amount~~GENFIT's current share capital in the event of ~~€94.3 million through the partial buyback transaction, was further reduced by a nominal amount of €37.4 million,~~full conversion would be 21.29%, with approximately €56.9 million nominal amount ~~outstanding as~~outstanding.

The OCEANEs are admitted to trading on Euronext Access (the free market of ~~April 1, 2022.~~Euronext in Paris).

For more information ~~please~~ see ~~Notes~~ 2.2Note 20.1 ~~“Renegotiation of the convertible bond debt (OCEANEs)”~~- "Loans and Borrowings - ~~12.1 “Breakdown~~Breakdown of convertible ~~loan”~~loan." ~~in the Notes to the consolidated financial statements.~~

Bank Loans

~~At December 31, 2019, 2020 and 2021, we had~~We have borrowed under multiple bank loans primarily intended to finance the acquisition of scientific and information technology ~~equipment for~~equipment. As of December 31, 2022 and 2023, the total principal amount outstanding ~~of €2.6 million, €1.5~~was €15.2 million and ~~€15.9~~€11.6 million, , respectively. These bank loans carry fixed interest rates of between ~~0.36%~~0.40% and ~~2.0%~~2.25% and are generally payable over periods ranging from three to five years from the original date of the loan.

In 2021, we entered into three new bank loans for a total nominal amount of €15.2 million, granted in the context of the COVID-19 pandemic, including:

•AnA €11.0 million loan in June 2021 by a pool of four French commercial banks,

•A €2.0 million loan in July 2021 by BPI France,

~~both of which~~•A €2.2 million subsidized loan in November 2021 by BPI France,

101

The June 2021 and July 2021 bank loans are 90% guaranteed by the French government (State-Guaranteed Loans or Prêts Garantis par l’Etat "PGE") and carry an initial term of one year with repayment options up to six years, ~~as well as a€2.2 million subsidized loan in~~and the November 2021 ~~by BPI France, with~~bank loan carries an initial term of six years.

In 2022 and 2023, we did not enter into any additional loan agreements.

For further information, refer to Note 20.2.2 - "Breakdown of other loans and borrowings - Bank loans " to our consolidated financial statements included in this annual report

~~Operating~~ Leases

As of December 31, ~~2021, operating~~2023, leases subject to IFRS 16 consist of real estate leases for our offices located in Loos, France and Zurich, Switzerland, and lease agreements for scientific equipment.

~~In the second half of 2021, GENFIT SA and GENFIT CORP terminated the lease agreements for their offices, respectively located~~ Additionally, we rent coworking spaces in Paris, France and Cambridge, MA which ~~they both relocated to a coworking space. The rental of these office spaces, as a service contract, is no longer~~are not considered ~~a lease~~leases pursuant to IFRS 16.

For further information, refer to Note 15 - "Property, Plant and Equipment " to our consolidated financial statements included in this annual report.

Pension and Employee Benefits

French law requires payment of a lump sum retirement indemnity to employees based on years of service and annual compensation at retirement. Benefits do not vest prior to retirement. The amount presented in the table included in Note ~~12.4~~25 ~~– “Maturities of Financial Liabilities”~~- “Employee Benefits" ~~in the Notes~~ to ~~the~~our consolidated financial statements included in this annual report, represents the present value of the estimated future benefits to be paid, applying a number of assumptions, including dates of expected retirement, life expectancies, salary growth rates and a discount rate.


C.			Research and Development, Patents and Licenses, etc.

For a discussion of our research and development activities, see “Item ~~4.B—~~4.B - "Information on the Company - Business Overview” and “Item ~~5.A—~~5.A -"Operating and Financial Review and Prospects - Operating Results ”.”


D.			Trend Information

For a discussion of trends, see “Item ~~4.B—~~4. B - "Information on the Company - Business Overview~~,” “Item 5.A—Operating Results~~”, Item 5. A- "Operating and “Financial Review and Prospects - Operating Results” and Item ~~5.B—~~5.B - "Operating and Financial Review and Prospects - Liquidity and Capital Resources ".”


E.			Critical Accounting Estimates

~~See~~For a discussion of our critical accounting estimates, see Note 4.1 "- "Use of estimates and ~~judgments~~judgements "" to our consolidated financial statements included in this annual report

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Item 6.			Directors, Senior Management and Employees.


A.			Directors and Senior Management

In January 2021, we announced the appointment to the Executive Committee of Pascal Caisey, Chief Commercial Officer, as well as Philippe Motté, as Chief Regulatory and Quality Officer. On February 26, 2021, the Board of Directors appointed Jean-François Tiné to replace Philippe Moons who resigned from his position as member of the Board. This appointment was ratified by the shareholders at the Shareholders Meeting held on June 30, 2021.

On March 11, 2021, the Board of Directors, in accordance with Article 24 of our by-laws, appointed Philippe Moons as board observer until the Shareholders’ Meeting called to approve the financial statements for the year ended December 31, 2021. Until that date, his role will be to provide an advisory opinion on questions that may arise with respect to the application of our by-laws, the Charter of the Board of Directors, with a view to supporting good corporate governance; in a particular context where three new directors have joined the Board of Directors since June 2020.

Although the board observer is not a director and is prohibited from interfering in any way in the management of the Company, the observer is invited to participate in all meetings of the Board of Directors and is subject to the Board charter in particular with respect to confidentiality and duties of loyalty.

Finally, on April 21, 2021, we announced the appointment of Thomas Baetz as Chief Financial Officer, as well as Stefanie Magner as Chief Compliance Officer, and their appointment to the Executive Committee.

Following the signature of the Collaboration and License Agreement with Ipsen, and as part of Ipsen's purchase of an 8% equity stake in Genfit, our Board of Directors will propose to the shareholders at the May 25, 2022 annual shareholders' meeting that Ipsen Pharma SAS become a member of the Board of Directors.

~~In March 2022,~~August 2023, we appointed two new members to the Executive Committee, ~~Emilie Desodt,~~Sakina Sayah Jeanne, Executive Vice-President ~~Human Resources,~~Research & Translational Science, and ~~John Brozek,~~Tom Huijbers, Executive Vice-President ~~Data & Information Technology.~~Regulatory.

In June 2023, Sandra Silvestri, M.D., Ph.D., replaced Steven Hildemann M.D., Ph.D., on the Board of Directors of the Company as representative of Ipsen, the legal entity that holds the Board seat.

The following table sets forth information concerning our senior management and ~~directors~~Directors as of April 1, ~~2022.~~2024. Unless otherwise stated, the address for our senior management and directors is c/o GENFIT S.A., Parc Eurasanté, 885 avenue Eugène Avinée, 59120 Loos, France.

Name

Age

Position(s)

Senior Management

Pascal Prigent

5456

Chief Executive Officer

Carol Addy, M.D.

6264

Chief Medical Officer

Thomas Baetz

4850

Chief Financial Officer

John Brozek

4547

~~VP,~~EVP, Data & Information Technology

Pascal Caisey

5456

Chief ~~Commercial~~Operating Officer

Emilie Desodt

3941

~~VP,~~EVP, Human Resources

Dean Hum, Ph.D

5961

Chief ~~Operating~~Scientific Officer

Laurent Lannoo

5254

Corporate Secretary, Director of Legal Affairs

Stefanie Magner, J.D.

4143

Chief Compliance Officer, VPEVP International Legal Affairs

Jean-Christophe Marcoux

4446

Chief ~~Strategy~~Corporate Affairs Officer, Head of Investor Relations, Head of ESG

Meriam Kabbaj, Ph.D.

Chief Technology Officer

~~Philippe Motté~~Sakina Sayah-Jeanne

6252

EVP Research & Translational Science

Tom Huijbers

~~Chief~~52

EVP Regulatory ~~and Quality Officer~~

Non-Employee Directors

Jean-François Mouney (1)~~(6)~~(7)(9)

6668

Chairman of the Board of Directors

Xavier Guille des Buttes (2)(3)~~(7)~~(8)(9)

8082

Vice-Chairman of the Board of Directors

Eric Baclet (1)(2)

6264

~~Director~~

~~Frédéric Desdouits-(7)~~

Director

Katherine Kalin ~~(7)~~(8)

5961

Director

Catherine Larue, Ph.D (1)(10)

6668

Director

Anne-Hélène Monsellato (4)

5456

Director

Philippe Moons ~~(8)~~

7072

Board observer (censeur)

Florence Séjourné (5)

Director

Sandra Silvestri, M.D., Ph.D. (6)

Director

Jean-François Tiné ~~(7)~~(8)

6567

Director

(1)Member of the Nomination and Compensation Committee.

~~100~~

(2)Member of the Audit Committee.

(3)~~Chairman~~Chair of the Nomination and Compensation Committee.

(4)Chair of the Audit Committee.

(5)As representative of Biotech Avenir SAS, the legal entity that holds this ~~board~~Board seat.

(6)~~Chairman~~As representative of IPSEN, the legal entity that holds this Board seat, since June 2023.

(7)Chair of the Strategy and Alliances Committee

~~(7)~~(8)Member of the Strategy and Alliances Committee

~~(8)~~(9)~~Resigned as Director~~Member of the ~~Board~~Environmental, Social, Governance Committee

(10) Chair of ~~Directors on February 26, 2021, now serves as board observer.~~the Environmental, Social, Governance Committee

Senior Management

Pascal Prigenthas served as our Chief Executive Officer since September 2019. He served as our Executive Vice President, Marketing and Development from May 2018 to September 2019. Prior to that, he served as Vice President of Marketing—U.S. Vaccines for GlaxoSmithKline USA from April 2014 to November 2017. Prior to this, he was Vice President and General Manager of GlaxoSmithKline Romania from January 2011 to March 2014. He also served in various roles at Eli Lilly and its affiliates from 1996 through January 2011. Mr. Prigent is a graduate of Reims Management School, now known as NEOMA Business School, in Reims, France and earned his MBA from INSEAD in Fontainebleau, France.

103

Carol Addy has served as our Chief Medical Officer since September 2019. Prior to this, Dr. Addy held various leadership roles, including most recently, Chief Medical Officer at Health Management Resources, a subsidiary of Merck & Co., from November 2013 to August 2019, and as Associate Director, Director and Senior Principal Scientist at Merck Research Laboratories from June 2003 to November 2013. In addition to an M.D. degree, she holds a Masters of Medical Science from Harvard Medical School, and has also been an endocrinology consultant for MIT Medical.

Thomas Baetz has served as our Chief Financial Officer since April 1, 2021. He has extensive global finance experience across the investment banking and biotech industries. Prior to joining our company, Mr. Baetz was a Healthcare Director at Dragon Financial Partners, where he specialized in licensing agreements and fundraising consultancy for European biotechs. Before that, he was Group Chief Financial Officer and Head of Asia-Pacific for four years at Impeto Medical, a medtech company based in Hong-Kong and Paris, where he oversaw the corporate and business development in China until 2017. Prior to moving to Asia, he held key senior management positions, specializing in mergers and acquisitions, financial control, and consultancy among other areas. M.Mr. Baetz earned his MSc. in Finance and Actuarial Science from ENSAE and his BA from ESCP Europe.

John Brozek was appointed to the Executive Committee in March ~~2022.~~2022 as Executive Vice-President, Data & Information Technology. He holds three master’s degrees respectively in Cell and Molecular Biology from Lille University, Bioinformatics from Paris 7 University and Information Technology from Amiens University. He started his career in 2001 as Bioinformatician with IT-omics, a startup specializing in Information Systems design and data mining for biotech companies. In 2005, he joined GENFIT where he progressively took the lead of In Silico activities providing support in bioinformatics, biostatistics and Information Systems design. Since 2016, in addition to managing the In Silico activities, he leads the IT Department as Vice-President Data & Information Technology where he has been focusing on a global Information System renewal project while continuing to develop data related projects (data science and business intelligence).

Pascal Caisey joined GENFIT in September 2019 as Executive Vice President of Commercial Development, becoming Chief Commercial Officer in January 2021 and was appointed Chief Operating Officer in March 2022. He has vast pharmaceutical business experience, holding roles with GSK, BMS, Pfizer, Schering Plough and most recently Boehringer Ingelheim, where he oversaw, as the European Business Manager, the commercial launch of empagliflozin in Europe. Mr. Caisey is a registered nurse and holds an MBA from École des Hautes Études Commerciales (HEC) in Paris.

Emilie Desodt joined GENFIT in January 2018 as Human Resources Director and was appointed to the Executive Committee in March ~~2022.~~2022 as the Executive Vice-President, Human Resources. Ms. Desodt has been working in Human Resources for the past 18 years in various operational and strategic positions. Prior to joining GENFIT, she was in charge of HR activities, first at regional level (Americas & Middle East) then at global level at the Lesaffre Group. She has also held various HR roles of increasing responsibilities within General Electric. Ms. Desodt holds a bachelor’s degree in computer sciences (MIAGE) and a master’s degree in HR Development.

Dean Hum, Ph.D has served as our Chief ~~Operating Officer since September 2018 and prior to that served as our Chief~~ Scientific Officer since ~~2000 and~~2000. He also served as a member of our former Executive Board from May 2014 until the change in management and administration in June 2017. He earned a Ph.D in Biochemistry from McGill University in Montreal in 1990. He is an expert in the regulation of gene expression and nuclear receptors associated with endocrine and cardio metabolic diseases. Prior to becoming a Professor at Laval University in Quebec from 1994 to 2000, Dr. Hum held a research position at the University of California in San Francisco from 1990 to 1994. Dr. Hum coordinates our research and development activities with our Chief Executive Officer and in close collaboration with our other scientific officers and project managers. He is also a president and member of the board of directors of our wholly owned subsidiary, Genfit Corp., and a member of the Management Committee of our wholly owned subsidiary Genfit Pharmaceuticals SAS.

~~101~~

Laurent Lannoo has served as our Corporate Secretary and Director of Legal Affairs since 2008. From 2005 to 2008, he served in various roles at the Coeur et Artères foundation, including as chairman of its executive board from 2007 to 2008 and as corporate secretary from 2005 to 2006. Prior to that, from 1996 to 2005, he was in charge of finance and administration for Eurasanté, the public agency for the economic development of healthcare activities in the Nord-Pas de Calais region of France. He began his professional career at M&M, a consulting firm, in 1994, becoming partner in 1996. Mr. Lannoo graduated from Lille Law School with a degree in Business Law.

Stefanie Magner has served as our Chief Compliance Officer and VPExecutive Vice-President International Legal Affairs since March 2021, after joining our company in 2016 as Deputy Director of Legal Affairs. Prior to joining ~~Genfit,~~GENFIT, she spent nearly 10 years at the Paris offices of the global ~~U.S.~~ law firm Jones Day, advising issuers, many in the biotech space, and banks on a variety of corporate, cross-border securities and M&A transactions, including several U.S. IPOs. She is admitted to practice law in New York and is a former member of the Paris Bar. She graduated from the University of Pennsylvania with a Bachelor of Arts in International Relations and French, as well as an international diploma from Sciences-Po Paris. She received her U.S. law degree from Washington College of Law at the American University in Washington D.C. and holds a Masters of Business Litigation from the Université de Paris X – Nanterre.

104

Jean-Christophe Marcoux has served as our Chief Corporate Affairs Officer, Head of Investor Relations, Head of ESG (previously titled Chief Strategy ~~Officer~~Officer) since ~~2016, after joining~~2016. He joined our company in 2015 to play a cross-disciplinary role regarding tactical, strategic and operational matters. He is an engineer and graduated from INSA Lyon in France, having spent part of his time at the University of Leeds in England. In addition, he also holds a degree in Strategic Management and Economic Intelligence from EGE in France. From 2000 to 2015, he led international projects and programs in a variety of industrial sectors, in ~~particular in~~ Europe and Asia, and with clients and colleagues in the United States. In 2012, he joined IQVIA (formerly known as IMS ~~Health, and later Quintiles IMS)~~Health), a global information and technology services company for clients in the healthcare industry, where he led projects in healthcare systems, such as patient longitudinal studies, forecasting, targeting, profiling, prospective analyses, digital healthcare and innovation. Since 2021, he is responsible for the Company's extra-financial reporting and activities, covering the challenges of corporate social and environmental responsibility.

~~Philippe Motté~~Meriam Kabbaj, Ph.D has served as our Chief ~~Regulatory and Quality~~Technology Officer since ~~January 2021 after joining~~December 2022. She is pharmacist by training (University of Geneva) and received her Master and PhD in Pharmaceutical Sciences from the University of Montreal. She acquired clinical drug development experience and was exposed to quality assurance and regulatory affairs in a leading Contract Research Organization (Celerion, formerly MDS Pharma Sciences) specialized in applied translational medicine, where she held many key operational and leadership positions. After a 10 year deep dive in the pharmaceutical industry, she co-founded Versantis where she successfully led the development of VS-01 from an academic prototype to a clinical lead compound and supported the fundraising activities. As a result of the acquisition of Versantis by GENFIT in ~~June 2020~~September 2022, Meriam joined the Executive Committee as Chief Technology Officer in charge of CMC, Analytical Chemistry and Non-Clinical Development activities.

Sakina Sayah-Jeanne joined GENFIT on April 3, 2023 as Executive Vice-President Research & Translational Science, member of the Executive Committee. Sakina has more than 20 years pharmaceutical industry experience, including 7 years at GENFIT. Sakina obtained her PhD in Molecular and Cellular Biology in 1998, specializing in Neuro-Immunology, at the University of Rouen (Role of the complement in central nervous system pathologies with an inflammatory component). In 1999, Sakina joined Innothera, a French pharmaceutical group, as Project Leader, Pharmacology (Neurogenic pain). In 2002, Sakina joined GABA Laboratoire, as Scientific Attaché (oral and dental care). Sakina joined GENFIT in 2003 as a Project Leader, Preclinical. She then became Director of Therapeutic Target Research in 2005 (Cardiometabolic diseases, Alzheimer’s disease). In 2011, Sakina joined DaVolterra as the Manager of the Preclinical Research, to define and manage the nonclinical strategy for mechanistic and proof-of-concept studies for the product under development (Gut microbiome protection for the prevention of infectious diseases). In 2015, she was appointed Senior ~~Vice President~~Director, Translational and Transversal R&D, where she was in charge of ~~Global~~producing decision support for clinical development of the product, addressing questions around dose regimen and safe use for the different indications and populations, developing argumentations and defending Sponsor’s position statements with regulatory authorities (Gut microbiome protection for (i) prevention of infectious diseases, (ii) efficacy of anti-cancer treatments).

Tom Huijbers joined GENFIT on March 13, 2023 as Executive Vice-President Regulatory, member of the Executive Committee. Tom has more than 20 years of experience in the pharmaceutical industry. In 1999, he graduated with a Master of Science in Medicinal Chemistry and Molecular Pharmacology, from the University of Groningen (Netherlands). The same year, he joined the Janssen Research Foundation (Belgium) as Associate Manager Regulatory Affairs. ~~Mr. Motté’s previous commercial and regulatory roles include~~In 2004, he joined Grünenthal GmbH based in Germany, as Regulatory Affairs Manager. As of 2006, he became Senior Regulatory Affairs Manager before holding the positions ~~with Sanofi, GSK, Roche, Ipsen, and AbbVie. Prior to joining GENFIT, he was Vice President~~ of Associate Director Global Regulatory Affairs, then Senior Director Global Regulatory Affairs between 2009 and ~~Chief Access Officer (safety, quality, regulatory,~~2018. In 2018, Tom became Vice President, Head Development Strategy & Intelligence in Grünenthal’s Innovation Unit Devices and ~~market access)~~Technologies. Before joining GENFIT, Tom had worked since 2020 at ~~MedDay Pharmaceuticals. Mr. Motté holds a PharmD from the Paris-Descartes University~~Pinney Associates (USA) and a PhD in Human Biology (major Experimental Oncology) from the Paris-Sud University, completed Postdoctoral Research at Harvard Medical School and the Massachusetts General Hospital Cancer Center, earnedHarm Reduction Therapeutics (USA), as an ~~MBA from the ESCP-EAP European School of Management (Paris), and is certified as a Pharmacien Responsable.~~independent Regulatory Affairs Consultant.

Non-Employee Directors

Jean-François Mouney has served as Chairman of our ~~board~~Board of ~~directors~~Directors since June 2017. Mr. Mouney also served as our Chief Executive Officer from September 1999 to September 2019. Mr. Mouney served as Chairman of our Executive Board from September 1999 to June 2017, when we changed our management structure. He co-founded ~~Genfit~~GENFIT in 1999 after having been actively involved in the incubation of the ~~company~~Company since 1997. Prior to this, he founded, managed and developed several companies specializing in high-performance materials, particularly in the aeronautical industry. In 1992, he founded M&M, a consultancy firm specializing in health economics. He was responsible for carrying out a feasibility study for the economic development agency, Eurasanté, within the field of health and biology in Nord-Pas-de-Calais region of France and was appointed Chief Executive Officer of this ~~agency. He has continued to serve in this role since its launch~~agency when the agency was launched in 1995. Mr. Mouney has also served as Deputy Chairman of the “Nutrition, Health and Longevity” research hub between 2008 and 2016 and as an Advisor to the Banque de France ~~since 2008.~~from 2008 to 2023. Mr. Mouney is a graduate of ESCP-Europe Business School, and holds a masters degree in Economics from the University of Lille.

Xavier Guille des Buttes served as member of our former Supervisory Board since 2006 and has served as a member of our ~~board~~Board of ~~directors~~Directors since June 2017. Mr. Guille des Buttes was educated at the Ecole Supérieure des Sciences Commerciales d’Angers, the Institut de gestion prévisionnelle et de contrôle de gestion, and has spent his entire career in the pharmaceutical industry. He has held a number of executive positions for more than 30 years, particularly in the French subsidiary of the German Group Schering AG, where, from 1974 to 2006, he successively held the positions of Marketing Director, General Manager of the Pharmaceutical Division and Chairman of the ~~board~~Board of ~~directors.~~Directors. As a member of our former Supervisory Board from October 2006, he chaired the Supervisory Board from April 2008 to June 2017, when he became Vice-Chairman of our Board of Directors following the change in administration and management. In addition to his responsibilities at ~~Genfit,~~GENFIT, he also serves as director of several private companies.

105

Eric Baclet joined our ~~board~~Board of ~~directors~~Directors in 2020. In 1987, he began his extensive experience in the pharmaceutical industry with Eli Lilly and since the late 1990s until 2017, held executive or corporate officer positions in various countries where Eli Lilly and Company has a presence (North Africa, Belgium, the United States, China and Italy). From 2009 to 2013, Mr. Baclet was President and General Manager of Lilly China and most recently from 2014 to 2017, President of Lilly Italy and General Manager of Lilly Italian Hub. He is a seasoned executive with extensive experience gleaned from senior executive positions, having built and managed diverse and multicultural teams involved in the biopharmaceutical value chain throughout the world. From this background Mr. Eric Baclet has acquired extensive experience in international management from initial clinical development to final commercialization. Mr. Baclet has been responsible for portfolio strategies, international brand development, global marketing projects, global sales operations and the management of various geographic areas and countries. He currently serves as a board member of AIF Pharma Lux (Amanys Pharma) and AIF Pharma NA Board member (Future Pharmaceutical Industries); Mr. Baclet holds a Pharmacy degree from the University René Descartes.

~~102~~

~~Frédéric Desdouits~~ served as member of our former Supervisory Board since 2014 and has served as a member of our board of directors since our change in management and administration in June 2017. Mr. Desdouits is the Chief Executive Officer of Treefrog Therapeutics, a cell therapy company based in Pessac, France. Until June 30, 2020, he was Managing Director of Seqens CDMO Business Unit and before that served as CEO for PCAS SA until March 23, 2020,a publicly listed affiliate of Seqens. Prior to joining Seqens (former Novacap) in 2017, he was head of Business Development, Acquisition and Market Intelligence at Pierre Fabre Group since 2011, and North American Pharma Director from January 2016. He was also a member of the pharmaceuticals executive board and of the development products board. Prior to joining Pierre Fabre, from 2004 to 2011, Mr. Desdouits was Managing Partner at Bionest Partners, a consulting and transaction firm based in Paris and New York specializing in healthcare and biotechnology. From 2007 to 2011, he was the founding Managing Partner of Bionest Partners Finance, a boutique specialized in value strategy and fund raising for emerging bio-companies. Between 1997 and 2004, Mr. Desdouits was a partner in charge of Pharmaceutical and Biotechnology sectors at Exane BNP-Paribas, an investment company. Prior to that, Mr. Desdouits worked in research from 1996 to 1997 at GlaxoWellcome in France (now GSK), as a consultant for Hoechst in the USA from 1995 to 1997 and was a Ph.D student from 1992 to 1995 with a grant from Rhône-Poulenc in France (now Sanofi). Between 2010 and 2011, he was a member of the Pre-Phase III DPU Blood & Vessels board at Sanofi Aventis (now Sanofi) in Chilly-Mazarin, France. Mr. Desdouits was a member of the supervisory board of CiToxLab (now Charles River). Between 2008 and 2011, Mr. Desdouits was a board member at Exonhit Therapeutics (now Eurobio Scientific) and member of the Mergers and Acquisitions subcommittee, and from 2015 to 2017, was an observer on the Orphelia Pharma Board of Directors. Mr. Desdouits graduated from Ecole Polytechnique (Palaiseau, France), obtained a M.S. in pharmacology and a Ph.D in Neurosciences at University Paris VI and Collège de France and studied from 1994 to 1996 at the Rockefeller University in New York. He is a CEFA (Certified European Financial Analyst) and Certified in Global Management from INSEAD.

Katherine Kalin joined our ~~board~~Board of ~~directors~~Directors in 2020. She brings more than 25 years of experience as a senior executive in healthcare and professional ~~services, most recently at Celgene Corporation,~~services. Her healthcare industry experience spans pharmaceuticals, medical devices, diagnostics and digital health. From 1990 to 2002, Katherine was a partner in the global healthcare practice of McKinsey & Company, where she ~~led corporate strategy from 2012 to 2017 and~~served clients across a range of healthcare disciplines. In 2002, Katherine joined Johnson & Johnson where she held leadership roles in marketing, sales and new business development, ~~from 2002~~until 2011. From 2012 to 2011. Prior to that, she was a partner in the global healthcare practice of McKinsey & Company from 1990 to 2002. Her healthcare industry experience spans diagnostics, medical devices, pharmaceuticals and digital health.2017, Katherine led corporate strategy at Celgene Corporation. She began her career as an investment banker in Corporate Finance at Nomura in Tokyo, Japan and London, UK. Ms. Kalin currently serves as a non-executive director ~~on the board~~ of ~~Athersys,~~Sellas Life Sciences, a publicly-traded, USlate-stage clinical biopharmaceutical company, and as a member of the ~~board~~Board of ~~directors~~Directors of Brown Advisory LLC, an independent investment and strategic advisory firm and of FemHealth Ventures, a women’s health venture capital firm. ~~She is also a member of the Advisory Board of Stardog, an enterprise data company, and a board member of PRIMARI Analytics, an artificial intelligence startup.~~ She has a B.A. from Durham University, U.K., and an M.B.A. from Harvard Business School.

Catherine Larue, Ph.D has served as a member of our ~~board~~Board of ~~directors~~Directors since 2017. Since September 2020, she runs a consulting business in the biotechnology and diagnostic ~~fields.~~fields (CoDx). From 2012 to 2020, Dr. Larue 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. During this period, she also served as interim CEO of the Luxembourg Institute of Health (LIH), a biomedical research institute, between 2016 and 2017. Prior to joining the IBBL, Dr. Larue piloted GENFIT’s biomarker program until 2012. Dr. Larue began her career as team leader at Sanofi at the Montpellier, France based research and development center in the cardiovascular research department. She later joined Sanofi Diagnostics Pasteur, as Director of Research and Development for France and U.S. 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. Larue 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 university degree in clinical oncology from the University of Paris VI and an executive MBA from St. John’s University (New York).

Anne-Hélène Monsellato has served as a member of our ~~board~~Board of ~~directors~~Directors and the chair of our Audit Committee since 2017. ~~Since~~From May 2015 to March 2023, she ~~has been~~was an independent member of the Supervisory Committee and the Chairman of the Audit and Risk Committee of Euronav, a Belgian crude oil tanker company listed on the New York Stock Exchange and Euronext Brussels. In addition, she serves as the Vice President and Treasurer of the Board of Trustees of the American Center for Art and Culture, a U.S. private foundation based in New York, which operates the American cultural center in Paris, France. From 2005 until 2013, Ms. Monsellato served as a Partner with Ernst & Young (now EY), Paris, after having served as Auditor and, Manager for the firm starting in 1990. During her time at EY, she gained extensive experience in financial communication, IFRS, cross border listing transactions in(in particular with the United ~~States,~~States), internal control over financial reporting and risk management, as well as financial statements audits and audits of internal control over financial reporting. She was involved with several companies in the pharmaceutical and biotechnology sector. Ms. Monsellato is an active member of the French association of Directors (IFA) since 2013 in particular with the Club of Audit Committee' Chairs, and the ESG Committee, where she regularly contributes to publications (November 2023 : Durabilité : les nouveaux engagements du conseil; February 2024 : Le conseil et la cybersécurité) and the European Confederation of Directors’ ~~Association.~~Association (ecoDa). She was a member of the Consultative Working Group for the ESMA Corporate Reporting Standing Committee for ~~2019-2020.~~2019-2020, and she is a member of the EFRAG community for the development of the listed SMEs standards (LSME ESRS). Ms. Monsellato has been a Certified Public Accountant in France since 2008 and received a board member certification from IFA-Sciences Po in 2014. She graduated from EM Lyon in 1990 with a degree in Business Management. Ms Monsellato attended the Executive Education program "Governance & Climate" of Université Paris Dauphine-PSL in November 2023, a dedicated training for executives and board members providing a framework for reflection and action at corporate governance level in the face of complex and urgent climate-related issues. Ms Monsellato attended the Executive Education program "Governance & Climate" of Université Paris Dauphine-PSL in November 2023, a dedicated training for executives and board members providing a framework for reflection and action at corporate governance level in the face of complex and urgent climate-related issues.

~~103~~

Philippe Moonsserved as member of our former ~~supervisory board~~Supervisory Board since 2015 and has served as a member of our ~~board~~Board of ~~directors~~Directors since June 2017. In February 2021, he resigned from his position as director on the Board of Directors, but will remain as a ~~board~~Board observer. Mr. Moons graduated from the Institut Catholique des Arts et Métiers de Lille and received an MBA from the Ecole des Hautes Etudes Commerciales du Nord (EDHEC), and began his career as a business engineer at Delattre Leviver, part of the Creusot-Loire Group, a French industrial Group. In 1989, he joined Finorpa, a venture capital and growth capital company, operating under the aegis of the Group “Charbonnage de France” in the Nord-Pas-de-Calais region of France. Between 2006 and 2015, he was in charge at Finorpa of supporting and financing several companies in their early-stage activities or development phases, in particular in the fields of biology and health. Mr. Moons was a member of the executive board of Finovam, a regional venture capital company, established in 2014 to strengthen the emergence and provide seed capital to innovative businesses, primarily technological projects in the Nord-Pas-de-Calais region, until 2015.

106

Florence Séjourné has served as a member of our ~~board~~Board of ~~directors~~Directors since June 2017 as representative of SAS Biotech Avenir. She was a member of our former Supervisory Board from 1999 until the change in our management and administration in June 2017. Ms. Séjourné co-founded our company and served as our ~~chief operating officer,~~Chief Operating Officer, business development director, industrial alliances coordinator and member of our former Executive Board from 1999 to 2008. ~~Since~~From 2008 to 2022, she ~~has been~~was the Chairwoman and CEO of Da Volterra, a clinical-stage biotechnology company developing novel Microbiota Protective therapies for protection against antibiotics residues, in particular in cancer and blood disorders. ~~From 1997~~Since September 2022, Ms. Séjourné has been appointed CEO of a newly formed biopharmaceutical company founded as a joint venture by Boehringer Ingelheim, Evotec SE and bioMérieux, named AUROBAC THERAPEUTICS, to ~~1999, she was in charge~~create the next generation of ~~the biopharmaceutical sector for Eurasanté, the economic development agency.~~antimicrobials along with actionable diagnostics to fight AntiMicrobial Resistance. Ms. Séjourné graduated from the Ecole des Mines of Paris with a degree in Biotechnology and holds a master’s degree in Pharmacy from the University of Illinois in Chicago.

Sandra Silvestri, MD., Ph.D, has served as a member of our Board of Directors since June 2023 as representative of Ipsen. Sandra Silvestri, M.D., Ph.D., joined Ipsen in 2023 as Executive Vice President, Chief Medical Officer and Head of Global Medical Affairs, Patient Safety and Patient Affairs. Prior to joining Ipsen, Ms. Silvestri held multiple leadership roles at Sanofi, where she was most recently SVP Chief Medical Officer for General Medicine GBU, leading a team of 1,600 medical employees worldwide. She also held several leadership positions at Eli Lilly in multiple disease areas including diabetology, endocrinology, neuroscience, immunology, dermatology, and oncology. Sandra Silvestri is a medical doctor specialized in endocrinology and metabolic diseases. She has been an investigator in several clinical studies, published numerous book chapters as well as scientific articles in international journals, been a speaker in several national and international congresses, and from 2017 to 2023 she led the Gender Balance Board and Global Network at Sanofi. She stays active as a professor at the medical schools of the University of Florence, Italy, and Descartes University in Paris. She has lived in Italy, Denmark, the U.S., France, and speaks Italian, English and French.

Jean-François Tiné joined the Board of Directors in 2021. He iswas a ~~seasoned~~ senior investment banking executive until 2022, having most recently served since 2017 as Chairman of Equity Capital Markets at Natixis Corporate & Investment Banking after joining Natixis in 2005 as Global Head of Equity Capital Markets. He began his career in various sales, trading and syndication positions in the London and Paris capital markets at Union Bancaire Privée, Crédit Suisse, First Boston and Bank of America. In 1993, he became an associate at MC Securities in London, before being appointed three years later as Global Head of Equity Syndicate at Société Générale in Paris.

Family Arrangements and Selection Arrangements

There are no family relationships between any of the members of our senior management or ~~board~~Board of ~~directors.~~Directors. Except as described below, there are no arrangements or understandings with major shareholders, customers, suppliers or others, pursuant to which any member of our senior management or ~~board~~Board of ~~directors~~Directors was selected as such.

Pursuant to an investment agreement entered into with Ipsen on December 16, 2021 pursuant to which Ipsen became a shareholder of GENFIT through the purchase of 3,985,239 newly issued shares representing 8% of GENFIT S.A after issuance, our ~~Board of Directors will propose~~shareholders, at the ~~next shareholders’~~annual shareholders meeting ~~currently expected to occur~~held on May 25, 2022, ~~that~~appointed Ipsen ~~becomes a board member, to be represented by Steven Hildemann.~~as Director.


B.			Compensation

Director Compensation

At our general meeting of shareholders held on ~~June 30, 2021,~~May 24, 2023, shareholders renewed the total annual attendance fees (jetons de présence) to be distributed among non-employee ~~directors~~Directors at €600,000 for the period beginning with the shareholders’ general meeting of ~~June 30, 2021~~May 24, 2023 until the next shareholders’ general meeting, currently expected to occur on May ~~25, 2022.~~22, 2024. The following table sets forth information regarding the compensation earned by our non-employee ~~directors~~Directors for service on our ~~board~~Board of ~~directors~~Directors during the year ended December 31, ~~2021,~~2023, which consisted solely of attendance fees, with the exception of our Chairman, Jean-François Mouney.


NAME						(€)
Jean-François Mouney(1)						~~332,416~~359,014
Eric Baclet						~~62,881~~47,960
Xavier Guille des Buttes						~~89,822~~80,660
~~Frédéric Desdouits~~						~~43,600~~
Katherine Kalin						~~43,600~~39,240
Catherine Larue, Ph.D.						~~47,651~~43,600
Anne-Hélène Monsellato						~~52,320~~39,240
Philippe ~~Moons~~Moons(2)						~~16,986~~7,630
Florence Séjourné, as representative of ~~SAS~~ Biotech Avenir SAS						—
Sandra Silvestri, MD., Ph.D., as representative of IPSEN						—
Jean-François Tiné						~~39,724~~43,600

(1)Mr. Mouney’s compensation includes his fixed compensation, ~~directors’~~Directors’ fees and social security charges. See below “Chairman of the Board Compensation” for more details.

(2)Philippe Moons is an observer on the Board of Directors

~~104~~

107

We compensate all the members of the Board of Directors, with the exception of the permanent ~~representative~~representatives of Biotech Avenir ~~a shareholder~~SAS and Ipsen, both shareholders of the Company and a non-independent member of the Board of Directors. If Ipsen Pharma SAS' nomination by the shareholders is approved at the next annual general meeting, Ipsen Pharma SAS would also not be entitled to receive directors fees.Company. Director compensation includes a fixed part for each ~~director~~Director and a variable part depending on their attendance. The fixed part varies according to:

•the role played by each ~~director~~Director on the Board of Directors and the ~~Committees;~~committees; and

•the function of Vice-Chairman of the Board of Directors or Chairman of a specialized ~~committee, which is better compensated.~~committee.

Given the frequency of meetings observed in recent years, the variable portion linked to attendance is greater than the fixed portion.

Directors fees are allocated as follows:


(in euros)	Annual fixed amount (1)	Variable amount (per director and per meeting)
Board member	10,000	2,500
Board committee member	2,500	2,500
Vice-Chairman of the Board of Directors	10,000	—
Chairman of a Board committee	5,000	—
(1) For Board members joining during the course of the fiscal year, calculated pro-rata to number of months spent on the Board of Directors. Amounts may be cumulative.

The Board of Directors may also compensate members on an exceptional basis for special assignments, within the meaning of article ~~L.225-84~~L.225-46 of the French Commercial Code. To date, no special assignments have been given to any of the board members.

The Board of Directors, in accordance with the Articles of Association, decided on March 11, 2021 to appoint Philippe Moons as an observer. Mr. Moons’ compensation is deducted from the overall budget of €600,000 allocated by the Shareholders Meeting to Directors, at the rate of €1,250 per meeting of the Board of Directors and the ESG Committee in which he attends.

Chairman of the Board Compensation – Jean-François Mouney

The ~~various~~ components of the overall annual compensation of Mr. Mouney for his duties within the ~~Genfit~~GENFIT group during the fiscal year ended December 31, ~~2021~~2023 are summarized below:

•gross fixed compensation under article ~~L.225-47~~L.22-10-16 of the French Commercial Code;

•attendance fees for participation in the work of the committees of the Board of Directors (as a member and/or ~~chairman)~~Chairman), according to the distribution decided by the Board of ~~Directors~~Directors; and

•other benefits related to his position including use of a company vehicle and eligibility for the Group’s life insurance and health insurance benefits.

Mr. Mouney does not have an employment contract with the Company.

Fixed Compensation

Mr. Mouney received a gross fixed compensation of ~~€192,996.~~€220,500.

Attendance Fees

Mr. Mouney also received gross compensation of ~~€32,382~~€42,500 as Chairman of the Board of Directors, which amount includes ~~directors’~~Directors’ fees for his participation in certain Board committees ~~(Compensation~~(Nomination and ~~Nominations~~Compensation Committee, Strategy and Alliances Committee and ESG Committee).

Other Compensation

The benefits in kind granted to Mr. Mouney for the year ended December 31, ~~2021~~2023 consisted of the use of a company car valued at €7,200 and eligibility for the Group’s life insurance and health insurance benefits.

Chief Executive Officer Compensation – Pascal Prigent

Our only executive officer under French law is our ~~chief executive officer.~~ Chief Executive Officer.

Mr. Prigent's compensation for the fiscal year ended December 31, 2023 is composed of:

•fixed compensation;

•variable compensation (annual assessment);

•equity awards subject to presence and performance conditions;

•other benefits:

◦change of control and severance benefits, and

◦use of a company vehicle and eligibility for the Group’s life insurance and health insurance benefits.

108

Mr. Prigent does not have an employment contract with the Company.

The following table sets forth information regarding compensation earned during the year ended December 31, ~~2021~~2023 by Mr. Prigent.


NAME AND PRINCIPAL POSITION	NAME AND PRINCIPAL POSITION	FIXED COMPENSATION	VARIABLE COMPENSATION (1)	EQUITY AWARDS	ALL OTHER COMPENSATION	TOTAL	NAME AND PRINCIPAL POSITION	FIXED COMPENSATION	VARIABLE COMPENSATION (1)	EQUITY AWARDS (1)	ALL OTHER COMPENSATION	TOTAL
		(€)	(€)	(€)	(€)	(€)		(€)			(€)
Pascal Prigent, Chief Executive Officer	Pascal Prigent, Chief Executive Officer	325,008	162,504	58,400	16,229	562,141	Pascal Prigent, Chief Executive Officer	393,750	147,656	106,568	16,250	664,224

~~4.7.~~Leases

IFRS 16 introduces for the lessee a single model of accounting on the balance sheet for leases. The lessee recognizes a "right of use" asset which represents its right to use the underlying asset, and a lease liability for its obligation to pay the rent.

The Group recognizes a "right of use" asset and a lease liability at the start of the lease term. The "right of use" asset is initially measured at cost and then at cost less any amortization and accumulated impairment losses. The amount can be adjusted based on certain revaluations of the lease liability.

The lease liability is initially measured at the discounted value of the rents owed and not yet paid at the start date of the contract. The discount rate used is the implicit interest rate of the contract or, if it cannot be easily determined, the Company’s incremental borrowing rate of the lessee. The Group generally uses the latter as the discount rate.

The lease liability is then adjusted by the interest expense minus the amounts of rent paid. It is revalued in the event of a change in future rents following a change in the index or rate, a new estimate of the amount to be paid under a residual value guarantee or, where applicable, a revaluation of the exercise of an option to purchase or to extend, or the non-exercise of an option to terminate (which then becomes reasonably certain).

The Group has exercised its judgment in determining the term of the lease agreements that provide for extension options. The fact that the Group has determined that it is reasonably certain to exercise such options has an impact on the lease term used and has a significant impact on the amount of lease debt and the "right of use" asset in the accounts. The amount of short term or low value leases which are not included in the IFRS ~~16model~~16 model is not material.

The following tables show the variations in tangible assets for the years ended December 31, 2022 and 2023:


Property, plant and equipment - Variations	As of As of	Increase	Decrease	Translation	Reclassification	As of As of
(in € thousands)	As of 2021/12/31			adjustments		As of 2022/12/31
Gross


Buildings on non-freehold land	10,311	610	—	—	—	10,921
Scientific equipment	6,320	228	(82)	—	—	6,467
Fittings	1,474	61	—	—	2	1,537
Vehicles	91	—	—	—	—	91
Computer equipment	1,542	98	(149)	—	8	1,500
Furniture	279	—	—	—	—	279
In progress	—	16	—	—	(16)	—
TOTAL - Gross	20,017	1,014	(230)	—	(7)	20,794











Accumulated depreciation


Buildings on non-freehold land	(2,900)	(1,033)	—	—	—	(3,934)
Scientific equipment	(4,868)	(697)	79	4	—	(5,481)
Fittings	(888)	(95)	—	(2)	—	(985)
Vehicles	(31)	(12)	—	—	—	(43)
Computer equipment	(1,403)	(105)	148	(5)	—	(1,365)
Furniture	(213)	(10)	—	—	—	(223)
In progress	—	—	—	—	—	—
TOTAL - Accumulated depreciation	(10,304)	(1,953)	227	(3)	—	(12,032)
Accumulated impairment


Buildings on non-freehold land	(503)	—	48	—	—	(455)
Scientific equipment	(87)	—	28	—	—	(59)
Fittings	(93)	—	69	—	—	(24)
Vehicles	—	—	—	—	—	—
Computer equipment	(12)	—	2	—	—	(10)
Furniture	(3)	—	—	—	—	(3)
In progress	—	—	—	—	—	—
TOTAL - Accumulated impairment	(699)	—	147	—	—	(552)
TOTAL - Net	9,015	(939)	144	(3)	(7)	8,210

~~4.8.Impairment of tangible assets, intangible assets and goodwill~~

F-34


Property, plant and equipment - Variations	As of	Increase	Decrease	Translation	Reclassification	As of
(in € thousands)	2022/12/31			adjustments		2023/12/31
Gross


Buildings on non-freehold land	10,921	427	—	—	19	11,367
Scientific equipment	6,467	207	(1,378)	—	—	5,295
Fittings	1,537	33	(7)	—	—	1,563
Vehicles	91	—	—	—	—	91
Computer equipment	1,500	150	(32)	—	(4)	1,613
Furniture	279	5	(9)	—	—	274
In progress	—	16	—	—	(16)	—
TOTAL - Gross	20,794	839	(1,426)	—	(3)	20,204











Accumulated depreciation


Buildings on non-freehold land	(3,934)	(1,127)	—	(3)	—	(5,064)
Scientific equipment	(5,481)	(296)	1,307	(1)	—	(4,471)
Fittings	(985)	(100)	2	—	—	(1,083)
Vehicles	(43)	(12)	—	—	—	(55)
Computer equipment	(1,365)	(91)	24	11	—	(1,421)
Furniture	(223)	(11)	5	1	—	(228)
In progress	—	—	—	—	—	—
TOTAL - Accumulated depreciation	(12,032)	(1,637)	1,338	8	—	(12,323)
Accumulated impairment


Buildings on non-freehold land	(455)	—	455	—	—	—
Scientific equipment	(59)	—	51	—	—	(9)
Fittings	(24)	—	24	—	—	—
Vehicles	—	—	—	—	—	—
Computer equipment	(10)	—	10	—	—	—
Furniture	(3)	—	3	—	—	—
In progress	—	—	—	—	—	—
TOTAL - Accumulated impairment	(552)	—	543	—	—	(9)
TOTAL - Net	8,210	(798)	455	8	(3)	7,872

Assets related to contracts that were originally classified as legacy finance leases are scientific equipment and are accounted for under IFRS 16. Their net carrying value as of December 31, 2022 and 2023 amounted to €27 and €0 respectively.

Amortization

Amortization of an asset starts when it becomes available for use. The ~~Company does not have any goodwill.~~asset should be in the location and condition that is required for it to be operating in the manner intended by management, which – in the case of in process research and development (IPR&D) acquired from Versantis, will happen once it receives regulatory and marketing approval. Until that point, it is tested for impairment annually in accordance with the requirements of IAS 36. The asset is tested for impairment by comparing its recoverable amount with its carrying amount once a year, at a minimum. An additional impairment test is required whenever there is an indication that an intangible asset may be impaired.

Impairment

If indicators of impairment are identified, amortizable intangible assets and depreciable tangible assets are subject to an impairment test under the provisions of IAS 36, Impairment of Assets.

The Group has considered that the discontinued use of some equipment following the termination of ~~RESOLVE-IT~~RESOLVE-IT® as well as the decision to no longer use part of the leased premises were indicative of an impairment loss requiring the completion of an impairment test of property, plant and equipment or of the rights of use recognized in the statement of financial position for this equipment and lease agreements.

The recovery value of an asset is the higher value between the value in use and the fair value less costs of divestment. The value in use is evaluated in relation to the future forecasted cash flows, discounted at current interest rates, before tax, which reflects the current market appreciation of the time value of money and the risks specific to the asset. In the present case, the recovery value of the tested assets corresponds to their fair value less costs of ~~divestments.~~divestment.

F-35

The impacts related to the impairment (and any reversals thereof) of tangible assets and rights of use related to equipment and premises that are no longer in use due to the discontinuation of the ~~RESOLVE-IT~~RESOLVE-IT® study are recognized in the consolidated statement of operations under “Reorganization and restructuring costs”.

Impairment test of assets under IAS 36

Some equipment belonging to the Group and others under a leasing agreement were no longer in use following the reorganization of the group’s activities and the termination of the RESOLVE-IT® trial decided in mid-2020.

~~4.9.Financial instruments~~This indication of loss of value led the Group to conduct an impairment test over owned and leased equipment, based on the value at which this equipment may be divested (on the basis of agreements with the lessors on the early purchase of the equipment and near-term purchase offers) in order to determine the recovery value.

~~IFRS 9 “Financial Instruments” takes into account~~In 2022, part of these elements, mainly scientific equipment, were sold. As a result the ~~following three aspects of booking financial instruments :~~

~~F-15~~

accumulated impairment for these equipments was reduced to €97, including:

•~~Classification~~€59 for scientific equipment (of which €31 related to owned equipment and ~~measurement;~~€28 of leased equipment),

•~~Impairment and;~~€24 for fittings, and

•~~Hedge accounting.~~€13 for computer equipment and furniture,

~~Loans and borrowings are initially measured at fair value and subsequently recorded at amortized cost.~~including associated liabilities.

~~The IFRS 13 "Fair value measurement" amendment determines three categories~~In 2023, part of ~~financial instruments according~~these elements, mainly scientific equipment, were sold. As a result the related accumulated impairment was reduced to ~~a fair value hierarchy :~~€9, including:

•~~Level 1 : Fair value measured~~€9 for scientific equipment (of which €9 related to owned equipment and €0 of leased equipment).

It should be noted that the reversal of provisions related to unused premises in the amount of €455 corresponds to the reorganization of the RESOLVE-IT® study, now substantially complete.

Supplemental IFRS 16 Disclosures

Right of use assets and accumulated amortization

In accordance with IFRS 16, the Group has chosen not to present the right of use separately from other assets and has added them to the fixed assets of the same nature as the underlying leased assets.

Therefore, the right of use assets and related accumulated amortization as of December 31, 2022 included in the table above affect:

•The line item “Building on ~~the basis of quoted prices in active markets for identical assets or liabilities;~~non-freehold land" amounting to €10,665 and €3,839, respectively;

•~~Level 2 : Fair value measured~~The line item "Scientific equipment", amounting to €1,502 and €1,475 respectively.

Therefore, the right of use assets and related accumulated amortization as of December 31, 2023 included in the table above affect:

•The line item “Building on ~~the basis of valuation methods relying on quoted prices for similar assets, liabilities or observable inputs in active markets;~~non-freehold land" amounting to €11,067 and €4,940, respectively;

•~~Level 3 : Fair value measured on the basis~~The line item "Scientific equipment", amounting to €741 and €741 respectively.

Right of ~~valuation methods relying entirely or~~use additions

There were no Right of use asset additions in ~~part on unobservable inputs such as quoted prices in inactive markets or the valuation based on multiples for non-listed securities.~~2023.

~~4.10.~~16.~~Inventories~~TRADE AND OTHER RECEIVABLES

~~The Company recognizes inventories of laboratory consumables in connection with its former co-research agreements.~~

~~These inventories are measured at the lower of cost and net realizable value. Cost is determined using the weighted average cost method.~~

~~4.11.Trade and other receivables~~Accounting policies

Trade and other receivables are recognized at fair value, which is the nominal value of invoices unless payment terms require a material adjustment for the time value discounting effect at market interest rates. Trade receivables are subsequently measured at amortized cost. Impairment losses on trade accounts receivable are estimated using the expected loss method, in order to take account of the risk of payment default throughout the lifetime of the ~~receivables .~~receivables.

Receivables are classified as current assets, except for those with a maturity exceeding 12 months after the reporting date, according to IFRS 9 standards ("expected credit loss").

F-36

Trade and other receivables consisted of the following:


Trade and other receivables - Total	As of
(in € thousands)	2022/12/31	2023/12/31
Trade receivables, net	3,188	18,526
Research tax credit	11,299	12,200
Social security costs receivables	1	—
VAT receivables	1,288	1,476
Grants receivables	4	7
Other receivables	126	498
TOTAL	15,906	32,707
Of which : Current	15,906	32,707
Of which : Non-current	—	—

Trade receivables, net

Trade receivables amounted to €18,526 as of December 31, 2023. The balance mainly corresponds to revenue related to the our milestone receivable with Ipsen. Per IFRS 7.35(h), we have concluded that the expected credit loss on this amount is €0.

Trade receivables amounted to €3,188 as of December 31, 2022. The balance mainly corresponds to revenue related to the inventory purchase agreement with Ipsen.

Research tax credit

The research tax credit receivable for the year 2022 amounted to €11,299.

The research tax credit receivable for the year 2023 amounts to €12,200.

Note that there is also a tax inspection currently taking place as explained in Note 11 - "Income tax".

VAT receivables

The VAT receivable amounted to €1,476 at December 31, 2023.

The VAT receivable amounted to €1,288 at December 31, 2022.

Other receivables

The line item “other receivables” primarily consists of credit notes from suppliers for €498 and €126, respectively, as of December 31, 2023 and December 31, 2022.

~~4.12.~~17.~~Other financial assets~~INVENTORIES

The Company recognizes inventories of laboratory consumables.

These inventories are measured at the lower of cost and net realizable value. Cost is determined using the weighted average cost method.

18.OTHER FINANCIAL ASSETS

Accounting policies

A financial asset is initially recognized as measured at amortized cost, at fair value through other comprehensive income - debt instrument, at fair value through other comprehensive income - equity instrument, or at fair value through profit or loss.

Financial assets will not be reclassified after initial recognition, unless we change our economic model of financial asset management. If so, all affected financial assets would be reclassified as of the first day of the first reporting period following the change in economic model. No such reclasses have taken place in any period presented herein.

A financial asset is measured at amortized cost if both of the following conditions are met, and if it is not measure at fair value through profit or loss:

F-37

•Its ownership is part of an economic model of which the objective is to hold assets in order to receive its contractual cash flows;

•Its contractual conditions provide for cash flows at defined dates, which correspond only to principal payments and interest on the remaining principal amount.

A debt instrument is measured at fair value through other comprehensive income if both of the following conditions are met, and if it is not measure at fair value through profit or loss:

•Its ownership is part of an economic model of which the goal is met through both the receipt of contractual cash flows and the sale of financial assets;

~~F-16~~

•Its contractual conditions provide for cash flows at defined dates, which correspond only to principal payments and interest on the remaining principal amount.

At the time of initial recognition of an equity instrument that is not held for trading, we may irrevocably choose to present future changes in fair value in other comprehensive income. This choice is made for each investment.

All financial assets that are not categorized as measured at amortized cost or at fair value through other comprehensive income as previously described are measured at fair value through profit or loss.

Financial detail

Other financial assets consisted of the following:


Financial assets - Total	As of
(in € thousands)	2022/12/31	2023/12/31
Non consolidated equity investments	3,133	2,348
Other investments	483	471
Financial investments	4,550	—
Loans	428	472

Deposits and guarantees	335	303
Liquidity contract	534	531
TOTAL	9,464	4,125
Of which : Current	4,550	—
Of which : Non-current	4,914	4,125


Financial assets - Variations	As of	Increase	Decrease	As of
(in € thousands)	31/12/2022			31/12/2023
Non consolidated equity investments	3,133	—	(785)	2,348
Other investments	483	0	(12)	471
Financial investments	4,550	—	(4,550)	—
Loans	428	44	—	472

Deposits and guarantees	335	35	(68)	303
Liquidity contract	534	0	(3)	531
TOTAL	9,464	80	(5,419)	4,125

~~4.13.Cash and cash equivalents~~

~~Cash and cash equivalents comprise cash on hand, bank accounts and term deposits, together with short-term deposits and highly liquid investments. They are readily convertible to a known~~The total amount of ~~cash and thus present~~financial assets of the Company was €9,464 at December 31, 2022, as is €4,125 at December 31, 2023. This change is mainly due to the short term financial asset with a ~~negligible risk~~term of 180 days as well as a ~~change~~recorded impairment related to the Company's shares in ~~value. They also include Undertakings~~Genoscience Pharma.

Non-consolidated equity investments

As of December 31, 2023, the value of "Non-consolidated equity investments" totaled €2,348, which relates solely to our equity purchase in Genoscience Pharma.

The gross value of the investment (and the initial transaction amount from 2021) totals €3,133.

The net value of the investment (including an impairment of €785) totals 2,348.

F-38

Since the transaction occurred, no shares have been sold.

We did not complete the equity purchase in Genoscience Pharma for ~~Collective Investments~~trading purposes. Therefore, pursuant to IFRS 9, we elected to classify the equity in ~~Transferable Securities (UCITs) whose characteristics allow them to be classified~~Genoscience Pharma we acquired in December 2021 as ~~cash and cash equivalents.~~

~~Initially~~equity instruments recognized at ~~their purchase cost at~~fair value through other comprehensive income (OCI). At the ~~transaction date, investments are subsequently~~time of initial recognition in 2021, this investment in equity instruments has been measured at fair ~~value. Changes~~value, inclusive of acquisition costs related to the purchase. The amount recognized on the balance sheet at December 31, 2021 corresponds to the subscription price agreed upon between the parties as representative of the value of Genoscience Pharma a few days before closing of the period. For future closings, changes in fair value on these equity instruments are recognized as OCI. This OCI may not be reused as profit or loss, including in the case of a sale. If applicable, only dividends related to the investment in equity instruments will be recognized as profit provided that all conditions are met.

For 2023, and in accordance with IFRS 13, we updated our estimated of the fair value of our equity stake in Genoscience Pharma, which was based on a valuation methodology including a royalty based income approach using discounted cash flow techniques for the company's main scientific research programs. The aforementioned income method utilizes management’s estimates of future operating results, cash flows discounted using a weighted-average cost of capital that reflects market participant assumptions, and the expected success rate of each program. Based on our analysis performed as of December 31, 2023, an impairment loss of €785 was recognized in OCI.

The period over which management has projected its cash flows spans through 2039. The growth rate used to extrapolate cash flow projections is 1%. Furthermore, we have performed the following sensitivity analyses in order to determine the change in value of the asset by modifying certain key assumptions.

Values assigned to each key assumption

Discount rate: 12.4%

The amount by which the asset would decrease if the weighted average cost of capital increased by 1%: €159

Overall expected success rate: 12.9%

The amount by which the asset would decrease if the estimated overall success rate decreased by 1%: €212

Indicators of impairment considered by the Group as part of the implementation of the impairment test above are as follows:

•Failure of or unfavorable data from our clinical trials

•Competition from other clinical trial programs covering the same indications as our drug candidates

•Availability of necessary financing

Other investments

As of December 31, 2023, the value of "Other investments" totaled €471. The balance relates solely to our investment in CAPTECH SANTE.

On May 24, 2022, GENFIT undertook to subscribe for 50 units of the CAPTECH SANTE Professional Equity Fund (Fonds Professionnel de Capital Investissement – FPCI) in the amount of €500. On June 25, 2022, the management company made an initial call for funds from GENFIT in an amount equal to 35% of the subscription amount, i.e. €175, which GENFIT paid. The remaining subscription amount of €325 must be paid upon successive calls from the fund management company.

GENFIT’s investment in CAPTECH SANTE constitutes a debt instrument that does not meet the SPPI (solely payments of principal and interest) criterion test. It is therefore classified as a financial asset recognized at fair value through profit or loss. This investment is also consistent with a regular way purchase of a financial asset. GENFIT has opted to use the trade date as date of initial recognition. An amount of €500 was therefore recognized in the Group’s balance sheet on May 24, 2022.

As of December 31, 2023, a loss of €12 was recognized based on the net ~~financial income (expenses).~~asset value of the units as of said date.

Financial investments

As of December 31, 2023, and 2022, the value of "Financial investments" totaled €0 and €4,550 respectively. This change related solely to a short term investment whose term was 180 days, liquidated in 2023.

Liquidity contract

As of December 31, 2023, the liquidity account had a cash balance of €531, and as of December 31, 2022 a cash balance of €534.

F-39

CIC holds the following number of GENFIT shares on behalf of the Company, recorded as a deduction in equity:

Financial assets - Current

As of

2022/12/31

2023/12/31

Number of shares (recorded as a deduction from equity)

138,691

147,812

~~4.14.~~19.~~Equity~~OTHER ASSETS

~~Share capital comprises ordinary shares~~Other current assets of €2,615 at December 31, 2023 and ~~ordinary shares with double voting rights classified in equity. Costs directly attributable~~€1,998 at December 31, 2022, consisting of prepaid expenses related to ~~the issue of ordinary shares or share options are recognized as a reduction in the share premium.~~

The liquidity agreement consists of a share buyback program contracted to an investment service provider. Purchases and sales of the Company's shares carried out under the contract are recognized directly in shareholders’ equity under treasury shares. See ~~note 10 “Other financial income”~~.current operating expenses.

~~4.15.~~20.~~Loans and borrowings~~LOANS AND BORROWINGS

Accounting policies

Financial liabilities are initially recognized at fair value, net of directly attributable transaction costs, and are subsequently measured at amortized cost using the effective interest rate method.

The Group derecognizes financial liabilities when the contractual obligations are discharged, cancelled or expire.

The bonds convertible or exchangeable into new or existing shares ~~(OCEANE—~~(OCEANEs—see ~~Section 12.1, "~~Note 20.1 - "Breakdown of convertible ~~loan~~loan"") are recognized as follows: in accordance with IAS 32, Financial Instruments—Presentation, , if a financial instrument has different components and the characteristics indicate that some should be classified as liabilities and others as equity, the issuer must recognize the different components separately.

The liability component is measured, at the date of issuance, at its fair value on the basis of future contractual cash flows discounted at market rates (taking into consideration the issuer's credit risk) of a debt having similar characteristics but without the conversion option.

The value of the conversion option is measured by the difference between the bond's issue price and the fair value of the liability component. After deduction of the pro rata portion of expenses related to the transaction, this amount is recognized in the line item "Share premium" under shareholders' equity and is subject to a calculation of deferred tax according to IAS 12.28.

The liability component (after deduction of the pro rata portion of the transaction expenses attributed to the liability and the conversion option) is measured at amortized cost. A non-monetary interest expense, recorded in net loss is calculated using an effective interest rate to progressively bring the debt component up to the amount which will be repaid (or converted) at maturity. A deferred tax liability is calculated on the basis of this amount. The shareholders' equity component is not remeasured. ~~See~~

20.1. ~~Note 2~~.2 ~~“Renegotiation~~Breakdown of convertible loan

Introduction

On October 16, 2017, the Company issued 6,081,081 OCEANEs at par with a nominal unit value of €29.60 per bond for an aggregate nominal amount of €180 million and the debt was renegotiated in 2020 and 2021.

As of December 31, 2022 and 2023, key terms and conditions and balances are as follows:

F-40

Updated balances


			As of 31/12/2022 :
			Number of bonds						1,923,662
			Nominal amount of the loan						56,940,395.20€
			Nominal unit value of the bonds						29.60€
			Effective interest rate						8.8%
			As of 31/12/2023 :
			Number of bonds						1,923,662
			Nominal amount of the loan						56,940,395.20€
			Nominal unit value of the bonds						29.60€
			Effective interest rate						8.8%

Nominal annual interest rate

The nominal annual interest rate is 3.5%, payable semi-annually in arrears.

Repayment Terms

Final reimbursement is scheduled for October 16, 2025.

Redemption prior to maturity at the option of the ~~convertible bond~~Company is possible if the arithmetic volume-weighted average price of GENFIT's listed share price and the then prevailing conversion ratio over a 20 day trading period exceeds 1.5 times the nominal value of the OCEANEs.

Conversion ratio and terms

The conversion ratio is 5.5 ordinary shares per bond.

There are no specific terms that need to be met for a holder of OCEANEs to convert their debt ~~(OCEANEs)”~~into GENFIT shares.

There were no conversions in 2022 or 2023.

Conversion / exchange premium

The conversion / exchange premium is 30% relative to GENFIT's reference share price (22.77€).

Maximum Dilution

The potential issuance of new shares upon conversion requests of the outstanding OCEANEs would represent 21.2% of the share capital of the Company at December 31, 2022 (representing a 17.5% dilution if all OCEANEs were converted).

The potential issuance of new shares upon conversion requests of the outstanding OCEANEs would represent 21.2% of the share capital of the Company at December 31, 2023 (representing a 17.5% dilution if all OCEANEs were converted).

Deferred taxes

Deferred tax assets and deferred tax liabilities recognized on the balance sheet as of December 31, 2021 and 2022 related to the OCEANEs are disclosed in Note 11.2 - "Income Ta x - Deferred tax assets and liabilities".

Current and non current balances

Convertible loans - Total

As of

(in € thousands)

2022/12/31

2023/12/31

Convertible loans

50,276

52,622

TOTAL

50,276

52,622

Convertible loans - Current

As of

(in € thousands)

2022/12/31

2023/12/31

Convertible loans

415

TOTAL

415

F-41

Convertible loans - Non current

As of

(in € thousands)

2022/12/31

2023/12/31

Convertible loans

49,861

52,206

TOTAL

49,861

52,206

20.2.Breakdown of other loans and borrowings

Other loans and borrowings consisted of the following:


Other loans and borrowings - Total	As of
(in € thousands)		2022/12/31	2023/12/31
Refundable and conditional advances		3,229	—
Bank loans		15,196	11,578


Obligations under leases		6,559	5,884
Accrued interests		14	7

Bank overdrafts		—	89
TOTAL		24,999	17,557


Other loans and borrowings - Current	As of
(in € thousands)		2022/12/31	2023/12/31
Refundable and conditional advances		—	—
Bank loans		3,619	6,339


Obligations under leases		1,032	1,076
Accrued interests		14	7

Bank overdrafts		—	89
TOTAL		4,665	7,510


Other loans and borrowings - Non current	As of
(in € thousands)	2022/12/31	2023/12/31
Refundable and conditional advances	3,229	—
Bank loans	11,578	5,239


Obligations under leases	5,527	4,808
Accrued interests	—	—

Bank overdrafts	—	—
TOTAL	20,334	10,047

20.2.1.Refundable and conditional advances

The following table summarizes advances outstanding at December 31, 2023 and 2022.


Refundable and conditional advances—general overview	Grant date	Total amount allocated	Receipts	Cancellations	Effects of discounting	Net book value As of 2023/12/31
(in € thousands)
BPI FRANCE - IT-DIAB	12/23/2008	3,229	3,229	(3,229)	—	—
Development of a global strategy for the prevention and management of type 2 diabetes
TOTAL		3,229	3,229	(3,229)	—	—


Refundable and conditional advances—general overview	Grant date	Total amount allocated	Receipts	Repayments	Effects of discounting	Net book value As of 2022/12/31
(in € thousands)
BPI FRANCE - IT-DIAB	12/23/2008	3,229	3,229	—	—	3,229
Development of a global strategy for the prevention and management of type 2 diabetes
TOTAL		3,229	3,229	—	—	3,229

F-42

BPI France - IT-DIAB

On December 23, 2008, the Group received an advance from Bpifrance (the BPI France IT-DIAB) as part of a framework innovation aid agreement involving several scientific partners and for which the Group was the lead partner. The contribution expected at each stage by each of the partners in respect of work carried out and results achieved is defined in the framework agreement. With respect to the Group, the aid consisted of a €3,229 conditional advance and a €3,947 non-repayable government grant.

The conditional advance is not refundable except in the event of success. The program ended on December 31, 2014. In the event of success, defined as the commercial spin-offs of the IT-Diab program which involves products for the ~~accounting applied~~treatment or diagnosis of type 2 diabetes, in that case, the financial returns generated will be used initially to repay the €3,229 conditional advance and the agreement stipulates that the conditional advance will be regarded as repaid in full when the total payments made in this regards by the recipient, discounted at the rate of 5.19%, equal the total amount, discounted at the same rate, of the aid paid. Any further amounts will be classified as additional payments, up to a maximum amount of €14,800.

As provided in the project assistance contract, we sent a letter to Bpifrance in December 2019 in order to notify it of our Labcorp and Terns Pharmaceuticals contracts while indicating that elafibranor was now aimed at treating hepatic diseases and no longer type 2 diabetes as provided for in the aid agreement. We proposed to Bpifrance to establish a statement of abandonment of the IT-DIAB project on which the above advance is based. Following this letter, the parties met in March 2020 for the presentation of our arguments, and in June 2020 following the publication of the results of the RESOLVE-IT® study, and a new letter was sent in November 2020.

On October 20, 2023, BPI France agreed to formally recognize the failure of the project and therefore write off their outstanding receivable as previously mentioned. As of December 31, 2023, GENFIT had no remaining obligation associated with this, and thus the liability was reversed with the related income recorded in "Other income" on the consolidated statement of operations.

20.2.2.Bank loans

In the context of the COVID-19 pandemic, in 2021 the Company secured several State-Guaranteed Loans (or "Prêt Garanti par l'Etat (PGE) Bancaire") and Subsidized Loans (or "BPI Prêt Taux Bonifié").

Bank loans consisted of the following as of December 31, 2022 and 2023 with the ~~renegotiation.~~following interest rates and repayment terms:


Bank loans	Loan	Facility	Interest		Available As of 2023/12/31	Installments	Outstanding As of 2022/12/31	Outstanding As of 2023/12/31
(in € thousands)	date	size	rate







BNP 4	April 2017	800	0.87	%	—	60 monthly	54	—
AUTRES	-	—	—	%	—	0	17	13
CDN PGE	June 2021	900	1.36	%	—	8 quarterly	900	675
CIC PGE	June 2021	2,200	0.75	%	—	8 quarterly	2,200	1,650
BNP PGE	June 2021	4,900	0.45	%	—	8 quarterly	4,900	3,675
NATIXIS PGE	June 2021	3,000	0.40	%	—	8 quarterly	3,000	2,250
BPI PGE	July 2021	2,000	2.25	%	—	16 quarterly	1,900	1,500
BPI PRÊT TAUX BONIFIE	November 2021	2,250	2.25	%	—	20 quarterly	2,250	1,820
TOTAL							15,221	11,583

The effective interest rates are follows for the PGE loans:

•CDN PGE (loan of €900): 2.08% per annum

•CIC PGE (loan of €2,200): 1.46% per annum

•BNP PGE (loan of €4,900): 1.16% per annum

•NATIXIS PGE (loan of €3,000): 1.11% per annum

•BPI PGE (loan of €2,000): 1.65% per annum

20.2.3.Maturities of financial liabilities

F-43


Maturity of financial liabilities	As of	Less than	Less than	Less than	Less than	Less than	More than
(in € thousands)	2023/12/31	1 year	2 years	3 years	4 years	5 years	5 years

TOTAL - Refundable and conditional advances	—	—	—	—	—	—	—
Convertible loans	57,356	415	56,940	—	—	—	—
Bank loans	11,578	6,339	3,601	867	771	—	—


Leases	5,884	1,076	1,088	1,101	1,114	1,127	378
Accrued interests	7	7	—	—	—	—	—

Bank overdrafts	89	89	—	—	—	—	—
TOTAL - Other loans and borrowings	74,913	7,926	61,630	1,968	1,884	1,127	378
TOTAL	74,913	7,926	61,630	1,968	1,884	1,127	378

The values in the table above are contractual, undiscounted values.

21.FAIR VALUE OF FINANCIAL INSTRUMENTS

Accounting policies

IFRS 9 “Financial Instruments” takes into account the following three aspects of booking financial instruments :

•Classification and measurement;

•Impairment and;

•Hedge accounting.

Loans and borrowings are initially measured at fair value and subsequently recorded at amortized cost.

Pursuant to IFRS 7 – Financial Instruments: Disclosures, the financial instruments are presented into three categories according to a hierarchical method used to establish their fair value.

If financial instruments are measured at fair value, they are measured according to a hierarchy comprising three levels of valuation inputs:

•Level 1: Fair value measured on the basis of quoted prices in active markets for identical assets or liabilities;

•Level 2: Fair value measured on the basis of valuation methods relying on quoted prices for similar assets, liabilities or observable inputs in active markets;

•Level 3: Fair value measured on the basis of valuation methods relying entirely or in part on unobservable inputs such as quoted prices in inactive markets or the valuation based on multiples for non-listed securities.

Financial detail

The following tables provide the financial assets and liabilities carrying values by category and fair values as of December 31, 2023 and December 31, 2022:

F-44


	As of 31/12/2022
	Carrying value				Fair value
	As per	Assets at	Assets at	Assets at	Debt at	Level 1	Level 2	Level 3
	statement of	fair value	fair value	amortized	amortized
	financial	through	through OCI	cost	cost
(in € thousands)	position	profit & loss
Assets
Equity investments	3,133		3,133					3,133
Other investments	483	483						483
Financial investments	4,550	4,550				4,550
Loans	428			428			428

Deposits and guarantees	335			335			335
Liquidity contracts	534	534				534
Trade receivables	3,188			3,188			3,188
Cash and cash equivalents	136,001	136,001				136,001
TOTAL - Assets	148,653	141,568	3,133	3,951	—	141,085	3,951	3,617
Liabilities
Conditional advances	3,229				3,229			3,229
Convertible loans	50,276				50,276		52,708
Bank loans	15,196				15,196		15,196


Obligations under finance leases	6,559				6,559		6,559
Accrued interests	14				14		14


Trade payables	8,613				8,613		8,613
Other payables	1,325				1,325		1,325
TOTAL - Liabilities	85,214	—	—	—	85,214	—	84,416	3,229


	As of 31/12/2023
	Carrying value				Fair value
	As per	Assets at	Assets at	Assets at	Debt at	Level 1	Level 2	Level 3
	statement of	fair value	fair value	amortized	amortized
	financial	through	through OCI	cost	cost
(in € thousands)	position	profit & loss
Assets
Equity investments	2,348		2,348					2,348
Other investments	471	471						471

Loans	472			472			472

Deposits and guarantees	303			303			303
Liquidity contracts	531	531				531
Trade receivables	18,526			18,526			18,526
Cash and cash equivalents	77,789	77,789				77,789
TOTAL - Assets	100,439	78,790	2,348	19,300	—	78,319	19,300	2,819
Liabilities

Convertible loans	52,622				52,622		51,939
Bank loans	11,578				11,578		11,578


Obligations under finance leases	5,884				5,884		5,884
Accrued interests	7				7		7

Bank overdrafts	89				89		89
Trade payables	10,448				10,448		10,448
Other payables	914				914		914
TOTAL - Liabilities	81,541	—	—	—	81,541	—	80,858	—

It should be noted that the section above “Equity investments” concerns the nonconsolidated equity investments in Genoscience. The gross value of the asset is €3,133 and was partially impaired in 2023. See N ote 18 - "Other financial assets ".

~~4.16.~~22.~~Trade and other payables~~TRADE AND OTHER PAYABLES

~~F-17~~

Accounting policies

Trade and other payables are initially recognized at the fair value of the amount due. This value is usually the nominal value, due to the relatively short period of time between the recognition of the instrument and its repayment.

F-45

Financial detail

Trade and other payables consisted of the following:


Trade and other payables - Total	As of
(in € thousands)		2022/12/31	2023/12/31
Trade payables		8,613	10,448
Social security costs payables		4,838	4,188
VAT payables		200	3,139
Taxes payables		316	110
Other payables		1,325	914
TOTAL		15,293	18,799


Trade and other payables - Current	As of
(in € thousands)		2022/12/31	2023/12/31
Trade payables		8,613	10,448
Social security costs payables		4,838	4,188
VAT payables		200	3,139
Taxes payables		316	110
Other payables		877	914
TOTAL		14,845	18,799

Trade and other payables - Non current

As of

(in € thousands)

2022/12/31

2023/12/31

Other payables

448

—

TOTAL

448

—

At December 31, 2023, trade payables amounted to €10,448 (€8,613 at December 31, 2022). This change is primarily due to an increase in accrued expenses relating to yet unbilled amounts from the clinical trial sites via the Clinical Research Organizations (CROs) in charge of the Company's clinical trials. (€4,765 and €3,924 at December 31, 2023 and 2022 respectively). The timeframe in which those invoices will be received by the Company is unknown and may be spread out over a long period after the services have been performed.

23.DEFERRED INCOME AND REVENUE

Out of the €120 million upfront payment received from Ipsen in application of the licensing agreement signed in December 2021, an amount of €40 million was recognized as Deferred income in 2021. The Deferred income is recognized as revenue as GENFIT carries out its part of the double-blind ELATIVE® study, based on the progress made relative to the originally developed budget. As of December 31, 2022, the Company considers that this initial budget is still appropriate based on progress performed.

In 2022, €15.9 million of said balance was recognized as revenue. As of December 31, 2022, €24.1 million of Deferred income remains, of which €14.4 million relates to Current deferred income and of which €9.7 million relates to Non-current deferred income, which was determined based on the original budget.

In 2023, €8.7 million of said balance was recognized as revenue. As of December 31, 2023, €15.3 million of Deferred income remains, of which €11.6 million relates to Current deferred income and of which €3.8 million relates to Non-current deferred income, which was determined based on the original budget.

See "Note 7 - "Revenues and Other income".

~~4.17.~~24.Provisions

Accounting policies

In accordance with IAS 37, Provisions Contingent Liabilities and Contingent Assets, provisions are recognized when the Group has a present obligation (legal, regulatory, contractual or constructive) as a result of a past event, for which it is probable that an outflow of resources will be required to settle the obligation, and of which the amount can be estimated reliably.

The amount recognized as a provision is the best estimate at the reporting date of the expenditure required to settle the present obligation.

Provisions are discounted when the time value effect is material.

F-46

A provision for reorganization is recognized when the Group has approved a formal and detailed plan for its reorganization and has either started to implement it or publicly disclosed it.

A provision for onerous contract is estimated at the actual value of the lowest expected cost of either the cancellation or the execution of the contract, the latter being established on the basis of the additional costs required to fulfill the obligations stipulated by the contract. Before a provision is established, the Group recognizes any impairment loss that occurred on the assets dedicated to this ~~contract (see~~ ~~Note 2~~.1 ~~“Termination of RESOLVE IT~~contract.

Financial detail

At December 31, 2023 and ~~the development program of elafibranor in NASH”~~).

It is of note that, pursuant to IAS 37, our obligations under the terms of the agreement we entered into with Genoscience Pharma constitute contingent liabilities not recognized in the Company's consolidated financial statements at December 31, ~~2021 (see~~2022, this line item amounted to €40 and €61, respectively.


Change in provisions	As of	Increase	Decrease	Decrease	As of
(in € thousands)	2022/12/31		(used)	(unused)	2023/12/31



Provision for charges	61	0	(21)	0	40
TOTAL	61	0	(21)	0	40

For further information related to contingent assets and contingent liabilities, see ~~note 2.5 "Signature of a Licensing Agreement with Genoscience Pharma"~~N ote 29 - "Commitments and Co ntingent Liabilities ").

Future milestone and revenue based royalty payments may be recorded pursuant to Contingent liability under IAS 37 or intangible asset under IAS 38. Under IAS 38, we record a provision when we have a present obligation, whether legal or constructive, as a result of a past event; it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation; and a reliable estimate can be made of the amount of the outflow of resources. Under IAS 38, we record intangible asset when it is probable that the expected future economic benefits that are attributes to the assets will flow to us and the cost of asset can be measured reliably.

~~4.18.~~25.~~Employee benefits~~EMPLOYEE BENEFITS

Accounting policies

The Group's pension schemes and other post-employment benefits consist of defined benefit plans and defined contribution plans.

~~4.18.1.~~25.1.Defined benefit plans

Defined benefit plans relate to French retirement benefit plans under which the Group is committed to guaranteeing a specific amount or level of contractually defined benefits. The obligation arising from these plans is measured on an actuarial basis using the projected unit credit method. The method consists of measuring the obligation based on a projected end-of-career salary and vested rights at the measurement date, according to the provisions of the collective bargaining agreement, corporate agreements and applicable law.

Actuarial assumptions are used to determine the benefit obligations. The amount of future payments is determined on the basis of demographic and financial assumptions such as mortality, staff turnover, pay increases and age at retirement, and then discounted to their present value. The discount rate used is the yield at the reporting date on AA credit-rated bonds with maturity dates that approximate the expected payments for the Group's obligations.

Re-measurements of the net defined benefit liability which comprise actuarial gains and losses are recognized in the statements of other comprehensive loss.

The Group determines the net interest expense on the net defined benefit liability for the period by applying the discount rate used to measure the defined benefit obligation at the beginning of the annual period to the then-net defined benefit liability, taking into account any changes in the net defined benefit liability during the period as a result of contributions and benefit payments.

~~4.18.2.~~25.2.Defined contribution plans

~~F-18~~

Under defined contribution plans, the management of plans is performed by an external organization, to which the Group pays regular contributions. Payments made by the Group in respect of these plans are recognized as an expense for the period in the statements of operations.

~~4.18.3.~~25.3.Short-term employee benefits

A liability is recognized for the amount expected to be paid under short-term cash bonus or profit-sharing plans if the Group has a present legal or constructive obligation to pay the amount as a result of past service provided by the employee, and the obligation can be estimated reliably.

~~4.19.Other income~~

~~4.19.1.Government grants~~

The Group received until 2016 various forms of government grants. This government aid is provided for and managed by French state-owned entities, and specifically "BPI France" (" Banque Publique d'Investissement "), formerly named "OSEO Innovation".

~~Subsidies received are non-refundable. Conditional advances received are interest-free or are subject to low interest rates depending on contractual provisions.~~

~~Conditional advances related to research programs~~

~~Conditional advances that are interest-free or subject to low interest rates are intended to finance research program’s needs.~~

In accordance with IAS 20, Accounting for Government Grants and Disclosure of Government Assistance, the advantage resulting from interest-free or low interest rates as compared to a market interest rate is considered and accounted for as a government grant. A financial liability is recognized for proceeds received from the advance less the grant, and interest expense is subsequently recorded under the effective interest rate method using a market interest rate.

~~The grant portion of conditional advances is treated as a grant related to income.~~

For advances granted by BPI France, repayment is required in the event of commercial success. In addition, if the Group decides to stop the research program, the conditional advance may be required to be repaid. If a program is unsuccessful, a pre-determined amount may be repayable. The remaining amount, if any, is then considered as a grant and written off in the line item "Other income" in the statements of operations.

~~4.19.2.Research tax credit~~

The Research Tax Credit (" Crédit d'Impôt Recherche ", or "CIR") is granted to entities by the French tax authorities in order to encourage them to conduct technical and scientific research. Entities that demonstrate that their research expenditures meet the required CIR criteria receive a tax credit that may be used for the payment of their income tax due for the fiscal year in which the expenditures were incurred, as well as in the next three years. If taxes due are not sufficient to cover the full amount of tax credit at the end of the three-year period, the difference is paid in cash to the entity by the tax authorities. If a company meets certain criteria in terms of sales, headcount or assets to be considered a small/mid-size company, immediate payment of the Research Tax Credit can be requested. The Group meets such criteria.

The Group applies for CIR for research expenditures incurred in each fiscal year and recognizes the amount claimed in the line item "Other income" in the statements of operations in the same fiscal year. In the notes to the financial statements, the amount claimed is recognized under the heading "Research tax credit" (see ~~Note 9, "Trade and other receivables"~~ ~~and~~ ~~Note 1~~9 ~~"Operating Income"~~).

~~4.20.Research and development expenses~~

~~Research expenses are recorded in the financial statements as expenses (see~~ ~~Note~~ 20 ~~, "Operating expense"~~).

~~In accordance with IAS 38, Intangible Assets, development expenses are recognized as intangible assets only if all the following criteria are met:~~

•~~Technical feasibility necessary for the completion of the development project;~~

~~F-19~~

•~~Intention on the Group's part to complete the project and to utilize it;~~

•~~Capacity to utilize the intangible asset;~~

•~~Proof of the probability of future economic benefits associated with the asset;~~

•~~Availability of the technical, financial, and other resources for completing the project; and~~

•~~Reliable evaluation of the expenses attributed to the intangible asset during its development.~~

~~As of the date of these financial statements none of these criteria have been met.~~

~~4.21.Classification of operating expenses~~

~~Research and development expenses include:~~

•~~employee-related costs;~~

•~~costs related to external employees seconded to the Company (such as clinical development, biometrics and IT…);~~

•~~lab supplies and facility costs;~~

•~~fees paid to scientific advisers and contracted research and development activities conducted by third parties;~~

•~~intellectual property fees corresponding to the filing of the Group's patents and,~~

•~~provision and reversals of provisions in relation to the Research Tax Credit dispute.~~

Contracted research and development activities conducted by third parties include services subcontracted to research partners for technical and/or regulatory reasons. In particular, this includes the production of active ingredients and therapeutic units, all or a part of clinical trials and preclinical trials that are necessary to the development of GENFIT's drug candidates and biomarker candidates.

~~General and administrative expenses include:~~

•~~employee-related costs for executive, business development, intellectual property, finance, legal and human resources and communications functions;~~

•~~facility-related costs;~~

•~~marketing, legal, audit and accounting fees;~~

•~~press relations and communications firm fees;~~

•~~the cost of external employees seconded to the Company (such as security, reception, and accounting..);~~

•~~other service costs (recruitment, etc.);~~

•~~intellectual property fees corresponding to the maintenance of the Group's patents.~~

~~Marketing and market access expenses include:~~

•~~employee-related costs for marketing and business development functions;~~

•~~marketing, and market access firm fees;~~

~~Extraordinary reorganization and restructuring expenses include:~~

•~~the accruals and provisions recognized within the scope of the reduction in force plan;~~

•~~the extraordinary amortization, loss of value and impairment of fixed assets recognized within the scope of the reorganization of GENFIT;~~

•~~the impairment of the right of use of the leased equipment and premises;~~

•~~the portion of the OCEANE renegotiation expenses;~~

•~~the provision recognized for some of the costs of the closing process for the RESOLVE-IT study, which, after detailed analysis, do not have any future economic advantage for the PBC program.~~

•

~~4.22.Share-based compensation~~

The fair value of equity-settled share-based compensation granted to employees, officers, board members and consultants as determined on the grant date is recognized as a compensation expense with a corresponding increase in equity, over the vesting period. The amount recognized as an expense is adjusted to reflect the actual number of awards for which the related service and non-market performance conditions are expected to be met.

~~F-20~~

The fair values of equity-settled share-based compensation granted to employees are measured using the Black-Scholes model with respect to the share warrants (BSA) and redeemable share warrants (BSAAR) and using the Monte Carlo model for the stock options (SO) and free shares (AGA). Measurement inputs include share price on the measurement date, the exercise price of the instrument, expected volatility, expected maturity of the instruments, expected dividends, and the risk-free interest rate (based on government bonds). With respect to the redeemable share warrants, service and non-market performance conditions attached to the transactions are not taken into consideration in determining fair value but are taken into consideration related to recognition of expense. Regarding the stock options and free shares, market conditions are taken into account in the determination of the fair value of the plans award. For share-based compensation awards with non-vesting conditions, the grant date fair value of the share-based compensation is measured to reflect such conditions and there is no adjustment for differences between expected and actual outcomes.

GENFIT may also grant equity-settled share-based compensation in exchange for services to consultants who are not considered employees. In such cases, the value of the services is measured when they are rendered by the consultants and the share-based compensation exchanged for the services is measured at an equal amount. If the value of the services cannot be measured reliably, then such value is measured with reference to the fair value of the equity instruments granted.

~~Share-based compensation granted to consultants consists of share warrants, some of which may be redeemed at GENFIT's discretion.~~

~~Share-based compensation granted to employees consists of redeemable share warrants, stock options and free shares.~~

~~4.23.Income tax~~

~~Income tax expense (or benefit) comprises current tax expense (or benefit) and deferred tax expense (or benefit), as applicable.~~

~~Deferred taxes are recognized for all the temporary differences arising from the difference between the tax basis and the accounting basis of assets and liabilities.~~

~~Deferred tax assets are recognized for unused tax losses, unused tax credits and temporary deductible differences to the extent that :~~

•~~it is probable that future taxable profit will be available against which they can be used; or~~

•~~if there are deferred tax liabilities for the same entity in the same tax jurisdiction on which they can be applied.~~

•

~~4.24.Earnings (loss) per share~~

Basic earnings (loss) per share are calculated by dividing profit or loss attributable to the Company's ordinary shareholders by the weighted average number of ordinary shares outstanding during the period.

Diluted earnings (loss) per share are calculated by adjusting profit attributable to ordinary shareholders and the average number of ordinary shares outstanding weighted for the effects of all potentially dilutive instruments (share warrants, redeemable share warrants, free shares, stock options and bonds convertible into new and/or existing shares).

~~4.25.Operating segments~~

~~The Board of Directors and Chief Executive Officer are the chief operating decision makers.~~

The Board of Directors and the Chief Executive Officer oversee the operations and manage the business as 1 segment with a single activity; namely, the research and development of innovative medicines and diagnostic solutions, the marketing of which depends on the success of the clinical development phase.

5.~~FINANCIAL RISKS MANAGEMENT~~

~~The Group may be exposed to the following risks arising from financial instruments : foreign exchange risk, interest rate risk, liquidity risk and credit risk.~~

~~F-21~~F-47

~~5.1.Foreign exchange risk~~

~~The Group's overall exposure to the foreign exchange risk depends, in particular, on :~~

•~~the currencies in which it receives its revenues;~~

•~~the currencies chosen when agreements are entered into, such as licensing agreements, or co-marketing or co-development agreements;~~

•~~the location of clinical trials on drug or biomarker candidates;~~

•~~the ability, for its co-contracting parties to indirectly transfer foreign exchange risk to the Company;~~

•~~the Group’s foreign exchange risk policy; and~~

•~~the fluctuation of foreign currencies against the euro.~~

Given the significant portion of its operations denominated in US dollars, the Group decided to limit the conversions into euros of its US dollar denominated cash, issued notably from its March 2019 Nasdaq IPO in US dollars, and not to use any specific hedging arrangements, in order to cover expenses denominated in US dollars over the coming years.

The following table shows the sensitivity of the Group's cash and cash equivalent and expenses in U.S. dollars to a variation of 10% of the U.S. dollar against the euro in 2019, 2020 and 2021. It includes, in particular, the upfront payment in December 2021 by Ipsen for the licensing agreement entered into with GENFIT and its equity purchase in the Company :

Sensitivity of the Group's cash and cash equivalents to a variation of +/- 10% As of
of the US dollar against the euro
(in € thousands or in US dollar thousands, as applicable) 2019/12/31 2020/12/31 2021/12/31
Cash and cash equivalents denominated in US dollars 153,438 111,221 81,713
Equivalent in euros, on the basis of the exchange rate described below 136,582 90,637 72,146
Equivalent in euros, in the event of an increase of 10% of US dollar vs euro 151,758 100,708 80,163
Equivalent in euros, in the event of a decrease of 10% of US dollar vs euro 124,166 82,398 65,588

Sensitivity of the Group's expenses to a variation of +/- 10% Year ended
of the US dollar against the euro
(in € thousands or in US dollar thousands, as applicable) 2019/12/31 2020/12/31 2021/12/31
Expenses denominated in US dollars 40,355 47,277 12,566
Equivalent in euros, on the basis of the exchange rate described below 35,922 38,528 11,095
Equivalent in euros, in the event of an increase of 10% of US dollar vs euro 39,914 42,808 12,328
Equivalent in euros, in the event of a decrease of 10% of US dollar vs euro 32,657 35,025 10,086

~~2021/12/31 : Equivalent in euros, on the basis of 1 euro = 1.13261 dollars US~~

~~2020/12/31 : Equivalent in euros, on the basis of 1 euro =1.2271 dollars US~~

~~2019/12/31 : Equivalent in euros, on the basis of 1 euro = 1.1234 dollars US~~

Cash, cash equivalents and financial assets As of
(in € thousands) 2019/12/31 2020/12/31 2021/12/31
At origin, denominated in EUR
Cash and cash equivalents 139,863 80,391 186,609
Current and non current financial assets 1,614 1,391 4,355
Total 141,477 81,782 190,964
At origin, denominated in USD
Cash and cash equivalents 136,884 90,637 72,147
Current and non current financial assets 113 67 76
Total 136,997 90,704 72,223
Total, in EUR
Cash and cash equivalents 276,748 171,029 258,756
Current and non current financial assets 1,727 1,458 4,431
Total 278,474 172,486 263,187

~~F-22~~

~~5.2.Interest rate risk~~

As of December 31, 2021, the Group was only liable for governmental advances or conditional advances and bank loans with no interest or interest at a fixed rate, generally below market rate, with the exemption of the state-guaranteed loans (PGE), the variable rate of which could lead to an increase in interest in the future.

As of December 31, 2019, 2020 and 2021, the Group's financial liabilities totaled €183.6 million, €185.7 million and €74.2 million respectively (net of the equity component of the convertible loan and debt issue costs). Current borrowings are at a fixed rate. The Group's exposure to interest rate risk through its financial assets is also insignificant due to low market rates and since these assets are mainly euro-denominated Undertakings for the Collective Investment of Transferable Securities (UCITs), medium-term negotiable notes or term deposits with progressive rates denominated in euros or US dollars.

~~5.3.Liquidity risk~~

The Group's loans and borrowings mainly consist of bonds convertible or exchangeable into new or existing shares (OCEANE), initially repayable for an nominal amount of €57 million on October 16, 2025 (see ~~Note 12~~.1 ~~“Breakdown of convertible loan”), government advances for research projects and bank loans. For conditional advances, reimbursement of the principal is subject to the commercial success of the related research project (see~~ ~~Note 12~~.2 .1 ~~“Refundable and conditional advances”~~).

The Company has conducted a specific review of its liquidity risk and considers that it is able to meet its future maturities. On December 31, 2019, 2020 and 2021, the Group had €278,474, €172,486 , and €263,187 respectively in cash and cash equivalents and other financial assets. The Company does not believe it is exposed to short-term liquidity risk. The Company believes that the Group's cash and cash equivalents and current financial instruments are sufficient to ensure its financing, in light of its current projects and obligations and of the renegotiation, effective in 2021, of its obligations pertaining to the OCEANE debt, including the extension of the maturity date, for at least the next twelve months.

If the Group's funds are insufficient to cover any additional financing needs, the Group would require additional financing. The conditions and arrangements for any such new financing would depend, among other factors, on economic and market conditions that are beyond the Group's control.

~~5.4.Credit risk~~

Credit risk is the risk of financial loss if a customer or counterparty to a financial asset defaults on their contractual commitments. The Group is exposed to credit risk due to trade receivables and other financial assets.

~~The Group's policy is to manage this risk by transacting with third parties with good credit standards.~~

6.~~CASH AND CASH EQUIVALENTS~~

~~The main components of cash equivalents were:~~

•~~UCITS and interest-bearing current accounts, available immediately;~~

•~~Term accounts, available within the contractual maturities or by the way of early exit with no penalty; and~~

•~~Negotiable medium-term notes, available with a quarterly maturity or by the way of early exit with no penalty.~~

~~These investments, summarized in the tables below, are short-term, highly liquid and subject to insignificant risk of changes in value.~~

Cash and cash equivalents As of
(in € thousands) 2019/12/31 2020/12/31 2021/12/31
Short-term deposits 263,147 166,034 69,045
Cash on hand and bank accounts 13,601 4,995 189,711
TOTAL 276,748 171,029 258,756

~~F-23~~

Short-term deposits As of
(in € thousands) 2019/12/31 2020/12/31 2021/12/31
UCITS 3,096 2,060 —
TERM ACCOUNTS 215,018 143,827 69,045
INTEREST-BEARING CURRENT ACCOUNT 45,033 20,147 —
TOTAL 263,147 166,034 69,045

7.~~INTANGIBLE ASSETS~~

~~Intangible assets consist mainly of office and administrative software as well as scientific software purchased by the Group.~~

~~The following tables show the variations in intangible assets for the years ended December 31, 2019, 2020 and 2021:~~

As of Increase Decrease Translation Reclassification As of
(in € thousands) 2018/12/31 adjustments 2019/12/31
Gross
Software 2,049 653 (29) — 378 2,739
Patents 21 70 — — — 91
Other intangibles 313 65 (313) — (378) —
TOTAL—Gross 2,384 788 (342) — — 2,830
Accumulated depreciation and impairment
Software (1,567) (350) 29 — — (2)
Patents (21) — — — — (21)
Other intangibles — — — — — —
TOTAL - Accumulated depreciation and impairment (1,588) (350) 29 — — (1,910)
TOTAL - Net 796 438 (313) — — 920

As of Increase Decrease Translation Reclassification As of
(in € thousands) 12/31/2019 adjustments 12/31/2020
Gross
Software 1,948 231 (691) — (48) 1,440
Patents 91 — — — — 91
Other intangibles — (24) (25) — 48 —
TOTAL—Gross 2,039 207 (715) — — 1,531
Accumulated depreciation and impairment
Software (1,592) (309) 688 — — (1,213)
Patents (21) — — — — (21)
Other intangibles — — — — — —
TOTAL - Accumulated depreciation and impairment (1,613) (310) 688 — — (1,234)
TOTAL - Net 426 (102) (27) — — 297

As of Increase Decrease Translation Reclassification As of
(in € thousands) 12/31/2020 adjustments 2021/12/31
Gross
Software 1,440 126 (255) — (17) 1,294
Patents 91 — (21) — — 70
Other intangibles — — (17) — 17 —
TOTAL—Gross 1,531 126 (293) — — 1,364
Accumulated depreciation and impairment
Software (1,213) (152) 176 — — (1,190)
Patents (21) — 21 — — —
Other intangibles — — — — — —
TOTAL - Accumulated depreciation and impairment (1,234) (152) 197 — — (1,190)
TOTAL - Net 297 (26) (96) — — 174

~~F-24~~

~~The implementation for the April 2021 IFRIC decision on IAS 38 had a negative impact of €495 on intangible assets on the opening balance sheet for 2020.~~

8.~~PROPERTY, PLANT AND EQUIPMENT~~

~~The following tables show the variations in tangible assets for the years ended December 31, 2019, 2020 and 2021:~~

Property, plant and equipment - Variations As of As of Increase Decrease Translation Reclassification As of As of
(in € thousands) As of 2018/12/31 adjustments As of 2019/12/31
Gross
Buildings on non-freehold land 1,458 12,218 — — (1,447) 12,229
Scientific equipment 10,879 556 (120) — (54) 11,260
Fittings 1,531 66 — — (5) 1,592
Vehicles 99 — — — — 99
Computer equipment 1,446 227 (15) — 11 1,669
Furniture 361 31 (3) — — 389
In progress — 241 (1,737) — 1,496 —
TOTAL - Gross 15,774 13,339 (1,875) — — 27,238
Accumulated depreciation
Buildings on non-freehold land (1) (1,215) — — — (1,216)
Scientific equipment (5,988) (1,303) 119 — — (7,172)
Fittings (769) (105) — — — (875)
Vehicles (45) (21) — — — (66)
Computer equipment (915) (252) 12 — — (1,155)
Furniture (292) (13) 3 — — (303)
In progress — — — — — —
TOTAL - Accumulated depreciation (8,010) (2,909) 133 — — (10,785)
Accumulated impairment
Buildings on non-freehold land — — — — — —
Scientific equipment — — — — — —
Fittings — — — — — —
Vehicles — — — — — —
Computer equipment — — — — — —
Furniture — — — — — —
In progress — — — — — —
TOTAL - Accumulated impairment — — — — — —
TOTAL - Net 7,765 10,429 (1,741) — — 16,453

~~F-25~~

Property, plant and equipment - Variations As of As of Increase Decrease Translation Reclassification As of As of
(in € thousands) As of 2019/12/31 adjustments As of 2020/12/31
Gross
Buildings on non-freehold land 12,229 — — — (62) 12,167
Scientific equipment 11,260 450 (2,630) — — 9,080
Fittings 1,592 233 (113) — (9) 1,703
Vehicles 99 — — — — 99
Computer equipment 1,669 69 (194) — (11) 1,534
Furniture 389 8 (68) — — 329
In progress — 15 (17) — 2 —
TOTAL - Gross 27,238 775 (3,022) — (80) 24,911
Accumulated depreciation
Buildings on non-freehold land (1,216) (1,398) 10 — — (2,603)
Scientific equipment (7,172) (1,368) 2,588 — — (5,952)
Fittings (875) (218) 107 4 — (982)
Vehicles (66) (20) — — — (85)
Computer equipment (1,155) (260) 193 4 — (1,217)
Furniture (303) (15) 68 (1) — (251)
In progress — — — — — —
TOTAL - Accumulated depreciation (10,785) (3,279) 2,967 7 — (11,090)
Accumulated impairment
Buildings on non-freehold land — (1,182) — — — (1,182)
Scientific equipment — (866) — — — (866)
Fittings — (93) — — — (93)
Vehicles — — — — — —
Computer equipment — (27) — — — (27)
Furniture — (3) — — — (3)
In progress — — — — — —
TOTAL - Accumulated impairment — (2,172) — — — (2,172)
TOTAL - Net 16,453 (4,676) (56) 7 (80) 11,648

~~F-26~~

Property, plant and equipment - Variations As of Increase Decrease Translation Reclassification As of
(in € thousands) 2020/12/31 adjustments 2021/12/31
Gross
Buildings on non-freehold land 12,167 — (1,912) — 56 10,311
Scientific equipment 9,080 71 (2,831) — — 6,320
Fittings 1,703 (4) (234) — 9 1,474
Vehicles 99 60 (67) — — 91
Computer equipment 1,534 30 (18) — (4) 1,542
Furniture 329 — (50) — — 279
In progress — 330 (342) — 12 —
TOTAL - Gross 24,911 487 (5,454) — 74 20,017
Accumulated depreciation
Buildings on non-freehold land (2,603) (1,417) 1,120 — — (2,900)
Scientific equipment (5,952) (1,061) 2,145 — — (4,868)
Fittings (982) (91) 190 (5) — (888)
Vehicles (85) (13) 67 — — (31)
Computer equipment (1,217) (195) 14 (6) — (1,403)
Furniture (251) (12) 50 — — (213)
In progress — — — — — —
TOTAL - Accumulated depreciation (11,090) (2,789) 3,587 (11) — (10,304)
Accumulated impairment
Buildings on non-freehold land (1,182) — 679 — — (503)
Scientific equipment (866) — 779 — — (87)
Fittings (93) — — — — (93)
Vehicles — — — — — —
Computer equipment (27) — 15 — — (12)
Furniture (3) — — — — (3)
In progress — — — — — —
TOTAL - Accumulated impairment (2,172) — 1,473 — — (699)
TOTAL - Net 11,648 (2,302) (394) (11) 74 9,015

Assets related to contracts that were classified as finance leases under IAS 17 are scientific equipment. These contracts are accounted for in the same manner under IFRS 16. Their net carrying value as of December 31, 2019, 2020 and 2021 amounted to €1,413, €873 and €154 respectively.

~~Impairment test of assets under IAS 36~~

This indication of loss of value led the Group to conduct an impairment test over owned and leased equipment, based on the the value at which this equipment may be divested (on the basis of agreements with the lessors on the early purchase of the equipment and near-term purchase offers) in order to determine the recovery value.

~~The tests had resulted in 2020 in the recognition of an impairment of €990 relating to scientific equipment, fittings, computer equipment and furniture, including:~~

•~~€866 for scientific equipment (of which €363 related to owned equipment and €503 of leased equipment),~~

•~~€93 for fittings, and~~

•~~€30 for computer equipment and furniture,~~

~~including associated liabilities.~~

~~In 2021, part of these elements, mainly scientific equipment, were sold. As a result the accumulated impairment for these equipments was reduced to €196 as at December 31, 2021, including:~~

•~~€87 for scientific equipment (of which €25 related to owned equipment and €62 of leased equipment),~~

•~~€93 for fittings, and~~

•~~€15 for computer equipment and furniture,~~

~~including associated liabilities.~~

~~F-27~~

Similarly, parts of the leased premises (a portion of the office space in Paris and of the former laboratories at headquarters) were no longer in use. The vacant space is segmented and separate from the premises that will continue to be occupied. An impairment test of the rights of use of this space has also been performed.

In the financial statements for the period ending December 31, 2020, the recovery value had been estimated to be null considering that subleasing is prohibited for the office space in Paris and that the COVID-19 related health situation creates significant uncertainty on the potential to sublease the space in Loos. Subleasing was therefore not under consideration for the foreseeable future.

~~The test of the rights of use pertaining to these premises in 2020 had resulted in the recognition of an impairment of €1,182.~~

In 2021, the Company signed an agreement for a negotiated early termination of its lease agreement for its Paris premises, allowing for a relocation of the Paris office, thus the corresponding impairment was reduced to €503 as at December 31, 2021.

~~Reminders~~

~~In accordance with IFRS 16, the Group has chosen not to present the right of use separately from other assets and has added them to the fixed assets of the same nature as the underlying leased assets.~~

~~Therefore, the rights of use and related amortization as of December 31, 2021 included in the table affect:~~

•~~The line item “Building on non freehold land”, of €10,056 and €2,831, respectively;~~

•~~The line item "Scientific equipment", at €1,369 and €1,255 respectively.~~

In 2021 GENFIT SA and GENFIT CORP terminated the respective lease agreements for their offices, respectively located in Paris, France and Cambridge, MA, which they both relocated to a coworking space. The rental of these office spaces, as a service contract, no longer falls under IFRS 16. The impact of this change in 2021 is limited as both relocations happened during the second half of the year.

9.~~TRADE AND OTHER RECEIVABLES~~

~~Trade and other receivables consisted of the following:~~

Trade and other receivables - Total As of
(in € thousands) 2019/12/31 2020/12/31 2021/12/31
Trade receivables, net 207 793 57
Research tax credit 9,585 7,911 5,282
Social security costs receivables 5 24 4
VAT receivables 1,814 2,766 1,038
Grants receivables 3 3 5
Other receivables 420 422 852
TOTAL 12,033 11,919 7,239

Trade and other receivables - Current As of
(in € thousands) 2019/12/31 2020/12/31 2021/12/31
Trade receivables, net 207 793 57
Research tax credit 9,585 7,911 5,282
Social security costs receivables 5 24 4
VAT receivables 1,814 2,766 1,038
Grants receivables 3 3 3
Other receivables 420 422 852
TOTAL 12,033 11,919 7,236


~~Trade and other receivables - Non-current~~	~~As of~~
~~(in € thousands)~~	~~2019/12/31~~	~~2020/12/31~~	~~2021/12/31~~
~~Trade receivables, net~~	—	—	—
~~Research tax credit~~	—	—	—
~~Social security costs receivables~~	—	—	—
~~VAT receivables~~	—	—	—
~~Grants receivables~~	—	—	3
~~Other receivables~~	—	—	—
~~TOTAL~~	—	—	3

~~F-28~~

~~Trade receivables, net :~~ ~~See~~ ~~Note 1~~9 ~~"Operating Income”~~

~~Research tax credit~~

~~The research tax credit due for 2019, amounting to €9,585, was received in June 2020.~~

~~The research tax credit due for 2020, amounting to €7,911, was received in October 2021.~~

~~The research tax credit receivable for the year 2021 amounts to €5,282.~~

~~VAT receivables~~

~~The VAT receivable amounted to €1,038 at December 31, 2021.~~

~~The last VAT receivable due for 2021 was received in January 2022.~~

In comparison, the VAT receivable amount of €2,766 recognized at December 31, 2020 was notably due to an audit on the basis of documents, by the French revenue services, of the VAT refund requests started in August 2020, which as a consequence, increased the time for a refund from the French revenue services. This audit was completed in 2021 and the Company received €2,766 in 2021.

~~Other receivables~~

~~The line item “other receivables” primarily consists of credit notes from suppliers for €€752, €406, and €408 respectively as of December 31, 2021, December 31, 2020 and December 31, 2019.~~

~~10.OTHER FINANCIAL ASSETS~~

~~Other financial assets consisted of the following:~~

Financial assets - Total As of
(in € thousands) 2019/12/31 2020/12/31 2021/12/31
Equity investments — — 3,133
Loans 307 352 388
Deposits and guarantees 396 418 397
Liquidity contract 1,023 688 513
TOTAL 1,727 1,458 4,431

~~Financial assets - Current~~

~~As of~~

~~(in € thousands)~~

~~2019/12/31~~

~~2020/12/31~~

~~2021/12/31~~

~~Loans~~

—

~~Deposits and guarantees~~

—

~~Liquidity contract~~

—

~~TOTAL~~

—

Financial assets - Non current As of
(in € thousands) 2019/12/31 2020/12/31 2021/12/31
Equity investments — — 3,133
Loans 307 352 388
Deposits and guarantees 396 418 397
Liquidity contract 1,023 688 513
TOTAL 1,727 1,458 4,431

Financial assets - Variations As of Increase Decrease As of
(in € thousands) 31/12/2020 31/12/2021
Equity investments — 3,133 — 3,133
Loans 352 36 — 388
Deposits and guarantees 418 107 (128) 397
Liquidity contract 688 0 (175) 513
TOTAL 1,458 3,276 (303) 4,431

~~F-29~~

The total amount of financial assets of the Company was €4,431 at December 31, 2021, up from €1,458 at December 31, 2020. This change is mainly due to the €3,000 investment representing a 10% equity stake taken by the Company in Genoscience Pharma in December 2021 through the subscription of new ordinary shares, plus directly related costs.

The liquidity contract consists of a share buyback program contracted to an investment service provider in order to facilitate the listing of the Group's shares (the liquidity cash balance hereunder represents funds held by investment service provider, which are not available for general use to the Company):

•~~As of December 31, 2021, the liquidity account had a cash balance of €513, and CMC-CIC Market Solutions holds on behalf of Genfit 137,012 shares, recorded as a deduction from equity.~~

•~~As of December 31, 2020, the liquidity account had a cash balance of €688, and CMC-CIC Market Solutions holds on behalf of Genfit 88,929 shares, recorded as a deduction from equity.~~

•~~As of December 31, 2019, the liquidity account had a cash balance of €1,023, and CMC-CIC Market Solutions holds on behalf of Genfit 18,132 shares, recorded as a deduction from equity.~~

~~About the recognition of equity investment in Genoscience Pharma subscribed in December 2021:~~

We have not completed the equity purchase in Genoscience Pharma for trading purposes. Therefore, pursuant to IFRS 9, we have elected to classify the equity in Genoscience Pharma we acquired in December 2021 as equity instruments recognized at fair value through other comprehensive income (OCI).

~~Pursuant to IFRS 9.5.1.1, at the time of initial recognition in 2021, this investment in equity instruments has been measured at fair value, augmented of the transaction costs related to the purchase.~~

The amount recognized in the balance sheet at December 31, 2021 corresponds to the subscription price agreed upon between the parties as representative of the value of Genoscience Pharma a few days before closing of the period.

In accordance with IFRS 9.5.7.1b, for future closings, changes in fair value on these equity instruments will be recognized as OCI. This OCI may not be reused as profit or loss, including in the case of a sale.

~~If applicable, only dividends related to the investment in equity instruments will be recognized as profit provided that all conditions are met (IFRS 9.5.7.6 and 5.7.1A).~~

At this stage, and in accordance with the amendment to IFRS 13, as equity in Genoscience Pharma is not publicly traded on active markets, the fair value of this equity is measured on the basis of valuation methods relying entirely or in part on unobservable inputs such as quoted prices in inactive markets or the valuation based on multiples for non-listed securities.

~~11.OTHER ASSETS~~

~~Other assets of €2,101 at December 31, 2021, €1,765 at December 31, 2020, €1,968 at December 31, 2019 and respectively, consisted of prepaid expenses related to current operating expenses.~~

~~12.LOANS AND BORROWINGS~~

~~12.1.Breakdown of convertible loan~~

On October 16, 2017, the Company issued 6,081,081 OCEANEs at par with a nominal unit value of €29.60 per bond for an aggregate nominal amount of €180 million. This debt was renegotiated in January 2021, and share conversions were executed during the period.

~~F-30~~


			~~At origin (10/16/2017) :~~
			~~Number of bonds~~						~~6,081,081~~
			~~Nominal amount of the loan~~						~~179,999,997.60€~~
			~~Nominal unit value of the bonds~~						~~29.60€~~
			~~Conversion / exchange premium~~						~~30%~~
									~~To GENFIT's reference share price :~~
									~~22.77€~~
			~~Annual nominal interest rate~~						~~3.5%~~
									~~Payable semi-annually in arrears~~
			~~Annual nominal interest rate~~						~~7.2%~~
			~~Offering~~						~~10/16/2017~~
									~~At par~~
			~~Redemption~~						~~10/16/2022~~
									~~Redemption prior to maturity at the option of the Company from~~
									~~11/6/2020~~
									~~if the arithmetic volume-weighted average price of~~
									~~GENFIT's listed share price and the then prevailing conversion ratio over a~~
									20
									~~trading period exceeds~~
									~~150%~~
									~~of the nominal value of the OCEANEs.~~
			~~After OCEANEs buyback :~~
			~~Number of bonds~~						~~3,185,821~~
			~~Nominal amount of the loan~~						~~94,300,301.60€~~
			~~Nominal unit value of the bonds~~						~~29.60€~~
			~~Effective interest rate~~						~~8.8%~~
			~~As of 06/30/2021 :~~
			~~Number of bonds~~						~~1,923,662~~
			~~Nominal amount of the loan~~						~~56,940,395.20€~~
			~~Nominal unit value of the bonds~~						~~29.60€~~
			~~Effective interest rate~~						~~8.8%~~

~~OCEANEs Buyback and Amendment of Terms~~

~~On November 23, 2020, GENFIT proposed to all OCEANE bondholders a renegotiation offer involving two interdependent components:~~

•~~A partial buyback of the outstanding OCEANEs for a maximum amount of 3,048,780 OCEANEs at €16.40 per bond; and~~

•~~An amendment of the terms of the remaining OCEANEs allowing to extend their maturity (by 3 years) and increase the conversion ratio (to 5.5 ordinary shares per bond).~~

The completion of these commitments for partial repurchase, made in late 2020, remained entirely subject to approval of the new terms of the OCEANEs, by both the Shareholders’ and Bondholders’ Meetings, which on January 25, 2021, approved this renegotiation offer. Following the shareholders’ and bondholders’ decisions, GENFIT completed the partial buyback of 2,895,260 OCEANEs at a price of €16.40 (including accrued interest of €0.30) for a total buyback cost of €47.48 million. The settlement operations occurred on January 29, 2021. The repurchased OCEANEs were then cancelled by GENFIT.

For the non-cancelled, renegotiated OCEANEs (“OCEANEs 2022”) (i.e. 3,185,821 remaining OCEANEs), the maturity is extended to October 16, 2025 and the conversion ratio changed from 1 OCEANE for 1 share to 1 OCEANE for 5.5 shares. The nominal amount and the payout value of the remaining OCEANEs remains unchanged at €29.60 per bond.

~~This renegotiation operation of the OCEANE has been recognized in the consolidated accounts for the half-year ended June 30, 2021, as:~~

•~~the derecognition of the full initial OCEANE as of January 25, 2021 against a payment of €47.48 million, and~~

~~F-31~~

•~~the issuance of 3,185,821 new amended OCEANEs.~~

As the conversion option for the new OCEANEs (2025 maturity) fits the definition of an equity instrument under IAS 32 (Financial Instruments: Presentation), the components of this new OCEANE (debt vs. equity) has been recognized separately on January 25, 2021, in accordance with the accounting rules and methods presented in this note.

~~The obligation and option components have been valued separately. The option component has been valued using a traditional binomial model.~~

~~The hypotheses considered to calculate the fair value of these new OCEANEs are the following:~~

•~~credit spread in the 874/976 bps interval~~

•~~volatility: first level: 30% second level: 35%~~

•~~no-risk rate: 5-year Euros swap equals -0.45%~~

On this basis, at January 25, 2021, the fair value of a new amended OCEANEs has been estimated at €27.80, of which a debt component of €24.12 and a €3.68 component that has been recognized in equity.

~~Accounting impacts of the debt renegotiation~~

~~On January 25, 2021 an amount of €94.8 million was derecognized and an amount of €76.8 million was recognized for the amended obligations, in exchange of:~~

•~~An increase in equity of €11.7 million before deferred taxes (corresponding to the recognition of the value of the conversion option of the amended OCEANE);~~

•~~The payment of €47.5 million for the OCEANEs partial buyback; and~~

•~~The recognition of a financial gain (buyback bonus) of €35.6 million before tax.~~

~~Accounting impacts of the conversions completed following the debt renegotiation~~

~~Following the implementation of the partial buyback operation and the approval of the amendment of the terms of the OCEANEs:~~

•552,238 of the new OCEANEs were subject to a request for share conversion in January 2021. On February 4, 2021, as a result of these conversion requests, a capital increase of €759,327.25 has been recognized, corresponding to the creation of 3,037,309 new shares. This conversion of 552,238 new OCEANEs resulted in a reduction in financial debt for the Group of €13.32 million.

•483,330 of the new OCEANEs were subject to a request for share conversion in February 2021. On March 2, 2021, as a result of these conversion requests, a capital increase of €664,578.75 has been recognized, corresponding to the creation of 2,658,312 new shares. This conversion of 483,330 new OCEANEs resulted in a reduction in financial debt for the Group of €11.66 million.

•216,591 of the new OCEANEs were subject to a request for share conversion in March 2021. On April 6, 2021, as a result of these conversion requests, a capital increase of €297,812.50 has been recognized, corresponding to the creation of 1,191,250 new shares. This conversion of 216,591 new OCEANEs resulted in a reduction in financial debt for the Group of €5.2 million.

•10,000 of the new OCEANEs were subject to a request for share conversion in August 2021. On September 1, 2021, as a result of these conversion requests, a capital increase of €13,750 has been recognized, corresponding to the creation of 55,000 new shares. This conversion of 10,000 new OCEANEs resulted in a reduction in financial debt for the Group of €0.2 million.

~~The potential issuance of new shares upon conversion requests of the outstanding OCEANEs would represent 21.24% of the share capital of the Company at December 31, 2021.~~

All fees and commission paid in relation to this operation have been directly recognized as operating expenses. The fees disbursed have been recognized in the financial statements for a total of €745 in 2020 and €2,303 in 2021.

Deferred tax assets and deferred tax liabilities recognized in the balance sheet at December 31, 2020 related to the 2022 OCEANEs for respectively €1.3 million and €2.0 million have been recognized in the profit and loss account in 2021.

~~F-32~~

A deferred tax liability related to the new OCEANEs has been recognized on January 25, 2021 with an impact on share capital for an amount of €4.4 million. A deferred tax asset was recognized on January 25, 2021 with an impact on the profit and loss statement under the allocation of tax loss carry forwards on the deferred tax liability reversal for €2.8 million.

~~For more detail on the deferred tax assets and liabilities, see~~ ~~Note 2~~3 ~~"Income Tax"~~.

Convertible loans - Total As of
(in € thousands) 2019/12/31 2020/12/31 2021/12/31
Convertible loans 165,454 170,782 48,097
TOTAL 165,454 170,782 48,097

Convertible loans - Current As of
(in € thousands) 2019/12/31 2020/12/31 2021/12/31
Convertible loans 1,312 1,312 415
TOTAL 1,312 1,312 415

Convertible loans - Non current As of
(in € thousands) 2019/12/31 2020/12/31 2021/12/31
Convertible loans 164,142 169,470 47,682
TOTAL 164,142 169,470 47,682

~~12.2.Breakdown of other loans and borrowings~~

~~Other loans and borrowings consisted of the following:~~

Other loans and borrowings - Total As of
(in € thousands) 2019/12/31 2020/12/31 2021/12/31
Refundable and conditional advances 3,229 3,229 3,229
Bank loans 2,645 1,540 15,824
Obligations under leases 12,281 10,131 7,069
Accrued interests 1 1 16
Other financial loans and borrowings 7 7 —
TOTAL 18,165 14,908 26,138

Other loans and borrowings - Current As of
(in € thousands) 2019/12/31 2020/12/31 2021/12/31
Refundable and conditional advances — — —
Bank loans 1,105 942 667
Obligations under leases 2,112 2,085 1,089
Accrued interests 1 1 16
Other financial loans and borrowings 7 7 —
TOTAL 3,226 3,035 1,773

Other loans and borrowings - Non current As of
(in € thousands) 2019/12/31 2020/12/31 2021/12/31
Refundable and conditional advances 3,229 3,229 3,229
Bank loans 1,540 598 15,156
Obligations under leases 10,169 8,046 5,980
Accrued interests — — —
Other financial loans and borrowings — — —
TOTAL 14,939 11,873 24,365

~~12.2.1.Refundable and conditional advances~~

~~The following table summarizes advances outstanding at December 31, 2021, 2020 and 2019.~~

~~F-33~~

Refundable and conditional advances—general overview Grant date Total amount allocated Receipts Repayments Effects of discounting Net book value As of 2021/12/31
(in € thousands)
BPI FRANCE - IT-DIAB 12/23/2008 3,229 3,229 — — 3,229
Development of a global strategy for the prevention and management of type 2 diabetes
TOTAL 3,229 3,229 — — 3,229

Refundable and conditional advances—general overview Grant date Total amount allocated Receipts Repayments Effects of discounting Net book value As of 2020/12/31
(in € thousands)
BPI FRANCE - IT-DIAB 12/23/2008 3,229 3,229 — — 3,229
Development of a global strategy for the prevention and management of type 2 diabetes
TOTAL 3,229 3,229 — — 3,229

Refundable and conditional advances—general overview Grant date Total amount allocated Receipts Repayments Effects of discounting Net book value As of 2019/12/31
(in € thousands) Net book value As of
BPI FRANCE - IT-DIAB 12/23/2008 3,229 3,229 — — 3,229
Development of a global strategy for the prevention and management of type 2 diabetes
TOTAL 3,229 3,229 — — 3,229


~~BPI FRANCE IT-DIAB~~			On December 23, 2008, the Group received an advance from BPI France (the BPI France IT-DIAB) as part of a framework innovation aid agreement involving several scientific partners and for which the Group was the lead partner. The contribution expected at each stage by each of the partners in respect of work carried out and results achieved is defined in the framework agreement. With respect to the Group, the aid consisted of a €3,229 conditional advance and a €3,947 non-repayable government grant.

			The conditional advance is not refundable except in the event of success. The program ended on December 31, 2014. In the event of success, defined as the commercial spin-offs of the IT-Diab program which involves products for the treatment or diagnosis of type 2 diabetes, in that case, the financial returns generated will be used initially to repay the €3,229 conditional advance and the agreement stipulates that the conditional advance will be regarded as repaid in full when the total payments made in this regards by the recipient, discounted at the rate of 5.19%, equal the total amount, discounted at the same rate, of the aid paid. Any further amounts will be classified as additional payments, up to a maximum amount of €14,800.

As provided in the project assistance contract, we sent a letter to BPI in December 2019 in order to notify it of our Labcorp and Terns contracts while indicating that elafibranor was now aimed at treating hepatic diseases and no longer type 2 diabetes as provided for in the aid agreement. We proposed to BPI to establish a statement of abandonment of the IT DIAB project on which the above advance is based. Following this letter, the parties met in March 2020 for the presentation of our arguments, and in June 2020 following the publication of the results of the RESOLVE-IT study, and a new letter was sent in November 2020. In this context, we are awaiting a proposal from BPI on new financial terms related to this situation and a draft amendment to the repayable advance agreement. Until we receive a response from BPI France, we consider that the fair value of this liability corresponds to the amount paid by BPI FRANCE.

~~12.2.2.Bank loans~~

~~In the context of the COVID-19 pandemic, the Company secured:~~

•~~A State-Guaranteed Loan (or~~ ~~"Prêt Garanti par l'Etat (PGE) Bancaire"~~) for an amount of €11,000 (€10,919 net of fees), granted on June 24, 2021 by a syndicate of 4 French banks and paid out on June 29, 2021, 90% guaranteed by the French government with an initial term of one year with repayment options up to six years;

•~~A State-Guaranteed Loan (or~~ ~~"Prêt Garanti par l'Etat (PGE) Bpifrance"~~) for an amount of €2,000 (€1,985 net of fees) granted on July 20, 2021 by Bpifrance and paid out on July 23, 2021, 90% guaranteed by the French government with an initial term of one year with repayment options up to six years;

~~F-34~~

•~~A Subsidized Loan for an amount of €2,250 (€2,250 net of fees) granted on November 23, 2021 by Bpifrance and paid out on November 26, 2021, with an initial term of six years.~~

~~The Company already intends to use the options to delay the repayment of both state-guaranteed loans above. Besides, the~~ ~~Prêt Garanti par l'Etat Bancaire~~ ~~above provides for a mandatory early repayment in full of the loans in case of a cash repayment of the existing bond debt (share conversions are not included in this provision).~~

~~The repayment hypothesis used in these consolidated financial statements includes:~~

•~~8 linear quarterly payments between September 29, 2023 and June 29, 2025 for the~~ ~~PGE Bancaire, and~~

•~~16 linear quarterly payments between October 23, 2022 and July 23, 2026 for the~~ ~~PGE Bpifrance~~.

~~The subsidized loan provides for a 4-quarter deferment of capital amortization, followed by 20 equal quarterly payments (amortization and interest) between February 28, 2023 and November 30, 2027.~~

~~Regarding the~~ ~~PGE Bancaire~~, the first-year interest rate is null (—%) and that of the following years will be communicated by the banks at the time an extension is requested. Moreover, the guarantee provided by the French State is compensated through a commission named "guarantee premium" (which increases progressively from 0.25% in the first year to 1% in the third year and beyond).

~~Regarding the~~ ~~PGE Bpifrance~~, the first-year interest rate is 1.85% (including 0.28% for the state guarantee) and that of the following years will be communicated by Bpifrance at the time an extension is requested. Moreover, this loans includes a one-year deferment on interest.

~~Regarding the subsidized loan, it bears a fixed interest rate at 2.25%.~~

~~Based on the above:~~

•~~The effective interest rate determined for the~~ ~~PGE Bancaire~~ ~~is 0.75% per year;~~

•~~The effective interest rate determined for the~~ ~~PGE Bpifrance~~ ~~is 1.95% per year;~~

•~~The effective interest rate determined for the Subsidized Loan is 2.27%.~~

The company has determined after analysis under IFRS that the subsidized loan should be treated in the same manner as the PGEs and that the review pursuant to IAS20 should not apply, in light of the facts, notably, that this subsidized loan:

•Constitutes Government Assistance under the "Umbrella" Scheme Notified by the French Government to the European Commission under the following references: State Aid SA.56985 (2020/N) - France - COVID-19: Temporary Framework to support companies;

•~~Has therefore not been granted to the Company in connection with research expenses on a particular project or investment;~~

•~~Supports the Company's cash position, similarly to the aforementioned PGEs, negotiated with and granted by Bpifrance in addition to these PGEs.~~

~~Thus, these loans are recognized using the effective interest rate method (with the aforementioned rates) and their respective IFRS values at December 31, 2021 are:~~

•~~€10,958 (of which zero at less than a year) for the~~ ~~PGE Bancaire~~;

•~~€2,002 (of which €125 at less than a year) for the~~ ~~PGE Bpifrance; and~~

•~~€2,250 (of which zero at less than a year) for the Subsidized Loan.~~

~~Bank loans consisted of the following as of December 31, 2019:~~

~~F-35~~

Bank loans Loan Facility Interest Available As of 2019/12/31 Installments Outstanding As of 2019/12/31
(in € thousands) date size rate
CDN 3 April 2016 500 0.72 % — 60 monthly 135
CDN 4 June 2017 600 0.36 % — 48 monthly 226
CDN 5 November 2018 500 0.46 % — 48 monthly 365
CIC 4 December 2016 265 0.69 % — 60 monthly 111
CIC 5 July 2017 1,000 0.69 % — 60 monthly 554
BNP 2 June 2016 500 0.80 % — 20 quarterly 177
BNP 3 October 2016 1,050 0.80 % — 20 quarterly 525
BNP 4 April 2017 800 0.87 % — 60 monthly 537
AUTRES - — — % — 0 14
CDN PGE June 2021 — (*) — 8 quaterly —
CIC PGE June 2021 — (*) — 8 quaterly —
BNP PGE June 2021 — (*) — 8 quaterly —
NATIXIS PGE June 2021 — (*) — 8 quaterly —
BPI PGE July 2021 — 1.85 % — 16 quaterly —
BPI PRÊT TAUX BONIFIE November 2021 — 2.25 % — 20 quaterly —
TOTAL 5,215 0 — 0 2,645

~~Bank loans consisted of the following as of December 31,2020:~~

Bank loans Loan Facility Interest Outstanding As of 2020/12/31 Installments Outstanding As of 2020/12/31
(in € thousands) date size rate
CDN 3 April 2016 500 0.72 % — 60 monthly 34
CDN 4 June 2017 600 0.36 % — 48 monthly 75
CDN 5 November 2018 500 0.46 % — 48 monthly 241
CIC 4 December 2016 265 0.69 % — 60 monthly 58
CIC 5 July 2017 1,000 0.69 % — 60 monthly 354
BNP 2 June 2016 500 0.80 % — 20 quarterly 76
BNP 3 October 2016 1,050 0.80 % — 20 quarterly 315
BNP 4 April 2017 800 0.87 % — 60 monthly 377
AUTRES - — 0.00 % — 0 9
CDN PGE June 2021 — (*) — 8 quaterly —
CIC PGE June 2021 — (*) — 8 quaterly —
BNP PGE June 2021 — (*) — 8 quaterly —
NATIXIS PGE June 2021 — (*) — 8 quaterly —
BPI PGE July 2021 — 1.85 % — 16 quaterly —
BPI PRÊT TAUX BONIFIE November 2021 — 2.25 % — 20 quaterly —
TOTAL 5,215 0 — 0 1,540

~~F-36~~

~~Bank loans consisted of the following as of December 31, 2021:~~

Bank loans Loan Facility Interest Available Installments Outstanding
date size rate as of as of
(in € thousands) 2021/12/31 2021/12/31
CDN 3 April 2016 500 0.72 % — 60 monthly —
CDN 4 June 2017 600 0.36 % — 48 monthly —
CDN 5 November 2018 500 0.46 % — 48 monthly 115
CIC 4 December 2016 265 0.69 % — 60 monthly 4
CIC 5 July 2017 1,000 0.69 % — 60 monthly 152
BNP 2 June 2016 500 0.80 % — 20 quarterly —
BNP 3 October 2016 1,050 0.80 % — 20 quarterly 105
BNP 4 April 2017 800 0.87 % — 60 monthly 217
AUTRES - — 0.00 % — 0 20
CDN PGE June 2021 900 (*) — 8 quaterly 900
CIC PGE June 2021 2,200 (*) — 8 quaterly 2,200
BNP PGE June 2021 4,900 (*) — 8 quaterly 4,900
NATIXIS PGE June 2021 3,000 (*) — 8 quaterly 3,000
BPI PGE July 2021 2,000 1.85 % — 16 quaterly 2,000
BPI PRÊT TAUX BONIFIE November 2021 2,250 2.25 % — 20 quaterly 2,250
TOTAL 20,465 0 — 0 15,864

~~(*) Will be defined at the end of the prorogation date.~~

~~12.4 Maturities of financial liabilities~~

Maturity of financial liabilities As of Less than Less than Less than Less than Less than More than
(in € thousands) 2021-12-31 1 year 2 years 3 years 4 years 5 years 5 years
BPI FRANCE - IT-DIAB 3,229 — — — — — 3,229
TOTAL - Refundable and conditional advances 3,229 — — — — — 3,229
Convertible loans 48,097 415 — — 47,682 — —
Bank loans 15,824 667 3,728 6,424 3,694 840 470
Leases 7,069 1,089 939 925 932 942 2,242
Accrued interests 16 16 — — — — —
TOTAL - Other loans and borrowings 71,006 2,188 4,667 7,349 52,308 1,782 2,712
TOTAL 74,235 2,188 4,667 7,349 52,308 1,782 5,941

Based on the nominal amount of €56,940 at December 31, 2021, the convertible bond results in the payment of yearly interest of €1,993 (payable in 2 biannual installments). Its repayment is due on October 16, 2025.

~~Regarding the IT-DIAB advance, please see~~ ~~Note 12.2.1 “Refundable and conditional advances”~~.

~~13. FAIR VALUE OF FINANCIAL INSTRUMENTS~~

~~The following tables provide the financial assets and liabilities carrying values by category and fair values as of December 31, 2021, December 31, 2020 and December 31, 2019:~~

~~F-37~~

As of 31/12/2019
Carrying value Fair value
As per Assets at Loans & Debt at Level 1 Level 2 Level 3
statement of fair value receivables amortized
financial through cost
(in € thousands) position profit & loss
Assets
Loans 307 307 307
Deposits and guarantees 396 396 396
Trade receivables 207 207 207
Cash and cash equivalents 276,748 276,748 276,748
TOTAL - Assets 277,658 276,748 911 — 276,748 911 —
Liabilities
Conditional advances 3,229 3,229 3,229
Convertible loans 165,454 165,454 165,454
Bank loans 2,645 2,645 2,645
Obligations under finance leases 12,281 12,281 12,281
Accrued interests 1 1 1
Other financial loans and borrowings 7 7 7
Trade payables 32,753 32,753 32,753
Other payables 527 527 527
TOTAL - Liabilities 216,898 — — 216,898 — 213,669 3,229

As of 31/12/2020
Carrying value Fair value
As per Assets at Loans & Debt at Level 1 Level 2 Level 3
statement of fair value receivables amortized
financial through cost
(in € thousands) position profit & loss
Assets
Loans 352 352 352
Deposits and guarantees 418 418 418
Trade receivables 793 793 793
Cash and cash equivalents 171,029 171,029 171,029
TOTAL - Assets 172,592 171,029 1,563 0 171,029 1,563 0
Liabilities
Conditional advances 3,229 3,229 3,229
Convertible loans 170,782 170,782 170,782
Bank loans 1,540 1,540 1,540
Obligations under finance leases 10,131 10,131 10,131
Other financial loans and borrowings 7 7 7
Trade payables 20,337 20,337 20,337
Other payables 569 569 569
TOTAL - Liabilities 206,596 0 0 206,596 0 203,367 3,229

~~F-38~~

As of 31/12/2021
Carrying value Fair value
As per Assets at Loans & Debt at Level 1 Level 2 Level 3
statement of fair value receivables amortized
financial through cost
(in € thousands) position profit & loss
Assets
Equity investments 3,133 3,133 3,133
Loans 388 388 388
Deposits and guarantees 397 397 397
Trade receivables 57 57 57
Cash and cash equivalents 258,756 258,756 258,756
TOTAL - Assets 262,731 261,889 842 — 258,756 842 3,133
Liabilities
Conditional advances 3,229 3,229 3,229
Convertible loans 48,097 48,097 48,097
Bank loans 15,824 15,824 15,824
Obligations under finance leases 7,069 7,069 7,069
Accrued interests 16 16 16
Trade payables 12,304 12,304 12,304
Other payables 579 579 579
TOTAL - Liabilities 87,118 — — 87,118 — 83,889 3,229

About the equity investment in the table above: As the equity investment was made on December 16, 2021, we believe that fair market value as of December 31, 2021 is consistent with the cost of the investment.

~~14.TRADE AND OTHER PAYABLES~~

~~Trade and other payables consisted of the following:~~

Trade and other payables - Total As of
(in € thousands) 2019/12/31 2020/12/31 2021/12/31
Trade payables (*) 32,753 20,337 12,304
Social security costs payables 3,598 4,477 4,087
VAT payables 2 314 23,725
Taxes payables 487 319 744
Other payables 527 569 579
TOTAL 37,368 26,015 41,438

Trade and other payables - Current As of
(in € thousands) 2019/12/31 2020/12/31 2021/12/31
Trade payables 32,753 20,337 12,304
Social security costs payables 3,598 4,477 4,087
VAT payables 2 314 23,725
Taxes payables 487 319 744
Other payables 76 118 128
TOTAL 36,917 25,564 40,988

Trade and other payables - Non current As of
(in € thousands) 2019/12/31 2020/12/31 2021/12/31
Trade payables — — —
Social security costs payables — — —
VAT payables — — —
Taxes payables — — —
Other payables 450 450 450
TOTAL 450 450 450
(*) Of which : Accrued expenses 18,682 13,809 6,201

~~F-39~~

~~At December 31, 2021, trade payables amounted to €12,304 (€20,337 at December 31, 2020). This change is due to the reduction in operating expenses.~~

Trade payables include a significant portion of accrued expenses (€6,201 and €13,809 at December 31, 2021 and 2020 respectively), relating to yet unbilled amounts from the clinical trial sites via the Clinical Research Organizations (CROs) in charge of the Company's clinical trials.

~~The timeframe in which those invoices will be received by the Company is unknown and may be spread out over a long period after the services have been performed.~~

While at December 31, 2020, accrued expenses related to RESOLVE-IT, amounted to $9.6 million (€7.8 million) and €2.3 million, i.e. a total of €10.1 million, at December 31, 2021, they amounted to $0.9 million (€0.8 million) and €0.4 million, i.e. a total of €1.2 million). This reduction reflects the increase in RESOLVE-IT clinical trial sites closures following the decision taken mid-2020 to discontinue this study.

~~The VAT debt amounted to €23,725 at December 31, 2021 (€314 at December 31, 2020). This increase is related to the VAT amount collected on the upfront payment received from Ipsen in December 2021.~~

~~15.DEFERRED INCOME AND REVENUE~~

Out of the €120 million upfront payment received from Ipsen in application of the licensing agreement signed in December 2021, an amount of €40 million was recognized as Deferred income in 2021 (see: ~~Note 1~~9 ~~"Operating Income"), of which €14,179 was recognized as Current deferred income, and €25,821 was recognized as Non-current deferred income.~~

~~16.PROVISIONS~~

~~At December 31, 2021, 2020 and 2019, this line item amounted to €313, €1,031, and €2,061, respectively.~~

~~This change mainly reflects provision reversals recorded in 2021 related to:~~

•Some administrative costs and costs related to the destruction of drug tablets following the decision taken mid-2020 to discontinue the RESOLVE-IT study : reversal of €366 (of which €265 was used), with the corresponding provision amounting to €12 at December 31, 2021;

•The estimated support costs related to the reduction in force plan (PSE) implemented starting in late 2020 (return-to-work bonuses, trainings, business start-up assistance and various other benefits) : reversal of €352 (of which €189 was used), with the corresponding provision amounting to €171 at December 31, 2021.

~~17.EMPLOYEE BENEFITS~~Detailed breakdown

In France, pension funds are generally financed by employer and employee contributions and are accounted for as a defined contribution plan with the employer contributions recognized as expense as incurred. The Group has no actuarial liabilities in connection with these plans. Related expenses recorded for the years ended December 31, ~~2021, 2020~~2023 and ~~2019~~December 31, 2022 amounted to ~~€774, €923 and €927~~€948, €876, respectively.

French law also requires payment of a lump sum retirement indemnity to employees based on years of service and annual compensation at retirement, which are accounted for as a defined benefit plan. Benefits do not vest prior to retirement. The liability is calculated as the present value of estimated future benefits to be paid, applying the projected unit credit method whereby each period of service is seen as giving rise to an additional unit of benefit entitlement, each unit being measured separately to build up the final liability. At December 31, ~~2021, 2020~~2023 and ~~2019~~December 31, 2022 pension provisions recorded were ~~€864 , €922~~€978 and ~~€1,408 ,~~€782, respectively.

As part of the measurement of the retirement indemnity to employees, the following assumptions were used for all categories of employees in ~~2019, 2020~~2022 and ~~2021:~~2023:


			Population			Permanent staff
			Retirement age			65
			Terms of retirement			Initiated by the employee
			Life expectancy			On the basis of the INSEE table (1)
			Probability of continued presence in the company at retirement age			On the basis of the DARES table

~~F-40~~

(1)INSEE is the French National Institute of Statistics; DARES is the French Bureau of Studies and Statistics

Rate As of
(in € thousands) 2019/12/31 2020/12/31 2021/12/31
Salary growth rate - in 2022 5.80 % 3.00 % 3.00 %
Salary growth rate - beyond 3.00 % 3.00 % 3.00 %
Discount rate (iboxx) 0.75 % 0.50 % 0.87 %


Rate	As of
(in € thousands)	2022/12/31		2023/12/31
Salary growth rate - in 2023	3.00	%	3.00	%
Salary growth rate - beyond	3.00	%	3.00	%
Discount rate (iboxx)	3.25	%	3.59	%

The discount rates are based on the market yield at December 31, ~~2019, 2020~~2022 and ~~2021~~2023 on high-quality corporate bonds.

The following table presents the changes in the present value of the defined benefit obligation:


			Changes in the present value of the defined benefit obligation						~~As of~~
			(in € thousands)						~~2021/12/31~~







			Defined benefit obligation as of January 01, ~~2019~~2022						1864
			Current service cost						—169
			Interest cost on benefit obligation						—8
			Actuarial losses / (gains) on obligation						—
			Past service costs						— (258)
			Service paid to employees						—
			Defined benefit obligation as of December 31, ~~2019~~2022						1782
			~~Defined benefit obligation as of January 01, 2020 - as adjusted~~						~~1,181~~
			Current service cost						~~181~~137
			Interest cost on benefit obligation						1125
			Actuarial losses / (gains) on obligation						~~(255)~~—
			Past service costs						~~(196)~~51
			Service paid to employees						— (18)
			Defined benefit obligation as of December 31, ~~2020~~2023						~~922~~978
			~~Current service cost~~						~~154~~
			~~Interest cost on benefit obligation~~						5
			~~Actuarial losses / (gains) on obligation~~						—
			~~Past service costs~~						~~(216)~~
			~~Service paid to employees~~						—
			~~Defined benefit obligation as of December 31, 2021~~						~~864~~

The amounts in the table above reflect the impact of the April 2021 IFRIC decision on IAS 19 related to Attributing Benefits to Periods of Service. This decision resulted in a reversal for €226 of the provision at January 1, 2020 mainly due to the retirement indemnities in France, which, before this decision, were spread out as of the arrival of the employee in the Company and now only start from the date from which each service year grants benefit entitlements.

The reduction of €255 related to the cost of past services/change in settlement terms recognized between January 1, 2020 and December 31, 2020 in connection with the settlement of the rights of those employees who left the Group, notably within the scope of the PSE.

Sensitivity of the Group’s retirement and post-employment benefits to a variation of the discount ~~rate :~~rate:

Retirement and post-employment benefits
Sensitivity of the Group's retirement and post-employment benefits Changes in Impact /
to a variation of the discount rate assumptions / present value of
(in € thousands) discount rate the undertaking
+ 0.25 % (30)
- 0.25 % 31

Retirement and post-employment benefits

Sensitivity of the Group's retirement and post-employment benefits

Changes in

Impact /

to a variation of the discount rate

assumptions /

present value of

(in € thousands)

discount rate

the undertaking

0.25

(28)

0.25

The following assumed (undiscounted) benefit payments under the Company's French retirement indemnity are expected to be paid as follows:

F-48


2024			0
2025			36
2026			0
2027			68
2028			62
Years 2029 and thereafter			3,035

~~18.~~26.EQUITY

Accounting policies

Share capital comprises ordinary shares and ordinary shares with double voting rights classified in equity. Costs directly attributable to the issue of ordinary shares or share options are recognized as a reduction in the share premium.

The Group has a liquidity agreement, contracted to an investment service provider. Purchases and sales of the Company's shares carried out under the contract are recognized directly in shareholders’ equity under treasury shares. See Note 18 - “Other financial assets”.

Detailed breakdown

Share capital


Number of shares	As of
	2022/12/31	2023/12/31
Ordinary shares issued (€0.25 par value per share)	49,834,983	49,834,983
Convertible preferred shares registered	0	0
Total shares issued	49,834,983	49,834,983
Less treasury shares	0	0
Outstanding shares	49,834,983	49,834,983

Ordinary shares are classified under shareholders' equity. Any shareholder, regardless of nationality, whose shares are fully paid-in and registered for at least two years, is entitled to double voting rights under the conditions prescribed by law (Article 32 of the Company's bylaws).

~~F-41~~

~~At December 31, 2021, 2,347,639 shares have been held for more than two years and entitle their holders to double voting rights (4.71% of the issued share capital).~~

Changes in share capital in ~~2021~~2023

~~On February 4, 2021, as a result of share conversion requests in January 2021, a capital increase of €759,327.25 has been recognized, corresponding to the creation of 3,037,309 new shares.~~

~~On March 2, 2021, as a result of share conversion requests in February 2021, a capital increase of €664,578.75 has been recognized, corresponding to the creation of 2,658,312 new shares.~~

~~On April 6, 2021, as a result of share conversion requests in March 2021, a capital increase of €297,812.50 has been recognized, corresponding to the creation of 1,191,250 new shares.~~

~~On September 1, 2021, as a result of share conversion requests in August 2021, a capital increase of €13,750 has been recognized, corresponding to the creation of 55,000 new shares.~~

The Chief Executive Officer, acting on a decision and delegation from the Board of Directors on December 16, 2021, recognized on December 22, 2021 the execution of a capital increase for the benefit of Ipsen Pharma SAS. 3,985,239 new shares were created (and €28 million was collected from Ipsen Pharma SAS) on this occasion. The share capital was increased accordingly.None.

At December 31, ~~2021, the total number of shares comprising the share capital, taking into account the above, was 49,815,489 shares.~~

At December 31, 2021, the share capital amounts to €12,453,872.25 represented by 49,815,489 fully authorized, subscribed and paid-up shares with a nominal value of €0.25 per share. This number does not include instruments granting access to share capital which have been issued by the Company and granted to certain directors, employees and consultants of the Group including stock options, free shares (AGA) that have not fully vested and share warrants (BSA) or the shares underlying our OCEANE convertible bonds.

~~At December 31, 2021,~~2023, the remaining unused authorizations to issue additional share-based compensation or other share-based instruments (stock options, free shares and share warrants) represent a total of ~~323,125~~525,000 shares.

~~Changes in share capital in 2020~~

On January 26, 2021, the Chief Executive Officer, acting on a decision and delegation from the Board of Directors on November 27, 2019, determined that some of the performance and attendance conditions of the AGA D 2017-2 and AGA D 2018 and all of the AGA S 2017-2 and AGA S 2018 free shares had been satisfied as of December 31, 2020. 29,762 free shares were thus definitively vested and the same number of new shares were created. The share capital was increased accordingly.

~~At December 31, 2020, the total number of shares comprising the share capital, taking into account the above, was 38,888,379 shares.~~

~~Changes in share capital in 2019~~

The Chairman and CEO, acting on a decision and delegation from the Board of Directors on March 13, 2019, decided on March 26, 2019, in accordance with the 17th and 18th resolutions of the Shareholders Meeting of June 15, 2018, to proceed with a capital increase by offering ordinary shares in the form of American Depositary Shares in the United States and a private placement of ordinary shares in Europe and other countries outside the United States. This transaction led to the issuance of 7,647,500 new shares representing a subscription of a gross amount of €137.6 million. Settlement-delivery took place on March 29, 2019 and the share capital has been increased accordingly. See ~~note 2~~.1 ~~“Initial Public Offering on the Nasdaq Global Select Market”~~.

In addition, the Chief Executive Officer, acting on a decision and delegation from the Board of Directors on November 27, 2019, determined on December 16, 2019, with retroactive effect to December 15, 2019, that some of the performance and attendance conditions of the AGA D 2016-1 and AGA D 2016-2 and all of the AGA S 2016-2 free shares had been satisfied as of December 15, 2019. 7,796 free shares were thus definitively vested and the same number of new shares were created. The share capital was increased accordingly.

Finally, the Chief Executive Officer, acting on a decision and delegation from the Board of Directors on November 21, 2017, determined on January 2, 2020, with retroactive effect to December 31, 2019, that some of the performance and attendance conditions of the AGA D 2017-1 and all of the AGA S 2017-1 free shares has been satisfied. As a result, 19,400 free shares definitively vested and the same number of new shares were created and the share capital was increased accordingly.

~~At December 31, 2019, the total number of shares comprising the share capital, taking into account the above, was 38,858,617 shares.~~

~~F-42~~

~~Retained earnings (accumulated deficit)~~

~~In the present consolidated financial statements, the amount of "Retained earnings (accumulated deficit)" for 2020 reflect the April 2021 IFRIC decision on IAS 19 and IAS 38 (see~~ ~~Note 7 "Intangible Assets"~~ ~~and~~ ~~Note 1~~7 ~~"Employee Benefits"), resulting in an increase of €268 in the opening balance sheet for 2020.~~

~~19.OPERATING INCOME~~

~~In 2021, the total operating income amounted to €85,579 (€7,758 in 2020, and €40,961 in 2019).~~

The revenue amounted to €80,069 in 2021 (€765 in 2020, and €30,839 in 2019). It includes mainly the recognition of an upfront payment received from Ipsen in application of the licensing agreement signed in December 2021 for an amount of €80 million in 2021. The remainder of this upfront payment (€40 million) has been recognized in 2021 as deferred revenue and will be recognized as revenue throughout the execution of the double-blind period of the ELATIVE study, in accordance with IFRS 15. Other revenue recognized in 2021 relates to the license agreement with Labcorp for the deployment of NIS4 diagnostic technology in NASH.

In comparison, the revenue in 2020 mainly originated from the income generated by the license agreements with Labcorp and one-off revenue resulting from the sale of goods and services notably within the scope of the license and collaboration agreement with Terns Pharmaceuticals. The revenue in 2019 related to the the license transferred to Terns under the Terns licensing agreement.

~~Application of IFRS15 to the IPSEN License Agreement signed in 2021~~

~~Pursuant to IFRS 15, 27 ,28 and 29, we have identified that the agreement provides for 4 distinct performance obligations:~~

•~~The license for elafibranor,~~

•~~The completion of the ELATIVE Phase 3 trial until the end of the double-blind period,~~

•~~The knowledge transfer related to elafibranor, as well as support for Ipsen in future undertakings and processes, and~~

•~~The provision of drug tablets that may be needed by Ipsen to conduct their clinical trials.~~

The compensation under this agreement consists of an upfront payment, milestone payments, and royalties on future sales of elafibranor by Ipsen. Besides, it must be noted that, with respect to (i) support services other than the knowledge transfer and (ii) the provision of drug tablets, the agreement provides for separate prices covering all costs born by the Company to provide those goods and services, therefore constituting in each case an individual and distinct sale price for the relevant goods or service, which is not included in the aforementioned price elements.

We estimate the individual sale price of the clinical trial phase to be €40 million, including forecasted external costs, personnel expenses for the relevant staff, indirect costs pertaining to the work environment of such staff, augmented of a customary margin rate for CRO (Clinical Research Organization) contracting. This calculation of the individual sale price for the clinical trial phase reflects observable price conditions as recommended under IFRS 15.79.c. We used the same method to calculate the individual sale price of the knowledge transfer.

Regarding the calculation of the individual sale price of the license, we have analyzed recommended methods under IFRS 15.79 and determined that method (c) is the most relevant, considering in particular that the amount of this individual sale price is variable and partly uncertain. Thus, we applied the "residual" method, which stipulates that the individual sale price of the license corresponds to the difference between the total amount of the price and the individual sale prices of the knowledge transfer and the clinical trial phase. Moreover, referring to IFRS 15.B61, we determined that the date of transfer of control over the license corresponds to the date of the knowledge transfer, i.e. December 16, 2021, when key elements of the know-how were made available to Ipsen.

~~Regarding the recognition of revenue related to the license, we have chosen the following methods:~~

•The upfront payment, minus the portion of prices allocated to knowledge transfer services and clinical phase execution, has been recognized at the date of transfer of control, i.e. December 16, 2021 according to the above, as it is a static license (without implication or associated service provision);

•~~Milestone payments constitute variable and uncertain income, which would be, if applicable, recognized in revenue at the time they become highly probable, which means, in this case, due by Ipsen;~~

•~~Royalties would be progressively recognized in revenue as sales are completed by Ipsen, in accordance with the IFRS 15 exception for royalties constituting variable income.~~

~~F-43~~

~~Regarding the recognition of revenue related to the Phase 3 ELATIVE trial until the end of the double-blind period, we have chosen the following method:~~

• ~~The part of the upfront payment allocated to this service will be recognized progressively as completion progresses.~~

~~Regarding the recognition of revenue related to the knowledge transfer, we have chosen the following method:~~

•~~The part of the upfront payment allocated to this service has been recognized on December 16, 2021 in accordance with the above.~~

~~It must be noted that the 8% equity purchase by Ipsen in the Company mentioned in~~ no ~~te 2.4~~, under the terms of which Ipsen is represented in the Company's Board of Directors, has been completed on the basis of a subscription price agreed upon by the parties as representative of the value of GENFIT at the time, as we had secured future financing and created favorable conditions for the completion of the development and commercial launch of our main program. Therefore, the amount paid by Ipsen for its equity purchase does not interfere in the determination of the price of the licensing and collaboration agreement signed in December 2021 (including the Upfront Payment and other payments due for milestones identified above) and has been entirely recognized in the Group's equity.

~~Application of IFRS15 to the TERNS PHARMACEUTICALS License Agreement signed in 2019~~

~~The Company identified 3 performance obligations under the license agreement with Terns:~~

•~~An exclusive license, with the right to sub-license, to develop, manufacture, distribute and promote elafibranor in NASH and PBC in Greater China;~~

•~~A transfer to Terns Pharmaceuticals of the Company’s Licensed Know-How and data regarding elafibranor and related support until the Marketing Authorization Application by Terns Pharmaceuticals; and~~

•Supply by the Company to Terns Pharmaceuticals of drug product to carry out its clinical trials in Greater China. The supply of drug product following the market authorization would be subject to a separate agreement if applicable.

~~Under the terms of the licensing agreement, the Company has received or could potentially receive:~~

•A $35 million non-refundable Upfront Payment payable within 10business days from June 24, 2019 upon the transfer of the existing Company’s Licensed Know-How. This Upfront Payment was received on July 3, 2019;

•~~Development Milestone Payments upon the achievement of the development milestones for the licensed product;~~

•~~Commercial Milestone Payments upon the achievement of commercial milestones depending on reaching certain aggregate thresholds;~~

•~~Mid-teen percentage Royalties based on sales by Terns Pharmaceuticals in Greater China; and~~

•~~Compensation for the supply of drug product for the clinical trials on a cost-plus basis.~~

~~The potential Development and Commercial Milestone payments may represent up to $193 million.~~

~~Under IFRS 15, the allocation and recognition of revenue was determined as follows based on the fair value of each of the performance obligations:~~

•The $35 million upfront payment was allocated to the license and the transfer of the existing know-how and related support to Terns Pharmaceuticals based on an estimate of the latter measured as the maximum estimated value to be incurred by the Company’s employees and management for the support given to Terns Pharmaceuticals. On this basis, $34.9 million was recognized as revenue in 2019 and $0.1 million was deferred to future periods. No such revenue was recognized in 2020 and 2021.

•Development and Commercial Milestones Payments whose payment depends on the achievement of certain scientific, regulatory or commercial objectives, as provided in the contract, are variable compensation that will be recognized as revenue when the milestones are met. No amounts were recognized in 2019, 2020 and 2021.

•Royalties on commercial sales by Terns Pharmaceuticals will be recognized as revenue pursuant to information given to the Company by Terns Pharmaceuticals, under the terms and timeframes set out in the agreement.No amounts were recognized in 2019, 2020 and 2021.

•~~Revenue on Supply for drug product will be recognized based on the delivery of drug product to Terns Pharmaceuticals. No amounts were recognized in 2019 and 2021. Revenue in 2020 was immaterial.~~

As part of this agreement, Genfit and Terns Pharmaceuticals will also undertake joint research and development projects in liver disease, including the development of elafibranor in combination with Terns Pharmaceuticals’ proprietary compounds. This collaboration agreement is only potential at the date of signing the license agreement and does not yet constitute a reciprocal commitment at December 31, 2020. It therefore has no accounting impact at this time.

This contract contains several delivery obligations. As a result, the Company has ensured, as required by IFRS 15, that the revenue allocation of the transaction corresponds to the fair value of each obligation.

~~F-44~~

~~Other Income~~

~~Other income consisted of the following:~~

Other income Year ended
(in € thousands) 2019/12/31 2020/12/31 2021/12/31
CIR tax credit 8,125 6,020 5,282
Other operating income 1,992 968 223
Government grants and subsidies 5 5 5
TOTAL 10,122 6,993 5,510

~~The research tax credit (CIR) amounted to €5,282 in 2021 (€6,020 in 2020), due to the reduction in research and development expenses.~~

In comparison, the 2020 Research Tax Credit amounted to €7,911, partially balanced with the expense amounting to €1,892corresponding to the resolution of the dispute on the 2010, 2011, 2012 and 2014 Research Tax Credit.

~~During 2021, the Group recognized €223 in “Other operating income” (€968 in 2020 and €1,992 in 2019), mainly comprised of exchange gains on trade receivables.~~

~~20.OPERATING EXPENSES~~

Operating expenses and other operating income (expenses) Year ended Of which :
2019/12/31 Raw Contracted Employee Other Depreciation, Gain /
materials research and expenses expenses amortization (loss) on
and development (maintenance, and disposal of
consumables activities fees, travel, impairment property,
used conducted by taxes…) charges plant and
(in € thousands) third parties equipment
Research and development expenses (66,170) (2,017) (41,509) (11,740) (6,188) (4,716) —
General and administrative expenses (17,265) (177) (59) (7,598) (8,972) (458) —
Marketing and market access expenses (13,708) (8) — (1,645) (11,979) (76) —
Reorganization and restructuring expenses — — — — — — —
Other operating income (expenses) (1,649) — — — (1,668) — 19
TOTAL (98,793) (2,202) (41,568) (20,984) (28,807) (5,251) 19
(*) : including reversals

The depreciation, amortization and impairment charges totaled €4.7 million, consists of a provision of €1.8 million with respect to the research tax credit litigation and due to additional depreciation due to the adoption of IFRS 16. The reversal of this provision of €1.8 million with respect to the research tax credit litigation was booked in 2020 (see above ).

~~F-45~~

Research and development expenses at each reporting date take into account estimates for ongoing activities subcontracted as part of the clinical trials and not yet invoiced, on the basis of detailed information provided by subcontractors and reviewed by the Group’s internal departments. The accuracy of these estimates for some types of expenses improves with the progression of the trials and the review of their determination methods. As a reminder: for regulatory reasons, research services for clinical trials and the production of active ingredients and therapeutic units are contracted out to third parties.

~~The decrease in “Contracted Operating Expense” in 2021 is related to the suspension or the discontinuation of some studies. See~~ ~~Note 2 “Major events in the period and events after the reporting period”~~.

~~The decrease in "Employee expenses" mainly reflects:~~

•The reduced full-year headcount between 2020 and 2021, with an average headcounts decrease from 193 in 2020 to 122 in 2021 and the reduction in share-based compensation (BSA, BSAAR, SO and AGA) with no impact on the cash flow at €1,236 in 2020 and €470 in 2021,

• ~~Partially compensated by the evolution of employee profiles and the profit sharing granted to employees in 2021 for a total amount of €628.~~

~~The "Other expenses mainly include:~~

•~~Legal fees, audit and accounting fees;~~

•~~Advisor fees (banking, press relations, communication, IT, market access, marketing, scientific advising);~~

•~~Intellectual property expenses, including in particular the charges and fees incurred by the Company for patent applications and maintenance;~~

~~F-46~~

•~~Expenses related to insurance, notably those triggered by the Company listing on the Nasdaq since 2019;~~

•~~Expenses related to the rental, use, and maintenance of the Group's premises;~~

•~~Expenses related to external personnel contracted out to the company (safety and security, front desk, clinical and IT services);~~

•~~Expenses related to travel and conferences, including mainly employee travel costs as well as scientific, medical, financial and business development conference registration fees.~~

~~The change in “Other Expenses” was mainly due to the reduction in marketing and market access expenses following the cessation of the pre-marketing of elafibranor in NASH.~~

~~The change in “Net amortization, depreciation and provisions” resulted notably from:~~

•Reversals in 2021 of impairments previously recognized in 2020 following the termination of RESOLVE-IT: These reversals are notably related to (i) the reorganization of vacant premises (reversal of €679 following the termination of the lease agreement and the relocation from the Company offices in Paris in 2021), (ii) some leased equipment (reversal of €441 following their sale in 2021), and (iii) some scientific and IT equipment (reversal of €374); and

•Reversals in 2021 of provisions previously recognized in 2020 related to (i) training and support commitments by the Company within the scope of the reduction in force plan (PSE) signed in October 2020 (reversal of €352 following the partial expiration of these commitments in 2021), and (iii) some administrative costs and costs related to the destruction of drug tablets following the termination of the RESOLVE-IT study (reversal of €366).

~~The above reversals are categorized as "Reorganization and restructuring costs".~~

As a reminder, in 2020, the "Net amortization, depreciation and provisions" included the reversal of the provision, which was previously recognized in 2019 related to the 2010, 2011, 2012 and 2014 research tax credit dispute, following the settlement of this dispute in 2020.

~~Employee expenses~~

~~Employee expenses and number of employees were as follows:~~

Employee expenses Year ended
(in € thousands) 2019/12/31 2020/12/31 2021/12/31
Wages and salaries (14,018) (13,570) (10,328)
Social security costs (5,171) (5,047) (4,775)
Changes in pension provision (138) 74 (154)
Employee profit-sharing — — (628)
Share-based compensation (1,657) (1,236) (470)
TOTAL (20,984) (19,779) (16,354)

Number of employees at year-end - detail Year ended
2019/12/31 2020/12/31 2021/12/31
Average number of employees 175 193 122
Number of employees
Research and development 108 66 55
Services related to research and development 19 16 18
Administration and management 60 43 47
Marketing and commercial 7 5 2
TOTAL 194 130 122
Number of employees
Senior staff 144 105 97
Staff 45 23 21
Others (apprentices) 5 2 4
TOTAL 194 130 122
Number of employees
Male 78 52 45
Female 116 78 77
TOTAL 194 130 122

~~F-47~~

The decrease in employee expenses resulted mainly from lower salaries and social security costs due to the reduction of the average headcount from 193 in 2020 down to 122 in 2021, which was partially compensated by the evolution of employee profiles.

The decrease in share-based compensation (BSA, BSAAR, SO and AGA with no impact on the cash flow) reflected the reduction of the workforce, coupled with the decreasing expenses recognized for the 2016-2019 AGA and SO plans (see ~~Note 2~~1 ~~"Share-Based Compensation"~~).

~~As the Company recorded a net profit in 2021, it granted a profit-sharing plan to its employees in accordance with the French Law, totaling €628 (payable in the first helf of 2022).~~

~~21.SHARE-BASED COMPENSATION~~

~~Share-based compensation is granted by the Group to employees, executive officers, board members and consultants.~~

Share-based compensation granted to employees and executive officers in 2014 through 2020 corresponds to redeemable share warrants ("Bons de Souscriptions et/ou d'Acquisition d'Actions" or "BSAAR"), stock options ("SO") and free shares ("actions gratuites" or "AGA")

~~Share-based compensation granted to board members and consultants in 2014, 2015, 2017 and 2019 corresponds to share warrants ("Bons de Souscriptions d'Actions" or "BSA").~~

~~For the measurement of this share-based compensation, the Group has determined that under IFRS its consultants were not equivalent to employees.~~

~~Under these programs, holders of vested instruments are entitled to subscribe to shares of the Company at a pre-determined exercise price. All of the plans are equity settled.~~

~~No instruments were exercised during 2021, 2020, and 2019.~~

~~In 2021, only SO and AGA plans were granted as share-based compensation, the terms and conditions of which are discussed below.~~

~~The expense recognized during 2021 pursuant to IFRS 2 was €470 (compared to €1,236 at December 31, 2020 and €1,656 at December 31, 2019).~~

In 2019, the Group revised its estimate of the number of equity instruments expected to be vested taking into account the number of lapsed instruments noted after 4 years of successive plans. As a result, Genfit revised the turnover rate assumption, which was estimated at 15%, to a rate of 0%, taking into account recent observations and the actual number of lapsed instruments at each closing.

~~The table below shows the share-based compensation under each plan according to the change in estimate mentioned above .~~

~~F-48~~

Share-based compensation - expense Year ended
2019/12/31 2020/12/31 2021/12/31
AGA S 2016-1 — — —
AGA S 2016-2 44 — —
AGA D 2016-1 21 21 —
AGA D 2016-2 39 6 —
SO 2016-1 213 49 —
SO 2016-2 93 13 —
SO US 2016-1 (24) — —
SO US 2016-2 (11) — —
AGA S 2017-1 209 — —
AGA S 2017-2 45 13 —
AGA D 2017-1 190 — —
AGA D 2017-2 56 4 —
SO 2017-1 27 335 —
SO 2017-2 2 110 —
SO US 2017-1 (4) — —
SO US 2017-2 (6) — —
BSA-2017-A — — —
BSA-2017-B — — —
AGA S 2018 148 62 —
AGA D 2018 135 65 —
SO 2018 285 225 186
SO US 2018 25 24 24
AGA S 2019 41 55 39
AGA D 2019 35 63 16
SO 2019 70 123 105
SO 2019 - US 16 35 (11)
BSA 2019 7 20 —
SO US 2019 1 14 (7)
SO D 2020 — — 14
SO C 2020 — — 40
SO US 2020 — — 19
AGA S 2021 — — 29
AGA D 2021 — — 5
SO D 2021 — — 2
SO C2021 — — 9
SO US 2021 — — 2
TOTAL 1,656 1,236 470

~~21.1.~~ ~~Share warrants ( bons de souscription d'actions or BSA)~~

~~The key terms and conditions related to each program are detailed in the following tables:~~

~~F-49~~

Share-based compensation 2019 2017 2015 2014
Share warrants ( BSA )
BSA 2017-A BSA 2017-B BSA 2015-A BSA 2015-B BSA 2014-A BSA 2014-B
Date of the Shareholders meeting 06/15/2018 06/16/2017 04/02/2014 04/02/2014
Date of the Management Board meeting 01/09/2015 07/24/2014
Date of the decision and delegation of the Board of Directors to the CEO 10/18/2019 11/21/2017
Date of the CEO decision 10/31/2019 12/6/2017
Beneficiaries Consultants Consultants and officers Consultants and officers Consultants and officers
Total number of BSA subscribed 35,070 18,345 18,345 12,860 12,860 46,765 46,765
Total number of BSA voided 0 0 0 12,860 12,860 46,765 46,765
Total number of BSA remaining 35,070 18,345 18,345 0 0 0 0
Issue Price €1.23 €2.00 €0.01 €0.01
Exercise price €12.32 €19.97 €35.95 €23.50
Estimated fair value - according to IFRS 2 €0.75 €3.78 €3.81 €25.33 /€26.89 €25.33 /€26.31 €15.61/€24.84 €15.61/€24.85
End of exercise period 05/31/2024 06/30/2022 07/15/2022 05/31/2019 11/30/2019 09/30/2018 02/28/2019
Valuation method used Black & Scholes
Expected dividends 0% 0% 0% 0%
Expected volatility 40.0% 36.4% 35.7% 74.9% 74.9%
Risk-free interest rate 0% 0.0% 0.4% 0.4%
Expected life 0.7 years 6 years 4 years 4 years

~~The services performed by the consultants are mainly:~~

•~~to evaluate product development plans and propose, if necessary, changes to strategic or technical approaches;~~

•to advise the Company's management and the Scientific Board in identifying strategies and selecting drug candidates, based in particular on the scientific results obtained by the Group (new therapeutic targets, new compounds); and

•to assist and advise the Group in its alliance strategies, such as external growth-supporting synergies (acquisition of new competencies and the purchase of operating rights, drug candidates and innovative technologies, etc.).

•

~~21.2.~~ ~~Redeemable warrants ( bons de souscription et/ou d'acquisition d'actions remboursables or BSAAR)~~

~~At December 31, 2021,, all of the BSAAR issued by the Company in 2016 became void without being exercised.~~

~~21.3.~~ ~~Free shares ( actions gratuites attribuées or AGA)~~

~~The key terms and conditions related to each program are detailed in the following tables:~~

~~F-50~~

Share-based compensation 2019 2019 2018 2017 2016
Free shares (AGA) AGA D AGA S
Officers(1) Employees Officers(1) Employees AGA D and S AGA D and S 2017-1 and 2017-2 AGA D and S
2016-1 and 2016-2

Date of the Shareholders meeting 06/15/2018 06/15/2018 06/16/2017 06/21/2016
Date of the Management Board
meeting 12/15/2016
Date of the decision and delegation of the Board of Directors to the CEO 07/18/2019 11/07/2018 11/22/2017
Date of the Executive
Board Meeting/CEO decision 07/18/2019 11/22/2018 12/06/2017
Total number of AGA subscribed 3,000 16,070 0 17,556 35,800 41,196 30,709
Total number of AGA voided 0 3,360 0 5,226 14,059 13,775 5,429
Total number of AGA definitively
vested 0 0 0 0 21,741 27,421 25,280
Total number of AGA remaining 3,000 12,710 0 12,330 — — 0
Vesting period From 07/18/2019 to 09/16/2022 From 07/18/2019
to 09/16/2022 From 12/06/2017
to 12/31/2020 From 12/15/2016
to 12/15/2019
Valuation method used Monte Carlo
Price of the share at the time
of allocation €17.06 €20.02 €21.95 €20.78
Expected dividends 0% 0% 0% 0%
Expected volatility 40.2% 38.0% 53.7% 63.0%
Risk-free interest rate 0.0% 0.0% 0.0% 0.0%
Turnover rate 0.00% 15.00% 15.00% 15.00%
(1) : Chairman and CEO

Share-based compensation
Free shares(AGA) 2021
AGA S AGA D
Employees Officers (1)
Date of the Shareholders' Meeting 11/27/2019 11/27/2019
Date of the decision and delegation of the Board of Directors to the CEO 02//26/2021 03/17/2021
Date of the CEO decision 03/30/2021 0
Total number of AGA subscribed 32,400 15,000
Total number of AGA voided 3,400 0
Total number of AGA definitively
vested 0 0
Total number of AGA remaining 29,000 15,000
Vesting period From 03/30/2021 to 03/31/2024 From 03/17/2021 to 03/31/2024
Valuation method used Monte Carlo Monte Carlo
Price of the share at the time
of allocation 4.00 € 4.15 €
Expected dividends 0 % 0%
Expected volatility 51 % 51 %
Risk-free interest rate -0.59% -0.59%
Turnover rate 0.0 % 0.0%
(1) Chief Executive Officer.

~~F-51~~

~~The final allocation of free shares is subject to continued employment with the Group and performance conditions.~~

~~21.4.~~ ~~Stock options (options de souscription d'actions or SO)~~

~~The key terms and conditions related to each program are detailed in the following tables:~~

Share-based compensation 2020 2019 2018 2017 2016
Stock option SO SO SO US SO 2019 SO US 1 SO US 2 SO 2018 SO US 2018 SO 1 and 2 2017 SO US 2017 SO 1 and 2 2016 SO US 2016
Officers (1) Employees Employees Employees and Officers Employees Employees Employees and Officers Employees Employees and Offices Employees Employees and Offices Employees

Date of the Shareholders meeting 11/27/2019 06/15/18 11/27/2019 06/15/18 06/16/17 06/21/16
Date of the Management Board meeting 12/15/2016
Date of the decision and delegation of the Board of Directors to the CEO 12/11/2020 07/18/19 11/27/2019 11/7/2018 11/21/2017
Date of the CEO decision 12/11/2020 07/18/19 11/27/2019 11/7/2018 12/6/2017
Total number of SO subscribed 35,000 103,750 56,250 107,880 30,620 13,350 122,000 17,500 96,250 13,000 62,875 10,500
Total number of SO voided 0 0 0 13,350 7,000 4,450 50,322 7,787 35,273 13,000 13,169 10,500
Total number of SO definitively vested 0 0 0 0 0 0 0 0 60,977 0 49,706 0
Total number of SO remaining 35,000 103,750 48,750 94,530 23,620 8,900 71,678 9,713 0 0 0 0
Exercise price €4.38 €3.50 €4.52 €13.99 €16.90 €14.31 €16.00 €21.65 €17.91 €22.54 €15.79 €21.12
Vesting period From 12/31/2020 to 12/31/2023 From 07/18/2019 to 09/16/2022 and From 11/27/2019 to 01/16/2023 From 11/07/2018 to 12/31/2021 From 12/06/2017 to 12/31/2020 From 12/15/2016 to 12/15/2019
Exercice period From 01/01/2024 to 12/31/2027 From 09/17/2022 to 09/17/2029 and From 01/17/2023 to 01/17/2030 From 01/01/2022 to 12/31/2028 From 01/01/2021 to 12/31/2027 From 12/16/2019 to 12/16/2026
Fair value €1.16 €1.46 1.12 €4.59 €3.67 €3.23 €9.32 €6.90 €9.32 €10.30 €8.52
Valuation method used Black-Scholes
Price of the share at the time of allocation €3.99 €3.99 €17.06 €14.50 €22.12 €21.95 €20.79
Expected dividends 0% 0% 0% 0% 0% 0% 0%
Expected volatility 49.0% 49.0% 40.0% 44.1% 53.7% 63.0%
Risk-free interest rate -0.7% -0.7% 0.0% 0.0% 0.0% 0.0% 0.0%
Turnover rate 0.00% 0.00% 0.00% 0.00% 15.00% 15.00% 15.00%

~~F-52~~

2021
SO SO US
Share-based compensation

Stock Options (SO) Officers (1) Employees Employees
Date of the Shareholders' Meeting 06/30/2021
Date of the decision and delegation of the Board of Directors to the CEO 10/18/2021
Date of the CEO Decision 10/19/2021
Total number of SO subscribed 35000 134375 32500
Total number of SO voided 0 0 7500
Total number of SO definitely vested 0 0 0
Total number of SO remaining 35000 134375 25000
Exercise price €3.26 €2.61 €3.22
Vesting period From 10/20/2021 to 10/20/2024
Exercise period From 10/21/2024 to 10/21/2031
Fair value 1.06 1.30 1.07
Valuation method used Black-Scholes
Price of the share (€) at the time of allocation 3.24 3.24 3.24
Expected dividends 0.00 0.00
Expected volatility 50 % 50 %
Risk-free interest rate (0.59) % (0.59) %
Turnover rate 0.00 0.00

~~(1)Chief Executive Officer~~

~~Volatility assumptions in the above tables are determined by reference to the Company's historical share price observed on the grant date over a~~ ~~two- and three-year period prior to the grant date, adjusted for extreme variations, if any.~~

~~Definitive vesting is subject to continued employment with the Group and performance conditions.~~

~~21.5.Performance conditions~~

The SO and SO US stock option plans as well as certain free share plans (AGA "D") implemented in 2016, 2017, 2018 and 2019 are subject to internal performance conditions related to the progress of the Group's research and development programs, and to external performance conditions related to the evolution of the Company's stock price.

~~The other free share plans (AGA "S") and SO and AGA plans implemented starting in 2020 are subject only to internal performance conditions.~~

~~21.5.1.~~ ~~Performance conditions of the 2021 plans~~

~~F-53~~


~~Plans~~	~~Evaluation date for performance conditions~~	~~Nature of internal conditions~~
SO C 2021 SO D 2021 SO US 2021	~~10/20/2024~~	a.~~50% of the Stock Options will be exercisable if at least one of the following three conditions relating to the development of elafibranor in PBC and to the ELATIVE clinical trial is fulfilled:~~ i.~~ELATIVE top-line results are released to the market before or during the second quarter of 2023;~~ ~~ii.a new drug application is filed for elafibranor in PBC with the Food and Drug Administration (FDA) or the European Medicines Agency (EMA) in the second half of 2023 or before;~~ ~~iii.elafibranor is approved by a regulatory authority in 2024.~~ b.~~15% of the Stock Options will be exercisable if at least one of the following two conditions relating to the development of NTZ and the ACLF franchise is fulfilled:~~ i.~~a phase 2 clinical study or a more advanced clinical study evaluating NTZ is in ongoing or was carried out;~~ ~~ii.the Company develops or acquires the rights to a new molecule (including through repositioning) for development in ACLF.~~ a.~~15% of the Stock Options will be exercisable if at least one of the following two conditions relating to the NIS4 diagnostic technology is fulfilled:~~ i.if a research and development partnership agreement relating to the implementation of the NIS4 diagnostic technology into an IVD test with at least one major NASH player (“big pharma”, biotech company, institution, etc.) is entered into by the Company; ~~ii.Labcorp’s NASHnext LDT is reimbursed by at least three payers in the United States (insurance, integrated system, etc).~~ a.~~20% of the Stock Options will be exercisable if at least one of the following two conditions relating to the development of the product pipeline of the Company is fulfilled:~~ i.At least one new molecule (excluding elafibranor and NTZ) is developed by the Company or the Company has acquired development rights to a new molecule outside of the ACLF franchise (performance already covered by b(ii) above); ~~ii.~~At least two phase 2 clinical studies or more advanced clinical studies are ongoing or have been completed ; not including a phase 2 clinical study or more advanced clinical study in NTZ (performance already covered by b(i) above).



~~Plans~~	~~Evaluation date for performance conditions~~	~~Nature of internal conditions~~
~~AGA D 2021~~ ~~AGA S 2021~~	~~3/31/2024~~	~~50% of the 2021 free shares will vest if at least one of the three following conditions regarding development of elafibranor in PBC and the ELATIVE trial is met:~~ ~~(i) « Last Patient Visit »of ELATIVE in the 4th quarter 2022 or before;~~ ~~(ii) results of ELATIVE are communicated to the market before or during the first half 2023 ;~~ ~~(iii) the filing of an marketing authorization application for elafibranor in PBC with the FDA or EMA in 2023.~~
		~~25% of the free shares will vest if at least one of the two following conditions related to NIS4 diagnostic technology are met :~~ ~~(i) an R&D agreement for an IVD test using NIS4 technology is signed with at least one major NASH player (big pharma, biotech, institution, etc) ;~~ ~~(ii) use of NIS4 technology in at least 20 clinical studies.~~
		~~25% of the free shares will vest if at least one of the two following conditions related to the Company's product pipeline is met: :~~ ~~(i) a clinical study in a new indication with elafibranor or NTZ is underway or was completed ;~~ ~~(ii) development or in-licensing or acquisition of rights to a new compound by the Company.~~

~~F-54~~

~~22.FINANCIAL INCOME AND EXPENSES~~

Financial income and expenses Year ended
(in € thousands) 2019/12/31 2020/12/31 2021/12/31
Interest income 2,626 1,442 274
Foreign exchange gain 2,272 4,983 8,876
Financial income occured by renegotiating the convertible bond debt OCEANE 0 0 35,578
Other financial income 324 119 52
TOTAL - Financial income 5,221 6,544 44,780
Financial expenses
Interest expenses (11,289) (11,643) (4,846)
Interest expenses for leases (148) (134) (109)
Foreign exchange losses (1,657) (13,508) (2,163)
Other financial expenses (17) (11) (5)
TOTAL - Financial expenses (13,110) (25,296) (7,122)
FINANCIAL GAIN (LOSS) (7,889) (18,752) 37,658

~~Financial income includes notably the one-time buyback bonus of €35.6 million issued from the renegotiation of the OCEANEs completed in January 2021.~~

~~Interest income recognized is almost exclusively related to investments in US dollars, of which the return has decreased in 2021.~~

The financial expenses are related to the interest of the OCEANE and they mainly relate to the payment of coupons at the rate of 3.5% and the amortization of the discount of the bond debt at the effective interest rate of 8.8% to accrete the bond debt up to the amount that will be repaid (or converted) at maturity, recognizing a theoretical annual interest accrual as a result of the accretion on the period of an amount equivalent to the equity component at an effective interest rate.

The portion of financial gain related to currency exchange is a gain of €6,713 in 2021 notably due to the difference in currency exchange recognized on the cash investments in US dollars, as GENFIT has decided to keep some of its cash in US dollars. See ~~Note 6 “Cash and cash equivalents”. These cash investments in US dollars are to be used to pay directly expenses in US dollars (natural currency hedge).~~

~~23.INCOME TAX~~

~~For 2021, the corporate income tax payable of the Parent company GENFIT SA amounted to €5,051, which is recognized as "Other current tax liabilities" in the consolidated financial statements.~~

~~It is of note that we benefited from a reduced tax rate on part of the income from the licensing agreement signed with Ipsen pursuant to Article 238 of the French Tax Code.~~

~~The determination of the income tax expense recognized in the consolidated financial statements, which amounted to €2,215 for 2021, is summarized in the table "Effective tax rate" hereunder.~~

~~Breakdown of deferred taxes by nature~~

As of Impact on Impact on the As of
(in € thousands) 12/31/2019 equity profit/loss 12/31/2020
Deferred tax liabilities (3,182) — 1,132 (2,050)
Deferred tax assets 1,988 — (706) 1,282
TOTAL (1,193) — 426 (768)

As of Impact on Impact on the As of
(in € thousands) 12/31/2020 equity profit/loss 12/31/2021
Deferred tax liabilities (2,049) (2,721) 2,455 (2,314)
Deferred tax assets 1,282 — 430 1,712
TOTAL (767) (2,721) 2,885 (602)

~~F-55~~

~~Effective tax rate~~

Year ended
(in € thousands) 2019/12/31 2020/12/31 2021/12/31
Profit (loss) for the period (65,144) (101,221) 67,259
Tax gain (expense) 576 428 (2,215)
Profit (loss) for the period before taxes (65,721) (101,649) 69,474
Tax rate in France 32.02 % 28.92 % 27.37 %
Theoretical group tax rate in France 21,046 29,401 (19,018)
Increase / decrease in tax benefit arising from :
Tax credits 2,588 1,739 1,512
Permanent differences 3,341 (404) 833
Differences between rates 125 172 7,323
Tax losses for the period, unrecognised as deferred tax assets (25,274) (28,603) 0
Utilisation of previously unrecognised tax losses 0 0 5,590
IFRS adjustments without tax incidence (530) (358) (129)
Non recognition of deffered tax assets related to temporary differences (114) (775) (24)
Recognition of deferred tax assets against deferred tax liabilities (889) (706) 430
Tax effects related to the renegociation of the convertible debt 0 0 1,370
Others 284 (39) (102)
Income tax expense recognised in profit or loss 576 428 (2,215)
Effective income rate (0.88) % (0.42) % (3.19) %

We are subject to a tax audit by the French revenue service on our tax returns or operations subject to review on the 2019 and 2020 periods (including the Research Tax Credit claimed for these periods), which started on December 10, 2021 and is still ongoing at the date of this document.

~~23.1.Losses available for offsetting against future taxable income~~

~~At December 31, 2019, 2020 and 2021, the tax loss carry forwards for the Company amounted to €384,471, €483,356 and €450,679, respectively.~~

Such carry forwards can be offset against future taxable profit within a limit of €1.0 million per year plus 50% of the profit exceeding this limit. Remaining unused losses will continue to be carried forward indefinitely.

~~In 2021, the amount of tax loss carry forwards used to offset taxable profit were €33.7 million.~~

~~23.2.Deferred tax assets and liabilities~~

~~The Group's main sources of deferred tax assets and liabilities as of December 31, 2019 and 2020 related to:~~

~~Tax loss carry forwards: €384,471 and €483,356 respectively;~~

•~~Temporary differences:~~

◦~~related to the OCEANEs: a net deferred tax liability for €1,193 and €2,049 as of December 31, 2019 and 2020, respectively and~~

◦~~related to post-employment benefits: €352 and €287, respectively, each offset by a deferred tax asset of the same amount.~~

~~F-56~~

~~The Group's main sources of deferred tax assets and liabilities as of December 31, 2021 related to:~~

•~~Tax loss carry forwards: €450,679 (compared to €483,356 at December 31, 2020);~~

•~~Temporary differences related to:~~

•~~the OCEANEs: a deferred tax liability of €2,314 and an asset of 1,712, i.e., a net deferred tax liability of €602; and~~

•~~post-employment benefits: a deferred tax liability of €216 offset by an asset of the same amount;~~

~~The Company offsets its deferred tax assets and liabilities (€1,712 and €2,314, respectively), as permitted by IAS 12, resulting in a net deferred tax liability of €602 as of December 31, 2021.~~

~~The deferred income tax benefit for the period is mainly due to the decrease in the net deferred tax liability over the period.~~

Other than as it relates to deferred tax assets recognized based on the available deferred tax liabilities, no other deferred tax asset has been recognized as it is not probable that taxable profit will be available to offset deductible temporary differences and tax loss carry forwards.

~~24.EARNINGS (LOSS) PER SHARE~~

~~Basic earnings per share are calculated by dividing profit attributable to our ordinary shareholders by the weighted average number of ordinary shares outstanding during the period.~~

Diluted earnings per share is calculated by adjusting profit attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding, for the effects of all potentially dilutive ordinary shares (share warrants, free shares, stock options, OCEANE convertible bonds).

~~The components of the earnings (loss) per share computation are as follows:~~

Earnings per share Year ended
2019/12/31 2020/12/31 2021/12/31
Profit (loss) for the period (in € thousands) (65,144) (101,221) 67,259
Weighted average number of ordinary shares used to calculate basic earnings (loss) per share 36,987,982 38,858,617 44,739,756
Basic earnings (loss) per share (€/share) (1.76) (2.60) 1.51
Weighted average number of ordinary shares used to calculate diluted earnings (loss) per share 36,987,982 38,858,617 55,613,634
Diluted earnings (loss) per share (€/share) (1.76) (2.60) 1.23

~~25.~~27.LITIGATION ~~AND CONTINGENT LIABILITIES~~

Class Action

In May 2020, following the Group announcement on the interim results of our ~~RESOLVE-IT~~RESOLVE-IT® Phase 3 clinical trial in which elafibranor had not achieved the primary or key secondary endpoints, a purported shareholder class action complaint was filed in state court in the Commonwealth of Massachusetts, naming the Group, the board of directors and certain members of the senior management as defendants, alleging that defendants made materially misleading statements about the development of elafibranor in connection with our U.S. initial public offering in violation of U.S. federal securities laws.

In October 2020, the plaintiff voluntarily dismissed the Commonwealth of Massachusetts action, but in December 2020, the same plaintiff filed a purported shareholder class action complaint in state court in the State of New York, alleging claims substantially similar to those in the previous complaint against the same defendants, as well as the underwriters of our U.S. initial public offering.

F-49

In March 2021, the Company and the other defendants filed a motion to dismiss. In August 2021, the ~~court~~Supreme Court of the State of New York, New York County, granted the motion and dismissed the complaint with prejudice. ~~In September 2021, the~~The plaintiff ~~filed a notice of appeal to~~appealed and in December 2022, the Supreme Court, Appellate Division, First Department ~~and perfected~~affirmed the dismissal of the complaint, except that it deleted the phrase “with prejudice” from the Supreme Court’s judgment. The time to appeal ~~on March 9, 2022. We intend to vigorously defend~~ the ~~lower court’s~~ decision of the Appellate Division expired in ~~the appellate court.~~January 2023.

~~F-57~~

~~26.~~28.RELATED PARTIES

~~Biotech Avenir SAS and The NASH Epidemiology Institute™ , an endowment fund set up by the Company, are related parties within the meaning~~Compensation of ~~IAS 24.9.~~key management personnel

The ~~registered office~~aggregate compensation of ~~Biotech Avenir SAS~~the members of the Company’s Board of Directors (including the Chairman of the Board) and ~~that of The NASH Epidemiology Institute™ are located at~~to the ~~same address as~~Chief Executive Officer includes the ~~Company. These domiciliations are provided without charge.~~following:


	Year ended
(in € thousands)	2021/12/31	2022/12/31	2023/12/31
Fixed compensation owed	518	585	614
Variable compensation owed	163	169	170
Attendance fees - board of Directors	488	421	381
Contributions in-kind	23	21	23
Share-based payments	58	74	72
Employer contributions	443	410	396
Consulting fees	0	0	0
TOTAL	1,693	1,680	1,656

Biotech Avenir

Biotech Avenir SAS is a holding company incorporated in 2001 by the Company's founders. Most of its share capital is currently held by individuals, i.e. the 4four co-founders of the Company and 12twelve Company employees.

Jean-François Mouney, the Chairman of the Company, is also the Chairman of Biotech Avenir SAS.

At December 31, ~~2021,~~2023, Biotech Avenir SAS held 3.79% of the share capital of the Company.

The Company did not carry out any transactions with Biotech Avenir in ~~2021, 2020,~~2023, 2022, or ~~2019 ,~~2021, with the exception of the domiciliation without charge.

~~The NASH Epidemiology Institute™~~

The NASH Education Program™ (which became The NASH Epidemiology Institute™ ) endowment fund was created in November 2016 at the initiative of the Group to develop and finance disease awareness activities targeting medical professionals and the general public.

~~It was dissolved on December 31, 2020, and in that context, the endowment fund had a positive balance of €17. These funds were transferred to the benefit of the Fondation de France in 2021.~~

~~PCAS Group~~

Mr. Frédéric Desdouits, member of the Genfit Board of Directors since June 2014 , was appointed CEO of PCAS Group in March 2019. Elafibranor’s principal active ingredient has been made by a PCAS Group production unit since 2013, and as Mr. Frédéric Desdouits became PCAS Group’s CEO, he temporarily became a related party as defined by IAS 24.9 until his resignation from this position in March 2020.

In January 2020, the Company signed a Memorandum of Understanding with PCAS Group setting out the conditions under which the PCAS Group would set up a second manufacturing source for the active ingredient used in the composition of elafibranor, as part of initiatives to secure the supply chain, and undertake the necessary investments to carry out this goal and to increase the production capacity of the active ingredient in view of a potential future marketing authorization. The cost to carry out technology transfers between the current manufacturing unit and the second source, €255, was to be borne by PCAS, except in case of termination of the RESOLVE-IT program. Due to the termination decision enacted on July 22, 2020, these costs were included in the closing costs of the study that were recognized in 2020. This Memorandum of Understanding was terminated in 2020 following the RESOLVE-IT topline data readout.

Ipsen Pharma SAS

The licensing agreement signed with Ipsen Pharma SAS in December 2021 provides for a certain number of service agreements ~~to be~~that were signed with the Company in ~~2022.~~2022 and 2023, notably the Inventory Purchase Agreement, the Transition Services Agreement and the Part B Transition Services Agreement.

These agreements cover support for Ipsen in future proceedings and processes (other than knowledge transfer) and the provision of drug tablets which Ipsen may require to execute its clinical trial. As per the agreement signed with Ipsen in December 2021, the prices under these agreements ~~will~~ cover all costs ~~born~~borne by the Company to provide the relevant goods and services, without economic benefit for Ipsen.

See N ote 7.1 - "Revenues and other income".

~~27.~~29.~~COMPENSATION OF CORPORATE OFFICERS~~COMMITMENTS AND CONTINGENT LIABILITIES

~~On September 2, 2019,~~Accounting policies

In accordance with IAS 37, Provisions Contingent Liabilities and Contingent Assets, provisions are recognized when the ~~Board~~Group has a present obligation (legal, regulatory, contractual or constructive) as a result of ~~Directors accepted~~a past event, for which it is probable that an outflow of resources will be required to settle the ~~resignation~~obligation, and of which the amount can be estimated reliably.

Future milestone and revenue based royalty payments may be recorded pursuant to Contingent liability under IAS 37 or intangible asset under IAS 38. We record a provision when we have a present obligation, whether legal or constructive, as a result of a past event; it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation; and a reliable estimate can be made of the ~~Chairman and Chief Executive Officer~~amount of the ~~Company~~outflow of resources. Under IAS 38, we record intangible asset when it is probable that the expected future economic benefits that are attributes to the assets will flow to us and ~~decided to separate~~ the ~~roles~~cost of ~~Chairman of the Board of Directors and Chief Executive Officer of Genfit SA with effect from September 16, 2019.~~

At the same meeting, the Board of Directors appointed the Chief Executive Officer of the Company and confirmed the former Chairman and Chief Executive Officer in his functions as Chairman of the Board of Directors and member of certain committees of the Company's Board of Directors.asset can be measured reliably.

~~F-58~~F-50

Under these conditions, the following table details the compensation paid to the Chairman and Chief Executive Officer during the period from January 1, 2019 to September 16, 2019, and the compensation paid to the Chief Executive Officer in 2021, 2020 and during the period from September 16 to December 31, 2019 (after the change in governance) and the years in which the amounts were recognized in the statement of operations.

Compensation paid to the Chairman Year ended
during the period from January 1, 2019 to September 16, 2019
(in € thousands) 2019/12/31 2020/12/31 2021/12/31
Short-term employee benefits (gross + employer's social contributions, paid) 1,338 — —
Post-employment pension & medical benefits — — —
Share-based payment transactions 109 — —
Director fees Genfit Corp (net) 22 — —
TOTAL 1,469 — —
Compensation paid to the Chief Executive Officer Year ended
(in € thousands) 2019/12/31 2020/12/31 2021/12/31
Short-term employee benefits (gross + employer's social contributions, paid) 140 534 628
Post-employment pension & medical benefits — — —
Attendance fees — — —
Share-based payment transactions — 41 58
Director fees Genfit Corp (net) — — —
TOTAL 140 575 686

~~(1)~~Within this total, only the portion of the amounts paid in 2019 to the Chairman and Chief Executive Officer pursuant to the 13th resolution of the Annual General Meeting of June 13, 2019, for the part of the Incentive Plan corresponding to that portion of work on the initial public offering of the Company on the Nasdaq Global Select Market carried out in 2018, i.e., ¾ of the amount due, i.e. a gross amount of €562,893. However, the Chairman of the Board of Directors decided to forgo the balance amount of €187,631, which had been recorded in 2019.

~~The Chief Executive Officer’s corporate contract contains a clause whereby, in the event of termination, he would receive a non-compete indemnity equal to:~~

~~(i)twelve (12) months of fixed compensation, calculated on the basis of the gross amounts due for the past twelve months ended and~~

~~(ii)~~increased, where applicable, by the amount of the annual variable compensation due for the previous year. This compensation is intended to compensate the prohibition made to the Chief Executive Officer, for a period of 12 months following the termination of his functions, for whatever reason, to work in any way whatsoever with certain companies carrying out a directly competitive activity of the Company.

~~In addition, the Chief Executive Officer, except in the event of gross negligence within the meaning of labor law, shall receive severance pay equal to:~~

~~(i)twelve (12) months of fixed compensation, calculated on the basis of the gross amounts due for the twelve past completed months and~~

~~(ii)increased, where applicable, by the amount of annual variable compensation due for the previous year.~~

This compensation will be paid one month after his effective termination of activity within the Group. The compensation will not be paid if, on his initiative, the Chief Executive Officer leaves the Company to exercise new functions or changes functions within the Group, or even if he has the possibility of asserting in the short term his retirement rights. It is also specified that any sum paid under the non-competition clause will be deducted from the sums due under the severance pay and vice versa. The total and maximum commitment represented by this indemnity (gross, employer charges and payroll tax) as of December 31, 2021 would amount to €523.

The Chairman of the Board of Directors, Jean-François Mouney, receives a fixed compensation. He also has use of a company vehicle and the Group’s insurance and disability plan. These benefits are totaled in the table below in the "Other remuneration" line. The Chairman of the Board of Directors also receives attendance fees granted for his participation in the work of some of the committees of the Board of Directors.

~~The directors' fees and other compensation due and paid to the non executive directors are as follows:~~

~~F-59~~

Amounts
due* Amounts
paid* Amounts
due* Amounts
paid* Amounts
due* Amounts
paid*
Attendance fees and other forms of remuneration payable to each of the non executive officer During the year ended December 31,
(in euros) 2019 2020 2021
Jean-François MOUNEY (1)
Attendance fees 14,791 633 49,937 49,939 45,863 39,232
Other remuneration 88,874 88,874 286,469 286,469 286,553 286,553
TOTAL 103,665 89,507 336,406 336,408 332,416 325,785
Xavier GUILLE DES BUTTES
Attendance fees 68,016 67,580 85,020 80,660 89,822 85,020
Other remuneration — — — — — —
TOTAL 68,016 67,580 85,020 80,660 89,822 85,020
Frédéric DESDOUITS
Attendance fees 33,136 30,302 53,360 44,640 43,600 47,960
Other remuneration — — — — — —
TOTAL 33,136 30,302 53,360 44,640 43,600 47,960
BIOTECH AVENIR
Représenté par Florence Séjourné
Attendance fees — — — — — —
Other remuneration — — — — — —
TOTAL — — — — — —
Philippe MOONS
Attendance fees 36,188 41,202 45,780 41,420 16,986 25,161
Other remuneration — — — — — —
TOTAL 36,188 41,202 45,780 41,420 16,986 25,161
Anne-Hélène MONSELLATO
Attendance fees 44,472 53,410 50,140 45,780 52,320 52,320
Other remuneration — — — — — —
TOTAL 44,472 53,410 50,140 45,780 52,320 52,320
Catherine LARUE
Attendance fees 33,136 28,122 43,600 43,600 47,651 45,780
Other remuneration — — — — — —
TOTAL 33,136 28,122 43,600 43,600 47,651 45,780
Katherine KALIN
Attendance fees — — 15,805 4,360 43,600 39,240
Other remuneration — — — — — —
TOTAL — — 15,805 4,360 43,600 39,240
Eric BACLET
Attendance fees — — 20,165 6,540 62,881 62,336
Other remuneration — — — — — —
TOTAL — — 20,165 6,540 62,881 62,336
Jean-François TINE
Attendance fees — — — — 39,724 23,919
Other remuneration — — — — — —
TOTAL — — — — 39,724 23,919
TOTAL 318,613 310,123 650,276 603,408 729,000 707,521

~~(1)~~

~~The attendance fees and other remuneration for Jean-François Mouney above correspond to amounts due for the period from September 16, 2019 to December 31, 2019 and the full year 2020 and 2021.~~

In addition, the Company has provided corporate officers, directors and members of the Executive Committee a “directors and officers” insurance against claims relating to certain actions they may take in the performance of their duties. For the 12 months of the calendar year 2021, the insurance premium for the implementation of this insurance coverage amounted to €2,052 (€1,316 in 2020 and €3,146 in 2019)

~~28.COMMITMENTS~~

Obligations under the terms of subcontracting agreements

~~F-60~~

The Group enters into contracts for its business needs with clinical research organizations (CROs) for clinical trials, as well as with Contract Manufacturing Organizations (CMOs) for clinical and commercial supply manufacturing, commercial and pre-commercial activities, research and development activities and other services and products for operating purposes. The Group’s agreements generally provide for termination with specified periods of advance notice.

Such agreements are generally cancellable contracts and not included in the description of the Group’s contractual obligations and commitments.

Obligations under the terms of lease agreements

The Company has guaranteed its rental payment obligation under the lease agreement for the headquarters in Loos, France in the amount of €600 at December 31, 2023 (€600 at December 31, 2022).

Contingent liabilities

•Obligations under the terms of license ~~and collaboration agreements~~agreement with Genoscience

The Company has entered into a licensing agreement with Genoscience Pharma whereby we are obligated to pay royalties and milestone payments based on future events that are uncertain and therefore they constitute contingent liabilities not recognized in the Company's consolidated financial statements for the period ending December 31, ~~2021.~~2023.

Under the agreement, Genoscience Pharma is eligible for clinical and regulatory milestone payments for up to €50 million and tiered royalties. The first payable milestones are contingent on positive Phase 2 clinical trial results in CCA, and may total up to €20 million, if applicable.

Additional milestones are contingent on positive Phase 3 results. These payments, when due, will be subject to a review to determine if they are eligible for activation pursuant to IAS 38. If so, they will be recorded as capital upon disbursement. Otherwise, they also constitute contingent liabilities which will be recognized when due.

In addition, we also have a right of first negotiation with respect to any license or assignment, or option for a license or an assignment, with any third party to develop or commercialize other Genoscience assets in the field of CCA, to the extent Genoscience is looking to partner the asset with a third party or receives a spontaneous offer for collaboration.

These obligations constitute contingent liabilities not recognized in the Company's consolidated financial statements at December 31, 2022 or December 31, 2023.

•Obligations ~~under~~related to the Versantis acquisition

The company entered into an agreement with the former shareholders of Versantis whereby we are obligated to pay milestone payments based on future events that are uncertain and there therefore they constitute contingent liabilities not recognized in the Company's consolidated financial statements for the period ending December 31, 2023.

Milestone payments total up to 65 million CHF, contingent on the following outcomes:

•positive Phase 2 results related to VS-01-ACLF,

•regulatory approval of VS-01-ACLF, and

•positive Phase 2 results related to VS-02.

Furthermore, the former shareholders of Versantis are eligible to receive 1/3 of the net proceeds resulting from the potential sale of the Priority Review Voucher of VS-01’s pediatric application by GENFIT to a third party, or 1/3 of the fair market value of this Voucher if GENFIT opts to apply it to one of its own programs.

•Obligations related to the licensing agreement with Seal Rock Therapeutics

On May 31, 2023, GENFIT announced the signing of a licensing agreement for the exclusive worldwide rights to the ASK1 inhibitor SRT-015 with Seal Rock Therapeutics, a clinical-stage company based in Seattle, Washington.

Under the terms of ~~lease agreements~~the agreement, Seal Rock is eligible for payments of up to €100 million (of which €2 million have been paid in 2023 ), subject to certain regulatory, clinical and commercial outcomes.

Seal Rock is likewise eligible for tiered royalties, applied to the annual sales of licensed products realized by GENFIT.

F-51

These obligations constitute contingent liabilities not recognized in the Company's consolidated financial statements at December 31, 2023.

•Obligations related to the licensing agreement with Celloram

On July 28, 2023, GENFIT licensed the exclusive worldwide rights to CLM-022, a first-in-class inflammasome inhibitor, from Celloram Inc., a Cleveland-based biotechnology company.

Under the terms of the agreement:

1.Celloram is eligible for payments of up to €160 million (of which €50 have been paid in 2023), subject to certain regulatory, clinical and commercial outcomes.

2.Celloram is likewise eligible for tiered royalties, applied to the annual sales of licensed products realized by GENFIT.

The conditional payments will be subject to analysis when they are incurred to determine if they are eligible for capitalization in accordance with IAS 38. If so, they will be capitalized. Otherwise, they will be expensed as incurred. In addition, a first milestone of €50 was paid in 2023. This milestone was capitalized in the “Intangible assets” line item on the statement of financial position.

These obligations constitute contingent liabilities not recognized in the Company's consolidated financial statements at December 31, 2023.

Contingent Assets

•Contingent assets related to the licensing agreement with IPSEN

In December 2021, GENFIT and Ipsen Pharma SAS ("Ipsen") entered into an exclusive worldwide licensing agreement (except for China, Hong Kong, Taiwan and Macao, which apply to Terns as noted below) for elafibranor, a Phase 3 asset evaluated in Primary Biliary Cholangitis (PBC), as part of a long-term global partnership ("Collaboration and License Agreement"). Under this agreement we could receive milestone payments based on future events that are uncertain and therefore they constitute contingent assets not recognized in the Company's consolidated financial statements for the period ending December 31, 2023.

•GENFIT is also eligible for total milestone payments up to €360 million (of which €13.3 million has been paid in 2024). These milestone payments constitute future variable income, dependent on the completion of key steps related to the development and sales of the licensed products. As such, in accordance with IFRS 15, this income will be recognized as revenue depending on the completion of these milestones. No such milestone payments were made in 2021 or 2022. In 2023, a milestone of €13.3 million was recognized as revenue and is recognized on the balance sheet in Accounts receivable as of December 31, 2023. Furthermore, we expect to receive future milestone revenue in 2024, subject to approval by applicable regulatory authorities and US and European commercial launches of elafibranor in PBC by Ipsen, representing a total of approximately €75.2 million.

•GENFIT is eligible for tiered double-digit royalties of up to 20%, applied to the annual sales of licensed products realized by Ipsen. As such, in accordance with IFRS 15, this income will be recognized as revenue depending on the realization of these sales. No such royalties were earned in 2021, 2022 or 2023.

•Contingent assets related to the licencing agreement with Terns Pharma

The Company ~~has guaranteed its rental payment obligation under~~entered into a licensing agreement with Terns Pharma whereby we could receive milestone payments based on future events that are uncertain and therefore they constitute contingent assets not recognized in the ~~lease agreement~~Company's consolidated financial statements for the ~~headquarters~~period ending December 31, 2023. The licensing agreement with Terns concerns China, Hong Kong, Taiwan and Macao.

Milestones include Development Milestone Payments upon the achievement of the development milestones for the licensed product and Commercial Milestone Payments upon the achievement of commercial milestones depending on reaching certain aggregate thresholds. There are also potential mid-teen royalties based on sales by Terns Pharmaceuticals in ~~Loos, France~~Greater China. The potential Development and Commercial Milestone payments may represent up to $193 million.

30.ACQUISITIONS

Acquisition of the Clinical-stage Biopharmaceutical Company Versantis

On September 19, 2022, the Company announced it had signed an exclusive agreement with Versantis AG ("Versantis") to acquire all the shares and voting rights of Versantis, a private Swiss-based clinical stage biotechnology company focused on addressing the growing unmet medical needs in liver diseases. This acquisition aims at:

F-52

1.Consolidating GENFIT’s position as a leader in acute-on-chronic liver failure (ACLF)

2.Significantly expanding GENFIT’s pipeline with VS-01-ACLF, a Phase 2 ready program based on first-in-class scavenging liposomes technology, VS-01-HAC, a pediatric program focused on Urea Cycle Disorder (UCD), and VS-02-HE, an early-stage program focused on hepatic encephalopathy (HE), and

3.Combining Versantis’ expertise with GENFIT’s know-how in conducting complex development programs in liver diseases, to strengthen and accelerate research and development

The deal closed effective September 29, 2022.

Total purchase price and contingent milestone payments

This transaction includes:

•an initial payment of 40 million CHF (€41.9 million) due and paid at the date of closing,

•a net cash adjustment payment of 2.8 million CHF (€2.9 million) at the end of the year in accordance with the terms of the acquisition agreement

•additional milestone payments of up to 65 million CHF contingent on the following outcomes:

◦positive Phase 2 results related to VS-01-ACLF,

◦regulatory approval of VS-01-ACLF, and

◦positive Phase 2 results related to VS-02.

Acquisition costs totaled €1.8 million.

The impact of this acquisition as reflected within the line item "Acquisition net of cash acquired" in the consolidated statement of cash flows is a net cash outflow of €41.5 million.

Accounting treatment - IFRS 3

Paragraph B7B sets out an optional test (the concentration test) to permit a simplified assessment of whether an acquired set of activities and assets is not a business. An entity may elect to apply, or not apply, the test. The concentration test is met if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets.

GENFIT chose to use the available option stated as per IFRS 3 and perform a concentration test to determine if the transaction qualifies as a business combination or asset acquisition. In accordance with the concentration test methodology as defined in paragraph B7B of IFRS 3, the acquisition of Versantis by GENFIT was determined to be an asset acquisition based on the VS-01-ACLF program because its fair value represents more than 90% of the value of all assets acquired. Therefore, the acquisition costs of €1.8 million were included and capitalized in the total cost of the operation to determine the net book value of the VS-01-ACLF program on the date of the acquisition. Conditional milestone payments were not included in this analysis.

Accounting treatment - IAS 21

Consistent with paragraph 8 of IAS 21, Versantis AG is considered as a foreign operation as its activities are conducted primarily in Swiss Francs. The Swiss Franc is thus also considered to be Versantis AG's functional currency. Versantis AG's subsidiary, Versantis Inc., is considered as a foreign operation as its activities are conducted primarily in US Dollars. The US Dollar is thus considered to be Versantis Inc.'s functional currency. For further information on converting and presenting Versantis' activity in euros, refer to N ote 4.3.2 - "Foreign currency - Translation of foreign subsidiary financial statements ".

Note that on the Consolidated Statements of Other Comprehensive Income and Loss, for the period ending December 31, 2022, on line item "Other comprehensive income (loss) that are or may be reclassified to profit or loss," substantially all of the loss amount of ~~€600 at~~€1.4 million is due to the application of IAS 21 for Versantis.

F-53

Supplementary information

The consolidated value of net assets acquired of Versantis AG and Versantis, Inc. on September 29, 2022 is as follows :


Total acquired assets and liabilities, in thousands of euros			29/9/2022
Cash and cash equivalents			5,076
Current trade and others receivables			209
Other current assets			78
Intangible assets			45,323
Property, plant and equipment			326
Other non-current financial assets			14
Total acquired assets			51,026

Current trade and other payables			3,202
Current provisions			858
Other current tax liabilities			63
Lease liabilities			302
Total acquired liabilities			4,425

Total purchase price			46,601

The exchange rate used above to convert the assets and liabilities of Versantis AG into euros was 1.04843 (1 CHF = 1.04843) on September 29, 2022. The exchange rate used above to convert the assets and liabilities of Versantis, Inc. into euros was 0.9706 (1 USD = 0.9706) on September 29, 2022.

The net book value of assets and liabilities as of December 31, ~~2021, €600 at~~2022 is as follows, per the application of IAS 21:


Net assets, in thousands of euros			31/12/2022
Cash and cash equivalents			2,168
Current trade and others receivables			17
Other current assets			197
Intangible assets			43,850
Property, plant and equipment			295
Other non-current financial assets			13
Total assets			46,540

Current trade and other payables			1,614
Current provisions			672
Other current tax liabilities			33
Lease liabilities			282
Total liabilities			2,601

Net assets			43,939

The exchange rate used above to convert the assets and liabilities of Versantis AG into euros was 1.01554 (1 CHF = 1.01554) on December 31, ~~2020,~~2022. The exchange rate used above to convert the assets and ~~€542 at~~liabilities of Versantis, Inc. into euros was 0.93756 (1 USD = 0.93756) on December 31, ~~2019.~~2022.

Research and development expenses for the period between September 29, 2022 and December 31, 2022 attributable to Versantis total €1,187 thousand. If the acquisition had taken place on January 1, 2022, research and development expenses would have been €5,833 thousand.

General and administrative expenses for the period between September 29, 2022 and December 31, 2022 attributable to Versantis total €228 thousand.

For further information, refer to Note 14 - "Goodwill and Intangible Assets"

~~F-61~~F-54

31.SUPPLEMENTAL CASH FLOW INFORMATION

Supplemental cash flow information

Disclosure of non-cash financing and investing activities

Accrued property, plant and equipment, 2023: €42

Accrued property, plant and equipment, 2022: €142

Accrued property, plant and equipment, 2021: €76

F-55


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
American Depositary Shares, each representing one ordinary share, nominal value €0.25 per share	GNFT	The Nasdaq Global Select Market
Ordinary shares, nominal value €0.25 per share*	*	The Nasdaq Global Select Market*


Large accelerated filer o			Accelerated filer x			Non-accelerated filer o			Emerging growth company x


		Page
PART I
Item 1.	Identity of Director, Senior Management and Advisers.	7
Item 2.	Offer Statistics and Expected Timetable.	7
Item 3.	Key Information.	7
Item 4.	Information on the Company.	4845
Item 5.	Operating and Financial Review and Prospects.	8490
Item 6.	Directors, Senior Management and Employees.	~~100~~103
Item 7.	Major Shareholders and Related Party Transactions.	~~119~~124
Item 8.	Financial Information.	~~123~~128
Item 9.	The Offer and Listing.	~~123~~129
Item 10.	Additional Information.	~~124~~130
Item 11.	Quantitative and Qualitative Disclosures About Market Risk.	~~133~~141
Item 11C.	Interim Periods.	~~134~~143
Item 11D.	Safe Harbor	~~134~~143
Item 12.	Description of Securities Other than Equity Securities.	~~135~~143
PART II
Item 13.	Defaults, Dividend Arrearages and Delinquencies.	~~137~~146
Item 14.	Material Modifications to the Rights of Security Holders and Use of Proceeds.	~~137~~146
Item 15.	Disclosure Controls and Procedures.	~~137~~146
Item 16A.	Audit Committee Financial Expert.	~~138~~147
Item 16B.	Code of Business Conduct and Ethics.	~~138~~147
Item 16C.	Principal Accountant Fees and Services.	~~138~~147
Item 16D.	Exemptions from the Listing Standards for Audit Committees.	~~139~~148
Item 16E.	Purchases of Equity Securities by the Issuer and Affiliated Purchasers.	~~139~~148
Item 16F.	Change in Registrant’s Certifying Accountant.	~~139~~148
Item 16G.	Corporate Governance.	~~139~~149
Item 16H.	Mine Safety Disclosure.	~~140~~150
Item 16I.	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.	~~140~~150
Item 16J.	Insider trading policies	150
Item 16K.	Cybersecurity	150
PART III
Item 17.	Financial Statements.	~~141~~152
Item 18.	Financial Statements.	~~141~~152
Item 19.	Exhibits.	~~141~~152


~~Cholestatic Diseases Franchise~~		~~ACLF Franchise~~	~~Diagnostic Franchise~~
~~Primary Biliary Cholangitis~~	~~Cholangiocarcinoma~~
~~elafibranor - Phase 3 ELATIVE~~	~~GNS561 - Phase 1b/2~~	~~nitazoxanide (NTZ) - Phase 1~~	~~NASH: NIS4 Technology~~


Program	Designation
Elafibranor in PBC	Orphan Drug Designation (FDA, EMA)	Breakthrough Therapy Designation (FDA)
VS-01-ACLF	Orphan Drug Designation (FDA, EMA*)
GNS561 in CCA	Orphan Drug Designation (FDA)
VS-01-HAC**	Orphan Drug Designation (FDA)	Rare Pediatric Disease Designation (FDA)


o			REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934


x			ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


o			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


o			SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
			Date of event requiring this shell company report


†			The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.





	Year ended
(in € thousands)	2019/12/31	2020/12/31	2021/12/31
Cash flows provided by (used in) operating activities	(47,680)	(96,371)	99,915
Cash flows provided by (used in) investment activities	327	(966)	(3,377)
Cash flows provided by (used in) financing activities	116,860	(8,256)	(8,916)
	69,507	(105,593)	87,622


Plan title	AGA D and S 2021		AGA D and S 2022	AGA D and S 2023	AGA D and S 2024
Date of Shareholders' Meeting	November 27, 2019		May 25, 2022	May 25, 2022	March 24, 2023
Date of allocation	March 30, 2021	(S)	October 14, 2022	March 10, 2023	March 5, 2024
	March 17, 2021	(D)
Vesting conditions	(1)		(1)	(1)	(1)
Number of free shares granted to employees	32,400		38,900	30,100	47,900
Number of free shares granted to the Chief Executive Officer:	15,000		20,000	10,000	20,000
–Pascal Prigent	15,000		20,000	10,000	20,000
Vesting date (subject to vesting conditions)	April 1, 2024		October 17, 2025	March 14, 2026	March 16, 2027
Stock price on allocation date	4,00 € (S)		4,08 €	4,05 €	3,19 €
	4,15 € (D)
Number of lapsed or voided shares	21,400		2400	1500	0
Number of free shares vested(2)	26000		0	0	0
Number of outstanding free shares	0		56,500	38,600	67,900


Plan title	SO 2016-1	SO 2016-2	SO 2017-1	SO 2017-2	SO 2018	SO 2019	SO US 2019-2	SO 2020	SO 2021
Meeting date	June 21, 2016	June 21, 2016	June 16, 2017	June 16, 2017	June 15, 2018	June 15, 2018	November 27, 2019	November 27, 2019	June 30, 2021
Dates of allocation	December 15, 2016	December 15, 2016	November 21, 2017	November 21, 2017	November 7, 2018	July 18, 2019	November 27, 2019	December 11, 2020	October 18, 2021 / October 19, 2021
Exercise conditions(1)	1 option / 1 share
Total number of SOs granted	48,917	24,458	72,830	36,420	139,500	138,500	13,350	187,500	201,875
Start date for the exercise of the SOs	December 16, 2019	December 16, 2019	January 1, 2021	January 1, 2021	January 1, 2022	September 17, 2022	January 17, 2023	January 1, 2024	October 19, 2024 / October 20, 2024
SO expiry date	December 16, 2026	December 16, 2026	December 31, 2027	December 31, 2027	December 31, 2028	September 17, 2029	January 17, 2030	January 1, 2031	October 19, 2031 / October 20, 2031
SO exercise price per share	€15.79/€21.12(2)	€15.79/€21.12	€17.91/€22.54(3)	€17.91/€22.54	€16.00/€21.65(4)	€13.99/€16.90(5)	€14.31	€4.52(6)	€2.61/€3.26/€3.22(7)
Number of SO exercised as of December 31, 2021	—	—	—	—	—	—	—	—	—
SO voided or lapsed	14,519	9,150	29,619	18,655	61,458	53,815	13,350	21,250	7,500
SO vested as of December 31, 2021	34,398	15,308	43,212	17,765	78,042	—	—		—
SO remaining to vest as of December 31, 2021	—	—	—	—		84,685	—	166,250	194,375


Plan title	SO 2016-1	SO 2016-2	SO 2017-1	SO 2017-2	SO 2018	SO 2018 US	SO 2019	SO 2019 US	SO 2019 US-2	SO 2020	SO 2020 US
Date of Shareholders' Meeting	June 21, 2016	June 21, 2016	June 16, 2017	June 16, 2017	June 15, 2018	June 15, 2018	June 15, 2018	June 15, 2018	November 27, 2019	November 27, 2019	November 27, 2019
Date of allocation	December 15, 2016	December 15, 2016	November 21, 2017	November 21, 2017	November 7, 2018	November 7, 2018	July 18, 2019	July 18, 2019	November 27, 2019	December 11, 2020	December 11, 2020
Exercise conditions	(1) (2)	(1) (2)	(1) (2)	(1) (2)	(1) (2)	(1) (2)	(1) (2)	(1) (2)	(1) (2)	(1) (2)	(1) (2)
Number of stock options granted to employees	42 250	21 125	61 497	30 753	95 000	17 500	82 750	30 620	13 350	103 750	56,250
Number of stock options granted to the Chief Executive Officer	6,667	3,333	11,333	5,667	27,000	0	25,130	0	0	35,000	0
–Jean-François Mouney	6,667	3,333	11,333	5,667	17,000	0	15,130	0	0	0	0
–Pascal Prigent	0	0	0	0	10,000	0	10,000	0	0	35,000	0
Start date for the exercise of the stock options(3)	December 16, 2019	December 16, 2019	January 1, 2021	January 1, 2021	January 1, 2022	January 1, 2022	September 17, 2022	September 17, 2022	January 17, 2023	December 31, 2023	December 31, 2023
Stock options expiry date	December 16, 2026	December 16, 2026	January 1, 2027	January 1, 2027	January 1, 2028	September 30, 2028	September 17, 2029	September 17, 2029	January 17, 2030	December 31, 2027	December 31, 2027
Stock options exercise price per share(4)	€15.79	€15.79	€17.91	€17.91	€16.00	€21.65	€13.99	€16.90	€14.31	€3.50 (C)	€4.52
										€4.38 (D)
Number of stock options exercised as of April 1, 2024	0	0	0	0	0	0	0	0	0	0	0
Number of lapsed or voided stock options	14,519	9,151	29,618	18,655	53,671	7 787	56,537	25,507	13,350	22,500	28,750
Number of stock options vested	34,398	15,307	43,212	17,765	68,329	9,713	51,343	5,113	0	116,250	27,500
Number of stock options remaining to vest as of April 1, 2024	0	0	0	0	0	0	0	0	0	0	0


Plan title	SO 2021	SO 2021 US	SO 2022	SO US 2022	SO SU 2022	SO 2023	SO US 2023	SO SU 2023	SO 2024	SO US 2024	SO SU 2024
Date of Shareholders' Meeting	June 30, 2021	June 30, 2021	May 25, 2022	May 25, 2022	May 25, 2022	May 25, 2022	May 25, 2022	May 25, 2022	May 24, 2023	May 24, 2023	May 24, 2023
Date of allocation	October 18, 2021	October 18, 2021	October 14, 2022	October 14, 2022	October 14, 2022	March 10, 2023	March 10, 2023	March 10, 2023	March 5, 2024	March 5, 2024	March 5, 2024
Exercise conditions	(1) (2)	(1) (2)	(1) (2)	(1) (2)	(1) (2)	(1) (2)	(1) (2)	(1) (2)	(1) (2)	(1) (2)	(1) (2)
Number of stock options granted to employees	134,375	32,500	131,000	34,625	8,750	108,700	30,200	16,300	156,875	20,625	21,250
Number of stock options granted to the Chief Executive Officer	35,000	0	35,000	0	0	35,000	0	0	35,000	0	0
–Jean-François Mouney	0	0	0	0	0	0	0	0		0	0
–Pascal Prigent	35,000	0	35,000	0	0	35,000	0	0	35,000	0	0
Start date for the exercise of the stock options(3)	October 20, 2024	October 20, 2024	October 18, 2025	October 18, 2025	December 3, 2025	March 14, 2026	March 14, 2026	March 14, 2026	March 16, 2027	March 16, 2027	March 16, 2027
Stock options expiry date	October 20, 2031	October 20, 2031	October 17, 2032	October 17, 2032	December 3, 2032	March 13, 2033	March 13, 2033	March 13, 2033	March 15, 2034	March 15, 2034	March 15, 2034
Stock options exercise price per share(4)	€2.61 (C)	€3.22	€3.12 (C)	€3.94	€2.95	€3.26 (C)	€4.05	€3.26	€2.74 (C)	€3.30	€2.74
	€3.26 (D)		€3.91 (D)			$4.07 (D)			€3.42 (D)
Number of stock options exercised as of April 1, 2024	0	0	0	0	0	0	0	0	0	0	0
Number of lapsed or voided stock options	14,000	7,500	0	0	0	0	0	0	0	0	0
Number of stock options vested	0	0	0	0	0	0	0	0	0	0	0
Number of stock options remaining to vest as of April 1, 2023	155,375	25,000	166,000	34,625	8,750	143,700	30,200	16,300	191,875	20,625	21,250


A.			[Reserved]


B.			Capitalization and Indebtedness


D.			Risk Factors



Plans	Nature of performance conditions
SO D 2020 SO C 2020 SO US 2020 Evaluation date for performance ~~conditions~~conditions: 12/31/2023	~~Nature of internal conditions~~
~~AGA S 2018~~	~~12/31/2021~~	~~The free shares will be definitively allocated upon the same internal performance conditions as the SO 2018, SO US 2018 and AGA D 2018 plans.~~


Plans	Nature of performance conditions
SO D 2021 SO C 2021 SO US 2021 Evaluation date for performance ~~conditions~~conditions: 10/20/2024	~~Nature of internal conditions~~
SO C 2021 SO D 2021 SO US 2021	~~12/21/2023~~	a.a) 50% of the Stock Options will be exercisable if at least one of the following three conditions relating to the development of elafibranor in PBC and to the ~~ELATIVE~~ELATIVE® clinical trial is fulfilled: i.~~ELATIVE~~ (i) ELATIVE® topline results are released to the market before or during the second quarter of 2023; ~~ii.~~ (ii) a new drug application is filed for elafibranor in PBC with the Food and Drug Administration (FDA) or the European Medicines Agency (EMA) in the second half of 2023 or before; ~~iii.~~ (iii) elafibranor is approved by a regulatory authority in 2024. b. b) 15% of the Stock Options will be exercisable if at least one of the following two conditions relating to the development of NTZ and the ACLF franchise is fulfilled: i. (i) a ~~phase~~Phase 2 clinical study or a more advanced clinical study evaluating NTZ is in ongoing or was carried out; ~~ii.~~ (ii) the Company develops or acquires the rights to a new molecule (including through repositioning) for development in ACLF. a. c) 15% of the Stock Options will be exercisable if at least one of the following two conditions relating to the ~~NIS4~~NIS4® diagnostic technology is fulfilled: i. (i) if a research and development partnership agreement relating to the implementation of the ~~NIS4~~NIS4® diagnostic technology into an IVD test with at least one major ~~NASH~~MASH player (“big pharma”, biotech company, institution, etc.) is entered into by the Company; ~~ii.~~ (ii) Labcorp’s ~~NASHnext~~NASHNext® LDT is reimbursed by at least three payers in the United States (insurance, integrated system, etc). a. d) 20% of the Stock Options will be exercisable if at least one of the following two conditions relating to the development of the product pipeline of the Company is fulfilled: i. (i) At least one new molecule (excluding elafibranor and NTZ) is developed by the Company or the Company has acquired development rights to a new molecule outside of the ACLF franchise (performance already covered by b(ii) above); ~~ii.~~ (ii) At least two ~~phase~~Phase 2 clinical studies or more advanced clinical studies are ongoing or have been ~~completed ;~~completed; not including a ~~phase~~Phase 2 clinical study or more advanced clinical study in NTZ (performance already covered by b(i) above).


Plans			Nature of performance conditions
AGA S 2021 AGA D 2021 Evaluation date for performance conditions: 3/31/2024			Internal conditions - a) 50% of the Free Shares AGA S 2021 will be exercisable, and 7,500 of the Free Shares AGA D 2021 will be exercisable, if at least one of the following three conditions relating to PBC and ELATIVE® is fulfilled: (i) “Last Patient Visit” in ELATIVE® in the fourth quarter of 2022 or earlier; (ii) If the results of ELATIVE® are released to the market before or during the first half of 2023; (iii) if a registration request is filed for elafibranor in PBC with the Food and Drug Administration (FDA) or the European Medicines Agency (EMA) in 2023. b) 25% of the Free Shares AGA S 2021 will be exercisable, and 3,750 of the Free Shares AGA D 2021 will be exercisable, if at least one of the following two conditions relating to the NIS4® diagnostic is fulfilled: (i) if a research and development partnership agreement with at least one major MASH player (“big pharma”, biotech company, institution, etc.) is entered into by the Company; (ii) the NIS4® diagnostic is used in at least 20 clinical studies. c) 25% of the Free Shares AGA S 2021 will be exercisable, and 3,750 of the Free Shares AGA D 2021 will be exercisable, if at least one of the following two conditions relating to the product pipeline of the Company is fulfilled: (i) initiation of a clinical study for a new indication with elafibranor or NTZ; (ii) if the Company develops or acquires the rights to a new molecule. External conditions - Each applicable portion of all 15,000 Free Shares under the AGA D 2022 plan, as each Internal Conditions above is met, is then subject to the External Condition according to the methods described below. The degree of fulfillment of the External Condition relating to the Company's stock market price will be determined according to the relative performance of GENFIT shares. Each applicable portion of all 15,000 Free Shares under the AGA D 2021 plan, as each Internal Conditions above is met, will be definitively acquired per the following conditions: (a) No AGA D 2021 shall vest if the Final Price is strictly lower than the Initial Price; (b) If the Final Price is between (i) a value equal to or greater than the Initial Price and (ii) a value lower than the Ceiling Price, the number of AGA D 2021 definitively allocated will be equal to:[(Final Price / Initial Price) -1] x 1/2 of the number of AGA D 2021 instruments (c) All AGA D 2021 if the Final Price is equal to or higher than the Ceiling Price. The notions of “Final Price”, “Initial Price” and “Ceiling Price” are defined in the plan regulations.



Plans			Nature of performance conditions
SO D 2022 SO C 2022 SO US 2022 SO SU 2022 AGA S 2022 AGA D 2022 Evaluation date for performance conditions: - 10/17/2025 for SO D 2022/SO C 2022/SO US 2022/AGA S 2022/ AGA D 2022 - 12/3/2025 for SO SU 2022			Internal conditions - a) 50% of the instruments SO D 2022/SO C 2022/SO US 2022/ SO SU 2022/AGA S 2022 will be exercisable or definitively vest, and 10,000 of the Free Shares for the AGA D 2022 will vest, if during the 2022 financial year and then at any time during the Vesting Period, 3 new R&D programs (at the rate of one third of these 2022 instruments per new program) complete the Company's R&D program portfolio (as it was at 12/31/2021); that these programs are at the so-called clinical development stage when this addition is made or that they reach this stage afterwards and that this addition originates: (i) a business-development operation (licensing-in, M&A, etc.), or (ii) the identification of new opportunities resulting from internal research (repositioning). b) 25% of the instruments SO D 2022/SO C 2022/SO US 2022/ SO SU 2022/AGA S 2022 will be exercisable or definitively vest, and 5,000 of the Free Shares for the AGA D 2022 will vest, if at least one of the following three conditions relating to the development of the elafibranor development program is fulfilled: (i) obtaining the main results of the first part of the ELATIVE® trial in the second quarter of 2023; (ii) filing of a Marketing Authorization Application for elafibranor in the second half of 2023; (iii) marketing authorization for elafibranor in 2024. c) 15% of the instruments SO D 2022/SO C 2022/SO US 2022/ SO SU 2022/AGA S 2022 will be exercisable or definitively vest, and 3,000 of the Free Shares for the AGA D 2022 will vest, if at least one of the following two conditions relating to the development of the NTZ program in the ACLF is fulfilled: (i) First clinical results in 2022; (ii) start of a Phase 2 clinical trial in the first half of 2023. d) 10% of instruments SO D 2022/SO C 2022/SO US 2022/ SO SU 2022/AGA S 2022 will be exercisable or definitively vest, and 2,000 of the Free Shares for the AGA D 2022 will vest, if as part of the development of the GNS561 program, a Phase 2b trial starts in the first half of 2023. External conditions - Each applicable portion of all 20,000 Free Shares under the AGA D 2022 plan, as each Internal Conditions above is met, is then subject to the External Condition according to the methods described below. The degree of fulfillment of the External Condition relating to the Company's stock market price will be determined according to the relative performance of GENFIT shares. Each applicable portion of all 20,000 Free Shares under the AGA D 2022 plan, as each Internal Conditions above is met, will be definitively acquired per the following conditions: (a) No AGA D 2022 shall vest if the Final Price is strictly lower than the Initial Price; (b) If the Final Price is between (i) a value equal to or greater than the Initial Price and (ii) a value lower than the Ceiling Price, the number of AGA D 2022 definitively allocated will be equal to:[(Final Price / Initial Price) -1] x 1/2 of the number of AGA D 2022 instruments (c) All AGA D 2022 if the Final Price is equal to or higher than the Ceiling Price. The notions of “Final Price”, “Initial Price” and “Ceiling Price” are defined in the plan regulations.


Plans	Nature of ~~internal~~performance conditions
~~AGA D2021~~SO D 2023 SO C 2023 SO US 2023 SO SU 2023 AGA S ~~2021~~2023 AGA D 2023 Evaluation date for performance conditions: 3/13/2026	~~3/31/2024~~Internal conditions	~~The free shares~~ - a) 50% of the instruments SO D 2023/SO C 2023/SO US 2023/ SO SU 2023/AGA S 2023 will be exercisable or definitively vest, ~~upon~~and 5,000 of the ~~same internal performance conditions as~~Free Shares for the AGA D 2023 will be vest, if during 2023 and then at any time during the Vesting Period, 2 new R&D programs (at the rate of one-half of these 2023 instruments per new program), join the Company’s R&D pipeline (as evaluated at December 31, 2022) ; and that these programs are at the clinical development stage at the time they join the pipeline or that they later enter this stage, following: (i) A business development transaction (in-licensing, M&A, etc.) or, (ii) Identification of new opportunities resulting from in-house research (program going from preclinical development stage to clinical development stage). b) 25% of the instruments SO ~~2020 and~~ D 2023/SO C 2023/SO US ~~2020 Plans..~~2023/ SO SU 2023/AGA S 2023 will be exercisable or definitively vest, and 2,500 of the Free Shares for the AGA D 2023 will vest, if at least one of the two following conditions related to development of elafibranor in PBC is met: (i) Filing of the Marketing Authorization Application in the fourth quarter of 2023 (in Europe or the United States); (ii) Marketing Authorization obtained in 2024 (in Europe or the United States). c) 15% of the instruments SO D 2023/SO C 2023/SO US 2023/ SO SU 2023/AGA S 2023 will be exercisable or definitively vest, and 1,500 of the Free Shares for the AGA D 2023 will vest, if at least one of the two following conditions related to the development of the ACLF program is met: (i) VS-01 in ACLF: top-line results from the Phase 2 study obtained in 2024 or communication of final results on the Phase 2 study in 2025; (ii) NTZ : start of a Phase 2 clinical trial in the second half of 2023. d) 10% of the instruments SO D 2023/SO C 2023/SO US 2023/ SO SU 2023/AGA S 2023 will be exercisable or definitively vest, and 1,000 of the Free Shares for the AGA D 2023 will vest, if intermediate results in the Phase 1b/2 of GNS561 are obtained in the fourth quarter 2024 or final results obtained in 2025. External conditions - Each applicable portion of all 10,000 Free Shares under the AGA D 2023 plan, as each Internal Conditions above is met, is then subject to the External Condition according to the methods described below. The degree of fulfillment of the External Condition relating to the Company's stock market price will be determined according to the relative performance of GENFIT shares. Each applicable portion of all 10,000 Free Shares under the AGA D 2023 plan, as each Internal Conditions above is met, will be definitively acquired per the following conditions: (a) No AGA D 2023 shall vest if the Final Price is strictly lower than the Initial Price; (b) If the Final Price is between (i) a value equal to or greater than the Initial Price and (ii) a value lower than the Ceiling Price, the number of AGA D 2023 definitively allocated will be equal to:[(Final Price / Initial Price) -1] x the number of AGA D 2023 instruments (c) All AGA D 2023 if the Final Price is equal to or higher than the Ceiling Price. The notions of “Final Price”, “Initial Price” and “Ceiling Price” are defined in the plan regulations.


Plans			Nature of performance conditions
SO D 2024 SO C 2024 SO US 2024 SO SU 2024 AGA S 2024 AGA D 2024 Evaluation date for performance conditions: 3/15/2027			Internal conditions - a) 10% of the instruments SO D 2024/SO C 2024/SO US 2024/ SO SU 2024/AGA S 2024 will be exercisable or definitively vest, and 1,000 of the Free Shares for the AGA D 2024 will be vest, if elafibranor obtains marketing authorization from the FDA or EMA in accordance with the road map. b) 30% of the instruments SO D 2024/SO C 2024/SO US 2024/ SO SU 2024/AGA S 2024 will be exercisable or definitively vest, and 3,000 of the Free Shares for the AGA D 2024 will vest, if at least one of the three following conditions relating to the development of VS-01 is met: (i) Interim results of the UNVEIL-IT® study are obtained in accordance with the road map; (ii) Final results of the UNVEIL-IT® study are obtained in accordance with the road map; (iii) Positive clinical results obtained and communicated in at least one ACLF sub-population or ACLF-related indication in accordance with the road map. c) 10% of the instruments SO D 2024/SO C 2024/SO US 2024/ SO SU 2024/AGA S 2024 will be exercisable or definitively vest, and 1,000 of the Free Shares for the AGA D 2024 will vest, if at least one of the two following conditions relating to the development of GNS561 is met: (i) Interim biomarker data from the ongoing phase 1b/2 is obtained in accordance with the road map; (ii) Final results for the Phase 1b part of the Phase 1b/2 study are obtained in accordance with the road map. d) 15% of the instruments SO D 2024/SO C 2024/SO US 2024/ SO SU 2024/AGA S 2024 will be exercisable or definitively vest, and 1,500 of the Free Shares for the AGA D 2024 will vest, if at least one of the three following conditions relating to the development of NTZ and SRT-015 is met: (i) Start of a phase 1b/2 study of NTZ in ACLF in accordance with the road map; (ii) Final results of a phase 1b/2 study of NTZ in ACLF in accordance with the road map and finalization of preclinical development of SRT-015 in 2024 which would allow, as necessary, the start of a first in human study of SRT-015 in accordance with the road map; (iii) Results of the first in human study of SRT-015 in accordance with the road map. e) 10% of the instruments SO D 2024/SO C 2024/SO US 2024/ SO SU 2024/AGA S 2024 will be exercisable or definitively vest, and 1,000 of the Free Shares for the AGA D 2024 will vest, if, with respect to one of the other programs in the Company’s pipeline in preclinical development at the time of this allocation decision (VS01 UCD/OA, VS02, CLM-022, …), at least one clinical trial is ongoing in accordance with the road map. f) 25% of the instruments SO D 2024/SO C 2024/SO US 2024/ SO SU 2024/AGA S 2024 will be exercisable or definitively vest, and 2,500 of the Free Shares for the AGA D 2024 will vest, if, at any time during the Vesting Period, two of the programs in the Company's pipeline at the date of the Grant Decision have delivered clinical results in humans enabling them to be considered for further development, resulting in the initiation of a phase 2b clinical trial or a phase 3 clinical trial, or the granting of accelerated approval. External conditions - Each applicable portion of all 10,000 Free Shares under the AGA D 2024 plan, as each Internal Conditions above is met, is then subject to the External Condition according to the methods described below. The degree of fulfillment of the External Condition relating to the Company's stock market price will be determined according to the relative performance of GENFIT shares. Each applicable portion of all 10,000 Free Shares under the AGA D 2024 plan, as each Internal Conditions above is met, will be definitively acquired per the following conditions: (a) No AGA D 2024 shall vest if the Final Price is strictly lower than the Initial Price; (b) If the Final Price is between (i) a value equal to or greater than the Initial Price and (ii) a value lower than the Ceiling Price, the number of AGA D 2024 definitively allocated will be equal to:[(Final Price / Initial Price) -1] x 1/2 of the number of AGA D 2024 instruments (c) All AGA D 2024 if the Final Price is equal to or higher than the Ceiling Price. The notions of “Final Price”, “Initial Price” and “Ceiling Price” are defined in the plan regulations.


			CURRENT POSITION	YEAR OF INITIAL APPOINTMENT		TERM EXPIRATION YEAR
		CURRENT POSITION							CURRENT POSITION			YEAR OF INITIAL APPOINTMENT			TERM EXPIRATION YEAR
Jean-François Mouney	Jean-François Mouney		Chairman	1999	(1)	2022	Jean-François Mouney	Chairman		1999	(1)		2027
Xavier Guille des Buttes	Xavier Guille des Buttes		Vice Chairman	2006	(2)	2022	Xavier Guille des Buttes	Vice Chairman		2006	(2)		2027
Eric Baclet	Eric Baclet		Director	2020		2025	Eric Baclet	Director		2020				2025
Frédéric Desdouits			Director	2014	(3)	2022
IPSEN, represented by Dr. Sandra Silvestri							IPSEN, represented by Dr. Sandra Silvestri	Director		2022				2027
Katherine Kalin	Katherine Kalin		Director	2020		2025	Katherine Kalin	Director		2020				2025
Catherine Larue	Catherine Larue		Director	2017		2022	Catherine Larue	Director		2017				2027
Anne-Hélène Monsellato	Anne-Hélène Monsellato		Director	2017		2022	Anne-Hélène Monsellato	Director		2017				2027
Philippe Moons	Philippe Moons		Observer	2015	(4)	2022	Philippe Moons	Observer		2015	(3)		2027
SAS Biotech Avenir represented by Florence Séjourné			Director	2010	(5)	2022
Biotech Avenir SAS represented by Florence Séjourné							Biotech Avenir SAS represented by Florence Séjourné	Director		2010	(4)		2027
Jean-François Tiné	Jean-François Tiné		Director	2020	(6)	2022	Jean-François Tiné	Director		2020	(5)		2027


F.			Disclosure of a registrant’s action to recover erroneously awarded compensation


Name of Beneficial Owner	Number of Ordinary Shares		Percentage

Significant Shareholders:
Biotech Avenir SAS(1)	1,888,618	1	3.79%
Ipsen Pharma SAS	3,985,239
Directors and Senior Management:
Jean-François Mouney(2)	1,945,453		3.91%
Pascal Prigent(3)	27,403		*
Dean Hum, Ph.D(4)	33,303		*
Carol Addy	0		—
Jean-Christophe Marcoux(5)	14,822		*
Laurent Lannoo(6)	23,637		*
Thomas Baetz	0		—
Pascal Caisey	0		—
Philippe Motté	0		—
Stefanie Magner(7)	12,758		*
Emilie Desodt (8)	3,305		*
John Brozek (9)	1,701		*
Xavier Guille Des Buttes(10)	6,842		*


Detail of calculation of net cash
Detail of calculation of net cash
Detail of calculation of net cash	Detail of calculation of net cash	As of				As of
(in € thousands)	(in € thousands)	2019/12/31	2020/12/31	2021/12/31	(in € thousands)		2021/12/31	2022/12/31	2023/12/31
Cash and cash equivalents	Cash and cash equivalents	276,748	171,029	258,756	Cash and cash equivalents		258,756	136,001	77,789
Current convertible loans	Current convertible loans	1,312	1,312	415	Current convertible loans		415	415	415
Other current loans and borrowings	Other current loans and borrowings	3,226	3,035	1,773	Other current loans and borrowings		1,773	4,665	7,510
Non-current convertible loans	Non-current convertible loans	164,142	169,470	47,682	Non-current convertible loans		47,682	49,861	52,206
Other non-current loans and borrowings	Other non-current loans and borrowings	14,939	11,873	24,365	Other non-current loans and borrowings		24,365	20,334	10,047
Net cash	Net cash	93,129	(14,662)	184,521	Net cash		184,521	60,726	7,610


Persons depositing or withdrawing ordinary shares or ADS holders must pay:						For:
$5.00 (or less) per 100 ADSs (or portion of 100 ADSs)						• Issuance of ADSs, including issuances resulting from a distribution of ordinary shares or rights or other property • Cancellation of ADSs for the purpose of withdrawal, including if the deposit agreement terminates
$.05 (or less) per ADS						• Any cash distribution to ADS holders
A fee equivalent to the fee that would be payable if securities distributed to you had been ordinary shares and the ordinary shares had been deposited for issuance of ADSs						• Distribution of securities distributed to holders of deposited securities (including rights) that are distributed by the depositary to ADS holders
$.05 (or less) per ADS per calendar year						• Depositary services
Registration or transfer fees						• Transfer and registration of ordinary shares on our share register to or from the name of the depositary or its agent when you deposit or withdraw ordinary shares
Expenses of the depositary						• Cable (including SWIFT) and facsimile transmissions (when expressly provided in the deposit agreement) • Converting foreign currency to U.S. dollars
Taxes and other governmental charges the depositary or the custodian has to pay on any ADSs or ordinary shares underlying ADSs, such as stock transfer taxes, stamp duty or withholding taxes						• As necessary
Any charges incurred by the depositary or its agents for servicing the deposited securities						• As necessary


B.			Management’s Annual Report on Internal Control Over Financial Reporting


C.			Attestation Report of the Registered Public Accounting Firm


Auditor Name	Auditor Location	Auditor Firm ID
Ernst & Young et Autres	Paris, France	1704


†			Indicates a management contract or any compensatory plan, contract or arrangement.


#			Certain portions of this exhibit have been omitted because they are not material and would likely cause competitive harm to the registrant if disclosed.


						GENFIT S.A.

			By:			/s/ Pascal Prigent
						Pascal Prigent
						Chief Executive Officer


			Page
Consolidated Financial Statements ~~as of and~~ for ~~the Years Ended~~ December 31, ~~2019, 2020, 2021~~2023
Report of Ernst & Young et Autres, Independent Registered Public Accounting Firm			F-1
Consolidated Statements of Financial Position ~~as of December 31,~~ ~~2019, 2020, 2021~~			F-3
Consolidated Statements of Operations ~~for the Years Ended December 31,~~ ~~2019, 2020, 2021~~			F-4
Consolidated Statements of Other Comprehensive ~~Loss for the Years Ended December 31,~~ Income (Loss)~~2019, 2020, 2021~~			F-5
Consolidated Statements of Cash Flows ~~for the Years Ended December 31,~~ ~~2019, 2020, 2021~~			F-6
Consolidated Statements of Changes in Equity ~~for the Years Ended December 31,~~ ~~2019, 2020, 2021~~			F-7
Notes to the Consolidated Financial Statements			F-8





SHAREHOLDERS' EQUITY AND LIABILITIES	Notes	As of
(in € thousands)		2019/12/31	2020/12/31	2021/12/31
Current liabilities
Current convertible loans	12	1,312	1,312	415
Other current loans and borrowings	12	3,226	3,035	1,773
Current trade and other payables	14	36,917	25,564	40,988
Current deferred income and revenue	15	139	124	14,298
Current provisions	16	2,061	1,031	313

Other current tax liabilities	22	—	—	5,051
Total - Current liabilities		43,657	31,067	62,837
Non-current liabilities
Non-current convertible loans	12	164,142	169,470	47,682
Other non-current loans and borrowings	12	14,939	11,873	24,365
Non-current trade and other payables	14	450	450	450
Non-current deferred income and revenue	15	—	—	25,821

Non-current employee benefits	17	1,408	922	864
Deferred tax liabilities	22	1,193	767	602
Total - Non-current liabilities		182,132	183,482	99,786
Shareholders' equity
Share capital	18	9,715	9,722	12,454
Share premium	—	377,821	379,057	444,438
Retained earnings (accumulated deficit)	18	(238,340)	(303,897)	(405,076)
Currency translation adjustment	—	14	(92)	22
Net profit (loss)	—	(65,144)	(101,221)	67,259
Total shareholders' equity - Group share		84,065	(16,430)	119,097
Non-controlling interests	—	—	—	—
Total - Shareholders' equity		84,065	(16,430)	119,097
Total - Shareholders' equity & liabilities		309,853	198,119	281,720





	Share capital		Share	Treasury	Retained	Currency	Net	Total	Non-	Total
	Number	Share	premium	shares	earnings	translation	profit	shareholders'	controlling	shareholders'
	of shares	capital			(accumulated	adjustment	(loss)	equity	interests	equity
(in € thousands)					deficit)			Group share

As of January 01, 2019	31,183,921	7,796	251,554	(730)	(158,167)	6	(79,521)	20,939	—	20,939
Net profit (loss)							(65,144)	(65,144)		(65,144)
Other comprehensive income (loss)					(168)	8		(160)		(160)
Total comprehensive income (loss)	0	—	—	—	(168)	8	(65,144)	(65,304)	—	(65,304)
Allocation of prior period profit (loss)					(79,521)		79,521	—		—
Capital increase	7,674,696	1,919	124,567		(7)			126,479		126,479

Share-based compensation			1,657					1,657		1,657
Treasury shares				252				252		252
Other movements			43					43		43
As of December 31, 2019	38,858,617	9,715	377,821	(478)	(237,862)	14	(65,144)	84,065	—	84,065
Net profit (loss)							(101,221)	(101,221)		(101,221)
Other comprehensive income (loss)					196	(106)		90		90
Total comprehensive income (loss)	—	—	—	—	196	(106)	(101,221)	(101,131)	—	(101,131)
Allocation of prior period profit (loss)					(65,144)		65,144	—		—
Capital increase	29,762	7	—		(7)			—		—

Share-based compensation			1,236					1,236		1,236
Treasury shares				(333)				(333)		(333)
Other movements			—		(268)			(268)		(268)
As of December 31, 2020	38,888,379	9,722	379,057	(811)	(303,086)	(92)	(101,221)	(16,430)	—	(16,430)
Net profit (loss)							67,259	67,259		67,259
Other comprehensive income (loss)					216	113		330		330
Total comprehensive income (loss)	—	—	—	—	216	113	67,259	67,589	—	67,589
Allocation of prior period profit (loss)					(101,221)		101,221	—		—
Capital increase	10,927,110	2,732	62,600		—			65,332		65,332
Equity component of OCEANE net of deferred taxes			2,311					2,311		2,311
Share-based compensation			470					470		470
Treasury shares				(174)				(174)		(174)
Other movements			—					—		—
As of December 31, 2021	49,815,489	12,454	444,438	(986)	(404,090)	22	67,259	119,097	—	119,097