What happened

Genfit (NASDAQ:GNFT), a late-stage biopharmaceutical company, reported some disappointing news on Monday regarding one of its leading pipeline candidates, Elafibranor. As a result, the company's stock is falling off a cliff today. Genfit's shares are down by 65.2% as of 12:46 p.m. EDT on Tuesday. 

So what

Elafibranor is an investigational treatment for a liver disease called Nonalcoholic steatohepatitis, or NASH for short. Interim analysis of RESOLVE-IT -- a phase 3 clinical trial evaluating Elafibranor in NASH patients -- showed that the treatment failed to achieve statistically significant NASH resolution without worsening of fibrosis (scarring in the lungs) at week 72, which was the primary endpoint of the study.

Man holding his head in panic with a downward-pointing graph in the background.

Image Source: Getty Images.

Specifically, the response rate for NASH patients who were treated with Elafibranor was 19.2%, while the response rate in the placebo arm was 14.7%. Further, Elafibranor did not achieve the study's secondary endpoint, which included fibrosis improvement, among other parameters; 24.5% of the patients receiving treatment achieved fibrosis improvement of at least one stage. By comparison, 22.4% of those in the placebo arm achieved fibrosis improvement. Genfit plans to work with regulatory authorities to "determine a final decision regarding the continuation of the RESOLVE-IT trial."

Now what

In response to these results, Pascal Prigent, CEO of Genfit, said the following: "These results are highly disappointing, not only for the Genfit team, but also for patients and healthcare providers as there continues to be considerable unmet medical need in the NASH space."

The results were also disappointing to shareholders who had high hopes for Genfit's Elafibranor. With Genfit having no drugs currently on the market and one of its leading pipeline candidates flunking in a pivotal trial, it isn't surprising that shareholders sold off shares of the pharma company. After today's plunge, Genfit's stock is down by 62.2% year to date.