F-1/A 1 a2241977zf-1a.htm F-1/A

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As filed with the United States Securities and Exchange Commission on July 6, 2020.

Registration No. 333-239312


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549



Amendment No. 1
to

FORM F-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933



Inventiva S.A.
(Exact name of registrant as specified in its charter)



France
(State or other jurisdiction of
incorporation or organization)
  2834
(Primary Standard Industrial
Classification Code Number)
  Not applicable
(I.R.S. Employer
Identification Number)

Inventiva S.A.
50 rue de Dijon
21121 Daix France
+33 3 80 44 75 00

(Address, including zip code, and telephone number, including area code, of registrant's principal executive offices)



Cogency Global Inc.
122 East 42nd Street,
18th Floor
New York, NY 10168
+1 800 221-0102

(Name, address, including zip code, and telephone number, including area code, of agent for service)



Copies to:

Divakar Gupta
Richard Segal
Alison Haggerty
Cooley LLP
55 Hudson Yards
New York, New York 10001
+1 212 479 6000

 

Arnaud Duhamel
Gide Loyrette Nouel A.A.R.P.I.
15 rue de Laborde
75008 Paris France
+33 1 40 75 60 00

 

Deanna Kirkpatrick
Yasin Keshvargar
Davis Polk & Wardwell LLP
450 Lexington Avenue
New York, New York 10017
+1 212 450-4000

 

Jacques Naquet-Radiguet
Davis Polk & Wardwell LLP
121 Avenue des Champs-Élysées
75008 Paris France
+33 1 56 59 36 00



Approximate date of commencement of proposed sale to the public: As soon as practicable after this registration statement becomes effective.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act, check the following box.    o

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933.

Emerging growth company    ý

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act.    o



CALCULATION OF REGISTRATION FEE

       
 
Title of each class of securities
to be registered(1)

  Proposed maximum
aggregate offering
price(2)(3)(4)

  Amount of
registration fee(5)

 

Ordinary shares, nominal value €0.01 per share

  $117,648,000   $15,271

 

(1)
Ordinary shares may be represented by American Depositary Shares, or ADSs. Each ADS represents one ordinary share. ADSs issuable upon deposit of the ordinary shares registered hereby have been registered pursuant to a separate registration statement on Form F-6 (File No. 333-239477).

(2)
Includes additional ordinary shares (including in the form of ADSs) that the underwriters have the option to purchase.

(3)
Includes ordinary shares that are being offered in countries outside of the United States, or the European offering, but which may be resold from time to time in the United States in transactions requiring registration under the Securities Act of 1933, as amended, or the Securities Act, or an exemption therefrom. The total number of ordinary shares in the U.S. offering and the European offering is subject to reallocation between them.

(4)
Estimated solely for the purpose of computing the amount of the registration fee pursuant to Rule 457(o) under the Securities Act.

(5)
Of this amount, $11,700 of this registration fee was previously paid.



The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the registration statement shall become effective on such date as the Securities and Exchange Commission acting pursuant to said Section 8(a), may determine.

   


Table of Contents

The information contained in this preliminary prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

Subject to completion, dated July 6, 2020

PRELIMINARY PROSPECTUS

7,478,261 ordinary shares

(consisting of                    ordinary shares in the form of American Depositary Shares to be sold in the United States and                    ordinary shares to be sold outside of the United States)

LOGO

We are offering 7,478,261 ordinary shares, nominal value €0.01 per share, in a global offering. We are offering                    ordinary shares in the form of American Depositary Shares, or ADSs, in the United States, which we refer to as the U.S. offering. Each ADS represents the right to receive one ordinary share and the ADSs may be evidenced by American Depositary Receipts, or ADRs. We are concurrently offering                    ordinary shares outside the United States in an offering exclusively addressed to "qualified investors," as such term is defined in Regulation (EU) No. 2017/1129, through certain of the underwriters named in this prospectus, which we refer to as the European offering.

This is our initial public offering of our ADSs, and no public market exists for our ADSs. We have applied to list our ADSs on the Nasdaq Global Market under the symbol "IVA." Our ordinary shares are listed on Euronext Paris under the symbol "IVA." On July 3, 2020, the closing price of our ordinary shares on Euronext Paris was €12.16 per ordinary share, equivalent to a price of $13.68 per ADS, assuming an exchange rate of €0.8891 per U.S. dollar, based on the exchange rate on July 3, 2020. The final offering price per ADS in U.S. dollars and the corresponding offering price per ordinary share in euros will be determined through negotiations between us and the representatives of the underwriters, and by reference to the prevailing market prices of our ordinary shares on Euronext Paris after taking into account market conditions and other factors. However, in accordance with French law and the shareholders' resolutions applicable to this offering, such prices will not be lower than 10% below the volume-weighted average closing price of our ordinary shares on Euronext Paris for the three trading days preceding the appropriate reference date.

We are an "emerging growth company" as that term is used in the Jumpstart Our Business Startups Act of 2012 and, as such, have elected to comply with certain reduced public company reporting requirements.

Investing in our ordinary shares and ADSs involves a high degree of risk. See "Risk Factors" beginning on page 13.


 
  Per ordinary share   Per ADS   Total  

Offering price

    €             $              $             

Underwriting commission(1)

    €             $     $    

Proceeds, before expenses, to Inventiva

    €             $     $    

(1)
See "Underwriting" for additional details regarding underwriter compensation.

We have granted the underwriters an option to purchase up to an additional                    ADSs from us in the U.S. offering at the public offering price, for 30 days after the date of this prospectus. We have also granted the underwriters an option to purchase up to an additional                    ordinary shares from us in the European offering, at the offering price for 30 days after the date of this prospectus.

The total number of ordinary shares (including ordinary shares in the form of ADSs) to be sold in the U.S. offering and the European offering (including upon exercise of the underwriters' option to purchase additional ordinary shares and ADSs) is subject to reallocation between them.

Neither the U.S. Securities and Exchange Commission nor any other regulatory body has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.

The underwriters expect to deliver the ADSs and ordinary shares to purchasers on or about                    , 2020, which is the third business day following the expected date of initial trading of the ADSs. Under Rule 15c6-1 of the Securities Exchange Act of 1934, trades in the secondary market generally are required to settle in two business days unless the parties to any such trade expressly agree otherwise. Accordingly, purchasers who wish to trade the ADSs on the expected date of initial trading of the ADSs will be required to specify an alternate settlement cycle at the time of any such trade to prevent failed settlement and should consult their own advisers.

Jefferies   Stifel   Guggenheim Securities

 

H.C. Wainwright & Co.

Roth Capital Partners

 

KBC Securities

   

Prospectus dated                    , 2020


TABLE OF CONTENTS


 
  Page

Prospectus Summary

  1

Risk Factors

  13

Special Note Regarding Forward-Looking Statements

  74

Use of Proceeds

  76

Dividend Policy

  78

Capitalization

  79

Dilution

  81

Selected Financial Data

  83

Management's Discussion and Analysis of Financial Condition and Results of Operations

  85

Business

  101

Management

  146

Certain Relationships and Related Person Transactions

  160

Principal Shareholders

  163

Description of Share Capital

  165

Limitations Affecting Shareholders of a French Company

  187

Description of American Depositary Shares

  189

Shares and ADSs Eligible for Future Sale

  199

Material U.S. Federal Income and French Tax Considerations

  201

Enforcement of Civil Liabilities

  210

Underwriting

  211

Expenses Relating to this Offering

  220

Legal Matters

  220

Experts

  220

Where You can Find More Information

  220

Index to Financial Statements

  F-1

We have not, and the underwriters have not, authorized any person to provide you with information different from that contained in this prospectus or any related free-writing prospectus that we authorize to be distributed to you. We take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. You should not assume that the information contained in this prospectus is accurate as of any date other than the date on the front cover of this prospectus, regardless of the time of delivery of this prospectus or the sale of any ordinary shares and ADSs.

For investors outside the United States: Neither we nor any of the underwriters have done anything that would permit this offering or possession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than in the United States. Persons outside the United States who come into possession of this prospectus must inform themselves about, and observe any restrictions relating to, the offering of our ordinary shares and ADSs and the distribution of this prospectus outside the United States.

We are incorporated in France, and a majority of our outstanding securities are owned by non-U.S. residents. Under the rules of the Securities and Exchange Commission, or SEC, we are currently eligible for treatment as a "foreign private issuer." As a foreign private issuer, we will not be required to file periodic reports and financial statements with the SEC as frequently or as promptly as domestic registrants whose securities are registered under the Securities Exchange Act of 1934, as amended, or the Exchange Act.

i


Our financial statements included in this prospectus are presented in euros and, unless otherwise specified, all monetary amounts are in euros. All references in this prospectus to "$," "US$," "U.S.$," "U.S. dollars," "dollars" and "USD" mean U.S. dollars and all references to "€" and "euros," mean euros, unless otherwise noted. Throughout this prospectus, references to ADSs mean ADSs or ordinary shares represented by such ADSs, as the case may be.

Through and including                        , 2020 (the 25th day after the date of this prospectus), all dealers that effect transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers' obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.


MARKET, INDUSTRY AND OTHER DATA

Unless otherwise indicated, information contained in this prospectus concerning our industry and the markets in which we operate, including our general expectations and market position, market opportunity and market size estimates, is based on information from independent industry analysts, third-party sources and management estimates. Management estimates are derived from publicly-available information released by independent industry analysts and third-party sources, as well as data from our internal research, and are based on assumptions made by us based on such data and our knowledge of such industry and market, which we believe to be reasonable. In addition, while we believe the market opportunity information included in this prospectus is generally reliable and is based on reasonable assumptions, such data involves risks and uncertainties and is subject to change based on various factors, including those discussed under the heading "Risk Factors."


TRADEMARKS AND SERVICE MARKS

"INVENTIVA," "PanNASH" and the Inventiva logo appearing in this prospectus are the property of Inventiva S.A. Solely for convenience, the trademarks, service marks and trade names referred to in this prospectus are listed without the ® and ™ symbols, but such references should not be construed as any indicator that their respective owners will not assert, to the fullest extent under applicable law, their right thereto. All other trademarks, trade names and service marks appearing in this prospectus are the property of their respective owners. We do not intend to use or display other companies' trademarks and trade names to imply any relationship with, or endorsement or sponsorship of us by, any other companies.

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PROSPECTUS SUMMARY

The following summary highlights information contained elsewhere in this prospectus and does not contain all of the information you should consider before investing in our ordinary shares (including ordinary shares in the form of ADSs). You should read the entire prospectus carefully, including "Risk Factors" and our financial statements and the related notes appearing elsewhere in this prospectus. You should carefully consider, among other things, the matters discussed in the sections of this prospectus titled "Business" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" before making an investment decision. Unless otherwise indicated, "Inventiva," "the company," "our company," "we," "us" and "our" refer to Inventiva S.A.

Overview

We are a clinical-stage biopharmaceutical company focused on the development of oral small molecule therapies for the treatment of non-alcoholic steatohepatitis, or NASH, mucopolysaccharidoses, or MPS, and other diseases with significant unmet medical need. We have built a pipeline backed by a discovery engine with an extensive library of proprietary molecules, a wholly-owned research and development facility and a team with significant expertise and experience in the development of compounds that target nuclear receptors, transcription factors and epigenetic modulation. Leveraging these assets and expertise, we are advancing two clinical candidates, lanifibranor and odiparcil, for the treatment of NASH and MPS, respectively, as well as a deep pipeline of earlier stage programs in oncology and other diseases with significant unmet medical need.

    §
    Lanifibranor for the Treatment of NASH.  We are developing our lead product candidate, lanifibranor, for the treatment of patients with NASH, a progressive, chronic liver disease for which there are currently no approved therapies. NASH is believed to affect 12% of the United States population and is a leading cause of cirrhosis, liver transplantation and liver cancer. Compared to the general population, patients with NASH have a ten-fold greater risk of liver-related mortality. NASH is characterized by a metabolic process known as steatosis, or the excessive accumulation of fat in the liver, inflammation and ballooning of liver cells and progressive liver fibrosis that can ultimately lead to cirrhosis. Lanifibranor is an orally-available small molecule in development for the treatment of NASH that acts to induce anti-fibrotic, anti-inflammatory and beneficial vascular and metabolic changes in the body by activating all three peroxisome proliferator-activated receptor, or PPAR, isoforms. PPARs are well-characterized nuclear receptor proteins that regulate gene expression, and their relevance for the fibrotic, inflammatory, vascular and metabolic processes that characterize NASH is well-established. While there are other PPAR agonists that target only one or two PPAR isoforms, lanifibranor is the only pan-PPAR agonist in clinical development. We believe that this pan-PPAR approach provides for a combination of anti-fibrotic, anti-inflammatory and beneficial vascular and metabolic effects that cannot be obtained with single and dual PPAR agonists. In June 2020, we announced positive topline results from our NATIVE Phase IIb clinical trial of lanifibranor in patients with NASH. In this trial, treatment with lanifibranor at a dose of 1,200 mg met the primary endpoint of a reduction in inflammation and ballooning with no worsening of fibrosis after 24 weeks of treatment, while continuing to show the favorable tolerability profile observed in prior clinical trials of lanifibranor. Treatment with lanifibranor at doses of 800 mg and 1,200 mg also met the key secondary endpoints of resolution of NASH with no worsening of fibrosis and, at the 1,200 mg dose, of improvement in liver fibrosis without worsening NASH, which are the primary endpoints relevant for seeking accelerated approval from the U.S. Food and Drug Administration, or FDA, and the European Medical Agency, or EMA, after future Phase III development. In light of these positive results, we plan to advance lanifibranor, either alone or together with a collaborator, into pivotal development after end of Phase IIb meetings with the FDA and scientific advice meetings with the EMA, which are expected to take place in the fourth quarter of 2020. Lanifibranor has received fast track designation from the FDA for the treatment of NASH.

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    §
    Odiparcil for the Treatment of MPS.  Our second clinical-stage asset is odiparcil, which we are developing for the treatment of patients with MPS, a group of rare genetic disorders characterized by an excessive accumulation of large sugar chains, known as glycosaminoglycans, or GAGs, in cells. Odiparcil is an orally-available small molecule designed to modify how GAGs are synthesized. Odiparcil acts to facilitate the production of soluble GAGs that can be excreted in the urine, rather than accumulating in cells. The current standard of care for the treatment of patients with MPS is enzyme replacement therapy, or ERT, which requires weekly infusions and is generally administered in an outpatient hospital setting. While ERT has been shown to be effective in reducing GAG accumulation in certain tissue types, it has shown limited efficacy in reducing GAG accumulation in poorly vascularized tissues and organs, such as cartilage, or in tissues that are protected by a barrier, such as the eye. Unlike ERT, odiparcil is a small molecule that we have observed to be well distributed in the body, even in certain tissues that are poorly vascularized or protected by a barrier. In December 2019, we announced positive results from a Phase IIa clinical trial of odiparcil for the treatment of adult patients with the MPS VI subtype. In this trial, we observed that odiparcil, in combination with ERT, was associated with improvements in corneal clouding and cardiac and respiratory function and exhibited a favorable tolerability profile. Signals of clinical activity were also detected in patients treated only with odiparcil. Because MPS is a progressive disease, we believe there is benefit in treating pediatric patients with MPS, and we plan to commence a Phase Ib/II clinical trial of odiparcil in a pediatric population with MPS VI in the first half of 2021. If the results of this pediatric trial are favorable, we plan to initiate Phase III clinical development of odiparcil as a monotherapy and in combination with ERT for the treatment of adult and pediatric patients with MPS VI. In addition, we plan to initiate an open label Phase IIa extension study in the first half of 2021 to investigate the long-term safety and efficacy of odiparcil in patients 16 years and above with MPS VI who completed the prior Phase IIa trial. We believe odiparcil's mechanism of action is relevant to a number of MPS subtypes, and we also plan to initiate pivotal trials for the treatment of one or more of MPS subtypes I, II, IVa and VII. Odiparcil has received orphan drug designation from the FDA and EMA and rare pediatric disease designation from the FDA for the treatment of MPS VI.

    §
    Discovery Engine.  We have a scientific team of approximately 70 people with deep biology, medicinal and computational chemistry, pharmacokinetics and pharmacology expertise, more than 75% of whom have worked together for more than 15 years. We also own a library of approximately 240,000 pharmacologically relevant molecules, 60% of which are proprietary, as well as a wholly-owned research and development facility. Using these assets and this expertise, we have built a discovery engine focused on small molecule compounds that target nuclear receptors, transcription factors and epigenetic modulation. We are leveraging this discovery engine to identify and develop compounds addressing a wide range of indications. Our Hippo signaling pathway program aims to disrupt the interaction between yes-associated protein, or YAP, and transcription enhancer associated domain transcription factors, or TEAD, an interaction that plays a key role in oncogenic and fibrotic processes. In xenograft and orthotopic models of malignant pleural mesothelioma, or MPM, we observed that YAP-TEAD inhibition was associated with reduced tumor growth and we are in the process of selecting development candidate for our Hippo program, which we anticipate entering pre-clinical development in 2021 for the treatment of non-small cell lung cancer and mesothelioma. We are also advancing a pre-clinical program for the treatment of idiopathic pulmonary fibrosis, or IPF, and have validated a new target within the transforming growth factor beta, or TGF-b, signaling pathway.

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Our Pipeline

We have leveraged our assets and expertise to advance the development of multiple, novel and differentiated oral small molecule therapies. The following table summarizes our key candidates and programs:

GRAPHIC


*
In addition to our wholly-owned programs, AbbVie Inc., or AbbVie, is currently investigating ABBV-157, a RORg inverse agonist that we and AbbVie jointly discovered, in a Phase I clinical trial for the treatment of moderate to severe psoriasis under the terms of our multi-year drug discovery collaboration.

**
Lead generation means identifying molecules in anticipation of selecting candidates.

Lanifibranor for the Treatment of NASH

Lanifibranor is an orally-available small molecule in development for the treatment of NASH that acts to induce anti-fibrotic, anti-inflammatory and beneficial vascular and metabolic changes in the body by activating each of the three PPAR isoforms, known as PPARa, PPARd and PPARg. PPARs are ligand-activated transcription factors belonging to the nuclear hormone receptor family that regulate the expression of genes. PPARs play essential roles in the regulation of cellular differentiation, development and tumorigenesis, and their relevance to different aspects of the fibrotic, inflammatory, vascular and metabolic processes that characterize NASH is well-established.

Lanifibranor is a PPAR agonist that is designed to target all three PPAR isoforms in a moderately potent manner, with a well-balanced activation of PPARa and PPARd, and a partial activation of PPARg. While there are other PPAR agonists that target only one or two PPAR isoforms, lanifibranor is the only pan-PPAR agonist in clinical development. We believe that this pan-PPAR approach provides for a combination of anti-fibrotic, anti-inflammatory and beneficial vascular and metabolic effects that cannot be obtained with single and dual PPAR agonists. In pre-clinical studies, we observed that the administration of lanifibranor improved insulin sensitivity and lipid profile, reduced nonalcoholic fatty liver disease activity score, reversed liver fibrosis and reduced portal pressure. Further, in clinical trials in type 2 diabetes conducted prior to our founding, the administration of lanifibranor was associated with favorable anti-inflammatory effects, including increased levels of adiponectin, which inhibits the release of cytokines and other pro-inflammatory proteins. Lanifibranor was also associated with favorable metabolic effects, including improvements in insulin sensitivity, reductions in levels of triglycerides, which are a type of fat, and increases in high-density lipoprotein, or HDL, cholesterol levels. We believe lanifibranor's moderate and balanced pan-PPAR binding profile also contributes to the favorable tolerability profile that has been observed in clinical trials and

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pre-clinical studies to date. Over 250 patients were treated for 24 or 48 weeks in our Phase IIb clinical trials of lanifibranor, including our recently completed NATIVE trial in patients with NASH and a previous trial in another indication. In these trials, lanifibranor showed a favorable tolerability profile. In addition, in connection with these trials, lanifibranor underwent a total of seven data and safety monitoring board, or DSMB, reviews, and the DSMBs did not recommend any changes to the trial protocols. In addition, prior to inception of Inventiva, lanifibranor was administered to over 150 subjects in clinical trials in type 2 diabetes and exhibited a favorable tolerability profile, including with respect to key markers of liver, kidney, heart, muscle and bone function. By contrast, single and dual PPAR agonists, which generally target PPAR isoforms in a very potent and imbalanced manner, have historically been associated with toxicity and adverse effects.

In June 2020, we announced positive topline results from our NATIVE Phase IIb clinical trial of lanifibranor in patients with NASH. In light of these positive results, we plan to advance lanifibranor, either alone or together with a collaborator, into pivotal Phase III clinical development after end of Phase IIb meetings with the FDA and scientific advice meetings with the EMA, which are expected to take place in the fourth quarter of 2020. Lanifibranor has received fast track designation from the FDA for the treatment of NASH.

Odiparcil for the Treatment of MPS

We are developing odiparcil for the treatment of patients with several subtypes of MPS. Odiparcil is an orally-available small molecule that acts on the underlying cause of the symptoms of MPS, which is the accumulation of GAGs in cells due to deficient lysosomal enzymes. By modifying how GAGs are synthesized, odiparcil facilitates the production of soluble GAGs that can be excreted in the urine, rather than accumulating in cells. In pre-clinical studies, we have observed that odiparcil reduced accumulation of two specific GAGs, chondroitin sulfate, or CS, and dermatan sulfate, or DS, in several organs and tissues. ERT is the current standard of care for the treatment of patients with MPS but requires weekly infusions and is generally administered in an outpatient hospital setting. Furthermore, while ERT has been shown to be effective in reducing GAG accumulation in some tissue types, it has shown limited efficacy in reducing GAG accumulation in tissues that are poorly vascularized or protected by a barrier. By contrast, we have observed, in pre-clinical studies, that odiparcil is well distributed in the body, including in cartilage and the eye, which are tissues that are poorly penetrated by ERT and in which MPS symptoms often manifest. Because odiparcil has a different mechanism of action than ERT and reaches tissues that are poorly penetrated by ERT, we believe odiparcil could be used as a combination therapy with ERT. Based on our pre-clinical data, we also believe odiparcil has potential as a stand-alone therapy.

MPS is separated into subtypes, depending on the lysosomal enzyme that is deficient and the corresponding GAGs that accumulate. One or both of CS and DS, the GAGs on which odiparcil acts, accumulate in patients with MPS I, II, IVa, VI and VII. To date, we have focused development of odiparcil on the treatment of patients with MPS VI, which is characterized by rounded and thickened facial features, corneal clouding, hearing loss, dwarfism with deformity of the limbs, enlargement of the liver and spleen, cardiac valve disease and reduced pulmonary function, and an approximate life expectancy of 20 years for untreated patients with severe forms of the disease. In an MPS VI model using a mouse that was genetically modified to reflect human MPS pathology, we observed that administration of odiparcil reduced GAG accumulation in organs and tissues and improved mobility. Prior to our founding, odiparcil was administered to over 1,800 subjects in clinical trials in an unrelated indication and was reported to be well tolerated and exhibited a favorable safety profile at daily doses in excess of the therapeutic range.

In December 2019, we announced positive results from the iMProveS Phase IIa clinical trial of odiparcil, which enrolled twenty patients, aged 16 years or older, with the MPS VI subtype. Fifteen patients were randomized to receive baseline ERT in combination with one of two doses of odiparcil, 250 mg or 500 mg administered twice daily, or placebo. Five patients who were not receiving ERT received 500 mg of odiparcil administered twice daily in an open label cohort. After 26 weeks of treatment, we observed that odiparcil in combination with ERT was associated with improvements in corneal clouding and cardiac and respiratory function and exhibited a favorable tolerability profile. Signals of clinical activity were also detected in

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patients treated only with odiparcil. We observed improved mobility as assessed using the six minute walk test, or 6MWT, in patients treated with ERT and the 250mg twice daily dose of odiparcil, as well as in patients in the open label cohort. We did not observe improved mobility using the 6MWT in patients treated with ERT and the 500mg twice daily dose of odiparcil. Dose-dependent urinary GAGs clearance, used as an activity biomarker, was observed in the entire odiparcil-treated patient population. A reduction in leukocyte GAGs was not observed and therefore was not confirmed as a biomarker for the decrease of GAG accumulation. The trial also met its safety primary endpoint with odiparcil exhibiting a favorable tolerability profile. Because MPS is a progressive disease, we believe there is benefit in treating pediatric patients with MPS, and we plan to commence a Phase Ib/II clinical trial of odiparcil in a pediatric population with MPS VI in the first half of 2021. If the results of this pediatric trial are favorable, we plan to initiate Phase III clinical development of odiparcil as a monotherapy and in combination with ERT for the treatment of adult and pediatric patients with MPS VI. In addition, we plan to initiate an open label Phase IIa extension study in the first half of 2021 to investigate the long-term safety and efficacy of odiparcil in patients 16 years and above with MPS VI who completed the prior Phase IIa trial. Because odiparcil targets GAGs that are also present in other MPS subtypes, we believe that the data generated in the iMProveS trial may also support moving directly to Phase III pivotal trials in other MPS subtypes that are characterized by the accumulation of CS or DS. Odiparcil has received orphan drug designation from the FDA and EMA and rare pediatric disease designation from the FDA for the treatment of MPS VI.

Our Strategy

Our goal is to rapidly deliver multiple, novel and differentiated oral small molecule therapies to patients suffering from NASH, MPS, cancer and other diseases with significant unmet medical need. To achieve our goal, we are pursuing the following strategies:

    §
    Demonstrate the safety and efficacy of lanifibranor in the treatment of NASH in pivotal trials.

    §
    Rapidly advance odiparcil to pivotal trials in the treatment of MPS VI.

    §
    Leverage the power of our discovery engine to identify and advance additional novel programs in areas with high unmet medical need.

    §
    Selectively seek strategic collaborations to maximize the value of our assets.

Selected Risks Affecting Our Business

Investing in our securities involves risk. You should carefully consider all the information in this prospectus prior to investing in our securities. These risks are discussed more fully in the section titled "Risk Factors" immediately following this prospectus summary. These risks and uncertainties include, but are not limited to, the following:

    §
    We are a clinical-stage company with no approved products and no historical product revenues, which makes it difficult to assess our future prospects and financial results.

    §
    We have incurred significant losses since our inception and anticipate that we will continue to incur significant losses for the foreseeable future.

    §
    We will require substantial additional funding, which may not be available to us on acceptable terms, or at all.

    §
    We are heavily dependent on the success of our product candidates lanifibranor and odiparcil. We cannot give any assurance that any product candidate, or any other compounds in development, will successfully complete clinical trials, receive regulatory approval or be commercialized.

    §
    The regulatory approval processes of the FDA, the EMA and other comparable regulatory authorities are lengthy, time consuming and inherently unpredictable.

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    §
    Results of earlier studies and trials as well as data from any interim analysis of ongoing clinical trials may not be predictive of future trial results.

    §
    We face significant competition for our drug discovery and development efforts, and if we do not compete effectively, our commercial opportunities will be reduced or eliminated.

    §
    Even if any of our product candidates are commercialized, they may not be accepted by physicians, healthcare payors, patients or the medical community in general.

    §
    We do not have composition of matter patent protection with respect to odiparcil.

    §
    Developments in patent law could have a negative impact on our business.

    §
    Our international operations subject us to various risks, and our failure to manage these risks could adversely affect our results of operations.

    §
    Business and clinical trial interruptions resulting from public health emergencies, including those related to the COVID-19 pandemic.

    §
    We currently have no marketing and sales organization. To the extent any of our product candidates for which we maintain commercial rights is approved for marketing, if we are unable to establish marketing and sales capabilities or enter into agreements with third parties to market and sell our product candidates, we may not be able to effectively market and sell any product candidates or generate product revenues.

    §
    After this offering, voting control with respect to our company will remain concentrated in the hands of Frédéric Cren, our Chief Executive Officer, Pierre Broqua, our Deputy Chief Executive Officer and Chief Scientific Officer, and our significant shareholders and affiliates, who will continue to be able to exercise significant influence on us.

    §
    We are a French public limited company, and the rights of shareholders in companies subject to French corporate law differ in material respects from the rights of shareholders of corporations incorporated in the United States.

Recent Developments

The following preliminary financial information as of June 30, 2020 is based upon our estimates and subject to completion of our financial closing procedures. Moreover, this data has been prepared solely on the basis of currently available information by, and is the responsibility of, Inventiva. KPMG S.A., our independent registered public accounting firm, has not audited or reviewed, and does not express an opinion with respect to, this data. This information is not a comprehensive statement of our financial results for this period, and our actual results may differ materially from these estimates due to the completion of our financial closing procedures, final adjustments, completion of the review of our financial statements and other developments that may arise between now and the time the review of our financial statements is completed. Our actual results as of June 30, 2020 will not be available until after this offering is completed. There can be no assurance that these estimates will be realized, and estimates are subject to risks and uncertainties, many of which are not within our control. See "Risk factors" and "Special note regarding forward-looking statements" elsewhere in this prospectus.

As of June 30, 2020, our cash and cash equivalents were €52.2 million, compared to €46.9 million as of March 31, 2020 and €35.8 million as of December 31, 2019. We expect that the net proceeds from this offering, together with our existing cash and cash equivalents, will enable us to fund our operating expenses and capital expenditure requirements at least through the fourth quarter of 2022.

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Implications of Being an Emerging Growth Company

We qualify as an "emerging growth company" as defined in the U.S. Jumpstart Our Business Startups Act of 2012, or the JOBS Act. As an emerging growth company, we may take advantage of specified reduced disclosure and other requirements that are otherwise applicable generally to public companies. These provisions include:

    §
    the ability to present only two years of audited financial statements in addition to any required interim financial statements and only two years of related Management's Discussion and Analysis of Financial Condition and Results of Operations in the registration statement for our initial public offering of our ADSs;

    §
    not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act; and

    §
    to the extent that we no longer qualify as a foreign private issuer, (1) reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements and (2) exemptions from the requirements of holding a non-binding advisory vote on executive compensation, including golden parachute compensation.

We may take advantage of these provisions for up to five years from the initial public offering of our ADSs or such earlier time that we no longer qualify as an emerging growth company. We would cease to be an emerging growth company upon the earliest to occur of the following: (1) if we have more than $1.07 billion in total annual gross revenue, (2) if we have more than $700 million in market value of our capital stock held by non-affiliates or (3) if we issue more than $1.0 billion of non-convertible debt over a three-year period. We may choose to take advantage of some but not all of these reduced burdens. For example, we have presented only two years of audited financial statements and only two years of related Management's Discussion and Analysis of Financial Condition and Results of Operations disclosure in this prospectus, and plan to take advantage of the exemption from auditor attestation on the effectiveness of our internal control over financial reporting. To the extent that we take advantage of these reduced burdens, the information that we provide shareholders may be different than you might obtain from other public companies in which you hold equity interests.

In addition, under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards until such time as those standards apply to private companies. Since International Financial Reporting Standards make no distinction between public and private companies for purposes of compliance with new or revised accounting standards, the requirements for our compliance as a private company and as a public company are the same.

Implications of Being a Foreign Private Issuer

We are also considered a "foreign private issuer" under U.S. securities laws. In our capacity as a foreign private issuer, we are exempt from certain rules under the U.S. Securities Exchange Act of 1934, as amended, or the Exchange Act, that impose certain disclosure obligations and procedural requirements for proxy solicitations under Section 14 of the Exchange Act. In addition, our officers, directors and principal shareholders are exempt from the reporting and "short-swing" profit recovery provisions of Section 16 of the Exchange Act and the rules under the Exchange Act with respect to their purchases and sales of our securities. Moreover, we are not required to file periodic reports and financial statements with the SEC as frequently or as promptly as U.S. companies whose securities are registered under the Exchange Act. In addition, we are not required to comply with Regulation FD, which restricts the selective disclosure of material information.

We may take advantage of these exemptions until such time as we are no longer a foreign private issuer. We will remain a foreign private issuer until such time that more than 50% of our outstanding voting securities are held by U.S. residents and any of the following three circumstances applies: (1) the majority of our

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executive officers or directors are U.S. citizens or residents; (2) more than 50% of our assets are located in the United States; or (3) our business is administered principally in the United States.

We have taken advantage of certain reduced reporting and other requirements in this prospectus. Accordingly, the information contained herein may be different from the information you receive from other public companies in which you hold equity securities.

Corporate Information

We were founded in 2011 and incorporated as a société anonyme, or S.A., in 2016. Our principal executive offices are located at 50 rue de Dijon, 21121 Daix, France. We are registered at the Dijon Trade and Companies Register (Registre du commerce et des sociétés) under the number 537 530 255. In February 2017, we completed the initial public offering of our ordinary shares on Euronext Paris, raising €48.5 million in gross proceeds. Our telephone number at our principal executive offices is +33 3 80 44 75 00. Our agent for service of process in the United States is Cogency Global Inc., 10 East 40th Street, 10th Floor, New York, New York 10016. Our website address is www.inventivapharma.com. The reference to our website is an inactive textual reference only and information contained in, or that can be accessed through, our website is not part of this prospectus.

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The Offering

Global offering

  7,478,261 ordinary shares offered by us, consisting of                        ordinary shares represented by American depositary shares, or ADSs, offered in the U.S. offering and                        ordinary shares offered in the European offering. The total number of ordinary shares to be sold in the U.S. offering and European offering is subject to reallocation between these offerings.

ADSs offered by us in the U.S.
offering

 

                        ADSs, representing                        ordinary shares.

Ordinary shares offered by us in the European offering

 

                        ordinary shares.

Option to purchase additional shares in the Global Offering

 

1,121,739 ordinary shares offered by us, consisting of                         ordinary shares represented by American depositary shares, or ADSs, offered in the U.S. offering and                         ordinary shares offered in the European offering. The total number of ordinary shares to be sold in the U.S. offering and European offering is subject to reallocation between these offerings.

Offering price

 

The final offering price per ADS in U.S. dollars and the corresponding offering price per ordinary share in euros will be determined through negotiations between us and the representatives of the underwriters, and by reference to the prevailing market prices of our ordinary shares on Euronext Paris after taking into account market conditions and other factors. However, in accordance with French law and the shareholders' resolutions applicable to this offering, such prices will not be lower than 10% below the volume-weighted average closing price of our ordinary shares on Euronext Paris for the three trading days preceding the appropriate reference date.

Ordinary shares (including ordinary shares underlying ADSs) to be outstanding after the global offering

 

38,166,011 ordinary shares (39,287,750 ordinary shares if the underwriters' option to purchase additional ordinary shares (which may be in the form of ADSs) is exercised in full).

American Depositary Shares

 

Each ADS represents one ordinary share, nominal value €0.01 per share. Purchasers of ADSs will have the rights of an ADS holder as provided in the deposit agreement among us, the depositary and all holders and beneficial owners of ADSs issued thereunder. To better understand the terms of the ADSs, purchasers of ADSs should carefully read the section in this prospectus titled "Description of American Depositary Shares." We also encourage purchasers of ADSs to read the deposit agreement, which is filed as an exhibit to the registration statement that includes this prospectus.

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Depositary

 

The Bank of New York Mellon.

Use of proceeds

 

We estimate that we will receive net proceeds from this global offering of approximately $92.1 (€81.9) million, assuming an offering price of $13.68 per ADS in the U.S. offering and €12.16 per ordinary share in the European offering, based on the closing price of our ordinary shares on Euronext Paris (expressed in U.S. dollars, as applicable) on July 3, 2020, after deducting underwriting commissions and estimated offering expenses payable by us. We intend to use the net proceeds from this offering to initiate and progress clinical trials and pre-clinical studies and for working capital and general corporate purposes. See "Use of Proceeds" for more information.

Dividend policy

 

We do not expect to pay any dividends on our ordinary shares or ADSs in the foreseeable future.

Risk factors

 

You should read the "Risk Factors" section of this prospectus for a discussion of factors to consider carefully before deciding to invest in our ordinary shares or ADSs.

Proposed Nasdaq Global Market symbol for our ADSs

 

"IVA"

Euronext Paris trading symbol for our ordinary shares

 

"IVA"

The number of ordinary shares (including ordinary shares underlying ADSs) that will be outstanding after this offering is based on 30,687,750 ordinary shares outstanding as of March 31, 2020 and excludes:

    §
    320,800 ordinary shares issuable upon the exercise of founder's share warrants (bons de souscription de parts de créateur d'entreprise) and share warrants (bons de souscription d'actions) outstanding as of March 31, 2020 at a weighted average exercise price of €5.72 per ordinary share ($6.31 per ordinary share based on the exchange rate of €0.907 per U.S. dollar in effect as of March 31, 2020);

    §
    484,350 ordinary shares issuable upon the vesting of free shares (actions gratuites) outstanding as of March 31, 2020; and

    §
    26,000,000 ordinary shares reserved for future issuance under our share-based compensation plans and other delegations of authority from our shareholders.

Except as otherwise noted, the information in this prospectus assumes no exercise by the underwriters of their option to purchase ordinary shares or ADSs in this offering and no exercise of warrants or vesting of free shares or other equity awards subsequent to March 31, 2020.

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SUMMARY FINANCIAL DATA

The following summary statement of income (loss) data for the years ended December 31, 2018 and 2019 and summary statement of financial position data as of December 31, 2019 have been derived from our audited financial statements included elsewhere in this prospectus. Our audited financial statements have been prepared in accordance with International Financial Reporting Standards, or IFRS, as issued by the International Accounting Standards Board.

The following summary condensed statement of income (loss) data for the three months ended March 31, 2019 and 2020 and summary condensed statement of financial position data as of March 31, 2020 have been derived from our unaudited interim condensed financial statements as of March 30, 2020 and for the three months ended March 31, 2019 and 2020 included elsewhere in this prospectus. The unaudited interim condensed financial statements as of March 31, 2020 and for the three months ended March 31, 2019 and 2020 were prepared in accordance with IAS 34, Interim Financial Reporting, the standard of IFRS applicable to interim financial statements.

Our historical results and the results for the three months ended March 31, 2020 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2020 or in the future. You should read this summary data together with our financial statements and related notes beginning on page F-1 of this prospectus, as well as the sections of this prospectus titled "Selected Financial Data" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" and the other financial information included elsewhere in this prospectus.

Summary Statement of Income (Loss) Data:


 
  Year ended December 31,   Three Months ended March 31,  
 
  2018   2019   2019   2020  
 
  (in thousands, except share and per share data)
 

Revenues

  3,197   6,998   1,027   87  

Other income

    4,182     4,293     1,227     858  

Total revenues and other income

    7,379     11,291     2,255     945  

Operating expenses:

                         

Research and development expenses

    (31,758 )   (33,791 )   (10,123 )   (6,059 )

Marketing — Business development expenses

    (225 )   (249 )   (71 )   (65 )

General and administrative expenses

    (6,045 )   (6,088 )   (1,671 )   (1,546 )

Other operating income (expense)

    (2,255 )   (1,475 )   (77 )   (81 )

Total operating expenses

    (40,282 )   (41,603 )   (11,942 )   (7,751 )

Operating profit (loss)

    (32,903 )   (30,312 )   (9,688 )   (6,805 )

Financial income (loss)

    (111 )   93     (2 )   7  

Income tax

                 

Net loss for the period

  (33,014 ) (30,218 )   (9,690 )   (6,798 )

Basic/diluted loss per share

  (1.61 ) (1.28 )   (0.44 )   (0.23 )

Weighted average number of outstanding shares used for computing basic/ diluted loss per share

    20,540,979     23,519,897     22,180,834     29,033,063  

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Summary Statement of Financial Position Data:


 
  As of March 31, 2020  
 
  Actual   As adjusted(1)(2)  
 
  (in thousands)
 

Cash and cash equivalents

    €46,893   128,818  

Total assets

    65,203     147,128  

Total liabilities

    15,730     15,730  

Total shareholders' equity

    49,473     131,398  

(1)
The as adjusted summary statement of financial position data reflects our issuance and sale of a total of 7,478,261 ordinary shares (consisting of                          ADSs and                        ordinary shares) in the global offering at an assumed offering price of $13.68 per ADS in the U.S. offering and €12.16 per ordinary share in the European offering, based on the closing price of our ordinary shares on Euronext Paris (expressed in U.S. dollars, as applicable) on July 3, 2020, after deducting underwriting commissions and estimated offering expenses payable by us.

(2)
The as adjusted summary statement of financial position data is illustrative only and will change based on the actual offering price and other terms of the offering determined at pricing. Each $1.00 (€0.8891) increase or decrease in the assumed offering price of $13.68 per ADS in the U.S. offering and €12.16 per ordinary share in the European offering would increase or decrease the as adjusted amount of each of cash and cash equivalents, total assets and total shareholders' equity by approximately €6.2 million, assuming that the number of ADSs and ordinary shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting underwriting commissions and estimated offering expenses payable by us. We may also increase or decrease the number of ordinary shares (including ordinary shares in the form of ADSs) we are offering. Each increase or decrease of 1,000,000 ordinary shares (including ordinary shares in the form of ADSs) offered by us would increase or decrease the as adjusted amount of each of cash and cash equivalents, total assets and total shareholders' equity by €11.3 million, assuming that the assumed offering price remains the same, and after deducting underwriting commissions and estimated offering expenses payable by us.

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RISK FACTORS

Investing in our ordinary shares or ADSs involves a high degree of risk. You should carefully consider the following risks and all other information contained in this prospectus, including our financial statements and the related notes, before making an investment decision regarding our securities. The risks and uncertainties described below are those significant risk factors, currently known and specific to us, that we believe are relevant to an investment in our securities. If any of these risks materialize, our business, financial condition or results of operations could suffer, the price of our ordinary shares or ADSs could decline and you could lose part or all of your investment.

Risks related to our Financial Position and Need for Additional Capital

We are a clinical-stage company with no approved products and no historical product revenues, which makes it difficult to assess our future prospects and financial results.

We are a clinical-stage biotechnology company and we have not yet generated any revenue from product sales. Pharmaceutical product development is a highly speculative undertaking and involves a substantial degree of uncertainty. Our operations to date have been limited to developing our technology and undertaking clinical trials of our product candidates lanifibranor and odiparcil, and pre-clinical and clinical studies of other compounds in development. Lanifibranor and odiparcil are in clinical development and have not been approved for sale and we may never have any product approved for commercialization. We have not yet demonstrated an ability to overcome many of the risks and uncertainties frequently encountered by companies in new and rapidly evolving fields, particularly in the pharmaceutical area. Consequently, the ability to predict our future operating results or business prospects is more limited than if we had a longer operating history or approved products on the market.

Our ability to generate revenue from product sales and achieve and maintain profitability depends on our ability, alone or with any future collaborators, to successfully complete the development of, and obtain the regulatory approvals necessary to commercialize, lanifibranor, odiparcil and any additional product candidates that we may pursue in the future. Currently, lanifibranor and odiparcil are our only product candidates in clinical development. Our prospects, including our ability to finance our operations and generate revenue from product sales, therefore will depend substantially on the development and commercialization of lanifibranor and odiparcil, as other programs in our pre-clinical portfolio are still in earlier stages of development. Since our inception in 2011, the majority of our revenue has been derived from our reliance on research collaborations unrelated to lanifibranor or odiparcil, and we do not anticipate generating revenue from product sales for the next several years, if ever. Our ability to generate revenue from product sales depends heavily on our or any future collaborators' success in:

    §
    timely and successful completion of clinical development of lanifibranor and odiparcil, our current clinical-stage product candidates;

    §
    obtaining and maintaining regulatory and marketing approvals for lanifibranor, odiparcil and any future product candidates for which we successfully complete clinical trials;

    §
    launching and commercializing any product candidates for which we obtain regulatory and marketing approval by establishing a sales force, marketing and distribution infrastructure or, alternatively, collaborating with a commercialization partner;

    §
    obtaining coverage and adequate reimbursement from government and third-party payors for our current or any future product candidates, if approved, both in the United States and internationally, and reaching acceptable agreements with foreign government and third-party payors on pricing terms;

    §
    developing, validating and maintaining a commercially viable, sustainable, scalable, reproducible and transferable manufacturing process for lanifibranor, odiparcil or any future product candidates that are compliant with current good manufacturing practices, or cGMP;

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    §
    establishing and maintaining supply and manufacturing relationships with third parties that can provide an adequate amount and quality of drugs and services to support our planned clinical development, as well as the market demand for lanifibranor, odiparcil and any future product candidates, if approved;

    §
    obtaining market acceptance, if and when approved, of lanifibranor, odiparcil or any future product candidates as a viable treatment option by physicians, patients, third-party payors and others in the medical community;

    §
    effectively addressing any competing technological and market developments;

    §
    implementing additional internal systems and infrastructure, as needed;

    §
    negotiating favorable terms in any collaboration, licensing or other arrangements into which we may enter, and performing our obligations pursuant to such arrangements;

    §
    maintaining, protecting and expanding our portfolio of intellectual property rights, including patents, trade secrets and know-how;

    §
    avoiding and defending against third-party interference or infringement claims; and

    §
    attracting, hiring and retaining qualified personnel.

We have incurred significant losses since our inception and anticipate that we will continue to incur significant losses for the foreseeable future. We have never generated any revenue from product sales and may never achieve or maintain profitability.

We have incurred significant operating losses since our inception in 2011. We incurred net losses of €33.0 million, €30.2 million and €6.8 million for the years ended December 31, 2018 and 2019 and the three months ended March 31, 2020, respectively. We expect to continue to incur significant expenses and increasing operating losses for the foreseeable future. We have devoted substantially all of our efforts to acquisition and pre-clinical and clinical development of our product candidates, as well as to building our intellectual property portfolio, research programs, management team and infrastructure. It could be several years, if ever, before we or our collaborators have a commercialized product and our commercialized products, if any, may not be profitable. The net losses we incur may fluctuate significantly from quarter to quarter and year to year. We anticipate that our expenses will increase significantly in connection with our ongoing activities as we:

    §
    continue the ongoing and planned clinical development of lanifibranor and odiparcil;

    §
    initiate pre-clinical studies and clinical trials with respect to our other development programs;

    §
    develop, maintain, expand and protect our intellectual property portfolio;

    §
    manufacture, or have manufactured, clinical and commercial supplies of our product candidates;

    §
    seek marketing approvals for our current and future product candidates that successfully complete clinical trials;

    §
    establish a sales, marketing and distribution infrastructure to commercialize any product candidate for which we may obtain marketing approval;

    §
    hire additional administrative, clinical, regulatory and scientific personnel; and

    §
    incur additional costs associated with operating as a public company in the United States following the completion of this offering.

In order to become and remain profitable, we will need to develop and eventually commercialize, on our own or with collaborators, one or more product candidates with significant market potential. This will require us to be successful in a range of challenging activities, including completing clinical trials of our

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product candidates, developing commercial scale manufacturing processes, obtaining marketing approval, manufacturing, marketing and selling any current and future product candidates for which we may obtain marketing approval, and satisfying any post-marketing requirements. We may never succeed in any or all of these activities and, even if we do, we may never generate revenue from product sales or achieve profitability.

Because of the numerous risks and uncertainties associated with pharmaceutical products and development, we are unable to accurately predict the timing or amount of increased expenses or when, or if, we will be able to achieve profitability. If we are required by the U.S. Food and Drug Administration, or FDA, or other regulatory authorities such as the European Medicines Agency, or EMA, to perform studies and trials in addition to those currently expected, or if there are any delays in the development or in the completion of any planned or future pre-clinical studies or clinical trials of our current or future product candidates, our expenses could increase and profitability could be further delayed.

Even if we do achieve profitability, we may not be able to sustain or increase profitability on a quarterly or annual basis. Our failure to become and remain profitable would decrease the value of our company and could impair our ability to raise capital, maintain our research and development efforts, expand our business or continue our operations. A decline in the value of our company also could cause you to lose all or part of your investment.

Even if this offering is successful, we will require substantial additional funding, which may not be available to us on acceptable terms, or at all, and failure to obtain this necessary capital when needed may force us to delay, limit or terminate our product candidate development efforts or other operations.

Our operations have consumed substantial amounts of cash since inception. We are currently conducting clinical trials for odiparcil. We also plan to begin pivotal Phase III development for lanifibranor and conduct clinical trials for other compounds in development. Developing pharmaceutical product candidates, including conducting clinical trials, is expensive, lengthy and risky, and we expect our research and development expenses to increase substantially in connection with our ongoing activities, particularly as we advance lanifibranor and odiparcil through later stages of clinical development. We will require substantial additional future capital in order to complete clinical development and, if we are successful, to commercialize any of our current product candidates. Accordingly, we will continue to require substantial additional capital to continue our clinical development activities and potentially engage in commercialization activities. Because successful development of our product candidates is uncertain, we are unable to estimate the actual funds we will require to complete research and development and commercialize our product candidates.

The amount and timing of our future funding requirements will depend on many factors, including but not limited to:

    §
    the progress, costs, results of and timing of our ongoing and planned clinical trials;

    §
    our ability to reach milestones under our existing collaboration arrangements or enter into additional collaboration agreements;

    §
    the willingness of the FDA, EMA and other comparable regulatory authorities to accept our clinical trials and pre-clinical studies and other work as the basis for review and approval of product candidates;

    §
    the outcome, costs and timing of seeking and obtaining regulatory approvals from the FDA, EMA and other comparable regulatory authorities;

    §
    the need for additional or expanded pre-clinical studies and clinical trials beyond those that we envision conducting with respect to our current and future product candidates;

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    §
    the success of our current collaborators and any future collaborators, and the economic and other terms of any licensing, collaboration or other similar arrangements into which we may enter;

    §
    the number of product candidates and indications that we pursue;

    §
    the timing and costs associated with manufacturing our product candidates for clinical trials and pre-clinical studies and, if approved, for commercial sale;

    §
    the timing and costs associated with establishing sales and marketing capabilities;

    §
    market acceptance of any approved product candidates;

    §
    the costs of acquiring, licensing or investing in additional businesses, products, product candidates and technologies;

    §
    the cost to maintain, expand and defend the scope of our intellectual property portfolio, including the amount and timing of any payments we may be required to make, or that we may receive, in connection with licensing, filing, prosecution, defense and enforcement of any patents or other intellectual property rights;

    §
    our need and ability to hire additional management, development and scientific personnel; and

    §
    our need to implement additional internal systems and infrastructure, including financial and reporting systems.

As of March 31, 2020, we had €46.9 million of cash and cash equivalents. We expect that the net proceeds from this offering, together with our existing cash and cash equivalents, will enable us to fund our operating expenses and capital expenditure requirements at least through the fourth quarter of 2022. This period could be shortened if there are any significant increases beyond our expectations in spending on development programs or more rapid progress of development programs than anticipated. Accordingly, we expect that we will need to raise substantial additional funds in the future. Any additional fundraising efforts may divert our management from their day-to-day activities, which may adversely affect our ability to develop and, if approved, commercialize our product candidates. In addition, our ability to raise necessary financing could be impacted by the COVID-19 pandemic and its effects on market conditions. If we are unable to obtain funding on a timely basis, we may be required to significantly curtail, delay or discontinue one or more of our research or development programs or the commercialization of any approved product or be unable to expand our operations or otherwise capitalize on our business opportunities, as desired, which could impair our growth prospects.

Raising additional capital may cause dilution to our existing shareholders, restrict our operations or require us to relinquish rights to our product candidates or technologies.

We may seek additional funding through a combination of equity offerings, debt financings, collaborations and/or 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 may include liquidation or other preferences that adversely affect your rights as a holder of our ordinary shares or ADSs. The incurrence of additional indebtedness and/or the issuance of certain equity securities could result in increased fixed payment obligations and could also result in certain additional restrictive covenants, such as limitations on our ability to incur additional debt and/or issue additional equity, limitations on our ability to acquire or license intellectual property rights and other operating restrictions that could adversely impact our ability to conduct our business. In addition, issuance of additional equity securities, or the possibility of such issuance, may cause the market price of our ordinary shares or ADSs to decline. In the event that we enter into collaborations and/or licensing arrangements in order to raise capital, we may be required to accept unfavorable terms, including relinquishing or licensing to a third party on unfavorable terms our rights to technologies or product candidates that we otherwise would seek to develop or commercialize ourselves or potentially reserve for future potential arrangements when we might be able to achieve more favorable terms. Additional funding may not be available to us on acceptable terms, or at all. If we are

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unable to obtain funding on a timely basis, we may be required to significantly curtail one or more of programs or cease operations altogether.

Risks Related to Product Development, Regulatory Approval and Commercialization

We are heavily dependent on the success of our product candidates lanifibranor and odiparcil. We cannot give any assurance that any product candidate, or any other compounds in development, will successfully complete clinical trials, receive regulatory approval or be commercialized.

We do not have any drugs that have received regulatory approval and may never be able to develop marketable products. We expect that a substantial portion of our efforts and expenses for the foreseeable future will be devoted to the clinical development of lanifibranor and odiparcil, and as a result, our business currently depends heavily on the successful development, regulatory approval and commercialization of these product candidates. The development of lanifibranor and odiparcil has been and will continue to be a time-consuming and costly process, and may leave us with insufficient resources to advance other programs. We cannot be certain that lanifibranor or odiparcil will receive regulatory approval or be successfully commercialized, even if we receive regulatory approval. The research, testing, manufacturing, safety, efficacy, labeling, approval, sale, marketing and distribution of our product candidates are, and will remain, subject to comprehensive regulation by the FDA in the United States, the European Union and EMA in Europe and regulatory authorities in other countries, with regulations differing from country to country. We will not be permitted to market our drug candidates in the United States or Europe until we receive approval of a New Drug Application, or NDA, from the FDA or a marketing authorization application, or MAA, from the European Commission (based on the positive opinion of the EMA), respectively. We have not submitted any marketing applications for any of our product candidates. NDAs and MAAs must include extensive preclinical and clinical data and supporting information to establish the drug candidate's safety and effectiveness for each desired indication. NDAs and MAAs must also include significant information regarding the chemistry, manufacturing and controls for the drug. Obtaining approval of a NDA or a MAA is a lengthy, expensive and uncertain process, and we may not be successful in obtaining approval. We have received a fast track designation from the FDA for the development of lanifibranor for the treatment of NASH. While the fast track designation for lanifibranor in NASH permits close and regular contact between us and the FDA, the FDA and the EMA review processes can take more than one year to complete and approval is never guaranteed. If we submit a NDA to the FDA, the FDA must decide whether to accept or reject the submission for filing, before even reviewing the scientific basis. Regulators of other jurisdictions, such as the EMA, have their own procedures for approval of drug candidates. Failure to obtain regulatory approval for lanifibranor or odiparcil in the United States, Europe or other jurisdictions will prevent us from commercializing and marketing lanifibranor or odiparcil in such jurisdictions.

Even if we were to successfully obtain approval from the FDA, EMA and comparable foreign regulatory authorities for our product candidates, any approval might contain significant limitations related to use restrictions for specified age groups, warnings, precautions or contraindications, or may be subject to burdensome post-approval study or risk management requirements. Furthermore, even if we obtain regulatory approval for lanifibranor or odiparcil, we will still need to develop a commercial infrastructure, or otherwise develop relationships with collaborators to commercialize, establish a commercially viable pricing structure and obtain coverage and adequate reimbursement from third-party payors, including and government healthcare programs. If we, or our collaborators, are unable to successfully commercialize lanifibranor or odiparcil, we may not be able to generate sufficient revenue to continue our business.

Due to our limited resources and access to capital, we must and have in the past decided to prioritize development of certain product candidates; these decisions may prove to have been wrong and may adversely affect our revenues.

Because we have limited resources and access to capital to fund our operations, we must decide which product candidates to pursue and the amount of resources to allocate to each. As such, we are currently primarily focused on the development of lanifibranor and odiparcil. Our decisions concerning the allocation

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of research, collaboration, management and financial resources toward particular compounds, product candidates or therapeutic areas may not lead to the development of viable commercial products and may divert resources away from better opportunities. For example, we previously committed resources to pursuing the development of lanifibranor for the treatment of patients with systemic sclerosis, or SSc, through clinical trials. However, following the results of a Phase IIb clinical trial of lanifibranor for the treatment of SSc, we ceased development of lanifibranor in this indication in February 2019. Similarly, our potential decisions to delay, terminate or collaborate with third parties in respect of certain product development programs may also prove not to be optimal and could cause us to miss valuable opportunities. If we make incorrect determinations regarding the market potential of our product candidates or misread trends in the pharmaceutical industry, our business, financial condition and results of operations could be materially adversely affected.

The clinical and commercial success of lanifibranor and odiparcil, as well as our other compounds in development, will depend on a number of factors, many of which are beyond our control, and we or our collaborators may be unable to complete the development or commercialization of our product candidates or our other compounds in development.

The clinical and commercial success of lanifibranor and odiparcil, as well as our other compounds in development will depend on a number of factors, including the following:

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    the timely completion of pre-clinical studies and clinical trials by us and our collaborators;

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    our and our collaborators' ability to demonstrate the safety and efficacy of our product candidates to the satisfaction of the relevant regulatory authorities;

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    whether we or our collaborators are required by the FDA or other regulatory authorities to conduct additional pre-clinical studies or clinical trials, and the scope and nature of such studies or trials, prior to approval to market our products;

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    the timely receipt of necessary marketing approvals from the FDA, the EMA and other comparable regulatory authorities, including pricing and reimbursement determinations;

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    the ability to successfully commercialize our product candidates, if approved, for marketing and sale by the FDA, the EMA or other comparable regulatory authorities, whether alone or in collaboration with others;

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    our ability and the ability of our third party manufacturing partners to manufacture quantities of our product candidates at quality levels necessary to meet regulatory requirements and at a scale sufficient to meet anticipated demand at a cost that allows us to achieve profitability;

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    our and our collaborators' success in educating health care providers and patients about the benefits, risks, administration and use of our product candidates, if approved;

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    acceptance of our product candidates, if approved, as safe and effective by patients and the healthcare community;

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    the achievement and maintenance of compliance with all regulatory requirements applicable to our product candidates;

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    the maintenance of an acceptable safety profile of our products following any approval;

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    the availability, perceived advantages, relative cost, relative safety, and relative efficacy of alternative and competitive treatments;

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    our and our collaborators' ability to obtain and sustain coverage and an adequate level of pricing or reimbursement for our products by third party payors;

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    our and our collaborator's ability to enforce successfully the intellectual property rights for our product candidates and against the products of potential competitors; and

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    §
    our and our collaborator's ability to avoid or succeed in third party claims, including patent infringement claims, and patent interference, reexamination, post grant review, derivation, and opposition proceedings, and other proceedings at the USPTO and foreign patent offices.

Many of these factors are beyond our control. Accordingly, we cannot assure you that we will ever be able to achieve profitability through the sale of, or royalties from, our product candidates. If we or our collaborators are not successful in obtaining approval for and commercializing our product candidates, or are delayed in completing those efforts, our business and operations would be adversely affected.

The regulatory approval processes of the FDA, the EMA and other comparable regulatory authorities are lengthy, time consuming and inherently unpredictable, and if we are ultimately unable to obtain regulatory approval for our product candidates, our business will be substantially harmed.

The time required to obtain approval by the FDA, the EMA and other comparable regulatory authorities is unpredictable but typically takes many years following the commencement of clinical trials and depends upon numerous factors, including the substantial discretion of the regulatory authorities. In addition, approval policies, regulations, or the type and amount of clinical data necessary to gain approval may change during the course of a product candidate's clinical development and may vary among jurisdictions. To date, substantially all of our clinical development has been conducted outside the United States. Although the FDA may accept data from clinical trials conducted outside the United States, acceptance of this data is subject to certain conditions imposed by the FDA. Furthermore, while these clinical trials are subject to applicable local laws, FDA acceptance of the data will be dependent upon its determination that the trials also comply with all applicable U.S. laws and regulations. There can be no assurance that the FDA will accept data from trials conducted outside of the United States. If the FDA does not accept the data from any clinical trials that we or our collaborators conduct outside the United States, it would likely result in the need for additional clinical trials, which would be costly and time-consuming and delay or permanently halt our ability to develop and market these or other product candidates in the United States. We have not obtained regulatory approval for any product candidate and it is possible that none of our existing product candidates or any product candidates we may seek to develop in the future will ever obtain regulatory approval.

Our product candidates could fail to receive regulatory approval for many reasons, including the following:

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    the FDA, the EMA or other comparable regulatory authorities may disagree with the design or implementation of our clinical trials;

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    we may be unable to demonstrate to the satisfaction of the FDA, the EMA or other comparable regulatory authorities that a product candidate is safe and effective for its proposed indication;

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    the results of clinical trials may not meet the level of statistical significance required by the FDA, the EMA or other comparable regulatory authorities for approval;

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    we may be unable to demonstrate that a product candidate's clinical and other benefits outweigh its safety risks;

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    the FDA, the EMA or other comparable regulatory authorities may disagree with our interpretation of data from pre-clinical studies or clinical trials;

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    the data collected from clinical trials of our product candidates may not be sufficient to support the submission of a new drug application, or NDA, or other submission or to obtain regulatory approval in the United States, Europe or elsewhere;

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    the FDA, the EMA or other comparable regulatory authorities may fail to approve the manufacturing processes or facilities of third-party manufacturers with which we contract for clinical and commercial supplies or such processes or facilities may not pass a pre-approval inspection; and

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    §
    the approval policies or regulations of the FDA, the EMA or other comparable regulatory authorities may change or differ from one another significantly in a manner rendering our clinical data insufficient for approval.

This lengthy approval process as well as the unpredictability of future clinical trial results may result in our or our collaborators' failure to obtain regulatory approval to market lanifibranor, odiparcil and/or other future product candidates, which would harm our business, results of operations and prospects significantly. In addition, even if we were to obtain approval, regulatory authorities may approve any of our product candidates for fewer or more limited indications than we request, may grant approval contingent on the performance of costly post-marketing clinical trials, or may approve a product candidate with a label that does not include the labeling claims necessary or desirable for the successful commercialization of that product candidate. In certain jurisdictions, regulatory authorities may not approve the price we intend to charge for our products. Any of the foregoing scenarios could materially harm the commercial prospects for our product candidates.

We have not previously submitted an NDA, an MAA, or any similar drug approval filing to the FDA, the EMA or any comparable regulatory authority for any product candidate, and we cannot be certain that any of our product candidates will be successful in clinical trials or receive regulatory approval. Further, our product candidates may not receive regulatory approval even if they are successful in clinical trials. Even if we successfully obtain regulatory approvals to market one or more of our product candidates, our revenues will be dependent, to a significant extent, upon the size of the markets in the territories for which we gain regulatory approval and have commercial rights or share in revenues from the exercise of such rights. If the markets for patient subsets that we are targeting are not as significant as we estimate, we may not generate significant revenues from sales of such products, if approved.

Even if we receive regulatory approval for any of our product candidates, we will be subject to ongoing obligations and continued regulatory review, which may result in significant additional expense. Additionally, our product candidates, if approved, could be subject to labeling and other restrictions and market withdrawal and we may be subject to penalties if we fail to comply with regulatory requirements or experience unanticipated problems with our products.

Any regulatory approvals that we receive for our product candidates may also be subject to limitations on the approved indicated uses for which the product may be marketed or to the conditions of approval, or contain requirements for potentially costly post-marketing testing, including Phase IV clinical trials, and surveillance to monitor the safety and efficacy of the product candidate, and we may be required to include labeling that includes significant use or distribution restrictions or significant safety warnings, including boxed warnings.

If the FDA, EMA or any other comparable regulatory authority approves any of our product candidates, the manufacturing processes, labeling, packaging, distribution, adverse event reporting, storage, advertising, promotion and recordkeeping for the product will be subject to extensive and ongoing regulatory requirements. These requirements include submissions of safety and other post-marketing information and reports, registration requirements and continued compliance with current good manufacturing practices, or cGMPs, and good clinical practices, or GCPs, for any clinical trials that we conduct post-approval. Later discovery of previously unknown problems with a product, including adverse events of unanticipated severity or frequency, or with our third-party manufacturers or manufacturing processes, or failure to comply with regulatory requirements, may result in, among other things:

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    restrictions on the marketing or manufacturing of the product, withdrawal of the product from the market, or voluntary product recalls;

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    fines, untitled or warning letters or holds on clinical trials;

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    §
    refusal by the FDA, the EMA or any other comparable regulatory authority to approve pending applications or supplements to approved applications filed by us, or suspension or revocation of product approvals;

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    product seizure or detention, or refusal to permit the import or export of products; and

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    injunctions or the imposition of civil or criminal penalties.

Moreover, if any of our product candidates are approved, our product labeling, advertising and promotion will be subject to regulatory requirements and continuing regulatory review. The FDA strictly regulates the promotional claims that may be made about drug products. In particular, a product may not be promoted for uses that are not approved by the FDA as reflected in the product's approved labeling.

Any government investigation of alleged violations of law could require us to expend significant time and resources in response and could generate negative publicity. The occurrence of any event or penalty described above may inhibit our or our collaborators' ability to commercialize lanifibranor and odiparcil, and harm our business, financial condition and results of operations.

In addition, the policies of the FDA, the EMA and other comparable regulatory authorities may change and additional government regulations may be enacted that could prevent, limit or delay regulatory approval of our product candidates. If we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we are not able to maintain regulatory compliance, we may lose any marketing approval that we may have obtained, which would adversely affect our business, prospects and ability to achieve or sustain profitability.

Clinical development is a lengthy and expensive process with an uncertain outcome, and results of earlier studies and trials as well as data from any interim analysis of ongoing clinical trials may not be predictive of future trial results. Clinical failure can occur at any stage of clinical development.

Clinical testing is expensive and can take many years to complete, and its outcome is inherently uncertain. Failure can occur at any time during the clinical trial process. Although product candidates may demonstrate promising results in early clinical (human) trials and pre-clinical (animal) studies, they may not prove to be effective in subsequent clinical trials. For example, testing on animals may occur under different conditions than testing in humans and therefore the results of animal studies may not accurately predict human experience. Likewise, early clinical studies may not be predictive of eventual safety or effectiveness results in larger-scale pivotal clinical trials. The results of pre-clinical studies and previous clinical trials as well as data from any interim analysis of ongoing clinical trials of our product candidates, as well as studies and trials of other products with similar mechanisms of action to our product candidates, may not be predictive of the results of ongoing or future clinical trials. There can be significant variability in safety and/or efficacy results between different trials of the same product candidate due to numerous factors, including changes in trial protocols, differences in composition of the patient populations, adherence to the dosing regimen and other trial protocols and the rate of dropout among clinical trial participants. For example, certain of the completed clinical trials for lanifibranor and odiparcil were conducted in patients with type 2 diabetes and thrombosis, respectively, which are different indications than we are currently pursuing. The results generated in trials for lanifibranor and odiparcil in these other indications do not ensure that the current clinical trials for lanifibranor in NASH, for odiparcil in MPS or later clinical trials in these indications, will continue to demonstrate similar safety and/or efficacy results.

In addition, we did not control the pre-clinical and clinical development of lanifibranor and odiparcil prior to 2012 and we have relied on Abbott Laboratories, or Abbott, and Abbott's collaborators to have conducted such research and development in accordance with the applicable protocol, legal, regulatory and scientific standards, having accurately reported the results of all clinical trials conducted prior to our acquisition of lanifibranor and odiparcil, and having correctly collected and interpreted the data from these studies and

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trials. To the extent any of these has not occurred, expected development time and costs may be increased which could adversely affect any future revenue from lanifibranor and odiparcil.

Product candidates in later stages of clinical trials may fail to show the desired safety and efficacy traits despite having progressed through pre-clinical studies and earlier clinical trials. In addition to the safety and efficacy traits of any product candidate, clinical trial failures may result from a multitude of factors including flaws in trial design, dose selection, placebo effect and patient enrollment criteria. A number of companies in the pharmaceutical industry have suffered significant setbacks in advanced clinical trials due to lack of efficacy or adverse safety profiles, notwithstanding promising results in earlier trials, and it is possible that we will as well. Based upon negative or inconclusive results, we or our collaborators may decide, or regulators may require us, to conduct additional clinical trials or pre-clinical studies. For example, we previously pursued the development of lanifibranor for the treatment of patients with SSc. However, following the results of our Phase IIb clinical trial of lanifibranor for the treatment of SSc, we ceased development of lanifibranor in this indication in February 2019. In addition, data obtained from trials and studies are susceptible to varying interpretations, and regulators may not interpret our data as favorably as we do, which may delay, limit or prevent regulatory approval.

We may encounter substantial delays in our clinical trials or we may fail to demonstrate safety and efficacy to the satisfaction of applicable regulatory authorities.

We may experience delays in our ongoing clinical trials and we do not know whether planned clinical trials will begin on time, need to be redesigned, enroll patients on time or be completed on schedule, if at all. We previously experienced such delays with the initiation of our recently completed Phase IIb clinical trial of lanifibranor in patients with NASH and our Phase Ib/II clinical trial of odiparcil in a pediatric population with MPS VI, as well as delays in our plans to report data related to each of these trials. Clinical trials can be delayed for a variety of reasons, including delays related to:

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    obtaining regulatory approval to commence a trial;

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    reaching agreement on acceptable terms with prospective contract research organizations, or CROs, and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites;

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    obtaining Institutional Review Board, or IRB, or ethics committee approval at each site;

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    obtaining regulatory concurrence on the design and parameters for the trial;

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    obtaining approval for the designs of our clinical development programs for each country targeted for trial enrollment;

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    recruiting suitable patients to participate in a trial, which may be impacted by the number of competing trials that are enrolling patients;

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    having patients complete a trial or return for post-treatment follow-up;

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    clinical sites deviating from trial protocol or dropping out of a trial;

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    adding new clinical trial sites;

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    manufacturing sufficient quantities of product candidate or obtaining sufficient quantities of comparator drug for use in clinical trials;

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    the availability of adequate financing and other resources; or

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    restrictions due to the recent COVID-19 pandemic.

We could encounter delays if a clinical trial is suspended or terminated by us, by the IRBs or ethics committees of the institutions in which such trials are being conducted, by the data and safety monitoring board for such trial or by the FDA, the EMA or other comparable regulatory authorities. A suspension or

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termination may be imposed due to a number of factors, including failure to conduct the clinical trial in accordance with regulatory requirements or our clinical protocols, inspection of the clinical trial operations or trial site by the FDA, the EMA or other comparable regulatory authorities resulting in the imposition of a clinical hold, safety issues or adverse side effects, failure to demonstrate a benefit from using a drug, changes in governmental regulations or administrative actions, manufacturing issues or lack of adequate funding to continue the clinical trial. For example, it is possible that safety issues or adverse side effects could be observed in our trials for lanifibranor in NASH or for odiparcil in MPS, which could result in a delay, suspension or termination of those trials. If we experience delays in the completion of, or termination of, any clinical trial of our product candidates, the commercial prospects of our product candidates will be harmed, and our ability to generate product revenues from any of these product candidates will be delayed. In addition, any delays in completing our clinical trials will increase our costs, slow down our product candidate development and approval process and jeopardize our ability to commence product sales and generate revenues. Any of these occurrences may harm our business, financial condition and prospects significantly. In addition, many of the factors that cause or lead to a delay in the commencement or completion of clinical trials may also ultimately lead to the denial of regulatory approval of our product candidates.

If lanifibranor or odiparcil or any other product candidate is found to be unsafe or lack efficacy, we will not be able to obtain regulatory approval for it and our business would be materially harmed. For example, if the results of our planned pivotal clinical trials for lanifibranor in NASH and/or our ongoing trial for odiparcil in MPS do not achieve the primary efficacy endpoints or demonstrate unexpected safety findings, the prospects for approval of lanifibranor or odiparcil, as applicable, as well as the price of our ordinary shares or ADSs, would be materially and adversely affected.

Moreover, principal investigators for our clinical trials may serve as our scientific advisors or consultants from time to time and receive compensation in connection with such services. Under certain circumstances, we may be required to report some of these relationships to the FDA or other regulatory authorities. The FDA or other regulatory authorities may conclude that a financial relationship between us and a principal investigator has created a conflict of interest or otherwise affected interpretation of the trial results. The FDA or other regulatory authority may therefore question the integrity of the data generated at the applicable clinical trial site and the utility of the clinical trial itself may be jeopardized. This could result in a delay in approval, or rejection, of our marketing applications by the FDA or other regulatory authority, as the case may be, and may ultimately lead to the denial of marketing approval of one or more of our product candidates.

Enrollment and retention of patients in clinical trials is an expensive and time-consuming process and could be made more difficult or rendered impossible by multiple factors outside our control, including difficulties in identifying NASH and MPS VI patients and significant competition for recruiting NASH patients in clinical trials.

Identifying and qualifying patients to participate in our clinical trials is critical to our success. We may encounter delays in enrolling, or be unable to enroll, a sufficient number of patients to complete any of our clinical trials, and even once enrolled we may be unable to retain a sufficient number of patients to complete any of our trials. In particular, as a result of the inherent difficulties in diagnosing NASH and the significant competition for recruiting NASH patients in clinical trials, we experienced delays in recruiting patients with NASH for our recently completed trial of lanifibranor in that indication and we or our potential future collaborators may be unable to enroll the patients we need to complete clinical trials on a timely basis, or at all. These challenges could be exacerbated if the FDA or EMA require us or our collaborators to conduct pivotal trials of lanifibranor in larger patient populations than we anticipate. We have also experienced delays in recruiting patients with MPS VI for our ongoing trial of odiparcil in that indication.

Additionally, patient enrollment and retention in clinical trials depends on many factors, including the size of the patient population, the nature of the trial protocol, our ability to recruit clinical trial investigators with

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the appropriate competencies and experience, the existing body of safety and efficacy data with respect to the study drug, the number and nature of competing treatments and ongoing clinical trials of competing drugs for the same disease, the proximity of patients to clinical sites and the eligibility criteria for the trials, our ability to obtain and maintain patient consents and the risk that patients enrolled in clinical trials will drop out of the trials before completion. Furthermore, any negative results we may report in clinical trials of our product candidates, or results that we report that are less favorable or perceived to be less favorable than those reported with respect to competitor product candidates, may make it difficult or impossible to recruit and retain patients in other clinical trials of those product candidates. Delays or failures in planned patient enrollment or retention may result in increased costs, program delays or both, which could have a harmful effect on our ability to develop lanifibranor or odiparcil, or could render further development impossible. In addition, we may rely on CROs and clinical trial sites to ensure proper and timely conduct of our future clinical trials and, while we intend to enter into agreements governing their services, we will be limited in our ability to compel their actual performance.

We are developing certain of our product candidates in combination with other therapies, and safety or supply issues with combination use products may delay or prevent development and approval of our therapeutic candidates.

We are developing certain of our product candidates in combination with one or more approved or investigational therapies. For example, we are evaluating odiparcil in combination with enzyme replacement therapy, or ERT, for the treatment of MPS. Even if any product candidate we develop were to receive marketing approval or be commercialized for use in combination with other existing therapies, we would continue to be subject to the risks that the FDA, EMA or similar foreign regulatory authorities could revoke approval of the therapy used in combination with our product or that safety, efficacy, manufacturing or supply issues could arise with any of those existing therapies. If the therapies we use in combination with our product candidates are replaced as the standard of care for the indications we choose for any of our product candidates, the EMA, FDA or similar foreign regulatory authorities outside may require us to conduct additional clinical trials. The occurrence of any of these risks could result in our own products, if approved, being removed from the market or being less successful commercially.

We also may evaluate our product candidates in combination with one or more therapies that have not yet been approved for marketing by the FDA, EMA or similar foreign regulatory authorities. We will not be able to market and sell any product candidate we develop in combination with an unapproved therapy if that unapproved therapy does not ultimately obtain marketing approval. In addition, unapproved therapies face the same risks described with respect to our product candidates currently in development, including the potential for serious adverse effects, delay in their clinical trials and lack of FDA or EMA approval.

If the FDA, EMA or similar foreign regulatory authorities do not approve these other therapies or revoke their approval of, or if safety, efficacy, manufacturing, or supply issues arise with, the therapies we choose to evaluate in combination with our product candidates, we may be unable to obtain approval of or market any such product candidate.

We may not be successful in our efforts to discover and develop additional product candidates.

A key element of our strategy is to build a pipeline of product candidates and progress these product candidates through clinical development for the treatment of a variety of diseases. Although our research and development efforts to date have resulted in a pipeline of product candidates directed at various diseases, we may not be able to develop product candidates that are safe and effective. Even if we are successful in continuing to build our pipeline, the potential product candidates that we identify may not be suitable for clinical development, including as a result of being shown to have harmful side effects or other characteristics that indicate that they are unlikely to be products that will receive marketing approval and achieve market acceptance. If we do not continue to successfully develop and begin to commercialize product candidates, we will face difficulty in obtaining product revenues in future periods, which could result in significant harm to our financial position and adversely affect the price of our ordinary shares or ADSs.

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We have received Orphan Drug Designation from the FDA and the European Commission for odiparcil for the treatment of MPS VI, and we may seek Orphan Drug Designation for our future product candidates, however we may be unable to maintain the benefits associated with Orphan Drug Designation, including the potential for market exclusivity, which could limit the potential profitability of our drug candidates, if approved.

Regulatory authorities in some jurisdictions, including the United States and the European Union, may designate drugs for relatively small patient populations as orphan drugs. Under the Orphan Drug Act of 1983, the FDA may designate a drug as an orphan drug if it is a drug intended to treat a rare disease or condition, which is generally defined as a patient population of fewer than 200,000 individuals in the United States, or if it affects more than 200,000, there is no reasonable expectation that sales of the drug in the United States will be sufficient to offset the costs of developing and making the drug available in the United States. Generally, if a drug with an orphan drug designation subsequently receives the first marketing approval for an indication for which it receives the designation, then the drug is eligible for a seven-year period of marketing exclusivity in the United States and a ten-year period of marketing exclusivity in the European Union during which the competent authority may not approve another marketing application for the same drug for the same indication, except in limited circumstances, such as if a subsequent application demonstrates that its product is clinically superior. During an orphan drug's exclusivity period, however, competitors may receive approval for drugs with different active moieties for the same indication as the approved orphan drug, or for drugs with the same active moiety as the approved orphan drug, but for different indications. Orphan drug exclusivity could block the approval of one of our products for seven years if a competitor obtains approval for a drug with the same active moiety intended for the same indication before we do, unless we are able to demonstrate that grounds for withdrawal of the orphan drug exclusivity exist or that our product is clinically superior. Further, if a designated orphan drug receives marketing approval for an indication broader than the rare disease or condition for which it received orphan drug designation, it may not be entitled to exclusivity. A designated orphan drug may not receive orphan drug exclusivity if it is approved for a use that is broader than the indication for which it received orphan drug designation.

We have received orphan drug designation from the FDA and from the EMA for odiparcil for the treatment of MPS VI. We intend to pursue orphan drug designation for other future drug candidates as applicable. Even if we obtain orphan drug designation for a drug candidate, we may not obtain orphan exclusivity, and any such exclusivity, if attained, may not effectively protect the drug from the competition of different drugs for the same condition, which could be approved during the exclusivity period. Additionally, after an orphan drug is approved, the FDA could subsequently approve another application for the same indication if the FDA concludes that the later drug is shown to be safer, more effective or makes a major contribution to patient care. Orphan drug exclusive marketing rights in the United States also may be lost if the FDA later determines that the request for designation was materially defective or if the manufacturer is unable to assure sufficient quantity of the drug to meet the needs of patients with the rare disease or condition. The failure to obtain an orphan drug designation for any drug candidates we may develop, the inability to maintain that designation for the duration of the applicable period, or the inability to obtain or maintain orphan drug exclusivity could reduce our ability to make sufficient sales of the applicable drug candidate to balance our expenses incurred to develop it, which would have a negative impact on our operational results and financial condition.

In addition, we may seek rare pediatric disease designation from the FDA for odiparcil for the treatment of MPS. The FDA defines a "rare pediatric disease" as a serious or life-threatening disease in which the serious or life-threatening manifestations primarily affect individuals aged from birth to 18 years and the disease affects fewer than 200,000 individuals in the United States or affects more than 200,000 in the United States and for which there is no reasonable expectation that the cost of developing and making in the United States a drug for such disease or condition will be received from sales in the United States of such drug. Under the FDA's Rare Pediatric Disease Priority Review Voucher, or PRV, program, upon the

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approval of a NDA for the treatment of a rare pediatric disease, the sponsor of such application would be eligible for a Rare Pediatric Disease PRV that can be used to obtain priority review for a subsequent NDA. The PRV may be sold or transferred an unlimited number of times. Congress has extended the PRV program until September 30, 2020, with potential for PRVs to be granted until 2022. This program has been subject to criticism, including by the FDA, and it is possible that even if we obtain approval for odiparcil for the treatment of MPS and qualify for such a PRV, the program may no longer be in effect at the time or the value of any such PRV may decrease such that we are may not be able to realize the benefits of such PRV.

Fast Track Designation from the FDA may not actually lead to a faster development or regulatory review or approval process.

The FDA has granted Fast Track Designation for lanifibranor for the treatment of patients with NASH.

If a product is intended for the treatment of a serious or life-threatening condition and the product demonstrates the potential to address unmet medical needs for this condition, the product sponsor may apply for Fast Track Designation. The FDA has broad discretion whether or not to grant this designation, so even if we believe our product candidate is eligible for this designation, we cannot assure you that the FDA would decide to grant it. Even though we have received Fast Track Designation, we may not experience a faster development process, review or approval compared to conventional FDA procedures. The FDA may withdraw Fast Track Designation if it believes that the designation is no longer supported by data from our clinical development program.

Although the FDA has granted Rare Pediatric Disease Designation for odiparcil for the treatment of MPS VI, an NDA for odiparcil, if approved, may not meet the eligibility criteria for a priority review voucher.

Rare Pediatric Disease Designation has been granted for odiparcil for MPS VI. In 2012, Congress authorized the FDA to award priority review vouchers to sponsors of certain rare pediatric disease product applications. This provision is designed to encourage development of new drug and biological products for prevention and treatment of certain rare pediatric diseases. Specifically, under this program, a sponsor who receives an approval for a drug or biologic for a "rare pediatric disease" may qualify for a voucher that can be redeemed to receive a priority review of a subsequent marketing application for a different product. The sponsor of a rare pediatric disease drug product receiving a priority review voucher may transfer (including by sale) the voucher to another sponsor. The voucher may be further transferred any number of times before the voucher is used, as long as the sponsor making the transfer has not yet submitted the application. The FDA may also revoke any priority review voucher if the rare pediatric disease drug for which the voucher was awarded is not marketed in the U.S. within one year following the date of approval.

Congress has only authorized the Rare Pediatric Disease Priority Review Voucher program until September 30, 2020. However, if a drug candidate receives Rare Pediatric Disease Designation before October 1, 2020, it is eligible to receive a voucher if it is approved before October 1, 2022. However, odiparcil for MPS VI may not be approved by that date, or at all, and, therefore, we may not be in a position to obtain a priority review voucher prior to expiration of the program, unless Congress further reauthorizes the program. Additionally, designation of a drug for a rare pediatric disease does not guarantee that an NDA will meet the eligibility criteria for a rare pediatric disease priority review voucher at the time the application is approved. Finally, a Rare Pediatric Disease Designation does not lead to faster development or regulatory review of the product, or increase the likelihood that it will receive marketing approval. We may or may not realize any benefit even if we do receive a voucher.

The EMA, FDA and other regulatory agencies actively enforce the laws and regulations prohibiting the promotion of drugs for off-label uses. If we are found to have improperly promoted off-label use, we may become subject to significant liability.

The EMA, FDA and other regulatory agencies strictly regulate the promotional claims that may be made about prescription drug products, such as our product candidates, if approved. In particular, a product may

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not be promoted for uses that are not approved by the EMA, FDA or such other regulatory agencies as reflected in the product's approved labeling. For example, if we receive marketing approval for lanifibranor for NASH and odiparcil for MPS, physicians, in their professional medical judgment, may nevertheless prescribe either drug product to their patients in a manner that is inconsistent with the approved label. If we are found to have promoted such off-label use, we may become subject to significant liability under the U.S. federal Food, Drug, and Cosmetic Act, or FDCA, and other statutory authorities, such as laws prohibiting false claims for reimbursement. The federal government has levied large civil and criminal fines against companies for alleged improper promotion and has enjoined several companies from engaging in off-label promotion. The FDA has also requested that companies enter into consent decrees or permanent injunctions under which specified promotional conduct is changed or curtailed. If we cannot successfully manage the promotion of our products, if approved, we could become subject to significant liability, which would harm our reputation and negatively impact our financial condition.

Even if any of our product candidates are commercialized, they may not be accepted by physicians, healthcare payors, patients or the medical community in general, and may also become subject to market conditions that could harm our business.

Even if we obtain regulatory approval for one or more of our product candidates, the product may not gain market acceptance or prevalent usage among physicians, healthcare payors, patients and the medical community, which is critical to commercial success. Our current product candidates both treat diseases which may not frequently be identified by physicians. For example, because various co-morbidities often confound the diagnosis of NASH and NASH diagnosis currently requires liver biopsy, many physicians may not be trained to identify or treat NASH specifically, which could lead to limited prescribing of lanifibranor even if the product candidate obtains regulatory approval and is commercialized. Market acceptance of any product candidate for which we receive approval depends on a number of factors, including:

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    the efficacy and safety as demonstrated in clinical trials;

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    the timing of market introduction of the product candidate as well as competitive products;

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    the clinical indications for which the product candidate is approved and physician and medical community awareness of and familiarity with such indications;

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    acceptance by physicians, the medical community and patients of the product candidate as a safe and effective treatment;

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    with respect to lanifibranor, the perception of PPAR agonists as a class of drugs;

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    the convenience of prescribing and initiating patients on the product candidate;

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    the potential and perceived advantages of such product candidate over alternative treatments;

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    the cost of treatment in relation to alternative treatments, including any similar generic treatments;

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    pricing and the availability of coverage and adequate reimbursement by third-party payors;

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    relative convenience and ease of administration;

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    the prevalence and severity of adverse side effects; and

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    the effectiveness of sales and marketing efforts.

If our product candidates are approved but fail to achieve an adequate level of acceptance by physicians, healthcare payors, patients and the medical community, we will not be able to generate significant revenues, and we may not become or remain profitable.

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We currently have no marketing and sales organization. To the extent any of our product candidates for which we maintain commercial rights is approved for marketing, if we are unable to establish marketing and sales capabilities or enter into agreements with third parties to market and sell our product candidates, we may not be able to effectively market and sell any product candidates, or generate product revenues.

We currently do not have a marketing or sales organization for the marketing, sales and distribution of pharmaceutical products. In order to independently commercialize any product candidates that receive marketing approval and for which we maintain commercial rights, we would have to build marketing, sales, distribution, managerial and other non-technical capabilities or make arrangements with third parties to perform these services, and we may not be successful in doing so. Factors that may inhibit our efforts to commercialize our products on our own include:

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    our inability to recruit, train and retain adequate numbers of effective sales and marketing personnel;

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    the inability of sales personnel to obtain access to physicians, educate physicians about patients for whom our product candidates may be appropriate treatment options and attain adequate numbers of physicians to prescribe any drugs;

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    the inability of reimbursement professionals to negotiate arrangements for formulary access, reimbursement, and other acceptance by payors;

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    restricted or closed distribution channels that make it difficult to distribute our products to segments of the patient population;

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    the lack of complementary medicines to be offered by sales personnel, which may put us at a competitive disadvantage relative to companies with more extensive product lines; and

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    unforeseen costs and expenses associated with creating an independent sales and marketing organization.

In the event of successful development of lanifibranor, odiparcil or any other product candidates in those indications where we can do so in a capital efficient manner, we may elect to build a targeted specialty sales force which will be expensive and time consuming. Any failure or delay in the development of our internal sales, marketing and distribution capabilities would adversely impact the commercialization of these products. With respect to our product candidates for larger indications, we may collaborate with third parties that have direct sales forces and established distribution systems, either to augment our own sales force and distribution systems or in lieu of our own sales force and distribution systems. If we are unable to enter into collaborations with third parties for the commercialization of approved products, if any, on acceptable terms or at all, or if any such collaborator does not devote sufficient resources to the commercialization of our product or otherwise fails in commercialization efforts, we may not be able to successfully commercialize any of our product candidates that receive regulatory approval. If we are not successful in commercializing our product candidates, either on our own or through collaborations with one or more third parties, our future revenue will be materially and adversely impacted.

Even if we obtain and maintain approval for our current and future product candidates from the FDA, we may nevertheless be unable to obtain approval for our product candidates outside of the United States, which would limit our market opportunities and could harm our business.

Approval of a product candidate in the United States by the FDA does not ensure approval of such product candidate by regulatory authorities in other countries or jurisdictions, and approval by one foreign regulatory authority does not ensure approval by regulatory authorities in other foreign countries or by the FDA. If approved, sales of lanifibranor, odiparcil and any future product candidate outside of the United States will be subject to foreign regulatory requirements governing clinical trials and marketing approval. Even if the FDA grants marketing approval for a product candidate, comparable regulatory authorities of foreign countries also must approve the manufacturing and marketing of the product candidate in those countries. Approval procedures vary among jurisdictions and can involve requirements and administrative review

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periods different from, and more onerous than, those in the United States, including additional pre-clinical studies or clinical trials. In many countries outside the United States, a product candidate must be approved for reimbursement before it can be approved for sale in that country. In some cases, the price that we intend to charge for any product candidates, if approved, is also subject to approval. Obtaining approval for lanifibranor, odiparcil or any future product candidate in the European Union from the European Commission following the opinion of the EMA or in other foreign jurisdictions, if we choose to submit a marketing authorization application there, would be a lengthy and expensive process. Even if a product candidate is approved, the FDA, the EMA or other foreign regulatory authorities, as the case may be, may limit the indications for which the drug may be marketed, require extensive warnings on the drug labeling or require expensive and time-consuming additional clinical trials or reporting as conditions of approval. Obtaining foreign regulatory approvals and compliance with foreign regulatory requirements could result in significant delays, difficulties and costs for us and could delay or prevent the introduction of lanifibranor, odiparcil or any future product candidate in certain countries.

Further, clinical trials conducted in one country may not be accepted by regulatory authorities in other countries. Also, regulatory approval for lanifibranor, odiparcil or any future product candidate may be withdrawn. If we fail to comply with the regulatory requirements, our target market will be reduced and our ability to realize the full market potential of lanifibranor, odiparcil or any future product candidate will be negatively impacted, and our business, prospects, financial condition and results of operations could be harmed.

Coverage and reimbursement decisions by third-party payors may have an adverse effect on pricing and market acceptance.

There is significant uncertainty related to the third-party coverage and reimbursement of newly approved drugs. To the extent that we retain commercial rights following clinical development, we would seek approval to market our product candidates in the United States, the European Union and other selected jurisdictions. Market acceptance and sales of our product candidates, if approved, in both domestic and international markets will depend significantly on the availability of coverage and adequate reimbursement from third-party payors for any of our product candidates and may be affected by existing and future healthcare reform measures. Government authorities and other third-party payors, such as private health insurers and health maintenance organizations, decide which drugs they will cover and establish payment levels. We cannot be certain that coverage and adequate reimbursement will be available for any of our product candidates, if approved. We cannot guarantee that we will be able to obtain price levels and reimbursement rates as high as those granted to other products that may be approved for the treatment of NASH or the various form of MPS, particularly because these products may have a different therapeutic approach from those developed by us. Also, we cannot be certain that reimbursement policies will not reduce the demand for any of our product candidates, if approved. If reimbursement is not available or is available on a limited basis for any of our product candidates, if approved, we or our collaborators may not be able to successfully commercialize any such product candidate. Reimbursement by a third-party payor may depend upon a number of factors, including, without limitation, the third-party payor's determination that use of a product is:

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    a covered benefit under its health plan;

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    safe, effective and medically necessary;

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    appropriate for the specific patient;

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    cost-effective; and

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    neither experimental nor investigational.

Obtaining coverage and reimbursement approval for a product from a government or other third-party payor is a time consuming and costly process that could require us to provide supporting scientific, clinical and

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cost-effectiveness data for the use of our products to the payor. We may not be able to provide data sufficient to gain acceptance with respect to coverage and reimbursement at a satisfactory level. If reimbursement of our future products, if any, is unavailable or limited in scope or amount, such as may result where alternative or generic treatments are available, we may be unable to achieve or sustain profitability.

In the United States, the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, or MMA, changed the way Medicare covers and pays for pharmaceutical products. The legislation established Medicare Part D, which expanded Medicare coverage for outpatient prescription drug purchases by the elderly but provided authority for limiting the number of drugs that will be covered in any therapeutic class. The MMA also introduced a new reimbursement methodology based on average sales prices for physician-administered drugs. Any negotiated prices for any of our product candidates, if approved, covered by a Part D prescription drug plan will likely be lower than the prices we might otherwise obtain outside of the Medicare Part D prescription drug plan.

Moreover, no uniform policy for coverage and reimbursement exists in the United States, and coverage and reimbursement can differ significantly from payor to payor. While Medicare Part D applies only to drug benefits for Medicare beneficiaries, private third-party payors often follow Medicare coverage policy and payment limitations in setting their own payment rates, but also have their own methods and approval process apart from Medicare determinations. Any reduction in payment under Medicare Part D may result in a similar reduction in payments from non-governmental payors.

In certain countries, particularly in the European Union, the pricing of prescription pharmaceuticals is subject to governmental control. In these countries, pricing negotiations with governmental authorities can take considerable time after the receipt of marketing approval for a product candidate. To obtain reimbursement or pricing approval in some countries, we may be required to conduct additional clinical trials that compare the cost-effectiveness of our product candidates to other available therapies. If reimbursement of any of our product candidates, if approved, is unavailable or limited in scope or amount in a particular country, or if pricing is set at unsatisfactory levels, we may be unable to achieve or sustain profitability of our products in such country.

The delivery of healthcare in the European Union, including the establishment and operation of health services and the pricing and reimbursement of medicines, is almost exclusively a matter for national, rather than EU, law and policy. National governments and health service providers have different priorities and approaches to the delivery of healthcare and the pricing and reimbursement of products in that context. In general, however, the healthcare budgetary constraints in most EU member states have resulted in restrictions on the pricing and reimbursement of medicines by relevant health service providers. Coupled with ever-increasing EU and national regulatory burdens on those wishing to develop and market products, this could prevent or delay marketing approval of our product candidates, restrict or regulate post-approval activities and affect our or our collaborators' ability to commercialize any products for which we obtain marketing approval.

Changes in healthcare law and implementing regulations, as well as changes in healthcare policy, may impact our business in ways that we cannot currently predict, and may have a significant adverse effect on our business and results of operations.

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 drug candidates, restrict or regulate post-approval activities, and affect our ability to profitably sell any drug candidates for which we obtain marketing approval. Among policy makers and payors in the United States and elsewhere, including in the European Union, there is significant interest in promoting changes in healthcare systems with the stated goals of containing healthcare costs, improving

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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.

The Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010, or collectively the Affordable Care Act, substantially changed the way healthcare is financed by both the government and private insurers, and significantly impacts the U.S. pharmaceutical industry. The Affordable Care Act, among other things: (1) increased the minimum Medicaid rebates owed by manufacturers under the Medicaid Drug Rebate Program and expanded rebate liability from fee-for-service Medicaid utilization to include the utilization of Medicaid managed care organizations as well; (2) established a branded prescription drug fee that pharmaceutical manufacturers of branded prescription drugs must pay to the federal government; (3) expanded the list of covered entities eligible to participate in the 340B drug pricing program by adding new entities to the program; (4) established a new Medicare Part D coverage gap discount program, in which manufacturers must agree to offer 70% point-of-sale discounts off negotiated prices of applicable brand drugs to eligible beneficiaries during their coverage gap period, as a condition for the manufacturer's outpatient drugs to be covered under Medicare Part D; (5) extended manufacturers' Medicaid rebate liability to covered drugs dispensed to individuals who are enrolled in Medicaid managed care organizations; (6) expanded eligibility criteria for Medicaid programs by, among other things, allowing states to offer Medicaid coverage to additional individuals and by adding new mandatory eligibility categories for individuals with income at or below 133% of the federal poverty level, thereby potentially increasing manufacturers' Medicaid rebate liability; (7) created a new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for certain drugs and biologics, including our product candidates, that are inhaled, infused, instilled, implanted or injected; (8) established a new Patient-Centered Outcomes Research Institute to oversee, identify priorities in, and conduct comparative clinical effectiveness research, along with funding for such research; (9) established a Center for Medicare and Medicaid Innovation at the Centers for Medicare & Medicaid Services (CMS) to test innovative payment and service delivery models to lower Medicare and Medicaid spending, potentially including prescription drug spending; and (10) created a licensure framework for follow-on biologic products.

There remain judicial and Congressional challenges to certain aspects of the Affordable Care Act, as well as recent efforts by the Trump administration to repeal or replace certain aspects of the Affordable Care Act. Since January 2017, President Trump has signed Executive Orders and other directives designed to delay the implementation of certain provisions of the Affordable Care Act or otherwise circumvent some of the requirements for health insurance mandated by the Affordable Care Act. Additionally, CMS issued a final rule in 2018 that gave states greater flexibility in setting benchmarks for insurers in the individual and small group marketplaces, which may have the effect of relaxing the essential health benefits required under the Affordable Care Act for plans sold through such marketplaces. Concurrently, Congress has considered legislation that would repeal or repeal and replace all or part of the Affordable Care Act. While Congress has not passed comprehensive repeal legislation, several bills affecting the implementation of certain taxes under the Affordable Care Act have been signed into law. The Tax Cuts and Jobs Act includes a provision repealing, effective January 1, 2019, the tax-based shared responsibility payment imposed by the Affordable Care Act on certain individuals who fail to maintain qualifying health coverage for all or part of a year that is commonly referred to as the "individual mandate." Further, the 2020 federal spending package permanently eliminated, effective January 1, 2020, the Affordable Care Act-mandated "Cadillac" tax on high-cost employer-sponsored health coverage and medical device tax and, effective January 1, 2021, also eliminates the health insurer tax. Moreover, the Bipartisan Budget Act of 2018, or the BBA, among other things, amended the Affordable Care Act, effective January 1, 2019, to close the coverage gap in most Medicare drug plans, commonly referred to as the "donut hole." In December 2018, CMS published a new final rule permitting further collections and payments to and from certain Affordable Care Act qualified health plans, or QHPs, and health insurance issuers under the Affordable Care Act risk adjustment program in response to the outcome of federal district court litigation regarding the method CMS uses to determine this risk adjustment. On April 27, 2020, the United States Supreme Court reversed

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a Federal Circuit decision that previously upheld Congress' denial of $12 billion in "risk corridor" funding. Congress may consider additional legislation to repeal, or repeal and replace, other elements of the Affordable Care Act. On December 14, 2018, a Texas U.S. District Court Judge ruled that the Affordable Care Act is unconstitutional in its entirety because the "individual mandate" was repealed by Congress as part of the Tax Act. Additionally, on December 18, 2019, the U.S. Court of Appeals for the 5th Circuit upheld the District Court ruling that the individual mandate was unconstitutional and remanded the case back to the District Court to determine whether the remaining provisions of the Affortdable Care Act are invalid as well. On March 2, 2020, the United States Supreme Court granted the petitions for writs of certiorari to review this case, and has allotted one hour for oral arguments, which are expected to occur in the fall. We continue to evaluate the Affordable Care Act and its possible repeal and replacement, as the extent to which any such changes may impact our business or financial condition remains uncertain.

Other legislative changes have been proposed and adopted since the Affordable Care Act was enacted. These changes include aggregate reductions to Medicare payments to providers of up to 2% per fiscal year pursuant to the Budget Control Act of 2011 and subsequent laws, which began in 2013 and, due to subsequent legislative amendments to the statute, including the BBA, will remain in effect through 2030 unless additional Congressional action is taken. The Coronavirus Aid, Relief and Economic Security Act, or CARES Act, which was signed into law in March 2020 and is designed to provide financial support and resources to individuals and businesses affected by the COVID-19 pandemic, suspended the 2% Medicare sequester from May 1, 2020 through December 31, 2020, and extended the sequester by one year, through 2030. New laws may result in additional reductions in Medicare and other healthcare funding, which may adversely affect customer demand and affordability for our products and, accordingly, the results of our financial operations. Additional changes that may affect our business include the expansion of new programs such as Medicare payment for performance initiatives for physicians under the Medicare Access and CHIP Reauthorization Act of 2015, or MACRA, which ended the use of the statutory formula and established a quality payment program, also referred to as the Quality Payment Program. The Quality Payment Program has two tracks, one known as the merit based incentive payment system for providers in the fee-for service Medicare program, and the advanced alternative payment model for providers in specific care models, such as accountable care organizations. In November 2019, CMS issued a final rule finalizing the changes to the Quality Payment Program. At this time, it is unclear how the introduction of the Medicare quality payment program will impact overall physician reimbursement. It is also possible that additional governmental action is taken to address the COVID-19 pandemic. For example, on April 18, 2020, CMS announced that QHP issuers under the Affordable Care Act may suspend activities related to the collection and reporting of quality data that would have otherwise been reported between May and June 2020 given the challenges healthcare providers are facing responding to the COVID-19 virus.

Also, there has been heightened governmental scrutiny recently over the manner in which drug manufacturers set prices for their marketed products, which has resulted in several Congressional inquiries and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to product pricing, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for drug products. At the federal level, the Trump administration's budget proposal for fiscal year 2021 includes a $135 billion allowance to support legislative proposals seeking to reduce drug prices, increase competition, lower out-of-pocket drug costs for patients, and increase patient access to lower-cost generic and biosimilar drugs. On March 10, 2020, the Trump administration sent "principles" for drug pricing to Congress, calling for legislation that would, among other things, cap Medicare Part D beneficiary out-of-pocket pharmacy expenses, provide an option to cap Medicare Part D beneficiary monthly out-of-pocket expenses, and place limits on pharmaceutical price increases. Additionally, the Trump administration previously released a "Blueprint" to lower drug prices and reduce out of pocket costs of drugs that contains additional proposals to increase manufacturer competition, increase the negotiating power of certain federal healthcare programs, incentivize manufacturers to lower the list price of their products and reduce the out of pocket costs of drug products paid by consumers. The U.S. Department of Health and Human Services has solicited feedback on some of these measures and has

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implemented others under its existing authority. For example, in May 2019, CMS issued a final rule to allow Medicare Advantage Plans the option of using step therapy for Part B drugs beginning on January 1, 2020. The final rule codified a CMS policy change that was effective January 1, 2019. Although a number of these and other proposals may require additional authorization to become effective, Congress and the Trump administration have each indicated that it will continue to seek new legislative and/or administrative measures to control drug costs. At the state level, legislatures have increasingly passed legislation and implemented regulations designed to control pharmaceutical and biological 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. For example, since 2016, Vermont requires certain manufacturers identified by the state to justify their price increases. Additionally, on May 30, 2018, the Trickett Wendler, Frank Mongiello, Jordan McLinn, and Matthew Bellina Right to Try Act of 2017, or the Right to Try Act, was signed into law. The law, among other things, provides a federal framework for certain patients to access certain investigational new drug products that have completed a Phase I clinical trial and that are undergoing investigation for FDA approval. Under certain circumstances, eligible patients can seek treatment without enrolling in clinical trials and without obtaining FDA permission under the FDA expanded access program. There is no obligation for a drug manufacturer to make its drug products available to eligible patients as a result of the Right to Try Act.

We expect that these and other healthcare reform measures that may be adopted in the future, may result in more rigorous coverage criteria and lower reimbursement, and in additional downward pressure on the price that we receive for any approved product. Any reduction in reimbursement from Medicare or other government-funded programs may result in a similar reduction in payments from private payors. The implementation of cost containment measures or other healthcare reforms may prevent us from being able to generate revenue, attain profitability or commercialize our drugs, once marketing approval is obtained.

In the European Union, coverage and reimbursement status of any drug candidates for which we obtain regulatory approval are provided for by the national laws of EU Member States. The requirements may differ across the EU Member States. Also at the national level, actions have been taken to enact transparency laws regarding payments between pharmaceutical companies and health care professionals.

We face significant competition for our drug discovery and development efforts, and if we do not compete effectively, our commercial opportunities will be reduced or eliminated.

The biotechnology and pharmaceutical industries are intensely competitive and subject to rapid and significant technological change. Our drug discovery and development efforts may target diseases and conditions that are already subject to existing therapies or that are being developed by our competitors, many of which have substantially greater resources, larger research and development staffs and facilities, more experience in completing pre-clinical testing and clinical trials, and formulation, marketing and manufacturing capabilities than we do. As a result of these resources, our competitors may develop drug products that render our products obsolete or noncompetitive by developing more effective drugs or by developing their products more efficiently. Our ability to develop competitive products would be limited if our competitors succeeded in obtaining regulatory approvals for drug candidates more rapidly than we were able to or in obtaining patent protection or other intellectual property rights that limited our drug development efforts. Any drug products resulting from our research and development efforts, or from our joint efforts with collaborators or licensees, might not be able to compete successfully with our competitors' existing and future products, or obtain regulatory approval in the United States, European Union or elsewhere. Further, we may be subject to additional competition from alternative forms of treatment, including generic or over-the-counter drugs.

Allergan plc, Galmed Pharmaceuticals Ltd. and Madrigal Pharmceuticals are investigating product candidates in Phase III clinical trials for the treatment of NASH, while other companies have product candidates for the treatment of NASH that are in earlier stages of pre-clinical or clinical development.

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Intercept Pharmaceuticals, Inc. has filed for regulatory approval with the FDA and EMA for its NASH product candidate and received a Complete Response Letter from the FDA in June 2020. Other companies, including Gilead Sciences, Inc., NGM Biophamaceuticals, Inc. and Akero Therapeutics, Inc., have product candidates for the treatment of NASH that are in earlier stages of pre-clinical or clinical development. ERT is the standard of care for the treatment of MPS with current therapies being marketed by BioMarin Pharmaceuticals, Inc., Sanofi Genzyme, Shire Plc and Ultragenyx Pharmaceuticals, Inc. Additional ERTs, as well as gene therapy approaches to treating MPS, are in various stages of pre-clinical and clinical development conducted by different companies, including Abeona Therapeutics Inc., ArmaGen, Inc., Eloxx Pharmaceuticals, Inc., Sanofi Genzyme, Esteve Pharmaceuticals, S.A., Lysogene S.A., Orchard Therapeutics plc, REGENXBIO Inc., Sangamo Therapeutics, Inc. and Takeda Pharmaceutical Company Limited. In the MPS VI subtype, the MeuSix consortium is developing a gene therapy approach and is conducting a multicenter Phase I/II clinical trial to investigate the safety and efficacy of its AAV-mediated gene therapy.

Mergers and acquisitions in the pharmaceutical and biotechnology industries could result in even more resources being concentrated among a small number of our competitors. Competition may reduce the number and types of patients available to us to participate in clinical trials, particularly with respect to NASH, because some patients who might have opted to enroll in our trials may instead opt to enroll in a trial being conducted by one of our competitors.

Our product candidates may cause undesirable side effects or have other properties that could delay or prevent their regulatory approval, limit the commercial profile of an approved label, or result in significant negative consequences following marketing approval, if any.

Results of our trials could reveal a high and unacceptable severity and prevalence of certain side effects. In such an event, our trials could be suspended or terminated and the FDA, the EMA or comparable regulatory authorities could order us to cease further development of or deny approval of our product candidates for any or all targeted indications. The drug-related side effects could affect patient recruitment or the ability of enrolled patients to complete the trial or result in potential product liability claims. Any of these occurrences may harm our business, financial condition and prospects significantly.

If one or more of our product candidates receives marketing approval, and we or others later identify undesirable side effects caused by such products, a number of potentially significant negative consequences could result, including:

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    regulatory authorities may withdraw approvals of such product;

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    regulatory authorities may require additional warnings on the label;

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    we may be required to create a medication guide outlining the risks of such side effects for distribution to patients;

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    we could be sued and held liable for harm caused to patients; and

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    our reputation may suffer.

Any of these events could prevent us from achieving or maintaining market acceptance of the particular product candidate, if approved, and could significantly harm our business, results of operations and prospects.

Clinical trials of our product candidates may not uncover all possible adverse effects that patients may experience.

Clinical trials are conducted in representative samples of the potential patient population which may have significant variability. Clinical trials are by design based on a limited number of subjects and of limited duration for exposure to the product used to determine whether, on a potentially statistically significant

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basis, the planned safety and efficacy of any product candidate can be achieved. As with the results of any statistical sampling, we cannot be sure that all side effects of our product candidates may be uncovered, and it may be the case that only with a significantly larger number of patients exposed to the product candidate for a longer duration, may a more complete safety profile be identified. Further, even larger clinical trials may not identify rare serious adverse effects or the duration of such studies may not be sufficient to identify when those events may occur. There have been other products that have been approved by the regulatory authorities but for which safety concerns have been uncovered following approval. Such safety concerns have led to labelling changes or withdrawal of products from the market, and any of our product candidates may be subject to similar risks.

Although to date we have not seen evidence of significant safety concerns with our product candidates currently in clinical trials, patients treated with our products, if approved, may experience adverse reactions and it is possible that the FDA or other regulatory authorities may ask for additional safety data as a condition of, or in connection with, our efforts to obtain approval of our product candidates. If safety problems occur or are identified after our product candidates reach the market, we may, or regulatory authorities may require us to amend the labeling of our products, recall our products or even withdraw approval for our products.

We may not be able to conduct, or contract others to conduct, animal testing in the future, which could harm our research and development activities.

Certain laws and regulations relating to drug development require us to test our product candidates on animals before initiating clinical trials involving humans. Animal testing activities have been the subject of controversy and adverse publicity. Animal rights groups and other organizations and individuals have attempted to stop animal testing activities by pressing for legislation and regulation in these areas and by disrupting these activities through protests and other means. To the extent the activities of these groups are successful, our research and development activities may be interrupted or delayed.

The lack of a reliable non-invasive method for the diagnosis of NASH is likely to present a major challenge to lanifibranor's market penetration, if ever commercialized.

Liver biopsy is the standard approach for the diagnosis of inflammation and fibrosis associated with NASH. However, the procedure-related morbidity and, in rare cases, mortality, sample errors, costs, patient discomfort and thus lack of patient interest in undergoing the procedure limit its use. As such, only patients with a high risk of NASH, which includes patients with metabolic syndrome and an indication of Non-Alcoholic Fatty Liver Disease, or NAFLD, are generally sent for liver biopsy. Because NASH tends to be asymptomatic until the disease progresses, many individuals with NASH remain undiagnosed until the disease has reached its late stages, if at all. The lack of a reliable non-invasive method for the diagnosis of NASH is likely to present a major challenge to lanifibranor's market penetration, as many practitioners and patients may not be aware that a patient suffers from NASH and requires treatment. As such, use of lanifibranor might not be as wide-spread as our actual target market and this may limit the commercial potential of lanifibranor.

A further challenge to lanifibranor's market penetration is that currently a liver biopsy is the standard approach for measuring improvement in NASH patients. Because it would be impractical to subject all patients that take lanifibranor, when and if it approved, to regular and repeated liver biopsies, it will be difficult to demonstrate lanifibranor's effectiveness to practitioners and patients unless and until a reliable non-invasive method for the diagnosis and monitoring of NASH becomes available, as to which there can be no assurance.

While other companies in the industry are currently working on advancing non-invasive diagnostic approaches, none of these has been clinically validated, and the timetable for commercial validation, if at all, is uncertain. Moreover, such diagnostics may also be subject to regulation by FDA or other regulatory authorities as medical devices and may require premarket clearance or approval.

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Our business could be adversely affected by the effects of health epidemics, including the recent COVID-19 pandemic, in regions where we or third parties on which we rely have significant concentrations of clinical trial sites, manufacturing facilities or other business operations. The COVID-19 pandemic could materially affect our operations, including at our headquarters in France and at our clinical trial sites, as well as the business or operations of our manufacturers, CROs or other third parties with whom we conduct business.

Our business could be adversely affected by health epidemics in regions where we have concentrations of clinical trial sites or other business operations, and could cause significant disruption in the operations of third-party manufacturers and CROs upon whom we rely. For example, in December 2019, a novel strain of coronavirus, SARS-CoV-2, causing the Coronavirus Disease 2019, or COVID-19, was reported to have surfaced in Wuhan, China. Since then, COVID-19 has spread to multiple countries, including France and several other European countries. In March 2020, the World Health Organization declared the COVID-19 outbreak a pandemic, and the U.S. government imposed travel restrictions on travel between the United States, Europe and certain other countries. We have implemented work-from-home policies for all employees. The effects of the executive order and our work-from-home policies may negatively impact productivity, disrupt our business and delay our clinical programs and timelines, the magnitude of which will depend, in part, on the length and severity of the restrictions and other limitations on our ability to conduct our business in the ordinary course. On April 29, 2020, the French government announced that additional measures would be adopted in light of the COVID-19 crisis (which would also apply to us) in order to protect French companies operating in strategic industries, including lowering from 25% to 10% the threshold for investments by certain individuals or entities that may be subject to prior authorization of the French Ministry of Economy. These and similar, and perhaps more severe, disruptions in our operations could negatively impact our business, operating results and financial condition.

Quarantines, shelter-in-place and similar government orders, or the perception that such orders, shutdowns or other restrictions on the conduct of business operations could occur, related to COVID-19 or other infectious diseases could impact our personnel and the personnel at third-party manufacturing facilities in the United States, the European Union and other countries.

In addition, our clinical trials may be affected by the COVID-19 pandemic. Clinical site initiation and patient enrollment may be delayed due to prioritization of hospital resources toward the COVID-19 pandemic. For example, due to COVID-19, the recruitment and screening of new patients has been suspended at the University of Florida, where an investigator-initiated Phase II NAFLD trial of lanifibranor is currently ongoing, and therefore results from this trial could be delayed. Some patients may not be able to comply with clinical trial protocols if quarantines impede patient movement or interrupt healthcare services. Similarly, our ability to recruit and retain patients and principal investigators and site staff who, as healthcare providers, may have heightened exposure to COVID-19 and adversely impact our clinical trial operations.

We may also experience delays in receiving approval from local regulatory authorities to initiate our planned clinical trials and interruption in global shipping that may affect the transport of clinical trial materials. Furthermore, changes in local regulations as part of a response to the COVID-19 outbreak may require us to change the ways in which our clinical trials are conducted, which may result in unexpected costs, or discontinue the clinical trials altogether especially in case of delays due to necessary interactions with local regulators, ethics committees and other important agencies and contractors triggered by limitations in employee resources or forced furlough of government employees.

The spread of COVID-19, which has caused a broad impact globally, may materially affect us economically. While the potential economic impact brought by, and the duration of, COVID-19 may be difficult to assess or predict, a widespread pandemic could result in significant disruption of global financial markets, reducing our ability to access capital, which could in the future negatively affect our liquidity. In addition, a recession or market correction resulting from the spread of COVID-19 could materially affect our business and the value of our common stock.

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The global pandemic of COVID-19 continues to rapidly evolve. The ultimate impact of the COVID-19 pandemic or a similar health epidemic is highly uncertain and subject to change. We do not yet know the full extent of potential delays or impacts on our business, our clinical trials, healthcare systems or the global economy as a whole. However, these effects could have a material impact on our operations, and we will continue to monitor the COVID-19 situation closely.

Risks Related to Our Reliance on Third Parties

We may not be successful in establishing development and commercialization collaborations, which could adversely affect, and potentially prohibit, our ability to develop our product candidates.

Developing pharmaceutical products, conducting clinical trials, obtaining regulatory approval, establishing manufacturing capabilities and marketing approved products are expensive. Accordingly, we have sought and may in the future seek to enter into collaborations with companies that have more resources and experience. If we are unable to obtain a collaborator for our product candidates, we may be unable to advance the development of our product candidates through late-stage clinical development and seek approval in any market. In situations where we enter into a development and commercial collaboration arrangement for a product candidate, we may also seek to establish additional collaborations for development and commercialization in territories outside of those addressed by the first collaboration arrangement for such product candidate. In addition, we may have particular difficulties in finding collaborators for lanifibranor in light of the discontinuation of development of certain PPAR agonists as a result of safety observations that may, or may be perceived to be, linked to the PPAR agonist class of drugs, which may result in delays in the commencement of any Phase III clinical trial of lanifibranor for the treatment of NASH. If we are unable to enter into any development and commercial collaborations and/or sales and marketing arrangements on acceptable terms, or at all, we may be unable to successfully develop and seek regulatory approval for our product candidates and/or effectively market and sell approved products, if any.

We may not be successful in maintaining development and commercialization collaborations, and any collaborator may not devote sufficient resources to the development or commercialization of our product candidates or may otherwise fail in development or commercialization efforts, which could adversely affect our ability to develop certain of our product candidates and our financial condition and operating results.

The collaboration arrangements that we have established, and any collaboration arrangements that we may enter into in the future, may not ultimately be successful, which could have a negative impact on our business, results of operations, financial condition and growth prospects. If we collaborate with a third party for development and commercialization of a product candidate, we can expect to relinquish some or all of the control over the future success of that product candidate to the third party. For example, in our collaboration with AbbVie, AbbVie is solely responsible for clinical development of any product candidates developed through the collaboration and is the owner of all intellectual property rights resulting from the collaboration. It is possible that a collaborator may not devote sufficient resources to the development or commercialization of our product candidate or may otherwise fail in development or commercialization efforts, in which event the development and commercialization of such product candidate could be delayed or terminated and our business could be substantially harmed. For example, we previously entered into a collaboration with Boehringer Ingelheim, or BI, for the development of new treatments for idiopathic pulmonary fibrosis, which ended in November 2019 following BI's decision to prioritize other products in its portfolio. In addition, the terms of any collaboration or other arrangement that we establish may not be favorable to us or may not be perceived as favorable, which may negatively impact the trading price of our ordinary shares or ADSs. In some cases, we may be responsible for continuing development of a product candidate or research program under a collaboration and the payment we receive from our collaborator may be insufficient to cover the cost of this development. Moreover, collaborations and sales and marketing arrangements are complex and time consuming to negotiate, document and implement and they may require substantial resources to maintain.

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We are subject to a number of additional risks associated with our dependence on collaborations with third parties, the occurrence of which could cause our collaboration arrangements to fail. Conflicts may arise between us and collaborators, such as conflicts concerning the interpretation of clinical data, the achievement of milestones, the interpretation of financial provisions or the ownership of intellectual property developed during the collaboration. If any such conflicts arise, a collaborator could act in its own self-interest, which may be adverse to our best interests. Any such disagreement between us and a collaborator could result in one or more of the following, each of which could delay or prevent the development or commercialization of our product candidates, and in turn prevent us from generating sufficient revenues to achieve or maintain profitability:

    §
    reductions in the payment of royalties or other payments we believe are due pursuant to the applicable collaboration arrangement;

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    actions taken by a collaborator inside or outside our collaboration which could negatively impact our rights or benefits under our collaboration including termination of the collaboration for convenience by the collaborator; or

    §
    unwillingness on the part of a collaborator to keep us informed regarding the progress of its development and commercialization activities or to permit public disclosure of the results of those activities.

If our collaborations on research and development candidates do not result in the successful development and commercialization of products or if one of our collaborators terminates its agreement with us, we may not receive any future research funding or milestone or royalty payments under the collaboration. If we do not receive the funding we expect under these agreements, the development of our product candidates could be delayed and we may need additional resources to develop product candidates.

We rely on third parties to conduct our pre-clinical studies and clinical trials. If these third parties do not successfully carry out their contractual duties or meet expected deadlines, we may not be able to obtain regulatory approval for or commercialize our product candidates and our business could be substantially harmed.

We have relied upon and plan to continue to rely upon CROs to monitor and manage data for our pre-clinical and clinical programs. We rely on these parties for execution of our pre-clinical studies and clinical trials, and we control only certain aspects of their activities. We and our CROs also rely upon clinical sites and investigators for the performance of our clinical trials in accordance with the applicable protocols and applicable legal, regulatory and scientific standards. Nevertheless, we are responsible for ensuring that each of our studies and trials is conducted in accordance with the applicable protocol and applicable legal and regulatory requirements and scientific standards, and our reliance on CROs as well as clinical sites and investigators does not relieve us of our regulatory responsibilities. We, our CROs, as well as the clinical sites and investigators are required to comply with current GCPs, which are regulations and guidelines enforced by the FDA, the Competent Authorities of the Member States of the European Economic Area, or EEA, and comparable regulatory authorities for all of our products in clinical development. Regulatory authorities enforce these GCPs through periodic inspections of trial sponsors, investigators and clinical sites. If we, any of our CROs or any of the clinical sites or investigators fail to comply with applicable GCPs, the clinical data generated in our clinical trials may be deemed unreliable and the FDA, EMA or comparable regulatory authorities may require us to perform additional clinical trials before approving our marketing applications. We cannot assure you that upon inspection by a given regulatory authority, such regulatory authority will determine that any of our clinical trials comply with GCP regulations. We also cannot assure you that our CROs, as well as the clinical sites and investigators, will perform our clinical trials in accordance with the applicable protocols as well as applicable legal and regulatory requirements and scientific standards, or report the results obtained in a timely and accurate manner. Furthermore, the operations of our CROs may be constrained or disrupted by the recent COVID-19 pandemic. In addition to GCPs, our clinical trials must be conducted with product produced under cGMP

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regulations. While we have agreements governing activities of our CROs, we have limited influence over the actual performance of our CROs as well as the performance of clinical sites and investigators. In addition, significant portions of the clinical trials for our product candidates will be conducted outside of France, which will make it more difficult for us to monitor CROs as well as clinical sites and investigators and perform visits of our clinical sites, and will force us to rely heavily on CROs to ensure the proper and timely conduct of our clinical trials in accordance with the applicable protocols and compliance with applicable regulations, including GCPs. Failure to comply with applicable protocols and regulations in the conduct of the clinical trials for our product candidates may require us to repeat clinical trials, which would delay the regulatory approval process.

Some of our CROs have an ability to terminate their respective agreements with us if it can be reasonably demonstrated that the safety of the subjects participating in our clinical trials warrants such termination, if we make a general assignment for the benefit of our creditors or if we are liquidated.

If any of our relationships with these CROs terminate, we may not be able to enter into arrangements with alternative CROs or to do so on commercially reasonable terms. In addition, our CROs are not our employees, and except for remedies available to us under our agreements with such CROs, we cannot control whether or not they devote sufficient time and resources to our pre-clinical and clinical programs. If CROs do not successfully carry out their contractual duties or obligations or meet expected deadlines, if they need to be replaced, or if the quality or accuracy of the clinical data they obtain is compromised due to the failure (including by clinical sites or investigators) to adhere to our clinical protocols, regulatory requirements or for other reasons, our clinical trials may be extended, delayed or terminated and we may not be able to obtain regulatory approval for or successfully commercialize our product candidates. As a result, our results of operations and the commercial prospects for our product candidates would be harmed, our costs could increase substantially and our ability to generate revenues could be delayed significantly.

Switching or adding additional CROs involves additional cost and requires management time and focus. In addition, there is a natural transition period when a new CRO commences work. As a result, delays may occur, which can materially impact our ability to meet our desired clinical development timelines. Though we carefully manage our relationships with our CROs, there can be no assurance that we will not encounter challenges or delays in the future or that these delays or challenges will not have a material adverse impact on our business, financial condition and prospects.

We rely completely on third parties to manufacture our pre-clinical and clinical drug supplies and we intend to rely on third parties to produce commercial supplies of any approved product candidate. Manufacturers are subject to significant regulation with respect to manufacturing our products. The manufacturing facilities on which we rely may not continue to meet regulatory requirements and may have limited capacity.

If, for any reason, we were to experience an unexpected loss of supply of our product candidates or placebo or comparator drug used in certain of our clinical trials, whether as a result of manufacturing, supply or storage issues or otherwise, we could experience delays, disruptions, suspensions or terminations of, or be required to restart or repeat, any pending or ongoing clinical trials. We do not currently have, nor do we plan to acquire, the infrastructure or capability internally to manufacture our pre-clinical and clinical drug supplies and we lack the resources and the capability to manufacture any of our product candidates on a clinical or commercial scale. The facilities used by our contract manufacturers or other third-party manufacturers to manufacture our product candidates are subject to the FDA's, EMA's and other comparable regulatory authorities' pre-approval inspections that will be conducted after we submit our NDA to the FDA or the required approval documents to any other relevant regulatory authority. We do not control the implementation of the manufacturing process of, and are completely dependent on, our contract manufacturers or other third-party manufacturers for compliance with the cGMPs for manufacture of both active drug substances and finished drug products. If our contract manufacturers or other third-party manufacturers cannot successfully manufacture material that conforms to applicable specifications and the strict regulatory requirements of the FDA, EMA or others, we will not be able to secure and/or maintain

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regulatory approvals for our products manufactured at these facilities. In addition, we have no control over the ability of our contract manufacturers or other third-party manufacturers to maintain adequate quality control, quality assurance and qualified personnel. If the FDA, EMA or other comparable regulatory authority finds deficiencies at these facilities for the manufacture of our product candidates or if it withdraws any approval because of deficiencies at these facilities in the future, we may need to find alternative manufacturing facilities, which would significantly impact our ability to develop, obtain regulatory approval for or market our product candidates, if approved. Further, our agreements with our contract and other third-party manufacturers generally limit these parties liability to us and we therefore may not be able to obtain reimbursement for losses or damages that we incur as a result of actions by such parties.

We rely on our manufacturers to purchase from third-party suppliers the materials necessary to produce our product candidates for our clinical trials. There are a limited number of suppliers for raw materials that we use to manufacture our drugs and there may be a need to assess alternate suppliers to prevent a possible disruption of the manufacture of the materials necessary to produce our product candidates for our clinical trials, and if approved, for commercial sale. We do not have any control over the process or timing of the acquisition of these raw materials by our manufacturers. Moreover, we currently do not have any agreements for the commercial production of these raw materials. Although we generally do not begin a clinical trial unless we believe we have access to a sufficient supply of a product candidate to complete the clinical trial, any significant delay in the supply of a product candidate, or the raw material components thereof, for an ongoing clinical trial due to the need to replace a contract manufacturer or other third-party manufacturer could considerably delay completion of our clinical trials, product testing and potential regulatory approval of our product candidates. If our manufacturers or we are unable to purchase these raw materials after regulatory approval has been obtained for our product candidates, the commercial launch of our product candidates would be delayed or there would be a shortage in supply, which would impair our ability to generate revenues from the sale of our product candidates. Additionally, if we receive regulatory approval for our product candidates, we may experience unforeseen difficulties or challenges in the manufacture of our product candidates on a commercial scale compared to the manufacture for clinical purposes.

We expect to continue to depend on contract manufacturers or other third-party manufacturers for the foreseeable future. We currently obtain our supplies of finished drug product through individual purchase orders. We have not entered into long-term agreements with our current contract manufacturers or with any alternate fill/finish suppliers. Although we intend to do so prior to any commercial launch in order to ensure that we maintain adequate supplies of finished drug product, we may be unable to enter into such an agreement or do so on commercially reasonable terms, which could have a material adverse impact upon our business.

We are dependent on single-source suppliers for some of the components and materials used in, and the processes required to develop, our development candidates and investigational medicines.

We currently depend on single-source suppliers for some of the components and materials used in lanifibranor and odiparcil. We cannot ensure that these suppliers will remain in business, have sufficient capacity or supply to meet our needs, or that they will not be purchased by one of our competitors or another company that is not interested in continuing to work with us. Our use of single-source suppliers of raw materials, components and finished goods exposes us to several risks, including:

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    delays to the development timelines for our product candidates;

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    interruption of supply resulting from modifications to or discontinuation of a supplier's operations;

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    delays in product shipments resulting from uncorrected defects, reliability issues, or a supplier's variation in a component;

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    a lack of long-term supply arrangements for key components with our suppliers;

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    §
    inability to obtain adequate supply in a timely manner, or to obtain adequate supply on commercially reasonable terms;

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    difficulty and cost associated with locating and qualifying alternative suppliers for our components in a timely manner;

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    production delays related to the evaluation and testing of components from alternative suppliers, and corresponding regulatory qualifications;

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    delay in delivery due to our suppliers' prioritizing other customer orders over ours;

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    damage to our reputation caused by defective components produced by our suppliers;

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    potential price increases; and

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    delays due to the recent COVID-19 pandemic.

There are, in general, relatively few alternative sources of supply for substitute components. These vendors may be unable or unwilling to meet our future demands for our clinical trials or commercial sale. Establishing additional or replacement suppliers for these components, materials, and processes could take a substantial amount of time and it may be difficult to establish replacement suppliers who meet regulatory requirements. Any disruption in supply from any single-source supplier could lead to supply delays or interruptions which would damage our business, financial condition, results of operations, and prospects.If we have to switch to a replacement supplier, the manufacture and delivery of our product candidates could be interrupted for an extended period, which could adversely affect our business. Establishing additional or replacement suppliers for any of the components used in our product candidates, if required, may not be accomplished quickly. If we are able to find a replacement supplier, the replacement supplier would need to be qualified and may require additional regulatory authority approval, which could result in further delay. Any interruption or delay in the supply of components or materials, or our inability to obtain components or materials from alternate sources at acceptable prices in a timely manner, could impair our ability to meet the demand for our investigational medicines.

Manufacturing issues may arise that could increase product and regulatory approval costs or delay commercialization of our products.

As the manufacturing processes are scaled up they may reveal manufacturing challenges or previously unknown impurities that could require resolution in order to proceed with our planned clinical trials and obtain regulatory approval for the commercial marketing of our products. In the future, we may identify manufacturing issues or impurities that could result in delays in the clinical program and regulatory approval for our products, increases in our operating expenses, or failure to obtain or maintain approval for our products. Our reliance on third-party manufacturers entails risks, including the following:

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    the inability to meet our product specifications, including product formulation, and quality requirements consistently;

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    a delay or inability to procure or expand sufficient manufacturing capacity;

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    manufacturing and product quality issues, including those related to scale-up of manufacturing;

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    costs and validation of new equipment and facilities required for scale-up;

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    a failure to comply with cGMP and similar quality standards;

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    the inability to negotiate manufacturing agreements with third parties under commercially reasonable terms;

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    termination or nonrenewal of manufacturing agreements with third parties in a manner or at a time that is costly or damaging to us;

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    §
    the reliance on a limited number of sources, and in some cases, single sources for key materials, such that if we are unable to secure a sufficient supply of these key materials, we will be unable to manufacture and sell our product candidates in a timely fashion, in sufficient quantities or under acceptable terms;

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    the lack of qualified backup suppliers for those materials that are currently purchased from a sole or single source supplier;

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    operations of our third-party manufacturers or suppliers could be disrupted by conditions unrelated to our business or operations, including the bankruptcy of the manufacturer or supplier;

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    disruption of the distribution of chemical supplies between the U.K. and E.U. due to Brexit;

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    carrier disruptions or increased costs that are beyond our control; and

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    the failure to deliver our products under specified storage conditions and in a timely manner.

Any of these events could lead to delays in any clinical study we may undertake, failure to obtain regulatory approval or impact our ability to successfully commercialize any product candidates. Some of these events could be the basis for FDA or other regulatory authorities' action, including injunction, recall, seizure, or total or partial suspension of production.

Risks Related to Our Intellectual Property

If we are unable to obtain and maintain patent protection for our product candidates, or if the patent protection obtained is not sufficiently broad in scope or is non-exclusive, our competitors could develop and commercialize products and technology similar or identical to our product candidates, and our ability to successfully commercialize any product candidates we may develop may be adversely affected.

Our commercial success depends on obtaining and maintaining proprietary rights to our product candidates and other compounds in development for the treatment of NASH, MPS and other diseases, as well as successfully defending these rights against third party challenges. We will only be able to protect our product candidates and our other compounds in development, and their uses from unauthorized use by third parties to the extent that valid and enforceable patents or effectively protected trade secrets, cover them.

Our ability to obtain patent protection for our product candidates and other compounds in development is uncertain due to a number of factors, including:

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    we may not have been the first to make the inventions covered by pending patent applications or issued patents;

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    we may not have been the first to file patent applications for our product candidates or the compositions we developed or for their uses;

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    others may independently develop identical, similar or alternative products or compositions and uses thereof;

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    our disclosures in patent applications may not be sufficient to meet the statutory requirements for patentability;

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    any or all of our pending patent applications may not result in issued patents;

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    we may choose not to seek or obtain patent protection in countries that may eventually provide us a significant business opportunity;

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    any patents issued to us may not provide a basis for commercially viable products, may not provide any competitive advantages, or may be successfully challenged, narrowed, invalidated or circumvented by third parties;

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    §
    our compositions and methods may not be patentable;

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    others may design around our patent claims to produce competitive products which fall outside of the scope of our patents; or

    §
    others may identify prior art or other bases which could invalidate our patents.

Even if we have or obtain patents covering our product candidates or compositions, we may still be barred from making, using and selling our product candidates or technologies because of the patent rights of others. Others may have filed, and in the future may file, patent applications covering compositions or products that are similar or identical to ours. If a patent owned by a third party covers one of our product candidates or its use, this could materially affect our ability to develop the product candidate or sell the resulting product if approved. Because patent applications in the United States are not published until 18 months from their priority date, there may be currently pending applications unknown to us that may later result in issued patents that our product candidates or compositions may infringe. Additionally, because the scope of claims in pending patent applications can change, there may be pending applications whose claims do not currently cover any of our product candidates but may be altered such that one or more of our product candidates are covered when the resulting patent issues. These patent applications may have priority over patent applications filed by us.

Moreover, even if we are able to obtain patent protection, such patent protection may be insufficient to achieve our business objectives. For example, the coverage claimed in a patent application can be significantly reduced before the patent is issued, and its scope can be reinterpreted after issuance, which could allow others develop products that are similar to, or better than, ours in a way that is not covered by the claims of our patents. Furthermore, some of our owned and in-licensed patents and patent applications are, and may in the future be, co-owned with third parties. If we are unable to obtain an exclusive license to any such third party co-owners' interest in such patents or patent applications, such co-owners may be able to license their rights to other third parties, including our competitors, and our competitors could market competing products and technology. In addition, we may need the cooperation of any such co-owners of our patents in order to enforce such patents against third parties, and such cooperation may not be provided to us. Therefore, even if patent applications we rely on issue as patents, they may not provide us with any meaningful protection, prevent third parties from competing with us, or otherwise provide us with any competitive advantage.

Obtaining and maintaining a patent portfolio entails significant expense and resources. Part of the expense includes periodic maintenance fees, renewal fees, annuity fees, various other governmental fees on patents and/or applications due in several stages over the lifetime of patents and/or applications, as well as the cost associated with complying with numerous procedural provisions during the patent application process. We may or may not choose to pursue or maintain protection for particular inventions. In addition, there are situations in which failure to make certain payments or noncompliance with certain requirements in the patent process can result in abandonment or lapse of a patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction. If we choose to forgo patent protection or allow a patent application or patent to lapse purposefully or inadvertently, our competitive position could suffer. Moreover, in future collaborations, we may not have the right to control the preparation, filing or prosecution of patent applications, or to maintain the patents, covering technology subject to our collaboration or license agreements with third parties. In addition, in future collaborations, our counterparty may have the right to enforce the patent rights subject to the applicable agreement without our involvement or consent or to otherwise control the enforcement of such patent rights. Therefore, these patents and patent applications may not be prosecuted or enforced in a manner consistent with the best interests of our business.

Legal actions to enforce our patent rights can be expensive and may involve the diversion of significant management time. In addition, these legal actions could be unsuccessful and could also result in the invalidation of our patents or a finding that they are unenforceable. We may or may not choose to pursue

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litigation or other actions against those that have infringed on our patents, or used them without authorization, due to the associated expense and time commitment of monitoring these activities. If we fail to protect or to enforce our intellectual property rights successfully, our competitive position could suffer, which could harm our results of operations.

We do not have composition of matter patent protection with respect to odiparcil.

We own certain patents and patent applications with claims directed to specific methods of using odiparcil and we expect to have marketing exclusivity from the FDA and EMA for a period of seven and ten years, respectively, because odiparcil has orphan drug designation in these jurisdictions. However, composition of matter protection in the United States and elsewhere covering odiparcil has expired. We may be limited in our ability to list our patents in the FDA's Orange Book if the use of our product, consistent with its FDA-approved label, would not fall within the scope of our patent claims. Also, our competitors may be able to offer and sell products so long as these competitors do not infringe any other patents that we (or third parties) hold, including patents with claims directed to the manufacture of odiparcil and/or method of use patents. In general, method of use patents are more difficult to enforce than composition of matter patents because, for example, of the risks that the FDA may approve alternative uses of the subject compounds not covered by the method of use patents, and others may engage in off-label sale or use of the subject compounds. Physicians are permitted to prescribe an approved product for uses that are not described in the product's labeling. Although off-label prescriptions may infringe our method of use patents, the practice is common across medical specialties and such infringement is difficult to prevent or prosecute. FDA approval of uses that are not covered by our patents would limit our ability to generate revenue from the sale of odiparcil, if approved for commercial sale. Off-label sales would limit our ability to generate revenue from the sale of odiparcil, if approved for commercial sale.

Pharmaceutical patents and patent applications involve highly complex legal and factual questions, which, if determined adversely to us, could negatively impact our patent position.

The patent positions of biotechnology and pharmaceutical companies can be highly uncertain and involve complex legal and factual questions. The interpretation and breadth of claims allowed in some patents covering pharmaceutical compositions may be uncertain and difficult to determine, and are often affected materially by the facts and circumstances that pertain to the patented compositions and the related patent claims. The standards of the United States Patent and Trademark Office, or USPTO, the European Patent Office, and other foreign counterparts are sometimes uncertain and could change in the future. Consequently, the issuance and scope of patents cannot be predicted with certainty. Patents, if issued, may be challenged, invalidated or circumvented. Certain U.S. patents and patent applications may also be subject to interference proceedings, and U.S. patents may be subject to reexamination proceedings, post-grant review and/or inter partes review and derivation proceedings in the USPTO. European patents and other foreign patents may be subject also to opposition or comparable proceedings in the corresponding foreign patent office, which could result in either loss of the patent or denial of the patent application or loss or reduction in the scope of one or more of the claims of the patent or patent application. In addition, such interference, reexamination, post-grant review, inter partes review and opposition proceedings may be costly. Accordingly, rights under any issued patents may not provide us with sufficient protection against competitive products or processes.

In addition, changes in or different interpretations of patent laws in the United States, Europe, and other jurisdictions may permit others to use our discoveries or to develop and commercialize our technology and products without providing any compensation to us, or may limit the number of patents or claims we can obtain. The laws of some countries do not protect intellectual property rights to the same extent as U.S. and European laws and those countries may lack adequate rules and procedures for defending our intellectual property rights.

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If we fail to obtain and maintain patent protection and trade secret protection of our product candidates, we could lose our competitive advantage and competition we face would increase, reducing any potential revenues and adversely affecting our ability to attain or maintain profitability.

Developments in patent law could have a negative impact on our business.

As is the case with other biopharmaceutical companies, our success is heavily dependent on intellectual property, particularly patents. Obtaining and enforcing patents in the biopharmaceutical industry involves both technological and legal complexity and is therefore costly, time consuming and inherently uncertain. Changes in either the patent laws or interpretation of the patent laws in the United States could increase the uncertainties and costs. Recent patent reform legislation in the United States and other countries, including the Leahy-Smith America Invents Act (the Leahy-Smith Act), signed into law on September 16, 2011, could increase those uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of our issued patents. The Leahy-Smith Act includes a number of significant changes to U.S. patent law. These include provisions that affect the way patent applications are prosecuted, redefine prior art and provide more efficient and cost-effective avenues for competitors to challenge the validity of patents. These include allowing third-party submission of prior art to the USPTO during patent prosecution and additional procedures to attack the validity of a patent by USPTO administered post-grant proceedings, including post-grant review, inter partes review, and derivation proceedings. After March 2013, under the Leahy-Smith Act, the United States transitioned to a first inventor to file system in which, assuming that the other statutory requirements are met, the first inventor to file a patent application will be entitled to the patent on an invention regardless of whether a third party was the first to invent the claimed invention. However, the Leahy-Smith Act and its implementation could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of our issued patents, all of which could have a material adverse effect on our business, financial condition, results of operations and prospects.

The U.S. Supreme Court has ruled on several patent cases in recent years, either narrowing the scope of patent protection available in certain circumstances or weakening the rights of patent owners in certain situations. Depending on future actions by the U.S. Congress, the U.S. courts, the USPTO and the relevant law-making bodies in other countries, the laws and regulations governing patents could change in unpredictable ways that would weaken our ability to obtain new patents or to enforce our existing patents and patents that we might obtain in the future.

If we are unable to protect the confidentiality of our trade secrets, our business and competitive position would be harmed.

In addition to patent protection, because we operate in the highly technical field of development of therapies, we rely in part on trade secret protection in order to protect our proprietary technology and processes. However, trade secrets are difficult to protect. It is our policy to enter into confidentiality and intellectual property assignment agreements with our employees, consultants, outside scientific collaborators, sponsored researchers, and other advisors. These agreements generally require that the other party keep confidential and not disclose to third parties any confidential information developed by the party or made known to the party by us during the course of the party's relationship with us. These agreements also generally provide that inventions conceived by the party in the course of rendering services to us will be our exclusive property. However, these agreements may not be honored and may not effectively assign intellectual property rights to us. Adequate remedies may not exist in the event of unauthorized use or disclosure of our confidential information. The disclosure of our trade secrets would impair our competitive position and may materially harm our business, financial condition and results of operations.

In addition to contractual measures, we try to protect the confidential nature of our proprietary information using physical and technological security measures. Such measures may not, for example, in the case of misappropriation of a trade secret by an employee or third party with authorized access, provide adequate

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protection for our proprietary information. Our security measures may not prevent an employee or consultant from misappropriating our trade secrets and providing them to a competitor, and recourse we take against such misconduct may not provide an adequate remedy to protect our interests fully. Enforcing a claim that a party illegally disclosed or misappropriated a trade secret can be difficult, expensive, and time-consuming, and the outcome is unpredictable. In addition, courts outside the United States may be less willing to protect trade secrets, with protection varying across Europe and in other countries. Trade secrets may be independently developed by others in a manner that could prevent legal recourse by us. If any of our confidential or proprietary information, such as our trade secrets, were to be disclosed or misappropriated, or if any such information was independently developed by a competitor, our competitive position could be harmed.

We will not seek to protect our intellectual property rights in all jurisdictions throughout the world and we may not be able to adequately enforce our intellectual property rights even in the jurisdictions where we seek protection.

Filing, prosecuting and defending patents on our product candidates in all countries and jurisdictions throughout the world would be prohibitively expensive, and our intellectual property rights in some countries could be less extensive than those in the United States and Europe, assuming that rights are obtained in the United States and Europe. Furthermore, even if patents are granted based on our European patent applications, we may not choose to perfect or maintain our rights in all available European countries. In addition, the laws of some foreign countries do not protect intellectual property rights to the same extent as laws in the United States and Europe. Consequently, we may not be able to prevent third parties from practicing our inventions in all countries, or from selling or importing products made using our inventions. The statutory deadlines for pursuing patent protection in individual foreign jurisdictions are based on the priority dates of each of our patent applications.

Competitors may use our technologies in jurisdictions where we do not pursue and obtain patent protection to develop their own products and further, may export otherwise infringing products to territories where we have patent protection, but enforcement is not as strong as that in the United States and Europe. These products may compete with our products and our patents or other intellectual property rights may not be effective or sufficient to prevent them from competing. Even if we pursue and obtain issued patents in particular jurisdictions, our patent claims or other intellectual property rights may not be effective or sufficient to prevent third parties from so competing.

The laws of some foreign countries do not protect intellectual property rights to the same extent as the laws of the United States and Europe. Many companies have encountered significant problems in protecting and defending intellectual property rights in certain foreign jurisdictions. The legal systems of some countries, particularly developing countries, do not favor the enforcement of patents and other intellectual property protection, especially those relating to pharmaceuticals or biotechnologies. This could make it difficult for us to stop the infringement of our patents, if obtained, or the misappropriation of our other intellectual property rights. For example, many foreign countries have compulsory licensing laws under which a patent owner must grant licenses to third parties. In addition, many countries limit the enforceability of patents against third parties, including government agencies or government contractors. In these countries, patents may provide limited or no benefit. Patent protection must ultimately be sought on a country-by-country basis, which is an expensive and time-consuming process with uncertain outcomes. Accordingly, we may choose not to seek patent protection in certain countries, and we will not have the benefit of patent protection in such countries.

Proceedings to enforce our patent rights in foreign jurisdictions could result in substantial costs and divert our efforts and attention from other aspects of our business, could put our patents at risk of being invalidated or interpreted narrowly, could put our patent applications at risk of not issuing and could provoke third parties to assert claims against us. We may not prevail in any lawsuits that we initiate and the damages or other remedies awarded, if any, may not be commercially meaningful. In addition, changes in

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the law and legal decisions by courts in the United States, Europe and other jurisdictions may affect our ability to obtain adequate protection for our technology and the enforcement of intellectual property. Accordingly, our efforts to enforce our intellectual property rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual property that we develop or license.

We may be subject to claims by third parties asserting ownership or commercial rights to inventions we develop or obligations to make compensatory payments to employees.

Third parties may in the future make claims challenging the inventorship or ownership of our intellectual property. We have written agreements with collaborators that provide for the ownership of intellectual property arising from our collaborations. These agreements provide that we must negotiate certain commercial rights with collaborators with respect to joint inventions or inventions made by our collaborators that arise from the results of the collaboration. In some instances, there may not be adequate written provisions to address clearly the resolution of intellectual property rights that may arise from a collaboration. If we cannot successfully negotiate sufficient ownership and commercial rights to the inventions that result from our use of a third-party collaborator's materials where required, or if disputes otherwise arise with respect to the intellectual property developed with the use of a collaborator's samples, we may be limited in our ability to capitalize on the market potential of these inventions. In addition, we may face claims by third parties that our agreements with employees, contractors, or consultants obligating them to assign intellectual property to us are ineffective, or in conflict with prior or competing contractual obligations of assignment, which could result in ownership disputes regarding intellectual property we have developed or will develop and interfere with our ability to capture the commercial value of such inventions. Litigation may be necessary to resolve an ownership dispute, and if we are not successful, we may be precluded from using certain intellectual property, or may lose our exclusive rights in that intellectual property. Either outcome could have an adverse impact on our business.

While it is our policy to require our employees and contractors who may be involved in the development of intellectual property to execute agreements assigning such intellectual property to us, we may be unsuccessful in executing or obtaining such an agreement with each party who, in fact, develops intellectual property that we regard as our own. In addition, such agreements may be breached or may not be self-executing, and we may be forced to bring claims against third parties, or defend claims they may bring against us, to determine the ownership of what we regard as our intellectual property. If we fail in prosecuting or defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights or personnel.

Third parties may assert that our employees or consultants have wrongfully used or disclosed confidential information or misappropriated trade secrets.

We employ individuals who were previously employed at universities, pharmaceutical companies or biopharmaceutical companies, including our competitors or potential competitors. Although we try to ensure that our employees and consultants do not use the proprietary information or know-how of others in their work for us, we may be subject to claims that we or our employees, consultants or independent contractors have inadvertently or otherwise used or disclosed intellectual property, including trade secrets or other proprietary information, of a former employer or other third parties. Litigation may be necessary to defend against these claims. If we fail in defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights or personnel. Even if we are successful in defending against such claims, litigation could result in substantial costs and be a distraction to management and other employees.

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A dispute concerning the infringement or misappropriation of our proprietary rights or the proprietary rights of others could be time consuming and costly, and an unfavorable outcome could harm our business.

Our success will depend in part on our ability to operate without infringing the intellectual property and proprietary rights of third parties. We cannot assure you that our business, products and methods do not or will not infringe the patents or other intellectual property rights of third parties.

There is significant litigation in the pharmaceutical industry regarding patent and other intellectual property rights. While we are not currently subject to any pending intellectual property litigation, and are not aware of any such threatened litigation, we may be exposed to future litigation by third parties based on claims that our product candidates, technologies or activities infringe the intellectual property rights of others. If our development activities are found to infringe any such intellectual property rights, we may have to pay significant damages or seek licenses to such rights. For example, a patentee could prevent us from using the patented drugs or compositions. We may need to resort to litigation to enforce a patent issued to us, to protect our trade secrets, or to determine the scope and validity of third-party proprietary rights. From time to time, we may hire scientific personnel or consultants formerly employed by other companies involved in one or more areas similar to the activities conducted by us. Either we or these individuals may be subject to allegations of trade secret misappropriation or other similar claims as a result of prior affiliations. Even if we are successful in these proceedings, we may incur substantial costs and divert management time and attention in pursuing these proceedings, which could have a material adverse effect on us. If we are unable to avoid infringing the rights of others, we may be required to seek a license, defend an infringement action or challenge the validity of such rights in court, or redesign our products. Patent and other intellectual property litigation is costly and time consuming. We may not have sufficient resources to bring these actions to a successful conclusion. Any adverse ruling or perception of an adverse ruling in defending ourselves against these claims could have a material adverse impact on our cash position and the price of our ordinary shares or ADSs. Any legal action against us or our collaborators could lead to:

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    payment of substantial damages for past use of the asserted intellectual property and potentially treble damages, if we are found to have willfully infringed a party's patent rights;

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    injunctive or other equitable relief that may effectively block our ability to further develop, commercialize, and sell our product candidates; or

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    us or our collaborators having to enter into license arrangements that may not be available on commercially acceptable terms, if at all, all of which could have a material adverse impact on our cash position and business and financial condition. As a result, we could be prevented from commercializing current or future product candidates.

Any of these risks coming to fruition could have a material adverse effect on our business, results of operations, financial condition and prospects.

Issued patents covering our product candidates could be found to be invalid or unenforceable if challenged in court.

If we or one of our licensing partners initiated legal proceedings against a third party to enforce a patent covering our product candidate, the defendant could counterclaim that the patent covering our product candidate is invalid and/or unenforceable. In patent litigation, defendant counterclaims alleging invalidity and/or unenforceability are commonplace. Grounds for a validity challenge include alleged failures to meet any of several statutory requirements in most jurisdictions, including lack of novelty, obviousness or non-enablement. In the United States, grounds for unenforceability assertions include allegations that someone connected with prosecution of the patent withheld relevant information from the USPTO, or made a misleading statement, during prosecution. Third parties may also raise similar claims before administrative bodies in the United States or abroad, even outside the context of litigation. Such mechanisms include re-examination, post grant review and equivalent proceedings in foreign jurisdictions (e.g., opposition proceedings). Such proceedings could result in revocation or amendment of our patents in such a way that

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they no longer cover our product candidates or competitive products. The outcome following legal assertions of invalidity and unenforceability is unpredictable. With respect to validity, for example, we cannot be certain that there is no invalidating prior art, of which we and the patent examiner were unaware during prosecution. If a defendant were to prevail on a legal assertion of invalidity and/or unenforceability, we would lose at least part, and perhaps all, of the patent protection on our product candidates. Such a loss of patent protection would have a material adverse impact on our business.

Patent terms may be inadequate to protect our competitive position on our product candidates for an adequate amount of time.

Given the amount of time required for the development, testing and regulatory review of new product candidates such as lanifibranor and odiparcil, patents protecting such candidates might expire before or shortly after such candidates are commercialized. We expect to seek extensions of patent terms in the United States and, if available, in other countries where we are prosecuting patents. In the United States, the Drug Price Competition and Patent Term Restoration Act of 1984 permits extension of the term of one U.S. patent that includes at least one claim covering the composition of matter of an FDA-approved drug, an FDA-approved method of treatment using the drug and/or a method of manufacturing the FDA-approved drug. The extended patent term cannot exceed the shorter of five years beyond the non-extended expiration of the patent or 14 years from the date of the FDA approval of the drug. However, the applicable authorities, including the FDA and the USPTO in the United States, and any equivalent regulatory authority in other countries, may not agree with our assessment of whether such extensions are available, and may refuse to grant extensions to our patents, or may grant more limited extensions than we request. Further, we may not elect to extend the most beneficial patent to us or the claims underlying the patent that we choose to extend could be invalidated. If any of the foregoing occurs, our competitors may be able to take advantage of our investment in development and clinical trials by referencing our clinical and pre-clinical data and launch their drug earlier than might otherwise be the case.

Intellectual property rights do not address all potential threats to any competitive advantage we may have.

The degree of future protection afforded by our intellectual property rights is uncertain because intellectual property rights have limitations, and intellectual property rights may not adequately protect our business or permit us to maintain our competitive advantage. The following examples are illustrative:

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    Others may be able to make compounds that are the same as or similar to our current or future product candidates but that are not covered by the claims of the patents that we own or have exclusively licensed.

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    We or any of our licensors or collaborators might not have been the first to make the inventions covered by the issued patent or pending patent application that we own or have exclusively licensed.

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    We or any of our licensors or collaborators might not have been the first to file patent applications covering certain of our inventions.

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    Others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our intellectual property rights.

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    The prosecution of our pending patent applications may not result in granted patents.

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    Granted patents that we own or have exclusively licensed may not provide us with any competitive advantages, or may be held invalid or unenforceable, as a result of legal challenges by our competitors.

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    Patent protection on our product candidates may expire before we are able to develop and commercialize the product, or before we are able to recover our investment in the product.

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    §
    Our competitors might conduct research and development activities in the United States and other countries that provide a safe harbor from patent infringement claims for such activities, as well as in countries in which we do not have patent rights, and may then use the information learned from such activities to develop competitive products for sale in markets where we intend to market our product candidates.

If our trademarks and trade names are not adequately protected, then we may not be able to build name recognition in our markets of interest and our business may be adversely affected.

Our registered or unregistered trademarks or trade names may be challenged, infringed, circumvented or declared generic or determined to be infringing on other marks. We may not be able to protect our rights to these trademarks and trade names, which we need to build name recognition by potential collaborators or customers in our markets of interest. For example, we have not yet registered our company name as a trademark with the U.S. Patent and Trademark Office. Over the long term, if we are unable to establish name recognition based on our trademarks and trade names, then we may not be able to compete effectively and our business may be adversely affected. In addition, some of our trademarks may conflict with trademarks of others. In the event of a conflict, a third party could bring claims against us that could cause us to incur substantial expenses or restrict our ability to use certain marks. Any of the foregoing could have an adverse effect on our business.

Risks Related to Our Organization, Structure and Operation

Our future success depends on our ability to retain the members of our management and to attract, retain and motivate qualified personnel. If we are not successful in attracting and retaining highly qualified personnel, we may not be able to successfully implement our business strategy.

Our industry has experienced a high rate of turnover of management personnel in recent years. Our ability to compete in the highly competitive biotechnology and pharmaceutical industries depends upon our ability to attract and retain highly qualified managerial, scientific and medical personnel. We are highly dependent on our management, scientific and medical personnel, especially our executive officers: Frédéric Cren, our Chief Executive Officer, and Pierre Broqua, our Deputy Chief Executive Officer and Chief Scientific Officer, whose services are critical to the successful implementation of our product candidate acquisition, development and regulatory strategies. We are not aware of any present intention of any of these individuals to leave our company. Although we maintain "key man" insurance with respect to certain of our key employees, this insurance may be insufficient to compensate us for the losses we may incur if we no longer have the services of such key employees. In order to induce valuable employees to continue their employment with us, we have provided founder's share warrants (bons de souscription de parts de créateur d'entreprise), share warrants (bons de souscription d'actions) and free shares (actions gratuites) that vest over time. The value to employees of such warrants and free shares that vest over time is significantly affected by movements in our share price that are beyond our control, and may at any time be insufficient to counteract more lucrative offers from other companies.

Despite our efforts to retain valuable employees, members of our management, scientific and development teams may terminate their employment with us. The loss of the services of any of the members of management or other key employees and our inability to find suitable replacements could harm our business, financial condition and prospects. Our success also depends on our ability to continue to attract, retain and motivate highly skilled junior, mid-level, and senior managers as well as junior, mid-level, and senior scientific and medical personnel.

We may not be able to attract or retain qualified management and scientific personnel in the future due to the intense competition for a limited number of qualified personnel among biopharmaceutical, biotechnology, pharmaceutical and other businesses. Many of the other pharmaceutical companies that we compete against for qualified personnel have greater financial and other resources, different risk profiles and a longer history in the industry than we do. They also may provide more diverse opportunities and better

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chances for career advancement. Some of these characteristics may be more appealing to high quality candidates than what we have to offer. If we are unable to continue to attract and retain high quality personnel, the rate and success at which we can develop and commercialize product candidates will be limited.

If we fail to manage our growth effectively, our ability to develop and commercialize products could suffer.

We expect that if our drug discovery efforts continue to generate drug candidates, our clinical drug candidates continue to progress in development, and we continue to build our development, medical and commercial organizations, we will require significant additional investment in personnel, management and resources. Our ability to achieve our research, development and commercialization objectives depends on our ability to respond effectively to these demands and expand our internal organization, systems, controls and facilities to accommodate additional anticipated growth. If we are unable to manage our growth effectively, our business could be harmed and our ability to execute our business strategy could suffer.

If product liability lawsuits are brought against us, we may incur substantial liabilities and may be required to limit commercialization of any of our product candidates, if approved.

We face an inherent risk of product liability as a result of the clinical testing of our product candidates and will face an even greater risk if we commercialize any products. For example, we may be sued if any product we develop allegedly causes injury or is found to be otherwise unsuitable during product testing, manufacturing, marketing or sale. Any such product liability claims may include allegations of defects in manufacturing, defects in design, a failure to warn of dangers inherent in the product, negligence, strict liability and a breach of warranties. Physicians and patients may not comply with any warnings that identify known potential adverse effects and patients who should not use our products. Claims could also be asserted under state consumer protection acts. If we cannot successfully defend ourselves against product liability claims, we may incur substantial liabilities or be required to stop development or, if approved, limit commercialization of our product candidates. Even successful defense would require significant financial and management resources. Regardless of the merits or eventual outcome, liability claims may result in:

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    delay or termination of clinical trials;

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    injury to our reputation;

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    withdrawal of clinical trial participants;

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    initiation of investigations by regulators;

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    costs to defend the related litigation;

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    a diversion of management's time and our resources;

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    substantial monetary awards to trial participants or patients;

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    decreased demand for our product candidates;

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    product recalls, withdrawals or labeling, marketing or promotional restrictions;

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    loss of revenues from product sales; and

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    the inability to commercialize any our product candidates, if approved.

Our inability to obtain and retain sufficient product liability insurance at an acceptable cost to protect against potential product liability claims could prevent or inhibit the development or commercialization of our product candidates. We currently carry clinical trial liability insurance at levels which we believe are appropriate for our clinical trials. Although we maintain such insurance, any claim that may be brought against us could result in a court judgment or settlement in an amount that is not covered, in whole or in part, by our insurance or that is in excess of the limits of our insurance coverage. Our insurance policies

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also have various exclusions, and we may be subject to a product liability claim for which we have no coverage. We will have to pay any amounts awarded by a court or negotiated in a settlement that exceed our coverage limitations or that are not covered by our insurance, and we may not have, or be able to obtain, sufficient capital to pay such amounts.

Risks from the improper conduct of employees, agents, contractors, or collaborators could adversely affect our reputation and our business, prospects, operating results, and financial condition.

We cannot ensure that our compliance controls, policies, and procedures will in every instance protect us from acts committed by our employees, agents, contractors, or collaborators that would violate the laws or regulations of the jurisdictions in which we operate, including, without limitation, healthcare, employment, foreign corrupt practices, environmental, competition, and patient privacy and other privacy laws and regulations. Such improper actions could subject us to civil or criminal investigations, and monetary and injunctive penalties, and could adversely impact our ability to conduct business, operating results, and reputation.

In particular, our business activities may be subject to the Foreign Corrupt Practices Act, or FCPA, and similar anti-bribery or anti-corruption laws, regulations or rules of other countries in which we operate, including the U.K. Bribery Act. The FCPA generally prohibits offering, promising, giving, or authorizing others to give anything of value, either directly or indirectly, to a non-U.S. government official in order to influence official action, or otherwise obtain or retain business. The FCPA also requires public companies to make and keep books and records that accurately and fairly reflect the transactions of the corporation and to devise and maintain an adequate system of internal accounting controls. Our business is heavily regulated and therefore involves significant interaction with public officials, including officials of non-U.S. governments. Additionally, in many other countries, the health care providers who prescribe pharmaceuticals are employed by their government, and the purchasers of pharmaceuticals are government entities; therefore, our dealings with these prescribers and purchasers are subject to regulation under the FCPA. Recently the Securities and Exchange Commission, or SEC, and Department of Justice have increased their FCPA enforcement activities with respect to pharmaceutical companies. There is no certainty that all of our employees, agents, contractors, or collaborators, or those of our affiliates, will comply with all applicable laws and regulations, particularly given the high level of complexity of these laws. Violations of these laws and regulations could result in significant administrative, civil and criminal fines and sanctions against us, our officers, or our employees, the closing down of our facilities, requirements to obtain export licenses, cessation of business activities in sanctioned countries, exclusion from participation in federal healthcare programs including Medicare and Medicaid, implementation of compliance programs, integrity oversight and reporting obligations, and prohibitions on the conduct of our business. Any such violations could include prohibitions on our ability to offer our products in one or more countries and could materially damage our reputation, our brand, our international expansion efforts, our ability to attract and retain employees, and our business, prospects, operating results and financial condition.

We could be subject to liabilities under environmental, health and safety laws or regulations, or fines, penalties or other sanctions, if we fail to comply with such laws or regulations or otherwise incur costs that could have a material adverse effect on the success of our business.

We are subject to numerous French and U.S. federal, state, local and foreign environmental, health and safety laws, regulations, and permitting requirements, including those governing laboratory procedures, decontamination activities and the handling, transportation, use, remediation, storage, treatment and disposal of hazardous materials and wastes. Our operations involve the use of hazardous and flammable materials, including chemicals, radioactive isotopes and biological materials and produce hazardous waste products. We generally contract with third parties for the disposal of these materials and wastes. We cannot eliminate the risk of contamination or injury from these materials or wastes either at our sites or at third party disposal sites. In the event of such contamination or injury, we could be held liable for any resulting damages, and any liability could exceed our resources. We also could incur significant costs associated with

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civil or criminal fines and penalties. Although we maintain workers' compensation insurance to cover us for costs and expenses we may incur due to injuries to our employees resulting from the use of hazardous materials or other work-related injuries, this insurance may not provide adequate coverage against potential liabilities.

In addition, we may incur substantial costs in order to comply with current or future environmental, health and safety laws, regulations or permitting requirements. These current or future laws, regulations and permitting requirements may impair our research, development or production efforts. Failure to comply with these laws, regulations and permitting requirements also may result in substantial fines, penalties or other sanctions.

Failure to comply with health and data protection laws and regulations could lead to government enforcement actions (which could include civil or criminal penalties), private litigation, and/or adverse publicity and could negatively affect our operating results and business.

We and any potential collaborators may be subject to federal, state, and foreign data protection laws and regulations (i.e., laws and regulations that address privacy and data security). In the United States, numerous federal and state laws and regulations, including federal health information privacy laws, state data breach notification laws, state health information privacy laws, and federal and state consumer protection laws (e.g., Section 5 of the Federal Trade Commission Act), that govern the collection, use, disclosure and protection of health-related and other personal information could apply to our operations or the operations of our collaborators. In addition, we may obtain health information from third parties (including research institutions from which we obtain clinical trial data) that are subject to privacy and security requirements under federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009, or HITECH. Depending on the facts and circumstances, we could be subject to civil, criminal, and administrative penalties if we knowingly obtain, use, or disclose individually identifiable health information maintained by a HIPAA-covered entity in a manner that is not authorized or permitted by HIPAA.

Several foreign jurisdictions, including the European Union, or the EU, its member states, the United Kingdom and Australia, among others, have adopted legislation and regulations that increase or change the requirements governing the collection, use, disclosure and transfer of the personal information of individuals in these jurisdictions. In the United States, the state of California enacted legislation, the California Consumer Protection Act, or CCPA, effective January 1, 2020, that increases the requirements governing the collection, use, disclosure and transfer of the personal information of individuals in the state of California. These laws and regulations are complex and change frequently, at times due to changes in political climate, and existing laws and regulations are subject to different and conflicting interpretations, which adds to the complexity of processing personal data from these jurisdictions. These laws have the potential to increase costs of compliance, risks of noncompliance and penalties for noncompliance.

The Regulation (EU) 2016/679, known as the General Data Protection Regulation, or GDPR, as well as EU Member State implementing legislations, apply to the collection and processing of personal data, including health-related information, by companies located in the EU, or in certain circumstances, by companies located outside of the EU and processing personal information of individuals located in the EU.

These laws impose strict obligations on the ability to process personal data, including health-related information, in particular in relation to their collection, use, disclosure and transfer. These include several requirements relating to (1) obtaining, in some situations, the consent of the individuals to whom the personal data relates, (2) the information provided to the individuals about how their personal information is used, (3) ensuring the security and confidentiality of the personal data, (4) the obligation to notify regulatory authorities and affected individuals of personal data breaches, (5) extensive internal privacy governance obligations, and (6) obligations to honor rights of individuals in relation to their personal data (for example, the right to access, correct and delete their data). The GDPR prohibits the transfer of personal

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data to countries outside of the European Economic Area, or EEA, such as the United States, which are not considered by the European Commission to provide an adequate level of data protection. Switzerland has adopted similar restrictions. Although there are legal mechanisms to allow for the transfer of personal data from the EEA and Switzerland to the United States, they are subject to legal challenges and uncertainty about compliance with EU data protection laws remains.

Also, in certain countries, in particular France, the conduct of clinical trials is subject to compliance with specific provisions of the Act No.78-17 of 6 January 1978 on Information Technology, Data Files and Civil Liberties, as amended, and in particular Section 3 of the Chapter III of the Title II relating to the processing of personal data in the health sector. These provisions require, among others, the filing of compliance undertakings with "standard methodologies" adopted by the French Data Protection Authority (the CNIL), or, if not complying, obtaining a specific authorization from the CNIL.

Potential pecuniary fines for noncompliant companies may be up to the greater of €20 million or 4% of annual global revenue. The GDPR has increased our responsibility and liability in relation to personal data that we process, and we may be required to put in place additional potential mechanisms to ensure compliance with the new EU data protection rules.

Compliance with U.S. and international data protection laws and regulations could require us to take on more onerous obligations in our contracts, restrict our ability to collect, use and disclose data, or in some cases, impact our ability to operate in certain jurisdictions. Failure to comply with these laws and regulations could result in government enforcement actions (which could include civil, criminal and administrative penalties), private litigation, and/or adverse publicity and could negatively affect our operating results and business. Moreover, clinical trial subjects, employees and other individuals about whom we or our potential collaborators obtain personal information, as well as the providers who share this information with us, may limit our ability to collect, use and disclose the information. Claims that we have violated individuals' privacy rights, failed to comply with data protection laws, or breached our contractual obligations, even if we are not found liable, could be expensive and time-consuming to defend and could result in adverse publicity that could harm our business.

Our current and future operations are subject to applicable fraud and abuse, transparency, government price reporting, and other healthcare laws and regulations. If we are unable to comply, or have not fully complied, with such laws, we could face substantial penalties.

Healthcare providers, physicians and third-party payors will play a primary role in the recommendation and prescription of any future drug candidates we may develop and any drug candidates for which we obtain marketing approval. Our current and future arrangements with healthcare providers, physicians, third-party payors and customers may expose us to broadly applicable fraud and abuse and other healthcare laws and regulations that may affect the business or financial arrangements and relationships through which we would market, sell and distribute our products. Even though we do not and will not control referrals of healthcare services or bill directly to Medicare, Medicaid or other third-party payors, federal and state healthcare laws and regulations pertaining to fraud and abuse and patients' rights are and will be applicable to our business. The laws that may affect our ability to operate include, but are not limited to:

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    The federal Anti-Kickback Statute, which prohibits any person or entity from, among other things, knowingly and willfully soliciting, receiving, offering or paying any remuneration, directly or indirectly, overtly or covertly, in cash or in kind, to induce or reward either the referral of an individual for, or the purchase, order or recommendation of an item or service reimbursable, in whole or in part, under a federal healthcare program, such as the Medicare and Medicaid programs. The term "remuneration" has been broadly interpreted to include anything of value. The federal Anti-Kickback Statute has also been interpreted to apply to arrangements between pharmaceutical manufacturers on the one hand and prescribers, purchasers, and formulary managers on the other hand. There are a

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      number of statutory exceptions and regulatory safe harbors protecting some common activities from prosecution.

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    Federal civil and criminal false claims laws, such as the False Claims Act, or FCA, which can be enforced by private citizens through civil qui tam actions and civil monetary penalty laws, prohibit individuals or entities from, among other things, knowingly presenting, or causing to be presented, false, fictitious or fraudulent claims for payment of federal funds, and knowingly making, using or causing to be made or used a false record or statement material to a false or fraudulent claim to avoid, decrease or conceal an obligation to pay money to the federal government. For example, pharmaceutical companies have been prosecuted under the FCA in connection with their alleged off-label promotion of drugs, purportedly concealing price concessions in the pricing information submitted to the government for government price reporting purposes, and allegedly providing free product to customers with the expectation that the customers would bill federal health care programs for the product. In addition, a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the FCA. As a result of a modification made by the Fraud Enforcement and Recovery Act of 2009, a claim includes "any request or demand" for money or property presented to the U.S. government. In addition, manufacturers can be held liable under the FCA even when they do not submit claims directly to government payors if they are deemed to "cause" the submission of false or fraudulent claims.

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    HIPAA, among other things, imposes criminal liability for executing or attempting to execute a scheme to defraud any healthcare benefit program, including private third-party payors, knowingly and willfully embezzling or stealing from a healthcare benefit program, willfully obstructing a criminal investigation of a healthcare offense, and creates federal criminal laws that prohibit knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false, fictitious or fraudulent statement or representation, or making or using any false writing or document knowing the same to contain any materially false, fictitious or fraudulent statement or entry in connection with the delivery of or payment for healthcare benefits, items or services.

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    HIPAA, as amended by HITECH, and their implementing regulations, which impose privacy, security and breach reporting obligations with respect to individually identifiable health information upon entities subject to the law, such as health plans, healthcare clearinghouses and certain healthcare providers, known as covered entities, and their respective business associates that perform services for them that involve individually identifiable health information. HITECH also created new tiers of civil monetary penalties, amended HIPAA to make civil and criminal penalties directly applicable to business associates, and gave state attorneys general new authority to file civil actions for damages or injunctions in U.S. federal courts to enforce HIPAA laws and seek attorneys' fees and costs associated with pursuing federal civil actions.

    §
    Federal and state consumer protection and unfair competition laws, which broadly regulate marketplace activities and activities that potentially harm consumers.

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    The federal transparency requirements under the Physician Payments Sunshine Act, created under the Affordable Care Act, which requires, among other things, certain manufacturers of drugs, devices, biologics and medical supplies reimbursed under Medicare, Medicaid, or the Children's Health Insurance Program to report to CMS information related to payments and other transfers of value provided to physicians, as defined by such law, and teaching hospitals and physician ownership and investment interests, including such ownership and investment interests held by a physician's immediate family members.

    §
    State and foreign law equivalents of each of the above federal laws, such as anti-kickback and false claims laws, that may impose similar or more prohibitive restrictions, and may apply to items or services reimbursed by non-governmental third-party payors, including private insurers.

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    §
    State and foreign laws that require pharmaceutical companies to implement compliance programs, comply with the pharmaceutical industry's voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government, or to track and report gifts, compensation and other remuneration provided to physicians and other health care providers, marketing expenditures and/or drug pricing, state and local laws that require the registration of pharmaceutical sales representatives and other federal, state and foreign laws that govern the privacy and security of health information or personally identifiable information in certain circumstances, including state health information privacy and data breach notification laws which govern the collection, use, disclosure, and protection of health-related and other personal information, many of which differ from each other in significant ways and often are not pre-empted by HIPAA, thus requiring additional compliance efforts.

We have entered into consulting and scientific advisory board arrangements with physicians and other healthcare providers, including some who could influence the use of our drug candidates, if approved. Because of the complex and far-reaching nature of these laws, regulatory agencies may view these transactions as prohibited arrangements that must be restructured, or discontinued, or for which we could be subject to other significant penalties. We could be adversely affected if regulatory agencies interpret our financial relationships with providers who may influence the ordering and use of our drug candidates, if approved, to be in violation of applicable laws.

The scope and enforcement of each of these laws is uncertain and subject to rapid change in the current environment of healthcare reform. Federal and state enforcement bodies have recently increased their scrutiny of interactions between healthcare companies and healthcare providers, which has led to a number of investigations, prosecutions, convictions and settlements in the healthcare industry. Responding to investigations can be time-and resource-consuming and can divert management's attention from the business. Any such investigation or settlement could increase our costs or otherwise have an adverse effect on our business.

Ensuring that our business arrangements with third parties comply with applicable healthcare laws and regulations will likely be costly. If our operations are found to be in violation of any of these laws or any other current or future governmental laws and regulations that may apply to us, we may be subject to significant civil, criminal and administrative penalties, damages, fines, disgorgement, imprisonment, exclusion from government funded healthcare programs, such as Medicare and Medicaid, contractual damages, reputational harm, diminished profits and future earnings, additional reporting obligations and oversight if we become subject to a corporate integrity agreement or other agreement to resolve allegations of non-compliance with these laws, and the curtailment or restructuring of our operations, any of which could substantially disrupt our operations. If any of the physicians or other healthcare providers or entities with whom we expect to do business is found to be not in compliance with applicable laws, they may be subject to criminal, civil or administrative sanctions, including exclusions from government funded healthcare programs.

We must maintain effective internal control over financial reporting, and if we are unable to do so, the accuracy and timeliness of our financial reporting may be adversely affected, which could have a material adverse effect on our business, investor confidence and market price.

We must maintain effective internal control over financial reporting in order to accurately and timely report our results of operations and financial condition. In addition, once we are a U.S. public company, the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, will require, among other things, that we assess the effectiveness of our disclosure controls and procedures annually and the effectiveness of our internal control over financial reporting at the end of each fiscal year. We anticipate being first required to issue management's annual report on internal control over financial reporting, pursuant to Section 404 of the Sarbanes-Oxley Act, in connection with issuing our financial statements as of and for the year ending December 31, 2021.

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The rules governing the standards that must be met for our management to assess our internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act are complex and require significant documentation, testing and possible remediation. These stringent standards require that our audit committee be advised and regularly updated on management's review of internal control over financial reporting. We plan to design, implement and test our internal control over financial reporting in order to comply with this obligation. This process will be time-consuming, costly and complicated. In addition, our independent registered public accounting firm will be required to attest to the effectiveness of our internal controls over financial reporting beginning with our annual report following the date on which we are no longer an "emerging growth company," which may be up to five fiscal years following the date of this offering. Our management may not be able to effectively and timely implement controls and procedures that adequately respond to the increased regulatory compliance and reporting requirements that will be applicable to us as a U.S. public company. If we fail to staff our accounting and finance function adequately or maintain internal control over financial reporting adequate to meet the demands that will be placed upon us as a U.S. public company, including the requirements of the Sarbanes-Oxley Act, our business and reputation may be harmed and the price of our ordinary shares or ADSs may decline. Furthermore, investor perceptions of us may be adversely affected, which could cause a decline in the market price of our ordinary shares or ADSs.

The audit report included in this prospectus is prepared by an auditor who is not inspected by the Public Company Accounting Oversight Board and, as such, our investors are deprived of the benefits of such inspection.

Our independent registered public accounting firm that issues the audit report included in our prospectus filed with the SEC, as auditors of companies that are traded publicly in the United States and a firm registered with the Public Company Accounting Oversight Board (United States), or the PCAOB, is required by the laws of the United States to undergo regular inspections by the PCAOB to assess its compliance with the laws of the United States and professional standards. Because our auditors are located in France, a jurisdiction where the PCAOB is currently unable to conduct inspections due to the expiration of the cooperative arrangement with the French audit authority in December 2019 and the application of French privacy and data security laws, our auditors are not currently inspected by the PCAOB. Inspections of other firms that the PCAOB has conducted outside of France have identified deficiencies in those firms' audit procedures and quality control procedures. While we understand that the PCAOB is in discussions with relevant French authorities in order to permit the PCAOB to resume inspections in France, the current inability of the PCAOB to conduct inspections of auditors in France makes it more difficult to evaluate the effectiveness of our auditor's audit procedures or quality control procedures as compared to auditors outside France that are subject to PCAOB inspections. Investors may lose confidence in our reported financial information and procedures and the quality of our financial statements.

Our information technology systems could face serious disruptions that could adversely affect our business.

The United States federal and various state and foreign governments have adopted or proposed requirements regarding the collection, distribution, use, security, and storage of personally identifiable information and other data relating to individuals, and federal and state consumer protection laws are being applied to enforce regulations related to the collection, use, and dissemination of data. Despite the implementation of security measures, our information technology and other internal infrastructure systems, including corporate firewalls, servers, leased lines and connection to the Internet, face the risk of systemic failure that could disrupt our operations. If such an event were to occur and cause significant disruption in the availability of our information technology and other internal infrastructure systems, or result in the unauthorized disclosure of or access to personally identifiable information or individually identifiable health information (violating certain privacy laws such as GDPR), it could cause interruptions in our collaborations and delays in our research and development work. Some of the federal, state and foreign government requirements include obligations of companies to notify individuals of security breaches involving particular

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personally identifiable information, which could result from breaches experienced by us or by our vendors, contractors, or organizations with which we have formed strategic relationships. Even though we may have contractual protections with such vendors, contractors, or other organizations, notifications and follow-up actions related to a security breach could impact our reputation, cause us to incur significant costs, including legal expenses, harm customer confidence, hurt our expansion into new markets, cause us to incur remediation costs, or cause us to lose existing customers. The loss of product development or clinical trial data could result in delays in our regulatory approval efforts and significantly increase our costs to recover or reproduce the data. To the extent that any disruption or security breach were to result in a loss of, or damage to, our data or applications, or inappropriate disclosure of confidential or proprietary information, we could incur liability and our development programs and the development of our product candidates could be delayed, and we could be subject to significant fines, penalties or liabilities for any noncompliance to certain privacy and security laws.

Business interruptions could delay us in the process of developing our product candidates.

Loss of our laboratory facilities through fire or other causes could have an adverse effect on our ability to continue to conduct our business. We currently have insurance coverage to compensate us for such business interruptions; however, such coverage may prove insufficient to fully compensate us for the damage to our business resulting from any significant property or casualty loss to our facilities.

We may undertake strategic acquisitions in the future and any difficulties from integrating such acquisitions could adversely affect our share price, operating results and results of operations.

We may acquire companies, businesses and products that complement or augment our existing business. We may not be able to integrate any acquired business successfully or operate any acquired business profitably. Integrating any newly acquired business could be expensive and time-consuming. Integration efforts often take a significant amount of time, place a significant strain on managerial, operational and financial resources, result in loss of key personnel and could prove to be more difficult or expensive than we predict. The diversion of our management's attention and any delay or difficulties encountered in connection with any future acquisitions we may consummate could result in the disruption of our on-going business or inconsistencies in standards and controls that could negatively affect our ability to maintain third-party relationships. Moreover, we may need to raise additional funds through public or private debt or equity financing, or issue additional shares, to acquire any businesses or products, which may result in dilution for shareholders or the incurrence of indebtedness.

As part of our efforts to acquire companies, business or product candidates or to enter into other significant transactions, we conduct business, legal and financial due diligence with the goal of identifying and evaluating material risks involved in the transaction. Despite our efforts, we ultimately may be unsuccessful in ascertaining or evaluating all such risks and, as a result, might not realize the intended advantages of the transaction. If we fail to realize the expected benefits from acquisitions we may consummate in the future or have consummated in the past, whether as a result of unidentified risks or liabilities, integration difficulties, regulatory setbacks, litigation with current or former employees and other events, our business, results of operations and financial condition could be adversely affected. If we acquire product candidates, we will also need to make certain assumptions about, among other things, development costs, the likelihood of receiving regulatory approval and the market for such product candidates. Our assumptions may prove to be incorrect, which could cause us to fail to realize the anticipated benefits of these transactions.

In addition, we will likely experience significant charges to earnings in connection with our efforts, if any, to consummate acquisitions. For transactions that are ultimately not consummated, these charges may include fees and expenses for investment bankers, attorneys, accountants and other advisors in connection with our efforts. Even if our efforts are successful, we may incur, as part of a transaction, substantial charges for closure costs associated with elimination of duplicate operations and facilities and acquired in-process

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research and development charges. In either case, the incurrence of these charges could adversely affect our results of operations for particular periods.

Our international operations subject us to various risks, and our failure to manage these risks could adversely affect our results of operations.

We face significant operational risks as a result of doing business internationally, such as:

    §
    fluctuations in foreign currency exchange rates;

    §
    Differing payor reimbursement regimes, governmental payors or patient self-pay systems and price controls;

    §
    potentially adverse and/or unexpected tax consequences, including penalties due to the failure of tax planning or due to the challenge by tax authorities on the basis of transfer pricing and liabilities imposed from inconsistent enforcement;

    §
    potential changes to the accounting standards, which may influence our financial situation and results;

    §
    becoming subject to the different, complex and changing laws, regulations and court systems of multiple jurisdictions and compliance with a wide variety of foreign laws, treaties and regulations;

    §
    reduced protection of, or significant difficulties in enforcing, intellectual property rights in certain countries;

    §
    difficulties in attracting and retaining qualified personnel;

    §
    restrictions imposed by local labor practices and laws on our business and operations, including unilateral cancellation or modification of contracts;

    §
    rapid changes in global government, economic and political policies and conditions, political or civil unrest or instability, terrorism or epidemics and other similar outbreaks or events, and potential failure in confidence of our suppliers or customers due to such changes or events; and

    §
    tariffs, trade protection measures, import or export licensing requirements, trade embargoes and other trade barriers.

If we are unable to use tax loss carryforwards and/or tax credits to reduce future taxable income or benefit from favorable tax legislation, our business, results of operations and financial condition may be adversely affected.

At March 31, 2020, we had cumulative carry forward tax losses of €93.3 million in France. These are available to carry forward and offset against future taxable income for an indefinite period in France. If we are unable to use tax loss carryforwards to reduce future taxable income, our business, results of operations and financial condition may be adversely affected. In France, the use of these carry forward tax losses is capped at €1 million annually, plus 50% of the fraction of profits exceeding this limit. The unutilized balance of these tax losses can be carried forward to subsequent years and set-off under the same conditions without any time limits. However, it is possible that future fiscal changes could limit our ability to utilize the balance of any tax loses, which could adversely affect our results.

As a company active in research and development in France, we have benefited from certain research and development incentives including, for example, the French research tax credit (credit d'impôt recherche), or CIR. These tax credits can be used to offset French corporate income tax due. The excess portion beyond that used to offset corporate income tax due is generally refunded in cash at the end of a three-year fiscal period; however, as long as we are considered a small or medium-sized entity (petite ou moyenne entreprise) in France, the CIR tax credit is refundable in the fiscal year after it is generated, provided that we comply with eligibility requirements. The research and development incentives are calculated based on the amount

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of eligible research and development expenditures. The French CIR tax credit amounted to €4.3 million for the year ended December 31, 2019. In addition, the French tax authorities have audited in the past, and may again audit in the future, research and development programs in respect of which a tax credit has been claimed in order to assess whether it qualifies for the tax credit regime. The tax authorities may challenge our eligibility for, or our calculation of, certain tax reductions and/or deductions in respect of our research and development activities and expenditures, and should the French tax authorities be successful, we may be liable for additional corporate income tax, and penalties and interest related thereto, which could have a significant impact on our results of operations and future cash flows. For example, in August 2018, we received a collection notice in the amount of €1.9 million, including penalties and late payment interest, related to our CIRs for the 2013, 2014 and 2015 taxable years. As of March 31, 2020, we are still awaiting a decision concerning the ongoing procedures with the French tax authorities. Furthermore, if the French government decides to eliminate, or reduce the scope or the rate of, the research and development incentive benefit, either of which it could decide to do at any time, our results of operations could be adversely affected.

We may be exposed to significant foreign exchange risk.

We incur portions of our expenses, and may in the future derive revenues, in currencies other than the euro, in particular, the U.S. dollar. As a result, we are exposed to foreign currency exchange risk as our results of operations and cash flows are subject to fluctuations in foreign currency exchange rates. We currently do not engage in hedging transactions to protect against uncertainty in future exchange rates between particular foreign currencies and the euro. Therefore, for example, an increase in the value of the euro against the U.S. dollar could be expected to have a negative impact on our revenue and earnings growth as U.S. dollar revenue and earnings, if any, would be translated into euros at a reduced value. We cannot predict the impact of foreign currency fluctuations, and foreign currency fluctuations in the future may adversely affect our financial condition, results of operations and cash flows.

The requirements of being a U.S. public company may strain our resources and divert management's attention.

We are required to comply with various corporate governance and financial reporting requirements under the Sarbanes-Oxley Act, the Securities and Exchange Act of 1934, as amended, or the Exchange Act, and the rules and regulations adopted by the Securities and Exchange Commission and the Public Corporation Accounting Oversight Board. Further, compliance with various regulatory reporting requires significant commitments of time from our management and our directors, which reduces the time available for the performance of their other responsibilities. Our failure to track and comply with the various rules may materially adversely affect our reputation, ability to obtain the necessary certifications to financial statements, lead to additional regulatory enforcement actions, and could adversely affect the value of our ordinary shares or ADSs.

Risks Related to this Offering and Ownership of our Ordinary Shares and ADSs

There has been no prior active market for our ADSs and an active and liquid market for our ADSs may fail to develop, which could harm the market price of our ADSs.

Prior to this offering, while our ordinary shares have been traded on Euronext Paris since February 2017, there has been no active public market for our ordinary shares or ADSs in the United States. Although we anticipate our ADSs being approved for listing on Nasdaq an active trading market for our ADSs may never develop or be sustained following this offering. The initial public offering price of our ADSs will be based and determined through negotiations between us and the underwriters. This initial public offering price may not be indicative of the market price of our ordinary shares or ADSs after this offering. In the absence of an active trading market for our ADSs, investors may not be able to sell their ADSs at or above the initial public offering price or at the time that they would like to sell.

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The market price of our equity securities may be volatile, and purchasers of our ordinary shares or ADSs or could incur substantial losses.

The market price for our ordinary shares and ADSs may be volatile. The stock market in general and the market for biopharmaceutical companies in particular have experienced extreme volatility that has often been unrelated to the operating performance of particular companies. As a result of this volatility, investors may not be able to sell their ordinary shares or ADSs at or above the price originally paid for the security. The market price for our ordinary shares and ADSs may be influenced by many factors, including:

    §
    actual or anticipated fluctuations in our financial condition and operating results;

    §
    actual or anticipated changes in our growth rate relative to our competitors;

    §
    competition from existing products or new products that may emerge;

    §
    announcements by us, our collaborators or our competitors of significant acquisitions, strategic partnerships, joint ventures, collaborations, or capital commitments;

    §
    failure to meet or exceed financial estimates and projections of the investment community or that we provide to the public;

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    issuance of new or updated research or reports by securities analysts;

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    fluctuations in the valuation of companies perceived by investors to be comparable to us;

    §
    share price and volume fluctuations attributable to inconsistent trading volume levels of our shares;

    §
    additions or departures of key management or scientific personnel;

    §
    disputes or other developments related to proprietary rights, including patents, litigation matters, and our ability to obtain patent protection for our technologies;

    §
    changes to coverage policies or reimbursement levels by commercial third-party payors and government payors and any announcements relating to coverage policies or reimbursement levels;

    §
    announcement or expectation of additional debt or equity financing efforts;

    §
    sales of our ordinary shares or ADSs by us, our insiders or our other shareholders;

    §
    the French foreign investment regime and current or future changes to the regime; and

    §
    general economic and market conditions.

These and other market and industry factors may cause the market price and demand for our ordinary shares or ADSs to fluctuate substantially, regardless of our actual operating performance, which may limit or prevent investors from readily selling their ordinary shares or ADSs and may otherwise negatively affect the liquidity of our capital shares.

If we do not achieve our projected development and commercialization goals in the timeframes we announce and expect, our business will be harmed and the price of our securities could decline as a result.

We sometimes estimate for planning purposes the timing of the accomplishment of various scientific, clinical, regulatory and other product development objectives. These milestones may include our expectations regarding the commencement or completion of scientific studies, clinical trials, the submission of regulatory filings, or commercialization objectives. From time to time, we may publicly announce the expected timing of some of these milestones, such as the completion of an ongoing clinical trial, the receipt of data from a clinical trial, the initiation of other clinical programs, receipt of marketing approval, or a commercial launch of a product. For example, data from our recently completed Phase IIb clinical trial of lanifibranor for the treatment of patients with NASH was delayed due to challenges in patient enrollment. The achievement of many of these milestones may be outside of our control. All of these milestones are

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based on a variety of assumptions which may cause the timing of achievement of the milestones to vary considerably from our estimates, including:

    §
    our available capital resources or capital constraints we experience;

    §
    the rate of progress, costs and results of our clinical trials and research and development activities, including the extent of scheduling conflicts with participating clinicians and collaborators, and our ability to identify and enroll patients who meet clinical trial eligibility criteria;

    §
    our receipt of approvals by the EMA, FDA and other regulatory agencies and the timing thereof;

    §
    other actions, decisions or rules issued by regulators;

    §
    our ability to access sufficient, reliable and affordable supplies of compounds and raw materials used in the manufacture of our product candidates;

    §
    the efforts of our collaborators with respect to the commercialization of our products; and

    §
    the securing of, costs related to, and timing issues associated with, product manufacturing as well as sales and marketing activities.

If we fail to achieve announced milestones in the timeframes we expect, the commercialization of our product candidates may be delayed, our business and results of operations may be harmed, and the trading price of our ordinary shares and ADSs may decline as a result.

After this offering, voting control with respect to our company will remain concentrated in the hands of Frédéric Cren, our Chief Executive Officer, Pierre Broqua, our Deputy Chief Executive Officer and Chief Scientific Officer, and our significant shareholders and affiliates who will continue to be able to exercise significant influence on us.

In accordance with French law, double voting rights automatically attach to each ordinary share of companies listed on a regulated market (such as the Euronext Paris, where our ordinary shares are listed) that is held of record in the name of the same shareholder for a period of at least two years, except as otherwise set forth in a company's bylaws. Our bylaws do not exclude such double voting rights. However, under French law, ordinary bearer shares in the form of ADSs are not eligible for double voting rights. To our knowledge, among our significant shareholders, double voting rights currently only attach to the 5,704,816 ordinary shares held by Frédéric Cren, our Chief Executive Officer, and to the 3,882,500 ordinary shares held by Pierre Broqua, our Deputy Chief Executive Officer and Chief Scientific Officer, as of March 31, 2020. Given the double voting rights per share attributed to ordinary shares held by Mr. Cren and Dr. Broqua, Mr. Cren and Dr. Broqua will together beneficially own approximately 25% of our outstanding ordinary shares (including ordinary shares underlying ADSs), but control approximately 38% of the voting rights of our outstanding share capital immediately following the completion of this offering, assuming in each case no exercise of the underwriters' option to purchase additional ADSs and/or ordinary shares in this offering. As a result, Mr. Cren and Dr. Broqua, if they act together, will have a significant influence over all matters that require approval by our shareholders, such as the election of directors and approval of significant corporate transactions. Such corporate action might be taken even if other shareholders, including those who purchase ordinary shares or ADSs in this offering, oppose them. This concentration of ownership might also have the effect of delaying or preventing a change of control of our company that other shareholders may view as beneficial. As members of our board of directors, Mr. Cren and Dr. Broqua have a duty to act without self-interest, on a well-informed basis and to not make any decision against our corporate interest (intérêt social) considering the interests of our shareholders, employees and other stakeholders as a whole. However, as shareholders, Mr. Cren and Dr. Broqua are entitled to vote their shares in their own interests, which may not always be in the interests of our shareholders generally. In addition, Mr. Cren and Dr. Broqua have the ability to control the management and major strategic investments of our company as a result of their positions as our Chief Executive Officer and Deputy Chief Executive Officer and Chief Scientific Officer, respectively.

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Further, we anticipate that our executive officers, directors, current 5% or greater shareholders and affiliated entities, including BVF Partners L.P., New Enterprise Associates, Novo Holdings A/S and Sofinnova Crossover I SLP, will together beneficially own approximately 62.2% of our outstanding ordinary shares (including ordinary shares underlying ADSs) and approximately 66.5% of the voting rights of our outstanding share capital immediately following the completion of this offering, assuming in each case no exercise of the underwriters' option to purchase additional ADSs and/or ordinary shares in this offering. As a result, these shareholders, if they act together, will have control over all matters that require approval of our shareholders.

This concentrated control will limit your ability to influence corporate matters for the foreseeable future and potentially in perpetuity, particularly because purchasers of ADSs or ordinary shares in this offering, in the open market following the completion of this offering or in subsequent offerings will be unlikely to meet the requirements to have double voting rights attach to any ordinary shares held by them. This concentrated control could also discourage a potential investor from acquiring our ADSs or ordinary shares and might harm the market price of our ADSs or ordinary shares. We cannot predict whether the concentrated control of our shareholders who held our ordinary shares prior to the completion of this offering, including our executive officers, employees and directors and their affiliates, will result in a lower or more volatile market price of our ADSs or ordinary shares or in adverse publicity or other adverse consequences.

We have not elected to take advantage of the "controlled company" exemption to the corporate governance rules for publicly-listed companies but may do so in the future.

Because Frédéric Cren, our Chief Executive Officer, and Pierre Broqua, our Deputy Chief Executive Officer and Chief Scientific Officer, may act in concert and collectively own in excess of 50% of the voting power of our outstanding share capital, we are eligible to elect the "controlled company" exemption to the corporate governance rules for publicly-listed companies. We have not elected to do so. However, we may decide to become a controlled company in the future, and our status as a controlled company could cause our ADSs or ordinary shares to be less attractive to certain investors or otherwise harm the trading price of our securities.

Fluctuations in the exchange rate between the U.S. dollar and the euro may increase the risk of holding our ordinary shares and ADSs.

Our ordinary shares currently trade on Euronext Paris in euros, while our ADSs will trade on Nasdaq in U.S. dollars. Fluctuations in the exchange rate between the U.S. dollar and the euro may result in temporary differences between the value of our ADSs and the value of our ordinary shares, which may result in heavy trading by investors seeking to exploit such differences.

In addition, as a result of fluctuations in the exchange rate between the U.S. dollar and the euro, the U.S. dollar equivalent of the proceeds that a holder of our ADSs would receive upon the sale in France of any ordinary shares withdrawn from the depositary and the U.S. dollar equivalent of any cash dividends paid in euros on our ordinary shares represented by our ADSs could also decline.

We have broad discretion in the use of the net proceeds from this offering and may not use them effectively.

Our management will have broad discretion in the application of the net proceeds that we receive from this offering, including applications for working capital, possible acquisitions and other general corporate purposes, and we may spend or invest these proceeds in a way with which our shareholders disagree. The failure by our management to apply these funds effectively could harm our business and financial condition. Pending their use, we may invest the net proceeds from this offering in a manner that does not produce income or that loses value. These investments may not yield a favorable return to our investors.

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If securities or industry analysts do not publish research or publish inaccurate research or unfavorable research about our business, the price of our ordinary shares and ADSs and trading volume could decline.

The trading market for our ordinary shares and ADSs depends in part on the research and reports that securities or industry analysts publish about us or our business. If no or few securities or industry analysts cover our company, the trading price for our ordinary shares and ADSs would be negatively impacted. If one or more of the analysts who covers us downgrades our ordinary shares and ADSs or publishes incorrect or unfavorable research about our business, the price of our ordinary shares and ADSs would likely decline. If one or more of these analysts ceases coverage of our company or fails to publish reports on us regularly, or downgrades our ordinary shares and ADSs, demand for our ordinary shares and ADSs could decrease, which could cause the price of our ordinary shares and ADSs or trading volume to decline.

We have no present intention to pay dividends on our ordinary shares in the foreseeable future and, consequently, your only opportunity to achieve a return on your investment during that time is if the price of our ordinary shares or ADSs, as applicable, appreciates.

We have never declared or paid any cash dividends on our ordinary shares and we have no present intention to pay dividends in the foreseeable future. Any recommendation by our board of directors to pay dividends will depend on many factors, including our financial condition (including losses carried-forward), results of operations, legal requirements and other factors. Further, under French law, the determination of whether we have been sufficiently profitable to pay dividends is made on the basis of our statutory financial statements prepared and presented in accordance with accounting standards applicable in France. In addition, payment of dividends may subject us to additional taxes under French law. Please see the section of this prospectus titled "Description of Share Capital — Key provisions of our bylaws and French law affecting our ordinary shares — Rights, preferences and restrictions attaching to ordinary shares (Articles 11, 14, 28, 31 and 32 of the bylaws)" for further details on the limitations on our ability to declare and pay dividends and the taxes that may become payable by us if we elect to pay a dividend. Therefore, we may be more restricted in our ability to declare dividends than companies not based in France. If the price of our ordinary shares or ADSs declines before we pay dividends, you will incur a loss on your investment, without the likelihood that this loss will be offset in part or at all by potential future cash dividends.

If you purchase our ADSs in the U.S. offering or ordinary shares in the European offering, you will experience substantial and immediate dilution.

If you purchase our ADSs in the U.S. offering or ordinary shares in the European offering, you will experience substantial and immediate dilution of $9.92 per ADS or €8.75 per ordinary share in the net tangible book value after giving effect to this offering at an assumed offering price of $13.68 per ADS in the U.S. offering and €12.16 per ordinary share in the European offering, based on the closing price of our ordinary shares on Euronext Paris (expressed in U.S. dollars, as applicable) on July 3, 2020, because the price that you pay will be substantially greater than the net tangible book value per ordinary share or per ADS, as applicable, that you acquire. This dilution is due in large part to the fact that our earlier investors paid substantially less than the offering price when they purchased their ordinary shares. You will experience additional dilution upon exercise of any outstanding founder's share warrants (bons de souscription de parts de créateur d'entreprise) and share warrants (bons de souscription d'actions) or acquisition of any free shares (actions gratuites) under our equity incentive plans, or if we otherwise issue additional shares below the public offering price. For a further description of the dilution that you will experience immediately after this offering, see the section of this prospectus titled "Dilution."

Future sales of ordinary shares or ADSs by existing shareholders could depress the market price of our ordinary shares and ADSs.

If our existing shareholders sell, or indicate an intent to sell, substantial amounts of ordinary shares or ADSs in the public market after the 90-day contractual lock-up and other legal restrictions on resale

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discussed in this prospectus lapse, the trading price of our ordinary shares and ADSs could decline significantly and could decline below the offering price. Upon completion of this offering, we will have outstanding 38,166,011 ordinary shares, approximately 25.3% of which are subject to the 90-day contractual lock-up referred to above. The representatives of the underwriters may permit us, our directors and our executive officers to sell shares prior to the expiration of the lock-up agreements. See "Underwriting."

After the lock-up agreements pertaining to this offering expire, and based on the number of ordinary shares outstanding upon completion of this offering, 11,858,566 additional shares will be eligible for sale in the public market, all of which shares are held by directors and executive officers and will be subject to volume limitations under Rule 144 under the Securities Act of 1933, as amended, or the Securities Act. In addition, the ordinary shares subject to outstanding founder's share warrants (bons de souscription de parts de créateur d'entreprise), share warrants (bons de souscription d'actions) and free shares (actions gratuites) issued under our equity incentive plans and the shares reserved for future issuance under our equity incentive plans will become eligible for sale in the public market in the future, subject to certain legal and contractual limitations.

Following this offering, we intend to file one or more registration statements with the SEC covering ordinary shares available for future issuance under our equity incentive plans. Upon effectiveness of such registration statements, any shares subsequently issued under such plans will be eligible for sale in the public market, except to the extent that they are restricted by the lock-up agreements referred to above and subject to compliance with Rule 144 in the case of our affiliates. Sales of a large number of the shares issued under these plans in the public market could have an adverse effect on the market price of our ordinary shares and ADSs.

See the section of this prospectus titled "Shares and ADSs eligible for future sale" for a more detailed description of sales that may occur in the future. If these additional shares or ADSs are sold, or if it is perceived that they will be sold, in the public market, the trading price of our ordinary shares and ADSs could decline substantially.

The rights of shareholders in companies subject to French corporate law differ in material respects from the rights of shareholders of corporations incorporated in the United States.

We are a French public limited company (société anonyme). Our corporate affairs are governed by our bylaws and by the laws governing companies incorporated in France. The rights of shareholders and the responsibilities of members of our board of directors are in many ways different from the rights and obligations of shareholders in companies governed by the laws of U.S. jurisdictions. For example, in the performance of its duties, our board of directors is required by French law to consider the interests of our company, its shareholders, its employees and other stakeholders, rather than solely our shareholders and/or creditors. It is possible that some of these parties will have interests that are different from, or in addition to, your interests as a shareholder or holder of ADSs. Further, in accordance with French law, double voting rights automatically attach to each ordinary share of companies listed on a regulated market (such as the Euronext Paris, where our ordinary shares are listed) that is held of record in the name (action au nominatif) of the same shareholder for a period of at least two years, except as otherwise set forth in a company's bylaws. Our bylaws currently do not exclude such double voting rights; however, the holders of two-thirds of our outstanding voting rights may vote to amend our bylaws to exclude such double voting rights at any extraordinary general meeting of our shareholders. See "Management — Corporate Governance Practices" and "Description of Share Capital."

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Our bylaws and French law contain provisions that may delay or discourage a takeover attempt.

Provisions contained in our bylaws and French corporate law could make it more difficult for a third-party to acquire us, even if doing so might be beneficial to our shareholders. In addition, provisions of our bylaws impose various procedural and other requirements, which could make it more difficult for shareholders to effect certain corporate actions. These provisions include the following:

    §
    under French law, the owner of 90% of the share capital and voting rights of a public company with registered seat in France and whose shares are listed on a regulated market in a Member State of the European Union or in a state party to the European Economic Area, or EEA, Agreement, including France, has the right to force out minority shareholders following a tender offer made to all shareholders;

    §
    under French law, a non-French resident must file a declaration for statistical purposes with the Bank of France (Banque de France) within twenty working days following the date of certain direct foreign investments in us, including any purchase of our ADSs. In particular, such filings are required in connection with investments exceeding €15 million that lead to the acquisition of at least 10% of our Company's share capital or voting rights or cross such 10% threshold; see the section of this prospectus titled "Limitations affecting shareholders of a French company";

    §
    under French law, certain investments in us by certain individuals or entities are subject to prior authorization of the Ministry of Economy pursuant to the decree n°2019-1590;

    §
    a merger (i.e., in a French law context, a stock for stock exchange following which our company would be dissolved into the acquiring entity and our shareholders would become shareholders of the acquiring entity) of our company into a company incorporated in the European Union would require the approval of our board of directors as well as a two-thirds majority of the votes held (of the votes cast, as from our general shareholders' meeting convened to vote on the financial statements for the year ended December 31, 2019) by the shareholders present, represented by proxy or voting by mail at the relevant meeting;

    §
    a merger of our company into a company incorporated outside of the European Union would require 100% of our shareholders to approve it;

    §
    under French law, a cash merger is treated as a share purchase and would require the consent of each participating shareholder;

    §
    our shareholders have granted and may grant in the future our board of directors broad authorizations to increase our share capital or to issue additional ordinary shares or other securities, such as warrants, to our shareholders, the public or qualified investors, including as a possible defense following the launching of a tender offer for our shares;

    §
    our shareholders have preferential subscription rights on a pro rata basis on the issuance by us of any additional securities for cash or a set-off of cash debts, which rights may only be waived by the extraordinary general meeting (by a two-thirds majority vote) of our shareholders or on an individual basis by each shareholder;

    §
    our Chief Executive Officer and Deputy Chief Executive Officer have double voting rights with respect to ordinary shares held by them, and their interests may not be aligned with those of our shareholders more generally with respect to a takeover attempt;

    §
    our board of directors has the right to appoint directors to fill a vacancy created by the resignation or death of a director, for the remaining duration of such director's term of office and subject to the approval by the shareholders of such appointment at the next shareholders' meeting, which prevents shareholders from having the sole right to fill vacancies on our board of directors;

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    §
    our board of directors can be convened by our chairman, or our managing director, if any, upon request made to the chairman or, when no board meeting has been held for more than three consecutive months, by directors representing at least one third of the total number of directors;

    §
    our board of directors meetings can only be regularly held if at least half of the directors attend either physically or by way of videoconference or teleconference enabling the directors' identification and ensuring their effective participation in the board's decisions;

    §
    our shares are nominative or bearer, if the legislation so permits, according to the shareholder's choice;

    §
    approval of at least a majority of the votes held (of the votes cast, as from our general shareholders' meeting convened to vote on the financial statements for the year ended December 31, 2019) by shareholders present, represented by a proxy, or voting by mail at the relevant ordinary shareholders' general meeting is required to remove directors with or without cause;

    §
    advance notice is required for nominations to the board of directors or for proposing matters to be acted upon at a shareholders' meeting, except that a vote to remove and replace a director can be proposed at any shareholders' meeting without notice;

    §
    our bylaws can be amended in accordance with applicable laws;

    §
    the crossing of certain thresholds has to be disclosed and can impose certain obligations; see "Description of Share Capital — Key provision of our bylaws and French law affecting our ordinary shares — Declaration of crossing of ownership thresholds (Article 11 of the bylaws)";

    §
    transfers of shares shall comply with applicable insider trading laws and regulations and, in particular, with the Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse, or Market Abuse Regulation;

    §
    the French foreign investment regime and current or future changes to the regime requiring prior approval for certain potential investors acquiring 25% of the voting interest in the Company; and

    §
    pursuant to French law, our bylaws, including the sections relating to the number of directors and election and removal of a director from office, may only be modified by a resolution adopted by at least a two-third majority of the votes held (of the votes cast, as from our general shareholders' meeting convened to vote on the financial statements for the year ended December 31, 2019) of our shareholders present, represented by a proxy or voting by mail at the meeting.

Existing and potential investors in our ordinary shares or ADSs may have to request the prior authorization from the French Ministry of Economy prior to acquiring a significant ownership position in our ordinary shares or ADSs.

Under French law, investments of more than 25% by certain individuals or entities in a French company deemed to be a strategic industry may be subject to prior authorization of the French Ministry of Economy pursuant to the decree n°2019-1590 pursuant to the French foreign investment regime. This threshold may be reduced to 10%.

On July 2, 2020, the French Ministry of Economy informed us that we are subject to this regulation. As a result, investors in our ordinary shares or ADSs will have to request the prior authorization of the French Ministry of Economy before acquiring our ordinary shares or ADSs if: (i) they are (a) a non-French citizen, (b) a French citizen not residing in France, (c) a non-French entity or (d) a French entity controlled by one of the aforementioned individuals or entities; and (ii) such investor (a) acquires control of us, (b) acquires all or part of one of our business lines or (c) is a non-EU or non-EEA investors crossing, directly or indirectly, alone or in concert, a 25% threshold of voting rights in us.

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This request for prior authorization must be filed with the French Ministry of Economy, which has 30 business days from receipt of the completed file to provide a first decision, which may (i) unconditionally authorize the investment or (ii) indicate that further examination is required. In the latter case, the French Ministry of Economy must make a second decision within 45 business days from its first decision. In case of lack of response from the French Ministry of Economy within the above mentioned timeframe, the authorization will be deemed refused. If the authorization is granted, it may be subject to the signature of a letter of undertaking aimed at protecting French national interests.

If an investment requiring the prior authorization of the French Minister of Economy is completed without such authorization having been granted, the French Minister of Economy might direct the relevant investor to nonetheless (i) submit a request for authorization, (ii) have the previous situation restored at its own expense or (iii) amend the investment. The relevant investor might also be found criminally liable and might be sanctioned with a fine which cannot exceed the greater of: (i) twice the amount of the relevant investment, (ii) 10% of the annual turnover before tax of the target company and (iii) €5 million (for an entity) or €1 million (for an individual).

Finally, on April 29, 2020, the French government announced that additional measures would be adopted in light of the COVID-19 crisis in order to protect French companies operating in strategic industries, such measures including lowering the above mentioned threshold in paragraph (ii)(c) from 25% to 10%. While these additional measures have not yet been published, the principal elements which have been rendered public are the following: (i) these measures would enter into force during the second half of 2020 and be applicable until the end of the year, (ii) these measures would not concern EU or EEA investors and (iii) the transactions falling within these additional measures would be subject to a "fast-track procedure".

Failure to comply with such measures could result in significant consequences on the applicable investor. Such measures could also delay or discourage a takeover attempt, and we cannot predict whether these measures will result in a lower or more volatile market price of our ADSs or ordinary shares.

Holders of our ADSs are not treated as shareholders of our company.

By participating in the U.S. offering you will become a holder of ADSs with underlying shares in a French public limited company (société anonyme). Holders of our ADSs are not treated as shareholders of our company, unless they withdraw the ordinary shares underlying our ADSs. The depositary, or its nominee, is the holder of the ordinary shares underlying our ADSs. Holders of ADSs therefore do not have any rights as shareholders of our company, other than the rights that they have pursuant to the deposit agreement.

You may not be able to exercise your right to vote the ordinary shares underlying your ADSs.

Holders of ADSs may exercise voting rights with respect to the ordinary shares represented by the ADSs only in accordance with the provisions of the deposit agreement. The deposit agreement provides that, upon receipt of notice of any meeting of holders of our ordinary shares, the depositary will fix a record date for the determination of ADS holders who shall be entitled to give instructions for the exercise of voting rights. Upon timely receipt of notice from us, if we so request, the depositary shall distribute to the holders as of the record date (1) the notice of the meeting or solicitation of consent or proxy sent by us and (2) a statement as to the manner in which instructions may be given by the holders.

Holders of ADSs may instruct the depositary to vote the ordinary shares underlying their ADSs. Otherwise, ADS holders will not be able to exercise their right to vote, unless they withdraw the ordinary shares underlying the ADSs they hold. However, ADS holders may not know about the meeting far enough in advance to withdraw those ordinary shares. If we ask for instructions from holders of ADSs, the depositary, upon timely notice from us, will notify them of the upcoming vote and arrange to deliver our voting materials to them. We cannot guarantee ADS holders that they will receive the voting materials in time to ensure that they can instruct the depositary to vote their ordinary shares or to withdraw their ordinary shares so that they can vote them themselves. If the depositary does not receive timely voting instructions from a

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holder of ADSs, it may give a proxy to a person designated by us to vote the ordinary shares underlying such holder's ADSs. In addition, the depositary and its agents are not responsible for failing to carry out voting instructions or for the manner of carrying out voting instructions. This means that ADS holders may not be able to exercise their right to vote, and there may be nothing they can do if the ordinary shares underlying their ADSs are not voted as they requested.

The right as a holder of ADSs to participate in any future preferential subscription rights or to elect to receive dividends in shares may be limited, which may cause dilution to the holdings of purchasers of ADSs in the U.S. offering.

According to French law, if we issue additional securities for cash, current shareholders will have preferential subscription rights for these securities on a pro rata basis unless they waive those rights at an extraordinary meeting of our shareholders (by a two-thirds majority vote) or individually by each shareholder. However, our ADS holders in the United States will not be entitled to exercise or sell such rights unless we register the rights and the securities to which the rights relate under the Securities Act or an exemption from the registration requirements is available. In addition, the deposit agreement provides that the depositary will not make rights available to purchasers of ADSs in the U.S. offering unless the distribution to ADS holders of both the rights and any related securities are either registered under the Securities Act or exempted from registration under the Securities Act. Further, if we offer holders of our ordinary shares the option to receive dividends in either cash or shares, under the deposit agreement the depositary may require satisfactory assurances from us that extending the offer to holders of ADSs does not require registration of any securities under the Securities Act before making the option available to holders of ADSs. We are under no obligation to file a registration statement with respect to any such rights or securities or to endeavor to cause such a registration statement to be declared effective. Moreover, we may not be able to establish an exemption from registration under the Securities Act. Accordingly, ADS holders may be unable to participate in our rights offerings or to elect to receive dividends in shares and may experience dilution in their holdings. In addition, if the depositary is unable to sell rights that are not exercised or not distributed or if the sale is not lawful or reasonably practicable, it will allow the rights to lapse, in which case you will receive no value for these rights.

Holders of ADSs may be subject to limitations on the transfer of their ADSs and the withdrawal of the underlying ordinary shares.

ADSs are transferable on the books of the depositary. However, the depositary may close its books at any time or from time to time when it deems expedient in connection with the performance of its duties. The depositary may refuse to deliver, transfer or register transfers of ADSs generally when our books or the books of the depositary are closed, or at any time if we or the depositary think it is advisable to do so because of any requirement of law, government or governmental body, or under any provision of the deposit agreement, or for any other reason, subject to the right of ADS holders to cancel their ADSs and withdraw the underlying ordinary shares. Temporary delays in the cancellation of your ADSs and withdrawal of the underlying ordinary shares may arise because the depositary has closed its transfer books or we have closed our transfer books, the transfer of ordinary shares is blocked to permit voting at a shareholders' meeting or we are paying a dividend on our ordinary shares. In addition, ADS holders may not be able to cancel their ADSs and withdraw the underlying ordinary shares when they owe money for fees, taxes and similar charges and when it is necessary to prohibit withdrawals in order to comply with any laws or governmental regulations that apply to ADSs or to the withdrawal of ordinary shares or other deposited securities. See "Description of American Depositary Shares — Your right to receive the ordinary shares underlying your ADSs."

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ADS holders may not be entitled to a jury trial with respect to claims arising under the deposit agreement, which could result in less favorable outcomes to the plaintiff(s) in any such action.

The deposit agreement governing our ADSs provides that holders and beneficial owners of ADSs irrevocably waive the right to a trial by jury in any legal proceeding arising out of or relating to the deposit agreement or the ADSs, including in respect of claims under federal securities laws, against us or the depositary to the fullest extent permitted by applicable law. If this jury trial waiver provision is prohibited by applicable law, an action could nevertheless proceed under the terms of the deposit agreement with a jury trial. To our knowledge, the enforceability of a jury trial waiver under the federal securities laws has not been finally adjudicated by a federal court. However, we believe that a jury trial waiver provision is generally enforceable under the laws of the State of New York, which govern the deposit agreement, by a court of the State of New York or a federal court, which have non-exclusive jurisdiction over matters arising under the deposit agreement, applying such law. In determining whether to enforce a jury trial waiver provision, New York courts and federal courts will consider whether the visibility of the jury trial waiver provision within the agreement is sufficiently prominent such that a party has knowingly waived any right to trial by jury. We believe that this is the case with respect to the deposit agreement and the ADSs. In addition, New York courts will not enforce a jury trial waiver provision in order to bar a viable setoff or counterclaim sounding in fraud or one which is based upon a creditor's negligence in failing to liquidate collateral upon a guarantor's demand, or in the case of an intentional tort claim (as opposed to a contract dispute), none of which we believe are applicable in the case of the deposit agreement or the ADSs. No condition, stipulation or provision of the deposit agreement or ADSs serves as a waiver by any holder or beneficial owner of ADSs or by us or the depositary of compliance with any provision of the federal securities laws. If you or any other holder or beneficial owner of ADSs brings a claim against us or the depositary in connection with such matters, you or such other holder or beneficial owner may not be entitled to a jury trial with respect to such claims, which may have the effect of limiting and discouraging lawsuits against us and/or the depositary. If a lawsuit is brought against us and/or the depositary under the deposit agreement, it may be heard only by a judge or justice of the applicable trial court, which would be conducted according to different civil procedures and may result in different outcomes than a trial by jury would have had, including results that could be less favorable to the plaintiff(s) in any such action, depending on, among other things, the nature of the claims, the judge or justice hearing such claims, and the venue of the hearing.

We are an "emerging growth company" under the JOBS Act and will be able to avail ourselves of reduced disclosure requirements applicable to emerging growth companies, which could make our ordinary shares or ADSs less attractive to investors.

We are an "emerging growth company," as defined in the U.S. Jumpstart Our Business Startups Act of 2012, or the JOBS Act, and we intend to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not "emerging growth companies," including not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the U.S. Securities Act of 1933, as amended, or the Securities Act, for complying with new or revised accounting standards. We will not take advantage of the extended transition period provided under Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. Since IFRS makes no distinction between public and private companies for purposes of compliance with new or revised accounting standards, the requirements for our compliance as a private company and as a public company are the same.

We cannot predict if investors will find our ordinary shares or ADSs less attractive because we may rely on these exemptions. If some investors find our ordinary shares or ADSs less attractive as a result, there may be a less active trading market for our ordinary shares or ADSs and the price of our ordinary shares or ADSs may be more volatile. We may take advantage of these reporting exemptions until we are no longer an

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emerging growth company. We will remain an emerging growth company until the earliest of (1) the last day of the fiscal year in which we have total annual gross revenue of $1.07 billion or more; (2) the last day of our fiscal year following the fifth anniversary of the date of the completion of this offering; (3) the date on which we have issued more than $1.0 billion in nonconvertible debt during the previous three years; and (4) the date on which we are deemed to be a large accelerated filer under the rules of the SEC.

As a foreign private issuer, we are exempt from a number of rules under the U.S. securities laws and are permitted to file less information with the SEC than a U.S. company. This may limit the information available to holders of ordinary shares or ADSs.

We are a foreign private issuer, as defined in the SEC's rules and regulations and, consequently, we are not subject to all of the disclosure requirements applicable to public companies organized within the United States. For example, we are exempt from certain rules under the Exchange Act that regulate disclosure obligations and procedural requirements related to the solicitation of proxies, consents or authorizations applicable to a security registered under the Exchange Act, including the U.S. proxy rules under Section 14 of the Exchange Act. In addition, our officers and directors are exempt from the reporting and "short-swing" profit recovery provisions of Section 16 of the Exchange Act and related rules with respect to their purchases and sales of our securities. Moreover, while we currently make annual and semi-annual filings with respect to our listing on Euronext Paris and expect to file financial reports on an annual and semi-annual basis, we will not be required to file periodic reports and financial statements with the SEC as frequently or as promptly as U.S. domestic issuers and will not be required to file quarterly reports on Form 10-Q or current reports on Form 8-K under the Exchange Act. Accordingly, there will be less publicly available information concerning our company than there would be if we were not a foreign private issuer.

As a foreign private issuer, we are permitted and we expect to follow certain home country practices in relation to corporate governance matters that differ significantly from Nasdaq's corporate governance standards. These practices may afford less protection to shareholders than they would enjoy if we complied fully with the corporate governance standards of the Nasdaq Global Market.

As a foreign private issuer listed on the Nasdaq Global Market, we will be subject to Nasdaq's corporate governance standards. However, Nasdaq rules provide that foreign private issuers are permitted to follow home country corporate governance practices in lieu of Nasdaq's corporate governance standards as long as notification is provided to Nasdaq of the intention to take advantage of such exemptions. We intend to rely on exemptions for foreign private issuers and follow French corporate governance practices in lieu of Nasdaq's corporate governance standards, to the extent possible. Certain corporate governance practices in France, which is our home country, may differ significantly from Nasdaq corporate governance standards. For example, as a French company, neither the corporate laws of France nor our bylaws require a majority of our directors to be independent and we can include non-independent directors as members of our remuneration committee, and our independent directors are not required to hold regularly scheduled meetings at which only independent directors are present.

We are also exempt from provisions set forth in Nasdaq rules which require an issuer to provide in its bylaws for a generally applicable quorum, and that such quorum may not be less than one-third of the outstanding voting stock. Consistent with French law, our bylaws provide that, at the first meeting convened, a quorum requires the presence of shareholders having at least (1) 20% of the shares entitled to vote in the case of an ordinary shareholders' general meeting or at an extraordinary shareholders' general meeting where shareholders are voting on a capital increase by capitalization of reserves, profits or share premium (in case of lack of quorum, no quorum is required at the second meeting convened), or (2) 25% of the shares entitled to vote in the case of any other extraordinary shareholders' general meeting (in case of lack of quorum, it is decreased to at least 20% of the shares entitled to vote at the second meeting convened).

As a foreign private issuer, we are required to comply with Rule 10A-3 of the Exchange Act, relating to audit committee composition and responsibilities. Under French law, the audit committee may only have an

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advisory role and appointment of our statutory auditors, in particular, must be decided by the shareholders at our annual meeting.

Therefore, our shareholders may be afforded less protection than they otherwise would have under Nasdaq's corporate governance standards applicable to U.S. domestic issuers. For an overview of our corporate governance practices, see "Management — Corporate Governance Practices."

We may lose our foreign private issuer status in the future, which could result in significant additional cost and expense.

While we currently qualify as a foreign private issuer, the determination of foreign private issuer status is made annually on the last business day of an issuer's most recently completed second fiscal quarter and, accordingly, the next determination will be made with respect to us on June 30, 2020. In the future, we would lose our foreign private issuer status if we fail to meet the requirements necessary to maintain our foreign private issuer status as of the relevant determination date. We will remain a foreign private issuer until such time that more than 50% of our outstanding voting securities are held by U.S. residents and any of the following three circumstances applies: (1) the majority of our executive officers or directors are U.S. citizens or residents; (2) more than 50% of our assets are located in the United States; or (3) our business is administered principally in the United States.

The regulatory and compliance costs to us under U.S. securities laws as a U.S. domestic issuer may be significantly more than costs we incur as a foreign private issuer. If we are not a foreign private issuer, we will be required to file periodic reports and registration statements on U.S. domestic issuer forms with the SEC, which are more detailed and extensive in certain respects than the forms available to a foreign private issuer. We would be required under current SEC rules to prepare our financial statements in accordance with U.S. GAAP, rather than IFRS, and modify certain of our policies to comply with corporate governance practices associated with U.S. domestic issuers. Such conversion of our financial statements to U.S. GAAP would involve significant time and cost. In addition, we may lose our ability to rely upon exemptions from certain corporate governance requirements on U.S. stock exchanges that are available to foreign private issuers such as the ones described herein and exemptions from procedural requirements related to the solicitation of proxies.

U.S. investors may have difficulty enforcing civil liabilities against our company and directors and senior management and the experts named in this prospectus.

Certain members of our board of directors and senior management and certain experts named in this prospectus are non-residents of the United States, and all or a substantial portion of our assets and the assets of such persons are located outside the United States. As a result, it may not be possible to serve process on such persons or us in the United States or to enforce judgments obtained in U.S. courts against them or us based on civil liability provisions of the securities laws of the United States. Additionally, it may be difficult to assert U.S. securities law claims in actions originally instituted outside of the United States. Foreign courts may refuse to hear a U.S. securities law claim because foreign courts may not be the most appropriate forums in which to bring such a claim. Even if a foreign court agrees to hear a claim, it may determine that the law of the jurisdiction in which the foreign court resides, and not U.S. law, is applicable to the claim. Further, if U.S. law is found to be applicable, the content of applicable U.S. law must be proved as a fact, which can be a time-consuming and costly process, and certain matters of procedure would still be governed by the law of the jurisdiction in which the foreign court resides. In particular, there is some doubt as to whether French courts would recognize and enforce certain civil liabilities under U.S. securities laws in original actions or judgments of U.S. courts based upon these civil liability provisions. In addition, awards of punitive damages in actions brought in the United States or elsewhere may be unenforceable in France. An award for monetary damages under the U.S. securities laws would be considered punitive if it does not seek to compensate the claimant for loss or damage suffered but is intended to punish the defendant. French law provides that a shareholder, or a group of shareholders, may

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initiate a legal action to seek indemnification from the directors of a corporation in the corporation's interest if it fails to bring such legal action itself. If so, any damages awarded by the court are paid to the corporation and any legal fees relating to such action may be borne by the relevant shareholder or the group of shareholders.

The enforceability of any judgment in France will depend on the particular facts of the case as well as the laws and treaties in effect at the time. The United States and France do not currently have a treaty providing for recognition and enforcement of judgments (other than arbitration awards) in civil and commercial matters. See "Enforcement of civil liabilities."

After the completion of this offering, we may be at an increased risk of securities class action litigation.

Historically, securities class action litigation has often been brought against a company following a decline in the market price of its securities. This risk is especially relevant for us because biotechnology and biopharmaceutical companies have experienced significant share price volatility in recent years. If we were to be sued, it could result in substantial costs and a diversion of management's attention and resources, which could harm our business.

U.S. holders of our ADSs may suffer adverse tax consequences if we are characterized as a passive foreign investment company.

Generally, if, for any taxable year, at least 75% of our gross income is passive income, or at least 50% of the value of our assets is attributable to assets that produce passive income or are held for the production of passive income, we would be characterized as a passive foreign investment company, or PFIC, for U.S. federal income tax purposes. For purposes of these tests, passive income includes dividends, interest, and gains from the sale or exchange of investment property and rents and royalties other than rents and royalties which are received from unrelated parties in connection with the active conduct of a trade or business. Assets that produce or are held for the production of passive income may include cash, even if held as working capital or raised in a public offering, marketable securities, and other assets that may produce passive income.

Our status as a PFIC will depend on the composition of our income and the composition and value of our assets (which, may be determined in large part by reference to the market value of our ordinary shares and ADSs, which may be volatile) from time to time. Our status may also depend, in part, on how quickly we utilize the cash proceeds from this offering in our business. With respect to the taxable year ended December 31, 2019, we believe that we were a PFIC and it is possible that we will be classified as a PFIC for the current year. However, our status as a PFIC is a fact-intensive determination made on an annual basis and we cannot provide any assurances regarding our PFIC status for the past, current or future taxable years. If we are characterized as a PFIC, our U.S. holders may suffer adverse tax consequences, including having gains realized on the sale of our ADSs treated as ordinary income, rather than as capital gain and the loss of the preferential rate applicable to dividends received on our ADSs by individuals who are U.S. holders, and having interest charges apply to distributions by us and the proceeds of sales of the ADSs. A U.S. shareholder of a PFIC generally may mitigate these adverse U.S. federal income tax consequences by making a "qualified electing fund," or QEF, election, or, to a lesser extent, a "mark to market" election. If we determine that we are a PFIC for any taxable year, we will use commercially reasonable efforts to, and currently expect to, provide the necessary information for U.S. holders to make a QEF election. See "Material U.S. Federal Income and French Tax Considerations — Material U.S. Federal Income Tax Considerations for U.S. Holders — Passive Foreign Investment Company Considerations".

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This prospectus, particularly the sections of this prospectus titled "Prospectus summary," "Risk Factors," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Business," contains forward-looking statements. All statements other than present and historical facts and conditions contained in this prospectus, including statements regarding our future results of operations and financial position, business strategy, plans and our objectives for future operations, are forward-looking statements. When used in this prospectus, the words "anticipate," "believe," "can," "could," "estimate," "expect," "intend," "is designed to," "may," "might," "plan," "potential," "predict," "objective," "should," or the negative of these and similar expressions identify forward-looking statements. Forward-looking statements include, but are not limited to, statements about:

    §
    our plans to develop and commercialize our product candidates;

    §
    the timing of initiation of our planned clinical trials;

    §
    the timing of the availability of data from our clinical trials;

    §
    the timing of any planned investigational new drug application or new drug application;

    §
    our plans to research, develop and commercialize our current and future product candidates;

    §
    our ability to successfully collaborate with existing collaborators or enter into new collaborations, and to fulfill our obligations under any such collaboration agreements;

    §
    the clinical utility, potential benefits and market acceptance of our product candidates;

    §
    our commercialization, marketing and manufacturing capabilities and strategy;

    §
    our ability to identify additional products or product candidates with significant commercial potential;

    §
    our expectations related to the sufficiency of our capital resources and our use of proceeds from this offering;

    §
    developments and projections relating to our competitors and our industry;

    §
    the impact of government laws and regulations;

    §
    the potential effects of the recent COVID-19 pandemic on our business and, operations and clinical development timelines and plans;

    §
    our intellectual property position; and

    §
    our estimate regarding future revenue, expenses, capital requirements and need for additional financing.

You should refer to the section of this prospectus titled "Risk Factors" for a discussion of important factors that may cause our actual results to differ materially from those expressed or implied by our forward-looking statements. As a result of these factors, we cannot assure you that the forward-looking statements in this prospectus will prove to be accurate. Furthermore, if our forward-looking statements prove to be inaccurate, the inaccuracy may be material. In light of the significant uncertainties in these forward-looking statements, you should not regard these statements as a representation or warranty by us or any other person that we will achieve our objectives and plans in any specified time frame or at all. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. The Private Securities Litigation Reform Act of 1995 and Section 27A of the Securities Act do not protect any forward-looking statements that we make in connection with this offering.

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In addition, statements that "we believe" and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this prospectus, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.

You should read this prospectus and the documents that we reference in this prospectus and have filed with the SEC as exhibits to the registration statement of which this prospectus is a part with the understanding that our actual future results, levels of activity, performance and events and circumstances may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements.

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USE OF PROCEEDS

We estimate that we will receive net proceeds from this global offering of approximately $92.1 million (€81.9 million), assuming an offering price of $13.68 per ADS in the U.S. offering and €12.16 per ordinary share in the European offering, based on the closing price of our ordinary shares on Euronext Paris (expressed in U.S. dollars, as applicable) on July 3, 2020, after deducting underwriting commissions and estimated offering expenses payable by us. If the underwriters exercise in full their option to purchase additional ADSs and/or ordinary shares in this global offering, we estimate that we will receive net proceeds from the offering of approximately $106.4 million (€94.6 million), based on the same assumptions stated above.

Each $1.00 (€0.8891) increase or decrease in the assumed offering price of $13.68 per ADS in the U.S. offering and €12.16 per ordinary share in the European offering would increase or decrease our net proceeds from the offering by $7.0 million (€6.2 million), assuming the number of ADSs and ordinary shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting underwriting commissions and estimated offering expenses payable by us. We may also increase or decrease the number of ordinary shares (including in the form of ADSs) that we are offering. Each increase or decrease of 1,000,000 ordinary shares (including ordinary shares in the form of ADSs) offered by us would increase or decrease the net proceeds to us by approximately $12.7 million (€11.3 million), assuming that the assumed offering price remains the same and after deducting underwriting commissions and estimated offering expenses payable by us. The actual net proceeds payable to us will adjust based on the actual number of ADSs and ordinary shares, respectively, offered by us, the actual offering price and other terms of the offering determined at pricing.

We currently expect to use the net proceeds from this offering, together with our existing cash and cash equivalents, as follows:

    §
    approximately $85.0 million to complete preparations for and initiate a Phase III clinical trial of lanifibranor for the treatment of patients with NASH;

    §
    approximately $30.0 million to complete our planned Phase Ib/II clinical trial of odiparcil in a pediatric population with MPS VI, initiate our planned label Phase IIa extension study of odiparcil in patients 16 years and above with MPS VI and initiate Phase III clinical development of odiparcil as a monotherapy and in combination with ERT for the treatment of adult and pediatric patients with MPS VI;

    §
    approximately $5.0 million to advance development of our Hippo pathway signaling program and other pre-clinical programs; and

    §
    the balance for working capital and general corporate purposes.

This expected use of the net proceeds from the offering represents our intentions based upon our current plans, business conditions and clinical trials to date. As of the date of this prospectus, we cannot predict with certainty all of the particular uses for the net proceeds to be received upon the completion of the offering or the amounts that we will actually spend on the uses set forth above.

Based on our planned use of the net proceeds of this offering, and our current cash and cash equivalents, we estimate that such funds will be sufficient to enable us to fund our operating expenses and capital expenditure requirements at least through the fourth quarter of 2022. We have based this estimate on assumptions that may prove to be incorrect, and we could use our available capital resources sooner than we currently expect.

Our management will have significant flexibility in applying the net proceeds of this offering. The timing and amount of our actual expenditures will be based on many factors, including the progress, cost and

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results of product development and clinical research and trials, the expenses we incur in our sales and marketing efforts, the scope of research and development efforts and other factors described under "Risk Factors" elsewhere in this prospectus, as well as the amount of cash used in our operations. We may find it necessary or advisable to use the net proceeds from this offering for other purposes, and our management will have broad discretion in the application of the net proceeds.

Pending our use of the net proceeds from the offering, we intend to invest the net proceeds in a variety of capital preservation investments, including short-term, investment-grade, interest-bearing instruments.

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DIVIDEND POLICY

We have never declared or paid any dividends on our ordinary shares. We do not anticipate paying cash dividends on our ordinary shares or ADSs in the foreseeable future and intend to retain all available funds and any future earnings for use in the operation and expansion of our business, given our state of development.

Subject to the requirements of French law and our bylaws, dividends may only be distributed from our distributable profits, plus any amounts held in our available reserves which are reserves other than legal and statutory and revaluation surplus. See the section of this prospectus titled "Description of Share Capital — Key provisions of our bylaws and French law affecting our ordinary shares — Rights, preferences and restrictions attaching to ordinary shares (Articles 11, 14, 28, 31 and 32 of the bylaws)" for further details on the limitations on our ability to declare and pay dividends. Dividend distributions, if any in the future, will be made in euros and converted into U.S. dollars with respect to the ADSs, as provided in the deposit agreement. See "Description of American Depositary Shares — Dividends and other distributions."

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CAPITALIZATION

The following table sets forth our cash and cash equivalents and capitalization as of March 31, 2020:

    §
    on an actual basis; and

    §
    on an as adjusted basis to reflect the issuance and sale of a total of 7,478,261 ordinary shares (consisting of                        ADSs and                             ordinary shares) in the global offering at an assumed offering price of $13.68 per ADS in the U.S. offering and €12.16 per ordinary share in the European offering, based on the closing price of our ordinary shares on Euronext Paris (expressed in U.S. dollars, as applicable) on July 3, 2020, after deducting underwriting commissions and estimated offering expenses payable by us.

Our cash and cash equivalents and capitalization following the completion of this offering will depend on the actual offering price and other terms of this offering determined at pricing. The table should be read in conjunction with the information contained in "Use of Proceeds," "Selected Financial Data" and "Management's Discussion and Analysis of Financial Condition and Results of Operations," as well as our financial statements and the related notes included elsewhere in this prospectus.


 
  As of March 31, 2020
(in thousands, except share
and per share information)
 
 
  Actual   As adjusted(1)  

Cash and cash equivalents

  46,893   128,818  

Long-term debt, net of current portion

         

Shareholders' equity:

             

Ordinary shares, nominal value €0.01 per share: 30,687,750 shares issued and outstanding, actual; 38,166,011 shares issued and outstanding, as adjusted

    307     382  

Premiums related to share capital

    100,654     182,505  

Reserves

    (44,690 )   (44,690 )

Net loss for the period

    (6,798 )   (6,798 )

Total shareholders' equity

    49,473     131,398  

Total capitalization

  49,473   131,398  

(1)
Each $1.00 (€0.8891) increase or decrease in the assumed offering price of $13.68 per ADS in the U.S. offering and €12.16 per ordinary share in the European offering, based on the closing price of our ordinary shares on Euronext Paris (expressed in U.S. dollars, as applicable) on July 3, 2020, would increase or decrease each of cash and cash equivalents, total shareholders' equity and total capitalization by approximately €6.2 million, assuming that the number of ADSs and ordinary shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting underwriting commissions and estimated offering expenses payable by us. We may also increase or decrease the number of ordinary shares (including ordinary shares in the form of ADSs) we are offering. Each increase or decrease of 1,000,000 ordinary shares (including ordinary shares in the form of ADSs) offered by us would increase or decrease each of total shareholders' equity and total capitalization by approximately €11.3 million, assuming that the assumed offering price remains the same, and after deducting underwriting commissions and estimated offering expenses payable by us.

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The number of ordinary shares (including ordinary shares in the form of ADSs) that will be outstanding after the global offering is based on 30,687,750 ordinary shares outstanding as of March 31, 2020 and excludes:

    §
    320,800 ordinary shares issuable upon the exercise of founder's share warrants (bons de souscription de parts de créateur d'entreprise) and share warrants (bons de souscription d'actions) outstanding as of March 31, 2020 at a weighted average exercise price of €5.72 per ordinary share ($6.31 per ordinary share based on the exchange rate of €0.907 per U.S. dollar in effect as of March 31, 2020);

    §
    484,350 ordinary shares issuable upon the vesting of free shares (actions gratuites) outstanding as of March 31, 2020; and

    §
    26,000,000 ordinary shares reserved for future issuance under our share-based compensation plans and other delegations of authority from our shareholders.

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DILUTION

If you invest in our ordinary shares or ADSs in the global offering, your ownership interest will be diluted to the extent of the difference between the offering price per ordinary share/ADS paid by purchasers in this offering and the as adjusted net tangible book value per ordinary share/ADS, as applicable, after completion of the global offering. Our net tangible book value as of March 31, 2020 was €48.3 million ($53.3 million), or €1.57 per ordinary share (equivalent to $1.74 per ADS), based on the exchange rate of €0.907 per U.S. dollar in effect as of March 31, 2020. Net tangible book value per ordinary share is determined by dividing (1) our total assets less our intangible assets and our total liabilities by (2) the number of ordinary shares outstanding as of March 31, 2020, or 30,687,750 ordinary shares.

After giving effect to our sale of a total of 7,478,261 ordinary shares (consisting of                        ADSs and                    ordinary shares) in the global offering at an assumed offering price of $13.68 per ADS in the U.S. offering and €12.16 per ordinary share in the European offering, based on the closing price of our ordinary shares on Euronext Paris (expressed in U.S. dollars, as applicable) on July 3, 2020, and after deducting underwriting commissions and estimated offering expenses payable by us, our as adjusted net tangible book value at March 31, 2020 (based on the exchange rate in effect as of March 31, 2020) would have been approximately €130.2 million ($143.6 million), or €3.41 per ordinary share (equivalent to $3.76 per ADS). This represents an immediate increase in net tangible book value of €1.84 per ordinary share (equivalent to $2.03 per ADS) to existing shareholders and an immediate dilution in net tangible book value of €8.75 per ordinary share (equivalent to $9.92 per ADS) to new investors.

The following table illustrates this dilution to new investors on a per ordinary share basis:


Assumed offering price per ordinary share

        12.16  

Historical net tangible book value per ordinary share as of March 31, 2020

  1.57        

Increase in net tangible book value per ordinary share attributable to new investors participating in the global offering

    1.84        

As adjusted net tangible book value per ordinary share after the global offering

          3.41  

Dilution per ordinary share to new investors participating in the global offering

        8.75  

The dilution information discussed above is illustrative only and will change based on the actual offering price and other terms of the global offering determined at pricing. Each $1.00 (€0.8891) increase or decrease in the assumed offering price of $13.68 per ADS in the U.S. offering and €12.16 per ordinary share in the European offering, based on the closing price of our ordinary shares on Euronext Paris (expressed in U.S. dollars, as applicable) on July 3, 2020, would increase or decrease our as adjusted net tangible book value by approximately €6.2 million ($6.8 million), or approximately €0.16 per ordinary share (equivalent to $0.18 per ADS), and the dilution to new investors participating in the global offering would be approximately €9.49 per ordinary share (equivalent to $10.47 per ADS), assuming that the number of ADSs and ordinary shares offered by us, as set forth on the cover page of this prospectus, remains the same, and after deducting underwriting commissions and estimated offering expenses payable by us. We may also increase or decrease the number of ordinary shares and ADSs we are offering. An increase in the aggregate number of ordinary shares (including in the form of ADSs) offered by us of 1,000,000 ordinary shares would increase the as adjusted net tangible book value by approximately €11.3 million ($12.4 million), or €3.61 per ordinary share (equivalent to $3.98 per ADS), and the dilution to new investors participating in the global offering would be €8.55 per ordinary share (equivalent to $9.42 per ADS), assuming that the assumed offering price remains the same, and after deducting underwriting

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commissions and estimated offering expenses payable by us. Similarly, a decrease in the aggregate number of ordinary shares (including in the form of ADSs) offered by us of 1,000,000 ordinary shares would decrease the as adjusted net tangible book value by approximately €11.3 million ($12.5 million), or €3.20 per ordinary share (equivalent to $3.53 per ADS), and the dilution to new investors participating in the global offering would be €8.96 per ordinary share (equivalent to $9.88 per ADS), assuming that the assumed offering price remains the same, and after deducting underwriting commissions and estimated offering expenses payable by us.

If the underwriters exercise their option to purchase additional ordinary shares (including in the form of ADSs) in full, the as adjusted net tangible book value per ordinary share after the offering would be €3.64 (equivalent to $4.01 per ADS), the increase in the as adjusted net tangible book value to existing shareholders would be €2.06 per ordinary share (equivalent to $2.28 per ADS), and the dilution to new investors participating in the global offering would be €8.52 per ordinary share (equivalent to $9.67 per ADS).

The following table sets forth, as of March 31, 2020, on the as adjusted basis described above, consideration paid to us in cash for ordinary shares (including in the form of ADSs) purchased from us by our existing shareholders and by new investors participating in the global offering, based on an assumed offering price of $13.68 per ADS in the U.S. offering and €12.16 per ordinary share in the European offering, the closing price of our ordinary shares on Euronext Paris (expressed in U.S. dollars, as applicable) on July 3, 2020, and before deducting underwriting commissions and estimated offering expenses payable by us:


 
  Ordinary shares
purchased
from Us
   
   
   
 
 
  Total consideration   Average
price per
ordinary
share/ADS
 
 
  Number   Percent   Amount   Percent  

Existing shareholders

    30,687,750     80.4 %   €100,961,425     52.6 %   3.29  

New investors

    7,478,261     19.6     90,935,654     47.4     12.16  

Total

    38,166,011     100.0 %   €191,897,079     100.0 %   5.03  

The tables and calculations above are based on the number of ordinary shares (including ordinary shares in the form of ADSs) that will be outstanding after this offering, which is based on 30,687,750 ordinary shares outstanding as of March 31, 2020 and exclude:

    §
    320,800 ordinary shares issuable upon the exercise of founder's share warrants (bons de souscription de parts de créateur d'entreprise) and share warrants (bons de souscription d'actions) outstanding as of March 31, 2020 at a weighted average exercise price of €5.72 per ordinary share ($6.31 per ordinary share based on the exchange rate of €0.907 per U.S. dollar in effect as of March 31, 2020);

    §
    484,350 ordinary shares issuable upon the vesting of free shares (actions gratuites) outstanding as of March 31, 2020; and

    §
    26,000,000 ordinary shares reserved for future issuance under our share-based compensation plans and other delegations of authority from our shareholders.

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SELECTED FINANCIAL DATA

The following selected statement of income (loss) data for the years ended December 31, 2018 and 2019 and selected statement of financial position data as of December 31, 2018 and 2019 have been derived from our audited financial statements included elsewhere in this prospectus. Our audited financial statements have been prepared in accordance with International Financial Reporting Standards, or IFRS as issued by the International Accounting Standards Board.

The following selected statement of income (loss) data for the three months ended March 31, 2019 and 2020 and selected statement of financial position data as of March 31, 2020 have been derived from our unaudited interim condensed financial statements as of March 31, 2020 and for the three months ended March 31, 2019 and 2020. The unaudited interim condensed financial statements as of March 31, 2020 and for the three months ended March 31, 2019 and 2020 were prepared in accordance with IAS 34, Interim Financial Reporting, the standard of IFRS applicable to interim financial statements.

Our historical results and the results for the three months ended March 31, 2020 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2020 or in the future. You should read this selected data together with our financial statements and related notes beginning on page F-1 of this prospectus, as well as the sections of this prospectus titled "Management's Discussion and Analysis of Financial Condition and Results of Operations" and the other financial information included elsewhere in this prospectus.

Selected Statement of Income (Loss) Data:


 
  Year ended December 31,   Three Months ended March 31,  
 
  2018   2019   2019   2020  
 
  (in thousands, except share and
per share data)

 

Revenues

  3,197   6,998   1,027   87  

Other income

    4,182     4,293     1,227     858  

Total revenues and other income

    7,379     11,291     2,255     945  

Operating expenses:

                         

Research and development expenses

    (31,758 )   (33,791 )   (10,123 )   (6,059 )

Marketing — Business development expenses

    (225 )   (249 )   (71 )   (65 )

General and administrative expenses

    (6,045 )   (6,088 )   (1,671 )   (1,546 )

Other operating income (expense)

    (2,255 )   (1,475 )   (77 )   (81 )

Total operating expenses

    (40,282 )   (41,603 )   (11,942 )   (7,751 )

Operating profit (loss)

    (32,903 )   (30,312 )   (9,688 )   (6,805 )

Financial income (loss)

    (111 )   93     (2 )   7  

Income tax

                 

Net loss for the period

  (33,014 ) (30,218 )   (9,690 )   (6,798 )

Basic/diluted loss per share

  (1.61 ) (1.28 )   (0.44 )   (0.23 )

Weighted average number of outstanding shares used for computing basic/diluted loss per share

    20,540,979     23,519,897     22,180,834     29,033,063  

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Selected Statement of Financial Position Data:


 
  As of
December 31,
  As of
Three Months
ended
 
 
  2018   2019   March 31, 2020  
 
  (in thousands)
 

Cash and cash equivalents

  56,692   35,840   46,893  

Total assets

    79,812     56,960     65,203  

Total liabilities

    18,216     15,568     15,730  

Total shareholders' equity

    61,596     41,392     49,473  

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

You should read the following discussion of our financial condition and results of operations in conjunction with the "Selected financial data" and our financial statements and the related notes thereto included elsewhere in this prospectus. In addition to historical information, the following discussion and analysis contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results and the timing of events could differ materially from those anticipated in the forward-looking statements. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this prospectus, particularly in sections titled "Risk Factors" and "Special Note Regarding Forward-Looking Statements." The audited financial statements as of and for the years ended December 31, 2019 and 2018 were prepared in accordance with International Financial Reporting Standards, or IFRS, as issued by the International Accounting Standards Board, or IASB. The unaudited interim condensed financial statements as of March 31, 2020 and for the three months ended March 31, 2020 and 2019 were prepared in accordance with IAS 34, Interim Financial Reporting, the standard of IFRS applicable to interim financial statements.

Overview

We are a clinical-stage biopharmaceutical company focused on the development of oral small molecule therapies for the treatment of non-alcoholic steatohepatitis, or NASH, mucopolysaccharidoses, or MPS, as well as other diseases with significant unmet medical need. We have built a pipeline backed by a discovery engine with an extensive library of proprietary molecules, a wholly-owned research and development facility and a team with significant expertise and experience in the development of compounds that target nuclear receptors, transcription factors and epigenetic modulation. Leveraging these assets and expertise, we are advancing two clinical candidates, lanifibranor and odiparcil for the treatment of NASH and MPS, respectively, as well as a deep pipeline of earlier stage programs in oncology and other diseases with significant unmet medical need.

We began our operations in 2012 following the purchase of assets from Abbott Laboratories, or Abbott. Our operations have focused on organizing and staffing our company, business planning, raising capital, entering into collaboration agreements and conducting pre-clinical and clinical development of our product candidates. We do not have any products approved for sale and have not generated any revenue from product sales. We received a net aggregate of €96.0 million in payments from Abbott pursuant to agreements entered into in connection with our formation, and raised €44.6 million in net proceeds from the initial public offering of our ordinary shares on Euronext Paris in February 2017, followed by €32.4 million in net proceeds from a private placement of our ordinary shares in April 2018, €8.6 million in net proceeds from two capital increases for categories of investors in September and October 2019 and €14.6 million in net proceeds from a capital increase for categories of investors in February 2020. We also received payments under our collaboration agreements with AbbVie, Inc. or AbbVie, and Boehringer Ingelheim International GmbH, or BI, research tax credits, subsidies and bank borrowings.

We have incurred significant operating losses in recent periods. Our net loss was €33.0 million and €30.2 million for the year ended December 31, 2018 and 2019, respectively, and €9.7 million and €6.8 million for the three months ended March 31, 2019 and 2020, respectively. We had cash and cash equivalents of €35.8 million and €46.9 million as of December 31, 2019 and March 31, 2020, respectively. We expect to incur significant expenses and substantial operating losses over the next several years as we advance clinical development and prepare for potential commercialization of lanifibranor and odiparcil and continue our pre-clinical and research and development efforts. Our net losses may fluctuate significantly from quarter to quarter and year to year, depending on the timing of our clinical trials, the receipt of milestone and other payments, if any, under our collaboration with AbbVie and our expenditures

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on other research and development activities. We anticipate that our expenses will increase substantially in connection with our ongoing activities, as we:

    §
    initiate additional clinical trials of lanifibranor and odiparcil in the United States and Europe;

    §
    continue the research and development of our pre-clinical programs, including planned and future clinical trials;

    §
    seek to discover and develop additional product candidates;

    §
    seek regulatory approvals for any product candidates that successfully complete clinical trials;

    §
    scale up our manufacturing capabilities to support the launch and commercialization of our product candidates, if approved;

    §
    establish a sales and marketing infrastructure for the commercialization of our product candidates, if approved;

    §
    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 in the United States.

Impact of COVID-19

We have implemented business continuity plans designed to address and mitigate the impact of the COVID-19 pandemic on our employees, customers and our business. While we are experiencing limited impacts at this time, given the global economic slowdown, the overall disruption of global healthcare systems and the other risks and uncertainties associated with the pandemic, our business, financial condition, results of operations and growth prospects could be materially adversely affected.

We continue to closely monitor the COVID-19 situation as we evolve our business continuity plans and response strategy. In March 2020, we implemented work-from-home policies for all of our employees. We are currently preparing plans to reopen our offices to allow employees to return to the office, which will be based on a phased approach that is principles-based and local in design, with a focus on patient continuity, employee safety and optimal work environment. We are also working closely with our personnel and third-party manufacturers to manage our supply chain activities and mitigate potential disruptions to our product supplies as a result of the COVID-19 pandemic. However, if the COVID-19 pandemic persists for an extended period of time and begins to impact essential distribution systems, we could experience disruptions to our supply chain and operations.

We have also experienced, and may continue to experience, disruptions and delays in clinical development programs. For example, due to COVID-19, the recruitment and screening of new patients has been suspended at the University of Florida, where an investigator-initiated Phase II NAFLD study is currently ongoing. Some patients may not be able to comply with clinical trial protocols if quarantines impede patient movement or interrupt healthcare services. Similarly, our ability to recruit and retain patients and principal investigators and site staff who, as healthcare providers, may have heightened exposure to COVID-19 and adversely impact our clinical trial operations.

With respect to regulatory activities, to date we have not experienced delays in the timing of our interactions with regulatory authorities, however, we may be impacted by such delays due to, for example, absenteeism by governmental employees, inability to conduct planned physical inspections related to regulatory approval, or the diversion of regulatory efforts and attention to approval of other therapeutics or other activities related to COVID-19.

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In May 2020, we entered into three credit agreements pursuant to which we received €10 million in the form of a State Guaranteed Loan (Prêts Garantis par l'Etat), which is provided by a syndicate of French banks and guaranteed by the French State in the context of the COVID-19 pandemic. The loan matures in May 2021, and we have the option to extend the maturity date for up to an additional four years. We believe that the net proceeds of this offering, together with our existing cash and cash equivalents at March 31, 2020 and the funds received under the credit agreements, will enable us to fund our operating expenses and capital expenditure requirements at least through the fourth quarter of 2022. However, our operating plan may change as a result of many factors currently unknown to us, and we may need to seek additional funds sooner than planned, through public or private equity or debt financings, third-party funding, marketing and distribution arrangements, as well as other collaborations, strategic alliances and licensing arrangements, or any combination of these approaches. The COVID-19 pandemic continues to rapidly evolve and has already resulted in a significant disruption of global financial markets. If the disruption persists and deepens, we could experience an inability to access such additional capital, which could in the future negatively affect our operations.

While we expect the COVID-19 pandemic to adversely affect our business operations and financial results, our clinical development and regulatory efforts, our corporate development objectives and the value of and market for our ordinary shares, will depend on future developments that are highly uncertain and cannot be predicted with confidence at this time, such as the ultimate duration of the pandemic, travel restrictions, quarantines, social distancing and business closure requirements in the U.S., Europe and other countries, and the effectiveness of actions taken globally to contain and treat the disease.

Recent Developments

The following preliminary financial information as of June 30, 2020 is based upon our estimates and subject to completion of our financial closing procedures. Moreover, this data has been prepared solely on the basis of currently available information by, and is the responsibility of, Inventiva. KPMG S.A., our independent registered public accounting firm, has not audited or reviewed, and does not express an opinion with respect to, this data. This information is not a comprehensive statement of our financial results for this period, and our actual results may differ materially from these estimates due to the completion of our financial closing procedures, final adjustments, completion of the review of our financial statements and other developments that may arise between now and the time the review of our financial statements is completed. Our actual results as of June 30, 2020 will not be available until after this offering is completed. There can be no assurance that these estimates will be realized, and estimates are subject to risks and uncertainties, many of which are not within our control. See "Risk factors" and "Special note regarding forward-looking statements" elsewhere in this prospectus.

As of June 30, 2020, our cash and cash equivalents were €52.2 million, compared to €46.9 million as of March 31, 2020 and €35.8 million as of December 31, 2019. Our net cash flow amounted to €16.4 million in the six months ended June 30, 2020 compared to (€19.6) million in the first half of 2019. Net cash used in operating activities was (€10.7) million and (€18.7) million in the first half of 2020 and 2019, respectively. Net cash provided by (used in) financing activities was €28.1 million and (€0.1) in the first half of 2020 and 2019, respectively.

We expect that the net proceeds from this offering, together with our existing cash and cash equivalents, will enable us to fund our operating expenses and capital expenditure requirements at least through the fourth quarter of 2022.

Financial Operations Overview

Revenue

Our revenue consists primarily of up-front and milestone payments, as well as service fees, received under our collaboration with AbbVie and prior collaboration with BI.

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Under our collaboration with AbbVie, we developed inverse agonists of the nuclear receptor RORg for the treatment of moderate to severe psoriasis. We completed performance of our obligations under our initial agreement with AbbVie with respect to our RORg program in August 2018, following a one-year extension, and with respect to all other programs in March 2019. Since April 2019, we no longer provide research services under our AbbVie collaboration, but remain eligible to receive up to an aggregate of €35 million in future milestone payments, as well as tiered royalties on product sales from the mid-single to low-double (below teens) digits.

Our collaboration with BI, was focused on the identification of new treatments for idiopathic pulmonary fibrosis and other fibrotic diseases and was ended in November 2019 following the BI's decision to prioritize other products in its portfolio.

To date, we have not generated any revenue from the sale of products and do not expect to do so for several years at a minimum. Our ability to generate product revenue and to become profitable will depend upon our ability to successfully develop and commercialize lanifibranor and odiparcil and our other programs. Because of the numerous risks and uncertainties associated with product development and regulatory approval, we are unable to predict the amount or timing of product revenue.

Other Income

Our other income consists primarily of research tax credits.

Research tax credits (crédit d'impôt recherche), or CIR, are granted by the French tax authorities to encourage technical and scientific research by French companies. Companies demonstrating that they have expenses that meet the required criteria, including research expenses located in France or certain other European countries, receive a tax credit that can be used against the payment of the corporate tax due the fiscal year in which the expenses were incurred and during the next three fiscal years. Companies may receive cash reimbursement for any excess portion. We requested the reimbursement of the CIR for 2018 in 2019 (paid in January 2020) and we requested the reimbursement of the CIR for 2019 in 2020, in each case under the community tax rules for small and medium sized entities and in compliance with the current regulations. CIRs are subject to audit by the French tax authorities. In August 2018, we received a collection notice in the amount of €1.9 million, including penalties and late payment interest, related to our CIRs for the 2013, 2014 and 2015 taxable years, which we continue to dispute as of the date of this prospectus.

Research and Development Expenses

Research and development expenses consist primarily of costs incurred in connection with the development of our product candidates and pre-clinical programs. We expense research and development costs as incurred. These expenses include:

    §
    personnel expenses, including salaries, benefits and share-based compensation expense, for employees engaged in research and development activities;

    §
    costs of funding research performed by third parties, including pursuant to agreements with contract research organizations, or CROs, as well as investigative sites and consultants that conduct our pre-clinical studies and clinical trials;

    §
    expenses incurred under agreements with contract manufacturing organizations, or CMOs, including manufacturing scale-up expenses and the cost of acquiring and manufacturing pre-clinical study and clinical trial materials;

    §
    expenses for regulatory activities, including filing fees paid to regulatory agencies;

    §
    depreciation and amortization; and

    §
    allocated expenses for facility costs, including rent, utilities and maintenance.

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Following the application of IFRS 16 Leases as of January 1, 2019, only rent that is exempt from IFRS 16 is recognized as expense.

We typically use our employee, consultant and infrastructure resources across our development programs. We track certain outsourced development costs by product candidate, but we do not allocate all personnel costs or other internal costs to specific product candidates.

We expect our research and development expenses will increase for the foreseeable future as we seek to advance development of our product candidates. Further, product 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. The successful development of our product candidates is highly uncertain. At this time, we cannot reasonably estimate or know the nature, timing and costs of the efforts that will be necessary to complete the remainder of the development of lanifibranor or odiparcil, and we may never succeed in obtaining regulatory approval for lanifibranor, odiparcil or any future product candidates we may develop. We are also unable to predict when, if ever, material net cash inflows may commence from sales of lanifibranor, odiparcil or any future product candidates we may develop due to the numerous risks and uncertainties associated with clinical development, including risks and uncertainties related to:

    §
    the number of clinical sites included in the trials;

    §
    the length of time required to enroll suitable patients;

    §
    the number of patients that ultimately participate in the trials;

    §
    the number of doses patients receive;

    §
    the duration of patient follow-up;

    §
    the results of our clinical trials;

    §
    the establishment of commercial manufacturing capabilities;

    §
    the receipt of marketing approvals; and

    §
    the commercialization of product candidates.

General and Administrative Expenses

General and administrative expenses include personnel costs, including salaries, benefits and share-based compensation expense, for personnel other than employees engaged in research and development and marketing and business development activities. General and administrative expenses also include fees for professional services, mainly related to audit and legal services; consulting costs; communications and travel costs; allocated expenses for facility costs, including rent, utilities and maintenance; directors' attendance fees; and insurance costs. Following the application of IFRS 16 Leases as of January 1, 2019, only rent that is exempt from IFRS 16 is recognized as expense.

We anticipate that our general and administrative expenses will increase in the future as we grow our support functions for the expected increase in our research and development activities and the potential commercialization of our product candidates. We also anticipate increased 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, and investor relations costs.

Marketing — Business Development Expenses

Marketing — business development expenses consists primarily of personnel costs, including salaries, benefits and share-based compensation expense, for our business development team. We anticipate that our sales and marketing expenses will increase in the future as we prepare for the potential launch and commercialization of our product candidates, if approved.

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Other Operating Income (Expenses)

For the year ended December 31, 2019, our other operating income (expenses) consisted primarily of restructuring costs incurred in connection with the implementation of our redundancy plan pursuant to an agreement signed on June 11, 2019.

For the year ended December 31, 2018, our other operating income (expenses) consisted of transaction costs incurred in connection with a contemplated financing transaction.

In December 2016, we received a proposed payroll tax adjustment from the French tax authorities with respect to the 2013 taxable year. The proposed adjustment related to the classification of the subsidy granted to us, subject to conditions, in 2012 by Abbott in connection with our asset purchase. In July 2017, the proposed payroll tax adjustment was extended to the 2014 and 2015 taxable years and amounted to a total of €1.9 million, in the aggregate, including penalties and late payment interest. Under the terms of our asset purchase agreement with Abbott, Abbott is required to indemnify us in an amount up to €2.0 million for any amount claimed by the French tax authorities in relation to the tax treatment of the subsidy granted to us with respect to the 2012 through 2017 taxable years. While we continue to dispute the payroll tax adjustment with the French tax authorities, we accrued expense in the amount of the total proposed payroll tax adjustment related to the 2013 to 2015 taxable years as of December 31, 2016 and offsetting income in an equal amount as a result of Abbott's indemnity obligation as of December 31, 2016.

In 2019, our payroll taxes for the 2016, 2017 and 2018 taxable years were audited by the French tax authorities and we received a proposed tax adjustment of €1.7 million (including penalties and late payment interest) in December 2019. This proposed tax adjustment gave rise to a potential risk of €0.5 million (including penalties and late payment interest) for the 2018 taxable year. We challenged the adjustment and, on June 16, 2020, we received a response from the tax authorities resolving the dispute in our favor for fiscal year 2018 and granting us a concession on the related payroll taxes.

Net Financial Income (Expense)

Net financial income (expense) relates primarily to interest and other expense for loans and other financial debts, offset by income received from cash and cash equivalents, as well as foreign exchange gains and losses.

Income Tax

Income tax income reflects our current income tax, as well as our deferred tax income (expense).

In 2018 and 2019, we have faced tax losses. As the recoverability of our tax losses is not considered probable in subsequent periods due to the uncertainties inherent in our business, no deferred tax assets were recognized in the financial statements as of December 31, 2018 or December 31, 2019.

Results of Operations

Comparison of the three months ended March 31, 2019 and 2020

Revenue

We generated revenue of €0.1 million in the three months ended March 31, 2020, a decrease of €0.9 million compared to revenue of €1.0 million generated in the three months ended March 31, 2019. This decrease is primarily due to the end of our collaboration with Boehringer Ingelheim, or BI, and the completion of our research services provided to Enyo Pharma.

Other income

We generated other income of €0.9 million in the three months ended March 31, 2020 compared to €1.2 million as of March 31, 2019, which represents a decrease of 30%. This decrease is primarily due to a reduction of research and development activities in the first quarter of 2020. Other Income consisted of research tax credits in the periods ended March 31, 2019 and 2020, respectively.

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Research and development expenses

Our research and development expenses were €6.1 million in the three months ended March 31, 2020, a decrease of 40% compared to research and development expenses of €10.1 million in three months ended March 31, 2019.

The components of our research and development expenses were as follows for the three months periods presented:


 
  Three months
ended March 31,
   
 
(in thousands of €)
  2019   2020   % change  

Research, pre-clinical study and clinical trial expenses

    5,876     2,854     (51 )%

Personnel costs, other than share-based compensation

    2,096     1,591     (24 )%

Share-based compensation expense

    237     193     (19 )%

Other expenses

    1,914     1,421     (26 )%

Total research and development expenses

    10,123     6,059     (40 )%

The decrease in our research and development expenses was primarily the result of a €3.0 million, or 51%, decrease in research, pre-clinical study and clinical trial expenses, which are broken down by product candidate for the three months ended March 31, 2019 and 2020 in the following table:


 
  Three months
ended March 31,
   
 
(in thousands of €)
  2019   2020   % change  

Lanifibranor

    4,148     1,833     (56 )%

Odiparcil

    1,186     865     (27 )%

YAP/TEAD

    408     144     (65 )%

Other

    134     12     (91 )%

Total Research, pre-clinical study and clinical trial expenses

    5,876     2,854     (51 )%

The decrease in research, pre-clinical study and clinical trial expenses is primarily related to a €2.3 million decrease in the development costs of lanifibranor related to the NATIVE Phase IIb trial and a €0.3 million decrease in the development costs of odiparcil for the treatment of MPS VI. Also contributing to this decrease is the discontinuation of our systemic sclerosis, or SSc, program in February 2019 and the savings generated following the redundancy plan implemented in 2019.

General and administrative expenses

Our general and administrative expenses were €1.5 million in the three months ended March 31, 2020, a decrease of 8% compared to general and administrative expenses of €1.7 million in the three months ended March 31, 2019.

Marketing — business development expenses

Our marketing — business development expenses remained consistent in an amount of €0.1 million in the three months ended March 31, 2020 and 2019.

Other operating income (expenses)

Our other operating expense remained consistent in an amount of €0.1 million in the three months ended March 31, 2020 and 2019.

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Net financial income (expenses)

Our net financial income was €7 thousand in the three months ended March 31, 2020 compared to a net financial expense of €2 thousand in the three months ended March 31, 2019.

Comparison of the years ended December 31, 2018 and 2019

Revenue

We generated revenue of €7.0 million in the year ended December 31, 2019, an increase of €3.8 million compared to revenue of €3.2 million generated for the year ended December 31, 2018. The increase was primarily related to the €3.5 million milestone payment from AbbVie in December 2019 following the enrollment of the first patient with psoriasis in the ongoing clinical trial of ABBV-157, and the reversal of all contract liabilities recognized as of December 31, 2018 in application of IFRS 15 — Revenue from Contracts with Customers in an amount of €2.1 million following BI's decision to end our collaboration.

This increase was partially offset by a €1.8 million decrease in recurring revenue received from our collaboration agreements with AbbVie and BI and our research services provided to Enyo Pharma following the completion of our services rendered under each agreement in 2019.

Other Income

We generated other income of €4.3 million in the year ended December 31, 2019 compared to other income of €4.2 million generated in the year ended December 31, 2018, which represents an increase of 3%. Other Income consisted of research tax credits in the years ended December 31, 2019 and 2018, respectively.

Research and Development Expenses

Our research and development expenses were €33.8 million in the year ended December 31, 2019, an increase of 6% compared to research and development expenses of €31.8 million in the year ended December 31, 2018.

The components of our research and development expenses were as follows for the periods presented:


 
  Year ended
December 31,
   
 
(in thousands of €)
  2018   2019   % change  

Research, pre-clinical study and clinical trial expenses

    17,351     19,353     12 %

Personnel costs, other than share-based compensation

    7,109     7,208     1 %

Share-based compensation expense

    516     868     68 %

Other expenses

    6,782     6,362     (6 )%

Total research and development expenses

    31,758     33,791     6 %

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The increase in our research and development expenses was primarily the result of a €2.0 million, or 12%, increase in research, pre-clinical study and clinical trial expenses, which are broken down by product candidate for the year ended December 31, 2018 and 2019 in the following table:


 
  Year ended
December 31,
   
 
(in thousands of €)
  2018   2019   % change  

Lanifibranor

    11,865     13,209     11 %

Odiparcil

    3,285     4,965     51 %

YAP/TEAD

    1,386     1,094     (21 )%

Other

    815     92     (89 )%

Total Research, pre-clinical study and clinical trial expenses

    17,351     19,353     12 %

The increase in research, pre-clinical study and clinical trial expenses is primarily related to lanifibranor and odiparcil. Research, pre-clinical study and clinical trial expenses of lanifibranor increased by €1.3 million, or 11%, primarily due to the continuation of the NATIVE Phase IIb study.

Research, pre-clinical study and clinical trial expenses of odiparcil increased by €1.7 million, or 51%, primarily due to the continuation of the iMProveS Phase IIa study, of which the results were published at the end of 2019.

These increases were partially offset by a €0.7 million decrease in other research, pre-clinical study and clinical trial expenses and a €0.3 million decrease in expenses incurred in connection with our YAP/TEAD program.

General and Administrative Expenses

Our general and administrative expenses were €6.1 million in the year ended December 31, 2019, an increase of 1% compared to general and administrative expenses of €6.0 million in the year ended December 31, 2018. The increase in general and administrative expenses primarily related to an increase in share-based compensation expenses, partially offset by the decrease in fees for the legal and financial departments, resulting from the expansion of the legal team.

Marketing — Business Development Expenses

Our marketing — business development expenses remained consistent in an amount of €0.2 million in the years ended December 31, 2019 and 2018.

Other Operating Income (Expenses)

In the year ended December 31, 2018, we had net other operating expense of €2.3 million related to the transaction costs incurred in connection with a contemplated financing transaction.

In the year ended December 31, 2019, we had net other operating expense of €1.5 million primarily related to the restructuring costs of €1.1 million incurred in connection with the implementation of our redundancy plan, residual transaction costs of €0.3 million and the additional late payment interest of €0.1 million related to the payroll tax adjustment.

Net Financial Income (Expense)

Our net financial income was €0.1 million in the year ended December 31, 2019 compared to a net financial expense of €0.1 million in the year ended December 31, 2018. The change was primarily attributable to increased income on cash equivalents due to more favorable bond market conditions.

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Liquidity and Capital Resources

From our inception through March 31, 2020, we have received a net aggregate of €96.0 million in payments from Abbott pursuant to agreements entered into in connection with our formation, raised €44.6 million in net proceeds from the initial public offering of our ordinary shares on Euronext Paris in February 2017, €32.4 million in net proceeds from a private placement of our ordinary shares in April 2018, €8.6 million in net proceeds from two capital increases reserved to categories of investors in September and October 2019 and €14.7 million in net proceeds from a capital increase reserved to categories of investors in February 2020. In addition, we have received an aggregate of €9.0 million and €3.0 million in upfront and milestone payments under our collaboration agreements with AbbVie and BI, respectively. We have also received an aggregate of €20.7 million of CIR reimbursements, as well as an aggregate of €1.1 million and €0.4 million of non-refundable subsidies from Bpifrance and France's national research agency, respectively.

As of March 31, 2020, we had cash and cash equivalents of €46.9 million. As of December 31, 2019, we had cash and cash equivalents of €35.8 million. The following table shows a summary of our cash flows for the periods indicated:


 
  Year ended December 31,   Three months ended March 31,  
(in thousands of €)
  2018   2019   2019   2020  

Net cash provided by (used in) operating activities

    (34,207 )   (28,404 )   (8,576 )   (3,580 )

Net cash provided by (used in) investing activities

    (420 )   (826 )   (797 )    

Net cash provided by (used in) financing activities

    32,268     8,378     (51 )   14,633  

Net decrease in cash and cash equivalents

    (2,358 )   (20,852 )   (9,425 )   11,053  

Operating Activities

During the year ended December 31, 2018, we used €34.2 million of cash in operating activities. Cash used in operating activities mainly reflected our net loss of €33.0 million and non-cash income of €2.2 million, principally related to the right to receive our CIR reimbursement of €4.2 million for 2018.

During the year ended December 31, 2019, we used €28.4 million of cash in operating activities. Cash used in operating activities reflected our net loss of €30.2 million and non-cash income of €1.3 million, principally related to the right to receive our CIR reimbursement of €4.3 million for 2019, partially offset by €3.6 million of the 2017 CIR received in 2019.

During the three months ended March 31, 2019, we used €8.6 million of cash in operating activities. Cash used in operating activities reflected our net loss of €9.7 million and non-cash income of €1.3 million, primarily related to the right to receive our CIR reimbursement of €1.2 million for the first quarter of 2019.

During the three months ended March 31, 2020, we used €3.6 million of cash in operating activities. Cash used in operating activities mainly reflected our net loss of €6.8 million and non-cash income of €0.3 million, primarily related to the right to receive our CIR reimbursement of €0.8 million for the first quarter 2020, partially offset by €4.2 million of the 2018 CIR received in 2020.

Investing Activities

During the year ended December 31, 2018, we used €0.4 million of cash in investing activities. Cash used in investing activities reflected the acquisitions of property, plant and equipment totaling €0.5 million, primarily research equipment and software, partially offset by changes in long-term deposit of €0.1 million.

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During the year ended December 31, 2019, we used €0.8 million of cash in investing activities. Cash used in investing activities reflected mainly the deposit of €0.7 million pledged in February 2019 in connection with the surety provided to the French tax authorities related to the payroll tax audit.

During the three months ended March 31, 2019, we used €0.8 million of cash in investing activities. Cash used in investing activities reflected mainly the deposit account of €0.7 million pledged in February 2019 in connection with the surety provided to the French tax authorities related to the payroll tax audit.

During the three months ended March 31, 2020, investing activities were nil.

Financing Activities

During the year ended December 31, 2018, financing activities provided €32.3 million of cash, primarily consisting of the net proceeds from a private placement of our ordinary shares in April 2018.

During the year ended December 31, 2019, financing activities provided €8.4 million of cash, primarily consisting of the net proceeds from the two capital increases carried out in September and October 2019.

During the three months ended March 31, 2019, we used €0.1 million of cash in financing activities, primarily due to the repayment of our bank borrowings in accordance with the payment schedule.

During the three months ended March 31, 2020, financing activities provided €14.6 million of cash, primarily consisting of the net proceeds from a private placement of our ordinary shares in February 2020.

Operating Capital Requirements

We expect our expenses to increase in connection with our ongoing activities, particularly as we continue the research and development of, continue or initiate clinical trials of, and seek marketing approval for, our product candidates. In addition, if we obtain marketing approval for any of our product candidates, we expect to incur significant commercialization expenses related to program sales, marketing, manufacturing and distribution to the extent that such sales, marketing and distribution are not the responsibility of collaborators. Furthermore, following the completion of this offering, we expect to incur additional costs associated with operating as a public company in the United States. Accordingly, we will need to obtain substantial additional funding in connection with our continuing operations. If we are unable to raise capital when needed or on attractive terms, we would be forced to delay, reduce or eliminate our research and development programs or future commercialization efforts. In May 2020, we entered into three credit agreements pursuant to which we received €10 million in the form of a State Guaranteed Loan (Prêts Garantis par l'Etat), which is provided by a syndicate of French banks and guaranteed by the French State. The loan matures in May 2021, and we have the option to extend the maturity date for up to an additional four years. We believe that the net proceeds of this offering, together with our existing cash and cash equivalents at March 31, 2020 and the funds received under the credit agreements, will enable us to fund our operating expenses and capital expenditure requirements at least through the fourth quarter of 2022. 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.

Our future capital requirements will depend on many factors, including:

    §
    the scope, progress, results and costs of product discovery, pre-clinical studies and clinical trials;

    §
    the scope, prioritization and number of our research and development programs;

    §
    the costs, timing and outcome of regulatory review of our product candidates;

    §
    our ability to establish and maintain collaborations on favorable terms;

    §
    the costs of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending intellectual property-related claims;

    §
    the extent to which we acquire or in-license other product candidates and technologies;

    §
    the costs of securing manufacturing arrangements for commercial production; and

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    §
    the costs of establishing or contracting for sales and marketing capabilities if we obtain regulatory approvals to market our product candidates.

Identifying potential product candidates and conducting pre-clinical studies and clinical trials is a time-consuming, expensive and uncertain process that takes many years to complete, and we may never generate the necessary data or results required to obtain marketing approval and achieve product sales. In addition, our product candidates, if approved, may not achieve commercial success. Our commercial revenues, if any, will be derived from sales of product candidates that we do not expect to be commercially available for many years, if at all. Accordingly, we will need to continue to rely on additional financing to achieve our business objectives. Adequate additional financing may not be available to us on acceptable terms, or at all.

Until such time, if ever, as we can generate substantial product revenues, we expect to finance our cash needs through a combination of 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 common stockholder. Debt financing, if available, may involve agreements that include covenants limiting or restricting 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.

Contractual Obligations

The following tables disclose aggregate information about our material contractual obligations and the periods in which payments are due as of December 31, 2019 and March 31, 2020, respectively. Future events could cause actual payments and timing of payments to differ from the contractual cash flows set forth below.


December 31, 2019
  Less than
1 year
  1 to
3 years
  3 to
5 years
  More than
5 years
  Total  
 
  (in thousands of €)
 

Bank borrowings(1)

    74                 74  

Other loans and similar borrowings(2)

    3                 3  

Lease liabilities(3)

    35     2             37  

Total

    112     2             114  


March 31, 2020
  Less than
1 year
  1 to
3 years
  3 to
5 years
  More than
5 years
  Total  
 
  (in thousands of €)
 

Bank borrowings(1)

    40                 40  

Other loans and similar borrowings(2)

    4                 4  

Lease liabilities(3)

    14                 14  

Total

    58                 58  

(1)
Our bank loans consisted of (1) a loan from Crédit Agricole in the outstanding principal amount of €19,590 and €4,905 as of December 31, 2019 and March 31, 2020, respectively, which bears interest at a fixed annual rate of 1.32% and is

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    repayable in regular installments over a 60-month term, (2) a loan from CIC Lyonnaise de Banque in the outstanding principal amount of €15,374 and €9,240 as of December 31, 2019 and March 31, 2020, respectively, which bears interest at a fixed annual rate of 1.50% and is repayable in regular installments over a 60-month term and (iii) a loan from Société Générale in the outstanding principal amount of €38,832 and €25,917, as of December 31, 2019 and March 31, 2020, respectively, which bears interest at a fixed annual rate of 0.90% and is repayable in regular installments over a 60-month term.

(2)
Other loans and similar borrowings correspond to current bank overdraft facilities.

(3)
Lease liabilities were accounted for according to the new lease standard IFRS 16 and represent the present value of the remaining lease payments

The amounts of contractual obligations set forth in the tables above are associated with contracts that are enforceable and legally binding and that specify all significant terms, fixed or minimum services to be used, fixed, minimum or variable price provisions, and the approximate timing of the actions under the contracts. The table does not include obligations under agreements that we can cancel without a significant penalty.

Critical Accounting Policies and Estimates

Our financial statements are prepared in accordance with IFRS as issued by the IASB. Some of the accounting methods and policies used in preparing our financial statements under IFRS are based on complex and subjective assessments by our management or on estimates based on past experience and assumptions deemed realistic and reasonable based on the circumstances concerned. The actual value of our assets, liabilities and shareholders' equity and of our earnings could differ from the value derived from these estimates if conditions change and these changes had an impact on the assumptions adopted. We believe that the most significant management judgments and assumptions in the preparation of our financial statements as of and for the years ended December 31, 2019 and 2018 and the interim financial statements as of and for the three months ended March 31, 2020 and 2019 are described below. See Note 3 to our financial statements as of and for the years ended December 31, 2019 and 2018 for a description of our other significant accounting policies.

Revenue

Allocation of Transaction Price to Performance Obligations  —  A contract's transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. To determine the proper revenue recognition method, we evaluate whether the contract should be accounted for as more than one performance obligation. This evaluation requires significant judgment; some of our contracts have a single performance obligation as the promise to transfer the individual goods or services is not separately identifiable from other promises in the contracts and, therefore, not distinct. For contracts with multiple performance obligations, we allocate the contract's transaction price to each performance obligation using our best estimate of the standalone selling price of each distinct good or service in the contract.

Variable Consideration  —  Due to the nature of the work required to be performed on many of our performance obligations, the estimation of total revenue and cost at completion is complex, subject to many variables and requires significant judgment. It is common for our collaboration agreements to contain variable consideration that can increase the transaction price. Variability in the transaction price arises primarily due to milestone payments obtained following the achievement of specific milestones (e.g., scientific results or regulatory or commercial approvals). We include the related amounts in the transaction price as soon as their receipt is highly probable. The effect of the increase of the transaction price due to milestones payments is recognized as an adjustment to revenue on a cumulative catch-up basis.

Revenue Recognized Over Time and Input Method  —  Our performance obligations are satisfied over time as work progresses or at a point in time. For our collaboration agreements, because services are rendered over time, revenue is recognized based on the extent of progress towards completion of the performance obligation, using an input measure of progress as it best depicts the transfer of control to the customer.

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Under our input measure of progress, the extent of progress towards completion is measured based on the ratio of days expended to date to the total estimated days at completion of the performance obligation.

Provision for Tax Audit

We calculate our provision for tax audit based on an estimate of the related risk. The provision represents the best estimate of the amount required to settle any amounts owed to the relevant tax authorities at the end of the reporting period.

Research Tax Credit

The amount of the research tax credit for which we are eligible depends on internal and external research and development expenditures. The calculation of eligible expenditures requires management to make judgments and estimates.

Share-Based Compensation

We have granted share-based compensation to certain employees, as well as to members of our board of directors and certain other parties in the form of founder's share warrants (bons de souscription de parts de créateur d'entreprise) share warrants (bons de souscription d'actions) and bonus share awards (actions gratuites).

We account for share-based compensation in accordance with the authoritative guidance on share-based compensation, IFRS 2 Share-based payment, or IFRS 2. Under the fair value recognition provisions of IFRS 2, share-based compensation is measured at the grant date based on the fair value of the award and is recognized as expense, net of estimated forfeitures, over the requisite service period, which is generally the vesting period of the respective award.

Determining the fair value of share-based awards at the grant date requires judgment. We use the Black-Scholes option-pricing model to determine the fair value of share-based awards. The determination of the grant date fair value of share-based awards using an option-pricing model is affected by assumptions regarding a number of complex and subjective variables. These variables include the fair value of our ordinary shares on the date of grant, the expected term of the awards, our share price volatility, risk-free interest rates and expected dividends.

For the years ended December 31, 2018 and 2019, we recorded share-based compensation expenses of €0.8 million and €1.4 million, respectively. For the three months ended March 31, 2019 and 2020, we recorded share-based compensation expenses of €0.4 million and €0.2 million, respectively.

New Accounting Standards

We adopted IFRS 16 – Leases, effective from January 1 2019. In accordance with this standard, we recognized:

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    an asset, representing our right to use the leased asset during the lease term (right-of-use asset); and

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    a liability, representing the value of the outstanding lease payments (lease liability).

In accordance with IFRS 16, as we used the simplified retrospective method, our comparative data have not been restated. However, the impact being less than €0.1 million on our income statement for the year ended December 31,2019, the comparability of our result of operations between 2018 and 2019 is not materially impacted.

See Note 2.1. to our 2019 annual financial statements for further details on IFRS 16 first-time adoption impacts.

Off-Balance Sheet Arrangements

During the periods presented, we did not and do not currently have any off-balance sheet arrangements as defined under Securities and Exchange Commission rules, such as relationships with other entities or

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financial partnerships, which are often referred to as structured finance or special purpose entities, established for the purpose of facilitating financing transactions that are not required to be reflected on our statement of financial position.

Quantitative and Qualitative Disclosures About Market Risk

Foreign Currency Exchange Risk

We use the euro as our functional currency for our financial communications. However, a portion of our operating expenses is denominated in foreign currencies as a result of our studies and clinical trials performed in the United States, United Kingdom, Switzerland, Australia, Canada and Sweden. During 2019, these expenses in foreign currencies totaled approximately €3.8 million based on the exchange rates in effect at the date of each transaction, or approximately 9% of our operating expenses, compared to approximately €2.3 million, or 6%, during 2018. During the three months ended March 31, 2020, these expenses in foreign currencies totaled approximately €0.6 million, or approximately 8% of our operating expenses. As a result, we are exposed to foreign exchange risk inherent in operating expenses incurred. Due to the relatively low level of these expenditures, the exposure to foreign exchange risk is unlikely to have a material adverse impact on our results of operations or financial position. In addition, we currently have revenues only in euros. As we advance our clinical development in the United States and potentially commercialize our product candidates in that market, we expect to face greater exposure to exchange rate risk and would then consider using exchange rate hedging techniques at that time.

Interest Rate Risk

We believe we have very low exposure to interest rate risk. Such exposure primarily involves our money market funds and time deposit accounts. Changes in interest rates have a direct impact on the rate of return on these investments and the cash flows generated. The repayment flows of the conditional advances from BPI France are not subject to interest rate risk.

Credit Risk

We believe that the credit risk related to our cash and cash equivalents is not significant in light of the quality of the financial institutions at which such funds are held.

JOBS Act Exemptions and Foreign Private Issuer Status

We qualify as an "emerging growth company" as defined in the U.S. Jumpstart Our Business Startups Act of 2012. An emerging growth company may take advantage of specified reduced reporting and other burdens that are otherwise applicable generally to public companies in the United States. This includes an exemption from the auditor attestation requirement in the assessment of our internal control over financial reporting pursuant to the Sarbanes-Oxley Act of 2002. We may take advantage of this exemption until such time as we are no longer an emerging growth company. We would cease to be an emerging growth company upon the earliest to occur of the following: (1) the last day of the fiscal year in which we have total annual gross revenue of $1.07 billion or more; (2) the last day of our fiscal year following the fifth anniversary of the date of the completion of this offering; (3) the date on which we have issued more than $1.0 billion in nonconvertible debt during the previous three years; and (4) the date on which we are deemed to be a large accelerated filer under the rules of the SEC. We may choose to take advantage of some but not all of these reduced burdens.

We will not take advantage of the extended transition period provided under Section 7(a)(2)(B) of the U.S. Securities Act of 1933, as amended, for complying with new or revised accounting standards. Since IFRS makes no distinction between public and private companies for purposes of compliance with new or revised accounting standards, the requirements for our compliance as a private company and as a public company are the same.

Upon consummation of this offering, we will report under the U.S. Securities Exchange Act of 1934, as amended, or the Exchange Act, as a non-U.S. company with foreign private issuer status. Even after we no

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longer qualify as an emerging growth company, as long as we qualify as a foreign private issuer under the Exchange Act, we will be exempt from certain provisions of the Exchange Act that are applicable to U.S. domestic public companies, including:

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    the sections of the Exchange Act regulating the solicitation of proxies, consents or authorizations in respect of a security registered under the Exchange Act;

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    the sections of the Exchange Act requiring insiders to file public reports of their stock ownership and trading activities and liability for insiders who profit from trades made in a short period of time;

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    the rules under the Exchange Act requiring the filing with the SEC of quarterly reports on Form 10-Q containing unaudited financial and other specified information, or current reports on Form 8-K, upon the occurrence of specified significant events; and

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    Regulation FD, which regulates selective disclosures of material information by issuers.

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BUSINESS

Overview

We are a clinical-stage biopharmaceutical company focused on the development of oral small molecule therapies for the treatment of non-alcoholic steatohepatitis, or NASH, mucopolysaccharidoses, or MPS, and other diseases with significant unmet medical need. We have built a pipeline backed by a discovery engine with an extensive library of proprietary molecules, a wholly-owned research and development facility and a team with significant expertise and experience in the development of compounds that target nuclear receptors, transcription factors and epigenetic modulation. Leveraging these assets and expertise, we are advancing two clinical candidates, lanifibranor and odiparcil for the treatment of NASH and MPS, respectively, as well as a deep pipeline of earlier stage programs in oncology and other diseases with significant unmet medical need.

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    Lanifibranor for the Treatment of NASH.  We are developing our lead product candidate, lanifibranor, for the treatment of patients with non-alcoholic steatohepatitis, or NASH, a progressive, chronic liver disease for which there are currently no approved therapies. NASH is believed to affect 12% of the United States population and is a leading cause of cirrhosis, liver transplantation and liver cancer. Compared to the general population, patients with NASH have a ten-fold greater risk of liver-related mortality. NASH is characterized by a metabolic process known as steatosis, or the excessive accumulation of fat in the liver, inflammation and ballooning of liver cells and progressive liver fibrosis that can ultimately lead to cirrhosis. Lanifibranor is an orally-available small molecule in development for the treatment of NASH that acts to induce anti-fibrotic, anti-inflammatory and beneficial vascular and metabolic changes in the body by activating all three peroxisome proliferator-activated receptor, or PPAR, isoforms. PPARs are well-characterized nuclear receptor proteins that regulate gene expression, and their relevance for the fibrotic, inflammatory, vascular and metabolic processes that characterize NASH is well-established. While there are other PPAR agonists that target only one or two PPAR isoforms, lanifibranor is the only pan-PPAR agonist in clinical development. We believe that this pan-PPAR approach provides for a combination of anti-fibrotic, anti-inflammatory and beneficial vascular and metabolic effects that cannot be obtained with single and dual PPAR agonists. In June 2020, we announced positive topline results from our NATIVE Phase IIb clinical trial of lanifibranor in patients with NASH. In this trial, treatment with lanifibranor at a dose of 1,200 mg met the primary endpoint of a reduction in inflammation and ballooning with no worsening of fibrosis after 24 weeks of treatment, while continuing to show the favorable tolerability profile observed in prior clinical trials of lanifibranor. Treatment with lanifibranor at doses of 800 mg and 1,200 mg also met the key secondary endpoints of resolution of NASH with no worsening of fibrosis and, at the 1,200 mg dose, improvement in liver fibrosis without worsening NASH, which are the primary endpoints relevant for seeking accelerated approval from the U.S. Food and Drug Administration, or FDA, and the European Medical Agency, or EMA, after future Phase III development. In light of these positive results, we plan to advance lanifibranor, either alone or together with a collaborator, into pivotal development after end of Phase IIb meetings with the FDA and scientific advice meetings with the EMA, which are expected to take place in the fourth quarter of 2020. Lanifibranor has received fast track designation from the FDA for the treatment of NASH.

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    Odiparcil for the Treatment of MPS.  Our second clinical-stage asset is odiparcil, which we are developing for the treatment of patients with MPS, a group of rare genetic disorders characterized by an excessive accumulation of large sugar chains, known as glycosaminoglycans, or GAGs, in cells. Odiparcil is an orally-available small molecule designed to modify how GAGs are synthesized. Odiparcil acts to facilitate the production of soluble GAGs that can be excreted in the urine, rather than accumulating in cells. The current standard of care for the treatment of patients with MPS is enzyme replacement therapy, or ERT, which requires weekly infusions and is generally administered in an outpatient hospital setting. While ERT has been shown to be effective in reducing GAG

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      accumulation in certain tissue types, it has shown limited efficacy in reducing GAG accumulation in poorly vascularized tissues and organs, such as cartilage, or in tissues that are protected by a barrier, such as the eye. Unlike ERT, odiparcil is a small molecule that we have observed to be well distributed in the body, even in certain tissues that are poorly vascularized or protected by a barrier. In December 2019, we announced positive results from a Phase IIa clinical trial of odiparcil for the treatment of adult patients with the MPS VI subtype. In this trial, we observed that odiparcil, in combination with enzyme replacement therapy, or ERT, was associated with improvements in corneal clouding and cardiac and respiratory function and exhibited a favorable tolerability profile. Signals of clinical activity were also detected in patients treated only with odiparcil. Because MPS is a progressive disease, we believe there is benefit in treating pediatric patients with MPS, and we plan to commence a Phase Ib/II clinical trial of odiparcil in a pediatric population with MPS VI in the first half of 2021. If the results of this pediatric trial are favorable, we plan to initiate Phase III clinical development of odiparcil as a monotherapy and in combination with ERT for the treatment of adult and pediatric patients with MPS VI. In addition, we plan to initiate an open label Phase IIa extension study in the first half of 2021 to investigate the long-term safety and efficacy of odiparcil in patients 16 years and above with MPS VI who completed the prior Phase IIa trial. We believe odiparcil's mechanism of action is relevant to a number of MPS subtypes, and we also plan to initiate pivotal trials for the treatment of one or more of MPS subtypes I, II, IVa and VII. Odiparcil has received orphan drug designation from the FDA and EMA and rare pediatric disease designation from the FDA for the treatment of MPS VI.

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    Discovery Engine.  We have a scientific team of approximately 70 people with deep biology, medicinal and computational chemistry, pharmacokinetics and pharmacology expertise, more than 75% of whom have worked together for more than 15 years. We also own a library of approximately 240,000 pharmacologically relevant molecules, 60% of which are proprietary, as well as a wholly-owned research and development facility. Using these assets and this expertise, we have built a discovery engine focused on small molecule compounds that target nuclear receptors, transcription factors and epigenetic modulation. We are leveraging this discovery engine to identify and develop compounds addressing a wide range of indications. Our Hippo signaling pathway program aims to disrupt the interaction between yes-associated protein, or YAP, and transcription enhancer associated domain transcription factors, or TEAD, an interaction that plays a key role in oncogenic and fibrotic processes. In xenograft and orthotopic models of malignant pleural mesothelioma, or MPM, we observed that YAP-TEAD inhibition was associated with reduced tumor growth and we are in the process of selecting development candidate for our Hippo program, which we anticipate entering pre-clinical development in 2021 for the treatment of non-small cell lung cancer and mesothelioma. We are also advancing a pre-clinical program for the treatment of idiopathic pulmonary fibrosis, or IPF, and have validated a new target within the transforming growth factor beta, or TGF-b, signaling pathway.

Lanifibranor for the Treatment of NASH

We are developing lanifibranor for the treatment of patients with NASH. NASH is a progressive chronic liver disease, often resulting in liver failure and death, for which there are currently no approved therapies. NASH is believed to affect 12% of the United States population. In 2020, NASH is expected to become a leading cause of liver transplantation in the United States. Additionally, NASH is now considered to be the leading, and a rapidly increasing, cause of hepatocellular carcinoma, or primary liver cancer, of which up to 40% of cases in NASH patients develop prior to developing cirrhosis. More than 20% of patients with NASH progress to cirrhosis within a decade of diagnosis and, compared to the general population, have a ten-fold greater risk of liver-related mortality. NASH is characterized by (i) a metabolic process known as steatosis, or the excessive accumulation of fat in the liver, (ii) inflammation and ballooning of liver cells and (iii) progressive liver fibrosis that can ultimately lead to cirrhosis. NASH is increasingly viewed as the expression in the liver of metabolic syndrome and is frequently accompanied by obesity, insulin resistance and type 2 diabetes.

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Lanifibranor is an orally available small molecule in development for the treatment of NASH that acts to induce anti-fibrotic, anti-inflammatory and beneficial vascular and metabolic changes in the body by activating each of the three PPAR isoforms, known as PPARa, PPARd and PPARg. PPARs are ligand-activated transcription factors belonging to the nuclear hormone receptor family that regulate the expression of genes. PPARs play essential roles in the regulation of cellular differentiation, development and tumorigenesis. The relevance of each isoform to different aspects of fibrotic, inflammatory, vascular and metabolic processes is well-established:

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    activation of each of PPARg and PPARd is associated with anti-fibrotic benefits;

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    activation of each of PPARa, PPARd and PPARg is known to have anti-inflammatory effects;

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    activation of each of PPARa and PPARg is associated with beneficial vascular effects; and

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    activation of each of PPARa, PPARd and PPARg is known to result in positive metabolic effects.

Lanifibranor is a PPAR agonist that is designed to target all three PPAR isoforms in a moderately potent manner, with a well-balanced activation of PPARa and PPARd, and a partial activation of PPARg. While there are other PPAR agonists that target only one or two PPAR isoforms, lanifibranor is the only pan-PPAR agonist in clinical development. We believe that this pan-PPAR approach provides for a combination of anti-fibrotic, anti-inflammatory and beneficial vascular and metabolic effects that cannot be obtained with single and dual PPAR agonists. In pre-clinical studies, we observed that the administration of lanifibranor improved insulin sensitivity and lipid profile, reduced nonalcoholic fatty liver disease activity score, or NAS score, reversed liver fibrosis and reduced portal pressure. Further, in clinical trials in type 2 diabetes conducted prior to our founding, the administration of lanifibranor was associated with favorable anti-inflammatory effects, including increased levels of adiponectin, which inhibits the release of cytokines and other pro-inflammatory proteins. Lanifibranor was also associated with favorable metabolic effects, including improvements in insulin sensitivity, reductions in levels of triglycerides, which are a type of fat, and increases in high-density lipoprotein, or HDL, cholesterol levels.

We believe lanifibranor's moderate and balanced pan-PPAR binding profile also contributes to the favorable tolerability profile that has been observed in clinical trials and pre-clinical studies to date. Over 250 patients were treated for 24 or 48 weeks in our Phase IIb clinical trials of lanifibranor. In these trials, lanifibranor showed a favorable tolerability profile. In addition, in connection with these trials, lanifibranor underwent a total of seven data and safety monitoring board, or DSMB, reviews, and the DSMBs did not recommend any changes to the trial protocols. In addition, prior to our founding, lanifibranor was administered to over 150 subjects in clinical trials in type 2 diabetes and exhibited a favorable tolerability profile, including with respect to key markers of liver, kidney, heart, muscle and bone function. By contrast, single and dual PPAR agonists, which generally target PPAR isoforms in a very potent and imbalanced manner, have historically been associated with toxicity and adverse effects.

In June 2020, we announced positive topline results from our NATIVE Phase IIb clinical trial of lanifibranor in patients with NASH. In this trial, treatment with lanifibranor at a dose of 1,200 mg met the primary endpoint of a reduction in inflammation and ballooning with no worsening of fibrosis after 24 weeks of treatment, while continuing to show the favorable tolerability profile observed in prior clinical trials of lanifibranor. Treatment with lanifibranor at doses of 800 mg and 1,200 mg also met the key secondary endpoints of resolution of NASH with no worsening of fibrosis and, at the 1,200 mg dose, improvement in liver fibrosis without worsening NASH, which are the primary endpoints relevant for seeking accelerated approval from the FDA and the EMA, after future Phase III development. In light of these positive results, we plan to advance lanifibranor, either alone or together with a collaborator, into pivotal development after end of Phase IIb meetings with the FDA and scientific advice meetings with the EMA, which are expected to take place in the fourth quarter of 2020. Lanifibranor has received fast track designation from the FDA for the treatment of NASH.

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Odiparcil for the Treatment of MPS

We are developing odiparcil for the treatment of patients with several subtypes of MPS. Odiparcil is an orally-available small molecule that acts on the underlying cause of the symptoms of MPS, which is the accumulation of GAGs in cells due to deficient lysosomal enzymes. By modifying how GAGs are synthesized, odiparcil facilitates the production of soluble GAGs that can be excreted in the urine, rather than accumulating in cells. In pre-clinical studies, we observed that odiparcil reduced accumulation of two specific GAGs, chondroitin sulfate, or CS, and dermatan sulfate, or DS, in several organs and tissues. ERT is the current standard of care for the treatment of patients with MPS but requires weekly infusions and is generally administered in an outpatient hospital setting. Furthermore, while ERT has been shown to be effective in reducing GAG accumulation in some tissue types, it has shown limited efficacy in reducing GAG accumulation in tissues that are poorly vascularized or protected by a barrier. By contrast, we have observed, in pre-clinical studies, that odiparcil is well distributed in the body, including in cartilage and the eye, which are tissues that are poorly penetrated by ERT. Because odiparcil has a different mechanism of action than ERT and reaches tissues that are poorly penetrated by ERT and in which MPS symptoms often manifest, we believe odiparcil could be used as a combination therapy with ERT. Based on our pre-clinical data, we also believe odiparcil has potential as a stand-alone therapy.

MPS is separated into subtypes, depending on the lysosomal enzyme that is deficient and the corresponding GAGs that accumulate. One or both of CS and DS, the GAGs on which odiparcil acts, accumulate in patients with MPS I, II, IVa, VI and VII. To date, we have focused development of odiparcil on the treatment of patients with MPS VI, which is characterized by rounded and thickened facial features, corneal clouding, hearing loss, dwarfism with deformity of the limbs, enlargement of the liver and spleen, cardiac valve disease and reduced pulmonary function, and an approximate life expectancy of 20 years for untreated patients with severe forms of the disease. In an MPS VI model using a mouse that was genetically modified to reflect human MPS pathology, we observed that administration of odiparcil reduced GAG accumulation in organs and tissues and improved mobility. Prior to our founding, odiparcil was administered to over 1,800 subjects in clinical trials in an unrelated indication and was reported to be well tolerated and exhibited a favorable safety profile at daily doses in excess of the therapeutic range.

In December 2019, we announced positive results from the iMProveS Phase IIa clinical trial of odiparcil, which enrolled twenty patients, aged 16 years or older, with advanced MPS VI subtype disease. Fifteen patients were randomized to receive baseline ERT in combination with one of two doses of odiparcil, 250 mg or 500 mg administered twice daily, or placebo. Five patients who were not receiving ERT received 500 mg of odiparcil administered twice daily in an open label cohort. After 26 weeks of treatment, we observed that odiparcil in combination with ERT was associated with improvements in corneal clouding and cardiac and respiratory function and exhibited a favorable tolerability profile. Signals of clinical activity were also detected in patients treated only with odiparcil. We observed improved mobility as assessed using the six minute walk test, or 6MWT, in patients treated with ERT and the 250mg twice daily dose of odiparcil, as well as in patients in the open label cohort. We did not observe improved mobility using the 6MWT in patients treated with ERT and the 500mg twice daily dose of odiparcil. Dose-dependent urinary GAGs clearance, used as an activity biomarker, was observed in the entire odiparcil-treated patient population. A reduction in leukocyte GAGs was not observed and therefore was not confirmed as a biomarker for the decrease of GAG accumulation. The trial also met its safety primary endpoint with odiparcil exhibiting a favorable tolerability profile. Because MPS is a progressive disease, we believe there is benefit in treating pediatric patients with MPS, and we plan to commence a Phase Ib/II clinical trial of odiparcil in a pediatric population with MPS VI in the first half of 2021. If the results of this pediatric trial are favorable, we plan to initiate Phase III clinical development of odiparcil as a monotherapy and in combination with ERT for the treatment of adult and pediatric patients with MPS VI. In addition, we plan to initiate an open label Phase IIa extension study in the first half of 2021 to investigate the long-term safety and efficacy of odiparcil in patients 16 years and above with MPS VI who completed the iMProveS trial. Because odiparcil targets GAGs that are also present in other MPS subtypes, we believe that the data generated in the iMProveS trial may also support moving directly to Phase III pivotal trials in other MPS subtypes that are

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characterized by the accumulation of CS or DS. Odiparcil has received orphan drug designation from the FDA and EMA and rare pediatric disease designation from the FDA for the treatment of MPS VI.

Our Discovery Engine

Frédéric Cren, our Chief Executive Officer, and Pierre Broqua, our Deputy Chief Executive Officer and Chief Scientific Officer, co-founded Inventiva through the acquisition of assets, including a research and development facility, from the Fournier division of Abbott Laboratories, or Abbott. Mr. Cren and Dr. Broqua previously led Fournier's research and development activities. In connection with our founding, Mr. Cren and Dr. Broqua recruited a team, which they previously led at Fournier, that possesses deep biology, medicinal and computational chemistry, pharmacokinetics and pharmacology expertise, covering the drug discovery process from target validation to investigational new drug application, or IND, enabling studies. More than 75% of the members of this team have worked with our co-founders and each other for more than 15 years. Our research and development capabilities, including a wholly-owned, 129,000 square foot research and development facility, are of a scale and quality that we believe ordinarily are only possessed by large pharmaceutical companies. We also own a library of approximately 240,000 pharmacologically relevant molecules, 60% of which are proprietary. We believe these assets differentiate us from many other biotechnology companies at a similar stage of development, which in-license intellectual property and outsource research and development capabilities.

Using our assets and expertise, we have built a discovery engine focused on oral small molecule compounds that target nuclear receptors, transcription factors and epigenetic modulation. Our assets and expertise have enabled us to efficiently identify and advance multiple, novel and differentiated programs in areas with high unmet medical need, including lanifibranor for the treatment of NASH and odiparcil for the treatment of MPS. We are also leveraging our discovery engine to advance the development of our Hippo program, which aims to disrupt the YAP-TEAD interaction, an interaction that plays a key role in oncogenic and fibrotic processes. In xenograft and orthotopic models of MPM, we observed that YAP-TEAD inhibition was associated with reduced tumor growth and we are in the process of selecting development candidate for our Hippo program, which we anticipate entering pre-clinical development in 2021 for the treatment of non-small cell lung cancer and mesothelioma. We are also advancing a pre-clinical program for the treatment of IPF, and have validated a new target within the TGF-b signaling pathway. TGF-b is a cytokine that is a key driver of fibrosis and acts by activating fibroblasts into myofibroblasts, which in turn drives the production of fibrotic connecting tissues. We are progressing this program into lead generation in anticipation of selecting a development candidate.

Our Strategy

Our goal is to rapidly deliver multiple, novel and differentiated oral small molecule therapies to patients suffering from NASH, MPS, cancer and other diseases with significant unmet medical need. To achieve our goal, we are pursuing the following strategies:

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    Demonstrate the Safety and Efficacy of Lanifibranor in the Treatment of NASH in Pivotal Clinical Trials.  In June 2020, we announced positive topline results from our NATIVE Phase IIb clinical trial of lanifibranor in patients with NASH. In this trial, treatment with lanifibranor at a dose of 1,200 mg met the primary endpoint of a reduction in inflammation and ballooning with no worsening of fibrosis after 24 weeks of treatment, while continuing to show the favorable tolerability profile observed in prior clinical trials of lanifibranor. Treatment with lanifibranor at doses of 800 mg and 1,200 mg also met the key secondary endpoints of resolution of NASH with no worsening of fibrosis and, at the 1,200 mg does, improvement in liver fibrosis without worsening NASH, which are the primary endpoints relevant for seeking accelerated approval from the FDA and the EMA after future Phase III development. In light of these positive results, we plan to advance lanifibranor, either alone or together with a collaborator, into pivotal development after end of Phase IIb meetings with the FDA and scientific advice meetings with the EMA, which are expected to take place in the fourth quarter of 2020. We are also supporting a Phase II investigator-initiated clinical trial studying lanifibranor for

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      the treatment of nonalcoholic fatty liver disease, or NAFLD, the most common liver disorder in developed countries and a precursor to NASH. If positive, we expect that these data would support our registrational filings for lanifibranor for the treatment of NASH. Lanifibranor has received fast track designation from the FDA for the treatment of NASH. Based on the broad anti-fibrotic and anti-inflammatory properties, as well as beneficial vascular and metabolic effects, of lanifibranor observed in pre-clinical and clinical development to date, we may also pursue development of lanifibranor for the treatment of NASH patients with stage four fibrosis, which is severe fibrosis with liver cirrhosis. Given our belief that NASH is underdiagnosed and poorly understood by the medical community, we have founded and sponsored the development of the panNASH Initiative, which is a working group of international independent NASH experts that aims to increase the visibility and contribute to a better understanding of NASH, including improving diagnosis and establishing best practices for the treatment of the disease.

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    Rapidly Advance Odiparcil to Pivotal Trials.  In December 2019, we announced positive results from a Phase IIa clinical trial of odiparcil for the treatment of adult patients with the MPS VI subtype. In this trial, we observed that odiparcil, in combination with ERT, was associated with improvements in corneal clouding and cardiac and respiratory function and exhibited a favorable tolerability profile. Signals of clinical activity were also detected in patients treated only with odiparcil. Because MPS is a progressive disease, we believe there is benefit in treating pediatric patients with MPS, and we plan to commence a Phase Ib/II clinical trial of odiparcil in a pediatric population with MPS VI in the first half of 2021. If the results of this pediatric trial are favorable, we plan to initiate Phase III clinical development of odiparcil as a monotherapy and in combination with ERT for the treatment of adult and pediatric patients with MPS VI. In addition, we plan to initiate an open label Phase IIa extension study in the first half of 2021 to investigate the long-term safety and efficacy of odiparcil in patients 16 years and above with MPS VI who completed the prior Phase IIa trial. We believe odiparcil's mechanism of action is relevant to a number of MPS subtypes, and we also plan to initiate pivotal trials for the treatment of one or more of MPS subtypes I, II, IVa and VII. Odiparcil has received orphan drug designation from the FDA and EMA and rare pediatric disease designation from the FDA for the treatment of MPS VI.

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    Leverage the Power of Our Discovery Engine to Identify and Advance Additional Novel Programs in Areas with High Unmet Medical Need.  We plan to leverage our library of approximately 240,000 pharmacologically relevant molecules, our advanced research and development facilities and our medicinal, computational chemistry, pharmacokinetics and pharmacology expertise to identify and develop new compounds. For example, we are in the process of selecting development candidate for our Hippo program, which we anticipate entering pre-clinical development in 2021 for the treatment of non-small cell lung cancer and mesothelioma.

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    Selectively Seek Strategic Collaborations to Maximize the Value of Our Assets.  Our differentiated product candidates and robust discovery engine may enable us to address a wide variety of indications. We plan to selectively form research, development and commercial strategic collaborations around product candidates or disease areas that we believe could benefit from the resources of either larger biopharmaceutical companies or those specialized in a particular area of relevance. In addition, in light of the positive Phase IIb trial results for lanifibranor for the treatment of patients with NASH, we plan to explore a strategic collaboration for pivotal development given the size and scope of this indication.

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Our Pipeline

We have leveraged our assets and expertise to advance the development of multiple, novel and differentiated oral small molecule therapies. The following table summarizes our key candidates and programs:

GRAPHIC


*
In addition to our wholly-owned programs, AbbVie Inc., or AbbVie, is currently investigating ABBV-157, a RORg inverse agonist that we and AbbVie jointly discovered, in a Phase I clinical trial for the treatment of moderate to severe psoriasis under the terms of our multi-year drug discovery collaboration

**
Lead generation means identifying molecules in anticipation of selecting candidates.

Lanifibranor for the Treatment of NASH

NASH is a progressive chronic liver disease, often resulting in liver failure and death, that affects millions of patients and for which there are currently no approved therapies. NASH is characterized by a metabolic process known as steatosis, or the excessive accumulation of fat in the liver, inflammation and ballooning of liver cells and progressive liver fibrosis that can ultimately lead to cirrhosis.

Our lead product candidate, lanifibranor, is an orally-available small molecule in development for the treatment of NASH that acts to induce anti-fibrotic, anti-inflammatory and beneficial vascular and metabolic changes in the body by activating all three PPAR isoforms. While there are other PPAR agonists that target only one or two PPAR isoforms, lanifibranor is the only pan-PPAR agonist in clinical development. We believe that this pan-PPAR approach provides for a combination of anti-fibrotic, anti-inflammatory and beneficial vascular and metabolic effects that cannot be obtained with single and dual PPAR agonists.

In pre-clinical studies, we observed that the administration of lanifibranor improved insulin sensitivity and lipid profile, reduced NAS score, slowed, blocked and reversed liver fibrosis and reduced portal pressure. Further, in clinical trials in patients with type 2 diabetes conducted prior to our founding, Abbott observed improvements in key metabolic parameters associated with NASH following treatment with lanifibranor.

In June 2020, we announced positive topline results from our NATIVE Phase IIb clinical trial of lanifibranor in patients with NASH. In light of these positive results, we plan to advance lanifibranor, either alone or together with a collaborator, into pivotal Phase III clinical development after end of Phase IIb meetings with

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the FDA and scientific advice meetings with the EMA, which are expected to take place in the fourth quarter of 2020.

Disease Overview and Opportunity

NASH is a common and progressive chronic liver disease that is an advanced progression of nonalcoholic fatty liver disease, or NAFLD. NASH has five main components. The first component is metabolic. NASH is increasingly understood as the expression in the liver of metabolic syndrome and is frequently associated with obesity, insulin resistance and type 2 diabetes. Second, NASH is characterized by excessive fat accumulation in the liver, known as steatosis, that is not caused by excessive use of alcohol. Steatosis is a metabolic dysfunction that occurs when the liver cells import more fatty acids than they can metabolize, leading to lipogenesis, or the creation of fat. Third, in NASH patients, steatosis induces chronic inflammation and the death of liver cells, observed histologically as ballooning of necrotic cells. Fourth, inflammation and ballooning may lead to progressive fibrosis in the liver, and ultimately cirrhosis, as the body responds to the liver's injured state by producing stellate cells, fibroblasts and accompanying proteins, such as collagen and fibronectin. Fifth, advanced fibrosis of the liver is characterized in part by increased vascular resistance and portal hypertension, or high blood pressure in the system of veins running from the intestinal system to the liver. NASH is diagnosed by means of a liver biopsy that confirms the presence of steatosis, inflammation, ballooning and fibrosis.

The overall NASH prevalence in the adult population of the United States is believed to be approximately 12%. Given the prevalence of the underlying risk factors for the disease, including type 2 diabetes and obesity, as well as the need for a biopsy to diagnose NASH, we also believe that the disease may be underdiagnosed. In 2020, NASH is expected to become a leading cause of liver transplantation in the United States. Additionally, NASH is now considered to be the leading, and a rapidly increasing, cause of hepatocellular carcinoma, or primary liver cancer, of which up to 40% of cases in NASH patients develop prior to developing cirrhosis. More than 20% of patients with NASH progress to cirrhosis within a decade of diagnosis and, compared to the general population, have a ten-fold greater risk of liver-related mortality.

There are currently no approved therapies for the treatment of NASH. Various therapeutics, including insulin sensitizers and vitamin E, are used off-label. Lifestyle changes, including modification of diet and exercise to reduce body weight, as well as treatment of concomitant diabetes and dyslipidemia, are commonly accepted as the standard of care, but have not conclusively been shown to prevent disease progression.

Background: PPAR Activation and NASH

PPARs are ligand-activated transcription factors belonging to the nuclear hormone receptor family that regulate the expression of genes. PPARs play essential roles in the regulation of cellular differentiation, development and tumorigenesis. There are three PPAR isoforms, known as PPARa, PPARd and PPARg. As shown in the diagram below, PPAR activation has been established to play a role in regulating each of the components of NASH:

    §
    Metabolism:  Activation of PPARa and PPARd have been demonstrated to reduce triglyceride levels and increase HDL cholesterol levels, while activation of PPARg has been demonstrated to increase insulin sensitization, all of which are key metabolic markers in patients with NASH.

    §
    Steatosis:  Activation of PPARa and PPARg address key elements of steatosis by enhancing fatty acid metabolism and ultimately decreasing lipogenesis.

    §
    Inflammation and Ballooning:  Activation of PPARa, PPARd and PPARg have been associated with statistically significant reductions in inflammation and ballooning.

    §
    Fibrosis:  Activation of PPARg and PPARd is associated with anti-fibrotic effects across the process of fibrosis, from the production of stellate cells to the production of fibrotic proteins such as collagen and fibronectin.

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    §
    Vascular Processes:  Activation of PPARa and PPARg have been shown to decrease liver sinusoisal endothelial cell capillarisation and improve endothelial function, leading to decrease hepatic vascular resistance and portal pressure, and in turn reduced hypertension.

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PPAR agonists act to induce anti-fibrotic, anti-inflammatory and positive vascular and metabolic effects by activating one or more PPAR isoforms, as well as by repressing or recruiting co-regulators of these isoforms, which are proteins that interact with the transcription machinery of cells to enhance or inhibit the transcription of genes. Depending on their chemical structure, PPAR agonists can activate different PPAR isoforms, and can activate each isoform more or less potently, depending on the manner in which the agonist binds to the isoform and the nature and number of co-regulators that the agonist represses or recruits.

The interaction of PPAR agonists and PPAR isoforms is complex, and creating therapeutic chemical compounds that induce the desired clinical effects is challenging. A PPAR agonist intended to induce a specific anti-fibrotic, anti-inflammatory, vascular or metabolic effect by activating an isoform may not activate the isoform with sufficient potency to induce the desired effect, may activate the isoform with excessive potency, leading to unintended harmful consequences, or may co-activate additional isoforms, leading to additional effects, which may or may not be beneficial.

Single and dual PPAR agonists have been associated with toxicity and adverse effects, including adverse effects on the heart, kidney, skeletal muscle and bladder, as well as on body weight, water retention and bone mineral density. We believe this is because single and dual PPAR agonists have historically activated PPAR isoforms with excessive potency or in an imbalanced manner, leading to over-activation of certain isoforms in the attempt to activate other isoforms, or an under-activation of other isoforms that could counterbalance the effects of the activated isoforms.

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Lanifibranor as a Differentiated PPAR Agonist

Lanifibranor is a pan-PPAR agonist that is designed to target all three PPAR isoforms in a moderately potent manner, with a well-balanced activation of PPARa and PPARd, and a partial activation of PPARg. While there are other PPAR agonists that target only one or two PPAR isoforms, lanifibranor is the only pan-PPAR agonist in clinical development. We believe that this pan-PPAR approach provides for a combination of anti-fibrotic, anti-inflammatory and beneficial vascular and metabolic effects that cannot be obtained with single and dual PPAR agonists. We believe lanifibranor's moderate and balanced pan-PPAR binding profile also contributes to the favorable tolerability profile that has been observed in clinical trials and pre-clinical studies to date, including in our recently completed NATIVE Phase IIb trial.

We tested the response of each of the three PPAR isoforms to activation by lanifibranor at increasing doses. As shown in the first chart below, we observed that the response curve of each PPAR isoform to lanifibranor was similar and dose-dependent.

We also measured the binding affinity of lanifibranor to each of the three PPAR isoforms by using EC50, a commonly accepted measure of the potency of binding affinity that represents higher potencies with smaller numbers, and compared that to the documented binding affinity of other PPAR agonists. As shown in the second chart below, we observed that lanifibranor is the only PPAR agonist that activates all three PPAR isoforms. In addition, we observed that lanifibranor exhibited a more balanced activation of PPAR isoforms in comparison to other PPAR agonists, while also acting with moderate potency.

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Pre-clinical and clinical data, including data from our recently completed Phase IIb NATIVE trial, have shown that lanifibranor is associated with a favorable tolerability profile, which we believe is the result of its moderate and balanced binding profile. We have examined the physical binding of lanifibranor to PPARg and observed that lanifibranor binds differently to PPARg than other PPAR agonists, such as rosiglitazone, and recruits a more selective set of co-regulators, which suggests that lanifibranor will be less likely to induce an over-activation of the PPARg isoform. Further, studies conducted by others have shown that activation of certain PPAR isoforms can mitigate safety and tolerability issues that are associated with activation of other PPAR isoforms. For example, administration of PPARg agonists is associated with increased body weight and water retention in patients with diabetes and decreased bone mineral density in rodent models; however, co-administration of both a PPARa agonist and a PPARg agonist was observed to mitigate these adverse effects.

As shown in the chart below, in a 12-month toxicological study performed in non-human primates and two-year carcinogenicity studies in rats and mice, lanifibranor was not observed to be associated with toxicity or adverse effects on the heart, kidney, skeletal muscle or bladder. By contrast, single and dual PPAR agonists have been associated with toxicity and adverse effects on these organs.

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Furthermore, as shown in the figure below, in pre-clinical studies, it was observed that lanifibranor was the only PPAR agonist tested that was not associated with statistically significant increases in fluid retention, as evidenced by plasma volume expansion and heart weight increase, following nine weeks of administration at doses up to ten times greater than the therapeutic dose. By contrast, these adverse effects were observed to be associated with the PPARg agonist rosiglitazone as well as with the dual PPARa/g agonists tesaglitazar and muraglitazar.

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In this prospectus, statistically significant results are noted with asterisks. A result is considered to be statistically significant when the probability of the result occurring by random chance, rather than from the efficacy of the treatment, is sufficiently low. The conventional method for measuring the statistical significance of a result is known as the "p-value," which represents the probability that random chance caused the result (e.g., a p-value = 0.001 means that there is a 0.1% or less probability that the difference between the control group and the treatment group is purely due to random chance). In this prospectus, except as otherwise noted, a p-value less than 0.05 is denoted by a single asterisk, a p-value less than 0.01 is denoted by two asterisks, a p-value less than 0.001 is denoted by three asterisks and a p-value less than 0.0001 is denoted by four asterisks. Generally, a p-value less than 0.05 is considered statistically significant, and may be supportive of a finding of efficacy by regulatory authorities. However, regulatory authorities, including the FDA and EMA, do not rely on strict statistical significance thresholds as criteria for marketing approval and maintain the flexibility to evaluate the overall risks and benefits of a treatment.

Under Abbott's prior ownership, lanifibranor was also advanced through completion of Phase I clinical trials in which lanifibranor was administered to 125 healthy volunteers, and Phase IIa clinical trials in which lanifibranor was administered to 47 patients with type 2 diabetes over a period of four weeks. In these trials, lanifibranor exhibited a favorable tolerability profile, including with respect to key markers of liver, kidney, heart, muscle and bone function.

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Over 250 patients were treated for 24 or 48 weeks in our Phase IIb clinical trials of lanifibranor, including our recently completed Phase IIb NATIVE trial. In these trials, lanifibranor showed a favorable tolerability profile and was not observed to be associated with the toxicity or adverse effects that have been observed in trials of single and dual PPAR agonists. In addition, in connection with these trials, lanifibranor underwent a total of seven DSMB reviews, and the DSMBs did not recommend any changes to the trial protocols.

As a result of the toxicity and adverse effects associated with single and dual PPAR agonists, FDA regulations regarding the PPAR class of compounds require two-year carcinogenicity and one-year in vivo toxicity studies to be performed prior to a product candidate entering clinical trials longer than six months. In accordance with these requirements, we conducted three long-term toxicological studies of lanifibranor in 2015. We first evaluated lanifibranor in a 12-month primate toxicological study, in which the administration of the product candidate was not associated, at any dose-level tested, with adverse effects. Lanifibranor was also evaluated in two 2-year carcinogenicity studies in rats and mice designed to identify any potential carcinogenic risk. In these two studies, lanifibranor was not associated with any carcinogenic effect relevant to humans up to the highest dose tested. Following its review of the two-year carcinogenicity studies, the FDA lifted the clinical hold in place on the PPAR target class with respect to lanifibranor. This decision enables us to conduct clinical trials longer than six months evaluating lanifibranor for the treatment of NASH.

Pre-Clinical Development in NASH

In pre-clinical studies, we evaluated the effect of lanifibranor on the components of NASH, including studies that address effects linked to metabolic functions, including steatosis, to inflammation and ballooning, to the process of fibrosis and to vascular functions.

We induced liver inflammation, steatosis and fibrotic gene expression in the liver in mice through a methionine choline deficient, or MCD, diet, which is a model commonly used in studies related to NASH. We then administered a vehicle that served as a negative control, as well as lanifibranor at 10mg/kg and 30mg/kg. After three weeks of treatment, we observed statistically significant dose dependent decreases in both steatosis and inflammation in those mice administered lanifibranor as shown in the figure below.

Lanifibranor effect on steatosis in the MCD
model
  Lanifibranor effect on inflammation in the MCD
model

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We also administered lanifibranor in doses of 10mg/kg and 30mg/kg in a foz/foz mouse model. The rationale for using foz/foz mice in NASH research is that these mice spontaneously develop significant liver steatosis, with appreciable fibrosis, when fed a high fat, atherogenic diet, or HFD. As shown in the left figure below, we observed that the administration of lanifibranor was associated with statistically significant reductions in ballooning of the liver, and as shown in the right figure below, lanifibranor was associated with

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statistically significant improvements in NAS score, a commonly accepted, semi-quantitative evaluation of biopsy results that assesses the severity of steatosis, inflammation and ballooning in the liver.

Lanifibranor effect on ballooning in the foz/foz model   Lanifibranor effect on NAS score in the foz/foz model

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We also conducted pre-clinical studies of lanifibranor's anti-fibrotic activity in the liver. In a mouse model, we administered CCI4, an organic solvent that induces a strong liver inflammatory response producing fibrosis, as well as corn oil, which served as a negative control. We measured the expression of collagen at each site of administration. We concurrently administered lanifibranor at doses of 3mg/kg, 10mg/kg and 30mg/kg. As shown in the left figure below, we observed that the concurrent administration of lanifibranor with CCI4 was associated with statistically significant, dose-dependent decreases in collagen production at the site of administration, suggesting that lanifibranor inhibited the progression of fibrotic processes.

Using the same model, we also administered CCI4 and corn oil three weeks prior to the administration of lanifibranor at doses of 15mg/kg and 30mg/kg. As shown in the right figure below, we observed that the administration of lanifibranor after the onset of fibrosis was associated with statistically significant decreases in collagen production, suggesting that the fibrotic process was reversed.

Lanifibranor effect on liver fibrosis induction   Lanifibranor effect on established liver fibrosis

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In other pre-clinical studies, we also evaluated the effect of lanifibranor on key metabolic parameters associated with NASH. In a diet-induced obesity and insulin resistance model, we observed that administration of lanifibranor was associated with significant improvements in body weight, adiposity index, non-fasting glucose levels and insulin levels.

We also investigated the effect of two weeks of treatment with lanifibranor on cirrhotic rats and observed an amelioration of fibrosis and portal hypertension. As shown in the graphic below, administration of lanifibranor was associated with a reduction in portal pressure, or PP, and an increase in portal blood flow, or PBF, which we believe are a result of improvement in the intrahepatic vascular resistance. Increased PBF was associated with liver function improvement as evidenced by decreased aspartate aminotransferase, or

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AST, which is an enzyme released when the liver is damaged. In addition, in the lanifibranor treated group there were significantly fewer rats that presented with ascites, which is an accumulation of fluid in the abdomen often caused by high blood pressure in the liver.

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Earlier Trials in Type 2 diabetes — Supportive Evidence for relevance of Lanifibranor in NASH

Prior to our founding, Abbott advanced lanifibranor through completion of Phase IIa clinical trials in which lanifibranor was administered to 56 patients with type 2 diabetes over a period of four weeks. In these trials, it was observed that treatment with lanifibranor was associated with improvements in metabolic biomarkers relevant to NASH, including insulin resistance and dyslipidemia markers, and also exhibited a favorable tolerability profile. While the results of these clinical trials were also supportive of continued clinical development in type 2 diabetes, we determined that the number of drugs available and in development for the treatment of type 2 diabetes, as well as other competitive factors, made it impractical for us to continue Abbott's development of lanifibranor for the treatment of type 2 diabetes.

As shown in the figures below, administration of lanifibranor at all doses tested (400mg, 800mg and 1,400mg) was associated with increased levels of adiponectin, a fat-derived plasma protein with anti-inflammatory functions, increased levels of HDL cholesterol and decreased levels of triglycerides. Moreover, at the 800mg and 1,400mg doses, the changes in all three parameters were statistically significant as compared to the placebo.

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Based on the metabolic properties of lanifibranor observed in these clinical trials and their relevance to metabolic biomarkers associated with NASH, we believe lanifibranor can be relevant in treating patients with NASH. We believe these trials will provide additional supporting clinical data for our discussions with regulatory authorities regarding the potential approval of lanifibranor for the treatment of NASH.

Phase IIb NATIVE Trial

In June 2020, we announced positive topline results from our Phase IIb randomized, double-blind, placebo-controlled NATIVE clinical trial of lanifibranor for the treatment of patients with NASH. The NATIVE trial enrolled 247 patients at more than 70 sites in Europe, the United States, Canada, Australia and Mauritius. We focused on recruiting patients with severe disease: approximately 73% of patients had a NAS score of six or higher, approximately 76% of patients had stage two or three fibrosis, indicating moderate to advanced fibrosis without cirrhosis, and approximately 40% of patients had type 2 diabetes. The goal of the trial was to assess improvement in liver inflammation and ballooning, which are two of the markers of the resolution of NASH. To be considered for inclusion, patients needed a diagnosis of NASH confirmed by liver

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biopsy and a cumulative score of inflammation and ballooning of three or four out of four, indicating the presence of moderate to severe inflammation and ballooning; a steatosis score greater than or equal to one, indicating the presence of moderate to severe steatosis; and a fibrosis score less than four, indicating the absence of cirrhosis. The scoring of each of these parameters was performed in a centralized laboratory following liver biopsy and using the steatosis, activity and fibrosis, or SAF, score, which is a commonly accepted, semi-quantitative evaluation of liver biopsy results.

Patients were randomized in a 1:1:1 ratio to receive either lanifibranor at a dose of 800mg or 1,200mg once daily or placebo for a period of 24 weeks.

The primary endpoint of the trial is a reduction in the combined inflammation and ballooning score of two points compared to baseline, with no worsening of fibrosis, defined as an increase in fibrosis stage. As shown in the figures below, administration of lanifibranor at the 1,200 mg dose was associated with a dose dependent and statistically significant reduction in the number of patients achieving the primary endpoint. This result was observed in both the Intention to Treat, or ITT, population, which consists all patients randomized in the trial, and also the Per Protocol, or PP, population, which consists of all patients with paired biopsies and without deviations impacting the assessment of results.

Lanifibranor and reduction in inflammation and ballooning with no worsening of fibrosis

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Treatment with lanifibranor also met multiple key secondary endpoints of the NATIVE trial, including NASH resolution, improvements in each of the steatosis, inflammation, ballooning and fibrosis scores from baseline as measured using NAS scores and fibrosis stage scoring, improvements in various other fibrosis measures, improvements in several metabolic markers, and safety.

As shown in the figures below, treatment with lanifibranor at both doses was associated with a dose dependent and statistically significant improvement in the percentage of patients achieving a resolution of NASH, defined as a NAS inflammation score equal to zero or one and a NAS ballooning score equal to zero, with no worsening of fibrosis. Similar results were observed among the subset of patients with stage two or three fibrosis, or F2/F3 patients.

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Lanifibranor and resolution of NASH with no worsening of fibrosis

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Lanifibranor and resolution of NASH with no worsening of fibrosis in F2/F3 patients

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As shown in the figure below, administration of lanifibranor at the 1,200 mg dose was also associated with dose dependent and statistically significant improvements in fibrosis, defined as an improvement of one stage or more in fibrosis score, with no worsening of NASH, defined as no increase in NAS inflammation, NAS ballooning or NAS steatosis scores.

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Lanifibranor and improvement in fibrosis with no worsening of NASH

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As shown in the figure below, lanifibranor treatment at both doses was also associated with dose dependent and statistically significant improvements in the percentage of patients achieving resolution of NASH with improvement in fibrosis, defined as an improvement of one stage or more.

Lanifibranor and resolution of NASH with fibrosis improvement

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Lanifibranor treatment at both doses was also associated with statistically significant increases in the percentage of patients with an improvement in NAS steatosis score, including in a pre-specified subset of patients with type 2 diabetes (ITT n= 57; PP n= 52). In the ITT population, this improvement was observed in 65% (p<0.001) of all patients and 69% (p<0.0004) of type 2 diabetes patients treated with lanifibranor at the 1,200 mg dose, as well as in 55% (p<0.001) of all patients and 73% (p<0.0001) of type 2 diabetes patients treated at the 800 mg dose. By comparison, in the placebo group, this improvement was observed in 26% of all patients and 26% of type 2 diabetes patients in the ITT population. In addition, in the PP population, this improvement was observed in 71% (p<0.001) of all patients and 75% (p<0.0031) of type 2 diabetes patients treated with lanifibranor at the 1,200 mg dose, as well as in 67% (p<0.001) of all patients and 81% (p<0.0006) of type 2 diabetes patients treated at the 800 mg dose. By comparison, in the placebo group this improvement was observed in 34% of all patients and 35% of type 2 diabetes patients in the PP population.

In addition to the secondary endpoints related to inflammation, ballooning, steatosis and fibrosis, the NATIVE trial also met key secondary endpoints relating to improvements in metabolic markers relevant to NASH. As shown in the figures below, treatment with lanifibranor at both doses was associated with

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statistically significant decreases in enzymes associated with liver disease, including alanine aminotransferase, or ALT, aspartate transaminase, or AST, and gamma-glutamyl transferase, or GGT. Notably, these improvements were statistically significant beginning at the fourth week of lanifibranor administration.

Lanifibranor and decreases in enzymes related to liver function

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As shown in the figures below, administration of lanifibranor at both doses was also associated with statistically significant changes in certain plasma lipid levels, including an increase in HDL cholesterol levels and a decrease in triglyceride levels. These changes were not accompanied by changes in LDL-cholesterol levels.

Lanifibranor and changes in HDL-cholesterol and triglycerides

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As shown in the figures below, treatment with lanifibranor at both doses was also associated with beneficial changes in markers of glucose metabolism, including decreases in hemoglobin A1c, or HbA1c, which is a marker of blood sugar levels, decreases in fasting glucose, which is a measure of blood sugar levels in the absence of food and drink, and insulin levels.

Lanifibranor and changes in glucose metabolism

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The NATIVE trial also met its safety primary endpoint, with lanifibranor exhibiting a favorable tolerability profile, consistent with the tolerability profile observed in prior clinical trials in NASH and another

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indication. The adverse events, or AEs, reported in the trial were generally mild to moderate in severity. There were three discontinuations due to AEs in each group. The most common AEs in the lanifibranor groups were diarrhea, fatigue, nausea, weight gain, peripheral edema and headaches. The weight gains were a mean 2.4kg increase observed at the 800 mg dose and a mean 2.7 kg increase at the 1,200 mg dose. These weight gains are consistent with known insulin sensitizing pharmacology. A total of 14 patients reported peripheral edema, two in the placebo group, five in the 800 mg dose group and seven in the 1,200 mg dose group. All reports of peripheral edema except one were of mild intensity. There were only two patients with treatment-related peripheral edema in each lanifibranor treatment arm. There was no treatment discontinuation due to edema.

As shown in the chart below, there were 13 serious adverse events, or SAEs, reported in the trial. Three of the SAEs were reported in the placebo arm, three in the 800mg dose group and seven in the 1,200 mg dose group. After excluding biopsy-related SAEs, there were three SAEs in the placebo group, two in the 800 mg dose group and four in the 1,200 mg dose group.


Patients reporting treatment-emergent SAEs N (%)
  Placebo
(N = 81)
  Lanifibranor 800mg
(N = 83)
  Lanifibranor 1200m
(N = 83)

Total

  3 (3.7%)   3 (3.6%)   7 (8.4%)

Treatment-Emergent SAEs linked to biopsy procedure:

           

— Post-procedural haematoma/haemorrhage

    1 (1.2%)   1 (1.2%)

— Post-procedural pain

      1 (1.2%)

— Pneumobilia (post-procedural)

      1 (1.2%)

Other Treatment-Emergent SAEs:

           

— Wrist fracture

  1 (1.2%)    

— Angina unstable

      1 (1.2%)

— Cardiac failure

  1 (1.2%)    

— Gastroenteritis

      1 (1.2%)

— Pyelonephritis

      1 (1.2%)

— Pancreatitis

    1 (1.2%)  

— Undifferentiated connective tissue disease

    1 (1.2%)  

— Urticaria

  1 (1.2%)    

— Foot operation

      1 (1.2%)

In light of the positive results of the NATIVE Phase IIb trial, we plan to advance lanifibranor, alone or together with a collaborator, into pivotal Phase III clinical development end of Phase IIb meetings with the FDA and scientific advice meetings with the EMA, which are expected to take place in the fourth quarter of 2020. We may also pursue development of lanifibranor for the treatment of NASH patients with stage four fibrosis, indicating severe fibrosis with cirrhosis. Further clinical development in the United States will be conducted pursuant to an IND accepted by the FDA in August 2018.

NAFLD in Type 2 Diabetes Patients

In collaboration with Dr. Kenneth Cusi, Chief of the Division of Endocrinology, Diabetes & Metabolism in the Department of Medicine at the University of Florida, Gainesville, we are supporting a Phase II investigator-initiated clinical trial of lanifibranor for the treatment of NAFLD. The trial is expected to enroll 34 NAFLD patients, each of whom has also been diagnosed with type 2 diabetes, who will be treated for a 24-week period with a single daily dose of 800mg of lanifibranor, and ten subjects in a healthy, non-obese control group. The trial was originally expected to enroll 64 NAFLD patients, however, in July 2020, Dr. Cusi informed us that he intends to reduce the anticipated trial enrollment to 34 patients in light of the results of our NATIVE trial. The trial's overall objective is to measure the metabolic effects of lanifibranor and its

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potential efficacy on liver triglycerides in type 2 diabetes patients with NAFLD. The primary endpoint is the change in liver triglycerides as assessed by proton magnetic resonance spectroscopy. Secondary endpoints include changes in liver fibrosis, evidence of metabolic improvements in insulin resistance, de novo lipogenesis, free fatty acids and lipids, as well as safety. The trial is being conducted pursuant to an IND accepted by the FDA in May 2018. Results from this trial are currently expected in 2021, however, due to the COVID-19 pandemic, the recruitment and screening of new patients has been suspended at the University of Florida, where trial is being conducted, and therefore results could be delayed. We believe this trial will provide additional supporting clinical data for our discussions with regulatory authorities regarding the potential approval of lanifibranor for the treatment of NASH.

The PanNASH Initiative

We believe that NASH is currently poorly understood and underdiagnosed. As we advance lanifibranor toward pivotal development, we are endeavoring to increase awareness and disseminate knowledge related to NASH among the scientific and clinical community, patients and other key stakeholders within the healthcare system. To this end, we have founded and sponsored the development of the PanNASH Initiative. The PanNASH Initiative is a working group consisting of a committee of international independent experts that aims to increase the visibility and contribute to a better understanding of NASH, including improving diagnosis and establishing best practices for the treatment of the disease. The committee includes European and American medical experts in areas related to NASH, such as hepatology, diabetes and cardiology, along with scientific experts focused on promoting a better understanding of the pathophysiological mechanisms involved in NASH. The PanNASH Initiative intends to develop and disseminate new findings about NASH through publications, conferences and training sessions. It focuses on risk factors for the development of the disease, the identification of patients at risk, clinical markers and associated health risks, as well as the development of new treatments. Specifically, the PanNASH Initiative is working to increase knowledge of the underlying pathological mechanisms of NASH ranging from metabolic disorders to fibrosis, with a focus on the modulating role in the disease played by PPARs.

Odiparcil for the Treatment of MPS

We are developing odiparcil for the treatment of several subtypes of MPS, a group of rare, progressive genetic disorders that manifest early in life. Odiparcil is designed to act on the underlying cause of the symptoms of MPS, which is the accumulation of GAGs in the lysosomes of cells. GAGs are important for the modulation of cell-to-cell signaling and the maintenance of tissue structure and function. Lysosomes are enclosed sacs of enzymes that break down large molecules, including GAGs, so that they can be passed to other parts of the cell or excreted. Due to genetic mutations, lysosomes in patients with MPS contain deficient versions of the enzymes necessary to break down GAGs. As a result, GAGs accumulate within the lysosomes, causing them to swell and interfere with the ordinary functioning of cells, leading to the symptoms associated with MPS. MPS is categorized by subtypes, depending on the enzyme that is deficient and the corresponding GAGs that accumulate. By modifying how GAGs are synthesized, odiparcil facilitates the production of soluble GAGs that can be excreted in the urine, rather than accumulating in cells. Specifically, odiparcil acts on chondroitin sulfate, or CS, and dermatan sulfate, or DS, either or both of which accumulate in patients with MPS I, II, IVa, VI and VII. Prior to our founding, Abbott, in collaboration with GlaxoSmithKline, investigated odiparcil for the treatment of thrombosis because odiparcil's mechanism of action, which involves the synthesis of soluble GAGs, is also believed to have an anti-thrombotic effect. After acquiring odiparcil from Abbott, we determined that the mechanism of action of odiparcil is also relevant for the treatment of patients with certain subtypes of MPS, and we decided to develop odiparcil for this indication.

Disease Overview and Opportunity

There are four types of GAGs that accumulate in MPS patients, which are DS and CS, as well as heparan sulfate, or HS, and keratan sulfate, or KS. The manifestations of the disease depend on the type of GAGs that accumulate, with MPS being categorized into numerous subtypes, depending on the lysosomal enzyme that is deficient. Because odiparcil acts on CS and DS, we believe odiparcil's mechanism of action could be

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effective in patients with MPS I, II, IVa, VI and VII, which, as shown in the figure below, are the MPS subtypes in which one or both of CS and DS accumulate.

The following table summarizes the various MPS subtypes:


Type   Name   Deficient lysosomal enzyme   Incidence   Key disease features   DS   CS   HS   KS
MPS I-H   Hurler syndrome   Alpha-L-iduronidase   1/100,000   Corneal clouding, skeletal abnormalities, organ enlargement, heart and lung disease, mental retardation, hearing loss, death in childhood   ü       ü    
MPS I-S   Scheie syndrome   Alpha-L-iduronidase   1/100,000   Corneal clouding, stiff joints, heart disease   ü            
MPS I-H/S   Hurler-Scheie syndrome   Alpha-L-iduronidase   1/100,000   Intermediate between MPS I-H and MPS I-S   ü       ü    
MPS II (Types A & B)   Hunter syndrome   Iduronate sulphatase   1/100,000   Corneal clouding, hearing loss, skeletal abnormalities, stiff joints, organ enlargement, heart disease, mental retardation (type B), death in childhood (type B)   ü       ü    
MPS III   Sanfilippo syndrome   Heparan N-sulphatase;

alpha-N-aceytylglucosaminidase;

Acetyl-CoA and alpha-
glucosaminide acyltransferase;

N-acetylglucosamine -6-sulphatase
  1/25,000 to 75,000   Profound mental deterioration, hyperactivity and mild somatic manifestations           ü    
MPS IV Type A   Morquio syndrome   Galactose 6-sulphatase   1/40,000 to 200,000   Skeletal abnormalities, loose ligaments, degenerative joint disease, corneal clouding, heart disease, death in childhood or young adulthood       ü       ü
MPS IV Type B   Morquio syndrome   Beta-galactosidase   1/40,000 to 200,000   Similar to MPS IV Type A               ü
MPS VI   Maroteaux-Lamy syndrome   Arylsulphatase B   1/240,000 to 400,000   Similar to MPS I (excluding mental retardation), death in childhood or young adulthood   ü   ü        
MPS VII   Sly syndrome   Beta-glucuronidase   Very rare   Similar to MPS I   ü   ü   ü    

We have focused our pre-clinical and clinical development to date on the treatment of MPS VI, primarily because both DS and CS, and no other types of GAGs, accumulate in this subtype. Patients with MPS VI, also known as Maroteaux-Lamy syndrome, have rounded and thickened facial features, corneal clouding, hearing loss, dwarfism with deformity of the limbs, enlargement of the liver and spleen, cardiac valve disease and reduced pulmonary function, with no mental retardation. As with other MPS subtypes, the time of onset, rate of progression and extent of the disease may vary between the affected individuals. The life expectancy of MPS VI patients, if untreated, is approximately 20 years for patients with the severe forms of the disease. Common causes of death for MPS VI patients are heart disease and airway obstruction. The incidence of MPS VI is estimated to be approximately 1 in 240,000 to 400,000 live births, with variations between countries on account of consanguinity.

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Existing therapeutic options for MPS patients aim to improve quality of life, slow disease progression or minimize irreversible damage to tissues and organs. The current standard of care for the treatment of patients with MPS is ERT, which requires weekly infusions and is generally administered in an outpatient hospital setting. While ERT has been shown to be effective in reducing GAG accumulation in certain tissue types, it has shown limited efficacy in reducing GAG accumulation in poorly vascularized tissues and organs, such as cartilage, or in tissues that are protected by a barrier, such as the eye. The manifestations of MPS associated with GAG accumulation in these tissues and organs include hearing loss, corneal clouding, joint stiffness, spinal cord compression and heart and lung diseases. ERT has increased the lifespan of many MPS patients, but these increases are accompanied by unmet medical needs in the tissues in which ERT shows limited efficacy. Hematopoietic stem cell transplantation, or HSCT is also used in rare cases for patients with severe symptoms. HSCT resolves additional symptoms not addressed by ERT, but compatible donors are difficult to find. The procedure is also associated with high rates of morbidity and mortality, and efficacy has been reported to be limited to certain patients and certain MPS subtypes. For MPS patients in which prominent musculoskeletal involvement is seen, frequent orthopedic surgeries may also be required to correct the deformities and increase the quality of life of patients.

Our Solution

Odiparcil, an orally-available small molecule, acts to decrease the lysosomal accumulation of CS and DS in patients with certain MPS subtypes. In normal GAG synthesis, galactosyl transferase 1, or GT1, an enzyme, catalyzes the attachment of protein bound D-xylose to a sugar chain to form an insoluble proteoglycan. These insoluble GAGs have a variety of functions in normal physiology, including modulation of cell-to-cell signaling and maintenance of tissue structure and function. As shown in the graphic below, in healthy cells, GAGs are processed by the lysosomes, broken down into small parts, and then excreted in the urine, in a process that maintains balance between incoming and outgoing molecules. Because lysosomes in patients with MPS contain deficient versions of the enzymes necessary to break down GAGs, these molecules accumulate within the lysosomes, leading to the symptoms associated with MPS.

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Odiparcil acts to modify how DS and CS are synthesized, thereby facilitating the production of soluble DS and CS GAGs, which can be excreted in the urine, rather than accumulating in cells. Odiparcil acts to circumvent the normal process of GAG synthesis by introducing a higher affinity, non-protein bound substrate for GT1 to react with. As shown in the figure below, we have observed in pre-clinical studies that in the presence of both odiparcil and D-xylose, the ratio at which GT1 reacts with odiparcil in comparison to D-xylose is approximately 2000 to 1. When GT1 reacts with odiparcil, chains of DS and CS are built on odiparcil, rather than on protein-bound D-xylose.

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These odiparcil-based chains are soluble, which means they can be directly excreted by the body and bypass the lysosomal degradation pathway. With fewer proteoglycans entering the lysosomes, GAG accumulation is decreased, restoring the balance of the synthesis and degradation of GAGs.

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We believe odiparcil's mechanism of action is relevant to a number of tissues in which GAGs accumulate that are addressed with limited efficacy by the current standard of care, which is ERT. Unlike ERT, odiparcil is a small molecule that we have observed to be well distributed in the body, even in certain tissues that are poorly vascularized or protected by a barrier. As shown in the figure below, pre-clinical studies conducted by others using cat models have measured the presence of rhASB, which is the enzyme used in ERT for patients with MPS VI, in certain tissues and organs. While these studies observed the presence of rhASB in well-vascularized tissue, such as the heart muscle, they did not observe the presence of rhASB in the cornea or cartilage. By contrast, in pre-clinical studies in rodent models, we observed meaningful concentrations of odiparcil in not only heart muscle tissue, but also bone, corneal tissue and cartilage.

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The following table summarizes the observed distribution of odiparcil and rhASB in certain tissues and organs:


 
  Heart   Bone   Cornea   Cartilage
    GRAPHIC   GRAPHIC   GRAPHIC   GRAPHIC

Odiparcil (rodent model)

  X   X   X   X

rhASB (cat model)

  X   Not tested   Not detected   Not detected

Because odiparcil has a different mechanism of action than ERT and reaches tissues that are poorly penetrated by ERT, we believe odiparcil could be used as a combination therapy with ERT. Based on our pre-clinical data, we also believe odiparcil has potential as a stand-alone therapy.

In December 2019, we announced positive results from a Phase IIa clinical trial of odiparcil for the treatment of adult patients with the MPS VI subtype. Because MPS is a progressive disease, we believe there is benefit in treating pediatric patients with MPS, and we plan to commence a Phase Ib/II clinical trial of odiparcil in a pediatric population with MPS VI in the first half of 2021. If the results of this pediatric trial are favorable, we plan to initiate Phase III clinical development of odiparcil as a monotherapy and in combination with ERT for the treatment of adult and pediatric patients with MPS VI. In addition, we plan to initiate an open label Phase IIa extension study in the first half of 2021 to investigate the long-term safety and efficacy of odiparcil in patients 16 years and above with MPS VI who completed the prior Phase IIa trial. We believe odiparcil's mechanism of action is relevant to a number of MPS subtypes, and we also plan to initiate pivotal trials for the treatment of one or more of MPS subtypes I, II, IVa and VII. Odiparcil has received orphan drug designation from the FDA and EMA and rare pediatric disease designation from the FDA for the treatment of MPS VI. We hold unencumbered rights to odiparcil's development and commercialization.

Pre-Clinical Development

In pre-clinical studies of fibroblasts from healthy donors and MPS VI patients, we observed that administration of odiparcil was associated with a decrease in CS intracellular content, while increasing the extra-cellular level of GAGs, as shown in the figure below. At 10µM concentration, odiparcil was associated with a decrease in intracellular CS content below the basal level observed in control fibroblasts from a healthy donor.

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We also observed in vivo evidence of reduced GAG accumulation following administration of odiparcil in a drug-induced model of MPS. As shown in the first figure below, in an MPS VI model using mice that were fed a standard diet and were genetically modified to reflect human MPS pathology, or MPS VI mice, we observed that the concentration of GAGs in the liver was elevated in comparison to wild-type, or WT, mice. However, in MPS VI mice that were also administered odiparcil at a dose of 4.5g/kg, referred to as MPS VI + odiparcil mice, the concentration of GAGs in the liver was reduced (p<0.001). As shown in the second figure below, we also tested the intra-cellular accumulation of GAG granules among the WT mice, MPS VI mice and MPS VI + odiparcil mice. We observed that, while the rate of GAG granule accumulation was substantially greater in the MPS VI mice than in the WT mice, treating MPS VI mice with odiparcil was associated with a decrease in the accumulation of large numbers of GAG granules.

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In this same MPS VI mouse model, we also observed that odiparcil was active in tissues of the eyes, which is an area in which ERT has been observed to have limited efficacy. As shown in Figures A and B below, we observed that corneal thickness and the number of cell layers in the corneal epithelium were decreased in MPS VI mice in comparison to WT mice. However, we also observed that administration of odiparcil had a statistically significant effect (p<0.0001) on the recovery of thickness in the corneal epithelium and in the layer of epithelial cells. As shown in Figure C below, we also tested the accumulation of GAGs in the corneal stroma, which is a layer of the cornea in which GAGs are known to accumulate in MPS patients. We scored the accumulation of the GAGs using a vacuolation scoring system, which is a semi-quantitative score applied to histological observations, with scores of 0, 1, 2 and 3 representing no, mild, moderate or severe accumulations of GAGs, respectively. The mean score applied to the observations of GAG accumulation in WT mice was zero, representing no GAG accumulation. In MPS VI mice, the mean score applied to the observations was 2.9, representing severe GAG accumulation. By contrast, in MPS VI + odiparcil mice, the mean score applied to the observations was 0.5, representing a mild GAG accumulation and a decrease from the score in untreated MPS VI mice.

A. Odiparcil effect on corneal epithelium thickness   B. Odiparcil effect on number of corneal epithelium cell layers   C. Odiparcil effect on GAG storage in corneal stroma

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In this same MPS VI mouse model, we also observed that odiparcil was active in cartilage tissues, which is another area in which ERT has been observed to have limited efficacy. As shown in Figures A and B below, we observed that trachea and knee cartilage thickness were increased in MPS VI mice in comparison to WT mice. However, we also observed that treatment of MPS VI mice with odiparcil was associated with a decrease in thickness in these tissues. In addition, as shown in Figure C below, we observed statistically significant improvements in mobility, characterized by the amount of time required to descend a vertical pole, in the MPS VI + odiparcil mice in comparison to MPS VI mice.

A. Odiparcil effect on trachea cartilage thickness   B. Odiparcil effect on knee cartilage thickness   C. Odiparcil effect on animal mobility

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Earlier Clinical Development in Thrombosis — Supportive Evidence of Safety and Tolerability of Odiparcil

During their development of odiparcil as an anti-thrombotic therapy, Abbott and GlaxoSmithKline, advanced odiparcil through the completion of 29 Phase I and Phase II clinical trials, in which odiparcil was administered to over 1,800 subjects. In these trials, odiparcil displayed a favorable tolerability profile at daily doses in excess of the therapeutic range. Low toxicity was also observed in in vivo toxicology studies of up to 36 weeks. We believe these trials will provide additional supporting clinical data for our discussions with regulatory authorities regarding the potential approval of odiparcil for the treatment of MPS.

Clinical Results and Planned Clinical Development

In December 2019, we announced positive results from the iMProveS Phase IIa clinical trial of odiparcil, which enrolled twenty patients, aged 16 years or older, with advanced MPS VI subtype disease. Fifteen patients were randomized to receive baseline ERT in combination with one of two doses of odiparcil, 250 mg or 500 mg administered twice daily, or placebo. Five patients who were not receiving ERT received 500 mg of odiparcil administered twice daily in an open label cohort. Thirteen patients completed the trial: four patients who received placebo in addition to ERT and nine patients equally distributed in each of the three odiparcil groups. The trial was conducted at four sites in Europe. The primary endpoint of the trial was safety, as assessed by clinical and biological standard tests. Secondary endpoints included changes from baseline in leukocyte, skin and urinary GAG content, improvements of activity and mobility, evaluation of cardiovascular, lung and respiratory function and vision and hearing impairments.

After 26 weeks of treatment, we observed that odiparcil in combination with ERT was associated with improvements in corneal clouding and cardiac and respiratory function and exhibited a favorable tolerability profile. Signals of clinical activity were also detected in patients treated only with odiparcil. We observed improved mobility as assessed using the 6MWT in patients treated with ERT and the 250mg twice daily dose of odiparcil, as well as in patients in the open label cohort. We did not observe improved mobility using the 6MWT in patients treated with ERT and the 500mg twice daily dose of odiparcil. Dose-dependent urinary GAGs clearance, used as an activity biomarker, was observed in the entire odiparcil-treated patient population. A reduction in leukocyte GAGs was not observed and therefore was not confirmed as a biomarker for the decrease of GAG accumulation. The trial also met its safety primary endpoint with odiparcil exhibiting a favorable tolerability profile, consistent with the tolerability profile observed with odiparcil as a monotherapy in prior clinical trials. The majority of the adverse events reported were mild or

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moderate in severity. The most common adverse reactions in odiparcil groups were a laboratory interference false positive and skin reactions, among which three were reported as serious adverse events, or SAEs, that were determined by the investigator to be associated with the treatment occurred in patients treated with odiparcil. Two of these SAEs were abnormal laboratory results that were subsequently deemed to be false positives. The third SAE was exanthema, a skin reaction consistent with the types of reaction frequently observed in patients with MPS VI treated with ERT. One death occurred in the placebo group. We observed that the pharmacokinetic profile of odiparcil in this patient cohort was consistent with that observed in previous trials of odiparcil, suggesting that the introduction of ERT did not alter odiparcil's pharmacokinetics.

Because MPS is a progressive disease, we believe there is benefit in treating pediatric patients with MPS, and we plan to commence the SAFEty, pharmacoKInetics and pharmacoDynamics, Dose escalating Study, or SAFE-KIDDS trial, which is a three-part Phase Ib/II clinical trial of odiparcil in a pediatric population with MPS VI, in the first half of 2021. We plan to sequentially enroll twenty four children with MPS VI treated with ERT. The first phase of the trial will be a pharmacokinetics and pharmacodynamics assessment of three doses of odiparcil tested each for one week. The second phase will be a double-blind, placebo controlled study with patients randomized to receive one of two doses of odiparcil or placebo for six months in order to assess safety and efficacy. Patients will be randomized according to age. The third phase will be an open label extension study open to all patients who complete the second phase of the trial. Patients participating in the open label extension study who received odiparcil in the second phase of the trial will continue to receive the same dose of odiparcil administered in the second phase of the trial, while patients who received placebo in the second phase of the trial will be randomized to receive one of two doses of odiparcil. We expect to continue the third phase of the trial until such time as odiparcil is approved or its development is discontinued.

If the results of the SAFE-KIDDS trial are favorable, we plan to initiate Phase III clinical development of odiparcil as a monotherapy and in combination with ERT for the treatment of adult and pediatric patients with MPS VI. In addition, we plan to initiate an open label Phase IIa extension study in the first half of 2021 to investigate the long-term safety and efficacy of odiparcil in patients 16 years and above with MPS VI who completed the iMProveS trial. This study will be designed to last two years, with a possibility of extension, and the 13 patients who completed the 26 week iMProveS trial will be invited to participate. The primary endpoint of this extension study would be safety and secondary endpoints will include assessments of mobility, respiratory function, cardiology, vision, audiology, pain and quality of life.

Because odiparcil targets GAGs that are also present in other MPS subtypes, we believe that the data generated in the iMProveS and SAFE-KIDDS trials may also support moving directly to Phase III pivotal trials in one or more of MPS subtypes I, II, IVa and VII if warranted by the results of our Phase IIa clinical trial and other pre-clinical studies we are conducting.

Hippo Signaling Pathway Program in Oncology and Fibrosis

Leveraging our assets and expertise, we have investigated the Hippo signaling pathway, which is implicated in the processes of cell differentiation and proliferation, tissue growth and organ size. Dysregulation along the Hippo signaling pathway has been implicated in a variety of different types of cancer, particularly malignant mesothelioma, as well as lung cancer, triple negative breast cancer, hepatocellular carcinoma and hepatoblastoma, as well as fibrotic disease.

Our primary oncology program aims to disrupt the interaction between YAP and TEAD, which is an interaction that occurs along the Hippo signaling pathway and plays a key role in the oncogenic process. In pre-clinical studies, we observed that our compounds prevented the formation of the YAP-TEAD transcriptional complex, reduced the expression of YAP-TEAD target genes and displayed anti-proliferative effects in cancer cell lines controlled by the Hippo signaling pathway. Further, in xenograft models, we observed that our compounds inhibited gene expression and cell proliferation in cell lines sensitive to YAP,

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and were associated with tumor regression, both as a monotherapy and in combination with approved cancer therapies. In addition, in xenograft and orthotopic models of malignant pleural mesothelioma, or MPM, we observed that YAP-TEAD inhibition was associated with reduced tumor growth. Based on these findings, we plan to expand our YAP-TEAD program to other cancer indications and explore the potential of our YAP-TEAD inhibitor as a monotherapy and in combination with other approve anti-cancer agents. We are in the process of selecting development candidate for our Hippo program, which we anticipate entering pre-clinical development in 2021 for the treatment of non-small cell lung cancer and mesothelioma.

The Hippo signaling pathway has also been implicated in the fibrotic process, particularly stiffness-induced fibrosis, which plays a key role in a number of diseases, including NASH and IPF. In in vitro studies, we have observed that our Hippo compounds exhibit anti-fibrotic properties, and we therefore may consider expanding our Hippo program to fibrotic disease. We also plan to explore additional targets along the Hippo signaling pathway that are implicated in either fibrosis or oncology.

RORg Program with AbbVie

We worked with AbbVie to identify orally-available inverse agonists of the nuclear receptor RORg for the treatment of moderate to severe psoriasis, a common skin condition that affects two to four percent of the population in western countries.

T-lymphocytes producing IL-17, known as Th17 cells, have been shown to play a key role in autoimmunity. The development and maintenance of Th17 cells is dependent on IL-23. Elevated levels of IL-23 and Th17-related cytokines have been observed in cutaneous lesions and in the serum of psoriatic patients, which supports the targeting of Th17 for the treatment of patients with psoriasis. RORg is believed to be the master regulator of Th17 as it controls differentiation of naïve T-cells into Th17 cells, the regulation of the IL-23 receptor and the production of Th17 pro-inflammatory cytokines. Pharmacological inhibition of RORg by small molecules has been observed to suppress Th17 cell differentiation as well as IL-17 production, block cutaneous inflammation in animal models of psoriasis and inhibit Th17 signature gene expression by cells isolated from psoriatic patient samples. RORg is therefore a validated drug target for the treatment of psoriasis, and potentially other cutaneous inflammatory disorders.

Together with AbbVie, we have discovered new, potent, selective and orally-available RORg inverse agonists. We believe that these compounds may suppress a larger set of inflammatory cytokines than the currently available biologics for the treatment of psoriasis, thereby resulting in meaningful clinical activity. AbbVie is currently investigating a candidate developed through our collaboration, ABBV-157, in a Phase I clinical trial. This trial is comprised of two substudies evaluating a total of 60 healthy volunteers and patients with moderate to severe psoriasis. AbbVie first evaluated ABBV-157 healthy volunteers and thereafter in a double-blind, randomized, placebo-controlled substudy in patients with moderate or severe chronic plaque psoriasis. The primary completion date of the trial is expected in September 2020. In December 2019, we received a €3.5 million payment from AbbVie as a result of the enrollment of the first patient with psoriasis in the trial. AbbVie is solely responsible for clinical development of product candidates developed through the collaboration and is the owner of all intellectual property rights resulting from the collaboration. See " — Research and development agreement with AbbVie" below.

TGF-b Program

We are advancing a pre-clinical program for the treatment of IPF, and have validated a new target within the TGF-b, signaling pathway. TGF-b is a cytokine that is a key driver of fibrosis and acts by activating fibroblasts into myofibroblasts, which in turn drives the production of fibrotic tissues. This new target has been validated and we are generating leads for a development candidate.

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Sales and Marketing

We currently have worldwide development and commercialization rights with respect to lanifibranor and odiparcil.

We have not yet established a sales, marketing or product distribution infrastructure but plan to independently develop and commercialize those product candidates in those indications where we can do so in a capital efficient manner, with a focus on retaining rights to orphan indications in jurisdictions with a significant market opportunity.

Research and Development Agreement with AbbVie

In August 2012, we entered into a research services agreement with AbbVie, which we refer to as the AbbVie Agreement, which included a collaboration to identify orally-available inverse agonists of the nuclear receptor RORg for the treatment of moderate to severe psoriasis and other auto-immune diseases. AbbVie is currently investigating ABBV-157, a clinical candidate developed through our collaboration, in a Phase I clinical trial. AbbVie is responsible, at its sole cost and discretion, for all further development and commercialization activities related to the RORg program.

Under the AbbVie Agreement, we received research funding, and we are eligible to receive development, regulatory and commercial milestone payments as well as royalty payments. As of March 31, 2020, we have received an aggregate of €16.3 million in research funding and €9 million in milestone payments. We may receive up to an aggregate of €35.0 million in future milestone payments related to the psoriasis program, €2.0 million in milestone payments for each subsequent drug approval application or extension in a new indication, and tiered royalties from the mid-single to low-double (below teens) digits. Royalties are subject to specified reductions in the event AbbVie is required to obtain licenses to avoid infringing a third party's intellectual property, a generic competitor to the product is introduced, or the product is exploited in a country without certain intellectual property coverage. Royalties are payable, on a product-by-product and country-by-country basis, until the occurrence of certain specified patent expirations or loss of exclusivity. A separate, additional low-single digit royalty is payable after the expiration of the initial royalty term until other specified patent expirations occur.

We are restricted from researching, developing, or commercializing any product directed to any target on which we collaborated with AbbVie for a certain period after the expiration of that collaboration or occurrence of certain events in related patent prosecution. We are also subject to exclusivity obligations, which vary depending on the stage of development, with respect to research, development or commercialization of small molecule RORg inverse agonists. Under certain circumstances, we will have relief from our exclusivity obligations and will be provided with access to all pre-clinical data related to the RORg program, as well as a royalty free license to any assays or models developed by the parties under the RORg program.

AbbVie is the exclusive owner of all intellectual property rights resulting from the collaboration. We grant AbbVie a perpetual non-exclusive license to use our relevant intellectual property solely as necessary to exploit such products derived from the collaboration. We are obliged to assist AbbVie in the preparation, filing, or prosecution of patents covering the intellectual property developed from the agreement.

The research term of the AbbVie Agreement with respect to the RORg program was initially five years, and was extended in August 2017. We are no longer providing research services under the AbbVie Agreement with respect to the RORg program. AbbVie may terminate the agreement for uncured material breach, and it may terminate any element of the collaboration without cause upon 30 days' prior written notice to us.

Competition

The commercialization of new drugs is competitive, and we may face worldwide competition from major pharmaceutical companies, specialty pharmaceutical companies, biotechnology companies and ultimately

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generic companies. Our competitors may develop or market therapies that are more effective, safer or less costly than any that we are commercializing, or may obtain regulatory or reimbursement approval for their therapies more rapidly than we may obtain approval for ours.

Though there are no currently approved therapies for the treatment of NASH and we believe that lanifibranor is the only pan-PPAR agonist in clinical development for this indication, we cannot assure you that any of our products that we successfully develop will be clinically superior or scientifically preferable to products developed or introduced by our competitors. Allergan plc, Galmed Pharmaceuticals Ltd. and Madrigal Pharmaceuticals, Inc. each are investigating product candidates with different mechanisms of action in Phase III clinical trials for the treatment of NASH. Intercept Pharmaceuticals, Inc. has filed for regulatory approval with the FDA and EMA and received a Complete Response Letter from the FDA in June 2020. Other companies, including Gilead Sciences, Inc., NGM Biophamaceuticals, Inc. and Akero Therapeutics, Inc., have product candidates for the treatment of NASH that are in earlier stages of pre-clinical or clinical development.

ERT is the standard of care for the treatment of MPS with current therapies being marketed by BioMarin Pharmaceuticals, Inc., Sanofi Genzyme, Shire Plc and Ultragenyx Pharmaceuticals, Inc. Additional ERTs, as well as gene therapy approaches to treating MPS, are in various stages of pre-clinical and clinical development conducted by different companies, including Abeona Therapeutics Inc., ArmaGen, Inc., Eloxx Pharmaceuticals, Inc., Sanofi Genzyme, Esteve Pharmaceuticals, S.A., Lysogene S.A., Orchard Therapeutics plc, REGENXBIO Inc., Sangamo Therapeutics, Inc. and Takeda Pharmaceutical Company Limited. In the MPS VI subtype, the MeuSix consortium is developing a gene therapy approach and is conducting a multicenter Phase I/II clinical trial to investigate the safety and efficacy of its adeno-associated virus, or AAV-mediated gene therapy.

Although we believe our product candidates possess attractive attributes, we cannot ensure that our product candidates will achieve regulatory or market acceptance. If our product candidates fail to gain regulatory approvals and acceptance in their intended markets, we may not generate meaningful revenues or achieve profitability.

Intellectual Property

Our success will significantly depend upon our ability to obtain and maintain patent and other intellectual property and proprietary protection for our drug candidates in the United States and internationally, including composition-of-matter, dosage and formulation patents, as well as patent and other intellectual property and proprietary protection for our novel biological discoveries and other important technology inventions and know-how. In addition to patents, we rely upon unpatented trade secrets, know-how, and continuing technological innovation to develop and maintain our competitive position. We protect our proprietary information, in part, using confidentiality agreements with our commercial partners, collaborators, employees and consultants and invention assignment agreements with our employees. We also have confidentiality agreements or invention assignment agreements with our commercial partners and selected consultants. Despite these measures, any of our intellectual property and proprietary rights could be challenged, invalidated, circumvented, infringed or misappropriated, or such intellectual property and proprietary rights may not be sufficient to permit us to take advantage of current market trends or otherwise to provide competitive advantages. In addition, such confidentiality agreements and invention assignment agreements can be breached and we may not have adequate remedies for any such breach. For more information, please see "Risk factors — Risks Relating to Intellectual Property."

As of June 10, 2020, with respect to lanifibranor, we own four issued United States patents, and approximately 102 patents and patent applications in other jurisdictions. As of June 10, 2020, with respect to odiparcil, we own two issued United States patents, and approximately 85 patent and patent applications in other jurisdictions. We cannot predict whether the patent applications we pursue will issue as patents in any particular jurisdiction or whether the claims of any issued patents will provide any proprietary protection

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from competitors. The patent portfolios for our lead product candidates as of June 10, 2020 are summarized below.

The term of individual patents depends upon the legal term of the patents in the countries in which they are obtained. In most countries in which we are seeking patent protection for our product candidates, the patent term is 20 years from the earliest date if filing a non-provisional patent application. In the United States, the term of a patent may be lengthened by a patent term adjustment, which provides for term extension in the case of administrative delays at the United States Patent and Trademark Office in granting a patent, or may be shortened if a patent is terminally disclaimed over another patent with an earlier expiration date. Furthermore, in the United States, the term of a patent covering an FDA approved drug may be eligible for a patent term extension under the Hatch-Waxman Amendments as compensation for the loss of patent term during the FDA regulatory review process. The period of extension may be up to five years beyond the 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 the future, if any of our product candidates receives FDA approval, we expect to apply for a patent term extension, if available, to extend the term of the patent covering such approved product candidate. We also expect to seek patent term extensions in any jurisdictions where they are available, however, there is no guarantee that the applicable authorities, including the FDA, will agree with our assessment of whether such an extension should be granted, and even if granted, the length of such an extension.

Lanifibranor

With respect to lanifibranor patent rights, as of June 10, 2020, we own four United States patents, which are due to expire between December 2026 and June 2035 excluding any additional term for patent term extension. Outside the United States, we own approximately 87 patents issued in approximately 55 jurisdictions, including Australia, Canada, China, a number of European countries, Japan, Korea, Israel and Russia; and approximately 15 patent applications pending in approximately 10 jurisdictions including Brazil, Canada, India, Korea, Israel, Mexico and Tunisia. The foregoing patents and patent applications cover a form of and methods of making and using lanifibranor or its analogs.

Odiparcil

With respect to odiparcil, as of June 10, 2020, we own two issued United States patents, which are due to expire in October 2034, excluding any additional term for patent term extension. Outside the United States, we own approximately 76 patents issued in approximately 43 jurisdictions, including a number of European countries; and approximately 9 patent applications pending in approximately 10 jurisdictions, including Brazil, Canada, China, and Korea. The foregoing patents and patent applications cover methods of using odiparcil.

Manufacturing

We rely on contract manufacturing organizations, or CMOs, to produce our drug candidates in accordance with the FDA's current Good Manufacturing Practices, or cGMP, regulations for use in our clinical trials. The manufacture of pharmaceuticals is subject to extensive cGMP regulations, which impose various procedural and documentation requirements and govern all areas of record keeping, production processes and controls, personnel and quality control. Our small molecule drug candidates, lanifibranor and odiparcil, are manufactured using common chemical engineering and synthetic processes from commercially available raw materials.

To meet our projected needs for clinical supplies to support our activities through regulatory approval and commercial manufacturing, the CMOs with whom we currently work will need to increase the scale of production or we will need to secure alternate suppliers.

If we are unable to obtain sufficient quantities of drug candidates or receive raw materials in a timely manner, we could be required to delay our ongoing clinical trials and seek alternative manufacturers, which would be costly and time-consuming.

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Government Regulation and Approval

United States — FDA Process

In the United States, the FDA regulates drugs. The Federal Food, Drug, and Cosmetic Act, or FDCA, and other federal and state statutes and regulations, govern, among other things, the research, development, testing, manufacture, storage, recordkeeping, approval, labeling, promotion and marketing, distribution, post-approval monitoring and reporting, sampling, and import and export of drugs. To obtain regulatory approvals in the United States and in foreign countries, and subsequently comply with applicable statutes and regulations, we will need to spend substantial time and financial resources.

Approval Process

The FDA must approve any new drug or a drug with certain changes to a previously approved drug before a manufacturer can market it in the United States. If a company does not comply with applicable United States requirements it may be subject to a variety of administrative or judicial sanctions, such as FDA refusal to approve pending applications, warning or untitled letters, clinical holds, drug recalls, drug seizures, total or partial suspension of production or distribution, injunctions, fines, civil penalties, and criminal prosecution. The steps we must complete before we can market a drug include:

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    completion of pre-clinical laboratory tests, animal studies, and formulation studies, all performed in accordance with the FDA's good laboratory practice, or GLP, regulations;

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    submission to the FDA of an IND application for human clinical testing, which must become effective before human clinical studies start. The sponsor must update the IND annually;

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    approval of the study by an independent institutional review board, or IRB, or ethics committee representing each clinical site before each clinical study begins;

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    performance of adequate and well-controlled human clinical studies to establish the safety and efficacy of the drug for each indication to the FDA's satisfaction;

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    submission to the FDA of an NDA;

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    potential review of the drug application by an FDA advisory committee, where appropriate and if applicable;

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    satisfactory completion of an FDA inspection of the manufacturing facility or facilities to assess compliance with current good manufacturing practices, cGMP, or regulations; and

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    FDA review and approval of the NDA.

It generally takes companies many years to satisfy the FDA approval requirements, but this varies substantially based upon the type, complexity, and novelty of the drug or disease. Pre-clinical tests include laboratory evaluation of a drug's chemistry, formulation, and toxicity, as well as animal trials to assess the characteristics and potential safety and efficacy of the drug. The conduct of the pre-clinical tests must comply with federal regulations and requirements, including GLP. The company submits the results of the pre-clinical testing to the FDA as part of an IND along with other information, including information about the product drug's chemistry, manufacturing and controls, and a proposed clinical study protocol. Long term pre-clinical tests, such as animal tests of reproductive toxicity and carcinogenicity, may continue after submitting the initial IND.

The FDA requires a 30-day waiting period after the submission of each IND before the company can begin clinical testing in humans. The FDA may, within the 30-day time period, raise concerns or questions relating to one or more proposed clinical studies and place the study on a clinical hold. In such a case, the company and the FDA must resolve any outstanding concerns before the company begins the clinical study. Accordingly, the submission of an IND may or may not be sufficient for the FDA to permit the sponsor to start a clinical study. The company must also make a separate submission to an existing IND for each successive clinical study conducted during drug development.

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Clinical Studies

Clinical studies involve administering the investigational new drug to healthy volunteers or patients under the supervision of a qualified investigator. The company must conduct clinical studies:

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    in compliance with federal regulations;

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    in compliance with good clinical practice, or GCP, an international standard meant to protect the rights and health of patients and to define the roles of clinical study sponsors, administrators, and monitors; as well as

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    under protocols detailing the objectives of the trial, the safety monitoring parameters, and the effectiveness criteria.

The company must submit each protocol involving testing on United States patients and subsequent protocol amendments to the FDA as part of the IND. The FDA may order the temporary, or permanent, discontinuation of a clinical study at any time, or impose other sanctions, if it believes that the sponsor is not conducting the clinical study in accordance with FDA requirements or presents an unacceptable risk to the clinical study patients. The sponsor must also submit the study protocol and informed consent information for patients in clinical studies to an IRB for approval. An IRB may halt the clinical study, either temporarily or permanently, for failure to comply with the IRB's requirements, or may impose other conditions.

Companies generally divide the clinical investigation of a drug into three or four phases. While companies usually conduct these phases sequentially, they are sometimes overlapped or combined.

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    Phase I.  The company evaluates the drug in healthy human subjects or patients with the target disease or condition. These studies typically evaluate the safety, dosage tolerance, metabolism and pharmacologic actions of the investigational new drug in humans, the side effects associated with increasing doses, and, if possible, gain early evidence on effectiveness.

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    Phase II.  The company administers the drug to a limited patient population to evaluate dosage tolerance and optimal dosage, identify possible adverse side effects and safety risks, and preliminarily evaluate efficacy.

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    Phase III.  The company administers the drug to an expanded patient population, generally at geographically dispersed clinical study sites, to generate enough data to statistically evaluate dosage, clinical effectiveness and safety, to establish the overall benefit-risk relationship of the investigational drug, and to provide an adequate basis for product approval.

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    Phase IV.  In some cases, the FDA may condition approval of an NDA for a drug on the company's agreement to conduct additional clinical studies after approval. In other cases, a sponsor may voluntarily conduct additional clinical studies after approval to gain more information about the drug. We typically refer to such post-approval studies as Phase 4 clinical studies.

A pivotal study is a clinical study that adequately meets regulatory agency requirements to evaluate a drug's efficacy and safety to justify the approval of the drug. Generally, pivotal studies are Phase III studies, but the FDA may accept results from Phase II studies if the study design provides a well-controlled and reliable assessment of clinical benefit, particularly in situations in which there is an unmet medical need and the results are sufficiently robust.

The FDA, the IRB, or the clinical study sponsor may suspend or terminate a clinical study at any time on various grounds, including a finding that the research subjects are being exposed to an unacceptable health risk. Additionally, an independent group of qualified experts organized by the clinical study sponsor, known as a data and safety monitoring board, may oversee some clinical studies. This group provides authorization for whether or not a study may move forward at designated check points based on access to certain data from the study.

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Submission of an NDA

After we complete the required clinical testing, we can prepare and submit an NDA to the FDA, who must approve the NDA before we can start marketing the drug in the United States. An NDA must include all relevant data available from pertinent pre-clinical and clinical studies, including negative or ambiguous results as well as positive findings, together with detailed information relating to the drug's chemistry, manufacturing, controls, and proposed labeling, among other things. Data can come from company-sponsored clinical studies on a drug, or from a number of alternative sources, including studies initiated by investigators. To support marketing authorization, the data we submit must be sufficient in quality and quantity to establish the safety and effectiveness of the investigational drug to the FDA's satisfaction.

The cost of preparing and submitting an NDA is substantial. The submission of most NDAs is additionally subject to a substantial application user fee, and the manufacturer and/or sponsor under an approved new drug application are also subject to annual program user fees. The FDA typically increases these fees annually. Orphan drug designation entitles a party to financial incentives such as opportunities for grant funding towards clinical study costs, tax advantages, and user-fee waivers.

The FDA has 60 days from its receipt of an NDA to determine whether it will accept the application for filing based on the agency's threshold determination that the application is sufficiently complete to permit substantive review. Once the FDA accepts the filing, the FDA begins an in-depth review. The FDA has agreed to certain performance goals in the review of NDAs. Under the Prescription Drug User Fee Act, the FDA has a goal of responding to standard review NDAs within ten months after the 60-day filing review period, but this timeframe is often extended. The FDA reviews most applications for standard review drugs within twelve months and most applications for priority review drugs within six to eight months. Priority review can be applied to drugs that the FDA determines offer major advances in treatment, or provide a treatment where no adequate therapy exists.

The FDA may also refer applications for novel drugs that present difficult questions of safety or efficacy, to an advisory committee. This is typically a panel that includes clinicians and other experts that will review, evaluate, and recommend whether the FDA should approve the application. The FDA is not bound by the recommendation of an advisory committee, but it generally follows such recommendations. Before approving an NDA, the FDA will typically inspect one or more clinical sites to assure compliance with GCP, and will inspect the facility or the facilities at which the drug is manufactured. The FDA will not approve the drug unless compliance with cGMP is satisfactory and the NDA contains data that provide evidence that the drug is safe and effective in the indication studied.

The FDA's Decision on an NDA

After the FDA evaluates the NDA and the manufacturing facilities, it issues either an approval letter or a complete response letter. A complete response letter indicates that the FDA has completed its review of the application, and the agency has determined that it will not approve the application in its present form. A complete response letter generally outlines the deficiencies in the submission and may require substantial additional clinical data and/or other significant, expensive, and time-consuming requirements related to clinical studies, pre-clinical studies and/or manufacturing. The FDA has committed to reviewing resubmissions of the NDA addressing such deficiencies in two or six months, depending on the type of information included. Even if we submit such data the FDA may ultimately decide that the NDA does not satisfy the criteria for approval. Also, the government may establish additional requirements, including those resulting from new legislation, or the FDA's policies may change, which could delay or prevent regulatory approval of our drugs under development.

An approval letter authorizes commercial marketing of the drug with specific prescribing information for specific indications. As a condition of NDA approval, the FDA may require a risk evaluation and mitigation strategy, or REMS, to help ensure that the benefits of the drug outweigh the potential risks. REMS can include medication guides, communication plans for healthcare professionals, special training or certification for prescribing or dispensing, dispensing only under certain circumstances, special monitoring,

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and the use of patient registries. The requirement for REMS can materially affect the potential market and profitability of the drug. Moreover, the FDA may condition approval on substantial post-approval testing and surveillance to monitor the drug's safety or efficacy. Once granted, the FDA may withdraw drug approvals if the company fails to comply with regulatory standards or identifies problems following initial marketing.

Changes to some of the conditions established in an approved application, including changes in indications, labeling, or manufacturing processes or facilities, require submission and FDA approval of a new NDA or NDA supplement before we can implement the change. An NDA supplement for a new indication typically requires clinical data similar to that in the original application, and the FDA uses the same procedures and actions in reviewing NDA supplements as it does in reviewing new NDAs. As with new NDAs, the FDA often significantly extends the review process with requests for additional information or clarification.

Post-approval Requirements

The FDA regulates drugs that are manufactured or distributed pursuant to FDA approvals and has specific requirements pertaining to recordkeeping, periodic reporting, drug sampling and distribution, advertising and promotion and reporting of adverse experiences with the drug. After approval, the FDA must provide review and approval for most changes to the approved drug, such as adding new indications or other labeling claims. There also are continuing, annual user fee requirements for any marketed drugs and the establishments who manufacture our drugs, as well as new application fees for supplemental applications with clinical data.

In some cases, the FDA may condition approval of an NDA for a drug on the sponsor's agreement to conduct additional clinical studies after approval. In other cases, a sponsor may voluntarily conduct additional clinical studies after approval to gain more information about the drug. Such post-approval studies are typically referred to as Phase IV clinical studies.

Drug manufacturers are subject to periodic unannounced inspections by the FDA and state agencies for compliance with cGMP requirements. There are strict regulations regarding changes to the manufacturing process, and, depending on the significance of the change, it may require prior FDA approval before we can implement it. FDA regulations also require investigation and correction of any deviations from cGMP and impose reporting and documentation requirements upon us and any third-party manufacturers that we may decide to use. Accordingly, manufacturers must continue to expend time, money and effort in the area of production and quality control to maintain compliance with cGMP and other aspects of regulatory compliance.

The FDA may withdraw approval if a company does not comply with regulatory requirements and maintain standards or if problems occur after the drug reaches the market. If a company or the FDA discovers previously unknown problems with a drug, including adverse events of unanticipated severity or frequency, issues with manufacturing processes, or the company's failure to comply with regulatory requirements, the FDA may revise the approved labeling to add new safety information; impose post-marketing studies or other clinical studies to assess new safety risks; or impose distribution or other restrictions under a REMS program. Other potential consequences may include:

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    restrictions on the marketing or manufacturing of the drug, complete withdrawal of the drug from the market or drug recalls;

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

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    the FDA refusing to approve pending NDAs or supplements to approved NDAs, or suspending or revoking of drug license approvals;

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

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    injunctions or the imposition of civil or criminal penalties.

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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 with the provisions of the approved label. The FDA and other agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses. We could be subject to significant administrative, civil and criminal liability if we violated any of these laws and regulations.

Rare Pediatric Disease Priority Review Voucher Program

FDA awards priority review vouchers to sponsors of designated rare pediatric disease product applications as an incentive to encourage development of new drug and biological products for prevention and treatment of rare pediatric diseases. Specifically, under this program, a sponsor who receives an approval for a drug or biologic for a "rare pediatric disease" may qualify for a voucher that can be redeemed to receive a priority review of a subsequent marketing application for a different product. The sponsor of a rare pediatric disease drug product receiving a priority review voucher may transfer (including by sale) the voucher to another sponsor. The voucher may be further transferred any number of times before the voucher is used, as long as the sponsor making the transfer