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INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Table of Contents

As filed with the Securities and Exchange Commission on March 14, 2019.

Registration Statement No. 333-229907


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

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

France
(State or other jurisdiction of
incorporation or organization)
  2836
(Primary Standard Industrial
Classification Code Number)
  Not applicable
(I.R.S. Employer
Identification Number)

Parc Eurasanté
885, avenue Eugène Avinée
59120 Loos, France
+33 3 20 16 4000
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)

Corporation Service Company
1180 Avenue of the Americas, Suite 210
New York, NY 10036
+1 800 927 9801

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

Copies to:

Marc A. Recht
Brian F. Leaf
Katie A. Kazem
Cooley LLP
500 Boylston Street
Boston, MA 02116
+1 617 937 2300

 

Bertrand Sénéchal
Linklaters LLP
25 rue de Marignan
75008 Paris, France
+33 1 56 43 56 43

 

Mitchell S. Bloom
Edwin M. O'Connor
Markus Bauman
Goodwin Procter LLP
100 Northern Avenue
Boston, MA 02210
+1 617 570 1000

 

Linda Hesse
Florent Bouyer
Jones Day
2, rue Saint-Florentin
75001 Paris, France
+33 1 56 59 39 39

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)

  AMOUNT OF
REGISTRATION FEE(4)(5)

 

Ordinary shares, €0.25 nominal value per share

  $151,397,500   $18,349.38

 

(1)
All of the offered ordinary shares will be in the form of American Depositary Shares, or ADSs, in the U.S. offering, with each ADS representing 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.

(2)
Includes ordinary shares (which may be in the form of ADSs) that the underwriters have the option to purchase. See "Underwriting."

(3)
Includes ordinary shares that are being offered in a private placement in Europe (including France) and other countries outside of the United States, 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 private placement 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 based on an estimate of the proposed maximum offering price.

(5)
Of this amount, $12,120 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.


The term "new or revised financial accounting standard" refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.

   


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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 MARCH 14, 2019

PROSPECTUS

5,000,000 Ordinary Shares
(Including Ordinary Shares in the Form of American Depositary Shares)

LOGO

€            per Ordinary Share

$            per American Depositary Share

          We are offering an aggregate of 5,000,000 ordinary shares in a global offering.

          We are offering            ordinary shares in the form of American Depositary Shares, or ADSs, in the United States, referred to herein 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 in Europe (including France) and countries outside of the United States in a private placement, referred to herein as the European private placement.

          This is our initial public offering of our ADSs in the United States. We have applied to list our ADSs on the Nasdaq Global Market under the symbol "GNFT." Our ordinary shares are listed on Euronext Paris under the symbol "GNFT." The 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, but will not be lower than a price that is 15% below the volume-weighted average price of our ordinary shares on Euronext Paris during a window of five to 30 consecutive trading days (as decided by our company) within the 30 trading days preceding the day on which the offering price is determined. On March 13, 2019, the last reported sale price of our ordinary shares on Euronext Paris was €23.42 per ordinary share, equivalent to a price of $26.33 per ADS, assuming an exchange rate of €0.8894 per U.S. dollar, the exchange rate on March 8, 2019.

          The closings of the U.S. offering and the European private placement, which are together referred to as the global offering, will occur simultaneously. The total number of ordinary shares (including in the form of ADSs) in the U.S. offering and the European private placement is subject to reallocation between these offerings as permitted under applicable laws and regulations.

          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 the ordinary shares and ADSs involves a high degree of risk. See "Risk Factors" beginning on page 13 of this prospectus.

          Under the authority granted by our shareholders to conduct the global offering, the ordinary shares and ADSs that we are offering may only be purchased initially by industrial or commercial companies in the pharmaceutical/biotech sector or investment fund companies or fund management companies or collective savings managing funds governed by French or foreign law or any other legal entity (including a trust) or natural person, investing in the pharmaceutical/biotech sector, that is qualified to invest in a private placement. In order to purchase ordinary shares and/or ADSs in the global offering, you will be required to execute and provide to the underwriters an investor letter representing that you satisfy the foregoing investor criteria.

          Neither the Securities and Exchange Commission nor any U.S. state or other securities commission 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.

           
 
 
  PER ORDINARY
SHARE

  PER ADS
  TOTAL
 

Initial public offering price

  €               $               $            
 

Underwriting commissions(1)

  €               $               $            
 

Proceeds to us, before expenses

  €               $               $            

 

(1)
We refer you to "Underwriting" beginning on page 221 of this prospectus for additional information regarding underwriting compensation.

          We have granted an option to the underwriters, exercisable within 30 days from the date of the underwriting agreement, to purchase up to an aggregate of 750,000 additional ADSs and/or ordinary shares (representing 15% of the initial size of the global offering) in the global offering to be sold to the several underwriters at the applicable offering price. If the underwriters exercise this option in full, the total underwriting commissions payable by us will be €            ($            ) and the total proceeds to us, before expenses, will be €            ($            ), based on the exchange rate on March 8, 2019.

          The underwriters expect to deliver the ADSs to purchasers in the U.S. offering on or about                  , 2019 through the book-entry facilities of The Depository Trust Company. The underwriters expect to deliver the ordinary shares to purchasers in the European private placement on or about                  , 2019 through the book-entry facilities of Euroclear France.

SVB Leerink   Barclays

 

Bryan, Garnier & Co.   Natixis

 

Roth Capital Partners   H.C. Wainwright & Co.

   

The date of this prospectus is                  , 2019.


Table of Contents

TABLE OF CONTENTS

 
  Page  

EXCHANGE RATE INFORMATION

    i  

MARKET, INDUSTRY AND OTHER DATA

    ii  

TRADEMARKS AND SERVICE MARKS

    ii  

PROSPECTUS SUMMARY

    1  

RISK FACTORS

    13  

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

    68  

USE OF PROCEEDS

    70  

DIVIDEND POLICY

    72  

CAPITALIZATION

    73  

DILUTION

    75  

SELECTED CONSOLIDATED FINANCIAL DATA

    78  

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

    80  

BUSINESS

    97  

MANAGEMENT

    150  

CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS

    167  

PRINCIPAL SHAREHOLDERS

    170  

DESCRIPTION OF SHARE CAPITAL

    172  

LIMITATIONS AFFECTING SHAREHOLDERS OF A FRENCH COMPANY

    197  

DESCRIPTION OF AMERICAN DEPOSITARY SHARES

    198  

SHARES AND ADSs ELIGIBLE FOR FUTURE SALE

    208  

MATERIAL UNITED STATES FEDERAL INCOME AND FRENCH TAX CONSIDERATIONS

    210  

ENFORCEMENT OF CIVIL LIABILITIES

    220  

UNDERWRITING

    221  

EXPENSES RELATING TO THE GLOBAL OFFERING

    230  

LEGAL MATTERS

    231  

EXPERTS

    231  

WHERE YOU CAN FIND MORE INFORMATION

    232  

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

    F-1  

        For investors outside the United States: Neither we nor any of the underwriters have done anything that would permit the global 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 global offering of the ADSs and ordinary shares 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.

        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.


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EXCHANGE RATE INFORMATION

        The following table sets forth, for each period indicated, the low and high exchange rates for euros expressed in U.S. dollars, the exchange rate at the end of such period and the average of such exchange rates on the last day of each month during such period, based on the noon buying rate of the Federal Reserve Bank of New York for the euro. As used in this prospectus, the term "noon buying rate" refers to the rate of exchange for the euro, expressed in U.S. dollars per euro, as certified by the Federal Reserve Bank of New York for customs purposes. The exchange rates set forth below demonstrate trends in exchange rates, but the actual exchange rates used throughout this prospectus may vary.

 
  YEAR ENDED DECEMBER 31,  
 
  2013   2014   2015   2016   2017   2018  

High

    1.3816     1.3927     1.2015     1.1516     1.2041     1.2488  

Low

    1.2774     1.2101     1.0524     1.0375     1.0416     1.1281  

Rate at end of period

    1.3779     1.2101     1.0859     1.0552     1.2022     1.1456  

Average rate per period

    1.3281     1.3297     1.1096     1.1072     1.1396     1.1817  

        The following table sets forth, for each of the last six months for which such information is available, the high and low exchange rates for euros expressed in U.S. dollars and the exchange rate at the end of the month based on the noon buying rate as described above.

 
  SEPTEMBER
2018
  OCTOBER
2018
  NOVEMBER
2018
  DECEMBER
2018
  JANUARY
2019
  FEBRUARY
2019
 

High

    1.1773     1.1594     1.1459     1.1456     1.1524     1.1474  

Low

    1.1566     1.1332     1.1281     1.1300     1.1322     1.1268  

Rate at end of period

    1.1622     1.1332     1.1323     1.1456     1.1454     1.1379  

        On December 31, 2018, the noon buying rate of the Federal Reserve Bank of New York for the euro was €1.00 = $1.1456.

        On March 8, 2019, the noon buying rate of the Federal Reserve Bank of New York for the euro was €1.00 = $1.1243.

        Unless otherwise indicated, currency translations in this prospectus reflect the March 8, 2019 exchange rate.

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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." These and other factors could cause our future performance to differ materially from our assumptions and estimates.


TRADEMARKS AND SERVICE MARKS

        "GENFIT," the GENFIT logo and other trademarks or service marks of GENFIT S.A. appearing in this prospectus are the property of GENFIT S.A. or its subsidiaries. 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, "GENFIT," "the company," "our company," "we," "us" and "our" refer to GENFIT S.A. and its consolidated subsidiaries.

Overview

        We are a late-stage clinical biopharmaceutical company dedicated to the discovery and development of innovative drug candidates and diagnostic solutions targeting metabolic and liver-related diseases where there is considerable unmet medical need. We are a leader in the field of nuclear receptor-based drug discovery with a rich history and strong scientific heritage spanning almost two decades. We are evaluating our most advanced drug candidate, elafibranor, in a pivotal Phase 3 clinical trial as a potential treatment for nonalcoholic steatohepatitis, or NASH, and in a Phase 2 clinical trial as a potential treatment for primary biliary cholangitis, or PBC. In December 2018, we announced positive preliminary results from our Phase 2 clinical trial in PBC. Our drug discovery efforts are based on selecting appropriate nuclear receptors as targets and utilizing rational drug design to optimize our drug candidates. A key differentiator of our development strategy is our NASH biomarker-based diagnostic program, in which we are developing a new in vitro diagnostic, or IVD, test to identify patients with NASH who may be appropriate candidates for drug therapy. In January 2019, we entered into a license agreement with LabCorp to allow them to deploy our IVD test in the clinical research space. Our scientific and clinical expertise, translational disease-driven approach and strong bioinformatics capabilities have allowed us to build a scientific platform through which we discover and develop our drug candidates and diagnostic tools. We believe elafibranor, if approved, has the potential to become a first-line treatment as a monotherapy and the backbone of combination regimens.

        NASH is a liver disease that affects millions of people and for which there are currently no approved therapies. NASH is characterized by an accumulation of fat, inflammation and degeneration of hepatocytes, and may ultimately lead to life-threatening conditions like cirrhosis, liver failure or liver cancer requiring liver transplant. The global market for the treatment of NASH is growing rapidly and is projected to reach $20 billion by 2025.

        The following table summarizes our drug candidate and diagnostic development pipeline. We have retained worldwide rights to all of our programs.

GRAPHIC

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        Elafibranor, a dual agonist of the nuclear receptors PPARa and PPARd, is currently in Phase 3 development for the treatment of NASH. In our Phase 2b clinical trial, elafibranor achieved resolution of NASH without worsening of fibrosis, which is the primary endpoint of our ongoing global Phase 3 clinical trial. In our Phase 2b clinical trial, elafibranor achieved resolution of NASH without worsening of fibrosis, which has been defined by the FDA for drug registration and is the primary endpoint of our ongoing global Phase 3 clinical trial. However, we did not achieve statistical significance on the pre-specified primary endpoint of our Phase 2b clinical trial, which was based on an outdated definition of resolution of NASH. We have already achieved the enrollment necessary to perform an interim cohort analysis and expect to report interim results by the end of 2019. We believe these results, if positive, could support accelerated approval from the U.S. Food and Drug Administration, or FDA, and conditional approval from the European Medicines Agency, or EMA, as early as 2020. Elafibranor has received fast track designation from the FDA for the treatment of NASH.

        We are also developing elafibranor for the treatment of PBC, a chronic, progressive liver disease that leads to inflammation and scarring of the small bile ducts in the liver. Although a relatively rare disease mainly affecting women, PBC can develop into cirrhosis and other serious liver complications. There is currently no cure for PBC, and the two drugs approved for the treatment of PBC are limited by drug intolerance, lack of patient response and safety issues. Based on our clinical data in NASH, we believe elafibranor's unique mechanism of action can provide benefits for patients with PBC without significant side effects, such as the serious liver injury or death and pruritis that have been associated with approved PBC treatments. In December 2018, we announced positive preliminary results from our Phase 2 clinical trial evaluating elafibranor for the treatment of PBC. Elafibranor met the primary endpoint of the trial, which was the change at week 12 in serum alkaline phosphatase, or ALP, from baseline, with statistical significance compared to placebo in both doses evaluated. Elafibranor also achieved with high statistical significance when compared to placebo, the composite endpoint of ALP and bilirubin. That endpoint, which has been used for drug registration, is defined as (1) ALP less than 1.67 times the upper limit of normal, or ULN, (2) total bilirubin within normal limits and (3) a reduction of ALP of more than 15%. Based on these positive results, we plan to advance our PBC program into Phase 3 development.

        NASH is a silent disease. Patients often have no symptoms until the first signs of liver failure, and the lack of an accurate, non-invasive diagnosis tool contributes to under-diagnosis. Currently, liver biopsy is the standard for diagnosis, and variation in clinical practice and physician reluctance lead to under-diagnosis. Our blood-based IVD test is a novel, standalone diagnostic that we believe can address the urgent need for a non-invasive, cost-effective, accessible and validated test to identify NASH patients who may be appropriate candidates for drug intervention, thereby decreasing the need for liver biopsy. We believe our IVD test has the potential to benefit patients, improve overall clinical care and facilitate the identification of NASH patients to be treated. We anticipate marketing our IVD test first as a laboratory developed test, or LDT, in 2019, and then submitting our IVD test for FDA marketing authorization in 2020. In January 2019, we entered into a license agreement with LabCorp to allow them to deploy our IVD test in the clinical research space.

        We are also advancing a clinical-stage program based on drug repositioning to develop an anti-fibrotic drug. Our lead drug candidate in this program, nitazoxanide, or NTZ, is an approved anti-parasitic agent. In December 2018, we announced the initiation of an investigator-initiated Phase 2 proof-of-concept trial to evaluate NTZ for the treatment of NASH patients with significant fibrosis.

        Our TGFTX1 preclinical program is focused on the discovery and development of innovative drug candidates targeting RORgt, a nuclear receptor involved in certain inflammatory and autoimmune diseases. We are currently conducting pre-IND studies for a topical treatment of mild to moderate psoriasis.

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        Our current chief executive officer co-founded our company in 1999 and our shares have been listed on Euronext Paris first on Alternext and then on the regulated market under the symbol "GNFT" since 2006. We are led by an executive team and board of directors with deep experience at leading biotech companies, large pharmaceutical companies and academic institutions. We have over 150 employees at our offices in Lille and Paris, France and Cambridge, Massachusetts. The chair of our scientific advisory board, Bart Staels, is a co-founder of our company and a world-renowned expert in nuclear receptors. Our scientific advisory board is comprised of internationally recognized key opinion leaders in the field of metabolic and inflammatory diseases, with a particular focus on the liver and gastroenterology. We believe the expertise of our leadership and the strength of our relationships within the academic and clinical communities are critical to our ability to execute on our mission as we progress our development pipeline.

Our Strengths

        We believe the following strengths will allow us to continue to build upon our leadership position in drug and diagnostic development for metabolic and liver-related diseases and achieve our goal of commercializing our drug and diagnostic candidates:

    Our lead product candidate, elafibranor, is in Phase 3 development for the treatment of NASH, an indication for which there are no approved drugs today, but which presents significant market opportunity. In April 2018, we announced that we had achieved the recruitment goal of 1,000 patients for the interim cohort in our global Phase 3 clinical trial being conducted in 25 countries. We expect to report the results of our interim cohort analysis by the end of 2019, which, if positive, could support accelerated approval from the FDA and conditional approval from the EMA as early as 2020. If approved, we believe elafibranor could be among the first FDA-approved therapies shown to achieve resolution of NASH without worsening of fibrosis.

    We recently announced positive preliminary results from our Phase 2 clinical trial of elafibranor for the treatment of PBC and plan to commence Phase 3 development. In December 2018, we announced that elafibranor met the primary endpoint of our Phase 2 clinical trial, which was the change at week 12 in serum ALP from baseline. Compared to placebo, treatment with 80 mg and 120 mg elafibranor resulted in mean decrease from baseline of –52% and –44%, respectively, each with high statistical significance. With respect to the composite endpoint, the elafibranor 80 mg and 120 mg treatment groups achieved with high statistical significance mean response rates of 67% and 79%, respectively, as compared to 6.7% for the placebo group. We plan to advance our PBC program into Phase 3 development in 2019.

    Elafibranor's results on NASH resolution, its good tolerability and lack of demonstrated safety concerns make it well-positioned among late-stage NASH programs. We believe elafibranor has a favorable tolerability profile based on the results of our Phase 1 and Phase 2 trials. Also, in our Phase 2b clinical trial, we observed elafibranor's ability to resolve NASH without the worsening of fibrosis, which is the primary endpoint of our ongoing global Phase 3 clinical trial, while also showing a decrease in cardiovascular risk factors, an important observation considering the close link between NASH and cardiometabolic disease, and one that has not been reported in other drugs in Phase 3 development for NASH. Elafibranor is, to our knowledge, the only drug currently permitted to be developed for the treatment of children with NASH. We hold over 350 patents and patent applications relating to elafibranor, and the patent covering the use of elafibranor for the treatment of NASH does not expire until 2030, without taking into account any extensions.

    We are a recognized leader in the NASH field.  We are actively involved in the NASH stakeholder community, as a member of the steering committee and co-leader of a working group of The Liver Forum. We also participate in academic consortia, such as the biomarkers

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      consortia in the United States and Europe, and work with patient advocacy groups including the Global Liver Institute, American Liver Forum and the European Liver Patient Association. We also spearhead disease awareness through The NASH Education Program, which is a Genfit public health initiative. These programs provide us with insight from the key stakeholders in NASH and our leadership position enables us to establish credibility with and convey these insights to regulators and payors.

    Our diagnostic program has the potential to expand market opportunity through better patient identification and stratification. Our IVD test is designed to identify NASH patients who may be appropriate candidates for drug intervention. We believe that broad adoption of our non-invasive, accessible test, if validated and authorized for marketing, could not only help solve the problem of NASH under-diagnosis, but also provide physicians with a tool to identify patients who would benefit from treatment with elafibranor or any other appropriate drug. Our license agreement with LabCorp allows for the deployment of our IVD test in the clinical research space through its central laboratories, which we believe will provide expanded access to, and further validation of our IVD test and generate new biological insights on NASH disease pathogenesis.

    Our pipeline extends beyond elafibranor.  In December 2018, we announced the initiation of an investigator-initiated Phase 2 proof-of-concept trial to evaluate NTZ for the treatment of NASH patients with significant fibrosis. If this Phase 2 trial demonstrates anti-fibrotic activity in these patients, we plan to develop NTZ as a combination therapy with elafibranor as part of our strategy in NASH, in addition to development as a standalone monotherapy in fibrotic diseases. Our TGFTX1 program is in preclinical development in certain inflammatory and autoimmune diseases.

    Our experienced team is comprised of industry leaders in metabolic and liver-related diseases. We believe that the breadth of experience and accomplishments of our management team, board of directors and scientific advisory board, combined with our broad network of established relationships with leaders in the industry and medical community, provide us with unique insights into drug development and commercialization, and have allowed us to bring together top researchers to build interdisciplinary research and development teams.

Our Strategy

        Our goal is to become a leader in the development of innovative therapies and diagnostics in metabolic and liver-related diseases. The key elements of our strategy to achieve this goal include:

    Obtain regulatory approval for, and commercialize, elafibranor for the treatment of NASH.

    Rapidly advance the clinical development of elafibranor for the treatment of PBC.

    Complete development and prepare for potential commercialization of our NASH IVD test.

    Advance other drug candidates in our pipeline, both alone and in combination with elafibranor.

    Actively manage our development pipeline and opportunistically enter into strategic collaborations.

    Increase public awareness of NASH through The NASH Education Program.

Summary Risk Factors

        An investment in our ordinary shares (including ordinary shares in the form of ADSs) involves a high degree of risk. Any of the factors set forth under "Risk Factors" may limit our ability to successfully execute our business strategy. You should carefully consider all of the information set forth

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in this prospectus and, in particular, should evaluate the specific factors set forth under "Risk Factors" in deciding whether to invest in our securities. Among these important risks are the following:

    We have never generated profits from product sales. Currently, we have no products approved for commercial sale, and to date we have not generated any revenue from product sales. As a result, our ability to reduce our losses and reach profitability is unproven, and we may never achieve or sustain profitability.

    Our ability to be profitable in the future will depend on our ability to obtain marketing approval for and commercialize our product candidates, particularly our lead product candidate, elafibranor.

    We will require substantial additional funding to commercialize our products, if approved, which may not be available to us on acceptable terms, or at all, and, if not so available, may require us to delay, limit, reduce or cease our operations.

    We are developing our lead product candidate, elafibranor for the treatment of NASH, a condition for which no drug has yet been commercialized and for which there is little clinical experience. As a result, our development approach involves new endpoints and methodologies. There is risk that the outcome of our clinical trials will not be favorable or that, even if favorable, regulatory authorities may not find the results of our clinical trials to be sufficient for marketing approval.

    Clinical failure can occur at any stage of clinical development. The results of earlier clinical trials are not necessarily predictive of future results and any product candidate we, or our potential future collaborators advance through clinical trials may not have favorable results in later clinical trials or receive regulatory approval.

    If we are unable to establish sales, marketing and distribution capabilities for our product candidates, whether it be via an internal infrastructure or an arrangement with a commercial partner, we may not be successful in commercializing those product candidates if and when they are approved.

    Our failure to maintain certain tax benefits applicable to French biopharmaceutical companies may adversely affect our results of operations.

    Our ability to compete may decline if we do not adequately protect our proprietary rights.

    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.

    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 ADSs and ordinary shares.

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 correspondingly reduced disclosure in management's discussion and analysis of financial condition and results of operations in the registration statement for the global offering of which this prospectus forms a part;

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    exemption from the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002; 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 or such earlier time that we no longer qualify as an emerging growth company. We would cease to be an emerging growth company if we have more than $1.07 billion in total annual gross revenue, have more than $700 million in market value of our capital stock held by non-affiliates or 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 have taken 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 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 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 incorporated as a French société anonyme, or S.A., on September 21, 1999. Our principal executive offices are located at Parc Eurasanté, 885 avenue Eugène Avinée, 59120 Loos, France. We

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are registered at the Register of Commerce and Companies of Lille Métropole (Registre du commerce et des sociétés) under the number 424 341 907. In July 2003, we incorporated our wholly owned U.S. subsidiary, Genfit Corp. Our other wholly owned subsidiary, Genfit Pharmaceuticals SAS, was incorporated in France in December 2011. In 2006, we completed the initial public offering of our ordinary shares on Alternext market of Euronext in Paris and were transferred to the regulated market of Euronext Paris in 2014. Our telephone number at our principal executive offices is +33 3 20 16 40 00. Our agent for service of process in the United States is Corporation Service Company, located at 1180 Avenue of the Americas, Suite 210, New York, NY 10036. Our website address is www.genfit.com. The reference to our website is an inactive textual reference only and information contained in, or that can be accessed through, our website or any other website cited in this prospectus is not part of this prospectus.

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THE GLOBAL OFFERING

Global offering

  5,000,000 ordinary shares offered by us, consisting of ordinary shares in the form of ADSs offered in the U.S. offering and ordinary shares offered in the European private placement. The closings of the U.S. offering and the European private placement will occur simultaneously. The total number of ordinary shares (including in the form of ADSs) in the U.S. offering and European private placement is subject to reallocation between these offerings as permitted under applicable laws and regulations.

U.S. offering

                  ADSs, each representing one ordinary share

European private placement

                  ordinary shares

Offering price

  The 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, but will not be lower than a price that is 15% below the volume-weighted average price of our ordinary shares on Euronext Paris during a window of five to 30 consecutive trading days (as decided by our company) within the 30 trading days preceding the day on which the offering price is determined.

Purchaser Restrictions

  Under the authority granted by our shareholders to conduct the global offering, the ordinary shares and ADSs that we are offering may only be purchased initially by industrial or commercial companies in the pharmaceutical/biotech sector or investment fund companies or fund management companies or collective savings managing funds governed by French or foreign law or any other legal entity (including trust) or natural person, investing in the pharmaceutical/biotech sector, that is qualified to invest in a private placement. In order to purchase ordinary shares and/or ADSs in the global offering, you will be required to execute and provide to the underwriters an investor letter representing that you satisfy the foregoing investor criteria.

Ordinary shares (including ordinary shares in the form of ADSs) to be outstanding after the global offering

  36,183,921 ordinary shares

Option to purchase additional ADSs and/or ordinary shares in the global offering

  We have agreed to issue, at the option of the underwriters, within 30 days after the date of the underwriting agreement, up to an aggregate of 750,000 additional ADSs and/or ordinary shares (representing 15% of the initial size of the global offering).

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American Depositary Shares

  Each ADS represents one ordinary share, nominal value €0.25 per share. Purchasers of ADSs in the U.S. offering 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 of which this prospectus forms a part.

Depositary

  The Bank of New York Mellon

Use of proceeds

  We estimate that we will receive net proceeds from the global offering of approximately €106.0 million ($119.2 million), based on an assumed offering price of $26.33 per ADS, or €23.42 per ordinary share, the closing price of our ordinary shares on Euronext Paris on March 13, 2019, after deducting estimated underwriting commissions and estimated offering expenses payable by us. We intend to use the net proceeds from the global offering, together with our existing resources, to:

 

prepare for the potential commercialization of elafibranor in NASH by building out our commercial infrastructure;

 

complete our ongoing Phase 3 clinical development of elafibranor for the treatment of NASH through to, at least, the submission of an NDA to the FDA and EMA and the launch of the Phase 4 clinical trial;

 

conduct a global Phase 3 clinical trial of elafibranor for the treatment of PBC;

 

advance the commercial development of our IVD test to identify NASH patients through the launch of the LDT and completion of the work required to obtain regulatory approval for our IVD kit;

 

advance our research program on the use of elafibranor as a potential backbone for combination therapies in order to launch two proof-of-concept studies; and

 

the remainder, if any, for working capital and for general corporate purposes.

  See "Use of Proceeds" for more information.

Dividend policy

  We do not expect to pay any dividends on the 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 the ordinary shares or ADSs.

Proposed Nasdaq Global Market symbol for our ADSs

  "GNFT"

Euronext Paris trading symbol for our ordinary shares

  "GNFT"

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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 31,183,921 ordinary shares outstanding as of December 31, 2018 and excludes:

    548,882 new ordinary shares issuable upon the exercise of redeemable share warrants (BSAAR), share warrants (BSA), free shares and stock options granted but not exercised as of December 31, 2018 at a weighted average exercise price of €19.72 ($22.59) per new ordinary share based on the exchange rate in effect as of December 31, 2018 (this weighted average exercise price does not include the 83,726 new ordinary shares issuable upon the vesting of outstanding free shares that may be issued for free with no exercise price paid);

    200,066 ordinary shares reserved for future issuance under our share-based compensation plans and other delegations of authority from our shareholders; and

    9,000,000 ordinary shares reserved to date pursuant to a delegation of authority from our shareholders for share capital increases by us through rights issuances and public or private offerings.

        Except as otherwise noted, the information in this prospectus assumes no exercise by the underwriters of their option to purchase 750,000 additional ADSs and/or ordinary shares in the global offering.

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SUMMARY CONSOLIDATED FINANCIAL DATA

        The following summary consolidated statement of operations data for the years ended December 31, 2017 and the summary consolidated statement of financial position data as of December 31, 2018 have been derived from our audited consolidated financial statements included elsewhere in this prospectus. Our audited consolidated financial statements have been prepared in accordance with International Financial Reporting Standards, or IFRS, as issued by the International Accounting Standards Board, or IASB, as of and for the years ended December 31, 2017 and 2018.

        Our historical results are not necessarily indicative of the results that may be expected in the future. You should read this summary consolidated financial data together with our consolidated financial statements and related notes beginning on page F-1 of this prospectus, as well as the sections of this prospectus titled "Exchange Rate Information," "Selected Consolidated Financial Data" and "Management's Discussion and Analysis of Financial Condition and Results of Operations."

Summary Consolidated Statement of Operations Data:

 
  Year Ended
December 31,
 
(in thousands of euros, except loss per share data)
  2017   2018  
 
  Restated*
   
 

Revenues and other income

             

Revenue

  118   69  

Other income

    6,737     7,425  

Revenues and other income

    6,856     7,494  

Operating expenses and other operating income (expenses)

             

Research and development expenses

    (54,189 )   (67,024 )

General and administrative expenses

    (9,421 )   (9,793 )

Other operating income (expenses)

    60     (162 )

Operating loss

    (56,695 )   (69,484 )

Financial income

    642     728  

Financial expenses

    (3,096 )   (11,118 )

Financial loss

    (2,453 )   (10,391 )

Net loss before tax

    (59,148 )   (79,875 )

Income tax benefit

    3,420     354  

Net loss

  (55,728 ) (79,521 )

Basic and diluted loss per share

  (1.79 ) (2.55 )

*
In the context of the preparation of its 2018 consolidated financial statements, we restated the financial statements previously published for the 2017 fiscal year under IFRS. These changes do not affect the cash position or the operating results, and are mainly related to the application of IFRS to deferred taxes on the OCEANE bonds issued in October 2017. The corrections lead mainly to a decrease in the consolidated net loss of €2.9 million. More information is provided in Note 2.3 of our consolidated financial statements.

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Summary Consolidated Statement of Financial Position Data:

 
  As of December 31, 2018  
(in thousands)
  Actual   As
Adjusted(1)(2)
 

Cash and cash equivalents

  207,240   313,248  

Total assets

    229,478     335,486  

Total shareholders' equity

    20,939     126,947  

Total non-current liabilities

    169,291     169,291  

Total current liabilities

    39,248     39,248  

Total liabilities

    208,539     208,539  

Total liabilities and shareholders' equity

    229,478     335,486  

(1)
The as adjusted summary condensed consolidated statement of financial position data reflects our issuance and sale of ADSs and ordinary shares in the global offering at an assumed offering price of $26.33 per ADS in the U.S. offering, corresponding to €23.42 per ordinary share, the closing price of our ordinary shares on Euronext Paris on March 13, 2019, in the European private placement (assuming an exchange rate of €1.00 = $1.1243, the exchange rate on March 8, 2019), after deducting estimated underwriting commissions and estimated offering expenses payable by us.

(2)
The as adjusted summary condensed consolidated statement of financial position data is illustrative only and will change based on the actual offering price, the actual number of ordinary shares (including ordinary shares in the form of ADSs) offered by us and other terms of the global offering determined at pricing. The as adjusted information is unaudited and is not derived from our audited financial statements. Each $1.00 (€0.8894) increase or decrease in the assumed offering price of $26.33 per ADS in the U.S. offering would increase or decrease the as adjusted amount of each of cash and cash equivalents, total assets and total shareholders' equity by €4.1 million ($4.7 million), assuming that the number of ordinary shares offered by us (including ordinary shares in the form of ADSs), 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. Subject to applicable law, we may also increase or decrease the number of ordinary shares (including ordinary shares in the form of ADSs) we are offering. Each increase (decrease) of 1,000,000 ordinary shares (including ordinary shares in the form of ADSs) offered by us would increase (decrease) the as adjusted amount of each of cash and cash equivalents, total assets and total shareholders' equity by €21.8 million (€21.8 million) or $24.5 million ($24.5 million), assuming that the assumed offering price remains the same, and after deducting estimated underwriting commissions and estimated offering expenses payable by us.

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RISK FACTORS

        Investing in our ordinary shares (including ordinary shares in the form of ADSs) involves a high degree of risk. You should carefully consider the risks and uncertainties described below, together with all of the other information in this prospectus, including our consolidated financial statements and related notes, before deciding whether to purchase our securities. If any of the following risks are realized, our business, financial condition, operating results and prospects could be materially and adversely affected. In that event, the market price of our securities could decline, and you could lose part or all of your investment.

Risks Related to our Financial Position and Capital Needs

We have never generated profits from product sales. Currently, we have no products approved for commercial sale, and to date we have not generated any revenue from product sales. As a result, our ability to reduce our losses and reach profitability is unproven, and we may never achieve or sustain profitability.

        Although we were profitable in our early years of development, as a result of profits from our co-research alliances with certain pharmaceutical companies, we have not been profitable in the past 10 years and we have never generated profits from product sales. We do not expect to be profitable in the foreseeable future. We have incurred net losses in each of the past eleven years, including a net loss of €79.5 million for the year ended December 31, 2018. Our revenue and other income result principally from tax credits, including research tax credits, in France, and, until June 30, 2018, nominal revenues from the sublease of a portion of our corporate headquarters to a third party. Historically, we have also received funding from co-research alliances with other pharmaceutical companies, although we do not currently have any such alliances in place.

        We have devoted substantially all of our resources to our research and development efforts relating to our drug candidates and diagnostic program, in which we are developing a new in vitro diagnostic, or IVD, test to identify patients with nonalcoholic steatohepatitis, or NASH, who may be appropriate candidates for drug therapy, including conducting clinical trials of our drug candidates, providing general and administrative support for our operations, protecting our intellectual property and engaging in activities to prepare for the potential commercialization of our drug candidates and IVD test. We do not yet have any products approved for sale and have not generated any revenues from product sales.

        We expect to continue to incur losses for the foreseeable future, and we expect these losses to increase as we continue our development of, and seek regulatory approvals for elafibranor, which is our lead drug candidate, our other drug candidates and our IVD test. We also expect to incur losses as we prepare for and begin the commercialization of any approved products, and add infrastructure and personnel in the United States, Europe and other territories to support our product development and commercialization efforts and operations as a public company in both France and the United States. We anticipate that any such losses could be significant for the next several years as we continue our pivotal Phase 3 clinical trial of elafibranor, referred to as the RESOLVE-IT trial, in NASH, launch a Phase 3 clinical trial of elafibranor in primary biliary cholangitis, or PBC, and finalize other planned activities for regulatory approval of elafibranor in NASH. In parallel with our potential commercialization of elafibranor, we also plan to seek U.S. Food and Drug Administration, or FDA, marketing authorization of our IVD test. During the regulatory development process for elafibranor and our IVD test, our expenses could increase if we are required by the FDA or the European Medicines Agency, or EMA, to perform studies or trials in addition to those currently expected, or if there are any delays in completing our clinical trials or the development of any of our product candidates. We also anticipate that we will continue to increase our product development, scientific, commercial and administrative personnel significantly and expand our facilities and infrastructure in the United States, France and other countries as part of our longer-term growth strategy.

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Our ability to be profitable in the future will depend on our ability to obtain marketing approval for and commercialize our product candidates, particularly our lead product candidate, elafibranor.

        Our ability to be profitable in the future will depend on our ability to obtain marketing approval for and commercialize our product candidates, particularly our lead product candidate, elafibranor. We may not be successful in our efforts to obtain such approval and to commercialize our products. Obtaining marketing approval will require us to be successful in a range of challenging activities, including:

    obtaining positive results in our pivotal Phase 3 RESOLVE-IT trial for elafibranor in NASH and our other trials of elafibranor in PBC;

    regulatory bodies determining that our Phase 3 clinical data in NASH are sufficient, without further clinical data, to support an application for approval, whether or not conditional or accelerated;

    obtaining approval to market elafibranor for the treatment of NASH, PBC and other indications and patient populations;

    obtaining positive results in our formal validation studies required to commercialize our IVD test;

    expanding our manufacturing of commercial supply for elafibranor;

    establishing sales, marketing and distribution capabilities to effectively market and sell elafibranor in the United States, Europe and in other territories;

    market acceptance by patients and the medical community of elafibranor;

    market acceptance by patients and the medical community of our IVD test as a diagnostic complement to liver biopsy;

    negotiating and securing coverage and adequate reimbursement from third-party payors for elafibranor and our IVD test; and

    expanding our contract manufacturing for the commercial supply of elafibranor.

        We are conducting pre-commercial activities, such as patient profiling, intended to better understand how physicians care for NASH patients. NASH is a disease with no approved drug therapy. As such, there is significant uncertainty in the degree of market acceptance elafibranor will have among NASH patients and their healthcare providers as well as third-party payors. Even if we receive marketing approvals for elafibranor to treat NASH and commence our commercial launch, we may not be able to generate significant revenues in the near term. We cannot foresee if elafibranor will ever be accepted as a therapy in NASH eventually resulting in sustained revenues and it may take the passage of a significant amount of time to generate significant sustained revenues even if elafibranor becomes accepted as a therapy in NASH. NASH is currently an under-diagnosed disease, and we believe that our non-invasive IVD test will facilitate the diagnosis and identification of NASH patients who may be well suited for drug therapy. If our IVD test does not obtain marketing authorization, we may not be able to reach enough NASH patients to successfully generate significant revenues.

        If elafibranor, our IVD test or any of our other product candidates fails in clinical trials or does not gain regulatory approval, or if elafibranor, our IVD test or any of our other product candidates do not achieve market acceptance, we may never become profitable. Our net losses have had, and will continue to have, an adverse effect on our shareholders' equity and working capital. Because of the numerous risks and uncertainties associated with pharmaceutical and diagnostic product development and commercialization, we are unable to accurately predict the timing or amount of increased expenses

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or when, or if, we will be able to achieve profitability. The amount of future net losses will depend, in part, on the rate of future growth of our expenses and our ability to generate revenues.

We will require substantial additional funding to commercialize our products, if approved, which may not be available to us on acceptable terms, or at all, and, if not so available, may require us to delay, limit, reduce or cease our operations.

        We are currently advancing elafibranor through clinical development for multiple indications and other drug candidates through preclinical development. Additionally, we are also planning formal validation studies of our IVD test in preparation for submitting the test for marketing authorization. Developing pharmaceutical and diagnostic products, including conducting preclinical studies and clinical trials, along with obtaining necessary validation, is expensive.

        Subject to obtaining regulatory approval of any of our drug candidates or our IVD test, we expect to incur significant commercialization expenses for product sales, marketing, manufacturing and distribution. We anticipate incurring significant expenses as we prepare for the potential commercialization of elafibranor in NASH, including significant expenses relating to our sales, marketing and distribution capabilities and increasing our drug manufacturing activities. We also anticipate incurring significant expenses in connection with our planned commercialization of our IVD test, along with an increase in our product development, scientific, commercial and administrative personnel and expansion of our facilities and infrastructure in the United States, France and other countries. We also expect to incur additional costs associated with operating as a public company in the United States and further plan on expanding our operations in the United States, Europe and in other territories. We will continue to require substantial additional capital in connection with our continuing operations, including continuing our clinical development and pre-commercialization activities. Because successful development of our drug candidates and diagnostic program are uncertain, we are unable to estimate the actual funds required to complete the research and development and commercialization of our products under development.

The terms of our convertible bonds require us to meet certain operating covenants, and if we fail to comply with those covenants the bondholders would be able to accelerate our repayment obligations. Additionally, the conversion of some or all of our bonds into ordinary shares would dilute the ownership interests of existing shareholders.

        In October 2017, we issued bonds convertible and/or exchangeable into new and/or existing ordinary shares due October 16, 2022, for a nominal amount of €180.0 million, or 6,081,081 bonds that would convert into 6,081,081 new ordinary shares if such bonds were settled into new ordinary shares in the event of conversion. The bonds bear interest at a nominal rate of 3.5% payable semi-annually in arrears on April 16 and October 16 of each year with a first interest payment date of April 16, 2018. Our ability to repay the bonds at maturity depends in part on our future performance, which is subject to the success of our research and development programs and future operations, as well as on economic, financial and competitive factors that are beyond our control. In addition, we may incur additional debt in the future, some of which may be secured debt. Even if we are permitted by the terms and conditions of the convertible bonds to incur additional debt or to take other measures with regard to the incurrence of new debt, the terms of the bonds could reduce our ability to repay new debts at maturity.

        The agreement governing the bonds contains customary negative covenants and events of default. The negative covenants include restrictions on creating other liens on our assets, incurring certain additional indebtedness and engaging in certain mergers or acquisitions. If we default under the agreement governing the bonds, the bondholders may accelerate all of our repayment obligations, which would significantly harm our business and prospects and could cause the price of our ordinary shares to decline.

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        Finally, the conversion of some or all of our currently outstanding convertible bonds into ordinary shares would dilute the ownership interests of existing shareholders. Any sales in the public market of the ordinary shares issuable upon such conversion or any anticipated conversion of our convertible bonds into ordinary shares could adversely affect prevailing market prices of our ordinary shares.

Risks Related to the Discovery and Development of and Obtaining Regulatory Approval for Our Product Candidates

We cannot be certain that elafibranor or any of our other product candidates will receive regulatory approval, and without regulatory approval, we will not be able to market our product candidates.

        We are developing elafibranor in several clinical trials, including a pivotal Phase 3 clinical trial, RESOLVE-IT, for the treatment of NASH that, if successful, we believe could support regulatory approval, and a Phase 2 clinical trial for the treatment of PBC. In parallel, we are also developing our IVD test to identify patients with NASH who may be appropriate candidates for drug therapy. Our business currently depends substantially on the successful development and commercialization of elafibranor. Our ability to generate revenue related to product sales will depend on the successful development and regulatory approval of elafibranor for the treatment of NASH and other indications, our IVD test and our other product candidates.

        We currently have no products approved for sale and we cannot guarantee that we will ever have marketable products. The development of drug candidates and diagnostic tests and issues relating to their approval and marketing are subject to extensive 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 elafibranor for the treatment of NASH. While the fast track designation for elafibranor 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. Even if a drug is approved, the FDA or the EMA, 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 clinical trials or reporting as conditions of approval.

        Our RESOLVE-IT trial began in the first quarter of 2016 and is expected to enroll approximately 2,000 patients at approximately 270 sites throughout the world. Considering the importance of NASH in terms of public health, we can submit an NDA to the FDA for accelerated approval under Subpart H and to the EMA for conditional approval on the basis of an interim analysis of the surrogate endpoint in the first 1,000 patients after 72 weeks of treatment. In addition, we evaluated elafibranor for the treatment of PBC in a Phase 2 clinical trial and recently announced preliminary results. We cannot predict whether our ongoing or future trials and studies will be successful or whether regulators will agree with our conclusions regarding the preclinical studies and clinical trials we

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have conducted to date. In NASH, following discussion with the FDA, and based on elafibranor achieving, in our Phase 2b trial, resolution of NASH without worsening of fibrosis, which is the FDA-recommended primary endpoint for our Phase 3 trial, we elected to proceed to a Phase 3 study without conducting additional Phase 2 studies after not achieving statistical significance on our prespecified endpoints in our Phase 2b trial. We cannot predict whether regulators will agree with the conclusions from, or request additional clinical data following, our Phase 3 NASH study to support an application for marketing approval.

        Similarly, we will not be permitted to market our IVD test until it is authorized for marketing by the FDA in the United States and receives CE Mark approval in Europe. We have not submitted any marketing applications for our IVD test and, as with approval of our drug candidates, the process for obtaining marketing authorization of diagnostic candidates is lengthy, uncertain and expensive. We plan to initially offer our IVD test as an LDT for use in clinical research in order to provide additional evidence of its clinical utility. LDTs have generally been considered to be tests that are intended for clinical use and that are designed, manufactured and used within a single laboratory. There can be no assurance that FDA will continue to exercise enforcement discretion over LDTs, or that the FDA will agree with our characterization of the test as an LDT. Should the FDA not agree with our characterization of the IVD test as a LDT, the IVD test may be subject to additional regulatory requirements for clinical use including pre-market review and post-market regulatory requirements, and we may not be permitted to continue to market our test as an LDT pending clearance of the IVD. We may be subject to fines, penalties, and removal of the LDT from the market, which could further result in lost revenues, damage to our reputation, and delays in the validation of the IVD. In the United States, IVD tests are regulated as medical devices. The Federal Food, Drug, and Cosmetic Act, or the FDCA, and its implementing regulations, and other federal and state statutes and regulations govern, among other things, medical device design and development, preclinical and clinical testing, premarket clearance or approval, registration and listing, manufacturing, labeling, storage, advertising and promotion, sales and distribution, export and import, and post-market surveillance. To be commercially distributed in the United States, medical devices must receive from the FDA prior to marketing, unless subject to an exemption, approval of a premarket approval application, or PMA, for most Class III devices, clearance of a 510(k) premarket notification, or classification pursuant to a de novo submission. A clinical trial is almost always required to support a PMA application and is sometimes required for 510(k) clearance. All clinical studies of medical devices must be conducted in compliance with any applicable FDA and Institutional Review Board requirements.

        There can be no assurance that a diagnostic test will be classified as a Class II medical device, and even if it is, there can be no assurance that it will receive marketing authorization from the FDA.

        In parallel with the FDA approval process for our IVD test, we are progressing towards submitting a data package which would enable CE marking and associated marketing approval in key European markets during 2020. As with the United States approval process, the CE marking process in the European Economic Area, or the EEA, can be lengthy and expensive.

        Regulatory authorities in countries outside of the United States and Europe also have requirements for approval of drug candidates and diagnostics with which we must comply prior to marketing in those countries. Obtaining regulatory approval for marketing of a drug candidate or diagnostic in one country does not ensure that we will be able to obtain regulatory approval in any other country. In addition, delays in approvals or rejections of marketing applications in the United States, Europe or other countries may be based upon many factors, including regulatory requests for additional analyses, reports, data, preclinical studies and clinical trials, regulatory questions regarding different interpretations of data and results, changes in regulatory policy during the period of product development and the emergence of new information regarding our product candidates or other products. Also, regulatory approval for any of our product candidates may be withdrawn.

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        If we are unable to obtain approval from the FDA, the EMA or other regulatory agencies for elafibranor, our IVD test and our other product candidates, or if, subsequent to approval, we are unable to successfully commercialize elafibranor, our IVD test or our other product candidates, we will not be able to generate sufficient revenue to become profitable or to continue our operations.

We are developing our lead product candidate, elafibranor for the treatment of NASH, a condition for which no drug has yet been commercialized and for which there is little clinical experience. As a result, our development approach involves new endpoints and methodologies. There is risk that the outcome of our clinical trials will not be favorable or that, even if favorable, regulatory authorities may not find the results of our clinical trials to be sufficient for marketing approval.

        We are focused on developing therapeutics for the treatment of NASH, a disease for which there are currently no approved treatments. As a result, the design and conduct of clinical trials for these diseases and other indications we may pursue will be subject to increased risk.

        The FDA and EMA generally require two pivotal clinical trials to approve an NDA or MAA. Furthermore, for full approval of an NDA or MAA, the FDA or EMA, respectively, require a demonstration of efficacy based on a clinical benefit endpoint. The FDA can grant accelerated approval for a new drug if it complies with the following criteria: (1) it treats a serious condition, (2) it provides a meaningful advantage over available therapies and (3) it demonstrates an effect on an endpoint reasonably likely to predict clinical benefit. Our pivotal Phase 3 RESOLVE-IT clinical trial of elafibranor in NASH incorporates a surrogate endpoint that may serve as the basis for an NDA filing for accelerated approval by the FDA in the United States and conditional approval by the EMA in Europe.

        Similarly, the EMA may give a positive opinion for conditional marketing authorization based on interim clinical data for a medicinal product for human use if (1) the risk-benefit balance of the product is positive, (2) it is likely that the applicant will be in a position to provide the required comprehensive clinical trial data, (3) unmet medical needs will be fulfilled and (4) the benefit to public health of the immediate availability on the market of the medicinal product outweighs the risk inherent in the fact that additional data are still required. Specific obligations, including with respect to the completion of ongoing or new studies, and with respect to the collection of pharmacovigilance data, may be specified in the conditional marketing authorization. Conditional marketing authorizations are valid for one year, and may be renewed annually, if the risk-benefit balance remains positive, and after an assessment of the need for additional or modified conditions.

        If the results of our interim cohort analysis in our pivotal Phase 3 RESOLVE-IT clinical trial are positive, the FDA may grant accelerated approval, and the EMA may grant conditional approval, for elafibranor in the treatment of NASH. However, there can be no assurance that our interim results will be positive and even if results from our interim results are highly significant and we believe reasonably likely to predict clinical benefit, the FDA and EMA may not accept the results of such trial as sufficiently significant to grant accelerated or conditional approval of elafibranor for NASH, without obtaining additional clinical data. In addition, even if we obtain accelerated or conditional marketing approval for our product candidate, elafibranor in NASH on the basis of an interim analysis, like all companies using the Subpart H and conditional approval pathway, we must continue the RESOLVE-IT trial post-marketing in order to demonstrate the efficacy of elafibranor on clinical benefit based on a composite endpoint of clinical outcomes, which include all-cause mortality, the progression to cirrhosis, and a full list of cirrhosis-related events such as liver transplantation, Model for End-Stage Liver Disease, or MELD score ³15, and hepatocellular carcinoma, or HCC, on the full trial population, with the goal of obtaining full marketing approval. Depending on the outcome, the FDA or EMA could revoke the previously granted approval, and additional clinical data to submit for marketing approval may be required.

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        Although we have obtained fast track designation from the FDA for elafibranor in the treatment of NASH, which permits more frequent contact between us and the FDA, the final acceptability of these regulatory pathways (accelerated or conditional approval) for elafibranor for the treatment of NASH will depend upon the clinical results from the RESOLVE-IT trial and the review by the FDA and EMA of our applications. As a result, we may face difficulty in designing an acceptable registration strategy around RESOLVE-IT or any other trials in different subpopulations of NASH patients. It may be expensive and time consuming to conduct and complete additional preclinical studies and clinical trials that the FDA, EMA and other regulatory authorities may require us to perform. As such, any requirement by the FDA, EMA or other regulatory authorities that we conduct additional preclinical studies or clinical trials could materially and adversely affect our business, financial condition and results of operations. Furthermore, even if we receive regulatory approval of elafibranor for the treatment of NASH, the labeling for our product candidates in the United States, Europe or other countries in which we have received or seek approval may include limitations that could impact the commercial success of our product candidates.

        Additionally, the successful commercialization of elafibranor depends in part on our ability to obtain regulatory approval to market our IVD test. NASH is currently an under-diagnosed disease, and we believe that our non-invasive IVD test will reduce barriers to entry for elafibranor by facilitating the diagnosis and identification of NASH patients who may be well suited for drug therapy. If our IVD test does not obtain marketing authorization, we may not be able to generate significant revenues even if such diagnostic were to be marketed as a laboratory developed test, or LDT.

We have obtained fast track designation from the FDA for elafibranor in the treatment of NASH and we may seek to avail ourselves of such mechanisms to expedite the development or approval of our other drug candidates in the future, but such mechanisms may not actually lead to a faster development or regulatory review or approval process.

        In 2014, the FDA granted fast track designation for elafibranor in the treatment of NASH. We may also seek fast track designation for our other drug candidates, and we may seek priority review or accelerated approval for elafibranor or any other drug candidate we may pursue in the future. The FDA's fast track program is designed to facilitate the development and expedite the review of new drugs that are intended to treat serious or life-threatening conditions, and that demonstrate the potential to address unmet medical needs. The fast track designation for elafibranor in NASH permits more frequent contact between us and the FDA. Even though elafibranor has received fast track designation for the treatment of NASH, and even if we do obtain fast track or priority review designation or pursue an accelerated approval pathway in elafibranor or our other drug candidates in the future, we may not experience a faster development process, review or approval compared to conventional FDA procedures. Additionally, the FDA may withdraw a particular designation, including our fast track designation for the development of elafibranor in the treatment of NASH, if it believes that the designation is no longer supported by data from our clinical development program.

A breakthrough therapy designation by the FDA for a drug candidate may not lead to a faster development or regulatory review or approval process, and it may not increase the likelihood that a drug candidate will receive marketing approval.

        We may seek a breakthrough therapy designation for elafibranor in PBC or any other drug candidate we may pursue in the future. A breakthrough therapy is defined as a drug that is intended, alone or in combination with one or more other drugs, to treat a serious or life-threatening disease or condition, and preliminary clinical evidence indicates that the drug may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints. For drugs that are designated as breakthrough therapies, interaction and communication between the FDA and the

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sponsor can help to identify the most efficient path for clinical development while minimizing the number of patients placed in ineffective control regimens.

        Designation as a breakthrough therapy is within the discretion of the FDA. Accordingly, even if we believe a drug candidate meets the criteria for designation as a breakthrough therapy, the FDA may disagree and instead determine not to make such designation. In any event, the receipt of a breakthrough therapy designation for a drug candidate may not result in a faster development process, review or approval compared to conventional FDA procedures and does not assure ultimate approval by the FDA. In addition, even if one or more drug candidate qualifies as a breakthrough therapy, the FDA may later decide that the product no longer meets the conditions for qualification or decide that the time period for FDA review or approval will not be shortened.

If the FDA does not conclude that certain of our product candidates satisfy the requirements for the Section 505(b)(2) regulatory approval pathway, or if the requirements for such product candidates under Section 505(b)(2) are not as we expect, the approval pathway for those product candidates may likely take significantly longer, cost significantly more and entail significantly greater complications and risks than anticipated, and in either case may not be successful.

        We are currently conducting a clinical-stage program based on drug repositioning to develop an anti-fibrotic drug candidate, nitazoxanide, or NTZ, for which we may seek FDA approval through the Section 505(b)(2) regulatory pathway. The Drug Price Competition and Patent Term Restoration Act of 1984, also known as the Hatch-Waxman Act, added Section 505(b)(2) to the FDCA. Section 505(b)(2) permits the filing of an NDA where at least some of the information required for approval comes from trials that were not conducted by or for the applicant and for which the applicant has not obtained a right of reference. Section 505(b)(2), if applicable to us under the FDCA, would allow an NDA we submit to the FDA to rely in part on data in the public domain or the FDA's prior conclusions regarding the safety and effectiveness of approved compounds, which could expedite the development program for our product candidates by potentially decreasing the amount of clinical data that we would need to generate in order to obtain FDA approval. The Phase 2 clinical trial of NTZ in NASH-induced fibrosis was allowed on the basis of the existing FDA evaluations of safety in the currently-approved indication, which is a hallmark of the Section 505(b)(2) regulatory pathway. As we progress the clinical program, we plan to initiate such discussions with the FDA. If the FDA does not allow us to pursue the Section 505(b)(2) regulatory pathway as we anticipated, we may need to conduct additional clinical trials, provide additional data and information and meet additional standards for regulatory approval. Even if we are allowed to pursue the Section 505(b)(2) regulatory pathway, we cannot assure you that our product candidates will receive the requisite approvals for commercialization.

        In addition, the pharmaceutical industry is highly competitive, and Section 505(b)(2) NDAs are subject to special requirements designed to protect the patent rights of sponsors of previously approved drugs that are referenced in a Section 505(b)(2) NDA. These requirements may give rise to patent litigation and mandatory delays in approval of our NDAs for up to 30 months or longer depending on the outcome of any litigation. It is not uncommon for a manufacturer of an approved product to file a citizen petition with the FDA seeking to delay approval of, or impose additional approval requirements for, pending competing products. If successful, such petitions can significantly delay, or even prevent, the approval of the new product. However, even if the FDA ultimately denies such a petition, the FDA may substantially delay approval while it considers and responds to the petition. In addition, even if we are able to utilize the Section 505(b)(2) regulatory pathway, there is no guarantee this would ultimately lead to accelerated product development or earlier approval.

        Moreover, even if our product candidates are approved under Section 505(b)(2), the approval may be subject to limitations on the indicated uses for which the products may be marketed or to other conditions of approval, or may contain requirements for costly post-marketing testing and surveillance to monitor the safety or efficacy of the products.

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Delays in the commencement, enrollment and completion of clinical trials could result in increased costs to us and delay or limit our ability to obtain regulatory approval for elafibranor and our other product candidates.

        Delays in the commencement, enrollment and completion of clinical trials could increase our product development costs or limit the regulatory approval of our drug candidates and IVD test. We currently have underway a number of trials including our pivotal Phase 3 RESOLVE-IT clinical study of elafibranor in NASH. We may also be required to conduct additional clinical trials of elafibranor, our other drug candidates or our IVD test. In the past, we have experienced some delays in enrollment in our clinical trials. We continue to work towards expanding our overall elafibranor development program with additional trials and studies, including in pediatric patients, and we plan on conducting additional development activities in other diseases. The results from these trials may not be available when we expect or we may be required to conduct additional clinical trials or preclinical studies not currently planned to receive approval for elafibranor as a treatment for the relevant indication. In addition, our clinical programs are subject to a number of variables and contingencies, such as the results of other trials, patient enrollments or regulatory interactions that may result in a change in timing. As such, we do not know whether any future trials or studies in elafibranor or our other product candidates will begin on time or will be completed on schedule, if at all.

        The commencement, enrollment and completion of clinical trials can be delayed or suspended for a variety of reasons, including:

    inability to demonstrate sufficient safety and efficacy to obtain regulatory approval to commence a clinical trial;

    inability to validate test methods to support quality testing of the drug substance and drug product;

    inability to determine dosing and clinical trial design;

    inability to obtain sufficient funds required for a clinical trial or lack of adequate funding to continue the clinical trial due to unforeseen costs or other business decisions;

    our inability to enter into collaborations relating to the development and commercialization of our product candidates;

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

    clinical holds, other regulatory objections to commencing or continuing a clinical trial or the inability to obtain regulatory approval to commence a clinical trial in countries that require such approvals;

    discussions with the FDA, EMA or other non-U.S. regulators regarding the scope or design of our clinical trials, which may occur at various times, including subsequent to the initiation of the clinical trial;

    governmental or regulatory delays and changes in regulatory requirements, policy and guidelines, including mandated changes in the scope or design of clinical trials or requests for supplemental information with respect to clinical trial results;

    varying interpretations of our data, and regulatory commitments and requirements by the FDA, EMA and similar regulatory agencies;

    inability to identify and maintain a sufficient number of trial sites, many of which may already be engaged in other clinical trial programs, including some that may be for the same indications targeted by our product candidates;

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    the delay in receiving results from or the failure to achieve the necessary results in other clinical trials;

    inability to obtain approval from institutional review boards, or IRBs, to conduct a clinical trial at their respective sites;

    lack of effectiveness of product candidates during clinical trials;

    suspension or termination by a data and safety monitoring board, or DSMB, that is overseeing the clinical trial;

    changes in the standard of care on which a clinical development plan was based, which may require new or additional trials;

    our failure to conduct clinical trials in accordance with regulatory requirements;

    severe or unexpected drug-related adverse effects experienced by patients or any determination that a clinical trial presents unacceptable health risks;

    a breach of the terms of any agreement with, or for any other reason by, current or future collaborators that have responsibility for the clinical development of any of our product candidates, or investigators leading clinical trials on our product candidates;

    inability to timely manufacture or deliver sufficient quantities of the product candidate required for preclinical studies or clinical trials;

    difficulty identifying, recruiting and enrolling patients to participate in clinical trials for a variety of reasons, including meeting the enrollment criteria for our trial, the rarity of the disease or condition, the rarity of the characteristics of the population being studied, the nature of the protocol, the risks of procedures that may be required as part of the trial, such as a liver biopsy, the availability of effective treatments for the relevant disease and the eligibility criteria for the clinical trial, and competition from other clinical trial programs for the same indications as our product candidates; and

    inability to retain enrolled patients after a clinical trial is underway.

        For example, our RESOLVE-IT trial is a large and complex Phase 3 clinical trial in 2,000 patients, in a disease without any approved therapies and the diagnosis of which generally involves invasive procedures such as liver biopsies. Additionally, there are a number of companies developing product candidates for the treatment of NASH, and, as a result, there may be increased competition for enrolling patients in clinical trials involving the treatment of NASH. Furthermore, if one of our competitors' products is approved by the FDA or another regulatory body for the treatment of NASH before elafibranor is approved, we may experience difficulties enrolling patients in our clinical trials and retaining patients in any of our existing clinical trials. While we announced the completion of enrollment of the first approximately 1,000 patients in the interim analysis cohort in April 2018, and continuously evaluate and implement a variety of options to complete enrollment as quickly as possible, there can be no assurance that we will be able to enroll and retain a sufficient number of patients or complete the interim analysis and trial on a timely basis. As we engage in other large and complicated trials and trials in advanced disease populations, we may experience a number of complications that may negatively affect our plans or our development programs.

        While we have not had difficulties in the past retaining patients after enrollment in our clinical trials, changes in the treatment of NASH, such as the approval of a drug therapy for the treatment of NASH by one of our competitors, could result in difficulties retaining or enrolling patients in our clinical trials. Any difficulty retaining patients may in the future delay or produce negative or inconclusive results from our clinical trials, and we or our collaborators may decide, or regulators may require us, to conduct additional clinical trials or preclinical studies. Any delay or compromises with respect to the validity of our clinical trials may have a material adverse effect on our business or decrease our competitive position relative to other biotechnology or pharmaceutical companies.

        In addition, if we are required to conduct additional clinical trials or other preclinical studies of our product candidates beyond those contemplated, our ability to obtain regulatory approval of these product candidates and generate revenue from their sales would be similarly harmed.

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Clinical failure can occur at any stage of clinical development. The results of earlier clinical trials are not necessarily predictive of future results and any product candidate we or our potential future collaborators advance through clinical trials may not have favorable results in later clinical trials or receive regulatory approval.

        Clinical failure can occur at any stage of our clinical development. Clinical trials may produce negative or inconclusive results, and we may decide, or regulators may require us, to conduct additional clinical trials or preclinical studies. 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. Success in preclinical studies and early clinical trials does not ensure that subsequent clinical trials will generate the same or similar results or otherwise provide adequate data to demonstrate the efficacy and safety of a product candidate. A number of companies in the pharmaceutical industry, including those with greater resources and experience than us, have suffered significant setbacks in Phase 3 clinical trials and at other stages of clinical development, even after seeing promising results in earlier clinical trials.

        Although our Phase 2b clinical trial of elafibranor in NASH, GOLDEN-505, achieved resolution of NASH without worsening of fibrosis, which is the FDA-recommended primary endpoint of our ongoing Phase 3 RESOLVE-IT clinical trial, this was not the original endpoint for our Phase 2b trial. Despite the results of our retrospective analysis of the Phase 2b results to correct for baseline severity and site heterogeneity by a standardized statistical analysis, we cannot assure you that our RESOLVE-IT trial will achieve positive results with this Phase 3 endpoint, and regulators may request additional clinical data to support regulatory approval.

        In addition, the design of a clinical trial can determine whether its results will support approval of a product and flaws in the design of a clinical trial may not become apparent until the clinical trial is well-advanced. We may be unable to design and execute a clinical trial to support regulatory approval. Further, clinical trials of potential products often reveal that it is not practical or feasible to continue development efforts. If elafibranor or our other product candidates are found to be unsafe or lack efficacy for any indication, we will not be able to obtain regulatory approval for them, and our prospects and business may be materially and adversely affected.

        If elafibranor or our other product candidates are found to be unsafe or lack efficacy, we will not be able to obtain regulatory approval for them and our business would be harmed. For example, if the results of our Phase 3 RESOLVE-IT trial of elafibranor do not achieve the primary efficacy endpoints or demonstrate expected safety, the prospects for approval of elafibranor would be materially and adversely affected.

        In some instances, 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 or differences in trial protocols, patient distribution by clinical investor site, standards of care across sites, 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. We do not know whether any Phase 2, Phase 3 or other clinical trials we or any of our collaborators may conduct will demonstrate consistent or adequate efficacy and safety to obtain regulatory approval to market our product candidates. If we are unable to bring any of our current or future product candidates to market, or to acquire any marketed, previously approved products, our ability to create long-term shareholder value will be limited.

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Changes in regulatory requirements, guidance from regulatory authorities or unanticipated events during our clinical trials of our product candidates could necessitate changes to clinical trial protocols or additional clinical trial requirements, which would result in increased costs to us and could delay our development timeline.

        Changes in regulatory requirements, FDA guidance or guidance from the EMA or other European or foreign regulatory authorities, or unanticipated events during our clinical trials, may force us to amend clinical trial protocols or to otherwise alter the regulatory approval or clearance process and timeline for our drug candidates and/or our IVD test. Regulatory authorities could also impose additional clinical trial requirements. Amendments to our clinical trial protocols would require resubmission to the FDA, EMA, national clinical trial regulators and IRBs for review and approval, which may adversely impact the cost, timing or successful completion of a clinical trial. If we experience delays completing, or if we terminate, any of our clinical trials, or if we are required to conduct additional clinical trials, the commercial prospects for our product candidates may be harmed and our ability to generate product revenue will be delayed.

We depend on third-party contractors for a substantial portion of our operations and may not be able to control their work as effectively as if we performed these functions ourselves.

        Under our supervision, we outsource substantial portions of our operations to third-party service providers, including preclinical studies and clinical trials, collection and analysis of data and manufacturing of our drug candidates and IVD test. In particular, we subcontract the design and/or conduct of our clinical trials to CROs, as well as the manufacturing of our active ingredients and therapeutic units to contract manufacturing organizations, or CMOs, especially with regard to our Phase 3 RESOLVE-IT trial. We also contract with external investigators and other specialized services providers, for example with respect to certain statistical analyses, to perform services such as carrying out and supervising, and collecting, analyzing and formatting of data for our trials. Although we are involved in the design of the protocols for these trials and in monitoring them, we do not control all the stages of test performance and cannot guarantee that the third parties will fulfill their contractual and regulatory obligations. In particular, a contractor's failure to comply with protocols or regulatory constraints, or repeated delays by a contractor, could compromise the development of our products or result in liability for us. Such events could also inflate the product development costs borne by us.

        This strategy means that we do not directly control certain key aspects of our product development, such as:

    the quality of the product manufactured;

    the delivery times for therapeutic units (pre-packaged lots specifically labeled for a given clinical trial);

    the clinical and commercial quantities that can be supplied; and

    compliance with applicable laws and regulations.

        Additionally, our development activities or clinical trials conducted in reliance on third parties may be delayed, suspended, or terminated if:

    the third parties do not devote a sufficient amount of time or effort to our activities or otherwise fail to successfully carry out their contractual duties or to meet regulatory obligations or expected deadlines;

    we replace a third party; or

    the quality or accuracy of the data obtained by third parties is compromised due to their failure to adhere to clinical protocols, regulatory requirements, or for other reasons.

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        We generally would not have the ability to control the performance of third parties in their conduct of development activities. In the event of a default, bankruptcy or shutdown of, or a dispute with, a third party, we may be unable to enter into a new agreement with another third party on commercially acceptable terms. Further, third-party performance failures may increase our development costs, delay our ability to obtain regulatory approval, and delay or prevent the commercialization of our product candidates. In addition, our third-party agreements usually contain a clause limiting such third party's liability, such that we may not be able to obtain full compensation for any losses we may incur in connection with the third party's performance failures. While we believe that there are numerous alternative sources to provide these services, in the event that we seek such alternative sources, we may not be able to enter into replacement arrangements without incurring delays or additional costs.

We rely entirely on third parties for the manufacturing of our drug candidates and IVD test for preclinical studies and clinical trials, including one manufacturer for the active ingredient in elafibranor and another manufacturer for the therapeutic units of elafibranor used in our clinical trials. Our business could be harmed if those third parties fail to provide us with sufficient quantities of drug product, or fail to do so at acceptable quality levels or prices.

        We do not intend to manufacture the drug products or IVD test that we plan to sell. We currently have agreements with a contract manufacturer for the production of the active pharmaceutical ingredients and the formulation of sufficient quantities of drug product for our preclinical studies and clinical trials that we plan to conduct prior to and after seeking regulatory approval. We rely on one supplier for the active ingredient in elafibranor and another manufacturer for the therapeutic units of elafibranor used in our clinical trials. If either of those contract manufacturers should cease to provide services to us for any reason, we likely would experience delays in advancing our clinical trials while we identify and qualify one or more replacement suppliers and we may be unable to obtain replacement supplies on terms that are favorable to us.

        While we believe that our current inventory and drugs in production at various levels of the production chain are sufficient for our needs on a short-term basis, a failure at both of the storage sites of the therapeutic units used for the RESOLVE-IT study would be critical. We are also in the process of qualifying one or more back-up suppliers for our active ingredient and therapeutic units; however, we may not be able to enter into additional long-term commercial supply agreements for elafibranor with other third-party manufacturers on terms sufficiently advantageous to us. We do not have agreements for long-term supplies of any of our other product candidates. We currently obtain these supplies and services from our third-party contract manufacturers on a purchase order basis.

        Additionally, the facilities used by any contract manufacturer to manufacture elafibranor or any of our other product candidates must be the subject of a satisfactory inspection before the FDA, the EMA or the regulators in other jurisdictions that approve the product candidate manufactured at that facility. We are completely dependent on these third-party manufacturers for compliance with the requirements of U.S. and non-U.S. regulators for the manufacture of our finished products. If our manufacturers cannot successfully manufacture material that conform to our specifications and current good manufacturing practice requirements of any governmental agency whose jurisdiction to which we are subject, our products or product candidates will not be approved or, if already approved, may be subject to recalls or other enforcement action.

        Reliance on third-party manufacturers entails risks to which we would not be subject if we manufactured the products or product candidates, including:

    the possibility that we are unable to enter into or renew a manufacturing agreement with a third party to manufacture elafibranor or our product candidates;

    the possible breach of the manufacturing agreements by the third parties because of factors beyond our control; and

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    the possibility of termination or nonrenewal of the agreements by the third parties before we are able to arrange for a qualified replacement third-party manufacturer.

        Any of these factors could cause the delay of approval or disruption of commercialization of our products or product candidates, cause us to incur higher costs, prevent us from commercializing our products and product candidates successfully or disrupt the supply of our products after commercial launch. Furthermore, if any of our contract manufacturers fail to deliver the required commercial quantities of finished product on acceptable commercial terms and we are unable to find one or more replacement manufacturers capable of production at substantially equivalent cost, volume and quality and on a timely basis, we would likely be unable to meet demand for our products and could lose potential revenue. It may take several years to establish an alternative source of supply and to have any such new source approved by the government agencies that regulate our products.

We have entered, and may in the future enter into, collaboration agreements with third parties for the development and eventual commercialization of our product candidates, which may affect our ability to generate revenues.

        We have limited experience in product development and may seek to enter into collaborations with third parties for the development and potential commercialization of our early stage and preclinical product candidates, particularly those candidates outside of our main therapeutic areas of interest. In January 2019, we entered into a license agreement with LabCorp to allow them to deploy our IVD test in the clinical research space. Should we seek to collaborate with additional third parties with respect to our development programs, we may not be able to locate a suitable collaborator and may not be able to enter into an agreement on commercially reasonable terms or at all. Even if we succeed in securing collaborators for the development and commercialization of our product candidates, we have limited control over the amount and timing that our collaborators may dedicate to the development or commercialization of our product candidates. These collaborations pose a number of risks, including that the collaborators may:

    not have sufficient resources or decide not to devote the necessary resources due to internal constraints such as budget limitations, lack of human resources, or a change in strategic focus;

    believe our intellectual property is not valid or is unenforceable or the product candidate infringes on the intellectual property rights of others;

    dispute their responsibility to conduct development and commercialization activities pursuant to the applicable collaboration, including the payment of related costs or the division of any revenues;

    decide to pursue a competitive product developed outside of the collaboration arrangement;

    not be able to obtain, or believe they cannot obtain, the necessary regulatory approvals; or

    delay the development or commercialization of our product candidates in favor of developing or commercializing another party's product candidate.

        Thus, collaboration agreements may not lead to development or commercialization of product candidates in the most efficient manner or at all. For example, although we have entered into a license agreement with LabCorp to use our IVD test for clinical research purposes, LabCorp is under no obligation to do so and may choose not to further develop and deploy the test. There is no guarantee that our collaboration with LabCorp will result in widespread clinical or commercial use of our IVD test.

        Some collaboration agreements may be terminated without cause on short notice. Once a collaboration agreement is signed, it may not lead to commercialization of a product candidate. We also face competition in seeking out collaborators. If we are unable to secure new collaborations that

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achieve the collaborator's objectives and meet our expectations, we may be unable to advance our product candidates and may not generate meaningful revenues.

Due to our limited resources and access to capital, our strategic decisions with respect to the development of certain product candidates may affect the development or timing of our business prospects.

        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 elafibranor for the treatment of NASH and PBC, and the parallel development of our IVD test for identifying NASH patients who may be appropriate candidates for drug therapy. Our decisions concerning the allocation of research, collaboration, management and financial resources toward particular compounds, programs, product candidates or therapeutic areas may not lead to the development of viable commercial products and may divert resources away from more promising opportunities. We may not choose the right product candidates or programs to develop, or may be required to collaborate with third parties to advance a particular product candidate at terms that are less than optimal to us. If we make incorrect determinations regarding the market potential of our product candidates or misread trends in the pharmaceutical industry, our business prospects could be harmed.

Our product candidates may have undesirable side effects which may delay or prevent marketing approval, or, if approval is received, require our product candidates to be taken off the market, require them to include safety warnings or otherwise limit their sales.

        While we have not observed any significant side effects in our product candidates to date, unforeseen side effects from any of our product candidates could arise either during clinical development or, if approved, after the approved product has been marketed. If severe side effects were to occur, or if elafibranor or one of our other product candidates is shown to have other unexpected characteristics, we may need to either restrict our use of such product to a smaller population or abandon our development of elafibranor for NASH, PBC and other potential indications.

        In addition, our product candidates are being developed as potential treatments for severe, life-threatening diseases and, as a result, our trials will necessarily be conducted in a patient population that will be more prone than the general population to exhibit certain disease states or adverse events. For example, NASH patients may suffer from other co-morbidities such as diabetes, cardiovascular disease and obesity that may increase the likelihood of certain adverse events. It may be difficult to discern whether certain events or symptoms observed during our trials were due to our product candidates or some other factor, resulting in our company and our development programs being negatively affected even if such events or symptoms are ultimately determined to be unlikely related to our drugs and drug candidates. We further cannot assure you that additional or more severe adverse side effects with respect to elafibranor will not develop in future clinical trials or commercial use, which could delay or preclude regulatory approval of elafibranor or limit its commercial use.

        If we or others later identify undesirable or unacceptable side effects caused by our products or product candidates:

    regulatory authorities may require the addition of labeling statements, specific warnings, a contraindication or field alerts to physicians and pharmacies;

    we may be required to change instructions regarding the way the product is administered, conduct additional clinical trials or change the labeling of the product;

    we may be subject to limitations on how we may promote the product;

    sales of the product may decrease significantly;

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    regulatory authorities may require us to take our approved product off the market;

    we may be subject to litigation or product liability claims; and

    our reputation may suffer.

Risks Related to the Commercialization of Our Drug Candidates and Diagnostic Test

Even if we successfully complete clinical trials of our product candidates, those candidates may not be commercialized successfully for other reasons.

        Even if we successfully complete clinical trials for one or more of our product candidates and obtain relevant regulatory approvals or clearance, those candidates may not be commercialized for other reasons, including:

    being subject to proprietary rights held by others;

    failing to obtain or otherwise manufacture commercial supply of our approved products;

    failing to obtain clearance from regulatory authorities on the manufacturing of our products;

    failing to establish sales, marketing and distribution capabilities to effectively market and sell elafibranor and our IVD test in the United States, Europe and other territories;

    having adverse side effects that make their use less desirable;

    difficulties in negotiating and securing coverage and adequate reimbursement, or the failure to do so, from third-party payors for elafibranor, our IVD test or any of our other drug candidates, if approved or cleared;

    inability to secure market acceptance by patients and the medical community of elafibranor, our IVD test or any of our other drug candidates, if approved or cleared;

    failing to compete effectively with products or treatments commercialized by competitors; or

    failing to show that the long-term benefits of our products exceed their risks.

Even if approved, our product candidates may not achieve broad market acceptance among physicians, patients and healthcare payors, and as a result our revenues generated from their sales may be limited.

        The commercial success of elafibranor, our IVD test or our other drug candidates, if approved or cleared, will depend upon their acceptance among the medical community, including physicians, healthcare payors and patients. Given that no products are currently approved for the treatment of NASH, we do not know the degree to which elafibranor will be accepted as a therapy, if approved. There are, however, a number of products being developed by other companies for the treatment of NASH, and elafibranor may compete with these products for market acceptance in the future, if any of them are approved. Additionally, we cannot be assured that our IVD test will be accepted by the medical community as a means of identifying NASH patients who may be appropriate candidates for drug intervention, and even if our IVD test is used, a physician may still order a liver biopsy to confirm the diagnosis. The degree of market acceptance of elafibranor, our IVD test and any of our other drug candidates that may be approved will depend on a number of factors, including:

    changes in the standard of care or availability of alternative therapies at similar or lower costs for the targeted indications for any of our product candidates, such as competitors' product candidates for the treatment of NASH or an alternative to liver biopsy for the diagnosis of NASH;

    limitations in the approved clinical indications or patient populations for our product candidates;

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    demonstrated clinical safety and efficacy compared to other products;

    limitations or warnings, including boxed warnings, contained in our drug candidates' FDA- or EMA-approved labeling;

    in the case of elafibranor, our ability to access the under-diagnosed NASH market;

    lack of significant adverse side effects;

    sales, marketing and distribution support;

    availability of coverage and adequate reimbursement from managed care plans and other third-party payors;

    timing of market introduction and perceived effectiveness of competitive products;

    the degree of cost-effectiveness;

    availability of alternative therapies at similar or lower cost, including generics and over-the-counter products;

    the extent to which our product candidates are approved for inclusion on formularies of hospitals and managed care organizations;

    whether our drug candidates are designated under physician treatment guidelines for the treatment of the indications for which we have received regulatory approval;

    adverse publicity about our product candidates or favorable publicity about competitive products;

    convenience and ease of administration of our product candidates; and

    potential product liability claims.

        If our product candidates are approved, but do not achieve an adequate level of acceptance by physicians, patients, the medical community and healthcare payors, sufficient revenue may not be generated from these products and we may not become or remain profitable. In addition, efforts to educate the medical community and third-party payors on the benefits of our product candidates may require significant resources and may never be successful.

If we are unable to establish sales, marketing and distribution capabilities for our product candidates, whether it be via an internal infrastructure or an arrangement with a commercial partner, we may not be successful in commercializing those product candidates if and when they are approved.

        We have no sales, marketing or distribution experience and if we are unable to establish sales, marketing and distribution capabilities, we may not be successful in commercializing our product candidates if and when they are approved. To develop internal sales, distribution and marketing capabilities, we have already begun to invest significant amounts of financial and management resources, and we will continue to do so, even prior to any confirmation that elafibranor or any of our other product candidates will be approved. In particular, if elafibranor obtains marketing authorization in NASH and/or PBC, we may decide to market elafibranor in certain territories by ourselves, and/or market it in other territories in collaboration with one or more pharmaceutical partner and/or specialized local distributor. Additionally, in connection with the development of our IVD test, we entered into a license agreement with LabCorp to allow them to deploy the test in the clinical research space. If we decide to market any of our products ourselves, we would need to develop our own sales and marketing capabilities. For elafibranor or any other product candidates where we decide to

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perform sales, marketing and distribution functions ourselves or through third parties, we could face a number of additional risks, including:

    we or our third-party sales collaborators may not be able to attract and build an effective marketing or sales force;

    our sales personnel may be unable to obtain access to physicians or persuade adequate numbers of physicians to prescribe any future products;

    the cost of securing or establishing a marketing or sales force may exceed the revenues generated by any products; and

    our direct sales and marketing efforts may not be successful.

        If we are unable to establish our own sales, marketing and distribution capabilities and decide to enter into arrangements with third parties to perform these services, our revenue and our profitability, if any, are likely to be lower than if we were to sell, market and distribute any products that we develop ourselves. Additionally, such collaboration agreements with partners may limit our control over the marketing of our products and expose us to a number of risks, including the risk that the partner will not prioritize the marketing of the product candidate or diagnostic test candidate or does not provide sufficient resources for its commercialization.

We may form or seek strategic alliances or enter into licensing or co-marketing arrangements in the future to commercialize our approved drugs or diagnostic products, and we may not realize the benefits of such arrangements.

        We may enter into licensing arrangements with third parties that we believe will complement or augment our commercialization efforts, particularly with respect to elafibranor and our IVD test. For example, in January 2019, we entered into a license agreement with LabCorp to allow them to deploy our IVD test in the clinical research space. Any of these relationships may require us to incur non-recurring and other charges, increase our near and long-term expenditures, issue securities that dilute our existing shareholders or disrupt our management and business. Our likely collaborators include, in the case of elafibranor, large and mid-size pharmaceutical companies, regional and national pharmaceutical companies and biotechnology companies, or, in the case of our IVD test, a major global diagnostic company. If we enter into any such arrangements with any third parties, we will likely have limited control over the amount and timing of resources that our collaborators dedicate to the development or commercialization of elafibranor or any other product candidate. Our ability to generate revenues from these arrangements will depend on our collaborators' abilities to successfully perform the functions assigned to them in these arrangements. We cannot be certain that, following a strategic transaction or license, we will achieve the revenue or specific net income that justifies such transaction.

        Collaborations involving elafibranor, our IVD test or any of our other drug candidates pose the following risks to us:

    collaborators have significant discretion in determining the efforts and resources that they will apply to these collaborations;

    collaborators may not perform their obligations as expected;

    collaborators may not pursue commercialization or may elect not to continue or renew commercialization programs based on changes in the collaborator's strategic focus or available funding or external factors such as an acquisition that diverts resources or creates competing priorities;

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    collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with our product candidate if the collaborators believe that competitive products are more likely to be successfully commercialized under terms that are more economically attractive than ours;

    a collaborator with marketing and distribution rights to one or more product candidates may not commit sufficient resources to the marketing and distribution of any such product candidate;

    collaborators may not properly maintain or defend our intellectual property rights or may use our proprietary information in such a way as to invite litigation that could jeopardize or invalidate our proprietary information or expose us to potential litigation;

    collaborators may infringe the intellectual property rights of third parties, which may expose us to litigation and potential liability;

    disputes may arise between the collaborators and us that result in the delay or termination of the commercialization of our product candidate or that result in costly litigation or arbitration that diverts management attention and resources;

    we may lose certain valuable rights under circumstances identified in our collaborations, including if we undergo a change of control;

    collaborations may be terminated and, if terminated, may result in a need for additional capital to pursue further development or commercialization of the applicable product candidates;

    collaborators may learn about our discoveries and use this knowledge to compete with us in the future;

    there may be conflicts between different collaborators that could negatively affect those collaborations and potentially others;

    the number and type of our collaborations could adversely affect our attractiveness to future collaborators or acquirers;

    collaboration agreements may not lead to commercialization of our product candidate in the most efficient manner or at all. If a present or future collaborator of ours were to be involved in a business combination, the continued pursuit and emphasis on our commercialization program under such collaboration could be delayed, diminished or terminated; and

    collaborators may be unable to obtain the necessary marketing approvals.

        If future collaboration partners fail to develop or effectively commercialize elafibranor, our IVD test or any other drug candidate for any of these reasons, such product candidate may not be cleared for sale and our sales of such product candidate, if approved, may be limited, which would have an adverse effect on our operating results and financial condition.

Any of our product candidates for which we obtain marketing approval will be subject to ongoing regulation and could be subject to post-marketing restrictions or withdrawal from the market. Furthermore, we may be subject to substantial penalties if we fail to comply with regulatory requirements or experience unanticipated problems with our products following approval.

        Even if we receive regulatory approval for a product candidate, this approval may carry conditions that limit the market for the product or put the product at a competitive disadvantage relative to alternative therapies. For instance, a regulatory approval may limit the indicated uses for which we can market a product or the patient population that may utilize the product, or may be required to carry a warning, such as a boxed warning, in its labeling and on its packaging. Products with boxed warnings are subject to more restrictive advertising regulations than products without such warnings. These restrictions could make it more difficult to market any product candidate effectively.

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        Additionally, any of our product candidates for which we obtain marketing approval, as well as the manufacturing processes, post-approval studies and measures, labeling, advertising and promotional activities for such products, among other things, will be subject to continual requirements of and review by the EMA, FDA and other regulatory authorities. These requirements include submissions of safety and other post-marketing information and reports, registration and listing requirements, requirements relating to manufacturing, quality control, quality assurance and corresponding maintenance of records and documents, requirements regarding the distribution of samples to physicians and recordkeeping.

        Approved drugs that are manufactured or distributed in the United States pursuant to FDA approvals are subject to pervasive and continuing regulation by the EMA and the FDA, including, among other things, requirements relating to recordkeeping, periodic reporting, drug sampling and distribution, advertising and promotion and reporting of adverse experiences with the drug. After approval, most changes to the approved drug, such as adding new indications or other labeling claims and some manufacturing and supplier changes are subject to prior FDA review and approval. There also are continuing, annual program user fee requirements for marketed drugs, as well as new application fees for certain supplemental applications. Once approval is granted, the FDA may issue enforcement letters or withdraw the approval if compliance with regulatory requirements and standards is not maintained or if problems occur after the drug reaches the market. Corrective action could delay drug distribution and require significant time and financial expenditures. Later discovery of previously unknown problems with a drug, including adverse effects of unanticipated severity or frequency, or with manufacturing processes, or failure to comply with regulatory requirements, may result in revisions to the approved labeling to add new safety information; imposition of post-market studies or clinical trials to assess new safety risks; or imposition of distribution or other restrictions under a risk evaluation and mitigation strategy, or REMS. REMS can include medication guides, communication plans for healthcare professionals, and elements to assure safe use. Elements to assure safe use can include, but are not limited to, special training or certification for prescribing or dispensing, dispensing only under certain circumstances, special monitoring, and the use of patient registries. The requirement for a REMS can be costly to establish and can materially affect the potential market and profitability of the drug. In addition, even if we obtain accelerated or conditional marketing approval for our product candidate, elafibranor in NASH on the basis of an interim analysis, like all companies using the Subpart H and conditional approval pathway, we must continue the RESOLVE-IT trial post-marketing in order to demonstrate the efficacy of elafibranor on clinical benefit based on a composite endpoint of clinical outcomes. Depending on the outcome, the FDA or EMA could revoke the previously granted approval.

        Other potential consequences include, among other things:

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

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

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

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

    injunctions or the imposition of civil or criminal penalties.

        The FDA strictly regulates marketing, labeling, advertising and promotion of drugs that are placed on the market. Drugs may be promoted only for the approved indications and in accordance 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, and a company that is found to have improperly promoted off-label uses may be subject to significant liability, including civil, criminal and administrative penalties.

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        Similarly, if our IVD test is authorized for marketing in the United States, the test will be subject to quality system regulation, or QSR, labeling regulations, registration and listing, the Medical Device Reporting regulation which requires that manufacturers report to the FDA if their device may have caused or contributed to a death or serious injury or malfunctioned in a way that would likely cause or contribute to a death or serious injury if it were to recur and the Reports of Corrections and Removals regulation which requires manufacturers to report recalls and field actions to the FDA if initiated to reduce a risk to health posed by the device or to remedy a violation of the FDCA. The FDA enforces these requirements by inspection and market surveillance. If the FDA finds a violation, it can institute a wide variety of enforcement actions, ranging from an untitled or public warning letter to more severe sanctions such as fines, injunctions and civil penalties; recall or seizure of products; operating restrictions and partial suspension or total shutdown of production; refusing requests for 510(k) clearance or PMA approval of new products; withdrawing 510(k) clearance or PMAs already granted; and criminal prosecution.

        Accordingly, assuming we receive marketing approval for one or more of our product candidates, we and our collaborators will continue to expend time, money and effort in all areas of regulatory compliance.

Government restrictions on pricing and reimbursement, as well as other healthcare payor cost-containment initiatives, may negatively impact our ability to generate revenues even if we obtain regulatory approval to market a product.

        Our ability to successfully commercialize any of our product candidates, if approved, also will depend in part on the extent to which coverage and adequate reimbursement for these products and related treatments will be available from third-party payors, including government authorities, such as Medicare and Medicaid in the United States, private health insurers and health maintenance organizations. These third-party payors determine which medications they will cover and establish reimbursement levels. Assuming we obtain coverage for a given product by a third-party payor, the resulting reimbursement payment rates may not be adequate or may require co-payments that patients find unacceptably high. Patients who are prescribed medications for the treatment of their conditions, and their prescribing physicians, generally rely on third-party payors to reimburse all or part of the costs associated with their prescription drugs. Patients are unlikely to use our products unless coverage is provided and reimbursement is adequate to cover all or a significant portion of the cost of our products. Therefore, coverage and adequate reimbursement is critical to new product acceptance. Coverage decisions may depend upon clinical and economic standards that disfavor new drug products when more established or lower cost therapeutic alternatives are already available or subsequently become available.

        Third-party payors are developing increasingly sophisticated methods of controlling healthcare costs, such as by limiting coverage and the amount of reimbursement for particular medications. Increasingly, third-party payors are requiring that drug companies provide them with predetermined discounts from list prices as a condition of coverage, are using restrictive formularies and preferred drug lists to leverage greater discounts in competitive classes, and are challenging the prices charged for medical products. In addition, in the United States, federal programs impose penalties on drug manufacturers in the form of mandatory additional rebates and/or discounts if commercial prices increase at a rate greater than the Consumer Price Index-Urban, and these rebates and/or discounts, which can be substantial, may impact our ability to raise commercial prices. Further, no uniform policy requirement for coverage and reimbursement for drug products exists among third-party payors in the United States. Third-party payors often rely upon Medicare coverage policy and payment limitations in setting their own reimbursement rates, but also have their own methods and approval process apart from Medicare determinations. Therefore, coverage and reimbursement for drug products can differ significantly from payor to payor. As a result, the coverage determination process is often a

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time-consuming and costly process that will require us to provide scientific and clinical support for the use of our products to each payor separately, with no assurance that coverage and adequate reimbursement will be applied consistently or obtained in the first instance.

        The continuing efforts of third-party payors of healthcare costs to contain or reduce costs of healthcare may negatively affect our commercialization prospects, including:

    our ability to set a price we believe is fair for our products, if approved;

    our ability to obtain and maintain market acceptance by the medical community and patients;

    our ability to generate revenues and achieve profitability; and

    the availability of capital.

        Our ability to obtain an acceptable reimbursement rate for our drugs from third-party payors will be determined in the coming years, in particular at the end of the development of elafibranor in NASH, which is our most advanced drug candidate. We cannot be sure that coverage and reimbursement will be available for any potential product candidate that we may commercialize and, if reimbursement is available, what the level of reimbursement will be. Since no drug has yet been commercialized in NASH, we are currently working internally on market access and pricing, but cannot predict the conditions of elafibranor's future reimbursement. However, because negotiations with the payors are traditionally based on the results (intermediate, or otherwise) of Phase 3 clinical trials, which are not expected to be available for elafibranor in NASH before the end of 2019, as of the date of this prospectus, we have only had preliminary discussions with the organizations concerned. Coverage and reimbursement may impact the demand for, or the price of, any product candidate for which we obtain marketing approval. If coverage and reimbursement are not available or reimbursement is available only to limited levels, we may not successfully commercialize any product candidate for which we obtain marketing approval.

        In the United States, the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010, or collectively, ACA, is significantly impacting the provision of, and payment for, healthcare. With regard to pharmaceutical products specifically, the ACA, among other things, expanded and increased industry rebates for drugs covered under Medicaid programs and made changes to the coverage requirements under the Medicare prescription drug benefit. Some of the provisions of the ACA have yet to be implemented, and there have been judicial and Congressional challenges to certain aspects of the ACA, as well as recent efforts by the Trump administration to repeal or replace certain aspects of the ACA. Since January 2017, President Trump has signed two Executive Orders and other directives designed to delay the implementation of certain provisions of the ACA or otherwise circumvent some of the requirements for health insurance mandated by the ACA. On June 14, 2018, the U.S. Court of Appeals for the Federal Circuit ruled that the federal government was not required to pay more than $12 billion in ACA risk corridor payments to third-party payors who argued were owed to them. Plaintiffs were denied a rehearing, but retain the right to appeal to the U.S. Supreme Court. The effects of this gap in reimbursement on third-party payors, the viability of the ACA marketplace, providers, and potentially our business, are not yet known. In addition, the Centers for Medicare & Medicaid Services, or CMS, recently promulgated regulations that will give 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 ACA for plans sold through such marketplaces.

        Concurrently, Congress has considered legislation that would repeal or repeal and replace all or part of the ACA. While Congress has not passed comprehensive repeal legislation, it has enacted laws that modify certain provisions of the ACA, such as removing penalties, starting January 1, 2019, for not complying with the ACA's individual mandate to carry health insurance, delaying the implementation of certain ACA-mandated fees, and increasing the point-of-sale discount that is owed by pharmaceutical

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manufacturers who participate in Medicare Part D. On December 14, 2018, a U.S. District Court Judge in the Northern District of Texas, ruled that the individual mandate is a critical and inseverable feature of the ACA, and therefore, because it was repealed as part of the Tax Cuts and Jobs Act, the remaining provisions of the ACA are invalid as well. While the Texas U.S. District Court Judge, as well as the Trump Administration and CMS, have both stated that the ruling will have no immediate effect, it is unclear how this decision, subsequent appeals, if any, and other efforts to repeal and replace the ACA will impact the ACA and our business.

        In addition, both the Budget Control Act of 2011 and the American Taxpayer Relief Act of 2012 have instituted, among other things, mandatory reductions in Medicare payments to certain providers. Additional legislative proposals to reform healthcare and government insurance programs, along with the trend toward managed healthcare in the United States, could influence the purchase of medicines and reduce coverage and/or reimbursement of our product candidates, if approved.

        Moreover, recently, there has been heightened governmental scrutiny over the manner in which manufacturers set prices for their marketed products. Such scrutiny has resulted in several recent Congressional inquiries and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to drug pricing, review the relationship between pricing and manufacturer patient programs, reduce the costs of drugs under Medicare and reform government program reimbursement methodologies for drug products. Additionally, the Trump administration 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. Additionally, on January 31, 2019, Office of Inspector General of the U.S. Department of Health and Human Services proposed modifications to federal Anti-Kickback Statute safe harbors which, among other things, will affect rebates paid by manufacturers to Medicare Part D plans, the purpose of which is to further reduce the cost of drug products to consumers. While any proposed measures 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 are increasingly passing legislation and implementing 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.

        We expect that the ACA, as well as other healthcare reform measures that may be adopted in the future, at both the federal and state levels in the United States, as well as internationally, 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 candidate. 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. Moreover, we cannot predict what healthcare reform initiatives may be adopted in the future.

        In some non-U.S. countries, the proposed pricing for a drug must be approved before it may be lawfully marketed. In addition, in some non-U.S. markets, the pricing of prescription drugs is subject to government control and reimbursement may in some cases be unavailable. The requirements governing drug pricing vary widely from country to country. For example, the European Union provides options for its member states to restrict the range of medicinal products for which their national health insurance systems provide reimbursement and to control the prices of medicinal products for human use. A member state may approve a specific price for the medicinal product, may refuse to reimburse a product at the price set by the manufacturer or may instead adopt a system of direct or indirect controls on the profitability of the company placing the medicinal product on the market. There can be

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no assurance that any country that has price controls or reimbursement limitations for biopharmaceutical products will allow favorable reimbursement and pricing arrangements for elafibranor or any of our other product candidates that may be approved. Historically, biopharmaceutical products launched in the European Union do not follow price structures of the United States and generally tend to have significantly lower prices.

Failures to reimburse our IVD test, if commercialized, or changes in reimbursement rates by third-party payors and variances in reimbursement rates could materially and adversely affect our revenues and could result in significant fluctuations in our revenues.

        Our ability to commercialize our IVD test also will depend in part on the extent to which coverage and adequate reimbursement for this test will be available from third-party payors, such as government health administration authorities, private health insurers and other organizations. Insurance coverage and reimbursement rates for diagnostic tests are uncertain, subject to change and particularly volatile during the early stages of a newly commercialized diagnostic test. It is uncertain as to what extent third-party payors will provide coverage for our IVD test, if commercialized. We will also likely experience volatility in the coverage and reimbursement of the IVD test due to contract negotiation with third-party payors and implementation requirements. The reimbursement amounts we receive from third-party payors will vary from payor to payor, and, in some cases, the variation is material. Third-party payors have increased their efforts to control the cost, utilization and delivery of healthcare services. These measures have resulted in reduced payment rates and decreased utilization for the diagnostic test industry. From time to time, Congress has considered and implemented changes to the Medicare fee schedules in conjunction with budgetary legislation, and pricing for tests covered by Medicare is subject to change at any time. Reductions in the reimbursement rate provided by third-party payors may occur in the future. Reductions in the price at which our IVD test is reimbursed could have a material adverse effect on our revenues. If we and our collaborators are unable to establish and maintain broad coverage and adequate reimbursement for our IVD test or if third-party payors change their coverage or reimbursement policies with respect to the IVD test, our revenues could be materially and adversely affected.

Our future growth depends, in part, on our ability to penetrate international markets, where we would be subject to additional regulatory burdens and other risks and uncertainties.

        Our future profitability will depend on our ability to commercialize our product candidates in the United States, Europe and other territories around the world. If we commercialize our product candidates in international markets, we would be subject to additional risks and uncertainties, including:

    economic weakness, including inflation, or political instability in particular economies and markets;

    the burden of complying with complex and changing non-U.S. regulatory, tax, accounting and legal requirements, many of which vary between countries;

    different medical practices and customs in non-U.S. countries affecting acceptance in the marketplace;

    tariffs and trade barriers;

    other trade protection measures, import or export licensing requirements or other restrictive actions by U.S. or other governments;

    longer accounts receivable collection times;

    longer lead times for shipping;

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    compliance with tax, employment, immigration and labor laws for employees living or traveling abroad;

    workforce uncertainty in countries where labor unrest is common;

    language barriers for technical training;

    reduced protection of intellectual property rights in some countries outside the United States, and related prevalence of generic alternatives to therapeutics;

    foreign currency exchange rate fluctuations and currency controls;

    differing reimbursement landscapes globally;

    uncertain and potentially inadequate reimbursement of our products; and

    the interpretation of contractual provisions governed by laws outside the United States in the event of a contract dispute.

        Sales of our products outside the United States could also be adversely affected by the imposition of governmental controls, political and economic instability, trade restrictions and changes in tariffs.

Adverse market and economic conditions may exacerbate certain risks associated with commercializing our product candidates.

        Future sales of our product candidates, if they are approved, will be dependent on purchasing decisions of and reimbursement from government health administration authorities, distributors and other organizations. As a result of adverse conditions affecting the global economy and credit and financial markets, including disruptions due to political instability or otherwise, these organizations may defer purchases, may be unable to satisfy their purchasing or reimbursement obligations, or may delay payment for elafibranor or any of our product candidates that are approved for commercialization in the future. In addition, there have been concerns for the overall stability and suitability of the euro as a single currency given the economic and political challenges facing individual Eurozone countries. Continuing deterioration in the creditworthiness of Eurozone countries, the withdrawal of one or more member countries from the European Union, or the failure of the euro as a common European currency or an otherwise diminished value of the euro could materially and adversely affect our future product revenue from European sales of our products.

Risks Related to the Production and Manufacturing of Our Product Candidates

The manufacturing facilities of our third-party manufacturers are subject to significant government regulations and approvals. If our third-party manufacturers fail to comply with these regulations or maintain these approvals, our business will be materially harmed.

        We do not currently and do not intend in the future to manufacture the products we intend to sell. We outsource the manufacturing of our products to third parties, who are, in turn, subject to ongoing regulation and periodic inspection by the EMA, FDA and other regulatory bodies to ensure compliance with current Good Manufacturing Practices, or cGMP. Any failure to follow and document their adherence to such cGMP regulations or other regulatory requirements may lead to significant delays in the availability of products for commercial sale or clinical trials, may result in the termination of or a hold on a clinical trial, or may delay or prevent filing or approval of marketing applications for our products.

        Failure to comply with applicable regulations could also result in the EMA, FDA or other applicable regulatory authorities taking various actions, including:

    levying fines and other civil penalties;

    imposing consent decrees or injunctions;

    requiring us to suspend or put on hold one or more of our clinical trials;

    suspending or withdrawing regulatory approvals;

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    delaying or refusing to approve pending applications or supplements to approved applications;

    requiring us or our third-party manufacturers to suspend manufacturing activities or product sales, imports or exports;

    requiring us to communicate with physicians and other customers about concerns related to actual or potential safety, efficacy, and other issues involving our products;

    mandating product recalls or seizing products;

    imposing operating restrictions; and

    seeking criminal prosecutions.

        Any of the foregoing actions could be detrimental to our reputation, business, financial condition or operating results. Furthermore, our key suppliers may not continue to be in compliance with all applicable regulatory requirements, which could result in our failure to produce our products on a timely basis and in the required quantities, if at all. In addition, before any additional products would be considered for marketing approval in the United States, Europe or elsewhere, our suppliers will have to pass an audit by the applicable regulatory agencies. We are dependent on our suppliers' cooperation and ability to pass such audits, and the audits and any audit remediation may be costly. Failure to pass such audits by us or any of our suppliers would affect our ability to commercialize our product candidates in the United States, Europe or elsewhere.

Our production costs may be higher than we currently estimate.

        We contract to have our product candidates manufactured according to manufacturing best practices applicable to drugs for clinical trials and to specifications approved by the applicable regulatory authorities. If any of our products are found to be non-compliant, we would be required to have the product manufactured again, which would entail additional costs and may prevent delivery of the product to patients on time.

        Other risks inherent in the production process may have the same effect, such as:

    contamination of the controlled atmosphere area;

    unusable premises and equipment;

    new regulatory requirements requiring a partial and/or extended stop to the production unit to meet the requirements;

    unavailable qualified personnel;

    power failure of extended duration; and

    logistical error.

        In addition, a rise in the cost of raw material or in direct or indirect energy rates, a shortage of raw material used to make our product candidates may increase or stopped product manufacturing and increase logistical costs. Any of these risks, should they occur, could disrupt our activities and compromise our financial position, results, reputation or growth.

Risks Related to Our Operations

We may encounter difficulties in managing our growth, which could disrupt our operations.

        As of December 31, 2018, we had 148 full-time employees, and we expect to increase our number of employees and the scope of our operations. To manage our anticipated development and expansion, including the potential commercialization of our product candidates in Europe, the United States and

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other territories, we must continue to implement and improve our managerial, operational and financial systems, expand our facilities and continue to recruit and train additional qualified personnel. Also, our management may need to divert a disproportionate amount of its attention away from its day-to-day activities and devote a substantial amount of time to managing these development activities. Due to our limited resources, we may not be able to effectively manage the expansion of our operations or recruit and train additional qualified personnel. This may result in weaknesses in our infrastructure, give rise to operational mistakes, loss of business opportunities, loss of employees and reduced productivity among remaining employees. The physical expansion of our operations may lead to significant costs and may divert financial resources from other projects, such as the development of our product candidates. If our management is unable to effectively manage our expected development and expansion, our expenses may increase more than expected, our ability to generate or increase our revenue could be reduced and we may not be able to implement our business strategy. Our future financial performance and our ability to commercialize our product candidates, if approved, and compete effectively will depend, in part, on our ability to effectively manage the future development and expansion of our company.

We depend on qualified management personnel and our business could be harmed if we lose key personnel and cannot attract new personnel.

        Our success depends to a significant degree upon the technical and management skills of our co-founders, scientific advisers, senior management team, including, in particular, Jean-François Mouney, our chairman and chief executive officer, and Dean Hum, our chief operating officer. The loss of the services of Messrs. Mouney or Hum would likely have a material adverse effect on us. Our success also will depend upon our ability to attract and retain additional qualified scientific, management, marketing, technical, and sales executives and personnel. We compete for key personnel against numerous companies, including larger, more established companies with significantly greater financial resources than we possess. There can be no assurance that we will be successful in attracting or retaining such personnel, and the failure to do so could harm our operations and our growth prospects.

Our failure to maintain certain tax benefits applicable to French biopharmaceutical companies may adversely affect our results of operations.

        As a French biopharmaceutical company, we have benefited from certain tax advantages, including, for example, the French Research Tax Credit, or CIR (Crédit d'Impôt Recherche), which is a French tax credit aimed at stimulating research and development. The CIR can be offset against French corporate income tax due and the portion in excess, if any, may be refunded. The CIR is calculated based on our claimed amount of eligible research and development expenditures in France and represented €7.3 million for the year ended December 31, 2018. We believe, due to the nature of our business operations, that we will continue to be eligible to receive the CIR tax credit. However, if the French Parliament decides to eliminate, or to reduce the scope or the rate of, the CIR benefit, either of which it could decide to do at any time, our results of operations could be adversely affected.

        The French tax authorities, with the assistance of the Research and Higher Education Ministry, may audit each research and development program in respect of which a CIR benefit has been claimed and assess whether such program qualifies in its view for the CIR benefit. In 2014, we were subject to such an audit, at the end of which, the French tax authorities questioned part of the CIR benefit received by us as a result of certain of our expenditures incurred in 2010. The audit continued for our 2011 and 2012 CIR returns. We received proposed adjustments in December 2014 (for the 2010 CIR) and in December 2015 (for the 2011 and 2012 CIR). This tax audit was also extended to the 2014 CIR as part of a documentary audit, the purpose of which was to determine whether we were acting as a sub-contractor in our collaborative research alliances with companies in the pharmaceutical industry,

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which would reduce the basis on which the CIR is computed. The French tax authorities contend that in these alliances we were acting as a sub-contractor. However, we have disputed this finding. Although the tax authorities have partially granted some of our arguments, it is possible that the CIR tax audit may lead to a challenge of the CIR for the years audited and to potential penalties. The audits could, therefore, have an adverse effect on our results of operations and our financial position.

Our business may be exposed to foreign exchange risks.

        Although the majority of our operations are denominated in euros, an increasing portion of our expenses are denominated in U.S. dollars, including expenses resulting from clinical trials and amounts paid to our wholly owned subsidiary, Genfit Corp., and growing expenses in U.S. dollars incurred by Genfit S.A. Additionally, as we expand our operations and conduct clinical trials in the United States, we will incur expenses in U.S. dollars and will be required to enter into additional contracts denominated in other foreign currencies. 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 engage in hedging transactions to protect against uncertainty in future exchange rates between particular foreign currencies and the euro. If our currency exposure were to increase, we would put in place additional hedging instruments. 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 ADSs being sold in the U.S. offering will be quoted in U.S. dollars on the Nasdaq Global Market, while our ordinary shares (including those being sold in the European private placement and the underlying ordinary shares of the ADSs being sold in the U.S. offering) trade in euros on the Euronext Paris exchange. Our financial statements are prepared in euros. Therefore, fluctuations in the exchange rate between the euro and the U.S. dollar will also affect, among other matters, the value of our ordinary shares and ADSs.

We may use hazardous chemicals and biological materials in our business. Any claims relating to improper handling, storage or disposal of these materials could be time-consuming and costly.

        Our research and development processes for our product candidates and biomarker candidates involve the controlled use of hazardous materials, including chemicals and biological materials. We cannot eliminate the risk of accidental contamination or discharge and any resultant injury from these materials. During their work, our researchers come into contact with a number of potentially dangerous substances, including in particular (1) genetically modified organisms, or GMO, the safety of which is overseen by the Ministry in charge of Research with the assistance of High Council for Biotechnologies (or the Haut Conseil des Biotechnologies), (2) animals used for experimentation, the authorization of which is overseen by the local préfet with the assistance of the local Department for the Protection of People, or DDPP (for Direction départementale de la protection des populations) and (3) human samples. This research is subject to application for authorization from the competent authorities, in particular the National Drug and Health Product Authority, or ANSM (for Autorité Nationale de Sécurité du Médicament et des produits de santé) to assess the usefulness of the research, ensure that patients have been properly informed, and assess the management of information obtained from the sampling.

        We may be subject to fines or sued for any injury or contamination resulting from our use or the use by third parties of these materials, and our liability may exceed any insurance coverage and our total assets, and we may also suffer reputational harm. French and U.S. federal, state, local or foreign laws and regulations govern the use, manufacture, storage, handling and disposal of these hazardous materials and specified waste products, as well as the discharge of pollutants into the environment and human health and safety matters. Compliance with health, safety and/or environmental laws and regulations may be expensive and may impair our research and development efforts. If we fail to comply with these requirements, we could incur substantial costs, including civil or criminal fines and penalties, clean-up costs or capital expenditures for control equipment or operational changes necessary

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to achieve and maintain compliance. Furthermore, we could face the rejection, suspension or withdrawal of regulatory approval for our drugs. In addition, we cannot predict the impact on our business of new or amended health, safety and/or environmental laws or regulations or any changes in the way existing and future laws and regulations are interpreted and enforced.

Product liability and other lawsuits could divert our resources, result in substantial liabilities and reduce the commercial potential of our product candidates.

        The risk that we may be sued on product liability claims is inherent in the development and commercialization of biopharmaceutical and diagnostic products that are intended to be tested and evaluated on humans in an initial phase, then commercialized. Side effects of, or manufacturing defects in, products that we develop could result in the deterioration of a patient's condition, injury or even death. For example, our liability could be sought after by patients participating in the clinical trials in the context of the development of the therapeutic products tested and unexpected side effects resulting from the administration of these products. Once a product is approved for sale and commercialized, the likelihood of product liability lawsuits increases. Criminal or civil proceedings might be filed against us by patients, regulatory authorities, biopharmaceutical companies and any other third party using or marketing our products. These actions could include claims resulting from acts by our partners, service providers and subcontractors, over which we have little or no control. These lawsuits may divert our management from pursuing our business strategy and may be costly to defend. In addition, if we are held liable in any of these lawsuits, we may incur substantial liabilities and may be forced to limit or forgo further commercialization of the affected products.

        We maintain product liability insurance coverage for our clinical trials at levels which we believe are appropriate for our clinical trials and at levels granted by insurers to biopharmaceutical companies like us. Nevertheless, our insurance coverage may be insufficient to reimburse us for any expenses or losses we may suffer. In addition, in the future, we may not be able to obtain or maintain sufficient insurance coverage at an acceptable cost or to otherwise protect against potential product or other legal or administrative liability claims by us or our collaborators, licensees or subcontractors, which could prevent or inhibit the commercial production and sale of any of our product candidates that receive regulatory approval. Product liability claims could also harm our reputation, which may adversely affect our ability to commercialize our products successfully.

Our internal information technology systems, or those of our third-party contractors or consultants, may fail or suffer security breaches, which could result in a material disruption of our product development programs.

        Despite the implementation of security measures, our internal information technology systems and those of our third-party contractors and consultants are vulnerable to damage from computer viruses, unauthorized access, natural disasters, terrorism, war and telecommunication and electrical failures. If such an event were to occur and cause interruptions in our operations, it could result in a material disruption of our programs.

        In the ordinary course of our business, we collect and store sensitive data, including, among other things, legally protected patient health information, personally identifiable information about our employees, intellectual property and proprietary business information. We manage and maintain our applications and data utilizing on-site systems and outsourced vendors. These applications and data encompass a wide variety of business critical information, including research and development information, commercial information and business and financial information. Because information systems, networks and other technologies are critical to many of our operating activities, shutdowns or service disruptions at our company or vendors that provide information systems, networks or other services to us pose increasing risks. Such disruptions may be caused by events such as computer hacking, phishing attacks, ransomware, dissemination of computer viruses, worms and other destructive or disruptive software, denial of service attacks and other malicious activity, as well as power outages,

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natural disasters (including extreme weather), terrorist attacks or other similar events. Such events could have an adverse impact on us and our business, including loss of data and damage to equipment and data. In addition, system redundancy may be ineffective or inadequate, and our disaster recovery planning may not be sufficient to cover all eventualities. Significant events could result in a disruption of our operations, damage to our reputation or a loss of revenues. In addition, we may not have adequate insurance coverage to compensate for any losses associated with such events. For example, the loss of clinical trial data for our product candidates could result in delays in our regulatory approval efforts and significantly increase our costs to recover or reproduce the lost data.

        We could be subject to risks caused by misappropriation, misuse, leakage, falsification or intentional or accidental release or loss of information maintained in the information systems and networks of our company and our vendors, including personal information of our employees and patients, and company and vendor confidential data. In addition, outside parties may attempt to penetrate our systems or those of our vendors or fraudulently induce our personnel or the personnel of our vendors to disclose sensitive information in order to gain access to our data and/or systems. We may experience threats to our data and systems, including malicious codes and viruses, phishing and other cyber-attacks. The number and complexity of these threats continue to increase over time. If a material breach of our information technology systems or those of our vendors occurs, the market perception of the effectiveness of our security measures could be harmed and our reputation and credibility could be damaged. We could be required to expend significant amounts of money and other resources to repair or replace information systems or networks. In addition, we could be subject to regulatory actions and/or claims made by individuals and groups in private litigation involving privacy issues related to data collection and use practices and other data privacy laws and regulations, including claims for misuse or inappropriate disclosure of data, as well as unfair or deceptive practices. Although we develop and maintain systems and controls designed to prevent these events from occurring, and we have a process to identify and mitigate threats, the development and maintenance of these systems, controls and processes is costly and requires ongoing monitoring and updating as technologies change and efforts to overcome security measures become increasingly sophisticated. Moreover, despite our efforts, the possibility of these events occurring cannot be eliminated entirely. As we outsource more of our information systems to vendors, engage in more electronic transactions with payors and patients, and rely more on cloud-based information systems, the related security risks will increase and we will need to expend additional resources to protect our technology and information systems. In addition, there can be no assurance that our internal information technology systems or those of our third-party contractors, or our consultants' efforts to implement adequate security and control measures, will be sufficient to protect us against breakdowns, service disruption, data deterioration or loss in the event of a system malfunction, or prevent data from being stolen or corrupted in the event of a cyberattack, security breach, industrial espionage attacks or insider threat attacks which could result in financial, legal, business or reputational harm.

Use of social media may materially and adversely impact our reputation.

        Unauthorized communications, such as press releases or posts on social media, purported to be issued by us, may contain information that is false or otherwise damaging and could have an adverse impact on the price of our securities. Negative or inaccurate posts or comments about us, our research and development programs, and our directors or officers could seriously damage our reputation.

        In addition, our employees and partners may use social media and mobile technologies inappropriately, for which we may be held liable, or which could lead to breaches of data security, loss of trade secrets or other intellectual property or public disclosure of sensitive information. Such uses of social media and mobile technologies could have a material adverse effect on our reputation, business, financial condition and results of operations.

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We may acquire businesses or products, or form strategic alliances, in the future, and we may not realize the benefits of such acquisitions.

        Our current growth strategy includes potentially in-licensing rights to drug candidates in clinical development, and in the future, we may acquire companies or technologies facilitating or enabling us to access to new medicines, new research projects, or new geographical areas, or enabling us to express synergies with our existing operations. If such acquisitions occur in the future, we may not be able to identify appropriate targets or make acquisitions under satisfactory conditions, in particular, satisfactory price conditions. In addition, we may be unable to obtain the financing for these acquisitions on favorable terms, which could require us to finance these acquisitions using our existing cash resources that could have been allocated to other purposes. If we acquire businesses with promising markets or technologies, we may not be able to realize the benefit of acquiring such businesses if we are unable to successfully integrate them with our existing operations and company culture. We may encounter numerous difficulties in developing, manufacturing and marketing any new products resulting from a strategic alliance or acquisition that delay or prevent us from realizing their expected benefits or enhancing our business. We cannot assure you that, following any such acquisition, we will achieve the expected synergies to justify the transaction.

Risks Related to Legal and Other Compliance Matters

We are subject to healthcare laws and regulations that may require substantial compliance efforts and could expose us to criminal sanctions, civil penalties, contractual damages, reputational harm and diminished profits and future earnings, among other penalties.

        Healthcare providers, physicians and others will play a primary role in the recommendation and prescription of our products, if approved. Our business operations in the United States and our arrangements with clinical investigators, healthcare providers, consultants, third party payors and patients expose us to broadly applicable federal and state fraud and abuse and other healthcare laws. These laws may impact, among other things, our research, proposed sales, marketing and education programs of our product candidates that obtain marketing approval. Restrictions under applicable U.S. federal, state and non-U.S. healthcare laws and regulations include, but are not limited to, the following:

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

    U.S. federal civil and criminal false claims laws and civil monetary penalties laws, including the civil False Claims Act, which impose criminal and civil penalties, including those from civil whistleblower or qui tam actions, against individuals or entities for, among other things, knowingly presenting, or causing to be presented, claims for payment that are false or fraudulent or making a false statement to avoid, decrease, or conceal an obligation to pay money to the federal government;

    the U.S. federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which created additional federal criminal statutes that impose criminal and civil liability for, among other things, executing or attempting to execute a scheme to defraud any healthcare benefit program or knowingly and willingly falsifying, concealing or covering up a material fact or making false statements relating to healthcare matters;

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    HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act, or HITECH, and its implementing regulations, which impose certain requirements on covered entities and their business associates that perform functions or activities that involve HIPAA Protected Health Information on their behalf, including mandatory contractual terms, with respect to safeguarding the privacy, security and transmission of individually identifiable health information;

    U.S. federal transparency requirements under the Physician Payments Sunshine Act, enacted as part of the ACA, that require applicable manufacturers of covered drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid, or the Children's Health Insurance Program, with specific exceptions, to track and annually report to the CMS payments and other transfers of value provided to physicians and teaching hospitals, and certain ownership and investment interests held by physicians or their immediate family members;

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

    the Foreign Corrupt Practices Act, or FCPA, prohibits any U.S. individual or business from paying, offering, or authorizing payment or offering of anything of value, directly or indirectly, to any foreign official, political party, or candidate for the purpose of influencing any act or decision of the foreign entity in order to assist the individual or business in obtaining or retaining business. The FCPA also obligates companies whose securities are listed in the United States to comply with accounting provisions requiring the company to maintain books and records that accurately and fairly reflect all transactions of the corporation, including international subsidiaries, and to devise and maintain an adequate system of internal accounting controls for international operations. Activities that violate the FCPA, even if they occur wholly outside the United States, can result in criminal and civil fines, imprisonment, disgorgement, oversight, and debarment from government contracts.

        In addition, some state laws require pharmaceutical companies to comply with the pharmaceutical industry's voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government and require manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures and pricing information.

        Ensuring that our business arrangements with third parties comply with applicable healthcare laws and regulations will likely be costly. It is possible that governmental authorities will conclude that our business practices do not comply with current or future statutes, regulations or case law involving applicable fraud and abuse or other healthcare laws and regulations. If our operations were found to be in violation of any of these laws or any other governmental regulations that may apply to us, we may be subject to significant civil, criminal and administrative penalties, damages, fines, disgorgement, individual imprisonment, possible exclusion from government funded healthcare programs, such as Medicare and Medicaid, additional reporting requirements and oversight if we become subject to a corporate integrity agreement or similar agreement to resolve allegations of non-compliance with these laws, contractual damages, reputational harm, diminished profits and future earnings, and curtailment of our operations, any of which could substantially disrupt our operations. If the physicians or other

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providers or entities with whom we expect to do business are found not to be in compliance with applicable laws, they may be subject to criminal, civil or administrative sanctions, including exclusions from government funded healthcare programs. Although an effective compliance program can mitigate the risk of investigation and prosecution for violations of these laws, the risks cannot be entirely eliminated. Moreover, achieving and sustaining compliance with applicable federal and state privacy, security, and fraud laws may prove costly. Any action against us for violation of these laws, even if we successfully defend against it, could cause us to incur significant legal expenses and divert our management's attention from the operation of our business.

We may be subject to laws and regulations related to data privacy, both in the United States and the European Union.

        We may be subject to data privacy and security regulation by both the federal government and the states in which we conduct our business. HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act, or HITECH, and its respective implementing regulations imposes certain requirements on covered entities relating to the privacy, security, and transmission of certain individually identifiable health information, known as protected health information. Among other things, HITECH, through its implementing regulations, makes HIPAA's security standards and certain privacy standards directly applicable to business associates, defined as a person or organization, other than a member of a covered entity's workforce, that creates, receives, maintains, or transmits protected health information on behalf of a covered entity for a function or activity regulated by HIPAA. HITECH also strengthened the civil and criminal penalties that may be imposed against covered entities, business associates, and individuals, and gave state attorneys general new authority to file civil actions for damages or injunctions in federal courts to enforce the federal HIPAA laws and seek attorneys' fees and costs associated with pursuing federal civil actions. In addition, other federal and state laws may govern the privacy and security of health and other information in certain circumstances, many of which differ from each other in significant ways and may not be preempted by HIPAA, thus complicating compliance efforts.

        The collection and use of personal health data in the European Union had previously been governed by the provisions of the Data Protection Directive, which has been replaced by the General Data Protection Regulation, or GDPR, which became effective on May 25, 2018. The GDPR imposes strict requirements on controllers and processors of personal data, including special protections for "sensitive information" which includes health and genetic information of data subjects residing in the EU. GDPR grants individuals a number of rights as data subjects, including the opportunity to object to the processing of their personal information and the right to request deletion of personal information in certain circumstances. It also provides a right for the data subject to obtain the portability of its personal data in certain cases, including when processing of the personal data is based on consent, and provides the individual with an express right to seek legal remedies in the event the individual believes his or her rights have been violated. Further, the GDPR imposes strict rules on the transfer of personal data out of the European Union to the United States or other regions that have not been deemed to offer "adequate" privacy protections. Failure to comply with the requirements of the GDPR and the related national data protection laws of the European Union Member States, which may deviate slightly from the GDPR, especially in respect of the processing of personal data concerning health, may result in fines of up to 4% of global revenues, or €20,000,000, whichever is greater. As a result of the implementation of the GDPR, we may be required to put in place additional mechanisms ensuring compliance with the new data protection rules.

        There is significant uncertainty related to the manner in which data protection authorities will seek to enforce compliance with GDPR. For example, it is not clear if the authorities will conduct random audits of companies doing business in the EU, or if the authorities will wait for complaints to be filed by individuals who claim their rights have been violated. Enforcement uncertainty and the costs

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associated with ensuring GDPR compliance be onerous and adversely affect our business, financial condition, results of operations and prospects.

Our employees may engage in misconduct or other improper activities, including violating applicable regulatory standards and requirements or engaging in insider trading, which could significantly harm our business.

        We are exposed to the risk of employee fraud or other misconduct. Misconduct by employees could include intentional failures to comply with legal requirements or the requirements of FDA, EMA and other government regulators, provide accurate information to applicable government authorities, comply with fraud and abuse and other healthcare laws and regulations in the United States and abroad, report financial information or data accurately or disclose unauthorized activities to us. In particular, sales, marketing and business arrangements in the healthcare industry are subject to extensive laws and regulations intended to prevent fraud, misconduct, kickbacks, self-dealing and other abusive practices. These laws and regulations restrict or prohibit a wide range of pricing, discounting, marketing and promotion, sales commission, customer incentive programs and other business arrangements. Employee misconduct could also involve the improper use of, including trading on, information obtained in the course of clinical trials, which could result in regulatory sanctions and serious harm to our reputation. In connection with the global offering, we have adopted a Code of Business Conduct and Ethics, but it is not always possible to identify and deter employee misconduct, and the precautions we take to detect and prevent this activity may be ineffective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to comply with these laws or regulations. If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, those actions could have a significant impact on our business, including the imposition of significant fines or other sanctions.

Risks Related to Intellectual Property

If we are unable to obtain and maintain sufficient patent protection for our product candidates, or if the scope of the patent protection is not sufficiently broad, our competitors could develop and commercialize products similar or identical to ours, and our ability to commercialize our product candidates successfully may be adversely affected.

        Our success depends in large part on our ability to obtain and maintain patent protection in the United States and other countries with respect to our proprietary product candidates. If we do not adequately protect our intellectual property, competitors may be able to erode or negate any competitive advantage we may have, which could harm our business and ability to achieve profitability. To protect our proprietary position, we file patent applications in the United States and abroad related to our novel product candidates that are important to our business. The patent application and approval process is expensive and time-consuming. We may not be able to file and prosecute all necessary or desirable patent applications at a reasonable cost or in a timely manner.

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

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

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

    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;

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

    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 by third parties;

    our compositions and methods may not be patentable;

    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.

        Our pending patent applications cannot be enforced against third parties practicing the technology claimed in such applications unless and until patent issues from such applications. Because the issuance of a patent is not conclusive as to its inventorship, scope, validity or enforceability, our patents or pending patent applications may be challenged in the courts or patent offices in the United States and abroad. For example, we may be subject to a third party preissuance submission of prior art to the U.S. Patent and Trademark Office, or USPTO, or become involved in post-grant review procedures, oppositions, derivations, reexaminations, inter partes review or interference proceedings, in the United States or elsewhere, challenging our patent rights or the patent rights of others. An adverse determination in any such challenges may result in loss of exclusivity or in patent claims being narrowed, invalidated or held unenforceable, in whole or in part, which could limit our ability to stop others from using or commercializing similar or identical technology and products, or limit the duration of the patent protection of our technology and products. In addition, given the amount of time required for the development, testing and regulatory review of new product candidates, patents protecting such candidates might expire before or shortly after such candidates are commercialized.

        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 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.

        Even if our patent applications issue as patents, they may not issue in a form that will provide us with any meaningful protection, prevent competitors from competing with us or otherwise provide us with any competitive advantage. Our competitors may be able to circumvent our patents by developing similar or alternative technologies or products in a non-infringing manner. Our competitors may also seek approval to market their own products similar to or otherwise competitive with our products. Alternatively, our competitors may seek to market generic versions of any approved products by submitting Abbreviated New Drug Applications, or ANDAs, to the U.S. Food and Drug Administration, or FDA, in which they claim that patents owned or licensed by us are invalid, unenforceable or not infringed. In these circumstances, we may need to defend or assert our patents, or both, including by filing lawsuits alleging patent infringement. In any of these types of proceedings, a court or other agency with jurisdiction may find our patents invalid or unenforceable, or that our competitors are competing in a non-infringing manner. Thus, even if we have valid and enforceable patents, these patents still may not provide protection against competing products or processes sufficient to achieve our business objectives.

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        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 litigation or other actions against those that have infringed or are currently infringing our patent rights, 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.

        Even if we have or obtain patents covering our product candidates or compositions, we may still be prevented from making, using, selling, offering for sale, or importing 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. These filings could materially affect our ability to develop our product candidates or sell our products if approved. Because patent applications can take many years to issue and are not published for a period of time after filing, there may be currently pending applications unknown to us that may later result in issued patents that our product candidates or compositions may infringe. These patent applications may have priority over patent applications filed by us.

We may become involved in lawsuits to protect or enforce our patents or other intellectual property, which could be expensive, time consuming and unsuccessful and issued patents covering our product candidates could be found invalid or unenforceable if challenged in court.

        If we initiate legal proceedings against a third party to enforce a patent covering one of our product candidates or technologies, the defendant could counterclaim that the patent covering one of our product candidates or technologies is invalid or unenforceable. In patent litigation in the United States, defendant counterclaims alleging invalidity and unenforceability of an asserted patent or patents are commonplace. Grounds for a validity challenge include alleged failures to meet any of several statutory requirements, including lack of novelty, obviousness, written description or non-enablement. 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/or inter partes review and equivalent proceedings in foreign jurisdictions, such as, opposition proceedings. Such proceedings could result in revocation or amendment of our patents in such a way that they no longer cover our product candidates or competitive products. Similarly, we may initiate proceedings before the Patent Trial and Appeal Board, or PTAB, of the USPTO, such as post grant review, or PGR, derivation, or inter partes review, against patents granted to third parties. For example, NTZ, which we are evaluating as an anti-fibrotic in an investigator-initiated Phase 2 clinical trial, has been commercialized by Romark for use as an anti-parasitic drug. We have a number of granted U.S. patents covering the use of NTZ as an anti-fibrotic in certain organs, including in the liver for the treatment of liver fibrosis consecutive to NASH. Romark has an allowed U.S. patent application which claims the use of NTZ in liver fibrosis. This may prevent or delay us from obtaining issued patents with similar claims in the U.S. and if granted, may prompt additional proceedings in the USPTO against such patent or against other third party applications or patents or consider the need or benefit of entering into a license agreement with such third party or parties in order to exploit such patent alone or together with Romark or such other third party or parties. In the event that we do not prevail or the settlement terms with the adverse party are unfavorable, or we are unable to reach an agreement on terms sufficiently favorable to us, our ability to market our product candidates may be affected. The outcome following legal assertions of invalidity and unenforceability in the PTAB or the federal courts 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

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defendant were to prevail on a legal assertion of invalidity or unenforceability, we would lose at least part, and perhaps all, of the patent protection on our product candidates.

        Even if we establish infringement, the court may decide not to grant an injunction against further infringing activity and instead award only monetary damages, which may or may not be an adequate remedy. Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation in the United States, there is a risk that some of our confidential information could be compromised by disclosure during litigation. There could also be public announcements of the results of hearings, motions or other interim proceedings or developments. If securities analysts or investors perceive these results to be negative, it could have a material adverse effect on the price of shares of our common stock. Moreover, there can be no assurance that we will have sufficient financial or other resources to file and pursue such infringement claims in the federal courts, which typically last for years before they are concluded. Even if we ultimately prevail in such claims, the monetary cost of such litigation and the diversion of the attention of our management and scientific personnel could outweigh any benefit we receive as a result of the proceedings.

Biopharmaceutical 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 biopharmaceutical companies can be highly uncertain and involve complex legal and factual questions. The interpretation and breadth of claims allowed in some patents covering biopharmaceutical 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 USPTO are evolving and could change in the future. Consequently, we cannot predict the issuance and scope of patents with certainty. Patents, if issued, may be challenged, invalidated or circumvented. U.S. patents and patent applications may also be subject to derivation or interference proceedings, and U.S. patents may be subject to reexamination proceedings, post-grant review and/or inter partes review in the USPTO. 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 and foreign countries 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. laws and those countries may lack adequate rules and procedures for defending our intellectual property rights.

        If we fail to obtain and maintain patent protection and trade secret protection for 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.

If we are sued for infringing intellectual property rights of third parties, such litigation could be costly and time consuming and could prevent or delay us from developing or commercializing our product candidates.

        Our commercial success depends, in part, on our ability to develop, manufacture, market and sell our product candidates and use our technologies without infringing the intellectual property and other proprietary rights of third parties. If any third-party patents or patent applications are found to cover our product candidates or their methods of use, we may not be free to manufacture or market our

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product candidates as planned without obtaining a license, which may not be available on commercially reasonable terms, or at all.

        There is a substantial amount of intellectual property litigation in the biotechnology and pharmaceutical industries, and we may become party to, or threatened with, litigation or other adversarial proceedings regarding intellectual property rights with respect to our product candidates, including interference proceedings before the USPTO. Third parties may assert infringement claims against us based on existing or future intellectual property rights. The outcome of intellectual property litigation is subject to uncertainties that cannot be adequately quantified in advance. The pharmaceutical and biotechnology industries have produced a significant number of patents, and it may not always be clear to industry participants, including us, which patents cover various types of products or methods of use. The coverage of patents is subject to interpretation by the courts, and the interpretation is not always uniform. If we were sued for patent infringement, we would need to demonstrate that our product candidates, products or methods either do not infringe the patent claims of the relevant patent or that the patent claims are invalid or unenforceable, and we may not be able to do this. Proving invalidity is difficult. For example, in the United States, proving invalidity requires a showing of clear and convincing evidence to overcome the presumption of validity enjoyed by issued patents. Even if we are successful in these proceedings, we may incur substantial costs and the time and attention of our management and scientific personnel could be diverted in pursuing these proceedings, which could significantly harm our business and operating results. In addition, we may not have sufficient resources to bring these actions to a successful conclusion.

        If we are found to infringe a third party's intellectual property rights, we could be forced, including by court order, to cease developing, manufacturing or commercializing the infringing product candidate or product. Alternatively, we may be required to obtain a license from such third party in order to use the infringing technology and continue developing, manufacturing or marketing the infringing product candidate. However, we may not be able to obtain any required license on commercially reasonable terms or at all. Even if we were able to obtain a license, it could be non-exclusive, thereby giving our competitors access to the same technologies licensed to us. In addition, we could, in certain circumstances, be found liable for monetary damages, including treble damages and attorneys' fees if we are found to have willfully infringed a patent. A finding of infringement could prevent us from commercializing our product candidates or force us to cease some of our business operations, which could materially harm our business. Claims may also be made that we have misappropriated the confidential information or trade secrets of third parties could have a similar negative impact on our business.

Developments in patent law in the United States and in other jurisdictions could have a negative impact on our business.

        From time to time, the U.S. Supreme Court, other federal courts, the U.S. Congress, the USPTO or similar foreign authorities may change the standards of patentability and any such changes could have a negative impact on our business. In addition, the Leahy-Smith America Invents Act, or the America Invents Act, which was signed into law in 2011, includes a number of significant changes to U.S. patent law. These changes include a transition from a "first-to-invent" system to a "first-to-file" system, changes to the way issued patents are challenged, and changes to the way patent applications are disputed during the examination process. In certain areas, these changes may favor larger and more established companies that have greater resources to devote to patent application filing and prosecution. The USPTO has developed new regulations and procedures to govern the full implementation of the America Invents Act, and many of the substantive changes to patent law associated with the America Invents Act, and, in particular, the first-to-file provisions, became effective on March 16, 2013. Substantive changes to patent law associated with the America Invents Act, or any

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subsequent U.S. legislation regarding patents, may affect our ability to obtain patents, and if obtained, to enforce or defend them.

        Furthermore, recent U.S. Supreme Court rulings have narrowed the scope of patent protection available in certain circumstances for diagnostic method claims and "gene patents" (see, two landmark Supreme Court cases, Mayo Collaborative v. Prometheus Laboratories ("Prometheus"), and Association for Molecular Pathology v. Myriad Genetics ("Myriad")).

        In view of the Supreme Court decisions in Prometheus, Myriad, and Alice Corp. Pty. Ltd. v. CLS Bank Int'l ("Alice Corp."), as well as other federal appellate cases, we cannot guarantee that our efforts to seek patent protection for our tools and biomarkers will be successful.

If we do not obtain protection under the Hatch-Waxman Amendments and similar non-U.S. legislation for extending the term of patents covering each of our product candidates, our business may be materially harmed.

        Given the amount of time required for the development, testing and regulatory review of new product candidates, patents protecting such candidates might expire before or shortly after such candidates are commercialized. We expect to seek extensions of patent terms for certain patents in the United States and, if available, in other countries where we are prosecuting patents and seeking approval of various products. Depending upon the timing, duration and conditions of FDA marketing approval of our product candidates, one or more of our U.S. patents may be eligible for limited patent term extension under the Drug Price Competition and Patent Term Restoration Act of 1984, referred to as the Hatch-Waxman Amendments; similarly, selected patents outside the U.S., may be eligible for supplementary protection certificate, or SPC, under corresponding legislation in Europe and several other countries. Depending upon the circumstances, the Hatch-Waxman Amendments permit a patent term extension of up to five years for a patent covering an approved product as compensation for effective patent term lost during product development and the FDA regulatory review process. However, we may not receive an extension if we fail to apply within applicable deadlines, fail to apply prior to expiration of relevant patents or otherwise fail to satisfy applicable requirements. Moreover, the length of the extension could be less than we request. If we are unable to obtain patent term extension or the term of any such extension is less than we request, the period during which we can enforce our patent rights for that product will be shortened. If this occurs, our competitors may be able to take advantage of our investment in development and clinical trials by referencing our clinical and preclinical data and launch their product earlier than might otherwise be the case.

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. We have entered 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 all 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.

        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,

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provide adequate 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. 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 outside the United States and Europe could be less extensive than those in the United States and Europe, assuming that patent rights are obtained in the United States. 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.

        In addition, the laws of some foreign countries do not protect intellectual property rights to the same extent as the federal and state laws in the United States. Many companies have encountered significant problems in protecting and defending intellectual property rights in certain foreign jurisdictions. The legal systems of some countries, particularly in developing countries, do not favor the enforcement of patents and other intellectual property protection, especially those relating to biopharmaceuticals 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 for certain products. 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 the law and legal decisions by courts in the United States and foreign countries 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.

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Third parties may assert ownership or commercial rights to inventions we develop.

        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 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.

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 or other biotechnology or pharmaceutical 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, and no such claims against us are currently pending, we may be subject to claims that we or our employees, consultants or independent contractors have 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.

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.

        There is significant litigation in the biopharmaceutical 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 patents, we may have to pay significant damages or seek licenses to such patents. 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. If we become involved in litigation, it could consume a substantial portion of our managerial and financial resources, regardless of whether we win or lose. We may not be able to afford the costs of litigation. Any adverse ruling or

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perception of an adverse ruling in defending ourselves against these claims could have a negative impact on our cash position. Any legal action against us or our collaborators could lead to:

    payment of damages, potentially treble damages, if we are found to have willfully infringed a party's patent rights;

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

    us having to enter into license arrangements that may not be available on commercially acceptable terms, if at all.

        Any of these outcomes could hurt our cash position and financial condition and our ability to develop and commercialize our product candidates.

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

        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 will need to build name recognition by potential partners or customers in our markets of interest. Over the long term, if we are unable to establish name recognition based on our trademarks and trade names, we may not be able to compete effectively.

Risks Related to the Global Offering, Ownership of Our Ordinary Shares and ADSs and Our Status as a Non-U.S. Company with Foreign Private Issuer Status

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

        Although our ordinary shares have been traded on Euronext Paris since April 2014, there has been no public market on a U.S. national securities exchange for our ADSs or our ordinary shares in the United States. Although we anticipate our ADSs will be approved for listing on the Nasdaq Global Market, an active trading market for our ADSs may never develop or be sustained following the U.S. offering. The offering price of our ADSs will be determined through negotiations between us and the underwriters based on a number of factors. This offering price may not be indicative of the market price of our ADSs or ordinary shares after the global offering. In the absence of an active trading market for our ADSs or ordinary shares, investors may not be able to sell their ADSs at or above the offering price or at the time that they would like to sell.

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

        The market price for our ADSs and ordinary shares 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 ADSs or ordinary shares at or above the price originally paid for the security. The market price for our ADSs and ordinary shares 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;

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    announcements by us 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;

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

    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;

    lawsuits threatened or filed against us, 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; and

    general economic and market conditions.

        These and other market and industry factors may cause the market price and demand for our ordinary shares and 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 the trading market for our ordinary shares and ADSs.

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 initiation of other clinical programs, receipt of marketing approval, or a commercial launch of a product. The achievement of many of these milestones may be outside of our control. All of these milestones are 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;

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    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 the ordinary shares and ADSs may decline as a result.

After the completion of the global 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, which could be insufficiently covered by insurance, and a diversion of management's attention and resources, which could harm our business.

We have broad discretion in the use of the net proceeds from the global offering and may use them in ways with which you do not agree and in ways that may not increase the value of your investment.

        Our management will have broad discretion in the application of the net proceeds that we receive from the global offering. We may spend or invest these proceeds in a way with which our shareholders and ADS holders 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 the global offering in a manner that does not produce income or that loses value. These investments may not yield a favorable return to our investors.

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

        The trading market for our ADSs and ordinary shares 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 ADSs and ordinary shares would be negatively impacted. If one or more of the analysts who covers us downgrades our equity securities 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 securities, demand for our ordinary shares and ADSs could decrease, which could cause the price of our ordinary shares and ADSs or their trading volume to decline.

We do not currently intend to pay dividends on our securities and, consequently, your ability to achieve a return on your investment will depend on appreciation in the price of our ordinary shares and ADSs. In addition, French law may limit the amount of dividends we are able to distribute.

        We have never declared or paid any cash dividends on our ordinary shares and do not currently intend to do so for the foreseeable future. We currently intend to invest our future earnings, if any, to fund our growth. Therefore, you are not likely to receive any dividends on your ordinary shares or ADSs for the foreseeable future and the success of an investment in ordinary shares or ADSs will depend upon any future appreciation in its value. Consequently, investors may need to sell all or part of their holdings of ordinary shares or ADSs after price appreciation, which may never occur, as the only way to realize any future gains on their investment. There is no guarantee that the ordinary shares

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or ADSs will appreciate in value or even maintain the price at which our shareholders have purchased them. Investors seeking cash dividends should not purchase our ADSs or ordinary shares.

        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, 12, 32, 40 and 41 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.

        In addition, exchange rate fluctuations may affect the amount of euros that we are able to distribute, and the amount in U.S. dollars that our shareholders receive upon the payment of cash dividends or other distributions we declare and pay in euros, if any. These factors could harm the value of our ADSs, and, in turn, the U.S. dollar proceeds that holders receive from the sale of our ADSs.

If you purchase ordinary shares or ADSs in the global offering, you will experience substantial and immediate dilution.

        If you purchase ordinary shares or ADSs in the global offering, you will experience substantial and immediate dilution of $22.40 per ADS and €19.93 per ordinary share in net tangible book value as of December 31, 2018, after giving effect to the global offering at an assumed offering price of $26.33 per ADS in the U.S. offering, corresponding to €23.42 per ordinary share, the closing price of our ordinary shares on Euronext Paris on March 13, 2019, in the European private placement (assuming an exchange rate of €1.00=$1.1243, the exchange rate on March 8, 2019), because the price that you pay will be substantially greater than the net tangible book value per ADS or ordinary share, 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 warrants to purchase ordinary shares or if we otherwise issue additional ordinary shares or ADSs below the offering price. For a further description of the dilution that you will experience immediately after the global offering, see the section of this prospectus titled "Dilution."

Future sales, or the possibility of future sales, of a substantial number of our ADSs or ordinary shares could adversely affect the price of our ADSs and ordinary shares.

        Future sales of a substantial number of our ADSs or ordinary shares, or the perception that such sales will occur, could cause a decline in the market price of our ADSs and/or ordinary shares. Based upon the number of shares outstanding as of December 31, 2018, after giving effect to the closing of the global offering, we will have 36,183,921 ordinary shares outstanding (including ordinary shares in the form of ADSs), assuming the underwriters do not exercise their option to purchase 750,000 additional ADSs and/or ordinary shares. ADSs and ordinary shares issued and sold in the global offering may be resold in the public market immediately without restriction, unless purchased by our affiliates. A significant portion of these ordinary shares and ADSs will be subject to the lock-up agreements described in "Shares and ADSs Eligible for Future Sale" and "Underwriting." If, after the end of such lock-up agreements, these shareholders or ADS holders sell substantial amounts of ordinary shares or ADSs in the public market, or the market perceives that such sales may occur, the market price of our ADSs or ordinary shares and our ability to raise capital through an issuance of equity securities in the future could be adversely affected.

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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 company with limited liability. 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. See the sections of this prospectus titled "Management—Corporate Governance Practices" and "Description of Share Capital."

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. Courts outside the United States may refuse to hear a U.S. securities law claim because non-U.S. courts may not be the most appropriate forums in which to bring such a claim. Even if a court outside the United States agrees to hear a claim, it may determine that the law of the jurisdiction in which the non-U.S. 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 non-U.S. 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 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 the section of this prospectus titled "Enforcement of Civil Liabilities."

Our bylaws and French corporate 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,

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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 95% of voting rights of a public company 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 from the main French stock exchange, has the right to force out minority shareholders following a tender offer made to all shareholders;

    under French law, certain foreign investments in companies incorporated under French laws are subject to the prior authorization from the French Minister of the Economy, where all or part of the target's business and activity relate to a strategic sector, such as energy, transportation, public health, telecommunications, etc.; see the section of this prospectus titled "Limitations Affecting Shareholders of a French Company;"

    a merger (i.e., in a French law context, a share for share 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 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 board of directors has the right to appoint directors to fill a vacancy created by the resignation or death of a director, 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;

    our board of directors can be convened by our chairman, including upon request from our managing director, if any, or, when no board meeting has been held for more than two consecutive months, from 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 registered or bearer, if the legislation so permits, according to the shareholder's choice;

    approval of at least a majority of the votes held 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;

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    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 changed in accordance with applicable French laws and regulations;

    the crossing of certain thresholds has to be disclosed and can impose certain obligations; see the sections of this prospectus titled "Rights, Preferences and Restrictions Attaching to Ordinary Shares (Articles 9, 11, 12, 32, 40 and, 41of the Bylaws)—Requirements for Holdings Exceeding Certain Percentages" and "Declaration of Crossing of Ownership Thresholds (Article 11 of the Bylaws);"

    transfers of shares shall comply with applicable insider trading rules and regulations and, in particular, with the Market Abuse Directive and Regulation dated April 16, 2014; and

    pursuant to French law, the sections of our Bylaws relating to the number of directors and election and removal of a director from office, may only be modified by a resolution adopted by two-thirds of the votes of our shareholders present, represented by a proxy or voting by mail at the meeting.

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.

        Purchasers of ADSs in the U.S. offering may instruct the depositary of their ADSs to vote the ordinary shares underlying their ADSs. Otherwise, purchasers of ADSs in the U.S. offering will not be able to exercise voting rights unless they withdraw the ordinary shares underlying the ADSs they hold. However, a holder of ADSs may not know about the meeting far enough in advance to withdraw those ordinary shares. If we ask for a holder of ADSs' instructions, the depositary, upon timely notice from us, will notify him or her of the upcoming vote and arrange to deliver our voting materials to him or her. We cannot guarantee to any holder of ADSs that he or she will receive the voting materials in time to ensure that he or she can instruct the depositary to vote his or her ordinary shares or to withdraw his or her ordinary shares so that he or she can vote them. If the depositary does not receive timely voting instructions from a holder of ADSs, it may give a proxy to a person designated by us to vote the ordinary shares underlying his or her 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 a holder of ADSs may not be able to exercise his or her right to vote, and there may be nothing he or she can do if the ordinary shares underlying his or her ADSs are not voted as he or she requested.

Purchasers of ADSs are not holders of our ordinary shares.

        A holder of ADSs will not be treated as one of our shareholders and will not have direct shareholder rights. French law governs our shareholder rights. The depositary will be the holder of the ordinary shares underlying ADSs held by purchasers of ADSs in the U.S. offering. Purchasers of ADSs in the U.S. offering will have ADS holder rights. The deposit agreement among us, the depositary and

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purchasers of ADSs in the U.S. offering, as ADS holders, and all other persons directly and indirectly holding ADSs, sets out ADS holder rights, as well as the rights and obligations of the depositary.

        A double voting right is attached to each registered share which is held in the name of the same shareholder for at least two years. However, the ordinary shares underlying our ADSs will not be entitled to double voting rights as the depositary will hold the shares underlying our ADSs in bearer form.

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, ADS holders 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.

Purchasers of ADSs in the U.S. offering may be subject to limitations on the withdrawal of the underlying ordinary shares.

        Temporary delays in the cancellation of 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, a holder of ADSs may not be able to cancel his or her ADSs and withdraw the underlying ordinary shares when he or she owes 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 the section of this prospectus titled "Description of American Depositary Shares."

ADSs 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 plaintiffs in any such action.

        The deposit agreement governing the ADSs representing our ordinary shares provides that, to the fullest extent permitted by law, ADS holders waive the right to a jury trial of any claim they may have against us or the depositary arising out of or relating to our shares, the ADSs or the deposit agreement, including any claim under the U.S. federal securities laws.

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        If we or the depositary opposed a jury trial demand based on the waiver, the court would determine whether the waiver was enforceable based on the facts and circumstances of that case in accordance with the applicable state and federal law. To our knowledge, the enforceability of a contractual pre-dispute jury trial waiver in connection with claims arising under the federal securities laws has not been finally adjudicated by the United States Supreme Court. However, we believe that a contractual pre-dispute jury trial waiver provision is generally enforceable, including under the laws of the State of New York, which govern the deposit agreement, by a federal or state court in the City of New York, which has non-exclusive jurisdiction over matters arising under the deposit agreement. In determining whether to enforce a contractual pre-dispute jury trial waiver provision, courts will generally consider whether a party knowingly, intelligently and voluntarily waived the right to a jury trial. We believe that this is the case with respect to the deposit agreement and the ADSs. It is advisable that you consult legal counsel regarding the jury waiver provision before entering into the deposit agreement.

        If you or any other holders or beneficial owners of ADSs bring a claim against us or the depositary in connection with matters arising under the deposit agreement or the ADSs, including claims under federal securities laws, 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 the depositary. If a lawsuit is brought against either or both of us and 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, including results that could be less favorable to the plaintiffs in any such action.

        Nevertheless, if this jury trial waiver provision is not permitted by applicable law, an action could proceed under the terms of the deposit agreement with a jury trial. 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 U.S. federal securities laws and the rules and regulations promulgated thereunder.

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 ADSs and our ordinary shares.

        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 Securities Exchange Act of 1934, as amended, or 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. public companies 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.

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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 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, or (2) 25% of the shares entitled to vote in the case of any other extraordinary shareholders' general meeting. If a quorum is not present, the meeting is adjourned. There is no quorum requirement when an ordinary general meeting is reconvened, but the reconvened meeting may consider only questions which were on the agenda of the adjourned meeting. When an extraordinary general meeting is reconvened, the quorum required is 20% of the shares entitled to vote, except where the reconvened meeting is considering capital increases through capitalization of reserves, profits or share premium. For these matters, no quorum is required at the reconvened meeting. If a quorum is not present at a reconvened meeting requiring a quorum, then the meeting may be adjourned for a maximum of two months.

        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 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 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 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 of 2002, or 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

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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 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 ADSs less attractive because we may rely on these exemptions. If some investors find our ADSs less attractive as a result, there may be a less active trading market for our ADSs and the price of our ADSs may be more volatile. We may take advantage of these reporting exemptions until we are no longer an 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 the global 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 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, 2019. 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.

Changes to U.S. and non-U.S. tax laws could materially adversely affect our company.

        On December 22, 2017, the Tax Cuts and Jobs Act was signed into law and significantly revised the Internal Revenue Code of 1986, as amended, or the Code. The Tax Cuts and Jobs Act, among other things, contains significant changes to corporate taxation, including reduction of the corporate tax rate from a top marginal rate of 35% to a flat rate of 21%, limitation of the tax deduction for interest expense to 30% of adjusted earnings (except for certain small businesses), implementation of a "base erosion anti-abuse tax" which requires U.S. corporations to make an alternative determination of taxable income without regard to tax deductions for certain payments to affiliates, taxation of certain non-U.S. corporations' earnings considered to be "global intangible low taxed income" (also referred to

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as "GILTI"), repeal of the alternative minimum tax, or AMT, for corporations and changes to a taxpayer's ability to either utilize or refund the AMT credits previously generated, changes to the limitation on deductions for certain executive compensation particularly with respect to the removal of the previously allowed performance based compensation exception, changes in the attribution rules relating to shareholders of certain "controlled foreign corporations", limitation of the deduction for net operating losses to 80% of current year taxable income and elimination of net operating loss carrybacks, one-time taxation of offshore earnings at reduced rates regardless of whether they are repatriated, elimination of U.S. tax on foreign earnings (subject to certain important exceptions), immediate deductions for certain new investments instead of deductions for depreciation expense over time, and modifying or repealing many business deductions and credits. Notwithstanding the reduction in the U.S. corporate income tax rate, the overall impact of the Tax Cuts and Jobs Act is uncertain and our business and financial condition could be adversely affected. The impact of the Tax Cuts and Jobs Act on holders of our ordinary shares or ADSs is also uncertain and could be adverse. For example, recent changes in U.S. federal income tax law resulting in additional taxes owed by U.S. holders (as defined below under "Material United States Federal Income Tax and French Tax Considerations—Material U.S. Federal Income Tax Considerations") under the new GILTI tax rules or related to "controlled foreign corporations" may discourage U.S. investors from owning or acquiring 10% or greater of our outstanding ordinary shares or ADSs, which other shareholders may have viewed as beneficial or may otherwise negatively impact the trading price of our ordinary shares or ADSs. We are unable to predict what federal tax law may be proposed or enacted in the future or what effect such changes would have on our business, but such changes, to the extent they are brought into tax legislation, regulations, policies or practices, could affect our effective tax rates in the future in countries where we have operations and have an adverse effect on our overall tax rate in the future, along with increasing the complexity, burden and cost of tax compliance. We urge our shareholders to consult with their legal and tax advisors with respect to this legislation and the potential tax consequences of investing in or holding our ordinary shares or ADSs.

If we are a passive foreign investment company, there could be adverse U.S. federal income tax consequences to U.S. holders.

        Based on our analysis of our income, assets, activities and market capitalization, we believe that we were not classified as a passive foreign investment company, or PFIC, for the taxable year ending December 31, 2018 and we believe that we will not be classified as a PFIC for the taxable year ending December 31, 2019; however, there can be no assurance that we will not be considered a PFIC for any future taxable year. Under the Code, a non-U.S. company will be considered a PFIC for any taxable year in which (1) 75% or more of its gross income consists of passive income or (2) 50% or more of the average quarterly value of its assets consists of assets that produce, or are held for the production of, passive income. For purposes of these tests, passive income includes dividends, interest, gains from the sale or exchange of investment property and certain rents and royalties. In addition, for purposes of the above calculations, a non-U.S. corporation that directly or indirectly owns at least 25% by value of the shares of another corporation is treated as if it held its proportionate share of the assets and received directly its proportionate share of the income of such other corporation. If we are a PFIC for any taxable year during which a U.S. holder (as defined below under "Material United States Federal Income Tax and French Tax Considerations—Material U.S. Federal Income Tax Considerations") holds our ordinary shares or ADSs, we will continue to be treated as a PFIC with respect to such U.S. holder in all succeeding years during which the U.S. holder owns the ordinary shares or ADSs, regardless of whether we continue to meet the PFIC test described above, unless the U.S. holder makes a specified election once we cease to be a PFIC. If we are classified as a PFIC for any taxable year during which a U.S. holder holds our ordinary shares or ADSs, the U.S. holder may be subject to adverse tax consequences regardless of whether we continue to qualify as a PFIC, including ineligibility for any preferred tax rates on capital gains or on actual or deemed dividends, interest charges on certain taxes

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treated as deferred, and additional reporting requirements. For further discussion of the PFIC rules and the adverse U.S. federal income tax consequences in the event we are classified as a PFIC, see the section of this prospectus titled "Material United States Federal Income Tax and French Tax Considerations—Material U.S. Federal Income Tax Considerations".

If a United States person is treated as owning at least 10% of our ordinary shares, such holder may be subject to adverse U.S. federal income tax consequences.

        If a U.S. holder is treated as owning, directly, indirectly or constructively, at least 10% of the value or voting power of our ordinary shares or ADSs, such U.S. holder may be treated as a "United States shareholder" with respect to each "controlled foreign corporation" in our group, if any. Our group currently includes one U.S. subsidiary and, therefore, under current law our non-U.S. subsidiaries should be treated as controlled foreign corporations, regardless of whether we are treated as a controlled foreign corporation. A United States shareholder of a controlled foreign corporation may be required to annually report and include in its U.S. taxable income its pro rata share of "Subpart F income," "global intangible low-taxed income" and investments in U.S. property by controlled foreign corporations, regardless of whether we make any distributions. An individual that is a United States shareholder with respect to a controlled foreign corporation generally would not be allowed certain tax deductions or foreign tax credits that would be allowed to a United States shareholder that is a U.S. corporation. Failure to comply with controlled foreign corporation reporting obligations may subject a United States shareholder to significant monetary penalties. We cannot provide any assurances that we will furnish to any United States shareholder information that may be necessary to comply with the reporting and tax paying obligations applicable under the controlled foreign corporation rules of the Code. U.S. holders should consult their tax advisors regarding the potential application of these rules to their investment in our ordinary shares or ADSs.

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 hurt our business, lessen investor confidence and depress the market price of our securities.

        As a public company, 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, as a public company listed in the United States, the Sarbanes-Oxley Act will require, among other things, that we assess the effectiveness of our internal control over financial reporting at the end of each fiscal year. Depending on the success of our listing in the U.S .market, we may have to start reporting under Section 404 of the Sarbanes Oxley Act as early as for the year ending December 31, 2020 and the filing of our second annual report on Form 20-F with the SEC.

        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 are in the process of designing, implementing, and testing the internal control over financial reporting required to comply with this obligation. This process is 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 the global 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 public company listed in the United States.

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        In connection with the audit of our consolidated financial statements as of and for the year ended December 31, 2018, our independent registered public accounting firm identified a control deficiency in our internal control over financial reporting that constituted a material weakness in our internal control over financial reporting. As defined in the standards established by the U.S. Public Company Accounting Oversight Board, a material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our financial statements will not be prevented or detected on a timely basis.

        Our independent registered public accounting firm identified the material weakness attributable to our lack of expertise regarding complex and unusual IFRS accounting treatment for our convertible bonds and their associated deferred tax impacts. As such, our controls over financial reporting were not designed or operating effectively, and as a result there was an error in our previously issued financial statements for the year ended December 31, 2017 that required us to restate our financial statements for that year. Additional information describing this matter is included in Note 2.3 to our consolidated financial statements contained in this prospectus.

        We have historically retained the services of an external consultant to assist us with complex and unusual IFRS accounting treatment, such as in the case of our convertible bonds. In an effort to remediate our material weakness, we intend to engage additional personnel, both internal and external, with appropriate training, as well as to redesign our supervision controls, including with respect to the documentation of assumptions used and the development of accounting positions, and to reassess the necessary qualifications for any external consultants. There can be no assurance that we will be successful in pursuing these measures or that these measures will significantly improve or remediate the material weakness described above. There is also no assurance that we have identified all of our material weaknesses or that we will not in the future have additional material weaknesses.

        If we fail to remediate the material weakness or to meet the demands that will be placed upon us as a public company, including the requirements of the Sarbanes-Oxley Act, we may be unable to accurately report our financial results, or report them within the timeframes required by law or stock exchange regulations. Failure to comply with Section 404 of the Sarbanes-Oxley Act could also potentially subject us to sanctions or investigations by the SEC or other regulatory authorities. There is no assurance that we will be able to remediate the material weakness in a timely manner, or at all, or that in the future, additional material weaknesses will not exist or otherwise be discovered. If our efforts to remediate the material weakness identified are not successful, or if other material weaknesses or other deficiencies occur, our ability to accurately and timely report our financial position could be impaired, which could result in our failure to meet our reporting obligations in a timely manner under the Exchange Act, additional restatements of our consolidated financial statements, a decline in our stock price, suspension or delisting of our common stock from the Nasdaq Global Market, and could adversely affect our reputation, results of operations and financial condition.

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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 elafibranor, our IVD test and our other drug candidates;

    the initiation, timing, progress and results of our preclinical studies and clinical trials, including the timing of availability of data from our clinical trials;

    our ability to successfully expand and advance our pipeline of drug candidates;

    the timing of our planned regulatory filings;

    the timing of and our ability to obtain and maintain regulatory approvals;

    the clinical utility and market acceptance of our drug candidates and IVD test;

    the potential clinical utility of our product candidates and their potential advantages over existing therapies as well as those in development;

    our ability to establish and maintain manufacturing and supply arrangements for our product candidates;

    the ability of third parties with whom we contract to successful conduct, supervise and monitor clinical trials for our product candidates;

    the potential benefits of strategic collaboration agreements and our ability to enter into strategic arrangements;

    the effects of increased competition as well as innovations by new and existing competitors in our industry;

    our ability to maintain, protect and enhance our intellectual property rights and propriety technologies and to operate our business without infringing the intellectual property rights and proprietary technology of third parties;

    our estimates regarding future revenues, expenses and needs for additional financing;

    our expected use of proceeds of the global offering; and

    other risks and uncertainties, including those listed under the caption "Risk Factors."

        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

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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 the global offering.

        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 the global offering of approximately €106.0 million ($119.2 million), assuming an offering price of $26.33 per ADS in the U.S. offering, corresponding to €23.42 per ordinary share, which was the closing price of our ordinary shares on Euronext Paris on March 13, 2019, in the European private placement (assuming an exchange rate of €1.00 = $1.1243, the exchange rate on March 8, 2019), after deducting estimated underwriting commissions and estimated offering expenses payable by us, and assuming no exercise of the underwriters' option to purchase 750,000 additional ADSs and/or ordinary shares. If the underwriters exercise in full their option to purchase additional ADSs and/or ordinary shares in the global offering, we estimate that we will receive net proceeds from the global offering of approximately €122.3 million ($137.5 million), assuming an offering price of $26.33 per ADS in the U.S. offering, corresponding to €23.42 per ordinary share, which was the closing price of our ordinary shares on Euronext Paris on March 13, 2019, in the European private placement (assuming an exchange rate of €1.00 = $1.1243), after deducting underwriting commissions and estimated offering expenses payable by us.

        Each $1.00 (€0.8894) increase or decrease in the assumed offering price of $26.33 per ADS in the U.S. offering would increase or decrease our net proceeds from the global offering by €4.1 million ($4.7 million), assuming the number of ordinary shares offered by us (which may be in the form of ADSs), 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. Subject to applicable law, we may also increase or decrease the number of ordinary shares (including ordinary shares in the form of ADSs) we are offering. An increase (decrease) of 1,000,000 ordinary shares (including ordinary shares in the form of ADSs) offered by us in the global offering would increase (decrease) the net proceeds to us by €21.8 million (€21.8 million) or $24.5 million ($24.5 million), assuming that the assumed offering price remains the same and after deducting estimated underwriting commissions and estimated offering expenses payable by us. The actual net proceeds payable to us will adjust based on the actual number of ordinary shares (including ordinary shares in the form of ADSs) offered by us in the global offering, the actual offering price and other terms of the global offering determined at pricing. We currently expect to use the net proceeds from the global offering as follows:

    approximately €13.3 million ($15.0 million) to prepare for the potential commercialization of elafibranor in NASH by building out our commercial infrastructure;

    approximately €44.5 million ($50.0 million) to complete our ongoing Phase 3 clinical development of elafibranor for the treatment of NASH through to, at least, the submission of an NDA to the FDA and EMA and the launch of the Phase 4 clinical trial;

    approximately €31.1 million ($35.0 million) to conduct and complete our planned global Phase 3 clinical trial of elafibranor for the treatment of PBC;

    approximately €5.3 million ($6.0 million) to advance the commercial development of our IVD test to identify NASH patients through the launch of the LDT and completion of the work required to obtain regulatory approval for our IVD kit;

    approximately €5.3 million ($6.0 million) to advance our research program on the use of elafibranor as a potential backbone for combination therapies in order to launch two proof-of-concept studies; and

    the remainder, if any, for working capital and for general corporate purposes.

        Even with the expected net proceeds from the global offering, and depending on our ability to generate sufficient revenues from the future potential commercialization of our drug candidates and IVD test, we may need to raise additional capital in the future to develop and commercialize our drug candidates and IVD test, including future clinical trials that may be required by regulatory authorities.

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We have based these estimates on assumptions that may prove to be incorrect, and we could use our available capital resources sooner than we currently expect.

        This expected use of the net proceeds from the global offering represents our intentions based upon our current plans and business conditions. 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 global offering or the amounts that we will actually spend on the uses set forth above. The amounts and timing of our actual expenditures and the extent of clinical development may vary significantly depending on numerous factors, including the progress of our development efforts, the status of and results from preclinical studies and any ongoing clinical trials or clinical trials we may commence in the future, as well as any collaborations that we may enter into with third parties for our drug candidates and any unforeseen cash needs. As a result, our future financing needs remain uncertain and our management will retain broad discretion over the allocation of the net proceeds from the global offering.

        Pending our use of the net proceeds from the global 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 equity securities 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, 12, 32, 40 and 41 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.

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CAPITALIZATION

        The following table sets forth our cash and cash equivalents and capitalization as of December 31, 2018:

    on an actual basis; and

    on an as adjusted basis to reflect (i) the issuance and sale of a total of 5,000,000 ordinary shares, consisting of (a)                         ADSs in the U.S. offering at an assumed offering price of $26.33 per ADS, and (b)                          ordinary shares in the European private placement at an assumed offering price of €23.42 per ordinary share, which was the closing price of our ordinary shares on Euronext Paris on March 13, 2019 (assuming an exchange rate of €1.00 = $1.1243, the exchange rate on March 8, 2019), after deducting estimated underwriting commissions and estimated offering expenses payable by us and (ii) the application of net proceeds from the global offering described under "Use of Proceeds."

        Our capitalization following the global offering will be adjusted based on the actual offering price and other terms of the global offering determined at pricing, including the amount by which actual offering expenses are higher or lower than estimated. The table should be read in conjunction with the information contained in "Use of Proceeds," "Selected Consolidated Financial Data" and "Management's Discussion and Analysis of Financial Condition and Results of Operations," as well as our consolidated financial statements and the related notes included elsewhere in this prospectus.

 
  As of December 31, 2018  
(in thousands of euros)
  Actual   As Adjusted(1)  

Cash and cash equivalents

  207,240   313,248  

Total debt, including current portion

  169,593   169,593  

Shareholders' equity:

             

Share capital, nominal value €0.25 per share; 31,183,921 shares issued and outstanding, actual; 36,183,921 shares issued and outstanding, as adjusted

    7,796     9,046  

Share premium net of treasury shares

    250,824     355,582  

Accumulated deficit

    (158,167 )   (158,167 )

Currency translation adjustment

    6     6  

Net loss

    (79,521 )   (79,521 )

Total shareholders' equity

    20,939     126,947  

Total capitalization

  190,532   296,540  

(1)
Each $1.00 (€0.8894) increase or decrease in the assumed offering price of $26.33 per ADS in the U.S. offering, corresponding to €23.42 per ordinary share, which was the closing price of our ordinary shares on Euronext Paris on March 13, 2019, in the European private placement, would increase or decrease each of as adjusted cash and cash equivalents, total shareholders' equity and as adjusted total capitalization by €4.1 million ($4.7 million), assuming that the number of ordinary shares offered by us (including ordinary shares in the form of ADSs), as set forth on the cover page of this prospectus, remains the same and after deducting estimated underwriting commissions and estimated offering expenses payable by us. Subject to applicable law, we may also increase or decrease the number of ordinary shares (including ordinary shares in the form of ADSs) we are offering. Each increase (decrease) of 1,000,000 ordinary shares (including ordinary shares in the form of ADSs) offered by us would increase (decrease) each of as adjusted cash and cash equivalents, total shareholders' equity and as adjusted total capitalization by €21.8 million (€21.8 million), or $24.5 million ($24.5 million), assuming that the assumed offering price remains

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    the same, and after deducting underwriting commissions and estimated offering expenses payable by us. Each increase of 1,000,000 ordinary shares (including ordinary shares in the form of ADSs) offered by us together with an associated $1.00 (€0.8894) increase in the assumed offering price of $26.33 per ADS in the U.S. offering, corresponding to €23.42 per ordinary share, which was the closing price of our ordinary shares on Euronext Paris on March 13, 2019, in the European private placement, would increase each of as adjusted cash and cash equivalents, total shareholders' equity and as adjusted total capitalization by €26.7 million ($30.1 million), after deducting estimated underwriting commissions and estimated offering expenses payable by us. Each decrease of 1,000,000 ordinary shares (including ordinary shares in the form of ADSs) offered by us together with an associated $1.00 (€0.8894) decrease in the assumed offering price of $26.33 per ADS in the U.S. offering, corresponding to €23.42 per ordinary share, which was the closing price of our ordinary shares on Euronext Paris on March 13, 2019, in the European private placement, would decrease each of as adjusted cash and cash equivalents, total shareholders' equity and as adjusted total capitalization by €25.1 million ($28.2 million), after deducting estimated underwriting commissions and estimated offering expenses payable by us. The as adjusted information discussed above is illustrative only and will change based on the actual offering price, the actual number of ordinary shares offered by us (including ordinary shares in the form of ADSs), and other terms of the global offering determined at pricing.

        The number of ordinary shares (including ordinary shares in the form of ADSs) that will be outstanding after the global offering is based on 31,183,921 ordinary shares outstanding as of December 31, 2018 and excludes:

    548,882 new ordinary shares issuable upon the exercise of redeemable share warrants (BSAAR), share warrants (BSA), free shares and stock options granted but not exercised as of December 31, 2018 at a weighted average exercise price of €19.72 ($22.59) per new ordinary share based on the exchange rate in effect as of December 31, 2018 (this weighted average exercise price does not include the 83,726 new ordinary shares issuable upon the vesting of outstanding free shares that may be issued for free with no exercise price paid);

    200,066 ordinary shares reserved for future issuance under our share-based compensation plans and other delegations of authority from our shareholders; and

    9,000,000 ordinary shares reserved to date pursuant to a delegation of authority from our shareholders for share capital increases by us through rights issuances and public or private offerings.

        Except as otherwise noted, the information in this prospectus assumes no exercise by the underwriters of their option to purchase additional ordinary shares (which may be in the form of ADSs).

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DILUTION

        If you invest in our ADSs or ordinary shares in the global offering, your ownership interest will be diluted to the extent of the difference between the offering price per ADS or ordinary share paid by purchasers in the global offering and the as adjusted net tangible book value per ADS or ordinary share, as applicable, after completion of the global offering. Our net tangible book value as of December 31, 2018 was €20.1 million ($23.0 million), or €0.64 per ordinary share (equivalent to $0.74 per ADS), based on the exchange rate in effect as of December 31, 2018. 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 December 31, 2018, or 31,183,921 ordinary shares.

        After giving effect to our sale of a total of 5,000,000 ordinary shares, consisting of (i)               ADSs in the U.S. offering at an assumed offering price of $26.33 per ADS, and (ii)               ordinary shares in the European private placement at an assumed offering price of €23.42 per ordinary share, which was the closing price of our ordinary shares on Euronext Paris on March 13, 2019, and after deducting estimated underwriting commissions and estimated offering expenses payable by us, our as adjusted net tangible book value at December 31, 2018 (based on the exchange rate in effect as of December 31, 2018) would have been €126.2 million ($142.3 million), or €3.49 per ordinary share (equivalent to $3.93 per ADS). This represents an immediate increase in net tangible book value of €2.85 per ordinary share (equivalent to $3.19 per ADS) to existing shareholders and an immediate dilution in net tangible book value of €19.93 per ordinary share (equivalent to $22.40 per ADS) to new investors.

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

 
  As of December 31, 2018  
 
  Per Ordinary
Share
  Per ADS  

Assumed offering price

        23.42         $ 26.33  

Historical net tangible book value per ordinary share or ADS as of December 31, 2018

  0.64         $ 0.74        

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

    2.85           3.19        

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

          3.49           3.93  

Dilution in as adjusted net tangible book value per ordinary share or ADS to new investors participating in the global offering

        19.93         $ 22.40  

        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 (€0.8894) increase (decrease) in the assumed offering price of $26.33 per ADS in the U.S. offering corresponding to €23.42 per ordinary share, the closing price of our ordinary shares on Euronext Paris on March 13, 2019, in the European private placement, would further increase (decrease) our as adjusted net tangible book value by €4.1 million (€4.1 million) or $4.7 million ($4.7 million), or €0.11 (€0.11) per ordinary share (equivalent to $0.13 ($0.13) per ADS), and the dilution to new investors participating in the global offering would be €20.71 per ordinary share (equivalent to $23.27 per ADS), assuming that the number of ordinary shares offered by us (including ordinary shares in the form of ADSs), as set forth on the cover page of this prospectus, remains the same, and after deducting estimated underwriting commissions and estimated offering expenses payable by us. Subject to applicable law, we may also increase or decrease the number of ordinary shares (including ordinary shares in the form of ADSs) we

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are offering. An increase of 1,000,000 ordinary shares (including ordinary shares in the form of ADSs) offered by us would further increase the as adjusted net tangible book value by approximately €21.8 million ($24.5 million), or €0.49 per ordinary share (equivalent to $0.55 per ADS), and the dilution to new investors participating in the global offering would be €19.44 per ordinary share (equivalent to $21.85 per ADS), assuming that the assumed offering price remains the same, and after deducting estimated underwriting commissions and estimated offering expenses payable by us. Similarly, a decrease of 1,000,000 ordinary shares (including ordinary shares in the form of ADSs) offered by us would decrease the as adjusted net tangible book value by approximately €21.8 million ($24.5 million), or €0.52 per ordinary share (equivalent to $0.58 per ADS), and the dilution to new investors participating in the global offering would be €20.45 per ordinary share (equivalent to $22.98 per ADS), assuming that the assumed offering price remains the same, and after deducting estimated underwriting commissions and estimated offering expenses payable by us. The as adjusted information discussed above is illustrative only and will change based on the actual offering price, the actual number of ordinary shares offered by us (including ordinary shares in the form of ADSs), and other terms of the global offering determined at pricing.

        If the underwriters exercise their option to purchase 750,000 additional ADSs and/or ordinary shares in full, the as adjusted net tangible book value after the global offering would be €3.86 per ordinary share (equivalent to $4.35 per ADS), the increase in the as adjusted net tangible book value to existing shareholders would be €3.22 per ordinary share (equivalent to $3.61 per ADS), and the dilution to new investors participating in the global offering would be €19.56 per ordinary share (equivalent to $21.98 per ADS).

        The following table sets forth, as of December 31, 2018, on the as adjusted basis described above, consideration paid to us in cash for ordinary shares (including ordinary shares 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 $26.33 per ADS, the closing price of our ordinary shares on Euronext Paris on March 13, 2019 (assuming an exchange rate of €1.00 = $1.1243, the exchange rate on March 8, 2019), and before deducting underwriting commissions and estimated offering expenses payable by us.

 
  Ordinary Shares
Purchased(1)
  Total
Consideration
   
   
 
 
  Average
Price Per
Ordinary
Share
   
 
 
  Average
Price
Per ADS
 
 
  Number   Percent   Amount   Percent  

Existing shareholders

    31,183,921     86 % 225,157,961     69 % 8.18        

New investors

    5,000,000     14     117,095,081     31   23.42   $ 26.33  

Total

    36,183,921     100 % 372,253,042     100 %            

(1)
Including ordinary shares in the form of ADSs.

        Each $1.00 (€0.8894) increase or decrease in the assumed offering price of $26.33 per ADS in the U.S. offering, corresponding to €23.42 per ordinary share, which was the closing price of our ordinary shares on Euronext Paris on March 13, 2019, in the European private placement (assuming the March 8, 2019 exchange rate of €1.00 = $1.1243), would increase or decrease the total consideration paid by new investors participating in the global offering by €4.4 million ($5.0 million), assuming that the number of ordinary shares offered by us (including ordinary shares in the form of ADSs), as set forth on the cover page of the prospectus, remains the same and before deducting estimated underwriting commissions and estimated offering expenses payable by us. Subject to applicable law, 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 in 1,000,000 ordinary shares (including ordinary shares in the form of ADSs) offered by us would increase or decrease the total consideration paid by

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new investors participating in the global offering by €23.4 million ($26.3 million), assuming that the assumed offering price remains the same and before deducting estimated underwriting commissions and estimated offering expenses payable by us. The as adjusted information discussed above is illustrative only and will change based on the actual offering price, the actual number of ordinary shares offered by us (including ordinary shares in the form of ADSs) and other terms of the global offering determined at pricing.

        The table above assumes no exercise of the underwriters' option to purchase 750,000 additional ADSs and/or ordinary shares in the global offering. If the underwriters exercise their option to purchase additional ADSs and/or ordinary shares in full, the number of ordinary shares (including ordinary shares in the form of ADSs) held by the existing shareholders after the global offering would be reduced to 84% of the total number of ordinary shares (including ordinary shares in the form of ADSs) outstanding after the global offering, and the number of ordinary shares (including ordinary shares in the form of ADSs) held by new investors participating in the global offering would increase to 16% of the total number of ordinary shares (including ordinary shares in the form of ADSs) outstanding after the global offering.

        Other than translations of the assumed offering price into U.S. dollars and translations of corresponding proceeds of the global offering, which are determined at the exchange rate of €1.00 = $1.1243, the noon buying rate of the Federal Reserve Bank of New York on March 8, 2019, translations included in "Dilution" are calculated based on the exchange rate of €1.00 = $1.1456, the noon buying rate of the Federal Reserve Bank of New York on December 31, 2018.

        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 the global offering, which is based on 31,183,921 ordinary shares outstanding as of December 31, 2018 and excludes:

    548,882 new ordinary shares issuable upon the exercise of redeemable share warrants (BSAAR), share warrants (BSA), free shares and stock options granted but not exercised as of December 31, 2018 at a weighted average exercise price of €19.72 ($22.59) per new ordinary share based on the exchange rate in effect as of December 31, 2018 (this weighted average exercise price does not include the 83,726 new ordinary shares issuable upon the vesting of outstanding free shares that may be issued for free with no exercise price paid);

    200,066 ordinary shares reserved for future issuance under our share-based compensation plans and other delegations of authority from our shareholders; and

    9,000,000 ordinary shares reserved to date pursuant to a delegation of authority from our shareholders for share capital increases by us through rights issuances and public or private offerings.

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SELECTED CONSOLIDATED FINANCIAL DATA

        The following selected consolidated statement of operations data for the years ended December 31, 2017 and 2018 and selected consolidated statement of financial position data as of December 31, 2017 and 2018 have been derived from our audited consolidated financial statements included elsewhere in this prospectus. Our audited consolidated financial statements have been prepared in accordance with International Financial Reporting Standards, or IFRS, as issued by the International Accounting Standards Board, or IASB, as of and for the years ended December 31, 2017 and 2018.

        The following selected consolidated financial data for the years and as of the dates indicated are qualified by reference to and should be read in conjunction with our consolidated financial statements and related notes beginning on page F-1 of this prospectus, as well as the sections titled "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Exchange Rate Information" included elsewhere in this prospectus. Our historical results and the results for the year ended December 31, 2018 are not necessarily indicative of our results to be expected for any future period.

Selected Consolidated Statement of Operations Data:

 
  Year Ended December 31,  
(in thousands, except loss per share data)
  2017   2018  
 
  Restated*
   
 

Revenues and other income

             

Revenue

  118   69  

Other income

    6,737     7,425  

Revenues and other income

    6,856     7,494  

Operating expenses and other operating income (expenses)

             

Research and development expenses

    (54,189 )   (67,024 )

General and administrative expenses

    (9,421 )   (9,793 )

Other operating income (expenses)

    60     (162 )

Operating loss

    (56,695 )   (69,484 )

Financial income

    642     728  

Financial expenses

    (3,096 )   (11,118 )

Financial loss

    (2,453 )   (10,391 )

Net loss before tax

    (59,148 )   (79,875 )

Income tax benefit

    3,420     354  

Net loss

  (55,728 ) (79,521 )

Basic and diluted loss per share

  (1.79 ) (2.55 )

(*)
In the context of the preparation of its 2018 consolidated financial statements, we restated the financial statements previously published for the 2017 fiscal year under IFRS. These changes do not affect the cash position or the operating results, and are mainly related to the application of IFRS to deferred taxes on the OCEANE bonds issued in October 2017. The corrections lead mainly to a decrease in the consolidated net loss of €2.9 million. More information is provided in Note 2.3 to our consolidated financial statements.

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Selected Consolidated Statement of Financial Position Data:

 
  As of December 31,  
(in thousands of euros)
  2017   2018  

Cash and cash equivalents

  273,820   207,240  

Total assets

    293,183     229,478  

Total shareholders' equity

    101,457     20,939  

Total non-current liabilities

    164,620     169,291  

Total current liabilities

    27,106     39,248  

Total liabilities

    191,726     208,539  

Total liabilities and shareholders' equity

    293,183     229,478  

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

        You should read the following discussion and analysis of our financial condition and results of operations together with our consolidated financial statements and the related notes included elsewhere in this prospectus. Some of the information contained in this discussion and analysis or set forth elsewhere in this prospectus, including information with respect to our plans and strategy for our business and related financing, includes forward-looking statements that involve risks and uncertainties. As a result of many factors, including those factors set forth in the "Risk Factors" section of this prospectus, our actual results could differ materially from the results described in or implied by these forward-looking statements.

        Our audited consolidated financial statements have been prepared in accordance with IFRS, as issued by the IASB, as of and for the years ended December 31, 2017 and 2018.

Overview

        We are a late-stage clinical biopharmaceutical company dedicated to the discovery and development of innovative drug candidates and diagnostic solutions targeting metabolic and liver-related diseases where there is considerable unmet medical need. We are a leader in the field of nuclear receptor-based drug discovery with a rich history and strong scientific heritage spanning almost two decades. We are evaluating our most advanced drug candidate, elafibranor, in a pivotal Phase 3 clinical trial as a potential treatment for nonalcoholic steatohepatitis, or NASH, and as a potential treatment for primary biliary cholangitis, or PBC. In December 2018, we announced positive preliminary results from our Phase 2 clinical trial in PBC. Our drug discovery efforts are based on selecting appropriate nuclear receptors as targets and utilizing rational drug design to optimize our drug candidates. A key differentiator of our development strategy is our NASH biomarker-based diagnostic program, in which we are developing a new in vitro diagnostic, or IVD, test to identify patients with NASH who may be appropriate candidates for drug therapy. Our scientific and clinical expertise, translational disease-driven approach and strong bioinformatics capabilities have allowed us to build a scientific platform through which we discover and develop our drug candidates and diagnostic tools. We believe elafibranor, if approved, has the potential to become a first-line treatment as a monotherapy and the backbone of combination regimens.

        Elafibranor, a dual agonist of the nuclear receptors PPARa and PPARd, is currently in Phase 3 development for the treatment of NASH. In our Phase 2b clinical trial, elafibranor achieved resolution of NASH without worsening of fibrosis, which is the primary endpoint of our ongoing global Phase 3 clinical trial. We have already achieved the enrollment necessary to perform an interim cohort analysis and expect to report interim results by the end of 2019. We believe these results, if positive, could support accelerated approval from the U.S. Food and Drug Administration, or FDA, and conditional approval from the European Medicines Agency, or EMA, as early as 2020. Elafibranor has received fast track designation from the FDA for the treatment of NASH.

        We are also developing elafibranor for the treatment of PBC, a chronic, progressive liver disease that leads to inflammation and scarring of the small bile ducts in the liver. Although a relatively rare disease mainly affecting women, PBC can develop into cirrhosis and other serious liver complications. There is currently no cure for PBC, and the two drugs approved for the treatment of PBC are limited by drug intolerance, lack of patient response and safety issues. Based on our clinical data, we believe elafibranor's unique mechanism of action can provide benefits for patients with PBC without significant side effects, such as the serious liver injury or death and pruritis that have been associated with approved PBC treatments. In December 2018, we announced positive preliminary results from our Phase 2 clinical trial of elafibranor for the treatment of PBC. Elafibranor met the primary endpoint of the trial, which was the change at week 12 in serum alkaline phosphatase, or ALP, from baseline, with statistical significance compared to placebo in both doses evaluated. Elafibranor also achieved with high

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statistical significance compared to placebo, the composite endpoint of ALP and bilirubin. That endpoint, which has been used for drug registration, is defined as (1) ALP less than 1.67 times the upper limit of normal, or ULN, (2) total bilirubin within normal limits and (3) a reduction of ALP of more than 15%. Based on these positive results, we plan to advance our PBC program into Phase 3 development.

        NASH is a silent disease. Patients often have no symptoms until the first signs of liver failure, and the lack of an accurate, non-invasive diagnosis tool contributes to under-diagnosis. Currently, liver biopsy is the standard for diagnosis, and variation in clinical practice and physician reluctance lead to under-diagnosis. Our blood-based IVD test is a novel, standalone diagnostic that we believe can address the urgent need for a non-invasive, cost-effective, accessible and validated test to identify NASH patients who may be appropriate candidates for drug intervention, thereby decreasing the need for liver biopsy. We believe our IVD test has the potential to benefit patients, improve overall clinical care and greatly reduce barriers to entry for innovative therapies like elafibranor by facilitating the diagnosis and identification of NASH patients to be treated. We anticipate submitting our IVD test for FDA marketing authorization in 2020.

        We are also conducting a clinical-stage program based on drug repositioning to develop an anti-fibrotic drug. Our lead drug candidate in this program, nitazoxanide, or NTZ, is an approved anti-parasitic agent that has shown promising activity against fibrosis in our preclinical disease models. An investigator-initiated Phase 2 proof-of-concept trial to evaluate NTZ for the treatment of NASH patients with significant fibrosis began in December 2018.

        Our TGFTX1 preclinical program is focused on the discovery and development of innovative drug candidates targeting RORgt, a nuclear receptor involved in certain inflammatory and autoimmune diseases. We are currently conducting pre-IND studies for a potential topical treatment of mild to moderate psoriasis.

        We have never generated any revenues from product sales. We do not expect to generate material revenue from product sales unless and until we successfully complete clinical development of, obtain marketing approval for and commercialize our drug candidates and IVD test. Clinical development, regulatory approval and commercial launch of a product candidate can take several years and are subject to significant uncertainty. Historically, we have financed our operations and growth through issuances of share capital and convertible bonds, through conditional advances and subsidies from BPI France and from research tax credits. In 2006, we completed the initial public offering of our ordinary shares on the Alternext market of Euronext in Paris and transferred to the Euronext Paris in April 2014. Between 2010 and 2016, we raised a total of over €220 million in gross proceeds from the issuance of ordinary shares. In October 2017, we issued €180 million in convertible bonds.

        Since our inception, we have incurred significant operating losses. Our net loss was €79.5 million for the year ended December 31, 2018. We expect to incur significant expenses and substantial operating losses over the next several years as we continue our research and development efforts and advance the clinical development of elafibranor, as well as our IVD test and our other drug candidates, in the United States, Europe and elsewhere.

Financial Operations Overview

Revenue and Other Income

        During the years ended December 31, 2017 and 2018, our revenue of €0.1 million in each period consisted primarily of revenue from the sublease of a portion of our corporate headquarters in Loos, France. We terminated this sublease effective as of June 30, 2018 and do not expect to receive any further sublease revenue.

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        We do not expect to receive any revenue from any of our product candidates until we obtain regulatory approval and commercialize such products, or until we potentially enter into collaborative agreements with third parties for the development and commercialization of such candidates.

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

CIR Research Tax Credit

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

        The main characteristics of the CIR are the following:

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

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

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

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

CICE Tax Credit

        We also recognize income relating to the Crédit d'impôt pour la compétitivité et l'emploi, or CICE, which is a tax credit implemented by French tax authorities to enhance the competitiveness of businesses through the promotion of certain activities and employment. In 2017, the tax credit was equal to 7% of wages paid to employees during the year in respect of salaries that do not exceed 2.5 times the French minimum wage. For 2018, the applicable tax credit was equal to 6% of eligible wages. We use this tax credit to finance the increases in our headcount and to purchase scientific equipment.

Aide à L'embauche Grant

        We recognize income related to l'aide à l'embauche, a subsidy granted in 2017 by French tax authorities to companies with less than 250 employees which hire new employees whose wages do not exceed 1.3 times the French minimum wage.

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Operating Expenses

Research and Development Expenses

        We engage in substantial research and development efforts to develop our drug and diagnostic candidates. Research and development expenses include:

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

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

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

    grants to The NASH Education Program for the year 2017 (primarily for the purpose of the creation of a NASH patient registry in particular to increase understanding of the prevalence and natural history of NASH/NAFLD, and the development of co-morbidities historically linked to NASH/NAFLD, which information is to be used as part of the efforts to collect RWE (Real World Evidence) data to better address the needs of the patients; and

    intellectual property fees related to the filing of patents.

        Research and development activities are central to our business model. Drug candidates in later stages of clinical development generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials, such as our global Phase 3 clinical trial of elafibranor for the treatment of NASH. We expect that our research and development expenses will continue to increase in the foreseeable future as we initiate clinical trials for certain drug candidates, pursue later stages of clinical development of other drug candidates and progress the development of our diagnostic test.

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

General and Administrative Expenses

        General and administrative expenses include:

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

    facility-related costs;

    grants to The NASH Education Program for 2018, primarily to support the creation of the first International NASH Day;

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

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

        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 drug and diagnostic candidates. We also anticipate increased expenses associated with being a public company in the United States, including costs related to audit,

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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. In particular, we will need to incur additional accounting expenses to comply with the Sarbanes-Oxley Act of 2002 in the United States that will require us to test the effectiveness of our internal controls over financial reporting.

Financial Income (Expense)

        Financial income relates primarily to interest income received from cash and cash equivalents deposits. Our cash and cash equivalents have been deposited primarily in cash accounts and term deposit accounts with short maturities and therefore generate only a modest amount of interest income.

        Financial expense relates primarily to interest expense on our outstanding convertible bonds as well as interest expense for bank loans and equipment leases. We also incur foreign exchange gains and losses related to our purchases of services in U.S. dollars, which amounts are recorded as financial income or expense.

Results of Operations for the Years Ended December 31, 2017 and 2018

        Our results of operations for the years ended December 31, 2017 and 2018 are summarized in the table below.

 
  Year Ended
December 31,
 
(in thousands of euros)
  2017   2018  
 
  Restated*
   
 

Revenues and other income
             

Revenue

  118   69  

Other income

    6,737     7,425  

Revenues and other income

    6,856     7,494  

Operating expenses and other operating income (expenses)
         
 
 

Research and development expenses

    (54,189 )   (67,024 )

General and administrative expenses

    (9,421 )   (9,793 )

Other operating income (expenses)

    60     (162 )

Operating loss

    (56,695 )   (69,484 )

Financial income

    642     728  

Financial expenses

    (3,096 )   (11,118 )

Financial loss

    (2,453 )   (10,391 )

Net loss before tax

    (59,148 )   (79,875 )

Income tax benefit

    (3,420 )   354  

Net loss

  (55,728 ) (79,521 )

(*)
In the context of the preparation of its 2018 consolidated financial statements, we restated the financial statements previously published for the 2017 fiscal year under IFRS. These changes do not affect the cash position or the operating results, and are mainly related to the application of IFRS to deferred taxes on the OCEANE bonds issued in October 2017. The corrections lead mainly to a decrease in the consolidated net loss of €2.9 million. More information is provided in Note 2.3 of our consolidated financial statements.

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Revenue

        Revenue of €118,000 and €69,000 during the years ended December 31, 2017 and 2018, respectively, was primarily the result of our subleasing a part of our corporate headquarters in Loos, France.

Other Income

        Other income for the years ended December 31, 2017 and 2018 consisted of the following:

 
  Year Ended
December 31,
 
(in thousands of euros)
  2017   2018  

CIR tax credit

  6,545   7,295  

CICE tax credit and other

    171     130  

Other government grants and subsidies

    21      

TOTAL

  6,737   7,425  

Operating Expenses

        The tables below summarize our operating expenses for the years ended December 31, 2017 and 2018.

Year Ended December 31, 2017

Operating expenses
and other operating
income (expenses)
(in thousands of
euros)
  Total   Raw
materials &
consumables
used
  Contracted
research &
development
activities
conducted
by third
parties
  Employee
expenses
  Other expenses
(maintenance, fees,
travel, taxes)
  Depreciation,
amortization &
impairment
charges
  Gain / (loss)
on disposal of
property,
plant &
equipment
 

Research and development expenses

  (54,189 ) (2,117 ) (35,088 ) (7,915 ) (7,973 ) (1,095 )  

General and administrative expenses

    (9,421 )   (112 )   (7 )   (5,491 )   (3,374 )   (437 )    

Other operating income (expenses)

    60                 68         (8 )

TOTAL

  (63,550 ) (2,229 ) (35,095 ) (13,406 ) (11,280 ) (1,532 ) (8 )

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Year Ended December 31, 2018

Operating expenses
and other operating
income (expenses)
(in thousands of
euros)
  Total   Raw
materials &
consumables
used
  Contracted
research &
development
activities
conducted
by third
parties
  Employee
expenses
  Other expenses
(maintenance, fees,
travel, taxes)
  Depreciation,
amortization &
impairment
charges
  Gain/(loss)
on disposal of
property,
plant &
equipment
 

Research and development expenses

  (67,024 ) (1,724 ) (47,659 ) (9,431 ) (6,502 ) (1,707 )  

General and administrative expenses

    (9,793 )   (130 )   (2 )   (4,194 )   (5,738 )   272      

Other operating income (expenses)

    (162 )               (164 )       2  

TOTAL

  (76,979 ) (1,855 ) (47,662 ) (13,625 ) (12,403 ) (1,435 ) 2  

Research and Development Expenses

        Research and development expenses totaled €54.2 million, or 85% of our total operating expenses, for the year ended December 31, 2017. These expenses consisted primarily of €35.1 million in contracted research and development activities conducted by third parties, the substantial majority of which were incurred in connection with the advancement of our RESOLVE-IT Phase 3 clinical trial of elafibranor for the treatment of NASH. We also incurred €7.9 million of employee-related expenses, consisting of wages, salaries, social security and pension costs and share-based compensation paid to employees in research and development functions. Other expenses of €8.0 million consisted primarily of maintenance and other facility costs, as well as employee travel expenses and third-party fees incurred for seconded employees in research and development functions.

        Research and development expenses totaled €67.0 million, or 87% of our total operating expenses, for the year ended December 31, 2018. These expenses consisted primarily of €47.7 million in contracted research and development conducted by third parties, the substantial majority of which were incurred in connection with the progression of our RESOLVE-IT Phase 3 clinical trial of elafibranor for the treatment of NASH and the increase in contracted research and development expenses resulting from the progression of the research and development program pipeline, of which the majority related to expenses for the phase 3 elafibranor trial in NASH, and to a lesser extent, the phase 2 trial of elafibranor in PBC and the launch of the phase 2 trial of nitazoxanide. The increase of €12.6 million over the prior year reflects the advancement of these clinical trials. We also incurred €9.4 million of employee-related expenses, consisting of wages, salaries, social security and pension costs and share-based compensation paid to employees in research and development functions and patents. This increase of €1.5 million of employee-related expenses over the prior year was primarily due to the expansion of our workforce in the research and development functions. Other expenses of €6.5 million consisted primarily of maintenance and other facility costs, as well as employee travel expenses and third-party fees incurred for seconded employees in research and development functions. The decrease of €1.5 million from the prior year was primarily the result of our contribution to The NASH Education Program in 2018 being classified as general and administrative expense instead of research and development expense.

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General and Administrative Expenses

        General and administrative expenses totaled €9.4 million, or 15% of our total operating expenses, for the year ended December 31, 2017. These expenses consisted primarily of €5.5 million of employee-related expenses, consisting of wages, salaries, social security and pension costs and share-based compensation paid to employees in general and administrative functions, and as well as €3.4 million in costs and fees for third-party service providers.

        General and administrative expenses totaled €9.8 million, or 13% of our total operating expenses, for the year ended December 31, 2018. These expenses consisted primarily of €5.7 million of costs and fees for third-party service providers, as well as €4.2 million of employee-related expenses, consisting of wages, salaries, social security and pension costs and share-based compensation paid to employees in general and administrative functions. The increase of €2.4 million in other expenses was primarily the result of increases and fees and expenses in the preparation for the commercialization of elafibranor in NASH, in communication expenses, including the support to the creation of the first International NASH Day in conjunction with The NASH Education Program and expenses related to maintenance of equipment at our corporate headquarters. During the year ended December 31, 2018, we also donated €1 million to The NASH Education Program. The decrease of €1.3 million in employee-related expenses over the prior year period was primarily due to the exceptional 2017 bonuses not replicated in 2018.

Financial Income (Expense)

        Our net financial income (expense) for the year ended December 31, 2017 was €(2.5) million, consisting primarily of €(2.3) million of interest expense on our convertible bonds and bank loans and a €(0.8) million net foreign currency exchange rate loss resulting from the translation of U.S. dollars generated by the operations of our U.S. subsidiary and subcontractors into euros, offset in part by €0.4 million of interest income on our cash and cash equivalents and €0.2 million of other financial income.

        Our net financial income (expense) for the year ended December 31, 2018 was €(10.4) million, consisting primarily of €11 million of interest expense on our convertible bonds and bank loans, offset partially by €0.4 million in other financial income and €0.2 million in interest income. The increase in interest expense was due to our convertible bonds, issued in October 2017, having been outstanding for the full year ended December 31, 2018. The change in financial expenses is related to the interest on the OCEANEs, mainly due to interest payments at a rate of 3.5% and the accretion of the discounting of the bond debt at an effective interest rate of 7.29%. The accretion of bond debt consists of bringing the amount of the debt component of the bond issue to the amount that will be repaid (or converted) at maturity, by the recognition of a theoretical annual interest expense resulting from the accretion over the period of an amount equivalent to the equity component at an effective interest rate.

Liquidity and Capital Resources

Overview

        As of December 31, 2017 and 2018, we had €273.8 million and €207.2 million, respectively, in cash and cash equivalents.

        Since our inception, we have financed our operations primarily through the issuance of new ordinary shares and bonds convertible into new ordinary shares in public offerings and private financing transactions. In 2006, we completed the initial public offering of our ordinary shares on the Alternext market of Euronext in Paris. The listing of our ordinary shares was transferred to the regulated market of Euronext Paris in 2014. Between 2010 and 2016, we raised a total of over €220.0 million in gross proceeds from the issuance of additional ordinary shares for cash. In October 2017, we issued €180.0 million in bonds convertible into new ordinary shares or exchangable for existing ordinary shares.

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        We also financed our operations through historical collaborative research alliances, as well as research tax credits and subsidies granted by various public institutions, such as BPI France Institutions. We also entered into conditional and repayable advances agreements with governmental entities and had a liability of €3.4 million and €3.2 million associated with these types of arrangements as of December 31, 2017 and 2018, respectively. We also entered into loans with commercial banks and had an outstanding balance of €3.5 million and €4.0 million in bank loans as of December 31, 2017 and 2018, respectively.

        As we continue to develop, and potentially commercialize, our drug candidates and diagnostic solutions in the coming years, we will likely continue relying on some or all of these sources of financing, as well as potential milestone payments and royalties that may result from licensing agreements for our drug candidates, diagnostic solutions and results of our research programs.

Cash Flows

        The table below summarizes our cash flows for the years ended December 31, 2017 and 2018:

 
  Year Ended
December 31,
 
(in thousands of euros)
  2017   2018  

Cash flows used in operating activities

  (49,856 ) (56,081 )

Cash flows used in investing activities

    (2,948 )   (3,986 )

Cash flows provided by (used in) financing activities

    174,348     (6,514 )

  121,544   (66,580 )

Operating Activities

        Cash used in operating activities was €49.9 million and €56.1 million for the years ended December 31, 2017 and 2018, respectively. With respect to the 2017 period, this amount primarily resulted from our net loss of €55.7 million, driven largely by our significant research and development efforts during the period, adjusted by €0.6 million in non-cash expenses and other adjustments and by €5.3 million in net cash flows from changes in working capital. With respect to the 2018 period, this amount primarily resulted from our net loss of €79.5 million, again driven largely by our significant research and development efforts as we progressed our Phase 3 clinical trial of elafibranor in NASH and our Phase 2 clinical trial of elafibranor in PBC, adjusted by €13.0 million in non-cash expenses and other adjustments of €10.3 million in net cash flows from changes in working capital.

Investing Activities

        Cash used in investing activities was €2.9 million and €4.0 million for the years ended December 31, 2017 and 2018, respectively, and consisted primarily of equipment and other capital purchases and in 2018, acquisition of financial instruments.

Financing Activities

        Cash provided by financing activities was €174.3 million for the year ended December 31, 2017 and consisted of gross proceeds of €180.0 million from our issuance of convertible bonds in October 2017, partially offset by bank fees, net repayments under bank loans, conditional advances, capital leases and interest paid. For the 2018 period, cash used in financing activities was €6.5 million, which consisted primarily of €6.4 million in interest paid on our convertible bonds and €2.0 million in repayments of loans and borrowings, partially offset by €1.8 million in proceeds from new loans and borrowings.

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Operating and Capital Expenditure Requirements

        Since our inception, we have incurred significant operating losses. Our net loss was €55.7 million for the year ended December 31, 2017 and €79.5 million for the year ended December 31, 2018. We expect to incur significant expenses and substantial operating losses over the next several years as we continue our research and development efforts and advance the clinical development of elafibranor, as well as our IVD test and our other drug candidates, in the United States, Europe and elsewhere. Our net losses may fluctuate significantly from quarter to quarter and year to year, depending on the timing of our clinical trials and our expenditures on other research and development activities. We anticipate that our expenses will increase substantially in connection with our ongoing activities, as we:

    initiate and conduct our planned preclinical studies and clinical trials of our drug candidates, including our ongoing pivotal Phase 3 clinical trial of elafibranor for the treatment of NASH and our planned clinical trials of elafibranor for the treatment of PBC;

    continue and complete the validation and development of our IVD test for NASH;

    continue the research and development of our other drug candidates, including planned and future preclinical studies and clinical trials;

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

    seek regulatory approval for our IVD test and any drug candidates that successfully complete clinical trials;

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

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

    maintain, expand and protect our intellectual property portfolio;

    hire additional clinical, quality control and scientific personnel; and

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

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

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

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

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

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

    selling and marketing activities undertaken in connection with the anticipated commercialization of elafibranor and our other current or future product candidates, including other product

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      candidates in preclinical development, together with the costs involved in the creation of an effective sales and marketing organization; and

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

        For more information as to the risks associated with our future funding needs, see the section of this prospectus titled "Risk Factors."

        Until such time that we can generate substantial revenue from product sales, we expect to finance these expenses and our operating activities through a combination of our existing liquidity and the proceeds of the global offering. If we are unable to generate revenue from product sales in accordance with our expected timeframes, we will need to raise additional capital through the issuance of our shares, through other equity or debt financings or through collaborations with other companies. However, we may be unable to raise additional funds or enter into other funding arrangements when needed on favorable terms, or at all, which would have a negative impact on our financial condition and could force us to delay, limit, reduce or terminate our development programs or commercialization efforts or grant others rights to develop or market drug candidates that we would otherwise prefer to develop and market ourselves. Our ability to successfully transition to profitability will be dependent upon achieving a level of revenues adequate to support our cost structure. We cannot assure you that we will ever be profitable or generate positive cash flow from operating activities.

        Although it is difficult to predict future liquidity requirements, we believe that our existing cash and cash equivalents as of December 31, 2018 will be sufficient to fund our operations for at least the next 12 months.

Contractual Obligations

        The following table discloses aggregate information about our material contractual obligations and the periods in which payments are due as of December 31, 2018. Future events could cause actual payments and timing of payments to differ from the contractual cash flows set forth below.

Contractual obligations
(in thousands of euros)
  Less than
1 year
  1 to 3
years
  3 to 5
years
  More than
5 years
  Total  

Refundable and conditional advances

        3,229   3,229  

Convertible bonds

    1,312         159,176         160,489  

Bank loans

    1,319     2,047     598         3,964  

Equipment leases

    520     1,048     333         1,900  

Pension and employee benefits

                1,085     1,085  

Other

    10                 10  

Total liabilities

    3,161     3,095     160,108     4,314     170,678  

Operating leases

    1,213     2,426     836     316     4,791  

Total contractual obligations

  4,374   5,521   160,944   4,630   175,469  

        The nominal amount of the convertible loan of €180.0 million is due in less than 4 years.

        We enter into contracts in the normal course of business with CROs and contract manufacturing organizations, or CMOs, for clinical trials, preclinical studies and clinical manufacturing, and with vendors for precommercial activities, research and development activities, research supplies and other services and products for operating purposes. These contracts generally provide for termination upon notice. Such agreements are cancelable contracts and are not included in the contractual obligations in the foregoing table.

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        We also make donations to The NASH Education Program, the endowment fund of which we are a sponsor. Such donations are at our discretion, and we are not contractually obligated to make any such donation.

        Although for the year ended December 31, 2018, our board of directors approved a maximum grant of €1.6 million primarily to support the creation of the first International NASH Day, while also continuing to contribute funds to patient registry, our contribution was limited to €959 to The NASH Education Program during the year.

        For the year 2019, our board of directors approved a grant of an amount of €200 to the Nash Education Program.

Subsidies and Refundable and Conditional Advances

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

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

        As of December 31, 2017, we had outstanding four repayable advances from BPI France with an aggregate remaining balance of €3.4 million. As of December 31, 2018, we had outstanding one repayable advance with an amount of €3.2 million. This advance, in an amount of €3.2 million, is a conditional advance we received in our capacity as leader of a research consortium initiated in 2008 called IT-DIAB that is following patients at risk for Type 2 diabetes. The program ended on December 31, 2014. The conditional advance is not refundable except in the event of success. In the event of technical or commercial success of the consortium's activities, defined as the sale of related drugs or diagnostic devices developed using research results, we would be required to repay the advance, plus an additional specified amount, based on a percentage of any revenues generated from the licensing of such products over a 10-year period. The maximum amount that we would be required to pay under this arrangement would be €14.8 million, inclusive of the €3.2 million advance to be repaid.

Convertible Bonds

        In October 2017, we issued convertible bonds for gross proceeds of €180.0 million. The convertible bonds carry a fixed interest rate of 3.5%, with an effective interest rate of 7.3%, payable semi-annually in arrears in April and October, and have a maturity date in October 2022. Beginning in November 2020, we may, at our option, redeem the bonds prior to maturity in the event that our share price exceeds a specified amount for a 20-day trading period.

Bank Loans

        At December 31, 2017 and 2018, we had borrowed under multiple bank loans primarily intended to finance the acquisition of scientific and information technology equipment. The total principal amount outstanding was €3.5 million and €4.0 million as of December 31, 2017 and 2018, respectively. These bank loans carry fixed interest rates of between 0.36% and 2.0% and are generally payable over periods ranging from three to five years from the original date of the loan.

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Operating Leases

        Operating leases consist of real estate leases for our offices located in Loos and Paris, France and in Cambridge, Massachusetts.

Equipment Leases

        From time to time we enter into lease agreements for scientific equipment that contain a purchase option and are considered financial leases. Amounts in the table above represent minimum principal payments.

Pension and Employee Benefits

        French law requires payment of a lump sum retirement indemnity to employees based on years of service and annual compensation at retirement. Benefits do not vest prior to retirement. The amount presented in the table above represents the present value of estimated future benefits to be paid, applying a number of assumptions, including dates of expected retirement, life expectancies, salary growth rates and a discount rate.

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, or SEC, rules, such as relationships with other entities or 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 statements of financial position.

Critical Accounting Policies and Judgments and Estimates

        Our consolidated financial statements are prepared in accordance with IFRS as issued by IASB. Some of the accounting methods and policies used in preparing our consolidated 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 accumulated deficit could differ from the value derived from these estimates if conditions change and these changes had an impact on the assumptions adopted. See Note 2 to our consolidated financial statements for a description of our significant accounting policies.

Recent Accounting Pronouncements

Adopted as of January 1, 2018

        We adopted the following new standards, interpretations and amendments to standards, including any consequential amendments to other standards, with a date of initial application as of January 1, 2018:

    IFRS 9 Financial Instruments. The IASB issued the final version of IFRS 9 Financial Instruments in July 2014. IFRS 9 is effective for annual periods beginning on or after January 1, 2018, with early adoption permitted. We applied IFRS 9 initially on January 1, 2018 and will not restate comparative information for prior periods. The first application of IFRS 9 did not have a material impact on our consolidated financial statements.

    IFRS 15 Revenue from Contracts with Customers establishes a comprehensive framework for determining whether, how much and when revenue is recognized. It replaces existing revenue recognition guidance, including IAS 18 Revenue, IAS 11 Construction Contracts, IFRIC 13

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      Customer Loyalty Programmes, IFRIC 15 Agreements for the Construction of Real Estate, IFRIC 18 Transfers of Assets from Customers and SIC 31 Barter Transactions Involving Advertising Services. IFRS 15 is effective for the annual periods beginning on or after January 1, 2018, with early adoption permitted. The standard establishes a five-step model that will apply to revenue earned from a contract with a customer. Extensive disclosures will be required, including disaggregation of total revenue, information about performance obligations, changes in contract asset and liability account balances between periods and key judgements and estimates. The first application of IFRS 15 did not have a material impact on our consolidated financial statements.

    Classification and Measurement of Share-based Payment Transactions (Amendments to IFRS 2) issued on June 20, 2016 covers three accounting areas: the measurement of cash-settled share based payments; the classification of share-based payments settled net of tax withholdings; and the accounting for a modification of a share-based payment from cash-settled to equity-settled. The amendments are effective for annual periods commencing on or after January 1, 2018. As a practical simplification, the amendments can be applied prospectively so that prior periods do not have to be restated. Retrospective, or early application is permitted if companies have the required information. The amendments did not have a material impact on our consolidated financial statements.

    IFRIC 22 Foreign currency transactions and Advance consideration issued on December 8, 2016, clarifies the transaction date to be used to determine the exchange rate for translating foreign currency transactions involving an advance payment or receipt. The interpretation is effective for annual periods beginning on or after January 1, 2018, with earlier adoption permitted. The amendments did not have a material impact on our consolidated financial statements.

        The adoption of these standards, interpretations and amendments to standards did not have a material impact on our consolidated financial statements as of and for the year ended December 31, 2018.

Not Yet Adopted

        A number of new standards, amendments to standards and interpretations were not yet effective for the years ended December 31, 2017 or 2018 and have not been applied in preparing our consolidated financial statements:

    IFRS 16 Leases, published on January 13, 2016, makes a distinction between a service contract and a lease based on whether the contract conveys the right to control the use of an identified asset and introduces a single, on-balance sheet lease accounting model for lessees. A lessee recognizes a right-of-use asset representing its right to use the underlying asset and a lease liability representing its obligation to make lease payments. There are optional exemptions for short term leases and leases of low value items. Lessor accounting remains similar to the current standard—i.e. lessors continue to classify leases as finance or operating leases. For lessors, there is little change to the existing accounting in IAS 17 Leases. IFRS 16 replaces existing leases guidance including IAS 17 Leases, IFRIC 4 Determining whether an Arrangement contains a Lease, SIC-15 Operating Leases-Incentives and SIC-27 Evaluating the Substance of Transactions Involving the Legal Form of a Lease. The standard is effective for annual periods beginning on or after January 1, 2019. Early adoption is permitted for entities that apply IFRS 15 Revenue from Contracts with Customers at or before the date of initial application of IFRS 16. We will adopt IFRS 16 as of January 1, 2019. An assessment of the impact of IFRS 16 has not been finalized to date, but we expect that the most significant impact will be that we will recognize new assets and liabilities for our operating leases. In addition, the nature and recognition of expenses related to those leases will change as IFRS 16 replaces the straight-line operating lease

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      expense with a depreciation charge for right-of-use assets and interest expense on lease liabilities.

    Annual improvements to IFRS's 2015-2017 Cycle, issued on December 12, 2017, covers the following minor amendments:

    IFRS 3 Business Combinations: the amendments clarify that a company remeasures its previously held interest in a joint operation when it obtains control of the business;

    IFRS 11 Joint Arrangements: the amendments clarify that a company does not remeasure its previously held interest in a joint operation when it obtains joint control of the business;

    IAS 12 Income Taxes: the amendments clarify that a company accounts for all income tax consequences of dividend payments consistently with the transactions that generated the distributable profits—i.e. in profit or loss, OCI or equity; and

    IAS 23 Borrowing Costs: the amendments clarify that a company treats as part of general borrowings any borrowing originally made to develop an asset when the asset is ready for its intended use or sale.

    IFRIC 23 Uncertainty over Income Tax Treatments issued on June 7, 2017, clarifies how to apply the recognition and measurement requirements in IAS 12 when there is uncertainty over income tax treatments. In such a circumstance, an entity shall recognize and measure its current or deferred tax asset or liability applying the requirements in IAS 12 based on taxable profit (tax loss), tax bases, unused tax losses, unused tax credits and tax rates determined applying this Interpretation. An entity is required to assume that a tax authority with the right to examine and challenge tax treatments will examine those treatments and have full knowledge of all related information. Detection risk is not considered in the recognition and measurement of uncertain tax treatments. The entity should measure the impact of the uncertainty using the method that best predicts the resolution of the uncertainty; either the most likely amount method or the expected value method. The interpretation is effective for annual periods beginning on or after January 1, 2019, with earlier adoption permitted. The amendments are not expected to have a material impact on our consolidated financial statements.

    Amendments to IAS 19: Plan Amendment, Curtailment or Settlement. This amendment to IAS 19, applicable for fiscal years beginning on January 1, 2019, clarified the assumptions to use for the remeasurement and the effect on the requirements regarding the asset ceiling when a plan amendment, curtailment or settlement occurs. The amendments are not expected to have a material impact on our consolidated financial statements.

Quantitative and Qualitative Disclosures about Market Risk

Foreign Currency Exchange Risk

        We use the euro as our functional currency and the majority of our operations are denominated in euros. However, a portion of our operating expenses is denominated in U.S. dollars, and as result we may be exposed to foreign currency risk. For the year ended December 31, 2018, these expenses totaled $9.6 million based on the exchange rate in effect at December 31, 2018, or less than 10% of our total operating expenses for the year. As a result, an adverse 10% change in the exchange rate for the U.S. dollar against the euro would have resulted in a foreign exchange rate loss of approximately €1.0 million for the year. For the year ended December 31, 2018, we realized a foreign exchange rate loss of €26, although any such historical gains or losses do not predict the future impact of exchange rate risk.

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        In the future, and in particular with respect our clinical trials, we might need to manage an increasing number of transactions denominated in currencies other than the euro or indirectly exposed to currency risk, which will increase our overall exposure to this risk.

        In 2018, we considered the implementation of appropriate hedging arrangements without ultimately using any such arrangements.

        We do not currently have material revenues in dollars or any currency other than euros.

Interest Rate Risk

        We are exposed to interest rate risk related to our cash and cash equivalents. We had cash and cash equivalents of €207.2 million as of December 31, 2018, which consisted of bank accounts and short-term deposits. These interest-earning instruments carry a degree of interest rate risk; however, historical fluctuations in interest income have not been significant.

        We had net outstanding debt of €160.5 million as of December 31, 2018 in the form of convertible loans, which loans accrue interest at a fixed rate of 3.5% and for which the gross amount is €180,000. We also had outstanding at December 31, 2018 a total of €3.2 million in conditional advances from BPI France, €1.9 million of obligations under finance leases and €4.0 million of loans from commercial banks. The advances from BPI France are generally non-interest bearing or carry interest at fixed rates, and the bank loans all carry fixed interest rates. In the ordinary course of business, we may enter into contractual arrangements to reduce our exposure to interest rate risks. We do not believe that a 10% change in interest rates would have a significant impact on our consolidated financial statements.

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, or the JOBS Act. An emerging growth company may take advantage of specified reduced reporting and other burdens that are otherwise applicable generally to public companies. 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 for up to five years or such earlier time that we are no longer an emerging growth company. We will cease to be an emerging growth company if we have more than $1.07 billion in total annual gross revenue, have more than $700.0 million in market value of our ordinary shares held by non-affiliates or 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 provisions that allow for reduced reporting and other burdens.

        We will not take advantage of the extended transition period provided under Section 7(a)(2)(B) of the 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 the global offering, we will report under the 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 longer qualify as an emerging growth company, as long as we qualify as a foreign private

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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:

    the sections of the Exchange Act regulating the solicitation of proxies, consents or authorizations in respect of a security registered under the Exchange Act;

    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;

    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

    Regulation FD, which regulates selective disclosures of material information by issuers.

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BUSINESS

Overview

        We are a late-stage clinical biopharmaceutical company dedicated to the discovery and development of innovative drug candidates and diagnostic solutions targeting metabolic and liver-related diseases where there is considerable unmet medical need. We are a leader in the field of nuclear receptor-based drug discovery with a rich history and strong scientific heritage spanning almost two decades. We are evaluating our most advanced drug candidate, elafibranor, in a pivotal Phase 3 clinical trial as a potential treatment for nonalcoholic steatohepatitis, or NASH, and as a potential treatment for primary biliary cholangitis, or PBC. In December 2018, we announced positive preliminary results from our Phase 2 clinical trial in PBC. Our drug discovery efforts are based on selecting appropriate nuclear receptors as targets and utilizing rational drug design to optimize our drug candidates. A key differentiator of our development strategy is our NASH biomarker-based diagnostic program, in which we are developing a new in vitro diagnostic, or IVD, test to identify patients with NASH who may be appropriate candidates for drug therapy. Our scientific and clinical expertise, translational disease-driven approach and strong bioinformatics capabilities have allowed us to build a scientific platform through which we discover and develop our drug candidates and diagnostic tools. We believe elafibranor, if approved, has the potential to become a first-line treatment as a monotherapy and the backbone of combination regimens.

        NASH is a liver disease that affects millions of people and for which there are currently no approved therapies. NASH is characterized by an accumulation of fat, inflammation and degeneration of hepatocytes, and may ultimately lead to life-threatening conditions like cirrhosis, liver failure or liver cancer requiring liver transplant. The global market for the treatment of NASH is growing rapidly and is projected to reach $20 billion by 2025.

        Elafibranor, a dual agonist of the nuclear receptors PPARa and PPARd, is currently in Phase 3 development for the treatment of NASH. In our Phase 2b clinical trial, elafibranor achieved resolution of NASH without worsening of fibrosis, which is the primary endpoint of our ongoing global Phase 3 clinical trial. We have already achieved the enrollment necessary to perform an interim cohort analysis and expect to report interim results by the end of 2019. We believe these results, if positive, could support accelerated approval from the U.S. Food and Drug Administration, or FDA, and conditional approval from the European Medicines Agency, or EMA, as early as 2020. Elafibranor has received fast track designation from the FDA for the treatment of NASH.

        We are also developing elafibranor for the treatment of PBC, a chronic, progressive liver disease that leads to inflammation and scarring of the small bile ducts in the liver. Although a relatively rare disease mainly affecting women, PBC can develop into cirrhosis and other serious liver complications. There is currently no cure for PBC, and the two drugs approved for the treatment of PBC are limited by drug intolerance, lack of patient response and safety issues. Based on our clinical data, we believe elafibranor's unique mechanism of action can provide benefits for patients with PBC without significant side effects, such as the serious liver injury or death and pruritis that have been associated with approved PBC treatments. In December 2018, we announced positive preliminary results from our Phase 2 clinical trial evaluating elafibranor for the treatment of PBC. Elafibranor met the primary endpoint of the trial, which was the change at week 12 in serum alkaline phosphatase, or ALP, from baseline, with statistical significance compared to placebo in both doses evaluated. Elafibranor also achieved with high statistical significance compared to placebo, the composite endpoint of ALP and bilirubin. That endpoint, which has been used for drug registration, is defined as (1) ALP less than 1.67 times the upper limit of normal, or ULN, (2) total bilirubin within normal limits and (3) a reduction of ALP of more than 15%. Based on these positive results, we plan to advance our PBC program into Phase 3 development.

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        NASH is a silent disease. Patients often have no symptoms until the first signs of liver failure, and the lack of an accurate, non-invasive diagnosis tool contributes to under-diagnosis. Currently, liver biopsy is the standard for diagnosis, and variation in clinical practice and physician reluctance lead to under-diagnosis. Our blood-based IVD test is a novel, standalone diagnostic that we believe can address the urgent need for a non-invasive, cost-effective, accessible and validated test to identify NASH patients who may be appropriate candidates for drug intervention, thereby decreasing the need for liver biopsy. We believe our IVD test has the potential to benefit patients, improve overall clinical care and facilitate the identification of NASH patients to be treated. We anticipate marketing our IVD test first as a laboratory-developed test, or LDT, in 2019, and then submitting our IVD test for FDA marketing authorization in 2020. In January 2019, we entered into a license agreement with LabCorp to allow them to deploy our IVD test in the clinical research space.

        We are also advancing a clinical-stage program based on drug repositioning to develop an anti-fibrotic drug. Our lead drug candidate in this program, nitazoxanide, or NTZ, is an approved anti-parasitic agent that has shown promising activity against fibrosis in our preclinical disease models. See "Nitazoxanide Program for the Treatment of Fibrosis—Preclinical and Clinical Program." In December 2018, we announced the initiation of an investigator-initiated Phase 2 proof-of-concept trial to evaluate NTZ for the treatment of NASH patients with significant or severe fibrosis.

        Our TGFTX1 preclinical program is focused on the discovery and development of innovative drug candidates targeting RORgt, a nuclear receptor involved in certain inflammatory and autoimmune diseases. We are currently conducting pre-IND studies for a topical treatment of mild to moderate psoriasis.

        The following table summarizes our drug candidate and diagnostic development pipeline. We have retained worldwide rights to all of our programs.

GRAPHIC

        Our current chief executive officer co-founded our company in 1999 and our shares have been listed on the Euronext Paris under the symbol "GNFT" since 2006. We are led by an executive team and board of directors with deep experience at leading biotech companies, large pharmaceutical companies and academic institutions. We have over 150 employees at our offices in Lille and Paris, France and Cambridge, Massachusetts. The chair of our scientific advisory board, Bart Staels, is a co-founder of our company and a world-renowned expert in nuclear receptors. Our scientific advisory board is comprised of internationally recognized key opinion leaders in the field of metabolic and inflammatory diseases, with a particular focus on the liver and gastroenterology. We believe the expertise of our leadership and the strength of our relationships within the academic and clinical communities are critical to our ability to execute on our mission as we progress our development pipeline.

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Our Strengths

        We believe the following strengths will allow us to continue to build upon our leadership position in drug and diagnostic development for metabolic and liver-related diseases and achieve our goal of commercializing our drug and diagnostic candidates:

    Our lead product candidate, elafibranor, is in Phase 3 development for the treatment of NASH, an indication for which there are no approved drugs today, but which presents significant market opportunity.  In April 2018, we announced that we had achieved the recruitment goal of 1,000 patients for the interim cohort in our global Phase 3 clinical trial being conducted in 25 countries. We expect to report the results of our interim cohort analysis by the end of 2019, which, if positive, could support accelerated approval from the FDA and conditional approval from the EMA as early as 2020. If approved, elafibranor has the potential to be the first FDA-approved therapy to achieve resolution of NASH without worsening of fibrosis that could also have the benefit of addressing cardiovascular risk factors.

    We recently announced positive preliminary results from our Phase 2 clinical trial of elafibranor for the treatment of PBC and plan to commence Phase 3 development.  In December 2018, we announced that elafibranor met the primary endpoint of our Phase 2 clinical trial, which was the change at week 12 in serum ALP from baseline. Compared to placebo, treatment with 80 mg and 120 mg elafibranor resulted in mean decrease from baseline of –52% and –44%, respectively, each with high statistical significance. With respect to the composite endpoint, the elafibranor 80 mg and 120 mg treatment groups achieved with high statistical significance mean response rates of 67% and 79%, as compared to 6.7% for the placebo group. We plan to advance our PBC program into Phase 3 development in 2019.

    Elafibranor's results on NASH resolution, its good tolerability and lack of demonstrated safety concerns make it well-positioned among late-stage NASH programs.  We believe elafibranor has a favorable tolerability profile based on the results of our Phase 1 and Phase 2 trials. Also, in our Phase 2b clinical trial, we observed elafibranor's ability to resolve NASH without the worsening of fibrosis, which is the primary endpoint of our ongoing global Phase 3 clinical trial. We also observed a decrease in cardiovascular risk factors, an important observation considering the close link between NASH and cardiometabolic disease, and one that has not been reported in other drugs in Phase 3 development for NASH. Elafibranor is, to our knowledge, the only drug currently permitted to be developed for the treatment of children with NASH. We hold over 350 patents and patent applications relating to elafibranor, and the patent covering the use of elafibranor for the treatment of NASH does not expire until 2030, without taking into account any extensions.

    We are a recognized leader in the NASH field.  We are actively involved in the NASH stakeholder community, as a member of the steering committee and co-leader of a working group of The Liver Forum. We also participate in academic consortia, such as the biomarkers consortia in the United States and Europe, and work with patient advocacy groups including the Global Liver Institute, American Liver Forum and the European Liver Patient Association. We also spearhead disease awareness through The NASH Education Program, which is a Genfit public health initiative. These programs provide us with insight from the key stakeholders in NASH and our leadership position enables us to establish credibility with and convey these insights to regulators and payors.

    Our diagnostic program has the potential to expand market opportunity through better patient identification and stratification.  Our IVD test is designed to identify NASH patients who may be appropriate candidates for drug intervention. We believe that broad adoption of our non-invasive, accessible test, if validated and authorized for marketing, could not only help solve the problem of NASH under-diagnosis, but also provide physicians with a tool to identify

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      patients who would benefit from treatment with elafibranor or any other appropriate drug. In January 2019, we entered into a license agreement with LabCorp to allow them to deploy our IVD test in the clinical research space.

    Our pipeline extends beyond elafibranor.  In December 2018, we announced the initiation of an investigator-initiated Phase 2 proof-of-concept trial to evaluate NTZ for the treatment of NASH patients with significant or severe fibrosis. If this Phase 2 trial demonstrates anti-fibrotic activity in these patients, we plan to develop NTZ as a combination therapy with elafibranor as part of our strategy in NASH, in addition to development as a standalone monotherapy in fibrotic diseases. Our TGFTX1 program is in preclinical development in certain inflammatory and autoimmune diseases.

    Our experienced team is comprised of industry leaders in metabolic and liver-related diseases.  We believe that the breadth of experience and accomplishments of our management team, board of directors and scientific advisory board, combined with our broad network of established relationships with leaders in the industry and medical community, provide us with unique insights into drug development and commercialization, and have allowed us to bring together top researchers to build interdisciplinary research and development teams.

Our Strategy

        Our goal is to become a leader in the development of innovative therapies and diagnostics in metabolic and liver-related diseases. The key elements of our strategy to achieve this goal include:

    Obtain regulatory approval for, and commercialize, elafibranor for the treatment of NASH.  We are currently conducting our Phase 3 registrational trial, RESOLVE-IT, evaluating the efficacy and safety of a once-daily 120 mg dose of elafibranor in patients with NASH and fibrosis. We expect to enroll approximately 2,000 patients in this double-blind, placebo-controlled trial and in April 2018, we announced that we had achieved the recruitment goal of 1,000 patients necessary for the interim cohort analysis. We plan to announce results from our interim analysis at the end of 2019 and, if positive, use these results to support an accelerated regulatory approval pathway (Subpart H) in the United States and conditional approval in Europe. If approved, we may decide to market elafibranor for NASH in certain territories on our own and in other territories in collaboration with one or more pharmaceutical partners or specialized local distributors.

    Rapidly advance the Phase 3 clinical development of elafibranor for the treatment of PBC.  We are advancing clinical development of elafibranor for the treatment of adult patients with PBC who have had inadequate response to ursodeoxycholic acid, or UDCA. In December 2018, we announced positive preliminary results from our Phase 2 clinical trial evaluating elafibranor for the treatment of PBC. We plan to discuss our clinical development program with the FDA and to advance our PBC program into Phase 3 development in 2019.

    Complete development and prepare for potential commercialization of our NASH IVD test.  In 2017, we began the product and regulatory development phases for our novel, blood-based IVD test designed to identify patients with NASH who may be appropriate candidates for drug therapy and to offer an attractive means of decreasing the need for liver biopsies. We will initially market the test as an LDT in 2019 and then seek to obtain FDA marketing authorization of our IVD test in 2020 in parallel with commercialization of elafibranor. We believe that, if validated and authorized for marketing, our non-invasive, blood-based and accessible IVD test can easily integrate into routine clinical care for the comprehensive management of NASH. We are currently in discussions with multiple global diagnostic partners to discuss worldwide commercialization of our IVD test. Our license agreement with LabCorp allows for the deployment of our IVD test in the clinical research space through its central

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      laboratories which we believe will provide expanded access to, and further validation of our IVD test and generate new biological insights on NASH disease pathogenesis.

    Advance other drug candidates in our pipeline, both alone and in combination with elafibranor.  In addition to developing our other drug candidates to independently target metabolic and liver-related diseases, we believe elafibranor's unique approach in targeting PPARa and PPARd creates opportunities to explore combination therapies, either with our other drug candidates, third-party drug candidates or approved drugs. In our development program for fibrotic diseases, we have chosen to initially advance NTZ into Phase 2 clinical development. In December 2018, we announced the initiation of an investigator-initiated Phase 2 proof-of-concept trial to evaluate NTZ for the treatment of fibrosis in NASH patients with significant or severe fibrosis. We believe NTZ could be developed as an anti-fibrotic monotherapy and as combination therapy with elafibranor. We also plan to explore opportunities to expand the use of elafibranor through combination therapies such as with farnesoid X receptor, or FXR, agonists, Acetyl-CoA Carboxylase, or ACC, inhibitors and our drug candidate NTZ as part of our strategy in NASH.

    Actively manage our development pipeline and opportunistically enter into strategic collaborations.  We plan to continue to strengthen our development pipeline by in-licensing rights to drug candidates in Phase 1 or Phase 2 clinical development in our therapeutic areas of interest. We may sign a licensing agreement or co-marketing agreement with one or more pharmaceutical laboratories with the financial capacity and specific expertise to successfully conduct clinical trials and bring drugs to market.

    Increase public awareness of NASH through The NASH Education Program.  The NASH Education Program, a public health initiative we created in 2016, is dedicated to the development and funding of NASH awareness and education activities aimed at the medical community and the general public. We believe that this program, through the production and dissemination of essential medical knowledge, can increase early diagnosis of NASH patients and provide physicians and patients with critical information about diagnostic and therapeutic solutions.

Our Drug Candidates and Diagnostic Development Programs

NASH—A Silent, Serious and Widespread Disease with No Approved Treatments

Overview

        NASH is a silent disease, meaning patients have no symptoms until first signs of liver failure appear, and is notably under-diagnosed. With no approved drug treatments, NASH can lead to life-threatening conditions like cirrhosis, liver failure, liver cancer and death. NASH is the second leading indication for liver transplantation in the United States, behind hepatitis C, but is also the most rapidly growing indication and is expected to eventually become the primary cause. A study published in the Journal of Hepatology estimates that there were approximately 17.3 million adults with NASH in the United States in 2016 and projects that this number will grow to approximately 27.0 million by 2030; in the five major European markets, France, Germany, Italy, Spain and the United Kingdom, these numbers were estimated to be 12.6 million in 2016 and 18.3 million by 2030. NASH is a critical public health concern and an area with high unmet medical need.

        We are developing our lead drug candidate, elafibranor, for the treatment of NASH, a severe form of non-alcoholic fatty liver disease, or NAFLD. NAFLD is the buildup of fat in the liver, called hepatic steatosis, that is not caused by alcohol consumption. As the disease progresses, the liver is exposed to chronic inflammation and liver cell degradation (manifested as hepatocyte "ballooning"). A patient has NASH when the three components—steatosis, inflammation and damage—are all present. Without treatment, NASH leads to fibrosis, which is the accumulation of non-functional scar tissue, as the body

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tries to heal itself. Because the accumulation of scar tissue leads to tissue remodeling, development of fibrosis leads to progressive loss of liver function which may ultimately lead to life-threatening conditions like cirrhosis, liver failure or liver cancer. Approximately 20% of NASH patients will go on to develop cirrhosis, and almost half of patients with cirrhosis will develop liver failure. Studies show that NASH patients have a 10 times greater risk of dying from a liver-related disorder than the general population. In addition to its serious effects on the liver, NASH multiplies the risk of a patient developing cardiovascular problems, such as myocardial infarction, stroke and peripheral vascular accident, which also contribute to higher mortality rates in NASH patients. In fact, cardiovascular disease is the leading cause of death in NASH patients.

        The following image depicts the progression of a normal liver through the development of NASH and its eventual consequences.

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Causes, Diagnosis and Assessment of NASH

        Although experts are still studying the multiple possible causes, it is generally accepted that NASH is a consequence of high-sugar, high-fat diets and insufficient physical exercise. As such, the disease is closely associated with metabolic disorders and NASH patients can have some or all of the following disorders: obesity, type 2 diabetes, hyperglycemia and abnormal levels of triglycerides and cholesterol. As the obesity and type 2 diabetes pandemic has increased, so too has the number of NASH cases worldwide.

        Today, the clinical standard to formally diagnose NASH and stage fibrosis in a patient suspected of having NASH is the liver biopsy. When a liver biopsy shows steatosis, ballooned cells and inflammation, with or without fibrosis, the patient is diagnosed with NASH. Physicians use various scoring scales to assess the extent of disease severity and fibrosis in NASH patients:

    The NAFLD Activity Score, or NAS, provides a numerical score and assesses the severity of the disease for patients who have NASH. The NAS includes three sub-score components—steatosis (0-3), hepatocellular ballooning (0-2) and inflammation (0-3).

    The NASH Clinical Research Network fibrosis staging system ranks a patient's level of fibrosis on a scale of F0 to F4. No fibrosis is F0; mild, significant and severe fibrosis is F1, F2 and F3, respectively, and cirrhosis is F4.

        The histological spectrum of NAFLD is quite large and both NAS and fibrosis stage can be used to define a patient's risk of developing cirrhosis, liver failure, liver cancer, liver transplant and liver death. The presence of NASH is the underlying cause of fibrosis, and fuels the fibrosis progression

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from stage to stage. Not surprisingly, the higher the fibrosis stage, the more advanced the disease, the greater the risk of developing major liver complications.

        Although the natural history of the disease is not fully understood, a consensual definition of a NASH patient at risk of liver complications has emerged. According to this definition, a patient presenting with active NASH (NAS³4) and significant fibrosis (F³2) should be considered "at risk" and may be an appropriate candidate for drug intervention.

Market Opportunity

        The treatment of NASH is an urgent public health challenge. Despite the growing burden of NASH on public health systems resulting from high prevalence and morbidities and mortality associated with the disease, there are currently no FDA-approved therapies for the treatment of NASH. Existing drugs have been tested off-label for assessing potential efficacy on NASH and liver fibrosis but have failed because of lack of efficacy, unacceptable side effects or both.

        As the global epidemic of obesity fuels NAFLD prevalence, NASH has become one of the most common liver disorders. Global Data estimates the NASH market in the seven major markets (France, Germany, Italy, Japan, Spain, the United Kingdom and the United States) at approximately $143 million as of 2017, with the potential to reach up to $18.3 billion by 2026.

Our Solution: Elafibranor for the Treatment of NASH

        Our two-pronged strategy for developing solutions for NASH patients consists of developing our drug candidate elafibranor as a first-line treatment for patients with NASH and developing an IVD test to aid in the diagnosis of at-risk NASH patients.

        Elafibranor (previously known as GFT505) is a dual-agonist acting simultaneously on two nuclear receptors, PPARa and PPARd, that control expression of key genes of inflammation, lipid metabolism, glucose metabolism and insulin sensitivity, oxidative stress and fibrosis. These two receptors play an important role in numerous processes involved in the development of NASH and its co-morbidities, as outlined below.

    The activation of PPARa as well as PPARd confer anti-inflammatory activities through the repression of independent and complementary pathways. Thus, the dual activation of PPARa and PPARd is thought to be advantageous over single agonism of either of the targets alone.

    PPARa and PPARd in the liver increase mitochondrial b-oxidation which can lead to fatty acid degradation, or catabolism, and the decrease of liver fat.

    The activation of PPARa decreases oxidative stress, which occurs in part through the upregulation of anti-oxidant genes.

    PPARa activation leads to a beneficial cardioprotective lipid profile which includes a decrease in total cholesterol, remnant cholesterol, LDL-cholesterol and triglycerides, and an increase in HDL-cholesterol.

    The activation of PPARd increases insulin sensitivity, which can occur in part by its activity to increase mitochondrial function and energy expenditure. This increased insulin sensitivity improves glucose homeostasis, lowers the elevated plasma free fatty acid levels associated with obesity and decreases hyperinsulinemia, which in turn decreases lipogenesis.

    PPARa activation has shown a beneficial effect on the microvasculature. It is reasonable to hypothesize that this effect would also be operative in the liver, reducing inflammation and improving vascular activity in NASH patients.

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    The combined activation of PPARa and PPARd, leading to decreased inflammation, oxidative stress, liver fat and insulin resistance, has a beneficial impact on the liver as is evidenced by the activity of elafibranor to decrease markers of liver dysfunction, including alanine aminotransferase, or ALT, aspartate aminotransferase, or AST, and gamma-glutamyl transferase, or GGT.

        An important distinction between elafibranor and some of the other third-party programs targeting PPARs in NASH is that elafibranor does not have any pharmacological PPARg activity as shown by studies in disease models and in clinical trials. Elafibranor has not shown the unwanted side effects most commonly associated with PPARg activation, such as weight gain, edema, and fluid retention, which are associated with increased risk of heart failure.

        NASH is closely associated with obesity and type 2 diabetes and is considered to be the liver manifestation of the metabolic syndrome. Similarly to many metabolic diseases such as type 2 diabetes, NASH is a multifaceted disease with multiple components, including insulin resistance, inflammation, oxidative stress, increased liver fat and dyslipidemia. A therapeutic intervention that can address multiple NASH components may provide optimal clinical benefit and have the best probability to attain the histological endpoints required for drug registration for the treatment of NASH patients. We believe that with its unique mechanism of action, by activating both PPARa and PPARd, elafibranor has the potential to modulate many of the key hallmarks of NASH, and, if approved, could be well-positioned as a first-line treatment as a monotherapy and the backbone of combination regimens.

Our Clinical Program for Elafibranor in the Treatment of NASH

    RESOLVE-IT—Our Pivotal Phase 3 Clinical Trial

        Based on the results obtained in our Phase 2b clinical trial of elafibranor in treating NASH patients, we are currently evaluating elafibranor for the treatment of NASH in a global pivotal Phase 3 clinical trial, RESOLVE-IT. The trial began in the first quarter of 2016 and is expected to enroll approximately 2,000 patients at approximately 250 sites throughout the world. We plan to perform an interim analysis of the first 1,000 enrolled patients after 72 weeks of treatment in order to evaluate the efficacy of elafibranor, based on a single primary histological endpoint, resolution of NASH without worsening of fibrosis, as a basis for accelerated marketing approval from the FDA and conditional marketing approval from the EMA.

        RESOLVE-IT is a randomized, double-blind, placebo-controlled (2:1) Phase 3 clinical trial enrolling patients with NASH (NAS ³4) and fibrosis (F2 or F3, stages at which fibrosis is significant but has not yet reached cirrhosis). Patients will receive either elafibranor 120 mg or placebo once daily. The primary endpoint at the interim analysis, which will be performed on the interim cohort comprised of the first 1,000 patients enrolled and after a 72 weeks of treatment, is the proportion of elafibranor-treated patients achieving NASH resolution without worsening of fibrosis as compared to placebo. This will be done by comparing a patient's liver biopsy at the end of the 72 week treatment period with their initial liver biopsy. The trial also has a key secondary histological endpoint, fibrosis improvement without the worsening of NASH, which we believe may be included in the drug label if this endpoint is met and if elafibranor receives approval.

        In April 2018, we announced that we had achieved enrollment of the first 1,000 patients in the interim cohort. The Subpart H approval pathway we are pursuing requires us to continue the trial through the extension period for all 2,000 patients, at which time the full patient population will be evaluated for a composite endpoint of clinical outcomes. The trial will also evaluate improvement of cardiometabolic profiles in patients treated with elafibranor versus patients treated with placebo. Throughout the duration of the trial, the safety is continuously monitored by the Data Safety Monitoring Board, or DSMB, an independent committee that provides recommendations on continuation of the trial.

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        During the recruitment, we focused on the balanced distribution of treatments across all sites and countries, based on stratification according to gender, presence of diabetes and disease severity. We have enrolled patients in more than 250 sites across North America, Europe, Australia, Latin America, Turkey and South Africa. Interim baseline data on the initial cohort show that the patients recruited into the trial to date have the expected metabolic co-morbidities which include type 2 diabetes, hypertension, dyslipidemia and obesity. Thus, the baseline characteristics of the trial population are consistent with the expected associated risk factors for patients with NASH and fibrosis.

        Four pre-planned safety reviews of the data have been already performed by the DSMB. In each of the reviews, including the most recent one in December 2018, the DSMB has recommended continuation of the trial without any modification after analysis of the safety data set, including adverse events and laboratory data. This recommendation, taking into account an increasing number of patients exposed to treatment for longer periods of time, is consistent with our observations in previous Phase 1 and Phase 2 clinical trials that support elafibranor's favorable tolerability profile and lack of demonstrated safety concerns.

        We expect to report data from the interim cohort analysis by the end of 2019. If the results of the interim analysis are positive, we expect to apply for accelerated approval from the FDA and conditional marketing approval from the EMA in 2020.

    GOLDEN-505—Our Phase 2b Clinical Trial

        The efficacy and safety of elafibranor, to date, has been evaluated in an extensive preclinical program which included multiple disease models. Prior to our GOLDEN-505 Phase 2b clinical trial in NASH patients, our Phase 2a program in elafibranor included trials performed in different populations of metabolic disease patients, including patients with atherogenic dyslipidemia, prediabetes or type 2 diabetes. In these Phase 2a trials, we observed that treatment with elafibranor promoted a cardioprotective lipid profile, promoted glucose homeostasis, increased insulin sensitivity, was anti-inflammatory and decreased markers of liver injury. Each of these activities are important targets in the treatment of NASH patients and we believe the combined multiple activity profile of elafibranor observed in the Phase 2a trials warranted its further clinical development in a Phase 2b trial.

        In 2012, a consensus definition of NASH resolution had not yet been adopted by regulatory authorities or the medical community and little was known about the target NASH population to be included in clinical trials. As a result, we designed the GOLDEN-505 trial with the input of key opinion leaders and the FDA to identify the therapeutic dose for elafibranor and the most appropriate NASH population for drug therapy. For this purpose, GOLDEN-505 enrolled a patient population covering almost the entire histological spectrum of NASH (from NAS=3 to NAS=8 and fibrosis stage from F0 to F3). Patients with fibrosis stage F4 were excluded, as this would indicate that the patient had already progressed to cirrhosis. This trial, which began in 2012, was one of the largest interventional trials and first true international study ever conducted in NASH, enrolling 276 patients, 274 of whom were treated, at 56 sites throughout the United States and seven countries in Europe.

        Patients were enrolled if they had NASH defined as NAS³3 with at least one point in steatosis, ballooning and inflammation scores, and fibrosis stage from F0 to F3. Patients were divided into three treatment groups, receiving either elafibranor 80 mg, elafibranor 120 mg or placebo once daily for 52 weeks. The primary endpoint of the trial was to evaluate the efficacy of elafibranor doses compared to placebo on reversal of NASH without worsening of fibrosis. We also evaluated the effect of elafibranor on secondary endpoints including changes in NAS, morphometric parameters, insulin resistance, cardiovascular risk parameters and safety markers.

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Efficacy Results

        Topline results were announced in March 2015 and detailed results were presented at the 2015 American Association for the Study of Liver Diseases, or AASLD, Annual Meeting. Complete results of the trial were published in the peer-reviewed Gastroenterology journal.

        After the end of the 52-week treatment period, there was no difference between the elafibranor arms and placebo according to the protocol-defined definition of the primary endpoint. We conducted a post hoc analysis of the data using a definition recommended by the FDA for use as the primary endpoint in our Phase 3 trial. Applying this definition to our Phase 2b data, elafibranor 120 mg resolved NASH without the worsening of fibrosis in the intent-to-treat population, defined as all patients who took at least one treatment: 19% of patients receiving elafibranor 120 mg experienced NASH resolution without worsening of fibrosis, compared to only 12% in the placebo group, a statistically significant difference. The following table shows the percentage of patients in the placebo and elafibranor 120 mg groups who reached NASH resolution without the worsening of fibrosis, broken down by the patient's NAS. The elafibranor 80 mg group did not perform better than placebo using the FDA-recommended definition of the primary endpoint.


Percentage of Patients with NASH Resolution without Worsening of Fibrosis
(Primary Endpoint of Trial (FDA recommended post hoc definition))

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(1)
P-value represents the statistical significance between two groups. A p-value <0.05 denotes significant difference and means that there is < 5% likelihood that the observed results occurred by chance. The p-values in the table are comparisons between the elafibranor 120 mg and placebo groups. The p-values comparing the elafibranor 80 mg and placebo groups each exceeded 0.05, meaning that such results were not statistically significant.

        The statistical difference between the elafibranor and the placebo groups increased with the extent of initial histological lesions. In the subpopulation of patients with active NASH (NAS³4), 19% of patients receiving elafibranor 120 mg experienced NASH resolution, compared to only 9% in the placebo group, with a p-value of 0.013. In the subpopulation of patients with active NASH (NAS³4) and fibrosis (F³1), these results increased to 20% and 11% in the elafibranor 120 mg group and placebo group, respectively, with a p-value of 0.009.

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        In addition, we conducted a post hoc analysis to take into account differences in the standard of care across centers and baseline severity. In patients recruited in centers with at least one patient with active NASH (NAS³4) in the three treatment arms of the trial, 26% in the elafibranor 120 mg group, compared to 5% in the placebo group (p=0.02), experienced resolution of NASH without worsening of fibrosis. We believe this analysis provides a good assessment of the efficacy of elafibranor, taking into account the caveats of the Phase 2b trial design which recruited patients with mild disease and too low of a NAS (NAS=3) and included trial centers which did not have patients from each of the study arms present. Of the 274 patients enrolled and treated (the intent-to-treat population) in the Phase 2b trial, 40 patients had mild disease, defined as a NAS=3. In these patients with mild disease, there was an unexpectedly high placebo response rate, which we believe might have led to a lack of treatment effect in the pre-specified primary outcome assessment. The current practice for drug development in NASH, including in our ongoing RESOLVE-IT trial, is now to include only those patients with moderate or severe disease, defined by a NAS equal to or greater than 4.

        Importantly, patients who achieved NASH resolution when treated with elafibranor ("responders") experienced a parallel decrease in fibrosis score compared to elafibranor patients who did not achieve NASH resolution ("non-responders"), as depicted in the figure below. Although the trial was not designed for anti-fibrotic endpoints, we believe it provided proof-of-concept of an anti-fibrotic effect. This correlation between improvement in NASH activity and regression of fibrosis fits with the treatment paradigm that NASH resolution predicts long-term beneficial effects on prevention of negative clinical outcomes.


Fibrosis Change from Baseline
in Elafibranor 120 mg Responders v. Non-Responders

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        Patients treated with elafibranor experienced improvement in circulating markers of liver dysfunction such as ALT, GGT and alkaline phosphatase, or ALP. The charts below show the changes in ALT, GGT and ALP from baseline over the course of the treatment period of the trial. These results were published in Gastroenterology in 2016.

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        In addition, in our evaluation of the secondary endpoints, we observed therapeutic activity of elafibranor 120 mg on the following cardiometabolic risk factors associated with NASH, which we believe is commensurate with elafibranor providing a beneficial cardiometabolic profile:

        Improved levels of plasma lipids and lipoproteins.    The charts below show the changes from baseline in triglycerides, LDL cholesterol and HDL cholesterol for each arm during the trial.

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        Improved insulin sensitivity and glucose metabolism in diabetic patients.    The following charts show the effects of elafibranor compared to placebo on a number of insulin sensitivity and glucose metabolism measures observed during the trial.

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        Anti-inflammatory effects.    The following chart shows changes from baseline in fibrinogen and haptoglobin, two measures of inflammation, during the trial. In this chart, elafibranor 80 mg is noted as "GFT-80" and elafibranor 120 mg is noted as "GFT-120."

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        These results were published in Gastroenterology in 2016.

Safety Results

        Periodic safety reviews were conducted throughout the Phase 2b clinical trial by the DSMB. These reviews did not generate any comments or additional requests highlighting the overall safety profile of elafibranor.

        In the GOLDEN-505 trial, elafibranor was well tolerated at both dose levels. Over the 52-week treatment period, frequency of adverse events, or AEs, were similar between the treatment groups, including placebo, and the majority of the AEs were mild in intensity. During the trial, 4 patients in the elafibranor groups experienced possibly treatment related SAEs. In the elafibranor 80mg group, three SAEs occured in one patient experiencing ataxia, fasciulation and tremor on the same day. A second patient, who had a preexisting risk profile for miscarriage, experienced a spontaneous abortion. In the elafibranor 120 mg group, one patient experienced mild acute pancreatitis. This patient had a historical cholecystectomy, was suspected of related biliary pancreatitis at the time of the adverse event, suffered from numerous concurrent conditions and was on confounding concurrent medications. A second patient was diagnosed with Parkinson's disease, deemed possibly treatment related by the investigator, although it was deemed not treatment related by the sponsor due to risk factors such as patient's age (76), sex (male) and family history of tremors (patient's father). Additionally, four patients in the placebo group experienced possibly treatment related SAEs (renal cancer, breast cancer, bladder cancer and pancreatic cancer).

        In addition, there were no cardiac events, signals on cancer or deaths in the elafibranor treatment groups. Body weight remained stable. A statistically significant mild increase in creatinine of approximately five percent was observed in the elafibranor treatment group. An increase in creatinine

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is a known and generally reversible effect of elafibranor and other PPAR agonists, like fenofibrate, which has been on the market for decades. Several long-term studies with fenofibrate (DAIS, FIELD, ACCORD) have shown the preservation of renal function. This was illustrated by the rapid reversal of the observed increase in creatinine upon stopping treatment, which, even after several years of treatment, decreased to levels below those observed in the placebo groups, which is indicative of a renoprotective effect of PPAR agonist treatment. The most common adverse events were of gastrointestinal nature and of mild intensity, such as abdominal pain, transit disorders, nausea and vomiting, were similar between treatment groups. No safety concerns of elafibranor emerged from this trial.

    Prior Clinical Trials and Preclinical Studies

    Phase 2a Clinical Trials

        We have also completed five Phase 2a clinical trials which were exploratory in nature to assess safety, type of efficacy and magnitude of efficacy of elafibranor in patients suffering from specific cardiometabolic disorders also frequently observed in NASH patients. These trials, involving an aggregate of 297 randomized patients assessed a variety of endpoints not specifically related to efficacy in NASH. However, we believe the results provided a scientific and clinical rationale for positioning of elafibranor as a suitable NASH therapeutic through our observations of:

    reduced markers of liver injury;

    reduced markers of inflammation;

    improved glucose metabolism and insulin sensitivity; and

    improved levels of plasma lipids and lipoproteins.

        In all five Phase 2a clinical trials, we observed a favorable tolerability profile and did not demonstrate any safety concerns of elafibranor. Below are summaries of these five Phase 2a clinical trials.

    GFT505-207-1 was a Phase 2a, randomized, placebo-controlled, double-blind, two-parallel group clinical trial in patients presenting with Frederickson Type IIB dyslipidemia (high triglycerides and low HDL-cholesterol). In this trial, we evaluated a once-daily oral treatment of elafibranor 30 mg in 24 patients compared to a placebo group of 13 patients over the course of 28 days. We evaluated reduction in serum triglycerides and increases in HDL-cholesterol levels, as well as improvements in other related lipid markers. We observed that patients in the elafibranor treatment group experienced a decrease in triglycerides of 8.72%, an increase in HDL-cholesterol of 5.35%, a decrease in non-HDL-cholesterol of 4.65% and a decrease in LDL-cholesterol of 4.28%, each as compared to placebo. We also observed favorable trends in corresponding apolipoproteins, which are proteins that bind lipids to form lipoproteins. In the patients treated with elafibranor 30 mg, we observed good tolerability. No SAEs were reported and no subjects withdrew from the trial.

    GFT505-208-3 was a Phase 2a, randomized, placebo-controlled, double-blind, two-parallel group clinical trial in patients with atherogenic dyslipidemia (high triglycerides and low HDL-cholesterol). In this trial, we evaluated a once-daily oral treatment of elafibranor 80 mg in 63 patients compared to a placebo group of 31 patients over the course of 28 days. We evaluated reduction in serum triglycerides, increases in HDL-cholesterol levels and improvement in other lipid makers. We observed significant beneficial effects in the elafibranor group compared to the placebo group, including a reduction in serum triglycerides of 16.67% (p=0.008), an increase in HDL-cholesterol of 7.77% (p=0.004), and statistically significant reductions in pro-atherogenic lipoproteins, each as compared to placebo. In patients treated with

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      elafibranor, we observed good tolerability. No SAEs were reported and no subjects withdraw from the trial due to adverse events. The results of this clinical trial were published in Diabetes Care in 2011.

    GFT505-209-4 was a Phase 2a, randomized, placebo-controlled, double-blind, two-parallel group clinical trial in patients with abdominal obesity and presenting with impaired fasting glucose and/or impaired glucose tolerance. In this trial, we evaluated a once-daily oral treatment of elafibranor 80 mg in 23 patients compared to a placebo group of 24 patients over the course of 35 days. We evaluated improvement in markers of glucose metabolism and lipid profile. We observed significant beneficial effects in the elafibranor group compared to the placebo group on changes in glucose homeostasis, including a reduction in fasting insulin of 24.8% (p=0.005), a reduction in fasting plasma glucose of 5.2% (p=0.01) and a reduction on the insulin resistance index of 31.4% (p=0.001). With respect to changes in plasma lipids and associated proteins, patients in the elafibranor group experienced significant improvements over placebo, including a decrease in triglycerides of 24.8% (p<0.001), an increase in HDL-cholesterol of 9.3% (p=0.009), a decrease in non-HDL-cholesterol of 13.3% (p<0.001), a decrease in total cholesterol of 8.7% (p<0.001) and statistically significant decreases in corresponding apolipoproteins. Additionally, in the elafibranor group we observed significant impact on markers of liver injury and inflammation compared to placebo, including a decrease in GGT of 15.1% (p=0.004), a decrease in ALP of 24.5% (p<0.001), a decrease in fibrinogen of 10.0% (p=0.01) and a decrease in haptoglobin of 15.8% (p=0.008). In patients treated with elafibranor, we observed good tolerability. There was one SAE in the elafibranor group that was deemed to be unrelated to treatment. No adverse events led to discontinuation of elafibranor treatment. The results of this clinical trial were published in Diabetes Care in 2011.

    GFT505-210-5 was a Phase 2a, randomized, placebo-controlled, double-blind, two-parallel group clinical trial in drug-naive patients with type 2 diabetes. In this trial, we evaluated the efficacy of once daily oral treatment of elafibranor 80 mg in 50 patients compared to a placebo group of 47 patients over a period of 12 weeks. We evaluated changes in HbA1c, fasting glucose, fasting insulin, HOMA-IR and other parameters measured during an oral glucose tolerance test. Patients in the elafibranor group experienced significant improvements from baseline, including a decrease in HbA1c of 0.31% (p=0.01). Patients experienced a decrease in fasting insulin of 2.02 mlU/L and a decrease in the HOMA-IR score of 1.10. In the elafibranor treatment group, but not in the placebo group, parameters derived from the oral glucose tolerance test were also significantly improved compared to baseline, like glucose AUC of –42.5 mg/dL (p=0.001) and a decrease in insulin AUC of 10.5 mlU/L (p=0.009) and a decrease in free fatty acid AUC of 0.17 mmol/L h (p<0.001), but not in the placebo group. Favorable trends persisted when comparing these glucose homeostasis marker changes between the two groups but were not statistically significant. Highly significant improvements over placebo were obtained on plasma lipids including a decrease in triglycerides of 0.60 mmol/L (p<0.001), a decrease in LDL-cholesterol of 0.37 mmol/L (p=0.002), a decrease in total cholesterol of 0.47 mmol/L (p=0.001), a decrease in non-HDL-cholesterol of 0.53 mmol/L (p<0.001), and decreases in corresponding apolipoproteins (p<0.001). Finally, significant effects could be seen over placebo on inflammatory markers like HsCRP (p=0.004), haptoglobin (p<0.0001), and on liver markers GGT (p<0.001) and ALP (p<0.001). In the trial, one patient experienced four SAEs deemed unrelated to treatment leading to premature treatment discontinuation. Another patient experienced an AE of mild to moderate intensity, which was judged not related to treatment with elafibranor, led to study drug discontinuation.

    GFT505-210-6 was a randomized, single-blind, placebo-controlled, crossover clinical trial in 22 male patients with insulin resistance and abdominal obesity. In this trial, we evaluated the efficacy of once daily oral treatment of elafibranor 80 mg over the course of eight weeks on

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      insulin resistance using the hyperinsulinemic euglycemic glucose clamp procedure. This gold-standard technique allows assessment of the hepatic response to low dose of insulin and peripheral tissues response to high dose of insulin. In patients treated with elafibranor, we observed significantly improved hepatic response to a low dose of insulin compared to placebo. Similarly, the response of peripheral tissues was significantly increased compared to placebo. In addition, compared to placebo, patients treated with elafibranor experienced a significantly improved plasma lipid profile, including a decrease in serum triglycerides of 21% (p=0.003), a decrease in total cholesterol of 9.2% (p=0.004), a decrease in LDL-cholesterol of 13.2% (p=0.001) and statistically significant decreases in corresponding apolipoproteins. In addition, patients treated with elafibranor showed improvement in inflammation markers such as haptoglobin or fibrinogen and liver markers such as ALT (–20%, p=0.004), GGT (–30.4%, p=0.003) or ALP (–19.3%, p<0.001). In patients treated with elafibranor, we observed good tolerability. No SAEs related to treatment with elafibranor occurred and no AE led to discontinuation of elafibranor treatment. The results of this clinical trial were published in Diabetes Care in 2013.

        Most of these Phase 2a clinical trial results have been reported in two publications in a peer-reviewed journal, Diabetes Care. Notably, in a trial using the gold standard method for measuring sensitivity to insulin, we showed that in patients with insulin resistance, elafibranor was able to increase insulin sensitivity of the liver and muscles. Knowing the essential role of insulin resistance in development of NASH, this Phase 2a trial was decisive for the decision to launch a biopsy-based Phase 2b trial in NASH patients.

    Phase 1 Clinical Trials

        To date, the elafibranor Phase 1 program to assess the safety and tolerability as well as pharmacokinetic profile of elafibranor comprises 12 clinical trials performed in single Phase 1 clinical research centers. This Phase 1 program has included a total of over 600 volunteers including more than 500 healthy lean subjects, 60 healthy overweight or obese subjects and 12 subjects with type 2 diabetes. Among them, more than 400 were included in elafibranor treated groups and more than 150 in placebo or comparator treated groups. Below is a brief summary of these Phase 1 clinical trials:

    GFT505-106-1 was a placebo-controlled trial conducted in a total of 56 healthy volunteers (44 subjects in the elafibranor treatment group and 12 subjects in the placebo group) to assess the safety and the pharmacokinetic profile of elafibranor after single administrations at ascending doses of 10, 20, 30, 50 and 70 mg under fasting and fed conditions. No subject withdrew from the trial and no SAEs were reported.

    GFT505-106-2 was conducted in a total of 48 healthy volunteers (36 patients in the elafibranor treatment group and 12 patients in the placebo group) to assess the safety and pharmacokinetic profile of elafibranor after repeated administration for 14 days at ascending doses of 5, 10, 20 and 30 mg. No subject withdrew from the trial and no SAEs were reported.

    GFT505-108-3 was conducted in a total of 12 healthy volunteers, all treated with elafibranor, to compare safety and pharmacokinetics of two different formulations after single administration at 10 mg. No subject withdrew from the trial and no SAEs were reported.

    GFT505-108-4 was a placebo-controlled trial conducted in a total of 64 healthy volunteers (48 subjects in the elafibranor treatment group and 16 subjects in the placebo group) to assess the safety and pharmacokinetic profile of elafibranor after single administration of ascending doses of 100 and 120 mg and after repeated administration of ascending doses of 40, 60, 80 and 100 mg for 14 days. No subject withdrew from the trial. One SAE was reported at the 120 mg dose level but was not deemed related to elafibranor.

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    GFT505-109-5 was an open label trial conducted in a total of 28 healthy volunteers, all treated with elafibranor, to assess potential drug-drug interaction between elafibranor at 80 mg for 14 days with simvastatin at 20 mg. One non-treatment related AE led to discontinuation and one non-treatment related SAE occurred prior to any administration of elafibranor.

    GFT505-109-6 was conducted in a total of 30 healthy volunteers (20 subjects in the elafibranor treatment group and 10 subjects in the comparator group) to assess potential drug-drug pharmacodynamic interaction between repeated administration of elafibranor at 100 mg for 14 days and single administration of sitagliptin at the end of the treatment period. No subject withdrew from the trial and no SAEs were reported.

    GFT505-111-7 was conducted in 24 healthy subjects, all treated with elafibranor, and in 60 overweight/obese subjects (45 subjects treated with elafibranor and 15 subjects in the placebo group) and in 12 type 2 diabetic subjects (9 subjects treated with elafibranor and 3 subjects in the placebo group). Our objectives in this trial were to (i) compare pharmacokinetic profile of two formulations of elafibranor at 120 mg after single administration in male and female healthy lean volunteers (open label phase), (ii) to assess safety and tolerability and pharmacokinetic profile of single administration of ascending doses of 180, 240 and 300 mg in overweight/obese otherwise healthy volunteers (double-blind, placebo controlled); (iii) to assess safety and tolerability and pharmacokinetic profile of repeated administration for 14 days of ascending doses of 120, 180 and 240 mg in overweight/obese otherwise healthy volunteers (double-blind, placebo controlled); and (iv) to assess safety and tolerability after multiple oral doses in patients with Type 2 diabetes. No subject withdrew from the trial and no SAEs were reported.

    GFT505-112-8 was an open label trial conducted in a total of 19 healthy volunteers, all treated with elafibranor, to assess potential drug-drug interaction between elafibranor at 120 mg for 13 days with Warfarin 15 mg. No subject withdrew from the trial and no SAEs were reported.

    GFT505-113-9 was a double-blind trial conducted in a total of 176 healthy volunteers (89 subjects in the elafibranor group, 42 subjects in the placebo group and 45 subjects in the positive control group) to assess the effects of repeated administration for 14 days of elafibranor at 120mg and 300 mg on QT/QTc interval. No subject withdrew from the trial and no SAEs were reported.

    GFT505-114-10 was an open label trial conducted in 6 healthy volunteers, all treated with elafibranor, to assess excretion balance and metabolic profile of elafibranor after single administration of 14C-labelled elafibranor at 120 mg. No subject withdrew from the trial and no SAEs were reported.

    GFT505-115-11 was an open label trial conducted in a total of 25 healthy volunteers, all treated with elafibranor, to assess potential drug-drug interaction between elafibranor at 180 mg for 14 days with atorvastatin 40 mg. No subject withdrew from the trial and no SAEs were reported.

    GFT505-115-12 was an open label trial conducted in a total of 25 healthy volunteers, all treated with elafibranor, to assess dose linearity of pharmacokinetic parameters after single administration of elafibranor (120, 180 and 240 mg) and time dependency of pharmacokinetic parameters and repeated administration of elafibranor for 16 days. Eight subjects withdrew from the trial due to AEs and no SAEs were reported.

        To date, we believe that the results from our Phase 1 program of elafibranor support a favorable tolerability profile up to 300 mg (which is 3-4 times higher than expected therapeutic doses of 80 mg/day and 120 mg/day), both under fed and fasting conditions, either after single administration or after repeated administration for at least 14 days (from 10 mg/day to 300 mg/day) in healthy, overweight/obese or diabetic volunteers. In this range of doses, no SAE related to elafibranor was reported. None of these Phase 1 trials revealed any serious safety signals and, notably, a 14-day regulatory cardiac

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safety study did not reveal an effect on QT/QTc, which is a measure of cardiac safety risk, at the high dose of 300 mg per day.

        Adverse events were all of mild to moderate intensity with no apparent imbalance over placebo or comparator groups. Most of them resolved before study end. They consisted mainly of gastrointestinal disorders (diarrhea, abdominal pain, flatulence, constipation, vomiting, dyspepsia).

        Furthermore, no clinically relevant changes were detected in biochemical and hematological parameters, vital signs (including arterial pressure) or electrocardiogram. There was no evidence of dose-related clinically potentially significant abnormalities (CPSA) and/or clinically potentially significant changes (CPSC).

    Animal Models and Toxicology Studies

        Several animal models have been used to assess efficacy of elafibranor on NASH resolution, liver fibrosis and comorbidities like dyslipidemia, type 2 diabetes or atherosclerosis. Results have been published in peer-review journals, including Hepatology, and/or presented at multiple international scientific meetings. Recently, we observed elafibranor's effect on liver cancer prevention and development in two mouse models. In the first mouse model, the effect of elafibranor was evaluated in mice that had been fed a diet that induced NASH and hepatocellular carcinoma, or HCC, referred to as the "CD/FF diet." The mice were divided into three groups: one group of eight mice received a "regular" diet, one group of seven mice received the CD/FF diet and one group of four mice received the CD/FF diet plus elafibranor at a dose of 30 mg/kg/day. At week 36, all of the mice that had received the CD/FF diet alone developed NASH and grade 3 fibrosis. In contrast, among the mice that received elafibranor, none developed NASH and all only developed grade 1 fibrosis. At the end of the study, we evaluated nodules present in the mice. All of the mice in the group that had received the CD/FF diet alone had between six to eight nodules present in their livers. In contrast, nodules were only present in half of the mice that were administered elafibranor, and even those only had one or two nodules. Liver sections from the mice were analyzed to determine the presence of tumors and whether any tumors were benign or malignant. In the group that received the CD/FF diet alone, 86% had developed at least one malignant lesion, whereas no tumor lesions—malignant or benign—were observed in the group that received elafibranor.

        In the second mouse model, NASH and HCC were induced in mice through administration of the CD/FF diet for 19 weeks, following DEN (carcinogen) injection at 14 days post partum. The mice were divided into two groups—one group of six mice received the CD/FF diet alone and one group of seven mice received the CD/FF diet and, only for the last eight weeks of treatment, began to receive elafibranor at a dose of 30 mg/kg/day, once histological NASH lesions had already developed. A group of three mice that received a "regular" diet and no DEN injection was kept as comparator. Liver sections from the mice were analyzed to determine the presence of tumors and whether any tumors were benign or malignant. In the group that had received the CD/FF diet alone, half developed at least one HCC lesion. In contrast, in the group that received elafibranor for the last eight weeks of treatment, only 28% developed at least one HCC lesion. None of the mice on the "regular" diet had benign or malignant lesions. Also in this study, we measured the concentration of alpha fetoprotein, or AFP, a commonly used cancer marker, in the mice serum. In the group that had received the CD/FF diet alone, AFP serum concentration was significantly increased compared to that seen in healthy mice, whereas in the group that received elafibranor, AFP serum concentration was reduced by 47% as compared to the group receiving CD/FF alone, a result that was statistically significant with a p-value of less than 0.01.

        We have also evaluated elafibranor in numerous regulatory toxicology studies in animals, with up to two years of treatment in rats and mice and up to one year of high-dose treatment in monkeys. These studies did not reveal any major signs of toxicity relevant to humans. In all animal studies,

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elafibranor did not cause weight gain, peripheral edema or increase heart weight which are side effects typically associated with drugs acting on PPARg. This confirmed selectivity of elafibranor for the two other forms of PPARs: PPARa and PPARd.

Regulatory Pathway for Treatment of NASH

        In February 2014, the FDA granted fast track designation to elafibranor for the treatment of NASH. If the results of the interim analysis of our Phase 3 clinical trial are positive, we plan to apply for accelerated marketing approval from the FDA under Subpart H and conditional approval from the EMA in 2020. Like all companies using the Subpart H and conditional approval pathway, we must continue the trial post-marketing in order to demonstrate the efficacy of elafibranor on clinical benefit within the full 2,000 patient population. We will evaluate a composite endpoint of clinical outcomes which include all-cause mortality, the progression to cirrhosis, and a full list of cirrhosis-related events such as liver transplantation, Model for End-Stage Liver Disease, or MELD score ³15, and hepatocellular carcinoma, or HCC, on the full trial population, with the goal of obtaining full marketing approval. The Phase 3 trial will remain blinded, and all patients will be maintained under treatment and followed until the occurrence of a pre-defined number of progressions to clinical outcomes.

Pediatric NASH

        As prevalence of obesity in children has increased, NAFLD has become a growing health concern in this population. A study published in 2016 estimates that NAFLD affects approximately 10-20% of the general pediatric population, with approximately 25% of these children progressing to NASH, and that within the next 10 years, pediatric NAFLD is expected to become the most prevalent cause of liver pathology, liver failure and indication for liver transplantation in childhood and adolescence in the Western world. In the United States, the prevalence of NAFLD in children is estimated to be approximately 10%. Thus, regulatory agencies strongly encourage parallel development of drugs to treat this specific population.

        In November 2016, we initiated the first juvenile toxicology studies of elafibranor in rats as part of our Pediatric Investigation Plan, or PIP, in the treatment of NAFLD/NASH following agreement on our PIP from the EMA. In January 2018, we received agreement from the FDA on our Pediatric Study Plan, or PSP, after which we announced the official launch of the NASH pediatric program with elafibranor. In March 2019, the FDA indicated that the protocol for our Phase 2, 12-week randomized trial of 20 pediatric patients is acceptable to fulfill the requirements of the Pediatric Research Equity Act. This trial will evaluate the pharmacokinetic and pharmacodynamic properties of elafibranor in children and adolescents and will be conducted in U.S. clinical centers specializing in NASH pediatrics. We expect to begin enrolling patients in this clinical trial in 2019.

NASH Combination Therapies with Elafibranor

        NASH is a complex and multifaceted disease and several drug classes with complementary mechanisms of action may be required for optimal management of NASH, liver fibrosis and comorbidities. Therefore, there is an increasing need for therapies based on drug combinations. To address this need, we are also evaluating combination therapy approaches combining elafibranor with molecules being developed in our other programs, molecules already marketed in other indications and certain molecules currently being developed by others for the treatment of NASH, with the goal of treating the largest possible number of NASH patients.

        During the International Liver Congress in Amsterdam in 2017, we presented data on the therapeutic complementarity of elafibranor and an FXR agonist illustrating the potential for new combination treatments with elafibranor for the optimal care of NASH patients. We evaluated

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elafibranor in combination with obeticholic acid, or OCA, an FXR agonist, in a preclinical rat model. In this study, a total of 90 rats were divided into several groups of 10, with a control group receiving a "normal" diet and the rest receiving a CDAA/c diet. Of the rats receiving the CDAA/c diet designed to induce fibrosis, mice received either elafibranor alone (in doses of either 1, 3 or 10 mg/kg/day), OCA (in doses of either 10 or 30 mg/kg/day) or a combination of one of the three elafibranor doses plus OCA 10 mg/kg/day. At the end of the 12-week study period, the rat livers were analyzed for levels of liver fibrosis and hepatic collagen, a biochemical measure of fibrosis. Notably, significant reduction in fibrosis was observed in all rats that were given elafibranor of any dose level. In contrast, a significant reduction in fibrosis was only achieved by the rats receiving OCA at the higher 30 mg/kg/day dose level. In this study we observed a synergistic effect of elafibranor and OCA on fibrosis in the rats receiving combination therapy even at the low doses of elafibranor. Fibrosis was reduced by 71% and 81% in the groups receiving elafibranor 1 mg/kg/day plus OCA 10 mg/kg/day and elafibranor 3 mg/kg/day plus OCA 10 mg/kg/day, respectively. Rats administered with combination therapy also had significant decreases in hepatic collagen compared to decreases observed in the mice receiving only elafibranor or OCA alone. We believe this synergistic effect, even at submaximal doses, supports the potential of our combination therapy approach.

        In April 2018, we presented data at the European Association for the Study of the Liver, or EASL, International Liver Congress from studies of combination therapy with elafibranor in which NTZ had a synergistic effect in primary human stellate cells and in a model of NASH with fibrosis. In this mouse model, a total of 39 mice were divided into five groups—one group of 4 mice received a "normal" diet, one group of 12 mice received only a diet designed to promote lipid accumulation and result in liver fibrosis, referred to as a CDAA/c diet, one group of eight mice received the CDAA/c diet plus elafibranor 1 mg/kg/day, one group of eight mice received the CDAA/c diet plus NTZ 100 mg/kg/day and the final group of seven mice received the CDAA/c diet plus elafibranor 1 mg/kg/day plus NTZ 100 mg/kg/day. At the end of the 12-week study period, the mice livers were analyzed for levels of liver fibrosis and hepatic collagen. The mice in the combination therapy group experienced a statistically significant attenuation of liver fibrosis of 52% (range of 25% to 63%), compared to 36% in the group receiving only elafibranor (range of 18% to 47%) and 27% in the group receiving only NTZ (range of –4% to 53%), each as compared to the CDAA/c only group. Similarly, in the combination therapy group, hepatic collagen was reduced by 41% (ranging from 26% to 56%), compared to 22% in the group receiving only elafibranor (ranging from 11% to 33%) and 23% in the group receiving only NTZ (ranging from 13% to 34%), each as compared to the CDAA/c only group. Altogether, these findings indicate that NTZ may be a good candidate for a NASH combination therapy with elafibranor, thus establishing the rationale for proof-of-concept studies in patients with NASH and advanced fibrosis.

        Finally, at the annual meeting of the AASLD in San Francisco in November 2018, we presented new data on anti-NASH treatment combinations, using elafibranor as backbone, in in vitro and in vivo NASH models, associating it with an ACC inhibitor. In this study, mice were divided into five groups—one group of four mice received a "normal" diet, one group of 12 mice received the CD/FF diet alone, one group of eight mice received the CD/FF diet plus elafibranor 1 mg/kg/day, one group of eight mice received the CD/FF diet plus GS-0976, an ACC inhibitor product candidate being developed by Gilead Sciences, Inc., at 10 mg/kg/day and the final group received the CD/FF diet plus elafibranor 1 mg/kg/day plus GS-0976 at a dose of 10 mg/kg/day. At the end of the eight-week study, the mice livers were analyzed for NAS and levels of hepatic triglycerides, an indicator of advancing liver disease. As compared to the group that received only the CD/FF diet, the groups receiving either elafibranor or GS-0976 alone showed subtle and non-significant decreases in NAS (3% and 9%, respectively) and hepatic triglycerides (6% and 2%, respectively). However, the group of mice that received the CD/FF diet and the combined therapy of elafibranor and GS-0976 showed statistically significant (p<0.05) decreases in both NAS (33%) and hepatic triglycerides (64%). These results suggest the potential of elafibranor, in combination with an ACC inhibitor, in reducing liver fat.

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IVD Test for the Diagnosis of NASH

        As part of our strategy to address the unmet needs in NASH, we have advanced a diagnostic program based on the in-house discovery that specific microRNA, or miRNA, which are short non-coding RNA molecules that are master regulators of many biological processes, are expressed at different levels in patients with NASH. This discovery kicked off a multi-year effort that has resulted in the development of what we target to be the first validated diagnostic test to identify patients with NASH who may be appropriate candidates for treatment. In January 2019, we entered into a license agreement with LabCorp to allow them to deploy our IVD test in the clinical research space.

Circulating Biomarkers and miRNA

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

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

        Since our inception, we have developed a recognized expertise in transcriptomics, which is the study of the RNA transcripts in cells. We initially focused this expertise on mRNA and have expanded in recent years to the study of specific miRNAs. We have developed methods for the extraction and rapid and reliable measurement of miRNA in samples of blood, serum or plasma. In our miRNA biomarker research program, we use advanced technologies, such as next generation sequencing, or NGS, which allows us to perform sequencing of millions of small fragments of DNA in parallel.

Today's Challenges in Diagnosing NASH

        NASH is a silent, asymptomatic disease. Patients with NASH are often unaware of their disease until their condition progresses to more serious and life-threatening stages. The identification of patients with NASH and early fibrosis is a key area of major unmet need since medical intervention at this stage can help prevent or attenuate adverse clinical outcomes.

        A liver biopsy is the clinical standard to formally diagnose NASH and assess the stage of fibrosis in a patient suspected of having NASH. However, the liver biopsy is an invasive procedure that presents a number of limitations, including:

    pain, discomfort and bleeding;

    potential mortality;

    high cost; and

    low levels of patient acceptance.

        In addition, there are a limited number of specialists who are able to perform and interpret liver biopsies when considering the anticipated increase in clinical cases over the next 10 years. Furthermore, there are roughly 1,000 to 2,000 practicing hepatologists in the United States, which limits the

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availability of the liver biopsy procedure to adequately diagnose these patients. As such there is a clear unmet need and market opportunity for the development of non-invasive diagnostics in NASH.

        No FDA-cleared diagnostic tests indicated for NASH exist and the currently available diagnostics are either general tools for the management of chronic liver disease patients, such as FibroScan or Magnetic Resonance Elastography, or are not widely accessible, such as MRI-based technologies. The following table depicts some of the currently available diagnostic approaches for NAFLD and liver fibrosis, including their benefits and limitations:

NAFLD   Liver Fibrosis

Ultrasound

Adequate for detection of fatty liver in patients at risk of NAFLD

Low accuracy for mild steatosis

Low cost and wide availability

MRI

High performance in detecting low grade of steatosis

Low availability, high costs and long exam time, potentially limiting use in daily medical practice

 

Ultrasound Elastography (Fibroscan, ElastQ)

Diagnostic performances for F3 and F4 are good but limited when F<3

Limited to specialist's office

MRE

Potential for detecting F<3

Low availability, high costs, long exam time

Fibrosis scores (NASH FibroSure and equivalent scores)

Diagnostic performances are good for F3 and F4 but degrade when F<3

Not validated in large cohorts of NAFLD/NASH patients in intended use NAFLD

        Therefore, there is a high unmet need for a validated, highly-specific test to identify patients with NASH and fibrosis as an alternative to the liver biopsy for use in the clinical research and clinical care settings. We believe our diagnostic test, if validated and approved for marketing, may directly address this clinical gap.

Our Solution: IVD Test Based on Our Biomarker Algorithm

        Aware of the challenges associated with diagnosing NASH, we initiated a program to combine our technical expertise in informatics, machine learning and next-generation sequencing with access to our extensive NASH clinical biobank, including cohorts from our GOLDEN-505 and RESOLVE-IT clinical trials, in addition to cohorts from academic partnerships, to pursue the discovery of novel biomarkers that may hold the key in developing a novel diagnostic test in NASH. In 2015, we reached a key milestone with the discovery that two miRNA biomarkers, miR-200a and miR-34a, were differentially expressed in patients with NASH and early fibrosis.

        Since then, we have further refined the diagnostic test and have ultimately found four unique biomarkers that we believe provide the best overall diagnostic performance: alpha-2-macroglobulin, chitinase-3-like protein 1, hemoglobin A1c, and microRNA-34a. Our diagnostic test combines the results from these four independent assays through a single proprietary algorithm, referred to as NIS4, to assist in identifying patients with both NASH and significant fibrosis who should be considered for therapeutic intervention with elafibranor or any other suitable therapeutic. We intend to market our IVD test, if it receives marketing authorization, as a standalone diagnostic with the potential to enable a non-invasive, accessible and validated alternative to the liver biopsy to benefit patients, improve overall clinical care and greatly reduce barriers to entry for innovative therapies like elafibranor.

        Using data from our elafibranor development program, we have assessed the predictive value of our IVD test in samples from 687 patients, representing a merged cohort comprising 220 patients from our GOLDEN-505 Phase 2b clinical trial and the first 467 patients screened in our RESOLVE-IT Phase 3 clinical trial. In testing our IVD test, we utilized the initial liver biopsy and blood sample from each patient. We compared the results of our IVD test on the blood sample to the patient's initial liver biopsy to evaluate whether our IVD test was an accurate predictor of the patient's levels of NASH and fibrosis. We tested our IVD test's ability to sort patients with NAS³4 and F³2 from patients with

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NAS<4 or F<2 in this cohort of prospectively enrolled patients suspected of NASH. This was determined using the AUROC, or Area Under Receiver Operating Characteristic, curve, a type of analysis that gives an overall performance metric of a diagnostic test based on its ability to correctly identify those with the disease, or sensitivity, and its ability to correctly rule out those without the disease, or specificity. The AUROC is expressed as a ratio of these two measures, with the maximum score being 1.0.

        Our IVD test outperformed currently available blood-based biomarkers when assessed in a head-to-head comparison from 687 patients with a full set of biochemical parameters. As depicted in the figure below, our IVD test, labeled as NIS4, achieved an AUROC = 0.83 (95% CI 0.7965 - 0.8557), compared to the following currently available biomarkers: the Fib-4 Index (FIB4), the NAFLD Fibrosis Score (NFS), the Enhanced Liver Fibrosis Score (ELF), the Fatty Liver Index Score (FLI), the BARD Score (BARD), the AST to Platelet Ratio Score (APRI) and the FibroTest.

GRAPHIC

        An assessment of the NIS4 IVD test results based on fibrosis stage (F0-F4) or NAS category (0-1, 2-3, 4-5 or >6) revealed significant differences between fibrosis stages (p<0.0001 for all comparisons) and NAS categories (p<0.01 for all categories). We believe that these observations demonstrate that NIS4, our IVD test, has the potential to be used in medical practice, as well as in a clinical research setting, to accurately identify patients with NASH (NAS³4) and significant fibrosis (F³2).

Regulatory and Commercial Strategy

        We began communications with the FDA in 2017 to discuss potential regulatory pathways for our IVD test. Based on these discussions, we are using blood samples and liver biopsy results from patients enrolled in our clinical trials of elafibranor conducted to date in order to provide support for the potential validation of our test. By applying our IVD test to a patient's blood sample, and then comparing the IVD test result to that patient's liver biopsy result, we can assess whether our IVD test is accurate in diagnosing patients with NASH and significant fibrosis who should be considered for therapeutic intervention. We are currently finalizing the analytical and clinical study designs which are required prior to initiating formal validation studies.

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        In January 2019, we entered into a license agreement with LabCorp for development and deployment in the clinical research space as a laboratory developed test, or LDT. We believe this agreement will provide expanded access to, and further validation of our IVD test which should be supportive in our plans to seek marketing authorization from the FDA. Initially, we will limit the use of the LDT for use in clinical research studies. LabCorp will serve as a central lab partner, processing samples and providing test results. LabCorp is permitted and accredited, and will be responsible for submitting the LDT for any validation that may be required under applicable state and federal laws. We believe that leveraging the capabilities of a large diagnostic company will allow for early test adoption, result in third-party publications and provide additional evidence of the clinical utility of our IVD test. We plan to use these benefits to further support the next stage of our commercial strategy, which is to first have the FDA grant our request for marketing of the IVD at a single site and then expand the IVD test to multi-site use through a second marketing authorization for use in routine clinical care. With the assistance of a partner, we plan to produce IVD test kits and commercialize the kit-based tests in the United States, which is a prerequisite for enabling our multi-site strategy.

        In parallel, we are progressing towards submitting a data package to the EMA to enable CE marking and associated marketing approval in key European markets during 2020. In Europe, if approved, we plan to sell our kit-based IVD tests through a distributor or commercial partner to independent, smaller laboratories, as there are fewer large central laboratories in these regions.

Elafibranor for the Treatment of PBC

About PBC

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


Primary Biliary Cholangitis

GRAPHIC

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

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

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

Limitations of Current Treatment Options

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

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

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

Our Solution: Elafibranor for the Treatment of PBC

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

        Targeting PPAR receptors has shown multiple beneficial activities, including the reduction of bile acid synthesis, improved detoxification of bile in the bile duct and anti-inflammatory activity. In third-

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party clinical trials, drugs targeting PPAR receptors resulted in a significant decrease in ALP and improved biochemical profiles and pruritus in PBC patients. Patients with PBC often have elevated ALP, and studies have shown a correlation between elevated ALP levels and increased risk of adverse patient outcomes. We have observed elafibranor's effect in lowering ALP levels in our clinical trials, including our Phase 2 clinical trial in PBC.

Our Clinical Program for Elafibranor in the Treatment of PBC

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

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

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

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

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

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

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

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

        Patients treated with elafibranor showed improvement in other PBC markers such as gamma-glutamyl transferase and metabolic markers such as total cholesterol, low-density lipoprotein-C, and triglycerides. Improvement in pruritus was observed and will be confirmed in a study of longer duration. Treatment with elafibranor was generally well tolerated, with a similar number of patients experiencing adverse events in the drug treatment and placebo arms of the trial, with the most common

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

        Based on these preliminary results, we plan to advance our PBC program into Phase 3 development in 2019.

Nitazoxanide Program for the Treatment of Fibrosis

About Fibrosis

        We are developing NTZ for the treatment of liver fibrosis. Progressive liver fibrosis can result from chronic liver injury of any etiology, including viral infection, alcoholic liver disease and NASH. Multiple studies have demonstrated that patients with NASH are at higher risk for adverse liver-related outcomes, with the degree of fibrosis contributing most significantly to this increased risk.

        Cirrhosis is the terminal stage of progressive liver fibrosis, which results in over 1 million deaths annually worldwide. Lethal complications of cirrhosis include functional liver failure, portal hypertension-induced variceal bleeding, ascites, hepatic encephalopathy, systemic bacterial infection and liver cancer, especially HCC. Annual direct and indirect costs for the care of cirrhosis exceed $12 billion in the United States alone, and there is an urgent need for anti-fibrotic drugs to prevent progression towards hepatic decompensation and the associated morbidity and mortality.

        Approved therapies directly targeting and reversing advanced fibrosis are still lacking, but clinical studies have indicated that liver fibrosis and even cirrhosis can be regressed by therapeutic intervention aimed at the primary disease etiology.

Our Solution: Repositioning of Nitazoxanide

        The identification of NTZ is the result of our research program designed to discover novel anti-fibrotic molecules with a priority given to liver fibrosis. Our strategy to target fibrosis is based on the use of a phenotypic screening approach combined with the use of a compound library composed of FDA-approved drugs. The phenotypic method does not rely on knowledge of the identity of a specific drug target or a hypothesis about its role in a disease, but rather focuses on the modulation of a disease-linked phenotype. In our model, we evaluated the compounds for their capacity to interfere with the activation of quiescent hepatic stellate cells into myofibroblasts, which are the major fibrogenic cell type in the liver.

        Following screening of FDA-approved drugs, and investigation of drug candidate profiles in medical literature, we identified NTZ, currently commercialized and prescribed in the United States and in several other countries as an anti-parasitic, as a potent anti-fibrotic agent that we believe can be repurposed for the treatment of fibrosis.

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Pre-clinical and Clinical Development Program

        As part of our pre-clinical program, we have studied NTZ in disease models and in human fibroblasts from different organs. Fibroblasts are cells in connective tissues that, when activated, play a significant role in the development of fibrosis. In April 2017, we presented the results of this research supporting the potential efficacy of NTZ in two disease models of liver fibrosis at the EASL International Liver Congress. In these two in vivo models, we observed that administration of NTZ significantly attenuated liver fibrosis development.

        We have also studied NTZ in two mouse models. In the first mouse model, we observed the effect of NTZ administration on mice that had been exposed to a toxin that causes liver damage and fibrosis. The mice were divided into four groups—a group of six mice that received a placebo, a group of nine mice that received the toxin alone, a group of 10 mice that received the toxin plus NTZ at a dose of 32 mg/kg/day and a group of 10 mice that received the toxin plus NTZ at a dose of 104 mg/kg/day. After six weeks, we measured fibrosis by percentage of surface area on a slide from tissue that was fibrotic. The cohort that received NTZ 32 mg/kg/day had their observed liver fibrosis as measured by histological evaluation reduced by an average of 30.3% (p<0.001) (ranging from 10% to 53%) and the cohort that received NTZ 104 mg/kg/day had their liver fibrosis reduced by an average of 24.7% (p<0.01) (ranging from 1% to 43%), in each case as compared to the cohort that received the toxin alone.

        In the second mouse model, we observed the effect of NTZ administration on mice that had been fed a CDAA/c diet. The mice were divided into four groups—a group of four mice that received a "normal" diet as the control group, a group of 12 mice that received the CDAA/c diet alone, a group of eight mice that received the CDAA/c diet plus NTZ at a dose of 26.3 mg/kg/day and a group of eight mice that received the CDAA/c diet plus NTZ at a dose of 78.1 mg/kg/day. After 12 weeks, we measured fibrosis by percentage of surface area on a slide of liver tissue that was fibrotic. The cohort that received NTZ 26.3 mg/kg/day did not have a statistically significant reduction in liver fibrosis as compared to placebo, but the cohort that received NTZ 78.1 mg/kg/day had their liver fibrosis reduced by an average of 27.4% (p<0.001) (ranging from –4% to 53%) as compared to placebo. In this same study, we also observed that the cohort that received NTZ 78.1 mg/kg/day had their liver collagen accumulation reduced by 22.9% (p<0.001) (ranging from 12% to 34%) compared to the placebo group.

        In December 2018, we announced the start of an investigator-initiated single-center, open-label trial to evaluate the safety and efficacy of nitazoxanide in patients with NASH-induced Stage 2 or Stage 3 fibrosis. The primary objective of the study is to evaluate the safety and tolerability of NTZ in patients with NASH-induced stage 2 or stage 3 fibrosis. Secondary objectives of this proof-of-concept trial include evaluating the anti-fibrotic effect of NTZ by several approaches, including a method to quantify hepatic fibrogenesis flux rates. Using heavy water labeling, de novo collagen-associated protein synthesis will be determined through Fractional Synthesis Rate of circulating proteins at baseline and at the end of treatment to assess the effect of daily oral administration of NTZ. Other non-invasive methods, including MRE and FibroScan, will be used to evaluate the liver stiffness changes after NTZ treatment.

TGFTX1 Program for the Treatment of IL-17-Dependent Autoimmune Diseases

        We have designed our TGFTX1 preclinical program to allow us to identify and develop drug candidates for the treatment of certain IL-17-dependent autoimmune diseases, including psoriasis and certain inflammatory respiratory conditions such as neutrophilic asthma, chronic obstructive pulmonary disease, or COPD, or asthma-COPD overlap syndromes. Psoriasis is a chronic and debilitating autoimmune disease that affects approximately 125 million people globally, or 2 to 3% of the total population, and approximately 80% of psoriasis patients suffer from a mild-to-moderate form of the

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disease. Beyond the physical manifestations, psoriasis can have a significant impact on a patient's quality of life, often with profound psychosocial consequences.

        There are three major forms of therapy: topical, phototherapy and systemic therapy. The treatment options are based on psoriasis severity. Recent advances in biologic agents have considerably expanded the treatment options, however, the prices of these newer treatments are higher than traditional systemic medications. Topical therapy remains the standard of care for treatment of mild-to-moderate disease and the biological agents are typically reserved for the small population of psoriasis patients with the most severe disease. The available topical therapies include the use of corticosteroids and vitamin D analogues, as monotherapies or in combinations. Although these treatments are still the standard of therapy for mild-to-moderate psoriasis, there are considerable side effects that have been documented.

        IL-17 is produced by inflammatory lymphocytes upon the activation of RORgt, a key transcription factor that controls the function of IL-17-secreting lymphocytes. Recent data suggest that RORgt inhibition may be a straightforward and efficient way to curb exacerbated immune responses caused by IL17. In our TGFTX1 program, we have identified novel RORgt antagonists. One of our proprietary molecules is a potent and selective RORgt antagonist that inhibits IL-17 release from human primary Th17 lymphocytes. This topical drug candidate improved both disease score, as measured by the Psoriasis Area and Severity Index, or PASI, and skin histology in a mouse model of psoriasis and complies with a target product profile for topically delivered drugs. In this mouse model, we pre-treated a group of 10 mice with TGFTX1 for three days before applying a skin irritant, and treated another group of 10 mice with the skin irritant alone for a period of eight days. We assessed the severity of inflammation daily and then at the end of the study analyzed the skin samples to evaluate changes in psoriasis using a PASI score and measuring epidermal thickness. The group of 10 mice pre-treated with TGFTX1 had significant decreases in PASI score (40%, p<0.001), epidermal thickness score (41%, p<0.001) and in a direct measure of epidermal layer thickness (33%, p<0.001), compared to the group of 10 mice given the skin irritant alone. We have also completed several regulatory pre-IND studies of this drug candidate that are required for topically administered agents.

        In parallel, we are developing a different RORgt drug candidate to treat certain inflammatory lung conditions, such as severe neutrophilic asthma, COPD and asthma-COPD overlap syndrome, conditions in which pathologic actions of IL-17 are postulated.

        To further these programs, we plan to leverage the expertise of specialized pharmaceutical companies with already established franchises in dermatology and/or respiratory diseases through collaborations or other strategic alliances that we may enter into in the future.

Competition

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

NASH

        There are currently no approved drugs for the treatment of NASH; however, the NASH market has been attracting increasing interest from larger pharmaceutical companies over recent years.

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        We are aware of three other companies that are also in Phase 3 development of a drug candidate for the treatment of NASH:

    Gilead Sciences, Inc., which has an ongoing Phase 3 trial of its drug candidate selonsertib targeting fibrosis only in patients with level F3 fibrosis due to NASH, but which recently announced that in its Phase 3 trial of selonsertib, in patients with level F4 fibrosis due to NASH, selonsertib did not meet the pre-specified week 48 primary endpoint of one stage or greater histologic improvement in fibrosis without worsening of NASH;

    Intercept Pharmaceuticals, Inc., which recently announced topline results for its Phase 3 clinical trial of obeticholic acid, or OCA, an FXR agonist for the treatment of NASH, with OCA having achieved one of its two primary endpoints, demonstrating statistically significant improvement in liver fibrosis without worsening of NASH at 18 months, but not meeting the other primary endpoint of NASH resolution without worsening of fibrosis; and

    Allergan plc, following its acquisition of Tobira Therapeutics, Inc., which is developing its drug candidate cenicriviroc for the treatment of NASH.

        We are also aware of other companies that have drug candidates in earlier stages of development, including:

    Madrigal Pharmaceuticals, Inc., which has completed Phase 2 clinical trials of its drug candidate MGL-3196, a thyroid hormone receptor, or THR, b-selective agonist, for the treatment of NASH and which has announced plans to initiate a Phase 3 clinical program;

    NGM Biopharmaceuticals, Inc., which is in Phase 2 development of its drug candidate NGM282, an engineered variant of the human hormone known as FGF19 for the treatment of NASH;

    Inventiva S.A., which is in Phase 2 development of its drug candidate lanifibranor, a drug targeting PPARa, PPARd and PPARg for the treatment of both NASH and systemic sclerosis; and

    Novartis AG, which is currently in Phase 2 development of its candidate emricasan.

        In addition to these drug candidates in development, we also may compete with approved drugs in other indications which could be used off-label for the treatment of NASH.

        With respect to our IVD test in development to use blood-based biomarkers to identify patients with NASH who we believe could benefit from treatment with elafibranor, there are a number of clinical tools available for the management of chronic liver disease patients, but there are no validated diagnostic tests for NASH available on the market today that are an alternative to an invasive liver biopsy procedure.

PBC

        UDCA was approved by the FDA to treat PBC in 1997 and remained the only approved treatment for PBC until 2016, when Ocaliva was approved by the FDA and EMA for the treatment of PBC in combination with UDCA in adults with an inadequate response to UDCA, or as monotherapy in adults unable to tolerate UDCA. Although Ocaliva has been the subject of continued safety concerns with respect to pruritus and serious liver injury or death, leading to the FDA issuing a Boxed Warning in 2018, elafibranor would compete with these drugs already approved for the treatment of PBC.

        We are aware of other companies developing drug candidates for the treatment of PBC with whom we would also compete, including CymaBay Therapeutics, Inc., Zydus Cadila, Enanta Pharmaceuticals, Inc. and Eisai Inc.

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        In addition to these approved drugs and drug candidates in development, we also may compete with approved drugs in other indications which could be used off-label for the treatment of PBC.

        We believe that elafibranor's differentiated mechanism of action in targeting PPARa and PPARd, the positive efficacy results from our Phase 2b clinical trial in NASH and our Phase 2 clinical trial in PBC and the favorable tolerability profile and demonstrated lack of safety concerns observed to date in clinical trials together suggest the potential for elafibranor to have competitive advantages over approved drugs and drug candidates in development by our competitors.

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