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FI

FIBROGEN INC (FGEN)·Q1 2024 Earnings Summary

Executive Summary

  • Q1 2024 delivered 55% YoY revenue growth to $55.9M, driven by strong China roxadustat sales and a one-time $25.7M drug product revenue item from the AstraZeneca U.S./RoW termination; net loss improved to $(32.9)M (vs. $(76.7)M LY) with EPS of $(0.33) .
  • China roxadustat fundamentals remained robust: FibroGen net product revenue under U.S. GAAP rose 26% YoY to $30.5M; total China roxadustat net sales (FibroGen + JDE) grew 24% YoY to $79.4M on 39% volume growth; value share reached 47% in the latest period .
  • Guidance maintained for 2024 China revenue: FibroGen net product revenue $120–$135M and total China roxadustat net sales $300–$340M; cash and equivalents/investments/AR totaled $214.7M with runway into 2026 .
  • Key timing shifts: pamrevlumab toplines moved to mid-2024 (Precision Promise) and 3Q 2024 (LAPIS); China CIA approval timing updated to 2H 2024 (NRDL inclusion likely not before 2026 absent approval by 6/30/24). Near‑term stock catalysts include both pamrevlumab readouts, CIA decision, and ASCO data for FG‑3246 .

What Went Well and What Went Wrong

  • What Went Well

    • China roxadustat strength: FibroGen China net product revenue +26% YoY to $30.5M; total China roxadustat net sales +24% to $79.4M on 39% volume growth; “Roxadustat continues to be the number one brand” with value share reaching 47% .
    • Cost discipline: R&D down 48% YoY to $38.4M; SG&A down 33.5% YoY to $22.8M, reflecting structural cost reductions and leaner SG&A .
    • Oncology pipeline momentum: FG‑3246 Phase 1 monotherapy showed rPFS 8.7 months, 20% partial response rate among RECIST evaluable, PSA50 in 36%, and acceptable safety profile; management: “compelling” Phase 1 data and plans for Phase 2/3 path .

  • What Went Wrong

    • Revenue quality: Q1 revenue lift included a one‑time $25.7M drug product revenue from the AstraZeneca termination; development revenue declined and is expected to be below $0.5M per quarter for the remainder of 2024 .
    • Continued losses: Despite improvement, the company reported a net loss of $(32.9)M; net margin remained negative (see table) .
    • Timeline slippage: Pamrevlumab toplines shifted to mid‑2024 (Precision Promise) and 3Q 2024 (LAPIS); CIA approval timing updated to 2H 2024, potentially delaying NRDL inclusion for CIA to 2026 absent mid‑year approval .

Financial Results

Overall P&L comparison (oldest → newest)

MetricQ1 2023Q3 2023Q4 2023Q1 2024
Total Revenue ($M)$36.2 $40.1 $27.1 $55.9
Net Income (Loss) ($M)$(76.7) $(63.6) $(56.2) $(32.9)
Diluted EPS ($)$(0.81) $(0.65) $(0.57) $(0.33)
Total Operating Expenses ($M)$112.3 $103.6 $81.3 $87.0
Net Income Margin (%)(212.1%) (158.5%) (207.2%) (58.9%)

Revenue composition (oldest → newest)

Revenue Component ($M)Q1 2023Q3 2023Q4 2023Q1 2024
License Revenue$6.0 $2.6 $0.0 $0.0
Development & Other$3.9 $6.8 $2.6 $0.9
Product Revenue (Net)$24.2 $29.4 $23.5 $30.5
Drug Product Revenue (Net)$2.1 $1.3 $1.1 $24.5

China roxadustat operating KPIs (YoY comparison)

KPIQ1 2023Q1 2024
Total Roxadustat Net Sales in China ($M)$64.1 $79.4
FibroGen Net Product Revenue (U.S. GAAP) China ($M)$24.2 $30.5
Net Transfer Price to JDE ($M)$19.3 $24.5
Volume Growth (YoY)—+39%

Consensus vs. actual (Q1 2024)

  • Consensus EPS and revenue (S&P Global): Unavailable due to data access limits this cycle. Therefore, we cannot determine beat/miss vs. consensus for Q1 2024. Values from S&P Global were unavailable at time of analysis.

Drivers this quarter

  • YoY growth was driven by China net product revenue and a one‑time $25.7M drug product revenue recognition from the AstraZeneca U.S./RoW termination .
  • Cost structure improved with materially lower R&D and SG&A YoY, though cost of goods included $21.1M related to the AZ termination accounting .

Guidance Changes

Metric/ItemPeriodPrevious Guidance/TimingCurrent Guidance/TimingChange
China Net Product Revenue (U.S. GAAP)FY 2024$120–$135M $120–$135M Maintained
Total Roxadustat Net Sales in ChinaFY 2024$300–$340M $300–$340M Maintained
Roxadustat CIA China Approval—Mid‑2024 2H 2024 Pushed back
NRDL Inclusion for CIA——Not before 2026 unless approved by 6/30/24 New detail
Pamrevlumab Precision Promise topline—2Q 2024 Mid‑2024 Slight delay
Pamrevlumab LAPIS topline—2Q 2024 3Q 2024 Delayed
Total OpEx incl. COGSQ2 2024—$70–$80M New

Earnings Call Themes & Trends

TopicPrevious Mentions (Q‑2, Q‑1)Current Period (Q1 2024)Trend
Pamrevlumab timelinesQ3’23: LAPIS 1Q’24; Precision Promise 1H’24 . Q4’23: both 2Q’24 .Mid‑2024 (Precision Promise) and 3Q’24 (LAPIS) .Slipped modestly.
Roxadustat China momentumQ3’23: value share 42%, strong growth . Q4’23: strength continues .Value share 47%, volume +39% YoY, strong Q1 sales .Strengthening.
CIA timing/NRDLQ3’23: sNDA accepted, expect mid‑2024 . Q4’23: mid‑2024 .Approval 2H’24; NRDL inclusion likely 2026 unless approved by 6/30/24 .Slight delay.
Cost/RunwayQ3’23: cost cuts $120M; runway into 2026 . Q4’23: runway into 2026 .Operating discipline reiterated; runway into 2026 .Maintained.
FG‑3246 (ADC)Q3’23: Phase 1 mono data by 1Q’24; Phase 2 in 2H’24 . Q4’23: additional Phase 1 mono data 1Q’24 .Phase 1 mono rPFS 8.7m, PR 20%, PSA50 36%; Phase 2/3 path, ASCO combo data upcoming .Advancing.
China generics dynamics—Generics entry impact in China differs vs U.S.; do not expect meaningful near-term deterioration; EU exclusivity to 2036 .New detail; supportive.

Management Commentary

  • “We are off to a strong start in 2024… and continued robust growth of our roxadustat business in China… we expect to report topline data from our two late-stage clinical trials of pamrevlumab in pancreatic cancer in the coming months.”
  • “Roxadustat… generates significant net revenue and positive cash flow… We’re expecting an approval decision from the China authorities in the second half of 2024 [for CIA]…”
  • “We finished the quarter with approximately $214.7 million in cash, cash equivalents, investments and accounts receivable… sufficient to fund our operating plans into 2026.”
  • On generics in China: “Despite the expiration of our composition of matter patents in June 2024, we do not expect meaningful deterioration of the roxadustat business in the near term.”

Q&A Highlights

  • LAPIS event-rate dynamics: Management explained the event-driven design and slower accrual of remaining OS events as the trial matures, supporting a 3Q 2024 topline (likely early 3Q) .
  • China roxadustat value share uplift to 47%: Drivers include NRDL price adjustments and class tailwinds from a new HIF entrant; strong installed prescriber base and positive patient experience sustain momentum .
  • FG‑3246 combo with enzalutamide (ASCO): Phase 1 dose escalation aims to validate biology (CD46 upregulation after ARSI exposure) and inform clinically meaningful endpoints for registration path; PSA50 is pharmacodynamic, rPFS is the more meaningful endpoint .
  • Dose optimization rationale (Project Optimus): Phase 2 portion will optimize the recommended Phase 3 dose and incorporate PET46 biomarker to correlate CD46 expression with response, per FDA guidance .
  • CIA/NRDL timing: Approval shifted to 2H 2024; to qualify for 2025 NRDL, approval by 6/30/24 is required—otherwise inclusion likely in 2026 .

Estimates Context

  • Wall Street consensus (S&P Global) for Q1 2024 EPS and revenue was not available at the time of analysis; as a result, we cannot determine beat/miss. Results featured a one‑time $25.7M drug product revenue related to the AstraZeneca termination, which is non-recurring and should be considered when updating forward models .
  • Modeling implications: Consider lower ongoing drug product revenue, reduced development revenue (expected below $0.5M per quarter through 2024), and lower R&D/SG&A run-rate post cost actions; China roxadustat trends remain a key growth vector .

Key Takeaways for Investors

  • China roxadustat is the profit-and-loss anchor: accelerating share and robust volume underpin 2024 outlook and cash runway; watch for CIA approval timing and NRDL inclusion path .
  • Q1 revenue quality mixed: headline growth masks a sizable one‑time item; core China net product revenue remains strong, but development revenue will step down .
  • Near‑term binary catalysts: two pamrevlumab readouts (mid‑2024, 3Q 2024) are likely the principal stock drivers; clarity on OS benefit will be pivotal for valuation .
  • Pipeline optionality: FG‑3246 data de‑risked early efficacy and supports a Phase 2/3 path with biomarker integration; ASCO combo data could incrementally de‑risk the story .
  • Operating discipline: materially lower R&D and SG&A with Q2 OpEx guidance at $70–$80M including COGS; runway into 2026 reduces financing overhang near term .
  • China generics risk moderated near term: management does not expect meaningful near-term deterioration; EU IP position supports a long runway internationally .
  • Set expectations: given non-recurring Q1 revenue and shifted timelines, consensus revisions may focus on forward revenue mix (China vs. ex‑China) and expense trajectory; trading will likely hinge on pamrevlumab outcomes and CIA approval timing .

Additional notes

  • 8‑K 2.02 and earnings call fully reviewed. No additional company press releases were located within Q1 2024; relevant Q2 2024 announcements (e.g., IND clearance, KOL events) are outside the Q1 window .
  • Prior quarter references and trend analysis sourced from Q3 2023 and Q4 2023 8‑K press releases .