Sign in

You're signed outSign in or to get full access.

FI

FIBROGEN INC (FGEN)·Q2 2024 Earnings Summary

Executive Summary

  • Q2 2024 delivered 14% year-over-year revenue growth to $50.6M, primarily on strong China roxadustat performance and an $18M deferred revenue release; net loss improved to $15.5M (from $87.7M YoY) and EPS to ($0.16) (from ($0.90)) .
  • China roxadustat net sales reached $92.3M (+21% YoY) on 33% volume growth; FibroGen raised FY24 China net product revenue guidance to $135–$150M (from $120–$135M) and China roxadustat net sales to $320–$350M (from $300–$340M) .
  • Pamrevlumab failed Phase 2/3 Precision Promise and Phase 3 LAPIS primary OS endpoints; management announced a ~75% U.S. workforce reduction and pivoted R&D focus to FG-3246/PET46 in mCRPC, with Phase 2 initiations and data milestones planned for 1H 2025 .
  • CFO guided Q3–Q4 total operating expenses to $45M–$55M per quarter (ex-restructuring), with cash, equivalents, and AR at $147.1M and runway projected into 2026; focus on repatriating China cash continues .

What Went Well and What Went Wrong

What Went Well

  • China roxadustat execution: total net sales $92.3M (+21% YoY) on 33% volume growth; FibroGen’s US GAAP net product revenue was $49.6M (+108% YoY) and value share ~46% maintained .
  • FY24 guidance raised on strong China momentum: net product revenue to $135–$150M and China roxadustat net sales to $320–$350M; CIA sNDA decision expected 2H 2024 (potential $10M milestone) .
  • Clear strategic refocus: prioritizing FG-3246 ADC and companion PET46 biomarker; CEO: “we continue to be very excited about the prospects of FG-3246 and PET46… roxadustat continues its strong momentum in China” .

What Went Wrong

  • Pamrevlumab trials missed primary endpoints: Precision Promise (common HR median 1.170; Pr(HR<1)=0.13977) and LAPIS (OS 17.3 vs 17.9 months; HR 1.08) failed; immediate wind-down announced .
  • Astellas territories weak: drug product revenue fell to $0.7M (vs $14.3M YoY); management expects lower future projected cash inflows from those territories .
  • Restructuring impact: U.S. workforce reduced ~75% and immuno-oncology programs halted internally; OpEx reduction comes with near-term organizational disruption .

Financial Results

MetricQ2 2023Q1 2024Q2 2024
Total Revenue ($USD Millions)$44.319 $55.902 $50.641
Net Loss ($USD Millions)$(87.680) $(32.933) $(15.544)
Net Loss per Share (Basic & Diluted, $USD)$(0.90) $(0.33) $(0.16)
Product Revenue, net ($USD Millions)$23.889 $30.538 $49.643
Drug Product Revenue, net ($USD Millions)$14.272 $24.486 $0.729
Development & Other Revenue ($USD Millions)$5.158 $0.878 $0.269
Cost of Goods Sold ($USD Millions)$5.708 $25.753 $5.178
Research & Development ($USD Millions)$95.478 $38.392 $34.106
Selling, General & Administrative ($USD Millions)$31.181 $22.820 $22.276
Loss from Operations ($USD Millions)$(88.048) $(31.063) $(10.919)

Segment/Geography KPIs

KPIQ2 2023Q1 2024Q2 2024
China Roxadustat Net Sales ($USD Millions)$76.4 $79.4 $92.3
FibroGen Net Product Revenue (China, US GAAP) ($USD Millions)$23.9 $30.5 $49.6
China Volume Growth YoY (%)—+39% +33%
China Value Share (%)—47% 46%

Drivers and context:

  • Q2 2024 revenue growth was driven by China roxadustat performance and an $18M deferred revenue release; drug product revenue declined on weaker Astellas territory performance .
  • Cost discipline reduced R&D and SG&A YoY; OpEx below prior guidance ranges as restructuring began .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net Product Revenue (China, US GAAP)FY 2024$120M–$135M $135M–$150M Raised
China Roxadustat Net SalesFY 2024$300M–$340M $320M–$350M Raised
Total Operating Expenses (incl. COGS)Q3 2024$70M–$80M (1H guidance) $45M–$55M (ex-restructuring) Lowered
Total Operating Expenses (incl. COGS)Q4 2024$70M–$80M (1H guidance) $45M–$55M (ex-restructuring) Lowered
CIA sNDA (China)Approval Timing2H 2024 2H 2024 (unchanged); $10M milestone if approved Maintained
Cash RunwayThroughInto 2026 Into 2026 Maintained

Earnings Call Themes & Trends

TopicQ4 2023 MentionsQ1 2024 MentionsQ2 2024 MentionsTrend
China roxadustat performanceValue share 42%; strong growth Value share 47%; +39% volume; $79.4M net sales $92.3M net sales; +33% volume; value share ~46% Stable strength; continued share leadership
Generics/VBP dynamics (China)Expect limited near-term erosion; VBP later Similar stance; patents expired June 2024 Two generics approved; no launch seen; ~7% price reduction already; VBP impact contingent Managed pricing; adoption lag for generics
PamrevlumabAnticipated readouts Q2/Q3 2024 Anticipated mid-2024/Q3 2024 Missed endpoints; program terminated Negative; strategic pivot
FG-3246 (ADC) + PET46Phase I efficacy; Phase II plan H2 2024 Phase I rPFS 8.7m; combo rPFS 10.2m; FDA interactions; dose optimization Focused R&D; Phase II monotherapy in Q1 2025; combo Phase II topline 1H 2025 Accelerating; biomarker strategy
Astellas territoriesLaunch accelerated in EU; exclusivity to 2036 EU penetration increasing; reimbursement broad Weaker-than-expected performance; lower future inflows Weakness; cautious outlook
Cash & OpExCost plan achieved (~$120M annualized) Cash $214.7M; OpEx 1H $70–$80M/qtr Cash/AR $147.1M; OpEx Q3–Q4 $45–$55M/qtr (ex-restructuring) Strengthened discipline

Management Commentary

  • CEO on strategic pivot: “we continue to be very excited about the prospects of FG-3246 and PET46… roxadustat continues its strong momentum in China, exceeding $92 million in net sales in the second quarter” .
  • CFO on revenue drivers: “drivers… were: 33% volume growth versus last year; and… deferred revenue release of $18 million… drug product revenue… continuously been weaker than expected” .
  • CEO on China guidance: “we are raising our guidance… net product revenue… $135M–$150M… roxadustat net sales in China of $320M–$350M” .
  • CEO on generics: “we have not seen the launch of the generic… no plans to change pricing… until we are subject to [VBP] vote” .
  • CMO on combo study bar: “bar… post 2 prior ARSIs… is around 6 months rPFS… we saw 10.2 months… in first-line… bar… 18–20 months” .

Q&A Highlights

  • Acceleration of FG-3246 development: management prosecuting with “quality and speed”; FDA interactions inform Phase II; Phase II monotherapy initiation targeted Q1 2025; combo topline in 1H 2025 .
  • China cash repatriation: FibroGen has repatriated cash via registered debt facilities and is exploring additional avenues to bring cash back to U.S. .
  • Guidance clarity: FY24 guidance raise driven solely by CKD anemia demand; CIA timing remains 2H 2024; NRDL inclusion for CIA likely 2026 unless approval by June 30, 2024 (still possible but uncertain) .
  • Generics/VBP: No generic launch observed; pricing unchanged pending VBP; prior ~7% price reduction noted in renewal .
  • Biomarker strategy: PET46 to enable correlation of CD46 expression with response; potential enrichment strategy for Phase III; primary focus on PET46-positive patients while keeping all-comers option if data strong .

Estimates Context

  • S&P Global consensus for Q2 2024 EPS and revenue was unavailable due to data access limits during retrieval. As a result, estimate comparisons could not be included and should be cross-checked prior to any trading decisions [SPGI retrieval error].

Key Takeaways for Investors

  • China roxadustat remains the engine: robust volume and share support FY24 guidance raises; watch CIA approval and potential 2025 NRDL inclusion for incremental upside .
  • Strategic reset reduces burn: OpEx guided to $45–$55M per quarter in 2H (ex-restructuring) and cash runway into 2026 provide funding clarity through FG-3246 milestones .
  • Pipeline narrative shifts to FG-3246/PET46: Phase II monotherapy starts Q1 2025; combo topline 1H 2025; biomarker-driven enrichment could de-risk pivotal design .
  • Astellas territories are a weak spot: expect limited contribution near term; monitor EU trajectory and any partner updates .
  • China generics risk moderated near term: adoption hurdles and VBP mechanics suggest limited impact until multiple generics trigger VBP; pricing headwind already absorbed .
  • Deferred revenue release boosted Q2: normalize for this $18M factor when modeling run-rate revenue; core China demand was the underlying driver .
  • Near-term catalysts: CIA decision (2H 2024), OpEx progression through restructuring, FG-3246 INDs and Phase II start, and China cash repatriation progress .

Additional Relevant Press Releases (Q2 context)

  • Pamrevlumab topline: Precision Promise and LAPIS did not meet OS primary endpoints; subsequent U.S. cost reductions and program wind-down announced .
  • Q2 earnings release: detailed financials, China KPIs, and guidance raises; reiterated runway into 2026 .