IPO Report: FibroGen (FGEN)

Francis Gaskins |

FibroGen (FGEN) is a research-based, biopharmaceutical company focused on the discovery, development and commercialization of novel therapeutic agents to treat serious unmet medical needs. It is based in San Francisco, CA.

Nine other companies are scheduled to IPO for the week of Nov. 10, 2014. The full IPO calendar is available at IPOpremium.

SEC Documents

Manager, Joint-managers: Goldman Sachs, Citigroup, Leerink Partners
Co-managers: RBC Capital Markets, Stifel, William Blair

End of lockup (180 days): Wednesday, May 13, 2015
End of 25-day quiet period: Tuesday, December 9, 2014

FGEN scheduled a $124 million IPO on Nasdaq with a market capitalization of $975 million at a price range midpoint of $17.50 for Friday, Nov. 14, 2014 on Nasdaq.

FibroGen IPO Summary

FGEN is a research-based, biopharmaceutical company focused on the discovery, development and commercialization of novel therapeutic agents to treat serious unmet medical needs.

FGEN intends to leverage its extensive experience in fibrosis and HIF biology to build a successful biopharmaceutical company with a strong pipeline of products and product candidates for the treatment of anemia, fibrosis, cancer, corneal blindness and other serious unmet medical needs.

FibroGen Valuation

Glossary


Valuation Ratios

Mrkt Cap (mm)

Price /Sls

Price /Erngs

Price /BkVlue

Price /TanBV

% offered in IPO

annualizing Sept 9 mos

         

FibroGen (FGEN)

$975

6.0

-81.2

4.0

4.1

13%

             

FGEN IPO Conclusion

Neutral plus

Rev +35%. 87% of rev from licenses/milestone payments

Almost breakeven

Price-to-book of 4

AstraZeneca, collaboration prtnr, to buy $20mm private placement on closing

One product in Phase 3, one in Phase 2

Business

FGEN is a research-based, biopharmaceutical company focused on the discovery, development and commercialization of novel therapeutic agents to treat serious unmet medical needs.

FGEN intends to leverage its extensive experience in fibrosis and HIF biology to build a successful biopharmaceutical company with a strong pipeline of products and product candidates for the treatment of anemia, fibrosis, cancer, corneal blindness and other serious unmet medical needs.

FGEN has capitalized on its extensive experience in fibrosis and hypoxia inducible factor, or HIF, biology to generate multiple programs targeting various therapeutic areas.

Collaboration Partnerships for Roxadustat

FGEN is currently developing and commercializing roxadustat for anemia globally in collaboration with  partners.

FGEN has two agreements under which it provides Astellas the right to develop and commercialize roxadustat and other compounds for anemia in Japan, Europe, the Commonwealth of Independent States, or CIS, the Middle East and South Africa.

FGEN also has two agreements under which FGEN provides AstraZeneca the right to develop and commercialize roxadustat for anemia, one for China, and one for the United States and all other countries not previously licensed to Astellas, or the U.S. / RoW. Payments under these agreements include over $500 million in upfront, non-contingent and other payments received or expected to be received prior to the first United States approval, excluding development cost reimbursement.

Phase 3

FGEN’s most advanced product candidate, roxadustat, or FG-4592, is an oral small molecule inhibitor of HIF prolyl hydroxylases, or HIF-PHs, in Phase 3 clinical development for the treatment of anemia in chronic kidney disease, or CKD.

Phase 2

FGEN’s second product candidate, FG-3019, is a monoclonal antibody in Phase 2 clinical development for the treatment of idiopathic pulmonary fibrosis, or IPF, pancreatic cancer and liver fibrosis.

FGEN has taken a global approach to the development and future commercialization of its product candidates, and this includes development and commercialization in the People’s Republic of China, or China.

Strategies

FGEN’s near-term and long-term strategies include:

Develop and, if approved, commercialize roxadustat with the assistance of its collaboration partners in the United States, Europe, China and Japan and the rest of the world, including enrolling and completing its global Phase 3 program in CKD anemia and seeking regulatory approval for roxadustat in multiple geographies, including as a Domestic Class 1.1 therapeutic in China.

Enroll and complete its Phase 2 clinical studies of FG-3019 in IPF and pancreatic cancer, and initiate, enroll, and complete subsequent Phase 3 pivotal studies of FG-3019 in IPF and pancreatic cancer in the United States and potentially outside of the United States.

Continue to pursue an extensive and multi-layered patent portfolio to protect its technologies and product candidates.

Explore potential partnering opportunities for the development and commercialization of FG-3019 in certain territories.

Develop FG-5200 for treatment of corneal blindness resulting from partial thickness corneal damage in China and elsewhere in the world.

Strategically invest in the research and development of additional anemia indications for roxadustat, which may include chemotherapy-induced anemia, anemia relating to inflammatory diseases, myelodysplastic syndrome, or MDS, and surgical procedures requiring transfusions.

Use its extensive HIF platform to increase its pipeline by exploring proof-of-concept with its HIF-PH selective inhibitors, such as FG-8205, and its other HIF-PH inhibitors, including FG-6874 (which has completed single and multiple ascending dose Phase 1 clinical studies in Singapore), in indications such as hematopoietic stem cell mobilization, peri-operative anemia, heart failure post-myocardial infarction, inflammatory bowel disease, diabetes, cancer and wound healing.

Expand its efforts in fibrosis by pursuing additional indications for FG-3019, which may include Duchenne muscular dystrophy, scleroderma lung disease, liver fibrosis associated with graft rejection, non-alcoholic steatohepatitis, or NASH, diabetic nephropathy, focal segmental glomerular sclerosis, congestive heart failure, pulmonary arterial hypertension and cancers such as melanoma, ovarian, breast, and squamous cell lung carcinoma.

FGEN's Intellectual property

FGEN’s patent estate, on a worldwide basis, encompasses over 200 granted patents and 150 pending patent applications, including over 90 granted patents and 100 pending patent applications relating to roxadustat (FG-4592) and FG-3019. FGEN’s currently granted patents with respect to composition-of-matter for roxadustat and FG-3019 are expected to expire in 2024 or 2025.

FGEN Competition

If roxadustat is approved for the treatment of anemia in patients with CKD, competing drugs are expected to include ESAs such as epoetin alfa (EPOGEN® marketed by Amgen Inc. in the United States, Procrit® marketed by Johnson & Johnson, Inc. in the United States, and Eprex® also marketed by Johnson & Johnson in other markets and Espo® marketed by Kyowa Hakko Kirin, or KHK, in Japan and China), darbepoetin (Aranesp® marketed by Amgen in the United States and Europe, and by KHK in Hong Kong; NESP® marketed by KHK in Japan, Korea, Singapore, Taiwan, Thailand), as well as Mircera® (marketed by Hoffmann-La Roche, or Roche, in Europe and approved in the United States) and NeoRecormon®/Epogin® (marketed by Roche in China and Japan). ESAs have been the standard of care in the treatment of anemia in CKD for over 20 years, serving a significant majority of dialysis patients as well as those non-dialysis patients receiving anemia therapy under nephrology care. Physicians and patients may be reluctant to switch to roxadustat from products with which they have become familiar.

5% Shareholders Pre-IPO

Thomas B. Neff             12.6%

Astellas Pharma Inc. 2-5-1 Nihonbashi-Honcho, Chuo-Ku, Tokyo 103-8411 Japan 10.5%

FGEN Dividends

No dividends are planned.

Use of Proceeds

FGEN expects to receive $112 million from its IPO and use it for the following:

a portion of the net proceeds from this offering and the concurrent private placement to commercialize its unpartnered product candidates such as FG-3019, corneal implants and other HIF-PH inhibitors, as well as for general corporate purposes.

 

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
FGEN FibroGen Inc 23.10 0.55 2.44 79,659

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