IPOdesktop

About the Author IPOdesktop

During the IPO season Francis Gaskins, editor of IPOdesktop.com & director of research for Equities.com, regularly appears on CNBC TV, Bloomberg, thestreet.com & other financial cable channels. On the day of the Visa IPO he appeared on four cable TV financial shows including Bloomberg & CNBC. Over the past five years he has been quoted over 500 times by such financial media as the Wall Street Journal, Bloomberg, Reuters, Associated Press, USA Today among others. Those quotes are available at IPOdesktop.com. His varied personal interests include violin playing. For example, he is concertmaster of the Palisades Symphony. He also holds an MBA from Harvard Business School (finance) and an AB from Princeton University (economics).

IPO Preview: 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.

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.

Valuation
Glossary

Valuation Ratios

Mrkt Cap ($mm)

Price /Sls

Price /Erngs

Price /BkVlue

Price /TanBV

% offered in IPO

annualizing Sept 9 mos

         

FibroGen

$975

6.0

-81.2

4.0

4.1

13%

             

Conclusion
Positive

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

Almost breakeven

Price-to-book of 4

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

One product in Phase 3, one in Phase 2

To put the conclusions and observations in context, the following is reorganized, edited and summarized from the full S-1 referenced above.

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.

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.

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%

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 will be used to commercialize its unpartnered product candidates such as FG-3019, corneal implants and other HIF-PH inhibitors, as well as for general corporate purposes.

According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, blogger IPOdesktop has a total average return of 0.7% and a 33% success rate. IPOdesktop is ranked #4491 out of 7383 experts.

Stay Ahead of Everyone Else

Get The Latest Stock News Alerts