FGEN - Bull Thesis

(Updated on 3/24/22 based on quarterly report)

BULL THESIS

• FGEN overall corporate and executive summary

  • FGEN has lots of cash and revenue and is enticing at an enterprise value of ~$1.3B with 2 major approved/late stage clinical assets

    • Revenue ranges from ~$25M-$150M per quarter

    • Over 2 years of cash on hand by end of 2021

      • $580-$610M cash / burns ~$50M/quarter

      • Q4 ‘21 reorg will reduce expenses by ~$100M/y

  • Two major late stage or approved therapeutic assets

    • Roxadustat (Roxa) and Pamrev

  • Although Roxa may not be the game-changer that was once thought, it is still a potential blockbuster

    • Approved in EU, CN, and JP

    • Roxa has strong commercial partners (AZN & Astellas) with favorable financial terms for FGEN:

    • Roxa milestones and royalties continue to bring in large revenue

      • Received $120M in Q3 2021 for EU approval (from Astellas)

      • Over $1B in milestones remain

    • Roxa has seen broad adoption in China

    • Roxa safety issues are likely addressable with slower dosing ramp

  • Pamrev is a wholly-owned asset with impressive phase 3 results

    • Pamrev is in development for 3 big indications

    • Pamrev showed very strong efficacy data in IPF Phase 2

  • Partnered with HiFiBiO Therapeutics that enables up to three INDs in 2023

• Roxadustat (EVRENZO) (HIF-PH inhibitor)

  • Innovative oral approach to addressing anemia

  • Partnered with Astellas and AstraZeneca

    • $100s millions in milestones and development expenses already paid by partners, AZN and Astellas

    • Ongoing milestones and royalties

  • Large market opportunity to address an under-served patients population (CIA and MDS anemia)

  • Anemia in CKD

    • Novel, first-in-class treatment for CKD anemia

    • Approved in Europe, China, and Japan

      • Continued growth in sales of Roxadustat in China since approval in Q1 2020

        • $32.0M in China roxadustat net product revenue for Q4 2021 and $186.1M full year sales

        • Roxadustat captured 74% of category growth from Jan-Aug 2021 over same period in 2020

        • Largest CKD anemia brand by value in China

        • Revenue from both NDD and DD markets

        • Number one branded treatment for anemia of CKD in China for last 12 months

      • European Commission approved roxadustat under the name EVRENZO in August 2021

        • Astellas launched it in Germany, the UK, Netherlands, and Austria

        • Received $120M in third quarter 2021 in approval milestones

    • Efficacy demonstrated in Phase 3 studies - met primary efficacy endpoint in individual studies and pooled analyses

  • CIA

    • Phase 2 positive topline results reported August 2021

    • Discussing with AstraZeneca and Astellas for future Phase 3 study

  • MDS Anemia

    • Phase 3 positive safety and efficacy data reported at ASH 2020

      • Subgroups met primary endpoint at week 28 and maintained TI (transfusion independence) response to week 52

      • Expect data in H2 2022 or H1 2023
        

• Pamrevlumab

  • Progressed to mid-late stage trials in three indications with significant unmet medical and patient needs

    • IPF - currently in Phase 3 trial (ZEPHYRUS-1), expect data in mid 2023

      • Current treatments only have a modest effect on slowing disease progression and require side effect management

        • Current IPF medicines generated >$3B nte revenue in 2020

      • Efficacy analysis from Ph2 trial showed first reported statistically significant results for attenuation of fibrosis

        • Statistically significant difference in disease progression (10% in pamrevlumab vs 31.4% in placebo group)

        • Company claims this is the best effect size for any asset in IPF (approved or in development)

    • Pancreatic cancer - currently in Phase 3 trial (LAPIS), expect data in H2 2022 (and interim analysis in Q2 2022)

      • Phase 1/2 trial improved OS with higher pamrevlumab exposure (median OS of 9.4 months with pam >150 ug/mL and median OS of 4.8 months with pam<150ug/ml)

      • 70.8% of patients who received pamrevlumab + chemo had a tumor that became eligible for resection vs 15.4% of patients who received chemo alone

    • Duchenne Muscular dystrophy - currently in Phase 3 trial (LELANTOS-1), expect data in H1 2023

      • Saw an increase in estimated mean change from baseline and left ventricular ejection fractions (0.29%) compared to an expected decline in LVF

      • Correlation between improvement in LVF and reduction in cardiac fibrosis from pamrevlumab

FS/MV 3/18/22

See our updated bull, bear, Amp View forum post HERE after becoming a subscriber. Learn more here.