I have maintained an interest in FibroGen for several years. I have attended virtual meetings, written the CEO and, based on shares held by top management, I am among the major shareholders. I have the following comments on the current situation.
1. The company has never answered any of my questions, either at virtual meetings or by letter. In terms of energy spent on answering shareholder questions, I rate the company among the worst that I follow.
2. After deliberately changing its research design on roxadustat, without getting prior FDA approval, the company found itself in the position of having to admit, from a statistical point of view, it could not claim that roxadustat was as safe as currently used e-poetin drugs. The resulting complete response letter from the FDA apparently did not convince the company to add to or modify clinical trials. So I conclude that the company is NOT INTERESTED in getting the drug approved in the U.S. and is relying on profits generated in China, S. Korea, Japan, Chile, and the European Union, all of which previously have approved the drug. The fact that the company has laid off some 100 employees suggests it is not spending as much on clinical trials as would be necessary to get roxadustat approval in the U.S.
3. The company appears to be continuing clinical trials on pamrevlumab, though it seems that, like many clinical trials conducted by other companies, FibroGen's clinical trials have been delayed or have slowed down because of the pandemic. The company has not been forthcoming on the status of these clinical trials.
4. The recently announced $35 million to expand research in other areas appears to be more of a public relations ploy than an actual investment that might produce promising clinical results in the next several months.
In short, the change in its research design on roxadustat, together with the unwillingness of management to communicate with shareholders is a sign of weak management and fear of its own vulnerability, especially in view of several lawsuits already filed against the company. At best, there seems little chance of major profits for at least another year. The share price, compared with that of other small size, development stage biotech firms, still appears undervalued. Without any favorable news, the company could be vulnerable to a takeover, perhaps by one of its collaborating partners, like AstraZeneca. That would be a good thing, in my view, as I have lost confidence in the current management.
Art |
