FGEN - Bull Thesis
(Last updated 3/18/22)
BULL THESIS SUMMARY
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
FS/MV 3/18/22
(See below for full updated bull/bear analysis)
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
(Historical analysis from 2/20/22)
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
$13.4M in China roxadustat net product revenue for Q3 2021 and $42.2M year-to-date
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
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
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
Pamrevlumab
Progressed to mid-late stage trials in three indications with significant unmet medical and patient needs
IPF - currently in Phase 3 trial, expect data in mid 2023
Current treatments only have a modest effect on slowing disease progression and require side effect management
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, expect data in H2 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, 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 1/14/22
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