Positive Outlook for FGEN's Upcoming Phase 2 Pamrevlumab Results in IPF


Company: FibroGen; NASDAQ: FGEN

Financials

Market Cap: $2.4B

Cash: ~$429M (as of 4/11/17)

Burn: $31M/Q (as of 1Q17)

Near-term Binary Events:

  • Phase 2 data of pamrevlumab (FG-3019) in patients with idiopathic pulmonary fibrosis due July 2017

A review of prior clinical data in IPF:

The most current clinical data of pamrevlumab in IPF is from ICLAF last year. According to the poster presented, the data are current as of August 2016. The data are from an additional cohort who chose to stay on pamrevlumab following the open label trial. These 37 patients were chosen as they had not progressed substantially during the 48-week trial and so results should be interpreted accordingly. None of the 37 patients had a decrease in % predicted Forced Vital Capacity (FVC) over the 48 week trial but after 3 years had a mean decrease of ~9.5%. 16 patients were still receiving treatment after 3 years. They stratified their patient population at baseline using the GAP index (uses age, gender, and 2 lung function tests to predict survival) and then compared with actual results. From that, it appears that there is a survival benefit.

Historically, patients with IPF experience a mean reduction of 3-4% in % predicted FVC over 48 weeks. According to the publication that resulted from their open label trial, patients on pamrevlumab experienced a reduction in % predicted FVC of 2.7% over 48 weeks. However, some 30% of patients had an increase in FVC and only 13% had a decrease greater than 10%. This latter value compares to ~30% of patients who had a decrease greater than 10% when on either of the two marketed products, nintedanib or pirfenidone. Furthermore, if you evaluate the annual rate of decline in FVC as a volume (in mLs of lung capacity), pamrevlumab appears to perform at least at parity with both nintedanib and pirfenidone (see comparison below). It is worth pointing out that although the pamrevlumab study was not placebo-controlled, the patients had an initial % predicted FVC that would suggest these patients had significant disease at baseline. Patients in the pirfenidone III trial had a comparable FVC at baseline and had an annual reduction in over 400mLs in the placebo arm.

Summary:

In summary, IPF is a very tough disease with few effective therapies. In our view, pamrevlumab has a >50% chance at being among the therapies used in this indication. What we like about this near-term readout is that it includes two parts: one part of the study compares pamrevlumab against placebo and the other evaluates pamrevlumab as a companion with either pirfenidone or nintedanib. Mechanistically, it makes sense that there may be synergy as companion products. While pirfenidone is already known to affect CTGF levels, the available data suggests it is unable to fully reduce CTGF expression.

Given the recent run in price it may be prudent to take some off the table prior to this binary event. However, as we noted in our first report on FGEN, we see the pamrevlumab opportunity as a significant value-driver as it is unlikely fully appreciated in its current price. Because pamrevlumab is being compared against placebo (and not pirfenidone or nintedanib), we think there is a good chance at superiority. However, investors will be watching closely the magnitude of the effect and will no doubt be comparing it to the effect seen with these other compounds. If there is an additive effect when these compounds are given together, you can expect the market to react favorably as this will be seen as the future standard of care.

For more information see: http://www.fibrogen.com/pamrevlumab/


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