FibroGen Sinks 11% As FDA Delays Roxadustat Action Date

Shares of FibroGen, tanked 11% in Friday’s extended trading session after the biopharma company said that the US Food and Drug Administration (FDA), decided to extend the review period of the NDA (New Drug Application) for its Roxadustat used in the treatment of anemia in patients with chronic kidney disease (CKD).

Specifically, the Prescription Drug User Fee Act (PDUFA) action date was extended by the FDA to Mar. 20, 2021, after FibroGen (FGEN) submitted additional analysis of Roxadustat clinical data. Roxadustat is an orally administered, small molecule hypoxia-inducible factor (HIF) stabilizer for treating anemia in patients with CKD.

The finalization of the Prescription Drug User Fee Act (PDUFA) action date was previously set for Dec. 20, 2020. FibroGen is focused on the development of chronic and life-threatening treatments such as anemia, idiopathic pulmonary fibrosis, and pancreatic cancer.

“FibroGen is working closely with the FDA, in collaboration with our partner, AstraZeneca, to support the final review of the new drug application for Roxadustat,” said FibroGen’s CEO Enrique Conterno.

“There is significant unmet medical need for the treatment of anemia of CKD, and we are committed to bringing roxadustat to patients in the U.S. as soon as possible.” added Conterno.

The stock price has gained close to 3% year-to-date and is trading at a discount of 15% to its 52-week high. (See FGEN stock analysis on TipRanks)

Just a month back, Mizuho Securities analyst Difei Yang reiterated a Buy rating on FibroGen with a price target of $72. This target implies that investors could be reaping a 64% gain over the coming 12 months.

Yang’s rating was backed by the approval of Roxadustat in Japan for the treatment of non-dialysis-dependent (NDD) CKD, with the key catalyst being the FDA action date for Roxadustat.

“The shares appear to have 50-60% probability of FDA approval priced in, and we believe Roxa is highly likely to get the FDA approval, ~90% PoS.” added Yang.

From the rest of the Street, the stock scores a cautiously optimistic consensus of a Moderate Buy based on 2 Buys, 1 Hold, and 1 Sell. The average price target of $71 implies an upside potential of 61.5% to current levels.