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Investing.com -- Shares of FibroGen, Inc. (NASDAQ: NASDAQ:FGEN) surged 64% following the announcement of the sale of its China subsidiary to AstraZeneca (NASDAQ: NASDAQ:AZN) for an estimated $160 million. The transaction, which is expected to close by mid-2025, pending regulatory approval, will bolster FibroGen's financial position and extend its cash runway into 2027.
The deal involves an enterprise value of $85 million plus approximately $75 million in net cash held by FibroGen in China at the time of closing, totaling around $160 million. This strategic move will allow FibroGen to repay its term loan facility to investment funds managed by Morgan Stanley (NYSE:MS) Tactical Value, streamlining the company's capital structure.
FibroGen's CEO, Thane Wettig, highlighted the significance of the sale, noting it will enable the company to progress with its clinical development programs, particularly for FG-3246, a first-in-class antibody drug conjugate, and FG-3180, a companion PET imaging agent, in metastatic castration-resistant prostate cancer (mCRPC). Wettig expressed gratitude towards the China team for their dedication to patient care and the successful commercialization of roxadustat in China.
Post-sale, AstraZeneca will acquire all rights to roxadustat in China, where the drug leads in brand value share for treating anemia in chronic kidney disease and awaits a regulatory decision for chemotherapy-induced anemia. FibroGen retains rights to roxadustat in the U.S. and other markets not licensed to Astellas. The company is also planning an FDA meeting in the second quarter of 2025 to discuss the development of roxadustat for lower-risk myelodysplastic syndrome (LR-MDS), addressing a significant medical need.
Furthermore, FibroGen is preparing to initiate a Phase 2 monotherapy trial of FG-3246 in patients with mCRPC in the second quarter of 2025. BofA Securities, Inc. is serving as the exclusive financial advisor, and Ropes & Gray LLP is the legal advisor for FibroGen on this transaction.
This strategic divestiture provides FibroGen with a more focused approach to its pipeline and operations, potentially benefiting shareholders and patients alike as the company concentrates on its core development programs.
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