What changed in this filing

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Item 1. Financial Statements

2024-08-06 compared with 2024-05-06 · 214 added, 178 removed, 524 unchanged (43% of the section changed)

2 unchanged sentences

(In thousands, except per share amounts)

March 31, 2024

June 30, 2024

December 31, 2023

11 unchanged sentences

Current liabilities:

Accounts payable

Accounts payable ($ 1,586 and $ 0 to a related party)

Accrued and other current liabilities ($ 10,993 and $ 39,814 to a related party)

15 unchanged sentences

no shares issued

and outstanding at March 31, 2024 and December 31, 2023

and outstanding at June 30, 2024 and December 31, 2023

Common stock, $ 0.01 par value;

225,000 shares authorized at March 31, 2024

225,000 shares authorized at June 30, 2024

and December 31, 2023;

100,400 and 98,770 shares issued and outstanding at

March 31, 2024 and December 31, 2023

June 30, 2024 and December 31, 2023

Additional paid-in capital

9 unchanged sentences

(In thousands, except per share amounts)

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

License revenue

Development and other revenue (includes $ 294 and $ 1,624

from a related party)

Development and other revenue (includes $ 319 , $ 1,839 , $ 613

and $ 3,463 from a related party)

Product revenue, net (includes $ 46,005 , $ 20,512 , $ 73,118 and $ 41,884

14 unchanged sentences

Loss before income taxes

Provision for income taxes

Benefit from income taxes

Investment income in unconsolidated variable

7 unchanged sentences

(In thousands)

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Other comprehensive income (loss):

14 unchanged sentences

Income (Loss)

March 31, 2024

Change in unrealized gain

or loss on investments

Foreign currency

translation adjustments

Shares issued from stock

plans, net of payroll

Stock-based compensation

June 30, 2024

Balance at March 31,

Consolidation of Fortis

Change in unrealized gain

or loss on investments

Foreign currency

translation adjustments

Issuance of common stock

under ATM Program

Shares issued from stock

Stock-based compensation

Balance at June 30,

FIBROGEN, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT

(In thousands, except share data)

For The Six Month Period

Comprehensive

Nonredeemable

Non-Controlling

December 31, 2023

Change in unrealized

gain or loss on

Change in unrealized gain

or loss on investments

Foreign currency

translation adjustments

Shares issued from stock

plans, net of payroll

March 31, 2024

Stock-based compensation

June 30, 2024

December 31, 2022

Change in unrealized

gain or loss on

Consolidation of Fortis

Change in unrealized gain

or loss on investments

Foreign currency

Issuance of common

stock under ATM

translation adjustments

Issuance of common stock

under ATM Program

Shares issued from stock

plans, net of payroll

Balance at March 31,

Stock-based compensation

Balance at June 30,

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements

2 unchanged sentences

(In thousands)

Three Months Ended March 31,

Six Months Ended June 30,

Operating activities

5 unchanged sentences

Stock-based compensation

Acquired in-process research and development expenses

Non-cash interest expense related to sale of future revenues

16 unchanged sentences

Purchases of property and equipment

Proceeds from sale of property and equipment

Purchases of available-for-sale securities

Cash acquired from consolidation of Fortis

Proceeds from sales of available-for-sale securities

2 unchanged sentences

Financing activities

Proceeds from senior secured term loan facilities, net of issuance costs

Cash paid for transaction costs for senior secured term loan facilities

Repayments of finance lease liabilities

16 unchanged sentences

FibroGen is developing and commercializing a diversified pipeline of novel therapeutics that work at the frontier of cancer biology and anemia.

Pamrevlumab, a human monoclonal antibody targeting connective tissue growth factor, is in Phase 3 clinical development for the treatment of locally advanced unresectable pancreatic cancer.

Pamrevlumab is also in Phase 2/3 development for the treatment of metastatic pancreatic cancer.

To date, the Company has retained exclusive worldwide rights for pamrevlumab.

Roxadustat is an oral small molecule inhibitor of HIF prolyl hydroxylase activity.

Roxadustat (爱瑞卓 ® , EVRENZO TM ) is approved in China, Europe, Japan, and numerous other countries for the treatment of anemia in chronic kidney disease (“CKD”) for patients who are on dialysis and not on dialysis.

Roxadustat is an oral small molecule inhibitor of hypoxia-inducible factor prolyl hydroxylase activity.

Roxadustat (爱瑞卓 ® , EVRENZO TM ) is approved in China, Europe, Japan, and numerous other countries for the treatment of anemia in chronic kidney disease for patients who are on dialysis and not on dialysis.

Roxadustat is in clinical development for chemotherapy-induced anemia in China.

FibroGen is also developing earlier stage clinical and preclinical product candidates, FG-3246, FG-3165 and FG-3175, to address unmet patient needs in oncology.

FG-3246 is a first-in-class antibody-drug conjugate targeting a novel epitope on CD46 that is in development for metastatic castration-resistant prostate cancer and other cancer indications.

FibroGen also has a pipeline of preclinical product candidates, FG-3165 and FG-3175, to address unmet patient needs in oncology.

Basis of Presentation and Principles of Consolidation

4 unchanged sentences

The unaudited condensed consolidated financial statements and related disclosures have been prepared in accordance with accounting principles generally accepted in the United States (“U.S.

GAAP”) applicable to interim financial reporting and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X of the U.S.

Securities and Exchange Commission (“SEC”) and, therefore, do not include all information and footnote disclosures normally included in the annual consolidated financial statements.

GAAP”) applicable to interim financial reporting and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X of the United States (“U.S.”) Securities and Exchange Commission (“SEC”) and, therefore, do not include all information and footnote disclosures normally included in the annual consolidated financial statements.

The financial information included herein should be read in conjunction with the consolidated financial statements and related notes in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, filed on February 26, 2024.

Based on its current operating plan, which contemplates the maintenance of a minimum balance of $ 30 million of unrestricted cash and cash equivalents held in accounts in the U.S., as required under the debt covenants associated with the senior secured term loan facilities, the Company believes that its existing cash and cash equivalents, short-term investments and accounts receivable will be sufficient to meet its anticipated cash requirements for at least the next 12 months from the date of issuance of the financial statements.

However, the Company may need additional capital to fund its operations and its liquidity assumptions may materially differ.

For example, the Company may utilize its available financial resources sooner than it currently expects and may incur additional expenses.

Based on its current operating plan, which contemplates the maintenance of a minimum balance of $ 30 million of unrestricted cash and cash equivalents held in accounts in the U.S., as required under the debt covenants associated with the senior secured term loan facilities, the Company believes that its existing cash and cash equivalents and accounts receivable will be sufficient to meet its anticipated cash requirements for at least the next 12 months from the date of issuance of the financial statements.

However, the Company may need additional capital to fund its operations and its liquidity assumptions may materially differ (including assumptions with respect to our research and development expenses, revenue expectations, contractual obligations, ability to repatriate cash from China, partnering or monetization of assets, and others).

In addition, the Company may elect to raise additional funds at any time through equity, equity-linked, debt financing arrangements or from other sources.

10 unchanged sentences

Potential common shares that would have the effect of increasing diluted earnings per share are considered to be anti-dilutive and as such, these shares are not included in the calculation of diluted earnings per share.

The Company reported a net loss for each of the three months ended March 31, 2024 and 2023.

The Company reported a net loss for each of the three and six months ended June 30, 2024 and 2023.

Therefore, dilutive common shares are not assumed to have been issued since their effect is anti-dilutive for these periods.

Diluted weighted average shares excluded the following potential common shares related to s tock options, service-based restricted stock units (“RSUs”), performance-based RSUs (“PRSUs”), total shareholder return (“TSR”) awards and shares to be purchased under the 2014 Employee Stock Purchase Plan (“ESPP”) for the periods presented as they were anti-dilutive (in thousands):

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Employee stock options

21 unchanged sentences

The Astellas Japan Agreement also provides for tiered payments based on net sales of product (as defined) in the low 20% range of the list price published by Japan’s Ministry of Health, Labour and Welfare, adjusted for certain elements, after commercial launch.

The aggregate amount of consideration received through March 31, 2024 totaled $ 105.1 million , excluding drug product revenue that is discussed under the Drug Product Revenue, Net section below.

The aggregate amount of consideration received through June 30, 2024 totaled $ 105.1 million , excluding drug product revenue that is discussed under the Drug Product Revenue, Net section below.

Based on its current development plans for roxadustat in Japan, the Company does not expect to receive most or all of the additional potential milestones under the Astellas Japan Agreement.

Amounts recognized as license revenue and development revenue under the Astellas Japan Agreement were not material for the three months ended March 31, 2024 and 2023.

The transaction price related to consideration received through March 31, 2024 and accounts receivable has been allocated to each of the following performance obligations under the Astellas Japan Agreement (in thousands):

Amounts recognized as license revenue and development revenue under the Astellas Japan Agreement were not material for the three and six months ended June 30, 2024 and 2023.

The transaction price related to consideration received through June 30, 2024 and accounts receivable has been allocated to each of the following performance obligations under the Astellas Japan Agreement (in thousands):

Astellas Japan Agreement

Total Consideration

March 31, 2024

June 30, 2024

Development revenue

Total license and development revenue

There was no license revenue or development revenue resulting from changes to estimated variable consideration in the current period relating to performance obligations satisfied or partially satisfied in previous periods for the three months ended March 31, 2024 under the Astellas Japan Agreement.

The Company does no t expect material variable consideration from estimated future co-development billing beyond the development period in the transaction price related to the Astellas Japan Agreement.

6 unchanged sentences

The Astellas Europe Agreement also provides for tiered payments based on net sales of product (as defined) in the low 20% range .

The aggregate amount of consideration received under the Astellas Europe Agreement through March 31, 2024 totaled $ 685.0 million , excluding drug product revenue that is discussed under the Drug Product Revenue, Net section below.

The aggregate amount of consideration received under the Astellas Europe Agreement through June 30, 2024 totaled $ 685.0 million , excluding drug product revenue that is discussed under the Drug Product Revenue, Net section below.

Based on its current development plans for roxadustat in Europe, the Company does not expect to receive most or all of the additional potential milestones under the Astellas Europe Agreement.

Amounts recognized as license revenue and development revenue under the Astellas Europe Agreement were as follows for the three months ended March 31, 2024 and 2023 (in thousands):

Three Months Ended March 31,

Amounts recognized as license revenue and development revenue under the Astellas Europe Agreement were as follows for the three and six months ended June 30, 2024 and 2023 (in thousands):

Three Months Ended June 30,

Six Months Ended June 30,

Performance Obligation

1 unchanged sentence

Development revenue

Astellas Europe Agreement

Total Consideration

March 31, 2024

June 30, 2024

Development revenue

Total license and development revenue

There was no license revenue or development revenue resulting from changes to estimated variable consideration in the current period relating to performance obligations satisfied or partially satisfied in previous periods for three months ended March 31, 2024 under the Astellas Europe Agreement.

There was no license revenue or development revenue resulting from changes to estimated variable consideration in the current period relating to performance obligations satisfied or partially satisfied in previous periods for three months ended June 30, 2024 under the Astellas Europe Agreement.

The Company does not expect material variable consideration from estimated future co-development billing beyond the development period in the transaction price related to the Astellas Japan Agreement.

5 unchanged sentences

and all other countries in the world, other than China, not previously licensed under the Astellas Europe and Astellas Japan Agreements (“AstraZeneca U.S./RoW Agreement”).

On February 23, 2024, the Company and AstraZeneca entered into an agreement to terminate the AstraZeneca U.S./RoW Agreement, effective as of February 25, 2024.

Pursuant to the termination and transition agreement, AstraZeneca returns all of their non-China roxadustat rights to the Company, with the exception of South Korea, and provides certain assistance during a transition period.

In addition, as a part of this termination and transition agreement, AstraZeneca will receive tiered mid-single digit royalties on FibroGen’s sales of roxadustat in the terminated territories, or thirty-five percent of all revenue FibroGen receives if it licenses or sells such rights to a third-party.

On February 23, 2024, the Company and AstraZeneca entered into an agreement to terminate the AstraZeneca U.S./RoW Agreement, effective as of February 25, 2024 (“AstraZeneca Termination and Transition Agreement).

Pursuant to the AstraZeneca Termination and Transition Agreement, AstraZeneca returns all of their non-China roxadustat rights to the Company, with the exception of South Korea, and provides certain assistance during a transition period.

In addition, as a part of this AstraZeneca Termination and Transition Agreement, AstraZeneca will receive tiered mid-single digit royalties on FibroGen’s sales of roxadustat in the terminated territories, or thirty-five percent of all revenue FibroGen receives if it licenses or sells such rights to a third-party.

Neither party incurred any early termination penalties.

The aggregate amount of consideration for milestone and upfront payments received under the AstraZeneca U.S./RoW Agreement through the termination totaled $ 439.0 million , excluding drug product revenue under the Master Supply Agreement with AstraZeneca under the AstraZeneca U.S./RoW Agreement (“AstraZeneca Master Supply Agreement”), entered in 2020, which is described under the Drug Product Revenue, Net section below.

In addition, resulting from the above-mentioned termination and transition agreement, the Company and AstraZeneca settled the outstanding balances relating to past transactions under the AstraZeneca Master Supply Agreement.

In addition, resulting from the AstraZeneca Termination and Transition Agreement, the Company and AstraZeneca settled the outstanding balances relating to past transactions under the AstraZeneca Master Supply Agreement.

Accordingly, during the three months ended March 31, 2024, the Company accounted for the termination of the AstraZeneca U.S./RoW agreement as a contract modification under the Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers (“ASC 606”) and recorded a cumulative catch-up adjustment as described under the Drug Product Revenue, Net section below.

4 unchanged sentences

The AstraZeneca China Agreement is structured as a 50/50 profit or loss share (as defined), which was amended under the AstraZeneca China Amendment in 2020 as discussed below, and provides for joint development costs (including capital and equipment costs for construction of the manufacturing plant in China), to be shared equally during the development period.

The aggregate amount of such consideration received for milestone and upfront payments through March 31, 2024 totaled $ 77.2 million .

The aggregate amount of such consideration received for milestone and upfront payments through June 30, 2024 totaled $ 77.2 million .

On September 18, 2023, the Company received the formal notice, from Beijing Medical Products Administration, of renewal of its right to continue to market roxadustat in China through 2028.

The Company evaluated the regulatory milestone payment associated with this renewal under the AstraZeneca China Agreement and concluded that this milestone was achieved in the third quarter of 2023.

Accordingly, the consideration of $ 4.0 million associated with this milestone was included in the transaction price and allocated to performance obligations under the AstraZeneca U.S./RoW Agreement and the AstraZeneca China Agreement, $ 3.5 million of which was recognized as revenue during the third quarter of 2023 from performance obligations satisfied or partially satisfied.

A s of March 31, 2024, t he $ 4.0 million milestone was recorded as a contract asset and was fully netted against the contract liabilities (deferred revenue) related to the AstraZeneca China Agreement.

Accordingly, the consideration of $ 4.0 million associated with this milestone was included in the transaction price in the third quarter of 2023 and allocated to performance obligations under the AstraZeneca U.S./RoW Agreement and the AstraZeneca China Agreement.

A s of June 30, 2024, t he $ 4.0 million milestone was recorded as a contract asset and was fully netted against the contract liabilities (deferred revenue) related to the AstraZeneca China Agreement.

AstraZeneca China Amendment

In July 2020, FibroGen China Anemia Holdings, Ltd., FibroGen (China) Medical Technology Development Co., Ltd.

(“FibroGen Beijing”), and FibroGen International (Hong Kong) Limited and AstraZeneca entered into an amendment to the AstraZeneca China Agreement, relating to the development and commercialization of roxadustat in China (the “AstraZeneca China Amendment”).

(“FibroGen Beijing”), FibroGen International (Hong Kong) Limited, and AstraZeneca entered into an amendment to the AstraZeneca China Agreement, relating to the development and commercialization of roxadustat in China (the “AstraZeneca China Amendment”).

Under the AstraZeneca China Amendment, in 2020, FibroGen Beijing and AstraZeneca completed the establishment of a jointly owned entity, Beijing Falikang Pharmaceutical Co., Ltd.

5 unchanged sentences

As a result of the termination of the AstraZeneca U.S./RoW Agreement, during the three months ended March 31, 2024, the Company recorded the final development revenue under the AstraZeneca U.S./RoW Agreement and AstraZeneca China Agreement.

Amounts recognized as license revenue and development revenue under the AstraZeneca U.S./RoW Agreement and AstraZeneca China Agreement were as follows for the three months ended March 31, 2024 and 2023 (in thousands):

Three Months Ended March 31,

Amounts recognized as license revenue and development revenue under the AstraZeneca U.S./RoW Agreement and AstraZeneca China Agreement were as follows for the three and six months ended June 30, 2024 and 2023 (in thousands):

Three Months Ended June 30,

Six Months Ended June 30,

Performance Obligation

1 unchanged sentence

Development revenue

The transaction price relat ed to consideration received and accounts receivable through the termination of the AstraZeneca U.S./RoW Agreement has been allocated to each of the performance obligations under the AstraZeneca U.S./RoW Agreement and AstraZeneca China Agreement, including $ 344.5 million for license, $ 625.6 million for co-development, information sharing and committee services, and $ 399.5 million for China performance obligation (with cumulative revenue of $ 222.9 million through March 31, 2024) that is recognized as product revenue, as described under Product Revenue, Net section below.

The transaction price relat ed to consideration received and accounts receivable through the termination of the AstraZeneca U.S./RoW Agreement has been allocated to each of the performance obligations under the AstraZeneca U.S./RoW Agreement and AstraZeneca China Agreement, including $ 344.5 million for license, $ 625.5 million for co-development, information sharing and committee services, and $ 427.5 million for China performance obligation (with cumulative revenue of $ 268.9 million through June 30, 2024) that is recognized as product revenue, as described under Product Revenue, Net section below.

Product Revenue, Net

Product revenue, net from the sales of roxadustat commercial product in China was as follows for the three months ended March 31, 2024 and 2023 (in thousands):

Three Months Ended March 31,

Product revenue, net from the sales of roxadustat commercial product in China was as follows for the three and six months ended June 30, 2024 and 2023 (in thousands):

Three Months Ended June 30,

Six Months Ended June 30,

Direct Sales:

6 unchanged sentences

Net transaction price

Decrease in deferred revenue

Decrease (increase) in deferred revenue

Sales to Falikang revenue, net

4 unchanged sentences

The Company’s legal right to offset is determined at the individual distributor level.

The contract liabilities were included in accrued and other current liabilities in the condensed consolidated balance sheet and the rebates and discounts reflected as reductions to gross accounts receivable for direct sales were immaterial as of March 31, 2024 and December 31, 2023, respectively.

Sales to Falikang – China Performance Obligation

1 unchanged sentence

FibroGen Beijing manufactures and supplies commercial product to Falikang.

The net transfer price for FibroGen Beijing’s product sales to Falikang is based on a gross transfer price, which is adjusted to account for the 50/50 profit share for the period.

The net transfer price for FibroGen Beijing’s product sales to Falikang is based on a gross transaction price, which is adjusted to account for the 50/50 profit share for the period.

The roxadustat sales to Falikang marked the beginning of the Company’s China performance obligation under the Company’s agreements with AstraZeneca .

2 unchanged sentences

Any net transaction price in excess of the revenue recognized is added to the deferred balance to date and will be recognized in future periods as the performance obligation is satisfied.

Periodically, the Company updates its assumptions such as total sales quantity, performance period, gross transaction price and profit share and other inputs including foreign currency translation impact, among others.

Following updates to its estimates, the Company recognized $ 2.6 million from the previously deferred revenue of the China performance obligation during the three months ended March 31, 2024.

The product revenue recognized for the three months ended March 31, 2024 included a decrease in revenue of $ 2.1 million resulting from changes to estimated variable consideration in the current period relating to performance obligation satisfied in previous periods.

Comparatively, following updates to its estimates, the Company recognized $ 2.1 million from the previously deferred revenue of the China performance obligation during the three months ended March 31, 2023.

Periodically, the Company updates its assumptions such as gross transaction price and profit share, performance period, total sales quantity and other inputs including foreign currency translation impact, among others.

Following updates to its estimates, the Company recognized $ 18.1 million and $ 20.6 million from the previously deferred revenue of the China performance obligation during the three and six months ended June 30, 2024, respectively.

The product revenue recognized for the three months ended June 30, 2024 included an increase in revenue of $ 12.2 million resulting from changes to estimated variable consideration in the current period relating to performance obligation satisfied in previous periods.

Comparatively, following updates to its estimates, the Company deferred $ 3.3 million and $ 1.2 million from the previously deferred revenue of the China performance obligation during three and six months ended June 30, 2023, respectively.

The following table includes a roll-forward of the related deferred revenue that is considered as a contract liability (in thousands):

1 unchanged sentence

Recognized as Revenue

March 31, 2024

June 30, 2024

Product revenue - AstraZeneca China

2 unchanged sentences

Contract assets and liabilities related to rights and obligations in the same contract are recorded net on the condensed consolidated balance sheets.

As of March 31, 2024, deferred revenue included $ 149.7 million related to China performance obligation, which represents the net of $ 176.6 million of deferred revenue presented above and a $ 26.9 million unbilled milestone and co-development revenue under the AstraZeneca China Amendment.

As of March 31, 2024 , approximately $ 5.0 million of the above deferred revenue related to the China unit of accounting was included in short-term deferred revenue, which represents the amount of deferred revenue associated with the China unit of accounting that is expected to be recognized within the next 12 months, associated with the commercial sales in China.

Due to the Company’s legal right to offset, at each balance sheet date, the rebates and discounts, mainly related to profit sharing, are presented as reductions to gross accounts receivable from Falikang, which was $ 3.4 million and $ 3.0 million as of March 31, 2024 and December 31, 2023 , respectively.

As of June 30, 2024, deferred revenue included $ 131.3 million related to China performance obligation, which represents the net of $ 158.6 million of deferred revenue presented above and a $ 27.3 million unbilled milestone and co-development revenue under the AstraZeneca China Amendment.

As of June 30, 2024 , approximately $ 3.4 million of the above deferred revenue related to the China unit of accounting was included in short-term deferred revenue, which represents the amount of deferred revenue associated with the China unit of accounting that is expected to be recognized within the next 12 months, associated with the commercial sales in China.

Due to the Company’s legal right to offset, at each balance sheet date, the rebates and discounts, mainly related to profit sharing, are presented as reductions to gross accounts receivable from Falikang, which was $ 2.3 million and $ 3.0 million as of June 30, 2024 and December 31, 2023 , respectively.

Drug Product Revenue, Net

Drug product revenue from commercial-grade active pharmaceutical ingredient (“API”) or bulk drug product sales to Astellas and AstraZeneca was as follows for the three months ended March 31, 2024 and 2023 (in thousands):

Three Months Ended March 31,

Drug product revenue from commercial-grade active pharmaceutical ingredient (“API”) or bulk drug product sales to Astellas and AstraZeneca was as follows for the three and six months ended June 30, 2024 and 2023 (in thousands):

Three Months Ended June 30,

Six Months Ended June 30,

Astellas Japan Agreement

4 unchanged sentences

The Company updates its estimate of variable consideration related to the API shipments fulfilled under the terms of Astellas Japan Amendment at each balance sheet date.

As a result, the Company recorded a reduction to the drug product revenue of $ 2.2 million for the three months ended March 31, 2024.

As a result, the Company recorded a reduction to the drug product revenue of $ 0.4 million for the three months ended June 30, 2024.

Specifically, the change in estimated variable consideration was based on the API held by Astellas at period end, adjusted to reflect foreign exchange impacts and the changes in the estimated bulk product strength mix intended to be manufactured by Astellas, among others.

For the three months ended March 31, 2024, the Company updated its estimate of variable consideration related to the API shipments fulfilled under the terms of Astellas Japan Amendment, and accordingly recorded a reduction to the drug product revenue of $ 2.2 million.

Specifically, the change in estimated variable consideration was based on the API held by Astellas at period end, adjusted to reflect the changes in the estimated bulk product strength mix intended to be manufactured by Astellas, and foreign exchange impacts, among others.

During the three months ended June 30, 2023, the Company fulfilled two shipment obligations under the terms of Astellas Japan Amendment and recognized related drug product revenue of $ 14.4 million in the same period.

In addition, the Company updated its estimate of variable consideration related to the API shipments fulfilled under the terms of Astellas Japan Amendment, and accordingly recorded a reduction to the drug product revenue of $ 0.6 million.

During the three months ended March 31, 2023, the Company updated its estimate of variable consideration related to the API shipments fulfilled under the terms of Astellas Japan Amendment, and accordingly recorded an adjustment to the drug product revenue of $ 1.7 million.

As of March 31, 2024, t he balances related to the API price true-up under the Astellas Japan Agreement were $ 1.6 million in accrued liabilities and $ 2.5 million in other long-term liabilities, representing the Company’s best estimate of the timing for these amounts to be paid.

As of June 30, 2024, t he balances related to the API price true-up under the Astellas Japan Agreement were $ 2.2 million in accrued liabilities and $ 0.6 million in other long-term liabilities, representing the Company’s best estimate of the timing for these amounts to be paid.

As of December 31, 2023, the balances related to the API price true-up under the Astellas Japan Agreement were $ 1.2 million in accrued liabilities and $ 0.7 million in other long-term liabilities.

8 unchanged sentences

As of December 31, 2023, the related balance in accrued liabilities was $ 38.6 million.

Further for the three months ended March 31, 2024 , the Company reclassified $5 .7 million from the related deferred revenue to accrued liabilities.

As of March 31, 2024, the balances related to the bulk drug product price true-up under the Astellas Europe Agreement and the Astellas EU Supply Agreement were $ 44.3 million in a ccrued liabilities, representing the Company’s best estimate that these amounts will be paid within the next 12 months.

The Company recognized royalty revenue of $ 1.0 million and $ 0.4 million as drug product revenue from the deferred revenue under the Astellas Europe Agreement during the three months ended March 31, 2024 and 2023, respectively.

The Company further reclassified $ 5.4 million from the related deferred revenue to accrued liabilities and paid $ 35.3 million to Astellas during the six months ended June 30, 2024.

As of June 30, 2024, the balances related to the bulk drug product price true-up under the Astellas Europe Agreement and the Astellas EU Supply Agreement were $ 8.8 million in a ccrued liabilities, representing the Company’s best estimate that these amounts will be paid within the next 12 months.

The Company recognized royalty revenue of $ 1.1 million and $ 0.5 million as drug product revenue from the deferred revenue under the Astellas Europe Agreement during the three months ended June 30, 2024 and 2023, and $ 2.1 million and $ 0.8 million for the six months ended June 30, 2024 and 2023, respectively.

It is the Company’s best estimate that the remainder of the deferred revenue will be recognized as revenue when uncertainty is resolved, based on the performance of roxadustat product sales in the Astellas territory.

3 unchanged sentences

Reclassified to Accrued Liability / Accounts Payable

March 31, 2024

June 30, 2024

Drug product revenue - deferred revenue:

1 unchanged sentence

AstraZeneca U.S./RoW Agreement

As described under AstraZeneca Agreements section above, pursuant to the termination and transition agreement related to the AstraZeneca U.S./RoW Agreement, the Company and AstraZeneca settled the outstanding balances relating to past transactions under the AstraZeneca Master Supply Agreement.

As described under AstraZeneca Agreements section above, pursuant to the AstraZeneca Termination and Transition Agreement related to the AstraZeneca U.S./RoW Agreement, the Company and AstraZeneca settled the outstanding balances relating to past transactions under the AstraZeneca Master Supply Agreement.

Accordingly, during the three months ended March 31, 2024, the Company accounted for the termination of the AstraZeneca U.S./RoW agreement as a contract modification under the ASC 606 and recorded a cumulative catch-up net adjustment of $ 25.7 million to the drug product revenue.

A s of March 31, 2024, t he related accounts receivable was $ 26.0 million and the related accrued liabilities were $ 11.5 million .

Comparatively, the related accrued liabilities were $ 11.2 million as of December 31, 2023.

Both the accounts receivable and accrued liabilities have been settled in April 2024.

The related accounts receivable of $ 26.0 million and the related accrued liabilities of $ 11.5 million as of March 31, 2024 were settled during the three months ended June 30, 2024.

Corresponding to the drug product revenue, during the three months ended March 31, 2024, the Company recorded the related cost of goods sold of $ 21.1 million.

6 unchanged sentences

The A&R Eluminex Agreement included additional total upfront payments of $ 1.5 million.

During the three months ended March 31, 2023 , the Company recognized a $ 3.0 million milestone payment based on Eluminex implanting a biosynthetic cornea in the first patient of its clinical trial in China, and a $ 3.0 million manufacturing related milestone payment.

During the first quarter of 2023, the Company recognized a $ 3.0 million milestone payment based on Eluminex implanting a biosynthetic cornea in the first patient of its clinical trial in China, and a $ 3.0 million manufacturing related milestone payment.

During the second quarter of 2023, the Company recognized a $ 1.0 million upfront payment under the A&R Eluminex Agreement.

During the first quarter of 2022, FibroGen and Eluminex entered into a separate contract manufacturing agreement, under which the Company is responsible for supplying the cornea product at cost plus 10 % of its product manufacturing costs until its manufacturing technology is fully transferred to Eluminex, which occurred by the end of 2023 .

The related contract manufacturing revenue was recorded as other revenue and included in development and other revenue in the condensed consolidated statement of operations.

Amounts recognized as revenue under the agreements with Eluminex were as follows for the three months ended March 31, 2024 and 2023 (in thousands):

Three Months Ended March 31,

Such contract manufacturing activity was generally ceased during the first quarter of 2024.

Amounts recognized as revenue under the agreements with Eluminex were as follows for the three and six months ended June 30, 2024 and 2023 (in thousands):

Three Months Ended June 30,

Six Months Ended June 30,

Performance Obligation

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Other revenue - contract manufacturing

Variable Interest Entity

Variable Interest Entities

Consolidated Variable Interest Entity - Fortis

On May 5, 2023 (the “Option Acquisition Date”), the Company entered into an exclusive option agreement to acquire Fortis Therapeutics (“Fortis”) with its novel Phase 1 antibody-drug conjugate, FOR46 (now referred to as “FG-3246”), that targets a novel epitope on CD46 preferentially expressed on certain cancer cells.

On May 5, 2023 (the “Option Acquisition Date”), the Company entered into an exclusive option agreement to acquire Fortis Therapeutics, Inc.

(“Fortis”) with its novel Phase 1 antibody-drug conjugate, FOR46 (now referred to as “FG-3246”), that targets a novel epitope on CD46 preferentially expressed on certain cancer cells.

FG-3246 is in development for the treatment of metastatic castration-resistant prostate cancer with potential applicability in other solid tumors and hematologic malignancies.

If FibroGen exercises the option to acquire Fortis, it will pay Fortis an option exercise payment of $ 80.0 million, and thereafter, legacy Fortis shareholders would be eligible to receive from FibroGen up to $ 200.0 million in contingent payments associated with the achievement of various regulatory approvals.

If FibroGen acquires Fortis, it would also be responsible to pay the University of California, San Francisco (“UCSF”), an upstream licensor to Fortis, development milestone fees and a single digit royalty on net sales of therapeutic or diagnostic products arising from the licensing arrangement between Fortis and UCSF .

If FibroGen acquires Fortis, it would also be responsible to pay the University of California, San Francisco, an upstream licensor to Fortis, development milestone fees and a single digit royalty on net sales of therapeutic or diagnostic products arising from the licensing arrangement between Fortis and University of California, San Francisco .

If FibroGen chooses not to acquire Fortis, its exclusive license to FG-3246 would expire.

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As part of the clinical development strategy, FibroGen will continue the work to develop a PET-based biomarker utilizing a radiolabeled version of the targeting antibody for patient selection.

Additionally, the Company is obligated to make four quarterly payments totaling $ 5.4 million to Fortis in support of its continued development obligations, of which the last payment was $ 1.7 million and was made during the three months ended March 31, 2024.

Pursuant to the guidance under Accounting Standards Codification (“ASC”) 810, Consolidation (“ASC 810”), the Company determined that Fortis is a VIE and that the Company is the primary beneficiary of Fortis, as through the Fortis Agreements the Company has the power to direct activities that most significantly impact the economic performance of Fortis.

Therefore, the Company consolidated Fortis starting from the Option Acquisition Date, and continues to consolidate as of March 31, 2024.

Pursuant to the guidance under ASC 810, Consolidation (“ASC 810”), the Company determined that Fortis is a VIE and that the Company is the primary beneficiary of Fortis, as through the Fortis Agreements the Company has the power to direct activities that most significantly impact the economic performance of Fortis.

Therefore, the Company consolidated Fortis starting from the Option Acquisition Date and continues to consolidate as of June 30, 2024.

Fortis has authorized and issued common shares and Series A preferred shares.

As of the Option Acquisition Date and March 31, 2024 , the Company owned approximately 2 % of Fortis’ Series A preferred shares, which was acquired previously and carried at zero cost.

The NCI attributable to the common shares is classified as nonredeemable NCI, as it is 100 % owned by third party shareholders.

The NCI attributable to the approximately 98 % of Series A preferred shares owned by other investors are classified as redeemable NCI in temporary equity, as the preferred shares are redeemable by the non-controlling shares holders upon occurrence of certain events out of the Company’s control.

As of the Option Acquisition Date and June 30, 2024 , the Company owned approximately 2 % of Fortis’ Series A preferred shares, which was acquired previously and carried at zero cost.

The non-controlling interests (“NCI”) attributable to the common shares is classified as nonredeemable NCI, as it is 100 % owned by third party shareholders.

The NCI attributable to the approximately 98 % of Series A preferred shares owned by other investors are classified as redeemable NCI in temporary equity, as the preferred shares are redeemable by the non-controlling shareholders upon occurrence of certain events out of the Company’s control.

Subsequent to the Option Acquisition Date, Fortis’ net income is allocated to its common shares and preferred shares based on their respective stated rights.

Fortis’ net loss is allocated to its common shares only as the holders of preferred shares do not have a contractual obligation to absorb such losses.

As of March 31, 2024, total assets and liabilities of Fortis were immaterial.

For the three months ended March 31, 2024, Fortis’ net income (losses) was immaterial.

As of June 30, 2024, total assets and liabilities of Fortis were immaterial.

For the three months ended June 30, 2024, Fortis’ net income (losses) was immaterial.

Equity method investment - Unconsolidated VIE - Falikang

9 unchanged sentences

The Company may provide shareholder loans to Falikang to meet necessary financial obligations as part of its operations.

To date, there has been no such loans.

To date, there have been no such loans.

The Company’s equity method investment in Falikang was as follows (in thousands):

2 unchanged sentences

Share of Net Income

March 31, 2024

June 30, 2024

Falikang is considered a related party to the Company.

2 unchanged sentences

The fair values of the Company’s financial assets that are measured on a recurring basis are as follows (in thousands):

March 31, 2024

June 30, 2024

Money market funds

Corporate bonds

Commercial paper

8 unchanged sentences

These inputs include reported trades of and broker/dealer quotes on the same or similar investments, issuer credit spreads, benchmark investments, prepayment/default projections based on historical data and other observable inputs.

During the three months ended March 31, 2024 and 2023 , a total of $ 26.3 million and $ 7.0 million, respectively, of U.S.

There were no transfers of assets between levels during the three months ended June 30, 2024.

During the three months ended March 31, 2024, a total of $ 26.3 million of U.S.

treasury notes and bills were transferred from Level 1 to Level 2 as such instruments were changed to off-the-run when they were issued before the most recent issue and were still outstanding at measurement day.

2 unchanged sentences

Cash and cash equivalents consisted of the following (in thousands):

March 31, 2024

June 30, 2024

December 31, 2023

3 unchanged sentences

Total cash and cash equivalents

At March 31, 2024 and December 31, 2023, a total of $ 27.6 million and $ 32.2 million of the Company’s cash and cash equivalents were held outside of the U.S.

At June 30, 2024 and December 31, 2023, a total of $ 39.3 million and $ 32.2 million of the Company’s cash and cash equivalents were held outside of the U.S.

in its foreign subsidiaries to be used primarily for its China operations, respectively.

The Company’s investments consist primarily of available-for-sale debt investments.

The amortized cost, gross unrealized holding gains or losses, and fair value of the Company’s investments by major investments type are summarized in the tables below (in thousands):

March 31, 2024

Amortized Cost

Gross Unrealized

Holding Gains

Gross Unrealized

Holding Losses

Corporate bonds

Commercial paper

government bonds

Total investments

The Company did no t have any short-term or long-term investments as of June 30, 2024.

As of December 31, 2023, t he Company’s investments consist primarily of available-for-sale debt investments, and the amortized cost, gross unrealized holding gains or losses, and fair value of the Company’s investments by major investments type are summarized in the tables below (in thousands):

December 31, 2023

8 unchanged sentences

Total investments

The following table summarizes, for all available for sale securities in an unrealized loss position, the fair value and gross unrealized loss by length of time the security has been in a continual unrealized loss position (in thousands):

March 31, 2024

Less than 12 Months

12 Months or More

Gross Unrealized

Holding Losses

Gross Unrealized

Holding Losses

Gross Unrealized

Holding Losses

government bonds

The following table summarizes, for all available for sale securities in an unrealized loss position as of December 31, 2023, the fair value and gross unrealized loss by length of time the security has been in a continual unrealized loss position (in thousands):

December 31, 2023

9 unchanged sentences

government bonds

The contractual maturities of all available-for-sale investments were within one year as of March 31, 2024.

The Company periodically assesses whether the unrealized losses on its available-for-sale investments were temporary.

1 unchanged sentence

For debt securities, the Company also considers whether (i) it is more likely than not that the Company will be required to sell the debt securities before recovery of their amortized cost basis, and (ii) the amortized cost basis cannot be recovered as a result of credit losses.

Based on the results of its review, the Company did no t recognize any impairment for its available-for-sale investments during the three months ended March 31, 2024 and 2023.

Based on the results of its review, the Company did no t recognize any impairment for its available-for-sale investments during the three and six months ended June 30, 2024 and 2023.

Inventories consisted of the following (in thousands):

March 31, 2024

June 30, 2024

December 31, 2023

3 unchanged sentences

Total inventories

As described under Note 2, Collaboration Agreements, License Agreement and Revenues above, resulting from the termination and transition agreement related to the AstraZeneca U.S./RoW Agreement, the Company was reimbursed $ 12.6 million for work-in-progress inventory, which was written off and recognized as cost of goods sold during the three months ended March 31, 2024.

As described under Note 2, Collaboration Agreements, License Agreement and Revenues above, resulting from the AstraZeneca Termination and Transition Agreement related to the AstraZeneca U.S./RoW Agreement, the Company was reimbursed $ 12.6 million for work-in-progress inventory, which was written off and recognized as cost of goods sold during the three months ended March 31, 2024.

Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consisted of the following (in thousands):

March 31, 2024

June 30, 2024

December 31, 2023

6 unchanged sentences

Total prepaid expenses and other current assets

The unbilled contract assets as of March 31, 2024 and December 31, 2023 included $ 22.9 million and $ 22.5 million, respectively, related to unbilled co-development revenue under the AstraZeneca China Amendment.

In addition, the unbilled contract assets as of March 31, 2024 and December 31, 2023 each included the $ 4.0 million unbilled regulatory milestone payment under the AstraZeneca China Agreement.

The unbilled contract assets as of June 30, 2024 and December 31, 2023 included $ 23.3 million and $ 22.5 million, respectively, related to unbilled co-development revenue under the AstraZeneca China Amendment.

In addition, the unbilled contract assets as of June 30, 2024 and December 31, 2023 each included the $ 4.0 million unbilled regulatory milestone payment under the AstraZeneca China Agreement.

See the AstraZeneca China Agreement section in Note 2, Collaboration Agreements, License Agreement and Revenues , for details.

As of each of March 31, 2024 and December 31, 2023 , the Company recorded a $ 28.5 million receivable in prepaid expenses and other current assets, corresponding to the accrued litigation settlement of the same amount related to the Company’s agreement in principle with plaintiffs to settle the class action lawsuit.

As of each of June 30, 2024 and December 31, 2023 , the Company recorded a $ 28.5 million receivable in prepaid expenses and other current assets, corresponding to the accrued litigation settlement of the same amount related to the Company’s agreement in principle with plaintiffs to settle the class action lawsuit.

As the Company maintains insurance that covers exposure related to the class action lawsuit, this amount is fully recoverable under the Company’s insurance policies.

3 unchanged sentences

Accrued and other current liabilities consisted of the following (in thousands):

March 31, 2024

June 30, 2024

December 31, 2023

11 unchanged sentences

Total accrued and other current liabilities

The accrued liabilities of $ 57.4 million and $ 51.0 million for API and bulk drug product price true-up as of March 31, 2024 and December 31, 2023, respectively, resulted from changes in estimated variable consideration associated with the API shipments fulfilled under the terms of the Astellas Japan Amendment, the bulk drug product transferred under the terms of the Astellas Europe Agreement and the Astellas EU Supply Agreement, and the bulk drug product shipments to AstraZeneca under the terms of the AstraZeneca Master Supply Agreement.

Included in the balance as of March 31, 2024 , the amount due to AstraZeneca was $ 11.5 million , as discussed under the Drug Product Revenue, Net section in Note 2, Collaboration Agreements, License Agreement and Revenues, resulting from the termination and transition agreement related to the AstraZeneca U.S./RoW Agreement, and has been settled in April 2024.

In addition, the Company recorded an accrued inventory related cost of $ 8.5 million as of March 31, 2024, as part of the cost of goods sold resulting from this termination and transition agreement.

See Note 2, Collaboration Agreements, License Agreement and Revenues, for details.

As of March 31, 2024 and December 31, 2023 , the accrued litigation settlement of $ 28.5 million was related to the Company’s agreement in principle with plaintiffs to settle the class action lawsuit.

The Company maintains insurance that covers exposure related to the class action lawsuit.

As the amount is fully recoverable under the Company’s insurance policies, the Company recorded a corresponding receivable in prepaid expenses and other current assets in the condensed consolidated balance sheet.

The determination that the recorded receivables are probable of collection is based on the terms of the applicable insurance policies and communications with the insurers.

The accrued liabilities of $ 11.0 million and $ 51.0 million for API and bulk drug product price true-up as of June 30, 2024 and December 31, 2023, respectively, resulted from changes in estimated variable consideration associated with the API shipments fulfilled under the terms of the Astellas Japan Amendment, the bulk drug product transferred under the terms of the Astellas Europe Agreement and the Astellas EU Supply Agreement, and the bulk drug product shipments to AstraZeneca under the terms of the AstraZeneca Master Supply Agreement.

During the three months ended June 30, 2024, the Company paid $ 35.3 million to Astellas and $ 11.5 million to AstraZeneca related to accrued amounts.

See the Drug Product Revenue, Net section in Note 2, Collaboration Agreements, License Agreement and Revenues, for details.

As of June 30, 2024 and December 31, 2023 , the accrued litigation settlement of $ 28.5 million was related to the Company’s agreement in principle with plaintiffs to settle the class action lawsuit, as mentioned above.

See the Legal Proceedings and Other Matters section in Note 10, Commitments and Contingencies , for details.

The Company recorded an accrued inventory related cost of $ 8.5 million as of June 30, 2024, as part of the cost of goods sold resulting from the AstraZeneca Termination and Transition Agreement, discussed under Note 2, Collaboration Agreements, License Agreement and Revenues .

Senior Secured Term Loan Facilities

4 unchanged sentences

The Company has determined that certain other features embedded within the Loan should be bifurcated and accounted for separately as a derivative.

At inception and as of March 31, 2024, the fair values of such derivatives were negligible due to the low probability of the underlying events.

At inception and as of June 30, 2024, the fair values of such derivatives were negligible due to the low probability of the underlying events.

The Term Loans shall accrue interest at a fixed rate of 14.0 % per annum, payable monthly in arrears.

3 unchanged sentences

The initial issuance costs and the related transaction costs, totaling $ 3.7 million is amortized as interest expense using the effective interest method over the term of the Initial Term Loan and are reported on the balance sheet as a direct deduction from the amount of the Initial Term Loan.

The effective annual interest rate of the Initial Term Loan was 16.13 % for three months ended March 31, 2024 .

The Company recorded interest expense of $ 2.9 million for the three months ended March 31, 2024.

As of March 31, 2024 , the related accrued interest was $ 0.4 million.

The Company was in compliance with all debt covenants associated with the senior secured term loan facilities as of March 31, 2024 , including maintaining a minimum balance of $ 30 million of unrestricted cash and cash equivalents held in accounts in the U.S.

The Company’s senior secured term loan facilities as of March 31, 2024 were as follows (in thousands):

March 31, 2024

The effective annual interest rate of the Initial Term Loan was 16.13 % for the three and six months ended June 30, 2024 and 2023 .

The Company recorded interest expense of $ 2.9 million and $ 5.8 million, respectively, for the three and six months ended June 30, 2024 .

The Company recorded interest expense of $ 1.7 million for the three and six months ended June 30, 2023.

As of June 30, 2024 , the related accrued interest was $ 0.4 million.

The Company was in compliance with all debt covenants associated with the senior secured term loan facilities as of June 30, 2024 , including maintaining a minimum balance of $ 30 million of unrestricted cash and cash equivalents held in accounts in the U.S.

The Company’s senior secured term loan facilities as of June 30, 2024 were as follows (in thousands):

June 30, 2024

Principal of senior secured term loan facilities

22 unchanged sentences

On a quarterly basis, the Company reassesses the expected total revenue and the timing of such revenue, recalculates the amortization of debt discount and transactions costs and effective interest rate, and adjusts the accounting prospectively as needed.

The Company’s estimated effective annual interest rate was 15.96 % as of March 31, 2024.

The following table summarizes the activities of the liability related to sale of future revenues for the three months ended March 31, 2024:

Three Months Ended

March 31, 2024

The Company’s estimated effective annual interest rate was 15.63 % as of June 30, 2024.

The following table summarizes the activities of the liability related to sale of future revenues for the six months ended June 30, 2024:

Six Months Ended

June 30, 2024

Liability related to sale of future revenues - beginning balance

4 unchanged sentences

Liability related to sale of future revenues, non-current

During the three months ended March 31, 2024, the Company recognized, under Astellas Agreements, development revenue of $ 0.3 million , and a net reduction to drug product revenue of $ 1.2 million .

During the three and six months ended June 30, 2024, the Company recognized, under Astellas Agreements, development revenue of $ 0.3 million and $ 0.6 million , respectively, and drug product revenue of $ 0.7 million and $( 0.5 ) million , respectively.

See Note 2, Collaboration Agreements, License Agreement and Revenue , for details.

During the three months ended March 31, 2024 , the Company recognized the related non-cash interest expense of $ 2.0 million.

Based on the current estimates of drug product revenue and revenue from milestone payments under the Astellas Agreements, and taking into the consideration of the terms discussed above, the Company anticipates to reach a Payment Cap up to $ 125.0 million by 2031.

Provisions for income tax for the three months ended March 31, 2024 and 2023 were primarily due to foreign taxes.

During the three and six months ended June 30, 2024 , the Company recognized the related interest expense of $ 1.7 million and $ 3.7 million, respectively.

During the three and six months ended June 30, 2023, the Company recognized the related interest expense of $ 1.3 million and $ 3.6 million, respectively.

During the first quarter of 2024, the Company paid $ 5.7 million accrued interest.

Based on the current estimates of drug product revenue and revenue from milestone payments under the Astellas Agreements, and taking into the consideration of the terms discussed above, the Company anticipates reaching a Payment Cap up to $ 125.0 million by 2031.

Benefits from income tax for the three and six months ended June 30, 2024 and 2023 were primarily due to foreign taxes.

Based upon the weight of available evidence, which includes its historical operating performance, reported cumulative net losses since inception, the Company has established and continues to maintain a full valuation allowance against its net deferred tax assets as it does not currently believe that realization of those assets is more likely than not.

1 unchanged sentence

Astellas is an equity investor in the Company and is considered a related party.

The Company recorded license and development revenue related to collaboration agreements with Astellas of $ 0.3 million and $ 1.6 million for the three months ended March 31, 2024 and 2023, respectively.

The Company recorded a reduction to drug product revenue from Astellas of $ 1.2 million for the three months ended March 31, 2024 and recorded drug product revenue from Astellas of $ 2.1 million for the three months ended March 31, 2023.

The Company recorded license and development revenue related to collaboration agreements with Astellas of $ 0.3 million and $ 1.8 million for the three months ended June 30, 2024 and 2023, and $ 0.6 million and $ 3.5 million for the six months ended June 30, 2024 and 2023, respectively.

In addition, the Company recorded drug product revenue from Astellas of $ 0.7 million and $ 14.3 million for the three months ended June 30, 2024 and 2023, and $( 0.5 ) million and $ 16.4 million for the six months ended June 30, 2024 and 2023, respectively.

See Note 2, Collaboration Agreements, License Agreement and Revenues , for details.

The Company’s expense related to collaboration agreements with Astellas was immaterial for each of the three months ended March 31, 2024 and 2023.

As of March 31, 2024 and December 31, 2023 , accounts receivable from Astellas were $ 0.3 million and $ 0.8 million, respectively.

As of March 31, 2024 and December 31, 2023 , total deferred revenue from Astellas was $ 10.2 million and $ 16.9 million, respectively.

As of March 31, 2024, the amounts due to Astellas, included in accrued and other current liabilities, and other long-term liabilities, totaled $ 48.3 million.

The Company’s expense related to collaboration agreements with Astellas was immaterial for each of the three and six months ended June 30, 2024 and 2023.

As of June 30, 2024 and December 31, 2023 , accounts receivable from Astellas were $ 0.3 million and $ 0.8 million, respectively.

As of June 30, 2024 and December 31, 2023 , total deferred revenue from Astellas was $ 9.4 million and $ 16.9 million, respectively.

As of June 30, 2024, the amounts due to Astellas, included in accrued and other current liabilities, and other long-term liabilities, totaled $ 11.6 million.

As of December 31, 2023 , the amount due to Astellas, included in accrued and other current liabilities, and other long-term liabilities, totaled $ 40.5 million.

1 unchanged sentence

FibroGen Beijing owns 51.1 % of Falikang’s equity.

See Note 3, Equity method investment - Variable Interest Entity , for details.

The net product revenue from Falikang was $ 27.1 million and $ 21.4 million for the three months ended March 31, 2024 and 2023, respectively.

See the Equity method investment - Unconsolidated VIE - Falikang section of Note 3, Variable Interest Entities , for details.

The net product revenue from Falikang was $ 46.0 million and $ 20.5 million for the three months ended June 30, 2024 and 2023, and $ 73.1 million and $ 41.9 million for the six months ended June 30, 2024 and 2023, respectively.

See the Product Revenue, Net section in Note 2, Collaboration Agreements, License Agreement and Revenues , for details.

The investment income in Falikang was $ 0.6 million and $ 0.8 million for the three months ended March 31, 2024 and 2023, respectively.

As of March 31, 2024 and December 31, 2023, the Company’s equity method investment in Falikang was $ 5.8 million and $ 5.3 million , respectively.

See Note 3, Equity method investment - Variable Interest Entity , for details.

The other income from Falikang was immaterial for each of the three months ended March 31, 2024 and 2023.

As of March 31, 2024 and December 31, 2023 , accounts receivable, net, from Falikang, were $ 6.8 million and $ 5.2 million, respectively.

The investment income in Falikang was $ 1.2 million and $ 0.6 million for the three months ended June 30, 2024 and 2023 and $ 1.8 million and $ 1.3 million for the six months ended June 30, 2024 and 2023, respectively.

As of June 30, 2024 and December 31, 2023, the Company’s equity method investment in Falikang was $ 6.9 million and $ 5.3 million , respectively.

See the Equity method investment - Unconsolidated VIE - Falikang section of Note 3, Variable Interest Entities , for details.

The other income from Falikang was immaterial for each of the three and six months ended June 30, 2024 and 2023.

As of June 30, 2024 and December 31, 2023 , accounts receivable, net, from Falikang, were $ 3.8 million and $ 5.2 million, respectively.

Commitments and Contingencies

Contract Obligations

As of March 31, 2024 , the Company had outstanding total non-cancelable purchase obligations of $ 35.6 million, including $ 22.8 million for manufacture and supply of pamrevlumab, $ 1.7 million for manufacture and supply of roxadustat, and $ 11.0 million for other purchases and programs.

As of June 30, 2024 , the Company had outstanding total non-cancelable purchase obligations of $ 19.7 million, including $ 11.2 million for manufacture and supply of pamrevlumab, $ 0.8 million for manufacture and supply of roxadustat, and $ 7.6 million for other purchases and programs.

The Company expects to fulfill its commitments under these agreements in the normal course of business, and as such, no liability has been recorded.

Some of the Company’s license agreements provide for periodic maintenance fees over specified time periods, as well as payments by the Company upon the achievement of development, regulatory and commercial milestones.

As of March 31, 2024 , future milestone payments for research and preclinical stage development programs consisted of up to approximately $ 697.9 million in total potential future milestone payments under the Company’s license agreements with HiFiBiO (for Gal-9 and CCR8), Medarex, Inc.

As of June 30, 2024 , future milestone payments for research and preclinical stage development programs consisted of up to approximately $ 697.9 million in total potential future milestone payments under the Company’s license agreements with HiFiBiO (HK) Ltd.

HiFiBiO Therapeutics) (for Gal-9 and CCR8), Medarex, Inc.

These milestone payments generally become due and payable only upon the achievement of certain developmental, clinical, regulatory and/or commercial milestones.

The event triggering such payment or obligation has not yet occurred.

As of March 31, 2024, the Company had $ 77.7 million of operating lease liabilities.

As of June 30, 2024, the Company had $ 73.9 million of operating lease liabilities.

In addition, see Note 6, Senior Secured Term Loan Facilities and Note 7, Liability Related to Sale of Future Revenues for details of the related obligations.

3 unchanged sentences

A loss or a range of loss is disclosed when it is reasonably possible that a material loss will incur and can be estimated, or when it is reasonably possible that the amount of a loss, when material, will exceed the recorded provision.

The Company did not have any material accruals for any active legal action, except for the class action settlement mentioned below, in its condensed consolidated balance sheet as of March 31, 2024, as the Company could not predict the ultimate outcome of these matters, or reasonably estimate the potential exposure.

The Company did not have any material accruals for any active legal action, except for the class action settlement mentioned below, in its condensed consolidated balance sheet as of June 30, 2024, as the Company could not predict the ultimate outcome of these matters, or reasonably estimate the potential exposure.

Between April 2021 and May 2021, five putative securities class action complaints were filed against FibroGen and certain of its current and former executive officers (collectively, the “Defendants”) in the U.S.

4 unchanged sentences

On October 17, 2023, the parties reached an agreement in principle to settle the class action at $ 28.5 million.

Accordingly, as of December 31, 2023, the Company recorded the $ 28.5 million in accrued and other current liabilities in the condensed consolidated balance sheet.

Accordingly, as of December 31, 2023, the Company recorded the $ 28.5 million in accrued and other current liabilities in the consolidated balance sheet.

The Company maintains insurance that covers exposure related to the class action lawsuit.

1 unchanged sentence

The determination that the recorded receivables are probable of collection is based on the terms of the applicable insurance policies and communications with the insurers.

The Court preliminarily approved the settlement on February 13, 2024 and a hearing on final approval is scheduled for May 16, 2024.

The Court preliminarily approved the settlement on February 13, 2024 and approved the settlement Plan of Allocations on May 28, 2024 and Plaintiffs’ motion for attorney’s fees on August 1, 2024, reserving further orders on the final judgment until after the claims and distribution process was completed.

Another case, filed on May 25, 2023, against the same defendants, asserting similar claims as the class action and additional common-law and California state fraud claims was voluntarily dismissed on December 20, 2023.

7 unchanged sentences

• Two of the Delaware Chancery Derivative Actions, filed on April 14, 2022, and June 1, 2023, have been consolidated (the “Delaware Chancery Consolidated Derivative”).

On February 1, 2024, Defendants moved to dismiss the Delaware Chancery Consolidated Derivative action.

On February 1, 2024, Defendants moved to dismiss the Delaware Chancery Consolidated Derivative action and a hearing on the motion was held on May 9, 2024.

In the other two Delaware Chancery Derivative Actions, filed in the Delaware Court of Chancery on December 3, 2023 and April 3, 2024, Defendants have not been formally served, though the parties are in the process of negotiating a stay of the actions pending resolution of the motion to dismiss the Delaware Chancery Consolidated Derivative action;

• Two of the Delaware Federal Derivative Actions remain stayed.

One is stayed pending the resolution of the putative securities class action, and the other is stayed pending resolution of the motion to dismiss the Delaware Chancery Consolidated Derivative action;

• Two of the Delaware Federal Derivative Actions remain stayed pending resolution of the motion to dismiss the Delaware Chancery Consolidated Derivative action;

• The California Federal Derivative Action was voluntarily dismissed on January 22, 2024.

18 unchanged sentences

The Company believes the estimated fair value of these arrangements is minimal.

Subsequent Event

On July 30, 2024, the Company reported results from Pancreatic Cancer Action Network’s (“PanCAN’s”) Precision Promise SM adaptive trial platform that included pamrevlumab, its antibody developed to inhibit the activity of CTGF, in combination with standard-of-care chemotherapy treatments for pancreatic cancer, for patients with metastatic pancreatic cancer.

The pamrevlumab experimental arm in PanCAN’s Precision Promise Phase 2/3 adaptive platform trial did not meet the primary endpoint of overall survival as determined by the protocol pre-specified Bayesian statistical analysis.

On July 30, 2024, the Company also reported results from LAPIS, its double-blind placebo-controlled Phase 3 clinical program for pamrevlumab in 284 LAPC patients randomized at a 1:1 ratio to receive either pamrevlumab or placebo, in each case in combination with chemotherapy (either FOLFIRINOX or gemcitabine plus nab-paclitaxel).

The study did not meet the primary endpoint of overall survival.

Responding to the above results, the Company is implementing an immediate and significant cost reduction plan in the U.S., including terminating pamrevlumab research and development investment and expeditiously wind down remaining obligations, and reducing U.S.

workforce by approximately 75 % (the Company notified employees on August 2, 2024).

The Company expects that the majority of the restructuring charges related to the headcount reductions, primarily consisting of notice period and severance payments, accrued vacation and employee benefits contributions, will be recognized in the second half of 2024, and that the implementation of the headcount reductions, including cash payments, will be substantially complete by the end of the first quarter of 2025.

The Company may incur additional expenses not currently contemplated due to events associated with these cost reduction measures.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements