What changed in this filing

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Item 1. Legal Proceedings

2024-11-12 compared with 2024-08-06 · 98 added, 64 removed, 990 unchanged (14% of the section changed)

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We recognize accruals for any legal action when we conclude that a loss is probable and reasonably estimable.

We did not have any material accruals for any active legal action in our condensed consolidated balance sheet as of June 30, 2024, as we could not predict the ultimate outcome of these matters, or reasonably estimate the potential exposure.

We did not have any material accruals for any active legal action in our condensed consolidated balance sheet as of September 30, 2024, as we could not predict the ultimate outcome of these matters, or reasonably estimate the potential exposure.

See Note 11, Commitments and Contingencies , to the condensed consolidated financial statements for details.

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Risks Related to the Development and Commercialization of Our Product Candidates

• We are substantially dependent on the success of our lead products roxadustat and FG-3246.

• We are substantially dependent on the success of our lead products roxadustat and FG-3246 (in conjunction with our positron emission tomography (“PET”) imaging agent FG-3180).

• Drug development and obtainment of marketing authorization are very difficult endeavors, and we may ultimately be unable to obtain regulatory approval for our various product candidates in one or more jurisdictions and one or more indications.

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We may not be able to effectively maintain our intellectual property position throughout the major markets of the world.

• The laws of some foreign countries do not protect proprietary rights to the same extent as do the laws of the U.S., and we may encounter significant problems in securing and defending our intellectual property rights outside the U.S.

• The laws of some foreign countries do not protect proprietary rights to the same extent as do the laws of the United States (“U.S.”), and we may encounter significant problems in securing and defending our intellectual property rights outside the U.S.

Risks Related to Government Regulation

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Risks Related to Our International Operations

• We have established operations in China and are seeking approval to commercialize our product candidates outside of the U.S., and a number of risks associated with international operations could materially and adversely affect our business.

• We have established operations in the People’s Republic of China (“China”) and are seeking approval to commercialize our product candidates outside of the U.S., and a number of risks associated with international operations could materially and adversely affect our business.

• The pharmaceutical industry in China is highly regulated and such regulations are subject to change.

• We use our own manufacturing facilities in China to produce roxadustat API and drug product for the market in China.

• We use our own manufacturing facilities in China to produce roxadustat active pharmaceutical ingredient (“API”) and drug product for the market in China.

There are risks inherent to operating commercial manufacturing facilities, and with these being our single source suppliers, we may not be able to continually meet market demand.

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Risks Related to the Development and Commercialization of Our Product Candidates

We are substantially dependent on the success of our lead products roxadustat and FG-3246.

We are substantially dependent on the success of our lead products roxadustat and FG-3246 (in conjunction with our PET imaging agent FG-3180).*

To date, we have invested substantially in the research and development of pamrevlumab and roxadustat.

With the negative pamrevlumab data released in July 2024 and the termination of pamrevlumab development, the future value drivers for FibroGen, Inc.

(“FibroGen” or the “Company”) now depend in large part on the continued commercial success of roxadustat and the development of FG-3246, which is in clinical development for metastatic castration-resistant prostate cancer.

We continue to co-commercialize roxadustat in the People’s Republic of China (“China”) with AstraZeneca AB (“AstraZeneca”) and develop roxadustat in China in chemotherapy-induced anemia.

(“FibroGen” or the “Company”) now depend in large part on the continued commercial success of roxadustat and the development of FG-3246 (in conjunction with our PET imaging agent FG-3180), which is in clinical development for metastatic castration-resistant prostate cancer.

We continue to co-commercialize roxadustat in China with AstraZeneca AB (“AstraZeneca”) and develop roxadustat in China in chemotherapy-induced anemia.

We continue to co-commercialize roxadustat in Japan and Europe with Astellas Pharma Inc.

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Drug development and obtaining marketing authorization is a very difficult endeavor and we may ultimately be unable to obtain regulatory approval for our various product candidates in one or more jurisdictions and in one or more indications.

The development, manufacturing, marketing, and selling of our products and product candidates are and will continue to be subject to extensive and rigorous review and regulation by numerous government authorities in the United States (“U.S.”) and in other countries where we intend to develop and, if approved, market any product candidates.

and in other countries where we intend to develop and, if approved, market any product candidates.

Before obtaining regulatory approval for the commercial sale of any product candidate, we must demonstrate through extensive preclinical trials and clinical trials that the product candidate is safe and effective for use in each indication for which approval is sought.

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• our product candidates exhibiting an unacceptable safety signal at any stage of development;

• failure either by us or the clinical research organizations (“CROs”) or investigators that conduct clinical trials on our behalf, to comply with regulations or GCPs, clinical trial protocols, or contractual agreements, which may adversely impact our clinical trials;

• disagreement over whether to accept results from clinical trial sites in a country where the standard of care is potentially different from that in the U.S.;

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• requirements by regulatory authorities to exclude the use of patient data from unreliable clinical trials, or disagreement with our interpretation of the data from our preclinical trials and clinical trials;

• failure by collaboration partners to perform or complete their clinical programs in a timely manner, or at all.

• failure by collaboration partners or other third parties such as clinical investigators to perform or complete their clinical programs in a timely manner, or at all;

• Failure of data from investigator-sponsored clinical trials, which are used as supportive evidence for our initial IND studies, to meet GCP standards.

Any of these factors, many of which are beyond our control, could delay or jeopardize our or our collaboration partners’ abilities to obtain regulatory approval for our product candidates in one or more indications.

Even if we believe our clinical trials are successful, regulatory authorities may not agree that our completed clinical trials provide adequate data on safety or efficacy.

Even if we believe our clinical trials, as well as, investigator-sponsored trials are successful, regulatory authorities may not agree that our completed clinical trials provide adequate data on safety or efficacy.

Approval by one regulatory authority does not ensure approval by any other regulatory authority.

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Many companies in the pharmaceutical and biotechnology industries have suffered significant setbacks in late-stage clinical trials after achieving positive results in early-stage development, and we may face similar setbacks.

When we have an investigator-sponsored trial, we would have to rely on sponsor’s data generated independently under sponsor’s institutional practices.

As a result, there is an additional risk that results may differ in future trials run by FibroGen as the sponsor.

We do not know whether our ongoing or planned clinical trials will need to be redesigned based on interim results or if we will be able to achieve sufficient patient enrollment or complete planned clinical trials on schedule.*

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• delay or failure to manufacture sufficient quantities of product candidate for use in clinical trials;

• difficulty enrolling a sufficient number of patients to conduct our clinical trials as planned;

• difficulty enrolling a sufficient number of patients to conduct our clinical trials, as well as, investigator-sponsored trials as planned;

• inspection of the clinical trial operations or trial site by the FDA or other regulatory authorities resulting in the imposition of a clinical hold, warning letter, or other regulatory action;

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In particular, identifying and qualifying patients to participate in clinical trials of our product candidates is critical to our success.

The timing of our clinical trials depends on the rate at which we can recruit and enroll patients in testing our product candidates.

The timing of our clinical trials, as well as, investigator-sponsored trials depends on the rate at which we can recruit and enroll patients in testing our product candidates.

Patients may be unwilling to participate in clinical trials of our product candidates for a variety of reasons, some of which may be beyond our control, including:

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Any of these occurrences may materially and adversely harm our business, operations, and prospects.

There may be additional complexity involved in the development of FG-3246 if we use our radiolabeled antibody PET imaging agent, FG-3180, as a required screening for registration.

We plan to commence a sub-study of FG-3180 to assess the correlation between CD46 expression and patient response to FG-3246.

While FG-3180 and FG-3246 use the same base anti-CD46 antibody, FG-3180 will require additional regulatory approval and may have additional development risks.

If FG-3180 is required for registration of FG-3246, delays in the development of FG-3180 could delay the development of FG-3246.

Our product candidates may cause or have attributed to them undesirable side effects or have other properties that delay or prevent their regulatory approval or limit their commercial potential.

Undesirable side effects caused by our product candidates or that may be identified as related to our product candidates by physician investigators conducting our clinical trials or even competing products in development that utilize a similar mechanism of action or act through a similar biological disease pathway could cause us or regulatory authorities to interrupt, delay or halt clinical trials and could result in the delay or denial of regulatory approval by the FDA or other regulatory authorities and potential product liability claims.

Undesirable side effects caused by our product candidates or that may be identified as related to our product candidates by physician investigators conducting our clinical trials, as well as, investigator-sponsored trials, or even competing products in development that utilize a similar mechanism of action or act through a similar biological disease pathway could cause us or regulatory authorities to interrupt, delay or halt clinical trials and could result in the delay or denial of regulatory approval by the FDA or other regulatory authorities and potential product liability claims.

If we determine that there is a likely causal relationship between a serious adverse event and our product candidate, and such safety event is material or significant enough, it may result in:

• our clinical trial development plan becoming longer and more expensive;

• terminating some of our clinical trials for the product candidates or specific indications affected;

• terminating our clinical trials, as well as, investigator-sponsored trials for the product candidates or specific indications affected;

• regulatory authorities increasing the data and information required to approve our product candidates and imposing other requirements;

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If our manufacturers or we cannot properly manufacture the appropriate volume of product, we may experience delays in development, regulatory approval, launch or successful commercialization.*

Completion of our clinical trials and commercialization of our products require access to, or development of, facilities to manufacture and manage our product candidates at sufficient yields, quality and scale.

Completion of our clinical trials, as well as, investigator-sponsored trials, and commercialization of our products require access to, or development of, facilities to manufacture and manage our product candidates at sufficient yields, quality and scale.

We may need to enter into additional manufacturing agreements and may be unable to do so on satisfactory terms or in a timely manner.

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Manufacturing changes made to one of our drugs or drug candidates, include, but are not limited to, demonstration of comparability to regulatory approved/ in approval products and processes, additional clinical trials, delays in development or commercialization, earlier expiration dates, shorter shelf life, or specification failures, and those changes may materially impact our operations and potential profitability.

This includes the scenario that the change may be unsuccessful and cause delays or other negative impact.

We, and even an experienced third-party manufacturer, may encounter difficulties in production.

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Regulatory authorities may use, among other things, different statistical methods, different endpoints or definitions thereof, and different patient populations or sub-populations.

For example, the Precision Promise study employs a Bayesian statistical methodology for analysis of the study primary endpoint, and while PanCAN consulted with the FDA regarding the study design and statistical methodology, there is a risk that the FDA may employ different statistical methodologies in their review, and may not view positive study results as sufficient for regulatory approval.

Furthermore, while we may seek regulatory advice or agreement in key commercial markets prior to and after application for marketing authorization, regulatory authorities may change their approvability criteria based on the data, their internal analyses and external factors, including discussions with expert advisors.

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We face competition from generics that could enter the market after expiry of our composition of matter patent.

Our composition of matter patent in China expired in the second quarter of 2024, and as of June 30, 2024, the China Health Authority has accepted abbreviated new drug applications for over 20 generic roxadustat applicants and approved two for marketing.

The China Health Authority has accepted abbreviated new drug applications for over 20 generic roxadustat applicants and approved two for marketing.

In addition, we will likely face competition from other companies developing products in the same diseases or indications in which we are developing or commercializing products.

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We have entered into an Evaluation Agreement with Fortis Therapeutics, Inc.

(“Fortis”) under which we rely, in part, on Fortis and its development partners, including University of California, San Francisco, for the continued development of FOR46 (now referred to as “FG-3246”).

(“Fortis”) under which we rely, in part, on Fortis and its development partners, including University of California, San Francisco, for the continued development of FG-3246 (in conjunction with our PET biomarker).

While we control development of FG-3246 up to the 4-year evaluation period, we will be doing so under our investigational new drug application that references Fortis’s investigational new drug application.

If Fortis were unable or unwilling to continue their development efforts or cooperate with ours, our ability to develop FG-3246 would be delayed.

If Fortis were unable or unwilling to continue their development efforts or cooperate with ours, our ability to develop FG-3246 (in conjunction with our PET biomarker) would be delayed.

While we have recently terminated the AstraZeneca U.S./RoW Agreement (except for South Korea), we have active collaboration agreements with respect to the development and commercialization of roxadustat with Astellas and with AstraZeneca in China and South Korea.

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If our preclinical and clinical trial contractors do not properly perform their agreed upon obligations, we may not be able to obtain or may be delayed in receiving regulatory approvals for our product candidates.

We rely heavily on university, hospital, and other institutions and third parties, including the principal investigators and their staff, to carry out our clinical trials in accordance with our clinical protocols and designs.

We also rely on a number of third-party CROs to assist in undertaking, managing, monitoring and executing our ongoing clinical trials.

We expect to continue to rely on CROs, clinical data management organizations, medical institutions and clinical investigators to conduct our development efforts in the future.

We rely heavily on university, hospital, and other institutions and third parties, including the principal investigators and their staff, to carry out our clinical trials, as well as, investigator-sponsored trials in accordance with GCP, clinical protocols, and designs.

We also rely on a number of third-party CROs or other third parties to assist in undertaking, managing, monitoring, imaging and testing, and otherwise executing our ongoing clinical trials.

We expect to continue to rely on CROs, clinical data management organizations, medical institutions, clinical investigators, and other third parties to conduct our development efforts in the future.

We compete with many other companies for the resources of these third parties, and other companies may have significantly more extensive agreements and relationships with such third-party providers, and such third-party providers may prioritize these relationships over ours.

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Despite our reliance on third parties for certain development and management activities, such as clinical trials, we, as the sponsor, remain responsible for ensuring that these activities are conducted in accordance with the FDA and foreign regulatory authorities’ investigational plans and protocols, including GCP requirements.

Regulatory enforcement of GCP requirements can occur through periodic inspections of trial sponsors, principal investigators, and trial sites.

To ensure the quality and accuracy of our data remains uncompromised and reliable, our third-party service providers must comply with applicable GCP requirements, regulations, protocols, and agreements.

Regulatory enforcement of GCP, cGMP, and good laboratory practices requirements can occur through periodic inspections of trial sponsors, principal investigators, and trial sites.

To ensure the quality and accuracy of our data remains uncompromised and reliable, our third-party service providers and clinical investigators or clinical partners must comply with applicable GCP requirements, regulations, protocols, and agreements.

Failures to do so by such third-party partners, or needing to replace such third-party service providers, may delay, suspend or terminate development of our product candidates, result in exclusion of patient data from approval applications, or require additional clinical trials before approval of marketing applications.

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If any third-party manufacturers terminate their engagements with us or fail to perform as agreed, we may be required to identify, qualify, and contract with replacement manufacturers (including entering into technical transfer agreements to share know-how), which process may result in significant costs and delays to our development and commercialization programs.

Furthermore, premature termination of third-party manufacturers may result in additional cost burden for FibroGen.

We may have shortfalls, delays, or excesses in manufacturing.*

We have made certain manufacturing and financial commitments to Samsung Biologics Co., Ltd.

(“Samsung”), and we will no longer require the quantities of pamrevlumab we had expected given our termination of pamrevlumab development.

There is a risk we will still be required to pay certain financial obligations to Samsung or that we are not able to mitigate these risks sufficiently.

In addition, our product candidates and any products that we may develop may compete with other product candidates and products for access and prioritization to manufacture.

Our product candidates and any products that we may develop may compete with other product candidates and products for access and prioritization to manufacture.

Certain third-party manufacturers may be contractually prohibited from manufacturing our product due to non-compete agreements with our competitors or a commitment to grant another party priority relative to our products.

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Due to the limited number of third-party manufacturers with the contractual freedom, expertise, required regulatory approvals and facilities to manufacture our products on a commercial scale, identifying and qualifying a replacement third-party manufacturer would be expensive and time-consuming and may cause delay or interruptions in the production of our product candidates or products, which in turn may delay, prevent or impair our development and commercialization efforts.

We also carry the risk that we may need to pay termination fees to Samsung or other manufacturers in the event that we have to manufacture lower volumes or not at all depending on the results of our clinical trials.

We may be subject to payments to Samsung or other third-party manufacturers to cover portions or all of the committed manufacturing campaigns even if we do not need the material for clinical or commercial usage.

We also carry the risk that we may need to pay termination fees to other manufacturers in the event that we have to manufacture lower volumes or not at all depending on the results of our clinical trials.

We may be subject to payments to other third-party manufacturers to cover portions or all of the committed manufacturing campaigns even if we do not need the material for clinical or commercial usage.

In addition, third-party manufacturers tend to change their upfront fees or postponement/cancelation fees over time or upon initiation of additional contracts, and this may lead to unanticipated financial loss for FibroGen.

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The logistics of our supply chain, which include shipment of materials and intermediates from countries such as China and India add additional time and risk (including risk of loss) to the manufacture of our product candidates.

While we have in the past maintained sufficient inventory of materials, active pharmaceutical ingredient (“API”), and drug product to meet our and our collaboration partners’ needs to date, the lead-time and regulatory approvals required to source from and into countries outside of the U.S.

While we have in the past maintained sufficient inventory of materials, API, and drug product to meet our and our collaboration partners’ needs to date, the lead-time and regulatory approvals required to source from and into countries outside of the U.S.

increase the risk of delay and potential shortages of supply.

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Intellectual property protecting our roxadustat product is either being challenged or will expire at various times in the coming years, raising the possibility of generic competition.

Our composition of matter patent in China expired in the second quarter of 2024 and the China Health Authority has approved two generic roxadustat applications for marketing.

The China Health Authority has approved two generic roxadustat applications for marketing.

The introduction of generic competition for a patented branded medicine typically results in a significant and rapid reduction in net sales and operating income for the branded product because generic manufacturers typically offer their unpatented versions at sharply lower prices.

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However, the patent landscape in competitive product areas is highly complex, and there may be patents of third parties of which we are unaware that may result in claims of infringement.

Accordingly, there can be no assurance that our product candidates do not infringe proprietary rights of third parties, and parties making claims against us may seek and obtain injunctive or other equitable relief, which could potentially block further efforts to develop and commercialize our product candidates, including roxadustat or FG-3246.

Any litigation involving defense against claims of infringement, regardless of the merit of such claims, would involve substantial litigation expense and would be a substantial diversion of management time.

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In addition, approval policies, regulations, or the type and amount of clinical data necessary to gain approval may change during the course of a product candidate’s clinical development and may vary among jurisdictions.

It is possible that roxadustat will not obtain regulatory approval in additional countries or indications.

It is possible that our other product candidates we may discover, in-license or acquire and seek to develop in the future, will not obtain regulatory approval in any particular jurisdiction.

It is possible that our product candidates we may discover, in-license or acquire and seek to develop in the future, will not obtain regulatory approval in any particular jurisdiction or indication.

Our current and future relationships with customers, physicians, and third-party payors are subject to healthcare fraud and abuse laws, false claims laws, transparency laws, and other regulations.

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Additionally, companies that transfer personal data out of the European Economic Area and the United Kingdom to other jurisdictions are subject to scrutiny from regulators, individual litigants, and activities groups.

Our employees and personnel could use generative artificial intelligence (“AI”) technologies to perform certain work, and the disclosure and use of personal data in generative AI technologies is subject to various privacy laws and other privacy obligations.

We are planning to bring artificial intelligence (“AI”) into our IT platforms and services.

However, our competitors might integrate AI faster or more effectively than us, which could put us at a disadvantage.

Additionally, if AI helps create content, analyses, or recommendations that turn out to be flawed or biased, or even just perceived that way, it could hurt our business and financial health.

AI can also lead to cybersecurity issues, potentially exposing personal data of users.

Such incidents could damage our reputation and affect our performance.

As AI technology rapidly evolves, and with the possibility of new regulations, we may need additional resources to ensure we use AI responsibly and ethically to avoid unforeseen negative consequences.

Governments have passed and are likely to pass additional laws regulating generative AI.

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As a public company, we are required to comply with the Sarbanes-Oxley Act and other rules that govern public companies.

We implemented an enterprise resource planning system in the first quarter of 2023, which replaced our existing operating and financial systems, to improve the efficiency of certain financial and transactional processes.

If we experience material weaknesses or otherwise fail to maintain an effective system of internal control over financial reporting, the accuracy and timing of our financial reporting and subsequently our liquidity and our access to capital markets may be adversely affected, we may be unable to maintain or regain compliance with applicable securities laws and the Nasdaq Stock Market LLC listing requirements, we may be subject to regulatory investigations and penalties, investors may lose confidence in our financial reporting, and our stock price may decline.

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In addition, if FibroGen Beijing incurs debt on its own behalf in the future, the agreements governing such debt may restrict its ability to pay dividends or make other distributions to us.

As of June 30, 2024, approximately $39.3 million of our cash and cash equivalents is held in China.

As of September 30, 2024, approximately $51.0 million of our cash and cash equivalents is held in China.

Any capital contributions from us to FibroGen Beijing must be approved by the Ministry of Commerce in China, and failure to obtain such approval may materially and adversely affect the liquidity position of FibroGen Beijing.

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If we are unable to raise capital when needed or on acceptable terms, we may be forced to delay, reduce or eliminate our research and development programs and/or our commercialization efforts.*

We are a biopharmaceutical company with two lead product candidates in clinical development, roxadustat for chemotherapy-induced anemia in China, and FG-3246 for metastatic castration-resistant prostate cancer.

We are a biopharmaceutical company with two lead product candidates in clinical development, roxadustat for chemotherapy-induced anemia in China, and FG-3246 (in conjunction with our PET imaging agent FG-3180) for metastatic castration-resistant prostate cancer.

Most of our revenue generated to date has been based on our collaboration agreements and we have limited commercial drug product sales to date.

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Our net loss for the years ended December 31, 2023, 2022 and 2021 were $284.2 million, $293.7 million and $290.0 million, respectively.

As of June 30, 2024, we had an accumulated deficit of $1.9 billion.

As of June 30, 2024, we had capital resources from cash and cash equivalents of $140.7 million.

In addition, as of June 30, 2024, we had $6.4 million of accounts receivable in our current assets.

As of September 30, 2024, we had an accumulated deficit of $1.9 billion.

As of September 30, 2024, we had capital resources from cash and cash equivalents of $131.0 million.

In addition, as of September 30, 2024, we had $29.0 million of accounts receivable in our current assets.

Despite contractual development and cost coverage commitments from our collaboration partners, AstraZeneca and Astellas, and the potential to receive milestone and other payments from these partners, and despite commercialization efforts for roxadustat for the treatment of anemia caused by chronic kidney disease, we anticipate we will continue to incur losses on an annual basis for the foreseeable future.

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Our failure to become and remain profitable would depress the market price of our common stock and could impair our ability to raise capital, expand our business, diversify our product offerings or continue our operations.

We believe that we will continue to expend substantial resources for the foreseeable future as we continue our operations in China and continue our clinical development efforts on FG-3246.

We believe that we will continue to expend substantial resources for the foreseeable future as we continue our operations in China and continue our clinical development efforts on FG-3246 and FG-3180.

These expenditures will include costs associated with research and development, conducting preclinical trials and clinical trials, obtaining regulatory approvals in various jurisdictions, and manufacturing and supplying products and product candidates for our partners and ourselves.

The outcome of any clinical trial and/or regulatory approval process is highly uncertain and we are unable to fully estimate the actual costs necessary to successfully complete the development and regulatory approval process for our compounds in development and any future product candidates.

Based on our 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, we believe that our existing cash and cash equivalents and accounts receivable, cash flows from commercial sales and sales of drug product, and expected third-party collaboration revenues will allow us to fund our operating plans through at least 12 months from the date of issuance of these consolidated financial statements.

However, we may need additional capital to fund our operations, and our 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).

If we are unable to repatriate additional cash from our China operations or raise additional capital in the U.S., within the next 12 months, we would not be able to comply with our debt covenants under our senior secured term loan facilities that requires a minimum balance of $30 million of unrestricted cash and cash equivalents to be held in accounts in the U.S.

Upon an event of default, our senior secured term loan facilities would become immediately due and payable.

We continue to evaluate measures to repatriate additional cash from our China operations.

There is also the potential that we raise additional funds in the U.S.

at any time through equity, equity-linked, or debt financing arrangements or from other sources.

There can be no assurances that these plans will be successful.

As a result of these factors, we determined that there is substantial doubt about our ability to continue as a going concern within 12 months after the date that the financial statements are issued.

Our operating plans or third-party collaborations may change as a result of many factors, including the success of our development and commercialization efforts, operations costs (including manufacturing and regulatory), competition, and other factors that may not currently be known to us, and we therefore may need to seek additional funds sooner than planned, through offerings of public or private securities, debt financing or other sources, such as revenue interest monetization or other structured financing.

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There is also significant competition, in particular in the San Francisco Bay Area, for the hiring of experienced and qualified personnel, which increases the importance of retention of our existing personnel.

On July 14, 2023 and December 11, 2023, FibroGen approved a reduction to its U.S.

workforce of approximately 32% and 7.4% to lower its operating expenses, causing the loss of valuable skills, experience, and productivity.

On August 2, 2024, FibroGen approved a reduction to its U.S.

workforce of approximately 75% to lower its operating expenses, causing the loss of valuable skills, experience, and productivity.

Furthermore, employee turnover and other risks described above may be exacerbated by the restructuring as well as recent stock performance.

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The complaints filed in the Derivative Litigation asserts claims based on some of the same alleged misstatements and omissions as the Securities Class Action Litigation and seeks, among other things, unspecified damages.

We intend to vigorously defend the claims made in the Securities Class Action Litigation and Derivative Litigation;

While the Securities Class Action Litigation has been settled, we intend to vigorously defend the claims made in the Derivative Litigation;

however, the outcome of these matters cannot be predicted, and the claims raised in these lawsuits may result in further legal matters or actions against us, including, but not limited to, government enforcement actions or additional private litigation.

In the fourth quarter of 2021, FibroGen received a subpoena from the SEC requesting documents related to roxadustat’s pooled cardiovascular safety data.

We have been fully cooperating with the SEC’s investigation.

The SEC followed up with a subpoena for additional documents in the second quarter of 2024.

We have been fully cooperating with the SEC’s investigation and are currently discussing with the SEC for a potential settlement.

Our Board of Directors also received litigation demands from our purported shareholders, asking the Board of Directors to investigate and take action against certain current and former officers and directors of ours for alleged wrongdoing based on the same allegations in the pending derivative and securities class action lawsuits.

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In addition to experiencing a security incident, third parties may gather, collect, or infer sensitive information about us from public sources, data brokers, or other means that reveal competitively sensitive details about our organization and could be used to undermine our competitive advantage or market position.

Our headquarters are located near known earthquake fault zones.

We and some of the third-party service providers on which we depend for various support functions are vulnerable to damage from catastrophic events, such as power loss, natural disasters, terrorism and similar unforeseen events beyond our control.

Our corporate headquarters and other facilities are located in the San Francisco Bay Area, which in the past has experienced severe earthquakes and fires.

After a comprehensive earthquake risk analysis conducted by Marsh Risk, we decided not to purchase earthquake or flood insurance.

Based upon (among other factors) the Marsh Risk analysis, the design and construction of our building, the expected potential loss, and the costs and deductibles associated with earthquake and flood insurance, we chose to self-insure.

However, earthquakes or other natural disasters could severely disrupt our operations, or have a larger cost than expected, and have a material adverse effect on our business, results of operations, financial condition and prospects.

If a natural disaster, power outage or other event occurred that prevented us from using all or a significant portion of our headquarters, damaged critical infrastructure, or otherwise disrupted operations, all critical systems and services can be accessible from the disaster recovery site, but it may be difficult or, in certain cases, impossible for us to continue our business for a substantial period of time.

The disaster recovery and business continuity plans are in draft and are unlikely to provide adequate protection in the event of a serious disaster or similar event.

We may incur substantial expenses as a result of the limited nature of our disaster recovery and business continuity plans, which, particularly when taken together with our lack of earthquake insurance, could have a material adverse effect on our business.

Furthermore, integral parties in our supply chain are operating from single sites, increasing their vulnerability to natural disasters or other sudden, unforeseen and severe adverse events.

If such an event were to affect our supply chain, it could have a material adverse effect on our business.

Our third party service providers may be exposed to natural disasters and other catastrophes.*

Our third party service providers, who we rely on for critical support functions, may be exposed to significant risks from natural disasters and other catastrophic events, including earthquakes, power outages, and unforeseen disruptions.

Many of these providers are in regions prone to earthquakes and fires, such as the San Francisco Bay Area.

These risks could severely impact their operations, infrastructures,or abilities to deliver services, which could in turn disrupt our business continuity and have a material adverse effect on our operations and financial results.

Although we have conducted comprehensive risk assessments, the vulnerability of our third-party partners to these events remains a significant risk, particularly as many operate from single sites with limited disaster recovery capabilities.

Their inability to recover promptly from such events could result in service delays or interruptions, leading to operational challenges, and increased costs for us.

Risks Related to Our Common Stock

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The market price of our common stock has at times experienced price volatility and may continue to be volatile.

For example, during the 12-month period ended June 30, 2024, the closing price of our common stock on The Nasdaq Global Select Market has ranged from $0.38 per share to $2.83 per share.

For example, during the 12-month period ended September 30, 2024, the closing price of our common stock on The Nasdaq Global Select Market has ranged from $0.33 per share to $2.73 per share.

In general, pharmaceutical, biotechnology and other life sciences company stocks have been highly volatile in the current market.

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• results of clinical trials of our product candidates;

• the timing of the release of results of and regulatory updates regarding our clinical trials;

• the timing of the release of results of and regulatory updates regarding our clinical trials, as well as, investigator-sponsored trials;

• the level of expenses related to any of our product candidates or clinical development programs;

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For a description of our pending litigation and SEC investigation, see Note 11, Commitments and Contingencies , to the condensed consolidated financial statements.

There is a risk that our common stock would be delisted due to not meeting the Nasdaq price requirement.*

On September 12, 2024, FibroGen received a letter from the Nasdaq Listing Qualifications Staff of The Nasdaq Stock Market notifying us that for 30 consecutive business days the bid price of FibroGen’s common stock had closed below $1.00 per share, the minimum closing bid price required by the continued listing requirements of Nasdaq listing rule 5450(a)(1).

The notification received has no immediate effect on the listing of FibroGen’s common stock on Nasdaq.

In accordance with listing rule 5810(c)(3)(A), we have 180 calendar days, or until March 11, 2025, to regain compliance with the minimum bid price rule.

To regain compliance, the closing bid price of our common stock must be at least $1.00 per share for a minimum of ten consecutive business days (or such longer period of time as the Nasdaq staff may require in some circumstances, but generally not more than 20 consecutive business days) before March 11, 2025.

If our common stock does not achieve compliance by March 11, 2025, we may be eligible for an additional 180-day period to regain compliance if we meet the continued listing requirement for market value of publicly held shares and all other initial listing standards, with the exception of the bid price requirement, and provide written notice to Nasdaq of our intention to cure the deficiency during the second compliance period, including by effecting a reverse stock split, if necessary.

However, if it appears to the Nasdaq staff that we will not be able to cure the deficiency, or if we do not meet the other listing standards, Nasdaq could provide notice that our common stock will become subject to delisting.

In the event we receive notice that our common stock is being delisted, Nasdaq rules permit us to appeal any delisting determination by the Nasdaq staff to a Hearings Panel.

We expect that our common stock would remain listed pending the Hearing Panel’s decision.

There can be no assurance that we will regain compliance with the minimum bid price rule or maintain compliance with the other listing requirements within the above timelines, or if it is necessary for us to effect a reverse stock split in order for us to regain compliance with the minimum bid price rule we may fail to do so, in which case our common stock may be delisted.

If we appeal a delisting determination by Nasdaq to the Hearing Panel, there can be no assurance that such appeal would be successful.

Delisting from the Nasdaq Global Select Market or any Nasdaq market could make trading our common stock more difficult for investors, potentially leading to declines in our share price and liquidity.

In addition, without a Nasdaq market listing, stockholders may have a difficult time getting a quote for the sale or purchase of our common stock, the sale or purchase of our common stock would likely be made more difficult and the trading volume and liquidity of our common stock could decline.

Delisting from Nasdaq could also result in negative publicity and could also make it more difficult for us to raise additional capital.

The absence of such a listing may adversely affect the value accorded by other parties.

Further, if we are delisted, we would also incur additional costs under state blue sky laws in connection with any sales of our securities.

These requirements could severely limit the market liquidity of our common stock and the ability of our stockholders to sell our common stock in the secondary market.

If our common stock is delisted by Nasdaq, our common stock may be eligible to trade on an over-the-counter quotation system, such as the OTCQB market, where an investor may find it more difficult to sell our common stock or obtain accurate quotations as to the market value of our common stock.

We cannot assure you that our common stock, if delisted from Nasdaq, will be listed on another national securities exchange or quoted on an over-the counter quotation system.

If our common stock is delisted, it may come within the definition of “penny stock” as defined in the Exchange Act, and would be covered by Rule 15g-9 of the Exchange Act.

That rule imposes additional sales practice requirements on broker-dealers who sell securities to persons other than established customers and accredited investors.

For transactions covered by Rule 15g-9, the broker-dealer must make a special suitability determination for the purchaser and receive the purchaser’s written agreement to the transaction prior to the sale.

Consequently, Rule 15g-9, if it were to become applicable, would affect the ability or willingness of broker-dealers to sell our securities, and accordingly would affect the ability of stockholders to sell their securities in the public market.

These additional procedures could also limit our ability to raise additional capital in the future.

We may engage in acquisitions that could dilute stockholders and harm our business.

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What changed 10-Q

Item 1. Legal Proceedings