What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-05-12 compared with 2024-11-12 · 241 added, 282 removed, 216 unchanged (71% of the section changed)

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

You should read the following discussion and analysis of our financial condition and results of operations in conjunction with the condensed consolidated financial statements and the notes thereto included elsewhere in this Quarterly Report on Form 10-Q, and in our Securities and Exchange Commission (“SEC”) filings, including our Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC on February 26, 2024 (“2023 Form 10-K”).

You should read the following discussion and analysis of our financial condition and results of operations in conjunction with the condensed consolidated financial statements and the notes thereto included elsewhere in this Quarterly Report on Form 10-Q, and in our Securities and Exchange Commission (“SEC”) filings, including our Annual Report on Form 10-K for the year ended December 31, 2024 filed with the SEC on March 17, 2025 (“2024 Form 10-K”).

FORWARD-LOOKING STATEMENTS

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BUSINESS OVERVIEW

We are headquartered in San Francisco, California, with subsidiary offices in Beijing and Shanghai, People’s Republic of China (“China”).

FibroGen, Inc.

(“FibroGen” or the “Company”) is developing and commercializing a diversified pipeline of novel therapeutics that work at the frontier of cancer biology and anemia.

Roxadustat is an oral small molecule inhibitor of hypoxia-inducible factor prolyl hydroxylase (“HIF-PH”) 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 in clinical development for chemotherapy-induced anemia (“CIA”) in China.

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.

(“FibroGen” or the “Company”) is a biopharmaceutical company focused on development of novel therapies at the frontiers of cancer biology and anemia.

We are developing FG-3246, a potential first-in-class antibody-drug conjugate (“ADC”) targeting CD46, for the treatment of metastatic castration-resistant prostate cancer (“mCRPC”) and potentially other cancers.

This program also includes the development of FG-3180, an associated CD46-targeted positron emission tomography (“PET”) biomarker and imaging agent.

We anticipate initiation of a Phase 2 monotherapy dose optimization study of FG-3246 for the treatment of mCRPC, along with the exploratory analysis of FG-3180, in the third quarter of 2025.

We and our collaboration partners have developed roxadustat (爱瑞卓 ® , EVRENZO TM ), which is currently approved in the People’s Republic of China (“China”), Europe, Japan, and numerous other countries for the treatment of anemia in chronic kidney disease patients on dialysis and not on dialysis.

On February 20, 2025, we entered into a share purchase agreement (the “Share Purchase Agreement”) with AstraZeneca Treasury Limited pursuant to which we and our subsidiary FibroGen China Anemia Holdings, Ltd.

agreed to sell all of the issued and outstanding equity interests of FibroGen International (Hong Kong) Ltd.

(“FibroGen International”) to AstraZeneca Treasury Limited.

AstraZeneca is our long-time commercialization partner for roxadustat in greater China and South Korea.

This sale includes all of our roxadustat assets in China, including FibroGen International’s subsidiary FibroGen (China) Medical Technology Development Co., Ltd and its 51.1% interest in Beijing Falikang Pharmaceutical Co.

(“Falikang”).

The transaction is expected to close in the third quarter of 2025, and is subject to customary closing conditions and closing deliverables, including receipt of regulatory approval from the China State Administration for Market Regulation.

FibroGen has retained the rights to roxadustat in the United States of America (U.S.), Canada, Mexico, and in all markets not held by AstraZeneca or licensed to Astellas Pharma Inc.

(“Astellas”).

Roxadustat is not approved for commercialization in any indication in the United States, Canada, or Mexico.

Astellas is commercializing roxadustat (EVRENZO TM ) in Europe and Japan to treat anemia under two development and commercialization license agreements:

one for Japan, and one for Europe, the Commonwealth of Independent States, the Middle East and South Africa.

We continue to evaluate a development plan for roxadustat in anemia associated with lower-risk MDS, a high-value indication with significant unmet medical need.

We filed our Type-C meeting request with the U.S.

Food and Drug Administration (“FDA”) in the second quarter of 2025 and expect feedback on the potential path forward for roxadustat in anemia associated with lower risk MDS in the third quarter of 2025.

Financial Highlights

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

(in thousands, except for per share data)

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Operating costs and expenses

Net loss per share - basic and diluted

September 30, 2024

Loss from continuing operations

Loss from continuing operations per share - basic and diluted

March 31, 2025

December 31, 2024

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Cash and cash equivalents

Short-term investments

Accounts receivable

Our revenue for the three and nine months ended September 30, 2024 included primarily the revenue recognized related to the following, respectively:

• $46.2 million and $126.4 million from roxadustat commercial sales in China, mostly from sales to Beijing Falikang Pharmaceutical Co.

(“Falikang”);

• $0.4 million and $1.5 million of development and other revenue recognized mainly under our collaboration agreements with our partners Astellas and AstraZeneca;

• A net reduction of $0.3 million and $0.7 million to drug product revenue related to active pharmaceutical ingredient (“API”) deliveries to Astellas Pharma Inc.

Our revenue for the three months ended March 31, 2025 included primarily the drug product revenue of $2.6 million related to active pharmaceutical ingredient (“API”) deliveries to Astellas Pharma Inc.

(“Astellas”).

in addition, $25.7 million cumulative catch-up net adjustment in the drug product revenue, for the nine months ended September 30, 2024, as a result of terminating the AstraZeneca AB (“AstraZeneca”) U.S./RoW Agreement, effective as of February 25, 2024 (“AstraZeneca Termination and Transition Agreement”), with the exception of South Korea.

As a comparison, our revenue for the three and nine months ended September 30, 2023 included primarily the revenue recognized related to the following, respectively:

• $29.4 million and $77.4 million of net product revenue from roxadustat commercial sales in China;

• $6.0 million and $13.8 million of development revenue recognized under our collaboration agreements with our partners Astellas and AstraZeneca;

• $4.0 million regulatory milestone recognized during the three months ended September 30, 2023, under AstraZeneca China Agreement (defined further below) associated with the renewal of our right to continue to market Roxadustat in China.

Of this amount, $2.7 million was recognized as license revenue, $0.8 million was recognized as development revenue and the remainder was included in deferred revenue;

• $1.3 million and $17.7 million of drug product revenue related to API deliveries to Astellas;

• $1.0 million upfront payment for the second quarter of 2023 and a $3.0 million milestone payment based on Eluminex Biosciences (Suzhou) Limited (“Eluminex”) implanting a biosynthetic cornea in the first patient of its clinical trial in China and a $3.0 million manufacturing related milestone payment in the first quarter of 2023 for the first quarter of 2023, recognized under our license agreement and amendments with Eluminex.

Operating costs and expenses for the three and nine months ended September 30, 2024 decreased compared to the same periods a year ago primarily as a result of the net effect of the following, respectively:

• $18.8 million and $50.9 million lower clinical trial expenses primarily associated with the termination of pamrevlumab programs during the current year period responding to the reported results in July 2024;

• $12.5 million and $37.0 million lower employee-related expenses primarily due to the impact from reduction in force actions in August 2024 and July 2023, and cost control efforts;

• $5.9 million and $13.1 million lower outside services expenses due to termination of pamrevlumab programs, wind down of remaining obligations and cost control efforts;

• $2.4 million and $8.6 million lower facilities-related expenses due to cost control efforts and lower depreciation expense as certain property and equipment reached their useful lives in prior year period, offset by the loss on disposal of property and equipment associated with efforts to streamline operations during the third quarter of 2024;

• $2.8 million and $8.2 million lower drug development expenses associated with drug substance activities and logistic expenses related to pamrevlumab programs which were completed and terminated;

• $1.9 million and $5.1 million lower legal expenses primarily due to lower activities in corporate legal, legal proceedings and intellectual properties;

• $1.8 million and $16.4 million lower stock-based compensation primarily resulting from significantly lower stock price and cancellations of stock options and restricted stock units due to reduced headcount;

• $24.6 million one-time, non-cash charge of acquired in-process research and development (“IPR&D”) expenses, in the nine-month period in prior year, associated with the exclusive license for FG-3246 from Fortis Therapeutics, Inc.

(“Fortis”) and the acquisition of Fortis;

• $21.1 million one-time cost of goods sold recorded for the nine months ended September 30, 2024 correspondingly to the above-mentioned drug product revenue resulting from the AstraZeneca Termination and Transition Agreement related to the AstraZeneca U.S./RoW Agreement, as defined further below;

• $5.9 million higher restructuring charge recorded in the third quarter of 2024 related to the reduction in force plan in August 2024 with larger scale as compared to the reduction in force plan in July 2023.

For the three months ended September 30, 2024, we had a net loss of $17.1 million, or a net loss per basic and diluted share of $0.17, as compared to a net loss of $63.6 million, or a net loss per basic and diluted share of $0.65, for the same period a year ago, and for the nine months ended September 30, 2024, we had a net loss of $65.6 million, or a net loss per basic and diluted share of $0.66, as compared to a net loss of $228.0 million, or a net loss per basic and diluted share of $2.35, for the same period a year ago, due to increases in revenue and decreases in operating costs and expenses as discussed above.

Cash and cash equivalents, investments, and accounts receivable totaled $160.0 million at September 30, 2024, a decrease of $88.1 million from December 31, 2023, primarily due to the cash used in operations as discussed under the Liquidity and Capital Resources section below.

As a comparison, our revenue for the three months ended March 31, 2024 included primarily the revenue recognized related to the following, respectively:

• $25.7 million cumulative catch-up net adjustment in the drug product revenue, as a result of terminating the AstraZeneca U.S./RoW Agreement (as defined below), effective as of February 25, 2024 (“AstraZeneca Termination and Transition Agreement”), with the exception of South Korea.

• $1.2 million of net reduction to drug product revenue related to API deliveries to Astellas;

• $0.8 million of development revenue recognized under our collaboration agreements with our partners Astellas and AstraZeneca.

Operating costs and expenses for the three months ended March 31, 2025 decreased compared to the same period a year ago primarily as a result of the net effect of the following:

• $21.1 million one-time cost of goods sold recorded for the three months ended March 31, 2024 correspondingly to the above-mentioned drug product revenue resulting from the AstraZeneca Termination and Transition Agreement related to the AstraZeneca U.S./RoW Agreement, as defined further below;

• $11.5 million lower employee-related expenses primarily due to the impact from reduction in force action in August 2024 and cost control efforts;

• $6.9 million lower clinical trial expenses primarily associated with the termination of pamrevlumab programs during the second half of 2024 responding to the topline clinical data results we reported in July 2024;

• $6.5 million lower facilities-related expenses due to cost control efforts including the lease termination in the third quarter of 2024;

• $5.8 million lower stock-based compensation primarily resulting from significant lower stock price and cancellations of stock options and restricted stock units due to reduced headcount;

• $2.4 million lower drug development expenses associated with drug substance activities and logistic expenses related to pamrevlumab programs which were completed and terminated.

For the three months ended March 31, 2025, we had a loss from continuing operations of $16.8 million, or a loss per basic and diluted share of $0.16, as compared to a loss of $49.0 million, or a loss per basic and diluted share of $0.49, for the same period a year ago, due to decreases in operating costs and expenses offset by decreases in revenue as discussed above.

Cash and cash equivalents and accounts receivable for continuing operations totaled $33.8 million at March 31, 2025, a decrease of $17.2 million from December 31, 2024.

Consolidated cash and cash equivalents and accounts receivable for both continuing operations and discontinued operations totaled $128.4 million at March 31, 2025, an increase of $7.3 million from December 31, 2024, primarily due to the cash provided by operations as discussed under the Liquidity and Capital Resources section below.

Commercial, Development and Research Programs

The following is an overview of our clinical, commercial, and research programs.

Roxadustat for the Treatment of Anemia in Chronic Kidney Disease

Roxadustat is our commercial-stage product, an oral small molecule inhibitor of HIF-PH activity that acts by stimulating the body’s natural pathway of erythropoiesis, or red blood cell production.

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

In China, roxadustat (tradename:

爱瑞卓 ® ) continues to see significant volume growth in the treatment of anemia caused by CKD in non-dialysis and dialysis patients.

In the third quarter of 2024, roxadustat achieved an over 34% increase in sales volume relative to the third quarter of 2023.

As of August 2024, roxadustat was the top CKD anemia brand in China with approximately 45% value share within the segment of erythropoiesis stimulating agents and HIF-PH inhibitors.

Roxadustat for the Treatment of Chemotherapy-Induced Anemia

In May 2023, we announced positive topline data from our Phase 3 clinical study of roxadustat for treatment of anemia in patients receiving concurrent chemotherapy treatment for non-myeloid malignancies in China.

Roxadustat (爱瑞卓 ® ) demonstrated non-inferiority compared to recombinant erythropoietin alfa (SEPO ® ) on the primary endpoint of change in hemoglobin level from baseline to the average level during Weeks 9-13.

In the preliminary safety analysis, the adverse event profile of roxadustat was generally consistent with previous findings and supportive of a positive benefit risk in this patient population.

A total of 159 patients with non-myeloid malignancy (solid tumor) with a baseline hemoglobin level at or below 10 g/dL were enrolled into this Phase 3, randomized, open-label, active-controlled study investigating the efficacy and safety of roxadustat for treatment of CIA.

Patients were randomly assigned roxadustat or erythropoietin alfa three times per week, during a treatment period of 12 weeks, with an additional 4-week follow-up period.

We recently presented results from this study in an oral presentation at the European Society for Medical Oncology Congress 2023.

Our supplemental new drug application for roxadustat in CIA was accepted by the China Health Authority in August 2023, and we currently expect an approval decision in early 2025.

Although CIA is one of the most common side effects of chemotherapy, it is frequently undertreated.

CIA can adversely affect long-term patient outcomes, as anemia limits both quality of life and the ability of patients to continue chemotherapy treatment.

The incidence and severity of CIA depends on a variety of factors.

This includes the type of cancer and the treatment, including the type of chemotherapy, schedule, and intensity of therapy.

It also depends on whether the patient has received prior myelosuppressive chemotherapy, radiation therapy, or both.

Almost 80% of cancer patients in China receiving chemotherapy develop anemia.

Approximately 50% of cancer patients in China receiving chemotherapy develop severe anemia that merits treatment (hemoglobin under 10g/dL).

In China, over 3 million cancer patients undergo chemotherapy.

Prostate Cancer;

Potential Additional Cancer Indications

In 2023, we obtained an exclusive license to develop FG-3246 (previously FOR46) in metastatic castration-resistant prostate cancer (“mCRPC”) and other cancer indications.

FG-3246 is a first-in-class antibody-drug conjugate targeting a novel epitope on CD46 that is expressed at high levels in certain tumor types with limited expression in most normal tissues.

The cytotoxic payload of FG-3246 is monomethyl auristatin E, an anti-mitotic agent that has been utilized in four commercially approved antibody-drug conjugate drugs.

FG-3246 demonstrated monotherapy efficacy in a Phase 1 clinical study in heavily-pretreated (and not biomarker selected) patients with mCRPC.

Results included a median radiographic progression-free survival of 8.7 months and a PSA50 response in 36% of evaluable patients.

For RECIST evaluable patients, 20% met the criteria of a partial response, or measurable reduction in tumor size of ≥ 30%, with a median duration of response of 7.5 months.

FG-3246 demonstrated an acceptable safety profile, with adverse events consistent with those observed in other antibody drug conjugate therapies with a monomethyl auristatin E payload, and included infusion related reactions, fatigue, weight loss, neutropenia, and peripheral neuropathy.

We have met with the FDA to discuss the development pathway of FG-3246, and we anticipate initiation of a Phase 2 monotherapy dose optimization study of FG-3246 for the treatment of mCRPC in the first quarter of 2025.

We also plan to commence a sub-study of FG-3180, our positron emission tomography (“PET”) imaging agent.

FG-3246 and FG-3180 in Metastatic Castration Resistant Prostate Cancer

Disease Overview

Prostate cancer is the second most common malignancy in men, contributing significantly to male mortality rates.

Approximately 13% of men will be diagnosed with prostate cancer at some point during their lifetime.

There are about 65,000 drug treatable mCRPC cases in the U.S.

annually and 5-year survival in mCRPC is approximately 30%.

Current Standard of Care

Treatment choice in first and second line mCRPC significantly depends on patients’ prior treatments.

Androgen receptor signaling inhibitors (“ARSIs”) and chemotherapy are the preferred treatments in patients who have not been exposed to either in earlier lines of therapy.

Most patients previously treated with an ARSI for metastatic hormone-sensitive prostate cancer (“mHSPC”) receive chemotherapy in first-line mCRPC.

Rechallenge with an alternative ARSI is associated with limited benefit in this setting.

For the 25-30% of patients with homologous recombination repair mutation (“HRRm”), poly (ADP-ribose) polymerase (“PARP”) inhibitors are the standard of care for mCRPC patients.

Recent approvals of prostate-specific membrane antigen (“PSMA”)-targeted radiopharmaceuticals in the post-ARSI and post-chemotherapy setting have diversified treatment options in advanced mCRPC.

Furthermore, PSMA-PET has been validated as standard of care diagnostic in prostate cancer, while LOCAMETZ or an approved PSMA-11 imaging agent are approved to select patients for treatment with Pluvicto (lutetium Lu 177 vipivotide tetraxetan).

FibroGen is developing FG-3246 in the post-ARSI, pre-chemotherapy mCRPC setting.

This is an area of high unmet need, where radiographic progression free survival is approximately 5.6-6 months after switching to a different ARSI, and approximately 8 months with chemotherapy.

Novel mechanisms of action that extend survival are critical in this setting as well as biomarker driven treatment approaches.

FG-3246 and the potential patient selection biomarker FG-3180 are being developed to address these unmet medical needs.

FG-3246 and FG-3180 for the Treatment of mCRPC

We are developing FG-3246 in mCRPC and exploring other potential cancer indications.

FG-3246 is a potential first-in-class ADC targeting a novel epitope on CD46.

In addition to CD46 being expressed at high levels in certain tumor types with limited expression in most normal tissues, CD46 is a cell receptor that induces internalization upon antibody binding, which makes it an ideal target for an ADC.

The cytotoxic payload of FG-3246 is monomethyl auristatin E (“MMAE”), an anti-mitotic agent that has been utilized in four commercially approved antibody-drug conjugate drugs.

As part of this Phase 2 study, patients will also receive FG-3180, our PET imaging agent.

FG-3180 is a diagnostic radiopharmaceutical utilizing a radiolabeled version of our CD46 targeting antibody in FG-3246 to assess the correlation between CD46 expression and the response to FG-3246.

In March 2025, FibroGen announced the peer-reviewed publication titled “A Phase 1, First-in-Human Study of FOR46 (FG-3246), an Immune-Modulating Antibody-Drug Conjugate Targeting CD46, in Patients with Metastatic Castration Resistant Prostate Cancer” in the Journal of Oncology.

The manuscript included the complete results from the Fortis Therapeutics, Inc.

(“Fortis”)-sponsored Phase 1 study of FG-3246 in heavily-pretreated, biomarker un-selected patients with mCRP.

Key efficacy highlights observed in the RECIST-evaluable set of 25 patients include:

(1) confirmed objective response rate was 20% with median duration of response of 7.5 months, (2) all objective responses observed at a starting dose of 2.7 mg/kg or higher, and (3) disease control rate was 80% with duration of treatment exceeding 24 weeks in 12 patients (48%);

(4) PSA50 response rate of 36% in 39 evaluable patients (of eight evaluable patients who received docetaxel in the castration-sensitive setting, four (50%) achieved a confirmed PSA50 response);

(5) median radiographic progression-free survival of 8.7 months in all 40 subjects in the efficacy analysis set;

(6) of 15 evaluable baseline tumors, 12 (80%) were positive for CD46 expression by immunohistochemistry;

and (7) FG-3246 responders were found to have a significantly higher frequency of effector T cells and lower frequency of immunosuppressive myeloid cells.

In May 2024, the University of California, San Francisco (“UCSF”) presented positive interim results from the dose escalation portion of the investigator-sponsored Phase 1b/2 study of FG-3246 in combination with enzalutamide in patients with mCRPC at the 2024 American Society of Clinical Oncology Annual Meeting.

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The primary endpoint was determination of the maximally tolerated dose of FG-3246 in combination with enzalutamide.

The combination treatment demonstrated an encouraging preliminary estimate of median radiographic progression free survival of 10.2 months.

The combination treatment demonstrated an encouraging preliminary estimate of median radiographic progression-free survival (“rPFS”) of 10.2 months.

The maximally tolerated dose was established at 2.1 mg/kg adjusted body weight, with primary G-CSF prophylaxis, in combination with enzalutamide 160 mg/day.

The most frequent adverse events were consistent with other monomethyl auristatin E-based antibody drug conjugates and included fatigue, weight loss, elevated transaminases, neutropenia, and peripheral neuropathy.

We expect topline results from the Phase 2 portion of this study of FG-3246 in combination with enzalutamide in the first half of 2025.

The most frequent adverse events were consistent with other MMAE-based ADCs and included fatigue, weight loss, elevated transaminases, neutropenia, and peripheral neuropathy.

We expect topline results from the Phase 2 portion of this study, including data on the CD46 targeted PET imaging agent FG-3180, in the fourth quarter of 2025.

ROXADUSTAT IN ANEMIA ASSOCIATED WITH MYELODYSPLASTIC SYNDROMES

FibroGen maintains its rights to Roxadustat in the United States and in all markets not licensed to Astellas.

The Company continues to evaluate a development plan for Roxadustat in anemia associated with lower-risk myelodysplastic syndromes (“MDS”), a high-value indication with significant unmet medical needs.

MDS are a diverse group of bone marrow disorders characterized by ineffective production of healthy blood cells and premature destruction of blood cells in the bone marrow, leading to anemia.

In most MDS patients, the cause of the disease is unknown.

The diagnosed prevalence of MDS in the U.S.

is estimated to be between 60,000 and 170,000, and continues to rise as more therapies become available and patients are living longer with MDS.

Annual incidence rates are estimated to be 4.9/100,000 adults in the U.S., and 1.51/100,000 adults in China.

Anemia is the most common clinical presentation in MDS, seen in approximately 80% of MDS patients, and produces symptoms of fatigue, weakness, exercise intolerance, shortness of breath, dizziness, and cognitive impairment.

Limitations of the Current Standard of Care for Anemia in Myelodysplastic Syndromes

Stem cell transplant is the only potentially curative therapy for MDS, but it is not feasible in most patients due to their advanced age and frailty.

The high rate of severe anemia leaves recurring red blood cell transfusions as the mainstay of care in MDS patients.

Transfusion can result in direct organ damage through transfusional iron overload.

Transfusion-dependent MDS patients suffer higher rates of cardiac events, infections, and transformation to acute leukemia, a decreased overall survival rate when compared with non-transfused patients with MDS, and decreased survival compared to an age-matched elderly population.

Patients receiving red blood cell transfusions may require an iron chelator in order to address toxic elements of iron overload such as lipid peroxidation and cell membrane, protein, DNA, and organ damage.

Lower-risk MDS patients represent approximately 77% of the total diagnosed MDS population.

National Comprehensive Cancer Network (“NCCN”) guidelines recommend the use of erythropoiesis-stimulating agents (“ESAs”), luspatercept and imetelstat in lower risk MDS patients, depending on patients’ treatment history, serum erythropoietin (“EPO”) levels and ring sideroblast status .

Currently available treatment options are effective in only ~50% patients and they are challenging to dose-calibrate and can only be administered via subcutaneous injection or through IV infusion.

New strategies that provide durable response and the convenience of oral administration are highly desired in managing patients with MDS.

Market Opportunity for Roxadustat in Myelodysplastic Syndromes

We believe there is a significant need for a safe, effective, and convenient option to address anemia in patients with lower-risk MDS.

Roxadustat, our orally administered small molecule hypoxia-inducible prolyl hydroxylase (“HIF-PH”) inhibitor, stimulates the body’s natural mechanism of red blood cell production and iron hemostasis based on cellular-level oxygen-sensing and iron-regulation mechanisms.

Unlike ESAs which are limited to providing exogenous EPO, roxadustat activates a coordinated erythropoietic response in the body that includes the stimulation of red blood cell progenitors, an increase in the body’s production of endogenous EPO, and an increase in iron availability for hemoglobin synthesis, which we believe is important in a broad range of MDS patients.

Moreover, in anemia of chronic kidney disease (“CKD”), roxadustat has demonstrated the ability in clinical trials to increase and maintain hemoglobin levels in the presence of inflammation as measured by C-reactive protein (“CRP”), where ESAs have shown limited effect.

We believe that roxadustat has the potential to replicate this result in MDS anemia patients, where it is not uncommon for patients to present with autoimmune and inflammatory conditions.

Phase 3 Clinical Trial in Myelodysplastic Syndromes

Topline 28-week data from MATTERHORN, our Phase 2/3 placebo-controlled, double-blind clinical trial of roxadustat for the treatment of anemia in MDS, was presented in the fourth quarter of 2023 at the American Society of Hematology annual conference.

More patients in the roxadustat arm (47.5% of 80 patients) achieved transfusion independence for 56 consecutive days (within the first 28 weeks) than the placebo arm (33.3% of 57 patients);

however, the p-value was not significant.

However, in a post-hoc analysis of patients with higher transfusion burden (2 or more units of packed red blood cells every 4 weeks), 36.1% of the 36 roxadustat patients achieved transfusion independence, versus 11.5% of the 26 patients in the placebo arm (p=0.047).

We filed our Type-C meeting request with the FDA in the second quarter of 2025 and expect feedback on the potential path forward for roxadustat in anemia associated with lower-risk MDS in the third quarter of 2025.

Roxadustat in Anemia of Chronic Kidney Disease

Roxadustat is our commercial-stage product, an oral small molecule inhibitor of HIF-PH activity that acts by stimulating the body’s natural pathway of erythropoiesis, or red blood cell production.

In collaboration with our partners Astellas and AstraZeneca, roxadustat (爱瑞卓 ® , EVRENZO TM ) is approved to treat anemia in China, Europe, Japan, and numerous other countries.

China – Roxadustat Commercial Program

On February 20, 2025, we and our subsidiary FibroGen China Anemia Holdings, Ltd.

entered into a Share Purchase Agreement with AstraZeneca Treasury Limited, a subsidiary of AstraZeneca plc, pursuant to which we agreed to sell all of the issued and outstanding equity interests of FibroGen International for an aggregate purchase price of approximately $185 million, comprised of $85 million in cash for the enterprise value of FibroGen International, plus an additional cash amount equal to the net cash held in China by FibroGen International and its subsidiaries, currently anticipated to be approximately $100 million, as of the closing.

This sale includes all of our roxadustat assets in China, including FibroGen International’s subsidiary FibroGen (China) Medical Technology Development Co., Ltd and its 51.1% interest in Falikang.

AstraZeneca is our long-time commercialization partner for roxadustat in greater China and South Korea.

Upon the closing, we will assign to them all rights to roxadustat in China, Hong Kong, and Macao, including rights to manufacture, develop, distribute, and commercialize roxadustat.

U.S., Europe, Japan and Rest of World - Roxadustat Program

FibroGen has retained the rights to roxadustat in the U.S., Canada, Mexico, and in all markets not held by AstraZeneca or licensed to Astellas.

Roxadustat is not approved for commercialization in any indication in the U.S., Canada, or Mexico.

Astellas is commercializing roxadustat (EVRENZO TM ) in Europe and Japan to treat anemia under two development and commercialization license agreements:

one for Japan, and one for Europe, the Commonwealth of Independent States, the Middle East and South Africa.

Preclinical Portfolio

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Exclusive License from and Option to Acquire Fortis Therapeutics

On May 5, 2023, we entered into an exclusive option agreement to acquire Fortis with its novel Phase 1 antibody-drug conjugate, FG-3246 (previously FOR46), that targets a novel epitope on CD46 preferentially expressed on certain cancer cells.

In May 2023, we entered into an exclusive option agreement to acquire Fortis with its novel Phase 1 antibody-drug conjugate, FG-3246 (previously FOR46), that targets a novel epitope on CD46 preferentially expressed on certain cancer cells.

FG-3246 is in development for the treatment of mCRPC with potential applicability in other solid tumors and hematologic malignancies.

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In April 2006, we entered into a separate collaboration agreement with Astellas for roxadustat for the treatment of anemia in Europe, the Commonwealth of Independent States, the Middle East, and South Africa (“Astellas Europe Agreement”).

Under these agreements, the aggregate amount of consideration received through September 30, 2024 totaled $790.1 million.

Under these agreements, the aggregate amount of consideration received through March 31, 2025 totaled $790.1 million.

Based on the current development plans for roxadustat in Japan and Europe, we do not expect to receive most or all of the additional potential milestones under the Astellas Japan Agreement or the Astellas Europe Agreement.

In 2018, we and Astellas entered into an amendment to the Astellas Japan Agreement that allows Astellas to manufacture roxadustat drug product for commercialization in Japan (the “Astellas Japan Amendment”).

The related drug product revenue was $(1.4) million and $0.7 million for the three months ended September 30, 2024 and 2023, and ($3.9) million and $16.2 million for the nine months ended September 30, 2024 and 2023, respectively.

The related drug product revenue was $1.8 million and $(2.2) million for the three months ended March 31, 2025 and 2024, respectively.

During the first quarter of 2021, we entered into an EU Supply Agreement with Astellas under the Astellas Europe Agreement to define general forecast, order, supply and payment terms for Astellas to purchase roxadustat bulk drug product from FibroGen in support of commercial supplies (the “Astellas EU Supply Agreement”).

The related drug product revenue was $1.1 million and $0.6 million for the three months ended September 30, 2024 and 2023, and $3.2 million and $1.5 million for the nine months ended September 30, 2024 and 2023, respectively.

The related drug product revenue was $0.8 million and $1.0 million for the three months ended March 31, 2025 and 2024, respectively.

In July 2013, we entered into a collaboration agreement with AstraZeneca for roxadustat for the treatment of anemia in the U.S.

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In July 2013, through our China subsidiary and related affiliates, we entered into a collaboration agreement with AstraZeneca for roxadustat for the treatment of anemia in China (the “AstraZeneca China Agreement”).

Under the AstraZeneca agreements, the aggregate amount of consideration received through September 30, 2024 totaled $77.2 million.

Under the AstraZeneca agreements, the aggregate amount of consideration received through March 31, 2025 totaled $81.2 million.

Under the AstraZeneca China Agreement, which is conducted through FibroGen China Anemia Holdings, Ltd., FibroGen (China) Medical Technology Development Co., Ltd.

(“FibroGen Beijing”), and FibroGen International (Hong Kong) Limited (collectively, (“FibroGen China”), the commercial collaboration was structured as a 50/50 profit share, which was amended by the AstraZeneca China Amendment in the third quarter of 2020, as discussed and defined below in AstraZeneca China Amendment .

On September 18, 2023, we 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 and was unbilled as of December 31, 2023, recorded as a contract asset and fully netted against the contract liabilities (deferred revenue) related to the AstraZeneca China Agreement.

During the three months ended September 30, 2024, based on the arrangements under the settlement agreements entered in September 2024 between FibroGen China and AstraZeneca to settle certain historical items, the $4.0 million milestone was billed and included in the accounts receivable as of September 30, 2024.

AstraZeneca China Amendment

In July 2020, FibroGen China and AstraZeneca entered into an amendment, effective July 1, 2020, 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 September 2020, FibroGen Beijing and AstraZeneca completed the establishment of a jointly owned entity, Falikang, which performs roxadustat distribution, as well as conducts sales and marketing through AstraZeneca.

Substantially all direct roxadustat product sales to distributors in China are made by Falikang, while we expect that FibroGen Beijing will continue to sell roxadustat product directly in limited areas in China.

Under the AstraZeneca China Amendment, in 2020, FibroGen Beijing and AstraZeneca completed the establishment of a jointly owned entity, Falikang, which performs roxadustat distribution, as well as conducts sales and marketing through AstraZeneca.

We account for our investment in Falikang under the equity method, and Falikang is not consolidated into our consolidated financial statements.

Our proportionate share of the reported profits or losses of Falikang, is included in the discontinued operations in the condensed consolidated statement of operations, and the investment in unconsolidated subsidiary is included the held for sale assets in the condensed consolidated balance sheet.

See Note 2, Discontinued Operations , to the condensed consolidated financial statements for details.

Product revenue, net, which is included in the discontinued operations, consists primarily of revenues from sales of roxadustat commercial product to Falikang.

Substantially all direct roxadustat product sales to distributors in China are made by Falikang, while FibroGen Beijing continues to sell roxadustat product directly in limited areas in China.

FibroGen Beijing manufactures and supplies commercial product to Falikang based on an agreed upon transfer price, which includes gross transaction price, net of calculated profit share.

Revenue is recognized upon the transfer of control of commercial products to Falikang in an amount that reflects the allocation of transaction price of the China manufacturing and supply obligation (“China performance obligation”) to the performance obligation satisfied during the reporting period.

We recognized net product revenue of $46.2 million and $29.4 million for the three months ended September 30, 2024 and 2023, and $126.4 million and $77.4 million for the nine months ended September 30, 2024 and 2023, respectively, majority of which were from the sales to Falikang.

We recognize revenue upon the transfer of control of commercial products to Falikang in an amount that reflects the allocation of transaction price of the China manufacturing and supply obligation (“China performance obligation”) to the performance obligation satisfied during the reporting period.

For our direct sales of commercial drug product, we recognize revenue when control of the promised good is transferred to the customer in an amount that reflects the consideration that we expect to be entitled to in exchange for the product.

We recognized net product revenue of $39.8 million and $30.5 million for the three months ended March 31, 2025 and 2024, respectively, majority of which were from the sales to Falikang.

RESULTS OF OPERATIONS

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

(dollars in thousands)

License revenue

Development and other revenue

Product revenue, net

Drug product revenue, net

Total revenue

Under our revenue recognition policy, license revenue includes amounts from upfront, non-refundable license payments and amounts allocated pursuant to the standalone selling price method from other consideration received during the respective periods.

This revenue is generally recognized as deliverables are met and services are performed.

Development revenue includes co-development and other development related services.

We recognize development services as revenue in the period in which they are billed to our partners, excluding China.

As of September 30, 2024, we do not expect to incur significant future co-development services.

As of March 31, 2025, we do not expect to incur significant future co-development services.

For China co-development services, we defer revenue until we begin to transfer control of the manufactured commercial product to AstraZeneca, which commenced in the first quarter of 2021, and we expect to continue through 2033, which reflects our best estimates.

Other revenues consist of contract manufacturing revenue, patent transfer and sales of research and development material, which have not been material for any of the periods presented.

We recognize product revenue when our customer obtains control of promised goods or services in an amount that reflects the consideration we expect to receive in exchange for those goods or services.

Other revenues consist of contract manufacturing revenue, patent transfer and sales of research and development material.

Development and other revenue have not been material for any of the periods presented.

Drug product revenue includes commercial-grade API or bulk drug product sales to AstraZeneca, under the AstraZeneca U.S./RoW Agreement, and Astellas in support of pre-commercial preparation prior to the new drug application or marketing authorization application approval, and to Astellas for ongoing commercial launch in Japan and Europe.

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The AstraZeneca U.S./RoW Agreement was terminated on February 23, 2024 (except for South Korea), while the AstraZeneca China Agreement and relationship continue unaffected.

In the future, we will continue generating revenue from collaboration agreements in the form of milestone payments and royalties on drug product sales, and from product sales.

In the future, we will continue generating revenue from collaboration agreements in the form of milestone payments and royalties on drug product sales.

We expect that any revenues we generate will fluctuate from quarter to quarter due to the uncertain timing and amount of such payments and sales.

Total revenue increased $6.2 million, or 15%, for the three months ended September 30, 2024, and increased $32.3 million, or 27%, for the nine months ended September 30, 2024, respectively, compared to the same periods a year ago for the reasons discussed in the sections below.

License Revenue

Three Months Ended September 30,

Nine Months Ended September 30,

(dollars in thousands)

License revenue:

Total license revenue

NM = Not meaningful

There was no license revenue during the three and nine months ended September 30, 2024.

License revenue recognized for three and nine months ended September 30, 2023 included $2.7 million allocated revenue under our collaboration agreements with AstraZeneca related to $4.0 million regulatory milestone associated with the renewal of our right to continue to market roxadustat in China that was included in the transaction price during the third quarter of 2023 when such milestone was achieved.

License revenue recognized for the nine months ended September 30, 2023 also included a $1.0 million upfront payment under the A&R Eluminex Agreement, 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 when such milestones were achieved.

Development and Other Revenue

Three Months Ended September 30,

Nine Months Ended September 30,

(dollars in thousands)

Development revenue:

Total development revenue

Other revenue

Total development and other revenue

Development and other revenue decreased $6.4 million, or 94%, for the three months ended September 30, 2024, and decreased $14.3 million, or 90%, for the nine months ended September 30, 2024, respectively, compared to the same periods a year ago.

Development revenue recognized under our collaboration agreements with Astellas for the three and nine months ended September 30, 2024 was impacted by the decrease in co-development billings due to the closeout activities under our collaboration agreements with Astellas for roxadustat.

Development revenue recognized under our collaboration agreements with AstraZeneca for the nine months ended September 30, 2024 was the final development revenue as a result of the termination of the AstraZeneca U.S./RoW Agreement.

Development revenue recognized under our collaboration agreements with AstraZeneca for the three months ended September 30, 2023 also included the allocated revenue of $0.8 million related to the above-mentioned $4.0 million regulatory milestone associated with the renewal of our right to continue to market Roxadustat in China.

Other revenue recognized for the nine months ended September 30, 2024 included our contract manufacturing agreement with Eluminex, under which we are responsible for supplying the cornea product at 110% of our product manufacturing costs until our manufacturing technology is fully transferred to Eluminex, which occurred by the end of 2023.

Other revenue recognized for the three and nine months ended September 30, 2023 also included a $0.5 million upfront payment related to patent transfer under from Eluminex and revenue from sales of certain research and development material.

Product Revenue, Net

Three Months Ended September 30,

Nine Months Ended September 30,

(dollars in thousands)

Direct Sales:

Gross revenue

Discounts and rebates

Sales returns

Direct sales revenue, net

Sales to Falikang:

Gross transaction price

Net transaction price

Decrease in deferred revenue

Sales to Falikang revenue, net

Total product revenue, net

Substantially all direct product sales to distributors in China have been made by Falikang, while FibroGen Beijing continues to sell product directly in limited areas in China.

Total product revenue, net increased $16.8 million, or 57%, for the three months ended September 30, 2024, and increased $49.0 million, or 63%, for the nine months ended September 30, 2024, respectively, compared to the same periods a year ago.

We recognize product revenue from direct sales to distributors in an amount that reflects the consideration that we expect to be entitled to in exchange for those products, net of various sales rebates and discounts.

Product revenue from direct sales, increased $1.1 million, or 36%, for the three months ended September 30, 2024, and increased $2.0 million, or 22%, for the nine months ended September 30, 2024, respectively, compared to the same periods a year ago, due to the increase in sales volume during the current year periods, offset by lower government-listed price.

The total discounts and rebates were immaterial for each of the three and nine months ended September 30, 2024 and 2023.

FibroGen Beijing manufactures and supplies commercial product to Falikang based on a gross transaction price, adjusted for the estimated profit share.

We recognize revenue upon the transfer of control of commercial products to Falikang in an amount that reflects the allocation of the China performance obligation transaction price to the performance obligation satisfied during the reporting period.

The variable consideration components that are included in the transaction price may be constrained, and are included in the product revenue only to the extent that it is probable that a significant reversal in the amount of the cumulative revenue recognized will not occur in a future period when the uncertainty associated with the variable consideration is subsequently resolved.

Sales to Falikang revenue, net increased $15.8 million, or 60%, for the three months ended September 30, 2024, and increased $47.0 million, or 69%, for the nine months ended September 30, 2024, respectively, compared to the same periods a year ago.

The gross transaction price increased $11.4 million, and the calculated profit share increased $5.8 million for the three months ended September 30, 2024, and the gross transaction price increased $27.9 million, and the calculated profit share increased $13.0 million for the nine months ended September 30, 2024, respectively, compared to the same periods a year ago, primarily due to the increase in sales volume during the current year period.

Periodically, we update our assumptions such as gross transaction price, profit share, performance period, total sales quantity and other inputs including foreign currency translation impact, among others.

Following updates to our estimates, we recognized $12.5 million and $33.1 million for the three and nine months ended September 30, 2024, respectively, from the previously deferred revenue of the China performance obligation.

Comparatively, we recognized $2.3 million and $1.1 million for the three and nine months ended September 30, 2023, respectively, from the net transfer price to Falikang, which was included in the related deferred revenue of the China performance obligation.

Total revenue decreased $22.6 million, or 89%, for the three months ended March 31, 2025, compared to the same period a year ago for the reasons discussed in the sections below.

Drug Product Revenue, Net

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

(dollars in thousands)

5 unchanged sentences

NM = Not meaningful

Drug product revenue, net decreased $1.6 million, or 120%, for the three months ended September 30, 2024, and increased $7.3 million, or 41%, for the nine months ended September 30, 2024, respectively, compared to the same periods a year ago.

Drug product revenue, net decreased $21.9 million, or 89%, for the three months ended March 31, 2025, compared to the same period a year ago.

Astellas Japan Agreement

During the third quarter of 2024, we updated our 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 $1.4 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, among others.

During the second quarter of 2024, we updated our 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 $0.4 million.

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

During the first quarter of 2025, we updated our 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 $1.8 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 yield from the manufacture of bulk product tablets, among others.

During the first quarter of 2024, we updated our 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.

During the third quarter of 2023, we updated our 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 $0.7 million for the three months ended September 30, 2023.

During the second quarter of 2023, we 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, we updated our 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 first quarter of 2023, we updated our estimate of variable consideration related to the API shipments fulfilled under the terms of Astellas Japan Amendment, and accordingly recorded adjustments to the drug product revenue of $1.7 million.

As of September 30, 2024, the balances related to the API price true-up under the Astellas Japan Agreement were $3.6 million in accrued liabilities and $0.6 million in other long-term liabilities, representing our best estimate of the timing for these amounts to be paid.

As of December 31, 2023, the related balances were $1.2 million in accrued liabilities and $0.7 million in other long-term liabilities.

As of March 31, 2025, the balances related to the API price true-up under the Astellas Japan Agreement were $0.7 million in accrued liabilities and $0.6 million in other long-term liabilities, representing our best estimate of the timing for these amounts to be paid.

Astellas Europe Agreement

1 unchanged sentence

Specifically, the change in estimated variable consideration was based on the bulk drug product held by Astellas at the period end, adjusted to reflect the changes in the estimated transfer price, forecast information, shelf-life estimates and other items.

As a result, we reclassified from the related deferred revenue to accrued liabilities and as of December 31, 2023, the related balance in accrued liabilities was $38.6 million.

We further reclassified $5.6 million from the related deferred revenue to accrued liabilities and paid $35.3 million to Astellas during the nine months ended September 30, 2024.

As of September 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 $9.0 million in accrued liabilities, representing our best estimate that these amounts will be paid within the next 12 months.

We recognized royalty revenue as drug product revenue, from the deferred revenue under the Astellas Europe Agreement, of $1.1 million and $0.6 million for the three months ended September 30, 2024 and 2023, and $3.2 million and $1.5 million for the nine months ended September 30, 2024 and 2023, respectively.

As a result, for the year ended December 31, 2024, we reclassified $7.2 million from the related deferred revenue to accrued liabilities.

As of December 31, 2024, the related balance in accrued liabilities was $10.5 million.

We further reclassified $2.1 million from the related deferred revenue to accrued liabilities during the three months ended March 31, 2025.

As of March 31, 2025, the balances related to the bulk drug product price true-up under the Astellas Europe Agreement and the Astellas EU Supply Agreement were $12.6 million in accrued liabilities, representing our best estimate that these amounts will be paid within the next 12 months.

We recognized royalty revenue as drug product revenue, from the deferred revenue under the Astellas Europe Agreement, of $0.8 million and $1.0 million for the three months ended March 31, 2025 and 2024, respectively.

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

2 unchanged sentences

Accordingly, during the three months ended March 31, 2024, we 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.

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 second quarter of 2024.

Operating Costs and Expenses

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

(dollars in thousands)

5 unchanged sentences

Total operating costs and expenses

Total operating costs and expenses decreased $40.5 million, or 39%, and decreased $136.6 million, or 39%, for the three and nine months ended September 30, 2024, respectively, compared to the same periods a year ago for the reasons discussed in the sections below.

Total operating costs and expenses decreased $56.9 million, or 76%, compared to the same period a year ago for the reasons discussed in the sections below.

Cost of Goods Sold

Cost of goods sold increased $1.1 million, or 25%, for the three months ended September 30, 2024, and increased $22.8 million, or 170%, for the nine months ended September 30, 2024, respectively, compared to the same periods a year ago.

Cost of goods sold decreased $21.1 million, or 99%, for the three months ended March 31, 2025, compared to the same period a year ago.

As described above, during the three months ended March 31, 2024, we recorded a cumulative catch-up net adjustment to the drug product revenue resulting from the AstraZeneca Termination and Transition Agreement related to the AstraZeneca U.S./RoW Agreement.

Correspondingly, we recorded the related cost of goods sold of $21.1 million during the three months ended March 31, 2024.

Cost of goods sold, associated with the roxadustat commercial sales in China, consists of direct costs to manufacture commercial product, as well as indirect costs including factory overhead, storage, shipping, quality assurance, idle capacity charges, and inventory valuation adjustments.

Cost of goods sold associated with the roxadustat commercial sales in China was $5.4 million and $3.9 million for the three months ended September 30, 2024 and 2023, and $14.8 million and $10.7 million for the nine months ended September 30, 2024 and 2023, respectively.

Cost of goods sold in China increased as compared to the prior year periods due to the increases in the sales volume.

Cost of goods sold also included manufacturing costs related to our contract manufacturing revenue from Eluminex, which was immaterial for the periods presented.

Research and Development Expenses

3 unchanged sentences

We recognize costs for certain development activities based on an evaluation of the progress to completion of specific tasks using information and data provided to us by our vendors and our clinical sites.

Research and development expenses also include IPR&D assets that have no alternative future use other than in a particular research and development project.

We have implemented a significant cost reduction plan in the U.S.

in the third quarter of 2024, and efforts to streamline operations to align with our business goals in the second half of 2023.

in the third quarter of 2024.

As a result, research and development expenses have overall decreased and may continue to decrease in certain areas over time.

The following table summarizes our research and development expenses incurred during the three and nine months ended September 30, 2024 and 2023:

Three Months Ended September 30,

Nine Months Ended September 30,

The following table summarizes our research and development expenses incurred during the three months ended March 31, 2025 and 2024:

Three Months Ended March 31,

Product Candidate

3 unchanged sentences

Total research and development expenses

* Included $24.6 million one-time, non-cash acquired IPR&D expenses associated with the recent exclusive license for FG-3246 from Fortis and the acquisition of Fortis.

The program-specific expenses summarized in the table above include costs we directly attribute to our product candidates.

We allocate research and development salaries, benefits, stock-based compensation and other indirect costs to our product candidates on a program-specific basis, and we include these costs in the program-specific expenses.

Research and development expenses decreased $39.5 million, or 65%, for the three months ended September 30, 2024, and decreased $137.0 million, or 59%, for the nine months ended September 30, 2024, compared to the same periods a year ago, primarily as a result of the net effect of the following, respectively:

• Decrease of $18.8 million and $50.9 million in clinical trials costs primarily associated with the termination of pamrevlumab programs during the current year period responding to the reported results in July 2024;

• Decrease of $8.6 million and $25.5 million in employee-related costs primarily due to the impact from reduction in force actions in August 2024 and July 2023, and cost control efforts;

• Decrease of $3.4 million and $10.7 million in facilities-related expenses due to cost control efforts and lower depreciation expense as certain property and equipment reached their useful lives in prior year period, offset by the loss on disposal of property and equipment associated with efforts to streamline operations during the third quarter of 2024;

• Decrease of $4.4 million and $8.6 million in outside services expenses primarily due to termination of pamrevlumab programs, wind down of remaining obligations and cost control efforts.

• Decrease of $2.8 million and $8.2 million in drug development expenses associated with drug substance activities and logistic expenses related to pamrevlumab programs which were completed and terminated;

• Decrease of $1.4 million and $8.6 million in stock-based compensation primarily resulting from significantly lower stock price and cancellations of stock options and restricted stock units due to reduced headcount;

• $24.6 million one-time, non-cash charge of acquired IPR&D expenses, in the nine-month period in prior year, associated with the exclusive license for FG-3246 from Fortis and the acquisition of Fortis.

Research and development expenses decreased $27.3 million, or 75%, for the three months ended March 31, 2025, compared to the same period a year ago, primarily as a result of the net effect of the following:

• Decrease of $7.8 million in employee-related costs primarily due to the impact from reduction in force action in August 2024 and cost control efforts;

• Decrease of $6.9 million in clinical trials costs primarily associated with the termination of pamrevlumab programs during the second half of 2024 responding to the topline clinical data results we reported in July 2024;

• Decrease of $5.8 million in facilities-related expenses due to cost control efforts including the lease termination in the third quarter of 2024;

• Decrease of $3.3 million in stock-based compensation primarily resulting from significantly lower stock price and cancellations of stock options and restricted stock units due to reduced headcount;

• Decrease of $2.4 million in drug development expenses associated with drug substance activities and logistic expenses related to pamrevlumab programs which were completed and terminated.

Selling, General and Administrative Expenses

Selling, general and administrative (“SG&A”) expenses consist primarily of employee-related expenses for executive, operational, finance, legal, compliance, and human resource functions.

SG&A expenses also include facility-related costs, professional fees, accounting and legal services, other outside services including co-promotional expenses associated with our commercialization efforts in China, recruiting fees and expenses associated with obtaining and maintaining patents.

SG&A expenses also include facility-related costs, professional fees, accounting and legal services, other outside services, recruiting fees and expenses associated with obtaining and maintaining patents.

We have implemented a significant cost reduction plan in the U.S.

in the third quarter of 2024, and efforts to streamline operations to align with our business goals in the second half of 2023.

in the third quarter of 2024.

As a result, SG&A expenses have overall decreased and may continue to decrease over time.

SG&A expenses decreased $8.0 million, or 31%, for the three months ended September 30, 2024, and decreased $28.4 million, or 31%, for the nine months ended September 30, 2024, compared to the same periods a year ago, primarily as a result of the net effect of the following, respectively:

• Decrease of $3.9 million and $11.5 million in employee-related costs primarily due to the impact from reduction in force actions in August 2024 and July 2023, and cost control efforts;

• Decrease of $1.9 million and $5.1 million in legal expenses primarily due to lower activities in corporate legal, legal proceedings and intellectual properties;

• Decrease of $1.5 million and $4.5 million in outside services expenses due to cost control efforts;

• Decrease of $0.4 million and $7.8 million in stock-based compensation primarily resulting from significantly lower stock price and cancellations of stock options and restricted stock units due to reduced headcount.

SG&A expenses decreased $8.6 million, or 52%, for the three months ended March 31, 2025, compared to the same period a year ago, primarily as a result of the net effect of the following, respectively:

• Decrease of $3.6 million in employee-related costs primarily due to the impact from reduction in force action in August 2024 and cost control efforts;

• Decrease of $2.5 million in stock-based compensation primarily resulting from significantly lower stock price and cancellations of stock options and restricted stock units due to reduced headcount.

Restructuring Charge

Responding to the reported results for pamrevlumab on July 30, 2024, we implemented 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% (we notified employees on August 2, 2024).

As a result, we recorded a total of $18.6 million non-recurring restructuring charge during the three months ended September 30, 2024, primarily consisting of notice period and severance payments, accrued vacation, and employee benefits contributions.

On July 14, 2023, we approved a restructuring plan to lower our operating expenses to streamline operations to align with our business goals, which included a reduction to our U.S.

workforce of approximately 32%.

As a result, we recorded a total of $12.6 million non-recurring restructuring charge during the three months ended September 30, 2023, primarily consisting of notice period and severance payments, accrued vacation and employee benefits contributions.

In response to the topline clinical results for pamrevlumab in patients with pancreatic cancer we announced in July 2024, we implemented an immediate and significant cost reduction plan in the U.S., including terminating pamrevlumab research and development investment and expeditiously winding down remaining obligations, and reducing our U.S.

workforce by approximately 75%.

As a result, we recorded majority of the related non-recurring restructuring charge during the third quarter of 2024, primarily consisting of notice period and severance payments, accrued vacation, and employee benefits contributions.

The related restructuring charge for the three months ended March 31, 2025 was not material.

Interest and Other, Net

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

(dollars in thousands)

5 unchanged sentences

Interest expense represents the interest related to the senior secured term loan facilities, interest related to sale of future revenues and interest related to the Technology Development Center of the Republic of Finland product development obligations.

Interest expense remained relatively flat for the three months ended September 30, 2024.

Interest expense increased $4.3 million, or 41%, for the nine months ended September 30, 2024, compared to the same period a year ago, primarily due to the higher interest expense related to the senior secured term loan facilities.

The loan was drawn in the middle of the second quarter of 2023, and therefore, the related interest expense only the represented partial prior year periods.

See Note 7, Senior Secured Term Loan Facilities, to the condensed consolidated financial statements for details.

Interest expense remained relatively flat for the three months ended March 31, 2025.

Interest Income and Other Income (Expenses), Net

Interest income and other income (expenses), net primarily include interest income earned on our cash, cash equivalents and investments, foreign currency transaction gains (losses), remeasurement of certain monetary assets and liabilities in non-functional currency of our subsidiaries into the functional currency, realized gains (losses) on sales of investments, and other non-operating income and expenses.

Interest income and other income (expenses), net decreased $0.5 million, or 11%, and decreased $2.9 million, or 36%, for the nine months ended September 30, 2024, respectively, compared to the same periods a year ago, primarily due to lower interest income resulting from lower investment balances and foreign currency transaction losses.

Three Months Ended September 30,

Nine Months Ended September 30,

Interest income and other income (expenses), net decreased $1.8 million, or 82%, compared to the same period a year ago, primarily due to lower interest income resulting from lower cash equivalents and investment balances.

Three Months Ended March 31,

(dollars in thousands)

Loss before income taxes

Provision for (benefit from) income taxes

Loss from continuing operations before income taxes

Provision for income taxes

Effective tax rate

Provisions for (benefits from) income taxes for the three and nine months ended September 30, 2024 and 2023 were primarily due to foreign taxes.

Provisions for income taxes for the three months ended March 31, 2025 and 2024 were primarily due to foreign taxes.

Based upon the weight of available evidence, which includes our historical operating performance, reported cumulative net losses since inception and expected continuing net loss, we have established a full valuation allowance against our net deferred tax assets as we do not currently believe that realization of those assets is more likely than not.

We intend to continue maintaining a full valuation allowance on our deferred tax assets until there is sufficient evidence to support the reversal of all or some portion of this allowance.

Investment Income in Unconsolidated Variable Interest Entity

Investment income in unconsolidated variable interest entity represented our proportionate share of the reported profits of Falikang, an unconsolidated variable interest entity accounted for under the equity method, which was immaterial for the three and nine months ended September 30, 2024 and 2023.

See Equity method investment - Unconsolidated VIE - Falikang section of Note 4, Variable Interest Entities , to the condensed consolidated financial statements for details.

Discontinued Operations

On February 20, 2025, we entered into the Share Purchase Agreement with AstraZeneca Treasury Limited pursuant to which we and our subsidiary FibroGen China Anemia Holdings, Ltd.

agreed to sell all of the issued and outstanding equity interests of FibroGen International to AstraZeneca Treasury Limited.

AstraZeneca is our long-time commercialization partner for roxadustat in greater China and South Korea.

This sale includes all of our roxadustat assets in China, including FibroGen International’s subsidiary FibroGen (China) Medical Technology Development Co., Ltd and its 51.1% interest in Falikang.

We determined that FibroGen International met the “held for sale” criteria and the “discontinued operations” criteria in accordance with Financial Accounting Standard Board Accounting Standards Codification ASC 205, Presentation of Financial Statements , as of March 31, 2025 and December 31, 2024.

Accordingly, the operating results related to FibroGen International are classified as discontinued operations, and have been reflected as discontinued operations in the condensed consolidated statements of operations.

See Note 2, Discontinued Operations , for details.

LIQUIDITY AND CAPITAL RESOURCES

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We have historically funded our operations principally from the sale of common stock (including our public offering proceeds), from the execution of collaboration agreements involving license payments, milestone payments, reimbursement for development services, and the associated product revenue and drug product revenue.

On November 4, 2022, we entered into a Revenue Interest Financing Agreement (“RIFA”) with NovaQuest Capital Management (“NovaQuest”) with respect to our revenues from Astellas’ sales of roxadustat in Europe, Japan and the other Astellas territories.

In November 2022, we entered into a Revenue Interest Financing Agreement (“RIFA”) with NovaQuest Capital Management (“NovaQuest”) with respect to our revenues from Astellas’ sales of roxadustat in Europe, Japan and the other Astellas territories.

Pursuant to the RIFA, in the fourth quarter of 2022, we received $49.8 million from NovaQuest, representing the gross proceeds of $50.0 million net of initial issuance costs, in consideration for a portion of future revenues we will receive from Astellas.

For additional details about this financing transaction, see Note 8, Liability Related to Sale of Future Revenues , to the condensed consolidated financial statements.

On February 27, 2023, we entered into an Amended and Restated Equity Distribution Agreement (the “at-the-market agreement”) with Goldman Sachs & Co., LLC and BofA Securities, Inc.

(each a “Sales Agent”), which amended and restated its Equity Distribution Agreement with Goldman Sachs & Co., LLC, dated August 8, 2022, to add BofA Securities, Inc.

as an additional Sales Agent under that agreement.

Under the at-the-market agreement, we may issue and sell, from time to time and through the Sales Agents, shares of our common stock having an aggregate offering price of up to $200.0 million (the “ATM Program”).

Under the ATM Program, we sold a total of 2,472,090 shares of our common stock and received net proceeds of approximately $48.4 million during the first and second quarter of 2023.

On April 29, 2023, we entered into the Financing Agreement with investment funds managed by Morgan Stanley Tactical Value, (“Lenders”), and Wilmington Trust, National Association, as the administrative agent, providing for senior secured term loan facilities consisting of a $75.0 million initial term loan.

In April 2023, we entered into the Financing Agreement with investment funds managed by Morgan Stanley Tactical Value, (“Lenders”), and Wilmington Trust, National Association, as the administrative agent, providing for senior secured term loan facilities consisting of a $75.0 million initial term loan.

The clinical development milestones which could have triggered Delayed Draw Term Loan 1 were not achieved, and the Lenders have not funded Delayed Draw Term Loan 2.

For additional details about this financing transaction, see Note 7, Senior Secured Revolving Line of Credit , to the condensed consolidated financial statements.

As of September 30, 2024, we had cash and cash equivalents of $131.0 million, compared to $113.7 million as of December 31, 2023.

In February 2025, we entered into an Equity Distribution Agreement with BofA Securities, Inc.

pursuant to which we may issue and sell, from time to time and through BofA Securities, Inc., shares of our common stock having an aggregate offering price of up to $30.0 million.

We did not sell any shares of common stock under this agreement during the three months ended March 31, 2025.

As of March 31, 2025, we had cash and cash equivalents of $33.6 million for our continuing operations, compared to $50.5 million as of December 31, 2024.

Cash is invested in accordance with our investment policy, primarily with a view to liquidity and capital preservation.

Investments, consisting of available-for-sale securities, and stated at fair value, are also available as a source of liquidity.

As of September 30, 2024, we did not have any short-term investments, compared to short-term investments of $121.9 million as of December 31, 2023.

As of September 30, 2024, a total of $51.0 million of our cash and cash equivalents was held outside of the U.S.

in our foreign subsidiaries, substantially all held in China, to be used primarily for our China operations.

Our long-term plans for distributing cash flows from FibroGen Beijing may involve any number of scenarios including keeping the money onshore to fund future expansion of our China operations or paying down certain debt obligations.

During the three and nine months ended September 30, 2024, FibroGen Beijing made a total of $22.5 million and $49.9 million repayments of intercompany loans, respectively.

Our capital contributions to FibroGen Beijing and the liquidity position of FibroGen Beijing depend on many factors, including those set forth under Part II, Item 1A “ Risk Factors ” in this Quarterly Report.

In addition, as of March 31, 2025, we had $72.6 million of cash and cash equivalents and $22.0 million of accounts receivable in China, which were included in the held for sale assets in the condensed consolidated balance sheet.

We will have access to the entirety of the cash, cash equivalents and accounts receivable balances in China upon the close of the sales of FibroGen International to AstraZeneca Treasury Limited.

We have evaluated measures to access additional cash from our China operations and we believe the above-mentioned sale of FibroGen International represents the most efficient way to access the entirety of our cash from China upon closing of the transaction.

The completion of the sale of FibroGen International, access to additional cash from our China operations and our capital contributions to FibroGen Beijing and the liquidity position of FibroGen Beijing depend on many factors, including those set forth under Part II, Item 1A “ Risk Factors ” in this Quarterly Report.

Cash Sources and Uses

The following table sets forth the primary sources and uses of cash and cash equivalents for each of the periods set forth below (in thousands):

Nine Months Ended September 30,

The following table sets forth the primary sources and uses of cash and cash equivalents for each of the periods set forth below (in thousands), including both continuing operations and discontinued operations:

Three Months Ended March 31,

Net cash provided by (used in):

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Operating Activities

Net cash used in operating activities was $107.5 million for the nine months ended September 30, 2024 and consisted primarily of net loss of $65.6 million adjusted for non-operating cash items of $27.7 million, and a net decrease in operating assets and liabilities of $69.7 million.

Net cash provided by operating activities was $2.7 million for the three months ended March 31, 2025 and consisted primarily of net income of $4.6 million adjusted for non-operating cash items of $3.7 million, and a net decrease in operating assets and liabilities of $5.7 million.

The significant non-operating cash items included stock-based compensation expense of $2.9 million.

The significant items in the changes in operating assets and liabilities included the following:

• Operating lease right-of-use assets decreased $66.0 million, operating lease liabilities, non-current decreased $65.8 million and operating lease liabilities, current decreased $12.8 million related to the operating lease termination of our corporate headquarters.

See Note 3, Leases, to the condensed consolidated financial statements for details;

• Prepaid expenses and other current assets increased $18.2 million, primarily due to the $24.8 million of unbilled receivables from Falikang based on the arrangements under the settlement agreements entered in September 2024 between FibroGen China and AstraZeneca to settle certain historical items, and the reimbursements from the insurance for the legal fees associated with the class action lawsuit, which is recoverable under our insurance policies.

• Accrued and other liabilities decreased $17.1 million, primarily driven by payment of $35.3 million to Astellas and $11.5 million to AstraZeneca related to accrued API and bulk drug product price true-up and bonus and severance payouts, totaling $25.2 million.

The decreases were offset by $42.4 million of historical co-promotion balances due to AstraZeneca based on the arrangements under the above-mentioned settlement agreements, accrued restructuring charge of $18.6 million related to the reduction in force in August 2024, and accrued inventory related cost of $8.5 million as of September 30, 2024, as part of the cost of goods sold resulting from the above-mentioned termination of the AstraZeneca U.S./RoW agreement.

• Accrued and other liabilities decreased $31.7 million, primarily driven by the $28.5 million distribution of litigation settlement related to our agreement in principle with plaintiffs to settle the class action lawsuit, and bonus and severance payouts totaling $5.1 million during the quarter.

The accrued and other liabilities were also impacted by cost control efforts and the timing of invoicing and payment;

• Accounts receivable increased $16.0 million, primarily driven by the billings to Falikang based on the arrangements under the above-mentioned settlement agreements and related to the increase product sales, as well as the timing of receipt of the billings under our collaboration and license agreements;

• Deferred revenue decreased $15.2 million, primarily related to the $33.1 million product revenue recognized from the previously deferred revenue of the China performance obligation during the nine months ended September 30, 2023.

See the Product Revenue, Net section in Note 2, Collaboration Agreements, License Agreement and Revenues, to the condensed consolidated financial statements for details.

In addition, the decrease in deferred revenue was also related to the $3.2 million royalty revenue recognized from the deferred revenue under the Astellas Europe Agreement, and the reclassification of $5.6 million to accrued liabilities, resulting from changes in estimated variable consideration associated with the bulk drug product transferred to Astellas under the terms of the Astellas Europe Agreement and the Astellas EU Supply Agreement during the nine months ended September 30, 2023.

• Accounts payable decreased $24.8 million, primarily driven by the payments made during the quarter to AstraZeneca under the settlement agreements entered in September 2024 between FibroGen China and AstraZeneca to settle certain historical items;

• Deferred revenue decreased $4.1 million, primarily related to the reclassification of $2.1 million to accrued liabilities, resulting from changes in estimated variable consideration associated with the bulk drug product transferred to Astellas under the terms of the Astellas Europe Agreement and the Astellas EU Supply Agreement during the year.

See the Drug Product Revenue, Net section in Note 3, Collaboration Agreements, License Agreement and Revenues , to the condensed consolidated financial statements for details.

Deferred revenue was no longer netted against any contract assets as of September 30, 2024, and the $22.5 million of unbilled co-development revenue under the AstraZeneca China Amendment and the $4.0 million unbilled regulatory milestone payment under the AstraZeneca China Agreement as of December 31, 2023 were billed during the three months ended September 30, 2024 under the above-mentioned settlement agreements;

• Accounts payable decreased $8.7 million, primarily driven by the timing of invoicing and payments and cost control efforts;

• Inventory decreased $17.8 million primarily driven by the $12.6 million of work-in-progress inventory that was reimbursed as part of the above-mentioned termination of the AstraZeneca U.S./RoW agreement.

Net cash used in operating activities was $296.7 million for the nine months ended September 30, 2023 and consisted primarily of net loss of $228.0 million adjusted for non-operating cash items of $77.6 million, and a net decrease in operating assets and liabilities of $146.3 million.

The significant non-operating cash items included stock-based compensation expense of $41.5 million, acquired IPR&D expenses associated with the acquisition of Fortis of $24.6 million, depreciation expense of $7.7 million and non-cash interest expense related to sale of future revenues of $5.6 million.

In addition, the decrease in deferred revenue was also related to the $1.3 million product revenue recognized, which is included in the discontinued operations, from the previously deferred revenue of the China performance obligation during the quarter;

• Accounts receivable increased $3.2 million, primarily driven by the billings to Falikang based on the arrangements under the above-mentioned settlement agreements and related to the increase product sales.

Accounts receivable from Falikang is part of the held-for-sale assets resulting from the Share Purchase Agreement with AstraZeneca Treasury Limited as discussed above and in Note 2, Discontinued Operations to the condensed consolidated financial statements;

• Prepaid expenses and other current assets decreased $52.6 million, primarily due to the $28.5 million distribution of the above-mentioned litigation settlement during the quarter, which is fully recoverable under our insurance policies.

The decrease in prepaid expenses and other current assets was also related to the collection from Falikang during the quarter based on the arrangements under the above-mentioned settlement agreements between FibroGen China and AstraZeneca to settle certain historical items, which was unbilled receivables as of December 31, 2024;

• Inventory decreased $2.9 million primarily driven by lower inventory production in China as we have decommissioned our API manufacturing facility in Cangzhou, China in late 2024.

Inventory in China is part of the held-for-sale assets resulting from the Share Purchase Agreement with AstraZeneca Treasury Limited as discussed above and in Note 2, Discontinued Operations to the condensed consolidated financial statements;

• Accrued interest expense related to sale of future revenues increased $1.7 million due to the interest expense of $2.2 million accrued, offset by the interest paid, during the quarter.

See Note 8, Liability Related to Sale of Future Revenues , to the condensed consolidated financial statements for details.

Net cash used in operating activities was $59.3 million for the three months ended March 31, 2024 and consisted primarily of net loss of $32.9 million adjusted for non-operating cash items of $7.7 million, and a net decrease in operating assets and liabilities of $34.1 million.

The significant non-operating cash items included stock-based compensation expense of $8.8 million.

The significant items in the changes in operating assets and liabilities included the following:

• Accrued and other liabilities decreased $50.2 million, primarily related to the movements related to API and bulk drug product price true-up, resulting from changes in estimated variable consideration associated with the API shipments fulfilled under the terms of the Astellas Japan Amendment, and the bulk drug product transferred under the terms of the Astellas Europe Agreement and the Astellas EU Supply Agreement, including the payment of $57.4 million previously accrued balance made during the current year period.

• Accounts receivable increased $24.7 million, primarily driven by the receivable from AstraZeneca of $26.0 million associated with the settlement of the past transactions under the above-mentioned settlement agreements between FibroGen China and AstraZeneca to settle certain historical items;

• Accounts payable decreased $13.6 million, primarily driven by the timing of invoicing and payments;

• Deferred revenue decreased $10.2 million, primarily related to the reclassification of $5.7 million to accrued liabilities, resulting from changes in estimated variable consideration associated with the bulk drug product transferred to Astellas under the terms of the Astellas Europe Agreement and the Astellas EU Supply Agreement during three months ended March 31, 2024.

In addition, the decrease in deferred revenue was also related to the product revenue recognized from the previously deferred revenue of the China performance obligation during the three months ended March 31, 2024;

• Accrued interest expense related to sale of future revenues decreased $3.6 million due to the $5.7 million interest paid, offset by the interest expense of $2.0 million accrued during the three months ended March 31, 2024;

• Accrued and other liabilities decreased $3.0 million, primarily related to bonus and severance payouts totaling $19.1 million, offset by accrued inventory related cost of $8.5 million as of March 31, 2024, as part of the cost of goods sold resulting from the above-mentioned termination of the AstraZeneca U.S./RoW agreement, as well as the movements related to API and bulk drug product price true-up, resulting from changes in estimated variable consideration primarily associated with the bulk drug product transferred under the terms of the Astellas Europe Agreement and the Astellas EU Supply Agreement.

The accrued and other liabilities were also impacted by the timing of invoicing and payment;

• Deferred revenue decreased $36.9 million, primarily related to the reclassification of $28.7 million to accrued liabilities, resulting from changes in estimated variable consideration associated with the bulk drug product transferred to Astellas under the terms of the Astellas Europe Agreement and the Astellas EU Supply Agreement during the current year period;

• Accounts receivable increased $16.3 million, primarily driven by the receivable related to the API shipments to Astellas during the second quarter of 2023, as well as the timing of the receipt of payments and the billings under our collaboration and license agreements;

• Accounts payable decreased $14.1 million, primarily driven by the payments made for the historical co-promotion expenses to AstraZeneca during the current year period, as well as the timing of invoicing and payments;

• Prepaid expenses and other current assets increased $27.4 million, primarily due to the $28.5 million receivable as of September 30, 2023 for the insurance recovery for the above-mentioned litigation settlement.

• Inventory decreased $13.8 million primarily driven by the $12.6 million of work-in-progress inventory that was reimbursed as part of the above-mentioned termination of the AstraZeneca U.S./RoW agreement;

• Prepaid expenses and other current assets decreased $5.3 million, primarily due to the reimbursements from the insurance for the legal fees associated with the class action lawsuit, which is recoverable under our insurance policies.

Investing Activities

Investing activities primarily consist of purchases of property and equipment, purchases of investments, purchase of acquired IPR&D assets and proceeds from the maturity and sale of investments.

Net cash provided by investing activities was $124.3 million for the nine months ended September 30, 2024 and consisted of $132.2 million of proceeds from maturities of investments, partially offset by $8.6 million of cash used in purchases of available-for-sale securities.

Net cash provided by investing activities was $143.4 million for the nine months ended September 30, 2023 and consisted primarily of $300.5 million of proceeds from maturities of investments, partially offset by $157.2 million of cash used in purchases of available-for-sale securities.

Investing activities primarily consist of purchases of property and equipment, purchases of investments and proceeds from the maturity and sale of investments.

Net cash used in investing activities was immaterial for the three months ended March 31, 2025.

Net cash provided by investing activities was $51.3 million for the three months ended March 31, 2024 and consisted primarily of $59.9 million of proceeds from maturities of investments, partially offset by $8.6 million of cash used in purchases of available-for-sale securities.

Financing Activities

Financing activities primarily reflect proceeds from strategic financing arrangements, proceeds from the issuance of our common stock, cash paid for payroll taxes on restricted stock unit releases, and repayments of our lease liabilities and obligations.

Net cash used in financing activities was immaterial for the nine months ended September 30, 2024.

Net cash provided by financing activities was $123.0 million for the nine months ended September 30, 2023 and consisted primarily of $71.3 million net proceeds from senior secured term loan facilities, $48.4 million net proceeds received under the ATM Program, $3.7 million of proceeds from the issuance of common stock upon exercise of stock options and purchases under our Employee Stock Purchase Plan.

Net cash used in financing activities was immaterial for the three months ended March 31, 2025 and 2024.

Material Cash Requirements

We generate revenue from commercial sales of roxadustat product in China, Japan and Europe.

Even with the expectation of increases in these revenues, we anticipate that we will continue to generate losses for the foreseeable future.

Even with the expectation of increases in these revenues and the sale of FibroGen International and its subsidiaries to AstraZeneca, we anticipate that we will continue to generate losses for the foreseeable future.

To date, we have funded certain portions of our research and development and manufacturing efforts globally through collaboration partners, debt financings, and equity financing.

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We anticipate that we will need substantial additional funding in connection with our continuing operations.

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.

If we are unable to complete the above mentioned sale of FibroGen International and its subsidiaries to AstraZeneca, access additional cash from our China operations, or raise additional capital in the United States, we would not have sufficient liquidity to continue operations in the U.S.

for the 12 months from the date that the financial statements are issued and would not be able to comply with its financial covenant that requires a minimum balance of $27 million of unrestricted cash and cash equivalents to be held in accounts in the United States.

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

We have evaluated measures to access additional cash from our China operations and believe the sale of FibroGen International represents the most efficient way to access the entirety of our cash from China upon closing of the transaction.

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

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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.

As a result of these factors, we have 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 forecast of the period of time through which our financial resources will be adequate to support our operations is a forward-looking statement and involves risks and uncertainties, and actual results could vary as a result of a number of factors.

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Contractual Obligations

As of September 30, 2024, we had $2.0 million of operating lease liabilities.

The material cash requirements related to our lease liabilities included $1.3 million expected to be paid within the next 12 months.

As of September 30, 2024, we had outstanding total non-cancelable purchase obligations of $1.0 million for manufacture and supply of roxadustat and $6.0 million for other purchases and programs, all of which are expected to be paid within the next 12 months.

As of March 31, 2025, we had outstanding total non-cancelable purchase obligations of $2.3 million for general purchases and other programs, $0.7 million for manufacture and supply of roxadustat, and $0.3 million for Manufacture and supply of FG-3246, all of which are expected to be paid within the next 12 months.

We expect to fulfill our commitments under these agreements in the normal course of business, and as such, no liability has been recorded.

Under the Financing Agreement with Morgan Stanley Tactical Value, as of September 30, 2024, we had $72.8 million of senior secured term loan facilities balance on the condensed consolidated balance sheets, which are not subject for repayment until May 2026.

Under the Financing Agreement with Morgan Stanley Tactical Value, as of March 31, 2025, we had $73.4 million of senior secured term loan facilities balance on the condensed consolidated balance sheets, which are not subject for repayment until May 2026.

Meanwhile, we are obliged to pay interest on a monthly basis, for which we expect to pay a total of $10.5 million within the next 12 months.

See Note 7, Senior Secured Term Loan Facilities , to the condensed consolidated financial statements for details.

Under the RIFA with NovaQuest, as of September 30, 2024, we had $57.2 million of liability related to sale of future revenues on the condensed consolidated balance sheets, $0.3 million of which we anticipate to pay within the next 12 month.

Under the RIFA with NovaQuest, as of March 31, 2025, we had $61.0 million of liability related to sale of future revenues on the condensed consolidated balance sheets, $1.9 million of which we anticipate to pay within the next 12 month.

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

See Note 8, Liability Related to Sale of Future Revenues , to the condensed consolidated financial statements for details.

Some of our 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 September 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 our license agreements with HiFiBiO (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.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

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Actual results may differ from these estimates under different assumptions or conditions.

There have been no material changes in our critical accounting policies, estimates and judgments during the three and nine months ended September 30, 2024 compared with the disclosures in Part II, Item 7 of our 2023 Form 10-K.

There have been no material changes in our critical accounting policies, estimates and judgments during the three months ended March 31, 2025 compared with the disclosures in Part II, Item 7 of our 2024 Form 10-K.

QUANTITATIVE AND QUALITAT IVE DISCLOSURES ABOUT MARKET RISK.

During the three and nine months ended September 30, 2024, we believe there were no material changes to our exposure to market risks as set forth in Part II, Item 7A “Quantitative and Qualitative Disclosures About Market Risk” in our 2023 Form 10-K.

We are a smaller reporting company as defined in Rule 12b-2 of the Exchange Act;

therefore, pursuant to Item 305(e) of Regulation S-K, we are not required to provide the information required by this Item.

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 2. Management’s Discussion and Analysis