KYNTRA BIO, INC. 10-Q

ITEM 2. 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, 2024 filed with the SEC on March 17, 2025 (“2024 Form 10-K”). FORWARD-LOOKING STATEMENTS The following discussion and information contained elsewhere in this Quarterly Report on Form 10-Q contain “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (“Exchange Act”), Section 27A of the Securities Act of 1933, as amended (“Securities Act”) and within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are often identified by the use of words such as “may,” “will,” “expect,” “anticipate,” “intend,” “could,” “should,” “estimate,” or “continue,” and similar expressions or variations. In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this Quarterly Report on Form 10-Q, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. Such forward-looking and other statements are subject to risks, uncertainties and other factors that could cause actual results and the timing of certain events to differ materially from future results expressed or implied by such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in the section titled “Risk Factors,” set forth in Part II, Item 1A of this Quarterly Report on Form 10-Q. The forward-looking statements in this Quarterly Report on Form 10-Q represent our views as of the date of this Quarterly Report on Form 10-Q. We anticipate that subsequent events and developments will cause our views to change. New risks emerge from time to time, and it is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking and other statements we may make. In light of these risks, uncertainties, and assumptions, the forward-looking events and circumstances discussed in this Quarterly Report on Form 10-Q may not occur, and actual results could differ materially and adversely from those anticipated or implied in the forward-looking and other statements. While we may elect to update these forward-looking and other statements at some point in the future, we have no current intention of doing so except to the extent required by applicable law. You should, therefore, not rely on these forward-looking and other statements as representing our views as of any date subsequent to the date of this Quarterly Report on Form 10-Q and are cautioned not to place undue reliance on such forward-looking statements. BUSINESS OVERVIEW FibroGen, Inc. (“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 (“CKD”) 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 AB (“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. (“FibroGen Beijing”) and its 51.1% interest in Beijing Falikang Pharmaceutical Co., Ltd. (“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 (“SAMR”). 25 Table of Contents 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 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. We continue to work on our development plan for roxadustat in anemia associated with lower-risk myelodysplastic syndromes (“MDS”), a high-value indication with significant unmet medical need. We had a positive Type-C meeting with the U.S. Food and Drug Administration (“FDA”) in July 2025 and reached alignment on several elements of our proposed Phase 3 study design for roxadustat in anemia associated with lower-risk MDS. Financial Highlights Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 (in thousands, except for per share data) Result of Operations Revenue $ 1,348 $ 998 $ 4,088 $ 26,363 Operating costs and expenses 13,400 47,406 31,060 121,953 Loss from continuing operations (13,683 ) (47,095 ) (30,449 ) (96,141 ) Loss from continuing operations per share - basic and diluted $ (3.38 ) $ (11.79 ) $ (7.54 ) $ (24.18 ) June 30, 2025 December 31, 2024 (in thousands) Balance Sheet Cash and cash equivalents $ 23,367 $ 50,482 Accounts receivable $ 136 $ 481 Our revenue for the three and six months ended June 30, 2025 included primarily the drug product revenue of $1.2 million and $3.8 million, respectively, related to active pharmaceutical ingredient (“API”) deliveries to Astellas. As a comparison, our revenue for the three and six months ended June 30, 2024 included primarily the revenue recognized related to the following, respectively: • $0.7 million and a net reduction of $0.5 million to drug product revenue related to API deliveries to Astellas; in addition, $25.7 million cumulative catch-up net adjustment in the drug product revenue, for the six months ended June 30, 2024, as a result of terminating the AstraZeneca U.S./RoW Agreement, effective in February 2024 (“AstraZeneca Termination and Transition Agreement”), with the exception of South Korea; and • $0.3 million and $1.1 million of development and other revenue recognized mainly under our collaboration agreements with our partners Astellas and AstraZeneca. Operating costs and expenses for the three and six months ended June 30, 2025 decreased compared to the same periods a year ago primarily as a result of the net effect of the following, respectively: • $12.8 million and $24.3 million lower employee-related expenses primarily due to the impact from reduction in force action in August 2024 and cost control efforts; • $7.2 million and $14.6 million lower facilities-related expenses due to cost control efforts including the lease termination in the third quarter of 2024; • $6.9 million and $12.7 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; • $3.6 million and $10.5 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; 26 Table of Contents • $2.6 million and $5.0 million lower drug development expenses associated with drug substance activities and logistic expenses related to pamrevlumab programs which were completed and terminated; and • $21.1 million one-time cost of goods sold recorded for the six months ended June 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. For the three months ended June 30, 2025, we had a loss from continuing operations of $13.7 million, or a loss per basic and diluted share of $3.38, as compared to a loss of $47.1 million, or a loss per basic and diluted share of $11.79, for the same period a year ago, due to decreases in operating costs and expenses as discussed above. For the six months ended June 30, 2025, we had a loss from continuing operations of $30.4 million, or a loss per basic and diluted share of $7.54, as compared to a loss of $96.1 million, or a loss per basic and diluted share of $24.18, 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 $23.5 million at June 30, 2025, a decrease of $27.5 million from December 31, 2024. Consolidated cash and cash equivalents and accounts receivable for both continuing operations and discontinued operations totaled $142.1 million at June 30, 2025, an increase of $21.0 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. 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 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, poly (ADP-ribose) polymerase 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 ADC drugs. 27 Table of Contents 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 third quarter of 2025, pending close of the sale of FibroGen International to AstraZeneca Treasury Limited. 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. The presentation includes data from 17 biomarker unselected patients in the dose escalation portion of the trial. Over 70% of the patients in the study received at least two prior ARSIs, which included prior enzalutamide treatment. Dose escalation was explored with and without prophylactic granulocyte colony-stimulating factor (“G-CSF”) support. 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 (“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 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. We had a positive Type-C meeting with the FDA in July 2025, and reached alignment on several elements of our proposed Phase 3 study design for roxadustat in anemia associated with lower-risk MDS, a high-value indication with significant unmet medical needs. Our planned Phase 3 trial will assess the safety and efficacy of roxadustat in a randomized, double-blind, placebo-controlled design in approximately 200 patients with lower-risk MDS. At our Type-C meeting, we aligned with the FDA on the patient population (patients requiring ≥ 4 packed Red Blood Cell (“RBC”) units in two consecutive 8-week periods prior to randomization, who are refractory to, intolerant to, or ineligible for prior erythropoiesis-stimulating agents (“ESA”) therapy), dose regimen, as well as management of potential thrombotic risk through eligibility, dose modification, and discontinuation criteria. As the primary endpoint for the study, the Company is considering either 8-week or 16-week RBC transfusion independence. 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. 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. 28 Table of Contents 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 guidelines recommend the use of 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 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 2/3 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 high transfusion burden (4 or more packed RBC units over two consecutive 8-week periods), 36% of the 22 roxadustat patients achieved transfusion independence, versus 7% of the 15 placebo patients (nominal p-value of 0.04). 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. 29 Table of Contents 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 $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 estimated to be approximately $125 million, as of the closing, which totals an aggregate amount of approximately $210 million. This sale includes all of our roxadustat assets in China, including FibroGen International’s subsidiary FibroGen Beijing and its 51.1% interest in 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 SAMR. 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. Exclusive License from and Option to Acquire Fortis Therapeutics In May 2023, we entered into an exclusive option agreement to acquire Fortis with its novel Phase 1 ADC, 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. Pursuant to an evaluation agreement entered into with Fortis concurrent with the option agreement, FibroGen has exclusively licensed FG-3246 and will control and fund future research, development, including a Phase 2 clinical study sponsored by FibroGen, and manufacturing of FG-3246 during the option period. As part of the clinical development strategy, we will continue the work to develop a PET-based biomarker utilizing a radiolabeled version of the targeting antibody for patient selection. FibroGen have made four quarterly payments totaling $5.4 million to Fortis in support of its continued development obligations, of which the last payment was $1.7 million and was made during the three months ended March 31, 2024. If we exercise the option to acquire Fortis, we will pay Fortis $80.0 million, and thereafter, Fortis would be eligible to receive from FibroGen up to $200.0 million in contingent payments associated with the achievement of various regulatory approvals. If we acquire Fortis, we would also be responsible to pay UCSF, an upstream licensor to Fortis, development milestone fees and a single digit royalty on net sales of therapeutic or diagnostic products arising from the collaboration. If FibroGen chooses not to acquire Fortis, its exclusive license to FG-3246 would expire. For additional details about this transaction, see the Consolidated Variable Interest Entity - Fortis section in Note 4, Variable Interest Entities , to the condensed consolidated financial statements. Exclusive License from HiFiBiO In June 2021, we entered into an exclusive license and option agreement with HiFiBiO (HK) Ltd. (d.b.a. HiFiBiO Therapeutics) (“HiFiBiO”), pursuant to which we exclusively licensed from HiFiBiO all product candidates in HiFiBiO’s Galectin-9 program and subsequently exclusively licensed all product candidates in HiFiBiO’s CCR8 program. On June 12, 2025, FibroGen entered into a termination, asset transfer and license Agreement with HiFiBiO (“HiFiBiO Termination, Asset Transfer and License Agreement”), which terminated the exclusive license and option agreement and all rights and obligation of FibroGen thereunder ceased. 30 Table of Contents Under the HiFiBiO Termination, Asset Transfer and License Agreement, FibroGen licensed HiFiBiO the anti-CCR8 and anti-Gal-9 intellectual property developed by FibroGen. In the event HiFiBiO sublicenses the Gal-9 (FG-3165) and/or CCR8 (FG-3175) assets, FibroGen is eligible to receive a mid single-digit to low double-digit share of HiFiBiO’s license revenues and low double-digit share of HiFiBiO’s commercial royalties. In the case HiFiBiO commercializes either asset, FibroGen has the potential to receive single-digit royalties based upon worldwide net sales. Exclusive License to Eluminex In April 2023, FibroGen and Eluminex entered into an Amended and Restated Exclusive License Agreement (“A&R Eluminex Agreement”) in order to add to the license rights to recombinant human collagen Type I (in addition to the rights to collagen Type III that were already licensed). See the Eluminex Agreement section in Note 3, Collaboration Agreements, License Agreement and Revenues, to the condensed consolidated financial statements for details. Collaboration Partnerships for Roxadustat Our current and future research, development, manufacturing and commercialization efforts with respect to roxadustat depend on funds from our collaboration agreements with Astellas and AstraZeneca. See Note 3, Collaboration Agreements, License Agreement and Revenues , to the condensed consolidated financial statements for details. Astellas In June 2005, we entered into a collaboration agreement with Astellas for the development and commercialization (but not manufacture) of roxadustat for the treatment of anemia in Japan (“Astellas Japan Agreement”). 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 June 30, 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 immaterial for the three months ended June 30, 2025. The related drug product revenue was $(0.4) million for the three months ended June 30, 2024, and $1.8 million and $(2.6) million for the six months ended June 30, 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 $1.2 million and $1.1 million for the three months ended June 30, 2025 and 2024, and $2.0 million and $2.1 million for the six months ended June 30, 2025 and 2024, respectively. AstraZeneca In July 2013, we entered into a collaboration agreement with AstraZeneca for roxadustat for the treatment of anemia in the U.S. and all territories, except for China and other territories not previously licensed to Astellas (the “AstraZeneca U.S./RoW Agreement”). In 2020, we entered into a Master Supply Agreement with AstraZeneca under the AstraZeneca U.S./RoW Agreement (the “AstraZeneca Master Supply Agreement”) to define general forecast, order, supply and payment terms for AstraZeneca to purchase roxadustat bulk drug product from FibroGen in support of commercial supplies. 31 Table of Contents On February 23, 2024, we entered into an agreement to terminate the AstraZeneca U.S./RoW Agreement with AstraZeneca, effective as of February 25, 2024. Pursuant to the AstraZeneca Termination and Transition Agreement, AstraZeneca returns all of their non-China roxadustat rights to us, with the exception of South Korea, and provides certain assistance during a transition period. In addition, as a part of this AstraZeneca Termination and Transition Agreement, AstraZeneca will receive tiered mid-single digit royalties on FibroGen’s sales of roxadustat in the terminated territories, or thirty-five percent of all revenue FibroGen receives if it licenses or sells such rights to a third-party. Neither party incurred any early termination penalties. The aggregate amount of consideration for milestone and upfront payments received under the AstraZeneca U.S./RoW Agreement through the termination totaled $439.0 million. In addition, resulting from the AstraZeneca Termination and Transition Agreement, FibroGen and AstraZeneca settled the outstanding balances relating to past transactions under the AstraZeneca Master Supply Agreement. Accordingly, during the first quarter of 2024, we recorded a cumulative catch-up net adjustment of $25.7 million to the drug product revenue. 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 June 30, 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 (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 . 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 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 on 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. 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 $19.7 million and $49.6 million for the three months ended June 30, 2025 and 2024, and $59.5 million and $80.2 million for the six months ended June 30, 2025 and 2024, respectively, majority of which were from the sales to Falikang. 32 Table of Contents RESULTS OF OPERATIONS Revenue Three Months Ended June 30, Change Six Months Ended June 30, Change 2025 2024 $ % 2025 2024 $ % (dollars in thousands) Revenue: Development and other revenue $ 133 $ 269 $ (136 ) (51 ) % 277 1,147 (870 ) (76 ) % Drug product revenue, net 1,215 729 486 67 % 3,811 25,216 (21,405 ) (85 ) % Total revenue $ 1,348 $ 998 $ 350 35 % $ 4,088 $ 26,363 $ (22,275 ) (84 ) % 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 June 30, 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. 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. We recognize drug product revenue when we fulfill the inventory transfer obligations. The amount of variable consideration that is included in the transaction price may be constrained, and is included in the drug 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. Actual amounts of consideration ultimately received in the future may differ from our estimates, for which we will adjust these estimates and affect the drug product revenue in the period such variances become known. 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. 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 $0.4 million, or 35%, for the three months ended June 30, 2025, and decreased $22.3 million, or 84%, for the six months ended June 30, 2025, respectively, compared to the same periods a year ago for the reasons discussed in the sections below. Drug Product Revenue, Net Three Months Ended June 30, Change Six Months Ended June 30, Change 2025 2024 $ % 2025 2024 $ % (dollars in thousands) Drug product revenue, net: Astellas Japan Agreement $ 44 $ (366 ) $ 410 (112 ) % $ 1,825 $ (2,571 ) $ 4,396 (171 ) % Astellas Europe Agreement 1,171 1,095 76 7 % 1,986 2,116 (130 ) (6 ) % AstraZeneca U.S./RoW Agreement — — — NM — 25,671 (25,671 ) NM Total drug product revenue, net: $ 1,215 $ 729 $ 486 67 % $ 3,811 $ 25,216 $ (21,405 ) (85 ) % NM = Not meaningful Drug product revenue, net increased $0.5 million, or 67%, for the three months ended June 30, 2025, and decreased $21.4 million, or 85%, for the six months ended June 30, 2025, respectively, compared to the same periods a year ago. 33 Table of Contents Astellas Japan Agreement During the second quarter of 2025, we updated our estimate of variable consideration related to the API shipments fulfilled under the terms of Astellas Japan Amendment, and the adjustment to the drug product revenue for the three months ended June 30, 2025 was immaterial. 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 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 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. Specifically, the change in estimated variable consideration was based on the API held by Astellas at period end, adjusted to reflect the changes in the estimated bulk product strength mix intended to be manufactured by Astellas, and foreign exchange impacts, among others. As of June 30, 2025, the balances related to the API price true-up under the Astellas Japan Agreement were $0.6 million in accrued liabilities, representing our best estimate of the timing for these amounts to be paid. Astellas Europe Agreement We updated our estimate of variable consideration related to the bulk drug product transferred under the terms of the Astellas Europe Agreement and the Astellas EU Supply Agreement in prior years. 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, 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 $1.3 million from the related deferred revenue to accrued liabilities during the six months ended June 30, 2025. As of June 30, 2025, the balances related to the bulk drug product price true-up under the Astellas Europe Agreement and the Astellas EU Supply Agreement were $11.9 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 $1.2 million and $1.1 million for the three months ended June 30, 2025 and 2024, and $2.0 million and $2.1 million for the six months ended June 30, 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. AstraZeneca U.S./RoW Agreement As described above, pursuant to the AstraZeneca Termination and Transition Agreement related to the AstraZeneca U.S./RoW Agreement, FibroGen and AstraZeneca settled the outstanding balances relating to past transactions under the AstraZeneca Master Supply Agreement. Accordingly, during the first quarter of 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. 34 Table of Contents Operating Costs and Expenses Three Months Ended June 30, Change Six Months Ended June 30, Change 2025 2024 $ % 2025 2024 $ % (dollars in thousands) Operating costs and expenses Cost of goods sold $ 85 $ 140 $ (55 ) (39 ) % $ 337 $ 21,483 $ (21,146 ) (98 ) % Research and development 5,865 32,360 (26,495 ) (82 ) % 15,040 68,848 (53,808 ) (78 ) % Selling, general and administrative 7,057 14,906 (7,849 ) (53 ) % 15,164 31,622 (16,458 ) (52 ) % Restructuring charge 393 — 393 NM 519 — 519 NM Total operating costs and expenses $ 13,400 $ 47,406 $ (34,006 ) (72 ) % $ 31,060 $ 121,953 $ (90,893 ) (75 ) % NM = Not meaningful Total operating costs and expenses decreased $34.0 million, or 72%, and decreased $90.9 million, or 75%, for the six months ended June 30, 2025, respectively, compared to the same periods a year ago for the reasons discussed in the sections below. Cost of Goods Sold Cost of goods sold was immaterial for the three months ended June 30, 2025 and 2024. Cost of goods sold decreased $21.1 million, or 98%, for the six months ended June 30, 2025, compared to the same period a year ago. As described above, during the first quarter of 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 in the same period. Research and Development Expenses Research and development expenses consist of third-party research and development costs and the fully-burdened amount of costs associated with work performed under collaboration agreements. Research and development expenses include employee-related expenses for research and development functions, expenses incurred under agreements with clinical research organizations, other clinical and preclinical costs and allocated direct and indirect overhead costs, such as facilities costs, information technology costs and other overhead. We expense research and development costs as incurred. 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. We have implemented a significant cost reduction plan in the U.S. 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 six months ended June 30, 2025 and 2024: Phase of Three Months Ended June 30, Six Months Ended June 30, Product Candidate Development 2025 2024 2025 2024 (in thousands) FG-3246 Phase 2 $ 3,511 $ 5,843 $ 8,781 $ 11,304 Roxadustat Approved / Phase 3 1,105 1,551 1,562 3,722 Pamrevlumab Phase 2/3 627 18,391 2,796 38,617 Other research and development expenses 622 6,575 1,901 15,205 Total research and development expenses $ 5,865 $ 32,360 $ 15,040 $ 68,848 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. 35 Table of Contents Research and development expenses decreased $26.5 million, or 82%, for the three months ended June 30, 2025, and decreased $53.8 million, or 78%, for the six months ended June 30, 2025, respectively, compared to the same periods a year ago, primarily as a result of the net effect of the following: • Decrease of $8.4 million and $16.2 million in employee-related costs primarily due to the impact from reduction in force action in August 2024 and cost control efforts; • Decrease of $3.6 million and $10.5 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 $6.1 million and $11.9 million in facilities-related expenses due to cost control efforts including the lease termination in the third quarter of 2024; • Decrease of $3.6 million and $6.8 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; and • Decrease of $2.6 million and $5.0 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, 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. As a result, SG&A expenses have overall decreased and may continue to decrease over time. SG&A expenses decreased $7.8 million, or 53%, for the three months ended June 30, 2025, and decreased $16.5 million, or 52%, for the six months ended June 30, 2025, respectively, compared to the same periods a year ago, primarily as a result of the net effect of the following, respectively: • Decrease of $4.4 million and $8.0 million in employee-related costs primarily due to the impact from reduction in force action in August 2024 and cost control efforts; and • Decrease of $3.3 million and $5.8 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. Restructuring Charge 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 and six months ended June 30, 2025 was not material. Interest and Other, Net Three Months Ended June 30, Change Six Months Ended June 30, Change 2025 2024 $ % 2025 2024 $ % (dollars in thousands) Interest and other, net: Interest expense $ (2,009 ) $ (1,868 ) $ (141 ) 8 % $ (4,265 ) $ (3,960 ) $ (305 ) 8 % Interest income and other income (expenses), net 286 900 (614 ) (68 ) % 698 3,135 (2,437 ) (78 ) % Total interest and other, net $ (1,723 ) $ (968 ) $ (755 ) 78 % $ (3,567 ) $ (825 ) $ (2,742 ) 332 % 36 Table of Contents Interest Expense 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 and six months ended June 30, 2025, compared to the same periods a year ago. 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 $0.6 million, or 68%, and decreased $2.4 million, or 78%, for the six months ended June 30, 2025, respectively, compared to the same periods a year ago, primarily due to lower interest income resulting from lower cash equivalents and investment balances. Income Taxes Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 (dollars in thousands) Loss from continuing operations before income taxes $ (13,775 ) $ (47,376 ) $ (30,539 ) $ (96,415 ) Benefit from income taxes (92 ) (281 ) (90 ) (274 ) Effective tax rate 0.7 % 0.6 % 0.3 % 0.3 % Benefits for income taxes for the three and six months ended June 30, 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. 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 Beijing and its 51.1% interest in 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. 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 June 30, 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. 37 Table of Contents LIQUIDITY AND CAPITAL RESOURCES Financial Condition 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. 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. 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. Upon the closing of the sale of FibroGen International and its subsidiaries to AstraZeneca Treasury Limited, we intend to repay our term loan facility with the Lenders. 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 and six months ended June 30, 2025. As of June 30, 2025, we had cash and cash equivalents of $23.4 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. In addition, as of June 30, 2025, we had $96.5 million of cash and cash equivalents and $22.1 million of accounts receivable in China, which were included in the held for sale assets on 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), including both continuing operations and discontinued operations: Six Months Ended June 30, 2025 2024 Net cash provided by (used in): Operating activities $ 15,401 $ (99,157 ) Investing activities (29 ) 123,515 Financing activities (97 ) (133 ) Effect of exchange rate changes on cash and cash equivalents 2,388 2,801 Net increase in cash and cash equivalents $ 17,663 $ 27,026 38 Table of Contents Operating Activities Net cash provided by operating activities was $15.4 million for the six months ended June 30, 2025 and consisted primarily of net loss of $3.0 million adjusted for non-operating cash items of $6.2 million, and a net increase in operating assets and liabilities of $12.1 million. The significant non-operating cash items included stock-based compensation expense of $4.7 million. The significant items in the changes in operating assets and liabilities included the following: • Prepaid expenses and other current assets decreased $51.5 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; • Deferred revenue increased $7.5 million, primarily related to the $10.0 million additional deferred revenue during the quarter due to changes in estimate associated with the China performance obligation; offset by the $2.0 million royalty revenue recognized from the deferred revenue under the Astellas Europe Agreement during the period. See the Drug Product Revenue, Net section in Note 3, Collaboration Agreements, License Agreement and Revenues , to the condensed consolidated financial statements for details; • Inventory decreased $4.2 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 $3.7 million due to the interest expense of $4.1 million accrued, offset by the interest paid of $0.5 million during the period. See Note 8, Liability Related to Sale of Future Revenues , to the condensed consolidated financial statements for details; • Accrued and other liabilities decreased $30.7 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. The accrued and other liabilities were also impacted by cost control efforts and the timing of invoicing and payment; • Accounts payable decreased $21.7 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; and • Accounts receivable increased $3.0 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. 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. Net cash used in operating activities was $99.2 million for the six months ended June 30, 2024 and consisted primarily of net loss of $48.5 million adjusted for non-operating cash items of $15.8 million, and a net decrease in operating assets and liabilities of $66.5 million. The significant non-operating cash items included stock-based compensation expense of $17.4 million. The significant items in the changes in operating assets and liabilities included the following: • Accrued and other liabilities decreased $52.7 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; bonus and severance payouts totaling $19.1 million, offset by accrued inventory related cost of $8.5 million as of June 30, 2024, as part of the cost of goods sold resulting from the above-mentioned termination of the AstraZeneca U.S./RoW agreement. The accrued and other liabilities were also impacted by the timing of invoicing and payment; • Deferred revenue decreased $29.5 million, primarily related to the $20.6 million product revenue recognized from the previously deferred revenue of the China performance obligation during the six months ended June 30, 2023. In addition, the decrease in deferred revenue was also related to the $2.1 million royalty revenue recognized from the deferred revenue under the Astellas Europe Agreement, and the reclassification of $5.4 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 six months ended June 30, 2023; • Accounts payable decreased $8.0 million, primarily driven by the timing of invoicing and payments; 39 Table of Contents • Accrued interest expense related to sale of future revenues decreased $1.9 million due to the $5.7 million interest paid, offset by the interest expense of $3.7 million accrued during the six months ended June 30, 2024; • Inventory decreased $15.6 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; • Accounts receivable decreased $6.0 million, primarily driven by the receipt of the billings under our collaboration and license agreements; and • Prepaid expenses and other current assets decreased $4.5 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 and proceeds from the maturity and sale of investments. Net cash used in investing activities was immaterial for the six months ended June 30, 2025. Net cash provided by investing activities was $123.5 million for the six months ended June 30, 2024 and consisted primarily 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. 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 six months ended June 30, 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 and the sale of FibroGen International and its subsidiaries to AstraZeneca Treasury Limited, 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. We expect to continue to incur significant research and development expenses to invest in our other programs and there is no guarantee that sufficient funds will be available to continue to fund these development efforts through commercialization or otherwise. We are also subject to all the risks related to the development and commercialization of novel therapeutics, and we may encounter unforeseen expenses, difficulties, complications, delays and other factors outlined under Part II, Item 1A “ Risk Factors ” in this Quarterly Report on Form 10-Q, as well as unknown factors that may adversely affect our business. We anticipate that we will need substantial additional funding in connection with our continuing operations. 40 Table of Contents If we are unable to complete the above mentioned sale of FibroGen International and its subsidiaries to AstraZeneca Treasury Limited, access additional cash from our China operations, or raise additional capital in the U.S., 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 $18.75 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 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. at any time through equity, equity-linked, or debt financing arrangements or from other sources. There can be no assurances that these plans will be successful. As a result of these factors, we 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. Our future capital requirements and the adequacy of available funds will depend on many factors, including those set forth under Part II, Item 1A “ Risk Factors ” in this Quarterly Report on Form 10-Q. We may not be able to secure additional financing to meet our operating requirements on acceptable terms, or at all. If we raise additional funds by issuing equity or equity-linked securities, the ownership of our existing stockholders will be diluted. If we raise additional financing by the incurrence of indebtedness, we will be subject to increased fixed payment obligations and could also be subject to restrictive covenants, such as limitations on our ability to incur additional debt, and other operating restrictions that could adversely impact our ability to conduct our business. If we are unable to obtain funding, we could delay, reduce or eliminate research and development programs, product portfolio development or future commercialization efforts which could adversely affect our business prospects. Commitments and Contingencies Contractual Obligations As of June 30, 2025, we had outstanding total non-cancelable purchase obligations of $3.1 million for general purchases and other programs and $0.5 million for manufacture and supply of roxadustat, 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 June 30, 2025, we had $73.7 million of senior secured term loan facilities balance on the condensed consolidated balance sheets, which is subject for repayment within the next 12 months. In addition, we are obliged to pay interest on a monthly basis, for which we expect to pay a total of $9.0 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 June 30, 2025, we had $63.0 million of liability related to sale of future revenues in the condensed consolidated balance sheets, $1.7 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. CRITICAL ACCOUNTING POLICIES AND ESTIMATES Our management’s discussion and analysis of our financial condition and results of operations are based on our financial statements, which have been prepared in accordance with accounting principles generally accepted in the U.S. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, and expenses and the disclosure of contingent assets and liabilities in our financial statements. We evaluate our estimates and judgments on an ongoing basis. We base our estimates on historical experience, known trends and events, and various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. 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 six months ended June 30, 2025 compared with the disclosures in Part II, Item 7 of our 2024 Form 10-K. 41 Table of Contents ITEM 3. QUANTITATIVE AND QUALITAT IVE DISCLOSURES ABOUT MARKET RISK. 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.