What changed in this filing

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Item 9A. Controls and Procedures

2021-03-01 compared with 2020-03-02 · 59 added, 13 removed, 338 unchanged (18% of the section changed)

6 unchanged sentences

Securities and Exchange Commission’s rules and forms and that such information is accumulated and communicated to the company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Based on management’s evaluation, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures were effective as of December 31, 2019 at the reasonable assurance level.

Based on our evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were not effective as of December 31, 2020 because of the material weaknesses in our internal control over financial reporting described below.

Management’s Annual Report on Internal Control over Financial Reporting

1 unchanged sentence

Our internal control over financial reporting is a process established under the supervision of and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer.

Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In addition, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management, with the participation and under the supervision of our Chief Executive Officer and our Chief Financial Officer , evaluated our internal control over financial reporting as of December 31, 2020, the end of our fiscal year, using the criteria established in Internal Control - Integrated Framework (2013) set forth by the Committee of Sponsoring Organizations of the Treadway Commission.

Based on management’s evaluation of our internal control over financial reporting, management concluded that our internal control over financial reporting was effective as of December 31, 2019.

The effectiveness of the Company’s internal control over financial reporting as of December 31, 2019 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which appears herein.

Based on our evaluation, our management has concluded that our internal control over financial reporting was not effective as of December 31, 2020 because of the material weaknesses in our internal control over financial reporting described below.

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of annual or interim financial statements will not be prevented or detected on a timely basis.

As of September 30, 2020, we have identified a material weakness in the risk assessment component of internal control as we did not appropriately design and maintain an effective risk assessment process at a precise enough level to identify new and evolving risks of material misstatement to the financial statements as a result of changes in our business operation.

This material weakness gave rise to the following additional control deficiencies, which we also determined to be material weaknesses.

We did not design and maintain effective controls related to the timely identification of shipments associated with drug product revenue, and we did not design and maintain effective controls related to the timely identification of changes in estimated variable consideration related to drug product revenue.

Each of these material weaknesses could result in material misstatements in the drug product revenue, contract asset or contract liability account balances or disclosures in our annual or interim consolidated financial statements that would not be prevented or detected.

The material weaknesses described above did not result in any material misstatements of our consolidated financial statements or disclosures, but did result in immaterial out-of-period adjustments to drug product revenue related to pre-commercial shipments of drug product, contract assets and contract liabilities, and related financial statement disclosures during the quarter ended September 30, 2020.

The effectiveness of the Company’s internal control over financial reporting as of December 31, 2020 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report that appears herein.

Remediation Plan and Status

Our Board of Directors and management are committed to maintaining a strong internal control environment.

We have developed a detailed remediation plan and are making progress of what will be a multi-step remediation process to fully remediate the material weaknesses described above.

Specifically, as of December 31, 2020, we have started, and will continue to the process of the steps including, but not limited to, the following:

We have performed a comprehensive risk assessment process, and will continue to refine the risk assessment, to identify and design our control activities related to the above mentioned material weaknesses;

We have identified and designed new controls and procedures associated with drug product revenue, and where applicable implemented new procedures and controls during the fourth quarter of 2020, and will continue to implement new procedures and controls in the future;

We started the process to hire additional resources to strengthen our accounting and internal audit functions.

In addition, we will continue to assess risks on a continuous basis to timely identify new exposures or risk categories as business practices change, and we plan to conduct a comprehensive review and, as applicable, update our existing internal control framework to ensure that it has identified, developed and deployed the appropriate business process controls to meet the objectives and address the risks identified.

The material weaknesses will not be considered remediated until the applicable controls operate for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively.

We believe the measures described above will remediate these material weaknesses and strengthen our internal control over financial reporting.

As we continue to evaluate and work to remediate these material weaknesses, we may determine to take additional measures to address these deficiencies or determine to modify certain of the remediation measures described above.

Limitations on the Effectiveness of Controls

In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.

In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs.

Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

Changes in Internal Control over Financial Reporting

4 unchanged sentences

Code of Conduct

We have adopted a Code of Business Conduct which applies to all of our directors, officers and employees.

We have adopted a Code of Business Conduct that applies to all of our directors, officers and employees.

A copy of our Code of Business Conduct can be found on our website ( www.FibroGen.com ) under “Corporate Governance.” The contents of our website are not a part of this report.

78 unchanged sentences

Amended and Restated License, Development and Commercialization Agreement (China) by and among FibroGen China Anemia Holdings, Ltd., Beijing FibroGen Medical Technology Development Co., Ltd., FibroGen International (Hong Kong) Limited and AstraZeneca AB, effective as of July 30, 2013.

Amended and Restated License, Development and Commercialization Agreement by and between Registrant and AstraZeneca AB, effective as of July 30, 2013.

Amended and Restated License, Development and Commercialization Agreement (for the U.S.

and Certain Other Territories) by and between FibroGen, Inc.

and AstraZeneca AB, effective as of July 30, 2013.

License Agreement by and between FibroGen, Inc.

163 unchanged sentences

and Catalent Pharma Solutions, LLC, effective as of January 1, 2020

Master Supply Agreement by and among FibroGen, Inc., Shanghai SynTheAll Pharmaceutical Co., Ltd.

and STA Pharmaceutical Hong Kong Limited, effective March 2, 2020

Amendment No.1 to Master Supply Agreement by and among FibroGen, Inc., Shanghai SynTheAll Pharmaceutical Co., Ltd.

and STA Pharmaceutical Hong Kong Limited, effective May 11, 2020

Second Amended and Restated License, Development and Commercialization Agreement by and among FibroGen China Anemia Holdings, Ltd., FibroGen China Medical Technology Development Co., Ltd., FibroGen International (Hong Kong) Limited, and AstraZeneca AB, effective July 1, 2020

Amendment No.

1 to the Amended and Restated License, Development and Commercialization Agreement by and between FibroGen, Inc.

and AstraZeneca AB, effective July 1, 2020

Amendment No.

2 to Master Supply Agreement by and among FibroGen, Inc., Shanghai SynTheAll Pharmaceutical Co., Ltd.

and STA Pharmaceutical Hong Kong Limited, effective July 24, 2020

Master Supply Agreement by and between FibroGen, Inc.

and AstraZeneca UK Limited, effective September 10, 2020

Master Services Agreement by and between FibroGen, Inc.

and Samsung Biologics Co., Ltd., effective as of October 30, 2020

Product Specific Agreement by and between FibroGen, Inc.

and Samsung Biologics Co., Ltd., effective as of October 30, 2020

Offer Letter, by and between FibroGen, Inc.

10 unchanged sentences

and Enrique Conterno, dated as of December 17, 2019.

Offer Letter, by and between FibroGen, Inc.

and Thane Wettig, dated as of May 7, 2020.

Offer Letter, by and between FibroGen, Inc.

and Mark Eisner, dated as of October 22, 2020.

Form of Executive Officer Change in Control and Severance Agreement

13 unchanged sentences

Filed herewith.

Confidential Information Omitted.

Portions of this exhibit (indicated by asterisks) have been omitted as the Company has determined that (i) the omitted information is not material and (ii) the omitted information would likely cause competitive harm if publicly disclosed.

Indicates a management contract or compensatory plan.

31 unchanged sentences

Suzanne Blaug

/s/ Aoife Brennan, M.B., B.Ch.

March 1, 2021

Aoife Brennan, M.B., B.Ch.

/s/ Benjamin F.

Cravatt, Ph.D.

March 1, 2021

Cravatt, Ph.D.

/s/ Jeffrey L.

13 unchanged sentences

March 1, 2021

/s/ Roberto Pedro Rosenkranz, Ph.D., M.B.A.

March 2, 2020

Roberto Pedro Rosenkranz, Ph.D., M.B.A.

/s/ Toshinari Tamura, Ph.D.

March 2, 2020

Toshinari Tamura, Ph.D.

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-K

Item 9A. Controls and Procedures