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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

Form 10-Q

 

(Mark One)

☑

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2023

OR

☐

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 001-36740

 

FIBROGEN, INC.

(Exact name of registrant as specified in its charter)

 

Delaware

 

77-0357827

(State or Other Jurisdiction of

Incorporation or Organization)

 

(I.R.S. Employer

Identification No.)

409 Illinois Street

 

 

San Francisco, CA

 

94158

(Address of Principal Executive Offices)

 

(Zip Code)

(415) 978-1200

Registrant’s telephone number, including area code:

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

Trading Symbol

Name of each exchange on which registered

Common Stock, $0.01 par value

FGEN

The Nasdaq Global Select Market

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:

Large accelerated filer

☑

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

 

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Exchange Act Rule 12b-2). Yes ☐ No ☑

The number of shares of common stock outstanding as of October 31, 2023 was 98,340,219.

 

 

 

FIBROGEN, INC.

TABLE OF CONTENTS

 

 

 

Page

PART I—FINANCIAL INFORMATION

 

 

 

 

 

 

Item 1.

Financial Statements

 

2

 

Condensed Consolidated Balance Sheets as of September 30, 2023 and December 31, 2022 (Unaudited)

 

2

 

Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2023 and 2022 (Unaudited)

 

3

 

Condensed Consolidated Statements of Comprehensive Loss for the Three and Nine Months Ended September 30, 2023 and 2022 (Unaudited)

 

4

 

Condensed Consolidated Statements of Changes in Stockholders’ Equity (Deficit) for the Three and Nine Months Ended September 30, 2023 and 2022 (Unaudited)

 

5

 

Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2023 and 2022 (Unaudited)

 

7

 

Notes to the Condensed Consolidated Financial Statements (Unaudited)

 

8

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

28

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

 

49

Item 4.

Controls and Procedures

 

49

 

 

 

 

PART II—OTHER INFORMATION

 

 

 

 

 

 

Item 1.

Legal Proceedings

 

50

Item 1A.

Risk Factors

 

50

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

 

88

Item 3.

Defaults Upon Senior Securities

 

88

Item 4.

Mine Safety Disclosures

 

88

Item 5.

Other Information

 

88

Item 6.

Exhibits

 

89

 

Signatures

 

90

 

1

Table of Contents

FIBROGEN, INC.

PART I—FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except per share amounts)

(Unaudited)

 

 

 

September 30, 2023

 

 

December 31, 2022

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

120,914

 

 

$

155,700

 

Short-term investments

 

 

130,426

 

 

 

266,308

 

Accounts receivable, net ($22,916 and $12,088 from related parties)

 

 

31,694

 

 

 

16,299

 

Inventories

 

 

40,696

 

 

 

40,436

 

Prepaid expenses and other current assets

 

 

40,378

 

 

 

14,083

 

Total current assets

 

 

364,108

 

 

 

492,826

 

Restricted time deposits

 

 

2,072

 

 

 

2,072

 

Long-term investments

 

 

—

 

 

 

4,348

 

Property and equipment, net

 

 

14,512

 

 

 

20,605

 

Equity method investment in unconsolidated variable interest entity

 

 

4,534

 

 

 

5,061

 

Operating lease right-of-use assets

 

 

71,248

 

 

 

79,893

 

Other assets

 

 

3,952

 

 

 

5,282

 

Total assets

 

$

460,426

 

 

$

610,087

 

 

 

 

 

 

 

Liabilities, redeemable non-controlling interests and deficit

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

19,220

 

 

$

30,758

 

Accrued and other current liabilities ($29,157 and $63,886 to a related party)

 

 

170,986

 

 

 

219,773

 

Deferred revenue ($5,482 and $9,259 to related parties)

 

 

7,325

 

 

 

12,739

 

Operating lease liabilities, current

 

 

11,884

 

 

 

10,292

 

Total current liabilities

 

 

209,415

 

 

 

273,562

 

Product development obligations

 

 

16,942

 

 

 

16,917

 

Deferred revenue, net of current ($4,671 and $31,044 to a related party)

 

 

154,206

 

 

 

185,722

 

Operating lease liabilities, non-current

 

 

70,035

 

 

 

79,593

 

Senior secured term loan facilities, non-current

 

 

71,666

 

 

 

—

 

Liability related to sale of future revenues, non-current

 

 

49,109

 

 

 

49,333

 

Other long-term liabilities ($668 and $0 to a related party)

 

 

4,255

 

 

 

6,440

 

Total liabilities

 

 

575,628

 

 

 

611,567

 

 

 

 

 

 

 

Commitments and Contingencies (Note 12)

 

 

 

 

 

 

 

 

 

 

 

 

Redeemable non-controlling interests

 

 

21,480

 

 

 

—

 

Stockholders’ deficit:

 

 

 

 

 

 

Preferred stock, $0.01 par value; 125,000 shares authorized; no shares issued
   and outstanding at September 30, 2023 and December 31, 2022

 

 

—

 

 

 

—

 

Common stock, $0.01 par value; 225,000 shares authorized at September 30, 2023
  and December 31, 2022; 98,339 and 94,166 shares issued and outstanding at
  September 30, 2023 and December 31, 2022

 

 

983

 

 

 

942

 

Additional paid-in capital

 

 

1,634,459

 

 

 

1,541,019

 

Accumulated other comprehensive loss

 

 

(6,923

)

 

 

(5,720

)

Accumulated deficit

 

 

(1,785,688

)

 

 

(1,557,688

)

Total stockholders’ deficit attributable to FibroGen

 

 

(157,169

)

 

 

(21,447

)

Nonredeemable non-controlling interests

 

 

20,487

 

 

 

19,967

 

Total deficit

 

 

(136,682

)

 

 

(1,480

)

Total liabilities, redeemable non-controlling interests and deficit

 

$

460,426

 

 

$

610,087

 

 

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

2

Table of Contents

FIBROGEN, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

(Unaudited)

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

License revenue (includes $0, $0, $0 and $22,590
   from a related party)

 

$

2,649

 

 

$

—

 

 

$

9,649

 

 

$

22,590

 

Development and other revenue (includes $2,358, $1,414, $5,821,
   and $8,419 from a related party)

 

 

6,775

 

 

 

2,453

 

 

 

15,825

 

 

 

19,672

 

Product revenue, net (includes $26,463, $14,914, $68,347 and $50,873
   from a related party)

 

 

29,390

 

 

 

17,359

 

 

 

77,439

 

 

 

59,495

 

Drug product revenue, net (from a related party)

 

 

1,320

 

 

 

(4,077

)

 

 

17,701

 

 

 

4,610

 

Total revenue

 

 

40,134

 

 

 

15,735

 

 

 

120,614

 

 

 

106,367

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Cost of goods sold

 

 

4,243

 

 

 

4,308

 

 

 

13,441

 

 

 

15,355

 

Research and development

 

 

61,194

 

 

 

75,182

 

 

 

231,158

 

 

 

235,163

 

Selling, general and administrative

 

 

25,573

 

 

 

29,902

 

 

 

91,029

 

 

 

90,722

 

Restructuring charge

 

 

12,606

 

 

 

—

 

 

 

12,606

 

 

 

—

 

Total operating costs and expenses

 

 

103,616

 

 

 

109,392

 

 

 

348,234

 

 

 

341,240

 

Loss from operations

 

 

(63,482

)

 

 

(93,657

)

 

 

(227,620

)

 

 

(234,873

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest and other, net

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

(5,022

)

 

 

(84

)

 

 

(10,464

)

 

 

(321

)

Interest income and other income (expenses), net

 

 

4,296

 

 

 

1,798

 

 

 

7,984

 

 

 

6,672

 

Total interest and other, net

 

 

(726

)

 

 

1,714

 

 

 

(2,480

)

 

 

6,351

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss before income taxes

 

 

(64,208

)

 

 

(91,943

)

 

 

(230,100

)

 

 

(228,522

)

Provision for (benefit from) income taxes

 

 

84

 

 

 

114

 

 

 

(77

)

 

 

250

 

Investment income in unconsolidated variable
   interest entity

 

 

677

 

 

 

407

 

 

 

2,023

 

 

 

1,293

 

Net loss

 

$

(63,615

)

 

$

(91,650

)

 

$

(228,000

)

 

$

(227,479

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss per share - basic and diluted

 

$

(0.65

)

 

$

(0.98

)

 

$

(2.35

)

 

$

(2.43

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of common shares used to calculate
   net loss per share - basic and diluted

 

 

98,245

 

 

 

93,767

 

 

 

96,901

 

 

 

93,431

 

 

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

3

Table of Contents

FIBROGEN, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(In thousands)

(Unaudited)

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Net loss

 

$

(63,615

)

 

$

(91,650

)

 

$

(228,000

)

 

$

(227,479

)

Other comprehensive income (loss):

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustments

 

 

(1,033

)

 

 

(436

)

 

 

(3,618

)

 

 

(28

)

Available-for-sale investments:

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized gain (loss) on investments, net of tax effect

 

 

360

 

 

 

20

 

 

 

2,415

 

 

 

(3,155

)

Other comprehensive gain (loss), net of taxes

 

 

(673

)

 

 

(416

)

 

 

(1,203

)

 

 

(3,183

)

Comprehensive loss

 

 

(64,288

)

 

 

(92,066

)

 

 

(229,203

)

 

 

(230,662

)

 

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

 

4

Table of Contents

FIBROGEN, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)

(In thousands, except share data)

(Unaudited)

 

 

 

For The Three Month Period

 

 

 

Common Stock

 

 

Additional
Paid-in

 

 

Accumulated
Other
Comprehensive

 

 

Accumulated

 

 

Nonredeemable
Non-Controlling

 

 

Total

 

 

 

Redeemable
Non-Controlling

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Income (Loss)

 

 

Deficit

 

 

Interests

 

 

Equity (Deficit)

 

 

 

Interests

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Note 3)

 

Balance at June 30,
   2023

 

 

98,204,243

 

 

$

982

 

 

$

1,625,067

 

 

$

(6,250

)

 

$

(1,722,073

)

 

$

20,487

 

 

$

(81,787

)

 

 

$

21,480

 

Net loss

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(63,615

)

 

 

—

 

 

 

(63,615

)

 

 

 

—

 

Change in unrealized gain or
   loss on investments

 

 

—

 

 

 

—

 

 

 

—

 

 

 

360

 

 

 

—

 

 

 

—

 

 

 

360

 

 

 

 

—

 

Foreign currency translation
   adjustments

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(1,033

)

 

 

—

 

 

 

—

 

 

 

(1,033

)

 

 

 

—

 

Shares issued from stock
   plans, net of payroll taxes
   paid

 

 

134,880

 

 

 

1

 

 

 

(84

)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(83

)

 

 

 

—

 

Stock-based compensation

 

 

—

 

 

 

—

 

 

 

9,476

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

9,476

 

 

 

 

—

 

Balance at September 30,
   2023

 

 

98,339,123

 

 

$

983

 

 

$

1,634,459

 

 

$

(6,923

)

 

$

(1,785,688

)

 

$

20,487

 

 

$

(136,682

)

 

 

$

21,480

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at June 30,
   2022

 

 

93,733,034

 

 

$

937

 

 

$

1,509,636

 

 

$

(6,930

)

 

$

(1,399,863

)

 

$

19,967

 

 

$

123,747

 

 

 

$

—

 

Net loss

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(91,650

)

 

 

—

 

 

 

(91,650

)

 

 

 

—

 

Change in unrealized gain or
   loss on investments

 

 

—

 

 

 

—

 

 

 

—

 

 

 

20

 

 

 

—

 

 

 

—

 

 

 

20

 

 

 

 

—

 

Foreign currency translation
   adjustments

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(436

)

 

 

—

 

 

 

—

 

 

 

(436

)

 

 

 

—

 

Shares issued from stock
   plans, net of payroll taxes
   paid

 

 

203,306

 

 

 

2

 

 

 

(995

)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(993

)

 

 

 

—

 

Stock-based compensation

 

 

—

 

 

 

—

 

 

 

15,585

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

15,585

 

 

 

 

—

 

Balance at September 30,
   2022

 

 

93,936,340

 

 

$

939

 

 

$

1,524,226

 

 

$

(7,346

)

 

$

(1,491,513

)

 

$

19,967

 

 

$

46,273

 

 

 

$

—

 

 

5

Table of Contents

FIBROGEN, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT) (CONTINUED)

(In thousands, except share data)

(Unaudited)

 

 

 

For The Nine Month Period

 

 

 

Common Stock

 

 

Additional
Paid-in

 

 

Accumulated
Other
Comprehensive

 

 

Accumulated

 

 

Nonredeemable
Non-Controlling

 

 

Total

 

 

 

Redeemable
Non-Controlling

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Loss

 

 

Deficit

 

 

Interests

 

 

Equity (Deficit)

 

 

 

Interests