– By Barry Cohen
A drug from San Francisco-based FibroGen Inc. (NASDAQ:FGEN) is one of five medications the Food and Drug Administration is expected to rule on in the next three months in what BioPharma Dive called “the most consequential quarter in the agency’s history.”
FibroGen’s roxadustat could become the first drug in pill form to treat anemia, a condition in which the blood doesn’t have enough healthy red cells. Up till now, people with anemia and damaged kidneys have received injectable biologic drugs like Amgen Inc.’s (NASDAQ:AMGN) Epogen and Aranesp. Roxadustat is the closest to approval among similar pills that are meant to trick the body into thinking it’s in low-oxygen. The drug is a collaborative effort between FibroGen and AstraZeneca (NASDAQ:AZN).
Roxadustat has been shown to work like biologics in patients with chronic kidney disease either on or off of dialysis; it has already been approved in China and Japan. During a corporate presentation last month, FibroBen said the potential market for drugs to treat anemia across a full spectrum of diseases could be in the “multi-billions.”
One prospective competitor was seemingly taken off the board when Akebia Therapeutics Inc. (NASDAQ:AKBA) said the drug it is partnering on with Otsuka Holdings Co Ltd. (OTSKY), vadadustat, showed serious side effects. Analysts at RBC Capital Markets thought Akebia’s failure could make the FDA put Roxadustat under a microscope, according to a BioPharma Dive article. But SVB Leerink didn’t seem concerned, calling it a “goldilocks scenario” that set back a key competitor but didn’t affect similar drugs.
Anemia is widespread. According to the American Society of Hematology, it is the most common hematological disorder and affects more than 3 million Americans every year. Globally, more than 1.6 billion get affected by anemia, which is equal to 22.5% of the world population.
FibroGen has another promising drug in the pipeline: pamrevlumab, a potential treatment for a broad array of fibrotic and proliferative disorders that affect organ systems throughout the body. The drug is in phase 3 clinical development for the treatment of locally advanced unresectable pancreatic cancer and Duchenne muscular dystrophy,
FibroGen investors could use some good news. Trading at just under $44, the company’s stock is about where it was at the beginning of the year. However, since April it has advanced about $10.
The company’s second-quarter sales were $42.9 million compared to $191.6 million for the same period a year earlier. Net loss for the second quarter of 2020 was $85.3 million, or a net loss of 95 cents per basic and diluted share, compared to a net income of $116.0 million, or $1.34 net income per basic share and $1.26 per diluted share, one year ago.
As of June 30, FibroGen had $716 million in cash, cash equivalents, restricted time deposits, investments and receivables.
The eight analysts offering 12-month price forecasts for FibroGen set a median target of $62.50, with a high estimate of $90 and a low estimate of $44. The stock is rated a buy.
The other key drugs that could get approval before the end of the year include the Covid-19 vaccines from Pfizer Inc. (NYSE:PFE) and Moderna Inc. (MRNA); Regeneron Pharmaceuticals Inc.’s (NASDAQ:REGN) treatment for Ebola; the Alkermes (NASDAQ:ALKS) medication for schizophrenia and bipolar disorder; and Bristol-Myers Squibb Co.’s (NYSE:BMY) liso-cel for non-Hodgkin lymphoma.
Disclosure: The author has positions in Amgen, Pfizer and Bristol-Myers.
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This article first appeared on GuruFocus.