On Tuesday, H.C. Wainwright initiated coverage on shares of FibroGen Inc . (NASDAQ:FGEN), currently valued at $32.76 million market cap, with a Buy rating and set a price target of $10.00. According to InvestingPro analysis, the stock appears undervalued based on its Fair Value calculation, despite falling nearly 70% over the past six months.
The firm highlighted the potential of FibroGen's antibody drug conjugate (ADC) pipeline, particularly its lead asset FG-3246, which targets CD46 expressing tumors and is currently in development for treating metastatic castration-resistant prostate cancer (mCRPC).
While InvestingPro data shows the company maintains more cash than debt on its balance sheet, it's worth noting that the company's overall financial health score is categorized as weak.
In addition to FG-3246, FibroGen is advancing two preclinical ADCs, FG-3165 and FG-3175, aimed at undisclosed solid tumors. The company also has a revenue-generating asset, roxadustat, which is sold in China for anemia resulting from chronic kidney disease (CKD) and is seeking approval in the U.S. for anemia caused by low-risk myelodysplastic syndromes (MDS-anemia).
The analyst noted a perceived disconnect between the performance of roxadustat and investor sentiment, attributing the stock's lackluster performance to the majority of its revenue coming from markets outside the U.S., as well as its previous failure in CKD-anemia stateside. Recent financial data from InvestingPro shows revenue growth of 16.15% in the last twelve months, though the company struggles with negative gross profit margins of -8.42%.
Get access to 12 additional ProTips and comprehensive analysis with an InvestingPro subscription. However, the firm anticipates that a successful launch of roxadustat for MDS-anemia in the U.S. could positively change the stock's trajectory.
H.C. Wainwright posits that the combination of a revenue-generating product in development for a new indication, along with a pipeline of promising ADC therapies for mCRPC and other indications, positions FibroGen for a potential turnaround and growth in the near future.
In other recent news, FibroGen Inc. has seen significant developments. The company has appointed David DeLucia as its new Chief Financial Officer, who will be tasked with leading FibroGen's global finance organization. DeLucia brings nearly 15 years of financial leadership in the life sciences industry to the role.
FibroGen has also reported strong Q3 sales, particularly in China, where roxadustat sales reached $96.6 million, marking a 25% increase year-over-year. The company's share of these sales was $46.2 million, up 57% from the previous year. Despite a net loss for the quarter, the company's robust cash position, standing at $160 million, is projected to sustain operations into 2026.
Further, FibroGen is set to initiate a Phase 2 trial for FG-3246 in Q1 2025 and is currently exploring partnership opportunities after regaining U.S. rights for roxadustat. The company's full-year net product revenue guidance remains within the range of $135 million to $150 million.
Moreover, roxadustat sales guidance in China has been revised upwards to $330 million to $350 million. These are the recent developments surrounding FibroGen.
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