What 3 FibroGen Analysts Are Expecting From Thursday's Roxadustat Adcom Verdict

FibroGen, Inc. (NASDAQ: FGEN) has a key catalyst Thursday when FDA's Cardiovascular and Renal Drugs Advisory Committee will issue its recommendation on the company's new drug application for roxadustat.

The committee is scheduled to meet between 9:30 a.m. and 5:30 p.m.

Roxadustat was jointly developed by FibroGen and AstraZeneca PLC (NASDAQ: AZN) and has been approved in Japan and China for the treatment of anemia related to chronic kidney disease in both dialysis-dependent, or DD, patients and non-dialysis dependent, or NDD, patients.

The briefing document for discussion by the AdCom made public Tuesday showed FDA staffers were concerned about evidence of blood clotting in NDD and DD patients.

Q3 US Launch Estimate at Risk, SVB Leerink Says: The points of discussion for the AdCom would be whether roxadustat should be approved; whether a black box warning should be issued; and whether a broader label, including NDD patients, can be accorded, SVB Leerink analyst Geoffrey Porges said in a note.

The briefing document is negative for a potential FDA nod in the larger NDD patients and at best, neutral for approval in DD patients, the analyst said. The FDA may be inclined to restrict the approval to just DD chronic kidney disease, he added.

"We believe the FDA's view of roxa's safety is incrementally negative compared to FGEN's previous commentary and is also worse than our prior expectations."

A black box warning for risk of thromboembolic events is nearly certain, Porges said. 

On efficacy, the FDA seems to think roxadustat is only comparable to erythropoietin-stimulating agents in terms of increasing hemoglobin as opposed to the superior efficacy profile some were expecting, the analyst said. 

Porges said he expects FibroGen shares to remain under pressure until the AdCom and could suffer further downside depending on the tone of the AdCom's discussion and votes regarding the breadth of the labeled indication.

The briefing documents suggest expectations for a third-quarter U.S. launch are at risk, according to SVB Leerink. 

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Why RayJay Says Approval In Both Settings Unlikely: It is highly unlikely the AdCom will be supportive of approval until evidence for proposed thrombosis risk mitigation strategies are generated, Raymond James analyst Danielle Brill said in a note. 

Additionally, there were multiple other safety imbalances with Roxadustat such as mortality, infections, seizures, highlighted by the agency which should preclude approval, according to the analyst.

The pane will vote separately for NDD and DD on whether roxadustat's benefits outweigh its risks. A discussion will occur prior to each vote about whether a treatment algorithm, namely dose titration, Hb target levels, could enhance safety, she said.

The best-case scenario at this juncture is a black box warning and restrictive labeling, Brill said.

Given the number of severe safety signals identified and considering roxa's overall safety profile appears inferior to ESAs, it is highly unlikely the panel will vote in favor of approval in either setting, RayJay said.

Without roxa in the U.S,, FibroGen shares are worth about $18-$20, Brill said. 

Adcom Verdict Key To FDA Decision, HC Wainwright Says: FDA sentiment is tilted to the negative side and the Adcom will likely have a great impact on the FDA's final decision on roxadustat, H.C. Wainwright analyst Edwin Zhang said.

H.C. Wainwright maintained a Neutral rating with no price target given the uncertainties around roxa's Adcom/approval, potential label and commercial launch.

After slipping about 3% Tuesday in reaction to the briefing document, FibroGen shares gained 1.02% back in Wednesday's session, closing at $24.84. 

The shares have never really recovered from an early April slump, when the company disclosed improprieties with respect to safety data submitted the FDA.

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