Piper Sandler is "incrementally positive" on Akebia after "surprising" FibroGen update
Shares of FibroGen (FGEN) are under pressure on Wednesday after the company provided "clarification of certain prior disclosures of U.S. primary cardiovascular safety analyses" from the Phase 3 program for roxadustat for the treatment of anemia of chronic kidney disease, or CKD. The company said it has become "aware that the primary cardiovascular safety analyses included post-hoc changes to the stratification factors." The company also announced that the FDA has scheduled a Cardiovascular and Renal Drug Advisory Committee on July 15 to review the New Drug Application for roxadustat. Following the announcements, both H.C. Wainwright and Mizuho downgraded FibroGen to Neutral.
ROXADUSTAST NDA REVIEW: FibroGen said the FDA has informed the company it has tentatively scheduled a Cardiovascular and Renal Drug Advisory Committee, or CRDAC, on July 15, 2021 to review the New Drug Application for roxadustat for the treatment of anemia of chronic kidney disease in both dialysis-dependent and non-dialysis-dependent patients. The NDA submission was supported by positive results from a global Phase 3 program encompassing more than 8,000 patients. Roxadustat is approved and launched in China and Japan for the treatment of anemia of CKD in patients on dialysis and not on dialysis.
FibroGen has also provided "clarification of certain prior disclosures of U.S. primary cardiovascular safety analyses" from the roxadustat Phase 3 program for the treatment of anemia of chronic kidney disease. “As members of senior management were preparing for the upcoming FDA Advisory Committee meeting, we became aware that the primary cardiovascular safety analyses included post-hoc changes to the stratification factors,” said Enrique Conterno, FibroGen's CEO. “While all of the analyses set forth below, including the differences in the stratification factors, were included in the NDA, we promptly decided to clarify this issue with the FDA and communicate with the scientific and investment communities.”
“It is important to emphasize that this does not impact our conclusion regarding the comparability, with respect to cardiovascular safety, of roxadustat to epoetin-alfa in dialysis-dependent patients and to placebo in non-dialysis dependent patients. We continue to have confidence in roxadustat’s benefit risk profile,” added the executive.
MOVING TO THE SIDELINES: H.C. Wainwright analyst Edwin Zhang downgraded FibroGen to Neutral from Buy without a price target after the company released "analyses with pre-specified stratification factors" of the pooled roxadustat MACE safety data. The new dataset is weaker than the data previously announced and published, Zhang told investors in a research note. Based on the newly released data, the earlier assessment of the roxadustat clinical profile and market potential have to be modified, said the analyst. The "unfavorable disclosure" changes Zhang's view on roxadustat approvability and potential market uptake.
Meanwhile, Mizuho analyst Difei Yang also downgraded FibroGen to Neutral from Buy with a price target of $29, down from $72. The analyst sees "higher risk and uncertainty" around timelines to regulatory approvals following the clarification of previously disclosed cardiovascular safety analyses on roxadustat. Clinical data previously shared with the scientific and investment community included post-hoc adjustments resulting in more favorable safety data, Yang told investors in a research note of her own. While the new data presented using pre-specified criteria still support the benefit/risk profile of roxadustat, the news creates higher risk in the near term, and uncertainty around timelines to potential approval, added the analyst, who believes the upcoming FDA Advisory Committee meeting is likely to be a key de-risking event for the company.
ROXADUSTAT LOOKING LIKE LESS OF THREAT: Piper Sandler analyst Christopher Raymond is "incrementally positive" on Akebia Therapeutics (AKBA) after competitor FibroGen's "surprising" regulatory update on roxadustat. The analyst believes the updated data calls into question approvability of roxadustat in pre-dialysis and now carries a "numerical safety disadvantage" in dialysis versus Akebia's vadadustat. Raymond continues to recommend purchase of Akebia shares with an Overweight rating and $8 price target.
Additionally, JPMorgan analyst James Gordon upgraded Vifor Pharma (GNHAY) to Neutral from Underweight with a CHF 130 price target. The analyst told investors that he believes roxadustat is looking like less of a threat following FibroGen's update.
'BAD OPTIC' FOR ASTRAZENECA: The re-analysis and restatement of the cardiovascular safety data on roxadustat by AstraZeneca (AZN) partner FibroGen "creates a bad optic but ultimately has little impact" on AstraZeneca forecasts or the investment thesis, Citi analyst Andrew Baum told investors in a research note. The analyst noted that his roxadustat forecasts at $1.3B in 2030 have always remained well below a declining consensus. Baum has a Buy rating on AstraZeneca.
PRICE ACTION: In afternoon trading, shares of FibroGen have dropped over 40% to $20.75.