FibroGen lines up a $125M IPO to shoulder its way into the IPF race

Flush with cash from its high-profile collaborators, FibroGen is plotting a $120 million IPO to help bankroll a stable of unpartnered drugs, including a promising lung treatment with huge market potential.

The biotech, a 2013 Fierce 15 honoree, has yet to specify how many shares it intends to offer or at what price, saying only that it plans to make its debut on the Nasdaq. FibroGen's lead candidate, an oral anemia treatment, is already well-funded thanks to the interest of some sizable partners, so the company's planned raise will serve to accelerate a midstage antibody with applications in idiopathic pulmonary fibrosis (IPF), pancreatic cancer and liver disease.

FibroGen's top prospect is roxadustat (FG-4592), a Phase III pill that promises to boost red blood cell counts in anemia patients with chronic kidney disease without the troubling side effects that have plagued other treatments for the disease. Last year, AstraZeneca ($AZN) stepped in with a deal worth as much as $1.6 billion in exchange for U.S. and Chinese rights to roxadustat, while Astellas is on the line for up to $917.6 million in an earlier agreement that covers Japan, Europe and the Middle East.

However, the San Francisco company has retained the full rights to FG-3019, an antibody for connective tissue growth factor, which is integral to fibrosis process. The treatment is in the midst of a Phase II trial on IPF, a deadly disease that leave scars on the lungs. There are currently no approved treatments for IPF in the U.S., and the market potential has sparked a race between InterMune ($ITMN) and Boehringer Ingelheim, both which expect to win approval in the next 12 months.

Despite lagging behind its larger rivals, FibroGen believes FG-3019 can surpass its competition if and when it reaches the market. InterMune and Boehringer's treatments have proven themselves capable of slowing the progression of IPF and improving lung function, but FG-3019 has thus far demonstrated the potential to actively reverse the process of fibrosis, the company said, a clinical first in the field. And there should be plenty of room for competition: Decision Resources Group estimates that IPF drugs will bring in $4.6 billion in sales across the U.S. and Europe by 2020.

The plan now is to stay the course with FG-3019, as FibroGen is mapping out a Phase III program in both IPF and pancreatic cancer. And, while the company is open to partnering opportunities for the antibody, FibroGen figures it can go it alone for the foreseeable future if its $125 million Wall Street debut succeeds.

The biotech is entering the IPO fray amid some volatile uncertainty in the market. Since the early days of 2014, when scores of drug developers pocketed billions and swung as many as 10 debuts a week, things have tightened up, with Wall Street increasingly wary of risky biotech startups. Many IPO hopefuls have had to put off or cancel their offerings altogether, while others have been forced to accept deep discounts to get the listings they desire.

At the same time, companies with differentiated assets and clear paths to market are still pulling off sizable offerings, including this month's $97 million debut from Tokai Pharmaceuticals ($TKAI) and recent successes from Sage Therapeutics ($SAGE), Zafgen ($ZFGN) and Kite Pharma ($KITE).

- read the filing

Special Report: FierceBiotech's 2013 Fierce 15 - Fibrogen

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