XML 21 R10.htm IDEA: XBRL DOCUMENT
v3.22.1

Collaboration Agreements, License Agreement and Revenues | 3 Months Ended
--- | ---
Mar. 31, 2022
Organization Consolidation And Presentation Of Financial Statements [Abstract] |
Collaboration Agreements, License Agreement and Revenues | 2. Collaboration Agreements, License Agreement and Revenues Astellas Agreements Japan Agreement In June 2005, the Company entered into a collaboration agreement with Astellas Pharma Inc. (“Astellas”) for the development and commercialization (but not manufacture) of roxadustat for the treatment of anemia in Japan (“Japan Agreement”). Under this agreement, Astellas agreed to pay license fees, other upfront consideration and various milestone payments, totaling $172.6 million. The Japan Agreement also provides for tiered payments based on net sales of product (as defined) in the low 20% range of the list price published by Japan’s Ministry of Health, Labour and Welfare, adjusted for certain elements, after commercial launch. The aggregate amount of consideration received through March 31, 2022 totaled $105.1 million, excluding drug product revenue that is discussed separately below. Amounts recognized as license revenue and development revenue under the Japan Agreement with Astellas were as follows for the three months ended March 31, 2022 and 2021 (in thousands):
|  |  |  | Three Months Ended March 31, |
Agreement |  | Performance Obligation |  | 2022 |  |  | 2021 |
Japan |  | License revenue |  | $ | — |  |  | $ | — |
|  | Development revenue |  | $ | 32 |  |  | $ | 80 |
The transaction price related to consideration received and accounts receivable has been allocated to each of the following performance obligations under the Japan Agreement with Astellas, along with any associated deferred revenue as follows (in thousands):
Japan Agreement |  | Cumulative Revenue Through March 31, 2022 |  |  | Deferred Revenue at March 31, 2022 |  |  | Total Consideration Through March 31, 2022 |
License |  | $ | 100,347 |  |  | $ | — |  |  | $ | 100,347 |
Development revenue |  |  | 16,630 |  |  |  | — |  |  |  | 16,630 |
Total license and development revenue |  | $ | 116,977 |  |  | $ | — |  |  | $ | 116,977 |
There was no revenue resulting from changes to estimated variable consideration in the current period relating to performance obligations satisfied or partially satisfied in previous periods for the three months ended March 31, 2022 under the Japan Agreement. The Company does no t expect material variable consideration from estimated future co-development billing beyond the development period in the transaction price related to the Japan Agreement. In 2018, FibroGen and Astellas entered into an amendment to the Japan Agreement that allows Astellas to manufacture roxadustat drug product for commercialization in Japan (the “Japan Amendment”). The related drug product revenue, as described in details under Drug Product Revenue section below, was $7.6 million and $4.0 million for the three months ended March 31, 2022 and 2021, respectively. Europe Agreement In April 2006, the Company entered into a separate collaboration agreement with Astellas for the development and commercialization of roxadustat for the treatment of anemia in Europe, the Middle East, the Commonwealth of Independent States and South Africa (“Europe Agreement”). Under the terms of the Europe Agreement, Astellas agreed to pay license fees, other upfront consideration and various milestone payments, totaling $745.0 million. U nder the Europe Agreement, Astellas committed to fund 50% of joint development costs for Europe and North America, and all territory-specific costs. The Europe Agreement also provides for tiered payments based on net sales of product (as defined) in the low 20% range. On March 21, 2022, EVRENZO® (roxadustat) was registered with the Russian Ministry of Health. The Company evaluated the regulatory milestone payment associated with the approval in Russia under the Europe Agreement and concluded that this milestone was achieved in the first quarter of 2022. Accordingly, the consideration of $25.0 million associated with this milestone was included in the transaction price and allocated to performance obligations under the Europe Agreement, all of which was recognized as revenue during the first quarter of 2022 from performance obligations satisfied. Such amount was billed and recorded in accounts receivable from Astellas as of March 31, 2022, and received in April 2022. The aggregate amount of consideration received under the Europe Agreement through March 31, 2022 totaled $660.0 million, excluding drug product revenue that is discussed separately below. Amounts recognized as license revenue and development revenue under the Europe Agreement with Astellas were as follows for the three months ended March 31, 2022 and 2021 (in thousands):
|  |  |  | Three Months Ended March 31, |
Agreement |  | Performance Obligation |  | 2022 |  |  | 2021 |
Europe |  | License revenue |  | $ | 22,590 |  |  | $ | — |
|  | Development revenue |  | $ | 5,148 |  |  | $ | 3,531 |
The transaction price related to consideration received and accounts receivable has been allocated to each of the following performance obligations under the Europe Agreement with Astellas, along with any associated deferred revenue as follows (in thousands):
Europe Agreement |  | Cumulative Revenue Through March 31, 2022 |  |  | Deferred Revenue at March 31, 2022 |  |  | Total Consideration Through March 31, 2022 |
License |  | $ | 618,975 |  |  | $ | — |  |  | $ | 618,975 |
Development revenue |  |  | 275,789 |  |  |  | — |  |  |  | 275,789 |
Total license and development revenue |  | $ | 894,764 |  |  | $ | — |  |  | $ | 894,764 |
The revenue recognized under the Europe Agreement for the three months ended March 31, 2022 included an increase in revenue of $25.0 million resulting from changes to estimated variable consideration in the current period relating to performance obligations satisfied or partially satisfied in previous periods. The remainder of the transaction price related to the Europe Agreement includes $14.6 million of variable consideration from estimated future co-development billing and is expected to be recognized over the remaining development service period. Under the Europe Agreement, Astellas has an option to purchase roxadustat bulk drug product in support of commercial supplies. During the first quarter of 2021, the Company entered into an EU Supply Agreement under the Europe Agreement with Astellas (“EU Supply Agreement”) to define general forecast, order, supply and payment terms for Astellas to purchase roxadustat bulk drug product from FibroGen in support of commercial supplies. There was no related drug product revenue for the three months ended March 31, 2022 and 2021. See details under Drug Product Revenue section below. AstraZeneca Agreements U.S./Rest of World (“RoW”) Agreement Effective July 30, 2013, the Company entered into a collaboration agreement with AstraZeneca for the development and commercialization of roxadustat for the treatment of anemia in the U.S. and all other countries in the world, other than China, not previously licensed under the Astellas Europe and Astellas Japan Agreements (“U.S./RoW Agreement”). It also excludes China, which is covered by a separate agreement with AstraZeneca described below. Under the terms of the U.S./RoW Agreement, AstraZeneca agreed to pay upfront, non-contingent, non-refundable and time-based payments, and potential milestone payments, totaling $1.2 billion. AstraZeneca will pay the Comp any tiered royalty payments on AstraZeneca’s future net sales (as defined in the agreement) of roxadustat in the low 20% range. In addition, the Company will receive a transfer price for shipment of commercial product based on a percentage of AstraZeneca’s net sales (as defined in the agreement) in the low- to mid-single digit range. The aggregate amount of consideration received under the U.S./RoW Agreement through March 31, 2022 totaled $439.0 million, excluding drug product revenue that is discussed separately below. While FibroGen and AstraZeneca continue to develop roxadustat in the U.S. for the treatment of anemia in patients with MDS, the Company has not been able to agree on a path forward for AstraZeneca to fund further roxadustat development for CKD anemia in the U.S. Therefore, the Company does not expect to receive most or all of the remaining U.S./RoW Agreement milestones from AstraZeneca. In 2020, the Company entered into Master Supply Agreement under the U.S./RoW Agreement with AstraZeneca (“Master Supply Agreement”) to define general forecast, order, supply and payment terms for AstraZeneca to purchase roxadustat bulk drug product from FibroGen in support of commercial supplies. There was no related drug product revenue for the three months ended March 31, 2022, and the related drug product revenue for the three months ended March 31, 2021 was $4.5 million. S ee details under Drug Product Revenue section below. China Agreement Effective July 30, 2013, the Company (through its subsidiaries affiliated with China) entered into the China Agreement (“China Agreement”). Under the terms of the China Agreement, AstraZeneca agreed to pay upfront consideration and potential milestone payments, totaling $376.7 million. The China Agreement is structured as a 50/50 profit or loss share (as defined), which was amended under the China Amendment discussed below in 2020, and provides for joint development costs (including capital and equipment costs for construction of the manufacturing plant in China), to be shared equally during the development period. The aggregate amount of such consideration received for milestone and upfront payments through March 31, 2022 totaled $77.2 million. China Amendment In July 2020, FibroGen China Anemia Holdings, Ltd., FibroGen (China) Medical Technology Development Co., Ltd. ("FibroGen Beijing"), and FibroGen International (Hong Kong) Limited (collectively “FibroGen China”) and AstraZeneca entered into the China Amendment, relating to the development and commercialization of roxadustat in China. Under the China Amendment, in September 2020, FibroGen Beijing and AstraZeneca completed the establishment of a jointly owned entity, Beijing Falikang Pharmaceutical Co., Ltd. ("Falikang"), which performs roxadustat distribution, as well as conduct sales and marketing through AstraZeneca. Since Falikang became fully operational in January 2021, substantially all direct roxadustat product sales to distributors in China are made by Falikang, while FibroGen Beijing continues to sell roxadustat product directly in one province in China. FibroGen Beijing manufactures and supplies commercial product to Falikang based on a gross transfer price, which is adjusted for the estimated profit share. Amounts recognized as revenue under the U.S./RoW Agreement and China Agreement with AstraZeneca were as follows for the three months ended March 31, 2022 and 2021 (in thousands):
|  |  |  | Three Months Ended March 31, |
Agreement |  | Performance Obligation |  | 2022 |  |  | 2021 |
U.S. / RoW and China |  | License revenue |  | $ | — |  |  | $ | — |
|  | Development revenue |  |  | 5,819 |  |  |  | 10,976 |
The transaction price related to consideration received and accounts receivable has been allocated to each of the following performance obligations under the U.S./RoW Agreement and China Agreement with AstraZeneca, along with any associated deferred revenue as follows (in thousands):
U.S. / RoW and China Agreements |  | Cumulative Revenue Through March 31, 2022 |  |  | Deferred Revenue at March 31, 2022 |  |  | Total Consideration Through March 31, 2022 |
License |  | $ | 341,844 |  |  | $ | — |  |  | $ | 341,844 |
Co-development, information sharing & committee services |  |  | 608,938 |  |  |  | — |  |  |  | 608,938 |
China performance obligation * |  |  | 51,791 |  |  |  | 171,238 |  |  |  | 223,029 |
Total license and development revenue |  | $ | 1,002,573 |  |  | $ | 171,238 |  | ** | $ | 1,173,811 |
* China performance obligation revenue is recognized as product revenue, as described in details under Product Revenue, Net section below. ** Contract assets and liabilities related to rights and obligations in the same contract are recorded net on the consolidated balance sheets. As of March 31, 2022, deferred revenue included $160.0 million related to the U.S./RoW Agreement and China Agreement, which represents the net of $171.2 million of deferred revenue presented above and a $11.2 million unbilled co-development revenue under the China Amendment with AstraZeneca. There was no revenue resulting from changes to estimated variable consideration in the current period relating to performance obligations satisfied or partially satisfied in previous periods for the three months ended March 31, 2022 under the U.S./RoW Agreement. The remainder of the transaction price related to the U.S./R oW Agreement and China Agreement includes $29.6 million of variable consideration from estimated future co-development billing and is expected to be recognized over the remaining development service period, except for amounts allocated to the China performance obligation. The amount allocated to the China performance obligation is expected to be recognized as the Company transfers control of the commercial drug product to Falikang. During the three months ended March 31, 2022 and 2021, the Company recognized $16.2 million and $10.4 million, respectively, of net product revenue from the sales to Falikang, as described in details under Product Revenue, Net section below. In addition to sales to Falikang, during the three months ended March 31, 2022 and 2021, the Company recognized $2.7 million and $5.0 million, respectively, of net product revenue from sales directly to d istributors in one province in China, as described as direct sales under Product Revenue, Net section below. Eluminex Agreement In July 2021, FibroGen exclusively licensed to Eluminex Biosciences (Suzhou) Limited (“Eluminex”) global rights to its investigational biosynthetic cornea derived from recombinant human collagen Type III. Under the terms of the agreement with Eluminex, as amended and restated on January 21, 2022, Eluminex made an $8.0 million upfront payment to FibroGen during the first quarter of 2022, which was recorded as an unbilled contract asset as of December 31, 2021 in the prepaid expenses and other current assets in the condensed consolidated balance sheets. In addition, FibroGen may receive up to a total of $64.0 million in future manufacturing, clinical, regulatory, and commercial milestone payments for the biosynthetic cornea program, as well as $36.0 million in commercial milestones for the first recombinant collagen III product that is not the biosynthetic cornea. FibroGen will also be eligible to receive mid single-digit to low double-digit royalties based upon worldwide net sales of cornea products, and low single-digit to mid single-digit royalties based upon worldwide n et sales of other recombinant human collagen type III products that are not cornea products. During the first quarter of 2022, FibroGen and Eluminex entered into a separate contract manufacturing agreement, under which the Company is responsible for supplying the cornea product at 110% of its product manufacturing costs until its manufacturing technology is fully transferred to Eluminex. The related contract manufacturing revenue was recorded as other revenue and included in development and other revenue in the condensed consolidated statement of operations. Amounts recognized as revenue under the Eluminex were as follows for the three months ended March 31, 2022 and 2021 (in thousands):
|  |  |  | Three Months Ended March 31, |
Agreement |  | Performance Obligation |  | 2022 |  |  | 2021 |
Eluminex |  | Other revenue - contract manufacturing |  | $ | 762 |  |  | $ | — |
Product Revenue, Net Product revenue, net from the sales of roxadustat commercial product in China was as follows for the three months ended March 31, 2022 and 2021 (in thousands):
|  | Three Months Ended March 31, |
|  | 2022 |  |  | 2021 |
Direct Sales: |  |  |  |  |  |
Gross revenue |  | $ | 2,830 |  |  | $ | 5,429 |
Discounts and rebates |  |  | (175 | ) |  |  | (562 | )
Sales returns |  |  | 3 |  |  |  | 89 |
Direct sales revenue, net |  |  | 2,658 |  |  |  | 4,956 |
Sales to Falikang: |  |  |  |  |  |
Gross transaction price |  |  | 22,726 |  |  |  | 24,401 |
Profit share |  |  | (8,849 | ) |  |  | (10,064 | )
Net transaction price |  |  | 13,877 |  |  |  | 14,337 |
Decrease (increase) in deferred revenue |  |  | 2,346 |  |  |  | (3,931 | )
Sales to Falikang revenue, net |  |  | 16,223 |  |  |  | 10,406 |
Total product revenue, net |  | $ | 18,881 |  |  | $ | 15,362 |
Direct Sales Product revenue from direct roxadustat product sales to distributors in China is recognized in an amount that reflects the consideration that the Company expects to be entitled to in exchange for those products, net of various sales rebates and discounts. The total discounts and rebates were immaterial for the three months ended March 31, 2022 and 2021. Due to the Company’s legal right to offset, at each balance sheet date, the rebates and discounts are presented as reductions to gross accounts receivable from the distributor, or as a current liability to the distributor to the extent that the total amount exceeds the gross accounts receivable or when the Company expects to settle the discount in cash. The Company’s legal right to offset is calculated at the individual distributor level. The following table includes a roll-forward of the contract liabilities (in thousands):
|  | Balance at December 31, 2021 |  |  | Additions |  |  | Deduction |  |  | Currency Translation and Other |  |  | Balance at March 31, 2022 |
Product revenue - Direct sales - contract liabilities |  | $ | (3,176 | ) |  | $ | (407 | ) |  | $ | 835 |  |  | $ | (11 | ) |  | $ | (2,759 | )
The above contract liabilities were included in accrued and other current liabilities in the condensed consolidated balance sheet. The rebates and discounts reflected as reductions to gross accounts receivable for direct sales wer e $0.6 million and $1.1 million a s of March 31, 2022 and December 31, 2021, respectively. Sales to Falikang – China Performance Obligation Since Falikang became fully operational in January 2021, substantially all direct roxadustat product sales to distributors in China are made by Falikang. FibroGen Beijing manufactures and supplies commercial product to Falikang. The net transfer price for FibroGen Beijing’s product sales to Falikang is based on a gross transfer price, which is adjusted to account for the 50/50 profit share for the period. The roxadustat sales to Falikang marked the beginning of the Company’s China performance obligation under the Company’s agreements with AstraZeneca. Product revenue is based on the transaction price of the China performance obligation. Revenue is recognized when control of the product is transferred to Falikang, in an amount that reflects the allocation of the transaction price to the performance obligation satisfied during the reporting period. Any net transaction price in excess of the revenue recognized is added to the deferred balance to date, and will be recognized over future periods as the performance obligation is satisfied. Following updates to its estimates, the Company recognized $2.3 million from the previously deferred revenue of the China performance obligation during the three months ended March 31, 2022. The following table includes a roll-forward of the related deferred revenue that is considered as a contract liability (in thousands):
|  | Balance at December 31, 2021 |  |  | Additions |  |  | Recognized as Revenue |  |  | Balance at March 31, 2022 |
Product revenue - AstraZeneca China performance obligation - deferred revenue |  | $ | (171,516 | ) |  | $ | (15,945 | ) |  | $ | 16,223 |  |  | $ | (171,238 | )
Deferred revenue includes amounts allocated to the China performance obligation under the AstraZeneca arrangement as revenue recognition associated with this unit of accounting is tied to the commercial launch of the products within China and to when the control of the manufactured commercial products is transferred to AstraZeneca. As of March 31, 2022, approximately $12.6 million of the above deferred revenue related to the China unit of accounting was included in short-term deferred revenue, which represents the amount of deferred revenue associated with the China unit of accounting that is expected to be recognized within the next 12 months, associated with the commercial sales in China. Due to the Company’s legal right to offset, at each balance sheet date, the rebates and discounts, mainly related to profit sharing, are presented as reductions to gross accounts receivable from Falikang, which was $8.2 million and $13.4 million as of March 31, 2022 and December 31, 2021, respectively. Drug Product Revenue Drug product revenue from commercial-grade active pharmaceutical ingredient (“API”) or bulk drug product sales to AstraZeneca and Astellas was as follows for the three months ended March 31, 2022 and 2021 (in thousands):
|  | Three Months Ended March 31, |
|  | 2022 |  |  | 2021 |
Astellas |  | $ | 7,594 |  |  | $ | 4,030 |
AstraZeneca |  |  | — |  |  |  | 4,450 |
Drug product revenue |  | $ | 7,594 |  |  | $ | 8,480 |
During the three months ended March 31, 2022, the Company fulfilled a shipment obligation under the terms of Japan Amendment with Astellas, and recognized related drug product revenue of $9.8 million in the same period. In addition, the Company updated its estimate of variable consideration related to the API shipments fulfilled under the terms of Japan Amendment with Astellas, and recorded a reduction to the drug product revenue of $2.2 million du ring the three months ended March 31, 2022, and $4.0 million additional drug product revenue during the three months ended March 31, 2021. Specifically, the change in estimated variable consideration was based on the API held by Astellas at period end, adjusted to reflect the changes in the estimated bulk product strength mix intended to be manufactured by Astellas, estimated cost to convert the API to bulk product tablets, and estimated yield from the manufacture of bulk product tablets, among others. During the three months ended March 31, 2022, the Company billed and received $49.2 million from Astellas related to the annual transfer price true up for bulk drug product transferred for commercial purposes under the terms of the Europe Agreement and the EU Supply Agreement with Astellas. This amount was recorded in deferred revenue and netted against an unbilled contract asset as of December 31, 2021. During the first quarter of 2022, the Company updated its estimate of variable consideration related to the bulk drug product transferred in prior years. Specifically, the change in estimated variable consideration was based on the bulk drug product held by Astellas at the period end, adjusted to reflect the changes in the estimated transfer price, forecast information, shelf-life estimates and other items. As a result, the Company reclassified $45.5 million from deferred revenue to accrued liabilities as of March 31, 2022, representing its best estimate that this amount will be paid in the first quarter of 2023. During the three months ended March 31, 2022, the Company evaluated the current developments in the U.S. market, and updated its estimates of variable consideration associated with bulk drug product shipments to AstraZeneca in prior years as commercial supply under the terms of the Master Supply Agreement. As a result, the Company reclassified $11.2 million from the related deferred revenue to accrued liabilities as of March 31, 2022. The following table includes a roll-forward of the above-mentioned deferred revenues that are considered as contract liabilities related to drug product (in thousands):
|  | Balance at December 31, 2021 |  |  | Additions |  |  | Reclassified to Accrued Liability |  |  | Balance at March 31, 2022 |
Astellas - Japan Agreement |  | $ | (1,974 | ) |  | $ | (2,226 | ) |  | $ | 4,200 |  |  | $ | — |
Astellas - Europe Agreement |  |  | (25,891 | ) |  |  | (49,160 | ) |  |  | 45,463 |  |  |  | (29,588 | )
AstraZeneca - U.S. Agreement |  |  | (11,171 | ) |  |  | — |  |  |  | 11,171 |  |  |  | — |
Drug product revenue - deferred revenue |  | $ | (39,036 | ) |  | $ | (51,386 | ) |  | $ | 60,834 |  |  | $ | (29,588 | )

X
- Definition Collaborative arrangements license agreement and revenues. + References No definition available. + Details
Name: | fgen_CollaborativeArrangementsLicenseAgreementAndRevenuesDisclosureTextBlock
Namespace Prefix: | fgen_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | us-gaap_OrganizationConsolidationAndPresentationOfFinancialStatementsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration