XML 32 R20.htm IDEA: XBRL DOCUMENT
v3.23.1

Significant Accounting Policies (Policies) | 3 Months Ended
--- | ---
Mar. 31, 2023
Accounting Policies [Abstract] |
Description of Operations | Description of Operations FibroGen, Inc. (“FibroGen” or the “Company”) is headquartered in San Francisco, California, with subsidiary offices in Beijing and Shanghai, People’s Republic of China (“China”). FibroGen is a leading biopharmaceutical company discovering, developing and commercializing a pipeline of first-in-class therapeutics. The Company applies its pioneering expertise in hypoxia-inducible factor (“HIF”) biology, 2-oxoglutarate enzymology, and connective tissue growth factor to advance innovative medicines for the treatment of anemia, fibrotic disease, and cancer. Pamrevlumab, a human monoclonal antibody targeting connective tissue growth factor, is in Phase 3 clinical development for the treatment of idiopathic pulmonary fibrosis, locally advanced unresectable pancreatic cancer and Duchenne muscular dystrophy. To date, the Company has retained exclusive worldwide rights for pamrevlumab. Roxadustat is an oral small molecule inhibitor of HIF prolyl hydroxylase activity. Roxadustat (爱瑞卓®, EVRENZO TM) is approved in China, Europe, Japan, and numerous other countries for the treatment of anemia in chronic kidney disease for patients who are on dialysis and not on dialysis. Roxadustat is in Phase 3 clinical development for anemia associated with myelodysplastic syndromes, in the United States (“U.S.”) and Europe, and chemotherapy-induced anemia in China. The Company has a pipeline of late-stage clinical programs as well as preclinical drug candidates at various stages of development that include both small molecules and biologics. FibroGen’s goal is to build a diversified pipeline with novel drugs that will address unmet patient needs in oncology, immunology, and fibrosis.
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation The condensed consolidated financial statements include the accounts of FibroGen, its wholly-owned subsidiaries and its majority-owned subsidiaries, FibroGen Europe Oy and FibroGen China Anemia Holdings, Ltd. All inter-company transactions and balances have been eliminated in consolidation. For any variable interest entity (“VIE”) for which FibroGen is not the primary beneficiary, the Company uses the equity method of accounting. The Company operates as one reportable segment — the discovery, development and commercialization of novel therapeutics to treat serious unmet medical needs. The unaudited condensed consolidated financial statements and related disclosures have been prepared in accordance with accounting principles generally accepted in the U.S. (“U.S. GAAP”) applicable to interim financial reporting and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X of the U.S. Securities and Exchange Commission (“SEC”) and, therefore, do not include all information and footnote disclosures normally included in the annual consolidated financial statements. The financial information included herein should be read in conjunction with the consolidated financial statements and related notes in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, filed on February 27, 2023 (“2022 Form 10-K”).
Use of Estimates | Use of Estimates The preparation of the condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. The more significant areas requiring the use of management estimates and assumptions include valuation and recognition of revenue and deferred revenue, specifically, estimates in variable consideration for drug product sales, and estimates in transaction price per unit for the China performance obligation. On an ongoing basis, management reviews these estimates and assumptions. Changes in facts and circumstances may alter such estimates and actual results could differ from those estimates. In the Company’s opinion, the accompanying unaudited condensed consolidated financial statements include all normal recurring adjustments necessary for a fair statement of its financial position, results of operations and cash flows for the interim periods presented.
Net Loss per Share | Net Loss per Share Potential common shares that would have the effect of increasing diluted earnings per share are considered to be anti-dilutive and as such, these shares are not included in the calculation of diluted earnings per share. The Company reported a net loss for the three months ended March 31, 2023 and 2022. Therefore, dilutive common shares are not assumed to have been issued since their effect is anti-dilutive for these periods. Diluted weighted average shares excluded the following potential common shares related to s tock options, service-based restricted stock units (“RSUs”), performance-based RSUs (“PRSUs”), total shareholder return (“TSR”) awards and shares to be purchased under the 2014 Employee Stock Purchase Plan (“ESPP”) for the periods presented as they were anti-dilutive (in thousands):
|  | Three Months Ended March 31, |
|  | 2023 |  |  | 2022 |
Employee stock options |  |  | 7,578 |  |  |  | 9,484 |
RSUs, PRSUs and TSR awards |  |  | 2,762 |  |  |  | 2,196 |
ESPP |  |  | 362 |  |  |  | 473 |
|  |  | 10,702 |  |  |  | 12,153 |
Risks and Uncertainties | Risks and Uncertainties The Company’s future results of operations involve a number of risks and uncertainties. Factors that could affect the Company’s future operating results and cause actual results to vary materially from expectations include, but are not limited to, the results of clinical trials and the achievement of milestones, research developments, actions by regulatory authorities, market acceptance of the Company’s product candidates, competition from other products and larger companies, the liquidity and capital resources of the Company, intellectual property protection for the Company’s proprietary technology, strategic relationships, and dependence on key individuals, suppliers, clinical organization, and other third parties.
Collaboration Agreements, License Agreement and Revenues | Astellas Agreements Astellas Japan Agreement In June 2005, the Company entered into a collaboration agreement with Astellas for the development and commercialization (but not manufacture) of roxadustat for the treatment of anemia in Japan (“Astellas Japan Agreement”). Under this agreement, Astellas agreed to pay license fees, other upfront consideration and various milestone payments, totaling $172.6 million. The Astellas 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, 2023 totaled $105.1 million, excluding drug product revenue that is discussed under the Drug Product Revenue section below.
Product Revenue, Net | 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, 2023 and 2022 (in thousands):
|  | Three Months Ended March 31, |
|  | 2023 |  |  | 2022 |
Direct Sales: |  |  |  |  |  |
Gross revenue |  | $ | 3,060 |  |  | $ | 2,830 |
Discounts and rebates |  |  | (273 | ) |  |  | (175 | )
Sales returns |  |  | 2 |  |  |  | 3 |
Direct sales revenue, net |  |  | 2,789 |  |  |  | 2,658 |
Sales to Falikang: |  |  |  |  |  |
Gross transaction price |  |  | 34,249 |  |  |  | 22,726 |
Profit share |  |  | (14,988 | ) |  |  | (8,849 | )
Net transaction price |  |  | 19,261 |  |  |  | 13,877 |
Decrease in deferred revenue |  |  | 2,111 |  |  |  | 2,346 |
Sales to Falikang revenue, net |  |  | 21,372 |  |  |  | 16,223 |
Total product revenue, net |  | $ | 24,161 |  |  | $ | 18,881 |
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 periods presented. 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 contract liabilities were included in accrued and other current liabilities in the condensed consolidated balance sheet and were immaterial as of March 31, 2023 and December 31, 2022, respectively. The rebates and discounts reflected as reductions to gross accounts receivable for direct sales were immaterial as of March 31, 2023 and December 31, 2022, respectively. Sales to Falikang – China Performance Obligation 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 in future periods as the performance obligation is satisfied. Periodically, the Company updates its assumptions such as total sales quantity, performance period and other inputs including foreign currency translation impact, among others. Following updates to its estimates, the Company recognized $2.1 million and $2.3 million from the previously deferred revenue of the China performance obligation during the three months ended March 31, 2023 and 2022, respectively. The product revenue recognized for the three months ended March 31, 2023 included a decrease in revenue of $0.3 million resulting from changes to estimated variable consideration in the current period relating to performance obligations satisfied in previous periods. 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, 2022 |  |  | Additions |  |  | Recognized as Revenue |  |  | Currency Translation and Other |  |  | Balance at March 31, 2023 |
Product revenue - AstraZeneca China performance obligation - deferred revenue |  | $ | (175,646 | ) |  | $ | (20,889 | ) |  | $ | 21,372 |  |  | $ | (163 | ) |  | $ | (175,326 | )
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, 2023, approximately $22.5 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 $2.2 million and $0.5 million as of March 31, 2023 and December 31, 2022, respectively.
Drug Product Revenue | Drug Product Revenue Drug product revenue from commercial-grade active pharmaceutical ingredient (“API”) or bulk drug product sales to Astellas and AstraZeneca was as follows for the three months ended March 31, 2023 and 2022 (in thousands):
|  | Three Months Ended March 31, |
|  | 2023 |  |  | 2022 |
Astellas Japan Agreement |  | $ | 1,732 |  |  | $ | 7,594 |
Astellas Europe Agreement |  |  | 377 |  |  |  | — |
Drug product revenue |  | $ | 2,109 |  |  | $ | 7,594 |
Astellas Japan Agreement During the three months ended March 31, 2023, the Company updated its estimate of variable consideration related to the API shipments fulfilled under the terms of Astellas Japan Amendment, and accordingly recorded adjustments to the drug product revenue of $1.7 million. 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, and estimated yield from the manufacture of bulk product tablets, among others. During the three months ended March 31, 2022, the Company fulfilled a shipment obligation under the terms of Astellas Japan Amendment, 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 Astellas Japan Amendment, and recorded a reduction to the drug product revenue of $2.2 million during the first quarter of 2022. 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. As of March 31, 2023, t he balances related to the API price true-up under the Astellas Japan Agreement were $3.2 million in accrued liabilities and $1.6 million in other long-term liabilities, representing the Company’s best estimate of the timing for these amounts to be paid. As of December 31, 2022, the related balance in accrued liabilities was $6.5 million. Astellas Europe Agreement The Company transferred bulk drug product for commercial purposes under the terms of the Astellas Europe Agreement and the Astellas EU Supply Agreement in the prior years, and recognized the related fully burdened manufacturing costs as drug product revenue in the respective periods and recorded the constrained transaction price in deferred revenue due to a high degree of uncertainty associated with the variable consideration for revenue recognition purposes. 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 the related deferred revenue to accrued liabilities during the year ended December 31, 2022. As of December 31, 2022, the related balance was $57.4 million in accrued liabilities. Further during the three months ended March 31, 2023, the Company reclassified $16.6 million from the related deferred revenue to accrued liabilities. As of March 31, 2023, the balances related to the bulk drug product price true-up under the Astellas Europe Agreement and the Astellas EU Supply Agreement were $57.5 million in accounts payable and $16.4 million in a ccrued liabilities, representing the Company’s best estimate that these amounts will be paid within the next 12 months. The Company recognized royalty revenue of $0.4 million as drug product revenue from the deferred revenue under the Astellas Europe Agreement during the three months ended March 31, 2023. It is the Company’s best estimate that the remainder of the deferred revenue will be recognized as revenue when uncertainty is resolved, based on the performance of roxadustat product sales in the Astellas territory. 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, 2022 |  |  | Additions |  |  | Recognized as Revenue |  |  | Reclassified to Accrued Liability / Accounts Payable |  |  | Balance at March 31, 2023 |
Drug product revenue - deferred revenue: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Astellas Europe Agreement |  | $ | (40,303 | ) |  | $ | — |  |  | $ | 377 |  |  | $ | 16,552 |  |  | $ | (23,374 | )
AstraZeneca U.S./RoW Agreement There was no shipment of bulk drug product to AstraZeneca as commercial supply under the terms of the AstraZeneca Master Supply Agreement during the three months ended March 31, 2023 and 2022. During the first quarter of 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. As a result, the Company reclassified $11.2 million from the related deferred revenue to accrued liabilities during the year ended December 31, 2022. As of each of March 31, 2023 and December 31, 2022, the related balance in accrued liabilities was $11.2 million, representing the Company’s best estimate that this amount will be paid within the next 12 months.

X
- Definition Basis of presentation and principles of consolidation policy. + References No definition available. + Details
Name: | fgen_BasisOfPresentationAndPrinciplesOfConsolidationPolicyPolicyTextBlock
Namespace Prefix: | fgen_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration

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

X
- Definition Description of operations policy. + References No definition available. + Details
Name: | fgen_DescriptionOfOperationsPolicyPolicyTextBlock
Namespace Prefix: | fgen_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition Drug product revenue. + References No definition available. + Details
Name: | fgen_DrugProductRevenuePolicyTextBlock
Namespace Prefix: | fgen_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition Product revenue policy. + References No definition available. + Details
Name: | fgen_ProductRevenuePolicyPolicyTextBlock
Namespace Prefix: | fgen_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition Risks and uncertainties. + References No definition available. + Details
Name: | fgen_RisksAndUncertaintiesPolicyTextBlock
Namespace Prefix: | fgen_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration

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

X
- Definition Disclosure of accounting policy for computing basic and diluted earnings or loss per share for each class of common stock and participating security. Addresses all significant policy factors, including any antidilutive items that have been excluded from the computation and takes into account stock dividends, splits and reverse splits that occur after the balance sheet date of the latest reporting period but before the issuance of the financial statements. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 260 -SubTopic 10 -Section 50 -Paragraph 1 -Subparagraph (c) -URI https://asc.fasb.org/extlink&oid=124432515&loc=d3e3550-109257 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 260 -SubTopic 10 -Section 50 -Paragraph 2 -URI https://asc.fasb.org/extlink&oid=124432515&loc=d3e3630-109257 + Details
Name: | us-gaap_EarningsPerSharePolicyTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition Disclosure of accounting policy for the use of estimates in the preparation of financial statements in conformity with generally accepted accounting principles. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 275 -SubTopic 10 -Section 50 -Paragraph 12 -URI https://asc.fasb.org/extlink&oid=99393423&loc=d3e6191-108592 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 275 -SubTopic 10 -Section 50 -Paragraph 11 -URI https://asc.fasb.org/extlink&oid=99393423&loc=d3e6161-108592 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 275 -SubTopic 10 -Section 50 -Paragraph 9 -URI https://asc.fasb.org/extlink&oid=99393423&loc=d3e6143-108592 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 275 -SubTopic 10 -Section 50 -Paragraph 1 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=99393423&loc=d3e5967-108592 Reference 5: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 275 -SubTopic 10 -Section 50 -Paragraph 4 -URI https://asc.fasb.org/extlink&oid=99393423&loc=d3e6061-108592 Reference 6: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 275 -SubTopic 10 -Section 50 -Paragraph 8 -URI https://asc.fasb.org/extlink&oid=99393423&loc=d3e6132-108592 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 275 -SubTopic 10 -Section 50 -Paragraph 1 -Subparagraph (c) -URI https://asc.fasb.org/extlink&oid=99393423&loc=d3e5967-108592 + Details
Name: | us-gaap_UseOfEstimates
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration