Discontinued Operations

12 Months Ended

Dec. 31, 2024

Discontinued Operations and Disposal Groups [Abstract]

3. Discontinued Operations

On February 20, 2025, the Company entered into the Share Purchase Agreement with AstraZeneca Treasury Limited, pursuant to which FibroGen and its subsidiary FibroGen China Anemia Holdings, Ltd. agreed to sell all of the issued and outstanding equity interests of FibroGen International to AstraZeneca Treasury Limited for an aggregate purchase price comprised of $85 million in cash for the enterprise value of FibroGen International, plus an additional cash amount equal to the net cash held in China by FibroGen International and its subsidiaries as of the closing. This sale includes all of our roxadustat assets in China, including FibroGen International’s subsidiary FibroGen (China) Medical Technology Development Co., Ltd and its 51.1% interest in Falikang. The transaction is expected to close by mid-2025, and is subject to customary closing conditions and closing deliverables, including receipt of regulatory approval from the China State Administration for Market Regulation. The Company analyzed the quantitative and qualitative factors and concluded that the sale of FibroGen International represents a strategic shift in FibroGen’s business and qualified as a discontinued operation. As a result, Company determined that FibroGen International met the “held for sale” criteria and the “discontinued operations” criteria in accordance with FASB ASC 205, Presentation of Financial Statements, as of December 31, 2024. Accordingly, the operating results related to the FibroGen International are classified as discontinued operations, and have been reflected as discontinued operations in the consolidated statements of operations, while the related assets and liabilities were classified within the consolidated balance sheets as held for sale for all periods presented.

The financial results of the discontinued operations with respect to FibroGen International reflected in the consolidated statements of operations for the years ended December 31, 2024 and 2023 were as follows (in thousands):


	Years Ended December 31,
	2024			2023
Revenue:
Product revenue, net	$	173,664		$	100,949
Operating costs and expenses:
Cost of goods sold		21,036			14,886
Research and development		7,375			16,388
Selling, general and administrative		32,304			28,769
Total operating costs and expenses		60,715			60,043
Income from operations		112,949			40,906
Interest and other, net
Interest expense		(11,683	)		(7,437	)
Interest income and other income (expenses), net		423			2,886
Total interest and other, net		(11,260	)		(4,551	)
Income before income taxes		101,689			36,355
Provision for income taxes		139			255
Investment income in unconsolidated variable interest entity		3,969			2,638
Income from discontinued operations, net of tax	$	105,519		$	38,738

The product revenue, net, consists primarily of revenues from sales of roxadustat commercial product to Falikang, a distribution entity jointly owned by AstraZeneca and FibroGen Beijing, and is discussed in the China Performance Obligation section in Note 4, Collaboration Agreements, License Agreement and Revenues.

The carrying value of the assets and liabilities of the discontinued operations with respect to FibroGen International on the consolidated balance sheets as of December 31, 2024 and 2023 were as follows (in thousands):


	December 31, 2024		December 31, 2023
Assets
Cash and cash equivalents	$	51,696	$	32,135
Accounts receivable, net		18,443		7,432
Inventories		15,547		24,392
Prepaid expenses and other current assets		25,163		1,817
Total current assets held for sale		110,849		65,776

Property and equipment, net		7,041		8,341
Equity method investment in unconsolidated variable interest entity		6,864		5,290
Operating lease right-of-use assets		1,716		3,154
Other assets		990		1,265
Total long-term assets held for sale		16,611		18,050

Liabilities
Accounts payable	$	26,974	$	2,182
Accrued and other current liabilities		10,679		39,904
Operating lease liabilities, current		1,264		1,430
Total current liabilities held for sale		38,917		43,516

Operating lease liabilities, non-current		356		1,504
Total long-term liabilities held for sale		356		1,504

The significant non-cash items and capital expenditures for the discontinued operations with respect to FibroGen International included in the consolidated statements of cash flows for the years ended December 31, 2024 and 2023 were as follows (in thousands):


	Years Ended December 31,
	2024			2023
Depreciation	$	1,458		$	2,559
Investment income in unconsolidated variable interest entity		(3,969	)		(2,638	)
Dividend received from unconsolidated variable interest entity		2,230			2,255
Stock-based compensation		1,770			2,391
Purchases of property and equipment	$	(357	)	$	(859	)

Included in the discontinued operations, Falikang, an entity jointly owned by FibroGen Beijing and AstraZeneca is an unconsolidated VIE accounted for as an equity method investment, and considered as a related party to the Company. FibroGen Beijing owns 51.1% of Falikang’s equity.

For the years ended December 31, 2024 and 2023, the net product revenue from sales to Falikang were $159.0 million and $89.1 million, respectively. The other income from Falikang were immaterial for the years ended December 31, 2024 and 2023.

For the years ended December 31, 2024 and 2023, the investment income (loss) in Falikang was $4.0 million and $2.6 million, respectively. During the years ended December 31, 2024 and 2023, the Company received $2.2 million and $2.3 million of dividend distribution from Falikang, respectively. As of December 31, 2024 and 2023, the Company’s equity method investment in Falikang were $6.9 million and $5.3 million, respectively, which was included in the long-term assets held for sale on the consolidated balance sheets.

As of December 31, 2024 and 2023 accounts receivable, net, from Falikang were $13.9 million and $5.2 million, respectively.