Discontinued Operations

3 Months Ended

Mar. 31, 2025

Discontinued Operations and Disposal Groups [Abstract]

2. 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 in the third quarter of 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 March 31, 2025 and 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 condensed consolidated statements of operations, while the related assets and liabilities were classified within the condensed 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 condensed consolidated statements of operations for the three months ended March 31, 2025 and 2024 were as follows (in thousands):


	Three Months Ended March 31,
	2025			2024
Revenue:
Product revenue, net	$	39,818			30,538
Operating costs and expenses:
Cost of goods sold		5,403			4,410
Research and development		759			1,903
Selling, general and administrative		7,464			6,106
Total operating costs and expenses		13,626			12,419
Income from operations		26,192			18,119
Interest and other, net
Interest expense		(2,951	)		(2,904	)
Interest income and other income (expenses), net		(1,282	)		335
Total interest and other, net		(4,233	)		(2,569	)
Income before income taxes		21,959			15,550
Provision for income taxes		—			26
Investment income (loss) in unconsolidated variable interest entity		(554	)		589
Income from discontinued operations, net of tax	$	21,405		$	16,113

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 3, 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 condensed consolidated balance sheets as of March 31, 2025 and December 31, 2024 were as follows (in thousands):


	March 31, 2025		December 31, 2024
Assets
Cash and cash equivalents	$	72,591	$	51,696
Accounts receivable, net		22,037		18,443
Inventories		12,771		15,547
Prepaid expenses and other current assets		893		25,163
Total current assets held for sale		108,292		110,849

Property and equipment, net		6,806		7,041
Equity method investment in unconsolidated variable interest entity		6,351		6,864
Operating lease right-of-use assets		1,419		1,716
Other assets		987		990
Total long-term assets held for sale		15,563		16,611

Liabilities
Accounts payable	$	93	$	26,974
Accrued and other current liabilities		7,131		10,679
Operating lease liabilities, current		1,051		1,264
Total current liabilities held for sale		8,275		38,917

Operating lease liabilities, non-current		189		356
Total long-term liabilities held for sale		189		356

The significant non-cash items and capital expenditures for the discontinued operations with respect to FibroGen International included in the condensed consolidated statements of cash flows for the three months ended March 31, 2025 and 2024 were as follows (in thousands):


	Three Months Ended March 31,
	2025		2024
Depreciation	$	318	$	381
Investment loss (income) in unconsolidated variable interest entity		554		(589	)
Stock-based compensation	$	344	$	442

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 three months ended March 31, 2025 and 2024, the net product revenue from sales to Falikang were $36.9 million and $27.1 million, respectively. The other income from Falikang were immaterial for the three months ended March 31, 2025 and 2024.

For the three months ended March 31, 2025 and 2024, the investment income (loss) in Falikang was $(0.6) million and $0.6 million, respectively. As of March 31, 2025 and December 31, 2024, the Company’s equity method investment in Falikang were $6.4 million and $6.9 million, respectively, which were included in the long-term assets held for sale on the condensed consolidated balance sheets.

As of March 31, 2025 and December 31, 2024, accounts receivable, net, from Falikang were $18.7 million and $13.9 million, respectively, which were included in the current assets held for sale on the condensed consolidated balance sheets.