Discontinued Operations

6 Months Ended

Jun. 30, 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 Beijing 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 SAMR. 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 June 30, 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 and six months ended June 30, 2025 and 2024 were as follows (in thousands):


	Three Months Ended June 30,						Six Months Ended June 30,
	2025			2024			2025			2024
Revenue:
Product revenue, net	$	19,655			49,643		$	59,472		$	80,181
Operating costs and expenses:
Cost of goods sold		4,290			5,038			9,692			9,448
Research and development		542			1,746			1,301			3,650
Selling, general and administrative		6,074			7,370			13,538			13,475
Total operating costs and expenses		10,906			14,154			24,531			26,573
Income from operations		8,749			35,489			34,941			53,608
Interest and other, net
Interest expense		(2,964	)		(2,915	)		(5,915	)		(5,819	)
Interest income and other income (expenses), net		(1,367	)		(2,181	)		(2,649	)		(1,846	)
Total interest and other, net		(4,331	)		(5,096	)		(8,564	)		(7,665	)
Income before income taxes		4,418			30,393			26,377			45,943
Provision for income taxes		—			19			—			45
Investment income in unconsolidated variable interest entity		1,662			1,177			1,108			1,766
Income from discontinued operations, net of tax	$	6,080		$	31,551		$	27,485		$	47,664

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 June 30, 2025 and December 31, 2024 were as follows (in thousands):


	June 30, 2025		December 31, 2024
Assets
Cash and cash equivalents	$	96,474	$	51,696
Accounts receivable, net		22,143		18,443
Inventories		10,871		15,547
Prepaid expenses and other current assets		3,162		25,163
Total current assets held for sale		132,650		110,849

Property and equipment, net		4,670		7,041
Equity method investment in unconsolidated variable interest entity		8,115		6,864
Operating lease right-of-use assets		1,122		1,716
Other assets		987		990
Total long-term assets held for sale		14,894		16,611

Liabilities
Accounts payable	$	123	$	26,974
Accrued and other current liabilities		7,486		10,679
Operating lease liabilities, current		849		1,264
Total current liabilities held for sale		8,458		38,917

Operating lease liabilities, non-current		156		356
Total long-term liabilities held for sale		156		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 six months ended June 30, 2025 and 2024 were as follows (in thousands):


	Six Months Ended June 30,
	2025			2024
Depreciation	$	530		$	753
Investment loss (income) in unconsolidated variable interest entity		(1,108	)		(1,766	)
Impairment of property and equipment		2,062			—
Stock-based compensation	$	943		$	884

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.

The net product revenue from sales to Falikang were $16.4 million and $46.0 million for the three months ended June 30, 2025 and 2024, and $53.3 million and $73.1 million for the six months ended June 30, 2025 and 2024, respectively. The product revenue recognized for the three months ended June 30, 2025 included a decrease in revenue of $12.1 million resulting from changes to estimated variable consideration in the current period relating to performance obligation satisfied in previous periods. The other income from Falikang were immaterial for the three and six months ended June 30, 2025 and 2024.

The investment income in Falikang was $1.7 million and $1.2 million for the three months ended June 30, 2025 and 2024, and $1.1 million and $1.8 million for the six months ended June 30, 2025 and 2024, respectively. As of June 30, 2025 and December 31, 2024, the Company’s equity method investment in Falikang were $8.1 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 June 30, 2025 and December 31, 2024, accounts receivable, net, from Falikang were $19.1 million and $13.9 million, respectively, which were included in the current assets held for sale on the condensed consolidated balance sheets.