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FibroGen, Inc. (NASDAQ:FGEN) has shifted its focus into developing drug to treat patients with cancer. Thus, it has been able to in-license a few oncology drugs in its pipeline, which are FG-3165 and FG-3175 for the treatment of patients with solid tumors. Each of these drugs has a unique mechanism of action [MOA] and might ultimately pay off. I believe that these programs have a good chance at being moved forward in the clinic, especially since a small collaboration agreement has been made with Regeneron Pharmaceuticals (REGN) to advance them. This would be the fact that this big pharma will provide Libtayo [PD-L1 inhibitor] to be used in combination with these two drugs in separate phase 1 studies.
There is some hope that its other drug pamrevlumab might be successful in treating patients with pancreatic cancer, but remains a long shot. Especially, considering that this drug was not effective in treating patients with idiopathic pulmonary fibrosis [IPF] or non-ambulatory Duchenne Muscular Dystrophy [DMD]. Speaking of this program, it is expected that results from two studies for it will be released in 2024. The phase 2/3 PanCAN Precision Promise Study data is mid-2024 and the phase 3 LAPIS study is Q3 of 2024. It had impressive data from a phase 1 study using FG-3246 for the treatment of patients with metastatic castration-resistant prostate cancer, and a phase 2 study for this program will be initiated in the 2nd half of 2024.
Two Drugs With a Promising Future Might Bring About Shareholder Value
Two drugs being developed as part of FibroGen's pipeline are FG-3165 and FG-3175. Both of these drugs were in-licensed. It remains to be seen if either of these other drugs turn out to provide shareholder value, especially since they have not yet been adequately tested yet. This is where huge potential comes in for this specific program using both of these cancer drugs. It was just announced that FibroGen was able to bring on board Regeneron Pharmaceuticals as a collaboration partner to advance both of them in combination with its PD-L1 inhibitor Libtayo.
While this initial collaboration agreement is pretty good, there is one downside that must be noted. This would be the fact that there is no upfront cash or milestone payments as part of this particular deal. What is being provided? In essence, the only thing that Regeneron is going to do is to provide Libtayo itself at no cost. While this is disappointing starting off, should data from either the monotherapy or combination portions of these studies turn out to work, then I'm pretty sure that FibroGen should be able to eventually establish a much larger collaboration agreement. The plan is to use both each of FG-3165 and FG-3175 as a monotherapy or combination therapy with Libtayo in phase 1/2 studies targeting patients with solid tumors. However, it is important to note that each one of these in-licensed drugs has a different mechanism of action.
FG-3165 is an anti-Gal9 inhibitor which is being developed to treat patients with solid tumors. However, it works not as you think it does. It has nothing to do with the targeting of the solid tumor itself. The intended function of FG-3165 as an anti-Gal-9 inhibitor is to remove it off the surface of CD4+ and CD8+ T-cells. The purpose of doing this is to change how the tumor microenvironment [TME] works, in turn to allow for the immune system to work better in then actually killing cancer cells.
FG-3175, on the other hand, is an anti-CCR8 drug which is also being developed to treat patients with solid tumors. What makes this drug a good one for FibroGen to develop? That's because anti-CCR8 inhibition is starting to become popular. I wouldn't put in the realm of being in demand like anti-CD47 when that "Don't eat me" signal drug was sought out for by Gilead Sciences (GILD) and Pfizer (PFE).
However, it is for sure getting there because many companies/deals are being done. Consider that Coherus BioSciences (CHRS) bought out Surface Oncology for it and other drugs in its pipeline as well. Through such an acquisition, it gained an anti-CCR8 drug known as SRF114. There have been many other acquisitions since then. Thus, it might be a good idea to keep an eye on these anti-CCR8 drugs in the future.
What's so special about these drugs? The whole premise is that anti-CCR8 is part of the GPCR family. It has been shown to be expressed on the surface of T-regulatory cells. As I have stated before, one major control gate of the immune system are T regulatory cells [T-regs]. Thus, the goal of anti-CCR8 inhibition is to remove T-regs so that the immune system could actually attack the tumor itself. Such inhibition is not being done alone, but being combined with other drugs like TIGIT inhibitors or PD-L1 inhibitors [checkpoint blockade]. Thus, it is quite possible that knocking down both PD-L1 on tumor cells along with anti-CCR8 on T-regs, could equate to a highly improved efficacy outcome. This remains to be seen, but the rationale for doing this type of testing would be with what was observed in preclinical testing. In such animal study testing, it was shown that when FG-3175 was combined with Libtayo, there was an improved immune response compared to that of either drug alone. Of course, such data observed in preclinical testing must also be seen in human phase 1 testing as well. Thus, this initial phase 1 study will be crucial for the future of this drug.
Financials
According to the 10-Q SEC Filing, FibroGen had cash, cash equivalents, investments and accounts receivable of $214.7 million as of March 31, 2024. The reason for the cash on hand is because of two financial transactions it had been able to establish. The first financial transaction of which was a $75 million initial term loan done with Morgan Stanley Tactical Value.
The second transaction, which brought in cash, was an at-the-market agreement made with Goldman Sachs & Co., LLC and BofA Securities, Inc [sales agent]. Under the terms of this ATM program, FibroGen occasionally sells up to an aggregate amount of $200 million. During Q1 and Q2 of 2023, it sold a total of 2,472,090 shares of common stock and received net proceeds of $48.4 million. Thus, with the extra shares it has available to sell, it can tap into this if it needs to in the coming months.
However, I believe that it will need to tap into this ATM soon enough. What makes me say that? Well, that's because in its 10-Q SEC Filing, it states that as far as a cash runway, it believes it only has enough cash to fund its operations for at least the next 12 months. It has a cash burn of $86.9 million per quarter.
Risks To Business
There are several risks that investors should be aware of before investing in FibroGen. The first risk to consider would be regarding the development of pamrevlumab for the treatment of patients with pancreatic cancer. There is a good, logical reason to test the use of this drug for the treatment of this patient population. It is said that CTGF expression is highly elevated in pancreatic cancer and pancreatic cancer cell lines, thus the testing of this monoclonal antibody makes sense. However, the risk is that pamrevlumab didn't perform well in treating patients with non-ambulatory DMD or IPF. Thus, there is no guarantee that positive results will be achieved in either one or both of the ongoing pancreatic cancer studies.
A second risk to consider would be regarding the in-licensing of FG-3165 and FG-3175 for the treatment of patients with solid tumors. That's because these are still being tested in early-stage studies. Preclinical studies showed that by combining one of these drugs with a PD-L1 inhibitor like Libtayo, an improved immune response was observed. There is no assurance that what was achieved here will also be observed in phase 1 human testing. Nor that, either of these molecules will be able to eventually be approved and marketed by the FDA or other regulatory agency.
The third and final risk to consider would be regarding the development of FG-3246 for the treatment of patients with metastatic castration-resistant prostate cancer [mCRPC]. There was success in combining this CD46-targeting ADC drug together with Pfizer's enzalutamide to treat these patients. However, going forward, the goal is to initiate a phase 2 monotherapy study to find the Maximum Tolerated Dose [MTD] and Recommended Phase 2 Dose [RP2D] to move on to the next stage of testing with. There is no guarantee that an adequate MTD or RP2D will be achieved to move forward with. Nor that the primary endpoint of a soon-to-be initiated phase 2 monotherapy FG-3246 study will be met with statistical significance.
Conclusion
FibroGen has been able to build a new pipeline after the several setbacks it had with pamrevlumab for the treatment of patients with non-ambulatory DMD and IPF. However, albeit a small chance, it is possible that this drug might end up being successful to treat patients with pancreatic cancer. This remains to be seen, but it does provide investors with some short-term catalysts to look forward to.
Besides this program currently being explored, FibroGen, Inc. has been able to in-license several drugs from Fortis Therapeutics. These drugs that it has obtained through such an agreement are FG-3246 for mCRPC, FG-3165 and FG-3175 for solid tumors. I believe that the most promising one out of the bunch would be FG-3175 because it is an anti-CCR8 monoclonal antibody, which is starting to be explored in several studies. Plus, the fact that it is highly sought out for as well. With a shift in its pipeline after several failures, plus the in-licensing of new promising oncology drugs, I believe that FibroGen, Inc. investors could benefit with any potential gains made.
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