BRIEF—FibroGen slashes workforce

FibroGen announced in a Securities and Exchange Commission (SEC) filing that it has approved a restructuring plan to lower the company’s operating expenses, with the news sending the firm’s shares down 7% to $2.38.

The plan includes an expected reduction to the company’s US workforce of approximately 32% (or 104 employees).

The decision comes after the company last month reported the failure of two Phase III trials of pamrevlumab in patients with Duchenne muscular dystrophy (DMD), adding to the earlier flop with Evrenzo (roxadustat).

FibroGen said it estimates that it will incur non-recurring charges in the range of $13-15 million in connection with the plan, primarily consisting of severance payments, notice pay, accrued vacation, and employee benefits contributions.

The company expects that the majority of the restructuring charges will be incurred in the third quarter of fiscal year 2023 and that the implementation of the headcount reductions, including cash payments, will be substantially complete by the end of the first quarter of 2024.

FibroGen expects savings of around $30-$35 million in annual expenses on a go-forward basis as a direct result of the plan.

It expects that its existing cash, cash equivalents, investments, and accounts receivable will enable it to fund its operating expenses and capital expenditure requirements into 2026.