FibroGen Upgraded By Mizuho On Continued R&D Progress

A combination of slightly better-than-expected first-quarter earnings and potential regulatory approval on the horizon have solidified one analysts faith in FibroGen Inc (NASDAQ: FGEN) moving towards the end of the year.

The Analyst

Mizuho’s Difei Yang upgraded shares of FibroGen from Neutral to Buy with a $61 price target.

The Thesis

The company recently reported Q1 earnings. Earnings came in at a loss of 50 cents per share, roughly in line with the consensus estimate, while sales of $31.925 million beat the $27.15 million estimate.

More notably, FibroGen has continued to make progress on its research and development pipelines. In particular, the company’s Roxadustat stood out the Yang. Top-line Phase III data is expected in Q4 this year, and the drug has received priority review from the China FDA, with potential approval arriving by the year’s end.

“We believe the company is likely to gain the first approval in new generation anemia drugs,” Yang said in a note.

The analyst is also looking forward to an update on Pamrevlumab by mid-year 2018, and expects significant upside if it can reproduce its Phase II results in the planned Phase III trial.

Price Action

Shares of FibroGen closed up 2.8 percent at $51.10 on Tuesday.

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