2023-06-27 18:10:17 ET
Stifel has downgraded its rating of FibroGen to hold in the wake of a failed Phase 3 clinical trial for the biotech's lead product pamrevlumab in the treatment of idiopathic pulmonary fibrosis, or IPF.
Stifel noted that the drug also recently failed a Phase 3 trial in the treatment of Duchenne muscular dystrophy, "which further calls into question the biologic activity of pam." Stifel added that although the drug has upcoming Phase 3 readouts for pancreatic cancer and DMD, the investment bank had "little confidence left in the pam program."
FibroGen reported early Monday that pamrevlumab failed to meet its primary endpoint in a Phase 3 study for IPF and that it was discontinuing a second Phase 3 trial for the same indication. Shares of the biotech plunged 83% following the news on Monday. The stock lost an additional 7% on Tuesday.
The investment bank said in its note released Monday that it was now valuing FibroGen on the value of its roxadustat program, cash and 5% probability of success for DMD until it could further assess its pipeline.
"Though FGEN shares are trading punitively below cash, we see a long road for shares to recapture value at this time, with possibility to converge to Roxa value longer term," Stifel added.
More on FibroGen:
FibroGen drives Scholar Rock, Omega lower after setback for lung disease candidate
FibroGen's Unsteady Course: Assessing Fallout From IPF Failure And The Road Ahead
FibroGen crashes 86% as late-stage trial for lung disease candidate fails
FibroGen slips as late-stage trial for Duchenne candidate fails
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Stifel downgrades FibroGen to hold, says it's lost confidence in lead drug