FibroGen Cuts 75% of US Staff After Cancer Drug Fails Trials

Investors have reacted strongly to the recent developments at FibroGen, sending its stock plummeting 45% to $0.57 in premarket trading. The biotech company is undergoing a dramatic restructuring, which includes laying off 75% of its U.S. workforce and halting investment in its key drug candidate, pamrevlumab, following the failure of two late-stage clinical trials in pancreatic cancer.

A year ago, FibroGen already reduced its U.S. workforce by around one-third, laying off 104 employees after pamrevlumab failed in two phase 3 trials. Despite these setbacks, work continued on two pancreatic cancer studies. At a Goldman Sachs event in June, CEO Thane Wettig had stated that the success or failure of these cancer studies would be a crucial turning point for the company. Unfortunately, the company announced that both trials missed their primary endpoints. In response, Wettig has moved quickly to implement a significant cost-reduction plan in the U.S.

The cost-reduction plan involves terminating pamrevlumab R&D and reducing the U.S. workforce by 75%. As of the end of last year, FibroGen had 486 employees globally. The company also plans to quickly wind down any remaining obligations related to pamrevlumab. This swift retreat from pamrevlumab is a result of the disappointing outcomes from two critical studies that ultimately doomed the anti-CTGF antibody. Initially seen as a promising candidate in 2017 following midphase idiopathic pulmonary fibrosis (IPF) data, pamrevlumab failed to deliver in subsequent pivotal trials. Failures in IPF and Duchenne muscular dystrophy led to last year’s layoffs and left pamrevlumab with only two remaining chances for success.

The Pancreatic Cancer Action Network (PanCAN) had been studying pamrevlumab in metastatic pancreatic cancer, while FibroGen conducted a trial in locally advanced, unresectable pancreatic cancer. Although the phase 2/3 PanCAN trial passed an interim assessment suggesting at least a 35% chance of success, the study ultimately found that pamrevlumab did not significantly improve overall survival (OS). FibroGen’s phase 3 trial for another pancreatic cancer population reported a median OS of 17.3 months for patients receiving pamrevlumab with chemotherapy, compared to 17.9 months for those receiving a placebo with chemotherapy.

Analysts from William Blair indicated that investors had low expectations for pamrevlumab in pancreatic cancer due to its past failures and the general difficulty in improving outcomes for solid tumors. Despite these low expectations, the failure of pamrevlumab had a significant negative impact on FibroGen's stock.

With the end of pamrevlumab development, FibroGen is now focusing on earlier-stage drug candidates that it has in-licensed. The most advanced candidate in its pipeline is FG-3246, a CD46-directed antibody-drug conjugate, which is expected to enter phase 1/2 trials this year. William Blair analysts noted that there has been increased investor interest in FibroGen following recent mergers and acquisitions in the antibody-drug conjugate (ADC) field, as well as competitive data releases. However, they caution that FG-3246 is the only clinical-stage candidate in FibroGen’s pipeline and that a potentially registration-enabling study is still several years away from initiation.

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