FibroGen (FGEN) reported a second failure for its main asset on Monday, and FGEN stock slumped to its lowest point on record.
X
The drug, dubbed pamrevlumab, failed to hit the pre-specified bar for treating idiopathic pulmonary fibrosis. Investors focused on pamrevlumab’s impact on this lung disease after the drug also failed to make a difference in Duchenne muscular dystrophy earlier this month.
Based on the results, FibroGen will discontinue two final phase studies of pamrevlumab in idiopathic pulmonary fibrosis. In addition, the company will strive to expand its cash trail in 2026 through a cost reduction plan.
William Blair analyst Andy Hsieh saw favorable risk/reward for FibroGen given the significant market opportunity in idiopathic pulmonary fibrosis.
“Unfortunately, today’s results are clearly negative, removing our bullish thesis for the business and raising questions about its future direction,” Hsieh said in a note to clients. “We believe the stock will likely trade below cash given the lack of visibility into cash flow extension strategies and the early-stage nature of pipeline assets.”
In afternoon trading in the stock market today, FGEN stock fell 82.2% near 2.90. On June 7, shares fell more than 8% after pamrevlumab failed in Duchenne muscular dystrophy, a disease that causes muscle wasting.
FGEN stock: drop in the key metric
The researchers tested the patients’ ability to exhale forcefully – a measure called forced vital capacity – after 48 weeks of treatment. But recipients of pamrevlumab showed no improvement. On the contrary, they also showed a decrease in forced vital capacity, although less than the placebo recipients.
On average, patients who received pamrevlumab experienced a 260 milliliter drop in forced vital capacity versus a 330 milliliter drop for placebo recipients. Pamrevlumab also did not slow disease progression.
William Blair’s Hsieh downgraded FGEN stock to a market performance rating. He noted that FibroGen is also working on a treatment for pancreatic cancer and another treatment for Duchenne muscular dystrophy. But investors have low expectations on both.
The fall in FibroGen stock marked a record low in massive volume.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
YOU MIGHT ALSO LIKE:
Pfizer Stock Tumbles on ‘Big Setback’ in Obesity Treatment Vs. Novo Nordisk, Eli Lilly
Top 2% Stock Dexcom Raises 2025 Outlook Amid ‘Rapid’ Expanding Diabetes Market
View IBD stock lists and get pass/fail scores for all your stocks with IBD Digital
Watch the IBD Investment Strategies Show for actionable market insights
Looking for the next Apple or Amazon? Start with these S&P 500-Beating Lists