Fibrogen 2025 Q1 Earnings Net Income Soars 114.1% Despite Revenue Decline

Fibrogen (FGEN) reported its fiscal 2025 Q1 earnings on May 12th, 2025. The company experienced an impressive turnaround, achieving a net income of $4.64 million in Q1 2025, compared to a net loss of -$32.93 million in the same quarter last year. This reflects a 114.1% positive swing. However, revenue fell sharply by 89.2% to $2.74 million, missing expectations. Fibrogen's guidance remains between $4 million and $8 million for total revenue in 2025, with operating costs projected between $70 million and $80 million, indicating a challenging operational environment ahead.

Revenue
Fibrogen's revenue in Q1 2025 declined significantly, registering a total of $2.74 million, down from $25.36 million in Q1 2024. This total was comprised of $144,000 from development and other revenue, while drug product revenue, net, accounted for $2.60 million.

Earnings/Net Income
Fibrogen returned to profitability with an EPS of $0.05 in Q1 2025, a stark reversal from a loss of $0.33 per share in Q1 2024. The company's net income of $4.64 million marks a significant turnaround, representing a 114.1% positive change from the previous year's net loss of $-32.93 million. This EPS improvement highlights a remarkable financial recovery.

Price Action
The stock price of Fibrogen edged down 2.74% during the latest trading day, dropped 3.99% during the most recent full trading week, yet surged 16.17% month-to-date.

Post-Earnings Price Action Review
The strategy of buying FibroGen (FGEN) when revenue beats expectations and holding for 30 days has shown potential, yet is not without risks. In recent quarters, FibroGen has surpassed consensus EPS estimates twice and topped revenue estimates three times. The strategy's success relies heavily on the 30-day holding period, with potential for gains if the market reacts positively to earnings beats. However, market reactions to FibroGen's earnings have been mixed, as the company has struggled to consistently meet EPS estimates, leading to underperformance compared to the broader market. Future earnings expectations and management's commentary will significantly influence the stock's performance. Despite positive revenue beats, significant operational challenges may impact long-term growth. Investors should monitor market conditions and the company's progress closely during the holding period to assess the strategy's effectiveness.

CEO Commentary
Thane Wettig, Chief Executive Officer, highlighted the transformative sale of FibroGen China to AstraZeneca, which increases expected proceeds to approximately $185 million, extending the company’s cash runway into the second half of 2027. Wettig emphasized the strategic focus on advancing FG-3246 and FG-3180 for metastatic castration-resistant prostate cancer (mCRPC), noting the promising data from clinical trials. He expressed confidence in the upcoming Phase 2 trial, stating, "we are confident that our refined focus... positions us well to create value for shareholders now and in the future."

Guidance
FibroGen expects total revenue for the full year 2025 to be between $4 million and $8 million. The company anticipates total operating costs and expenses for the full year to fall between $70 million and $80 million, representing a significant reduction from previous levels. Additionally, FibroGen plans to initiate the Phase 2 monotherapy trial for FG-3246 and FG-3180 in the third quarter, seeking FDA feedback on the Roxadustat development path for anemia associated with lower-risk myelodysplastic syndromes.

Additional News
FibroGen recently announced the sale of its China subsidiary to AstraZeneca for approximately $185 million, expected to close in the third quarter of 2025. This move strengthens FibroGen’s financial position, extending its cash runway into 2027. In leadership changes, David DeLucia has been appointed as Senior Vice President and Chief Financial Officer. FibroGen is also advancing its oncology pipeline, with the initiation of the Phase 2 monotherapy trial of FG-3246 in metastatic castration-resistant prostate cancer anticipated in the third quarter of 2025. The company continues to focus on driving shareholder value through strategic U.S. development initiatives.