FibroGen announces $30M "at the market" equity offering

SAN FRANCISCO, CA - FibroGen, Inc. (NASDAQ:FGEN), whose stock has surged over 75% in the past six months despite trading at $0.58, has entered into a sales agreement with BofA Securities, Inc. to potentially sell up to $30 million of its common stock in an "at the market" equity offering, the company disclosed today. According to InvestingPro data, the company maintains a positive cash position relative to debt, though it’s experiencing rapid cash burn. This type of offering allows shares to be sold through BofA directly on the Nasdaq Global Select Market or any other trading market for the common stock at market prices.

The agreement, effective today, stipulates that BofA will make commercially reasonable efforts to sell the shares based on FibroGen’s instructions, which may include price, time, or size limits. In return, BofA will receive a commission of up to 3% of the gross proceeds from any shares sold. With a market capitalization of just $58.45 million and trading at modest revenue multiples, InvestingPro analysis suggests the stock is currently undervalued.

FibroGen, a biopharmaceutical company, is not obligated to sell any shares under this agreement. The sales arrangement will conclude either when all the shares are sold or upon the termination of the agreement by either party.

The shares are being offered pursuant to a shelf registration statement on Form S-3, which was declared effective by the U.S. Securities and Exchange Commission on July 10, 2024, and a prospectus supplement dated today. It’s important to note that this report does not constitute an offer to sell or a solicitation of an offer to buy any securities.

Legal counsel Cooley LLP provided an opinion on the shares to be sold, which is filed with the Securities and Exchange Commission as part of FibroGen’s current report on Form 8-K, along with the full text of the sales agreement.

This move allows FibroGen to finance its operations flexibly by selling shares over time, responding to market conditions and funding needs. The announcement is based on a press release statement and the company’s filing with the SEC. With negative EBITDA of -$114.82 million and a current ratio of 1.28, InvestingPro analysis reveals additional insights about the company’s financial health. For deeper analysis, investors can access the comprehensive Pro Research Report, available among 1,400+ detailed company analyses on InvestingPro.

In other recent news, FibroGen announced the sale of its China division to AstraZeneca (NASDAQ:AZN) for a total consideration of approximately $160 million, a move set to enhance the company’s financial stability and extend its cash runway into 2027. The transaction, expected to close by mid-2025, involves AstraZeneca acquiring all rights to the drug roxadustat in China. This strategic divestiture allows FibroGen to repay its term loan facility and focus on its core development programs, including the advancement of FG-3246 and FG-3180 for metastatic castration-resistant prostate cancer. H.C. Wainwright maintained a Buy rating on FibroGen, with a $10 price target, highlighting the potential of its antibody drug conjugate pipeline. The firm anticipates a positive impact on the stock if roxadustat is successfully launched for myelodysplastic syndromes in the U.S. Additionally, FibroGen appointed David DeLucia as its new Chief Financial Officer, succeeding Juan Graham. DeLucia, previously Vice President at FibroGen, will lead the company’s global finance organization. CEO Thane Wettig expressed confidence in DeLucia’s ability to support the company’s strategic initiatives and product pipeline.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.