Shares of FibroGen (FGEN 3.25%) were crashing 37.8% lower as of 10:45 a.m. EDT on Wednesday. The huge drop came after the company announced a stunning revelation following the market close on Tuesday. FibroGen revealed that some previously disclosed safety analyses from a late-stage study of roxadustat in treating anemia of chronic kidney disease (CKD) were incorrect.
The big bombshell in FibroGen's announcement is that the company can no longer claim that roxadustat reduces the risk of major adverse cardiovascular events (MACE) compared to erythropoiesis-stimulating agent epoetin alfa. This undercuts something the company has maintained for a couple of years.
The timing couldn't have been much worse. The news broke as FibroGen was preparing for an upcoming U.S. Food and Drug Administration (FDA) advisory committee meeting set to review the regulatory filing for roxadustat.
FibroGen maintains that there wasn't any change to the underlying data of the late-stage study of roxadustat. The company also said that the efficacy analysis from the study wasn't impacted. However, stratification factors were changed that inflated how much the drug reduced the risks of MACE in patients.
This isn't just a public relations fiasco for FibroGen. It could lower the chances that roxadustat wins FDA approval. It could also impact FibroGen's partnership with AstraZeneca.
FibroGen stated that it has "begun a comprehensive internal review to ensure such issues do not occur in the future." The results from that internal review will likely be important in how quickly the company can begin to rebuild credibility -- and for the biotech stock to recover.
An even more critical even is coming up soon. The FDA advisory committee is tentatively scheduled to meet on July 15 to review the regulatory filing for roxadustat.