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01/10 16:12
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call reveals a positive financial performance with increased revenue and reduced expenses. However, uncertainties remain, such as the thrombotic risk in the roxadustat trial and the need for additional capital for Phase III trials. While the company plans to extend its cash runway through strategic sales, the potential impact on operational capacity and flexibility creates a balanced outlook. The raised revenue guidance and cash runway extension are positive, but the Q&A highlights risks and uncertainties that temper overall sentiment, resulting in a neutral prediction.
Revenue Total revenue for the third quarter of 2025 was $1.1 million, compared to $0.1 million for the same period in 2024, representing a significant increase. The increase is attributed to improved financial performance and operational adjustments.
Operating Costs and Expenses Total operating costs and expenses for the third quarter of 2025 were $6.5 million, compared to $47.8 million for the third quarter of 2024, a decrease of $41.3 million or 86% year-over-year. This reduction is due to cost-cutting measures and restructuring efforts.
R&D Expenses R&D expenses for the third quarter of 2025 were $1.2 million, compared to $20 million in the third quarter of 2024, a decrease of $18.8 million or 94% year-over-year. The decrease is due to reduced spending on research and development activities.
SG&A Expenses SG&A expenses for the third quarter of 2025 were $5.3 million, compared to $9.4 million in the third quarter of 2024, a decrease of $4.1 million or 43% year-over-year. The reduction is attributed to streamlined operations and cost-saving initiatives.
Net Loss Net loss from continuing operations for the third quarter of 2025 was $13.1 million or $3.25 per share, compared to a net loss of $48.3 million or $12.01 per share for the third quarter of 2024. The improvement is due to reduced operating expenses and improved financial management.
Cash Position As of September 30, 2025, the company reported $121.1 million in cash, cash equivalents, accounts receivable, and investments in the U.S., ensuring a cash runway into 2028. This improvement is due to the sale of FibroGen China and other financial strategies.
FG-3246 and FG-3180: Progressing in metastatic castration-resistant prostate cancer (mCRPC). Phase II monotherapy trial initiated earlier this quarter. Top-line results from combination trial with enzalutamide expected in Q1 2026. FG-3246 targets CD46, a novel tumor-selective epitope, with potential to address a $5 billion annual market.
Roxadustat: Regulatory path forward for treatment of anemia in lower-risk myelodysplastic syndromes (MDS) established. Phase III trial protocol submission planned for Q4 2025. Potential to address unmet need in 49,000 U.S. patients with no current oral treatments available.
FibroGen China Sale: Completed sale to AstraZeneca for $220 million, unlocking cash held in China and extending cash runway into 2028. This transaction also allowed repayment of a term loan with Morgan Stanley Tactical Value.
Financial Performance: Total revenue for Q3 2025 was $1.1 million, up from $0.1 million in Q3 2024. Operating costs reduced by 86% year-over-year. Cash runway extended into 2028 with $121.1 million in cash and equivalents as of September 30, 2025.
Streamlined Operations: Reduced fixed cost infrastructure and operating expenses by 70% year-over-year to focus on U.S. pipeline opportunities.
Regulatory Risks: The company is advancing roxadustat for the treatment of anemia associated with lower-risk MDS and plans to submit a pivotal Phase III protocol. However, regulatory approval is uncertain and subject to FDA requirements, including trial design and safety concerns such as thrombotic risks.
Clinical Trial Risks: The success of FG-3246 and FG-3180 depends on ongoing and future clinical trials. Challenges include achieving efficacy benchmarks, managing safety concerns like neutropenia, and ensuring patient enrollment and retention.
Financial Risks: Despite extending its cash runway into 2028, the company faces financial risks due to its reliance on clinical milestones for future funding and its current market capitalization of approximately $45 million, which is low relative to its operational needs.
Market Competition: FG-3246 and FG-3180 are targeting a competitive prostate cancer market. The company must demonstrate clear clinical and commercial differentiation to compete with existing and investigational treatments.
Operational Risks: The company has undergone significant restructuring, including the sale of FibroGen China and reduction in operating costs. While this has extended the cash runway, it may impact operational capacity and flexibility.
Supply Chain and Manufacturing Risks: The development and commercialization of FG-3246 and FG-3180 require reliable manufacturing and supply chain operations. Any disruptions could delay clinical trials or product launches.
FG-3246 and FG-3180 Development: The company is progressing FG-3246 and FG-3180 in metastatic castration-resistant prostate cancer (mCRPC). A Phase II monotherapy trial of FG-3246 and FG-3180 was initiated earlier this quarter. Top-line results from an investigator-sponsored trial of FG-3246 in combination with enzalutamide in mCRPC are expected to be presented at a medical conference in Q1 2026. Interim analysis of the Phase II trial is planned for the second half of 2026.
Roxadustat Development: The company plans to submit the Phase III trial protocol for roxadustat for the treatment of lower-risk myelodysplastic syndromes (MDS) in patients with high transfusion burden later this quarter. The potential pivotal Phase III trial will include patients requiring 4 or more RBC units in 2 consecutive 8-week periods prior to randomization. The company is exploring options to either maintain roxadustat as a wholly owned asset or partner the program.
Financial Guidance: The company expects total revenues for full year 2025 to be between $6 million and $8 million. Total operating costs and expenses for full year 2025 are expected to be between $50 million and $60 million, representing a 70% reduction from full year 2024. The company has extended its cash runway into 2028.
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The earnings call reveals a positive financial performance with increased revenue and reduced expenses. However, uncertainties remain, such as the thrombotic risk in the roxadustat trial and the need for additional capital for Phase III trials. While the company plans to extend its cash runway through strategic sales, the potential impact on operational capacity and flexibility creates a balanced outlook. The raised revenue guidance and cash runway extension are positive, but the Q&A highlights risks and uncertainties that temper overall sentiment, resulting in a neutral prediction.
The earnings call presents mixed signals. Financial performance shows improvements with reduced expenses and increased revenue, but guidance is weak with low revenue projections. The Q&A reveals uncertainties in clinical trial designs and market exclusivity, though positive feedback from physicians is encouraging. The divestiture of FibroGen China extends the cash runway, but risks in clinical developments and regulatory approvals remain. Overall, these factors balance out, resulting in a neutral sentiment for the stock price over the next two weeks.
The earnings call reflects several challenges: a significant revenue drop, financial instability with a small market cap, and dependency on the FibroGen China sale. Despite a positive cash flow and cost reductions, the company's future hinges on uncertain clinical trial outcomes and regulatory approvals. The Q&A reveals management's cautious approach, notably holding off on new studies despite cash infusion, indicating strategic hesitance. The small market cap suggests potential volatility, but overall, the negative aspects outweigh the positives, predicting a stock price decrease between -2% and -8%.
The earnings call shows mixed signals: a significant revenue drop, but also a substantial reduction in expenses and positive cash flow. The sale of FibroGen China improves cash runway, but regulatory and competitive risks remain. The Q&A reveals cautious optimism about FDA interactions but hesitance in new study investments. The market cap is small, suggesting potential volatility, but the overall sentiment remains neutral due to balanced positive and negative factors.
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