FibroGen scores a lifeline as Astellas-partnered roxadustat snags EU approval, triggering $120M milestone payment

FibroGen and Astellas Pharma's closely watched anemia drug has notched a win in Europe. Still, safety concerns and a recent rejection across the Atlantic may clip the med's wings before it can rise to blockbuster heights.

The European Commission on Thursday approved FibroGen and Astellas’ roxadustat, also known as Evrenzo, in anemia associated with chronic kidney disease (CKD). The European green light builds on approvals in China and Japan, but the drug is having a much tougher go in the U.S., where the FDA rejected roxadustat’s application in early August.

Even though roxa has run into a serious setback in the U.S., Mizuho analysts believe it can gin up $690 million in Europe and Japan at peak. That'd translate to $152 million for FibroGen, which is entitled to a 22% royalty rate from Astellas, the analysts wrote to clients this week.

Meanwhile, the EU approval sets up FibroGen to receive $120 million in regulatory milestones by the end of 2021, the analysts said.

RELATED: AstraZeneca, FibroGen's roxadustat hit with tough safety questions in FDA review ahead of key expert meeting

FibroGen is working with Astellas on the drug in places like Japan, Europe, Russia, the Middle East and South Africa. It’s partnered with AstraZeneca in the U.S., China, Australia and New Zealand, Southeast Asia and other markets in the Americas.

Europe’s approval for roxadustat was to be expected, the Mizuho analysts wrote, citing a positive opinion from the European Medicines Agency’s (EMA's) drug reviewers in early June.

The EMA’s Committee for Medicinal Products for Human Use (CHMP) backed roxadustat in June on results from the drug’s phase 3 program, which enrolled 9,600 patients across eight studies globally. The data showed patients with anemia of CKD who received roxadustat were able to achieve and hold target hemoglobin levels, regardless of their dialysis status or whether they’d received previous treatment with erythropoiesis-stimulating agents.

Roxadustat bears the distinction of being the first member of the hypoxia-inducible factor prolyl hydroxylase inhibitor (HIF-PHI) class to win an approval anywhere. It once carried blockbuster expectations, but safety worries have lingered over the drug during its U.S. review.

After the FDA's rejection earlier this month, AZ and FibroGen are regrouping and deciding how to press forward. For FibroGen, the setback has prompted talk of a restructuring.

Roxadustat’s troubles stateside started in April, when FibroGen admitted it had presented manipulated data to make the drug look safer than it is. On an August call with investors, FibroGen CEO Enrique Conterno said the people “directly responsible” for the error had been released from the company.

RELATED: After FibroGen's FDA rejection in anemia, Akebia CEO aims to seize first-in-class opening with vadadustat

Then, in a briefing document ahead of an advisory committee meeting in July, FDA staffers linked roxadustat to a slew of new safety concerns. The advisory committee voted 13-1 against roxadustat’s approval in non-dialysis patients and 12-2 against its approval in dialysis-dependent patients at last month’s meeting.

In the aftermath of the drug’s August complete response letter (CRL), which requested that FibroGen run more clinical studies if it hopes to seek approval again, a restructuring could be in the cards, SVB Leerink analyst Geoffrey Porges has predicted.

Earlier this week, FibroGen announced that its longtime chief financial officer Pat Cotroneo would retire on Sept. 6. He’ll pass the torch to Juan Graham, who joins the company from Johnson & Johnson.

During the same call in August where he discussed FibroGen’s safety data snafu, Conterno said that if the company received a CRL from the FDA, it “would need to basically reassess our priorities and reallocate our resources and significantly decrease expenses.”