FibroGen Shares Gain As Analyst Creates Bullish Pitch On Pulmonary Fibrosis Opportunity

  • William Blair has upgraded FibroGen Inc FGEN from Market Perform To Outperform, citing a deep dive opportunity for its wholly owned monoclonal antibody pamrevlumab
  • The company is developing the candidate against connective tissue growth factor and is being evaluated in idiopathic pulmonary fibrosis (IPF), locally advanced pancreatic cancer (LAPC), and Duchenne muscular dystrophy (DMD).
  • The analyst notes that the Phase 3 LELANTOS-1 trial in non-ambulatory DMD readout, expected during the first half of this year, could provide some volatility to the stock.
  • The analyst writes that, historically, clinical outcomes in one indication could be used to extrapolate into other indications within the same program. 
  • In the event of a setback in DMD, share weakness can offer additional entry opportunities into the IPF Phase 3 readout due to the improved risk/reward symmetry.
  • Overall, the analyst expects the disease areas combined to represent over $16 billion in total addressable markets that could emerge as key growth and value drivers for the company. 
  • As informed by recent investor discussions, due diligence efforts have been most heavily focused on the IPF indication. While William Blair weighs most of the valuation toward IPF, LAPC and DMD are also areas of high unmet need and could offer a considerable market opportunity for pamrevlumab, though LAPC and DMD could represent free call options for investors.
  • Price Action: FGEN shares are up 9.36% at 23.61 on the last check Tuesday.
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