FibroGen(FGEN) - 2021 Q4 - Annual Report

Product Dependence and Competition - The company is heavily reliant on the success of its lead product, roxadustat, and its second compound, pamrevlumab, for future growth[16] - The FDA issued a complete response letter for roxadustat, decreasing the likelihood of approval and successful commercialization in the U.S., which may delay expected revenue[16] - The company faces significant competition in the pharmaceutical industry, which may impact the market acceptance of its product candidates[16] - The company has limited commercialization experience, which poses risks to achieving sustained commercial success for its products[16] - The regulatory approval process for product candidates is highly uncertain, and the company may not obtain necessary approvals[20] International Operations and Risks - The company is subject to various risks associated with international operations, particularly in China, which could adversely affect its business[21] - The company has established a joint venture, Falikang, with AstraZeneca to distribute roxadustat in China, where it holds a 51.1% ownership stake[25] - Cash flows from FibroGen Beijing are intended to remain onshore in China, with no debt repayments or distributions to entities outside of China to date[29] - The company’s liquidity position and capital contributions to FibroGen Beijing depend on various factors, including potential government policies affecting operations in China[29] - The company’s operations may be affected by unfavorable government policies on cross-border relations and international trade, impacting competitive position and market price of common stock[28] Financial Reporting and Market Risks - The company identified material weaknesses in its internal control over financial reporting as of December 31, 2020, which have since been remediated[20] - The ongoing COVID-19 pandemic could continue to adversely affect the company's business operations[22] - The company is exposed to market risks primarily due to fluctuations in foreign currency exchange rates, with most revenue from collaboration agreements denominated in U.S. dollars[735] - As of December 31, 2021, the company did not have material financial assets and liabilities in foreign currencies, indicating a hypothetical 10% change in exchange rates would not have resulted in a material net gain or loss[736] - The primary objective of the company's investment activities is to preserve capital while maximizing income from cash and cash equivalents, primarily investing in money market funds as of December 31, 2021[737] - The company has not entered into any hedging arrangements regarding foreign currency risk or other derivative financial instruments to date[738]