Shares of biotechnology company FibroGen collapsed on Monday after the company reported its third clinical setback since early May, this time from a study testing one of its medicines in idiopathic pulmonary fibrosis.
The treatment, an experimental drug called pamvrelumab, failed a Phase 3 trial in patients with the rare lung condition, FibroGen said in a statement. Compared to a placebo, the therapy didn’t lead to a statistically significant improvement in an indicator of lung health that measures how much air a person breathes out. It also missed a secondary goal focused on slowing disease progression.
FibroGen said the drug was generally safe and well tolerated. Treatment-related side effects were mostly mild to moderate, and more serious adverse events were observed in placebo recipients.
Based on the results, the company will stop a second ongoing Phase 3 trial in IPF. It’s also planning a “significant cost reduction effort” in the U.S., in the hopes of having enough cash to operate into 2026. FibroGen didn’t say whether that restructuring would include layoffs. The company had 592 total employees as of the end of January, according to a regulatory filing.
The study failure is the latest in a string of setbacks for FibroGen in recent years. Though the company successfully brought to market an anemia pill that’s been approved for use in Europe, China and Japan, the drug was rejected by U.S. regulators in 2021 due to safety risks, triggering a restructuring. That same medicine, roxadustat, also fell short in a Phase 3 study in myelodysplastic syndrome, a type of bone marrow cancer.
FibroGen has been hoping for better luck with pamvrelumab, its only other medicine in human testing. But that drug has now failed in two Phase 3 studies, having already missed the goal of a Duchenne muscular dystrophy study. Late-stage trials are still ongoing in pancreatic cancer as well as in younger Duchenne patients who are still walking.
“We don’t expect those to work,” wrote Michael Yee, an analyst at the investment firm Jefferies, in a note to clients after the announcement.
Investors aren’t sticking around to find out. Shares plummeted more than 82%, to under $3 apiece, in Monday trading.