The Selling In FibroGen Stock Appears Overdone After Roxadustat Delay

The stock price of FibroGen (NASDAQ: FGEN), a biopharmaceutical company focused on therapeutics in immunology and oncology, has seen a large 36% drop over the last ten trading days, while it’s down 32% over the last five trading days, but we believe the stock, after the recent drop, may trend higher in the near term. The recent drop came after the U.S. FDA requested an additional meeting before reviewing the company’s much awaited Roxadustat, a drug used for treatment of anemia in chronic kidney disease. What this means is that there will be a delay in the commercial launch of the drug. This did not bode well with the investors, given there has already been a delay in review of Roxadustat, and the stock plunged over 30% in a single trading session.

Looking at the recent decline, the 36% drop for FGEN stock over the last ten days compares with a 3.3% drop seen in the broader S&P 500 index. Now, is FGEN stock poised to decline further? It doesn’t look that way. While Roxadustat will see a delay of a few months for its commercial launch, the drug, which is co-developed by AstraZeneca, is likely to be approved this year, and it alone can garner over $3 billion in peak sales. The importance of Roxadustat also stems from it belonging to the oral inhibitor class, while the existing therapies of Amgen and Johnson & Johnson are injectables.

Now, the company’s total sales in 2020 were $176 million, and Roxadustat approval will bring meaningful growth to its top-line going forward. While the delay is surely a negative for the company, the stock has already corrected around 40% from levels of around $56 seen in mid-February 2021, to $34 now, implying some of the negative news is already priced in. Looking forward, based on our machine learning analysis of trends in the stock price over the last few years, we believe that there is a strong chance of a rise in FGEN stock over the next month (twenty-one trading days). See our analysis on FibroGen Stock Chances of Rise for more details. Curious about the possibility of rising over the next quarter? Check out the FGEN Stock AI Dashboard: Chances Of Rise And Fall for a variety of scenarios on how FGEN stock could move.

Five Days: FGEN -32%, vs. S&P500 -1.2%; Underperformed market

(Extremely rare event)

• FibroGen, Inc stock declined 32% over a five-day trading period ending 3/4/2021, compared to the broader market (S&P500) decline of 1.2%
• A change of -32% or more over five trading days is an extremely rare event, which has occurred 3 times out of 1256 in the last five years

Ten Days: FGEN -36%, vs. S&P500 -3.3%; Underperformed market

(<1% likelihood event)

• FibroGen, Inc stock declined 36% over the last 10 trading days (two weeks), compared to the broader market (S&P500) decline of 3.3%
• A change of -36% or more over 10 trading days is an <1% likelihood event, which has occurred 10 times out of 1240 in the last five years

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