IBEW Local 353 Pension Plan v. FibroGen, Inc.

Court: United States District Court for the Northern District of California
Case Number: 3:21-cv-3396
Class Period: 12/20/2018 - 04/06/2021
Case Contacts: John Rizio-Hamilton, Jonathan D. Uslaner, Avi Josefson, Scott R. Foglietta, Brittney Balser

On May 6, 2021, Bernstein Litowitz Berger & Grossmann LLP filed a class action lawsuit for violations of the federal securities laws in the U.S. District Court for the Northern District of California against FibroGen, Inc. (“FibroGen” or “the Company”) and certain of its current and former senior executives (collectively, “Defendants”). The complaint expands the class period that was asserted in the previously filed related securities class action pending against FibroGen captioned Xu v. FibroGen, Inc., No. 3:21-cv-2623 (N.D. Cal.), and is brought on behalf of investors in FibroGen common stock between December 20, 2018 and April 6, 2021, inclusive (the “Class Period”).

BLB&G filed this action on behalf of its client, the IBEW Local 353 Pension Plan, and the case is captioned IBEW Local 353 Pension Plan v. FibroGen, Inc., No. 3:21-cv-3396 (N.D. Cal.). The complaint is based on an extensive investigation and a careful evaluation of the merits of this case. To view the complaint, click on the Case Documents tab on the left-hand side of the page.

FibroGen’s Alleged Fraud

Headquartered in San Francisco, California, FibroGen operates a research-based pharmaceutical company based on the discovery, development, and commercialization of novel therapeutic agents to treat serious unmet medical needs. The Company’s principal drug candidate is Roxadustat, a treatment for anemia in patients with chronic kidney disease. The claims asserted in the case arise from Defendants’ misrepresentations regarding the safety and efficacy of Roxadustat as compared to the current standard of care drug, Epogen. 

Specifically, the complaint alleges that, throughout the Class Period, Defendants made false and misleading statements regarding the risk of Major Adverse Cardiac Events (“MACE”) incidents, a key safety endpoint scrutinized by the U.S. Food and Drug Administration (the “FDA”) when considering a New Drug Application (“NDA”). As a result of Defendants’ misrepresentations, shares of FibroGen common stock traded at artificially inflated prices during the Class Period.

The truth began to emerge on May 9, 2019, when FibroGen announced topline results from the pooled safety analyses from its Phase 3 trials of Roxadustat. The Company highlighted positive MACE results, but issued qualified statements about the drug’s risk when compared with the standard of care, such as “there is no clinically meaningful difference in risk.” This statement indicated that there was, in fact, some difference in risk, yet FibroGen did not provide any of the data to show that the risk was not meaningful. In order to assuage investor concern over the safety of Roxadustat, FibroGen continued to “confirm[] the cardiovascular safety of [R]oxadustat,” and assured investors that the Company “had all the guidance from the FDA (it) needed to put together a winning submission.”    

However, on March 1, 2021, after the market closed, FibroGen announced that the FDA was scheduling an advisory committee meeting to review Roxadustat’s NDA, well over a year after its initial submission. An advisory committee meeting this late in the review process indicates that there is a problem with the application, and could, at best, delay the FDA’s approval decision and at worst signal that the FDA may not approve the drug.

Then, on April 6, 2021, after the market closed, FibroGen revealed that the Company had made “post-hoc changes to the stratification factors” in its previously submitted Phase 3 trial results—material changes that made the drug appear to be a safe and effective treatment for chronic kidney disease. These disclosures caused a precipitous decline in the price of FibroGen stock.

The filing of this action does not alter the previously established deadline to seek appointment as Lead Plaintiff. Pursuant to the April 12, 2021 notice published in connection with the Xu action, under the Private Securities Litigation Reform Act of 1995, investors who purchased or otherwise acquired FibroGen securities during the Class Period may, no later than June 11, 2021, seek to be appointed as Lead Plaintiff for the Class. Any member of the proposed Class may seek to serve as Lead Plaintiff through counsel of their choice, or may choose to do nothing and remain a member of the proposed Class.

If you wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact Scott Foglietta of BLB&G at (212) 554-1903 or e-mail at scott.foglietta@blbglaw.com.

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