UPDATE: RBC Capital Starts FibroGen (FGEN) at Outperform

RBC Capital initiated coverage on FibroGen (NASDAQ: FGEN) with an Outperform rating and a price target of $38.00.

Analyst Michael J. Yee said, "We believe FGEN represents a compelling long-term opportunity with two multi-billion-dollar programs: 1) Novel Phase III anemia program with Roxadustat, a safe oral drug already partnered with AstraZeneca and Astellas via one of largest pharma/biotech partnerships, and 2) wholly owned Phase II anti-fibrosis antibody, FG-3019 for IPF and other diseases, which is almost a free call option at these levels."

"We are buyers of FibroGen on the heels of significant value creation potential over next couple years with a safe and oral anemia pill, and attractive call optionality on a very interesting anti-fibrosis antibody that has shown signs of reversal of lung fibrosis. Bottom line: FibroGen is a very attractive investment thanks to its de-risked and well-funded Phase 3 oral pill for anemia that is reasonably likely to take meaningful share or expand the current $6B market dominated by ESAs. IPF antibody is another multi-billion call option, exemplified by Roche’s recent acquisition of InterMune for $8.3B that could provide more catalysts over the next 12-24 months," he added.

For an analyst ratings summary and ratings history on FibroGen click here. For more ratings news on FibroGen click here.

Shares of FibroGen closed at $28.00 yesterday.

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