AstraZeneca Acquires FibroGen's China Unit for $160M, Expands Roxadustat Rights Amid Ongoing Probes

AstraZeneca has announced a $160 million acquisition of FibroGen's China business, solidifying its position in the Chinese market and expanding its rights to the oral anemia drug roxadustat. This strategic move comes as the pharmaceutical giant continues to face government investigations in China.

Acquisition Details and Roxadustat Rights

AstraZeneca will pay $85 million for the enterprise value of FibroGen China, plus an additional $75 million corresponding to the net cash held by the Chinese business. The deal, expected to close by mid-2025, will give AstraZeneca full rights over roxadustat in China, where it is already approved for the treatment of anemia in chronic kidney disease (CKD) and is undergoing regulatory review for chemotherapy-induced anemia.

Roxadustat, marketed under the brand name Evrenzo, is currently the leading drug in the CKD anemia market in China. The acquisition builds upon a decade-long partnership between AstraZeneca and FibroGen, which saw a significant shift last year when AstraZeneca returned rights to the HIF-PH inhibitor in the U.S. and certain other countries while retaining interests in China and South Korea.

Financial Implications and Market Dynamics

For FibroGen, the transaction provides a much-needed financial boost, extending the biotech's cash runway into 2027. The company plans to use the proceeds to repay an outstanding term loan facility to Morgan Stanley Tactical Value, simplifying its capital structure.

The Chinese pharmaceutical landscape is evolving, with local competition on the horizon. China approved a generic version of roxadustat by CSPC Pharmaceutical last summer, and several other companies have filed for approval of their own generic versions.

AstraZeneca's Continued Investment in China Amid Investigations

AstraZeneca's decision to acquire FibroGen's Chinese operations signals its commitment to the Chinese market, despite ongoing government probes. The company is currently facing several investigations, including one involving its former China president, Leon Wang. Additionally, AstraZeneca recently disclosed a potential $900,000 in unpaid importation taxes, which could result in a fine of up to $4.5 million.

Despite these challenges, AstraZeneca CEO Pascal Soriot remains optimistic about the company's future in China, stating, "longer term, we see continuous opportunity for growth in China." The acquisition of FibroGen's China unit underscores this sentiment and reinforces AstraZeneca's dedication to maintaining its strong presence in the region.