UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-K 

(Mark One)

For the fiscal year ended December 31, 20152018

OR

For the transition period from           to           .

Commission file number: 001-36740 

FIBROGEN, INC.

(Exact name of registrant as specified in its charter) 

Registrant’s telephone number, including area code:

(415) 978-1200 

Securities registered pursuant to Section 12(b) of the Act: 

Securities registered pursuant to Section 12(g) of the Act:

None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes  x☑    No  o☐

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.    Yes  o☐     No  x☑

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x☑     No  o☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x☑     No  o☐

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  x☑

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”filer,” “smaller reporting company,” and “smaller reporting“emerging growth company” in Rule 12b-2 of the Exchange Act:

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.     ☐    

Indicate by check mark whether the registrant is a shell company (as defined in Exchange Act Rule 12b-2).    Yes  o☐    No  x☑

The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant, computed by reference to the closing price as of the last business day of the registrant’s most recently completed second fiscal quarter, June 30, 2015,2018, was approximately $1,151.1$3,548.1 million. Shares of Common Stock held by each executive officer and director and stockholders known by the registrant to own 10% or more of the outstanding stock based on public filings and other information known to the registrant have been excluded since such persons may be deemed affiliates. This determination of affiliate status is not necessarily a conclusive determination for other purposes.

The number of shares of common stock outstanding as of January 31, 20162019 was 62,074,139.85,562,391.

DOCUMENTS INCORPORATED BY REFERENCE

Items 10, 11, 12, 13 and 14 of Part III of this Annual Report on Form 10-K incorporate information by reference from the definitive proxy statement for the registrant’s 2019 Annual Meeting of Stockholders to be filed with the Securities and Exchange Commission pursuant to Regulation 14A not later than after 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K.

TABLE OF CONTENTS

FORWARD-LOOKING STATEMENTS

This Annual Report filed on Form 10-K and the information incorporated herein by reference, particularly in the sections captioned “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Business,” contains forward-looking statements, which involve substantial risks and uncertainties. In this Annual Report, all statements other than statements of historical or present facts contained in this Annual Report, including statements regarding our future financial condition, business strategy and plans and objectives of management for future operations, are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “believe,” “will,” “may,” “estimate,” “continue,” “anticipate,” “contemplate,” “intend,” “target,” “project,” “should,” “plan,” “expect,” “predict,” “could,” “potentially” or the negative of these terms or other similar terms or expressions that concern our expectations, strategy, plans or intentions. Forward-looking statements appear in a number of places throughout this Annual Report and include statements regarding our intentions, beliefs, projections, outlook, analyses or current expectations concerning, among other things, our ongoing and planned preclinical development and clinical trials, the timing of and our ability to make regulatory filings and obtain and maintain regulatory approvals for roxadustat, FG-3019pamrevlumab and our other product candidates, our intellectual property position, the potential safety, efficacy, reimbursement, convenience clinical and pharmaco-economic benefits of our product candidates, the potential markets for any of our product candidates, our ability to develop commercial functions, our ability to operate in China, expectations regarding clinical trial data, our results of operations, cash needs, spending of the proceeds from our initial public offering and the concurrent private placement, financial condition, liquidity, prospects, growth and strategies, the industry in which we operate and the trends that may affect the industry or us. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs. These forward-looking statements are subject to a number of risks, uncertainties and assumptions described in the section of this Annual Report captioned “Risk Factors” and elsewhere in this Annual Report.

These risks are not exhaustive. Other sections of this Annual Report may include additional factors that could adversely impact our business and financial performance. Moreover, we operate in a very competitive and rapidly changing environment. New risk factors emerge from time to time, and it is not possible for our management to predict all risk factors nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in, or implied by, any forward-looking statements.

You should not rely upon forward-looking statements as predictions of future events. We cannot assure you that the events and circumstances reflected in the forward-looking statements will be achieved or occur. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. The forward-looking statements made in this Annual Report are based on circumstances as of the date on which the statements are made. Except as required by law, we undertake no obligation to update publicly any forward-looking statements for any reason after the date of this Annual Report or to conform these statements to actual results or to changes in our expectations.

This Annual Report also contains market data, research, industry forecasts and other similar information obtained from or based on industry reports and publications, including information concerning our industry, our business, and the potential markets for our product candidates, including data regarding the estimated size and patient populations of those and related markets, their projected growth rates and the incidence of certain medical conditions, as well as physician and patient practices within the related markets. Such data and information involve a number of assumptions and limitations, and you are cautioned not to give undue weight to such estimates.

You should read this Annual Report with the understanding that our actual future results, levels of activity, performance and achievements may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements.

PART I

ITEM 1. BUSINESS

OVERVIEW

We are a research-based,leading biopharmaceutical company focused on the discovery, developmentdiscovering and commercializationdeveloping a pipeline of novel therapeutic agents to treat serious unmet medical needs. first-in-class therapeutics. We have capitalized onapplied our extensive experiencepioneering expertise in fibrosis and hypoxia induciblehypoxia-inducible factor (“HIF”), and connective tissue growth factor (“CTGF”) biology to generate multiple programs targeting various therapeutic areas. Ourdevelop innovative medicines for the treatment of anemia, fibrotic disease, and cancer.

Roxadustat, our most advanced product candidate, roxadustat, or FG-4592, is an oral small molecule inhibitor of HIF prolyl hydroxylaseshydroxylase (“HIF-PHs”HIF-PH”) activity that has received New Drug Application (“NDA”) approval in anemia associated with chronic kidney disease (“CKD”) in dialysis-dependent (“DD”) patients from the National Medical Products Administration (“NMPA”) (previously known as the China Food and Drug Administration) of the People’s Republic of China (“China”).

In conjunction with our collaboration partners, AstraZeneca AB (“AstraZeneca”) and Astellas Pharma Inc. (“Astellas”), inwe have completed the Phase 3 clinical developmenttrials of roxadustat intended to support our NDA in the United States (“U.S.”) and Marketing Authorization Application (“MAA”) in the European Union (“EU”) for the treatment of anemia in chronic kidney diseaseCKD. We and our partners are in the process of preparing an NDA for submission to the U.S. Food and Drug Administration (“CKD”FDA”) and an MAA for submission to the European Medicines Agency (“EMA”) this year, both of which would cover anemia patients with dialysis-dependent CKD and non-dialysis-dependent CKD.

In Japan, Astellas submitted an NDA for the treatment of anemia in CKD patients on dialysis in September 2018, which is currently under review by the Pharmaceuticals and Medical Devices Agency (“PMDA”). OurWe expect an approval decision on the Japan dialysis NDA in the second product candidate, FG-3019,half of 2019.

Beyond anemia in CKD, roxadustat is in Phase 3 clinical development in the U.S. and Europe and in Phase 2/3 development in China for anemia associated with myelodysplastic syndromes (“MDS”). 

Pamrevlumab, a human monoclonal antibody inthat inhibits the activity of CTGF, is advancing toward Phase 23 clinical development for the treatment of idiopathic pulmonary fibrosis (“IPF”), and pancreatic cancer, and is currently in a Phase 2 trial for Duchenne muscular dystrophy (“DMD”) and liver fibrosis. We have taken.

Applying our internally developed proprietary technology in recombinant human collagen, FibroGen is also developing a global approach to the development and future commercialization of our product candidates, and this includes development and commercializationbiosynthetic corneal implant in the People’s Republic of China (“China”).China.

We intend to leverage our extensive experience in fibrosis and HIF biology to build a successful biopharmaceutical company with a strong pipeline of products and product candidates for the treatment of anemia, fibrosis, cancer, corneal blindness and other serious unmet medical needs. The chart below is a summary of our most advanced product candidates:

ROXADUSTAT FOR THE TREATMENT OF ANEMIA IN CHRONIC KIDNEY DISEASE

Roxadustat is an internally discovered HIF-PH inhibitor that acts by stimulating the body’s natural pathway of erythropoiesis, or red blood cell production. Roxadustat, the first HIF-PH inhibitorproduction, to entertreat anemia.

The topline results from our Phase 3 study used to support the China NDA in dialysis, as well as the Phase 3 study in non-dialysis, are described in the section below captioned “Roxadustat for the Treatment of Anemia in Chronic Kidney Disease in China.” We expect CKD non-dialysis patients to be added to the roxadustat label once regulatory inspections of the Phase 3 non-dialysis clinical development, representstrial sites are performed by the NMPA.

Globally, the Phase 3 CKD-anemia program encompasses 15 Phase 3 studies of roxadustat in both non-dialysis-dependent (“NDD”) and dialysis-dependent CKD patients designed to support independent regulatory approvals in the U.S., Europe, Japan, and China.

We, and our partners Astellas and AstraZeneca, each announced topline Phase 3 results for roxadustat in 2018 which we plan to include in support of regulatory submissions in the U.S. and Europe in 2019. These results are described in the following section. The pooled safety analyses for the U.S. (both for NDD-CKD and DD-CKD), including the major adverse cardiovascular event (“MACE”) endpoint, a new paradigmcomposite endpoint of death, myocardial infarction and stroke, are anticipated to be completed in the second quarter of 2019, and we intend to submit a U.S. NDA in the third quarter of 2019. We expect Astellas to submit an MAA to the EMA shortly thereafter. Both the U.S. NDA and European MAA for roxadustat are expected to cover anemia associated with dialysis dependent CKD and non-dialysis-dependent CKD.

Our partner Astellas has filed its NDA for roxadustat for the treatment of anemia in CKDdialysis patients with the potential to offer a safer, more effective, more convenientPMDA, and more accessible therapy than the current therapies available for anemia in CKD, such as injectable erythropoiesis stimulating agents (“ESAs”).

Roxadustat is currently in Phase 3 global developmentresults used to support the Japan NDA are described in the section below captioned “Roxadustat for the Treatment of Anemia in

Chronic Kidney Disease in Japan. Astellas has completed one of the two Phase 3 studies in non-dialysis CKD expected to serve as a basis for a supplemental NDA in Japan for the treatment of anemia in non-dialysis CKD patients.

CKD affects 10-12% of the adult population globally. While anemia is common in patients with CKD. Over 1,400 subjects have participated in 26 completed Phase 1at advanced stages of CKD who face increased risks of health consequences, many of those patients are left untreated or are sub-optimally treated for anemia due to safety concerns and 2 clinical studies for roxadustat in North America, Europe and Asia. These studies have demonstrated roxadustat’s potential for a favorable safety and efficacy profile in anemic CKD patients, both those who are dialysis-dependentlimited access to the currently available therapies such as erythropoiesis stimulating agents (“DD-CKD’), including hyporesponsive patients, and those who are not dialysis-dependent (“NDD-CKD”ESAs”). According to IMS Health, 2013 global ESA salesEven in all anemia indications totaled $8.6 billion. Whilemajor markets such as the U.S., the use of ESAs to treat anemia in CKD has largely been limited to usethe dialysis-dependent CKD population in DD-CKD patients, werecent years. We and our partners believe that, as an oral agent with a potentially more favorablean acceptable safety profile, roxadustat could increase accessibilitytreatment access to patients and expand the market fornon-dialysis anemia treatment by penetrating the NDD-CKD market.

In the longer term, we believe roxadustat has the potential to address non-CKD anemia markets beyond CKD, including chemotherapy-induced anemia (“CIA”), anemia related to inflammation (such as inflammatory bowel disease, lupus, and rheumatoid arthritis), myelodysplastic syndrome (“MDS”),MDS, and in surgical procedures requiring red blood cell transfusions.

We, along with our collaboration partners Astellas Pharma Inc. (“Astellas”), Roxadustat is in ongoing clinical trials in MDS, and AstraZeneca AB (“AstraZeneca”), have designedwe plan to initiate a global Phase 3 program to support regulatory approval2 clinical trial of roxadustat in both NDD-CKDthe U.S. in CIA in 2019.

Completed Phase 3 Clinical Trials of Roxadustat in CKD Anemia for U.S. and DD-CKD patientsEuropean Regulatory Submissions

We recently announced that roxadustat met all pre-specified primary efficacy endpoints in the Unitedthree U.S. and Europe Phase 3 trials conducted by us, which we have named ANDES in non-dialysis-dependent CKD, HIMALAYAS in incident (newly initiated) dialysis patients, and SIERRAS in dialysis-dependent CKD patients. These results are detailed below and analysis of secondary endpoints is ongoing.

AstraZeneca has also announced positive topline results from each of its roxadustat Phase 3 trials (named OLYMPUS in non-dialysis CKD and ROCKIES in dialysis-dependent CKD). AstraZeneca and FibroGen are collaborating on the development and commercialization of roxadustat for the treatment of anemia in the U.S., China, and other markets in the Americas and in Australia/New Zealand, as well as Southeast Asia.  

Astellas has also announced positive topline results from their trial named ALPS, a roxadustat Phase 3 trial in non-dialysis patients, and PYRENEES, a roxadustat Phase 3 trial in dialysis patients. Astellas and FibroGen are collaborating on the development and commercialization of roxadustat for the treatment of anemia in territories including Japan, Europe, the Commonwealth of Independent States, (“U.S.”), the European UnionMiddle East, and South Africa.

The table below is a summary of our Phase 3 CKD anemia trials by regulatory approval region.

Roxadustat Phase 3 CKD Anemia Clinical Trials

Non-Dialysis CKD Patients (ANDES) – FibroGen

ANDES is a 922-patient Phase 3, randomized, double-blinded, placebo-controlled trial designed to evaluate the efficacy and safety of roxadustat vs. placebo for the treatment of anemia in patients with later stage CKD (stages 3, 4 or 5) who are not dialysis dependent. This study was conducted in the U.S. and 14 other countries. Treatment duration was up to 4.5 years, with average duration of 1.7 years. Baseline hemoglobin levels averaged 9.1 g/dL in both the roxadustat (N=616) and the placebo (N=306) arms.

In a pre-specified secondary efficacy analysis, roxadustat reduced the risk of rescue therapy by 81% (hazard ratio (HR)=0.19) defined as the time to first use of blood transfusion, administration of an ESA or intravenous (“EU”IV”), Japan iron in the first 52 weeks of treatment, p<0.0001. In addition, roxadustat reduced the risk of blood transfusion by 74% (HR=0.26) in the time to first blood transfusion during the first 52 weeks of treatment, p<0.0001. 

Incident Dialysis CKD Patients Study (HIMALAYAS) – FibroGen

HIMALAYAS is a 1,043-patient Phase 3 randomized, open-label, active-controlled trial to assess the efficacy and China. Oursafety of roxadustat compared to epoetin alfa, an ESA, for the treatment of anemia in CKD patients who have newly initiated dialysis treatment for end-stage renal disease (“ESRD”) and have had minimal or no exposure to an ESA prior to study participation. This study was conducted in the U.S. and 17 other countries. Treatment duration was up to 4.4 years, with mean duration of 1.8 years. Mean baseline hemoglobin was 8.43 g/dL in the roxadustat arm (N=522) and 8.46 g/dL in the epoetin alfa arm (N=521).

Roxadustat-treated patients had a statistically significant reduction in hepcidin, a key regulator of iron metabolism, as compared to ESA-treated patients. Roxadustat was shown to increase hemoglobin regardless of baseline inflammation status.

Stable Dialysis CKD Patients Study (SIERRAS) – FibroGen

SIERRAS is a 741-patient U.S. Phase 3, randomized, open-label, active-controlled trial to assess the efficacy and safety of roxadustat compared to epoetin alfa for the treatment of anemia (in maintaining hemoglobin level) in dialysis CKD patients who were receiving stable doses of ESA prior to study participation. Treatment duration was up to 3.5 years, with a mean duration of 1.9 years. Mean baseline hemoglobin levels were 10.3 g/dL in both roxadustat and epoetin alfa arms.

Roxadustat-treated patients had a statistically significant reduction in hepcidin as compared to ESA-treated patients. Roxadustat was shown to increase hemoglobin regardless of baseline inflammation status. In addition, in the pre-specified secondary efficacy analysis, roxadustat-treated patients had a 33% reduction in the risk of blood transfusion compared to epoetin alfa (HR=0.67) in the time to first blood transfusion during treatment, p=0.0337.

Safety – ANDES, HIMALAYAS, and SIERRAS

The preliminary safety analyses of each of these three studies show an overall safety profile consistent with the results observed in prior roxadustat studies. The adverse events reported are consistent with those expected in these study populations with similar background diseases. Fully adjudicated MACE results from the pooled safety analyses both for non-dialysis and dialysis CKD populations for the U.S. and EU, are anticipated to be completed in the second quarter of 2019, and we intend to submit a U.S. NDA in the third quarter of 2019. We expect Astellas to submit an MAA to the EMA shortly thereafter. Both the U.S. NDA and European MAA for roxadustat are expected to cover anemia associated with dialysis dependent CKD and non-dialysis-dependent CKD.

Non-Dialysis CKD Patients (OLYMPUS) – AstraZeneca

OLYMPUS is AstraZeneca’s Phase 3, program has an aggregate target enrollmentrandomized, double-blinded, placebo-controlled trial designed to evaluate the efficacy and safety of approximately 7,000roxadustat vs. placebo for the treatment of patients with anemia in CKD stages 3, 4 or 5 whose disease progression is

moderate to 8,000severe and who are non-dialysis dependent. The trial met its primary efficacy endpoint by demonstrating a statistically-significant and clinically-meaningful improvement in mean change from baseline in hemoglobin levels averaged over Weeks 28 to 52 vs. placebo. The trial evaluated 2,781 patients worldwide andin 26 countries.

Non-Dialysis CKD Patients (ALPS) – Astellas

ALPS is the largestAstellas’ Phase 3, clinical program ever conductedrandomized, double-blind, placebo-controlled study of the efficacy and safety of roxadustat for the treatment of anemia in CKD patients not on dialysis. The trial met its primary endpoints by demonstrating superiority in efficacy vs. placebo in terms of both hemoglobin response rate in the first 24 weeks and hemoglobin change from baseline at Weeks 28 to 52. The preliminary safety analysis for this trial shows an anemia product candidate. Ouroverall event profile consistent with the results seen in previous roxadustat studies in CKD patients with anemia.

Stable Dialysis CKD Patients (ROCKIES) – AstraZeneca

ROCKIES is AstraZeneca’s Phase 3, programrandomized, open-label, active-controlled trial designed to assess the efficacy and safety of roxadustat vs. epoetin alfa, for the treatment of anemia in patients with CKD who are dialysis dependent. The trial met its primary efficacy endpoint by demonstrating a statistically-significant improvement in mean change from baseline in hemoglobin levels averaged over Weeks 28 to 52 vs. epoetin alfa. The trial evaluated 2,133 patients in 18 countries.

Stable Dialysis CKD Patients (PYRENEES) – Astellas

PYRENEES is alsoAstellas’ Phase 3, randomized, active-controlled trial designed to assess the efficacy and sizedsafety of roxadustat vs. epoetin alfa or darbepoetin alfa, for and will incorporate major adverse cardiac events (“MACE”), composite safety endpoints that wethe treatment of anemia in patients with CKD who are dialysis dependent. The trial, in 838 patients, met its primary efficacy endpoint.

Estimated Glomerular Filtration Rate Attenuation

We believe willthere could be required for approvalsignificant clinical benefit of roxadustat treatment in the U.S. for all new anemia therapies. Ournon-dialysis-dependent CKD patients if we are able to show the attenuation of renal disease progression. The estimated glomerular filtration rate (“eGFR”) is a measure of the filtration function of the kidney and renal disease progression. In the preliminary analysis of our pooled Phase 3 program will study multiple patient populations, includingnon-dialysis studies (ANDES, ALPS, and OLYMPUS) of patients withinwith eGFR 15 or higher (CKD stages 3 and 4), the first four months of initiating dialysis, or incident dialysis, and non-incident, or stable, dialysisone-year decline in eGFR in roxadustat treated patients and will include multiple NDD-CKD studies comparing roxadustat againstwas shown to be significantly less than that in placebo control.treated patients.

Background of Anemia in CKD

Anemia iscan be a serious medical condition in which patients have insufficient red blood cells and low levels of hemoglobin (“Hb”), a protein in red blood cells that carries oxygen to cells throughout the body.

Anemia in CKD is associated with increased risksrisk of hospitalization, cardiovascular complications, need for blood transfusion, exacerbation of other serious medical conditions and death. In addition, anemia frequently leads tocauses significant fatigue, cognitive dysfunction, and decreasedreduced quality of life. The more severe the anemia, as measured in lower Hb levels, the greater the health impact on patients. Severe anemia is common in patients with CKD, cancer, MDS, inflammatory diseases, and other serious illnesses. Even when it accompanies prevalent and serious diseases, anemia is often not effectively treated.

Anemia is particularly prevalent in patients with CKD. The prevalence of CKD which is a critical healthcare problem and is most commonly caused by diabetes and hypertension in the U.S.adult population is estimated at 10-12% globally, and Europe. CKD affects over 200 million people worldwide and anemia significantly increases healthcare costs for those patients. CKD is generally a progressive disease characterized by the gradual loss of kidney function that may eventually lead to kidney failure also knownor ESRD requiring dialysis or a kidney transplant to survive. Blood transfusion is used for treating life-threatening severe anemia. However, blood transfusions reduce the patient’s opportunity for a kidney transplant, increase risk of infections and the risk of complications such as end stage renal disease (“ESRD”). Patients with ESRD require renal replacement therapy — either dialysis treatment or kidney transplantation. CKD accompanied by anemia is associated with worse health outcomes than CKD alone, including more rapid progression of CKDheart failure and increased death rate. allergic reactions.

There are 5five stages of CKD whichthat are primarily defined by a measure of the filtration function of the kidney (GFR)Glomerular Filtration Rate (“GFR”).

Stages of CKD and Prevalence in the United StatesU.S.

Sources: The prevalence of stage 1 through stage 4 CKD was calculated based on 20132016 estimates by the United States Renal Data System (“USRDS”) presented in the 20152018 USRDS annual data report: Epidemiology of kidney disease in the United States (“20152018 USRDS ADR”), using data from the National Health and Nutrition Examination Survey (“NHANES”) 2007-20122013-2016 and 20132016 data from the U.S. Census Bureau. The prevalence of stage 5 CKD was calculated based on 20132016 data from the 20152018 USRDS ADR using data from the U.S. National ESRD database, NHANES 2007-20122013-2016 and 20132016 data from the U.S. Census Bureau.

The prevalence rate of anemia in patients with Hb<12 g/dL is set forth below.

Sources: The prevalence of anemia in stage 1 through stage 4 CKD and stage 5 NDD-CKD werewas derived from Stauffer and Fan, Prevalence of Anemia in Chronic Kidney Disease in the United States, PLoS ONE (2014). The prevalence of anemia in patients undergoing dialysis was derived from Goodkin et al,al., Naturally Occurring Higher Hemoglobin Concentration Does Not Increase Mortality among Hemodialysis Patients, J Am Soc Nephrol (2011).

In the U.S., according to the USRDS, a majority of dialysis eligibledialysis-eligible CKD patients are currently on dialysis. According to USRDS data as of 2013,Of the approximately 470,000509,000 patients were receiving dialysis in the U.S., of whom approximately 80% were78% are being treated with ESAs for anemia. Despite the presence of anemia in stages 3 and 4 CKD patients in clinical practice, patients typically do not receive ESA treatment for their anemia until they initiate dialysis. Approximately 16%As of 2016, approximately 13% of U.S. NDD-CKD patients were being treated with ESAs prior to initiation of dialysis as of 2013 (2015(2018 USRDS ADR). In many CKD patients, the disease progresses gradually over decades and therefore, patients can spend years suffering from the symptoms and negative health impactseffects of anemia before they receive treatment. Many of these patients die from cardiovascular events before they initiate dialysis.

According to IQVIA (formerly Quintiles and IMS Health) MIDAS™ reports, for the twelve months ending September 2018, global ESA sales in all anemia indications totaled $7.6 billion, including $3.5 billion in the U.S.

Roxadustat — A Novel, Orally Administered Treatment for Anemia

Roxadustat is an orally administered small molecule that corrects anemia by a mechanism of action that is different from that of ESAs. As a HIF-PH inhibitor, roxadustat activates a response that is naturally activated when the body responds to reduced oxygen levels in the blood, such as when a person adapts to high altitude. The response activated by roxadustat involves the regulation of multiple, complementary processes to promote erythropoiesis and increase the blood’s oxygen carrying capacity.

Coordinated erythropoiesis includes both the stimulation of red blood cell progenitors, by increasing the body’s production of erythropoietin (“EPO”), and an increase in iron availability for hemoglobin synthesis. Patients taking roxadustat typically have a transient increase in circulating endogenous EPO levels at peak concentration within or near the physiologic range naturally experienced by humans adapting to hypoxic conditions such as at high altitude, following blood donation or impaired lung function, such as pulmonary edema. By contrast, ESAs act only to stimulate red blood cell progenitors without a corresponding increase in iron availability, and are typically dosed at well above the natural physiologic range of EPO. The sudden demand for iron stimulated by ESA-induced erythropoiesis can lead to functional or absolute iron deficiency. We believe these high doses of ESAs are a main cause of the significant safety issues that have been attributed to this class of drugs. In contrast, the differentiated mechanism of action of roxadustat, which involves induction of the body’s own natural pathways to achieve a more complete erythropoiesis, has the potential to provide a safer and more effective treatment of anemia, including in the presence of inflammation, which normally limits iron availability.

LimitationsWe believe that roxadustat has the potential to offer safety, efficacy, reimbursement, and convenience advantages over ESAs.

Our clinical trials to date have shown that roxadustat can correct and maintain hemoglobin levels of the Current Standard of Care for Anemia inanemic CKD

Current therapies patients with lower circulating EPO levels than what has historically been reported with treatment by ESAs to treat anemia in CKD include injectable ESAs, intravenous iron (“IV iron”), oral iron and blood transfusions. ESAs have been used in the treatment of anemia in CKD for over 20 years and are administered intravenously or subcutaneously, typically in conjunction with IV iron. NDD-CKD patients who are not under the care of nephrologists, including those with diabetes and hypertension, do not typically receive ESAs and are often left untreated. ESAs currently on the market are all synthetic recombinant versions of human erythropoietin (“EPO”), a hormone that stimulates erythropoiesis and increases Hb levels by binding to receptors onminimize red blood cell precursorstransfusion risks, even in the bone marrow.

The introduction of the first ESA in 1989 was viewed as a major advance in the treatment of anemia in CKD because it significantly decreased the need for blood transfusions. Since then, ESAs have become one of the most commercially successful drug classes. However, because ESAs were never studied relative to placebo in large randomized clinical trials prior to approval, it was not until years later that their safety profile became better elucidated. Studies published in 2006 to 2009 demonstrated the safety risks of higher ESA doses used to target Hb levels of 13 to 15 g/dL, prompting physicians to balance serious safety concerns against the efficacy of ESAs. The safety concerns observed with injectable ESAs in these studies included an increased risk of cardiovascular adverse events and death as well as a potentially increased rate of tumor recurrence in patients with cancer.

The emergence of the safety issues resulted in several changes to ESA drug labeling. This combination of safety concerns and labeling changes, in addition to the subsequent reimbursement changes, described below, was followed by a decline in ESA sales revenues beginning in 2007. While we believe this decline in ESA sales is primarily due to complete suspension of the label for use of ESAs in anemias associated with cancer, and restrictions on use in chemotherapy induced anemia, we believe the decline in sales is also partly due to the progressive decline in ESA dose administered to CKD patients. Compared to the average ESA dose at the end of 2006, the mean monthly ESA dose in patients on hemodialysis dropped by 18%, 36%, 45% and 45% by the end of 2010, 2011, 2012 and 2013 respectively (2015 USRDS ADR).

Safety Issues of ESAs

Several large clinical trials were designed to demonstrate that targeting higher as opposed to lower Hb levels results in better outcomes. However, they instead generated data showing that targeting higher Hb levels with ESAs resulted in an increase in adverse events, including cardiovascular adverse events. These adverse events were initially observed in 1998 in the NHCT (Normal Hematocrit Cardiac Trial) in CKD patients on dialysis, where the high Hb level treatment arm targeted Hb levels of 13 to 15 g/dL. Additional safety concerns emerged following the CHOIR (Correction of Hemoglobin in Outcomes and Renal Insufficiency), CREATE (Cardiovascular Risk Reduction by Early Anemia Treatment with Epoetin Beta), and TREAT (Trial to Reduce Cardiovascular Events with Aranesp Therapy) studies in NDD-CKD patients, which were published between 2006 and 2009.

Secondary analyses of NHCT, CHOIR and TREAT, as well as subsequent observational studies in dialysis patients, suggest that these safety concerns, particularly the increased cardiovascular risk associated with ESAs, may result from the high ESA doses used to target higher Hb levels rather than the achieved Hb levels themselves. For example, a secondary analysis of CHOIR showed that patients who achieved the desired Hb level with the lowest amounts of ESA have the lowest risk of adverse cardiovascular outcomes as measured by composite endpoints consisting of hospitalization for heart failure, heart attack, stroke, and death. Patients who were treated with the highest ESA doses and, particularly those who achieved the lowest Hb levels, had the greatest risk for these events. In addition, observational studies in patients undergoing dialysis highlighted these risks with high ESA doses and also indicated that higher Hb levels achieved with lower ESA doses were associated with better outcomes.

For example, in an analysis of data from the USRDS of 94,569 hemodialysis patients, increased mortality was found in patients with increased epoetin alfa dose. Patients who achieved the highest hematocrit level (which is a measure of the percentage of volume of whole blood made up of red blood cells; under typical conditions, Hb level can be estimated as one-third the hematocrit level) and received the lowest ESA doses (lowest dose quartile, Q1) had the lowest mortality rate, and, at any particular ESA dose quartile, patients with higher hematocrit levels tended to have lower mortality levels, according to Zhang et al (Am J Kidney Dis 44:866-876) as illustrated in the chart below.

Unadjusted 1-Year Mortality Rates (per 1000)

by Hematocrit and ESA dosing quartile

Warnings about these risks have been incorporated into guidelines and position papers from major kidney societies and thought leaders. Kidney Disease: Improving Global Outcomes (“KDIGO”), a non-profit foundation established in 2003 and operated by the National Kidney Foundation, committed to improving global clinical guidelines for kidney patients, for example, states that, “[t]here may be toxicity from high doses of ESA, as suggested, though not proven, by recent post-hoc analyses of major ESA randomized controlled trials, especially in conjunction with the achievement of high Hb levels. Therefore, in general ESA dose escalation should be avoided.” In addition, the European Renal Best Practices Group specified in a recent position statement that caution should be used in ESA therapy in patients with specific risk factors.

Limited Effectiveness of ESAs in Certain Patient Populations

Hb responses to ESA doses are on a continuum with some patients responding with a satisfactory Hb increase to a small ESA dose and others responding very poorly to very high doses. In addition, patients’ responsiveness to ESAs can change over time and as a result of circumstances such as acute illness or surgery. In an attempt to reach target Hb level, ESA doses are increased in treatment-resistant patients (“hyporesponders”), which can result in up to a 40-fold difference in ESA doses between the most ESA-resistant and the most ESA-responsive DD-CKD patients. Even with high doses of ESAs and concomitant IV iron, some of these hyporesponders are unable to reach target Hb levels.

Hyporesponsiveness is a significant problem in incident dialysis patients, for whom ESA doses are typically high, and is associated with a combination of critically low kidney function and accompanying illnesses, such as infections and chronic inflammation. Incident dialysis patients are generally more anemic, and have a higher risk of death, than patients who have been on dialysis for many months.

A major cause of ESA hyporesponsiveness is an underlying chronic inflammatory state that exists in many CKD patients. Chronic inflammation has a suppressive effect on erythropoiesis in CKD via two main mechanisms. Firstly, pro-inflammatory cytokines such as tumor necrosis factor alpha (“TNF-alpha”), and interleukin-6 (“IL-6”), have been implicated in the suppression of erythropoiesis through inhibition of the response of erythroid progenitor cells to EPO. Secondly, pro-inflammatory cytokines such as IL-6 elevate the levels of hepcidin, the major hormone that regulates iron metabolism. The consequence of elevated hepcidin levels is a reduction in iron absorption from the gastrointestinal tract (“GI tract”), and the trapping of iron in cellular stores. Together this leads to inadequate availability of iron to keep pace with the demands of the bone marrow for erythropoiesis, despite adequate total body iron stores. This condition is referred to as functional iron deficiency.

In the presence of inflammation, even high doses of ESAs may be ineffective to achieve target Hb levels, and to the extent Hb levels are raised, the risks associated with the higher ESA doses required may outweigh thewithout routine IV iron supplementation, thereby offering potential safety and efficacy benefits of any increased Hb levels.over ESAs.

RequirementPotential for Reduced Hepcidin Levels and Anemia Correction Without Routine IV Iron Supplementation

An important differentiator of roxadustat from ESAs is that roxadustat also mobilizes iron from the body’s iron stores. It has been consistently shown to Supportcorrect anemia in CKD regardless of iron-repletion status, whereas iron repletion is required as a condition for treatment under ESA Activitylabels. Furthermore, roxadustat can correct and Associated Safety Risksmaintain hemoglobin without routine IV iron supplementation.

IV iron supplementation is routinely used to support anemia correction in a majority of hemodialysis patients treated with ESAs in the U.S. ESA labeling indicates that physicians should evaluate the iron status in all patients before and during CKD anemia treatment and maintain iron repletion. Many CKD patients have deficient iron stores, or absolute iron deficiency, and cannot absorb enough iron from diet or oral iron supplements to correct this deficiency. Physicians administer IV iron to ensure these patients are iron replete prior to initiating ESA treatment and continue to receive IV iron to mitigate iron depletion caused by ESA-mediated erythropoiesis.

Additionally, many CKD patients who have adequate iron stores suffer from functional iron deficiency. IV iron is administered in an attempt to address this shortage of available iron in these CKD patients, resulting in many patients having elevated body iron stores.

While IV iron can help correct anemia when used in combination with ESAs, published studies have suggested both acute and chronic risksrisk of both morbidity and mortality associated with the use of IV iron. The acute risks of IV iron supplementation include hypersensitivity reactions (which can be life-threatening and the warning of anaphylaxis risk appears in every IV iron product package insert in the U.S.), infection, as well as less severe but more common side-effects, such as skin problems, hypotension and GI tract symptoms. In addition to acute side-effects, there may also be chronic adverse effects on organ systems related to the cumulative deposits of iron resulting from the volume of iron administered.

Increased use of IV iron has been associated with increased risk of hospitalization and death. Using data from 12 countries obtained over

We believe that elevated levels of hepcidin, the past twelve years, Bailie et al. demonstratedmajor hormone that regulates iron metabolism, contributes to both absolute and functional iron deficiency. However, our clinical trials have not only consistently shown roxadustat’s ability to correct anemia without use of routine IV iron supplementation, but they have also shown a direct dose risk relationship betweenreduction in hepcidin levels with roxadustat treatment.

Minimizing IV iron use helps to avoid the amountsafety risks associated with IV, and, because the cost of oral iron is significantly less than the cost of IV iron, administered per monthtreatment with roxadustat could also potentially confer significant costs savings from not requiring routine IV iron supplementation.

Potential for Anemia Correction for Patient Populations Who are Hyporesponsive to ESAs

Incident dialysis patients and patients who have chronic inflammation are often hyporesponsive to ESAs, which necessitates the riskuse of hospitalization and death (Kidney International (2014)). The study identified that, even after controlling for other risk factors and adjusting for different practice patterns globally, dialysis patients receiving greater than 300 mg of IV iron per month had a greater risk of hospitalization or death than those receiving less than 300 mg. Mortality was 13% greater among those receiving between 300 and 400 mg of IV iron per month and 18% greater among those receiving greater than 400 mg of IV iron per month. Furthermore, hospitalization risk was 12% greater among those who received greater than 300 mg per month. The current paradigm of administrating greaterhigher doses of IV ironESAs to decrease ESA doses in light of this recently described associatedincrease hemoglobin levels, thus increasing both safety risk underscores the significant unmet need in theand treatment of anemia. However, new and purportedly safer and more effective iron supplementation therapies are being developed and introduced, and if such new therapies are accepted by patients and physicians as a superior alternative to traditional IV iron supplementation therapies, they may help maintain or increase the attractiveness of ESA therapy.

Elevated Blood Pressure

ESAs have long been associated with increased blood pressure, including new onset hypertension and exacerbation of pre-existing hypertension. As a result, ESA labeling carries a warning for the potential for increased blood pressure with ESA usage. Hypertensioncost. In contrast, roxadustat has been shown to acceleratebe similarly effective in patients with inflammation as those without inflammation without increasing dose. Roxadustat’s ability to overcome the suppressive effects of inflammation on erythropoiesis also may enable patients to safely achieve higher hemoglobin levels, which may reduce red blood cell transfusions (as reported in the U.S. Phase 3 study in dialysis patients (SIERRAS) earlier in this section). We believe roxadustat’s consistent treatment effect on CKD progressionanemia regardless of inflammation status may confer clinical safety and significantlyefficacy benefits.

While we have not finished analyzing our U.S. and Europe Phase 3 trial data, our China Phase 3 trials showed that roxadustat was able, in these smaller studies, to increase hemoglobin regardless of baseline inflammation status: both in dialysis-dependent CKD patients and non-dialysis-dependent CKD patients (as described in the risksection below captioned “Roxadustat for the Treatment of deathAnemia in Chronic Kidney Disease in China.”). Our Phase 2 clinical trials showed similar results.

Potential for Anemia Correction with Moderate EPO Levels

Randomized trials have suggested that high doses of ESAs administered in an attempt to achieve a target hemoglobin level may cause the safety issues associated with ESA therapy. These high ESA doses in the inflamed/hyporesponsive patients result in serum EPO levels much higher than physiological range. In contrast, the level of endogenous EPO elevation among patients treated with roxadustat is typically within or near the range observed when ascending to a higher elevation or giving blood. Treating anemia while maintaining lower circulating EPO levels may mitigate, or even avoid, the risks from exposure to supraphysiologic erythropoietin levels in ESA therapy, and may potentially enable a more effective and safe treatment of anemia in CKD patients due to the increased risk of heart attack or stroke.

Increased Thromboembolism and Vascular Access Thrombosis

ESA use has been associated with thromboembolic events, including stroke, vascular access thrombosis (where the dialysis access shunt is blocked due to blood-clotting), blood clots in the leg, which may in part be due to increases in circulating platelet levels. As a result, ESA labeling carries a warning for an increased risk of thromboembolic events.patients.

FDA Restrictions on ESA UsageThe following graph depicts:

In

¹ Milledge & Cotes (1985) J Appl Physiol 59:360;² Goldberg et al. (1993), Clin Biochem 26:183, Maeda et al. (1992), Int J Hematol 55:111; ³ Kato et al. (1994) Ren Fail 16:645; ⁴ The transient peak endogenous EPO concentrations (“Cmax”), data for roxadustat was derived from a subset of 243 patients who achieved a hemoglobin response to safety concerns elucidatedroxadustat in our Phase 2 studies for whom we believe doses depicted approximated therapeutic doses. Hemoglobin target ranges for these patients were above the hemoglobin levels specified in the large clinical studies described above, the U.S. Food and Drug Administration (“FDA”), steadily increased restrictions on the use of injectable ESAs from 2007 through 2011. During 2007, following the NHCT, CHOIR and CREATE studies and several oncology studies, the FDA mandated the inclusion of a boxed warning, or “Black Box” warning, in thecurrent ESA package insert for ESAs. A Black Box warning is the strongest warning that the FDA can requireCKD patients. Only doses in those patients whose hemoglobin responded in Phase 2 studies are reflected in the package insertfigure. The subset of prescription drugs. In June 2011,patients included 134 non-dialysis CKD patients treated to thrice-weekly, twice-weekly, or weekly doses of roxadustat for >16 weeks. The subset also included 109 dialysis CKD patients, including incident dialysis patients whose anemia was corrected with therapeutic doses and stable dialysis patients who received maintenance doses. Cmax of endogenous EPO levels were not measured in all patients; instead the FDA required further modification to the package insert for ESAs. The current boxed warning states that ESAs increase the risk of death, myocardial infarction, or heart attack, stroke, venous thromboembolism, thrombosis of vascular access and tumor progression or recurrence. In addition, the package insert changes include more conservative dosing guidelines for the use of injectable ESAs in anemic CKD patients. Specifically, the FDA removed the prior target Hb range of 10 to 12 g/dLEPO Cmax levels were estimated based on data derived from a more limited number of patients in whom EPO levels were measured at various roxadustat doses and recommendsamong whom there was substantial variation in measured EPO levels. Accordingly, individual patients who received roxadustat may have realized EPO Cmax levels significantly above or below these estimated levels. Moreover, the estimates reflected in the graph may not be reflective or predictive of actual EPO Cmax levels or ranges that physicians initiate treatmentwill be realized in larger populations of CKD patients when the Hb level is less than 10 g/dL and reduce or interruptreceiving roxadustat in our Phase 3 clinical trials. ⁵ EPO Cmax was computed from ESA dosing if the Hb level approaches or exceeds 10 g/dL for NDD-CKD patients and 11 g/dL for DD-CKD patients. In addition, physicians are advised to use only the lowest dose needed to avoid red blood cell transfusions.distributions based on Flaherty et al. (1990) Clin Pharmacol Ther 47:557.

Reimbursement Challenges Associated with ESAsPotential Cholesterol Benefits

In addition, in our Phase 2 and China Phase 3 clinical trials, we observed reductions in total cholesterol and an improvement in average high-density lipoprotein (“HDL”)/low-density lipoprotein (“LDL”) ratio. Since many CKD patients have high cholesterol levels, which contribute to cardiovascular-related morbidity and mortality, the safety concernsimprovement in the average HDL/LDL ratio observed with roxadustat treatment could confer a benefit to patients.

Potential Reimbursement and labeling changes for Convenience Advantages

Potentially Differentiated Reimbursement Framework

ESAs the reimbursement applicable to dialysis, including associated drugs such as ESAs, has also changed significantlyare included in recent years, which made ESAs less economically attractive for providers to administer. Prior to January 2011, the Centers for Medicare and Medicaid Services (“CMS”) reimbursed dialysis centers and other healthcare providers for use of ESAs at average selling price plus a premium to their cost, which enabled providers to realize a profit on the administration of ESAs, regardless of the quantity dosed. Under the Medicare Improvements for Patients and Providers Act (“MIPPA”), a basic case-mix adjusted composite, or bundled payment system commenced in January 2011the dialysis-dependent CKD setting and transitioned fully by January 2014 to a single reimbursement rate for drugs and all services furnished by renal dialysis centers for Medicare beneficiaries with end-stage renal disease. Specifically, under MIPPA the bundle now covers drugs, services, lab tests and supplies under a single treatment base rate for reimbursement by CMS based on the average cost per treatment, including the cost of ESAs and IV iron doses, typically without adjustment for usage.

ESAs administered to NDD-CKD patients have long been reimbursed under Medicare Part B in the non-dialysis-dependent CKD setting. Based on our roxadustat data to date, we believe roxadustat has the potential to correct anemia through a differentiated mechanism of action and that offers different therapeutic effects than ESA and the potential to displace multiple drugs in current use (such as ESAs and IV iron), and/or those in development (such as agents for suppression of hepcidin). Although the bundle currently covers ESAs or other IV products encompassed by the bundle, due to the differentiated innovative nature of roxadustat, it is unclear whether roxadustat will be included in or excluded from the bundle. We believe that there may be commercial benefits in either event, however are unable to predict the potential benefits until further guidance from the Centers for Medicare and Medicaid Services becomes available.

In the non-dialysis CKD setting, we expect that roxadustat, an oral treatment, should be subject to Medicare Part D, which requires providerswould allow physicians to purchaseprescribe roxadustat without the financial and store ESAs in advance of being reimbursed, and in many healthcare practices, the amount reimbursed does not cover the cost of ESA administration. For many of these providers, including in nephrology practices where purchasereimbursement risk associated with purchasing and storing is most common, due to label changes and related reduction in patients available for treatment, ESA administration in NDD-CKD has become economically unattractive. Furthermore, non-nephrologists generally have elected not to provideinjectable ESAs. Accordingly, ESA treatment has been limitedWe believe that this should encourage significantly greater usage outside of the dialysis centers.setting than injectable agents like ESA.

InconveniencePotential Reduction of ESAsOther Medications

In addition to potentially eliminating routine IV iron supplementation, based on our Phase 2 and China Phase 3 clinical trial results to date, we believe that roxadustat has the potential to reduce the use of other medications frequently required in some CKD anemia patients, such as anti-hypertensives and statins.

Oral Administration

Many physicians that treat CKD patients, particularly primary care and family practice physicians, cardiologists, endocrinologists, and internists, do not typically stock or administer ESAs. An easily accessible oral agent that is dispensed by pharmacies could significantly increase the number of physicians treating anemia in patients with CKD, and therefore, the number of patients receiving treatment.

In addition, the oral administration of roxadustat potentially offers a significant convenience advantage for CKD patients who have yet to initiate dialysis and are therefore not regularly visiting a dialysis center. Patients can more easily self-administer medicine in any setting, rather than being subject to the inconvenience and restrictions of regular visits to physicians’ offices or infusion centers to receive treatment with ESAs.

Potential Pharmacoeconomic Advantages

Based on our Phase 2 clinical trial results to date, we believe that roxadustat’s potential pharmacoeconomic advantages over ESA therapy may include safety labeling,(with a potential decrease in cardiovascular events and hospitalizations, with consequently lower associated treatment costs), lower administrative cost, reduction or elimination of IV iron and potentially other medications. If demonstrated in our Phase 3 studies, these pharmacoeconomic advantages may support reimbursement worldwide, including in Europe and China.

The Market Opportunity for Roxadustat

We believe that there is a significant opportunity for roxadustat to address markets currently served by injectable ESAs. According to IQVIA (formerly Quintiles and IMS Health) MIDAS™ reports, over the 12 months ending September 30, 2018, global ESA sales in all indications totaled $8.0 billion, driven primarily by $5.6 billion sold in the U.S. and Europe. We believe that a substantial portion of ESA sales are for CKD anemia. For example, Amgen reported in January 2019 that its ESA portfolio of EPOGEN^® (epoetin alfa) and Aranesp® (darbepoetin alfa) had total 2018 worldwide sales of $2.6 billion, of which $2.3 billion was in nephrology where CKD patients are treated. We further believe that the number of patients requiring anemia therapy will grow steadily as the global CKD population and access to dialysis care continue to expand, particularly in China and other emerging markets including the rest of Asia, Latin America, Eastern Europe, the Middle East, and the Commonwealth of Independent States. In established markets, such as the U.S., as obesity, hypertension, and diabetes prevalence continue rising, and the mortality of ESRD patients decline, the prevalence of ESRD is expected to grow further. Recent research published in Journal of American Society of Nephrology predicts the prevalence of ESRD in the U.S. to increase by 29% - 68% by 2030 from the level in 2015, to between 971,000 to 1,259,000 in 2030. The USRDS estimates the total U.S. prevalence of ESRD as of 2016 at 724,075, including 509,014 patients on dialysis and 215,061 transplant recipients.

Furthermore, we believe that there is a significant opportunity for roxadustat to address patient segments that are currently not effectively served by ESAs, such as anemia in the non-dialysis CKD patient population, which is substantially larger than the dialysis CKD patient population. Diabetes and hypertension are the leading causes of secondary CKD. Although we estimate approximately 36% of diabetic and 20% of hypertensive CKD patients are anemic (Hb<12 g/dL), we believe the majority of these patients are currently untreated for anemia since they are under the care of primary care, family practice physicians, and other non-nephrology specialists, such as endocrinologists, diabetologists, cardiologists, and internists, where ESA therapies are not readily available.

We believe that roxadustat may provide a safer option to address the CIA market, which was once comparable in size to the dialysis-dependent CKD anemia market. In addition, other types of anemias, including anemia related to inflammatory diseases, MDS, and surgical procedures requiring transfusions that are not addressed adequately with currently available therapies may be addressable opportunities.

To maximize the commercial potential for roxadustat, we incorporated several unique elements into our Phase 3 program. We have performed the first placebo-controlled Phase 3 studies in non-dialysis CKD patients to potentially demonstrate the benefits of anemia therapy and safety of roxadustat compared to placebo. We have also performed the largest Phase 3 study in incident dialysis anemia patients, who are at the highest risk for death, and are the most difficult patients to stabilize and treat for anemia in CKD. Based on data from our Phase 2 studies, we believe that roxadustat may offer a safer alternative to ESAs for this particularly vulnerable patient population. We are also evaluating the cardiovascular safety of roxadustat compared to placebo in non-dialysis CKD patients. Separately, we are evaluating cardiovascular safety of roxadustat compared to ESA in the dialysis population of CKD patients.

Phase 1 and Phase 2 Clinical Trials

We have an extensive roxadustat clinical pharmacology program which includes many completed Phase 1 studies. Our Phase 2 program includes eight roxadustat studies, four in CKD non-dialysis patients and four in CKD dialysis patients, which achieved the following objectives:

The following chart summarizes the design of our completed Phase 2 studies outside of Japan and China and the primary objectives of each study.

Completed Phase 2 Studies

*Study conducted by Astellas

QW = weekly; BIW = two times per week; TIW = three times per week

Safety Summary

In addition to the more than 1,100 subjects who have been exposed to roxadustat in Phase 1 and Phase 2 clinical studies, our Phase 3 program has studied roxadustat in over 11,000 patients globally. The preliminary Phase 3 safety analyses reported have shown an overall safety profile consistent with the results observed in prior roxadustat studies. The adverse events reported are consistent with those expected in these study populations with similar background diseases. The pooled safety analyses, including MACE for CKD in both non-dialysis and dialysis populations in the U.S. and EU Phase 3 programs, are anticipated to be completed in the second quarter of 2019.  

ROXADUSTAT FOR THE TREATMENT OF ANEMIA IN CHRONIC KIDNEY DISEASE IN CHINA

Roxadustat received NDA approval in December 2018 from the NMPA for the treatment of anemia caused by CKD in dialysis patients. Roxadustat is the first HIF-PH inhibitor to be approved, for any indication, anywhere in the world. We believe this is the first time that China became the first-in-world approval country for a first-in-class drug. We are planning to launch roxadustat in China in the third quarter of 2019.

We believe there is a particularly significant unmet medical need for the treatment of anemia in CKD in China. Specifically, anemia is undertreated in the rapidly growing population of dialysis patients. In the non-dialysis population, only a small percentage of patients receive anemia treatment, and those who do receive only a minimal level, including patients who are eligible for dialysis and are severely anemic. In the context of the rapidly growing Chinese pharmaceutical market, we believe that the demand for anemia therapy will continue to grow as a result of an expanding CKD population, as well as the central government’s mandate to make dialysis, which is still in the early stages of infrastructure development, more available through expansion of government reimbursement and build-out of dialysis facilities. The Chinese government has also put pharmaceutical innovation as a top priority for the country. As the standard of living improves in China, the demand for access to innovative drugs increases. In this context, we believe that roxadustat is a particularly promising product for this market.

FibroGen applied for market approval of roxadustat in China as a Domestic Class I innovative drug. This China-specific pathway is independent of any U.S., EU or Japan approval. We expect the population of non-dialysis CKD patients to be added to the roxadustat label in mid-2019 pending scheduling and completion of the standard Phase 3 clinical site inspections by the China Food and Drug Inspection (“CFDI”) under the NMPA.

As part of the approval, we have committed to a 2,000-patient post-approval safety study, which is a mandatory regulatory requirement of approved Domestic Class 1 innovative drugs.

Phase 3 Studies in China

In January 2017, we reported topline results from the two China Phase 3 studies of roxadustat in CKD anemia:

Study 4592-808: Eight-Week Placebo-Controlled Portion of 26-Week Correction in China Non-Dialysis CKD Patients

In the double-blind, placebo-controlled eight-week portion of the 26-week clinical trial of CKD patients not on dialysis in China, 151 anemia patients were randomized 2:1 to receive roxadustat (n=101) or placebo (n=50). Roxadustat met its primary efficacy limitations,endpoint of correcting anemia, by achieving a statistically significant increase in hemoglobin levels compared to placebo over eight weeks. Furthermore, the secondary endpoint of hemoglobin response was met as hemoglobin response was achieved by a higher proportion of patients in the roxadustat arm than in the placebo arm.

Roxadustat-treated patients achieved a mean hemoglobin increase of 1.9g/dL from baseline (8.9g/dL) over eight weeks of treatment vs. a mean change in hemoglobin of -0.4g/dL (from 8.9 g/dL baseline) in the placebo arm; the least square mean (“LS Mean”) difference of the two arms is significant, p<0.000000000000001.

A significantly higher proportion of roxadustat patients achieved hemoglobin response (an increase ≥1g/dL from baseline) after eight weeks vs. placebo patients, 84.2% compared to 0.0% (p<0.000000000000001). Sixty-seven percent of the roxadustat-treated patients vs 6% of placebo- patients achieved hemoglobin correction to be at or above the desired range of Hb≥10 g/dL within eight weeks, p=0.000000000000077.

There was a significant increase in hemoglobin level from baseline at every weekly measurement between Weeks two to eight per figure below.

FGCL-4592-808: Mean (+/- SE) Change from Baseline in Hemoglobin (Hb)

After Week eight, placebo patients were converted to roxadustat treatment and patients originally in the roxadustat arm continued treatment through Week 26. Anemia correction and hemoglobin maintenance were observed up to Week 27.

FGCL-4592-808: Mean Change in Hemoglobin over Time in Phase 3 China Non-Dialysis CKD Patients (26 Weeks) Including Placebo Crossover to Roxadustat

In the 26-week portion of this China Phase 3 non-dialysis study, 97.6 % of patients who received up to 26 weeks of roxadustat achieved anemia correction with Hb ≥10.0g/dL. For patients who crossed over from placebo to roxadustat, there was an increase in mean hemoglobin levels over 18 weeks of roxadustat treatment, with mean hemoglobin increasing from 8.6 g/dL (averaged over Weeks seven to nine) to 10.8 g/dL (averaged over Weeks 23 to 27); a statistically significant increase (p <0.0001). Hemoglobin levels declined after Week 27 when patients were no longer receiving roxadustat, as illustrated by the figure above.

In the 26-week portion of this non-dialysis study, roxadustat was shown to increase hemoglobin regardless of baseline inflammation status: both in patients with inflammation (CRP >4.9 mg/L) and in patients without inflammation (CRP ≤4.9 mg/L).

The durability of roxadustat’s effect on hemoglobin levels was further supported by data from the subset of patients (n=23) who participated in the 52-week safety extension of this non-dialysis China Phase 3 study. Approximately 95% of the non-dialysis patients who completed the 52-week safety extension period maintained Hb ≥10.0g/dL at the end of treatment.

In addition, in the eight-week portion of this non-dialysis study, roxadustat led to significant reduction in serum hepcidin levels (-56.1 ng/mL for roxadustat patients vs -15.1 ng/mL for placebo, p=0.00000005). Anemia treatment with roxadustat was effective without the use of IV iron and there was no iron parameter (ferritin or TSAT) requirement for patients at study entry.

Study 4592-806: 26-Week Maintenance in China Dialysis-Dependent CKD Patients

In the Phase 3 CKD study, 304 patients (271 hemodialysis and 33 peritoneal dialysis patients) previously on epoetin alfa were randomized to and treated with roxadustat (n=204) or epoetin alfa (n=100) for 26 weeks. Prior to randomization, patients in this study were previously treated with stable doses of EPO: 7% patients were treated with 利血宝® (“Li Xue Bao”) epoetin alfa, manufactured in Japan and marketed in China by Kyowa Hakko Kirin China Pharmaceutical Co., Ltd. (“Kirin EPO”) and 93% of patients were treated with one of eight other brands of EPO commercially available in China. All the patients randomized to the active comparator arm were treated with Kirin EPO.

The primary endpoint was mean change in hemoglobin from baseline to the average level during the final five weeks of the 26-week treatment period. Roxadustat met the predefined non-inferiority criterion for this primary endpoint in comparison to Kirin EPO in both full analysis set and per protocol set (“PPS”) analysis. In a pre-specified sequential analysis, roxadustat also showed statistical superiority over Kirin EPO for the primary endpoint, the mean hemoglobin increase observed in the roxadustat arm was higher than in the Kirin EPO arm, 0.75g/dL vs. 0.46g/dL, with a significant difference in the LS Mean hemoglobin change in the two treatment arms, p=0.037, in PPS analysis; baseline hemoglobin was 10.4 g/dL in both treatment arms.

Anemia in patients treated with roxadustat was corrected earlier than in Kirin EPO patients, and roxadustat maintained hemoglobin levels at a higher level (between 10-12 g/dL) than those receiving Kirin EPO despite the increase in average dose of Kirin EPO (relative to average baseline EPO dose) received by patients in the comparator arm (as shown in the inflammation figures below).

FGCL-4592-806: Mean (+/- SE) Change from Baseline in Hemoglobin (Hb)

We performed a subgroup analysis based on patients’ levels of inflammation, a common co-morbidity with CKD patients. Roxadustat raised and maintained hemoglobin levels in patients with inflammation (defined as having baseline CRP levels >ULN 4.9 µg/L) at doses that were equal to or lower than those received by the patients without inflammation. In contrast, patients with inflammation in the Kirin EPO arm realized lower hemoglobin levels than patients with normal CRP levels (despite receiving higher doses of EPO than patients without inflammation), reflecting roxadustat’s potential to overcome the hyporesponsiveness seen in ESA treatment, as discussed in the section above titled “Limitations of the Current Standard of Care for Anemia in CKD”. The two figures below show mean change in hemoglobin with mean patient dose, and mean hemoglobin levels with mean patient dose, in patients with and without inflammation.

FGCL-4592-806: Mean (+/- SE) Change in Hemoglobin (Hb) from Baseline and

Mean (+/- SE) Dose for Patients with and without Inflammation

FGCL-4592-806: Mean (+/- SE) Hemoglobin (Hb) and

Mean (+/- SE) Dose for Patients with and without Inflammation

One hundred and twelve roxadustat patients continued treatment in a safety extension study for a total of 52 weeks. Approximately 96% of the dialysis patients who completed the 52-week safety extension period maintained Hb ≥10.0 g/dL at the end of treatment.

Hepcidin, the key hormone that regulates iron metabolism, is generally elevated and contributory to EPO hyporesponsiveness in patients with inflammation. Consistent with previously reported Phase 2 CKD data from the U.S. and China, a reduction of serum hepcidin levels was observed in our two China Phase 3 studies of roxadustat in CKD. In the Phase 3 dialysis study, the mean decrease in serum hepcidin levels from baseline to the end of 26 weeks of treatment was 30.2 ng/mL in the roxadustat arm vs. 2.2 ng/mL in the EPO comparator arm. In the Phase 3 non-dialysis study, the mean decrease in hepcidin levels at the end of 8-week double-blind treatment period was 56.1 ng/mL in roxadustat arm vs. 15.1 ng/mL in the placebo arm (p=0.00000005).

Roxadustat was generally well tolerated and there were no safety signals observed in the China Phase 3 clinical trials, including through the 52-week safety extension periods. There were no study drug-related deaths. The AEs and SAEs reported in the Phase 3 studies were generally representative of the underlying patient population and associated co-morbidities. Treatment of anemia with roxadustat in these Phase 3 clinical trials did not lead to an increase in blood pressure.

China Phase 2 Studies

We performed two Phase 2 studies in China, one trial in non-dialysis CKD patients, and another trial in CKD patients on dialysis. In these trials, hemoglobin correction in non-dialysis CKD patients and hemoglobin maintenance in dialysis CKD patients replicated the results seen in the U.S. trials. SAEs were progression of CKD, infection and high potassium levels and the most common adverse events were infections, high potassium levels, nausea and dizziness. There were no dose-related trends or imbalances in the nature of adverse events between patients treated with roxadustat compared to patients treated with either placebo (study 047) or epoetin alfa control (study 048) groups.

Market Opportunity

Addressable Patient Populations in China

Based on a large-scale cross-sectional survey performed between September 2009 and September 2010 published in the Lancet (Zhang, et al. Lancet (2012)), there are an estimated 119.5 million CKD patients in China. Based on the prevalence ratios, there were approximately 19 million patients in CKD stages 3, 4, or 5, which we have grouped into three categories: dialysis CKD patients; dialysis-eligible patients who need dialysis under treatment guidelines but are not dialyzed (“Dialysis-Eligible NDD-CKD”); and stages 3 and 4 patients, as well as stage 5 patients who are not eligible for dialysis (“Other NDD-CKD”).

Dialysis-Dependent CKD

Based on the latest estimates and published data, we believe there are approximately 600,000 dialysis patients in China, making it the largest dialysis population in the world.

Dialysis treatment is delivered in the form of hemodialysis or peritoneal dialysis. In China, approximately 85% of dialysis patients with CKD are on hemodialysis. Hemodialysis is performed primarily in dialysis clinics within hospitals, most of which are publicly owned. This is in contrast to the U.S. where freestanding dialysis centers located outside of hospitals is common practice. With recent regulatory changes, the number of privately owned dialysis clinics is growing at a rapid pace, a trend that has provided additional capacity to meet the growing demand. The remaining 15% of CKD patients are on peritoneal dialysis, which is self-administered at home by patients. Peritoneal dialysis patients typically visit their nephrologists on a monthly basis at the hospital for monitoring and follow-up. The prevalence rate of anemia (defined as Hb< 12) in the dialysis population in China is estimated to be approximately 85%.

Dialysis-Eligible NDD-CKD

Dialysis-Eligible NDD-CKD refers to patients who need dialysis under Chinese treatment guidelines but are not dialyzed. The Chinese treatment guidelines recommend initiation of dialysis at eGFR <10 mL/min/1.73m² (eGFR <15 mL/min/1.73m² for diabetic nephropathy patients). The number of Dialysis-Eligible NDD-CKD patients in China has been consistently estimated at 1-2 million. While the size of the dialysis population in China has been growing rapidly, it nevertheless falls far short of the number who require dialysis treatment. We believe that this Dialysis-Eligible NDD-CKD population is characteristic of developing markets like China and at risk for severe anemia. The prevalence rate of anemia (defined as Hb <12) in this population in China is estimated to be approximately 90%.

Other NDD-CKD

Other NDD-CKD refers to the sub-groups of CKD patients within non-dialysis who are earlier stage: CKD patients in stage 3 and stage 4, as well as stage 5 who are not eligible for dialysis. As with the Dialysis-Eligible NDD-CKD population, the Other NDD-CKD population is largely untreated with ESAs. Some of these patients receive medical care in endocrinology, cardiology or internal medicine clinics outside of nephrology, where they are treated for their primary disease. The prevalence rate of anemia (defined as Hb <12 for women and <13 for men) in this population in China is estimated to be approximately 50% for Stage 3 and 80% for Stage 4.

Unmet Medical Need and Roxadustat Differentiation

Anemia is considered a risk multiplier for CKD patients and is commonly associated with increased rates of cardiovascular events, hospitalizations, CKD progression, and death. Several of the advantages that roxadustat, our oral therapeutic, potentially offers over ESAs mustare particularly suited to address the unmet medical need in each of the three categories of CKD patients in China.

We believe there is chronic under-treatment of anemia within the CKD patient population on dialysis in China. The most recent treatment guidelines published by the Chinese Society of Nephrology in 2018 recommended treatment to hemoglobin 11.0 g/dL to 12.0 g/dL. Even though over 70% of hemodialysis CKD patients, and approximately 60% of peritoneal dialysis CKD patients are treated with ESAs, based on the Chinese Renal Data System in 2015, less than 60% of dialysis patients reached 10.2 g/dL.

We believe many of the factors that lead to under-treatment of anemia can be administered intravenouslyovercome with rsoxadustat:

Current ESA Market Size and Drivers of Market Growth in China

China is the second largest pharmaceutical market after the United States. Total Healthcare expenditures in China have been estimated to be approximately $640 billion in 2015. Total ESA sales in China were approximately $330 million in 2017, of which an estimated 80%, or approximately $275 million, is derived from CKD anemia sales, based on data from IQVIA China Hospital Pharmaceutical Audit (“CHPA”). The ESA market in China has grown at a 12% compound annual growth rate between 2013 and 2017 based on data from IQVIA CHPA.

In addition to anemia being largely untreated in the non-dialysis CKD population, the CKD population in China is growing steadily.

Commercialization

AstraZeneca is our commercialization partner for roxadustat in China. Under our collaboration agreement, AstraZeneca will lead commercialization and has responsibility for marketing, market access, and sales. FibroGen has responsibility for medical affairs, manufacturing (as the Marketing Authorization Holder), and pharmacovigilance. FibroGen and AstraZeneca will work together to manage distribution.

Pricing

AstraZeneca and FibroGen have been working closely to determine pricing (both for self-pay and reimbursement) that reflects the value proposition of roxadustat, including the differentiation of roxadustat in efficacy and other clinical outcomes, lack of routine IV iron supplementation, convenience against current standard of care, cost effectiveness, and affordability.

Reimbursement

We believe reimbursement and hospital listing are the most critical market access factors for commercialization success in China.  

China is a single-payor market with near universal healthcare provided by the government. Over 95% of the population receives healthcare coverage under one government-funded medical reimbursement plan or another, each with different levels of reimbursement. Commercial health insurance is available but is minimally adopted, and is seen as a supplement above and beyond government reimbursement.  

Dialysis is reimbursed under Critical Disease Insurance (CDI), where up to 90% of costs are covered. Dialysis-Eligible NDD-CKD and Other NDD-CKD treatment is covered under outpatient care, where reimbursement is generally lower, at an estimated 50-60%.

To obtain government reimbursement for a therapeutic, the government must agree to add it to the NRDL or the provincial reimbursement drug lists at a negotiated price (at times at a significant discount). Prior to this time, the market is self-pay, where patients will be responsible for 100% of the launch price determined by the company. We believe the self-pay market in China is expanding, given the rise in personal income levels in the country. Nevertheless, as roxadustat could potentially address an unmet medical need for a much larger number of patients in China, securing reimbursement from the government is expected to be critical to widespread market adoption.

The government has committed to updating the NRDL in 2019. Previous updates to the NRDL occurred in 2017 and 2009. In addition, there were also NRDL price negotiations in 2018 for oncology drugs. Admission to the NRDL depends on a number of factors, including on-market experience, scale of patient adoption, physician endorsement, cost effectiveness and budget impact. Given that roxadustat was approved at the end of 2018, we may or may not qualify for the NRDL update in 2019. Provincial governments have some discretion to add roxadustat to provincial reimbursement drug lists. With or without being listed on the NRDL, we can apply for inclusion in the provincial reimbursement drug lists of selected provinces, which may take months, depending on the province.

Hospital Listing

Government hospitals currently represent over 90% of the pharmaceutical market in China. In order for roxadustat to be prescribed at a government hospital, it has to be carried in the hospital formulary. The process of entry into the formulary is commonly referred to as “hospital listing”, and typically requires a long lead time. These decisions are made on a hospital-by-hospital basis with timing that can range from every six months to every five years. Some hospitals also have temporary listing procedures that can accelerate timing.  Private hospital and non-hospital pharmacies, which represent a small minority of the drug market in China, do not require a formulary process to sell a drug. While the opportunity for roxadustat remains significant, given these market access challenges, the rate of market uptake for a drug is typically modest in China.

Tendering

Provincial and municipal government agencies will establish a provincial drug procurement agency to operate a mandatory collective tender process for purchases by government hospitals of a medicine included in provincial or local medicine procurement catalogs. The provincial or local medicine procurement catalogs are determined by the provincial drug procurement agency based on the National Essential Drugs List, the NDRL, hospital formularies, etc. If roxadustat has been included in a government hospital formulary, the NDRL or the provincial reimbursement drug list, the relevant hospitals must participate in collective tender processes for the purchase of roxadustat. During the collective tender process, the provincial drug procurement agency will establish a committee consisting of recognized pharmaceutical experts. The committee will assess the bids submitted by the various participating pharmaceutical manufacturers, taking into consideration, among other things, the quality and price of the drug product and the service and reputation of the manufacturer. Only drug products that have been selected in the collective tender processes may be purchased by participating hospitals. If we are unable to win purchase contracts through the collective tender processes in which we decide to participate, there will be limited demand for roxadustat, and sales revenues from roxadustat will be materially and adversely affected.

ROXADUSTAT FOR THE TREATMENT OF ANEMIA IN CHRONIC KIDNEY DISEASE IN JAPAN

Dialysis-Dependent CKD Patients in Japan

In September 2018, Astellas submitted an NDA in Japan for roxadustat for the treatment of anemia in CKD patients on dialysis based on positive results from four Phase 3 studies. We expect Astellas to receive a decision on the dialysis NDA in the second half of 2019. Topline results from these four Phase 3 studies are as follows:

Phase 3 Study 1517-CL-0307: Double-Blind Study in Hemodialysis

In 2018, Astellas and FibroGen reported results from Astellas’ Phase 3 study of roxadustat in 303 CKD hemodialysis patients with anemia. Average hemoglobin levels were effectively maintained at 10.99 g/dL during Weeks 18 to 24 in roxadustat-treated hemodialysis patients who had previously been treated with ESAs. The primary efficacy endpoint of change in average hemoglobin levels from baseline to Weeks 18 to 24 was -0.04 g/dL and -0.03 g/dL in the roxadustat-treated group and darbepoetin-treated group, respectively. The non-inferiority of roxadustat to darbepoetin alfa in change of average hemoglobin from baseline was confirmed as the lower bound of the 95% CI (-0.18, 0.15) of the treatment difference was greater than the pre-specified non-inferiority margin (-0.75 g/dL).

The hemoglobin maintenance rate (defined as the proportion of patients who achieved an average target hemoglobin level between 10.0 and 12.0 g/dL during Weeks 18 to 24) was 79% in roxadustat-treated patients and 83% in patients in the darbepoetin alfa arm. The hemoglobin maintenance rate of patients with at least one hemoglobin value during Weeks 18-24 was 95% in the roxadustat arm and 91% in the darbepetin alfa arm. Among patients taking roxadustat, serum iron, ferritin, and TSAT were clinically stable; and transferrin and TIBC increased through Week 4 and then remained stable. No remarkable changes in iron parameters occurred with darbepoetin alfa.

Roxadustat was well tolerated in this study, and the safety profile of roxadustat was consistent with that observed in previous studies both in dialysis and non-dialysis patients.

Phase 3 Study 1517-CL-0302: Open-Label Study in Peritoneal Dialysis Patients

In 2017, Astellas and FibroGen reported results from Astellas’ multi-center, open-label Phase 3 study of roxadustat in peritoneal dialysis CKD patients with anemia. This 24-week study enrolled a total of 56 peritoneal dialysis patients, of whom 43 patients had previously received ESAs (ESA-conversion patients), and 13 patients had not previously received ESAs (ESA-naïve patients). Roxadustat was well tolerated and shown to correct hemoglobin levels in ESA-naïve patients and maintain hemoglobin levels within the target range in both ESA-conversion patients and ESA-naïve patients.

The hemoglobin maintenance rate (defined as the proportion of patients who achieved an average target hemoglobin level between 10.0 and 12.0 g/dL during Weeks 18 to 24) was 92% in ESA-naïve patients and 74% in ESA-conversion patients. The hemoglobin maintenance rate of patients with at least one hemoglobin value during Weeks 18 to 24 was 92% in ESA-naïve patients and 87% in ESA-conversion patients. The mean of average hemoglobin levels reached during Weeks 18 to 24 was 11.05 g/dL in ESA-naïve patients and 10.93 g/dL in ESA-conversion patients. The mean change in hemoglobin from baseline to the average during Weeks 18 to 24 was 1.69 g/dL in ESA-naïve patients and 0.14 g/dL in ESA-conversion patients. The preliminary safety analysis for this trial is consistent with the safety profile of roxadustat in previous clinical trials.

Phase 3 Study 1517-CL-0308: Open-Label Study in ESA-Naïve Hemodialysis Patients

In 2018, Astellas completed its 24-week long multi-center, open-label, randomized, non-comparator Phase 3 study of roxadustat in 75 CKD ESA-naïve hemodialysis patients with anemia. The hemoglobin response rate at the end of treatment (defined as the proportion of patients who achieved a hemoglobin level ≥10.0 g/dL and a hemoglobin increase from baseline ≥ 1.0 g/dL) was 86.5% in patients randomized to a starting dose of 50 mg of roxadustat, and 89.2% in patients randomized to a starting dose of 70 mg of roxadustat.

Roxadustat was well tolerated in this study, and the results were consistent with the roxadustat safety profile observed to date.

Phase 3 Study 1517-CL-0312: Open-Label ESA-Conversion Study in Hemodialysis

In 2018, Astellas completed its 52-week, multi-center, open-label, non-comparator Phase 3 study of roxadustat in 164 CKD hemodialysis patients with anemia. This study was an ESA-conversion study. The hemoglobin maintenance rate (defined as the proportion of patients who achieved an average target hemoglobin level between 10.0 and 12.0 g/dL) was 79.1% during Weeks 18 to 24, and 71.2 % during Weeks 46 to 52.

Roxadustat was well tolerated in this study, and the results were consistent with the roxadustat safety profile observed to date.

Non-Dialysis-Dependent CKD Patients in Japan

Our partner Astellas has completed ASP-1517-314, one of the two non-dialysis CKD Phase 3 studies for Japan. The two studies are expected to serve as a basis for a supplemental NDA for the treatment of anemia in non-dialysis CKD patients.

Status with Regulatory Agencies

China

Roxadustat received NDA approval in December 2018 from the NMPA for the treatment of anemia caused by CKD in dialysis patients. In doing so, China became the first in-world approval country for a first-in-class (HIF-PH inhibitor) drug. We expect CKD non-dialysis patients to be added to the roxadustat label in mid-2019 pending scheduling and completion of the standard Phase 3 clinical site inspections by the CFDI.

Japan

In September 2018, Astellas submitted an NDA on roxadustat for the treatment of anemia in CKD patients on dialysis. Astellas plans to submit an NDA for anemia for CKD patients not on dialysis upon completion of both non-dialysis CKD Phase 3 studies in Japan.

U.S. and Europe

In conjunction with our collaboration partners, we have completed the Phase 3 trials of roxadustat intended to support marketing authorization applications in the U.S. and EU for the treatment of anemia in CKD. We and our partners are in the process of preparing an NDA for submission to the FDA and an MAA for submission to the EMA in 2019.

Investigational New Drug and Clinical Trial Applications

Roxadustat is being studied under one Investigational New Drug Application (“IND”), and several Clinical Trial Applications (“CTAs”), all with a specified indication of treatment of anemia in CKD. We originally submitted the IND in the U.S. to the FDA in April 2006. Our collaboration partner, Astellas, submitted the CTA in Japan with the PMDA in June 2009. We and our collaboration partners Astellas and AstraZeneca have also submitted CTAs in Europe, Latin America, Canada, Russia, and Asia, beginning in 2013.

For the treatment of anemia in MDS patients, we have submitted an IND to the FDA in the U.S. with CTAs in Asia, Europe, and CTA to the NMPA in China in 2017.

ROXADUSTAT FOR THE TREATMENT OF ANEMIA ASSOCIATED WITH MYELODYSPLASTIC SYNDROMES

Based on roxadustat’s mechanism of action and safety and efficacy profile to date, we believe it has the potential to treat anemia associated with many other conditions, including MDS.

Background of Anemia in MDS

MDS are a group of rare disorders characterized by poorly formed or dysfunctional blood cells in the bone marrow, leading to anemia in most cases. Anemia, a serious medical condition, is associated with increased risks of hospitalization, cardiovascular complications, need for blood transfusions, exacerbation of other serious medical conditions, and death, and frequently leads to significant fatigue, cognitive dysfunction, and decreased quality of life.

MDS is regarded as the most prevalent form of acquired bone marrow failure syndrome in adults. However, the incidence and prevalence of MDS are not yet well understood, and may be greatly underestimated, possibly due to under reporting and under diagnosis. MDS diagnosis became reportable under the World Health Organization oncology classification system only in 2001. The

National Cancer Institute estimates approximately 4.9/100,000 people in the U.S. were diagnosed with MDS annually from 2007 to 2011, an increase from 3.3/100,000 annually for 2001 to 2003. 

The incidence rate of MDS increases in older populations to 30.2/100,000 people among those 70 and 79 years of age, and further to 59.8/100,000 among those 80 years of age and older. The population-based registries are believed to have underestimated the incidence of MDS due to under diagnosis. It has been reported, using Medicare billing claims data, that the incidence of MDS in patients aged 65 years and older was approximately 162/100,000 as of 2003. The prevalence of MDS in the U.S. is estimated to be between 60,000 and 170,000, and continues to rise as more MDS therapies become available and patients are living longer with MDS.

In China, the incidence of MDS has been estimated to be 1.51/100,000 in the adult population. This lower rate (relative to other major markets such as the U.S., Western Europe, and Japan) may be due to under diagnosis.

Anemia is the most common clinical presentation in MDS, leading to red blood cell transfusions and related risks such as iron overload and significant impairment of the quality of life in affected patients. Dependency on red blood cell transfusions is associated with shorter life expectancy in patients with MDS.

Limitations of the Current Standard of Care for MDS and Anemia Associated with MDS

As a bone marrow disorder MDS patients often rely on repeated blood transfusions. Currently, there is no drug approved for the treatment of anemia in MDS patients in China or in the U.S., and transfusions are not readily accessible in China due to limited blood supply.

Stem cell transplantation is the only treatment that can cure MDS, but is available to only a small fraction of higher risk young MDS patients who are eligible for bone marrow transplant. For these patients, treatment is often administered at home,delayed until the disease progresses because of the known risks associated with transplantation and other non-CKD anemialow success rates. This treatment option is unavailable to the majority of MDS patients who are older or who are deemed low risk.

There are limited approved pharmacologic treatments for MDS. The FDA-approved treatments for MDS include the aza‑nucleosides (HMA) 5-azacitidine and decitabine which are typically used for treating intermediate or higher risk patients (based on the International Prognostic Scoring System). Further, these therapies are not already regularly visitingapproved for lower risk MDS patients because of their significant undesirable effects on bone marrow. These hypomethylating agents can achieve remission in a minority of the treated patients for a short duration of time before progression to acute myeloid leukemia, and are associated with significant levels of neutropenia and thrombocytopenia on top of those caused by the underlying disease. Revlimid^® (lenalidomide) is approved in the U.S. and in the EU only for treating MDS patients with 5q (del), a condition present in only 7% to 15% of MDS patients in whom a region of DNA has been deleted on one of the pair of chromosome 5 in the patient’s immature red blood cells. With a 61% to 67% responder rate in this sub-population, treatment with lenalidomide is associated with significant side effects such as neutropenia (55% to 75%) and thrombocytopenia (41% to 44%).

While there are no approved therapies for anemia of MDS in the U.S., treatment guidelines recommend the use of ESAs to address anemia in lower risk MDS patients that have a low EPO level. ESA doses used for MDS anemia are generally five times the doses typically used for treating anemia in CKD patients, and the response rates are as low as 20% to 32% in lower risk MDS patients. The low response rate and high ESA doses typical in MDS are primarily due to inflammation, which contributes to ESA-resistance and elevated hepcidin levels, functional iron deficiency, and the underlying progressive dysfunction of the bone marrow. Patients who initially respond to ESAs generally will develop resistance as their MDS progresses and become dependent on blood transfusions.

Red blood cell transfusion is generally reserved for severe anemia in MDS patients. In the U.S., red blood cell transfusions are usually used when Hb <9.0 g/dL or lower. However, in China, the hemoglobin threshold for red blood cell transfusion is as low as <6.0 g/dL in MDS patients due to limited blood supply. Frequent red blood cell transfusions impose both financial and time burdens on patients and payors since frequent visits to the hospital or dialysis center.for blood tests and transfusions are required. More importantly, transfusions are associated with risk of development of alloantibodies, which is related to the number of prior transfusions, and the transmission of infectious agents, a particular concern in MDS patients who may have neutropenia and compromised immune systems. Most notably, chronic red blood cell transfusions result in iron overload where iron can damage the heart, liver and other organs, as well as have a negative impact on clonal evolution and on hematopoietic stem cell therapy outcome. Iron overload from red blood cell transfusions is thought to be inhibitory on erythropoiesis and excess iron impacts hepcidin regulation causing a self-reinforcing feedback loop on erythropoiesis. For these reasons, patients with iron overload are treated with iron chelating agent in an attempt to reduce iron toxicity, but gastrointestinal and renal side effects lead to one‑year discontinuation rate of iron chelator as high as 49%. Given these risk factors, red blood cell transfusion dependency is a strong non-favorable prognostic factor for survival of MDS patients.

The disease burden of anemia in MDS is high. Severe anemia interferes with the quality of life of patients and their ability to work, in addition to damaging other organ systems due to insufficient oxygen delivery to tissues. When red blood cell transfusions become necessary to sustain bodily functions, the risk of transfusion-related complications can further threaten MDS patients’ lives and well-being.

Our SolutionPotentially Differentiated Reimbursement Framework

ESAs are included in the Medicare Improvements for Patients and Providers Act bundled payment system in the dialysis-dependent CKD setting and reimbursed under Medicare Part B in the non-dialysis-dependent CKD setting. Based on our roxadustat data to date, we believe roxadustat has the potential to correct anemia through a differentiated mechanism of action and that offers different therapeutic effects than ESA and the potential to displace multiple drugs in current use (such as ESAs and IV iron), and/or those in development (such as agents for suppression of hepcidin). Although the bundle currently covers ESAs or other IV products encompassed by the bundle, due to the differentiated innovative nature of roxadustat, it is unclear whether roxadustat will be included in or excluded from the bundle. We believe that there may be commercial benefits in either event, however are unable to predict the potential benefits until further guidance from the Centers for Medicare and Medicaid Services becomes available.

In the non-dialysis CKD setting, we expect that roxadustat, an oral treatment, should be subject to Medicare Part D, which would allow physicians to prescribe roxadustat without the financial and reimbursement risk associated with purchasing and storing injectable ESAs. We believe that this should encourage significantly greater usage outside of the dialysis setting than injectable agents like ESA.

Potential Reduction of Other Medications

In addition to potentially eliminating routine IV iron supplementation, based on our Phase 2 and China Phase 3 clinical trial results to date, we believe that roxadustat has the potential to reduce the use of other medications frequently required in some CKD anemia patients, such as anti-hypertensives and statins.

Oral Administration

Many physicians that treat CKD patients, particularly primary care and family practice physicians, cardiologists, endocrinologists, and internists, do not typically stock or administer ESAs. An easily accessible oral agent that is dispensed by pharmacies could significantly increase the number of physicians treating anemia in patients with CKD, and therefore, the number of patients receiving treatment.

In addition, the oral administration of roxadustat potentially offers a significant convenience advantage for CKD patients who have yet to initiate dialysis and are therefore not regularly visiting a dialysis center. Patients can more easily self-administer medicine in any setting, rather than being subject to the inconvenience and restrictions of regular visits to physicians’ offices or infusion centers to receive treatment with ESAs.

Potential Pharmacoeconomic Advantages

Based on our Phase 2 clinical trial results to date, we believe that roxadustat’s potential pharmacoeconomic advantages over ESA therapy may include safety (with a potential decrease in cardiovascular events and hospitalizations, with consequently lower associated treatment costs), lower administrative cost, reduction or elimination of IV iron and potentially other medications. If demonstrated in our Phase 3 studies, these pharmacoeconomic advantages may support reimbursement worldwide, including in Europe and China.

The Market Opportunity for Roxadustat

We believe that there is a significant opportunity for roxadustat to address markets currently served by injectable ESAs. According to IQVIA (formerly Quintiles and IMS Health) MIDAS™ reports, over the 12 months ending September 30, 2018, global ESA sales in all indications totaled $8.0 billion, driven primarily by $5.6 billion sold in the U.S. and Europe. We believe that a substantial portion of ESA sales are for CKD anemia. For example, Amgen reported in January 2019 that its ESA portfolio of EPOGEN^® (epoetin alfa) and Aranesp® (darbepoetin alfa) had total 2018 worldwide sales of $2.6 billion, of which $2.3 billion was in nephrology where CKD patients are treated. We further believe that the number of patients requiring anemia therapy will grow steadily as the global CKD population and access to dialysis care continue to expand, particularly in China and other emerging markets including the rest of Asia, Latin America, Eastern Europe, the Middle East, and the Commonwealth of Independent States. In established markets, such as the U.S., as obesity, hypertension, and diabetes prevalence continue rising, and the mortality of ESRD patients decline, the prevalence of ESRD is expected to grow further. Recent research published in Journal of American Society of Nephrology predicts the prevalence of ESRD in the U.S. to increase by 29% - 68% by 2030 from the level in 2015, to between 971,000 to 1,259,000 in 2030. The USRDS estimates the total U.S. prevalence of ESRD as of 2016 at 724,075, including 509,014 patients on dialysis and 215,061 transplant recipients.

Furthermore, we believe that there is a significant opportunity for roxadustat to address patient segments that are currently not effectively served by ESAs, such as anemia in the non-dialysis CKD patient population, which is substantially larger than the dialysis CKD patient population. Diabetes and hypertension are the leading causes of secondary CKD. Although we estimate approximately 36% of diabetic and 20% of hypertensive CKD patients are anemic (Hb<12 g/dL), we believe the majority of these patients are currently untreated for anemia since they are under the care of primary care, family practice physicians, and other non-nephrology specialists, such as endocrinologists, diabetologists, cardiologists, and internists, where ESA therapies are not readily available.

We believe that roxadustat may provide a safer option to address the CIA market, which was once comparable in size to the dialysis-dependent CKD anemia market. In addition, other types of anemias, including anemia related to inflammatory diseases, MDS, and surgical procedures requiring transfusions that are not addressed adequately with currently available therapies may be addressable opportunities.

To maximize the commercial potential for roxadustat, we incorporated several unique elements into our Phase 3 program. We have performed the first placebo-controlled Phase 3 studies in non-dialysis CKD patients to potentially demonstrate the benefits of anemia therapy and safety of roxadustat compared to placebo. We have also performed the largest Phase 3 study in incident dialysis anemia patients, who are at the highest risk for death, and are the most difficult patients to stabilize and treat for anemia in CKD. Based on data from our Phase 2 studies, we believe that roxadustat may offer a safer alternative to ESAs for this particularly vulnerable patient population. We are also evaluating the cardiovascular safety of roxadustat compared to placebo in non-dialysis CKD patients. Separately, we are evaluating cardiovascular safety of roxadustat compared to ESA in the dialysis population of CKD patients.

Phase 1 and Phase 2 Clinical Trials

We have an extensive roxadustat clinical pharmacology program which includes many completed Phase 1 studies. Our Phase 2 program includes eight roxadustat studies, four in CKD non-dialysis patients and four in CKD dialysis patients, which achieved the following objectives:

The following chart summarizes the design of our completed Phase 2 studies outside of Japan and China and the primary objectives of each study.

Completed Phase 2 Studies

*Study conducted by Astellas

QW = weekly; BIW = two times per week; TIW = three times per week

Safety Summary

In addition to the more effective, more convenientthan 1,100 subjects who have been exposed to roxadustat in Phase 1 and more accessible alternativePhase 2 clinical studies, our Phase 3 program has studied roxadustat in over 11,000 patients globally. The preliminary Phase 3 safety analyses reported have shown an overall safety profile consistent with the results observed in prior roxadustat studies. The adverse events reported are consistent with those expected in these study populations with similar background diseases. The pooled safety analyses, including MACE for CKD in both non-dialysis and dialysis populations in the U.S. and EU Phase 3 programs, are anticipated to injectable ESAsbe completed in the second quarter of 2019.  

ROXADUSTAT FOR THE TREATMENT OF ANEMIA IN CHRONIC KIDNEY DISEASE IN CHINA

Roxadustat received NDA approval in December 2018 from the NMPA for the treatment of anemia caused by CKD in dialysis patients. Roxadustat is the first HIF-PH inhibitor to be approved, for any indication, anywhere in the world. We believe this is the first time that China became the first-in-world approval country for a first-in-class drug. We are planning to launch roxadustat in China in the third quarter of 2019.

We believe there is a particularly significant unmet medical need for the treatment of anemia in CKD in China. Specifically, anemia is undertreated in the rapidly growing population of dialysis patients. In addition,the non-dialysis population, only a small percentage of patients receive anemia treatment, and those who do receive only a minimal level, including patients who are eligible for dialysis and are severely anemic. In the context of the rapidly growing Chinese pharmaceutical market, we believe therethat the demand for anemia therapy will continue to grow as a result of an expanding CKD population, as well as the central government’s mandate to make dialysis, which is still in the early stages of infrastructure development, more available through expansion of government reimbursement and build-out of dialysis facilities. The Chinese government has also put pharmaceutical innovation as a top priority for the country. As the standard of living improves in China, the demand for access to innovative drugs increases. In this context, we believe that roxadustat is a significant opportunityparticularly promising product for treatmentthis market.

FibroGen applied for market approval of anemiaroxadustat in markets not effectively addressedChina as a Domestic Class I innovative drug. This China-specific pathway is independent of any U.S., EU or Japan approval. We expect the population of non-dialysis CKD patients to be added to the roxadustat label in mid-2019 pending scheduling and completion of the standard Phase 3 clinical site inspections by ESAs, such as in the NDD-CKD population, DD-CKD inChina Food and Drug Inspection (“CFDI”) under the presenceNMPA.

As part of inflammation, and non-CKD anemia markets.the approval, we have committed to a 2,000-patient post-approval safety study, which is a mandatory regulatory requirement of approved Domestic Class 1 innovative drugs.

Roxadustat — A Novel, Orally Administered Treatment for AnemiaPhase 3 Studies in China

In January 2017, we reported topline results from the two China Phase 3 studies of roxadustat in CKD anemia:

Study 4592-808: Eight-Week Placebo-Controlled Portion of 26-Week Correction in China Non-Dialysis CKD Patients

In the double-blind, placebo-controlled eight-week portion of the 26-week clinical trial of CKD patients not on dialysis in China, 151 anemia patients were randomized 2:1 to receive roxadustat (n=101) or placebo (n=50). Roxadustat is an orally administered small molecule that correctsmet its primary efficacy endpoint of correcting anemia, by achieving a different mechanismstatistically significant increase in hemoglobin levels compared to placebo over eight weeks. Furthermore, the secondary endpoint of action from thathemoglobin response was met as hemoglobin response was achieved by a higher proportion of ESAs. As a HIF-PH inhibitor, roxadustat activates a response that is naturally activated when the body responds to reduced oxygen levelspatients in the blood, such as whenroxadustat arm than in the placebo arm.

Roxadustat-treated patients achieved a person adaptsmean hemoglobin increase of 1.9g/dL from baseline (8.9g/dL) over eight weeks of treatment vs. a mean change in hemoglobin of -0.4g/dL (from 8.9 g/dL baseline) in the placebo arm; the least square mean (“LS Mean”) difference of the two arms is significant, p<0.000000000000001.

A significantly higher proportion of roxadustat patients achieved hemoglobin response (an increase ≥1g/dL from baseline) after eight weeks vs. placebo patients, 84.2% compared to high altitude. The response activated by0.0% (p<0.000000000000001). Sixty-seven percent of the roxadustat-treated patients vs 6% of placebo- patients achieved hemoglobin correction to be at or above the desired range of Hb≥10 g/dL within eight weeks, p=0.000000000000077.

There was a significant increase in hemoglobin level from baseline at every weekly measurement between Weeks two to eight per figure below.

FGCL-4592-808: Mean (+/- SE) Change from Baseline in Hemoglobin (Hb)

After Week eight, placebo patients were converted to roxadustat involvestreatment and patients originally in the regulationroxadustat arm continued treatment through Week 26. Anemia correction and hemoglobin maintenance were observed up to Week 27.

FGCL-4592-808: Mean Change in Hemoglobin over Time in Phase 3 China Non-Dialysis CKD Patients (26 Weeks) Including Placebo Crossover to Roxadustat

In the 26-week portion of multiple, complementary processesthis China Phase 3 non-dialysis study, 97.6 % of patients who received up to promote erythropoiesis and increase the blood’s oxygen carrying capacity.

This coordinated erythropoietic response includes both the stimulation26 weeks of red blood cell progenitors, by increasing the body’s production of EPO, androxadustat achieved anemia correction with Hb ≥10.0g/dL. For patients who crossed over from placebo to roxadustat, there was an increase in mean hemoglobin levels over 18 weeks of roxadustat treatment, with mean hemoglobin increasing from 8.6 g/dL (averaged over Weeks seven to nine) to 10.8 g/dL (averaged over Weeks 23 to 27); a statistically significant increase (p <0.0001). Hemoglobin levels declined after Week 27 when patients were no longer receiving roxadustat, as illustrated by the figure above.

In the 26-week portion of this non-dialysis study, roxadustat was shown to increase hemoglobin regardless of baseline inflammation status: both in patients with inflammation (CRP >4.9 mg/L) and in patients without inflammation (CRP ≤4.9 mg/L).

The durability of roxadustat’s effect on hemoglobin levels was further supported by data from the subset of patients (n=23) who participated in the 52-week safety extension of this non-dialysis China Phase 3 study. Approximately 95% of the non-dialysis patients who completed the 52-week safety extension period maintained Hb ≥10.0g/dL at the end of treatment.

In addition, in the eight-week portion of this non-dialysis study, roxadustat led to significant reduction in serum hepcidin levels (-56.1 ng/mL for roxadustat patients vs -15.1 ng/mL for placebo, p=0.00000005). Anemia treatment with roxadustat was effective without the use of IV iron availabilityand there was no iron parameter (ferritin or TSAT) requirement for Hb synthesis.patients at study entry.

Study 4592-806: 26-Week Maintenance in China Dialysis-Dependent CKD Patients taking

In the Phase 3 CKD study, 304 patients (271 hemodialysis and 33 peritoneal dialysis patients) previously on epoetin alfa were randomized to and treated with roxadustat typically have circulating endogenous EPO levels at peak concentration within(n=204) or near the physiologic range naturally experienced by people adaptingepoetin alfa (n=100) for 26 weeks. Prior to hypoxic conditions such as at high altitude, following blood donation or impaired lung function, such as pulmonary edema. By contrast, ESAs act only to stimulate red blood cell progenitors without a corresponding increaserandomization, patients in iron availability, and are typically dosed at well above the natural physiologic range of EPO. The sudden demand for iron stimulated by ESA-induced erythropoiesis can lead to functional or absolute iron deficiency. We believe these highthis study were previously treated with stable doses of ESAs are a main causeEPO: 7% patients were treated with 利血宝® (“Li Xue Bao”) epoetin alfa, manufactured in Japan and marketed in China by Kyowa Hakko Kirin China Pharmaceutical Co., Ltd. (“Kirin EPO”) and 93% of patients were treated with one of eight other brands of EPO commercially available in China. All the patients randomized to the active comparator arm were treated with Kirin EPO.

The primary endpoint was mean change in hemoglobin from baseline to the average level during the final five weeks of the significant safety issues that have been attributed26-week treatment period. Roxadustat met the predefined non-inferiority criterion for this primary endpoint in comparison to this class of drugs.Kirin EPO in both full analysis set and per protocol set (“PPS”) analysis. In contrast,a pre-specified sequential analysis, roxadustat also showed statistical superiority over Kirin EPO for the differentiated mechanism of action of roxadustat, which involves induction ofprimary endpoint, the body’s own natural pathways to achieve a more complete erythropoiesis, has the potential to provide a safer and more effective treatment of anemia, includingmean hemoglobin increase observed in the presence of inflammation, which normally limits iron availability.roxadustat arm was higher than in the Kirin EPO arm, 0.75g/dL vs. 0.46g/dL, with a significant difference in the LS Mean hemoglobin change in the two treatment arms, p=0.037, in PPS analysis; baseline hemoglobin was 10.4 g/dL in both treatment arms.

Our HIF-PH inhibitor technology relies onAnemia in patients treated with roxadustat was corrected earlier than in Kirin EPO patients, and roxadustat maintained hemoglobin levels at a higher level (between 10-12 g/dL) than those receiving Kirin EPO despite the natural mechanismincrease in average dose of Kirin EPO (relative to average baseline EPO dose) received by which the body responds to low oxygen levels. HIF is a transcription factor comprised of a HIF-alpha and a HIF-beta subunit, both of which are required to stimulate erythropoiesis. Under normal oxygen conditions, the HIF-alpha subunit is targeted for rapid degradation through the activity of a family of HIF-PH enzymes. However, under low oxygen conditions, the HIF-PH enzymes cannot function and HIF-alpha accumulates. HIF-alpha then combines with HIF-beta, and the newly formed HIF complex initiates transcription of a number of genes involvedpatients in the erythropoietic process, which ultimately leadscomparator arm (as shown in the inflammation figures below).

FGCL-4592-806: Mean (+/- SE) Change from Baseline in Hemoglobin (Hb)

We performed a subgroup analysis based on patients’ levels of inflammation, a common co-morbidity with CKD patients. Roxadustat raised and maintained hemoglobin levels in patients with inflammation (defined as having baseline CRP levels >ULN 4.9 µg/L) at doses that were equal to increased oxygen deliveryor lower than those received by the patients without inflammation. In contrast, patients with inflammation in the Kirin EPO arm realized lower hemoglobin levels than patients with normal CRP levels (despite receiving higher doses of EPO than patients without inflammation), reflecting roxadustat’s potential to tissues. Roxadustat works by reversibly inhibitingovercome the HIF-PH enzymes, thus mimicking this coordinated natural erythropoietic response through genes transcribinghyporesponsiveness seen in ESA treatment, as discussed in the proteins shownsection above titled “Limitations of the Current Standard of Care for Anemia in CKD”. The two figures below involvedshow mean change in iron absorption, mobilizationhemoglobin with mean patient dose, and transport as well as stimulation of red blood cell progenitors.mean hemoglobin levels with mean patient dose, in patients with and without inflammation.

FGCL-4592-806: Mean (+/- SE) Change in Hemoglobin (Hb) from Baseline and

Mean (+/- SE) Dose for Patients with and without Inflammation

FGCL-4592-806: Mean (+/- SE) Hemoglobin (Hb) and

Our discoveryMean (+/- SE) Dose for Patients with and developmentwithout Inflammation

One hundred and twelve roxadustat patients continued treatment in a safety extension study for a total of roxadustat resulted from years of experience working with prolyl hydroxylase enzymes, such as those that regulate HIF, and a deep understanding52 weeks. Approximately 96% of the complexitiesdialysis patients who completed the 52-week safety extension period maintained Hb ≥10.0 g/dL at the end of HIF biology. We have explored therapeutic activation of HIF to treat anemia from an integrated perspective with a focus on applying our HIF-PH inhibitor technology to produce coordinated effects on erythropoiesis and iron homeostasis and metabolism. As part of these progressive efforts, we have explored the ability of our HIF-PH inhibitor technology to increase sensitivity to endogenous EPO by increasing EPO receptor expression on red blood cell progenitors. We have investigated multiple effects of HIF-PH inhibitors on iron metabolism, including their ability to regulate genes that can increase iron bioavailability. We have also shown that administration of HIF-PH inhibitors can decrease expression of hepcidin,treatment.

Hepcidin, the key hormone that regulates iron metabolism. Hepcidinmetabolism, is generally elevated under conditionsand contributory to EPO hyporesponsiveness in patients with inflammation. Consistent with previously reported Phase 2 CKD data from the U.S. and China, a reduction of chronic inflammation, leading to reduced iron availability for erythropoiesis. Based onserum hepcidin levels was observed in our gene expression and hepcidin data, we believe HIF-PH inhibitors can increase intestinal iron absorption and enhance the mobilization and uptake of iron. In addition, we have shown that HIF-PH inhibitors can improve transferrin saturation (a measure of circulating iron available for erythropoiesis) and can correct anemia associated with chronic inflammation by overcoming the hepcidin-mediated sequestration of iron that cannot be overcome by ESA therapy.

We selected roxadustat from our extensive library of compounds from various chemical classes of HIF-PH inhibitors, including heterocyclic carboxamides and 2-oxoglutarate mimetics. Roxadustat was selected based on our belief that stabilizing the two main forms of HIF in the cell, HIF-1 and HIF-2, leads to a more complete erythropoietic response.

Although HIF-PH inhibitor programs have been subsequently initiated at several other companies, we expect to remain the leader in the development of HIF-PH inhibitors for anemia, with more patients dosed and more studies conducted with roxadustat than with any other HIF-PH inhibitor.

Potential Advantages of Roxadustat for Treatment of Anemia in CKD

We believe that roxadustat has the potential to offer several safety, efficacy, reimbursement, and convenience advantages over ESAs.

Potential Safety and Efficacy Advantages

Our clinical trials to date have shown that roxadustat can treat anemia in CKD with much lower circulating EPO levels than with treatment by ESAs, mitigate the need for IV iron and treat anemia in the presence of inflammation, thereby offering potential safety and efficacy benefits over ESAs. We have incorporated several endpoints into ourChina Phase 3 studies of roxadustat in CKD. In the Phase 3 dialysis study, the mean decrease in serum hepcidin levels from baseline to further elucidatethe end of 26 weeks of treatment was 30.2 ng/mL in the roxadustat arm vs. 2.2 ng/mL in the EPO comparator arm. In the Phase 3 non-dialysis study, the mean decrease in hepcidin levels at the end of 8-week double-blind treatment period was 56.1 ng/mL in roxadustat arm vs. 15.1 ng/mL in the placebo arm (p=0.00000005).

Roxadustat was generally well tolerated and demonstratethere were no safety signals observed in the China Phase 3 clinical trials, including through the 52-week safety extension periods. There were no study drug-related deaths. The AEs and SAEs reported in the Phase 3 studies were generally representative of the underlying patient population and associated co-morbidities. Treatment of anemia with roxadustat in these Phase 3 clinical trials did not lead to an increase in blood pressure.

China Phase 2 Studies

We performed two Phase 2 studies in China, one trial in non-dialysis CKD patients, and other potential clinical benefitsanother trial in CKD patients on dialysis. In these trials, hemoglobin correction in non-dialysis CKD patients and hemoglobin maintenance in dialysis CKD patients replicated the results seen in the U.S. trials. SAEs were progression of roxadustat.CKD, infection and high potassium levels and the most common adverse events were infections, high potassium levels, nausea and dizziness. There were no dose-related trends or imbalances in the nature of adverse events between patients treated with roxadustat compared to patients treated with either placebo (study 047) or epoetin alfa control (study 048) groups.

Potential Cardiovascular BenefitsMarket Opportunity

Addressable Patient Populations in China

Based on a large-scale cross-sectional survey performed between September 2009 and September 2010 published in the Lancet (Zhang, et al. Lancet (2012)), there are an estimated 119.5 million CKD patients in China. Based on the prevalence ratios, there were approximately 19 million patients in CKD stages 3, 4, or 5, which we have grouped into three categories: dialysis CKD patients; dialysis-eligible patients who need dialysis under treatment guidelines but are not dialyzed (“Dialysis-Eligible NDD-CKD”); and stages 3 and 4 patients, as well as stage 5 patients who are not eligible for dialysis (“Other NDD-CKD”).

Dialysis-Dependent CKD

Based on the latest estimates and published data, we believe there are approximately 600,000 dialysis patients in China, making it the largest dialysis population in the world.

Dialysis treatment is delivered in the form of hemodialysis or peritoneal dialysis. In China, approximately 85% of dialysis patients with CKD are on hemodialysis. Hemodialysis is performed primarily in dialysis clinics within hospitals, most of which are publicly owned. This is in contrast to the U.S. where freestanding dialysis centers located outside of hospitals is common practice. With recent regulatory changes, the number of privately owned dialysis clinics is growing at a rapid pace, a trend that has provided additional capacity to meet the growing demand. The remaining 15% of CKD patients are on peritoneal dialysis, which is self-administered at home by patients. Peritoneal dialysis patients typically visit their nephrologists on a monthly basis at the hospital for monitoring and follow-up. The prevalence rate of anemia (defined as Hb< 12) in the dialysis population in China is estimated to be approximately 85%.

Dialysis-Eligible NDD-CKD

Dialysis-Eligible NDD-CKD refers to patients who need dialysis under Chinese treatment guidelines but are not dialyzed. The Chinese treatment guidelines recommend initiation of dialysis at eGFR <10 mL/min/1.73m² (eGFR <15 mL/min/1.73m² for diabetic nephropathy patients). The number of Dialysis-Eligible NDD-CKD patients in China has been consistently estimated at 1-2 million. While the size of the dialysis population in China has been growing rapidly, it nevertheless falls far short of the number who require dialysis treatment. We believe that this Dialysis-Eligible NDD-CKD population is characteristic of developing markets like China and at risk for severe anemia. The prevalence rate of anemia (defined as Hb <12) in this population in China is estimated to be approximately 90%.

Other NDD-CKD

Other NDD-CKD refers to the sub-groups of CKD patients within non-dialysis who are earlier stage: CKD patients in stage 3 and stage 4, as well as stage 5 who are not eligible for dialysis. As with the Dialysis-Eligible NDD-CKD population, the Other NDD-CKD population is largely untreated with ESAs. Some of these patients receive medical care in endocrinology, cardiology or internal medicine clinics outside of nephrology, where they are treated for their primary disease. The prevalence rate of anemia (defined as Hb <12 for women and <13 for men) in this population in China is estimated to be approximately 50% for Stage 3 and 80% for Stage 4.

Unmet Medical Need and Roxadustat Differentiation

Anemia is considered a risk multiplier for CKD patients and is commonly associated with increased rates of cardiovascular events, hospitalizations, CKD progression, and death. Several of the advantages that roxadustat, our oral therapeutic, potentially offers over ESAs are particularly suited to address the unmet medical need in each of the three categories of CKD patients in China.

We believe there is chronic under-treatment of anemia within the CKD patient population is at high risk for cardiovascular events such as heart attackson dialysis in China. The most recent treatment guidelines published by the Chinese Society of Nephrology in 2018 recommended treatment to hemoglobin 11.0 g/dL to 12.0 g/dL. Even though over 70% of hemodialysis CKD patients, and strokes. One known side effectapproximately 60% of ESAs is elevation of blood pressure, which is particularly dangerous in this high risk patient population. In contrast, we did not observe increases in blood pressure inperitoneal dialysis CKD patients are treated with roxadustat beyondESAs, based on the backgroundChinese Renal Data System in 2015, less than 60% of dialysis patients reached 10.2 g/dL.

We believe many of the factors that lead to under-treatment of anemia can be overcome with rsoxadustat:

Current ESA Market Size and Drivers of Market Growth in China

China is the second largest pharmaceutical market after the United States. Total Healthcare expenditures in China have been estimated to be approximately $640 billion in 2015. Total ESA sales in China were approximately $330 million in 2017, of which an estimated 80%, or approximately $275 million, is derived from CKD anemia sales, based on data from IQVIA China Hospital Pharmaceutical Audit (“CHPA”). The ESA market in China has grown at a 12% compound annual growth rate between 2013 and 2017 based on data from IQVIA CHPA.

In addition to anemia being largely untreated in the non-dialysis CKD population, the CKD population in China is growing steadily.

Commercialization

Our preclinical studies indicate thatAstraZeneca is our commercialization partner for roxadustat can overcomein China. Under our collaboration agreement, AstraZeneca will lead commercialization and has responsibility for marketing, market access, and sales. FibroGen has responsibility for medical affairs, manufacturing (as the direct suppressive effects of inflammatory cytokines on erythropoiesis. In addition, in our preclinical studies, we have seen an ability of roxadustat Marketing Authorization Holder), and pharmacovigilance. FibroGen and AstraZeneca will work together to reduce hepcidin expression, thus increasing absorption of iron from the GI tract and the release of iron from intracellular stores and mitigating the functional iron deficiency associated with chronic inflammation.manage distribution.

In our Phase 2 studies, patients’ Hb responsePricing

AstraZeneca and FibroGen have been working closely to determine pricing (both for self-pay and reimbursement) that reflects the value proposition of roxadustat, was independentincluding the differentiation of roxadustat in efficacy and other clinical outcomes, lack of routine IV iron supplementation, convenience against current standard of care, cost effectiveness, and affordability.

Reimbursement

We believe reimbursement and hospital listing are the most critical market access factors for commercialization success in China.  

China is a single-payor market with near universal healthcare provided by the government. Over 95% of the degree of underlying inflammation, as assessed by circulatingpopulation receives healthcare coverage under one government-funded medical reimbursement plan or another, each with different levels of C-reactive protein (“CRP”)reimbursement. Commercial health insurance is available but is minimally adopted, and is seen as a supplement above and beyond government reimbursement.  

Dialysis is reimbursed under Critical Disease Insurance (CDI), where up to 90% of costs are covered. Dialysis-Eligible NDD-CKD and Other NDD-CKD treatment is covered under outpatient care, where reimbursement is generally lower, at an estimated 50-60%.

To obtain government reimbursement for a well-recognized marker of inflammation. Incident dialysis patients havetherapeutic, the highest levels of mortality of all dialysis patients. The incident dialysis period is also the period during which mean ESA doses are generally highest. To the extent the increased levels of mortality are associated with high ESA doses, roxadustat may offer a benefitgovernment must agree to incident dialysis patients. The median roxadustat dose in our dialysis Study 053 was 1.3 mg/kg; the Cmax of endogenous EPO levels usually associated with this dose level are comparableadd it to the physiologic range naturally experiencedNRDL or the provincial reimbursement drug lists at a negotiated price (at times at a significant discount). Prior to this time, the market is self-pay, where patients will be responsible for 100% of the launch price determined by people adapting to high altitude or following blood donation. Refer to additional information on endogenous EPOthe company. We believe the self-pay market in China is expanding, given the rise in personal income levels underin the heading “Potentialcountry. Nevertheless, as roxadustat could potentially address an unmet medical need for Anemia Correction with Moderate EPO Levels.”

Potential for Reduced Hepcidin Levels and Anemia Correction Without IV Iron

An important differentiatora much larger number of roxadustatpatients in China, securing reimbursement from ESAs is that roxadustatthe government is expected to correct anemiabe critical to widespread market adoption.

The government has committed to updating the NRDL in 2019. Previous updates to the NRDL occurred in 2017 and maintain Hb without IV iron supplementation. Patients with chronic illness, such as CKD, often suffer from absolute iron deficiency or functional iron deficiency. We believe that elevated levels2009. In addition, there were also NRDL price negotiations in 2018 for oncology drugs. Admission to the NRDL depends on a number of hepcidin, the major hormone that regulates iron metabolism, contributes to both absolutefactors, including on-market experience, scale of patient adoption, physician endorsement, cost effectiveness and functional iron deficiency.

Our Phase 2 clinical trials have shownbudget impact. Given that roxadustat was approved at the end of 2018, we may or may not qualify for the NRDL update in 2019. Provincial governments have some discretion to add roxadustat to provincial reimbursement drug lists. With or without being listed on the NRDL, we can significantly reduce hepcidin levelsapply for inclusion in patientsthe provincial reimbursement drug lists of selected provinces, which may take months, depending on the province.

Hospital Listing

Government hospitals currently represent over 90% of the pharmaceutical market in China. In order for roxadustat to be prescribed at a government hospital, it has to be carried in the hospital formulary. The process of entry into the formulary is commonly referred to as “hospital listing”, and typically requires a long lead time. These decisions are made on a hospital-by-hospital basis with DD-CKDtiming that can range from every six months to every five years. Some hospitals also have temporary listing procedures that can accelerate timing.  Private hospital and NDD-CKD. The following figure showsnon-hospital pharmacies, which represent a reductionsmall minority of the drug market in serum hepcidin level of approximately two thirds, observed at week 5, in 52 incident dialysis patients treated with roxadustat.

Reduction of Serum Hepcidin Levels (Study 053) in Incident Dialysis Patients

In addition, we believe roxadustat increases the levels of proteins involved in iron uptake, release and transport. Data from our Phase 2 clinical trials indicate that oral iron supplementation alone is adequate to correct anemia during treatment with roxadustat, in contrast to ESAs which typically require IV iron supplementation. Additionally, our data indicate that unlike ESAs, roxadustat treatment doesChina, do not require a formulary process to sell a drug. While the opportunity for roxadustat remains significant, given these market access challenges, the rate of market uptake for a drug is typically modest in China.

Tendering

Provincial and municipal government agencies will establish a provincial drug procurement agency to operate a mandatory collective tender process for purchases by government hospitals of a medicine included in provincial or local medicine procurement catalogs. The provincial or local medicine procurement catalogs are determined by the provincial drug procurement agency based on the National Essential Drugs List, the NDRL, hospital formularies, etc. If roxadustat has been included in a government hospital formulary, the NDRL or the provincial reimbursement drug list, the relevant hospitals must participate in collective tender processes for the purchase of roxadustat. During the collective tender process, the provincial drug procurement agency will establish a committee consisting of recognized pharmaceutical experts. The committee will assess the bids submitted by the various participating pharmaceutical manufacturers, taking into consideration, among other things, the quality and price of the drug product and the service and reputation of the manufacturer. Only drug products that patientshave been selected in the collective tender processes may be iron replete before initiating therapy.

Avoiding IV iron helpspurchased by participating hospitals. If we are unable to avoidwin purchase contracts through the significant safety risks associated with IV iron described above,collective tender processes in which we decide to participate, there will be limited demand for roxadustat, and because the cost of oral iron is significantly less than the cost of IV iron, could also confer significant costs savings.sales revenues from roxadustat will be materially and adversely affected.

Potential ReimbursementROXADUSTAT FOR THE TREATMENT OF ANEMIA IN CHRONIC KIDNEY DISEASE IN JAPAN

Dialysis-Dependent CKD Patients in Japan

In September 2018, Astellas submitted an NDA in Japan for roxadustat for the treatment of anemia in CKD patients on dialysis based on positive results from four Phase 3 studies. We expect Astellas to receive a decision on the dialysis NDA in the second half of 2019. Topline results from these four Phase 3 studies are as follows:

Phase 3 Study 1517-CL-0307: Double-Blind Study in Hemodialysis

In 2018, Astellas and Convenience AdvantagesFibroGen reported results from Astellas’ Phase 3 study of roxadustat in 303 CKD hemodialysis patients with anemia. Average hemoglobin levels were effectively maintained at 10.99 g/dL during Weeks 18 to 24 in roxadustat-treated hemodialysis patients who had previously been treated with ESAs. The primary efficacy endpoint of change in average hemoglobin levels from baseline to Weeks 18 to 24 was -0.04 g/dL and -0.03 g/dL in the roxadustat-treated group and darbepoetin-treated group, respectively. The non-inferiority of roxadustat to darbepoetin alfa in change of average hemoglobin from baseline was confirmed as the lower bound of the 95% CI (-0.18, 0.15) of the treatment difference was greater than the pre-specified non-inferiority margin (-0.75 g/dL).

The hemoglobin maintenance rate (defined as the proportion of patients who achieved an average target hemoglobin level between 10.0 and 12.0 g/dL during Weeks 18 to 24) was 79% in roxadustat-treated patients and 83% in patients in the darbepoetin alfa arm. The hemoglobin maintenance rate of patients with at least one hemoglobin value during Weeks 18-24 was 95% in the roxadustat arm and 91% in the darbepetin alfa arm. Among patients taking roxadustat, serum iron, ferritin, and TSAT were clinically stable; and transferrin and TIBC increased through Week 4 and then remained stable. No remarkable changes in iron parameters occurred with darbepoetin alfa.

Roxadustat was well tolerated in this study, and the safety profile of roxadustat was consistent with that observed in previous studies both in dialysis and non-dialysis patients.

Phase 3 Study 1517-CL-0302: Open-Label Study in Peritoneal Dialysis Patients

In 2017, Astellas and FibroGen reported results from Astellas’ multi-center, open-label Phase 3 study of roxadustat in peritoneal dialysis CKD patients with anemia. This 24-week study enrolled a total of 56 peritoneal dialysis patients, of whom 43 patients had previously received ESAs (ESA-conversion patients), and 13 patients had not previously received ESAs (ESA-naïve patients). Roxadustat was well tolerated and shown to correct hemoglobin levels in ESA-naïve patients and maintain hemoglobin levels within the target range in both ESA-conversion patients and ESA-naïve patients.

The hemoglobin maintenance rate (defined as the proportion of patients who achieved an average target hemoglobin level between 10.0 and 12.0 g/dL during Weeks 18 to 24) was 92% in ESA-naïve patients and 74% in ESA-conversion patients. The hemoglobin maintenance rate of patients with at least one hemoglobin value during Weeks 18 to 24 was 92% in ESA-naïve patients and 87% in ESA-conversion patients. The mean of average hemoglobin levels reached during Weeks 18 to 24 was 11.05 g/dL in ESA-naïve patients and 10.93 g/dL in ESA-conversion patients. The mean change in hemoglobin from baseline to the average during Weeks 18 to 24 was 1.69 g/dL in ESA-naïve patients and 0.14 g/dL in ESA-conversion patients. The preliminary safety analysis for this trial is consistent with the safety profile of roxadustat in previous clinical trials.

Phase 3 Study 1517-CL-0308: Open-Label Study in ESA-Naïve Hemodialysis Patients

In 2018, Astellas completed its 24-week long multi-center, open-label, randomized, non-comparator Phase 3 study of roxadustat in 75 CKD ESA-naïve hemodialysis patients with anemia. The hemoglobin response rate at the end of treatment (defined as the proportion of patients who achieved a hemoglobin level ≥10.0 g/dL and a hemoglobin increase from baseline ≥ 1.0 g/dL) was 86.5% in patients randomized to a starting dose of 50 mg of roxadustat, and 89.2% in patients randomized to a starting dose of 70 mg of roxadustat.

Roxadustat was well tolerated in this study, and the results were consistent with the roxadustat safety profile observed to date.

Phase 3 Study 1517-CL-0312: Open-Label ESA-Conversion Study in Hemodialysis

In 2018, Astellas completed its 52-week, multi-center, open-label, non-comparator Phase 3 study of roxadustat in 164 CKD hemodialysis patients with anemia. This study was an ESA-conversion study. The hemoglobin maintenance rate (defined as the proportion of patients who achieved an average target hemoglobin level between 10.0 and 12.0 g/dL) was 79.1% during Weeks 18 to 24, and 71.2 % during Weeks 46 to 52.

Roxadustat was well tolerated in this study, and the results were consistent with the roxadustat safety profile observed to date.

Non-Dialysis-Dependent CKD Patients in Japan

Our partner Astellas has completed ASP-1517-314, one of the two non-dialysis CKD Phase 3 studies for Japan. The two studies are expected to serve as a basis for a supplemental NDA for the treatment of anemia in non-dialysis CKD patients.

Status with Regulatory Agencies

China

Roxadustat received NDA approval in December 2018 from the NMPA for the treatment of anemia caused by CKD in dialysis patients. In doing so, China became the first in-world approval country for a first-in-class (HIF-PH inhibitor) drug. We expect CKD non-dialysis patients to be added to the roxadustat label in mid-2019 pending scheduling and completion of the standard Phase 3 clinical site inspections by the CFDI.

Japan

In September 2018, Astellas submitted an NDA on roxadustat for the treatment of anemia in CKD patients on dialysis. Astellas plans to submit an NDA for anemia for CKD patients not on dialysis upon completion of both non-dialysis CKD Phase 3 studies in Japan.

U.S. and Europe

In conjunction with our collaboration partners, we have completed the Phase 3 trials of roxadustat intended to support marketing authorization applications in the U.S. and EU for the treatment of anemia in CKD. We and our partners are in the process of preparing an NDA for submission to the FDA and an MAA for submission to the EMA in 2019.

Investigational New Drug and Clinical Trial Applications

Roxadustat is being studied under one Investigational New Drug Application (“IND”), and several Clinical Trial Applications (“CTAs”), all with a specified indication of treatment of anemia in CKD. We originally submitted the IND in the U.S. to the FDA in April 2006. Our collaboration partner, Astellas, submitted the CTA in Japan with the PMDA in June 2009. We and our collaboration partners Astellas and AstraZeneca have also submitted CTAs in Europe, Latin America, Canada, Russia, and Asia, beginning in 2013.

For the treatment of anemia in MDS patients, we have submitted an IND to the FDA in the U.S. with CTAs in Asia, Europe, and CTA to the NMPA in China in 2017.

ROXADUSTAT FOR THE TREATMENT OF ANEMIA ASSOCIATED WITH MYELODYSPLASTIC SYNDROMES

Based on roxadustat’s mechanism of action and safety and efficacy profile to date, we believe it has the potential to treat anemia associated with many other conditions, including MDS.

Background of Anemia in MDS

MDS are a group of rare disorders characterized by poorly formed or dysfunctional blood cells in the bone marrow, leading to anemia in most cases. Anemia, a serious medical condition, is associated with increased risks of hospitalization, cardiovascular complications, need for blood transfusions, exacerbation of other serious medical conditions, and death, and frequently leads to significant fatigue, cognitive dysfunction, and decreased quality of life.

MDS is regarded as the most prevalent form of acquired bone marrow failure syndrome in adults. However, the incidence and prevalence of MDS are not yet well understood, and may be greatly underestimated, possibly due to under reporting and under diagnosis. MDS diagnosis became reportable under the World Health Organization oncology classification system only in 2001. The

National Cancer Institute estimates approximately 4.9/100,000 people in the U.S. were diagnosed with MDS annually from 2007 to 2011, an increase from 3.3/100,000 annually for 2001 to 2003. 

The incidence rate of MDS increases in older populations to 30.2/100,000 people among those 70 and 79 years of age, and further to 59.8/100,000 among those 80 years of age and older. The population-based registries are believed to have underestimated the incidence of MDS due to under diagnosis. It has been reported, using Medicare billing claims data, that the incidence of MDS in patients aged 65 years and older was approximately 162/100,000 as of 2003. The prevalence of MDS in the U.S. is estimated to be between 60,000 and 170,000, and continues to rise as more MDS therapies become available and patients are living longer with MDS.

In China, the incidence of MDS has been estimated to be 1.51/100,000 in the adult population. This lower rate (relative to other major markets such as the U.S., Western Europe, and Japan) may be due to under diagnosis.

Anemia is the most common clinical presentation in MDS, leading to red blood cell transfusions and related risks such as iron overload and significant impairment of the quality of life in affected patients. Dependency on red blood cell transfusions is associated with shorter life expectancy in patients with MDS.

Limitations of the Current Standard of Care for MDS and Anemia Associated with MDS

As a bone marrow disorder MDS patients often rely on repeated blood transfusions. Currently, there is no drug approved for the treatment of anemia in MDS patients in China or in the U.S., and transfusions are not readily accessible in China due to limited blood supply.

Stem cell transplantation is the only treatment that can cure MDS, but is available to only a small fraction of higher risk young MDS patients who are eligible for bone marrow transplant. For these patients, treatment is often delayed until the disease progresses because of the known risks associated with transplantation and low success rates. This treatment option is unavailable to the majority of MDS patients who are older or who are deemed low risk.

There are limited approved pharmacologic treatments for MDS. The FDA-approved treatments for MDS include the aza‑nucleosides (HMA) 5-azacitidine and decitabine which are typically used for treating intermediate or higher risk patients (based on the International Prognostic Scoring System). Further, these therapies are not approved for lower risk MDS patients because of their significant undesirable effects on bone marrow. These hypomethylating agents can achieve remission in a minority of the treated patients for a short duration of time before progression to acute myeloid leukemia, and are associated with significant levels of neutropenia and thrombocytopenia on top of those caused by the underlying disease. Revlimid^® (lenalidomide) is approved in the U.S. and in the EU only for treating MDS patients with 5q (del), a condition present in only 7% to 15% of MDS patients in whom a region of DNA has been deleted on one of the pair of chromosome 5 in the patient’s immature red blood cells. With a 61% to 67% responder rate in this sub-population, treatment with lenalidomide is associated with significant side effects such as neutropenia (55% to 75%) and thrombocytopenia (41% to 44%).

While there are no approved therapies for anemia of MDS in the U.S., treatment guidelines recommend the use of ESAs to address anemia in lower risk MDS patients that have a low EPO level. ESA doses used for MDS anemia are generally five times the doses typically used for treating anemia in CKD patients, and the response rates are as low as 20% to 32% in lower risk MDS patients. The low response rate and high ESA doses typical in MDS are primarily due to inflammation, which contributes to ESA-resistance and elevated hepcidin levels, functional iron deficiency, and the underlying progressive dysfunction of the bone marrow. Patients who initially respond to ESAs generally will develop resistance as their MDS progresses and become dependent on blood transfusions.

Red blood cell transfusion is generally reserved for severe anemia in MDS patients. In the U.S., red blood cell transfusions are usually used when Hb <9.0 g/dL or lower. However, in China, the hemoglobin threshold for red blood cell transfusion is as low as <6.0 g/dL in MDS patients due to limited blood supply. Frequent red blood cell transfusions impose both financial and time burdens on patients and payors since frequent visits to the hospital for blood tests and transfusions are required. More importantly, transfusions are associated with risk of development of alloantibodies, which is related to the number of prior transfusions, and the transmission of infectious agents, a particular concern in MDS patients who may have neutropenia and compromised immune systems. Most notably, chronic red blood cell transfusions result in iron overload where iron can damage the heart, liver and other organs, as well as have a negative impact on clonal evolution and on hematopoietic stem cell therapy outcome. Iron overload from red blood cell transfusions is thought to be inhibitory on erythropoiesis and excess iron impacts hepcidin regulation causing a self-reinforcing feedback loop on erythropoiesis. For these reasons, patients with iron overload are treated with iron chelating agent in an attempt to reduce iron toxicity, but gastrointestinal and renal side effects lead to one‑year discontinuation rate of iron chelator as high as 49%. Given these risk factors, red blood cell transfusion dependency is a strong non-favorable prognostic factor for survival of MDS patients.

The disease burden of anemia in MDS is high. Severe anemia interferes with the quality of life of patients and their ability to work, in addition to damaging other organ systems due to insufficient oxygen delivery to tissues. When red blood cell transfusions become necessary to sustain bodily functions, the risk of transfusion-related complications can further threaten MDS patients’ lives and well-being.

Potentially Differentiated Reimbursement Framework

ESAs are included in the MIPPAMedicare Improvements for Patients and Providers Act bundled payment system in the DD-CKDdialysis-dependent CKD setting and reimbursed under Medicare Part B in the NDD-CKDnon-dialysis-dependent CKD setting. Based on our roxadustat data to date, we believe roxadustat has the potential to correct anemia through a differentiated mechanism of action and that offers different therapeutic effects that createthan ESA and the potential to displace multiple drugs in current use (such as ESAs and IV iron), and/or those in development (such as agents for suppression of hepcidin). Although the bundle currently covers ESAs or oral equivalents of ESAs or other IV products encompassed by the bundle, due to the differentiated innovative nature of roxadustat, and a lack of definition in the regulations on oral equivalency, for which there may be a CMS determination later this year, it is unclear whether roxadustat will be included in or excluded from the bundle. Under MIPPA, agents that have no IV equivalent in the bundle are currently expected to be excluded from the bundle until 2024. We believe that there may be commercial benefits in either event, buthowever are unable to predict the potential benefits until further guidance from CMSthe Centers for Medicare and Medicaid Services becomes available.

In the NDD-CKDnon-dialysis CKD setting, we expect that roxadustat, an oral treatment, should be subject to Medicare Part D, which would allow physicians to prescribe roxadustat without the financial and reimbursement risk associated with purchasing and storing injectable ESAs. We believe that this should encourage significantly greater usage outside of the dialysis setting.setting than injectable agents like ESA.

Potential Reduction of Other Medications

In addition to potentially eliminating the need forroutine IV iron supplementation, based on our Phase 2 and China Phase 3 clinical trial results to date, we believe that roxadustat has the potential to reduce the use of other medications frequently required in some CKD anemia patients, such as anti-hypertensives anti-coagulants, and statins.

Oral Administration

Many physicians that treat CKD patients, particularly primary care and family practice physicians, cardiologists, endocrinologists, and internists, do not typically stock or administer ESAs. An easily accessible oral agent that is dispensed by pharmacies could significantly increase the number of physicians treating anemia in patients with CKD, and therefore, the number of patients receiving treatment.

In addition, the oral administration of roxadustat potentially offers a significant convenience advantage for CKD patients who have yet to initiate dialysis and are therefore not regularly visiting a dialysis center. Patients can more easily self-administer medicine in any setting, rather than being subject to the inconvenience and restrictions of regular visits to physicians’ offices or infusion centers forto receive treatment with ESAs.

Potential Pharmacoeconomic Advantages

Based on our Phase 2 clinical trial results to date, we believe that roxadustat’s potential pharmacoeconomic advantages over ESA therapy may include safety (with a potential decrease in cardiovascular events and hospitalizations, with consequently lower associated treatment costs), lower administrative cost, reduction or elimination of IV iron and potentially other medications. If we can demonstrate any of these pharmacoeconomic advantagesdemonstrated in our Phase 3 studies, theythese pharmacoeconomic advantages may help support reimbursement worldwide, including in Europe and China.

The Market Opportunity for Roxadustat

We believe that there is a significant opportunity for roxadustat to address markets currently served by injectable ESAs. According to IQVIA (formerly Quintiles and IMS Health, 2013Health) MIDAS™ reports, over the 12 months ending September 30, 2018, global ESA sales in all indications totaled $8.6$8.0 billion, driven primarily by $6.2$5.6 billion sold in the U.S. and Europe. We believe that a substantial portion of ESA sales are for CKD anemia. For example, Amgen reported in the U.S.,January 2019 that its ESA portfolio of EPOGEN which is primarily used in the DD-CKD patient population,^® (epoetin alfa) and Aranesp® (darbepoetin alfa) had 2014total 2018 worldwide sales of approximately $2 billion.$2.6 billion, of which $2.3 billion was in nephrology where CKD patients are treated. We further believe that the number of patients requiring anemia therapy will grow steadily as the global CKD population and access to dialysis care continue to expand, particularly in China and other emerging markets including the rest of Asia, Latin America, Eastern Europe, the Middle East, and the Commonwealth of Independent States. In established markets, such as the U.S., as obesity, hypertension, and diabetes prevalence continue rising, and the mortality of ESRD patients decline, the prevalence of ESRD is expected to grow further. Recent research published in Journal of American Society of Nephrology predicts the prevalence of ESRD in the U.S. to increase by 29% - 68% by 2030 from the level in 2015, to between 971,000 to 1,259,000 in 2030. The USRDS estimates the total U.S. prevalence of ESRD as of 2016 at 724,075, including 509,014 patients on dialysis and 215,061 transplant recipients.

Furthermore, we believe that there is a significant opportunity for roxadustat to address patient segments that are currently not effectively served by ESAs, such as anemia in the NDD-CKDnon-dialysis CKD patient population, which is substantially larger than the DD-CKDdialysis CKD patient population. Diabetes and hypertension are the leading causes of secondary CKD. Although we estimate approximately 36% of diabetic and 20% of hypertensive CKD patients are anemic (Hb<12g/12 g/dL), we believe the majority of these patients are currently untreated for anemia since they are under the care of primary care, family practice physicians, and other non-nephrology specialists, such as endocrinologists, diabetologists, cardiologists, and internists, where ESA therapies are not readily available.

We also believe that roxadustat may provide a safer option to re-establishaddress the chemotherapy induced anemiaCIA market, which was once a market of comparable in size to the DD-CKDdialysis-dependent CKD anemia market. Other non-CKDIn addition, other types of anemias, including anemia related to inflammatory diseases, MDS, and surgical procedures requiring transfusions whichthat are not addressed adequately with currently available therapies may be addressable opportunities.

To maximize the commercial potential for roxadustat, we incorporated several unique elements into our Phase 3 program. We have performed the first placebo-controlled Phase 3 studies in non-dialysis CKD patients to potentially demonstrate the benefits of anemia therapy and safety of roxadustat compared to placebo. We have also performed the largest Phase 3 study in incident dialysis anemia patients, who are at the highest risk for death, and are the most difficult patients to stabilize and treat for anemia in CKD. Based on data from our Phase 2 studies, we believe that roxadustat may offer a safer alternative to ESAs for this particularly vulnerable patient population. We are also evaluating the cardiovascular safety of roxadustat compared to placebo in non-dialysis CKD patients. Separately, we are evaluating cardiovascular safety of roxadustat compared to ESA in the dialysis population of CKD patients.

Phase 1 and Phase 2 Clinical Trials

We have an extensive roxadustat clinical pharmacology program which includes many completed Phase 1 studies. Our Phase 2 program includes eight roxadustat studies, four in CKD non-dialysis patients and four in CKD dialysis patients, which achieved the following objectives:

The following chart summarizes the design of our completed Phase 2 studies outside of Japan and China and the primary objectives of each study.

OUR DEVELOPMENT PROGRAM FOR ROXADUSTATCompleted Phase 2 Studies

*Study conducted by Astellas

QW = weekly; BIW = two times per week; TIW = three times per week

Safety Summary

In addition to the overmore than 1,100 subjects who have been exposed to roxadustat in Phase 1 and Phase 2 clinical studies, our Phase 3 program has studied roxadustat in over 11,000 patients globally. The preliminary Phase 3 safety analyses reported have shown an overall safety profile consistent with the results observed in prior roxadustat studies. The adverse events reported are consistent with those expected in these study populations with similar background diseases. The pooled safety analyses, including MACE for CKD in both non-dialysis and dialysis populations in the U.S. and EU Phase 3 programs, are anticipated to be completed in the second quarter of 2019.  

ROXADUSTAT FOR THE TREATMENT OF ANEMIA IN CHRONIC KIDNEY DISEASE IN CHINA

Roxadustat received NDA approval in December 2018 from the NMPA for the treatment of someanemia caused by CKD in dialysis patients. Roxadustat is the first HIF-PH inhibitor to be approved, for any indication, anywhere in the world. We believe this is the first time that China became the first-in-world approval country for a first-in-class drug. We are planning to launch roxadustat in China in the third quarter of 2019.

We believe there is a particularly significant unmet medical need for the treatment of anemia in CKD in China. Specifically, anemia is undertreated in the rapidly growing population of dialysis patients. In the non-dialysis population, only a small percentage of patients receive anemia treatment, and those who do receive only a minimal level, including patients who are eligible for 24dialysis and are severely anemic. In the context of the rapidly growing Chinese pharmaceutical market, we believe that the demand for anemia therapy will continue to grow as a result of an expanding CKD population, as well as the central government’s mandate to make dialysis, which is still in the early stages of infrastructure development, more available through expansion of government reimbursement and build-out of dialysis facilities. The Chinese government has also put pharmaceutical innovation as a top priority for the country. As the standard of living improves in China, the demand for access to innovative drugs increases. In this context, we believe that roxadustat is a particularly promising product for this market.

FibroGen applied for market approval of roxadustat in China as a Domestic Class I innovative drug. This China-specific pathway is independent of any U.S., EU or Japan approval. We expect the population of non-dialysis CKD patients to be added to the roxadustat label in mid-2019 pending scheduling and completion of the standard Phase 3 clinical site inspections by the China Food and Drug Inspection (“CFDI”) under the NMPA.

As part of the approval, we have committed to a 2,000-patient post-approval safety study, which is a mandatory regulatory requirement of approved Domestic Class 1 innovative drugs.

Phase 3 Studies in China

In January 2017, we reported topline results from the two China Phase 3 studies of roxadustat in CKD anemia:

Study 4592-808: Eight-Week Placebo-Controlled Portion of 26-Week Correction in China Non-Dialysis CKD Patients

In the double-blind, placebo-controlled eight-week portion of the 26-week clinical trial of CKD patients not on dialysis in China, 151 anemia patients were randomized 2:1 to receive roxadustat (n=101) or placebo (n=50). Roxadustat met its primary efficacy endpoint of correcting anemia, by achieving a statistically significant increase in hemoglobin levels compared to placebo over eight weeks. Furthermore, the secondary endpoint of hemoglobin response was met as hemoglobin response was achieved by a higher proportion of patients in the roxadustat arm than in the placebo arm.

Roxadustat-treated patients achieved a mean hemoglobin increase of 1.9g/dL from baseline (8.9g/dL) over eight weeks of treatment vs. a mean change in hemoglobin of -0.4g/dL (from 8.9 g/dL baseline) in the placebo arm; the least square mean (“LS Mean”) difference of the two arms is significant, p<0.000000000000001.

A significantly higher proportion of roxadustat patients achieved hemoglobin response (an increase ≥1g/dL from baseline) after eight weeks vs. placebo patients, 84.2% compared to 0.0% (p<0.000000000000001). Sixty-seven percent of the roxadustat-treated patients vs 6% of placebo- patients achieved hemoglobin correction to be at or above the desired range of Hb≥10 g/dL within eight weeks, p=0.000000000000077.

There was a significant increase in hemoglobin level from baseline at every weekly measurement between Weeks two to eight per figure below.

FGCL-4592-808: Mean (+/- SE) Change from Baseline in Hemoglobin (Hb)

After Week eight, placebo patients were converted to roxadustat treatment and patients originally in the roxadustat arm continued treatment through Week 26. Anemia correction and hemoglobin maintenance were observed up to Week 27.

FGCL-4592-808: Mean Change in Hemoglobin over Time in Phase 2 studies3 China Non-Dialysis CKD Patients (26 Weeks) Including Placebo Crossover to Roxadustat

In the 26-week portion of this China Phase 3 non-dialysis study, 97.6 % of patients who received up to 26 weeks of roxadustat achieved anemia correction with Hb ≥10.0g/dL. For patients who crossed over from placebo to roxadustat, there was an increase in mean hemoglobin levels over 18 weeks of roxadustat treatment, with mean hemoglobin increasing from 8.6 g/dL (averaged over Weeks seven to nine) to 10.8 g/dL (averaged over Weeks 23 to 27); a statistically significant increase (p <0.0001). Hemoglobin levels declined after Week 27 when patients were no longer receiving roxadustat, as illustrated by the figure above.

In the 26-week portion of this non-dialysis study, roxadustat was shown to increase hemoglobin regardless of baseline inflammation status: both in patients with inflammation (CRP >4.9 mg/L) and severalin patients without inflammation (CRP ≤4.9 mg/L).

The durability of roxadustat’s effect on hemoglobin levels was further supported by data from the subset of patients (n=23) who participated in the 52-week safety extension of this non-dialysis China Phase 3 study. Approximately 95% of the non-dialysis patients who completed the 52-week safety extension period maintained Hb ≥10.0g/dL at the end of treatment.

In addition, in the eight-week portion of this non-dialysis study, roxadustat led to significant reduction in serum hepcidin levels (-56.1 ng/mL for approximately 4 yearsroxadustat patients vs -15.1 ng/mL for placebo, p=0.00000005). Anemia treatment with roxadustat was effective without the use of IV iron and there was no iron parameter (ferritin or TSAT) requirement for patients at study entry.

Study 4592-806: 26-Week Maintenance in China Dialysis-Dependent CKD Patients

In the Phase 3 CKD study, 304 patients (271 hemodialysis and 33 peritoneal dialysis patients) previously on epoetin alfa were randomized to and treated with roxadustat (n=204) or epoetin alfa (n=100) for 26 weeks. Prior to randomization, patients in this study were previously treated with stable doses of EPO: 7% patients were treated with 利血宝® (“Li Xue Bao”) epoetin alfa, manufactured in Japan and marketed in China by Kyowa Hakko Kirin China Pharmaceutical Co., Ltd. (“Kirin EPO”) and 93% of patients were treated with one of eight other brands of EPO commercially available in China. All the patients randomized to the active comparator arm were treated with Kirin EPO.

The primary endpoint was mean change in hemoglobin from baseline to the average level during the final five weeks of the 26-week treatment period. Roxadustat met the predefined non-inferiority criterion for this primary endpoint in comparison to Kirin EPO in both full analysis set and per protocol set (“PPS”) analysis. In a pre-specified sequential analysis, roxadustat also showed statistical superiority over Kirin EPO for the primary endpoint, the mean hemoglobin increase observed in the roxadustat arm was higher than in the Kirin EPO arm, 0.75g/dL vs. 0.46g/dL, with a significant difference in the LS Mean hemoglobin change in the two treatment arms, p=0.037, in PPS analysis; baseline hemoglobin was 10.4 g/dL in both treatment arms.

Anemia in patients treated with roxadustat was corrected earlier than in Kirin EPO patients, and roxadustat maintained hemoglobin levels at a higher level (between 10-12 g/dL) than those receiving Kirin EPO despite the increase in average dose of Kirin EPO (relative to average baseline EPO dose) received by patients in the comparator arm (as shown in the inflammation figures below).

FGCL-4592-806: Mean (+/- SE) Change from Baseline in Hemoglobin (Hb)

We performed a subgroup analysis based on patients’ levels of inflammation, a common co-morbidity with CKD patients. Roxadustat raised and maintained hemoglobin levels in patients with inflammation (defined as having baseline CRP levels >ULN 4.9 µg/L) at doses that were equal to or lower than those received by the patients without inflammation. In contrast, patients with inflammation in the Kirin EPO arm realized lower hemoglobin levels than patients with normal CRP levels (despite receiving higher doses of EPO than patients without inflammation), reflecting roxadustat’s potential to overcome the hyporesponsiveness seen in ESA treatment, as discussed in the section above titled “Limitations of the Current Standard of Care for Anemia in CKD”. The two figures below show mean change in hemoglobin with mean patient dose, and mean hemoglobin levels with mean patient dose, in patients with and without inflammation.

FGCL-4592-806: Mean (+/- SE) Change in Hemoglobin (Hb) from Baseline and

Mean (+/- SE) Dose for Patients with and without Inflammation

FGCL-4592-806: Mean (+/- SE) Hemoglobin (Hb) and

Mean (+/- SE) Dose for Patients with and without Inflammation

One hundred and twelve roxadustat patients continued treatment in a safety extension study, our ongoing Phase 3 program, which requires for a minimum treatment durationtotal of a year, provides additional long term safety data.

We along with our partners, Astellas and AstraZeneca, have designed our global Phase 3 program to support regulatory approval of roxadustat in both NDD-CKD and DD-CKD patients in the U.S., the EU, Japan and China. Our U.S. and EU Phase 3 program has an aggregate target enrollment of approximately 7,000 to 8,000 patients worldwide. Our U.S. Phase 3 program is also designed and sized for demonstrating non-inferiority to comparators for the MACE composite safety endpoints in two separate patient pools, NDD-CKD and DD-CKD. We believe this will be required for approval in the U.S. for all new anemia therapies. Our Phase 3 program will study multiple patient populations, including incident dialysis patients and stable dialysis patients and will include multiple NDD-CKD studies comparing roxadustat against placebo controls. Five of the six Phase 3 studies supporting approval in the EU use the same patients that are intended to support approval in the U.S. However, the EU requires shorter treatment duration and less overall patient exposure.

For our three roxadustat Phase 3 studies, we have reached approximately 90% of our cumulative target enrollment agreed upon with our partners. We completed patient enrollment in one of these three studies and the second should complete in early March 2016; we currently expect to complete enrollment in the third U.S. study in the third quarter of 2016. We currently anticipate filing for New Drug Application (“NDA”) approval for roxadustat in the U.S. in 2018.

Our subsidiaries, FibroGen China Anemia Holdings, Ltd. and FibroGen (China) Medical Technology Development Co., Ltd. (individually or collectively referred to as “FibroGen China”), began enrolling patients in our China Phase 3 studies in December 2015. The primary efficacy endpoint is 26 weeks for the 300 subject dialysis study and 8 weeks for the 150 subject non-dialysis study. We expect to complete enrollment52 weeks. Approximately 96% of the dialysis study inpatients who completed the second quarter of 2016 and the non-dialysis study in the third quarter of 2016. We expect to complete enrollment of the 52 week52-week safety extension study (100 subjects) in the first half of 2016.

We are operating within the context of a Class 1.1 drug approval pathway for Domestic innovative drugs, and we currently anticipate initiating the NDA process in the fourth quarter of 2016 after we have reached the primary efficacy endpoint for both studies. Given that there is little precedent in China for the approval pathway, and the China Food and Drug Administration (“CFDA”) is in the process of enacting regulatory reform, we continue to regularly consult with the CFDA. We currently do not expect to announce the interim data publicly prior to initiating the NDA process. We expect that the Beijing CFDA will conduct the manufacturing review and site inspections first, to be followed by technical review of the preclinical, clinical and Chemistry, Manufacturing and Control filing by the Center for Drug Evaluation.  

Our Phase 2 Program

We have completed and analyzed six roxadustat Phase 2 studies, three in NDD-CKD patients and three in DD-CKD patients, to assess the efficacy of roxadustat to both correct anemia (“correction”) and maintain the Hb response (“maintenance”). Data from these studies have been published and presented at various medical conferences and medical journals. Two of the six completed Phase 2 studies were conducted in China. The efficacy and safety data generated from our China studies were consistent with our U.S. Phase 2 studies and further contributed to the promising efficacy and safety results to date. Astellas’ Phase 2 DD-CKD and NDD-CKD studies in Japan have been completed, and data reconciliation and analysis are in progress.

The data from our completed Phase 2 studies demonstrated that roxadustat achieved a clinically meaningful increase in Hb levels in anemic NDD-CKD and DD-CKD patients andperiod maintained Hb levels in DD-CKD patients who were converted from ESA therapy. Roxadustat corrected anemia without the need for IV iron supplementation and exhibited an acceptable safety profile. Specifically, our Phase 2 studies achieved the following objectives:

The following chart summarizes the design of our completed studies in DD-CKD and NDD-CKD patients and indicates the primary objectives of each study.

Completed Phase 2 Studies

QW = weekly; BIW = twice weekly; TIW = three times weekly

Study 017: Dose Escalating Study in NDD-CKD patients

Study 017 established proof of concept for roxadustat by showing a significant increase in Hb in a dose-dependent manner, and provided data on the relationship between roxadustat dose and Hb response. This formed the basis for the dosing rules that we applied in subsequent studies of longer duration and in a larger number of patients.

This study, a randomized, single-blind, placebo-controlled, dose-escalation study, was the first Phase 2 study to assess the safety and efficacy of a range of roxadustat doses in the correction of anemia in NDD-CKD stage 3 and 4 patients, over four weeks of treatment, and a 12-week safety follow-up period. A total of 117 patients (of which 96 were evaluable) were randomized sequentially into four weight-based dose cohorts: 1 mg/kg, 1.5 mg/kg, 2 mg/kg, and 0.7 mg/kg, respectively. Roxadustat was administered either twice weekly or three times weekly.

Weight Based, Three Times Weekly and Twice Weekly Dosing Leads to Hb Improvement. We tested 4 different roxadustat weight-based doses administered for four weeks with Hb measurements over a six week period. As shown in the table below, all of the patients in the highest weight-based dose cohort met the criteria for response in that they achieved Hb rise > 1 g/dL in four weeks. As roxadustat achieved 100% Hb response at the 2 mg/kg dose, higher doses were not pursued in this study despite the absence of dose limiting toxicity. Roxadustat was well tolerated without any safety concerns.

Significant, Dose Dependent Increases in Hb. As shown in the table below, the dose-dependent change in Hb from baseline in roxadustat patients was statistically significant from placebo by Day 8 (p=0.025) and remained so at each assessment through Week 6 (p=0.0001 at Day 22; p<0.0001 at Day 26–29/end of treatment).

A p-value is a statistical measure of the probability that the difference in two values could have occurred by chance. The smaller the p-value, the greater the statistical significance and confidence in the result. Typically, results are considered statistically significant if they have a p-value less than 0.05, meaning that there is less than a one-in-20 likelihood that the observed results occurred by chance. The FDA requires that sponsors demonstrate the effectiveness and safety of their product candidates through the conduct of adequate and well-controlled studies in order to obtain marketing approval. Typically, the FDA requires a p-value of less than 0.05 to establish the statistical significance of a clinical trial, although there are no laws or regulations requiring that clinical data be statistically significant, or that require a specific p-value, in order for the FDA to grant approval.

Hb Responses to a Range of Roxadustat Doses in FGCL-4592-017

BIW = twice weekly; TIW = three times weekly

Standard error of the mean (“SE”), is a statistical measure of the amount that an observed mean may be expected to differ by chance from the true mean. For a population that follows a normal distribution, 68% of observed means will be within one standard error of the mean.

Dose-Dependent Reduction in Hepcidin Levels. Roxadustat reduced serum hepcidin levels in a dose-dependent fashion.

Study 041: Study for Optimization of Starting Dose and Dose Titration in NDD-CKD Patients

Study 041 demonstrated that both tier-weight and fixed starting doses can initiate anemia correction. In tier-weight based dosing for this study, we used starting doses based on the patient’s body weight category: high, middle or low. This randomized, open-label Phase 2 study was designed to evaluate the efficacy and safety of roxadustat over 16 to 24 weeks in 145 NDD-CKD patients (of which 143 were efficacy evaluable), and to evaluate the effects of dosing regimens in order to determine an optimized approach to anemia correction. In this trial, we tested six different starting dose regimens: three fixed doses, and three tier-weight doses. In fixed dosing, all patients in the same cohort were given the same starting dose.

We tested both three times weekly and twice weekly dosing frequencies for anemia correction, similar to Study 017, and further demonstrated that Hb levels can be maintained using 3 dosing frequencies (three times weekly, twice weekly and weekly) once target Hb ³11 g/dL was achieved. We also studied various dose adjustment rules, with dose adjustment decisions made from 5 weeks onward, and every 4 weeks thereafter, to seek the best dose titration scheme.

Hb Correction. We met the primary efficacy endpoint of cumulative number (%) of patients with a Hb response, defined as an increase in Hb ³1.0 g/dL from baseline and Hb ³ 11.0≥10.0 g/dL at the end of treatment. Regardless of

Hepcidin, the starting dose or dose titration scheme, 92% of patients collectively from all cohorts achieved an Hb increase of at least 1 g/dL from baseline. These data suggest the doses studied are of adequate range for anemia correction. The following figure shows mean Hb levels for the six dose groups.

FGCL-4592-041 Hb Response Over Various Dosing Regimens

TIW = three times weekly; BIW = twice weekly; QW= once weekly

Hb Correction was Independent of Inflammation Status. In this study,key hormone that regulates iron metabolism, is generally elevated and contributory to EPO hyporesponsiveness in a post-hoc analysis, we observed that the magnitude of increases in Hb in response to roxadustat treatment was comparable for both patients with inflammation (elevated CRP levels)inflammation. Consistent with previously reported Phase 2 CKD data from the U.S. and without inflammation (normal CRP levels).

FGCL-4592-041 Mean (± SE) Maximum ChangeChina, a reduction of serum hepcidin levels was observed in Hb (g/dL)our two China Phase 3 studies of roxadustat in 12 Weeks

This standsCKD. In the Phase 3 dialysis study, the mean decrease in contrast to treatments with ESAs, where elevated CRP is frequently associated with lower Hb response to ESAs. We observed a 30% reduction in meanserum hepcidin levellevels from baseline with eight weeksto the end of roxadustat treatment (p=0.0003), which supports our belief in roxadustat’s ability to overcome inflammation and to maintain iron availability for erythropoiesis.

FGCL-4592-041 Mean (± SE) Serum Hepcidin Level (ng/mL)

Hb Correction Without IV Iron and in Patients Who Have Low Iron Levels at Study Initiation. In connection with the conduct of the study, we also evaluated several iron parameters to assess roxadustat’s ability to improve Hb without the use of IV iron. At baseline, 49% of the efficacy evaluable patients did not have sufficient iron levels in the body to qualify for initiation of ESA treatment under current practice guidelines and would have been excluded from participation in all prior ESA Phase 3 trials. These patients would not be considered iron replete and are typically first treated with IV iron prior to ESA treatment initiation in an effort to ensure an adequate response to ESA and to minimize the risk of iron depletion. Of all patients in this study receiving roxadustat, only 38% were taking oral iron supplements. A mean Hb increase of 1.8 g/dL was achieved in the first 1626 weeks of treatment without IV iron supplementation. There was no evidence for iron depletion as CHr, reticulocyte Hb content or the amount of Hb in newly formed red blood cells, was maintained. Furthermore, there was evidence for improved iron utilization with increases30.2 ng/mL in the MCV and increase in mean corpuscular Hb concentration (MCHC) over the first 16 weeks of treatment with roxadustat from baseline (p=0.0018 and p<0.0001, respectively); both MCV and MCHC typically decrease when there is iron deficiency.

Despite the minimal use of oral iron and lack of IV iron usage, patients who were not iron replete had similar Hb responses at Week 16 as patients who were iron replete.

Reduction in Cholesterol Levels. In a post-hoc analysis of all cohorts, total cholesterol decreased during treatment with roxadustat. Mean reductions in total cholesterol were greater for patients with abnormally high cholesterol levels (> 200mg/dL). Decreases in cholesterol levels were independent of whether patients were taking statins or other lipid lowering agents. Furthermore, the HDL/LDL ratio improved with roxadustat treatmentarm vs. 2.2 ng/mL in the subgroup of patients in whom lipid profiles were conducted.

Improvement in Quality of Life. Finally, in an analysis of exploratory endpoints we observed improved quality of life in patients treated with roxadustat using a standard questionnaire calledEPO comparator arm. In the SF-36 HRQOL. The largest positive changes from baseline occurred in the Vitality subscale (>4 points, p<0.0001) and Physical Component (>1.6 points, p<0.005) subscales of the questionnaire. We believe these data demonstrate that by correcting patients’ anemia, roxadustat may improve quality of life.

Study 040: ESA Conversion Study in DD-CKD Patients

Study 040 was designed to evaluate the short- and long-term dosing of roxadustat in patients on hemodialysis (“HD”) treatment. These results established a conversion dose relationship between ESAs and roxadustat that will be used for Phase 3 trials. Roxadustat maintained Hb withoutnon-dialysis study, the use of IV iron, which is generally required for the treatment of anemia by ESAs.

This randomized, single-blind study was the first roxadustat studymean decrease in patients on HD treatment. Part 1 was a six week open-label Phase 2 dose ranging study in 54 patients (of which 42 were efficacy evaluable) to evaluate the impact of 4 sequential doses of roxadustat on dialysis patients’ Hbhepcidin levels over six weeks upon switching from epoetin alfa, in comparison to those continuing prior epoetin alfa doses. Part 2 was a 19 week treatment study in 90 patients (of which 83 were efficacy evaluable) to establish optimal conversion doses and dose adjustments. Patients included had previously demonstrated a wide range of ESA-responsiveness. Study 040 met its primary endpoint in Part 1 of maintaining Hb in patients previously treated with epoetin alfa at Week 6, indicating that roxadustat can replace ESAs in DD-CKD. Study 040 also met its primary endpoint in Part 2 of maintaining Hb at Week 19, indicating that roxadustat may be effective at long-term maintenance of Hb. IV iron was prohibited in both roxadustat treated patients and ESA treated control patients during this study.

Maintenance of Hb Levels Following Conversion from ESAs. In Part 1 of this study (six week treatment), 41 patients were randomized to one of four roxadustat dose cohorts, and 13 were randomized to continue on epoetin alfa treatment. The primary endpoint was maintaining an Hb level equal to or above 0.5 g/dL below baseline Hb by the end of six weeks. As shown8-week double-blind treatment period was 56.1 ng/mL in roxadustat arm vs. 15.1 ng/mL in the figure below, roxadustat had a dose-response effect for maintaining Hb levels.placebo arm (p=0.00000005).

Roxadustat was generally well tolerated and there were no safety signals observed in the China Phase 3 clinical trials, including through the 52-week safety extension periods. There were no study drug-related deaths. The lowest roxadustat dose cohort of 1.0 mg/kg was comparable to epoetin alfa with maintenanceAEs and SAEs reported in 44% of roxadustat patients and 33%the Phase 3 studies were generally representative of the control arm, patients who continued treatmentunderlying patient population and associated co-morbidities. Treatment of anemia with epoetin alfa (but who were requiredroxadustat in these Phase 3 clinical trials did not lead to stop concomitant treatment with IV iron). Roxadustat doses of 1.5 mg/kg or higher were better than epoetin alfa at maintaining Hb, with 79.2% overall maintenance and with 80% maintenance at the 1.5 mg/kg roxadustat dose, 80% maintenance at the 1.8 mg/kg roxadustat dose and 77.8% maintenance at 2 mg/kg roxadustat dose.

In Part 2 of the study (19 week treatment), 67 patients (with baseline ESA dose requirements ranging from 7 to 164.5 U/kg three times weekly) were randomized to seven cohorts of roxadustat (with various starting doses) and 23 patients were randomized to continue on epoetin alfa. Hb correction in the roxadustat treated patients pooled across all treatment cohorts was maintained over the 19 week treatment period and was comparable to epoetin alfa. The average roxadustat dose requirement for Hb maintenance was approximately 1.70 mg/kg three times weekly.

In Part 1, which was dose ranging, we observed an increase in Hb level at doses of 1.5 to 2.0 mg/kg TIW as shown in the figures below. In Part 2, which was to establish the optimal conversion dose, we observed similar Hb maintenance between roxadustat and epoetin alfa.

FGCL-4592-040 Mean: (± SE) Hb Over Time During Anemia Treatment with Roxadustat or Epoetin Alfa in Dialysis Patients

In addition, in an exploratory analysis of this study we observed a dose dependent decrease in hepcidin in Part 1 of this study.

FGCL-4592-040: Change in Hepcidin Level from Baseline (ng/mL)

DD-CKD patients who switched from ESA treatment to treatment with 2.0 mg/kg roxadustat had significantly greater reduction in serum hepcidin level than those who continued ESA treatment (p=0.038).

FGCL-4592-040 Mean (± SE) Serum Hepcidin Level (ng/mL)

Roxadustat Doses are Associated with Lower Circulating EPO Levels than Epoetin Alfa. The following chart shows the result of six patients who were highly responsive to epoetin alfa and participated in a substudy in which their EPO levels during treatment with roxadustat were compared to EPO levels when the patients were receiving epoetin alfa prior to randomization. Their mean peak EPO concentration after an average dose of 44 U/kg was significantly higher when patients were receiving epoetin alfa relative to when they were receiving a mean roxadustat dose of 1.3 mg/kg as illustrated below. This observation is consistent with the mechanisms of action of ESA and roxadustat, respectively, and we believe the lower EPO exposure observed with roxadustat offers potential safety benefits.

FGCL-4592-040: Mean (+SE) Plasma EPO Levels During Treatment With Roxadustat Compared With Prior Epoetin Alfa Dosing In the Same Patients (n=6)

Maintenance of Adequate Iron Supply. The concentrations of Hb within newly formed red blood cells (“CHr”) is a measure of iron availability for erythropoiesis. In an exploratory analysis of this study, without IV iron supplementation (which was prohibited in this study), CHr was maintained during roxadustat treatment but declined in patients who continued treatment with epoetin alfa. This finding indicates that unlike epoetin alfa, roxadustat allows endogenous stores of iron to provide an adequate supply to newly forming red blood cells without any IV iron supplementation.pressure.

FGCL-4592-040: Mean Reticulocyte Hb Content (CHr) Over Time in Subjects Treated with Roxadustat and Epoetin Alfa

Reduction in Total Cholesterol. Consistent with our Phase 2 studies in NDD-CKD patients, we observed in a post-hoc analysis that roxadustat reduced total cholesterol levels in stable dialysis patients, and this effect appeared durable throughout the 19 week treatment period as depicted below.

FGCL-4592-040: Mean (±SE) Total Cholesterol Over Time During Treatment of Dialysis Patients with Roxadustat or epoetin alfa-Treated

Study 053: Correction of Anemia in Incident Dialysis Patients

Incident dialysis patients are at increased risk of serious cardiovascular events and death as compared to stable dialysis patients. The mortality rate among dialysis patients is highest during the first few months of dialysis initiation, and on average, patients also require the highest doses of ESA in this period. These patients typically have high levels of systemic inflammation and require IV iron supplementation for ESA to be effective.

This randomized, open-label study was designed to evaluate the safety and efficacy of roxadustat for correction of anemia in 60 incident dialysis patients (of which 55 were efficacy evaluable) who were on dialysis for at least two weeks and not more than four months and had not been treated with ESAs, and to compare the treatment responses to roxadustat under the different iron supplementation conditions. All treatment groups in Study 053 met their primary endpoint in increasing Hb level during treatment: each cohort achieved maximum mean Hb increases from baseline, ranging between 2.8 g/dL to 3.5 g/dL, resulting from 12 weeks of roxadustat treatment. We observed that at week 12 in excess of 90% of the patients achieved a greater than 1 g/dL increase in Hb from baseline. In addition, while roxadustat corrected anemia without iron supplementation, oral iron enabled an optimal Hb response. More importantly, oral iron was as effective as IV iron for Hb correction by roxadustat. In contrast, ESA therapy requires IV iron supplementation in this patient population.

This study also showed that roxadustat can correct anemia regardless of the patient’s level of inflammation as measured by CRP. At Week 12, the median weekly dose of roxadustat was 4.0 mg/kg in this trial of incident dialysis patients and is similar to the median weekly dose of 4.45 mg/kg at Week 12 in Study 040, our trial of roxadustat in stable dialysis patients. In contrast, ESA therapy typically involves higher doses at the time of dialysis initiation.

The 48 HD patients were randomized to one of the three iron supplementation options: oral iron, IV iron or no iron. Included in the 60 patients were 12 peritoneal dialysis (“PD”), patients who received oral iron. This study incorporated the same tier-weight based dosing regimen utilized in Study 041.

Hb Correction in Incident Dialysis Patients Without IV Iron Administration. All three cohorts of roxadustat treated HD patients (no iron, oral iron or IV iron supplementation) and PD patients (oral iron) achieved a significant increase in the maximum Hb change from baseline, the primary efficacy endpoint. Most importantly, the maximum increase in Hb was not significantly different between roxadustat treated HD patients supplemented with oral iron (3.5 g/dL) and those supplemented with IV iron (3.5 g/dL). In contrast, a published study of ESAs in this patient population showed that patients supplemented with oral iron achieved a Hb response comparable to no iron supplementation and significantly lower Hb response than those supplemented with IV iron. These Phase 2 data demonstrate that roxadustat, unlike ESAs, may eliminate the need for IV iron and thus avoid the side effects of IV iron in DD-CKD patients.

FGCL-4592-053: Hb Over Time During Anemia Correction with Roxadustat in Incident Dialysis Patients, with No Iron, Oral Iron, or IV Iron Supplementation

Note: Hb = hemoglobin; HD = hemodialysis; PD = peritoneal dialysis; n= number of patients

Note: *p<0.05 compared to IV iron and oral iron

Maintenance of Iron Stores. In an exploratory analysis of this study, transferrin saturation (“TSAT”), a marker of iron stores, was well maintained during this period of intensive production of red blood cells with oral iron alone, indicating that iron stores can be maintained without IV iron.

FGCL-4592-053: TSAT Over Time During Anemia Correction With Roxadustat In Incident Dialysis Patients, With No Iron, Oral Iron, or IV Iron Supplementation

Hb Correction Independent of Inflammation Status. As is typical of incident dialysis patients, about half of all patients had elevated CRP levels at baseline. In a post-hoc analysis of this study, we observed that Hb responses following roxadustat treatment were independent of baseline CRP levels. These data demonstrate that, unlike the ESAs, roxadustat has the potential to overcome the suppressive effects of inflammation on Hb responsiveness to treatment.

Significant Reduction in Hepcidin. Consistent with our other studies, in an exploratory analysis of this study we observed that patients’ hepcidin levels were significantly reduced, most notably in the no iron and oral iron cohorts, by > 50% from baseline, and to a lesser extent in the IV iron cohort. At follow-up (4 weeks after stopping roxadustat), hepcidin levels returned towards baseline values. Hepcidin reduction may be one of the mechanisms for overcoming the Hb suppressive effects of inflammation by making iron more available for roxadustat-induced erythropoiesis.

China Phase 2 Studies

In China, roxadustat is known as FG-4592. We performed two Phase 2 studies in China, one trial in NDD-CKDnon-dialysis CKD patients, and another trial in DD-CKD patients.CKD patients on dialysis. In these trials, Hbhemoglobin correction in NDD-CKDnon-dialysis CKD patients and Hbhemoglobin maintenance in DD-CKDdialysis CKD patients replicated the results seen in the U.S. trials. SAEs were progression of CKD, infection and high potassium levels and the most common adverse events were infections, high potassium levels, nausea and dizziness. There were no dose-related trends or imbalances in the nature of adverse events between patients treated with roxadustat compared to patients treated with either placebo (study 047) or epoetin alfa control (study 048) groups.

Market Opportunity

Study 047: 8 Week Placebo-ControlledAddressable Patient Populations in China

Based on a large-scale cross-sectional survey performed between September 2009 and September 2010 published in the Lancet (Zhang, et al. Lancet (2012)), there are an estimated 119.5 million CKD patients in China. Based on the prevalence ratios, there were approximately 19 million patients in CKD stages 3, 4, or 5, which we have grouped into three categories: dialysis CKD patients; dialysis-eligible patients who need dialysis under treatment guidelines but are not dialyzed (“Dialysis-Eligible NDD-CKD”); and stages 3 and 4 patients, as well as stage 5 patients who are not eligible for dialysis (“Other NDD-CKD”).

Dialysis-Dependent CKD

Based on the latest estimates and published data, we believe there are approximately 600,000 dialysis patients in China, making it the largest dialysis population in the world.

Dialysis treatment is delivered in the form of hemodialysis or peritoneal dialysis. In China, approximately 85% of dialysis patients with CKD are on hemodialysis. Hemodialysis is performed primarily in dialysis clinics within hospitals, most of which are publicly owned. This is in contrast to the U.S. where freestanding dialysis centers located outside of hospitals is common practice. With recent regulatory changes, the number of privately owned dialysis clinics is growing at a rapid pace, a trend that has provided additional capacity to meet the growing demand. The remaining 15% of CKD patients are on peritoneal dialysis, which is self-administered at home by patients. Peritoneal dialysis patients typically visit their nephrologists on a monthly basis at the hospital for monitoring and follow-up. The prevalence rate of anemia (defined as Hb< 12) in the dialysis population in China is estimated to be approximately 85%.

Dialysis-Eligible NDD-CKD

InDialysis-Eligible NDD-CKD refers to patients who need dialysis under Chinese treatment guidelines but are not dialyzed. The Chinese treatment guidelines recommend initiation of dialysis at eGFR <10 mL/min/1.73m² (eGFR <15 mL/min/1.73m² for diabetic nephropathy patients). The number of Dialysis-Eligible NDD-CKD patients in China has been consistently estimated at 1-2 million. While the size of the dialysis population in China has been growing rapidly, it nevertheless falls far short of the number who require dialysis treatment. We believe that this multi-center, double-blind, placebo-controlled study, 91 anemicDialysis-Eligible NDD-CKD population is characteristic of developing markets like China and at risk for severe anemia. The prevalence rate of anemia (defined as Hb <12) in this population in China is estimated to be approximately 90%.

Other NDD-CKD

Other NDD-CKD refers to the sub-groups of CKD patients were randomized 2:1within non-dialysis who are earlier stage: CKD patients in stage 3 and stage 4, as well as stage 5 who are not eligible for dialysis. As with the Dialysis-Eligible NDD-CKD population, the Other NDD-CKD population is largely untreated with ESAs. Some of these patients receive medical care in endocrinology, cardiology or internal medicine clinics outside of nephrology, where they are treated for their primary disease. The prevalence rate of anemia (defined as Hb <12 for women and <13 for men) in this population in China is estimated to be approximately 50% for Stage 3 and 80% for Stage 4.

Unmet Medical Need and Roxadustat Differentiation

Anemia is considered a risk multiplier for CKD patients and is commonly associated with increased rates of cardiovascular events, hospitalizations, CKD progression, and death. Several of the advantages that roxadustat, our oral therapeutic, potentially offers over ESAs are particularly suited to address the unmet medical need in each of the three categories of CKD patients in China.

We believe there is chronic under-treatment of anemia within the CKD patient population on dialysis in China. The most recent treatment guidelines published by the Chinese Society of Nephrology in 2018 recommended treatment to hemoglobin 11.0 g/dL to 12.0 g/dL. Even though over 70% of hemodialysis CKD patients, and approximately 60% of peritoneal dialysis CKD patients are treated with ESAs, based on the Chinese Renal Data System in 2015, less than 60% of dialysis patients reached 10.2 g/dL.

We believe many of the factors that lead to under-treatment of anemia can be overcome with rsoxadustat:

Current ESA Market Size and Drivers of Market Growth in China

China is the second largest pharmaceutical market after the United States. Total Healthcare expenditures in China have been estimated to be approximately $640 billion in 2015. Total ESA sales in China were approximately $330 million in 2017, of which an estimated 80%, or approximately $275 million, is derived from CKD anemia sales, based on data from IQVIA China Hospital Pharmaceutical Audit (“CHPA”). The study used tier-weight starting doseESA market in China has grown at a 12% compound annual growth rate between 2013 and 2017 based on data from IQVIA CHPA.

In addition to anemia being largely untreated in the non-dialysis CKD population, the CKD population in China is growing steadily.

Commercialization

AstraZeneca is our commercialization partner for roxadustat dosein China. Under our collaboration agreement, AstraZeneca will lead commercialization and has responsibility for marketing, market access, and sales. FibroGen has responsibility for medical affairs, manufacturing (as the Marketing Authorization Holder), and pharmacovigilance. FibroGen and AstraZeneca will work together to manage distribution.

Pricing

AstraZeneca and FibroGen have been working closely to determine pricing (both for self-pay and reimbursement) that reflects the value proposition of roxadustat, including the differentiation of roxadustat in efficacy and other clinical outcomes, lack of routine IV iron supplementation, convenience against current standard of care, cost effectiveness, and affordability.

Reimbursement

We believe reimbursement and hospital listing are the most critical market access factors for commercialization success in China.  

China is a single-payor market with near universal healthcare provided by the government. Over 95% of the population receives healthcare coverage under one government-funded medical reimbursement plan or another, each with different levels of reimbursement. Commercial health insurance is available but is minimally adopted, and is seen as a supplement above and beyond government reimbursement.  

Dialysis is reimbursed under Critical Disease Insurance (CDI), where up to 90% of costs are covered. Dialysis-Eligible NDD-CKD and Other NDD-CKD treatment is covered under outpatient care, where reimbursement is generally lower, at an estimated 50-60%.

To obtain government reimbursement for a therapeutic, the government must agree to add it to the NRDL or the provincial reimbursement drug lists at a negotiated price (at times at a significant discount). Prior to this time, the market is self-pay, where patients will be responsible for 100% of the launch price determined by the company. We believe the self-pay market in China is expanding, given the rise in personal income levels in the country. Nevertheless, as roxadustat could potentially address an unmet medical need for a much larger number of patients in China, securing reimbursement from the government is expected to be critical to widespread market adoption.

The government has committed to updating the NRDL in 2019. Previous updates to the NRDL occurred in 2017 and 2009. In addition, there were also NRDL price negotiations in 2018 for oncology drugs. Admission to the NRDL depends on a number of factors, including on-market experience, scale of patient adoption, physician endorsement, cost effectiveness and budget impact. Given that roxadustat was adjusted, depending upon the initial response to treatment. Study 047 met its primary endpoint of a mean maximum increase from baseline Hbapproved at the end of 2018, we may or may not qualify for the NRDL update in 2019. Provincial governments have some discretion to add roxadustat to provincial reimbursement drug lists. With or without being listed on the NRDL, we can apply for inclusion in the provincial reimbursement drug lists of selected provinces, which may take months, depending on the province.

Hospital Listing

Government hospitals currently represent over 90% of the pharmaceutical market in China. In order for roxadustat to be prescribed at a government hospital, it has to be carried in the hospital formulary. The process of entry into the formulary is commonly referred to as “hospital listing”, and typically requires a long lead time. These decisions are made on a hospital-by-hospital basis with timing that can range from every six months to every five years. Some hospitals also have temporary listing procedures that can accelerate timing.  Private hospital and non-hospital pharmacies, which represent a small minority of the drug market in China, do not require a formulary process to sell a drug. While the opportunity for roxadustat remains significant, given these market access challenges, the rate of market uptake for a drug is typically modest in China.

Tendering

Provincial and municipal government agencies will establish a provincial drug procurement agency to operate a mandatory collective tender process for purchases by government hospitals of a medicine included in provincial or local medicine procurement catalogs. The provincial or local medicine procurement catalogs are determined by the provincial drug procurement agency based on the National Essential Drugs List, the NDRL, hospital formularies, etc. If roxadustat has been included in a government hospital formulary, the NDRL or the provincial reimbursement drug list, the relevant hospitals must participate in collective tender processes for the purchase of roxadustat. During the collective tender process, the provincial drug procurement agency will establish a committee consisting of recognized pharmaceutical experts. The committee will assess the bids submitted by the various participating pharmaceutical manufacturers, taking into consideration, among other things, the quality and price of the drug product and the service and reputation of the manufacturer. Only drug products that have been selected in the collective tender processes may be purchased by participating hospitals. If we are unable to win purchase contracts through the collective tender processes in which we decide to participate, there will be limited demand for roxadustat, and sales revenues from roxadustat will be materially and adversely affected.

ROXADUSTAT FOR THE TREATMENT OF ANEMIA IN CHRONIC KIDNEY DISEASE IN JAPAN

Dialysis-Dependent CKD Patients in Japan

In September 2018, Astellas submitted an NDA in Japan for roxadustat for the treatment of anemia in CKD patients on dialysis based on positive results from four Phase 3 studies. We expect Astellas to receive a decision on the dialysis NDA in the second half of 2019. Topline results from these four Phase 3 studies are as follows:

Phase 3 Study 1517-CL-0307: Double-Blind Study in Hemodialysis

In 2018, Astellas and FibroGen reported results from Astellas’ Phase 3 study of roxadustat in 303 CKD hemodialysis patients with anemia. Average hemoglobin levels were effectively maintained at 10.99 g/dL during Weeks 18 to 24 in roxadustat-treated hemodialysis patients who had previously been treated with ESAs. The primary efficacy endpoint of change in average hemoglobin levels from baseline to Weeks 18 to 24 was -0.04 g/dL and -0.03 g/dL in the roxadustat-treated group and darbepoetin-treated group, respectively. The non-inferiority of roxadustat to darbepoetin alfa in change of average hemoglobin from baseline was confirmed as the lower bound of the 95% CI (-0.18, 0.15) of the treatment difference was greater than the pre-specified non-inferiority margin (-0.75 g/dL).

The hemoglobin maintenance rate (defined as the proportion of patients who achieved an average target hemoglobin level between 10.0 and 12.0 g/dL during Weeks 18 to 24) was 79% in roxadustat-treated patients and 83% in patients in the darbepoetin alfa arm. The hemoglobin maintenance rate of patients with at least one hemoglobin value during Weeks 18-24 was 95% in the roxadustat arm and 91% in the darbepetin alfa arm. Among patients taking roxadustat, serum iron, ferritin, and TSAT were clinically stable; and transferrin and TIBC increased through Week 8.4 and then remained stable. No remarkable changes in iron parameters occurred with darbepoetin alfa.

Roxadustat was well tolerated in this study, and the safety profile of roxadustat was consistent with that observed in previous studies both in dialysis and non-dialysis patients.

Phase 3 Study 1517-CL-0302: Open-Label Study in Peritoneal Dialysis Patients

In 2017, Astellas and FibroGen reported results from Astellas’ multi-center, open-label Phase 3 study of roxadustat in peritoneal dialysis CKD patients with anemia. This 24-week study enrolled a total of 56 peritoneal dialysis patients, of whom 43 patients had previously received ESAs (ESA-conversion patients), and 13 patients had not previously received ESAs (ESA-naïve patients). Roxadustat was well tolerated and shown to correct hemoglobin levels in ESA-naïve patients and maintain hemoglobin levels within the target range in both ESA-conversion patients and ESA-naïve patients.

The hemoglobin maintenance rate (defined as the proportion of patients who achieved an average target hemoglobin level between 10.0 and 12.0 g/dL during Weeks 18 to 24) was 92% in ESA-naïve patients and 74% in ESA-conversion patients. The hemoglobin maintenance rate of patients with at least one hemoglobin value during Weeks 18 to 24 was 92% in ESA-naïve patients and 87% in ESA-conversion patients. The mean Hb increasesof average hemoglobin levels reached during Weeks 18 to 24 was 11.05 g/dL in ESA-naïve patients and 10.93 g/dL in ESA-conversion patients. The mean change in hemoglobin from baseline to the average during Weeks 18 to 24 was 1.69 g/dL in ESA-naïve patients and 0.14 g/dL in ESA-conversion patients. The preliminary safety analysis for this trial is consistent with the safety profile of roxadustat in previous clinical trials.

Phase 3 Study 1517-CL-0308: Open-Label Study in ESA-Naïve Hemodialysis Patients

In 2018, Astellas completed its 24-week long multi-center, open-label, randomized, non-comparator Phase 3 study of roxadustat in 75 CKD ESA-naïve hemodialysis patients with anemia. The hemoglobin response rate at the end of eight weekstreatment (defined as the proportion of treatment were 1.6patients who achieved a hemoglobin level ≥10.0 g/dL and 2.4a hemoglobin increase from baseline ≥ 1.0 g/dLdL) was 86.5% in the low-dosepatients randomized to a starting dose of 50 mg of roxadustat, and 89.2% in patients randomized to a starting dose of 70 mg of roxadustat.

Roxadustat was well tolerated in this study, and the high dose cohort, respectively, compared to 0.4 g/dL for placebo, p < 0.0001 for each cohort compared to placebo.

FGCL-4592-047: Hb Over Time (g/dL) in Chinese NDD-CKD Patients

Study 048: Stable Dialysis Conversion in China

In this multi-center, open-label, ESA-controlled study, 87 HD patients (of which 82results were efficacy evaluable)consistent with Hb 9 to 12 g/dL previously maintained with ESAs were randomized 3:1 to roxadustat or epoetin alfa treatment groups, respectively, in three sequential dose cohorts of increasing starting doses of roxadustat. This study design was similar to Part 1 of Study 040. Study 048, an exploratory study, achieved its objective of number (%) of patients with successful dose conversion whose Hb levels are maintained at no lower than 0.5 g/dL below their mean baseline value at the end of Weeks 5 and 6 (59.1% for the low-dose, 88.9% for the mid-dose, and 100% for the high dose). The Hb responses to the roxadustat treatment of Chinese dialysis patients, with the low dose cohort were numerically similarsafety profile observed to epoetin alfa, while the mid-dose and the high-dose cohorts each had a statistically significantly higher Hb response rate than epoetin alfa. Hb responses to the roxadustat treatment of Chinese dialysis patients (as shown in the figure below) were similar to Part 1 of Study 040 in the U.S.

FGCL-4592-048: Hb Over Time in Chinese Stable Dialysis Patients

Safety Summary

A range of roxadustat doses, up to 3.0 mg/kg in DD-CKD patients and up to 5.0 mg/kg in healthy volunteers, have been administered and all roxadustat doses have been well-tolerated. In January 2016, the roxadustat data safety monitoring board (“DSMB”) completed its scheduled review of the data from all active Phase 3 roxadustat clinical trials and recommended that the program proceed with no protocol changes. The following summarizes the safety findings of our preclinical, Phase 1 and Phase 2 studies:

Of our completed Phase 2 clinical studies, four (Studies 017, 047, 040 and 048) were controlled, two with placebo and two with ESA.date.

ForPhase 3 Study 017, which had a treatment period1517-CL-0312: Open-Label ESA-Conversion Study in Hemodialysis

In 2018, Astellas completed its 52-week, multi-center, open-label, non-comparator Phase 3 study of 4 weeks, for 88 subjects on roxadustat in 164 CKD hemodialysis patients with anemia. This study was an ESA-conversion study. The hemoglobin maintenance rate (defined as the proportion of patients who achieved an average target hemoglobin level between 10.0 and 28 subjects on placebo, we observed treatment emergent SAEs (“TSAEs”), in 4 patients (4.5%) on roxadustat, with 0 cardiovascular SAEs12.0 g/dL) was 79.1% during Weeks 18 to 24, and 0 SAEs for the composite safety endpoint. There were also TSAEs in 1 patient (3.6%) in the placebo arm of the study, including 1 cardiovascular SAE and 0 SAEs for the composite safety endpoint. The composite safety endpoint (exploratory analysis) includes death, myocardial infarction, congestive heart failure, subendocardial ischaemia, cerebrovascular accident, thrombosis (fistula), arteriovenous fistula occlusion, angina pectoris, and vascular graft thrombosis. A patient may experience more than one SAE, in which case a patient is only counted once71.2 % during Weeks 46 to 52.

Roxadustat was well tolerated in this analysis. TSAEs observed in patients treatedstudy, and the results were consistent with roxadustat were arteriovenous fistula site complications, dyspnea, femoral neck fracture and non-cardiac chest pain. SAEs observed in patients treated with placebo were acute renal failure and pericarditis.

For Study 047, which had a treatment period of 8 weeks, for 61 subjects on roxadustat, and 30 subjects on placebo, we observed TSAEs in 8 patients on roxadustat (13.1%), with 0 cardiovascular SAEs, and 0 SAEs for the composite safety endpoint, and TSAEs in 4 patients on placebo (13.3%), including 1 cardiovascular SAE (3.3%), and 1 SAE (3.3%) for the composite safety endpoint. TSAEs observed in patients treated with roxadustat were chronic renal failure (4), upper respiratory tract infection (1), hyperkalaemia (2) and urinary tract infection (1). TSAEs observed in patients treated with placebo were unstable angina (1), anemia (1), retinal detachment (1), pneumonia (1) and gastritis (1).

For Study 040, for those who had a treatment period of 19 weeks, for 66 subjects on roxadustat, and 23 subjects on ESAs, we observed TSAEs in 15 patients on roxadustat (22.7%), including 1 cardiovascular SAEs (1.5%), and 8 SAEs for the composite safety endpoint (12.1%), and TSAEs in 4 patients on ESAs (17.4%), including 2 cardiovascular SAEs (8.7%), and 4 SAEs (17.4%) for the composite safety endpoint. TSAEs categorized by System Organ Class, a standard event classification, observed in patients treated with roxadustat were infections and infestations (5), metabolism and nutrition disorders (2), cardiac disorders (1), gastrointestinal disorders (1), nervous system disorders (2), respiratory, thoracic and mediastinal disorders (2), skin and subcutaneous tissue disorders (1), injury, poisoning and procedural complications (2), and psychiatric disorders (1). TSAEs categorized by System Organ Class observed in patients treated with ESA were infections and infestations (3), metabolism and nutrition disorders (3), cardiac disorders (1), respiratory, thoracic and mediastinal disorders (1), blood and lymphatic system disorders (1) and vascular disorders (1).

For Study 048 which had a treatment period of 6 weeks, for 74 subjects on roxadustat, and 22 subjects on ESAs, we observed 0 TSAEs in patients on roxadustat, including cardiovascular SAEs and for the composite safety endpoint. There were also 0 TSAEs in the patients taking ESAs.

The differences in the SAE percentages described are not considered statistically significant.

The three SAEs described above that were considered by the principal investigator to be possibly related to roxadustat did not occur in these four studies.

No Liver Enzyme Safety Signal. Liver enzymes were monitored closely in the roxadustat Phase 2 clinical development program. No evidence of hepatotoxicity wassafety profile observed in any of the roxadustat clinical trials, and the independent data monitoring committee concluded that there was no concern for hepatotoxicity to date. Liver enzymes are being monitored

Non-Dialysis-Dependent CKD Patients in Phase 3 according to current FDA guidelines, without any special requirements.Japan

In March 2015, we received final reports for two-year rat and mouse carcinogenicity studies of roxadustat. Roxadustat treatment had no adverse effect on survival and did not cause carcinogenic effects in either species. Two-year rodent carcinogenicity studies that were conducted withOur partner Astellas has completed ASP-1517-314, one of the other HIF-PH inhibitors evaluated in the tumor models showed no effect on mortality or incidence of tumors.

In clinical studies to date, we and our independent data monitoring committee have not identified any evidence to suggest tumor risk in the use of roxadustat.

Our Global Phase 3 Program for Roxadustat

In support of our efforts for regulatory approval in the U.S. and Europe, we have continued with our partners to progress on our global Phase 3 clinical program for roxadustat. FibroGen China has also begun enrolling patients in its Phase 3 program in China, and Astellas is responsible fortwo non-dialysis CKD Phase 3 studies infor Japan. Roxadustat is the first HIF-PH inhibitorThe two studies are expected to enter Phase 3 clinical trials. This broad Phase 3 program is designed to meet regulatory approval requirements of multiple regions, and is being jointly implemented with our partners, Astellas and AstraZeneca. The below chart summarizes our ongoing and planned Phase 3 clinical trials, all of which include Hb level maintenanceserve as a study objective once correction or conversion is achieved.

Ongoing Roxadustat Phase 3 Clinical Trials