What happened
FibroGen (FGEN +1.17%) isn't starting the week out very well. On Monday, investors pushed down its stock price by 9%. This seems to be punishment for the company's after-market announcement the previous trading day that the approval process for a crucial pipeline drug will take longer than expected.
So what
The drug in question in FibroGen's promising roxadustat, which treats anemia of chronic kidney disease. The company announced that the Food and Drug Administration's (FDA) review of the company's new drug application (NDA) for roxadustat has been extended by three months. The new action date is March 20, 2021.
Image source: Getty Images.
As the original action date was today, investors are coping with the one-two disappointment of FibroGen's failure to get a regulatory present in time for the holidays, and of roxadustat's inability to barrel into the new year as a marketable drug.
The biotech said that the FDA is "close to finalizing" the NDA. FibroGen is busy submitting additional analyses of the drug's clinical data.
Now what
NDA review extensions are nothing out of the ordinary, and much of the time they're not worth worrying about. Professionals tracking FibroGen stock don't seem to be concerned -- on Monday, for example, Mizuho Securities analyst Difei Yang reiterated his buy rating on it, as well as his $72-per-share price target.
As that level is 80% above the current share price following the sell-off, that confidence is notable -- and, in my opinion, justified, given the very good potential of roxadustat.
