Ebb & Flow

The last time FibroGen raised money was a $56.5 million series E round in September 2000 - shortly after the genomics bubble burst. That left the prelinical company with a hefty post-money valuation around $280 million. Given the subsequent compression in valuations, it would have been fair to assume that last week's $100 million series F was a down round. Far from it.

Indeed, the company, which has reached Phase II, now may be valued above $380 million. Evan McCulloch of Franklin Templeton, which has a stake in the company, said Fibrogen had a post-money valuation of $281 million after its E round.

Franklin Templeton was in on the E round but did not join the cadre of public equity investors in the latest financing, announced last week. "We've gone away from doing private companies," McCulloch said.

Nevertheless, McCulloch has a theory as to why institutional investors ponied up. It's "a hedge against one's Amgen investment - a call option against EPO," he said. FibroGen's FG-2216, an erythropoietic small molecule, is in Phase IIa testing to treat anemia.

Compared with marketed EPO drugs - Amgen's Epogen and second-generation Aranesp, and Johnson & Johnson's Procrit - FibroGen thinks its oral compound has important advantages.

Spokesperson Laura Hansen said that because FG-2216 is a small molecule, FibroGen thinks it will be more cost effective than the injectable EPOs. "We envision pricing more along the lines of a cholesterol drug," she said.

Moreover, Hansen said, an oral anemia therapy has applications in chronic diseases and in an elderly patient population.

Last year, AMGN's EPO franchise posted sales of $5.1 billion, up 28% from $4

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