FibroGen
Annual Report 2018

Plain-text annual report

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549 Form 10-K (Mark One)☒☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31, 2018OR☐☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF1934For the transition period from to .Commission file number: 001-36740 FIBROGEN, INC.(Exact name of registrant as specified in its charter) Delaware 77-0357827(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)409 Illinois StreetSan Francisco, CA 94158(Address of principal executive offices) (zip code) Registrant’s telephone number, including area code:(415) 978-1200 Securities registered pursuant to Section 12(b) of the Act: Title of Each Class Name of Exchange on Which RegisteredCommon Stock, $0.01 par value The NASDAQ Global Select Market 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 ☑ No ☐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 ☐ No ☑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 preceding12 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 ☑ No ☐Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files). Yes ☑ No ☐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’sknowledge, 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. ☑Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growthcompany. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act: Large accelerated filer ☑ Accelerated filer ☐Non-accelerated filer ☐ Smaller reporting company ☐Emerging growth company ☐ 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 financialaccounting 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 ☐ No ☑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 lastbusiness day of the registrant’s most recently completed second fiscal quarter, June 30, 2018, was approximately $3,548.1 million. Shares of Common Stock held by each executiveofficer 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 havebeen 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, 2019 was 85,562,391.DOCUMENTS INCORPORATED BY REFERENCEItems 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 2019Annual 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 yearcovered by this Annual Report on Form 10-K.  TABLE OF CONTENTS PagePART I 3 Item 1. Business 3Item 1A. Risk Factors 60Item 1B. Unresolved Staff Comments 101Item 2. Properties 101Item 3. Legal Proceedings 101Item 4. Mine Safety Disclosures 101 PART II 102 Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 102Item 6. Selected Financial Data 104Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 106Item 7A. Quantitative and Qualitative Disclosure About Market Risk 127Item 8. Consolidated Financial Statements and Supplementary Data 128Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosures 167Item 9A. Controls and Procedures 167Item 9B. Other Information 167 PART III 168 Item 10. Directors, Executive Officers and Corporate Governance 168Item 11. Executive Compensation 168Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 168Item 13. Certain Relationships and Related Transactions, and Director Independence 168Item 14. Principal Accounting Fees and Services 168 PART IV 169 Item 15. Exhibits and Financial Statement Schedules 169 Signatures 177 1 FORWARD-LOOKING STATEMENTSThis 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, whichinvolve substantial risks and uncertainties. In this Annual Report, all statements other than statements of historical or present facts contained in this AnnualReport, including statements regarding our future financial condition, business strategy and plans and objectives of management for future operations, areforward-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 ofthese terms or other similar terms or expressions that concern our expectations, strategy, plans or intentions. Forward-looking statements appear in anumber of places throughout this Annual Report and include statements regarding our intentions, beliefs, projections, outlook, analyses or currentexpectations concerning, among other things, our ongoing and planned preclinical development and clinical trials, the timing of and our ability to makeregulatory filings and obtain and maintain regulatory approvals for roxadustat, pamrevlumab and our other product candidates, our intellectual propertyposition, the potential safety, efficacy, reimbursement, convenience clinical and pharmaco-economic benefits of our product candidates, the potentialmarkets for any of our product candidates, our ability to develop commercial functions, our ability to operate in China, expectations regarding clinicaltrial data, our results of operations, cash needs, spending of the proceeds from our initial public offering and the concurrent private placement, financialcondition, liquidity, prospects, growth and strategies, the industry in which we operate and the trends that may affect the industry or us. We have basedthese forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affectour 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 financialperformance. Moreover, we operate in a very competitive and rapidly changing environment. New risk factors emerge from time to time, and it is notpossible 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, orcombination 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 inthe forward-looking statements will be achieved or occur. Although we believe that the expectations reflected in the forward-looking statements arereasonable, we cannot guarantee future results, levels of activity, performance or achievements. The forward-looking statements made in this Annual Reportare 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 anyforward-looking statements for any reason after the date of this Annual Report or to conform these statements to actual results or to changes in ourexpectations.This Annual Report also contains market data, research, industry forecasts and other similar information obtained from or based on industry reports andpublications, including information concerning our industry, our business, and the potential markets for our product candidates, including data regardingthe estimated size and patient populations of those and related markets, their projected growth rates and the incidence of certain medical conditions, aswell as physician and patient practices within the related markets. Such data and information involve a number of assumptions and limitations, and you arecautioned 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 bematerially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements. 2 PART IITEM 1. BUSINESSOVERVIEWWe are a leading biopharmaceutical company discovering and developing a pipeline of first-in-class therapeutics. We have applied our pioneering expertisein hypoxia-inducible factor (“HIF”) and connective tissue growth factor (“CTGF”) biology to develop innovative medicines for the treatment of anemia,fibrotic disease, and cancer.Roxadustat, our most advanced product candidate, is an oral small molecule inhibitor of HIF prolyl hydroxylase (“HIF-PH”) activity that has received NewDrug Application (“NDA”) approval in anemia associated with chronic kidney disease (“CKD”) in dialysis-dependent (“DD”) patients from the NationalMedical 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”), we have completed the Phase 3 trialsof 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 CKD. We and our partners are in the process of preparing an NDA for submission to the U.S. Food and Drug Administration(“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 thePharmaceuticals and Medical Devices Agency (“PMDA”). We expect an approval decision on the Japan dialysis NDA in the second 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 associatedwith myelodysplastic syndromes (“MDS”). Pamrevlumab, a human monoclonal antibody that inhibits the activity of CTGF, is advancing toward Phase 3 clinical development for the treatment ofidiopathic pulmonary fibrosis (“IPF”) and pancreatic cancer, and is currently in a Phase 2 trial for Duchenne muscular dystrophy (“DMD”).Applying our internally developed proprietary technology in recombinant human collagen, FibroGen is also developing a biosynthetic corneal implant inChina.ROXADUSTAT FOR THE TREATMENT OF ANEMIA IN CHRONIC KIDNEY DISEASERoxadustat is an internally discovered HIF-PH inhibitor that acts by stimulating the body’s natural pathway of erythropoiesis, or red blood cell production,to treat 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 sectionbelow captioned “Roxadustat for the Treatment of Anemia in Chronic Kidney Disease in China.” We expect CKD non-dialysis patients to be added to theroxadustat label once regulatory inspections of the Phase 3 non-dialysis clinical trial 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-dependentCKD 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 ofregulatory 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 forNDD-CKD and DD-CKD), including the major adverse cardiovascular event (“MACE”) endpoint, a composite endpoint of death, myocardial infarction andstroke, 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 tosubmit an MAA to the EMA shortly thereafter. Both the U.S. NDA and European MAA for roxadustat are expected to cover anemia associated with dialysisdependent CKD and non-dialysis-dependent CKD.Our partner Astellas has filed its NDA for roxadustat for the treatment of anemia in dialysis patients with the PMDA, and the Phase 3 results used to supportthe Japan NDA are described in the section below captioned “Roxadustat for the Treatment of Anemia in3 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 supplementalNDA 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 at advanced stages of CKD who face increased risks of healthconsequences, many of those patients are left untreated or are sub-optimally treated for anemia due to safety concerns and limited access to the currentlyavailable therapies such as erythropoiesis stimulating agents (“ESAs”). Even in major markets such as the U.S., the use of ESAs to treat anemia in CKD haslargely been limited to the dialysis-dependent CKD population in recent years. We and our partners believe that, as an oral agent with an acceptable safetyprofile, roxadustat could increase treatment access to patients and expand the non-dialysis anemia market.In the longer term, we believe roxadustat has the potential to address anemia markets beyond CKD, including chemotherapy-induced anemia (“CIA”), anemiarelated to inflammation (such as inflammatory bowel disease, lupus, and rheumatoid arthritis), MDS, and in surgical procedures requiring red blood celltransfusions. Roxadustat is in ongoing clinical trials in MDS, and we plan to initiate a Phase 2 clinical trial of roxadustat in the U.S. in CIA in 2019.Completed Phase 3 Clinical Trials of Roxadustat in CKD Anemia for U.S. and European Regulatory SubmissionsWe recently announced that roxadustat met all pre-specified primary efficacy endpoints in the three U.S. and Europe Phase 3 trials conducted by us, which wehave named ANDES in non-dialysis-dependent CKD, HIMALAYAS in incident (newly initiated) dialysis patients, and SIERRAS in dialysis-dependent CKDpatients. 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 indialysis-dependent CKD). AstraZeneca and FibroGen are collaborating on the development and commercialization of roxadustat for the treatment of anemiain 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, aroxadustat Phase 3 trial in dialysis patients. Astellas and FibroGen are collaborating on the development and commercialization of roxadustat for thetreatment of anemia in territories including Japan, Europe, the Commonwealth of Independent States, the Middle East, and South Africa.4 The table below is a summary of our Phase 3 CKD anemia trials by regulatory approval region.Roxadustat Phase 3 CKD Anemia Clinical Trials Estimated or Completed # of Patients Enrolled Study Sponsor, Number Comparator U.S. Europe ChinaDD-CKD NDAApprovedNDD-CKD NDAreviewed by NMPA,awaiting inspection JapanDD-CKDNDAFiled Non-Dialysis FibroGen - FGCL-4592-060 (ANDES) Placebo -------- 922 -------- Astellas - 1517-CL-0608 (ALPS) Placebo -------- 597 -------- AstraZeneca - D5740C00001(OLYMPUS) Placebo 2,781 Astellas - 1517-CL-0610 Darbepoetin alfa 616 FibroGen - FGCL-4592-808 Placebo 151 Astellas - 1517-CL-0310 Darbepoetin alfa ~325 Astellas - 1517-CL-0314 None ~100 NDD-CKD Subtotal by Region 4,300 2,135 151 ~425 Incident Dialysis FibroGen - FGCL-4592-063(HIMALAYAS) Epoetin alfa -------- 1,043 -------- Stable and Incident Dialysis AstraZeneca - D5740C00002(ROCKIES) Epoetin alfa 2,133 Stable Dialysis FibroGen - FGCL-4592-064(SIERRAS) Epoetin alfa -------- 741 -------- Astellas - 1517-CL-0613 (PYRENEES) Epoetin alfa orDarbepoetin alfa -------- 838 -------- FibroGen - FGCL-4592-806 Epoetin alfa 304 Astellas - 1517-CL-0302 None 56 Astellas - 1517-CL-0307 Darbepoetin alfa 303 Astellas - 1517-CL-0308 None 75 Astellas - 1517-CL-0312 None 164 DD-CKD Subtotal by Region 4,755 2,622 304 598 Total by Regulatory ApprovalRegion 9,055 4,757 455 ~1,000 Combined Total to Support U.S. andEU Approvals 9,671 Non-Dialysis CKD Patients (ANDES) – FibroGenANDES is a 922-patient Phase 3, randomized, double-blinded, placebo-controlled trial designed to evaluate the efficacy and safety of roxadustat vs. placebofor 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 14other 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 theroxadustat (N=616) and the placebo (N=306) arms. a.U.S. primary efficacy endpoint: roxadustat was superior to placebo in mean hemoglobin change from baseline to the average over Weeks 28 to 52(2.00 vs. 0.16 g/dL, respectively, p<0.0001). b.EU primary efficacy endpoint: a higher proportion of roxadustat-treated patients (86.0%) achieved a hemoglobin response in the first 24 weeks(defined as achieving a hemoglobin level of at least 11 g/dL and a hemoglobin increase of at least 1 g/dL) as compared to placebo (6.6%),p=0.0007.5 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 ofblood transfusion, administration of an ESA or intravenous (“IV”) iron in the first 52 weeks of treatment, p<0.0001. In addition, roxadustat reduced the risk ofblood 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) – FibroGenHIMALAYAS is a 1,043-patient Phase 3 randomized, open-label, active-controlled trial to assess the efficacy and safety of roxadustat compared to epoetinalfa, an ESA, for the treatment of anemia in CKD patients who have newly initiated dialysis treatment for end-stage renal disease (“ESRD”) and have hadminimal 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 4.4years, 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). a.U.S. primary efficacy endpoint: the mean hemoglobin change from baseline to the average over Weeks 28 to 52 was 2.57 g/dL (roxadustat) vs. 2.36g/dL (epoetin alfa), a least squares mean difference of 0.18 g/dL, with the 95% confidence interval (“CI”) of (0.08, 0.29). The non-inferioritycriteria was met as the lower bound of the 95% CI was well above the non-inferiority margin of -0.75 g/dL, and superiority over epoetin alfa wasalso achieved, p=0.0005. b.EU primary efficacy endpoint: roxadustat met the non-inferiority criteria compared to epoetin alfa: 88.2% of the roxadustat-treated patientsachieved a hemoglobin response in the first 24 weeks (defined as achieving a hemoglobin level of at least 11 g/dL and a hemoglobin increase of atleast 1 g/dL) compared to an 84.5% responder rate in the epoetin alfa arm; lower bound of the 95% CI (-0.9%, 7.6%) of the treatment difference inresponder rate is well above the non-inferiority margin of -15%. 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) – FibroGenSIERRAS is a 741-patient U.S. Phase 3, randomized, open-label, active-controlled trial to assess the efficacy and safety of roxadustat compared to epoetinalfa for the treatment of anemia (in maintaining hemoglobin level) in dialysis CKD patients who were receiving stable doses of ESA prior to studyparticipation. 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 roxadustatand epoetin alfa arms. a.U.S. primary efficacy endpoint: the mean hemoglobin change from baseline to the average over Weeks 28 to 52 was 0.39 g/dL (roxadustat) vs. -0.09 g/dL (epoetin alfa), a least squares mean treatment difference of 0.48 g/dL (95% CI 0.37, 0.59). Roxadustat met the non-inferiority criteria asthe lower bound of 95% CI was well above the non-inferiority margin of ‑0.75 g/dL. Roxadustat also achieved superiority, p<0.0001. b.EU primary efficacy endpoint: the mean hemoglobin change from baseline to the average over Weeks 28 to 36 was 0.54 g/dL (roxadustat) vs. -0.02g/dL (epoetin alfa), a least squares mean treatment difference of 0.53 g/dL with a 95% CI (0.39, 0.67). Roxadustat met the non-inferiority criteria asthe lower bound of the 95% CI was well above the non-inferiority margin of -0.75 g/dL. Roxadustat also achieved superiority over epoetin alfa,p<0.0001.Roxadustat-treated patients had a statistically significant reduction in hepcidin as compared to ESA-treated patients. Roxadustat was shown to increasehemoglobin 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 SIERRASThe 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 resultsfrom 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 quarterof 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) – AstraZenecaOLYMPUS is AstraZeneca’s Phase 3, randomized, double-blinded, placebo-controlled trial designed to evaluate the efficacy and safety of roxadustat vs.placebo for the treatment of patients with anemia in CKD stages 3, 4 or 5 whose disease progression is6 moderate to severe 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 patientsin 26 countries.Non-Dialysis CKD Patients (ALPS) – AstellasALPS is Astellas’ Phase 3, randomized, double-blind, placebo-controlled study of the efficacy and safety of roxadustat for the treatment of anemia in CKDpatients not on dialysis. The trial met its primary endpoints by demonstrating superiority in efficacy vs. placebo in terms of both hemoglobin response rate inthe first 24 weeks and hemoglobin change from baseline at Weeks 28 to 52. The preliminary safety analysis for this trial shows an overall event profileconsistent with the results seen in previous roxadustat studies in CKD patients with anemia.Stable Dialysis CKD Patients (ROCKIES) – AstraZenecaROCKIES is AstraZeneca’s Phase 3, randomized, 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 2,133patients in 18 countries.Stable Dialysis CKD Patients (PYRENEES) – AstellasPYRENEES is Astellas’ Phase 3, randomized, active-controlled trial designed to assess the efficacy and safety of roxadustat vs. epoetin alfa or darbepoetinalfa, for the 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 AttenuationWe believe there could be significant clinical benefit of roxadustat treatment in the non-dialysis-dependent CKD patients if we are able to show theattenuation of renal disease progression. The estimated glomerular filtration rate (“eGFR”) is a measure of the filtration function of the kidney and renaldisease progression. In the preliminary analysis of our pooled Phase 3 non-dialysis studies (ANDES, ALPS, and OLYMPUS) of patients with eGFR 15 orhigher (CKD stages 3 and 4), the one-year decline in eGFR in roxadustat treated patients was shown to be significantly less than that in placebo treatedpatients.Background of Anemia in CKDAnemia can be a serious medical condition in which patients have insufficient red blood cells and low levels of hemoglobin (“Hb”), a protein in red bloodcells that carries oxygen to cells throughout the body.Anemia in CKD is associated with increased risk of hospitalization, cardiovascular complications, and death. In addition, anemia frequently causessignificant fatigue, cognitive dysfunction, and reduced quality of life. Severe anemia is common in patients with CKD, cancer, MDS, inflammatory diseases,and other serious illnesses.Anemia is particularly prevalent in patients with CKD. The prevalence of CKD in the adult population is estimated at 10-12% globally, and is generally aprogressive disease characterized by gradual loss of kidney function that may eventually lead to kidney failure or ESRD requiring dialysis or a kidneytransplant to survive. Blood transfusion is used for treating life-threatening severe anemia. However, blood transfusions reduce the patient’s opportunity for akidney transplant, increase risk of infections and the risk of complications such as heart failure and allergic reactions.There are five stages of CKD that are primarily defined by the Glomerular Filtration Rate (“GFR”).7 Stages of CKD and Prevalence in the U.S. *U.S. prevalence is estimated for adults 20 years of age or older†GFR: Glomerular Filtration Rate (ml/min/1.73 m2)Sources: The prevalence of stage 1 through stage 4 CKD was calculated based on 2016 estimates by the United States Renal Data System (“USRDS”)presented in the 2018 USRDS annual data report: Epidemiology of kidney disease in the United States (“2018 USRDS ADR”), using data from the NationalHealth and Nutrition Examination Survey (“NHANES”) 2013-2016 and 2016 data from the U.S. Census Bureau. The prevalence of stage 5 CKD wascalculated based on 2016 data from the 2018 USRDS ADR using data from the U.S. National ESRD database, NHANES 2013-2016 and 2016 data from theU.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 was derived from Stauffer and Fan, Prevalence of Anemia inChronic Kidney Disease in the United States, PLoS ONE (2014). The prevalence of anemia in patients undergoing dialysis was derived from Goodkin et al.,Naturally Occurring Higher Hemoglobin Concentration Does Not Increase Mortality among Hemodialysis Patients, J Am Soc Nephrol (2011).8 In the U.S., according to the USRDS, a majority of dialysis-eligible CKD patients are currently on dialysis. Of the approximately 509,000 patients receivingdialysis in the U.S., approximately 78% are being treated with ESAs for anemia. Despite the presence of anemia in stages 3 and 4 CKD patients in clinicalpractice, patients typically do not receive ESA treatment for their anemia until they initiate dialysis. As of 2016, approximately 13% of U.S. NDD-CKDpatients were being treated with ESAs prior to initiation of dialysis (2018 USRDS ADR). In many CKD patients, the disease progresses gradually overdecades and patients can spend years suffering from the symptoms and negative health effects of anemia before they receive treatment. Many of these patientsdie 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 anemiaindications totaled $7.6 billion, including $3.5 billion in the U.S.Roxadustat — A Novel, Orally Administered Treatment for AnemiaRoxadustat 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 tohigh altitude. The response activated by roxadustat involves the regulation of multiple, complementary processes to promote erythropoiesis and increase theblood’s oxygen carrying capacity.Coordinated erythropoiesis includes both the stimulation of red blood cell progenitors, by increasing the body’s production of erythropoietin (“EPO”), andan increase in iron availability for hemoglobin synthesis. Patients taking roxadustat typically have a transient increase in circulating endogenous EPO levelsat 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 acorresponding increase in iron availability, and are typically dosed at well above the natural physiologic range of EPO. The sudden demand for ironstimulated by ESA-induced erythropoiesis can lead to functional or absolute iron deficiency. We believe these high doses of ESAs are a main cause of thesignificant safety issues that have been attributed to this class of drugs. In contrast, the differentiated mechanism of action of roxadustat, which involvesinduction of the body’s own natural pathways to achieve a more complete erythropoiesis, has the potential to provide a safer and more effective treatment ofanemia, including in the presence of inflammation, which normally limits iron availability.9 We 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 anemic CKD patients with lower circulating EPO levelsthan what has historically been reported with treatment by ESAs to minimize red blood cell transfusion risks, even in the presence of inflammation, andwithout routine IV iron supplementation, thereby offering potential safety and efficacy benefits over ESAs.Potential for Reduced Hepcidin Levels and Anemia Correction Without Routine IV Iron SupplementationAn important differentiator of roxadustat from ESAs is that roxadustat also mobilizes iron from the body’s iron stores. It has been consistently shown tocorrect anemia in CKD regardless of iron-repletion status, whereas iron repletion is required as a condition for treatment under ESA labels. Furthermore,roxadustat can correct and maintain 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. Many CKDpatients 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 irondepletion caused by ESA-mediated erythropoiesis. Additionally, many CKD patients who have adequate iron stores suffer from functional iron deficiency.While IV iron can help correct anemia when used in combination with ESAs, published studies have suggested both acute and chronic risk of morbidity andmortality associated with the use of IV iron. Increased use of IV iron has been associated with increased risk of hospitalization and death.We believe that elevated levels of hepcidin, the major 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 theyhave also shown a reduction in hepcidin levels with roxadustat treatment.Minimizing IV iron use helps to avoid the safety risks associated with IV, and, because the cost of oral iron is significantly less than the cost of IV iron,treatment 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 ESAsIncident dialysis patients and patients who have chronic inflammation are often hyporesponsive to ESAs, which necessitates the use of higher doses of ESAsto increase hemoglobin levels, thus increasing both safety risk and treatment cost. In contrast, roxadustat has been shown to be similarly effective in patientswith inflammation as those without inflammation without increasing dose. Roxadustat’s ability to overcome the suppressive effects of inflammation onerythropoiesis 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 anemia regardless ofinflammation status may confer clinical safety and efficacy 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 smallerstudies, to increase hemoglobin regardless of baseline inflammation status: both in dialysis-dependent CKD patients and non-dialysis-dependent CKDpatients (as described in the section below captioned “Roxadustat for the Treatment of Anemia in Chronic Kidney Disease in China.”). Our Phase 2 clinicaltrials showed similar results.Potential for Anemia Correction with Moderate EPO LevelsRandomized trials have suggested that high doses of ESAs administered in an attempt to achieve a target hemoglobin level may cause the safety issuesassociated with ESA therapy. These high ESA doses in the inflamed/hyporesponsive patients result in serum EPO levels much higher than physiologicalrange. In contrast, the level of endogenous EPO elevation among patients treated with roxadustat is typically within or near the range observed whenascending to a higher elevation or giving blood. Treating anemia while maintaining lower circulating EPO levels may mitigate, or even avoid, the risks fromexposure to supraphysiologic erythropoietin levels in ESA therapy, and may potentially enable a more effective and safe treatment of anemia in CKDpatients.10 The following graph depicts: 1)the circulating endogenous EPO levels in natural physiologic adaptations, such as adjustment to high altitude, blood loss, or pulmonary edema[left, ]; 2)transient peak endogenous EPO levels estimated for CKD patients who achieved a hemoglobin response to therapeutic doses of roxadustat in ourPhase 2 clinical studies [middle, ]; and 3)the estimated peak circulating recombinant EPO levels resulting from IV ESA doses in distributions reported by the Dialysis Outcomes andPractice Patterns Study for the fourth quarter of 2011 in the U.S. (after bundling was initiated and when the hemoglobin target in ESA labeling wasin the range of 10-11 g/dL [right, ]).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 whoachieved a hemoglobin response to roxadustat in our Phase 2 studies for whom we believe doses depicted approximated therapeutic doses. Hemoglobintarget ranges for these patients were above the hemoglobin levels specified in the current ESA package insert for CKD patients. Only doses in those patientswhose hemoglobin responded in Phase 2 studies are reflected in the figure. The subset of 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 patientswhose anemia was corrected with therapeutic doses and stable dialysis patients who received maintenance doses. Cmax of endogenous EPO levels were notmeasured in all patients; instead the range of EPO Cmax levels were estimated based on data derived from a more limited number of patients in whom EPOlevels were measured at various roxadustat doses and among whom there was substantial variation in measured EPO levels. Accordingly, individual patientswho received roxadustat may have realized EPO Cmax levels significantly above or below these estimated levels. Moreover, the estimates reflected in thegraph may not be reflective or predictive of actual EPO Cmax levels or ranges that will be realized in larger populations of patients receiving roxadustat inour Phase 3 clinical trials. 5 EPO Cmax was computed from ESA dose distributions based on Flaherty et al. (1990) Clin Pharmacol Ther 47:557.Potential Cholesterol BenefitsIn addition, in our Phase 2 and China Phase 3 clinical trials, we observed reductions in total cholesterol and an improvement in average high-densitylipoprotein (“HDL”)/low-density lipoprotein (“LDL”) ratio. Since many CKD patients have high cholesterol levels, which contribute to cardiovascular-related morbidity and mortality, the improvement in the average HDL/LDL ratio observed with roxadustat treatment could confer a benefit to patients.11 Potential Reimbursement and Convenience AdvantagesPotentially Differentiated Reimbursement FrameworkESAs are included in the Medicare Improvements for Patients and Providers Act bundled payment system in the dialysis-dependent CKD setting andreimbursed under Medicare Part B in the non-dialysis-dependent CKD setting. Based on our roxadustat data to date, we believe roxadustat has the potentialto correct anemia through a differentiated mechanism of action and that offers different therapeutic effects than ESA and the potential to displace multipledrugs in current use (such as ESAs and IV iron), and/or those in development (such as agents for suppression of hepcidin). Although the bundle currentlycovers ESAs or other IV products encompassed by the bundle, due to the differentiated innovative nature of roxadustat, it is unclear whether roxadustat willbe included in or excluded from the bundle. We believe that there may be commercial benefits in either event, however are unable to predict the potentialbenefits 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 toprescribe roxadustat without the financial and reimbursement risk associated with purchasing and storing injectable ESAs. We believe that this shouldencourage significantly greater usage outside of the dialysis setting than injectable agents like ESA.Potential Reduction of Other MedicationsIn addition to potentially eliminating routine IV iron supplementation, based on our Phase 2 and China Phase 3 clinical trial results to date, we believe thatroxadustat has the potential to reduce the use of other medications frequently required in some CKD anemia patients, such as anti-hypertensives and statins.Oral AdministrationMany physicians that treat CKD patients, particularly primary care and family practice physicians, cardiologists, endocrinologists, and internists, do nottypically stock or administer ESAs. An easily accessible oral agent that is dispensed by pharmacies could significantly increase the number of physicianstreating 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 dialysisand are therefore not regularly visiting a dialysis center. Patients can more easily self-administer medicine in any setting, rather than being subject to theinconvenience and restrictions of regular visits to physicians’ offices or infusion centers to receive treatment with ESAs.Potential Pharmacoeconomic AdvantagesBased 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 maysupport reimbursement worldwide, including in Europe and China.The Market Opportunity for RoxadustatWe believe that there is a significant opportunity for roxadustat to address markets currently served by injectable ESAs. According to IQVIA (formerlyQuintiles and IMS Health) MIDAS™ reports, over the 12 months ending September 30, 2018, global ESA sales in all indications totaled $8.0 billion, drivenprimarily 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 inJanuary 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 asthe global CKD population and access to dialysis care continue to expand, particularly in China and other emerging markets including the rest of Asia, LatinAmerica, 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 researchpublished 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 in2015, 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 patientson dialysis and 215,061 transplant recipients.12 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 andhypertension are the leading causes of secondary CKD. Although we estimate approximately 36% of diabetic and 20% of hypertensive CKD patients areanemic (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, familypractice physicians, and other non-nephrology specialists, such as endocrinologists, diabetologists, cardiologists, and internists, where ESA therapies are notreadily 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 anemiamarket. In addition, other types of anemias, including anemia related to inflammatory diseases, MDS, and surgical procedures requiring transfusions that arenot 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 firstplacebo-controlled Phase 3 studies in non-dialysis CKD patients to potentially demonstrate the benefits of anemia therapy and safety of roxadustat comparedto 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 mostdifficult 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 toESAs for this particularly vulnerable patient population. We are also evaluating the cardiovascular safety of roxadustat compared to placebo in non-dialysisCKD 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 TrialsWe have an extensive roxadustat clinical pharmacology program which includes many completed Phase 1 studies. Our Phase 2 program includes eightroxadustat studies, four in CKD non-dialysis patients and four in CKD dialysis patients, which achieved the following objectives: •Identified optimal roxadustat dosing regimens for anemia correction and maintenance of hemoglobin response. •Demonstrated roxadustat’s potential to treat anemia in both non-dialysis and dialysis patients, including incident dialysis patients, the mostunstable and high-risk CKD patient population. •Generated substantial safety data indicating that roxadustat is well tolerated, appears safe, and could offer an improved cardiovascular profilerelative to ESAs. •Demonstrated that roxadustat may be able to treat anemia without the need for IV iron supplementation. •Demonstrated that roxadustat can reduce hepcidin levels and potentially treat anemia in a significant subset of patients with inflammation.13 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 Number of Study Number Number of Comparator Treatment Study CKD Patient Study Roxadustat Patients Total Number of Duration Location Population Objective Patients Placebo ESA Patients in Study (Weeks) Dose FrequenciesFGCL-4592-017 U.S. Non-Dialysis Correction,Pharmacokinetics 88 29 117 4 TIW, BIWFGCL-4592-041 U.S. Non-Dialysis Correction &Maintenance 145 145 16;24 TIW, BIW, QWFGCL-4592-040 U.S. StableDialysis Conversion &Maintenance 117 4 40 161 6;19 TIWFGCL-4592-053Russia, U.S., HongKong IncidentDialysis Correction 60 60 12 TIWFGCL- 4592-059U.S.* Non-Dialysis& Dialysis Long-Term Safety &Maintenance 15 15 Up to 5years TIW, BIW, QWTotal 425 498 *Study conducted by AstellasQW = weekly; BIW = two times per week; TIW = three times per weekSafety SummaryIn 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 studiedroxadustat in over 11,000 patients globally. The preliminary Phase 3 safety analyses reported have shown an overall safety profile consistent with the resultsobserved in prior roxadustat studies. The adverse events reported are consistent with those expected in these study populations with similar backgrounddiseases. The pooled safety analyses, including MACE for CKD in both non-dialysis and dialysis populations in the U.S. and EU Phase 3 programs, areanticipated to be completed in the second quarter of 2019. ROXADUSTAT FOR THE TREATMENT OF ANEMIA IN CHRONIC KIDNEY DISEASE IN CHINARoxadustat received NDA approval in December 2018 from the NMPA for the treatment of anemia caused by CKD in dialysis patients. Roxadustat is the firstHIF-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 approvalcountry 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 therapidly growing population of dialysis patients. In the non-dialysis population, only a small percentage of patients receive anemia treatment, and those whodo receive only a minimal level, including patients who are eligible for dialysis and are severely anemic. In the context of the rapidly growing Chinesepharmaceutical market, we believe that the demand for anemia therapy will continue to grow as a result of an expanding CKD population, as well as thecentral government’s mandate to make dialysis, which is still in the early stages of infrastructure development, more available through expansion ofgovernment reimbursement and build-out of dialysis facilities. The Chinese government has also put pharmaceutical innovation as a top priority for thecountry. As the standard of living improves in China, the demand for access to innovative drugs increases. In this context, we believe that roxadustat is aparticularly 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 andcompletion 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 DomesticClass 1 innovative drugs.14 Phase 3 Studies in ChinaIn 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 PatientsIn 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 wererandomized 2:1 to receive roxadustat (n=101) or placebo (n=50). Roxadustat met its primary efficacy endpoint of correcting anemia, by achieving astatistically significant increase in hemoglobin levels compared to placebo over eight weeks. Furthermore, the secondary endpoint of hemoglobin responsewas 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 inhemoglobin 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. placebopatients, 84.2% compared to 0.0% (p<0.000000000000001). Sixty-seven percent of the roxadustat-treated patients vs 6% of placebo- patients achievedhemoglobin 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)15 After Week eight, placebo patients were converted to roxadustat treatment and patients originally in the roxadustat arm continued treatment through Week26. 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 toRoxadustatIn 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 correctionwith 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 roxadustattreatment, 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 statisticallysignificant increase (p <0.0001). Hemoglobin levels declined after Week 27 when patients were no longer receiving roxadustat, as illustrated by the figureabove.In the 26-week portion of this non-dialysis study, roxadustat was shown to increase hemoglobin regardless of baseline inflammation status: both in patientswith 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-weeksafety extension of this non-dialysis China Phase 3 study. Approximately 95% of the non-dialysis patients who completed the 52-week safety extensionperiod 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 roxadustatpatients 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 ironparameter (ferritin or TSAT) requirement for patients at study entry.Study 4592-806: 26-Week Maintenance in China Dialysis-Dependent CKD PatientsIn the Phase 3 CKD study, 304 patients (271 hemodialysis and 33 peritoneal dialysis patients) previously on epoetin alfa were randomized to and treatedwith 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 ChinaPharmaceutical Co., Ltd. (“Kirin EPO”) and 93% of patients were treated with one of eight other brands of EPO commercially available in China. All thepatients 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 meanhemoglobin 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 LSMean hemoglobin change in the two treatment arms, p=0.037, in PPS analysis; baseline hemoglobin was 10.4 g/dL in both treatment arms.16 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 bypatients 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 maintainedhemoglobin 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 thosereceived by the patients without inflammation. In contrast, patients with inflammation in the Kirin EPO arm realized lower hemoglobin levels than patientswith normal CRP levels (despite receiving higher doses of EPO than patients without inflammation), reflecting roxadustat’s potential to overcome thehyporesponsiveness seen in ESA treatment, as discussed in the section above titled “Limitations of the Current Standard of Care for Anemia in CKD”. Thetwo figures below show mean change in hemoglobin with mean patient dose, and mean hemoglobin levels with mean patient dose, in patients with andwithout inflammation.FGCL-4592-806: Mean (+/- SE) Change in Hemoglobin (Hb) from Baseline andMean (+/- SE) Dose for Patients with and without Inflammation 17 FGCL-4592-806: Mean (+/- SE) Hemoglobin (Hb) andMean (+/- SE) Dose for Patients with and without InflammationOne hundred and twelve roxadustat patients continued treatment in a safety extension study for a total of 52 weeks. Approximately 96% of the dialysispatients 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 3studies 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 was30.2 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 endof 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 safetyextension periods. There were no study drug-related deaths. The AEs and SAEs reported in the Phase 3 studies were generally representative of the underlyingpatient population and associated co-morbidities. Treatment of anemia with roxadustat in these Phase 3 clinical trials did not lead to an increase in bloodpressure.China Phase 2 StudiesWe 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, hemoglobincorrection in non-dialysis CKD patients and hemoglobin maintenance in dialysis CKD patients replicated the results seen in the U.S. trials. SAEs wereprogression 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 witheither placebo (study 047) or epoetin alfa control (study 048) groups.18 Market OpportunityAddressable Patient Populations in ChinaBased 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 notdialyzed (“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 CKDBased on the latest estimates and published data, we believe there are approximately 600,000 dialysis patients in China, making it the largest dialysispopulation 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 onhemodialysis. Hemodialysis is performed primarily in dialysis clinics within hospitals, most of which are publicly owned. This is in contrast to the U.S. wherefreestanding dialysis centers located outside of hospitals is common practice. With recent regulatory changes, the number of privately owned dialysis clinicsis 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 peritonealdialysis, which is self-administered at home by patients. Peritoneal dialysis patients typically visit their nephrologists on a monthly basis at the hospital formonitoring 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-CKDDialysis-Eligible NDD-CKD refers to patients who need dialysis under Chinese treatment guidelines but are not dialyzed. The Chinese treatment guidelinesrecommend 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 growingrapidly, it nevertheless falls far short of the number who require dialysis treatment. We believe that this Dialysis-Eligible NDD-CKD population ischaracteristic of developing markets like China and at risk for severe anemia. The prevalence rate of anemia (defined as Hb <12) in this population in Chinais estimated to be approximately 90%.Other NDD-CKDOther 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 5who are not eligible for dialysis. As with the Dialysis-Eligible NDD-CKD population, the Other NDD-CKD population is largely untreated with ESAs. Someof these patients receive medical care in endocrinology, cardiology or internal medicine clinics outside of nephrology, where they are treated for theirprimary 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 approximately50% for Stage 3 and 80% for Stage 4.Unmet Medical Need and Roxadustat DifferentiationAnemia is considered a risk multiplier for CKD patients and is commonly associated with increased rates of cardiovascular events, hospitalizations, CKDprogression, and death. Several of the advantages that roxadustat, our oral therapeutic, potentially offers over ESAs are particularly suited to address theunmet 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 guidelinespublished 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% ofhemodialysis CKD patients, and approximately 60% of peritoneal dialysis CKD patients are treated with ESAs, based on the Chinese Renal Data System in2015, less than 60% of dialysis patients reached 10.2 g/dL.19 We believe many of the factors that lead to under-treatment of anemia can be overcome with rsoxadustat: •The use of IV iron is often needed for ESAs to correct hemoglobin levels, due to functional or actual iron deficiency. However IV iron is also oftenunder-prescribed because of limited reimbursement and the clinical risk associated with IV iron supplementation. Regardless of baseline ironconditions in patients, we have shown in our China Phase 3 data that roxadustat can achieve target hemoglobin rates without routine IV ironsupplementation, due in part to roxadustat’s ability to decrease hepcidin and make use of endogenous stores of iron or oral iron supplements.Therefore, for any patients not achieving target hemoglobin levels due to lack of available iron, roxadustat may be able to overcome these irondeficiencies better than ESAs. •Incident dialysis patients and patients who have chronic inflammation are often hyporesponsive to ESAs, and are not able to achieve correctedhemoglobin levels at normal ESA doses. Phase 3 clinical data suggest that roxadustat can treat inflammed patients to target hemoglobin levelswithout use of higher doses. •In addition to the issues outlined above for dialysis patients, the peritoneal dialysis population, who generally receives dialysis treatment at home,and the Dialysis-Eligible NDD-CKD patients, who are generally untreated, face the same logistical issues that impede ESA use in the Other NDD-CKD population. Roxadustat, as an oral medication, can be easily administered in any setting and stored at room temperature. Injectable drugs likeESAs present a challenge in China because even subcutaneous administration is performed at hospitals and not in the home, in part due to thedifficulty in refrigeration and administration of injectable medicines. Frequent hospital visits, for the sole purpose of receiving injectable ESAtreatment (as well as IV iron, which is often necessary with ESA treatment), can present a substantial logistical and financial burden on patients.Current ESA Market Size and Drivers of Market Growth in ChinaChina 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, isderived 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. •Expansion of Reimbursement. Reimbursement exists for the use of ESAs in the treatment of anemia in CKD and the coverage levels have expandedsubstantially in the past decade. We expect the availability of Severe Disease reimbursement to significantly drive the utilization of dialysisservices (including anemia therapies) in the coming years. •Expansion of Dialysis-Dependent CKD Population and Investment in Dialysis Infrastructure. We believe the number of CKD patients on dialysisincreased from approximately 275,000 in 2011 to approximately 500,000 in 2016 and has grown at a compound annual growth rate of 13% peryear from 2011 to 2016. With this substantial rate of growth, the Ministry of Health and the Chinese Society of Nephrology have publiclyrecognized the need for further investment in dialysis infrastructure. Peritoneal dialysis is an alternative to hemodialysis and does not require thelevel of capital investment in facilities and equipment that is necessary to enable hemodialysis. •Demographics-Driven Growth. Diabetes and hypertension are common causes of CKD, the rates of which have been growing in China over pasttwo decades. China is experiencing epidemiological changes in metabolic diseases due to economic development, urbanization and an agingpopulation. We believe the increase in diabetes and hypertension prevalence will also result in an increase of CKD patients.CommercializationAstraZeneca is our commercialization partner for roxadustat in China. Under our collaboration agreement, AstraZeneca will lead commercialization and hasresponsibility for marketing, market access, and sales. FibroGen has responsibility for medical affairs, manufacturing (as the Marketing AuthorizationHolder), and pharmacovigilance. FibroGen and AstraZeneca will work together to manage distribution.20 PricingAstraZeneca and FibroGen have been working closely to determine pricing (both for self-pay and reimbursement) that reflects the value proposition ofroxadustat, including the differentiation of roxadustat in efficacy and other clinical outcomes, lack of routine IV iron supplementation, convenience againstcurrent standard of care, cost effectiveness, and affordability.ReimbursementWe 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 underone government-funded medical reimbursement plan or another, each with different levels of reimbursement. Commercial health insurance is available but isminimally 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-CKDtreatment 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 anegotiated 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 pricedetermined by the company. We believe the self-pay market in China is expanding, given the rise in personal income levels in the country. Nevertheless, asroxadustat could potentially address an unmet medical need for a much larger number of patients in China, securing reimbursement from the government isexpected 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 NRDLprice negotiations in 2018 for oncology drugs. Admission to the NRDL depends on a number of factors, including on-market experience, scale of patientadoption, physician endorsement, cost effectiveness and budget impact. Given that roxadustat was approved at the end of 2018, we may or may not qualifyfor the NRDL update in 2019. Provincial governments have some discretion to add roxadustat to provincial reimbursement drug lists. With or without beinglisted on the NRDL, we can apply for inclusion in the provincial reimbursement drug lists of selected provinces, which may take months, depending on theprovince.Hospital ListingGovernment 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 along 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 hospitalsalso have temporary listing procedures that can accelerate timing. Private hospital and non-hospital pharmacies, which represent a small minority of the drugmarket in China, do not require a formulary process to sell a drug. While the opportunity for roxadustat remains significant, given these market accesschallenges, the rate of market uptake for a drug is typically modest in China.TenderingProvincial and municipal government agencies will establish a provincial drug procurement agency to operate a mandatory collective tender process forpurchases by government hospitals of a medicine included in provincial or local medicine procurement catalogs. The provincial or local medicineprocurement 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 mustparticipate in collective tender processes for the purchase of roxadustat. During the collective tender process, the provincial drug procurement agency willestablish a committee consisting of recognized pharmaceutical experts. The committee will assess the bids submitted by the various participatingpharmaceutical manufacturers, taking into consideration, among other things, the quality and price of the drug product and the service and reputation of themanufacturer. Only drug products that have been selected in the collective tender processes may be purchased by participating hospitals. If we are unable towin purchase contracts through the collective tender processes in which we decide to participate, there will be limited demand for roxadustat, and salesrevenues from roxadustat will be materially and adversely affected.21 ROXADUSTAT FOR THE TREATMENT OF ANEMIA IN CHRONIC KIDNEY DISEASE IN JAPANDialysis-Dependent CKD Patients in JapanIn September 2018, Astellas submitted an NDA in Japan for roxadustat for the treatment of anemia in CKD patients on dialysis based on positive results fromfour 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 studiesare as follows:Phase 3 Study 1517-CL-0307: Double-Blind Study in HemodialysisIn 2018, Astellas and FibroGen reported results from Astellas’ Phase 3 study of roxadustat in 303 CKD hemodialysis patients with anemia. Averagehemoglobin levels were effectively maintained at 10.99 g/dL during Weeks 18 to 24 in roxadustat-treated hemodialysis patients who had previously beentreated 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 inthe roxadustat-treated group and darbepoetin-treated group, respectively. The non-inferiority of roxadustat to darbepoetin alfa in change of averagehemoglobin 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/dLduring Weeks 18 to 24) was 79% in roxadustat-treated patients and 83% in patients in the darbepoetin alfa arm. The hemoglobin maintenance rate of patientswith at least one hemoglobin value during Weeks 18-24 was 95% in the roxadustat arm and 91% in the darbepetin alfa arm. Among patients takingroxadustat, serum iron, ferritin, and TSAT were clinically stable; and transferrin and TIBC increased through Week 4 and then remained stable. No remarkablechanges 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 andnon-dialysis patients.Phase 3 Study 1517-CL-0302: Open-Label Study in Peritoneal Dialysis PatientsIn 2017, Astellas and FibroGen reported results from Astellas’ multi-center, open-label Phase 3 study of roxadustat in peritoneal dialysis CKD patients withanemia. 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-naïvepatients 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/dLduring 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 onehemoglobin value during Weeks 18 to 24 was 92% in ESA-naïve patients and 87% in ESA-conversion patients. The mean of average hemoglobin levelsreached 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 frombaseline 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 safetyanalysis 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 PatientsIn 2018, Astellas completed its 24-week long multi-center, open-label, randomized, non-comparator Phase 3 study of roxadustat in 75 CKD ESA-naïvehemodialysis patients with anemia. The hemoglobin response rate at the end of treatment (defined as the proportion of patients who achieved a hemoglobinlevel ≥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.22 Phase 3 Study 1517-CL-0312: Open-Label ESA-Conversion Study in HemodialysisIn 2018, Astellas completed its 52-week, multi-center, open-label, non-comparator Phase 3 study of roxadustat in 164 CKD hemodialysis patients withanemia. This study was an ESA-conversion study. The hemoglobin maintenance rate (defined as the proportion of patients who achieved an average targethemoglobin 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 JapanOur 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 abasis for a supplemental NDA for the treatment of anemia in non-dialysis CKD patients.Status with Regulatory AgenciesChinaRoxadustat received NDA approval in December 2018 from the NMPA for the treatment of anemia caused by CKD in dialysis patients. In doing so, Chinabecame 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 roxadustatlabel in mid-2019 pending scheduling and completion of the standard Phase 3 clinical site inspections by the CFDI.JapanIn September 2018, Astellas submitted an NDA on roxadustat for the treatment of anemia in CKD patients on dialysis. Astellas plans to submit an NDA foranemia for CKD patients not on dialysis upon completion of both non-dialysis CKD Phase 3 studies in Japan.U.S. and EuropeIn conjunction with our collaboration partners, we have completed the Phase 3 trials of roxadustat intended to support marketing authorization applicationsin 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 forsubmission to the EMA in 2019.Investigational New Drug and Clinical Trial ApplicationsRoxadustat is being studied under one Investigational New Drug Application (“IND”), and several Clinical Trial Applications (“CTAs”), all with a specifiedindication 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 in2017.ROXADUSTAT FOR THE TREATMENT OF ANEMIA ASSOCIATED WITH MYELODYSPLASTIC SYNDROMESBased 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 otherconditions, including MDS.Background of Anemia in MDSMDS 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 ofother 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 yetwell understood, and may be greatly underestimated, possibly due to under reporting and under diagnosis. MDS diagnosis became reportable under theWorld Health Organization oncology classification system only in 2001. The23 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 from3.3/100,000 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 amongthose 80 years of age and older. The population-based registries are believed to have underestimated the incidence of MDS due to under diagnosis. It hasbeen 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 andpatients 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 theU.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 significantimpairment of the quality of life in affected patients. Dependency on red blood cell transfusions is associated with shorter life expectancy in patients withMDS.Limitations of the Current Standard of Care for MDS and Anemia Associated with MDSAs a bone marrow disorder MDS patients often rely on repeated blood transfusions. Currently, there is no drug approved for the treatment of anemia in MDSpatients 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 eligiblefor bone marrow transplant. For these patients, treatment is often delayed until the disease progresses because of the known risks associated withtransplantation 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 anddecitabine which are typically used for treating intermediate or higher risk patients (based on the International Prognostic Scoring System). Further, thesetherapies are not approved for lower risk MDS patients because of their significant undesirable effects on bone marrow. These hypomethylating agents canachieve remission in a minority of the treated patients for a short duration of time before progression to acute myeloid leukemia, and are associated withsignificant 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 beendeleted 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, treatmentwith 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 MDSpatients 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, andthe 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 toinflammation, which contributes to ESA-resistance and elevated hepcidin levels, functional iron deficiency, and the underlying progressive dysfunction ofthe bone marrow. Patients who initially respond to ESAs generally will develop resistance as their MDS progresses and become dependent on bloodtransfusions.24 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 <9.0g/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 bloodsupply. Frequent red blood cell transfusions impose both financial and time burdens on patients and payors since frequent visits to the hospital for bloodtests and transfusions are required. More importantly, transfusions are associated with risk of development of alloantibodies, which is related to the number ofprior transfusions, and the transmission of infectious agents, a particular concern in MDS patients who may have neutropenia and compromised immunesystems. 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 anegative impact on clonal evolution and on hematopoietic stem cell therapy outcome. Iron overload from red blood cell transfusions is thought to beinhibitory 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 toone‑year discontinuation rate of iron chelator as high as 49%. Given these risk factors, red blood cell transfusion dependency is a strong non-favorableprognostic 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 damagingother organ systems due to insufficient oxygen delivery to tissues. When red blood cell transfusions become necessary to sustain bodily functions, the risk oftransfusion-related complications can further threaten MDS patients’ lives and well-being.Our SolutionWe believe there is a significant need for a safer, more effective, and more convenient approach to address anemia in patients with lower-risk MDS.Roxadustat, our orally administered small molecule HIF-PH inhibitor, stimulates the body’s natural mechanism of red blood cell production and ironhemostasis based on cellular-level oxygen-sensing and iron-regulation mechanisms. Roxadustat activates a coordinated erythropoietic response in the bodythat includes the stimulation of red blood cell progenitors, an increase in the body’s production of endogenous EPO, and an increase in iron availability forhemoglobin synthesis. Moreover, in anemia of CKD, roxadustat has demonstrated the ability in clinical trials to increase and maintain hemoglobin levels inthe presence of inflammation as measured by C-reactive protein, where ESAs have shown limited effect. We believe that we may be able to replicate thisresult in MDS anemia patients, where it is not uncommon for patients to present with autoimmune and inflammatory conditions.Clinical Development of Roxadustat in MDSWe are conducting a Phase 3 clinical trial to evaluate the safety and efficacy of roxadustat for treatment of anemia in MDS in the U.S. and Europe. This is amulti-center Phase 3 study in transfusion-dependent, lower risk MDS patients with up to 24 patients in the open-label, lead-in portion of the trial, followed bythe 160-patient randomized, double-blind, placebo-controlled part of the study, in which subjects will be randomized 3:2 to receive roxadustat or placebothree-times-weekly for 28 weeks, with safety extension to one year. The primary endpoint is the proportion of patients who achieve transfusionindependence.In China, we are conducting a Phase 2/3 clinical trial to evaluate the safety and efficacy of roxadustat in non-transfusion dependent, lower risk MDS patientswith anemia. The initial open-label portion of the study will enroll up to 40 patients, followed by135 patients planned for the randomized, double-blind,placebo-controlled Phase 3 portion of the study, in which subjects will be randomized 2:1 to receive roxadustat or placebo three-times weekly for 26 weeks.The primary endpoint for this study is percentage of patients achieving a hemoglobin response.We plan on reporting data from the open-label components of both MDS studies in 2019, and after review of the U.S. open-label data, we and our partnerswill advance to the double-blind portion of the U.S. transfusion-dependent Phase 3 MDS study.HIF-PH Inhibitor PlatformWe have been a world leader in prolyl hydroxylase inhibition since the mid-nineties. Over the past two decades, we have built a robust drug discoveryplatform based on our deep understanding of the inhibition of prolyl hydroxylase enzymes using small molecules. Our platform is supported by internalproprietary research and numerous academic collaborations, including a long-standing funded collaboration with a research group at the University of Oulu,Finland, headed for many years by our scientific co-founder, Kari I. Kivirikko, M.D., Ph.D. Dr. Kivirikko is one of the world’s leading experts in collagenprolyl hydroxylases, and he remains an advisor to us.25 Prior to the discovery of HIF regulation by prolyl hydroxylase activity, we acquired compound collections from several pharmaceutical companies andassembled a diverse library of prolyl hydroxylase inhibitors to target collagen prolyl hydroxylase enzymes for fibrosis. Consequently, we were particularlywell positioned to rapidly generate proof-of-concept for a number of aspects of HIF biology, and to direct medicinal chemistry efforts towards increasingpotency and selectivity for the newly identified HIF-PH enzymes.We have applied our expertise in the field of HIF-PH inhibition to develop an understanding, not only of the role of HIF in erythropoiesis, but also of otherareas of HIF biology with important therapeutic implications. This consistent progression of discovery has led to findings relating to HIF-mediated effectsassociated with inflammatory pathways, various aspects of iron metabolism, insulin sensitivity and glucose and fat metabolism, neurological disease, andstroke. The extensive patent portfolio covering our discoveries represents an important competitive advantage.The strength of our platform capitalizes on these internal discoveries, as well as some of the complexities of HIF biology that we and the scientificcommunity have uncovered over the past decades. There are at least three different HIF-PH enzymes that are known to regulate the stability of HIF — theseenzymes are commonly referred to in the scientific literature as PHD1, PHD2 and PHD3. Studies of genetically modified mice, in which the individual HIF-PHenzymes have been deleted, have revealed that PHD2 plays a major role in the regulation of erythropoiesis by HIF. In contrast, PHD1 and PHD3 appear toplay less important roles in HIF-mediated erythropoiesis, but instead have been implicated in other important biological pathways.We believe that inhibitors selectively targeting certain prolyl hydroxylases could have important therapeutic applications beyond anemia. For example, asPHD1 has been implicated in ischemic tissue injury, it has been proposed that PHD1 inhibitors may provide a novel therapeutic approach to protect organsand tissues from ischemic damage. PHD3 on the other hand has been implicated in insulin signaling, raising the possibility that PHD3 inhibitors may havetherapeutic utility in the treatment of diabetes. Despite the challenges associated with selectively inhibiting just one enzyme from a closely related family,we have made important advances in the identification of selective HIF-PH inhibitors.We currently have active research programs focused on exploring the therapeutic utility of selective prolyl hydroxylase inhibitors.PAMREVLUMAB FOR THE TREATMENT OF FIBROSIS AND CANCERWe were founded to discover and develop therapeutics for fibrosis and began studying CTGF shortly after its discovery. Our accumulated discovery researchefforts indicate that CTGF is a critical common element in the progression of serious diseases associated with fibrosis.From our library of human monoclonal antibodies that bind to different parts of the CTGF protein and block various aspects of CTGF biological activity, weselected pamrevlumab, for which we have exclusive worldwide rights. We believe that pamrevlumab blocks CTGF and inhibits its central role in causingdiseases associated with fibrosis. Our data to date indicate that pamrevlumab is a promising and highly differentiated product candidate with broad potentialto treat a number of fibrotic diseases and cancers.We are currently conducting Phase 2 trials in pancreatic cancer and DMD and plan on initiating Phase 3 studies in pancreatic cancer and IPF in the secondquarter of 2019. We have reported results from our Phase 2 trials in IPF and pancreatic cancer, and plan on initiating our Phase 3 studies in pancreatic cancerand IPF in the second quarter of 2019. Pamrevlumab has received orphan drug designation for IPF and Fast Track designation for the treatment of both IPFpatients and patients with locally advanced unresectable pancreatic cancer from the FDA.26 Overview of FibrosisFibrosis is an aberrant response of the body to tissue injury that may be caused by trauma, inflammation, infection, cell injury, or cancer. The normal responseto injury involves the activation of cells that produce collagen and other components of the extracellular matrix (“ECM”) that are part of the healing process.This healing process helps to fill in tissue voids created by the injury or damage, segregate infections or cancer, and provide strength to the recovering tissue.Under normal circumstances, where the cause of the tissue injury is limited, the scarring process is self-limited and the scar resolves to approximate normaltissue architecture. However, in certain disease states, this process is prolonged and excessive and results in progressive tissue scarring, or fibrosis, which cancause organ dysfunction and failure as well as, in the case of certain cancers, promote cancer progression.Excess CTGF Causes Fibrosis. Pamrevlumab Blocks CTGF and Can Reverse FibrosisExcess CTGF levels are associated with fibrosis. CTGF increases the abundance of myofibroblasts, a cell type that drives wound healing, and stimulates themto deposit ECM proteins such as collagen at the site of tissue injury. In the case of normal healing of a limited tissue injury, myofibroblasts eventually die byprogrammed cell death, or apoptosis, and the fibrous scarring process recedes. In fibrotic conditions, excess CTGF results in chronic activation ofmyofibroblasts, which leads to chronic ECM deposition and fibrosis (refer to figure above).27 Multiple biological agents and pathways have been implicated in the fibrotic process (Wynn J Pathol (2008)). Many fibrosis pathways converge on CTGF(refer to figure below), which the scientific literature demonstrates to be a central mediator of fibrosis (Oliver et al., J Inv Derm (2010)). In the case of cancer,the sustained tumor-associated fibrotic tissue promotes tumor cell survival and metastasis. The figure below shows the commonality of cellular mechanismsthat may result in fibrosis and cancer.Most Biological Factors Implicated in Fibrosis Work Through CTGFCTGF is a secreted glycoprotein produced by fibroblasts, endothelium, mesangial cells and other cell types, including cancers, and is induced by a variety ofregulatory modulators, including TGF-ß and VEGF. CTGF expression has been demonstrated to be up-regulated in fibrotic tissues. Thus, we believe thattargeting CTGF to block or inhibit its activity could stop or reverse tissue fibrosis. In addition, since CTGF is implicated in nearly all forms of fibrosis, webelieve pamrevlumab has the potential to provide clinical benefit in a wide range of clinical indications that are characterized by fibrosis.Until recently, it was believed that fibrosis was an irreversible process. It is now generally understood that the process is dynamic and potentially amenable toreversal. Based on studies in animal models of fibrosis of the liver, kidney, muscle and cardiovascular system, it has been shown that fibrosis can be reversed.It has also been demonstrated in humans that fibrosis caused by hepatitis virus can be reversed (Chang et al. Hepatology (2010)). Additionally, we havegenerated data in human and animal studies that lung fibrosis progression can be slowed, arrested, or possibly reversed in some instances upon treatment withpamrevlumab. We do not believe that there is clinical evidence that therapies currently on the market directly prevent or reverse fibrosis in IPF.While certain other companies are working on topical inhibition of CTGF, we are not aware of other products in development that target CTGF inhibition fordeep organ fibrosis and cancer.Clinical Development of Pamrevlumab — OverviewWe have performed clinical trials of pamrevlumab in IPF, pancreatic cancer, liver fibrosis and diabetic kidney disease. In eleven Phase 1 and Phase 2 clinicalstudies involving pamrevlumab to date, including more than 450 patients who were treated with pamrevlumab (about half of patients dosed for more thansix months), pamrevlumab has been well-tolerated across the range of doses studied, and there have been no dose-limiting toxicities seen thus far. Idiopathic Pulmonary FibrosisUnderstanding IPF and the Limitations of Current TherapiesIPF is a form of progressive pulmonary fibrosis, or abnormal scarring, which destroys the structure and function of the lungs. As tissue scarring progresses inthe lungs, transfer of oxygen into the bloodstream is increasingly impaired. Average life expectancy at the time of confirmed diagnosis of IPF is estimated tobe between three to five years, with approximately two-thirds of patients dying within five years of diagnosis. Thus, the survival rates are comparable to someof the most deadly cancers. The cause of IPF is unknown but is believed to be related to unregulated cycles of injury, inflammation and fibrosis.28 Patients with IPF experience debilitating symptoms, including shortness of breath and difficulty performing routine functions, such as walking and talking.Other symptoms include chronic dry, hacking cough, fatigue, weakness, discomfort in the chest, loss of appetite, and weight loss. Over the last decade,refinements in diagnosis criteria and enhancements in high-resolution computed tomography imaging technology (“quantitative HRCT”) have enabled morereliable diagnosis of IPF without the need for a lung biopsy more clear distinction from other interstitial lung diseases.The U.S. prevalence and incidence of IPF are estimated to be 44,000 to 135,000 cases, and 21,000 new cases per year, respectively, based on Raghu et al. (AmJ Respir Crit Care Med (2006)) and on data from the United Nations Population Division. We believe that with the availability of technology to enable moreaccurate diagnoses, the number of individuals diagnosed per year with IPF will continue to increase.There are currently two therapies approved to treat IPF in Europe and the U.S., pirfenidone and nintedanib. The approvals and subsequent launches ofpirfenidone and nintedanib have clearly shown the commercial potential in IPF. Hoffmann-La Roche (“Roche”) reported worldwide sales of pirfenidone for2017 of approximately $930 million, and approximately $1.01 billion for 2018. Similarly, Boehringer Ingelheim Pharma GmbH & Co. KG (“BoehringerIngelheim”) reported total sales of approximately $1.03 billion for nintedanib in 2017, and approximately $643 million in the first half of 2018.In clinical trials, we have used advanced medical imaging technology to quantify changes in fibrosis throughout the lungs. Our data to date using thesemeasures demonstrate that pamrevlumab may stabilize and in some instances reverse pulmonary fibrosis (as measured by HRCT) and improve pulmonaryfunction in IPF patients.Phase 3 Clinical Development – Randomized, Double-Blind, Placebo-Controlled Trial of Pamrevlumab in IPFWe plan to begin enrolling our double-blind, placebo-controlled Phase 3 trial of pamrevlumab in the second quarter of 2019. The trial will randomize (3:2)approximately 500 IPF patients (who are not being treated during the study with approved therapies) to either pamrevlumab or placebo. This study ispowered to meet the FDA requirement of a highly statistically-significant result in the primary efficacy endpoint of change from baseline in forced vitalcapacity (“FVC”). Secondary endpoints will include clinical outcomes of disease progression, patient reported outcomes, and quantitative changes in lungfibrosis volume from baseline.Study 067 – Randomized, Double-Blind, Placebo-Controlled Phase 2 Trial of Pamrevlumab in IPFIn August 2017, we reported positive topline results from our randomized, double-blind, placebo-controlled Phase 2 clinical trial (Study 067) designed toevaluate the safety and efficacy of pamrevlumab in patients with mild-to-moderate IPF (baseline FVC percentage predicted of 55%), as well as topline resultsfrom two sub-studies that were added to evaluate the safety of combining pamrevlumab with recently approved IPF therapies.In the double-blind, placebo-controlled 48-week portion of this study, one hundred-three (103) patients were randomized (1:1) to receive either 30mg/kg ofpamrevlumab or placebo intravenously every three weeks. Lung function assessments were conducted at baseline and at Weeks 12, 24, 36 and 48.Quantitative HRCT assessments were performed at baseline and on Weeks 24 and 48.Pamrevlumab met the primary efficacy endpoint of change of FVC percent predicted, a measure of a patient’s lung volume as a percentage of what would beexpected for such patient’s age, race, sex and height. The average decline (least squares mean) in FVC percent predicted from baseline to Week 48 was 2.85 inthe pamrevlumab arm (n=50) as compared to an average decline of 7.17 in the placebo arm (n=51), a statistically significant difference of 4.33 (p=0.0331,using a linear slope analysis in the Intent to Treat (“ITT”) population).Pamrevlumab-treated patients had an average decrease (least squares mean) in FVC of 129 ml at Week 48 compared to an average decrease of 308 ml inpatients receiving placebo, a statistically significant difference of 178 ml (p=0.0249, using a linear slope analysis in the ITT population). This represents a57.9% relative difference. In addition, the pamrevlumab-treated arm had a lower proportion of patients (10%) who experienced disease progression (definedby a decline in FVC percent predicted of greater than or equal to 10%) or death, than did the placebo arm (31.4%) at Week 48 (p=0.0103). The percentage ofpamrevlumab patients who experienced disease progression and discontinued therapy was less than 15% of that in the placebo arm.In this study, we measured change in quantitative lung fibrosis from baseline to Week 24 and Week 48 using quantitative HRCT. The pamrevlumab armachieved a statistically significant reduction in the rate of progression of lung fibrosis compared to placebo using HRCT to measure quantitative lung fibrosis(“QLF”). The change in QLF volume from baseline to Week 24 for pamrevlumab-treated patients was 24.8 ml vs. 86.4 ml for placebo, with a treatmentdifference of -61.6 ml, p=0.009. The change in QLF volume from baseline to 48 weeks was 75.4 ml in pamrevlumab-treated patients vs. 151.5 ml in patientson placebo, with a treatment difference of -76.2 ml, p=0.038.29 As in our previous open label Phase 2 study, a correlation between FVC percent predicted and quantitative lung fibrosis was confirmed at both Week 24 and48 in this study.We are not aware of any other IPF therapies that have shown a statistically significant effect on lung fibrosis as measured by quantitative HRCT analysis.The treatment effects of pamrevlumab were demonstrated not only on change in FVC, a measure of pulmonary function and IPF disease progression, andchange in fibrosis using quantitative HRCT, but pamrevlumab-treated patients also showed a trend of clinically meaningful improvement in a measure ofhealth-related quality of life using the St. George’s Respiratory Questionnaire (SGRQ) vs. a reduction in quality of life seen in placebo patients over the 48weeks of treatment. The SGRQ quality of life measurement has been validated in chronic obstructive pulmonary disease. In the patients that were evaluatedby the UCSD Shortness of Breath Questionnaire, pamrevlumab-treated patients had a significant attenuation of their worsening dyspnea in comparison toplacebo.Pamrevlumab was well-tolerated in the placebo-controlled study. The TEAEs were comparable between the pamrevlumab and placebo arms and the adverseevents in the pamrevlumab arm were consistent with the known safety profile of pamrevlumab. In this study, as compared with the placebo group, fewerpamrevlumab patients were hospitalized, following an IPF-related or respiratory TEAE, or died for any reason.The double-blind, active-controlled combination sub-studies were designed to assess the safety of combining pamrevlumab with standard of care medicationin IPF patients. Study subjects were on stable doses of pirfenidone or nintedanib for at least three months and were randomized 2:1 to receive 30 mg/kg ofpamrevlumab or placebo every three weeks for 24 weeks. Thirty-six patients were enrolled in the pirfenidone sub-study and 21 patients were enrolled in thenintedanib sub-study. Pamrevlumab appeared to be well-tolerated when given in combination with either pirfenidone or nintedanib.Study 049 – Open-Label Phase 2 Trial of Pamrevlumab in IPFWe completed an open-label extension of Study 049, a Phase 2 open-label, dose-escalation study to evaluate the safety, tolerability, and efficacy ofpamrevlumab in 89 patients with IPF. During the initial one-year treatment period, pamrevlumab was administered at a dose of 15 mg/kg in Cohort 1(53 patients) and 30 mg/kg in Cohort 2 (36 patients) by IV infusion every three weeks for 45 weeks. After 45 weeks of dosing, subjects whose FVC declinedless than predicted were allowed to continue dosing in an extension study until they had disease progression. Nineteen patients from Cohort 1 (35.8%) and18 patients from Cohort 2 (50.0%) entered the extension study. Efficacy endpoints were pulmonary function assessments, extent of pulmonary fibrosis asmeasured by quantitative imaging and measures of health-related quality of life. We presented data from our open-label Phase 2 IPF extension study (049) atthe International Colloquium on Lung and Airway Fibrosis in November 2016, reporting that no safety issues were observed during prolonged treatment withpamrevlumab. Some of the 37 patients who enrolled in the extension study were treated with pamrevlumab for up to five years. Trends regarding improved orstable pulmonary function and stable fibrosis observed during the initial one-year study were also observed in the extension study.In Cohort 1, we enrolled patients with a wide range of disease severity to assess safety and efficacy. Baseline FVC percent predicted for Cohort 1 was 43% to90%, with a mean of 62.8%. In contrast, other IPF clinical trials, such as those for pirfenidone and nintedanib, have enrolled patients who on average hadmild to moderate disease (mean FVC percent predicted 73.1% to 85.5%). Fourteen patients in Cohort 1 withdrew, and ten of the 14 had severe disease.In order to enroll IPF patients similar to those in other IPF trials, we amended the protocol for Cohort 2 to include only patients with mild to moderate disease(FVC ≥ 55% predicted). Baseline FVC percent predicted for Cohort 2 was 53% to 112%, with a mean of 72.7%. Based on this definition of disease severity,37 patients in Cohort 1 and 32 patients in Cohort 2 had mild to moderate disease.30 The table below provides a summary of the observed quantitative change in fibrosis for mild to moderate patients in Cohorts 1 and 2 as measured byquantitative HRCT. Twenty-four percent of these patients had improved fibrosis at Week 48. We believe that this is the first trial to demonstrate a reversal offibrosis (as measured by HRCT) in a subset of IPF patients. Stable fibrosis has been considered the only achievable favorable outcome in IPF. The table belowsets forth the number of patients who showed stable or improved fibrosis at Weeks 24 and 48 compared to the amount of fibrosis at the start of the trial.Changes in Fibrosis in Patients with Mild to Moderate IPF Treated with Pamrevlumab in FGCL-3019-049 Stable or ImprovedCompared to Baseline Improved Compared toBaseline Improved Comparedto Week 24 Week 24 Week 48 Week 24 Week 48 Week 48Cohort 1 21/45(47%) 14/38(37%) 12/45(27%) 12/38(32%) 8/38(21%)Cohort 2 12/29(41%) 9/28(32%) 5/29(17%) 4/28(14%) 8/26(31%)Combined 33/75(44%) 23/66(35%) 17/74(23%) 16/66(24%) 16/64(25%) As we observed in our randomized, double-blind, placebo-controlled Phase 2 clinical trial (Study 067), fibrosis improvement or stabilization in patients withmild to moderate disease as measured as reticular fibrosis by quantitative HRCT correlated with improvement or stabilization of pulmonary functionmeasured by FVC (p<0.0001; r=-0.59 Cohorts 1 and 2 combined). The figure below shows FVC changes up to Week 48 for mild to moderate patients withstable or improved fibrosis (as measured by HRCT) vs. patients with worsening fibrosis. Patients with stable or improved fibrosis showed improvedpulmonary function, on average, which was significantly different or better than patients with worsening fibrosis who showed a substantial decline in FVC(p= 0.0001, Cohorts 1 and 2 combined). Patients with worsening fibrosis had pulmonary function that was similar to the annual decline in pulmonaryfunction for typical IPF patients.Categorical Analysis of FVC Change from Baseline (BL) (mean ±SE) in FGCL-3019-049Eighty-nine patients had at least one adverse event. The most common reported events were cough, fatigue, shortness of breath, upper respiratory tractinfection, sore throat, bronchitis, nausea, dizziness, and urinary tract infection. To date, including the open-label extension, there have been 45 SAEs in 31patients, four of which were considered possibly related by the principal investigator to study treatment. During the first year of treatment there were 38TSAEs in 24 patients. Adverse events observed to date are consistent with typical conditions observed in this patient population.Open-Label Phase 1 Trial of Pamrevlumab in IPFStudy 002 was a Phase 1 open-label study to determine the safety and pharmacokinetics of escalating single doses of pamrevlumab. Patients with a diagnosisof IPF by clinical features and surgical lung biopsy received a single IV dose of pamrevlumab at 1, 3, or 10 mg/kg. A total of 21 patients were enrolled in thestudy; six patients received a dose of 1 mg/kg, nine patients received 3 mg/kg, and six patients received 10 mg/kg. Pamrevlumab was well tolerated acrossthe range of doses studied; and there were no dose-limiting toxicities. TEAE that were considered to be possibly related by the principal investigator topamrevlumab were mild and self-limited, consisting of pyrexia, cough and headache.31 Pancreatic CancerUnderstanding Pancreatic Cancer and the Limitations of Current TherapiesCertain solid malignant tumors have a prominent fibrosis component consisting mostly of ECM that contributes to metastasis and progressive disease. ECMis the connective tissue framework of an organ or tissue.Pancreatic ductal adenocarcinoma, or pancreatic cancer, is the third leading cause of cancer deaths in the U.S. According to the Europe Commission’sEuropean Cancer Information System, there were 100,005 new cases of pancreatic cancer and 95,373 deaths from pancreatic cancer in the EU projected for2018. The National Cancer Center of Japan estimated that there were 36,239 new cases of pancreatic cancer in 2014, increased from 24,442 cases in 2004. Inits report of December 2017, Decision Resources Group estimated that the major market sales (U.S., EU5 and Japan) of pancreatic cancer drugs will grow from$1.3 billion in 2016 to approximately $3.7 billion in 2026. According to the U.S. National Cancer Institute, in 2018, there were approximately 55,000 newcases of pancreatic cancer projected in the U.S. Fifty percent of new cases are metastatic. Another 15-20% have localized resectable tumors. The remaining30-35% have localized but unresectable tumors.For those with non-resectable tumors, median survival is eight to 12 months post-diagnosis, and about 8% realize five years of survival; similar to metastaticcases. For those with resectable tumors, 50% survive 17 to 27 months post-diagnosis and ~20% report five-year survival.Pancreatic cancer is aggressive and typically not diagnosed until it is largely incurable. Most patients are diagnosed after the age of 45, and according to theAmerican Cancer Society, 94% of patients die within five years from diagnosis. The majority of patients are treated with chemotherapy, but pancreatic canceris highly resistant to chemotherapy. Approximately 15% to 20% of patients are treated with surgery; however, even for those with successful surgicalresection, the median survival is approximately two years, with a five year survival rate of 15% to 20% (Neesse et al. Gut (2011)). Radiation treatment may beused for locally advanced diseases, but it is not curative.The duration of effect of approved anti-cancer agents to treat pancreatic cancer is limited. Gemcitabine demonstrated improvement in median overall survivalfrom approximately four to six months, and erlotinib in combination with gemcitabine demonstrated an additional ten days of survival. Nab-paclitaxel incombination with gemcitabine was approved by the FDA in 2013 for the treatment of pancreatic cancer, having demonstrated median survival of 8.5 months.The combination of folinic acid, 5-fluorouracil, irinotecan and oxaliplatin (FOLFIRINOX) was reported to increase survival to 11.1 months from 6.8 monthswith gemcitabine. These drugs illustrate that progress in treatment for pancreatic cancer has been modest, and there remains a need for substantialimprovement in patient survival and quality of life.The approved chemotherapeutic treatments for pancreatic cancer target the cancer cells themselves. Tumors are composed of cancer cells and associated non-cancer tissue, or stroma, of which ECM is a major component. In certain cancers such as pancreatic cancer, both the stroma and tumor cells produce CTGFwhich in turn promotes the proliferation and survival of stromal and tumor cells. CTGF also induces ECM deposition that provides advantageous conditionsfor tumor cell adherence and proliferation, promotes blood vessel formation, or angiogenesis, and promotes metastasis, or tumor cell migration, to other partsof the body.Pancreatic cancers are generally resistant to powerful chemotherapeutic agents, and there is now growing interest in the use of an anti-fibrotic agent todiminish the supportive role of stroma in tumor cell growth and metastasis. The anti-tumor effects observed with pamrevlumab in preclinical models indicatethat it has the potential to inhibit tumor expansion through effects on tumor cell proliferation and apoptosis as well as reduce metastasis.Phase 3 Clinical Development – Randomized, Double-Blind, Placebo-Controlled Trial of Pamrevlumab in Locally Advanced, Unresectable PancreaticCancerWe plan to begin enrolling a double-blind placebo controlled Phase 3 trial of pamrevlumab as a neoadjuvant therapy for pancreatic cancer in the secondquarter of 2019. We intend to enroll approximately 260 patients, randomized 1:1 to receive either pamrevlumab, in combination with gemcitabine and nab-paclitaxel, or chemotherapy with placebo. After completion of the 6-month treatment period, if the results show an improved resection rate in thepamrevlumab arm, we may request a meeting with the FDA to discuss the adequacy of these results to support a marketing application under the provisions ofaccelerated approval. After this interim assessment of resection rates, the study will continue to collect data on overall survival, the primary endpoint.32 Study 069 – Randomized, Open-Label, Active-Controlled Phase 1/2 Trial of Pamrevlumab in Locally Advanced Pancreatic CancerWe continue to follow patients in our ongoing open-label, randomized (2:1) Phase 1/2 trial (FGC004C-3019-069) of pamrevlumab combined withgemcitabine plus nab-paclitaxel chemotherapy vs. the chemotherapy regimen alone in patients with inoperable locally advanced pancreatic cancer that hasnot been previously treated. We enrolled 37 patients in this study and completed the six-month treatment period and surgical assessment at the end of 2017.The overall goal of the trial is to determine whether the pamrevlumab combination can convert inoperable pancreatic cancer to operable, or resectable,cancer. Tumor removal is the only chance for cure of pancreatic cancer, but only approximately 15% to 20% of patients are eligible for surgery.We reported updated results from this ongoing study at the American Society of Clinical Oncology Annual Meeting in June 2018. A higher proportion(70.8%) of pamrevlumab-treated patients whose tumors were previously considered unresectable became eligible for surgical exploration than patients whoreceived chemotherapy alone (15.4%), based on pre-specified eligibility criteria at the end of 6 months of treatment. Furthermore, a higher proportion ofpamrevlumab-treated patients (33.3%) achieved surgical resection than those who received chemotherapy alone (7.7%). In addition, this data showed improved overall survival among patients who were resected vs. not resected (NE vs. 18.56 months, p-value=0.0141) and a trendtoward improved overall survival in patients eligible for surgery vs. patients who were not (27.73 vs. 18.40 months, p-value=0.0766). No increase in seriousadverse events was observed in the pamrevlumab arm and no delay in wound healing was observed post-surgery.Patients with locally advanced unresectable pancreatic cancer have median survival of less than 12 months, only slightly better than patients with metastaticpancreatic cancer, whereas patients with resectable pancreatic cancer have a much better prognosis with median survival of approximately 23 months andsome patients being cured. If pamrevlumab in combination with chemotherapy continues to demonstrate an enhanced rate of conversion from unresectablecancer to resectable cancer, it may support the possibility that pamrevlumab could provide a substantial survival benefit for locally advanced pancreaticcancer patients.Completed Clinical Trials of Pamrevlumab in Pancreatic CancerWe completed an open-label Phase 1/2 (FGCL-MC3019-028) dose finding trial of pamrevlumab combined with gemcitabine plus erlotinib in patients withpreviously untreated locally advanced (stage 3) or metastatic (stage 4) pancreatic cancer. These study results were published in the Journal of CancerClinical Trials (Picozzi et al., J Cancer Clin Trials 2017, 2:123). Treatment continued until progression of the cancer or the patient withdrew for otherreasons. Patients were then followed until death.Seventy-five patients were enrolled in this study with 66 (88%) having stage 4 metastatic cancer. The study demonstrated a dose-related increase in survival.At the lowest doses, no patients survived for even one year while at the highest doses up to 31% of patients survived one year.Effect of Pamrevlumab Dose on One Year Survival in Pancreatic Cancer*QW = weekly; Q2W = two times per week33 A post-hoc analysis found that there was a significant relationship between survival and trough levels of plasma pamrevlumab measured immediately beforethe second dose (Cmin), as illustrated below. Cmin greater than or equal to 150 µg/mL was associated with significantly improved progression-free survival(p=0.01) and overall survival (p=0.03) vs. those patients with Cmin less than 150 µg/mL. For patients with Cmin >150 µg/mL median survival was 9.0months compared to median survival of 4.4 months for patients with Cmin <150 µg/mL. Similarly, 34.2% of patients with Cmin >150 µg/mL survived forlonger than one year compared to 10.8% for patients with Cmin <150 µg/mL. These data suggest that sufficient blockade of CTGF requires pamrevlumabthreshold blood levels of approximately 150 µg/mL in order to improve survival in patients with advanced pancreatic cancer.Increased Pancreatic Cancer Survival Associated with Increased Plasma Levels of PamrevlumabThe Kaplan-Meier plot provides a representation of survival of all patients in the clinical trial. Each vertical drop in the curve represents a recorded event(death) of one or more patients. When a patient’s event cannot be determined either because he or she has withdrawn from the study or because the analysis iscompleted before the event has occurred, that patient is “censored” and denoted by a symbol (●) on the curve at the time of the last reliable assessment of thatpatient.In the study, the majority of adverse events were mild to moderate, and were consistent with those observed for erlotinib plus gemcitabine treatment withoutpamrevlumab. There were 99 TSAEs; six of which were assessed as possibly related by the principal investigator, and 93 as not related to study treatment. Wedid not identify any evolving dose-dependent pattern, and higher doses of pamrevlumab were not associated with higher numbers of SAEs or greater severityof the SAEs observed.Pamrevlumab for Duchenne Muscular DystrophyUnderstanding DMD and the Limitations of Current TherapiesIn the U.S., approximately one in every 5,000 boys have DMD, and approximately 20,000 children are diagnosed with DMD globally each year. There arecurrently no approved disease-modifying treatments. Despite taking steroids to mitigate progressive muscle loss, a majority of children with DMD are non-ambulatory by adolescence, and median survival is age 25.DMD is an inherited disorder of one of the dystrophin genes resulting in absence of the dystrophin protein and abnormal muscle structure and function,leading to progressively diminished mobility as well as pulmonary function and cardiac function which result in early death. Constant myofiber breakdownresults in persistent activation of myofibroblasts and altered production of ECM resulting in extensive fibrosis in skeletal muscles of DMD patients.Desguerre et al. (2009) showed that muscle fibrosis was the only myo-pathologic parameter that significantly correlated with poor motor outcome as assessedby quadriceps muscle strength, manual muscle testing of upper and lower limbs, and age at ambulation loss. Numerous pre-clinical studies including those inthe mdx model of DMD suggest that CTGF contributes to the process by which muscle is replaced by fibrosis and fat and that CTGF may also impair musclecell differentiation during muscle repair after injury.34 Clinical Development of Pamrevlumab for DMDAll 21 non-ambulatory patients from our fully enrolled Phase 2 trial will have completed at least their first year of treatment in March 2019. Some patientsfrom this study have been on treatment for over three years. The primary endpoint is change in pulmonary function as measured by change in FVC, percentpredicted, from baseline. Other endpoints include muscle function, as measured by an upper limb muscle test, and measurement of cardiac function (ejectionfraction measured by magnetic resonance imaging).Other Potential Indications for PamrevlumabWe believe that pamrevlumab has potential to be a treatment for cancers and a broad array of fibrotic disorders, including: •Cancers — melanoma, breast cancer, hepatoma •Liver — non-alcoholic steatohepatitis •Lung — scleroderma lung disease •Radiation induced fibrosis •Muscular dystrophies other than DMD •Kidney — diabetic nephropathy, focal segmental glomerular sclerosis •Cardiovascular system — congestive heart failure, pulmonary arterial hypertensionInvestigational New Drug and Clinical Trial ApplicationsPamrevlumab is being studied in the U.S. for the treatment of IPF under an IND that we submitted to the FDA in August 2003. Pamrevlumab is being studiedin the U.S. for the treatment of locally advanced or metastatic pancreatic cancer under an IND that we submitted to the FDA in September 2004. Pamrevlumabis being studied in the U.S. for the treatment of DMD under an IND that we submitted to the FDA in June 2015.Commercialization Strategy for PamrevlumabOur goal, if pamrevlumab is successful, is to be a leader in the development and commercialization of novel approaches for inhibiting deep organ fibrosis andtreating some forms of cancer. To date, we have retained exclusive worldwide rights for pamrevlumab. We plan to retain commercial rights to pamrevlumab inNorth America and will also continue to evaluate the opportunities to establish co-development partnerships for pamrevlumab as well as commercializationcollaborations for territories outside of North America.FG-5200 FOR THE TREATMENT OF CORNEAL BLINDNESS IN CHINACorneal blindness, defined as visual acuity of 3/60 or less, is caused by various factors, including scarring resulting from infections, such as herpes simplex,physical trauma, chemical injury and genetic diseases affecting the function of the cornea. In countries with sufficient tissue banks and skilled surgeons, thetreatment for corneal blindness is the replacement of the damaged cornea with a corneal graft from donor corneas from human cadavers. Despite use ofimmunosuppressive drugs, graft rejection remains a serious problem, resulting in graft failure within five years in approximately 35% of cases in the U.S. Weare developing FG-5200 for the treatment of corneal blindness resulting from partial thickness corneal damage.In China, there are ethical or religious beliefs, cultural norms and significant infrastructure barriers that limit organ donation or tissue banking possibilities,resulting in an extreme shortage of cadaver corneas. In September 2017, the Chinese State Council issued a regulation banning the importation of humantissue which is expected to further diminish the availability of cadaver corneas for implantation in China. In April 2015, a subsidiary of China RegenerativeMedicine International Limited received approval for their acellular porcine cornea stroma medical device for the indication of repair of corneal ulcers inChina. However, alternatives to cadaver corneas, such as synthetic corneas using collagen derived from porcine tissue or fish scales, are either experimental orto our knowledge, have not yielded satisfactory results for restoration of vision in patients with corneal blindness. In many cases of corneal blindness,infection and other factors lead to serious risks to the patient.35 Market OpportunityApproximately 48,000 corneal grafts were performed in the U.S. in 2017 using tissue from human cadavers. In contrast, while there are approximately four tofive million patients in China with corneal blindness and an incidence of 200,000 cases of corneal blindness each year, there were only approximately10,000 to 12,000 corneal grafts performed in China in 2017 using tissue from human cadavers. We believe the number of corneal grafts using cadaver tissuein China may decrease significantly due to recent changes in government policy.FG-5200 as a Potential Solution to This Unmet Medical NeedFG-5200 Corneal ImplantOur expertise in fibrosis and ECM proteins has allowed us to develop processes for producing human collagen types I, II and III, as well as coordinateexpression of several enzymes involved in assembly of collagen. We have successfully produced a proprietary version of recombinant human collagen IIIthat is suitable for use in cornea repair.FG-5200, a corneal implant medical device we are developing in China, is designed to serve as an immediately functional replacement cornea as well as ascaffold to allow for regeneration of the native corneal tissue for the primary purpose of restoration of vision. In contrast, cadaver graft tissue is never “turnedover”; in fact, only limited integration occurs over the life of the graft. Our FG-5200 implant is made of recombinant human collagen that has been formedinto a highly concentrated fibrillar matrix to provide physical characteristics optimal for corneal implantation.In animal models, FG-5200 allows for native tissue to completely regrow in less than one year, including both epithelium (the outer cell layer of the cornea)and stroma. The stroma in these animal models is seen to be infiltrated with nerve fibers, leading to the reacquisition of the touch response critical to theavoidance of additional corneal damage.Corneal implants using human donor tissue are currently being reimbursed by the government, and similar to many other implantable Class III devices inChina (including stents and bone grafts), we would expect that FG-5200 could be added to the reimbursement list for medical devices, if approved.Clinical Testing of FG-5200An initial clinical study outside of China has been conducted to test the safety and feasibility of using a biosynthetic implant composed of our recombinanthuman collagen, and substantially similar to FG-5200, for the treatment of severe corneal damage as an alternative to human donor tissue. Ten patients withadvanced keratoconus, or severe corneal scarring, were implanted with the recombinant collagen implants and have been followed for more than five years.Two-year follow-up data were reported in Science Translational Medicine (Fagerholm et al., (2010)) and four-year follow-up data were reported inBiomaterials (Fagerholm et al., Biomaterials (2014)). The patients showed excellent tolerance of the implant, with no recruitment of inflammatory dendriticcells into the biosynthetic implant area and no episodes of rejection (one episode of rejection was seen in the cadaver graft control group). Further, patientshad a four-year mean corrected visual acuity of 20/54 and gained an average of more than five Snellen lines of vision on an eye chart. Nerve re-growth andtouch sensitivity was closer to that of healthy corneas and significantly better than that seen with cadaver corneas with no need for long termimmunosuppressive therapy.FG-5200 StrategyIn January 2016, our subsidiary FibroGen (China) Medical Technology Development Co., Ltd. (“FibroGen Beijing”) received the NMPA’s written notice ofclassification of our FG-5200 corneal implant as a Domestic Class III medical device. This allows FibroGen to develop, and if approved, to market FG-5200corneal implants fabricated in China without any prior reference approval outside of China.We currently plan to manufacture FG-5200 preclinical and clinical trial material in our aseptic good manufacturing practices production suite located at ourBeijing manufacturing plant. We completed the process technology transfer and the registration campaign in 2017. Materials from this campaign are beingused in preclinical studies that are now complete. We expect to file a CTA for a pivotal clinical trial after final results of the preclinical studies and discussionwith the NMPA.We plan to develop FG-5200 in China first. If FG-5200 is successful in China, we believe there is a future opportunity to develop FG-5200 in other Asiancountries where cadaver materials are in short supply, in part because cultural norms and infrastructure and other challenges in tissue banking limit tissuedonations. We also believe there is an opportunity to obtain CE Marking to facilitate entry into other markets, such as Latin America. We may develop FG-5200 in the U.S. and Europe as well, where cadaver corneas are available but the required immunosuppressive therapy may make FG-5200 a potentiallyattractive alternative.36 COLLABORATIONSOur Collaboration Partnerships for RoxadustatAstellasWe have two agreements with Astellas for the development and commercialization of roxadustat, one for Japan, and one for Europe, the Commonwealth ofIndependent States, the Middle East and South Africa. Under these agreements we provided Astellas the right to develop and commercialize roxadustat foranemia in these territories.We share responsibility with Astellas for clinical development activities required for U.S. and EU regulatory approval of roxadustat, and share equally thosedevelopment costs under the agreed development plan for such activities. Astellas will be responsible for clinical development activities and all associatedcosts required for regulatory approval in all other countries in the Astellas territories. Astellas will own and have responsibility for regulatory filings in itsterritories. We are responsible, either directly or through our contract manufacturers, for the manufacture and supply of all quantities of roxadustat to be usedin development and commercialization under the agreements.The Astellas agreements will continue in effect until terminated. Either party may terminate the agreements for certain material breaches by the other party. Inaddition, Astellas will have the right to terminate the agreements for certain specified technical product failures, upon generic sales reaching a particularthreshold, upon certain regulatory actions, or upon our entering into a settlement admitting the invalidity or unenforceability of our licensed patents. Astellasmay also terminate the agreements for convenience upon advance written notice to us. In the event of any termination of the agreements, Astellas will transferand assign to us the regulatory filings for roxadustat and will assign or license us the relevant trademarks used with the products in the Astellas territories.Under certain terminations, Astellas is also obligated to pay us a termination fee.Consideration under these agreements includes a total of $360.1 million in upfront and non-contingent payments, and milestone payments totaling $557.5million, of which $542.5 million are development and regulatory milestones, and $15.0 million are commercial-based milestones. Total consideration,excluding development cost reimbursement and product sales-related payments, could reach $917.6 million. During the second quarter of 2018, Astellasreported positive results from the final phase 3 CKD-dialysis trial of roxadustat in Japan, indicating that Astellas was ready to make an NDA submission forthe treatment of anemia with roxadustat in CKD-dialysis patients in 2018, which triggered $15.0 million milestone payment substantially all of which wasrecognized as revenue during the year ended December 31, 2018 from performance obligations satisfied or partially satisfied. The aggregate amount of suchconsideration received, including development cost reimbursement and product sales-related payments, through December 31, 2018 totals $487.6 million.Additionally, under these agreements, Astellas pays 100% of the commercialization costs in their territories. Astellas will pay us a transfer price for ourmanufacture and delivery of roxadustat based on a calculation based on net sales of roxadustat in the low 20% range.In addition, Astellas has separately invested $80.5 million in the equity of FibroGen, Inc. to date.AstraZenecaWe also have two agreements with AstraZeneca for the development and commercialization of roxadustat for anemia, one for China (the “China Agreement”),and one for the U.S. and all other countries not previously licensed to Astellas (the “U.S./RoW Agreement”). Under these agreements we providedAstraZeneca the right to develop and commercialize roxadustat for anemia in these territories. We share responsibility with AstraZeneca for clinicaldevelopment activities required for U.S. regulatory approval of roxadustat.In 2015, we reached the $116.5 million cap on our initial funding obligations (under which we shared 50% of the initial development costs), therefore allfuture development and commercialization costs for roxadustat for the treatment of anemia in CKD in the U.S., Europe, Japan and all other markets outside ofChina will be paid by Astellas and AstraZeneca.In China, our subsidiary FibroGen Beijing will conduct the development work for CKD anemia and will hold all of the regulatory licenses issued by Chinaregulatory authorities and be primarily responsible for regulatory, clinical and manufacturing. China development costs are shared 50/50. AstraZeneca is alsoresponsible for 100% of development expenses in all other licensed territories outside of China. We are responsible, through our contract manufacturers, forthe manufacture and supply of all quantities of roxadustat to be used in development and commercialization under the agreements.37 Under the AstraZeneca agreements, we receive upfront and subsequent non-contingent payments totaling $402.2 million. Potential milestone paymentsunder the agreements total $1.2 billion, of which $571.0 million are development and regulatory milestones, and $652.5 million are commercial-basedmilestones. Total consideration under the agreements, excluding development cost reimbursement, transfer price payments, royalties and profit share, couldreach $1.6 billion. During the second quarter of 2016, we received an upfront payment of $62.0 million time based development milestone. On December 17,2018, FibroGen (China) Medical Technology Development Co., Ltd. (“FibroGen China”), received marketing authorization from the NMPA for roxadustat, afirst-in-class hypoxia-inducible factor prolyl hydroxylase inhibitor, for the treatment of anemia caused by CKD in patients on dialysis. This approvaltriggered a $6.0 million milestone payable to us by AstraZeneca. On December 29, 2018, FibroGen China received the First Manufacturing Approval for aProduct in the Field in the Territory, which allows production for Phase IV clinical studies, patients’ early experience programs, donation programs, as well asto supply products for testing and assessments required prior to launch. This approval triggered a $6.0 million milestone payable to us by AstraZeneca.Approximately $9.9 million of the total $12.0 million milestone payables was recognized as revenue during the fourth quarter of 2018 from performanceobligations satisfied or partially satisfied. The aggregate amount of such consideration, including development cost reimbursement and product sales-relatedpayments, received through December 31, 2018 totals 432.2 million.Payments under these agreements include over $500 million in upfront, non-contingent and other payments received or expected to be received prior to thefirst U.S. approval, excluding development expense reimbursement.AstraZeneca purchased 1,111,111 shares of our common stock at the initial public offering (“IPO”) price for an aggregate purchase price of $20.0 million in aprivate placement concurrent with our IPO. In connection with the purchase of our shares of common stock in the private placement, AstraZeneca has alsoentered into a standstill agreement which provides that, until November 2019, neither AstraZeneca nor its representatives will, directly or indirectly, amongother things, acquire any additional securities or assets of ours, solicit proxies for our securities, participate in a business combination involving us, or seek toinfluence our management or policies, except with the prior consent of our board of directors and in certain other specified circumstances involving a changeof control of our company. In addition, AstraZeneca has agreed to vote its shares in favor of nominees to our board of directors, increases in the authorizedcapital stock of the company and amendments to our equity plans approved by the board of directors, in each case as recommended by a majority of ourboard of directors. AstraZeneca has also agreed, subject to specified exceptions, not to sell shares purchased by it in the private placement for the two-yearperiod following such purchase and to limitations on the volume of its sales of such shares thereafter.Under the U.S./RoW Agreement, AstraZeneca will pay for all commercialization costs in the U.S. and RoW, AstraZeneca will be responsible for the U.S.commercialization of roxadustat, with FibroGen undertaking specified promotional activities in the ESRD segment in the U.S. In addition, we will receive atransfer price for delivery of commercial product based on a percentage of net sales in the low- to mid-single digit range and AstraZeneca will pay us a tieredroyalty on net sales of roxadustat in the low 20% range.Under the China Agreement, which is conducted through FibroGen China Anemia Holdings, Ltd. (“FibroGen China”), the commercial collaboration isstructured as a 50/50 profit share. AstraZeneca will conduct commercialization activities in China as well as serve as the master distributor for roxadustat andwill fund roxadustat launch costs in China until FibroGen Beijing has achieved profitability. At that time, AstraZeneca will recoup 50% of their historicallaunch costs out of initial roxadustat profits in China.AstraZeneca may terminate the U.S./RoW Agreement upon specified events, including our bankruptcy or insolvency, our uncured material breach, technicalproduct failure, or upon 180 days prior written notice at will. If AstraZeneca terminates the U.S/RoW Agreement at will, in addition to any unpaid non-contingent payments, it will be responsible to pay for a substantial portion of the post-termination development costs under the agreed development planuntil regulatory approval.AstraZeneca may terminate the China Agreement upon specified events, including our bankruptcy or insolvency, our uncured material breach, technicalproduct failure, or upon advance prior written notice at will. If AstraZeneca terminates our China Agreement at will, it will be responsible to pay for transitioncosts as well as make a specified payment to FibroGen China.In the event of any termination of the agreements, but subject to modification upon termination for technical product failure, AstraZeneca will transfer andassign to us any regulatory filings and approvals for roxadustat in the affected territories that they may hold under our agreements, grant us licenses andconduct certain transition activities.38 Additional Information Related to Collaboration AgreementsOf the $1,113.5 million in development and regulatory milestones payable in the aggregate under our Astellas and AstraZeneca collaboration agreements,$425.0 million is payable upon achievement of milestones relating to the submission and approval of roxadustat in dialysis and non-dialysis CKDpopulations in the U.S. and Europe.Information about collaboration partners that accounted for more than 10% of our total revenue or accounts receivable for the last three fiscal years is setforth in Note 14 to our consolidated financial statements under Item 8 of this Annual Report.COMPETITIONThe pharmaceutical and biotechnology industries are highly competitive, particularly in some of the indications we are developing drug candidates,including anemia in CKD, IPF, pancreatic cancer, and DMD. We face competition from multiple other pharmaceutical and biotechnology companies, manyof which have significantly greater financial, technical and human resources and experience in product development, manufacturing and marketing. Thesepotential advantages of our competitors are particularly a risk in IPF, pancreatic cancer, and DMD, where we do not currently have a development orcommercialization partner.We expect any products that we develop and commercialize to compete on the basis of, among other things, efficacy, safety, convenience of administrationand delivery, price, the level of generic competition and the availability of reimbursement from government and other third-party payors.If either of our lead product candidates is approved, they will compete with currently marketed products, and product candidates that may be approved formarketing in the future, for treatment of the following indications:Roxadustat — Anemia in CKDIf roxadustat is approved for the treatment of anemia in patients with CKD and launched commercially, competing drugs are expected to include ESAs,particularly in those patient segments where ESAs are used. Currently available ESAs include epoetin alfa (EPOGEN® marketed by Amgen Inc. in the U.S.,Procrit® and Erypo®/Eprex®, marketed by Johnson & Johnson, Inc. and Espo® marketed by Kyowa Hakko Kirin in Japan and China), darbepoetin(Amgen/Kyowa Hakko Kirin’s Aranesp® and NESP®) and Mircera® marketed by Roche outside the U.S. and by Vifor Pharma (“Vifor”), a Roche licensee, inthe U.S. and Puerto Rico, as well as biosimilar versions of these currently marketed ESA products. ESAs have been used in the treatment of anemia in CKD formore than 20 years, serving a significant majority of dialysis patients. While non-dialysis 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, some patients under nephrology care may bereceiving ESA therapy. It may be difficult to encourage healthcare providers and patients to switch to roxadustat from products with which they have becomefamiliar.We may also face competition from potential new anemia therapies currently in clinical development, including in those patients segments not currentlyaddressed by ESAs. Companies such as GlaxoSmithKline plc (“GSK”), Bayer Corporation (“Bayer”), Akebia Therapeutics, Inc. (“Akebia”), and JapanTobacco, who are currently developing HIF-PH inhibitors for anemia in CKD indications. Akebia is currently conducting Phase 3 studies in CKD patients ondialysis and not on dialysis, as well as additional Phase 1 and Phase 2 studies. In Japan, Mitsubishi Tanabe Pharmaceutical Corporation, Akebia’scollaboration partner, started a Japan Phase 3 development program in November 2017. GSK is also conducting global Phase 3 studies in in CKD patients ondialysis and not on dialysis as well as Japan Phase 3 studies. GSK and Kyowa Hakko Kirin announced in November 2018 that the two companies signed astrategic commercialization deal in Japan for daprodustat. Bayer has completed global Phase 2 studies and its HIF-PH inhibitor is now in Phase 3development in CKD populations on dialysis and not on dialysis in Japan. Japan Tobacco is also conducting Phase 3 studies in in CKD patients on dialysisand not on dialysis in Japan only. Some of these product candidates may enter the market prior to roxadustat.In addition, there are other companies developing biologic therapies for the treatment of other anemia indications that we may also seek to pursue in thefuture, including anemia of MDS. For example, Acceleron Pharma, Inc., in partnership with Celgene Corporation, is in Phase 3 development of proteintherapeutic candidates to treat anemia and associated complications in patients with ß-thalassemia and MDS, and has received orphan drug status from theEMA and FDA for these indications. We may face competition for patient recruitment and enrollment for clinical trials and potentially in commercial sales.There may also be new therapies for renal-related diseases that could limit the market or level of reimbursement available for roxadustat if and when it iscommercialized.39 In China, biosimilars of epoetin alfa are offered by Chinese pharmaceutical companies such as EPIAO marketed by 3SBio Inc. as well as more than 15 otherlocal manufacturers. We may also face competition by HIF-PH inhibitors from other companies such as Akebia, Bayer, and GSK, which was authorized by theNMPA to conduct trials in China to support its ex-China regulatory filings, as well as Guandong Dongyangguang Pharmaceutical Co., Ltd, a domesticChinese company, which was permitted by the NMPA to conduct clinical trials for CKD anemia patients both on and not on dialysis. Akebia announced inDecember 2015 that it has entered into a development and commercialization partnership with Mitsubishi Tanabe Pharmaceutical Corporation for its HIF-PHinhibitor vadadustat in Japan, Taiwan, South Korea, India and certain other countries in Asia, and announced in April 2017 an expansion of their U.S.collaboration with Otsuka to add markets, including China. 3SBio Inc. announced in 2016 its plan on beginning a Phase 1 clinical trial of a HIF-PH inhibitorfor the China market.The first biosimilar ESA, Pfizer’s Retacrit® (epoetin zeta), entered the U.S. market in November 2018. Market penetration of Retacrit and the potentialaddition of other biosimilar ESAs currently under development may alter the competitive and pricing landscape of anemia therapy in CKD patients ondialysis under the ESRD bundle. The patents for Amgen’s EPOGEN® (epoetin alfa) expired in 2004 in the EU, and the final material patents in the U.S.expired in May 2015. Several biosimilar versions of currently marketed ESAs are available for sale in the EU, China and other territories. In the U.S., a fewESA biosimilars are currently under development. Sandoz, a division of Novartis, markets Binocrit® (epoetin alfa) in Europe and may file a biosimilarBiologics License Application (“BLA”) in the U.S.The majority of the current CKD anemia market focuses on dialysis patients, who visit dialysis centers on a regular basis, typically three times a week, andanemia therapies are administered as part of the visit. Two of the largest operators of dialysis clinics in the U.S., DaVita Healthcare Partners Inc. (“DaVita”),and Fresenius Medical Care AG & Co. KGaA (“Fresenius”), collectively provide dialysis care to approximately 70% of U.S. dialysis patients, and thereforehave historically won long-term contracts including rebate terms with Amgen. DaVita recently entered into a new six-year sourcing and supply agreementwith Amgen effective through 2022. Fresenius’ contract with Amgen expired in 2015, following which Fresenius is providing Roche’s ESA Mircera® to asignificant portion of its U.S. dialysis patients. Successful penetration in this market may require a significant agreement with Fresenius or DaVita, onfavorable terms and on a timely basis.PamrevlumabWe are currently in Phase 2 development of pamrevlumab to treat DMD, and are initiating Phase 3 development of pamrevlumab in IPF and pancreaticcancer. Most of our competitors have significantly more resources and expertise in development, commercialization and manufacturing, particularly due tothe fact that we have not yet established a co-development partnership for pamrevlumab. For example, both Roche and Boehringer Ingelheim, which marketproducts for the treatment of IPF in the U.S., have successfully developed and commercialized drugs in various indications and have built sales organizationsthat we do not currently have; both have more resources and more established relationships when competing with us for patient recruitment and enrollmentfor clinical trials or, if we are approved, in the market.Idiopathic Pulmonary FibrosisIf approved to treat IPF, pamrevlumab is expected to compete with Roche’s Esbriet® (pirfenidone), and Boehringer Ingelheim’s Ofev® (nintedanib). Webelieve that if pamrevlumab can be shown to safely stabilize or reverse lung fibrosis, and thus stabilize or improve lung function in IPF patients, it cancompete with pirfenidone and nintedanib for market share in IPF. However, it may be difficult to encourage treatment providers and patients to switch topamrevlumab from a product they are already familiar with. We may also face competition from potential new IPF therapies.Pamrevlumab is an injectable protein, which may be more expensive and less convenient than small molecules such as nintedanib and pirfenidone. Otherpotential competitive product candidates in various stages of development for IPF include Biogen-Idec’s BG-00011, Galapagos NV’s GLPG1690, KadmonHoldings, Inc.’s KD025, Prometic Life Sciences Inc.’s PBI-4050, and Promedior, Inc.’s PRM-151.40 Pancreatic CancerWe are developing pamrevlumab to be used in combination with Abraxane® (nab-paclitaxel) and gemcitabine in pancreatic cancer. Celgene’s Abraxane waslaunched in the U.S. and Europe in 2013 and 2014, respectively, and was the first drug approved in this disease in nearly a decade. In 2015, MerrimackPharmaceuticals Inc. (“Merrimack”) received FDA approval for the use of ONIVYDE (irinotecan liposome injection, now licensed to Eli Lilly) for thetreatment of patients with metastatic adenocarcinoma of the pancreas after disease progression following gemcitabine-based therapy, and the combinationtherapy with Abraxane and gemcitabine became the first-line standard of care in these patients. As treatments for pancreatic cancer have shown limitedsuccess to date, combination therapies are expected, but the incremental cost may slow a new product adoption in the market, at least until the genericversions of Abraxane becomes available. In addition, we may also face competition from other agents seeking approval in conjunction with gemcitabine andAbraxane for patient recruitment and enrollment in our clinical trials, and potentially in commercialization. NewLink Genetics Corporation’s indoximod andMerrimack’s istiratumab are examples.Duchenne Muscular DystrophyIf approved and launched commercially to treat DMD, pamrevlumab is expected to face competition from drugs that were recently approved in major marketssuch as the U.S., EU, and Japan.On September 19, 2016, the FDA approved Sarepta Therapeutics Inc.’s (“Sarepta”) Exondys 51® (eteplirsen). This was the first drug approved to treat DMD.Exondys 51® is approved to treat patients who have a mutation of the dystrophin gene amenable to exon 51 skipping therapy. This mutation represents asubset of approximately 13% of patients with DMD. In Europe, Sarepta received a negative opinion for its marketing application for eteplirsen from the EMAin September 2018.On February 9, 2017, the FDA approved Marathon Pharmaceuticals’ (“Marathon”) corticosteroid Emflaza® (deflazacort) for the treatment of patients fiveyears and older with DMD. Although approved for other indications outside of the U.S., this was the first approval for deflazacort in the U.S. and the firstapproval in the U.S. for the use of a corticosteroid to treat DMD. On March 16, 2016, Marathon announced it had sold the commercialization rights ofEmflaza® to PTC Therapeutics.PTC Therapeutics’ product Translarna TM received a conditional approval in Europe in 2014, which was renewed in November 2016 with a request for a newrandomized placebo-controlled 18-month study by the Committee for Medicinal Products for Human Use of the EMA; however, the FDA informed thesponsor in a complete response letter in October 2017, as well as in its response to PTC Therapeutics’ appeal, that the FDA is unable to approve theapplication in its current form. While Translarna TM targets a different set of DMD patients from those targeted by Sarepta’s Exondys 51®, it is also limited toa subset of patients who carry a specific mutation. Conversely, pamrevlumab is intended to treat DMD patients without limitation to type of mutation.Pamrevlumab may also face competition from other drugs currently in clinical development in patient recruiting and enrollment in clinical trials, and, ifapproved, in commercialization. Examples of those compounds currently under clinical development are the drug candidates from Catabasis Pharmaceuticals(“Catabasis”), Santhera Pharmaceuticals (“Santhera”) and Sarepta. Catabasis’ edasalonexent was reported to have preserved muscle function and slowed theprogression of DMD compared to rates of change in the control period prior to treatment with edasalonexent in a Phase 2 study, and is currently undergoingPhase 3 development. Sarepta’s golodirsen, a new exon skipping agent, is also currently in Phase 3 development. Santhera’s Raxone®/Catena® (idebenone)for treatment of DMD has been rejected by the EMA, and the FDA requested additional clinical data from the Phase 3 trial currently ongoing in the U.S. andEurope. Santhera offers compassionate use of idebenone in patients with DMD in U.S. and UK. MANUFACTURE AND SUPPLYWe have historically and in the future plan to continue to enter into contractual arrangements with qualified third-party manufacturers to manufacture andpackage our products and product candidates for territories outside of China. We believe that this manufacturing strategy enables us to more efficiently directfinancial resources to the research, development and commercialization of product candidates rather than diverting resources to establishing a significantinternal manufacturing infrastructure, unless there is additional strategic value for establishing manufacturing capabilities, such as in China. As our productcandidates proceed through development, we are discussing the timing of entry into longer term commercial supply agreements with key suppliers andmanufacturers in order to meet the ongoing and planned clinical and commercial supply needs for ourselves and our partners. Our timing of entry into theseagreements is based on the current development and commercialization plans for roxadustat, pamrevlumab and FG-5200.RoxadustatRoxadustat is a small-molecule drug manufactured from generally available commercial starting materials and chemical technologies and multi-purposeequipment available from many third party contract manufacturers. Outside of China we have used, and plan to continue to use, Shanghai SynTheAllPharmaceutical Co., Ltd. (“WuXi STA”) and Catalent, Inc. (“Catalent”) to manufacture41 roxadustat API and roxadustat drug product, respectively. WuXi STA is located in China and currently supplies our API globally except for China, for whichit manufactures an intermediate to be further manufactured by FibroGen China. WuXi STA has passed inspections by several regulatory agencies, includingthe FDA and NMPA, and is Current Good Manufacturing Practice (“cGMP”) compliant. Catalent is located in the U.S. and supplies our drug product tabletsglobally except for Japan, where they are manufactured by Astellas, and China, where they are manufactured by FibroGen China. Catalent has passed severalregulatory inspections, including by the FDA, and manufactures commercial products for other clients.To date, we believe that roxadustat has been manufactured under cGMP and in compliance with applicable regulatory requirements for the manufacture ofdrug substance and drug product used in clinical trials and we and Astellas have performed audits of the existing roxadustat manufacturers. The intendedcommercial manufacturing route outside of China has been successfully scaled up to multiple hundred kilogram scale and produced several metric tons ofroxadustat drug substance. We are in discussions with multiple parties regarding longer term commercial supply arrangements.In China, our Beijing facility received the Good Manufacturing Practice (“GMP”) license for Drug Substance and Drug Product. We plan to use drug productfrom our FibroGen Beijing manufacturing facility for commercial supply. We expect our Cangzhou manufacturing facility to be qualified and licensed formanufacture of roxadustat API for the China market later this year. We may also qualify a third party manufacturer to produce commercial API under theMarketing Authorization Holder System program.Irix Pharmaceuticals, Inc.In July 2002, we and IRIX Pharmaceuticals, Inc. (“IRIX”), a third party manufacturer, entered into a Letter of Agreement for IRIX Pharmaceuticals SingleSource Manufacturing Agreement (the “Letter of Agreement”), in connection with a contract manufacturing arrangement for clinical supplies of HIF-PHinhibitors, including roxadustat. The Letter of Agreement contained a service agreement that included terms and schedule for the delivery of clinicalmaterials, and also included a term sheet for a single source agreement for the cGMP manufacture of HIF-PH inhibitors, including roxadustat. Specifically,pursuant to the Letter of Agreement, we and IRIX agreed to negotiate a single source manufacturing agreement that included a first right to negotiate amanufacturing contract for HIF-PH inhibitors, including roxadustat, provided that IRIX is able to match any third party bids within 5%, and the exclusiveright to manufacture extends for five years after approval of an NDA. Any agreement would provide that no minimum amounts would be specified untilappropriate by forecast, that we and our commercialization partner would have the rights to contract with independent third parties that exceed IRIX’sinternal capabilities or in the event that we or our commercialization partner determines for reasons of continuity and security that such a need exists,provided that IRIX would supply a majority of the product if it is able to meet the requirements and the schedule required by us and our partner. Subsequentto the Letter of Agreement, we and IRIX have entered into several additional service agreements. IRIX has requested in writing that we honor the Letter ofAgreement with respect to the single source manufacturing agreement. To date, we have offered to IRIX opportunities to bid for the manufacture of HIF-PHinhibitors, including roxadustat. In 2015, Patheon Pharmaceuticals Inc., a business unit of DPx Holdings B.V., acquired IRIX.PamrevlumabTo date, pamrevlumab has been manufactured using specialized biopharmaceutical process techniques under an agreement with a qualified third partycontract manufacturer, Boehringer Ingelheim. Our contract manufacturer is the sole source for the current clinical supply of the drug substance and drugproduct for pamrevlumab. Our contract manufacturer is only obligated to supply the amounts of pamrevlumab as agreed on pursuant to work orders that areexecuted from time to time under our agreement as we determine need for clinical material, and we are not required to make fixed or minimum annualpurchases. Our existing agreement allows us to transfer the cell line manufacturing process to another third party manufacturer at our expense, and ourcontractor is obligated to provide reasonable technology transfer assistance in the event of such a transfer.FG-5200The manufacture of FG-5200 requires three distinct steps under cGMP and involves three parties in three locations. Our proprietary recombinant humancollagen is produced under contract by a third party in Finland. After quality assurance release, we freeze-dry the material in our U.S. facility. We are stilldetermining any facility licensing requirements for this step. The final step is the production of FG-5200, which will be done in a qualified asepticmanufacturing suite at the FibroGen Beijing manufacturing facility. After completion of the final validation of the sterile process (currently in progress),implants will be manufactured there for product registration testing, clinical testing, as well as for commercial use in the future.42 GOVERNMENT REGULATIONThe clinical testing, manufacturing, labeling, storage, distribution, record keeping, advertising, promotion, import, export and marketing, among otherthings, of our product candidates are subject to extensive regulation by governmental authorities in the U.S. and other countries. The process of obtainingregulatory approvals and the subsequent compliance with appropriate federal, state, local and foreign statutes and regulations, including in Europe andChina, requires the expenditure of substantial time and financial resources. Failure to comply with the applicable requirements at any time during the productdevelopment process, approval process or after approval may subject an applicant and/or sponsor to a variety of administrative or judicial sanctions,including refusal by the applicable regulatory authority to approve pending applications, withdrawal of an approval, imposition of a clinical hold, issuanceof warning letters and other types of letters, product recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines,refusals of government contracts, restitution, disgorgement of profits, or civil or criminal investigations and penalties brought by FDA and the Department ofJustice, or other governmental entities.U.S. Product Approval ProcessIn the U.S., the FDA regulates drugs and biological products, or biologics, under the Public Health Service Act, as well as the FDCA which is the primary lawfor regulation of drug products. Both drugs and biologics are subject to the regulations and guidance implementing these laws. Pharmaceutical products arealso subject to regulation by other governmental agencies, such as the Federal Trade Commission, the Office of Inspector General of the U.S. Department ofHealth and Human Services, the Consumer Product Safety Commission and the Environmental Protection Agency. The clinical testing, manufacturing,labeling, storage, distribution, record keeping, advertising, promotion, import, export and marketing, among other things, of our product candidates aresubject to extensive regulation by governmental authorities in the U.S. and other countries. The steps required before a drug or biologic may be approved formarketing in the U.S. generally include: •Preclinical laboratory tests and animal tests conducted under Good Laboratory Practices. •The submission to the FDA of an IND for human clinical testing, which must become effective before each human clinical trial commence. •Adequate and well-controlled human clinical trials to establish the safety and efficacy of the product and conducted in accordance with GoodClinical Practices. •The submission to the FDA of an NDA, in the case of a small molecule drug product, or a BLA, in the case of a biologic product. •FDA acceptance, review and approval of the NDA or BLA, as applicable. •Satisfactory completion of an FDA inspection of the manufacturing facilities at which the product is made to assess compliance with cGMPs.The testing and approval process requires substantial time, effort and financial resources, and the receipt and timing of any approval is uncertain. The FDAmay suspend clinical trials at any time on various grounds, including a finding that the subjects or patients are being exposed to a potentially unacceptablehealth risk.Preclinical studies include laboratory evaluations of the product candidate, as well as animal studies to assess the potential safety and efficacy of the productcandidate. Preclinical studies must be conducted in compliance with FDA regulations regarding GLPs. The results of the preclinical studies, together withmanufacturing information and analytical data, are submitted to the FDA as part of the IND, which includes the results of preclinical testing and a protocoldetailing, among other things, the objectives of the clinical trial, the parameters to be used in monitoring safety and the effectiveness criteria to be evaluatedif the first phase or phases of the clinical trial lends themselves to an efficacy determination. The IND will become effective automatically 30 days afterreceipt by the FDA, unless the FDA raises concerns or questions about the conduct of the trials as outlined in the IND prior to that time. In this case, the INDsponsor and the FDA must resolve any outstanding concerns before clinical trials can proceed. The IND must become effective before clinical trials may becommenced.43 Clinical trials involve the administration of the product candidates to healthy volunteers, or subjects, or patients with the disease to be treated under thesupervision of a qualified principal investigator. Clinical trials must be conducted under the supervision of one or more qualified principal investigators inaccordance with GCPs and in accordance with protocols detailing the objectives of the applicable phase of the trial, dosing procedures, research subjectselection and exclusion criteria and the safety and effectiveness criteria to be evaluated. Progress reports detailing the status of clinical trials must besubmitted to the FDA annually. Sponsors must also timely report to the FDA serious and unexpected adverse events, any clinically important increase in therate of a serious suspected adverse event over that listed in the protocol or investigator’s brochure, or any findings from other studies or tests that suggest asignificant risk in humans exposed to the product candidate. Further, the protocol for each clinical trial must be reviewed and approved by an independentinstitutional review board (“IRB”), either centrally or individually at each institution at which the clinical trial will be conducted. The IRB will consider,among other things, ethical factors, and the safety of human subjects and the possible liability of the institution.Clinical trials are typically conducted in three sequential phases prior to approval, but the phases may overlap and different trials may be initiated with thesame drug candidate within the same phase of development in similar or different patient populations. These phases generally include the following:Phase 1. Phase 1 clinical trials represent the initial introduction of a product candidate into human subjects, frequently healthy volunteers. In Phase 1, theproduct candidate is usually tested for pharmacodynamic and pharmacokinetic properties such as safety, including adverse effects, dosage tolerance,absorption, distribution, metabolism and excretion.Phase 2. Phase 2 clinical trials usually involve studies in a limited patient population to (1) evaluate the efficacy of the product candidate for specificindications, (2) determine dosage tolerance and optimal dosage and (3) identify possible adverse effects and safety risks.Phase 3. If a product candidate is found to be potentially effective and to have an acceptable safety profile in Phase 2 studies, the clinical trial program willbe expanded to Phase 3 clinical trials to further evaluate clinical efficacy, optimal dosage and safety within an expanded patient population atgeographically dispersed clinical study sites.Phase 4. Phase 4 clinical trials are conducted after approval to gain additional experience from the treatment of patients in the intended therapeuticindication and to document a clinical benefit in the case of drugs approved under accelerated approval regulations, or when otherwise requested by the FDAin the form of post-market requirements or commitments. Failure to promptly conduct any required Phase 4 clinical trials could result in withdrawal ofapproval.The results of preclinical studies and clinical trials, together with detailed information on the manufacture, composition and quality of the product candidate,are submitted to the FDA in the form of an NDA (for a drug) or BLA (for a biologic), requesting approval to market the product. The application must beaccompanied by a significant user fee payment. The FDA has substantial discretion in the approval process and may refuse to accept any application ordecide that the data is insufficient for approval and require additional preclinical, clinical or other studies.Review of ApplicationOnce the NDA or BLA submission has been accepted for filing, which occurs, if at all, 60 days after submission, the FDA informs the applicant of the specificdate by which the FDA intends to complete its review. This is typically 12 months from the date of submission. The review process is often extended by FDArequests for additional information or clarification. The FDA reviews NDAs and BLAs to determine, among other things, whether the proposed product is safeand effective for its intended use, and whether the product is being manufactured in accordance with cGMP to assure and preserve the product’s identity,strength, quality and purity. Before approving an NDA or BLA, the FDA may inspect the facilities at which the product is manufactured and will not approvethe product unless the manufacturing facility complies with cGMPs and will also inspect clinical trial sites for integrity of data supporting safety andefficacy. During the approval process, the FDA also will determine whether a risk evaluation and mitigation strategy (“REMS”), is necessary to assure the safeuse of the product. If the FDA concludes a REMS is needed, the sponsor of the application must submit a proposed REMS; the FDA will not approve theapplication without an approved REMS, if required. A REMS can substantially increase the costs of obtaining approval. The FDA may also convene anadvisory committee of external experts to provide input on certain review issues relating to risk, benefit and interpretation of clinical trial data. The FDA maydelay approval of an NDA if applicable regulatory criteria are not satisfied and/or the FDA requires additional testing or information. The FDA may requirepost-marketing testing and surveillance to monitor safety or efficacy of a product. FDA will issue either an approval of the NDA or BLA or a completeresponse letter detailing the deficiencies and information required in order for reconsideration of the application.44 Pediatric Exclusivity and Pediatric UseUnder the Best Pharmaceuticals for Children Act, certain drugs or biologics may obtain an additional six months of exclusivity in an indication, if thesponsor submits information requested in writing by the FDA (“Written Request”), relating to the use of the active moiety of the drug or biologic in children.The FDA may not issue a Written Request for studies on unapproved or approved indications or where it determines that information relating to the use of adrug or biologic in a pediatric population, or part of the pediatric population, may not produce health benefits in that population.We have not received a Written Request for such pediatric studies with respect to our product candidates, although we may ask the FDA to issue a WrittenRequest for studies in the future. To receive the six-month pediatric market exclusivity, we would have to receive a Written Request from the FDA, conductthe requested studies in accordance with a written agreement with the FDA or, if there is no written agreement, in accordance with commonly acceptedscientific principles, and submit reports of the studies. A Written Request may include studies for indications that are not currently in the labeling if the FDAdetermines that such information will benefit the public health. The FDA will accept the reports upon its determination that the studies were conducted inaccordance with and are responsive to the original Written Request, agreement, or commonly accepted scientific principles, as appropriate, and that thereports comply with the FDA’s filing requirements.In addition, the Pediatric Research Equity Act (“PREA”) requires a sponsor to conduct pediatric studies for most drugs and biologicals, for a new activeingredient, new indication, new dosage form, new dosing regimen or new route of administration. Under PREA, original NDAs, BLAs and supplementsthereto must contain a pediatric assessment unless the sponsor has received a deferral or waiver. The required assessment must include the evaluation of thesafety and effectiveness of the product for the claimed indications in all relevant pediatric subpopulations and support dosing and administration for eachpediatric subpopulation for which the product is safe and effective. The FDA, on its own initiative or at the request of the sponsor, may request a deferral ofpediatric studies for some or all of the pediatric subpopulations. A deferral may be granted by FDA if they believe that additional safety or effectiveness datain the adult population needs to be collected before the pediatric studies begin. After April 2013, the FDA must send a non-compliance letter to any sponsorthat fails to submit the required assessment, keep a deferral current or fails to submit a request for approval of a pediatric formulation.Post-Approval RequirementsEven after approval, drugs and biologics manufactured or distributed pursuant to FDA approvals are subject to continuous regulation by the FDA, including,among other things, requirements relating to recordkeeping, periodic reporting, product distribution, advertising and promotion and reporting of adverseexperiences with the product. After approval, most changes to the approved product, such as adding new indications or other labeling claims are subject toprior FDA review and approval. There also are continuing, annual user fee requirements for any marketed products and the establishments at which suchproducts are manufactured, as well as new application fees for supplemental applications with clinical data.The FDA may impose a number of post-approval requirements as a condition of approval of an NDA or BLA. For example, the FDA may require post-marketing testing, including Phase 4 clinical trials, and surveillance to further assess and monitor the product’s safety and effectiveness aftercommercialization.In addition, entities involved in the manufacture and distribution of approved drugs and biologics are required to register their establishments with the FDAand state agencies, and are subject to periodic unannounced inspections by the FDA and these state agencies for compliance with cGMP requirements.Changes to the manufacturing process are strictly regulated and often require prior FDA approval before being implemented. FDA regulations also requireinvestigation and correction of any deviations from cGMP and impose reporting and documentation requirements upon the sponsor and any third-partymanufacturers that the sponsor may decide to use. Accordingly, manufacturers must continue to expend time, money, and effort in the area of production andquality control to maintain cGMP compliance.Once an approval is granted, the FDA may withdraw the approval if compliance with regulatory requirements and standards is not maintained or if problemsoccur after the product reaches the market. Later discovery of previously unknown problems with a product, including adverse events of unanticipatedseverity or frequency, or with manufacturing processes, or failure to comply with regulatory requirements, may also result in revisions to the approvedlabeling to add new safety information; imposition of post-market studies or clinical trials to assess new safety risks; or imposition of distribution or otherrestrictions under a REMS program. Other potential consequences include, among other things: •Restrictions on the marketing or manufacturing of the product, complete withdrawal of the product from the market or product recalls. •Fines, warning letters or holds on post-approval clinical trials.45 •Refusal of the FDA to approve pending NDAs or BLAs or supplements to approved NDAs or BLAs, or suspension or revocation of productlicense approvals. •Product seizure or detention, or refusal to permit the import or export of products. •Injunctions or the imposition of civil or criminal penalties.The FDA strictly regulates marketing, labeling, advertising and promotion of products that are placed on the market. Drugs may be promoted only for theapproved indications and in accordance with the provisions of the approved label. The FDA and other agencies actively enforce the laws and regulationsprohibiting the promotion of off-label uses, and a company that is found to have improperly promoted off-label uses may be subject to significant liability.Prescription Drug Marketing ActThe distribution of pharmaceutical products is subject to the Prescription Drug Marketing Act (“PDMA”), which regulates the distribution of drugs and drugsamples at the federal level and sets minimum standards for the registration and regulation of drug distributors at the state level. Under the PDMA and statelaw, states require the registration of manufacturers and distributors who provide pharmaceuticals in that state, including in certain states manufacturers anddistributors who ship pharmaceuticals into the state even if such manufacturers or distributors have no place of business within the state. The PDMA and statelaws impose requirements and limitations upon drug sampling to ensure accountability in the distribution of samples. The PDMA sets forth civil and criminalpenalties for violations of these and other provisions.Federal and State Fraud and Abuse and Data Privacy and Security and Transparency Laws and RegulationsIn addition to FDA restrictions on marketing of pharmaceutical products, federal and state healthcare laws restrict certain business practices in thebiopharmaceutical industry. These laws include, but are not limited to, anti-kickback, false claims, data privacy and security, and transparency statutes andregulations.The federal Anti-Kickback Statute prohibits, among other things, knowingly and willfully offering, paying, soliciting or receiving remuneration, directly orindirectly, to induce, or in return for, purchasing, leasing, ordering or arranging for the purchase, lease or order of any good, facility, item or servicereimbursable under Medicare, Medicaid or other federal healthcare programs. The term “remuneration” has been broadly interpreted to include anything ofvalue, including for example, gifts, discounts, the furnishing of supplies or equipment, credit arrangements, payments of cash, waivers of payment, ownershipinterests and providing anything at less than its fair market value. The Anti-Kickback Statute has been interpreted to apply to arrangements betweenpharmaceutical manufacturers on one hand and prescribers, purchasers and formulary managers on the other. Although there are a number of statutoryexemptions and regulatory safe harbors protecting certain common activities from prosecution, the exemptions and safe harbors are drawn narrowly, and ourpractices may not in all cases meet all of the criteria for a statutory exception or safe harbor protection. Practices that involve remuneration that may bealleged to be intended to induce prescribing, purchases or recommendations may be subject to scrutiny if they do not qualify for an exception or safe harbor.Failure to meet all of the requirements of a particular applicable statutory exception or regulatory safe harbor does not make the conduct per se illegal underthe Anti-Kickback Statute. Instead, the legality of the arrangement will be evaluated on a case-by-case basis based on a cumulative review of all of its factsand circumstances. Several courts have interpreted the statute’s intent requirement to mean that if any one purpose of an arrangement involving remunerationis to induce referrals of federal healthcare covered business, the statute has been violated. The intent standard under the Anti-Kickback Statute was amendedby the Patient Protection and Affordable Care Act as amended by the Health Care and Education Reconciliation Act of 2010 (collectively “PPACA”), to astricter intent standard such that a person or entity no longer needs to have actual knowledge of this statute or the specific intent to violate it in order to havecommitted a violation. In addition, PPACA codified case law that a claim including items or services resulting from a violation of the federal Anti-KickbackStatute constitutes a false or fraudulent claim for purposes of the civil False Claims Act (discussed below). Further, civil monetary penalties statute imposespenalties against any person or entity who, among other things, is determined to have presented or caused to be presented a claim to a federal health programthat the person knows or should know is for an item or service that was not provided as claimed or is false or fraudulent.46 The federal false claims laws prohibit, among other things, any person or entity from knowingly presenting, or causing to be presented, a false or fraudulentclaim for payment or approval to the federal government or knowingly making, using or causing to be made or used a false record or statement material to afalse or fraudulent claim to the federal government. As a result of a modification made by the Fraud Enforcement and Recovery Act of 2009, a claim includes“any request or demand” for money or property presented to the U.S. government. Recently, several pharmaceutical and other healthcare companies havebeen prosecuted under these laws for, among other things, allegedly providing free product to customers with the expectation that the customers would billfederal programs for the product. Other companies have been prosecuted for causing false claims to be submitted because of the companies’ marketing of theproduct for unapproved, and thus non-reimbursable, uses. The federal Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), created newfederal criminal statutes that prohibit knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program,including private third-party payors and knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false,fictitious or fraudulent statement in connection with the delivery of, or payment for, healthcare benefits, items or services.In addition, we may be subject to data privacy and security regulation by both the federal government and the states in which we conduct our business.HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act (“HITECH”), and its implementing regulations, imposescertain requirements relating to the privacy, security and transmission of individually identifiable health information. Among other things, HITECH makesHIPAA’s privacy and security standards directly applicable to business associates — independent contractors or agents of covered entities that receive orobtain protected health information in connection with providing a service on behalf of a covered entity. HITECH also created four new tiers of civilmonetary penalties, amended HIPAA to make civil and criminal penalties directly applicable to business associates, and gave state attorneys general newauthority to file civil actions for damages or injunctions in federal courts to enforce the federal HIPAA laws and seek attorney’s fees and costs associated withpursuing federal civil actions. In addition, state laws govern the privacy and security of health information in certain circumstances, many of which differfrom each other in significant ways and may not have the same effect, thus complicating compliance efforts.Additionally, the federal Physician Payments Sunshine Act within the PPACA, and its implementing regulations, require that certain manufacturers of drugs,devices, biologicals and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program (with certainexceptions) to report information related to certain payments or other transfers of value made or distributed to physicians and teaching hospitals, or to entitiesor individuals at the request of, or designated on behalf of, the physicians and teaching hospitals and to report annually certain ownership and investmentinterests held by physicians and their immediate family members.Also, many states have similar healthcare statutes or regulations that apply to items and services reimbursed under Medicaid and other state programs, or, inseveral states, apply regardless of the payor. Some states require the posting of information relating to clinical studies. In addition, California requirespharmaceutical companies to implement a comprehensive compliance program that includes a limit on expenditures for, or payments to, individual medicalor health professionals. If our operations are found to be in violation of any of the health regulatory laws described above or any other laws that apply to us,we may be subject to penalties, including potentially significant criminal, civil and/or administrative penalties, damages, fines, disgorgement, individualimprisonment, exclusion of products from reimbursement under government programs, contractual damages, reputational harm, administrative burdens,diminished profits and future earnings and the curtailment or restructuring of our operations, any of which could adversely affect our ability to operate ourbusiness and our results of operations. To the extent that any of our products will be sold in a foreign country, we may be subject to similar foreign laws andregulations, which may include, for instance, applicable post-marketing requirements, including safety surveillance, anti-fraud and abuse laws andimplementation of corporate compliance programs and reporting of payments or transfers of value to healthcare professionals.47 Pharmaceutical Coverage, Pricing and ReimbursementIn both domestic and foreign markets, our sales of any approved products will depend in part on the availability of coverage and adequate reimbursementfrom third-party payors. Third-party payors include government health administrative authorities, managed care providers, private health insurers and otherorganizations. Patients who are prescribed treatments for their conditions and providers performing the prescribed services generally rely on third-partypayors to reimburse all or part of the associated healthcare costs. Patients are unlikely to use our products unless coverage is provided and reimbursement isadequate to cover a significant portion of the cost of our products. Sales of our products will therefore depend substantially, both domestically and abroad, onthe extent to which the costs of our products will be paid by third-party payors. These third-party payors are increasingly focused on containing healthcarecosts by challenging the price and examining the cost-effectiveness of medical products and services. In addition, significant uncertainty exists as to thecoverage and reimbursement status of newly approved healthcare product candidates. The market for our products and product candidates for which we mayreceive regulatory approval will depend significantly on access to third-party payors’ drug formularies, or lists of medications for which third-party payorsprovide coverage and reimbursement. The industry competition to be included in such formularies often leads to downward pricing pressures onpharmaceutical companies. Also, third-party payors may refuse to include a particular branded drug in their formularies or otherwise restrict patient access toa branded drug when a less costly generic equivalent or other alternative is available.Because each third-party payor individually approves coverage and reimbursement levels, obtaining coverage and adequate reimbursement is a time-consuming, costly and sometimes unpredictable process. We may be required to provide scientific and clinical support for the use of any product to eachthird-party payor separately with no assurance that approval would be obtained, and we may need to conduct expensive pharmacoeconomic studies in orderto demonstrate the cost-effectiveness of our products. This process could delay the market acceptance of any product and could have a negative effect on ourfuture revenues and operating results. We cannot be certain that our products and our product candidates will be considered cost-effective. Because coverageand reimbursement determinations are made on a payor-by-payor basis, obtaining acceptable coverage and reimbursement from one payor does not guaranteethat we will obtain similar acceptable coverage or reimbursement from another payor. If we are unable to obtain coverage of, and adequate reimbursement andpayment levels for, our product candidates from third-party payors, physicians may limit how much or under what circumstances they will prescribe oradminister them and patients may decline to purchase them. This in turn could affect our ability to successfully commercialize our products and impact ourprofitability, results of operations, financial condition and future success.In addition, in many foreign countries, particularly the countries of the EU and China, the pricing of prescription drugs is subject to government control. Insome non-U.S. jurisdictions, the proposed pricing for a drug must be approved before it may be lawfully marketed. The requirements governing drug pricingvary widely from country to country. For example, the EU provides options for its member states to restrict the range of medicinal products for which theirnational health insurance systems provide reimbursement and to control the prices of medicinal products for human use. A member state may approve aspecific price for the medicinal product or it may instead adopt a system of direct or indirect controls on the profitability of a company placing the medicinalproduct on the market. We may face competition for our product candidates from lower-priced products in foreign countries that have placed price controlson pharmaceutical products. In addition, there may be importation of foreign products that compete with our own products, which could negatively impactour profitability.48 Healthcare ReformIn the U.S. and foreign jurisdictions, there have been, and we expect there will continue to be, a number of legislative and regulatory changes to thehealthcare system that could affect our future results of operations as we begin to directly commercialize our products. In particular, there have been andcontinue to be a number of initiatives at the U.S. federal and state level that seek to reduce healthcare costs. If a drug product is reimbursed by Medicare orMedicaid, pricing and rebate programs must comply with, as applicable, the Medicaid rebate requirements of the Omnibus Budget Reconciliation Act of1990, as amended, and the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (“MMA”). The MMA imposed new requirements forthe distribution and pricing of prescription drugs for Medicare beneficiaries. Under Part D, Medicare beneficiaries may enroll in prescription drug plansoffered by private entities that provide coverage of outpatient prescription drugs. Part D plans include both stand-alone prescription drug benefit plans andprescription drug coverage as a supplement to Medicare Advantage plans. Unlike Medicare Part A and B, Part D coverage is not standardized. Part Dprescription drug plan sponsors are not required to pay for all covered Part D drugs, and each drug plan can develop its own drug formulary that identifieswhich drugs it will cover and at what tier or level. However, Part D prescription drug formularies must include drugs within each therapeutic category andclass of covered Part D drugs, though not necessarily all the drugs in each category or class. Any formulary used by a Part D prescription drug plan must bedeveloped and reviewed by a pharmacy and therapeutic committee. Government payment for some of the costs of prescription drugs may increase demand forour products for which we receive marketing approval. However, any negotiated prices for our future products covered by a Part D prescription drug plan willlikely be lower than the prices we might otherwise obtain from non-governmental payors. Moreover, while the MMA applies only to drug benefits forMedicare beneficiaries, private payors often follow Medicare coverage policy and payment limitations in setting their own payment rates. Any reduction inpayment that results from Medicare Part D may result in a similar reduction in payments from non-governmental payors.Moreover, on November 27, 2013, the federal Drug Supply Chain Security Act was signed into law, which imposes new obligations on manufacturers ofpharmaceutical products, among others, related to product tracking and tracing. Among the requirements of this new federal legislation, manufacturers will berequired to provide certain information regarding the drug product to individuals and entities to which product ownership is transferred, label drug productwith a product identifier, and keep certain records regarding the drug product. Further, under this new legislation, manufacturers will have drug productinvestigation, quarantine, disposition, and notification responsibilities related to counterfeit, diverted, stolen, and intentionally adulterated products, as wellas products that are the subject of fraudulent transactions or which are otherwise unfit for distribution such that they would be reasonably likely to result inserious health consequences or death.Furthermore, political, economic and regulatory influences are subjecting the healthcare industry in the U.S. to fundamental change. Initiatives to reduce thefederal budget and debt and to reform healthcare coverage are increasing cost-containment efforts. We anticipate that Congress, state legislatures and theprivate sector will continue to review and assess alternative healthcare benefits, controls on healthcare spending through limitations on the growth of privatehealth insurance premiums and Medicare and Medicaid spending, the creation of large insurance purchasing groups, price controls on pharmaceuticals andother fundamental changes to the healthcare delivery system. Any proposed or actual changes could limit or eliminate our spending on development projectsand affect our ultimate profitability. In March 2010, PPACA was signed into law. PPACA has the potential to substantially change the way healthcare isfinanced by both governmental and private insurers. Among other cost containment measures, PPACA established: an annual, nondeductible fee on anyentity that manufactures or imports certain branded prescription drugs and biologic agents; revised the methodology by which rebates owed bymanufacturers to the state and federal government for covered outpatient drugs under the Medicaid Drug Rebate Program are calculated; increased theminimum Medicaid rebates owed by most manufacturers under the Medicaid Drug Rebate Program; and extended the Medicaid Drug Rebate program toutilization of prescriptions of individuals enrolled in Medicaid managed care organizations. In the future, there may continue to be additional proposalsrelating to the reform of the U.S. healthcare system, some of which could further limit the prices we are able to charge for our products, or the amounts ofreimbursement available for our products. If future legislation were to impose direct governmental price controls and access restrictions, it could have asignificant adverse impact on our business. Managed care organizations, as well as Medicaid and other government agencies, continue to seek pricediscounts. Some states have implemented, and other states are considering, price controls or patient access constraints under the Medicaid program, and somestates are considering price-control regimes that would apply to broader segments of their populations that are not Medicaid-eligible. Due to the volatility inthe current economic and market dynamics, we are unable to predict the impact of any unforeseen or unknown legislative, regulatory, payor or policy actions,which may include cost containment and healthcare reform measures. Such policy actions could have a material adverse impact on our profitability.49 Regulation in ChinaThe pharmaceutical industry in China is highly regulated. The primary regulatory authority is the NMPA, including its provincial and local branches. As adeveloper, manufacturer and supplier of drugs, we are subject to regulation and oversight by the NMPA and its provincial and local branches. The DrugAdministration Law of China provides the basic legal framework for the administration of the production and sale of pharmaceuticals in China and covers themanufacturing, distributing, packaging, pricing and advertising of pharmaceutical products. Its implementing regulations set forth detailed rules with respectto the administration of pharmaceuticals in China. In addition, we are, and we will be, subject to other Chinese laws and regulations that are applicable tobusiness operators, manufacturers and distributors in general.Pharmaceutical Clinical DevelopmentA new drug must be approved by the NMPA before it can be manufactured and marketed for sale. To obtain NMPA approval, the applicant must conductclinical trials, which must be approved by the NMPA and are subject to the NMPA’s supervision and inspection. There are four phases of clinical trials.Application for registration of new drugs requires completion of Phase 1, 2 and 3 of clinical trials, similar to the U.S. In addition, the NMPA may require theconduct of Phase 4 studies as a condition to approval.Phase 4 studies are post-marketing studies to assess the therapeutic effectiveness of and adverse reactions to the new drug, including an evaluation of thebenefits and risks, when used among the general population or specific groups, with findings used to inform adjustments to dosage, among other things.NDA and Approval to MarketChina requires approval of the NDA as well as the manufacturing facility before a drug can be marketed in China. Approval and oversight are performed atnational and provincial levels of the NMPA, involve multiple agencies and consist of various stages of approval.Under the applicable drug registration regulations, drug registration applications are divided into three different types, namely Domestic NDA, DomesticGeneric Drug Application, and Imported Drug Application. Drugs fall into one of three categories, namely chemical medicine, biological product ortraditional Chinese or natural medicine.FibroGen Beijing as a domestic entity has submitted a Domestic NDA under the Domestic Class 1 designation, which refers to a new drug which has neverbeen marketed in any country.In order to obtain market authorization, FibroGen Beijing has submitted to the NMPA an NDA package that contains information similar to what is necessaryfor a U.S. NDA, including preclinical data, clinical data, technical data on API and drug product, and related stability data. The stability data has beengenerated from a three-batch registration campaign that was conducted at our Beijing facility, from which samples were successfully tested by the NationalInstitutes for Food and Drug Control.The NDA package was found acceptable to the NMPA, and FibroGen Beijing was granted a New Drug License confirming the drug as suitable for marketingin December 2018. In addition, FibroGen Beijing was granted a Manufacturing License which lists the Drug Approval Code as well as the name and addressof the Manufacturing License holder. Manufacturing further requires a PPP as well as cGMP certification. In 2014, we received a PPP certifying that ourmanufacturing facility and manufacturing process in that facility are suitable for the manufacture of a drug for clinical or commercial purposes, but we willneed to apply for another PPP for our Cangzhou manufacturing facility currently under construction. A PPP requires demonstration that the facility has:(i) legally qualified pharmaceutical and engineering professionals and necessary technical workers; (ii) the premises, facilities and hygienic environmentrequired for drug manufacturing; (iii) institutions, personnel, instruments and equipment necessary to conduct quality control and testing for drugs to beproduced; and (iv) rules and regulations to ensure the quality of drugs. The PPP is required prior to conducting the registration campaign for stability andother data for the NDA.Shortly before NDA approval, FibroGen Beijing conducted a three-batch validation campaign, one of which was observed onsite by the NMPA. Followingthe successful completion of the validation campaign and associated inspection, FibroGen Beijing was granted a cGMP certification for the commercialproduction of roxadustat at our Beijing manufacturing facility. We plan to use drug product from our FibroGen Beijing manufacturing facility for commercialsupply. We expect our Cangzhou manufacturing facility to be qualified and licensed for manufacture of roxadustat API for the China market later in 2019.Pricing, Reimbursement, Hospital Listing, and TenderingPlease see the “Commercialization” discussion above in the section “Roxadustat for the Treatment of Anemia in Chronic Kidney Disease in China.”50 Device RegulationIn China, medical devices are classified into three different categories, Class I, Class II and Class III, depending on the degree of risk associated with eachmedical device and the extent of control needed to ensure safety and effectiveness. Classification of a medical device is important because the class to whicha medical device is assigned determines, among other things, whether a manufacturer needs to obtain a production permit and whether clinical trials arerequired. Classification of a medical device also determines the types of registration required and the level of regulatory authority involved in effecting theproduct registration. In January 2016, we received the NMPA’s (then the China Food and Drug Administration) approval of our device classificationapplication to designate FG-5200 corneal implants as a Domestic Class III medical device. Class III devices also require product registration and are regulatedby the NMPA under the strictest regulatory control.Before a Class III medical device can be manufactured for commercial distribution, a manufacturer must effect medical device registration by proving thesafety and effectiveness of the medical device to the satisfaction of respective levels of the NMPA and clinical trials are required for registration of Class IIImedical devices. In order to conduct a clinical trial on a Class III medical device, the NMPA requires manufacturers to apply for and obtain in advance afavorable inspection result for the device from an inspection center jointly recognized by the NMPA and the State Administration of Quality Supervision,Inspection and Quarantine. The application for clinical trials involving a Class III medical device with high risk must be approved by the NMPA before themanufacturer may begin clinical trials. A registration application for a Class III medical device must provide required pre-clinical and clinical trial data andinformation about the medical device and its components regarding, among other things, device design, manufacturing and labeling. The NMPA mustprovide the application data to the technical evaluation institute for an evaluation opinion within three working days after its acceptance of the applicationpackage and decide, within twenty business days after its receipt of the evaluation opinion, whether the application for registration is approved. However, thetime for conducting any detection, expert review and hearing process, if necessary, will not be counted in the abovementioned time limit. If the NMPArequires supplemental information, the approval process may take much longer. The registration is valid for five years and application is required for renewalupon expiration of the existing registration certificate. Once a device is approved, a manufacturer must possess a production permit from the provincial levelfood and drug administration before manufacturing Class III medical devices.Foreign Regulation Outside of ChinaWe are planning on seeking approval for roxadustat, and potentially for our other product candidates, in Europe, Japan and China as well as other countries.In order to market any product outside of the U.S., we would need to comply with numerous and varying regulatory requirements of other countries andjurisdictions regarding quality, safety and efficacy and governing, among other things, clinical trials, manufacturing, marketing authorization, commercialsales and distribution of our products. Whether or not we obtain FDA approval for a product, we would need to obtain the necessary approvals by thecomparable foreign regulatory authorities before we can commence clinical trials or marketing of the product in foreign countries and jurisdictions. Althoughmany of the issues discussed above with respect to the U.S. apply similarly in the context of other countries we are seeking approval in, including Europe andChina, the approval process varies between countries and jurisdictions and can involve different amounts of product testing and additional administrativereview periods. For example, in Europe, a sponsor must submit a CTA, much like an IND prior to the commencement of human clinical trials. A CTA must besubmitted to each national health authority and an independent ethics committee.For other countries outside of the EU, such as China and the countries in Eastern Europe, Latin America or Asia, the requirements governing the conduct ofclinical trials, product licensing, pricing, and reimbursement vary from country to country. The time required to obtain approval in other countries andjurisdictions might differ from or be longer than that required to obtain FDA approval. Regulatory approval in one country or jurisdiction does not ensureregulatory approval in another, but a failure or delay in obtaining regulatory approval in one country or jurisdiction may negatively impact the regulatoryapproval process in other countries.51 Regulatory Exclusivity for Approved ProductsU.S. Patent Term RestorationDepending upon the timing, duration, and specifics of the FDA approval of our product candidates, some of our U.S. patents may be eligible for limitedpatent term extension under the Drug Price Competition and Patent Term Restoration Act of 1984, commonly referred to as the Hatch-Waxman Act. TheHatch-Waxman Act permits a patent restoration term of up to five years as compensation for patent term lost during product development and the FDAregulatory review process. The patent term restoration period is generally one-half the time between the effective date of an initial IND and the submissiondate of an NDA or BLA, plus the time between the submission date of the NDA or BLA and the approval of that product candidate application. Patent termrestoration cannot, however, extend the remaining term of a patent beyond a total of 14 years from the product’s approval date. In addition, only one patentapplicable to an approved product is eligible for the extension and the application for the extension must be submitted prior to the expiration of the patent.The U.S. Patent and Trademark Office, in consultation with the FDA, reviews and approves applications for any patent term extension or restoration. In thefuture, we expect to apply for restoration of patent term for patents relating to each of our product candidates in order to add patent life beyond the currentexpiration date of such patents, depending on the length of the clinical trials and other factors involved in the filing of the relevant NDA or BLA.Market exclusivity provisions under the FDCA can also delay the submission or the approval of certain applications of companies seeking to referenceanother company’s NDA or BLA. The Hatch-Waxman Act provides a 5-year period of exclusivity to any approved NDA for a product containing a NCE neverpreviously approved by FDA either alone or in combination with another active moiety. No application or abbreviated NDA directed to the same NCE maybe submitted during the 5-year exclusivity period, except that such applications may be submitted after four years if they contain a certification of patentinvalidity or non-infringement of the patents listed with the FDA by the innovator NDA.Biologic Price Competition and Innovation ActThe Biologics Price Competition and Innovation Act of 2009 (“BPCIA”), established an abbreviated pathway for the approval of biosimilar andinterchangeable biological products. The abbreviated regulatory approval pathway establishes legal authority for the FDA to review and approve biosimilarbiologics, including the possible designation of a biosimilar as “interchangeable” based on similarity to an existing branded product. Under the BPCIA, anapplication for a biosimilar product cannot be approved by the FDA until 12 years after the original branded product was approved under a BLA. However,an application may be submitted after four years if it contains a certification of patent invalidity or non-infringement to one of the patents listed with the FDAby the innovator BLA holder. The BPCIA is complex and is only beginning to be interpreted and implemented by the FDA. As a result, its ultimate impact,implementation, and interpretation are subject to uncertainty.Orphan Drug ActPamrevlumab has received orphan drug designation in IPF in the U.S. Under the Orphan Drug Act, the FDA may grant orphan designation to a drug orbiological product intended to treat a rare disease or condition, which is a disease or condition that affects fewer than 200,000 individuals in the U.S., or if itaffects more than 200,000 individuals in the U.S. there is no reasonable expectation that the cost of developing and making a drug product available in theU.S. for this type of disease or condition will be recovered from sales of the product. Orphan product designation must be requested before submitting anNDA. After the FDA grants orphan product designation, the identity of the therapeutic agent and its potential orphan use are disclosed publicly by the FDA.Orphan product designation does not convey any advantage in or shorten the duration of the regulatory review and approval process.If a product that has orphan designation subsequently receives the first FDA approval for the disease or condition for which it has such designation, theproduct is entitled to orphan product exclusivity, which means that the FDA may not approve any other applications to market the same drug or biologicalproduct for the same indication for seven years, except in limited circumstances, such as a showing of clinical superiority to the product with orphanexclusivity. The designation of such drug also entitles a party to financial incentives such as opportunities for grant funding towards clinical trial costs, taxadvantages and user-fee waivers. Competitors, however, may receive approval of different products for the indication for which the orphan product hasexclusivity or obtain approval for the same product but for a different indication for which the orphan product has exclusivity. Orphan product exclusivityalso could block the approval of one of our products for seven years if a competitor obtains approval of the same drug or biological product as defined by theFDA or if our drug candidate is determined to be contained within the competitor’s product for the same indication or disease. If a drug product designated asan orphan product receives marketing approval for an indication broader than what is designated, it may not be entitled to orphan product exclusivity in anyindication.Orphan designation status in the EU has similar but not identical benefits in that jurisdiction.52 Products receiving orphan designation in the EU can receive ten years of market exclusivity, during which time no similar medicinal product for the sameindication may be placed on the market. The ten-year market exclusivity may be reduced to six years if, at the end of the fifth year, it is established that theproduct no longer meets the criteria for orphan designation; for example, if the product is sufficiently profitable not to justify maintenance of marketexclusivity. Additionally, marketing authorization may be granted to a similar product for the same indication at any time if the second applicant canestablish that its product, although similar, is safer, more effective or otherwise clinically superior; the initial applicant consents to a second orphanmedicinal product application; or the initial applicant cannot supply enough orphan medicinal product. An orphan product can also obtain an additional twoyears of market exclusivity in the EU for pediatric studies. No extension to any supplementary protection certificate can be granted on the basis of pediatricstudies for orphan indications.Foreign Country Data ExclusivityThe EU also provides opportunities for additional market exclusivity. For example, in the EU, upon receiving marketing authorization, an NCE generallyreceives eight years of data exclusivity and an additional two years of market exclusivity. If granted, data exclusivity prevents regulatory authorities in theEU from referencing the innovator’s data to assess a generic application. During the additional two-year period of market exclusivity, a generic marketingauthorization can be submitted, and the innovator’s data may be referenced, but no generic product can be marketed until the expiration of the marketexclusivity.In China, there is also an opportunity for data exclusivity for a period of six years for data included in an NDA applicable to a NCE. According to theProvisions for Drug Registration, the Chinese government protects undisclosed data from drug studies and prevents the approval of an application made byanother company that uses the undisclosed data for the approved drug. In addition, if an approved drug manufactured in China qualifies as an innovativedrug, such as Domestic Class 1, and the NMPA determines that it is appropriate to protect public health with respect to the safety and efficacy of the approveddrug, the NMPA may elect to monitor such drug for up to five years. During this post-marketing observation period, the NMPA will not grant approval toanother company to produce, change dosage form of or import the drug while the innovative drug is under observation. The approved manufacturer isrequired to provide an annual report to the regulatory department of the province, autonomous region or municipality directly under the central governmentwhere it is located. Each of the data exclusivity period and the observation period runs from the date of approval for production of the NCE or innovativedrug, as the case may be.INTELLECTUAL PROPERTYOur success depends in part upon our ability to obtain and maintain patent and other intellectual property protection for our product candidates includingcompositions-of-matter, dosages, and formulations, manufacturing methods, and novel applications, uses and technological innovations related to ourproduct candidates and core technologies. We also rely on trade secrets, know-how and continuing technological innovation to further develop and maintainour competitive position.Our policy is to seek to protect our proprietary position by, among other methods, filing U.S. and foreign patent applications related to our proprietarytechnologies, inventions and any improvements that we consider important to the development and implementation of our business and strategy. Our abilityto maintain and solidify our proprietary position for our products and technologies will depend, in part, on our success in obtaining and enforcing validpatent claims. Additionally, we may benefit from a variety of regulatory frameworks in the U.S., Europe, China, and other territories that provide periods ofnon-patent-based exclusivity for qualifying drug products. Refer to “Government Regulation — Regulatory Exclusivity for Approved Products.”We cannot ensure that patents will be granted with respect to any of our pending patent applications or with respect to any patent applications that may befiled by us in the future, nor can we ensure that any of our existing or subsequently granted patents will be useful in protecting our drug candidates,technological innovations, and processes. Additionally, any existing or subsequently granted patents may be challenged, invalidated, circumvented orinfringed. We cannot guarantee that our intellectual property rights or proprietary position will be sufficient to permit us to take advantage of current markettrends or otherwise to provide or protect competitive advantages. Furthermore, our competitors may be able to independently develop and commercializesimilar products, or may be able to duplicate our technologies, business model, or strategy, without infringing our patents or otherwise using our intellectualproperty.Our extensive worldwide patent portfolio includes multiple granted and pending patent applications relating to roxadustat and pamrevlumab. Currentlygranted patents relating to composition-of-matter for roxadustat and for pamrevlumab are expected, for each product candidate, to expire in 2024 or 2025, ineach case exclusive of any patent term extension that may be available. U.S. and foreign patents relating to crystalline forms of roxadustat are expected toexpire in 2033, exclusive of any extension. Additional patents and patent applications relating to manufacturing processes, formulations, and varioustherapeutic uses, including treatment of specific indications and improvement of clinical parameters, provide further protection for product candidates.53 The protection afforded by any particular patent depends upon many factors, including the type of patent, scope of coverage encompassed by the grantedclaims, availability of extensions of patent term, availability of legal remedies in the particular territory in which the patent is granted, and validity andenforceability of the patent. Changes in either patent laws or in the interpretation of patent laws in the U.S. and other countries could diminish our ability toprotect our inventions and to enforce our intellectual property rights. Accordingly, we cannot predict with certainty the enforceability of any granted patentclaims or of any claims that may be granted from our patent applications.The biotechnology and pharmaceutical industries are characterized by extensive litigation regarding patents and other intellectual property rights. Ourability to maintain and solidify our proprietary position for our products and core technologies will depend on our success in obtaining effective claims andenforcing those claims once granted. We have been in the past and are currently involved in various administrative proceedings with respect to our patentsand patent applications and may, as a result of our extensive portfolio, be involved in such proceedings in the future. Additionally, in the future, we mayclaim that a third party infringes our intellectual property or a third party may claim that we infringe its intellectual property. In any of the administrativeproceedings or in litigation, we may incur significant expenses, damages, attorneys’ fees, costs of proceedings and experts’ fees, and management andemployees may be required to spend significant time in connection with these actions.Because of the extensive time required for clinical development and regulatory review of a product candidate we may develop, it is possible that any patentrelated to our product candidates may expire before any of our product candidates can be commercialized, or may remain in force for only a short period oftime following commercialization, thereby reducing the advantage afforded by any such patent.The patent positions for our most advanced programs are summarized below.Roxadustat Patent PortfolioOur roxadustat patent portfolio includes multiple granted U.S. patents offering protection for roxadustat, including protection for roxadustat composition-of-matter, for pharmaceutical compositions containing roxadustat, and for methods for treating anemia using roxadustat or its analogs. Exclusive of any patentterm extension, the granted U.S. patents relating to the composition-of-matter of roxadustat are due to expire in 2024 or 2025, and granted foreign patents aredue to expire in 2024. U.S. and foreign patents relating to crystalline forms of roxadustat are due to expire in 2033.We believe that, if roxadustat is approved, a full five-year patent term extension under the Hatch-Waxman act will be available for a granted U.S. patentrelating to roxadustat, which extension would expire in 2029 or 2030, depending on the patent extended. Refer to “Government Regulation — RegulatoryExclusivity for Approved Products — U.S. Patent Term Restoration.”We also hold various U.S. and foreign granted patents and pending patent applications directed to manufacturing processes, formulations, and methods foruse of roxadustat.Roxadustat China Patent PortfolioOur roxadustat China patent portfolio includes granted patents covering roxadustat composition-of-matter, pharmaceutical compositions, methods of use,and manufacturing processes for roxadustat, as well as medicaments containing roxadustat for treating anemia and other conditions. Patents relating toroxadustat composition-of-matter and crystalline forms are due to expire in 2024 and 2033, respectively.We believe that roxadustat, as a new chemical entity, would be eligible for six years of data exclusivity in China. Furthermore, upon approval as a new drug,roxadustat may receive up to five years of market exclusivity under a NMPA-imposed new drug monitoring period. Refer to “Government Regulation —Regulatory Exclusivity for Approved Products — Foreign Country Data Exclusivity.”HIF Anemia-related Technologies Patent PortfolioWe also have an extensive worldwide patent portfolio providing broad protection for proprietary technologies relating to the treatment of anemia andassociated conditions. This portfolio currently contains granted patents and pending patent applications providing exclusivity for use of compounds fallingwithin various and overlapping classes of HIF-PH inhibitors to achieve various therapeutic effects.54 This portfolio reflects a series of discoveries we made from the initial days of our HIF program through the present time. Our research efforts have resulted inprogressive innovation, and the corresponding patents and patent applications reflect the success of our HIF program. Such discoveries include the ability ofHIF-PH inhibitors: •To induce endogenous EPO in anemic CKD patients. •To increase efficacy of EPO signaling. •To enhance EPO responsiveness of the bone marrow, for example, by increasing EPO receptor expression. •To overcome the suppressive and inhibitory effects of inflammatory cytokines, such as members of the interleukin-1 and IL-6 cytokinefamilies, on EPO production and responsiveness. •To increase effective metabolism of iron. •To increase iron absorption and bioavailability, as measured using clinical parameters such as percent TSAT%. •To overcome iron deficiency through effects on iron regulatory factors such as ferroportin and hepcidin. •To provide coordinated erythropoiesis resulting in increased CHr and increased mean corpuscular volume. •To improve kidney function.The table below sets forth representative granted U.S. patents relating to these and other inventions, including the projected expiration dates of these patents. PATENT NO. TITLE DUE TO EXPIRE 6,855,510 Pharmaceuticals and Methods for Treating Hypoxia and Screening Methods Therefor July 2022 8,466,172 Stabilization of Hypoxia Inducible Factor (HIF) Alpha December 2022 8,629,131 Enhanced Erythropoiesis and Iron Metabolism June 2024 8,604,012 Enhanced Erythropoiesis and Iron Metabolism June 2024 8,609,646 Enhanced Erythropoiesis and Iron Metabolism June 2024 8,604,013 Enhanced Erythropoiesis and Iron Metabolism June 2024 8,614,204 Enhanced Erythropoiesis and Iron Metabolism June 2026 7,713,986 Compounds and Methods for Treatment of Chemotherapy-Induced Anemia June 2026 8,318,703 Methods for Improving Kidney Function February 2027 In addition to the U.S. patents listed above, our HIF anemia-related technologies portfolio includes corresponding foreign patents granted and patentapplications pending in various territories worldwide.Akebia and others have filed oppositions against certain European patents corresponding to some of the above-listed cases. In three of these proceedings, forFibroGen European Patent Nos. 1463823, 1633333, and 2322155, the European Patent Office has handed down decisions unfavorable to FibroGen. In thefourth of these proceedings, the European Patent Office issued a decision favorable to FibroGen, maintaining FibroGen European Patent No. 2322153. Thesedecisions are currently under appeal, and these four patents are valid and enforceable pending resolution of the appeals. The ultimate outcomes of suchproceedings remain uncertain, and ultimate resolution of such may take two to four years or longer. Akebia is also pursuing invalidation actions againstcorresponding patents in Canada and in Japan, and invalidation actions against corresponding patents in the United Kingdom have been initiated by GSKand by Akebia. While we believe these FibroGen patents will be upheld in relevant part, we note that narrowing or even revocation of any of these patentswould not affect our exclusivity for roxadustat or our freedom-to-operate with respect to use of roxadustat for the treatment of anemia.55 Pamrevlumab Patent PortfolioOur pamrevlumab patent portfolio includes U.S. patents providing composition-of-matter protection for pamrevlumab and related antibodies, and formethods of using such in the treatment of fibroproliferative disorders, including IPF, liver fibrosis, and pancreatic cancer. Exclusive of any patent termextension, U.S. patents relating to pamrevlumab composition-of-matter are due to expire in 2024 or 2025. Corresponding foreign patents are due to expire,exclusive of any patent term extension, in 2024.We believe that, if pamrevlumab is approved, a full five-year patent term extension under the Hatch-Waxman act will be available for a granted patentrelating to pamrevlumab, which extension would expire in 2029 or 2030, depending on the patent extended . In addition, we believe that pamrevlumab, ifapproved under a BLA, should qualify for the 12-year period of exclusivity currently permitted by the BPCIA. Refer to “Government Regulation —Regulatory Exclusivity for Approved Products.”We also hold additional granted U.S. and foreign patents and pending patent applications directed to the use of pamrevlumab to treat IPF, DMD, pancreaticcancer, liver fibrosis, and other disorders.Trade Secrets and Know-HowIn addition to patents, we rely upon proprietary trade secrets and know-how and continuing technological innovation to develop and maintain ourcompetitive position. We seek to protect our proprietary information, in part, using confidentiality and other terms in agreements with our commercialpartners, collaboration partners, consultants and employees. Such agreements are designed to protect our proprietary information, and may also grant usownership of technologies that are developed through a relationship with a third party, such as through invention assignment provisions. Agreements mayexpire and we could lose the benefit of confidentiality, or our agreements may be breached and we may not have adequate remedies for any breach. Inaddition, our trade secrets may otherwise become known or be independently discovered by competitors.To the extent that our commercial partners, collaboration partners, employees and consultants use intellectual property owned by others in their work for us,disputes may arise as to the rights in related or resulting know-how and inventions.In-LicensesDana-Farber Cancer InstituteEffective March 2006, we entered into a license agreement with the Dana-Farber Cancer Institute (“DFCI”), under which we obtained an exclusive license tocertain patent applications, patents and biological materials for all uses. The patent rights relate to inhibition of prolyl hydroxylation of the alpha subunit ofhypoxia-inducible factor (HIFα), and include granted U.S. and foreign patents due to expire in 2022, exclusive of possible patent term extension. Thelicensed patents relate to use of HIF-PH inhibitors such as roxadustat.Under the DFCI agreement, we are obligated to pay DFCI for past and ongoing patent prosecution expenses for the licensed patents. We are also obligated topay DFCI annual maintenance fees, development milestone payments of up to $425,000, sales milestone payments of up to $3 million, and a sub-single-digitroyalty on net sales by us or our affiliates or sublicensees of products that are covered by the licensed patents or incorporate the licensed biological materials.In addition, each sublicense we grant is subject to a one-time fixed amount payment to DFCI.Unless earlier terminated, the agreement will continue in effect, on a country-by-country basis, until the expiration of all licensed patents in a country or, ifthere is no patent covering a licensed product incorporating the licensed biological materials, until 20 years after the effective date of the agreement. DFCImay terminate the agreement for our uncured material breach, if we cease to carry on our business and development activities with respect to all licensedproducts, if we fail to comply with our insurance obligations, or if we are convicted of a felony related to the manufacture, use, sale or importation of licensedproducts. We may terminate the agreement at any time on prior written notice to DFCI.56 University of MiamiIn May 1997, we entered into a license agreement with the University of Miami (the “University”), amended in July 1999, under which we obtained anexclusive, worldwide license to certain patent applications and patents for all uses. The current patent rights include U.S. and foreign patents that relate tobiologically active fragments of CTGF, and corresponding nucleic acids, proteins, and antibodies, and are due to expire in 2019 and 2022, exclusive of anypatent term extension or adjustment that may be available. The licensed patents relate to pamrevlumab and related products.Under the University agreement, we are obligated to pay for all ongoing patent prosecution expenses for the licensed patents. We were also obligated to payan upfront licensing fee of $21,500, all of which has been paid, and development milestone payments of up to $450,000, of which $50,000 has been paid, aswell as an additional milestone payment, in the low hundreds of thousands of dollars, for each new indication for which we obtain approval for a licensedproduct, and a single digit royalty, subject to certain reductions, on net sales of licensed products by us or our affiliates or sublicensees.Unless earlier terminated, the agreement will continue in effect, on a country-by-country basis, until the expiration of all licensed patents in a country. TheUniversity may terminate the agreement for our uncured material breach or bankruptcy. We may terminate the agreement for the University’s uncuredmaterial breach or at any time on prior written notice to the University.Bristol-Myers Squibb Company (Medarex, Inc.)Effective July 9, 1998 and as amended on June 30, 2001 and January 28, 2002, we entered into a research and commercialization agreement with Medarex,Inc. and its wholly-owned subsidiary GenPharm International, Inc. (now, collectively, part of Bristol-Myers Squibb Company (“Medarex”)) to develop fullyhuman monoclonal antibodies for potential anti-fibrotic therapies. Under the agreement, Medarex was responsible for using its proprietary immunizabletransgenic mice (“HuMAb-Mouse technology”) during a specified research period (“the Research Period”), to produce fully human antibodies against ourproprietary antigen targets, including CTGF, for our exclusive use.The agreement granted us an option to obtain an exclusive worldwide, royalty-bearing, commercial license to develop antibodies derived from Medarex’sHuMAb-Mouse technology, for use in the development and commercialization of diagnostic and therapeutic products. In December 2002, we exercised thatoption with respect to twelve antibodies inclusive of the antibody from which pamrevlumab is derived. We granted back to Medarex an exclusive,worldwide, royalty-free, perpetual, irrevocable license, with the right to sublicense, to certain inventions created during the parties’ research collaboration,with such license limited to use by Medarex outside the scope of our licensed antibodies.As a result of the exercise of our option to obtain the commercial license, Medarex is precluded from (i) knowingly using any technology involvingimmunizable transgenic mice containing unrearranged human immunoglobulin genes with any of our antigen targets that were the subject of the agreement,(ii) granting to a third party a commercial license that covers such antigen targets or those antibodies derived by Medarex during the Research Period, and(iii) using any antibodies derived by Medarex during the Research Period, except as permitted under the agreement for our benefit or to prosecute patentapplications in accordance with the agreement.Medarex retained ownership of the patent rights relating to certain mice, mice materials, antibodies and hybridoma cell lines used by Medarex in connectionwith its activities under the agreement, and Medarex also owns certain claims in patents covering inventions that arise during the Research Period, whichclaims are directed to (i) compositions of matter (e.g., an antibody) except formulations of antibodies for therapeutic or diagnostic use, or (ii) methods ofproduction. We own the patent rights to any inventions that arise during the Research Period that relate to antigens, as well as claims in patents coveringinventions directed to (a) methods of use of an antibody, or (b) formulations of antibodies for therapeutic or diagnostic use. Upon exercise of our option toobtain the commercial license, we obtained the sole right but not obligation to control prosecution of patents relating solely to the licensed antibodies orproducts. Medarex has back-up patent prosecution rights in the event we decline to further prosecute or maintain such patents.In addition to research support payments by us to Medarex during the Research Period, and an upfront commercial license fee in the form of 181,819 sharesof FibroGen Series D Convertible Preferred Stock paid upon exercise of our option, we committed development-related milestone payments of up to $11million per therapeutic product containing a licensed antibody, and we have paid a $1 million development-related milestone, in the form of 133,333 sharesof FibroGen Series G Convertible Preferred Stock, for pamrevlumab to date. At our election, the remaining milestone payments may be paid in common stockof FibroGen, Inc., or cash.57 With respect to our sales and sales by our affiliates, the agreement also requires us to pay Medarex low single-digit royalties for licensed therapeutic productsand low double-digit royalties plus certain capped sales-based bonus royalties for licensed diagnostic products. With respect to sales of licensed products bya sublicensee, we may elect to pay the foregoing royalties based on our sublicensee’s sales, or a percentage (in the high-teens) of all payments received by usfrom such sublicensee. We are also required to reimburse Medarex any pass-through royalties, if any, payable under Medarex’s upstream license agreementswith Medical Research Council and DNX. Royalties payable by us under the agreement are on a licensed product-by-licensed product and country-by-country basis and subject to reductions in specified circumstances, and royalties are payable for a period until either expiration of patents covering theapplicable licensed product or a specified number of years following the first commercial sale of such product in the applicable country.Unless earlier terminated, the agreement will continue in effect for as long as there are royalty payment obligations by us or our sublicensees. Either partymay terminate the agreement for certain material breaches by the other party, or for bankruptcy, insolvency or similar circumstances. In addition, we may alsoterminate the agreement for convenience upon written notice.Third Party FilingsNumerous U.S. and foreign issued patents and pending patent applications, which are owned by third parties, exist in the fields in which we are developingproducts. Because patent applications can take many years to issue, there may be currently pending applications, unknown to us, which may later result ingranted patents that use of our product candidates or proprietary technologies may infringe.If a third party claims that we infringe its intellectual property rights, we may face a number of issues, including but not limited to, litigation expenses,substantial damages, attorney fees, injunction, royalty payments, cross-licensing of our patents, redesign of our products, or processes and related fees andcosts.We may be exposed to, or threatened with, future litigation by third parties having patent or other intellectual property rights alleging that our products,product candidates, and/or proprietary technologies infringe their intellectual property rights. If one of these patents were to be found to cover our products,product candidates, proprietary technologies, or their uses, we could be required to pay damages and could be restricted from commercializing our products,product candidates or using our proprietary technologies unless we obtain a license to the patent. A license may not be available to us on acceptable terms, ifat all. In addition, during litigation, the patent holder might obtain a preliminary injunction or other equitable right, which could prohibit us from making,using or selling our products, technologies, or methods.EMPLOYEESAs of January 31, 2019, we had 461 full-time employees, 135 of whom held Ph.D. or M.D. degrees, 359 of whom were engaged in research and developmentand 102 of whom were engaged in business development, finance, information systems, facilities, human resources or administrative support. None of ourU.S. employees are represented by a labor union. The employees of FibroGen Beijing are represented by a labor union under the China Labor Union Law.None of our employees have entered into a collective agreement with us. We consider our employee relations to be good.FACILITIESOur corporate and research and development operations are located in San Francisco, California, where we lease approximately 234,000 square feet of officeand laboratory space with approximately 35,000 square feet subleased. The lease for our San Francisco headquarters expires in 2023. We also leaseapproximately 67,000 square feet of office and manufacturing space in Beijing, China. Our lease in China expires in 2021. We are constructing a commercialmanufacturing facility of approximately 5,500 square meters in Cangzhou, China, on approximately 33,000 square meters of land. Our right to use such landexpires in 2068. We believe our facilities are adequate for our current needs and that suitable additional or substitute space would be available if needed.LEGAL PROCEEDINGSWe are not currently a party to any material legal proceedings.FINANCIAL INFORMATIONInformation regarding our revenues, net loss and total assets is contained in our consolidated financial statements under Item 8 of this Annual Report, whichinformation is incorporated by reference here. For the specifics of our segment and geographic revenue, refer to Note 14 to our consolidated financialstatements.58 Research and development expenses for fiscal years ended December 31, 2018, 2017 and 2016 were $235.8 million, $196.5 million, and $187.2 million,respectively. We expect our research and development expenses to continue to increase in the future as we advance our product candidates through clinicaltrials and expand our product candidate portfolio.Our revenue to date has been generated primarily from our collaboration agreements with Astellas and AstraZeneca for the development andcommercialization of roxadustat. For fiscal years ended December 31, 2018, 2017 and 2016, substantially all of our revenue was related to our collaborationagreements.AVAILABLE INFORMATIONOur internet website address is www.fibrogen.com. In addition to the information about us and our subsidiaries contained in this Annual Report, informationabout us can be found on our website. Our website and information included in or linked to our website are not part of this Annual Report.Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant toSection 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), are available free of charge through our website as soon asreasonably practicable after they are electronically filed with or furnished to the Securities and Exchange Commission (“SEC”). The public may read andcopy the materials we file with the SEC at the SEC’s Public Reference Room at 100 F Street, NE, Washington, DC 20549. The public may obtain informationon the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. Additionally the SEC maintains an internet site that contains reports,proxy and information statements and other information. The address of the SEC’s website is www.sec.gov.CORPORATE INFORMATIONWe were incorporated in 1993 in Delaware. Our headquarters are located at 409 Illinois Street, San Francisco, California 94158 and our telephone number is(415) 978-1200. Our website address is www.FibroGen.com. The information contained on, or that can be accessed through, our website is not part of, and isnot incorporated into, this Annual Report.Our subsidiaries consist of the following: 1) FibroGen Europe Oy (“FibroGen Europe”), a majority owned entity incorporated in Finland in 1996; 2) SkinSciences, Inc., a majority owned entity incorporated in the State of Delaware in 1995; 3) FibroGen International (Cayman) Limited, a wholly owned entityincorporated in the Cayman Islands in 2011; 4) FibroGen China Anemia Holdings Ltd., a majority owned entity incorporated in the Cayman Islands in 2012;5) FibroGen International (Hong Kong) Limited, a majority owned entity incorporated in Hong Kong in 2011; and 6) FibroGen (China) Medical TechnologyDevelopment Co., Ltd., a majority owned entity incorporated in China in 2011.“FibroGen,” the FibroGen logo and other trademarks or service marks of FibroGen, Inc. appearing in this Annual Report are the property of FibroGen, Inc.This Annual Report contains additional trade names, trademarks and service marks of others, which are the property of their respective owners. We do notintend our use of display of other companies’ trade names, trademarks or service marks to imply a relationship with, or endorsement or sponsorship of us by,these other companies.59 ITEM 1A. RISK FACTORSInvesting in our common stock involves a high degree of risk. You should carefully consider the risks described below in addition to the other informationincluded or incorporated by reference in this Annual Report on Form 10-K, including our consolidated financial statements and the related notes and“Management’s Discussion and Analysis of Financial Condition and Results of Operations,” before deciding whether to invest in our common stock. Theoccurrence of any of the events or developments described below could harm our business, financial condition, results of operations and growth prospects.In such an event, the market price of our common stock could decline, and you may lose all or part of your investment. Although we have discussed allknown material risks, the risks described below are not the only ones that we may face. Additional risks and uncertainties not presently known to us or thatwe currently deem immaterial may also impair our business operations.Risks Related to Our Financial Condition and History of Operating LossesWe have incurred significant losses since our inception and anticipate that we will continue to incur losses for the foreseeable future and may neverachieve or sustain profitability. We may require additional financings in order to fund our operations.We are a clinical-stage biopharmaceutical company with two lead product candidates in clinical development, roxadustat in anemia in chronic kidneydisease (“CKD”) and myelodysplastic syndromes (“MDS”), and pamrevlumab (FG-3019) in idiopathic pulmonary fibrosis (“IPF”), pancreatic cancer andDuchenne muscular dystrophy (“DMD”). Pharmaceutical product development is a highly risky undertaking. To date, we have focused our efforts and mostof our resources on hypoxia-inducible factor (“HIF”) and fibrosis biology research, as well as developing our lead product candidates. We are not profitableand, other than in 2006 and 2007 due to income received from our Astellas Pharma Inc. (“Astellas”) collaboration, have incurred losses each year since ourinception. We have not generated any revenue based on commercial drug product sales to date. We continue to incur significant research and developmentand other expenses related to our ongoing operations. Our net loss for the year ended December 31, 2018 was approximately $86.4 million, and our net lossfor the years ended December 31, 2017, and 2016, recast from amounts previously reported due to the adoption of the new revenue standards, wereapproximately $120.9 million and $58.1 million, respectively. As of December 31, 2018, we had an accumulated deficit of $715.8 million. As of December31, 2018, we had capital resources consisting of cash, cash equivalents and short-term investments of $621.4 million plus $55.8 million of long-terminvestments classified as available for sale securities. Despite contractual development and cost coverage commitments from our collaboration partners,AstraZeneca AB (“AstraZeneca”) and Astellas, and the potential to receive milestone and other payments from these partners, and despite our expectation tolaunch commercialization efforts in China for roxadustat for the treatment of anemia caused by CKD in dialysis patients, we anticipate we will continue toincur losses for the foreseeable future, and we anticipate these losses will increase as we continue our development of and seek regulatory approval for ourproduct candidates and in our commercialization efforts. If we do not successfully develop and obtain regulatory approval for our existing or any futureproduct candidates and effectively manufacture, market and sell any product candidates that are approved, we may never generate product sales, and even ifwe do generate product sales, we may never achieve or sustain profitability on a quarterly or annual basis. Our prior losses, combined with expected futurelosses, have had and will continue to have an adverse effect on our stockholders’ equity and working capital. Our failure to become and remain profitablewould depress the market price of our common stock and could impair our ability to raise capital, expand our business, diversify our product offerings orcontinue our operations.We believe that we will continue to expend substantial resources for the foreseeable future as we continue late-stage clinical development of roxadustat, growour operations in the People’s Republic of China (“China”), expand our clinical development efforts on pamrevlumab, seek regulatory approval, prepare forthe commercialization of our product candidates, and pursue additional indications. These expenditures will include costs associated with research anddevelopment, conducting preclinical trials and clinical trials, obtaining regulatory approvals in various jurisdictions, and manufacturing and supplyingproducts and product candidates for ourselves and our partners. In particular, in our planned Phase 3 clinical trial program for roxadustat, which we believewill be the largest Phase 3 program ever conducted for an anemia product candidate, we are expecting to enroll more than 8,000 patients for our U.S. andEuropean programs alone. We are conducting this Phase 3 program in conjunction with Astellas and AstraZeneca, and we are substantially dependent onAstellas and AstraZeneca for the funding of this large program. The outcome of any clinical trial and/or regulatory approval process is highly uncertain andwe are unable to fully estimate the actual costs necessary to successfully complete the development and regulatory approval process for our compounds indevelopment and any future product candidates. We believe that the net proceeds from our 2017 public offerings, our existing cash and cash equivalents,short-term and long-term investments and accounts receivable, and expected third party collaboration revenues will allow us to fund our operating plansthrough at least the next 12 months. Our operating plans or third party collaborations may change as a result of many factors, which are discussed in moredetail below, and other factors that may not currently be known to us, and we therefore may need to seek additional funds sooner than planned, throughofferings of public or private securities, debt financings or other sources, such as royalty monetization or other structured financings. Such financings mayresult in dilution to stockholders, imposition of debt covenants and repayment obligations, or other restrictions that may adversely affect our business. Wemay also seek additional capital due to favorable market conditions or strategic considerations even if we currently believe that we have sufficient funds forour current or future operating plans.60 Our future funding requirements will depend on many factors, including, but not limited to: •the rate of progress in the development of our product candidates; •the costs of development efforts for our product candidates, such as pamrevlumab, that are not subject to reimbursement from our collaborationpartners; •the costs necessary to obtain regulatory approvals, if any, for our product candidates in the United States (“U.S.”), China and otherjurisdictions, and the costs of post-marketing studies that could be required by regulatory authorities in jurisdictions where approval isobtained; •the continuation of our existing collaborations and entry into new collaborations; •the time and unreimbursed costs necessary to commercialize products in territories in which our product candidates are approved for sale; •the revenues from any future sales of our products as well as revenue earned from profit share, royalties and milestones; •the level of reimbursement or third party payor pricing available to our products; •the costs of establishing and maintaining manufacturing operations and obtaining third party commercial supplies of our products, if any,manufactured in accordance with regulatory requirements; •the costs we incur in maintaining domestic and foreign operations, including operations in China; •regulatory compliance costs; •the costs of our commercialization efforts for roxadustat for the treatment of anemia caused by CKD in dialysis patients in China; and •the costs we incur in the filing, prosecution, maintenance and defense of our extensive patent portfolio and other intellectual property rights.Additional funds may not be available when we require them, or on terms that are acceptable to us. If adequate funds are not available to us on a timely basis,we may be required to delay, limit, reduce or terminate our research and development efforts or other operations or activities that may be necessary tocommercialize our product candidates.All of our recent revenue has been earned from collaboration partners for our product candidates under development.Substantially all of our revenues recognized in recent years have been from our collaboration partners.We will require substantial additional capital to achieve our development and commercialization goals, which for our lead product candidate, roxadustat, iscurrently contemplated to be provided under our existing third party collaborations with Astellas and AstraZeneca.If either or both of these collaborations were to be terminated, we could require significant additional capital in order to proceed with development andcommercialization of our product candidates, including with respect to our expected commercialization for roxadustat for the treatment of anemia caused byCKD in dialysis patients in China, or we may require additional partnering in order to help fund such development and commercialization. If adequate fundsor partners are not available to us on a timely basis or on favorable terms, we may be required to delay, limit, reduce or terminate our research anddevelopment efforts or other operations.If we are unable to continue to progress our development efforts and achieve milestones under our collaboration agreements, our revenues may decreaseand our activities may fail to lead to commercial products.Substantially all of our revenues to date have been, and a significant portion of our future revenues are expected to be, derived from our existingcollaboration agreements. Revenues from research and development collaborations depend upon continuation of the collaborations, reimbursement ofdevelopment costs, the achievement of milestones and royalties and profits from our product sales, if any, derived from future products developed from ourresearch. If we are unable to successfully advance the development of our product candidates or achieve milestones, revenues under our collaborationagreements will be substantially less than expected.61 Risks Related to the Development and Commercialization of Our Product CandidatesWe are substantially dependent on the success of our lead product candidate, roxadustat, and our second compound in development, pamrevlumab.To date, we have invested a substantial portion of our efforts and financial resources in the research and development of roxadustat and pamrevlumab. Whilewe have received approval of our NDA for roxadustat in China for CKD anemia in dialysis patients, we will need to make substantial additional investmentsin both the development and commercialization of roxadustat worldwide and in various indications. Our near-term prospects, including maintaining ourexisting collaborations with Astellas and AstraZeneca, will depend heavily on successful Phase 3 development and commercialization of roxadustat,including the commercialization of roxadustat for anemia associated with CKD in dialysis dependent patients in China, expected during the second half of2019.Our other lead product candidate, pamrevlumab, is currently in clinical development for IPF, pancreatic cancer and DMD. Pamrevlumab requires substantialfurther development and investment. We do not have a collaboration partner for support of this compound, and, while we have promising open-label safetydata and potential signals of efficacy, we would need to complete larger and more extensive controlled clinical trials to validate the results to date in order tocontinue further development of this product candidate. In addition, although there are many potentially promising indications beyond IPF, pancreaticcancer and DMD, we are still exploring indications for which further development of, and investment for, pamrevlumab may be appropriate. Accordingly, thecosts and time to complete development and related risks are currently unknown. Moreover, pamrevlumab is a monoclonal antibody, which may requireexperience and expertise that we may not currently possess as well as financial resources that are potentially greater than those required for our smallmolecule lead compound, roxadustat.The clinical and commercial success of roxadustat and pamrevlumab will depend on a number of factors, many of which are beyond our control, and wemay be unable to complete the development or commercialization of roxadustat or pamrevlumab.The clinical and commercial success of roxadustat and pamrevlumab will depend on a number of factors, including the following: •the timely completion of data analyses from our Phase 3 clinical trials for roxadustat, which will depend substantially upon requirements forsuch trials imposed by the U.S. Food and Drug Administration (“FDA”) and other regulatory agencies and bodies and the continuedcommitment and coordinated and timely performance by our third party collaboration partners, AstraZeneca and Astellas; •the timely initiation and completion of our Phase 2 and Phase 3 clinical trials for pamrevlumab, including in IPF, pancreatic cancer and DMD; •our ability to demonstrate the safety and efficacy of our product candidates to the satisfaction of the relevant regulatory authorities; •whether we are required by the FDA or other regulatory authorities to conduct additional clinical trials, and the scope and nature of suchclinical trials, prior to approval to market our products; •the timely receipt of necessary marketing approvals from the FDA and foreign regulatory authorities, including pricing and reimbursementdeterminations; •the ability to successfully commercialize our product candidates, if approved, for marketing and sale by the FDA or foreign regulatoryauthorities, whether alone or in collaboration with others; •our ability and the ability of our third party manufacturing partners to manufacture quantities of our product candidates at quality levelsnecessary to meet regulatory requirements and at a scale sufficient to meet anticipated demand at a cost that allows us to achieve profitability; •our success in educating health care providers and patients about the benefits, risks, administration and use of our product candidates, ifapproved; •acceptance of our product candidates, if approved, as safe and effective by patients and the healthcare community; •the success of efforts to enter into relationships with large dialysis organizations involving the administration of roxadustat to dialysis patients; •the achievement and maintenance of compliance with all regulatory requirements applicable to our product candidates; •the maintenance of an acceptable safety profile of our products following any approval; •the availability, perceived advantages, relative cost, relative safety, and relative efficacy of alternative and competitive treatments;62 •our ability to obtain and sustain an adequate level of pricing or reimbursement for our products by third party payors; •our ability to enforce successfully our intellectual property rights for our product candidates and against the products of potential competitors;and •our ability to avoid or succeed in third party patent interference or patent infringement claims.Many of these factors are beyond our control. Accordingly, we cannot assure you that we will ever be able to achieve profitability through the sale of, orroyalties from, our product candidates. If we or our collaboration partners are not successful in obtaining approval for and commercializing our productcandidates, or are delayed in completing those efforts, our business and operations would be adversely affected.If our commercialization efforts for roxadustat in China are unsuccessful, our business, financial condition and results of operations will be materiallyharmed.We have invested and continue to invest a significant portion of our efforts and financial resources in the development, approval and now commercializationof roxadustat for the treatment of anemia caused by CKD in dialysis patients in China, as well as in other indications and other geographic regions. With themarketing authorization received from the National Medical Products Administration (“NMPA”) of roxadustat for the treatment of anemia caused by CKD indialysis patients in China, we plan to launch commercialization efforts in China in the third quarter of 2019 with our commercialization partner AstraZeneca.Our success of commercialization of roxadustat in China will depend on numerous factors in China, including: •our success in the marketing, sales, and distribution of the product along with our collaboration partner AstraZeneca; •our success in negotiating a cost effective reimbursed price with the government in China; •acceptance of roxadustat by state-owned and state-controlled hospitals, physicians, patients and the healthcare community; •acceptance of pricing and placement of roxadustat on China’s Medical Insurance Catalogs. Refer to “Business – Government Regulation –Regulation in China”; •successfully establishing and maintaining commercial manufacturing with third parties; •successfully manufacturing our drug substances and drug products through our subsidiary FibroGen (China) Medical TechnologyDevelopment Co., Ltd. (“FibroGen Beijing”); •receiving market authorization for roxadustat for anemia caused by CKD in non-dialysis patients; •our success in arranging for and passing the inspection of our clinical sites by the NMPA; •whether AstraZeneca is able to recruit and retain adequate numbers of effective sales and marketing personnel for the sale of roxadustat; •whether we can compete successfully as a new entrant in the treatment of anemia caused by CKD in dialysis patients in China; and •whether we will maintain sufficient funding to cover the costs and expenses associated with creating and sustaining a capable sales andmarketing organization and related commercial infrastructure.Successful commercialization of roxadustat will require significant resources and time, and there is a risk that we may not successfully commercializeroxadustat. If we do not achieve one or more of these factors in a timely manner or at all, we could experience significant delays or an inability to successfullycommercialize roxadustat and generate revenues, which would deprive us from additional working capital and would materially harm our business. If we donot successfully commercialize roxadustat in China, our collaboration partners and third parties may also lose confidence in our ability to execute incommercialization efforts and become less likely to collaborate with us, and our business may be harmed.63 As a Company, we have no commercialization experience, and the time and resources to develop such experience are significant. If we fail to achieve andsustain commercial success for roxadustat in China, either directly or with AstraZeneca, our business would be harmed.Commercializing roxadustat in China with AstraZeneca will require us to establish commercialization systems, including but not limited to, medical affairs,sales, pharmacovigilance, supply-chain, and distribution capabilities to perform our portion of the collaborative efforts. These efforts will require resourcesand time. In particular, significant resources may be necessary to successfully market, sell and distribute roxadustat to patients with anemia caused by CKD indialysis patients. If we, along with AstraZeneca, are not successful in setting our marketing, pricing and reimbursement strategy, facilitating adoption byhospitals in China, recruiting sales and marketing personnel or in building a sales and marketing infrastructure, we will have difficulty commercializingroxadustat, which would adversely affect our business and financial condition.As we evolve from a company primarily involved in research and development to a company potentially involved in commercialization, we may encounterdifficulties in managing our growth and expanding our operations successfully.If we are successful in advancing roxadustat and our other product candidates through the development stage towards commercialization, we will need toexpand our organization, including adding marketing and sales capabilities or continuing to contract with third parties to provide these capabilities for us.As our operations expand, we expect that we will also need to manage our existing and additional relationships with various collaborative partners, suppliersand other third parties. Future growth will impose significant added responsibilities on our organization, in particular on management. Our future financialperformance and our ability to commercialize roxadustat and our other product candidates and to compete effectively will depend, in part, on our ability tomanage any future growth effectively. To that end, we may not be able to manage our growth efforts effectively, and hire, train and integrate additionalmanagement, administrative and sales and marketing personnel, and our failure to accomplish any of these activities could prevent us from successfullygrowing our company.Although FibroGen Beijing obtained regulatory approval for roxadustat in China in December 2018, we may be unable to obtain regulatory approval forour product candidates in other countries, or such approval may be delayed or limited, due to a number of factors, many of which are beyond our control.The clinical trials and the manufacturing of our product candidates are and will continue to be, and the marketing of our product candidates will be, subjectto extensive and rigorous review and regulation by numerous government authorities in the U.S. and in other countries where we intend to develop and, ifapproved, market any product candidates. Before obtaining regulatory approval for the commercial sale of any product candidate, we must demonstratethrough extensive preclinical trials and clinical trials that the product candidate is safe and effective for use in each indication for which approval is sought.The regulatory review and approval process is expensive and requires substantial resources and time, and in general very few product candidates that enterdevelopment receive regulatory approval. In addition, our collaboration partners for roxadustat have final control over development decisions in theirrespective territories and they may make decisions with respect to development or regulatory authorities that delay or limit the potential approval ofroxadustat, or increase the cost of development or commercialization. Accordingly, we may be unable to successfully develop or commercialize roxadustat orpamrevlumab or any of our other product candidates.Even though FibroGen Beijing obtained regulatory approval for roxadustat in China, we have not obtained regulatory approval for any of our productcandidates in other countries and it is possible that roxadustat and pamrevlumab will never receive regulatory approval in other countries. Other regulatoryauthorities may take actions or impose requirements that delay, limit or deny approval of roxadustat or pamrevlumab for many reasons, including, amongothers: •our failure to adequately demonstrate to the satisfaction of regulatory authorities that roxadustat is safe and effective in treating anemia in CKDor that pamrevlumab is safe and effective in treating IPF, pancreatic cancer or DMD; •our failure to demonstrate that a product candidate’s clinical and other benefits outweigh its safety risks; •the determination by regulatory authorities that additional clinical trials are necessary to demonstrate the safety and efficacy of roxadustat orpamrevlumab, or that ongoing clinical trials need to be modified in design, size, conduct or implementation; •our product candidates may exhibit an unacceptable safety signal as they advance through clinical trials, in particular controlled Phase 3 trials; •the clinical research organizations (“CROs”) that conduct clinical trials on our behalf may take actions outside of our control that materiallyadversely impact our clinical trials; •we or third party contractors manufacturing our product candidates may not maintain current good manufacturing practices (“cGMP”),successfully pass inspection or meet other applicable manufacturing regulatory requirements;64 •regulatory authorities may not agree with our interpretation of the data from our preclinical trials and clinical trials; •collaboration partners may not perform or complete their clinical programs in a timely manner, or at all; or •principal investigators may determine that one or more serious adverse events (“SAEs”), is related or possibly related to roxadustat, and anysuch determination may adversely affect our ability to obtain regulatory approval, whether or not the determination is correct.Any of these factors, many of which are beyond our control, could jeopardize our or our collaboration partners’ abilities to obtain regulatory approval for andsuccessfully market roxadustat. Because our business and operations in the near-term are almost entirely dependent upon roxadustat, any significant delaysor impediments to regulatory approval could have a material adverse effect on our business and prospects.In China, the NMPA required that FibroGen Beijing conduct three clinical studies as a post-approval commitment: (i) a post-approval safety study in 2,000patients; (ii) a drug-intensive monitoring study in 1,000 patients; and (iii) a dosing optimization study in approximately 300 patients on dialysis.Furthermore, in the U.S., we also expect to be required to perform additional clinical trials in order to obtain approval or as a condition to maintainingapproval due to post-marketing requirements. If the FDA requires a risk evaluation and mitigation strategy (“REMS”), for any of our product candidates ifapproved, the substantial cost and expense of complying with a REMS or other post-marketing requirements may limit our ability to successfullycommercialize our product candidates.Preclinical, Phase 1 and Phase 2 clinical trial results may not be indicative of the results that may be obtained in larger, controlled Phase 3 clinical trialsrequired for approval.Clinical development is expensive and can take many years to complete, and its outcome is inherently uncertain. Failure can occur at any time during theclinical trial process. Success in preclinical and early clinical trials, which are often highly variable and use small sample sizes, may not be predictive ofsimilar results in humans or in larger, controlled clinical trials, and successful results from early or small clinical trials may not be replicated or show asfavorable an outcome, even if successful.We have conducted a limited number of Phase 2 clinical trials with pamrevlumab. We have conducted a randomized placebo-controlled study in 103 IPFpatients with sub-studies in an additional 57 IPF patients comparing pamrevlumab to one of two standards of care, an open-label Phase 2 dose escalationstudy of pamrevlumab for IPF in 89 patients and a randomized double-blind placebo controlled study for liver fibrosis in subjects with hepatitis B, and we arecurrently conducting an open-label randomized, active-control, neoadjuvant Phase 2 trial in pancreatic cancer combining pamrevlumab with nab-paclitaxelplus gemcitabine in 37 patients. We cannot be sure that the results we have received to date from these trials will be substantiated in larger, well-controlledPhase 3 clinical trials, that larger trials will demonstrate the safety and efficacy of pamrevlumab for these or other indications, that further studies will providebenefits over existing approved products or that new safety issues will not be uncovered in further trials. In addition, while we believe that the limited animaland human studies conducted to date suggest that pamrevlumab has the potential to arrest or reverse fibrosis and reduce tumor mass in some patients ordiseases, we cannot be sure that these results will be indicative of the effects of pamrevlumab in larger human trials. In addition, the IPF and pancreatic cancerpatient populations are extremely ill and routinely experience SAEs, including death, which may be attributed to pamrevlumab in a manner that negativelyimpacts the safety profile of our product candidate. If the additional clinical trials that we are planning or are currently conducting for pamrevlumab do notshow favorable efficacy results or result in safety concerns, or if we do not meet our clinical endpoints with statistical significance, or demonstrate anacceptable risk-benefit profile, we may be prevented from or delayed in obtaining regulatory approval for pamrevlumab in one or both of these indications.65 In the past we developed an earlier generation product candidate aimed at treating anemia in CKD that resulted in a clinical hold for a safety signal seen inthat product in Phase 2 clinical trials. The clinical hold applied to that product candidate and roxadustat was lifted for both product candidates aftersubmission of the requested information to the FDA. While we have not seen similar safety concerns involving roxadustat to date, some of the safety concernsassociated with the treatment of patients with anemia in CKD using erythropoiesis stimulating agents (“ESAs”) did not emerge for many years until placebo-controlled studies had been conducted in large numbers of patients. And while the data monitoring committee for our U.S. and Europe Phase 3 anemia trialshas consistently determined that our trials should continue without modification to the protocol, safety issues may still be discovered upon review ofunblinded major adverse cardiac event (“MACE”) or other data. The biochemical pathways that we believe are affected by roxadustat are implicated in avariety of biological processes and disease conditions, and it is possible that the use of roxadustat to treat larger numbers of patients will demonstrateunanticipated adverse effects, including possible drug interactions, which may negatively impact the safety profile, use and market acceptance of roxadustat.We studied the potential interaction between roxadustat and three statins (atorvastatin, rosuvastatin and simvastatin), which are used to lower levels of lipidsin the blood. An adverse effect associated with increased statin plasma concentration is myopathy, which typically presents in a form of myalgia. The studiesindicated the potential for increased exposure to those statins when roxadustat is taken simultaneously with those statins and suggested the need for statindose reductions for patients receiving higher statin doses. We performed additional clinical pharmacology studies to evaluate if the effect of any suchinteraction could be minimized or eliminated by a modification of the dosing schedule that would separate the administration of roxadustat and the statin byup to 10 hours, however, such studies showed no minimization of effect. It is possible that the potential for interaction between roxadustat and statins couldlead to label provisions for statins or roxadustat relating, for example, to dose scheduling or recommended statin dose limitations. In CKD patients, statintherapy is often initiated earlier than treatment for anemia, and risks of myopathy have been shown to decrease with increased time on drug. While we believethe prior statin treatment history of such patients at established doses may reduce the risk of adverse effects from any interaction with roxadustat and facilitateany appropriate dose adjustments, we cannot be sure that this will be the case.Our Phase 3 trials include a MACE safety endpoint, which is a composite endpoint designed to identify major safety concerns, in particular relating tocardiovascular events such as cardiovascular death, myocardial infarction and stroke. In addition, we expect that our Phase 3 clinical trials supportingapproval in Europe will be required to include MACE+ as a safety endpoint which, in addition to the MACE endpoints, also incorporates measurements ofhospitalization rates due to heart failure or unstable angina. As a result, our ongoing Phase 3 clinical trials may identify unanticipated safety concerns in thepatient population under study. The FDA has also informed us that the MACE endpoint will need to be evaluated separately for our Phase 3 trials in non-dialysis dependent (“NDD”)-CKD patients and our Phase 3 trials in dialysis dependent (“DD”)-CKD patients. The MACE endpoint will be evaluated inpooled analysis across Phase 3 studies of similar study populations and requires demonstration of non-inferiority relative to comparator, which means that theMACE event rate in roxadustat-treated patients must have less than a specified probability of exceeding the rate in the comparator trial by a specified hazardratio. The number of patients necessary in order to permit a statistical analysis with adequate ability to detect the relative risk of MACE or MACE+ events indifferent arms of the trial, referred to as statistical power, depends on a number of factors, including the rate at which MACE or MACE+ events occur perpatient-year in the trial, treatment duration of the patients, the required hazard ratio, and the required statistical power and confidence intervals.In addition, we cannot be sure that the potential advantages we believe roxadustat may have for treatment of patients with anemia in CKD, as compared to theuse of ESAs, will be substantiated by our larger U.S. and European Phase 3 clinical trials, or that we will be able to include a discussion of such advantages inour labeling should we obtain approval. We believe that roxadustat may have certain benefits as compared to ESAs based on the data from our Phase 2clinical trials and China Phase 3 trials conducted to date, including safety benefits, the absence of a hypertensive effect, the potential to lower cholesterollevels and the potential to correct anemia without the use of IV iron. However, our belief that roxadustat may offer those benefits is based on a limited amountof data from our clinical trials to date, and our understanding of the likely mechanisms of action for roxadustat. Some of these benefits, such as thoseassociated with the apparent effects on blood pressure and cholesterol, are not fully understood and, even if roxadustat receives marketing approval inadditional countries beyond China, we do not expect that it will be approved for the treatment of high blood pressure or high cholesterol based on the datafrom our Phase 3 trials, and we may not be able to refer to any such benefits in the labeling. While the data from our Phase 2 trials suggests roxadustat mayreduce low-density lipoprotein (“LDL”), and reduce the ratio of LDL to high-density lipoprotein (“HDL”), the data show it may also reduce HDL, which maybe a risk to patients. In addition, causes of the safety concerns associated with the use of ESAs to achieve specified target hemoglobin levels have not beenfully elucidated. While we believe that the issues giving rise to these concerns with ESAs are likely due to factors other than the hemoglobin levels achieved,we cannot be certain that roxadustat will not be associated with similar, or more severe, safety concerns.66 Many companies in the pharmaceutical and biotechnology industries have suffered significant setbacks in late-stage clinical trials after achieving positiveresults in early-stage development, and we may face similar setbacks. In addition, the CKD patient population has many afflictions that may cause severeillness or death, which may be attributed to roxadustat in a manner that negatively impacts the safety profile of our product candidate. The results of ourcompleted Phase 3 clinical trials for roxadustat demonstrated efficacy, as all primary efficacy endpoints were met with statistical significance. The analysis ofadverse events for reporting of MACE is ongoing; there may be unanticipated safety concerns or adverse events that prevent from or delay obtainingmarketing approval for roxadustat, and even if we obtain marketing approval, any sales of roxadustat may suffer.We do not know whether our ongoing or planned Phase 3 clinical trials in roxadustat or Phase 2 clinical trials in pamrevlumab will need to be redesignedbased on interim results, be able to achieve sufficient enrollment or be completed on schedule, if at all.Clinical trials can be delayed or terminated for a variety of reasons, including delay or failure to: •address any physician or patient safety concerns that arise during the course of the trial; •obtain required regulatory or institutional review board (“IRB”) approval or guidance; •reach timely agreement on acceptable terms with prospective CROs and clinical trial sites; •recruit, enroll and retain patients through the completion of the trial; •maintain clinical sites in compliance with clinical trial protocols; •initiate or add a sufficient number of clinical trial sites; and •manufacture sufficient quantities of product candidate for use in clinical trials.In addition, we could encounter delays if a clinical trial is suspended or terminated by us, by the relevant IRBs at the sites at which such trials are beingconducted, or by the FDA or other regulatory authorities. A suspension or termination of clinical trials may result from any number of factors, includingfailure to conduct the clinical trial in accordance with regulatory requirements or our clinical protocols, inspection of the clinical trial operations or trial siteby the FDA or other regulatory authorities resulting in the imposition of a clinical hold, unforeseen safety issues or adverse side effects, changes in laws orregulations, or a principal investigator’s determination that a serious adverse event could be related to our product candidates. Any delays in completing ourclinical trials will increase the costs of the trial, delay the product candidate development and approval process and jeopardize our ability to commencemarketing and generate revenues. Any of these occurrences may materially and adversely harm our business and operations and prospects.Our product candidates may cause or have attributed to them undesirable side effects or have other properties that delay or prevent their regulatoryapproval or limit their commercial potential.Undesirable side effects caused by our product candidates or that may be identified as related to our product candidates by physician investigatorsconducting our clinical trials or even competing products in development that utilize a similar mechanism of action or act through a similar biologicaldisease pathway could cause us or regulatory authorities to interrupt, delay or halt clinical trials and could result in the delay or denial of regulatory approvalby the FDA or other regulatory authorities and potential product liability claims. Adverse events and SAEs that emerge during treatment with our productcandidates or other compounds acting through similar biological pathways may be deemed to be related to our product candidate and may result in: •our Phase 3 clinical trial development plan becoming longer and more extensive; •regulatory authorities increasing the data and information required to approve our product candidates and imposing other requirements; and •our collaboration partners terminating our existing agreements.The occurrence of any or all of these events may cause the development of our product candidates to be delayed or terminated, which could materially andadversely affect our business and prospects. Refer to “Business — Our Development Program for Roxadustat” and “Business — Pamrevlumab for theTreatment of Fibrosis and Cancer” for a discussion of the adverse events and SAEs that have emerged in clinical trials of roxadustat and pamrevlumab.67 Clinical trials of our product candidates may not uncover all possible adverse effects that patients may experience.Clinical trials are conducted in representative samples of the potential patient population, which may have significant variability. Clinical trials are bydesign based on a limited number of subjects and of limited duration for exposure to the product used to determine whether, on a potentially statisticallysignificant basis, the planned safety and efficacy of any product candidate can be achieved. As with the results of any statistical sampling, we cannot be surethat all side effects of our product candidates may be uncovered, and it may be the case that only with a significantly larger number of patients exposed to theproduct candidate for a longer duration, that a more complete safety profile is identified. Further, even larger clinical trials may not identify rare seriousadverse effects or the duration of such studies may not be sufficient to identify when those events may occur. There have been other products, includingESAs, for which safety concerns have been uncovered following approval by regulatory authorities. Such safety concerns have led to labeling changes orwithdrawal of ESAs products from the market. While our most advanced product candidate is chemically unique from ESAs, it or any of our productcandidates may be subject to similar risks. For example, roxadustat for use in anemia in CKD is being developed to address a very diverse patient populationexpected to have many serious health conditions at the time of administration of roxadustat, including diabetes, high blood pressure and declining kidneyfunction.To date we have not seen evidence of significant safety concerns with our product candidates currently in clinical trials. Patients treated with our products, ifapproved, may experience adverse reactions and it is possible that the FDA or other regulatory authorities may ask for additional safety data as a condition of,or in connection with, our efforts to obtain approval of our product candidates. If safety problems occur or are identified after our product candidates reachthe market, we may, or regulatory authorities may require us to amend the labeling of our products, recall our products or even withdraw approval for ourproducts.We may fail to enroll a sufficient number of patients in our clinical trials in a timely manner, which could delay or prevent clinical trials of our productcandidates.Identifying and qualifying patients to participate in clinical trials of our product candidates is critical to our success. The timing of our clinical trials dependson the rate at which we can recruit and enroll patients in testing our product candidates. Patients may be unwilling to participate in clinical trials of ourproduct candidates for a variety of reasons, some of which may be beyond our control: •severity of the disease under investigation; •availability of alternative treatments; •size and nature of the patient population; •eligibility criteria for and design of the study in question; •perceived risks and benefits of the product candidate under study; •ongoing clinical trials of competitive agents; •physicians’ and patients’ perceptions of the potential advantages of our product candidates being studied in relation to available therapies orother products under development; •our CRO’s and our trial sites’ efforts to facilitate timely enrollment in clinical trials; •patient referral practices of physicians; and •ability to monitor patients and collect patient data adequately during and after treatment.Patients may be unwilling to participate in our clinical trials for roxadustat due to adverse events observed in other drug treatments of anemia in CKD, andpatients currently controlling their disease with existing ESAs may be reluctant to participate in a clinical trial with an investigational drug. We may not beable to successfully initiate or continue clinical trials if we cannot rapidly enroll a sufficient number of eligible patients to participate in the clinical trialsrequired by regulatory agencies. If we have difficulty enrolling a sufficient number of patients to conduct our clinical trials as planned, we may need to delay,limit or terminate on-going or planned clinical trials, any of which could have a material and adverse effect on our business and prospects.68 If we or third party manufacturers and other service providers on which we rely cannot manufacture sufficient quantities of our product candidates, or atsufficient quality, or perform other services we require, we may experience delays in development, regulatory approval, launch or commercialization.Completion of our clinical trials and commercialization of our product candidates require access to, or development of, facilities to manufacture and manageour product candidates at sufficient yields and at commercial scale. Although we have entered into commercial supply agreements for the manufacture ofsome of our raw materials, we have not yet entered into commercial supply agreements with all of our third-party manufacturers. . We are continuing tonegotiate and expect to enter into commercial supply agreements and other supply management agreements with third-party manufacturers, but we may notbe able to enter into these agreements with satisfactory terms or on a timely manner.We have limited experience manufacturing or managing third parties in manufacturing any of our product candidates in the volumes that are expected to benecessary to support large-scale clinical trials and sales. In addition, we have limited experience forecasting supply requirements or coordinating supplychain (including export management) for launch or commercialization, which is a complex process involving our third-party manufacturers and logisticsproviders, and for roxadustat, our collaboration partners. We may not be able to accurately forecast supplies for commercial launch, or do so in a timelymanner and our efforts to establish these manufacturing and supply chain management capabilities may not meet our requirements as to quantities, scale-up,yield, cost, potency or quality in compliance with cGMP.We have a limited amount of roxadustat and pamrevlumab in storage, limited capacity reserved at our third-party manufacturers, and there are long lead timesrequired to manufacture and scale-up the manufacture of additional supply, as required for both late-stage clinical trials, post-approval trials, and commercialsupply. If we are unable to forecast, order or manufacture sufficient quantities of roxadustat or pamrevlumab on a timely basis, it may delay our development,launch or commercialization in some or all indications we are currently pursuing. For example, prior to agreement with regulatory authorities on the scope ofour Phase 3 IPF trial design, there is uncertainty as to whether our supply plans will meet our clinical requirements in a timely manner. Any delay orinterruption in the supply of our product candidates or products could have a material adverse effect on our business and operations.Our clinical trials must be conducted with product produced under applicable cGMP regulations. Failure to comply with these regulations may require us torepeat clinical trials, which would delay the regulatory approval process. We and even an experienced third party manufacturer may encounter difficulties inproduction, which difficulties may include: •costs and challenges associated with scale-up and attaining sufficient manufacturing yields, in particular for biologic products such aspamrevlumab, which is a monoclonal antibody; •supply chain issues, including coordination of multiple contractors in our supply chain and securing necessary licenses (such as exportlicenses); •the timely availability and shelf life requirements of raw materials and supplies; •quality control and assurance; •shortages of qualified personnel and capital required to manufacture large quantities of product; •compliance with regulatory requirements that vary in each country where a product might be sold; •capacity or forecasting limitations and scheduling availability in contracted facilities; and •natural disasters, such as floods, storms, earthquakes, tsunamis, and droughts, or accidents such as fire, that affect facilities, possibly limit orpostpone production, and increase costs.Even if we are able to obtain regulatory approval of our product candidates, the label we obtain may limit the indicated uses for which our productcandidates may be marketed.With respect to roxadustat, we expect that regulatory approvals, if obtained at all, will limit the approved indicated uses for which roxadustat may bemarketed, as ESAs have been subject to significant safety limitations on usage as directed by the “Black Box” warnings included in their labels. Refer to“Business — Roxadustat for the Treatment of Anemia in Chronic Kidney Disease — Limitations of the Current Standard of Care for Anemia in CKD”. Inaddition, in the past, an approved ESA was voluntarily withdrawn due to serious safety issues discovered after approval. The safety concerns relating to ESAsmay result in labeling for roxadustat containing similar warnings even if our Phase 3 clinical trials do not suggest that roxadustat has similar safety issues.Even if the label for roxadustat does not contain all of the warnings contained in the “Black Box” warning for ESAs, the label for roxadustat may containother warnings that limit the market opportunity for roxadustat. These warnings could include warnings against exceeding specified hemoglobin targets andother warnings that derive from the lack of clarity regarding the basis for the safety issues associated with ESAs, even if our Phase 3 clinical trials do notthemselves raise safety concerns.69 As an organization, we have not successfully commercialized any drug product. Therefore, we may not be able to efficiently execute our development andcommercialization plans.We are currently conducting Phase 2 clinical trials for pamrevlumab and plan on initiating Phase 3 clinical trials for pamrevlumab in the future. We haveinitiated Phase 3 clinical trials of roxadustat. The conduct of Phase 3 clinical trials and the submission of a successful New Drug Application (“NDA”) is acomplicated process. As an organization, we have not completed a Phase 3 clinical trial before outside of China, where we received marketing authorizationin December 2018 from the NMPA for the treatment of anemia caused by CKD in dialysis patients. We have limited experience in preparing, submitting andprosecuting regulatory filings, and have not received approval for an NDA before outside of China. Consequently, we may be unable to successfully andefficiently execute and complete necessary clinical trials in a way that leads to NDA submission and approval of roxadustat or for any other productcandidate we are developing, even if our earlier stage clinical trials are successful. We may require more time and incur greater costs than our competitors andmay not succeed in obtaining regulatory approvals of product candidates that we develop. Failure to commence or complete, or delays in, our plannedclinical trials would prevent us from or delay us in commercializing roxadustat or any other product candidate we are developing.In addition, in order for any Phase 3 clinical trial to support an NDA submission for approval, the FDA and foreign regulatory authorities require compliancewith regulations and standards, including good clinical practices (“GCP”) requirements for designing, conducting, monitoring, recording, analyzing, andreporting the results of clinical trials to ensure that the data and results from trials are credible and accurate and that the rights, integrity and confidentiality oftrial participants are protected. Although we rely on third parties to conduct our clinical trials, we as the sponsor remain responsible for ensuring that each ofthese clinical trials is conducted in accordance with its general investigational plan and protocol under legal and regulatory requirements, including GCP.Regulatory authorities enforce these GCP requirements through periodic inspections of trial sponsors, principal investigators and trial sites. If we or any ofour CROs, trial sites, principal investigators or other third parties fail to comply with applicable GCP requirements, the clinical data generated in our clinicaltrials may be deemed unreliable and the FDA or other regulatory authorities may require us to exclude the use of patient data from our clinical trials notconducted in compliance with GCP or perform additional clinical trials before approving our marketing applications. They may even reject our applicationfor approval or refuse to accept our future applications for an extended time period. For example in China in March 2016, the State Drug Administration, nowknown as the NMPA issued guidance related to its clinical trial data integrity regulations. While trial sites and CROs bear liability for the accuracy andauthenticity of data they are directly responsible for, the sponsor ultimately bears full responsibility for submitted clinical data and the drug applicationdossier. Fraudulent clinical data could result in a ban in China of a sponsor’s product-related NDA applications for three years and other NDA applications forone year. We have taken extensive steps to ensure the integrity of our China clinical data. In China, the clinical site inspections confirmed our compliancewith GCP regulations and supported our approval. However, we cannot assure you that upon inspection by a regulatory authority in other regions, suchregulatory authority will determine that any of our clinical trials comply with GCP requirements or that our results will be deemed authentic or may be usedin support of our regulatory submissions.If we are unable to establish sales, marketing and distribution capabilities or enter into or maintain agreements with third parties to market and sell ourproduct candidates, we may not be successful in commercializing our product candidates if and when they are approved.We do not have a sales or marketing infrastructure and have no experience in the sales, marketing or distribution of pharmaceutical products in any country.To achieve commercial success for any product for which we obtain marketing approval, we will need to establish sales and marketing capabilities or makeand maintain our existing arrangements with third parties to perform these services at a level sufficient to support our commercialization efforts.To the extent that we would undertake sales and marketing of any of our products directly, there are risks involved with establishing our own sales, marketingand distribution capabilities. Factors that may inhibit our efforts to commercialize our products on our own include: •our inability to recruit, train and retain adequate numbers of effective sales and marketing personnel; •the inability of sales personnel to obtain access to physicians or persuade adequate numbers of physicians to prescribe any future products; •our inability to effectively manage geographically dispersed sales and marketing teams; •the lack of complementary products to be offered by sales personnel, which may put us at a competitive disadvantage relative to companieswith more extensive product lines; and •unforeseen costs and expenses associated with creating an independent sales and marketing organization.70 With respect to roxadustat, we are dependent on the commercialization capabilities of our collaboration partners, AstraZeneca and Astellas. If either suchpartner were to terminate its agreement with us, we would have to commercialize on our own or with another third party. We will have limited or little controlover the commercialization efforts of such third parties, and any of them may fail to devote the necessary resources and attention to sell and market ourproducts, if any, effectively. If they are not successful in commercializing our product candidates, our business and financial condition would suffer.We face substantial competition, which may result in others discovering, developing or commercializing products before, or more successfully, than we do.The development and commercialization of new pharmaceutical products is highly competitive. Our future success depends on our ability to achieve andmaintain a competitive advantage with respect to the development and commercialization of our product candidates. Our objective is to discover, developand commercialize new products with superior efficacy, convenience, tolerability, and safety. We expect that in many cases, the products that wecommercialize will compete with existing, market-leading products of companies that have large, established commercial organizations.If roxadustat is approved and launched commercially, competing drugs are expected to include ESAs, particularly in those patient segments where ESAs areused. Currently available ESAs include epoetin alfa (EPOGEN ®, marketed by Amgen Inc. in the U.S., Procrit ® and Erypo ®/Eprex ®, marketed by Johnson &Johnson Inc., and Espo ® marketed by Kyowa Hakko Kirin in Japan and China), darbepoetin (Amgen/Kyowa Hakko Kirin’s Aranesp ® and NESP ®) andMircera ® marketed by Hoffmann-La Roche (“Roche”) outside of the U.S. and by Vifor Pharma (“Vifor”), a Roche licensee, in the U.S. and Puerto Rico, aswell as biosimilar versions of these currently marketed ESA products. ESAs have been used in the treatment of anemia in CKD for more than 20 years, servinga significant majority of DD-CKD patients. While NDD-CKD patients who are not under the care of nephrologists, including those with diabetes andhypertension, do not typically receive ESAs and are often left untreated, some patients under nephrology care may be receiving ESA therapy. It may bedifficult to encourage healthcare providers and patients to switch to roxadustat from products with which they have become familiar.We may also face competition from potential new anemia therapies currently in clinical development, including in those patient segments not currentlyaddressed by ESAs. Companies such as GlaxoSmithKline plc (“GSK”), Bayer Corporation (“Bayer”), Akebia Therapeutics, Inc. (“Akebia”), and JapanTobacco, are currently developing HIF prolyl hydroxylase (“HIF-PH”) inhibitors for anemia in CKD indications. Akebia is currently conducting Phase 3studies in NDD–CKD and DD-CKD, as well as additional Phase 1 and Phase 2 studies. In Japan, Mitsubishi Tanabe Pharmaceutical Corporation, Akebia’scollaboration partner, started a Phase 3 program in November 2017. GSK is conducting global Phase 3 studies in NDD-CKD and DD-CKD as well as JapanPhase 3 studies. GSK and Kyowa Hakko Kirin announced in November 2018 that the two companies signed a strategic commercialization deal in Japan fordaprodustat. Bayer has completed global Phase 2 studies and announced in May 2017 its HIF-PH inhibitor is now in continued development in Japan only,and its Japan Phase 3 studies in NDD-CKD and DD-CKD are underway. Japan Tobacco is also conducting Phase 3 studies in NDD-CKD and DD-CKD inJapan only. Some of these product candidates may enter the market prior to roxadustat.In addition, there are other companies developing biologic therapies for the treatment of other anemia indications that we may also seek to pursue in thefuture, including anemia of MDS. For example, Acceleron Pharma Inc., in partnership with Celgene Corporation (“Celgene”), is in Phase 3 development ofprotein therapeutic candidates to treat anemia and associated complications in patients with ß-thalassemia and MDS, and has received orphan drug statusfrom the European Medicines Agency (“EMA”) and FDA for these indications. Celgene announced in July 2018 that it plans to submit a marketing approvalapplication for luspatercept in the U.S. and European Union (“EU”) in the first half of 2019. There may also be new therapies for renal-related diseases thatcould limit the market or level of reimbursement available for roxadustat if and when it is commercialized.In China, biosimilars of epoetin alfa are offered by Chinese pharmaceutical companies such as EPIAO marketed by 3SBio Inc. as well as more than 15 otherlocal manufacturers. We may also face competition by HIF-PH inhibitors from other companies such as Akebia, Bayer, and GSK, which was authorized by theNMPA to conduct trials in China to support its ex-China regulatory filings. Furthermore, while it is too early to understand how the NMPA will implement itsrecently approved guidelines to allow multinational companies to use their ex-China clinical data in their NDAs in China, these guidelines could in theoryallow competitors to accelerate their NDA applications in China. Akebia announced in December 2015 that it has entered into a development andcommercialization partnership with Mitsubishi Tanabe Pharmaceutical Corporation for its HIF-PH inhibitor vadadustat in Japan, Taiwan, South Korea, India,and certain other countries in Asia, and announced in April 2017 an expansion of their U.S. collaboration with Otsuka to add markets, including China.3SBio Inc. also announced in 2016 its plan on beginning a Phase 1 clinical trial of a HIF-PH inhibitor for the China market.71 The first biosimilar ESAs, Pfizer’s Retacrit® (epoetin zeta), entered the U.S. market in November 2018. Market penetration of Retacrit® (epoetin zeta) and thepotential addition of other biosimilar ESAs, currently under development, may alter the competitive and pricing landscape of anemia therapy in DD-CKDpatients under the end stage renal disease bundle. The patents for Amgen’s epoetin alfa, EPOGEN, expired in 2004 in the EU, and the final material patents inthe U.S. expired in May 2015. Several biosimilar versions of currently marketed ESAs are available for sale in the EU, China and other territories. In the U.S.,a few ESA biosimilars are currently under development. Sandoz, a division of Novartis, markets Binocrit ® (epoetin alfa) in Europe and may file a biosimilarBiologics License Application (“BLA”) in the U.S.The majority of the current CKD anemia market focuses on dialysis patients, who visit dialysis centers on a regular basis, typically three-times a week, andanemia therapies are administered as part of the visit. Two of the largest operators of dialysis clinics in the U.S., DaVita Healthcare Partners Inc. (“DaVita”)and Fresenius Medical Care AG & Co. KGaA (“Fresenius”), collectively provide dialysis care to approximately 70% of U.S. dialysis patients, and thereforehave historically won long-term contracts including rebate terms with Amgen. In January 2017, DaVita entered into a new 6-year sourcing and supplyagreement with Amgen that is effective through 2022. Fresenius’ contract with Amgen expired in 2015, and Fresenius is now administering Mircera® in asignificant portion of its U.S. dialysis patients since Mircera was made available by Vifor. Successful penetration of this market may require a significantagreement with Fresenius or DaVita on favorable terms and on a timely basis.If pamrevlumab is approved and launched commercially to treat IPF, competing drugs are expected to include Roche’s Esbriet® (pirfenidone) andBoehringer Ingelheim Pharma GmbH & Co. KG’s Ofev® (nintedanib). Nintedanib is also in development for non-small cell lung cancer and ovarian cancer.Other potential competitive product candidates in development for IPF include Biogen-Idec’s BG-00011, Galapagos NV’s GLPG1690, Kadmon Holdings,Inc.’s KD025, Prometic Life Sciences Inc.’s PBI-4050, and Promedior Inc.’s PRM-151. Galapagos initiated a Phase 3 study for GLPG 1690 in December 2018.If pamrevlumab is approved and launched commercially to treat locally advanced pancreatic cancer patients who are not candidates for surgical resection,pamrevlumab may face competition from agents seeking approval in combination with gemcitibine and nab-paclitaxel from companies such as NewLinkGenetics Corporation and Halozyme Therapeutics, Inc. Gemcitabine and/or nab-paclitaxel are the current standard of care in the first-line treatment ofmetastatic pancreatic cancer. Celgene Corporation’s Abraxane ® (nab-paclitaxel) was launched in the U.S. and Europe in 2013 and 2014, and was the firstdrug approved in this disease in nearly a decade.If pamrevlumab is approved and launched commercially to treat DMD, pamrevlumab may face competition for some patients from Sarepta Therapeutics, Inc.(“Sarepta”), as well as PTC Therapeutics, Santhera Pharmaceuticals, and Catabasis Pharmaceuticals.Sarepta is researching and developing clinical candidates for many of the specific mutations in the dystrophin gene and received accelerated approval in theU.S. for its first, drug Exondys 51® (eteplirsen) for patients who have a confirmed mutation in the DMD gene that is amenable to exon 51 skipping. Thismutation represents a subset of approximately 13% of patients with DMD. Sarepta recently received a negative opinion from the EMA regarding its eteplirsenapplication in September 2018. In addition to etepliresen, Sarepta has two additional exon skipping programs in Phase 3 development, each of which targetsapproximately 8% of patients with DMD. Sarepta is also developing gene therapies for the treatment of DMD and reported positive preliminary results from aPhase 1/2a program in June 2018.Marathon Pharmaceuticals received approval for its drug Emflaza (deflazacort) on February 9, 2017 and on March 16, 2017 announced that it had sold thecommercialization rights to Emflaza to PTC Therapeutics.PTC Therapeutics’ product ataluren (Translarna TM) received conditional approval in Europe in 2014, which was renewed in November 2016 with a requestfor a new randomized placebo-controlled 18-month study by the Committee for Medicinal Products for Human Use of the EMA, while the FDA stated in itscomplete response letter in October of 2017 that the FDA is unable to approve the application in its current form. Translarna targets a different set of DMDpatients from those being targeted by Sarepta’s existing exon-skipping therapeutic candidate; however, it is also limited to a subset of patients who carry aspecific mutation.While pamrevlumab and some other potential competitors are intended to treat DMD patients regardless of the specific mutation, there can be no assurancethat clinical trials will support broadly treating DMD patients. For example, Santhera Pharmaceuticals reported positive Phase 3 data with its drug idebenone(Raxone ®/Catena ®) in a trial measuring changes in lung function for DMD patients, however the EMA rejected the application and the FDA has asked foradditional data from an ongoing trial prior to considering Raxone for approval. Santhera is currently conducting the additional Phase 3 study in the U.S. andEurope. 72 Catabasis Pharmaceuticals reported in April 2018 positive Phase 2 data from its clinical trial candidate edasalonexent. Edasalonexent was reported to havepreserved muscle function and slowed the progression of DMD compared to rates of change in the control period prior to treatment with edasalonexent. Thecompany started a single placebo controlled Phase 3 trial in September 2018. Catabasis expects topline data from this trial in the second quarter of 2020.The success of any or all of these potential competitive products may negatively impact the development and potential for success of pamrevlumab. Inaddition, any competitive products that are on the market or in development may compete with pamrevlumab for patient recruitment and enrollment forclinical trials or may force us to change our clinical trial design, including, in order to compare pamrevlumab against another drug, which may be the newstandard of care.If FG-5200 is approved and launched in China to treat corneal blindness resulting from partial thickness corneal damage without active inflammation andinfection, it is likely to compete with other products designed to treat corneal damage. For example, in April 2015, a subsidiary of China RegenerativeMedicine International Limited received approval for their acellular porcine cornea stroma medical device to treat patients in China with corneal ulcers andin April 2016, Guangzhou Yourvision Biotech Co. Ltd, a subsidiary of Guanhao Biotech, received approval for their acellular porcine cornea medical deviceto treat patients in China with infectious keratitis that does not respond to drug treatment.Moreover, many of our competitors have significantly greater resources than we do. Large pharmaceutical companies, in particular, have extensiveexperience in clinical testing, obtaining regulatory approvals, recruiting patients, manufacturing pharmaceutical products, and commercialization. In thepotential anemia market for roxadustat, for example, large and established companies such as Amgen and Roche, among others, compete aggressively tomaintain their market shares. In particular, the currently marketed ESA products are supported by large pharmaceutical companies that have greaterexperience and expertise in commercialization in the anemia market, including in securing reimbursement, government contracts and relationships with keyopinion leaders; conducting testing and clinical trials; obtaining and maintaining regulatory approvals and distribution relationships to market products;and marketing approved products. These companies also have significantly greater scale research and marketing capabilities than we do and may also haveproducts that have been approved or are in later stages of development, and have collaboration agreements in our target markets with leading dialysiscompanies and research institutions. These competitors have in the past successfully prevented new and competing products from entering the anemiamarket, and we expect that their resources will represent challenges for us and our collaboration partners, AstraZeneca and Astellas. If we and ourcollaboration partners are not able to compete effectively against existing and potential competitors, our business and financial condition may be materiallyand adversely affected.Our future commercial success depends upon attaining significant market acceptance of our product candidates, if approved, among physicians, patients,third party payors and others in the health care community.Even if we obtain marketing approval for roxadustat, pamrevlumab or any other product candidates that we may develop or acquire in the future in allindications and geographic regions, these product candidates may not gain market acceptance among physicians, third party payors, patients and others inthe health care community. Market acceptance of any approved product, including in roxadustat for the treatment of anemia caused by CKD in dialysispatients in China, depends on a number of other factors, including: •the clinical indications for which the product is approved and the labeling required by regulatory authorities for use with the product,including any warnings that may be required in the labeling; •acceptance by physicians and patients of the product as a safe and effective treatment and the willingness of the target patient population to trynew therapies and of physicians to prescribe new therapies; •the cost, safety, efficacy and convenience of treatment in relation to alternative treatments; •the restrictions on the use of our products together with other medications, if any; •the availability of adequate coverage and reimbursement or pricing by third party payors and government authorities; •the ability of treatment providers, such as dialysis clinics, to enter into relationships with us without violating their existing agreement; and •the effectiveness of our sales and marketing efforts.73 No or limited reimbursement or insurance coverage of our approved products, if any, by third party payors may render our products less attractive topatients and healthcare providers.Market acceptance and sales of any approved products will depend significantly on reimbursement or coverage of our products by the Chinese governmentor third party payors, and may be affected by existing and future healthcare reform measures or prices of related products for which the government or thirdparty reimbursement applies. Coverage and reimbursement by the government or a third party payor may depend upon a number of factors, including thepayor’s determination that use of a product is: •a covered benefit under its health plan; •safe, effective and medically necessary; •appropriate for the specific patient; •cost-effective; and •neither experimental nor investigational.The review and publication cycle for the Chinese government to update their reimbursement lists (national or provincial) is unpredictable and is outside ourcontrol.Obtaining coverage and reimbursement approval for a product from a government or other third party payor is a time consuming and costly process thatcould require us to provide supporting scientific, clinical and cost-effectiveness data for the use of our products to the payor, which we may not be able toprovide. Furthermore, the reimbursement policies of third party payors may significantly change in a manner that renders our clinical data insufficient foradequate reimbursement or otherwise limits the successful marketing of our products. Even if we obtain coverage for our product candidates, third partypayors may not establish adequate reimbursement amounts, which may reduce the demand for, or the price of, our products. If reimbursement is not availableor is available only to limited levels, we may not be able to commercialize certain of our products.Price controls may limit the price at which products such as roxadustat, if approved, are sold. For example, reference pricing is used by various EU memberstates and parallel distribution, or arbitrage between low-priced and high-priced member states, can further reduce prices. In some countries, we or our partnermay be required to conduct a clinical trial or other studies that compare the cost-effectiveness of our product candidates to other available products in orderto obtain or maintain reimbursement or pricing approval. Publication of discounts by third party payors or authorities may lead to further pressure on theprices or reimbursement levels within the country of publication and other countries. If reimbursement of our products is unavailable or limited in scope oramount, or if pricing is set at unacceptable levels, we or our partner may elect not to commercialize our products in such countries, and our business andfinancial condition could be adversely affected.Risks Related to Our Reliance on Third PartiesIf our collaborations with Astellas or AstraZeneca were terminated, or if Astellas or AstraZeneca were to prioritize other initiatives over theircollaborations with us, whether as a result of a change of control or otherwise, our ability to successfully develop and commercialize our lead productcandidate, roxadustat, would suffer.We have entered into collaboration agreements with respect to the development and commercialization of our lead product candidate, roxadustat, withAstellas and AstraZeneca. These agreements provide for reimbursement of our development costs by our collaboration partners and also provide forcommercialization of roxadustat throughout the major territories of the world.Our agreements with Astellas and AstraZeneca provide each of them with the right to terminate their respective agreements with us, upon the occurrence ofnegative clinical results, delays in the development and commercialization of our product candidates or adverse regulatory requirements or guidance. Thetermination of any of our collaboration agreements would require us to fund and perform the further development and commercialization of roxadustat in theaffected territory, or pursue another collaboration, which we may be unable to do, either of which could have an adverse effect on our business andoperations. In addition, each of those agreements provides our respective partners the right to terminate any of those agreements upon written notice forconvenience. Moreover, if Astellas or AstraZeneca, or any successor entity, were to determine that their collaborations with us are no longer a strategicpriority, or if either of them or a successor were to reduce their level of commitment to their collaborations with us, our ability to develop and commercializeroxadustat could suffer. In addition, some of our collaborations are exclusive and preclude us from entering into additional collaboration agreements withother parties in the area or field of exclusivity.74 If we fail to establish and maintain strategic collaborations related to our product candidates, we will bear all of the risk and costs related to the developmentand commercialization of any such product candidate, and we may need to seek additional financing, hire additional employees and otherwise developexpertise at significant cost. This in turn may negatively affect the development of our other product candidates as we direct resources to our most advancedproduct candidates.Conflicts with our collaboration partners could jeopardize our collaboration agreements and our ability to commercialize product candidates.Our collaboration partners have certain rights to control decisions regarding the development and commercialization of our product candidates with respectto which they are providing funding. If we have a disagreement over strategy and activities, our plans for obtaining approval may be revised and negativelyaffect the anticipated timing and potential for success of our product candidates. Even if a product under a collaboration agreement is approved, we willremain substantially dependent on the commercialization strategy and efforts of our collaboration partners, and neither of our collaboration partners hasexperience in commercialization of a novel drug such as roxadustat in the dialysis market.With respect to our collaboration agreements for roxadustat, there are additional complexities in that we and our collaboration partners, Astellas andAstraZeneca, must reach consensus on our Phase 3 development program. Multi-party decision-making is complex and involves significant time and effort,and there can be no assurance that the parties will cooperate or reach consensus, or that one or both of our partners will not ask to proceed independently insome or all of their respective territories or functional areas of responsibility in which the applicable collaboration partner would otherwise be obligated tocooperate with us. Any disputes or lack of cooperation with us by either Astellas or AstraZeneca may negatively impact the timing or success of our plannedPhase 3 clinical studies.We intend to conduct proprietary research programs in specific disease areas that are not covered by our collaboration agreements. Our pursuit of suchopportunities could, however, result in conflicts with our collaboration partners in the event that any of our collaboration partners takes the position that ourinternal activities overlap with those areas that are exclusive to our collaboration agreements, and we should be precluded from such internal activities.Moreover, disagreements with our collaboration partners could develop over rights to our intellectual property. In addition, our collaboration agreementsmay have provisions that give rise to disputes regarding the rights and obligations of the parties. Any conflict with our collaboration partners could lead tothe termination of our collaboration agreements, delay collaborative activities, reduce our ability to renew agreements or obtain future collaborationagreements or result in litigation or arbitration and would negatively impact our relationship with existing collaboration partners.Certain of our collaboration partners could also become our competitors in the future. If our collaboration partners develop competing products, fail to obtainnecessary regulatory approvals, terminate their agreements with us prematurely or fail to devote sufficient resources to the development andcommercialization of our product candidates, the development and commercialization of our product candidates and products could be delayed.We rely on third parties for the conduct of most of our preclinical and clinical trials for our product candidates, and if our third party contractors do notproperly and successfully perform their obligations under our agreements with them, we may not be able to obtain or may be delayed in receivingregulatory approvals for our product candidates.We rely heavily on university, hospital, dialysis centers and other institutions and third parties, including the principal investigators and their staff, to carryout our clinical trials in accordance with our clinical protocols and designs. We also rely on a number of third party CROs to assist in undertaking, managing,monitoring and executing our ongoing clinical trials, including those for roxadustat. We expect to continue to rely on CROs, clinical data managementorganizations, medical institutions and clinical investigators to conduct our development efforts in the future, including our Phase 3 development programfor roxadustat. We compete with many other companies for the resources of these third parties, and large pharmaceutical companies often have significantlymore extensive agreements and relationships with such third party providers, and such third party providers may prioritize the requirements of such largepharmaceutical companies over ours. The third parties on whom we rely may terminate their engagements with us at any time, which may cause delay in thedevelopment and commercialization of our product candidates. If any such third party terminates its engagement with us or fails to perform as agreed, we maybe required to enter into alternative arrangements, which would result in significant cost and delay to our product development program. Moreover, ouragreements with such third parties generally do not provide assurances regarding employee turnover and availability, which may cause interruptions in theresearch on our product candidates by such third parties.75 Moreover, while our reliance on these third parties for certain development and management activities will reduce our control over these activities, it will notrelieve us of our responsibilities. For example, the FDA and foreign regulatory authorities require compliance with regulations and standards, including GCPrequirements for designing, conducting, monitoring, recording, analyzing and reporting the results of clinical trials to ensure that the data and results fromtrials are credible and accurate and that the rights, integrity and confidentiality of trial participants are protected. Although we rely on third parties to conductour clinical trials, we, as the sponsor, remain responsible for ensuring that each of these clinical trials is conducted in accordance with its generalinvestigational plan and protocol under legal and regulatory requirements, including GCP. Regulatory authorities enforce these GCP requirements throughperiodic inspections of trial sponsors, principal investigators and trial sites.If any of our CROs, trial sites, principal investigators or other third parties fail to comply with applicable GCP requirements, other regulations, trial protocolor other requirements under their agreements with us, the quality or accuracy of the data they obtain may be compromised or unreliable, and the trials of ourproduct candidates may not meet regulatory requirements. If trials do not meet regulatory requirements or if these third parties need to be replaced, thedevelopment of our product candidates may be delayed, suspended or terminated, regulatory authorities may require us to exclude the use of patient datafrom our approval applications or perform additional clinical trials before approving our marketing applications. Regulatory authorities may even reject ourapplication for approval or refuse to accept our future applications for an extended time period. We cannot assure you that upon inspection by a regulatoryauthority, such regulatory authority will determine that any of our clinical trials comply with GCP requirements or that our results may be used in support ofour regulatory submissions. If any of these events occur, we may not be able to obtain regulatory approval for our product candidates on a timely basis, at areasonable cost, or at all.We currently rely, and expect to continue to rely, on third parties to conduct many aspects of our clinical studies and product manufacturing, and thesethird parties may not perform satisfactorily.We do not have any operating manufacturing facilities at this time other than our roxadustat and FG-5200 manufacturing facility in China, and our currentcommercial manufacturing facility plans in China are not expected to satisfy the requirements necessary to support development and commercializationoutside of China. Other than in and for China specifically, we do not expect to independently manufacture our products. We currently rely, and expect tocontinue to rely, on third parties to scale-up, manufacture and supply roxadustat and our other product candidates outside of China. Risks arising from ourreliance on third party manufacturers include: •reduced control and additional burdens of oversight as a result of using third party manufacturers for all aspects of manufacturing activities,including regulatory compliance and quality control and assurance; •termination of manufacturing agreements, termination fees associated with such termination, or nonrenewal of manufacturing agreements withthird parties may negatively impact our planned development and commercialization activities; •the possible misappropriation of our proprietary technology, including our trade secrets and know-how; and •disruptions to the operations of our third party manufacturers or suppliers unrelated to our product, including the merger, acquisition, orbankruptcy of a manufacturer or supplier or a catastrophic event affecting our manufacturers or suppliers.Any of these events could lead to development delays or failure to obtain regulatory approval, or affect our ability to successfully commercialize our productcandidates. Some of these events could be the basis for action by the FDA or another regulatory authority, including injunction, recall, seizure or total orpartial suspension of production.76 The facilities used by our contract manufacturers to manufacture our product candidates must pass inspections by the FDA and other regulatory authorities.Although, except for China, we do not control the manufacturing operations of, and expect to remain completely dependent on, our contract manufacturersfor manufacture of drug substance and finished drug product, we are ultimately responsible for ensuring that our product candidates are manufactured incompliance with cGMP requirements. If our contract manufacturers cannot successfully manufacture material that conforms to our or our collaborationpartners’ specifications, or the regulatory requirements of the FDA or other regulatory authorities, we may not be able to secure and/or maintain regulatoryapproval for our product candidates and our development or commercialization plans may be delayed. In addition, we have no control over the ability of ourcontract manufacturers to maintain adequate quality control, quality assurance and qualified personnel. In addition, although our longer-term agreements areexpected to provide for requirements to meet our quantity and quality requirements to manufacture our products candidates for clinical studies andcommercial sale, we will have minimal direct control over the ability of our contract manufacturers to maintain adequate quality control, quality assuranceand qualified personnel and we expect to rely on our audit rights to ensure that those qualifications are maintained to meet our requirements. If our contractmanufacturers’ facilities do not pass inspection by regulatory authorities, or if regulatory authorities do not approve these facilities for the manufacture of ourproducts, or withdraw any such approval in the future, we would need to identify and qualify alternative manufacturing facilities, which would significantlyimpact our ability to develop, obtain regulatory approval for or market our products, if approved. Moreover, any failure of our third party manufacturers, tocomply with applicable regulations could result in sanctions being imposed on us or adverse regulatory consequences, including clinical holds, warnings oruntitled letters, fines, injunctions, civil penalties, delays, suspension or withdrawal of approvals, license revocation, seizures or recalls of product candidatesor products, operating restrictions and criminal prosecutions, any of which would be expected to significantly and adversely affect supplies of our products tous and our collaboration partners.Any of our third party manufacturers may terminate their engagement with us at any time and we have not yet entered into any commercial supplyagreements for the manufacture of active pharmaceutical ingredients (“APIs”) or drug products. With respect to roxadustat, AstraZeneca and Astellas havecertain rights to assume manufacturing of roxadustat and the existence of those rights may limit our ability to enter into favorable long-term supplyagreements, if at all, with other third party manufacturers. In addition, our product candidates and any products that we may develop may compete with otherproduct candidates and products for access and prioritization to manufacture. Certain third party manufacturers may be contractually prohibited frommanufacturing our product due to non-compete agreements with our competitors or a commitment to grant another party priority relative to our products.There are a limited number of third party manufacturers that operate under cGMP and that might be capable of manufacturing to meet our requirements. Dueto the limited number of third party manufacturers with the contractual freedom, expertise, required regulatory approvals and facilities to manufacture ourproducts on a commercial scale, identifying and qualifying a replacement third party manufacturer would be expensive and time-consuming and may causedelay or interruptions in the production of our product candidates or products, which in turn may delay, prevent or impair our development andcommercialization efforts.We have a letter agreement with IRIX Pharmaceuticals, Inc. (“IRIX”), a third party manufacturer that we have used in the past, pursuant to which we agreed tonegotiate a single source manufacturing agreement that included a right of first negotiation for the cGMP manufacture of HIF-PH inhibitors, includingroxadustat, provided that IRIX is able to match any third party bids within 5%. The exclusive right to manufacture extends for five years after approval of anNDA for those compounds, and any agreement would provide that no minimum amounts would be specified until appropriate by forecast and that we and acommercialization partner would have the rights to contract with independent third parties that exceed IRIX’s internal manufacturing capabilities or in theevent that we or our commercialization partner determines for reasons of continuity of supply and security that such a need exists, provided that IRIX wouldsupply no less than 65% of the product if it is able to provide this level of supply. Subsequent to the letter agreement, we and IRIX have entered into severaladditional service agreements. IRIX has requested in writing that we honor the letter agreement with respect to the single source manufacturing agreement,and if we were to enter into any such exclusive manufacturing agreement, there can be no assurance that IRIX will not assert a claim for right to manufactureroxadustat or that IRIX could manufacture roxadustat successfully and in accordance with applicable regulations for a commercial product and thespecifications of our collaboration partners. In 2015, Patheon Pharmaceuticals Inc., a business unit of DPx Holdings B.V. (“Patheon”), acquired IRIX, and in2017 ThermoFisher Scientific Inc. acquired Patheon.If any third party manufacturer terminates its engagement with us or fails to perform as agreed, we may be required to find replacement manufacturers, whichwould result in significant cost and delay to our development programs. Although we believe that there are several potential alternative manufacturers whocould manufacture our product candidates, we may incur significant delays and added costs in identifying, qualifying and contracting with any such thirdparty or potential second source manufacturer. In any event, with any third party manufacturer we expect to enter into technical transfer agreements and shareour know-how with the third party manufacturer, which can be time-consuming and may result in delays. These delays could result in a suspension or delayof marketing roxadustat.77 Certain of the components of our product candidates are acquired from single-source suppliers and have been purchased without long-term supplyagreements. The loss of any of these suppliers, or their failure to supply us with supplies of sufficient quantity and quality to complete our drug substanceor finished drug product of acceptable quality and an acceptable price, would materially and adversely affect our business.We do not have an alternative supplier of certain components of our product candidates. To date, we have used purchase orders for the supply of materialsthat we use in our product candidates. We may be unable to enter into long-term commercial supply arrangements with our vendors, or do so on commerciallyreasonable terms, which could have a material adverse impact upon our business. In addition, we currently rely on our contract manufacturers to purchasefrom third-party suppliers some of the materials necessary to produce our product candidates. We do not have direct control over the acquisition of thosematerials by our contract manufacturers. Moreover, we currently do not have any agreements for the commercial production of those materials.The logistics of our supply chain, which include shipment of materials and intermediates from countries such as China and India add additional time and riskto the manufacture of our product candidates. While we have in the past maintained sufficient inventory of materials, API, and drug product to meet our andour collaboration partners’ needs for roxadustat to date, the lead time and regulatory approvals required to source from and into countries outside of the U.S.increase the risk of delay and potential shortages of supply.Risks Related to Our Intellectual PropertyIf our efforts to protect our proprietary technologies are not adequate, we may not be able to compete effectively in our market.We rely upon a combination of patents, trade secret protection and contractual arrangements to protect the intellectual property related to our technologies.We will only be able to protect our products and proprietary information and technology by preventing unauthorized use by third parties to the extent thatour patents, trade secrets, and contractual position allow us to do so. Any disclosure to or misappropriation by third parties of our trade secrets or confidentialinformation could compromise our competitive position. Moreover, we are involved in, have in the past been involved in, and may in the future be involvedin legal or administrative proceedings involving our intellectual property initiated by third parties, and which proceedings can result in significant costs andcommitment of management time and attention. As our product candidates continue in development, third parties may attempt to challenge the validity andenforceability of our patents and proprietary information and technologies.We also are involved in, have in the past been involved in, and may in the future be involved in initiating legal or administrative proceedings involving theproduct candidates and intellectual property of our competitors. These proceedings can result in significant costs and commitment of management time andattention, and there can be no assurance that our efforts would be successful in preventing or limiting the ability of our competitors to market competingproducts.Composition-of-matter patents relating to the API are generally considered to be the strongest form of intellectual property protection for pharmaceuticalproducts, as such patents provide protection not limited to any one method of use. Method-of-use patents protect the use of a product for the specifiedmethod(s), and do not prevent a competitor from making and marketing a product that is identical to our product for an indication that is outside the scope ofthe patented method. We rely on a combination of these and other types of patents to protect our product candidates, and there can be no assurance that ourintellectual property will create and sustain the competitive position of our product candidates.Biotechnology and pharmaceutical product patents involve highly complex legal and scientific questions and can be uncertain. Any patent applications thatwe own or license may fail to result in issued patents. Even if patents do successfully issue from our applications, third parties may challenge their validity orenforceability, which may result in such patents being narrowed, invalidated, or held unenforceable. Even if our patents and patent applications are notchallenged by third parties, those patents and patent applications may not prevent others from designing around our claims and may not otherwiseadequately protect our product candidates. If the breadth or strength of protection provided by the patents and patent applications we hold with respect to ourproduct candidates is threatened, competitors with significantly greater resources could threaten our ability to commercialize our product candidates.Discoveries are generally published in the scientific literature well after their actual development, and patent applications in the U.S. and other countries aretypically not published until 18 months after their filing, and in some cases are never published. Therefore, we cannot be certain that we or our licensors werethe first to make the inventions claimed in our owned and licensed patents or patent applications, or that we or our licensors were the first to file for patentprotection covering such inventions. Subject to meeting other requirements for patentability, for U.S. patent applications filed prior to March 16, 2013, thefirst to invent the claimed invention is entitled to receive patent protection for that invention while, outside the U.S., the first to file a patent applicationencompassing the invention is entitled to patent protection for the invention. The U.S. moved to a “first to file” system under the Leahy-Smith AmericaInvents Act (“AIA”), effective March 16, 2013. This system also includes procedures for challenging issued patents and pending patent applications, whichcreates additional uncertainty. We may become involved in opposition or interference proceedings challenging our patents and patent applications or thepatents and patent applications of others, and the outcome of any such proceedings are highly uncertain. An unfavorable outcome in any such proceedingscould reduce the scope of or invalidate our patent rights, allow third parties to commercialize our technology and compete directly with us, or result in ourinability to manufacture, develop or commercialize our product candidates without infringing the patent rights of others.78 In addition to the protection afforded by patents, we seek to rely on trade secret protection and confidentiality agreements to protect proprietary know-how,information, or technology that is not covered by our patents. Although our agreements require all of our employees to assign their inventions to us, and werequire all of our employees, consultants, advisors and any third parties who have access to our trade secrets, proprietary know-how and other confidentialinformation and technology to enter into appropriate confidentiality agreements, we cannot be certain that our trade secrets, proprietary know-how and otherconfidential information and technology will not be subject to unauthorized disclosure or that our competitors will not otherwise gain access to orindependently develop substantially equivalent trade secrets, proprietary know-how and other information and technology. Furthermore, the laws of someforeign countries, in particular, China, where we have operations, do not protect proprietary rights to the same extent or in the same manner as the laws of theU.S. As a result, we may encounter significant problems in protecting and defending our intellectual property globally. If we are unable to preventunauthorized disclosure of our intellectual property related to our product candidates and technology to third parties, we may not be able to establish ormaintain a competitive advantage in our market, which could materially adversely affect our business and operations.Intellectual property disputes with third parties and competitors may be costly and time consuming, and may negatively affect our competitive position.Our commercial success may depend on our avoiding infringement of the patents and other proprietary rights of third parties as well as on enforcing ourpatents and other proprietary rights against third parties. Pharmaceutical and biotechnology intellectual property disputes are characterized by complex,lengthy and expensive litigation over patents and other intellectual property rights. We may initiate or become party to or be threatened with future litigationor other proceedings regarding intellectual property rights with respect to our product candidates and competing products.As our product candidates progress toward commercialization, we or our collaboration partners may be subject to patent infringement claims from thirdparties. We attempt to ensure that our product candidates do not infringe third party patents and other proprietary rights. However, the patent landscape incompetitive product areas is highly complex, and there may be patents of third parties of which we are unaware that may result in claims of infringement.Accordingly, there can be no assurance that our product candidates do not infringe proprietary rights of third parties, and parties making claims against usmay seek and obtain injunctive or other equitable relief, which could potentially block further efforts to develop and commercialize our product candidatesincluding roxadustat or pamrevlumab. Any litigation involving defense against claims of infringement, regardless of the merit of such claims, would involvesubstantial litigation expense and would be a substantial diversion of management time.We intend, if necessary, to vigorously enforce our intellectual property in order to protect the proprietary position of our product candidates, includingroxadustat and pamrevlumab. Active efforts to enforce our patents may include litigation, administrative proceedings, or both, depending on the potentialbenefits that might be available from those actions and the costs associated with undertaking those efforts against third parties. We carefully review andmonitor publicly available information regarding products that may be competitive with our product candidates and assert our intellectual property rightswhere appropriate. We previously prevailed in an administrative challenge initiated by a major biopharmaceutical company regarding our intellectualproperty rights, maintaining our intellectual property in all relevant scope, and will continue to protect and enforce our intellectual property rights.Moreover, third parties may continue to initiate new proceedings in the U.S. and foreign jurisdictions to challenge our patents from time to time.We may consider administrative proceedings and other means for challenging third party patents and patent applications. An unfavorable outcome in anysuch challenge could require us to cease using the related technology and to attempt to license rights to it from the prevailing third party, which may not beavailable on commercially reasonable terms, if at all, in which case our business could be harmed.Third parties may also challenge our patents and patent applications, through interference, reexamination, inter partes review, and post-grant reviewproceedings before the U.S. Patent and Trademark Office (“USPTO”) or through comparable proceedings in other territories. For example, Akebia and othershave filed oppositions against certain European patents corresponding to some of the above-listed cases. In three of these proceedings, for FibroGenEuropean Patent Nos. 1463823, 1633333, and 2322155, the European Patent Office has handed down decisions unfavorable to FibroGen. In the fourth ofthese proceedings, the European Patent Office issued a decision favorable to FibroGen, maintaining FibroGen European Patent No. 2322153. These decisionsare currently under appeal, and these four patents are valid and enforceable pending resolution of the appeals. The ultimate outcomes of such proceedingsremain uncertain, and ultimate resolution of such may take two to four years or longer. Akebia is also pursuing invalidation actions against correspondingpatents in Canada and in Japan, and invalidation actions against corresponding patents in the United Kingdom have been initiated by GSK and by Akebia.While we believe these FibroGen patents will be upheld in relevant part, we note that narrowing or even revocation of any of these patents would not affectour exclusivity for roxadustat or our freedom-to-operate with respect to use of roxadustat for the treatment of anemia.79 Furthermore, there is a risk that any public announcements concerning the status or outcomes of intellectual property litigation or administrative proceedingsmay adversely affect the price of our stock. If securities analysts or our investors interpret such status or outcomes as negative or otherwise creatinguncertainty, our common stock price may be adversely affected.Our reliance on third parties and agreements with collaboration partners requires us to share our trade secrets, which increases the possibility that acompetitor may discover them or that our trade secrets will be misappropriated or disclosed.Our reliance on third party contractors to develop and manufacture our product candidates is based upon agreements that limit the rights of the third partiesto use or disclose our confidential information, including our trade secrets and know-how. Despite the contractual provisions, the need to share trade secretsand other confidential information increases the risk that such trade secrets and information are disclosed or used, even if unintentionally, in violation ofthese agreements. In the highly competitive markets in which our product candidates are expected to compete, protecting our trade secrets, including ourstrategies for addressing competing products, is imperative, and any unauthorized use or disclosure could impair our competitive position and may have amaterial adverse effect on our business and operations.In addition, our collaboration partners are larger, more complex organizations than ours, and the risk of inadvertent disclosure of our proprietary informationmay be increased despite their internal procedures and contractual obligations in place with our collaboration partners. Despite our efforts to protect our tradesecrets and other confidential information, a competitor’s discovery of such trade secrets and information could impair our competitive position and have anadverse impact on our business.We have an extensive worldwide patent portfolio. The cost of maintaining our patent protection is high and maintaining our patent protection requirescontinuous review and compliance in order to maintain worldwide patent protection. We may not be able to effectively maintain our intellectual propertyposition throughout the major markets of the world.The USPTO and foreign patent authorities require maintenance fees and payments as well as continued compliance with a number of procedural anddocumentary requirements. Noncompliance may result in abandonment or lapse of the subject patent or patent application, resulting in partial or completeloss of patent rights in the relevant jurisdiction. Non-compliance may result in reduced royalty payments for lack of patent coverage in a particularjurisdiction from our collaboration partners or may result in competition, either of which could have a material adverse effect on our business.We have made, and will continue to make, certain strategic decisions in balancing costs and the potential protection afforded by the patent laws of certaincountries. As a result, we may not be able to prevent third parties from practicing our inventions in all countries throughout the world, or from selling orimporting products made using our inventions in and into the U.S. or other countries. Third parties may use our technologies in territories in which we havenot obtained patent protection to develop their own products and, further, may infringe our patents in territories which provide inadequate enforcementmechanisms, even if we have patent protection. Such third party products may compete with our product candidates, and our patents or other intellectualproperty rights may not be effective or sufficient to prevent them from competing.The laws of some foreign countries do not protect proprietary rights to the same extent as do the laws of the U.S., and we may encounter significantproblems in securing and defending our intellectual property rights outside the U.S.Many companies have encountered significant problems in protecting and defending intellectual property rights in certain countries. The legal systems ofcertain countries, particularly certain developing countries such as China, do not always favor the enforcement of patents, trade secrets, and other intellectualproperty rights, particularly those relating to pharmaceutical and biotechnology products, which could make it difficult for us to stop infringement of ourpatents, misappropriation of our trade secrets, or marketing of competing products in violation of our proprietary rights. In China, our intended establishmentof significant operations will depend in substantial part on our ability to effectively enforce our intellectual property rights in that country. Proceedings toenforce our intellectual property rights in foreign countries could result in substantial costs and divert our efforts and attention from other aspects of ourbusiness, and could put our patents in these territories at risk of being invalidated or interpreted narrowly, or our patent applications at risk of not beinggranted, and could provoke third parties to assert claims against us. We may not prevail in all legal or other proceedings that we may initiate and, if we wereto prevail, the damages or other remedies awarded, if any, may not be commercially meaningful. Accordingly, our efforts to enforce our intellectual propertyrights around the world may be inadequate to obtain a significant commercial advantage from the intellectual property that we develop or license.80 Intellectual property rights do not address all potential threats to any competitive advantage we may have.The degree of future protection afforded by our intellectual property rights is uncertain because intellectual property rights have limitations, and intellectualproperty rights may not adequately protect our business or permit us to maintain our competitive advantage. The following examples are illustrative: •Others may be able to make compounds that are the same as or similar to our current or future product candidates but that are not covered bythe claims of the patents that we own or have exclusively licensed. •We or any of our licensors or strategic partners might not have been the first to make the inventions covered by the issued patent or pendingpatent application that we own or have exclusively licensed. •We or any of our licensors or strategic partners might not have been the first to file patent applications covering certain of our inventions. •Others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our intellectualproperty rights. •The prosecution of our pending patent applications may not result in granted patents. •Granted patents that we own or have exclusively licensed may not provide us with any competitive advantages, or may be held invalid orunenforceable, as a result of legal challenges by our competitors. •Patent protection on our product candidates may expire before we are able to develop and commercialize the product, or before we are able torecover our investment in the product. •Our competitors might conduct research and development activities in the U.S. and other countries that provide a safe harbor from patentinfringement claims for such activities, as well as in countries in which we do not have patent rights, and may then use the information learnedfrom such activities to develop competitive products for sale in markets where we intend to market our product candidates.Roxadustat is considered a Class 2 substance on the 2019 World Anti-Doping Agency Prohibited List which could limit sales and increase security anddistribution costs for us and our partners, particularly in China.Roxadustat is considered a Class 2 substance on the World Anti-Doping Agency (“WADA”) Prohibited List. There are enhanced security and distributionprocedures we and our collaboration partners and third-party contractors will have to take to limit the risk of loss of product in the supply chain. As a result,our distribution, manufacturing and sales costs for roxadustat, as well as for our partners, will be increased which will reduce profitability. In addition there isa risk of reduced sales due to patient access to this drug. This is particularly the case in China where we will not be able to sell roxadustat in privatepharmacies due to the WADA classification. While private pharmacies only represent approximately 10% of the market in China, this will negatively affectsales and therefore the profitability of roxadustat and the Company as a whole.The existence of counterfeit pharmaceutical products in pharmaceutical markets may compromise our brand and reputation and have a material adverseeffect on our business, operations and prospects.Counterfeit products, including counterfeit pharmaceutical products, are a significant problem, particularly in China. Counterfeit pharmaceuticals areproducts sold or used for research under the same or similar names, or similar mechanism of action or product class, but which are sold without proper licensesor approvals. Such products may be used for indications or purposes that are not recommended or approved or for which there is no data or inadequate datawith regard to safety or efficacy. Such products divert sales from genuine products, often are of lower cost, often are of lower quality (having differentingredients or formulations, for example), and have the potential to damage the reputation for quality and effectiveness of the genuine product. If counterfeitpharmaceuticals illegally sold or used for research result in adverse events or side effects to consumers, we may be associated with any negative publicityresulting from such incidents. Consumers may buy counterfeit pharmaceuticals that are in direct competition with our pharmaceuticals, which could have anadverse impact on our revenues, business and results of operations. In addition, the use of counterfeit products could be used in non-clinical or clinicalstudies, or could otherwise produce undesirable side effects or adverse events that may be attributed to our products as well, which could cause us orregulatory authorities to interrupt, delay or halt clinical trials and could result in the delay or denial of regulatory approval by the FDA or other regulatoryauthorities and potential product liability claims. With respect to China, although the government has recently been increasingly active in policingcounterfeit pharmaceuticals, there is not yet an effective counterfeit pharmaceutical regulation control and enforcement system in China. As a result, we maynot be able to prevent third parties from selling or purporting to sell our products in China. The proliferation of counterfeit pharmaceuticals has grown inrecent years and may continue to grow in the future. The existence of and any increase in the sales and production of counterfeit pharmaceuticals, or thetechnological capabilities of counterfeiters, could negatively impact our revenues, brand reputation, business and results of operations.81 Risks Related to Government RegulationThe regulatory approval process is highly uncertain and we may not obtain regulatory approval for the commercialization of our product candidates.The time required to obtain approval by the FDA and comparable foreign regulatory authorities is unpredictable, but typically takes many years followingthe commencement of preclinical studies and clinical trials and depends upon numerous factors, including the substantial discretion of the regulatoryauthorities. In addition, approval policies, regulations, or the type and amount of clinical data necessary to gain approval may change during the course of aproduct candidate’s clinical development and may vary among jurisdictions. Except in China, We have not obtained regulatory approval for any productcandidate, and it is possible that neither roxadustat nor pamrevlumab, nor any future product candidates we may discover, in-license or acquire and seek todevelop in the future, will obtain regulatory approval in countries other than China.Our product candidates could fail to receive regulatory approval from the FDA or other regulatory authorities for many reasons, including: •disagreement over the design or implementation of our clinical trials; •failure to demonstrate that a product candidate is safe and effective for its proposed indication; •failure of clinical trials to meet the level of statistical significance required for approval; •failure to demonstrate that a product candidate’s clinical and other benefits outweigh its safety risks; •disagreement over our interpretation of data from preclinical studies or clinical trials; •disagreement over whether to accept efficacy results from clinical trial sites outside the U.S. where the standard of care is potentially differentfrom that in the U.S.; •the insufficiency of data collected from clinical trials of our present or future product candidates to support the submission and filing of anNDA or other submission or to obtain regulatory approval; •disapproval of the manufacturing processes or facilities of either our manufacturing plant or third party manufacturers with whom we contractfor clinical and commercial supplies; or •changes in the approval policies or regulations that render our preclinical and clinical data insufficient for approval.The FDA or other regulatory authorities may require more information, including additional preclinical or clinical data to support approval, which may delayor prevent approval and our commercialization plans, or we may decide to abandon the development program altogether. Even if we do obtain regulatoryapproval, our product candidates may be approved for fewer or more limited indications than we request, approval may be contingent on the performance ofcostly post-marketing clinical trials, or approval may require labeling that does not include the labeling claims necessary or desirable for the successfulcommercialization of that product candidate. In addition, if our product candidates produce undesirable side effects or safety issues, the FDA may require theestablishment of REMS or other regulatory authorities may require the establishment of a similar strategy, that may restrict distribution of our approvedproducts, if any, and impose burdensome implementation requirements on us. Any of the foregoing scenarios could materially harm the commercial prospectsfor our product candidates.Even if we believe our current or planned clinical trials are successful, regulatory authorities may not agree that our completed clinical trials provideadequate data on safety or efficacy. Approval by one regulatory authority does not ensure approval by any other regulatory authority. However, a failure ordelay in obtaining regulatory approval in one country may have a negative effect on the regulatory process in others. We may not be able to file forregulatory approvals and even if we file we may not receive the necessary approvals to commercialize our product candidates in any market.82 If our product candidates obtain marketing approval, we will be subject to more extensive healthcare laws, regulation and enforcement and our failure tocomply with those laws could have a material adverse effect on our results of operations and financial condition.If we obtain approval in the U.S. for any of our product candidates, the regulatory requirements applicable to our operations, in particular our sales andmarketing efforts, will increase significantly with respect to our operations and the potential for civil and criminal enforcement by the federal governmentand the states and foreign governments will increase with respect to the conduct of our business. The laws that may affect our operations in the U.S. include: •the federal Anti-Kickback Statute, which prohibits, among other things, persons from knowingly and willfully soliciting, receiving, offering orpaying remuneration, directly or indirectly, to induce, or in return for, the purchase or recommendation of an item or service reimbursable undera federal healthcare program, such as the Medicare and Medicaid programs; •federal civil and criminal false claims laws and civil monetary penalty laws, which prohibit, among other things, individuals or entities fromknowingly presenting, or causing to be presented, claims for payment from Medicare, Medicaid, or other third party payors that are false orfraudulent; •the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), which created new federal criminal statutes that prohibit executinga scheme to defraud any healthcare benefit program and making false statements relating to healthcare matters; •HIPAA, as amended by Health Information Technology and Clinical Health Act, and its implementing regulations, which imposes certainrequirements relating to the privacy, security, and transmission of individually identifiable health information; •the federal physician sunshine requirements under the Patient Protection and Affordable Care Act (“PPACA”), which requires manufacturers ofdrugs, devices, biologics, and medical supplies to report annually to the Centers for Medicare and Medicaid Services (“CMS”), informationrelated to payments and other transfers of value to physicians, other healthcare providers, and teaching hospitals, and ownership andinvestment interests held by physicians and other healthcare providers and their immediate family members; •foreign and state law equivalents of each of the above federal laws, such as the U.S. Foreign Corrupt Practices Act (“FCPA”), anti-kickback andfalse claims laws that may apply to items or services reimbursed by any third party payor, including commercial insurers; state laws that requirepharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the applicable complianceguidance promulgated by the federal government, or otherwise restrict payments that may be made to healthcare providers and other potentialreferral sources; state laws that require drug manufacturers to report information related to payments and other transfers of value to physiciansand other healthcare providers or marketing expenditures; and state laws governing the privacy and security of health information in certaincircumstances, many of which differ from each other in significant ways, thus complicating compliance efforts; and •the Trade Agreements Act (“TAA”), which requires that drugs sold to the U.S. Government must be manufactured in the U.S. or in TAAapproved and designated countries. Drugs manufactured in countries not approved under the TAA, may not be sold to the U.S. without specificregulatory approval. We have little experience with this regulation and there is a risk that drugs made from Chinese-made API may not be soldto an entity of the U.S. such as the Veterans Health Administration (“VA”) due to our inability to obtain regulatory approval. While there havebeen recent VA policy changes that appear to allow for sale of drugs from non-TAA approved countries, this policy may change or there may beadditional policies or legislation that affect our ability to sell drug to the U.S. Government.The scope of these laws and our lack of experience in establishing the compliance programs necessary to comply with this complex and evolving regulatoryenvironment increases the risks that we may unknowingly violate the applicable laws and regulations. If our operations are found to be in violation of any ofsuch laws or any other governmental regulations that apply to us, we may be subject to penalties, including civil and criminal penalties, damages, fines, thecurtailment or restructuring of our operations, the exclusion from participation in federal and state healthcare programs and imprisonment, any of whichcould materially adversely affect our ability to operate our business and our financial results.83 The impact of recent U.S. healthcare reform, its potential partial or full repeal, and other changes in the healthcare industry and in healthcare spending iscurrently unknown, and may adversely affect our business model.The commercial potential for our approved products could be affected by changes in healthcare spending and policy in the U.S. and abroad. We operate in ahighly regulated industry and new laws, regulations or judicial decisions, or new interpretations of existing laws, regulations or decisions, related tohealthcare availability, the method of delivery or payment for healthcare products and services could negatively impact our business, operations andfinancial condition.In the U.S., the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (“MMA”) altered Medicare coverage and payments forpharmaceutical products. The legislation expanded Medicare coverage for drug purchases by the elderly and introduced a new reimbursement methodologybased on average sales prices for physician-administered drugs. The MMA also provided authority for limiting the number of drugs that will be covered inany therapeutic class and as a result, we expect that there will be additional pressure to reduce costs. For example, the CMS in implementing the MMA hasenacted regulations that reduced capitated payments to dialysis providers. These cost reduction initiatives and other provisions of the MMA could decreasethe scope of coverage and the price that may be received for any approved dialysis products and could seriously harm our business and financial condition.While the MMA applies only to drug benefits for Medicare beneficiaries, private payors often follow Medicare coverage policies and payment limitations insetting their own reimbursement rates, and any reduction in reimbursement that results from the MMA may cause a similar reduction in payments from privatepayors. Similar regulations or reimbursement policies have been enacted in many international markets which could similarly impact the commercialpotential for our products.Under the Medicare Improvements for Patients and Providers Act (“MIPPA”), a basic case-mix adjusted composite, or bundled, payment system commencedin January 2011 and transitioned fully by January 2014 to a single reimbursement rate for drugs and all services furnished by renal dialysis centers forMedicare beneficiaries with end-stage renal disease. Specifically, under MIPPA the bundle now covers drugs, services, lab tests and supplies under a singletreatment base rate for reimbursement by the CMS based on the average cost per treatment, including the cost of ESAs and IV iron doses, typically withoutadjustment for usage. It is unknown whether roxadustat, if approved in the U.S., will be included in the payment bundle. Under MIPPA, agents that have noIV equivalent in the bundle are currently expected to be excluded from the bundle until 2025. If roxadustat were included in the bundle, it may reduce theprice that could be charged for roxadustat, and therefore potentially limit our profitability. Based on roxadustat’s differentiated mechanism of action andtherapeutic effects, and discussions with our collaboration partner, we currently believe that roxadustat might not be included in the bundle. If roxadustat isreimbursed outside of the bundle, it may potentially limit or delay market penetration of roxadustat.More recently, the PPACA was enacted in 2010 with a goal of reducing the cost of healthcare and substantially changing the way healthcare is financed byboth government and private insurers. The PPACA, among other things, increases the minimum Medicaid rebates owed by manufacturers under the MedicaidDrug Rebate Program and extends the rebate program to individuals enrolled in Medicaid managed care organizations, establishes annual fees and taxes onmanufacturers of certain branded prescription drugs, and creates a new Medicare Part D coverage gap discount program, in which manufacturers must agree tooffer 50% point-of-sale discounts off negotiated prices of applicable brand drugs to eligible beneficiaries during their coverage gap period as a condition forthe manufacturer’s outpatient drugs to be covered under Medicare Part D. In addition, other legislative changes have been proposed and adopted in the U.S.since the PPACA was enacted. On August 2, 2011, the Budget Control Act of 2011 created measures for spending reductions by Congress. A Joint SelectCommittee on Deficit Reduction, tasked with recommending a targeted deficit reduction of at least $1.2 trillion for the years 2013 through 2021, was unableto reach required goals, thereby triggering the legislation’s automatic reduction to several government programs. This includes aggregate reductions ofMedicare payments to providers of up to 2% per fiscal year, which went into effect on April 1, 2013.It is likely that federal and state legislatures within the U.S. and foreign governments will continue to consider changes to existing healthcare legislation. Wecannot predict the reform initiatives that may be adopted in the future or whether initiatives that have been adopted will be repealed or modified. Thecontinuing efforts of the government, insurance companies, managed care organizations and other payors of healthcare services to contain or reduce costs ofhealthcare may adversely affect: •the demand for any products that may be approved for sale; •the price and profitability of our products; •pricing, coverage and reimbursement applicable to our products; •the ability to successfully position and market any approved product; and •the taxes applicable to our pharmaceutical product revenues.Some of the provisions of the PPACA have yet to be fully implemented, while certain provisions have been subject to judicial and Congressional challenges.In January 2017, Congress voted to adopt a budget resolution for fiscal year 2017, that while not a law, is84 widely viewed as the first step toward the passage of legislation that would repeal certain aspects of the PPACA. Further, on January 20, 2017, PresidentTrump signed an Executive Order directing federal agencies with authorities and responsibilities under the Affordable Care Act to waive, defer, grantexemptions from, or delay the implementation of any provision of the Affordable Care Act that would impose a fiscal burden on states or a cost, fee, tax,penalty or regulatory burden on individuals, healthcare providers, health insurers, or manufacturers of pharmaceuticals or medical devices. Congress alsocould consider subsequent legislation to replace elements of the Affordable Care Act that are repealed. Given these possibilities and others we may notanticipate, the full extent to which our business, results of operations and financial condition could be adversely affected by the recent proposed legislationand the Executive Order is uncertain. The implementation of cost containment measures or other healthcare reforms may prevent us from being able togenerate revenue, attain profitability, or commercialize our drugs.Furthermore, legislative and regulatory proposals have been made to expand post-approval requirements and restrict sales and promotional activities forpharmaceutical products. We cannot be sure whether additional legislative changes will be enacted, or whether FDA regulations, guidance or interpretationswill be changed, or what the impact of such changes on the regulatory approvals of our product candidates, if any, may be. In addition, increased scrutiny bythe U.S. Congress of the FDA’s approval process may significantly delay or prevent regulatory approval, as well as subject us to more stringent productlabeling and post-marketing testing and other requirements.We may not be able to conduct, or contract others to conduct, animal testing in the future, which could harm our research and development activities.Certain laws and regulations relating to drug development require us to test our product candidates on animals before initiating clinical trials involvinghumans. Animal testing activities have been the subject of controversy and adverse publicity. Animal rights groups and other organizations and individualshave attempted to stop animal testing activities by pressing for legislation and regulation in these areas and by disrupting these activities through protestsand other means. To the extent the activities of these groups are successful, our research and development activities may be interrupted or delayed.Our employees may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements, which couldresult in significant liability for us and harm our reputation.We are exposed to the risk of employee fraud or other misconduct, including intentional failure to: •comply with FDA regulations or similar regulations of comparable foreign regulatory authorities; •provide accurate information to the FDA or comparable foreign regulatory authorities; •comply with manufacturing standards we have established; •comply with privacy laws protecting personal information; •comply with federal and state healthcare fraud and abuse laws and regulations and similar laws and regulations established and enforced bycomparable foreign regulatory authorities; •comply with the FCPA and other anti-bribery laws; •report financial information or data accurately; •or disclose unauthorized activities to us.Employee misconduct could also involve the improper use of information obtained in the course of clinical trials, which could result in regulatory sanctions,delays in clinical trials, or serious harm to our reputation. We have adopted a code of conduct for our directors, officers and employees, but it is not alwayspossible to identify and deter employee misconduct. The precautions we take to detect and prevent this activity may not be effective in controlling unknownor unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to be in compliancewith such laws or regulations. If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, thoseactions could harm our business, results of operations, financial condition and cash flows, including through the imposition of significant fines or othersanctions.85 If we fail to comply with environmental, health and safety laws and regulations, we could become subject to fines or penalties or incur costs that couldharm our business.We are subject to numerous environmental, health and safety laws and regulations, including those governing laboratory procedures and the handling, use,storage, treatment and disposal of hazardous materials and wastes. Our operations involve the use of hazardous and flammable materials, including chemicalsand biological materials. Our operations also produce hazardous waste products. We contract with third parties for the disposal of these materials and wastes.We cannot eliminate the risk of contamination or injury from these materials. In the event of contamination or injury resulting from our use of hazardousmaterials, we could be held liable for any resulting damages, and any liability could exceed our resources. We also could incur significant costs associatedwith civil or criminal fines and penalties for failure to comply with such laws and regulations. We do not maintain insurance for environmental liability ortoxic tort claims that may be asserted against us in connection with our storage or disposal of biological, hazardous or radioactive materials.In addition, we may incur substantial costs in order to comply with current or future environmental, health and safety laws and regulations applicable to ouroperations in the U.S. and foreign countries. These current or future laws and regulations may impair our research, development or manufacturing efforts. Ourfailure to comply with these laws and regulations also may result in substantial fines, penalties or other sanctions.Risks Related to Our International OperationsWe are establishing international operations and seeking approval to commercialize our product candidates outside of the U.S., in particular in China,and a number of risks associated with international operations could materially and adversely affect our business.We expect to be subject to a number of risks related with our international operations, many of which may be beyond our control. These risks include: •different regulatory requirements for drug approvals in foreign countries; •different standards of care in various countries that could complicate the evaluation of our product candidates; •different U.S. and foreign drug import and export rules; •reduced protection for intellectual property rights in certain countries; •changes in tariffs, trade barriers and regulatory requirements; •different reimbursement systems and different competitive drugs indicated to treat the indications for which our product candidates are beingdeveloped; •economic weakness, including inflation, or political instability in particular foreign economies and markets; •compliance with tax, employment, immigration and labor laws for employees living or traveling abroad; •compliance with the FCPA, and other anti-corruption and anti-bribery laws; •U.S. and foreign taxes, including withholding of payroll taxes; •foreign currency fluctuations, which could result in increased operating expenses and reduced revenues, and other obligations incident todoing business in another country; •workforce uncertainty in countries where labor unrest is more common than in the U.S.; •production shortages resulting from any events affecting raw material supply or manufacturing capabilities abroad; •a reliance on CROs, clinical trial sites, principal investigators and other third parties that may be less experienced with clinical trials or havedifferent methods of performing such clinical trials than we are used to in the U.S.; •potential liability resulting from development work conducted by foreign distributors; and •business interruptions resulting from geopolitical actions, including war and terrorism, or natural disasters.86 The pharmaceutical industry in China is highly regulated and such regulations are subject to change.The pharmaceutical industry in China is subject to comprehensive government regulation and supervision, encompassing the approval, registration,manufacturing, packaging, licensing and marketing of new drugs. Refer to “Business — Government Regulation — Regulation in China” for a discussion ofthe regulatory requirements that are applicable to our current and planned business activities in China. In recent years, the regulatory framework in Chinaregarding the pharmaceutical industry has undergone significant changes, and we expect that it will continue to undergo significant changes. Any suchchanges or amendments may result in increased compliance costs on our business or cause delays in or prevent the successful development orcommercialization of our product candidates in China. For example, the NMPA recently adopted the International Council for Harmonisation of TechnicalRequirements for Pharmaceuticals for Human Use guidelines, and accordingly imposed regulatory oversight earlier in our production process for roxadustatmanufactured and sold in China. The change in regulatory starting material triggered an extension of the inspection to our contract manufacturer STA, whichwas successfully completed in October 2018. In addition, Chinese authorities have become increasingly vigilant in enforcing laws in the pharmaceuticalindustry, in some cases launching industry-wide investigations, oftentimes appearing to focus on foreign companies. The costs and time necessary to respondto an investigation can be material. Any failure by us or our partners to maintain compliance with applicable laws and regulations or obtain and maintainrequired licenses and permits may result in the suspension or termination of our business activities in China.We are planning on using our own manufacturing facilities in China to produce roxadustat API, roxadustat drug product, and FG-5200 corneal implants.As an organization, we have limited experience in the construction, licensure, and operation of a manufacturing plant, and accordingly we cannot assureyou we will be able to meet regulatory requirements to operate our plant and to sell our products.We have two manufacturing facilities in China, with one located in Beijing and the other in Cangzhou, Hebei. In December 2018, we received theManufacturing License for Drug Substance and Drug Product for roxadustat and GMP certification for our Beijing facility that allows us to manufacturelimited commercial quantities of roxadustat capsules. We are currently planning on manufacturing commercial-scale API at our Cangzhou facility, andexpect to receive a license to produce roxadustat API at that site in the second half of 2019. However, as an organization, we have limited experiencelicensing and operating commercial manufacturing facilities.We will be obligated to comply with continuing cGMP requirements and there can be no assurance that we will receive and maintain all of the appropriatelicenses required to manufacture our product candidates for clinical and commercial use in China. In addition, we and our product suppliers must continuallyspend time, money and effort in production, record-keeping and quality assurance and appropriate controls in order to ensure that any products manufacturedin our facilities meet applicable specifications and other requirements for product safety, efficacy and quality and there can be no assurance that our effortswill succeed for licensure or continue to be successful in meeting these requirements.We would require separate approval for the manufacture of FG-5200. In addition, we may convert the existing manufacturing process of FG-5200 to a semi-automated process, which may require us to show that implants from our new manufacturing process are comparable to the implants from our existingmanufacturing process. There can be no assurance that we will successfully receive licensure and maintain approval for the manufacture of FG-5200, either ofwhich would be expected to delay or preclude our ability to develop FG-5200 in China and may materially adversely affect our business and operations andprospects in China.Manufacturing facilities in China are subject to periodic unannounced inspections by the NMPA and other regulatory authorities. We expect to depend onthese facilities for our product candidates and business operations in China. Natural disasters or other unanticipated catastrophic events, including powerinterruptions, water shortages, storms, fires, earthquakes, terrorist attacks, government appropriation of our facilities, and wars, could significantly impair ourability to operate our manufacturing facilities. Certain equipment, records and other materials located in these facilities would be difficult to replace or wouldrequire substantial replacement lead time that would impact our ability to successfully commercialize our product candidates in China. The occurrence ofany such event could materially and adversely affect our business, financial condition, results of operations, cash flows and prospects.In addition to manufacturing, we are responsible for pharmacovigilance, medical affairs, and management of the third party distribution logistics forroxadustat in China. We have no experience in these areas as a company, and accordingly we cannot assure you we will be able to meet regulatoryrequirements or operate in these capacities successfully.We are responsible for commercial manufacturing, pharmacovigilance, medical affairs, and management of the third party distribution logistics for roxadustatcommercial activities in China. While we have been increasing our staffing in these areas, as a company, we have no experience managing or operating thesefunctions for a commercial product and there can be no guarantee that we will do so efficiently or effectively. Mistakes or delays in these areas could limitour ability to successfully commercialize roxadustat in China, could limit our eventual market penetration, sales and profitability, and could subject us tosignificant liability in China.87 Our decision to launch roxadustat in China prior to approval in the U.S. or Europe is largely unprecedented and could be subject to significant risk, delayand expense.Even though our subsidiary FibroGen Beijing has received marketing authorization for roxadustat for anemia caused by CKD in dialysis patients we have notyet received approval in non-dialysis patients, and are awaiting the Chinese authorities’ routine inspection of our Phase 3 non-dialysis clinical trial sites.While we currently expect these site inspections to occur in the first half of 2019, the inspections could be delayed for a number of reasons, including ifregulatory authorities are otherwise occupied inspecting other matters, such as certain vaccine, plasma, or other issues that may be pressing for the country.We also must qualify and license our Cangzhou manufacturing facility for manufacture of roxadustat API prior to launch. We expect this to occur in the thirdquarter of 2019, however, delays or problems obtaining such licensure would delay launch.In addition, negative safety data from the U.S. or European Phase 3 trials could affect the NMPA approval process or label for roxadustat. Any suchdevelopments could delay or limit our commercialization plans for roxadustat in China. It is possible that other unforeseen delays in the China regulatoryprocess could have a material adverse effect on our development and commercialization of roxadustat in China.In addition we will be required to conduct a 2,000 subject post-approval safety study to demonstrate the long-term safety of roxadustat, as well as provideperiod reporting to the authorities on GMP and quality compliance at our manufacturing facilities. If safety issues arise in this study, or generally aftercommercialization, our commercialization plans and profitability in China could be negatively impacted.We and our collaboration partner in China, AstraZeneca, may experience difficulties in successfully generating sales of roxadustat in China.We and AstraZeneca have a profit sharing arrangement with respect to roxadustat in China and any difficulties we may experience in generating sales willaffect our bottom line. Difficulties may be related to our ability to obtain reasonable pricing, reimbursement, hospital listing, and tendering, or otherdifficulties related to distribution, marketing, and sales efforts in China. Sales of roxadustat in China may be limited due to the complex nature of thehealthcare system, low average personal income, pricing controls, still developing infrastructure and potentially rapid competition from other products. Inparticular, if we are unable to obtain reimbursement for roxadustat through the 2019 update to the NRDL, we may have to wait a substantial period of timebefore the reimbursement drug list is updated again. Without government reimbursement, many patients will not be able to afford roxadustat, since privatecommercial health insurance is rare, and our business and operations could be adversely affected. Therefore reimbursement and obtaining hospital listing iscritical to roxadustat’s near-term commercial success in China.The market for treatment of anemia in CKD in China is highly competitive.Although we have now received approval for roxadustat for the treatment of anemia caused by CKD in dialysis patients in China, and even if roxadustatreceives approval for anemia caused by CKD in non-dialysis patients, it faces intense competition in the market for treatment of anemia in CKD. Roxadustatwould compete with ESAs, which are offered by established multinational pharmaceutical companies such as Kyowa Hakko Kirin China Pharmaceutical Co.,Ltd., Roche and Chinese pharmaceutical companies such as 3SBio Inc. and Di’ao Group Chengdu Diao Jiuhong Pharmaceutical Factory. Many of thesecompetitors have substantially greater name recognition, scientific, financial, and marketing resources, as well as established distribution capabilities. Manyof our competitors have more resources to develop or acquire, and more experience in developing or acquiring, new products and in creating marketawareness for those products. Many of these competitors have significantly more experience than we have in navigating the Chinese regulatory frameworkregarding the development, manufacturing and marketing of drugs in China, as well as in marketing and selling anemia products in China. Additionally, webelieve that most patients with anemia in CKD in China are currently being treated with traditional Chinese medicine, which is widely accepted and highlyprevalent in China. Traditional Chinese medicine treatments are often oral and thus convenient and low-cost, and practitioners of traditional Chinesemedicine are numerous and accessible in China. As a result, it may be difficult to persuade patients with anemia in CKD to switch from traditional Chinesemedicine to roxadustat.88 The Chinese government is implementing a new “Two Invoices” regulation which could affect the way we structure our distributorship relationships inChina for roxadustat.The Chinese government is implementing new regulations that impact distribution of pharmaceutical products in China. These regulations generally requirethat at most two invoices may be issued throughout the distribution chain. Failure to comply with the “Two-Invoices” regulations would prevent us fromaccessing the market in China. We are planning on modifying the distribution responsibilities under the China Agreement between AstraZeneca andFibroGen such that FibroGen would engage distributors and a third party logistics provider, and both companies will work together to manage thedistribution network. FibroGen China has never managed distribution of pharmaceutical products, and this new distribution structure may impose highercosts or limit or delay our ability to sell products to our principal customers, and may limit the near term sales of our products.There is no assurance that roxadustat will be included in the Medical Insurance Catalogs.Eligible participants in the national basic medical insurance program in China, which consists of mostly urban residents, are entitled to reimbursement fromthe social medical insurance fund for up to the entire cost of medicines that are included in the Medical Insurance Catalogs. Refer to “Business —Government Regulation — Regulation in China.” We believe that the inclusion of a drug in the Medical Insurance Catalogs can substantially improve thesales of a drug in China. The Ministry of Labor and Social Security in China (“MLSS”) together with other government authorities, select medicines to beincluded in the Medical Insurance Catalogs based on a variety of factors, including treatment requirements, frequency of use, effectiveness and price. TheMLSS also occasionally removes medicines from such catalogs. There can be no assurance that roxadustat will be included, and once included, remain in theMedical Insurance Catalogs. The exclusion or removal of roxadustat from the Medical Insurance Catalogs may materially and adversely affect sales ofroxadustat.Even if FG-5200 can be manufactured successfully and achieve regulatory approval, we may not achieve commercial success.We have not yet received a license to manufacture FG-5200 in our Beijing manufacturing facility or at scale, and we will have to show that FG-5200produced in our China manufacturing facility meets the applicable regulatory requirements. There can be no assurance that we can meet these requirements orthat FG-5200 can be approved for development, manufacture and sale in China.Even if we are able to manufacture and develop FG-5200 as a medical device in China, the size and length of any potential clinical trials required forapproval are uncertain and we are unable to predict the time and investment required to obtain regulatory approval. Moreover, even if FG-5200 can besuccessfully developed for approval in China, our product candidate would require extensive training and investment in assisting physicians in the use ofFG-5200.The retail prices of any product candidates that we develop may be subject to control, including periodic downward adjustment, by Chinese governmentauthorities.The price for pharmaceutical products is highly regulated in China, both at the national and provincial level. Price controls may reduce prices to levelssignificantly below those that would prevail in less regulated markets, or limit the volume of products that may be sold, either of which may have a materialand adverse effect on potential revenues from sales of roxadustat in China. Moreover, the process and timing for the implementation of price restrictions isunpredictable, which may cause potential revenues from the sales of roxadustat to fluctuate from period to period.If our planned business activities in China fall within a restricted category under the China Catalog for Guidance for Foreign Investment, we will need tooperate in China through a variable interest entity (“VIE”) structure.The China Catalog for Guidance for Foreign Investment sets forth the industries and sectors that the Chinese government encourages and restricts withrespect to foreign investment and participation. The Catalog for Guidance for Foreign Investment is subject to revision from time to time by the ChinaMinistry of Commerce. While we currently do not believe the development and marketing of roxadustat falls within a restricted category under the Catalogfor Guidance for Foreign Investment, if roxadustat does fall under such a restricted category, we will need to operate in China through a VIE structure. A VIEstructure involves a wholly foreign-owned enterprise that would control and receive the economic benefits of a domestic Chinese company through variouscontractual relationships. Such a structure would subject us to a number of risks that may have an adverse effect on our business, including that the Chinesegovernment may determine that such contractual arrangements do not comply with applicable regulations, Chinese tax authorities may require us to payadditional taxes, shareholders of our VIEs may have potential conflicts of interest with us, and we may lose the ability to use and enjoy assets held by ourVIEs that are important to the operations of our business if such entities go bankrupt or become subject to dissolution or liquidation proceedings. VIEstructures in China have come under increasing scrutiny from accounting firms and the SEC staff. If we do attempt to use a VIE structure and are unsuccessfulin structuring it so as to qualify as a VIE, we would not be able to consolidate the financial statements of the VIE with our financial statements, which couldhave a material adverse effect on our operating results and financial condition.89 FibroGen Beijing would be subject to restrictions on paying dividends or making other payments to us, which may restrict our ability to satisfy ourliquidity requirements.We plan to conduct all of our business in China through FibroGen China Anemia Holdings, Ltd. and FibroGen Beijing. We may rely on dividends androyalties paid by FibroGen Beijing for a portion of our cash needs, including the funds necessary to service any debt we may incur and to pay our operatingexpenses. The payment of dividends by FibroGen Beijing is subject to limitations. Regulations in China currently permit payment of dividends only out ofaccumulated profits as determined in accordance with accounting standards and regulations in China. FibroGen Beijing is not permitted to distribute anyprofits until losses from prior fiscal years have been recouped and in any event must maintain certain minimum capital requirements. FibroGen Beijing is alsorequired to set aside at least 10.0% of its after-tax profit based on Chinese accounting standards each year to its statutory reserve fund until the cumulativeamount of such reserves reaches 50.0% of its registered capital. Statutory reserves are not distributable as cash dividends. In addition, if FibroGen Beijingincurs debt on its own behalf in the future, the agreements governing such debt may restrict its ability to pay dividends or make other distributions to us. Asof December 31, 2018, approximately $5.7 million of our cash and cash equivalents is held in China.Any capital contributions from us to FibroGen Beijing must be approved by the Ministry of Commerce in China, and failure to obtain such approval maymaterially and adversely affect the liquidity position of FibroGen Beijing.The Ministry of Commerce in China or its local counterpart must approve the amount and use of any capital contributions from us to FibroGen Beijing, andthere can be no assurance that we will be able to complete the necessary government registrations and obtain the necessary government approvals on a timelybasis, or at all. If we fail to do so, we may not be able to contribute additional capital to fund our Chinese operations, and the liquidity and financial positionof FibroGen Beijing may be materially and adversely affected.We may be subject to currency exchange rate fluctuations and currency exchange restrictions with respect to our operations in China, which couldadversely affect our financial performance.If roxadustat is approved for sale in China, most of our product sales will occur in local Chinese currency and our operating results will be subject tovolatility from currency exchange rate fluctuations. To date, we have not hedged against the risks associated with fluctuations in exchange rates and,therefore, exchange rate fluctuations could have an adverse impact on our future operating results. Changes in value of the Renminbi against the U.S. dollar,Euro and other currencies is affected by, among other things, changes in China’s political and economic conditions. Currently, the Renminbi is permitted tofluctuate within a narrow and managed band against a basket of certain foreign currencies. Any significant currency exchange rate fluctuations may have amaterial adverse effect on our business and financial condition.In addition, the Chinese government imposes controls on the convertibility of the Renminbi into foreign currencies and the remittance of foreign currencyout of China for certain transactions. Shortages in the availability of foreign currency may restrict the ability of FibroGen Beijing to remit sufficient foreigncurrency to pay dividends or other payments to us, or otherwise satisfy their foreign currency-denominated obligations. Under existing Chinese foreignexchange regulations, payments of current account items, including profit distributions, interest payments and balance of trade, can be made in foreigncurrencies without prior approval from the State Administration of Foreign Exchange (“SAFE”) by complying with certain procedural requirements. However,approval from SAFE or its local branch is required where Renminbi is to be converted into foreign currency and remitted out of China to pay capital expensessuch as the repayment of loans denominated in foreign currencies. The Chinese government may also at its discretion restrict access in the future to foreigncurrencies for current account transactions. If the foreign exchange control system prevents us from obtaining sufficient foreign currency to satisfy ouroperational requirements, our liquidity and financial position may be materially and adversely affected.Because FibroGen Beijing’s funds are held in banks that do not provide insurance, the failure of any bank in which FibroGen Beijing deposits its fundscould adversely affect our business.Banks and other financial institutions in China do not provide insurance for funds held on deposit. As a result, in the event of a bank failure, FibroGenBeijing may not have access to funds on deposit. Depending upon the amount of money FibroGen Beijing maintains in a bank that fails, its inability to haveaccess to cash could materially impair its operations.90 We may be subject to tax inefficiencies associated with our offshore corporate structure.The tax regulations of the U.S. and other jurisdictions in which we operate are extremely complex and subject to change. New laws, new interpretations ofexisting laws, such as the Base Erosion Profit Shifting project initiated by the Organization for Economic Co-operation and Development and any legislationproposed by the relevant taxing authorities, or limitations on our ability to structure our operations and intercompany transactions may lead to inefficient taxtreatment of our revenue, profits, royalties and distributions, if any are achieved.In addition, we and our foreign subsidiaries have various intercompany transactions. We may not be able to obtain certain benefits under relevant tax treatiesto avoid double taxation on certain transactions among our subsidiaries. If we are not able to avail ourselves of the tax treaties, we could be subject toadditional taxes, which could adversely affect our financial condition and results of operations.On December 22, 2017, the U.S. enacted the Tax Cuts and Jobs Act (“Tax Act”) that instituted fundamental changes to the taxation of multinationalcorporations. The Tax Act includes changes to the taxation of foreign earnings by implementing a dividend exemption system, expansion of the current anti-deferral rules, a minimum tax on low-taxed foreign earnings and new measures to deter base erosion. The Tax Act also includes a permanent reduction in thecorporate tax rate to 21%, repeal of the corporate alternative minimum tax, expensing of capital investment, and limitation of the deduction for interestexpense. Furthermore, as part of the transition to the new tax system, a one-time transition tax is imposed on a U.S. shareholder’s historical undistributedearnings of foreign affiliates. Although the Tax Act is generally effective January 1, 2018, GAAP requires recognition of the tax effects of new legislationduring the reporting period that includes the enactment date, which was December 22, 2017.As a result of the impacts of the Tax Act, the SEC provided guidance that allows us to record provisional amounts for those impacts, with the requirement thatthe accounting be completed in a period not to exceed one year from the date of enactment. As of December 31, 2018, we completed our analysis of theaccounting for the tax effects of the Tax Act and no material adjustments were recognized as of December 31, 2018. The primary impact of the Tax Act relatesto the re-measurement of deferred tax assets and liabilities resulting from the change in the corporate tax rate (“Corporate Tax Rate Change”), which wasrecorded as of December 2017. Developing interpretations of the provisions of the Tax Act, changes to U.S. Treasury regulations, administrativeinterpretations or court decisions interpreting the Tax Act in the future periods may require further adjustments to our analysis.Our foreign operations, particularly those in China, are subject to significant risks involving the protection of intellectual property.We seek to protect the products and technology that we consider important to our business by pursuing patent applications in China and other countries,relying on trade secrets or pharmaceutical regulatory protection or employing a combination of these methods. We note that the filing of a patent applicationdoes not mean that we will be granted a patent, or that any patent eventually granted will be as broad as requested in the patent application or will besufficient to protect our technology. There are a number of factors that could cause our patents, if granted, to become invalid or unenforceable or that couldcause our patent applications not to be granted, including known or unknown prior art, deficiencies in the patent application, or lack of originality of thetechnology. Furthermore, the terms of our patents are limited. The patents we hold and the patents that may be granted from our currently pending patentapplications have, absent any patent term adjustment or extension, a twenty-year protection period starting from the date of application.Intellectual property rights and confidentiality protections in China may not be as effective as those in the U.S. or other countries for many reasons, includinglack of procedural rules for discovery and evidence, low damage awards, and lack of judicial independence. Implementation and enforcement of Chinaintellectual property laws have historically been deficient and ineffective and may be hampered by corruption and local protectionism. Policingunauthorized use of proprietary technology is difficult and expensive, and we may need to resort to litigation to enforce or defend patents issued to us or todetermine the enforceability and validity of our proprietary rights or those of others. The experience and capabilities of China courts in handling intellectualproperty litigation varies and outcomes are unpredictable. An adverse determination in any such litigation could materially impair our intellectual propertyrights and may harm our business.91 We are subject to laws and regulations governing corruption, which will require us to develop, maintain, and implement costly compliance programs.We must comply with a wide range of laws and regulations to prevent corruption, bribery, and other unethical business practices, including the FCPA, anti-bribery and anti-corruption laws in other countries, particularly China. The creation and implementation of international business practices complianceprograms is costly and such programs are difficult to enforce, particularly where reliance on third parties is required.Anti-bribery laws prohibit us, our employees, and some of our agents or representatives from offering or providing any personal benefit to coveredgovernment officials to influence their performance of their duties or induce them to serve interests other than the missions of the public organizations inwhich they serve. Certain commercial bribery rules also prohibit offering or providing any personal benefit to employees and representatives of commercialcompanies to influence their performance of their duties or induce them to serve interests other than their employers. The FCPA also obligates companieswhose securities are listed in the U.S. to comply with certain accounting provisions requiring us to maintain books and records that accurately and fairlyreflect all transactions of the corporation, including international subsidiaries, and devise and maintain an adequate system of internal accounting controlsfor international operations. The anti-bribery provisions of the FCPA are enforced primarily by the Department of Justice. The SEC is involved withenforcement of the books and records provisions of the FCPA.Compliance with these anti-bribery laws is expensive and difficult, particularly in countries in which corruption is a recognized problem. In addition, theanti-bribery laws present particular challenges in the pharmaceutical industry because in many countries including China, hospitals are state-owned oroperated by the government, and doctors and other hospital employees are considered foreign government officials. Furthermore, in certain countries (Chinain particular), hospitals and clinics are permitted to sell pharmaceuticals to their patients and are primary or significant distributors of pharmaceuticals.Certain payments to hospitals in connection with clinical studies, procurement of pharmaceuticals and other work have been deemed to be improperpayments to government officials that have led to vigorous anti-bribery law enforcement actions and heavy fines in multiple jurisdictions, particularly in theU.S. and China.It is not always possible to identify and deter violations, and the precautions we take to detect and prevent this activity may not be effective in controllingunknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to be incompliance with such laws or regulations.In the pharmaceutical industry, corrupt practices include, among others, acceptance of kickbacks, bribes or other illegal gains or benefits by the hospitals andmedical practitioners from pharmaceutical manufacturers, distributors or their third party agents in connection with the prescription of certainpharmaceuticals. If our employees, affiliates, distributors or third party marketing firms violate these laws or otherwise engage in illegal practices with respectto their sales or marketing of our products or other activities involving our products, we could be required to pay damages or heavy fines by multiplejurisdictions where we operate, which could materially and adversely affect our financial condition and results of operations. The Chinese government hasalso sponsored anti-corruption campaigns from time to time, which could have a chilling effect on any future marketing efforts by us to new hospitalcustomers. There have been recent occurrences in which certain hospitals have denied access to sales representatives from pharmaceutical companies becausethe hospitals wanted to avoid the perception of corruption. If this attitude becomes widespread among our potential customers, our ability to promote ourproducts to hospitals may be adversely affected.As we expand our operations in China and other jurisdictions internationally, we will need to increase the scope of our compliance programs to address therisks relating to the potential for violations of the FCPA and other anti-bribery and anti-corruption laws. Our compliance programs will need to includepolicies addressing not only the FCPA, but also the provisions of a variety of anti-bribery and anti-corruption laws in multiple foreign jurisdictions,including China, provisions relating to books and records that apply to us as a public company, and include effective training for our personnel throughoutour organization. The creation and implementation of anti-corruption compliance programs is costly and such programs are difficult to enforce, particularlywhere reliance on third parties is required. Violation of the FCPA and other anti-corruption laws can result in significant administrative and criminal penaltiesfor us and our employees, including substantial fines, suspension or debarment from government contracting, prison sentences, or even the death penalty inextremely serious cases in certain countries. The SEC also may suspend or bar us from trading securities on U.S. exchanges for violation of the FCPA’saccounting provisions. Even if we are not ultimately punished by government authorities, the costs of investigation and review, distraction of our personnel,legal defense costs, and harm to our reputation could be substantial and could limit our profitability or our ability to develop or commercialize our productcandidates. In addition, if any of our competitors are not subject to the FCPA, they may engage in practices that will lead to their receipt of preferentialtreatment from foreign hospitals and enable them to secure business from foreign hospitals in ways that are unavailable to us.92 Uncertainties with respect to the China legal system could have a material adverse effect on us.The legal system of China is a civil law system primarily based on written statutes. Unlike in a common law system, prior court decisions may be cited forreference but are not binding. Because the China legal system continues to rapidly evolve, the interpretations of many laws, regulations and rules are notalways uniform and enforcement of these laws, regulations and rules involve uncertainties, which may limit legal protections available to us. Moreover,decision makers in the China judicial system have significant discretion in interpreting and implementing statutory and contractual terms, which may renderit difficult for FibroGen Beijing to enforce the contracts it has entered into with our business partners, customers and suppliers. Different governmentdepartments may have different interpretations of certain laws and regulations, and licenses and permits issued or granted by one government authority maybe revoked by a higher government authority at a later time. Navigating the uncertainty and change in the China legal system will require the devotion ofsignificant resources and time, and there can be no assurance that our contractual and other rights will ultimately be enforced.Changes in China’s economic, political or social conditions or government policies could have a material adverse effect on our business and operations.Chinese society and the Chinese economy continue to undergo significant change. Adverse changes in the political and economic policies of the Chinesegovernment could have a material adverse effect on the overall economic growth of China, which could adversely affect our ability to conduct business inChina. The Chinese government continues to adjust economic policies to promote economic growth. Some of these measures benefit the overall Chineseeconomy, but may also have a negative effect on us. For example, our financial condition and results of operations in China may be adversely affected bygovernment control over capital investments or changes in tax regulations. As the Chinese pharmaceutical industry grows and evolves, the Chinesegovernment may also implement measures to change the structure of foreign investment in this industry. We are unable to predict the frequency and scope ofsuch policy changes, any of which could materially and adversely affect FibroGen Beijing’s liquidity, access to capital and its ability to conduct business inChina. Any failure on our part to comply with changing government regulations and policies could result in the loss of our ability to develop andcommercialize our product candidates in China.As part of a sweeping and ongoing government restructuring effort, China’s highest legislative body, the National People’s Congress, approved a plan toestablish a State Administration for Market Regulation (“SAMR”), which will merge and undertake the responsibilities previously held by the StateAdministration for Industry and Commerce, the General Administration of Quality Supervision, Inspection and Quarantine, the Certification andAccreditation Administration, the Standardization Administration of China, and the NMPA, as well as anti-monopoly responsibilities previously held by theNational Development and Reform Commission, Ministry of Commerce, and the Anti-Monopoly Office under the State Council. The restructuring alsoestablished the NMPA which has taken over much of the functions of the NMPA and will be supervised by the SAMR, while maintaining branches at theprovincial level. A major government restructuring such as this one could cause significant delays and cost increases to our development, manufacturing,approval, and commercialization timelines in China. There has been turnover in government leadership and officials may be further assigned new roles andresponsibilities, which may create delays and possibly new policies and priorities, and existing rules may be interpreted differently. It will take time for therestructuring to be fully implemented and the new structure to operate efficiently. As a result, our existing plans could be delayed or modified due to changesin regulations, policies or personnel decisions, all of which could have a material adverse impact on our operating results and business prospects.Our operations in China subject us to various Chinese labor and social insurance laws, and our failure to comply with such laws may materially andadversely affect our business, financial condition and results of operations.We are subject to China Labor Contract Law, which provides strong protections for employees and imposes many obligations on employers. The LaborContract Law places certain restrictions on the circumstances under which employers may terminate labor contracts and require economic compensation toemployees upon termination of employment, among other things. In addition, companies operating in China are generally required to contribute to laborunion funds and the mandatory social insurance and housing funds. Any failure by us to comply with Chinese labor and social insurance laws may subject usto late fees, fines and penalties, or cause the suspension or termination of our ability to conduct business in China, any of which could have a material andadverse effect on business, results of operations and prospects.93 Recent developments relating to the United Kingdom’s referendum vote in favor of leaving the EU could adversely affect us.The United Kingdom held a referendum on June 23, 2016 in which a majority voted for the United Kingdom’s withdrawal from the EU, commonly referred toas “Brexit”. As a result of this vote, negotiations are expected to commence to determine the terms of the United Kingdom’s withdrawal from the EU as wellas its relationship with the EU going forward, including the terms of trade between the United Kingdom and the EU. The effects of the United Kingdom’swithdrawal from the EU, and the perceptions as to its impact, are expected to be far-reaching and may adversely affect business activity and economicconditions in Europe and globally and could continue to contribute to instability in global financial markets, including foreign exchange markets. TheUnited Kingdom’s withdrawal from the EU could also have the effect of disrupting the free movement of goods, services and people between the UnitedKingdom and the EU and could also lead to legal uncertainty and potentially divergent national laws and regulations as the United Kingdom determineswhich EU laws to replace or replicate, including laws that could impact our ability, or our collaborator’s ability in the case of roxadustat, to obtain approvalof our products or sell our products in the United Kingdom. However, the full effects of such withdrawal are uncertain and will depend on any agreements theUnited Kingdom may make to retain access to EU markets. Lastly, as a result of the United Kingdom’s withdrawal from the EU, other European countries mayseek to conduct referenda with respect to their continuing membership with the EU. Given these possibilities and others we may not anticipate, as well as thelack of comparable precedent, the full extent to which our business, results of operations and financial condition could be adversely affected by the UnitedKingdom’s withdrawal from the EU is uncertain.Risks Related to the Operation of Our BusinessWe may encounter difficulties in managing our growth and expanding our operations successfully.As we seek to advance our product candidates through clinical trials and commercialization, we will need to expand our development, regulatory,manufacturing, commercialization and administration capabilities or contract with third parties to provide these capabilities for us. As our operations expandand we continue to undertake the efforts and expense to operate as a public reporting company, we expect that we will need to increase the responsibilities onmembers of management in order to manage any future growth effectively. Our failure to accomplish any of these steps could prevent us from successfullyimplementing our strategy and maintaining the confidence of investors in our company.If we fail to attract and keep senior management and key personnel, in particular our chief executive officer, we may be unable to successfully develop ourproduct candidates, conduct our clinical trials and commercialize our product candidates.We are highly dependent on our chief executive officer, Thomas B. Neff, and other members of our senior management team. The loss of the services ofMr. Neff or any of these other individuals would be expected to significantly negatively impact the development and commercialization of our productcandidates, our existing collaborative relationships and our ability to successfully implement our business strategy.Recruiting and retaining qualified commercial, development, scientific, clinical, and manufacturing personnel are and will continue to be critical to oursuccess, particularly as we expand our commercialization operations. Furthermore, replacing executive officers and key employees may be difficult and maytake an extended period of time because of the limited number of individuals in our industry with the breadth of skills and experience required tosuccessfully develop, gain regulatory approval of and commercialize product candidates. We may be unable to hire, train, retain or motivate these keypersonnel on acceptable terms given the intense competition among numerous biopharmaceutical companies for similar personnel.There is also significant competition, in particular in the San Francisco Bay Area, for the hiring of experienced and qualified personnel, which increases theimportance of retention of our existing personnel. If we are unable to continue to attract and retain personnel with the quality and experience applicable toour product candidates, our ability to pursue our strategy will be limited and our business and operations would be adversely affected.94 If product liability lawsuits are brought against us, we may incur substantial liabilities and may be required to limit commercialization of our productcandidates.We face an inherent risk of product liability as a result of the clinical testing, manufacturing and commercialization of our product candidates. Any suchproduct liability claims may include allegations of defects in manufacturing, defects in design, a failure to warn of dangers inherent in a product, negligence,strict liability or breach of warranty. Claims could also be asserted under state consumer protection acts. If we are unable to obtain insurance coverage atlevels that are appropriate to maintain our business and operations, or if we are unable to successfully defend ourselves against product liability claims, wemay incur substantial liabilities or otherwise cease operations. Product liability claims may result in: •termination of further development of unapproved product candidates or significantly reduced demand for any approved products; •material costs and expenses to defend the related litigation; •a diversion of time and resources across the entire organization, including our executive management; •product recalls, withdrawals or labeling restrictions; •termination of our collaboration relationships or disputes with our collaboration partners; and •reputational damage negatively impacting our other product candidates in development.If we fail to obtain and retain sufficient product liability insurance at an acceptable cost to protect against potential product liability claims, we may not beable to continue to develop our product candidates. We maintain product liability insurance in a customary amount for the stage of development of ourproduct candidates. Although we believe that we have sufficient coverage based on the advice of our third party advisors, there can be no assurance that suchlevels will be sufficient for our needs. Moreover, our insurance policies have various exclusions, and we may be in a dispute with our carrier as to the extentand nature of our coverage, including whether we are covered under the applicable product liability policy. If we are not able to ensure coverage or arerequired to pay substantial amounts to settle or otherwise contest the claims for product liability, our business and operations would be negatively affected.Our business and operations would suffer in the event of computer system failures.Despite the implementation of security measures, our internal computer systems, and those of our CROs, collaboration partners, and other third parties onwhich we rely, are vulnerable to damage from computer viruses, unauthorized access, natural disasters, fire, terrorism, war and telecommunication andelectrical failures. We upgraded our disaster and data recovery capabilities in June 2017, however, to the extent that any disruption or security breach, inparticular with our partners’ operations, results in a loss of, or damage to, our data or applications, or inappropriate disclosure of confidential or proprietaryinformation, we could incur liability and it could result in a material disruption and delay of our drug development programs. For example, the loss ofclinical trial data from completed, ongoing or planned clinical trials could result in delays in our regulatory approval efforts and significantly increase ourcosts to recover or reproduce the data.We depend on sophisticated information technology systems to operate our business and a cyber-attack or other breach of these systems could have amaterial adverse effect on our business.We rely on information technology systems to process, transmit and store electronic information in our day-to-day operations. The size and complexity of ourinformation technology systems makes them vulnerable to a cyber-attack, malicious intrusion, breakdown, destruction, loss of data privacy or othersignificant disruption. While we have recently upgraded our disaster data recovery program, a successful attack could result in the theft or destruction ofintellectual property, data, or other misappropriation of assets, or otherwise compromise our confidential or proprietary information and disrupt ouroperations. Cyber-attacks are becoming more sophisticated and frequent. We have invested in our systems and the protection and recoverability of our datato reduce the risk of an intrusion or interruption, and we monitor and test our systems on an ongoing basis for any current or potential threats. There can be noassurance that these measures and efforts will prevent future interruptions or breakdowns. If we fail to maintain or protect our information technology systemsand data integrity effectively or fail to anticipate, plan for or manage significant disruptions to these systems, we could have difficulty preventing, detectingand controlling such cyber-attacks and any such attacks could result in losses described above as well as disputes with physicians, patients and our partners,regulatory sanctions or penalties, increases in operating expenses, expenses or lost revenues or other adverse consequences, any of which could have amaterial adverse effect on our business, results of operations, financial condition, prospects and cash flows.95 Our headquarters and data storage facilities are located near known earthquake fault zones. The occurrence of an earthquake, fire or any othercatastrophic event could disrupt our operations or the operations of third parties who provide vital support functions to us, which could have a materialadverse effect on our business, results of operations and financial condition.We and some of the third party service providers on which we depend for various support functions, such as data storage, are vulnerable to damage fromcatastrophic events, such as power loss, natural disasters, terrorism and similar unforeseen events beyond our control. Our corporate headquarters and otherfacilities are located in the San Francisco Bay Area, which in the past has experienced severe earthquakes and fires.We do not carry earthquake insurance. Earthquakes or other natural disasters could severely disrupt our operations, and have a material adverse effect on ourbusiness, results of operations, financial condition and prospects.If a natural disaster, power outage or other event occurred that prevented us from using all or a significant portion of our headquarters, damaged criticalinfrastructure, or otherwise disrupted operations, it may be difficult or, in certain cases, impossible for us to continue our business for a substantial period oftime. The disaster recovery and business continuity plans we have in place are unlikely to provide adequate protection in the event of a serious disaster orsimilar event. We may incur substantial expenses as a result of the limited nature of our disaster recovery and business continuity plans, which, particularlywhen taken together with our lack of earthquake insurance, could have a material adverse effect on our business.Furthermore, integral parties in our supply chain are operating from single sites, increasing their vulnerability to natural disasters or other sudden, unforeseenand severe adverse events. If such an event were to affect our supply chain, it could have a material adverse effect on our business.Risks Related to Our Common StockThe market price of our common stock may be highly volatile, and you may not be able to resell your shares at or above your purchase price.In general, pharmaceutical, biotechnology and other life sciences company stocks have been highly volatile in the current market. The volatility ofpharmaceutical, biotechnology and other life sciences company stocks is sometimes unrelated to the operating performance of particular companies andbiotechnology and life science companies stocks often respond to trends and perceptions rather than financial performance. In particular, the market price ofshares of our common stock could be subject to wide fluctuations in response to the following factors: •results of clinical trials of our product candidates, including roxadustat and pamrevlumab; •the timing of the release of results of and regulatory updates regarding our clinical trials; •the level of expenses related to any of our product candidates or clinical development programs; •results of clinical trials of our competitors’ products; •safety issues with respect to our product candidates or our competitors’ products; •regulatory actions with respect to our product candidates and any approved products or our competitors’ products; •fluctuations in our financial condition and operating results, which will be significantly affected by the manner in which we recognize revenuefrom the achievement of milestones under our collaboration agreements; •adverse developments concerning our collaborations and our manufacturers; •the termination of a collaboration or the inability to establish additional collaborations; •the publication of research reports by securities analysts about us or our competitors or our industry or negative recommendations orwithdrawal of research coverage by securities analysts; •the inability to obtain adequate product supply for any approved drug product or inability to do so at acceptable prices; •disputes or other developments relating to proprietary rights, including patents, litigation matters and our ability to obtain patent protection forour technologies; •the ineffectiveness of our internal controls; •our failure or the failure of our competitors to meet analysts’ projections or guidance that we or our competitors may give to the market; •additions and departures of key personnel;96 •announced strategic decisions by us or our competitors; •changes in legislation or other regulatory developments affecting our product candidates or our industry; •fluctuations in the valuation of the biotechnology industry and particular companies perceived by investors to be comparable to us; •sales of our common stock by us, our insiders or our other stockholders; •speculation in the press or investment community; •announcement or expectation of additional financing efforts; •announcements of investigations or regulatory scrutiny of our operations or lawsuits filed against us; •changes in accounting principles; •activities of the government of China, including those related to the pharmaceutical industry as well as industrial policy generally; •performance of other U.S. publicly traded companies with significant operations in China; •terrorist acts, acts of war or periods of widespread civil unrest; •natural disasters such as earthquakes and other calamities; •changes in market conditions for biopharmaceutical stocks; •changes in general market and economic conditions; and •the other factors described in this “Risk Factors” section.As a result of fluctuations caused by these and other factors, comparisons of our operating results across different periods may not be accurate indicators ofour future performance. Any fluctuations that we report in the future may differ from the expectations of market analysts and investors, which could cause theprice of our common stock to fluctuate significantly. Moreover, securities class action litigation has often been initiated against companies following periodsof volatility in their stock price. This type of litigation could result in substantial costs and divert our management’s attention and resources, and could alsorequire us to make substantial payments to satisfy judgments or to settle litigation.We have broad discretion in the use of the net proceeds from our underwritten public offerings of common stock completed on April 11, 2017 (the “April2017 Offering”) and August 24, 2017 (the “August 2017 Offering”) and may not use them effectively.The net proceeds from the April 2017 Offering is intended to be used to fund the expansion of product development in China, including developingroxadustat in additional indications beyond CKD, manufacturing and commercialization activities, as well as for general corporate purposes. The netproceeds from the August 2017 Offering is intended to be used to fund the expansion of product development, including our development of pamrevlumabbeyond current Phase 2 programs, manufacturing and commercialization activities, as well as for general corporate purposes. These general corporatepurposes, may include, among other things, funding research and development, clinical trials, vendor payables, potential regulatory submissions, hiringadditional personnel and capital expenditures. However, we have no current commitments or obligations to use the net proceeds in the manner describedabove. Our management has broad discretion in the application of the balance of the net proceeds from the April 2017 Offering and the August 2017Offering, and could spend the proceeds in ways our stockholders may not agree with or that fails to improve our business or enhance the value of our commonstock. The failure by our management to use these funds effectively could result in financial losses that could harm our business, cause the price of ourcommon stock to decline and delay the development of our product candidates.If securities or industry analysts do not continue to publish research or reports about our business, or if they change their recommendations regarding ourstock adversely, our stock price and trading volume could decline.The trading market for our common stock will be influenced by the research and reports that industry or securities analysts publish about us or our business. Ifone or more of the analysts who cover us downgrade our stock, our stock price would likely decline. If one or more of these analysts cease coverage of ourcompany or fail to regularly publish reports on us, we could lose visibility in the financial markets, which in turn could cause our stock price or tradingvolume to decline.97 Our principal stockholders and management own a significant percentage of our stock and will be able to exercise significant influence over matterssubject to stockholder approval.As of January 31, 2019, our executive officers, directors and principal stockholders, together with their respective affiliates, owned approximately 39.79% ofour common stock, including shares subject to outstanding options that are exercisable within 60 days after such date and shares issuable upon settlement ofrestricted stock units that will vest within 60 days after such date. This percentage is based upon information supplied by officers, directors and principalstockholders and Schedules 13D and 13G, if any, filed with the SEC, which information may not be accurate as of October 31, 2018. Accordingly, thesestockholders will be able to exert a significant degree of influence over our management and affairs and over matters requiring stockholder approval,including the election of our board of directors and approval of significant corporate transactions. The interests of this group may differ from those of otherstockholders and they may vote their shares in a way that is contrary to the way other stockholders vote their shares. This concentration of ownership couldhave the effect of entrenching our management and/or the board of directors, delaying or preventing a change in our control or otherwise discouraging apotential acquirer from attempting to obtain control of us, which in turn could have a material and adverse effect on the fair market value of our commonstock.Additional remedial measures that may be imposed in the proceedings instituted by the SEC against five China based accounting firms, including theChinese affiliate of our independent registered public accounting firm, could result in our consolidated financial statements being determined to not be incompliance with the requirements of the Exchange Act.In late 2012, the SEC commenced administrative proceedings under Rule 102(e) of its Rules of Practice and also under the Sarbanes-Oxley Act of 2002against the Chinese affiliates of the “big four” accounting firms, including PricewaterhouseCoopers Zhong Tian CPAs Limited, the Chinese affiliate of ourindependent registered public accounting firm. The Rule 102(e) proceedings initiated by the SEC relate to these firms’ failure to produce documents,including audit work papers, in response to the request of the SEC pursuant to Section 106 of the Sarbanes-Oxley Act of 2002, as the auditors located inChina are not in a position lawfully to produce documents directly to the SEC because of restrictions under Chinese law and specific directives issued by theChina Securities Regulatory Commission (“CSRC”). The issues raised by the proceedings are not specific to our auditors or to us.In January 2014, an administrative law judge reached an initial decision that the Chinese affiliates of the “big four” accounting firms should be barred frompracticing before the SEC for a period of six months. In February 2015, the Chinese affiliates of the “big four” accounting firms each agreed to a censure andto pay a fine to the SEC to settle the dispute and avoid suspension of their ability to practice before the SEC and audit U.S.-listed companies. The settlementrequired the firms to follow detailed procedures and to seek to provide the SEC with access to Chinese firms’ audit documents via the CSRC. If futuredocument productions fail to meet specified criteria, the SEC retains authority to impose a variety of additional remedial measures on the firms depending onthe nature of the failure.We cannot predict if the SEC will further review the four firms’ compliance with specified criteria or if such further review would result in the SEC imposingadditional penalties such as suspensions or commencing any further administrative proceedings. Although it does not play a substantial role (as definedunder PCAOB standards) in the audit of our consolidated financial statements, if PricewaterhouseCoopers Zhong Tian CPAs Limited were denied,temporarily, the ability to practice before the SEC, our ability to produce audited consolidated financial statements for our company could be affected and wecould be determined not to be in compliance with the requirements of the Exchange Act. Such a determination could ultimately lead to the delisting of ourshares from the Nasdaq Global Select Market or deregistration from the SEC, or both, which would substantially reduce or effectively terminate the trading ofour stock.We may engage in future acquisitions that could disrupt our business, cause dilution to our stockholders and harm our business, results of operations,financial condition and cash flows and future prospects.While we currently have no specific plans to acquire any other businesses, we may, in the future, make acquisitions of, or investments in, companies that webelieve have products or capabilities that are a strategic or commercial fit with our present or future product candidates and business or otherwise offeropportunities for our company. In connection with these acquisitions or investments, we may: •issue stock that would dilute our existing stockholders’ percentage of ownership; •incur debt and assume liabilities; and •incur amortization expenses related to intangible assets or incur large and immediate write-offs.98 We may not be able to complete acquisitions on favorable terms, if at all. If we do complete an acquisition, we cannot assure you that it will ultimatelystrengthen our competitive position or that it will be viewed positively by customers, financial markets or investors. Furthermore, future acquisitions couldpose numerous additional risks to our operations, including: •problems integrating the purchased business, products or technologies, or employees or other assets of the acquisition target; •increases to our expenses; •disclosed or undisclosed liabilities of the acquired asset or company; •diversion of management’s attention from their day-to-day responsibilities; •reprioritization of our development programs and even cessation of development and commercialization of our current product candidates; •harm to our operating results or financial condition; •entrance into markets in which we have limited or no prior experience; and •potential loss of key employees, particularly those of the acquired entity.We may not be able to complete any acquisitions or effectively integrate the operations, products or personnel gained through any such acquisition.Provisions in our charter documents and Delaware law may have anti-takeover effects that could discourage an acquisition of us by others, even if anacquisition would be beneficial to our stockholders, and may prevent attempts by our stockholders to replace or remove our current directors ormanagement.Provisions in our amended and restated certificate of incorporation and amended and restated bylaws contain provisions that may have the effect ofdiscouraging, delaying or preventing a change in control of us or changes in our management. These provisions could also limit the price that investorsmight be willing to pay in the future for shares of our common stock, thereby depressing the market price of our common stock. In addition, because ourboard of directors is responsible for appointing the members of our management team, these provisions may frustrate or prevent any attempts by ourstockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our board of directors. Amongother things, these provisions: •authorize “blank check” preferred stock, which could be issued by our board of directors without stockholder approval and may containvoting, liquidation, dividend and other rights superior to our common stock; •create a classified board of directors whose members serve staggered three-year terms; •specify that special meetings of our stockholders can be called only by our board of directors pursuant to a resolution adopted by a majority ofthe total number of directors; •prohibit stockholder action by written consent; •establish an advance notice procedure for stockholder approvals to be brought before an annual meeting of our stockholders, includingproposed nominations of persons for election to our board of directors; •provide that our directors may be removed prior to the end of their term only for cause; •provide that vacancies on our board of directors may be filled only by a majority of directors then in office, even though less than a quorum; •require a supermajority vote of the holders of our common stock or the majority vote of our board of directors to amend our bylaws; and •require a supermajority vote of the holders of our common stock to amend the classification of our board of directors into three classes and toamend certain other provisions of our certificate of incorporation.These provisions, alone or together, could delay or prevent hostile takeovers and changes in control or changes in our management by making it moredifficult for stockholders to replace members of our board of directors, which is responsible for appointing the members of our management.99 Moreover, because we are incorporated in Delaware, we are governed by certain anti-takeover provisions under Delaware law which may discourage, delay orprevent someone from acquiring us or merging with us whether or not it is desired by or beneficial to our stockholders. We are subject to the provisions ofSection 203 of the Delaware General Corporation Law, which prohibits a person who owns in excess of 15% of our outstanding voting stock from merging orcombining with us for a period of three years after the date of the transaction in which the person acquired in excess of 15% of our outstanding voting stock,unless the merger or combination is approved in a prescribed manner.Any provision of our amended and restated certificate of incorporation, our amended and restated bylaws or Delaware law that has the effect of delaying ordeterring a change in control could limit the opportunity for our stockholders to receive a premium for their shares of our common stock, and could alsoaffect the price that some investors are willing to pay for our common stock.Changes in our tax provision or exposure to additional tax liabilities could adversely affect our earnings and financial condition.As a multinational corporation, we are subject to income taxes in the U.S. and various foreign jurisdictions. Significant judgment is required in determiningour global provision for income taxes and other tax liabilities. In the ordinary course of a global business, there are intercompany transactions andcalculations where the ultimate tax determination is uncertain. Our income tax returns are subject to audits by tax authorities. Although we regularly assessthe likelihood of adverse outcomes resulting from these examinations to determine our tax estimates, a final determination of tax audits or tax disputes couldhave an adverse effect on our results of operations and financial condition.We are also subject to non-income taxes, such as payroll, sales, use, value-added, net worth, property, gross receipts, and goods and services taxes in the U.S.,state and local, or various foreign jurisdictions. We are subject to audit and assessments by tax authorities with respect to these non-income taxes and mayhave exposure to additional non-income tax liabilities which could have an adverse effect on our results of operations and financial condition.​On December 22, 2017, the U.S. enacted the Tax Act that instituted fundamental changes to the taxation of multinational corporations. The Tax Act includeschanges to the taxation of foreign earnings by implementing a dividend exemption system, expansion of the current anti-deferral rules, a minimum tax onlow-taxed foreign earnings and new measures to deter base erosion. The Tax Act also includes a permanent reduction in the corporate tax rate to 21%, repealof the corporate alternative minimum tax, expensing of capital investment, and limitation of the deduction for interest expense. Furthermore, as part of thetransition to the new tax system, a one-time transition tax is imposed on a U.S. shareholder’s historical undistributed earnings of foreign affiliates. Althoughthe Tax Act is generally effective January 1, 2018, GAAP requires recognition of the tax effects of new legislation during the reporting period that includesthe enactment date, which was December 22, 2017.As a result of the impacts of the Tax Act, the SEC provided guidance that allows us to record provisional amounts for those impacts, with the requirement thatthe accounting be completed in a period not to exceed one year from the date of enactment. As of December 31, 2018, we completed our analysis of theaccounting for the tax effects of the Tax Act and no material adjustments were recognized as of December 31, 2018. The primary impact of the Tax Act relatesto the re-measurement of deferred tax assets and liabilities resulting from the Corporate Tax Rate Change, which was recorded as of December 31, 2017.Developing interpretations of the provisions of the Tax Act, changes to U.S. Treasury regulations, administrative interpretations or court decisionsinterpreting the Tax Act in the future periods may require further adjustments to our analysis.Our amended and restated certificate of incorporation designates the state or federal courts located in the State of Delaware as the sole and exclusiveforum for certain types of actions and proceedings that may be initiated by our stockholders, which could limit our stockholders’ ability to obtain afavorable judicial forum for disputes with us or our directors, officers or employees.Our amended and restated certificate of incorporation provides that, subject to limited exceptions, the state and federal courts located in the State of Delawarewill be the sole and exclusive forum for (1) any derivative action or proceeding brought on our behalf, (2) any action asserting a claim of breach of a fiduciaryduty owed by any of our directors, officers or other employees to us or our stockholders, (3) any action asserting a claim against us arising pursuant to anyprovision of the Delaware General Corporation Law, our amended and restated certificate of incorporation or our amended and restated by-laws, or (4) anyother action asserting a claim against us that is governed by the internal affairs doctrine. Any person or entity purchasing or otherwise acquiring any interestin shares of our capital stock shall be deemed to have notice of and to have consented to the provisions of our amended and restated certificate ofincorporation described above. This choice of forum provision may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable fordisputes with us or our directors, officers or other employees, which may discourage such lawsuits against us and our directors, officers and employees.Alternatively, if a court were to find these provisions of our amended and restated certificate of incorporation inapplicable to, or unenforceable in respect of,one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions,which could adversely affect our business and financial condition.100 Because we do not anticipate paying any cash dividends on our capital stock in the foreseeable future, capital appreciation, if any, will be your sole sourceof gain and you may never receive a return on your investment.You should not rely on an investment in our common stock to provide dividend income. We do not anticipate that we will pay any cash dividends to holdersof our common stock in the foreseeable future and investors seeking cash dividends should not purchase our common stock. We plan to retain any earningsto invest in our product candidates and maintain and expand our operations. Therefore, capital appreciation, or an increase in your stock price, which maynever occur, may be the only way to realize any return on your investment.ITEM 1B. UNRESOLVED STAFF COMMENTSNone.ITEM 2. PROPERTIESOur corporate and research and development operations are located in San Francisco, California, where we lease approximately 234,000 square feet of officeand laboratory space with approximately 35,000 square feet subleased. The lease for our San Francisco headquarters expires in 2023. We also leaseapproximately 67,000 square feet of office and manufacturing space in Beijing, China. Our lease in China expires in 2021. We are constructing a commercialmanufacturing facility of approximately 5,500 square meters in Cangzhou, China, on approximately 33,000 square meters of land. Our right to use such landexpires in 2068. We believe our facilities are adequate for our current needs and that suitable additional or substitute space would be available if needed.ITEM 3. LEGAL PROCEEEDINGSWe are not currently a party to any material legal proceedings.ITEM 4. MINE SAFETY DISCLOSURESNot applicable.101 PART IIITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITYSECURITIESMarket Information for Common StockOur common stock has been listed on the NASDAQ Global Select Market (“NASDAQ”) since November 14, 2014, under the symbol “FGEN.” Prior to ourinitial public offering, there was no public market for our common stock.The following table sets forth for the indicated periods the high and low closing sales prices of our common stock as reported on the NASDAQ. High Low 2018: Quarter ended March 31, 2018 $61.65 $45.35 Quarter ended June 30, 2018 64.95 44.90 Quarter ended September 30, 2018 67.25 56.30 Quarter ended December 31, 2018 60.16 37.97 2017: Quarter ended March 31, 2017 $26.45 $21.30 Quarter ended June 30, 2017 32.55 22.95 Quarter ended September 30, 2017 53.90 32.55 Quarter ended December 31, 2017 60.10 41.95Stock Price Performance GraphThe following graph illustrates a comparison of the total cumulative stockholder return for our common stock since November 14, 2014, which is the date ourcommon stock first began trading on the NASDAQ Global Select Market, to two indices: the NASDAQ Composite Index and the NASDAQ BiotechnologyIndex. The graph assumes an initial investment of $100 on November 14, 2014, in our common stock, the stocks comprising the NASDAQ Composite Index,and the stocks comprising the NASDAQ Biotechnology Index. The stockholder return shown in the graph below is not necessarily indicative of futureperformance, and we do not make or endorse any predictions as to future stockholder returns.102 The above Stock Price Performance Graph and related information shall not be deemed “soliciting material” or to be “filed” with the Securities and ExchangeCommission, nor shall such information be incorporated by reference into any future filing under the Securities Actor Exchange Act, except to the extent thatwe specifically incorporate it by reference into such filing.Dividend PolicyWe have never declared or paid any cash dividends on our capital stock. We currently intend to retain all available funds and any future earnings to supportour operations and finance the growth and development of our business. We do not intend to pay cash dividends on our common stock for the foreseeablefuture. Any future determination related to our dividend policy will be made at the discretion of our board of directors and will depend on then-existingconditions, including our financial condition, operating results, contractual restrictions, capital requirements, business prospects and other factors our boardof directors may deem relevant.StockholdersAs of January 31, 2019, there were 154 registered stockholders of record for our common stock. This number of registered stockholders does not includestockholders whose shares are held in street name by brokers and other nominees, or may be held in trust by other entities. Therefore, the actual number ofstockholders is greater than this number of registered stockholders of record.Use of Proceeds from Initial Public Offering of Common StockOn November 13, 2014, our Registration Statement on Form S-1, as amended (Reg. Nos. 333-199069 and 333-200189) was declared effective in connectionwith the initial public offering of our common stock. There has been no material change in the planned use of proceeds from our initial public offering asdescribed in our final prospectus filed with the SEC pursuant to Rule 424(b) under the Securities Act on November 14, 2014.Recent Sales of Unregistered SecuritiesDuring the year ended December 31, 2016, warrants to purchase 1,600 shares and 1,108 shares of our common stock were net exercised at a per share price of$4.38 and $15.00, respectively.During the year ended December 31, 2015, warrants to purchase 72,000 shares, 49,842 shares, 26,880 shares and 17,256 shares of our common stock were netexercised at a per share price of $4.38, $15.00, $3.13 and $4.38, respectively.These shares issued pursuant to the warrants were not registered under the Securities Act of 1933, as amended, in reliance upon the exemption set forth inSection 4(a)(2) of such Act for transactions not involving a public offering.Purchases of Equity Securities by the Issuer and Affiliated PurchasersNone.103 ITEM 6. SELECTED FINANCIAL DATAThe selected consolidated results of operations data for the years ended December 31, 2018, 2017 and 2016, and the consolidated balance sheet data as ofDecember 31, 2018 and 2017 should be read together with Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results ofOperations” and in conjunction with the consolidated financial statements, related notes, and other financial information included elsewhere in this AnnualReport. The selected consolidated results of operations data for the years ended December 31, 2015 and 2014 and the consolidated balance sheet data as ofDecember 31, 2016, 2015 and 2014 have been derived from audited financial statements not included herein. Our historical results are not necessarilyindicative of the results to be expected in the future. Years Ended December 31, 2018 2017 (1) 2016 (1) 2015 (1) 2014 (1) (in thousands, except for per share data) Result of Operations Revenue: License revenue (1) $22,269 $9,933 $50,607 $89,401 $80,792 Development and other revenue (1) 125,913 121,063 132,582 82,985 46,429 Product revenue (1) 64,776 — — — — Total revenue (1) 212,958 130,996 183,189 172,386 127,221 Operating expenses: Research and development (2) 235,839 196,517 187,206 214,089 150,794 General and administrative (2) 63,812 51,760 46,025 44,364 36,909 Total operating expenses 299,651 248,277 233,231 258,453 187,703 Loss from operations (86,693) (117,281) (50,042) (86,067) (60,482)Interest and other, net: Interest expense (10,991) (9,706) (10,725) (11,033) (11,108)Interest income and other, net 11,568 6,433 2,628 3,121 1,706 Total interest and other, net 577 (3,273) (8,097) (7,912) (9,402)Loss before income taxes (86,116) (120,554) (58,139) (93,979) (69,884)Provision for (benefit from) income taxes 304 321 (71) 242 — Net loss $(86,420) $(120,875) $(58,068) $(94,221) $(69,884)Net loss per share - basic and diluted $(1.03) $(1.66) $(0.93) $(1.56) $(3.72)Weighted-average number of common shares used in net loss per share - basic and diluted 84,062 72,987 62,744 60,337 18,775 (1) Revenue for the years ended December 31, 2017, 2016, 2015 and 2014 were recast to reflect the adoption of the new revenue standards. See Note 2 to the consolidated financial statements. (2) Stock-based compensation expense included in our results of operations: Years Ended December 31, 2018 2017 2016 2015 2014 (in thousands) Research and development $30,491 $21,807 $19,070 $16,987 $10,893 General and administrative 21,651 15,732 13,062 10,694 7,805 Total stock-based compensation expense $52,142 $37,539 $32,132 $27,681 $18,698 104 December 31, 2018 2017 (1) 2016 (1) 2015 (1) 2014 (1) (in thousands) Balance Sheet Data: Cash and cash equivalents $89,258 $673,658 $173,782 $153,324 $165,455 Short-term and long-term investments 587,964 72,566 150,407 159,567 158,633 Working capital (1) 600,982 663,010 192,806 131,468 134,314 Total assets 880,598 898,650 469,552 470,574 483,528 Deferred revenue (1) 149,880 154,911 154,737 141,511 105,416 Lease financing obligations 98,105 98,476 97,856 97,445 97,221 Accumulated deficit (1) (715,827) (630,657) (509,782) (451,714) (357,493)Total stockholders' equity (1) 509,199 528,467 115,798 133,902 186,194 Non-controlling interests 19,271 19,271 19,271 19,271 19,271 Total equity (deficit) (1) $528,470 $547,738 $135,069 $153,173 $205,465 (1) Deferred revenue and accumulated deficit as of December 31, 2017, 2016, 2015 and 2014 were recast to reflect the adoption of the new revenue standards. See Note 2 to the consolidated financial statements. 105 ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSYou should read the following discussion and analysis of our financial condition and results of operations together with our consolidated financialstatements and related notes and other financial information included in Item 15 of this Annual Report on Form 10-K. Some of the information contained inthis discussion and analysis or set forth elsewhere in this Annual Report, including information with respect to our plans and strategy for our business,international operations and product candidates, includes forward-looking statements that involve risks and uncertainties. You should review the “RiskFactors” section of this Annual Report for a discussion of important factors that could cause our actual results to differ materially from the resultsdescribed in or implied by the forward-looking statements contained in the following discussion and analysis.BUSINESS OVERVIEWWe were incorporated in 1993 in Delaware and are a leading biopharmaceutical company discovering and developing a pipeline of first-in-class therapeutics.We have applied our pioneering expertise in hypoxia-inducible factor (“HIF”) and connective tissue growth factor (“CTGF”) biology to develop innovativemedicines for the treatment of anemia, fibrotic disease, and cancer. Roxadustat (FG-4592), our most advanced product candidate, is an oral small moleculeinhibitor of HIF prolyl hydroxylase (“HIF-PH”) activity. Roxadustat has received approval of its New Drug Application (“NDA”) in anemia associated withchronic kidney disease (“CKD”) in dialysis-dependent (“DD”) patients from the National Medical Products Administration (“NMPA”) of the People’sRepublic of China (“China”). In conjunction with our collaboration partners, AstraZeneca AB (“AstraZeneca”) and Astellas Pharma Inc. (“Astellas”), we havecompleted the Phase 3 trials of roxadustat intended to support our NDA in the United States (“U.S.”) and Marketing Authorization Application (“MAA”) inthe European Union (“EU”) for the treatment of anemia in CKD. We and our partners are in the process of preparing an NDA for submission to the U.S. Foodand Drug Administration (“FDA”) and an MAA for submission to the European Medicines Agency this year. Both the U.S. NDA and European MAA forroxadustat are expected to cover anemia associated with dialysis-dependent CKD and non-dialysis-dependent CKD. In Japan, our partner Astellas has filed anNDA for roxadustat for the treatment of anemia in dialysis patients with the Pharmaceuticals and Medical Devices Agency (“PMDA”). We are also in Phase 3clinical development for the treatment of anemia associated with myelodysplastic syndromes (“MDS”). Pamrevlumab, a human monoclonal antibody thatinhibits the activity of CTGF, is advancing towards Phase 3 clinical development for the treatment of idiopathic pulmonary fibrosis (“IPF”) and pancreaticcancer, and is currently in a Phase 2 trial for Duchenne muscular dystrophy (“DMD”).Financial Highlights Years Ended December 31, 2018 2017 * 2016 * (in thousands, except for per share data) Result of Operations Revenue $212,958 $130,996 $183,189 Operating expenses 299,651 248,277 233,231 Net loss (86,420) (120,875) (58,068)Net loss per share - basic and diluted $(1.03) $(1.66) $(0.93) December 31, 2018 December 31, 2017 (in thousands) Balance Sheet Cash and cash equivalents $89,258 $673,658 Short-term and long-term investments $587,964 $72,566 Accounts receivable $63,684 $8,452 *Recast to reflect the adoption of the new revenue standards. See Note 2 to the consolidated financial statements.106 Our revenue for the year ended December 31, 2018 increased compared to the prior year primarily due to the $64.8 million product revenue for API deliveredduring 2018, under the amendment to the collaboration agreement with Astellas for roxadustat for the treatment of anemia in Japan (“Japan Agreement”), toconduct commercial scale manufacturing validation for roxadustat drug product in anticipation of commercial launch in Japan. In addition, we recognizedsubstantially the entire $15.0 million regulatory milestone associated with an NDA submission during 2018 in Japan that was included in the transactionprice and allocated to performance obligations under the Japan Agreement in the second quarter of 2018. Moreover, during the fourth quarter of 2018, a $6.0million milestone payable was triggered under the collaboration agreements with AstraZeneca upon our receipt of marketing authorization from the NMPAfor roxadustat, a first-in-class hypoxia-inducible factor prolyl hydroxylase inhibitor, for the treatment of anemia caused by CKD in patients on dialysis.Another $6.0 million milestone payable was triggered under the collaboration agreement with AstraZeneca upon our receipt of First Manufacturing Approvalfor a Product in the Field in the Territory, which allows production for Phase IV clinical studies, patients’ early experience programs, donation programs, aswell as to supply products for testing and assessments required prior to launch. Approximately $9.9 million of the total $12.0 million milestone payables wasrecognized as revenue during the fourth quarter of 2018 from performance obligations satisfied or partially satisfied. Comparatively, we received a $15.0million milestone revenue recorded under our collaboration agreements with AstraZeneca, during the fourth quarter of 2017, $11.5 million of which wasrecognized during 2017.Operating expenses increased for the year ended December 31, 2018 compared to the prior year primarily due to $22.4 million higher drug developmentexpenses associated with drug substance manufacturing activities related to pamrevlumab, $14.6 million higher stock-based compensation due to thecumulative impact of stock option grant activities, $12.9 million higher employee-related expenses resulting from higher average compensation level andhigher headcount, and $8.4 million higher facility related expenses relative to the prior period in which our property taxes were reduced as a result of a finalsettlement received for historical property tax payments, as well as higher property management and maintenance costs during the current year. The increaseswere partially offset by $11.3 million lower clinical trial activities related to roxadustat and pamrevlumab.Our research and development expenses were $235.8 million, $196.5 million and $187.2 million for the years ended December 31, 2018, 2017 and 2016,respectively. Since inception and through December 31, 2018, we have incurred a total of $1,752.0 million in research and development expenses, a majorityof which relates to the development of roxadustat, pamrevlumab and other HIF-PH inhibitors. We expect to continue to incur significant expenses andoperating losses over at least the next several years and we expect our research and development expenses to continue to increase in the future as we advanceour product candidates through clinical trials and expand our product candidate portfolio. In addition, we expect to incur significant expenses relating toseeking regulatory approval for our product candidates and commercializing those products in various markets, including China. We consider the activemanagement and development of our clinical pipeline to be particularly crucial to our long-term success. The process of conducting the necessary clinicalresearch to obtain regulatory approval is costly and time consuming.The actual probability of success for each of our product candidates and clinical programs, and our ability to generate product revenue and becomeprofitable, depends upon a variety of factors, including the quality of the product candidate, clinical results, investment in the program, competition,manufacturing capability, commercial viability, and our and our partners’ ability to successfully execute our development and commercialization plans. Fora description of the numerous risks and uncertainties associated with product development, refer to “Risk Factors.”During the year ended December 31, 2018, we had a net loss of $86.4 million, or net loss per basic and diluted share of $1.03, as compared to a net loss of$120.9 million, or net loss per basic and diluted share of $1.66 for the prior year, primarily due to an increase in revenue, partially offset by an increase inoperating expenses.Cash and cash equivalents, investments and accounts receivable totaled $740.9 million at December 31, 2018, a decrease of $13.8 million from December 31,2017, primarily due to cash used in operations.ProgramsRoxadustat, our most advanced product candidate, has received approval of its NDA in anemia associated with CKD in dialysis-dependent patients from theNMPA of China. In conjunction with our collaboration partners, we have completed the Phase 3 trials of roxadustat intended to support our NDA in the U.S.and MAA in the EU for the treatment of anemia in CKD. In Japan, Astellas submitted an NDA for the treatment of anemia in CKD patients on dialysis inSeptember 2018, which is currently under review by the PMDA. Beyond anemia in CKD, roxadustat is in Phase 3 clinical development in the U.S. andEurope and in Phase 2/3 development in China for anemia associated with MDS. Pamrevlumab, a human monoclonal antibody that inhibits the activity of CTGF, is advancing towards Phase 3 clinical development for the treatment of IPFand pancreatic cancer, and is currently in a Phase 2 trial for DMD.107 Collaboration Partnerships for RoxadustatOur current and future research, development, manufacturing and commercialization efforts with respect to roxadustat and our other product candidatescurrently in development depend on funds from our collaboration agreements with Astellas and AstraZeneca as described below.AstellasIn June 2005, we entered into the Japan Agreement with Astellas for roxadustat for the treatment of anemia in Japan. In April 2006, we entered into theEurope Agreement with Astellas for roxadustat for the treatment of anemia in Europe, the Commonwealth of Independent States, the Middle East, and SouthAfrica. Under these agreements, we provide Astellas the right to develop and commercialize roxadustat for anemia indications in these territories.We share responsibility with Astellas for clinical development activities required for the U.S. and the EU regulatory approval of roxadustat, and share equallythose development costs under the agreed development plan for such activities. Astellas will be responsible for clinical development activities and allassociated costs required for regulatory approval in all other countries in the Astellas territories. Astellas will own and have responsibility for regulatoryfilings in its territories. We are responsible, either directly or through our contract manufacturers, for the manufacture and supply of all quantities ofroxadustat to be used in development and commercialization under the agreements.The Astellas agreements will continue in effect until terminated. Either party may terminate the agreements for certain material breaches by the other party. Inaddition, Astellas will have the right to terminate the agreements for certain specified technical product failures, upon generic sales reaching a particularthreshold, upon certain regulatory actions, or upon our entering into a settlement admitting the invalidity or unenforceability of our licensed patents. Astellasmay also terminate the agreements for convenience upon advance written notice to us. In the event of any termination of the agreements, Astellas will transferand assign to us the regulatory filings for roxadustat and will assign or license to us the relevant trademarks used with the products in the Astellas territories.Under certain terminations, Astellas is also obligated to pay us a termination fee.Consideration under these agreements includes a total of $360.1 million in upfront and non-contingent payments, and milestone payments totaling $557.5million, of which $542.5 million are development and regulatory milestones and $15.0 million are commercial-based milestones. Total consideration,excluding development cost reimbursement and product sales-related payments, could reach $917.6 million. The aggregate amount of such considerationreceived, including development cost reimbursement and product sales-related payments, through December 31, 2018 totals $487.6 million.During 2016, we recognized $10.0 million of revenue as a result of the initiation by Astellas of the first Phase 3 clinical study in Japan of roxadustat fortreatment of anemia associated with CKD in patients on dialysis. During the second quarter of 2018, Astellas reported positive results from the final Phase 3CKD-dialysis trial of roxadustat in Japan, indicating that Astellas was ready to make an NDA submission for the treatment of anemia with roxadustat in CKD-dialysis patients in 2018. We evaluated the regulatory milestone payment associated with NDA submission in Japan based on variable considerationrequirements under the current revenue standards and concluded that this milestone became probable of being achieved in the second quarter of 2018.Accordingly, the consideration of $15.0 million associated with this milestone was included in the transaction price and allocated to performance obligationsunder the Japan Agreement, substantially all of which was recognized as revenue in 2018.On November 30, 2018, FibroGen and Astellas entered into an amendment to the Japan Agreement that will allow Astellas to manufacture roxadustat drugproduct for commercialization in Japan (the “Japan Amendment”). Under this amendment, FibroGen would continue to manufacture and deliver to Astellasroxadustat API. The commercial terms of the Japan Agreement relating to the transfer price for roxadustat for commercial use remain substantially the same,reflecting an adjustment for the manufacture of drug product by Astellas rather than FibroGen. This amendment obligates Astellas to purchase API fromFibroGen, of which $20.9 million was delivered to Astellas in the second quarter of 2018 under a material transfer agreement to conduct commercial scalemanufacturing validation for roxadustat drug product in anticipation of commercial launch in Japan. The remaining $43.9 million of API was delivered toAstellas in December 2018.In the fourth quarter of 2018, we were engaged in the final stages of review with our partners over the proposed development of roxadustat for the treatment ofchemotherapy induced anemia (“CIA”). AstraZeneca and Astellas approved the program in December 2018 and January 2019, respectively. Costs associatedwith the development of this indication are shared 50-50 between our two partners. For revenue recognition purposes, the Company concluded that this newindication represents a modification to the Europe agreements and will be accounted for separately, meaning the development costs associated with the newindications are distinct from the original development costs. The development service period for roxadustat for the treatment of CIA under the EuropeAgreement is estimated to continue through the end of 2023 to allow for development of this indication.108 Additionally, under these agreements, Astellas pays 100% of the commercialization costs in its territories. Astellas will pay us a transfer price, based on netsales, in the low 20% range for our manufacture and delivery of roxadustat.In addition, as of December 31, 2018, Astellas had separate investments of $80.5 million in the equity of FibroGen, Inc.AstraZenecaIn July 2013, we entered into the U.S./RoW Agreement a collaboration agreement with AstraZeneca for roxadustat for the treatment of anemia in the U.S. andall territories not previously licensed to Astellas, except China. In July 2013, through our China subsidiary and related affiliates, we entered into the ChinaAgreement a collaboration agreement with AstraZeneca for roxadustat for the treatment of anemia in China. Under these agreements we provide AstraZenecathe right to develop and commercialize roxadustat for anemia in these territories. We share responsibility with AstraZeneca for clinical developmentactivities required for U.S. regulatory approval of roxadustat.In 2015, we reached the $116.5 million cap on our initial funding obligations (during which time we shared 50% of the joint initial development costs),therefore all development and commercialization costs for roxadustat for the treatment of anemia in CKD in the U.S., Europe, Japan and all other marketsoutside of China have been paid by Astellas and AstraZeneca since reaching the cap.In China, FibroGen (China) Medical Technology Development Co., Ltd. (“FibroGen Beijing”) will conduct the development work for CKD anemia, will holdall of the regulatory licenses issued by China regulatory authorities, and will be primarily responsible for regulatory, clinical and manufacturing. Chinadevelopment costs are shared 50/50. AstraZeneca is also responsible for 100% of development expenses in all other licensed territories outside of China. Weare responsible, through our contract manufacturers, for the manufacture and supply of all quantities of roxadustat to be used in development andcommercialization under the AstraZeneca agreements.Under the AstraZeneca agreements, we will receive upfront and subsequent non-contingent payments totaling $402.2 million. Potential milestone paymentsunder the agreements total $1.2 billion, of which $571.0 million are development and regulatory milestones and $652.5 million are commercial-basedmilestones. Total consideration under the agreements, excluding development cost reimbursement, transfer price payments, royalties and profit share, couldreach $1.6 billion. The aggregate amount of such consideration received through December 31, 2018 totals $432.2 million.Under the U.S./RoW Agreement, AstraZeneca will pay for all commercialization costs in the U.S. and RoW and AstraZeneca will be responsible for the U.S.commercialization of roxadustat, with FibroGen undertaking specified promotional activities in the end stage renal disease segment in the U.S. In addition,we will receive a transfer price for delivery of commercial product based on a percentage of net sales in the low- to mid-single digit range and AstraZenecawill pay us a tiered royalty on net sales of roxadustat in the low 20% range.Under the China Agreement, which is conducted through FibroGen China Anemia Holdings, Ltd. (“FibroGen China”), the commercial collaboration isstructured as a 50/50 profit share. AstraZeneca will conduct commercialization activities in China as well as serve as the master distributor for roxadustat andwill fund roxadustat launch costs in China until FibroGen Beijing has achieved profitability. At that time, AstraZeneca will recoup 50% of their historicallaunch costs out of initial roxadustat profits in China.Payments under these agreements include over $500.0 million in upfront, non-contingent and other payments received or expected to be received prior to thefirst U.S. approval, excluding development expense reimbursement.During the second quarter of 2016, we received an upfront payment of $62.0 million as a time based development milestone.In October 2017, then the China Food and Drug Administration (“CFDA,” now known as the NMPA) accepted our NDA for registration of roxadustat foranemia in dialysis-dependent CKD and non-dialysis-dependent CKD (“NDD-CKD”) patients. This NDA submission triggered a $15.0 million milestonepayment to us by AstraZeneca, which became probable of being achieved during the third quarter of 2017, and therefore partially recognized as revenueunder the new revenue standards during 2017. On December 17, 2018, FibroGen (China) Medical Technology Development Co., Ltd. (“FibroGen China”), received marketing authorization from theNMPA for roxadustat, a first-in-class hypoxia-inducible factor prolyl hydroxylase inhibitor, for the treatment of anemia caused by CKD in patients ondialysis. This approval triggered a $6.0 million milestone payable to us by AstraZeneca. On December 29, 2018, FibroGen China received FirstManufacturing Approval for a Product in the Field in the Territory, which allows production for Phase IV clinical studies, patients’ early experienceprograms, donation programs, as well as to supply products for testing and assessments required prior to launch. This approval triggered a $6.0 millionmilestone payable to us by AstraZeneca. Approximately $9.9 million of the total $12.0 million milestone payables was recognized as revenue during thefourth quarter of 2018 from performance obligations satisfied or partially satisfied.109 In September 2016, AstraZeneca approved the protocol related to the development of roxadustat for the treatment of anemia in patients with MDS, for whichwe have received approval from then the CFDA (now known as the NMPA) for our clinical trial application for a Phase 2/3 trial and acceptance of ourInvestigational New Drug Application from the U.S. Food and Drug Administration for a Phase 3 trial. As a result, for revenue recognition purposes, duringthe third quarter of 2016, we extended the estimated joint development service period for the AstraZeneca agreements from the end of 2018 to the end of2020, to allow for development of MDS.As mentioned above, in the fourth quarter of 2018, we were engaged in the final stages of review with our partners over the proposed development ofroxadustat for the treatment of CIA. AstraZeneca and Astellas approved the program in December 2018 and January 2019, respectively. Costs associated withthe development of this indication are expected to be shared 50-50 between our two partners. In addition to CIA, in December 2018, anemia of chronicinflammation (“ACI”) and multiple myeloma (“MM”) have been approved for development by AstraZeneca and is expected to be fully funded by them. Forrevenue recognition purposes, we concluded that the approval of additional research and development services for these new indications representmodifications to our collaboration agreements in the periods in which approval was received. The research and development services associated with the newindications are distinct from other promises in our collaboration agreements, and will be accounted for separately. The development service period forroxadustat for the treatment of CIA, ACI and MM under the AstraZeneca agreements is estimated to continue through the end of 2024, to allow fordevelopment of these additional indications.AstraZeneca may terminate the U.S./RoW Agreement upon specified events, including our bankruptcy or insolvency, our uncured material breach, technicalproduct failure, or upon 180 days prior written notice at will. If AstraZeneca terminates the U.S./RoW Agreement at will, in addition to any unpaid non-contingent payments, it will be responsible for paying for a substantial portion of the post-termination development costs under the agreed development planuntil regulatory approval.AstraZeneca may terminate the China Agreement upon specified events, including our bankruptcy or insolvency, our uncured material breach, technicalproduct failure, or upon advance prior written notice at will. If AstraZeneca terminates our China Agreement at will, it will be responsible for paying fortransition costs as well as make a specified payment to FibroGen China.In the event of any termination of the agreements, but subject to modification upon termination for technical product failure, AstraZeneca will transfer andassign to us any regulatory filings and approvals for roxadustat in the affected territories that they may hold under our agreements, grant us licenses andconduct certain transition activities.Additional Information Related to Collaboration AgreementsOf the $1.113.5 billion in development and regulatory milestones payable in the aggregate under our Astellas and AstraZeneca collaboration agreements,$425.0 million is payable upon achievement of milestones relating to the submission and approval of roxadustat in DD-CKD and NDD-CKD in the U.S. andEurope.For more detailed discussions on the accounting for these agreements, refer to Note 3 to the consolidated financial statements. In addition, refer to “Business— Collaborations” for a more detailed description of our collaboration agreements.Total cash consideration received through December 31, 2018 and potential cash consideration, other than development cost reimbursement, transfer pricepayments, royalties and profit share, pursuant to our existing collaboration agreements are as follows: CashReceived ThroughDecember 31, 2018 AdditionalPotentialCash Payments TotalPotentialCash Payments (in thousands) Astellas--related-party: Japan Agreement $77,593 $95,000 $172,593 Europe Agreement 410,000 335,000 745,000 Total Astellas 487,593 430,000 917,593 AstraZeneca: U.S. / RoW Agreement 389,000 860,000 1,249,000 China Agreement 43,200 333,500 376,700 Total AstraZeneca 432,200 1,193,500 1,625,700 Total revenue $919,793 $1,623,500 $2,543,293These collaboration agreements also provide for reimbursement of certain fully burdened research and development costs as well as direct out of pocketexpenses.110 RESULTS OF OPERATIONSRevenue Years Ended December 31, Change 2018 vs. 2017 Change 2017 vs. 2016 2018 2017 * 2016 * $ % $ % (dollars in thousands)Revenue: License revenue $22,269 $9,933 $50,607 $12,336 124 % $(40,674) (80)%Development and other revenue 125,913 121,063 132,582 4,850 4 % (11,519) (9)%Product revenue 64,776 — — 64,776 100 % — — %Total revenue $212,958 $130,996 $183,189 $81,962 63 % $(52,193) (28)% *Recast to reflect the adoption of the new revenue standards. See Note 2 to the consolidated financial statements.Our revenue to date has been generated substantially from our collaboration agreements with Astellas and AstraZeneca.Under our revenue recognition policy, license revenue includes amounts from upfront, non-refundable license payments and amounts allocated pursuant tothe standalone selling price method from other consideration received during the periods. This revenue is generally recognized as deliverables are met andservices are performed. License revenues represented 11%, 8% and 28% of total revenues for the years ended December 31, 2018, 2017 and 2016,respectively.Development revenue include co-development and other development related services. Co-development services are recognized as revenue in the period inwhich they are billed to our partners, excluding China. For China co-development services, revenue is deferred until the end of the development period onceall performance obligations have been satisfied. Other development related services are recognized as revenue over the non-contingent development period,ranging from 36 to 89 months, based on a proportional performance method. Other revenues consist of sales of research and development material and havebeen included with Development and other revenue in the condensed consolidated statements of operations, as they have not been material for any of theyears presented. Development and other revenues represented 59%, 92% and 72% of total revenues for the years ended December 31, 2018, 2017 and 2016,respectively.Product revenue consists primarily of commercial-grade API sales to Astellas for purposes of commercial validation activities by Astellas. Product revenue isrecognized when we fulfill all the delivery obligations. Product revenue represented 30% of total revenue for the year ended December 31, 2018. There wasno product revenue for the years ended December 31, 2017 and 2016.We have not generated any revenues based on the sale of FDA or NMPA approved products. In the future, we may generate revenue from product sales andfrom collaboration agreements in the form of license fees, milestone payments, reimbursements for collaboration services and royalties on product sales. Weexpect that any revenues we generate will fluctuate from quarter to quarter as a result of the uncertain timing and amount of such payments and sales.Total revenue increased $82.0 million, or 63% for the year ended December 31, 2018 compared to the year ended December 31, 2017, and decreased $52.2million, or 28%, for the year ended December 31, 2017 compared to the year ended December 31, 2016, for the reasons discussed in the sections below.111 License Revenue Years Ended December 31, Change 2018 vs. 2017 Change 2017 vs. 2016 2018 2017 * 2016 * $ % $ % (dollars in thousands)License revenue: Astellas $14,323 $— $9,548 $14,323 100 % $(9,548) (100)%AstraZeneca 7,946 9,933 41,059 (1,987) (20)% (31,126) (76)%Total license revenue $22,269 $9,933 $50,607 $12,336 124 % $(40,674) (80)% *Recast to reflect the adoption of the new revenue standards. See Note 2 to the consolidated financial statements.Comparison of the years ended December 31, 2018 and 2017License revenue increased $12.3 million, or 124% for the year ended December 31, 2018 compared to the year ended December 31, 2017 due to an increasein the license revenue recognized under our collaboration agreement with Astellas, partially offset by a decrease in the license revenue recognized under ourcollaboration agreement AstraZeneca.License revenue recognized under our collaboration agreements with Astellas for the year ended December 31, 2018 represented the allocated revenuerelated to a $15.0 million regulatory milestone associated with Astellas’ expected NDA submission in Japan that was included in the transaction price duringthe second quarter of 2018 when this milestone became probable of being achieved.License revenue recognized under our collaboration agreements with AstraZeneca for the year ended December 31, 2018 represented the allocated revenuerelated to a $6.0 million milestone associated with FibroGen China’s receipt of marketing authorization from the NMPA for roxadustat, and a $6.0 millionmilestone associated with FibroGen China’s receipt of First Manufacturing Approval for a Product in the Field in the Territory. Comparatively, licenserevenue recognized under our collaboration agreements with AstraZeneca for the year ended December 31, 2017 was related to a $15.0 million regulatorymilestone payment. In 2017, the NMPA accepted our NDA for registration of roxadustat for anemia in DD CKD and NDD-CKD patients. This NDAsubmission triggered a $15.0 million milestone payment..Comparison of the years ended December 31, 2017 and 2016License revenue decreased $40.7 million, or 80% for the year ended December 31, 2017 compared to the year ended December 31, 2016 due to decreases inthe license revenue recognized under both of our collaboration agreements with AstraZeneca and with Astellas.License revenue recognized under our collaboration agreements with AstraZeneca decreased due to the impact of $15.0 million milestone revenue during thethird quarter of 2017, as compared to an upfront payment of $62.0 million during the second quarter of 2016. The revenue was also impacted by theextension of the estimated joint development service period for the AstraZeneca agreements, for revenue recognition purposes, from the end of 2018 to theend of 2020. We made this extension in the third quarter of 2016 due to the approval of the development budget for the treatment of anemia in patients withMDS. License revenue recognized under our collaboration agreements with Astellas decreased primarily due to a $10.0 million of development milestone revenuerecorded during the second quarter of 2016, with no corresponding milestones in the current year periods.Development and Other Revenue Years Ended December 31, Change 2018 vs. 2017 Change 2017 vs. 2016 2018 2017 * 2016 * $ % $ % (dollars in thousands)Development revenue: Astellas $20,903 $20,111 $21,775 $792 4 % $(1,664) (8)%AstraZeneca 104,970 100,928 110,677 4,042 4 % (9,749) (9)%Total development revenue 125,873 121,039 132,452 4,834 4 % (11,413) (9)%Other revenue 40 24 130 16 67 % (106) (82)%Total development and other revenue $125,913 $121,063 $132,582 $4,850 4 % $(11,519) (9)%112 *Recast to reflect the adoption of the new revenue standards. See Note 2 to the consolidated financial statements.Comparison of the years ended December 31, 2018 and 2017Development revenue recognized under our collaboration agreements with AstraZeneca increased $4.0 million, or 4% for the year ended December 31, 2018compared to the year ended December 31, 2017, primarily due to the allocated revenue related to the above mentioned total of $12.0 million milestonepayments during the fourth quarter of 2018.Development revenue recognized under our collaboration agreements with Astellas increased $0.8 million, or 4% for the year ended December 31, 2018compared to the year ended December 31, 2017, primarily due to the allocated revenue related to the above mentioned $15.0 million associated with theregulatory milestone of NDA submission in Japan in the second quarter of 2018.Comparison of the years ended December 31, 2017 and 2016Collaboration services and other revenue decreased $11.5 million, or 9%, for the year ended December 31, 2017 compared to the year ended December 31,2016, primarily due to a decrease in the development revenue recognized under our collaboration agreements with AstraZeneca from the impact of theextension of the estimated joint development service period for the AstraZeneca agreements, for revenue recognition purposes, from the end of 2018 to theend of 2020. We made this extension in the third quarter of 2016 due to the approval of the development budget for the treatment of anemia in patients withMDS. Development revenue for the year ended December 31, 2017 was also impacted by the allocation of the upfront payment of $62.0 million during thesecond quarter of 2016.Product RevenueAs described above, the Japan Amendment obligates Astellas to purchase API from us to conduct commercial scale manufacturing validation for roxadustatdrug product in anticipation of commercial launch in Japan. We fulfilled all the delivery obligations under the term of the Japan Amendment during the yearended December 31, 2018, and recognized the related product revenue of $64.8 million in the same period.Operating Expenses Years Ended December 31, Change 2018 vs. 2017 Change 2017 vs. 2016 2018 2017 2016 $ % $ % (dollars in thousands)Operating expenses Research and development $235,839 $196,517 $187,206 $39,322 20 % $9,311 5 %General and administrative 63,812 51,760 46,025 12,052 23 % 5,735 12 %Total operating expenses $299,651 $248,277 $233,231 $51,374 21 % $15,046 6 %Total operating expenses increased $51.4 million, or 21%, for the year ended December 31, 2018 compared to the year ended December 31, 2017, andincreased $15.0 million, or 6%, for the year ended December 31, 2017 compared to the year ended December 31, 2016, for the reasons discussed in thesections below.Research and Development ExpensesResearch and development expenses consist of third party research and development costs and the fully-burdened amount of costs associated with workperformed under collaboration agreements. Research and development costs include employee-related expenses for research and development functions,expenses incurred under agreements with clinical research organizations, other clinical and preclinical costs and allocated direct and indirect overhead costs,such as facilities costs, information technology costs and other overhead. Research and development costs are expensed as incurred. Costs for certaindevelopment activities are recognized based on an evaluation of the progress to completion of specific tasks using information and data provided to us byour vendors and our clinical sites.113 The following table summarizes our research and development expenses incurred during the years ended December 31, 2018, 2017 and 2016: Years Ended December 31, 2018 2017 2016 Product Candidate Phase of Development (in thousands) Roxadustat Phase 3 $139,876 $125,144 $132,562 Pamrevlumab Phase 2 72,063 52,260 34,876 FG-5200 Preclinical 5,122 4,628 4,989 Other research and development expenses 18,778 14,485 14,779 Total research and development expenses $235,839 $196,517 $187,206The program-specific expenses summarized in the table above include costs we directly attribute to our product candidates. We allocate research anddevelopment salaries, benefits, stock-based compensation and other indirect costs to our product candidates on a program-specific basis, and we includethese costs in the program-specific expenses. We expect our research and development expenses to continue to increase in the future as we advance ourproduct candidates through clinical trials and expand our product candidate portfolio.Comparison of the years ended December 31, 2018 and 2017Research and development expenses increased $39.3 million, or 20%, for the year ended December 31, 2018 compared to the year ended December 31, 2017.The increase was primarily due to increases in drug development expenses of $22.4 million, employee-related costs of $9.9 million, stock-basedcompensation expense of $8.7 million, allocated facility related expense of $6.5 million, and outside services of $2.4 million, partially offset by a decrease inclinical trials costs of $11.3 million. Drug development expenses increased primarily due to higher drug substance manufacturing activities related topamrevlumab. Employee-related costs increased due to higher headcount, higher average compensation level, and increased travel, seminar and conferencecosts. Stock-based compensation expense increased due to the cumulative impact of stock option grant activities. Facility related expenses, as part of theallocated overhead costs, was higher relative to the prior period in which our property taxes were reduced as a result of a final settlement we obtained relatedto historical property tax payments, as well as higher property management and maintenance costs during the current year. Outside services costs increaseddue to higher scientific contract work related to roxadustat and other HIF-PH inhibitors. Clinical trial costs decreased as a result of nearing completion ofPhase 3 trials for roxadustat and Phase 2 trials for pamrevlumab. We expect development expenses to increase as we begin Phase 3 trials for pamrevlumab.Comparison of the years ended December 31, 2017 and 2016Research and development expenses increased $9.3 million, or 5%, for the year ended December 31, 2017 compared to the year ended December 31, 2016.The increase was primarily due to increases in employee-related costs of $8.6 million, drug development expenses of $8.2 million and stock-basedcompensation of $2.7 million, partially offset by decreases in outside services of $5.8 million and allocated facility related expense of $4.5 million. Drugdevelopment expenses increased due to higher drug substance manufacturing activities related to pamrevlumab. Employee-related costs increased due tohigher headcount and higher average compensation level. Stock-based compensation increased due to cumulative impact of stock option grant activities.Outside services costs decreased due to lower scientific contract work related to other HIF-PH inhibitors. Facility related expenses, as part of the allocatedoverhead costs, decreased due to the final assessment we obtained during 2017 resulting in a reduction in assessed property tax, as compared to an additionalassessed property tax in 2016.General and Administrative ExpensesGeneral and administrative expenses consist primarily of employee-related expenses for executive, operational, finance, legal, compliance and humanresource functions. Other general and administrative expenses include facility-related costs and professional fees, accounting and legal services, other outsideservices, recruiting fees and expenses associated with obtaining and maintaining patents.114 We anticipate that our general and administrative expenses will increase in the future as we increase our headcount to support our continued research anddevelopment and potential commercialization of our product candidates. We also anticipate increased expenses, including exchange listing and SECrequirements, director and officer insurance premiums, legal, audit and tax fees, regulatory compliance programs, and investor relations costs associated withbeing a public company and ceasing to be an emerging growth company. Additionally, if and when we believe the first regulatory approval of one of ourproduct candidates appears likely, we anticipate an increase in payroll and related expenses as a result of our preparation for commercial operations,especially as it relates to the sales and marketing of our product candidates.Comparison of the years ended December 31, 2018 and 2017General and administrative expenses increased $12.1 million, or 23%, for the year ended December 31, 2018 compared to the year ended December 31, 2017.The increase was primarily due to increases in stock-based compensation expense of $5.9 million, employee-related costs of $3.0 million, facility relatedexpense of $1.8 million, and outside services costs of $1.1 million. Stock-based compensation expense increased due to cumulative impact of stock optiongrant activities. Employee-related costs increased due to higher average compensation level and higher headcount. Facility related expenses, as part of theallocated overhead costs, was higher relative to the prior period in which our property taxes were reduced as a result of a final settlement we obtained relatedto historical property tax payments, as well as higher property management and maintenance costs during the current year. Outside services costs increaseddue to corporate activities surrounding the Japan Amendment and NDA approval during the fourth quarter of 2018.Comparison of the years ended December 31, 2017 and 2016General and administrative expenses increased $5.7 million, or 12%, for the year ended December 31, 2017 compared to the year ended December 31, 2016.The increase was primarily due to increases in employee-related costs of $4.5 million and stock-based compensation expense of $2.7 million, partially offsetby a decrease in facility related expense of $1.9 million. Employee-related costs increased due to higher average compensation level, higher headcount, andincreased recruiting activities. Stock-based compensation expense increased due to cumulative impact of stock option grant activities. Facility relatedexpenses decreased due to the final assessment we obtained during 2017 resulting in a reduction in assessed property tax, as compared to an additionalassessed property tax in 2016.Interest and Other, Net Years Ended December 31, Change 2018 vs. 2017 Change 2017 vs. 2016 2018 2017 2016 $ % $ % (dollars in thousands) Interest and other, net: Interest expense $(10,991) $(9,706) $(10,725) $(1,285) 13 % $1,019 (10)%Interest income and other, net 11,568 6,433 2,628 5,135 80 % 3,805 145 %Total interest and other, net $577 $(3,273) $(8,097) $3,850 (118)% $4,824 (60)%Interest ExpenseIn connection with our long-term lease for our corporate headquarters in San Francisco, California, which was entered into in September 2006, and the leasefor our pilot plant located in Beijing Yizhuang Biomedical Park (“BYBP”), which was entered into in February 2013, as the monthly lease payments aremade, we record interest expense and an increase or reduction in the corresponding lease financing obligation for any amounts allocated to or deficienciesbeing applied to the principal value of these obligations.Interest expense includes payments made for imputed interest related to the facility lease financing obligations for our leased facilities in San Francisco andChina (see Note 8 to the consolidated financial statements) as well as interest related to the Technology Development Center of the Republic of Finlandproduct development obligations (see Note 6 to the consolidated financial statements).Comparison of the years ended December 31, 2018 and 2017Interest expense increased $1.3 million, or 13%, for the year ended December 31, 2018 compared to the year ended December 31, 2017 primarily due to areduction in the imputed interest resulting from the government rent subsidy received by FibroGen China in 2017.115 Comparison of the years ended December 31, 2017 and 2016Interest expense decreased $1.0 million, or 10%, for the year ended December 31, 2017 compared to the year ended December 31, 2016 due to a reduction inthe imputed interest resulting from the government rent subsidy received by FibroGen Beijing during the fourth quarter of 2017.Interest Income and Other, NetInterest income and other, net primarily include interest income earned on our cash, cash equivalents and investments, foreign currency transaction gains(losses), remeasurement of certain monetary assets and liabilities in non-functional currency of our subsidiaries into the functional currency, and realizedgains (losses) on sales of investments.Comparison of the years ended December 31, 2018 and 2017Interest income and other, net increased $5.1 million, or 80%, for the year ended December 31, 2018 compared to the year ended December 31, 2017,primarily due to $7.0 million higher interest earned on our cash, cash equivalents and investments associated with the higher average balances and $1.6million higher realized foreign currency gain during the current year period. The increases were partially offset by $1.1 million higher unrealized loss on ourmarketable equity investments during the current year. In addition, a total of approximately $2.0 million government industry subsidies was received byFibroGen Beijing during the prior year, which did not recur in the current year.Comparison of the years ended December 31, 2017 and 2016Interest income and other, net increased $3.8 million, or 145%, for the year ended December 31, 2017 compared to the year ended December 31, 2016primarily due to a total of approximately $2.0 million government industry subsidies received by FibroGen Beijing during the fourth quarter of 2017, $1.7million higher interest earned on our cash, cash equivalents and investments associated with the higher average balances, partially offset by the unrealized foreign currency translation loss on our monetary assets and liabilities denominated in foreign currency.Provision for (Benefit from) Income Taxes Years Ended December 31, 2018 2017 * 2016 * (dollars in thousands) Loss before income taxes $(86,116) $(120,554) $(58,139)Provision for income taxes 304 321 (71)Effective tax rate (0.4)% (0.3)% 0.1% *Recast to reflect the adoption of the new revenue standards. See Note 2 to the consolidated financial statements.The provisions for income taxes for the years end December 31, 2018 and 2017 were due to foreign taxes. The benefit from income taxes for the year endedDecember 31, 2016 was due to the tax effect arising from unrealized gains recognized during the current year in other comprehensive income related toavailable-for-sale securities, partially offset by foreign taxes.On December 22, 2017, the Tax Cuts and Jobs Act (“Tax Act”) was signed into law making significant changes to the Internal Revenue Code. Changesinclude, but are not limited to, a corporate tax rate decrease from 35% to 21% effective for tax years beginning after December 31, 2017, the transition of U.Sinternational taxation from a worldwide tax system to a territorial system, and a one-time transition tax on the mandatory deemed repatriation of cumulativeforeign earnings as of December 31, 2017. In the fourth quarter of 2018, we completed our analysis to determine the effect of the Tax Act and no materialadjustments were recognized as of December 31, 2018. Developing interpretations of the provisions of the Tax Act, changes to U.S. Treasury regulations,administrative interpretations or court decisions interpreting the Tax Act in the future periods may require further adjustments to our analysis.Based upon the weight of available evidence, which includes our historical operating performance, reported cumulative net losses since inception andexpected continuing net loss, we have established a full valuation allowance against our net deferred tax assets as we do not currently believe that realizationof those assets is more likely than not. We will continue to maintain a full valuation allowance on our net deferred tax assets until there is sufficient evidenceto support the reversal of all or some portion of this allowance.116 SELECTED QUARTERLY FINANCIAL DATAThe following tables present unaudited quarterly results for 2018 and 2017. These tables include all adjustments, consisting only of normal recurringadjustments that we consider for the fair statement of our consolidated financial position and operating results for the quarters presented. Payments from ourcollaboration partners have caused, and are likely to continue to cause, fluctuations in our quarterly results. These unaudited quarterly results of operationsshould be read in conjunction with the consolidated financial statements and notes included in Item 8 of this Annual Report on Form 10-K. We haveprepared the unaudited information on the same basis as our audited consolidated financial statements. Our operating results for any quarter are notnecessarily indicative of results for any future quarters or for a full year. 2018 Fourth Quarter Third Quarter Second Quarter First Quarter (in thousands, except for per share data) Revenue (b) $108,054 $29,027 $43,952 $31,925 Operating expenses 88,135 71,799 67,193 72,524 Net income (loss) 20,952 (42,556) (23,420) (41,396)Net income (loss) per share (c): Basic 0.25 (0.50) (0.28) (0.50)Diluted $0.23 $(0.50) $(0.28) $(0.50) 2017 Fourth Quarter Third Quarter Second Quarter First Quarter (in thousands, except for per share data) Revenue (a) $30,736 $40,550 $30,268 $29,442 Operating expenses 66,320 63,289 60,406 58,262 Net loss (33,894) (24,459) (31,912) (30,610)Net loss per share - basic and diluted (c): $(0.41) $(0.32) $(0.46) $(0.48) (a)Revenue for each quarter of the year ended December 31, 2017 was recast to reflect the adoption of the new revenue standards. See Note 2 to theconsolidated financial statements.(b)Revenue for the fourth quarter of 2018 was significantly higher compared to other quarters due to the product revenue recognized, and revenuerecognized on two milestone payments.(c)Basic and diluted net income (loss) per share is computed independently for each of the quarters presented. Therefore, the sum of quarterly basic anddiluted net income (loss) per share may not equal annual basic and diluted net income (loss) per share.LIQUIDITY AND CAPITAL RESOURCESFinancial ConditionsWe have historically funded our operations principally from the sale of common stock (including our public offering proceeds) and from the execution ofcollaboration agreements involving license payments, milestones and reimbursement for development services.On April 11, 2017, we closed an offering of our common stock. In this offering, we sold 5,228,750 shares of our common stock at a public offering price of$22.95 per share. Net proceeds from this offering were $115.1 million, after deducting underwriting discounts and commissions of $4.9 million. In addition,the total offering expenses were approximately $0.6 million. On August 24, 2017, we completed another follow-on offering of our common stock. In thisoffering, we sold a total of 9,200,000 shares of our common stock at a public offering price of $40.75 per share. Net proceeds from this offering were $356.2million, after deducting underwriting discounts and commissions of $18.7 million. In addition, the total offering expenses were approximately $0.4 million.As of December 31, 2018, we had cash and cash equivalents of $89.3 million. Cash is invested in accordance with our investment policy, primarily with aview to liquidity and capital preservation. Investments, consisting of available-for-sale debt investments, marketable equity investments, term deposit andcertificate of deposit, and stated at fair value, are also available as a source of liquidity. As of December 31, 2018 we had short-term and long-terminvestments of $532.1 million and $55.8 million, respectively. As of December 31, 2018, a total of $21.9 million of our cash and cash equivalents was heldoutside of the U.S. in our foreign subsidiaries to be used primarily for our China operations.117 Operating Capital RequirementsTo date, we have not generated any revenue from product sales. We do not know when, or if, we will generate any revenue from product sales. We do notexpect to generate significant revenue from product sales unless and until we obtain regulatory approval of and commercialize one or more of our current orfuture product candidates. We anticipate that we will continue to generate losses for the foreseeable future, and we expect the losses to increase as wecontinue the development of, and seek regulatory approvals for, our product candidates, and begin to commercialize any approved products. To date, wehave funded certain portions of our research and development and manufacturing efforts in China and Europe through outside parties. There is no guaranteethat sufficient funds will be available to continue to fund these development efforts through commercialization or otherwise. Although our share of expensesfor roxadustat will decrease as a result of AstraZeneca funding all non-China collaboration expenses not reimbursed by Astellas, we expect our research anddevelopment expenses to continue to increase as we invest in our other programs. We are subject to all the risks related to the development andcommercialization of novel therapeutics, and we may encounter unforeseen expenses, difficulties, complications, delays and other unknown factors that mayadversely affect our business. We anticipate that we will need substantial additional funding in connection with our continuing operations.We believe that our existing cash and cash equivalents, short-term and long-term investments and accounts receivable will be sufficient to meet ouranticipated cash requirements for at least the next 12 months from the date of this Annual Report on Form 10-K. However, our liquidity assumptions maychange over time, and we could utilize our available financial resources sooner than we currently expect. In addition, we may elect to raise additional fundsat any time through equity, equity-linked or debt financing arrangements. Our forecast of the period of time through which our financial resources will beadequate to support our operations is a forward-looking statement and involves risks and uncertainties, and actual results could vary as a result of a number offactors. We have based this estimate on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than wecurrently expect. Our future capital requirements and the adequacy of available funds will depend on many factors, including those set forth under Part I, Item1A “Risk Factors” in this Annual Report on Form 10-K. We may not be able to secure additional financing to meet our operating requirements on acceptableterms, or at all. If we raise additional funds by issuing equity or equity-linked securities, the ownership of our existing stockholders will be diluted. If we raiseadditional financing by the incurrence of indebtedness, we will be subject to increased fixed payment obligations and could also be subject to restrictivecovenants, such as limitations on our ability to incur additional debt, and other operating restrictions that could adversely impact our ability to conduct ourbusiness. If we are unable to obtain needed additional funds, we will have to reduce our operating expenses, which would impair our growth prospects andcould otherwise negatively impact our business.Cash Sources and UsesThe following table summarizes the primary sources and uses of cash for the years ended December 31, 2018, 2017 and 2016: Years Ended December 31, 2018 2017 2016 (in thousands) Net cash provided by (used in): Operating activities $(76,144) $(66,513) $7,108 Investing activities (522,123) 69,866 6,622 Financing activities 13,875 496,472 6,738 Effect of exchange rate changes on cash and cash equivalents (8) 51 (10)Net increase (decrease) in cash and cash equivalents $(584,400) $499,876 $20,458Operating ActivitiesNet cash used in operating activities was $76.1 million for the year ended December 31, 2018 and consisted primarily of net loss of $86.4 million adjusted fornon-cash items of $58.7 million and a net decrease in operating assets and liabilities of $48.4 million. The significant non-cash items included stock-basedcompensation expense of $52.1 million, depreciation expense of $6.6 million, unrealized loss on our marketable equity investments of $1.1 million andrealized foreign currency gain of $1.1 million. The significant items in the changes in operating assets and liabilities included decreases resulting fromaccounts receivable of $55.2 million and deferred revenue of $5.0 million, partially offset by increases resulting from accrued liabilities of $5.6 million,accounts payable of $3.6 million, other long-term liabilities of $1.6 million and other assets of $1.1 million. The change in accounts receivable was primarilyrelated to the delivery of $43.9 million roxadustat API to Astellas in December 2018 under the Japan Amendment, as well as the timing of the receipt ofpayments and recognition of revenues under our collaboration agreements with Astellas and AstraZeneca. The change in deferred revenue was related to therecognition of revenues under our collaboration agreements with Astellas and AstraZeneca. The changes in accrued liabilities, accounts payable and otherlong-term liabilities were primarily driven by the timing of invoicing and payments. The change in other assets was primarily related to a cash refund forvalue added tax received by FibroGen China during the third quarter of 2018.118 Net cash used in operating activities was $66.5 million for the year ended December 31, 2017, which consisted primarily of net loss of $120.9 million,adjusted for non-cash items of $45.3 million and a net increase in operating assets and liabilities of $9.0 million. The significant non-cash items includedstock-based compensation expense of $37.5 million, depreciation expense of $6.1 million and amortization of bond premium/discount of $1.8 million. Thesignificant items in the changes in operating assets and liabilities included increases resulted from accrued expenses of $9.2 million, accounts receivable of$2.0 million and other long-term liabilities of $1.6 million, partially offset by decreases resulted from other assets of $2.4 million and prepaid expenses andother current assets of $1.9 million. The changes in accrued liabilities and other long-term liabilities were primarily driven by clinical trial activities and thetiming of payments. The change in accounts receivable were related to the timing of the receipt of upfront payments and recognition of revenues under ourcollaboration agreements with Astellas and AstraZeneca. The change in other assets was primarily driven by the input valuation added tax accumulatedduring the current year and payment for the land use right fee for the commercial active pharmaceutical ingredients manufacturing facility that we areestablishing in China. The change in prepaid expenses and other current assets was primarily driven by the timing of invoicing and payments.Net cash provided by operating activities was $7.1 million for the year ended December 31, 2016, which consisted primarily of net loss of $58.1 million,adjusted for non-cash items of $40.7 million and a net increase in operating assets and liabilities of $24.5 million. The significant non-cash items includedstock-based compensation expense of $32.1 million, depreciation expense of $6.0 million and amortization of the premium on investments of $2.7 million.The significant items in the changes in operating assets and liabilities included increases resulted from deferred revenue of $13.2 million, accounts receivableof $5.0 million, accrued liabilities of $3.0 million, other long-term liabilities of $1.9 million, and prepaid expenses and other current assets of $1.1 million.The changes in deferred revenue and accounts receivable were related to the timing of the receipt of upfront payments and recognition of revenues under ourcollaboration agreements with Astellas and AstraZeneca. The change in accounts payable and accrued liabilities were primarily driven by clinical trialactivities and the timing of payments. The changes in other long-term liabilities and prepaid expenses and other current assets were driven by the timing ofinvoicing and payments.Investing ActivitiesInvesting activities primarily consist of purchases of property and equipment, purchases of investments, and proceeds from the maturity and sale ofinvestments.Net cash used in investing activities was $522.1 million for the year ended December 31, 2018 and consisted of cash used in purchases of available-for-salesecurities and term deposit of $576.9 million, and purchases of property and equipment of $8.0 million, partially offset by proceeds from maturities ofinvestments of $54.4 million and sales of available-for-sale securities of $8.2 million.Net cash provided by investing activities for the year ended December 31, 2017 was $69.9 million, which consisted of proceeds from maturities and sales ofavailable-for-sale securities of $78.5 million, partially offset by cash used in purchases of property and equipment of $8.5 million.Net cash provided by investing activities for the year ended December 31, 2016 was $6.6 million, which consisted of proceeds from maturities and sales ofavailable-for-sale securities of $16.9 million, partially offset by cash used in purchases of available-for-sale securities of $9.0 million and purchases ofproperty and equipment of $1.3 million.Financing ActivitiesFinancing activities primarily reflect proceeds from the issuance of our common stock, cash paid for payroll taxes on restricted stock unit releases,repayments of our lease liability.Net cash provided by financing activities was $13.9 million for the year ended December 31, 2018 and consisted primarily of $29.8 million of proceeds fromthe issuance of common stock upon exercise of stock options and purchases under ESPP, partially offset by $15.6 million of cash paid for payroll taxes onrestricted stock unit releases, and $0.4 million of repayments on our lease liability.Net cash provided by financing activities for the year ended December 31, 2017 was $496.5 million, which consisted primarily of $471.2 million of totalproceeds from follow-on offerings in April and August of 2017, net of underwriting discounts and commission costs, $34.9 million of proceeds from theissuance of common stock upon exercise of stock options and purchases under ESPP, partially offset by $8.3 million of cash paid for payroll taxes onrestricted stock unit releases.Net cash provided by financing activities for the year ended December 31, 2016 was $6.7 million, which consisted of $9.9 million of proceeds from theissuance of common stock upon exercise of stock options and purchases under ESPP, partially offset by $2.7 million of cash paid for payroll taxes onrestricted stock unit releases and $0.4 million of repayments on our lease liability.119 Off-Balance Sheet ArrangementsDuring the year ended December 31, 2018, we did not have any relationships with unconsolidated organizations or financial partnerships, such as structuredfinance or special purpose entities that would have been established for the purpose of facilitating off-balance sheet arrangements.Indemnification AgreementsIn the ordinary course of business, we provide indemnifications of varying scope and terms to vendors, lessors, business partners and other parties withrespect to certain matters, including, but not limited to, losses arising out of breach of such agreements, solutions to be provided by us or from intellectualproperty infringement claims made by third parties. In addition, we have entered into indemnification agreements with directors and certain officers andemployees that will require us, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors,officers or employees.Contractual Obligations and CommitmentsContractual ObligationsAt December 31, 2018, our contractual obligations were as follows: Payments Due In Less Than 1Year 1 - 3 Years 3 - 5 Years More Than 5Years Total (in thousands) Operating lease obligations $444 $257 $16 $— $717 Lease financing obligations 14,379 28,843 27,207 — 70,429 Total contractual obligations $14,823 $29,100 $27,223 $— $71,146 The contractual obligations table excludes uncertain tax benefits of approximately $28.0 million that are disclosed in Note 12 to the consolidated financialstatements because these uncertain tax positions, if recognized, would be an adjustment to the deferred tax assets.Clinical TrialsAs of December 31, 2018, we have several on-going clinical studies in various stages. Under agreements with various CROs, and clinical study sites, we incurexpenses related to clinical studies of our product candidates and potential other clinical candidates. The timing and amounts of these disbursements arecontingent upon the achievement of certain milestones, patient enrollment and services rendered or as expenses are incurred by the CROs or clinical trialsites. Therefore we cannot estimate the potential timing and amount of these payments and they have been excluded from the table above. Although ourmaterial contracts with CROs are cancellable, we have historically not cancelled such contracts.Product Development ObligationsAs of December 31, 2018, our FibroGen Europe Oy (“FibroGen Europe”) subsidiary had $10.8 million of principal outstanding and $6.0 million of interestaccrued related to the TEKES loans, respectively, which have been included as product development obligations on our consolidated balance sheet.There is no stated maturity date related to these loans and each loan may be forgiven if the research work funded by TEKES does not result in aneconomically profitable business or does not meet its technological objectives. In addition, we are not a guarantor of the TEKES loans, and these loans arenot repayable by FibroGen Europe until it has distributable funds. We do not expect FibroGen Europe to have such funds for at least the next five years. Forthe foregoing reasons, we cannot estimate the potential timing and the amounts of repayments (if required) or forgiveness. As a result, the TEKES loans havebeen excluded from the table above.120 CRITICAL ACCOUNTING POLICIES AND ESTIMATESOur management’s discussion and analysis of our financial condition and results of operations are based on our financial statements, which have beenprepared in accordance with accounting principles generally accepted in the U.S. The preparation of these financial statements requires us to make estimatesand judgments that affect the reported amounts of assets, liabilities, and expenses and the disclosure of contingent assets and liabilities in our financialstatements. We evaluate our estimates and judgments on an ongoing basis. We base our estimates on historical experience, known trends and events, andvarious other factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carryingvalues of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions orconditions.While our significant accounting policies are described in more detail in the notes to our financial statements appearing elsewhere in this Annual Report, webelieve the following accounting policies to be most critical to the judgments and estimates used in the preparation of our financial statements.Revenue RecognitionSubstantially all of our revenues to date have been generated from our collaboration agreements.Our collaboration agreements include multiple performance obligations comprised of promised services, or bundles of services, that are distinct. Services thatare not distinct are combined with other services in the agreement until they form a distinct bundle of services. Our process for identifying performanceobligations and an enumeration of each obligation for each agreement is outlined in Note 3 “Collaboration Agreements” to our consolidated financialstatements. Determining the performance obligations within a collaboration agreement often involves significant judgment and is specific to the facts andcircumstances contained in each agreement.We have identified the following material promises under our collaboration agreements: (1) license of FibroGen technology, (2) the performance of co-development services, including manufacturing of clinical supplies and other services during the development period, and (3) manufacture of commercialsupply. The evaluation as to whether these promises are distinct, and therefore represent separate performance obligations, is described in more details inNote 3 “Collaboration Agreements” to our consolidated financial statements.For revenue recognition purposes, we determine that the term of our collaboration agreements begin on the effective date and ends upon the completion of allperformance obligations contained in the agreements. In each agreement, the contract term is defined as the period in which parties to the contract havepresent and enforceable rights and obligations. We believe that the existence of what it considers to be substantive termination penalties on the part of thecounterparty create sufficient incentive for the counterparty to avoid exercising its right to terminate the agreement unless in exceptionally rare situations.The transaction price for each collaboration agreement is determined based on the amount of consideration we expect to be entitled for satisfying allperformance obligations within the agreement. Our collaboration agreements include payments to us of one or more of the following: non-refundable upfrontlicense fees; co-development billings; development, regulatory, and commercial milestone payments; and royalties on net sales of licensed products.Upfront license fees are non-contingent and non-refundable in nature and are included in the transaction price at the point when the license fees become dueto us. We do not assess whether a contract has a significant financing component if the expectation at contract inception is such that the period betweenpayment by the customer and the transfer of the promised goods or services to the customer will be one year or less.Co-development billings resulting from our research and development efforts, which are reimbursable under our collaboration agreements, are consideredvariable consideration. Determining the reimbursable amount of research and development efforts requires detailed analysis of the terms of the collaborationagreements and the nature of the research and development efforts incurred. Determining the amount of variable consideration from co-development billingsrequires us to make estimates of future research and development efforts, which involves significant judgment. Co-development billings are allocatedentirely to the co-development services performance obligation when amounts are related specifically to research and development efforts necessary tosatisfy the performance obligation, and such an allocation is consistent with the allocation objective.Milestone payments are also considered variable consideration, which requires us to make estimates of when achievement of a particular milestone becomesprobable. Similar to other forms of variable consideration, milestone payments are included in the transaction price when it becomes probable that suchinclusion would not result in a significant revenue reversal. Milestone payments are therefore included in the transaction price when achievement of themilestone becomes probable.121 Product revenue consists primarily of sales of commercial-grade API used in support of pre-commercial validation work. In 2018, we recorded revenue fromcommercial-grade API sales to Astellas based on a transaction price that is subject to potential future adjustments. This represents a form of variableconsideration. With respect to these sales in 2018, the transaction price will be adjusted at the time the roxadustat listed price is issued by the JapaneseMinistry of Health, Labour and Welfare to reflect differences between estimated and actual listed price, yield from the manufacture of bulk product tablets,and bulk product manufacturing costs. We evaluate the latest available facts and circumstances, including listed prices of comparable drug products in Japanand historical bulk drug product manufacturing yields and costs, to determine whether any adjustments to the estimated transaction price is necessary. As ofDecember 31, 2018, no new facts or circumstances were available to warrant an adjustment to the transaction price.For arrangements that include sales-based royalties and for which the license is deemed to be the predominant item to which the royalties relate, we recognizerevenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has beensatisfied (or partially satisfied). To date, we have not recognized any royalty revenue resulting from our collaboration arrangements.The transaction price is allocated to performance obligations based on their relative standalone selling price (“SSP”), with the exception of co-developmentbillings allocated entirely to co-development services performance obligations. The SSP is determined based on observable prices at which we separately sellthe products and services. If an SSP is not directly observable, then we will estimate the SSP considering marketing conditions, entity-specific factors, andinformation about the customer or class of customer that is reasonably available. The process for determining SSP involves significant judgment and includesconsideration of multiple factors, including assumptions related to the market opportunity and the time needed to commercialize a product candidatepursuant to the relevant license, estimated direct expenses and other costs, which include the rates normally charged by contract research and contractmanufacturing organizations for development and manufacturing obligations, and rates that would be charged by qualified outsiders for committee services. Significant judgment may be required in determining whether a performance obligation is distinct, determining the amount of variable consideration to beincluded in the transaction price, and estimating the SSP of each performance obligation. An enumeration of our significant judgments is outlined in Note 3“Collaboration Agreements” to our consolidated financial statements.For each performance obligation identified within an arrangement, we determine the period over which the promised services are transferred and theperformance obligation is satisfied. Service revenue is recognized over time based on progress toward complete satisfaction of the performance obligation.We use an input method to measure progress toward the satisfaction of co-development services and certain other related performance obligations, which isbased on costs of labor hours or full time equivalents and out-of-pocket expenses incurred relative to total expected costs to be incurred. We believe thismeasure of progress provides a faithful depiction of the transfer of services because other measures do not measure as accurately how we transfer ourperformance obligations to our collaboration partners.Clinical Trial AccrualsClinical trial costs are a component of research and development expenses. We accrue and expense clinical trial activities performed by third parties basedupon actual work completed in accordance with agreements established with clinical research organizations and clinical sites. We determine the actual coststhrough external service providers as well as confirmation with internal personnel as to the progress or stage of completion of trials or services and the agreed-upon fee to be paid for such services.Income TaxesWe account for income taxes using an asset and liability approach. Deferred income taxes reflect the net tax effects of temporary differences between thecarrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Operating loss and tax creditcarryforwards are measured by applying currently enacted tax laws. We record a valuation allowance to reduce our deferred tax assets to reflect the netamount that we believe is more likely than not to be realized. Realization of our deferred tax assets is dependent upon the generation of future taxableincome, the amount and timing of which are uncertain. The valuation allowance requires an assessment of both positive and negative evidence whendetermining whether it is more likely than not that deferred tax assets are recoverable; such assessment is required on a jurisdiction by jurisdiction basis.Based upon the weight of available evidence at December 31, 2018, we continue to maintain a full valuation allowance against all of our deferred tax assetsafter management considered all available evidence, both positive and negative, including but not limited to our historical operating results, income or lossin recent periods, cumulative income in recent years, forecasted earnings, future taxable income, and significant risk and uncertainty related to forecasts.122 We recognize the tax effects of an uncertain tax position only if it is more likely than not to be sustained based solely on its technical merits as of thereporting date and only in an amount more likely than not to be sustained upon review by the tax authorities. We evaluate uncertain tax positions on aquarterly basis and adjust the liability for changes in facts and circumstances, such as new regulations or interpretations by the taxing authorities, newinformation obtained during a tax examination, significant amendment to an existing tax law, or resolution of an examination. To the extent that the final taxoutcome of these matters is different than the amounts recorded, such differences will impact the income tax provision in the period in which suchdetermination is made. The resolution of our uncertain income tax positions is dependent on uncontrollable factors such as law changes, new case law, andthe willingness of the income tax authorities to settle, including the timing thereof and other factors. Although we do not anticipate significant changes toour uncertain income tax positions in the next twelve months, items outside of our control could cause our uncertain income tax positions to change in thefuture, which would be recorded in our consolidated statements of operations. Interest and/or penalties related to income tax matters are recognized as acomponent of income tax expense.Stock-Based CompensationWe measure and recognize compensation expense for all stock options granted to our employees, directors and non-employees based on the estimated fairvalue of the award on the grant date. We use the Black-Scholes valuation model to estimate the fair value of stock option awards. The fair value is recognizedas expense, net of estimated forfeitures, over the requisite service period, which is generally the vesting period of the respective award, on a straight-linebasis. We believe that the fair value of stock options granted to non-employees is more reliably measured than the fair value of the services received. As such,the fair value of the unvested portion of the options granted to non-employees is re-measured as of each reporting date. The resulting increase in value, if any,is recognized as expense during the requisite service period on a straight-line basis. The determination of the grant date fair value of options using an optionpricing model is affected by our estimated common stock fair value and requires management to make a number of assumptions, including the expected lifeof the option, the volatility of the underlying stock, the risk-free interest rate and expected dividends.123 Recently Issued and Adopted Accounting GuidanceIn May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts withCustomers (Topic 606) (“ASU 2014-09”), which supersedes the revenue recognition requirements in Accounting Standards Codification (“ASC”) 605,Revenue Recognition. ASU 2014-09 is based on the principle that revenue is recognized to depict the transfer of goods or services to customers in an amountthat reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 also requires additionaldisclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments andchanges in judgments and assets recognized from costs incurred to obtain or fulfill a contract. Subsequently, the FASB has issued the following standardsrelated to ASU 2014-09: ASU No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations; ASU No. 2016-10,Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing; ASU No. 2016-12, Revenue from Contracts withCustomers (Topic 606): Narrow-Scope Improvements and Practical Expedients; and ASU No. 2016-20, Technical Corrections and Improvements to Topic606, Revenue from Contracts with Customers (collectively, the “new revenue standards”). Under ASC 606, we recognize revenue when our customer obtainscontrol of promised goods or services, in an amount that reflects the consideration which we expect to receive in exchange for those goods or services. Todetermine revenue recognition for arrangements that we determine are within the scope of ASC 606, we perform the following five steps: (i) identify thecontract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price tothe performance obligations in the contract; and (v) recognize revenue when (or as) we satisfy a performance obligation. We only apply the five-step model tocontracts when it is probable that we will collect the consideration we are entitled to in exchange for the goods or services we transfer to the customer. Atcontract inception, once the contract is determined to be within the scope of ASC 606, we assess the goods or services promised within each contract anddetermines those that are performance obligations and assesses whether each promised good or service is distinct. We then recognize as revenue the amountof the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. We adopted the newrevenue standards as of January 1, 2018 using the full retrospective method, which required us to recast the prior reporting period presented in theconsolidated financial statements. The primary impact upon adoption of the new revenue standards relates to the manner in which revenue is recognized forco-development billings and milestone payments under our collaboration arrangements. Under the new revenue standards, both of these elements ofconsideration are considered variable consideration which requires us to make estimates of when co-development billings become due or when achievementof a particular milestone becomes probable. Payments are included in the transaction price when it becomes probable that inclusion would not lead to asignificant revenue reversal. We have recast our consolidated statement of operations and balance sheet from amounts previously reported due to theadoption of the new revenue standards, which resulted in increases in revenue of $5.3 million and $3.6 million for the years ended December 31, 2017 and2016, respectively. The adoption of the new revenue standards resulted in increases in deferred revenue, current, and deferred revenue, net of current, as ofDecember 31, 2017 of $8.7 million and $26.0 million, respectively. The adoption of the new revenue standards also resulted in increases in the accumulateddeficit of $34.7 million, $40.0 million and $43.7 million as of December 31, 2017, 2016 and 2015, respectively. The adoption of the new revenue standardshad no impact to our previously reported consolidated statement of cash flows. Refer to Note 2 to the consolidated financial statements for details.In January 2016, the FASB issued ASU 2016-01, Financial Instruments-Overall (Subtopic 825-10). This guidance requires equity investments that are notaccounted for under the equity method of accounting to be measured at fair value with changes recognized in net income, simplifies the impairmentassessment of certain equity investments, and updates certain presentation and disclosure requirements. This guidance was effective for the annual reportingperiod beginning after December 15, 2017 and interim periods within those annual periods. We adopted this guidance as of January 1, 2018 using themodified retrospective approach, which resulted in a cumulative-effect adjustment of $1.3 million as a decrease in accumulated deficit on January 1, 2018,and an increase in accumulated other comprehensive loss. The adoption of this guidance had no impact to our consolidated statement of cash flows for theyear ended December 31, 2018. Refer to Note 2 to the consolidated financial statements for details.In May 2017, the FASB issued ASU 2017-09, Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting. This guidance providesguidance about which changes to the terms or conditions of a stock-based payment award require an entity to apply modification accounting in Topic 718.This guidance was effective for annual reporting period beginning after December 15, 2017, including interim periods. We adopted this guidance as ofJanuary 1, 2018, and the adoption of this guidance had no impact to our consolidated financial statements.124 In October 2016, the FASB issued ASU 2016-16, Intra-Entity Transfers of Assets Other Than Inventory. This guidance requires companies to recognize theincome tax effects of intercompany sales or transfer of assets, other than inventory, in the income statement as income tax expense (or benefit) in the periodthe sale or transfer occurs. The exception to recognizing the income tax effects of intercompany sales or transfer sales or transfer of assets remains in place forintercompany inventory sales and transfers. This guidance was effective for annual reporting period beginning after December 15, 2017, including interimperiods. We adopted this guidance as of January 1, 2018 using the modified retrospective method. The adoption of this guidance did not result in anyrecognition of previously unrecognized deferred charges using a modified retrospective method, thus had no impact to our consolidated financial statements.Recently Issued Accounting Guidance Not Yet AdoptedIn August 2018, the FASB issued ASU 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting forImplementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. This guidance requires capitalizing implementation costsincurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). This guidance should be appliedeither retrospectively or prospectively, and is effective for annual reporting period beginning after December 15, 2019 including interim periods, with earlyadoption permitted. We are currently evaluating the impact on our consolidated financial statements upon the adoption of this guidance.In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements forFair Value Measurement. This guidance amends existing fair value measurement disclosure requirements by adding, changing, or removing certaindisclosures. This guidance is effective for annual reporting period beginning after December 15, 2019 including interim periods, with early adoptionpermitted. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to developLevel 3 fair value measurements, and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interimor annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon theireffective date. We do not anticipate a material impact to our consolidated financial statements upon adoption of this guidance.In June 2018, the FASB issued ASU 2018-07, Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based PaymentAccounting. This guidance expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services fromnonemployees. The guidance also specifies that Topic 718 applies to all share-based payment transactions in which a grantor acquires goods or services to beused or consumed in a grantor’s own operations by issuing share-based payment awards. This guidance is effective for annual reporting period beginningafter December 15, 2018, including interim periods. We will adopt this guidance on January 1, 2019 and do not anticipate a material impact to ourconsolidated financial statements upon adoption.In February 2018, the FASB issued ASU 2018-02, Income Statement - Reporting Comprehensive Income: Reclassification of Certain Tax effects fromAccumulated Other Comprehensive Income. This guidance allows for the reclassification from accumulated other comprehensive income to retained earningsfor the stranded tax effects arising from the change in the reduction of the U.S. federal statutory income tax rate from 35% to 21%. This guidance is effectivefor annual reporting period beginning after December 15, 2018, including interim periods, with early adoption permitted. We will adopt this guidance onJanuary 1, 2019 and anticipate a reclassification of $0.6 million from the accumulated other comprehensive loss to the accumulated deficit upon adoption.In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments(“ASU 2016-13”). This guidance requires that financial assets measured at amortized cost be presented at the net amount expected to be collected. Themeasurement of expected credit losses is based on historical experience, current conditions, and reasonable and supportable forecasts that affect thecollectability. In November 2018, the FASB issued ASU 2018-19, Codification Improvements to Topic 326, Financial Instruments-Credit Losses (“ASU2018-19”), which clarifies certain topics included within ASU 2016-13. ASU 2016-13 and ASU 2018-19 are effective for the annual reporting periodbeginning after December 15, 2019, including interim periods within that reporting period. We are currently evaluating the impact on our consolidatedfinancial statements upon the adoption of this guidance.125 In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) (“ASU 2016-02”). Under this guidance, an entity is required to recognize right-of-useassets and lease liabilities on its balance sheet and disclose key information about leasing arrangements. This guidance offers specific accounting guidancefor a lessee, a lessor and sale and leaseback transactions. Lessees and lessors are required to disclose qualitative and quantitative information about leasingarrangements to enable a user of the financial statements to assess the amount, timing and uncertainty of cash flows arising from leases. In July 2018, theFASB issued ASU 2018-11, Leases (Topic 842): Targeted Improvements (“ASU 2018-11”), which provides entities the option to initially apply ASU 2016-02at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. ASU 2016-02 andASU 2018-11 are effective for the annual reporting period beginning after December 15, 2018, including interim periods within that reporting period. Wewill adopt this guidance as of January 1, 2019 and utilize the modified retrospective transition method through a cumulative-effect adjustment at thebeginning of the first quarter of 2019. Based on the current evaluation, we anticipate a recognition of approximately $47 million to $62 million in right-of-use assets and approximately $57 million to $67 million in lease liabilities, respectively, upon adoption of this guidance, for our operating leases and facilityleases disclosed in Note 8 to our consolidated balance sheets. Accordingly, the related balances as of December 31, 2018 in property and equipment, net, andlong-term portion of lease financing obligations would be removed. We do not anticipate a material impact to our consolidated statement of operations orconsolidated statement of cash flows upon adoption of this guidance.126 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKSWe are exposed to market risk in the ordinary course of our business. Market risk represents the risk of loss that may impact our financial position due toadverse changes in financial market prices and rates. Our market risk exposure is primarily a result of fluctuations in foreign currency exchange rates. Thefunctional currency of our FibroGen Europe Oy subsidiary is the local currency. Most of our revenue from collaboration agreements are denominated in U.S.dollars, and therefore our revenue is not currently subject to significant foreign currency risk. Our operating expenses are denominated in the currencies of thecountries in which our operations are located, which are primarily in the United States, China, and Europe. Our consolidated results of operations and cashflows are, therefore, subject to fluctuations due to changes in foreign currency exchange rates and may be adversely affected in the future due to changes inforeign exchange rates.As of December 31, 2018, our financial assets and liabilities denominated in foreign currencies primarily included CNY22.5 million in cash and cashequivalent, and CNY14.4 million, EUR5.9 million and GBP0.6 million in accounts payable and accrued liabilities. These balances are subject to fluctuationin the exchange rate with the U.S. dollar. The effect of a hypothetical 10% change in foreign currency exchange rates would have resulted in a net gain or losson foreign currency of approximately $0.6 million for the year ended December 31, 2018.The primary objective of our investment activities is to preserve our capital to fund our operations. We also seek to maximize income from our cash and cashequivalents without assuming significant risk. To achieve our objectives, we invest our non-operating cash and cash equivalents primarily in U.S.government treasury bills and notes. A portion of our investments is also invested in certificates of deposit and demand deposits with high quality andestablished banking institutions. Given the nature of our investments as of December 31, 2018, we believe that our exposure to interest rate risk is notsignificant. We actively monitor changes in interest rates.To date, we have not entered into any hedging arrangements with respect to foreign currency risk or other derivative financial instruments. 127 ITEM 8. CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA Page FibroGen, Inc. Report of Independent Registered Public Accounting Firm 129 Financial Statements: Consolidated Balance Sheets 131 Consolidated Statements of Operations 132 Consolidated Statements of Comprehensive Loss 133 Consolidated Statements of Changes in Stockholders' Equity 134 Consolidated Statements of Cash Flows 135 Notes to Consolidated Financial Statements 136 Financial Statement Schedule: II Valuation and Qualifying Accounts for each of the three years ended December 31, 2018 166 The supplementary financial information required by this Item 8 is included in Item 7 under the caption “Quarterly Results of Operations”. 128 Report of Independent Registered Public Accounting FirmTo the Board of Directors and Stockholders of FibroGen, Inc.Opinions on the Financial Statements and Internal Control over Financial ReportingWe have audited the accompanying consolidated balance sheets of FibroGen, Inc. and its subsidiaries (the “Company”) as of December 31, 2018 and 2017,and the related consolidated statements of operations, of comprehensive loss, of changes in stockholders’ equity and of cash flows for each of the three yearsin the period ended December 31, 2018, including the related notes and financial statement schedule listed in the accompanying index (collectively referredto as the “consolidated financial statements”). We also have audited the Company's internal control over financial reporting as of December 31, 2018, basedon criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the TreadwayCommission (COSO).In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as ofDecember 31, 2018 and 2017, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2018 inconformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all materialrespects, effective internal control over financial reporting as of December 31, 2018, based on criteria established in Internal Control - Integrated Framework(2013) issued by the COSO.Change in Accounting PrincipleAs discussed in Note 2 to the consolidated financial statements, the Company changed the manner in which it accounts for revenues from contracts withcustomers in 2018.Basis for OpinionsThe Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, andfor its assessment of the effectiveness of internal control over financial reporting, included in Management's Annual Report on Internal Control overFinancial Reporting appearing under Item 9A. Our responsibility is to express opinions on the Company’s consolidated financial statements and on theCompany's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company AccountingOversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities lawsand the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonableassurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internalcontrol over financial reporting was maintained in all material respects. Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financialstatements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis,evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles usedand significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internalcontrol over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weaknessexists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performingsuch other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.129 Definition and Limitations of Internal Control over Financial ReportingA company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal controlover financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairlyreflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are beingmade only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention ortimely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation ofeffectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliancewith the policies or procedures may deteriorate./s/ PricewaterhouseCoopers LLPSan Jose, CaliforniaFebruary 27, 2019We have served as the Company’s auditor since 2000.130 FIBROGEN, INC.CONSOLIDATED BALANCE SHEETS(In thousands, except per share amounts) December 31, 2018 December 31, 2017 (Note 2) Assets Current assets: Cash and cash equivalents $89,258 $673,658 Short-term investments 532,144 62,060 Accounts receivable ($47,210 and $4,004 from a related party) 63,684 8,452 Prepaid expenses and other current assets 4,929 4,800 Total current assets 690,015 748,970 Restricted time deposits 4,145 5,181 Long-term investments 55,820 10,506 Property and equipment, net 127,198 129,476 Other assets 3,420 4,517 Total assets $880,598 $898,650 Liabilities, stockholders’ equity and non-controlling interests Current liabilities: Accounts payable $9,139 $5,509 Accrued liabilities ($444 and $272 to a related party) 66,123 63,781 Deferred revenue 13,771 16,670 Total current liabilities 89,033 85,960 Long-term portion of lease financing obligations 97,157 97,763 Product development obligations 16,798 17,244 Deferred rent 3,038 3,657 Deferred revenue, net of current 136,109 138,241 Other long-term liabilities 9,993 8,047 Total liabilities 352,128 350,912 Commitments and Contingencies Stockholders’ equity: Preferred stock, $0.01 par value; 125,000 shares authorized; no shares issued and outstanding at December 31, 2018 and December 31, 2017 — — Common stock, $0.01 par value; 225,000 shares authorized at December 31, 2018 and December 31, 2017; 85,432 and 82,498 shares issued and outstanding at December 31, 2018 and December 31, 2017 854 825 Additional paid-in capital 1,226,453 1,160,094 Accumulated other comprehensive loss (2,281) (1,795)Accumulated deficit (715,827) (630,657)Total stockholders’ equity 509,199 528,467 Non-controlling interests 19,271 19,271 Total equity 528,470 547,738 Total liabilities, stockholders’ equity and non-controlling interests $880,598 $898,650 The accompanying notes are an integral part of these Consolidated Financial Statements.131 FIBROGEN, INC.CONSOLIDATED STATEMENTS OF OPERATIONS(In thousands, except per share amounts) Years Ended December 31, 2018 2017 2016 (Note 2) (Note 2) Revenue: License revenue (includes $14,323, $0 and $9,548 from a related party) $22,269 $9,933 $50,607 Development and other revenue (includes $20,903, $20,111 and $21,775 from a related party) 125,913 121,063 132,582 Product revenue (includes $64,776, $0, and $0 from a related party) 64,776 — — Total revenue 212,958 130,996 183,189 Operating expenses: Research and development 235,839 196,517 187,206 General and administrative 63,812 51,760 46,025 Total operating expenses 299,651 248,277 233,231 Loss from operations (86,693) (117,281) (50,042) Interest and other, net Interest expense (10,991) (9,706) (10,725)Interest income and other, net 11,568 6,433 2,628 Total interest and other, net 577 (3,273) (8,097) Loss before income taxes (86,116) (120,554) (58,139)Provision for (benefit from) income taxes 304 321 (71)Net loss $(86,420) $(120,875) $(58,068) Net loss per share - basic and diluted $(1.03) $(1.66) $(0.93)Weighted average number of common shares used to calculate net loss per share - basic and diluted 84,062 72,987 62,744 The accompanying notes are an integral part of these Consolidated Financial Statements. 132 FIBROGEN, INC.CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS(In thousands) Years Ended December 31, 2018 2017 2016 (Note 2) (Note 2) Net loss $(86,420) $(120,875) $(58,068)Other comprehensive income (loss): Foreign currency translation adjustments 771 (2,022) 532 Available-for-sale investments: Unrealized gain (loss) on investments, net of tax effect (7) 1,259 140 Reclassification from accumulated other comprehensive loss — (72) 19 Net change in unrealized gain on available-for-sale investments (7) 1,187 159 Other comprehensive income (loss), net of taxes 764 (835) 691 Comprehensive loss $(85,656) $(121,710) $(57,377) The accompanying notes are an integral part of these Consolidated Financial Statements. 133 FIBROGEN, INC.CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY(In thousands, except share data) Common Stock AdditionalPaid-in AccumulatedOtherComprehensive Accumulated NonControlling Shares Amount Capital Loss Deficit Interests Total (Note 2) Balance at December 31, 2015 61,985,079 $620 $586,647 $(1,651) $(451,714) $19,271 $153,173 Net loss (Note 2) — — — — (58,068) — (58,068)Change in unrealized gain or loss on investments — — — 159 — — 159 Foreign currency translation adjustments — — — 532 — — 532 Shares issued from stock plans, net of payroll taxes paid 1,660,759 17 7,124 — — — 7,141 Stock appreciation rights settled 17,855 — — — — — — Stock-based compensation — — 32,132 — — — 32,132 Warrants exercised 1,591 — — — — — — Balance at December 31, 2016 63,665,284 637 625,903 (960) (509,782) 19,271 135,069 Net loss (Note 2) — — — — (120,875) — (120,875)Change in unrealized gain or loss on investments — — — 1,187 — — 1,187 Foreign currency translation adjustments — — — (2,022) — — (2,022)Follow-on Offerings, net of underwriting discounts, commission and issuance costs 14,428,750 144 470,082 — — — 470,226 Shares issued from stock plans, net of payroll taxes paid 4,404,094 44 26,570 — — — 26,614 Stock-based compensation — — 37,539 — — — 37,539 Balance at December 31, 2017 82,498,128 825 1,160,094 (1,795) (630,657) 19,271 547,738 Impact of change in accounting principle upon adoption of ASU 2016-01 (Note 2) — — — (1,250) 1,250 — — Net loss — — — — (86,420) — (86,420)Change in unrealized gain or loss on investments — — — (7) — — (7)Foreign currency translation adjustments — — — 771 — — 771 Adjustment to issuance costs for Follow-on Offerings 11 — — — 11 Shares issued from stock plans, net of payroll taxes paid 2,933,974 29 14,206 — — — 14,235 Stock-based compensation — — 52,142 — — — 52,142 Balance at December 31, 2018 85,432,102 $854 $1,226,453 $(2,281) $(715,827) $19,271 $528,470 The accompanying notes are an integral part of these Consolidated Financial Statements. 134 FIBROGEN, INC.CONSOLIDATED STATEMENTS OF CASH FLOWS(In thousands) Years Ended December 31, 2018 2017 2016 (Note 2) (Note 2) Operating activities Net loss $(86,420) $(120,875) $(58,068)Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Depreciation 6,562 6,099 6,040 Net amortization of premium and discount on investments (42) 1,844 2,729 Unrealized loss on cash equivalents and short-term equity investments 1,120 2 — Loss on disposal of property and equipment 53 3 — Stock-based compensation 52,142 37,539 32,132 Realized foreign currency gain (1,074) — — Tax benefit on unrealized gain on available-for-sale securities — — (211)Realized gain on sales of available-for-sale securities (87) (143) (37)Changes in operating assets and liabilities: Accounts receivable ($(43,206), $98 and $353 from related party) (55,232) 1,996 4,957 Prepaid expenses and other current assets (129) (1,911) 1,099 Other assets 1,090 (2,365) (136)Accounts payable 3,630 (714) (298)Accrued liabilities ($172, $(1,343) and $(430) from related party) 5,606 9,196 2,965 Deferred revenue (5,031) 174 13,225 Lease financing liability 32 1,023 814 Other long-term liabilities 1,636 1,619 1,897 Net cash provided by (used in) operating activities (76,144) (66,513) 7,108 Investing activities Purchases of property and equipment (8,020) (8,500) (1,252)Proceeds from sale of property and equipment 184 5 - Purchases of available-for-sale securities and term deposit (576,880) (169) (9,041)Proceeds from sales of available-for-sale securities 8,167 21,109 4,298 Proceeds from maturities of investments 54,426 57,421 12,617 Net cash provided by (used in) investing activities (522,123) 69,866 6,622 Financing activities Borrowings under capital lease obligations 49 — — Repayments of capital lease obligations (6) — — Repayments of lease liability (403) (403) (403)Proceeds from follow-on offerings, net of underwriting discounts and commission costs — 471,205 — Cash paid for payroll taxes on restricted stock unit releases (15,612) (8,296) (2,740)Proceeds from issuance of common stock 29,847 34,910 9,881 Payments of deferred offering costs — (944) — Net cash provided by financing activities 13,875 496,472 6,738 Effect of exchange rate change on cash and cash equivalents (8) 51 (10)Net increase (decrease) in cash and cash equivalents (584,400) 499,876 20,458 Total cash and cash equivalents at beginning of period 673,658 173,782 153,324 Total cash and cash equivalents at end of period $89,258 $673,658 $173,782 Supplemental cash flow information: Interest payments $218 $255 $295 Balance in accounts payable and accrued liabilities related to purchases of property and equipment 276 3,781 356 Deferred offering costs recorded in accounts payable and accrued liabilities $24 $35 $— The accompanying notes are an integral part of these Consolidated Financial Statements.135 FIBROGEN, INC.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 1.The CompanyFibroGen, Inc. (“FibroGen” or the “Company”) was incorporated in 1993 in Delaware and is a leading biopharmaceutical company discovering anddeveloping a pipeline of first-in-class therapeutics. The Company has applied its pioneering expertise in hypoxia-inducible factor (“HIF”) and connectivetissue growth factor (“CTGF”) biology to develop innovative medicines for the treatment of anemia, fibrotic disease, and cancer. Roxadustat (FG-4592), theCompany’s most advanced product candidate, is an oral small molecule inhibitor of HIF prolyl hydroxylase (“HIF-PH”) activity. Roxadustat has receivedapproval of its New Drug Application (“NDA”) in anemia associated with chronic kidney disease (“CKD”) in dialysis-dependent patients from the NationalMedical Products Administration (“NMPA”) of the People’s Republic of China (“China”). In conjunction with our collaboration partners, we have completedthe Phase 3 trials of roxadustat intended to support an NDA in the United States (“U.S.”) and a Marketing Authorization Application (“MAA”) in theEuropean Union for the treatment of anemia in CKD. In collaboration with its partners AstraZeneca AB (“AstraZeneca”) and Astellas Pharma Inc. (“Astellas”),the Company is in the process of preparing the NDA for submission to the U.S. Food and Drug Administration (“FDA”) and MAAs for submission to theEuropean Medicines Agency this year. 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. The Company is also in Phase 3 clinical development for the treatment of anemia associated withmyelodysplastic syndromes (“MDS”). Pamrevlumab, a human monoclonal antibody that inhibits the activity of CTGF, is advancing towards Phase 3 clinicaldevelopment for the treatment of idiopathic pulmonary fibrosis (“IPF”) and pancreatic cancer, and is currently in a Phase 2 trial for Duchenne musculardystrophy (“DMD”).On April 11, 2017, the Company closed a follow-on offering of its common stock. In this offering, the Company sold 5,228,750 shares of its common stock ata public offering price of $22.95 per share. Net proceeds from this offering were $115.1 million, after deducting underwriting discounts and commissions of$4.9 million. In addition, the offering expenses were approximately $0.6 million in total. On August 24, 2017, the Company completed another follow-onoffering of its common stock. In this offering, the Company sold a total of 9,200,000 shares of its common stock at a public offering price of $40.75 per share.Net proceeds from this offering were $356.2 million, after deducting underwriting discounts and commissions of $18.7 million. In addition, the offeringexpenses were approximately $0.4 million in total. 2.Summary of Significant Accounting PoliciesBasis of PresentationThe consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S.GAAP”). The consolidated financial statements include the accounts of the Company, its wholly owned subsidiaries and its majority-owned subsidiaries,FibroGen Europe and FibroGen China Anemia Holdings, Ltd. (“FibroGen China”). All inter-company transactions and balances have been eliminated inconsolidation.The Company operates in one segment — the discovery, development and commercialization of novel therapeutics to treat serious unmet medical needs.Foreign Currency TranslationThe reporting currency of the Company and its subsidiaries is the United States (“U.S.”) dollar. The functional currency of FibroGen Europe is the Euro. Theassets and liabilities of FibroGen Europe are translated to U.S. dollars at exchange rates in effect at the balance sheet date. All income statement accounts aretranslated at monthly average exchange rates. Resulting foreign currency translation adjustments are recorded directly in accumulated other comprehensiveincome (loss) as a separate component of stockholders’ equity.The functional currency of FibroGen, Inc. and all other subsidiaries is the U.S. dollar. Accordingly, monetary assets and liabilities in the non-functionalcurrency of these subsidiaries are remeasured using exchange rates in effect at the end of the period. Revenues and costs in local currency are remeasuredusing average exchange rates for the period, except for costs related to those balance sheet items that are remeasured using historical exchange rates. Theresulting remeasurement gains and losses are included within interest income and other, net in the consolidated statements of operations as incurred and havenot been material for all periods presented.136 Use of EstimatesThe preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affectthe reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts ofrevenues and expenses during the reporting period. The more significant areas requiring the use of management estimates and assumptions include valuationand recognition of revenue, estimates of accruals related to clinical trial costs, valuation allowances for deferred tax assets, and valuation and recognition ofstock-based compensation. On an ongoing basis, management reviews these estimates and assumptions. Changes in facts and circumstances may alter suchestimates and actual results could differ from those estimates.Concentration of Credit Risk and Other Risks and UncertaintiesThe Company is subject to risks associated with concentration of credit for cash and cash equivalents. A portion of cash on hand is invested in a diversifiedportfolio of investment grade corporate bonds issued by U.S. corporations as rated investment grade corporate bonds. Any remaining cash is deposited withmajor financial institutions in the U.S., Finland, China and the Cayman Islands. At times, such deposits may be in excess of insured limits. The Company hasnot experienced any loss on its deposits of cash and cash equivalents. Included in current assets are significant balances of accounts receivable as follows: December 31, 2018 2017 Astellas Pharma Inc. (“Astellas”)—Related party 74% 47%AstraZeneca AB (“AstraZeneca”) 26% 53% The Company’s future results of operations involve a number of risks and uncertainties. Factors that could affect the Company’s future operating results andcause actual results to vary materially from expectations include, but are not limited to, rapid technological change, the results of clinical trials and theachievement of milestones, market acceptance of the Company’s product candidates, competition from other products and larger companies, protection ofproprietary technology, strategic relationships and dependence on key individuals.Cash, Cash Equivalents and Restricted Time DepositsThe Company considers all highly liquid investments with maturities of three months or less and that are used in the Company’s cash management activitiesat the date of purchase to be cash equivalents. Cash and cash equivalents include money market accounts, various deposit accounts, and money market funds.Restricted time deposits include an irrevocable standby letter of credit as security deposit for a long-term property lease with the Company’s landlord.Restricted time deposits as of December 31, 2018 and 2017 totaled $4.1 million and $5.2 million, respectively. As of December 31, 2018, a total of $21.9million of the Company’s cash and cash equivalents is held outside of the U.S. in the Company’s foreign subsidiaries to be used primarily for the Company’sChina operations.InvestmentsThe Company’s investments consist of available-for-sale debt investments, marketable equity investments, a term deposit and a certificate of deposit. Thoseinvestments with original maturities of greater than three months and remaining maturities of less than 12 months are considered short-term investments.Those investments with maturities greater than 12 months are considered long-term investments. The Company’s investments classified as available-for-saleare recorded at fair value based upon quoted market prices at period end. Unrealized gains and losses for available-for-sale debt investments that are deemedtemporary in nature are recorded in accumulated other comprehensive income (loss) as a separate component of stockholder’ equity. Marketable equitysecurities are equity securities with readily determinable fair value, and are measured and recorded at fair value. Realized and unrealized gains or lossesresulting from changes in value and sale of the Company’s marketable equity investments are recorded in other income (expenses) in the consolidatedstatement of operations.A decline in the fair value of any security below cost that is deemed other than temporary results in a charge to earnings and the corresponding establishmentof a new cost basis for the security. Premiums and discounts are amortized (accreted) over the life of the related security as an adjustment to its yield.Dividend and interest income are recognized when earned. Realized gains and losses are included in earnings and are derived using the specificidentification method for determining the cost of investments sold.Fair Value of Financial InstrumentsCarrying amounts of certain of the Company’s financial instruments including cash equivalents, investments, receivables, accounts payable and accruedliabilities approximate fair value (refer to Note 4).137 Property and EquipmentProperty and equipment (except for costs of construction of certain long-lived assets — refer to Note 8) are recorded at cost and depreciated over theirestimated useful lives using the straight-line method. Computer equipment, laboratory equipment, and furniture and fixtures are depreciated over three to fiveyears. Leasehold improvements are recorded at cost and amortized over the term of the lease or their useful life, whichever is shorter.Impairment of Long-Lived AssetsThe Company continually evaluates whether events or circumstances have occurred that indicate that the estimated remaining useful life of its long-livedassets may warrant revision or that the carrying value of these assets may be impaired. If the Company determines that an impairment trigger has been met, theCompany evaluates the realizability of its long-lived assets based on a comparison of projected undiscounted cash flows from use and eventual dispositionwith the carrying value of the related asset. Any write-downs (which are measured based on the difference between the fair value and the carrying value of theasset) are treated as permanent reductions in the carrying amount of the assets (asset group). Based on this evaluation, the Company believes that, as of eachof the balance sheet dates presented, none of the Company’s long-lived assets were impaired.Revenue RecognitionSubstantially all of the Company’s revenues to date have been generated from its collaboration agreements.The Company’s collaboration agreements include multiple performance obligations comprised of promised services, or bundles of services, that are distinct.Services that are not distinct are combined with other services in the agreement until they form a distinct bundle of services. The Company’s process foridentifying performance obligations and an enumeration of each obligation for each agreement is outlined in Note 3 “Collaboration Agreements.”Determining the performance obligations within a collaboration agreement often involves significant judgment and is specific to the facts and circumstancescontained in each agreement.The Company has identified the following material promises under its collaboration agreements: (1) license of FibroGen technology, (2) the performance ofco-development services, including manufacturing of clinical supplies and other services during the development period, and (3) manufacture of commercialsupply. The evaluation as to whether these promises are distinct, and therefore represent separate performance obligations, is described in more details inNote 3 “Collaboration Agreements.”For revenue recognition purposes, the Company determines that the term of its collaboration agreements begin on the effective date and ends upon thecompletion of all performance obligations contained in the agreements. In each agreement, the contract term is defined as the period in which parties to thecontract have present and enforceable rights and obligations. The Company believes that the existence of what it considers to be substantive terminationpenalties on the part of the counterparty create sufficient incentive for the counterparty to avoid exercising its right to terminate the agreement unless inexceptionally rare situations.The transaction price for each collaboration agreement is determined based on the amount of consideration the Company expects to be entitled for satisfyingall performance obligations within the agreement. The Company’s collaboration agreements include payments to the Company of one or more of thefollowing: non-refundable upfront license fees; co-development billings; development, regulatory, and commercial milestone payments; payments from salesof active pharmaceutical ingredient (“API”); and royalties on net sales of licensed products.Upfront license fees are non-contingent and non-refundable in nature and are included in the transaction price at the point when the license fees become dueto the Company. The Company does not assess whether a contract has a significant financing component if the expectation at contract inception is such thatthe period between payment by the customer and the transfer of the promised goods or services to the customer will be one year or less.Co-development billings resulting from the Company’s research and development efforts, which are reimbursable under its collaboration agreements, areconsidered variable consideration. Determining the reimbursable amount of research and development efforts requires detailed analysis of the terms of thecollaboration agreements and the nature of the research and development efforts incurred. Determining the amount of variable consideration from co-development billings requires the Company to make estimates of future research and development efforts, which involves significant judgment. Co-development billings are allocated entirely to the co-development services performance obligation when amounts are related specifically to research anddevelopment efforts necessary to satisfy the performance obligation, and such an allocation is consistent with the allocation objective.138 Milestone payments are also considered variable consideration, which requires the Company to make estimates of when achievement of a particularmilestone becomes probable. Similar to other forms of variable consideration, milestone payments are included in the transaction price when it becomesprobable that such inclusion would not result in a significant revenue reversal. Milestone payments are therefore included in the transaction price whenachievement of the milestone becomes probable.Product revenue consists of sales of commercial-grade API used in support of pre-commercial validation work. In 2018, the Company recorded revenue fromcommercial-grade API sales to Astellas based on a transaction price that is subject to potential future adjustments. This represents a form of variableconsideration. With respect to these sales in 2018, the transaction price will be adjusted at the time the roxadustat listed price is issued by the JapaneseMinistry of Health, Labour and Welfare to reflect differences between estimated and actual listed price, yield from the manufacture of bulk product tablets,and bulk product manufacturing costs. The Company evaluates the latest available facts and circumstances, including listed prices of comparable drugproducts in Japan and historical bulk drug product manufacturing yields and costs, to determine whether any adjustments to the estimated transaction price isnecessary. As of December 31, 2018, no new facts or circumstances were available to warrant an adjustment to the transaction price.For arrangements that include sales-based royalties and for which the license is deemed to be the predominant item to which the royalties relate, theCompany recognizes revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty hasbeen allocated has been satisfied (or partially satisfied). To date, the Company has not recognized any royalty revenue resulting from its collaborationarrangements.The transaction price is allocated to performance obligations based on their relative standalone selling price (“SSP”), with the exception of co-developmentbillings allocated entirely to co-development services performance obligations. The SSP is determined based on observable prices at which the Companyseparately sells the products and services. If an SSP is not directly observable, then the Company will estimate the SSP considering marketing conditions,entity-specific factors, and information about the customer or class of customer that is reasonably available. The process for determining SSP involvessignificant judgment and includes consideration of multiple factors, including assumptions related to the market opportunity and the time needed tocommercialize a product candidate pursuant to the relevant license, estimated direct expenses and other costs, which include the rates normally charged bycontract research and contract manufacturing organizations for development and manufacturing obligations, and rates that would be charged by qualifiedoutsiders for committee services. Significant judgment may be required in determining whether a performance obligation is distinct, determining the amount of variable consideration to beincluded in the transaction price, and estimating the SSP of each performance obligation. An enumeration of the Company’s significant judgments isoutlined in Note 3 “Collaboration Agreements.”For each performance obligation identified within an arrangement, the Company determines the period over which the promised services are transferred andthe performance obligation is satisfied. Service revenue is recognized over time based on progress toward complete satisfaction of the performanceobligation. The Company uses an input method to measure progress toward the satisfaction of co-development services and certain other related performanceobligations, which is based on costs of labor hours or full time equivalents and out-of-pocket expenses incurred relative to total expected costs to be incurred.The Company believes this measure of progress provides a faithful depiction of the transfer of services because other measures do not measure as accuratelyhow the Company transfers its performance obligations to its collaboration partners.Research and Development ExpensesResearch and development expenses consist of independent research and development costs and the gross amount of costs associated with work performedunder collaboration agreements. Research and development costs include employee-related expenses, expenses incurred under agreements with clinicalresearch organizations (“CROs”), other clinical and preclinical costs and allocated direct and indirect overhead costs, such as facilities costs, informationtechnology costs and other overhead. All research and development costs are expensed as incurred.Clinical Trial AccrualsClinical trial costs are a component of research and development expenses. The Company accrues and expenses clinical trial activities performed by thirdparties based upon actual work completed in accordance with agreements established with clinical research organizations and clinical sites. The Companydetermines the costs to be recorded based upon validation with the external service providers as to the progress or stage of completion of trials or services andthe agreed-upon fee to be paid for such services.139 General and Administrative ExpensesGeneral and administrative expenses consist primarily of employee-related expenses for executive, operational, finance, legal, compliance and humanresource functions. Other general and administrative expenses include facility-related costs and professional fees, accounting and legal services, other outsideservices, recruiting fees and expenses associated with obtaining and maintaining patents.Income TaxesThe Company utilizes the asset and liability method of accounting for income taxes which requires the recognition of deferred tax assets and liabilities forexpected future consequences of temporary differences between the financial reporting and income tax bases of assets and liabilities using enacted tax rates.Management makes estimates, assumptions and judgments to determine the Company’s provision for income taxes and also for deferred tax assets andliabilities, and any valuation allowances recorded against the Company’s deferred tax assets. The Company assesses the likelihood that its deferred tax assetswill be recovered from future taxable income and, to the extent the Company believes that recovery is not likely, the Company must establish a valuationallowance.The calculation of the Company’s current provision for income taxes involves the use of estimates, assumptions and judgments while taking into accountcurrent tax laws, interpretation of current tax laws and possible outcomes of future tax audits. The Company has established reserves to address potentialexposures related to tax positions that could be challenged by tax authorities. Although the Company believes its estimates, assumptions and judgments tobe reasonable, any changes in tax law or its interpretation of tax laws and the resolutions of potential tax audits could significantly impact the amountsprovided for income taxes in the Company’s consolidated financial statements.The calculation of the Company’s deferred tax asset balance involves the use of estimates, assumptions and judgments while taking into account estimates ofthe amounts and type of future taxable income. Actual future operating results and the underlying amount and type of income could differ materially from theCompany’s estimates, assumptions and judgments thereby impacting the Company’s financial position and results of operations.The Company has adopted ASC 740-10, Accounting for Uncertainty in Income Taxes, that prescribes a recognition threshold and measurement attribute forthe financial statement recognition and measurement of uncertain tax positions taken or expected to be taken in the Company’s income tax return, and alsoprovides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition.The Company includes interest and penalties related to unrecognized tax benefits within income tax expense in the Consolidated Statements of Operations.Stock-Based CompensationThe Company maintains equity incentive plans under which incentive and nonqualified stock options are granted to employees and non-employeeconsultants. Compensation expense relating to non-employee stock options has not been material for all the periods presented.The Company measures and recognizes compensation expense for all stock options and restricted stock units (“RSUs”) granted to its employees and directorsbased on the estimated fair value of the award on the grant date. The Company uses the Black-Scholes valuation model to estimate the fair value of stockoption awards. The fair value is recognized as expense, net of estimated forfeitures, over the requisite service period, which is generally the vesting period ofthe respective award, on a straight-line basis. The Company believes that the fair value of stock options granted to non-employees is more reliably measuredthan the fair value of the services received. As such, the fair value of the unvested portion of the options granted to non-employees is re-measured eachperiod. The resulting increase in value, if any, is recognized as expense during the period the related services are rendered on a straight-line basis. Thedetermination of the grant date fair value of options using an option pricing model is affected by the Company’s estimated Common Stock fair value andrequires management to make a number of assumptions including the expected life of the option, the volatility of the underlying stock, the risk-free interestrate and expected dividends.Comprehensive Income (Loss)The Company is required to report all components of comprehensive income (loss), including net loss, in the consolidated financial statements in the periodin which they are recognized. Comprehensive income (loss) is defined as the change in equity during a period from transactions and other events andcircumstances from non-owner sources, including unrealized gains and losses on investments and foreign currency translation adjustments. Comprehensivegains (losses) have been reflected in the consolidated statements of comprehensive income (loss) for all periods presented.140 Recently Issued and Adopted Accounting GuidanceNew Revenue StandardsIn May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts withCustomers (Topic 606) (“ASU 2014-09”), which supersedes the revenue recognition requirements in Accounting Standards Codification (“ASC”) 605,Revenue Recognition. ASU 2014-09 is based on the principle that revenue is recognized to depict the transfer of goods or services to customers in an amountthat reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 also requires additionaldisclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments andchanges in judgments and assets recognized from costs incurred to obtain or fulfill a contract. Subsequently, the FASB has issued the following standardsrelated to ASU 2014-09: ASU No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations; ASU No. 2016-10,Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing; ASU No. 2016-12, Revenue from Contracts withCustomers (Topic 606): Narrow-Scope Improvements and Practical Expedients; and ASU No. 2016-20, Technical Corrections and Improvements to Topic606, Revenue from Contracts with Customers (collectively, the “new revenue standards”).Under ASC 606, the Company recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects theconsideration which the Company expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that theCompany determines are within the scope of ASC 606, the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii)identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations inthe contract; and (v) recognize revenue when (or as) the Company satisfies a performance obligation. The Company only applies the five-step model tocontracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer.At contract inception, once the contract is determined to be within the scope of ASC 606, the Company assesses the goods or services promised within eachcontract and determines those that are performance obligations and assesses whether each promised good or service is distinct. The Company then recognizesas revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied.The Company adopted the new revenue standards as of January 1, 2018 using the full retrospective method, which required the Company to recast the priorreporting periods presented in the consolidated financial statements. The primary impact upon adoption of the new revenue standards relates to the manner inwhich revenue is recognized for co-development billings and milestone payments under the Company’s collaboration arrangements. Under the new revenuestandards, both of these elements of consideration are considered variable consideration which requires the Company to make estimates of when co-development billings become due or when achievement of a particular milestone becomes probable. Payments are included in the transaction price when itbecomes probable that inclusion would not lead to a significant revenue reversal.The Company has recast its consolidated statement of operations and balance sheet from amounts previously reported due to the adoption of the new revenuestandards. The adoption of the new revenue standards had no impact to the Company’s previously reported consolidated statement of cash flows.141 Select line items from the Company’s consolidated statement of operations and balance sheet, which reflect the adoption of the new revenue standards are asfollows (in thousands): Year Ended December 31, 2017 Year Ended December 31, 2016 As PreviouslyReported New RevenueStandardsAdjustment As Recast As PreviouslyReported New RevenueStandardsAdjustment As Recast Statement of Operations License revenue $96,056 $(86,123) $9,933 $137,352 $(86,745) $50,607 Development and other revenue 29,612 91,451 121,063 42,225 90,357 132,582 Total revenue 125,668 5,328 130,996 179,577 3,612 183,189 Net loss (126,203) 5,328 (120,875) (61,680) 3,612 (58,068)Net loss per share - basic and diluted $(1.73) $0.07 $(1.66) $(0.98) $0.05 $(0.93) December 31, 2017 As PreviouslyReported New RevenueStandardsAdjustment As Recast Balance Sheet Deferred revenue, current $7,968 $8,702 $16,670 Deferred revenue, net of current 112,231 26,010 138,241 Accumulated deficit (595,945) (34,712) (630,657)The adoption of the new revenue standards also resulted in the following changes in the accumulated deficit as of December 31, 2016 and 2015: As PreviouslyReported New RevenueStandards Adjustment As Recast Accumulated Deficit As of December 31, 2016 $(469,742) $(40,040) $(509,782)As of December 31, 2015 $(408,062) $(43,652) $(451,714)ASU 2016-01In January 2016, the FASB issued ASU 2016-01, Financial Instruments-Overall (Subtopic 825-10). This guidance requires equity investments that are notaccounted for under the equity method of accounting to be measured at fair value with changes recognized in net income, simplifies the impairmentassessment of certain equity investments, and updates certain presentation and disclosure requirements. This guidance was effective for the annual reportingperiod beginning after December 15, 2017 and interim periods within those annual periods. The Company adopted this guidance as of January 1, 2018 usingthe modified retrospective approach. The impacts to the Company’s accumulated other comprehensive loss and accumulated deficit upon adoption of thisguidance are as follows (in thousands): AccumulatedOtherComprehensive Loss Accumulated Deficit Balance at December 31, 2017 $(1,795) $(630,657)*Impact of change in accounting principle upon adoption of ASU 2016-01 (1,250) 1,250 Opening balance as of January 1, 2018 $(3,045) $(629,407) *Recast to reflect the adoption of the new revenue standards. See above.The adoption of this guidance had no impact to the Company’s consolidated statement of cash flows for the year ended December 31, 2018.142 ASU 2017-09In May 2017, the FASB issued ASU 2017-09, Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting. This guidance providesguidance about which changes to the terms or conditions of a stock-based payment award require an entity to apply modification accounting in Topic 718.This guidance was effective for annual reporting period beginning after December 15, 2017, including interim periods. The Company adopted this guidanceas of January 1, 2018, and the adoption of this guidance had no impact to the Company’s consolidated financial statements.ASU 2016-16In October 2016, the FASB issued ASU 2016-16, Intra-Entity Transfers of Assets Other Than Inventory. This guidance requires companies to recognize theincome tax effects of intercompany sales or transfer of assets, other than inventory, in the income statement as income tax expense (or benefit) in the periodthe sale or transfer occurs. The exception to recognizing the income tax effects of intercompany sales or transfer sales or transfer of assets remains in place forintercompany inventory sales and transfers. This guidance was effective for annual reporting period beginning after December 15, 2017, including interimperiods. The Company adopted this guidance as of January 1, 2018 using the modified retrospective method. The adoption of this guidance did not result inany recognition of previously unrecognized deferred charges using a modified retrospective method, thus had no impact to the Company’s consolidatedfinancial statements.Recently Issued Accounting Guidance Not Yet AdoptedIn August 2018, the FASB issued ASU 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting forImplementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. This guidance requires capitalizing implementation costsincurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). This guidance should be appliedeither retrospectively or prospectively, and is effective for annual reporting period beginning after December 15, 2019 including interim periods, with earlyadoption permitted. The Company is currently evaluating the impact on its consolidated financial statements upon the adoption of this guidance.In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements forFair Value Measurement. This guidance amends existing fair value measurement disclosure requirements by adding, changing, or removing certaindisclosures. This guidance is effective for annual reporting period beginning after December 15, 2019 including interim periods, with early adoptionpermitted. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to developLevel 3 fair value measurements, and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interimor annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon theireffective date. The Company does not anticipate a material impact to its consolidated financial statements upon adoption of this guidance.In June 2018, the FASB issued ASU 2018-07, Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based PaymentAccounting. This guidance expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services fromnonemployees. The guidance also specifies that Topic 718 applies to all share-based payment transactions in which a grantor acquires goods or services to beused or consumed in a grantor’s own operations by issuing share-based payment awards. This guidance is effective for annual reporting period beginningafter December 15, 2018, including interim periods. The Company will adopt this guidance on January 1, 2019 and does not anticipate a material impact toits consolidated financial statements upon adoption.In February 2018, the FASB issued ASU 2018-02, Income Statement - Reporting Comprehensive Income: Reclassification of Certain Tax effects fromAccumulated Other Comprehensive Income. This guidance allows for the reclassification from accumulated other comprehensive income to retained earningsfor the stranded tax effects arising from the change in the reduction of the United States (“U.S.”) federal statutory income tax rate from 35% to 21%. Thisguidance is effective for annual reporting period beginning after December 15, 2018, including interim periods, with early adoption permitted. The Companywill adopt this guidance on January 1, 2019 and anticipate a reclassification of $0.6 million from its accumulated other comprehensive loss to itsaccumulated deficit upon adoption.143 In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments(“ASU 2016-13”). This guidance requires that financial assets measured at amortized cost be presented at the net amount expected to be collected. Themeasurement of expected credit losses is based on historical experience, current conditions, and reasonable and supportable forecasts that affect thecollectability. In November 2018, the FASB issued ASU 2018-19, Codification Improvements to Topic 326, Financial Instruments-Credit Losses (“ASU2018-19”), which clarifies certain topics included within ASU 2016-13. ASU 2016-13 and ASU 2018-19 are effective for the annual reporting periodbeginning after December 15, 2019, including interim periods within that reporting period. The Company is currently evaluating the impact on itsconsolidated financial statements upon the adoption of this guidance.In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) (“ASU 2016-02”). Under this guidance, an entity is required to recognize right-of-useassets and lease liabilities on its balance sheet and disclose key information about leasing arrangements. This guidance offers specific accounting guidancefor a lessee, a lessor and sale and leaseback transactions. Lessees and lessors are required to disclose qualitative and quantitative information about leasingarrangements to enable a user of the financial statements to assess the amount, timing and uncertainty of cash flows arising from leases. In July 2018, theFASB issued ASU 2018-11, Leases (Topic 842): Targeted Improvements (“ASU 2018-11”), which provides entities the option to initially apply ASU 2016-02at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. ASU 2016-02 andASU 2018-11 are effective for the annual reporting period beginning after December 15, 2018, including interim periods within that reporting period. TheCompany will adopt this guidance as of January 1, 2019 and utilize the modified retrospective transition method through a cumulative-effect adjustment atthe beginning of the first quarter of 2019. Based on the current evaluation, the Company anticipates a recognition of approximately $47 million to $62million in right-of-use assets and approximately $57 million to $67 million in lease liabilities, respectively, upon adoption of this guidance, for its operatingleases and facility leases disclosed in Note 8 to its consolidated balance sheets. Accordingly, the related balances as of December 31, 2018 in property andequipment, net, and long-term portion of lease financing obligations would be removed. The Company does not anticipate a material impact to itsconsolidated statement of operations or consolidated statement of cash flows upon adoption of this guidance.3.Collaboration AgreementsAstellas AgreementsJapan AgreementIn June 2005, the Company entered into a collaboration agreement with Astellas Pharma Inc. (“Astellas”) for the development and commercialization (butnot manufacture) of roxadustat for the treatment of anemia in Japan (“Japan Agreement”). Under this agreement, Astellas paid license fees and otherconsideration totaling $40.1 million (such amounts were fully received as of February 2009). The Japan Agreement also provides for additional developmentand regulatory approval milestone payments up to $117.5 million, a commercial sales related milestone of $15.0 million and additional consideration basedon net sales (as defined) in the low 20% range after commercial launch. During the second quarter of 2018, Astellas reported positive results from the final phase 3 CKD-dialysis trial of roxadustat in Japan, indicating that Astellaswas ready to make an NDA submission for the treatment of anemia with roxadustat in CKD-dialysis patients in 2018. The Company evaluated the regulatorymilestone payment associated with NDA submission in Japan based on variable consideration requirements under the current revenue standards andconcluded that this milestone became probable of being achieved in the second quarter of 2018. Accordingly, the consideration of $15.0 million associatedwith this milestone was included in the transaction price and allocated to performance obligations under the Japan Agreement in the second quarter of 2018,substantially all of which was recognized as revenue during the year ended December 31, 2018 from performance obligations satisfied or partially satisfied.On November 30, 2018, FibroGen and Astellas entered into an amendment to the Japan Agreement that will allow Astellas to manufacture roxadustat drugproduct for commercialization in Japan (the “Japan Amendment”). Under this amendment, FibroGen would continue to manufacture and deliver to Astellasroxadustat API. The commercial terms of the Japan Agreement relating to the transfer price for roxadustat for commercial use remain substantially the same,reflecting an adjustment for the manufacture of drug product by Astellas rather than FibroGen. This amendment obligates Astellas to purchase API from theCompany, of which $20.9 million was delivered to Astellas in the second quarter of 2018 under a material transfer agreement to conduct commercial scalemanufacturing validation for roxadustat drug product in anticipation of commercial launch in Japan. The remaining $43.9 million of API was delivered toAstellas in December 2018.144 Europe AgreementIn April 2006, the Company entered into a separate collaboration agreement with Astellas for the development and commercialization of roxadustat for thetreatment of anemia in Europe, the Middle East, the Commonwealth of Independent States and South Africa (“Europe Agreement”). Under the terms of theEurope Agreement, Astellas paid license fees and other upfront consideration totaling $320.0 million (such amounts were fully received as of February 2009).The Europe Agreement also provides for additional development and regulatory approval milestone payments up to $425.0 million. Under the EuropeAgreement, Astellas committed to fund 50% of joint development costs for Europe and North America, and all territory-specific costs. The Europe Agreementalso provides for tiered payments based on net sales of product (as defined) in the low 20% range.In the fourth quarter of 2018, the Company’s was engaged in the final stages of review with its partners over the proposed development of roxadustat for thetreatment of chemotherapy induced anemia (“CIA”). AstraZeneca and Astellas approved the program in December 2018 and January 2019, respectively.Costs associated with the development of this indication are expected to be shared 50-50 between the Company’s two partners. For revenue recognitionpurposes, the Company concluded that this new indication represents a modification to the Europe agreements and will be accounted for separately, meaningthe development costs associated with the new indications are distinct from the original development costs. The development service period for roxadustatfor the treatment of CIA under the Europe Agreement is estimated to continue through the end of 2023 to allow for development of this indication.AstraZeneca AgreementsU.S./Rest of World AgreementEffective July 30, 2013, the Company entered into a collaboration agreement with AstraZeneca for the development and commercialization of roxadustat forthe treatment of anemia in the U.S. and all other countries in the world, other than China, not previously licensed under the Astellas Europe and AstellasJapan Agreements (“U.S./RoW Agreement”). It also excludes China, which is covered by a separate agreement with AstraZeneca described below. Under theterms of the U.S./RoW Agreement, AstraZeneca has agreed to pay upfront, non-contingent and time-based payments totaling $374.0 million, which werefully received in various amounts through June 2016. In addition, the U.S./RoW Agreement also provides for development and regulatory approval basedmilestone payments of up to $550.0 million, which include potential future indications which the companies choose to pursue, and commercial relatedmilestone payments of up to $325.0 million. Under the U.S./RoW Agreement, the Company and AstraZeneca will share equally in the development costs of roxadustat not already paid for by Astellas, upto a total of $233.0 million (i.e. the Company’s share of development costs is $116.5 million, which was reached in 2015). Development costs incurred byFibroGen during the development period in excess of the $233.0 million (aggregated spend) are fully reimbursed by AstraZeneca. AstraZeneca will pay theCompany tiered royalty payments on AstraZeneca’s future net sales (as defined in the agreement) of roxadustat in the low 20% range. In addition, theCompany will receive a transfer price for delivery of commercial product based on a percentage of AstraZeneca’s net sales (as defined in the agreement) in thelow- to mid-single digit range.China AgreementEffective July 30, 2013, the Company (through its subsidiaries affiliated with China) entered into a collaboration agreement with AstraZeneca for thedevelopment and commercialization (but not manufacture) of roxadustat for the treatment of anemia in China (“China Agreement”). Under the terms of theChina Agreement, AstraZeneca agreed to pay upfront consideration totaling $28.2 million, which were fully received in 2014. In addition, the ChinaAgreement provides for AstraZeneca to pay regulatory approval and other approval related milestones of up to $161.0 million. The China Agreement alsoprovides for sales related milestone payments of up to $167.5 million and contingent payments of $20.0 million related to possible future compounds. TheChina Agreement is structured as a 50/50 profit or loss share (as defined) and provides for joint development costs (including capital and equipment costs forconstruction of the manufacturing plant in China), to be shared equally during the development.In September 2016, AstraZeneca approved the protocol related to the development of roxadustat for the treatment of anemia in patients with myelodysplasticsyndrome (“MDS”), for which the Company has received approval from then the China Food and Drug Administration (“CFDA,” now known as the NationalMedicine Products Administration (“NMPA”)) for its clinical trial application for a Phase 2/3 trial and acceptance of its Investigational New DrugApplication from the U.S. Food and Drug Administration for a Phase 3 trial. As a result, for revenue recognition purposes, during the third quarter of 2016, theCompany extended the estimated joint development service period for the AstraZeneca agreements from the end of 2018 to the end of 2020, to allow fordevelopment of MDS.145 As mentioned above, in the fourth quarter of 2018, the Company was engaged in the final stages of review with its partners over the proposed development ofroxadustat for the treatment of CIA. AstraZeneca and Astellas approved the program in December 2018 and January 2019, respectively. Costs associated withthe development of this indication are expected to be shared 50-50 between the Company’s two partners. In addition to CIA, in December 2018, anemia ofchronic inflammation (“ACI”) and multiple myeloma (“MM”) have been approved for development by AstraZeneca and is expected to be fully funded bythem. For revenue recognition purposes, the Company concluded that the addition of these new indications represents a modification to the collaborationagreements and will be accounted for separately, meaning the development costs associated with the new indications are distinct from the originaldevelopment costs. The development service period for roxadustat for the treatment of CIA, ACI and MM under the AstraZeneca agreements is estimated tocontinue through the end of 2024, to allow for development of these additional indications.In October 2017, then the CFDA (now known as the NMPA) accepted the Company’s recently submitted New Drug Application (“NDA”) for registration ofroxadustat for anemia in dialysis-dependent CKD and non-dialysis-dependent CKD (NDD-CKD) patients. This NDA submission triggered a $15.0 millionmilestone payment to the Company by AstraZeneca, which became probable of being achieved during the third quarter of 2017, and therefore partiallyrecognized as revenue under the new revenue standards during 2017.On December 17, 2018, FibroGen (China) Medical Technology Development Co., Ltd. (“FibroGen China”), received marketing authorization from theNMPA for roxadustat, a first-in-class hypoxia-inducible factor prolyl hydroxylase inhibitor, for the treatment of anemia caused by CKD in patients ondialysis. This approval triggered a $6.0 million milestone payable to the Company by AstraZeneca. On December 29, 2018, FibroGen China received FirstManufacturing Approval for a Product in the Field in the Territory , which allows production for Phase IV clinical studies, patients’ early experienceprograms, donation programs, as well as to supply products for testing and assessments required prior to launch. This approval triggered a $6.0 millionmilestone payable to the Company by AstraZeneca. Approximately $9.9 million of the total $12.0 million milestone payables was recognized as revenueduring the fourth quarter of 2018 from performance obligations satisfied or partially satisfied.Accounting for the Astellas AgreementsFor each of the Astellas agreements, the Company has evaluated the promised services within the respective arrangements and has identified performanceobligations representing those services and bundles of services that are distinct.Promised services that were not distinct have been combined with other promised services to form a distinct bundle of promised services, with revenue beingrecognized on the bundle of services rather than the individual services. There are no right-of-return provisions for the delivered items in the Astellasagreements.As of December 31, 2018, the transaction price for the Japan Agreement included $40.1 million of non-contingent upfront payments, $37.5 million ofvariable consideration related to payments for milestones considered probable of being achieved, and $12.1 million of variable consideration related to co-development billings. The transaction price for the Europe Agreement included $320.0 million of non-contingent upfront payments, $90.0 million ofvariable consideration related to payments for milestones considered probable of being achieved, and $180.9 million of variable consideration related to co-development billings.For revenue recognition purposes, the Company determined that the term of each collaboration agreement with Astellas begins on the effective date and endsupon the completion of all performance obligations contained in the agreement. The contract term is defined as the period in which parties to the contracthave present and enforceable rights and obligations. The Company believes that the requirement to continue funding development for a substantive periodof time and loss of product rights, along with non-refundable upfront payments already remitted by Astellas, create significant disincentive for Astellas toexercise its right to terminate the agreements.For the Astellas agreements, the Company allocated the transaction price to the various performance obligations based on the relative SSP of eachperformance obligation, with the exception of co-development billings allocated entirely to co-development services performance obligations.146 For the technology license under the Japan Agreement and Europe Agreement, SSP was determined primarily by using the discounted cash flow (“DCF”)method, which aggregates the present value of future cash flows to determine the valuation as of the effective date of each of the agreements. The DCFmethod involves the following key steps: 1) the determination of cash flow forecasts and 2) the selection of a range of comparative risk-adjusted discountrates to apply against the cash flow forecasts. The discount rates selected were based on expectations of the total rate of return, the rate at which capital wouldbe attracted to the Company and the level of risk inherent within the Company. The discounts applied in the DCF analysis ranged from 17.5% to 20.0%. TheCompany’s cash flow forecasts were derived from probability-adjusted revenue and expense projections by territory. Such projections included considerationof taxes and cash flow adjustments. The probability adjustments were made after considering the likelihood of technical success at various stages of clinicaltrials and regulatory approval phases. SSP also considered certain future royalty payments associated with commercial performance of the Company’scompounds, transfer prices and expected gross margins.The promised services that were analyzed, along with their general timing of satisfaction and recognition as revenue, are as follows:(1)License to the Company’s technology existing at the effective date of the agreements. For both of the Astellas agreements, the license was delivered atthe beginning of the agreement term. In both cases, the Company concluded at the time of the agreement that its collaboration partner, Astellas, wouldhave the knowledge and capabilities to fully exploit the licenses without the Company’s further involvement. However, the Japan Agreement hascontractual limitations that might affect Astellas’ ability to fully exploit the license and therefore, potentially, the conclusion as to whether the licenseis capable of being distinct. In the Japan Agreement, Astellas does not have the right to manufacture commercial supplies of the drug. In order todetermine whether this characteristic of the agreement should lead to a conclusion that the license was not distinct in the context of the agreement, theCompany considered the ability of Astellas to benefit from the license together with other resources readily available to Astellas. Finally, the Companyconsidered the fact that at the time of delivery of the license, the development services were beyond the preclinical development phase and anyremaining development work in either agreement would not be expected to result in any significant modification or customization to the licensedtechnology. As such, the development services are separately identifiable from the licensed technology, indicating that the license is a distinctperformance obligation.Manufacturing rights. In the case of the Japan Agreement, the Company retained manufacturing rights largely because of the way the parties chose forFibroGen to be compensated under the agreement. At the time the agreement was signed, the Company believed that it was more advantageous uponcommercialization to have a transfer price revenue model in place as opposed to a traditional sales-based model. The manufacturing process does notrequire specialized knowledge or expertise uniquely held by FibroGen, and notwithstanding contractual restrictions, Astellas could employmanufacturing services from readily available third parties in order to benefit from the license. Therefore, along with the foregoing paragraph, theCompany determined that the license in Japan is a distinct performance obligation despite the retention of manufacturing rights by the Company.In summary, the Company concludes that item (1) represents a performance obligation. The portion of the transaction price allocated to thisperformance obligation based on a relative SSP basis is recognized as revenue in its entirety at the point in time the license transfers to Astellas.(2)Co-development services (Europe Agreement). This promise relates to co-development services that were reasonably expected to be performed by theCompany at the time the collaboration agreement was signed and is considered distinct. Co-development billings are allocated entirely to the co-development services performance obligation as amounts are related specifically to research and development efforts necessary to satisfy theperformance obligation, and such an allocation is consistent with the allocation objective. Revenue is recognized over time based on progress towardcomplete satisfaction of the performance obligation. The Company uses an input method to measure progress toward the satisfaction of theperformance obligation, which is based on costs of labor hours and out-of-pocket expenses incurred relative to total expected costs to be incurred. Themeasure of progress is updated each reporting period. Co-development services are expected to continue over the development period that is currentlyestimated to continue through the end of 2019. In addition, the Company concluded that the new indication related to CIA approved in January 2019represents a modification to the Europe agreements at that time and will be accounted for separately, for which the development service period isestimated to continue through the end of 2023. There was no provision for co-development services in the Japan Agreement.(3)License to the Company’s technology developed during the term of the agreement and development (referred to as “when and if available”) andinformation sharing services. These promises are generally satisfied throughout the term of the agreements.(4)Manufacturing of clinical supplies of products. This promise is satisfied as supplies for clinical product are delivered for use in the Company’s clinicaltrial programs during the development period, or pre-commercialization period.147 (5)Committee service. This promise is satisfied throughout the course of the agreements as meetings are attended.Items (3)-(5) are bundled into a single performance obligation which is distinct given the fact that all are highly interrelated during the developmentperiod (pre-commercial phase of development) such that satisfying them independently is not practicable. Revenue is recognized over time based onprogress toward complete satisfaction of the performance obligation. The Company uses an input method to measure progress toward the satisfactionof the performance obligation, which is based on costs of labor hours or full time equivalents and out-of-pocket expenses incurred relative to totalexpected costs to be incurred. The measure of progress is updated each reporting period.(6)Manufacturing commercial supplies of products. This promised service is distinct as services are not interrelated with any of the other performanceobligations. Payments received for commercial supplies of products represent sales-based payments related predominately to the license of intellectualproperty under both Astellas agreements. Revenue is recognized as supplies are shipped for commercial use during the commercialization period. Todate, no such revenue has been recognized.In 2018, the Company recorded revenue from commercial-grade API sales to Astellas to conduct commercial scale manufacturing validation based on atransaction price that is subject to potential future adjustments. This represents a form of variable consideration. The Company evaluates the latestavailable facts and circumstances to determine whether any adjustments to the estimated transaction price is necessary. As of December 31, 2018, nonew facts or circumstances were available to warrant an adjustment to the transaction price.Accounting for the AstraZeneca AgreementsThe Company evaluated whether the U.S./RoW Agreement and China Agreement should be accounted for as a single or separate arrangements and concludedthat the agreements should be accounted for as a single arrangement with the presumption that two or more agreements executed with a single customer at oraround the same time should be presumed to be a single arrangement. The key points the Company considered in reaching this conclusion are as follows:1.While the two agreements were largely negotiated separately, those negotiations proceeded concurrently, and were intended to be completedcontemporaneously, presuming AstraZeneca decided to proceed with licenses in all regions available.2.Throughout negotiations for both agreements, the Company and the counterparties understood and considered the possibility that one arrangement maybe executed without the execution of the other arrangement. However, the preference for the Company and the counterparties during the negotiationswas to execute both arrangements concurrently. 3.The two agreements were executed as separate agreements because different development, regulatory and commercial approaches required certain termsof the agreements to be structured differently, rather than because the Company or the counterparties considered the agreements to be fundamentallyseparate negotiations.Accordingly, as the agreements are being accounted for as a single arrangement, upfront and other non-contingent consideration received and to be receivedhas been and will be pooled together and allocated to each of the performance obligations in both the U.S./RoW Agreement and China Agreement based ontheir relative SSPs.For each of the AstraZeneca agreements, the Company has evaluated the promised services within the respective arrangements and has identified performanceobligations representing those services and bundled services that are distinct.Promised services that were not distinct have been combined with other promised services to form a distinct bundle of promised services, with revenue beingrecognized on the bundle of services rather than the individual promised services. There are no right-of-return provisions for the delivered items in theAstraZeneca agreements.As of December 31, 2018, the transaction price for the U.S./RoW Agreement and China Agreement included $402.2 million of non-contingent upfrontpayments, $42.0 million of variable consideration related to payments for milestones considered probable of being achieved, and $621.6 million of variableconsideration related to co-development billings.For the AstraZeneca agreements, the Company allocated the transaction price to the various performance obligations based on the relative SSP of eachperformance obligation, with the exception of co-development billings. Co-development billings under the U.S./RoW Agreement were allocated entirely tothe U.S./RoW co-development services performance obligation, and co-development billings under the China Agreement were allocated entirely to thecombined performance obligation under the China Agreement.148 For revenue recognition purposes, the Company determined that the term of its collaboration agreements with AstraZeneca begin on the effective date andends upon the completion of all performance obligations contained in the agreements. The contract term is defined as the period in which parties to thecontract have present and enforceable rights and obligations. The Company believes that the requirement to continue funding development for a substantiveperiod of time and the loss of product rights, along with non-refundable upfront payments already remitted by AstraZeneca, represent substantive terminationpenalties that create significant disincentive for AstraZeneca to exercise its right to terminate the agreement.For the technology license under the AstraZeneca U.S./RoW Agreement, SSP was determined based on a two-step process. The first step involved determiningan implied royalty rate that would result in the net present value of future cash flows to equal to zero (i.e. where the implied royalty rate on the transactionwould equal the target return for the investment). This results in an upper bound estimation of the magnitude of royalties that a hypothetical acquirer wouldreasonably pay for the forecasted cash flow stream. The Company’s cash flow forecasts were derived from probability-adjusted revenue and expenseprojections. Such projections included consideration of taxes and cash flow adjustments. The probability adjustments were made after considering thelikelihood of technical success at various stages of clinical trials and regulatory approval phases. The second step involved applying the implied royalty rate,which was determined to be 40%, against the probability-adjusted projected net revenues by territory and determining the value of the license as the netpresent value of future cash flows after adjusting for taxes. The discount rate utilized was 17.5%.U.S./RoW Agreement:The promised services that were analyzed, along with their general timing of satisfaction and recognition as revenue, are as follows:(1)License to the Company’s technology existing at the effective date of the agreements. For the U.S./RoW Agreement, the license was delivered at thebeginning of the agreement term. The Company concluded that AstraZeneca has the knowledge and capabilities to fully exploit the license under theU.S./RoW Agreement without the Company’s further involvement. Finally, the Company considered the fact that at the time of delivery of the license,the development services were beyond the preclinical development phase and any remaining development work would not be expected to result inany significant modification or customization to the licensed technology. As such, the development services are separately identifiable from thelicensed technology, indicating that the license is a distinct performance obligation. Therefore, the Company has concluded that the license is distinctand represents a performance obligation. The portion of the transaction price allocated to this performance obligation based on a relative SSP basis isrecognized as revenue in its entirety at the point in time the license transfers to AstraZeneca.(2)Co-development services. This promise relates to co-development services that were reasonably expected to be performed by the Company at the timethe collaboration agreement was signed and is distinct. Co-development billings are allocated entirely to the co-development services performanceobligation as amounts are related specifically to research and development efforts necessary to satisfy the performance obligation, and such anallocation is consistent with the allocation objective. Revenue is recognized over time based on progress toward complete satisfaction of theperformance obligation. The Company uses an input method to measure progress toward the satisfaction of the performance obligation, which is basedon costs of labor hours or full time equivalents and out-of-pocket expenses incurred relative to total expected costs to be incurred. Co-developmentservices are expected to continue over the development period that is currently estimated to continue through the end of 2020. In addition, theCompany concluded that the addition of the new indications related to CIA, ACI and MM approved during the fourth quarter of 2018 represents amodification to the collaboration agreements and will be accounted for separately, for which the joint development service period is estimated tocontinue through the end of 2024.(3)Manufacturing of clinical supplies of products. This promise is satisfied as supplies for clinical product are delivered for use in the Company’s clinicaltrial programs during the development period, or pre-commercialization period.(4)Information sharing and committee service. These promises are satisfied throughout the course of the agreement as services are provided.Items (3)-(4) are bundled into a single performance obligation which is distinct given the fact that all are highly interrelated during the developmentperiod (pre-commercial phase of development) such that delivering them independently is not practicable. Revenue is recognized over time based onprogress toward complete satisfaction of the performance obligation. The Company uses an input method to measure progress toward the satisfactionof the performance obligation, which is based on costs of labor hours or full time equivalents and out-of-pocket expenses incurred relative to totalexpected costs to be incurred. The measure of progress is updated each reporting period.149 (5)Manufacturing commercial supplies of products. This promise is distinct as services are not interrelated with any of the other performance obligations.Payments received for commercial supplies of products represent sales-based royalties related predominately to the license of intellectual propertyunder the agreement. Revenue is recognized as supplies are shipped for commercial use during the commercialization period. To date, no such revenuehas been recognized.China Agreement:The performance obligation that were analyzed, along with their general timing of satisfaction and recognition as revenue, are as follows:•License to the Company’s technology existing at the effective date of the agreement. The license was delivered at the beginning of the agreementterm. However, the China Agreement with AstraZeneca has contractual limitations that might affect AstraZeneca’s ability to fully exploit the licenseand therefore, potentially, the conclusion as to whether the license is distinct in the context of the agreement. In the China Agreement, AstraZenecadoes not have the right to manufacture commercial supplies of the drug. In order to determine whether this characteristic of the arrangement shouldlead to a conclusion that the license was not distinct in the context of the agreement, the Company considered the ability of AstraZeneca to benefitfrom the license on its own or together with other resources readily available to AstraZeneca.For the China Agreement, the Company retained manufacturing rights as an essential part of a strategy to pursue domestic regulatory pathway for productapproval which requires the regulatory licensure of the manufacturing facility in order to commence commercial shipment. The prospects for thecollaboration as a whole would have been substantially different had manufacturing rights been provided to AstraZeneca. Due to certain regulatoryrestrictions in China, manufacturing services of commercial drug product in China are not readily available to AstraZeneca or any other parties. Therefore,AstraZeneca cannot benefit from the license on its own or together with other readily available resources. Accordingly, all the promises identified, includingco-development services, under the China Agreement have been bundled into a single performance obligation and amounts of the transaction price allocableto this performance obligation are deferred until control of the manufactured commercial drug product has begun to transfer to AstraZeneca. Uponcommencement of the transfer of control to commercial drug product, revenue would be recognized in a pattern consistent with estimated deliveries of thecommercial drug product.Summary of revenue recognized under the collaboration agreementsThe table below summarizes the accounting treatment for the various performance obligations pursuant to each of the Astellas and AstraZeneca agreements.License amounts identified below are included in the “License revenue” line item in the consolidated statements of operations. All other elements identifiedbelow are included in the “Development and other revenue” line item in the consolidated statements of operations.Amounts recognized as revenue under the Japan Agreement were as follows (in thousands): Years Ended December 31, Agreement Performance Obligation 2018 2017 * 2016 * Japan License revenue $14,323 $— $9,548 Development revenue $2,400 $1,588 $4,288 *Recast to reflect the adoption of the new revenue standards. See Note 2.The transaction price related to consideration received and accounts receivable has been allocated to each of the following performance obligations underthe Japan Agreement, along with any associated deferred revenue as follows (in thousands): Japan Agreement CumulativeRevenueThroughDecember 31, 2018 DeferredRevenue atDecember 31, 2018 TotalConsiderationThroughDecember 31, 2018 License $74,089 $— $74,089 Development revenue 13,908 286 14,194 Total license and development revenue $87,997 $286 $88,283 150 The revenue recognized under the Japan Agreement for the year ended December 31, 2018 included an increase of $14.9 million resulting from changes toestimated variable consideration in the current year relating to performance obligations satisfied or partially satisfied in previous periods. The remainder ofthe transaction price related to the Japan Agreement includes $1.4 million of variable consideration from estimated future co-development billing and isexpected to be recognized over the remaining development service period.Amounts recognized as revenue under the Europe Agreement were as follows (in thousands): Years Ended December 31, Agreement Performance Obligation 2018 2017 * 2016 * Europe License revenue $— $— $— Development revenue $18,503 $18,523 $17,487 *Recast to reflect the adoption of the new revenue standards. See Note 2.The transaction price related to consideration received and accounts receivable has been allocated to each of the following performance obligations underthe Europe Agreement, along with any associated deferred revenue as follows (in thousands):Europe Agreement CumulativeRevenueThroughDecember 31, 2018 DeferredRevenue atDecember 31, 2018 TotalConsiderationThroughDecember 31, 2018 License $370,481 $— $370,481 Development revenue 202,836 3,225 206,061 Total license and development revenue $573,317 $3,225 $576,542 The revenue recognized under the Europe Agreement for the year ended December 31, 2018 included an increase in revenue of $0.6 million, resulting fromchanges to estimated variable consideration in the current year relating to performance obligations satisfied or partially satisfied in previous periods. Theremainder of the transaction price related to the Europe Agreement includes $14.3 million of variable consideration from estimated future co-developmentbilling and is expected to be recognized over the remaining development service period.Amounts recognized as revenue under the U.S./RoW and China Agreements were as follows (in thousands): Years Ended December 31, Agreement Performance Obligation 2018 2017 * 2016 * U.S. / RoWand China License revenue $7,946 $9,933 $41,059 Development revenue $104,970 $100,928 $110,677 China performance obligation $— $— $— *Recast to reflect the adoption of the new revenue standards. See Note 2.The transaction price related to consideration received and accounts receivable has been allocated to each of the following performance obligations underthe U.S./RoW Agreement and China Agreement, along with any associated deferred revenue as follows (in thousands): U.S. / RoW and China Agreements CumulativeRevenueThroughDecember 31, 2018 DeferredRevenue atDecember 31, 2018 TotalConsiderationThroughDecember 31, 2018 License $294,163 $— $294,163 Co-development, information sharing & committee services 408,637 20,521 429,158 China performance obligation — 125,848 125,848 Total license and development revenue $702,800 $146,369 $849,169 151 The revenue recognized under the U.S./RoW Agreement and China Agreement for the year ended December 31, 2018 included an increase in revenue of$20.2 million resulting from changes to estimated variable consideration in the current year relating to performance obligations satisfied or partially satisfiedin previous periods. The remainder of the transaction price related to the U.S./RoW Agreement and China Agreement includes $197.4 million of variableconsideration from estimated future co-development billing and is expected to be recognized over the remaining development service period, except foramounts allocated to the China performance obligation, which are expected to be recognized in a pattern consistent with estimated deliveries of thecommercial drug product.Product RevenueAs described above, the Japan Amendment obligates Astellas to purchase API from the Company to conduct commercial scale manufacturing validation forroxadustat drug product in anticipation of commercial launch in Japan. The Company fulfilled all the delivery obligations under the term of the JapanAmendment during the year ended December 31, 2018, and recognized the related product revenue of $64.8 million in the same period.Other RevenuesOther revenues consist primarily of collagen material sold for research purposes. Other revenues were immaterial for each of the three years endedDecember 31, 2018.Deferred RevenueDeferred revenue represents amounts billed to the Company’s collaboration partners for which the related revenues have not been recognized because one ormore of the revenue recognition criteria have not been met. The current portion of deferred revenue represents the amount to be recognized within one yearfrom the balance sheet date based on the estimated performance period of the underlying performance obligations. The long term portion of deferred revenuerepresents amounts to be recognized after one year through the end of the non-contingent performance period of the underlying performance obligations. Thelong term portion of deferred revenue also includes amounts allocated to the China unit of accounting under the AstraZeneca arrangement as revenuerecognition associated with this unit of accounting is tied to the commercial launch of the products within China, which is not expected to occur within thenext year. 4.Fair Value MeasurementsIn accordance with the authoritative guidance on fair value measurements and disclosures under U.S. GAAP, the Company presents all financial assets andliabilities and any other assets and liabilities that are recognized or disclosed at fair value on a nonrecurring basis. The guidance defines fair value,establishes a framework for measuring fair value in generally accepted accounting principles and expands disclosures about fair-value measurements. Theguidance also requires fair value measurements be classified and disclosed in one of the following three categories:Level 1: Quoted prices in active markets for identical assets or liabilities.Level 2: Observable inputs other than quoted prices in active markets for identical assets or liabilities.Level 3: Unobservable inputs.The Company values certain assets and liabilities, focusing on the inputs used to measure fair value, particularly in instances where the measurement usessignificant unobservable (Level 3) inputs. The Company’s financial instruments are valued using quoted prices in active markets (Level 1) or based uponother observable inputs (Level 2). The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requiresmanagement to make judgments and considers factors specific to the asset or liability. In addition, the categories presented do not suggest how prices may beaffected by the size of the purchases or sales, particularly with the largest highly liquid financial issuers who are in markets continuously with non-equityinstruments, or how any such financial assets may be impacted by other factors such as U.S. government guarantees. Assets and liabilities measured at fairvalue are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.152 The fair values of the Company’s financial assets that are measured on a recurring basis are as follows (in thousands): December 31, 2018 Level 1 Level 2 Level 3 Total US treasury notes and bills $292,317 $224,953 $— $517,270 Bond and mutual funds 10,484 — — 10,484 Equity investments 234 — — 234 Money market funds 541 — — 541 Term deposit — 80,000 — 80,000 Certificate of deposit — 29,910 — 29,910 Total $303,576 $334,863 $— $638,439 December 31, 2017 Level 1 Level 2 Level 3 Total Corporate bonds $— $53,943 $— $53,943 Bond and mutual funds 18,402 — — 18,402 Equity investments 221 — — 221 Money market funds 569,942 — — 569,942 Total $588,565 $53,943 $— $642,508 The Company’s Level 2 investments are valued using third-party pricing sources. The pricing services utilize industry standard valuation models, includingboth income and market-based approaches, for which all significant inputs are observable, either directly or indirectly, to estimate fair value. These inputsinclude reported trades of and broker/dealer quotes on the same or similar investments, issuer credit spreads, benchmark investments, prepayment/defaultprojections based on historical data and other observable inputs.The fair values of the Company’s financial liabilities that are carried at historical cost are as follows (in thousands): December 31, 2018 Level 1 Level 2 Level 3 Total Lease financing obligations $— $— $98,105 $98,105 December 31, 2017 Level 1 Level 2 Level 3 Total Lease financing obligations $— $— $98,476 $98,476 The fair value of the Company’s financial liabilities were derived by using an income approach, which required Level 3 inputs such as discounted estimatedfuture cash flows.There were no transfers of assets or liabilities between levels for the years ended December 31, 2018, 2017 and 2016.5.Balance Sheet ComponentsCash and Cash EquivalentsCash and cash equivalents consisted of the following (in thousands): December 31, 2018 2017 Cash $38,783 $103,716 US treasury notes and bills 49,934 — Money market funds 541 569,942 Total cash and cash equivalents $89,258 $673,658 153 Property and EquipmentProperty and equipment consisted of the following (in thousands): December 31, 2018 2017 Leasehold improvements $101,200 $93,758 Building shell (Refer to Note 8) 53,880 53,879 Laboratory equipment 16,405 19,497 Machinery 8,382 — Computer equipment 6,473 6,006 Furniture and fixtures 5,690 5,575 Construction in progress 367 10,402 Total property and equipment $192,397 $189,117 Less: accumulated depreciation (65,199) (59,641)Property and equipment, net $127,198 $129,476Depreciation expense for the years ended December 31, 2018, 2017 and 2016 was $6.6 million, $6.1 million, and $6.0 million, respectively.InvestmentsThe Company’s investments consist of available-for-sale debt investments, marketable equity investments, term deposit and certificate of deposit. Theamortized cost, gross unrealized holding gains or losses, and fair value of the Company’s investments by major investments type are summarized in the tablesbelow (in thousands): December 31, 2018 Amortized Cost Gross UnrealizedHolding Gains Gross UnrealizedHolding Losses Fair Value US treasury notes and bills $467,296 $109 $(69) $467,336 Term deposit 80,000 — — 80,000 Certificates of deposit 30,000 — (90) 29,910 Bond and mutual funds 10,464 20 — 10,484 Equity investments 125 109 — 234 Total investments $587,885 $238 $(159) $587,964 December 31, 2017 Amortized Cost Gross UnrealizedHolding Gains Gross UnrealizedHolding Losses Fair Value Corporate bonds $53,985 $4 $(46) $53,943 Bond and mutual funds 17,249 1,153 — 18,402 Equity investments 126 95 — 221 Total investments $71,360 $1,252 $(46) $72,566 The contractual maturities of the available-for-sale investments and term deposit were as follows (in thousands): December 31, 2018 Within one year $532,144 After one year through four years 45,102 Total debt investments 577,246 Bond and mutual funds 10,484 Equity investments 234 Total investments $587,964 154 The Company periodically reviews its available-for-sale investments and term deposit for other-than-temporary impairment. The Company considers factorssuch as the duration, severity and the reason for the decline in value, the potential recovery period and its intent to sell. For debt securities, the Company alsoconsiders whether (i) it is more likely than not that the Company will be required to sell the debt securities before recovery of their amortized cost basis, and(ii) the amortized cost basis cannot be recovered as a result of credit losses. During the three years ended December 31, 2018, the Company did not recognizeany other-than-temporary impairment loss.Accrued LiabilitiesAccrued liabilities consisted of the following (in thousands): December 31, 2018 2017 Preclinical and clinical trial accruals $35,413 $32,321 Payroll and related accruals 21,430 18,810 Property taxes and other 1,095 4,201 Professional services 2,648 1,991 Other 5,537 6,458 Total accrued liabilities $66,123 $63,781 6.Product Development ObligationsThe Technology Development Center of the Republic of Finland (“TEKES”) product development obligations consist of 11 separate advances (each in theform of a note agreement) received by FibroGen Europe between 1996 and 2008 from TEKES. These advances are granted on a project by project basis tofund various product development efforts undertaken by FibroGen Europe only. Each separate note bears interest (not compounded) calculated as onepercentage point less than the Bank of Finland rate in effect at the time of the note, but no less than 3.0%.If the research work funded by TEKES does not result in an economically profitable business or does not meet its technological objectives, TEKES may, onapplication from FibroGen Europe, forgive each of these loans, including accrued interest, either in full or in part. As of December 31, 2018 and 2017, theCompany had $10.8 million and $11.3 million of principal outstanding, respectively, and $6.0 million and $5.9 million of interest accrued, respectively,which were presented in the product development obligations line on the consolidated balance sheets.The Company is not a guarantor of these loans, and these loans are not repayable by FibroGen Europe until it has distributable funds.7.Convertible Note PayableIn January 2013, FibroGen China entered into a $0.6 million convertible promissory note. The note bears simple interest at a rate of two percent (2.00%) perannum, accrued on an annual basis in arrears. The outstanding principal balance and unpaid accrued interest on the note is due and payable upon the earlierof (a) the effectiveness of the initial public offering of FibroGen China or (b) the eight year anniversary of the date of the note. The total outstanding principalbalance and unpaid accrued interest on the note will be converted into Series A Preferred Stock of FibroGen China at the option of the lender or by theCompany at its discretion. As of December 31, 2018 and 2017, the total outstanding principal balance and accrued interest were $0.7 million and $0.6million, respectively, and recorded in the other long-term liabilities in the consolidated balance sheets. 155 8.Commitments and ContingenciesOperating LeasesFuture minimum lease payments under all non-cancelable operating lease obligations as of December 31, 2018 are as follows (in thousands): Year Ending Operating Leases 2019 $444 2020 232 2021 25 2022 16 2023 — Total minimum payments $717 Facility Lease Financing ObligationsFibroGen, Inc.In September 2006, the Company entered into a long-term property lease with Shorenstein Properties LLC (“Alexandria” or “landlord”) providing theCompany with 234,249 square feet of space for an initial term of 15 years. Upon signing, a stand-by letter of credit was established in the amount of $7.3million which has been included in restricted time deposits. Starting the fourth quarter of 2016, on an annual basis, 1/8th of this letter of credit was released.As a result, the restriction of a $1.0 million was removed, and the amount was reclassified from restricted time deposits to short-term investment during thefourth quarter of each year since 2016. The agreement included an expansion option to occupy part of an adjacent building within 31 months of the leasecommencement date of November 20, 2008. In June 2012, the Company gave notice to its landlord that it would not exercise this expansion option, whichresulted in a $5.0 million payment liability to the landlord which is being financed over the remaining lease term of its lease.In connection with this lease, the Company was responsible for approximately 60% of the construction costs for the tenant improvements. The Company isdeemed, for accounting purposes only, to be the accounting owner of the entire project including the building shell, even though it is not the legal owner.The balance of the tenant improvements were paid by Alexandria in the form of a tenant improvement allowance of $140.50 per square foot of rentable space,or $32.5 million.In connection with the Company’s accounting for this transaction, the Company capitalized Alexandria’s costs of constructing the building shell whichtotaled $50.8 million, and recognized a corresponding lease financing obligation. The Company also recognized, as an additional lease financing obligation,the reimbursements totaling $32.5 million from landlord for tenant improvements since these reimbursements are also deemed to be a financing obligation.A portion of the monthly lease payment is allocated to land rent and recorded as an operating lease expense and the non-interest portion of the amortizedlease payments to the landlord related to rent of the building is applied to the lease financing liability.FibroGen ChinaIn February 2013, the Company entered into a long-term property lease with Beijing Economic-Technological Development Area (“BDA”) ManagementCommittee for a pilot plant located in Beijing Yizhuang Biomedical Park (“BYBP”) of BDA. The leased space is 4,820 square meters over an eight (8) yearterm starting February 1, 2013.In connection with this lease, the Company was responsible for approximately 100% of the construction costs for the tenant improvements. The Company isdeemed, for accounting purposes only, to be the accounting owner of the entire project, including the building shell, even though it is not the legal owner.In connection with the Company’s accounting for this transaction, the Company capitalized BDA Management Committee’s costs of constructing thebuilding shell which totaled $3.1 million, and recognized a corresponding lease financing obligation. The Company also recognized, as an additional leasefinancing obligation, the reimbursements totaling $0.5 million from BYBP for a rent subsidy since this reimbursement is also deemed to be a financingobligation.A portion of the monthly lease payment is allocated to land rent and recorded as an operating lease expense and the non-interest portion of the amortizedlease payments to the landlord related to rent of the building is applied to the lease financing liability.156 Future minimum lease payments, on a consolidated basis, under the Company’s facility lease financing obligations as of December 31, 2018 are as follows(in thousands): Year Ending Lease financingobligations 2019 $14,379 2020 14,664 2021 14,179 2022 14,335 2023 12,872 Total minimum payments $70,429 Apart from the property leases with Alexandria and BDA Management Committee, rent expense for leased facilities under operating lease commitments was$3.1 million, $3.0 million, and $2.8 million for the years ended December 31, 2018, 2017 and 2016, respectively. The Company received sublease income of$3.5 million, $3.9 million, and $3.8 million for the years ended December 31, 2018, 2017 and 2016, respectively, which were recorded as a reduction ofresearch and development expenses and general and administrative expenses for the respective periods.Indemnification AgreementsThe Company enters into standard indemnification arrangements in the ordinary course of business, including for example, service, manufacturing andcollaboration agreements. Pursuant to these arrangements, the Company indemnifies, holds harmless, and agrees to reimburse the indemnified parties forlosses suffered or incurred by the indemnified party, including in connection with intellectual property infringement claims by any third party with respect toits technology. The term of these indemnification agreements is generally perpetual any time after the execution of the agreement. The maximum potentialamount of future payments the Company could be required to make under these arrangements is not determinable. The Company has never incurred costs todefend lawsuits or settle claims related to these indemnification agreements. As a result, the Company believes the estimated fair value of these arrangementsis minimal.The Company has entered into indemnification agreements with its directors and officers that may require the Company to indemnify its directors andofficers against liabilities that may arise by reason of their status or service as directors or officers to the extent permissible under applicable law.9.Equity and Stock-based CompensationSubsidiary Stock and Non-Controlling InterestsFibroGen EuropeAs of December 31, 2018 and 2017, respectively, FibroGen Europe had a total of 42,619,022 shares of Preferred Stock outstanding, of which there were1,700,845 shares of Series A Preferred Stock, 1,875,000 shares of Series B Preferred Stock, 1,599,503 shares of Series C Preferred Stock, 1,520,141 shares ofSeries D Preferred Stock, 459,565 shares of Series E Preferred Stock, 5,714,332 shares of Series F Preferred Stock, 9,927,500 shares of Series G Preferred Stockand 19,822,136 shares of Series H Preferred Stock, all of which shares no longer have any right to be exchanged for FibroGen, Inc. Common Stock.The holders of FibroGen Europe’s shares of Preferred Stock (“Preferred Shares”) have the following rights, preferences and privileges:Dividend Rights — When the assets of FibroGen Europe are distributed (except for distribution in a liquidation), Preferred Shares shall have the samerights to dividend or other forms of distribution as shares of Common Stock of FibroGen Europe. In the event of a merger, holders of Preferred Sharesdo not have the right to demand FibroGen Europe to redeem all or part of their Preferred Shares. FibroGen Europe may repurchase shares of CommonStock or Preferred Shares for consideration.Pre-emptive Right — Preferred Shares shall have pre-emptive subscription right in accordance with the Finnish Limited Liability Companies Act ifadditional shares are issued, option rights are given, or convertible loan is taken, provided, however, that the foregoing pre-emptive right does notapply to a directed share issue, for which two thirds (2/3) of the voting shares represented at a general meeting of shareholders approve for animportant legitimate cause.Redemption Right — If a Preferred Share can be redeemed by a majority shareholder owning more than ninety percent (90%) of the shares of FibroGenEurope in accordance with the provisions of the Finnish Limited Liability Companies Act, the minority holders of Preferred Shares have the right torequest redemption of their shares.157 Voting Right — Each share has one vote. Preferred Shares have voting rights only in situations that are specifically provided in the Articles ofAssociation, which include a merger transaction and directed share issue. In addition, Preferred Shares have right to vote in a general shareholdermeeting for amending the Articles of Association if the amendment will affect the rights of Preferred Shares.Conversion Right (1-for-1 basis into Common Stock of FibroGen Europe): •Voluntary conversion right: Preferred Shares can be converted into common shares upon the written request of a shareholder provided that theconversion is feasible within the maximum and minimum amounts of shares of classes of FibroGen Europe as set forth in its Articles ofAssociation. Such request can be withdrawn before the notification of conversion is filed with the Finnish Trade Register. •Compulsory conversion right: Preferred Shares will be converted into common shares if (i) FibroGen Europe’s shares are listed in a stockexchange or other trading system in the European Economic Area, or (ii) FibroGen Europe’s recombinant collagen and gelatin productiontechnology is being put into commercial use in the area of EU and certain other European states. Commercial use means there is incomegenerated from the first commercial sale of the products incorporating the above mentioned technology and does not include license fees,development financing, milestone payments or income from test products or equipment used in research. The board of directors of FibroGenEurope shall notify the shareholders of the compulsory conversion in writing, and the shareholders shall request to convert their shares withinthe timeframe provided in the notification. Should the shareholders fail to make the conversion request within the time limit, FibroGen Europemay redeem the shares of such shareholders.Liquidation Right — In the event of a dissolution of FibroGen Europe, holders of Preferred Shares are entitled to be paid in an amount equal to thesubscription price of the shares before any distribution is made to holders of common shares. Among holders of Preferred Shares, holders of shares ofSeries F Preferred Stock are entitled to be paid in an amount equal to the subscription price of Series F Preferred Stock before any distribution is madeto holders of other Preferred Shares.FibroGen ChinaFibroGen China had 6,758,000 Series A Preference Shares outstanding as of December 31, 2018 and 2017, respectively. The holders of the FibroGen ChinaSeries A Preference Shares have the following rights, preferences and privileges:Liquidation — In the event of liquidation, dissolution, or winding up of the Company, either voluntary or involuntary, including by means of amerger, the holders of FibroGen China Series A Preference Shares are entitled to be paid an amount equal to the product of the number of shares heldby a holder of shares of FibroGen China Series A Preference Shares and the original issue price of $1.00 (subject to equitable adjustment for any stockdividend, combination, split, reclassification, recapitalization) plus all declared and unpaid dividends thereon.Conversion — Each share of FibroGen China Series A Preference Shares is convertible into the number of fully paid and non-assessable shares ofCommon Stock of FibroGen China that results from dividing the original issue price by the conversion price in effect at the time of the conversion,subject to adjustments for stock splits, stock dividends, reclassifications and like events. The FibroGen China Series A Preference Shares have aconversion price that is equal to the original issuance price such that the conversion ratio to FibroGen China Common Stock is 1:1 as of all periodspresented.Voting — The holders of FibroGen China Series A Preference Shares are entitled to vote together with the FibroGen China Common Stock holders onall matters submitted for a vote of the stockholders. The holder of each share of FibroGen China Series A Preference Shares has the number of votesequal to the number of shares of FibroGen China Common Stock into which it is convertible.Dividends — The holders of FibroGen China Series A Preference Shares are entitled to receive cash dividends when and if declared, at a rate of 6%.Non-Controlling InterestsNon-controlling interest positions related to the issuance of subsidiary stock as described above are reported as a separate component of consolidated equityfrom the equity attributable to the Company’s stockholders at December 31, 2018 and 2017. In addition, the Company does not allocate losses to the non-controlling interests as the outstanding shares representing the non-controlling interest do not represent a residual equity interest in the subsidiary. Upon theinitial public offering and as described above, all eligible FibroGen Europe preferred shares were exchanged for 958,996 shares of FibroGen Common Stock.No other FibroGen Europe shares have the right to be exchanged for FibroGen, Inc. Common Stock.158 Common StockEach share of Common Stock is entitled to one vote. The holders of Common Stock are also entitled to receive dividends whenever funds are legallyavailable and when declared by the board of directors, subject to the prior rights of holders of all classes of stock outstanding.Shares of Common Stock outstanding, shares of stock plans outstanding and shares reserved for future issuance related to stock options and RSUs grant andthe Company’s Employee Stock Purchase Plan (“ESPP”) purchases are as follows (in thousands): December 31, 2018 2017 Common stock outstanding 85,432 82,498 Stock options outstanding 10,430 11,550 RSUs outstanding 1,428 1,562 Common stock warrants outstanding 4 4 Shares reserved for future stock options and RSUs grant 6,041 4,190 Shares reserved for future ESPP offering 2,618 2,024 Total shares of common stock reserved 105,953 101,828 Stock PlansStock Option and RSU PlansUnder the Company’s Amended and Restated 2005 Stock Plan (“2005 Stock Plan”), the Company may issue shares of Common Stock and options topurchase Common Stock and other forms of equity incentives to employees, directors and consultants. Options granted under the 2005 Stock Plan may beincentive stock options or nonqualified stock options. Incentive stock options (“ISO”) may be granted only to employees and officers of the Company.Nonqualified stock options (“NSO”) and stock purchase rights may be granted to employees, directors and consultants. The board of directors has theauthority to determine to whom options will be granted, the number of options, the term and the exercise price. Options are to be granted at an exercise pricenot less than fair market value for an ISO or an NSO. Options generally vest over four years. Options expire no more than 10 years after date of grant. Upon theeffective date of the registration statement related to the Company’s initial public offering, the 2005 Plan was amended to cease the grant of any additionalawards thereunder, although the Company will continue to issue common stock upon the exercise of previously granted stock options under the 2005 Plan.In September 2014, the Company adopted a 2014 Equity Incentive Plan (the “2014 Plan”) which became effective on November 13, 2014. The 2014 Plan isthe successor equity compensation plan to the 2005 Plan. The 2014 Plan will terminate on November 12, 2024. The 2014 Plan provides for the grant ofincentive stock options, nonqualified stock options, restricted stock awards, stock appreciation rights, performance stock awards, performance cash awards,restricted stock units and other stock awards to employees, directors and consultants. Stock options granted must be at prices not less than 100% of the fairmarket value at date of grant. Option vesting schedules are determined by the Company at the time of issuance and generally have a four year vestingschedule (25% vesting on the first anniversary of the vesting base date and quarterly thereafter over the next 3 years). Options generally expire ten years fromthe date of grant unless the optionee is a 10% stockholder, in which case the term will be five years from the date of grant. Unvested options exercised aresubject to the Company’s repurchase right. Shares reserved for issuance increases on January 1 of each year commencing on January 1, 2016 and ending onJanuary 1, 2024 by the lesser of (i) the amount equal to 4% of the number of shares issued and outstanding on December 31 immediately prior to the date ofincrease or (ii) such lower number of shares as may be determined by the board of directors. As of December 31, 2018, the Company has reserved 6,040,725shares of its common stock that remains unissued for issuance under the 2014 Plan.Issuance of shares upon share option exercise or share unit conversion is made through issuance of new shares authorized under the plan.Certain Common Stock option holders have the right to exercise unvested options, subject to a right held by the Company to repurchase the stock, at theoriginal exercise price, in the event of voluntary or involuntary termination of employment of the stockholder. The shares are generally released fromrepurchase provisions ratably over four years. The Company accounts for the cash received in consideration for the early exercised options as a liability. AtDecember 31, 2018 and 2017, no shares of Common Stock were subject to repurchase by the Company.159 Stock option transactions, including forfeited options granted under the 2014 Plan as well as prior plans, are summarized below: Shares(In thousands) WeightedAverageExercise perShare WeightedAverageRemainingContractualLife(In Years) AggregateIntrinsic Value(In thousands) Outstanding at December 31, 2017 11,550 $14.82 Granted 1,307 53.64 Exercised (2,271) 11.20 Expired (7) 5.82 Forfeited (149) 30.55 Outstanding at December 31, 2018 10,430 20.25 5.47 $281,436 Vested and expected to vest, December 31, 2018 10,430 20.25 5.47 281,436 Exercisable at December 31, 2018 7,644 $13.83 4.47 $248,206The total intrinsic value of options exercised during the years ended December 31, 2018, 2017 and 2016 was $97.5 million, $111.9 million, and $17.9million, respectively.The following table summarizes RSU activity: Shares(In thousands) Fair Value at Grant Unvested at December 31, 2017 1,562 $24.75 Granted 706 53.69 Vested (727) 24.70 Forfeited (113) 35.12 Unvested at December 31, 2018 1,428 $38.26 Among the vested RSUs during the year ended December 31, 2017, 432,472 shares were released and issued, while the remaining was withheld for the relatedpayroll taxes. The estimated weighted-average fair value of the awards granted during the years ended December 31, 2018, 2017 and 2016 was $53.69,$26.59 and $19.37, respectively.ESPPIn September 2014, the Company adopted a 2014 ESPP that became effective on November 13, 2014. The 2014 ESPP is designed to enable eligibleemployees to periodically purchase shares of the Company’s common stock at a discount through payroll deductions of up to 15% of their eligiblecompensation, subject to any plan or IRS limitations. At the end of each offering period, employees are able to purchase shares at 85% of the lower of the fairmarket value of the Company’s common stock on the first trading day of the offering period or on the last day of the offering period. Purchases areaccomplished through participation in discrete offering periods. The 2014 ESPP is intended to qualify as an ESPP under Section 423 of the Internal RevenueCode. The Company has reserved 1,600,000 shares of its common stock for issuance under the 2014 ESPP and shares reserved for issuance increasesJanuary 1 of each year commencing January 1, 2016 by the lesser of (i) a number of shares equal to 1% of the total number of outstanding shares of commonstock on December 31 immediately prior to the date of increase; (ii) 1,200,000 shares or (iii) such number of shares as may be determined by the board ofdirectors. There were 230,317 shares, 250,834 shares and 266,720 shares purchased by employees under the 2014 Purchased Plan for the years endedDecember 31, 2018, 2017 and 2016, respectively.The expected term of 2014 ESPP shares is the average of the remaining purchase periods under each offering period.Stock-Based CompensationStock-based compensation expense allocated to research and development and general and administrative expense for the years ended December 31, 2018,2017 and 2016 was as follows (in thousands): Years Ended December 31, 2018 2017 2016 Research and development $30,491 $21,807 $19,070 General and administrative 21,651 15,732 13,062 Total stock-based compensation expense $52,142 $37,539 $32,132160 The Company estimates the fair value of stock options using the Black-Scholes option valuation model. The fair value of employee stock options is beingamortized on a straight-line basis over the requisite service period of the awards.Prior to the Company’s initial public offering, the Company, in making its determinations of the fair value of its Common Stock, considered a variety ofquantitative and qualitative factors, including (i) net present value of the Company’s projected earnings, (ii) fair market value of the stock of comparablepublicly-traded companies, (iii) any third party transactions involving the Company’s convertible preferred stock, (iv) liquidation preferences of theCompany’s preferred stock and the likelihood of conversion of the preferred stock, (v) changes in the Company’s business operations, financial conditionand results of operations over time, including cash balances and burn-rate, (vi) the status of new product development, and (vii) general financial marketconditions. Subsequent to the IPO, the fair market value of common stock is based on the closing price of the Company’s common stock as reported on theNASDAQ Global Select Market on the date of the grant.The fair value of employee stock options was estimated using the following assumptions:Expected Term. Expressed as a weighted-average, the expected life of the options is based on the average period the stock options are expected to beoutstanding and was based on the Company’s historical information of the option exercise patterns and post-vesting termination behavior as well ascontractual terms of the instruments.Expected Volatility. While the Company considers its historical data regarding the volatility of its Common Stock, the expected volatility is currentlybased upon the historical volatility of comparable public entities. In evaluating comparable companies, the Company considered factors such asindustry, stage of life cycle, size and duration as a public company.Risk-Free Interest Rate. Expressed as a weighted-average, the risk-free interest rate assumption is based on the U.S. Treasury instruments whose termwas consistent with the expected term of the Company’s stock options.Expected Dividend Yield. The Company has never declared or paid any cash dividends and does not plan to pay cash dividends in the foreseeablefuture.The assumptions used to estimate the fair value of stock options granted and ESPPs using the Black-Scholes option valuation model were as follows: Years Ended December 31, 2018 2017 2016 Stock Options Expected term (in years) 5.4 5.7 5.3 Expected volatility 67.9 % 71.5 % 69.9 %Risk-free interest rate 2.7 % 2.2 % 1.4 %Expected dividend yield — — — Weighted average estimated fair value $32.12 $16.96 $11.49 ESPPs Expected term (in years) 0.5 - 2.0 0.5 - 2.0 0.5 - 2.0 Expected volatility 47.3 - 75.3 % 52.8 - 77.2 % 61.9 - 80.7 %Risk-free interest rate 0.8 - 2.9 % 0.5 - 1.6 % 0.2 - 1.0 %Expected dividend yield — — — Weighted average estimated fair value $16.27 $9.41 $9.94 As of December 31, 2018, there was $46.6 million of total unrecognized compensation costs, net of estimated forfeitures, related to non-vested stock optionawards granted that will be recognized on a straight-line basis over the weighted-average period of 2.24 years. As of December 31, 2018, there was $40.9million of total unrecognized compensation costs, net of estimated forfeitures, related to non-vested RSUs granted that will be recognized on a straight-linebasis over the weighted-average period of 2.40 years.161 WarrantsThe following warrants to purchase shares of Common Stock were issued in connection with certain facility and equipment lease financing arrangements andare outstanding at December 31, 2018: Year of Issuance Number of Shares Exercise Price perShare Reason for Issuance Expiration Date2000 4,430 $15.00 Issued in connection withlease agreement Five years after initial public offering or upon merger or saleof the Company’s assets, whichever occurs first 4,430 10.Net Loss Per ShareThe following securities were excluded from the calculation of diluted net loss per share because their effect would have been anti-dilutive for the three yearspresented (in thousands): Years Ended December 31, 2018 2017 2016 Employee stock options 10,430 11,550 13,660 RSUs outstanding 1,428 1,562 1,211 Warrants 4 4 4 11,862 13,116 14,875 11.FibroGen, Inc. 401(k) PlanSubstantially all of the Company’s full-time United States of America-based employees are eligible to make contributions to the Company’s 401(k) Plan.Under this plan, participating employees may defer up to 60% of their pretax salary during the year, but not more than statutory limits. The Company mayelect to match employee contributions. Matching contributions of $2.9 million, $2.5 million and $2.3 million were made during years ended December 31,2018, 2017 and 2016, respectively.12.Income TaxesThe components of loss before income taxes are as follows (in thousands): Years Ended December 31, 2018 2017 * 2016 * Domestic $(38,472) $(80,735) $(25,342)Foreign (47,644) (39,819) (32,797)Loss before provision for income taxes $(86,116) $(120,554) $(58,139) *Recast to reflect the adoption of the new revenue standards. See Note 2.The provision for (benefit from) income taxes consists of the following (in thousands): Years Ended December 31, 2018 2017 2016 Current: Federal $— $— $— State 2 2 2 Foreign 302 319 139 Total current 304 321 141 Deferred: Federal — — (212)State — — — Foreign — — — Total deferred — — (212)Total provision for (benefit from) income taxes $304 $321 $(71)162 The following is the reconciliation between the statutory federal income tax rate and the Company’s effective tax rate: Years Ended December 31, 2018 2017 2016 Tax at statutory federal rate 21.0% 34.0% 34.0%State tax —% —% —%Stock-based compensation expense 14.5% 18.5% (7.9)%Change in deferred tax assets due to rate change —% 43.9% —%Change in valuation allowance due to rate change —% (43.9)% —%Net operating losses not benefitted (23.2)% (43.8)% (12.9)%Foreign net operating losses not benefitted (11.6)% (6.7)% (13.0)%Orphan drug credit 0.0% (2.0)% —%Other (1.1)% (0.3)% (0.1)%Total (0.4)% (0.3)% 0.1%Significant components of the Company’s deferred tax assets are as follows (in thousands): December 31, 2018 2017 Federal and state net operating loss carryforwards $91,683 $71,256 Tax credit carryforwards 45,885 39,488 Foreign net operating loss carryforwards 21,295 15,052 Stock-based compensation 9,281 7,835 Lease obligations 2,511 2,737 Reserves and accruals 6,072 4,851 Deferred revenue 16,454 18,103 Fixed assets 356 — Other 450 420 Subtotal 193,987 159,742 Less: Valuation allowance (193,987) (159,540)Net deferred tax assets — 202 Fixed assets — (181)Other — (21)Net deferred tax liabilities — (202)Total net deferred tax assets $— $—A valuation allowance has been provided to reduce the deferred tax assets to an amount management believes is more likely than not to be realized. Expectedrealization of the deferred tax assets for which a valuation allowance has not been recognized is based on upon the reversal of existing temporary differencesand future taxable income.The valuation allowance increased by $34.4 million, $30.5 million and $12.3 million for the years ended December 31, 2018, 2017 and 2016, respectively.Due to uncertainty surrounding the realization of the favorable tax attributes in the future tax returns, the Company has established a valuation allowanceagainst its otherwise recognizable net deferred tax assets.At December 31, 2018, the Company had net operating loss carryforwards available to offset future taxable income of approximately $400.3 million and$148.1 million for federal and state tax purposes, respectively. These carryforwards will begin to expire in 2026 for federal and 2019 for state purposes, if notutilized before these dates. The Company also had foreign net operating loss carryforwards of approximately $86.3 million which expire between 2019 and2028 if not utilized.At December 31, 2018, the Company had approximately $46.4 million of federal and $26.3 million of California research and development tax credit andother tax credit carryforwards available to offset future taxable income. The federal credits begin to expire in 2019 and the California research credits have noexpiration dates.163 On December 22, 2017, the Tax Cuts and Jobs Act (“Tax Act”) was signed into law making significant changes to the Internal Revenue Code. Changesinclude, but are not limited to, a corporate tax rate decrease from 35% to 21% effective for tax years beginning after December 31, 2017, the transition of U.Sinternational taxation from a worldwide tax system to a territorial system, and a one-time transition tax on the mandatory deemed repatriation of cumulativeforeign earnings as. In the fourth quarter of 2018, the Company completed its analysis to determine the effect of the Tax Act and no material adjustments wererecognized as of December 31, 2018. Developing interpretations of the provisions of the Tax Act, changes to U.S. Treasury regulations, administrativeinterpretations or court decisions interpreting the Tax Act in the future periods may require further adjustments to the Company’s analysis.Due to the adoption of ASU 2016-09 in 2017, the Company recorded a retrospective increase of $19.5 million in the deferred tax assets for previouslyunrecognized excess tax benefits that existed as of December 31, 2016, and a corresponding increase of $19.5 million in the valuation allowance againstthese deferred tax assets. In addition, all excess tax benefits and deficiencies are recognized as income tax expense and will result in increased volatility inthe Company’s income tax.Federal and state tax laws impose substantial restrictions on the utilization of net operating loss and credit carryforwards in the event of an “ownershipchange” for tax purposes, as defined in IRC Section 382. The Company reviewed its stock ownership for year ended December 31, 2018 and concluded noownership changes occurred which would result in a reduction of its net operating loss or in its research and development credits expiring unused. Ifadditional ownership change occurs, the utilization of net operating loss and credit carryforwards could be significantly reduced.Uncertain Tax PositionsThe Company had unrecognized tax benefits of approximately $28.0 million as of December 31, 2018. Approximately $0.5 million of unrecognized taxbenefits, if recognized, would affect the effective tax rate. The interest accrued as of December 31, 2018 and 2017 was immaterial.A reconciliation of the beginning and ending amounts of unrecognized income tax benefits during the three years ended December 31, 2018 is as follows (inthousands): Federal and State Balance as of December 31, 2015 $24,213 Decrease due to prior positions (7,109)Increase due to current year position 2,550 Balance as of December 31, 2016 19,654 Increase due to prior positions 303 Increase due to current year position 5,448 Decrease due to U.S. tax rate change (2,044)Balance as of December 31, 2017 23,361 Increase due to prior positions 379 Increase due to current year position 4,216 Balance as of December 31, 2018 $27,956Unrecognized tax benefits may change during the next twelve months for items that arise in the ordinary course of business. The Company does notanticipate a material change to its unrecognized tax benefits over the next twelve months that would affect the Company’s effective tax rate.The Company classifies interest and penalties as a component of tax expense, if any.The Company files income tax returns in the U.S. federal jurisdiction, U.S. state and other foreign jurisdictions. The U.S. federal and U.S. state taxingauthorities may choose to audit tax returns for tax years beyond the statute of limitation period due to significant tax attribute carryforwards from prior years,making adjustments only to carryforward attributes. The foreign statute of limitation generally remains open from 2009 to 2018. The Company is notcurrently under audit in any tax jurisdiction.164 13.Related Party TransactionsAstellas is an equity investor in the Company and considered a related party. During the years ended December 31, 2018, 2017 and 2016, the Companyrecorded revenue related to collaboration agreements with Astellas of $100.0 million, $20.1 million, and $31.3 million, respectively. The related partyrevenue for the year ended December 31, 2018 included $64.8 million product revenue for API to conduct commercial scale manufacturing validation forroxadustat drug product in anticipation of commercial launch in Japan. See Note 3 and below for details. The related party revenue was recast for each of theyears ended December 31, 2017 and 2016 as a result of adoption of the new revenue standards. See Note 2 for details.During the years ended December 31, 2018, 2017 and 2016, the Company recorded expense related to collaboration agreements with Astellas of$1.5 million, $1.0 million and $6.4 million, respectively.As of December 31, 2018 and 2017, accounts receivable from Astellas were $47.2 million and $4.0 million, respectively, and amounts due to Astellas were$0.4 million and $0.3 million, respectively. The amounts due are included in accrued liabilities on the consolidated balance sheets. The accounts receivablefrom Astellas as of December 31, 2018 included $43.8 million related to the delivery of roxadustat API to Astellas during the fourth quarter of 2018. The saleof API was pursuant to the Japan Amendment allowing Astellas to manufacture roxadustat drug product for commercialization in Japan.14.Segment and Geographic InformationThe Company has determined that the chief executive officer is the chief operating decision maker (“CODM”). The CODM reviews financial informationpresented for the Company’s various clinical trial programs as well as results on a consolidated basis. License revenues and development revenues receivedare not allocated to various programs for purposes of determining a profit measure and resource allocation decisions are made by the CODM based primarilyon consolidated results. As such, the Company has concluded that it operates as one segment. Supplemental enterprise-wide information has been presentedbelow.Geographic RevenuesGeographic revenues, which are based on the bill-to region, are as follows (in thousands): Years Ended December 31, 2018 2017 2016 Europe $112,916 $110,861 $151,736 Japan (related party) 100,002 20,111 31,323 All other 40 24 130 Total revenue $212,958 $130,996 $183,189Geographic Long-Lived AssetsProperty and equipment, net by geographic location are as follows (in thousands): December 31, 2018 2017 United States $103,539 $107,228 China 23,659 22,248 Total property and equipment $127,198 $129,476Customer ConcentrationSubstantially all of the Company’s revenues to date have been generated from the following collaboration partners that respectively accounted for more than10% of the Company’s total revenue and accounts receivable: Percentage of Revenue Percentage of Accounts Receivable Years Ended December 31, December 31, 2018 2017 2016 2018 2017 Astellas—Related party 47% 15% 17% 74% 47%AstraZeneca 53% 85% 83% 26% 53% 165 Schedule II: Valuation and Qualifying Accounts(in thousands) Charged Charged Balance at (Credited) to Other Beginning of to Statement Accounts - Deductions, Balance at Year of Operation Equity Net End of Year Valuation allowances for deferred tax assets Year ended December 31, 2018 $159,540 $34,447 $— $— $193,987 Year ended December 31, 2017 $128,995 $11,039 $19,506 $— $159,540 Year ended December 31, 2016 $116,718 $12,277 $— $— $128,995 166 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURESNone.ITEM 9A. CONTROLS AND PROCEDURESAttached as exhibits 31.1 and 31.2 to this Annual Report on Form 10-K are certifications of our Chief Executive Officer and our Chief Financial Officerrequired by Rule 13a-14(a) and 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the “Rule 13a-14(a) and 15d-15(e)Certifications”). This Controls and Procedures section of the Annual Report on Form 10-K includes the information concerning the controls evaluationreferred to in the Rule 13a-14(a) and 15d-15(e) Certifications.Evaluation of Disclosure Controls and ProceduresOur management, with the participation of our Chief Executive Officer and our Chief Financial Officer, has evaluated the effectiveness of our disclosurecontrols and procedures as of December 31, 2018, the end of the period covered by this Annual Report on Form 10-K. Disclosure controls and procedures (asdefined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) are designed to provide reasonableassurance that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed,summarized and reported, within the time periods specified in the U.S. Securities and Exchange Commission’s rules and forms and that such information isaccumulated and communicated to the company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate to allowtimely decisions regarding required disclosure.Based on management’s evaluation, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedureswere effective as of December 31, 2018 at the reasonable assurance level.Management’s Annual Report on Internal Control over Financial ReportingOur management is responsible for establishing and maintaining adequate internal control over financial reporting as such term is defined in Rule 13a-15(f)of the Exchange Act. Our internal control over financial reporting is a process established under the supervision of and with the participation of ourmanagement, including our Chief Executive Officer and our Chief Financial Officer. Because of its inherent limitations, internal control over financialreporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controlsmay become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.Management, with the participation and under the supervision of our Chief Executive Officer and our Chief Financial Officer, evaluated our internal controlover financial reporting as of December 31, 2018, the end of our fiscal year, using the criteria established in Internal Control - Integrated Framework (2013)set forth by the Committee of Sponsoring Organizations of the Treadway Commission.Based on management’s evaluation of our internal control over financial reporting, management concluded that, our internal control over financial reportingwas effective as of December 31, 2018.The effectiveness of the Company’s internal control over financial reporting as of December 31, 2018 has been audited by PricewaterhouseCoopers LLP, anindependent registered public accounting firm, as stated in their report which appears herein.Changes in Internal Control over Financial ReportingThere was no change in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the most recent fiscal quarter ended December 31, 2018 that materially affected, or is reasonably likely tomaterially affect, our internal control over financial reporting.ITEM 9B. OTHER INFORMATIONNone. 167 PART IIIITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCEThe information required by this item is incorporated by reference to our Proxy Statement for our 2019 Annual Meeting of Stockholders to be filed with theSEC within 120 days after the end of the fiscal year ended December 31, 2018.Code of ConductWe have adopted a Code of Business Conduct which applies to all of our directors, officers and employees. A copy of our Code of Business Conduct can befound on our website (www.FibroGen.com) under “Corporate Governance.” The contents of our website are not a part of this report.In addition, we intend to promptly disclose the nature of any amendment to, or waiver from, our Code of Business Conduct that applies to our principalexecutive officer, principal financial officer, principal accounting officer or persons performing similar functions on our website in the future.ITEM 11. EXECUTIVE COMPENSATIONThe information required by this item is incorporated by reference to our Proxy Statement for our 2019 Annual Meeting of Stockholders to be filed with theSEC within 120 days after the end of the fiscal year ended December 31, 2018.ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERSThe information required by this item is incorporated by reference to our Proxy Statement for our 2019 Annual Meeting of Stockholders to be filed with theSEC within 120 days after the end of the fiscal year ended December 31, 2018.ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCEThe information required by this item is incorporated by reference to our Proxy Statement for our 2019 Annual Meeting of Stockholders to be filed with theSEC within 120 days after the end of the fiscal year ended December 31, 2018.ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICESThe information required by this item is incorporated by reference to our Proxy Statement for our 2019 Annual Meeting of Stockholders to be filed with theSEC within 120 days after the end of the fiscal year ended December 31, 2018. 168 PART IVITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES(a) We have filed the following documents as part of this Annual Report on Form 10-K:1. Consolidated Financial StatementsInformation in response to this Item is included in Part II, Item 8 of this Annual Report on Form 10-K.2. Financial Statement SchedulesSchedule II is included on page 166. All other schedules are omitted because they are not required or the required information is included in theconsolidated financial statements or notes thereto.3. ExhibitsSee Item 15(b) below.(b) Exhibits—We have filed, or incorporated into this Annual Report on Form 10-K by reference, the exhibits listed below. Where an exhibit is incorporatedby reference, the number in parentheses indicates the document to which cross-reference is made. Refer to the end of this table for a listing of cross-referencedocuments. Exhibit Incorporation By ReferenceNumber Exhibit Description Form SEC File No. Exhibit Filing Date 3.1 Amended and Restated Certificate of Incorporation ofFibroGen, Inc. 8-K 001-36740 3.1 11/21/2014 3.2 Amended and Restated Bylaws of FibroGen, Inc. S-1/A 333-199069 3.4 10/23/2014 4.1 Form of Common Stock Certificate. 8-K 001-36740 4.1 11/21/2014 4.2 Investor Rights Agreement by and among FibroGen, Inc. andcertain of its stockholders, dated as of December 1995. S-1 333-199069 4.2 10/1/2014 4.3 Investor Rights Agreement by and among FibroGen, Inc. andcertain of its warrant holders, dated as of February 8, 2000. S-1 333-199069 4.7 10/1/2014 4.4 Warrant to Purchase 11,076 Shares of Common Stock issued toBristow Investments, L.P, dated as of February 8, 2000. S-1 333-199069 4.12 10/1/2014 4.5 Shareholders’ Agreement by and among FibroGen International(Cayman) Limited and certain of its shareholders, dated as ofSeptember 8, 2017. 10-Q 001-36740 4.6 11/8/2017 4.6 Common Stock Purchase Agreement by and between FibroGen,Inc. and AstraZeneca AB, dated as of October 20, 2014. S-1/A 333-199069 4.17 10/24/2014 10.1(i)+ FibroGen, Inc. Amended and Restated 2005 Stock Plan. S-1 333-199069 10.3(i) 10/1/2014 10.1(ii)+ Forms of stock option agreement, restricted stock purchaseagreement and stock appreciation right agreement under theFibroGen, Inc. Amended and Restated 2005 Stock Plan. S-1 333-199069 10.3(ii) 10/1/2014 10.1(iii)+ Form of stock option agreement under the FibroGen, Inc.Amended and Restated 2005 Stock Plan applicable to optionsexchanged pursuant to FibroGen, Inc.’s 2010 amendment andexchange offer. S-1 333-199069 10.3(iii) 10/1/2014169 10.1(iv)+ Form of 2010 amendment to the form of stock option agreementunder the FibroGen, Inc. Amended and Restated 2005 StockPlan applicable to options amended pursuant to FibroGen,Inc.’s 2010 amendment and exchange offer. S-1 333-199069 10.3(iv) 10/1/2014 10.1(v)+ Form of 2013 amendment to the form of stock option agreementunder the FibroGen, Inc. Amended and Restated 2005 StockPlan applicable to options amended or exchanged pursuant toFibroGen, Inc.’s 2010 amendment and exchange offer. S-1 333-199069 10.3(v) 10/1/2014 10.2+ FibroGen, Inc. 2014 Equity Incentive Plan and forms ofagreement thereunder. S-1/A 333-199069 10.4 11/12/2014 10.3+ FibroGen, Inc. 2014 Employee Stock Purchase Plan. S-1/A 333-199069 10.5 11/12/2014 10.4+ FibroGen, Inc. Non-Employee Director Compensation Policy,as amended. 10-Q 10.6 8/7/2018 10.5+ FibroGen, Inc. 2018 Bonus Plan. 8-K 001-36740 10.5 2/16/2018 10.6 Lease Agreement by and between FibroGen, Inc. and X-4Dolphin LLC, dated as of September 22, 2006; as amended byFirst Amendment to Lease by and between FibroGen, Inc. andX-4 Dolphin LLC, dated as of October 10, 2007; as amended bySecond Amendment to Lease by and between FibroGen, Inc.and X-4 Dolphin LLC, dated as of June 29, 2009; as amendedby Third Amendment to Lease by and between FibroGen, Inc.and Are-San Francisco No. 43, LLC (as successor in interest toX-4 Dolphin LLC), dated as of May 19, 2011; as amended byFourth Amendment to Lease by and between FibroGen, Inc. andAre-San Francisco No. 43, LLC, dated as of September 8, 2011. S-1 333-199069 10.8 10/1/2014 10.7 Lease for Premises in Beijing BDA Biomedical Park by andamong Beijing FibroGen Medical Technology DevelopmentCo., Ltd., Beijing Economic and Technology InvestmentDevelopment Parent Company and Beijing BDA InternationalBiological Pharmaceutical Investment Management Co., Ltd.,effective as of February 1, 2013, as supplemented by theSupplementary Agreement to Lease of Premises in Beijing BDABiomedical Park by and among Beijing FibroGen MedicalTechnology Development Co., Ltd., Beijing EconomicTechnology Investment Development Parent Company andBeijing BDA International Biological PharmaceuticalInvestment Management Co., Ltd., dated as of January 30,2013. S-1 333-199069 10.9 10/1/2014 10.8+ Form of Employment Offer Letter. S-1 333-199069 10.10 10/1/2014 10.9† Collaboration Agreement, by and between FibroGen, Inc. andAstellas Pharma Inc., effective as of June 1, 2005. 10-Q 001-36740 10.9 11/8/2017 10.9(i)*† Amendment No. 1 to Collaboration Agreement, by and betweenFibroGen, Inc. and Astellas Pharma Inc., effective as ofJanuary 1, 2013. — — — — 170 10.10† Anemia License and Collaboration Agreement, by and betweenFibroGen, Inc. and Astellas Pharma Inc., effective as of April 28,2006. S-1 333-199069 10.12 10/1/2014 10.11† Amendment to Anemia License and Collaboration Agreement,by and between FibroGen, Inc. and Astellas Pharma Inc.,effective as of August 31, 2006. S-1 333-199069 10.13 10/1/2014 10.12 Amendment No. 2 to Anemia License and CollaborationAgreement, by and between FibroGen, Inc. and Astellas PharmaInc., effective as of December 1, 2006. S-1 333-199069 10.14 10/1/2014 10.13† Supplement to Anemia License and Collaboration Agreement,by and between FibroGen, Inc. and Astellas Pharma Inc.,effective as of April 28, 2006. S-1 333-199069 10.15 10/1/2014 10.14† Amendment No. 3 to Anemia License and CollaborationAgreement, by and between FibroGen, Inc. and Astellas PharmaInc., dated as of May 10, 2012. S-1 333-199069 10.16 10/1/2014 10.15† Amended and Restated License, Development andCommercialization Agreement (China) by and among FibroGenChina Anemia Holdings, Ltd., Beijing FibroGen MedicalTechnology Development Co., Ltd., FibroGen International(Hong Kong) Limited and AstraZeneca AB, effective as ofJuly 30, 2013. S-1/A 333-199069 10.17 10/23/2014 10.16† Amended and Restated License, Development andCommercialization Agreement by and between Registrant andAstraZeneca AB, effective as of July 30, 2013. 10-Q/A 001-36740 10.16 12/14/2017 10.17† License Agreement by and between FibroGen, Inc. and theUniversity of Miami and its School of Medicine, dated as ofMay 23, 1997. S-1 333-199069 10.19 10/1/2014 10.18† First Amendment to May 23, 1997 License Agreement by andbetween FibroGen, Inc. and University of Miami, effective as ofJuly 29, 1999. S-1 333-199069 10.20 10/1/2014 10.19 Research and Commercialization Agreement by and amongFibroGen, Inc., GenPharm International Inc., Medarex, Inc. andFibroPharma, Inc., effective as of July 9, 1998. S-1 333-199069 10.21 10/1/2014 10.20 Amendment No. 1 to Research and CommercializationAgreement by and among FibroGen, Inc., GenPharmInternational Inc., Medarex, Inc. and FibroPharma, Inc.,effective as of June 30, 2001. S-1 333-199069 10.22 10/1/2014 10.21† Amendment No. 2 to Research and CommercializationAgreement by and among FibroGen, Inc., GenPharmInternational Inc., Medarex, Inc. and FibroPharma, Inc.,effective as of January 28, 2002. S-1 333-199069 10.23 10/1/2014 10.22† License Agreement by and between FibroGen, Inc. and theDana-Farber Cancer Institute, Inc., effective as of March 29,2006. S-1 333-199069 10.24 10/1/2014 171 10.23 Amendment No. 1 to License agreement by and betweenFibroGen, Inc. and Dana-Farber Cancer Institute, Inc., effectiveas of February 28, 2006. S-1 333-199069 10.25 10/1/2014 10.24 Amendment No. 2 to License Agreement by and betweenFibroGen, Inc. and Dana-Farber Cancer Institute, Inc., effectiveas of March 14, 2006. S-1 333-199069 10.26 10/1/2014 10.25+ Form of Indemnity Agreement by and between FibroGen, Inc.and its directors and officers. S-1/A 333-199069 10.27 10/23/2014 10.26(i)† Process Development and Clinical Supply Agreement by andbetween FibroGen, Inc. and Boehringer Ingelheim PharmaGmbH & Co. KG, effective as of November 29, 2007. S-1 333-199069 10.28(i) 10/1/2014 10.26(ii)† Letter Agreement by and between FibroGen, Inc. andBoehringer Ingelheim Pharma GmbH & Co. KG, effective as ofJune 26, 2008. S-1 333-199069 10.28(ii) 10/1/2014 10.26(iii)† Letter Agreement by and between FibroGen, Inc. andBoehringer Ingelheim Pharma GmbH & Co. KG, effective as ofAugust 18, 2008. S-1 333-199069 10.28(iii) 10/1/2014 10.26(iv)† Amendment No. 1 to the Process Development and ClinicalSupply Agreement by and between FibroGen, Inc. andBoehringer Ingelheim Pharma GmbH & Co. KG, effective as ofMay 28, 2009. S-1 333-199069 10.28(iv) 10/1/2014 10.26(v)† Amendment No. 3 to the Process Development and ClinicalSupply Agreement by and between FibroGen, Inc. andBoehringer Ingelheim Pharma GmbH & Co. KG, effective as ofNovember 5, 2010. S-1 333-199069 10.28(v) 10/1/2014 10.26(vi)† Amendment No. 4 to the Process Development and ClinicalSupply Agreement by and between FibroGen, Inc. andBoehringer Ingelheim Pharma GmbH & Co. KG, effective as ofJanuary 24, 2011. S-1 333-199069 10.28(vi) 10/1/2014 10.26(vii)† Amendment No. 5 to the Process Development and ClinicalSupply Agreement by and between FibroGen, Inc. andBoehringer Ingelheim Pharma GmbH & Co. KG, effective as ofApril 15, 2011. S-1 333-199069 10.28(vii) 10/1/2014 10.26(viii)† Amendment No. 6 to the Process Development and ClinicalSupply Agreement by and between FibroGen, Inc. andBoehringer Ingelheim Pharma GmbH & Co. KG, effective as ofMay 26, 2011. S-1 333-199069 10.28(viii) 10/1/2014 10.26(ix)† Amendment No. 7 to the Process Development and ClinicalSupply Agreement by and between FibroGen, Inc. andBoehringer Ingelheim Pharma GmbH & Co. KG, effective as ofJanuary 1, 2012. S-1 333-199069 10.28(ix) 10/1/2014 10.26(x)† Amendment No. 8 to the Process Development and ClinicalSupply Agreement by and between FibroGen, Inc. andBoehringer Ingelheim Pharma GmbH & Co. KG, effective as ofJuly 10, 2012. S-1 333-199069 10.28(x) 10/1/2014 10.26(xi)† Amendment No. 9 to the Process Development and ClinicalSupply Agreement by and between FibroGen, Inc. andBoehringer Ingelheim Pharma GmbH & Co. KG, effective as ofNovember 26, 2012. S-1 333-199069 10.28(xi) 10/1/2014172 10.26(xii)† Amendment No. 10 to the Process Development and ClinicalSupply Agreement by and between FibroGen, Inc. andBoehringer Ingelheim Pharma GmbH & Co. KG, effective as ofJune 21, 2013. S-1 333-199069 10.28(xii) 10/1/2014 10.26(xiii)† Amendment No. 11 to the Process Development and ClinicalSupply Agreement by and between FibroGen, Inc. andBoehringer Ingelheim Pharma GmbH & Co. KG, effective as ofJuly 9, 2013. S-1 333-199069 10.28(xiii) 10/1/2014 10.26(xiv)† Amendment No. 12 to the Process Development and ClinicalSupply Agreement by and between FibroGen, Inc. andBoehringer Ingelheim Pharma GmbH & Co. KG, effective as ofAugust 1, 2013. S-1 333-199069 10.28(xiv) 10/1/2014 10.26(xv)† Amendment No. 13 to the Process Development and ClinicalSupply Agreement by and between FibroGen, Inc. andBoehringer Ingelheim Pharma GmbH & Co. KG, effective as ofMarch 6, 2014. S-1 333-199069 10.28(xv) 10/1/2014 10.26(xvi)† Amendment No. 14 to the Process Development and ClinicalSupply Agreement by and between FibroGen, Inc. andBoehringer Ingelheim Pharma GmbH & Co. KG, effective as ofFebruary 5, 2014. S-1 333-199069 10.28(xvi) 10/1/2014 10.26(xvii)† Amendment No. 15 to the Process Development and ClinicalSupply Agreement by and between FibroGen, Inc. andBoehringer Ingelheim Pharma GmbH & Co. KG, effective as ofOctober 20, 2014. 10-Q 001-36740 10.28(xvii) 11/12/2015 10.26(xviii)† Amendment No. 16 to the Process Development and ClinicalSupply Agreement by and between FibroGen, Inc. andBoehringer Ingelheim Pharma GmbH & Co. KG, effective as ofDecember 8, 2014. 10-Q 001-36740 10.28(xviii) 11/12/2015 10.26(xix)† Amendment No. 17 to the Process Development and ClinicalSupply Agreement by and between FibroGen, Inc. andBoehringer Ingelheim Pharma GmbH & Co. KG, effective as ofDecember 8, 2014. 10-Q 001-36740 10.28(xix) 11/12/2015 10.26(xx)† Amendment No. 18 to the Process Development and ClinicalSupply Agreement by and between FibroGen, Inc. andBoehringer Ingelheim Pharma GmbH & Co. KG, effective as ofFebruary 15, 2015. 10-Q 001-36740 10.28(xx) 11/12/2015 10.26(xxi)† Amendment No. 19 to the Process Development and ClinicalSupply Agreement by and between FibroGen, Inc. andBoehringer Ingelheim Pharma GmbH & Co. KG, effective as ofMarch 1, 2015. 10-Q 001-36740 10.28(xxi) 11/12/2015 10.26(xxii)† Amendment No. 20 to the Process Development and ClinicalSupply Agreement by and between FibroGen, Inc. andBoehringer Ingelheim Pharma GmbH & Co. KG, effective as ofJune 1, 2015. 10-Q 001-36740 10.28(xxii) 11/12/2015 10.26(xxiii)† Amendment No. 21 to the Process Development and ClinicalSupply Agreement by and between FibroGen, Inc. andBoehringer Ingelheim Pharma GmbH & Co. KG, effective as ofMay 29, 2015. 10-Q 001-36740 10.28(xxiii) 11/12/2015 173 10.26(xxiv)† Amendment No. 23 to the Process Development and ClinicalSupply Agreement by and between FibroGen, Inc. andBoehringer Ingelheim Pharma GmbH & Co. KG, effective as ofSeptember 1, 2015. 10-Q 001-36740 10.28(xxiv) 11/12/2015 10.26(xxv)† Amendment No. 22 to the Process Development and ClinicalSupply Agreement, by and between FibroGen, Inc. andBoehringer Ingelheim Biopharmaceuticals GmbH, effective asof April 14, 2016. 10-Q 001-36740 10.26(xxv) 8/8/2016 10.26(xxvi)† Amendment No. 24 to the Process Development and ClinicalSupply Agreement, by and between Fibrogen, Inc. andBoehringer Ingelheim Biopharmaceuticals GmbH, retroactivelyeffective as of September 15, 2015. 10-Q 001-36740 10.26(xxvi) 8/8/2016 10.26(xxvii)† Amendment No. 25 to the Process Development and ClinicalSupply Agreement, by and between FibroGen, Inc. andBoehringer Ingelheim Biopharmaceuticals GmbH, retroactivelyeffective as of October 15, 2015. 10-Q 001-36740 10.26(xxvii) 8/8/2016 10.26(xxviii)† Amendment No. 26 to the Process Development and ClinicalSupply Agreement, by and between FibroGen, Inc. andBoehringer Ingelheim Biopharmaceuticals GmbH, effective asof June 30, 2016. 10-Q 001-36740 10.26(xxviii) 8/8/2016 10.26(xxix)† Amendment No. 27 to the Process Development and ClinicalSupply Agreement, by and between FibroGen, Inc. andBoehringer Ingelheim Biopharmaceuticals GmbH, effective asof July 25, 2016. 10-Q 001-36740 10.26(xxix) 11/8/2016 10.26(xxx)† Amendment No. 28 to the Process Development and ClinicalSupply Agreement, by and between FibroGen, Inc. andBoehringer Ingelheim Biopharmaceuticals GmbH, effective asof September 22, 2016. 10-Q 001-36740 10.26(xxx) 11/8/2016 10.26(xxxi)† Amendment No. 29 to the Process Development and ClinicalSupply Agreement, by and between FibroGen, Inc. andBoehringer Ingelheim Biopharmaceuticals GmbH, effective asof December 20, 2016. 10-K 001-36740 10.26(xxxi) 3/1/2017 10.26(xxxii)† Amendment No. 30 to the Process Development and ClinicalSupply Agreement, by and between FibroGen, Inc. andBoehringer Ingelheim Biopharmaceuticals GmbH, effective asof December 20, 2016. 10-K 001-36740 10.26(xxxii) 3/1/2017 10.26(xxxiii)† Amendment No. 31 to the Process Development and ClinicalSupply Agreement, by and between FibroGen, Inc. andBoehringer Ingelheim Biopharmaceuticals GmbH, effective asof March 2, 2017 10-Q 001-36740 10.26(xxxiii) 5/9/2017 174 10.26(xxxiv)† Amendment No. 32 to the Process Development and ClinicalSupply Agreement, by and between FibroGen, Inc. andBoehringer Ingelheim Biopharmaceuticals GmbH, effective asof September 1, 2017 10-K 001-36740 10.26(xxxiv) 2/27/2018 10.26(xxxv)† Work Order No. 1 to the Process Development and ClinicalSupply Agreement, by and between FibroGen, Inc. andBoehringer Ingelheim Biopharmaceuticals GmbH, effective asof September 1, 2017 10-K 001-36740 10.26(xxxv) 2/27/2018 10.27† State-Owned Construction Land Use Right Granting Contractby and between FibroGen (China) Medical TechnologyDevelopment Co., Ltd. and The Bureau of Land and Resourcesof Cangzhou, dated as of February 24, 2017 10-Q 001-36740 10.32 5/9/2017 10.28+ Offer Letter, by and between FibroGen, Inc. and Frank Valone,dated as of November 3, 2008. S-1 333-199069 10.29 10/1/2014 10.29+ Offer Letter, by and between FibroGen, Inc. and K. Peony Yu,dated as of November 21, 2008. S-1 333-199069 10.30 10/1/2014 10.30+ Offer Letter, by and between FibroGen, Inc. and Pat Cotroneo,dated as of October 23, 2000. S-1 333-199069 10.31 10/1/2014 10.31+ Form of Change in Control and Severance Agreement by andbetween FibroGen, Inc. and its officers. S-1/A 333-199069 10.32 10/24/2014 10.32+ Form of Executive Officer Change in Control and SeveranceAgreement 10-Q 001-36740 10.33 5/9/2017 21.1 Subsidiaries of FibroGen, Inc. S-1/A 333-199069 21.1 10/24/2014 23.1* Consent of PricewaterhouseCoopers LLP. — — — — 24.1* Power of Attorney (included in signature pages). — — — — 31.1* Certification of Chief Executive Officer, as required by Rule13a-14(a) or Rule 15d-14(a). — — — — 31.2* Certification of Chief Financial Officer, as required by Rule13a-14(a) or Rule 15d-14(a). — — — — 32.1* Certification of Principal Executive Officer and PrincipalFinancial Officer, as required by Rule 13a-14(b) or Rule 15d-14(b) and Section 1350 of Chapter 63 of Title 18 of the UnitedStates Code (18 U.S.C. §1350)(1). — — — — 101.INS* XBRL Instance Document — — — — 101.SCH* XBRL Taxonomy Schema Linkbase Document — — — — 101.CAL* XBRL Calculation Linkbase Document — — — — 101.DEF* XBRL Definition Linkbase Document — — — — 101.LAB* XBRL Labels Linkbase Document — — — — 101.PRE* XBRL Taxonomy Presentation Linkbase Document — — — — *Filed herewith.†Confidential Treatment Requested.175 +Indicates a management contract or compensatory plan.(1)This certification accompanies the Form 10-K to which it relates, is not deemed filed with the Securities and Exchange Commission and is not to beincorporated by reference into any filing of FibroGen, Inc. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, asamended (whether made before or after the date of the Form 10-K), irrespective of any general incorporation language contained in such filing.(c) Financial Statement Schedules—See (a) 2 above. All other financial statement schedules are omitted because they are not applicable because therequested information is included in the consolidated financial statements or notes thereto. 176 SIGNATURESPursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this Annual Report onForm 10-K to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of San Francisco, State of California. FIBROGEN, INC. Date: February 27, 2019 By: /s/ Thomas B. Neff Thomas B. NeffChairman of the Board and Chief Executive Officer(Principal Executive Officer) Date: February 27, 2019 By: /s/ Pat Cotroneo Pat CotroneoSenior Vice President, Finance and Chief Financial Officer(Principal Financial and Accounting Officer)177 POWER OF ATTORNEYKNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Thomas B. Neff and PatCotroneo, jointly and severally, his or her attorneys-in-fact, each with the power of substitution, for him or her in any and all capacities, to sign anyamendments to this Annual Report on Form 10-K, and to file the same, with exhibits thereto and other documents in connection therewith with the Securitiesand Exchange Commission, hereby ratifying and confirming all that each of said attorneys-in-fact, or his substitute or substitutes, may do or cause to be doneby virtue hereof.Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of theregistrant and in the capacities and on the dates indicated. Signature Title Date /s/ Thomas B. Neff Chairman of the Board and Chief Executive Officer(Principal Executive Officer) February 27, 2019Thomas B. Neff /s/ Pat Cotroneo Senior Vice President, Finance and Chief Financial Officer(Principal Financial and Accounting Officer) February 27, 2019Pat Cotroneo /s/ Jeffrey L. Edwards Director February 27, 2019Jeffrey L. Edwards /s/ Jeffrey W. Henderson Director February 27, 2019Jeffrey W. Henderson /s/ Maykin Ho, Ph.D. Director February 27, 2019Maykin Ho, Ph.D. /s/ Thomas F. Kearns Jr. Director February 27, 2019Thomas F. Kearns Jr. /s/ Kalevi Kurkijärvi, Ph.D. Director February 27, 2019Kalevi Kurkijärvi, Ph.D. /s/ Gerald Lema Director February 27, 2019Gerald Lema /s/ Rory B. Riggs Director February 27, 2019Rory B. Riggs /s/ Roberto Pedro Rosenkranz, Ph.D. M.B.A. Director February 27, 2019Roberto Pedro Rosenkranz, Ph.D. M.B.A. /s/ Jorma Routti, Ph.D. Director February 27, 2019Jorma Routti, Ph.D. /s/ James A. Schoeneck Director February 27, 2019James A. Schoeneck /s/ Toshinari Tamura, Ph.D. Director February 27, 2019Toshinari Tamura, Ph.D. 178 [*] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities andExchange Commission pursuant to Rule 24b-2 of the Securities Act of 1934, as amended.Exhibit 10.9(i)Amendment No. 1 To Collaboration AgreementThis Amendment No. 1 (the “First Amendment”) is effective as of January 1, 2013 (the “First Amendment Effective Date”) by and betweenAstellas Pharma Inc. (“Astellas”) and FibroGen, Inc. (“FG”). This First Amendment amends the Collaboration Agreement entered into by and betweenAstellas and FG on June 1, 2005 (the “Agreement”). Astellas and FG shall be referred to individually herein as a “Party” and collectively as the “Parties”.Whereas, under the Agreement, Astellas and FG have agreed to collaborate on the development and commercialization of certain small moleculeprolyl hydroxylase inhibitors as therapeutics in the Astellas Territory;Whereas, Section 12.2 of the Agreement provides that FG shall have the worldwide exclusive right to manufacture Lead Compound, and thatAstellas and its Affiliates and Sublicensees shall not directly or indirectly make, produce or manufacture any Lead Compound;Whereas, Section 12.3 of the Agreement provides that FG shall have the exclusive right and obligation to supply Lead Compound to Astellas andits Affiliates and Sublicensees for all development and commercial purposes, and that Astellas and its Affiliates and Sublicensees shall purchase such LeadCompound exclusively from FG;Whereas, Section 12.4 of the Agreement provides that, upon Marketing Approval for any Lead Compound, FG’s obligation to supply Astellaswith Lead Compound shall be limited to, and all payment obligations shall be based on, the supply of Bulk Product, as set forth in Section 9.2 of theAgreement;Whereas, Article 9 of the Agreement contains certain transfer pricing provisions to compensate FG for the manufacture and supply of LeadCompound(s) to Astellas;Whereas, the Parties hereby agree that the amendments to the Agreement contained in this First Amendment are not intended to be and shall notbe deemed an Amendment to that certain Anemia License and Collaboration Agreement, by and between FG and Astellas, dated April 28, 2006 as amended(“EU Agreement”);Whereas, subject to the terms and conditions of this First Amendment, and notwithstanding anything to the contrary contained in the Agreement,with respect solely to the compound designated by FG as FG-4592 and a current Lead Compound, FG shall not supply to Astellas Lead Compoundformulated as bulk drug product, but shall instead supply Astellas with the active pharmaceutical ingredient of FG-4592, also known as roxadustat (“FG-4592”) (and, for the avoidance of doubt, only FG-4592) in the form of drug substance (“API”) solely for use by Astellas to formulate, fill, and finish into bulkdrug product containing FG-4592, in a formulation and pursuant to the manufacturing method and process approved by FG (“Astellas Bulk Product”); andWhereas, subject to the terms and conditions of this First Amendment, FG agrees that Astellas shall have the right to manufacture Astellas BulkProduct for non-commercial and commercial purpose (each such term to be used in this First Amendment as set forth in Article 9 of the Agreement) in theAstellas Territory (Japan) using API exclusively supplied by FG.Now, Therefore, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties agree as follows:1)Unless otherwise defined herein, all capitalized terms and phrases used in this First Amendment shall have the meaning ascribed to them in theAgreement.2)With respect to FG-4592 only, references to the Lead Compound in the Agreement shall be deemed references to API, including pursuant to Article 12of the Agreement and in Section 17.3 and in the exception clause at the end of Section 17.2 of the Agreement, Sections 9.1 and 9.2 and additionalarticles and sections, as amended hereby, to the extent applicable to accomplish the Parties’ intent under this First Amendment. In addition, with respectto FG-4592, the term “Product Specifications”, as defined in Section 1.56 of the Agreement will apply to API only, provided, however, that FG andAstellas shall agree on any specifications to any Astellas Bulk Product produced by Astellas in any form or formulation. [*] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities andExchange Commission pursuant to Rule 24b-2 of the Securities Act of 1934, as amended.Exhibit 10.9(i)3)Astellas shall have the right to manufacture Astellas Bulk Product in the Astellas Territory solely from API supplied by FG pursuant to Article 12 of theAgreement as follows: a)Section 13.1 of the Agreement is amended to designate the existing paragraph subsection 13.1.1. and to add the following paragraph governingsupply of FG-4592 as subsection 13.1.2:13.1.2“With respect to FG-4592, and subject to the terms and conditions of this Agreement, FGhereby grants to Astellas an exclusive license under the FG Technology in the Astellas Territory to: (a) import API exclusivelysupplied by or on behalf of FG; and (b) manufacture and have manufactured Astellas Bulk Product from such API, solely for usepursuant to the license granted in Section 13.1.1.” b)Astellas shall manufacture Astellas Bulk Product (i) solely in the Astellas Territory for use and sale in the Astellas Territory in accordance with theterms of the Agreement and (ii) solely using API supplied by or on behalf of FG.The intent of this Amendment is that the Astellas will subcontract manufacturing of Astellas Bulk Product to its Affiliate Astellas Pharma TechCo., Ltd. to manufacture at its facility in [*]. Astellas may subcontract its manufacture of Astellas Bulk Product to another Affiliate and/or a thirdparty for non-commercial and commercial manufacturing pursuant to an agreement pre-approved in writing by FG (any such third party, excludingAstellas Pharma Tech Co., Ltd., a “Subcontractor”), provided, [*]. Astellas shall be responsible for and ensure: (i) the compliance of eachSubcontractor with the terms of the Agreement, (ii) that each Subcontractor undertakes in writing to (a) obligations of confidentiality and non-useregarding Confidential Information consistent with the terms of Article 16 of the Agreement; (b) a quality agreement between Astellas andSubcontractor that conforms with terms of the applicable Drug Product Agreement; and (c) an agreement that restricts Subcontractor from [*] afterthe expiration or termination of the agreement, and (iii) each Subcontractor agrees in writing to assign all inventions and other intellectualproperty made related to any such work in connection with Astellas Bulk Product to Astellas (and Astellas will in turn assign to FG as provided inthe Agreement). For the avoidance of doubt, FG shall have the right to visit, conduct technical review and audit any Subcontractor with respect toall aspects of the manufacturing process and methods, and FG shall have the opportunity to review any agreements related to the manufacture ofthe Astellas Bulk Product between such pre-approved Subcontractor and Astellas prior to execution (other than financial terms); provided, further,that the technical review and audit process shall be conducted in accordance with the procedure set forth in Section 10 of this First Amendment.4)Astellas hereby expressly agrees that any API supplied by FG under the Agreement, as amended by this First Amendment shall be used only tomanufacture Astellas Bulk Product, including any of the activities set forth in Exhibit A under the heading “Permitted Activities” (“PermittedActivities”) and any administrative related activities thereof. For clarity, Astellas shall not take any other action with respect to, or make any other useof such API for any other purpose, including without limitation any of the activities set forth in Exhibit A under the heading “Prohibited Activities”(“Prohibited Activities”). FG from time to time has transferred to Astellas API and other materials and permitted Astellas to conduct manufacturingdevelopment activities in anticipation of the execution of this First Amendment. Astellas represents and warrants that it has at all times complied withthe terms of Material Transfer Agreement Letter dated January 31, 2013, Material Transfer Agreement Letter dated March 8, 2013, Material TransferAgreement dated June 10, 2014 and Material Transfer Agreement dated June 15, 2018 between FG and Astellas (collectively, “MTAs”) regarding thematerials provided thereunder, including without limitation performing only the permitted and not conducting any prohibited activities set forth in theapplicable MTAs. The Parties hereby agree that (i) any use of API except for Permitted Activities under this Amendment after November 30, 2018 or (ii)any use of the materials provided under the MTAs by Astellas other than the permitted purposes specified in the applicable MTAs shall constitute abreach under Section 18.2.1 of the Agreement, and if any such material breach is not cured pursuant to Section 18.2.1 of the Agreement, FG shall havethe right to terminate the Agreement thereunder. If Astellas wishes to conduct any other activities with the API, it may do so only upon prior writtenapproval by FG. [*] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities andExchange Commission pursuant to Rule 24b-2 of the Securities Act of 1934, as amended.Exhibit 10.9(i)5)The Parties agree that FG has provided all FG Technical Information necessary for Astellas or Subcontractor to manufacture Astellas Bulk Product fromAPI according to the process approved by the Parties. In the event that Astellas wishes to conduct a technology transfer process to anotherSubcontractor, Astellas may do so provided that FG can, [*], review and approve in writing, the technology transfer protocol of Astellas and theSubcontractor prior to the commencement of technology transfer activity , and review the post-transfer report to confirm the transfer complied with thetechnology transfer protocol, and any deviations are reasonably acceptable to FG, provided that if any deviations are not reasonably acceptable, FG,Astellas and the applicable Subcontractor shall work together to agree on a resolution acceptable to all parties, provided further that FG shall usecommercially reasonable efforts to prevent any delay on Astellas’s technology transfer activities.6)The Parties confirm that they have executed a Quality Assurance Agreement (“QAA”) dated November 17th, 2014, including a Product TechnicalAgreement governed thereby (“PTA”) dated November 17th, 2014, to govern the responsibilities of both Parties with respect to manufacture, storage,transportation, export/import, testing, specifications and release of API for non-commercial purposes, as amended by this First Amendment (“API QAAand PTA”). The Parties confirm that they have executed an API QAA and PTA for commercial purposes.7)FG shall approve, prior to the production of the Validation Batches, (i) the validation protocol, and (ii) any validation protocol amendments. Inaddition, Astellas shall send the validation report thereof to FG for review and comment prior to its finalization, as well as the final validation reportafter finalization. In addition to the foregoing, a separate agreement for Astellas Bulk Product (“Drug Product Agreement”) shall be negotiated andexecuted to govern manufacturing for commercial and non-commercial purposes. The Parties shall agree upon a Drug Product Agreement forcommercial purposes as soon as reasonably practicable [*] and prior to earlier of (a) [*], and (b) [*]. The manufacturing methods and specifications,quality standards (i.e. compliance with Astellas SOPs and applicable laws and regulations), and applicable laws and regulations for Astellas BulkProduct for commercial purpose will be incorporated and described in the Drug Product Agreement at the same level of detail as the CTD Module 1 forthe Marketing Approval Application in the Astellas Territory (Japan) plus any additional detail reasonably requested by FG. If Astellas proposes tomake any change to the manufacturing methods, specifications, or quality provisions set forth in the Drug Product Agreement or that materially affectproduct quality, then Astellas shall notify FG of the proposed changes, and the Parties shall thereafter discuss and agree as to whether and what changesmay be made pursuant to an amendment to the Drug Product Agreement, provided that the Parties shall take into consideration whether such changewas requested by Japanese regulatory authorities.8)Astellas shall, by itself or through its Subcontractor, maintain all master batch records, batch records (including executed batch records) and allsupporting documentation, quality control documentation (including deviation reports), stability reports, annual reviews, regulatory submissions,acceptance test results and other relevant information for each batch of Astellas Bulk Product (collectively, “Processing Data”) for [*], or such longertime as required by the applicable laws and regulations. FG shall have the right to review such Processing Data upon reasonable request, includingwithout limitation in preparation of any anticipated inspections (e.g., a pre-approval inspection), by visiting at FG’s option Astellas’ or itsSubcontractor’s facility and/or requesting a copy of such Processing Data, each Party to bear its own cost and expense.9)Astellas shall be responsible for obtaining and maintaining all necessary plant inspection standards, plant licenses, permits and approvals tomanufacture and package (including label) Astellas Bulk Product as required under applicable law and regulations. [*] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities andExchange Commission pursuant to Rule 24b-2 of the Securities Act of 1934, as amended.Exhibit 10.9(i)10)FG shall have the right, upon reasonable advance notice (which shall include the scope or purpose during regular business hours), to conduct technicalvisit and review of Astellas Bulk Product manufacturing facilities or other facilities utilized in the performance of related activities for Astellas BulkProduct (e.g. analytical testing, packaging, labeling, etc.) by Astellas (or its applicable Subcontractor) to ensure compliance with applicable laws, rulesand regulations, including, without limitation, Japanese regulatory standards and quality and technical standards set forth in the Drug ProductAgreement (the “Relevant Standards”). Such technical visit and review shall be conducted at FG’s cost and expense in a manner so as to minimizedisruption of Astellas’ or its Subcontractor’s business operations. If FG finds any deficiencies arising in the review, FG shall send written noticedetailing such deficiencies to Astellas, the Parties shall meet to discuss, and Astellas shall as soon as possible (but no later than [*] after receipt of suchnotice (or [*] for critical observations), submit a plan to FG outlining measures proposed to be taken to remedy such deficiencies, and the Parties shalldiscuss and agree upon any measures to be taken by Astellas, subject always to the requirements of the Japanese regulatory authorities and recognizingAstellas’ role and responsibilities as the marketing authorization holder in Japan.11)Astellas shall be responsible for procuring all excipients required for the manufacture of Astellas Bulk Product from raw material suppliers qualified byAstellas, and FG will have the right to review a statement and other documents relied upon for qualification status (including audit reports, to the extentAstellas obtained approval from such raw material suppliers to disclose them to FG, which approval Astellas shall use commercially reasonable effortsto obtain, if requested by FG) of such raw material suppliers and a summary of Astellas’ audit program. All such excipients must comply with allapplicable specifications, standard operating procedures, all applicable laws and regulations, and any Marketing Approvals in the Astellas Territory forthe Astellas Bulk Product.12)Upon execution of this Amendment, Astellas will provide a rolling [*] forecast of its anticipated API Batch (as defined below) requirements on a [*]basis, as well as the corresponding Astellas Bulk Product tablet manufacturing plan for such API Batches. Astellas will provide to FG written updates tosuch forecast by the [*] thereafter.13)Astellas acknowledges that FG will manufacture and supply API to Astellas [*], that each API batch equals to approximately [*] (“API Batch(es)”), andany API Firm Purchase Order (as defined below) shall be for [*].14)For any API that Astellas wishes to purchase, Astellas will provide FG with a binding purchase order specifying (a) the [*], (b) the requested date ofDelivery, and (c) all other relevant information as agreed by FG and Astellas, as early as possible and in no event less than [*] prior to requestedDelivery date (“API Firm Purchase Order”). FG will manufacture and deliver API Batches as requested in an API Firm Purchase Order(s). All forecastsand API Firm Purchase Orders will be prepared in good faith in order to facilitate FG's manufacture and shipment of API in compliance with theAgreement.15)Subject always to the requirements under Sections 13 and 14, Astellas shall submit API Firm Purchase Orders to FG from time to time, and FG shallsupply the quantity of API Batches requested in each API Firm Purchase Order that complies with this Agreement and Section 14 of this Amendment,provided that (i) if Astellas has submitted a forecast for the time periods listed below in (a) – (c) it shall provide API Firm Purchase Orders that fall withinthe ranges set forth therein, and (ii) the [*] ordered in a calendar quarter is within all of the following ranges: a)[*] and [*] of the amount forecast for such API for the calendar quarter [*] from the calendar quarter of the Delivery date; b)[*] and [*] of the amount forecast for such API for the calendar quarter [*] from the calendar quarter of the Delivery date; c)[*] and [*] of the amount forecast for such Bulk Product for the calendar quarter [*] from the calendar quarter of the Delivery date; providedhowever, that d)if, due to the limitations in Section 13 and in (a) – (c) above, the number of batches forecasted for any calendar year by Astellas is insufficient toallow for the ordering of [*] in any calendar quarter, notwithstanding such limitations, Astellas shall be entitled to order and purchase pursuant toan API Firm Purchase Order [*] in such calendar year. [*] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities andExchange Commission pursuant to Rule 24b-2 of the Securities Act of 1934, as amended.Exhibit 10.9(i)Within [*] after its receipt of an API Firm Purchase Order complying with the requirements of this section 15, FG shall acknowledge its receipt of suchorder and shall confirm the requested Delivery Date of the Bulk Product. For API requested in any Purchase Order exceeding the quantity or DeliveryDate parameters set forth above, FG agrees that it shall use reasonable efforts to fill as much of such excess order as FG can reasonably manufacture andsupply in a timely manner. FG shall include in its response to Astellas such excess amount and Delivery Date which FG is able to supply.Astellas and FG shall enter into a commercial supply agreement by [*]. Such commercial supply agreement shall govern the detailed conditions ofsupply of API by FG to Astellas, including the full forecasting and permitted variation provisions, binding order commitments, etc. contained herein, aswell as other standard commercial supply agreement provisions which shall be consistent with the terms and conditions herein and in the Agreement inall aspects, and contain other reasonable and customary provisions, including without limitation provisions for security of the product (defined asprocedures to reasonably protect against diversion, counterfeit, etc.), full accounting and reconciliation of API and Astellas Bulk Product.16)For API supplied by FG to Astellas for a non-commercial purpose, Astellas shall compensate FG pursuant to the provisions of Section 9.1 of theAgreement. For API supplied by FG to Astellas for commercial purposes, including Astellas Bulk Product manufactured in the validation process(“Validation Batch”), Astellas shall pay FG on a per batch basis an amount calculated pursuant to the provisions of Section 9.2 of the Agreement (the“API Batch Transfer Price”), as defined below. In 2018, FG shall deliver to Astellas [*] batches of API (the “2018 API Batches”), a portion [*] ofwhich has been delivered to Astellas in advance of the execution of this First Amendment and the remaining portion [*] for which Astellas shall deliverto FG a purchase order within [*]. Astellas shall pay to FG for the 2018 API Batches the API Batch Transfer Price agreed by the Parties under the letterfrom FG to Astellas dated June 15, 2018 (“2018 API Batch Transfer Price”) subject to the adjustment set forth in Section 17 below. Astellas shall payfor the API supplied by FG for the Validation Batches within [*] of the date of invoice.The “API Batch Transfer Price” shall be calculated based on (a) the [*] calculated based on (i) the [*] to be manufactured by Astellas for the upcomingAstellas fiscal year derived from the manufacturing plan presented in the then-current Astellas supply forecast, and (ii) the [*] and (b) the [*] less (c) the BulkProduct Manufacturing Cost.“Astellas Yield” shall be defined as the [*] from the manufacture by Astellas (or its subcontractor) of [*] for the prior calendar year on a [*] basis.“FG Yield” shall be defined as the average yield per strength from the manufacture by FG (or its subcontractor) of [*] for the prior calendar year on a [*] basis.“Bulk Product Manufacturing Cost” shall mean an amount equal to [*].17)The API Batch Transfer Price shall be updated by FG annually based on the updated inputs provided under the following process: a)No later than the end of February of each calendar year, FG shall provide to Astellas: (1)the [*]for the prior calendar year, with the basis of calculation, and (2)the [*]for the upcoming Astellas fiscal year, with the basis of calculation, including the [*] to be manufactured by Astellas for the upcomingAstellas fiscal year based on the manufacturing plan presented in the then-current Astellas supply forecast. b)No later than [*] after updated Listed Price is announced in the notice through official gazette of Japan (“Kanpo”), Astellas shall provide to FG anupdated Listed Price issued by the Japanese Ministry of Health, Labour and Welfare on a per strength basis for the upcoming year. If the ListedPrice is not updated, Astellas shall notify FG by March 15 of such calendar year. c)No later than [*] after the receipt of the notice pursuant to (b) above, FG shall provide to Astellas the updated API Batch Transfer Price for APIBatches to be delivered during the following Astellas Fiscal Year. [*] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities andExchange Commission pursuant to Rule 24b-2 of the Securities Act of 1934, as amended.Exhibit 10.9(i) d)No later than [*] of the receipt of the updated API Batch Transfer Price from FG in each calendar year, but in no event no later than March 31 ofsuch calendar year, Astellas shall review and approve the updated API Batch Transfer Price. e)The updated API Batch Transfer Price takes effect as of the date upon which Astellas has amended the price of Astellas Bulk Product towholesalers reflecting the updated Listed Price (the “Invoice Price Effective Date”) but in any event no later than March 15 of any calendar year.Astellas shall inform FG of the Invoice Price Effective Date within [*] from the date of announcement on the updated Listed Price.For the transfer of 2018 API Batches, upon FG and Astellas shall determine an updated API Batch Transfer Price following the procedures set forth inthis Section, provided that the timeline therefor shall be discussed and agreed separately, but in all cases it shall be determined within [*] of the date onwhich the initial issuance of the Listed Price by the Japanese Ministry of Health, Labour and Welfare. Following the agreement of the updated APIBatch Transfer Price for the 2018 API Batches based on the actual Listed Price (the “2018 Updated Price”), FG shall issue to Astellas an invoice orAstellas shall issue to FG an invoice, as the case may be, and the party receiving such invoice shall pay for the true-up which shall be defined as (i)difference of the 2018 API Batch Transfer Price and the 2018 Updated Price, (ii) multiplied by the volume of 2018 API Batch, within [*] of the date ofinvoice.18)Commencing the first year after the issuance of the initial Listed Price, within [*] from the Invoice Price Effective Date in each calendar year, Astellasshall provide to FG the “API Year End Inventory”, defined as (i) the [*] and (ii) [*] (as defined below) with the basis of calculation. Regarding the APIYear End Inventory True-Up which shall be implemented at the [*], Astellas shall provide to FG the API Year End Inventory as of the end of the lastbusiness day of the month preceding the month during which the Listed Price is issued, and such API Year End Inventory True-Up shall be provided toFG within [*] of the date on which the API Batch Transfer Price corresponding to initial Listed Price is determined. FG shall review and approve the APIYear End Inventory True Up within [*] of receipt thereof. Astellas shall pay to FG, or FG shall pay for the API Year End Inventory True Up within [*] ofthe date of invoice, which invoice FG shall deliver to Astellas, or Astellas shall deliver to FG, upon FG’s approval of API Year End Inventory True Up.The API Year End Inventory True Up shall be defined as: i)the difference between (1)[*], and (2)[*] ii)multiplied by [*]19)The parties shall true up the API Batch Transfer Price annually, according to the following process: a)Within [*] from the date of the Invoice Price Effective Date in each calendar year, Astellas shall notify FG (i) the actual weighted average of thetablet strengths (by percentage) which was manufactured by Astellas for the current Astellas fiscal year; and (ii) amount of API actually used byAstellas for the manufacture of the Astellas Bulk Product for the current Astellas fiscal year (the “Actually Used API”). b)Within [*] thereafter, FG shall provide to Astellas the amount of true-up of the API Batch Transfer Price for the Actually Used API (the “TransferPrice True Up”), with the basis of calculation.The Transfer Price True Up shall be defined as the difference of i and ii below: i)[*]. ii)[*]. c)Within [*] thereafter, but no later than April 15 of such calendar year, Astellas shall review and approve the calculations provided for the TransferPrice True Up. [*] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities andExchange Commission pursuant to Rule 24b-2 of the Securities Act of 1934, as amended.Exhibit 10.9(i) d)Within [*] thereafter, FG shall issue to Astellas an invoice or Astellas shall issue to FG an invoice, as the case may be, and the party receiving suchinvoice shall pay for the Transfer Price True Up within [*] of the date of invoice. e)Regarding the Transfer Price True Up which shall be applicable to 2018 API Batches, FG and Astellas shall implement the true-up following theprocedures set forth in this Section, immediately after [*].20)Astellas will be solely responsible for all costs related to the loss, non-conformity or destruction of API Batch(es) purchased under API Firm PurchaseOrder and any materials produced therefrom following Delivery of API pursuant to Section 12.7 of the Agreement.21)Astellas shall bear all costs relating to and associated with any Permitted Activities, including without limitation transporting, importing, receiving andtesting API and manufacturing, testing and releasing Astellas Bulk Product, as well as any related support provided by FG upon written request byAstellas, whether by its employees, consultants or contractors, to the extent related to the Permitted Activities. If FG is to provide support to Astellas, FGshall provide the estimated costs to Astellas beforehand, and Astellas shall pay the actual costs incurred within [*] of receipt of invoice from FGtherefor.22)FG is and shall be the exclusive owner of all inventions and other intellectual property made related to the Protected Field, which includes for theavoidance of doubt, any process manufacturing or other activities undertaken by Astellas or its Subcontractor under this First Amendment or otherwiserelating to the manufacture of FG-4592, subject to certain Astellas’ rights, pursuant to the provisions of Sections 14.1 and 14.2 of the Agreement.Neither Astellas nor its Subcontractor shall use any proprietary drug delivery system technology in connection with FG-4592 or Astellas Bulk Productwithout FG’s prior written consent. Astellas shall grant, and hereby grants, a worldwide, fully paid non-exclusive license to FG pursuant to theprovisions of Section 14.1. [*] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities andExchange Commission pursuant to Rule 24b-2 of the Securities Act of 1934, as amended.Exhibit 10.9(i)23)The Parties agree that the JDC shall appoint a Joint Manufacturing Subcommittee (the “JMS”) to oversee the manufacture of the product and to providefor discussion forum for any supply related issues, which committee shall meet on a quarterly basis, telephonically or in person, unless otherwise agreedby the Parties, and as needed to address urgent issues related to manufacturing and supply. Each Party shall initially appoint three (3) representatives toserve on the JMS. Each representative appointed to the JMS shall have sufficient seniority within the applicable Party or its Affiliate to make decisionsarising within the scope of the JMS responsibilities which scope shall be mutually discussed and agreed by the Parties. Either party may propose agendaitems, which shall be discussed by the Parties at the JMS meetings. The representatives from each Party will have, collectively, one (1) vote on behalf ofthat Party, and all decision making shall be by consensus. Disputes at the JMS shall be handled under Section 19 of the Agreement, with initial referralto the Authorized Designees, rather than the JDC, unless otherwise agreed by the Parties.24)In the event of a termination for any reason, and so as to avoid any interruption of supply, including for reasons of patient safety, and subject to therequirements of this Section 22, Astellas shall continue to manufacture Astellas Bulk Product sufficient to meet FG’s requirements in the AstellasTerritory until earlier of (i) [*]. In connection therewith, Astellas and FG shall mutually agree on manufacturing forecast for Astellas Bulk Product, basedon FG’s reasonable projections and timelines requirements as agreed by the Parties. Astellas shall notify FG in writing within [*] of the issuance byAstellas of a notice of termination to FG or receipt by Astellas of a notice of termination from FG, of its then-current inventory at Astellas and theinventory expected to be held at Astellas at the effective date of such termination. Any inventory of Astellas Bulk Product in Astellas’ possession(including that of any Subcontractor, including any third party labeling or packaging Astellas Bulk Product), at the effective date of termination andrequested by FG, shall be transferred to FG for its use, including for commercial sale, within the reasonable timeline as agreed by the Parties, providedthat both Parties [*] to prevent any material disruption in the market. For such Astellas Bulk Product, and any finished (packaged) product resultingtherefrom, FG shall pay to Astellas [*]. FG may sell, at its own responsibility, any Astellas Bulk Product in Astellas packaging, provided that FG shallput additional labeling on Astellas Bulk Product as required under applicable laws and regulations at its cost. In furtherance thereof, and commencingupon the receipt of a valid notice of such termination (unless such termination is capable of being cured and the breaching party is actively attemptingto cure), Astellas shall provide all technical and manufacturing information and documents sufficient and necessary to enable cGMP bulk productmanufacturing by FG, including without limitation, a technology transfer from Astellas to FG and/or its Affiliates or subcontractor(s) of Astellastechnical information, including but not limited to methods, specifications, processes, and other information or parameters as FG and Astellas deemreasonable to continue and complete the manufacture of Astellas Bulk Product and archival or storage of any finished product resulting therefrom; andAstellas shall conduct all such transfer to FG or its Affiliate or Subcontractor in accordance with the timeline agreed by the Parties. FG will usereasonable efforts to minimize the burden on Astellas to create additional documentation needed to ensure continued supply of product and efficientresponse to regulatory requirements, etc., provided that FG shall bear Astellas’s reasonable cost necessary to create additional documentation. Theperiod of transitional manufacture and archival and storage of any finished product resulting therefrom shall not exceed [*] following the effective dateof the termination. In the event that Astellas utilizes a Subcontractor(s) for manufacture of Astellas Bulk Product (including any vendor involved inpackaging or labeling), upon FG’s request, Astellas shall use commercially reasonable effort to cooperate to enable FG to (i) enter into a newcommercial manufacturing and supply agreement with any requested Subcontractor; or (ii) assign existing agreement(s) between Astellas and suchSubcontractor(s) to FG; in either case except for the financial terms to be negotiated between FG and such Subcontractor(s).25)In addition to any reports required to be delivered to FG under Section 10.1 of the Agreement, in order that FG may comply with its financial reportingobligations, Astellas shall, within [*] after the end of each calendar quarter, provide FG with a manufacturing and inventory report for all API andAstellas Bulk Product (including, for the avoidance of doubt, finished and/or labeled and packaged product, and product designated as samples, if any)in the possession of Astellas or its Subcontractor at the end of each such calendar quarter, including the status, disposition, and expected use thereof, inthe detail and form reasonably satisfactory to FG and as outlined on Exhibit B. [*] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities andExchange Commission pursuant to Rule 24b-2 of the Securities Act of 1934, as amended.Exhibit 10.9(i)26)Section 20.6 (Notices) is hereby amended to reflect the Parties’ current notice information, as follows:Astellas:Astellas Pharma Inc. Attn: Vice President, Legal [*] with copy to:Astellas Pharma Inc. Attn: Vice President, Business Development [*] FG:FibroGen, Inc. Attn: Chief Executive Officer 409 Illinois Street San Francisco, California 94158 United States of Americawith a copy to:FibroGen, Inc. Attn: Chief Legal Counsel 409 Illinois Street San Francisco, California 94158 United States of America27)The Agreement, as amended hereby, contains the entire understanding of the Parties with respect to the subject matter hereof. The Parties acknowledgethat the amendments to the Agreement contained in this First Amendment are and shall be of no force or effect with respect to the EU Agreement.28)Except as otherwise provided herein, the Agreement has not been modified or amended and remains in full force and effect. All express or impliedagreements and understandings, either oral or written, heretofore made that conflict with respect to the subject matter herein are expressly superseded inthis First Amendment.29)This First Amendment may be executed in counterparts, each of which shall be deemed an original, and all of which together shall constitute one andthe same instrument. Counterparts may be signed and delivered by facsimile and/or via portable document format (.pdf), each of which shall be bindingwhen sent. [*] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities andExchange Commission pursuant to Rule 24b-2 of the Securities Act of 1934, as amended.Exhibit 10.9(i)IN WITNESS WHEREOF, the Parties have executed this First Amendment to the Agreement as of the First Amendment Effective Date.FibroGen, Inc. Astellas Pharma Inc.By: By: Name: Name:Mitsunori MatsudaTitle: Title:Senior Vice President and President, Pharmaceutical Technology  [*] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities andExchange Commission pursuant to Rule 24b-2 of the Securities Act of 1934, as amended.Exhibit 10.9(i) Exhibit A:Prohibited Activities 1.[*]Permitted activities: 1.[*] [*] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities andExchange Commission pursuant to Rule 24b-2 of the Securities Act of 1934, as amended.Exhibit 10.9(i) EXHIBIT B:For the Quarterly Manufacturing Reports, the following information should be included: •[*]Exhibit 23.1Consent of Independent Registered Public Accounting FirmWe hereby consent to the incorporation by reference in the Registration Statements on Form S-3 (No. 333-216368) and Form S-8 (No. 333-200348, No. 333-213816 and No. 333-216369) of FibroGen, Inc. of our report dated February 26, 2019 relating to the financial statements, financial statement schedule andthe effectiveness of internal control over financial reporting, which appears in this Form 10-K./s/ PricewaterhouseCoopers LLPSan Jose, CaliforniaFebruary 27, 2019Exhibit 31.1CERTIFICATIONI, Thomas B. Neff., certify that;1. I have reviewed this annual report on Form 10-K of FibroGen, Inc.;2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make thestatements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financialcondition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined inExchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in the Exchange Act Rules 13a-15(f) and 15d-15(f)) forthe registrant and have:(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, toensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities,particularly during the period in which this report is being prepared;(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under oursupervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposesin accordance with generally accepted accounting principles;(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about theeffectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recentfiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, theregistrant’s internal control over financial reporting; and5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to theregistrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonablylikely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controlover financial reporting. Date: February 27, 2019 /s/ Thomas B. Neff Thomas B. Neff Chairman of the Board and Chief Executive Officer (Principal Executive Officer) Exhibit 31.2CERTIFICATIONI, Pat Cotroneo, certify that;1. I have reviewed this annual report on Form 10-K of FibroGen, Inc.;2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make thestatements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financialcondition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined inExchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in the Exchange Act Rules 13a-15(f) and 15d-15(f)) forthe registrant and have:(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, toensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities,particularly during the period in which this report is being prepared;(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under oursupervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposesin accordance with generally accepted accounting principles;(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about theeffectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recentfiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, theregistrant’s internal control over financial reporting; and5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to theregistrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonablylikely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controlover financial reporting. Date: February 27, 2019 /s/ Pat Cotroneo Pat Cotroneo Senior Vice President, Finance and Chief FinancialOfficer (Principal Financial Officer) Exhibit 32.1CERTIFICATIONPursuant to the requirement set forth in Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Section 1350 ofChapter 63 of Title 18 of the United States Code (18 U.S.C. §1350), Thomas B. Neff, Chief Executive Officer of FibroGen, Inc. (the “Company”), and PatCotroneo, Chief Financial Officer of the Company, each hereby certifies that, to the best of his knowledge:1.The Company’s Annual Report on Form 10-K for the year ended December 31, 2018 (the “Annual Report”), to which this Certification is attached asExhibit 32.1, fully complies with the requirements of Section 13(a) or Section 15(d) of the Exchange Act, and2.The information contained in the Annual Report fairly presents, in all material respects, the financial condition and results of operations of theCompany.In Witness Whereof, the undersigned have set their hands hereto as of the 27th day of February, 2019. /s/ Thomas B. Neff /s/ Pat CotroneoThomas B. NeffChairman of the Board and Chief Executive Officer Pat CotroneoSenior Vice President, Finance and Chief Financial OfficerThis certification accompanies the Form 10-K to which it relates, is not deemed filed with the Securities and Exchange Commission and is not to beincorporated by reference into any filing of FibroGen, Inc. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended(whether made before or after the date of the Form 10-K), irrespective of any general incorporation language contained in such filing. 

Continue reading text version or see original annual report in PDF format above