FibroGen Inc filed SEC Form 8-K: Costs Associated with Exit or Disposal Activities
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Item 2.05 Costs Associated with Exit or Disposal Activities.
On August 2, 2024, FibroGen, Inc. (the “Company”) initiated a restructuring plan (the “Plan”) to lower the Company’s operating expenses in light of the negative pamrevlumab clinical trial data announced earlier that week. The Plan includes an expected reduction to the Company’s U.S. workforce of approximately 75% with 127 U.S. employees noticed on August 2, 2024.
The Company would like to extend its tremendous gratitude to these employees, not only for their contributions to the strong workforce and culture at FibroGen, but to their large part in the progress we have made, and continue to make, in science and the biotechnology industry.
The Company estimates that it will incur non-recurring charges in the range of $16-18 million in connection with the Plan, primarily consisting of severance payments, notice pay, accrued vacation, payroll tax and employee benefits contributions. The Company expects that the majority of the restructuring charges will be incurred in the second half of 2024 and that the implementation of the headcount reductions, including cash payments, will be substantially complete by the end of the first quarter of 2025.
Potential position eliminations are subject to legal requirements that vary by jurisdiction, which may extend this process beyond the first quarter of 2025 in certain cases. The charges that the Company expects to incur, and the savings obtained, are subject to a number of assumptions, including legal requirements in various jurisdictions, and actual expenses and savings may differ materially from the estimates disclosed above. The Company may incur additional costs not currently contemplated due to events that may occur as a result of, or that are associated with, the reduction.
Note Regarding Forward-Looking Statements
This Current Report on Form 8-K contains forward-looking statements as that term is defined in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements involve substantial risks and uncertainties. All statements other than statements of historical fact contained in this Form 8-K are forward-looking statements including statements relating to the Company’s plans, expectations, forecasts and future events. Such forward-looking statements include, but are not limited to, the potential of, and expectations regarding the Company’s business strategy, statements relating to the anticipated timing and details of the Plan and the expected impacts, charges and costs associated with the Plan that the Company expects to incur. In some cases, you can identify forward-looking statements by terminology such as “believe,” “estimate,” “intend,” “may,” “plan,” “potentially,” “will,” “expect,” “enable,” “likely” or the negative of these terms or other similar expressions. We have based these forward-looking statements largely on our current expectations and projections about future events and trends that we believe may affect our financial condition, results of operations, business strategy and financial needs. Actual events, trends or results could differ materially from the plans, intentions and expectations disclosed in these forward-looking statements based on various factors. Information regarding the foregoing and additional risks may be found in the section entitled “Risk Factors” in the Company’s most recent Annual and Quarterly Reports on Form 10-K and 10-Q filed with the Securities and Exchange Commission (the “SEC”), and the Company’s future reports to be filed with the SEC. These forward-looking statements are made as of the date of this 8-K, and the Company assumes no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those projected in the forward-looking statements, except as required by law.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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FIBROGEN, INC. |
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Date: |
August 7, 2024 |
By: |
/s/ Michael Lowenstein |
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Michael Lowenstein |