aibioFibroGen (now Kyntra Bio) completes $220 million China unit sale to AstraZeneca
Tickers KYNB
FibroGen used part of the proceeds to repay about $81 million of Morgan Stanley Tactical Value term loans. Pro forma total equity turns positive only with minority interests counted, while the stockholders' deficit attributable to FibroGen remains.
Key facts
- Company
- Kyntra Bio, Inc. (NASDAQ: KYNB)
- News type
- Mergers
- Primary source
- Kyntra Bio, Inc. 8-K (2025-09-05)
The sale and its terms
FibroGen, Inc. (now Kyntra Bio, Inc.) said it completed the sale of FibroGen International (Hong Kong) Ltd., together with its subsidiaries known as FibroGen China, to AstraZeneca Treasury Limited. The company announced the closing on September 2, 2025, and filed unaudited pro forma financial statements as Exhibit 99.1 to a Form 8-K.
Total consideration is approximately $220 million, subject to customary adjustments set out in the purchase agreement. That total is made up of $85 million in enterprise value and approximately $135 million in net cash held in China. Most of the headline figure is therefore cash held in China rather than payment for the business itself, which the exhibit values at $85 million of enterprise value.
At closing, the company also entered into a transition services agreement and other customary agreements with AstraZeneca.
Repaying the Morgan Stanley loans
FibroGen used part of the proceeds to repay its senior secured term loan facilities with Morgan Stanley Tactical Value, known as MSTV, for approximately $81 million at closing. The pro forma adjustments show $80.9 million paid to MSTV to clear a term loan of $73.7 million, accrued interest of $0.4 million, and a loss on debt extinguishments of $6.8 million.
The cash the company keeps from the sale is smaller than the headline. Cash received for the sale was $210.4 million, from which $7.7 million of transaction costs were paid at closing, including $2.2 million of accrued costs. The exhibit also books a $10.0 million receivable from AstraZeneca, on the assumption that no customary adjustment or indemnity claim follows closing. The exhibit does not show that the receivable has been paid. The company also recognizes $5.4 million payable to minority shareholders of FibroGen International (Cayman) Ltd. for a distribution triggered by the sale, and $1.1 million of severance for certain officers and employees.
The pro forma balance sheet
Recast as of June 30, 2025, as if the sale had closed that day, cash and cash equivalents would rise from $23,367 thousand to $145,026 thousand. Total assets would fall from $178,055 thousand to $162,170 thousand, and total liabilities would fall from $359,085 thousand to $137,598 thousand. The term loan balance of $73,733 thousand would fall to zero.
Total equity would move from a deficit of $202,510 thousand to a positive $3,092 thousand. That result rests on accounting entries. It includes an estimated gain of $73.4 million on the transaction and the release of $142.9 million of deferred revenue linked to FibroGen International. The stockholders' deficit attributable to FibroGen would still stand at $9,941 thousand, down from $222,997 thousand. The positive total depends on $13,033 thousand of nonredeemable non-controlling interests.
The 2024 results behind the balance sheet
The pro forma statement of operations for 2024 starts from total revenue of $29,621 thousand, including $27,673 thousand of drug product revenue, net. Research and development expense was $95,692 thousand, selling, general and administrative expense was $49,330 thousand, and the restructuring charge was $19,454 thousand. The loss from operations was $150,416 thousand.
Reported loss from continuing operations was $153,098 thousand, or $1.53 per share on 100,044 thousand weighted average shares. The pro forma figure is $159,109 thousand, or $1.59 per share. The only changes are a loss on debt extinguishments of $6.8 million and $0.8 million of other income from post-closing transition services.
The pro forma cash balance of $145,026 thousand is below the 2024 loss from operations of $150,416 thousand. The exhibit gives no operating results for 2025, so it does not show how long that cash would last.
What the exhibit does not establish
The company says its pro forma figures are not indicative of the results that would have occurred, or of the gain that would actually have been recognized. It describes its accounting as preliminary and says the final application of U.S. GAAP may differ. The adjustments may also differ from those used when the company reports the sale as discontinued operations in future filings.
Finally, the company says it does not expect a material income tax impact from the transactions, because it keeps a full valuation allowance on its deferred tax assets given its history of losses.