Xu v. FibroGen, Inc.

• Court: District Court, N.D. California
• Decided: February 13, 2024
• Docket: 3:21-cv-02623
• Status: Unknown

Opinion

1 SAXENA WHITE P.A. David R. Kaplan (SBN 230144) 2 dkaplan @ saxenawhite.com 3 Emily Bishop (SBN 319383) ebishop @ saxenawhite.com 4 505 Lomas Santa Fe Drive, Suite 180 Solana Beach, CA 92075 5 Tel.: (858) 997-0860 6 Fax: (858) 369-0096

7 Counsel for Lead Plaintiffs Employees’ Retirement System of the City of Baltimore, City of 8 Philadelphia Board of Pensions and Retirement, and Plymouth County Retirement Association, and 9 Lead Counsel for the Settlement Class 10 11 UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA 12 IN RE FIBROGEN, INC., SECURITIES Case No. 3:21-cv-02623-EMC 13 || LITIGATION 14 CLASS ACTION 15 ORDER PRELIMINARILY APPROVING SETTLEMENT AND PROVIDING FOR NOTICE 16 Hearing Date: January 23, 2024 17 Time: 2:30 p.m. 18 Courtroom: 5 — 17" Floor Judge: Hon. Edward M. Chen 19 20 21 22 23 24 25 26 27 28 [PROPOSED] ORDER PRELIM. APPR.

1 WHEREAS, a consolidated class action is pending in this Court entitled In re FibroGen, 2 || Inc., Securities Litigation, Case No. 3:21-cv-02623-EMC (N.D. Cal.) (the “Action”); 3 WHEREAS, by order dated August 30, 2021, this Court appointed Employees’ Retirement 4 || System of the City of Baltimore, City of Philadelphia Board of Pensions and Retirement, and 5 || Plymouth County Retirement Association (“Lead Plaintiffs”) as Lead Plaintiffs and Saxena White 6 || P.A. (‘Saxena White”) as Lead Counsel (ECF No. 75); 7 WHEREAS, on November 19, 2021, Lead Plaintiffs filed their Corrected Consolidated 8 || Class Action Complaint for Violations of the Federal Securities Laws (ECF No. 97); 9 WHEREAS, Lead Plaintiffs, on behalf of themselves and the Settlement Class (defined 10 below), and Defendants FibroGen, Enrique Conterno, James A. Schoeneck, Mark Eisner, Pat 11 || Cotroneo, and K. Peony Yu (collectively, “Defendants”) have entered into a Stipulation and 12 || Agreement of Settlement (the “Stipulation” or “Settlement Agreement”), subject to approval of 13 || this Court (the “Settlement’); 14 WHEREAS, Lead Plaintiffs have made an application, pursuant to Rule 23 of the Federal 15 || Rules of Civil Procedure, for an order preliminarily approving the Settlement in accordance with 16 || the Stipulation, allowing notice to Settlement Class Members, as more fully described herein, and 17 || certifying a Settlement Class defined as “all persons who purchased or acquired FibroGen 18 securities, including options, between December 20, 2018 through July 15, 2021, inclusive” (the 19 || “Settlement Class Period”); 20 WHEREAS, the Court has read and considered: (a) Lead Plaintiffs’ motion for preliminary 21 approval of the Settlement, and the papers filed and arguments made in connection therewith; and 22 || (b) the Stipulation and the exhibits attached thereto; and 23 WHEREAS, unless otherwise defined herein, all capitalized words contained herein shall 24 || have the same meanings as they have in the Stipulation; 25 NOW THEREFORE, IT IS HEREBY ORDERED: 26 1. Class Certification for Settlement Purposes: Pursuant to Rules 23(a) and (b)(3) 27 || of the Federal Rules of Civil Procedure, the Court certifies, solely for purposes of effectuating the 28 || proposed Settlement, a Settlement Class consisting of all persons who purchased or acquired ORDER PRELIM. APPR. STLMT. ANC 1

1 FibroGen securities, including options, between December 20, 2018 through July 15, 2021, 2 inclusive. Excluded from the Settlement Class are: (1) Defendants; (2) the Officers or directors of 3 || FibroGen during the Settlement Class Period; (3) the Immediate Family members of any 4 || Defendant or any Officer or director of FibroGen during the Settlement Class Period; and (4) any 5 entity that any Defendant owns of controls, or owned or controlled, during the Settlement Class 6 || Period. Also excluded from the Settlement Class are those persons who submit valid and timely 7 || requests for exclusion in accordance with the provision below, and plaintiffs in the Opt-Out 8 || Action. 9 2. Class Findings: Solely for purposes of the proposed Settlement of this Action, the 10 || Court finds that each element required for certification of the Settlement Class pursuant to Rule 11 23 of the Federal Rules of Civil Procedure has been met: (a) the members of the Settlement Class 12 || are so numerous that their joinder in the Action would be impracticable; (b) there are questions of 13 || law and fact common to the Settlement Class which predominate over any individual questions; 14 || (c) the claims of Lead Plaintiffs in the Action are typical of the claims of the Settlement Class; (d) 15 || Lead Plaintiffs and Lead Counsel have and will fairly and adequately represent and protect the 16 interests of the Settlement Class; and (e) a class action is superior to other available methods for 17 || the fair and efficient adjudication of the Action. 18 3. In consideration of these factors, the Court previously granted class certification 19 for shareholders during the period of December 20, 2018, through April 6, 2021. Docket No. 20 224 at 32. In so holding, the Court determined that the class met the requirements of Rule 23(a) 21 and Rule 23(b)(3) (e.g., numerosity, commonality etc.). There is no reason to reconsider this 22 || finding There are two deviations regarding the proposed settlement class and the certified class 23 || in the Court’s certification order. Specifically, the proposed settlement class accounts for a 24 || longer class period (through July 15, 2021, inclusive); and (2) includes options holders as class 25 || members in addition to shareholders. These two deviations from the certified class definition do 26 || not undermine propriety of certification. 27 a) As to the extended class period, the settlement accounts for the Court’s prior 28 holding regarding the July 15, 2021 corrective disclosure; the previously excluded period is ORDER PRELIM. APPR. STLMT. ANC 2

1 subject to a 90% reduction to the loss calculation for class members who suffered a loss 2 connected to that disclosure. Settlement Agreement, Ex. A-1 at 17 n.4. Accordingly, the 3 terms of the settlement adequately incorporate the Court’s prior finding regarding the class 4 period. 5 b) As to the inclusion of options holders, the Lead Plaintiffs submit materials to 6 support the use of the proposed formula to calculate class-wide damages for these options 7 holders, addressing issues identified by this Court in its certification order. Specifically, 8 Plaintiffs’ expert, Mr. Walster describes his method of determining recovery for both call and 9 put options. See Docket No. 236, Declaration of Scott Walster (“Walster Decl.) [§ 19-22. 10 The formula measures the inflated stock price due to the alleged falsity by Defendants, as 11 reflected in the deflated amount of the stock price tied to a corrective disclosure, controlled 12 for market and industry factors. As such, the formula appears to be in line with the Plaintiffs’ 13 theory of recovery (fraud on the market) and is a legitimate basis for calculating class-wide 14 damages. See also In re Apple Inc. Sec. Litig., 2023 WL 2763952, at *2 (N.D. Cal. Mar. 28, 15 2023) (‘the [c]ourt finds that plaintiff has provided an adequate method of calculating 16 damages for options holders”); Levy v. Gutierrez, 448 F. Supp. 3d 46, 66-67 (D.N.H. 2019) 17 (where Mr. Coffman, Plaintiffs’ class certification expert in this Action, put forth a damages 18 model for options holders, “[t]he court finds that common issues will predominate over 19 individualized ones with respect to calculating damages incurred by options traders”). 20 Accordingly, the Court certifies the proposed class for settlement purposes. 21 4. The Court hereby reaffirms its prior finding that pursuant to Rule 23 of the Federal 22 || Rules of Civil Procedure, Lead Plaintiffs are adequate class representatives for the Settlement 23 || Class. The Court also reaffirms its appointment of Saxena White as Class Counsel, pursuant to 24} |} — A ' Courts have been willing to approve classes that are more expansive for settlement purposes than litigation in the 25 context of complex securities litigation. See, e.g., In re Finisar Corp. Sec. Litig., No. 5:11-cv-01252-EJD, 2019 WL 2247750, at **2-4, 7 (N.D. Cal. May 24, 2019) and Docket No. 204 at 1-2 (N.D. Cal. Oct. 1, 2020) (certifying 26 settlement class after denying motion to certify a class, denying motion for reconsideration of this decision, and striking renewed motion for class certification after Ninth Circuit denied petition to appeal). This approach is 27 appropriate considering the policy considerations favoring settlement in class action securities litigations. Mandalevy v. Bofl Holding, Inc., 2022 WL 4474263, at *3 (S.D. Cal. Sept. 26, 2022) (recognizing that there is a 28 “strong judicial policy that favors settlements, particularly where complex class action litigation is concerned”); Lea v. Tal Education Group, 2021 WL 5578665, at *4 (S.D.N.Y. Nov. 30, 2021) (similar). ORDER PRELIM. APPR. STLMT. ANC 3

1 || Rule 23(g) of the Federal Rules of Civil Procedure. 2 5. Preliminary Approval of the Settlement — Rule 23(e) states that “claims . . . [of] 3 || aclass proposed to be certified for purposes of settlement [] may be settled .. . only with the court’s 4 || approval.” Fed. R. Civ. P. 23(e). Because the Amended Settlement Agreement “would bind class 5 || members, the court may approve it only after a hearing and only on finding that it is fair, 6 || reasonable, and adequate after considering” a number of factors that derive from Federal Rule 7 23(e)(2). Id. The Rule-based factors to be considered include: (A) whether class representatives 8 || and counsel adequately represent the class; (B) whether the proposal was negotiated at an arm’s 9 || length; (C) whether the relief provided for the class is adequate (including considerations of sub- 10 || factors discussed below); and (D) whether the proposal treats class members equitably relative to 11 each other. See Fed. R. Civ. P. 23(e)(2). Additional factors include: (1) strength of the case; (2) 12 || risk of further litigation; (3) risk of maintaining class action status throughout trial; (4) amount 13 || offered in the settlement; (5) extent of discovery completed; (6) experience and views of counsel; 14 || (7) presence of a governmental participant; and (8) the reaction of class members to the proposed 15 settlement. Hanlon, 150 F.3d at 1026. In consideration of these factors the Court finds the 16 || Settlement to be fair, adequate, and reasonable. The following factors are most relevant to this 17 || finding. 18 a) First, the settlement was arrived at through a good-faith, non-collusive process. 19 || “An initial presumption of fairness is usually involved if the settlement is recommended by class 20 || counsel after arm’s-length bargaining.” Viceral v. Mistras Grp., Inc., 2016 WL 5907869, at *8 21 (N.D. Cal. Oct. 11, 2016) Gnternal quotation omitted); see also Rodriguez v. W. Publ'g Corp., 563 22 || F.3d 948, 965 (9th Cir. 2009) (“We put a good deal of stock in the product of an arms-length, non- 23 || collusive, negotiated resolution.”). “The assistance of an experienced mediator in the settlement 24 || process confirms that the settlement is non-collusive.” Satchell v. Fed. Exp. Corp., No. C 03-2659 25 SI, 2007 WL 1114010, at *4 (N.D. Cal. Apr. 13, 2007). Here, the parties arrived at settlement 26 after multiple rounds of mediation before Michelle Yoshida, Esq. Mot. at 6. Ms. Yoshida is 27 || regularly recognized as an experienced mediator. STAAR Surgical, 2017 WL 4877417, at *2 28 || (approving settlement where it was “the outcome of an arms-length negotiation conducted with ORDER PRELIM. APPR. STLMT. ANC 4

1 || the help of an experienced mediator Michelle Yoshida”); Kendall v. Odonate Therapeutics, 2022 2 WL 188364, at *6 (S.D. Cal. Jan. 18, 2022) (similar). The non-collusive nature of the negotiations 3 || and overall propriety of the settlement agreement is bolstered by the cap on attorney’s fees sought 4 || in the case. Specifically, the maximum fee provided for in the settlement is 25%, the benchmark 5 || rate in the circuit, which represents a negative lodestar multiplier of 0.5. See Yelp, 2023 WL 6 || 3063823, at *2 (“Not only is an upwards fee multiplier commonplace in complex class actions, 7 || but a multiplier of less than one suggests that the negotiated fee award is reasonable.”). 8 b) Second, the settlement amount equates to approximately 3.4% to 6.4% of the 9 || maximum damages. Motion at 13. The 3.4% figure is relative to the recovery if Plaintiffs 10 || prevailed on every issue and the class period remained the same ($818 million for shareholders 11 and $33 million for options holders). /d. The 6.4% figure is relative to damages if the actionable 12 || class period was limited (per credible arguments by Defendants) ($443 million for shareholders 13 || and $13 million for options holders). /d. Both figures include the assumption Plaintiffs would 14 || prevail on the issue of whether to net pre-class period gains when calculating damages and that 15 || option holders would be included in the class. Jd.” Using either figure, the range of recovery 16 || exceeds the median percentage of similar damages ranges for class action settlements in 2022, 17 || which is 1.7% to 4.3%, pursuant to a review and analysis of securities class action settlements in 18 || that year conducted by Cornerstone Research. Cornerstone Research, Securities Class Action 19 Settlements, 2022 Review and Analysis, at 4 (March 8, 2023), https://www.cornerstone.com/wp- 20 || content/uploads/2023/03/Securities-Class-Action-Settlements-2022-Review-and-Analysis.pdf. 21 || (‘Cornerstone Research”). Courts have also approved similar settlements as fair and reasonable. 22 || See, e.g., Wong v. Arlo Technologies, Inc., 2021 WL 1531171, at *9 (N.D. Cal. Apr. 19, 2021) 23 || (recovery of 2.35% “weighs in favor of approval”); Embark, 2023 WL 6276728, at *7 (granting 24 || preliminary approval to settlement recovering 1.1% of maximum damages); In re Broadcom 25 Corp. Sec. Litig., 2005 WL 8153007, at *6 (C.D. Cal. Sept. 14, 2005) (finding recovery of 2.7% 26 97 || 2 There is reason to doubt Plaintiffs will prevail on the issue regarding use of netting to calculate damages. See Jaffe Pension Plan v. Household Intern., Inc., 756 F.Supp.2d 928, 935 (N.D. IIL. 2010) (“out-of-pocket damages are 4g || limited to actual damages such that plaintiffs’ losses must be netted against any of their profits attributable to the same fraud”). ORDER PRELIM. APPR. STLMT. ANC 5

1 consistent with the average recovery in securities class actions). The total settlement amount 2 || $28.5 million, also ranks in the top 31% of class action settlements from 2022 and exceeds the 3 median recovery size of $9 million for settlements between 2013 and 2022, and a $7.6 median 4 recovery size for the Ninth Circuit. See Cornerstone Research at 7, 19. Thus, the settlement 5 || amount supports approval in this case. 6 c) Third, the settlement discount is warranted by merits-based risks presented in 7 || litigation, including challenges to falsity of statements, scienter, and loss causation. Moreover, 8 || there is a particularly acute risk that Plaintiffs will not be able to recover at all if litigation 9 || continues because of Defendants’ financial circumstances. The company’s Form 10-Q reported 10 || $121 million in cash and cash equivalents with a net loss of $228 million. Lead Plaintiffs also 11 || represent that the company also does not have another major drug in the works that could help it 12 || become profitable, based on publicly available information. The primary pool of funds 13 || remaining is from the company’s Director’s and Officer’s insurance, a wasting policy, is 14 || deteriorating due to legal fees. See Motion at 17-18. Accordingly, the longer litigation 15 || proceeded the less money would be available for the class. This weighs in favor of approval. 16 See Guevoura Fund Ltd. v. Sillerman, 2019 WL 6889901, at *8 (S.D.N.Y. Dec. 18, 2019) 17 || (Here, the D&O [I]nsurance coverage is a wasting asset as it pays legal fees of the [] 18 || Defendants, as providing coverage for the claims asserted in the Action”; “each day that the 19 || Action was not settled would take away money available for the Class for settlement.”); Embark, 20 || 2023 WL 6276728, at *7 (granting preliminary approval to settlement recovering 1.1% of 21 || damages “as [d]efendants’ tenuous financial position warranted settlement”); Velti, 2015 WL 22 || 468329, at *6 (finding company’s precarious “financial condition...highlights the reasonableness 23 of the settlement amount ); Brown v. China Integrated Energy Inc., 2016 WL 11757878, at *7 24 || (C.D. Cal. July 22, 2016) (settlement reasonable where company’s only domestic “asset is its 25 || Directors and Officers Insurance Policy—an eroding policy that decreases as it pays defense 26 || costs, leaving less available to satisfy any judgment”); Immune Response, 497 F. Supp. 2d at 27 1172 (finding “significant collectability issues” when company “had no money to fund a 28 || judgment or settlement [and] the only available source of funds was wasting insurance policies” ORDER PRELIM. APPR. STLMT. ANC 6

1 supported settlement). 2 d) Finally, there is a side agreement between parties allowing (but not requiring) 3 || Defendants to withdraw from the settlement if class members representing a certain amount of 4 || FibroGen common stock request exclusion from the class. This type of agreement is not 5 || uncommon in securities class actions and has some benefits in preventing unfair outcomes; it 6 || alone does not negate approval. See, e.g., Hefler v. Wells Fargo & Co., 2018 WL 4207245, at 7 || *11 (N.D. Cal. Sept. 4, 2018) (“The existence of a termination option triggered by the number of 8 || class members who opt out of the Settlement does not by itself render the Settlement unfair.”’); In 9 re Carrier IQ, Inc. Consumer Privacy Litig., 2016 WL 4474366, at *5 (N.D. Cal. Aug. 25, 2016) 10 || (Chen, J.) (“opt-out deals are not uncommon as they are designed to ensure than an objector 11 || cannot try to hijack a settlement in his or her own self-interest”). The terms of this agreement 12 || are not unreasonable. 13 6. In consideration of these factors and additional factors identified by Federal Rule 14 || 23 and Ninth Circuit precedent the Court hereby preliminarily approves the Settlement, as 15 embodied in the Stipulation, as being fair, reasonable, and adequate to the Settlement Class, 16 || subject to further consideration at the Settlement Hearing to be conducted as described below. 17 7. Settlement Hearing — The Court will hold a settlement hearing (the “Settlement 18 || Hearing”) on May 16, 2024 at 1:30 p.m. in Courtroom 5 — 17" Floor, of the San Francisco 19 Courthouse, 450 Golden Gate Avenue, San Francisco, CA 94102, for the following purposes: (a) 20 || to determine whether the proposed Settlement on the terms and conditions provided for in the 21 Stipulation is fair, reasonable, and adequate to the Settlement Class, and should be approved by 22 || the Court; (b) to determine whether the Judgment attached as Exhibit B to the Stipulation should 23 || be entered dismissing the Action with prejudice against Defendant Releasees; (c) to determine 24 || whether the proposed Plan of Allocation for the proceeds of the Settlement is fair and reasonable 25 || and should be approved; (d) to determine whether the motion by Lead Counsel for an award of 26 || attorneys’ fees and reimbursement of Litigation Expenses should be approved; and (e) to consider 27 || any other matters that may be properly brought before the Court in connection with the Settlement. 28 || Notice of the Settlement and the Settlement Hearing shall be given to Settlement Class Members ORDER PRELIM. APPR. STLMT. ANC 7

1 as set forth in paragraph 7 of this Order. 2 8. The Court may adjourn the Settlement Hearing without further notice to the 3 || Settlement Class, and may approve the proposed Settlement with such modifications as the Parties 4 || may agree to in writing, if appropriate, without further notice to the Settlement Class. 5 9. Retention of Claims Administrator and Manner of Giving Notice — Lead 6 || Counsel is hereby authorized to retain JND Legal Administration (the “Claims Administrator”) to 7 supervise and administer the notice procedure in connection with the proposed Settlement as well 8 || as the processing of Claims as more fully set forth below. Notice of the Settlement and the 9 || Settlement Hearing shall be given by Lead Counsel as follows: 10 a) on or before February 23, 2024 (within ten (10) calendar days of the date 11 of entry of this Order), FibroGen shall provide or cause to be provided to the Claims Administrator 12 (at no cost to the Settlement Fund, Lead Counsel or the Claims Administrator) records reasonably 13 || available to FibroGen or its transfer agent concerning the identity and last known address, and 14 email address where available, of Settlement Class Members, in electronic form or other form as 15 || is reasonably available to FibroGen or its transfer agent, which information the Claims 16 || Administrator shall treat and maintain as confidential; 17 b) on or before March 4, 2024 (not later than twenty (20) calendar days of the 18 || entry of this Order, i.e., the “Notice Date”), the Claims Administrator shall cause a copy of the 19 Notice and the Claim Form, substantially in the forms attached hereto as Exhibits A-1 and A-2, 20 || respectively (the “Notice Packet”), to be mailed by first-class mail to potential Settlement Class 21 Members at the addresses set forth in the records which FibroGen caused to be provided, and by 22 || e-mail to potential Settlement Class Members for whom an e-mail address is provided, or who 23 || otherwise may be identified through further reasonable effort; 24 Cc) contemporaneously with the mailing of the Notice Packet, the Claims 25 || Administrator shall cause copies of the Notice and the Claim Form to be posted on a website to be 26 developed for the Settlement, from which copies of the Notice and Claim Form can be 27 || downloaded; 28 d) on or before March 18, 2024 (not later than ten (10) business days after the ORDER PRELIM. APPR. STLMT. ANC 8

1 Notice Date), the Claims Administrator shall cause the Summary Notice, substantially in the form 2 || attached hereto as Exhibit A-3, to be published once in /nvestor’s Business Daily and to be 3 || transmitted once over the PR Newswire; and 4 e€) not later than May 2, 2024 (not alter than fourteen (14) calendar days prior 5 to the Settlement Hearing), Lead Counsel shall file with the Court proof, by affidavit or declaration, 6 || of such mailing and publication. 7 10. Approval of Form and Content of Notice — The Court (a) approves, as to form 8 and content, the Notice, the Claim Form, and the Summary Notice, attached hereto as Exhibits A- 9 1, A-2, and A-3, respectively, and (b) finds that the mailing and distribution of the Notice and 10 || Claim Form and the publication of the Summary Notice in the manner and form set forth in 11 || paragraph 7 of this Order (4) is the best notice practicable under the circumstances; (11) constitutes 12 || notice that is reasonably calculated, under the circumstances, to apprise Settlement Class Members 13 || of the pendency of the Action, of the effect of the proposed Settlement (including the Releases to 14 || be provided thereunder), of Lead Plaintiffs’ motion for an award of attorneys’ fees and 15 || reimbursement of Litigation Expenses, of their right to object to the Settlement, the Plan of 16 || Allocation or Lead Plaintiffs’ motion for attorneys’ fees and reimbursement of Litigation 17 || Expenses, of their right to exclude themselves from the Settlement Class, and of their right to 18 || appear at the Settlement Hearing; (iii) constitutes due, adequate and sufficient notice to all persons 19 || and entities entitled to receive notice of the proposed Settlement; and (iv) satisfies the requirements 20 of Rule 23 of the Federal Rules of Civil Procedure, the United States Constitution (including the 21 Due Process Clause), the Private Securities Litigation Reform Act of 1995, 15 U.S.C. § 78u-4, as 22 || amended, and all other applicable laws and rules. The date and time of the Settlement Hearing 23 shall be included in the Notice and Summary Notice before they are mailed and published, 24 || respectively. 25 11. Nominee Procedures — Brokers and other nominees who purchased or otherwise 26 || acquired FibroGen common stock during the Settlement Class Period for the benefit of another 27 || person or entity shall either (a) within seven (7) calendar days of receipt of the Notice, request 28 || from the Claims Administrator sufficient copies of the Notice Packet to forward to all such ORDER PRELIM. APPR. STLMT. ANC 9

1 || beneficial owners, and within seven (7) calendar days of receipt of those Notice Packets, forward 2 || them to all such beneficial owners; or (b) within seven (7) calendar days of receipt of the Notice, 3 send a list of the names and addresses, and email addresses where available, of all such beneficial 4 || owners to the Claims Administrator, in which event the Claims Administrator shall promptly mail 5 || and email the Notice Packet when an email is available to such beneficial owners. Upon full 6 || compliance with this Order, such nominees may seek reimbursement of their reasonable expenses 7 ‘|| actually incurred in complying with this Order by providing the Claims Administrator with proper 8 || documentation supporting the expenses for which reimbursement is sought, up to a maximum of 9 || $0.10 per name and address provided to the Claims Administrator; mailing of the Notice and Claim 10 || Form up to $0.50 per unit, plus postage; or emailing of the Notice and Claim Form up to $0.05 per 11 || email. Such properly documented expenses incurred by nominees in compliance with the terms of 12 || this Order shall be paid from the Settlement Fund, with any disputes as to the reasonableness or 13 || documentation of expenses incurred subject to review by the Court. 14 12.‘ Participation in the Settlement — Settlement Class Members who wish to 15 || participate in the Settlement and to be potentially eligible to receive a distribution from the Net 16 || Settlement Fund must complete and submit a Claim Form in accordance with the instructions 17 contained therein. Unless the Court orders otherwise, all Claim Forms must be postmarked or 18 submitted online no later than June 12, 2024 (one hundred (100) calendar days after the Notice 19 || Date). Notwithstanding the foregoing, Lead Counsel may, at their discretion, accept for processing 20 || late Claims provided such acceptance does not delay the distribution of the Net Settlement Fund 21 to the Settlement Class. By submitting a Claim, a person or entity shall be deemed to have 22 submitted to the jurisdiction of the Court with respect to his, her, or its Claim and the subject matter 23 || of the Settlement. 24 13. Each Claim Form submitted must satisfy the following conditions: (a) it must be 25. || properly completed, signed, and submitted in a timely manner in accordance with the provisions 26 || of the preceding paragraph; (b) it must be accompanied by adequate supporting documentation for 27 || the transactions and holdings reported therein, in the form of broker confirmation slips, broker 28 account statements, an authorized statement from the broker containing the transactional and ORDER PRELIM. APPR. STLMT. ANC 10

1 holding information found in a broker confirmation slip or account statement, or such other 2 || documentation as is deemed adequate by Lead Counsel or the Claims Administrator; (c) if the 3 || person executing the Claim Form is acting in a representative capacity, a certification of his, her, 4 || or its current authority to act on behalf of the Settlement Class Member must be included in the 5 Claim Form to the satisfaction of Lead Counsel or the Claims Administrator; and (d) the Claim 6 || Form must be complete and contain no material deletions or modifications of any of the printed 7 || matter contained therein, and must be signed under penalty of perjury. 8 14. Any Settlement Class Member who or which does not timely and validly submit a 9 || Claim Form or whose Claim is not otherwise approved by the Court: (a) shall be deemed to have 10 waived his, her, or its right to share in the Net Settlement Fund; (b) shall be forever barred from 11 || participating in any distributions therefrom; (c) shall be bound by the provisions of the Stipulation 12 and the Settlement and all proceedings, determinations, orders, and judgments in the Action 13 || relating thereto, including, without limitation, the Judgment and the Releases provided for therein, 14 || whether favorable or unfavorable to the Settlement Class; and (d) shall be permanently barred from 15 || commencing, maintaining, or prosecuting any of the Released Plaintiffs’ Claims against any of the 16 || Defendant Releasees, as more fully described in the Stipulation and Notice. Notwithstanding the 17 || foregoing, late Claim Forms may be accepted for processing as set forth in paragraph 10 above. 18 15. Exclusion From the Settlement Class — Any member of the Settlement Class who 19 wishes to exclude himself, herself, or itself from the Settlement Class must request exclusion in 20 || writing within the time and in the manner set forth in the Notice, which shall provide that: (a) any 21 such request for exclusion from the Settlement Class must be mailed or delivered such that it is 22 || received no later than April 18, 2024 (twenty-eight (28) calendar days prior to the Settlement 23 Hearing), to: Exclusions, In re FibroGen, Inc., Securities Litigation, c/o JND Legal 24 Administration, P.O. Box 91482, Seattle, WA 98111, and (b) each request for exclusion must 25 || () state the name, address, and telephone number of the person or entity requesting exclusion, and 26 || in the case of entities, the name and telephone number of the appropriate contact person; (ii) state 27 || that such person or entity “requests exclusion from the Settlement Class in In re FibroGen, Inc., 28 Securities Litigation, Case No. 3:21-cv-02623-EMC’”, (iii) state the number of FibroGen securities ORDER PRELIM. APPR. STLMT. ANC 11

1 that the person or entity requesting exclusion purchased/acquired and sold during the Settlement 2 || Class Period, as well as the dates and prices of each such purchase/acquisition and sale, and the 3 || number of securities held at the beginning of the Settlement Class Period; and (iv) be signed by 4 || the person or entity requesting exclusion or an authorized representative. A request for exclusion 5 shall not be effective unless it provides all the required information and is received within the time 6 || stated above, or is otherwise accepted by the Court. 7 16. Any person or entity who or which timely and validly requests exclusion in 8 || compliance with the terms stated in this Order and is excluded from the Settlement Class shall not 9 be a Settlement Class Member, shall not be bound by the terms of the Settlement or any orders or 10 || judgments in the Action, and shall not receive any payment out of the Net Settlement Fund. 11 17. Any Settlement Class Member who or which does not timely and validly request 12 exclusion from the Settlement Class in the manner stated herein: (a) shall be deemed to have 13 waived his, her or its right to be excluded from the Settlement Class; (b) shall be forever barred 14 || from requesting exclusion from the Settlement Class in this or any other proceeding; (c) shall be 15 || bound by the provisions of the Stipulation, the Settlement, and all proceedings, determinations, 16 orders and judgments in the Action relating to the Settlement, including, but not limited to, the 17 || Judgment, and the Releases provided for therein whether favorable or unfavorable to the 18 || Settlement Class; and (d) shall be barred from commencing, maintaining or prosecuting any of the 19 || Released Claims against any of the Defendant Releasees, as more fully described in the Stipulation 20 || and Notice. 21 18. Appearance and Objections at Settlement Hearing — Any Settlement Class 22 || Member who or which does not request exclusion from the Settlement Class may enter an 23 appearance in the Action, at his, her, or its own expense, individually or through counsel of his, 24 || her, or its own choice, by filing (electronically or in person), or sending by mail such notice to the 25 || address below in paragraph 17, with the Court such that it is received not later than April 18, 2024 26 || (twenty-eight (28) calendar days before the Settlement Hearing) or as the Court may otherwise 27 || direct. Any Settlement Class Member who or which does not enter an appearance will be 28 || represented by Lead Counsel. ORDER PRELIM. APPR. STLMT. ANC 12

1 19. Any Settlement Class Member who does not request exclusion from the Settlement 2 || Class may file a written objection to the proposed Settlement, the proposed Plan of Allocation, or 3 || Lead Plaintiffs’ motion for an award of attorneys’ fees and reimbursement of Litigation Expenses 4 || and appear and show cause, if he, she, or it has any cause, why the proposed Settlement, the 5 || proposed Plan of Allocation or Lead Plaintiffs’ motion for attorneys’ fees and re1mbursement of 6 Litigation Expenses should not be approved; provided, however, that no Settlement Class Member 7 shall be heard or entitled to contest the approval of the terms and conditions of the proposed 8 || Settlement, the proposed Plan of Allocation, or the motion for attorneys’ fees and reimbursement 9 || of Litigation Expenses unless that person or entity has filed (electronically or in person) or has 10 || sent by mail to the address below a written objection with the Court such that it is received no later 11 || than April 18, 2024. 12 Clerk of the Court 13 Class Action Clerk United States District Court 14 450 Golden Gate Avenue Is San Francisco, CA 94102-3489

16 20. Any Settlement Class Member who does not request exclusion from the Settlement

7 Class, and who has properly filed an objection pursuant to paragraph 17 above, may enter an

13 appearance in the Action, at his, her, or its own expense, individually or through counsel of his, 19 her, or its own choice, by filing with the Clerk of the Court a notice of appearance, in the same

manner as set forth in paragraph 17 above, such that it is received no later than April 18, 2024, or

as the Court may otherwise direct. Any Settlement Class Member who does not enter an

9 appearance will be represented by Lead Counsel.

74 21. Any objections, filings and other submissions by the objecting Settlement Class

Member: (a) must state the name, address, and telephone number of the person or entity objecting 95 and must be signed by the objector; (b) must contain a statement of the Settlement Class Member’s

06 objection or objections, and the specific reasons for each objection, including any legal and

evidentiary support the Settlement Class Member wishes to bring to the Court’s attention; and

(c) must include documents sufficient to prove membership in the Settlement Class, including the ORDER PRELIM. APPR. STLMT. ANC 13

1 number of FibroGen securities that the objecting Settlement Class Member purchased/acquired 2 and sold during the Settlement Class Period, as well as the dates and prices of each such 3 || purchase/acquisition and sale, and the number of securities held at the beginning of the Settlement 4 || Class Period, and must be accompanied by adequate supporting documentation for the transactions 5 || and holdings reported therein, in the form of broker confirmation slips, broker account statements, 6 || an authorized statement from the broker containing the transactional and holding information 7 found in a broker confirmation slip or account statement. Objectors who enter an appearance and 8 || desire to present evidence at the Settlement Hearing in support of their objection must include in 9 || the written objection or notice of appearance the identity of any witnesses they may call to testify 10 || and any exhibits they intend to introduce into evidence at the hearing. 11 22. Any Settlement Class Member who or which does not make his, her, or its objection 12 || in the manner provided herein shall be deemed to have waived his, her, or its right to object to any 13 || aspect of the proposed Settlement, the proposed Plan of Allocation, and Lead Plaintiffs’ motion 14 || for an award of attorneys’ fees and reimbursement of Litigation Expenses and shall be forever 15 || barred and foreclosed from objecting to the fairness, reasonableness, or adequacy of the 16 || Settlement, the Plan of Allocation, or the requested attorneys’ fees and Litigation Expenses, or 17 from otherwise being heard concerning the Settlement, the Plan of Allocation, or the requested 18 || attorneys’ fees and Litigation Expenses in this or any other proceeding. 19 23. Stay — Until otherwise ordered by the Court, the Court continues to stay all 20 || proceedings in the Action other than proceedings necessary to carry out or enforce the terms and 21 conditions of the Stipulation. 22 24. Settlement Fund — The contents of the Settlement Fund held by Huntington Bank, 23 for which Huntington Bank will serve as the Escrow Agent, shall be deemed and considered to be 24 || in custodia legis of the Court, and shall remain subject to the jurisdiction of the Court, until such 25 || time as they shall be distributed pursuant to the Stipulation or further order(s) of the Court. 26 25. Taxes — Lead Counsel are authorized and directed to prepare any tax returns and 27 || any other tax reporting form for or in respect to the Settlement Fund, to pay from the Settlement 28 || Fund any Taxes owed with respect to the Settlement Fund, and to otherwise perform all obligations ORDER PRELIM. APPR. STLMT. ANC 14

1 with respect to Taxes and any reporting or filings in respect thereof without further order of the 2 || Court in a manner consistent with the provisions of the Stipulation. 3 26. Termination of Settlement — If the Settlement is terminated as provided in the 4 || Stipulation, the Settlement is not approved, or the Effective Date of the Settlement otherwise fails 5 to occur, this Order shall be vacated, rendered null and void, and be of no further force and effect, 6 || except as otherwise provided by the Stipulation, and this Order shall be without prejudice to the 7 rights of Lead Plaintiffs, the other Settlement Class Members, and Defendants, and the Parties 8 || shall revert to their respective positions in the Action as of October 17, 2023, as provided in the 9 || Stipulation. 10 27. Use_of this Order — Neither this Order, the Stipulation (whether or not 11 consummated), including the exhibits thereto and the Plan of Allocation contained therein (or any 12 || other plan of allocation that may be approved by the Court), the Supplemental Agreement, and the 13 || documents prepared to effectuate this Settlement, the negotiations leading to the execution of the 14 || Stipulation, nor any proceedings taken pursuant to or in connection with the Stipulation, or 15 || approval of the Settlement (including any arguments proffered in connection therewith): 16 (a) shall be (i) offered against any of the Defendant Releasees as evidence of, or construed 17 as, or deemed to be evidence of any presumption, concession, or admission by any of the Defendant Releasees with respect to, (aa) the truth of any fact alleged by Lead Plaintiffs or 18 any Settlement Class Member; (bb) the validity of any claim that was or could have been 19 asserted in the Action or in any other litigation; (cc) the deficiency of any defense that has been or could have been asserted in this Action or in any other litigation; (dd) any liability, 20 negligence, fault, or other wrongdoing of any kind of any of the Defendant Releasees; or (ee) any damages suffered by Plaintiffs or the Settlement Class; or (ii) in any way referred 21 to for any other reason as against any of the Defendant Releasees, in any civil, criminal, or 0 administrative action or proceeding (including any arbitration), other than such proceedings as may be necessary to effectuate the provisions of the Stipulation; 23 (b) shall be (i) offered against any of the Plaintiff Releasees, as evidence of, or construed 24 as, or deemed to be evidence of any presumption, concession, or admission by any of the Plaintiff Releasees (aa) that any of their claims are without merit, that any of the Defendant 25 □ Releasees had meritorious defenses, or that damages recoverable under the Complaint 26 would not have exceeded the Settlement Amount; or (bb) with respect to any liability, negligence, fault, or wrongdoing of any kind; or (ii) in any way referred to for any other 27 reason as against any of the Plaintiff Releasees, in any civil, criminal, or administrative 28 ORDER PRELIM. APPR. STLMT. ANC 15

1 action or proceeding (including any arbitration), other than such proceedings as may be necessary to effectuate the provisions of the Stipulation; or 2 (c) shall be construed against any of the Releasees as an admission, concession, or 3 presumption that the consideration to be given under the Settlement represents the amount which could be or would have been recovered after trial; provided, however, that if the 4 Stipulation is approved by the Court, the Parties and the Releasees and their respective counsel may refer to it to effectuate the protections from liability granted thereunder or 5 . otherwise to enforce the terms of the Settlement. 6 7 28. Supporting Papers — Lead Counsel shall file the opening papers in support of the

3 proposed Settlement, the Plan of Allocation, and Lead Counsel’s motion for an award of attorneys’ 9 fees and reimbursement of Litigation Expenses no later than April 4, 2024; and Lead Plaintiffs

10 and Lead Counsel are authorized to file reply papers, which shall be filed no later than May 2, 2024. 11 0 29. The Court retains jurisdiction to consider all further applications arising out of or

3 connected with the proposed Settlement.

SO ORDERED this 13th day of February, 2024. 15 Lx 16 See fr—n_____ The Homéfable Edward M. Chen 17 United States District Judge 18 19 20 21 22 23 24 25 26 27 28 ORDER PRELIM. APPR. STLMT. ANC 16