Thursday, October 15, 2015

Transparency 3

More than two days after Zafgen's ($ZFGN) stock started to get crushed under the heavy weight of speculation surrounding its sudden decision to cancel a roadshow presentation to investors, the biotech has finally revealed that a patient died in its late-stage study of its lead obesity drug for Prader-Willi syndrome.

Zafgen said in a terse statement that it has been in talks with the FDA about the death, which occurred in a group which suffers from a rare binge-eating disease.

Here's the statement: "Zafgen recently learned of a patient death which occurred in the company's ongoing double-blind, randomized, placebo-controlled Phase III bestPWS study of beloranib in Prader-Willi syndrome, a rare genetic disorder with a high rate of mortality linked to obesity and its co-morbidities. The cause of death remains unknown at this time. According to normal practice, the event was reported to the U.S. Food and Drug Administration, at which point the Agency initiated a discussion with the company. The company is working with the Agency to expedite a review and understanding of this event, and to determine implications of the event on the conduct of the trial, and anticipates providing an update as its discussions with the Agency progress. The thoughts of the company are with the family of the patient at this time. Zafgen remains committed to ensuring the safety of all patients enrolled in its studies."

In the course of Monday and Tuesday, Zafgen's shares lost more than 50% of their value as the company kept an uncomfortable silence, broken only by an earlier statement today refusing to comment on the share price plunge. The company did not respond to queries from FierceBiotech or other reporters in the field.

After the release, we queried the company's CFO on when the patient died and what day the FDA was alerted, but the executive did not respond.

The rumor mill got started this week after the company cancelled an appearance at an RBC Capital event. But it really cranked up after the company declined to tamp down the feverish reaction on the market, raising a considerable amount of discussion on Twitter about what could have gone wrong. Zafgen CEO Tom Hughes and other company insiders sold shares in the company just a couple of weeks ago at $42.53 per share. Today, the stock was selling at $17.50.
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1 comment:

  1. There’s no shortage of innovative approaches to helping people lose weight today, whether it’s filling space in the stomach to create an artificial sense of fullness, using neuromodulation to keep hunger at bay, or using online or mobile tracking tools. But this company is taking a different approach, aiming at the biological underpinnings of obesity with a drug that it thinks can restore balance to how the body stores and metabolizes fat in severely obese individuals.

    Cambridge, Massachusetts-based Zafgen Inc.’s lead product is beloranib, and it’s headed to phase 2 with a trial expected to start within the next two weeks, according to CEO Thomas Hughes. It will study the effectiveness of the drug in about 150 men and women over time.

    In a phase 1 trial that lasted 25 days, the drug delivered “robust data” showing “impressive improvements” in severely obese women, Hughes said. Beloranib was associated with weight loss and improvements in triglycerides, LDL cholesterol, waist circumference and diastolic blood pressure (PDF). This study will test whether those effects are sustained over time.

    Belanorib takes aim at the biological and metabolic changes in the way fat is stored and released in obese individuals. It was developed to inhibit the enzyme methionine aminopeptidase 2 to reduce the liver’s production of new fatty acid molecules and help convert stored fats into energy.

    Hughes said the $3 million in debt financing recently disclosed in a U.S. Securities and Exchange Commission filing was another installment of a $33 million C round from Atlas Ventures and Third Rock Ventures announced in July 2011 that will help the company get through the trial. In total, Zafgen has raised about $60 million, he said.

    It’s a little early to speak about Zafgen’s go-to-market strategy, Hughes said, but the 20-year Novartis AG veteran indicated that he’s been heartened by the U.S. Food and Drug Administration’s approval of Belviq and Qsymia earlier this summer after more than a decade of no new weight loss drug approvals.