A battered Zafgen seeks strategic options, prophesying ongoing study will unlikely lift FDA hold on diabetes drug – Endpoints News

Zaf­gen, which back in 2015 crossed the $50 mark, is now firm­ly in pen­ny stock ter­ri­to­ry. Blight­ed by safe­ty con­cerns across a range of its ex­per­i­men­tal drugs — the Boston drug de­vel­op­er is now seek­ing strate­gic op­tions, in­clud­ing a pos­si­ble sale — pre­dict­ing da­ta from the on­go­ing in vi­vo study for its di­a­betes drug will not be enough to con­vince the FDA to lift its clin­i­cal hold on the pro­gram.

The com­pa­ny’s shares $ZFGN tum­bled more than 15% to 69 cents in ear­ly Thurs­day trad­ing.

Zaf­gen’s woes go back years. In 2016, Zaf­gen de­sert­ed its be­lo­ranib pro­gram af­ter the ex­per­i­men­tal obe­si­ty drug was linked to pa­tient deaths in a piv­otal study. The FDA, wor­ried about ex­pos­ing more pa­tients to harm, im­posed a clin­i­cal hold on Zaf­gen’s sec­ond-gen­er­a­tion (obe­si­ty-re­lat­ed) di­a­betes drug ZGN-1061 last No­vem­ber, wary that the car­dio threat posed by be­lo­ranib was still in play. This Ju­ly, fol­low­ing months of dis­cus­sion with the reg­u­la­tor, an in vi­vo an­i­mal study de­sign and pro­to­col for ZGN-1061 was agreed up­on — da­ta from this study is ex­pect­ed by the end of 2019.

“Based on pre­lim­i­nary re­sults from this study re­viewed this week, Zaf­gen does not present­ly ex­pect the da­ta to war­rant res­o­lu­tion of the clin­i­cal hold for ZGN-1061,” Zaf­gen said on Thurs­day. The com­pa­ny — which saw a string of man­age­r­i­al de­par­tures last year in­clud­ing CEO Tom Hugh­es, who had led the com­pa­ny for nine years, and board mem­ber Bruce Booth, who ex­it­ed af­ter a dozen years — is seek­ing al­ter­na­tives in­clud­ing an ac­qui­si­tion, merg­er, busi­ness com­bi­na­tion, in-li­cens­ing, or an­oth­er strate­gic trans­ac­tion in­volv­ing the com­pa­ny or its as­sets.

Ear­li­er this year, Zaf­gen was forced to con­tend with yet an­oth­er set­back. It’s ex­per­i­men­tal drug, ZGN-1258 — un­der de­vel­op­ment for rare cas­es of obe­si­ty brought on by rare ge­net­ic con­di­tion Prad­er-Willi syn­drome, which is char­ac­ter­ized by con­stant hunger — was slapped with a clin­i­cal hold by the FDA in March, even be­fore it hit the clin­ic. The hold em­anat­ed from da­ta that in­di­cat­ed mus­cle de­te­ri­o­ra­tion in a ro­dent mod­el of the dis­ease, which prompt­ed the com­pa­ny to sus­pend plans for an ap­pli­ca­tion to test the drug in hu­mans.

As of June 30, 2019, the com­pa­ny had cash, cash equiv­a­lents, and mar­ketable se­cu­ri­ties to­tal­ing $91.7 mil­lion, Zaf­gen dis­closed in Au­gust. In the sec­ond-quar­ter, the com­pa­ny re­port­ed a net loss of about $12 mil­lion.