Forced to at least temporarily delay the clinical development of its obesity drug beloranib as it explores the reasons why a patient in a late-stage study died, Zafgen has decided to simply wrap up the randomized portion of two studies early and analyze the data it has now.
Two days after belatedly acknowledging the death of a patient in its Phase III study of the obesity drug beloranib, Zafgen put out word this morning that the FDA had imposed a partial clinical hold on the trials underway in the program. The hold will require added time to complete special patient screening, and the news blasted its already battered share price, which swiftly plunged 26%.
More than two days after Zafgen's 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.
With investors spooked at the sudden cancellation of an RBC Capital roadshow appearance slated for today, Zafgen's shares plunged 35% on Monday and another 7% on Tuesday morning.
Zafgen's in-development obesity treatment led to significant weight loss in patients with obesity triggered by a brain injury, meeting its goals and sending the biotech's shares up nearly 8%.
Zafgen charted a third major victory for its in-development obesity drug, spurring weight loss for patients who have endured brain injuries and stoking hopes for success in Phase III.
The market for biotech IPOs has largely cooled since a first-quarter explosion brought in more than $2 billion, but drug developers Zafgen and Ardelyx managed to turn back the clock in their debuts, cashing out for a combined $156 million.
Zafgen has been turning heads with some jaw-dropping results from its mid-stage studies for a promising new obesity drug. And now the biotech hopes to parlay its eye-catching, if risky, technology into an $86 million IPO.
Today, Cambridge, MA-based Zafgen said that it is banking $45 million from a Series E round, adding a group of new investors that includes RA Capital Management, Brookside Capital, Venrock, Alta Partners, an undisclosed blue chip investor and a private investor.
Promising results from early-stage work on Zafgen's weight drug beloranib clear a path to a Phase IIb trial that can fine-tune the dose while taking more time to gauge the long-term impact of its treatment on weight and set the right tone for ongoing talks with investors about a new financing round for the biotech.