With investors spooked at the sudden cancellation of an RBC Capital roadshow appearance, Zafgen's ($ZFGN) shares plunged 35% on Monday and another 29% today.
Rumors about potential trouble with the biotech's lead drug, beloranib, provided all the dry tinder needed to heat up speculation. A turbulent market has blasted a variety of biotech stocks, and investors seem ready to flee a stock at any sign of trouble--real or imagined.
Zafgen did not respond immediately to a query from FierceBiotech--or anyone else--Tuesday morning. And RBC's Simos Simeonidis didn't like the careful silence.
"We believe the reason that management hasn't been able to communicate with investors is that they're in possession of material information and they're in the process of getting ready to inform investors," notes the analyst. Beloranib is in Phase III for Prader-Willi syndrome, in which patients suffer from an uncontrolled appetite and severe obesity. It's also in two other Phase II studies.
(Editor's note: Late on Tuesday the company put out a simple "no comment" that will only heighten speculation about what is happening inside Zafgen. "We have received a number of inquiries from the investment community. As you are aware, we do not comment on share price movement or market speculation. We appreciate the concerns of our stakeholders. Zafgen remains committed to developing novel therapies to improve the health and well-being of patients affected by obesity and complex metabolic disorders.")