Zafgen banks $33M C round as it preps for Ph2 obesity study

Cambridge-based upstart Zafgen has rounded up $33 million in a third venture round as it sets out to prove in an upcoming mid-stage trial that it has a viable therapeutic alternative to bariatric surgery. Encouraged by signs of dramatic weight loss in Phase I, Zafgen's two venture backers--Atlas Venture and Third Rock--are financing the next step as the biotech designs a Phase II study that should wrap in 2013.

Zafgen CEO Tom Hughes is careful to draw some important distinctions between his company and a trio of developers--Vivus, Arena and Orexigen--which have been bedeviled by safety questions and regulatory demands as they pushed for approvals of their own weight-loss treatments over the past year. But in those cases the data backed single-digit drops in weight while Zafgen will focus on the severely obese, which still accounts for 18 million people in the U.S.

"By focusing on that population alone, we're highly differentiated from anything else out there," Hughes tells FierceBiotech. "Our therapy, we think, will drive more weight loss. We believe people will be healthier as a result of the treatment." Zafgen was named a Fierce 15 company in 2009.

Hughes says that investigators will recruit 100 people for Phase II, a figure that can be handled by an ultra-virtual company like Zafgen, which has three full-time employees. The staff is likely to double now, says Hughes, but there are no plans of building a large staff. Once Phase II data is in hand, he says, Zafgen's backers can decide whether to pursue a licensing pact or a possible M&A deal. And Zafgen has the potential to go it alone on a pivotal study for an orphan indication.

"Zafgen has a unique approach to tackling obesity by targeting imbalances in fat metabolism through MetAP2 inhibition," says Kevin Starr, a Third Rock partner. "The company's recent Phase Ib results showed that, in addition to rapid weight loss averaging 1 kg per week, a significant improvement in cardiovascular risk markers was seen in severely obese subjects."

- here's the Zafgen release

ALSO: New York-based Coronado Biosciences says that it rounded up $25.8 million in venture cash to fund a Phase II study of CNDO-201 for the treatment of Crohn's Disease and a Phase I/II study of CNDO-109 for the treatment of relapsed Acute Myeloid Leukemia. National Securities Corporation led the round. Release