Zafgen Pinks Slips 34% of Workforce, Scraps Lead Obesity Drug After Deaths

Published: Jul 21, 2016

Zafgen Pinks Slips 34% of Workforce, Scraps Lead Obesity Drug After Deaths July 20, 2016
By Mark Terry, Breaking News Staff

After a lengthy clinical hold by the U.S. Food and Drug Administration (FDA), Boston-based Zafgen has decided to halt development of obesity drug beloranib, shift its focus to another obesity drug, ZGN-1061, and lay off 34 percent of its staff. In addition, two executives are leaving the company.

On Oct. 14, 2015, Zafgen announced that a patient had died during its Phase III trial of beloranib (ZAF-311) in patients with Prader-Willi Syndrome (PWS). On Dec. 2, 2015, it announced the death of a second patient. Both patients died from complications from pulmonary emboli. The FDA placed a clinical hold on the trial and discussions began on how—or if—the trial could continue.

Prader-Willi Syndrome is a rare genetic disorder which is the result of a deletion on chromosome 15. Its most prominent feature is insatiable appetite that leads to excessive eating and obesity. It also includes cognitive disabilities, behavioral problems, short stature, low muscle tone and incomplete sexual development.

PWS patients are at a higher risk of morbidity and mortality, with an approximate death rate of three percent per year compared to one percent per year for the general population. Childhood mortality in PWS patients is usually related to respiratory infection and high temperature. In adults with PWS, it is typically associated with circulatory or respiratory problems, as well as other health conditions related to severe obesity.

After talks with the FDA, Zafgen has opted to shift its resources to develop ZGN-1061, which would be developed for more broad obesity, as opposed to a PWS study.

“As the leader of the MetAP2 inhibitor field, we have spent many years validating the tremendous potential of this pathway for the treatment of complicated obesity with beloranib, which in multiple clinical trials demonstrated robust reductions in body weight, improvements in glycemic control, and other benefits related to cardiovascular disease risk,” said Thomas Hughes, president and chief executive officer of Zafgen, in a statement. “However, given the heightened complexity and future cost of beloranib development, balanced against the emerging product profile of ZGN-1061, we believe that the long-term opportunity for ZGN-1061 is more robust than for beloranib. Given our deep knowledge of this new and exciting drug class, and our strong cash position, we believe we are well-positioned to advance ZGN-1061 as a potential new treatment for prevalent obesity-related indications.”

As potential solutions to the beloranib trial, Zafgen discussed with the FDA the possibility of continuing the trial with the addition of an anticoagulant drug. Hughes told Xconomy that the FDA was open to that change, but it also wanted a “much longer placebo-controlled type of study than would be feasible for us to run.” There was also concerns about the steps needed to get the FDA’s clinical hold lifted.

The job cuts are expected to save about $4.8 million annually. After the layoffs, there will be 31 employees. The company’s president, Patrick Loustau, and chief commercial officer, Alicia Secor, are also leaving the company. The company had $150.5 million in cash at the end of June and projects $125 million by the end of the year. It believes that will provide enough funds to make it through 2018 and a mid-stage clinical trial of ZGN-1061.

At this stage, the only treatment for PWS is human growth hormone, which treats some of the symptoms, but not the appetite issues.

Meanwhile, ZGN-1061 hasn’t started clinical trials yet, and any chance of a product to sell is years away.

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