Déjà vu for Zafgen: Still fretting about lingering cardio concerns, FDA clamps a hold on lead obesity drug — shares plunge

Two years after Zafgen torched its lead obesity compound following an ugly crash in late-stage testing that cost lives, the FDA is still fretting whether the company is continuing to expose more people to harm.

The biotech reported today that the FDA has slapped a clinical hold on their MetAP2 drug ZGN-1061, worried that the cardio threat posed by their first-gem drug beloranib might still be in play. They plan to follow up with a face-to-face meeting, but there’s no clarity on how long their drug could be in limbo now.

Investors hated the sound of it. Zafgen’s shares cratered, plunging 46% shortly after the market opened Monday.

Zafgen’s shares $ZFGN — once over $40 — never revived after the plunge that occurred in the fall of 2015, when management initially stonewalled investors clamoring to find out what had prompted the company to abruptly drop out of a prominent investment conference. Back-to-back deaths, though, along with a clinical hold that led to a list of requirements for beloranib’s clinical development that Zafgen decided had created a hurdle too steep to clear, killed that effort.

According to their statement, Zafgen got the latest hold letter sometime last week.

The FDA cited the possibility of cardiovascular (CV) safety risk based on the Company’s prior compound and outlined multiple potential paths for moving forward, including nonclinical or clinical options, to address these concerns in the ongoing development of ZGN-1061. The Company plans to assess these options and request a Type A meeting with the Agency to discuss next steps with the program.

Tom Hughes

Despite the regulatory concerns in the US, Zafgen says it plans to soldier on with a dose-escalating Phase II study for ZGN-1061 in Europe, which is beyond the FDA’s reach.

Like their first drug beloranib, ZGN-1061 has demonstrated an ability to knock off a significant amount of weight. But the safety bar for a drug now guided toward diabetes is clearly very high.

Leerink’s Joseph Schwartz had this to say after the news hit:

As we previously highlighted in detail, preclinical data suggests that ZGN-1061 has the potential to induce clotting factors if it is not cleared. Despite a clean safety report card to date in a small Ph.2 study, our main concerns have stemmed from lack of disclosure about how the drug is metabolized and cleared, and the potential for drug-drug interactions that could delay the drug’s clearance when tested in a larger Ph.3 study of T2D patients, which we believe could have played into the FDA’s decision. How this decision will affect the overall timeline for this program is unknown, but the company plans on defining a path forward with regulators.

Over the last few months Zafgen has seen a big change at the top, with Tom Hughes leaving the company after leading it for 9 years — to take the CEO’s job at Navitor — just ahead of board member Bruce Booth. 

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Research Scientist - Immunology
Recursion Pharmaceuticals Salt Lake City, UT
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Atlas Venture Cambridge, MA

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