Be­lea­guered Zaf­gen crushed af­ter FDA de­mands force it to dump lead drug

Stymied at the FDA with a lin­ger­ing clin­i­cal hold on its lead obe­si­ty drug, Zaf­gen is dump­ing the ther­a­py and re­treat­ing to a pre­clin­i­cal pro­gram in the pipeline.

The biotech an­nounced af­ter the mar­ket closed on Tues­day that it will now cir­cle the wag­ons around ZGN-1061 af­ter be­lo­ranib was linked with the death of two pa­tients in a piv­otal study. Zaf­gen al­so says it will once again re­duce its ranks, chop­ping 34% of the sur­vivors and cut­ting the pay­roll to 31. The re­or­ga­ni­za­tion is claim­ing the jobs of Patrick Lous­tau, pres­i­dent, and Ali­cia Sec­or, chief com­mer­cial of­fi­cer.

Zaf­gen’s al­ready bat­tered shares plunged 50% by mid-morn­ing Wednes­day. Its shares have shed close to 90% of their 52-week high price, leav­ing the mar­ket cap at $93 mil­lion; less than the cash it has on hand.

Zaf­gen strug­gled might­i­ly for months to over­come its prob­lems, but ul­ti­mate­ly the biotech was over­whelmed af­ter a pa­tient died in their Phase III study for Prad­er-Willi syn­drome, which they de­ter­mined was caused by a pul­monary em­bolism. Sub­se­quent­ly an­oth­er pa­tient tak­ing the drug died, al­so from a pul­monary em­bolism, forc­ing the FDA to or­der a com­plete stop to any fur­ther dos­ing.

Zaf­gen cut its near-com­plete stud­ies short, rolling out pos­i­tive da­ta on weight loss and re­fo­cus­ing on rare dis­eases, but it was all for naught. Reg­u­la­tors weren’t in a for­giv­ing mood, or ready to let the de­vel­op­ment pro­gram con­tin­ue the way the biotech had pro­posed. The FDA didn’t fall­en in line with Zaf­gen’s plan to blaze a path for­ward with a new Phase III study tied to a risk mit­i­ga­tion strat­e­gy. In a call with an­a­lysts on Tues­day evening, CEO Tom Hugh­es said that while the agency ap­peared re­cep­tive to its risk mit­i­ga­tion strat­e­gy, reg­u­la­tors de­mand­ed more time for dis­cus­sion and looked for a longer Phase III that would “great­ly ex­tend” the time­line and cost need­ed to be­gin com­mer­cial­iza­tion work.

As is of­ten the case with Zaf­gen, ex­ecs spun the news hard, with Hugh­es dogged­ly in­sist­ing on the pos­i­tive as­pects of start­ing with a clean slate and a new drug. But Zaf­gen is mov­ing from a piv­otal stage back to a pre­clin­i­cal drug that has yet to be test­ed in hu­mans. Hugh­es in­sist­ed that 1061, which has on­ly been test­ed in an­i­mals, is sig­nif­i­cant­ly de-risked, a po­si­tion few ex­pe­ri­enced drug de­vel­op­ers would con­sid­er plau­si­ble, giv­en the ex­tra­or­di­nar­i­ly high rate of fail­ure for all pre­clin­i­cal pro­grams, let alone the spe­cial de­mands placed on any obe­si­ty drug.

Zaf­gen will still have to con­tend with an­gry in­vestors who watched the share price for the biotech plunge last year as com­pa­ny ex­ec­u­tives re­fused for sev­er­al days to say just why they had can­celled a planned road show. On­ly af­ter a pro­longed pause did the com­pa­ny re­veal that first death, still try­ing to de­ter­mine whether he was in the drug arm or the place­bo group. Sahm Ad­ran­gi’s Ker­ris­dale Cap­i­tal lat­er mount­ed a short at­tack on the wound­ed com­pa­ny, say­ing that be­lo­ranib had ze­ro chance of ever get­ting an ap­proval and was worth noth­ing more than what the com­pa­ny had in the bank, which they would prob­a­bly squan­der any­way.

An­a­lysts were left to sort through the wreck­age Wednes­day morn­ing. RBC’s Simos Sime­oni­dis de­cid­ed to dis­con­tin­ue cov­er­age of Zaf­gen and oth­er obe­si­ty-re­lat­ed biotechs — which have seen lit­tle that could be con­sid­ered pos­i­tive news in some time — and some oth­er skep­tics ad­just­ed their fore­casts for Zaf­gen’s shares to match the amount of cash the com­pa­ny still has in hand.

CEO Tom Hugh­es’ state­ment:

“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.”

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His­toric drug pric­ing re­forms pass; Pfiz­er ac­quires GBT; The long search for non-opi­oid pain drugs; and more

Welcome back to Endpoints Weekly, your review of the week’s top biopharma headlines. Want this in your inbox every Saturday morning? Current Endpoints readers can visit their reader profile to add Endpoints Weekly. New to Endpoints? Sign up here.

The Endpoints Weekly has officially crossed the 60,000 mark on subscribers — thanks to all of your support. As the editorial team grows, we’ve been able to do a lot more, with many of those on display this week. Be sure to check out Lei Lei Wu’s deep dive on pain R&D. If you missed it, you may also rewatch her companion panel here.

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Gold for adults, sil­ver for in­fants: Pfiz­er's Pre­vnar 2.0 head­ed to FDA months af­ter Mer­ck­'s green light

Pfizer was first to the finish line for the next-gen pneumococcal vaccine in adults, but Merck beat its rival with a jab for children in June.

Now, two months after Merck’s 15-valent Vaxneuvance won the FDA stamp of approval for kids, Pfizer is out with some late-stage data on its 20-valent shot for infants.

Known as Prevnar 20 for adults, Pfizer’s 20vPnC will head to the FDA by the end of this year for an approval request in infants, the Big Pharma said Friday morning. Discussions with the FDA will occur first and more late-stage pediatric trials are expected to read out soon, informing the regulatory pathway in other countries and regions.

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No­var­tis re­ports two pa­tient deaths af­ter treat­ment with Zol­gens­ma

Two children with spinal muscular atrophy have died after receiving Novartis’ Zolgensma, a gene therapy designed as a one-time treatment for the rare fatal disease.

The deaths, which resulted from acute liver failure, occurred in Russia and Kazakhstan, Novartis confirmed in a statement to Endpoints News. Having notified health authorities across all the markets where Zolgensma is available, it will update the drug label “to specify that fatal acute liver failure has been reported,” a spokesperson wrote.

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House pass­es his­toric drug pric­ing re­forms, lin­ing up decades-in-the-mak­ing win for Biden and De­moc­rats

The US House of Representatives today voted along party lines (all Dems voted for it), 220-207 to pass new, wide-ranging legislation that will allow Medicare drug price negotiations for the first time ever, and cap seniors’ drug expenses to $2,000 per year and seniors’ insulin costs at $35 per month.

Setting up a major victory for President Joe Biden, representatives returned from their summer recess to pass the Inflation Reduction Act, even as many noted the bill would only modestly reduce inflation.

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Senate Finance Committee Chair Ron Wyden (D-OR) (Francis Chung/E&E News/POLITICO via AP Images)

Sen­ate Fi­nance chair con­tin­ues his in­ves­ti­ga­tion in­to phar­ma tax­es with re­quests for Am­gen

Amgen is the latest pharma company to appear on the radar of Senate Finance Committee Chair Ron Wyden (D-OR), who is investigating the way pharma companies are using subsidiaries in low- or zero-tax countries to lower their tax bills.

Like its peers Merck, AbbVie and Bristol Myers Squibb, Wyden notes how Amgen uses its Puerto Rico operations to consistently pay tax rates that are substantially lower than the U.S. corporate tax rate of 21%, with an effective tax rate of 10.7% in 2020 and 12.1% in 2021.

FDA ap­proves sec­ond in­di­ca­tion for As­traZeneca and Dai­ichi's En­her­tu in less than a week

AstraZeneca and Daiichi Sankyo’s antibody-drug conjugate Enhertu scored its second approval in less than a week, this time for a subset of lung cancer patients.

Enhertu received accelerated approval on Thursday to treat adults with unresectable or metastatic non-small cell lung cancer (NSCLC) whose tumors have activating HER2 (ERBB2) mutations, and who have already received a prior systemic therapy.

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J&J to re­move talc prod­ucts from shelves world­wide, re­plac­ing with corn­starch-based port­fo­lio

After controversially spinning out its talc liabilities and filing for bankruptcy in an attempt to settle 38,000 lawsuits, Johnson & Johnson is now changing up the formula for its baby powder products.

J&J is beginning the transition to an all cornstarch-based baby powder portfolio, the pharma giant announced on Thursday — just months after a federal judge ruled in favor of its “Texas two-step” bankruptcy to settle allegations that its talc products contained asbestos and caused cancer. An appeals court has since agreed to revisit that case.

CSL is gathering its four business units under a unified brand identity strategy (Credit: CSL company site)

CSL brings Se­qirus, Vi­for un­der par­ent um­brel­la brand in iden­ti­ty re­vamp

CSL is gathering its brands under the family name umbrella, renaming its vaccine and newly acquired nephrology specialty businesses with the parent initials.

CSL Seqirus and CSL Vifor join CSL Plasma and CSL Behring as the four now uniformly branded business units of the global biopharma. The Seqirus vaccine division was formed in 2015 with the combination of bioCSL and its purchase of Novartis’ flu vaccine business. CSL picked up Vifor Pharma late last year in an $11.7 billion deal for the nephrology, iron deficiency and cardio-renal drug developer.

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