In with ZGN-1061, out with beloranib

This follows what the company calls “a comprehensive review of its assets and clinical programs, as well as feedback from regulatory authorities,” and comes in the wake of the U.S. Food and Drug Administration (FDA) placing beloranib—Zafgen’s drug targeting Prader-Willi syndrome (PWS)—on full clinical hold in December 2015 after two deaths from pulmonary emboli in the bestPWS clinical trial.

“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 Dr. Thomas Hughes, president and CEO of Zafgen. “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.”

To address the clinical hold related to beloranib, Zafgen recently met with the FDA to discuss the clinical and preclinical data for beloranib as well as a proposed risk mitigation strategy for beloranib in PWS. Following its discussions with the FDA and review of other considerations, Zafgen has determined that the obstacles, costs and development timelines to obtain marketing approval for beloranib are too great to justify additional investment in the program, particularly given the promising emerging profile of ZGN-1061. The company is therefore suspending further development of beloranib for PWS in order to focus its resources on ZGN-1061. It even posted an open letter to the PWS community on its website—an apology of sorts—briefly explaining the decision and thanking the community for its commitment and support.

ZGN-1061, like beloranib, is a fumagillin-class MetAP2 inhibitor that was discovered by Zafgen’s researchers as part of a multiyear campaign to identify novel compounds that avoided limiting preclinical safety concerns observed with beloranib, including teratogenicity and effects on testicular function. The compound has similar efficacy, potency and range of activity in animal models of obesity as beloranib, but displays highly differentiated properties and a reduced potential to impact thrombosis. Zafgen is currently screening patients to initiate a Phase 1 clinical trial evaluating ZGN-1061 for safety, tolerability and weight loss efficacy over four weeks of treatment, and currently expects Phase 1 clinical data by the end of the first quarter of 2017. Based on the clinical data demonstrating beloranib’s significant effect on body weight and glycemic control in patients with severe obesity complicated by type 2 diabetes, Zafgen plans to focus later-stage development of ZGN-1061 in severe and complicated obesity.

With this decision also comes a cut in the workforce by roughly one-third, to be completed by December of this year. Zafgen expects this restructuring to result in approximately $4.8 million in reduced annualized workforce expenses once the plan is fully implemented. The company also expects to incur a non-recurring charge of approximately $2.4 million in the third quarter of 2016 related to the restructuring. At least two execs are also leaving: President Patrick Loustau and Chief Commercial Officer Alicia Secor.

“We would like to thank Patrick, Alicia and all of our employees for their hard work and dedication over the past several months as we explored every reasonable path to remove the full clinical hold on the beloranib IND and advance beloranib development,” said Hughes. “We would also like to express our deepest gratitude to the investigators, patients and families who participated in our beloranib trials.”

Zafgen ended June 30, 2016 with approximately $150.5 million in cash and cash equivalents, and now expects to end 2016 with greater than $125 million. The company believes that its current cash balance is sufficient to fund operations through the end of 2018, at which time it expects to have completed a Phase 2a clinical trial for ZGN-1061.