Dive Brief:
- Zafgen will shut down development of its main clinical candidate beloranib, designed to treat obesity related to Willi-Prader syndrome, and work on advancing another pre-clinical drug instead, the company announced Tuesday. As a result of the new focus, the company will also lay off 34% of its workforce to reduce costs.
- The clinical development program for beloranib had been on hold since December after two patients died of treatment-related pulmonary embolism. But the final decision to end development took place after a meeting with the Food and Drug Administration, according to the company.
- The announcement will come as a blow to the Willi-Prader community because of the lack of treatment options. Willi-Prader syndrome is a rare disease that leads to uncontrolled eating. Currently, the only treatment for the disease is human growth hormone (HGH).
Dive Insight:
“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 stated in its press release.
Zafgen will now operate with a much smaller staff of 31 workers. It had a modest $150.5 million in cash as of the end of June, which will now be dedicated to the development of a preclinical candidate (ZGN-1061), which seeks to treat a more generalized form of obesity.
"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," said Tom Hughes, Zafgen’s President and CEO.
Hughes anticipates that Zafgen has enough capital to fund operations through 2018, as well as to conduct mid-stage trials of ZGN-1061.
But that won't save Zafgen's stock, which dropped by nearly 50% on news of the restructuring and layoffs.