Date: 2016-07-19
Type of information: Restructuring
Compound:
Company: Zafgen (USA - MA)
Therapeutic area: Metabolic diseases
Type agreement: restructuring
Action mechanism: methionine aminopeptidase 2 (MetAP2) inhibitor
Disease:
Details:
- • On July 19, 2016, Zafgen announced that, following a comprehensive review of its assets and clinical programs, as well as feedback from regulatory authorities, the company is refocusing its resources on development of a differentiated second-generation MetAP2 inhibitor, ZGN-1061, in severe and complicated obesity. Following clinical hold on its lead product beloranib 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.
- Zafgen is therefore suspending further development of beloranib in order to focus its resources on ZGN-1061. ZGN-1061, like beloranib, is a fumagillin-class MetAP2 inhibitor that was discovered by Zafgen's researchers as part of a multi-year 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, supporting the value of the compound as a more highly optimized MetAP2 inhibitor. Zafgen is preparing a Phase 1 clinical trial evaluating ZGN-1061 for safety, tolerability, and weight loss efficacy. The company plans to focus later-stage development of ZGN-1061 in severe and complicated obesity.
As part of the strategic restructuring, Zagfen plans to reorganize its operations to align with its new priorities focused on ZGN-1061 development. Zafgen's workforce is being reduced by approximately 34%, to a total of 31 employees, by December 2016. Zafgen expects the 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.
In addition, both Patrick Loustau, President, and Alicia Secor, Chief Commercial Officer, will be leaving the Company to pursue other opportunities.
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.
Financial terms:
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