Zafgen Scraps Another Prader-Willi Syndrome Drug Candidate

(RTTNews) - Shares of Zafgen Inc. (ZFGN) slumped more than 25% in after-hours Monday, following the Company's decision to suspend plans to file an investigational new drug application for ZGN-1258, a candidate for rare metabolic disorders including Prader-Willi syndrome.

The decision to suspend the development of ZGN-1258 was based on a recent, unexpected finding in muscle tissue in four- and six-month long-term rodent toxicology studies. There were degeneration and other anomalies in rat muscle tissue to different degrees in both vehicle and dose arms of the studies of ZGN-1258, according to the Company.

Prader-Willi syndrome is a rare and complex genetic disorder characterized by insatiable appetite in children that often leads to obesity and type 2 diabetes. There are no approved therapeutic options for this disorder.

In July 2016, the Company had suspended the development of Beloranib, a potential treatment for obesity in patients with Prader-Willi Syndrome, which was under phase III trial then, following two patient deaths. The two patients in the trial died of pulmonary embolism (blood clots in lungs).

The Company's lead drug candidate is ZGN-1061, a novel MetAP2 inhibitor in development for difficult to control type 2 diabetes, which is in phase II testing. While ZGN-1061 is under clinical hold in the U.S. due to cardiovascular (CV) safety risk, the ex-U.S. phase II trials are active.

Early this year, Zafgen announced positive data for the second cohort of its ex-U.S. phase II clinical trial of ZGN-1061 in patients with type 2 diabetes.

The Company continues to progress in its preparation for a Type A meeting to address the concerns raised by the FDA with the clinical hold for ZGN-1061.

As of December 31, 2018, Zafgen had cash, cash equivalents and marketable securities totaling $118.1 million.

ZFGN closed Monday's trading at $4.60, down 2.95%. In after-hours, the stock fell another 25% to $3.45.