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Arguing About Zafgen’s Chances

It’s been a wild ride for Zafgen and those following the company, and things are nowhere near over. Back in December, it became clear that two patients had died in their clinical trial of beloranib against Prader-Willi syndrome, which was clearly very bad news. But this month, the company released the rest of the data from that trial, which showed that the compound seemed efficacious. That actually send the company’s stock up quite a bit, not that the rise made sense to everyone, with that tremendous safety issue hanging over the entire program.

Now Kerrisdale Capital, a hedge fund that’s short the stock, has come out with a very negative report indeed on the company’s prospects. They’re not impressed with the weight-loss data, and they think that the safety problems completely wipe that out as a consideration, anyway. Zafgen’s stock is down so far today.

Short-sellers are not popular. But I’ve sold short myself (although not much in recent years, what with that family-to-support thing going on and all). I am completely sympathetic to a good short case, partly because so few people take the time and trouble to make one. People can boom and boost and pump all day long and no one even notices or cares, but let someone come out and say that they don’t like a stock and that it should be sold, and suddenly people act as if some crime against nature has been committed. A lot of stocks actually go to zero, you know, and you probably wouldn’t want to be holding them as they do.

As for Zafgen, I don’t know if I’m as pessimistic as Kerrisdale (and I have no position in the stock), but I could fairly be described as pessimistic until there’s more clarity on those patient deaths. I think that those lengthen the odds of FDA approval very much, and that the company needs to figure out as much as it can about whether the deaths were, in fact, drug-related, and if so, if there’s any way to tell up front who is more at risk. Without progress in those areas, I would not wish to bet on belonarib making it. And keep in mind, part of the beloranib story has been that it might be able to move on past Prader-Willi patients and into a wider patient population if it proved safe and efficacious. The “safe” part of that is very much up for debate, which means that any such future for the drug is completely on hold until things get sorted out. If they can be sorted out. And that’s probably up for debate, too.

I don’t like the way things have turned out, of course. Belonarib is a really interesting compound, with a really interesting story behind it. I’ve been rooting for it to make it. But this is why we run clinical trials.

6 comments on “Arguing About Zafgen’s Chances”

  1. me says:


    Benefit/Risk ratio is the key here. The panel that reviews it in one of my clients uses a yin/yang symbol as it’s logo. Pretty apt I think.

  2. me too says:

    Unless its obvious that the 2 deaths weren’t drug related (and I have no idea how you could prove that), its hard for me to see anyway for the benefit/risk ratio to be favorable. Yes, the drug reduced weight and hyperphagia behaviors but that probably isn’t novel. There are a number of other companies with drugs in test for Prader-Willi Syndrome and oxytocin is also being studied (PWSA-USA web site).

    Most experts believe that for this rare disease, you need to try and intervene in young children -Zafgen’s trial was in adults. There is no way this drug qualifies for that population.

  3. anon says:

    Another fumagilin analog from the ’90s (TNP-470) had problems with neurotoxicity. Since there’s not much info here it’s a little early to try to make any claims about what happened, but maybe the answer could lie in TNP-470’s past.

  4. Anon says:

    Cancer also reduces weight and kills people, but there isn’t a big market need for that.

  5. Kevin S says:

    Dear Derek – The fact that you are writing “belonranib” and “belonarib” interchangeably makes it even more juicy! 😀

  6. loupgarous says:

    Prader-Willi will, over time, kill its sufferers. They’ll either become very hard to manage diabetics, suffer cardiovascular complications, or suffer other morbidity associated with severe obesity. The risk-benefit assessment for approval of belonarib probably approaches the use of cytotoxins for cancer in its complexity.

    After years of avoiding it for my cancer, I finally agreed to cytotoxic chemotherapy (delivered as locally as possible). It was no week in the tropics, but now my liver doesn’t hurt any more. It was worth the risk.

    If the mechanism of death can be identified in the study deaths, and a way found to manage the attendant risks. But me too’s right, the proper time to intervene in Prader-Willi is in childhood. A drug that has a significant risk of death in adults won’t likely be approved in treatment of Prader-Willi in children.

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