A few years ago on this blog, I wrote several times about a small company called Zafgen and their unusual epoxide-based chemical matter (beloranib) that was in development for the rare Prader-Willi syndrome. That’s a genetic disorder that includes, among many other problems, constant hunger (with the complications that you’d expect from that). Zafgen was pursuing inhibitors of the enzyme methionine aminopeptidase 2 (MetAP2) as a treatment, and thus their epoxide compound. Unfortunately, the company had a death in their Phase III trial, and the confusion and consternation about that hadn’t even settled down before a second death occurred.
Most observers wondered if that would be the end of the company – things like this have most certainly ended small biopharma companies before. But Zafgen carried on. Beloranib itself seemed to be acting through more mechanisms than just MetAP2 inhibition, as many compounds with two epoxides in them well might be, and they came back around with compounds that seemed to be more selective. ZGN-1061 went into clinical trials last year for diabetes, but the FDA put a clinical hold on the program last fall, citing cardiovascular concerns. Meanwhile, a further compound (ZGN-1258) was on the way to the clinic for another crack at Prader-Willi until earlier this week. Beloranib’s problems had been traced to effects on the vascular epithelium, and the latest compound showed no sign of trouble there.
Unfortunately, what it did show was toxic effects on muscle tissue, which had apparently not been observed with the 1061 compound. Zafgen announced after the close of the market Monday that the compound had been dropped because of this finding, which is absolutely the last thing the company needed. Their stock has cratered once again – you’ve needed mighty strong hands to hold on to ZFGN through all this – and the number of ways out of this situation would seem to have narrowed. There’s not much clarity on how (or if) the clinical hold on ZGN-1061 could be resolved, and it may in fact be unresolvable. The company says that it’s produced new assay data and is setting up a meeting with the FDA about the ZGN-1061 safety concerns, but who knows how that will go?
Sometimes a small company’s near-death experiences end up as a prelude to a dramatic comeback, but sometimes they’re just a prelude to, well, the company’s death. Zafgen’s executives will have to be extraordinarily persuasive to convince investors that this isn’t the case here, but they already lost their CEO and CSO last August and their Chief Medical Officer just resigned as the company announced the hiring of a new R&D head. So there’s that. I wish Zafgen luck, but they have quite a hole to climb out of at this point.