Memorandum
Zafgen provided its 2Q16 update in a press release announcement for 2Q16 – this was a new move as the company has historically presented its financial updates via webcast. For Zafgen, 2Q16 was largely defined by the company’s decision to terminate the development of the MetAP2 inhibitor beloranib, a therapy for the rare obesity condition Prader-Willi Syndrome (PWS). Despite this significant setback, management emphasized its intention to continue pursuing obesity therapies as the company shared that Zafgen’s efforts are now focused on advancing a preclinical second-generation MetAP2 inhibitor, ZGN-1061. We learned of its upcoming phase 1 clinical trial, which is expected to produce data by the end of 1Q17; no records have yet been posted on ClinicalTrials.gov. Financially, management expressed optimism regarding the company’s ability to advance ZGN-1061 forward, given Zafgen’s strong cash position ($150.5 million in cash, cash equivalents, and marketable securities as of June 30, 2016). Zafgen’s challenging quarter is a testament to the difficulty of drug development in the obesity arena, even within orphan indications. We’re moved by the company’s persistence in this under-served therapeutic area and look forward to seeing the development of ZGN-1061, though we recognize that bringing ZGN-1061 to market will be a long and challenging road.
-- by Abigail Dove, Payal Marathe, Melissa An, Sarah Odeh, and Kelly Close