Zafgen, Inc. (Nasdaq:ZFGN), a biopharmaceutical company dedicated
to significantly improving the health and well-being of patients
affected by metabolic diseases including type 2 diabetes and
obesity, today announced its third quarter 2016 financial results.
“We have leveraged our experience with the
MetAP2 pathway to develop ZGN-1061, a second-generation molecule
that we believe is optimized to harness the powerful benefits of
MetAP2 inhibition while minimizing the potential for adverse
events,” said Thomas Hughes, Ph.D., President and Chief Executive
Officer of Zafgen. “We are focused on advancing development of this
highly differentiated compound, and expect to report top-line
results from our ongoing Phase 1 clinical trial of ZGN-1061 in the
first quarter of 2017. These results will further elucidate the
candidate’s key differentiators relative to our first-generation
MetAP2 inhibitor, and help inform the doses, design, and patient
populations for our Phase 2 clinical program."
Recent Corporate and Clinical
Highlights
- Zafgen implemented a strategic restructuring in July to focus
its resources on the development of ZGN-1061, a second generation
MetAP2 inhibitor that originated from the
Company's discovery program as part of a multi-year campaign
to identify novel compounds that avoided limiting preclinical
safety concerns observed with its first-generation MetAP2
inhibitors. The Company is also leveraging its MetAP2 platform to
discover additional, highly-differentiated, second-generation
candidates that provide clear evidence of efficacy with promising
safety margins. As a part of this restructuring, the Company has
suspended development of its first-generation candidates, beloranib
and ZGN-839, which were being developed for orphan obesity
indications and nonalcoholic steatohepatitis,
respectively.
- The Company commenced dosing in its ZGN-1061 Phase 1 clinical
trial, which is progressing on schedule. The clinical trial
includes a single ascending dose (SAD) portion, which will enroll
up to 48 healthy patients, as well as a multiple ascending dose
(MAD) portion that is evaluating twice-weekly administration of
ZGN-1061 for safety, tolerability, and weight loss efficacy over
four weeks in up to 24 obese patients. The Company continues
to expect to report top-line results from its ongoing Phase 1
clinical trial of ZGN-1061 in the first quarter of 2017.
Third Quarter 2016 Financial
Results
“Our strong balance sheet, coupled with the
impact of our July restructuring, provides us with the resources to
fund development of ZGN-1061 through key value-creating
milestones,” stated Patricia Allen, Chief Financial Officer of
Zafgen. “We expect our cash runway to extend through the end
of 2018, by which time we expect to have data from a Phase 2a
clinical trial for ZGN-1061.”
Cash, Cash Equivalents and Marketable
SecuritiesAs of September 30, 2016, the Company had cash,
cash equivalents and marketable securities totaling $138.7
million.
Net LossThe Company reported a
net loss for the third quarter of 2016 of $14.7 million, or $0.54
per share, compared to a net loss of $19.9 million, or $0.73 per
share, for the third quarter of 2015.
The weighted average common shares (basic and
diluted) outstanding used to compute net loss per share were
27,322,907 for the third quarter of 2016, compared to 27,138,667
for the third quarter of 2015.
Research and Development
ExpensesResearch and development expenses for the third
quarter of 2016 were $10.0 million, compared to $14.2 million for
the third quarter of 2015. The decrease in research and development
expenses for the quarter ended September 30, 2016 as compared to
the prior year quarter was primarily due to a decrease in
preclinical, clinical and manufacturing costs related to beloranib
and ZGN-839. These decreases were partially offset by increased
spending on ZGN-1061 during the quarter ended September 30, 2016 as
preclinical development and manufacturing activities continue and
the Company initiated the Phase 1 clinical trial. There was also an
increase in personnel related costs primarily related to severance
expenses as a result of the reduction in workforce during the third
quarter of 2016.
General and Administrative
ExpensesGeneral and administrative expenses for the third
quarter of 2016 were $4.8 million, compared to $5.5 million for the
third quarter of 2015. The decrease in general and administrative
expenses for the quarter ended September 30, 2016 as compared to
the prior year quarter was primarily due to a decrease in
professional fees and non-cash stock-based compensation expense,
partially offset by an increase in personnel related costs
primarily related to severance expenses as a result of the
reduction in workforce during the third quarter of 2016.
2016 Financial GuidanceThe
Company expects that its cash, cash equivalents and marketable
securities balance will be greater than $125 million at December
31, 2016.
About ZGN-1061
ZGN-1061 is a fumagillin-class, injectable small
molecule second generation MetAP2 inhibitor that modulates the
activity of key cellular processes that control the body's ability
to make and store fat, and utilize fat and glucose as an energy
source. In preclinical studies, ZGN-1061 has demonstrated promising
efficacy and potency in animal models, with an improved
pharmacokinetic profile and safety margin relative to previous
molecules in the MetAP2 class. ZGN-1061 is anticipated to improve
glycemic control while also helping to reduce hunger and restore
balance to fat metabolism, enabling calories to once again be used
as a productive energy source, leading to improved metabolic
control and long-term weight loss. ZGN-1061 is currently in Phase 1
clinical development. Zafgen holds exclusive worldwide
rights for the development and commercialization of ZGN-1061.
About Zafgen
Zafgen (Nasdaq:ZFGN) is a biopharmaceutical
company dedicated to significantly improving the health and
well-being of patients affected by metabolic diseases including
type 2 diabetes and obesity. Zafgen is focused on developing novel
therapeutics that treat the underlying biological mechanisms of
metabolic diseases through the MetAP2 pathway. Zafgen has pioneered
the study of MetAP2 inhibitors in both common and rare forms of
obesity. Zafgen's lead product candidate is ZGN-1061, which is a
novel, first-in-class, twice-weekly subcutaneous injection. Zafgen
aspires to improve the lives of patients through targeted
treatments and has assembled a team accomplished in bringing
therapies to patients affected by metabolic diseases.
Safe Harbor Statement
Various statements in this release concerning
Zafgen's future expectations, plans and prospects, including
without limitation, Zafgen's expectations regarding the use of
ZGN-1061 and other MetAP2 inhibitors as treatments for metabolic
diseases including type 2 diabetes and obesity, Zafgen's
expectations with respect to the timing and success of its
pre-clinical studies and clinical trials of ZGN-1061 and its other
product candidates, and Zafgen's expected cash, cash equivalents
and marketable securities balance as of December 31, 2016, may
constitute forward-looking statements for the purposes of the safe
harbor provisions under The Private Securities Litigation Reform
Act of 1995 and other federal securities laws. Forward-looking
statements can be identified by terminology such as "anticipate,"
"believe," "could," "could increase the likelihood," "estimate,"
"expect," "intend," "is planned," "may," "should," "will," "will
enable," "would be expected," "look forward," "may provide,"
"would" or similar terms, variations of such terms or the negative
of those terms. Actual results may differ materially from those
indicated by these forward-looking statements as a result of
various important factors, including, without limitation, Zafgen's
ability to successfully demonstrate the efficacy and safety of
ZGN-1061 and its other product candidates, the pre-clinical and
clinical results for ZGN-1061 and its other product candidates,
which may not support further development and marketing approval,
actions of regulatory agencies, which may affect the initiation,
timing and progress of pre-clinical studies and clinical trials of
its product candidates, Zafgen's ability to obtain, maintain and
protect its intellectual property, Zafgen's ability to enforce its
patents against infringers and defend its patent portfolio against
challenges from third parties, competition from others developing
products for similar uses, Zafgen's ability to manage operating
expenses, Zafgen's ability to obtain additional funding to support
its business activities and establish and maintain strategic
business alliances and new business initiatives, Zafgen's
dependence on third parties for development, manufacture,
marketing, sales and distribution of product candidates, the
outcome of litigation, and unexpected expenditures, as well as
those risks more fully discussed in the section entitled "Risk
Factors" in Zafgen's most recent Quarterly Report on Form 10-Q
filed with the Securities and Exchange Commission, as well as
discussions of potential risks, uncertainties, and other important
factors in Zafgen's subsequent filings with the Securities and
Exchange Commission. In addition, any forward-looking statements
represent Zafgen's views only as of today and should not be relied
upon as representing its views as of any subsequent date. Zafgen
explicitly disclaims any obligation to update any forward-looking
statements, whether as a result of new information, future events
or otherwise.
ZAFGEN,
INC. |
CONDENSED
CONSOLIDATED STATEMENTS OF
OPERATIONS |
(In thousands,
except share and per share
data) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
Three
Months Ended September 30, |
|
Nine Months
Ended September 30, |
|
|
2016 |
|
2015 |
|
2016 |
|
2015 |
Revenue |
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
Operating expenses: |
|
|
|
|
|
|
|
|
Research and development |
|
|
10,001 |
|
|
|
14,171 |
|
|
|
32,661 |
|
|
|
36,912 |
|
General and administrative |
|
|
4,830 |
|
|
|
5,546 |
|
|
|
15,089 |
|
|
|
13,655 |
|
Total operating expenses |
|
|
14,831 |
|
|
|
19,717 |
|
|
|
47,750 |
|
|
|
50,567 |
|
Loss
from operations |
|
|
(14,831 |
) |
|
|
(19,717 |
) |
|
|
(47,750 |
) |
|
|
(50,567 |
) |
Other
income (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income |
|
|
230 |
|
|
|
143 |
|
|
|
664 |
|
|
|
245 |
|
Interest expense |
|
|
(132 |
) |
|
|
(200 |
) |
|
|
(432 |
) |
|
|
(626 |
) |
Foreign currency transaction gains
(losses), net |
|
|
58 |
|
|
|
(110 |
) |
|
|
79 |
|
|
|
(164 |
) |
Total other income (expense),
net |
|
|
156 |
|
|
|
(167 |
) |
|
|
311 |
|
|
|
(545 |
) |
Net
loss |
|
$ |
(14,675 |
) |
|
$ |
(19,884 |
) |
|
$ |
(47,439 |
) |
|
$ |
(51,112 |
) |
Net loss
per share , basic and diluted |
|
$ |
(0.54 |
) |
|
$ |
(0.73 |
) |
|
$ |
(1.74 |
) |
|
$ |
(1.92 |
) |
Weighted
average common shares outstanding, basic and diluted |
|
|
27,322,907 |
|
|
|
27,138,667 |
|
|
|
27,286,323 |
|
|
|
26,593,646 |
|
|
ZAFGEN,
INC. |
|
CONDENSED CONSOLIDATED BALANCE
SHEETS |
|
(In thousands, except share and per share
data) |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
September 30, |
|
December 31, |
|
|
|
2016 |
|
2015 |
|
|
|
|
|
|
|
Assets |
|
|
|
|
|
Current assets: |
|
|
|
|
|
Cash and cash equivalents |
|
$ |
24,861 |
|
|
$ |
35,595 |
|
|
Marketable securities |
|
|
113,796 |
|
|
|
149,484 |
|
|
Tax incentive receivable |
|
|
1,403 |
|
|
|
1,323 |
|
|
Prepaid expenses and other current
assets |
|
|
1,515 |
|
|
|
1,708 |
|
|
Total current assets |
|
|
141,575 |
|
|
|
188,110 |
|
|
Tax
incentive receivable |
|
|
331 |
|
|
|
- |
|
|
Property and equipment,
net |
|
|
722 |
|
|
|
902 |
|
|
Other assets |
|
|
84 |
|
|
|
94 |
|
|
Total assets |
|
$ |
142,712 |
|
|
$ |
189,106 |
|
|
Liabilities and
Stockholders' Equity |
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
Accounts payable |
|
$ |
3,640 |
|
|
$ |
7,495 |
|
|
Accrued expenses |
|
|
4,580 |
|
|
|
6,112 |
|
|
Notes payable, current |
|
|
3,119 |
|
|
|
2,936 |
|
|
Total current liabilities |
|
|
11,339 |
|
|
|
16,543 |
|
|
Notes payable, net of
discount, long-term |
|
|
1,200 |
|
|
|
3,453 |
|
|
Total liabilities |
|
|
12,539 |
|
|
|
19,996 |
|
|
Commitments and
contingencies |
|
|
|
|
|
Stockholders'
equity: |
|
|
|
|
|
Preferred stock; $0.001 par value
per share; 5,000,000 shares authorized as of September 30, 2016 and
December 31, 2015; no shares issued and outstanding as of September
30, 2016 and December 31, 2015 |
|
|
- |
|
|
|
- |
|
|
Common stock, $0.001 par value per
share; 115,000,000 shares authorized as of September 30, 2016 and
December 31, 2015; 27,329,233 and 27,242,503 shares issued
and outstanding as of September 30, 2016 and December 31, 2015,
respectively |
|
|
27 |
|
|
|
27 |
|
|
Additional paid-in capital |
|
|
357,322 |
|
|
|
348,961 |
|
|
Accumulated deficit |
|
|
(227,110 |
) |
|
|
(179,671 |
) |
|
Accumulated other comprehensive
loss |
|
|
(66 |
) |
|
|
(207 |
) |
|
Total stockholders' equity |
|
|
130,173 |
|
|
|
169,110 |
|
|
Total liabilities and stockholders'
equity |
|
$ |
142,712 |
|
|
$ |
189,106 |
|
|
|
|
|
|
|
|
This selected financial information should be read in
conjunction with the consolidated financial statements and notes
thereto included in the Company's Annual Report on Form 10-K, as
amended, which includes the Company’s audited consolidated
financial statements for the year ended December 31, 2015.
Media/Investor Relations Contact:
Zafgen, Inc.
Patricia Allen
Chief Financial Officer
617-648-9792
Argot Partners
Investor Relations
Laura Perry or Glenn Garmont
212-600-1902
laura@argotpartners.com
glenn@argotpartners.com
Spectrum Science
Media Relations
Michelle Strier
202-587-2582
mstrier@spectrumscience.com
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