Phase 1 clinical trial for ZGN-1258 for
Prader-Willi syndrome (PWS) expected to begin in the fourth quarter
2018
Zafgen, Inc. (Nasdaq:ZFGN), a clinical-stage biopharmaceutical
company leveraging its proprietary knowledge of MetAP2 systems
biology to develop novel therapies for patients affected by a range
of metabolic diseases, today reported its second quarter 2018
financial results.
“2018 is an important year of execution on our plan for our
novel second-generation MetAP2 pipeline,” said Jeffrey Hatfield,
Chief Executive Officer. “We’ve continued to make significant
progress this year, highlighted by positive data from the initial
part of our Phase 2 clinical trial of ZGN-1061 in patients with
type 2 diabetes, launch of the natural history study of PWS,
advancement towards clinical testing for ZGN-1258, strengthening of
our balance sheet, and key personnel additions. We expect this
progress to continue throughout the remainder of 2018 and beyond,
with near-term milestones for all of our key pipeline
programs.”
Recent Corporate and Program Highlights
ZGN-1258
- Zafgen progressed investigational new drug (IND) enabling
studies for ZGN-1258, with Prader-Willi syndrome (PWS) as an
initial indication. An IND allowance and initiation of a Phase 1
clinical trial for ZGN-1258 are anticipated in the fourth quarter
of 2018.
- Zafgen and the Foundation for Prader-Willi Research (FPWR), a
nonprofit organization founded to eliminate the challenges of PWS
through the advancement of research and therapeutic development,
launched a co-sponsored four-year natural history study, named PATH
for PWS (Paving the way for
Advances in Treatments &
Health for PWS), to advance understanding of the
medical history of and medical events in people with PWS. PATH for
PWS is a non-interventional, observational study to evaluate
occurrences of serious medical events in PWS, intended to inform
development and clinical trial design for potential new treatments
for PWS, including ZGN-1258, Zafgen’s new, second-generation
program for PWS designed to decrease hyperphagia, change the way
the body metabolizes fat, and reduce fat mass.
- Zafgen reports today that multiple nonclinical studies will be
presented at the FPWR Annual Conference which begins October 4,
2018, covering the following topics:
- ZGN-1258 effects on food intake and body weight in mouse models
of hyperphagia and obesity
- ZGN-1258 effects on other behavioral
manifestations commonly observed in PWS, such as low
physical activity, anxiety, and obsessive-compulsive
behaviors in mouse models
- ZGN-1258 nonclinical differentiation on safety measures
- PATH for PWS natural history study design
ZGN-1061
- Data from the Phase 2 clinical trial and two supportive
nonclinical studies for ZGN-1061 were presented as late-breaker
abstracts at the American Diabetes Association (ADA) 78th
Scientific Sessions in Orlando, Florida in June 2018:
- Zafgen announced positive full results from the initial part of
its 12-week Phase 2 clinical trial of ZGN-1061 designed to
demonstrate proof-of-concept efficacy and safety in patients with
type 2 diabetes and establish a minimally effective dose. The
clinical trial met all of its primary endpoints at a minimally
effective dose of 0.9 mg dose, and 12-week data demonstrated a
favorable safety and tolerability profile, with no
treatment-related serious adverse events and no cardiovascular (CV)
safety signals observed.
- Nonclinical data on treatment with both ZGN-1061 and
liraglutide suggest that combination therapy with these
glucose-lowering agents may yield additive improvement in glycemic
control and weight loss, demonstrating the effect of two
complementary mechanisms – MetAP2 inhibition and GLP-1.
- From nonclinical data in a nonalcoholic steatohepatitis (NASH)
model, Zafgen observed that ZGN-1061 markedly reduced liver weight,
NAS score and markers of liver damage. These NASH-related data,
combined with previous gene expression data and clinical liver fat
content data from Zafgen’s first-generation MetAP2 inhibitor,
suggest potential clinical value in treating liver-specific
metabolic conditions.
- As previously announced, based on the safety and tolerability
results of the interim analysis for the ZGN-1061 Phase 2
proof-of-concept clinical trial detailed in March 2018,
Zafgen opted to explore the higher end of the potential
therapeutic range of ZGN-1061 by adding a 1.8 mg dose arm to the
clinical trial. Patient dosing was initiated during the second
quarter of 2018 and will run in parallel with completion of
long-term toxicology studies for ZGN-1061. Results from this
additional arm are expected in early 2019.
Corporate
- On July 2, 2018, Zafgen closed an underwritten public offering
of 9.2 million shares of its common stock at a price to the public
of $7.50 per share, including 1.2 million shares pursuant to the
underwriters' exercise in full of their option to purchase
additional common shares. The offering resulted in total gross
proceeds of $69.0 million and net proceeds of approximately $64.6
million, after deducting the underwriting discounts and commissions
and other estimated offering costs.
- In May 2018, Zafgen expanded its executive leadership team with
the appointment of Brian McVeigh as Chief Business Officer (CBO).
Mr. McVeigh brings over 25 years of pharmaceutical and biotech
industry experience at GlaxoSmithKline (GSK) including 15 years of
extensive experience in buy-side and sell-side business development
deal making and investment management.
- In June 2018, industry veteran and healthcare policy expert Dr.
Wendy Everett joined Zafgen’s board of directors.
- Zafgen joined the Russell 2000 Index on June 25, 2018.
The Annual Russell US Index reconstitution captures the largest US
stocks as of May 11, 2018 ranking them by total market
capitalization.
Second Quarter 2018 Financial Results
“The completion of our recent public offering of common stock
has provided the Company with additional capital to advance the
Company’s pipeline through multiple value-creating milestones,”
said Patricia Allen, Chief Financial Officer. “We ended the quarter
with $75.8 million of cash, cash equivalents and marketable
securities and raised net proceeds of approximately $64.6 million
from our recent public offering which closed in early July
2018.”
Cash, Cash Equivalents and Marketable
Securities
As of June 30, 2018, the Company had cash, cash equivalents and
marketable securities totaling $75.8 million. In July 2018, the
Company completed an underwritten public offering of its common
stock, which included the full exercise of the underwriters’ option
to purchase additional shares, resulting in net proceeds of
approximately $64.6 million. After giving effect to the estimated
net proceeds from the Company’s public offering of common stock,
the unaudited pro forma cash, cash equivalents and marketable
securities balance was $140.4 million as of June 30, 2018.
Net Loss
The Company reported a net loss for the second quarter of 2018
of $15.8 million, or $0.57 per share, compared to a net loss of
$13.3 million, or $0.49 per share, for the second quarter of
2017.
The weighted average common shares (basic and diluted)
outstanding used to compute net loss per share were 27,565,064 for
the second quarter of 2018 compared to 27,407,408 for the same
quarter of 2017.
Research and Development Expenses
Research and development expenses for the second quarter of 2018
were $12.2 million compared to $10.5 million for the second quarter
of 2017. The increase in research and development expenses compared
to the prior year period was primarily due to increased costs
related to the ZGN-1258 program as IND enabling studies progressed
during the quarter as the program advances towards the filing of an
IND. The increase in research and development expenses was also the
result of increased costs associated with the ongoing Phase 2
clinical trial for ZGN-1061. There were also increases in personnel
related costs and non-cash stock-based compensation expense in the
second quarter of 2018 as compared to the second quarter of 2017.
These increases in research and development costs were partially
offset by a decrease in nonclinical and manufacturing costs
associated with our ZGN-1061 program.
General and Administrative Expenses
General and administrative expenses for the second quarter of
2018 were $3.4 million, compared to $3.0 million for the second
quarter of 2017. The increase in general and administrative
expenses as compared to the prior year period was primarily due to
an increase in personnel related costs as well as an increase in
professional fees primarily related to multi-country patent filing
costs, partially offset by a decrease in non-cash stock-based
compensation expense.
2018 Financial Guidance
The Company expects that its cash, cash equivalents and
marketable securities balance will be greater than $100 million as
of December 31, 2018.
Conference Call Information
Zafgen will host an investor conference call today, August 7,
2018 at 4:30 p.m., Eastern Time, to discuss the Company's second
quarter 2018 results as well as other forward-looking information
about Zafgen's business. Investors and other interested parties may
participate by dialing (844) 824-7428 in the United States or (973)
500-2177 outside the United States and referencing conference ID
number 9168629. The call will also be webcast live on the Company's
website at https://zafgen.gcs-web.com/events-and-presentations. A
replay of this conference call will be available beginning at 7:30
p.m. ET on August 7, 2018 through August 14, 2018 by dialing (855)
859-2056 in the United States or (404) 537-3406 outside the United
States. To access the replay please provide Conference ID number
9168629.
About Zafgen
Zafgen (Nasdaq:ZFGN) is a clinical-stage biopharmaceutical
company leveraging its proprietary MetAP2 biology platform to
develop novel therapies for patients affected by complex metabolic
diseases. Zafgen has pioneered the study of MetAP2 inhibitors in
both common and rare metabolic disorders and is currently advancing
programs for type 2 diabetes, Prader-Willi syndrome and liver
diseases. The Company’s lead product candidate, ZGN-1061, a MetAP2
inhibitor for difficult-to-control type 2 diabetes, has
successfully completed the initial part of a Phase 2 clinical
trial. Learn more at www.zafgen.com.
Safe Harbor Statement
Various statements in this release concerning Zafgen's future
expectations, plans and prospects, including without limitation,
Zafgen's expectations regarding the development and use of
ZGN-1258, ZGN-1061 and other second-generation MetAP2 inhibitors as
treatments for metabolic diseases including Prader-Willi syndrome,
type 2 diabetes and obesity and Zafgen's expectations with respect
to the timing and success of its nonclinical studies and clinical
trials of ZGN-1258, ZGN-1061 and its other product candidates,
Zafgen’s expected cash, cash equivalents and marketable securities
balance as of December 31, 2018, and Zafgen’s expectations
regarding the length of its cash runway, 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-1258,
ZGN-1061 and its other product candidates and to differentiate
ZGN-1258, ZGN-1061 and its other product candidates from
first-generation MetAP2 inhibitors, such as beloranib, the
nonclinical and clinical results for ZGN-1258, 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 nonclinical 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
when needed, Zafgen’s ability to attract and retain personnel,
Zafgen's dependence on third parties for development, manufacture,
marketing, sales and distribution of product candidates, and
unexpected expenditures, as well as those risks more fully
discussed in the section entitled "Risk Factors" in Zafgen's most
recent Annual Report on Form 10-K 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.
Media/Investor Relations Contacts:Zafgen, Inc.
Patricia Allen Chief Financial Officer 617-648-9792
MediaKrystle GibbsTen Bridge Communications
krystle@tenbridgecommunications.com 508-479-6358
InvestorsJohn WoolfordWestwicke
Partnersjohn.woolford@westwicke.com 443-213-0506
Condensed Consolidated Statements of
Operations
(In thousands, except share and per share
data)(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Revenue |
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
Operating
expenses: |
|
|
|
|
|
|
|
|
Research
and development |
|
|
12,209 |
|
|
|
10,528 |
|
|
|
24,642 |
|
|
|
20,205 |
|
General
and administrative |
|
|
3,351 |
|
|
|
3,008 |
|
|
|
6,620 |
|
|
|
6,596 |
|
Total
operating expenses |
|
|
15,560 |
|
|
|
13,536 |
|
|
|
31,262 |
|
|
|
26,801 |
|
Loss from
operations |
|
|
(15,560 |
) |
|
|
(13,536 |
) |
|
|
(31,262 |
) |
|
|
(26,801 |
) |
Other income
(expense): |
|
|
|
|
|
|
|
|
Interest
income |
|
|
324 |
|
|
|
247 |
|
|
|
591 |
|
|
|
474 |
|
Interest
expense |
|
|
(466 |
) |
|
|
(53 |
) |
|
|
(924 |
) |
|
|
(126 |
) |
Foreign
currency transaction (losses) gains, net |
|
|
(73 |
) |
|
|
(5 |
) |
|
|
(136 |
) |
|
|
95 |
|
Total
other (expense) income, net |
|
|
(215 |
) |
|
|
189 |
|
|
|
(469 |
) |
|
|
443 |
|
Net loss |
|
$ |
(15,775 |
) |
|
$ |
(13,347 |
) |
|
$ |
(31,731 |
) |
|
$ |
(26,358 |
) |
Net loss per share,
basic and diluted |
|
$ |
(0.57 |
) |
|
$ |
(0.49 |
) |
|
$ |
(1.15 |
) |
|
$ |
(0.96 |
) |
Weighted average common
shares outstanding, basic and diluted |
|
|
27,565,064 |
|
|
|
27,407,408 |
|
|
|
27,553,394 |
|
|
|
27,379,122 |
|
|
|
|
|
|
|
|
|
|
Condensed Consolidated Balance
Sheets
(In thousands, except share and per share
data)(Unaudited)
|
|
|
|
|
|
|
June 30, |
|
December 31, |
|
|
2018 |
|
2017 |
|
|
|
|
|
Assets |
|
|
|
|
Current assets: |
|
|
|
|
Cash and
cash equivalents |
|
$ |
40,745 |
|
|
$ |
40,777 |
|
Marketable securities |
|
|
35,104 |
|
|
|
61,275 |
|
Tax
incentive receivable |
|
|
895 |
|
|
|
946 |
|
Prepaid
expenses and other current assets |
|
|
1,289 |
|
|
|
1,927 |
|
Total
current assets |
|
|
78,033 |
|
|
|
104,925 |
|
Tax
incentive receivable |
|
|
938 |
|
|
|
- |
|
Property and equipment,
net |
|
|
472 |
|
|
|
528 |
|
Other assets |
|
|
357 |
|
|
|
57 |
|
Total
assets |
|
$ |
79,800 |
|
|
$ |
105,510 |
|
Liabilities and
Stockholders' Equity |
|
|
|
|
Current
liabilities: |
|
|
|
|
Accounts
payable |
|
$ |
3,010 |
|
|
$ |
3,020 |
|
Accrued
expenses |
|
|
4,448 |
|
|
|
4,273 |
|
Notes
payable, current |
|
|
1,818 |
|
|
|
- |
|
Total
current liabilities |
|
|
9,276 |
|
|
|
7,293 |
|
Notes
payable, long-term |
|
|
18,502 |
|
|
|
20,000 |
|
Total
liabilities |
|
|
27,778 |
|
|
|
27,293 |
|
Stockholders'
equity: |
|
|
|
|
Preferred
stock; $0.001 par value per share; 5,000,000 shares authorized as
of June 30, 2018 and December 31, 2017; no shares issued and
outstanding as of June 30, 2018 and December 31, 2017 |
|
|
- |
|
|
|
- |
|
Common
stock, $0.001 par value per share; 115,000,000 shares authorized as
of June 30, 2018 and December 31, 2017; 27,578,989 and 27,489,457
shares issued and outstanding as of June 30, 2018 and December 31,
2017, respectively |
|
|
28 |
|
|
|
27 |
|
Additional paid-in capital |
|
|
373,308 |
|
|
|
367,825 |
|
Accumulated deficit |
|
|
(321,308 |
) |
|
|
(289,577 |
) |
Accumulated other comprehensive loss |
|
|
(6 |
) |
|
|
(58 |
) |
Total
stockholders' equity |
|
|
52,022 |
|
|
|
78,217 |
|
Total
liabilities and stockholders' equity |
|
$ |
79,800 |
|
|
$ |
105,510 |
|
|
|
|
|
|
|
|
|
|
|
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