Zafgen Inc (NASDAQ:ZFGN), a biopharmaceutical company dedicated to significantly improving the health and well-being of patients affected by obesity and complex metabolic disorders, today announced its first quarter 2016 financial results, and provided an update on the Company’s clinical program for beloranib.
“The compelling and consistent efficacy data emerging from our beloranib clinical trials in both PWS and severe obesity complicated by type 2 diabetes provide greater perspective on the efficacy-safety profile of beloranib in difficult-to-treat obesity indications,” said Thomas Hughes, Ph.D., Chief Executive Officer of Zafgen. “We have made significant progress in our efforts to address the full clinical hold on the beloranib IND and are now moving toward discussions with the FDA. We expect to have more clarity on the potential path forward for beloranib in PWS over the next few months.”
Recent Clinical Developments
- In January 2016, Zafgen announced that its pivotal Phase 3 bestPWS ZAF-311 clinical trial of beloranib in Prader-Willi syndrome, or PWS, achieved both co-primary efficacy endpoints of hyperphagia-related behaviors and weight loss.
- In February 2016, Zafgen reported that its ZAF-203 Phase 2b clinical trial of beloranib in severe obesity complicated by type 2 diabetes achieved its key efficacy endpoints, demonstrating statistically and clinically significant improvements in body weight and glycemic control.
- In April 2016, Zafgen presented new clinical data, which were selected for late-breaking presentations, from its pivotal Phase 3 bestPWS ZAF-311 clinical trial evaluating beloranib in PWS at the 98th Annual Meeting of The Endocrine Society, or ENDO 2016. In addition to achieving its co-primary efficacy endpoints of hyperphagia-related behaviors and weight loss, the clinical trial demonstrated that beloranib was associated with improvements in body composition including a reduction in fat mass, total cholesterol, LDL cholesterol, and other cardiometabolic risk factors when compared to placebo.
- In May 2016, Zafgen presented clinical data, which were selected for late-breaking poster presentations, from its pivotal Phase 3 bestPWS ZAF-311 clinical trial evaluating beloranib in PWS at the XIII International Congress on Obesity, or ICO.
“At the recent ENDO 2016 and ICO meetings, we presented the full data set from our Phase 3 bestPWS ZAF-311 clinical trial, the first Phase 3 pivotal clinical trial to show significant improvement in hyperphagia-related behaviors and weight loss in PWS patients,” said Dennis Kim, M.D., Chief Medical Officer of Zafgen. “In addition to demonstrating a positive impact on body weight and excessive food-seeking behaviors, beloranib was associated with improvements in body composition and with a preferential loss of fat with minimal change in lean mass, underscoring the potential of our MetAP2 platform to impact metabolic disorders.”
First Quarter 2016 Financial Results
“We have maintained conservative spending during the first quarter of 2016 as compared to the fourth quarter of 2015 as we clarify the potential path forward for beloranib. Our current cash balance provides us with the financial strength to execute on our business strategy and fund operations,” said Patricia Allen, Chief Financial Officer of Zafgen. “We continue to expect that our cash, cash equivalents and marketable securities balance at the end of calendar year 2016 will be in excess of $100 million.”
Cash, Cash Equivalents and Marketable Securities
As of March 31, 2016, the Company had cash, cash equivalents and marketable securities totaling $166.2 million.
The Company reported a net loss for the first quarter of 2016 of $17.7 million, or $0.65 per share, compared to a net loss of $13.5 million, or $0.53 per share, for the first quarter of 2015.
The weighted average common shares (basic and diluted) outstanding used to compute net loss per share were 27,263,435 for the first quarter of 2016, compared to 25,615,282 for the first quarter of 2015.
Research and Development Expenses
Research and development expenses for the first quarter of 2016 were $12.5 million, compared to $10.2 million for the first quarter of 2015. The increase in research and development expenses for the quarter ended March 31, 2016 as compared to the prior year quarter was primarily due to increased personnel costs related to hiring new employees during the first three quarters of 2015, as well as non-cash stock-based compensation expense.
General and Administrative Expenses
General and administrative expenses for the first quarter of 2016 were $5.4 million, compared to $3.0 million for the first quarter of 2015. The increase in general and administrative expenses for the quarter ended March 31, 2016 as compared to the prior year quarter was primarily due to increased non-cash stock-based compensation expense and increased professional fees.
2016 Financial Guidance
The Company expects that its cash, cash equivalents and marketable securities balance will be greater than $100 million at December 31, 2016. (Original Source)
Shares of Zafgen closed today at $6.47, up $0.10 or 1.57%. ZFGN has a 1-year high of $47.98 and a 1-year low of $5.34. The stock’s 50-day moving average is $6.59 and its 200-day moving average is $7.88.
On the ratings front, Zafgen has been the subject of a number of recent research reports. In a report issued on April 11, Leerink Swann analyst Joseph Schwartz maintained a Hold rating on ZFGN, with a price target of $6, which implies a downside of 5.7% from current levels. Separately, on April 4, FBR’s Christopher James assigned a Buy rating to the stock and has a price target of $20.
According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Joseph Schwartz and Christopher James have a total average return of 10.9% and -16.9% respectively. Schwartz has a success rate of 42.5% and is ranked #268 out of 3828 analysts, while James has a success rate of 24.4% and is ranked #3774.
The street is mostly Neutral on ZFGN stock. Out of 4 analysts who cover the stock, 3 suggest a Hold rating and one recommends to Buy the stock. The 12-month average price target assigned to the stock is $6.50, which represents a slight upside potential from current levels.
Zafgen, Inc. is a biopharmaceutical company, which is engaged in the developing of anti-obesity therapeutics that restores normal fat metabolism and regulatory pathways. The company’s product: Beloranib, which is under phase 2 clinical development as a treatment for obesity and hyperphagia in Prader-Willi Syndrome, or PW craniopharyngioma-associated obesity. Zafgen was founded on November 22, 2005 and is headquartered in Boston, MA.