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 third quarter 2015 financial results and provided an update on the Company’s clinical development programs, including the pivotal Phase 3 ZAF-311 bestPWS clinical trial of beloranib in Prader-Willi syndrome (PWS) and the Phase 2b ZAF-203 clinical trial of beloranib in severe obesity complicated by type 2 diabetes.

Clinical Update

  • In October, Zafgen announced that the U.S. Food and Drug Administration (FDA) had placed its beloranib program on partial clinical hold and that the Company had elected to close the randomized portion of its pivotal Phase 3 ZAF-311 bestPWS clinical trial and proceed with the efficacy and safety data analysis. The Company also elected to close its Phase 2b ZAF-203 clinical trial and proceed to data analysis. The Company continues to expect that it will report top-line data from both clinical trials in the first quarter of 2016.
  • As previously reported, with newly implemented safety screening measures for thromboembolic disease, Zafgen is continuing its six-month open label extension (OLE) of the pivotal Phase 3 ZAF-311 bestPWS clinical trial in PWS to obtain important ongoing efficacy and safety data. The Company continues to offer an open-ended, unblinded extension study after patients have completed six months of OLE.

“We are focused on advancing our understanding of the potential efficacy and safety of beloranib in complex metabolic disorders, including PWS, and remain committed to the continued development of this promising program,” said Dr. Thomas Hughes, Chief Executive Officer of Zafgen. “The results from the pivotal Phase 3 ZAF-311 bestPWS and Phase 2b ZAF-203 clinical trials, together with the insights we are gaining from our thromboembolic disease screening and monitoring measures, will be critical in determining the potential benefit-risk profile for beloranib and next steps for the program, including the design of our second Phase 3 clinical trial for beloranib in PWS, ZAF-312.”

“Our newly implemented safety screening measures are progressing well as patients begin to resume open-label treatment in our ZAF-311 bestPWS clinical trial, with a continued focus on patient safety,” said Dr. Dennis Kim, Chief Medical Officer of Zafgen. “Resuming open-label treatment allows us to continue to provide beloranib as a potential treatment option to meet the urgent unmet medical need of patients with PWS, a life-threatening and complex rare disorder that severely impacts the quality of life of both patients and their families.”

Third Quarter 2015 Financial Results

“Our balance sheet remains strong,” said Patricia Allen, Chief Financial Officer of Zafgen. “With the revised beloranib development timeline and our anticipated cash burn rate, we now expect that our cash, cash equivalents and marketable securities balance at the end of calendar year 2015 will be greater than $180 million.”

Cash, Cash Equivalents and Marketable Securities

As of September 30, 2015, the Company had cash, cash equivalents and marketable securities totaling $204.0 million.

Net Loss

The Company reported a net loss for the third quarter of 2015 of $19.9 million, or $0.73 per share, compared to a net loss of $14.7 million, or $0.65 per share, for the third quarter of 2014. The weighted average common shares outstanding (basic and diluted) used to compute net loss per share were 27,138,667 for the third quarter of 2015, compared to 22,707,012 for the third quarter of 2014.

Research and Development Expenses

Research and development expenses for the third quarter of 2015 were $14.2 million, compared to $12.1 million for the third quarter of 2014. The increase in research and development expenses for the quarter ended September 30, 2015 as compared to the quarter ended September 30, 2014 was primarily due to increased costs associated with the advancement of the Company’s beloranib program, ZGN-839 and second-generation MetAP2 inhibitors, as well as personnel related costs. Partially offsetting these results was a $6.7 million licensing fee, primarily to Chong Kun Dang Pharmaceutical Corporation (CKD Pharma) related to the initiation of the Company’s Phase 3 ZAF-311 bestPWS clinical trial, incurred in the quarter ended September 30, 2014.

General and Administrative Expenses

General and administrative expenses for the third quarter of 2015 were $5.5 million, compared to $2.3 million for the third quarter of 2014. The increase in general and administrative expenses for the quarter ended September 30, 2015 as compared to the quarter ended September 30, 2014 was primarily due to increased personnel related costs, and increased professional and consulting fees, primarily commercial-readiness activities related to PWS.

2015 Financial Guidance

The Company now expects that its cash, cash equivalents and marketable securities balance will be greater than $180.0 million at December 31, 2015. (Original Source)

Shares of Zafgen are up 2.93% to $11.95 in after-hours trading. ZFGN has a 1-year high of $55.36 and a 1-year low of $9.53. The stock’s 50-day moving average is $22.27 and its 200-day moving average is $32.33.

On the ratings front, Zafgen has been the subject of a number of recent research reports. In a report issued on October 22, Leerink Swann analyst Joseph Schwartz reiterated a Buy rating on ZFGN, with a price target of $46, which implies an upside of 305.3% from current levels. Separately, on the same day, RBC’s Simos Simeonidis maintained a Buy rating on the stock .

According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Joseph Schwartz and Simos Simeonidis have a total average return of 25.2% and -16.5% respectively. Schwartz has a success rate of 56.7% and is ranked #60 out of 3832 analysts, while Simeonidis has a success rate of 32.6% and is ranked #3765.

The street is mostly Bullish on ZFGN stock. Out of 6 analysts who cover the stock, 5 suggest a Buy rating and one recommends to Hold the stock. The 12-month average price target assigned to the stock is $32.67, which implies an upside of 187.8% from current levels.

Zafgen Inc is a biopharmaceutical company dedicated to improving the health and well-being of patients affected by obesity. Beloranib is the Company’s product candidate.