- Stock rose as much as 111%, biggest intraday gain ever
- Drug was suspended in December after 2 patient deaths
Zafgen Inc. surged after its experimental obesity drug successfully lowered patients’ weight and excessive food-seeking behaviors, findings that could restart the regulatory approval process that was suspended last year after the deaths of two patients.
The positive results may help the biotechnology firm persuade the U.S. Food and Drug Administration to release its hold on the drug application for beloranib, Chief Executive Officer Tom Hughes said in a telephone interview. The drug is in a trial to treat a rare genetic disease called Prader-Willi syndrome that causes overeating.
“Having very clear and compelling efficacy results opens the door on the conversation for how to move forward,” Hughes said.
Zafgen jumped 84 percent to $10.35 at 10:28 a.m. in New York after reaching $11.88, the highest level since Dec. 1, the day before the company said the FDA had put the drug application on hold after a second patient receiving the therapy had died.
"We can’t comment on experimental drug trials,” Eric Pahon, a spokesman with the FDA, said via e-mail.
Patients on the higher dose of the drug lost 5.3 percent of their body weight on average in the six-month trial, and those on the lower dose lost 4.1 percent, compared to a 4.2 percent gain for those on placebo, Zafgen said Wednesday in a statement.
Patients on either dose of the drug also experienced fewer pathological food-seeking behaviors, such as foraging through trash for food, while those on placebo didn’t see any significant change, the company said. Patients reduced their scores on a standard test of the overeating condition, known as hyperphagia, by more than one-third.
The FDA placed Zafgen’s application on a complete clinical hold last year after a second patient died during the trial. Both were taking beloranib and died of respiratory failure due to blood clots in the lungs. It’s not clear that the deaths resulted from the drug, Chief Medical Officer Dennis Kim said.
“In all the trials we’ve run, we haven’t seen changes to any of the coagulation parameters,” Kim said. “So far there’s no evidence suggesting to us that the drug is stimulating blood clotting.”
Still, Hughes said in the statement that Zafgen “plans to develop a strategy for risk mitigation in this underserved patient population.”
Prader-Willi syndrome gives patients an insatiable appetite, leading to chronic overeating, and can cause short stature and delayed sexual development. The condition has a high rate of mortality linked to obesity and its related conditions, according to the company. The drug, which works by helping the body metabolize fat, is also being tested in two other types of obesity.
Zafgen, based in Boston, doesn’t have any approved products and has reported no revenue since going public in 2014, selling shares at $16 apiece. The stock peaked at $51.34 in March 2015. Beloranib is its most advanced experimental candidate.