5.9 C
New York
Friday, March 29, 2024

Zafgen To Explore Strategic Options, With No Near-Term Resolution For Diabetes Drug

Courtesy of Benzinga

Clinical-stage biopharma companies often face the risk of running out of cash reserves to fund their operations until they can push their investigational assets out of the clinics into the commercialization stage.

After Abeona Therapeutics Inc (NASDAQ: ABEO) opted to explore strategic options earlier in the week, one more biotech has made a similar announcement.

What Happened

Zafgen Inc (NASDAQ: ZFGN), a micro-cap biopharma, announced Thursday morning it plans to explore strategic options to maximum shareholder value.

The strategic alternatives being evaluated include an acquisition, merger, business combination, in-licensing or other strategic transaction involving the company and its assets.

Late last year, the FDA had placed a clinical hold on the development of Zafgen’s ZGN-1061, a MetAP2 inhibitor that is being evaluated for Type 2 diabetes, citing cardiovascular risk. The stock shed roughly 40% of its value in reaction to the development.

Subsequently, on May 30, when the company made an announcement concerning the minutes of a Type A meeting it had with the FDA to discuss a resolution to the clinical hold, the stock plunged to a record low.

In July, the company reached an agreement with the FDA on an in vivo animal study design and protocol to establish relevant safety margins for ZGN-1061.

Based on the preliminary results from the study, the company now said it does not presently expect the data to warrant resolution of the clinical hold for ZGN-1061.

Cash to Last More Than 2 Years

Zafgen said its projected cash runway is likely to last greater than two years, thanks to its previously announced and recently implemented plans to reduce operating expenses and prioritize key resources.

MTS Health Partners has been retained as exclusive advisor to assist the company in exploring alternatives.

In pre-market trading Thursday, Zafgen shares were sliding 11.79% to 72 cents.

Related Links:

Biotech Stock On The Radar: Ardelyx Gears Up For FDA Decision Day

The Daily Biotech Pulse: Cheery Results For Sage’s Depression Drug, UniQure Offering, Axsome Aces Study Of Headache Drug

Posted-In: Biotech News FDA

Subscribe
Notify of
0 Comments
Inline Feedbacks
View all comments

Stay Connected

157,450FansLike
396,312FollowersFollow
2,280SubscribersSubscribe

Latest Articles

0
Would love your thoughts, please comment.x
()
x