Zafgen is just weeks removed from some encouraging results from a mid-stage clinical trial of its obesity drug candidate, beloranib. Now it’s parlayed those numbers into another big raise from investors.
Cambridge, MA-based Zafgen today snagged a $45 million Series E round from a group of both private and public investors—typically a sign that a company is eyeing a potential IPO. RA Capital Management, Brookside Capital, Venrock, Alta Partners, an unnamed “blue chip investor” and another unspecified private investor provided the cash, which will help bankroll the development of beloranib.
Zafgen has now raised around $115 million from those investors, Atlas Ventures, and Third Rock ventures since its inception in 2008.
The raise comes just weeks after Zafgen released the full details from its mid-stage study of beloranib. In the study, Zafgen tested 147 patients, mostly obese women about 48.4 years old with an average body mass index, or BMI, of about 37.6. Patients taking the highest dose of beloranib (2.4 milligrams) lost an average of about 24 pounds (10.9 kilograms) over the course of 12 weeks. Patients in the mid-dose group (1.2 milligrams) shed about 15 pounds on average, while those getting the low dose (0.6) lost an average of about 12.4 pounds over the course of treatment. The most common side effects seen in patients taking the drug were nausea, vomiting, diarrhea, and trouble sleeping. Zafgen said 122 patients completed the study, indicating there were 25 dropouts. It’s common for patients to drop out of studies for obesity drugs, although the extent of the dropout rate is always something to watch in trials.
Zafgen’s value proposition is that its drug is completely different from many appetite-suppressing obesity drugs, like the ones sold by Arena Pharmaceuticals (NASDAQ: ARNA) and Vivus (NASDAQ: VUX). While those drugs are designed to trick the body into thinking that it’s full, beloranib is thought to change the way the body metabolizes fat by reducing the over-production of fat in the liver that occurs in severely obese people. It does this by inhibiting the production of an enzyme called methionine aminopeptidase 2, or MetAP2, which causes the body to release the fat and turn it into a source of fuel.
Even so, Zafgen has said that it isn’t targeting this drug for people that need to shed a few pounds, but rather for severely obese people in great need. Zafgen envisions its treatment as an alternative to bariatric surgery, a procedure by which surgeons alter or block portions of a patient’s digestive system. It’s being developed as an injection just under the skin that would be administered twice a week through a small syringe under the supervision of a doctor. With the new cash, it’ll take that drug a step further and see how it fares in other potential disease types.
“We are excited to add this group of new investors to our syndicate and to obtain continued investment from Alta Partners who led our Series D round last year, as we continue to advance our clinical testing for beloranib in severe obesity and related orphan indications,” said Zafgen president and CEO Thomas Hughes in a statement. “With their support, we look forward to building on our recent Phase 2 results and expanding the beloranib program to help patients who suffer from these serious diseases.”
Hughes spoke at some length with Xconomy’s national biotech editor, Luke Timmerman, this fall about the company’s ideas around using beloranib for a rare disease called Prater-Willi syndrome—a rare genetic disorder that causes a number of health problems in young people, including severe overeating that eventually is deadly. The company ran a small clinical trial earlier this year in Prater-Willi patients, which is listed on clinicaltrials.gov.
If Zafgen goes ahead with further development of beloranib for that patient population, it would be an unusual strategy for obesity, an area in which drugmakers have typically tried to reach broader populations.