BioWorld Today: Alta Partners - Zafgen $21M Raise to Move Beloranib Beyond Phase IIa

December 05, 2012 - BioWorld Today

Privately held Zafgen Inc. secured a hefty Series D equity raise of $21 million, which will move obesity candidate beloranib (ZGN-440) beyond the Phase IIa trial that was initiated last month.

New investor Alta Partners led the round, joining existing investors Atlas Venture and Third Rock Ventures.

Although Zafgen had sufficient resources to see it through the end of the Phase IIa, “there were a number of other initiatives we were looking to spool up,” Thomas Hughes, president and CEO of Cambridge, Mass.-based Zafgen, told BioWorld Today.

Hughes was mum on specifics but said the “bulk of our emphasis is on advancing beloranib,” which has wowed with data from three early studies. With exclusive worldwide rights outside Korea to develop and market beloranib, Zafgen already is looking beyond the Phase IIa trial to a business structure suited to the drug’s commercialization. Alta represented a backer that “could potentially lead us forward into additional rounds or potentially into a public financing, if that’s going to be in the cards for us,” Hughes said.

For its part, the venture firm is eager to help.

“We think the data are tremendous,” said Ed Hurwitz, a director at Alta Partners. “The magnitude of weight loss is unprecedented. Those data, combined with an exceptionally strong team and a focus on orphan indications as a way to accelerate commercial development, were the pieces that got us so excited.”

The Series D enables Zafgen to move clinical and regulatory activities forward without the distraction of additional fundraising, Hurwitz added.

Unlike obesity’s big three – Arena Pharmaceuticals Inc.’s Belviq (lorcaserin), Vivus Inc.’s Qsymia (phentermine/topiramate) and Orexigen Therapeutics Inc.’s Contrave (naltrexone/buproprion) – beloranib is a first-in-class selective methionine aminopeptidase 2 (MetAP2) inhibitor with an entirely different mechanism of action. Blocking MetAP2 is believed to reduce the production of new fatty acid molecules by the liver and help to convert stored fats into useful energy – an approach uniquely targeted to treat morbid obesity.

The technology is based on the premise that obese and lean individuals metabolize fat differently, with obese bodies “programmed” to create and store more fat through metabolic adaptations that impair the normal release and breakdown of fatty acids from adipose tissue.

In June, Zafgen presented data from two Phase I studies showing beloranib led to significant weight loss – an average of 4.3 kg across three treatment arms compared to a gain of 0.6 kg for placebo – plus improvements in cardiometabolic risk markers – triglycerides, LDL cholesterol, waist circumference and diastolic blood pressure – in severely obese women. The randomized, double-blind, placebocontrolled studies evaluated the safety, tolerability and efficacy of the drug, administered intravenously (I.V.) twice weekly, for 25 days. Patients were allowed to eat normally and were not counseled to change their exercise habits.

The compound did not trigger cardiovascular signals.The most common adverse events were nausea, infusion site injury and headache.

The company disclosed similar findings in September for both I.V. and subcutaneous administrations of beloranib.

The Phase IIa study is evaluating weight loss as well as the safety and pharmacokinetics of beloranib administered twice weekly in obese men and women with and without Type II diabetes. The randomized, double-blind, placebocontrolled study is evaluating five doses ranging from 0.3 mg to 3.2 mg, administered subcutaneously, over an eight week period in approximately 150 patients with a body mass index greater than 30. The study is recruiting at three sites in Australia.

Zafgen expects to have the full data package from the study by mid-2013. From there, the company will determine its regulatory strategy.

“We’re looking at a more or less standard timeline,” said Hughes, who joined Zafgen in 2008 from Novartis AG, where he served as vice president and global head of cardiovascular and metabolic diseases at the Novartis Institutes for BioMedical Research. “The nature of the weight loss that we see and the impact on related aspects such as inflammatory markers and cholesterol levels marry the drug nicely to the high unmet need population, which is the severely obese.”

That group of patients, whose only treatment option is surgery, represents 15 million to 18 million individuals in the U.S., alone, according to Hughes.

The biotech also could explore orphan indications, such as Prader Willi syndrome, for beloranib. In addition, the company is eyeing the “breakthrough therapies” provisions in this year’s Food and Drug Administration Safety and Innovation Act. (See BioWorld Today, July 19, 2012.)

“We would need to explore that with the FDA,” Hughes said. “We’ll certainly be learning more about that in the coming months.”

Zafgen is continuing profiling work on a second oral ompound targeting cardiometabolic disease, “but it’s premature to speak much about that,” he added.

The Series D raises the total haul for Zafgen to about $65 million since its 2005 launch, including a $33 million Series C last year. (See BioWorld Today, July 7, 2011 .)

Long term, the company is “keeping our options open,” Hughes said, noting Zafgen is enjoying strong interest from additional investors as a differentiated candidate in the obesity space. “The climate for obesity products is a lot better,” he added. “When you combine that with the exciting data we’ve generated for beloranib so far, we’re seeing an improved environment for funding overall.”