To be sure, a growing list of the Cambridge, Mass.-based biotechnology company's VC backers are betting that's the case. Alta Partners on Tuesday, Dec. 4, joined Atlas Venture and Third Rock Ventures LLC to provide Zafgen with a $21 million Series D equity financing, reportedly bringing the company's total amount of VC funding to roughly $70 million since its 2005 inception.
Zafgen will use the cash to move its obesity drug, beloranib, through its next phase of development. Zafgen initiated a Phase 2a trial on Nov. 6 for the evaluation of the drug's weight-loss effects, safety and pharmacokinetics in a study of roughly 150 severely obese patients receiving injections twice a week over a 12-week period. Zafgen expects data from the study in June.
According to data from the Centers for Disease Control and Prevention, more than one-third of U.S. adults are obese, a dramatic increase over the past 20 years. That market, which is expected to only increase in number, is the reason that Vivus, Arena and Orexigen Therapeutics Inc. have been developing a new wave of obesity drugs.
Arena became the first company to win Food and Drug Administration approval for an obesity drug in more than a decade when regulators sanctioned its compound, Belviq, in June. Vivus followed less than a month later when the FDA approved its Qsymia. Meanwhile, Orexigen's drug, Contrave, is in the midst of a post-Phase 3 safety study that it must complete before it can win FDA approval.
To date, the results are uncertain at best. Arena has yet to launch Belviq, while Vivus has had such a dismal early launch that shareholder QVT Financial LP has called for a sale of the company. The issues surrounding such drugs range from how much patients are willing to pay out of pocket for them to whether insurance companies would cover the drug to, simply, how well they work.
What's appealing about Zafgen's beloranib is that it uses a far different mechanism of action than either Qsymia or Belviq. Qsymia, for example, is a combination of two FDA-approved drugs: phentermine, an appetite suppressant, and migraine drug topiramate, which can cause weight loss by increasing feelings of fullness. Belviq, meanwhile, works by boosting serotonin levels in the brain, which may help a person eat less and feel full after eating smaller amounts of food, according to the FDA.
Beloranib, however, takes a much different approach. The drug inhibits the production of an enzyme called methionine aminopeptidase 2, or MetAP2, which controls the production of new fatty acid molecules by the liver. Zafgen asserts on its website that the treatment restores balance to the way the body metabolizes fat by helping "convert stored fats into useful energy" and thus attacking the root cause of obesity rather than "indirectly through appetite suppression."
Though beloranib is early in development, the results from a Phase 1b study show why Zafgen has found nearly $70 million in VC support. The trial revealed that patients with an average body weight of 104.9 kilograms (231.1 pounds) lost an average of 4.7 kg (10.4 lbs.) -- or roughly 4.5% -- after just four weeks of treatment. One kilogram equals 2.2 pounds.
By comparison, patients taking Belviq in Phase 3 trials over the course of a year lost an average of between 3% and 3.7% of their total body weight compared to patients taking a placebo. In a different study, patients taking Qsymia lost an average of 8.9% of their body weight over a year of treatment.
Jenner & Block LLP hired middle market private equity lawyer Jason Osborn from Kirkland & Ellis LLP in Chicago. For other updates launch today's Movers & shakers slideshow.
Corporate reincorporations overseas may suddenly be a hot topic in Washington, but tax scholars see them as part of a much broader problem, says The Deal's David Marcus in a feature story. Deals that allow U.S. companies to migrate overseas - called inversions - are a response to the U.S. tax system's attempt to tax earnings made by U.S. corporations all over the world. Other countries have moved away from such a system, most notably Japan and the U.K. That's made the U.K. a more attractive venue for companies and helped allow Japanese corporations to grow by making acquisitions overseas. But the dysfunctional U.S. political system means such change is unlikely here. More video