Zafgen Inc (NASDAQ:ZFGN)
Zafgen, Inc. (ZFGN), a biopharmaceutical company yesterday announced that they will be suspending their development of beloranib and start to refocus its resources to its second generation MetAP2 inhibitor ZGN-1061. ZGN-1061 is used treat severe and complicated obesity. The company also announces it will be cutting jobs by a staggering 34% as part of its reorganization plans.
Zafgen, Inc. CEO’s Comments
“As the leader of the MetAP2 inhibitor field, we have spent many years validating the tremendous potential of this pathway for the treatment of complicated obesity with beloranib, which in multiple clinical trials demonstrated robust reductions in body weight, improvements in glycemic control, and other benefits related to cardiovascular disease risk,” said Thomas Hughes, Ph.D., President and Chief Executive Officer of Zafgen. “However, given the heightened complexity and future cost of beloranib development, balanced against the emerging product profile of ZGN-1061, we believe that the long-term opportunity for ZGN-1061 is more robust than for beloranib. Given our deep knowledge of this new and exciting drug class, and our strong cash position, we believe we are well-positioned to advance ZGN-1061 as a potential new treatment for prevalent obesity-related indications.” Globe Newswire
ZFGN Technical Analysis
ZFGN opened trading yesterday at $6.67 which was down from the previous days trading of $6.68. ZFGN closed trading yesterday at $6.75 and crashed down after market to $3.92, equivalent to a 42% decrease from the closing price. Taking a look at the daily chart we can see that we are in unchartered territory as ZFGN is trading at all time lows. Taking a closer look at the daily chart we can see that ZFGN has been on an overall downward trend dating back to September 18th, 2015 when it traded at $46.23. ZFGN has a float of 16.64 million shares and traded below the normal daily trading volume on Tuesday. For trading purposes, I would like to see ZFGN open trading on Wednesday below $5.00 and if it does I would be looking to take a short position at the bell. My stop loss would be $0.20 from my entry position fearing anything more than that and the stock would start to fill in the gap down.
Company Profile
Zafgen, Inc., a biopharmaceutical company, focuses on the development of therapeutics for patients suffering from obesity and obesity-related disorders. Its lead product candidate is the Beloranib, an injection, which is in Phase III clinical trials for the treatment of obesity and hyperphagia in patients with Prader-Willi syndrome; that has completed Phase II clinical trials to treat hypothalamic injury-associated obesity, including craniopharyngioma-associated obesity; and which has completed Phase IIb clinical trials for the treatment of severe obesity in the general population. The company is also developing ZGN-839, a liver-targeted methionine aminopeptidase 2 (MetAP2) inhibitor that is in pre-clinical studies for the treatment of nonalcoholic steatohepatitis and abdominal obesity, as well as other second-generation MetAP2 inhibitors to treat severe obesity. Zafgen, Inc. was founded in 2005 and is headquartered in Boston, Massachusetts.