Zafgen's value halves as it gives up on lead obesity candidate

Obesity drug developer Zafgen (Nasdaq: ZFGN) saw its share price slide by more than 50% on Wednesday after it announced that it was ceasing development of its lead candidate beloranib in Prader-Willi syndrome (PWS).

The US-based company has told shareholders that this blow will result in a reduction of Zafgen’s workforce of 34% including the departure of senior staff members, as it refocuses its resources on development of a differentiated second-generation MetAP2 inhibitor, ZGN-1061, in severe and complicated obesity.

An inability to assure patient safety is the reason for the development of beloranib being halted, Zafgen’s chief executive Thomas Hughes wrote in a letter addressed to the “PWS community” following the announcement.