RBC Spoke With Zafgen Management After The Beloranib Patient Death, Here Are The Takeaways

After a patient died during the late-stage trial of Beloranib – a drug destined to the treatment of a rare genetic disorder – due to “undetermined” causes, analysts at RBC spoke with Zafgen’s CEO Tom Hughes and CFO Patty Allen.

The executives told the analysts that they still don’t know which trial arm the patient who passed away was on.

Given that the best PWS trial is 1:1:1 randomized PBO: 1.8mg: 2.4mg beloranib, it is not only unknown if the death was drug-related, but also if the patient was even on the drug.

What’s Next?

According to the report, Zafgen has been working with the FDA to determine the steps to follow. However, dosing has not been interrupted in the two ongoing trials, which are both close to completion.

“It is not clear at this point, whether the company will disclose whether the patient death occurred while on drug or placebo, when they find out. The decision will depend on how this may affect trial data integrity,” the experts added.

While it is of utmost importance to determine what caused the death, investors should take into account that the patient population involved in the trial has a 3 percent annual death rate. “The patients in the trial were treated for six months, so one death in 108 patients treated for six months is definitely within the expected range for this patient population,” the note expounded.

What About The Stock?

Taking into account the news, which introduces extra risk to an investment, RBC still rates Zafgen an Outperform on the back of the following:

• 1. The drug's efficacy and safety to this point.
• 2. The fact that it's already passed multiple DSMBs.
• 3. The fact that the 3 percent annual death rate mentioned above appears to be in line with the one that has just occurred.
• 4. The current risk/reward profile indicates that the company has approximately $8 per share in cash.

Disclosure: Javier Hasse holds no positions in any of the securities mentioned above.