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12:00 AM
 | 
Oct 19, 2015
 |  BioCentury  |  Finance

Zafgen speaks

Beloranib's prospects remain unclear despite Zafgen's conference call

The prospects for obesity candidate beloranib are not any clearer, even after Zafgen Inc. broke its week-long virtual silence with a Friday conference call to explain a partial clinical hold to investors. After a week fueled by rumors and speculation, initially triggered by a steep stock decline on no news, Zafgen is down 70% and trading barely above cash.

On Monday, the stock plummeted $12.25 (36%) to $22.15 on heavy volume amid general media reports that Zafgen had pulled out of non-road show investor meetings. As speculation mounted, and with no word from the company, the shares shed an additional $6.40 (29%) to $15.75 on Tuesday, again on heavy volume.

In the absence of any explanation from management, and with expected data events still months away, RBC Capital Markets analyst Simos Simeonidis released a note titled "What could be going on with ZFGN?" in which he hypothesized that something had gone wrong with the company's Phase III study in Prader-Willi syndrome, CEO Thomas Hughes was leaving, or M&A or an ex-U.S. partnership were in the works, among other possibilities.

At an informal industry event in the Bay Area Tuesday night, investors expressed to BioCentury their outrage with the company's silence in the face of the stock declines.

On Wednesday, Zafgen issued a bare-bones written statement disclosing a death from unknown causes...

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