Zafgen’s Path Forward Is Reverse Merger With Chondrial Therapeutics

Xconomy Boston — 

Zafgen stumbled in clinical trials testing its experimental therapies for metabolic diseases. Going forward, it will have a new name, new management, and a mitochondrial disorder drug from another company.

Boston-based Zafgen (NASDAQ: ZFGN) has entered a merger agreement with Chondrial Therapeutics, a rare disease drug developer just entering the clinic. Chondrial shareholders will own 60 percent of the combined company, Zafgen shareholders will hold the remaining 40 percent. It will have Zafgen’s stock listing and will operate as Larimar Therapeutics. The name references a rare gemstone, according to Chondrial CEO Carole Ben-Maimon, who will lead the combined company.

“As a rare disease company, we thought a rare gemstone would be an appropriate name,” Ben-Maimon said on a conference call to discuss the merger.

Larimar will be headquartered just outside of Philadelphia in Bala Cynwyd, PA, where Chondrial is based. The Zafgen and Chondrial boards of directors have unanimously approved the deal, which is still subject to a vote by shareholders of both companies.

Chondrial’s lead drug candidate, CTI-061, is an experimental treatment for Friedreich’s ataxia, an inherited disorder characterized by abnormally low amounts of frataxin, a mitochondrial protein. The disease leads to difficulty walking and progresses to problems in the heart and the brain. There are no FDA-approved drugs for the disease, which typically becomes fatal in early adulthood.

The Chondrial drug is an engineered version of frataxin meant to supplement low levels of that protein in the mitochondria of Friedreich’s ataxia patients. Ben-Maimon said the drug uses a cell-penetrating peptide to cross the cell and mitochondrial membranes. The drug is based on the research of R. Mark Payne, a professor of pediatric cardiology at the Indiana University School of Medicine (IU). Chondrial has licensed technology from IU and Wake Forest University.

Chondrial announced Wednesday that it has dosed the first patient in a Phase 1 study testing CTI-061. The double-blind, dose-ascending study will assess the safety and tolerability of the injectable drug in adults. Preliminary results are expected by the end of next year.

It’s unclear what the future holds for Zafgen’s metabolic drugs. CEO Jeffrey Hatfield said on the conference call that the merger with Chondrial was the best option for his company, but neither he nor Ben-Maimon discussed what Larimar will do with Zafgen’s research. The company had been developing drugs that block methionine aminopeptidase 2 (MetAP2), an amino acid. Its first compound, beloranib, was developed as a treatment for Prader-Willi syndrome, a rare genetic disorder that causes insatiable hunger. The deaths of two patients in Phase 3 testing led the FDA to place a clinical hold on the study in 2015.

Zafgen abandoned further development of beloranib and turned its attention to an experimental diabetes drug. But a little more than a year ago, the FDA halted tests of that drug due to cardiovascular concerns. Three months ago, Zafgen announced it was exploring options that included a merger or sale of the business.

Photo by Flickr user Brian Ruijter via a Creative Commons license