Zafgen Inc. suspended development of an obesity drug whose testing was put on hold last year after two patients died during a clinical trial.
The Boston company said Tuesday in a statement that it would focus its resources on a separate obesity drug that will soon enter clinical studies.
As part of the shift, the company will reduce its workforce by 34 percent, from 47 to 31 employees, chief executive Thomas Hughes told analysts on a conference call.
Zafgen had spent years advancing its lead experimental drug, called Beloranib, which it said had significantly improved the health and reduced the body weight in clinical trials of patients with Prader-Willi Syndrome, a rare, potentially fatal genetic disorder that’s linked to obesity. But the latest trial was put on hold by the Food and Drug Administration after the patient deaths.
Hughes told analysts that the FDA would let Beloranib go forward only if it conducted “prohibitively costly” new studies. He said Zafgen had concluded the long-term opportunity for its other obesity drug, ZGN-1061, which treats a different set of patients and operates differently, was more robust.
“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,” Hughes said in the statement.
Safgen’s shares were down 41 percent in after-hours trading after ending the regular session at $6.75. The stock was trading above $46 before the company reported the deaths of the patients in the Beloranib trial.