Shareholder Class Action Filed Against Zafgen, Inc. - ZFGN

RADNOR, Pa., Dec. 3, 2015

For additional information about this lawsuit, or to request information about this action online, please visit http://www.ktmc.com/new-cases/zafgen-inc.

Zafgen is a pharmaceutical company whose valuation is closely tied to the value of a single drug – beloranib (an anti-obesity treatment designed to make the body produce less fat and burn off excess fat as fuel).

The Complaint alleges that Zafgen and certain of its executive officers made a series of false and misleading statements to investors during the Class Period, and failed to disclose material adverse facts about the Company's business, operations, and prospects.  Specifically, the defendants are alleged to have made a series of misrepresentations about thrombotic adverse events in Zafgen's clinical trials of its leading drug candidate, beloranib.

Between October 12, 2015 and October 13, 2015, shares of Zafgen' common stock declined $18.65 per share, or over 54 percent, following rumors that a patient had died in an ongoing Phase 3 clinical trial of beloranib.  On October 14, 2015, Zafgen confirmed that a patient in its Phase 3 trial of beloranib had died.  However, Zafgen failed to disclose to investors at that time that the patient was receiving beloranib (not a placebo), and further failed to disclose news about thrombotic events in prior clinical trials of beloranib.

On October 15, 2015, the Food and Drug Administration ("FDA") informed Zafgen that beloranib was being placed on partial clinical hold. This action by the FDA caused Zafgen to make additional disclosures to investors on October 16, 2015, including that: (i) the patient who died was receiving beloranib; and (ii) there had been four thrombotic adverse events in prior clinical studies of beloranib (two more than previously reported), as well as two additional, previously undisclosed thrombotic events in ongoing studies, for a total of six thrombotic events out of 400 patients receiving beloranib (compared to zero thrombotic events in the approximately 150 patients treated with a placebo). 

Following this additional information from Zafgen, shares of the Company's common stock declined an additional $10.66 per share, or over 50 percent, to close on October 16, 2015 at $10.36 per share.