Zafgen said today that its lead drug candidate beloranib has been placed on partial clinical hold by the FDA—two days after the company acknowledged the death of a patient during a Phase III trial of the obesity treatment.

The death occurred in Zagen’s ongoing Beloranib Efficacy Safety and Tolerability in Prader-Willi syndrome (bestPWS), also known as ZAF-311. While the cause of death remains unknown, Zafgen said today in a statement: “It is now known that the patient was receiving beloranib.”

Due to previously reported thromboembolic events in ongoing and prior clinical trials of beloranib and the unknown nature of the death, the FDA gave verbal notice of a “partial clinical hold,” the company added.

The partial clinical hold affects ongoing or planned clinical trials, including ZAF-311 and ZAF-312. ZAF-311 is nearly complete, with the company saying it expects to report topline results in the first quarter of 2016.

Zafgen added that patients participating in ZAF-311 will be screened for existing thrombotic disease before they receive any further beloranib, and will be regularly monitored through the completion of the study.

Zafgen said it is considering similar screening and monitoring for its ongoing Phase IIb study (ZAF-203) in patients with severe obesity complicated by type 2 diabetes.

As for ZAF-312, that Phase III trial is now anticipated to be launched after ZAF-311 is completed and a full assessment of the safety and efficacy of beloranib is performed by the FDA, the company added.

“Patient safety is our top priority, and we will work closely with the FDA to implement these measures to support the further development of beloranib,” Zafgen CEO Thomas E. Hughes, Ph.D., said in the statement.

Shares of Zafgen fell 35%, to $22.15, on Monday after the company suddenly cancelled both a “road show” investor presentation arranged by RBC Capital, and a Wednesday investor dinner organized by Maxim Group. Those shares have yo-yoed since then, plunging another 29% to $15.75 on Tuesday, climbing back 33.5% to $21.02 yesterday, then falling again 29% this morning, to $14.85 as of 9 a.m. ET in after-hours trading.

Beloranib is a first-in-class methionine aminopeptidase 2 (MetAP2) inhibitor being developed as a twice-weekly injection drug for multiple indications. These include severe obesity in Prader-Willi Syndrome and obesity caused by hypothalamic injury, including craniopharyngioma-associated obesity and severe obesity in the general population.

Zafgen holds exclusive worldwide rights except in South Korea for the development and commercialization of beloranib. Zafgen has exclusively licensed beloranib from Chong Kun Dang Pharmaceutical Corporation (CKD Pharma) of South Korea.

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