Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.

Biotech Analysis Central Preview Series: Zafgen

|About: Zafgen, Inc. (ZFGN)

This is a preview blog series on what you can expect when subscribing to my "Biotech Analysis Central" service marketplace. For the full article you must subscribe to my service. This is just an intro of two snippets on the research articles that are written. Thus far, there are about 50+ research reports on both both small-cap and mid-cap biotech stocks with full analysis of the pipeline, catalysts, financials, and clinical trial analysis. If you want to read more then please subscribe to my marketplace service. As always I offer a 2-week free trial just to show you how helpful my service is. You can cancel anytime before the 2-week free trial is up and never be charged a dime.

First Section Of Marketplace Article (This article piece was originally written on January 21, 2019)

The next article I wanted to discuss for the "Biotech Analysis Central News Series" is a biotech by the name of Zafgen (ZFGN). The reason why I wanted to go over this biotech is because it announced positive data from its phase 2 trial treating patients with type 2 diabetes. The study met all the primary endpoints, which means that the trial can be further explored in this indication. This is a large market opportunity for the company. There is still some way to go before any type of regulatory approval, but this biotech is well on its way. The problem is that it just needs to take care of the clinical hold placed on its second MetAP2 inhibitor product, ZGN-1061, which is being used to treat this patient population. It will have to work hard to see if it can convince the FDA to lift the clinical hold. For now, the positive mid-stage results is at least a partial win.

Conclusion of Marketplace Article

The final verdict is that Zafgen is worth a speculative buy at $4.74 per share. There is the clinical hold to get through, but as the analyst noted above it should be dealt with fairly easily. Had the FDA clinical hold been placed because of safety issues from the current type 2 diabetes trial with ZGN-1061, then I would say that lifting the hold may not even be feasible. But because the hold was placed because of the older generation version of the drug, beloranib, I don't see why the hold won't be lifted. The only downside is that getting the hold lifted may take longer if something unexpected happens. For instance, if the FDA needs more time to look at Zafgen's proposals to fix the issues. The type 2 diabetes market is huge, going to be a $64 billion opportunity by 2026, so that is a good target for this biotech to go after. In addition, there is no competition for the Prader Will Syndrome indication because nothing is approved for it. That is another avenue that can be explored well. If all else fails, early programs may take time to develop but still have potential as backups. On the early programs front, the company has noticed good nonclinical data in treating NASH as well which is another large market. I believe that Zafgen is worth a look, especially since it is still trading so low after the blowup in 2016 on beloranib and the clinical hold on ZGN-1061 back in November of 2018. Even with the stock trading at $4.74 per share, the market cap for the company stands at only $174 million. If and when the hold is lifted, I have the belief that the stock will likely gap up much higher.

This article is published by Terry Chrisomalis, who runs the Biotech Analysis Central pharmaceutical service on Seeking Alpha Marketplace. If you like what you read here and would like to subscribe to, I'm currently offering a two-week free trial period for subscribers to take advantage of. My service offers deep dive analysis of many pharmaceutical companies. The Biotech Analysis Central SA marketplace is $49 per month, but for those who sign up for the yearly plan will be able to take advantage of a 33.50% discount price of $399 per year.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.