Zafgen and Chondrial Therapeutics Announce Definitive Merger Agreement
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- Published on Friday, 20 December 2019 14:32
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Creates clinical-stage company focused on the development of novel protein replacement therapies for rare diseases
Chondrial Therapeutics’ lead asset, CTI-1601, currently being evaluated in Phase 1 clinical trial for Friedreich’s ataxia
BOSTON, MA and BALA CYNWYD, PA, USA I December 18, 2019 I Zafgen, Inc. (Nasdaq:ZFGN) and Chondrial Therapeutics, Inc., today announced they have entered into a definitive merger agreement under which Chondrial will become a wholly-owned subsidiary of Zafgen and the stockholders of Chondrial Therapeutics will become the majority owners of Zafgen’s outstanding common stock upon the close of the merger. The proposed merger will result in a combined publicly traded, clinical-stage biopharmaceutical company operating under a new name, Larimar Therapeutics, Inc.
“We are incredibly pleased to announce this proposed merger, as, once completed, we anticipate it will provide significant resources to advance CTI-1601, our novel therapeutic being developed for patients with Friedreich’s ataxia and expand our efforts on the development of additional potential treatments for other rare diseases,” said Carole Ben-Maimon, M.D., President and Chief Executive Officer of Chondrial Therapeutics. “Our current programs are based on our proprietary novel protein replacement therapy platform, which includes a cell penetrating peptide technology that allows the intracellular delivery of bioactive cargos. With this strong scientific foundation and company evolution, we believe we are well positioned to address complex rare diseases where patients are in need of innovative treatments.”
Chondrial Therapeutics’ lead asset, CTI-1601, is in clinical development for the treatment of Friedreich’s ataxia (FA), a progressive and irreversible mitochondrial disease caused by a genetic defect resulting in abnormally low amounts of frataxin (FXN). FA typically presents in childhood or adolescence and leads to devastating symptoms and early death. The company believes there are approximately 15,000 patients in the U.S and E.U. Currently, there are no cures and no therapies that can modify the course of the disease.
“After a thorough evaluation of strategic alternatives, the Board of Directors of Zafgen believes that this merger represents the highest-potential value creation opportunity for Zafgen stockholders,” said Jeffrey Hatfield, Chief Executive Officer, Zafgen. “We are excited about the prospects for Chondrial Therapeutics and its work to improve the lives of young patients with rare diseases, which aligns with our own values and mission.”
Chondrial Therapeutics separately announced today that Phase 1 dosing in patients began this month and that CTI-1601 has received Rare Pediatric Disease (RPD) Designation and Fast Track Designation from the U.S. Food and Drug Administration (FDA). Topline results from the Phase 1 clinical program are expected by the end of 2020.
“Having advanced Chondrial’s novel therapy for Friedreich’s ataxia from the lab to the clinic, we are extremely pleased to join forces with Zafgen for the next phase of the company’s development,” said Jonathan Leff, Partner, Deerfield Management and a Director of Chondrial. “With the financial resources and team in place, we look forward to employing Chondrial’s product engine and platform technology to benefit patients suffering from Friedreich’s ataxia as well as other serious diseases.”
CTI-1601 is comprised of human FXN bound to a carrier peptide. CTI-1601 was designed to cross both the cell membrane and mitochondrial membranes. After processing, mature human frataxin is intended to remain within the mitochondria to function. Nonclinical studies have shown promising results in several models of the disease, including heart, brain and muscle function, and overall survival.
Beyond CTI-1601, Chondrial Therapeutics plans to use its protein replacement therapy platform to design other fusion proteins to target additional orphan diseases characterized by deficiencies in intracellular bioactive compounds.
About the Proposed Merger
Under the terms of the merger agreement, stockholders of Chondrial will receive shares of newly issued Zafgen common shares in a private placement. Chondrial stockholders are expected to own approximately 60% of the combined company and current Zafgen stockholders will own approximately 40% of the combined company. The percentage of the combined company that Chondrial’s stockholders will own as of the close of the transaction is subject to adjustment based on the amount of Zafgen’s net cash at the closing date, among other adjustments as described in the merger agreement.
Upon closing of the transaction, Zafgen will be renamed Larimar Therapeutics, Inc. and will be headquartered in Bala Cynwyd, Pennsylvania. Carole Ben-Maimon, M.D. will serve as President and Chief Executive Officer of the combined company. The merger agreement provides that the Board of Directors of the combined company will be comprised of Peter Barrett, Ph.D., Carole Ben-Maimon, M.D., Thomas Daniel, M.D., Thomas Hamilton, Jonathan Leff, Frank Thomas, and one designee of Deerfield Management. The merger agreement has been unanimously approved by the Board of Directors of each company. The transaction is expected to close in the first half of 2020, subject to approvals by stockholders of each company and other customary closing conditions.
MTS Health Partners, L.P. is serving as the exclusive financial advisor to Zafgen and Goodwin Procter LLP is serving as legal counsel to Zafgen. McCarter & English, LLP is serving as legal counsel to Chondrial.
Conference Call Information
Zafgen and Chondrial Therapeutics will host an investor conference call today, December 18, 2019, at 8:30 a.m., Eastern Time, to discuss the merger as well as other forward-looking information. Investors and other interested parties may participate by dialing (844) 824-7428 in the United States or (973) 500-2177 outside the United States and referencing conference ID number 5688136. The call will also be webcast live on the Company's website at https://zafgen.gcs-web.com/events-and-presentations. A replay of this conference call will be available beginning at 11:30 a.m. ET on December 18, 2019 through December 25, 2019 by dialing (855) 859-2056 in the United States or (404) 537-3406 outside the United States. To access the replay please provide Conference ID number 5688136.
Zafgen (Nasdaq:ZFGN) is a biopharmaceutical company that has leveraged its proprietary MetAP2 biology platform to pioneer the study of MetAP2 inhibitors in both common and rare metabolic disorders. Learn more at www.zafgen.com.
About Chondrial Therapeutics
Chondrial Therapeutics is a clinical-stage biotechnology company focused on the treatment of complex rare diseases. The company’s lead compound, CTI-1601, is currently being evaluated in a Phase 1 clinical program as a potential treatment for Friedreich’s ataxia, a rare and progressive genetic disease. Chondrial Therapeutics also plans to use its protein replacement therapy platform to design other fusion proteins to target additional orphan diseases characterized by deficiencies in intracellular bioactive compounds. Learn more at www.chondrialtherapeutics.com.