Zafgen Inc said the U.S. Food and Drug Administration was putting a late-stage study testing its experimental obesity drug on complete hold after a second patient died during the trial.
The company’s shares fell 7.4 percent to $5.81 in extended trading after closing down 60 percent on Wednesday.
A complete clinical hold is an order that the FDA issues to a sponsor to suspend all clinical work requested under the company’s investigational new drug application.
Earlier on Wednesday, the company had said a patient receiving the obesity drug, beloranib, had died from a blockage in an artery in the lung.
Zafgen, which is testing beloranib for a rare genetic eating disorder called Prader-Willi syndrome, expects to report results from the study in the first quarter.
The company said it was working with experts to better understand the incidence and the occurrence of such artery blockages in Prader-Willi syndrome patients.
“We remain committed to advancing beloranib as a potential new therapy for this underserved patient population,” CEO Thomas Hughes said in a statement.
The company said in October a patient had died in the trial, but the cause of death was unknown. Following the disclosure the FDA placed the trial under a partial clinical hold, citing previously reported blood clotting in ongoing and completed studies.
The two deaths in the 108-patient study come after clean smaller studies on the drug, where the most severe side-effect seen was bruising where the patients were given the injection.
Zafgen is also developing the drug to treat other weight-related disorders such as severe and complicated obesity, and obesity that results from damage to a part of the brain.
Obesity treatments have been plagued by safety concerns, particularly related to heart risk and birth defects, and several have been taken off the market.
The FDA approved drugs made by Vivus Inc, Orexigen Therapeutics Inc and Arena Pharmaceuticals Inc in the recent past, but has asked for additional studies to check for safety of these drugs.
The treatments suppress appetite by tinkering with nerve signals, tricking the brain into thinking that the stomach is full.
Zafgen’s beloranib takes a different approach. The drug is designed to make the body produce less fat and burn off the excess as fuel.
The drug works by blocking an enzyme called methionine aminopeptidase 2, which plays a key role in the production and use of fatty acids.
(Reporting by Vidya L Nathan and Amrutha Penumudi in Bengaluru; Editing by Saumyadeb Chakrabarty and Lisa Shumkaer)