NEW YORK, Oct. 23, 2015 (GLOBE NEWSWIRE) -- Pomerantz LLP announces that a class action lawsuit has been filed against Zafgen, Inc. (“Zafgen” or the “Company”) (NASDAQ:ZFGN) and certain of its officers. The class action, filed in United States District Court, District of Massachusetts, is on behalf of a class consisting of all persons or entities who purchased Zafgen securities between January 12, 2015 and October 16, 2015 inclusive (the “Class Period”).  This class action seeks to recover damages against Defendants for alleged violations of the federal securities laws under the Securities Exchange Act of 1934 (the “Exchange Act”).  

If you are a shareholder who purchased Zafgen securities during the Class Period, you have until December 21, 2015 to ask the Court to appoint you as Lead Plaintiff for the class. A copy of the Complaint can be obtained at www.pomerantzlaw.com. To discuss this action, contact Robert S. Willoughby at rswilloughby@pomlaw.com or 888.476.6529 (or 888.4-POMLAW), toll free, ext. 9980. Those who inquire by e-mail are encouraged to include their mailing address, telephone number, and number of shares purchased.

Zafgen is a small pharmaceutical company whose valuation is closely tied to the value of a single drug—an anti-obesity drug called beloranib. On January 12, 2015, Zafgen filed a Form S-1 in connection with a follow-on offering. In that filing, Zafgen described six previously completed clinical trials of beloranib and disclosed that “there were two serious thrombotic adverse events” in one of the Phase 2 trials of beloranib (the ZAF-201 trial). Until October 16, 2015, Zafgen had never disclosed any other thrombotic adverse events related to beloranib.

The Complaint alleges that the Defendants made misleading misrepresentations about thrombotic adverse events in previous clinical trials of its leading drug candidate, beloranib. Until October 16, 2015, Zafgen had only ever disclosed two thrombotic adverse events in one prior clinical trial.

On October 12 and October 13, 2015, however, Zafgen shares dropped sharply. Between the opening of trading on October 12, 2015 and the close of trading on October 13, 2015, Zafgen shares dropped from $34.76/share to $15.75/share (a 54.7 percent drop). The drop was fueled by rumors in the marketplace 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. Zafgen failed to disclose, however, that the patient was receiving beloranib (i.e., not a placebo) and failed to disclose anything about thrombotic events in prior clinical trials.

On October 15, 2015, the Food and Drug Administration informed Zafgen that beloranib has been placed on partial clinical hold. This forced Zafgen to make additional disclosures 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.

The Company's stock dropped sharply on this news. After closing at $21.02/share on October 15, 2015, Zafgen stock closed at $10.36/share on October 16, 2015 (a 50.7 percent drop).

The Pomerantz Firm, with offices in New York, Chicago, Florida, and Los Angeles, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, the Pomerantz Firm pioneered the field of securities class actions. Today, more than 70 years later, the Pomerantz Firm continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. See www.pomerantzlaw.com.

CONTACT:
Robert S. Willoughby
Pomerantz LLP
rswilloughby@pomlaw.com

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