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Updates on the regulatory front are eagerly awaited by investors in the pharma/biotech sector as they impact the share price of the concerned company. Regulatory updates include events like filing of marketing applications, acceptance of these applications for review by the regulatory agencies, reviews by advisory panels and finally, a response from the regulatory agency regarding the approval status.

Late last week, Zafgen, Inc. (ZFGN) announced that beloranib received orphan drug status in the EU for the treatment of Prader-Willi syndrome (PWS).

In the EU, orphan drug status is granted to a therapy that treats or aims to treat a life-threatening or chronically debilitating condition for which satisfactory treatment is not available and affects ≤5 patients in 10,000 people. This designation provides a 10-year period of marketing exclusivity in the EU after product approval.

According to the press release issued by Zafgen, PWS is the most common genetic cause of life-threatening obesity. Patients suffering from this condition experience constant and unrelenting hunger that leads to problematic food-related behaviors and gain excessive weight. Zafgen estimates that PWS is diagnosed in both males and females in the range of 1 person in 8,000 to 1 person in 50,000, around the world.

We remind investors that in Jan 2013, beloranib received orphan drug status in the U.S. for the treatment of PWS. Zafgen intends to initiate a phase III study on beloranib in late 2014 for this indication. Zafgen exclusively licensed beloranib from South Korea-based Chong Kun Dang Pharmaceutical Corp.

Investors looking for well-positioned stocks in the health care sector may consider Synergy Pharmaceuticals, Inc. (SGYP - Snapshot Report), Endo International plc (ENDP - Analyst Report) and BioCryst Pharmaceuticals, Inc. (BCRX - Snapshot Report). While Synergy Pharma carries a Zacks Rank #1 (Strong Buy), Endo and BioCryst hold a Zacks Rank #2 (Buy).

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