Biotech Stock Roundup: Celgene In Immuno-Oncology Deal, Zafgen Drops Lead Drug

 | Jul 20, 2016 03:36AM ET

This week, there were the usual regulatory and pipeline updates in the biotech sector. Biosimilars are taking center-stage with quite a few companies in the news this week related to their progress in this area.

Meanwhile, Zafgen (NASDAQ:ZFGN) , a company focused on obesity and complex metabolic disorders, has decided to suspend the development of its lead pipeline candidate. In other news, immuno-oncology continues to attract deals with Celgene (NASDAQ:CELG) agreeing to shell out up to $2.561 billion under a collaboration agreement.

Recap of the Week’s Most Important Stories

1. The obesity market continues to pose challenges with yet another company deciding to change its priorities. Zafgen said that it has decided to suspend the development of its lead pipeline candidate, beloranib, and to refocus its resources on the development of a second-generation MetAP2 inhibitor, ZGN-1061, in severe and complicated obesity.

Beloranib was placed on full clinical hold in Dec 2015 by the FDA. Following discussions with the agency, Zafgen decided that the obstacles, costs and development timelines for beloranib did not justify additional investment in the program. Zafgen also announced a workforce reduction.

A few weeks back, Arena, which has a marketed obesity drug in its portfolio, had announced a cut in its workforce and said that it would be shifting its priorities to its proprietary clinical stage pipeline. Though Arena did get some good news this week -- the FDA granted approval for a new once-daily formulation of the company’s obesity drug, Belviq.

2. Amgen (NASDAQ:AMGN) , which is facing the prospect of biosimilar competition for many of its core drugs, got a bit of a breather recently with the FDA issuing a complete response letter (CRL) for Sandoz’s biosimilar version of Amgen’s Neulasta (pegfilgrastim). Amgen is already facing biosimilar competition from Zarxio – Sandoz’s biosimilar version of Neupogen while an FDA advisory panel recently voted in favor of approving Sandoz’s biosimilar version of Enbrel.

Amgen itself is working on bringing biosimilars to market and recently got a favorable vote from an FDA advisory panel for its biosimilar version of AbbVie’s (NYSE:ABBV) top-selling drug, Humira. Last week, Amgen signed up with Japanese company, Daiichi Sankyo, to commercialize nine biosimilars in Japan including the biosimilar version of Humira (Read more: Juno In and Out of Clinical Hold, Amgen Biosimilar Gets Panel Backing ).