Biotech Stock News (SYN) (ZFGN) (ARNA) (OREX) (VVUS)

Synthetic Biologics (NYSE:SYN)

On Thursday December 3, 2015 Synthetic Biologics announced positive phase 2 results for the prevention of a bacterial infection known as C. difficile. The drug the company is using to combat against this bacterial infection is known as SYN-004. This drug was created for the purpose of clearing out IV fluid, such as Ceftriaxone, out of the digestive tract area without affecting the portion in the blood stream.

The reason for this is because when a patient takes Ceftriaxone, or another antibiotic it ends up staying in the digestive tract. This in turn causes an imbalance of good bacteria in the gut, which can lead to the introduction of bacteria such as C. difficile. The company reported that both the 75 mg and 100 mg doses achieved the ability to clear Ceftriaxone in the digestive tract without affecting the portion that hits the blood stream. This is a good thing because efficacy of the drug to treat the infection is maintained, and the portion of the antibiotic remaining in the gut is cleared to avoid further infection.

The phase 2 trial results were good, but the bad news was that the share price didn’t react the way it should have. Synthetic Biologics started at $2.80 per share and hit a high of $3.05 per share the very same day. The problem was that the share price closed the day up only 1.4% to $2.90 per share.

Zafgen Inc (NASDAQ:ZFGN)

On Wednesday December 2, 2015 shares of Zafgen tumbled by 60% after the company reported that there was another patient death in the company’s obesity trial. The obesity trial in question is one that is treating patients with Prader-Will Syndrome. This is a devastating syndrome in which patients are hungry all the time, and they end up with long-term obesity problems. The company’s drug beloranib is used to stop these patients from experiencing constant hunger.

The reason why the shares tanked is because it was announced that there was another patient death in the beloranib trial. Another death in the same trial? Yes, because a few months back another patient had died as well, and that patient’s cause of death still remains unknown. The patient that had died recently did so from blockage of an artery in the lung. The FDA had already placed the beloranib trial on a partial clinical hold because of the first patient death. This second patient death only adds more problems to a company that is already struggling.

Right now, there is no telling what will happen after this most recent patient death, but there will be some more inquiry from the FDA about this problem. This stock like many other obesity stocks have a great deal of risk. All other biotechs that have had their obesity drugs approved like Arena pharmaceuticals (NASDAQ:ARNA), Orexigen Therapeutics (NASDAQ:OREX), and Vivus (NASDAQ:VVUS) have been required by the FDA to run safety trials. This is because the FDA is still not fully convinced that these companies have products that can be considered 100% safe. There will be a lot more trouble for Zafgen ahead, therefore the stock will have enormous downward pressure going forward.

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