8-K
Larimar Therapeutics, Inc. (LRMR)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENTREPORT
Pursuant to Section 13 or 15(d)
of The Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): March 5, 2020
Zafgen, Inc.
(Exactname of registrant as specified in its charter)
| DELAWARE | 001-36510 | 20-3857670 |
|---|---|---|
| (State or other jurisdiction<br><br><br>of incorporation) | (Commission<br><br><br>File Number) | (I.R.S. Employer<br><br><br>Identification No.) |
| 3 Center Plaza, Suite 610<br><br><br>Boston, Massachusetts | 02108 | |
| --- | --- | |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code(617) 622-4003
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)<br> |
|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act<br>(17 CFR 240.14a-12) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| --- | --- |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | TradingSymbol(s) | Name of each exchangeon which registered |
|---|---|---|
| Common Stock | ZFGN | NASDAQ Global Market |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Condition.
On March 5, 2020, Zafgen, Inc. (the “Company”) announced its financial results for the fourth quarter of 2019 and for the year ended December 31, 2019. A copy of the press release is being furnished as Exhibit 99.1 to this Report on Form 8-K and is incorporated by reference herein.
The information in this Report on Form 8-K and Exhibit 99.1 attached hereto is intended to be furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
| Exhibit<br>No. | Description |
|---|---|
| 99.1 | Press release issued by Zafgen, Inc. on March 5, 2020, furnished herewith. |
* * *
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Date: March 5, 2020 | ZAFGEN, INC. | |
|---|---|---|
| By: | /s/ Jeffrey S. Hatfield | |
| Jeffrey S. Hatfield | ||
| Chief Executive Officer |
EX-99.1
Exhibit 99.1
Zafgen Reports Fourth Quarter and Full Year 2019 Financial Results
Zafgen and Chondrial Therapeutics previously announced a definitive merger agreement
Merger creates clinical-stage company focused on the development of novel protein replacement therapies for rare diseases
Transaction expected to close in the second quarter of 2020
Boston, MA, March 5, 2020 – Zafgen, Inc. (Nasdaq:ZFGN) today reported its fourth quarter and full year 2019 financial results.
In December 2019, Zafgen and Chondrial Therapeutics, Inc., announced that the two companies had entered into a definitive merger agreement. Under the merger agreement, Chondrial Therapeutics will become a wholly-owned subsidiary of Zafgen, and the stockholders of Chondrial Therapeutics will become the majority owners of Zafgen’s outstanding common stock upon the close of the merger. The proposed merger will result in a combined publicly traded, clinical-stage biopharmaceutical company operating under a new name, Larimar Therapeutics, Inc. The transaction is expected to close in the second quarter of 2020, subject to approvals by stockholders of each company and other customary closing conditions.
Chondrial Therapeutics’ lead asset, CTI-1601, is in Phase 1 clinical development for the treatment of Friedreich’s ataxia (FA), a progressive and irreversible mitochondrial disease caused by a genetic defect resulting in abnormally low amounts of frataxin. FA typically presents in childhood or adolescence and leads to devastating symptoms and early death. The company believes there are approximately 15,000 patients in the U.S. and E.U. Currently, there are no cures and no therapies that can modify the course of the disease. CTI-1601 has received Rare Pediatric Disease Designation and Fast Track Designation from the U.S. Food and Drug Administration. Topline results from the Phase 1 clinical program are expected by the end of 2020.
Fourth Quarter and Full Year 2019 Financial Results
Cash, Cash Equivalents and Marketable Securities
As of December 31, 2019, the Company had cash, cash equivalents and marketable securities totaling $70.3 million.
Net Loss
The Company reported a net loss for the fourth quarter of 2019 of $7.3 million, or $0.19 per share, compared to a net loss of $14.6 million, or $0.39 per share, for the fourth quarter of 2018. The net loss for the fourth quarter of 2019 includes $1.5 million of restructuring charges. For the full year 2019, the Company reported a net loss of $45.4 million, or $1.22 per share, compared to $61.4 million, or $1.90 per share, for the full year 2018. The net loss for the full year 2019 includes $5.6 million of restructuring charges.
The weighted average common shares (basic and diluted) outstanding used to compute net loss per share were 37.4 million for the fourth quarter of 2019 compared to 37.0 million for the same quarter of 2018. For the full year 2019, weighted average common shares (basic and diluted) outstanding used to compute net loss per share were 37.3 million compared to 32.2 million for the full year 2018.
Research and Development Expenses
Research and development expenses for the fourth quarter of 2019 were $0.4 million compared to $11.5 million for the fourth quarter of 2018. The decrease in research and development expenses compared to the prior year period was primarily due to the discontinuation of the MetAP2 program. Research and development expenses in the fourth quarter of 2019 consist of wind-down costs associated with closing out the MetAP2 program.
For the full year 2019, research and development expenses were $23.9 million, compared to $47.9 million for the full year 2018. The decrease in research and development expenses for the full year period was primarily due to the decision to discontinue the MetAP2 program during the third quarter of 2019.
Restructuring Charges
Restructuring charges for the fourth quarter and full year 2019 were $1.5 million and $5.6 million, respectively, and include personnel related costs primarily related to severance expenses as a result of the multiple reductions in workforce and contract termination costs implemented during 2019.
General and Administrative Expenses
General and administrative expenses for the fourth quarter of 2019 were $5.3 million, compared to $3.2 million for the fourth quarter of 2018. The increase in general and administrative expenses as compared to the prior year period was primarily due to an increase in professional fees related to strategic alternative activities and an increase in personnel related costs following the signing of the definitive merger agreement.
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For the full year 2019, general and administrative expenses were $16.2 million, compared to $13.2 million for the full year 2018. The increase in general and administrative expenses for the full year 2019 as compared to the prior year period was primarily due to an increase in professional fees related to strategic alternative activities and an increase in personnel related costs following the signing of the definitive merger agreement.
About Zafgen
Zafgen (Nasdaq:ZFGN) is a biopharmaceutical company that has leveraged its proprietary MetAP2 biology platform to pioneer the study of MetAP2 inhibitors in both common and rare metabolic disorders. Learn more at www.zafgen.com.
About Chondrial Therapeutics
Chondrial Therapeutics is a clinical-stage biotechnology company focused on the treatment of complex rare diseases. The company’s lead compound, CTI-1601, is currently being evaluated in a Phase 1 clinical program as a potential treatment for Friedreich’s ataxia, a rare and progressive genetic disease. Chondrial Therapeutics also plans to use its protein replacement therapy platform to design other fusion proteins to target additional orphan diseases characterized by deficiencies in intracellular bioactive compounds. Learn more at www.chondrialtherapeutics.com.
Additional Information about the Proposed Merger and Where to Find It
This communication relates to the proposed merger transaction involving Zafgen, Inc. (“Zafgen”) and Chondrial Therapeutics, Inc. (“Chondrial”) and may be deemed to be solicitation material in respect of the proposed merger involving Zafgen and Chondrial. In connection with the proposed merger, Zafgen intends to file relevant materials with the Securities and Exchange Commission (the “SEC”), including a proxy statement relating to the approval of the merger agreement.Investors and security holders of Zafgen are urged to read these materials when they become available because they willcontain important information about Zafgen, Chondrial and the proposed merger. The proxy statement and other relevant materials (when they become available), and any other documents filed by Zafgen with the SEC, may be obtained free of charge at the SEC web site at www.sec.gov. In addition, investors and security holders may obtain free copies of the documents filed with the SEC by Zafgen by directing a written request to: Zafgen, Inc., 3 Center Plaza, Suite 610, Boston, Massachusetts 02108, Attention: Secretary. Investors and security holders are urged to read the proxy statement and other relevant materials when they become available before making any voting or investment decision with respect to the proposed merger.
This communication shall not constitute an offer to sell or the solicitation of an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.
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most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q filed with the SEC, and in otherfilings that Zafgen makes and will make with the SEC in connection with the proposed merger, including the proxy statement described above under “Additional Information about the Proposed Merger and Where to Find It.” You shouldnot place undue reliance on these forward-looking statements, which apply only as of the date of this communication. Zafgen expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-lookingstatements contained herein to reflect any change in its expectations with regard thereto or any change in events, conditions or circumstances on which any such statements are based.
Media/Investor Relations Contacts:
Zafgen, Inc.
Patricia Allen
Chief Financial Officer
617-648-9792
Media
Krystle Gibbs
Ten Bridge Communications
508-479-6358
Investors
John Woolford
Westwicke
443-213-0506
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ZAFGEN, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share data)
(Unaudited)
| Year Ended December 31, | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| 2019 | 2018 | 2017 | |||||||
| Revenue | $ | — | $ | — | $ | — | |||
| Operating expenses: | |||||||||
| Research and development | 23,886 | 47,929 | 40,839 | ||||||
| General and administrative | 16,215 | 13,193 | 12,160 | ||||||
| Restructuring charges | 5,553 | — | — | ||||||
| Total operating expenses | 45,654 | 61,122 | 52,999 | ||||||
| Loss from operations | (45,654 | ) | (61,122 | ) | (52,999 | ) | |||
| Other income (expense): | |||||||||
| Interest income | 1,989 | 1,889 | 996 | ||||||
| Interest expense | (1,766 | ) | (1,898 | ) | (165 | ) | |||
| Foreign currency transaction gains (losses), net | 25 | (237 | ) | 140 | |||||
| Total other income (expense), net | 248 | (246 | ) | 971 | |||||
| Net loss | $ | (45,406 | ) | $ | (61,368 | ) | $ | (52,028 | ) |
| Net loss per share, basic and diluted | $ | (1.22 | ) | $ | (1.90 | ) | $ | (1.90 | ) |
| Weighted average common shares outstanding, basic and diluted | 37,347,199 | 32,228,721 | 27,433,239 |
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ZAFGEN, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share data)
(Unaudited)
| Three Months Ended December 31, | ||||||
|---|---|---|---|---|---|---|
| 2019 | 2018 | |||||
| Revenue | $ | — | $ | — | ||
| Operating expenses: | ||||||
| Research and development | 423 | 11,457 | ||||
| General and administrative | 5,324 | 3,234 | ||||
| Restructuring charges | 1,534 | — | ||||
| Total operating expenses | 7,281 | 14,691 | ||||
| Loss from operations | (7,281 | ) | (14,691 | ) | ||
| Other income (expense): | ||||||
| Interest income | 335 | 675 | ||||
| Interest expense | (362 | ) | (499 | ) | ||
| Foreign currency transaction gains (losses), net | 57 | (55 | ) | |||
| Total other income, net | 30 | 121 | ||||
| Net loss | $ | (7,251 | ) | $ | (14,570 | ) |
| Net loss per share, basic and diluted | $ | (0.19 | ) | $ | (0.39 | ) |
| Weighted average common shares outstanding, basic and diluted | 37,377,223 | 37,036,065 |
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ZAFGEN, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)
(Unaudited)
| 2018 | |||||
| Assets | |||||
| Current assets: | |||||
| Cash and cash equivalents | 27,211 | $ | 49,331 | ||
| Marketable securities | 43,050 | 68,735 | |||
| Tax incentive receivable | 243 | 1,536 | |||
| Prepaid expenses and other current assets | 999 | 1,728 | |||
| Total current assets | 71,503 | 121,330 | |||
| Property and equipment, net | 821 | 375 | |||
| Operating lease<br>right-of-use assets | 7,051 | — | |||
| Restricted cash | 1,339 | — | |||
| Other assets | 20 | 57 | |||
| Total assets | 80,734 | $ | 121,762 | ||
| Liabilities and Stockholders’ Equity | |||||
| Current liabilities: | |||||
| Accounts payable | 632 | $ | 3,590 | ||
| Accrued expenses | 1,190 | 4,261 | |||
| Accrued restructuring costs | 2,709 | — | |||
| Operating lease liabilities, current | 386 | — | |||
| Notes payable, current | 7,273 | 5,455 | |||
| Total current liabilities | 12,190 | 13,306 | |||
| Notes payable, long-term | 8,464 | 15,185 | |||
| Operating lease liabilities | 6,456 | — | |||
| Total liabilities | 27,110 | 28,491 | |||
| Stockholders’ equity: | |||||
| Preferred stock; 0.001 par value per share; 5,000,000 shares authorized as of<br>December 31, 2019 and 2018; no shares issued and outstanding as of and December 31, 2019 and 2018 | — | — | |||
| Common stock, 0.001 par value per share; 115,000,000 shares authorized as of<br>December 31, 2019 and 2018; 37,446,498 and 37,287,221 shares issued and outstanding as of December 31, 2019 and 2018, respectively | 37 | 37 | |||
| Additional paid-in capital | 449,903 | 444,212 | |||
| Accumulated deficit | (396,351 | ) | (350,945 | ) | |
| Accumulated other comprehensive loss | 35 | (33 | ) | ||
| Total stockholders’ equity | 53,624 | 93,271 | |||
| Total liabilities and stockholders’ equity | 80,734 | $ | 121,762 |
All values are in US Dollars.
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