Each of the 3 analyst following Zynerba Pharmaceuticals, Inc. (ZYNE) forecast the stock jumping by 2,000% (yes, 2,000%!) by the end of 2023.
This article looks at what the company is focused on, its clinical trial progress to date, its latest quarterly financials and the investment risks associated with such an investment.
An original article by Lorimer Wilson, Managing Editor of munKNEE.com – Your KEY To Making Money!
About Zynerba Pharmaceuticals, Inc.
ZYNE reports – in paraphrased excerpts from its site – that:
- it is the leader in pharmaceutically-produced transdermal cannabinoid therapies for rare (less than 200K patients in the U.S.) and near-rare (around 1M patients in the U.S.) neuropsychiatric disorders which “modulate pathways in the central nervous system (CNS) that, when disrupted, cause neurological diseases such as Fragile X syndrome (FSX), 22q11.2 deletion syndrome (q22) and autism spectrum disorder (ASD)”;
- it has put together an experienced and dedicated team (see page 32 here) with proven development and commercialization track records and extensive experience in transdermal delivery, orphan diseases, neurology, and psychiatry led by Armando Anido, Chairman and Chief Executive Officer since October 2014, who has more than 30 years of executive, operational and commercial leadership experience in the biopharmaceutical industry, particularly in leading CNS transdermal patch and gel products through the entire product life cycle.
About Fragile X Syndrome (FSX)
FXS, as described by Elizabeth Berry-Kravis, et al, in the Journal of Neurodevelopmental Disorders (see here), and paraphrased here:
- is a rare genetic developmental disability that is the leading known cause of both inherited intellectual disability and autism spectrum disorder;
- affects 1 in 3,600 – 4,000 males and 1 in 4,000 – 6,000 females and is the most commonly inherited intellectual disability in males and a significant cause of intellectual disability in females, and the leading genetic cause of ASD;
- negatively affects synaptic function, plasticity and neuronal connections, and results in a spectrum of intellectual disabilities and behavioral symptoms, such as anxiety, aggression toward others, irritability, temper tantrums, shyness, and a preference for solitary activities;
- affects approximately 78,000 people in the U.S. and approximately 121,000 in the EU and U.K.; and
- has yet to receive any regulatory approvals for treatment despite decades of preclinical research and interventional clinical trials.
About 22q11.2 Deletion Syndrome (22q)
DiGeorge syndrome is more accurately known by the broader term “22q11.2 deletion syndrome” and
- is the second most common chromosomal disorder after Down syndrome. It is caused by a small missing piece of the 22nd chromosome near the middle of the chromosome at a location designated q11.2,
- is linked to poorer adaptive behaviors for children such as self-care and communication skills that affect daily life such as:
- major anxiety which is the most common neuropsychiatric symptom,
- withdrawn behavior,
- cognitive impairment,
- are at an increased risk of developing mental illnesses such as schizophrenia
- is estimated to occur in every 3,000 to 6,000 live births, suggesting that there are approximately 83,000 people with 22q in the U.S.
Given its prevalence and severity, however, the disease has not received any regulatory approvals for treatment despite decades of preclinical research and interventional clinical trials.
Zynerba is leading the way in the clinical development of Zygel, also known as ZYN002, a pharmaceutically-manufactured cannabidiol formulated as a patent-protected permeation-enhanced clear gel designed to provide controlled delivery into the bloodstream through the skin for the potential treatment of behavioral symptoms associated with FXS, 22q and ASD.
Zynerba reports that:
- “recent studies suggest that cannabidiol may modulate the endocannabinoid system (ECS) which regulates neuronal development and cognitive function” such as:
- sleep, mood, stress, appetite and digestion, learning and memory, reproduction and fertility, chronic pain, inflammation and other immune system responses, skin and nerve function, bone remodeling and growth, motor control, cardiovascular system function, muscle formation and liver function, and is the pathogenesis of FXS.
In addition, the company reports that:
- been issued a patent for the “Treatment of 22q11.2 Deletion Syndrome With Cannabidiol,” by the U.S. Patent and Trademark Office. The patent expires in 2040 and is one of seven corresponding U.S. patents and one corresponding EU patent related to methods of treating FXS, 22q and ASD,
- has received orphan drug designation for cannabidiol, the active ingredient in Zygel, from the FDA and the European Commission for the treatment of FXS and by the FDA for the treatment of 22q and
- has had Zygel designated a Fast Track development program for treatment of behavioral symptoms of FXS.
Zynerba conducted a Phase 2 clinical study on the efficacy, safety and impact of Zygel by administering the transdermal gel to children and adolescents with FSX and 22q and found that:
- 75% of patients showed clinically meaningful improvements at week 14 compared to the baseline,
- Zygel was well tolerated,
- and the safety profile was consistent with previously released data from other Zygel clinical trials.
In the near term, while the data from the Company’s ASD clinical development program to date had been progressing well, the Company has decided:
- to defer the start of the Phase 3 development program in ASD until the first half of 2024 given:
- the difficult financing market,
- and the higher than expected cancellations of initial screening visits at the investigational centers as a result of unusually high rates of RSV (respiratory syncytial virus), influenza, and the continued impact of COVID-19 among children and adolescents, resulting in slower than anticipated enrollment and
- to prioritize its resources on FXS and 22q.
For more detailed information please refer to the Company’s latest corporate presentation here.
Clinical Pipeline & Expected Milestones
Zynerba’s Plans For Future Growth
In 2023/24, Zynerba expects:
- to have concluded its confirmatory Pivotal Phase 3 trial results in the first half of 2024 for FXS and
- to finalize regulatory pathway with the FDA in 2023 and then initiate Phase 3 soon after receipt of the RECONNECT topline results with a successful completion expected to satisfy requirements for an
NDA submission in the U.S. and a marketing authorization application in the EU.
By 2026, Zynerba intends:
- to launch Zygel for FXS into a $1.9B+ U.S. market opportunity,
- to establish a fully integrated organization with a U.S. commercial presence,
- to prepare for EU approval in FXS and
- to advance the 22q Ph3 program towards completion.
Beyond 2026, Zynerba plans:
- to launch Zygel in FXS via strategic partners in EU elsewhere,
- to launch Zygel into the additional multi-billion dollar market of 22q,
- to optimize Zygel growth with additional synergistic indication and
- to accelerate further growth through complimentary asset licensing and acquisition.
3Q 2022 Financial Results
Zynerba Pharmaceuticals, Inc., with a market capitalization of only $28M, is still in the product research and development of novel compounds and, as such, has no products and no revenue and requires a great deal of money to fund their R&D expenses. That being said, it reported in its last quarter financial report (see here) ending September 30, 2022, that it had $55.9 million in cash and cash equivalents which the company deemed sufficient to see the company through mid-2024. For a detailed look at all the financial metrics related to Zynerba in the last quarter and for every year going back to 2018 go here.
Stock Price History and Forecast
Zynerba’s stock price declined 80% in 2022 which was only slightly more than the 70% decline experienced by the 6 major clinical-stage psychedelic stocks I follow in the munKNEE Psychedelic Drug Stocks Index (see details here). Based on 3 analyst ratings (see here), however, the stock is forecast to jump by 2015% to $11.00 by the end of 2023 from its $0.52 close on February 17th, 2023.
The company reports that their cash position of US$55 million is sufficient to advance the company through its key value-creating clinical milestones without the need to raise additional financing over the next 1.5 years. That being said, however,
- were Zynerba to have repeated set-backs in its various research studies current investors and potential new investors alike could lose confidence in the eventual success of the company’s efforts and such negative sentiment could negatively impact the stock price,
- were another company successful in developing a treatment for FXS, 22q or ASD before Zynerba did, that would most likely negatively impact the stock price, as well and, even more so, if such a competitor were to take the treatment for one of those diseases to market and, finally,
- were senior management to depart, especially the CEO, that might cause the company to lose focus which would slow down its progress in its research and development.
From my analysis of Zynerba Pharmaceuticals, in and of itself, and the extremely optimistic analyst stock price projections stated above, I think Zynerba would make a great buy and hold investment. In addition to that, were the Company to bring any one of its products directly to market itself, or be acquired by a major pharmaceutical company, its stock price should go up dramatically.