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Zynerba price target boosted to $11 by Roth on positive results from ASD clinical trial with CBD skin gel Zygel

Roth analyst Scott Henry said Zynerba intends to meet with the FDA in the second half of the year

Zynerba Pharmaceuticals - Zynerba price target boosted to $11 by Roth on positive results from ASD clinical trial with CBD skin gel Zygel
Roth anticipates 'two positive phase 3 trials being required' before the Food and Drug Administration approves Zygel as a treatment for autism spectrum disorder

Roth Capital boosted Zynerba Pharmaceuticals Inc’s (NASDAQ:ZYNE) price target to $11 from $10.50 on higher odds of its flagship product Zygel (ZYN002), a patent-protected CBD skin gel, being approved to treat autism spectrum disorder (ASD).

In a note to investors on Wednesday Roth analyst Scott Henry maintained his Buy rating on Zynerba, while acknowledging positive results from Zygel’s open-label Phase 2 BRIGHT trial to treat symptoms of autism.

“Key takeaways from the release, in our opinion, include: 1) data was robust across multiple subscales, 2) importantly, data was strong in the ABC-C irritability subscale (required for prior approvals), and 3) the company anticipates meeting with the FDA in 2H20. Maintain Buy rating with PT increased to $11/share (from $10.50 based on higher approval probability for ASD indication),” wrote Henry.

READ: Zynerba Pharmaceuticals shares surge on "compelling" results from ASD clinical trial

ASD affects communication and behavior in around 1 million children and adolescent patients aged between five and 17 in the United States.

In the 14-week open-label exploratory Phase 2 BRIGHT trial, Zygel was given to 37 patients aged between 3 and 17 with moderate-to-severe symptoms of ASD as an add-on therapy to their standard of care using a variety of efficacy assessments.

Roth noted that “all five subscales” of the Aberrant Behavior Checklist – Community (ABC-C) as well as the Parent Rated Anxiety Scale – Autism Spectrum Disorder (PRAS-ASD) showed both “statistically significant and clinically meaningful (>25%) improvements” at 14 weeks of treatment from baseline.  

“The company intends to meet with the FDA in 2H20, and we anticipate two positive phase 3 trials to be required prior to FDA approval,” wrote Henry.

"Increasing our probability of approval for the ASD indication to 35% from 25% increases our price target to $11/share from $10.50/share," he added.

The Devon, Pennsylvania-based Zynerba's stock was up over 3% in afternoon trade to $5.76.   

The analyst also observed that the next major catalyst for the company is pivotal data for Zygel for the treatment of Fragile X Syndrome “expected in late June 2020.”

“We are encouraged that Zygel demonstrated symptomatic relief for ASD (which has some of the same symptoms as FXS) although the Fragile X trial will be placebo-controlled,” wrote Henry.

Fragile X is a genetic condition caused by a mutation in the FMR1 gene. The mutation causes the X chromosome to appear constricted, or fragile, under a microscope, hence its name. Patients with Fragile X often have learning disabilities and other cognitive impairments.  

Contact the author Uttara Choudhury at [email protected]

Follow her on Twitter: @UttaraProactive

Quick facts: Zynerba Pharmaceuticals

Price: 3.41 USD

NASDAQ:ZYNE
Market: NASDAQ
Market Cap: $85.08 m
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