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.
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