viewZynerba Pharmaceuticals

Zynerba's CBD skin gel Zygel offers a potential goldmine of therapies for Fragile X syndrome and other conditions


In addition to Fragile X Syndrome, the gel is in clinical development in patients with refractory epilepsy, Autism Spectrum Disorder and 22q11.2 Deletion Syndrome

Zynerba Pharmaceuticals - Zynerba's CBD skin gel Zygel offers a goldmine of therapies for Fragile X syndrome, and other conditions

Quick facts: Zynerba Pharmaceuticals


Price: 4.35 USD

Market Cap: $179.44 m
  • Developing novel transdermal CBD treatments to treat patients suffering rare epilepsies and neurological disorders
  • Lead development candidate Zygel offers a potential goldmine of therapies for multiple conditions
  • Zygel is being developed for patients suffering from Fragile X syndrome, a genetic condition that causes learning disabilities 

What Zynerba does:

Zynerba Pharmaceuticals Inc (NASDAQ:ZYNE) is doing trailblazing work pushing clinical trials for cannabis-derived treatments. The specialty pharma company is developing novel transdermal CBD treatments for patients suffering rare epilepsies and neurological disorders.

The Devon, Pennsylvania-based company’s main product candidate is Zygel, a patent-protected CBD skin gel, which was earlier known as ZYNOO2. 

Recent studies have suggested that neuropsychiatric conditions like Fragile X Syndrome — the most common form of inherited learning disability and attention deficit disorder — are associated with a disruption in the endocannabinoid system, and CBD may improve certain core social and behavioral symptoms by modulating the biological system.

Zygel also offers a potential goldmine of therapies for other conditions. In addition to Fragile X Syndrome, the gel is in clinical development in patients with refractory epilepsy, Autism Spectrum Disorder and 22q11.2 Deletion Syndrome, a disorder caused by a small missing piece of the 22nd chromosome. This tiny missing portion can affect every system in the body. 

Zygel is also being tested for a heterogeneous group of rare and ultra-rare epilepsies known as developmental and epileptic encephalopathies (DEE).

How is it doing: 

As of March 31, 2021, Zynerba had $93.1 million in cash and equivalents on hand, compared to $59.2 million on the same day a year earlier. In the first quarter of 2021, the company sold and issued 10.2 million shares of common stock at a weighted average selling price of $4.22 per share, resulting in net proceeds of $42.2 million. 

The company believes it has enough capital to fund its operations well into the first half of 2024.

Zynerba has said it expects to initiate its single double-blind, placebo-controlled pivotal Fragile X Syndrome FXS trial for Zygel in the third quarter of 2021 to confirm the positive results observed in the population of responders in the previous CONNECT-FX trial. Zynerba said it believes that positive results from this confirmatory pivotal trial will be sufficient to support the submission of a New Drug Application (NDA) for Zygel in Fragile X Syndrome. 

Additionally, as coronavirus (COVID-19) related restrictions in Australia are easing, Zynerba said it has resumed screening of patients for its 14-week open-label Phase 2 INSPIRE trial in children and adolescents with genetically confirmed 22q, a disorder caused by a missing piece of the 22nd chromosome.

In the first half of 2021, Zynerba has said it intends to discuss with the US Food & Drug Administration (FDA) data supporting the potential efficacy of Zygel in patients with Autism Spectrum Disorder (ASD), including the results of its Phase 2 BRIGHT trial in children and adolescents with moderate to severe ASD, to determine the regulatory path forward.

Zygel was given to 37 patients between the ages of 3 and 17 with moderate-to-severe ASD as an add-on therapy. The data was robust across multiple subscales, including the Aberrant Behavior Checklist-Community (ABC-C) irritability subscale and Parent Rated Anxiety scale, showing both “statistically significant” and “clinically meaningful (>25%) improvements” at 14 weeks of treatment from baseline.

The company is also evaluating Zygel as a treatment for developmental and epileptic encephalopathies (DEE). Evaluation of potential target indications is ongoing, and Zynerba expects to finalize target syndrome selection in 2021 in one or more DEE syndromes.

Due to the “heterogeneity of patients who fall under the DEE umbrella," the FDA suggested that Zynerba pursue individual syndromes rather than considering DEE patients "as a single disorder or condition."

Inflection Points

  • If RECONNECT trial is successful, Zygel has the potential to become the first product for the treatment of Fragile X behavioral symptoms
  • Has enough cash to fund trials for a variety of Zygel indications well into the first half of 2024
  • Finalizing specific DEE syndromes to target in Zygel trial

What the broker says:

In a note to clients on May 13 following Zynerba Pharmaceuticals' first-quarter results, analysts at Roth Capital Partners repeated their 'Buy' rating $7.25 price target on the shares.

The analysts noted that Zynerba's reported 1Q21 results were within their expectations.

They noted: "Spending levels of $7.9M were well below of our $10.1M target (both lower R&D and SG&A). This drove a lower EPS loss of $0.20 versus our $0.27 EPS loss target (higher shares outstanding also lowered the EPS loss). Fundamentally, we viewed the quarter in-line with expectations. Cash balance of ~$93M should take the company 'well into the first half of 2024'."

Thee analysts concluded: "Key takeaways, in our opinion, include: 1) the company is ready to start the RECONNECT pivotal trial in 3Q21 as a treatment for Fragile X Syndrome (post FDA meeting); 2) we remain optimistic in this trial based on the subset of fully methylated patients from the CONNECT-FX trial; and 3) other programs remain on track."

What the boss says:

Zynerba CEO Armando Anido laid out the company's path forward in 2021 when it reported first-quarter results in May.

“We are committed to delivering on our important milestones in 2021 as we develop Zygel in multiple neuropsychiatric indications, including initiating a confirmatory pivotal Phase 3 trial, RECONNECT, in the third quarter of 2021, after productive dialogue and alignment with the FDA,” Anido said in the results statement.

“With a cash runway that takes us well into the first half of 2024, we believe that we are ideally positioned to continue our efforts to develop the first FDA-approved treatment for patients with Fragile X Syndrome (FXS).”

Contact Andrew Kessel at andrew.kessel@proactiveinvestors.com

Follow him on Twitter @andrew_kessel

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