Zynerba Pharmaceuticals, Inc. (NASDAQ:ZYNE), the leader in
innovative pharmaceutically-produced transdermal cannabinoid
therapies for rare and near-rare neuropsychiatric disorders, today
reported financial results for the second quarter ended June 30,
2019 and provided an overview of recent operational highlights.
“The past few months have been very productive for our team,”
said Armando Anido, Chairman and Chief Executive Officer of
Zynerba. “We initiated new studies in autism spectrum disorder and
22q11.2 deletion syndrome, obtained Fast Track Designation for
Zygel™ in FXS, enhanced our senior management team with two
excellent additions in Medical and Regulatory, received an
important new patent for CBD, and were added to the Russell 2000®
and 3000® indices. We also extended our cash runway into the second
half of 2021 through the addition of $27.0 million in cash from our
ATM in the second quarter and a positive decision from the
Australian government that will provide us access to an incremental
$7.0 to $9.0 million in research and development cash credits. This
all sets the stage for the next 12 months to be potentially
transformational as we report out on our FXS pivotal trial, and our
Phase 2 trials in DEE, ASD and 22q."
Continued Anido, “Regarding the CONNECT-FX study, we believe
that pivotal data will now be available in the first half of 2020.
We are thrilled with the interest in this study by families who
have children with Fragile X syndrome, our investigators, and our
advocacy partners. The study design includes specific entrance
criteria that have resulted in a higher than predicted screen
failure rate. Importantly, these entrance criteria have resulted in
an enrolled population with more severe behavioral symptoms than
the FAB-C study population. We believe this will enhance the
study’s ability to demonstrate a strong signal of activity and
minimize response variability."
Second Quarter 2019 and Recent Highlights
Zygel in Fragile X Syndrome (FXS)
Fragile X Syndrome Pivotal Data Expected in the First Half of
2020
Enrollment is progressing in CONNECT-FX, a pivotal,
multi-national, randomized, double blind, placebo-controlled trial
evaluating the efficacy and safety of Zygel (ZYN002 CBD gel) in
treating common behavioral symptoms of FXS in three through 17-year
old patients with FXS. Clinical investigative sites are enrolling
patients in the United States, Australia, and New Zealand. The
Company expects to report top line data in the first half of 2020.
If the data are positive, the Company expects to submit its New
Drug Application (NDA) for Zygel in FXS to the U.S. Food and Drug
Administration (FDA) in the second half of 2020, with potential
approval by mid-year 2021.
Patients Enrolling Into CONNECT-FX Open Label Extension
Upon completion of the double blind placebo controlled portion
of the CONNECT-FX study, patients are eligible to enroll into a
12-month extension study. At this point, all patients who have
completed the double-blind phase of the study have enrolled into
the extension phase.
Received Fast Track Designation for Zygel for Treatment of
Behavioral Symptoms Associated with FXS
FDA’s Fast Track program is designed to facilitate the
development of drugs intended to treat serious conditions and fill
unmet medical needs and can lead to expedited review by FDA in
order to get new important drugs to the patient earlier. This
designation is in addition to the previously received Orphan Drug
designation.
Zygel in Developmental and Epileptic Encephalopathies
(DEE)
Topline Results Expected in September 2019
The Company expects to announce topline data from BELIEVE 1, an
open label multi-dose Phase 2 clinical trial evaluating the
efficacy and safety of Zygel in children and adolescents (three
through 17 years) with various DEEs, in September 2019. The primary
efficacy assessment is reduction in seizure frequency at week 26
compared to baseline.
Zygel in Autism Spectrum Disorder (ASD)
Enrollment Ongoing in Phase 2 Open Label Trial of Zygel in ASD;
Data Expected in the First Half of 2020
The Company initiated the Phase 2 BRIGHT trial in March 2019 to
assess the safety, tolerability and efficacy of Zygel for the
treatment of child and adolescent patients with ASD. The 14-week
trial is designed to evaluate the efficacy and safety of Zygel in
approximately 36 children and adolescents (ages four through 17)
with ASD as confirmed by DSM-5 diagnostic criteria for ASD. The
efficacy assessments include the Aberrant Behavior Checklist,
Parent Rated Anxiety Scale – Autism Spectrum Disorder, Autism
Impact Measure, and Clinical Global Impression – Severity and
Improvement. Zynerba expects to present topline data from this
study in the first half of 2020.
Announced Receipt of New U.S. Patent for Treatment of ASD with
Cannabidiol (CBD)
The U.S. Patent and Trademark Office issued U.S. Patent No.
10,314,792 titled “Treatment of Autism Spectrum Disorder with
Cannabidiol” which includes claims directed to methods of treating
autism spectrum disorder by administering a therapeutically
effective amount of synthetic cannabidiol. This new patent expires
in 2038 and is part of an expanding intellectual property portfolio
covering Zygel.
Zygel in 22q11.2 Deletion Syndrome (22q)
Announced Initiation of Phase 2 Open Label Trial of Zygel in
22q; Data Expected in the First Half of 2020
The Company initiated the 14-week Phase 2 INSPIRE trial in May
2019 to evaluate the safety, tolerability and efficacy of Zygel in
approximately 20 children and adolescents (ages six through 17)
with genetically-confirmed 22q. The efficacy assessments include
the Aberrant Behavior Checklist-Community (ABC-C), the Anxiety,
Depression and Mood Scale (ADAMS), the Qualitative Caregiver
Reported Behavioral Problem Survey, and Clinical Global Impression
– Severity and Improvement.
Corporate
Advance Overseas Finding Approved by AusIndustry; Expected to
Generate $7.0 to $9.0 Million
In July 2019, the Australian government’s Department of
Industry, Innovation and Science (AusIndustry) responded to an
Advance Overseas Finding (AOF) application submitted by Zynerba
that will allow certain research and development expenses incurred
with respect to Zygel outside of Australia to be eligible for the
Australian research and development tax incentive program. As a
result of this finding, the Company is eligible to receive a cash
refund from the Australian Taxation Office for the qualifying
research and development costs expended outside of Australia in
2018, 2019 and 2020. Management believes that this decision will
generate an incremental $7.0 to $9.0 million in cash tax credits
over the next 18 to 24 months.
Enhanced Senior Management Team
Joseph Palumbo, M.D. recently joined the Company as Chief
Medical Officer. He has over 30 years of experience in areas
including neurology and neuro-degeneration, psychiatry and
behavioral medicine, cognition, and orphan conditions in companies
and institutions including Mitsubishi Tanabe, Johnson &
Johnson/Janssen, Sanofi-Synthelabo, Cephalon, Yale, Cornell, and
the University of Pennsylvania. Dr. Palumbo is Board Certified in
Psychiatry and has worked on the approval of therapeutics for
neuropsychiatric disorders including Radicava® (edaravone),
Risperdal® (risperidone), and Invega® (paliperidone)1.
“I believe that the critical clinical research that Zynerba is
performing has the potential to change treatment paradigms in
neuropsychiatric disorders,” commented Dr. Palumbo. “If the ongoing
studies are successful, and if Zygel is approved, there is real
hope to see dramatic improvement in the daily lives of the families
affected by conditions such as Fragile X. I’m very excited to join
a seasoned, international team of individuals who have experienced
success in all aspects of pharmaceutical drug development in the
past, and I look forward to being part of Zynerba’s continued
growth and evolution.”
Pam Swiggard, M.S. has joined Zynerba as Vice President,
Regulatory Affairs and Quality. She is a senior pharmaceutical
executive with nearly 30 years of experience in areas including
clinical trial management, regulatory affairs, and quality with
companies including Fibrocell Science, Inc., Trevena Inc., Endo
Pharmaceuticals, and Wyeth Pharmaceuticals.
Company Added to Russell Indexes
The Company was added as a member of the U.S. all-cap Russell
3000® and small-cap Russell 2000® Indexes at
the conclusion of the 2019 Russell indexes annual reconstitution at
the open of the U.S. markets on July 1, 2019.
_____________1 Radicava is a trademark of Mitsubishi Tanabe
Pharma Corporation. Risperdal and Invega are registered trademarks
of Janssen Pharmaceuticals, Inc.
Second Quarter 2019 Financial Results
As of June 30, 2019, cash and cash equivalents were $88.7
million, compared to $59.8 million as of December 31, 2018.
Included in this cash and cash equivalents position is $27.0
million in net proceeds, after deducting commissions and offering
expenses, from 2,082,031 shares sold and issued at a weighted
average selling price of $13.50 per share during the second quarter
of 2019 under an Open Market Sales Agreement, or “at-the-market”
(ATM) offering program, with Jefferies LLC.
Research and development expenses for the second quarter of 2019
were $8.2 million, including stock-based compensation of $0.7
million. General and administrative expenses for the second quarter
of 2019 were $3.3 million, including stock-based compensation
expense of $0.8 million. The net loss for the second quarter of
2019 was $11.1 million with basic and diluted net loss per share of
$(0.50).
Financial Outlook
The Company’s cash and cash equivalent position as of June 30,
2019 was $88.7 million. Management believes that the cash and cash
equivalent position including proceeds anticipated from the
Australian AOF is sufficient to fund operations and capital
requirements beyond the expected NDA submission and potential
approval of Zygel in FXS and into the second half of 2021.
About Zynerba Pharmaceuticals, Inc. Zynerba
Pharmaceuticals is the leader in pharmaceutically-produced
transdermal cannabinoid therapies for rare and near-rare
neuropsychiatric disorders. We are committed to improving the lives
of patients and their families living with severe, chronic health
conditions including Fragile X syndrome, autism spectrum disorder,
22q11.2 deletion syndrome, and a heterogeneous group of rare and
ultra-rare epilepsies known as developmental and epileptic
encephalopathies. Learn more at www.zynerba.com and follow us on
Twitter at @ZynerbaPharma.
Cautionary Note on Forward-Looking
Statements
This press release contains forward-looking statements within
the meaning of The Private Securities Litigation Reform Act of
1995. We may, in some cases, use terms such as “predicts,”
“believes,” “potential,” “proposed,” “continue,” “estimates,”
“anticipates,” “expects,” “plans,” “intends,” “may,” “could,”
“might,” “will,” “should” or other words that convey uncertainty of
future events or outcomes to identify these forward-looking
statements. Such statements are subject to numerous important
factors, risks and uncertainties that may cause actual events or
results to differ materially from the Company’s current
expectations. Management’s expectations and, therefore, any
forward-looking statements in this press release could also be
affected by risks and uncertainties relating to a number of other
factors, including the following: the Company’s cash and cash
equivalents may not be sufficient to support its operating plan for
as long as anticipated; the Company’s ability to obtain additional
funding to support its clinical development programs; the results,
cost and timing of the Company’s clinical development programs,
including any delays to such clinical trials relating to enrollment
or site initiation; clinical results for the Company’s product
candidates may not be replicated or continue to occur in additional
trials and may not otherwise support further development in a
specified indication or at all; actions or advice of the U.S. Food
and Drug Administration and foreign regulatory agencies may affect
the design, initiation, timing, continuation and/or progress of
clinical trials or result in the need for additional clinical
trials; the Company’s ability to obtain and maintain regulatory
approval for its product candidates, and the labeling under any
such approval; the Company’s reliance on third parties to assist in
conducting pre-clinical and clinical trials for its product
candidates; delays, interruptions or failures in the manufacture
and supply of the Company’s product candidates the Company’s
ability to commercialize its product candidates; the size and
growth potential of the markets for the Company’s product
candidates, and the Company’s ability to service those markets; the
Company’s ability to develop sales and marketing capabilities,
whether alone or with potential future collaborators; the rate and
degree of market acceptance of the Company’s product candidates;
and the Company’s expectations regarding its ability to obtain and
adequately maintain sufficient intellectual property protection for
its product candidates. This list is not exhaustive and these and
other risks are described in the Company’s periodic reports,
including the annual report on Form 10-K, quarterly reports on Form
10-Q and current reports on Form 8-K, filed with or furnished to
the Securities and Exchange Commission and available
at www.sec.gov. Any forward-looking statements that the
Company makes in this press release speak only as of the date of
this press release. The Company assumes no obligation to update
forward-looking statements whether as a result of new information,
future events or otherwise, after the date of this press
release.
ZYNERBA PHARMACEUTICALS,
INC.CONSOLIDATED STATEMENTS OF
OPERATIONS(unaudited)
|
Three months ended June
30, |
|
Six months ended June
30, |
|
|
2019 |
|
|
|
2018 |
|
|
|
2019 |
|
|
|
2018 |
|
Operating expenses: |
|
|
|
|
|
|
|
Research and development |
$ |
8,223,783 |
|
|
$ |
8,533,466 |
|
|
$ |
14,530,495 |
|
|
$ |
17,508,979 |
|
General and administrative |
|
3,287,276 |
|
|
|
3,436,340 |
|
|
|
6,446,933 |
|
|
|
6,856,963 |
|
Total operating expenses |
|
11,511,059 |
|
|
|
11,969,806 |
|
|
|
20,977,428 |
|
|
|
24,365,942 |
|
Loss from operations |
|
(11,511,059 |
) |
|
|
(11,969,806 |
) |
|
|
(20,977,428 |
) |
|
|
(24,365,942 |
) |
Other income (expense): |
|
|
|
|
|
|
|
Interest income |
|
439,201 |
|
|
|
186,304 |
|
|
|
790,152 |
|
|
|
361,488 |
|
Foreign exchange loss |
|
(63,327 |
) |
|
|
(223,731 |
) |
|
|
(94,926 |
) |
|
|
(309,113 |
) |
Total other income (expense) |
|
375,874 |
|
|
|
(37,427 |
) |
|
|
695,226 |
|
|
|
52,375 |
|
Net loss |
$ |
(11,135,185 |
) |
|
$ |
(12,007,233 |
) |
|
$ |
(20,282,202 |
) |
|
$ |
(24,313,567 |
) |
|
|
|
|
|
|
|
|
Net loss per share - basic and
diluted |
$ |
(0.50 |
) |
|
$ |
(0.89 |
) |
|
$ |
(0.98 |
) |
|
$ |
(1.80 |
) |
|
|
|
|
|
|
|
|
Basic and diluted weighted
average shares outstanding |
|
22,116,758 |
|
|
|
13,504,485 |
|
|
|
20,791,784 |
|
|
|
13,486,191 |
|
|
|
|
|
|
|
|
|
Non-cash stock-based
compensation included above: |
|
|
|
|
|
|
|
Research and development |
$ |
675,953 |
|
|
$ |
776,386 |
|
|
$ |
1,342,132 |
|
|
$ |
1,524,630 |
|
General and administrative |
|
805,752 |
|
|
|
979,473 |
|
|
|
1,635,865 |
|
|
|
1,918,253 |
|
Total |
$ |
1,481,705 |
|
|
$ |
1,755,859 |
|
|
$ |
2,977,997 |
|
|
$ |
3,442,883 |
|
|
|
|
|
|
|
|
|
ZYNERBA PHARMACEUTICALS,
INC.CONSOLIDATED BALANCE SHEETS
|
(unaudited) |
|
|
|
June 30, 2019 |
|
December 31, 2018 |
Assets |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
88,661,332 |
|
|
$ |
59,763,773 |
|
Incentive and tax receivables |
|
3,407,677 |
|
|
|
3,444,620 |
|
Prepaid expenses and other current assets |
|
1,501,924 |
|
|
|
3,747,087 |
|
Total current assets |
|
93,570,933 |
|
|
|
66,955,480 |
|
Property and equipment, net |
|
332,076 |
|
|
|
371,963 |
|
Incentive and tax receivables |
|
1,459,830 |
|
|
|
— |
|
Right-of-use assets |
|
206,250 |
|
|
|
— |
|
Total assets |
$ |
95,569,089 |
|
|
$ |
67,327,443 |
|
Liabilities and Stockholders' Equity |
|
|
|
Current liabilities: |
|
|
|
Accounts payable |
$ |
3,742,146 |
|
|
$ |
4,461,567 |
|
Accrued expenses |
|
6,027,522 |
|
|
|
5,264,215 |
|
Lease liabilities |
|
216,014 |
|
|
|
— |
|
Total current liabilities |
|
9,985,682 |
|
|
|
9,725,782 |
|
Total liabilities |
|
9,985,682 |
|
|
|
9,725,782 |
|
|
|
|
|
Stockholders' equity: |
|
|
|
Common stock |
|
23,198 |
|
|
|
17,627 |
|
Additional paid-in capital |
|
223,734,452 |
|
|
|
175,476,075 |
|
Accumulated deficit |
|
(137,174,243 |
) |
|
|
(117,892,041 |
) |
Total stockholders' equity |
|
86,583,407 |
|
|
|
57,601,661 |
|
Total liabilities and stockholders' equity |
$ |
96,569,089 |
|
|
$ |
67,327,443 |
|
|
|
|
|
Zynerba Contacts
Jim Fickenscher, CFO and VP Corporate DevelopmentZynerba
Pharmaceuticals484.581.7483fickenscherj@zynerba.com
Will Roberts, VP Investor Relations and Corporate
CommunicationsZynerba
Pharmaceuticals484.581.7489robertsw@zynerba.com
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