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 third quarter ended September
30, 2019 and provided an overview of recent operational highlights.
“The third quarter of 2019 was a remarkable period of progress
and execution for Zynerba,” said Armando Anido, Chairman and Chief
Executive Officer of Zynerba. “We announced compelling topline
safety and efficacy results from our six month BELIEVE Phase 2
trial of Zygel™ in childhood epilepsies. In this study, patients
experienced median reductions in their most common and debilitating
seizures of 44% or more starting at month two and continuing
through month six. In this medically fragile patient population,
and consistent with our prior trials, Zygel was very well
tolerated. Caregivers also reported important improvements in
seizure intensity and duration in their children, and in
socio-behavioral and cognitive impairments that are common in this
population. Finally, we continued to progress towards full
enrollment in our pivotal CONNECT-FX trial in children and
adolescents with Fragile X syndrome, and expect to announce topline
results in the first half of next year.”
Third Quarter 2019 Highlights
Zygel in Developmental and Epileptic Encephalopathies
(DEE)
Presented Positive Topline Efficacy and Tolerability Results
from BELIEVE 1 Open Label Phase 2 DEE Study
The topline results of this six month Phase 2 evaluation of
Zygel in 48 children and adolescents with various DEEs showed
meaningful reductions in seizures and excellent tolerability.
Patients experienced 44% to 58% monthly median reductions in focal
impaired-awareness seizures (FIAS; previously known as complex
partial seizures) and/or convulsive seizures (CS; focal to
bilateral tonic-clonic seizures and generalized
tonic-clonic seizures), the most common and debilitating
seizure types, starting at month two and continuing through month
six. In addition, 42% to 63% of patients experienced a ≥50% monthly
reduction in these seizures. Children with DEE are medically
fragile, and as such, adverse events (all events, whether unrelated
or related to study drug, that occur during the trial period) are
common and expected. Only ten patients experienced a serious
adverse event (SAE). Of those ten, eight were deemed to be
unrelated to drug and only two were deemed possibly related to
study drug, including one case of lower respiratory tract infection
and one case of status epilepticus, both of which are common events
in this patient population. There were no drug-related hepatic,
gastrointestinal, or lethargy-related SAEs observed during this
study.
Presented Qualitative Data Evaluating the Impact of Zygel on
Quality of Life of Children with DEE
As part of the BELIEVE 1 study, caregivers were asked to provide
a qualitative assessment regarding their child’s overall
experiences during treatment with Zygel. Caregiver feedback to a
series of open-ended questions was collected and coded by two
independent reviewers. These qualitative assessments indicated
improvements in alertness, awareness, or energy (58% of
caregivers); seizures (51% of caregivers); cognition/concentration
(47% of caregivers); socially-avoidant behaviors (44% of
caregivers); and school attendance (28% of caregivers).
Preparations Underway for First Half 2020 Meeting with U.S. Food
and Drug Administration (FDA) to Discuss Pathway for Zygel in
DEE
Zynerba intends to meet with the FDA in the first half of 2020
to discuss the clinical path forward in DEE. Based on the Phase 2
trial design and results, the Company anticipates that it will
discuss the pursuit of an indication that includes all syndromes
and encephalopathies in the DEE category that present with FIAS
and/or CS, the most common and debilitating seizure types
representing 75% to 80% of all seizures.
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 in treating common
behavioral symptoms of FXS in three through 17-year old patients
with FXS. The Company expects to report top line results in the
first half of 2020. The primary endpoint is the change from
baseline to the end of the treatment period in the Aberrant
Behavior Checklist-Community FXS Specific (ABC-CFXS) Social
Avoidance subscale. Key secondary endpoints are the change from
baseline to the end of the treatment period in the ABC-CFXS
Irritability subscale score, the ABC-CFXS Socially
Unresponsive/Lethargic subscale score, and improvement in Clinical
Global Impression - Improvement (CGI-I) at the end of the treatment
period. If the results 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.
Poster Further Validating the Use of the ABC-CFXS Presented at
the 22nd Society for the Study of Behavioural Phenotypes (SSBP)
Symposium
The poster described data collected via web-based journals and
in-depth interviews of caregivers of children with FXS. The data
indicate that nine of ten caregivers (90%) reported that their
children had behaviors representative of social avoidance, socially
unresponsiveness/lethargic, and irritability and that the described
behaviors had strong concordance with individual domains of the
ABC-CFXS. We believe that these data help elucidate the most common
core behaviors of FXS, and further validate the appropriateness of
the ABC-CFXS as an effective tool for use in clinical studies
as a means to measure improvements in these core and common FXS
behaviors.
Zygel 12-week Open Label Phase 2 FXS Data Published in the
Journal of Neurodevelopmental Disorders
The results of the Phase 2 FAB-C clinical trial have been
published in the peer-reviewed Journal of Neurodevelopmental
Disorders in a paper entitled, ‘A Phase 1/2, Open Label Assessment
of the Safety, Tolerability, and Efficacy of Transdermal
Cannabidiol (ZYN002) for the Treatment of Pediatric Fragile X
Syndrome’ (Heussler, Helen; Cohen, Jonathan; Silove,
Natalie, et al.).
Zygel in Autism Spectrum Disorder (ASD)
Phase 2 Open Label Trial of Zygel in ASD Ongoing; Data Expected
in the First Half of 2020
The Company is conducting the Phase 2 BRIGHT trial 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 report topline results from this
study in the first half of 2020.
Poster Describing the Shared Sociobehavioral Symptoms in ASD,
FXS, and 22q11.2 Deletion Syndrome Presented at the 22nd SSBP
Symposium
The poster described the results of a retrospective literature
review on patients with ASD, FXS, and 22q11.2 deletion syndrome
(22q) conducted to determine symptomatic overlap between these
disorders. The data indicate that patients with ASD, FXS, and 22q
share a constellation of sociobehavioral symptoms and that the
pharmacology of CBD is broad, continues to be defined, and may
prove to be beneficial in addressing important behavioral symptoms
of these conditions.
Zygel in 22q11.2 Deletion Syndrome (22q)
Phase 2 Open Label Trial of Zygel in 22q Ongoing; Data Expected
in the First Half of 2020
The Company is conducting the 14-week Phase 2 INSPIRE trial 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. Zynerba expects to report topline
results from this study in the first half of 2020.
Third quarter 2019 Financial Results
Our Australian subsidiary, Zynerba Pharmaceuticals Pty Ltd, or
the Subsidiary, is incorporated in Australia and is eligible to
participate in an Australian research and development tax incentive
program. As part of this program, the Subsidiary is eligible
to receive a cash refund from the Australian Taxation Office for a
percentage of the research and development costs expended by the
Subsidiary in Australia. In July 2019, the Australian government’s
Department of Industry, Innovation and Science, or AusIndustry,
responded to an Advance Overseas Finding, or AOF, application
submitted by Zynerba that will allow certain research and
development expenses incurred with respect to our product candidate
Zygel outside of Australia to be eligible for the Australian
research and development tax incentive program. As a result of this
finding, we are 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. During the three months ending September 30, 2019, we
recorded an $8.3 million credit to research and development
expenses for amounts expected to be received through the AOF for
the period from January 1, 2018 through September 30, 2019.
Although the AOF approval extends into 2020, management believes
that substantially all qualifying amounts have been recorded as of
September 30, 2019.
The following table summarizes research and development expenses
for the three months ended September 30, 2019 and 2018.
|
|
Three months ended September 30, |
|
|
|
|
|
2019 |
|
|
|
2018 |
|
|
Research and
development expenses (before impact of AOF) |
|
$ |
6,665,610 |
|
|
$ |
4,859,902 |
|
|
AOF -
cumulative change in estimate for the period 1/1/18 through
9/30/19 |
|
|
(8,270,009 |
) |
|
|
— |
|
|
Total
research and development expenses |
|
$ |
(1,604,399 |
) |
|
$ |
4,859,902 |
|
|
|
|
|
|
|
|
|
|
|
Excluding the $8.3 million reduction in research and development
expenses for amounts expected to be received through the AOF for
the period from January 1, 2018 through September 30, 2019,
research and development expenses increased by $1.8 million to $6.7
million for the three months ended September 30, 2019 from
$4.9 million for the three months ended September 30, 2018.
The increase was primarily related to an increase in clinical trial
and manufacturing costs related to our Zygel program. Stock based
compensation included in the R&D costs were $0.6 million.
General and administrative expenses for the third quarter of
2019 were $3.5 million, including stock-based compensation expense
of $0.8 million.
The net loss for the third quarter of 2019 was $1.9 million with
basic and diluted net loss per share of $(0.08).
Financial Outlook
The Company’s cash and cash equivalent position as of September
30, 2019 was $77.5 million. Management believes that the cash and
cash equivalent position 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 September 30, |
Nine months ended September 30, |
|
|
|
|
2019 |
|
|
|
2018 |
|
|
|
2019 |
|
|
|
2018 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development |
|
$ |
(1,604,399 |
) |
|
$ |
4,859,902 |
|
|
$ |
12,926,096 |
|
|
$ |
22,368,881 |
|
|
General and administrative |
|
|
3,530,617 |
|
|
|
3,125,780 |
|
|
|
9,977,550 |
|
|
|
9,982,743 |
|
|
Total operating expenses |
|
|
1,926,218 |
|
|
|
7,985,682 |
|
|
|
22,903,646 |
|
|
|
32,351,624 |
|
|
Loss from operations |
|
|
(1,926,218 |
) |
|
|
(7,985,682 |
) |
|
|
(22,903,646 |
) |
|
|
(32,351,624 |
) |
|
Other income
(expense): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income |
|
|
436,846 |
|
|
|
278,214 |
|
|
|
1,226,998 |
|
|
|
639,702 |
|
|
Foreign exchange loss |
|
|
(457,018 |
) |
|
|
(99,897 |
) |
|
|
(551,944 |
) |
|
|
(409,010 |
) |
|
Total other income (expense) |
|
|
(20,172 |
) |
|
|
178,317 |
|
|
|
675,054 |
|
|
|
230,692 |
|
|
Net loss |
|
$ |
(1,946,390 |
) |
|
$ |
(7,807,365 |
) |
|
$ |
(22,228,592 |
) |
|
$ |
(32,120,932 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per
share - basic and diluted |
|
$ |
(0.08 |
) |
|
$ |
(0.47 |
) |
|
$ |
(1.03 |
) |
|
$ |
(2.21 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and
diluted weighted average shares outstanding |
|
|
23,186,410 |
|
|
|
16,587,353 |
|
|
|
21,598,764 |
|
|
|
14,531,272 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-cash
stock-based compensation included above: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development |
|
$ |
573,446 |
|
|
$ |
743,153 |
|
|
$ |
1,915,578 |
|
|
$ |
2,267,783 |
|
|
General and administrative |
|
|
802,779 |
|
|
|
841,077 |
|
|
|
2,438,644 |
|
|
|
2,759,330 |
|
|
Total |
|
$ |
1,376,225 |
|
|
$ |
1,584,230 |
|
|
$ |
4,354,222 |
|
|
$ |
5,027,113 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ZYNERBA PHARMACEUTICALS,
INC.CONSOLIDATED BALANCE SHEETS
|
|
(unaudited) |
|
|
|
|
|
September 30, 2019 |
|
December 31, 2018 |
|
Assets |
|
|
|
|
|
Current
assets: |
|
|
|
|
|
Cash and cash equivalents |
|
$ |
77,547,530 |
|
|
$ |
59,763,773 |
|
|
Incentive and tax receivables |
|
|
13,446,981 |
|
|
|
3,444,620 |
|
|
Prepaid expenses and other current assets |
|
|
2,831,340 |
|
|
|
3,747,087 |
|
|
Total current assets |
|
|
93,825,851 |
|
|
|
66,955,480 |
|
|
Property and
equipment, net |
|
|
339,213 |
|
|
|
371,963 |
|
|
Right-of-use
assets |
|
|
152,166 |
|
|
|
— |
|
|
Total assets |
|
$ |
94,317,230 |
|
|
$ |
67,327,443 |
|
|
Liabilities and Stockholders' Equity |
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
Accounts payable |
|
$ |
3,302,459 |
|
|
$ |
4,461,567 |
|
|
Accrued expenses |
|
|
5,842,262 |
|
|
|
5,264,215 |
|
|
Lease liabilities |
|
|
159,267 |
|
|
|
— |
|
|
Total current liabilities |
|
|
9,303,988 |
|
|
|
9,725,782 |
|
|
Total liabilities |
|
|
9,303,988 |
|
|
|
9,725,782 |
|
|
|
|
|
|
|
|
Stockholders' equity: |
|
|
|
|
|
Common stock |
|
|
23,198 |
|
|
|
17,627 |
|
|
Additional paid-in capital |
|
|
225,110,677 |
|
|
|
175,476,075 |
|
|
Accumulated deficit |
|
|
(140,120,633 |
) |
|
|
(117,892,041 |
) |
|
Total stockholders' equity |
|
|
85,013,242 |
|
|
|
57,601,661 |
|
|
Total liabilities and stockholders' equity |
|
$ |
94,317,230 |
|
|
$ |
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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