Zynerba Pharmaceuticals, Inc. (Nasdaq: ZYNE), the leader in
innovative pharmaceutically-produced transdermal cannabinoid
therapies for orphan neuropsychiatric disorders, today reported
financial results for the first quarter ended March 31, 2023, and
provided an overview of recent operational highlights and a
pipeline update.
“The first quarter of 2023 was a period of continued focus and
execution on our two lead programs with Zygel,” said Armando Anido,
Chairman and Chief Executive Officer of Zynerba. “During the
quarter we continued to enroll patients in our confirmatory pivotal
Phase 3 RECONNECT trial as we are committed to bringing the first
pharmaceutical product indicated for the treatment of behavioral
symptoms of Fragile X syndrome to market. In addition, we expect
continued dialogue with the U.S. Food and Drug Administration (FDA)
in 2023 regarding an acceptable trial design for our Phase 3
program in patients with 22q deletion syndrome, with the goal of
finalizing a trial design by the end of 2023.”
Operational Highlights and Pipeline Update
Zygel in Fragile X Syndrome (FXS)
- The Company expects topline results
from RECONNECT, a confirmatory pivotal Phase 3 trial of Zygel in
patients with FXS, in the first half of 2024. The Company believes
that the results from RECONNECT, if positive, will be sufficient to
support the submission of a New Drug Application (NDA) in the U.S.
and a Marketing Authorization Application (MAA) in Europe for Zygel
in patients with FXS.
- The Company presented data at the
55th Gatlinburg Conference in April 2023 demonstrating that in the
ongoing long-term safety and efficacy trial of Zygel in children
and adolescents with FXS, Zygel was well-tolerated with long-term
administration with up to 45 months of exposure. Patients with
complete methylation, who match the primary efficacy population in
the ongoing confirmatory trial, RECONNECT, achieved and maintained
clinically meaningful changes in Social Avoidance over 24 months,
further supporting this design enhancement for RECONNECT. (Press
Release)
Zygel in 22q11.2 Deletion Syndrome (22q)
- As previously disclosed, based on
the positive Phase 2 INSPIRE trial data announced in June 2022
(Press Release), the Company held an initial meeting with the FDA
in the fourth quarter of 2022 to obtain feedback on the Phase 2
data and regulatory pathway for Zygel in patients with 22q. The
Company expects to continue its productive dialogue with the FDA on
this topic and arrive at an acceptable trial design by the end of
2023. The Company currently plans to initiate a Phase 3 program in
children and adolescents with 22q following topline results from
RECONNECT.
- The Company presented data at the
55th Gatlinburg Conference in April 2023 that showed through
38-weeks of treatment, statistically significant improvements were
seen in children and adolescents treated with Zygel in the
Pediatric Anxiety Rating Scale (PARS-R), all five scales of the
Anxiety, Depression and Mood Scale (ADAMS), and all five subscales
of the Aberrant Behavior Checklist – Community (ABC-C). These
results are consistent with the previously reported 14-week
treatment data suggesting a positive risk-benefit profile for Zygel
in improving anxiety-related and other behavioral symptoms in
children and adolescents with 22q when added to standard of care.
(Press Release).
Corporate – Reverse Stock Split
- Zynerba intends to seek approval of
a reverse stock split at its Annual Meeting of Stockholders in June
(Annual Meeting), which it would effect any time prior to November
1, 2023. Details of the reverse stock split are included in the
Company’s Proxy Statement for the Annual Meeting. The primary
objective of implementing a reverse split is to satisfy the minimum
bid price requirement for continued listing on the Nasdaq Capital
Market. The Company’s Board believes that effecting the reverse
split would increase the price of our common stock which would,
among other things, help the Company to:
- Meet certain continued listing
requirements of the Nasdaq Capital Market;
- Appeal to a broader range of
investors to generate interest in the Company; and
- Improve perception of the Company’s
common stock as an investment security.
Stockholders of record are encouraged to review the proxy
materials filed with the SEC before voting. If stockholders have
any questions or need assistance with processing their vote, please
contact MacKenzie Partners, Inc. (email:
proxy@mackenziepartners.com, or call toll free: 1-800-322-2885),
Zynerba’s proxy solicitor.
First Quarter 2023 Financial Results
Research and development expenses were $7.1 million for the
first quarter of 2023, including stock-based compensation of $0.4
million. General and administrative expenses were $3.4 million in
the first quarter of 2023, including stock-based compensation
expense of $0.4 million. Net loss for the first quarter of 2023 was
$10.1 million, with basic and diluted loss per share of
$(0.21).
Financial Outlook
As of March 31, 2023, cash and cash equivalents were $44.4
million, compared to $50.6 million as of December 31, 2022.
On May 11, 2021, the Company entered into a Controlled Equity
OfferingSM Sales Agreement (2021 Sales Agreement), with Cantor
Fitzgerald & Co., Canaccord Genuity, LLC, H.C. Wainwright &
Co. LLC and Ladenburg Thalmann & Co. Inc., as sales agents,
pursuant to which the Company may sell, from time to time, up to
$75.0 million of its common stock. We are currently subject to
General Instruction I.B.6 of Form S-3, and the amount of funds we
can raise through primary public offerings of securities in any
twelve-month period using our existing registration statement on
Form S-3 is limited to one-third of the aggregate market value of
the voting and non-voting common equity held by non-affiliates. We
will be subject by this limit until such time as our public float
exceeds $75.0 million. In the first quarter of 2023, the Company
sold and issued 1,179,077 shares of its common stock under the 2021
Sales Agreement in the open market resulting in gross proceeds of
$0.7 million and net proceeds of $0.6 million, after deducting
commissions and offering expenses.
On July 21, 2022, the Company entered into a Purchase Agreement
(2022 Purchase Agreement) and registration rights agreement for up
to $20.0 million with Lincoln Park Capital Fund, LLC (LPC), a
Chicago-based institutional investor. In the first quarter of 2023,
the Company sold and issued 2,100,000 shares of its common stock
under the 2022 Purchase Agreement resulting in gross and net
proceeds of $1.1 million. From April 1, 2023 through May 11, 2023,
the Company sold and issued 150,000 shares of common stock under
the Purchase Agreement resulting in gross and net proceeds of $0.1
million.
Management believes that the Company’s cash and cash equivalents
are sufficient to fund operations and capital requirements to
mid-year 2024. Top-line results from the Company’s confirmatory
pivotal Phase 3 RECONNECT trial of Zygel in patients with FXS are
expected in the first half of 2024.
About Zygel
Zygel is the first and only pharmaceutically-manufactured
cannabidiol formulated as a patent-protected permeation-enhanced
clear gel, designed to provide consistent drug delivery into the
bloodstream transdermally (i.e. through the skin). Recent studies
suggest that cannabidiol may modulate the endocannabinoid system
and improve certain behavioral symptoms associated with
neuropsychiatric conditions. Zygel is an investigational drug
product in development for the potential treatment of behavioral
symptoms associated with Fragile X syndrome (FXS) and 22q11.2
deletion syndrome (22q). The Company has received orphan drug
designation for cannabidiol, the active ingredient in Zygel, from
the FDA and the European Commission in the treatment of FXS and the
treatment of 22q. Additionally, Zygel has been designated a Fast
Track development program for treatment of behavioral symptoms of
FXS.
About Zynerba Pharmaceuticals, Inc.
Zynerba Pharmaceuticals is the leader in innovative
pharmaceutically-produced transdermal cannabinoid therapies for
orphan neuropsychiatric disorders. We are committed to improving
the lives of patients and their families living with severe,
chronic health conditions including Fragile X syndrome and 22q11.2
deletion syndrome. 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 expectations, projections and
estimates regarding expenses, future revenue, capital requirements,
incentive and other tax credit eligibility, collectability and
timing, and availability of and the need for additional financing;
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,
the European Medicines Agency and other 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;
the Company’s expectations regarding its ability to obtain and
adequately maintain sufficient intellectual property protection for
its product candidates; the Company’s ability to regain compliance
with the requirements for continued listing on the Nasdaq Capital
Market, including the risk of not obtaining stockholder approval
for a potential reverse stock split; the extent to which health
epidemics and other outbreaks of communicable diseases, including
COVID-19, could disrupt our operations or adversely affect our
business and financial conditions; and the extent to which
inflation, banking stability or global instability, including
political instability, may disrupt our business operations or our
financial condition. 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 March 31, |
|
|
|
|
2023 |
|
|
|
2022 |
|
|
Operating
expenses: |
|
|
|
|
|
Research and development |
|
$ |
7,078,081 |
|
|
$ |
5,146,605 |
|
|
General and administrative |
|
|
3,393,094 |
|
|
|
3,757,310 |
|
|
Total operating expenses |
|
|
10,471,175 |
|
|
|
8,903,915 |
|
|
Loss from operations |
|
|
(10,471,175 |
) |
|
|
(8,903,915 |
) |
|
Other income
(expense): |
|
|
|
|
|
Interest income |
|
|
447,315 |
|
|
|
96,044 |
|
|
Foreign exchange (loss) gain |
|
|
(89,983 |
) |
|
|
317,252 |
|
|
Total other income (expense) |
|
|
357,332 |
|
|
|
413,296 |
|
|
Net loss |
|
$ |
(10,113,843 |
) |
|
$ |
(8,490,619 |
) |
|
|
|
|
|
|
|
Net loss per
share - basic and diluted |
|
$ |
(0.21 |
) |
|
$ |
(0.21 |
) |
|
|
|
|
|
|
|
Basic and
diluted weighted average shares outstanding |
|
|
48,430,567 |
|
|
|
40,304,484 |
|
|
|
|
|
|
|
|
Non-cash
stock-based compensation included above: |
|
|
|
|
|
Research and development |
|
$ |
373,626 |
|
|
$ |
529,496 |
|
|
General and administrative |
|
|
448,360 |
|
|
|
630,986 |
|
|
Total |
|
$ |
821,986 |
|
|
$ |
1,160,482 |
|
|
|
|
|
|
|
|
ZYNERBA
PHARMACEUTICALS, INC. |
|
CONSOLIDATED
BALANCE SHEETS |
|
|
|
|
|
(unaudited) |
|
|
|
|
|
March 31, 2023 |
|
December 31, 2022 |
|
Assets |
|
|
|
|
|
Current
assets: |
|
|
|
|
|
Cash and cash equivalents |
|
$ |
44,400,344 |
|
|
$ |
50,640,993 |
|
|
Incentive and tax receivables |
|
|
1,174,817 |
|
|
|
1,225,383 |
|
|
Prepaid expenses and other current assets |
|
|
2,001,086 |
|
|
|
2,908,731 |
|
|
Total current assets |
|
|
47,576,247 |
|
|
|
54,775,107 |
|
|
Property and
equipment, net |
|
|
473,270 |
|
|
|
409,572 |
|
|
Incentive
and tax receivables |
|
|
309,190 |
|
|
|
— |
|
|
Right-of-use
assets |
|
|
277,826 |
|
|
|
336,215 |
|
|
Total assets |
|
$ |
48,636,533 |
|
|
$ |
55,520,894 |
|
|
Liabilities and Stockholders' Equity |
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
Accounts payable |
|
$ |
2,142,216 |
|
|
$ |
1,942,830 |
|
|
Accrued expenses |
|
|
7,251,414 |
|
|
|
7,014,882 |
|
|
Lease liabilities |
|
|
216,385 |
|
|
|
214,901 |
|
|
Total current liabilities |
|
|
9,610,015 |
|
|
|
9,172,613 |
|
|
Lease
liabilities, long-term |
|
|
59,967 |
|
|
|
119,524 |
|
|
Total liabilities |
|
|
9,669,982 |
|
|
|
9,292,137 |
|
|
|
|
|
|
|
|
Stockholders' equity: |
|
|
|
|
|
Common stock |
|
|
53,503 |
|
|
|
47,896 |
|
|
Additional paid-in capital |
|
|
323,544,176 |
|
|
|
320,698,146 |
|
|
Accumulated deficit |
|
|
(284,631,128 |
) |
|
|
(274,517,285 |
) |
|
Total stockholders' equity |
|
|
38,966,551 |
|
|
|
46,228,757 |
|
|
Total liabilities and stockholders' equity |
|
$ |
48,636,533 |
|
|
$ |
55,520,894 |
|
|
|
|
|
|
|
|
Zynerba Contacts
Jim Fickenscher, CFO and VP Corporate DevelopmentZynerba
Pharmaceuticals484.581.7483fickenscherj@zynerba.com
Peter VozzoICR
Westwicke443.213.0505Peter.Vozzo@Westwicke.com
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