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 first quarter ended March 31,
2020 and provided an overview of recent operational highlights.
“The past few months have been historic due to the outbreak of
COVID-19, and we applaud everyone on the front line of this global
pandemic, including healthcare workers, first responders,
humanitarians, and our industry colleagues who are dedicated to the
rapid development of treatments and vaccines,” said Armando Anido,
Chairman and Chief Executive Officer of Zynerba. “In response to
the pandemic, Zynerba implemented important initiatives that we
believe protect the safety of patients, clinical investigators and
their staff, and our Zynerba employees and should allow us to
conclude all three of our ongoing clinical trials and report top
line results within our stated timelines.”
First Quarter 2020 and Recent Highlights
COVID-19 Preparedness
Implemented Plan to Prioritize the Safety of Patients and
Caregivers, Minimize Risk of Supply Disruption, and Enable the
Company to Achieve its Milestones
Zynerba and its contract research and manufacturing partners
began contingency planning for the COVID-19 outbreak in January
2020 in conjunction with its clinical investigator sites. Helping
to ensure the safety of clinicians and participating patients and
their families is paramount; as such, the Company made early and
actionable adjustments including remote site monitoring, patient
visits using telemedicine where needed, direct shipment of study
drug supplies to caregivers, and use of local clinical laboratories
to collect study related blood samples. The approach is consistent
with the U.S. Food and Drug Administration’s (FDA) Guidance on
Conduct of Clinical Trials of Medical Products during COVID-19
Pandemic. At this time, we expect our timelines for delivery of top
line results from all of our ongoing trials to not be impacted.
Zygel in Fragile X Syndrome (FXS)
Topline Results Expected from Pivotal CONNECT-FX Trial Late in
the Second Quarter of 2020
Two hundred and twelve (212) children and adolescents with
genetically-confirmed Fragile X syndrome (FXS) have been randomized
into 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. Zynerba
completed enrollment in February 2020 and expects to report topline
results late in the second quarter of 2020. If the results are
positive, Zynerba intends to request a meeting with the FDA to
determine the acceptability of the data as a basis for a New Drug
Application (NDA) and to seek advice on preparation of the
marketing authorization. The Company expects to submit its NDA for
Zygel in FXS to the FDA in the second half of 2020, with potential
approval by mid-year 2021. (Press release)
Robust Enrollment Continues into Open Label Extension Study
During the screening phase of CONNECT-FX, caregivers of patients
in the trial were informed that their participating child may have
the opportunity to receive Zygel in an open label extension trial
following the child’s compliant completion of CONNECT-FX,
regardless of their child’s perceived response or actual blinded
drug assignment at randomization in CONNECT-FX. As of May 8, 2020,
96% of the 188 patients who have completed the 14-week blinded
portion of the CONNECT-FX trial have enrolled in the open label
extension trial.
Zygel in Autism Spectrum Disorder (ASD)
Topline Results from Phase 2 BRIGHT Trial of Zygel in ASD
Expected in the Second Quarter of 2020
Thirty-seven (37) children and adolescents with
moderate-to-severe ASD have been enrolled in the 14-week open label
exploratory Phase 2 BRIGHT trial. The clinical trial is designed to
evaluate the safety, tolerability and efficacy of Zygel as an
add-on to standard-of-care for the treatment of pediatric and
adolescent patients with ASD. The Company is utilizing a number of
efficacy assessments, including the Aberrant Behavior Checklist,
Parent Rated Anxiety Scale – Autism Spectrum Disorder, and Clinical
Global Impression – Severity and Improvement, to identify the
appropriate endpoint to use in future placebo-controlled trials.
Zynerba completed enrollment in this trial in January 2020 and
expects to report topline results in the second quarter of 2020
(Press release)
New U.S. Patent Received for Treatment of ASD with Transdermal
Cannabidiol
The U.S. Patent and Trademark Office has issued U.S. Patent No.
10,568,848, titled “Treatment of Autism with Cannabidiol” which
includes claims directed to methods of treating ASD by
transdermally administering, via a gel or cream, a therapeutically
effective amount of purified CBD. The patent expires in 2038.
(Press release)
Zygel in 22q11.2 Deletion Syndrome (22q)
Phase 2 Open Label Trial of Zygel in 22q Ongoing; Data Expected
in the Third Quarter 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. Zynerba expects to report topline
results from this study in the third quarter of 2020.
Zygel in Developmental and Epileptic Encephalopathies
(DEE)
Outcome of Discussions with FDA on Clinical Pathway for Zygel in
DEE Expected in the Second Quarter of 2020
Based on the Phase 2 trial design and positive efficacy and
safety results, Zynerba anticipates that it will pursue an
indication that includes the syndromes and encephalopathies in the
DEE category that present with focal impaired-awareness seizures
(FIAS; previously known as complex partial seizures) and/or
convulsive seizures (CS), the most common and debilitating seizure
types representing 75% to 80% of all seizures. Zynerba expects to
disclose the outcome of the interactions with the FDA in the second
quarter of 2020.
First quarter 2020 Financial Results
As of March 31, 2020, cash and cash equivalents were $60.6
million, compared to $70.1 million as of December 31, 2019.
Research and development expenses for the first quarter of 2020
were $6.9 million, including stock-based compensation of $0.5
million. General and administrative expenses for the first quarter
of 2020 were $3.9 million, including stock-based compensation
expense of $0.8 million. The net loss for the first quarter of 2020
was $12.3 million with basic and diluted net loss per share of
$(0.53). Included in the net loss was $1.7M in non-cash foreign
currency losses, which are primarily due to the remeasurement of
our Australian subsidiary’s assets and liabilities, which are
denominated in the local currency to the subsidiary’s functional
currency, which is the U.S. dollar.
Financial Outlook
Management believes that the cash runway 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;
the Company’s expectations regarding its ability to obtain and
adequately maintain sufficient intellectual property protection for
its product candidates; the timing and outcome of current and
future legal proceedings; and 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. 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, |
|
|
|
2020 |
|
|
|
2019 |
|
Operating
expenses: |
|
|
|
|
Research and development |
|
$ |
6,882,793 |
|
|
$ |
6,306,712 |
|
General and administrative |
|
|
3,916,569 |
|
|
|
3,159,657 |
|
Total operating expenses |
|
|
10,799,362 |
|
|
|
9,466,369 |
|
Loss from operations |
|
|
(10,799,362 |
) |
|
|
(9,466,369 |
) |
Other income
(expense): |
|
|
|
|
Interest income |
|
|
201,684 |
|
|
|
350,951 |
|
Foreign exchange loss |
|
|
(1,740,151 |
) |
|
|
(31,599 |
) |
Total other income (expense) |
|
|
(1,538,467 |
) |
|
|
319,352 |
|
Net loss |
|
$ |
(12,337,829 |
) |
|
$ |
(9,147,017 |
) |
|
|
|
|
|
Net loss per
share - basic and diluted |
|
$ |
(0.53 |
) |
|
$ |
(0.47 |
) |
|
|
|
|
|
Basic and
diluted weighted average shares outstanding |
|
|
23,399,438 |
|
|
|
19,452,088 |
|
|
|
|
|
|
Non-cash
stock-based compensation included above: |
|
|
|
|
Research and development |
|
$ |
510,476 |
|
|
$ |
666,179 |
|
General and administrative |
|
|
812,876 |
|
|
|
830,113 |
|
Total |
|
$ |
1,323,352 |
|
|
$ |
1,496,292 |
|
|
|
|
|
|
ZYNERBA PHARMACEUTICALS,
INC.CONSOLIDATED BALANCE SHEETS
|
|
(unaudited) |
|
|
|
|
March 31, 2020 |
|
December 31, 2019 |
Assets |
|
|
|
|
Current
assets: |
|
|
|
|
Cash and cash equivalents |
|
$ |
60,638,853 |
|
|
$ |
70,063,242 |
|
Incentive and tax receivables |
|
|
12,906,735 |
|
|
|
14,613,969 |
|
Prepaid expenses and other current assets |
|
|
1,474,930 |
|
|
|
2,378,812 |
|
Total current assets |
|
|
75,020,518 |
|
|
|
87,056,023 |
|
Property and
equipment, net |
|
|
587,267 |
|
|
|
362,724 |
|
Incentive
and tax receivables |
|
|
571,329 |
|
|
|
— |
|
Right-of-use
assets |
|
|
287,160 |
|
|
|
345,849 |
|
Total assets |
|
$ |
76,466,274 |
|
|
$ |
87,764,596 |
|
Liabilities and Stockholders' Equity |
|
|
|
|
Current
liabilities: |
|
|
|
|
Accounts payable |
|
$ |
3,328,339 |
|
|
$ |
4,740,981 |
|
Accrued expenses |
|
|
6,676,988 |
|
|
|
7,073,506 |
|
Lease liabilities |
|
|
252,394 |
|
|
|
243,677 |
|
Total current liabilities |
|
|
10,257,721 |
|
|
|
12,058,164 |
|
Lease
liabilities, long-term |
|
|
44,237 |
|
|
|
109,689 |
|
Total liabilities |
|
|
10,301,958 |
|
|
|
12,167,853 |
|
|
|
|
|
|
Stockholders' equity: |
|
|
|
|
Common stock |
|
|
23,572 |
|
|
|
23,211 |
|
Additional paid-in capital |
|
|
229,314,197 |
|
|
|
226,409,156 |
|
Accumulated deficit |
|
|
(163,173,453 |
) |
|
|
(150,835,624 |
) |
Total stockholders' equity |
|
|
66,164,316 |
|
|
|
75,596,743 |
|
Total liabilities and stockholders' equity |
|
$ |
76,466,274 |
|
|
$ |
87,764,596 |
|
|
|
|
|
|
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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