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,
2020, and provided an overview of recent operational highlights.
“We have made solid progress over the past few months towards
our core mandate of developing important new therapies for patients
suffering from underserved rare and near rare neuropsychiatric
disorders,” said Armando Anido, Chairman and Chief Executive
Officer of Zynerba. “Regarding our pivotal CONNECT-FX data in
Fragile X Syndrome, we continue to evaluate the data and believe
that we have identified an important and severely impacted patient
population that responded well to Zygel™ CBD gel. We also announced
positive data from the Phase 2 BRIGHT trial in autism spectrum
disorder during the quarter. We expect to meet with the U.S. Food
and Drug Administration in the second half of this year to discuss
the results from both trials and to clarify the paths forward.”
Second Quarter 2020 and Recent Highlights
Zygel in Fragile X Syndrome (FXS)
Reported Topline Results from Pivotal CONNECT-FX Trial;
Pre-planned Ad Hoc Analysis Showed Statistically Significant
Improvements (p=0.020) in Primary Endpoint in Children and
Adolescents with Full Methylation of FMR1 Gene
Zygel did not achieve statistical significance versus placebo in
the primary or secondary endpoints in the full analysis set
(n=210). However, a pre-planned ad hoc analysis of the most
severely impacted patients in the trial (n=167), as defined by full
methylation of the impacted FMR1 gene (FMet), demonstrated that
Zygel achieved statistical significance in the primary endpoint of
improvement at 12 weeks of treatment in the Social Avoidance
subscale of the ABC-CFXS compared to placebo (p=0.020). The median
improvement in this subscale after twelve weeks of treatment was
40% for patients on Zygel and 21% for patients on placebo. This
group comprised 80% of the patients enrolled in the CONNECT-FX
study and approximately 60% of the overall FXS patient population.
Zygel was very well tolerated in CONNECT- FX, and the safety
profile was consistent with previously released data from other
Zygel clinical trials. Zynerba intends to meet with the FDA to
discuss a regulatory path forward. (Press release)
Presented CONNECT-FX Data Showing Statistically Significant
Caregiver-Reported Improvements in Most Impactful FXS Behaviors at
the 17th NFXF International Conference Research Roundup; Results
Support Statistically Significant Results of Pre-planned Ad Hoc
Analysis in FMet Patients
Consistent with guidance from the FDA on capturing the voice of
the patient in drug development, the Company collected additional
qualitative data on the clinical relevance of various FXS behaviors
to caregivers during CONNECT-FX. The results of the Qualitative
Caregiver Reported Behavioral Survey indicate that caregivers found
anxiety, socially avoidant behaviors (including elopement and
isolation seeking), and disruptive behaviors (including aggression
and temper tantrums) to be the most challenging. The results of the
Caregiver Global Impression – Change survey show a broad shift
toward global improvement from baseline to week 12 in FMet
patients, with three of the four behavioral domains (social
avoidance and isolation, irritable and disruptive behaviors, and
social interactions) showing statistically significant improvements
in favor of patients on Zygel compared to placebo and the fourth
domain (overall behavior) trending toward significance. (Press
release)
Presented New Two-Year Data from the Open Label Extension of the
Phase 2 FAB-C Trial in Patients with Fragile X at 2020 American
Academy of Neurology (AAN) Science Highlights Virtual Session
At the completion of the 12-week Phase 2 FAB-C study (Period 1),
patients could enter an open label extension study (Period 2).
Statistically significant improvements from baseline were observed
at week 12 in all subscale scores of the ABC-CFXS in Period 1
and these statistically significant improvements were sustained
through two years in subjects who entered Period 2. In this
analysis, the majority of patients who completed Period 1 met
important criteria for therapeutic response (≥25% or ≥50%
improvement from baseline in ABC-CFXS domains) at weeks 4, 8,
and 12 of the Phase 2 trial; this response was sustained or
continued to improve through two years in patients who entered
Period 2. Zygel was very well tolerated over two years. (Press
release)
Zygel in Autism Spectrum Disorder (ASD)
Reported Positive Topline Results from Phase 2 BRIGHT Trial of
Zygel in ASD; Statistically Significant Improvements from Baseline
Observed in All Subscales of the Aberrant Behavior Checklist –
Community (ABC-C)
Thirty-seven children and adolescents with moderate-to-severe
ASD were enrolled in the 14-week open label exploratory Phase 2
BRIGHT trial. The clinical trial was 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. All five subscales of the ABC-C showed both
statistically significant (p<0.0002) and clinically meaningful
improvements at 14 weeks of treatment from baseline. The results of
other efficacy assessments reinforce the results demonstrated in
the ABC-C, including a mean improvement of 46% at week 14 from
baseline as measured by the Parent Reported Anxiety Scale for ASD
(PRAS-ASD; p<0.0001) and 57% of patients were assessed as “very
much improved” or “much improved” at week 14 as measured by the
Clinical Global Impression - Improvement scale (CGI-I). Zygel was
very well tolerated. (Press release)
Zygel in 22q11.2 Deletion Syndrome (22q)
Recruitment into Phase 2 INSPIRE Trial of Zygel in 22q Delayed
Due to the Impact COVID-19 in Australia
Recruitment into the 14-week open label Phase 2 INSPIRE trial in
children and adolescents (ages six through 17) with genetically
confirmed 22q has been delayed due to the impact of COVID-19 in
Australia and resulting travel restrictions. As a result of the
uncertainty of the scope, duration and impact of the COVID-19
pandemic in Australia, the Company has withdrawn its guidance on
the timing of data from this trial, and will provide updated
guidance as soon as possible.
Zygel in Developmental and Epileptic Encephalopathies
(DEE)
Presented Additional Phase 2 BELIEVE Safety, Efficacy and
Quality of Life Data at the 2020 American Academy of Neurology
(AAN) Science Highlights Virtual Session
Over the Phase 2 BELIEVE 26-week treatment period, the median
percentage reduction from baseline in monthly frequency of focal
impaired awareness seizures (FIAS) and tonic clonic seizures (CS)
was 43.5% (primary efficacy endpoint). Monthly (28-day) reductions
from baseline in seizure frequency ranged from 44% to 58% from
month two of the treatment period onward using monthly seizure
frequency normalized to 28 days (SF28). At six months of treatment
in the BELIEVE trial, 62% of patients achieved a ≥35% reduction in
FIAS and TCS from baseline, and 55% of patients achieved a ≥50
reduction. Statistically significant reductions from baseline in
mean Epilepsy and Learning Disabilities Quality of Life
(ELDQOL)-modified subscale scores for seizure severity, behavior,
and mood were observed at week 26 (p<0.01 for all measures). At
month six, the combined proportion of “good day” and “fantastic
day” reports increased from 52% at baseline to 70%, and the
combined proportion of “terrible day” and “bad day” reports
decreased from 12% at baseline to 4%. (Press release)
Outcome of Discussions with FDA on Clinical Pathway for Zygel in
DEE Expected in the Third 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 FIAS and/or TCS, the most common and
debilitating seizure types representing 75% to 80% of all seizures.
Zynerba expects to announce the results of its ongoing discussions
with the FDA on the clinical path forward in DEE in the third
quarter of 2020.
Second Quarter 2020 Financial Results
As of June 30, 2020, cash and cash equivalents were $77.0
million, compared to $70.1 million as of December 31, 2019. In the
second quarter of 2020, the Company sold and issued 5,682,784
shares of its common stock in the open market at a weighted-average
selling price of $4.92 per share, for gross proceeds of $27.9
million and net proceeds, after deducting commissions and offering
expenses, of $27.2 million under an a Controlled Equity Offering
Sales Agreement with Cantor Fitzgerald & Co., Canaccord
Genuity, LLC, H.C. Wainwright & Co. LLC and Ladenburg Thalmann
& Co. Inc.
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, or
ATO, 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 AusIndustry would
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. During the year ended December 31, 2019, we recorded $8.3
million as an incentive and tax receivable and a corresponding
credit to research and development expense for amounts expected to
be received through the AOF for the period January 1, 2018 through
December 31, 2019. As of June 30, 2020, incentive and tax
receivables included $8.1 million related to the AOF. The reduction
of $0.2 million versus December 31, 2019 was due to unrealized
foreign currency losses related to the remeasurement of the
Subsidiary’s assets and liabilities. In June 2020, the ATO informed
us that we may not qualify for the AOF program based on their
interpretation of certain eligibility requirements.
We evaluate our eligibility under the Australian tax incentive
programs as of each balance sheet date based on the most current
and relevant data available. While a numeric standard does not
exist, accounting practice generally considers an event that has a
75% or greater likelihood of occurrence to be probable. Although we
continue to believe that we comply with the relevant conditions of
the AOF program that were in place when we received our original
approval from AusIndustry, based on this probability standard we
have determined it is no longer probable that the AOF credits will
be received. As a result, during the three months ended June 30,
2020, we recorded a full reserve against the $8.1 million AOF
receivable. Discussions between the Company and the ATO are ongoing
with respect to this issue.
The following table summarizes research and development expenses
for the three months ended June 30, 2020 and 2019.
|
|
Three months ended June 30, |
|
|
2020 |
|
2019 |
Research and development expenses (before impact of AOF) |
|
|
9,242,146 |
|
|
8,223,783 |
Amounts reserved against AOF
refund |
|
|
8,107,695 |
|
|
— |
Total research and development
expenses |
|
$ |
17,349,841 |
|
$ |
8,223,783 |
Excluding the $8.1 million increase in research and development
expenses for amounts reserved against the AOF refund, research and
development expenses for the second quarter of 2020 were $9.2
million, including stock-based compensation expense of $0.5
million.
General and administrative expenses for the second quarter of
2020 were $4.5 million, including stock-based compensation expense
of $0.8 million.
The net loss for the second quarter of 2020 was $20.3 million
with basic and diluted net loss per share of $(0.78). During the
three months ended June 30, 2020, we recognized a $1.5 million
non-cash foreign exchange gain, which is 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 (the U.S. dollar).
Financial Outlook
Management believes that the current cash and cash equivalents
is sufficient to fund operations and capital requirements into the
fourth quarter of 2021.
About Zynerba Pharmaceuticals, Inc.
Zynerba Pharmaceuticals is the leader in innovative
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 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
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 June 30, |
|
Six months ended June 30, |
|
|
|
2020 |
|
|
|
2019 |
|
|
|
2020 |
|
|
|
2019 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
Research and development |
|
$ |
17,349,841 |
|
|
$ |
8,223,783 |
|
|
$ |
24,232,634 |
|
|
$ |
14,530,495 |
|
General and administrative |
|
|
4,492,034 |
|
|
|
3,287,276 |
|
|
|
8,408,603 |
|
|
|
6,446,933 |
|
Total operating expenses |
|
|
21,841,875 |
|
|
|
11,511,059 |
|
|
|
32,641,237 |
|
|
|
20,977,428 |
|
Loss from operations |
|
|
(21,841,875 |
) |
|
|
(11,511,059 |
) |
|
|
(32,641,237 |
) |
|
|
(20,977,428 |
) |
Other income (expense): |
|
|
|
|
|
|
|
|
Interest income |
|
|
26,601 |
|
|
|
439,201 |
|
|
|
228,285 |
|
|
|
790,152 |
|
Foreign exchange gain (loss) |
|
|
1,482,513 |
|
|
|
(63,327 |
) |
|
|
(257,638 |
) |
|
|
(94,926 |
) |
Total other income (expense) |
|
|
1,509,114 |
|
|
|
375,874 |
|
|
|
(29,353 |
) |
|
|
695,226 |
|
Net loss |
|
$ |
(20,332,761 |
) |
|
$ |
(11,135,185 |
) |
|
$ |
(32,670,590 |
) |
|
$ |
(20,282,202 |
) |
|
|
|
|
|
|
|
|
|
Net loss per share - basic and
diluted |
|
$ |
(0.78 |
) |
|
$ |
(0.50 |
) |
|
$ |
(1.32 |
) |
|
$ |
(0.98 |
) |
|
|
|
|
|
|
|
|
|
Basic and diluted weighted
average shares outstanding |
|
|
26,100,264 |
|
|
|
22,116,758 |
|
|
|
24,749,851 |
|
|
|
20,791,784 |
|
|
|
|
|
|
|
|
|
|
Non-cash stock-based
compensation included above: |
|
|
|
|
|
|
|
|
Research and development |
|
$ |
534,900 |
|
|
$ |
675,953 |
|
|
$ |
1,045,376 |
|
|
$ |
1,342,132 |
|
General and administrative |
|
|
812,533 |
|
|
|
805,752 |
|
|
|
1,625,409 |
|
|
|
1,635,865 |
|
Total |
|
$ |
1,347,433 |
|
|
$ |
1,481,705 |
|
|
$ |
2,670,785 |
|
|
$ |
2,977,997 |
|
|
ZYNERBA PHARMACEUTICALS,
INC.CONSOLIDATED BALANCE SHEETS
|
|
(unaudited) |
|
|
|
|
June 30, 2020 |
|
December 31, 2019 |
Assets |
|
|
|
|
Current assets: |
|
|
|
|
Cash and cash equivalents |
|
$ |
77,006,040 |
|
|
$ |
70,063,242 |
|
Incentive and tax receivables |
|
|
6,528,682 |
|
|
|
14,613,969 |
|
Prepaid expenses and other current assets |
|
|
1,804,243 |
|
|
|
2,378,812 |
|
Total current assets |
|
|
85,338,965 |
|
|
|
87,056,023 |
|
Property and equipment,
net |
|
|
641,263 |
|
|
|
362,724 |
|
Incentive and tax
receivables |
|
|
1,274,382 |
|
|
|
— |
|
Right-of-use assets |
|
|
227,529 |
|
|
|
345,849 |
|
Total assets |
|
$ |
87,482,139 |
|
|
$ |
87,764,596 |
|
Liabilities and
Stockholders' Equity |
|
|
|
|
Current liabilities: |
|
|
|
|
Accounts payable |
|
$ |
3,882,768 |
|
|
$ |
4,740,981 |
|
Accrued expenses |
|
|
8,936,501 |
|
|
|
7,073,506 |
|
Lease liabilities |
|
|
237,406 |
|
|
|
243,677 |
|
Total current liabilities |
|
|
13,056,675 |
|
|
|
12,058,164 |
|
Lease liabilities,
long-term |
|
|
— |
|
|
|
109,689 |
|
Total liabilities |
|
|
13,056,675 |
|
|
|
12,167,853 |
|
|
|
|
|
|
Stockholders' equity: |
|
|
|
|
Common stock |
|
|
29,255 |
|
|
|
23,211 |
|
Additional paid-in capital |
|
|
257,902,423 |
|
|
|
226,409,156 |
|
Accumulated deficit |
|
|
(183,506,214 |
) |
|
|
(150,835,624 |
) |
Total stockholders' equity |
|
|
74,425,464 |
|
|
|
75,596,743 |
|
Total liabilities and stockholders' equity |
|
$ |
87,482,139 |
|
|
$ |
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
Zynerba Pharmaceuticals (NASDAQ:ZYNE)
Historical Stock Chart
From Mar 2024 to Apr 2024
Zynerba Pharmaceuticals (NASDAQ:ZYNE)
Historical Stock Chart
From Apr 2023 to Apr 2024