Zynerba Pharmaceuticals, Inc.

ZYNE Details
 
Deep Product Pipeline Focused on High Unmet Medical Needs: Zynerba Pharmaceuticals, Inc. (NASDAQ: ZYNE) is a clinical-stage specialty pharmaceutical company with key focus on the development of transdermal cannabinoid therapies used for rare and near-rare neuropsychiatric disorders which include Fragile X syndrome (FXS), autism spectrum disorder (ASD), 22q11.2 deletion syndrome, and a heterogeneous group of rare and ultra-rare epilepsies known as developmental and epileptic encephalopathies (DEE). During FY18, the company initiated the pivotal study of CONNECT-FX, conducted across the United States under an Investigational New Drug (IND) application opened with the FDA. Patients will be randomized 1:1 to either trial drug or placebo. Randomization will be stratified by gender, weight, and investigator geographic region. The company has one patent-protected product named Zygel™ under its portfolio.

Q3FY19 Operational Highlights for the Period ended 30 September 2019: ZYNE announced its quarterly results, wherein the company reported a net loss from operation amounting to $1.926 million, lower from $7.99 million in Q3FY18. During the quarter, the company recorded $8.3 million as an Incentive and tax receivable followed by a subsequent credit to research and development expense. Income from research and development stood at $1.604 million as compared to an expenditure of $4.859 million in the previous corresponding quarter. The company reported net cash used in operating activities at $27.353 million for the first nine months of FY19 while the company reported net cash used in investing activities at $0.081 million during the same period. The company reported $77.547 million of cash and cash equivalent as on 30 September 2019. General and administrative expenses stood at $3.530 million as compared to $3.125 million in the previous corresponding quarter.


Q3FY19 Income Statement Highlights (Source: Company Reports)

Outlook: The Company expects revenue generation from the second quarter of FY20 aided by the top-line results from the CONNECT-FX trial during the first half of FY20. The NDA Submission for its FXS treatment is expected in the Q4FY20. During the first half of FY20, the company is likely to meet with FDA to discuss DEE pivotal program. ZYNE is expecting Phase 2 BRIGHT top-line results from its autism spectrum disorder (ASD) treatment. The company is anticipating losses for the foreseeable future, while these losses are expected to increase as ZYNE continues to develop and seek regulatory approvals for the aforesaid segments. Due to the various risks and uncertainties related to product development, ZYNE is unable to predict the efficacy or amount of increased expenses in the coming quarters.

 Stock Recommendation: The stock of ZYNE closed at $5.70 with a market capitalization of ~$132.23 million. The stock is trading at the lower band of its 52-week trading range of $3.56 to $16.47. As per the Management, the current cash and cash equivalents and the proceeds anticipated from the Advance Overseas Finding (AOF) are enough to fund operations and capital obligations for the second half of FY21. For the clinical advancement purposes and to commercially develop its product line, ZYNE might be seeking additional financing based upon the fund requirements for the operational expenses during the coming quarters. Considering the aforesaid facts, current trading levels, upcoming approval from the regulatory bodies, we have a watch stance on the stock at the closing price of $5.70, down 5.32% as on 17 January 2020.
 
 
ZYNE Daily Price Chart (Source: Thomson Reuters)

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