Zynerba Pharmaceuticals, Inc. (NASDAQ:ZYNE), released financial results for the third quarter ended September 30, 2022.
Q3 2022 Financial Highlights
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Research and development expenses were $5.0 million for the third quarter of 2022, including stock-based compensation of $0.5 million.
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General and administrative expenses were $3.5 million in the third quarter of 2022, including stock-based compensation expense of $0.6 million.
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Net loss for the third quarter of 2022 was $8.7 million, with basic and diluted loss per share of $(0.20).
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As of September 30, 2022, cash and cash equivalents were $55.9 million, compared to $67.8 million as of December 31, 2021.
Operational Highlights and Pipeline Update
Zygel in Fragile X Syndrome (FXS)
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The company continues to expect topline results from RECONNECT, a confirmatory pivotal Phase 3 trial of Zygel in patients with FXS, in the second half of 2023. The company believes that the results from RECONNECT, if positive, will be sufficient to support the submission of a new drug application for Zygel in patients with FXS.
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In October 2022 the company announced that the U.S. Patent and Trademark Office issued a patent titled “Treatment of fragile X syndrome with cannabidiol,” which includes claims directed to methods of treating Fragile X syndrome with cannabidiol. This new patent, which expires in 2038, is part of an expanding international intellectual property portfolio covering the company’s transdermal cannabidiol product candidate, Zygel.
Zygel in 22q11.2 Deletion Syndrome (22q)
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Based on the positive phase 2 INSPIRE trial data announced in June 2022, the company requested and has been granted an initial meeting with the U.S. Food and Drug Administration before the end of 2022 to obtain feedback on the phase 2 data and regulatory pathway for Zygel in patients with 22q. The company currently plans to initiate a phase 3 program in children and adolescents with 22q following topline results from RECONNECT.
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In November 2022, the company announced that the USPTO issued a patent titled “Treatment of 22q11.2 deletion syndrome with cannabidiol,” which includes claims directed to methods of treating one or more behavioral symptoms of 22q with cannabidiol, and expires in 2040.
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The company presented data at The Society for the Study of Behavioural Phenotypes 24th International Research Symposium in September 2022 and the 2022 National Organization for Rare Disorders Rare Diseases and Orphan Products Breakthrough Summit in October 2022 from the first 14-week treatment period of the phase 2 INSPIRE trial. These data suggest a positive risk-benefit profile for Zygel in improving anxiety-related and behavioral symptoms in children and adolescents with 22q. Statistically significant improvements from baseline were seen in the pediatric anxiety rating scale, the total score and all five subscales of the anxiety, depression and mood scale and all five subscales of the aberrant behavior checklist – community. In addition, the majority of patients showed clinically meaningful improvements as demonstrated by the clinical global impression – improvement. Zygel was shown to be well tolerated, and the safety profile was consistent with previously released data from other Zygel clinical trials.
Financial Outlook
On May 11, 2021, the company entered into a controlled equity offeringSM 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. In the third quarter of 2022, the company sold and issued 2.6 million of its common stock under the 2021 sales agreement in the open market resulting in gross proceeds of $3.2 million and net proceeds of $3.0 million, after deducting commissions and offering expenses.
On July 21, 2022, the company entered into a purchase agreement and registration rights agreement for up to $20 million with Lincoln Park Capital Fund, LLC, a Chicago-based institutional investor. In the third quarter of 2022, the company sold and issued 200,000 shares of its common stock under the 2022 purchase agreement with LPC in the open market resulting in gross proceeds of $200,000 and net proceeds of $100,000, after deducting offering expenses.
Management believes that the company’s cash and cash equivalents are sufficient to fund operations and capital requirements into the first quarter of 2024. Top-line results from the company’s confirmatory pivotal phase 3 RECONNECT trial of Zygel in patients with FXS are expected in the second half of 2023.
Price Action
Zynerba shares were trading 2.92% lower at $0.631 per share at the time of writing Monday morning.
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