Zynerba Pharmaceuticals Inc. (ZYNE) reported a net loss of $12 million and a diluted net loss per share of $(0.89) for the second quarter ending June 30, 2018. General and administrative expenses were $3.4 million, including stock-based compensation expense of $1.0 million. Research and development expenses for the second quarter of 2018 were $8.5 million, including stock-based compensation of $0.8 million.
The company is still sitting in a solid cash position with $43.1 million, compared to $52.1 million as of March 31, 2018. On July 24, 2018, the company closed a follow-on offering selling 4,062,500 shares of common stock at an offering price of $8.00 per share, resulting in net proceeds of $30.0 million after deducting underwriting discounts and commissions and offering expenses. According to the company statement, Zynerba has also granted the underwriters a 30-day option to purchase up to 609,375 additional shares of common stock at the public offering price, less underwriting discounts and commissions, which expires on August 19, 2018. Zynerba intends to use the net proceeds of the proposed offering to support the clinical development of ZYN002, for additional research and development, and for general corporate purposes.
“Our strong clinical and corporate momentum continued over the past few months, including initiating CONNECT-FX, a pivotal study in Fragile X syndrome, and the BELIEVE 1 study in developmental and epileptic encephalopathies,” said Armando Anido, Chairman and Chief Executive Officer of Zynerba. “We presented exciting new data from the ongoing FAB-C study highlighting significant and sustained improvements in behavioral symptoms of FXS in children and adolescents treated with ZYN002 out to 38 weeks. Importantly, we closed a follow-on offering on July 24th, which added $30 million to our cash position. We believe this extends our cash runway into the first half of 2020, past the top-line results from the CONNECT-FX and BELIEVE-1 studies. Assuming positive results in CONNECT-FX and supportive regulatory interactions, we believe the additional capital will fund our NDA filing for ZYN002 for the treatment of behavioral symptoms of Fragile X.”
The stament gave an update on the company’s main drug at this time ZYN002. “Adult refractory focal seizure patients administering transdermal ZYN002 in STAR 1 and STAR 2 showed continued reductions in focal seizures compared to baseline through 12 months of treatment. ZYN002 was well tolerated. These data continue to suggest the potential for ZYN002 in the treatment of epilepsy, and provide insight into the design of the upcoming double blind, placebo controlled Phase 2b study, which the Company expects to initiate in the second half of 2018.”
Zynerba stock was sliding this morning following the earnings announcement. The biotech company has had a difficult year. It’s failed ZYN001 drug was a huge setback. Then the company’s stock offering was met with dismay by investors. Many felt the company had enough cash to see it through additional R&D and that it didn’t need to add more shares to the mix.
Zynerba has also burned through a tremendous amount of cash. In a handful of quarters, it has gone from a cash position of $77 million to its current $43 million.
According to Yahoo! Finance, there are seven analysts covering the stock. Three have hold ratings, while four have buy ratings. The average price target is $19.17. The stock was lately trading at $6.35, down 1% in pre-market trading.