Zynerba Pharmaceuticals, Inc. (Nasdaq: ZYNE) posted positive results as the company continues to further its research and development goals — with signs of a FDA approval looming in the distance. The cannabis biotech company reported financial results for the second quarter ending June 30, 2021,
Research and development expenses were $5.4 million for the second quarter of 2022, the company said, including stock-based compensation of $0.5 million. General and administrative expenses were $3.7 million in the second quarter this year, including stock-based compensation expense of $0.6 million. As an emerging biotech company, Zynerba does not have revenue at this time as it develops drugs.
The company said that it has continued to focus resources toward developing treatment for two orphan neuropsychiatric disorders, Fragile X syndrome and 22q Deletion Syndrome.
“During the second quarter, we were pleased to announce positive top-line results from our Phase 2 trial of Zygel in patients with 22q,” said CEO Armando Anido. “In addition to further progressing 22q, we are focused on completing the Phase 3 RECONNECT trial for children and adolescents with Fragile X syndrome, with top-line results expected in the second half of 2023.”
With a cash runway extending past expected availability of top-line results from our RECONNECT trial, we remain well-positioned on achieving our goal of bringing the first pharmaceutical product indicated for the treatment of behavioral symptoms of Fragile X syndrome to market.”
This echoes Zynerba’s belief that the results from RECONNECT, if positive, will be sufficient to support the submission of a New Drug Application (NDA) for Zygel in patients with Fragile X syndrome.
The company also said it plans to meet with the U.S. Food and Drug Administration (FDA) to discuss the data and the regulatory path forward for its open label Phase 2 INSPIRE trial of Zygel in children and adolescents with 22q Deletion Syndrome — also called DiGeorge syndrome, a chromosomal disorder with no known cure that results in poor development of several body systems.
The company said it plans to move forward in 22q as an orphan indication and has previously received orphan drug designation from the FDA for cannabidiol, the active ingredient in Zygel, for the treatment of 22q.
While data from the company’s ASD clinical development program to date are compelling, given the difficult financing market, the company has deferred the start of the Phase 3 development program in ASD as it has prioritized its resources on FXS and 22q in the near term.
Net loss for the second quarter of 2022 was $9.9 million, with basic and diluted loss per share of $0.24 cents. Cash and cash equivalents were $62.5 million, versus $67.8 million as of December 31, 2021.
In May, the company entered into a Controlled Equity Offering Sales Agreement — with Cantor Fitzgerald & Co., Canaccord Genuity, LLC, H.C. Wainwright & Co. LLC and Ladenburg Thalmann & Co. Inc. as sales agents — in which the company may sell, from time to time, up to $75 million of its common stock.
Zynerba then sold and issued 488,892 shares of its common stock in the second quarter under the agreement in the open market — resulting in gross proceeds of $0.9 million and net proceeds of $0.8 million, after deducting commissions and offering expenses.
After that, from July 1, 2022 through August 8, 2022, the company sold and issued 1,469,714 shares of its common stock under the agreement in the open market resulting in gross proceeds of $1.8 million, and net proceeds of $1.6 after deducting commissions and offering expenses.
Zynerba also struck an equity purchase deal last month for up to $20 million with Chicago-based firm Lincoln Park Capital Fund (LPC).
Lincoln Park Capital is expected to provide financial flexibility and is aligned with Zynerba’s long-term strategy for value creation, the company said.
Zynerba said it plans to use any net proceeds from the sale of its common stock to LPC for working capital and general corporate purposes, including research and development expenses and capital expenditures.
Management believes that the Company’s cash and cash equivalents are sufficient to fund operations and capital requirements through the end of 2023 or into early 2024, after the expected availability of top-line results from its confirmatory pivotal Phase 3 RECONNECT trial of Zygel in patients with FXS.