How Important Is Zynerba's ZYN002 For Children Who Have Fragile X Syndrome?

Zynerba Pharmaceuticals Inc ZYNE traded up as much as 82.6 percent Thursday after reporting positive top-line results for its uncontrolled phase 2 study of ZYN002 in children with Fragile X syndrome.

The synthetic cannabinoid transdermal gel “successfully met its primary endpoint” on the Anxiety, Depression and Mood Scale (ADAMS) and showed “clinically meaningful improvements” in behavior, according to Zynerba's press release.

Potential Reach

The genetic, autism-spectrum disorder has no approved medical treatment and affects about one in 4,000 males and one in 8,000 females, according to the National Institutes of Health. Fragile X is rare enough that the U.S. Food and Drug Administration granted ZYN002 Orphan Drug designation for its treatment.

“Many children with Fragile X and their families struggle with the lack of approved drugs to safely treat their symptoms,” Steven Siegel, professor and chair of psychiatry and behavior sciences at the University of Southern California’s Keck School of Medicine, said in the Zynerba press release. “This study suggests that ZYN002 is ready for the next phase of development, and I believe that this drug holds great promise as a potential treatment for these very difficult-to-treat symptoms.”

As yet, patients are generally prescribed lifestyle accommodations and behavioral therapies, and any medications target specific symptoms, such as Prozac for aggression or Adderall for attention deficit.

Zynerba expects to meet with the U.S. Food and Drug Administration in the first half of 2018 to discuss ZYN002’s path to approval, and it intends to launch a Phase 2/3 trial soon after.

Positive Reception

The Street received the news with optimism despite the trial's open-label status and small, 18-patient population.

"We are encouraged not only by the statistical significance, but the effect sizes observed on multiple endpoints," Cantor Fitzgerald analyst Elemer Piros wrote in a morning note. "The reductions (about 50 percent) in severity are clearly clinically meaningful. We expect a positive reaction in the stock, especially considering the previous negative performance following the negative and ambiguous results in two other indications" (see his track record here).

Last month, the drug failed phase 2 trials for the treatment of epilepsy and prompted a 56-percent stock drop.

Minority Skeptics

A few authoritative biotech figures remained dubious of the candidate's potential even after Thursday's Fragile X report. Adam Feuerstein, reporter at STAT News, cautioned that the latest data is unreliable.

Alfredo Fontanini, associate professor of neurobiology and behavior at Stony Brook University, added that Zynerba’s effect is “entirely consistent with” the placebo effect.

At the time of publication, Zynerba was trading at $10.60, up 70.9 percent off the open.

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