It's High Time For Zynerba Positives: Investors Await 3 Key Mid-Stage Trial Reads On Cannabidiol ZYN002

Zynerba Pharmaceuticals Inc ZYNE is about to embark upon a journey with unknown destinations, as investors brace for a trio of reads from the company in the third quarter of 2017.

Focus: 3 Phase 2 Reads Of ZYN002

Cantor Fitzgerald said in a note released Monday it remains focused on three key mid-stage trial results of Zynerba Pharma's ZYN002, testing it for adult epilepsy, pain due to osteoarthritis, or OA, and fragile X syndrome, or FXS.

ZYN002 is a synthetic cannabidiol, or CBD, formulated as a permeation-enhanced gel for transdermal delivery. CBD is one of the many active cannabinoids identified in cannabis.

Following the company's fourth-quarter earnings call, analyst Elemer Piros said he is encouraged by the results of separate clinical studies using CBD in the treatment of epilepsy. This, according to the analyst, supports the potential for a positive readout with ZYN002.

Progress On The Trials

• The Phase 2 STAR 1 trial in adult epilepsy patients recently completed enrollment of 170 patients randomized and 19 patients being assessed in the eight-week baseline period. Moreover, 96 percent (106 of 110) of patients who completed the STAR 1 trial elected to enroll into the open label extension STAR 2 study.
• The Phase 2 STOP 2 trial in pain due to OA has also completed enrollment with 320 patients randomized.
• The firm expects top-line data from Star 1 and Stop 2 trials in July/August 2017.
• The Phase 2 FAB-C study in FXS patients continues to enroll with a slight slippage in the timeline. The trial has enrolled patients in the single digits and is now expected to read out data in the third quarter of 2017, as opposed to the previous deadline of the first half of 2017.

Updating Financial Model

Cantor Fitzgerald also updated its financial model, incorporating the company's financial progress and recent equity financing. The firm noted that the company strengthened its balance sheet in the first quarter of 2017 through an equity offering, which fetched it net proceeds of $54.3 million.

"Following full-year financial results, we are rolling forward our NPV to begin at 2018 (previously 2017), which is offset by our estimate of the company's increased total share count," the firm said.

Cantor Fitzgerald has an Outperform rating and a $28 price target for the shares of Zynerba Pharma.

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