Shares of Zynerba Pharmaceuticals Inc ZYNE have lost almost 60 percent of their value in the last month, after the phase 2 STAR 1 clinical trial for its CBD gel, ZYN002, aimed at the treatment of adult patients suffering from epilepsy with focal seizures, failed to meet its primary endpoint of driving a statistically significant reduction in seizures.
This letdown wasn't about CBD and its therapeutic potential, as it might seem at a first glance, 420 Investor Alan Brochstein explained, but rather about the company’s transdermal delivery method’s effectiveness.
At the time, Benzinga shared a look at what this flop meant for the main player in the cannabinoid-based biotechnology space, GW Pharmaceuticals PLC- ADR GWPH. As a follow-up, Benzinga evaluated the implications of Zynerba’s failure for Nemus Bioscience Inc NMUS, a life-science biotech company focused on the development of cannabinoid-based therapeutics for the treatment of “diseases of urgent medical need,” which doesn't touch the plant, using synthetic cannabinoid molecules instead. In order to find an answer to this, Benzinga reached out to the company’s CEO, Brian Murphy, and to Brochstein, and asked them to walk us through the current situation.
Waves Of Dominance
Similar to what happens in other therapeutic spaces, Murphy expects to see “waves of dominance” in the cannabis therapeutics industry, “based on the evolution of the therapies.”
The chief executive noted that GW Pharmaceuticals and Insys Therapeutics Inc INSY’s “plant derived (in lack of a better term)” cannabinoid therapies are delivered orally, arguing that, from his point of view, these are “first generation” methods. “I think, ultimately, as time progresses, you will see these compounds replaced by second generation compounds. And, that is where I see Nemus fitting in,” he told Benzinga.
“Second generation” compounds like Nemus’ are synthetically manufactured prodrug or analog versions of the current plant-derived cannabinioids, “designed in such a way to enhance their bioavailability and pharmacokinetics through specific routes of administration that hopefully can be tailored to the disease being treated.”
Check out the different prodrugs and analogs Nemus is testing, which expects to present further clinical data concerning an ocular formulation of a CBD analog during the fall. The piece in question also talks about a $20 million financing round that has not been completed yet.
Cannabinoid Delivery Systems
Even though cannabinoids aren't new, the scientific community has only recently started studying its therapeutic potential in depth. As in any other therapeutic development cycle, there will be highs and lows, Murphy said.
“Despite the failure, Zynerba should be commended for advancing the synthetic manufacturing of cannabinoids and also coming up with a novel way of getting the drug into the body, bypassing the liver, attempting to do it transdermally,” he added. “They will probably have to go back and reengineer the product. So we’ll have to wait and see what happens. But I think Zynerba should be commended anyways.”
Murphy explained that Nemus is attempting something similar in terms of alternative delivery methods, even though it’s not transdermal delivery they're focusing on.
Could the company replace Zynerba as the main competitor to GW Pharmaceuticals? Do its synthetic formulations of cannabinoids carry greater potential than GW Pharma’s plant-based cannabinoids? Do these formulations make it easier for the company to have exclusivity over the compounds, when compared to the more-difficult-to-patent plant-based molecules?
Brochstein said, "I followed Nemus closely early on, but when they shifted the focus to synthetic cannabinoids I became less interested.
“With that said, I was optimistic about their prospects when I learned of the financing [mentioned above], but the failure to close leaves me very cautious. If the company isn't successful in collecting payment, it's not clear that it has the resources to pursue the claim,” he added.
Regarding the current cash position of the company, Nemus’ latest 10Q says the company had $108,859 in cash and cash equivalents as of June 30, 2017, and total current assets of $445,027. However, total current liabilities surge to $1,188,638 — without counting $1,073,310 in Series B warrants.
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