Zynerba Pharmaceuticals Inc (NASDAQ:ZYNE) stock rocketed three times higher as investors are set to pocket a bumper payday after Harmony Biosciences (NASDAQ:HRMY) agreed to buy the cannabinoid therapies company for US$200 million.
Harmony is to pay US$60 million, US$1.1059 per share, in cash upfront plus up to US$140 million in contingent future payments tied to clinical, regulatory and sales milestones.
It gives Harmony control of Zynerba’s lead asset, a potential product for patients with a rare neurological disease called fragile X syndrome, for which it is in a Phase 3 trial.
"This is an important step in Harmony's strategy to build a diversified portfolio of innovative assets to address unmet medical needs and drive our long-term growth,” said Harmony chief executive Jeffrey Dayno.
“This acquisition affords us the opportunity to advance the development and delivery of a potentially transformative treatment for the symptoms of Fragile X syndrome and other rare neuropsychiatric disorders."
Armando Anido, Zynerba's chief executive, meanwhile, added: “"Harmony's development and commercial expertise, technologies, people and focus on rare neurological diseases are an excellent strategic fit with Zynerba.
“With Harmony's scale, resources and proven commercial excellence, they are well positioned to potentially bring to market the first pharmaceutical product indicated for the treatment of behavioral symptoms of Fragile X syndrome and to maximize the value of Zygel."
Zynerba's Zygel is described as “the first and only pharmaceutically manufactured, synthetic cannabidiol, a non-euphoric cannabinoid”. Using a gel delivery system to the circulatory system it is intended to help with symptoms of the debilitating disorder without the presence of THC, the cause of the euphoric effect of cannabis.
In New York, Zynerba stock is up around 286% at US$1.31 per share, after closing Friday’s session priced at 34 cents a share – which previously gave it a market value of just US$18.2 million prior to the Harmony news.