viewZynerba Pharmaceuticals

Zynerba Pharmaceuticals shares plunge after its net loss in 1Q widens

The company has $52.1mln in cash to keep it going until 2019

medicinal marijuana
Zynerba makes cannabinoid treatments delivered via the skin

Shares in Zynerba Pharmaceuticals (NASDAQ:ZYNE) took a nose-dive in afternoon trade after the clinical stage neuropsychiatric pharmaceutical company reported a widening in its net loss in the first quarter.

Zynerba’s stock dropped by 13% to US$9.01 after its net loss ballooned to US$12.3mln in the first quarter or $0.09 per share, which was even bigger than its loss of US$7.3mln or US$0.06 in the same period a year ago.

Zynerba's principal line of business are cannabinoid treatments delivered via the skin to treat neurological and psychiatric disorders.

As part of its research, it plans to enroll about 200 pediatric and adolescent patients from the U.S., Australia and New Zealand in a study to assess the use of its transdermal cannabinoid gel ZYN002 to treat Fragile X syndrome.

It has also begun a six-month Phase 2 clinical trial to evaluate the effectiveness of this same drug ZYN002 in fifty children who suffer from an array of epilepsy syndromes.

Lastly, Zynerba will use ZYN001, a drug consisting of THC delivered via a patch, in patients with Tourette syndrome, in a phase 2 study expected in the second half of this year.

Christopher Liu, an Oppenheimer analyst, estimates that ZYN002 has a 40% probability of clinical and commercial success in Fragile X syndrome, but he isn’t able to attribute a value for either the use of ZYN002 to treat epilepsy and other diseases or for ZYN001. As a result, Liu is remaining on the sidelines as far as the stock is concerned due to a lack of a "near-term, meaningful catalyst".

Liu expects Zynerba will spend as much as US$42mln this year and thinks its current cash level gives the company “runway” through mid 2019. The company can also take advantage of an at-the-market stock offering to fund operations  and hit milestones later in 2019.

The company said its cash position of US$52.1mln can fund its operations and capital requirements well into 2019.

Quick facts: Zynerba Pharmaceuticals

Price: 3.31 USD

Market: NASDAQ
Market Cap: $96.83 m

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