Drug Development, Results

THC therapy tanks in PhI, sending Zynerba’s stock tumbling yet again

Zynerba’s stock $ZYNE is getting crushed yet again after news that its THC therapy has flopped in a Phase I trial. At least this time, they’re finding out early.

The Devon, Pennsylvania-based company was testing its transdermal patch meant to deliver THC, the psychoactive cannabinoid in cannabis, as a pro-drug in healthy volunteers. The hope was to make a THC therapy that didn’t have to be taken orally, which can cause high peak levels of THC in the blood causing increased psychoactive side effects. Unfortunately, the company wasn’t able to get ZYN001 to take. The Phase I study results indicated that target blood levels of 5 to 15 ng/ml THC were not achieved.

Often compared to GW Pharmaceuticals, which has had some striking successes in the field, Zynerba has watched its stock yo-yo over the past year. This morning, the company’s stock is down 22% in pre-market trading. And it’s not the first time Zynerba has crashed on bad clinical trial news. Last summer, its other pipeline drug ZYN002, a CBD gel, flopped in mid-stage trials in epilepsy and knee pain from osteoarthritis.

The company has had more luck with ZYN002 in Fragile X syndrome, an autism spectrum disorder that’s tough to treat at the source. Zynerba didn’t go after the disease itself, but rather symptoms that can make life miserable for the patients and their families. Since its THC pro-drug has flopped in Phase I, Zynerba said it’s going to focus its efforts on Fragile X and developmental and epileptic encephalopathy (DEE), and adult refractory epilepsy programs.

Armando Anido

We spoke with Zynerba’s CEO Armando Anido back in April about how the company might compete with GW Pharmaceuticals. At the time, Anido said he was confident there was room for both players.

“We do believe that we have a different way of delivering CBD, it is transdermal, it bypasses the GI tract, of which we know GW has had a number of GI disturbances with their product,” he said. “It also bypasses first-pass metabolism, which we believe actually may minimize some of the issues that GW faced with elevated transaminases in the liver.”

Anido also noted the company has enough cash to get “well into 2019,” including the mid-stage trials they’re doing in DEE and Fragile X. The company’s press release this morning clarified that it has $52 million in cash and cash equivalents.

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