Zynerba shares crushed (again) as back-to-back flops leave lead drug under a cloud

Armando Anido

A week ago, Zynerba shares $ZYNE were beaten up after the biotech said its mid-stage study for a cannabis-derived drug had failed to improve the lives of epilepsy patients. This morning, the Devon, PA-based biotech doubled down on failure with news of another Phase II flop — this time using the same cannabinoid to treat osteoarthritis.

The biotech frankly conceded that both doses of ZYN002 used in the Phase II had failed to significantly reduce knee pain caused by osteoarthritis, done in by the placebo response. Investigators did get a hit on a composite score for a greater than 30% reduction in daily pain scores, and that is what they used to spin this study into a success story — leaving Zynerba execs planning for a Phase III pivotal trial.

Researchers also did some after-the-fact data analysis to show that their drug worked effectively in men, but not women.

That all adds up as a tough sale for Zynerba and investors were quick to shake their heads over the back-to-back setbacks. The biotech’s shares were crushed again, this time dropping 24% in pre-market trading. The stock is trading at less than half of what it was at the beginning of this month.

CEO Armando Anido, though, insists that with the opioid crisis gaining momentum and worries about side effects from NSAIDs or COX-2 inhibitors, ZYN002 has a viable future in a market involving 31 million patients in the US.
Noted Anido today:

Data from the STOP trial will help shape future studies with ZYN002 in osteoarthritis. We will request an end of Phase 2 meeting with the U.S. Food and Drug Administration, which we believe will take place before the end of this year, and plan to move quickly to our pivotal Phase 3 program for ZYN002 in OA.

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Research Scientist - Immunology
Recursion Pharmaceuticals Salt Lake City, UT
Director of Operations
Atlas Venture Cambridge, MA

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