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Enrollment continues in RECONNECT, a confirmatory pivotal Phase 3 trial of Zygel™ in patients with Fragile X syndrome (FXS); topline results expected second-half 2023
$55.9 million in cash and cash equivalents at September 30, 2022; Cash runway into first quarter 2024
DEVON, Pa., Nov. 14, 2022 (GLOBE NEWSWIRE) -- Zynerba Pharmaceuticals, Inc. (Nasdaq: ZYNE), the leader in innovative pharmaceutically-produced transdermal cannabinoid therapies for orphan neuropsychiatric disorders, today reported financial results for the third quarter ended September 30, 2022, and provided an overview of recent operational highlights and a pipeline update.
“Enrollment in our confirmatory pivotal Phase 3 RECONNECT trial continues, and we expect topline results in the second half of 2023,” said Armando Anido, Chairman and Chief Executive Officer of Zynerba. “With a cash runway into the first quarter of 2024, we remain well-positioned on achieving our goal of bringing Zygel to market as the first FDA approved treatment option for the significant unmet medical need that affects FXS patients and their families.”
Operational Highlights and Pipeline Update
Zygel in Fragile X Syndrome (FXS)
Zygel in 22q11.2 Deletion Syndrome (22q)
Third Quarter 2022 Financial Results
Research and development expenses were $5.0 million for the third quarter of 2022, including stock-based compensation of $0.5 million. General and administrative expenses were $3.5 million in the third quarter of 2022, including stock-based compensation expense of $0.6 million. Net loss for the third quarter of 2022 was $8.7 million, with basic and diluted loss per share of $(0.20).
Financial Outlook
As of September 30, 2022, cash and cash equivalents were $55.9 million, compared to $67.8 million as of December 31, 2021.
On May 11, 2021, the Company entered into a Controlled Equity OfferingSM Sales Agreement (2021 Sales Agreement), with Cantor Fitzgerald & Co., Canaccord Genuity, LLC, H.C. Wainwright & Co. LLC and Ladenburg Thalmann & Co. Inc., as sales agents, pursuant to which the Company may sell, from time to time, up to $75.0 million of its common stock. In the third quarter of 2022, the Company sold and issued 2,579,346 shares of its common stock under the 2021 Sales Agreement in the open market resulting in gross proceeds of $3.2 million and net proceeds of $3.0 million, after deducting commissions and offering expenses.
On July 21, 2022, the Company entered into a Purchase Agreement and registration rights agreement for up to $20 million with Lincoln Park Capital Fund, LLC (LPC), a Chicago-based institutional investor. In the third quarter of 2022, the Company sold and issued 200,000 shares of its common stock under the 2022 Purchase Agreement with LPC in the open market resulting in gross proceeds of $0.2 million and net proceeds of $0.1 million, after deducting offering expenses.
Management believes that the Company’s cash and cash equivalents are sufficient to fund operations and capital requirements into the first quarter of 2024. Top-line results from the Company’s confirmatory pivotal Phase 3 RECONNECT trial of Zygel in patients with FXS are expected in the second half of 2023.
About Zygel
Zygel is the first and only pharmaceutically-manufactured cannabidiol formulated as a patent-protected permeation-enhanced clear gel, designed to provide controlled drug delivery into the bloodstream transdermally (i.e. through the skin). Recent studies suggest that cannabidiol may modulate the endocannabinoid system and improve certain behavioral symptoms associated with neuropsychiatric conditions. Zygel is an investigational drug product in development for the potential treatment of behavioral symptoms associated with Fragile X syndrome (FXS), 22q11.2 deletion syndrome (22q) and autism spectrum disorder (ASD). The Company has received orphan drug designation for cannabidiol, the active ingredient in Zygel, from the FDA and the European Commission in the treatment of FXS and from the FDA for the treatment of 22q. Additionally, Zygel has been designated a Fast Track development program for treatment of behavioral symptoms of FXS.
About Zynerba Pharmaceuticals, Inc.
Zynerba Pharmaceuticals is the leader in innovative pharmaceutically-produced transdermal cannabinoid therapies for rare and near-rare neuropsychiatric disorders. We are committed to improving the lives of patients and their families living with severe, chronic health conditions including Fragile X syndrome, 22q11.2 deletion syndrome and autism spectrum disorder. Learn more at www.zynerba.com and follow us on Twitter at @ZynerbaPharma.
Cautionary Note on Forward-Looking Statements
This press release contains forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995. We may, in some cases, use terms such as “predicts,” “believes,” “potential,” “proposed,” “continue,” “estimates,” “anticipates,” “expects,” “plans,” “intends,” “may,” “could,” “might,” “will,” “should” or other words that convey uncertainty of future events or outcomes to identify these forward-looking statements. Such statements are subject to numerous important factors, risks and uncertainties that may cause actual events or results to differ materially from the Company’s current expectations. Management’s expectations and, therefore, any forward-looking statements in this press release could also be affected by risks and uncertainties relating to a number of other factors, including the following: the Company’s cash and cash equivalents may not be sufficient to support its operating plan for as long as anticipated; the Company’s expectations, projections and estimates regarding expenses, future revenue, capital requirements, incentive and other tax credit eligibility, collectability and timing, and availability of and the need for additional financing; the Company’s ability to obtain additional funding to support its clinical development programs; the results, cost and timing of the Company’s clinical development programs, including any delays to such clinical trials relating to enrollment or site initiation; clinical results for the Company’s product candidates may not be replicated or continue to occur in additional trials and may not otherwise support further development in a specified indication or at all; actions or advice of the U.S. Food and Drug Administration and foreign regulatory agencies may affect the design, initiation, timing, continuation and/or progress of clinical trials or result in the need for additional clinical trials; the Company’s ability to obtain and maintain regulatory approval for its product candidates, and the labeling under any such approval; the Company’s reliance on third parties to assist in conducting pre-clinical and clinical trials for its product candidates; delays, interruptions or failures in the manufacture and supply of the Company’s product candidates the Company’s ability to commercialize its product candidates; the size and growth potential of the markets for the Company’s product candidates, and the Company’s ability to service those markets; the Company’s ability to develop sales and marketing capabilities, whether alone or with potential future collaborators; the rate and degree of market acceptance of the Company’s product candidates; the Company’s expectations regarding its ability to obtain and adequately maintain sufficient intellectual property protection for its product candidates; the extent to which health epidemics and other outbreaks of communicable diseases, including COVID-19, could disrupt our operations or adversely affect our business and financial conditions; and the extent to which inflation or global instability, including political instability, may disrupt our business operations or our financial condition. This list is not exhaustive and these and other risks are described in the Company’s periodic reports, including the annual report on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K, filed with or furnished to the Securities and Exchange Commission and available at www.sec.gov. Any forward-looking statements that the Company makes in this press release speak only as of the date of this press release. The Company assumes no obligation to update forward-looking statements whether as a result of new information, future events or otherwise, after the date of this press release.
ZYNERBA PHARMACEUTICALS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
| (unaudited) | |||||||||||||||||
| Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||||
| Operating expenses: | |||||||||||||||||
| Research and development | $ | 5,039,228 | $ | 6,341,171 | $ | 15,632,150 | $ | 16,402,129 | |||||||||
| General and administrative | 3,453,648 | 3,869,481 | 10,933,411 | 11,531,824 | |||||||||||||
| Total operating expenses | 8,492,876 | 10,210,652 | 26,565,561 | 27,933,953 | |||||||||||||
| Loss from operations | (8,492,876 | ) | (10,210,652 | ) | (26,565,561 | ) | (27,933,953 | ) | |||||||||
| Other income (expense): | |||||||||||||||||
| Interest income | 251,855 | 5,038 | 439,590 | 16,614 | |||||||||||||
| Foreign exchange loss | (435,128 | ) | (376,637 | ) | (893,803 | ) | (576,619 | ) | |||||||||
| Total other income (expense) | (183,273 | ) | (371,599 | ) | (454,213 | ) | (560,005 | ) | |||||||||
| Net loss | $ | (8,676,149 | ) | $ | (10,582,251 | ) | $ | (27,019,774 | ) | $ | (28,493,958 | ) | |||||
| Net loss per share - basic and diluted | $ | (0.20 | ) | $ | (0.26 | ) | $ | (0.65 | ) | $ | (0.73 | ) | |||||
| Basic and diluted weighted average shares outstanding | 43,746,878 | 40,092,128 | 41,831,998 | 38,933,209 | |||||||||||||
| Non-cash stock-based compensation included above: | |||||||||||||||||
| Research and development | $ | 482,306 | $ | 818,390 | $ | 1,500,447 | $ | 2,443,667 | |||||||||
| General and administrative | 558,794 | 751,603 | 1,809,678 | 2,325,512 | |||||||||||||
| Total | $ | 1,041,100 | $ | 1,569,993 | $ | 3,310,125 | $ | 4,769,179 | |||||||||
ZYNERBA PHARMACEUTICALS, INC.
CONSOLIDATED BALANCE SHEETS
| (unaudited) | |||||||||
| September 30, 2022 | December 31, 2021 | ||||||||
| Assets | |||||||||
| Current assets: | |||||||||
| Cash and cash equivalents | $ | 55,934,491 | $ | 67,808,000 | |||||
| Incentive and tax receivables | 1,378,738 | 9,580,468 | |||||||
| Prepaid expenses and other current assets | 3,487,626 | 2,831,392 | |||||||
| Total current assets | 60,800,855 | 80,219,860 | |||||||
| Property and equipment, net | 419,863 | 385,833 | |||||||
| Incentive and tax receivables | 751,815 | — | |||||||
| Right-of-use assets | 394,205 | 565,814 | |||||||
| Total assets | $ | 62,366,738 | $ | 81,171,507 | |||||
| Liabilities and Stockholders' Equity | |||||||||
| Current liabilities: | |||||||||
| Accounts payable | $ | 1,619,697 | $ | 1,798,813 | |||||
| Accrued expenses | 7,598,187 | 7,896,598 | |||||||
| Lease liabilities | 213,428 | 209,068 | |||||||
| Total current liabilities | 9,431,312 | 9,904,479 | |||||||
| Lease liabilities, long-term | 178,672 | 353,694 | |||||||
| Total liabilities | 9,609,984 | 10,258,173 | |||||||
| Stockholders' equity: | |||||||||
| Common stock | 47,063 | 41,218 | |||||||
| Additional paid-in capital | 319,210,944 | 310,353,595 | |||||||
| Accumulated deficit | (266,501,253 | ) | (239,481,479 | ) | |||||
| Total stockholders' equity | 52,756,754 | 70,913,334 | |||||||
| Total liabilities and stockholders' equity | $ | 62,366,738 | $ | 81,171,507 | |||||
Zynerba Contacts
Jim Fickenscher, CFO and VP Corporate Development
Zynerba Pharmaceuticals
484.581.7483
fickenscherj@zynerba.com
Peter Vozzo
ICR Westwicke
Office: 443.213.0505
Cell: 443.377.4767
Peter.Vozzo@Westwicke.com