Roth starts Zynerba Pharma at buy; PT $36

Roth Capital Partners initiated coverage of Zynerba Pharmaceuticals (NASDAQ:ZYNE) with a “buy” rating and $36 price target. The stock closed at $11.56 on April 29.

Zynerba is focused on development of Zygel, a topical formulation of CBD for the treatment of neuropsychiatric disorders. The company is currently conducting a Phase 2/3 trial of Zygel for the treatment of Fragile X Syndrome (FXS), an orphan disease with no approved treatments.

Data from the FXS trial are expected in the second half of 2019, and if positive, could lead to an NDA filing in 2020 and a potential commercial launch in 2021, writes analyst Jerry Isaacson.

“While the FXS program is valuable as a standalone program, Zynerba’s pipeline programs have more potential value,” he said.

Zynerba’s next program is for developmental and epileptic encephalopathy (DEE), which is also an orphan disease but has a much larger patient population than FXS. Enrollment has been completed for a 50-patient, open-label Phase 2 trial in DEE and data are expected in the third quarter, he added.

Mr. Isaacson said that Zynerba also is enrolling patients with autism spectrum disorder (ASD) in a Phase 2 trial, which should produce data in the first half of 2020. ASD affects as many as one million patients in the U.S., and its incidence is increasing.

“Considering the overlap in symptoms between FXS and ASD, we believe there is good potential for Zygel to produce positive data in the ongoing Phase 2 trial,” he added.

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