Zynerba Pharmaceuticals Announces that Results from Phase 2 STOP Trial Support Continued Development of ZYN002 in Osteoarthritis

Zynerba to host conference call and webcast today, August 14 at 8:30 am ET

Devon, PA, Aug. 14, 2017 – Zynerba Pharmaceuticals, Inc. (NASDAQ:ZYNE), a clinical-stage specialty pharmaceutical company dedicated to developing and commercializing innovative transdermal pharmaceutically-produced cannabinoid treatments, today reported top line results from its Phase 2 STOP (Synthetic Transdermal Cannabidiol for Treatment of Knee Pain due to Osteoarthritis) clinical trial evaluating ZYN002 (cannabidiol [CBD] gel). The study did not meet its primary endpoint of reduction from baseline in the weekly mean of the 24-hour average worst pain score at week 12 for either dose. However, statistically significant results were achieved for a number of secondary endpoints. Importantly, the composite responder analysis (defined as a ≥30 percent reduction in worst average daily pain scores and a ≥20 percent improvement in the WOMAC physical function score) for 250 mg daily of ZYN002 4.2% CBD gel achieved statistical significance (p=0.016). A trend toward statistical significance was observed in other secondary endpoints.

“Many osteoarthritis patients using currently available medicines do not experience relief from pain and improved physical functioning, or cannot tolerate them due to side effects,” said Daniel Clauw, M.D., Professor of Pain Management and Anesthesiology at the University of Michigan, and Director of the Chronic Pain and Fatigue Research Center. “The STOP trial results are encouraging and suggest that ZYN002 can play an important role in impacting the pain and impaired physical function associated with osteoarthritis, with a well-tolerated safety profile. I am particularly impressed with the composite analysis result which accounts for both pain and physical function. I believe that ZYN002 may provide a promising treatment option for OA, and I look forward to participating in future studies.”

“The results from this study are very encouraging and for the first time suggest that CBD has a clinically meaningful impact in osteoarthritis, which affects approximately 31 million people in the United States,” said Armando Anido, Chairman and Chief Executive Officer of Zynerba. “In recent years, as the opioid epidemic has worsened, doctors, patients and their families have continued to emphasize the need for new, non-opioid pain medications, especially those with more favorable side effect profiles than NSAIDs or COX-2 inhibitors.”

Anido continued, “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. I want to thank the participating patients, physicians, study coordinators, and the Zynerba team for their support of this important study.”

Three hundred and twenty (320) patients aged 41 to 78 years of age with confirmed osteoarthritis of the knee were randomized in the double-blind, multi-center STOP trial. Patients who completed the one-week washout and the seven-to-10-day baseline phase were randomized 1:1:1 to receive either 250 mg of ZYN002 4.2% CBD gel daily, 500 mg of ZYN002 daily, or placebo, for 12 weeks. Enrolled patients had a mean worst knee pain score of 6.9 on a scale of 1 to 10 during baseline.

  • Primary Endpoint Data: Across all participants, patients on 250 mg of ZYN002 daily achieved a 2.64 mean reduction from baseline in average worst knee pain scores at week 12; patients on 500 mg of ZYN002 daily achieved a 2.83 mean reduction from baseline in average worst knee pain scores at week 12; and patients on placebo achieved a 2.37 mean reduction from baseline in average worst knee pain scores at week 12. These results were not statistically significant.
  • Secondary Endpoint Data: Statistically significant results were achieved for a number of key secondary endpoints, including the composite responder analysis for 250 mg of ZYN002 daily (p=0.016), and the responder rate based on ≥30% reduction in worst pain severity at week 8 for 250 mg of ZYN002 daily (p=0.037). A trend toward statistical significance was observed in other secondary endpoints.
  • Post Hoc Analysis (Gender): Men on 250 mg of ZYN002 daily achieved a 1.65 mean reduction from baseline in average worst knee pain scores at week 4 compared to a 1.19 mean reduction from baseline in men on placebo (p=0.156); a 2.30 mean reduction from baseline in average worst knee pain scores at week 8 compared to a 1.56 mean reduction from baseline in men on placebo (p=0.066); and a 2.68 mean reduction from baseline in average worst knee pain scores at week 12 compared to a 1.70  mean reduction from baseline in men on placebo (p=0.049). Females had a higher placebo rate and did not achieve significance in the endpoint.
  • Post Hoc Analysis (Pain Severity): In an evaluation of patients with a baseline pain score of ≥7, there were 101 patients on ZYN002 and 48 patients in the placebo arm at baseline. Patients on ZYN002 achieved a 2.17 mean reduction from baseline in average worst knee pain scores at week 4 compared to a 1.6 mean reduction from baseline in patients on placebo (p=0.029); a 3.02 mean reduction from baseline in average worst knee pain scores at week 8 compared to a 2.22 mean reduction from baseline in patients on placebo (p=0.054); and a 3.29 mean reduction from baseline in average worst knee pain scores at week 12 compared to a 2.52 mean reduction from baseline in patients on placebo (p=0.086).
  • Safety Data: ZYN002 was shown to be very well tolerated and the safety profile was consistent with previously released data from clinical trials. Of the patients in the safety database, 50% (n=106) of the patients on ZYN002 had at least one treatment emergent adverse event, compared to 42% (n=45) of patients on placebo. There were only two treatment emergent/treatment related adverse events that exceeded 3% of the patients on ZYN002 and were greater than placebo: application site dryness (3.8%, n=8; placebo 0.9%, n=1) and headache (3.3%, n=7; placebo 1.9%, n=2). There was one (0.5%) treatment related serious adverse event on ZYN002 and three (2.8%) treatment related serious adverse events reported on placebo. Discontinuation from the study was 22.5% (n=48) for patients on ZYN002 and 33.6% (n=36) for patients on placebo. There were twelve (5.6%) patients that discontinued due to adverse events on ZYN002 and 8 (7.5%) that discontinued due to adverse events on placebo.
  • Pharmacokinetic Data: ZYN002 500 mg and 250 mg daily dose median plasma concentrations were dose proportional, with the 500 mg dose levels being approximately two times the plasma concentration of the 250 mg dose.

Additional ongoing studies of ZYN002

Zynerba is also currently evaluating the utility of ZYN002 in its exploratory Phase 2 FAB-C (Treatment of Fragile X Syndrome Anxiety and Behavioral Challenges with CBD) study in children with Fragile X syndrome (FXS). Top line data from this study are expected by the end of September 2017. In addition, epilepsy patients with focal seizures continue to be dosed in the 52-week STAR 2 (Synthetic Transdermal Cannabidiol for the Treatment of Epilepsy) open label extension trial.

Conference call information

Zynerba management will host a live conference call and webcast today at 8:30 am Eastern Time to discuss the results of this clinical trial. The call can be accessed by dialing (866) 573-0180 (U.S. and Canada) or (430) 775-1345 (international) and referencing conference ID 70071749. To access the live webcast or the replay, visit the investor page of the Company’s website at http://ir.zynerba.com/. The webcast will be recorded and available on the Company’s website for 30 days.

About Osteoarthritis

Osteoarthritis is a degenerative joint disease that leads to wear and tear of the joints and affects the cartilage, joint lining, ligaments and bone. It is the most common form of joint disease and tends to occur most often in the hand joints, spine, hips, knees and great toes. It is characterized by the breakdown of the joint cartilage, bony changes in the joints and deterioration of the tendons and ligaments leading to pain and inflammation of the joint lining. Approximately 31 million patients in the US suffer from osteoarthritis.

About Our Technology

Cannabinoids are a class of chemical compounds found in the Cannabis plant. The two primary cannabinoids contained in Cannabis are cannabidiol, or CBD, and ∆9-tetrahydrocannabinol, or THC. Clinical and preclinical data support the potential for CBD in treating epilepsy, arthritis and Fragile X Syndrome, and THC has positive effects on treating pain. Zynerba is developing therapeutic medicines that utilize innovative transdermal technologies that, if successful, may allow for sustained and controlled delivery of therapeutic levels of CBD and THC. Transdermal delivery of cannabinoids may have benefits over oral dosing because it allows the drug to be absorbed through the skin directly into the bloodstream. This avoids first-pass liver metabolism, potentially enabling lower dosage levels of active pharmaceutical ingredients with a higher bioavailability and improved safety profile. Transdermal delivery also avoids the gastrointestinal tract, lessening the opportunity for GI related adverse events and the potential degradation of CBD by gastric acid into THC, which may be associated with unwanted psychoactive effects. Using an established chemical pharmaceutical process for manufacturing, Zynerba replicates the CBD and THC found in the Cannabis plant. We believe that this will allow us to meet stringent global regulatory agencies’ standards while ensuring that we can efficiently supply the amount of product required to meet the demand of the large markets that we are targeting.

About ZYN002

Zynerba’s ZYN002 CBD gel is the first and only pharmaceutically-produced CBD formulated as a patent-protected permeation-enhanced gel and is being studied in adult epilepsy patients with focal seizures, in osteoarthritis and in children with Fragile X Syndrome. ZYN002 is a clear, permeation-enhanced gel that is designed to provide controlled drug delivery transdermally with once- or twice-daily dosing.

About Zynerba Pharmaceuticals, Inc.

Zynerba Pharmaceuticals (NASDAQ:ZYNE) is dedicated to improving the lives of people with severe health conditions where there is a high unmet medical need by developing and commercializing pharmaceutically-produced transdermal cannabinoid medicines designed to meet the rigorous efficacy and safety standards established by global regulatory agencies. Through the discovery and development of these life-changing medicines, Zynerba seeks to improve the lives of patients battling severe, chronic health conditions including epilepsy, Fragile X syndrome, osteoarthritis, fibromyalgia and peripheral neuropathic pain. Learn more at www.zynerba.com and follow the Company 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. For example, there can be no guarantee that the Company will obtain approval for ZYN002 or ZYN001 from the U.S. Food and Drug Administration(FDA) or foreign regulatory authorities; even if ZYN002 or ZYN001 are approved, the Company may not be able to obtain the label claims that it is seeking from the FDA. In addition, the Company’s cash and cash equivalents may not be sufficient to support its operating plan for as long as anticipated. 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 success, cost and timing of the Company’s product development activities, studies and clinical trials; the success of competing products that are or become available; 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; and the Company’s expectations regarding its ability to obtain and adequately maintain sufficient intellectual property protection for its product candidates. 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 Contacts
Jim Fickenscher, CFO and VP Corporate Development
484.581.7483
fickenscherj@zynerba.com

Will Roberts, VP Investor Relations and Corporate Communications
484.581.7489
robertsw@zynerba.com

Media Contact
Theresa Dolge
Tonic Life Communications
Office: 215-928-2748
Theresa.Dolge@toniclc.com

Zynerba Pharmaceuticals Announces Top-Line Results from Phase 2 STAR 1 Trial of ZYN002 in Adult Epilepsy Patients with Focal Seizures

Company to host conference call and webcast today, August 7 at 8:30am ET

Devon, PA, August 7, 2017 – Zynerba Pharmaceuticals, Inc. (NASDAQ:ZYNE), a clinical-stage specialty pharmaceutical company dedicated to developing and commercializing innovative transdermal pharmaceutically-produced cannabinoid treatments, today announced top-line results from its double-blind placebo controlled Phase 2 STAR 1 (Synthetic Transdermal Cannabidiol for the Treatment of Epilepsy) clinical trial evaluating ZYN002 (cannabidiol [CBD] gel) in adult epilepsy patients with focal seizures. ZYN002 did not demonstrate a statistically significant reduction of focal seizures during the treatment period compared to the baseline period for either the high or low dose cohorts compared to placebo.

“We are very disappointed that the STAR 1 trial did not meet its primary endpoint in this patient population,” said Armando Anido, Chairman and Chief Executive Officer of Zynerba. “We are continuing to evaluate this study and the ongoing STAR 2 open label study to determine next steps with ZYN002 in adult epilepsy patients with focal seizures. I’d like to thank the patients, coordinators and investigators, as well as the development team at Zynerba, for their time and energies in conducting this very important trial.”

Anido continued, “Importantly, today’s results demonstrated ZYN002 to have a very favorable safety and tolerability profile, which is an encouraging fact as we look to develop ZYN002 as a treatment for a wide range of indications. We are excited that we will present top-line data from our ZYN002 STOP trial in osteoarthritis soon, followed by top-line data from our FAB-C study in Fragile X syndrome by the end of September.”

In the double-blind, multi-center STAR 1 trial, 188 patients were randomized to receive (i)195 mg of ZYN002 4.2% CBD gel every 12 hours, (ii) 97.5 mg of ZYN002 4.2% CBD gel every 12 hours or (iii) placebo gel every 12 hours for 12 weeks. Patients aged 18 to 71 years old with confirmed refractory epilepsy with focal seizures with or without secondary generalization were enrolled in this study. Enrolled patients had a median monthly seizure frequency of 10.6, and were on an average of 2.5 anti-epileptic drugs (AEDs). The primary endpoint assessed the median percentage change in seizure frequency over the 12-week treatment period compared to the 8-week baseline period. Secondary endpoints included proportion of patients with ≥50% reduction from baseline in seizure frequency, percent change from baseline in seizure frequency, change from baseline in seizure frequency, seizure-free days, and 100% seizure free. Safety and tolerability were also evaluated. The study was conducted at 14 sites in Australia and New Zealand.  The efficacy analysis included 186 patients.

  • Primary Endpoint Data: Patients on the low dose of ZYN002 (n=63) achieved an 18.4% median reduction in focal seizures during the treatment period compared to baseline; patients on the high dose of ZYN002 (n=62) achieved a 14.0% median reduction in focal seizures during the treatment period compared to baseline; and patients on placebo (n=63) achieved an 8.7% median reduction in focal seizures during the treatment period compared to baseline.
  • Secondary Endpoint Data: None of the secondary endpoints showed statistically significant differences between ZYN002 and placebo.
  • Safety Data: ZYN002 was shown to be very well tolerated and the safety profile was consistent with previously released data from the Phase 1 trials. Of the 188 patients in the safety database, 50% of the patients on ZYN002 (n=63) had at least one treatment emergent adverse event, compared to 41% (n=26) of patients on placebo. Two treatment emergent adverse events occurred in greater than 5% of the patients on ZYN002: fatigue (5.6%, placebo, 1.6%) and headache (5.6%, placebo, 3.2%). There were no treatment related serious adverse events reported. The discontinuation rate in the trial for ZYN002 was 10.4% compared to 1.6% in placebo.
  • Pharmacokinetic Data: ZYN002 high and low dose median plasma concentrations were dose proportional, with the high dose levels being approximately two times the concentration of the low dose. Despite the dose proportionality, there was no correlation between plasma levels and efficacy.

Additional studies of ZYN002

Zynerba is evaluating the utility of ZYN002 in other indications. Enrollment is complete in its Phase 2 STOP (Synthetic Transdermal Cannabidiol for Treatment of Knee Pain due to Osteoarthritis) study in patients with osteoarthritis, and in its exploratory Phase 2 FAB-C (Treatment of Fragile X Syndrome Anxiety and Behavioral Challenges with CBD) study in children with Fragile X syndrome (FXS). Delivery of top line data from these studies is on track for August and by the end of September 2017, respectively.

Conference Call Information

Zynerba management will host a live conference call and webcast today at 8:30 am Eastern Time to discuss the results of this clinical trial. The call can be accessed by dialing (866) 573-0180 (U.S. and Canada) or (430) 775-1345 (international) and referencing conference ID 64535355. To access the live webcast or the replay, visit the investor page of the Company’s website at http://ir.zynerba.com/. The webcast will be recorded and available on the Company’s website for 30 days.

About Our Technology

Cannabinoids are a class of chemical compounds found in the Cannabis plant. The two primary cannabinoids contained in Cannabis are cannabidiol, or CBD, and ∆9-tetrahydrocannabinol, or THC. Clinical and preclinical data support the potential for CBD in treating epilepsy, arthritis and Fragile X Syndrome, and THC has positive effects on treating pain. Zynerba is developing therapeutic medicines that utilize innovative transdermal technologies that, if successful, may allow for sustained and controlled delivery of therapeutic levels of CBD and THC. Transdermal delivery of cannabinoids may have benefits over oral dosing because it allows the drug to be absorbed through the skin directly into the bloodstream. This avoids first-pass liver metabolism, potentially enabling lower dosage levels of active pharmaceutical ingredients with a higher bioavailability and improved safety profile. Transdermal delivery also avoids the gastrointestinal tract, lessening the opportunity for GI related adverse events and the potential degradation of CBD by gastric acid into THC, which may be associated with unwanted psychoactive effects. Using an established chemical pharmaceutical process for manufacturing, Zynerba replicates the CBD and THC found in the Cannabis plant. We believe that this will allow us to meet stringent global regulatory agencies’ standards while ensuring that we can efficiently supply the amount of product required to meet the demand of the large markets that we are targeting.

About ZYN002

Zynerba’s ZYN002 CBD gel is the first and only pharmaceutically-produced CBD formulated as a patent-protected permeation-enhanced gel and is being studied in adult epilepsy patients with focal seizures, in osteoarthritis and in children with Fragile X Syndrome. ZYN002 is a clear, permeation-enhanced gel that is designed to provide controlled drug delivery transdermally with once- or twice-daily dosing.

About Zynerba Pharmaceuticals, Inc.

Zynerba Pharmaceuticals (NASDAQ: ZYNE) is dedicated to improving the lives of people with severe health conditions where there is a high unmet medical need by developing and commercializing pharmaceutically-produced transdermal cannabinoid medicines designed to meet the rigorous efficacy and safety standards established by global regulatory agencies. Through the discovery and development of these life-changing medicines, Zynerba seeks to improve the lives of patients battling severe, chronic health conditions including epilepsy, Fragile X syndrome, osteoarthritis, fibromyalgia and peripheral neuropathic pain. Learn more at www.zynerba.com and follow the Company 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. For example, there can be no guarantee that the Company will obtain approval for ZYN002 or ZYN001 from the U.S. Food and Drug Administration (FDA) or foreign regulatory authorities; even if ZYN002 or ZYN001 are approved, the Company may not be able to obtain the label claims that it is seeking from the FDA 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 success, cost and timing of the Company’s product development activities, studies and clinical trials; the success of competing products that are or become available; 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; and the Company’s expectations regarding its ability to obtain and adequately maintain sufficient intellectual property protection for its product candidates. 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 Contacts
Jim Fickenscher, CFO and VP Corporate Development
484.581.7483
fickenscherj@zynerba.com

Will Roberts, VP Investor Relations and Corporate Communications
484.581.7489
robertsw@zynerba.com

Media Contact
Theresa Dolge
Tonic Life Communications
Office: 215-928-2748
Theresa.Dolge@toniclc.com

 

Zynerba Pharmaceuticals Reports Second Quarter 2017 Financial Results and Operational Highlights

Top-line Phase 2 results for STAR 1 trial in epilepsy and STOP trial in osteoarthritis remain on track for reporting in August 2017

Devon, PA, August 1, 2017 – Zynerba Pharmaceuticals, Inc. (NASDAQ:ZYNE), a clinical-stage specialty pharmaceutical company dedicated to developing and commercializing innovative transdermal synthetic cannabinoid treatments, today reported financial results for the second quarter ended June 30, 2017 and provided an overview of recent operational highlights.

“We expect to announce top-line results from the STAR 1 trial soon, followed by top-line data from the STOP trial later this month; and we remain on track to report top-line results from the FAB-C Fragile X study in September,” said Armando Anido, Chairman and Chief Executive Officer. “We also met a significant milestone during the quarter in initiating the Phase 1 program for ZYN001, a pro-drug of THC delivered via patch, and expect to initiate our Phase 2 program by the end of this year. With two clinical stage assets, Zynerba is well-positioned to address a number of serious unmet medical needs.”

Second Quarter 2017 and Recent Highlights

Completed Dosing in Phase 2 STAR 1 Clinical Trial for ZYN002 Cannabidiol (CBD) Gel in Adult Epilepsy Patients; Top Line Data Expected Soon

A total of 188 patients were randomized in the Phase 2 STAR 1 double-blind, placebo-controlled clinical trial in adult patients with refractory epilepsy, exceeding the 180-patient enrollment target. Following randomization, patients were dosed with either 195 mg or 390 mg of CBD in ZYN002 4.2% gel or placebo daily for 12 weeks. The primary endpoint of the trial is the median reduction in seizure frequency per 28-day period compared to baseline.

Dosing Continues in Phase 2 STAR 2 Open-Label Extension Clinical Trial for ZYN002 CBD Gel in Adult Epilepsy Patients

Ninety-eight percent of the patients who completed the STAR 1 trial elected to enroll into the STAR 2 trial, designed to evaluate long-term safety and tolerability of ZYN002 CBD gel across a range of doses. In the open-label extension study, patients receive a high or low-dose of ZYN002 (390 mg or 195 mg of CBD in ZYN002 4.2% gel daily, respectively) for up to 52 weeks.

Completed Dosing of Phase 2 STOP Clinical Trial for ZYN002 CBD Gel in Adult Osteoarthritis Patients; Top Line Data Expected this Month

Dosing is complete in the randomized, double-blind, placebo-controlled Phase 2 STOP trial in osteoarthritis of the knee. We exceeded the initial target enrollment of 300 patients with 320 patients randomized into one of three dosing groups. Patients received either 250 mg or 500 mg of CBD in ZYN002 4.2% gel or placebo daily for 12 weeks. The primary endpoint of the trial is the change from baseline in the weekly mean of the 24-hour average worst pain score at week 12.

Completed Enrollment in FAB-C Exploratory Phase 2 Clinical Trial of ZYN002 CBD Gel in Pediatric Fragile X Syndrome Patients; Top Line Data Expected in September 2017

Enrollment is complete and dosing is ongoing in the Phase 2 exploratory FAB-C clinical trial designed to evaluate the safety and efficacy of ZYN002 CBD gel administered over a 12-week period in pediatric patients with Fragile X syndrome (FXS). We exceeded the initial target enrollment of 16 patients with 20 patients enrolled. The study is evaluating 50 mg of CBD in ZYN002 4.2% gel once daily, which may be titrated up to 125 mg two times per day during the six-week titration period. Between weeks six and twelve, patients receive a maintenance dose of 50 mg, 100 mg or 250 mg daily of CBD in ZYN002 4.2% gel. The primary objective is to assess intra-patient changes in anxiety, depression and mood (as measured by the ADAMS scale) versus baseline. The U.S. Food and Drug Association has granted orphan-drug designation to ZYN002 CBD gel for the treatment of Fragile X syndrome.

Initiated Phase 1 Program for ZYN001 Pro-drug of Tetrahydrocannabinol (THC) Delivered via Transdermal Patch

The company has initiated a Phase 1 program to assess ZYN001, a patent-protected, pro-drug of THC delivered via a patch. This first in man study is a randomized, double-blind, placebo-controlled Phase 1 trial. First, the safety, tolerability and pharmacokinetic profile of a single dose of ZYN001 versus placebo will be evaluated. Several formulations and patch wear times ranging from 24 hours to 7 days will be assessed in up to 48 healthy subjects. Based on results from the single dose portion of this trial, two formulations will be evaluated in multiple patch applications for 14 days in up to 32 healthy subjects who will be randomized 3:1 to ZYN001 or placebo. Results from this study will inform the planned Phase 2 program for ZYN001 in fibromyalgia and neuropathic pain, expected to initiate in the fourth quarter of 2017.

Second Quarter 2017 Financial Results

As of June 30, 2017, cash and cash equivalents were $70.2 million, compared to $77.5 million as of March 31, 2017. Research and development expenses for the second quarter of 2017 were $5.7 million, including stock-based compensation of $0.6 million. General and administrative expenses for the second quarter of 2017 were $2.6 million, including stock-based compensation expense of $0.8 million. Net loss for the second quarter of 2017 was $8.3 millionwith basic and diluted net loss per share of $0.64.

Financial Outlook

The Company believes that the current cash and cash equivalent position of $70.2 million is sufficient to develop five Phase 3-ready programs and, assuming support from the FDA to move forward, initiate at least one Phase 3 program and fund operations and capital requirements into 2019.

About Zynerba Pharmaceuticals, Inc. 
Zynerba Pharmaceuticals (NASDAQ: ZYNE) is a clinical-stage specialty pharmaceutical company focused on developing and commercializing proprietary next-generation synthetic cannabinoid therapeutics formulated for transdermal delivery. Zynerba is developing therapeutic candidates based on proprietary transdermal technologies that, if successfully developed, may allow sustained, consistent and controlled delivery of therapeutic levels of two cannabinoids: cannabidiol (CBD), a non-psychoactive cannabinoid, and tetrahydrocannabinol (THC). Transdermal delivery has the potential to reduce adverse effects associated with oral dosing. ZYN002, the Company’s CBD gel, is the first and only synthetic CBD formulated as a patent-protected permeation-enhanced gel. In March 2017, the Company completed enrollment in the Phase 2 STAR 1 (Synthetic Transdermal Cannabidiol for the Treatment of Epilepsy) clinical trial of ZYN002 CBD gel in refractory epilepsy patients with focal seizures, the most common form of epilepsy in adults. Also in March 2017, the Phase 2 STOP (Synthetic Transdermal Cannabidiol for the Treatment of Knee Pain due to Osteoarthritis) clinical trial in patients with knee pain due to osteoarthritis was fully enrolled. In June 2017, the Company completed enrollment in its exploratory Phase 2 FAB-C (Treatment of Fragile X Syndrome Anxiety and Behavioral Challenges with CBD) clinical trial in children with Fragile X syndrome. Zynerba is also developing ZYN001, which utilizes a synthetically manufactured pro-drug of THC. A Phase 1 clinical program for ZYN001 was initiated in the second quarter of 2017. Learn more at www.zynerba.com and follow the Company 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. For example, there can be no guarantee that the Company will obtain approval for ZYN002 or ZYN001 from the U.S. Food and Drug Administration(FDA) or foreign regulatory authorities; even if ZYN002 or ZYN001 are approved, the Company may not be able to obtain the label claims that it is seeking from the FDA. In addition, the Company’s cash and cash equivalents may not be sufficient to support its operating plan for as long as anticipated. 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 success, cost and timing of the Company’s product development activities, studies and clinical trials; the success of competing products that are or become available; 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; and the Company’s expectations regarding its ability to obtain and adequately maintain sufficient intellectual property protection for its product candidates. 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 Six months ended
June 30, 2017   June 30, 2016 June 30, 2017   June 30, 2016
Revenue $   — $   — $   — $   7,250
Operating expenses:
Research and development   5,732,797   4,807,177   11,224,252   7,376,167
General and administrative   2,632,857   1,476,357   4,844,650   3,156,487
Total operating expenses   8,365,654   6,283,534   16,068,902   10,532,654
Loss from operations   (8,365,654 )   (6,283,534 )   (16,068,902 )   (10,525,404 )
Other income (expense):
Interest income   124,535   18,118   201,420   30,496
Foreign exchange (loss) gain   (82,360 )   (20,250 )   284,982   (43,398 )
Total other income (expense)   42,175   (2,132 )   486,402   (12,902 )
Loss before income taxes   (8,323,479 )   (6,285,666 )   (15,582,500 )   (10,538,306 )
Income tax expense   —   (56,277 )   —   (27,543 )
Net loss $   (8,323,479 ) $   (6,229,389 ) $   (15,582,500 ) $   (10,510,763 )
Net loss per share – basic and diluted $   (0.64 ) $   (0.70 ) $   (1.24 ) $   (1.19 )
Basic and diluted weighted average shares outstanding   13,052,294   8,860,592   12,562,594   8,842,271
Non-cash stock-based compensation included above:
Research and development $   588,713 $   374,919 $   1,130,558 $   623,651
General and administrative   766,661   437,820   1,413,515   952,887
Total $   1,355,374 $   812,739 $   2,544,073 $   1,576,538

 

ZYNERBA PHARMACEUTICALS, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
June 30, 2017   December 31, 2016
Assets
Current assets:
Cash and cash equivalents $   70,179,199 $   30,965,791
Incentive and tax receivables   3,971,828   3,613,943
Prepaid expenses and other current assets   2,307,466   1,830,958
Total current assets   76,458,493   36,410,692
Property and equipment, net   177,994   143,382
Incentive and tax receivables   2,456,286   —
Other assets   200   200
Total assets $   79,092,973 $   36,554,274
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable $   2,024,991 $   1,848,084
Accrued expenses   5,004,856   4,284,907
Deferred grant revenue   833,975   833,975
Total current liabilities   7,863,822   6,966,966
Stockholders’ equity:
Common stock   13,257   9,995
Additional paid-in capital   132,766,956   75,545,875
Accumulated deficit   (61,551,062 )   (45,968,562 )
Total stockholders’ equity   71,229,151   29,587,308
Total liabilities and stockholders’ equity $   79,092,973 $   36,554,274

Investor Contacts
Jim Fickenscher, CFO and VP Corporate Development
Zynerba Pharmaceuticals
484.581.7483
fickenscherj@zynerba.com

Will Roberts, VP Investor Relations and Corporate Communications
Zynerba Pharmaceuticals
484.581.7489
robertsw@zynerba.com