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Best Stocks for 2017: Zynerba Pharmaceuticals Inc (ZYNE) Is a Perfect Prescription

ZYNE stock has a couple of promising therapies in trials

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Editor’s note: This column is part of our Best Stocks for 2017 contest. Adam Johnson’s pick for the contest is Zynerba Pharmaceuticals Inc (NASDAQ:ZYNE).

Scientists, regulators and millions suffering from pain are trying to get their hands on cannabis — but not the kind you smoke, eat or grow in an alley. This is the cleaner side of marijuana. And one small biotech company — Zynerba Pharmaceuticals Inc (NASDAQ:ZYNE) — has figured out how to synthetically manufacture the plant’s two defining compounds, cannabinoid (CBD) and tetrahydrocannabinol (THC), then deliver to them to patients as
a wearable patch or topical gel.

10BEST2017_final_728x400v2Preliminary results are impressive: No nausea, no high, no pain … and for investors, no correlation to the S&P 500. The breakthroughs are so promising, five separate Phase II trials are either planned or underway. If recent results from a competitor are any indication, FDA applications could follow.

From backyard contraband to laboratory legitimacy, pot has grown up.

Zynerba has been getting a lot of attention recently, more than most companies valued at just $139 million. Its two patented compounds are synthetic versions of the pain-suppressing, anti-inflammatory chemicals which appear naturally in marijuana, and unlike competitors, Zynerba has figured out how to transmit them through the skin, avoiding many of the side effects associated with oral ingestion by regulating chemical flow more evenly.

Its five independent Phase-II trials are fully funded through 2017, and Zynerba owns its two proprietary compounds outright, with patent protection for 14 years.

The first, ZYN002, is a CBD transdermal gel which appears to lower the incidents of seizures among patients suffering from epilepsy, as reflected in an initial Phase I trial focused on Zynerba’s unique transmission mechanism. A Phase II trial is now underway involving 180 adults, with top-line data expected in the first half of 2017.

An estimated 2.2 million Americans suffer from epilepsy, and another 3.1 million in Europe and Japan.

ZYN002 has two additional applications: Osteoarthritis and Fragile X Syndrome (an autism-like genetic condition affecting 71,000 people). Osteoarthritis affects 31 million Americans, so the potential commercial opportunities here are significant. As with the lead Phase II trial for epilepsy, results for the Phase II trials involving Osteoarthritis and Fragile X Syndrome will be available 1H 2017.

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