Cannabinoid-based drug developer Zynerba Pharmaceuticals said today it will halt development of its D-glyceric acid ester-delta-9-tetrahydrocannabinol (THC) prodrug candidate ZYN001 following its failure in a clinical trial, and instead refocus its development effort and investment on its cannabidiol (CBD) permeation-enhanced gel ZYN002.

ZYN001 had been in clinical development for Tourette syndrome and preclinical development for additional undisclosed indications. Zynerba said ZYN001 missed its primary endpoint in a Phase I study designed to assess the safety and pharmacokinetics of the drug when administered as a transdermal patch to healthy adults.

By developing ZYN001 as a patch, Zynerba reasoned, it could surmount safety and efficacy challenges associated with oral THC administration, including low bioavailability, inconsistent plasma levels, significant first-pass liver metabolism, and the need for multiple doses per day.

In addition to allowing for once-daily dosing, the patch formulation could have also potentially allowed for a lower dose to achieve efficacy and better tolerability profile, according to the company. ZYN001 would have been pharmaceutically manufactured in a cGMP facility rather than extracted from the Cannabis plant.

As late as last month, Zynerba had also planned this year to launch by year’s end a Phase II study of ZYN001 in Tourette syndrome patients, according to a presentation to investors at the Jefferies 2018 Global Healthcare Conference.

“After crossing the stratum corneum, ZYN001 is hydrolyzed to THC and glyceric acid under physiological conditions. THC binds multiple cannabinoid receptors and may mediate a number of pathways, including the endocannabinoid pathway,” Zynerba described the drug’s mechanism of action in the June 7 presentation.

Blood Levels Not Achieved

During the failed trial, several formulations and patch wear times ranging from 24 hours to 14 days were assessed in the 60 adults who were randomized to ZYN001 or placebo. ZYN001 was very well tolerated with minimal skin erythema. No serious adverse events or discontinuations were reported for participants who received the THC prodrug, Zynerba said.

However, target blood levels of 5 to 15 ng/ml THC were not achieved, according to topline results of the study disclosed by Zynerba.

“As a result of these data, the Company will focus its development efforts and investments on the ZYN002 Fragile X syndrome, developmental and epileptic encephalopathy (DEE), and adult refractory epilepsy programs,” Zynerba added.

In all three indications, Zynerba is in Phase II development of ZYN002, which according to the company is the first and only pharmaceutically produced CBD formulated as a patent-protected permeation-enhanced gel for transdermal delivery through the skin and into the circulatory system. The company has said it expects to launch a single pivotal study in Fragile X “in mid-2018,” with results anticipated in 2019.

Also next year, Zynerba expects to report topline results of a Phase II trial of ZYN002 for DEE that was launched in April. The trial, BELIEVE 1 (Open Label Study to Assess the Safety and Efficacy of ZYN002 Administered as a Transdermal Gel to Children and Adolescents with Developmental and Epileptic Encephalopathy), has a primary efficacy endpoint of change in seizure frequency.

During the second half of this year, Zynerba plans to launch an approximately 300-patient Phase IIb trial of ZYN002 in adult refractory epilepsy, after Phase II results showed continued improvement in seizure control.

Zynerba said its $52.1 million in cash and cash equivalents as of March 31, 2018 “is sufficient to fund operations and capital requirements into the second half of 2019.”

Investors responded to the failure of Zynerba’s ZYN001 with a stock selloff that lowered the price of company shares 13% from Tuesday’s closing price of $9.61, to $8.35 as of 9:35 a.m.

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