Investors get high on cannabinoid news


Pent-up demand for good biopharma news has paid off for Zynerba Pharmaceuticals and Insys Therapeutics. Both saw lift under their shares yesterday as investors gained confidence in the promise of cannabinoids in neurological disease following GW Pharmaceuticals’ positive phase III data.

Zynerba’s boost, even greater than GW’s, is all the more surprising as its transdermal gel targeting epilepsy has only entered phase I dosing trials. Having just floated in 2015, it may want to consider topping up its cash pile with a secondary offering now that shares are worth more than twice what they were on Friday.

Insys shares rose 11% to $18.89 and Zynerba’s 149% to $21.03 yesterday, carried along by GW’s results for Epidiolex in the rare epilepsy Dravet syndrome (GW takes traders back to 2015, March 14, 2016). UK-based GW showed a 39% reduction in the monthly frequency of convulsive seizures during the 14-week treatment period compared with the four-week baseline, significantly greater than the 13% decrease recorded by patients taking placebo.

Investors now believe that competing candidates from Insys and Zynerba have a shot at matching GW.

Follow the leader

Among these cannabinoid specialists, GW is the leader in that it is the first to successfully develop a product to launch – Sativex is marketed primarily in Europe to treat muscle spasticity in multiple sclerosis patients. However, Insys is nearing an FDA decision by April 1 on its antiemetic Syndros, an sublingual spray formulation of AbbVie’s Marinol that is hoped will have a quicker onset of action.

In the pipeline, however, the groups are in more direct competition in developing treatments for severe epilepsy. On this, GW obviously also has the upper hand, but Insys looks like it is working hard to catch up.

The Arizona-based group has rolled over patients from trials of Cannabidiol in Dravet and Lennox Gastaut syndrome into a long-term safety and efficacy phase III study of treatment-resistant epilepsy. That 232-patient study is on schedule to read out in late 2017 or early 2018.

Zynerba, meanwhile, is going straight for severe epilepsy as a lead indication, and leaving pain-related treatments for a second candidate. ZYN002 Gel successfully completed a single rising dose trial in healthy subjects and epilepsy patients earlier this year, and a multiple rising dose study of the transdermal treatment is underway.

Pennsylvania-based Zynerba expects to initiate phase IIa trials in refractory epilepsy in the second half of 2016, as well as the rare disease fragile X syndrome. It will probably want to seek orphan drug designation in Dravet and Lennox Gastaut syndromes as its competitors have.

With biotech in the doldrums since mid-2015, investors may be on the lookout for targeted wins these days. In cannabinoids, they found a one-day story, as shares of all three are down today. Expect more events like this should biotech broadly continue to underperform.

Product Trial ID
Epidiolex Dravet syndrome NCT02091375
  Lennox Gastaut sydrome NCT02224690
Cannabidiol Severe epilepsy NCT02318602

To contact the writer of this story email Jonathan Gardner in London at or follow @ByJonGardner on Twitter

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