Ladenburg starts Zynerba Pharma at buy; PT $25.50

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Ladenburg Thalmann initiated coverage of Zynerba Pharmaceuticals (NASDAQ:ZYNE) with a “buy” rating and $25.50 price target. The stock closed at $12.07 on Jan. 26.

Zynerba is developing two clinical-stage synthetic cannabis-based transdermal products, ZYN002 (cannabidiol, CBD gel) and ZYN001 (THC pro-drug patch).

Analyst Michael Higgins writes that thus far, ZYN002 has demonstrated efficacy in Fragile X syndrome, while third party results and ZYN002’s Phase 2 results demonstrate it may have benefits in epilepsy as well.

ZYN001 Phase 1 data is expected in the first half of 2018 that will determine the ideal formulation and patch wear time for future studies. The trial also is expected to confirm the patch’s perceived pharmacokinetics and safety advantages based on more constant plasma drug levels.

Following the Phase 1 study, Zynerba is planning a Phase 2 trial in Tourette syndrome for the second half of 2018, with other rare neuropsychiatric indications potentially to follow.

“Given the societal interest in recreational and medical marijuana, we believe the potential market adoption of Zynerba’s products will outpace its clinical evidence,” Mr. Higgins added.