Once again, it looks as though we are in for a pretty busy close to the week in the biotechnology space. The big movers this week have come on the back of a variety of inputs, with plenty of data readouts, trial initiations and FDA actions affected sentiment. As we head into the start of the session on Friday in the US, here is a look at two of the late week movers with an analysis of what is moving each and where we expect them to go next.
The two companies in our crosshairs for the session today are Zynerba Pharmaceuticals, Inc. (NASDAQ:ZYNE) and PTC Therapeutics, Inc. (NASDAQ:PTCT).
First up, then, Zynerba.
This one is data related and, specifically, relates to a phase 2 clinical trial that was set up to investigate a drug called ZYN002. Many reading might already be familiar with this asset – it has drawn quite a lot of media attention over the last year or so primarily since it is targeting a condition that quite rare, but affects children and is incredibly severe in its symptoms.
The condition is called fragile X syndrome and it is, at core, a type of neurological condition. It is associated with severe learning disability and mental incapacity and effects children mainly (purely because it is a genetic disease and so it comes on shortly after birth).
Anyway, there is no current treatment on the market for fragile X syndrome but there exists anecdotal evidence that certain formulations of cannabis can help ease progression symptoms.
With its investigative asset, ZYN002, Zynerba was trying to support this anecdotal evidence with quantitative data.
And, as per the latest release, it looks as though the company has been able to do exactly that. In the PR announcing the results, the company noted that the trial met its primary endpoint, achieving a 46% improvement in the total score of Anxiety, Depression, and Mood Scale (ADAMS) at week twelve compared to baseline.
There is a degree of uncertainty surrounding just how accurate this data is with regards to using it to draw a conclusion that the drug is safe and effective in these patients. Some concern surrounding a legacy comparison to placebo data question the impact reported. However, markets seem to be more interested in the topline than what underpins it and the company is benefiting from this focus as a result.
Zynerba closed the session on Thursday for a 52.5% premium to the level at which it opened the day and premarket activity on Friday has added a couple more percentage points to this appreciation.
Going forward, chances are the company will need to initiate a phase 3 in order to reinforce this data with an expanded population. There may be a degree of uncertainty heading into this pivotal trial, especially given the above-noted concerns, but there is a good chance we will see some speculative loading as the trial nears nonetheless.
Moving on, PTC.
This stock is being a bit of a controversial one of the past few weeks and it is one that we have covered before. The company forced and application through to the FDA early on this year but expectations were that it wouldn’t pick up a regulatory green light in its current format. Some briefing documents released this week supported that statement, with the suggestion that the data submitted as part of the application wasn’t conclusive enough to warrant commercialization.
Against the backdrop of all this, an advisory panel meeting took place on Thursday at which participants discussed, and subsequently voted on, the approved ability of the drug in question – ataluren (Translarna) for the treatment of nonsense mutation dystrophinopathy.
And as it turned out, the voting sort of supported expectations. After 11 votes, 10 voted for the conclusion that ” although it is possible that ataluren may be effective, the data are inconclusive, and more work would be needed to establish whether ataluren is effective” while one voted for the conclusion that ” the data are sufficient to conclude that ataluren is effective.”
The company is trading up around 10% on the news purely because no members voted against approval completely and this was kind of an improvement on what was expected. Next is PDUFA and, beyond that, likely none expanded development program to address concerns for the FDA.