Why Zynerba Pharmaceuticals Stock Is Skyrocketing Today

Keith Speights, The Motley Fool - finance.yahoo.com Posted 5 years ago
image

What happened

Shares of Zynerba Pharmaceuticals (NASDAQ: ZYNE) were shooting 18.9% higher as of 10:57 a.m. EDT on Tuesday. The big jump came after the biotech announced that it received a new patent for treating autism spectrum disorders using synthetic cannabidiol (CBD). 

So what

Any patent victories for biotechs focusing on the development of cannabinoid drugs are important since CBD oils are widely available to consumers. Patent protection gives drugmakers more ammunition to fend off potential rivals.

Cannabis plant with CBD chemical structure written out in white next to it
More

Image source: Getty Images.

Zynerba has already received a key U.S. patent for treating Fragile X Syndrome by administering a therapeutically effective amount of synthetic or purified CBD. This earlier patent combined with the company's latest patent strengthens the company's intellectual property rights surrounding its lead candidate, transdermal CBD gel Zygel.

Today's patent win was just the latest in a string of good news for Zynerba. Investment firm Roth Capital upgraded the biotech stock in late April because of the promise for Zygel. Less than a week later, the Food and Drug Administration (FDA) granted Fast Track Designation to Zygel for the treatment of behavioral symptoms associated with Fragile X syndrome. 

Now what

There are at least a couple of key things to watch with Zynerba in the future. The company continues to enroll patients in its phase 2 clinical study evaluating Zygel in treating children and adolescents with Autism Spectrum Disorder. Initial results from this study are expected to be announced in the first half of 2020.

Also, the FDA is in the process of establishing regulations governing the manufacturing and sale of CBD products in the U.S. Zynerba's vice president of manufacturing, Ray Mannion, was one of a handful of executives from cannabinoid-focused biotechs to speak at a public hearing conducted by the FDA recently. Zynerba would benefit from FDA regulations that limit potential competition for Zygel from CBD products. 

More From The Motley Fool

  • 10 Best Stocks to Buy Today
  • The $16,728 Social Security Bonus You Cannot Afford to Miss
  • 20 of the Top Stocks to Buy (Including the Two Every Investor Should Own)
  • What Is an ETF?
  • 5 Recession-Proof Stocks
  • How to Beat the Market

Keith Speights has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.