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Sell-Side Analysts See Upside Potential In Zynerba

Alex Oleinic

Zynerba Pharmaceuticals Inc (NASDAQ: ZYNE) have dropped by about 12 percent since the company reported third-quarter results Nov. 8.

Analysts at HC Wainwright and Canaccord Genuity consider the sell-off an overreaction and issued positive updates on the company this week. 

The Analysts

HC Wainwright's Oren Livnat reiterated a Buy rating on Zynerba with a $23 price target. 

Canaccord Genuity's Arlinda Lee maintained a Buy rating with a $15 price target. 

The Thesis

Zynerba's ZYN002 is a CBD-based drug for children and adolescents with Fragile X syndrome, a genetic condition that causes intellectual disability, behavioral and learning challenges and is thought to be a single-gene cause of autism spectrum disorder.

In its last earnings report, Zynerba reiterated all "expected pipeline timelines," said HC Wainwright's Livnat.

The company is showing financial discipline and is well-capitalized to survive through 2019, the analyst said. 

The sell-side firm's model focuses solely on the ZYN002 candidate, and Livnat estimates an enterprise value of $34 million.

HC Wainwright's price target of $23 per share, which implies an upside of around 300 percent, includes a probability of success for ZYN002 of 35 percent of achieving $700 million in peak U.S. sales with an orphan indication, the analyst said. 

Canaccord's Lee said Zynerba's earnings report reflects a lower-than-expected rate of cash burn. Zynerba has enough cash to last through through the important data for ZYN002's ongoing Phase 3 trials next year, the analyst said. 

The Price Action

Zynerba Pharmaceuticals shares were down 3.36 percent at $5.47 at the time of publication Tuesday. 

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Latest Ratings for ZYNE

Date Firm Action From To
Sep 2018 Cantor Fitzgerald Initiates Coverage On Overweight
Aug 2018 Canaccord Genuity Maintains Buy Buy
Feb 2018 H.C. Wainwright Assumes Buy

View More Analyst Ratings for ZYNE
View the Latest Analyst Ratings

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