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What's in the Cards for Zynerba (ZYNE) This Earnings Season?

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Zacks Equity Research
·4 min read
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In the absence of an approved product, investors’ focus will be on the progress of Zynerba Pharmaceuticals, Inc.’s ZYNE lead pipeline candidate, Zygel, when the company reports second-quarter 2020 results.

The company’s earnings beat the Zacks Consensus Estimate in three of the last four quarters and missed the same once with the average surprise being 20.08%.

Shares of Zynerba have declined 39.4% so far this year compared with the industry‘s decrease of 7.1%.

In the last reported quarter, Zynerba delivered a negative earnings surprise of 8.16%.

Let’s see how things have shaped up for this announcement.

Things to Watch Out For

Zynerba is focused on developing cannabinoid therapies for rare neuropsychiatric disorders. With no marketed products and collaborations, the company does not generate any revenues.

A pivotal study — CONNECT-FX —evaluating Zygel for treating patients with Fragile X syndrome (“FXS”) aged 3 to 17 years failed to meet its primary endpoint in June.

However, the company stated that a pre-planned ad hoc analysis showed that patients treated with Zygel achieved statistical significance in the primary endpoint of improvement at 12 weeks of treatment. The analysis included most severely impacted patients in the study.

The company plans to meet with the FDA, as soon as possible, to discuss a regulatory path forward for Zygel as a treatment for FXS patients based on the results from the ad hoc analysis.

Investors are looking forward to any update on the path forward for Zygel in FXS patients on the company’s second-quarter earnings call.

Moreover, Zynerba is also conducting two open-label phase II studies evaluating Zygel for the treatment of autism spectrum disorder and 22q11.2 deletion syndrome. Top-line data is expected in the second half of 2020.

The company announced positive top-line data from the phase II study evaluating Zygel in ASD patients in May. It intends to meet with the FDA to discuss the results and clinical path forward in ASD indication in the second half of 2020. Top-line data from the phase II study evaluating the candidate in 22q patients is expected in the fourth quarter of 2020.

Ongoing clinical studies are likely to have driven operating expenses higher in the soon-to-be reported quarter. Moreover, investors are likely to have an eye on availability of funds for continuation of clinical studies on the earnings call.

Earnings Whispers

Our proven model does not conclusively predict an earnings beat for Zynerba in this reporting cycle. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that is not the case here as you will see below. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate (loss of 47 cents per share) and the Zacks Consensus Estimate (loss of 46 cents per share), is -2.92%.

Zacks Rank: Zynerba currently carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Zynerba Pharmaceuticals, Inc. Price and Consensus

Zynerba Pharmaceuticals, Inc. Price and Consensus
Zynerba Pharmaceuticals, Inc. Price and Consensus

Zynerba Pharmaceuticals, Inc. price-consensus-chart | Zynerba Pharmaceuticals, Inc. Quote

Stocks That Warrant a Look

Here are some stocks from the pharma sector that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat in their upcoming releases.

ACADIA Pharmaceuticals Inc. ACAD has an Earnings ESP of +8.12% and a Zacks Rank #3.

Alkermes plc ALKS has an Earnings ESP of +362.51% and a Zacks Rank #3.

Atara Biotherapeutics, Inc. ATRA has an Earnings ESP of +17.36% and a Zacks Rank #2.

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Zynerba Pharmaceuticals, Inc. (ZYNE) : Free Stock Analysis Report
 
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