Harmony Biosciences Expands with $200 Million Zynerba Acquisition
Neuroscience specialist Harmony Biosciences has recently reached an agreement to acquire Zynerba, a company focused on cannabidiol (CBD) products. This acquisition will incorporate Zygel, Zynerba’s CBD gel product designed for Fragile X syndrome and other rare neuropsychiatric disorders, into Harmony’s pipeline.
The acquisition involves a cash payment of $60 million for Zynerba, along with the potential for an additional $140 million as a contingent value right (CVR). This extra amount will be realized if Zygel successfully completes its development, gains regulatory approval, and meets specific sales targets. These targets include reaching a total of $500 million in net revenues by mid-2025.
Fragile X syndrome is a neuropsychiatric disorder linked to intellectual disability and autism spectrum disorder (ASD). It results from a mutation in the FMR1 gene and currently lacks FDA-approved treatments. Around 80,000 people are affected by this disorder in the US, and approximately twice that number in Europe.
Harmony’s CEO, Jeffrey Dayno, explained the rationale behind the acquisition during a conference call. He highlighted Zygel’s potential in multiple indications, with Fragile X being the primary focus. This includes other conditions such as 22q11.2 deletion syndrome, which is characterized by developmental delays and lacks approved treatments.
Zygel will join Harmony’s existing drug, Wakix (pitolisant), which is approved for narcolepsy and cataplexy and is under development for other sleep/wake disorders. Wakix has multi-indication potential, further expanding Harmony’s portfolio.
Experts at Ladenburg analyzed the deal’s terms and expressed positivity for Zynerba shareholders and the drug’s continued development. They projected Zygel’s sales potential could exceed $1 billion if it secures approval in both the US and Europe and can be priced at around $75,000 per year per Fragile X patient. The analysts also noted the promising market size for 22q disorder, which is nearly twice that of Fragile X.
Dayno emphasized that Zygel is the first and only pharmaceutically manufactured synthetic CBD in the US. As a topical gel, it avoids the gastrointestinal side effects associated with oral CBD therapies. Additionally, its non-THC composition positions it as a potential non-scheduled drug, further enhancing its appeal.
Zynerba had previously focused on epilepsy drugs, but their attention shifted to development disorders following underwhelming results for Zygel in epilepsy. The upcoming pivotal RECONNECT trial’s data readout in the first half of the following year is crucial for Zygel’s future in treating Fragile X.
The acquisition, funded by Harmony’s existing cash reserves of approximately $430 million, is anticipated to close in the fourth quarter, subject to customary closing conditions. As of June 30th, Zynerba had around $36 million in existing cash.
