Following its Scorpion Capital controversy in March, Harmony Biosciences is seeking to deepen its pipeline with an acquisition of Zynerba Pharmaceuticals’ cannabinoid therapies for neuropsychiatric disorders.
Pictured: Businessmen shaking hands after closing a deal/iStock, AmnajKhetsamtip
Harmony Biosciences on Monday moved to acquire Zynerba Pharmaceuticals in a bid to deepen and diversify its portfolio, particularly in rare neuropsychiatric disorders.
Under the acquisition agreement, Harmony will buy all outstanding shares of Zynerba for an aggregate value of $60 million to be paid in cash. The deal also includes a non-tradeable contingent value right worth up to $140 million in additional payments, which will be paid upon meeting certain milestones, including a successful Phase III trial and an FDA approval.
Harmony and Zynerba expect to close the deal, which has a total consideration of $200 million, by the fourth quarter of 2023, subject to specific closing conditions.
Monday’s acquisition agreement is in line with Harmony’s push “to build a diversified portfolio of innovative assets to address unmet medical needs and drive our long-term growth,” CEO Jeffrey Dayno said in a statement.
In particular, the buyout gives Harmony access to Zynerba’s lead asset Zygel, which could be a “potentially transformative treatment for the symptoms of Fragile X syndrome and other rare neuropsychiatric diseases,” Dayno said.
Zygel is the first pharmaceutically manufactured synthetic cannabidiol that is formulated as a permeation-enhanced gel that can be used for transdermal delivery into the circulatory system. The cannabinoid therapy is non-euphoric and does not contain tetrahydrocannabinol (THC), giving it the potential to be a non-scheduled product if approved.
Zynerba is running the Phase III RECONNECT trial to assess the potential of Zygel in Fragile X syndrome, a rare genetic disorder afflicting around 80,000 patients in the U.S. The condition manifests as intellectual and behavioral disabilities and is currently without any FDA approved treatments.
Cannabidiol, Zygel’s active ingredient, has been granted Orphan Drug designation in this indication and Zygel itself has won the regulator’s Fast Track designation for the treatment of behavioral symptoms in Fragile X syndrome. Zygel has also shown positive signs of efficacy in a Phase II trial of 22q11.2 deletion syndrome, for which there are also no authorized treatments.
After the deal is closed, Zygel will join pitolisant—Harmony’s most prolific asset—being studied in idiopathic hypersomnia, Prader-Willi syndrome and myotonic dystrophy. In August 2019, the FDA greenlit pitolisant for the treatment of excessive daytime sleepiness in adults with narcolepsy, for which the drug is being sold under the brand name Wakix.
In March 2023, however, the drug became embroiled in controversy when short-seller Scorpion Capital announced it was filing a citizen petition with the FDA, seeking to have the drug’s approval withdrawn due to what it contends is “alarming toxicity.”
Tristan Manalac is an independent science writer based in Metro Manila, Philippines. He can be reached at tristan@tristanmanalac.com or tristan.manalac@biospace.com.
