Zynerba's stock on a high as cannabis-based drug succeeds in trial

(Reuters) - Zynerba Pharmaceuticals Inc said on Thursday its cannabis-derived gel to treat genetic disorder Fragile X syndrome succeeded in significantly reducing symptoms such as anxiety in a mid-stage study.

The U.S. drug developer’s shares - down 60 percent since the beginning of the year - were up 57 percent at $9.72 in morning trading.

Zynerba’s drug achieved the study’s main goal by improving scores on a scale assessing anxiety, depression and other behavioral symptoms associated with Fragile X syndrome in children and adolescents, the company said.

Fragile X, an autism-spectrum disorder, affects 1 in 4,000 males and 1 in 8,000 females and has no approved treatment.

Zynerba’s drug also improved aberrant behaviors associated with the disorder, such as temper tantrums, social avoidance and hyperactivity, the company said.

Analysts were largely upbeat about the trial results, but also highlighted that the number of patients in the study was small.

Zynerba’s mid-stage trial evaluated 20 patients in an open-label study - a study in which researchers and patients know what drug is being tested, and where the drug is not compared with a placebo.

The company said it plans to test the drug, ZYN002, against a placebo, in another mid-stage trial with more patients. Zynerba expects to meet with the U.S. Food and Drug Administration in the first half of 2018 as it prepares for the study.

“Despite the fact that it is an open label trial with just 20 patients, the results are very impressive,” said Roth Capital Partners analyst Michael Higgins.

Zynerba said last month ZYN002 failed to show a statistically significant reduction in seizures in a mid-stage study of epilepsy patients, sending the company’s shares tumbling. The drug also failed a mid-stage study involving osteoarthritis patients around the same period.

The drug is derived from cannabidiols (CBD), a chemical compound found in the cannabis plant, which differs from THC, a psychoactive chemical also found in the plant.

Under U.S. federal law, marijuana is considered a dangerous substance with no medicinal value, making additional approvals for marijuana-derived treatments necessary prior to launch.

While marijuana remains illegal under federal law, more than two dozen U.S. states have legalized the plant for medical or recreational uses.

British drugmaker GW Pharmaceuticals’ Epidiolex, which is also CBD-derived, successfully treated children with epilepsy in a late-stage trial last year. The company is expected to file a U.S. marketing application later this year.

Reporting by Manas Mishra in Bengaluru; Editing by Sai Sachin Ravikumar