What happened

Shares of Zynerba Pharmaceuticals (NASDAQ:ZYNE) were zooming 10.7% higher as of 3:13 p.m. EDT on Monday. The biotech announced earlier in the day that the Food and Drug Administration granted Fast Track Designation to cannibidiol (CBD) gel Zygel for the treatment of behavioral symptoms associated with Fragile X syndrome (FXS). 

So what

Zynerba has enjoyed its fair share of good news lately. The biotech's share price also jumped last week after Roth Capital initiated coverage on the stock with a buy rating and a price target more than triple the stock's price at the time. But today's news was more meaningful in several ways than one analyst's perspective.

Blocks that spell FDA

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Fast Track Designation for Zygel enables Zynerba to work closely with the FDA in multiple areas, including establishing clinical study design and identifying data needed for a regulatory filing. It could also potentially improve the chances for obtaining priority review down the road, which would reduce the FDA's review time required to make an approval decision from 10 months to six months.

Receiving Fast Track Designation isn't a guarantee that Zygel will win FDA approval. But the status should help reduce the likelihood that Zynerba's regulatory filing for the drug is incomplete, assuming Zygel is successful in a pivotal clinical study currently underway.

Now what

The big hurdle for Zynerba now is to complete its pivotal Connect-FX clinical trial evaluating Zygel in treating FXS. Enrollment is still in progress for this study. The company expects to report data in the second half of 2019. If these results are positive, Zynerba could file for FDA approval of Zygel in the first half of 2020.

Meanwhile, a couple of other phase 2 studies of Zygel are also underway. Zynerba anticipates that top-line data from a study evaluating Zygel in treating children and adolescents with developmental and epileptic encephalopathy will be available in the third quarter of this year. The company also began a phase 2 study evaluating Zygel in autism spectrum disorder, with initial results expected in the first half of next year.