Zynerba Enters Equity Purchase Agreement for $20 Million

Transdermal cannabinoid therapies developer Zynerba Pharmaceuticals said it has entered into an equity purchase agreement for up to $20 million with Lincoln Park Capital Fund, a Chicago-based institutional investor.

Photo: Jim Fickenscher, chief financial officer and vice president of corporate development of Zynerba

Under the terms of the agreement, Zynerba will have the right in its sole discretion, but not the obligation, to sell to Lincoln Park up to $20 million worth of shares of its common stock over the 36-month term of the agreement. Zynerba controls the timing and amount of any future sales of its shares of common stock and Lincoln Park is obligated to make purchases in accordance with the terms of the purchase agreement, subject to various limitations including those under the Nasdaq listing rules.

Any common stock that is sold by Zynerba will occur at a purchase price that is based on the market prices prevailing at the time of each sale. There is no upper limit to the price per share that Lincoln Park may pay for future stock issuances under the purchase agreement, and Lincoln Park has agreed not to cause or engage in any direct or indirect short selling or hedging of Zynerba’s common stock.

Zynerba may terminate the purchase agreement at any time, at its sole discretion, without any cost or penalty.

The company said the commitment will provide financial flexibility. Zynerba intends to use any net proceeds from the sale of its common stock for working capital and general corporate purposes, including research and development expenses and capital expenditures.

“We are excited to enter into this transaction with Lincoln Park Capital and believe that this agreement provides us with another opportunity to access capital in an efficient manner,” said Jim Fickenscher, chief financial officer and vice president of corporate development of Zynerba. “The financial flexibility provided by this agreement will further support our clinical development efforts with Zygel in Fragile X syndrome and 22q11.2 deletion syndrome.”

Author: Rare Daily Staff