In The Spotlight: Zogenix

(RTTNews) - It's been a banner year for Zogenix Inc. (ZGNX), whose share price has gained nearly 220% year-to-date. By contrast, the iShares NASDAQ Biotechnology Index (ETF) is up just 19% during the same time frame.

Zogenix is a pharmaceutical company developing therapies for the treatment of rare central nervous system disorders like Dravet syndrome and Lennox-Gastaut syndrome.

The Company's lead product candidate is ZX008, a low-dose fenfluramine liquid solution.

Fenfluramine - does this name sound familiar? Well... it was one of the ingredients in the now-banned obesity drug Fen-phen.

Zogenix's ZX008 has received orphan drug designation in the United States and Europe.

The Company reported positive top-line results from one of its pivotal phase III trials of ZX008 in Dravet Syndrome, dubbed Study 1, in September of this year.

Dravet syndrome is a rare form of childhood epilepsy with life threatening consequences, having limited treatment options.

In Study 1, ZX008 as an adjunctive therapy at a dose of 0.8 mg/kg/day achieved statistically significant convulsive seizure reduction in children and young adults with Dravet syndrome. ZX008 0.8 mg/kg/day also demonstrated statistically significant improvements in all key secondary measures, including the proportion of patients with clinically meaningful reductions in seizure frequency and longest seizure-free interval, according to the Company.

A second phase III trial of ZX008 as an adjunctive therapy in children and young adults with Dravet Syndrome, dubbed Study 1504, is also underway.

Late last month, the Company announced the initiation of a phase III trial with ZX008 as an adjunctive treatment of seizures associated with Lennox-Gastaut syndrome (LGS). This phase III trial of ZX008, which will involve children and adults, is designed to enroll a total of 225 patients.

Lennox-Gastaut syndrome is also childhood-onset epilepsy, but its characteristics are different from Dravet syndrome.

What Next?

-- The Company is scheduled to present additional efficacy and safety results from the first pivotal phase III trial (Study 1) of ZX008 in patients with Dravet syndrome at the 71stAmerican Epilepsy Society (AES) Annual Meeting on December 3, 2017, among other things.

-- Top-line data from the second phase III trial of ZX008 as an adjunctive therapy in children and young adults with Dravet Syndrome (Study 1504) are expected in the second quarter 2018.

Financials...

Zogenix has incurred significant net losses, and, as of September 30, 2017, had an accumulated deficit of $532.3 million. The Company has no revenue source until it commercializes ZX008.

At September 30, 2017, the Company had cash of $64.7 million, and in the following month raised net proceeds of about $271.3 million in a public offering, thereby strengthening its cash position.

Who's Ahead?

At present, there are no FDA-approved drugs to treat Dravet syndrome. Apart from Zogenix, there are a few other players too in this space - like GW Pharmaceuticals Plc (GWPH) Biocodex SA, INSYS Therapeutics Inc. (INSY) and PTC Therapeutics (PTCT).

Leading the race, ahead of Zogenix, is GW Pharma. It was only as recently as October 30, 2017, did GW Pharma complete the rolling submission of a New Drug Application for its cannabis-derived drug candidate Epidiolex in the treatment of Dravet Syndrome and Lennox-Gastaut Syndrome.

Analysts' Take

-- On November 27, 2017, JMP Securities initiated coverage on Zogenix with an "Outperform" rating, and a target price of $56.00. -- On October 3, 2017, Mizuho Securities raised its price target for Zogenix to $51 from $28.

Shares of Zogenix have traded in a range of $7.70 to $42.60 in the last 1 year. The stock closed Thursday's (Nov.30) trading at $38.85, up 2.51%. GWPH, the leader in the race for Dravet syndrome drug, closed the day's trading at $124.49, up 3.25%.