Setback for Zynerba Contingent Value Rights Following Clinical Trial Data

Holders of Contingent Value Rights (CVRs) linked to the former Zynerba Pharmaceuticals are facing a substantial devaluation of their securities. This follows the release of unsuccessful results from a pivotal late-stage clinical trial, severely diminishing the prospects for future milestone payments.

The catalyst for this decline was an announcement by Harmony Biosciences in late September 2025. Harmony, which completed its acquisition of Zynerba in October 2023, reported that the crucial Phase 3 trial named RECONNECT failed to meet its primary endpoint. This study was evaluating the drug Zygel (ZYN002) as a treatment for Fragile X Syndrome (FXS). Researchers did not observe a statistically significant improvement in social avoidance behavior—the trial's main goal—compared to a placebo. Company officials pointed to an unexpectedly high placebo response rate among participants as a key factor.

The clinical failure has direct consequences for the non-tradable CVRs issued to former Zynerba shareholders. These financial instruments entitle holders to potential cash payments only if Zygel achieves specified clinical, regulatory, and commercial milestones.

Revised Outlook for Milestone Payouts

The trial outcome has fundamentally altered the payment landscape for these CVRs:

• Milestone 2 is now highly unlikely to be triggered. This milestone was tied specifically to the statistical success of the FXS Phase 3 study and would have resulted in payments ranging from $0.1831 to $0.5494 per CVR.

  Should investors sell immediately? Or is it worth buying Zynerba?

• The pathway to Milestone 3, which requires U.S. Food and Drug Administration (FDA) approval for FXS, has grown considerably more challenging following the Phase 3 setback.

• Prospects for Milestone 4 have also dimmed. In early November 2025, Harmony Biosciences placed a hold on development of ZYN002 for a second potential application, the 22q11.2 deletion syndrome. This decision reduces the probability of securing an FDA approval for a second indication, which is required for this payout.

• Milestone 1 remains the sole near-term possibility. It stipulates a one-time payment of $15 million (approximately $0.2747 per CVR) contingent on the completion of the final patient visit in the RECONNECT study before June 2026. With the study concluded and data announced, this condition may be considered met. Harmony stated it will conduct a full analysis of the complete dataset early next year.

Uncertainty for Rights Holders

The path forward for Zygel in treating Fragile X Syndrome is now clouded with significant regulatory and commercial uncertainty. Former Zynerba shareholders, therefore, face considerable doubt regarding any future distributions beyond the potential Milestone 1 payment. Reflecting the broader impact, Harmony Biosciences' stock price fell between 14% and 16.6% upon disclosure of the trial results. The company plans to provide an updated assessment of its portfolio strategy in the spring of 2026.