It’s been a winning day for some pharmaceutical companies making drugs based on marijuana.
Especially for those treating epilepsy.
After GW Pharmaceuticals announced that it had successfully treated a form of epilepsy using its cannabis-based drug Monday, Pennsylvania-based drugmaker Zynerba Pharmaceuticals stock also rose in concert by 150% during trading Monday.
Zynerba continued its rise 7% in after hours trading.
Like GW Pharmaceuticals (GWPH), Zynerba (ZYNE) is currently producing and testing several drugs treating epilepsy. One such drug in the pipeline is Zynerba’s ZYN002, a synthetic cannabinoid which mimics the effects of natural cannabinoids. It is delivered through the skin via gel.
The similarities between GW’s Epidiolex and Zynerba’s own drugs under development have pushed up investor optimism over the legitimacy of medical marijuana.
“GWP’s Epidiolex is a cannabinoid, similar to ZYNE’s products, with potentially better drug exposure with ZYNE’s transdermal system compared to GW’s oral administration,” wrote Biren Amin, an equity analyst at Jefferies in a Monday note. “This positive data improves odds of success for ZYN002.”
Zynerba’s ZYNoo2 is in Phase 1 trials—one of the earliest stages of drug testing. The drug would be administered in three doses over a seven day treatment period to 24 healthy and 12 participants with refractory epilepsy. Phase 2 trials are expected to start in the second half of 2016.
Amin set a price target for Zynerba at $32.00 a share, up from its price of $22.51 a share.
Zynerba also reported fourth quarter earnings that met expectations Monday, with a loss of 62 cents per share on revenue of $49,000.
Another drugmaker, Insys Therapeutics also rose 11.38% in trading Monday. The company is currently developing a cannabis-based drug to treat epilepsy in adults and children. The company is most well known for its cancer pain management drug, Subsys.
Though Insys (INSY) is lagging behind in clinical trials treating Dravet syndrome and Lennox-Gestaut, said Rohit Vanjani, a director at Oppenheimer and Co. Both companies are seeking “orphan” designation for their drugs, allowing the product seven years of exclusivity.
“But GW is ahead of Insys in that game,” he said.
“It remains a question on whether Insys can catch up,” he added in an email.