DEVON, Pa., Sept. 29, 2023 (GLOBE NEWSWIRE) -- Zynerba Pharmaceuticals, Inc. (NASDAQ:ZYNE), the leader in innovative pharmaceutically-produced transdermal cannabinoid therapies for orphan neuropsychiatric disorders, today released the following letter to stockholders concerning the pending tender offer by Harmony Biosciences Holdings, Inc. ("Harmony").
Fellow Zynerba Pharmaceuticals Stockholders,
We urge you to promptly tender your shares in response to the pending tender offer (the "Offer") by Harmony and its wholly owned subsidiary, Xylophone Acquisition Corp. ("Purchaser"). As previously disclosed, the Offer is to purchase all of the issued and outstanding shares of the common stock, par value $0.001 per share, of Zynerba Pharmaceuticals, Inc. ("Zynerba"). Harmony is offering an up-front purchase price of $1.1059 per share plus one non-tradable contingent value right (CVR) per share, with each CVR representing the right to receive contingent payments in cash, without interest and less any applicable tax withholding, upon the achievement of certain clinical and commercial milestones related to Zygel, as described in more detail below under "Additional Information". If all milestones are achieved, the maximum additional payment to shareholders is up to an additional approximately $2.5444 per share in cash, which would result in total consideration of $3.6503 per share in cash when combined with the up-front consideration.
The Offer is conditioned upon, among other things, more than 50% of the outstanding shares of Zynerba common stock being validly tendered and not properly withdrawn prior to the expiration of the Offer. The Offer was initially scheduled to expire at 5:00 p.m. New York City time on September 26, 2023. As of that time, approximately 32.1% of Zynerba's outstanding shares of common stock was tendered, which was not sufficient to satisfy the minimum tender condition. On September 27, 2023, Harmony announced an extension of the Offer until 5:00 p.m., New York City time, on Tuesday, October 10, 2023, to allow for additional shares to be tendered by stockholders.
I am reaching out to remind you to tender your shares prior to the expiration of the Offer on October 10, 2023. If less than a majority of the outstanding shares of Zynerba common stock are tendered, the Offer will not be completed and Zynerba will not be acquired by Harmony. In order to ensure that the minimum tender condition is met and for you to receive payment in connection with the Offer, it is important that you tender your shares regardless of the number of shares you own.
The Zynerba Board unanimously recommends that Zynerba stockholders tender their shares pursuant to the Offer.
What Happens if Stockholders Don't Tender Their Shares?
The Zynerba Board of Directors believes there are substantial risks to Zynerba remaining an independent company if the Offer is not completed and Zynerba is not acquired by Harmony. As discussed in further detail in the Schedule 14D-9 filed by Zynerba with the Securities and Exchange Commission (the "SEC") on August 28, 2023, as amended, these risks include:
- Zynerba Will Require Significant Additional Capital to Continue as a Standalone Company. As a standalone company, Zynerba will need a significant amount of additional capital in the near term to fund ongoing operations and the continued development of Zygel. Given the macro-economic, industry and market conditions negatively impacting valuations of clinical pharmaceutical and biotechnology companies such as Zynerba, Zynerba's access to additional capital may be very limited in both availability and amount.
- Any available fundraising transaction could have a highly dilutive effect on Zynerba's existing stockholders.
- Zynerba's Stock Price Could Decline and Zynerba Could Fail to Meet the Continued Listing Requirements of the Nasdaq Stock Market. If the Offer is not completed, the market price of Zynerba's common stock may decline, particularly to the extent that the current market price reflects a market assumption that the Offer and merger will be completed. While Zynerba is currently in compliance with the continued listing requirements of the Nasdaq Capital Market, a decline in Zynerba's stock price could cause Zynerba to fail to comply with the $1.00 minimum price requirements of the Nasdaq Capital Market. Previously, in November 2022, Zynerba was notified by Nasdaq of failure to comply with the $1.00 minimum price requirement and was provided until October 30, 2023 (following the grant of an additional compliance period) to regain compliance. Zynerba's stock price did not increase above the $1.00 threshold until the time of announcement of the Offer and potential acquisition by Harmony. Throughout 2023, Zynerba sought stockholder approval of a reverse stock split to regain compliance with the Nasdaq minimum price requirement and was unable to obtain the required shareholder approval. If the Offer is not completed and Zynerba is unable to maintain the $1.00 minimum price and is unable to obtain stockholder approval of a reverse stock split, Nasdaq may take steps to delist Zynerba's common stock.
How to Tender Your Shares
1. Contact your broker. If you hold shares of Zynerba common stock through a broker, dealer, commercial bank, trust company or other nominee, you must instruct such broker or other nominee to tender your shares. Please do so promptly to allow sufficient time to meet any broker processing deadlines ...