Zosano Pharma Corp (NASDAQ:ZSAN) Gives Shorts a Headache – Rockets on Phase 3 Results

Zosano Pharma Corp(NASDAQ:ZSAN)

Zosano Pharma Corp (NASDAQ:ZSAN) shares are up on massive volumes. Average daily volume for the biotech nano-cap is just over 230k, but in early trading ZSAN volume has already exceeded 15.5 million. ZSAN closed Friday at $1.20 and have hit a high of $2.72 on news that Zosano has reported successful results from its Phase 3 clinical trial. Lead product candidate M207, a migraine treatment, met both of its co-primary endpoints of pain freedom and most bothersome symptom freedom at hour 2. A total of 589 subjects were enrolled at 36 sites across the US.

Zosano Pharma Corp’s investigational migraine treatment (M207) is an original formulation of zolmitriptan, a drug used orally and nasally to treat acute migraine, administered via the Company’s proprietary transdermal delivery system. M207 is being investigated as a potential treatment to provide rapid relief of migraine symptoms, at any time in the migraine cycle, in a discreet and simple manner.

Stewart Tepper, MD, Professor of Neurology, Geisel School of Medicine at Dartmouth and Director of the Dartmouth Headache Clinic commented, “The ZOTRIP study was successful from the dual perspectives of meeting the co-primary endpoints and no serious adverse events. The study demonstrated a statistically significant 2-hour pain freedom response rate with a low placebo rate for the primary endpoint. The data also indicate a durability of effect at 24 and 48 hours, and meaningful pain freedom rate at 1 hour. If approved by the FDA, M207 has the potential to become an important treatment option for those suffering from migraine.”

Zosano Pharma Corp (NASDAQ:ZSAN) reported sales of only $0.30 million in 2015 – quite a drop from 2012 when the company reported $11.6 million. EPS for ZSAN shareholders has been equally as lackluster. In 2012 ZSAN EPS was $0.18 but losses were taken in the following three years with 2015 seeing a loss of $2.49. Still, of the two analysts that cover (NASDAQ:ZSAN), one assigns the shares a rating of “Strong Buy”, while the other rates the shares as a “Hold”.

On the positive side (NASDAQ:ZSAN) is addressing a need in a massive market. Migraines are the third most prevalent disease in the world. Reports suggest that nearly 17% of the global population will suffer a migraine at some point in their lives.

I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 96 hours. All information, or data, is provided with no guarantees of accuracy.

2/13/2017
Ticker Symbol ZSAN
Last Price a/o 10:10 AM EST  $                      2.01
Average Volume                    230,600
Market Cap (mlns)  $                    20.70
Sales (mlns) $0.30
Shares Outstanding (mlns) 17.25
Share Float (mlns) 12.63
Shortable Yes
Optionable No
Inside Ownership 0.90%
Short Float 2.32%
Short Interest Ratio 1.27
Quarterly Return 144.90%
YTD Return 53.85%
Year Return -46.67%