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Zynerba Pharma’s failed cannabidiol gel trial has upside for rival GW Pharma

A failed clinical trial for Zynerba Pharmaceuticals Inc.’s cannabidiol gel in adult epilepsy sent its stock plummeting 58.5% in heavy morning trade Monday.

But the results could reflect well on rival GW Pharmaceuticals PLC GWPH, -2.13% , a U.K.-based biopharma company that develops cannabinoid medications, said Leerink Partners analyst Paul Matteis.

GW Pharma shares surged as much as 2.9% in moderate Monday morning trade.

GW’s shares have “underperformed in 2017; we believe one of the reasons is lack of clear positive catalysts in the backdrop of multiple competitive readouts,” Matteis said. “We therefore believe that the failure of the ZYNE study reinforces much of one overhang on the stock, and fundamentally it reinforces our view that barriers to entry for a follow on CBD product are high.

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