Synergy Pharmaceuticals Inc. (NASDAQ:SGYP): Did Investors Overreact?

Synergy Pharmaceuticals Inc. (NASDAQ:SGYP)

Shares of Synergy Pharmaceuticals Inc (NASDAQ:SGYP) shed 3.65% in market value after the company announced a new $300 million debt financing. The biopharmaceutical company secured the new financing from CRG LP, a healthcare focused investment firm.

Synergy Pharmaceutical Sell Off

Tuesday’s sell-off continued a trend that has plagued the stock for the better part of the year. Synergy Pharmaceuticals Inc. (NASDAQ:SGYP) is currently trading at the lower end of its $2.89 – $3.25 trading range, and appears to be closing on its 52-week low of $2.85 a share.

Synergy Pharmaceuticals Inc. (NASDAQ:SGYP)
One month SGYP stock price chart

Synergy Pharmaceuticals Inc. (NASDAQ:SGYP) has underperformed the overall industry even though it has released positive news. Early this year the company won an FDA approval for the use of its drug, Trulance for the treatment of idiopathic constipation. The condition affects about 35 million people in the U.S.

Investors were confident that Trulance would reinvigorate Synergy Pharmaceutical prospects given that a rival drug marketed by Allergan (NYSE:AGN) and Ironwood Pharmaceuticals, Inc. (NASDAQ:IRWD) generated sales of $625 million last year. That has not been the case, as the stock has continued to hit lower lows in the market.

Trulance is still seen by analysts as a major catalyst that could make or break Synergy Pharmaceuticals Inc. (NASDAQ:SGYP). The drug boasts clinical advantages that could make it as popular than Linzess, its primary competitor. In clinical trials, the drug reported lower diarrhea, abdominal pain, and flatulence when compared to Linzess.

Synergy Pharmaceuticals Inc. (NASDAQ:SGYP) is currently working on expanding the labeling of the drug, a move that it hopes will make it popular thus attract more sales. The company has also made a submission to the FDA to have the drug approved for the treatment of irritable bowel syndrome. A decision on the same is expected early next year.

$300 Million Debt Financing

In addition to positive news on the drug development front, the $300 million debt financing could have a significant impact on the company’s prospects going forward.

“This non-dilutive financing enhances our cash position and provides us with financial flexibility to continue to execute on the launch of TRULANCE and achieve our business objectives, which we are confident will ultimately maximize long-term shareholder value,” said Gary Gemignani, Chief Financial Officer

CRG agreeing to lend Synergy Pharmaceuticals Inc (NASDAQ:SGYP) $300 million underscores its confidence in the company’s long term prospects.

I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.

Don’t miss out! Stay informed on $SGYP and receive breaking news on other hot stocks by signing up for our free newsletter!

About the author: Monica has an undergraduate degree in Accounting and an MBA she earned – with Honors. She has six years of experience in the financial markets and has been an analyst for the past two years.

Synergy Pharmaceuticals Inc (NASDAQ:SGYP) Stock Paying Off, for Short-Sellers

Synergy Pharmaceuticals Inc (NASDAQ:SGYP)

Synergy Pharmaceuticals Inc (NASDAQ:SGYP) stock is continuing the slide that began on Tuesday after the company released their Q2 financials. This morning SGYP stock broke through the $3 level on volumes almost four times their normal average. Wednesday, Synergy posted a Q2 net loss of (-$73.9) million or (-$0.33) per share. Analysts were expecting a loss of only (-$0.25).

Synergy stock chart:

Synergy Pharmaceuticals Inc (NASDAQ:SGYP)
One month SGYP stock price chart

Trulance is Synergy Pharmaceuticals Inc (NASDAQ:SGYP)’s main sales generator. The drug addresses chronic idiopathic constipation and its sales performance exceeded projections. More than 12,600 TRULANCE prescriptions have been filled and total monthly prescription volume had an average increase of more than 182% month-over-month. At the end of the second quarter, more than half of new TRULANCE prescriptions filled since launch were coming from new patients not previously on a branded prescription treatment, and 45% were patients that converted from other branded prescription treatments.

Gary S. Jacob, Ph.D., Chairman and CEO of Synergy Pharmaceuticals Inc (NASDAQ:SGYP) stated ““The first half of 2017 was a truly transformative period for Synergy, as we transitioned into a commercial organization and launched our first product, TRULANCE, in the U.S. for the treatment of adults with chronic idiopathic constipation (CIC). We are pleased with the execution of our commercial strategy, and the strong initial demand for TRULANCE, reinforcing the need for new treatment options for patients suffering from CIC. And we are making significant progress in ensuring broad access to TRULANCE, highlighted by a number of favorable early decisions from key national payers.”

Synergy Pharmaceuticals Numbers

Although their featured drug, TRULANCE, seems to be selling well in the market, investors have been selling off SGYP stock. YTD, SGYP shares are down around 50% and down over 33% for the year. Currently the shares are trading within 2.5% of their 52-week low of $2.91. No doubt some of the downward pressure on SGYP stock is the large percent of the float held by short-sellers – over 27%. Still, analysts have given SGYP stock a consensus target price of $10.89.

I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.

Don’t miss out! Stay informed on $SGYP and receive breaking news on other hot stocks by signing up for our free newsletter!

About the author: Steve Clark is a 23-year Wall St professional with stints in M&A, risk management, and algorithm trading. Steve keeps his head in the game by looking for, and writing about, small companies that often get overlooked by the big investment firms.

Is Synergy Pharmaceuticals Inc. (NASDAQ:SGYP) Undervalued?

Is Synergy Pharmaceuticals Inc. (NASDAQ:SGYP) Undervalued?

Synergy Pharmaceuticals Inc. (NASDAQ:SGYP) has been on the receiving end ever since it gained regulatory approval for its Chronic Idiopathic Constipation drug, Trulance. The stock has shed more than 40% in market value over the past year, begging the question of whether the company is undervalued given Trulance’s worth.

NASDAQ:SGYP
NASDAQ:SGYP

Trulance Market Value

The drop in share value comes even as Synergy Pharmaceuticals Inc. (NASDAQ:SGYP) continues to outline its commercial plan for Trulance that some analysts believe could be materially change the company’s fortunes. Fueling investor confidence is that the drug’s target market is constantly growing and offers few treatment alternatives.

“Synergy controls 100% of the worldwide rights to TRULANCE, a high-value asset that is now generating revenues and has secured a long lifespan that we will be able to maximize. We remain focused on having a disciplined approach to capital allocation to support appropriate investments that will ensure the long-term success of TRULANCE,” said newly appointed Chief Financial Officer Gary Gemignani.

Synergy Pharmaceuticals Inc. (NASDAQ:SGYP) business prospects with Trulance faces competition by Linzess – marketed by Allergan. While the two drugs are priced similarly, Trulance is generally agreed to have a slight edge in the marketplace.

Trulance vs. Linzess

Trulance boast of minimal side effects compared to its rival. The drug can also be taken at any time during the day, compared to Linzess which has to be taken before the first meal of the day. The growth for Trulance has been more impressive when compared to Linzess’ initial growth.

The biopharmaceutical company has already started to expand its 250-rep strong sales force as it moves to ramp up sales for Trulance.

Anlaysts will now wait to see if Trulance can help reverse Synergy Pharmaceuticals Inc. (NASDAQ:SGYP) poor showing in the first quarter. The biopharmaceutical company says its net loss widened to (-$64.6) million, from a net loss of (-$59.9) million reported last year. Net sales in the first quarter totaled $0.1 million.

Research and development expenses in the quarter totaled $19.1 million which was a decrease from $21.2 million reported last year. The decrease has been attributed to lower spending on CIC clinical trials. Synergy Pharmaceuticals cash and cash equivalent soared to $139.3 million from $82.4 million as of December 31, 2016.

Synergy Pharmaceuticals Inc. (NASDAQ:SGYP) stock was down by 5.69% on Friday, ending the week at $3.48 a share.

I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.

About the author: Monica Gray has an undergraduate degree in Accounting and an MBA – earned with Honors. She has six years of experience in the financial markets and has been a securities analyst for the past two years.