Synergy Pharmaceuticals (NASDAQ:SGYP) jumped up 7% in after hours trading on a new Cantor research report giving SGYP an $11 price target.
The stock has been on a steady decline since mid-February since it sold 20.3 million shares in a direct offering, but this could be the catalyst SGYP needs to bring in more buyers to soak up all the new stock.
SYGP missed earnings by $0.07 as reported on May 10th which may have prompted the most recent sell off.
The chart shows the stock below both the 50 Day and 200 Day Moving Averages which may indicate it’s significantly undervalued, especially considering the $11 price target by Cantor.
Investors should be paying attention to SGYP as it may appear to be a solid acquisition target for a larger pharma player.
On May 10th, SGYP announced Q117 earnings results and here are the highlights:
- Received FDA Approval of TRULANCE™ (plecanatide) for the Treatment of Adults with Chronic Idiopathic Constipation (CIC); Initiated Promotional Efforts for TRULANCE in March 2017
- Submitted Supplemental New Drug Application (sNDA) for TRULANCE for the Treatment of Adults with Irritable Bowel Syndrome with Constipation (IBS-C)
- Extended TRULANCE Exclusivity Protection with the Issuance of Three New Patents
- Highlighted New Data for TRULANCE at Digestive Disease Week (DDW) 2017
- As of March 31, 2017, SGYP had approximately $139.3 million of cash and cash equivalents on hand as compared to approximately $82.4 million of cash and cash equivalents as of December 31, 2016.
- Net cash used in operating activities was $63.5 million in the three months ended March 31, 2017, as compared to $27.6 million in the three months ended March 31, 2016. This increase is primarily attributable to the buildout of the commercial organization and costs related to the launch of TRULANCE, including the building of inventory.
- SGYP had net deferred revenues of $4.3 million during the three months ended March 31, 2017 as we first began distributing our product in March of 2017. SGYP expects that these revenues will be recognized in future periods.
- Net sales in the first quarter of 2017 were approximately $0.1 million as we first began distributing our product in late March of 2017.
- Cost of goods sold in the first quarter of 2017 was approximately $1.8 million.
- Research and development expenses in the first quarter of 2017 were approximately $19.1 million, as compared to $21.2 million in the first quarter of 2016. This decrease in research and development expenses was due primarily to lower spending on CIC clinical studies.
- Selling, general and administrative expenses were approximately $41.9 million in the first quarter of 2017, as compared to approximately $6.4 million in the first quarter of 2016. This increase is primarily attributable to the buildout of the commercial organization and costs related to the launch of TRULANCE.
- On February 6, 2017, SGYP closed on a registered direct offering of approximately 20.3 million shares of our common stock with net proceeds of approximately $121.6 million.
- As of March 31, 2017, the principal balance on our Notes was $18.6 million as compared to $23.5 million at December 31, 2016.
- SGYP had 224.9 million and 202.7 million common shares issued and outstanding at March 31, 2017 and December 31, 2016, respectively, which reflects primarily an increase in the issuance of shares from the common stock offering noted above and the first quarter conversions of the Notes.
- Net loss in the first quarter of 2017 was $64.6 million, as compared to a net loss of $59.9 million incurred in the first quarter of 2016.
Synergy Pharmaceuticals (NASDAQ:SGYP) Company Overview
Synergy Pharmaceuticals (NASDAQ:SGYP) is a biopharmaceutical company focused on the development and commercialization of novel GI therapies.
SGYP has pioneered discovery, research and development efforts on analogs of uroguanylin, a naturally occurring and endogenous human GI peptide, for the treatment of GI diseases and disorders.
Their proprietary GI platform includes one commercial product TRULANCE™ and a second lead product candidate, dolcanatide.
TRULANCE™ (plecanatide) is a once-daily tablet approved for adults with CIC and is being evaluated for IBS-C.
With the exception of a single amino acid substitution for greater binding affinity, TRULANCE is structurally identical to uroguanylin, a naturally occurring and endogenous human GI peptide. Uroguanylin activates GC-C receptors in a pH-sensitive manner primarily in the small intestine, stimulating fluid secretion and maintaining stool consistency necessary for regular bowel function.
Recent SGYP Milestones
SGYP has been primarily been focused recently on moving its TRULANCE product through the FDA approval process and presenting results from the most recent studies:
- May 2017 – Announces first quarter 2017 results (see news release)
- May 2017 – Presents positive TRULANCE Phase 3 data at Digestive Disease Week (see news release)
- April 2017 – Announces issuance of three new patents expected to extend TRULANCE patent protection until 2032 (see news release)
- April 2017 – Submits supplemental new drug application for TRULANCE (see news release)
SGYP Management Team
SGYP is led by a seasoned management team with in-depth experience in pharmaceutical and biotechnology development and product commercialization.
Gary S, Jacob, Ph.D.
Chairman of the Board and CEO
Gary Jacob, Ph.D., has served as SGYP’s President, Chief Executive Officer and a Director since July 2008. He is a co-inventor of Synergy’s uroguanylin-based GI platform technology for functional GI disorders and inflammatory bowel disease. He has over 25 years of experience in the pharmaceutical and biotechnology industries across multiple disciplines, including research and development, operations and business development
Patrick H. Griffin, M.D., FACP
Executive Vice President and Chief Medical Officer
Patrick Griffin, M.D., is a board-certified physician in both internal medicine and gastroenterology, and is a Fellow of the American College of Physicians. He received his medical degree from Columbia University, completing a residency in internal medicine at Presbyterian Hospital in New York, and a fellowship in gastroenterology at Brigham and Women’s Hospital in Boston.
Troy Hamilton, Pharm.D.
Executive Vice President and Chief Commercial Officer
Troy Hamilton, Pharm.D., has served as SGYP’s Executive Vice President, Chief Commercial Officer since February 2016 and as our Senior Vice President, Chief Commercial Officer from July 2015 to February 2016. Troy has over 20 years of experience in the pharmaceutical industry, with an emphasis on general management, P&L responsibility, commercialization, partnerships, acquisitions, and global product launches in the gastroenterology and primary care markets.
Executive Vice President and Chief Strategy Officer
Mr. Garcia, M.B.A, has over 22 years of experience in various commercial, new product planning and business development roles. Prior to joining Synergy in March 2014, he served as Vice President of Global Business Development at Aptalis Pharma, a privately held specialty company focused on the gastrointestinal and cystic fibrosis markets which was acquired by Forest Labs in early 2014.
Gary G. Gemignani
Executive Vice President and Chief Financial Officer
Mr. Gemignani’s career in healthcare spans over three decades, including senior management positions at several pharmaceutical and biopharmaceutical companies. Most recently, he served as Chief Executive Officer and Chief Financial Officer of Biodel, Inc., (now Albireo), overseeing business and strategic planning, operations, and financing activities of the Company.
SVP, Manufacturing & Technical Operations
Chhaya Shah joins SGYP with more than 25 years of experience in the pharmaceutical industry, with expertise in end-to-end supply chain for commercially marketed and development products, quality assurance, CMC and manufacturing. Prior to joining SGYP, from September 2013 to December 2015, she served as Vice President, Technical Operations, Business Unit Partnership of Shire Pharmaceuticals. she was responsible for end-to-end supply chain for 23 commercially marketed products and 15 development products.
SVP, Sales & Market Access
Marianne joins SGYP with over 25 years of commercial leadership experience in the biopharmaceutical industry with emphasis on P&L and general management, strategy, product launches, brand marketing, sales, commercial operations and market access. She has worked extensively in both US and international markets in the gastrointestinal, CNS, pain and rare disease therapeutic areas.
SGYP’s chart makes the company appear to be weak, but this is mostly due to the 20.3 million share offering in February.
The company is clearly focused on bringing TRULANCE to market, and it also may be an acquisition target for the right company that can understand it’s true valuation.
The recent $11 price target set by Cantor should help the stock turnaround as more investors take notice and buyers come in.
Disclosure: We have no position in SGYP and have not been compensated for this article.