Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Synergy Pharmaceuticals Secures $300 Million Debt Financing
Business WireSeptember 5, 2017
NEW YORK--(BUSINESS WIRE)--
Synergy Pharmaceuticals Inc. (SGYP), announced today that the Company has closed on a $300 million debt financing structured as senior secured loans from CRG LP, a healthcare focused investment firm, and its lender syndicate.
“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, EVP and Chief Financial Officer of Synergy Pharmaceuticals Inc. “The structure of this financing provides us with access to capital for support of our commercialization of TRULANCE and funds our current plans for the Company through 2019 when, based on our current assumptions, we expect to be cash flow breakeven.”
“We are excited for the opportunity to support Synergy at this important stage in the commercialization of TRULANCE,” said Luke Düster, Managing Director of CRG. “As part of our investment process at CRG, we performed extensive due diligence on TRULANCE, the market opportunity and Synergy’s overall business and commercial strategy. The results confirmed that TRULANCE has a substantial opportunity to serve the GI community and that there is tremendous potential to add significant value to the Company. This transaction demonstrates our confidence in Synergy’s product, commercial strategy and its team’s ability to optimize TRULANCE and successfully capitalize on this large and growing market.”
“We are pleased to partner with CRG, an investment partner that is known for its strategic investments in healthcare,” said Gary S. Jacob, Chairman and Chief Executive Officer of Synergy, “We remain committed to maximizing the potential benefit of TRULANCE and bringing this important new treatment option to healthcare providers and patients.”
Transaction Terms
The first tranche of $100 million was funded upon execution of the loan documents. The loan agreement provides for future borrowings, subject to the satisfaction of certain financial and revenue milestones and other borrowing conditions as follows: (i) an additional $100.0 million on or before February 28, 2018, and (ii) up to two additional tranches of up to $50.0 million each on or before March 29, 2019. The loans mature on June 30, 2025 and payments under the loan are interest only paid quarterly for the initial five-year period, followed by 12 equal quarterly installments of principal and interest during the final three years of the term, which converts to an eight-year interest only period if certain milestones are achieved. The loans carry an annual interest rate of 9.50%. The Company maintains the option to prepay outstanding loan amounts during the term of the loan. Further information with respect to the non-dilutive debt financing agreement with CRG are set forth in the Form 8-K to filed by the Company with the Securities and Exchange Commission reporting the entry into the loan transaction on September 1, 2017. Royalty/Revenue Interest Capital Advisors served as exclusive financial advisor for this transaction.
About Synergy Pharmaceuticals Inc.
Synergy is a biopharmaceutical company focused on the development and commercialization of novel GI therapies. The company 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. Synergy’s proprietary GI platform includes one commercial product TRULANCE and a second lead product candidate, dolcanatide. For more information, please visit www.synergypharma.com.
About CRG
CRG is a premier healthcare-focused investment firm with more than $3.0 billion of assets under management across more than 45 portfolio companies. The firm seeks to commit between $20 to $300 million in each investment across the healthcare spectrum, including: medical devices, biopharmaceuticals, tools & diagnostics, services and information technology. CRG provides growth capital in the form of long-term debt and equity to support innovative, commercial-stage healthcare companies that address large, unmet medical needs. The firm partners with public and private companies to provide flexible financing solutions and world-class support to achieve exceptional growth objectives with minimal dilution. CRG maintains offices in Boulder, Houston and New York. For more information, please visit www.crglp.com.
Forward-Looking Statement
This press release and any statements made for and during any presentation or meeting contain forward-looking statements related to Synergy Pharmaceuticals Inc. under the safe harbor provisions of Section 21E of the Private Securities Litigation Reform Act of 1995 and are subject to risks and uncertainties that could cause actual results to differ materially from those projected. These statements may be identified by the use of forward-looking words such as "anticipate," "planned," "believe," "forecast," "estimated," "expected," and "intend," among others. There are a number of factors that could cause actual events to differ materially from those indicated by such forward-looking statements. These factors include, but are not limited to, the timing and potential for successful development, launch, introduction and commercial potential of TRULANCE; growth and opportunity, including peak sales and the potential demand for TRULANCE, as well as its potential impact on applicable markets; market size; substantial competition; our ability to fund the payment of interest and principal of the loan amounts and to continue as a going concern; our need for additional financing; uncertainties of patent protection and litigation; uncertainties of government or third party payer reimbursement; dependence upon third parties; our financial performance and results, including the risk that we are unable to manage our operating expenses or cash use for operations, or are unable to commercialize our products, within the guided ranges or otherwise as expected; and risks related to failure to obtain FDA clearances or approvals and noncompliance with FDA regulations. As with any pharmaceutical under development, there are significant risks in the development, regulatory approval and commercialization of new products. There are no guarantees that future clinical trials discussed in this press release will be completed or successful or that any product will receive regulatory approval for any indication or prove to be commercially successful. Investors should read the risk factors set forth in Synergy's most recent periodic reports filed with the Securities and Exchange Commission, including Synergy’s Form 10-K for the year ended December 31, 2016. While the list of factors presented here is considered representative, no such list should be considered to be a complete statement of all potential risks and uncertainties. Unlisted factors may present significant additional obstacles to the realization of forward-looking statements. Forward-looking statements included herein are made as of the date hereof, and Synergy does not undertake any obligation to update publicly such statements to reflect subsequent events or circumstances except as required by law.
You said: "Please explain how this company is a good investment"?
Why not ask these people that own 72% of the outstanding stock. Do they know more than you and me?
Institutional investors hold a majority ownership of SGYP through the 72.00% of the outstanding shares that they control.
This interest is also higher than at almost any other company in the Pharmaceuticals:
Other industry. Last, during the quarter ended June 2017, these large investors purchased a net $9.2 million shares.
Other institutional 48.90%
Mutual fund holders 23.10%
Individual stakeholders 11.42%
Synergy: Q2 Review
Aug. 29, 2017 8:05 AM ET|
13 comments|
About: Synergy Pharmaceuticals, Inc. (SGYP), Includes: IRWD
Patrick Mayles
Patrick Mayles
Long/short equity, event-driven, small-cap, mid-cap
(37 followers)
Summary
Synergy’s earnings disappointed in Q2, although net sales beat estimates by almost 20%.
We investigate the company's 10Q to aid in an analysis of the company’s financial health, and to assess the validity of consensus estimates that drove the post-earnings dip.
The greatest near-term risk to SGYP's performance is further dilution, while the greatest long-term risk is stalling sales growth in plecanatide.
Synergy Pharmaceuticals' (SGYP) financials have changed quite drastically from Q1 to Q2, but the market is not impressed. Its share price fell from 3.50 to a low in the 2.80s following an earnings miss, and closed on Monday at around 3.10. This puts SGYP's market cap around 680 million, roughly half of where it was at the beginning of the year, before the company had any FDA approvals or revenue to speak of. An interesting juxtaposition, when we consider the generally bullish nature of the market since January, in spite of a dearth of real developments to warrant such significant gains. In any case, Synergy has been on a slow decline since Jan 2017, and sunk even further when it published its Q2 earnings. This article aims to investigate the details of Synergy's 10Q, assess the validity of the consensus estimates that drove the post-earnings dip, and comment briefly on risks to share performance moving forward.
Great Expectations, Predictable Fallout
When a company's valuation is dramatically impacted by an earnings release, I think it is important investigate how reasonable the consensus estimates were to begin with. In the case of very small cap companies, there are generally fewer analysts rendering opinions, which can yield less accurate earnings estimates. The bitter irony is that these companies' share prices are often the most dramatically impacted by earnings surprises. As I look over the financials and implied trends over the last few quarters, I believe this to be the case for Synergy. Breaking down the most recent 10Q leaves one scratching his head as to how analysts married a revenue expectation of 1.96 million to a net income of roughly -56 million, given the company's bottom line trends in previous quarters.
Enter Revenue
Synergy Pharmaceuticals has three significant income statement figures that warrant the most attention. The main two are SG&A expense and R&D expense, and as of Q1 of this year, gross profit has entered the ranks. As a general rule, and due to the relative tininess of gross profit, net income for SGYP is a very close number to the sum of SG&A and R&D, making them essential for assessing the company's earnings. We will take a look at the behavior of these two income statement items later in the article. First, let's look at gross profit. With the recent (and welcome) introduction of revenue to the income statement, the metric has also become an important factor, although it is currently dwarfed by the other two.
Gross Metrics
The chart above gives an idea of Synergy's net sales, cost of goods sold (COGS), and the resulting gross loss following the first sales of plecanatide in March of 2017. Keep in mind that this means Q1 only saw one month of sales, the company's first revenue-generating month. Even considering this fact, the jump in revenue from $98,000 to 2.3 million is impressive and encouraging, and beat estimates by 20% (consensus was a reasonable 1.96M).
If you think COGS looks very high relative to revenue, especially in Q1, you're on to something. Here is an important note on Synergy's COGS accounting, as quoted from the 10Q:
"Cost of goods sold ("COGS") for the three months ended June 30, 2017 totaled $2.9 million, which includes
direct cost of manufacturing and packaging drug product and
technical operations overhead costs which are generally more fixed in nature, including salaries, benefits, consulting, stability testing and other services.
Technical operations are responsible for planning, coordinating, and executing the Company's inventory production plan and ensuring that product quality satisfies FDA requirements.
Technical operations overhead represents the majority of COGS in our Statement of Operations for the three months ended June 30, 2017."
SGYP capitalizes as inventory all technical operations expenses associated with bringing the drug to patients. This includes significant fixed costs, such as the salaries and benefits of various personnel from packaging to quality assurance, and overhead costs indirectly tied to the production of the drug. This accounting method means that Synergy's COGS features sizable expenses that might otherwise be found in other areas of the income statement, leaving it looking quite bloated in relation to revenue, especially for a pharmaceutical company.
With this fact in mind, and using the negligible net sales of Q1, we can safely postulate that the fixed portion of COGS, as of now, is somewhere between 1.8 and 2 million. Net sales grew by 2.2 million QoQ, while COGS grew by 1.1M, putting the marginal cost of revenue in this quarter at around $0.50. This number should shrink with time, as Synergy continues to grow into its inventory-related fixed costs.
Given the consensus estimate of 1.96 million for revenue, and an inferred quarterly fixed COGS of at least (1.8M), analysts clearly weren't looking to gross profit to support a thesis that net income would improve from ~(65M) to ~(56M) QoQ. So, where was this $8.5 million improvement in the bottom line going to come from? The only reasonable answer, from where I'm sitting, is a skinnier SG&A, R&D, or some combination of the two.
SG&A, R&D
The above chart shows Synergy's most recent three quarters in terms of SG&A and R&D spending, with the green line showing the sum of the two. Net Income is included to show how closely the two figures' sum matches it (note that Q4 2016 had an Unusual Expense item of ~14M). If the bottom line were to improve by more than 10%, as was predicted, it would have come from these two items. Was this a reasonable expectation?
Synergy is a young pharmaceutical company, juggling the nascent commercialization of plecanatide for CIC, while already investing to prepare its sales force and marketing muscle for an anticipated approval for IBS-C, according to the most recent 10Q. To this end, SG&A, which is primarily composed of marketing and sales expense in Synergy's case, has increased 20% QoQ, which is half the rate of increase that we saw in Q1. I believe the safe money should have been on SG&A increasing QoQ, and that 20% is an rather unremarkable figure. Research and Development expense has remained relatively flat, which seems predictable, since little has changed for the company in terms of drug development since Q1. A significant decrease in the figure would have been a stretch, given that the company currently has 3 different treatments in its pipeline.
Based on predicted revenue and the nature of COGS, analysts apparently expected an $8M decrease between these two expense items, at a time in the company's history when this is extremely unlikely. It would have been fair to predict a slightly lower net loss QoQ, and the increased net loss is indeed a disappoint. However, a reduction of 12% in the company's deficit, assumed to be driven by smaller SG&A/R&D, was unrealistic, given this company's need to play catch-up as it brings its products to market behind competitors. It should come as no surprise that SG&A didn't shrink, or even that it increased. Synergy is aggressively spending on establishing plecanatide in the CIC space, while also diverting sales and marketing resources ahead of a likely approval for IBS-C.
Synergy's Q2 performance was a mixed bag. Its ever-shrinking debt expense was less than half the previous quarter, and the company delivered with its first quarter of substantial revenue, beating expectations and raising hopes for a successful commercialization. However, these positive developments were eclipsed by a significant earnings miss, due to a 20% increase in SG&A which drove net income further into the red, but also to an overly rosy earnings prediction. In short, the 10Q wasn't as ugly as the price movement and earnings miss make it seem. However, there are significant risks that Synergy faces in the near and long term.
Real Challenges
I believe that the recent earnings miss has left Synergy undervalued. However, I acknowledge the significant risks that the company faces. The greatest near-term danger to share price is further dilution. Synergy has shown a preference, especially in the last year, for fund-raising through the sale of equity, rather than the issuance of debt. Shares outstanding have increased by about a third YoY, from 168 to 224 Million. It will likely be at least another year of hefty net loss for the company, as sales have a long way to go to outpace much larger bottom line figures. Fundraising remains a concern. Year to date, the company has financed a 138M net loss primarily through the sale of $122M in common stock. Logic holds that this trend will continue, as Synergy has demonstrated an aversion to debt and the expenses that come with it, and has even converted a substantial amount of existing debt to common stock in recent quarters.
Synergy's cash situation is always an issue. With $82 million in cash and an improbability of Net Loss ($74M this quarter) reducing substantially in Q3 or Q4, it is fair to assume that Synergy will need to fund-raise again. If history is any indication, it will be through the sale of common stock. This is something to account for as you assess the near term prospects of SGYP in the following months. It also raises the well-worn question of a buyout, or a revenue-sharing model akin to what Ironwood arranged, the latter warranting a total recalculation of what Net Sales growth will look like moving forward.
Speaking of which, a more existential threat to the company is sales growth. It is incumbent on Synergy to effectively commercialize its intellectual property, and so far they have done a good of that with plecanatide for CIC coming out strong in Q2, and IBS-C treatment approval to look forward to in 2018. However, they do not have the luxury of a slow growth curve, as they have accrued a substantial accumulated deficit leading up to this point, and financing heavy losses will only grow costlier in terms of debt, or more likely equity, as time goes on. I will have more to offer regarding a Net Sales prognosis closer to Q3 earnings, but weekly prescription growth has hitherto been strong, and the true test will be how COGS and SG&A move with that growth.
Conclusion
The Synergy story is very similar to what it was a year ago, with the notable exception that it now features revenue. The stock is still a nail biter, with equal parts huge growth potential and stark financial statements. I believe that, even accounting for a hefty risk premium, SGYP is a buy at this price. After all, what's more contrarian than to buy a cheap, high growth, high risk stock at a time when everyone else is paying huge multiples to invest in the "calmest market in decades"? The company's picture will become clearer as we have more data related to plecanatide's sales performance, but even in light of a difficult Q2 earnings, the company has a lot more race to run, and could be trading at a steal in August 2017.
Disclosure: I am/we are long SGYP.
I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Synergy Pharmaceuticals: A Hidden Gem In The BioPharma Sector
Aug. 16, 2017 5:48 AM ET|
About: Synergy Pharmaceuticals, Inc. (SGYP)
Millenial Investment Research
Long/short equity, Growth, biotech, airlines
(39 followers)
Summary
A steady increase in the new-to-brand prescription market share since the launch of Trulance.
Synergy Pharmaceuticals has the potential to be major player in the GI market, but the company may want to raise additional working capital.
An undervalued stock at the current price.
Introduction
I track companies that are relatively cheap and would fall in a sector that are performing well above the S&P index. Another factor that I consider would be the potential for future growth. Take, for example, Synergy Pharmaceuticals Inc. (NASDAQ:SGYP). For those of you who have never heard of Synergy, it is a biopharmaceutical company focused on the development and commercialization of novel gastrointestinal (GI) therapies.
Due Diligence
SGYP Stock Performance YTD
Synergy was a pure developmental-stage company until Q1 of this year, and it started to realize revenue in Q2 with the release of Trulance, its first commercial product for the treatment of CIC. According to studies, 1 out every 7 person has symptoms of constipation, with an estimated 33 million people in US alone thought to be suffering from CIC (according to SGYP and Medscape). Synergy is targeting this market with the introduction of Trulance, and the company's financial statements indicate it is off to a very good start.
SGYP month to month
Trulance prescribers have increased an average of 140% month-over-month since launch (Source: Synergy Pharmaceuticals Earnings Release Statements)
A full quarter into the release of Trulance, the refill rate currently sits at an impressive 30%, contributing to an overall weekly growth rate of about 15%. While we don't have enough sales data to substantiate future growth, it is obvious that Synergy is deemed to record double-digit performance growth over the next couple of quarters. It is also reported that Trulance is a far superior product with fewer side-effects when compared to its peers. So why the decline in price per share over the last several months?
The stock was subjected to a “sell the news” market phenomena when its only commercial product, Trulance, was approved by the FDA back in January. The market was excited initially, but that excitement faded off into concern when the potential marketing costs an early-stage company like Synergy will have to deal with are taken into account. To no one's surprise, the company almost immediately announced a secondary offering of 20 million shares at $6.15 a piece, raising about $120 million and bringing the total outstanding to the current 225 million shares.
Since then, Synergy has been on a steady decline for a variety of reasons, ranging from huge marketing and promotional expenditure the company has incurred (approximately $23.1 million in Q2) for the commercial launch of Trulance, to elevated concerns of its current cash position and capital requirements, the latest being the addition to the Express Scripts (NASDAQ:ESRX) 2018 exclusion list. From a market cap of roughly $1.2 billion back in January, it lost approximately 45%, currently at around $670.25 million as of this writing. So much for a company which has a superior product when compared to its peers.
The financial performance from the last quarter was also factored into the fall. Synergy reported an EPS loss of 33 cents versus an expected 25 cents loss. While the net sales of $2.3 million favored the Street's estimates of $2.1 million, the market appeared to be overly concerned about the jump in expenditure ($73.9 million in Q2 vs. $66.6 million in Q1 2017), thereby causing concerns about the cash on hand ($82 million at the end of Q2) position. The current cash position will force the company to look into alternative ways of financing in the near future, which will be addressed later in this article.
Performance and future growth
SGYP Growth
Trulance has had a 182% monthly average increase in sales since it was introduced in March (Source: Synergy Pharmaceuticals Earnings Release Statements), and more than 12,600 prescriptions had been filled as of the end of last quarter. The product continues to gain traction in the overall new-to-brand prescription (NBRx) market. There exists a very good conversion rate among patients that are new to a branded prescription treatment and among those that converted from other branded prescription treatments, currently at 45%.
The company has also secured a 2018 managed care contract with CVS Caremark (NYSE:CVS), which manages approximately 50 million people in the U.S., that will place Trulance on formulary without restriction (non-preferred) for its Commercial Template Clients or Employer Groups, representing approximately 24 million lives. Per the earnings statements, Synergy remains in contract discussions with CVS Caremark for the coverage of the remaining people.
Medicare Part D and Medicaid discussions are ongoing, and the company expects several major accounts to include Trulance on formulary in 2018.
Upcoming approval for the treatment of IBS-C indication (PDUFA by January 24, 2018) would be another growth factor for Synergy. The approval would extend Trulance’s potential customer base by another 35%.
What's next
NBRx Market Share
SGYP Market Share
(Source: QuintilesIMS: Synergy Presentation)
Synergy’s Trulance launch is going very well at this point, as evident from its latest quarterly statements. The company is working to secure contracts with other pharmacy benefit managers (PBMs) and payers for 2018 coverage to ensure broad access to Trulance. This is undoubtedly a sales catalyst and will contribute to the bottom line in the coming quarters. As the company expands the sales revenue, the potential for raising additional capital will also be substantial, which I will discuss next.
Synergy has minimal or no debt at this point. The company has $82 million of cash and cash equivalents at the end of Q2, and based off its current cash burn ($63.6 million in Q1 and $57.3 million in Q2), that should last about a quarter and then a month or two. It is obvious from its current capital requirements that the company would have to tap into the secondary market again or raise debts for additional working capital. A secondary offering is highly unlikely at this point, based off the stock price, and it's safe to assume that the company would have finalized some sort of debt structure north of $125-150 million. This will give it a financial cushion of approximately $200 million, given that Trulance for IBS-C is expected to be approved towards the end of 2017. We’ll know more in the company's much-anticipated conference call on September 7th to discuss its financial strategy and business going forward.
These capital requirement concerns are already factored fully into the current stock price, and it's obvious that any sort of clarity into a future arrangement would take the stock price upwards. Analysts from several major funds are also favoring Synergy Pharmaceuticals. The 7 analysts offering 12-month price targets for the company have maintained a median target of $11.00, with a high estimate of $18.00 and a low estimate of $3.70. There has been substantial MF activity in this stock in the past couple of trading sessions as well. (Source: Nasdaq)
Conclusion
The company could potentially be a major player in the treatment of GI diseases and disorders. It is banking on Trulance, which claims to have fewer side effects over competitors Linzess and Amitiza. I’m not overly optimistic about Synergy at this point given its current situation, but partnering with a major player to market Trulance worldwide would undoubtedly be an uptick catalyst for the stock price.
As with any small-cap biopharma stock, volatility is a factor that could sway away value investors towards more stable names like Ironwood Pharmaceuticals (NASDAQ:IRWD) or Allergan (NYSE:AGN). Being a smaller firm than its peers, Synergy does lack the complete value chain activities required to cultivate the relationships with the healthcare providers needed to promote and sell its products. It is often for this reason that investors tend to expect a partnership with a larger player or a buyout early in the commercialization process.
I expect Synergy to be volatile in the near term, but a medium- to long-term play is going to be highly rewarding.
Disclosure: I am/we are long SGYP.
I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Over a million shares traded at the close
Look at it this way: Some us bought the 19+ million shares traded today.
Finally, a voice of reason.
Q2: 08-09-17 Earnings Summary
EPS of $-0.33 misses by $-0.08
Revenue of $2.3M (+ Infinity% Y/Y) beats by $0.34M
TRULANCE™ (plecanatide) U.S. net sales of $2.3 million in second quarter of 2017
Total TRULANCE monthly prescription volume has increased on average more than 182% month-over-month since launch in March 2017
TRULANCE supplemental new drug application (sNDA) for irritable bowel syndrome with constipation (IBS-C) accepted for FDA review - PDUFA date of January 24, 2018
NEW YORK--(BUSINESS WIRE)-- Synergy Pharmaceuticals Inc. (SGYP), a biopharmaceutical company focused on the development and commercialization of novel gastrointestinal (GI) therapies, today reported its financial results and business update for the three months ended June 30, 2017. Synergy will host a conference call and webcast at 4:30 p.m. Eastern Time on Thursday, September 7, 2017 to discuss its corporate and financial strategy, and provide a general business update. Further details about this conference call can be found below.
“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),” said Gary S. Jacob, Ph.D., Chairman and CEO of Synergy Pharmaceuticals Inc. “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.”
“During the second quarter, we also made significant progress towards broadening the TRULANCE label with the FDA acceptance of our sNDA for the treatment of adults with IBS-C,” continued Dr. Jacob. “These achievements put Synergy on excellent footing as we look to drive further long-term growth and value for the TRULANCE brand.”
Gary Gemignani, Synergy’s EVP and Chief Financial Officer added, “We believe Synergy is well-positioned to efficiently capitalize on the substantial opportunity we have in front of us with our core, high value asset, TRULANCE. We are currently evaluating financing options that will provide flexibility and allow us to continue to execute on our business objectives, which we are confident will ultimately maximize shareholder value. We are pleased with our progress on this front and look forward to providing further updates in the near-term.”
Second Quarter 2017 and Recent Highlights
TRULANCE (plecanatide) Commercial Launch Update
Driving Awareness of TRULANCE and Stimulating Trial and Adoption
Since our launch of TRULANCE on March 20, 2017, our commercial team continues to introduce TRULANCE to more than 27,000 gastroenterologists, primary care physicians, nurse practitioners and physician assistants that represent approximately 70% of the branded prescription business. As of June 30, 2017, we had reached 66% of our targeted prescriber base and over 90% of the high volume prescribers (deciles 8-10). According to QuintilesIMS data as of June 30, 2017:
More than 12,600 TRULANCE prescriptions have been filled and total monthly prescription volume has increased on average more than 182% month-over-month during that period.
More than 32% of all high prescribers had written a TRULANCE prescription during that period with an average increase for all prescribers of approximately 140% month-over-month.
TRULANCE achieved 6.8% new-to-brand prescription (NBRx) total market share and 12% NBRx market share among gastroenterologists.
As of June 30, 2017, 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.
Ensuring Market Access
As of June 30, 2017, over 61% of adult CIC patients with commercial insurance will have unrestricted access to TRULANCE for 2017 based on the top 20 pharmacy benefit managers (PBMs) and payers. Additionally, approximately 95% of people with commercial insurance had access to TRULANCE for a co-pay of $25 or less through the TRULANCE Savings-to-Go-Program.
We have secured a 2018 managed care contract with CVS Caremark, which manages approximately 50 million commercial lives in the U.S., that will place TRULANCE on formulary without restriction (non-preferred) for its Commercial Template Clients or Employer Groups, representing approximately 24 million lives. We are in contract discussions with CVS Caremark for the remaining commercial lives.
TRULANCE is currently available through Express Scripts (ESI), which manages approximately 80 million total lives in the U.S., and this commercial formulary status will continue for the remainder of 2017. ESI recently released its 2018 National Preferred Formulary List and introduced 64 new drug exclusions, including TRULANCE. This change only affects access to the ESI National Formulary for non-custom clients, representing approximately 22 million lives, effective January 1, 2018. TRULANCE will remain available to ESI lives covered under the National Preferred Formulary via the “Non-Formulary Exception Request” prior authorization process, for which we currently have a support program in place to ensure patient access. ESI also manages a larger book of business with its Custom Clients, representing approximately 49 million lives. We are still in active discussions with ESI to determine 2018 formulary status for individual plans under their Custom Clients book of business.
We are in active contract negotiations with other PBMs and payers for 2018 coverage to ensure our goal of broad access to TRULANCE.
Med D and Medicaid discussions are ongoing and we expect several major accounts to include TRULANCE on formulary in 2018.
Sales Force Update
As planned and with the continued progress of the launch, we have initiated the process to transition our Publicis Touchpoint contract sales representatives over to Synergy in preparation of our anticipated approval of TRULANCE in the IBS-C indication this coming January.
TRULANCE IBS-C Development Update
The FDA has accepted for review our sNDA for TRULANCE for the treatment of adults with IBS-C. The Prescription Drug User Fee Act (PDUFA) date is January 24, 2018.
Financial Results
Revenues
Net sales were $2.3 million in the second quarter of 2017, pursuant to the product launch on March 20, 2017. The Company also recorded approximately $1.5 million in net deferred revenues on its balance sheet, which it expects to recognize in future periods. The Company currently recognizes revenue based on patient demand (prescription sales).
Expenses
Research and development expenses (“R&D”) were approximately $22.3 million for the second quarter of 2017 compared to approximately $26.6 million for the second quarter of 2016. This decrease was primarily due to the cost of validation batches as well as pre-commercial inventory build being classified as R&D in 2016.
Selling, general and administrative (“SG&A”) expenses were approximately $50.7 million for the second quarter of 2017 compared to approximately $10.2 million for the second quarter of 2016. These increased expenses primarily reflect the cost of marketing and promotional activities to support the product launch of TRULANCE on March 20, 2017. These costs include an approximately $23.1 million increase in marketing and sales expenses, an increase of $4.7 million in employee compensation and benefits costs, and an increase of $11.5 million in stock compensation expense ($9.3 million related to the modification of Change of Control and terminated employee stock options). There are no remaining Change of Control options outstanding as of June 30, 2017.
Cost of goods sold (COGs) were approximately $2.9 million for the second quarter of 2017. COGs for the quarter are primarily related to technical operations overhead costs.
Net interest expense was approximately $0.3 million in the second quarter of 2017, related to the $200 million convertible debt financing executed in November 2014. As of June 30, 2017, the Company had approximately $18.6 million in total debt outstanding compared to approximately $79.2 million a year ago.
Net Loss
Synergy reported a net loss of approximately $73.9 million for the three months ended June 30, 2017, compared to a net loss of approximately $38.6 million for the three months ended June 30, 2016. This increase was a result of the operating items discussed above.
Cash Position
Net cash used in operating activities were approximately $57.3 million in the second quarter of 2017 compared to approximately $63.5 million in the first quarter of 2017.
As of June 30, 2017, we had approximately $82 million cash and cash equivalents compared to approximately $82.4 million cash and cash equivalents as of December 31, 2016.
Conference Call on Thursday, September 7, 2017:
Synergy will host a conference call at 4:30 p.m. Eastern Time on Thursday, September 7, 2017 to discuss its corporate and financial strategy, and provide a general business update. The dial-in number to access the call is (877) 407-3987 (U.S. and Canada) or (412) 902-0039 (International). To access the webcast, please visit the Investors section of Synergy's website at www.synergypharma.com.
A taped replay of the conference call will also be available beginning approximately 2 hours after the call's conclusion, and will remain available through September 21, 2017. The replay may be accessed by dialing (877) 660-6853 (U.S. and Canada) or (201) 612-7415 (International) and entering conference ID number 13668774. A replay of the webcast will also be available on the Investors section of Synergy's website at www.synergypharma.com.
About Synergy Pharmaceuticals Inc.
Synergy is a biopharmaceutical company focused on the development and commercialization of novel GI therapies. The company 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. Synergy’s proprietary GI platform includes one commercial product TRULANCE and a second lead product candidate, dolcanatide. For more information, please visit www.synergypharma.com.
About TRULANCE™
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.
TRULANCE Important Safety Information
Indications and Usage
TRULANCE is a guanylate cyclase-C (GC-C) agonist indicated in adults for the treatment of chronic idiopathic constipation (CIC).
IMPORTANT SAFETY INFORMATION
WARNING: RISK OF SERIOUS DEHYDRATION IN PEDIATRIC PATIENTS
Trulance™ is contraindicated in patients less than 6 years of age; in nonclinical studies in young juvenile mice administration of a single oral dose of plecanatide caused deaths due to dehydration. Use of Trulance should be avoided in patients 6 years to less than 18 years of age. The safety and efficacy of Trulance have not been established in pediatric patients less than 18 years of age.
Contraindications
Trulance is contraindicated in patients less than 6 years of age due to the risk of serious dehydration.
Trulance is contraindicated in patients with known or suspected mechanical gastrointestinal obstruction.
Warnings and Precautions
Risk of Serious Dehydration in Pediatric Patients
Trulance is contraindicated in patients less than 6 years of age. The safety and effectiveness of Trulance in patients less than 18 years of age have not been established. In young juvenile mice (human age equivalent of approximately 1 month to less than 2 years), plecanatide increased fluid secretion as a consequence of stimulation of guanylate cyclase-C (GC-C), resulting in mortality in some mice within the first 24 hours, apparently due to dehydration. Due to increased intestinal expression of GC-C, patients less than 6 years of age may be more likely than older patients to develop severe diarrhea and its potentially serious consequences.
Use of Trulance should be avoided in patients 6 years to less than 18 years of age. Although there were no deaths in older juvenile mice, given the deaths in young mice and the lack of clinical safety and efficacy data in pediatric patients, use of Trulance should be avoided in patients 6 years to less than 18 years of age.
Diarrhea
Diarrhea was the most common adverse reaction in the two placebo-controlled clinical trials. Severe diarrhea was reported in 0.6% of patients.
If severe diarrhea occurs, the health care provider should suspend dosing and rehydrate the patient.
Adverse Reactions
In the two combined CIC clinical trials, the most common adverse reaction in Trulance-treated patients (incidence ≥2% and greater than in the placebo group) was diarrhea (5% vs 1% placebo).
Please click here for Full Prescribing Information.
Forward-Looking Statement
This press release and any statements made for and during any presentation or meeting contain forward-looking statements related to Synergy Pharmaceuticals Inc. under the safe harbor provisions of Section 21E of the Private Securities Litigation Reform Act of 1995 and are subject to risks and uncertainties that could cause actual results to differ materially from those projected. These statements may be identified by the use of forward-looking words such as "anticipate," "planned," "believe," "forecast," "estimated," "expected," and "intend," among others. There are a number of factors that could cause actual events to differ materially from those indicated by such forward-looking statements. These factors include, but are not limited to, the development, launch, introduction and commercial potential of TRULANCE; growth and opportunity, including peak sales and the potential demand for TRULANCE, as well as its potential impact on applicable markets; market size; substantial competition; our ability to continue as a going concern; our need for additional financing; uncertainties of patent protection and litigation; uncertainties of government or third party payer reimbursement; dependence upon third parties; our financial performance and results, including the risk that we are unable to manage our operating expenses or cash use for operations, or are unable to commercialize our products, within the guided ranges or otherwise as expected; and risks related to failure to obtain FDA clearances or approvals and noncompliance with FDA regulations. As with any pharmaceutical under development, there are significant risks in the development, regulatory approval and commercialization of new products. There are no guarantees that future clinical trials discussed in this press release will be completed or successful or that any product will receive regulatory approval for any indication or prove to be commercially successful. Investors should read the risk factors set forth in Synergy's most recent periodic reports filed with the Securities and Exchange Commission, including Synergy’s Form 10-K for the year ended December 31, 2016. While the list of factors presented here is considered representative, no such list should be considered to be a complete statement of all potential risks and uncertainties. Unlisted factors may present significant additional obstacles to the realization of forward-looking statements. Forward-looking statements included herein are made as of the date hereof, and Synergy does not undertake any obligation to update publicly such statements to reflect subsequent events or circumstances except as required by law.
Synergy Pharmaceuticals Inc. Tanked 14.2% in July -- but Why?
It was a quiet month for the commercial-stage biopharma, but that didn't stop its shares from tumbling.
Brian Feroldi
(TMFTypeoh)
Aug 8, 2017 at 2:58PM
What happened
Synergy Pharmaceuticals (NASDAQ:SGYP), a commercial-stage biopharma focused on gastrointestinal diseases, fell more than 14% in July, according to data from S&P Global Market Intelligence. However, there wasn't any news released during the month that could justify the double-digit fall. That's just how things go when you're in small-cap biopharma land.
So what
Synergy recently became a commercial-stage company after it won approval from the U.S. Food and Drug Administration for its drug Trulance earlier this year. Trulance was approved as a treatment for chronic idiopathic constipation (CIC), a condition that affects about 35 million Americans.
While Trulance is going after a large patient population, success depends on the drug's ability to win market share away from Linzess, a CIC treatment marketed by Ironwood Pharmaceuticals (NASDAQ:IRWD) and Allergan (NYSE:AGN). Last year sales of Linzess exceeded $625 million in the U.S., so you can bet that Ironwood and Allergan will do everything in their power to protect their drug from the competition.
Thankfully, Trulance has a few clinical advantages going for it that could still make it popular with patients and providers alike. For one, Trulance users in clinical trials reported lower rates of diarrhea, abdominal pain, flatulence, and upper-respiratory-tract infections when compared to patients who used Linzess. What's more, Trulance can be taken at any time of the day, while Linzess needs to be taken on an empty stomach before breakfast. These advantages give the drug a strong chance of winning market share.
Image source: Getty Images.
Now what
Synergy is already looking for ways to expand Trulance's labeling; it had previously submitted the drug to the FDA as a hopeful treatment of irritable bowel syndrome with constipation. That filing was recently accepted and the company expects to have a go/no-go decision in hand by Jan. 24, 2018.
Meanwhile, early indications show that Trulance is off to a good start. According to BTIG, over 800 Trulance prescriptions per week were being written as of early June. That's a faster-than-expected start, and it hints that the company could surprise on the upside when it reports its sales results for the second quarter.
On the flip side, Synergy is spending heavily to get the word out on Trulance, putting the company in a precarious financial position. As of the end of March, Synergy only reported $139 million in cash on its balance sheet. That's not a huge number compared to the $65 million that it lost in the first quarter. That hints that Synergy could be looking to tap shareholders for extra cash in the not-too-distant future.
All in all, Synergy appears to have a differentiated product that is going after a large market opportunity, but the company's financial situation is a bit too dicey for me to simply overlook. I'd suggest that potential investors wait a few quarters for more information on how Trulance is performing before they consider taking a position in this speculative stock.
What To Expect Ahead of Synergy Pharmaceuticals Inc (SGYP) 2Q Earnings; Oppenheimer’s Take
support@smarteranalyst.com (Ben Mahaney)
SmarterAnalystJuly 13, 2017
Oppenheimer analyst Derek Archila sees some short-term capital rocky waters for Synergy Pharmaceuticals Inc (NASDAQ:SGYP) and awaits more details post-Trulance launch, but continues to root for the biotech firm's lead chronic idiopathic constipation drug's prospects, reiterating an Outperform rating on the stock with a $9 price target, which represents a just under 102% increase from where the stock is currently trading. (To watch Archila's track record click here.)
Archila explains, "We do think it is imperative the company begin to hold earnings calls now that it has launched Trulance as investors will seek to get more color from management on how the launch is progressing and the managed care landscape. We believe investors continue to follow scripts very closely since the launch of Trulance (plecanatide) in late March for […] (CIC)."
When glancing at Symphony data, the analyst notes approximately 11,000 Trulance prescriptions circled in the second quarter. With Symphony notably carrying a roughly 90% prescription capture rate and taking under account gross-to-net discounts around 40%, Archila takes his prior forecast in the ballpark of $3 million to $2.6 million. Even with the forecast cut, the analyst still has more confidence than consensus expectations looking for about $2.1 million. Additionally, the analyst projects SG&A costs of close to $43 million, aligning with consensus forecasts.
Moreover, "We believe the company’s large sampling program […] continues to drive awareness and believe paid scripts should begin to accelerate later this year as physicians and patients both get more experience with the drug," opines the analyst.
Overall, "For 2Q, investors will again be looking at the company’s operating expenses, in particular the sales and marketing spend as the company likely will need to raise additional capital to support the Trulance launch sometime later this year. While we think SGYP has a variety of options to explore for additional funding, we expect the need for capital to remain an overhang for the stock in the near term," concludes Archila.
TipRanks analytics demonstrate SGYP as a Buy. Out of 6 analysts polled by TipRanks in the last 3 months, 5 are bullish on Synergy stock while 1 remains sidelined. With a return potential of 147%, the stock's consensus target price stands at $10.95.
https://finance.yahoo.com/news/expect-ahead-synergy-pharmaceuticals-inc-200712182.html
Synergy Pharmaceuticals Inc (SGYP) Trulance Poses Enticing Long-Term Uptake
[SmarterAnalyst]
support@smarteranalyst.com (Ben Mahaney)
SmarterAnalystJuly 10, 2017
Second quarter earnings for the year are due sometime around mid-August from Synergy Pharmaceuticals Inc (NASDAQ:SGYP). Yet, for Canaccord analyst John Newman, consensus projections dim in significance compared to how the launch will fare for Trulance, the firm's drug designed to treat Chronic Idiopathic Constipation (CIC). When looking at the drug's usage in new CIC patients compared against those switching to over to Trulance, results are revealing a "meaningful percentage" that indicate a stronger, more encouraging uptake down the line considering initial expectations. As such, ahead of the print, the analyst reiterates a Buy rating on shares of SGYP with a $13 price target, which represents a 190% increase from where the stock is currently trading. (To watch Newman's track record click here.)
Newman asserts, "We will focus on launch details rather than consensus for 2Q17, since we look for information on longer-term launch trends. We believe the simple, real-world reality for CIC is that Trulance does not have the diarrhea concerns of Linzess, and that Trulance can be taken with or without food."
One aspect the analyst has his eyes peeled to is competitor Ironwood's CIC drug Linzess, highly anticipating details from IRWD's second quarter call for the year that will discuss the drug's inventory changes that might reveal Trulance is bringing the heat of rivalry to the table.
Healthcare Guru Samuel Isaly Plays Two Key Biotech Stocks: Synergy, Gilead »
Moreover, retreatment results from 2014 on Linzess patients indicate to the analyst "seamless integration" for Synergy's drug, with Newman elaborating, "We believe this shows that patients who may 'switch' from Linzess to Trulance are likely to experience good efficacy, even after a treatment break. Interestingly, Linzess data actually showed that after returning to Linzess, patients showed a higher satisfaction score than before they had stopped."
"[…] Trulance differentiation on safety and ease of use will result in a successful long-term launch. We recognize that Allergan / Ironwood's Linzess is embedded in the market with strong salesforce support, but we believe that Trulance is simply easier for doctors to give and for patients to tolerate," surmises the analyst.
TipRanks analytics indicate SGYP as a Buy. Out of 6 analysts polled by TipRanks in the last 3 months, 5 are bullish on Synergy stock while 1 is bearish. With a return potential of nearly 146%, the stock's consensus target price stands at $10.95.
Healthcare Guru Samuel Isaly Plays Two Key Biotech Stocks: Synergy Pharmaceuticals Inc (SGPY), Gilead Sciences, Inc. (GILD)
[SmarterAnalyst]
support@smarteranalyst.com (Ben Mahaney)
SmarterAnalystJune 27, 2017
Sameul Isaly, founder of one of the world’s most well-known healthcare funds, has made two key moves on Synergy Pharmaceuticals Inc (NASDAQ:SGYP) and Gilead Sciences Inc (NASDAQ:GILD). Isaly is the managing partner of OrbiMed, a global management firm that has assets under management of over $13 billion. Isaly is closely tracked by investors due to his exceptional track record: at the beginning of 2016, Barron’s said he was the only US mutual fund manager to beat the S&P 500 for an incredible 25 straight years.
The fund is mainly interested in pharmaceutical and medical device companies, although it invests at all stages from seed-stage venture capital to large-cap public companies. Through its team of 80 scientific, medical, investment and other professionals the fund operates three investing strategies: public equity, private equity and royalty opportunities. At 17% of the US economy, OrbiMed says the healthcare sector is ripe for investment as its “powerful growth profile coupled with its magnitude and complexity create myriad investment opportunities.”
As for Isaly himself, he has a long track record of healthcare investment- starting from 1968 when he began working as a pharmaceutical analyst at Chase Manhattan Bank. Subsequent employers included Merrill Lynch, Legg Mason, and S. G. Warburg until he launched his own fund in 1989. He has an economics degree from Princeton and from the London School of Economics (LSE). According to Isaly, this is a time of huge change for the healthcare sector, which is experiecing rapid technological innovation, strong M&A activity, and uncertainty over President Trump’s approach to drug pricing regulation.
So given this backdrop, let’s now focus in on two key healthcare stock moves Isaly made in Q1:
Synergy Pharmaceuticals Inc
Isaly clearly believes that Synergy Pharmaceuticals has further room to grow. He ramped up OrbiMed’s holding of the stock by 16% to 21 million shares worth close to $100 million.
Good news for Isaly- Synergy has just announced that its Trulance supplemental New Drug Application has been accepted for review by the FDA for IBS-C. The approval decision date for the drug has now been set for January 24 2018.
HC Wainwright’s Ram Salvaraju has an incredibly bullish $18 price target on the stock which he says is “in anticipation of further commercial progress”. Salvaraju believes that Synergy will receive the supplemental approval for Trulance and that this can become a “market-leading” drug for IBS-C which will provide tough competition for rival drugs from Allergan and Ironwood Pharmaceuticals. Salvaraju also points out that a team of 250 Synergy reps are currently travelling around the US to educate “high prescribers” about the drug.
Synergy's CIC Drug Set To Stay In Spotlight; BTIG Weighs In »
Synergy has a moderate buy analyst consensus rating according to TipRanks. We can see that in the last three months the stock has received 5 buy ratings and 1 sell rating from Citigroup – which was now three months ago. The average analyst price target of $12.40 represents a shocking 177% upside from the current share price of $4.55.
Synergy Pharmaceuticals Inc’s (SGYP) CIC Drug Set To Stay In Spotlight; BTIG Weighs In
[SmarterAnalyst]
support@smarteranalyst.com (Ben Mahaney)
SmarterAnalystJune 26, 2017
BTIG analyst Tim Chiang was out today with a research note on drug maker Synergy Pharmaceuticals Inc (NASDAQ:SGYP), noting that SGYP’s chronic idiopathic constipation (CIC) drug Trulance continues to track ahead of his expectations for ~$21.5 million of sales in CY2017.
Chiang reiterated a Buy rating on SGYP with a price target of $11, which represents a potential upside of 138% from where the stock is currently trading.
Chiang opined, "With Trulance weekly prescriptions exceeding 1,000 per week, the product is now running ahead of our monthly forecasted projections for June. We believe we will see continued volume increases post the recent DDW meeting, which highlighted the product to more than 15,000 physicians."
Rodman & Renshaw Roots for Synergy Pharmaceuticals Ahead of Promising Commercial Trajectory for Trulance »
"For CY17, we estimate Trulance sales of ~$21.5M, which factors in a gradual initial ramp which begins to pick up steam in 2H17. We continue to believe that our longer-term peak sales estimate of ~$500M by 2022 is achievable, given the sizeable market opportunity (~40M patients in the US with chronic constipation).
We believe Synergy has an experienced GI-focused sales force detailing Trulance to over 20,000 physicians in the US. Our prescription based Trulance sales model is shown in the table below. We factor in an estimated net price per prescription of ~$250, which factors in a 30% gross-to-net discount factor," the analyst continued.
According to TipRanks.com, which measures analysts' and bloggers' success rate based on how their calls perform, analyst Tim Chiang has a yearly average return of 14.5% and a 60% success rate. Chiang has a 7% average return when recommending SGYP, and is ranked #535 out of 4592 analysts.
Out of the 7 analysts polled in the past 12 months, 6 rate Synergy Pharmaceuticals stock a Buy, while 1 rates the stock a Sell. With a return potential of 161%, the stock's consensus target price stands at $12.08.
More recent articles about SGYP:
Rodman & Renshaw Roots for Synergy Pharmaceuticals Inc. (SGYP) Ahead of Promising Commercial Trajectory for Trulance
Billionaire Israel 'Izzy' Englander Bets on Three Biotech Stocks: Valeant Pharmaceuticals Intl Inc (VRX), Gilead Sciences, Inc. (GILD), Synergy Pharmaceuticals Inc (SGYP)
Synergy Pharmaceuticals Inc (SGYP): Weekly Rx’s Hit a New High
This Analyst Sees 200% Upside for Synergy Pharmaceuticals Inc (SGYP)
Ironwood's Future Outlook And Uncertainty
Jun. 26, 2017 12:59 PM ET|
24 comments|
About: Ironwood Pharmaceuticals, Inc. (IRWD), Includes: SGYP
Life Sciences Millennial
Research analyst, biotech, healthcare, small-cap
(424 followers)
Summary
Trulance is approaching over 1,300 prescriptions per week, with 52% said to be OTC growth and 48% from ex-Linzess patients or Amitiza.
Sharp dip in U.S. Linzess sales last quarter a likely result of reactive inventory destocking due to decreased demand for Linzess.
Linaclotide CR1 data shows slight improvements in overall response, abdominal pain and a worsening effect on CSBM frequency.
Ironwood is running an all-new Phase 4 trial to study the effect of Linaclotide on abdominal girth to better understand the drugs problematic occurrences of bloating and abdominal distension.
Ironwood is running another Phase 4 trial, requested by the FDA, to assess the immunogenicity of Linaclotide, a concern first noted in the FDA's summary review of Linaclotide.
Ironwood Pharmaceuticals (NASDAQ:IRWD), a gastrointestinal focused company out of Cambridge, MA, is currently in a partnership agreement with Allergan (NYSE:AGN) for their lead drug, Linzess, where they own just less than 50% of the drug and its profits. Linzess has been a household name in chronic idiopathic constipation (CIC) and irritable bowel syndrome with constipation (IBS-C) since 2012. They quickly surpassed the market leader, Amitiza, after Linzess was proving to be more effective with less side effects. For these same reasons, Linzess could very well be surpassed by the new market leader, Trulance, which is marketed by Synergy Pharmaceuticals (NASDAQ:SGYP).
Both Linzess and Trulance treat the same two conditions, CIC and IBS-C. CIC is a condition that affects around 35 million Americans, while IBS-C is a much smaller condition that affects around 13 million Americans. The graphic below is a good indication that new entrants into this market, like Trulance, are actually growing the market and not cannibalizing it.
The most important measure seen in the above graphic is the growth of the OTC market (dark blue). It is the OTC market that is my first level of concern for Linzess. As mentioned previously, CIC and IBS-C total around 48 million Americans. A total of 95% of those 48 million Americans are not on branded therapies. This is a key fact that Synergy often states in their corporate presentations, along with Ironwood themselves, as is seen below.
Ironwood, in their corporate presentations, state that around 66% of their prescription growth is from this OTC market. Continuing, the company also mentions that 70% of patients are dissatisfied with OTC treatment. If this is the case then why is it that >95% of the market is still not on branded therapies? Linzess has been on the market for almost five years now. The answer lies in a study run by Synergy called the, BURDEN-CIC study, with results that can be found here. A key data point in the study mentions that 59% of patients are dissatisfied with Linzess and other branded therapies. This fact brings a lot of light to my opinion that Linzess users are simply on Linzess because it's the only drug available, and patients will quickly switch to another superior alternative, like Trulance.
The above graphic is already displaying significant growth for Trulance, which has only been selling since March 20th, 2017. In Week 11 (not shown), the company had just over 1,000 prescriptions filled (decrease due to the Memorial Day holiday). Prorating that number would have produced an estimated 1,256 total prescriptions. For the week ending June 16th, 2017, total prescriptions over 1,300 for the week would be very reasonable. More importantly, Synergy had stated that this impressive growth is roughly 52% OTC and 48% from ex-Linzess users. According to some analysts, this is extremely encouraging because many of them expected 10% OTC growth and 90% from ex-Linzess users. Linzess is not capturing the OTC market, and it would be the goal of Synergy to capture the OTC market and not actually grow through ex-Linzess users (although they seem to be doing both).
Evidence of Trulance's strong uptake can be seen in the above graphic. U.S. sales of Linzess experienced a sharp decline in the first quarter of 2017, which the CEO for Ironwood contributed to the "destocking of inventory". With a comment such as the destocking of inventory to come out the same quarter that Trulance entered the market means it is probably, more likely than not, a reactive destocking. Meaning, the company is expecting less of a demand for their products (Linzess). However, the strong uptake in sales for Trulance isn't the only indicator of trouble for Ironwood.
Going back to Synergy's BURDEN-CIC study, the company also stated that the reasoning for people's dissatisfaction with branded therapies is due to either efficacy or side effects.
Investors in Synergy or Ironwood likely know the differences in efficacy and side effects for these two drugs by now.
In short, Trulance is producing 5% diarrhea in CIC patients, compared with 16% in Linzess patients. For IBS-C, it's 4.3% in Trulance patients, compared to 20% in Linzess.
I would remind investors that Linzess overtook Amitiza because of less side effects and improved efficacy, something Trulance is showing over Linzess.
Ironwood has, on more than one occasion, tried to combat the obvious advantage of Trulance in this area. The company presented some perplexing charts at Digestive Disease Week ("DDW") explaining the "placebo adjusted" numbers for Trulance in comparison to Linzess. The company then ran costly Phase 3 trials for a new 72mcg dose of Linzess, which has since been approved. The company waited almost two years to report the actual data from the trial, which ended up showing worse diarrhea (19% vs. 16% originally).
More evidence of Trulance's superiority was seen when Ironwood started working on a new formulation of Linzess. Currently, Linzess is approved as an immediate release (IR) solution, but the company has developed a colonic release (CR) solution for IBS-C patients only. Data from this new formulation is producing numerically greater results in the area of abdominal pain, overall response and is actually worse than the IR solution when it comes to CSBM frequency. Data from this Phase 2b trial can be found here.
The study's primary endpoint was the overall responder endpoint, which was 38.8% for the CR solution compared to 31.8% for the IR solution. The company also stated a 56.2% improvement in abdominal pain over placebo for the CR solution, but in reality it represents only a slight improvement over the IR solution (-2.14 vs. -1.94 IR 290mcg).
Lastly, for the CSBM frequency endpoint, the company stated a 59.3% improvement over placebo for the CR solution, but the CR solution was really worse than the IR solution (1.78 vs. 2.11 IR 290mcg). Additionally, this data was just from a Phase 2b trial, and a larger Phase 3 trial is expected to be conducted, but I don't believe the data will prove to be much of an improvement, especially with a larger sample size, over the IR solution.
Another concern for Linzess is the drugs unforeseen side effects, especially with weight gain, which is something I touched on in another one of my articles. Turns out the company is running an all-new Phase 4 trial, specifically requested by the FDA, to study the effect of abdominal girth on IBS-C patients.
The study's primary endpoint is the change in abdominal girth, which will be taking into account bloating and abdominal distension. The study will also be analyzing symptom severity measures among others. Synergy already ran a study regarding bloating, and patients saw statistically significant symptom relief of bloating over placebo.
Most importantly, statistically significant results were seen after one week and continued throughout the entire 12-week treatment period. It's also important to note that Linzess' drug label has listed these associated side effects, but no such listing on Trulance's label exists, which further demonstrates Trulance's much cleaner and safer drug label, as is seen below.
And below is the same table from Linzess' label:
My last concern for Linzess is not that they still remain unprofitable after years of approval, but the future of the life sciences industry politically.
President Trump has drafted an executive order on drug prices that is seen as favorable for the drug industry. A dark cloud in the industry has been removed, and I would expect M&A activity to start picking up. Not only that, but President Trump is expected to comment on, later this year, the 10% repatriation of profits tax that he proposed. Pfizer (NYSE:PFE) currently has over $80 billion in overseas accounts, and news of this 10% tax would be a huge catalyst for the industry. Not many people have commented on this, but Synergy is a prime takeover target. Ironwood would essentially have to prepare for a 1,250+ person salesforce, like they have, overnight. That could potentially be troubling for the company.
Disclosure: I am/we are long SGYP.
I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Why This Billionaire Just Bought Gilead Sciences, Synergy, and Valeant Stock
Izzy Englander bought more shares of Gilead Sciences, Synergy, and Valeant during the first quarter. Why is the billionaire so bullish about these drug stocks?
Keith Speights
(TMFFishBiz)
Jun 20, 2017 at 3:42PM
Israel "Izzy" Englander has made plenty of smart stock picks during his career. The co-founder of the Millennium Management hedge fund is worth more than $5 billion as a result.
Englander just added to his fund's positions in three drug stocks -- Gilead Sciences (NASDAQ:GILD), Synergy Pharmaceuticals (NASDAQ:SGYP), and Valeant Pharmaceuticals (NYSE:VRX). Here's why the billionaire likely bought more shares of these three stocks that haven't performed very well so far in 2017.
Synergy Pharmaceuticals
At the end of 2016, Millennium Management held close to 1.9 million shares of Synergy Pharmaceuticals. You can add another 1.39 million shares to that count during the first quarter.
Englander obviously thinks highly of Synergy. One reason for this positive opinion could be that the billionaire likes the prospects for Synergy's gastrointestinal-disease drug Trulance.
Weekly prescription volume for Trulance in treating chronic idiopathic constipation (CIC) is steadily growing after Synergy launched the drug in March 2017. The company recently stated that over 60% of patients with commercial insurance now have unrestricted access to Trulance.
Looking ahead, Synergy could see even more impressive results with Trulance in an additional indication. The FDA is scheduled to make a decision on approval of the drug in treating irritable bowel syndrome with constipation (IBS-C) by Jan. 24, 2018.
Synergy Pharmaceuticals Inc. (SGYP) Ahead of Promising Commercial Trajectory for Trulance
[SmarterAnalyst]
support@smarteranalyst.com (Ben Mahaney)
SmarterAnalystJune 13, 2017
Last week, Synergy Pharmaceuticals Inc. (NASDAQ:SGYP) excited investors with the news that its drug Trulance, a treatment approved in the indication of Chronic Idiopathic Constipation (CIC), has a supplemental New Drug Application (sNDA) that now has received FDA approval for the treatment of constipation-predominant irritable bowel syndrome (IBS-C).
Believing commercial progress is imminent for the biotech firm, Rodman & Renshaw analyst Ram Selvaraju reiterates a Buy rating on SGYP while listing a price target of $18, which represents an upside of approximately 342% compared to where the shares last closed.
Selvaraju trusts the drug maker is walking on a "promising" commercial road, especially considering "momentum" from new prescriptions and refill rates, which he predicts will meaningfully bolster by the close of the third quarter of this year.
Additionally, the analyst mentions the departure of Kunwar Shailubhai, Synergy’s Chief Scientific Officer, who initially invented plecanatide. However, this piece of information does not seem to trouble Selvaraju’s bullish mindset, with the analyst adding, “Synergy's focus has now shifted to commercialization of plecanatide, and we do not expect the company to expend significant resources on early-stage drug discovery going forward.”
The analyst concludes, “We remain confident that Synergy should secure this key extension to the Trulance™ label in early 2018, and thereby should be able to compete on an equal footing across the board with its closest comparator, Linzess® (linaclotide), from Allergan plc (AGN; not rated) and Ironwood Pharmaceuticals (IRWD; not rated). We continue to anticipate that Trulance™ should be able to achieve a market-leading position in treatment of both chronic idiopathic constipation (CIC) and IBS-C in the coming years.”
According to TipRanks, a financial engine that measures and ranks analysts’ and bloggers’ performance, Ram Selvaraju is ranked #4495 out of #4567 analysts. Selvaraju has a 32% success rate and generates an annual yield of -8.7%. When recommending SGYP, the analyst earns a -1.7% average profit on the stock.
TipRanks analytics show SGYP as a Buy. Based on 6 analysts offering recommendations for this share, 5 issue a Buy and 1 recommends a Sell. The 12-month average price target stands at $12.40, making a nearly 205% upside from where the stock is currently trading.
Billionaire Israel ‘Izzy’ Englander Bets on Three Biotech Stocks: Valeant Pharmaceuticals Intl Inc (VRX), Gilead Sciences, Inc. (GILD), Synergy Pharmaceuticals Inc (SGYP)
support@smarteranalyst.com (Ben Mahaney)
SmarterAnalystJune 12, 2017
Israel "Izzy" Englander is a self-made man living the American dream, whose Polish parents have since seen their son carve out a small fortune for himself of a whopping $5.2 billion. An NYU graduate, this hedge fund guru kick-started Millenium Management 28 years ago, taking the firm from $35 million to now $34 billion in assets. A man who once worked along Wall Street, Englander learned the ins and outs of the financial world, managing to return 13% for Millenium seven years ago, and achieving a 6% rise one year later.
The billionaire's firm has since outperformed a great deal of its competitors. These days, in a biotech-enthusiastic first quarter, Englander has boosted shares in three top players: Valeant Pharmaceuticals Intl Inc (NYSE:VRX), Gilead Sciences, Inc (NASDAQ:GILD), and Synergy Pharmaceuticals Inc (NASDAQ:SGYP). Let's explore the guru's confidence in the biotech sector:
Over 3 Million Shares Invested in Synergy
Englander sees reason to be confident when assessing Synergy's prospects, buying 1,118,394 shares, taking his position up to 3,256,067 shares worth $15,173,000. The shares have since collected 75% of their value as of the most recent SEC filing, with a pipeline that leaves plenty of room to instill positivity in SGYP investors.
Lead candidates plecanatide (Trulance) and dolcanatide specifically could excite the bulls, as there is potential in the field of gastrointestinal (GI) disorders.
Trulance has the capacity to treat not only patients suffering from chronic idiopathic constipation (CIC) but also could aid those with irritable bowel syndrome with constipation (IBS-C), making the drug candidate doubly as compelling.
Trulance should dominate the short-term value of the stock and if the drug garners a green light in the indication of IBS-C, the shares could see a meaningful rise in value.
Just last Wednesday, the biotech firm revealed the FDA approved its filed sNDA for Trulance in IBS-C, setting a PDUFA date for January 24, 2018, marking a crucial climb on the ladder for Synergy in tapping into the IBS-C market.
Additionally, dolcanatide could prove valuable for the expansion of the firm's GI franchise, as the drug is designed to treat ulcerative colitis (UC).
While other treatments are certainly out there for tackling UC, should dolcanatide prove itself effective, SGYP could have an advantage in the market as far as safety when held against its competitors.
The cash roadway looks solid for the firm through the long-term when taking under account commercial prospects lining a profitable path for years to come. A lot will be riding on the PDUFA date, where all eyes of the biotech-verse will be focused come January.
Wall Street mirrors Englander's vote of confidence, considering TipRanks analytics exhibit SGYP as a Buy. Out of 6 analysts polled by TipRanks in the last 3 months, 5 are bullish on Synergy stock while 1 is bearish. With a return potential of 208%, the stock's consensus target price stands at $12.40.
Looks like the shorts don't want to give up just yet.
Today's Research Reports on Stocks to Watch: Synergy Pharmaceuticals
AccesswireJune 5, 2017
NEW YORK, NY / ACCESSWIRE / June 5, 2017 / Synergy Pharmaceuticals had a pretty great day this past Friday after it was found out that Cantor Fitzgerald put a price target on the company that is roughly 200% higher than current levels. Traders were enthusiastic about the firm's rating. .
RDI Initiates Coverage on:
Synergy Pharmaceuticals Inc.
https://ub.rdinvesting.com/news/?ticker=SGYP
Synergy Pharmaceuticals Inc. shares closed up 10.19% on Friday on volume tremendously higher than usual. So why the big move and all the attention?
Cantor Fitzgerald has started coverage on the company that focuses on gastrointestinal medicine. The firm has put an "overweight" rating on the company and attached an $11 price target. At this price, the upside potential is around 200%, so no wonder traders were celebrating.
According to Cantor analyst William Tanner, the FDA approval of Trulance, a once-daily tablet approved for adults with CIC (chronic idiopathic constipation) and is being evaluated for IBS-C (irritable bowel syndrome with constipation), positions the company well to bring an important new therapy to the market.
Trulance has the potential to treat gastrointestinal disorders such as CIC. Tanner has a yearly average return of 6.3% and a 49% success rate according to Tipsrank.com. BTIG Research has also said that Trulance prescriptions are north of 800 per week already, and at a pace like this may deliver on full-year forecasts for around $21 million in revenue for the tablet.
Why Synergy Pharmaceuticals Shares Are Popping 16.7% Today
An upgrade from a Wall Street research firm is boosting optimism in this small-cap biotech stock.
Todd Campbell
(TMFEBCapital)
Jun 2, 2017 at 1:03PM
What happened
Synergy Pharmaceuticals (NASDAQ:SGYP) is rallying by 16.7% at 12:30 p.m. EDT after Cantor Fitzgerald initiated coverage with an overweight rating and a $11 price target this morning.
So what
Cantor Fitzgerald's rating follows BTIG Research's note yesterday saying that Synergy Pharmaceuticals' one and only commercial drug -- Trulance -- is off to a faster launch than projected.
According to BTIG, Trulance prescriptions are north of 800 per week already, and that pace should help deliver on full-year forecasts for around $21 million in Trulance revenue.
A gold pill sits atop a pile of gold coins.
A quicker-than-hoped ramp-up in Trulance sales is welcome news to investors because Synergy Pharmaceuticals is commercializing the drug on its own, and that's expensive. In the first quarter, selling, general, and administrative expenses totaled $42 million, up from $6.4 million in the first quarter of 2016.
A faster pace of prescriptions also suggests Trulance is making inroads against AstraZeneca (NYSE:AZN) and Ironwood Pharmaceuticals' (NASDAQ:IRWD) Linzess. Both Trulance and Linzess are approved by the Food and Drug Administration for use in chronic idiopathic constipation (CIC), and in 2016, Linzess sales were $626 million in 2016, up 38% from 2015.
Now what
Trulance has only been on the market since March, but the addressable market (and Linzess sales) unquestionably suggests that there's a nine-figure opportunity associated with it. In trials, Trulance arguably delivered a better safety profile than Linzess, and that could help it become a top seller, too.
Having said that, Synergy Pharmaceuticals is a long way away from turning a profit. Last quarter, the company lost over $60 million. It wouldn't be surprising to see Trulance revenue eventually propel Synergy Pharmaceuticals into the black, but until we get a quarter or two of data under our belts, it's hard to guess when that might be. It's got $139 million in cash, but depending on its future cash burn, it's not 100% certain that it can avoid tapping equity markets in the future for more financing.
Overall, this is a high-risk small-cap biotech targeting a lucrative market opportunity. It's got some stiff competition, but Trulance has advantages that appear to be resonating with prescribers. Nevertheless, with a market cap of $816 million, this stock can only be viewed as "cheap" if we assume peak sales will be well into the hundreds of millions of dollars annually. That's possible, but it might be worth seeing how sales come in over the coming quarter or two before bidding shares up even higher.
Biotech Movers: Synergy
[TheStreet.com]
Armie Margaret Lee
TheStreet.comJune 2, 2017
Shares of Synergy Pharmaceuticals ( SGYP) rose 6.6% to $3.87 in premarket trading on Friday. StreetInsider.com on Thursday reported that Cantor Fitzgerald has started coverage of the New York firm's shares with an overweight rating and an $11 price target.
Are we finally getting a short squeeze today?
Synergy, meanwhile has been executing well on its launch of Trulance. Although commercialization of the product only began in March, early signs and commentary from management are promising. Just a few highlights from the first quarter earnings call:
• Synergy's 250-person sales force has reached over 80% of top prescribers
• 1 month into launch, Trulance has exceeded expectations in terms of both adoption and penetration statistics
• 60% of adult CIC patients with commercial insurance have unrestricted coverage for Trulance
• The U.S. patent office has issued three new patients for Trulance, the earliest of which expires in September of 2031
https://www.fool.com/investing/2017/05/29/with-ardelyxs-fall-does-synergy-now-have-a-clear-p.aspx?yptr=yahoo
With Ardelyx's Fall, Does Synergy Now Have a Clear Path to Victory?
Shares of Synergy are down, but things are looking up for this GI gem
David Liang
(Pfoolishly)
May 29, 2017 at 1:32PM
Shares of Ardelyx (NASDAQ:ARDX) are hitting a new all-time low following the results of a "positive" phase 3 trial read out earlier this month. While shares of competitor Synergy Pharmaceuticals (NASDAQ:SGYP) saw a slight increase the day of Ardelyx's announcement, Synergy has fared little better, with shares down almost to their lowest point this year.
ARDX data by YCharts
However, with the fall of Ardelyx, is this move for Synergy only temporary? As Synergy continues to execute on its rollout of Trulance, shares seem poised to move higher.
What happened with Ardelyx?
Ardelyx is a small-cap biotech focused on creating therapies for gastro-instestinal and cardiorenal indications. The company's lead compound is tenapanor, a product being progressed as treatment for irritable bowel syndrome with constipation (IBS-C) and hyperphosphatemia in patients with end-stage renal disease (ESRD).
On May 12 of this year, Ardelyx released positive phase 3 data from the first of two studies evaluating tenapanor as treatment of IBS-C. While the trial did reach its primary endpoint (IBS-C patients taking tanapanor showed a significant reduction in abdominal pain), investors were disappointed to see that 14.6% of trial participants reported adverse events related to diarrhea. Following the release of this news, shares of Ardelyx nose-dived and have yet to find a bottom.
What does this mean for Synergy Pharmaceuticals?
On the day Ardelyx released the data from its phase 3 study of tenapanor, shares of Synergy rose 11%. The reason? Synergy submitted its supplemental New Drug Application (sNDA) for its main drug Trulance to the FDA in March as treatment for IBS-C. Should Trulance receive approval (Trulance is already approved as treatment of chronic idiopathic constipation (CIC)), Trulance would compete directly with tenapanor.
More importantly, however, while the two drugs showed similar efficacy in abdominal pain reduction, Trulance displayed a much lower risk of diarrhea of between 3.2% and 5.4%, which compares well with Ardelyx's rate of 14.6%. While Ardelyx still has another phase 3 trial for tenapanor to read out, the competitive outlook for Synergy's Trulance in IBS-C looks to be significantly less risky.
What's next for Synergy and Ardelyx?
As mentioned earlier, Ardelyx is currently progressing tenapanor in another phase 3 trial as treatment for IBS-C. This trial is currently running, with data expected in the fourth quarter of 2017. In addition, the company also reported positive phase 3 data for tenapanor in hyperphosphatemia in patients with ESRD back in February. Ardelyx expects to begin a second phase 3 study for tenapanor in this indication later on this year.
Synergy, meanwhile has been executing well on its launch of Trulance. Although commercialization of the product only began in March, early signs and commentary from management are promising. Just a few highlights from the first quarter earnings call:
• Synergy's 250-person sales force has reached over 80% of top prescribers
• 1 month into launch, Trulance has exceeded expectations in terms of both adoption and penetration statistics
• 60% of adult CIC patients with commercial insurance have unrestricted coverage for Trulance
• The U.S. patent office has issued three new patients for Trulance, the earliest of which expires in September of 2031
https://www.fool.com/investing/2017/05/29/with-ardelyxs-fall-does-synergy-now-have-a-clear-p.aspx?yptr=yahoo
Synergy Pharmaceuticals Inc (SGYP) Gains Upper Hand in IBS-C Arena
Rebecca Assaraf, Editor-May 16, 2017, 11:25 AM EDT
SHARE ON:
Believing Synergy Pharmaceuticals Inc’s (NASDAQ:SGYP) odds in the IBS-C competitive arena just got better, Rodman & Renshaw analyst Ram Selvaraju reiterates a Buy rating on SGYP, listing a price target of $18, which represents an upside of nearly 353% compared to where the shares last closed.
Selvaraju remains bullish on the drug maker’s prospects as he firmly believes its candidate designed to treat constipation-predominant irritable bowel syndrome (IBS-C), Trulance is better placed than that of its rival Ardelyx’s contender. Particularly considering Ardelyx recently released “underwhelming” phase 3 data regarding its lead drug Tenapanor, the analyst is backing Synergy’s Trulance with confidence, as “another one bites the dust.”
“We believe that the pivotal data generated with tenapanor in the IBS-C indication do not seem competitive with the overall risk/benefit profiles of either Trulance™ or Linzess®. Accordingly, we believe that a potential competitive threat may have been attenuated, and continue to anticipate that Trulance™ should be able to achieve a market-leading position in treatment of both chronic idiopathic constipation (CIC) and IBS-C in the coming years,” asserts the analyst.
Selvaraju points out rival Ardelyx’s Tenapanor Phase 3 trials included a substantially smaller sample than the ones of Synergy’s Trulance, 610 versus 1000 respectively, and resulted in disappointing efficacy results. Additionally, Tenapanor’s safety profile likewise looks less promising, with increasing rates of side effects in diarrhea, growing from 1.7% to 14.6%, and nausea, reaching 2.6% compared to 1.7% previously. Bottom line, Tenapanor “seems unlikely to be competitive with Trulance™.”
Conversely, Synergy is taking off, expanding its 250 sales force reps all over the United States and training roughly 27000 high prescribers about Trulance. Trulance already has scored a green light in the indication of Chronic Idiopathic Constipation (CIC), and the drug maker shows a bright future as it is likely Trulance will also get supplemental NDA approval in IBS-C by the beginning of the year 2018.
Considering 239M fully diluted shares at a PPS of $18 in the end of the first quarter of 2018, the analyst forecasts Trulance annual sales to culminate to $2.3B in 2021 and a total valuation circling $4.3B.
As usual, we suggest taking analysts’ recommendations with a grain of salt. According to TipRanks, a financial engine that measures and ranks analysts’ and bloggers’ performance, Ram Selvaraju is ranked #4454 out of #4572 analysts. Selvaraju has a 37% success rate and generates an annual yield of -6.2%. When recommending SGYP, the analyst earns a -2.2% average profit on the stock.
TipRanks analytics show SGYP as a Buy. Based on 4 analysts offering recommendations for this stock, 3 issue a Buy and 1 recommends a Sell. The 12-month average price target stands at $13.33, making a 233% upside from where the stock is currently trading.
Buying picks up in Synergy after Ardelyx's tenapanor data; shares ahead 11%
May 12, 2017 1:14 PM ET|About: Synergy Pharmaceutical... (SGYP)|By: Douglas W. House, SA News Editor
Money flow has turned positive in Synergy Pharmaceuticals (SGYP +10.8%) albeit on modestly higher volume. Earlier today, would-be competitor Ardelyx (ARDX -36.7%) announced positive late-stage data on IBS-C candidate tenapanor but with a 14.6% rate of diarrhea, higher that Trulance's 5% (data from studies in chronic ideopathic constipation).
Oppenheimer analyst, Derek Archila, reiterated his Outperform rating
Maintains Outperform rating, price target goes to $9 (from $10).
Synergy Pharma (SGYP): Conference Datapoints Point To Increased Physician Engagement - Oppenheimer
Oppenheimer analyst, Derek Archila, reiterated his Outperform rating on shares of Synergy Pharmaceuticals (NASDAQ: SGYP) after hosting a management dinner and the company demonstrated an an impressive presence at the Digestive Disease Week conference where it highlighted the recent launch of Trulance (chronic idiopathic constipation) which they think brought significant awareness for the drug among SGYP's target physicians.
Physician checks at the conference indicated that some have started writing for Trulance and cited their need to gain more experience with the drug. Importantly, physicians were very enthusiastic about Trulance's dosing flexibility which has been core to the analyst's thesis.
Maintains Outperform rating, price target goes to $9 (from $10).
For an analyst ratings summary and ratings history on Synergy Pharmaceuticals click here. For more ratings news on Synergy Pharmaceuticals click here.
Shares of Synergy Pharmaceuticals closed at $4.14 yesterday.
https://www.streetinsider.com/Analyst+Comments/Synergy+Pharma+%28SGYP%29%3A+Conference+Datapoints+Point+To+Increased+Physician+Engagement+-+Oppenheimer/12890576.html
Synergy Scores Again: Trulance Product Meets Phase 3 Endpoints In Second Indication
[Benzinga]
Taylor Cox
BenzingaMay 9, 2017
Synergy Pharmaceuticals Inc (NASDAQ: SGYP) presented positive results from its Phase 3 study of plecanatide for the treatment of irritable bowel syndrome with constipation (IBS-C).
In two large studies, Synergy examined plecanatide, marketed as "Trulance," in both 3 mg and 6 mg doses. Both dosages met the primary endpoint, with statistical significance, of being what the U.S. Food and Drug Administration calls an "Overall Responder."
For this, Overall Responders were defined as those who experienced both at least a 30 percent reduction in abdominal pain and an increase of at least one spontaneous bowel movement over baseline, in the same week, for at least six of the 12 treatment weeks. In a pooled analysis of both studies, the 3 mg and 6 mg doses both met these endpoints.
As is common with many treatments for IBS-C and chronic idiopathic constipation (CIC, for which Trulance achieved FDA approval earlier this year), diarrhea was the most common adverse event reported. Discontinuation rates, however, were low at 1.2 percent and 1.4 percent for the 3 mg and 6 mg doses, respectively.
Earlier this week, the company reported positive trial data in CIC, with Trulance hitting its Phase 3 primary endpoint in that indication as well.
Trulance
Trulance, in IBS-C, could win FDA approval by year end, assuming a standard 10-month review period of its sNDA, filed March 27. The drug is already being marketed in CIC, with Rodman & Renshaw analyst Raghuram Sevaraju recently estimating its 2017 sales at $53.6 million.
Despite a slew of positive clinical news, Synergy stock has slumped thus far in 2017, down about 37 percent year-to-date. Some attribute this to investors disappointed that Synergy has yet to be scooped up by a larger pharma company.
Staying On Track
Back in December, Synergy Chief Strategy Officer Marino Garcia told Benzinga the company hoped to start 2017 with an FDA approval in CIC, launch Trulance, and "potentially end the year with another approval for the second indication, IBS-C."
With two out of those three boxes checked, so far so good.
The stock traded around $3.97, up 1.2 percent, at time of publication.
Synergy Presents New Insights at Digestive Disease Week (DDW) Examining Patient & Physician Perceptions & Experiences with Ch...
Date : 05/07/2017 @ 10:30AM
Source : Business Wire
Stock : Synergy Pharmaceuticals, Inc. (MM) (SGYP)
Quote : 4.0 0.01 (0.25%) @ 8:00PM
Synergy Presents New Insights at Digestive Disease Week (DDW) Examining Patient & Physician Perceptions & Experiences with Ch...
Print
Synergy Pharmaceuticals, Inc. (MM) (NASDAQ:SGYP)
Intraday Stock Chart
Today : Sunday 7 May 2017
Click Here for more Synergy Pharmaceuticals, Inc. (MM) Charts.
Results from the BURDEN-CIC Study highlight the condition’s impact and show need for additional CIC treatment options.
Synergy Pharmaceuticals Inc. (NASDAQ:SGYP) today announced new insights that highlighted the frustrations many patients with chronic idiopathic constipation (CIC) feel with managing their condition. Detailed results from the BURDEN-CIC Study (Better Understanding and Recognition of the Disconnects, Experiences and Needs of Patients with Chronic Idiopathic Constipation) were presented today at Digestive Disease Week (DDW), in Chicago. Findings are based on results from an online survey of more than 1,200 patients and 325 healthcare providers (HCPs).
Patients are significantly impacted by their CIC, but feel resigned to their condition. Surveyed patients noted their lives are significantly impacted by CIC in terms of participation in daily activities and measurable loss in productivity:
More than 40% of patients reported being frustrated with CIC and more than a third (39%) reported that they are “accepting” of their condition.
Patients report that productivity is impacted approximately five out of every 30 days each month, and personal activities are impacted about four of every 30 days of the month.
Patients feel a lack of symptom relief and treatment satisfaction. Among those surveyed, both HCPs (78%) and patients (59%) are not satisfied or not completely satisfied with current branded Rx treatment options available for the treatment of CIC:
For HCPs, inadequate response to therapy, non-compliance, and side effects were noted as the top challenges with current treatments.
For patients, efficacy and side effects were noted as two reasons for dissatisfaction with current treatment options, with 84% of patients stating his or her CIC is not fully relieved by current prescription treatments.
Both HCPs and patients said diarrhea is an unacceptable side effect with current CIC treatments:
More than one-third (34%) of HCPs indicate that managing treatment-related diarrhea is a key challenge with current prescription treatments.
More than half (54%) of patients that experienced diarrhea because of his or her prescription medication discontinued their treatment.
Approximately 82% of HCPs and 70% of patients do not agree that diarrhea is an acceptable treatment outcome.
“The BURDEN-CIC Study sheds light on the dissatisfaction and frustration many patients and HCPs experience when managing CIC, which poses a significant challenge due to its wide range of symptoms,” said Lucinda A. Harris, M.D., Mayo Clinic. “Though HCPs are acknowledging patients’ discontent, there is a clear need for HCPs and patients living with CIC to have more productive conversations about the patient’s health and treatment options.”
About the BURDEN-CIC Study
The BURDEN-CIC Study (Better Understanding and Recognition of the Disconnects, Experiences, and Needs of Patients with Chronic Idiopathic Constipation) participants consisted of more than 1,200 patients who met CIC criteria (mean age, 48 years; 70 percent of respondents were female) and completed the 45-minute, 68-question, IRB-approved online questionnaire. The study also evaluated, through a 30-minute, 32-item questionnaire, more than 325 healthcare providers who treat patients with CIC.
About Chronic Idiopathic Constipation (CIC)
CIC affects approximately 14 percent of the global population, disproportionately affecting women and older adults. People with CIC have persistent symptoms of difficult-to-pass and infrequent bowel movements. In addition to physical symptoms including abdominal bloating and discomfort, CIC can adversely affect an individual’s quality of life, including increasing stress levels and anxiety.
About Synergy Pharmaceuticals Inc.
Synergy is a biopharmaceutical company focused on the development and commercialization of novel GI therapies. The company has pioneered discovery, research and development efforts on analogs of uroguanylin, a naturally occurring and endogenous human GI peptide, for treatment of GI diseases and disorders. For more information, please visit www.synergypharma.com.
Forward-Looking Statement
Certain statements in this press release are forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. These statements may be identified by the use of forward-looking words such as "anticipate," "planned," "believe," "forecast," "estimated," "expected," and "intend," among others. These forward-looking statements are based on Synergy's current expectations and actual results could differ materially. There are a number of factors that could cause actual events to differ materially from those indicated by such forward-looking statements. These factors include, but are not limited to, substantial competition; our ability to continue as a going concern; our need for additional financing; uncertainties of patent protection and litigation; uncertainties of government or third party payer reimbursement; limited sales and marketing efforts and dependence upon third parties; and risks related to failure to obtain FDA clearances or approvals and noncompliance with FDA regulations. As with any pharmaceutical under development, there are significant risks in the development, regulatory approval and commercialization of new products. There are no guarantees that future clinical trials discussed in this press release will be completed or successful or that any product will receive regulatory approval for any indication or prove to be commercially successful. Investors should read the risk factors set forth in Synergy's Annual Report on Form 10-K for the year ended December 31, 2016 and other periodic reports filed with the Securities and Exchange Commission. While the list of factors presented here is considered representative, no such list should be considered to be a complete statement of all potential risks and uncertainties. Unlisted factors may present significant additional obstacles to the realization of forward-looking statements. Forward-looking statements included herein are made as of the date hereof, and Synergy does not undertake any obligation to update publicly such statements to reflect subsequent events or circumstances. PP-TRU-US-XXXX
View source version on businesswire.com: http://www.businesswire.com/news/home/20170507005036/en/
Synergy Pharmaceuticals Inc.
Gem Hopkins, 212-584-7610
VP, Investor Relations and Corporate Communications
ghopkins@synergypharma.com
Synergy Pharmaceuticals to Present TRULANCE™ (Plecanatide) Phase 3 Data at Digestive Disease Week (DDW) for the Treatment of Adults with Chronic Idiopathic Constipation (CIC) with Moderate to Very Severe Bloating
[Business Wire]
Business WireMay 7, 2017
NEW YORK--(BUSINESS WIRE)--
Synergy Pharmaceuticals Inc. (SGYP) announced today that the company will present new data from an analysis of patients with moderate to very severe bloating at baseline who participated in two Phase 3 studies evaluating TRULANCE™ (plecanatide) for the treatment of adults with chronic idiopathic constipation (CIC). These data were recognized by the American Gastroenterology Association (AGA) as a Poster of Distinction and will be presented at Digestive Disease Week (DDW), May 6-9, 2017, in Chicago.
TRULANCE is a once-daily tablet approved by the Food and Drug Administration (FDA) for the treatment of adults with CIC and is currently being evaluated for the treatment of adults with IBS-C. The recommended dosage of TRULANCE for CIC is 3 mg taken orally, once daily, with or without food at any time of the day.
Over 12 weeks, patients with CIC and moderate, severe or very severe bloating symptoms at baseline and were treated with TRULANCE 3 mg or 6 mg doses achieved a significantly greater efficacy responder rate—the primary endpoint defined by the FDA for regulatory approval in CIC—in this analysis compared to placebo (18.8% for 3 mg and 16.3% for 6 mg compared to 9.5% for placebo). Efficacy responders were defined as patients who had at least three complete spontaneous bowel movements (CSBMs) in a given week and an increase of at least one CSBM over baseline in the same week for at least nine weeks out of the 12-week treatment period, including at least three of the last four weeks. The symptom of bloating among these patients also showed statistically significant improvements for TRULANCE 3 mg and 6 mg compared to placebo. Improvements in abdominal bloating scores were statistically significant after one week and continued throughout the 12-week treatment period.
“People living with chronic idiopathic constipation often experience a range of symptoms that can make it more difficult to manage this disorder, including moderate to very severe bloating,” said Satish S.C. Rao, M.D., Ph.D., Professor of Medicine, Division Chief Fellowship Program Director and Director, Digestive Health Center at Augusta University. “The data presented today is consistent with the efficacy and safety results seen from previously published results for TRULANCE in CIC.”
In both studies, the most common adverse event was diarrhea (4.1% at 3 mg and 4.5% at 6 mg compared to 0.7% for placebo). Discontinuation rates were low across both groups (3.6% at 3 mg and 4.5% at 6 mg compared to 2.4% for placebo) and discontinuations due to diarrhea were infrequent (1.0% at 3 mg and 1.6% at 6 mg compared to 0.2% for placebo).
Indications and Usage
TRULANCE is a guanylate cyclase-C (GC-C) agonist indicated in adults for the treatment of chronic idiopathic constipation (CIC).
IMPORTANT SAFETY INFORMATION
WARNING: RISK OF SERIOUS DEHYDRATION IN PEDIATRIC PATIENTS
Trulance™ is contraindicated in patients less than 6 years of age; in nonclinical studies in young juvenile mice administration of a single oral dose of plecanatide caused deaths due to dehydration. Use of Trulance should be avoided in patients 6 years to less than 18 years of age. The safety and efficacy of Trulance have not been established in pediatric patients less than 18 years of age.
Contraindications
Trulance is contraindicated in patients less than 6 years of age due to the risk of serious dehydration.
Trulance is contraindicated in patients with known or suspected mechanical gastrointestinal obstruction.
Warnings and Precautions
Risk of Serious Dehydration in Pediatric Patients
Trulance is contraindicated in patients less than 6 years of age. The safety and effectiveness of Trulance in patients less than 18 years of age have not been established. In young juvenile mice (human age equivalent of approximately 1 month to less than 2 years), plecanatide increased fluid secretion as a consequence of stimulation of guanylate cyclase-C (GC-C), resulting in mortality in some mice within the first 24 hours, apparently due to dehydration. Due to increased intestinal expression of GC-C, patients less than 6 years of age may be more likely than older patients to develop severe diarrhea and its potentially serious consequences.
Use of Trulance should be avoided in patients 6 years to less than 18 years of age. Although there were no deaths in older juvenile mice, given the deaths in young mice and the lack of clinical safety and efficacy data in pediatric patients, use of Trulance should be avoided in patients 6 years to less than 18 years of age.
Diarrhea
Diarrhea was the most common adverse reaction in the two placebo-controlled clinical trials. Severe diarrhea was reported in 0.6% of patients.
If severe diarrhea occurs, the health care provider should suspend dosing and rehydrate the patient.
Adverse Reactions
In the two combined CIC clinical trials, the most common adverse reaction in Trulance-treated patients (incidence ≥2% and greater than in the placebo group) was diarrhea (5% vs 1% placebo).
Please click here for Full Prescribing Information.
About Chronic Idiopathic Constipation (CIC)
CIC affects approximately 14 percent of the global population, disproportionately affecting women and older adults. People with CIC have persistent symptoms of difficult-to-pass and infrequent bowel movements. In addition to physical symptoms including abdominal bloating and discomfort, CIC can adversely affect an individual’s quality of life, including increasing stress levels and anxiety.
About TRULANCE™
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.
About Synergy Pharmaceuticals
Synergy is a biopharmaceutical company focused on the development and commercialization of novel GI therapies. The company 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. Synergy’s proprietary GI platform includes one commercial product TRULANCE and a second lead product candidate, dolcanatide. For more information, please visit www.synergypharma.com.
Forward-Looking Statement
This press release and any statements made for and during any presentation or meeting contain forward-looking statements related to Synergy Pharmaceuticals Inc. under the safe harbor provisions of Section 21E of the Private Securities Litigation Reform Act of 1995 and are subject to risks and uncertainties that could cause actual results to differ materially from those projected. These statements may be identified by the use of forward-looking words such as "anticipate," "planned," "believe," "forecast," "estimated," "expected," and "intend," among others. There are a number of factors that could cause actual events to differ materially from those indicated by such forward-looking statements. These factors include, but are not limited to, the development, launch, introduction and commercial potential of TRULANCE; growth and opportunity, including peak sales and the potential demand for TRULANCE, as well as its potential impact on applicable markets; market size; substantial competition; our ability to continue as a going concern; our need for additional financing; uncertainties of patent protection and litigation; uncertainties of government or third party payer reimbursement; dependence upon third parties; our financial performance and results, including the risk that we are unable to manage our operating expenses or cash use for operations, or are unable to commercialize our products, within the guided ranges or otherwise as expected; and risks related to failure to obtain FDA clearances or approvals and noncompliance with FDA regulations. As with any pharmaceutical under development, there are significant risks in the development, regulatory approval and commercialization of new products. There are no guarantees that future clinical trials discussed in this press release will be completed or successful or that any product will receive regulatory approval for any indication or prove to be commercially successful. Investors should read the risk factors set forth in Synergy's most recent periodic reports filed with the Securities and Exchange Commission, including Synergy’s Form 10-K for the year ended December 31, 2016. While the list of factors presented here is considered representative, no such list should be considered to be a complete statement of all potential risks and uncertainties. Unlisted factors may present significant additional obstacles to the realization of forward-looking statements. Forward-looking statements included herein are made as of the date hereof, and Synergy does not undertake any obligation to update publicly such statements to reflect subsequent events or circumstances except as required by law.
View source version on businesswire.com: http://www.businesswire.com/news/home/20170507005038/en/
Can Synergy Pharmaceuticals Succeed On Its Own?
Apr. 24, 2017 3:26 PM ET
About: Synergy Pharmaceuticals, Inc. (SGYP)
ONeil Trader
Growth, momentum, small-cap, mid-cap
Premium
Growth Stock Forum
(3,700 followers)
Summary
Synergy is down more than 40% since Trulance's approval - the lack of a buyout may be the main culprit.
Synergy does not have to be bought for Trulance to succeed - the company seems well prepared.
Trulance's label offers clear advantages over competing products.
Synergy remains an attractive takeover target.
Synergy Pharmaceuticals (NASDAQ:SGYP) is down more than 40% since Trulance received FDA approval in January. There was no bad news except maybe the lack of news - I suspect that some investors and traders expected a buyout to occur in short order and a buyout did not happen and may not happen in the near-term or even in the medium-term. I was patient and waited for the stock to correct to a level where I was comfortable owning it without a buyout and that happened when Synergy hit $5. But the stock did not stop there and is trading close to $4 as of this writing. The small position I bought around $5 was just the beginning and added to my position just above $4 per share and intend to accumulate more in the following weeks. In this article, I take a look at recent developments and Synergy's chances of successfully executing Trulance's launch on its own.
Synergy doesn't need to be bought for Trulance to succeed
While the majority of investors think Trulance would be better off in the hands of a larger pharma company (I do too), it doesn't mean Synergy won't be successful on its own. After all, bigger isn't always better. Trulance's clinical profile should resonate among physicians and patients. The low diarrhea rates are one of the main traits that make Trulance a really attractive product relative to its branded competitors and OTC products. Allergan/Ironwood bulls are arguing that Linzess and Trulance labels are similar, but 16-20% diarrhea rates compared to around 3-5% for Trulance are anything but similar - Linzess' diarrhea rates are at least three times higher (the ranges are based on both CIC and IBS-C trials). This means that almost every fifth patient develops diarrhea on Linzess compared to every 20th (or 30th) Trulance patient. The difference should not be taken lightly. Even severe diarrhea occurred 3x less with Trulance (0.6%) than with Linzess (2%). Put yourself in that position - if you had a choice, which drug would you take?
Additionally, Trulance's label only has diarrhea among adverse events while Linzess also has abdominal pain, flatulence, upper respiratory tract infection and sinusitis. Takeda's Amitiza has even more adverse events than Linzess with nausea occurring in 17-29% of patients.
When patients take Trulance, their stool consistency goes right back to the normal based on the Bristol Stool Scale. The chart below shows that by taking Trulance, patients avoid the wild fluctuations in stool consistency.
Source: Synergy presentation
Trulance can also be taken any time of day, with or without food while Linzess needs to be taken on an empty stomach at least 30 minutes prior to the first meal of the day. Takeda's Amitiza needs to be taken twice a day with food and water.
There was also loud talk about Linzess' lower dose (72mcg) and its impact on diarrhea rates, which Ironwood and Allergan kept a secret for a long time for "competitive reasons." That "competitive reason" turned out to be the lack of lower diarrhea rates for the lower 72mcg dose (19% in the CIC trial, which is within the range of the two higher doses). I think there is no doubt about Trulance's place in the market and it's not number two (no pun intended).
Based on significantly lower diarrhea rates, stool consistency and convenience, I believe Trulance is a best-in-class product.
Based on the information Synergy provided about the launch efforts, it seems that the company is well prepared:
• The company has done extensive research with more than 2,700 healthcare providers and over 5,300 patients.
• Multiple advisory boards with national and regional GI KOLs and payers were conducted.
• The market access team had meetings with payers representing more than 230 million covered lives in the U.S.
• Synergy initiated pre-launch multi-media and digital campaigns to drive awareness and disease education, focusing on unmet needs of CIC patients.
• Co-pay card programs and other patient assistance programs are in place which should help ease the initial access hurdles for patients.
One of the things that wasn't received well is the utilization of a hybrid sales force to reach key prescribers. Regional GI account managers are in-house but Synergy is using a contract sales force. The difference here is that, unlike most contract sales arrangements, these reps are completely committed to Synergy but were hired by a contract sales organization. The company didn't disclose the number of reps but they will initially target high-volume prescribers since less than 20% of prescribers in the U.S. account for over 70% of the branded constipation prescription market. Synergy will focus on both gastroenterologists and primary care physicians and the company claims it has attracted highly experienced reps and regional managers with over 90% coming from other peer GI and PCP companies.
It should be noted that there are some significant hurdles early in the launch:
• Lack of awareness which means a considerable effort is needed to increase it.
• Coverage is very limited early in the launch and should remain patchy until early 2018 which is the time most commercial payers will put Trulance on their formularies. The company has programs to alleviate these concerns but the initial effect will be low revenues per script or script rejections at pharmacies.
• Aggressive sampling should negatively affect near-term revenues as most patients will get a 7-day supply for free.
• Competitive pressure. Takeda and Allergan have considerable commercial firepower compared to Trulance, but the positive here is that they are spreading the word and raising awareness about the high unmet need and the emerging treatment options and physicians and patients are bound to eventually find out the advantages Trulance offers.
When we put all of this into context, it is hard to expect Trulance to burst out of the gate. I usually warn about the potential for the drug launch to underperform expectations (and most of them do - around two-thirds according to market research done by McKinsey) and this launch is no different. That said, expectations for 2017 might be low enough for Synergy to match them, but I would be satisfied to see $25-30 million in sales this year which is my conservative (or what I believe is a realistic estimate for the year). The Street consensus is $31 million as of this writing. Both mine and the Street's are ballpark assumptions and estimates will probably need to be revised based on early launch metrics Synergy will provide.
In my previous article, I looked at Linzess' net sales in the first few years of the launch and provided my own estimates for Trulance - the table is shown below and is adjusted based on the launch occurring in April instead of early 2017 (I reduced the estimates by approximately 25% due to Synergy having only nine months of net sales in 2017). My expectations for Trulance are lower compared to Linzess because Linzess was approved for both CIC and IBS-C while Trulance only has CIC in its label for now. The other reason is Allergan being much stronger commercially with more feet on the ground and more capital allocated to sales and marketing. 2018 should be a breakout year for Trulance because of the substantially improved coverage, the approval in IBS-C in Q1 and the launch in that indication and the company being in a stronger financial position with growing net sales which it can plow back to sales and marketing to accelerate prescription growth. I continue to believe that Trulance has blockbuster potential, even in Synergy's hands.
Source: Ironwood earnings reports, author's estimates and calculations
Below is a chart showing how Linzess did in first eight quarters on the market. The uptake has been fairly rapid and if Trulance can generate half of what Linzess did in the first eight quarters, I would call the launch really successful.
Source: Ironwood earnings reports
Financial position strengthened with the equity offering
Synergy raised $121 million in net proceeds in early February, and the pro-forma cash position at the end of 2016 was $204 million. The company did not provide cash burn guidance for the year, but I assume it will be at least $40 million a quarter which means it has enough for at least 12 months or longer, assuming Trulance starts contributing in a more meaningful way in the meantime.
My previous price target on Synergy was $11.50 and I am adjusting it down to $9 per share based on an increased share count. It is worth mentioning again that CEO Jacob is incentivized to sell the company for at least $2 billion, which translates into at least $8-9 per share depending on how much cash Synergy has left at the time of the potential transaction. The $2 billion EV incentive was added at the end of 2016 and the previous incentives were:
- 2.5% bonus on $400 million EV - at least $10 million.
- 3.5% bonus on $1 billion-plus EV - at least $35 million.
- 4.5% bonus on $2 billion-plus EV - at least $90 million.
It is clear where the most money can be made. There are additional incentives based on joint-venture, merger and/or out-license agreements, which can be seen in the 2014 annual report.
Don't forget dolcanatide
In addition to Trulance, Synergy has another pipeline candidate, dolcanatide. The company is treating dolcanatide as a potential life-cycle growth opportunity for Trulance. Over the last three years, Synergy announced positive early stage data in ulcerative colitis and in opioid-induced constipation (NYSE:OIC). The ulcerative colitis phase 1b study showed "clear signals of improvement in dolcanatide-treated patients compared with placebo-treated patients" and that dolcanatide was well tolerated, but this was all the company shared so far.
The OIC study included 289 patients and the study met the primary endpoint of statistically significant improvement in mean change from baseline in the number of spontaneous bowel movements ((SBMs)) during week 4 of treatment period. The mean change from baseline in SBMs for the 3mg and 6mg doses of dolcanatide was 3.2 (p=0.009) and 3.4 (p=0.005) while the placebo group had a 1.8 mean change. Both doses showed a statistically significant improvement in key secondary endpoints as well - analysis of complete spontaneous bowel movement frequency (increase from baseline of 2.54, 2.39 and 1.36 for 3mg, 6mg and placebo dose groups, respectively). Dolcanatide was well-tolerated in this trial as well with the most common adverse event being diarrhea (5.4% and 9.7% for the 3mg and 6mg dose groups respectively).
But no progress with dolcanatide was made since the early 2016 ulcerative colitis data announcement. The problem here is likely funding and I doubt dolcanatide will go forward in the near-term. The development will likely start moving forward once the company is cash flow positive or when Synergy is acquired. I think dolcanatide could be a talking point during potential negotiations with acquirers and that it could add value to the transaction.
Conclusion
Not much has changed since Trulance was approved in January and yet, the stock is down from around $7 to almost $4. The fact there are no changes could be the source of investor disappointment as many were probably expecting the company to be acquired. I believe that this has created an attractive buying opportunity and I intend to continue to accumulate in the following weeks/months. The main risk to the thesis is Trulance's uptake in the following months but it is also a catalyst if the launch exceeds expectations (or even meets expectations at this point given the share price correction).
Trulance remains a very attractive asset in a very large addressable market that is growing at a rapid pace. I believe that Synergy remains an attractive takeover target and that the equity offering has strengthened the company's position at the negotiating table since it is not cash constrained anymore.
Author's note: Growth Stock Forum subscribers had an early look at this article, and have access to regular exclusive updates on every stock I am covering. Readers are invited to take a two-week free trial in the Seeking Alpha Marketplace.
Disclosure: I am/we are long SGYP.
I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Additional disclosure: This article reflects the author's personal opinion and should not be regarded as a buy or sell recommendation or investment advice in any way.
https://seekingalpha.com/article/4064689-can-synergy-pharmaceuticals-succeed?auth_param=1dumqj:1cfskba:f188d0ef902daa4e0a23d90d5315b489&uprof=38&dr=1
GI Landscape Expands With Latest Entrant Synergy Pharmaceuticals
Apr. 20, 2017 4:43 PM ET|
About: Synergy Pharmaceuticals, Inc. (SGYP), Includes: IRWD, SCMP
Summary
Synergy is attempting to enter an exclusive club via its FDA approved drug Trulance.
The company is currently going head to head against IRWD and SCMP for CIC indication market share.
Can being a best in class drug be enough to become best in revenues?
Several recent patent extensions to 2032 add undeniable value.
The prescription-based market for treating constipation and irritable bowel syndrome in the last few years has become a near duopoly for two well-known industry names, Valeant Pharmaceuticals (NASDAQ: VRX) and Ironwood Pharmaceuticals (NASDAQ: IRWD). The former with its lead GI drug Xifaxan, treating OIC and IBS-D, while the latter with its star product Linzess, treating CIC and IBS-C.
The top of this hill has potentially not only become more crowded, but we may be privy to a coronation ceremony of a new, undisputed king underway as of this very moment.
Less than three months ago, the FDA approved the first indication, Chronic Idiopathic Constipation (CIC), for Synergy's (NASDAQ: SGYP) gastrointestinal drug Trulance (Plecanatide). After a rigorous clinical process that included well over two thousand (1,346 and 1,337) test subjects in two separate Phase 3 trials and clearly defined primary/secondary end points, the conclusions are undeniable, with efficacy at 11%/9% difference to placebo for the 3mg dose, outstanding statistical significance with p-values of <.001, and tolerability (5% discontinuation rate).
It was not all too surprising to witness Wall Street create an attractive entry opportunity in the weeks since the milestone of FDA approval, which ended up not being coupled with an acquisition as many had expected, but rather with a dilution. The reality of launching a commercial drug for the first time without the resources of a more established name, which possess much larger sales forces (e.g. 1,500 for AGN/IRWD vs. 300 SGYP) along with bigger coffers, set in.
But all is not what it may seem if one were simply following the stock price (down 35.6% since peak close of $7.07 on January 31st) going into 2Q17.
When looking at the larger GI landscape, it quickly becomes evident that Trulance holds greater odds than it has been awarded thus far by the powers that be.
For one, the direct competition does not surpass, nor match, the clinical accomplishments that Synergy has found with the Plecanatide compound. For Linzess, as mentioned at the top, and even more so for Amitiza (Sucampo Pharmaceuticals (NASDAQ:SCMP)), one has to wonder how much future growth is possible with such a superior product entering the market.
Amitiza causes nausea and abdominal pains, while Linzess has clear diarrhea issues among the company of several others. A near crystal clear label for Trulance anyone? The difference is striking.
As for Valeant, they are safe as of the moment before further progress is made by Synergy on the Dolcanatide compound, which will target OIC and has so far only completed Phase 2 clinical trials (Amitiza is also approved for OIC use since 2013).
One does have to note that both IRWD and SCMP are partnered with Allergan Pharmaceuticals (NYSE:AGN) and Takeda Pharmaceuticals (OTCPK:TKPHF) respectively. Not to mention, Xifaxan was developed under Salix Pharmaceuticals, which was acquired by VRX. Although this would make Synergy appear to be the underdog, it also makes it a very attractive (and likely) takeout candidate. Even partial success going alone in the first several quarters against these titans, would not only raise eyebrows, but in all likelihood, open up some in-depth due diligence by a big pharma name that has an eye on a strong GI portfolio addition.
These early script numbers will be the biggest catalyst near term for SGYP's price and in all likelihood through mid-summer 2017, when the first full quarter of sales (Q2) will be officially announced by management.
The following chart illustrates what happened to Amitiza as Linzess entered the market back in late 2012. Prescriptions have slowed to a crawl while IRWD keeps climbing in both revenues and prescriptions, having already surpassed its competitor in year 3 (full) of sales.
(Note, IRWD did not earn revenues on Linzess until it became profitable due to its agreement with partner Allergan.)
This is the result of Amitiza not only being harsher (as demonstrated earlier) than Linzess but also due to it having to be taken twice daily vs. only once. For a lifestyle improving drug, this is a clear commercial disadvantage. While I do not believe Trulance will flatten Linzess sales immediately, a similar dynamic could reveal itself within the next 3 years.
The market cap of each of these three companies can also be used as a metric to gauge value. IRWD is currently sitting at $2.29B and SCMP much further down at $0.45B. If you were still doubting the odds for Synergy, you would be surprised to see that SGYP is already being priced favorably at $1.02B.
For a name that is as of this moment going to receive all of its future incoming revenues, maintaining worldwide rights, there is plenty of room for SGYP to run before being considered fully priced. If we were to estimate that Trulance can move $150m of product in 2018, utilizing IRWD's multiple from its 2016 Linzess revenues, we could have SGYP valued at just about $1.5B.
Below is a look at the price action since January 2016:
We see that IRWD still carries with it momentum based on continually impressive prescription numbers while SCMP seems to be falling more and more out of favor as SGYP's Trulance makes it almost impossible for Amitiza to gain any future market share.
The parallels between the launch of Linzess vs. Amitiza could be used to give an idea of what to expect in a Trulance vs. Linzess/Amitiza environment. Again, while Amitiza's short fall in lifestyle advantage is being a twice daily pill, Linzess falls short as a pill that must be taken before eating food as opposed to Trulance, which offers the unique and convenient freedom of being taken at any time. Not to mention the now extensively documented high diarrhea rates, which the older products do not fare well in by a wide margin.
It should be further noted that the GI prescription market is growing when taking into consideration how much of it exactly is up for the taking. This fact gives us even more justification for Synergy to be able to in the least match its competition's accomplishments commercially in the years ahead. A peak sales goal of $850 million for Trulance is achievable and my personal target for 2022.
If we were to consider the pitfalls of this task, it could be said that a slow rollout and limited acceptance by the physician community could put a damper on the aforementioned peak target. Limiting not only the true selling potential of Trulance, but also the odds of a favorable merger. Right now, Synergy holds an estimated sub $200m in cash ($82m reported end of Q4 plus stock sale of $120m this past January). Preparation for launch has been expensive, with nearly $200m spent in 2016 alone as the prior two years hovered around $100m. For those considering entry, this should not be overlooked as a risk to further near-term dilution.
What I am looking for going forward, is a divergence in not only price action of these three parties, but also their short interest and institutional ownership. I believe any astute investor will see where the preference will lay with both doctor and patient when deciding on the best, safest product on the market for treating this condition. (Synergy recently filed for FDA approval of the IBS-C indication of Trulance, which also had very successful clinical results, expected FDA approval).
For Sucampo and Takeda especially, the clock is ticking with a rather hurried pace on how much more can be squeezed out of Amitiza, increasing the price further will only accelerate the process of a shift away from the drug.
Management may be more than vindicated for choosing to try this venture on their own in order to secure a clear and undeniable value for the company with a proven sales performance (only helped by their recent patent extension for Trulance through 2032). There are still many doubters but the doubt should dissipate once the raw numbers point to a superior product that is not only preferential to already available alternatives on paper, but by real patients and their trusted physicians.
So far, it looks as if in fact the true value is being unlocked as the weeks go on since commercial launch. The impact of a smaller sales force could be revealed in the coming months since the product itself is clearly superior.
I am bullish on Synergy Pharmaceuticals and expect it to be looking down at its competition from the top of the GI hill sooner rather than later. My price target is $7.70 before any major announcement in regards to a potential partnership/acquisition deal.
Disclosure: I am/we are long SGYP.
I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
https://seekingalpha.com/article/4063903-going-alone-feasible-gi-market-synergy-pharmaceuticals#alt1
New finance chief at Synergy Pharma
Apr. 17, 2017 4:31 PM ET|About: Synergy Pharmaceutical... (SGYP)|By: Douglas W House, SA News Editor
Synergy Pharmaceuticals (NASDAQ:SGYP) appoints Gary Gemignani as EVP and Chief Financial Officer effective today. He succeeds Bernard Denoyer will plans to retire on July 1.
Mr. Gemignani joins the firm from Biodel where he was CEO and CFO.
Albireo Completes Transaction with Biodel to Create Publicly Traded Company
November 3, 2016 - Albireo Pharma, Inc., a clinical-stage orphan pediatric liver disease company developing novel bile acid modulators through its operating subsidiary, today announced the completion of the share exchange transaction between Biodel Inc. (NASDAQ: BIOD, through November 3) and Albireo Limited and its shareholders and noteholders, effective as of November 3, 2016. The combined organization will be called Albireo Pharma, Inc. and will commence trading on The NASDAQ Capital Market on November 4, 2016 under the symbol "ALBO."
Completion of the share exchange, together with $10 million in new capital invested prior to the closing by existing Albireo Limited investors, provides approximately $30 million to enable Albireo to advance development of its pipeline, including its lead product candidate, A4250, in development for the treatment of progressive familial intrahepatic cholestasis (PFIC). PFIC is a life-threatening orphan liver disease that affects young children.
"The completion of the share exchange is an exciting step in the evolution of Albireo as we enter the public markets with funding expected to be sufficient to progress A4250 into a planned pivotal trial in PFIC, which we anticipate starting next year," said Ron Cooper, President and Chief Executive Officer of Albireo. "We believe A4250 has the potential to become a much needed, nonsurgical treatment option for children suffering from PFIC or other rare cholestatic liver diseases."
On November 3, 2016, prior to the closing of the share exchange, Biodel completed a one-for-thirty reverse stock split. As a result of the reverse stock split, every 30 shares of Biodel common stock outstanding immediately prior to the share exchange was combined and reclassified into one share of Biodel common stock. No fractional shares are being issued in connection with the reverse stock split. Instead of fractional shares, cash will be issued based on the closing price of Biodel common stock on The NASDAQ Capital Market on November 2, 2016.
The holders of ordinary shares of Albireo Limited immediately prior to the share exchange received 0.06999 shares of Biodel common stock in exchange for each ordinary share. This exchange ratio reflects the reverse stock split. Following the reverse stock split and the share exchange, Albireo has approximately 6,294,725 shares outstanding.
Synergy Pharmaceuticals Announces Issuance of Three New Patents Expected to Extend TRULANCE(TM) (Plecanatide) Patent Protection Until 2032
8:00 AM ET 4/12/17 | BusinessWire
Synergy Pharmaceuticals Inc. (NASDAQ:SGYP) today announced that the United States Patent and Trademark Office (USPTO) has issued three new patents covering TRULANCE (plecanatide). The first patent relates to the method for manufacturing TRULANCE and will expire March 1, 2032. The two other patents relate to formulations and methods of using TRULANCE for treating chronic idiopathic constipation (CIC) and irritable bowel syndrome with constipation (IBS-C) at 3mg or 6 mg dose; both of these patents will expire September 15, 2031.
"We are very pleased these additional patents were allowed and issued as they are a significant addition to the TRULANCE patent portfolio, providing extended exclusivity protection for TRULANCE", said Dr. Gary S. Jacob, Chairman and Chief Executive Officer of Synergy Pharmaceuticals Inc. "This marks an important step in our ongoing efforts to optimize the value of TRULANCE."
TRULANCE is a once-daily tablet approved by the Food and Drug Administration (FDA) for the treatment of adults with CIC and is currently being evaluated for the treatment of adults with IBS-C. The company began marketing TRULANCE in the U.S. for adults with CIC on March 20, 2017. The recommended dosage of TRULANCE is 3 mg taken orally, once daily, with or without food at any time of the day.
On March 24, 2017, the company submitted a supplemental New Drug Application (sNDA) for TRULANCE for the treatment of adults with IBS-C.
Synergy Pharmaceuticals Submits Supplemental New Drug Application (sNDA) for TRULANCE™ (Plecanatide) for the Treatment of Adults with Irritable Bowel Syndrome with Constipation (IBS-C)
Business WireMarch 27, 2017
NEW YORK--(BUSINESS WIRE)--
Synergy Pharmaceuticals Inc. (SGYP) announced today that the company has submitted a supplemental New Drug Application (sNDA) for TRULANCE™ (plecanatide) for the treatment of adults with irritable bowel syndrome with constipation (IBS-C).
On January 19, 2017, TRULANCE was approved in the United States for the treatment of adults with chronic idiopathic constipation (CIC) and is now available in U.S. pharmacies. The recommended dosage of TRULANCE is 3 mg taken orally, once daily, with or without food at any time of the day.
“Following the successful launch of TRULANCE in CIC, the submission of this supplemental application marks another important milestone for Synergy in our ongoing quest to bring new treatments that address significant unmet medical needs to patients living with GI disorders,” said Gary S. Jacob, Ph.D., Chairman and CEO, Synergy Pharmaceuticals Inc. “We are sincerely grateful to the patients and researchers in these studies as well as our clinical and regulatory teams for their tireless efforts in bringing us one step closer to providing a new treatment for this condition. If approved, we believe TRULANCE will provide an additional, much-needed, new treatment option for people with IBS-C.”
The application is based on data from two randomized, 12-week, double-blind, placebo-controlled Phase 3 studies evaluating the efficacy and safety of TRULANCE for the treatment of adults with IBS-C. Across the two trials, more than 2,100 patients received a once-daily tablet of TRULANCE (3 mg or 6 mg doses) or placebo.
Synergy announced positive results from the two Phase 3 trials of TRULANCE in adults with IBS-C in December 2016. In both trials, TRULANCE 3 mg and 6 mg doses met the primary endpoint showing statistical significance in the percentage of patients who were Overall Responders compared to placebo during the 12-week treatment period. (Study 1: 21.5% in 3 mg and 24.0% in 6 mg dose groups compared to 14.2% in placebo; p=0.009 for 3 mg and p<0.001 for 6 mg; Study 2: 30.2% in 3 mg and 29.5% in 6 mg dose groups compared to 17.8% in placebo; p<0.001 for 3 mg and p<0.001 for 6 mg). An Overall Responder, as currently defined by the U.S. Food and Drug Administration (FDA), is a patient who fulfills both ≥ 30% reduction in worst abdominal pain and an increase of ≥ 1 complete spontaneous bowel movement (CSBM) from baseline, in the same week, for at least 50% of the 12 treatment weeks. This is the current primary endpoint required for FDA approval in IBS-C.
In both studies, the most common adverse event was diarrhea (Study 1 = 3.2% at 3 mg and 3.7% at 6 mg compared to 1.3% at placebo; Study 2 = 5.4% at 3 mg and 4.3% at 6 mg compared to 0.6% at placebo).
The company plans to present additional Phase 3 data from the two IBS-C trials at upcoming scientific meetings later this year.
Indications and Usage
TRULANCE is a guanylate cyclase-C (GC-C) agonist indicated in adults for the treatment of chronic idiopathic constipation (CIC).
IMPORTANT SAFETY INFORMATION
WARNING: RISK OF SERIOUS DEHYDRATION IN PEDIATRIC PATIENTS
Trulance™ is contraindicated in patients less than 6 years of age; in nonclinical studies in young juvenile mice administration of a single oral dose of plecanatide caused deaths due to dehydration. Use of Trulance should be avoided in patients 6 years to less than 18 years of age. The safety and efficacy of Trulance have not been established in pediatric patients less than 18 years of age.
Contraindications
Trulance is contraindicated in patients less than 6 years of age due to the risk of serious dehydration.
Trulance is contraindicated in patients with known or suspected mechanical gastrointestinal obstruction.
Warnings and Precautions
Risk of Serious Dehydration in Pediatric Patients
Trulance is contraindicated in patients less than 6 years of age. The safety and effectiveness of Trulance in patients less than 18 years of age have not been established. In young juvenile mice (human age equivalent of approximately 1 month to less than 2 years), plecanatide increased fluid secretion as a consequence of stimulation of guanylate cyclase-C (GC-C), resulting in mortality in some mice within the first 24 hours, apparently due to dehydration. Due to increased intestinal expression of GC-C, patients less than 6 years of age may be more likely than older patients to develop severe diarrhea and its potentially serious consequences.
Use of Trulance should be avoided in patients 6 years to less than 18 years of age. Although there were no deaths in older juvenile mice, given the deaths in young mice and the lack of clinical safety and efficacy data in pediatric patients, use of Trulance should be avoided in patients 6 years to less than 18 years of age.
Diarrhea
Diarrhea was the most common adverse reaction in the two placebo-controlled clinical trials. Severe diarrhea was reported in 0.6% of patients.
If severe diarrhea occurs, the health care provider should suspend dosing and rehydrate the patient.
Adverse Reactions
In the two combined CIC clinical trials, the most common adverse reaction in Trulance-treated patients (incidence ≥2% than in the placebo group) was diarrhea (5% vs 1% placebo).
Please click here for Full Prescribing Information.
About TRULANCE™
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.
About Irritable Bowel Syndrome with Constipation (IBS-C)
Irritable bowel syndrome (IBS) is a chronic gastrointestinal disorder characterized by recurrent abdominal pain and associated with two or more of the following: related to defecation, associated with a change in the frequency of stool, or associated with a change in the form (appearance) of the stool. IBS can be subtyped by the predominant stool form: constipation (IBS-C), diarrhea (IBS-D) or mixed (IBS-M). Those within the IBS-C subtype experience hard or lumpy stools more than 25 percent of the time they defecate, and loose or watery stools less than 25 percent of the time. It is estimated that the prevalence of IBS-C in the U.S. adult population is approximately 4 to 5 percent, although this number can vary as patients may fluctuate between the three subtypes of IBS.
About Synergy Pharmaceuticals
Synergy is a biopharmaceutical company focused on the development and commercialization of novel GI therapies. The company 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. Synergy’s proprietary uroguanylin analog platform includes one commercial product TRULANCE and a second lead product candidate, dolcanatide. For more information, please visit www.synergypharma.com.
Forward-Looking Statement
This press release and any statements made for and during any presentation or meeting contain forward-looking statements related to Synergy Pharmaceuticals Inc. under the safe harbor provisions of Section 21E of the Private Securities Litigation Reform Act of 1995 and are subject to risks and uncertainties that could cause actual results to differ materially from those projected. These statements may be identified by the use of forward-looking words such as "anticipate," "planned," "believe," "forecast," "estimated," "expected," and "intend," among others. There are a number of factors that could cause actual events to differ materially from those indicated by such forward-looking statements. These factors include, but are not limited to, the development, launch, introduction and commercial potential of TRULANCE; growth and opportunity, including peak sales and the potential demand for TRULANCE, as well as its potential impact on applicable markets; market size; substantial competition; our ability to continue as a going concern; our need for additional financing; uncertainties of patent protection and litigation; uncertainties of government or third party payer reimbursement; dependence upon third parties; our financial performance and results, including the risk that we are unable to manage our operating expenses or cash use for operations, or are unable to commercialize our products, within the guided ranges or otherwise as expected; and risks related to failure to obtain FDA clearances or approvals and noncompliance with FDA regulations. As with any pharmaceutical under development, there are significant risks in the development, regulatory approval and commercialization of new products. There are no guarantees that future clinical trials discussed in this press release will be completed or successful or that any product will receive regulatory approval for any indication or prove to be commercially successful. Investors should read the risk factors set forth in Synergy's most recent periodic reports filed with the Securities and Exchange Commission, including Synergy’s Form 10-K for the year ended December 31, 2016. While the list of factors presented here is considered representative, no such list should be considered to be a complete statement of all potential risks and uncertainties. Unlisted factors may present significant additional obstacles to the realization of forward-looking statements. Forward-looking statements included herein are made as of the date hereof, and Synergy does not undertake any obligation to update publicly such html statements to reflect subsequent events or circumstances except as required by law
http://finance.yahoo.com/news/synergy-pharmaceuticals-submits-supplemental-drug-120000657..
Synergy Pharmaceuticals: Approval, Now What?
Is Synergy a buy on the post-approval dip?
David Liang
(Pfoolishly)
Mar 13, 2017 at 9:29AM
Shares of Synergy Pharmaceuticals (NASDAQ:SGYP) are up more than 100% from their 2016 lows, and the company finally received FDA approval of its drug Trulance (plecanatide) in January of this year. However, since the drug's approval, the stock has traded down over 20% due to a combination equity raise as well as a classic "buy the rumor, sell the news" market reaction. Here's why the investors that are selling the stock off are wrong.
What's happened so far
Synergy's only commercial product is the aforementioned Trulance (plecanatide), a once-daily oral treatment for Chronic Idiopathic Constipation. While CIC may sound like an unfamiliar indication, the market for this disorder is huge. As many as 35 million Americans suffer from CIC. Currently, the most common form of treatment for this condition comes in the form of Linzess, a product developed and commercialized by Ironwood Pharmaceuticals (NASDAQ:IRWD) and Allergan (NYSE:AGN).
While trials of Trulance in CIC reported similar efficacy to Linzess, Trulance is far from an also-ran, as it offers several substantive advantages over the current standard of care. Most notably, Trulance users reported diarrhea (the most common adverse event) less frequently -- specifically at rates of 5% versus Linzess' 16%. In addition, Trulance was also associated with lower rates of abdominal pain, flatulence, and upper respiratory tract infection. And finally, Linzess must be taken on an empty stomach before the first meal of the day while Trulance is good for ingestion at any time. Overall, these benefits should mean that Trulance will have a sustainable advantage over Linzess within the CIC market.
The state of the market
In terms of overall sales, the branded prescription CIC market is both large and growing. In fact, the value of the prescription constipation market has almost doubled from 2013 to 2015 from $642 million to over $1.2 billion. Just as a point of comparison, for full-year 2016, Ironwood reported total sales of Linzess at $626 million, up 38% year-over-year. Ironwood management has guided for total sales of Linzess to exceed $1 billion by 2020. So, it seems to be entirely possible for multiple drugs to successfully compete and expand within this one indication.
What's next
In terms of pipeline, Synergy has also completed two phase 3 trials of Trulance in irritable bowel syndrome with constipation (IBS-C). In both of these studies, Trulance met its primary endpoint of percentage of patients classified as overall responders versus placebo. Synergy management has announced that they plan to file an sNDA for Trulance in IBS-C later on this quarter.
At the beginning of February, Synergy announced the pricing of a secondary round of equity raising in anticipation of the commercial launch of Trulance. While the stock dropped as a result of this news, the underwriting yielded net proceeds of $122 million, and this is after the company ended 2016 with $82 million in cash and equivalents. While it is unknown what exactly Synergy's cash burn rate will be upon commercializing Trulance, analysts have pegged the number somewhere around $30 million per quarter. Current cash levels should be enough for the company to make it until at least mid-year 2018.
While rumors were circulating that Synergy would be an appetizing takeout candidate for such firms as Allergan or Takeda (and this is certainly still a possibility), these options seem less likely after the equity raise. For myself, I believe there is a large opportunity for Synergy to go it alone. While Synergy is still a small-cap biotech, the fact that they already have an approved product set to launch and a large market opportunity make this one of the less-risky small cap biotech plays available. For the long-term investor, I'd say Synergy is a buy.
David Liang owns shares of Synergy Pharmaceuticals. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
As I said earlier NOTHING GOES STRAIGHT UP OR DOWN.
Was looking for a pop. Got it.
Nothing goes straight up or straight down. Stock is way over sold right now. Looking for bump. JMO
1969 alumnus’ journey to CEO of Synergy Pharmaceuticals, FDA-approved drug TRULANCE starts with UMSL chemistry degree
Feb/20/2017 | POSTED BY Marisol Ramirez
Synergy Pharmaceuticals Inc. is a biotechnology company that UMSL chemistry alumnus Gary Jacob co-founded in 2001. It recently celebrated the FDA approval of its flagship drug plecanatide, branded as TRULANCETM, which alleviates the symptoms of chronic idiopathic constipation. (Photos by Synergy Pharmaceuticals)
Gary Jacob, like any good St. Louisan, remembers walks in Forest Park on Saturdays and sledding down Art Hill in the winter as a young boy.
His parents, immigrants of German and Jewish descent, arrived in the U.S. via Ellis Island, subsequently marrying and settling down in St. Louis in the early 1940s, where they raised their family near Forest Park and DeBaliviere Avenue. Gary went to Hamilton Elementary School and then University City High School before coming to the University of Missouri–St. Louis in 1966 for his bachelor’s degree in chemistry.
Gary Jacob became chairman and CEO of Synergy Pharmaceuticals Inc. in 2003, just two years after helping found the biotechnology company. He had previously worked at Monsanto/G.D. Searle as a research scientist. Gary said he never would have imagined the career he would have. “The key is to be willing to take chances in life and embrace change,” he said.
Now the chairman and CEO of Synergy Pharmaceuticals Inc., a public Nasdaq Stock Market-listed biotechnology company, Gary never would have dreamed of the path on which his UMSL chemistry degree would set him. He also would have never imagined one day being part of the development of a cutting-edge drug.
“I think very few people have a clear vision of what they ultimately want to achieve in their careers,” Gary says. “The key is to be willing to take chances in life and embrace change.”
That’s something Gary most certainly did, starting with taking a chance on UMSL back when the university was merely three years old. He recalls the old country club serving as a small student union and library, classes being held in rental spaces in local buildings and how excited students were for the opening of the first university-constructed building – Benton Hall.
“The size of the university was minuscule compared to present-day standards,” Gary said. “But what stood out for us, and is something I believe has been carried through to this day, was the very personal relationship students had with faculty members.”
Those included, for Gary, his mentor during his undergraduate years and first Department of Chemistry Chair Charles Armbruster, who he called the “master builder” of the science faculty. He also credits chemistry Professor Lawrence Barton as a great influence during those years.
“We were a very small and young class back in 1966, being trained by a very young faculty that was extremely personal and energetic,” Gary said.
After graduating from UMSL in 1969, Gary went on to receive his PhD in biochemistry at the University of Wisconsin–Madison. He then completed his postdoctoral studies in biophysical sciences at IBM in New York before he accepted a position as a research scientist at Monsanto.
The opportunity for him to move into drug discovery and pharmaceutical sciences came in 1985 with Monsanto’s acquisition of G.D. Searle, a mid-sized pharmaceutical company headquartered in Chicago, Illinois. In 1986, Gary took on a unique assignment as company head of a G.D. Searle/Oxford University discovery research program focused on the emerging field of glycobiology. During the four-year stint at Oxford University in England, he led a G.D. Searle research team of scientists from the United Kingdom and other parts of Europe in the development of an experimental drug that was evaluated in clinical trials to treat HIV.
“That was a revolutionary time for the field of biotechnology and drug discovery in Big Pharma, as the advent of recombinant DNA technology, followed by the sequencing of the human genome in the 1990s, was revolutionizing those industries,” Gary said.
For awhile, Gary returned to Monsanto/G.D. Searle in St. Louis, where the focus was on development of the future blockbuster drug Celebrex. But by 2000, Gary found himself ready to take on his next career challenge. He decided to leave Monsanto/G.D. Searle for an opportunity to lead a small biotechnology company’s research program as chief scientific officer.
“I was eager to have more control over the drug discovery and development side of the business,” he said.
That small private company, backed by venture capital, decided to focus on an area of cancer discovery and renamed itself Synergy Pharmaceuticals in 2001. Gary became CEO in 2003, and the company went public in the summer of 2008. By December of 2011, Synergy Pharmaceuticals was listed on the Nasdaq.
This past month, Synergy Pharmaceuticals’ flagship drug plecanatide, branded as TRULANCETM, received approval from the U.S. Food and Drug Administration for the treatment of adults with chronic idiopathic constipation.
Moreover, the company is planning to file a supplemental new drug application with the FDA to cover an additional gastrointestinal disorder called irritable bowel syndrome with constipation. About 40 million people in the U.S. suffer from CIC and IBS-C. There is no cure for these GI disorders.
But one might ask, how did Gary and his team move from researching cancer to developing a drug to treat GI disorders?
There again is an example of Gary following the twists and turns of life. The Synergy team had been particularly focused for a number of years on a GI peptide called uroguanylin that plays a key role in fluid transport in the small intestine and inflammation in the bowel. In collaboration with his Chief Scientific Officer Kunwar Shailubhai, Gary developed plecanatide, a compound with similar structure and functions to uroguanylin.
“Dr. Shailubhai had earlier demonstrated that when uroguanylin is down-regulated in polyps and colorectal cancer tissue, people are at greater risk of developing colon cancer,” Gary said.
“However, developing an agent that prevents colon cancer, typically referred to as a prophylactic agent, is not something that a small biotech company is capable of tackling,” Gary continued. “It can take tens of thousands of patients and many years of clinical trials to prove an agent can reduce the chance of developing colon cancer and market it for that purpose. So we morphed our goal. FDA approval of plecanatide for a therapeutic target could happen much quicker and was a more attractive approach for a small biotech company.”
He and his team decided to develop plecanatide to treat the GI disorders CIC and IBS-C, which, in itself, is a tall order. Clinical trials have involved thousands of patients, lasting more than seven years. And since Synergy went public in 2008, Gary has raised more than $650 million in capital to advance the plecanatide drug development program.
The approval of plecanatide, with the brand name TRULANCETM, was announced by the FDA on January 19 – “which was doubly significant for me,” Gary noted, “as it happens to be my wife Kathy’s birthday!”
And while the CEO in Gary celebrated the success of the FDA approval, the humanitarian chemist in him was overwhelmed by what his work means for everyday people.
“The business I’m in really matters to people,” Gary said. “That’s what is really rewarding – that the work you do can directly benefit people.”
Gary and his wife Kathy live full time in Manhattan now, although he returns to campus regularly to serve on the Chancellor’s Council at UMSL.
“I can’t tell you how awed I am by the changes to the campus in the years since I was an undergraduate,” he said.
But embracing change and seeing it as opportunity for bettering the world is nothing new to Gary.
http://blogs.umsl.edu/news/2017/02/20/gary-jacob/