Synergy Pharmaceuticals Inc fka SGYPQ

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Misinformed Synergy Investors, Bashers And Analysts
Jan. 20, 2017 12:32 PM ET|Includes:Synergy Pharmaceuticals, Inc. (SGYP)

Synergy Pharmaceuticals (NASDAQ: SGYP) has just gained FDA approval for their superior drug, Trulance. Unfortunately, the stock is down heavily on the news, and it seems there is a lot of misinformation surrounding just about everything.

The major issue I have is from an article released by Jim Cramer's, "The Street". It should be noted that Allergan (NYSE: AGN) is in Jim Cramer's charitable trust fund. Allergan owns more than 50% of Linzess. In the article, it mentions that JP Morgan Analyst, Anupam Rama, who says, "A key difference is that the current CIC label does not account for pain symptoms, while Linzess' label does". You can find that article here:

https://www.thestreet.com/story/13960531/2/synergy-pharmaceuticals-secures-approval-for-linzess-competitor.html

The quote from the JP Morgan analyst is a prime example of the misinformation being spread. The only reason that the Linzess label talks about pain symptoms is because it is also approved for irritable bowel syndrome with constipation (IBS-C). Pain is associated with IBS-C and not chronic idiopathic constipation (CIC). JP Morgan should expect more from their "analysts". Synergy plans to file a sNDA for the IBS-C indication soon. Approval for IBS-C would be expected in early 2018.

The Street article also mentions that the labels for Linzess and Trulance are the same. The article goes on and notes the side effect of "severe diarrhea" for Trulance. Diarrhea is a side effect for every gastrointestinal drug known to man. Severe diarrhea was seen in 2% of Linzess patients and 0.6% of Trulance patients. See below an image of the differences between these labels:

Other differences between the labels involve taking the medication. One can't crush and swallow Linzess, but patients can crush Trulance and take with apple sauce if they're unable to take medication by swallowing the pill whole. Linzess must be taken on an empty stomach with your first meal coming 30 minutes after taking Linzess. Trulance can be taken at any time of day and with or without food. Linzess also has a strong warning for pregnant patients, while Trulance does not. To call these two labels the same is almost comical.

Investors are also concerned with the fact that Synergy needs to raise cash. It is most advantageous to do a raise when the share price is high. Right now, the share price is not high. An at-the-market, or ATM offering, wouldn't make sense now because a higher share price means more money can be raised. This company, led by the Gabriele Cerrone team of co-Founders, was built to be sold from day one. Gary Jacob, the CEO of Synergy, just adjusted his bonus if the company were to be sold for greater than $2 billion. Even if the company isn't sold I trust the commercial plan for Synergy. Synergy has hired top talent from Shire, Allergan, Pfizer and Salix. Salix was a GI powerhouse and Synergy has those same aspirations. Also, no analyst has ever taken into account the number of patients who would leave Linzess for Trulance. Patients are not happy on Linzess. To close, who's to say Synergy won't attack the OTC market?

Stocks: SGYP

http://seekingalpha.com/instablog/41800456-andydufresne/4951897-misinformed-synergy-investors-bashers-analysts