Synergy Pharmaceuticals Inc fka SGYPQ

[Snackman]

Synergy Pharmaceuticals Inc (NASDAQ:SGYP): Is Breakeven Near?
[Simply Wall St.]
Victor Youngblood

Simply Wall St.March 23, 2018

Synergy Pharmaceuticals Inc’s (NASDAQ:SGYP): Synergy Pharmaceuticals Inc., a biopharmaceutical company, focuses on the development and commercialization of novel therapies to treat gastrointestinal diseases and disorders. On 31 December 2017, the US$488.39M market-cap posted a loss of -US$224.34M for its most recent financial year.

Many investors are wondering the rate at which SGYP will turn a profit, with the big question being “when will the company breakeven?” I’ve put together a brief outline of industry analyst expectations for SGYP, its year of breakeven and its implied growth rate.

Check out our latest analysis for Synergy Pharmaceuticals

Expectation from analysts is SGYP is on the verge of breakeven. They anticipate the company to incur a final loss in 2019, before generating positive profits of US$93.08M in 2020. SGYP is therefore projected to breakeven around 2 years from today.

How fast will SGYP have to grow each year in order to reach the breakeven point by 2020? Working backwards from analyst estimates, it turns out that they expect the company to grow 68.67% year-on-year, on average, which signals high confidence from analysts.

Should the business grow at a slower rate, it will become profitable at a later date than expected.

NasdaqGS:SGYP Past Future Earnings Mar 23rd 18

Given this is a high-level overview, I won’t go into detail the detail of SGYP’s upcoming projects, but, bear in mind that typically biotechs, depending on the stage of product development, have irregular periods of cash flow.

This means, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.

One thing I would like to bring into light with SGYP is it currently has negative equity on its balance sheet. This can sometimes arise from accounting methods used to deal with accumulated losses from prior years, which are viewed as liabilities carried forward until it cancels out in the future. Oftentimes, losses exist only on paper but other times, it can be a red flag.

Next Steps:

There are key fundamentals of SGYP which are not covered in this article, but I must stress again that this is merely a basic overview.

For a more comprehensive look at SGYP, take a look at SGYP’s company page on Simply Wall St. I’ve also compiled a list of important aspects you should further examine:

Valuation: What is SGYP worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether SGYP is currently mispriced by the market.

Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Synergy Pharmaceuticals’s board and the CEO’s back ground.