Shares of Synergy Pharmaceuticals (NASDAQ:SGYP) were 5.5% higher Friday midday as rumors recirculate that the biopharmaceutical company is in talks with advisers to explore the potential sale of the company. Synergy’s most advanced experimental drug is plecanatide, which is used to treat irritable bowel syndrome. In late March, Bloomberg reported a sale of the New York-based company is likely to hinge on the results of a late-stage trial of the drug, which may be announced in May. SGYP trades near the low end of the 52-week range of $2.50 – $10.15.
The stock is up 5.54% or $0.16 after the news, hitting $3.05 per share. About 8.39M shares traded hands or 190.31% up from the average. Synergy Pharmaceuticals Inc (NASDAQ:SGYP) has declined 57.62% since September 1, 2015 and is downtrending. It has underperformed by 64.32% the S&P500.
Synergy Pharmaceuticals Inc., a biopharmaceutical company, focuses on the development and commercialization of novel therapies to treat gastrointestinal diseases and disorders. Its lead product candidates include plecanatide, a novel uroguanylin analog that is in phase III clinical trials for the treatment of chronic idiopathic constipation and irritable bowel syndrome with constipation; and dolcanatide to treat ulcerative colitis. The company has a research collaboration agreement with BIND Therapeutics, Inc. to develop ACCURINS for treatment of a range of cells with novel therapeutic payloads. Synergy Pharmaceuticals Inc. is headquartered in New York, New York.
Allergan (NYSE: AGN) is in advanced talks to acquire Synergy Pharmaceuticals (Nasdaq: SGYP), according to a source claiming to have knowledge of the situation. The two sides could announce a deal as soon as next week.
Previously the source informed StreetInsider.com that Synergy was considering a sale, but timing of a potential takeover was not made known. Shire (Nasdaq: SHPG) had also been rumored to be a potential bidder.
CEO Gary S. Jacobs is set to receive a parting bonus of close to $100M should Synergy be sold for $2.8B.
Shire Plc of Dublin, Ireland, is daily interacting with high prescribing gastroenterologists that could turn plecanatide into a worldwide blockbuster.
Is Troy Hamilton's arrival from Shire as Chief Commercial Officer a Trojan Horse maneuver secretly designed to ready Shire's sales force for plecanatide distribution?
In 3 years of biotech blogging, this is my first and, perhaps, last musing on a buyout scenario.
I've never been one to speculate on the sale of Synergy Pharmaceuticals (NASDAQ:SGYP), or any other biotech for that matter, though I have been one to discourage it. Buyout rumors are a staple of those attempting to manipulate the price of a stock upwards. Go to the Yahoo message board of any biotechnology enterprise and you'll readily happen upon persuasive posts implying that such an eventuality is as predetermined as it is imminent.
Where Synergy is concerned, however, there is more of a reason, perhaps, to entertain such a notion.
Synergy's lead compound, plecanatide, is wholly owned and recently displayed best in class efficacy with reduced side effects in the treatment of chronic idiopathic constipation. Plecanatide could go to market in early 2017. Constipation relief is a growing treatment space with newly established and, therefore, vulnerable competitors. Synergy's CEO and CSO are respectively set to receive 3.5% and 1.17% multiples of the enterprise value in any buyout scenario as a bonus. Biotechs with a gastroenterology focus have been the splashy targets of recent big pharma acquisitions. In an all-cash deal earlier this year, Valeant Pharmaceuticals (NYSE:VRX) acquired Salix, the constipation market leader, for $11B, adding significant debt to an already dubious balance sheet. Although many have criticized Valeant for this brazen tactic in which it seizes the revenue generating assets of a company while quashing its pipelines in the aftermath, equity holders remain supportive as the company's share price climbs ever higher.
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