Shares of drug maker Synergy Pharmaceuticals Inc (NASDAQ:SGYP) rose nearly 9% today after the FDA has accepted the company’s plecanatide for review, allowing investors to breathe a sigh of relief. Plecanatide is Synergy’s lead uroguanylin analog for the treatment of chronic idiopathic constipation (CIC).
In reaction, BTIG analyst Tim Chiang reiterated a Buy rating on SGYP, with a price target of $11, which implies an upside of 204% from current levels.
Chiang wrote, “With SGYP shares down more than 30% YTD, we believe the potential of plecanatide as a new treatment for CIC/IBS-C is largely being ignored by the Street. While we recognize that investors may be concerned with the need for the company to raise additional funds in 2016 to commercialize plecanatide in early 2017, we believe Synergy could be in a position to partner with a larger drug Co.”
“We believe investors will now turn their focus to the upcoming release of top line results from two pivotal Phase 3 trials evaluating plecanatide for the treatment of IBS-C. These results are expected in 3Q16, and could serve as a major catalyst for the shares in our view,” the analyst added.
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 6.6% and a 58% success rate. Chiang has a -17.5% average return when recommending SGYP, and is ranked #685 out of 3893 analysts.