Synergy Pharmaceuticals Inc (NASDAQ: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, 2016.
“Our exciting transformation from a purely research and development company into a fully integrated commercial organization continues unabated as we successfully advance and execute against our key strategic priorities,” said Gary S. Jacob, Chairman and Chief Executive Officer of Synergy Pharmaceuticals Inc. “These priorities are guided by our overarching mission to optimize the value of plecanatide and maximize shareholder value.”
“The rest of 2016 promises to be an exciting time as we expect top-line results in our two phase 3 IBS-C trials with plecanatide. We are especially pleased with our ongoing dialogue with the FDA, including the results of our recent mid-cycle review meeting. Building the right commercial strategy and having the ability to successfully execute on the launch plan requires a strong team and we are fortunate to be attracting talented leaders with relevant experience from across our industry. I am very proud of the Synergy organization which is committed to a successful launch of plecanatide and bringing this important new treatment option to patients suffering from CIC and IBS-C,” added Dr. Jacob.
Second Quarter 2016 and Recent Highlights
Research & Development
Plecanatide CIC Development Update
- The Food and Drug Administration (FDA) has completed its mid-cycle review meeting of the plecanatide new drug application (NDA) in chronic idiopathic constipation (CIC). To date, no significant issues have been identified. Additionally, the FDA informed us that at this time there are no plans for an advisory committee meeting in connection with its review of the plecanatide NDA in CIC. The plecanatide NDA in CIC is supported by two double-blind placebo-controlled phase 3 trials and one open-label long term safety study. Over 3,500 patients were exposed to plecanatide in the CIC clinical development program. The Prescription Drug User Fee Act (PDUFA) target action date is January 29, 2017.
- In May 2016, we presented additional plecanatide data, including one oral presentation and five posters, at Digestive Disease Week (DDW) 2016. Data presented at DDW showed that plecanatide met the primary and secondary endpoints in two phase 3 CIC clinical trials. In both trials, plecanatide significantly improved durable overall complete spontaneous bowel movement (CSBM) responder rates relative to placebo (primary endpoint). Plecanatide-treated patients also showed immediate and sustained improvements that were statistically significant in CSBM and SBM frequency and stool consistency scores compared to placebo. Furthermore, plecanatide showed statistically significant improvement in abdominal symptoms, such as straining and bloating, as well as constipation severity and treatment satisfaction scores compared to placebo. Most adverse events were mild to moderate in severity; the most common adverse event was diarrhea (<6.0% diarrhea rates in both trials). In addition to the plecanatide CIC clinical data, we presented new in vitro data showing that the pH-dependent activity of plecanatide replicates that of the body’s naturally occurring GI peptide, uroguanylin.
Plecanatide IBS-C Development Update
- We have completed over 95% of planned patient enrollment in our two phase 3 irritable bowel syndrome with constipation (IBS-C) clinical trials with plecanatide and we expect top-line data in both trials in the fourth quarter of this year. The two double-blind placebo-controlled trials are designed to enroll a total of approximately 2,100 IBS-C patients. The primary endpoint being evaluated in these trials is the percentage of patients who are Overall Responders during the 12-week treatment period. An Overall Responder, as defined by the FDA, is a patient who is a weekly responder (i.e. meets both a 30% abdominal pain intensity reduction and stool frequency increase criteria in the same week) for at least 6 of the 12 treatment weeks. Plecanatide previously met this endpoint in a phase 2b trial with 424 IBS-C patients that was completed in 2014.
Dolcanatide UC Development Update
- Earlier this year, we announced positive proof-of-concept in a phase 1b double-blind placebo-controlled four-week trial evaluating dolcanatide treatment in 28 patients with mild-to-moderate ulcerative colitis. We intend to announce next steps for the dolcanatide phase 2 clinical program in patients with mild-to-moderate ulcerative colitis following agreement on the development plans with regulators.
Commercial Planning & Launch Preparation
Our commercial, medical affairs and technical operations teams are continuing to execute on our key strategic imperatives to ensure launch readiness, including the following major initiatives:
- Ensuring a robust supply chain process for launch and throughout plecanatide’s life-cycle
- Building sufficient trade and sample stock for launch in early 2017
- Implementing our 3PL distribution network
- Developing and implementing strong Quality Management Systems
- Driving and raising awareness of Synergy Pharmaceuticals, the unmet medical needs, and burden of disease
- Initiating KOL engagement & speakers bureau preparation plans
- Defining our pricing and reimbursement strategy, as well as initiating field payer activities
- Developing the plecanatide branding, positioning, messaging and creative launch campaign based on customer insights & segmentation
- Hiring and onboarding key talent to support critical functions
- Onboarding and fielding our Market Access and Medical Liaison Teams
- Ensuring our IT and Compliance systems needs are defined and implemented
- Continuing to evaluate all potential sales force options, including a hybrid infrastructure supplemented by a contract sales organization and/or co-promotion partner
- As of June 30, 2016, we had approximately $141.2 million of cash and cash equivalents on hand as compared to approximately $111.8 million cash and cash equivalents and available for sale securities as of December 31, 2015.
- Net cash used in operating activities was $60.1 million in the six months ended June 30, 2016, as compared to $49 million in the six months ended June 30, 2015.
- Research and development expenses in the second quarter of 2016 were approximately $26.6 million, as compared to $19.5 million in the second quarter of 2015. These increased expenses were primarily a result of higher spending on IBS-C studies, the filing of our CIC NDA in January 2016, and plecanatide API contract manufacturing costs for validation batches prepared for our anticipated commercial launch next year.
- Selling, general and administrative expenses were approximately $10.2 million in the second quarter of 2016, as compared to approximately $7.4 million in the second quarter of 2015. These increased expenses were primarily a result of higher spending in preparation for our anticipated commercial launch next year.
- On May 6, 2016, we closed on a registered direct offering of approximately 30 million shares of our common stock with gross proceeds of approximately $89.8 million.
- As of June 30, 2016, the principal balance of our 7.50% Convertible Senior Notes (“Notes”) due 2019 was $79.2 million as compared to $159.0 million at December 31, 2015.
- We had 179.8 million and 113.7 million common shares issued and outstanding at June 30, 2016 and December 31, 2015, respectively, which reflects primarily an increase in the issuance of shares from the first quarter conversions of the Notes and the common stock offering noted above.
- Net loss in the second quarter of 2016 was $38.6 million, as compared to a net loss of $33.7 million incurred in the second quarter of 2015. (Original Source)
Shares of Synergy closed today at $4.61, up $0.05 or 1.10%. SGYP has a 1-year high of $8.27 and a 1-year low of $2.50. The stock’s 50-day moving average is $3.91 and its 200-day moving average is $3.52.
On the ratings front, SGYP has been the subject of a number of recent research reports. In a report issued on July 19, H.C. Wainwright analyst Ram Selvaraju reiterated a Buy rating on SGYP, with a price target of $15, which implies an upside of 225.4% from current levels. Separately, on July 18, BTIG’s Tim Chiang maintained a Buy rating on the stock and has a price target of $11.
According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Ram Selvaraju and Tim Chiang have a total average return of -0.2% and 20.8% respectively. Selvaraju has a success rate of 42.8% and is ranked #2861 out of 4019 analysts, while Chiang has a success rate of 64.5% and is ranked #160.
Overall, 4 research analysts have given a Buy rating to the stock. When considering if perhaps the stock is under or overvalued, the average price target is $11.00 which is 139% above where the stock opened today.
Synergy Pharmaceuticals, Inc. is a biopharmaceutical company, which focuses on the development and commercialization of novel gastrointestinal (GI) therapies. Its product includes plecanatide and dolcanatide.