Synergy Pharmaceuticals Inc (SGYP) Trulance Market Adoption Pattern Looks Positive: Canaccord


Synergy Pharmaceuticals Inc (NASDAQ:SGYP) stock is on the downward spiral today, to the harsh, discordant clang of 12% after the biotech firm released its second-quarter financial results for 2017 that revealed a greater loss per share than had been anticipated by the Street.

While concerns circle Synergy as to capital overhang, the bulls look to chronic idiopathic constipation (CIC) drug Trulance as the winning redemption for the firm, with a confidence-instilling market adoption pattern. Additionally, the drug is set for a PDUFA date January 24, 2018 in the indication of irritable bowel syndrome with constipation (IBS-C).

Canaccord analyst John Newman stays the bullish course on Synergy, especially considering he places his bet on Trulance over key rival Ironwood Pharmaceuticals and Allergan drug Linzess- market-ready for the past five years with approvals in both CIC as well as IBS-C under its belt.

Enthusiastic on the Trulance launch and market uptake pattern, the analyst maintains a Buy rating on shares of SGYP with a $13 price target, which represents a 319% increase from where the stock is currently trading. (To watch Newman’s track record, click here)

Present-day, Trulance has collected roughly 7% of new-to-brand prescription (NBRx) market share, compared to about 12% in gastroenterologists NBRx market share. The analyst underscores that this includes past 50% of the newly filled prescriptions rolling in from patients who had yet to be treated with branded therapy along with 45% from patients who did convert from branded therapy.

Newman asserts, “We see this uptake pattern as highly encouraging, since it implies that Trulance can convert Linzess patients and compete against Linzess in gaining branded therapy-naive patients. Should this pattern continue, Trulance would be able to at least achieve market share parity against Linzess.”

Additionally with sales force deployment in prep for IBS-C underway, the analyst comments, “SGYP is planning to transfer Publicis Touchpoint contract sales representatives over to the company to support the Trulance indication expansion into IBS-C. We expect the increase in sales representative to support the growth trend observed in 2Q17.”

The firm’s sNDA for Trulance in the indication of IBS-C has gotten a nod from the FDA, and with the PDUFA date with destiny approaching in January, the analyst gives Synergy his vote of confidence, as he believes, “We have high confidence of a positive response from the FDA, which should help expand Trulance‚Äôs commercial potential.”

“Most importantly, we continue to believe that less diarrhea and the ability to dose with or without food make Trulance a simpler and easier choice for doctors and patients with CIC,” surmises Newman.

For the second quarter, Synergy brought in $2.3 million in sales coupled with $1.5 million in net deferred revenue, on back of 12,600+ filled prescriptions and monthly volume growth surging roughly 182% monthly-over-month. Consensus had looked for $1.96 million in sales, but a loss per share of ($0.25)- whereas Synergy amassed ($0.33) in its loss per share for the quarter.

TipRanks analytics demonstrate SGYP as a Buy. Out of 6 analysts polled by TipRanks in the last 3 months, 5 are bullish on Synergy stock while 1 is bearish. With a return potential of nearly 226%, the stock’s consensus target price stands at $10.45.