Ahead of the fourth quarter showcase from Synergy Pharmaceuticals Inc. (NASDAQ:SGYP) anticipated March 7th, first comes a PDUFA date of FDA judgment for Trulance. As approval waits in the wings within two days’ time in the expanded indication of Irritable Bowel Syndrome with constipation (IBS-C), analyst believes more important drivers matter in the bigger picture.
Oppenheimer analyst Derek Archila offers a quarterly preview from the sidelines, eyes on “the resolution of the company’s capital overhang and material acceleration in Trulance scripts.”
Read more: Can Synergy Pharmaceuticals Inc Get Things Moving Again with Trulance?
Skeptical that the expanded label will be “a meaningful catalyst for the stock” when physicians have already turned to writing for the asset off-label, the analyst reiterates a Perform rating on Synergy without suggesting a price target. (To watch Archila’s track record, click here)
After all, the analyst writes, what makes a label expansion a game changer for physicians to begin using this drug when they are writing for the asset off-label regardless?
With Symphony data in mind, the analyst projects Trulance sales circling $7 million in the fourth quarter of 2017, aligning with consensus expectations.
Overall, “2018 remains a pivotal year for the company and through its recent success with payers, we expect sales to ramp throughout the year. With that said, based on our conversations with IRWD at a recent competitor conference in San Francisco, it appears it is gearing up for a new DTC campaign focused more on creating brand awareness around Linzess vs. creating awareness around the constipation indication in general. Further, IRWD intends to couple the campaign with a large sampling program, which could stymie Trulance growth efforts in the 1H18. While this will certainly be a headwind, we continue to view Trulance as a differentiated product and believe it has a place in the overall treatment paradigm for patients with chronic constipation. For 4Q17, we believe investors are going to be paying close attention to SGYP’s SG&A expense to get a feel for what it could be for 2018 to support the launch,” Archila surmises.
Pinpointing dilutive financing risks, the analyst concludes standing by his recent downgrade to the sidelines, staying the “cautious” course for the time being on Synergy’s market opportunity.