Synergy Pharmaceuticals Inc (SGYP)’s Plecanatide Stays Compelling Despite Competitive Pressures: Rodman & Renshaw
In a research report released today, Rodman & Renshaw analyst Ram Selvaraju reiterated a Buy rating on shares of Synergy Pharmaceuticals Inc (NASDAQ:SGYP), with a price target of $20, after competitor Ironwood Pharmaceuticals reported positive data from a Phase 3 trial of its marketed drug Linzess® (linaclotide) in chronic idiopathic constipation (CIC).
Selvaraju wrote, “In the wake of the results of this study, while we acknowledge the potential improvement in competitive positioning for linaclotide vs. plecanatide, we remain positive regarding plecanatide’s prospects in CIC and constipationpredominant irritable bowel syndrome (IBS-C) and therefore reiterate our Buy rating.”
“We remind investors that one of the key competitive advantages for Synergy’s lead candidate, plecanatide, is reduced incidence and severity of diarrhea as a side effect. If low-dose linaclotide were to enter the market with clearly improved safety and equivalent efficacy to the currently-approved doses of linaclotide, the degree of differentiation between linaclotide and plecanatide may be reduced. However, we note that plecanatide remains the direct analog of the naturally-occurring human peptide, uroguanylin, and that Ironwood’s drug has not been directly compared to plecanatide in head-to-head studies,” the analyst continued.
Selvaraju concluded, “We would advise investors to accumulate Synergy shares on any weakness driven by sentiment around release of this competing data.”
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Ram Selvaraju has a total average return of 3.5% and a 43% success rate. Selvaraju has a -15.8% average return when recommending SGYP, and is ranked #1134 out of 3773 analysts.
All the 5 analysts polled by TipRanks rate Synergy stock a Buy. With a return potential of 125%, the stock’s consensus target price stands at $14.