Biotech Beat: Analysts Share Two Cents on Amicus Therapeutics, Inc. (FOLD) and Synergy Pharmaceuticals Inc (SGYP)

Analysts are offering their two cents on biotech firms Amicus Therapeutics, Inc. (NASDAQ:FOLD) and Synergy Pharmaceuticals Inc (NASDAQ:SGYP). Though FOLD investors are not happy with the FDA’s verdict that its Fabry disease-treating pipeline drug is not considered ready for approval, why is it that Chardan remains not only undeterred by the setback, but in fact raises the price target? Meanwhile, with respect to Synergy Pharmaceuticals, Rodman & Renshaw is riding the bullish train full steam ahead of a highly anticipated data readout and a forecast for short-term approval. Let’s dive in:

Amicus Investors are Fleeing; But There is a Bullish Case for FDA Delay

Amicus shares are collapsing 28% after the firm provided a less-than favorable update regarding a delay in the US regulatory approval pathway for Galafold, a first-in-class small molecule chaperone therapy for Fabry disease.

What is the roadblock exactly? The biotech firm has been amid discussions with the FDA, who deemed at the end of these meetings that reducing kidney globotriaosylceramine (GL-3) is currently not considered a basis for an accelerated approval. Now, Amicus intends to  perform a 12-month placebo-controlled pivotal cross-over study in treatment-naive Fabry disease patients with gastrointestinal (GI) symptoms, with diarrhea assessment based upon FDA irritable bowel syndrome guidelines as the primary endpoint. FOLD is working alongside the agency to bring the clinical protocol to fruition with the hopes to commence enrollment come 2017, and data to follow in 2019.

From Chardan analyst Gbola Amusa‘s perspective, though the news postpones his expectations for a U.S. launch from the second half of 2018 instead two years later to the second half of 2020, he sees this as advantageous in the bigger picture. In fact, Amusa believes due to enhanced visibility, the probability of a path towards U.S. approval has jumped from 40% to 55%. As such, the analyst reiterates a Buy rating on shares of FOLD while upping the price target from $15 to $16, which represents a nearly 169% increase from current levels.

Though investors might be reacting with negative sentiment, Amusa explains, “To us, the key feature of yesterday’s announcement was the proposed pivotal cross-over trial, which would recruit approximately 35 patients, with these results being combined with data from the previous Galafold studies to support a NDA filing. […] (We now increase our pan-European launch probability from 95% to 100% as well. This, and housekeeping updates post 3Q16, also drive our PT increase).”

“Moreover, we feel the choice of a cross-over study is favorable for Galafold, as the internal controls within a cross-over trial allow for more modest sample sizes, which could accelerate patient recruitment, an important consideration in orphan diseases like Fabry. While a further pivotal trial will necessarily require additional cash burn, we believe the costs will be relatively modest given the small 35-patient cohort,” Amusa surmises.

According to TipRanks, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Gbola Amusa is ranked #4,049 out of 4,239 analysts. Amusa has a 37% success rate and faces a loss of 8.9% in his yearly returns. However, when recommending FOLD, Amusa gains 23.4% in average profits on the stock.

TipRanks analytics demonstrate FOLD as a Buy. Based on two analysts polled by TipRanks in the last 3 months, both rate a Buy on FOLD. The 12-month average price target stands at $15.00, marking an 80% upside from where the shares last closed.screen-shot-11-29-16-at-05-08-pm

Synergy Ready to Hit Milestone after Milestone

Rodman & Renshaw analyst Ram Selvaraju sees Synergy in an excellent position with a data read-out forthcoming in irritable bowel syndrome with constipation (IBS-C) coupled with near-term approval pending in a chronic idiopathic constipation (CIC) indication for its pipeline drug plecanatide. Moreover, the analyst foresees the data release will be a positive one for the biotech firm and therefore reiterates a Buy rating on SGYP with a price target of $15, which represents a 177% increase from where the shares last closed.

The analyst asserts, “We reiterate our expectation that the company is slated to achieve two substantial milestones near-term, namely the release of pivotal top-line data from two Phase 3 trials of its lead drug candidate plecanatide in the constipation-predominant irritable bowel syndrome (IBS-C) setting, which could be reported within the next few weeks, in our view; and potential U.S. regulatory approval of plecanatide in the CIC indication, for which the decision date is January 29, 2017.”

Ultimately, “Given the highly favorable data supporting the efficacy and safety profile of plecanatide in CIC, where the drug has been tested on over 3,500 patients, and the favorable late-cycle review meeting between the company and the FDA, we believe that Synergy and regulators may already be finalizing the terms of plecanatide’s approval in CIC, including discussions on labeling, and continue to anticipate a timely approval of the drug,” Selvaraju concludes.

According to TipRanks, analyst Ram Selvaraju is ranked #3,987 out of 4,239 analysts. Selvaraju has a 36% success rate and forfeits 4.0% in his annual returns. However, when suggesting SGYP, Selvaraju earns 25.9% in average profits on the stock.

TipRanks analytics exhibit SGYP as a Strong Buy. Out of 3 analysts polled by TipRanks in the last 3 months, all 3 are bullish on Synergy stock. The 12-month average price target stands at $13.00, marking a nearly 139% upside from where the stock is currently trading.screen-shot-11-29-16-at-05-09-pm

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