BTIG Reiterates Positive Stance on Synergy Pharmaceuticals Inc (SGYP) Despite Competitor Linzess Approval


BTIG analyst Tim Chiang remains positive on shares of Synergy Pharmaceuticals Inc (NASDAQ:SGYP) following news of Allergan (NYSE:AGN) and Ironwood (NASDAQ:IRWD) receiving approval of their lower dose 72mcg formulation of Linzess for the treatment of chronic constipation. Linzess will compete directly with SGYP’s constipation drug Trulance.

Chiang wrote, “We think SGYP’s Trulance (plecanatide) which was recently granted FDA approval for the treatment of chronic constipation may have a lower incidence of diarrhea side effect (~5% with plecanatide vs. placebo at ~1%) which could interest physicians and patients. Ultimately, we believe Trulance will become a meaningful new product in the GI treatment category with sales potential approaching $500M by 2020. With ~40M Americans suffering from chronic constipation and there being widespread usage of OTC laxatives (which does not adequately treat chronic symptoms in many cases), we believe the opportunity for SGYP’s Trulance is significant.”

“While we do think Trulance will ultimately take share from Linzess, we think the real market opportunity will be in expanding the overall Rx treatment market. Ultimately, we think the launch of Trulance will lead to more patients switching from OTC laxatives to Rx treatments,” the analyst concluded.

As such, Chiang reiterates a Buy rating on Synergy Pharmaceuticals, with a price target of $11, which represents a potential upside of 90% from where the stock is currently trading.

According to TipRanks, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Tim Chiang has a yearly average return of 14.5% and a 54% success rate. Chiang has a 20.8% average return when recommending SGYP, and is ranked #431 out of 4378 analysts.

Out of the 6 analysts polled in the past 12 months, 5 rate Synergy Pharmaceuticals stock a Buy, while 1 rates the stock a Hold. With a return potential of 96.5%, the stock’s consensus target price stands at $11.40.

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