BTIG analyst Tim Chiang weighed in today on Synergy Pharmaceuticals Inc (NASDAQ:SGYP), after the drug maker reported the achievement of a milestone few biotechnology companies reach—FDA approval of its lead drug, plecanatide, in constipation-predominant irritable bowel syndrome (IBS-C).
With a once-daily dosing profile, and a low incidence of side effects, Chiang believes Trulance will become a meaningful new product in the GI treatment category. His 2017-2020 Trulance sales estimates are $35M, $150M, $330M, and $480M, respectively.
Chiang noted, “We think SGYP’s launch in early 2017 will be targeted at ~20,000 to 25,000 physicians who are high prescribers of Rx treatments in CIC (which accounts for ~70% to 80% of the prescriptions written in the US market), with the Co. utilizing a contract-sales force (Touchpoint) that numbers between 150-200 reps. As a result, we think SGYP’s annual marketing costs for plecanatide will be substantially below what Allergan and Ironwood spend (~$250 million per year) combined on the marketing of Linzess.”
“Rx treatment market for CIC and IBS-C continues to expand; in 2017, we expect sales for Rx treatments to exceed $2 billion. In 2016, Allergan / Ironwood’s Linzess volumes increased by more than 20%, according to our analysis of Symphony Healthcare prescription data,” the analyst added.
Chiang reiterated a Buy rating on SGYP stock, with a price target of $11, which represents a potential upside of 86% from where the stock is currently trading.
According to TipRanks, a site that tracks and ranks analysts on their predictions, Chiang has a yearly average return of 16.6% and a 55% success rate. Chiang has a 37.9% average return when recommending SGYP, and is ranked #308 out of 4365 analysts.
The overwhelmingly majority of analysts say SGYP is a “buy.” The average forecast is for the stock to hit $10.5 in the coming months.