Canaccord Positive on Synergy Pharmaceuticals Inc (SGYP) Following New Long-Term Safety Data in CIC

Yesterday, at the American College of Gastroenterology’s (ACG) annual conference, Synergy Pharmaceuticals Inc (NASDAQ:SGYP) presented long-term safety data for its pipeline drug plecanatide in chronic idiopathic constipation (CIC) through 72 weeks, revealing sustained low adverse events (AE), which is significant particularly when considering the cases of diarrhea.

Prior data announced from two 12-week Phase 3 trials of plecanatide in CIC indicated diarrhea rates of 3% to 6% across dosing groups. Data presented at yesterday’s conference underscored a slight increase to 7.1% of patients with diarrhea.

In light of the new data, Canaccord analyst John Newman reiterates a Buy rating on shares of SGYP with a $13.00 price target, which represents a 146% increase from where the stock is currently trading.

Newman believes, “While this percentage is slightly higher than what was seen at 12 weeks, we believe this data is consistent with previous findings given the significantly greater study duration, and is significantly lower than the ~16% diarrhea rates seen in patients on Linzess — a point that will be key to Synergy’s commercialization strategy for plecanatide in this indication.”

Both Phase 3 trials of plecanatide in IBS-C are fully enrolled, and the biotech firm expects top-line data readouts by fourth quarter, which Newman highly anticipates coupled with “additional detail on the commercialization process for plecanatide in CIC over the coming months.”

“At the end of 2Q16, Synergy had a cash balance of ~$141.2M, with an annualized burn rate of ~$60M, which we believe should get the company through commercialization of plecanatide in CIC, assuming approval,” Newman concludes.

As usual, we recommend taking analyst notes with a grain of salt. According to TipRanks, analyst John Newman is ranked #4,063 out of 4,180 analysts. Newman has a 35% success rate and faces a loss of 11.5% in his annual returns. However, when recommending SGYP, Newman gains 60.8% in average profits on the stock.

TipRanks analytics exhibit SGYP as a Buy. Based on 2 analysts polled in the last 3 months, 100% rate a Buy on SGYP. The 12-month average price target stands at $13.00, marking a 146% upside from where the shares last closed.screen-shot-10-18-16-at-08-53-pm

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