Oppenheimer Chimes In On Synergy Pharmaceuticals Inc (SGYP) As Trulance Launch Expected In The Coming Weeks


Yesterday after the close, the FDA granted final approval to Synergy Pharmaceuticals Inc’s (NASDAQ:SGYP) Trulance (plecanatide), for the treatment of chronic constipation. However, Synergy shares tumbled nearly 8% today, as investor reaction to the approval appears to be ‘sell on the news.’

Based on conversation with management, Oppenheimer analyst Derek Archila expects the company to launch Trulance by or before the end of 1Q17. Archila expects the company to deploy a ~200-300 person sales force and begin an aggressive launch including a large sampling program and social media campaign. For 2017, Archila forecasts ~$30 million in Trulance sales.

Archila noted, “We caught up with SGYP management to discuss the approval of plecanatide, brand name Trulance, for chronic idiopathic constipation. Based on our discussion with management and our review of the label, we are increasingly confident in a successful launch of Trulance given the drug’s improved tolerability relative to existing brands and flexible dosing—with or without food—which we expect to drive adoption among both patients and physicians. We forecast peak sales of $695M by 2029. We will look to learn more about the commercial launch strategy should the company choose to hold an investor call in the near future.”

As such, Archila reiterated an Outperform rating on shares of Synergy Pharmaceuticals, with a price target of $10, which implies an upside of 69% from current levels.

According to TipRanks, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Derek Archila has a yearly average return of -4.4% and a 11.1% success rate. Archila has a -4.0% average return when recommending SGYP, and is ranked #3412 out of 4365 analysts.

Out of the 6 analysts polled by TipRanks, 5 rate Synergy Pharmaceuticals stock a Buy, while 1 rates the stock a Hold. With a return potential of 64%, the stock’s consensus target price stands at $10.50.