Synergy Pharmaceuticals Inc Enters a Fiercely Competitive IBS-C Market, But “Attractive Commercial Opportunities” Exist, Says William Tanner

Now that SGYP has won over FDA approval in a new indication (IBS-C), did the biotech company's competitive edge just get sharper?

Synergy Pharmaceuticals Inc (NASDAQ:SGYP) investors have reason to breathe a sigh of relief this morning: the drug maker’s chronic idiopathic constipation (CIC) asset Trulance just got the green light from the FDA for additionally treating irritable bowel syndrome with constipation (IBS-C). In reaction, shares are experiencing a 7% upturn this morning.

Cantor analyst William Tanner sings the biotech player’s praises, believing SGYP’s Trulance already was poised to “become an important therapy” in the CIC market, and now commercial prospects just got even more enticing with the sNDA approved in IBSC.

Though the analyst believes the FDA nod in IBS-C was already viewed as “highly likely,” he nonetheless takes the news in bullish stride, reiterating an Overweight rating on SGYP stock with a price target of $10, which implies a 277% upside from current levels. (To watch Tanner’s track record, click here)

“Participating in a market with entrenched competition but with a high degree of patient dissatisfaction and large numbers of CIC sufferers who have yet to try a prescription product, Trulance will be presented with attractive commercial opportunities, in our view,” asserts Tanner, who explains that with supportive data coupled with a “benign side effect profile,” most of the Street should not be too thrown by the approval news.

Worthy of note, “New indication places Trulance on even ground with primary competition. With the approval, Trulance is now indicated for the same conditions as the major competitor, Linzess (linaclotide), marketed by Allergan […] We note that the other CIC competitor, Amitiza, is not indicated for treating IBS-C,” highlights the analyst, commending a new upper hand in Synergy’s competitive favor.

The “acceleration” of Trulance scripts stands as “likely an important key for SGYP stock performance” this year, Tanner writes, noting that the SGYP team had indicated the forthcoming approval in IBS-C as a meaningful short-term prospect for gains. Therefore, Tanner wagers, “With the access groundwork evidently laid in 2017 and a new indication having been granted, we believe investors are apt to expect evidence the efforts are paying off in 2018, at least in Rx volume if not revenues.”

This bull concludes noting that shareholders are “likely” maintaining close attention peeled the Synergy’s “ability to access additional borrowings;” especially in light of the company’s $300 million debt financing deal revealed in September to tackle liquidity and dilution challenges.

With plenty of runway left for Synergy to capture more market share, Tanner is confident on the biotech company’s bright road ahead.

TipRanks highlights a strong bullish analyst consensus taking the bet on the drug maker. Consider that 4 out of 5 analysts in the last 3 months rate a Buy on Synergy stock, leaving just 1 maintaining a Hold. With a whopping return potential of 264%, the stock’s consensus target price stands at $9.25.

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