Now that Synergy Pharmaceuticals Inc (NASDAQ:SGYP) meets the qualifications to open the next tranche of debt funding with CRG LP, one bull believes this will ease the debt concerns towering above shares. By the close of last month, Synergy boasted over the necessary minimum of $128 million needed to access the second tranche of $100 million under the facility.
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H.C. Wainwright analyst Ram Selvaraju eagerly spots a meaningful ramp from the second debt facility tranche that will benefit lead asset Trulance, approved to treat Chronic Idiopathic Constipation (CIC) and constipation-predominant Irritable Bowel Syndrome (IBS-C).
Therefore, the analyst reiterates a Buy rating on SGYP stock with a $7 price target, which implies a 272% upside from current levels. (To watch Selvaraju’s track record, click here)
“In our view, this update mitigates the significant financing overhang that has weighed on the company’s shares, and provides Synergy with substantial runway via which to continue the commercialization of its sole marketed product, Trulance™. We remind investors that the FDA recently approved the Trulance supplemental New Drug Application (sNDA) in constipation-predominant irritable bowel syndrome (IBS-C). In our view, label expansion to include this indication alongside the existing label indication for chronic idiopathic constipation (CIC) should meaningfully accelerate sales momentum and reinvigorate sales force messaging,” asserts Selvaraju.
Meanwhile, the new label expansion for Trulance to now treat IBS-C and not just CIC to the analyst “reflects solid safety and efficacy profile” for the drug.
By the end of next year, Selvaraju angles for prospective profitability considering Synergy’s outlook, explaining: “In our view, given the current status of Trulance commercialization in the U.S. and our forecast of over $85M in 2018 U.S. Trulance sales, rising to $270M in 2019, we believe that Synergy could potentially reach cash flow-positive status in 2H19.”
Synergy could have enough “runway” to achieve “self-sustaining status,” concludes the analyst pointing to the company’s current available resources alone.
TipRanks reveals a strong bullish camp betting on this biotech player. Out of 5 analysts polled in the last 3 months, 4 are bullish on Synergy stock with just 1 playing it safe on the sidelines. With a whopping return potential of 392%, the stock’s consensus target price stands at $9.25.