Synergy Pharmaceuticals Inc (SGYP) Gains Upper Hand in IBS-C Arena

Believing Synergy Pharmaceuticals Inc’s (NASDAQ:SGYP) odds in the IBS-C competitive arena just got better, Rodman & Renshaw analyst Ram Selvaraju reiterates a Buy rating on SGYP, listing a price target of $18, which represents an upside of nearly 353% compared to where the shares last closed.

Selvaraju remains bullish on the drug maker’s prospects as he firmly believes its candidate designed to treat constipation-predominant irritable bowel syndrome (IBS-C), Trulance is better placed than that of its rival Ardelyx’s contender. Particularly considering Ardelyx recently released “underwhelming” phase 3 data regarding its lead drug Tenapanor, the analyst is backing Synergy’s Trulance with confidence, as “another one bites the dust.”

“We believe that the pivotal data generated with tenapanor in the IBS-C indication do not seem competitive with the overall risk/benefit profiles of either Trulance™ or Linzess®. Accordingly, we believe that a potential competitive threat may have been attenuated, and continue to anticipate that Trulance™ should be able to achieve a market-leading position in treatment of both chronic idiopathic constipation (CIC) and IBS-C in the coming years,” asserts the analyst.

Selvaraju points out rival Ardelyx’s Tenapanor Phase 3 trials included a substantially smaller sample than the ones of Synergy’s Trulance, 610 versus 1000 respectively, and resulted in disappointing efficacy results. Additionally, Tenapanor’s safety profile likewise looks less promising, with increasing rates of side effects in diarrhea, growing from 1.7% to 14.6%, and nausea, reaching 2.6% compared to 1.7% previously. Bottom line, Tenapanor “seems unlikely to be competitive with Trulance™.”

Conversely, Synergy is taking off, expanding its 250 sales force reps all over the United States and training roughly 27000 high prescribers about Trulance. Trulance already has scored a green light in the indication of Chronic Idiopathic Constipation (CIC), and the drug maker shows a bright future as it is likely Trulance will also get supplemental NDA approval in IBS-C by the beginning of the year 2018.

Considering 239M fully diluted shares at a PPS of $18 in the end of the first quarter of 2018, the analyst forecasts Trulance annual sales to culminate to $2.3B in 2021 and a total valuation circling $4.3B.

As usual, we suggest taking analysts’ recommendations with a grain of salt. According to TipRanks, a financial engine that measures and ranks analysts’ and bloggers’ performance, Ram Selvaraju is ranked #4454 out of #4572 analysts. Selvaraju has a 37% success rate and generates an annual yield of -6.2%. When recommending SGYP, the analyst earns a -2.2% average profit on the stock.

TipRanks analytics show SGYP as a Buy. Based on 4 analysts offering recommendations for this stock, 3 issue a Buy and 1 recommends a Sell. The 12-month average price target stands at $13.33, making a 233% upside from where the stock is currently trading.

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