Second quarter earnings for the year are due sometime around mid-August from Synergy Pharmaceuticals Inc (NASDAQ:SGYP). Yet, for Canaccord analyst John Newman, consensus projections dim in significance compared to how the launch will fare for Trulance, the firm’s drug designed to treat Chronic Idiopathic Constipation (CIC). When looking at the drug’s usage in new CIC patients compared against those switching to over to Trulance, results are revealing a “meaningful percentage” that indicate a stronger, more encouraging uptake down the line considering initial expectations. As such, ahead of the print, the analyst reiterates a Buy rating on shares of SGYP with a $13 price target, which represents a 190% increase from where the stock is currently trading. (To watch Newman’s track record click here.)
Newman asserts, “We will focus on launch details rather than consensus for 2Q17, since we look for information on longer-term launch trends. We believe the simple, real-world reality for CIC is that Trulance does not have the diarrhea concerns of Linzess, and that Trulance can be taken with or without food.”
One aspect the analyst has his eyes peeled to is competitor Ironwood’s CIC drug Linzess, highly anticipating details from IRWD’s second quarter call for the year that will discuss the drug’s inventory changes that might reveal Trulance is bringing the heat of rivalry to the table.
Moreover, retreatment results from 2014 on Linzess patients indicate to the analyst “seamless integration” for Synergy’s drug, with Newman elaborating, “We believe this shows that patients who may ‘switch’ from Linzess to Trulance are likely to experience good efficacy, even after a treatment break. Interestingly, Linzess data actually showed that after returning to Linzess, patients showed a higher satisfaction score than before they had stopped.”
“[…] Trulance differentiation on safety and ease of use will result in a successful long-term launch. We recognize that Allergan / Ironwood’s Linzess is embedded in the market with strong salesforce support, but we believe that Trulance is simply easier for doctors to give and for patients to tolerate,” surmises the analyst.
TipRanks analytics indicate SGYP as a Buy. Out of 6 analysts polled by TipRanks in the last 3 months, 5 are bullish on Synergy stock while 1 is bearish. With a return potential of nearly 146%, the stock’s consensus target price stands at $10.95.