Synergy Pharmaceuticals (SGYP) Stock Sinks on Disappointing Earnings Update
Synergy Pharmaceuticals (NASDAQ:SGYP) saw its shares crater 10% in after-hours trading Thursday, after the drug maker revealed disappointing first-quarter earnings results.
To put these figures into context, Canaccord analyst John Newman has recently forecast revenue of ~$62 million for the company’s lead drug Trulance in 2018. However, Trulance’s net sales in the first quarter were only $8.6 million, compared to net sales of $9.4 million during the fourth quarter of 2017.
To the company’s credit, it has lowered projected total adjusted operating expense (non-GAAP) guidance for 2018 to be in the range of $165 million – $175 million versus previously guided $175 million – $185 million.
With heavy M&A activity in the industry, SGYP does not remain out of the question as an acquisition candidate. The company continues to engage in an ongoing review of strategic business opportunities focused on maximizing shareholder value. This review process includes, but is not limited to, potential US and ex-US partnerships, licensing, and merger and acquisition transactions. Synergy expects to provide further updates on or before it reports second quarter 2018 results, according to the quarterly report.
Synergy Pharmaceuticals CEO Troy Hamilton commented, “The first quarter of 2018 was all about executing on our three key business priorities of optimizing the value of TRULANCE, ensuring a strong financial foundation, and continuing to explore all strategic business development opportunities […] With TRULANCE, we saw continued growth in prescriptions, market share and its prescriber base and with the IBS-C launch in late February, we have the opportunity to continue to drive further sales growth. In addition, we continued to efficiently manage our operating expenses by prioritizing key investments in areas of high return, such as expanding market access. Finally, we amended our debt agreement to allow for more flexible access to capital as we are pursuing strategic options that align with our core mission to deliver exceptional value to our patients, customers and shareholders. Overall, our progress against our key business priorities during the first quarter reflect our commitment to maximizing shareholder value while also maintaining our focus on providing safe and effective treatment options for patients living with chronic GI conditions.”