Synergy Pharmaceuticals Inc (NASDAQ:SGYP), a biopharmaceutical company focused on the development and commercialization of novel gastrointestinal (GI) therapies, today reported its financial results and business update for the three months ended March 31, 2016.
“2016 is off to a strong and promising start for Synergy, highlighted by the U.S. Food and Drug Administration (FDA) acceptance of our first new drug application (NDA) for plecanatide in chronic idiopathic constipation (CIC),” said Gary S. Jacob, Chairman and Chief Executive Officer of Synergy Pharmaceuticals. “We continued to expand the utility and value of our uroguanylin-based platform technology while significantly strengthening our overall financial position. Moving forward, we believe we are well positioned to successfully execute on key pre-launch activities and will continue to evaluate all strategic options to ensure a successful launch of plecanatide early next year. Meanwhile, we expect top-line data from our two pivotal phase 3 trials with plecanatide in irritable bowel syndrome with constipation (IBS-C) in the third quarter and intend to file our second NDA in IBS-C by the end of this year. Our first quarter results demonstrate our profound commitment to optimizing the value of plecanatide and dolcanatide and bringing these important new treatment options to patients suffering from GI diseases.”
First Quarter 2016 and Recent Highlights
Synergy’s Uroguanylin Based GI Platform
Our proprietary GI platform is based on uroguanylin, a naturally occurring human GI peptide, and includes two lead product candidates – plecanatide and dolcanatide. Plecanatide is our first uroguanylin analog currently being evaluated for the treatment of CIC and IBS-C. Dolcanatide is our second uroguanylin analog currently being explored for the treatment of ulcerative colitis (UC). We discovered, are developing and control worldwide rights to our uroguanylin based GI platform.
Plecanatide CIC Development Update
- On January 29, 2016, we filed our first NDA with the FDA for plecanatide in CIC. The NDA has been accepted for FDA review and the Prescription Drug User Fee Act (PDUFA) target action date is January 29, 2017. The plecanatide NDA in CIC is supported by two double-blind placebo-controlled phase 3 trials and one open-label long term safety study. A total of more than 2,700 patients with CIC received a once-daily dose of either plecanatide or placebo across the two placebo-controlled trials. Additionally, over 3,500 patients were exposed to plecanatide in the CIC clinical development program.
Plecanatide IBS-C Development Update
- We are presently evaluating plecanatide in two pivotal phase 3 trials in patients with IBS-C. Each randomized, 12-week, double-blind placebo-controlled trial is assessing the efficacy and safety of plecanatide (3.0 and 6.0mg), taken as a tablet once-a-day, in approximately 1,050 patients with IBS-C. The primary endpoint for both trials is the percentage of patients who are Overall Responders during the 12-week treatment period. An Overall Responder, as defined by the FDA, is a patient who is a weekly responder (i.e. meets both a 30% abdominal pain intensity reduction and stool frequency increase criteria in the same week) for at least 6 of the 12 treatment weeks. Plecanatide has previously met this endpoint in a phase 2b IBS-C trial that was completed in 2014. We expect top-line data results from the two ongoing phase 3 IBS-C trials in the third quarter of this year. We intend to file our second NDA for plecanatide in IBS-C by the end of this year.
Dolcanatide UC Development Update
- On January 11, 2016, we announced positive proof-of-concept data with dolcanatide in patients with ulcerative colitis. This was a phase 1b double-blind, placebo-controlled, four-week study evaluating 28 patients with mild-to-moderate ulcerative colitis. We are presently evaluating how best to move dolcanatide forward in clinical development for the treatment of ulcerative colitis.
Plecanatide Launch Readiness Update
- Our team is actively engaged in key pre-launch activities to develop and execute on a comprehensive and efficient launch strategy that we believe will ensure plecanatide is well positioned for success. We are currently focused on three key areas: product readiness, market readiness and organizational readiness. Activities supporting these three key priorities include ensuring a thorough supply chain plan, using market and customer insights to develop successful branding, positioning and communication platforms, evaluating all salesforce and market access strategic options, continuing KOL engagement and other medical affairs-driven initiatives, as well as attracting key talent throughout the organization who are highly experienced in launch preparation and execution.
- As of March 31, 2016 we had $84.2 million of cash, cash equivalents and available-for-sale securities on hand as compared to $111.8 million as of December 31, 2015.
- On May 5, 2016 we announced an $89.8 million registered direct offering of our common stock to certain institutional investors at a price of $3.00 per share. The net proceeds from the offering, after deducting estimated offering expenses, were approximately $89.7 million. The offering closed on May 6, 2016.
- Net cash used in operating activities was $27.6 million in the first quarter of 2016, as compared to $23.1 million in the first quarter of 2015.
- Research and development expenses in the first quarter of 2016 were $21.2 million, as compared to $18.2 million in the first quarter of 2015. This increase in research and development expenses was due primarily to greater spending on IBS-C studies and fees related to our NDA filing, offset partially by a reduction in CIC clinical trial expenses.
- Selling, general and administrative expenses were $6.4 million in the first quarter of 2016, as compared to approximately $4.6 million in the first quarter of 2015. These increased expenses were primarily a result of new selling and marketing spend in preparation of our anticipated commercial launch next year.
- On March 28, 2016 we announced the closing of separate, privately-negotiated exchanges with certain holders of $79.8 million aggregate principal amount of our 7.50% Convertible Senior Notes (“Notes”) due 2019, representing approximately 50% of the outstanding aggregate principal amount of the Notes, for 35.3 million shares of our common stock. Subsequent to this exchange, the principal balance of the Notes at March 31, 2016 was $79.2 million as compared to $159.0 million at December 31, 2015. The annual interest expense reduction attributable to the Notes exchanged is $6.0 million per annum.
- Net loss in the first quarter of 2016 was $59.9 million, or $0.51 per share, as compared to a net loss of $27.4 million, or $0.28 per share, incurred in the first quarter of 2015. This increase in net loss was primarily a result of the debt conversion expense attributable to our convertible notes exchange transaction, which amounted to $25.6 million, or $0.22 per share. (Original Source)
Shares of Synergy Pharmaceuticals closed today at $2.91, down $0.07 or -2.35%. SGYP has a 1-year high of $10.15 and a 1-year low of $2.50. The stock’s 50-day moving average is $3.07 and its 200-day moving average is $4.39.
On the ratings front, SGYP has been the subject of a number of recent research reports. In a report issued on April 19, Roth Capital analyst Michael Higgins reiterated a Buy rating on SGYP, with a price target of $6.50, which implies an upside of 123.4% from current levels. Separately, on April 18, BTIG’s Tim Chiang reiterated a Buy rating on the stock and has a price target of $11.
According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Michael Higgins and Tim Chiang have a total average return of -20.1% and -1.8% respectively. Higgins has a success rate of 13.5% and is ranked #3736 out of 3828 analysts, while Chiang has a success rate of 44.4% and is ranked #2839.
Synergy Pharmaceuticals, Inc. is a biopharmaceutical company, which focuses on the development and commercialization of novel gastrointestinal (GI) therapies. Its product includes plecanatide and dolcanatide. The company was founded by Kunwar Shailubhai on November 15, 2005 and is headquartered in New York, NY.