Tim Chiang Upbeat on These Two Biotech Players Circling FDA Approvals in 2018: Synergy Pharmaceuticals Inc., Progenics Pharmaceuticals

As SGYP and PGNX both await potential FDA approvals this year, BTIG's Tim Chiang shares his positive two cents on these drug makers he believes present meaningful upside potential.

With Synergy Pharmaceuticals Inc (NASDAQ:SGYP) looking at exciting new leadership along with IBS-C treatment indication approval for Trulance by the end of this month and Progenics Pharmaceuticals, Inc. (NASDAQ:PGNX) prospectively garnering an FDA nod by the end of April for its orphan status asset for treatment of rare tumors, BTIG analyst Tim Chiang spotlights two biotech companies worth the bullish bet. (To watch Chiang’s track record, click here)

Let’s dive in:

Synergy Approaching a New and Improved Year for 2018

With Synergy cherry-picking its once Chief Commercial Officer Troy Hamilton as the new effective CEO, Chiang takes the news in bullish stride. Considering Synergy’s top priority storming into the new year eyes a ramp up of chronic constipation asset Trulance (plecanatide), with fresh new leadership, the analyst is now “expecting a better year in 2018” for the drug maker.

In reaction, the analyst maintains a Buy rating on SGYP with a price target of $7, which implies a 188% upside from current levels.

Chiang writes, “Heading into 2018, we think there are several key items to focus on including increased payor access for Trulance, with major insurers like Aetna […] moving to Tier 2 preferred status, UnitedHealthCare […] removing its new to market block, and Cigna […] removing its prior authorization requirement for Medicare Part D Plans. In addition, major PBM’s including CVS Caremark […] and Prime Therapeutics will also be adding Trulance to their formularies.”

With a prospective FDA approval decision waiting in the wings on the 24th of this month for the IBS-C treatment indication, the analyst believes this could prove to be a share driver for Synergy. Keep in mind, back in October, Synergy unleashed successful pooled data at the American College of Gastroenterology (ACG) meeting. Plecanatide’s results showcased statistically significant results reached 12 weeks in against the placebo arm, which translates to two wins: both primary and secondary endpoints.

Moving forward, Chiang projects roughly $175 to $180 million of cash following Synergy’s equity raise in November, which should assist the biotech company in realizing its “Second Tranche Borrowing Milesone” under the term loan agreement in place with CRG LP.

TipRanks highlights a strong bullish camp on Wall Street betting on Synergy stock, with all 5 analysts polled in the last 3 months unanimously rating a Buy on the biotech stock. With a whopping return potential of nearly 250%, the stock’s consensus target price stands at $8.60.

Progenics Could Launch Rare Tumor Drug by Mid-2018

Progenics had a good close to December on back of a green light for its filing on Azedra, the company’s radiotherapeutic designed to treat malignant pheochromocytoma as well as paraganglioma tumors.

With the FDA setting an action date April 30th of this year, Chiang wagers this brings Progenics “one step closer to the finish line with its lead product opportunity.”

Therefore, the analyst reiterates a Buy rating on PGNX stock with a $14 price target, which implies a close to 125% upside from current levels.

“Azedra has orphan status, and if approved, we expect the Co. to launch by mid-18 with a small 10-12 person sales force focusing on key oncology centers in the US including MD Anderson, Memorial Sloan Kettering, and the University of Pennsylvania. Based on their being just ~1,000 patients with this severe form of adrenal gland cancer (with no approved treatments), we believe Azedra could command a premium price of $160,000 or more per year,” highlights Chiang.

For this year, the analyst calls for around $10 million in Azedra sales, spiraling up to roughly $53 million by next year, and the analyst estimates sales will hit approximately $129 million by 2020.

Chiang adds, “We believe a price point of ~$160,000 or more for two doses of Azedra is possible, given that there are currently no approved treatments available to the ~1,000 patients in the US who suffer from this severe, rare form of adrenal gland cancer.  ”

Ultimately, Progenics boasts a “solid cash position, with ~$98M of cash on the balance sheet as of the end of 3Q17,” as the analyst concludes on a confident note: “We believe PGNX has more than sufficient cash to launch Azedra in the US. We believe potential partnerships could occur with its oncology-focused pipeline, which could bring in additional funds.”

TipRanks points to high confidence from the Street in the last 12-months on this biotech player, with all 4 analysts polled bullish on Progenics stock. The 12-month average price target stands at $13.50, marking a solid nearly 117% upside potential from where the stock is currently trading.

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