Synergy Pharmaceuticals (SGYP) Stock: Why Investors Don't Mind Poor Earnings

Synergy Pharmaceuticals Inc (NASDAQ: SGYP)

Synergy Pharmaceuticals is having an incredible day in the market today, and for good reason. While the company reported a miss on Q2 earnings, investors are overwhelmingly excited with what we can expect to see in the future. Today, we’ll talk about what we saw from earnings, what we’re seeing from the stock, and why investors are excited about SGYP regardless of the earnings miss.

SGYP Reports Q2 Results

As mentioned above, Synergy Pharmaceuticals recently reported its results for the second quarter. Unfortunately earnings were a miss. During the second quarter, analysts expected that the company would generate a loss of $0.20 per share. However, the company actually reported a loss in the amount of $0.23 per share; $0.03 per share wider than expected.

While earnings proved to be a miss, there was positive news released with regard to cash and cash equivalents on hand. As of June 30th, the company had about $141.2 million and cash and cash equivalents. At the end of December 31st, 2015, the company had $111.8 million in cash and cash equivalents. This is impressive growth for a research and development stage company. In a statement, Gary S. Jacob, Chariman and CEO at SGYP had the following to offer…

Our exciting transformation from a purely research and development company into a fully integrated commercial organization continues unabated as we successfully advance and execute against our key strategic priorities… These priorities are guided by our overarching mission to optimize the value of plecanatide and maximize shareholder value.

The rest of 2016 promises to be an exciting time as we expect top-line results in our two phase IBS-C trials with plecanatide. We are especially pleased with our ongoing dialogue with the FDA, including the results of our recent mid-cycle review meeting. Building the right commercial strategy and having the ability to successfully execute on the launch plan requires a strong team and we are fortunate to be attracting talented leaders with relevant experience from across our industry. I am very proud of the Synergy organization which is committed to a successful launch of plecantide and bringing this important new treatment option to patients suffering from CIC and IBS-C…”

What We’re Seeing From The Stock

At the moment, SGYP is doing incredibly well in the market, and for good reason. The company is right on the verge of receiving approval for its first product. Currently (2:20), the stock is trading at $4.88 per share after a gain of $0.27 per share or 5.86% thus far today.

What We Can Expect To See Moving Forward

Moving forward, I maintain my overwhelmingly bullish opinion of what we can expect to see from Synergy Pharmaceuticals ahead. At the end of the day, the company is doing great things with Plecanatide. The treatment is likely to receive approval from the FDA in the CIC indication by no later than January of 2017. On top of that, promising results from previous trials in the IBS-C indication lead to overwhelmingly positive opinions surrounding ongoing Phase III trials. All in all, things seem to be headed in the right direction, and I’m expecting to see incredible gains out of SGYP as a result.

What Do You Think?

Where do you think SGYP is headed moving forward? Join the discussion in the comments below!

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