Synergy Pharmaceuticals (NASDAQ: SGYP)
Synergy Pharmaceuticals has been a very interesting stock to follow as of late, and for good reason. Not only does the company have a New Drug Application in with the United States Food and Drug Administration, there has been quite a bit of chatter surrounding an acquisition. Today, we’ll talk about both stories and why combined, they scream opportunity with regard to SGYP. So, let’s get right to it…
SGYP May Be Acquired
For the past couple of months, there has been quite a bit of chatter surrounding Synergy Pharmaceuticals, and the fact that they may be acquired. There’s good reason for the chatter. In fact, it was recently announced that Allergan was in advanced talks with the company, and planning to be the one to acquire it.
While we haven’t heard much information with regard to the idea of Allergan acquiring SGYP lately, that doesn’t mean that an acquisition isn’t going to happen. The truth is that the company is currently ripe for the picking.
At the moment, SGYP has a New Drug Application in with the United States Food and Drug Administration. We’ll get into the application later. Nonetheless, this is a very important piece of the puzzle when it comes to a possible acquisition. You see, because of the NDA currently submitted and accepted, there is quite a bit of intrinsic value in the company. However, because of the fact that the NDA hasn’t been approved, a company looking to acquire Synergy Pharmaceuticals would likely be able to negotiate a great deal. So, there’s pressure on those eyeing the company to get in before the NDA decision from the FDA.
The New Drug Application Is Promising
As mentioned above, SGYP currently has a New Drug Application in with the FDA. A short while ago, it was announced that the NDA has been accepted for review, which is an incredibly important milestone. The NDA surrounds a treatment known as Plecanatide. For some time now, SGYP has been working on Plecanatide as a treatment for multiple gastrointestinal conditions.
The NDA that was submitted to the FDA is for the treatment of chronic idiopathic constipation and is the first NDA Synergy Pharmaceuticals has ever worked to get approved. Nonetheless, I followed the trials surrounding the treatment, and the data was overwhelmingly positive. While I am no doctor, nor am I a member of the FDA, from what I’ve seen in the trials, it only makes sense that the treatment will be approved. This will likely send the stock soaring as Plecanatide has a large target audience and if marketed properly, will be an incredibly profitable treatment.
However, it doesn’t stop there. On top of the chronic idiopathic constipation indication, SGYP is currently working on 2 Phase 3 studies surrounding the drug as a treatment for irritable bowel syndrome with constipation, also known as IBS-C. This is another indication that I have been watching incredibly closely, and all data released thus far has been overwhelmingly promising.
The Bottom Line
The bottom line here is that on a fundamental level, Synergy Pharmaceuticals is a stock that screams “BUY ME!” While the concept of an acquisition is positive enough, it’s not the only reason the stock is promising. With Plecanatide likely to receive approval for one indication in January, and the company currently working on a second indication, the treatment can prove to be overwhelmingly profitable. Between the acquisition chatter and Plecanatide, there’s plenty of upward potential here.
What Do You Think?
Where do you think SGYP is headed? Let us know your opinion in the comments below!