Synergy Pharmaceuticals (SGYP) Stock: A Catalyst Is Coming!

Synergy Pharmaceuticals Inc (NASDAQ: SGYP)

Synergy Pharmaceuticals has been a very interesting stock to watch lately. After releasing data from it’s Phase 3-A study into the effectiveness of plecanatide, SGYP soared In the market. However, since then, we’ve seen declines overall. Today, we’ll talk about what we’ve seen from SGYP and signs that the stock has lost its flare in the eyes of investors. Nonetheless, I think this loss of flare leads to a strong opportunity. Here’s how I see it…

What We Saw From SGYP During The Transition To July

Late June was an incredible time in the market for Synergy Pharmaceuticals. As mentioned above, after releasing data from a recent plecanatide study, SGYP soared. However, shortly following the release of data, investors started to become concerned with economic conditions in Greece as well as market conditions in China. As a result, US markets declined dramatically; ultimately bringing Synergy Pharmaceuticals down with it. Since then, we’ve seen slow and steady declines in the stock with strong resistance from above.

Volume Is Also Relatively Low On Synergy Pharmaceuticals

Another thing I’ve noticed about the stock recently is that volume has been incredibly low. For example, just look at the stats for today. According to NASDAQ, the average daily volume on the stock has been 6,646,522 over the past fifty days. However, today, over half way through, the stock has only traded hands 1,427,218 times; about half of what we would normally expect to see. Unfortunately, this is a sign that SGYP has lost its flare.

Nonetheless Doors Are Opening

As the declines happen, some investors may see a reason for concern. Personally, I see a reason for excitement. The reality is that a major catalyst is on its way for the stock. While the media and investors were focusing heavily on the Chinese market crash and Greek debt crisis, Synergy Pharmaceuticals announced that it had initiated the second of two Phase 3 studies looking into plecanatide. The second is expected to last 12 weeks; of which we are already about 5 weeks in.

Given the fact that all of the studies looking into the drug in the past have yielded positive results, I’m expecting to see the same from the Phase 3-B study. Ultimately, this will prove to be a catalyst for SGYP as their next step from there will be the submission of an NDA for the drug that is proving to outperform its biggest and best competition. All in all, I’m expecting for plecanatide to give SGYP a major boost in profits which will dial down to a boost in the market!

What Do You Think?

Where do you think SGYP is headed and why? Let us know in the comments below!

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