Synergy Pharmaceuticals Inc (NASDAQ: SGYP) is off to a relatively strong day in the market thus far this morning after the company announced that it has secured a large chunk of financing. This will not only help the company with the commercialization of plecanatide, but it will also help to make it through to the next regulatory catalyst. Of course, our partners at Trade Ideas were the first to alert us to the gains. At the moment (10:03), SGYP is trading at $3.08 per share after a gain of $0.07 per share (2.27%) thus far today.
SGYP Gains Financing
As mentioned above, Synergy Pharmaceuticals is having a relatively strong start to the trading session this morning after the company announced that it has closed financing. According to a release offered by the company, SGYP has secured $300-million debt financing that is issued as senior secured loans. The financing comes from CRG LP, a healthcare-centric investment firm, and its lender syndicate.
According to the release, the company received the first $100 million of the financing upon the execution of the documents associated with the agreement. The company will be able to borrow an additional $100 million before February 28, 2018 and 2 tranches of up to $50 million each that will be available on or before March 29, 2019. These loans carry interest at the rate of 9.50%.
In a statement, Gary Gemignani, EVP and CFO at SGYP, had the following to offer:
“This non-dilutive financing enhances our cash position and provides us with financial flexibility to continue to execute on the launch of TRULANCE and achieve our business objectives, which we are confident will ultimately maximize long-term shareholder value… The structure of this financing provides us with access to capital for support of our commercialization of TRULANCE and funds our current plans for the Company through 2019 when, based on our current assumptions, we expect to be cash flow breakeven.”
The above statement was followed up by Gary S. Jacob, Chairman and CEO at SGYP. Here’s what he had to offer:
“We are pleased to partner with CRG, an investment partner that is known for its strategic investments in healthcare… We remain committed to maximizing the potential benefit of TRULANCE and bringing this important new treatment option to healthcare providers and patients.”
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What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will be keeping a close eye on SGYP. In particular, we’re interested in following the ongoing work of bringing TRULANCE to the patients that need it and expanding indications associated with this treatment and others in the pipeline. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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