Synergy Pharmaceuticals (SGYP) Stock Is Down…Not For Long!


Synergy Pharmaceuticals Inc (NASDAQ: SGYP)

Synergy Pharmaceuticals stock had an incredible week in the market last week. After announcing data revolving around their most recent study, the stock skyrocketed. However today, SGYP seems to be giving up some of the gains we saw last week. Nonetheless, I’m not concerned as I don’t believe these declines will last very long. Today, we’ll talk about why SGYP had such a strong week last week, why the stock is declining today, and what we can expect to see moving forward. So, let’s get right to it…

What Caused SGYP To Climb Last Week

The growth last week was the result of the release of study data from a study looking into Plecanatide; an experimental drug being studied with the hopes of treating constipation. The results of the study were overwhelmingly positive. Not only was plecanatide effective in treating the condition, it also caused diarrhea in only 6% of patients. This proved to be far better than the current leader Linzess; which is known to cause diarrhea in around 16% of patients that use it.

Why Synergy Pharmaceuticals Stock Is Down Today

When it comes to today’s declines, I can understand the concern among investors. Messages on Stock Twits and Twitter conveying concern seem to be all over the place today. However, as I mentioned above, I’m really not worried. As a matter of fact, I look at today’s declines as an opportunity for those who haven’t gotten in on the gains quite yet. The reality is that the growth we saw in Synergy Pharmaceuticals stock last week was incredible, but not sustainable. Any time we see excessive growth like this, we tend to see a slight correction shortly following the growth before the stock leads the way to slow and steady growth. It’s a classic case of overreactions in the market. Nonetheless, I’m expecting to see growth from the stock relatively soon. So, there’s no need to be concerned about what we’re seeing in SGYP today.

What We Can Expect To See Moving Forward

In the case of SGYP I’ve got an overwhelmingly bullish opinion for both the short and long term. Here’s how I see it…

  • Short Term – Declines may continue today and move into tomorrow. However, by the end of the week, I would imagine that SGYP is going to be trending up once again. While investors got excited about the results, that excitement pushed the stock too high, too fast. So, we’re seeing a correction that’s normalizing the stock’s value before growth continues once again. Nonetheless, the growth will continue.
  • Long Term – In the long term, I’m also expecting to see overwhelmingly positive news from Synergy Pharmaceuticals stock. The reality is that Plecanatide is proving to be a successful venture; and will most likely lead to profits. With strong management, a strong product, and a strong core team, it’s hard for me to imagine a situation where we would see long term declines out of SGYP

What Do You Think?

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

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