Synergy Pharmaceuticals Inc (NASDAQ: SGYP)
Synergy Pharmaceuticals has been an incredibly interesting stock to watch for quite some time now, and it’s my belief that we haven’t even reached the best part. Throughout the beginning of the year, the stock has seen several catalysts that have pushed it higher. Now, I’m expecting to see more. Today, we’ll talk about why I take such a bullish stance on SGYP.
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#1 Reason To Be An SGYP Bull: Plecanatide
For me, the number one reason to be bullish on Synergy Pharmaceuticals is an experimental treatment that is known as plecanatide. For some time now, the company has been working on the treatment. Plecanatide is used to target multiple indications, all of which have to do with gastrointestinal conditions. Here are the two that the company is looking for approval from the FDA for at the moment:
- Chronic Idiopathic Constipation – First and foremost, SGYP ran several clinical trials assessing the effectiveness of plecanatide to treat chronic idiopathic constipation. All of the clinical trials surrounding the indication went incredibly well. As a result, earlier this year, SGYP submitted its first ever new drug application with the FDA. Shortly after submission, it was announced that the FDA has accepted the application for review. Now, investors are waiting for the FDA to make their decision regarding the treatment, which will come in January of 2017. After watching the data from the clinical trials Synergy Pharmaceuticals took part in surrounding plecanatide for the indication of chronic idiopathic constipation, it’s hard to imagine that the FDA will decide not to approve the treatment. Everything I’ve seen surrounding the treatment has been overwhelmingly positive, proving statistically significant results at every step.
- Irritable Bowel Syndrome With Constipation – The second indication that SGYP is working on with regard to plecanatide is Irritable Bowel Syndrome with Constipation, also known as IBS-C. So far, the company has completed a few different clinical trials surrounding the treatment, and the trials have shown overwhelmingly promising results. At the moment, the company is working on 2 Phase 3 clinical trials, putting together the final data before submitting the drug to the FDA for this indication. Once again, things seem to be overwhelmingly positive.
Based on what I’ve seen from the clinical trials surrounding plecanatide, it only makes sense that the treatment will soon be approved as a treatment for both CIC and IBS-C. This leads to incredible upside potential in the long run.
Is An Acquisition On The Horizons
Another reason that I take an incredibly bullish stance on SGYP is the fact that the company is primed for the picking when it comes to a possible acquisition. In fact, earlier in the year, Allergan was at the table, discussing the terms of acquiring the company. While these discussions proved to be less than fruitful, Synergy Pharmaceuticals has quite a bit going for it and is a prime target for an acquisition. So, keep your eyes peeled for M&A news surrounding the company.
The Bottom Line
The bottom line here is that, while an acquisition would be great, SGYP doesn’t need an acquisition in order to come out ahead. What the company has done with plecanatide is nothing short of amazing and will likely lead to big profits in the long run. So, the possibility of an acquisition is nothing more than icing on the cake. All in all, signs seem to be pointing toward gains in the stock moving forward.
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What Do You Think?
Where do you think SGYP is headed moving forward? Join the discussion at TalkTRENDZ from CNA Finance!
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