Synergy Pharmaceuticals Inc (NASDAQ: SGYP) is having a relatively strong start in the pre-market hours this morning, and for good reason. The company announced the sale of exclusive rights to its flagship product in the Canadian territory, which is leading to excitement among investors and sending the stock toward the top. Today, we’ll talk about the asset sale, what we’re seeing from the stock, and what we’ll be watching for ahead.
SGYP Gains On Asset Sale
As mentioned above, Synergy Pharmaceuticals is having a relatively strong start to the trading session this morning after announcing that it has made the decision to sell Canadian rights to its flagship product under a licensing agreement. In a press release issued early this morning, the company announced that Cipher Pharmaceuticals has acquired exclusive Canadian rights to develop, market, distribute, and sell the company’s flagship product, TRULANCE®.
TRULANCE has been previously approved by the United States Food and Drug Administration for the treatment of chronic idiopathic constipation as well as irritable bowel syndrome with constipation. According to the release, SGYP will be receiving an upfront payment of $5 million. On top of that, the company is eligible to receive an additional milestone payment as well as royalties from the product sales in Canada. Finally, SGYP will be responsible for manufacturing and supplying the product to Cipher. In a statement, Robert Tessarolo, President and CEO at Cipher, had the following to offer with regard to the acquisition of rights:
We are excited at the prospect of bringing an innovative new product to market that would be a safe and effective treatment option for many Canadians who suffer from these chronic GI disorders… TRULANCE has established a strong and remarkably consistent efficacy and safety profile in clinical trials with more than 4,700 CIC and IBS-C patients.
Our growth strategy is aimed at assembling a diversified portfolio of prescription medicines across a range of therapeutic areas. This agreement brings a new and differentiated GI product into our Canadian portfolio and demonstrates the continued execution of our strategy. We are targeting a New Drug Submission to Health Canada later this year and potential approval and product launch in 2019.
The above statement was followed up by Troy Hamilton, CEO at SGYP. Here’s what he had to offer:
As an emerging leader in the Canadian healthcare industry, Cipher is an ideal partner to commercialize TRULANCE in Canada. Their impressive management team and track record of successfully commercializing medicines in Canada were critical decision-making factors in this collaboration…. This licensing agreement demonstrates our unwavering commitment to bring TRULANCE to as many patients and their health care providers as possible.
What We’re Seeing From The Stock
As investors, one of the first lessons that we learn is that the news moves the market. In this particular case, the news proved to be overwhelmingly positive. After all, under the new agreement, a new revenue stream will likely open up for Synergy Pharmaceuticals. So, it’s no surprise to see that the stock is making its way upward in the market today. Of course, our partners at Trade Ideas were the first to alert us to the gains. Currently (7:33), SGYP is trading at $1.95 per share after a gain of $0.07 per share (3.72%) thus far today.
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What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on SGYP. In particular, we’re interested in following the collaboration with Cipher, sales efforts surrounding TRULANCE in the United States, and looking out for other potential collaborations around the world. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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