Synergy Pharmaceuticals (SGYP): The Real Battle Between Bears & Bulls

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Synergy Pharmaceuticals (NASDAQ: SGYP)

Synergy Pharmaceuticals has been a very interesting stock to watch as of late. Recently, the company released top-line data from the second of two Phase 3 studies looking into the experimental drug, plecanatide. The results showed that SGYP met its primary endpoint and pointed to an upcoming NDA. While we saw growth in the stock the day of the announcement, since then, we’ve seen a major battle between the bears and the bulls on the stock. Today, we’ll talk about what we’ve seen in the market and what we can expect to see moving forward. So, let’s get right to it…

What We’ve Seen From SGYP Since The Data Release

Since the plecanatide data was released, we’ve seen quite a bit of up and down activity. While the bulls see strong value in the stock, the bears have been shorting the heck out of it; leading to what I consider to be the ultimate battle between the bulls and the bears. Strangely enough, since the positive news from plecanatide, short interest seems to have risen. So, while the data provided the bulls with a reason to send the stock soaring, the bears have created incredible resistance at the top.

What We Can Expect From Synergy Pharmaceuticals Moving Forward

When it comes to SGYP, I have two conflicting opinions of what we’re going to see; depending on how far in the future you plan on looking. Here’s how I see it…

  • Pre-NDA Outlook – We know that the next step for Synergy Pharmaceuticals is to submit a new drug application with the FDA. However, until we see this actually happen, I think that the battle between the bears and the bulls will continue to rage on; keeping Synergy Pharmaceuticals between $9.76 per share and $8.21 per share.
  • Post-NDA Outlook – Nonetheless, that trading range isn’t likely to last forever. As a matter of fact, I’m expecting to see things change drastically as soon as the new drug application is submitted and more so after it has been approved. The reality is that if you look into the fundamental data associated with Synergy Pharmaceuticals, there’s absolutely no reason to be bearish on the stock. Therefore, as we continue to see good news in the race to get plecanatide to the market, we’re going to see resistance start to fade as the bulls take control.

All in all, I have an overwhelmingly bullish opinion of what we can expect from plecanatide in the long run; and I’m a firm believer that high short interest isn’t likely to last forever.

What Do You Think?

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

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2 COMMENTS

  1. Thanks for your article. I agree with your overall assessment about the short-selling interest since I have also been closely monitoring SGYP (and am long on it, as are all my stock trading friends). The short-sellers are waiting until they are confident no new PR will appear that morning and then they waiting for the stock to rise naturally from the oversold condition they are largely responsible for, and then they dive in with full force, short selling as many shares near the top as possible and then maliciously taking out the bids, forcing automatic program selling and investor panic selling along the way before they jump in to buy back their shorted shares and reap windfall profits on the difference. My assessment is that this is not a tug of war on true future value, but a malicious technical manipulation by the short-sellers at actual shareholder expense.

  2. Synergy ‘s full story is fascinating from a scientific viewpoint. The company’s products are among the numerous highlighted successes in my forthcoming book, ‘Cures vs. Profits: Successes in Translational Research’. The long term potential for clinical relevance is extremely high, and the company was founded on highly ethical principles and extremely sound basic research. I expect more good news with respect to anticancer activities, if and when that is looked at. Book due out from World Scientific in 2016. No conflicts to disclose wrt Synergy.

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