Synergy Pharmaceuticals (SGYP): Why It Should Be In Your Portfolio

Synergy Pharmaceuticals (NASDAQ: SGYP)

Synergy Pharmaceuticals has been the topic of quite a bit of debate lately. The stock has also been the victim of quite a bit of short manipulation. However, regardless of the debate and regardless of the manipulation, I believe that SGYP is a strong stock for just about any portfolio. The bottom line here is that the stock has plenty of upside potential with very little downside risk. Here’s why…

SGYP Will Climb On Plecanatide

Plecanatide is a new treatment developed by Synergy Pharmaceuticals for the treatment of gastrointestinal conditions. The drug has been through all phases of studies, meeting primary and secondary endpoints in every test. Perhaps more important than its incredible effectiveness is its tolerability. As a matter of fact, Synergy Pharmaceuticals’ plecanatide has a lower chance of causing adverse effects than the current market leader.

Plecanatide Next Steps Are Encouraging

The data surrounding Synergy Pharmaceuticals’ plecanatide was overwhelmingly positive. As a result, the company plans on submitting a new drug application with the United States Food and Drug Administration in December. If you’ve followed biotech for any length of time, chances are that you know what new drug applications do for biotech stocks. The reality is that the NDA will prove to be a strong positive catalyst for SGYP. Once the application is submitted, investors will get excited, pushing the value of the stock up in a big way.

After the NDA is submitted the next step will be approval for plecanatide from the FDA. While no one can tell you if any drug is going to be approved or rejected, SGYP has a good chance of getting plecanatide approved. After all, everything I’ve read in the study data releases was overwhelmingly positive. Again, we’re talking about a medication that reached all primary and secondary endpoints in each phase of testing – including proving effectiveness and tolerability. So, while I can’t see into the future, I do think that the future for plecanatide, and therefore Synergy Pharmaceuticals, is overwhelmingly positive.

SGYP May Also Be Acquired

There are several big companies in biotech that are currently placing a strong focus on the treatment of gastrointestinal conditions and Synergy Pharmaceuticals has found just that in plecanatide. However, SGYP is a relatively small company. This means that any one of the larger companies in the field are more than capable of snapping up SGYP and making plecanatide their own. If SGYP was bought out by another company, it would be a great thing for investors as there is surely going to be a premium involved.

I’m Not The Only Analyst With Positive Opinions

Other analysts are also looking at this stock in a positive light for all of the same reasons. As a matter of fact, BTIG recently initiated coverage on SGYP offering a “Buy” rating and a price target of $11. In the research report, BTIG analyst Timothy Chiang had the following to say…

We think SGYP’s plecanatide shows promise as a future treatment for CIC and IBS-C, which is a growing market category in the US. With ~45 million Americans suffering from chronic constipation and IBS, and companies like Allergan and Valeant focusing their marketing efforts on GI treatments, it seems logical to imagine SGYP as a takeover candidate.”

Final Thoughts

No matter how this goes, SGYP brings plecanatide to approval or a larger company buys them out, investors are going to end in the green. So, no matter how you slice it, SGYP is a great stock to have in your portfolio.

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 thoughts on “Synergy Pharmaceuticals (SGYP): Why It Should Be In Your Portfolio”

  1. Hi Joshua
    Nice analysis. I completely agree.
    I own Synergy warrant stock (SGYPW). Do you think these warrants will also deliver on the good news that is almost surely coming from Synergy?

    On another note, I’ve been following your reports on Biocept. Do you have any in insight into whats happening at Biocept?

    Reply
  2. Synergy’s story will be featured in my next book: “Cures vs. Profits: Successes in Translational Research”. These drugs have been 15 years in the making, and the findings are rock-solid. They are also very likely to be demonstrated to prevent colon cancer. I have no conflicts of interest other than plugging my book!

    Reply

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