Synergy Pharmaceuticals (SGYP) announced the top-line results from the first of two pivotal Phase III clinical trials studying two different plecanatide treatment doses in adult chronic idiopathic constipation (CIC). Plecanatide is being studied for the treatment of CIC and irritable bowel syndrome with constipation (IBS-C). It is a uroguanylin analogue. Uroguanylin is naturally produced by humans and plays a role in regulating gastrointestinal activity. According to the National Institutes of Health (NIH), about 63 million people in the U.S. are afflicted with chronic constipation.
The drug was viewed as safe and well tolerated at both doses. “We are very pleased with these results and how well they confirm earlier plecanatide data observed in the Phase II trial,” said Gary Jacob, chair and chief executive officer of Synergy in a statement. “These results strengthen our belief that plecanatide has the potential to not only effectively treat constipation but with a durability and tolerability profile that is ideal for chronic use. We look forward to the results of our second pivotal trial in the coming weeks.”
Investors clearly loved the news. Synergy stock jumped from $6.22 per share to a high of $7.92 and is currently trading for $7.78. The stock has been pretty flat for the last year, trading for $2.57 on Oct. 10, 2014, rising slightly to $2.91 on Feb. 23, 2015 and to $4.62 on Mar. 31, 2015.
A side effective of the drug is diarrhea, which was experienced by 5.9 percent of patients. This compares favorably to Ironwood Pharmaceuticals (IRWD)’s Linzess, which caused diarrhea in 16 percent of participants during clinical trials. Linzess was approved by the U.S. Food and Drug Administration (FDA) for the treatment of CIC in 2012. In its first quarter on the market, the drug sold $95 million in the U.S.
In an interview with BloombergBusiness, Jacob said, “All options are open at this point as to how we can maximize the value of our asset to our shareholders.”
Analysts see Synergy as a promising target for acquisition. “We view Synergy as an attractive takeout target following its positive Phase III data,” said Irina Rivkind Koffler, an analyst at Cantor Fitzgerald LP in a note to investors yesterday. She increased her target share price from $8.50 to $14.
Todd Campbell, writing for The Motley Fool, however, points out that Synergy does not have any products that it markets or, for that matter, any revenue. If the second clinical trial is successful, there is no guarantee the FDA will approve the drug. Today’s current spike may just be that, a spike.
Koffler also wrote in her research note that “In particular, we think that plecanatide would be complementary to Valeant Pharmaceuticals International, Inc. (VRX)’s gastrointestinal franchise after the recent approval of Xifaxan in IBSD.”
Of the four analysts reviews by TipRanks, all placed Synergy stock as a “Buy.”
June 18, 2015
By Mark Terry, BioSpace.com Breaking News Staff