Synergy Pharma shoots higher on plecanatide plans
NEW YORK (AP) — Shares of Synergy Pharmaceuticals Inc. jumped Wednesday after the company detailed its plans for developing its bowel drug plecanatide.
THE SPARK: Synergy reported its third-quarter results Wednesday, and said it has finished enrolling patients in a study of plecanatide as a treatment for chronic constipation. The drugmaker said it will release initial data from the study during the first week of January. Synergy also said it is getting ready to start a mid-stage trial of the drug as a treatment for irritable bowel syndrome and constipation.
THE BIG PICTURE: Synergy Pharmaceuticals does not have any approved drugs. Plecanatide is its most advanced experimental product, and the company also recently started clinical testing of a drug candidate called SP-333 as a treatment for ulcerative colitis.
THE ANALYSIS: Canaccord Genuity analyst Ritu Baral said there is a real need for treatments for chronic constipation that isn't being helped by current drugs, and plecanatide may fill that need. She added that unlike Forest Laboratories Inc. and Ironwood Pharmaceuticals Inc.'s drug Linzess, plecanatide does not appear to cause diarrhea.
Baral maintained a "Buy" rating on Synergy shares, with a price target of $7.
SHARE ACTION: Synergy Pharmaceuticals shares added 71 cents, or 22.7 percent, to $3.84 in afternoon trading. The stock touched an annual low of $2.98 on Monday.