Has Synergy Pharmaceuticals Become A Takeout Candidate Following 2 Recent Phase 3 Trial Successes?

Synergy Pharmaceuticals Inc (NASDAQ: SGYP) has announced the results from its second pivotal Phase 3 trial for plecanatide in constipation-predominant irritable bowel syndrome (IBS-C), reconfirming the robust efficacy and clean side effect profile of the drug candidate.

BTIG’s Timothy Chiang maintains a Buy rating on the company, with a price target of $11.

Second Successful Trial

The overall response rate for the second Phase 3 trial was 30 percent, which was higher than the rate reported in the first Phase 3 study, with diarrhea incidence continuing in the low- to mid-single digits.

The results for the second Phase 3 study were highly statistically significant for both the 3mg and 6mg doses evaluated, with the incidence of adverse effects remaining low in both groups.

Sales Potential

The analyst expects Synergy Pharmaceuticals to file a supplemental NDA for plecanatide in Q1 2017 and believes that the drug would receive FDA approval and witness meaningful sales in the United States.

The sales estimates for plecanatide for 2017 to 2020 are $35 million, $150 million, $330 million and $480 million, respectively.

“We remain positive on SGYP shares, and believe larger pharma companies could see value in acquiring the Co. for plecanatide,” Chiang mentioned.