No energy for Synergy
Shares for Synergy Pharmaceuticals (NASDAQ: SGYP ) were down over 8% this week on the heels of a 9% fall last week. What's going on?
Synergy started the year off on a good note with positive results from its phase 2b/3 trial of plecanatide. The experimental drug for chronic idiopathic constipation met its primary and key secondary endpoints in the study. That news helped drive shares higher by 25%. But the stock has gone steadily downward since Jan. 17.
It's probably merely a coincidence that Synergy announced the closing of its merger with Callisto Pharmaceuticals on that date, especially since the deal has been in the works for months. The decline might be related to worries that Synergy won't be able to find a partner to bring plecanatide to market. Whatever the reason, shares have certainly lost the energy from earlier in January.
Why would that be a coincidence? Increasing the shares outstanding inevitably has a dilutive effect, does it not? I considered doing a put on it that day for that reason. Its still a strong small cap stock for the long run IMO though.