SGYP is clearly undervalued given the positive Phase III data in hand, and even more so when compared to its natural proxy in the marketplace, namely Linzess
Let's walk through the high level metrics for a quick comparison
IRWD is currently valued over $1.4 Billion with an approved product of which they control only 40%. Extrapolate out the value of Linzess, deducting a nominal value for the rest of ironwoods pipeline, and the market currently values Linzess at $3 Billion globally. that's based on 1 quarter of sales!
Plecanatide has positive phase III data with excellent efficacy and improved tolerability vs Linzess, SGYP controls 100% of the global rights to the drug and the balance sheet has been cleaned up nicely. If we aggressively discount Plecanatide vs Linzess due to market timing, say by 50% we have a value of $1.5 Billion. Let's further discount Plecanatide by an additional aggressive 30% due to the remaining regulatory milestones and we have a $1 Billion dollar valuation or $15. Note the analyst average 12 month target valuation for SGYP is $14
We are an undervalued gem!
Sentiment: Strong Buy