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Synergy Pharmaceuticals, Inc. Message Board

  • frank_aldridge frank_aldridge Mar 18, 2014 3:09 PM Flag

    Cantor note out - $11 price target

    4Q:13 was immaterial, in our view: Synergy reported an operational loss
    of ($19.9M) and loss per share of ($0.22), slightly below FactSet consensus
    estimates of ($0.20). We summarize the quarter in Exhibit 1. 4Q:13 R&D
    expense came in nearly 27% above our estimates, though non-operating expense
    was meaningfully lower. Synergy currently has about $62M in cash on the
    balance sheet, which should provide the company with enough cash to operate
    through both its IBS-C and OIC data releases in 2Q:14. We maintain our
    Plecanatide forecasts at this time and anticipate the imminent launch of Linzess
    DTC promotion, which we believe should expand the IBS-C/CC market. We
    reiterate our BUY rating and $11 PT, which is based primarily on M&A
    valuation.

    We maintain our M&A valuation: We still estimate Plecanatide market entry
    at the end of 2016 and are staying with our prior 2023 U.S. peak sales estimates
    of $835M (and global revenues of $1.2B), while utilizing a 3x sales multiple. We
    continue to value the company as a potential take-out target since we think that
    the efforts of Ironwood and Forest have made the attractiveness of the GI market
    more apparent to larger drug companies. We note that recent takeout multiples
    in the GI space have been significantly higher (6-7x).

    Sentiment: Strong Buy

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