Synergy Pharma (SGYP) Posts Wider-than-Expected Loss in Q2


The share price of Synergy Pharmaceuticals Inc. (SGYP) decreased 5.5% after the company announced its second-quarter results on Aug 11.

Synergy Pharma reported second quarter 2014 loss of 28 cents per share, wider than the year-ago loss of 11 cents and the Zacks Consensus Estimate of a loss of 22 cents.

The biopharmaceutical company did not generate any revenues in the second quarter of 2014, as was the case in the year-ago quarter.

Research and development expenses at Synergy Pharma increased 170.3% to $24.5 million in the second quarter of 2014. General and administrative costs in the reported quarter decreased 18.7% to $2.3 million.

Focus on Plecanatide

Plecanatide is Synergy Pharma’s lead pipeline candidate. In Apr 2014, Synergy Pharma reported positive top-line results from a phase IIb dose-ranging study on plecanatide for treating patients suffering from irritable bowel syndrome with constipation (IBS-C).

Results showed that plecanatide was successful in showing statistically significant improvement in complete spontaneous bowel movement (:CSBM) frequency. The company now intends to initiate a phase III study on the candidate in patients suffering from IBS-C in the second half of the year. 

In Jul 2014, Synergy Pharma successfully completed an end of phase II meeting with the FDA and reached an agreement on the phase III IBS-C clinical development plan and primary endpoint for registration trials.  The trial is scheduled to begin in the fourth quarter of 2014 and will include two trials to evaluate the efficacy and safety of plecanatide (3.0 and 6.0 mg doses), consistent with the ongoing CIC registration trials.

Synergy Pharma is developing plecanatide for other indications as well. In Apr 2014, the company initiated a second phase III study on plecanatide in adults suffering from chronic idiopathic constipation (CIC.TO). In Nov 2013, the company initiated the first phase III study on plecanatide in adults suffering from CIC.

The study achieved the halfway mark for total enrollment in Jul 2014. The phase III studies are evaluating a dose-ranging regimen of plecanatide in comparison to placebo in patients suffering from CIC. Top-line data from the first study (initiated in Nov 2013) is expected in the second quarter of 2015.

We expect investor focus to remain on the company’s lead candidate, plecanatide, going forward.

Synergy Pharma also has SP-333 in its pipeline. The candidate is being developed for the treatment of patients suffering from opioid-induced constipation in a phase II study, which completed enrollment in Jul 2014. The company expects top-line data from the trial in the fourth quarter of 2014.

We note that the constipation market currently includes Ironwoo Pharmaceuticals/Actavis’(IRWD / ACT) Linzess.

Synergy Pharma currently carries a Zacks Rank #3 (Hold). Allergan (AGN) with a Zacks Rank #1 (Buy) is a better-ranked stock in the broader healthcare sector.

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