U.S. Markets open in 2 hrs 4 mins

Analyst rates Synergy Pharma shares as 'buy'

The Associated Press

Synergy Pharmaceuticals Inc. is seeing growing investor interest due to its potential treatment for bowel syndrome, said a Cantor Fitzgerald analyst who started coverage of the drug developer with a "buy" rating.

THE OPINION: Analyst Irina Rivkind said in a Tuesday morning note that the market opportunity for the New York-based company's potential treatment, plecanatide, is attractive but smaller than Linzess, a treatment developed by Ironwood Pharmaceuticals Inc. and Forest Laboratories that recently was approved by the U.S. Food and Drug Administration.

The agency approved Linzess as a treatment for irritable bowel syndrome with constipation and for chronic constipation that is not helped by other treatments. Both conditions are believed to affect tens of millions of people in the U.S. The companies plan to launch the drug during this year's fourth quarter.

Synergy's drug is in mid-stage testing, and Rivkind said its effectiveness may be somewhat weaker based on data from a small study involving patients with chronic constipation. Data from another trial is expected to be released in December, and the analyst said the company could become an acquisition target if plecanatide does well.

Synergy has no products on the market and also is developing potential treatments for shingles and ulcerative colitis.

THE STOCK: Up 3 cents to $4.74 in Tuesday afternoon trading. Its shares have traded in a 52-week range of $3.17 to $7.08.