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Pipeline Progress at Synergy Pharma

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Synergy Pharmaceuticals Inc. (SGYP) recently announced that it has reached an agreement with the U.S. Food and Drug Administration (:FDA) on the clinical development plan for its pipeline candidate plecanatide.

We note that Synergy Pharma is developing plecanatide for the treatment of patients suffering from chronic idiopathic constipation (:CIC).

As per the agreement with the FDA, Synergy Pharma will initiate a phase III study by year end to evaluate the safety and efficacy of plecanatide in CIC patients.

The FDA has also agreed on the design, duration, size and primary and secondary efficacy endpoints of the phase III studies.

We are encouraged by the pipeline progress at Synergy Pharma. In May 2013, Synergy Pharma reported positive results from a multicenter trial on plecanatide for the CIC indication.

Synergy Pharma observed statistically significant improvement in the number of complete spontaneous bowel movements among patients, who were administered three doses of plecanatide.

We remind investors that Synergy Pharma is also developing plecanatide for the treatment of irritable bowel syndrome with constipation (IBS-C). The company initiated the first trial in IBS-C patients in late 2012.

Currently, a phase IIb trial evaluating plecanatide in IBS-C patients is underway and Synergy Pharma expects to release top-line data from this trial in the first quarter of 2014.

We expect investor focus to remain on updates regarding the development of plecanatide. The successful development and commercialization of plecanatide would be a major positive for Synergy Pharma, which currently has no approved drug.

However, plecanatide is expected to face stiff competition on approval. The constipation market already includes Ironwood Pharmaceuticals/ Forest Laboratories’ (IRWD/FRX) Linzess.

Synergy Pharma currently carries a Zacks Rank #3 (Hold). Right now, Shire (SHPG) looks attractive with a Zacks Rank #2 (Buy).

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