NEW YORK, NY / ACCESSWIRE / March 15, 2019 / Bronstein, Gewirtz & Grossman, LLC notifies investors that a class action lawsuit has been filed against Synergy Pharmaceutical, Inc. ("Synergy" or the "Company") (SGYP) and certain of its officers, on behalf of shareholders who purchased or otherwise acquired Synergy securities during the period between September 5, 2017, and October 25, 2018, (the "Class Period"). Such investors are encouraged to join this case by visiting the firm's site: www.bgandg.com/sgyp.
This class action seeks to recover damages against Defendants for alleged violations of the federal securities laws under the Securities Exchange Act of 1934.
On September 5, 2017, Synergy entered into a $300 million senior secured loan from CRG Partners III L.P. ("CRG" and the "CRG Loan"), which in its initial incarnation provided an immediate cash infusion of $100 million with a second $100 million tranche of financing less than six months later, on or before February 28, 2018, and a third tranche of up to $100 million in the following thirteen months.
On September 7, 2017, on a Business Update call, the Company touted the potential for its lead product - TRULANCE - and the purportedly positive indicators in its launch to the marketplace. TRULANCE is a drug for the once-daily treatment of chronic idiopathic constipation ("CIC"). The Company described TRULANCE as a "high value asset" backed by the "right strategy and the right team." Defendants also portrayed the CRG Loan as a coup, providing the Company "with access to additional capital if and when" Synergy would need it.
As disappointing results trickled in and the Company struggled to meet the covenants of the CRG Loan, Defendants continued to assure the market that: (i) the Company was well-positioned for a revenue windfall from TRULANCE; (ii) Synergy could comply with the terms of the CRG Loan and would be able to gain access to needed capital; and (iii) if the Company was threatened with noncompliance, the Company's partnership and relationship with CRG was both strong and flexible enough to yield a favorable compromise.
Indeed, Defendants were so steadfast in their representations regarding TRULANCE's potential and the Company's future outlook that they initiated a strategic review because the marketplace was vastly undervaluing Synergy. However, in reality, Defendants were hoping for a white knight acquirer or a financing partner to save the Company from noncompliance with the covenants of the CRG Loan because of TRULANCE's disappointing results and the Company's failure to cash-in on the product's potential. All the while, Defendants either misleadingly affirmed that the Company was expected to meet or exceed the covenants' requirements, or failed to disclose to the market the reality: TRULANCE had underachieved and the Company was burdened with covenants that it could not satisfy.
Finally, on October 25, 2018, the Company shocked its investors and the market by revealing that: (i) TRULANCE had substantially disappointed and that its launch and integration into the marketplace was not as successful as represented; (ii) as a result, the Company faced substantial risk that it would not be able to satisfy the minimum revenue, market capitalization and liquidity requirements in the CRG Loan; (iii) Synergy's efforts to renegotiate the terms of the CRG Loan had proven unsuccessful; and (iv) the strategic review process had failed to yield a "white knight" or financing alternative and was unlikely to do so prior to default on the Company's covenants to CRG.
Following this news, Synergy's stock price fell $0.97 per share, or 69.3%, to close at $0.43 per share on October 26, 2018.
A class action lawsuit has already been filed. If you wish to review a copy of the Complaint you can visit the firm's site: www.bgandg.com/sgyp or you may contact Peretz Bronstein, Esq. or his Investor Relations Analyst, Yael Hurwitz of Bronstein, Gewirtz & Grossman, LLC at 212-697-6484. If you suffered a loss in Synergy you have until April 12, 2019 to request that the Court appoint you as lead plaintiff. Your ability to share in any recovery doesn't require that you serve as a lead plaintiff.
Bronstein, Gewirtz & Grossman, LLC is a corporate litigation boutique. Our primary expertise is the aggressive pursuit of litigation claims on behalf of our clients. In addition to representing institutions and other investor plaintiffs in class action security litigation, the firm's expertise includes general corporate and commercial litigation, as well as securities arbitration. Attorney advertising. Prior results do not guarantee similar outcomes.
Bronstein, Gewirtz & Grossman, LLC
Peretz Bronstein or Yael Hurwitz
212-697-6484 | firstname.lastname@example.org
SOURCE: Bronstein, Gewirtz and Grossman, LLC
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