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Synergy Pharma Posts Narrower-than-Expected Q1 Loss

Zacks Equity Research

Synergy Pharmaceuticals Inc. (SGYP) reported first quarter 2014 loss (excluding the change in fair value of financial instruments) of 18 cents per share, narrower than the year-ago loss and the Zacks Consensus Estimate of a loss of 24 cents.

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

Research and development expenses at Synergy Pharma declined 7.3% to $13.3 million in the first quarter of 2014. General and administrative costs in the reported quarter remained flat at $3.2 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 candidate was also safe and well tolerated at all doses during the study. The company now intends to initiate a phase III study on the candidate in patients suffering from IBS-C in the second half of this year.

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 phase III studies are evaluating a dose-ranging regimen of plecanatide in comparison to placebo in patients suffering from CIC. The primary objective of both these studies is to assess the overall responders for the 12-week treatment period. 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.

We note that the constipation market currently includes Ironwood Pharmaceuticals/Forest Laboratories’ (IRWD/FRX) Linzess.

Synergy Pharma currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks include Zacks Ranked #2 (Buy) Ariad Pharmaceuticals Inc. (ARIA).

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