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Synergy Pharma's Q3 Loss Narrower than Expected

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Synergy Pharmaceuticals Inc. (SGYP) currently has no approved products. The company however has progressed well with its pipeline in the last few quarters.

Earlier this week, Synergy Pharma reported third quarter 2013 loss (excluding the change in fair value of derivative instruments) of 15 cents per share, which remained flat year over year but was narrower than the Zacks Consensus Estimate of a loss of 17 cents per share.

The biopharmaceutical company did not generate any revenues in the third quarter of 2013, as was the case in the year-ago quarter.

Research and development expenses at Synergy Pharma climbed 30.8% to $10.8 million in the third quarter of 2013. The increase was due to Synergy Pharma’s efforts to develop its pipeline. General and administrative costs in the reported quarter spiralled 46.1% to $2.7 million.

Focus on Plecanatide

Plecanatide is Synergy Pharma’s lead pipeline candidate. In Nov 2013, the company initiated a phase III study (n~1350) on plecanatide in adults suffering from chronic idiopathic constipation (:CIC). The phase III study will be evaluating a dose-ranging regimen of plecanatide in comparison to placebo in patients suffering from CIC. The primary objective of the study will be to assess the overall responders for the 12-week treatment period.

Plecanatide is also being developed for treating patients suffering from irritable bowel syndrome with constipation (IBS-C) in a phase IIb study. Synergy Pharma expects to enrol the last patient for the study by year end and release top-line data from this study in the first quarter of 2014. 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 Hives FV-100 Assets

In Aug 2013, ContraVir Pharmaceuticals, Inc. – currently a subsidiary of Synergy Pharma – filed a Form 10 Registration Statement with the U.S. Securities and Exchange Commission (:SEC) for the planned spin-off of ContraVir to Synergy Pharma shareholders. ContraVir now holds the rights to FV-100 9 (shingles). Through this move Synergy Pharma intends to focus on its core areas of strength.

Synergy Pharma currently carries a Zacks Rank #2 (Buy). Right now, Jazz Pharmaceuticals Public Limited Company (JAZZ) looks more attractive in the pharma sector with a Zacks Rank #1 (Strong Buy).

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