NEW YORK (AP) — Synergy Pharmaceuticals reached a new high for the year in Tuesday trading, with Cantor Fitzgerald saying it expects higher sales of the company's experimental bowel drug.
THE SPARK: Analyst Irina Rivkind said she now thinks sales of the drug plecantide could rise to about $1.58 billion a decade from now. She had expected peak sales of about $1.05 billion. Rivkind maintained a "Buy" rating on Synergy shares, and raised her price target on the stock to $15 per share from $12.
The analyst based her revised opinion on new clinical trial data released by Synergy last week. Earlier this year it said plecantide met its main goal, as the drug worked better than a placebo in a 12-week study involving 951 patients with chronic idiopathic constipation.
Rivkind said that based on separate clinical trials, plecantide appears to be about as effective as Linzess, a drug that was approved last year as a treatment for irritable bowel syndrome with constipation and for chronic constipation. She added that patients in Synergy's studies were less likely to experience diarrhea as a side effect than patients in studies of Linzess, and patients who took plecantide were also less likely to drop out of testing for that reason.
She added that the latest data could also help attract potential acquirers for Synergy.
THE BIG PICTURE: Plecantide is in mid-stage clinical testing as a treatment for chronic idiopathic constipation and irritable bowel syndrome with constipation. Synergy is based in New York and it does not have any approved drugs.
Linzess was developed by Ironwood Pharmaceuticals Inc. and Forest Laboratories Inc. Forest started marketing the drug in mid-December and said sales totaled $19.2 million by Dec. 31.
SHARE ACTION: Synergy Pharmaceuticals Inc. shares rose $1, or 16 percent, to close at $7.24. Earlier the stock peaked at $7.44. The shares are up about 38 percent this year, and they have more than doubled in value since early November.
After the market closed, Synergy announced a $90 million stock offering. The underwriters of the sale will have the option to buy additional shares to cover any over allotments, and if all those shares are sold, the value of the offering will rise to $103.5 million.
Synergy Pharmaceuticals had 73.4 million shares on the market as of March 15. The company's stock lost 65 cents, or 9 percent, to $6.59 in after-hours trading.