Synergy (SGYP) PT Lifted to $19 at Canaccord Genuity; 'This Thang Don't Stank'

Canaccord Genuity analyst Corey Davis reiterated a Buy rating and boosted his price target on Synergy Pharmaceuticals (NASDAQ: SGYP) to $19.00 (from $11.00) in a note entitled "This thang don't stank." The price target hikes follows "best positive top-line results we could have hoped for from the first of its two Phase 3 trials for plecanatide in chronic idiopathic constipation (CIC)."

Both doses, 3.0mg and 6.0mg met the primary endpoint with flying colors by demonstrating statistical significance in the percentage of "durable responder" patients -- 21.0% of 3.0mg patients and 19.5% of 6.0mg-patients, compared to only 10.2% in placebo, the analyst highlighted.

"From a commercial standpoint, the most important data was the very low diarrhea side effect rate; at 5.9% and 5.5% for 3.0mg and 6.0mg," the analyst said. "These were roughly half of the 9.7% observed in Ph2, and one-third of Linzess' 16% seen in its CIC Ph3. Therefore, with efficacy just as good and the low diarrhea rate as a clear differentiator in the marketplace, we are raising our price target as we consistently do when drugs become de-risked; our discount rate drops from 25% to 15%, which bumps our target from $11 to $19."

Commenting on how big plecanatide can be, the analyst said, "this totally depends on who markets it. We have consistently stated for years that we think Linzess can be a $2B drug. And now with this impressive data (albeit still requiring 3 more large Phase 3's to mature) in hand, we see no reason why plecanatide couldn't have equal magnitude -- in the hands of the RIGHT marketing partner."

For an analyst ratings summary and ratings history on Synergy Pharmaceuticals click here. For more ratings news on Synergy Pharmaceuticals click here.

Shares of Synergy Pharmaceuticals closed at $7.78 yesterday.

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