For All Practical Purposes Synergy Pharmaceuticals Makes Sense

Synergy Pharmaceuticals (Nasdaq:SGYP) is a biopharmaceutical company that develops drugs treating gastrointestinal disorders and diseases. The company, located in New York and headed by Gary S. Jacob, Ph.D, President and Chief Executive Officer, is well positioned to deliver value to the medical community, patients, and investors by treating well-known medical disorders, in an established market.

Targeted disorders

Chronic constipation (CC) is common gastrointestinal disorder of which reportedly up to 34 million Americans are affected, and appropriately 8.5 million of them have such a severe condition that intervention is required. The problem is not unique to the U.S as other developed countries have like statistics. In many cases, chronic constipation affects all aspects of an individual's life, including work, family and social situations, as the discomfort level is nearly unbearable. Symptoms include hard stools, infrequent and straining bowel movements.

Irritable bowel syndrome (IBS), a condition noted for disturbed bowel function and extreme abdominal pain, affects individuals in three forms - diarrhea-predominant (IBS-D), constipation-predominant (IBS-C) and mixed or alternating disorder (IBS-M). Of notable mention is that all forms of IBS represent approximately 12% of adult visits to primary care physicians in the US, a significant factor in medical costs. Approximately 20 million people in the U.S. and European Union are affected by IBS-C.

Plausible solutions

Synergy's lead proprietary drug candidate is named plecanatide and is a synthetic analog of the human gastrointestinal hormone uroguanylin. It functions by activating the guanylate cyclase C receptor on epithelial cells of the GI tract. To put a straightforward description on it, its effective thus far in test results. Last week, the company announced news regarding its ongoing plecanatide Phase II/III clinical trial in chronic idiopathic constipation (CIC) patients. Over 800 patients have been screened, resulting in a total of 440 randomized, enrolled patients to date. The company designed the trial (initiated in October of 2011 with over 100 sites involved) to enroll 880 patients to achieve 800 qualified patients. Company officials anticipate the completed enrollment to occur in the third quarter of 2012, with data being reported in the fourth quarter.

The quick data turn-around is most beneficial for investors and stakeholders. Short trials equal quick results, netting the possibility of additional Phase III trials or the possibility of fast tract approval.

The plecanatide CIC trial, entitled "A Randomized, 12-Week, Double-Blind, Placebo-Controlled, Repeat-Dose, Oral, Dose-Ranging Study to Assess the Safety and Efficacy of Plecanatide in Patients with Chronic Idiopathic Constipation - Protocol SP304-20210," includes 3 doses of plecanatide (0.3, 1.0, 3.0 mg) and a placebo arm.

The company developed a patient reported outcome (PRO) questionnaire for CIC symptoms that is being validated in the study. The primary endpoint is a responder analysis based on improvement in the number of complete spontaneous bowel movements in 9 of the 12 weeks of the treatment period. The company put together a nationwide advertising campaign for the study to encourage patients to participate.

Synergy also plans to execute a plecanatide Phase II clinical trial in constipation-predominant irritable bowel syndrome (IBS-C) patients in the second half of 2012, the first such study in this patient population. An estimated 40 U.S. sites and 300 patients will be involved.

One of the significant benefits of data to date is that Synergy's results have not caused significant side affects, (most notable was diarrhea in a competitor's (Ironwood Pharmaceuticals' (IRWD) product Linaclotide, designed for treating (IBS-C). That factors matters significantly, especially to the patient. Left with a choice, its obvious what treatment would be preferable.

With progress comes legitimacy and stability

In February 2011, the company was granted a U.S. Patent that covers its drug candidate PLECANATIDE SP-333, designed to treat inflammatory bowel disease (IBD). During the 2011, the company raised aggregate gross proceeds of $34.4 million from the sale of its securities and reported cash and equivalents on hand as of December 31, 2011 of $13.2 million, a significant improvement as compared to $1.7 million on December 31, 2010. Net loss for the twelve months ended December 31, 2011 was $14.5 million or $0.30 per share, as compared to a net loss of $15.2 million, or $0.34 per share, for the twelve months ended December 31, 2010. The company spent $13.4 million in Research & Development.

Capping off a significant year, Synergy's common stock was listed on The Nasdaq Capital Market on December 1, 2011. Synergy Pharmaceuticals is currently trading at $4.05 with a 52wk Range:1.86 - 5.24. Its Market Cap is $219.94M.

While the firms stock is on the higher end of its 52 Week range, positive results and news catalysts from its multiple clinical trials, should deliver an increase in value of the stock price. At the core, the company is on the cusp of delivering remedies for easily identifiable afflictions that affect millions of the population. Potentially reducing the sheer number and expense of visits to general practitioners, would be considered a valuable achievement, one very possible if trial results continue to be positive.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.