Key Appointment Marks Another Win For Synergy Pharmaceuticals

Synergy Pharmaceuticals (NASDAQ:SGYP) has been a stock on the move over the past few weeks based on the the billion-dollar potential of its pipeline and increasing analyst coverage that has attracted a significant amount of new trading volume. Synergy's short and long term prospects have also been strengthened by a recent news development of a competitor setback that may help the company play catch up to the developmental edge held by rival Ironwood Pharmaceuticals (NASDAQ:IRWD). Ironwood's competing product is slated to make it to market first, although Synergy's product has thus far not caused any side effects, while Ironwood's has.

The potential displayed by Synergy over the past few months with the early successes of its chief product candidate, Plecanatide (for the treatment of chronic idiopathic constipation and constipation-predominant irritable bowel syndrome) sparked the positive analyst coverage. It has drawn the interest of investors and analysts, but a key move by Pfizer (NYSE:PFE) last week indicating that the company may soon be on the merger and acquisition prowl may have created the perfect storm for Synergy, as it can now be considered a nice buyout target at a time when many big money-makers are coming off patent for large pharmaceutical companies.

That speculation was only boosted on Wednesday as Synergy appointed to its board Gail M. Comer, M. D. as Chief Medical Officer - a new position created that will report directly to the President and Chief Executive Officer, Gary S. Jacob, Ph.D. The appointment of a CMO alone is not an indicator that would lead to additional speculation on the part of investors, but in the case of Dr. Comer, it's the recent job description that raises the temperature.

Dr. Comer served most recently, according to Wednesday's press release concerning the appointment, as Senior Director of the BioTherapeutics Research Unit at Pfizer. Given its recent moves by Pfizer to increase the cash position as a possible precursor to sealing some partnership or acquisition deals, any connection of PFE to a small company like Synergy with a potential money-making pipeline is noteworthy. But speculation aside, the appointment is also noteworthy because of Dr. Comer's resume and experience in the industry. Any time a developmental company lands such experience it provides a dose of instant credibility - let alone connections - that could make the task of navigating a new drug to market that much smoother.

Synergy's impressive run over the past couple of weeks has stalled a bit at the six dollar mark, but volume has not still been flowing in at an increased pace. It's not unusual to see such a stall and consolidation after a stock runs so quick and investors may be still taking positions before pending developments unfold.

Shares were up by over two percent during the morning hours on Wednesday after the news of Dr. Comer's appointment hit the wires.

In Wednesday's press release Dr. Comer noted that,

Synergy's GC-C receptor agonist program represents an innovative and exciting technology platform that I believe offers great potential for the treatment of patients with GI disorders and diseases. I believe the depth of my experience in clinical development specifically in gastroenterology will play a pivotal role in maximizing Synergy's clinical potential with these drugs, and am very pleased and excited to be joining Synergy at this opportune time.

Synergy continues to be a hot stock and story to watch.

Disclosure: Long SGYP.