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In The Spotlight: Synergy Pharma


For Synergy Pharmaceuticals Inc. (SGYP), whose shares are down 11% year-to-date, the worst may be behind it.

On February 1, 2018, the Company announced that it has met the cash balance requirement to access additional capital under a $300 million Term Loan Agreement with CRG Servicing LLC, a healthcare focused investment firm.

The debt agreement, signed last September, is in tranches, with the Company having borrowed $100 million at signing, a further $100 million to be accessed on or before February 28, 2018, and two $50 million tranches to be accessed on or before March 29, 2019, subject to certain conditions.

One of the conditions in order to assess the $100 million tranche is that Synergy should have equal or greater than $128 million in cash on January 31, 2018. With Synergy confirming that its cash balance at the end of January was in excess of $128 million, it means that that the Company has met the financial requirement to access additional capital by February 28, 2018.

As of September 30, 2017, the Company had about $118 million in cash, and in the following month, had announced a $53 million stock offering.

The Company has one marketed drug, Trulance, which was approved for the treatment of Chronic Idiopathic Constipation (CIC) in adult patients in January 2017, and for treatment of irritable bowel syndrome with constipation (IBS-C) in adults, as recently as January 25, 2018. Trulance is an oral drug that has to be taken once daily.

Sales of Trulance have increased since its launch as can be seen from the numbers - $98 thousand in the first quarter of 2017; $2.31 million in Q2, 2017, and $5.01 million in Q3, 2017. The recent label expansion is sure to boost sales of Trulance in the coming quarters.

The Company is slated to release its financial and operating results for the fourth quarter and full year ending December 31, 2017 on March 1, 2018.

With Synergy Pharma taking all steps to effectively manage costs while simultaneously investing in strategic initiatives that deliver growth to the Company's top-line, it is worth keeping an eye on this stock.

SGYP has traded in a range of $1.68 to $6.64 in the last 52 weeks. The stock closed Friday's (Feb.2) trading at $1.98, down 3.41%.

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