Synergy Pharmaceuticals Inc. (SGYP - Snapshot Report) recently priced its public offering of 16.4 million shares of its common stock, with an overallotment option for an additional 2.5 million shares.
Synergy Pharma expects to raise around $90.1 million from the public offering before deducting underwriting discounts and commissions and other estimated offering expenses that are payable by Synergy Pharma. The offering is expected to close on or about Apr 16, 2013.
Synergy Pharma intends to utilize the net proceeds from the public offering primarily for the development of its pipeline. The company also has plans to use the net proceeds for working capital and other general corporate purposes. Synergy Pharma may invest an amount for acquisitions of other companies, products or technologies. The company is however yet to plan for any such acquisition.
We note that Synergy Pharma has several candidates in its pipeline. The lead candidate at Synergy Pharma is plecanatide. In Jan 2013, Synergy Pharma reported positive data from a phase IIb/III study on plecanatide, being developed for the treatment of patients suffering from chronic idiopathic constipation (CIC).
Moreover, in Dec 2012, Synergy Pharma initiated a phase IIb study with plecanatide for the treatment of patients suffering from constipation-predominant irritable bowel syndrome (IBS-C). The trial is evaluating the average change in complete spontaneous bowel movements (CSBMs) during the course of the therapy (12 weeks) in comparison to their baseline weekly CSBM rate established during the screening phase of the study.
Synergy Pharma also has SP-333 in its pipeline. The company has completed a phase I placebo-controlled, dose-escalating, single-dose study on the candidate, for the treatment of inflammatory bowel disease (IBD) including ulcerative colitis (UC). In Jan 2013, the company initiated a phase I multiple-ascending-dose clinical study on SP-333 in healthy volunteers.
Synergy Pharma, a biopharmaceutical company, currently carries a Zacks Rank #4 (Sell), reflecting short-term pressure on the stock. Other biopharmaceutical stocks such as UCB (UCBJF - Snapshot Report) , Athersys Inc. (ATHX - Snapshot Report) and Celgene Corporation (CELG - Analyst Report) currently look more attractive. While UCB and Athersys carry a Zacks Rank #1 (Strong Buy), Celgene carries a Zacks Rank #2 (Buy).