(MENAFN Press) (EMAILWIRE.COM, April 16, 2012 ) New York, NY -- VFC's Stock House, an information and research outlet that brings ideas and opens discussions to a broad spectrum of investors, believes that pending catalysts and distinct advantages over its competition could help Synergy Pharmaceuticals (SGYP) achieve billion dollar status before long.
Summer Street initiated coverage with a price target of 9, Brean Murray's rating was accompanied by a price tag of 13, and just a couple of weeks ago Roth Capital threw its own prediction into the mix with a target of 12.
As of Tuesday afternoon, SGYP was trading for just a tad above the four dollar mark on below average volume, so what are the analysts seeing right now that investors have not yet caught on to?
The answer lies with the company's lead product candidate, Plecanatide, which has just recently reached the halfway enrollment point of an ongoing Phase II/III trial that, if successful, could quickly lead the stock to the price levels predicted by the analysts and position the company to enter into the gastrointestinal disorders & diseases market, which in the US alone is expected to exceed the 20 billion mark on an annual basis by the time Plecanatide would reach commercialization, according to some estimates.
Clinical trials are currently underway to test effectiveness of Plecanatide in treating chronic idiopathic constipation (CIC) and constipation-predominant irritable bowel syndrome (IBS-C). The results of these trials are highly expected to turn out positive, as cited by the above-mentioned analysts, because the mechanism of action behind the treatment has already been tried and tested - and proven successful - with Linaclotide, a product developed by Ironwood Pharmaceuticals (IRWD) that shares origins with Plecanatide.
The mid and late stage successes of Linaclotide have launched Ironwood's share price to a over sixteen dollars at its peak during the past 52 weeks, which placed the company's market capitalization at right around a billion and a half.
Currently IRWD's market cap is roughly 1.3 billion.
Ironwood has already landed multiple partners for its product candidate and seen it's share price increase significantly. There's no reason to believe that Synergy cannot achieve the same level of success - if not more - for its own product, given the distinct advantages noted above and assuming the continued trend of positive efficacy.
Whether Synergy decides to go-it-alone or whether a partner is brought on board - or even whether the company is outright purchased - it's entirely possible that we are looking at a future billion dollar company in the making.
Judging by the price targets issued by the analysts over the past few weeks, it looks like there's at least a few out there who would tend to agree.
This one could become a big mover for 2012.
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