Keep an eye on Synergy Pharmaceuticals (SGYP) this month: Analysts like it, its shares have waned since a big spike this summer, and the official filing of its star product is expected any day.
When the New York-based pharmaceutical company, which specializes in gastrointestinal therapy, announced that it passed clinical trials on its flagship drug plecanatide this summer, shares rocketed 95%.
But today analysts appear mystified at why the stock has receded 45% from its July high, especially with plecanatide's new drug application with the Food and Drug Administration expected this month. (It's currently trading below $6, and the consensus price target is over $13, according to data provided by Bloomberg.)
Synergy should be raking in $600 million from plecanatide, a daily tablet that treats patients with irritable bowel syndrome (IBS), within five years of obtaining FDA approval (expected in 2017, according to equity research firm BTIG. Synergy currently has a market capitalization of just $645 million.
BTIG's $11 price target is also buoyed by roughly $142 million on the balance sheet, as well as newly appointed management including CFO Gary Sender and COO Troy Hamilton, both former executives at pharma success story Shire (SHPG). Though Shire shares are down just under 4% over the past 12 month, they have rocketed 112% over the past two years.
Synergy also stands to benefit from a growing demand for gastrointestinal treatments, feeding the appetite of Big Pharma for potential acquisitions, according to BTIG.
"With about 45 million Americans suffering from chronic constipation and IBS, and major companies like Allergan(AGN) and Valeant (VRX) focusing their marketing efforts on GI treatments, it seems logical to imagine SGYP as a takeover candidate," BTIG analyst Timothy Chiang wrote in a November report.
Whether or not this leads to a buyout or another stock surge, Synergy certainly can be counted on for a healthy dose of small-cap volatility as its chief product takes the final steps toward reaching its customers.