![]() ![]() If another deal is closed and an upfront fee is received, Synergy could be looking at a break even or inching a profitable quarter this year. And in the fourth quarter (which will be the strongest), Synergy will probably burn a base of $20 million minus the second royalty of Cipher Pharma ( OTCPK:CPHRF) which will most likely reduce the cash burn to $5m to $12m net (considering an $8m to $15m Cipher royalty). ![]() This quarter net loss will probably be reduced to $13 million ($25m base minus $12m royalty from China deal). Given that the net loss was sub $30 million and RXs are growing, it means that the company has enough money and funding on hand to support operations until break even is established. The Possibility of a Cash Flow Positive Quarter Given Trulance's safety profile, Synergy should quickly start gaining RXs in 2019. Synergy won access to 83 million lives through Express Scripts Preferred Formulary. ![]() But for long-term investors, it was an opportunity to add shares, and as the news has been digested, the share price has started to climb, rallying 25% since Q2 results.įor longs, it was the news they needed to hear to know that 2019 is looking to be a ramp-up year. ![]() For many investors, bruised by previous disappointments by the company, it wasn't what they were expecting and decided to give up. Instead, investors got an announcement of the largest possible formulary win for the US, and a China deal for $12 million upfront and $56 million in milestone payments. It's no surprise that the share price right after the Q2 conference call was mostly flat as many longs and short sellers were expecting a partnership announcement on or before August 9th. To make things even better, Synergy reported Q2 earnings and the net loss came at only $29.7 million, significantly better than the $33 million that I had forecasted. As we will see later on, dilution risks have abated, and now the possibility of a cash flow positive quarter this year exists - which would provide a significant rally to the shares. One of Troy Hamilton's first orders of business was to bring Bob Gilkin as the vice president of market access, and that strategy is quickly paying off as Synergy scored a preferred placement on the Express Scripts ( ESRX) 2019 Preferred Formulary.Īs I mentioned in my article, it's all about insurance coverage, and Troy Hamilton and its team of market access have proven that they have what it takes to gain insurance coverage. In order for the share price to recover, three things needed to happen: Insurance wins, cash burn reduction, and strategic deals. Synergy’s flagship product, Trulance (plecanatide) is a once-daily tablet approved for adults with chronic idiopathic constipation (CIC) and irritable bowel syndrome with constipation (IBS-C), and its investigational compound, dolcanatide, is an incremental peptide with established proof-of-concept studies in multiple GI conditions.Synergy Pharmaceuticals ( NASDAQ: SGYP-OLD) CEO Troy Hamilton is quickly proving to be a very capable CEO and is proving skeptics that he understands what's needed to be done to turn the company around. Subject to approval of the Bankruptcy Court and the satisfaction or waiver of certain other closing conditions, the transaction is expected to close shortly after receipt of approval of the sale. The hearing to approve the sale is scheduled for March 1, 2019. Under the terms of the agreement, Bausch Health served as the stalking horse bidder in a sale process, which Synergy conducted pursuant to Section 363 of the Bankruptcy Code and court-approved bidding procedures. At that time, Bausch Health entered into a definitive agreement to acquire certain assets of Synergy. Bankruptcy Court for the Southern District of New York. As previously announced, in December 2018, Synergy filed a voluntary petition for reorganization under Chapter 11 with the U.S. ![]()
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