NEW YORK (TheStreet) -- Shares of Synergy Pharmaceuticals (SGYP) rallied 4.43% to $4.48 after Canaccord Genuity initiated coverage on the New York City-based biopharmaceutical company with a "buy" rating and price target of $11.
Synergy Pharmaceuticals has four Phase 3 trials maturing over the next 12 months in chronic idiopathic constipation (CIC) and constipation-predominant irritable bowel syndrome (IBS-C), all of which are predicted to have a high likelihood of success and in a large market that Actavis (ACT) is still developing with Linzess, according to Canaccord Genuity.
Synergy Pharmaceuticals owns the full worldwide rights on plecanatide, the company's lead uroguanylin analog in late-stage clinical development to treat chronic idiopathic constipation (CIC) and irritable bowel syndrome with constipation (IBS-C), according to Canaccord Genuity.
"We think Linzess has $2 billion peak potential, and perhaps plecanatide has as much -- depending on the strength of the data and who ultimately ends up marketing it," said Canaccord Genuity analyst Corey Davis. "Plecanatide is on the brink of having four large Phase 3 trials readout and, if successful, would have the same two indications as Linzess -- CIC and IBS-C."
Plecanatide would compete with Linzess, but Canaccord projects that the market is large enough to support two products, yet the Phase 3s will reveal whether the efficacy is at least as equivalent and whether it truly has less of the diarrhea side effect -- the primary differentiating goal.