Late Thursday Synergy secured approval for a new constipation drug that will compete against a similar drug from Ironwood and Allergan, which has already been on the market for four years. The drug, Trulance, has a label that's very similar to Linzess, analysts say.
"We are thrilled with the approval of Trulance because it provides an additional, much-needed, new treatment option to help adults with chronic idiopathic constipation and their health care providers manage this condition," said Gary Jacob, CEO of the company, in a statement.
The company regained nearly all of the ground it lost Thursday in premarket trading Friday, up 1.1%, hitting $6.50 per share.
Meanwhile, Ironwood did not move ahead the of market's open. Allergan shares barely moved ahead of market's open Friday, falling eight cents to $214.50.
The one issue that could affect the uptake of Trulance is the reported side effect of diarrhea.
"We still expect the much lower diarrhea rate for plecanatide [Trulance] vs. Linzess to be instrumental in plecanatide commercial preference and success," analyst John Newman of Canaccord wrote in a note.