Synergy Pharmaceuticals (NASDAQ:SGYP)
- Synergy Put a $50 million At-The Market financing facility in place.
- This extends cash runway to November
- We Expect a further secondary offering later this year
Details
Synergy put a $50 million financing facility in place this week. At Red Acre we've been expecting some kind of move from SGYP to raise cash during the first half of 2014. When we met with SGYP CEO Gary Jacob at the JP Morgan Global Healthcare conference, he indicated that 2014 is big year for SGYP and that the company would need to raise additional cash in order to properly fund all of their planned clinical trials.
This financing effectively extends the cash runway out to the end of November for the company. We still expect the company to do a proper secondary offering some time after results are announced in the phase-2 clinical trial of plecanatide in constipation predominant irritable bowel syndrome (IBS-C).
After this ATM facility, the company may wait until after their second catalyst of the year, a phase 2 trial of SP-333 in opioid induced constipation (OIC) reading out this summer.
Red Acre Take Away
SGYP should be announcing the start of their second phase 3 trial of plecanatide in chronic idiopathic constipation any day now. We see the ATM facility as a net positive for SGYP because it removes the short-term financing concerns while the company and investors await the IBS-C trial results.
