Synergy Pharma Hit By Double Whammy, Shares Plunge 71%

(RTTNews) - Shares of Synergy Pharmaceuticals Inc. (SGYP) slumped over 71% in extended trading on Thursday, following a disappointing business update.

The Company, which has been in discussions with numerous potential counterparties since May 2018, has still not found a buyer. "To date, the offers received to acquire Synergy have been significantly below the Company's current market value", noted Synergy.

But that's not all...

In parallel with the strategic review process, Synergy has been seeking to renegotiate the terms of its term loan agreement with CRG Servicing LLC, which was signed last September. The Company has delivered bad news on that front too, as it has been unable to further amend the agreement with respect to the financial and revenue covenants, and therefore, has decided to forego drawing down on any additional amounts pursuant to its term loan agreement.

The uptake of the Company's marketed drug, Trulance, in 2018 has been slower-than- anticipated due to a highly competitive market access environment and slower-than- anticipated overall market growth.

Trulance was approved for the treatment of Chronic Idiopathic Constipation (CIC) in adult patients in January 2017, and for treatment of irritable bowel syndrome with constipation (IBS-C) in adults, as recently as January 25, 2018. Trulance is an oral drug that has to be taken once daily.

So, given the not so favorable market, Synergy is projecting Trulance net sales for 2018 to be between $42.0 million to $47.0 million.

Under the terms of the agreement with CRG, Synergy will be required to repay principal and pay prepayment penalties in an amount equal to $38.0 million to $51.0 million if total net sales fall below the minimum revenue covenant of $61 million. Such principal repayment and prepayment penalties will be due no later than March 31, 2019, added the Company.

SGYP closed Thursday's trading at $1.40, up 9.38%. In after-hours, the stock was down 71.43% to $0.40.