Synergy Pharmaceuticals Inc (NASDAQ: SGYP) is having an incredibly strong start to the trading session this morning. However, the company hasn’t released any press releases or SEC filings that would be a reason for the gains seen this morning. Nonetheless, there is a good reason here. Today, we’ll talk about:
- Why SGYP is headed up;
- what we’re seeing from the stock; and
- what we’ll be watching for ahead.
Here’s What’s Going On With SGYP
As mentioned above, Synergy Pharmaceuticals is having an incredibly strong start to the trading session this morning but has released no news to couple the gains. So, what’s the deal? Well, it seems to all revolve around a recent announcement made by the company.
Late last month, SGYP announced that Bausche Health would acquire all the company’s assets, including its rights to TRULANCE, dolcanatide and related intellectual property. In return for the assets, Bausch will pay approximately $200 million in cash and assume certain liabilities having to do with the assets being acquired.
Along with the announcement, SGYP announced that it has initiated voluntary Chapter 11 proceedings in the United States Bankruptcy Court for the Southern District of New York. Of course, the company said that it intends on operating its business as normal while it completes the sale through the Chapter 11 process. In a statement, Troy Hamilton, CEO at SGYP, had the following to offer:
We have worked diligently to serve our patients, health care professionals and other stakeholders by bringing TRULANCE® to market and developing other GI therapies to address previously unmet needs. Unfortunately, we have now reached a point where our financial challenges are preventing us from taking this important work to the next level… We are pleased to reach this agreement with Bausch Health and to move forward with the court-supervised auction process. We are confident that this process will result in a strong new owner that has the necessary funding and commercialization capabilities to continue providing TRULANCE to the patients and providers who have come to rely on this treatment and will allow us to maximize value for all stakeholders. We thank our employees for their continued hard work, dedication and commitment to serving our health care professionals and their patients.
So, what’s the reason for the gains today. While the news is relatively old, investors are excited about the process. After all, it also includes a competitive caveat under which the company will work to find competitive offers. So, the $200 million pot may become a bit larger. Nonetheless, even if the price stays at the $200 million announced, the sale will relieve the company of great debts and start it back on a fresh slate for growth in 2019 and beyond.
What We’re Seeing From The Stock
One of the first lessons that we learn when we start to work in the market is that the news leads to moves. In the case of Synergy Pharmaceuticals, the news proved to be positive. While it is relatively old, investors are excitedly awaiting an update on the process of the competitive analysis and sale. So, it’s not surprising to see that the stock is edging up in the market today. As is normally the case, our partners at Trade Ideas were the first to alert us to the gains. Currently (10:23), SGYP is trading at $0.13 per share after a gain of $0.017 per share or 14.84% thus far today.
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What We’ll Be Watching For Ahead
Moving forward, the iWatch Markets team will continue to keep a close eye on SGYP. In particular, we’re interested in following the bankruptcy and asset sale as it could put the company on a strong foundation for growth ahead. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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