Synergy Pharmaceuticals Inc (NASDAQ: SGYP) is having an incredibly rough start to the trading session this morning, and for good reason. The company announced that it will be selling most of its assets and has filed bankruptcy to facilitate the sale. Today, we’ll talk about:
- The bankruptcy and sale news;
- what we’re seeing from SGYP stock as a result; and
- what we’ll be watching for ahead.
SGYP Tumbles On Bankruptcy News
As mentioned above, Synergy Pharmaceuticals is having an incredibly rough start to the trading session this morning after the company announced bankruptcy and sale news. In a press release issued early this morning, the company said that it has entered into an agreement with Bausch Health Companies Inc.
Under the terms of the agreement, Bausch Health will acquire all SGYP assets, including rights to TRULANCE, dolcanatide and related IP, for a price of $200 million. Bausch Health has also agreed to assume the company’s debt. The acquisition will happen in an all cash transaction and is expected to close in the first quarter of 2019. However, there is a caveat. The sale is subject to a competitive process and the Company’s receipt of higher and better offers.
In the release, SGYP said that in order to facility the sale and address its debt obligations, it has voluntarily started the Chapter 11 process. Of course, the company intends to operate its business as usual while it works through the sale and bankruptcy.
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.
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 overwhelmingly negative. After all, bankruptcy and a sale well below the value that investors expected is never a good thing. So, it’s not surprising to see that upset investors are sending the stock tumbling in the market this morning. As is normally the case, our partners at Trade Ideas were the first to alert us to the declines. Currently (8:00), SGYP is trading at $0.19 after a loss of $0.15 per share or 43.95% thus far today.
Stop wasting your time! Start finding winning trades in minutes with Trade Ideas!
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 sale process. Hopefully, for the sake of investors, the company receives a stronger bid than the one being offered by Bausch Health. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
Never Miss The News Again
Do you want real-time, actionable news delivered to your inbox? Join the iWatch Markets mailing list below!