Takeda's Speculative Interest In Synergy Soothes Stomach Pains; Canaccord Says Buy

Canaccord Genuity said it views Takeda Pharmaceutical Co Ltd (ADR) TKPYY’s speculated interest in buying Synergy Pharmaceuticals Inc SGYP as a positive step. The potential deal could boost its GI (gastrointestine) portfolio.

Speculative Interest

Commenting on the indication of specific strategic interest from Takeda, the brokerage noted that Synergy's Trulance shows operational synergy with Takeda's Gl portfolio, which includes Entyvio for Ulcerative Colitis and Crohn's Disease and Amitiza for chronic idiopathic constipation (CIC).

“If Takeda were to gain Trulance rights, we could envision higher operating leverage for its Gl franchise,” analyst John Newman wrote in a note.

Notably, earlier this month, Takeda agreed to buy Ariad Pharmaceuticals, Inc. ARIA for $24.00 per share in cash, or a total enterprise value of approximately $5.2 billion.

Analyst Rating And Bottom Line

Meanwhile, Newman maintains his Buy rating and $13 price target on Synergy Pharma, as he believes doctors and patients prefer a drug for CIC and IBS-D that causes less diarrhea than Linzess.

Newman is also skeptical that the 72 mcg dose of Linzess will show fewer diarrheas without sacrificing efficacy versus the approved 145 mcg dose in ClC. The analyst expects 72 mcg results for Linzess upon potential supplemental FDA approval in early 2017.

“We also believe that SGYP‘s Trulance will still have a much lower rate of diarrhea, appealing strongly to doctors and patients. Interestingly, Phase 3 data for the 72 mcg Linzess dose have been available since October 2015, but have never been presented, making us question the data quality,” Newman highlighted.

At last check, shares of Synergy Pharma were up 0.99 percent to $5.59.