- TRULANCE® second quarter net sales up
over 40% versus prior quarter
- TRULANCE added to Express Scripts 2019
National Preferred Formulary List
- Synergy secures ex-US licensing deal
for TRULANCE in China - providing $12 million upfront payment and
potential for future milestone and escalating royalty payments
In the "Ensuring a Strong Financial Foundation" section, first
sentence of fifth bullet point should read: Cash and cash
equivalents were approximately $61.2 million at the end of the
second quarter (instead of Cash and cash equivalents were
approximately $61.2 million at the end of the first quarter).
The corrected release reads:
SYNERGY PHARMACEUTICALS REPORTS SECOND
QUARTER 2018 FINANCIAL RESULTS AND BUSINESS UPDATE
- TRULANCE® second quarter net sales up
over 40% versus prior quarter
- TRULANCE added to Express Scripts 2019
National Preferred Formulary List
- Synergy secures ex-US licensing deal
for TRULANCE in China - providing $12 million upfront payment and
potential for future milestone and escalating royalty payments
Synergy Pharmaceuticals Inc. (NASDAQ:SGYP), a biopharmaceutical
company focused on the development and commercialization of novel
gastrointestinal (GI) therapies, today reported its financial
results and business update for the three months ended June 30,
2018.
"The Synergy team continues to demonstrate strong execution
towards our 2018 key business priorities of optimizing the value of
TRULANCE, ensuring a strong financial foundation and continuing to
explore all business development opportunities," said Troy
Hamilton, Chief Executive Officer of Synergy Pharmaceuticals Inc.
"In terms of optimizing TRULANCE, we reported strong
quarter-over-quarter growth with net sales increasing 43% in the
second quarter. In addition, today we announced a major coverage
win with Express Scripts, helping us to enhance and expand our
current coverage, improve patient access and support sales growth.
Lastly, since the beginning of the year we've successfully executed
on two ex-US licensing transactions for TRULANCE as well as a
collaboration with the National Cancer Institute (NCI) to advance
development of our second pipeline asset, dolcanatide, underscoring
our commitment to pursuing a wide variety of value-enhancing
strategic and business development opportunities. While we are very
pleased with these partnerships, we are still actively assessing
other potential opportunities that align with our ultimate
objective of maximizing value for Synergy shareholders. We remain
committed to being as transparent as possible during this ongoing
strategic review and expect to provide another update in the near
term. I want to thank the entire Synergy team, our customers and
shareholders for their continued support during this dynamic
period."
“We were pleased with solid topline growth of over 40% in the
second quarter versus the prior quarter, resulting in $20.8 million
in total net sales for the six months ended June 30, 2018," said
Gary Gemignani, EVP and Chief Financial Officer of Synergy
Pharmaceuticals Inc. "As we move into the second half of the year,
we will continue to balance our commitment to topline growth with
the efficient management of our bottom line, as highlighted by the
44% reduction in total adjusted operating expenses we achieved
year-over-year. We are evaluating opportunities to further optimize
our operating efficiencies and intend to update our 2018 total
adjusted OPEX guidance as part of our ongoing strategic
review.”
Second Quarter 2018 and Recent Highlights
Optimizing the Value of TRULANCE
- On August 7, 2018, Synergy announced
that Express Scripts, a leading U.S. pharmacy benefit manager, will
add TRULANCE to its 2019 National Preferred Formulary List,
effective January 1, 2019.
- Total TRULANCE normalized prescription
volume in the second quarter of 2018 included approximately 55,000
TRULANCE 30-count packs, up over 24% versus the first quarter, and
resulting in over 90% average quarterly growth since the product's
launch on March 20, 2017, per IQVIA.
- TRULANCE new prescription volume showed
nearly 25% average quarterly growth since launch through June 30,
2018, per IQVIA.
- Total number of unique healthcare
practitioners prescribing TRULANCE reached over 14,000 in the
second quarter of 2018, increasing more than 20% over the first
quarter, and resulting in 60% average quarterly growth since
launch, per IQVIA.
Ensuring a Strong Financial Foundation
Financial Results
- TRULANCE net sales were $12.3 million
in the second quarter of 2018, increasing 43% over the first
quarter of 2018, and resulting in $20.8 million in total net sales
for the six months ended June 30, 2018. TRULANCE was first approved
by the FDA for chronic idiopathic constipation (CIC) in January
2017 and Synergy initiated U.S. sales and marketing efforts on
March 20, 2017. TRULANCE was approved by the FDA for a second
indication in irritable bowel syndrome with constipation (IBS-C) in
January 2018.
- Total operating expenses were $37.5
million in the second quarter of 2018 compared to $74.3 million in
total operating expenses in the second quarter of 2017.
- Total adjusted operating expenses
(non-GAAP) were $34.0 million in the second quarter of 2018, a 44%
decrease compared to $61.0 million in total adjusted operating
expenses (non-GAAP) in the second quarter of 2017.
- Synergy reported a net loss of $29.7
million, or $0.12 per share, for the second quarter of 2018
compared to a net loss of $73.9 million, or $0.33 per share in the
second quarter of 2017.
- Cash and cash equivalents were
approximately $61.2 million at the end of the second quarter.
Synergy has the ability to access up to an additional $100 million
in 2018 under its Term Loan Agreement with CRG LP, subject to the
satisfaction of certain borrowing conditions.
Exploring All Strategic and Business Development
Opportunities
Collaborations & Partnerships
- On August 7, 2018, Synergy announced a
license agreement with Luoxin Pharmaceutical Group Co., Ltd.,
Shandong (Luoxin) providing Luoxin exclusive rights to develop and
commercialize TRULANCE for the treatment of adults with chronic
idiopathic constipation (CIC) and irritable bowel syndrome with
constipation (IBS-C) in mainland China, Hong Kong and Macau. Under
the terms of the agreement, Synergy will receive an upfront payment
of $12 million. Synergy is also eligible, in the event that certain
regulatory and commercial milestones are met, to receive additional
payments of up to $56 million in aggregate. In addition, Synergy is
eligible to receive tiered royalty payments on aggregate net
sales.
- Synergy's Canadian partner, Cipher
Pharmaceuticals, remains on-track to file a New Drug Submission for
TRULANCE in IBS-C with Health Canada in the second half of 2018.
The regulatory review period is approximately one-year from the
submission date. Under the terms of the licensing agreement,
Synergy is eligible for a milestone payment upon regulatory
approval in Canada, as well as royalties from product sales
in Canada.
- The National Cancer Institute (NCI) has
initiated a NCI-funded and managed clinical biomarker study to
evaluate the potential of dolcanatide, Synergy's second uroguanylin
analog, to prevent colorectal cancer. The study will assess the
colorectal bioactivity of dolcanatide in healthy volunteers and
will inform the feasibility and design of a larger study. This is
the first clinical biomarker study evaluating the potential benefit
of using a uroguanylin analog in colorectal cancer prevention.
2018 Financial Guidance / Strategic Review Update
- Synergy intends to provide an update to
shareholders on its ongoing strategic review, including any
anticipated related impact on operating expenses, in the third
quarter of 2018.
About Synergy Pharmaceuticals
Synergy is a biopharmaceutical company focused on the
development and commercialization of novel gastrointestinal (GI)
therapies. The company has pioneered discovery, research and
development efforts around analogs of uroguanylin, a naturally
occurring human GI peptide, for the treatment of GI diseases and
disorders. Synergy’s proprietary GI platform includes one
commercial product TRULANCE® (plecanatide) and a second product
candidate - dolcanatide. For more information, please
visit www.synergypharma.com.
About Irritable Bowel Syndrome with Constipation
(IBS-C)
Irritable bowel syndrome (IBS) is a chronic gastrointestinal
disorder characterized by recurrent abdominal pain and associated
with two or more of the following: related to defecation,
associated with a change in the frequency of stool, or associated
with a change in the form (appearance) of the stool. IBS can be
subtyped by the predominant stool form: constipation (IBS-C),
diarrhea (IBS-D) or mixed (IBS-M). Those within the IBS-C subtype
experience hard or lumpy stools more than 25 percent of the time
they defecate, and loose or watery stools less than 25 percent of
the time. It is estimated that the prevalence of IBS-C in the U.S.
adult population is approximately 4 to 5 percent.
About Chronic Idiopathic Constipation (CIC)
CIC affects approximately 14 percent of the global population,
disproportionately affecting women and older adults. People with
CIC have persistent symptoms of difficult-to-pass and infrequent
bowel movements. In addition to physical symptoms including
abdominal bloating and discomfort, CIC can adversely affect an
individual’s quality of life, including increasing stress levels
and anxiety.
About TRULANCE®
TRULANCE® (plecanatide) is a once-daily tablet approved for
adults with CIC or IBS-C. With the exception of a single amino acid
substitution for greater binding affinity, TRULANCE is structurally
identical to uroguanylin, a naturally occurring and endogenous
human GI peptide. Uroguanylin activates GC-C receptors in a
pH-sensitive manner primarily in the small intestine, stimulating
fluid secretion and maintaining stool consistency necessary for
regular bowel function.
Indications and Usage
TRULANCE (plecanatide) 3 mg tablets is indicated in adults for
the treatment of Chronic Idiopathic Constipation (CIC) and
Irritable Bowel Syndrome with Constipation (IBS-C).
IMPORTANT SAFETY INFORMATION
WARNING: RISK OF SERIOUS DEHYDRATION IN PEDIATRIC
PATIENTS
TRULANCE® is contraindicated in patients less
than 6 years of age; in nonclinical studies in young juvenile mice
administration of a single oral dose of plecanatide caused deaths
due to dehydration. Use of TRULANCE should be avoided in patients 6
years to less than 18 years of age. The safety and efficacy of
TRULANCE have not been established in pediatric patients less than
18 years of age.
Contraindications
- TRULANCE is contraindicated in patients
less than 6 years of age due to the risk of serious
dehydration.
- TRULANCE is contraindicated in patients
with known or suspected mechanical gastrointestinal
obstruction.
Warnings and Precautions
Risk of Serious Dehydration in Pediatric Patients
- TRULANCE is contraindicated in patients
less than 6 years of age. The safety and effectiveness of TRULANCE
in patients less than 18 years of age have not been established. In
young juvenile mice (human age equivalent of approximately 1 month
to less than 2 years), plecanatide increased fluid secretion as a
consequence of stimulation of guanylate cyclase-C (GC-C), resulting
in mortality in some mice within the first 24 hours, apparently due
to dehydration. Due to increased intestinal expression of GC-C,
patients less than 6 years of age may be more likely than older
patients to develop severe diarrhea and its potentially serious
consequences.
- Use of TRULANCE should be avoided in
patients 6 years to less than 18 years of age. Although there were
no deaths in older juvenile mice, given the deaths in young mice
and the lack of clinical safety and efficacy data in pediatric
patients, use of TRULANCE should be avoided in patients 6 years to
less than 18 years of age.
Diarrhea
- Diarrhea was the most common adverse
reaction in the four placebo-controlled clinical trials for CIC and
IBS-C. Severe diarrhea was reported in 0.6% of TRULANCE-treated CIC
patients, and in 1% of TRULANCE-treated IBS-C patients.
- If severe diarrhea occurs, the health
care provider should suspend dosing and rehydrate the patient.
Adverse Reactions
- In the two combined CIC clinical
trials, the most common adverse reaction in TRULANCE-treated
patients (incidence ≥2% and greater than in the placebo group)
was diarrhea (5% vs 1% placebo).
- In the two combined IBS-C clinical
trials, the most common adverse reaction in TRULANCE-treated
patients (incidence ≥2% and greater than in the placebo group)
was diarrhea (4.3% vs 1% placebo).
Please also see the full Prescribing
Information, including Box Warning, for additional risk
information.
Forward-Looking Statements
Certain statements in this press release are forward-looking
within the meaning of the Private Securities Litigation Reform Act
of 1995. These statements may be identified by the use of forward-
looking words such as "anticipate," "planned," "believe,"
"forecast," "estimated," "expected," and "intend," among others.
These forward-looking statements are based on Synergy's current
expectations and actual results could differ materially. There are
a number of factors that could cause actual events to differ
materially from those indicated by such forward-looking statements.
These factors include, but are not limited to, substantial
competition; our ability to continue as a going concern; our need
for additional financing; uncertainties of patent protection and
litigation; uncertainties of government or third party payer
reimbursement; limited sales and marketing efforts and dependence
upon third parties; and risks related to failure to obtain FDA
clearances or approvals and noncompliance with FDA regulations. As
with any pharmaceutical under development, there are significant
risks in the development, regulatory approval and commercialization
of new products. There are no guarantees that future clinical
trials discussed in this press release will be completed or
successful or that any product will receive regulatory approval for
any indication or prove to be commercially successful. Investors
should read the risk factors set forth in Synergy's Annual Report
on Form 10-K for the year ended December 31, 2017 and other
periodic reports filed with the Securities and Exchange Commission.
While the list of factors presented here is considered
representative, no such list should be considered to be a complete
statement of all potential risks and uncertainties. Unlisted
factors may present significant additional obstacles to the
realization of forward-looking statements. Forward-looking
statements included herein are made as of the date hereof, and
Synergy does not undertake any obligation to update publicly such
statements to reflect subsequent events or circumstances.
Synergy Pharmaceutical Inc.
Condensed Consolidated Balance Sheets
(unaudited)
($ in thousands)
June 30, 2018
December 31, 2017 Assets Cash and cash equivalents $ 61,233
$ 136,986 Accounts receivable 8,511 6,491 Inventories 17,609 17,214
Prepaid expenses and other current assets 7,772 4,469
Total Current Assets 95,125 165,160 Other assets 1,480 1,446
Total Assets $ 96,605 $ 166,606
Liabilities and Stockholders' (Deficit) Total Current Liabilities $
33,598 $ 38,147 Senior convertible notes, net 17,657 17,302 Long
term debt, net 100,327 98,660 Derivative financial instruments –
warrants 9,334 17,582 Other long-term liabilities 379 433
Total Liabilities 161,295 172,124 Total Stockholders’
Deficit (64,690 ) (5,518 ) Total Liabilities and Stockholders’
Deficit $ 96,605 $ 166,606
Condensed Consolidated Statement of
Operations
($ in thousands except share and per share
data)
(unaudited)
Three Months Ended
June 30, 2018
Three Months Ended
June 30, 2017
Six Months Ended June 30,
2018
Six Months Ended June 30,
2017
Net sales $ 12,254 $ 2,314 $ 20,840 $ 2,412 Cost of goods sold
3,885 1,643 7,589 3,279 Gross profit
8,369 671 13,251 (867 ) Costs and Expenses: Research and
development 2,844 22,069 6,236 40,470 Selling, general and
administrative 34,615 52,185 74,760 94,973
Total Operating Expenses 37,459 74,254 80,996
135,443 Loss from Operations (29,090 ) (73,583 )
(67,745 ) (136,310 ) Other Income/(Expense): Interest expense, net
(3,205 ) (345 ) (6,328 ) (1,135 ) State R&D tax credits — — 30
— Debt conversion expense — — — (1,209 ) Change in fair value of
derivative instruments - warrants 2,604 39 8,248
161 Total Other Income/(Expense) (601 ) (306 ) 1,950
(2,183 ) Net Loss $ (29,691 ) $ (73,889 ) $ (65,795 ) $
(138,493 ) Net Loss per Common Share, Basic and Diluted $
(0.12 ) $ (0.33 ) $ (0.27 ) $ (0.63 ) Weighted Average
Common Shares Outstanding 246,990,080 224,948,622
246,827,974 220,269,223
Synergy Pharmaceuticals Inc.
Non-GAAP Financial Measures
Adjusted research and development expenses, adjusted selling,
general and administrative expenses, and adjusted total operating
expenses are not measures of financial performance under accounting
principles generally accepted in the United States (“GAAP”) and
should not be construed as substitutes for, or superior to, GAAP
research and development expenses, GAAP selling, general and
administrative expenses and GAAP total operating expenses as a
measure of financial performance. However, management uses both
GAAP financial measures and the disclosed non-GAAP financial
measures internally to evaluate and manage the Company's operations
and to better understand its business. Further, management believes
the addition of non-GAAP financial measures provides meaningful
supplementary information to, and facilitates analysis by,
investors in evaluating the Company's financial performance,
results of operations and trends. The Company's calculations of
adjusted research and development expenses, adjusted selling,
general and administrative expenses and adjusted operating
expenses, may not be comparable to similarly designated measures
reported by other companies, since companies and investors may
differ as to what type of events warrant adjustment.
The following table reconciles reported research and development
expenses to adjusted research and development expenses (adjusted
R&D):
(Unaudited; $ in thousands)
Three Months Ended
June 30, 2018
Three Months Ended
June 30, 2017
Research and development expenses $ 2,844 $ 22,069 Adjusted to
deduct: Stock based compensation expense 504 (80 )
Adjusted research and development expenses $ 2,340 $ 22,149
The following table reconciles reported selling, general and
administrative expenses to adjusted selling, general and
administrative expenses (adjusted SG&A):
(Unaudited; $ in thousands)
Three Months Ended
June 30, 2018
Three Months Ended
June 30, 2017
Selling, general and administrative expenses $ 34,615 $ 52,185
Adjusted to deduct: Stock based compensation expense 2,924 13,378
Adjusted selling, general and administrative expenses
$ 31,691 $ 38,807
The following table reconciles reported total operating expenses
to adjusted operating expenses (adjusted OPEX):
(Unaudited; $ in thousands)
Three Months Ended
June 30, 2018
Three Months Ended
June 30, 2017
Total operating expenses $ 37,459 $ 74,254 Adjusted to deduct:
Stock based compensation expense 3,428 13,298
Adjusted operating expenses $ 34,031 $ 60,956
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version on businesswire.com: https://www.businesswire.com/news/home/20180807005950/en/
Company:Synergy Pharmaceuticals Inc.Gem Hopkins,
212-584-7610VP, Investor Relations and Corporate
Communicationsghopkins@synergypharma.com
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