Synergy Pharma Stock Plunges 69% After Filing Chapter 11 Bankruptcy Protection

Synergy Pharmaceuticals

Synergy Pharmaceuticals (NASDAQ: SGYP)

Synergy Pharmaceuticals Inc. has filed a voluntary petition for Chapter 11 to facilitate the sale of its assets to Bausch Health Cos. (formerly Valeant Pharmaceuticals) for about $200 million.

NYSE-listed Bausch Health Cos. has accepted to serve as a “stalking horse” bidder for the assets of bankrupt Synergy Pharmaceuticals in a court-supervised auction and sale process.

Bausch’s acquisition of Synergy is expected to close before the first quarter of calendar 2019 comes to a close. Synergy focusses on gastrointestinal therapies, including the once-a-day table Trulance, which is approved for adults with chronic constipation and irritable bowel syndrome with constipation.

“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,” said Troy Hamilton, Chief Executive Officer of Synergy Pharmaceuticals Inc.

“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.” 

Bausch expects Trulance to supplement its Salix business, according to a statement released by the company. Shares of Synergy Pharmaceuticals took a dip of more than 69% in the early hours of regular trading on Wednesday, while those of Bausch were up slightly. Bausch stock had rallied 11% since the beginning of the year through Tuesday, while the S&P 500 had lost 1.4%.

Synergy Pharmaceuticals Inc. Profile

Synergy Pharmaceuticals Inc., a biopharmaceutical company, focuses on the development and commercialization of novel therapies to treat gastrointestinal diseases and disorders. Its lead product is plecanatide, a novel uroguanylin based gastrointestinal platform that is traded under the TRULANCE name for the treatment of chronic idiopathic constipation and irritable bowel syndrome.

The company also develops dolcanatide to treat mild-to-moderate ulcerative colitis. It has a licensing agreement with Cipher Pharmaceuticals Inc. to develop, market, distribute, and sell TRULANCE in Canada. Synergy Pharmaceuticals Inc. is headquartered in New York, New York. – Yahoo Finance

Bausch Health Companies Inc.

Bausch Health Companies (formerly known as Valeant Pharmaceuticals) is a multinational specialty pharmaceutical and medical device company that develops, manufactures and markets a broad range of prescription and non-prescription pharmaceutical products.

The Company’s primary focus is in the areas of dermatology and eye health. In addition, the Company provides branded generic products in antibiotics, antifungal medications, diabetic therapies, antibacterial and vitamin deficiency. – Craft