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Synergy Closing Key Trial; Decision On IRWD's Linaclotide Likely To Have Impact

August 14, 2012 -

Synergy Pharmaceuticals (NASDAQ:SGYP) announced today that its Phase IIb/III trial testing lead drug plecanatide for chronic constipation is fully enrolled. The trial met its 880 patient target yesterday and the company will officially close enrollment at the end of August. If favorable, the study is expected to be used as a pivotal trial supporting a new drug application for plecanatide in its first indication, chronic idiopathic constipation (CIC). The trial must show a statistically significant difference in spontaneous bowel movements vs. placebo, with results expected before year end. The Phase IIb/III trial is designed to test three doses of plecanatide (0.3mg, 1mg, and 3mg) per the company's discussion with the FDA, and expectations are that at least the two higher doses will demonstrate favorable efficacy and safety.
Ironwood Pharmaceuticals' (NASDAQ:IRWD) drug candidate, linaclotide, which acts similarly to plecanatide, is under review by the FDA, suggesting that the Phase IIb/III trial has a high probability of meeting its primary endpoint. It is thought that plecanatide will prove to be as effective as linaclotide, but could have a better tolerability profile. The FDA will decide whether or not to approve linaclotide on September 12 (PDUFA data), and investors expect SGYP to trade similarly to IRWD as the drug class will be validated if linaclotide is approved. Synergy also plans to initiate a Phase IIb trial for plecanatide in the treatment of irritable bowel syndrome with constipation (IBS-C) in 2H12. Expect a busy second half 2012 for SGYP, with bias to the upside on the potential for linaclotide approval and favorable Phase IIb/III trial results. One way to trade the linaclotide FDA decision with lower risk is to own shares of SGYP.
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