Synergy Pharmaceuticals Reports Second Quarter 2013 Financial Results

  Synergy Pharmaceuticals Reports Second Quarter 2013 Financial Results

Business Wire

NEW YORK -- August 9, 2013

Synergy Pharmaceuticals Inc. (Nasdaq:SGYP), a developer of new drugs to treat
gastrointestinal disorders and diseases, today reported its financial results
and business update for the second quarter ended June 30, 2013. Synergy is
developing plecanatide for the treatment of chronic idiopathic constipation
(CIC) and constipation-predominant irritable bowel syndrome (IBS-C).

Recent Developments

  *On July 17, 2013, Synergy reached the halfway mark for total enrollment in
    its plecanatide Phase 2b clinical trial in patients with IBS-C. At
    present, over 726 patients have been screened, and 204 patients have been
    enrolled in the study. Synergy anticipates completing enrollment in the
    fourth quarter of 2013 and reporting top line data in the first quarter of
    2014.
  *On August 5, 2013, Synergy completed an End-of-Phase 2 meeting with the
    U.S. Food and Drug Administration (FDA) regarding Synergy’s drug
    plecanatide for the treatment of chronic idiopathic constipation (CIC).
    Agreement was reached with the FDA on design, duration, size and primary
    and secondary efficacy endpoints for pivotal phase 3 studies. A pivotal
    phase 3 program evaluating the safety and efficacy of plecanatide in CIC
    patients and is expected to be initiated in the fourth quarter of 2013.

Financial Update

Synergy's cash, cash equivalents and available-for-sale securities balance as
of  June 30, 2013 was  $92.3 million, as compared to $32.5 million on December
31, 2012. During the six months ended June 30, 2013, net cash provided by
financing activities was $89.2 million resulting from its controlled equity
sales of its common stock and registered direct offering, as compared to $48.4
million during the six months ended June 30, 2012. Net cash used in operating
activities during the six months ended June 30, 2013 and 2012 was $28.6
million and $13.8 million, respectively. Net loss for the six months ended
June 30, 2013 was $28.7 million or $0.36 per share, as compared to a net loss
of $17.6 million, or $0.31 per share, for the six months ended June 30, 2012.

Net loss for the quarter ended June 30, 2013 was $10 million or $0.11 per
share, as compared to a net loss of $10.6 million, or $0.17 per share, for the
quarter ended June 30, 2012. During the quarter ended June 30, 2013, non-cash
expense items, principally the change in fair value of derivative instruments
and stock based compensation expense, totaled a net gain of $0.9 million, or a
net gain of $0.01 per share, whereas such items in the three months ended June
30, 2012 totaled a net loss of $1.7 million, or a net loss of $0.03 per share.

Synergy had approximately 90 million common shares outstanding at June 30,
2013.

About Synergy Pharmaceuticals Inc.

  *Synergy is a biopharmaceutical company focused on the development of new
    drugs to treat gastrointestinal disorders and diseases. Synergy's lead
    proprietary drug candidate plecanatide is a synthetic analog of the human
    gastrointestinal (GI) hormone uroguanylin, and functions by activating the
    guanylate cyclase C receptor on epithelial cells of the GI tract. Synergy
    previously completed a Phase I study of plecanatide in healthy volunteers
    and a Phase IIa clinical trial in CIC patients. On January 2, 2013,
    Synergy announced positive results in a large multicenter clinical trial
    of plecanatide to treat CIC. Plecanatide is also being developed to treat
    patients with IBS-C. Synergy's second GC-C agonist SP-333 is in clinical
    development to treat inflammatory bowel diseases, and has completed a
    Phase I trial in healthy volunteers during the quarter ended June 30,
    2013. On July 17, 2013, Synergy reached the halfway mark for total
    enrollment in its plecanatide Phase 2b clinical trial in patients with
    IBS-C. On August 5, 2013, Synergy completed an End-of-Phase 2 meeting with
    the U.S. Food and Drug Administration (FDA) regarding Synergy’s drug
    plecanatide for the treatment of chronic idiopathic constipation (CIC).
    More information is available at http://www.synergypharma.com.

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 Form 10-K for the year
ended December 31, 2012 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.


Condensed Consolidated Balance Sheets ($ in thousands)
                                                        
                                           June 30, 2013     December 31, 2012
                                           (unaudited)
Assets
Cash, cash equivalents and short term      $    92,300       $      32,502
available for sale securities
Prepaid expenses and other current             2,349            1,547
assets
Total Current Assets                            94,649              34,049
Other Assets                                   583              3,356
Total Assets                               $    95,232     $      37,405
Liabilities and Stockholders' Equity
Accounts payable                                4,980               5,255
Accrued expenses                               2,989            2,060
Total Current Liabilities                       7,969               7,315
Derivative financial instruments               973              5,258
-warrants
Total Liabilities                               8,942               12,573
Total Stockholders' Equity                     86,290           24,832
Total Liabilities and Stockholders'        $    95,232     $      37,405
Equity
                                                             

                                                                    
Condensed Consolidated Statement of Operations
($ in
thousands
except share         Three Months       Three Months       Six Months         Six Months
and per share        ended              ended              ended              ended
data)                June 30, 2013      June 30, 2012      June 30, 2013      June 30, 2012

(unaudited)
                                                                              
Revenues             $ --               $ --               $ --               $ --
Costs and
Expenses:
Research and           9,055              7,626              23,399             12,964
development
General and           2,803          1,919          6,081          3,650      
administrative
Loss from              (11,858    )       (9,545     )       (29,480    )       (16,614    )
Operations
Other income           --                 256                --                 256
Interest and
investment             16                 48                 34                 86
income
Change in fair
value of
derivative            1,803          (1,317     )    710            (1,309     )
instruments -
warrants
                                                                              
Net Loss             $ (10,039    )   $ (10,558    )   $ (28,736    )   $ (17,581    )
                                                                              
Net Loss per
common share,        $ (0.11      )   $ (0.17      )   $ (0.36      )   $ (0.31      )
basic and
diluted
Weighted
Average Common        87,482,939     60,416,068     80,176,564     57,357,081 
Shares
Outstanding

Contact:

Investors:
Synergy Pharmaceuticals Inc.
Bernard F. Denoyer, 212-297-0020
bdenoyer@synergypharma.com
 
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