NEW YORK, Feb. 20, 2019 /PRNewswire/ -- Kaplan Fox & Kilsheimer LLP (www.kaplanfox.com) is investigating claims on behalf of investors of Synergy Pharmaceuticals Inc. ("Synergy" or the "Company") (NASDAQ: SGYP), a biopharmaceutical company focused on the development and commercialization of therapies to treat Gastro-Intestinal disorders and diseases. Investors who purchased Synergy securities between September 7, 2017 and October 25, 2018, inclusive (the "Class Period"), may be affected. A complaint has been filed in the United States District Court for the Eastern District of New York against certain Synergy executives.
On September 5, 2017, Synergy entered into a $300 million senior secured loan from CRG Partners III L.P. (the "CRG Loan"), which provided an immediate infusion of $100 million, with a second $100 million tranche of financing less than six months later, on or before February 28, 2018, and a third tranche of up to $100 million in the following thirteen months.
According to the complaint, on October 25, 2018, Synergy issued a press release disclosing that the Company had attempted to renegotiate the CRG Loan, but that the Company's efforts to further amend the agreement with respect to financial and revenue covenants had been unsuccessful. Additionally, Synergy revealed that the Company might not be able to satisfy the minimum liquidity covenant in the term loan agreement or secure alternative financing, and that as a result, Synergy might be forced to default on the term loan agreement.
Further, according to the complaint, on October 25, 2018, with respect to Synergy's lead product, TRULANCE, Synergy disclosed that the uptake in 2018 was slower than anticipated due to a highly competitive market access environment and slower than anticipated overall market growth. As a result, the Company projected total net sales of TRULANCE for 2018 to be between $42 million and $47 million, significantly below the minimum revenue covenant of $61 million as set forth in the term loan agreement. Synergy also disclosed that if TRULANCE sales failed to meet that threshold, the Company would be subject to prepayment penalties equal to $38 million to $51 million.
Following this news, Synergy's stock price fell $0.97 per share, or more than 69%, to close at $0.43 per share on October 26, 2018.
If you are a member of the proposed Class, you may move the court no later than April 12, 2019 to serve as a lead plaintiff for the purported class. You need not seek to become a lead plaintiff in order to share in any possible recovery. If you would like to discuss the complaint or our investigation, please contact us by emailing email@example.com or by calling 800-290-1952.
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Kaplan Fox & Kilsheimer LLP, with offices in New York, San Francisco, Los Angeles, Chicago and New Jersey, has many years of experience in prosecuting investor class actions. For more information about Kaplan Fox & Kilsheimer LLP, you may visit our website at www.kaplanfox.com. If you have any questions about this Notice, the action, your rights, or your interests, please contact:
Jeffrey P. Campisi
KAPLAN FOX & KILSHEIMER LLP
850 Third Avenue, 14th Floor
New York, New York 10022
Fax: (212) 687-7714
Laurence D. King
KAPLAN FOX & KILSHEIMER LLP
350 Sansome Street, Suite 400
San Francisco, California 94104
Fax: (415) 772-4707
SOURCE Kaplan Fox & Kilsheimer LLP
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