Faruqi & Faruqi, LLP Files Securities Fraud Class Action Complaint Against Synergy Pharmaceuticals, Inc. With Expanded Class Period
Faruqi & Faruqi, LLP, a leading national securities law firm, has filed a federal securities class action complaint against Synergy Pharmaceuticals, Inc. (“Synergy” or the “Company”) (NASDAQ:SGYP) and certain of its officers. The deadline to seek the role of lead plaintiff in the class action is April 10, 2018.
The lawsuit expanding the class period has been filed in the U.S. District Court for the Eastern District of New York on behalf of all those who purchased Synergy securities listed on the NASDAQ or domestically in the United States between November 10, 2016 and November 12, 2017, inclusive (the “Class Period”). The case, Rose v. Synergy Pharmaceuticals, Inc., et al., No. 2:18-cv-1344 was filed on March 2, 2018.
The lawsuit focuses on whether the Company and its executives violated federal securities laws by failing to disclose that: (1) TRULANCE, a treatment for adults with chronic idiopathic constipation, does not have a side-effect profile superior to its competitors, specifically with regard to the side effect of diarrhea, and (2) Synergy was unable to meet certain undisclosed loan agreement conditions requiring the Company to have $128 million in cash or cash equivalents by January 31, 2018 to obtain $100 million (“CRG Loan”) in financing for TRULANCE without issuing shares and diluting shareholders.
Specifically, throughout the Class Period, the Company and its executives promoted TRULANCE’s side-effect profile as superior to its competitors, specifically with regard to the side effect of diarrhea.
Furthermore, on September 5, 2017, Synergy announced that it had closed on a $300 million debt financing structured as senior secured loans from CRG LP, a healthcare focused investment firm, and its lender syndicate. During a subsequent conference call to discuss the Company’s results for the second quarter of 2017 held on September 7, 2017, Synergy executives claimed that the loan would provide the Company “with financial flexibility to continue to execute on the launch of TRULANCE and achieve our key business priorities” and would not result in a dilutive effect.
However, on November 9, 2017, the Company revealed that growth in TRULANCE prescriptions had nearly flat-lined and that individual prescribers were writing fewer TRULANCE prescriptions, which was a direct result of the undisclosed fact that TRULANCE’s side-effect profile with respect to diarrhea was not superior to its competitors.
After the announcement, Synergy’s share price fell from $2.97 per share on November 9, 2017 to a closing price of $2.72 on November 10, 2017—a $0.25 or an 8.4% drop.
Then, on November 13, 2017, the Company announced an offering of common stock and warrants that corrected the Company’s previous misstatements and omissions that the CRG Loan would allow for TRULANCE commercialization without shareholder dilution.
After the announcement of the offering, Synergy’s share price fell from $2.72 per share on November 10, 2017 to a closing price of $2.44 on November 13, 2017—a $0.28 or a 10.3% drop.
If you invested in Synergy stock or options between November 10, 2016 and November 12, 2017 and would like to discuss your legal rights, please fill out the form below. There is no cost or obligation to you. You can also contact us by calling Richard Gonnello toll free at 877-247-4292 or at 212-983-9330 or by sending an e-mail to firstname.lastname@example.org.
Synergy Pharmaceuticals, Inc. (SGYP)
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Filed on 03/03/2018
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