Investor Alert: Kaplan Fox Announces Investigation Of Synergy Pharmaceuticals Inc.

NEW YORK, Feb. 20, 2019

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 pmayer@kaplanfox.com or by calling 800-290-1952.

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