This is why IRWD is losing money after 5 years of Linzess

Synergy Pharma: It Takes Money To Make Money
Sep. 5, 2017 5:04 PM ET
|
55 comments
|
About: Synergy Pharmaceuticals, Inc. (SGYP)


Life Sciences Millennial

Research analyst, biotech, healthcare, small-cap

(607 followers)
Summary


Synergy Pharmaceuticals has just secured a $300 million debt financing deal from CRG LP.

Synergy's 9.5% interest rate should be seen as favorable, and after tax deductions, the effective rate will be even lower.

Synergy has sufficient cash until the end of 2019 where they will also break-even, while Ironwood has remained unprofitable for 5+ years.

Synergy has still refused to give up any Worldwide rights or royalties to outside parties, which carries significant value.

A debt financing deal doesn't kill a potential merger situation, as Relypsa announced a debt financing deal two months before their buyout.

These are the tradeoffs that these companies make. Synergy very easily could have entered a unfavorable partnership deal, like Ironwood, without the past dilution. Or, they could have elected to give up royalties to a partner. Ironwood's partnership deal is one of many reasons why the company is losing money after over 5 years on the market.




https://seekingalpha.com/article/4104279-synergy-pharma-takes-money-make-money

 

Oh, Yeah, Ironwood regrets the more than $500 million in licensing fees and milestone payments the have received thus far from Allergan, its predecessors, and the other licensees. They also regret the more than $800 million that Allergan has poured into research, development, sales and marketing for Linzess in the US. Not to mention the $100 million or so they spent to run the trials and approval process in Europe. They also regret all the money Astellas has spent to gain approval for Linzess in Japan, where it has just been approved for IBS-C. And the similar amounts Astra-Zeneca has spent to run trials in China. This is a problem which Synergy doesn't have. Lucky you.

 

bloated home office,
Sales linzess have leveled, new product launch terrible.
Home office personal clueless
To many reps
Home office personal not qualified for their positions.
Constant stock and option selling from insiders
Trump slide proves it