After announcing that its constipation drug's FDA filing had been accepted, Synergy Pharmaceuticals (SGYP) saw shares jump and trading volume soar.
The New York-based company makes a promising drug for chronic idiopathic constipation that, pending FDA approval, is slated to change the game for those dealing with the disease.
"They have a rare gem in this space," said analyst Michael Higgins of Roth Capital Partners. "It's a drug with blockbuster potential and a new drug application on file."
The company's NDA filing is now undergoing a review process that will take 10 months. The company will find out whether the drug is approved in January 2017.
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"We're very excited about this development," said Gem Hopkins, vice president of investor relations and corporate communications at Synergy. Hopkins declined further comment on the business.
The company, which has a $558 million market cap as of Tuesday, was trading at $3.64 per share Tuesday morning, up 9.3% from its opening share price. Synergy's trading volume was up 11% Tuesday morning.
According to Higgins, the drug is an attractive target -- both for investors and a potential takeover bid.
"Investors are seeing a lot of upside to the company," Higgins said. He added that big drug companies like Pfizer (PFE - Get Report) and Allergan (AGN - Get Report) could be interested in acquiring the company.
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"When the Pfizer and Allergan deal was off, the biotech index went up 5%," Higgins said. "There's some indication that Synergy could be a takeover candidate."
Higgins added that he wasn't sure whether it was Pfizer or Allergan that indicated interest in purchasing the company.