Synergy Pharmaceuticals Inc (NASDAQ:SGYP) has gradually picked up strength over the last six months or so, as the company creeps towards its PDUFA date for Plecanatide. The drug, which the FDA accepted for review early last year, is set to take the stage on January 29, and if approved, there’s a large upside on offer for anybody with an exposure to Synergy, and by proxy, the drug’s green light for commercialization. Things aren’t entirely straightforward, but it’s hard to come up with any logical reason why the agency won’t give the drug a thumbs-up, meaning Synergy could be a great buy ahead of the end of this month. With this in mind, and in the spirit of picking top plays, here’s a look at the drug in question, and a discussion of what we are expecting when the FDA makes its ruling.

As mentioned, the drug is called Plecanatide, and it is under investigation as a treatment for patients suffering from irritable bowel syndrome with constipation (IBS-C) and chronic idiopathic constipation (CIC). Both indications are very large potential markets. There are around 13 million US sufferers of the former, and a little over 35 million sufferers of the latter. Current standard of care treatment options are effective, but have associated with them certain adverse events (we will get to this in a little bit more detail shortly), meaning an approval could be a real game changer for Synergy.

Normally, here, we would go into detail surrounding the science of the drug, and how it works – i.e., its mechanism of action. With this one, however, there is already plenty of information available online, and it’s not too complicated a process through which the drug treats the conditions in question. By way of a brief introduction, however, we have a naturally occurring peptide in our bodies called uroguanylin. This peptide plays a key role in digestion, and – in turn – smooth transit of bolus’ through the gastrointestinal system. In patients suffering from the two conditions in question, this peptide can be defective, or there might simply not be enough of it, and this leads to a lack of efficiency in the above-mentioned bolus transit. Plecanatide is a synthetic form of uroguanylin. By adding this synthetic form to the already present naturally occurring version of the peptide, Synergy expects to improve transit, and – in doing so – ease the symptoms associated with both IBS-C  and CIC. The mechanism of action is sound, and there is plenty of data to suggest it works. Strong initial data from a phase 2 and a phase 3 underpins the application that currently sits with the agency, but since the acceptance of this application, Synergy has also reported a number of extension releases that support the initial hypothesis.

Referring back to the currently available standard of care treatment, the drug that is most widely used (and is the fastest growing in the space) is a drug called Linzess, marketed by Ironwood Pharmaceuticals, Inc.(NASDAQ:IRWD). It is approved in both indications, and has been since 2012, and currently generates around $150 million quarterly revenues. Analysts expect this to increase to nearly $1 billion in annual sales by 2020. Synergy is attempting to redirect some of these revenues towards its own operations. How? By bringing its drug (Plecanatide) to market with an improved adverse event profile than Linzess. The most common side effect of both assets, in both indications, is diarrhea. Data to date has shown that Plecanatide induces diarrhea in a far lower percentage of patients than does Linzess (around 5% for the former versus more than 15% for the latter). If the FDA approves the drug, therefore, and Synergy can approach the market with this improved tolerability profile, it could quickly start eating away at Ironwood’s market share. In the interest of balance, it is worth noting that Ironwood has recently brought out data relating to a lower dose of its drug, with the implication being that this lower dose should reduce diarrhea rates towards something closer to those of Synergy’s asset. Exactly what this means for the drug going forward, it remains to be seen. With this data aside, however, we are looking at the upcoming PDUFA as a game changing date for Synergy, and one to keep an eye on for a biotech catalyst investor.