NEW YORK, April 10, 2019 /PRNewswire/ -- Pomerantz LLP announces that a class action lawsuit has been filed on behalf of investors in Synergy Pharmaceutical, Inc. ("Synergy" or the "Company") (NASDAQ: SGYP) against certain of the Company's current and former officers and directors. The class action, filed in United States District Court, Eastern District of New York, and indexed under 19-cv-01352, is on behalf of a class consisting of all persons and entities, other than Defendants and their affiliates, who purchased or otherwise acquired publicly traded securities of Synergy between September 5, 2017, and October 25, 2018, both dates inclusive (the "Class Period"), brought against Troy Hamilton ("Hamilton"), Gary G. Gemignani ("Gemignani"), and Gary S. Jacob ("Jacob") (collectively, "Defendants") for the dissemination of materially false and misleading statements and omissions and concealment of material adverse facts in violation of the Securities Exchange Act of 1934 (the "Exchange Act").
If you are a shareholder who purchased Synergy securities during the class period, you have until April 12, 2019, to ask the Court to appoint you as Lead Plaintiff for the class. A copy of the Complaint can be obtained at www.pomerantzlaw.com. To discuss this action, contact Robert S. Willoughby at firstname.lastname@example.org or 888.476.6529 (or 888.4-POMLAW), toll-free, Ext. 9980. Those who inquire by e-mail are encouraged to include their mailing address, telephone number, and the number of shares purchased.
On September 5, 2017, Synergy entered into a $300 million senior secured loan from CRG Partners III L.P. ("CRG" and the "CRG Loan"), which in its initial incarnation provided an immediate cash 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.
On September 7, 2017, on a Business Update call, the Company touted the potential for its lead product—TRULANCE—and the purportedly positive indicators in its launch to the marketplace. TRULANCE is a drug for the once-daily treatment of chronic idiopathic constipation ("CIC"). The Company described TRULANCE as a "high value asset" backed by the "right strategy and the right team." Defendants also portrayed the CRG Loan as a coup, providing the Company "with access to additional capital if and when" Synergy would need it.
As disappointing results trickled in and the Company struggled to meet the covenants of the CRG Loan, Defendants continued to assure the market that: (i) the Company was well-positioned for a revenue windfall from TRULANCE; (ii) Synergy could comply with the terms of the CRG Loan and would be able to gain access to needed capital; and (iii) if the Company was threatened with noncompliance, the Company's partnership and relationship with CRG was both strong and flexible enough to yield a favorable compromise.
Indeed, Defendants were so steadfast in their representations regarding TRULANCE's potential and the Company's future outlook that they initiated a strategic review because the marketplace was vastly undervaluing Synergy. However, in reality, Defendants were hoping for a white knight acquirer or a financing partner to save the Company from noncompliance with the covenants of the CRG Loan because of TRULANCE's disappointing results and the Company's failure to cash-in on the product's potential. All the while, Defendants either misleadingly affirmed that the Company was expected to meet or exceed the covenants' requirements, or failed to disclose to the market the reality: TRULANCE had underachieved and the Company was burdened with covenants that it could not satisfy.
Finally, on October 25, 2018, the Company shocked its investors and the market by revealing that: (i) TRULANCE had substantially disappointed and that its launch and integration into the marketplace was not as successful as represented; (ii) as a result, the Company faced substantial risk that it would not be able to satisfy the minimum revenue, market capitalization and liquidity requirements in the CRG Loan; (iii) Synergy's efforts to renegotiate the terms of the CRG Loan had proven unsuccessful; and (iv) the strategic review process had failed to yield a "white knight" or financing alternative and was unlikely to do so prior to default on the Company's covenants to CRG.
On this news, the price of Synergy common stock declined fell $0.97 per share, or approximately 69%, to close at $0.43 per share on October 26, 2018, damaging the Company's investors.
The Pomerantz Firm, with offices in New York, Chicago, Los Angeles, and Paris, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, the Pomerantz Firm pioneered the field of securities class actions. Today, more than 80 years later, the Pomerantz Firm continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. See www.pomerantzlaw.com
Robert S. Willoughby
888-476-6529 ext. 9980
SOURCE Pomerantz LLP