Synergy Pharmaceuticals (NASDAQ:SGYP) has filed for Chapter 11 bankruptcy in a voluntary petition with another pharmaceutical company absorbing most of the company’s assets once the move goes through.
The bankruptcy filing will be followed by Bausch Health (NYSE:BHC) taking over as a “stalking horse” bidder for the company in an auction and sale process that has been approved by a court. The acquisition of Synergy’s assets will be part of a deal valued at roughly $200 million that is slated to be complete at the end of the first quarter of 2019.
Synergy focuses in gastrointestinal therapies, which include its flagship Trulance product, which is a tablet that is taken once a day for adults who have chronic constipation and irritable bowel syndrome with constipation. Bausch will add the product to its Salix business, according to a statement from CEO Joseph Papa.
Trulance is also known as plecanatide and it may be a good strategical fit with Xifaxan (rifaximin), which is an antibiotic used to treat diarrhea and irritable bowel syndrome with diarrhea. The Bausch Health acquisition of Synergy assets is expected to be completed with cash in hand.
SGYP stock is plummeting about 57.4% on Wednesday following the news, with shares now selling at 14 cents apiece. On the other hand, BHC stock is surging close to 6.9% on the move.