1Q 201 1Q 2018 8 UPD UPDATE TE May 10, 2018 SAFE SAFE HARBOR - - PowerPoint PPT Presentation

1q 201 1q 2018 8 upd update te
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1Q 201 1Q 2018 8 UPD UPDATE TE May 10, 2018 SAFE SAFE HARBOR - - PowerPoint PPT Presentation

1Q 201 1Q 2018 8 UPD UPDATE TE May 10, 2018 SAFE SAFE HARBOR HARBOR ST STATE TEME MENT NT This presentation and any statements made for and during any presentation or meeting contain forward-looking statements related to Synergy


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1Q 201 1Q 2018 8 UPD UPDATE TE

May 10, 2018

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SLIDE 2

1Q 2018 Update I May 10, 2018

SAFE SAFE HARBOR HARBOR ST STATE TEME MENT NT

This presentation and any statements made for and during any presentation or meeting contain forward-looking statements related to Synergy Pharmaceuticals Inc. under the safe harbor provisions of Section 21E of the Private Securities Litigation Reform Act of 1995 and are subject to risks and uncertainties that could cause actual results to differ materially from those projected. These statements may be identified by the use of forward-looking words such as "anticipate," "planned," "believe," "forecast," "estimated," "expected," and "intend," among others. There are a number of factors that could cause actual events to differ materially from those indicated by such forward-looking statements. These factors include, but are not limited to, the development, launch, introduction and commercial potential of TRULANCE™; growth and opportunity, including peak sales and the potential demand for TRULANCE, as well as its potential impact on applicable markets; market size; substantial competition;

  • ur ability to continue as a going concern; our need for additional financing; uncertainties of patent protection and litigation; uncertainties of

government or third party payer reimbursement; dependence upon third parties; our financial performance and results, including the risk that we are unable to manage our operating expenses or cash use for operations, or are unable to commercialize our products, within the guided ranges or

  • therwise as expected; and risks related to failure to obtain FDA clearances or approvals and noncompliance with FDA regulations. As with any

pharmaceutical under development, there are significant risks in the development, regulatory approval and commercialization of new products. There are no guarantees that future clinical trials discussed in this presentation will be completed or successful or that any product will receive regulatory approval for any indication or prove to be commercially successful. Investors should read the risk factors set forth in our most recent periodic reports filed with the Securities and Exchange Commission, including our Form 10-K for the year ended December 31, 2017. While the list of factors presented here is considered representative, no such list should be considered to be a complete statement of all potential risks and uncertainties. Unlisted factors may present significant additional obstacles to the realization of forward-looking statements. Forward-looking statements included herein are made as of the date hereof, and we do not undertake any obligation to update publicly such statements to reflect subsequent events or circumstances except as required by law. The information in this presentation is not targeted at the residents of any particular country or jurisdiction and is not intended for distribution to, or use by, any person in any jurisdiction or country where such distribution or use would be contrary to local law or regulation.

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IN INTR TROD ODUC UCTION TION

Troy Hamilton Chief Executive Officer

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1Q 2018 Update I May 10, 2018

EN SU R IN G

a strong financial foundation

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20 2018 18 KEY KEY BUSINE USINESS SS PRI PRIORITI ORITIES ES EXPLOR IN G

all strategic & business development opportunities

OPTIMIZIN G

the value of Trulance

D R I V E VAL U E F O R PAT I E N T S , C U S TO M E R S & S H AR E H O L D E R S

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SLIDE 5

1Q 2018 Update I May 10, 2018

OPT OPTIMIZ IMIZING ING THE THE VAL ALUE UE OF TR OF TRULAN ULANCE CE

  • Trulance 1Q’18 net sales up 18% vs. 4Q’17 adjusted net sales
  • Continuing to drive market share, prescription volume and expanding

prescriber base

  • Only CIC/IBS-C Rx brand to show positive growth quarter-over-quarter
  • Pulling through formulary wins and expanding coverage

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1Q 2018 Update I May 10, 2018

17143 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 20,000 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Normalized TRX Normalized TRx

TR TRUL ULANCE ANCE ACHIEVE CHIEVED D HIG HIGHEST HEST TOTAL AL MONTHL MONTHLY Y NORMALIZED NORMALIZED PRE PRESCR SCRIPT PTIO IONS NS IN IN MAR MARCH CH 20 2018 18

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Started promoting IBS-C in late February 2018

Source: IQVIA XPT, Mar 2017 – Mar 2018

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SLIDE 7

1Q 2018 Update I May 10, 2018

TRULANCE ONLY Rx BRAND TO SHOW POSITIVE GROWTH DESPITE TYPICAL 1Q CHALLENGES

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Source: IQVIA - NPA

  • 5.3%

3.8%

  • 6.0%
  • 4.0%
  • 2.0%

0.0% 2.0% 4.0% 6.0%

Other Branded Rx Trulance

% Normalized TRx Volume Change 1Q 2018 vs. 4Q 2017

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1Q 2018 Update I May 10, 2018

TR TRULAN ULANCE CE OUT OUTGR GROWING WING THE THE COMP COMPET ETITIO ITION

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4.7% 24%

0.0% 5.0% 10.0% 15.0% 20.0% 25.0%

Other Branded Rx Trulance

% Normalized TRx Volume Change 9-weeks ending 2/23/18 vs. 9-weeks ending 4/27/18

Source: IQVIA - NPA

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1Q 2018 Update I May 10, 2018

TRULANCE PRESCRIBER BASE GREW OVER 20% IN 1Q’18

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Source: IQVIA XPT, Mar 2017 – Mar 2018

257 1,145 2,427 3,768 4,949 6,121 7,043 7,974 8,868 9,644 10,295 10,920 11,755 2,000 4,000 6,000 8,000 10,000 12,000 Total TRULANCE Prescribers

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1Q 2018 Update I May 10, 2018

20 2018 18 MARKE MARKET T ACCE CCESS SS FOCU FOCUS S AND AND PRI PRIORITI ORITIES ES

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EXPANDING COVERAGE FOR TRULANCE

Maximize Current Coverage Improve National Coverage Expand Regional Coverage

  • Commercial
  • Medicare Part D
  • Regional Payers
  • State Medicaid
  • Managed Medicaid
  • Pull-through

formulary wins

  • Push-through prior

authorization

  • bstacles
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1Q 20 1Q 2018 18 FIN FINANC ANCIAL IAL SUMMA SUMMARY

Gary Gemignani Chief Financial Officer

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1Q 2018 Update I May 10, 2018

1Q 1Q 20 2018 18 FIN FINANCIAL ANCIAL SUM SUMMAR MARY Select finan Select financial cial mea measur sures es (no (non-GAA GAAP) P)

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(Unaudited, $ in thousands)

Three Months Ended March 31, 2018 Three Months Ended December 31, 2017

  • Adj. Net sales

$ 8,586 $ 7,343

  • Adj. R&D expenses

$ 2,721 $ 1,474

  • Adj. SG&A expenses

$ 37,857 $ 39,662

  • Adj. Operating expenses

$ 40,578 $ 41,136

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1Q 2018 Update I May 10, 2018

ENS ENSURING URING A A ST STRONG ONG FIN FINANCIAL ANCIAL FOU FOUND NDATI TION ON

  • PRIORITIZED KEY INVESTMENTS IN AREAS OF HIGH-RETURN
  • Essential market access initiatives
  • Sales force and high-return marketing programs
  • ACHIEVED COST EFFICIENCIES / MAINTAINED DISCIPLINED EXPENSE MANAGEMENT
  • Lowering projected full year 2018 total adjusted OPEX to be in $165M - $175M range
  • SECURED CONTINUED ACCESS TO CAPITAL AND FINANCIAL FLEXIBILITY
  • Ability to access up to an additional $100M via amended CRG debt facility in 2018

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1Q 2018 Update I May 10, 2018

EXP EXPLORING ORING ALL ALL ST STRA RATE TEGIC GIC & & BUSINE USINESS SS DEV DEVEL ELOPM OPMENT ENT OPP OPPOR ORTUN TUNITIES ITIES

  • Executed on Trulance Canadian licensing deal
  • Initiated partnership with NIH to advance dolcanatide development
  • Engaged in ongoing process to review and evaluate a broad range of

strategic opportunities to enhance shareholder value

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1Q 2018 Update I May 10, 2018

OPP OPPOR ORTUNI TUNITY TY TO B O BUILD SHAREHOLDER UILD SHAREHOLDER VAL ALUE UE THR THROUGH OUGH ONGO ONGOIN ING B G BUS USIN INES ESS S DEVE DEVELOP OPMENT MENT EF EFFOR FORTS TS

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  • TRULANCE/SYNERGY in US
  • Partnering to extend reach and promotion in primary care market
  • In-license or partner with an additional asset, leveraging commercial infrastructure

& GI expertise

  • TRULANCE Ex-US
  • Pursue ex-US licensing deals where commercial dynamics allow for value creation
  • CORPORATE DEVELOPMENT
  • Enhance pipeline with strategic partnering opportunities
  • M&A and other strategic options that may accelerate profitability and create

shareholder value

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1Q 2018 Update I May 10, 2018

EN SU R IN G

a strong financial foundation

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20 2018 18 KEY KEY BUSINE USINESS SS PRI PRIORITI ORITIES ES EXPLOR IN G

all strategic & business development opportunities

OPTIMIZIN G

the value of Trulance

D R I V E VAL U E F O R PAT I E N T S , C U S TO M E R S & S H AR E H O L D E R S

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Q&A Q&A

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EXHIBIT EXHIBIT

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1Q 2018 Update I May 10, 2018

DIS DISCL CLOSUR OSURE E REGARDI REGARDING NG NON NON-GAA GAAP P FIN FINANCIAL ANCIAL ME MEASURE ASURES S

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Synergy excludes stock-based compensation expense from its research & development expenses, selling, general & administrative expenses and total operating expenses. We believe that the non-GAAP measure, when viewed in addition to and not in lieu of our reported GAAP results, assists investors in understanding our results of operations. Management excludes stock-based compensation expense when evaluating its performance from period to period because such expenses do not require cash settlement and because such expenses are not used by management to assess the performance of the Company's business. Management believes this non-GAAP information is useful for investors, taken in conjunction with Synergy’s GAAP financial statements, because it provides greater transparency and period-over-period comparability with respect to Synergy’s operating performance. These measures are also used by management to assess the performance of the business. Investors should consider these non-GAAP measures only as a supplement to, not as a substitute for or as superior to, measures of financial performance prepared in accordance with GAAP. In addition, these non-GAAP financial measures are unlikely to be comparable with non-GAAP information provided by other companies.

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1Q 2018 Update I May 10, 2018

GAAP GAAP TO O NON NON-GA GAAP AP REC RECONC ONCILI ILIATIO TION

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(Unaudited, $ in thousands) Three Months Ended March 31, 2018 Three Months Ended December 31, 2017 Net Sales $ 8,586 $ 9,400 Recognition of net sales which were deferred as of September 30, 2017

  • (2,057)
  • Adj. Net sales (non-GAAP)

$ 8,586 $ 7,343 Research and development expenses $ 3,392 $ 1,990 Stock based compensation expense (671) (516)

  • Adj. R&D expenses (non-GAAP)

$ 2,721 $ 1,474 Selling, general and administrative expenses $ 40,145 $ 41,779 Stock based compensation expense (2,288) (2,117)

  • Adj. SG&A expenses (non-GAAP)

$ 37,857 $ 39,662 Total operating expenses $ 43,537 $ 43,769 Stock based compensation expense (2,959) (2,633)

  • Adj. operating expenses (non-GAAP)

$ 40,578 $ 41,136