VFC's Stock House: Synergy Pharmaceuticals Strengthened By Merger Agreement

(EstateNewsWire.com, July 24, 2012 ) New York, NY -- Synergy Pharmaceuticals (SGYP), a company with major catalysts pending and a potential billion dollar product in the pipeline, and Callisto Pharmaceuticals (CLSP) announced on Friday that the two companies have entered into a definitive merger agreement. Callisto had previously held over twenty two million shares of SGYP stock and under the terms of the agreement those shares will be cancelled and Callisto shareholders, in turn, will be granted 0.17 shares of Synergy common stock for each outstanding share of Callisto common stock.

VFC's Stock House, an information and research outlet that brings ideas and opens discussions to a broad spectrum of investors, believes that this deal may be equally beneficial to shareholders of both companies.

Full report available: http://vfcsstockhouse.com/blog/article/-synergy-pharmaceuticals-strengthened-by-merger-agreement

A key takeaway from Friday's announcement is that the Synergy shares issued to Callisto shareholders would be 'locked up' for eighteen months following the completion of the deal, barring a "Change of Control" event, as noted in the press release.

These are key points to remember and the agreement should be viewed as an encouraging turn of events for Synergy shareholders, in my opinion.

Previous to this merger agreement, Callisto had already owned roughly forty percent of Synergy stock. Many large funds and institutions are hesitant to buy into a company when only one entity - in this case Callisto - already owns such a significant portion of that company. The fact that those Synergy shares owned by Callisto will now be cancelled and then reissued and spread evenly throughout the Callisto shareholder base alleviates that hurdle. Once the deal is consummated, the door is open for funds and institutions to start buying in again, which significantly enhances the prospects of growth for shareholders over the short, mid and long terms.

There were quite a few investors out there questioning why there was not more institutional interest in Synergy if the prospects for Plecanatide, currently being developed for the treatment of chronic idiopathic constipation (CIC) and constipation-predominant irritable bowel syndrome (IBS-C), were so bright. This merger agreement looks to be a move to answer those concerns.

For this week's list of hot stocks to watch: http://vfcsstockhouse.com/blog/article/-weekly-stock-watch-week-of-july-23-amrn-hznp-aapl-amzn-fb-cmcsa-yhoo-yum-mcd-ko-pep-goog-msft-ge-cat-cmi-hgsi-gsk-ssh-actc-imsc-mric-bsx-si-tlle-t-lptn-pfe

Contact VFC's Stock House: vfc@vfcsstockhouse.com

Originally published at: http://vfcsstockhouse.com

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About VFCsStockHouse.com:

VFC's Stock House is an information and research outlet that brings new ideas to the table and opens discussions for a broad spectrum of investors, with a strong focus on - but not limited to - biotech stocks, biopharma stocks, growth stocks and the pharmaceutical and healthcare sectors. VFC's Stock House provides individual company profiles, write-ups and reports as well as giving general insights into broader-market news through various 'Stock Watch' lists. At the conclusion of most weeks, VFC's Stock House issues a "Weekly Stock Watch" that examines news items, stocks and stories that made headlines during the previous trading week, but may also make headlines or influence trends during the upcoming week as well. The information contained within the pages of VFC’s Stock House are not intended to be taken as advice, but as a starting point where investors can follow up with their own DD and devise their own entry and exit strategies.

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