According to the Complaint, Synergy is a biopharmaceutical company focused on development and commercialization of therapies to treat Gastro-Intestinal disorders and diseases.
According to the law firm press release, on September 5, 2017, the Defendants issued a press release announcing that Synergy closed on a "non-dilutive" $300 million loan from CRG Partners III L.P., which would be available to Synergy "when needed" and fund the Company's operations through 2019. On November 14, 2017, the end of the Class Period, Synergy revealed that terms of the loan agreement, omitted from Defendants' prior statements regarding the loan, prevented it from accessing $200 million of the loan without conducting a dilutive secondary offering or offerings of shares to raise cash and, as such, the Company was conducting a secondary offering of its shares. Thus, contrary to Defendants' statements at the beginning of the Class Period, the loan was not available to Synergy "when needed," would result in dilution of the outstanding shares, and would not be sufficient to fund the Company's operations through 2019, without dilution. On the news, Synergy's share price plunged, trading as low as $1.68 per share, thereby injuring Class members.
On June 22, 2018, the Court issued an order consolidating cases and appointing Lead Plaintiff and Counsel. The consolidated cases shall be identified as "In re Synergy Pharmaceuticals, Inc. Securities Litigation." Lead Plaintiff filed a consolidated amended Complaint on August 31.
On December 21, 2018, Synergy filed a voluntary petition for relief under Chapter 11 of Title 11 of the United States Code (“Bankruptcy Code”) in the United States Bankruptcy Court for the Southern District of New York, staying any further action against the Debtors or their property under Bankruptcy Code section 362(a). On October 2, 2019, the Court lifted the stay. On November 20, the Court issued an Order consolidating cases.