CORRECTING and REPLACING Synergy Pharmaceuticals Reports Fourth Quarter and Full Year 2016 Financial Results and Business Update

NEW YORK–(BUSINESS WIRE)– Please replace the release, dated March 1, 2017, with the following
corrected version due to multiple revisions in the Financial Results
bullets and financial tables.

The corrected release reads:

SYNERGY PHARMACEUTICALS REPORTS FOURTH QUARTER AND FULL YEAR 2016
FINANCIAL RESULTS AND BUSINESS UPDATE

Synergy Pharmaceuticals Inc. (NASDAQ:SGYP), a biopharmaceutical company
focused on the development and commercialization of novel
gastrointestinal (GI) therapies, today reported its financial results
and business update for the full year and the three months ended
December 31, 2016.

“The approval of TRULANCE™ (plecanatide) in the United States for the
treatment of adults with chronic idiopathic constipation was a
tremendous event not just for Synergy, but also for the millions of
patients with CIC who have been in need of a new therapeutic
option,” said Gary S. Jacob, PhD, Chairman and Chief Executive Officer
of Synergy Pharmaceuticals Inc. “I am pleased with the progress our team
has made implementing a strong and compelling commercial plan, a robust
high quality supply chain, and ensuring that the Synergy organization,
healthcare providers and payers, are well prepared for the launch of
TRULANCE this month. In addition, we are continuing our efforts to bring
TRULANCE to patients with irritable bowel syndrome with constipation, as
we remain on-track to file a supplemental new drug application (sNDA)
this month.”

“Together with the approval of TRULANCE, the fourth quarter of 2016 and
beginning of 2017 were marked by several key accomplishments, including
positive top-line results in two Phase 3 trials of TRULANCE in IBS-C
which will support the sNDA filing and the recent publication of our
Phase 3 CIC data in the American Journal of Gastroenterology. We’ve also
strengthened our balance sheet and enhanced our strategic options as we
completed a $125 million financing, continued to reduce our convertible
debt and successfully eliminated restrictive covenants associated with
that debt. These achievements put Synergy in an excellent position for
future growth as we begin to commercialize our first product, TRULANCE.”

Fourth Quarter 2016 and Recent Highlights

TRULANCE™ (plecanatide) CIC Update

• On January 19, 2017, the United States (U.S.) Food and Drug
  Administration (FDA) approved our first product, plecanatide, under
  the trademarked name TRULANCE, for the treatment of adults with
  chronic idiopathic constipation (CIC). The efficacy and safety of
  TRULANCE was evaluated in the largest Phase 3 CIC clinical trials to
  date, which included more than 2,600 patients in two randomized,
  12-week, double-blind, placebo-controlled studies of TRULANCE. In an
  integrated analysis of both studies, diarrhea was the most common
  adverse reaction, reported in 5% of patients treated with TRULANCE
  compared to 1% of patients treated with placebo. The recommended adult
  dosage of TRULANCE is 3 mg taken orally, once daily, with or without
  food. TRULANCE will be available in the U.S. this quarter.

TRULANCE IBS-C Development Update

• In December 2016, we announced positive top-line results in the two
  Phase 3 clinical trials of TRULANCE for the treatment of adults with
  IBS-C. In both trials, TRULANCE met the study’s primary endpoint
  showing statistical significance in the percentage of patients who
  were overall responders compared to placebo during the 12-week
  treatment period. An Overall Responder, as defined by the FDA, is a
  patient who fulfills both ≥ 30% reduction in worst abdominal pain and an
  increase of ≥ 1 complete spontaneous bowel movement (CSBM) from
  baseline, in the same week, for at least 50% of the 12 treatment
  weeks. This is the current primary endpoint required for FDA approval
  in IBS-C. In both studies, the most common adverse event was diarrhea
  (Study 1 = 3.2% at 3 mg and 3.7% at 6 mg compared to 1.3% at placebo;
  Study 2 = 5.4% at 3 mg and 4.3% at 6 mg compared to 0.6% at placebo).
  We plan to file a new drug application supplement with clinical data
  (sNDA) in the first quarter of 2017 and expect a 10-month review
  period from submission. We plan to present additional Phase 3 data
  from the two IBS-C trials at an appropriate scientific meeting later
  this year.

TRULANCE Launch Update

We are focused on three key strategic imperatives to achieve our
objective of ensuring that TRULANCE is ready for launch this quarter:

• Product Readiness
• Market and Brand Readiness
• Organizational Readiness

Product Readiness

• Established a robust supply chain process and quality management
  system.
• Implemented our third party logistics (3PL) distribution network.
• Trade and sample stock manufactured and on-track for launch this
  quarter.
• Launching TRULANCE 3 mg in an innovative 30-count blister pack.

Market and Brand Readiness

• We are very encouraged by the feedback we have received from our
  market research, advisory boards and field-based customer meetings.
  • Completed extensive market research with more than 2,700
    healthcare providers and over 5,300 patients.
  • Conducted multiple advisory boards with national and regional GI
    key opinion leaders, other healthcare providers and payers.
  • Since January 2016, our market access team has been meeting with
    key payer customers that represent over 230 million covered lives
    in the U.S.

• Initiated pre-launch multimedia and digital campaigns to drive company
  awareness and disease education, focusing on current unmet needs of
  patients with CIC.
• Finalized TRULANCE core marketing strategies and launch tactics,
  including a compliant, value-optimizing, cost effective promotional
  mix to reach the broadest universe of prescribers.
• Co-pay card programs and other patient assistance programs in place
  which will help us achieve access in 2017.
• Finalized pricing strategy for TRULANCE and will launch with a
  wholesale acquisition cost (WAC) of $353.48.

Organizational Readiness

• Utilizing a hybrid sales model to reach key prescribers and
  influencers at launch.
  • Less than 20% of prescribers in the U.S. currently account for
    over 70% of the branded constipation prescription market. These
    prescribers, which include gastroenterologists and primary care
    physicians, will be the focus of our field force at launch.
• Hired Synergy Regional Business Directors averaging 11 years of
  management experience and over 10 years in relevant GI fields.
• Hired Synergy Regional GI Account Specialists averaging 13 years of
  pharmaceutical experience and 8.5 years of GI experience.
• Partnered with Publicis Touchpoint Solutions, Inc. who have hired
  highly experienced sales representatives that will be fully dedicated
  to TRULANCE at launch.
  • Our Publicis Touchpoint sales representatives have an average of
    11.5 years of pharmaceutical experience, and nearly 6 years of GI
    experience, with over 90% coming from other peer GI and PCP
    companies.
• Medical education efforts have been ongoing since March 2016.

Financial Results

• As of December 31, 2016, we had approximately $82.4 million of cash
  and cash equivalents on hand as compared to approximately $111.8
  million cash and cash equivalents and available for sale securities as
  of December 31, 2015.
• Net cash used in operating activities was $129.8 million in the year
  ended December 31, 2016, as compared to $101 million in the year ended
  December 31, 2015.
• Research and development expenses in the fourth quarter of 2016 were
  approximately $17.2 million, as compared to $19.9 million in the
  fourth quarter of 2015. These decreased expenses were primarily a
  result of completion of IBS-C studies.
• Selling, general and administrative expenses were approximately $25.2
  million in the fourth quarter of 2016, as compared to approximately
  $7.1 million in the fourth quarter of 2015. These increased expenses
  primarily reflect commercial preparedness and planning expenses to
  support an anticipated launch of Trulance during the first quarter of
  2017.
• On January 31, 2017, Synergy entered into an underwriting agreement to
  issue and sell 20,325,204 shares of common stock of the Company in an
  underwritten public offering. The Offering closed on February 6, 2017,
  yielding net proceeds of approximately $121.6 million, after deducting
  underwriting discounts and commissions and estimated offering expenses
  payable by the Company.
• As of December 31, 2016, the principal balance on our 7.50%
  Convertible Senior Notes (“Notes”) due 2019 was $23.5 million as
  compared to $159 million at December 31, 2015.
• We had 202.7 million and 113.7 million common shares issued and
  outstanding at December 31, 2016 and December 31, 2015, respectively,
  which reflects primarily an increase in the issuance of shares from
  the conversions of Notes, equity offering in May 2016 and exercise of
  warrants.
• Net loss in the fourth quarter of 2016 was $59.9 million, as compared
  to a net loss of $30.4 million incurred in the fourth quarter of 2015.

Indications and Usage

TRULANCE is a guanylate cyclase-C (GC-C) agonist indicated in adults for
the treatment of chronic idiopathic constipation (CIC).

Please click here
for Full Prescribing Information.

About Chronic Idiopathic Constipation (CIC)

CIC affects approximately 14 percent of the global population,
disproportionately affecting women and older adults. People with CIC
have persistent symptoms of difficult-to-pass and infrequent bowel
movements. In addition to physical symptoms including abdominal bloating
and discomfort, CIC can adversely affect an individual’s quality of
life, including increasing stress levels and anxiety.

About Irritable Bowel Syndrome with Constipation (IBS-C)

Irritable bowel syndrome (IBS) is a chronic gastrointestinal disorder
characterized by recurrent abdominal pain and associated with 2 or more
of the following: related to defecation, associated with a change in the
frequency of stool, or associated with a change in the form (appearance)
of the stool. IBS can be subtyped by the predominant stool form:
constipation (IBS-C), diarrhea (IBS-D), or mixed (IBS-M). Those
within the IBS-C subtype experience hard or lumpy stools more than 25
percent of the time they defecate, and loose or watery stools less than
25 percent of the time. It is estimated that the
prevalence of IBS-C in the U.S. adult population is approximately 4 to 5
percent, although this number may vary as patients often fluctuate
between the three subtypes of IBS.

About TRULANCE^™

TRULANCE^™ (plecanatide) is a once-daily tablet approved for
adults with CIC and is being evaluated for IBS-C. With the exception of
a single amino acid, TRULANCE is structurally identical to uroguanylin,
a naturally occurring and endogenous human GI peptide. Uroguanylin is
thought to act in a pH-sensitive manner, targeting GC-C receptors
primarily in the small intestine coinciding with areas of fluid
secretion.

About Synergy Pharmaceuticals Inc.

Synergy is a biopharmaceutical company focused on the development and
commercialization of novel GI therapies. The company has pioneered
discovery, research and development efforts on analogs of uroguanylin, a
naturally occurring and endogenous human GI peptide, for the treatment
of GI diseases and disorders. Synergy’s proprietary uroguanylin analog
platform includes one commercial product TRULANCE (plecanatide) and a
second lead product candidate – dolcanatide. For more information,
please visit www.synergypharma.com.

Forward-Looking Statements

Certain statements in this press release are forward-looking within the
meaning of the Private Securities Litigation Reform Act of 1995. These
statements may be identified by the use of forward- looking words such
as « anticipate, » « planned, » « believe, » « forecast, » « estimated, »
« expected, » and « intend, » among others. These forward-looking statements
are based on Synergy’s current expectations and actual results could
differ materially. 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, substantial
competition; our 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; limited
sales and marketing efforts and dependence upon third parties; 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 press release 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 Synergy’s Annual
Report on Form 10-K for the year ended December 31, 2016 and other
periodic reports filed with the Securities and Exchange Commission.
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 Synergy does not undertake any obligation to update
publicly such statements to reflect subsequent events or circumstances.

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