The Zacks Analyst Blog Highlights:DeVry, Synergy Pharmaceuticals, Takeda Pharmaceutical, Forest Laboratories and Ironwood Pharmaceuticals

Jan 02, 2013, 09:30 ET from Zacks Investment Research, Inc.

CHICAGO, Jan. 2, 2013 /PRNewswire/ -- announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include DeVry, Inc. (NYSE: DV), Synergy Pharmaceuticals (Nasdaq: SGYP), Takeda Pharmaceutical Company Limited (OTC:TKPYY), Forest Laboratories Inc. (NYSE: FRX) and Ironwood Pharmaceuticals (Nasdaq: IRWD).


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Here are highlights from Monday's Analyst Blog:

DeVry: A Strong Buy

Rising earnings estimates on the back of strong first-quarter fiscal 2013 results, which included a 58.1% earnings surprise, helped this diversified education provider DeVry, Inc. (NYSE: DV) achieve a Zacks #1 Rank (Strong Buy) on December 29. This stock turned around from past few quarterly results and has bright prospects going forward.

The stock is currently trading at 80.9% discount to its 52-week high of $42.37. With a discounted price and long-term expected earnings growth rate of 9.8%, this stock offers an attractive investment opportunity.

The Rank Drivers

Combination of a solid cost-control strategy, improving new student enrollments, brand building and growth investments and an upbeat outlook are the rank drivers for this stock.

On October 25, DeVry reported first-quarter fiscal 2013 (ended September 30) earnings of 49 cents per share, largely beating the Zacks Consensus Estimate of 31 cents by 58%. Higher-than-expected cost savings and improving new student enrollments at several institutions drove the earnings beat.

Continued progress on its performance improvement plan to align costs, regain enrollment growth and make growth investments helped the company to turnaround from the past few weak quarterly results.

Revenue of $482.7 million also beat the Zacks Consensus Estimate of $481 million primarily driven by better-than-expected new enrollment growth at the medical institutions. Though post-secondary enrollments across all its programs declined year over year, the company witnessed solid new enrollment growth in healthcare institutions like Chamberlain College of Nursing and Carrington Colleges. The sequential improvement in new enrollments at DeVry University is also an encouraging sign.

Operating costs declined both year over year and sequentially owing to DeVry's cost saving initiatives. Though near-term results are expected to remain choppy due to continued enrollment declines at the flagship DeVry University, we believe that the company has a solid plan to reduce costs and drive attractive earnings growth in the 2014-2016 period.

Pipeline Progress at Synergy Pharma

Synergy Pharmaceuticals (Nasdaq: SGYP) recently initiated a phase IIb study with plecanatide for the treatment of patients suffering from constipation-predominant irritable bowel syndrome (IBS-C).

Synergy Pharma will be enrolling 350 patients suffering from IBS-C around 70 sites in the US. These patients will be treated with any one of the four doses of plecanatide (0.3, 1.0, 3.0, or 9.0 mg) or placebo for 12 weeks.

The trial will be evaluating the average change in complete spontaneous bowel movements (CSBM's) during the trial period in comparison to their baseline weekly CSBM rate that was established during the screening phase of the study. In addition to this, Synergy Pharma will be evaluating spontaneous bowel movements (SBM's) and daily abdominal pain, discomfort along with bloating scores and impact of the candidate on disease-specific quality of life measures during the study.

The IBS-C market already has players like Takeda Pharmaceutical Company Limited (OTC:TKPYY), Forest Laboratories Inc. (NYSE: FRX) and Ironwood Pharmaceuticals (Nasdaq: IRWD).

We note that Synergy Pharma is conducting an independent study on plecanatide for the treatment of patients suffering from chronic idiopathic constipation. The company expects to complete the study soon and report top-line results within a few weeks.

Apart from plecanatide, Synergy Pharma also completed a phase I clinical trial on SP-333, a guanylate cyclase C (GC-C) agonist, being developed for the treatment of ulcerative colitis (UC) and other GI diseases. The company now expects to initiate a multi-dose, dose-escalation trial in patients by January 2013.

Synergy Pharma currently carries a Zacks #3 Rank (Hold) in the short run. Meanwhile, Ironwood Pharma carries a Zacks #2 Rank (Buy).

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