Synta's ASCO Presentation Encourages Investors Print E-mail
By Brian Wilson, Contributor   
Monday, 11 June 2012 03:53
icon_marketmoverSynta Pharmceuticals (SNTA) is a drug developer focused primarily in oncology whose shares have been on the move. Currently, the company has two drugs in clinical trials.

One is Elesclomol (a mitochondria metabolism inhibitor), and then there’s the company’s flagship project – ganetespib. Ganetespib is a HSP90 inhibitor that is being tested for efficacy in a variety of cancer types in clinical trials. Hsp90 (heat shock protein 90) is a very common and widely used protein that has been found to stabilize many proteins that tumors use to grow.

Perhaps the most anticipated clinical program is ganetespib’s non-small cell lung cancer study (the GALAXY trial). This phase IIb/III trial was designed to compare the results of patients treated with both docetaxel and ganetspib relative to patients treated only with docetaxel. Docetaxel is currently a standard second-line treatment for NSCLC. Since ganetespib’s mechanism targets cancer in a radically different way (through the inhibition of a protein that can often dodge conventional oncology therapies), we may see it being paired with multiple other marketed drugs in future clinical trials, providing oncologists with many more tools at their disposal.

At the 2012 annual meeting of ASCO (the American Society of Clinical Oncology), Synta held a presentation that discussed their Hsp90 inhibitor. Much of the focus was on ganetespib’s mechanism, and on encouraging case studies involving patients’ x-ray scans which showed visually apparent improvements in their abnormal lung tissue (from its non-small cell lung cancer phase II trials).

The GALAXY trial has yet to release its newest data, but another presentation at ASCO discussed results from the previous phase II trial which studied the lone effects of ganetespib on patients with non-small cell lung cancer. The most common adverse events induced by ganetespib were diarrhea, which ranged from mild to severe and was easily manageable. Even better was an absence of reported hepatic or ocular toxicity, which has been a major barrier for other Hsp90 inhibitors.

Results from the phase IIb/III (GALAXY) trials will not be released anytime soon, but we do know that interim results should have a huge impact on the shares. SNTA shares have recently enjoyed a massive rally (at the very end of May 2012) from about $4/share to almost $6/share. The reason for the jump was a combination of analyst upgrades (like BMO Capital’s upgrade to “Outperform” on June 4th) combined with the great safety and efficacy data from phase II trials presented at ASCO.  11.8% of the shares short right now, meaning that there is a significant amount of capital probably betting on poor future results from the GALAXY trial. I’d expect tame price action until we get more news about ganetespib, since the other drugs in Synta’s pipeline are very underdeveloped at the time. Trade accordingly.



Disclosure: None




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