Synta’s Q2 Loss Narrower than Expected, Focus on Pipeline

Zacks

Synta Pharmaceuticals Corp. SNTA reported a second-quarter 2015 loss of 15 cents per share, narrower than the Zacks Consensus Estimate of a loss of 17 cents and the year-ago loss of 24 cents per share.

With no approved product in its portfolio, the company does not generate revenues yet.

In the second quarter of 2015, research and development (R&D) expenses were $16.4 million, down 12.7% from the year-ago quarter. The decrease in R&D expense was primarily due to lower costs related to the ganetespib program (specifically for the phase II GALAXY-1 study and other earlier stage company-sponsored clinical studies). General and administrative expenses were up 6.4% year over year to $3.1 million.

Pipeline Update

Synta has made significant progress with its lead pipeline candidate, ganetespib, which is currently in late-stage development. The company is conducting the phase III GALAXY-2 study on ganetespib for non-small-cell lung carcinoma (NSCLC) and expects the first interim overall survival analysis by the end of 2015 with final analysis expected in 2016. Positive data from the study will enable the company to file regulatory application for ganetespib for NSCLC next year.

Apart from ganetespib, Synta is working on the development of candidates from its Hsp90 inhibitor drug conjugate (HDC) platform. The lead candidate from the HDC platform, STA-12-8666, has demonstrated broad activity in several tumor types, including significant activity in patient-derived xenograft models of pancreatic cancer and small cell lung cancer. STA-12-8666 has also demonstrated improved tolerability compared to Campto (irinotecan) in preclinical models. The company plans to submit an investigational new drug application for the candidate in the first quarter of 2016.

Synta carries a Zack Rank #2 (Buy). Other well-ranked stocks in the health care sector are Ligand Pharmaceuticals Incorporated LGND, Valeant Pharmaceuticals International, Inc. VRX and Anacor Pharmaceuticals, Inc. ANAC. While Ligand and Valeant carry a Zacks Rank #1 (Strong Buy), Anacor holds a Zacks Rank #2 (Buy).

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