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Synta Pharmaceuticals Corp.’s decision to suspend its so-called Symmetry clinical trial procedures for its elesclomal drug candidate is having serious downstream effects, leading the company to postpone releasing its earnings report and to formulate a new strategy to compensate.
Late last month, citing patient safety concerns, Lexington-based Synta announced it was ending the Phase 3 study of its cancer treatment elesclomol. It also said it would suspend other ongoing studies with elesclomol, including one for prostate cancer, pending further analysis of the Symmetry trial results. Additionally, it said it would discuss future development of the drug with its partner, GlaxoSmithKline PLC, which earlier in February had made a payment of $10 million to Synta, awarded for a melanoma-related operational milestone around elesclomol.
The suspension will seriously jeopardize the U.S. Food and Drug Administration’s potential approval of elesclomol, according to one financial analyst. “While we handicap odds of approval for elesclomol at 10 percent, this may be optimistic,” said Andrew Vaino, a senior research analyst at California-based investment bank Roth Capital Partners LLC. Previously, Vaino had said in a note published on Feb. 27: “Currently, all of Synta’s value lies with elesclomol, in our opinion.”
The suspended study’s intent was to compare elesclomol in combination with the established cancer drug paclitaxel to paclitaxel alone in patients with stage 4 metastatic melanoma who had never had chemotherapy. However, an independent monitoring committee found that there had been an “imbalance in overall survival” in the patients — i.e., there had been more deaths occurring in the patients taking elesclomol with paclitaxel, than compared to those taking paclitaxel alone.
The suspension has caused Synta’s stock to plummet in recent weeks, and earlier this week it announced that its earnings call, scheduled for March 12, would be postponed. It also delayed filing its 10-K form with the U.S. Securities and Exchange Commission. However, Synta stated it planned to file as soon as it could, which should be within the 15-day extension period, which will end on March 31, allowed under SEC rules.
Despite the setbacks, Synta has tried to sound a positive note. The company issued a statement via e-mail that pointed out the elesclomol Phase 3 melanoma study “was only one of many interesting programs at the company.” Synta claimed to have a strong balance sheet, two years of operating capital and a strong pipeline with five publicly disclosed programs. It is “absolutely our intent to continue to develop our drug candidates,” the company claimed.
Synta vice president of investor relations Robert Kloppenburg this week said in an interview that the company was unique in its finances, as almost 50 percent of it is owned by insiders, and there are no debt or warrants.
Synta declined to comment on the postponement of the earnings call; however, a company spokesman stated there was no fixed date to reschedule it.
In a statement, GSK claimed it was “very disappointed” with the study’s outcome. It also said: “Any decisions regarding the future development of elesclomol will be made in conjunction with Synta.”
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