Synta fourth-quarter total collaboration revenue decreases to $3.0 million

Mar 11 2011

Synta Pharmaceuticals Corp. (NASDAQ: SNTA), a biopharmaceutical company focused on discovering, developing, and commercializing small molecule drugs to treat severe medical conditions, today reported fourth-quarter and full-year 2010 financial results, provided an update on recent progress with its programs, and announced 2011 objectives.

“We have a strong financial foundation for advancing these programs”

"We and our collaborators are excited about the ganetespib single-agent clinical activity observed in patients with a range of tumor types," said Vojo Vukovic, M.D., Ph.D., Senior Vice President and Chief Medical Officer, Synta. "Objective responses and durable tumor shrinkage have been seen in patients with non small-cell lung cancer (NSCLC), gastric cancer, triple-negative breast cancer, colorectal cancer, melanoma, renal cancer, and gastro-intestinal stromal tumors (GIST) who have exhausted standard of care treatment options. These responses in patients with highly resistant cancers demonstrate ganetespib is clinically active."

"The combined observations of single-agent activity in several cancer types and a favorable safety profile are very encouraging for the future of this program and the breadth of potential therapeutic applications," said Safi Bahcall, Ph.D., President and Chief Executive Officer. "Our highest priority this year is to build on these exciting clinical results and advance ganetespib towards registration."

A Phase 2b/3 trial for ganetespib in combination with docetaxel in 2^nd-line advanced NSCLC patients is expected to initiate in Q2 of 2011. Results from the first-stage, Phase 2b portion of the trial are expected by end of 2011 or early 2012. Additional results from ongoing trials with ganetespib in NSCLC and other cancers will be presented mid-year. Biomarker-defined subpopulations that are highly responsive to ganetespib single agent treatment, and possible paths to registration in these subpopulations, will be evaluated in parallel with the combination therapy approach.

Ganetespib (STA-9090) is a potent inhibitor of heat shock protein 90 (Hsp90) that is structurally unrelated to earlier Hsp90 inhibitors such as 17-AAG, and has shown superior activity to these agents in preclinical studies. Ganetespib is currently being studied in 11 Phase 2 trials.

The safety profile of ganetespib, based on over 350 patients treated to date, is encouraging, without the serious liver or common ocular toxicities of other Hsp90 inhibitors, or the hematologic toxicities and neuropathy often seen with chemotherapy. The most common adverse event seen with ganetespib treatment is diarrhea which is manageable with standard supportive care.

"We have been encouraged by the high level of interest from both the medical community and potential partners in this program, as well our two other most advanced programs - elesclomol, our mitochondria-targeting anti-cancer agent, and the CRACM ion channel program for inflammatory diseases," continued Dr. Bahcall. "We are in active discussions with multiple companies, several of which are reviewing more than one program. The level of interest and number of programs under discussion give us confidence we will conclude one or more partnerships by year-end."

"We have a strong financial foundation for advancing these programs," continued Dr. Bahcall. "The majority of our clinical trials are sponsored by investigators or cooperative groups, which are substantially less expensive than company-sponsored trials. Our primary company-sponsored commitment is our Phase 2b/3 trial for ganetespib. The Phase 2b portion of the two-stage design is expected to require $10 million or less in external costs this year. The combination of staged allocation of our financial commitments, strong third-party support, and potential partnerships provide us with a solid foundation from which to advance our programs over the coming year."

Clinical Programs

Ganetespib

• Presented preliminary Phase 2 single-agent results in NSCLC in February 2011 demonstrating clinical activity including durable, confirmed RECIST responses as well as tumor shrinkage.
• Announced that a Phase 2b/3 registration-enabling combination trial with docetaxel in NSCLC will initiate in Q2 2011. Expect initial results from first-stage, Phase 2b portion of trial in Q4 2011 or Q1 2012.
• Developed investigator-sponsored trials in breast, gastric, small cell lung, hepatic, prostate, ocular melanoma, colorectal, and pancreatic cancers.
• Identified recommended dose and schedule for the combination with docetaxel for the Phase 2b/3 study in non-small cell lung cancer.
• Announced collaboration with the Multiple Myeloma Research Foundation to support a clinical trial of ganetespib as single agent and in combination with bortezomib (VELCADE®) in multiple myeloma in 2H 2011.
• Presented preliminary results of Phase 1 trials in solid tumors at ASCO in June 2010 showing differentiated safety profile - absence of serious liver toxicities or common ocular toxicities seen with other Hsp90 inhibitors.
• Presented preliminary results of trials in hematologic cancers at ASH in December 2010.
• Expect to initiate up to six additional trials in combination with other anti-cancer agents as well as a single agent in 2011.
• Expect to present additional results in NSCLC mid-year and results from other indications in the second half of 2011.

Elesclomol

• Announced Phase 2 trial of elesclomol in combination with paclitaxel in ovarian cancer initiated by the Gynecologic Oncology Group, supported by the National Cancer Institute.
• Initiated single agent Phase 1 trial of elesclomol in acute myeloid leukemia.
• Presented additional data from Phase 3 trial in metastatic melanoma at ASCO in June 2010.
• Announced Phase 2b trial of elesclomol in NSCLC expected to begin in Q2 2011.

Pipeline

CRACM Ion Channel Program

• Licensed several drug candidates to Roche for development and commercialization. Synta is eligible for milestones and royalties under the terms of the license agreement.
• Identified and advanced new CRACM inhibitors, and initiated partnership discussions for these compounds.

Vascular Disrupting Agent

• Approved for funding of up to $1 million from U.S. Department of Defense for pre-clinical development of VDA in prostate cancer.

Fourth Quarter and Full Year 2010 Financial Results

In the fourth quarter of 2010, Synta recognized total collaboration revenue of $3.0 million compared to $4.7 million for the same period in 2009. Total collaboration revenue was $13.8 million for the year ended December 31, 2010 compared to $144.2 million for the same period in 2009, which included a one-time acceleration of approximately $114.6 million of deferred revenue related to a former partnership agreement with GSK. In addition, the Company recognized $1.0 million in grant revenue in the fourth quarter and year ended December 31, 2010.

Research and development expenses were $9.3 million for the fourth quarter in 2010 compared to $9.2 million for the same period in 2009. Research and development expenses were $40.3 million for the year ended December 31, 2010 compared to $51.1 million for the same period in 2009.

General and administrative expenses were $3.1 million for the fourth quarter in 2010 compared to $2.4 million for the same period in 2009. General and administrative expenses were $11.4 million for year ended December 31, 2010 compared to $12.7 million for the same period in 2009.

The Company reported a net loss of $8.8 million or $0.21 per basic and diluted share in the fourth quarter of 2010, compared to a net loss of $7.0 million or $0.21 per basic and diluted share for the same period in 2009. For the year ended December 31, 2010, the Company reported a net loss of $37.5 million or $0.93 per basic share and diluted share, compared to a net profit of $79.1 million or $2.33 per basic share and $2.32 per diluted share for the same period in 2009, which was principally as a result of the one-time acceleration of deferred revenue.

As of December 31, 2010, the Company had $51.0 million in cash, cash equivalents and marketable securities compared to $44.2 million as of December 31, 2009.

More detailed financial information and analysis may be found in the Company's Annual Report on Form 10-K, which was filed with the Securities and Exchange Commission on March 11, 2011.

Financial Guidance

Based on our current operating levels, we expect our cash resources will be sufficient to fund operations into 2012. This estimate assumes that certain activities contemplated for 2011 will be conducted subject to the availability of sufficient financial resources.