Despite all the trash we talk about layoffs, Graveyards and such, we’re still bullish on the future of biotech and pharma. And just because we rag on CEOs and weird investments doesn’t mean we don’t try to take an objective perspective. We’re analysts, physicians and scientists too, not just gossipers

Take Synta, we felt for these guys, really we did, but not that much. Here’s three reasons why we didn’t cry too much:

Melanoma

You know how hard it is to treat stage IV melanoma?! The 5 year survival is something like 10-15%. IL-2 doesn’t work and treatment is basically surgery and palliative. Of course, all Synta had to do was show improvement in PFS (progression-free survival) with elesclomol vs elesclomol/paclitaxel for their primary endpoint. Maybe they aimed too high and should have gone with prostate or something? But then again their Phase 2 looked OK and GSK seemed to think so.

Again, this is such a difficult area to develop a drug in, patients are so sick and treatments rarely work, we’re bearish from the beginning – which brings me to my next reason:

Previous Failures

Oh, many have tried this game – and failed miserably. Genta was the biggest one which had a $1B+ market cap erased back in 2004 when Genasense (oblimersen sodium) crashed and burned. In fact, these guys are still trying to get Genasense approved! Btw, Genta is a completely different monster with a V LONG and CHECKERED history. Onyx and CancerVax have also failed at the melanoma game.

And finally, we have:

Pipeline and Money

Next to science and IP, these are the next two things that are most vital to a young biotech. As of the end of 2008, Synta had about $80M cash on hand. They also recently received two LARGE milestone payments, one from GSK ($15M) for elesclomol and one from Roche ($25M) for a CRACM ion-channel development partnership (<—-preclinical!!!)

Synta’s pipeline still looks pretty good, with apilimod in development for rheumatoid arthritis and STA-9090, an HSP-90 inhibitor for cancer with data expected by year’s end.

With the stock at an all time low, now might be the best time to start doing your due diligence. But be quick about it, Synta rebounded today, up over 90% back to $2.62…hurrry!!!!

Image from monster

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