Look 5 Dumbest fans, we're not kidding when we say we want Synta (SNTA) to succeed. Seriously, we take no joy in flagging the foibles of a company dedicated to combatting lung cancer, even if its principal drug does have an utterly unpronounceable name.
That said, it is our sworn duty to shine the spotlight on corporate shortcomings wherever they may reside, whether it be cupcake or cancer companies. And that's why we cannot ignore the mistakes that led to a 34% shellacking in Synta's shares Monday.
Sorry Synta, but that's what happens when you put the ganetespib before the horse!To put it as simply as possible, a Phase II trial result revealed at the ASCO Conference on Monday did show that ganetespib improved survival in patients with advanced lung cancer. Nevertheless, the difference in patient deaths was relatively small and certainly not statistically significant enough to impress anybody, especially Synta investors who promptly took the stock to the woodshed. Even before those lackluster results were publicly revealed, however, Synta was already pushing patients to enroll in a phase III study of ganetespib in second-line lung cancer. As to why they think skipping ahead to the next level without truly clearing the previous bar will get them closer to an FDA approval for their drug, well, we have no clue, and already-skeptical investors clearly feel the same way. "If there was any enthusiasm for ganetespib going into the ASCO meeting, it's likely taking a hit now that investors have fixated on the anti-PD-1 drugs from Bristol-Myers Squibb (BMY) and Merck (MRK), says TheStreet's biotech ax Adam Feuerstein. "Unlike Synta's offering, these drugs are producing some of the strongest responses to melanoma ever seen and are also targeting lung cancer." Sad to say, but Synta seems to be heading in the wrong direction. Even worse, they feel the need to sprint.