GlaxoSmithKline ( GSK) and Synta Pharmaceuticals ( SNTA) said Wednesday they will collaborate on late-stage development of a drug for the most deadly form of skin cancer. As part of the collaboration to develop and commercialize STA-4783 for metastatic melanoma, Synta will receive an upfront $80 million payment and will be eligible for a maximum of $885 million in milestones -- and GSK has the option to buy up to $45 million of Synta's common stock if certain development and regulatory milestones are met. They will share responsibility for development and commercialization in the U.S., and GSK will have exclusive responsibility outside of the U.S. Synta will fund development in the U.S. The companies will share costs for commercialization in the U.S., development out of the U.S. and development of other indications. Synta will receive double-digit tiered royalties on net sales outside of the U.S. STA-4783 is an injectable, investigational drug candidate that kills cancer cells by elevating oxidative stress levels beyond a breaking point, triggering programmed cell death. The companies said that in preclinical models the drug showed potent killing of a broad range of cancer cell types at high doses, and strongly enhanced the efficacy of certain chemotherapy agents, with minimal additional toxicity, at moderate doses. Synta shares were trading down 95 cents, or 9.3%, at $9.30, while Glaxo was a slight 0.3% lower at $53.44.
Stocks soar as the gross domestic product rises at an annualized rate of 3.5% in the third quarter and continuing jobless claims fall. Gregg Greenberg recaps the action in The Real Story video (above).