Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Synta Pharmaceuticals (NASDAQ:SNTA), a clinical-stage biopharmaceutical company focused on treating cancer and chronic inflammatory diseases, fell as much as 36% after reporting the results from its phase 2b/3 second-line non-small cell lung cancer trial with experimental treatment, Ganetespib.

So what: This one's a bit confusing on the surface because the Ganetespib data was statistically significant and generally positive. In the study addressing all adenocarcinomas, and including the trial arm of Ganetespib with docetaxel, patients had a median overall survival of 9.8 months compared to just 7.4 months on docetaxel alone. In patients who were diagnosed six months or more prior to the beginning of the study, the median overall survival was even more pronounced, with the Ganetespib arm delivering median overall survival of 10.7 months compared to just 6.4 months for the placebo. The concern stems from just the 2.4 month OS gain over chemotherapy alone in the broader trial, which could make it difficult to convince the Food and Drug Administration to approve a late-stage trial of the drug.

Now what: This is a case of having good data, but perhaps not good enough to successfully move the drug into a phase 3 setting. Even if Ganetespib manages to outline and get its phase 3 trial approved, it'll need more concrete data that its drug will improve overall survival if it has any chance of an FDA approval. I'm certainly not saying this is the end of the road for Ganetespib, but it's pretty clear why investors are disappointed with today's announcement, and it's all the more reason to stay firmly planted on the sidelines.

Craving more input? Start by adding Synta Pharmaceuticals to your free and personalized Watchlist so you can keep up on the latest news with the company.

Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.

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