Why Synta Pharmaceuticals Corp. Shares Jumped

Synta shares soared after announcing a new investigator-sponsored trial for its lead drug. Find out what this could mean for the company and your investment.

Mar 11, 2014 at 2:55PM

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 developer of small-molecule drugs for use in treating cancer and chronic inflammatory diseases, jumped by as much as 14% after announcing favorable news for its lead cancer drug, ganetespib, and announcing its fourth-quarter earnings results.

So what: For the quarter, Synta delivered no revenue and a 34% wider net loss of $24.2 million, or $0.31 per share. By comparison, Wall Street was anticipating a slightly narrower loss of $0.30 per share. Synta did note that it ended the year with $91.5 million in cash, which should be sufficient to fund its operations throughout fiscal 2014.

The bigger news, though, was the announcement from Synta and QuantumLeap Healthcare Collaborative that ganetespib has been selected for the investigator-sponsored I-SPY 2 breast cancer trial. This will be a midstage study of women with recently diagnosed but locally advanced breast cancer that investigates whether or not adding investigational drugs like ganetespib to traditional chemotherapy is better than standard chemotherapy alone. Initially, ganetespib will only be available to HER2-negative disease patients, but could be expanded to all biomarkers once its safety is demonstrated.

Now what: Today's move is almost entirely about the excitement of having its drug chosen for an investigator-sponsored trial, which could give ganetespib a chance to really shine. Ganetespib is being tested in a number of indications, including nonsmall cell lung cancer, ovarian cancer, AML, rectal cancer, multiple myeloma, and so on, so its success is vital to the success of Synta shareholders. While I can certainly see why shareholders would be excited following today's news, they should also understand that this pipeline still has a ways to go before I'd consider it "investable." Chances are, with the rate Synta has been burning cash, it will need more cash by the second-half of 2014 to fund its research in 2015 which could mean a dilutive share offering. For now, I'm perfectly happy monitoring ganetespib's progress from the sidelines. 

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.

The Motley Fool has no position in any companies mentioned in this article. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

©1995-2014 The Motley Fool. All rights reserved. | Privacy/Legal Information