Please ensure Javascript is enabled for purposes of website accessibility

Here's Why Syros Pharmaceuticals Got Crushed Today

By Maxx Chatsko - Dec 11, 2017 at 1:12PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The small-cap biopharma company announced disappointing results for its lead drug candidate.

What happened

Shares of Syros Pharmaceuticals (SYRS 0.36%) dropped by as much as 49.1% Monday after the company provided a clinical update on its lead drug candidate. Investors probably couldn't tell by the press release, which had a rosy takeaway on the news, but just one of 48 evaluable patients taking SY-1425 as a potential stand-alone treatment for acute myeloid leukemia (AML) and myelodysplastic syndrome (MDS) had a complete response. 

The phase 2 trial for the two bone marrow diseases remains ongoing, but the company will instead focus on the potential for SY-1425 to be used in a combination therapy with both azacitidine, a standard chemotherapy drug, and Darzalex from Johnson & Johnson. As of 12:42 p.m EST, the stock had settled to a 29.8% loss. 

A man standing on and looking down a line chart showing steep losses.

Image source: Getty Images.

So what

Despite the gloomy outcome for the lead drug candidate as a stand-alone therapeutic agent, Syros Pharmaceuticals reported a broad range of data it claims show SY-1425 could hold promise in a combination therapy. That's because the drug has previously been shown to selectively control expression of genes associated with the bone marrow diseases.

The new data show the drug increased expression of CD38, an important protein located on the surface of immune cells that plays a critical function in overall immune system function. So, the thinking goes, perhaps it will be better to deploy SY-1425 as part of a one-two oncology punch.

Of course, as today's share price movement indicates, Wall Street is coming to grips with the reality that a combination therapy may be the only way for the tiny biopharma to find a market for its oral first-in-class drug. Given that data on that front don't yet exist -- and won't be available until sometime in 2018 at the earliest -- investors aren't sticking around to find out.

Now what

Syros Pharmaceuticals is touting that its novel gene expression platform could pave the way for a new group of effective therapies for a range of metabolic diseases and cancers. On paper, that may still be possible, but the company appears to be shifting its approach for both of its named pipeline programs to combination therapies. That could limit the potential of the platform going forward, and no doubt constrains the range of possible outcomes for investors.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Syros Pharmaceuticals, Inc. Stock Quote
Syros Pharmaceuticals, Inc.
SYRS
$0.96 (0.36%) $0.00
Johnson & Johnson Stock Quote
Johnson & Johnson
JNJ
$177.51 (0.29%) $0.52

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
317%
 
S&P 500 Returns
112%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 06/30/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.