Synta Pharmaceuticals (Nasdaq: SNTA) has been climbing back from one of the Boston area's highest-profile clinical trial failures of 2009. And a big part of the Lexington, MA-based company's recovery has been to learn from the failure and advance other drug candidates in its pipeline.

After Synta halted its pivotal trial of the drug elesclomol for patients with a deadly form of skin cancer in February 2009, the firm saw its common stock value fall more than 80 percent in a day. The company cut 41 percent of its staff, and then lost the London drug giant GlaxoSmithKline (NYSE: GSK) as its partner in commercializing the cancer drug last June. However, there were several reasons during that time to think the firm still had good prospects, Safi Bahcall, Synta's chief executive, says.

The company still had a couple years worth of cash in the bank, more drugs in its pipeline, and an understanding that many biotechs hit bumps along the road to success. The company is now holding onto the promise of its mid-stage cancer drug, STA-9090, which Bahcall says has supplanted elesclomol as the top drug candidate in the firm's pipeline. Plus, he's aware of at least a few other biotech companies such as Seattle-based Dendreon (Nasdaq: DNDN) that have brought drugs to market after setbacks on par with the one Synta suffered last year.

"If you look at essentially every good company, and essentially every good drug, they all had a setback," Bahcall says. To make his point, he cites Dendreon, which got FDA approval for its immune booster drug for prostate cancer in April after 18 years in business.

Synta hasn't lost hope for elesclomol. The company stopped its late-stage trial of the drug last year because there were more deaths among patients who where being treated with the drug in combination with traditional chemotherapy than those were taking chemotherapy alone. Further inspection of the data, however, showed that there is a common biological trait among those patients in which the drug isn't effective. And the FDA in March gave the company the green light to test the drug in a study that excludes those who express the trait. The firm has received early data that the drug could be useful in treating acute myeloid leukemia, and it plans to launch at least one mid-stage study for the drug by the end of this year, Bahcall says.

Still, Synta's primary focus is now the drug it has dubbed STA-9090. The compound is supposed to block a protein (called heat shock protein 90) that is believed to help cancers grow blood vessels, spread throughout the body, and preserve mutated proteins that help tumors thrive. The company is now testing the drug in mid-stage clinical trials as a treatment for tumors of the lungs, gut, and colon/rectum (or what is known as colorectal cancer). While earlier drugs that worked like Synta's drug turned out to cause liver damage and other side effects, Bahcall said, his firm's drug has shown in early clinical trials to be less toxic than those treatments.

There's no shortage of competition in developing cancer drugs against the same protein. A few other companies in the hunt are Cambridge, MA-based Infinity Pharmaceuticals, the Swiss drug giant Novartis, and Myriad Pharmaceuticals, of Salt Lake City.

Synta, which has about 130 employees, is going to need a lot more resources than it has today to get one of its drugs to market. The company hasn't formed a partnership with a major pharmaceutical company since it inked a deal with the Swiss drug giant Roche in December 2008 to collaborate on an early-stage program that could yield anti-inflammatory drugs. And without Glaxo, Synta faces the challenge of funding additional elesclomol studies itself. Yet Bahcall says that his firm (which finished the first quarter with $57.9 million in cash or cash equivalents) has sufficient capital to operate through 2012. Also, the company could bring in more cash if it finds corporate partners for assets like STA-9090 and elesclomol, the CEO says.

To hear Bahcall, Synta has moved well beyond its elesclomol meltdown of 2009.

"To many of us in the company, it seems like ages ago, a different era," Bahcall says. "We're in the middle of five Phase II trials. We have a well-tolerated, active drug [in STA-9090], and the competitive landscape has shown that [similar protein] inhibitors have very serious problems, whereas our drug has shown activity and a safety profile that have put us ahead of the pack."

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Ryan McBride is Xconomy's correspondent. You can reach him at [email protected], or follow him on Twitter at http://twitter.com/Ryan_McBride.