Synta Is Heating Up

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 |  Includes: BIIB, BMY, CRIS, EXEL, INFI, NVS, SNTA
by: Ohad Hammer

Synta (NASDAQ:SNTA) is recuperating nicely from last year’s meltdown following the failure of its melanoma drug, elesclomol. The company is gaining momentum thanks to its early stage Hsp90 (heat shock protein 90) inhibitor, STA-9090. STA-9090 seems to garner a lot of attention in the medical community following the presentation of encouraging phase I data at ASCO last June. Based on the preliminary results, STA-9090 could be what the industry has been waiting for: An broad and potent Hsp90 with an acceptable safety profile.

Hsp90 is considered a promising target due to its ability to fold and stabilize many cancer related proteins. Cancer cells are often driven by mutated proteins or production of large amounts of normal proteins, both require the chaperone functions of Hsp90. Healthy cells are considered less in need of Hsp90, as they do not contain the amount of misfolded proteins. Because Hsp90 is required for the proper function of so many oncogenes, inhibiting its function should have a broad systemic effect on cancer cells, which usually rely on more than one pathway.

The sentiment towards Hsp90 is mixed, due to multiple setbacks and terminations that occurred with first generation Hsp90 inhibitors. These inhibitors, primarily BMS’ (BMY) tanespimycin (originally developed by Kosan) and Infinity’s (INFI) IPI-504 are derived from a natural antibiotic and demonstrated certain degree of activity in humans. Nevertheless, they were also associated with side effects, including liver, visual and cardio-toxicity which severely hampered their development programs.

A new generation of Hsp90 inhibitors are now in clinical testing in the hands of Biogen Idec (BIIB), Synta, Debiopharm [licensed from Curis (CRIS)], Novartis (NVS) and Exelixis (NASDAQ:EXEL). These agents are believed to be more potent as well as safer compared with the first generation agents. Nevertheless, it is still unclear to what extent the side effects seen with the first generation inhibitors are related to the inhibition of Hsp90 or to “off target” biologic activities. Due to past experience, the safety profile of these drugs will be crucial in their positioning and clinical programs.

Taking the lead

At ASCO 2010, Synta reported data from two phase I trials for STA-9090 given weekly or twice weekly. The data set was not stellar but it included anecdotal signs of efficacy including 2 objective responses as well as several cases of tumor shrinkage and prolonged disease control across multiple tumor types. Some of the activity was seen in patients with aggressive tumors who were resistant to multiple treatment lines. Given the fact that these studies were dose escalation trials (i.e, the majority of patients received suboptimal doses) and the fact that the studies included unselected patients, Synta certainly passed the efficacy hurdle.

With respect to safety, it is still too early to tell, as again, most patients were not given the maximal dose. The drug is in several phase II trials which should shed more light and according to the company’s CEO at a recent investor conference, the safety profile looks good based on the ongoing phase II studies. Synta’s aggressiveness in developing STA-9090 is quite unusual given its size: The drug is currently in 8 clinical trials and the number is expected to grow to 15 by yearend. For the sake of comparison, Novartis also has its lead Hsp90 inhibitor in 8 clinical trials and Biogen is recruiting patients in two phase II studies.

Based on available data for other Hsp90 drugs, Synta seems to be the leader in the Hsp90 arena, with a clear efficacy signal as well as a good safety profile. Novartis, which has two Hsp90 inhibitors in development also published data for its Hsp90 inhibitor at ASCO. Based on the abstract its drug looks less active and more toxic than STA-9090, although comparing drugs from two different trials should be done with caution. STA-9090’s data set also looks more promising than the Biogen compound, based on its phase I data from 2008.

Potential issues

One potential issue with STA-9090 is the fact it is given intravenously, in contrast to other Hsp90 inhibitors such as Biogen’s BIIB021 and Exelixis’ XL888. On top of the obvious patient convenience issue, it could be more challenging to find the ideal dose and regimen that provide maximal effect with minimal toxicities using an injectable drug.

Hsp90 inhibitors are small molecules, which typically get cleared out of the body within hours. The ability to give oral drugs frequently provides a great deal of flexibility with respect to the regimen, whereas with injectable drugs it is harder to get the desired exposure. For example, patients who receive STA-9090 once a week retain the drug in the bloodstream for an hour or two. If the drug were orally bioavailable, it could have been given more frequently and reach more prolonged exposure. Importantly, there are also advantages in IV administration (lack of gastrointestinal toxicity) and in some cases short exposure to the drug is the regimen of choice, but the fact is that when given a choice most drug companies choose oral over IV administration of small molecules.

It is believed that the potential of Hsp90 inhibitors lies within the ability to combine them with drugs that hit “clients” of Hsp90. These include many of the targeted agents on the market such as Herceptin and Tarceva. Companies always strive to incorporate new drugs into standard of care regimens but to date, Synta’s STA-9090 has not been given with other drugs, as opposed to other Hsp90 inhibitors that are currently in combination studies. One obvious combination partner would be Velcade in multiple myeloma given the theoretical synergy between the two drugs as well as encouraging clinical data with the old Hsp90 inhibitors. Even if Synta commences a combination trial shortly, investors will have to wait for at least one year to get an initial sense of STA-9090’s safety profile.

Future results

Having so many active clinical trials translates into a constant flow of clinical data in the coming year. Synta expects to report data from three phase II trials in AML, GIST and lung cancer in the coming months and investors should be encouraged by the company’s upbeat tone regarding the trials.

The most important read out is from the phase II trial in lung cancer, which is an obvious indication given past experience with first generation Hsp90 inhibitors and the common use of Tarceva and Avastin. The company already announced that the trial met a predefined endpoint in terms of efficacy. However, the benefit with STA-9090 is still opaque since the company did not provide more details. The predefined endpoint was the proportion of patients without disease progression which is a tricky endpoint especially in single arm trials, as all patients who experience tumor growth of less than 30% are classified as having stable diseases. On the other hand, the press release does include the term “tumor shrinkage” so there is probably some sort of activity.

In summary, Synta is shaping up to be a nice comeback story, with a promising, potentially differentiated wholly owned asset. Synta is still carrying the burden of proving the market that its product is really safe and combinable with other agents. By year end, Synta could have enough data to position STA-9090 as the first active and “safe” Hsp90 inhibitor. The company ended the first quarter with $58M, which should be enough for two years of operations, according to the company. With a G&A run rate of ~$12M per year, it is hard to envision Synta financing a clinical program of over 10 phase II independently. Therefore, next year the company will have to either partner the drug or raise large amounts of cash to support a late stage development program.

Portfolio holdings as of August 8th, 2010

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