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SNTA > SEC Filings for SNTA > Form 10-Q on 1-Aug-2013All Recent SEC Filings




Quarterly Report

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.

You should read this discussion together with the consolidated financial statements, related notes and other financial information included elsewhere in this Quarterly Report on Form 10-Q. The following discussion may contain predictions, estimates and other forward-looking statements that involve a number of risks and uncertainties, including those discussed under "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2012 filed with the Securities and Exchange Commission. These risks could cause our actual results to differ materially from any future performance suggested below.


Synta Pharmaceuticals Corp. is a biopharmaceutical company focused on discovering, developing, and commercializing small molecule drugs to extend and enhance the lives of patients with severe medical conditions, including cancer and chronic inflammatory diseases. We have two drug candidates in clinical trials for treating multiple types of cancer and several drug candidates in the preclinical stage of development. All of our drug candidates have been discovered and developed internally using our proprietary, unique chemical compound library and integrated discovery engine. We retain full ownership of all of our drug candidates.

We were incorporated in March 2000 and commenced operations in July 2001. Since that time, we have been principally engaged in the discovery and development of novel drug candidates. As of June 30, 2013, we have raised an aggregate of approximately $667.3 million in cash proceeds to fund operations, including $465.2 million in net proceeds from private and public offerings of our equity, $30.5 million in gross proceeds from term loans and $167.2 million in non-refundable payments from partnering activities under prior collaborations, as well as $4.4 million from the exercise of common stock warrants and options. We have also generated funds from government grants, equipment lease financings and investment income. We are engaged in preliminary partnership discussions for a number of our programs, which may provide us with additional financial resources if consummated.

We have devoted substantially all of our capital resources to the research and development of our drug candidates. Since our inception, we have had no revenues from product sales. As of June 30, 2013, we had an accumulated deficit of $504.7 million. We expect to incur significant operating losses for the foreseeable future as we advance our drug candidates from discovery through preclinical development and clinical trials, and seek regulatory approval and eventual commercialization. We will need to generate significant revenues from product sales to achieve future profitability and may never do so.

Oncology Programs

We have two clinical-stage programs and one preclinical-stage program in oncology:

Ganetespib (Hsp90 Inhibitor)


Ganetespib is a novel, small molecule inhibitor of Hsp90, a molecular chaperone which is required for the proper folding and activation of many cancer-promoting proteins. In preclinical cancer models, inhibition of Hsp90 by ganetespib leads to the simultaneous degradation of many of these proteins and the subsequent death or cell cycle arrest of cancer cells dependent on these proteins for growth. A number of Hsp90 client proteins are also involved in the resistance of cancer cells to other anti-cancer treatments, such as chemotherapy. The ability to reduce cancer-cell drug resistance suggests potential for combining ganetespib with chemotherapies or other anti-cancer agents. In preclinical studies, ganetespib has shown anti-cancer activity against a broad range of solid and hematologic cancers, both as a monotherapy and in combination with certain widely used anti-cancer agents.

Ganetespib has been studied or is currently being evaluated in over twenty clinical trials including our GALAXY-1 and GALAXY-2 trials evaluating ganetespib in combination with docetaxel chemotherapy for patients with second-line, advanced, non-small cell lung cancer (NSCLC) as well as our ENCHANT-1 clinical trial evaluating single-agent ganetespib in HER2+ and triple-negative breast cancer (TNBC). Over 800 patients have been treated with ganetespib to date across ongoing or completed clinical trials.

In these trials, ganetespib has shown activity both administered as monotherapy and in combination with chemotherapy:


In our early company-sponsored Phase 1 trials and investigator-sponsored Phase 2 trials with ganetespib monotherapy, objective responses or anti-tumor activity have been seen in patients with ALK+ NSCLC, mutant BRAF lung cancer, mutant KRAS NSCLC, mutant KRAS gastric cancer, HER2+ breast cancer, HER2+ gastric cancer, triple-negative breast cancer, renal cancer, colorectal cancer, and melanoma.

Many of these responses have been durable. One patient with ALK+ NSCLC and one patient with mutant KRAS gastric cancer have remained on ganetespib therapy for over two and a half years.

Our company-sponsored ENCHANT-1 trial was designed to evaluate ganetespib monotherapy in women with newly diagnosed locally advanced HER2+ breast cancer or TNBC. We recently announced that this trial achieved its prespecified criteria for advancing to the second stage of the trial. Of the initial five HER2+ patients enrolled, two achieved an objective tumor response. Of the initial ten TNBC patients enrolled, two achieved an objective tumor response. One of the responding TNBC patients, who was diagnosed with inoperable TNBC, achieved a complete clinical response following treatment with ganetespib. Her disease was restaged from inoperable to operable and she successfully completed a mastectomy with curative intent.

Combination: The GALAXY-1 trial completed enrollment of 252 adenocarcinoma patients in November 2012. An interim analysis planned for six months from the date of last patient enrollment was conducted in May 2013 and was presented at the American Society of Clinical Oncology (ASCO) meeting in June 2013. Results included:

An increase in median overall survival from 7.4 to 9.8 months was observed in patients treated with docetaxel (D) vs. ganetespib plus docetaxel (G+D), respectively. The Hazard ratio was 0.82 (1-sided p=0.082), corresponding to an 18% reduction in the risk of death. The Hazard ratio after adjustment for other variables in the study was 0.73 (1-sided p=0.041). Median progression-free survival, or PFS, in adenocarcinoma patients was improved from 3.2 months to 4.5 months, in the D vs. G+D arms, respectively.

Patients enrolled into the GALAXY-1 trial were prospectively stratified into "chemo-refractory" vs. "chemo-sensitive" populations, based on the rate of their disease progression during or following first-line treatment for advanced NSCLC (time since diagnosis of advanced disease less than vs. greater than six months). A statistical interaction test showed that one of the four prospectively-defined stratification factors was strongly predictive of ganetespib activity (p=0.006). Patients with "chemo-sensitive" disease (N=176; 70%) derived substantially greater benefit from ganetespib than patients with "chemo-refractory" disease (N=76; 30%).

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These results confirmed the decision made last year to focus the GALAXY-2 Phase 3 clinical trial on chemo-sensitive patients only, and are consistent with preclinical findings that a chemo-sensitizing agent may be most effective in chemo-sensitive patients.

In the chemo-sensitive population (N=176; 70% of the total GALAXY-1 population), defined as time since diagnosis of advanced disease greater than six months, median overall survival increased from 6.4 to 10.7 months in patients treated with D vs D+G. The Hazard ratio was 0.61 (1-sided p=0.009), corresponding to a 39% reduction in the risk of death. The Hazard ratio after adjustment for other variables in the study was 0.55 (1-sided p=0.004). Median PFS improved from 3.4 months to 5.4 months, in the D vs. G+D arms, respectively.

A favorable safety profile was observed with the ganetespib plus docetaxel combination in adenocarcinoma patients. Transient, mild-to-moderate diarrhea, generally manageable with over-the-counter medication, was the most common adverse event, consistent with observations from other clinical trials evaluating ganetespib. Other adverse events increased relative to control included mild to moderate anemia and fatigue, as well as an increase in the number of cases of febrile neutropenia.

An analysis of the time from randomization to the appearance of one or more new tumor lesions showed that the rate of new lesion formation decreased by 50% in patients treated with the ganetespib (Hazard ratio 0.50, 1-sided p=0.005). This observation is consistent with preclinical and clinical results suggesting ganetespib inhibits the biological pathways that drive angiogenesis (new blood vessel formation) and metastasis (the spread of tumors) in cancer cells. These findings are important because of the critical role of metastases in cancer patient mortality.

The results observed to date in our GALAXY program suggest significant potential use of ganetespib in combination with docetaxel as second-line treatment of NSCLC adenocarcinoma. Across the United States, United Kingdom, Germany, France, Spain, Italy, and Japan an estimated 160,000 new patients each year progress following first-line treatment for advanced NSCLC adenocarcinoma and receive subsequent treatment, which represents the patient population being addressed in our GALAXY program. In addition, over 500,000 patients receive taxanes each year (docetaxel or paclitaxel) across all cancer indications. The potential to combine ganetespib with taxanes with minimal additional toxicity and possible enhanced efficacy represents a promising opportunity, not only in lung cancer, but in breast, prostate, ovarian, gastric, bladder, and head and neck cancers, where taxanes are commonly used. In addition to the taxanes, ganetespib has shown in preclinical models ability to enhance the activity of a number of other standard care or investigational anti-cancer agents including chemotherapies (pemetrexed, gemcitabine, cytarabine, irinotecan, etoposide, doxorubicin, carboplatin, cisplatin, vincristine), targeted agents (VEGF inhibitor, EGFR inhibitor, HER2 inhibitor, PI3K/mTOR inhibitor, BRAF inhibitor, MEK inhibitor, proteasome inhibitor), hormonal therapy (tamoxifen, fulvestrant), and immunotherapy (PD-1 inhibitor). Combination trials with a number of these agents have recently been initiated or are in the planning phase.

Ganetespib Mechanism of Action and Preclinical Results

Hsp90 is required for the structural and functional maturation of numerous client proteins, many of which play critical roles in cell growth, differentiation and survival. Preclinical and clinical results have shown that ganetespib is a selective inhibitor of Hsp90, supporting the potential for treating a broad range of malignancies. Relative to their normal counterparts, cancer cells are more reliant on elevated levels of the active Hsp90 complex and as such, appear to be selectively sensitive to Hsp90 inhibitors, including ganetespib.

In contrast to therapies that target a single oncogene driver, such as ALK or HER2, inhibition of Hsp90 results in the simultaneous disruption of numerous oncogenic signaling pathways that are critical for tumor cell proliferation and survival. The biological effects of ganetespib can be divided into three categories:

Deactivate driver oncogenes. Certain genetically defined cancers, such as ALK+ lung cancer or HER2+ breast cancer, show a strong dependence on a single mutated or overexpressed Hsp90 client protein. Hsp90 inhibition, by leading to the destabilization of these client proteins, offers an approach to treating these cancers that is distinct from kinase inhibitors or antibodies, which bind to the oncogene driver directly. Strong Hsp90 clients that drive certain oncogene-addicted cancers include ALK, HER2, mutant BRAF and EGFR, androgen receptor (AR), estrogen receptor (ER), and JAK2.

Reduce tumor spread. In advanced stage disease, tumors develop properties that allow them to spread throughout the body. These include the activation of pathways that regulate new blood vessel formation (angiogenesis) and those that

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enable cancer cell separation from primary tumors and establishment of new tumor lesions (metastasis). Many Hsp90 client proteins play key roles in these processes. These include HIF-1alpha, VEGFR, PDFGR, and VEGF in angiogenesis; and MET, RAF, AKT, MMPs, HIF-1alpha, and IGF-1R in metastasis. In preclinical models, ganetespib has shown ability to inhibit these proteins and suppress these aggressive properties.

Enhance chemotherapy and targeted agents. Cancer cells often develop resistance to commonly used anti-cancer treatments such as chemotherapy, targeted agents, and radiation therapy. Many of the resistance mechanisms to chemotherapy or radiation therapy involve cell-cycle checkpoint, DNA repair, and anti-apoptosis pathways, which rely on Hsp90 client proteins including ATR, BCL2, BRCA1/2, CDK1/4, CHK1, survivin, and WEE1. Inhibition of these client proteins by ganetespib provides rationale to add ganetespib to chemotherapy or radiation treatment in order to reduce resistance and improve clinical activity. Recently identified resistance mechanisms to targeted agents such as VEGF inhibitors or mTOR inhibitors also rely on Hsp90 client proteins. In preclinical models of cancer, ganetespib has shown synergistic activity with chemotherapies including docetaxel, paclitaxel, pemetrexed, gemcitabine, cytarabine, irinotecan, etoposide, doxorubicin, carboplatin, cisplatin, and vincristine; with targeted agents including ALK inhibitors, HER2 inhibitors, mTOR inhibitors, BRAF inhibitors, MEK inhibitors, EGFR inhibitors, and proteasome inhibitors; and with radiation therapy

Ganetespib Clinical Trials

We are sponsoring four principal ongoing trials evaluating ganetespib activity and safety:

GALAXY-1: a 320-patient global, randomized Phase 2b/3 trial designed to evaluate ganetespib in combination with docetaxel versus docetaxel alone as second-line therapy in advanced NSCLC patients with adenocarcinoma histology.

GALAXY-2: a 500-patient, global, randomized, confirmatory Phase 3 clinical trial evaluating ganetespib plus docetaxel vs. docetaxel alone for the treatment of second-line advanced non-small cell lung adenocarcinoma as with GALAXY-1. Results from the GALAXY-1 trial were used to inform the design of GALAXY-2, enriching for those patients who showed enhanced clinical benefit from treatment with ganetespib.

ENCHANT-1: a Phase 2 trial evaluating ganetespib monotherapy in patients with newly diagnosed locally advanced or metastatic HER2 positive or triple-negative metastatic breast cancer.

CHIARA: a Phase 2 trial evaluating ganetespib monotherapy in NSCLC patients whose tumors have a genetic profile characterized by rearrangement of the ALK gene (ALK+).

Ganetespib in lung cancer: The GALAXY program

GALAXY-1: In 2011 we initiated the GALAXY-1 trial in patients with advanced NSCLC who received one prior treatment for advanced disease, i.e., a second-line treatment setting. GALAXY-1 compares treatment with docetaxel alone, which is approved for second-line treatment, vs. treatment with ganetespib plus docetaxel. The aims of this study were to evaluate clinical benefit and establish the safety profile of ganetespib in combination with docetaxel relative to docetaxel alone; identify the patient populations, by biomarker or other disease characteristics, which may be most responsive to combination treatment; and build the clinical and operational experience needed to optimize the design and execution of the pivotal GALAXY-2 Phase 3 trial.

Patients in both arms of GALAXY-1 receive a standard regimen of docetaxel 75 mg/m2 on day 1 of a 21-day treatment cycle. Patients in the combination arm also receive ganetespib 150 mg/m2 on days 1 and 15. Treatment continues until disease progression or until patients become intolerant. To ensure balance of prognostic factors between the two arms, patients are stratified by ECOG performance status, lactate dehydrogenase (LDH) levels, smoking status, and time since diagnosis of metastatic disease.

Rate of disease progression during or following first line chemotherapy is a common stratification factor in salvage-setting (after first-line treatment) lung cancer clinical trials to ensure balance and evaluate any difference in treatment benefit between "chemo-refractory" and "chemo-sensitive" patients. Commonly used measures include time since completion of first line chemotherapy, best response to first line therapy, time since initiation of first line therapy, as well as time since diagnosis of advanced disease. The latter was chosen for GALAXY-1 in order to reduce ambiguity introduced by the recent approvals of maintenance therapy following first line treatment, as well as to avoid possible subjectivity in assessment of tumor response in the first-line setting.

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GALAXY-1 was originally designed to enroll 240 second-line advanced NSCLC patients in order to evaluate several pre-specified hypotheses on which patients might be most responsive to combination treatment. Co-primary endpoints were PFS in all patients (the ITT population) and overall survival in patients with elevated baseline level of serum LDH. Several months after trial initiation, but before any substantial patient enrollment, the trial was amended to elevate improvement in PFS in patients with mutant KRAS (the mKRAS population) from a secondary endpoint to a co-primary endpoint, based on clinical results observed in a separate ganetespib trial around that time. Both LDH and mutant KRAS were pre-specified for evaluation from blood and tumor tissue, respectively, by an independent central laboratory.

GALAXY-1 was also originally designed to enroll patients with all histologies-including adenocarcinoma, squamous cell carcinoma, large cell carcinoma and other histologies. In early 2012, enrollment of patients with non-adenocarcinoma histologies (which consists primarily of squamous cell carcinomas) was terminated based on possible safety concerns, including risk of bleeding; a trend towards inferior survival; and the consistency of the emerging ganetespib profile with known anti-angiogenic agents, for which patients with squamous cell carcinoma histology are commonly excluded from clinical trials or labeled indications. The trial was amended at that time to enroll 240 patients with adenocarcinoma histology only.

The current co-primary endpoints of GALAXY-1 are PFS in adenocarcinoma patients with elevated LDH and PFS in patients with mutant KRAS. Key secondary endpoints to be evaluated by the statistical gatekeeping methodology include OS and PFS in the all-adenocarcinoma population. GALAXY-1 is 90% powered to detect a PFS improvement from 6 to 12 weeks in patients with elevated LDH and from 5 weeks to 10 weeks in patients with mutant KRAS. For all adenocarcinoma patients, GALAXY-1 is 88% powered to detect an improvement in PFS from 3 to 4.5 months, and 73% powered to detect an improvement in overall survival from 6 to 8.5 months. All powering assumptions are based on a 1-sided alpha of 0.05.

Enrollment of the primary adenocarcinoma patient population completed in November 2012 (primary enrollment stage, N=252). Enrollment of patients in two pre-specified subpopulations continued in order to achieve the protocol-specified cumulative total of 80 mutant KRAS and 120 elevated LDH patients (biomarker extension stage, N=70).

At the ASCO conference in June 2013 we reported results from the interim analysis specified for 6 months from the date of last patient enrolled, which was conducted on May 15, 2013. Results for all adenocarcinoma patients (the Intent-To-Treat, or ITT analysis) as well as results for the patient population selected for evaluation in the GALAXY-2 Phase 3 trial (the chemo-sensitive population) were presented, and are described in the table below.

Overall survival, GALAXY-1 all adenocarcinoma and chemo-sensitive populations

May 15 2013 interim analysis (6 months from last patient enrolled)

                                 All adenocarcinoma population          Chemo-sensitive population
                                         (ITT, N=252)                  (Diagnosis > 6 months, N=176)
                                     D                  G+D               D                  G+D
                                   n=127               n=125             n=89                n=87
Overall survival
Median (months), (90% C.I.)   7.4 (5.8, 10.0)     9.8 (7.9, 12.6)   6.4 (5.7, 9.8)     10.7 (8.0, 13.3)
Unadjusted HR (90% C.I.)          0.82 (0.62, 1.09), p=0.082            0.61 (0.43, 0.87), p=0.009
Adjusted HR (90% C.I.)            0.73 (0.55, 0.98), p=0.041            0.55 (0.38, 0.79), p=0.004
Progression-free survival
Median (months), (90% C.I.)   3.2 (2.7, 4.2)      4.5 (4.1, 5.6)    3.4 (2.7, 4.2)      5.4 (4.2, 5.9)
Unadjusted HR (90% C.I.)          0.84 (0.65, 1.07), p=0.038            0.61 (0.45, 0.83), p=0.004
Adjusted HR (90% C.I.)            0.83 (0.64, 1.06), p=0.108            0.62 (0.45, 0.86), p=0.007

HR: Hazard ratio; C.I.: confidence interval; Unadjusted HR: Cox proportional hazards model estimate of Hazard ratio with no adjustment for other variables; Adjusted HR: Cox proportional hazards model estimate of Hazard ratio after adjustment for prespecified prognostic variables. All p-values in this table are 1-sided.

At the time of analysis, 134 (53%) deaths had occurred in the ITT population, and 92 (52%) had occurred in the chemo-sensitive population.

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The overall response rate per RECIST 1.1 was 13% vs. 19% in the ITT population and 15% vs. 20% in the chemo-sensitive population for D vs. G+D, respectively. The confirmed response rate was 9%vs. 14% in the ITT population and 9% vs. 15% in the chemo-sensitive population for D vs. G+D, respectively.

These results show improved clinical activity, including overall survival, in patients treated with the combination of ganetespib and docetaxel as compared to docetaxel alone, and support the choice of the chemo-sensitive population for further evaluation in the ongoing GALAXY-2 trial.


The safety profile of patients treated with the combination of ganetespib and docetaxel was generally similar to that of docetaxel alone, and consistent with previously reported results for ganetespib. The most common adverse events (AEs), all grades, were neutropenia (43% vs. 42%), diarrhea (16% vs. 48%) and fatigue (24% vs. 34%), for D (N=125) vs. G+D (N=123), respectively. Diarrhea was effectively managed with supportive care; the incidence of grade 3 or 4 diarrhea was 0 (D) vs. 3% (G+D). Fatigue was predominantly grade 1 and grade 2; grade 3 or 4 fatigue was 3% (D) vs. 6% (G+D). The most common grade 3 or 4 AEs were neutropenia (38% vs. 37%), febrile neutropenia (2% vs. 11%), and anemia (2% vs. 8%). The proportions of patients with AEs leading to death were 11% vs. 12%, and AEs leading to treatment discontinuation were 5% vs. 7% for D vs. G+D, respectively.

Consistent with prior findings with ganetespib, reports of visual impairment in this study were infrequent: 0 in the D arm and 2 (2%) in the G+D arm. Both cases of visual impairment were transient and grade 1 or 2. A high incidence of visual impairment has been reported following treatment with certain other Hsp90 inhibitors.

Based on our current event rate projections, we expect the final analysis of the GALAXY-1 trial to be conducted in the fourth quarter of 2013.

Robustness tests of the overall survival advantage

In order to test the robustness of the GALAXY-1 survival results, a number of sensitivity analyses were performed by ourselves and by an external, independent data review committee consisting of four lung cancer physicians and an independent biostatistician.

Standard data consistency evaluations found that the patient population was typical of large, randomized salvage-setting NSCLC trials; that the primary and key secondary endpoints showed a consistent pattern of improvement; and that post-study treatment was balanced between the two arms and therefore unlikely to contribute to the observed survival difference.

Statistical analyses further increased confidence in the finding of a substantial survival advantage in favor of the ganetespib arm. First, the stratified log-rank p<0.01 indicates a low likelihood of a chance finding. Second, the preplanned analysis to estimate the treatment effect after adjusting for other variables in the trial (the multi-variate Cox proportional hazards model) showed that imbalances in these other variables are highly unlikely to explain the observed survival advantage. The prognostic variables used in the Cox multi-variate regression model were prespecified: gender, smoking status, LDH, ECOG performance status, interval since diagnosis advanced disease, age, total baseline target lesion size, and geographic region. Addition of other variables did not substantially change the results. In all instances, the Cox multi-variate analysis indicated a greater benefit from ganetespib treatment after adjusting for other variables as compared to the unadjusted (univariate) estimate. These analyses support the conclusion that imbalances in prognostic variables are unlikely to explain the observed survival advantage in favor of ganetespib.

Choice of GALAXY-2 Phase 3 patient population

A key objective of the GALAXY-1 trial was to select the patient population for the GALAXY-2 Phase 3 trial. Results presented at the September 2012 ESMO meeting and confirmed by the results presented at the June 2013 ASCO meeting, show a substantial difference in PFS and OS advantage from ganetespib treatment between the prespecified populations of "chemo-sensitive" patients (Diagnosis > 6 months) and "chemo-refractory" patients (Diagnosis < 6 months), representing 70% and 30%, respectively, of all adenocarcinoma patients in the trial.

These results are consistent with preclinical observations that a chemo-sensitizing agent may be most effective in chemo-sensitive patients. The GALAXY-1 findings are also consistent with results from clinical trials in this setting with other agents, such as the registration trial for docetaxel, which showed that approximately 30% of the salvage-setting NSCLC patient population did not benefit from chemotherapy as compared to no treatment (best supportive care).

A treatment interaction statistical test was used to evaluate whether or not the finding of a difference in treatment outcome between two groups could be due to chance. In the GALAXY-1 trial, the treatment interaction statistical test confirmed that the difference in treatment outcome between the chemo-sensitive and chemo-refractory groups is highly unlikely to be due to chance: 2-sided p=0.006.

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Recurrence-free intervals have been commonly used in oncology pivotal trials, particularly in breast cancer, ovarian cancer, and hematologic malignancies. For example, Doxil is indicated for the treatment of "platinum-refractory" . . .

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