"We put together a nontraditional group of institutional and individual investors, primarily experienced buy-out investors
based out of New York, that were willing to purchase the business from Shionogi," Bahcall says. "A total of over $180 million
has gone into the company, and $128 million came from the New York investor group." Bahcall believes it may be the largest
equity financing for a private US biotech company in the past three years.
Stop the Cascade
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The faith for that investment may have been based on the experience and success of Synta's R&D team. Two drugs they discovered
and developed (before the Synta merger) are now in late-stage clinical trials for an HIV indication, one licensed to Pfizer,
and one still with Merck KGaA.
Bahcall says the company's high skill-small size character is what gives it an edge: "We're a fully independent pharmaceutical
business. I think the closest analogy would be to take a core piece of Merck or Pfizer's R&D group, put them in a building,
free them of bureaucracy, and give them strong incentives to discover great new drugs. It's basically a similar chemistry-driven
discovery operation, but with the advantage that we can move faster and are able to take the kinds of risks—and attract the
high-quality entrepreneurial talent—that is an essential part of making breakthrough discoveries in medicine."
Clear PathSince the merger, the R&D team has moved quickly on its most promising compound, the IL-12 inhibitor, also known as STA-5326.
As R&D progresses, the team is in the fortunate position of having the trail cleared by other companies that are developing
large-molecule drugs for the same target. Abbott Labs and Johnson & Johnson both recently announced positive data for the
monoclonal antibodies they have in development to inhibit IL-12.
"Two Big Pharmas have just done much of the hard work and heavy lifting of telling us which diseases, which patients, and
what trials will work," Bahcall says. "It puts us in a very unusual historical position: two Big Pharmas paving the way with
proteins, while a small biotech fast-follows with a pill. That's the opposite of how the biotech industry developed."
In this case, being third to market—assuming all three products get approved—will not likely be a barrier to gaining market
share, given the advantages of a pill over an injection. Finding doctors and patients for clinical trials is also not a problem.
Bahcall describes a typical interaction: "We call up physicians and say, 'We have a cytokine inhibitor. We are interested
in adding your site or your center to our clinical trial program.' They say, 'That's interesting, but I have four or five
other protocols of injectable drugs for my patients.' Then we say, 'It's a pill.' They say, 'Sign me up.'"
The pharma industry is also starting to take note. "We've been cold-called quite often," says Bahcall. "People see on our
website or hear at a conference that we have an oral IL-12 inhibitor, and they are very intrigued. So we have quite a few
pharmaceutical companies that are waiting for us to tell them what the next step is."
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