Synta's Surprise

A small molecule for autoimmune diseases? No one expected that.
Sep 01, 2004

CEO Safi Bahcall founded Synta after working as a consultant in pharma mergers and investments.
Rheumatoid arthritis, psoriasis, multiple sclerosis, and Crohn's disease used to be considered individual niche markets with limited sales potential. Not anymore. Both the understanding of autoimmune disorders (and the inflammation that causes them) and the number of patients have grown dramatically in the past few years, creating a huge, broad-based market in which a single drug can become a blockbuster.

The therapeutic category has become so important that analysts say Amgen's 2003 acquisition of Immunex (at $10.3 billion) was for the sole purpose of gaining Enbrel (etanercept), which recently added psoriasis to its rheumatoid arthritis indication. Enbrel and its competitors—Abbott's Humira (adalim-umab) and Johnson & Johnson's Remicade (infliximab)—are expected to generate more than $4 billion this year. But they are both TNF (tumor necrosis factor) alpha drugs, which means they are large-molecule antibodies (proteins) that require injection.

For the millions of people who suffer from autoimmune diseases (10 million in the United States alone), daily or weekly injections—for life—are a serious drawback. Those patients are all waiting for someone to develop a small-molecule oral version that they can take with their vitamins in the morning. The wait may soon be over.

The company poised to bring that drug to market is Synta Pharmaceuticals, based in Lexington, Massachusetts. Although it was recently named one of the industry newsletter Fierce Biotech's "Fierce 15," the company is not really a biotech. As noted, its lead candidate is a small-molecule interleukin-12 (IL-12) inhibitor, which short-circuits inflammation. The company is not exactly a startup either. Most of Synta's top scientists have been working together for a decade. They were originally part of Fuji Immuno-Pharmaceuticals (FIP), a Lexington-based drug discovery unit of Fuji Photo, which formed as a joint venture with Lan Bo Chen, a Harvard professor of cell biology.

Chief Medical Officer Matthew Sherman joined Synta earlier this year. He brings expertise in both the IL-12 gene and anti-cancer compounds.
In 1997, Fuji sold most of FIP—its library of compounds and its small-molecule discovery team—to the Japanese pharma Shionogi, which combined them into a new drug discovery subsidiary called Shionogi Bio-Research. (The rest of the operation went to Merck KGaA.) Then in 2002, the unit spun off from Shionogi and merged with Synta, a local two-year-old startup founded by Safi Bahcall.

Light and SwiftBahcall's journey to pharma CEO is as quirky as his R&D team's history. He started out in academia, studying at Harvard, Berkeley, and Stanford, where he earned a PhD in theoretical physics. "Eventually, the learning curve flattened," he recalls. "I was looking for a new challenge, and I got very curious about the business world. So I took a job in management consulting with McKinsey & Company in New York. I worked both with pharmaceutical companies and with investment banks on strategic, operational, and organizational issues. It was a great training ground, and a great way to learn at close range from the successes—and the mistakes—of very experienced business leaders."

In 2001, Bahcall combined his interests to found a drug discovery company based on novel ion-channel research, technology in-licensed from Harvard's Dana-Farber Cancer Institute. Soon after, he got to know the scientists at Shionogi Bio-Research (and the projects they were working on) through his connections in the Boston academic community, then put together a financing package and led them into a merger.

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