Synta Reports Third Quarter 2015 Financial Results

Announces Reduction in Force, Appointment of Scott Morenstein to Board of Directors

Synta Pharmaceuticals Corp. (NASDAQ: SNTA) today reported financial results for the third quarter ended September 30, 2015 and provided an update on its business strategy.

To align its resources with the Company’s operational needs going forward, Synta announced today that it is reducing its workforce by approximately 60% to 33 full time employees. The Company estimates annual savings of at least $8 million in compensation-related costs as a result of the restructuring. Cash payments in connection with the workforce reduction, comprised principally of severance, unused vacation payments, benefits continuation costs and outplacement services, will range from $2.5 million to $2.6 million. The Company expects the restructuring to be substantially completed, and the majority of the related cash payments to be paid, during the fourth quarter of 2015.

The Company also announced today the appointment of Scott Morenstein to its Board of Directors. Mr. Morenstein is a Managing Director at CAM Capital, a private investment company established by Bruce Kovner, a Director of Synta Pharmaceuticals, focused on investment, trading and business activities. Prior to joining CAM Capital, Mr. Morenstein was a Managing Director of Valence Life Sciences and Caxton Advantage Venture Partners, venture capital firms focused on late-stage investing in private and small cap public drug development companies. He was previously a healthcare investment banker and research analyst at Lehman Brothers and Seaview Securities. Mr. Morenstein received a B.A. from the University of Pennsylvania and an M.B.A. from Harvard Business School.

“We continue to evaluate our strategic options following the outcome of our Phase 3 GALAXY-2 trial of ganetespib in lung cancer,” said Chen Schor, President and Chief Executive Officer of Synta. “The difficult, but necessary decision to reduce our workforce is an important part of extending our cash runway as we evaluate these options, and we thank the many talented employees that will be leaving the Company for their service. We plan to continue to support key ongoing investigator-sponsored studies while we determine the appropriate path forward for ganetespib. We also look forward to continuing to develop our HDC pipeline.”

Third Quarter 2015 Financial Results

There were no revenues recognized in the third quarters of 2015 and 2014.

Research and development expenses were $14.4 million for the third quarter in 2015, compared to $16.2 million for the same period in 2014. General and administrative expenses were $3.0 million for the third quarter in 2015, compared to $3.2 million for the same period in 2014. The Company anticipates that costs under its ganetespib program will decrease significantly in 2016 following the termination of the GALAXY-2 trial and the subsequent restructuring in the fourth quarter of 2015.

The Company reported a net loss of $17.6 million, or $0.13 per basic and diluted share, in the third quarter of 2015, compared to a net loss of $20.0 million, or $0.19 per basic and diluted share, for the same period in 2014.

As of September 30, 2015, the Company had $88.3 million in cash, cash equivalents and marketable securities, compared to $97.7 million in cash, cash equivalents and marketable securities as of December 31, 2014.

More detailed financial information and analysis may be found in the Company's Quarterly Report on Form 10-Q, which was filed with the Securities and Exchange Commission (SEC) on November 5, 2015.

Guidance

The Company expects its cash resources of approximately $88.3 million as of September 30, 2015, along with lower operating expenses following the termination of the GALAXY-2 trial and the subsequent restructuring in the fourth quarter of 2015, will be sufficient to fund operations at least through the first half of 2017. This estimate assumes no additional funding from new partnership agreements, equity financings or further sales under the Company’s ATM facility. The timing and nature of certain activities contemplated for the remainder of 2015 and 2016 will be conducted subject to the availability of sufficient financial resources.

About Synta Pharmaceuticals

Synta Pharmaceuticals Corp. is an innovative, agile biopharmaceutical company focused on research, development and commercialization of novel oncology medicines that have the potential to change the lives of cancer patients. Synta’s oncology drug candidate, ganetespib, a novel heat shock protein 90 (Hsp90) inhibitor, is currently being evaluated in several investigator sponsored clinical trials including clinical trials in acute myeloid leukemia (AML), ovarian cancer, breast cancer, and other tumor types. Building on its extensive expertise in the science of Hsp90, Synta also has a novel proprietary Hsp90 inhibitor Drug Conjugate (HDC) small molecule drug development program. IND enabling studies have commenced for the lead candidate from the HDC program, STA-12-8666, and preclinical evaluation of additional HDC candidates is ongoing. For more information, please visit www.syntapharma.com.

Safe Harbor Statement

This media release may contain forward-looking statements about Synta Pharmaceuticals Corp. Such forward-looking statements can be identified by the use of forward-looking terminology such as "will", "would", "should", "expects", "anticipates", "intends", "plans", "believes", "may", "estimates", "predicts", "projects", or similar expressions intended to identify forward-looking statements. Such statements, including statements relating to the estimated savings the Company will receive as a result of the reduction in force and the expectation that Synta’s existing cash resources will be sufficient to fund operations at least through the first half of 2017, reflect Synta’s current views with respect to future events and are based on assumptions and subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such forward-looking statements, including those described in "Risk Factors" of our Form 10-K for the year ended December 31, 2014 as filed with the Securities and Exchange Commission. Synta undertakes no obligation to publicly update forward-looking statements, whether because of new information, future events or otherwise, except as required by law.

Synta Pharmaceuticals Corp.Condensed Consolidated Statements of Operations(in thousands, except share and per share amounts)(unaudited)

Three Months Ended

September 30,

Nine Months Ended

September 30,

2015

2014

2015

2014

        
      
      
        
          Revenues:
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          

Total revenues

        
        
        
        
          $
        
        
          —
        
        
        
        
        
        
          $
        
        
          —
        
        
        
        
        
        
          $
        
        
          —
        
        
        
        
        
        
          $
        
        
          —
        
        
        
      
      
        
          

Operating expenses:

        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          Research and development
        
        
        
        
        
        
          14,413
        
        
        
        
        
        
        
        
          16,208
        
        
        
        
        
        
        
        
          46,972
        
        
        
        
        
        
        
        
          52,552
        
        
        
      
      
        
          General and administrative
        
        
        
        
           
        
        
          2,981
        
        
           
        
        
        
        
           
        
        
          3,241
        
        
           
        
        
        
        
           
        
        
          10,258
        
        
           
        
        
        
        
           
        
        
          11,505
        
        
           
        
      
      
        
          Total operating expenses
        
        
        
        
           
        
        
          17,394
        
        
           
        
        
        
        
           
        
        
          19,449
        
        
           
        
        
        
        
           
        
        
          57,230
        
        
           
        
        
        
        
           
        
        
          64,057
        
        
           
        
      
      
        
          Loss from operations
        
        
        
        
        
        
          (17,394
        
        
          )
        
        
        
        
        
        
          (19,449
        
        
          )
        
        
        
        
        
        
          (57,230
        
        
          )
        
        
        
        
        
        
          (64,057
        
        
          )
        
      
      
        
          Interest expense, net
        
        
        
        
           
        
        
          (234
        
        
          )
        
        
        
        
           
        
        
          (517
        
        
          )
        
        
        
        
           
        
        
          (905
        
        
          )
        
        
        
        
           
        
        
          (1,752
        
        
          )
        
      
      
        
          Net loss
        
        
        
        
          $
        
        
          (17,628
        
        
          )
        
        
        
        
          $
        
        
          (19,966
        
        
          )
        
        
        
        
          $
        
        
          (58,135
        
        
          )
        
        
        
        
          $
        
        
          (65,809
        
        
          )
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Basic and diluted net loss per common share
        
        
        
        
          $
        
        
          (0.13
        
        
          )
        
        
        
        
          $
        
        
          (0.19
        
        
          )
        
        
        
        
          $
        
        
          (0.46
        
        
          )
        
        
        
        
          $
        
        
          (0.69
        
        
          )
        
      
      
        
          Basic and diluted weighted average number of common shares 
          outstanding
        
        
        
        
        
        
          135,971,551
        
        
        
        
        
        
        
        
          105,774,949
        
        
        
        
        
        
        
        
          125,648,990
        
        
        
        
        
        
        
        
          95,160,945
        
        
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
    
    
      
        
          

Synta Pharmaceuticals Corp.Condensed Consolidated Balance Sheets (in thousands)(unaudited)

September 30,2015

December 31,2014

Assets

        
        
        
        
        
        
        
        
        
      
      
        
          Cash, cash equivalents and marketable securities
        
        
        
        
          $
        
        
          88,252
        
        
        
        
          $
        
        
          97,690
        
      
      
        
          Other current assets
        
        
        
        
        
        
          1,975
        
        
        
        
        
        
          1,656
        
      
      
        
          Property, plant and equipment, net
        
        
        
        
        
        
          561
        
        
        
        
        
        
          1,024
        
      
      
        
          Other non-current assets
        
        
        
        
           
        
        
          

226

305

        
      
      
        
          Total assets
        
        
        
        
          

$

91,014

$

100,675

Liabilities and Equity

        
        
        
        
        
        
        
        
        
      
      
        
          Current liabilities
        
        
        
        
          $
        
        
          30,633
        
        
        
        
          $
        
        
          30,889
        
      
      
        
          Long-term liabilities
        
        
        
        
        
        
          11
        
        
        
        
        
        
          4,650
        
      
      
        
          Stockholders’ equity
        
        
        
        
           
        
        
          

60,370

65,136

Total liabilities and Stockholders’ equity

 

$

91,014

$

100,675

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Investors:Synta Pharmaceuticals Corp.Daniel Cole, [e-mail] PartnersAndrea Rabney, [e-mail]:Argot PartnersEliza Schleifstein, [e-mail]