Phase III results from metastatic melanoma study showed more deaths among patients treated with elesclomol and paclitaxel.

Synta Pharmaceuticals is halting development of cancer drug candidate elesclomol due to safety concerns. An interim analysis of a Phase III trial in melanoma found a greater number of deaths in the study group compared to the control arm.

The company’s stock took a nose-dive in morning trading. It opened the day at $1.46, a 77% drop from yesterday’s close of $6.39.

Synta will work with partner GlaxoSmithKline to determine the final fate of elesclomol. Though the full value of their partnership deal was $965 million, to date GSK has paid only $130 million: $80 million up front, $25 million in October 2008, $15 million in December 2008, and $10 million earlier this month.

At this time it seems unlikely that the company will earn the promised $535 million in remaining precommercial milestone payments. These covered development in melanoma and other indications.

The data reported today comes from the investigation of elesclomol in combination with paclitaxel in chemo-naïve patients with stage IV metastatic melanoma; the control group was given paclitaxel alone. Other ongoing evaluations of elesclomol in combination with docetaxel in hormone-refractory metastatic prostate cancer and as monotherapy in a dose-escalation study will also be suspended pending further analysis.

“While this is a considerable setback, Synta has both the resources and a diverse pipeline of novel drug candidates that will allow us to continue to develop our oncology and anti-inflammatory programs,” comments Safi Bahcall, Ph.D., president and CEO.

Synta reports that it expects to end the year with between $65 million and $70 million in cash and receivables. Its pipeline includes a Hsp90 inhibitor currently in two Phase I studies in solid tumors, an oral IL-12/IL-23 inhibitor currently in a Phase IIa study in rheumatoid arthritis, a vascular-disrupting agent for cancer in preclinical development, and additional programs in the research and preclinical stages.

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