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What's in the Cards for Synta (SNTA) This Earnings Season?

Synta Pharmaceuticals Corp. SNTA is expected to report first-quarter 2016 results on May 5. This Zacks Rank #3 (Hold) stock has a pretty good track record with the company beating expectations on two occasions, while posting in line results in one. Overall, the company has delivered an average positive surprise of 21.52%. Let’s see how things are shaping up for the first quarter of 2016.


Factors to Consider

Last month, Synta announced that it will be merging with a privately held company, Madrigal Pharmaceuticals, Inc, in an all-stock transaction. This combined company will focus on the development of novel small-molecule drugs targeting cardiovascular-metabolic diseases and non-alcoholic steatohepatitis (NASH).

MGL-3196, which is Madrigal’s lead candidate, is a phase II-ready candidate that is being evaluated for the treatment of NASH and heterozygous as well as homozygous familial hypercholesterolemia. Data readouts for each program are anticipated throughout 2017.

Once the transaction closes, Madrigal shareholders will own 64% of the combined company while Synta shareholders will own 36%. The transaction is slated to close by the end of the third quarter of 2016.

We note that earlier Synta had focused on cancer treatments but the company suffered a setback last year when it decided to terminate a late-stage study (GALAXY-2) on its lead pipeline candidate ganetespib (advanced non-small cell lung cancer) due to futility. Thereafter, the company discontinued a substantial portion of its research and development activities relating to ganetespib and its oncology pipeline.

However, the company continues to conduct limited activities with respect to ganetespib including support for two ongoing investigator-sponsored studies in ovarian cancer and sarcoma and drug candidates from its Hsp90 inhibitor drug conjugate (HDC) program, including STA-12-8666.

Considering these developments, focus will remain on updates from the Madrigal transaction and strategic plans ahead.

Stocks that Warrant a Look

Here are some companies in the health care sector you may want to consider as our model shows that they have the right combination of elements – a positive Zacks Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 – to post an earnings beat this quarter.

The Earnings ESP for BIND Therapeutics, Inc. BIND is +7.14% and it carries a Zacks Rank #3. The company is scheduled to release first-quarter results on May 9.

Jazz Pharmaceuticals plc JAZZ has an Earnings ESP of +6.11% and a Zacks Rank #3. The company is scheduled to release first-quarter results on May 10.

The Earnings ESP for Impax Laboratories Inc. IPXL is +8.89% and it carries a Zacks Rank #3. The company is scheduled to release first-quarter results on May 10.

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SYNTA PHARMACT (SNTA): Free Stock Analysis Report
 
BIND THERAPEUTC (BIND): Free Stock Analysis Report
 
JAZZ PHARMACEUT (JAZZ): Free Stock Analysis Report
 
IMPAX LABORATRS (IPXL): Free Stock Analysis Report
 
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