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Ergomed (LON:ERGO) partner Synta Pharmaceuticals has terminated its Phase III study of Ganetespib, a treatment for lung cancer.
It retains a minority interest in the drug after backing the earlier Phase II lung cancer study, but will not invest or participate in four other ongoing studies for the compound.
The Ganetespib decision has no impact on its financial position or forecast cash flows, Ergomed said, while four other co-development partnerships were proceeding to plan.
Synta (NASDAQ:SNTA) said that based on interim analysis from the trial adding ganetespib to another treatment, docetaxel, for lung cancer sufferers was unlikely to improve overall survival compared to using docetaxel alone.
Broker Stifel added that through the co-development model, the effect to Ergomed has been minimised with the the only change the upside potential of ganetespib, which the broker valued at around 10p/share.
Synta continues to investigate ganetespib in additional indications such as ovarian cancer, and Ergomed stands to receive a proportional share of all product revenues.
Stifel’s NPV-based valuation of the whole co-development portfolio remains unchanged at 70p, with target price overall 281p.
Shares eased 2% to 156p.