SNAP good article here:
Synaptic Shares Fall as Merck Stops Drug Development (Update2) (Adds closing share price.)
Paramus, New Jersey, Sept. 13 (Bloomberg) -- Synaptic Pharmaceutical Corp. shares plummeted 34 percent after its development partner Merck & Co. ended efforts to develop an experimental Synaptic drug.
Synaptic shares fell 3 1/16 to close at 5 7/8. Synaptic was the sixth largest percentage loser in U.S. markets.
Merck halted its development program for the drug, designed to treat a common enlarged prostate condition, because the oral version was too difficult for the body to break down and carried the potential for negative interactions with other drugs, Synaptic said in a release issued late on Friday. ''It's the fall of their lead compound and the second major disappointment they've had in 1999,'' Carl Gordon, an analyst with Orbimed Advisors said on Friday. ''I believe that Synaptic has very strong science, but they are reverting to being a very high quality, early-stage science company, rather than the clinical-stage company they appeared to be at the beginning of this year.''
Merck's move marks the second drug development setback for Synaptic this year, as Eli Lilly & Co. ended work in March on an experimental migraine drug that was at that time the most advanced compound in Synaptic's pipeline.
Synaptic also does business by telling pharmaceutical companies which chemical receptors are good candidates for the kinds of drugs they want to develop, and in that area the company's science is still considered strong. Shares in the company had nearly doubled over the past months, partly recovering from a plunge triggered in March. ''They have had two major setbacks . . . but I like their science and I like their technology,'' said Niva Almaula, a biotechnology analyst at Mehta Partners. Success ''seems further down the road now, but they do have cash,'' she said.
Synaptic said in a release that the prostate drug appeared to meet primary objectives of easing symptoms of an enlarged prostate without as many of the signs of cardiovascular side effects seen in existing drugs. That means the research supports the company's system for pinpointing the molecular receptors in the body that make the best targets for particular drugs, the company said.
The end of the partnership with Merck is a setback and will delay the company's efforts to produce a marketed drug, said Richard van den Broek, an analyst with Hambrecht & Quist who has a ''buy'' rating on the stock. Yet in terms of pinpointing receptors to be the focus of drug development, ''they picked the right target,'' he said. ''They have lived up to their half of the bargain,'' van den Broek said. ''That's a very strong endorsement of their technological prowess.''
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