Welcome to the Synta Pharmaceuticals Fourth Quarter and Year-End 2014 Earnings Conference Call. Today's conference call is being recorded and webcast. At this time for opening remarks, I would turn the call over to Daniel Cole of Synta Pharmaceuticals. Please go ahead, sir.

Hello and thank you all for taking the time to join us today. With me are Anne Whitaker, Chief Executive Officer; Chen Schor, Chief Operating Officer; Vojo Vukovic, Chief Medical Officer; and Marc Schneebaum, Chief Financial Officer. This morning, we issued a press release that reported financial results for the fourth quarter and year-end 2014. This release can be found on our website at syntapharma.com. Before we begin, I would like to point out that we will be making forward-looking statements based on our current intents, beliefs and expectations, which are subject to certain risks and uncertainties. Additional detail can be found in related SEC filings and are also available through our website. I will now turn the call over to Anne.

Thanks, Dan and good morning to everyone. Thank you for joining our call today. As we close the books on 2014, we look back at this past year as a defining period for Synta backed by many significant events that occurred across our business and are highlighted in our press release this morning. We reported final results from the global randomized multicenter Phase 2b GALAXY-1 study showing encouraging overall survival results and a good tolerability profile in patients whose time from diagnosis of advanced disease is greater than six months. These results support the selection of this population for the ongoing pivotal Phase 3 GALAXY-2 trial. Our GALAXY-2 trial remains on track for interim analysis in the second half of 2015. We've made enhancements to the execution of our clinical operations of the trial to enable us to increase the number of sites for the trial from 100 to 200 sites. We've enrolled 500 patients in GALAXY-2 to-date. We supported the initiation of a number of cooperative sponsored Phase 2 and Phase 3 programs with ganetespib across multiple cancer types. We announced the advancement of ganetespib into the Phase 3 extension of the AML low intensity 1 trial after meeting prespecified interim efficacy analysis criteria in July 2014. We advanced our first candidate from the Hsp90 inhibitor drug conjugate platform toward the clinic. We plan to submit an IND for the lead asset by quarter one 2016. And finally, we made some superb new hires and strengthened our leadership team. A few of our new leaders are sitting around this table with me today and you will have the opportunity to hear from them in just a few minutes on why they are excited to join Synta. As we proceed on the call today, we want to focus you all…

Thank you, Anne. I would first like to say that I am very excited about joining the team here at Synta. Not only do we have a dynamic leadership team, we have ganetespib, which I believe holds tremendous potential to benefit patients and improve outcomes across a number of different indications. I believe ganetespib's potential is underrecognized owning mainly to the challenges of dragging this target in the past. That said, ganetespib has a few key advantages. Ganetespib is 10 to 100 fold more potent than first-generation Hsp90 inhibitors. Also ganetespib's chemical structure is devoid of the molecule associated with liver toxicity observed with first-generation Hsp90 inhibitors. Ganetespib's rapid clearance from the retina is associated with near absence of mild to moderate visual disturbances. These advantages, as supported by over 1350 patients treated to-date with ganetespib and our Phase 2 data from GALAXY-1, led to the strong investigator support and the broad clinical program we're now pursuing. This is the fundamental reason for my coming to Synta. In addition, I see a few additional value drivers that got me very excited about the pipeline. First, ganetespib's potential to enhance activity with a variety of existing therapeutic approaches has the potential to extend to immunotherapy. Preliminary biology and preclinical data indicate a role for ganetespib and HSP inhibition in combination with emerging immunotherapy approaches and we hope to advance this part of our research. I'm going to provide one example. As you know, there are several agents in development that target PDL-1 expressed on tumor cells of non-small cell lung cancer patients. Some of the proteins that control the expression of PDL-1 on tumor cells are key clients of Hsp90. From a biology perspective, we have shown that ganetespib leads to decreased expression of PDL-1 in non-small cell lung cancer cells. From a preclinical perspective, we have been able to translate these biology findings into enhanced efficacy of the combination of anti-PDL-1s and ganetespib. While we cannot share more specifics about the data at this point, we expect to submit a publication in the very near future with more comprehensive data. We may also consider studies exploring the combination of ganetespib with anti-PDL-1 therapies in the future. And this is just one example of ganetespib's potential benefit in combination with immuno-oncology approaches. As you can imagine, we're exploring multiple avenues in this direction that may benefit from ganetespib's inherent mechanism of action and our know-how that accumulated over the years. Another key value driver is Synta's ownership of the worldwide rights to ganetespib and to the HDC TAFR candidates, including STA-12-8666. As we continue to generate important data, the interest in this broad pipeline serves as a significant opportunity to build value for our shareholders through collaborations. Like the rest of the team, I look forward to our progress in the coming quarters and to help in building a true world-class oncology biopharmaceutical company. I'll now turn the call to Vojo. Vojo.

Thank you, Chen. As Anne mentioned before, GALAXY-2, our lead program, is evaluating ganetespib and docetaxel versus docetaxel alone for the second-line treatment of patients with non-small cell lung cancer with adenocarcinoma histology. It is a robust, well-designed and well-powered trial whose conduct and execution has been greatly refined thanks to what we've learned from our large randomized exploratory Phase 2 study, GALAXY-1. Among its prespecified analysis, GALAXY-1 demonstrated that patients who were diagnosed with advanced disease more than six months prior to study entry saw the greatest benefit with the addition of ganetespib. Ongoing preclinical work is seeking to decipher the molecular mechanisms of increased activity in this patient population. In parallel, we're conducting translational research studies and are looking for specific genetic signature as a predictive biomarker for ganetespib activity. We're encouraged by the rate of enrollment in the Phase 3 GALAXY-2 trial thus far as we have enrolled 500 patients to-date. Total enrollment in the Phase 3 GALAXY-2 study is expected to be up to 850 patients. At this study size, the trial is very well-powered with a 92% power to detect, a 25% reduction in risk of death or a hazard ratio of 0.75 at the time of the final overall survival analysis. Two event-driven interim analysis for OS have been prespecified. The first interim analysis will be performed after approximately 60% of the number of events required to trigger the final analysis has occurred. The second interim analysis will be performed after approximately 80% of events are accumulated. Following agreements with the FDA on a statistical analysis plan for this study, the primary endpoint analysis will be based on an evaluation of overall survival in the intent-to-treat population and a prespecified analysis of overall survival in ALK and EGFR-negative patients will be conducted as a…

Thanks, Vojo and good morning, everyone. I would like to echo Chen's sentiments about joining Synta by noting a few key points that were important to me. First, we have a lead drug candidate, ganetespib, which is in a Phase 3 clinical study for non-small cell lung cancer and we expect interim data from that study within the next 12 months. We also believe there are several additional potential indications for that drug. Then there are multiple product opportunities arising from our HDC program and we have an experienced management team to lead execution of our strategy. So from my perspective, this is a very dynamic and exciting time for the company and I look forward to the value-creating milestones ahead. So now onto our financials. We didn't recognize any revenue in the fourth quarter of 2014 or 2013. Research and development expenses were $15.7 million for the fourth quarter of 2014 compared to $20 million in Q4 2013. General and administrative expenses were $4.2 million for the fourth quarter of 2014 compared to $3.5 million in Q4 2013. Overall, the company reported a net loss of $20.4 million or $0.19 per basic and diluted share in the fourth quarter of 2014 compared to a net loss of $24.2 million or $0.31 per basic and diluted share for the same period in 2013. As of December 31, 2014, we had $97.7 million in cash, cash equivalents and marketable securities compared to $91.5 million as of December 31, 2013. We expect our cash resources will be sufficient to fund operations at least through the end of 2015. This estimate assumes no additional funding from new partnership agreements, equity financing or further sales under our ATM. The timing and nature of certain of our activities, which are contemplated for 2015, will be conducted subject to the availability of sufficient financial resources. So let me now turn the call back to Anne. Anne.

Thanks, Marc. Before we open the call for your questions, I would like to quickly review the upcoming milestones for Synta. First is the completion of the first interim analysis of GALAXY-2 in the second half of 2015, this year. Final analysis remains on track for 2016. Pending a successful interim analysis of GALAXY-2, we would target the filing of a new drug application and marketing authorization application for ganetespib in non-small cell lung cancer in 2016. Also in 2016, we plan to submit an IND for our lead HDC asset, STA-12-8666, in the first quarter. We're also working toward initiating IND-enabling studies for an additional HDC drug candidate in 2016. Over the next few months, we will be carefully evaluating our strategic options for leveraging these milestones with the objective of creating long-term shareholder value through the transformational potential of Hsp90 biology. With that, let's now open the call for questions. Operator, are you there?

[Operator Instructions]. Thank you. Our first question is coming from the line of Thomas Weibo with Jefferies. Please proceed with your question.

I was curious about this PDL-1 effect that you had talked about. Is there any way that you can go back and assess whether or not that played a role in GALAXY-1 or in any of the lung cancer patients that you treated before or prospectively in GALAXY-2?

Well our efforts in the biomarker projects are ongoing. We're exploring multiple venues to understand what are the potential biomarkers that can help us shape our clinical program going forward and I would like to mention one comment maybe just kind of in general regarding your question. As a company and really the leaders in Hsp90, we have pretty broad know-how on the different proteins that are clients of Hsp90 and as you can imagine, some of these proteins may or may not be membrane proteins or present some of the protein on the membrane and this is something that we're going to explore in combination with different immunotherapy methodologies. PD-1 was just an example, but we're going to look into other angles as well. Hopefully that helps.

And then on GALAXY-2, with 500 patients in now, do you have any insights that you can give us on how these patients might be different from the target subgroup with the same entry criteria in GALAXY-1, anything geography, demographics?

So as of right now, geographically, to address this first, the patient population in GALAXY-2 actually reflects the patient population in GALAXY-1. This is a trial which is recruiting patients from North America and across Europe and the proportions and the types of patients haven't really changed between GALAXY-1 and GALAXY-2. So we remain blinded to the data, so we cannot provide anything specific other than the recruitment patterns and I hope that is helpful.

And then just lastly on the Hsp90 conjugate program, given the fact that diarrhea is the main side effect of ganetespib, should we assume that your Hsp90 homing conjugates also would disproportionately deliver SN-38 to the GI tract or is that more of an off-target feature of ganetespib itself?

So Tom, our lead asset in the HDC program, the SN-38 conjugate or STA-12-8666, is composed of an Hsp90 binding molecule which doesn't really inhibit Hsp90 and it is delivering SN-38. In preclinical evaluations thus far, we haven't really seen diarrhea as a major or dose-limiting toxicity and we expect the same to be true in the clinic.

Thank you. Our next question is coming from the line of Thomas Yip with MLV & Company. Please proceed with your question.

I just have a very short one. I know it's a little bit early to think about how to approach with your HDC platform, but can you just briefly outline what are you thinking regarding how to advance any candidate and when to -- what stage to outlicense it and what's the scope of any partnerships?

So I'm going to answer regarding our first lead asset and maybe broad kind of answer regarding the platform. So regarding our first candidate, we have significant preclinical data in multiple indications. Some of it I think is already in the public domain and we're now in the process of fine-tuning a clinical development plan. We're not there yet, but this is the time when we're selecting the lead indications and the right design of the clinical study. Regarding partnerships, we're in discussions at different points in time with different partners regarding this specific asset and regarding the HDC platform. In general and at the right point in time, we will consider what is the right approach and what is the right value that we want to create for our shareholders. I want to emphasize that we have significant IP coverage for this approach and that is across many, many payloads and SN-38 is just the first one that we're putting in the clinic, but we have other payloads that we're now focusing on that can generate significant differentiation in the clinic and benefit to patients. So we're really trying to combine how can we target tumors using Hsp90 with the right payload, which is really a different approach from nanoparticles or any other approaches that you have seen like ADCs. Hopefully that helps.

Thank you. Our next question is coming from the line of George Zavoico with Jones Trading. Please proceed with your question.

Hi, Anne. Hi, Vojo and welcome, Chen and Marc. I think you are joining a terrific team there and you're right with a terrific program underway. I'm concerned about the breadth of what you're trying to do, which is impressive for sure, especially in terms of approaching it from the immuno-oncology standpoint with PD-1 and the other checkpoint inhibitors. Clearly, there is a tremendous amount of interest in that space and at least when you get into clinical trials, these are going to be very expensive drugs and very expensive trials to run. But on the other hand, there is probably also tremendous interest in this from organizations that might be able to do this on an investigator-sponsored or cancer oncology group kind of platform. My broad question is how are you triaging everything that you can do relative to your capital resources?

First of all, I think while it may seem like we have a breadth of activity going on and I would say our efforts at Synta now are more focused than I think they have been in the past few years and I want to emphasize our number one focus and where we're applying our people resources, our financial resources and all of our energy and effort is on GALAXY-2 and finishing that program, that is absolutely the most important thing that we're going to do at Synta this year. And you are right, we have great relationships with investigators. We've had a lot of interest in ganetespib and as you know, we have more than 20 ISPs that are either underway or planning at this point. And so we plan to focus our ISP efforts on those tumor types where we have Phase 2 and Phase 3 programs going on, which include breast, ovarian, of course, non-small cell lung cancer and AML and also our combination of ganetespib with these emerging therapies. So that is really where we will be focusing our attention. And with the HDC platform, our efforts in the past have been broad and building a variety of different compounds and we have achieved a library of over 700 compounds with more than 40 anti-payloads and now our efforts are very focused on taking into the clinic our lead asset, 8666 and identifying that next one. So I'm just trying to paint a picture for you that we really have focused the organization and I think rightly so, we're adding to that focus as this effort around combining ganetespib with these emerging therapies like immunotherapies. Chen mentioned preclinical data and our understanding of the biology of cancer cells in Hsp90 understanding and we have anecdotal feedback even from investigators who have been doing ongoing trials and what they are seeing with patients that give indication that this preclinical work that we have done is probably going to show up in clinical results as well. So hopefully that gives you more confidence that we're very focused and making sure that we're using our time, energy and financial resources wisely.

You mentioned the 700 compounds and the 40 payloads that speaks to the IP portfolio that you are developing. But you also mentioned that you are moving away from discovery. This is a key area where it behooves you to capture as much chemical space as you possibly can. Do you feel that the 700 compounds and 40 payloads is enough or are you still developing even more compounds, testing even more payloads?

I would not characterize us as moving away from discovery. I would say we're shifting our discovery efforts to what I term research where in the past Synta had approached discovery through mass screening of compounds and looking at compounds to match with potential disease states. Now we're looking at what the unmet need is in the oncology space, unmet need for particular cancer types that we have good understanding of and we will be looking for compounds and developing compounds in the HDC platform, as well as looking externally for assets that might be synergistic with ganetespib or Hsp90 inhibitors in general or that will leverage the capabilities that we're building internally as an oncology company. So I want to caution folks that we're not moving away completely from research; we're taking a more rational approach to our research efforts versus just broad discovery. And I don't know, Chen, would you like to make any additional comments?

Yes, absolutely. Maybe two points. One, I want to emphasize that our IP covers the platform, as well as many of the payloads that we have so far tested and really what we're now doing is focusing on the key programs where we see or we expect to see significant benefit to patients. So whether it is 8666 or whether it is an HDC with a different platform or whether it might be a different combination along the lines that we've discussed earlier, but I want to emphasize that there is a very strong focus on translational oncology where we want to see the benefits at the patient level and sooner rather than later.

And final question, you mentioned divestiture of non-core programs. What are those? And Vojo, you probably even know I'm going to ask about elesclomol.

I can certainly just name them and then, Vojo, you can answer any specifics around them. But the two that we divested this past year are the CRAC program as well as Apilimod. And Vojo, if you want to speak to the legacy of those programs and the rationale.

Yes, absolutely. I think that both CRAC and Apilimod were focusing more broadly in the area of severe diseases and Anne has clearly outlined the interest and the strategy going forward of Synta focusing on expertise within oncology. So that I was, I think, the principal driver for these, I think, very interesting and very promising programs, but I think it is strategically the better choice to have these programs to be developed outside of Synta. Another program that is part of the legacy is elesclomol and we're currently in the process of reviewing the options for this program on what would be the optimal next steps.

And maybe, George, just one last point on this. These were not programs that Synta was spending a lot of capital on, financial resources, but what concerned me was the more we had them sitting on our shelves, there was temptation from our great research team to be doing experiments, to take mind share from those folks and I really wanted to limit that. In addition, I do think these are great compounds and I hope that they can bring value to patients, some benefit to patients, but I knew that we were not going to be able to put the resources or energy or expertise around these assets to take them forward. So I think it is a benefit to patients longer term to have these programs in organizations that will commit resources to it and have the expertise to develop them, as well as to Synta to focus our activities going forward. We certainly hope to get value out of these assets as companies are taking them forward to develop and we've set up structures that should enable that. And with elesclomol, as Vojo said, we're evaluating elesclomol. We currently have an [indiscernible] a large cooperative IST going on and we expect in the coming months to have more information on our next actions with elesclomol.

[Operator Instructions]. Thank you. Ladies and gentlemen, this does conclude our question and answer session. I will now turn the conference over to Ms. Whitaker for any additional closing remarks.

Thank you all for joining today. We look forward to sharing more with you in the coming quarters. Certainly if you would like to know more about our progress, feel free to reach out to us directly. We would be happy to have a conversation with you and we look forward to sharing more very soon. Take good care. Have a great day.