Synta could net $1b in development deal

NEW YORK - Biotechnology company Synta Pharmaceuticals Corp. could receive more than $1 billion in payments from Roche under a drug development partnership, the company said yesterday in a Securities and Exchange Commission filing.

Under the deal, Lexington, Mass.-based Synta will conduct research on compounds that could become treatments for inflammatory diseases. Switzerland-based Roche will fund the research for an initial two-year period and receive worldwide rights to develop and sell three products.

In return, Synta receives $25 million in upfront license fees and is eligible to receive $245 million in development milestones for the first product and up to $122.5 million each for the second and third products.

Synta is also eligible for sales milestone payments up to $170 million for each of the three products.

Synta will receive tiered royalties on all product sales and retains the right, in indications other than rheumatoid arthritis, to codevelop and copromote in the United States at Roche's expense.

Shares of Synta rose 53 cents, or 10.2 percent, to close at $5.71 yesterday. The stock has traded between $4.29 and $10.30 over the last 52 weeks.

Associated Press