Syros Pharmaceuticals plunges after company abandons failed cancer candidate

Syros Pharmaceuticals

One of the biggest losers on Thursday came from the biotech sector when a small gene-editing company disappointed investors with a shift in their drug pipeline priority.

Syros Pharmaceuticals, an early-stage biotech company that previously had been working on a cancer drug therapy, saw its stock plummet on Thursday after announcing that it was effectively giving up on one of its mainline cancer candidates.

While the official announcement tried to downplay the revelation, stressing that they will be prioritizing another drug in its stead for the time being, investors and analysts alike weren’t swayed as shares of the company fell by almost one-third in response.

The company announced that they were stopping the development of its CDK7 inhibiting drug SY-1365 in favor of its alternative treatment, SY-5609, which had shown more promising results. The difference between the two, besides the fact that one is taken orally while another requires an injection, is that SY-5609 showed stronger performance overall. Switching priorities like this wasn’t seen as a great piece of news by the markets, especially since SY-1365 was seen as one of the company’s leading front runners.

“We believe in selective CDK7 inhibition as a potentially transformative targeted approach for difficult-to-treat cancers,” said Nancy Simonian, M.D., Chief Executive Officer of Syros, in response to the decision. “SY-1365 was the first selective CDK7 inhibitor to enter clinical development, demonstrating proof-of-mechanism for this novel therapeutic approach and showing early signs of clinical activity…We are prioritizing SY-5609 because we believe it has best-in-class potential and that it provides the greatest opportunity to realize the promise of selective CDK7 inhibition for patients.”

This decision from the biotech company also means that investors will need to wait sometime in 2020 to see a phase 1 trial of SY-5609 get underway to further test just how promising this newer, alternative drug treatment could be. Until then, however, it appears that sentiments have turned against the small biotech stock as shares fell by 31% over the course of the day.

Since the beginning of the year, Syros’ stock price has been steadily increasing except for the past few weeks, where the company lost most of its earlier gains made throughout Q1 and Q2 2019. Although there are only a handful of Wall Street analysts covering the biotech stock, the majority of them have a “buy” rating on the company, with just one holding a neutral “hold.”

While competition in the gene-editing market is fierce, with rival companies producing their own gene-editing drugs, the overall market size for treatments of certain diseases such as cancer is large enough that dozens of smaller companies can carve out a niche for themselves.

Until then, however, small biotech stocks in the gene-editing market remain highly speculative investments, with drug candidates unlikely to hit the market until 2022 or later.

Syros Pharmaceuticals Company Profile

Syros Pharmaceuticals Inc is a biopharmaceutical company engaged in a non-coding regulatory region of the genome controlling the activation and repression of genes. It i primarily involved in the segments of the pharmaceutical, biotechnology and other related markets that address gene control and cancer. – Warrior Trading News