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Synta Pharma skids after expanding drug study

NEW YORK (AP) -- Shares of Synta Pharmaceuticals continued to slide Monday after the company said it is expanding a clinical trial of its cancer drug ganetespib, which will delay final results from the study.

THE SPARK: Synta said it wants to enroll 700 patients in the study rather than 500. It now expects to report interim results from the study during the second half of 2014 and will conduct the final analysis in the first half of 2015. It had expected to conduct the last analysis in the second half of 2014.

The company also reported its third quarter results. Synta said it lost $22.5 million, or 33 cents per share, after losing $15 million, or 25 cents per share, in the 2012 third quarter.

Analysts expected the company to report a loss of 32 cents per share, according to FactSet.

THE BIG PICTURE: Synta Pharmaceuticals Corp. does not have any approved drugs, and it is studying ganetespib as a treatment for lung cancer. A year ago the Lexington, Mass., company said patients treated with ganetespib had longer overall survival and time-to-disease-progression than patients treated with docetaxel, a chemotherapy drug.

However more recent reports, made in June and late October, disappointed investors. Those reports came from a trial of ganetespib in advanced non-small cell lung adenocarcinoma, a type of lung cancer.

Additional studies are evaluating the drug as a treatment for a variety of other cancers.

THE ANALYSIS: Stifel Nicolaus analyst Brian Klein said he still has doubts about the trial, because the company hasn't reported strong final data on ganetespib and it's not clear which patients will benefit from the drug. He said Synta will need to raise more money to continue testing of ganetespib and that may significantly dilute the value of its shares.

He rates the stock "Hold."

SHARE ACTION: Synta Pharmaceuticals shares fell 16 cents, or 3.7 percent, to close at $4.11. The stock is down 36 percent from its closing price on Oct. 25, when it reported the latest data from the study.