Synta Pharmaceuticals Corp. (NASDAQ:SNTA) Director Sells Over 3 Million Shares In The Company After Bad Third Quarter Results

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Synta Pharmaceuticals Corp. (NASDAQ:SNTA) released its 2015 third quarter results recently and the reports are overwhelmingly bad. To start with the company made a net loss of $17.6 million on an already small revenue base. The company also released plans to lay off over 60% of its workforce and has committed to significant restructuring which could mean more cost cutting measures. The company has tried to come up with some optimistic projections for the future in tis statements and however these assurances are do not seem to be very credible considering the horrible performance and huge downsizing of the corporation.

Things become fishier for the embattled corporation when one takes into account that one of its Directors recently sold over 3 million shares he had in the company for just $0.48 per share. It is definitely a worrying sign when one of the Directors sells off his stake in the company for an extremely low payout at the time when the company is having a hard time.

Synta is a biotech company and biotech companies are usually valued by the potential of its key pipeline products, therefore biotech stocks are especially susceptible to market sentiments and volatility. Other biotech companies like XenoPort, Inc. (NASDAQ:XNPT) and Opko Health Inc. (NYSE:OPK) have also seen their stock value decline in recent times.

There have been some reports that are bullish on Synta and expect the shares to reach $1 which would be double its current value; however events like Director of the company selling over 3 million shares in his own company seem to suggest that such bullishness may be misplaced optimism. Also the strategy of Synta seems to rely more on cost cutting and layoff of workforce rather than development of new products that might save the company. Overall the financial reports of Synta are bad and the subsequent developments seem to suggest that the company can be in far more trouble than the already bad financial report.

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