Syndax (SNDX) tried to go public back in June of 2014 with a different management team and less compelling story. Instead they took in capital from crossover investors, did a minor pivot and brought in a new management team to lead the company forward.

The proposed terms in 2014 were 4.3M shares at a $14 mid-point which would have resulted in a market capitalization of $171M. Syndax is back in the market now with a new underwriting team led by Morgan Stanley and Citibank. Now the proposed terms of 4.4M shares at a $15 mid-point with a market capitalization of $270M. (The increase is due to the much larger share count - about 18M versus the 12.2M back in 2014.) Members may wish to view the current IPO roadshow, the current roadshow transcript or the old roadshow slides.

Institutional investors may want to have conversations with JMP because they are the only co-manager on both the original and new prospectus, they may have the best insights on how the story and the team has evolved in the last year.

The story is pretty good. The lead compound, Entinostat (ENT), has demonstrated that it dramatically increases anti-tumor immune response when combined with existing mainstream treatments that are anti-PD-1/CTLA-4 drugs from companies like Merck and Genentech. (The fact that both have partnered with Syndax underscores the validity of the clinical results and mechanism of action.)

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Simply put the goal is to enhance the ability of the Cytotoxic T-cell to recognize and kill tumor cells. Many existing therapies focus on blocking the CTLA-4 and PD-1 mechanisms that can prevent the T-cell from recognizing the tumor cells. However two other mechanisms also inhibit T-cell ineffectiveness. Entinostat reduces the inhibitors which directly improves their ability to detect and kill tumor cells.

There are several sets of data and graphs in the IPO presentation but this one is the most clear and compelling. It also illustrates the synergistic nature of ENT when combined with anti-PD-1 and anti-CTLA-4 drugs. This graph is the reason Merck and Genentech have partnered with Syndax. Entinostat has a good safety profile and desirable characteristics that would allow oral, once-a-week dosing.

Like most biotechnology IPO stocks this one won't have revenues for years to come - but they do have a broad range of trials in process - five phase 1b, three phase 2 and one phase 3 (for HR+ breast cancer.) That means there will be a steady stream of results - five reported in 2016 with another 4 already in the plan for 2017 - which will keep attention and investor interest focused on the commercial potential of Entinostat.

It's not a "wonder drug" but it has been given breakthrough designation by the FDA which will help speed it to commercial success if trial results continue to support the existing data on effectiveness and safety.

Syndax Entinostat Competition

Although not presented in the roadshow there are actually quite a few alternative drugs in and around Entinostat. For example there are about ten so-called ADAC inhibitors (Panobinostat from Novartis being one example) in clinical trials. See the Journal of Clinical Investigation article (with 132 references) for the full story on ADAC inhibitors - New and emerging HDAC inhibitors for cancer treatment, January 2014.

In the T-reg category there are also myriad approaches that can be mixed and matched depending on the tumor types, patient characteristics and drug interactions. The picture below from Nature Reviews Drug Discovery 12, January 2013 provides at least a snapshot of some of these.

Having noted the many competitive drugs and approaches it's worth repeating that Entinostat shows broad effectiveness and safety in treating cancer in concert with known therapies. The graph above that indicates tumor volume of zero after 15 days is enough to cut through the noise and confusion that exists in the cancer treatment world and drug investing space.

As we go to press the SNDX deal appears to be in good shape - oversubscribed with a building book going into pricing after the close tomorrow (Wednesday). We've seen Editas (EDIT) double from their post-IPO lows which suggests investors are actively buying these long-term development stories if they have enough merit.

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