On Wednesday, TD (TSX:TD) Cowen announced a downgrade of Syros Pharmaceuticals (NASDAQ:SYRS) stock from Buy to Hold. The decision follows the recent failure of the SELECT-MDS-1 Phase III clinical trial. The trial was evaluating the efficacy of tamibarotene, a drug candidate for the treatment of myelodysplastic syndromes (MDS).
The firm expressed disappointment with the trial's outcome, which is likely to halt the development of tamibarotene. Syros has stated that it intends to conduct a thorough analysis of the SELECT-MDS-1 data to decide on future actions for the program. Despite the trial's failure, the results did show a slight trend favoring tamibarotene over the control.
In the trial's first 190 enrolled patients, the complete response (CR) rate was 23.8% for patients treated with tamibarotene in combination with azacitidine (aza), compared to 18.8% for those receiving azacitidine alone. However, the statistical significance of this difference was not strong, with a p-value of 0.2084.
This setback comes soon after the SELECT-AML-1 trial, which also did not demonstrate an improvement in efficacy when tamibarotene was added to the venetoclax/azacitidine combination therapy in acute myeloid leukemia (AML) patients. The two trials together suggest that tamibarotene has, at most, limited effectiveness in treating AML and MDS with RARA+ (retinoic acid receptor alpha).
In light of these developments, TD Cowen has removed all estimates for tamibarotene from their financial model, reflecting skepticism about the drug's commercial viability. The market will be closely monitoring Syros Pharmaceuticals as the company continues to assess its development strategies.
In other recent news, Syros Pharmaceuticals has faced significant developments. The biopharmaceutical company saw its Phase 3 SELECT-MDS-1 trial, testing tamibarotene combined with azacitidine, fail to meet its primary goal.
This led to JMP Securities downgrading the stock from Market Outperform to Market Perform, reflecting a shift in expectations for the company's near-term prospects. Despite this, the treatment was generally well-tolerated, aligning with the safety profile observed in previous studies.
In financial news, Syros Pharmaceuticals reported no revenue for Q3 2024 and a net loss of $6.4 million during its earnings call. However, the company maintains sufficient cash reserves to fund operations into Q3 2025. In addition, Syros is preparing for the commercial launch of tamibarotene and exploring business development opportunities for the CDK7 inhibitor asset, 5609.
These recent developments highlight Syros Pharmaceuticals' ongoing commitment to addressing unmet needs in hematologic cancers, despite challenges encountered in clinical trials. The company's future actions will be closely monitored by investors, particularly in relation to the outcome of the SELECT-MDS-1 trial and its impact on the company's prospects.
InvestingPro Insights
Recent data from InvestingPro sheds additional light on Syros Pharmaceuticals' current situation following the clinical trial setback. The company's market capitalization stands at $73.19 million, reflecting the market's reaction to the recent disappointing news.
InvestingPro Tips highlight that Syros is "quickly burning through cash" and "not profitable over the last twelve months," which aligns with the challenges faced by biotech companies during drug development phases, especially when faced with setbacks like the recent trial failures.
Despite these challenges, InvestingPro data shows a significant 41.45% return over the last month, suggesting some investors may see potential in the company's future prospects or possible strategic shifts. However, it's important to note that the stock has experienced a -46.05% return over the past six months, likely influenced by the trial outcomes discussed in the article.
For investors seeking a more comprehensive analysis, InvestingPro offers 13 additional tips for Syros Pharmaceuticals, providing a deeper understanding of the company's financial health and market position in light of recent events.
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