I’ve been hired as a freelance writer covering biotech companies for The Motley Fool, so posting frequency may drop off a little while I figure out my dual roles.  I think this blog has potential and I don’t want to see it die (actually I’d like to see it grow), so if there’s anyone out there who’s interested in writing analysises on babybiotechs.com, please let me know via e-mail (it’s in the about page).  The revenue sharing from the ads won’t pay the mortgage (unless you live in a trailer down by the river, then maybe it will cover it), but it will get you exposure, which might land you a job like it did me.

If any of the big boys want to promote this offer on their blogs, I’d be grateful.

Aside: The Investors Blog Network Festival featuring some great posts about investing is up at BioHealth Investor.

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This is a continuation of my evaluation of Synta Pharmaceuticals. You can find the first 4 posts in the Synta Pharmaceuticals stock evaluation category.

Synta is a fairly small biotech company. As of the middle of January, they had 141 full time employees, 108 of which were engaged in research and development. Over half of those hold M.D. or Ph.D. degrees, which seems a little top heavy to me.

Synta was founded by Safi R. Bahcall, Ph.D. and Lan Bo Chen, Ph.D. Prior to becoming Synta’s CEO, Dr. Bachall was a consultant at McKinsey & Co, so he understands the business side of biotechnology. He also co-founded a biotech company focused on ion channel research, which was acquired by Synta in December 2002.

Dr. Chen is a Professor of Pathology, Emeritus, at Harvard Medical School and the Dana-Farber Cancer Institute. He is the Chairman of Synta’s scientific advisory board and seems to be the scientific side of the founding of the company. He has also co-founded multiple biotech companies that have been purchased (for stock) by Synta. I haven’t gone back and looked at the history of these transactions (with both Drs. Bahcall’s and Chen’s companies), but I get the impression that it was mostly a consolidation of multiple companies that the founders were associated with.

Before the IPO, Dr. Bahcall owned 7.8% of the shares and Dr. Chen owned 12%. The largest owner was Bruce Kovner with 27.4% of the companies shares. Caxton Corporation (a hedge fund) owns 26.9% of the company through CxSynta LLC, which is managed by Bruce Kovner. With that kind of money in the company, Kovner is obviously on the board of directors and has a high stake in the performance of the company.

Three of the members of the board (including Kovner, but not the two founders) bought an additional one million shares (1/5th of those made available) at $10 each during the IPO, so they clearly have faith in the company and think that it’s current value is around $10/share. While it would have been nice to see the co-founders investing more money, I’m more interested in Kovner’s investment (he bought $7.2 million worth) since he’s more of a business man and is less likely to be investing more just because it is his company.

Filed under: Synta Pharmaceuticals (SNTA) | 1 Comment »