Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of Synta Pharmaceuticals , a clinical-stage biopharmaceutical company focused on researching and developing cancer and chronic inflammatory therapies, fell as much as 17% following an analyst downgrade after Synta disclosed the departure of its president of research & development.
So what: Today was a double whammy for Synta. First, it received a downgrade by BMO Capital to "market perform" from "outperform" as the research firm cut its target in half to $9 from $18. The impetus to the downgrade, however, was an 8-K filed yesterday by Synta disclosing that Sumant Ramachandra had left his position as president of R&D for personal reasons less than two months after being hired.
Now what: As usual, I would take analyst actions with a grain of salt because they rarely have any bearing on the long-term investing thesis in a company. However, it always raises a caution flag when people are being hired and leaving positions of high importance in just a matter of weeks. With the company still purely in the clinical stage of its development, any disruption at the head of this division is bound to throw a monkey wrench into the engine. For now, I'd rather be an innocent bystander and stay on the sidelines than to try project where this highly volatile company may be headed next.
Craving more input? Start by adding Synta Pharmaceuticals to your free and personalized watchlist so you can keep up on the latest news with the company.
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The article Why Synta Pharmaceuticals Shares Sank originally appeared on Fool.com.
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