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While sectors such as financials, energy, materials and tech might ebb and flow on the unpredictable swings of currencies, commodities and policy, healthcare often plays a more defensive role. In particular, healthcare stocks can offer stability within a diversified portfolio when underpinned by genuine value propositions.
One such example is Syntara Ltd (ASX:SNT), an ASX-listed biotech with a diversified pipeline and fully funded programs advancing to the partnering stage, including anticipated Phase II efficacy data in 2026.
It’s worth noting how Syntara’s model differs from other biotechnology companies, often running with single candidates on which their value proposition hinges, which can lead to investor expectations being missed, as seen recently over at Opthea and Immutep. These companies were both single-asset companies that raised substantial capital to run large Phase 3 trials that went awry, ultimately resulting in heavy shareholder losses. In contrast, Syntara’s strategy does not rely on taking any single program “all the way” to an approvable study.
The company’s lead asset, amsulostat, is a disease-modifying therapy for myelofibrosis, discovered and developed entirely in-house. As such, Syntara retains full IP ownership, with patent protection extending into the 2040s. The drug is currently awaiting an expected FDA greenlight for a Phase IIb clinical trial later this year.
In a previously completed study, approximately 75% of myelofibrosis patients treated with amsulostat reported a 50% reduction in disease-related symptoms after six months or more on the oral enzyme inhibitor.
So, what does that mean?
When enzymes go haywire
Medicine – especially oncology – is always a difficult subject to explain in the way you’d do so at the pub, and Syntara’s lead candidate drug amsulostat is based on hard science (or deep health science if you prefer) that needn’t be delved on at an academic level in this article.
Here’s the basic rundown: in myelofibrosis patients, a naturally occurring enzyme that helps the body manage one of its key structural building blocks, collagen, goes haywire. That enzyme ultimately impacts how skin and all other organs (e.g. heart, kidney, lung) heal after damage.
In other words, the mechanics of the body that produce and upkeep skin and our organs become a problem. That problem also emerges when, driven by specific genetic mutations, the enzyme goes haywire in the bone marrow, where the body produces white blood cells, red blood cells, and other important components which modulate the immune system.
When those enzymes go haywire, they ultimately cause changes in the way collagen is handled in bone marrow itself, which is the typical ‘fibrosis’ condition which can lead to stiffer, non-functional flesh, a process called scarring. But in bone marrow, it interrupts the body’s production of healthy blood cells – leading ultimately to anaemia, fatigue, and also the enlargement of the spleen.
It’s not a minor condition. Those with the condition tend to live 5-9 years following diagnosis.
So how does it work?
While the tertiary-level ins and outs of myelofibrosis’s genesis in the body are complicated, the basic idea of how amsulostat works isn’t.
(The thesis of its mechanism of action is supported by an existing trial and, all cards in order, will be replicated in an upcoming trial following FDA approval.)
In short: the enzyme which goes haywire in the body we talked about above, called lysyl oxidase, is blocked by amsulostat. If that enzyme is basically shut off, then the body ‘s ability to continue creating scarring within the bone marrow is diminished.
What that means is that Syntara is developing a drug potentially capable of reversing fibrosis, thus modifying the disease, not simply managing symptoms. While that’s not necessarily a “cure,” it is a potential revolutionary change for the treatment of the blood cancer.
Existing drugs not great either
The true value potential of amsulostat becomes apparent when comparing with existing myelofibrosis treatments. Current therapies, known as JAK Inhibitors (JAKi) often further worsen blood cell counts in patients. In contrast, amsulostat appears to avoid these side effects- and may even be able to enhance the efficacy of JAKis.
Emerging data suggest that by blocking signalling pathways related with lysyl oxidase, amsulostat not only has the potential to reverse fibrosis outright but also synergise with JAK inhibitors to achieve deeper clinical responses.
Moreover, amsulostat demonstrates favourable tolerability, with patients so far shown to be able to continue treatment for up to a year. JAKis cannot boast the same tolerability.
In short, Syntara has the potential to deliver an absolute game-changer to the myelofibrosis drug market.
Smart money keeping watch
If the value proposition of Syntara’s potential isn’t obvious, here’s a concluding consideration.
The company is 43% owned by institutional investors; most of them specialised healthcare R&D funds and medtech venture capital-type firms.
That is unusual for a company valued where Syntara currently is; not only that, but the company is already having background conversations with undisclosed commercial partners with a view towards boosting amulostat’s likelihood of market entry.
The FDA is expected to greenlight an upcoming Phase IIb trial; amsulostat is 100% owned by Syntara’s shareholders, and, with a patent extending to the 2040s, the chances of a blockbuster buyout from a lager pharmaceutical company are very real (assuming replicable future positive clinical trial results.)
The company’s focus expands beyond myelofibrosis. Amsulostat is currently being evaluated in clinical trials in Australia and Germany to treat a related blood cancer called myelodysplastic syndrome, with data expected later this year. In addition, the program has secured government funding to initiate a pancreatic cancer trial by year‑end. With oncology representing the ultimate frontier of medical innovation, Syntara’s potential is both compelling and unmistakable.
And at the price of 3 cents per share, equating to approx. $50m market cap, you can see why its Board thinks the company is undervalued. Time will tell – something myelofibrosis patients don’t have much of.
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