1157601--3/11/2010--SYNTA_PHARMACEUTICALS

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{property, intellectual, protect}

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{stock, price, share}

{control, financial, internal}

{product, market, service}

{provision, law, control}

{cost, operation, labor}

{acquisition, growth, future}

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{operation, natural, condition}

{cost, regulation, environmental}

{personnel, key, retain}

If any of the following risks occurs, our business, business prospects, financial condition, results of operations, or cash flows could be materially harmed. Risks Related to Our Financial Position and Need for Additional Capital We have incurred significant losses since our inception, and we expect to incur losses for the foreseeable future and may never reach profitability. Our operating history may make it difficult to evaluate the success of our business to date and to assess our future viability. If we fail to obtain the funding necessary to support our operations, we will be unable to successfully develop and commercialize our lead drug candidates. Raising additional capital may cause dilution to existing stockholders, restrict our operations or require us to relinquish rights. Risks Related to the Development and Regulatory Approval of Our Drug Candidates Our success is largely dependent on the success of STA-9090 and our other current clinical and preclinical-stage drug candidates, and we cannot be certain that we will be able to obtain regulatory approval for or successfully commercialize any of these drug candidates. If we do not obtain the required regulatory approvals, we will be unable to market and sell our drug candidates. In future clinical studies with elesclomol, we intend to use a new formulation. We have limited prior clinical experience with this formulation and cannot ensure that no new toxicities will be observed. If we are unable to successfully reformulate STA-9090, it may limit the commercial potential of this drug candidate, even if approved. While we believe that elesclomol's mechanism of action may have applicability to a broad range of solid tumor cancers, most of our clinical trials of elesclomol to date have shown negative or inconclusive results and there can be no assurances that future clinical trials of elesclomol will yield positive results. Because our drug candidates are in an early stage of development, there is a high risk of failure, and we may never succeed in developing marketable products or generating product revenue. If clinical trials for our drug candidates are prolonged, delayed or suspended, we may be unable to commercialize our drug candidates on a timely basis, which would require us to incur additional costs and delay our receipt of any revenue from potential product sales. Failure to comply with foreign regulatory requirements governing human clinical trials and marketing approval for drugs could prevent us from selling our drug candidates in foreign markets, which may adversely affect our operating results and financial condition. Our drug candidates will remain subject to ongoing regulatory review even if they receive marketing approval, and if we fail to comply with continuing regulations, we could lose these approvals and the sale of any approved commercial products could be suspended. If side effects or toxicities increase or are identified during the time our drug candidates are in development or after they are approved and on the market, we may be required to perform lengthy additional clinical trials, change the labeling of any such products, or withdraw any such products from the market, any of which would hinder or preclude our ability to generate revenues. While we choose to test our drug candidates in specific clinical indications based in part on our understanding of their mechanisms of action, our understanding may be incorrect or incomplete and, therefore, our drugs may not be effective against the diseases tested in our clinical trials. We deal with hazardous materials and must comply with environmental laws and regulations, which can be expensive and restrict how we do business. Risks Related to Our Dependence on Third Parties In 2008, we entered into an agreement with Roche relating to the discovery, development and commercialization of our CRACM ion channel inhibitors. If this agreement is unsuccessful or terminated by Roche for any reason, our ability to develop and commercialize a CRACM inhibitor on a timely basis, or at all, could be affected and our business could be materially harmed. We rely on third parties to conduct our clinical trials and nonclinical safety assessment studies, and those third parties may not perform satisfactorily, including failing to meet established timelines for the completion of such clinical trials and studies. We have no manufacturing capacity and depend on third-party manufacturers to produce our clinical trial drug supplies. We contract with single manufacturers for the production of elesclomol and STA-9090 API and DP for clinical trials and the failure of these manufacturers to supply sufficient quantities of material on a timely basis could have a material adverse effect on our business. We anticipate continued reliance on third-party manufacturers if we are successful in obtaining marketing approval from the FDA and other regulatory agencies for any of our drug candidates. If we do not establish additional collaborations, we may have to alter our development plans. If we are unable to establish sales and marketing capabilities or enter into agreements with third parties to market and sell our drug candidates, we may be unable to generate product revenue. Risks Related to Our Intellectual Property If our patent position does not adequately protect our drug candidates or any future products, others could compete against us more directly, which would harm our business. We may be unable to adequately prevent disclosure of trade secrets and other proprietary information. Litigation or other proceedings or third-party claims of intellectual property infringement would require us to spend time and money and could prevent us from developing or commercializing our drug candidates. We may be subject to claims that we have wrongfully hired an employee from a competitor or that we or our employees have wrongfully used or disclosed alleged confidential information or trade secrets of their former employers. Risks Related to the Commercialization of Our Drug Candidates If physicians and patients do not accept our future products or if the markets for indications for which any drug candidate is approved is smaller than expected, we may be unable to generate significant revenue, if any. If the government and third-party payors fail to provide coverage and adequate reimbursement rates for our future products, if any, our revenue and prospects for profitability will be harmed. If a successful product liability claim or series of claims is brought against us for uninsured liabilities or in excess of insured liabilities, we could be forced to pay substantial damage awards. If we inadvertently violate the guidelines pertaining to promotion and advertising of our clinical candidates or approved products, we may be subject to disciplinary action by the FDA's Division of Drug Marketing, Advertising, and Communications or other regulatory bodies. Risks Related to Our Industry We may not be able to keep up with the rapid technological change in the biotechnology and pharmaceutical industries, which could make any future approved products obsolete and reduce our revenue. Our market is subject to intense competition. If we are unable to compete effectively, our drug candidates may be rendered noncompetitive or obsolete. We are subject to federal and state laws prohibiting "kickbacks" and false or fraudulent claims, and state gift ban laws which, if violated, could subject us to substantial penalties. Additionally, any challenge to or investigation into our practices under these laws could cause adverse publicity and be costly to respond to, and thus could harm our business. Risks Related to Employee Matters and Managing Growth We may be unsuccessful in retaining certain key personnel. If we make strategic acquisitions, we will incur a variety of costs and might never realize the anticipated benefits. Risks Related to Our Common Stock Our stock price has been and is likely to continue to be volatile and the market price of our common stock may drop. Insiders have substantial control over us which could delay or prevent a change in corporate control or result in the entrenchment of management and/or the board of directors. Provisions of our charter, bylaws, and Delaware law may make an acquisition of us or a change in our management more difficult. We do not anticipate paying cash dividends, and accordingly, our stockholders must rely on stock appreciation for any return on their investment.

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1157601--3/11/2010--SYNTA_PHARMACEUTICALS_CORP