If you're like me, you didn't know much about Synta Pharmaceuticals ( SNTA) before Wednesday's announcement that the small biotech firm had landed mighty GlaxoSmithKline ( GSK) as a partner for its experimental melanoma drug.

The deal -- potentially worth up to $1 billion -- is a good one for Synta, and the news sent shares surging higher in premarket trading.

The stock was up big last week on speculation of a partnership, which is one reason why it retreated during Wednesday's trading session on profit-taking. Synta closed Wednesday off about 9% to $9.32.

I had to do some quick work getting up to speed on Synta's melanoma drug, called STA-4783.

But this is the kind of research any biotech stock investor can do. The challenge is in knowing where to look and how to get started. (For another play-by-play on biotech stock research, click back to this column .)

I began with the press release Synta issued detailing the Glaxo deal. For this exercise, I'm interested more in STA-4783 than the financial terms of the partnership agreement. The press release contains a thumbnail sketch of the drug, but thankfully, Synta also provides a link to more clinical data.

When the company hasn't provided such a direct link for a cancer drug, my first stop is often the American Society of Clinical Oncology Web site, which archives data presentations from its big cancer meetings. You can click here for a searchable database of research abstracts.

If you type STA-4783 into that database, it returns a list of presentations, including one from last June's ASCO annual meeting.

This is my starting point. I'm going to use Synta's slides from now on, which are basically the same as the ASCO slides. Using these, I'll point out the kind of data you should be looking for, how to interpret it, and then, what questions or concerns it may raise.

On Tuesday, I was more interested in speed than anything else, so I skimmed through the first dozen or so slides dealing with the mechanism of action of STA-4783. This is very important, but less so when I'm just trying to get a sense of whether a drug is active or not.

So, I moved fast to slide 17, which describes the phase II study of STA-4783 in melanoma patients that Synta previously conducted. I like what I see immediately: Synta ran a randomized, controlled phase II study. This is a more robust trial than the single-arm, uncontrolled studies typically conducted by biotech companies in the phase II stage of development.

In this case, Synta randomized 81 melanoma patients 2:1 to receive STA-4783 plus the chemo drug paclitaxel or paclitaxel alone. The primary endpoint of the study is progression-free survival, or the length of time that a patient survives without the cancer growing or getting worse.

The results of the study are on slide 19: STA-4783-treated patients reported a median progression-free survival of 3.7 months compared to 1.8 months for patients in the control arm. The difference was statistically significant at a "p value" of 0.035, below the 5% threshold where results could have occurred by chance.

Eyeing the Efficacy

There's more supportive efficacy data on slides 20 and 21: A response rate for STA-4783 of 15.1% compared to 3.6% for the control arm. This is the percent of patients in each arm of the study who saw their tumors shrink by at least 50%. STA-4783 patients also reported a median overall survival of 12 months compared to 7.8 months for the control-arm patients. Neither of these results is statistically significant, which isn't ideal but also unsurprising given the number of patients enrolled in the study.

From all this data, you can see why a randomized, controlled study is important and a nice thing to have -- the control arm provides a tangible yardstick by which the drug's efficacy can be measured.

For cancer drugs, efficacy reigns supreme, but safety is an important consideration, too. In this case, STA-4783's toxicity profile, outlined in slides 27-29, doesn't look out of the ordinary.

At this point, you could stop your research and say reasonably that Synta has put together some compelling data on STA-4783 as a potential melanoma drug; at least enough data that would pique my interest as a biotech investor.

This assumes, of course, all the typical caveats: It's a phase II study with relatively few patients enrolled and there are no guarantees that these data would be replicated in a larger phase III study.

If you want to do some extra homework (and c'mon, you know you do), Synta has provided more data on STA-4783 that's worth a look. If you're interested, follow me:

This phase II study had a crossover design, which means that patients originally randomized to the control arm (receiving paclitaxel only) were given the choice to also receive STA-4783 after their skin cancer progressed.

This makes the survival data mentioned above more compelling because 19 of 28 patients in the control arm also received STA-4783, as shown in slide 22. In other words, the median overall survival of 7.8 months in the control arm was probably a bit inflated because a majority of these patients benefited from STA-4783, too.

Score another point for STA-4783.

On the other hand, take a close look again at slide 22, where it's reported that the 19 "crossover" patients reported a median overall survival of 14.3 months. These patients survived longer than the patients who received STA-4783 plus chemo from the start of the trial. (Median overall survival of 12 months.) That's weird data, and something I'd want to dig into a lot deeper.

Digging Deeper

If you're a biotech junkie like me, you want to drill down even more:

What does Synta tell us about the melanoma patients enrolled in this phase II study? Were there any characteristics about their health status or stage of disease that may have tilted the trial in or out of STA-4783's favor?

There's good and bad news to report here.

Patients across both arms of the study were well-balanced for elevated HDL levels and for the percent of patients with cancer spread to the liver. You can see this on slide 24. Both of these factors correlate negatively with outcome, so it's good to see that there were no imbalances that could potentially sway the study results.

But the next slide, No. 25, points to a potential worry: There were more melanoma patients with low-grade disease (stage M1a and M1b) in the STA-4783 arm of the study (47%) than in the control arm (25%).

Conversely, there were more melanoma patients with high-grade disease (M1c stage) in the control arm (75%) than the STA-4783 arm (25%).

Simply put, when categorized by their stage of melanoma, the patients in the control arm were sicker, which theoretically, could have resulted in them living for a shorter period of time.

There were also more patients in the STA-4783 arm of the study who where chemotherapy-naïve. Again, these patients could be characterized as less advanced and more apt to respond to treatment.

These are the kinds of holes I look for when examining clinical data. I don't go into such research trying to entirely debunk or eviscerate whatever positive data exists. But it's important to put all the data into context, and that includes understanding factors that may take away from a drug's efficacy.

Reiterating the obvious, the failure rate of cancer drugs is very high, even with the cleanest of clinical data, so it's good to go into any biotech investment with eyes wide open.

This is an example of the kind of basic research I try to do with any drug being developed by a biotech company I write about. In this case, Synta's STA-4783 appears to be an intriguing drug, and I can see why Glaxo wanted a partnership.

This level of digging seems like a lot, but it really isn't much compared to the due diligence conducted by professional investors. And it doesn't take much time once you get the hang of it and know what to look for.
Adam Feuerstein writes regularly for TheStreet.com. In keeping with TSC's editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet.com. He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback; click here to send him an email.

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