NEW YORK (AP) ? Shares of Endocyte Inc. skyrocketed Wednesday after the company said it is close to restarting a clinical trial of an experimental cancer drug, as well as filing for conditional marketing approval in Europe.
THE SPARK: After the market closed on Tuesday, Endocyte said it will resume enrolling patients in a late-stage trial of its drug EC145 during the second quarter. The study is designed to compare EC145 to the chemotherapy drug Doxil as a treatment for ovarian cancer. Enrollment stopped because of a shortage of Doxil, and the company said Tuesday that the Food and Drug Administration will allow it to import the drug for use in the trial.
Endocyte also said it will ask European Union regulators to grant conditional marketing approval to EC145 and its imaging agent EC20. The West Lafayette, Ind., company wants approval to provide EC145 to patients whose cancer has not responded to platinum-based chemotherapy, and EC20 is used to identify patients who could benefit from treatment with EC145.
Conditional approval would allow Endocyte to market the drug to patients who don't have other treatment options, although it would still be required to run clinical trials to prove EC145 works. Endocyte plans to file its application during the third quarter.
THE BIG PICTURE: Endocyte is a development-stage company, and it has no products on the market. The company reported its fourth-quarter results Tuesday, and said it lost $10.8 million, or 30 cents per share, in the last quarter. It lost $3.3 million, or $3.57 per share, in the fourth quarter of 2010, and its research and development spending has more than doubled since then.
Endocyte reported $191,000 in license fees in the most recent quarter, which comprised all of Endocyte's revenue in 2011. It had no revenue in 2010.
Analysts expected Endocyte to take a loss of 34 cents per share, according to FactSet.
Endocyte is conducting clinical trials of EC145 as a treatment for ovarian cancer and lung cancer and is studying several other anti-tumor drugs. It is conducting preclinical studies of two potential inflammation treatments.
It completed its initial public offering in February of 2011, selling 14.4 million shares of stock, and then sold another 5.8 million shares in August.
THE ANALYSIS: Robert W. Baird & Co. analyst Christopher Raymond said he does not think EU regulators will grant conditional approval to EC145, but he said the filing offers a "glimmer of hope." He maintained a "Neutral" rating with a price target of $5 per share.
Wedbush analyst Gregory Wade was more optimistic, noting that Endocyte decided to file for conditional approval after discussions with regulators. He said he believes Endocyte has met the requirements to get the drug approved: there is a significant need for new treatments for this type of ovarian cancer, clinical trial data indicates there is a benefit to patients, and the drug did not harm patients' overall survival.
Wade kept an "Outperform" rating on Endocyte stock with a price target of $16 per share.
SHARE ACTION: Shares of Endocyte gained $2.36, or 63 percent, to $6.08 in afternoon trading. The stock plunged 65 percent on Dec. 13 after the company said patients who were treated with EC145 and Doxil in a study did not live as long as patients who were treated with Doxil alone. However the trial was not designed to compare the survival of the two groups of patients.
Source: http://news.yahoo.com/endocyte-jumps-plans-cancer-drug-candidate-190253937.html
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