Analysts: Endocyte likely to receive green light on first drug this month

Analysts expect West Lafayette-based Endocyte Inc. to win market approval for its first drug on March 21, allowing it to start generating revenue to fund other promising drugs in its pipeline.

The European Committee for Medicinal Products for Human Use is scheduled to meet March 17-20, and analysts expect the agency to vote during that meeting to approve vintafolide, Endocyte’s first drug, which treats ovarian cancer.

Previously, analysts predicted European regulators would approve vintafolide at their January meeting, but that did not happen.

Many investors remain skeptical of Endocyte. The company’s stock closed Friday at $13.17, in spite of three Wall Street analysts' predicting the stock will rise to at least $20 per share in the next year.

“We believe ECYT is undervalued and its potential as a technology platform underappreciated,” wrote Adnan Butt, an analyst at RBC Capital Markets, referring to Endocyte by its ticker symbol in a Feb. 24 note to investors. He expects the stock to rise to $23 a share.

But not everyone agrees.

Adam Feuerstein, a columnist at TheStreet.com, argued that the data Endocyte has presented to European regulators hinges on too few patients to be meaningful. He predicts they will wait, as their counterparts at the U.S. Food and Drug Adminsitration are, for better data from a larger Phase 3 clinical trial Endocyte currently has under way.

“My bet is European regulators decide the phase II data aren't sufficient to approve vintafolide right now and will instead wait for results from the phase III study,” Feuerstein wrote last week.

Vintafolide treats ovarian cancer patients with specific gene mutations, whose cancer has not responded to other kinds of treatment.

If approved in Europe, the drug would be marketed by New Jersey-based Merck & Co. Inc., which has funded Endoycte’s research and development expenses on the drug the last two years.

Endocyte would market a diagnostic imaging agent, called EC20, which is used to identify the patients in which vintafolide has been shown effective.

Endocyte reported last week that it ended the year with more than $148 million in cash. It predicts it will have $90 million to $100 million by the end of this year, which analysts and investors interpreted as a good sign for Endocyte’s ability to fund development of its other experimental drugs.