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Endocyte, Inc. (ECYT) Message Board

  • excaliburprime1@att.net excaliburprime1 Jan 16, 2012 4:15 AM Flag

    Risky Stock - Can win or lose a lot

    It goes without saying that this is a risky stock. While there is potential for great gain (see INHX as a prime example,) INHX was working on a drug to combat Hepatitis C, while the main drug ECYT is currently working on is to combat ovarian cancer (and only ovarian cancer resistant to the platinum based drugs which are currently the standard treatment.)

    That is not to say that the drug does not have great potential. The whole idea of using the class of drugs that ECYT is developing is conceptually sound, and if successful for its current lead compound, there is a great chance that the company gets bought out at a significant premium and everyone cashes in. That is the good news.

    The bad news, however, is that the lead drug does not perform well and the company inevitably folds. If you read their detailed November 14th 10-Q form, you can become aware of just how many enormous hurdles there are for these drugs to succeed.

    Finally, the timeline is likely to be quite long for you to see any big change from the current ~$3.50 stock valuation. There is only one catalyst coming soon, an application to commercialize their drug in Europe (which even they say is unlikely to succeed at this stage, without successful Phase 3 testing, so negative short-term catalyst.)

    Basically, the strategy of the company right now is to complete these inherently costly clinical trials and hope for the best, bleeding money all the while. The company has also issued only about ~37 million out of a total of 100 million shares, so the possibility for dilution is high.

    If you have a chunk of money you are willing to take a huge gamble on for about two years, then this might be a good one to try. If you are expecting short-term gains or a solid likelihood of success, I think you should look elsewhere. Of course, nothing said here is financial advice and I advise you all to do your own research and contact any duly authorized financial adviser you have before investing, but this is just my plain opinion.

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ECYT
7.26-0.38(-4.97%)Sep 19 4:00 PMEDT

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