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Endocyte, Inc. (ECYT) Message Board

  • seriousjust seriousjust Nov 26, 2012 6:15 AM Flag

    Wedbush - Greg Wade

    GW: Endocyte (ECYT:NASDAQ) is a really interesting company. It has been observed that solid tumors and activated macrophages often express a folic acid transporter, and that unlike the folic acid channel, this can transport folic acid conjugated to a drug into the cell. Endocyte has proven it can trick advanced ovarian cancer cells into pumping a toxic chemotherapeutic into themselves via this transporter, and thus delay disease progression. The results were sufficiently compelling to convinceMerck & Co. Inc. (MRK:NYSE) to enter a co-development and commercialization partnership. Vintafolide (EC145) is a small molecule, and because of that, some studies have estimated a 30,000–50,000-fold improvement in penetration in solid tumors. And it is possible, using a radiolabeled version of the product, to image patients and identify those whose tumors might best be addressed with a folic acid-targeted chemotherapeutic. The ability to identify patients who might most benefit is an important part of the technology.

    Because strong results were shown in the company's randomized phase 2 study in women with advanced ovarian cancer, European regulatory authorities have indicated that they would be receptive to a filing for accelerated approval in Europe. We expect that to occur in Q4/12, with a new treatment for women with advanced ovarian cancer on the marketplace in the early part of 2014.

    TLSR: How big can vintafolide be if it is limited to just the ovarian cancer indication?

    GW: It would easily bring in several hundred million dollars in Europe, and there is a similar market opportunity in the U.S.

    TLSR: Does approval in the U.S. and Europe triple Endocyte's market valuation?

    GW: It is presently trading at roughly one time the potential sales it could achieve in Europe. The overexpression of folic acid transporters is a feature found in a variety of solid tumors, including those in lung cancer, which is one of the bigger problems we face. We are looking at a targeted therapy that could easily have billions of dollars of revenue.

    TLSR: What is the next inflection point for Endocyte? What catalyst is going to drive this stock?

    GW: The stock will likely appreciate in anticipation of a positive European regulatory decision in the early part of 2014, or late 2013. But we are focused on a number of potential catalysts in 2013.

    Specific to vintafolide, data from a randomized lung cancer study could be available in 2013. That would be very interesting to investors. In addition, as a result of the substantial cash payment that Endocyte received in the deal with Merck, it has the resources to drive three different programs into the clinic—another chemotherapeutic targeted with folic acid, an inflammation drug that targets activated macrophages using folic acid and, lastly, a promising treatment for polycystic kidney disease that focuses treatment to the cysts in kidneys of these patients. The company is going to have a dramatically expanding pipeline with a targeted small-molecule therapeutic agent, and will be approaching potential commercialization of that agent in the latter half of the year. Those are the catalysts, and I believe Endocyte is going to see its stock appreciate very significantly.

    TLSR: Is vintafolide partnered with Merck for both non-small cell lung cancer and for advanced ovarian cancer?

    GW: Yes. The global opportunity for the drug is partnered with Merck.

    TLSR: How many points does Endocyte give away to Merck?

    GW: It is 50/50.

    TLSR: This pipeline looks very deep, but I'm sure the market is not giving any value to the company's other candidates whatsoever.

    GW: That's right. The company has $200 million-plus in cash, and it is not even trading at two times cash. Based upon my conversations with investors, I think it is becoming a better-known story.

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