Why Endocyte Is Monday’s Biggest Winner

Print Email

Endocyte Inc. (NASDAQ: ECYT) kicked off the week with an incredible gain, making it one of the best, if not the best, performing stocks in Monday’s session. This massive gain came on the heels of an exclusive worldwide license of PSMA-617 from ABX. Overall this transaction could be absolutely transformational to this company.

So far 2017 has been a rough patch for Endocyte, with shares nearly cut in half. However, this deal could be the saving grace, both now and in the long term.

Under the terms of the agreement, Endocyte has exclusive worldwide rights to develop and commercialize PSMA-617. The company made an upfront payment of $12 million to ABX. Additionally, Endocyte issued 2 million shares of Endocyte common stock to ABX and issued a warrant for the purchase of up to 4 million additional shares of Endocyte common stock.

At the same time, ABX is eligible for regulatory and commercial milestones of up to $160 million, and tiered royalties beginning in the mid-teens.

Endocyte plans to move quickly into Phase 3 development of 177Lu-PSMA-617, a radioligand therapeutic (RLT) that targets the prostate-specific membrane antigen (PSMA), present in approximately 80% of patients with metastatic castration-resistant prostate cancer.

Mike Sherman, president and CEO of Endocyte, commented:

This transaction is transformational to Endocyte, accelerating our path to commercialization. 177Lu-PSMA-617 has the potential to be the first-in-class RLT to address both bone and soft tissue disease, and it is profoundly important to the many patients suffering from mCRPC. Our experience with PSMA targeting and companion imaging development, in addition to our relationships with distinguished prostate cancer investigators from around the world, uniquely position Endocyte to lead this therapy to registration. We intend to seek regulatory approval to initiate a Phase 3 registration trial of 177Lu-PSMA-617 in early 2018. By focusing the company’s resources on the execution of this program, we project trial completion as early as 2020.

Shares of Endocyte were last seen up about 90% at $2.68, with a consensus analyst price target of $2.00 and a 52-week range of $1.17 to $3.49.