Endocyte Reports Fourth Quarter and Year End 2012 Financial Results and Business Update

Endocyte Reports Fourth Quarter and Year End 2012 Financial Results and
Business Update

            - Endocyte and Merck Expand Vintafolide Development -

     - EMA Approval Decision for Vintafolide Expected by Year-End 2013 -

                  - Conference call today at 4:30 p.m. EST -

WEST LAFAYETTE, Ind., Feb. 25, 2013 (GLOBE NEWSWIRE) -- Endocyte, Inc.
(Nasdaq:ECYT), a biopharmaceutical company developing targeted small molecule
drug conjugates (SMDCs) and companion imaging diagnostics for personalized
therapy in cancer and other serious diseases, today announced financial
results for the fourth quarter and year ending Dec. 31, 2012, and provided a
business update.

"2012 was transformative for Endocyte, as we laid out a clear path toward
commercialization and further development of the Company's pipeline and
announced a landmark partnership with Merck for vintafolide," said Ron Ellis,
Endocyte's president and chief executive officer. "Our marketing authorization
application (MAA) filings for vintafolide and etarfolatide were accepted for
review by the European Medicines Agency (EMA), and we continued enrollment for
the Phase 3 PROCEED trial in platinum-resistant ovarian cancer and the Phase 2
TARGET trial in non-small cell lung cancer (NSCLC) while moving several other
candidates toward the clinic."

Ron Ellis added, "In addition, today we announced Merck's and Endocyte's plans
to initiate a Phase 2 randomized trial of vintafolide in folate
receptor-positive triple negative breast cancer in the second half of this
year. We have collaborated closely with Merck in the selection of this
promising indication with a large patient population and significant unmet
medical need. The randomized Phase 2 breast cancer trial underscores Merck's
commitment to the development of vintafolide in multiple indications. This
will be the fourth vintafolide clinical study, adding to the current studies
in ovarian cancer, NSCLC, and the combination study with carboplatin and
paclitaxel."

"We also announced our decision with Merck to amend the PROCEED trial design
to provide the option to enroll an additional 100 patients to support the
overall survival analysis. The decision to exercise the option and add the
extra 100 patients will be made by the Data and Safety Monitoring Board, who
could decide to stop the study at 250 patients (for futility, efficacy or
safety reasons) or to enroll 100 additional patients to support the final
overall survival analysis. If the 100 additional patients are enrolled, Merck
will pay 75 percent of the incremental cost, and we would expect enrollment to
take an additional nine - 10 months," Ron Ellis commented.

Recent Highlights

  *Acceptance by the EMA for review of the MAA filings for vintafolide and
    etarfolatide in platinum-resistant ovarian cancer
  *Trial enrollment on track for the Phase 3 PROCEED trial in
    platinum-resistant ovarian cancer and the Phase 2b TARGET trial in second
    line NSCLC
  *The option to add 100 additional patients to the PROCEED study to support
    overall survival analysis
  *A fourth vintafolide clinical study in folate receptor-positive triple
    negative breast cancer
  *On schedule to file two investigational new drug applications (INDs) in
    the next 12 months: a folate-targeted SMDC incorporating tubulysin as the
    drug payload and a prostate-specific membrane antigen (PSMA) targeted SMDC
    for prostate cancer

Fourth Quarter 2012 Financial Results

Endocyte reported a net loss of $0.8 million, or $0.02 per basic and diluted
share for the fourth quarter of 2012, compared to a net loss of $10.8 million,
or $0.30 per basic and diluted share, for the same period in 2011.

Revenue was $14.5 million for the fourth quarter of 2012 associated with the
collaboration with Merck. Of this revenue, $13.5 million related to the
amortization of (1) the $120.0 million upfront license payment; (2) a $5.0
million milestone payment received for the MAA filing during the fourth
quarter and (3) $9.5 million in reimbursable research and development
expenditures incurred prior to the fourth quarter of 2012. The remaining $1.0
million of revenue related to amortization of reimbursable research and
development expenditures incurred during the fourth quarter of 2012. The
amortization for both the upfront license fee and ongoing research and
development services are recognized as revenue ratably over a performance
period that began at the closing date of the agreement, April 27, 2012, and
will conclude at the end of 2014.

Research and development expenses were $10.5 million for the fourth quarter of
2012, compared to $7.8 million for the same period in 2011. The increase was
driven by an increase in clinical trial expenses, development costs of the
preclinical pipeline and compensation expense, partially offset by a decrease
in manufacturing costs related to process and method validations for
Endocyte's lead candidate's vintafolide and etarfolatide. Merck funds
manufacturing costs for vintafolide, along with a portion of the PROCEED trial
and all of the TARGET trial costs, under the companies' collaboration
agreement. Adjusted research and development expenses were $6.4 million for
the fourth quarter of 2012, net of the $4.1 million current period expenses
reimbursable by Merck referred to above.

General and administrative expenses were $5.0 million for the fourth quarter
of 2012, compared to $2.9 million for the same period in 2011. The increase in
expenses was attributable to establishing commercial capability and an
increase in compensation expenses.

Interest expense was $0 million in the fourth quarter of 2012 compared to $0.4
million in the same period in 2011. The company retired its credit facility in
the second quarter of 2012 and the average debt balance was $12.9 million in
the fourth quarter of 2011.

Cash, cash equivalents and investments were $201.4 million at Dec. 31, 2012,
compared to $204.7 million at Sep. 30, 2012 and $128.1 million at Dec. 31,
2011. The increase compared to Dec. 31, 2011 was attributable to the upfront
payment from Merck of $120.0 million, the $5.0 million milestone payment from
Merck in the current quarter for the MAA filing and Merck's reimbursement of
certain research and development expenses, which was partially offset by the
cash disbursements for operations and the repayment of the outstanding balance
on the credit facility.

Financial Guidance

Endocyte expects that its cash, cash equivalents and investments will be
between $145.0 - $160.0 million at Dec. 31, 2013.

Endocyte expects 2013 expenses, net of Merck reimbursements, of approximately
$65.0 million. The increase in spending supports the following objectives:

  *Pre-launch expenses in preparation of a potential approval of vintafolide
    and etarfolatide in Europe
  *Higher enrollment in the PROCEED study
  *Increase in development expenses to support two new products expected to
    enter the clinic

"Our disciplined expense management, combined with the Merck partnership,
allowed us to build a very secure financial base during 2012," stated Mike
Sherman, Endocyte's chief financial officer. "In 2013 we expect to invest in
building value for Endocyte, pursuing key initiatives including expanding our
commercial capability in anticipation of potential EU approval, conducting the
PROCEED trial, and advancing development of new SMDCs."

Upcoming Expected Milestones

  *Receive EMA decision on MAAs in the fourth quarter of 2013
  *File IND and initiate clinical trial for folate-targeted tubulysin
    therapeutic in the first half of 2013
  *File IND and initiate clinical trial for PSMA-targeted tubulysin
    therapeutic and companion imaging agent near the end of 2013 or early 2014
  *Under collaboration with Merck, initiate randomized trial for vintafolide
    in folate receptor-positive triple negative breast cancer in the fourth
    quarter of 2013
  *Top-line data expected from the Phase 2b TARGET trial in NSCLC in the
    first half of 2014
  *Completion of enrollment of 250 folate receptor-positive (100%) patients
    in the Phase 3 PROCEED trial and decision on the potential expansion of
    enrollment in the first half of 2014

Conference Call

Endocyte management will host a conference call today at 4:30 p.m. EST.

U.S. and Canadian participants: (877) 845-0711
International:                  (760) 298-5081

A live, listen-only webcast of the conference call may also be accessed by
visiting the Investor Relations section of the Endocyte website,
www.endocyte.com.

A replay of the call will be available beginning at 7:30 p.m. EST on Feb. 25,
until midnight EST on Mar. 4, 2013. To access the replay, please dial (855)
859-2056 (US/Canada) or (404) 537-3406 (International) and reference the
conference ID 93752119. Additionally, the webcast will be recorded and
available on the company's website for two weeks following the call.

Note on Non-GAAP Financial Measure

As used in this press release, the term "adjusted research and development
expenses" is a financial measure that is not expressly recognized by
accounting principles generally accepted in the United States, or GAAP.
Adjusted research and development expenses are net of the amounts reimbursable
during a period by Merck pursuant to the collaboration agreement for
vintafolide which for US GAAP purposes are ultimately recorded as revenue.
Endocyte provides adjusted research and development expense to enhance
comparability with prior periods and uses it as a basis for guidance regarding
future operations. A reconciliation of this non-GAAP measure to research and
development expenses computed in accordance with GAAP is included in the
financial tables below.

About Endocyte

Endocyte is a biopharmaceutical company developing targeted therapies for the
treatment of cancer and other serious diseases. Endocyte uses its proprietary
technology to create novel SMDCs and companion imaging diagnostics for
personalized targeted therapies. The company's SMDCs actively target receptors
that are over-expressed on diseased cells, relative to healthy cells. This
targeted approach is designed to enable the treatment of patients with highly
active drugs at greater doses, delivered more frequently and over longer
periods of time than would be possible with the untargeted drug alone. The
companion imaging diagnostics are designed to identify patients whose disease
over-expresses the target of the therapy and who are therefore more likely to
benefit from treatment.

For additional information, please visit Endocyte's website at
www.endocyte.com.

Forward Looking Statements

Certain of the statements made in this press release are forward looking, such
as those, among others, relating to the potential regulatory approval and
commercial launch of products, the success of the Merck collaboration, the
initiation of future clinical trials, the enrollment period for and
availability of data from ongoing and future clinical trials, and the
company's timeline for seeking regulatory approval to initiate clinical trials
for new compounds. Actual results or developments may differ materially from
those projected or implied in these forward-looking statements. Factors that
may cause such a difference include risks that the company may experience
delays in the completion of its clinical trials (whether caused by
competition, adverse events, patient enrollment rates, unavailability of DOXIL
or CAELYX, regulatory issues or other factors); risks that data from its
clinical trials may not be indicative of subsequent clinical trial results;
risks related to the safety and efficacy of the company's product candidates;
the goals of its development activities; estimates of the potential markets
for its product candidates; estimates of the capacity of manufacturing and
other facilities required to support its product candidates; projected cash
needs; and expected financial results. More information about the risks and
uncertainties faced by Endocyte, Inc. is contained in the company's periodic
reports filed with the Securities and Exchange Commission. Endocyte, Inc.
disclaims any intention or obligation to update or revise any forward-looking
statements, whether as a result of new information, future events or
otherwise.

Endocyte, Inc.
Statements of Operations
(in thousands, except per share amounts)
(unaudited)
                                                                
                                  For the Three Months  For the Twelve Months
                                  Ended December 31,   Ended December 31,
                                  2011       2012       2011       2012
                                                                
Collaboration revenue              $191       $14,454    $191       $34,682
Costs and expenses:                                              
Research and development           7,753      10,518     28,828     35,671
General and administrative         2,862      4,950      10,000     15,054
Total costs and expenses           10,615     15,468     38,828     50,725
Loss from operations               (10,424)   (1,014)    (38,637)   (16,043)
                                                                
Interest income                    38         191        129        328
Interest expense                   (351)      (1)        (1,988)    (629)
Other expense, net                 (17)       (25)       (36)       (948)
Net loss                           $ (10,754) $ (849)    $ (40,532) $ (17,292)
                                                                
Net loss per share – basic and     $ (0.30)   $ (0.02)   $ (1.40)   $ (0.48)
diluted
                                                                
Weighted average number of common
shares used in net loss per share  35,745,364 35,910,490 29,003,991 35,858,757
– basic and diluted


Endocyte, Inc.
Balance Sheets
(in thousands, except per share amount)
                                                                
                                                    As of        As of
                                                    December 31, December 31,
                                                    2011         2012
                                                                (unaudited)
Assets                                                           
Cash, cash equivalents and investments               $128,085     $201,378
Other assets                                         3,590        12,701
Total assets                                         $131,675     $214,079
                                                                
Liabilities and stockholders' equity                            
Current liabilities                                  $5,470       $10,478
Deferred revenue, current portion                    —            51,993
Long-term debt, net of current portion               12,833       —
Deferred revenue, net of current portion             —            51,993
Other liabilities, net of current portion            —            42
Total stockholders' equity                          113,372      99,573
Total liabilities, convertible preferred stock and   $131,675     $214,079
stockholders' equity


Endocyte, Inc.
Reconciliation of Adjusted Research and Development Expenses
(in thousands, unaudited)
                                                                
                             For the Three Months Ended For the Twelve Months
                              December 31,               Ended December 31,
                                                                
                             2011         2012          2011       2012
Research and development      $7,753       $10,518       $28,828    $35,671
expenses
Amounts reimbursable by Merck (394)        (4,098)       (1,681)    (11,861)
Adjusted research and         $7,359       $6,420        $27,147    $23,810
development expenses

CONTACT: Stephanie Ascher, Stern Investor Relations, Inc.,
         (212) 362-1200, stephanie@sternir.com
         Martina Schwarzkopf, Ph.D., Russo Partners,
         (212) 845-4292, martina.schwarzkopf@russopartnersllc.com
         Tony Russo, Ph.D., Russo Partners,
         (212) 845-4251, tony.russo@russopartnersllc.com