Endocyte Doubles After Drug Shown to Slow Lung Cancer

Endocyte Inc. (ECYT), a biotechnology company with no marketed products, almost doubled in value after its experimental medicine slowed the progression of lung cancer in a study.

The drug, vintafolide, also won the backing of a European Union panel to treat ovarian cancer along with an imaging agent that will help the therapy target the patients who will respond best, the West Lafayette, Indiana-based company said today in a statement. Endocyte surged 92 percent to $28.17 at the close in New York, it’s biggest single-day increase in almsot two years.

The trial results in non-small cell lung cancer are key because that study involves a larger patient population, Adnan Butt, an analyst at RBC Capital Markets in San Francisco, said in an e-mail. The mid-stage study showed vintafolide and chemotherapy reduced the risk of patients’ lung cancer worsening or of death by 25 percent compared with chemotherapy alone.

“We’ve studied vintafolide in two of the toughest-to-treat cancers and seen positive results and we view this as a continuing validation of the drug and the platform,” Chief Executive Officer Ron Ellis said on a conference call today.

The company could be a candidate for a merger or acquisition “with an attractive product, pipeline and technology,” said Butt, the analyst, who didn’t mention any potential suitors by name. The study confirms that Endocyte is “a platform technology company, along the same lines as” ImmunoGen Inc. (IMGN) and Seattle Genetics (SGEN) Inc. he said.

The start of a final-phase trial required for approval to sell the drug will depend on data still being gathered on how long vintafolide extends patients’ lives, Ellis said. That data may be available later this year, he said.

The timing will be up to partner Merck & Co., Endocyte said. Whitehouse Station, New Jersey-based Merck, which joined Endocyte in the development of vintafolide in 2012, fell 1.7 percent to $54.66.

To contact the reporter on this story: Anna Edney in Washington at aedney@bloomberg.net

To contact the editors responsible for this story: Reg Gale at rgale5@bloomberg.net Bruce Rule, Andrew Pollack

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