Endocyte (ECYT) Surges on Deal with Merck

Shares of Endocyte, Inc. (NASDAQ:ECYT) are surging over 103% in morning trade after the company announced that it has entered into an agreement with drug giant Merck (NYSE:MRK) to develop and commercialize Endocyte’s novel investigational therapeutic candidate vintafolide (EC145)

Vintafolide is currently being evaluated in a Phase III clinical trial for platinum-resistant ovarian cancer, and a Phase II trial for non-small cell lung cancer (NSCLC). The two studies are also using Endocyte’s investigational companion diagnostic agent, etarfolatide (EC20).

Under the agreement, Merck, through a subsidiary, will gain worldwide rights to develop and commercialize vintafolide. Endocyte (ECYT) will receive a $120 million upfront payment and is eligible for milestone payments of up to $880 million based on the successful achievement of development, regulatory and commercialization goals for vintafolide for a total of six cancer indications. In addition, if vintafolide receives regulatory approval, Endocyte will receive an equal share of the profit in the United States (U.S.) as well as a double digit percentage royalty on sales of the product in the rest of the world.

“Vintafolide is a promising and innovative late-stage cancer drug candidate. In addition to pursuing the lead indication of platinum-resistant ovarian cancer, Merck plans to further evaluate its potential for treatment of multiple other cancer types,” said Peter S. Kim, executive vice president and president Merck Research Laboratories. “This agreement underscores our strategy of building a portfolio of oncology therapeutics that employ a companion diagnostic to facilitate selection of those patients most likely to respond to treatment.”

“Following a rigorous selection process we believe Merck represents the ideal strategic partner to achieve the full potential of vintafolide, accelerating our development in numerous cancers,” said Ron Ellis, Endocyte’s president and chief executive officer. “The agreement also positions us well to build our own commercial infrastructure for vintafolide in the U.S. and for etarfolatide worldwide.”

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Post Written By: Ed Liston Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.