Top Stories in Biotech: Merck & Co., Endocyte, Inc. and Eli Lilly

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

Let's take a look at the top stories in biotech and health care this morning -- keep an eye out for Merck (NYSE: MRK  ) , Endocyte (NASDAQ: ECYT  ) , and Eli Lilly (NYSE: LLY  ) . 

Endocyte is a fountain of good news this morning
Shares of Endocyte are up over 100% in trading this morning and for good cause. In a press release, the company announced that the Medicinal Products for Human Use (CHMP) of the European Medicines Agency (EMA) issued a positive opinion for Vynfinit (vintafolide), Folcepri (etarfolatide) and Neocepri (intravenous folic acid) as potential treatments for adult patients with folate receptor-positive platinum-resistant ovarian cancer. While Endocyte developed these therapies, they are licensed out to Merck in ex-US territories under a deal worth up to $1 billion in milestone and royalty payments. Merck is also responsible for the clinical development of additional indications, per the terms of the deal. Final word from the EMA should come within three months of today's opinion. Shares of Merck are up slightly in trading. 

On the back of this regulatory news, Endocyte also announced that a mid-stage trial for vintafolide and docetaxel met its primary endpoint as a treatment for folate receptor (FR)-positive recurrent non-small cell lung cancer (NSCLC). Digging deeper into the press release, what's key to understand is that each drug met its primary endpoint in terms of median overall survival alone, but they have yet to achieve statistical significance when used in combo. Additionally, Endocyte reported that the combo arm of the study showed a higher rate of hematologic and peripheral neuropathy adverse events, which may be an important safety issue moving forward.

Looking ahead, it's important to understand that drugs for NSCLC are notorious for showing intriguing efficacy signals in mid-stage trials, only to peter out in larger, late-stage trials. Indeed, we saw this exact scenario unfold yesterday with GlaxoSmithKline's late-stage cancer vaccine MAGE-A3 that was once believed to be a major clinical breakthrough in the treatment of NSCLC. 

Eli Lilly also gets a positive nod from the EMA -- market appears unimpressed 
Pharma giant Eli Lilly announced this morning that the EMA's CHMP recommended its Type 2 diabetes drug empagliflozin for approval. Earlier this month, the U.S. Food and Drug Administration, or FDA, rejected empagliflozin due to manufacturing deficiencies at facilities owned and operated by Boehringer Ingelheim, Eli Lilly's partner for the drug.  Until these manufacturing problems can be cleared up, the drug's regulatory path to approval will be on hold, despite showing promising results in a late-stage study. What's notable is that empagliflozin is one of Eli Lilly's top clinical prospects and could become a blockbuster, if approved in both the U.S. and Europe. Yet, Eli Lilly shares barely moved upon the drug's rejection in the U.S. and haven't budged in premarket trading this morning following today's news. 

This stock could have even more potential than Endocyte
There's a huge difference between a good stock and a stock that can make you rich. The Motley Fool's chief investment officer has selected his No. 1 stock for 2014, and it's one of those stocks that could make you rich. You can find out which stock it is in the special free report "The Motley Fool's Top Stock for 2014." Just click here to access the report and find out the name of this under-the-radar company.


Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2884577, ~/Articles/ArticleHandler.aspx, 9/16/2014 11:37:26 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement