Down 62%: Is Endocyte a Bad News Buy?

Endocyte  (NASDAQ: ECYT  ) shares were hammered today, after the data safety monitoring board halted a phase 3 trial for its flagship drug after concluding that the drug would not achieve its primary endpoint. Vintafolide was being tested for platinum-resistant ovarian cancer, and this news was obviously a big disappointment for Endocyte and partner Merck's (NYSE: MRK  ) shareholders. Then again, the drug is being tested in a variety of other indications -- including for non-small cell lung cancer and triple negative breast cancer -- and failure in one indication doesn't necessarily guarantee failure in others.

Given that Endocyte has a robust pipeline and over $200 million cash in the bank, could this sell-off be a little overdone? Put another way, could Endocyte now be a bad news buy? Motley Fool health care analysts Michael Douglass and David Williamson answer in the video below.

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Michael Douglass

As the Motley Fool's Health Care Editor/Analyst, I focus on all things health care -- although my greatest interest is in the megatrends reshaping the American health care system, including the Affordable Care Act, Accountable Care Organizations, a shifting regulatory landscape, and the new drug discoveries fundamentally changing disease management and treatment.

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Related Tickers

9/2/2015 12:44 PM
ECYT $5.23 Up +0.09 +1.75%
Endocyte, Inc. CAPS Rating: ****
MRK $52.67 Up +0.14 +0.26%
Merck & Co., Inc. CAPS Rating: ****