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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