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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David Williamson has no position in any stocks mentioned. Michael Douglass has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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