Please ensure Javascript is enabled for purposes of website accessibility
Free Article Join Over 1 Million Premium Members And Get More In-Depth Stock Guidance and Research

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

By George Budwell - Mar 21, 2014 at 9:40AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Today's top stories in health care and biotech.

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 ( MRK -0.74% )Endocyte (NASDAQ: ECYT), and Eli Lilly ( LLY -0.93% )

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 article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Merck & Co., Inc. Stock Quote
Merck & Co., Inc.
MRK
$73.34 (-0.74%) $0.55
Eli Lilly and Company Stock Quote
Eli Lilly and Company
LLY
$245.58 (-0.93%) $-2.30

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
624%
 
S&P 500 Returns
140%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 12/06/2021.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Our Most Popular Articles

Premium Investing Services

Invest better with the Motley Fool. Get stock recommendations, portfolio guidance, and more from the Motley Fool's premium services.