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.