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.

What: Shares of Endocyte (NASDAQ:ECYT), a biopharmaceutical company focused on developing therapies to treat cancer and inflammatory diseases, collapsed as much as 63% after it and collaborative partner Merck (NYSE:MRK) announced that its phase 3 trial PROCEED was recommended to be stopped for futility following an interim analysis.

So what: According to the press release, the data safety monitoring board (DSMB) recommended the late-stage trial be stopped because "vintafolide did not demonstrative efficacy on the pre-specified outcome of progression-free survival in patients with platinum-resistant ovarian cancer." On the bright side, the DSMB did not find any safety issues with vintafolide. Merck and Endocyte will now pore over the data to determine what their next step will be for vinatfolide. Following the news, research firm RW Baird lowered its rating on Endocyte to neutral from outperform.

Now what: It's been a really odd year for Endocyte shareholders, who saw their investment basically double in March following a favorable view of Vynfinit (the EU name for vintafolide) by the Committee for Medicinal Products for Human Use in patients with platinum-resistant ovarian cancer. The experimental drug when combined with docetaxel was also successful in meeting its primary endpoint in a U.S. non-small cell lung cancer mid-stage study. Now, of course, we're finding out it failed to meet its primary endpoint in the U.S. for patients with platinum-resistant ovarian cancer and shares are now 80% off their highs set just weeks ago.

Overall, I can't say I was a big fan of Endocyte prior to this announcement, but believe the move lower may be a bit overdone. Yes, the loss of vintafolide revenue in the U.S. for PR ovarian cancer is going to sting, but it could be well on its way to a marketing authorization in Europe. It also has a fairly diverse pipeline considering its size with six ongoing clinical studies and three additional preclinical studies under way. Let's not forget as well that the company in April issued shares in April that netted $101.8 million in proceeds. Based on this offering, Endocyte has $233.3 million in cash and cash equivalents, which is practically what the company is being valued at as of this writing ($239 million). While Endocyte's clinical results will still need to do the talking, the risk-versus-reward ratio may have moved back toward "reward" at these levels.