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 the developing of therapies to treat cancer and other inflammatory therapies, briefly spiked higher by as much as 10% after announcing the interim results from its phase 2b TARGET study of vintafolide as a treatment non-small cell lung cancer. Shares have since given up all of their gains and some, and are now down by about 3% on the day as of this writing.

So what: According to the company's press release, which actually came out this past Saturday during a presentation at the European Society for Medical Oncology in Madrid, vintafolide in combination with docetaxel "extended overall survival (OS) for patients with folate receptor (FR) positive recurrent non-small cell lung cancer (NSCLC) compared to patients receiving monotherapy docetaxel." Overall, patients receiving vintafolide exhibited a 27% reduction in risk of their disease worsening, while also demonstrating a 30% reduction in the risk of death relative to the docetaxel monotherapy arm. This risk reduction was especially pronounced in those who had adenocarcinoma, where death risk reduction fell 49% in a stratified analysis. Endocyte plans to wait for the final phase 2b data before deciding whether or not to move vintafolide on to phase 3 studies.

Now what: The good news is that it appears vintafolide isn't a dead duck after all, which was pretty much the consensus opinion on Wall Street after it failed to demonstrate efficacy during a planned interim analysis in the PROCEED trial intended to treat platinum-resistant ovarian cancer. In my personal opinion it's probable, at least based on this interim data, that Endocyte will push forward to a phase 3 study as long as the final OS data is consistent with today's interim results.

Of course, another factor to consider here is that Endocyte lost its licensing partner Merck (NYSE:MRK), which walked away after the PROCEED failure. For Endocyte it means all further development costs are going to come out of its own pockets. Luckily, the company has a decent amount of cash on hand and it should be able to successfully run a late-stage study if the final data confirms today's interim update. Though I'm by no means gung-ho on Endocyte's stock, I believe it's on the cheaper side of where it could be valued considering today's results and its current cash on hand. With that in mind I'd suggest adding Endocyte to your watchlist and keeping an eye out for its final TARGET results.

Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.

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